ANNUAL REPORT

Coffee Day Enterprises Limited

 the
lifestyle
brew!
Coffee Day Enterprises, on the back of the iconic
Café Coffee Day lifestyle brand, is expected to
emerge as a significant beneficiary of revival in
India’s urban discretionary consumption space.
Today, with 1,682 stores spread across 241 Indian
cities and towns (as on 31 March 2017), Café
Coffee Day is not only India’s largest chain of
coffee stores but also an integrated ‘bean-to-cup’
group model that ensures that only the finest and
most delectable coffee reaches our consumers.
With a solid track record of having reported a
15% CAGR gross retail revenue growth of coffee
business over the last five years, the Company
is well-positioned to capitalise on prevailing
opportunities and grow stronger value-creation
platforms.
 message from
the chairman

I am delighted to share the progress made in the last year on the FY17: THE YEAR IN A NUTSHELL
occasion of our second year as a public listed company. With strong business fundamentals and a slew of innovative
Since the inception of our brand Café Coffee Day in 1996, we Food & Beverage launches, our coffee retail business reported a
have continued in our pursuit of turning coffee into a social idea. robust gross operational revenue growth of 14% and retail EBIDTA
In a fast-changing world, our drive to promote a coffee drinking growth of 8% over the last year. While the Food & Beverage retail
culture and offer a space for people to connect over a cup has market landscape continues to look challenging, I am pleased
remained constant. Today, with over 2500 cafés, express outlets, to share that Café Coffee Day recorded another year of positive
coffee points and over 41,500 vending machines in a vast majority same-store-sales growth of 5.02% in FY17. The performance is a
of corporates, we are touching the hearts of millions of Indians testimony of our strongly focused consumer engagement model
each day across more than 1000 cities and towns. built over the years.

Today, India is going through an important phase of transition, FY17 was another interesting year with a healthy mix of new
with GST and Digitisation revolutionising the way business is initiatives and expansion based on strong fundamentals.
conducted, and we are gearing up to deliver in this New Age.

002 | COFFEE DAY | ANNUAL REPORT 2016-17

Our home delivery business expansion continued and we got SICAL
closer to our consumer than ever before by delivering across With the implementation of ‘Make in India’ and other government
7 major cities. Based on strong consumer insights, we kept initiatives, the logistics industry is set to become more centralised,
delighting the market with refreshing launches like Inverted efficient and tax compliant. Third party logistics and supply chain
Cappuccino, Filter Coffee, wellness range of coconut drinks, management are gaining traction and are set to consolidate in
sugarcane juice, international burgers and sundaes at the café, the coming years, especially in industries such as automobiles,
alongside our new energy drink ‘Storm’, ‘Soul’ mineral water, and pharmaceuticals, consumer durables and FMCG.
our cold coffee ‘Frappe Chill’ in the packaged products category.
The Company’s growth (Gross revenues growth of 21% and
The response to our mobile app has been heartening, with EBIDTA growth of 43%) has been propelled by new business
over 3 million downloads in a year. This drive towards a data- initiatives and additional contract gains. SICAL Iron Ore Terminals
rich organisation is helping us build superlative loyalty, and the Limited, a subsidiary of SICAL Logistics Limited, has executed the
app has further shrunk the distance between our brand and License Agreement with Kamarajar Port for the modification of
consumers. the existing iron ore terminal to handle common user coal. The
Beyond cafés, we are strengthening the reach to our customers financial closure and approval of the Detailed Project Report have
by expanding proactively into the corporate segment. With been cleared, and the Company is in the process of implementing
unique smart solutions, our vending machines have made steady the project.
inroads into the corporate sector in FY17. With an eye on growing
TANGLIN DEVELOPMENTS
this business, we are deepening our focus on hotels, restaurants
The growth of commercial real estate technology parks depends
and non-traditional channels as business verticals.
on the service and industrial sectors, where India continues to be
THE COFFEE INDUSTRY: A LOT CAN HAPPEN OVER COFFEE an attractive destination for major international players. Tanglin
As a group which goes beyond coffee, our core remains intact. offers customised facilities in infrastructure for various technology
While the category is still nascent, the café chain market has been enterprises in Bengaluru and Mangaluru. Here, our gross revenue
growing at a CAGR of 20% since 2014, and our belief in its huge continues to increase steadily and has touched Rs.139.2 Cr in
potential is supported by the robust Indian consumption story: FY17. Our 3.3 million square feet on offer continue to yield rental
returns, while another 7,50,000 square feet will be occupied by
Ÿ Consumer market of the future: This is fuelled by favourable
our clients within the forthcoming year.
demographics of a young India with the median age at 27
years. WAY2WEALTH

Ÿ Increasing per capita consumption over the years: Our GDP Our investment advisory and financial intermediation enterprise
has been growing at over 7%, and this augurs well for the focuses on qualitative financial products and long-term wealth
economy. Consistent growth will ensure increase in disposable creation. Following regulatory initiatives by the government, our
incomes and aspirations beyond metros, and a new Indian financial markets have seen greater participation and economic
consumption story will emerge. activity. We expect a continuation of these trends going forward.

AN EXPANDED PORTFOLIO: OUR RESILIENT SELF- WE ARE A PART OF SOCIETY

PROPELLED BUSINESSES With a commitment to strengthen the communities with whom
Our diverse businesses are charting their own course successfully. we work, our coffee is selected and purchased ethically, ensuring
They continue to be self-sustaining, with robust internal revenue that it protects the ecological balance of our UTZ certified
generators in place. At the group level, our consolidated gross plantations and surrounding forest areas, while safeguarding the
revenue increased by 15% and achieved a profit after tax of Rs.46.2 interests of coffee growers.
Cr in FY17. I am pleased to share key performance highlights: We also contribute to society with the following long-term
initiatives:

CHAIRMAN MESSAGE | 003

Yuva - Harnessing youth potential: Yuva, our vocational training of consumer lives. New age products and contemporary cafés will
college, is managed by the SVGH Trust, offering a fully funded further strengthen this relationship.
programme for rural youth from underprivileged backgrounds to
THE POWER OF HUMAN CAPITAL
learn hospitality and life skills. Over a period of 12 years, our team
at Yuva has trained and helped 6000 youth become self-sufficient. Our ability to scale up has been possible due to significant
additions to our middle management, including women in
Encouraging ‘Silent Brewmasters’: We are engaged in a
leadership roles. I am proud of our seasoned leadership and the
partnership with NGOs ‘Enable India’ and ‘Gram Tarang’ to employ
foundation they are creating for a promising future. The aim has
youth with disabilities. We have employed more than 150
been to deepen our expertise in two main areas:
professionals with speech and hearing impairment – our Silent
Brewmasters – and are committed to increasing this count over Ÿ Growth Mindset: Through sales capability across businesses
the years. Ÿ Innovation Mindset: Through design capability (across new
product development, store design and the corporate design
THE ROAD AHEAD
team)
As we look towards the future, I would like to reiterate our
commitment to enhancing shareholder value for Coffee Day We are also building strength at the base of the pyramid through
Enterprises Limited. We aspire to deliver sustainable growth, which our Management Trainee Programme, expanding capacity and
is ahead of the country’s GDP and sets up good performance capability to create a pipeline of future leaders.
benchmarks in the industry. As always, I would like to thank you, our shareholders, for reposing
While considerable groundwork is yet to be done, the group is your trust in us. As a performance-driven company at the cusp of
making good headway, with certain key factors that will ensure exponential growth, with lots of coffee and conversations, we will
our success on the road ahead: create greater value for stakeholders and society.

Exciting Innovations: In response to an increase in consumer Lets keep brewing new possibilities!
preferences for a healthier lifestyle, we are continuously evolving
our menu.
Best regards,
Going Digital: Technology has disrupted our way of life like never
before, and we will keep investing in it to engage with young
consumers through apps, thus getting nuanced insights into
Mr. V.G. Siddhartha
customer behaviour.
Chairman and Managing Director
Great Consumer Connect: Incomparable reach across the country
with good value has ensured that we become an inseparable part

004 | COFFEE DAY | ANNUAL REPORT 2016-17

CHAIRMAN MESSAGE | 005
contents
006 | COFFEE DAY | ANNUAL REPORT 2016-17
01 02 03
BUSINESS MANAGEMENT FINANCIAL
OVERVIEW & GOVERNANCE STATEMENTS
Message from the Chairman 002 Board’s Report 024 CDEL Standalone
Financial Statements 081
About us 008 Annexure - 1
Management’s Discussion CDEL Consolidated
Our Board of Directors 013 Financial Statements 138
and Analysis 030
Our Financial Journey 014 CDGL Consolidated
Annexure - 2
Our Business Drivers 017 Corporate Governance Report 035 Financial Statements 236

Corporate Social Responsibility 018 Annexure - 3 Notice 312

Nomination & Remuneration Policy 050
Corporate Information 021
Annexure - 4
Conservation of Energy,
Absorption of Technology & Foreign
Exchange Earnings & Outgo 053
Annexure - 5
Secretarial Audit Report 054
Annexure - 6
Extract of Annual Return 057
Annexure - 7
Business Responsibility
Report 2016-17 068
Annexure - 8 078

CONTENTS | 007
coffee day enterprises, the parent company of
the coffee day group, has diversified business
interests in the areas of coffee retailing
and trading, technology parks, logistics,
investments, hospitality and financial services.

OUR VISION SUBSIDIARIES (MAJOR)

We are where coffee is today and where it’s going next. We bring Ÿ Sical Logistics Limited; logistics and warehousing; primed to
coffee from the bean to the cup. Over time we’ve developed the capture the benefits arising out of GST
science of nurturing the yield, how to roast it to coax just the right
Ÿ Way2Wealth Securities Private Limited; financial services;
flavor from it and how to extract that flavor into the brew. Yet,
extensive network which makes it well-positioned to capture
we do more than please the palate. In every bean, we see the
growth in financial services penetration in India
potential of each day ready to be released.
Ÿ Tanglin Developments Limited; Tech Park in Bengaluru and
Coffee is our purpose. It inspires us because we can see the
Mangaluru; assets well-placed in high-growth micro-markets
boundless possibilities in the lives of our guests.
Ÿ Coffee Day Hotels and Resorts operates under the brand name
OUR MISSION ‘The Serai’ in Chikmagalur, Bandipur, Kabini and Barefoot Resort
To find and extract the boundless potential in all that we do—just in the Andamans; growing need for leisure and downtime
as we have for every cup of coffee. among hectic lifestyles

ABOUT US Coffee business: The Company is engaged in the coffee business

through its subsidiary, Coffee Day Global Ltd and its subsidiaries.
Coffee Day Enterprises, through its subsidiaries, operates in the
Besides, it has the largest chain of cafés in India. The Company is
chained café segment in India under its flagship business, Café
also into the vertically-integrated coffee business, which ranges
Coffee Day. The Company opened its first Café Coffee Day outlet
from procuring, processing and roasting coffee beans to retailing
in Bengaluru in 1996 and currently has a network of 1,682 café
coffee products across various formats. In the retail café business,
outlets across 241 cities and 537 Coffee Day Xpress kiosks across
Café Coffee Day, The Lounge and The Square constitute the café
22 cities in India. The Company possesses the largest network of
network outlets.
cafés compared to any other player in the segment. With a rapidly
sprawling network, the Company is better positioned than its Logistics: Sical Logistics, a listed entity on the BSE and NSE, is a
competitors to capture the benefits of rising middle-class income subsidiary of CDEL and is in the business of providing integrated
levels, which would aid in increasing discretionary consumer logistics solution. The Company has an equity holding of 52.83%
spending. in Sical Logistics.

008 | COFFEE DAY | ANNUAL REPORT 2016-17

ABOUT US | 009
Technology parks: Tanglin Developments, a fully-owned CERTIFICATIONS
subsidiary, is engaged in the development and management of Ÿ CE marking for vending machines
technology parks and related infrastructure, offering customised
Ÿ Quality Management Systems certification, ISO 9001:2008 for
infrastructure facilities for IT-ITeS enterprises. TDL has two
design, development, production (assembly) of coffee and
technology parks, ‘Global Village’ and ‘Tech Bay’. They are situated
beverage vending machines assembly unit (B2C plant)
in Bengaluru and Mangaluru, respectively.
Ÿ RoHS certification
Hospitality: The Company owns and operates three luxury resorts,
two of which are operated by Coffee Day Hotels & Resorts Pvt Ltd, Ÿ Halal Certification
a fully-owned subsidiary. The luxury resorts are operated under
Ÿ Sustainable Supply Chain – UTZ Certification
the brand ‘The Serai’. The resorts are situated at three locations in
Karnataka, viz. Chikmagalur, Bandipur and Kabini. The Company Ÿ Rainforest Alliance Certification
also holds a minority interest in and manages a luxury resort in Ÿ Food Safety Management Systems Certification for Roasting
Andaman and Nicobar Islands. Unit - ISO 22000:2005 and BRC Issue-6 certifications for
Financial services: Way2Wealth Securities Pvt Ltd, a subsidiary processing and packaging of roasted coffee beans and
of CDEL, is a retail-focused investment advisory company with powder.
branches (owned and franchised) across 21 states in India. It is in Ÿ Food Safety Management Systems Certification for CCD (pan-
the business of providing wealth management, broking, portfolio India) - ISO 22000:2005 certification for handling, preparing
management and investment advisory services. The Company and serving food and beverages in cafés
has an equity holding of 85.53% in Way2Wealth Securities Pvt
Ltd. Besides these businesses, the Company also has an equity AWARDS AND ACCREDITATIONS
holding of 16.70% (effective holding being 15.99%) in IT company 2007 - Café Coffee Day won the Times Food Award under the
MindTree, which is listed on the BSE and NSE. category of “Best Coffee Bar” from Times of India

2008 - Café Coffee Day won the Burrper’s Choice Award for being
voted as the “Coolest Café” by users of burrp.com

2009 - CDGL won the award for “Retailer of the Year” under the
category of Food & Beverages (catering services) by Asia Retail
Congress 2009

2011 - Café Coffee Day won the Indian Hospitality Excellence

Award under the category of “India’s Most Popular Coffee Joint:
2010”

2012 - Café Coffee Day was ranked as 26th Most Trusted Service
Brand in India and as 2nd Most Exciting Brand under the category
of “Food Services” in India under a survey done by Brand Equity
(Economic Times)

010 | COFFEE DAY | ANNUAL REPORT 2016-17

ABOUT US | 011
2012 - Café Coffee Day won the Best Coffee Bar Award from 2014 - Our Promoter was awarded with ‘ET Retail Hall of Fame’ for
mouthshut.com his contribution to the growth in retail sector

2013 - Café Coffee Day was ranked as 26th Most Trusted Service 2015 - Café Coffee Day was awarded ‘Champion Employer’ by
Brand in India under a survey done by Brand Equity (Economic MORD (Ministry of Rural Development) to set up a skill training
Times) academy to train youth of India. This is part of the Government’s
‘Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY)
2013 - Café Coffee Day was awarded ‘The NCPEDP – Shell
initiative to impart skills to rural and urban underprivileged youth
Helen Keller Award 2013’ by National Centre for Promotion of
and generate employability.
Employment for Disabled People for being a role model company
in helping to generate employment opportunities for person 2015 - Café Coffee Day was ranked as 4th Most Trusted Brand in
with disabilities India in the Foods Services and as 4th Most Exciting Brand under
the QSR category in India, under a survey done by Brand Equity
2013 - CDGL was awarded as the Best Retailer under the category
(Economic Times)
of “Best Customer Service in Café Restaurant” by Star Retailer
Awards 2013 2016 - Café Coffee Day received the award in the best ‘Café
Restaurant’ category at the 5th Annual Indian Retail & e-Retail
2013 - Café Coffee Day won the Brand Excellence Award in retail
Awards 2016
sector from ABP news
2017 – Won Bronze at the prestigious Goafest Creative ABBY 2017
2014 - CDGL was awarded bronze prize by the Coffee Board of
Awards in the Retail Advertising category for ‘Magical Brews’ PR
India for being the third best exporter of green coffee during
Campaign
2012-13
2017 – Café Coffee Day profiled in The Economic Times ‘Iconic
2014 - CDGL was awarded ‘Retailer of the Year’ (Organisation Food
Brands of India’ feature
and Grocery) for retail excellence by ABP News
2017 - Café Coffee Day declared the ‘Best Player in Coffee Chain’
2014 - CDGL was awarded ‘Retailer of the Year’ for brand
category in the country in The Week survey done in partnership
excellence by ABP News
with IMRB - India’s Best Restaurants-2017
2014 - Café Coffee Day was ranked as 22nd Most Trusted Service
Brand in India, as 27th Most Exciting Brand in India and as 2nd OUR LISTING
Most Exciting Brand under the category of ‘Food Services’ in India, Raising Rs.1,150 crore through a recent IPO (November 2015), the
under a survey done by Brand Equity (Economic Times) Company commands a market capitalization of Rs.4,791.60 crore
as on 31st March 2017. 52.62% of the Company’s equity is owned
by the promoter group.

012 | COFFEE DAY | ANNUAL REPORT 2016-17

our board of directors

MR. V. G. SIDDHARTHA MR. S. V. RANGANATH MR. M. D. MALLYA

Chairman and Managing Director Independent Director Independent Director

DR. ALBERT HIERONIMUS MR. SANJAY OMPRAKASH NAYAR MRS. MALAVIKA HEGDE
Independent Director Non-Executive, Non-Executive,
Nominee Director Non-Independent Director

BOARD OF DIRECTORS | 013

our financial journey
At our Company, our GROSS REVENUES (RS.CRORE) Our EBITDA grew EBITDA (RS.CRORE)
revenues grew from 2,515 2,725 3,094 3,552 at 5.4% in FY2017 456 533 646 681
Rs.3, 094 crore in FY compared to
2015-16 to Rs.3,552 previous year FY2016
crore in FY2016-17 as on account of
we were successful increase in revenue
in establishing and efforts in cost
and monetizing reduction.
the café culture
in the country
through providing
our customers
with a superlative
experience, great
service and an
innovative menu.
2013-14

2014-15

2015-16

2016-17

2013-14

2014-15

2015-16

2016-17
Our same store SSSG (%) At our Company, we DEBT-EQUITY RATIO
sales (SSSG) at 9.13 3.06 5.39 5.02 reported a debt- 3.76 4.00 1.35 1.56
5.02 % in FY2016- equity ratio of 1.56x,
2017 as against which is reasonable
5.39% during the considering the
previous fiscal year business requiring
due to a decrease constant capital
in discretionary for investment and
spending. growth.
2013-14

2014-15

2015-16

2016-17

2013-14

2014-15

2015-16

2016-17

014 | COFFEE DAY | ANNUAL REPORT 2016-17

FINANCIAL JOURNEY | 015
016 | COFFEE DAY | ANNUAL REPORT 2016-17
our business drivers

LARGE AND DIVERSIFIED STORE BASE

Coffee Day Enterprises operates the largest network of cafés
compared to any other peer. Besides, the Company possesses the
largest number of consumer touch-points compared to any other
company operating in the café retail space.

With a sprawling network of 1682 Café Coffee Day outlets spread

across 241 cities and towns in India and 537 Coffee Day Xpress
kiosks, Coffee Day Enterprises is better-positioned than its peers
to capture the benefits of rising middle-class income levels,
which would aid in increasing discretionary consumer spending.

CONSISTENT TOPLINE GROWTH

Our topline has grown at a healthy 10.4% CAGR over the past
five years ending FY2016-17. Moreover, our coffee and related
business segments, which contributed 51% to total sales in
FY2016-17, and also the retail gross revenue grew at a steady pace
of 15% CAGR during the same period. At our Company, we have
also been able to maintain competitive prices across product
offerings at our outlets (vis-à-vis peers), which has helped drive
revenues for the coffee business.

STRONG BRAND IDENTITY IN FORM OF ‘CAFÉ COFFEE DAY’

The flagship café business, Café Coffee Day, has a strong and
undisputed brand recall in the minds of consumers and has a
significant following, especially among India’s youth, with the
result of generating repetitive footfalls. With India being a young
country (median age of ~27 years), Café Coffee Day will be a direct
beneficiary of the premiumisation in the beverages industry and
growing brand consciousness among the youth on the back of
an increase in consumer preference for quality products.

BUSINESS DRIVERS | 017

corporate social responsibility

We foster a socially-responsible corporate culture by following Ÿ Ensuring environmental sustainability through ecological
a balanced approach to business, addressing social and conservation and regeneration and promoting bio-diversity
environmental challenges through required investments,
ACTIVITIES
technological upgradation, necessary resource allocation and
stakeholder engagement. Finding potential in coffee is a vital part of our success. That’s why
our diversified businesses find potential in everything we do.
CSR VISION Likewise, our CSR activities also revolve around finding potential
Ensuring healthy and sustainable environmental practices with in the people, society and the environment. Bringing people
a vision of socio-economic development of the community together and making a difference in people’s lives by inspiring
in which we operate through various initiatives so as to build a change is an integral part of our social activity.
better tomorrow.
Our multi-disciplinary team involves personnel from various
CSR MISSION sectors such as the EHSS (environment, health, safety and social),
development sector, sustainability, R&D, food safety management
Ÿ To be a responsible organisation
and external consultants. The team proactively engages in finding
Ÿ To empower the marginalised by generating sustainable efficient methodologies for our CSR initiatives with a vision, which
livelihood effectively translates into a robust and sustainable CSR strategy.

018 | COFFEE DAY | ANNUAL REPORT 2016-17

ETHICALLY PURCHASED AND RESPONSIBLY PRODUCED the cause. Our longstanding association with the Ministry of
PRODUCTS Rural Development has assisted us in providing globally-relevant
Our determination towards sustainability can be established by employability to rural youth.
our UTZ and Rainforest Alliance certifications for our major coffee Our social transformation initiative is led by SVGH Vocational
suppliers’ estates. Training College located at Chikmagalur. It lays the foundation
Coffee Day Global was the first Company in India to obtain of Coffee Day’s value system. The Foundation’s aim is to promote
UTZ certification for some of its estates and processing facilities education within economically underprivileged rural youth and
at Hassan for responsible coffee production. This certification support them to be independent and responsible. The college
acknowledges that the Company adheres to the international has successfully trained over 6,000 students, many of whom have
standards which represent the blueprint designed to conserve found employment at the Company’s outlets across the country.
bio-diversity by ensuring environmental sustainability through The entire expense of the course, including education, food,
ecological conservation and regeneration, and also improve accommodation, uniforms and transport facilities is borne by the
livelihoods in the value chain by ensuring socio-economic promoter.
community development. In states like Jammu and Kashmir and Odisha, the majority of the
We are committed to offering only ethically-purchased and population, particularly those residing in villages and rural areas,
responsibly-produced products of the highest quality. We honor do not have access to vocational education or employment
this commitment through our coffee purchasing practices. The opportunities. In our endeavour to embrace corporate social
UTZ code of conduct sets guidelines for better farming methods responsibility, we have created avenues for youth that empower
and working conditions, as well as better care for nature and them to realise their potential and to move from a state of
future generations. It makes the farmland more sustainable ‘anticipated opportunity’ to that of ‘realised opportunity’.
and improves the life of workers and their families by enabling
DIFFERENTLY-ABLED: SILENT BREWMASTERS
them to sell their coffee at a premium. This enables us to balance
Coffee Day Global has tied up with NGOs ‘Enable India’ and
profitability with a social conscience. By adhering to the above,
‘Gram Tarang’ to employ differently-abled individuals at suitable
the group is working towards enhancement of the social,
positions across several divisions of the Company. We recognise
environmental, managerial and economic conditions of coffee
social responsibility as an integral part of our corporate citizenship.
farmers across the supply chain.
Motivated by our value system, we commit to nurture societies
We are also promoting UTZ certification program for our other through inventive and pioneering solutions to satisfy evolving
coffee suppliers’ estates (over 240 planters owning around 21,000 societal needs with a special emphasis on people with disability.
acres of coffee estates) located in the districts of Chikmagalur and Over 150 speech and hearing impaired people are employed at
Hassan. our cafés, fondly called the ‘silent brewmasters’. Café Coffee Day
Another notable achievement for us has been the certification of also provides employment to the differently-abled youth not only
Rainforest Alliance for our promoter’s major coffee estates. This to open up a source of livelihood but also to encourage them to
has just strengthened our endeavour in mitigating the impact of be independent and self-reliant.
climate change.
PROMOTING GENDER EQUALITY AND EMPOWERING
SUSTAINABLE EMPLOYEE ENGAGEMENT AND WOMEN
LIVELIHOOD-ENHANCING VOCATIONAL SKILLS. We believe that women play a central role in the entire
We have succeeded in establishing strategic partnerships with development process. Therefore, at Coffee Day, we are extremely
various training bodies, non-governmental organisations and focused on having a diverse workforce by recruiting, training and
Government authorities through the years which help us in promoting qualified female employees. We strive to ensure their
providing skill training and employability to the underprivileged. overall well-being and to ensure this we have an active sexual
harassment prevention/redressal committee. It is ensured that
To name a few, Dr. Reddy’s Foundation (pan-India), Gram Tarang
all types of grievance related to the workplace are redressed
Foundation (Odisha) and Sarthak (North India) have been
without any undue delay and in a fair manner conducive for
instrumental in helping us make a valuable contribution towards
better employer and worker relations.

CORPORATE SOCIAL RESPONSIBILITY | 019

Women formed 24.5% of the workforce in FY2016-2017 as Coffee by-products, including husk, are used as energy/raw
compared to 23.48% in FY2015-2016. It has been a continuous material in briquettes for manufacturing and other industries for
effort to increase the proportion of women employees in the composting. Leftover lamination paper used in packing materials
organisation. is distributed to children in Government schools for book-binding.

ENERGY MANAGEMENT MISCELLANEOUS ACTIVITIES

Energy conservation continued to be a priority area for the We strive to preserve the natural beauty and history, along with
Company. During the FY 2016-2017, the Company undertook the natives of the land by investing in good agricultural practices
various initiatives to conserve energy and reduce its environmental and eco-conservation which ensures that the original forest cover
impact by conducting energy audits and introducing innovative of the region remains intact.
ways of saving power. Few of the initiatives are listed below:
We have undertaken various initiatives to promote the use of
Ÿ Advanced energy saving gadgets were installed, like capacitor eco-friendly cooking stoves among the workers of coffee estates.
banks, LED lights, and indigenised components like thermo- In our initiative to reduce our environmental impact, we have
controllers for ovens, etc. banned the use of plastics bags in all the outlets of the Company
and introduced eco-friendly paper bags to serve the purpose.
Ÿ Energy Audits: This includes the use of a high-end online
energy monitoring system across majority of CCD outlets. Our CSR initiatives prioritised food safety management systems
Today, with Internet of Things, it is possible to remotely in delivering safe food to our consumers and to comply with the
monitor and manage energy usage and take timely actions to new regulations.
stop inefficiencies.
After being certified for meeting international standards in food
The above mentioned initiatives have reduced energy safety management system (FSMS) with BRC, ISO 22000:2005
consumption by 8-9% in FY2016-2017 as compared to for our roasting unit, we were successfully re-certified with ISO
FY 2015-2016. 22000:2005 for our café outlets, pan-India during the previous
fiscal year.
WASTE MANAGEMENT
We have a balanced approach to business which addresses social
and environmental challenges through required investments,
technological upgradation, necessary resource allocation and
stakeholder engagement.

020 | COFFEE DAY | ANNUAL REPORT 2016-17

corporate information

BOARD OF DIRECTORS AUDITORS STAKEHOLDERS RELATIONSHIP

COMMITTEE
Mr. V.G. Siddhartha B S R & CO LLP
Chairman and Managing Director Chartered Accountants Mrs. Malavika Hegde
Chairperson- Non-Executive
Maruti Infotech Centre
Mr. S.V. Ranganath
Mr. V.G. Siddhartha
Independent Director 11-12/1, Inner Ring Road, Koramangala,
Bengaluru 560071 Member-Executive
Mr. M.D. Mallya Mr. S.V. Ranganath
REGISTRAR AND SHARE TRANSFER
Independent Director Member-Independent
AGENTS
Dr. Albert Hieronimus CORPORATE SOCIAL RESPONSIBILITY
LINK INTIME INDIA PRIVATE LIMITED
Independent Director COMMITTEE
C-101, 204 Park,
LBS Marg, Vikhroli (West), Mr. S.V. Ranganath
Mr. Sanjay Omprakash Nayar
Mumbai-400 083 Chairperson- independent
Non- Executive, Nominee Director
COMPOSITION OF COMMITTEES Mr. V.G. Siddhartha
Mrs. Malavika Hegde
Member-Executive
Non -Executive, AUDIT COMMITTEE
Non Independent Director Mrs. Malavika Hegde
Mr. S.V. Ranganath
Member-Non-Executive
Chairperson-Independent
COMPANY SECRETARY &
COMPLIANCE OFFICER Dr. Albert Hieronimus RISK MANAGEMENT COMMITTEE
Member-Independent Mr. V.G. Siddhartha
Mr. Sadananda Poojary
Chairperson-Executive
Mr. V.G. Siddhartha
CHIEF FINANCIAL OFFICER
Member-Executive Mrs. Malavika Hegde
R. Ram Mohan Member- Non-Executive
NOMINATION & REMUNERATION
REGISTERED OFFICE COMMITTEE ADMINISTRATION COMMITTEE
23/2,Coffeeday Square, Vittal Mallya Road,
Mr. S.V. Ranganath Mr. V.G. Siddhartha
Bangalore-560001
Chairperson-independent Chairperson-Executive
BANKERS
Dr. Albert Hieronimus Mrs.Malavika Hegde
Corporation Bank Member-Independent Member- Non-Executive
Axis Bank Limited
Mrs. Malavika Hegde SECRETARIAL AUDITOR
Karnataka Bank Limited Member-Non-Executive
HRB & Co. Secretaries
State Bank of Mysore
INTERNAL AUDITOR
ABS & Co.

CORPORATE INFORMATION | 021

022 | COFFEE DAY | ANNUAL REPORT 2016-17
management & governance

STATUTORY SECTION | 023

board's
report
Dear Shareholders,
The Board of Directors present you the Ninth 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 March 2017.

FINANCIAL HIGHLIGHTS: Amount In Rs.Million

Particulars Coffee Day Coffee Day Coffee Day Coffee Day
Enterprises Enterprises Global Limited Global Limited
Limited Limited
(Consolidated) (Consolidated) (Consolidated) (Consolidated)
FY 17 FY 16 FY 17 FY 16
Gross Operational Revenue 35519 30943 17728 15520
Finance charges 3172 3595 479 493
Depreciation 2268 2517 1633 1526
Profit Before Tax 1371 350 498 393
Income Tax 555 446 230 150
Profit for the period 462 -425 264 241

PERFORMANCE OVERVIEW STATE OF COMPANY’S AFFAIRS

During the fiscal year ended 31st March 2017, consolidated The state of Company affairs forms part of Management
gross revenue grew by 15% driven by strong impetus from Discussion & Analysis Report.
Coffee and Multimodal Logistics. The retail gross revenue in the
DIVIDEND
coffee business contributed by a growth of 14%. Consolidated
Profit after tax and exceptional is Rs.462 Million for the year 2017 The Board of Directors of your Company has not recommended
compared to loss of Rs.425 Million for the previous year. any dividend for the financial year 2016-17.

A detailed performance analysis is provided in the Management

Discussion and Analysis segment which is annexed to this report.

024 | COFFEE DAY | ANNUAL REPORT 2016-17

TRANSFER TO RESERVES for which such loan or guarantee is proposed to be utilized by
The Company has not transferred any amount to reserves during the recipient, form part of the notes to the financial statements
the year and hence no information as per the provisions of provided in this annual report.
Section 134 (3) (j) of the Companies Act, 2013 has been furnished.
SUBSIDIARIES
ISSUANCE OF NON-CONVERTIBLE DEBENTURES (NCD’S) The Company has formulated a policy for determining ‘material’
The Company had during the Financial year 2016-17, sought subsidiaries pursuant to the provisions of the SEBI (LODR)
shareholders approval in the Annual General Meeting for issuance 2015. The said policy is available at the Company website:
of NCD’s for an amount not exceeding Rs.550 Crores. On 11th www.coffeeday.com
March 2017 the Board of Directors at its meeting issued NCD’s for The Company has 44 subsidiaries (including indirect subsidiaries)
an amount of Rs.290 Crores for Identifiable Investors and on 30th as on 31st March 2017.
March 2017 the Board of Directors at its meeting issued NCD’s for
As per section 129(3) of the Companies Act 2013, the consolidated
an amount of Rs.150 Crores for the purpose of restructuring its
financial statements of the Company and its subsidiaries form part
existing debts.
of the Annual Report. A Statement containing the salient features
APPROVAL OF MERGER BETWEEN COFFEE DAY OVERSEAS of the financial statements of its subsidiaries in the prescribed
PRIVATE LIMITED WITH COFFEE DAY ENTERPRISES Form AOC-1 is attached as Annexure to Consolidated Financial
LIMITED Statements.
The Scheme of Amalgamation between COFFEE DAY OVERSEAS In accordance with section 136 (1) of the Companies Act 2013, the
PRIVATE LIMITED with COFFEE DAY ENTERPRISES LIMITED was financial statements of the subsidiary companies are available on
approved by the Board of Directors at the Meeting held on our website www.coffeeday.com post approval of the members.
11th August, 2016 and the approvals were sought from all the
respective authorities viz; Competition Commission of India, MANAGEMENT DISCUSSION & ANALYSIS REPORT
Bombay Stock Exchange, National Stock Exchange of India Management Discussion & Analysis forms part of this annual
Limited (Designated Stock Exchange) and vide the National report and it is annexed to the Directors report-Annexure-1.
Company Law Tribunal Order dated 02nd February 2017, ordered
CORPORATE GOVERNANCE
a Shareholders Meeting on 10th March 2017 and the same was
passed with requisite majority approving the merger. The report on Corporate Governance as stipulated by under
SEBI (LODR) 2015 forms part of the Annual Report. The requisite
POSTAL BALLOT Certificate from a practicing Company Secretary confirming
National Stock Exchange of India vide its observation letter had compliance with the conditions of Corporate Governance is
ordered a Postal Ballot for approving the scheme of Merger attached to this Report-Annexure-2.
between COFFEE DAY OVERSEAS PRIVATE LIMITED with COFFEE
POLICY ON DIRECTORS’ APPOINTMENT AND
DAY ENTERPRISES LIMITED with the majority constituting Public
REMUNERATION
Shareholders and the Resolution was passed with consent of
99.99% majority. In accordance with Section 178(3) of the Companies Act 2013 and
Regulation 19 of SEBI (LODR) 2015, the Board had adopted Policy
DEPOSITS on Director’s appointment and remuneration as recommended
The Company has not accepted any fixed deposits from public by the Nomination and Remuneration Committee. The policy is
pursuant to Section 73 of the CA, 2013 and rules thereunder. attached as Annexure-3.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BOARD DIVERSITY

The Company makes investments or extends loans/guarantee A diverse Board enables efficient functioning through differences
to its wholly owned subsidiaries for their business purpose. The in perspective and skill, and also fosters differentiated thought
details of loans, guarantees and investments are covered under processes at the back of varied industrial and management
section 186 of the Companies Act, 2013 along with the purpose expertise, gender, knowledge and geographical background. The

BOARD’S REPORT | 025

Board recognises the importance of a diverse composition and particulars of meetings held and attendance there at are given in
has adopted a Board Diversity Policy which sets out the approach the Corporate Governance Report.
to diversity. The policy is available at www.coffeeday.com
MEETINGS OF THE BOARD
DECLARATION BY INDEPENDENT DIRECTORS The Board duly met 6 times (Six) during the financial year 2016-
The Company has received declarations from all the Independent 17. Details of the meetings are mentioned in the Corporate
Directors confirming that they meet the criteria of independence Governance Report which is annexed to this Report.
as prescribed under Section 149(6) of the Companies Act, 2013.
RELATED PARTY CONTRACTS OR ARRANGEMENTS
BOARD EVALUATION The Company has formulated a policy on “materiality of related
As per the provisions of the Companies Act 2013 and SEBI (LODR) party transactions” and the process of dealing with such
2015, an evaluation of the performance of the Board, Committee transaction, which are in line with the provisions of the Companies
and members was undertaken. Act, 2013 and SEBI (LODR) 2015. The same is also available on the
website of the Company www.coffeeday.com
The performance of the Board was evaluated by the Board after
seeking inputs from all the Directors on the basis of various criteria Prior omnibus approval from the Audit Committee are obtained
such as Board structure, strategic discussions, effective reviews, for transactions which are repetitive and also normal in nature.
process, Boards engagement with senior management team, etc. Further, disclosures are made to the Committee on a quarterly
The performance of the Committee was evaluated by the Board basis.
on the basis of composition, effective discharge of its function
There have been no material related party transactions undertaken
and recommendations provided. Performance of the Individual
by the Company, under regulation 23 of the SEBI (LODR) 2015 and
Directors was evaluated on the basis of Integrity, Commitment,
detail of the transaction approved by the Board under section
Ability to exercise independent judgement, etc. The feedback
188 of the Companies Act, 2013 have been enclosed pursuant
was collated and discussed at the Board and action points for
to clause (h) of subsection (3) of Section 134 of Companies Act,
improvement is put in place.
2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014.
APPOINTMENTS /RESIGNATION /RE-APPOINTMENTS OF There have been no material related party transactions undertaken
BOARD OF DIRECTORS by the Company under Section 188 of the Companies Act, 2013
During the year there has been no change in the Composition and hence, no details have been enclosed pursuant to clause (h)
of Directors. of subsection (3) of Section 134 of Companies Act, 2013 read with
Rule 8(2) of the Companies (Accounts) Rules 2014 – ‘AOC-2’.
Mrs. Malavika Hegde shall retire by rotation at the ensuing Annual
General meeting and is eligible for re-appointment. MATERIAL CHANGES AND COMMITMENTS, IF ANY,
AFFECTING THE FINANCIAL POSITION OF THE COMPANY
COMMITTEES OF THE BOARD
WHICH HAVE OCCURRED BETWEEN THE END OF THE
The details of Boards Committees – the Audit Committee, the
FINANCIAL YEAR OF THE COMPANY TO WHICH THE
Nomination and Remuneration Committee and the Stakeholders
FINANCIAL STATEMENTS RELATE AND THE DATE OF THE
Relationship Committee have been disclosed separately in the
REPORT
Corporate Governance Report which is annexed to and forms a
No material changes and commitments have occurred after
part of this annual report.
the close of the year till the date of this report, which affect the
AUDIT COMMITTEE financial position of the Company.
The Audit Committee comprises of Mr. S.V. Ranganath, Chairman,
CHANGE IN NATURE OF BUSINESS
with Dr. Albert Hieronimus and Mr. V.G. Siddhartha as members.
There has been no change in the nature of business of the
The functions performed by the Audit Committee and the
Company.

026 | COFFEE DAY | ANNUAL REPORT 2016-17

CONSERVATION OF ENERGY, RESEARCH AND Listed entities based on market capitalization. In compliance with
DEVELOPMENT TECHNOLOGY ABSORPTION, FOREIGN the regulation, we have provided the BRR as part of our Annual
EXCHANGE EARNINGS & OUTGO Report-Annexure-7.
The particulars as prescribed under section 134 (3) (m) of the
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH
Companies Act 2013, read with Rule 8(3) of the Companies
REFERENCE TO THE FINANCIAL STATEMENTS
(Accounts) Rules 2014 are attached as Annexure 4.
It is management’s responsibility to establish and maintain
AUDITORS appropriate controls over financial reporting. Controls are
aimed at providing reasonable assurance that external reports
a) Statutory Auditors
and statements are in accordance with applicable accounting
The members in their AGM held on 30th September 2014 had
principles.
appointed M/s B S R & Co LLP, Chartered Accountants as statutory
auditors for a term of 5 consecutive years. Hence, shareholders The Company has laid down certain guidelines, processes
are hereby proposed to ratify the appointment of auditors from and structure, which enables implementation of appropriate
conclusion of this AGM to the conclusion of the next AGM. internal financial controls across the organisation. Such internal
financial controls encompass policies and procedures adopted
b) Secretarial Auditor by the Company for ensuring the orderly and efficient conduct
Pursuant to Section 204 of the Companies Act 2013 M/s HRB & Co of business, including adherence to its policies, safeguarding
was appointed to conduct the secretarial audit of the Company of its assets, prevention and detection of frauds and errors, the
for the FY 2016-17. The secretarial audit report is attached as accuracy and completeness of accounting records and the timely
Annexure 5. preparation of reliable financial information. These include control
processes both on manual and IT applications including the ERP
c) Cost Auditor
application wherein the transactions are approved and recorded.
Pursuant to Section 148 of the Companies Act 2013, the provisions Appropriate review and control mechanisms are built in place to
for appointment of Cost Auditors do not apply to the Company. ensure that such control systems are adequate and are operating
effectively. Because of the inherent limitations of internal financial
d) Internal Auditor
controls, including the possibility of collusion or improper
In terms of Section 138 of the Companies Act, 2013 read with the
management override of controls, material misstatements in
Companies (Accounts) Rules, 2014, the Company has appointed
financial reporting due to error or fraud may occur and not be
M/s. A B S & Co, Chartered Accountants as Internal Auditors.
detected. Also, evaluation of the internal financial controls is
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE subject to the risk that the internal financial control may become
COURTS/REGULATORS inadequate because of changes in conditions, or that the
compliance with the policies or procedures may deteriorate.
There is no significant orders passed by the regulator, Court or
tribunals impacting the going concern status and the Company’s The Company has, in all material respects, an adequate internal
operations in future. financial controls system and such internal financial controls
were operating effectively based on the internal control
EXTRACT OF ANNUAL RETURN
criteria established by the Company considering the essential
An extract of the Annual return has been annexed to the Board’s components of internal control.
Report in compliance with Section 92 of the Companies Act
2013 read with applicable rules made thereunder annexed as WHISTLE BLOWER POLICY/VIGIL MECHANISM
Annexure 6 to this Report. The Company has established a Vigil Mechanism that enables
the Directors and Employees to report genuine concerns. The
BUSINESS RESPONSIBILITY REPORT
Vigil Mechanism provides for adequate safeguards against
The SEBI (LODR) 2015 mandates inclusion of the Business victimization of persons who use the Vigil Mechanism; and also
Responsibility report as part of the Annual Report for Top 500 provides direct access to the Chairperson of the Audit Committee

BOARD’S REPORT | 027

of the Board of Directors of the Company in appropriate or (b) The directors had selected such accounting policies and
exceptional cases. Details of the Vigil Mechanism policy are made applied them consistently and made judgments and estimates
available on the Company’s website www.coffeeday.com 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
PARTICULARS OF EMPLOYEES
financial year and of the profit and loss of the Company for
The Statement containing ratio of remuneration paid to each that period;
Director and the median employee remuneration and other
(c) The directors had taken proper and sufficient care for the
details in terms of subsection 12 of section 197 of the Companies
maintenance of adequate accounting records in accordance
Act 2013 read with rule 5(1) of the Companies (Appointment and
with the provisions of this Act for safeguarding the assets of
Remuneration of Managerial Personnel) Rules, 2014
the Company and for preventing and detecting fraud and
THE STATEMENT CONTAINING PARTICULARS IN TERMS OF other irregularities;
SUBSECTION 12 OF SECTION 197 OF THE COMPANIES ACT
(d) The directors had prepared the annual accounts on a going
2013 READ WITH RULE 5(2) AND 5(3) OF THE COMPANIES
concern basis; and
(APPOINTMENT AND REMUNERATION OF MANAGERIAL
PERSONNEL) RULES, 2014 - ANNEXURE-8 (e) The Company is responsible for establishing and maintain
adequate and effective internal financial controls with
CORPORATE SOCIAL RESPONSIBILITY
regard to it business operations and in the preparation and
As per section 135 of the Companies Act, 2013 the Company has presentation of the financial statements, in particular, the
a Corporate Social Responsibility Committee. The Committee assertions on the internal financial controls in accordance with
comprises of Mr. S.V. Ranganath, Chairman and Mr. V.G. Siddhartha broader criteria established by the Company.
& Mrs. Malavika Hegde as Members. The Committee has adopted
Towards the above objective, the directors have laid down
a CSR policy which has been hosted on the Company’s website at
the internal controls based on the internal controls framework
www.coffeeday.com
established by the Company, which in all material respects
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF were operating effectively as at 31st March 2017.
WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
(f ) The directors had devised proper systems to ensure
REDRESSAL) ACT 2013
compliance with the provisions of all applicable laws and that
The Company has in place a Prevention of Sexual Harassment such systems were adequate. The Company has substantially
policy in line with the requirements of the Sexual Harassment of complied with material provisions of such acts and regulations
Women at the Workplace (Prevention, Prohibition and Redressal) as are relevant for its operations. No material or significant non
Act, 2013. An Internal Complaints Committee has been set up compliances were reported or identified during the year.
to redress complaints received regarding sexual harassment. All
employees (permanent, contractual, temporary, trainees) are STATUTORY DISCLOSURES
covered under this policy. None of the Directors of your Company are disqualified as per
provisions of Section 164(2) of the Companies Act, 2013. Your
During the year 2016-17, no complaints were received by the
Directors have made necessary disclosures, as required under
Company related to sexual harassment.
various provisions of the Act and SEBI (LODR) 2015.
DIRECTOR’S RESPONSIBILITY STATEMENT
BOARD’S RESPONSE ON AUDITORS QUALIFICATION,
In Compliance with section 134(5) of the Companies Act, 2013,
RESERVATION OR ADVERSE REMARK OR DISCLAIMER
the Board of Directors hereby confirm the following:
MADE
(a) In the preparation of the annual accounts, the applicable There are no qualifications, reservations or adverse remarks made
accounting standards had been followed along with proper by the Statutory Auditors in their report or by the Company
explanation relating to material departures; Secretary in practice in the secretarial audit report.

028 | COFFEE DAY | ANNUAL REPORT 2016-17

STATEMENT CONCERNING DEVELOPMENT AND C. Bonus Shares
IMPLEMENTATION OF RISK MANAGEMENT OF THE The Company had not issued Bonus Shares during the year under
COMPANY review, as per Section 63 of the Act.
Your company is exposed to a variety of risk considering the
D. Employee Stock Option Plan
diversified business of the subsidiaries which include coffee
business, technology park business, logistics business, financial The Company has not provided any Stock Option Scheme to the
services business and resort business. We conduct a substantial employee, as per Section 62 of the Act.
portion of our coffee and non-coffee business operations
ACKNOWLEDGEMENTS
through our subsidiaries. Hence our company’s income is largely
Your Directors place on record their sincere thanks to Bankers,
dependent on the investment income and dividends from our
business associates, consultants and various Government
subsidiary. Our success depends on the value, perception and
authorities for their continued support extended to your
marketing of our brands, most particularly the “Café Coffee
companies activities, during the year under review. Your Directors
Day” brand. We are also subject to strong competition in food &
also acknowledge gratefully the shareholders for their support
beverage industry and our logistics business.
and confidence reposed on your company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
For and on Behalf of the Board
UNDER SUB-SECTION (12) OF SECTION 143 OF THE ACT
By Order of the Board
There were no frauds reported by auditors.
Place: Bangalore
SHARES Date: 18th May 2017

A. Buy back of securities For Coffee Day Enterprises Limited

The Company has not bought back any of its securities during the V G Siddhartha
year under review, as per Section 68 of the Act. Chairman & Managing Director
DIN- 00063987
B. Sweat Equity
The Company has not issued any Sweat Equity Shares during the Malavika Hegde
year under review, as per Section 54 of the Act. Director
DIN - 00136524

BOARD’S REPORT | 029

Annexure-1

management discussion
and analysis
GLOBAL ECONOMIC OVERVIEW
Global growth was projected to slow to 3.1% in 2016 before recovering to 3.5% in 2017. The forecast was
revised down by 0.1 percentage points for 2017, compared with April 2016 projections. This reflected a
subdued outlook following the Brexit referendum, increasing global protectionism and weaker-than-
expected growth in the US.

However, long-term prospects of emerging market economies improved following a visible lowering of
interest rates in advanced economies and firming commodity prices. Asia in general and India in particular
demonstrated robust growth while sub-Saharan Africa experienced a sharp slowdown. Among advanced
economies, activity rebounded strongly in the US with the economy approaching full employment. Long-
term nominal and real interest rates rose in the UK and US since November 2016. Aggregate growth for
emerging markets and developing economies was estimated at 4.1% for 2016, just above the post-crisis low
in 2015.

However, the overall forecast marks a marked difference between countries with strong commodity import-
export ratios. After stagnating in 2015, growth in commodity-exporting nations for 2016 was pegged at
0.4% – substantially below the forecasted 1.6% (January 2016). This reflects a significant downward revision
in terms of commodity prices spurred by weak global trade, capital flow volatilities and inherent domestic
challenges. (Source: IMF & World Bank)

INDIAN ECONOMIC OVERVIEW

India’s economic growth was pegged at 7.2% for FY 2017-18, down from 7.6% recorded in FY 2016-17.
Although the demonetisation initiative moderated growth by 40 bps, this move is expected to have certain
long-term structural benefits. The growth rate of the industrial sector was estimated to moderate to 5.2% in
FY 2017-18, down from 7.4% in FY 2016-17.

The Union Budget for 2016-17 came in the context of a weak economic situation. It was not just the stress
in the rural economy, which caused a steady decline in real wages as well as lowered farm incomes. There
was also a slowdown in the manufacturing segment with the rising incidence of NPAs. The Union Budget
for 2017-18 set aside Rs.48,700 crore for the MNREGA scheme to strengthen skill development. (Source: Crisil
and IMF)

The proposed implementation of the historic tax reform of Goods and Services Tax as well as the government’s
remonetisation are expected to act as strong structural economic resets, enabling the country to realize its
economic potential.

030 | COFFEE DAY | ANNUAL REPORT 2016-17

FINANCIAL OVERVIEW Liabilities

PROFIT AND LOSS ACCOUNT ANALYSIS Non current liabilities (excluding borrowings) stood at Rs.1,803
million, comprising of other financial liabilities Rs.1,209 million,
Gross revenues
deferred tax liabilities Rs.256 million, other non current liabilities
Gross revenues increased by 15% to Rs.35,519 million in 2016-17, Rs.217 million and provisions amounting to Rs.121 million.
compared with Rs.30,943 million reported in 2015-16.
Current liabilities (excluding borrowings of Rs.5,417 million and
Operating profit current maturities of long-term borrowings amounting to Rs.7,041
Operating profit (EBITDA) increased by 5.4% to Rs.6,811 million in million) stood at Rs.5,499 million, comprising of other financial
during 2016-17 from Rs.6,462 million in 2015-16, largely because liabilities (excluding current maturities of long-term borrowings
of improvement in financial performance of café business and amounting to Rs.7,041 million) Rs.3,008 million, trade payables of
integrated multimodal logistics business. Rs.1,012 million, other current liabilities Rs.1,168 million, current
tax liabilities Rs.268 million and provisions amounting to Rs.43
Depreciation million.
Depreciation for the year under review stood at Rs.2,268 Million,
Total assets
compared with Rs.2,517 million recorded in the previous year,
down 9.9% on a y-o-y basis. The Company’s total assets increased to Rs.80,285 million in 2016-
17 from Rs.70,314 million in 2015-16, representing an increase of
Finance costs 14.2%. Capital work-in-progress (WIP) for the year increased by
Finance cost for the year under review decreased by 11.8% 16.6% to Rs.11,363 million in 2016-17, compared with Rs.9,747
from Rs.3,595 million to Rs.3,172 million because of significant million in 2015-16 on account of ongoing construction in our
repayment of debt in the previous year and interest cost subsidiary engaged in the business of leasing of commercial
optimization carried out during the year 2016-17. office space and further additions by integrated multimodal
logistics business.
Total tax expenses
Total tax expenses for the year stood at Rs.555 Million, compared Investments
to Rs.446 Million for Financial year 2016. The Company’s investments (current and non-current portion)
during the year under review increased to Rs.6,641 million from
Net profit
Rs.6,265 million in the previous year, an increase of 6.0% over the
Consolidated net profit for the year under review stood at Rs.462 previous year.
Million over loss of Rs.425 Million in the previous financial year.
Current and Non-current assets
BALANCE SHEET ANALYSIS
Trade receivables of the Company stood at Rs.4,089 million in
Net worth FY17, an increase of 30.8% over the previous year.
The Company’s net worth stood at Rs.28,491 million as on 31st The Company had on its books cash and bank balances worth
March 2017, increasing by 4.0%, compared with Rs.27,406 million Rs.14,766 million as on 31st March 2017 as compared to Rs.13,216
as on 31st March 2016. The net worth comprised paid-up equity million in 31st March 2016.
share capital amounting to Rs.2,060 million as on 31st March
2017 (206,001,709 equity shares of Rs.10 each fully paid up) and OPERATIONAL OVERVIEW
minority interest of Rs.6,214 million. The Company’s reserves and Coffee Day Enterprises is present across the following sectors:
surplus stood at Rs.20,217 million as at 31st March 2017. Coffee, logistics, financial services, leasing, commercial space and
hospitality. However, 51% of the consolidated net revenue of the
Loan profile
Company was contributed by the coffee business during the year
The total loan funds stood at Rs.44,492 million while long-term under review, followed by 29% from the logistics business and
borrowings stood at Rs.39,075 million. The Company’s net debt 13% from financial services.
as on 31st March 2017 stood at Rs.29,726 million (including short-
term borrowings amounting to Rs.5,417 million).

MANAGEMENT DISCUSSION AND ANALYSIS | 031

COFFEE BUSINESS Outlook
Gross Revenue from the Company’s consolidated coffee business The size of the organized café market was at Rs.67 billion in 2014
stood at Rs.18,274 million over 2016-17, contributing 51% to and is projected to grow to Rs.151 billion by 2020 at a CAGR
the consolidated topline, representing an increase of 15% over of 15%. The café chain market in 2014 is at Rs.18 billion and is
2016-17. The substantial increase in revenues can be attributed to projected to grow at a CAGR of 20%. The overall coffee retail
setting up of new café outlets and deployment of new vending market in India is pegged to be Rs.30 billion and is expected to
machine. Revenue from the retail division increased by 14 % from grow at 9% plus CAGR till 2020. (Technopak Report)
Rs.12,536 million in 2015-16 to Rs.14,234 million over 2016-17.
The vending machine coffee market, estimated at Rs.2400 cr
Consolidated net profit increased by 9 % from Rs.241 million in
in 2015 is expected to reach Rs.6300 cr by 2020 with a growth
2015-16 to Rs.264 million in 2016-17.
rate of 22%. The Commercial Office Space addition in India is
Coffee Day Global Limited’s flagship café chain brand Café Coffee estimated at 40 million sqft per year for the next 5 years, giving
Day (CCD) owns 1682 cafes in 241 cities and 537 CCD Value Express us a promising opportunity in this segment. The other areas of
kiosks. The coffee beans and powder are marketed through 415 opportunity will be in the Government and Defense divisions,
Fresh and Ground Coffee retail stores. There are 41,845 vending Hotels, Restaurants and other Retail channels.
machines that dispense coffee in corporate workplaces and
Logistics business
hotels under the brand. The division serves more than 1.6 billion
cups of coffee per annum. Internationally, CCDs are present in The Company is present in the logistics sector through its
Vienna, Czech Republic, Malaysia and Egypt. subsidiary Sical Logistics Limited (SLL) in which we own a majority
equity share of 52.83%.
HIGHLIGHTS, 2016-17
Retail Gross Revenue at Rs.14,234 Million; up 14% YoY

Retail EBIDTA at Rs.2,556 million; up 8%

Net Profit after Tax at Rs.264 million: up 9% YoY

2012-13 2013-14 2014-15 2015-16 2016-17

No. of cafes 1454 1568 1518 1,607 1,682
No. of cities of presence 196 211 215 231 241
No. of CCD Value Express kiosks 919 945 579 579 537
No. of vending machines 21,594 25,561 29,760 35,441 41,845

and transportation and growth in other business verticals. EBITDA

Sical Logistics Limited
increased 43% from Rs.1159 million in 2015-16 to Rs.1,654 million
Ÿ More than five decades of experience in the logistics sector
in 2016-17.
Ÿ Listed on the Bombay Stock Exchange and National Stock
Exchange HIGHLIGHTS, 2016-17
Ÿ Market capitalization of Rs.14615 million as on 31st March Market capitalization of Sical Logistics Limited as per NSE as on
2017
31st March 2017: Rs.14,615 million as against Rs.7,308 million as
Ÿ Focus on port handling, road and rail, logistics, container on 31st March 2016.
freight stations and mining
Ÿ 21% YoY growth in gross revenues to Rs.10,329 million;
Revenue from our integrated logistics business stood at Rs.10,329 Ÿ EBITDA of Rs.1,654 million which represents 43% YoY growth
million in 2016-17, representing an increase of 21% over 2015-
The Company’s growth in the current financial year is propelled
16, and contributing 29.1% to the consolidated top line, an
by new business initiatives and new contract wins.
increase of 1.5% over 2015-16. The increase in revenues can be
attributed to new contracts and increased volumes in mining

032 | COFFEE DAY | ANNUAL REPORT 2016-17

Outlook Products and services provided in the financial services division
Indian logistic industry is projected to grow at a CAGR of 15- Way2Wealth is an investment advisory and financial
20% during FY16~FY20. The logistic sector has been gaining intermediation enterprise which offers a wide range of financial
momentum, on account of various Government initiatives like products, advisory services under one roof, with a Pan- India
GST implementation, “Make in India”, National Integrated Logistic branch and franchized network. Way2Wealth currently caters to
Policy, Sagar Mala Project etc. and also due to economy revival an array of retail, institutional and corporate clients.
and E-commerce growth and Dedicated Freight Corridors (DFCs)
Way2Wealth focuses on qualitative products understanding
etc.. The implementation of GST has been a boon to the logistics
the customer risk appetite. Our service delivery approach of
sector which will have two major implications - (i) centralisation
personalized, need based advice, research capabilities, past
and consolidation of warehousing and transition to ‘hub and
performance and emphasis on long-term wealth creation
spoke’ model and (2) increased tax compliance leading to moving
makes our customers feel confident about their financial future.
away from un-organized transportation service providers to
We believe that factors like product insight, customer centric
organized sector.
approach and enabling technology will be the driving forces
On account of ever changing customer needs and depleting behind our organization.
profitability in pure transportation, organized players are aiming
Way2Wealth positioned as a one stop shop for a range of
to become end-to-end service providers. In India, Third-Party
investment needs such as Equities, Derivatives, Exchange traded
Logistics (3PL) and Supply Chain Management (SCM) industry is
commodities as well as Currencies and are among the leading
still in nascent stages but is steadily gaining traction especially
distributors for Mutual Funds, Insurance, National Pension
in industries such as Automobiles, Pharmaceuticals, Consumer
Scheme and Fixed Income products in India.
Durables and FMCG.
Awards and Recognitions
SICAL Iron Ore Terminals Limited, a subsidiary of Sical Logistics
Limited, has executed the License Agreement with Kamarajar Ÿ MCX Excellence Award- Commodity Broker of the year
Port for modification of the existing iron ore terminal to handle 2016-17
common user coal on BOT basis. The financial closure and Ÿ NSDL Go-green Award – 2017
approval of Detailed Project Report have been achieved on this Ÿ NSDL Star Performer – 2016
project. The Company is in the process of implementation of the Ÿ BSE Top Ten Broker- 2016
project.
Outlook
Financial services business Significant parts of our businesses are dependent on the equity,
The Group is present in the financial services sector through derivative, commodity and debt markets. In the past 3 years
its subsidiary Way2Wealth Securities Private Limited (W2W markets have been fairly stable, consistent & trending positively.
Securities), in which we hold an 85.53% equity stake. We expect most of these markets to continue the trend in the
coming years as well sans global uncertainties. The present
Way2Wealth Securities Private Limited
government’s policy focus & regulatory clarities could push the
Ÿ Retail-focused investment advisory company
FDI & FII inflows into the country, thereby assisting the markets
Ÿ Services provided: wealth management, broking, portfolio
to move higher & correspondingly could help us grow our
management and investment advisory services
businesses.
Revenue from our financial services business stood at Rs.4,760
Major themes to impact India in 2017 include a resurrection in
million in 2016-17, an increase of 6% over 2015-16, contributing
consumption demand, growth led by policy reforms, move
13.4% to the consolidated top line. This increase in revenues can
towards digitisation, monetary stance of global central banks
be attributed to increase in volumes of revenue from institutional,
and economic policy decisions. The impact of demonetisation
treasury and market operations through qualitative techniques.
may weigh on consumption demand and on growth of various
Among other financial highlights, the EBITDA during the year
industries in the near term, dragging down the GDP growth
under review is Rs.556 millions.
for FY17. We expect the impact of this currency replacement

MANAGEMENT DISCUSSION AND ANALYSIS | 033

programme to be shortlived, as new notes come into circulation. also holds a minority interest in a luxury resort in the Andaman
Additionally, this move should help increase the share of the and Nicobar islands.
formal economy and digital economy. Global factors, including
Revenue from our hospitality business increased by 12% from
commodity price movements, economic policies of the new
Rs.317 million in 2015-16 to Rs.355 million in 2016-17.
government in the US shall play vital role for new directions for
stock market in India. KEY RISKS AND CONCERNS

This division is dependent on regulatory policies & its continuance. Financial risk
Any change in SEBI policies or direction can impact performance If the Company’s cash flow proves inadequate to meet its financial
and also any increase in cost of transactions due to new levies by obligations,its status as a going concern might be invoked.
the government could impact volumes and business
Competition risk
Technology parks business
With growing westernization and increase in the penetration of
Our wholly-owned subsidiary, Tanglin Developers Limited, was global players and growing popularity of individual themed cafés,
set up for the development of technology parks and Special it might be a challenge for the Company to maintain its existing
Economic Zones, offering bespoke facilities for information consumer base.
technology and IT-enabled services. The Company is developing
and operating a Special Economic Zone/technology park in Regulatory risks
Global Village situated in Bengaluru, Karnataka and Tech Bay Operating in the food industry space is subject to various
situated in Mangaluru, Karnataka. regulatory risks with respect to failure of compliance to quality
standards and various regulations imposed by the government
Our technology parks division contributed 3.9% to the Company’s
policies. Failure to meet with the standards might result in legal
top line. Revenues from this division increased by 5.5% from
implications and loss of business.
Rs.1,319 million in 2015-16 to Rs.1,392 million in 2016-17.
Occupancy levels stood at 3.3 million square feet as at 31st March Climatic risks
2017. Currently, 7.5L sq. ft of office space is completed and will
Bad monsoon might result in lower production of coffee leading
be occupied in phases. An additional 7.5L sq. ft is currently under
to soaring high coffee prices. Passing it to the customers would
construction.
incur menu costs and loss in price sensitive segment of consumer
Outlook base. Thus, inadequate monsoon might result in falling revenues
and profit.
There are several infrastructural projects developed in this area
including the connectivity of metro to this property, which will Economic risk
likely to improve the connectivity to this area from the center of
Sluggish growth of the economy impacts the spending power
Bangalore. The rent in this area are likely to be grown at 5-7% in
reducing consumption. Overall macroeconomic instability
the coming years.
results in a lower demand. Thus fluctuations in the economic
The growth of the commercial real estates technology parks scenario possess a major risk to the business of the Company.
largely depend upon the growth of service and industrial sector Performance of the backward and forward linked industries is of
especially IT , ITES and telecom. India as and is continuing to see vital importance for the logistics sector to perform.
major international player in this sector.
Social and political risk
HOSPITALITY BUSINESS Government policies play a major role in determining the fate of
The Company owns and operates luxury boutique resorts, one an industry. Relaxation of various regulations and simplification of
directly through our Company, and two through our wholly- tax regime give the much needed push to the concerned sectors.
owned subsidiary, Coffee Day Hotels & Resorts Private Limited Change in orientation with change in government possesses a
(CDHRPL), under the brand ‘The Serai’. These resorts are located at threat to the business.
Chikmagalur, Bandipur and Kabini, all in Karnataka. The Company

034 | COFFEE DAY | ANNUAL REPORT 2016-17

Annexure-2

corporate governance report

The detailed report on Corporate Governance for the financial year ended 31st March 2017, as per regulation
34(3) read with Schedule V of the SEBI (LODR) 2015 is set out below:

COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

Coffee Day is committed to doing business in an efficient, responsible, honest and ethical manner. Corporate
governance practice goes beyond compliance and involves a company-wide commitment and has become
the integral part of business to ensure fairness, transparency and integrity of the management.

Good governance responsibilities encompasses the activities of the Board of Directors, who execute their
corporate governance responsibilities by focusing on the Company’s strategic and operational excellence
in the best interests of all stakeholders of the Company, in particular shareholders, employees and our
customers in a balanced fashion with long term benefits to all.

Good corporate governance provides an appropriate framework for the Board, its committees and
the executive Management to carry out the objectives that are in the interest of the Company and the
Stakeholders.

The core values of the Company’s governance process include independence, integrity, accountability,
transparency, responsibility and fairness. The business policies are based on ethical conduct, health, safety
and a commitment to building long term sustainable relationships with relevant stakeholders.

Coffee Day is committed to continually evolving and adopting appropriate Corporate Governance best
practices.

BOARD OF DIRECTORS

COMPOSITION, CATEGORY AND PROFILE OF DIRECTORS:

The Company has an appropriate mix of Executive and Independent Directors in the Board. As at 31st March
2017, the Board comprised of Six members, of which three are independent directors. Mr. V. G. Siddhartha is
the Chairman and Managing Director (‘CMD’) of the Company, who conducts the day-to-day management
of the Company, subject to the supervision and control of the Board of Directors. The Independent directors
on the Board are management professionals and technocrats who are senior, competent and highly
respected persons from their respective fields.

CORPORATE GOVERNANCE REPORT | 035

The composition and category of Directors as on date are as Dr. Albert Hieronimus, 70, is an Independent Director of our
follows: Company. He holds a diploma in mathematics and a doctorate in
business and social sciences, both from the University of Cologne,
Name of the Director Category
Germany. He Has been on the Board of Mindtree Limited for a
Mr. V.G. Siddhartha Promoter, Chairman & Managing Director
span of 11 years and has previously been the chairman of the
Mr. S.V. Ranganath Independent and Non-Executive Director
executive board at Bosch Rexroth AG since February 2008. He has
Mr. M.D. Mallya Independent and Non-Executive Director
over 30 years of experience in the Mannesmann and Bosch group
Dr. Albert Hieronimus Independent and Non-Executive Director
companies. In 2003, he became the chairman of Motor Industries
Mr. Sanjay Nayar Non-Executive & Nominee Director
Company Limited.
Mrs. Malavika Hegde Promoter group, Non-Executive Director
Sanjay Omprakash Nayar, 56, is a Non-Executive and Nominee
PROFILE OF DIRECTORS:
Director of our Company. He holds a bachelor’s degree in science
The brief profile of the Company’s Board of directors is as under: (mechanical engineering) from University of Delhi and a post
V.G. Siddhartha, 57, is the Chairman and Managing Director of graduate diploma in management from the Indian Institute of
our Company. V.G. Siddhartha has a long association with coffee, Management, Ahmedabad. He is currently the Chief Executive
given the family’s interests in coffee plantations for more than 130 Officer of KKR India Advisors Private Limited. Prior to joining
years, and he has an experience of approximately over 2 decades KKR India Advisors Private Limited in 2009, he has worked with
in the coffee business. He set up CDGL in 1993 to export coffee Citigroup for nearly 24 years where he was the chief executive
beans and later forayed into coffee retailing in different formats officer for India operations for the period from 2002 to 2009.
in India. He also set up his own stock broking firm, Sivan & Co., Malavika Hegde, 49, is a Non-Executive Director of our Company.
at Bengaluru. He was recognized as “The Entrepreneur of the She is the wife of V. G. Siddhartha and has significant years of
Year” by Economic Times in September 2003. In 2014, he was also experience in the business of coffee growing, procurement,
awarded with ‘ET Retail Hall of Fame’ for his contribution to the processing, export and retail. She is in charge of the overall
growth in retail sector. responsibilities of operating the hospitality business since 2008.
S.V. Ranganath, 64, is an Independent Director of our Company. He
MEETINGS AND ATTENDANCE RECORD OF DIRECTORS
is an officer of the Karnataka-75 cadre of the Indian Administrative
The Company prepares schedule of the Board and the Committee
Service. He has worked as a civil servant in various capacities,
meeting in advance for the Directors to make it convenient to
including as the Chief Secretary, Government of Karnataka and
attend. The Company circulates the agenda well ahead and
Principal Secretary to the Chief Minister of Karnataka. He has
provides the following information inter-alia to the Board and the
been trained in various management concepts from institutes
Committee:
such as the Indian Institute of Management, Bengaluru and the
Management Development Institute. Further, he has been on Ÿ Annual operating plans and budgets and any updates
the board of directors of Indian Investment Centre, Abu Dhabi,
Ÿ Capital budgets and any updates
Industrial Finance Corporation of India. He has also been the
Chairman of the India Coffee Board. Ÿ Quarterly results for the listed entity and its operating divisions
or business segments
M.D. Mallya, 64, is an Independent Director of our Company. He
holds a bachelor’s degree in engineering from the University of Ÿ Minutes of meetings of audit committee and other committees
Mysore and a postgraduate diploma in industrial management of the board of directors and the subsidiaries
from the Indian Institute of Science, Bengaluru. He has been the Ÿ The information on recruitment and remuneration of senior
Chairman and Managing Director of Bank of Baroda and is currently officers just below the level of board of directors, including
serving on the board of directors of various organizations. Prior to appointment or removal of Chief Financial Officer and the
joining the Bank of Baroda, he was the Chairman and Managing Company Secretary
Director of the Bank of Maharashtra. He started his banking career
Ÿ Show cause, demand, prosecution notices and penalty
from Corporation Bank in August 1976. In a career spanning over
notices, which are materially important
36 years, he has acquired significant experience in the banking
sector working at various positions and carrying out various Ÿ If there are any fatal or serious accidents, dangerous
assignments. occurrences, any material effluent or pollution problems

036 | COFFEE DAY | ANNUAL REPORT 2016-17

Ÿ Any material default in financial obligations to and by the Industrial Relations front like signing of wage agreement,
Company or substantial non-payment for goods sold by the implementation of Voluntary Retirement Scheme etc
Company
Ÿ Sale of investments, subsidiaries, assets which are material in
Ÿ Any issue, which involves possible public or product liability nature and not in normal course of business
claims of substantial nature, including any judgement or order
Ÿ Quarterly details of foreign exchange exposures and the steps
which, may have passed strictures on the conduct of the listed
taken by management to limit the risks of adverse exchange
entity or taken an adverse view regarding another enterprise
rate movement, if material
that may have negative implications on the listed entity
Ÿ Non-compliance of any regulatory, statutory or listing
Ÿ Details of any joint venture or collaboration agreement
requirements and shareholders service such as non-payment
Ÿ Transactions that involve substantial payment towards of dividend, delay in share transfer etc
goodwill, brand equity, or intellectual property

Ÿ Significant labour problems and their proposed solutions.

Any significant development in Human Resources/

During the financial year ended 31st March 2017, Board of Directors met 6 times during the year on 20th May 2016, 11th August 2016,
14th November 2016, 8th February 2017, 11th March 2017 & 30th March 2017. The details of directors’ attendance at the Board meetings
during the year and at the last Annual General Meeting are given below:

Name of the Director No of Board Meeting held No of Board meeting attended Attendance at the last AGM
Mr. V.G.Siddhartha 6 6 Yes
Mr. S.V.Ranganath 6 6 Yes
Mr. M.D.Mallya 6 3 No
Dr. Albert Hieronimus 6 6 No
Mr. Sanjay Nayar 6 4 No
Mrs. Malavika Hegde 6 5 Yes

DETAILS OF DIRECTORSHIP IN OTHER COMPANIES

None of the directors on the board hold directorships in more than ten public companies. Further, none of them is a member of more
than ten committees or Chairman of more than five committees across all the public companies in which he is a director. Necessary
disclosures regarding committee positions in other public companies have been made by the directors. The details of directorships of
the Company’s Directors in other companies are given below:

V.G. SIDDHARTHA
Name of Company Nature of Interest
Coffee Day Global Limited Managing Director
Sivan Securities Private Limited Director
Mindtree Limited Nominee Director
Ittiam Systems Private Limited Director
Coffee Day Resorts (MSM) Private Limited Director
Coffee Day Natural Resources Private Limited Director

CORPORATE GOVERNANCE REPORT | 037

MALAVIKA HEGDE
Name of Company Nature of Interest
Coffee Day Global Limited Director
Coffee Day Resorts (MSM) Private Limited Director
Coffee Day Natural Resources Private Limited Director
SANJAY NAYAR
Name of Company Nature of Interest
Pratham Education Foundation Director
Valleyview Probuild Private Limited Director
Indian school of Business Director
KKR India Advisors Private Limited Director
KKR India Financial Services Private Limited Director
Heritage View Developers Private Limited Director
Grameen Capital India Private Limited Director
Coffee Day Global Limited Director
Magma Fincorp Limited Director
Pratham Institute For Literacy Education And Vocational Training Director
Grameen Capital Investment Advisors Private Limited Director
Apollo Hospitals Enterprise Limited Director
Sea View Probuild Private Limited Director
Gland Pharma Ltd Nominee Director
Sealink View Probuild Private Limited Director
Seynse Tecnologies Private Limited Director
Avendus Capital Private Limited Nominee Director
USIBC Global Private Limited Director
Max Financial Services Limited Director
Epimoney Private Limited Director
S.V. RANGANATH
Name of Company Nature of Interest
Centre for study of Science Technology and policy Whole Time Director
Indian Institute For Human Settlements Director
Coffee Day Global Limited Director
Indian Institute of Trans Disciplinary Health Sciences and Technology Director
ALBERT HIERONIMUS
Name of Company Nature of Interest
NIL -
M.D. MALLYA
Name of Company Nature of Interest
India Infradebt Limited Director
Emami Ltd Director
Nitesh Estates Limited Director
Seven Islands Shipping Limited Director
Interglobe Aviation Ltd Chairman & Non-Executive Director
Milestone Capital Advisors Limited Director

038 | COFFEE DAY | ANNUAL REPORT 2016-17

DETAILS OF MEMBERSHIP/CHAIRMANSHIP OF DIRECTORS IN BOARD COMMITTEES
Following is the list of Memberships/Chairmanships of Directors in the committees* of the Listed companies in which they are holding
directorships:

S. no Name of the Director * No. of Committee Memberships/Chairmanship held in listed Companies

1 Mr. V.G.Siddhartha 3
2 Mrs. Malavika Hegde 1 as a Chairman
3 Mr. Sanjay Omprakash Nayar 1
4 Mr. S.V.Ranganath 3 (including 2 as Chairman)
5 Mr. M.D.Mallya 3 (including 1 as Chairman)
6 Dr. Albert Hieronimus 1
*Includes Only Audit & Stakeholders Relationship Committees

SHAREHOLDING OF DIRECTORS

Name of the Director Nature of Directorship Details of shareholding as at 31st March 2017
Mr. V.G.Siddhartha Promoter, Chairman & Managing Director 69,174,700
Mrs. Malavika Hegde Promoter Group, Non-Executive Director 3,038,104
Mr. Sanjay Nayar Nominee Director -
Mr. S.V.Ranganath Independent and Non-Executive Director -
Mr. M.D.Mallya Independent and Non-Executive Director -
Dr. Albert Hieronimus Independent and Non-Executive Director -

RELATIONSHIPS BETWEEN DIRECTORS MEETING OF INDEPENDENT DIRECTORS

V.G. Siddhartha and Malavika Hegde are related to each other. During the year, the Independent director met in an executive
Malavika Hegde is the wife of V.G. Siddhartha. None of the other session without the presence of Non-Independent Directors
Directors are related to each other. and members of the Management. The Independent directors
reviewed the performance of Non-Independent Directors, the
RE-APPOINTMENT OF DIRECTORS
Board and the Chairperson of the Company. They assessed the
Mrs. Malavika Hegde, shall retire by rotation at the ensuing Annual quality, quantity and timeliness of flow of information between
General Meeting and is eligible for re-appointment. the Company management and the Board that is necessary for
the Board to effectively and reasonably perform their duties.
NOTICE OF INTEREST BY SENIOR MANAGEMENT
PERSONNEL BOARD COMMITTEES
The Board has noted that no material financial and commercial Coffee Day has constituted various Committees to focus on
transactions have been entered into between the Company and specific areas and to make informed decisions within their
Senior Management team, where they have personal interest. authority. Each Committee is directed by its Charter which
outlines their scope, roles and responsibilities and their powers.
DETAILS OF FAMILIARISATION PROGRAMME TO
All the decisions and recommendations of the Committee are
INDEPENDENT DIRECTORS
placed before the Board for their approval as and when needed.
Regulation 25(7) of SEBI (LODR) 2015 and Schedule IV of the
Companies Act, 2013 mandates the Company to familiarize the The various Board level Committees are as under:
Independent Directors with the Company by conducting training Ÿ Audit Committee
programmes. The Program aims to provide insights into the Ÿ Nomination & Remuneration Committee
Company to enable the Independent Directors to understand its Ÿ Stakeholders Relationship Committee
business in depth and contribute to the strategy and overseeing
of the Company. The details of familiarisation programme was put
up on the website at www.coffeeday.com

CORPORATE GOVERNANCE REPORT | 039

AUDIT COMMITTEE 7) Reviewing, with the management, the statement of uses/
application of funds raised through an issue (public issue,
Terms of Reference
rights issue, preferential issue, etc.), the statement of funds
The Audit Committee provides direction to the audit function
utilized for purposes other than those stated in the offer
and monitors the quality of internal and statutory audit with an
document/ prospectus/ notice and the report submitted
objective of moving towards a regime of unqualified financial
by the monitoring agency monitoring the utilization of
statements. The Committee functions as per regulation 18 of
proceeds of a public or rights issue, and making appropriate
the SEBI (LODR) 2015 and the provisions of Section 177 of the
recommendations to the Board to take up steps in this
Companies Act, 2013, it shall include the following
matter. This also includes monitoring the use/application
1) Overseeing the Company’s financial reporting process of the funds raised through the proposed Offer by the
and disclosure of its financial information to ensure that its Company;
financial statements are correct, sufficient and credible;
8) Approval or any subsequent modifications of transactions of
2) Recommending to the Board the appointment, re- the Company with related parties;
appointment and replacement, remuneration and terms of
9) Scrutinizing of inter-corporate loans and investments;
appointment of the statutory auditor of the Company and
the fixation of audit fee; 10) Valuing of undertakings or assets of the Company, wherever
it is necessary;
3) Reviewing and monitoring the statutory auditor’s
independence and performance, and effectiveness of audit 11) Evaluating of internal financial controls and risk management
process; systems;

4) Approving payments to statutory auditors for any other 12) Establishing a vigil mechanism for directors and employees
services rendered by the statutory auditors; to report their genuine concerns or grievances

5) Reviewing, with the management, the annual financial 13) Reviewing, with the management, the performance of
statements and auditor’s report thereon before submission statutory and internal auditors, and adequacy of the internal
to the Board for approval, with particular reference to: control systems;

a) Matters required to be included in the Director’s 14) Reviewing the adequacy of internal audit function if any,
Responsibility Statement to be included in the Board’s including the structure of the internal audit department,
report in terms of clause (c) of sub-section 3 of Section staffing and seniority of the official heading the department,
134 of the Companies Act, 2013, as amended; reporting structure coverage and frequency of internal audit;

b) Changes, if any, in accounting policies and practices and 15) Discussing with internal auditors on any significant findings
reasons for the same; and follow up there on;

c) Major accounting entries involving estimates based on 16) Reviewing the findings of any internal investigations by the
the exercise of judgment by management; internal auditors into matters where there is suspected fraud
or irregularity or a failure of internal control systems of a
d) Significant adjustments made in the financial statements
material nature and reporting the matter to the Board;
arising out of audit findings;
17) Discussing with statutory auditors before the audit
e) Compliance with listing and other legal requirements
commences, about the nature and scope of audit as well as
relating to financial statements;
post-audit discussion to ascertain any area of concern;
f ) Disclosure of any transactions; and
18) Looking into the reasons for substantial defaults in the
g) Qualifications in the draft audit report. payment to the depositors, debenture holders, shareholders
(in case of non payment of declared dividends) and creditors;
6) Reviewing, with the management, the quarterly, half-yearly
and annual financial statements before submission to the 19) Reviewing the functioning of the whistle blower mechanism;
Board for approval;

040 | COFFEE DAY | ANNUAL REPORT 2016-17

20) Approving the appointment of the chief financial officer NOMINATION & REMUNERATION COMMITTEE
or any other person heading the finance function or
TERMS OF REFERENCE
discharging that function after assessing the qualifications,
The Committee was constituted in terms of the requirement of
experience and background, etc. of the candidate; and
Regulation 19 of the SEBI (LODR) 2015 and as per Section 178 of
21) Carrying out any other function as is mentioned in the terms the Companies Act, 2013 it shall include the following
of reference of the Audit Committee.
1. Formulating the criteria for determining qualifications, positive
COMPOSITION attributes and independence of a director and recommending
The Board constituted the Audit Committee on 26th January to the Board a policy, relating to the remuneration of the
2015. directors, key managerial personnel and other employees;

The following directors are the current members of the 2. Formulating of criteria for evaluation of the independent
Committee: directors and the Board;

1. Shri S V Ranganath, Chairman 3. Devising a policy on Board diversity;

2. Mr. V G Siddhartha, 4. Identifying persons who qualify to become directors or who

may be appointed in senior management in accordance
3. Dr. Albert Hieronimus
with the criteria laid down, recommending to the Board their
Majority of members of the committee are independent. The appointment and removal, and carrying out evaluations of
members possess sound knowledge of accounts, finance, audit every director’s performance;
and legal matters.
5. Performing such other activities as may be delegated by the
MEETING AND ATTENDANCE DURING THE YEAR Board of Directors and/or are statutorily prescribed under any
law to be attended to by the Nomination and Remuneration
Name No. of meeting No. of meeting
Committee.”
held attended
Mr. S.V. Ranganath 4 4 COMPOSITION
Dr. Albert Hieronimus 4 4
The Board constituted the Nomination and Remuneration
Mr. V.G. Siddhartha 4 4 Committee on 26th January 2015.
During FY, the Committee met 4 times on 20th May 2016, 11th The following directors are the current members of the
August 2016, 14th November 2016 & 8th February 2017. The Committee:
Senior Management team and Statutory Auditors attended all
the meetings of the Audit Committee. The Company Secretary 1. Shri. S. V. Ranganath, Chairman

acts as the Secretary to the Audit Committee. 2. Dr. Albert Hieronimus

The internal auditors, who are appointed to review and report 3. Mrs. Malavika Hegde
that the internal control processes & systems are in place and
they report quarterly to the Audit Committee. The committee MEETING AND ATTENDANCE DURING THE YEAR

meets regularly in private sessions with the external auditors, the Name No. of meeting No. of meeting
internal auditors and the chief financial officer. held attended
Mr. S.V. Ranganath 1 1
CEO/CFO CERTIFICATION
Dr. Albert Hieronimus 1 1
The CEO and CFO have certified, in terms of regulation 17(8) of Mrs. Malavika Hegde 1 1
the SEBI (LODR) 2015 to the Board that the financial statements
present a true and fair view of the Company’s affairs and are in
compliance with existing accounting standards.

CORPORATE GOVERNANCE REPORT | 041

PERFORMANCE EVALUATION OF INDEPENDENT The evaluation process covered specifically the broad parameters
DIRECTORS for reviewing the performance of the Board and its Committees
The Board is responsible for undertaking a formal annual on various areas, including –
evaluation of its own performance, that of its Committees and Ÿ Size, structure and expertise of the Board
of individual Directors as per section 134 of companies act, 2013
Ÿ Review of strategies, risk assessment, robust policies and
and regulation 17 of SEBI (LODR) 2015 with a view to review their
procedures by Board.
functioning and effectiveness and also for identifying possible
paths for improvement. During the year, the Board in concurrence Ÿ Oversight of the financial reporting process & monitoring
with Nomination and Remuneration Committee carried out a company’s internal control system.
performance evaluation of itself, its Committees, the Chairperson
Ÿ Quality of agenda, conduct of meeting, procedures and
and each of the executive/non-executive/independent directors
process followed for effective discharge of functions.
through a self evaluation survey process. This was led by the
Nomination and Remuneration Committee. Ÿ Effective discharge of functions and duties by Committee as
per terms of reference.
The Independent directors were evaluated on various
performance indicators including aspects relating to - Ÿ Appropriateness and timeliness of the updates given on
regulatory developments
Ÿ Integrity and maintenance of confidentiality
Ÿ Board’s engagement with senior management team.
Ÿ Commitment and participation at the Board & Committee
Ÿ Effective deployment of knowledge and expertise The overall feedback was positive with the Directors recognizing
that the performance of the Board, the chairperson, independent
Ÿ Exercise of objective independent judgment in the best
directors and its various Committees were effective.
interest of Company
Ÿ Interpersonal relationships with other directors and
management

REMUNERATION OF DIRECTORS

DETAILS OF REMUNERATION
The details of remuneration and sitting fees paid or provided to each of the Directors during the year ended 31st March 2017 are given
below:
Rs.in million
Salary and Perquisites Others
Name of the Director Fixed pay & Bonus Perquisites Retiral Benefits Commission Sitting fees Total
Mr. S.V. Ranganath - - - - 1.0 1.0
Mr. Albert Hieronimus - - - - 1.0 1.0
Mr. M.D. Mallya - - - - 0.3 0.3

No options under the ESOP plan were granted to the Executive / PECUNIARY RELATIONS OR TRANSACTIONS OF THE NON-
Non-Executive Directors during the year. EXECUTIVE DIRECTORS
There were no pecuniary relationship or transactions of non-
SERVICES CONTRACTS, NOTICE AND SEVERANCE FEES
executive directors vis-a-vis the Company which has potential
As at 31st March 2017, the Board comprised Six members
conflict with the interests of the Company at large.
including One Chairman and Managing Director, two non-
executive Directors and three are independent directors. COMPENSATION/FEES PAID TO NON-EXECUTIVE
However, Independent Directors are not subject to any notice DIRECTORS
period and severance fees. There were no payments made to the non-executive directors of
the Company.

042 | COFFEE DAY | ANNUAL REPORT 2016-17

CRITERIA FOR MAKING PAYMENT TO NON-EXECUTIVE 3. Oversee performance of the Registrars and Transfer Agents
DIRECTORS of the Company and recommending measures for overall
The criteria for making payment shall not be applicable for the improvement in the quality of investor services.
Company. 4. Monitoring of implementation and compliance with the
Company’s Code of Conduct for Prohibition of Insider
STAKEHOLDER RELATIONSHIP COMMITTEE
Trading in pursuance of SEBI (Prohibition of Insider Trading)
TERMS OF REFERENCE Regulations, 1992.
The Committee is functioning in terms of mandatory requirement
COMPOSITION
of Regulation 20 of SEBI (LODR) 2015 and as per Section 178 of the
Companies Act, 2013. The Board constituted Stakeholders Relationship Committee
on 26th January 2015. The following directors are the current
1. Approval for issue of duplicate certificates and oversee and
members of the Committee:
review all matters connected with transfer of securities of the
Company. 1. Mrs. Malavika Hegde-Chairman

2. Redressal of shareholders’/ investors’ complaints related to 2. Mr. V. G. Siddhartha

transfer of shares, non-receipt of Balance Sheet, non-receipt of 3. Shri S V Ranganath
declared dividend, etc.

DETAILS OF SHAREHOLDERS COMPLAINTS

Details of the shareholders complaints received and redressed during the year:

Opening Complaints received Complaints solved Pending

NIL 4 4 NIL

There have been no material grievances and all the grievance received were attended and resolved.

OTHER COMMITTEES CONSTITUTED BY THE BOARD

1. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Name of the Director Category Position
1. Mr. S.V. Ranganath Independent Director Chairperson
2. Mr. V.G. Siddhartha Chairman & Managing Director Member
3. Mrs. Malavika Hegde Non-Executive Director Member
2. RISK MANAGEMENT COMMITTEE
Name of the Director Category Position
1. Mr. V.G. Siddhartha Chairman & Managing Director Chairperson
2. Mrs. Malavika Hegde Non-Executive Director Member
3. ADMINISTRATION COMMITTEE
Name of the Director Category Position
1. Mr. V.G. Siddhartha Chairman & Managing Director Chairperson
2. Mrs. Malavika Hegde Non-Executive Director Member

CORPORATE GOVERNANCE REPORT | 043

Mr. Sadananda Poojary is the Compliance officer as appointed in manner as specified from time to time.
under regulation 6 of the SEBI (LODR) 2015 and shall be
(c) Ensuring that the correct procedures have been followed
responsible for-
that would result in the correctness, authenticity and
(a) Ensuring conformity with the regulatory provisions applicable comprehensiveness of the information, statements and
to the listed entity in letter and spirit. reports filed by the listed entity under these regulations.

(b) Co-ordination with and reporting to the Board, recognized (d) Monitoring email address of grievance redressal division as
stock exchange(s) and depositories with respect to compliance designated by the listed entity for the purpose of registering
with rules, regulations and other directives of these authorities complaints by investors.

GENERAL BODY MEETINGS

LOCATION AND TIME OF THE SHAREHOLDERS MEETINGS

Generally, the Annual General Meetings of the Company are convened within Six months of the closure of the financial year and General
Meetings are held as and when required.

The details of the previous General Meetings are as below:

Year Date and Time Venue Special Resolution

2013-14 30.09.2014 No: 23/2, Coffee Day Square, Vittal Mallya -
04:00 PM Road, Bangalore– 560 001
2014-15 18.08.2015 No: 23/2, Coffee Day Square, Vittal Mallya -
10:00 AM Road, Bangalore– 560 001
2015-16 14.09.2016 Taj Vivanta, No. 2275, Tumkur Road, Issue of Non-Convertible Debentures on a
11:00 AM Yeshwantpur, Bengaluru-560022 private Placement Basis
2016-17 10.03.2017 Global Village, RVCE Post, Mysore Road, Approval of the scheme of Amalgamation
12:00 Noon Mylasandra, Bangalore - 560059 of Coffee day Enterprises Limited with
(NCLT Convened Meeting) Coffee Day Overseas Private Limited

During the year, as per NSE observation letter for approval of scheme of Amalgamation, the Company along with the NCLT Convened
Meeting, approached the shareholders for Approval of the scheme of Amalgamation of Coffee day Enterprises Limited with Coffee Day
Overseas Private Limited through postal ballot in February, 2017.

Date of postal Ballot Notice: 3rd February 2017

Voting Period: 8th February – 9th March 2017

Date of Declaration of Results: 11th March 2017

Name of the resolution Type of No of votes Votes cast in Votes cast % of votes in
Resolution polled favour against favour
Approval of the scheme of Amalgamation of Special 16,89,18,169 16,89,12,160 6009 99.99%
Coffee day Enterprises Limited with Coffee Day
Overseas Private Limited

MEANS OF COMMUNICATION along with presentations made by the Company to Analysts are
The quarterly, half-yearly and yearly financial results are sent to also posted on the website of the Company viz. www.coffeeday.
the Stock Exchanges immediately after the Board approves the com. The Company’s website also displays all official news
same. These results were published in English newspapers, usually releases. The Company organizes investor conference calls to
in Business Line and Kannada newspaper, Vijayvani. The results discuss its financial results every quarter where investor queries
are answered by the Executive Management of the Company.

044 | COFFEE DAY | ANNUAL REPORT 2016-17

GENERAL SHAREHOLDERS’ INFORMATION

Annual General Meeting 2016-17

Date and Time 14th September 2017 at 11.00 a.m
Venue Café Coffee Day, Global Village, RVCE Post, Mysore Road, Mylasandra, Bangalore -
560059
Financial year 2016-17
Dividend payment date NA
Financial Calendar for 2017-2018
The following are tentative dates
First Quarterly Results 10th August 2017
Half-yearly Results 08th November 2017
Third Quarterly Results 13th February 2018
Annual Results 2016-17 18th May 2018
AGM for the year 2017-18 10th September 2018
Dates of Book Closure NA
Listing on Stock Exchanges National Stock Exchange of India Limited
Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051
BSE Limited
P J Towers, Dalal Street, Mumbai - 400 001
Stock Code/Symbol NSE – COFFEEDAY| BSE – 539436
International Securities Identification Number INE335K01011

MARKET PRICE DATA DURING 2016-17

The monthly high/low closing prices and volume of shares of the Company from 1st April 2016 to 31st March 2017 are given below:

Months BSE NSE

High Price Low Price Volume of Equity Shares High Price Low Price Volume of Equity Shares
Apr-16 274.50 224.70 4,94,992 275.00 223.25 26,34,459
May-16 276.90 247.00 5,30,125 276.75 246.10 27,37,684
Jun-16 270.00 240.00 2,79,180 274.90 243.65 24,99,007
Jul-16 264.90 229.35 3,93,960 265.20 230.00 29,52,368
Aug-16 260.00 233.45 7,61,510 260.80 234.30 16,43,052
Sep-16 253.40 218.00 2,10,224 254.00 215.60 17,40,065
Oct-16 234.40 220.45 1,95,583 234.70 220.00 25,40,623
Nov-16 228.80 198.50 2,11,940 229.25 198.40 13,24,083
Dec-16 212.35 190.50 21,13,190 212.05 190.02 37,28,615
Jan-17 207.90 195.80 2,37,699 208.40 195.70 21,31,420
Feb-17 245.10 198.05 18,74,819 244.80 198.15 82,45,510
Mar-17 249.50 225.00 3,14,110 249.45 227.00 24,25,366

CORPORATE GOVERNANCE REPORT | 045

RELATIVE MOVEMENT CHART
The chart below gives the relative movement of the closing price of the Company’s share and the BSE Sensex/NSE Nifty relative to the
closing price. The period covered is 1st April 2016 to 31st March 2017. The Management cautions that the stock price movement shown
in the graph below should not be considered indicative of potential future stock price performance.
300.00 30,000.00

250.00 29,000.00
28,000.00
200.00
27,000.00
150.00
26,000.00
100.00
25,000.00
50.00 24,000.00
- 23,000.00
r- 16 -16 16 16 16 16 16 16 16 17 17 17
ay n- Ju
l- g- p- t- v- c- n- b - ar-
Ap M Ju Au Se Oc No De Ja Fe M

CDEL S&P BSE Sensex

300.00 9,500.00

250.00 9,000.00
200.00
8,500.00
150.00
8,000.00
100.00

50.00 7,500.00

- 7,000.00
6 6 6 6 6 6 6 6 6 7 7 7
r-1 ay
-1 n -1 l-1 g-1 p -1 t-1 v-1 c-1 n -1 b -1 r-1
Ap M Ju Ju Au Se Oc No De Ja Fe M
a

CDEL Nifty 50

SHARE TRANSFER SYSTEM

100% of the equity shares of the Company are in electronic form except for two shareholders who holds 15 Physical Shares. Transfers of
these shares are done through the depositories with no involvement of the Company.

DISTRIBUTION OF THE SHAREHOLDING

The distribution of shareholding (category wise) as at 31st March 2017 is as under:

S.no Category No of shares % to Equity

1 Promoters (Indian & Foreign) 108,404,796 52.62
2 Foreign Institutional Investors 145,500 0.08
3 Mutual Funds, Banks, IFIs 1,762,514 0.86
4 NRIs & Foreign Nationals 69,797,043 33.88
5 Corporate Bodies 8,771,575 4.25
6 Indian Public & Others 17,120,291 8.31

046 | COFFEE DAY | ANNUAL REPORT 2016-17

DISTRIBUTION OF SHAREHOLDING BY NUMBER OF SHARES
Category No of shareholders Total Shares % to Shareholders % to paid up capital
Up to 5,000 57716 8,524,815 99.54 4.14
5,001- 10,000 95 712,645 0.16 0.35
10,001- 20,000 46 658,764 0.09 0.32
20,001- 30,000 29 703,904 0.05 0.34
30,001- 40,000 19 665,880 0.03 0.32
40,001- 50,000 10 477,072 0.01 0.23
50,001- 100,000 21 1,530,362 0.03 0.74
100,001 & Above 45 192,728,277 0.09 93.56

DEMATERIALIZATION OF SHARES AND LIQUIDITY WHISTLE BLOWER POLICY/ VIGIL MECHANISM

15 shares constituting 0.00 % of the paid up share capital of the The Company has implemented a Whistle Blower Policy pursuant
Company were in physical form as at 31st March 2017. to the provisions of Section 177 of the Companies Act, 2013 read
with Regulation 22 of the SEBI (LODR) 2015, whereby employees,
There are no outstanding GDRs/ ADRs/ Warrants and convertible
directors and other stakeholders can report matters such as generic
instruments.
grievances, corruption, misconduct, fraud, misappropriation of
CONTACT INFORMATION assets and non-compliance to code of conduct to the Company.
The policy safeguards the whistle blowers to report concerns or
INVESTOR GRIEVANCES CORRESPONDENCE
grievances and also provides direct access to the Chairman of the
Mr. Sadananda Poojary Audit Committee. The Company affirms that no personnel has
Company Secretary and Compliance Officer been denied access to the audit committee.
Tel.: 91 80 - 40012345
The details of the Whistle Blower Policy are available on the
E-mail id: [email protected]
website of the Company at www.coffeeday.com
REGISTRAR AND SHARE TRANSFER AGENTS
COMPLIANCE WITH NON-MANDATORY REQUIREMENT
Link Intime India Private Limited Apart from complying with the mandatory requirements
C 101, 247 Park, LBS Marg, Vikhroli (West), Mumbai 400083 prescribed by regulation of SEBI (LODR) 2015, the Company has
complied with a few non-mandatory requirements, such as the
Tel.: 022 - 2594 6970
Internal Auditor report directly to the Chairman of the Audit
CORRESPONDENCE ADDRESS Committee.

Regd. Office RELATED PARTY CONTRACTS OR ARRANGEMENTS

Coffee Day Enterprises Limited All transactions entered into with Related Parties as defined under
23/2, Coffee Day Square Companies Act, 2013 during the year were in the ordinary course
Vittal Mallya Road, Bangalore-560001 of business and on an arm’s length basis, and did not attract
provisions of Section 188 of Companies Act, 2013 and regulation
Tel.: 080 - 4001 2345
23 of the SEBI (LODR) 2015 relating to approval of shareholders.
OTHER DISCLOSURES The Company has formulated a policy on “materiality of related
DETAILS OF NON-COMPLIANCE party transactions” and the process of dealing with such
transaction, which are in line with the provisions of the Companies
There were no penalties or strictures imposed on the Company
Act, 2013 and SEBI regulations. The same is also available on the
by Stock Exchanges, SEBI or any statutory authority in any matter
website of the Company www.coffeeday.com
related to capital markets during the last 3 years

CORPORATE GOVERNANCE REPORT | 047

Transactions with related parties are in the ordinary course of The Company has 44 subsidiaries of which one subsidiary viz,
business and also on arms’ length pricing basis. Prior omnibus Coffee Day Global Limited is identified as a material subsidiary.
approval from the Audit Committee is obtained for transactions A report on the performance and financial position of each of
which are repetitive and also normal in nature. Further, disclosures the Subsidiary Companies is presented in the Boards’ report. The
are made to the Audit Committee and the Board of Directors on financial statements of the subsidiaries will be made available on
a quarterly basis. the website of the Company, post approval by the members.

There have been no material related party transactions undertaken CODE OF CONDUCT
by the Company under Section 188 of the Companies Act, 2013
The Board has laid down a code of conduct for all Board members
and hence, no details have been enclosed pursuant to clause (h)
and Senior Management of the Company and it is posted on the
of subsection (3) of Section 134 of Companies Act, 2013 read with
website of the Company (www.coffeeday.com). The declaration
Rule 8(2) of the Companies (Accounts) Rules 2014.
from Chairman & Managing Director with regard to compliance
MATERIAL SUBSIDIARY of code of conduct by the Board of Directors and Senior
Management is enclosed and forms part of this report.
The Company has formulated a policy for determining ‘material’
subsidiaries pursuant to the provisions of the Listing Agreement.
The said policy is available at the Company’s website www.
coffeeday.com.

DECLARATION BY THE MANAGING DIRECTOR UNDER LISTING REGULATIONS REGARDING COMPLIANCE WITH BUSINESS
CONDUCT GUIDELINES (CODE OF CONDUCT)
In accordance with the Listing Regulations, I hereby confirm that all the Directors and the Senior Management Personnel of the Company
have affirmed compliance with the Code of Conduct as applicable to them, for the Financial Year ended 31st March 2017.

For Coffee Day Enterprises Limited

Place: Bengaluru (Sd/-)

Date: 18th May 2017 Mr. V.G. Siddhartha
Chairman & Managing Director

048 | COFFEE DAY | ANNUAL REPORT 2016-17

practicing company secretaries certificate on
corporate governance
Corporate Identity No: L55101KA2008PLC046866
Authorized Share Capital: Rs.2,74,08,40,000/-
Paid Up Share Capital : Rs.2,06,00,17,190/-

To,
The Members of
Coffee Day Enterprises Limited.,
Coffee Day Square, 23/2,
Vittal Mallya Road,
Bengaluru-560001

We have examined the compliance of conditions of Corporate Governance by Coffee Day Enterprises Limited (‘the Company’) for the
year ended 31st March 2017, as per Regulations 17-27, clauses (b) to (i) of Regulation 46(2) and paragraphs C, D and E of Schedule V of
the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’).

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited
to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the
management has conducted the affairs of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has
complied with the conditions of Corporate Governance as specified in Regulations 17 to 27, clauses (b) to (i) of sub‑regulation (2) of
Regulation 46 and paragraphs C, D and E of Schedule V of the Listing Regulations, as applicable.

For HRB & Co.,

Company Secretaries
Firm’s registration Number: S2014KR261500

Sd/-
CS Harshavardhan R Boratti
Proprietor
C. P. No. : 11444
Membership No. 31152

Place: Bangalore
Date: 18th May 2017

CORPORATE GOVERNANCE REPORT | 049

Annexure-3

nomination
and remuneration policy
This Nomination and Remuneration Policy is being formulated in compliance with Section 178 of the
Companies Act, 2013 read along with the applicable rules thereto and Regulation 19 of the Listing obligation
and Disclosure Requirements Regulation, 2015 as amended from time to time. This policy on nomination
and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated
by the Nomination and Remuneration Committee (NRC or the Committee) and has been approved by the
Board of Directors.

DEFINITIONS
“Remuneration” means any money or its equivalent given or passed to any person for services rendered by
him and includes perquisites as defined under the Income-tax Act, 1961;

“Key Managerial Personnel” means: i) Managing Director, or Chief Executive Officer or Manager and in their
absence, a Whole time Director; ii) Chief Financial Officer; iii) Company Secretary; and iv) such other officer
as may be prescribed.

“Senior Managerial Personnel” mean the personnel of the Company who are members of its core
management team excluding Board of Directors. Normally, this would comprise all members of management,
of rank equivalent to General Manager and above, including all functional heads.

OBJECTIVE
The objective of the policy is to ensure that

Ÿ The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate
directors of the quality required to run the Company successfully;

Ÿ Relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

and

Ÿ Remuneration to directors, key managerial personnel and senior management involves a balance pay
reflecting short and long-term performance objectives appropriate to the working of the Company and
its goals.

050 | COFFEE DAY | ANNUAL REPORT 2016-17

ROLE OF THE COMMITTEE TERM / TENURE
The role of the NRC will be the following: a) Managing Director/Whole time Director:
Ÿ To formulate criteria for determining qualifications, positive The Company shall appoint or re-appoint any person as its
attributes and independence of a Director. Executive Chairman, Managing Director or Executive Director for
a term not exceeding five years at a time. No re-appointment shall
Ÿ To formulate criteria for evaluation of Independent Directors
be made earlier than one year before the expiry of term.
and the Board.

Ÿ To identify persons who are qualified to become Directors and b) Independent Director:
who may be appointed in Senior Management in accordance An Independent Director shall hold office for a term up to five
with the criteria laid down in this policy. consecutive years on the Board of the Company and will be
eligible for re-appointment on passing of a special resolution by
Ÿ To carry out evaluation of Director’s performance.
the Company and disclosure of such appointment in the Board’s
Ÿ To recommend to the Board the appointment and removal of report.
Directors and Senior Management.
No Independent Director shall hold office for more than two
Ÿ To recommend to the Board policy relating to remuneration for consecutive terms of upto maximum of 5 years each, but such
Directors, Key Managerial Personnel and Senior Management. Independent Director shall be eligible for appointment after
Ÿ To devise a policy on Board diversity, composition, size. expiry of three years of ceasing to become an Independent
Director.
Ÿ Succession planning for replacing Key Executives and
overseeing. Provided that an Independent Director shall not, during the said
period of three years, be appointed in or be associated with the
Ÿ To carry out any other function as is mandated by the Board
Company in any other capacity, either directly or indirectly.
from time to time and / or enforced by any statutory notification,
amendment or modification, as may be applicable. At the time of appointment of Independent Director it should
be ensured that number of Boards on which such Independent
Ÿ To perform such other functions as may be necessary or
Director serves is restricted to seven listed companies as
appropriate for the performance of its duties.
an Independent Director and three listed companies as an
APPOINTMENT AND REMOVAL OF DIRECTOR, KEY Independent Director in case such person is serving as a Whole
MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT time Director of a listed company or such other number as may
be prescribed under the Act.
a) The Committee shall identify and ascertain the integrity,
qualification, expertise and experience of the person for EVALUATION
appointment as Director, KMP or at Senior Management level
The Committee shall carry out evaluation of performance of
and recommend his / her appointment, as per Company’s
Director, KMP and Senior Management Personnel yearly or at
Policy.
such intervals as may be considered necessary.
b) A person should possess adequate qualification, expertise
REMOVAL
and experience for the position he / she is considered for
appointment. The Committee has authority to decide whether The Committee may recommend with reasons recorded in
qualification, expertise and experience possessed by a person writing, removal of a Director, KMP or Senior Management
is sufficient / satisfactory for the position. Personnel subject to the provisions and compliance of the
Companies Act, 2013, rules and regulations and the policy of the
c) The Company shall not appoint or continue the employment
Company.
of any person as Whole time Director who has attained the
age of seventy years. Provided that the term of the person RETIREMENT
holding this position may be extended beyond the age of The Director, KMP and Senior Management Personnel shall retire
seventy years with the approval of shareholders by passing a as per the applicable provisions of the Act and the prevailing
special resolution. policy of the Company. The Board will have the discretion to
retain the Director, KMP, Senior Management Personnel in the

NOMINATION AND REMUNERATION POLICY | 051

same position/ remuneration or otherwise even after attaining c) An Independent Director shall not be eligible to get Stock
the retirement age, for the benefit of the Company. Options and also shall not be eligible to participate in any
share based payment schemes of the Company.
POLICY FOR REMUNERATION TO DIRECTORS/KMP/SENIOR
MANAGEMENT PERSONNEL d) The Compensation Committee of the Company, constituted
for the purpose of administering the Employee Stock Option/
1) Remuneration to Managing Director / Whole time Directors:
Purchase Schemes, shall determine the stock options and
a) The Remuneration/ Commission etc. to be paid to Managing other share based payments to be made to Directors (other
Director / Whole time Directors, etc. shall be governed as per than Independent Directors).
provisions of the Companies Act, 2013 and rules made there
under or any other enactment for the time being in force and 3) Remuneration to Key Managerial Personnel and Senior
the approvals obtained from the Members of the Company. Management:
a) The remuneration to Key Managerial Personnel and Senior
b) The Nomination and Remuneration Committee shall make
Management shall, in compliance with the provisions of the
such recommendations to the Board of Directors, as it
Companies Act, 2013 and in accordance with the Company’s
may consider appropriate with regard to remuneration to
Policy.
Managing Director / Whole time Directors.
b) The Compensation Committee of the Company, constituted
2) Remuneration to Non- Executive / Independent Directors:
for the purpose of administering the Employee Stock Option/
a) The Non-Executive / Independent Directors may receive Purchase Schemes, shall determine the stock options and
sitting fees and such other remuneration as permissible under other share based payments to be made to Key Managerial
the provisions of Companies Act, 2013. The amount of sitting Personnel and Senior Management.
fees shall be such as may be recommended by the Nomination
c) The pay shall be decided based on the balance between
and Remuneration Committee and approved by the Board of
performance of the Company and performance of the Key
Directors.
Managerial Personnel and Senior Management, to be decided
b) All the remuneration of the Non- Executive / Independent annually or at such intervals as may be considered appropriate.
Directors (excluding remuneration for attending meetings as
prescribed under Section 197 (5) of the Companies Act, 2013) IMPLEMENTATION
shall be subject to ceiling/ limits as provided under Companies Ÿ The Committee may issue guidelines, procedures, formats,
Act, 2013 and rules made there under or any other enactment reporting mechanism and manuals in supplement and for
for the time being in force. The amount of such remuneration better implementation of this policy as considered appropriate.
shall be such as may be recommended by the Nomination
Ÿ The Committee may Delegate any of its powers to one or
and Remuneration Committee and approved by the Board of
more of its members.
Directors or shareholders, as the case may be.

052 | COFFEE DAY | ANNUAL REPORT 2016-17

Annexure-4

section 134(3)(m) of the

companies act, 2013 read with
the companies (accounts) rules,
2014:
A) CONSERVATION OF ENERGY
Your company is committed to adopt energy efficient practices across all its business units, offices, factories
and outlets to reduce the consumption of power by analysing power factor, maximum demand, working
hours, load factor, specific energy consumption and monthly consumption. On the basis of energy audit,
following energy conservation measures are taken:

Ÿ Installing advanced energy saving gadgets like capacitor banks, indigenized components like thermo
controllers for the ovens and usage of LED lighting etc.

Ÿ Energy Management by conducting energy audits and introducing innovative ways of saving power –
This includes introducing of high end online energy monitoring system in majority of CCD outlets, With
Internet of Things (IoT) it is possible to remotely monitor and manage energy usage and take timely
actions to stop inefficiencies.

The above mentioned initiatives have reduced the energy consumption by 8-9% compared to the previous
fiscal.

B) TECHNOLOGY AND INNOVATION.

Coffee Day has been constantly evolving with innovative ideas/Improvements in the areas of Coffee brewing,
curing, roasting, testing etc and to align with the taste of the consumers, we have been innovating vending
machines to cater the needs of the corporate customers and they are duly supported by latest, the efforts
however are undertaken and pooled at group level

C) FOREIGN EXCHANGE EARNINGS AND OUTGO:

Foreign exchange during the year

- Foreign Exchange used: Rs.1.03 million

- Foreign Exchange earned: NIL

STATUTORY SECTION | 053

Annexure-5

secretarial audit report

FOR THE FINANCIAL YEAR ENDED ON 31ST MARCH 2017
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies
(Appointment and Remuneration Personnel) Rules, 2014]

To,
The Members
M/s. Coffee Day Enterprises Limited

23/2, Coffee Day Square,

Vittal Mallya Road,
Bengaluru – 560001.

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the
adherence to good corporate practices by M/s. Coffee Day Enterprises Limited (herein after called ‘the
Company’). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating
the corporate conducts / statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other
records maintained by the Company and also the information provided by the Company, its officers, agents
and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion,
the Company has, during the audit period covering the financial year ended on 31st March 2017 (‘Audit
Period’) complied with the statutory provisions listed here under and also that the Company has proper
Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the
reporting made herein after;

I have examined the books, papers, minute books, forms and returns filed and other records maintained by
the Company for the financial year ended on 31st March 2017 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent
of Foreign Direct Investment. There were no Overseas Direct Investment and External Commercial
Borrowings during the period under review;

054 | COFFEE DAY | ANNUAL REPORT 2016-17

(v) The Regulations and Guidelines prescribed under the j. The payment of Gratuity Act, 1972
Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)
k. The Maternity Benefit Act, 1961
viz.:-
I have also examined compliance with the applicable clauses of
a. The Securities and Exchange Board of India (Substantial
the following:
Acquisition of Shares and Takeovers) Regulations, 2011;
(i) Secretarial Standards issued by The Institute of Company
b. The Securities and Exchange Board of India (Prohibition of
Secretaries of India.
Insider Trading) Regulations, 1992;
(ii) The Listing Agreements entered into by the Company with
c. The Securities and Exchange Board of India (Issue of
National Stock Exchange & Bombay Stock Exchange.
Capital and Disclosure Requirements) Regulations, 2009;
During the period under review, the Company has complied
d. The Securities and Exchange Board of India (Share Based
with the provisions of the Act, Rules, Regulations, Guidelines,
Employee Benefits) Regulation 2014 (Not applicable to
Standards, etc. mentioned above.
the Company during the Audit period);
I FURTHER REPORT THAT
e. The Securities and Exchange Board of India (Issue
and Listing of Debt Securities) Regulations, 2008 (Not The Board of Directors of the Company is duly constituted with
applicable to the Company during the Audit period); proper balance of Executive Directors, Non-Executive Directors
and Independent Directors. There are no changes in the
f. The Securities and Exchange Board of India (Registrars
composition of the Board of Directors e during the period under
to an Issue and Share Transfer Agents) Regulations, 1993
review.
regarding the Companies Act and dealing with client;
Adequate notice is given to all directors to schedule the Board
g. The Securities and Exchange Board of India (Delisting of
Meetings, agenda and detailed notes on agenda were sent at
Equity Shares) Regulations, 2009 (Not applicable to the
least seven days in advance, and a system exists for seeking and
Company during the Audit period); and
obtaining further information and clarifications on the agenda
h. The Securities and Exchange Board of India (Buy back items before the meeting and for meaningful participation at the
of Securities) Regulations, 1998 (Not applicable to the meeting.
Company during the Audit period);
Majority decision is carried through while the dissenting
i. The Securities and Exchange Board of India (Listing members’ views, if any, are captured and recorded as part of the
Obligation & Disclosure Requirements) Regulations, 2015. minutes.

(vi) Other law specifically applicable to the Company I further report that there are adequate systems and processes
in the Company commensurate with the size and operations of
a. Water (Prevention and control of Pollution) Act, 1974
the Company to monitor and ensure compliance with applicable
b. Air (Prevention and control of Pollution) Act, 1981 laws, rules, regulations and guidelines.
c. Hazardous Waste (Management, Handling and Trans
WE FURTHER REPORT THAT DURING THE AUDIT PERIOD
boundary Movement) Rules, 2008
(i) The Shareholders of the Company, at the NCLT Convened
d. Karnataka Excise Act, 1965 Meeting held on 10th March 2017, has approved the Scheme
e. Food Safety and Standards Authority of India Act, 2006 of Amalgamation of the Company with Coffee Day Overseas
Private Limited (Transferor Company).
f. The Prevention of Food Adulteration Act, 1954
(ii) The Company has allotted 800 Freely transferable, Rated,
g. Employees State Insurance Act, 1948
Unlisted Redeemable, Non-Convertible Series I Debentures
h. The Employees provident fund and miscellaneous of the Face Value of Rs.10,00,000/- each, aggregating up to
provisions act, 1952 Rs.80,00,00,000/- to ICICI Prudential Savings Fund.

i. The contract Labour (Regulation and Abolition) Act, 1970 (iii) The Company has allotted 950 Freely transferable, Rated,
Unlisted Redeemable, Non-Convertible Series I Debentures

SECRETARIAL AUDIT REPORT | 055

 of the Face Value of Rs.10,00,000/- each, aggregating up to For HRB & Co.,
Rs.95,00,00,000/- to ICICI Prudential Savings Fund. Company Secretaries
Firm’s registration Number: S2014KR261500
(iv) The Company has allotted 1050 Unlisted Rated Redeemable
Non-Convertible Debentures bearing a face value of CS Harshavardhan R Boratti
Rs.10,00,000/- each, aggregating up to Rs.105,00,00,000/- to Proprietor
DSP Blackrock Income Opportunities Fund. C. P. No. : 11444
Membership No. 31152
(v) The Company has allotted 1,000 Unlisted Rated Redeemable
Non-Convertible Debentures bearing a face value of Place: Bangalore
Rs.10,00,000/- each aggregating up to Rs.100,00,00,000/- to Date: 18.05.2017
ICICI Prudential Savings Fund.
This report is to be read with our letter of even date, which is
annexed as Annexure A and forms an integral part of this report.

To,
The Members
M/s. Coffee Day Enterprises Limited
23/2, Coffee Day Square, Vittal Mallya Road,
Bengaluru – 560001.

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion
on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of
the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial
records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company and relied
upon the Reports given by statutory auditors or other designated professionals.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and
happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of
management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with
which the management has conducted the affairs of the Company.

For HRB & Co.,

Company Secretaries
Firm’s registration Number: S2014KR261500

CS Harshavardhan R Boratti
Proprietor
Place: Bangalore C. P. No. : 11444
Date:18th May 2017 Membership No. 31152

056 | COFFEE DAY | ANNUAL REPORT 2016-17

Annexure-6

extract of annual return

As on the financial year ended 31.03.2017

[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the Companies
(Management and Administration) Rules, 2014]

FORM NO. MGT – 9

I. REGISTRATION AND OTHER DETAILS:

i) CIN L55101KA2008PLC046866
ii) Registration Date 20th June 2008
iii) Name of the Company Coffee Day Enterprises Limited (Formerly Coffee Day Resorts Private
Limited and Coffee Day Enterprises Private Limited)
iv) Category/Sub-Category of the Company Public Company / Limited by shares
v) Address of the Registered office and contact details 23/2, Coffee Day Square, Vittal Mallya Road, Bangalore-560 001
vi) Whether listed company Yes / No Yes
vii) Name, Address and contact details of Registrar and Link Intime India Pvt. Ltd
Transfer Agent, if any C 101, 247 Park, L.B.S.Marg, Vikhroli (West), Mumbai - 400083.

II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the Company:
Sl. Name and Description of NIC Code of the Products/ Service % to total turnover of the Company
No. main products / services
1 Sale of Coffee Beans 47211 44.84
2 Interest Income 64990 28.80
3 Dividend Income 64200 19.32
4 Hospitality Services 55101 11.04

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. Name and Address of the Company CIN/GLN Holding/ % of Applicable

No. Subsidiary/ shares Section
Associate held
1 Coffee Day Global Ltd U85110KA1993PLC015001 Subsidiary 86.63% 2 (87) (ii)
2 Tanglin Developments Ltd U85110KA1995PLC019495 Subsidiary 100.00% 2 (87) (ii)
3 Coffee Day Hotels and Resorts Pvt Ltd U55101KA2004PTC034591 Subsidiary 100.00% 2 (87) (ii)
4 Coffee Day Trading Ltd U74140KA2000PLC026366 Subsidiary 88.77% 2 (87) (ii)
5 Way2Wealth Securities Pvt Ltd U72200KA2000PTC027020 Subsidiary 85.53% 2 (87) (ii)
6 Amalgamated Holdings Ltd U85110KA1989PLC009913 Subsidiary 100.00% 2 (87) (ii)
7 Ganga Coffee Curing Works Ltd U85110KA1982PLC005048 Subsidiary 100.00% 2 (87) (ii)
8 A N Coffeeday International Ltd NA Subsidiary 100.00% 2 (87) (ii)
9 Coffee Day Properties ( India) Pvt Ltd U70102KA2007PTC043631 Subsidiary 100.00% 2 (87) (ii)
10 Classic Coffee Curing Works NA Subsidiary 100.00% 2 (87) (ii)
11 Coffeelab Ltd U85110KA1996PLC019932 Subsidiary 100.00% 2 (87) (ii)
12 Coffee Day Gastronomie Und Kaffeehandles GmbH NA Subsidiary 100.00% 2 (87) (ii)

STATUTORY SECTION | 057

Sl. Name and Address of the Company CIN/GLN Holding/ % of Applicable
No. Subsidiary/ shares Section
Associate held
13 Coffee Day C Z a.s NA Subsidiary 100.00% 2 (87) (ii)
14 Tanglin Retail Reality Developments Pvt Ltd U70102KA2007PTC044421 Subsidiary 100.00% 2 (87) (ii)
15 Sical Logistics Ltd L51909TN1955PLC002431 Subsidiary 52.83% 2 (87) (ii)
16 Sical Infra Assets Ltd U45203TN2007PLC063432 Subsidiary 53.60% 2 (87) (ii)
17 Sical Iron Ore Terminal Ltd U13100TN2006PLC061022 Subsidiary 63.00% 2 (87) (ii)
18 Sical Iron Ore Terminal ( Mangalore) Ltd U63020TN2009PLC073147 Subsidiary 100.00% 2 (87) (ii)
19 Norsea Offshore India Ltd U74900TN2009PLC071762 Subsidiary 99.99% 2 (87) (ii)
20 Bergen Offshore Logistics Pte Ltd NA Subsidiary 100.00% 2 (87) (ii)
21 Sical Multimodal and Rail Transport Ltd U60232TN2007PLC063378 Subsidiary 99.99% 2 (87) (ii)
22 Sical Mining Limited U10300TN2016PLC112461 Subsidiary 100.00% 2 (87) (ii)
23 Sical Saumya Mining Limited U74900TN2015PLC101236 Subsidiary 65.00% 2 (87) (ii)
24 Sical Bangalore Logistics Park Limited U63090TN2016PLC110673 Subsidiary 100.00% 2 (87) (ii)
25 Norsea Global Offshore Pte Limited NA Subsidiary 100.00% 2 (87) (ii)
26 Sical Adams Offshore Ltd U63000TN2012PLC087754 Subsidiary 99.99% 2 (87) (ii)
27 Girividyuth India Ltd U40101KA2001PLC029866 Subsidiary 100.00% 2 (87) (ii)
28 Wilderness Resorts Pvt Ltd U55101KA2005PTC035580 Subsidiary 100.00% 2 (87) (ii)
29 Karnataka Wildlife Resorts Pvt Ltd U92199KA2001PTC028981 Subsidiary 100.00% 2 (87) (ii)
30 Mandi2Market Traders Pvt Ltd U67190KA2007PTC043494 Subsidiary 99.99% 2 (87) (ii)
31 Way2Wealth Distributors Pvt Ltd U70101KA2001PTC029910 Subsidiary 99.99% 2 (87) (ii)
32 Way2Wealth Capital Pvt Ltd U65921KA1995PTC018960 Subsidiary 99.90% 2 (87) (ii)
33 Way2Wealth Realty Advisors Pvt Ltd U70101KA2010PTC052584 Subsidiary 95.00% 2 (87) (ii)
34 Way2Wealth Brokers Pvt Ltd U67120KA2000PTC027628 Subsidiary 99.99% 2 (87) (ii)
35 Way2Wealth Insurance Brokers Pvt Ltd U66010KA2003PTC032003 Subsidiary 100.00% 2 (87) (ii)
36 AlphaGrep Securities Pvt Ltd U66010KA2002PTC029982 Subsidiary 51.00% 2 (87) (ii)
37 Way2Wealth Commodities Pvt Ltd U51229KA2006PTC039880 Subsidiary 99.99% 2 (87) (ii)
38 Way2Wealth Illuminati Pte Ltd NA Subsidiary 100.00% 2 (87) (ii)
39 AlphaGrep Holding HK Ltd NA Subsidiary 100.00% 2 (87) (ii)
40 AlphaGrep UK Limited NA Subsidiary 100.00% 2 (87) (ii)
41 Shanghai Dao Ge International Trading Limited NA Subsidiary 100.00% 2 (87) (ii)
42 Magnasoft Consulting India Pvt Ltd U74140KA2000PTC026735 Subsidiary 77.88% 2 (87) (ii)
43 Magnasoft Europe Ltd NA Subsidiary 100.00% 2 (87) (ii)
44 Magnasoft Spatial Services Inc NA Subsidiary 100.00% 2 (87) (ii)
45 Ittiam Systems Pvt Ltd U72900KA2001PTC028392 Associate* 21.91% 2 (6)
46 Global Edge Software Pvt Ltd U85110KA1992PLC013114 Associate* 26.50% 2 (6)
47 Mindtree Ltd L72200KA1999PLC025564 Associate* 16.70% 2 (6)
48 Barefoot Resorts and Leisure India Pvt Ltd U55101TN1998PTC040221 Associate* 27.69% 2 (6)
49 PSA Sical Terminals Ltd U74999TN1998PLC040682 Joint Venture# 37.50% 2 (6)
50 Sical Sattva Rail Terminal Pvt. Ltd. U63031TN2000PTC045198 Joint Venture# 50% 2 (6)
51 Coffee Day Schaerer Technologies Private Limited U29248KA2015FTC084523 Joint Venture# 49% 2(6)
* The Companies are the associate of the Subsidiaries and Step Subsidiaries
# The Companies are the Joint Venture of the Subsidiaries & Step Subsidiaries

058 | COFFEE DAY | ANNUAL REPORT 2016-17

 IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)

i) Category-wise Share Holding:

Category Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change
Code Demat Physical Total % of total Demat Physical Total % of total during the year
shares shares
(A) PROMOTER AND PROMOTER GROUP
(1) Indian
(a) Individuals/ Hindu Undivided 72,075,304 - 72,075,304 34.99 72,212,804 - 72,212,804 35.05 0.06
Family
(b) Central Government/ State - - - - - - - -
Government(s)
(c) Bodies Corporate 36,191,992 36,191,992 17.57 36,191,992 36,191,992 17.57 -
(d) Financial Institutions/ Banks - - - - - - - -
(e) Any Other (specify) - - - - - - - -
Sub-Total (A)(1) 108,267,296 - 108,267,296 52.56 108,404,796 - 108,404,796 52.62 0.06
(2) Foreign
(a) Individuals (Non-Resident - - - - - - - - -
Individuals/ Foreign Individuals)
(b) Bodies Corporate - - - - - - - - -
(c) Institutions - - - - - - - - -
(d) Qualified Foreign Investor - - - - - - - - -
(e) Any Other (specify) - - - - - - - - -
Sub-Total (A)(2) - - - - - - - - -
Total Shareholding of Promoter 108,267,296 - 108,267,296 52.56 108,404,796 - 108,404,796 52.62 0.06
and Promoter Group (A)= (A)
(1)+(A)(2)
(B) PUBLIC SHAREHOLDING
(1) Institutions
(a) Mutual Funds/UTI 6,842,846 - 6,842,486 3.32 1,530,733 - 1,530,733 0.74 2.58
(b) Financial Institutions/ Banks 124,606 - 124,606 0.05 231,781 - 231,781 0.11 0.06
(c) Central Government/ State - - - - - - - - -
Government(s)
(d) Venture Capital Funds - - - - - - - - -

STATUTORY SECTION | 059

 Category Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change
Code Demat Physical Total % of total Demat Physical Total % of total during the year
shares shares
(e) Insurance Companies - - - - - - - - -
(f ) Foreign Institutional Investors 7,594,109 - 7,594,109 3.69 145,500 - 145,500 0.07 3.62
(g) Foreign Venture Capital Investors
(h) Qualified Foreign Investor 4,215,259 - 4,215,259 2.05 11,171,846 11,171,846 5.42 3.37
Any Other (specify) - - - - - - - - -
Sub-Total (B)(1) 18,776,820 - 18,776,820 9.11 13,079,860 - 13,079,860 6.35 2.76
(2) Non-institutions
(a) Bodies Corporate 64,346,797 64,346,797 31.24 66,980,711 66,980,711 32.52 1.26
(b) Individuals - - - - - - - - - -

060 | COFFEE DAY | ANNUAL REPORT 2016-17

(i) Individual shareholders 9,259,627 10 9,259,637 4.50 8,342,578 15 8,342,593 4.05 0.45
holding nominal share capital up
to Rs.1 lacs.
(ii) Individual shareholders 4,483,378 4,483,378 2.16 7,908,471 - 7,908,471 3.84 1.68
holding nominal share capital in
excess of Rs.1 lacs.
(c) Qualified Foreign Investor - - - - - - - - -
(d) Any Other (Details) - - - - - - - - -
NRIs/OCBs 199,206 - 199,206 0.11 416,061 - 416,061 0.20 0.09
Clearing Member 266,745 - 266,745 0.13 282,823 282,823 0.14 0.01
Hindu Undivided Families 382,840 - 382,840 0.19 586,404 586,404 0.28 0.09
Trusts 19,000 - 19,000 - - - - - -
Sub-Total (B)(2) 78,957,593 10 78,957,603 38.33 84,517,048 15 84,517,063 41.03 2.70
Total Public Shareholding 97,734,413 10 97,734,423 47.44 97,596,908 15 97,596,923 47.38 40.19
(B)= (B)(1)+(B)(2)
TOTAL (A)+(B) 206,001,709 10 206,001,719 100 206,001,704 15 206,001,719 100 -
(C) SHARES HELD BY CUSTODIANS AND AGAINST WHICH DEPOSITORY RECEIPTS HAVE BEEN ISSUED
Promoter and Promoter Group - - - - - - - - -
Public - - - - - - - - -
GRAND TOTAL (A+B+C) 206,001,709 10 206,001,719 100 206,001,704 15 206,001,719 100 -
ii) Shareholding of Promoters
Sl. Shareholder’s Name Shareholding at the beginning of the Shareholding at the end of the year % change in
No. year shareholding
No. of % of total % of Shares No. of % of total %of Shares during the
Shares Shares Pledged / Shares Shares Pledged / year
of the encumbered of the encumbered
Company to total Company to total
shares shares
1 Mr. V. G. Siddhartha 63,945,904 31.04 NIL 69,174,700 33.58 13.06 2.54
2 M/s Devadarshini Info 12,408,440 6.02 NIL 12,408,440 6.02 6.02 0.00
Technologies Private
Limited
3 M/s Coffee Day 12,268,416 5.96 NIL 12,268,416 5.96 5.92 0.00
Consolidations Private
Limited
4 M/s Gonibedu Coffee 11,071,104 5.37 NIL 11,071,104 5.37 5.37 0.00
Estates Private Limited
5 Mrs. Malavika Hegde 2,923,104 1.42 NIL 3,038,104 1.48 0.05 0.06
6 Mrs. Vasanthi Hegde 2,611,504 1.27 NIL 0 0.00 - 1.27
7 Mr. S. V. Gangaiah Hegde 2,594,792 1.26 NIL 0 0.00 - 1.26
8 M/s Sivan Securities 444,032 0.22 NIL 444,032 0.22 0.22 0.00
Private Limited

iii) Change in Promoters’/Promoters Grp shareholding

Sl. Name Shareholding Date Increase / Reason Cumulative Shareholding
No. Decrease during the year (01-04-
2016 - 31-03-207
No. of Shares % of total No. of % of total
on (01-04-16) shares of the shares shares of the
/ (31-03-17) Company Company
V. G. 63,945,904 31.04 22 Dec 2016 5,228,796 Inter se transfer 69,174,700 33.58
Siddhartha between promoters
69,174,700 33.57 31 Mar 2017 69,174,700 33.58
Malavika 2,923,104 1.42 22 Nov 16 30,000 Purchase 2,953,104 1.44
Hegde
23 Nov 16 10,000 Purchase 2,963,104 1.44
24 Nov 16 5,959 Purchase 2,969,063 1.44
25 Nov 16 41 Purchase 2,969,104 1.44
28 Nov 16 5000 Purchase 2,974,104 1.44
29 Nov 16 5000 Purchase 2,979,104 1.45
1 Dec 16
5000 Purchase 2,984,104 1.45
5 Dec 16
5000 Purchase 2,989,104 1.45
14 Dec 16 5000 Purchase 2,994,104 1.45
15 Dec 16 44,000 Purchase 3,038,104 1.48

STATUTORY SECTION | 061

 Sl. Name Shareholding Date Increase / Reason Cumulative Shareholding
No. Decrease during the year (01-04-
2016 - 31-03-207
No. of Shares % of total No. of % of total
on (01-04-16) shares of the shares shares of the
/ (31-03-17) Company Company
Vasanthi 22 Dec 2016 -2,611,504 Inter se transfer 0 0.00
Hegde between promoters
S. V. 22 Dec 2016 -2,594,792 Inter se transfer 0 0.00
Gangaiah between promoters
Hegde

iv) Shareholding Pattern of Top Ten Shareholders (Other than directors, Promoters and Holders of GDRs and ADRs)
Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
1. NLS Mauritius LLC
At the beginning of the year 22,412,992 10.88
Date wise Increase / Decrease in Promoters Shareholding
during the year specifying the reasons for increase /
decrease (e.g. allotment / transfer / bonus/ sweat equity
etc):
At the end of the year 22,412,992 10.88

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
2. KKR Mauritius PE Investments II Ltd
At the beginning of the year 21,826,912 10.59
Date wise Increase / Decrease in Promoters Shareholding
during the year specifying the reasons for increase /
decrease (e.g. allotment / transfer / bonus/ sweat equity
etc):
At the end of the year 21,826,912 10.59

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
3. Marina West (Singapore) Pte. Ltd
At the beginning of the year 0 0
Date wise Increase / Decrease in Promoters Shareholding Off market 5.53 11,402,901 5.53
during the year specifying the reasons for increase / purchase
decrease (e.g. allotment / transfer / bonus/ sweat equity 11,402,901
etc):
At the end of the year 11,402,901 5.53

062 | COFFEE DAY | ANNUAL REPORT 2016-17

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
4. Nandan. M. Nilekani
At the beginning of the year 2,671,128 1.30 2,671,128 1.30
Date wise Increase / Decrease in Promoters Shareholding Open 1.27 5,294,106 2.57
during the year specifying the reasons for increase / Market
decrease (e.g. allotment / transfer / bonus/ sweat equity Purchase
etc): 2,622,978
At the end of the year 5,294,106 2.57

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
5. Government Pension Fund Global
At the beginning of the year 3,344,938 1.62 3,344,938 1.62
Date wise Increase / Decrease in Promoters Shareholding Open 3,750,072 1.82
during the year specifying the reasons for increase / Market
decrease (e.g. allotment / transfer / bonus/ sweat equity Purchase
etc):
At the end of the year 3,750,072 1.82

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
6. Marina III (Singapore) Pte. Ltd.
At the beginning of the year 258,620 1.77 258,620 1.77
Date wise Increase / Decrease in Promoters Shareholding Open 1.24 2,566,331 1.24
during the year specifying the reasons for increase / Market
decrease (e.g. allotment / transfer / bonus/ sweat equity Purchase
etc): 2,566,331
At the end of the year 2,566,331 1.24

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
7. Platinum Asia Fund
At the beginning of the year 2,331,643 1.13 2,331,643 1.13
Date wise Increase / Decrease in Promoters Shareholding
during the year specifying the reasons for increase /
decrease (e.g. allotment / transfer / bonus/ sweat equity
etc):
At the end of the year 2,331,643 1.13 2,331,643 1.13

STATUTORY SECTION | 063

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
8. ICICI Lombard General Insurance Company Ltd
At the beginning of the year 0.00 0.00
Date wise Increase / Decrease in Promoters Shareholding Open 1.01
during the year specifying the reasons for increase / Market
decrease (e.g. allotment / transfer / bonus/ sweat equity Purchase
etc): 2,100,000
At the end of the year 2,100,000 1.01

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
9. National Westminister Bank PLC
At the beginning of the year 1,397,388 0.68 1,397,388 0.68
Date wise Increase / Decrease in Promoters Shareholding Open 0.15 1,729,204 0.83
during the year specifying the reasons for increase / Market
decrease (e.g. allotment / transfer / bonus/ sweat equity Purchase
etc): 331,816
At the end of the year 1,729,204 0.83

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative Shareholding
No. beginning of the year during the Year
No. of % of total shares No. of % of total shares
shares of the Company shares of the Company
10. Bennett, Coleman & Co. Ltd
At the beginning of the year 1,397,388 0.68 1,397,388 0.68
Date wise Increase / Decrease in Promoters Shareholding Open 0.02 1,368,304 0.68
during the year specifying the reasons for increase / Market
decrease (e.g. allotment / transfer / bonus/ sweat equity Purchase
etc): 29,084
At the end of the year 1,368,304 0.66

064 | COFFEE DAY | ANNUAL REPORT 2016-17

v) Shareholding of Directors and Key Managerial Personnel
Sl. Name Shareholding Date Increase / Reason Cumulative Shareholding
No. Decrease during the year (01-04-
2016 - 31-03-207
No. of Shares % of total No. of % of total
on (01-04-16) shares of the shares shares of the
/ (31-03-17) Company Company
V. G. 63,945,904 31.04 22 Dec 2016 5,228,796 Inter se transfer 69,174,700 33.57
Siddhartha between promoters
69,174,700 33.57 31 Mar 2017 69,174,700 33.57
Malavika 2,923,104 1.42 22 Nov 16 30,000 Purchase 2,953,104 1.44
Hegde
23 Nov 16 10,000 Purchase 2,963,104 1.44
24 Nov 16 5,959 Purchase 2,969,063 1.44
25 Nov 16 41 Purchase 2,969,104 1.44
28 Nov 16 5000 Purchase 2,974,104 1.44
29 Nov 16 5000 Purchase 2,979,104 1.45
1 Dec 16
5000 Purchase 2,984,104 1.45
5 Dec 16
5000 Purchase 2,989,104 1.45
14 Dec 16 5000 Purchase 2,994,104 1.45
15 Dec 16 44,000 Purchase 3,038,104 1.47
Sadananda 2070 0.00 2070 0.00
Poojary
R. Ram 585 0.00 585 0.00
Mohan

V. INDEBTEDNESS:
Indebtedness of the Company including interest outstanding/accrued but not due for payment: Amt in Crores
Secured Loans Unsecured Deposits Total
excluding deposits Loans Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 635.00 - - 635.00
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 42.34 - - 42.34
Total (i+ii+iii) 677.34 - - 677.34
Change in Indebtedness during the financial year
* Addition 480.00 - - 480.00
* *Reduction 189.78 - - 189.78
Net Change 290.22 - - 290.22
Indebtedness at the end of the financial year
i) Principal Amount 925.22 - - 925.22
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 45.51 - - 45.51
Total (i+ii+iii) 970.73 - - 970.73

STATUTORY SECTION | 065

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole time Directors and / or Manager:

Sl. Particulars of Remuneration V. G. Siddhartha Total Amount in Lacs(Rs.)
No.
Gross Salary
1 (a) Salary as per provisions contained in
Section 17(1) of the Income Tax Act, 1961
(b) Value of perquisites under Section
17(2) Income Tax Act, 1961
(c) Profits in lieu of salary under Section
17(3) Income Tax Act, 1961
2 Stock Options
3 Sweat Equity
Nil
4 Commission
- as % of profit
- others, specify….
5 Others, please specify
i. Deferred bonus (pertaining to the
current Financial year payable in 2018)
ii. Retirals
Total (A)

B. Remuneration to other Directors:

1. Independent Directors

Sl. Particulars of Name of Directors Total Amount in

No. Remuneration (Rs.)
Mr. S. V. Ranganath Mr. Albert Hieronimus Mr. M D Mallya
Fee for attending Board / Rs.100,000 per meeting Rs.100,000 per meeting Rs.100,000 per meeting Rs.23,00,000/-
committee Meetings (Rupees Twenty
Three Lacs Only)
Commission Nil Nil Nil Nil
Others, please specify Nil Nil Nil Nil
Total (B)(1) Nil Nil Nil Nil

2. Non-Executive Directors:

Sl. Particulars of Remuneration Name of Directors Total Amount in Lacs(Rs.)

No.
Mrs. Malavika Hegde Mr. Sanjay Nayar
Fee for attending Board/ committee Nil Nil Nil
Meetings
Commission Nil Nil Nil
Others, please specify Nil Nil Nil
Total (B)(2) Nil Nil Nil
Total (B)=(B) (1) + (B)(2) Nil Nil Nil

066 | COFFEE DAY | ANNUAL REPORT 2016-17

C. Remuneration to key managerial personnel other than MD/Manager/WTD:
Sl. Particulars of Remuneration R. Ram Mohan Sadananda Poojary Total Amount in (Rs.)
No. Chief Financial Officer Company Secretary
Gross Salary
1 (a) Salary as per provisions contained in
2,700,801* 949,800* 3,650,601
Section 17(1) of the Income Tax Act, 1961
(b) Value of perquisites under Section
17(2) Income Tax Act, 1961
(c) Profits in lieu of salary under Section
17(3) Income Tax Act, 1961
2 Stock Options
3 Sweat Equity
4 Commission
- as % of profit
- others, specify….
5 Others, please specify
Total
Total (A) 2,700,801* 949,800* 3,650,601
*Represents the allocated portion of salary based on time spent.

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES

Type Section of the Brief Description Details of Penalty Authority [RD / Appeal made, if
Companies Act / Punishment / NCLT / COURT] any (give details)
compounding fees
imposed
A. COMPANY
Penalty NONE
Punishment NONE
Compounding N.A N.A N.A N.A N.A
B. DIRECTORS
Penalty
Punishment NONE
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment NONE
Compounding
For and on Behalf of the Board
By Order of the Board
For Coffee Day Enterprises Limited
(Formerly Coffee Day Enterprises Private Limited & Coffee Day Resorts Private Limited)
Sd/- Sd/-
V G Siddhartha Malavika Hegde
Place: Bangalore Chairman and Managing Director Director
Date: 18.05.2017 DIN- 00063987 DIN - 00136524

STATUTORY SECTION | 067

Annexure-7

COFFEE DAY ENTERPRISES LIMITED

business responsibility
report 2016-17
The Directors present the “Business Responsibility Report” (BRR) of the Company for the financial
year ended on 31st March 2017, Pursuant to Regulation 34(2)(f ) of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forming
part of the annual report.

The reporting framework is based on the ‘National Voluntary Guidelines on Social, Environmental
and Economic Responsibilities of Business (NVGs)’ released by the Ministry of Corporate Affairs,
Government of India, in July 2011 which contains 9 principles and Core Elements for each of
the nine Principles.

SECTION A: GENERAL INFORMATION ABOUT THE COMPANY

Sl. PARTICULARS COMPANY INFORMATION
No.
1. Corporate Identification Number L55101KA2008PLC046866
2. Name of the Company Coffee Day Enterprises Limited (CDEL)
3. Registered Office & Corporate Office 23/2, Coffee Day Square, Vittal Mallya Road,
Bangalore- 560001
4. Website www.coffeeday.com
5. E-Mail ID [email protected]
6. Financial Year reported Year ended on 31st March 2017 (FY2016-17)
7. Sector(s) that the Company is engaged in Trading of Coffee - 47211
(industrial activity code-wise) Dividend Income - 64200
Hospitality Services - 55101
8. List three key products/services that the 1. Trading of Coffee
Company manufactures/provides (as in 2. Dividend Income
balance sheet) 3. Hospitality Services
9. Total number of locations where business CDEL is the parent company of the Coffee Day
activity is undertaken by the Company Group with a diverse portfolio. The Company as
standalone and primarily through its subsidiaries,
associates and joint venture companies (together
referred to as “the Group”, as listed in this annual
report) are engaged in business in multiple sectors
such as Coffee retail and trading of coffee beans/
exports, Leasing of commercial office space,
Financial services, Integrated Multimodal Logistics,
Hospitality and Information Technology (IT) /
Information Technology Enabled Services (ITeS).
10. Markets served by the Company Products and services have national as well as
international presence and several Products are
exported.

068 | COFFEE DAY | ANNUAL REPORT 2016-17

SECTION B: FINANCIAL DETAILS OF THE COMPANY
Sl. PARTICULARS COMPANY INFORMATION
No.
1. Paid up Capital, as on 31.3.2016 206,001,719 Shares of Rs.10 each aggregating to Rs.2,060,017,190
2. Turnover (Consolidated):
Gross Rs.35,519 Mn
Net Rs.31,196 Mn
3. Profit after Tax (Consolidated) Rs.462 Mn
4. Total Spending on Corporate Social Responsibility
a) In Rs. Rs.60,00,500 - (By Way2wealth group companies)
Rs.28,50,000 (By CDGL)
b) As a percentage of Profit after Tax Average profit of 2%
5. List the activities, in which expenditure in 4 above, has been incurred

Our CSR activities were are out through the subsidiaries & its group companies (Way2Wealth & Coffee Day Global Limited).
Contributions were made towards CSR activities to the below mentioned Foundations /Organizations:
Contribution made to: Activities
SVGHE Education trust Through SVGH Vocational Training College (VTC) Foundation at
Chikmagalur, the Foundation’s charter is to promote education to
economically underprivileged rural youth and supporting them to
be independent, responsible and adaptable to urban environment.
Parivaar Education Society Parivaar is West Bengal’s largest free residential institution
supporting children from destitute.
Parikrma Humanity Foundation Parikrma Humanity Foundation offers high quality education, hope
and support to thousands of children from four orphanages and
over 70 slums in Bangalore city.
Society for Nutrition,Education and Health Action (SNEHA) A secular, Mumbai - based non - profit organisation, SNEHA targets
four large public health areas - Maternal and Newborn Health,
Child Health and Nutrition, Sexual and Reproductive Health and
Prevention of Violence against Women and Children.
Organization for Autistic Individuals(OAI),MCGM Welfare OAI is a registered Charitable Trust under Bombay Public Trusts, Act
Centre 1950, established with primary objective of setting up best in class
schooling facilities for Individuals who are on the Autism Spectrum
Disorder.
Foundation for Spastic and Mentally Handicapped Persons UDAAN, Delhi’s foremost research based NPO engaged in Training,
(UDAAN) Rehabilitation and Early Medical Intervention for children with
moderate to severe Autism.
Dignity Foundation Helps senior citizens lead active lives through various productive
ageing and social support services.
Centre for Environmental Research and Education, (CERE) CERE has successfully completed projects pertaining to
sustainability and carbon management in both urban and rural
India.
Urvi Ashok piramal foundation Is a not for profit organisation, undertakes CSR initiatives in the
areas of Education, Health, Livelihood, Village Development and
environment.
Army wives welfare association (AWWA) AWWA aims at the holistic development and well-being of Army
Wives including their children and rehabilitation of war widows
and differently-abled children.

BUSINESS RESPONSIBILITY REPORT 2016-17 | 069

SECTION C: BUSINESS RESPONSIBILITY (BR) INFORMATION
1. Does the Company have any Subsidiary Company/ Companies?

Yes. The List of Subsidiaries is given in MGT-9, Annual return

2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of
such subsidiary company(ies)

Yes, most of the BR initiatives of the Company happens through the subsidiary companies and its group, operating in different
geographies.

3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with; participate in the BR initiatives of
the Company? If yes, then indicate percentage of such entity/entities? [ Less than 30%, 30-60%, More than 60%]

Yes. Most of the BR initiatives happen through the subsidiaries, 60% of the associated entities participate in the BR initiatives of the
Company.

SECTION D: BUSINESS RESPONSIBILITY (BR) INFORMATION

1. DETAILS OF DIRECTOR/DIRECTORS RESPONSIBLE FOR BR:

a. Details of the Director/Directors responsible for implementation of the BR policy/policies

Sl. No. Particulars Company Information
1. DIN 00063987
2. Name Mr. V.G. Siddhartha
3. Designation Chairman & Managing Director
b. Details of BR head(s)
Sl. No. Particulars Company Information
1. DIN Number (if applicable) 03642316
2. Name Sadananda Poojary
3. Designation Company Secretary & Compliance Officer
4. Telephone Number +91 80 40012345
5. E-Mail ID [email protected]

2. PRINCIPLE-WISE (AS PER NATIONAL VOLUNTARY GUIDELINES (NVGS)) BUSINESS RESPONSIBILITY POLICY/POLICIES
P1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.

P2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.

P3: Businesses should promote the wellbeing of all employees.

P4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged,
vulnerable and marginalized.

P5: Businesses should respect and promote human rights.

P6: Businesses should respect, protect, and make efforts to restore the environment.

P7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner.

P8: Businesses should support inclusive growth and equitable development.

P9: Businesses should engage with and provide value to their customers and consumers in a responsible manner.

070 | COFFEE DAY | ANNUAL REPORT 2016-17

a) Details of compliance (Reply in Y/N):
No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy/ policies for.... Y Y Y Y Y Y Y Y Y
2 Has the policy being formulated in consultation with Yes
the relevant stakeholders?
3 Does the policy conform to any national / The policies confirms to the National & International Standards like
international standards? If yes, specify? (50 words) ISO 22000, ISO 9000, ILO conventions ratified by our Country and IFC
Performance Standards.
4 Has the policy being approved by the Board? Policies mandated under the Companies Act, 2013 and SEBI (LODR)
Is yes, has it been signed by MD/ owner/ CEO/ 2015 are approved by the Board and other policies are approved
appropriate Board Director? by the Managing Director or Functional Heads of the Company as
appropriate.
5 Does the Company have a specified committee The Company has CSR Committee, Audit Committee, Risk
of the Board/ Director/ Official to oversee the Management Committee, Internal Complaints Committee and also
implementation of the policy? adequate internal control systems to oversee the implementation of
policies.
6 Indicate the link for the policy to be viewed online? The links to view the policies online are given herein below*.
7 Has the policy been formally communicated to all Yes, wherever appropriate
relevant internal and external stakeholders?
8 Does the Company have in-house structure to Yes
implement the policy/ policies?
9 Does the Company have a grievance redressal Yes, wherever appropriate
mechanism related to the policy/ policies to address
stakeholders’ grievances related to the policy/ policies?
10 Has the Company carried out independent audit/ Yes, wherever appropriate
evaluation of the working of this policy by an internal
or external agency?
*Link to Company’s Policies:

Ÿ Business Responsibility Policy - http://www.coffeeday.com/PDF/BUSINESS%20RESPONSIBILITY%20REPORT%20POLICY.pdf

Ÿ CSR Policy - http://www.coffeeday.com/PDF/CSR-Policy-CDEL.pdf
Ÿ Whistle Blower Policy - http://www.coffeeday.com/PDF/CDEL-Whistle-Blower-Policy.pdf

b) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)
No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The Company has not understood the Principles
2 The Company is not at a stage where it finds itself in a
position to formulate and implement the policies on
specified principles
3 The Company does not have financial or manpower Not Applicable
resources available for the task
4 It is planned to be done within next 6 months
5 It is planned to be done within the next 1 year
6 Any other reason (please specify)

BUSINESS RESPONSIBILITY REPORT 2016-17 | 071

GOVERNANCE RELATED TO BUSINESS RESPONSIBILITY The Company has in place a Prevention of Sexual Harassment
(BR) policy in line with the requirements of the Sexual Harassment of
(a) Indicate the frequency with which the Board of Directors, Women at the Workplace (Prevention, Prohibition and Redressal)
Committee of the Board or CEO to assess the BR performance Act, 2013. An Internal Complaints Committee has been set up
of the Company. to redress complaints received regarding sexual harassment. All
employees (permanent, contractual, temporary, trainees) are
The BR performance of the Company under various principles
covered under this policy.
is assessed periodically at various Board and Committee
meetings. How many stakeholder complaints have been received in the
past financial year and what percentage was satisfactorily
(b) Does the Company publish a BR or a Sustainability Report?
resolved by the management? If so, provide details thereof, in
What is the hyperlink for viewing this report? How frequently
about 50 words or so.
it is published?
During the previous fiscal ending March 2017, 100% of minor
This is the first Business Responsibility Report being published
complaints received from other stakeholders were resolved.
by the Company for FY 2016-17. The same will be disclosed on
Presently no major complaints or issues from employees/other
the website of the Company www.coffeeday.com.
stakeholders are pending.
SECTION E: PRINCIPLE – WISE PERFORMANCE
PRINCIPLE 2: BUSINESSES SHOULD PROVIDE GOODS
PRINCIPLE 1: BUSINESSES SHOULD CONDUCT AND AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO
GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND SUSTAINABILITY THROUGHOUT THEIR LIFE CYCLE
ACCOUNTABILITY Coffee Day believes in providing products which are safe for its
Coffee Day is committed to doing business in an efficient, consumers and achieving growth in a responsible manner.
responsible, honest and ethical manner. Corporate governance
The Company shall raise the consumer’s awareness of their
practice goes beyond compliance and involves a company-wide
rights through education, product labeling, appropriate and
commitment and has become the integral part of business to
helpful marketing communication, full details of contents and
ensure fairness, transparency and integrity of the management.
composition as per the applicable laws and promotion of safe
Does the policy relating to ethics, bribery and corruption cover usage and disposal.
only the Company? Yes/ No. Does it extend to the Group/Joint
Environment, health and safety continues to be key focus area
Ventures/Suppliers/Contractors/NGOs/Others?
and the Company strives to reduce its environmental impact
The core values of the Company’s governance process through various initiatives in the field of Energy Efficiency and
include independence, integrity, accountability, transparency, Conservation.
responsibility and fairness. The business policies are based on
1) List up to 3 of your products or services whose design has
ethical conduct, health, safety and a commitment to building
incorporated social or environmental concerns, risks and/or
long term sustainable relationships with relevant stakeholders.
opportunities.
The Company follows the principles of Ethics, Transparency and
At Coffee Day, we have integrated our Social Responsibility
Accountability. Coffee Day firmly believes that good Corporate
activities into our daily operations. That’s why our commercial
Governance is a pre-requisite for meeting the needs and
success is coupled with initiatives that empower communities
aspirations of its shareholders and other stakeholders.
and protect the environment.
Further, the Company has adopted the Whistle Blower Policy
These initiatives include buying and selling ethically-sourced
to provide a mechanism for employees and Directors of the
coffee, educating underprivileged rural youth and forging
Company to approach the Ethics Committee or Chairman of
avenues to employ a number of differently-abled people with
the Audit Committee and Risk Management Committee of the
us.
Company for reporting genuine concerns. The Whistle Blower
Policy provides a platform for reporting unethical behaviour, 2) For each such product, provide the following details in
fraud and actual or potential violation of the Code. respect of resource use (energy, water, raw material etc.) per
unit of product (optional):

072 | COFFEE DAY | ANNUAL REPORT 2016-17

 The Company endeavours to embed the principles of has made it to diversify its offerings, including exclusive
sustainability, as far as practicable, into the various stages of offerings customized to the needs of various geographic and
product or service life-cycle, including procurement of raw demographic segments of the society. Seasonality in supply
material/service, processing of product or delivery of service, and demand, lower shelf life, market dynamics, demand for
transportation of raw materials and finished goods, and variety in product and packaging, higher expectations on
disposal by consumers. product quality and delivery, all have added extra dimensions
to the challenge, which is effectively handled by its Supply
The Company has been continuously improving on resource
Chain team. We work with vendors extensively to improve
use efficiencies, especially that of common resources such as
capacities and capabilities which results in high standards of
water and energy.
food safety.
The Company’s concerted efforts in optimising resource
5) Does the Company have a mechanism to recycle products
use efficiency and focused energy programs have been
and waste? If, yes what is the percentage of recycling of
established with a view to carry out specific initiatives in the
products and waste (separately as <5%, 5-10%, >10%). Also,
field of Energy Efficiency and Conservation. Various initiatives
provide details thereof, in about 50 words or so.
for conservation of energy and reducing environmental
impact are detailed in Principle 6 of this BRR. We strive to foster a socially responsible corporate culture by
introducing a balanced approach to business by addressing
3) Does the Company have procedures in place for sustainable
social and environmental challenges through required
sourcing (including transportation)?
investments, technological up gradation, necessary resource
Pertaining to sourcing of coffee beans, we are committed to allocation and stakeholder engagements. Coffee Day plays a
offer ethically-purchased and responsibly- grown coffee. Our catalyst role in bringing these changes, step by step.
coffee is certified by the UTZ – a world standard in responsible
Below is a snapshot of few of our activities:
farming, owing to our efforts in conserving biodiversity and
ensuring sustainable livelihoods. The Company endeavours to Waste Management by efficient usage of:
embed sustainability throughout its supply chain system.
• Coffee byproducts, Husk – around 20-25% of the input
4) Has the Company taken any steps to procure goods raw coffee is used as energy/raw material in briquettes
and services from local & small producers, including for manufacturing and other industries, and also used in
communities surrounding their place of work? composting.

The welfare of the coffee farming community is high on • Lamination paper/stickers used in packing materials –
our agenda, our coffees are sourced from thousands of distributed to Government School Children for book
small coffee planters, who made us who we are today and binding.
we’re glad to be a part of their lives. We facilitate UTZ and
PRINCIPLE 3: BUSINESSES SHOULD PROMOTE THE
Rainforest certification for our major coffee supplier’s estates.
WELLBEING OF ALL EMPLOYEES
The UTZ Code of Conduct is a recognized global ‘decency’
standard for coffee and production criteria for socially and Coffee Day acknowledges that the employees are its greatest
environmentally appropriate growing practices and efficient assets and is consistently taking various initiatives, adopting
farm management techniques. The Rainforest Alliance various policies, conducting training programmes etc., to enable
works to conserve biodiversity and improve livelihoods by the employees to feel good, live healthy and work safely.
promoting and evaluating the implementation of the most For the Company, learning and development is a business critical
globally respected sustainability standards in a variety of priority for enhancing capability, strengthening the leadership
fields which are designed to generate ecological, social and pipeline and fostering employee engagement.
economic benefits.
Coffee Day provides a work environment that is free from any
While Coffee Day’s core competence lies in the Coffee discrimination or harassment, promotes health and safety and
growing/brewing/serving, increased demand for serving a prohibits using, selling or distributing controlled substances.
variety of food items and beverages under the same brand

BUSINESS RESPONSIBILITY REPORT 2016-17 | 073

The Company believes all employees are important stakeholders 3. Are there any special initiatives taken by the Company
in the enterprise and that building a culture of mutual trust, to engage with the disadvantaged, vulnerable and
respect, interdependence and meaningful engagement is marginalized stakeholders?
imperative. As such, it respects the dignity of the individual and
Coffee Day thinks beyond business and undertakes various
the freedom of employees to lawfully organise themselves into
initiatives to improve the lives of the lower socioeconomic
interest groups, independent of supervision by the management.
sections of the society.
1. Total number of employees : 18,712
Our social transformation initiatives are led by SVGH Vocational
2. Total number of employees hired on temporary/contractual/ Training College (VTC) Foundation at Chikmagalur. Over the
casual basis : 5,918 years, our approach has been to engage in social issues with
sensitivity, rigor and responsibility. VTC Foundation lays the
3. Number of permanent employees with disabilities : 85
platform for Coffee Days value system. The Foundation’s charter
4. Do you have an employee association that is recognized by is to promote education to economically underprivileged rural
management : No youth and supporting them to be independent, responsible
5. Number of complaints relating to child labour, forced labour, and adaptable to urban environment. The college has trained
involuntary labour, sexual harassment in the last financial year over 2500 students many of whom have found employment at
and pending, as on the end of the financial year: Nil your Company outlets across the country. The entire expenses
of the course which includes imparting education, providing
6. What percentage of your under mentioned employees were
food and accommodation, uniforms and transport facilities is
given safety & skill up-gradation training in the last year? :
borne by the promoters.
100%
In our endeavor to embrace corporate social responsibility
PRINCIPLE 4: BUSINESSES SHOULD RESPECT THE through the Company’s actions on today’s youth, CCD has
INTERESTS OF, AND BE RESPONSIVE TOWARDS created avenues for youth that empower them to realize
ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE their potential, and to move from opportunity anticipated to
DISADVANTAGED, VULNERABLE AND MARGINALIZED. opportunity realized.
Coffee Day aims to meet the expectations of its stakeholders
In states like Jammu and Kashmir and Orissa, majority of them,
that include shareholders, consumers, farmers, suppliers, media
particularly in villages or rural areas, do not have access to
and the government. Coffee Day understands the needs of
vocational education or employment opportunities. We have
its stakeholders and develops action plans to fulfil them while
been able to empower the youth with tools that lead to self
achieving its business goals.
improvement, increases employability and also provide Job
Coffee Day has in place investor redressal system, consumer call opportunities within the organization.
centres and various other committees to protect the interest of
We work through a unique partnership model wherein we have
all the stakeholders. It discloses all the relevant information about
established strategic partnerships with the various training
its products, business, financial performance, press releases and
bodies, non-governmental organizations, and government
other statutory information on the website of the Company to
and leverage our relationship to provide skill training and
ensure effective stakeholders engagement.
employability to the under privileged. Dr Reddy’s Foundation
1. Has the Company mapped its internal and external (PAN India), Gram Tarang Foundation (Orissa) and Sarthak
stakeholders? (North India) are our partners who have been instrumental in
helping us make a valuable contribution towards the cause.
Coffee Day has mapped its internal and external stakeholders.
Active association with Ministry of Rural Development (MoRD)
2. Out of the above, has the Company identified the
as a champion employer in providing globally relevant
disadvantaged, vulnerable & marginalized stakeholders?
employability to rural youth.
The Company is committed towards proactively engaging
with all the employees, business associates, customers and
communities who may be disadvantaged, vulnerable or
marginalized.

074 | COFFEE DAY | ANNUAL REPORT 2016-17

PRINCIPLE 5: BUSINESSES SHOULD RESPECT AND remotely monitor and manage energy usage and take timely
PROMOTE HUMAN RIGHTS actions to stop inefficiencies. These initiatives have reduced
The Company has integrated respect for human rights in its the energy consumption by 8-9% compared to the previous
management systems, in particular through assessing and fiscal.
managing human rights impacts of operations, and ensuring all Ÿ Installing advanced energy saving gadgets like capacitor
individuals impacted by the business have access to grievance banks and indigenized components like thermo controllers
mechanisms. for the ovens.
Coffee Day firmly believes in upholding and promoting human Ÿ In order to continually reduce the Company’s environmental
rights. Human Rights are protected under Whistle Blower Policy, footprint, green attributes are integrated in all new outlets
Anti - Sexual Harassment Policy, and Employee Welfare Policies. and are also being incorporated into existing outlets, during
Grievance Redressal Systems are put in place like Internal retrofits, by using LED lighting and usage of Bureau of Energy
Complaints Committee, which resolves the issues reported in an Efficiency’s (BEE) star rating equipments
expeditious manner. Ÿ Introducing eco-friendly paper bags in all the outlets of the
1. Does the policy of the Company on human rights cover Company
only the Company or extend to the Group/Joint Ventures/ Ÿ Installation of higher efficiency gas fired burners in the coffee
Suppliers/ Contractors/ NGOs/Others? roasting unit.
Code of Business Conduct extends not only to employees of 1. Does the policy related to Principle 6 cover only the
Coffee Day and others who work with, or represent Coffee Company or extends to the Group/Joint Ventures/
Day directly or indirectly. Coffee Day’s Anti-Sexual Harassment Suppliers/ Contractors/NGOs/others.
Policy is applicable to all the employees including contractual
The Company has a CSR Policy framework that covers areas of
and also covers trainees, consultants and contractors.
compliance with statutory requirements; the Policy extends to
2. How many stakeholder complaints have been received in the all its subsidiary companies.
past financial year and what percent was satisfactorily resolved
2. Does the Company have strategies/ initiatives to address
by the management?
global environmental issues such as climate change, global
During the financial year 2016-17, the Company did not receive warming, etc? Y/N. If yes, please give hyperlink for webpage
any complaint with regard to violation of human rights. etc.

PRINCIPLE 6: BUSINESS SHOULD RESPECT, PROTECT, AND Climate change, global warming and environmental
MAKE EFFORTS TO RESTORE THE ENVIRONMENT degradation pose unique challenges as well as opportunities
Coffee Day understands its responsibility towards environment for Coffee Day. The Company is continually investing in new
and has taken various initiatives to reduce its environmental technologies, implementing process improvements and
impact. Energy conservation continues to be a priority area of the innovation to address the global environmental challenges.
Company. 3. Does the Company identify and assess potential
Focused energy programs have been established with a view to environmental risks? Y/N
carry out specific initiatives in the field of Energy Efficiency and Sustainable development is at the core of the Company’s
Conservation. operations which is also outlined in the CSR Policy framework.
During the financial year 2016-17, the Company has taken The Company follows sound environmental management
various initiatives for conservation of energy and reducing its practices across all its business units to assess and address
environmental impact, few of them are listed below: potential environmental risks.

Ÿ Energy Management by conducting energy audits and 4. Does the Company have any project related to Clean
introducing innovative ways of saving power – This includes Development Mechanism? If so, provide details thereof, in
introducing of high end online energy monitoring system in about 50 words or so. Also, if yes, whether any environmental
majority of outlets, With Internet of Things (IoT) it is possible to compliance report is filed?

BUSINESS RESPONSIBILITY REPORT 2016-17 | 075

 While the Company has so far not registered any project PRINCIPLE 8: BUSINESSES SHOULD SUPPORT INCLUSIVE
related to Clean Development Mechanism, it is continuously GROWTH AND EQUITABLE DEVELOPMENT
endeavouring to identify opportunities to contribute in this Coffee Day supports the principle of inclusive growth
regard. and equitable development through its Corporate Social
5. Has the Company undertaken any other initiatives on clean Responsibility initiatives and also through its core business.
technology, energy efficiency, renewable energy, etc. Y/N. If The Company shall make efforts to complement and support the
yes, please give hyperlink for web page etc. development priorities at local and national levels, and assure
No. appropriate resettlement and rehabilitation of communities who
have been displaced owing to their business operations.
6. Are the Emissions/Waste generated by the Company within
the permissible limits given by CPCB/SPCB for the financial 1. Does the Company have specified programmes/initiatives/
year being reported? projects in pursuit of the policy related to Principle 8? If yes
details thereof.
All applicable statutory requirements are complied within
acceptable levels. The Company undertakes CSR activities in accordance
with Schedule VII of the Companies Act, 2013 as per the
7. Number of show cause/legal notices received from CPCB/
recommendation of the CSR committee and as per the CSR
SPCB which are pending (i.e. not resolved to satisfaction) as
policy of the Company.
on end of Financial Year.
2. Are the programmes/projects undertaken through in-
The Company did not receive any show cause/ legal notices
house team/own foundation/external NGO/government
from CPCB/SPCB which are pending as on end of financial year
structures/any other organization?
2016-17.
The programmes/projects are undertaken through in-house
PRINCIPLE 7: BUSINESSES, WHEN ENGAGED IN team / own foundation/NGO/Government Structures/any
INFLUENCING PUBLIC AND REGULATORY POLICY, SHOULD other organization as appropriate.
DO SO IN A RESPONSIBLE MANNER
3. Have you done any impact assessment of your initiative?
The Company recognizes that it operates within the specified
legislative and policy frameworks prescribed by the Government, The Company assesses the impact of its CSR Projects and
which guide its growth and also provide for certain desirable Programs at Board and CSR Committee meetings. An update
restrictions and boundaries. on the CSR project and programs is placed at the Board and
CSR Committee meetings for their review and assessment.
The Company shall perform the function of policy advocacy in a
transparent and responsible manner while engaging with all the 4. What is your company’s direct contribution to community
authorities and shall take into account the Companies as well as development projects- Amount in Rs.and the details of the
the larger national/industry interest. projects undertaken?

1. Is your Company a member of any trade and chamber or Our CSR activities were are out through the subsidiaries & its
association? group companies, (Way2Wealth & Coffee Day Global Limited).
Contributions made towards community development
Yes one subsidiary company (Coffee Day Global Limited)
projects are detained in “Section B” of this report.
is member of the Federation of Karnataka Chambers of
Commerce and Industry (FKCCI) 5. Have you taken steps to ensure that this community
development initiative is successfully adopted by the
2. Have you advocated/lobbied through above associations
community? Please explain in 50 words, or so.
for the advancement or improvement of public good?
Yes/No; if yes specify the broad areas (Governance and At Coffee Day, the CSR projects and programs are undertaken
Administration, Economic Reforms, Inclusive Development after identifying the communities that require development.
Policies, Energy Security, Water, Food Security, Sustainable The Company also interacts with the stakeholders to ensure
Business Principles, Others) that its projects are being implemented effectively.

No

076 | COFFEE DAY | ANNUAL REPORT 2016-17

PRINCIPLE 9: BUSINESSES SHOULD ENGAGE WITH AND 1. What percentage of customer complaints/consumer cases
PROVIDE VALUE TO THEIR CUSTOMERS AND CONSUMERS are pending as on the end of financial year.
IN A RESPONSIBLE MANNER
During the previous fiscal ending 31st March 2017, 100% of
The Company shall take into account the overall well-being of the minor complaints received from the customers were resolved.
customers and that of society. Presently no major complaints are pending.
Coffee Day’s consistent commitment to provide world-class 2. Does the Company display product information on the
products/services to consumers has made it as one of the most product label, over and above what is mandated as per local
trusted, valuable and popular brands among Indian consumers. laws? Yes/No/N.A. /Remarks (additional information)
The Company shall ensure that wherever applicable all the Coffee Day is displaying additional product related information,
information that is statutorily required to be disclosed in relation ‘Keep your city clean’ symbol on take away cups over and
to its products are disclosed truthfully and factually to the above what is mandated as per the laws.
consumers through labeling so that the consumers can exercise
3. Is there any case filed by any stakeholder against the
their freedom to consume in a responsible manner and exercise
Company regarding unfair trade practices, irresponsible
due care in utilization of natural resources.
advertising and/or anti-competitive behaviour during the
The Company also ensures that the promotion and advertisement last five years and pending as on end of financial year. If so,
of its products/services do not mislead or confuse the customers provide details thereof, in about 50 words or so.
and other stakeholders. Adequate grievance handling
No.
mechanisms are in place to address customer concerns and
feedback. 4. Did your company carry out any consumer survey/
consumer satisfaction trends?
How many stakeholder complaints have been received in the past
financial year and what percentage was satisfactorily resolved by Yes, as part of the consumer complaint handling process, the
the management? If so, provide details thereof, in about 50 words Company carries out consumer satisfaction studies. Results are
or so. shared with the stakeholders for necessary action to improve
the process.

BUSINESS RESPONSIBILITY REPORT 2016-17 | 077

Annexure-8

DISCLOSURE OF REMUNERATION UNDER SECTION 197[12] OF THE COMPANIES

ACT, 2013 READ WITH RULES 5[1] OF THE COMPANIES [APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERSONNEL] RULES, 2014

The ratio of remuneration of each director to the median employee’s remuneration and other
details in terms of sub-section 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.

Rs.in Million
Sl. No. Requirements Disclosure
1. The ratio of the remuneration of each director to Designation Ratio
the median remuneration of the employees for the
financial year 2016-17
Mr. V.G. Siddhartha Chairman & Managing Director NA
Mrs. Malavika Hegde Non-Executive Director NA
Mr. Sanjay Nayar Non-Executive Director NA
2. The remuneration paid to independent directors were Designation Rs.in Lacs
as below:
Mr. S.V. Ranganath Independent Director Independent directors were
Dr. Albert Hieronimus Independent Director in receipt of sitting Fee for
attending the Board and
Mr. M.D. Mallya Independent Director
Committee meetings and are
not paid any remuneration.
Current sitting fee for
attending Board Meeting is
Rs.1,00,000 per meeting
The percentage increase in remuneration of each CFO 2.7
director, CFO, CEO, CS in the financial year. CS 0.95
Represents the allocated portion of salary based on time spent.
Ratio of Remuneration to MRE including & excluding WTD of CS
and CFO are 7.37 & 20.95 of the allocated remuneration.
3. The percentage increase in the median remuneration 9.56%
of employees in the financial year
4. The number of permanent employees on the rolls of 182
the Company

078 | COFFEE DAY | ANNUAL REPORT 2016-17

 5. The explanation on the relationship between Factors considered while recommending the increase in the
average increase in remuneration and company’s fixed compensation
performance
[a] financial performance of the Company
[b] Comparison with peers
[c] Industry benchmarking and consideration towards cost of
living adjustment / inflation
[d] Regulatory guidelines as applicable
Accordingly the Company follows a performance review
mechanism to ensure that the increase is commensurate with
the effort and it is aligned with the Company’s performance.
6. Comparison of the remuneration of the Key For FY 2017, CS and CFO were drawn salary of 0.9 and 2.7 million
Managerial Personnel against the Performance of the respectively which is 0.37% of the Revenue of the Company.
Company
7. Variations in the market capitalisation of the The market capitalisation of the Company has comparatively
Company, price earnings ratio as at the closing date increased from Rs.4791.60 crores as on 31st March 2017 from
of the current FY and previous FY and percentage Rs.4614.43 crores as on 31st March 2016. The closing price of
increase or decrease in the market quotations of the Coffee Day Enterprises Limited as on 31st March 2017 was
shares of the Company in comparison to the rate at Rs.232.60 which has increased 3.84% over the price in 2016
which the Company came out with the last public which is Rs.224 per share and the price fell over 41% from the
offer Intial Public Offer in November 2015.
8. Average percentile increase already made in the The average % increase was 9.56% for all employees who went
salaries of employees other than the managerial through the compensation review cycle in the year other than
personnel in the last financial year and its comparison managerial personnel.
with the percentile increase in the managerial
remuneration and justification thereof and point out
if there are any exceptional circumstances for increase
in the managerial remuneration
9. Comparison of each remuneration of the Key The comparison of remuneration of each of the Key Managerial
Managerial Personnel against the performance of the Personnel against the performance of the Company is as under
Company CFO-0.275% & CS-0.0915% of the revenue of the Company.
10. The key parameters of any variable component of Not applicable since no remuneration was drawn by the
remuneration availed by the directors Executive Director.
11. Affirmation that the remuneration is as per the Yes, it is affirmed.
remuneration policy of the Company

For and on Behalf of the Board

By Order of the Board
For Coffee Day Enterprises Limited
Sd/ Sd/-
V G Siddhartha Malavika Hegde
Place: Bangalore Chairman and Managing Director Director
Date: 18th May 2017 DIN- 00063987 DIN - 00136524

BUSINESS RESPONSIBILITY REPORT 2016-17 | 079

Information as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and
forming part of the Directors’ Report for the Financial Year ended 31st March 2017

A. Top 10 Employees (in terms of remuneration)

Employee Designation in the Qualification Previous Employer Total Designation Amount

Name Company Experience at Previous (In Rs.)
( In Yrs) Employer
Balachandar Group Head-Human M.S.(Industrial Strides Acrolabs Ltd 28 Chief Human 12,007,165
Natarajan Resource Management) Resource officer
R. Ram Chief Financial Officer B.Com, ACA Caterpillar 30 Director-Finance 2,700,8011
Mohan
Ganesh Pai General Manager – B.Com, ACA Nvidia Graphics Private 11 Manager – 3,930,736
Corporate Finance Limited Finance
Sadananda Company Secretary B.Com, FCS, KSFC 28 Deputy 949,8001
Poojary ICWAI Manager
Philip T Senior General B.Com, ACA Amalgamated Bean Coffee 20 Senior General 3,600,000
Athyal Manager Trading Co Ltd Manager
Monica General Manager-HR MBA Heidrick & Struggles-KMC 16 Director-HR 1,846,4952
Khanna
Ketan Senior General B.Com, PGDM Kotak Mahindra Capital 13 Senior Vice 1,843,9053
Sanghvi Manager (Finance) Company Limited President
Brain D’cruz Resort Manager Hotel Sujan Luxury 17 Resort manager 1,185,344
Management/
AHMA
Sanjiv Group Advisor – F&B Hotel IHC(India Hospitality 39 Vice President 1,179,221
Mediratta Solutions Management Corporation)
Graduate
Devahuthi V GM-Marketing (PR & PGD in Mass Coffee Day Global Ltd 14 PR Executive 991,5364
Gangwani Communication) Communication
1 Represents the allocated portion of salary based on time spent.

2 Joined wef 01st August, 2016

3 Joined wef 05th December, 2016

4 Joined wef 01st August, 2016

Employees drawing a Remuneration of Rs.1.02 Crores or above per annum and posted in India

Employee Name Designation in the Qualification Age Previous Total Date of Designation Amount
Company Employer Experience Joining at Previous (In Rs.)
( In Yrs) Employer
Balachandar Group Head-Human M.S.(Industrial 53 Strides 28 Jan 21, Chief 12,007,165
Natarajan Resource Management) Acrolabs 2012 Human
Ltd Resource
officer

080 | COFFEE DAY | ANNUAL REPORT 2016-17

Independent Auditor’s report
To
The Members of
Coffee Day Enterprises Limited

Report on the Standalone Ind AS Financial Statements An audit involves performing procedures to obtain audit
We have audited the accompanying financial statements of evidence about the amounts and disclosures in the Standalone
Coffee Day Enterprises Limited (‘the Company’), which comprise Ind AS financial statements. The procedures selected depend
the balance sheet as at 31st March 2017, the statement of profit on the auditor’s judgment, including the assessment of the risks
and loss (including other comprehensive income), the statement of material misstatement of the Standalone Ind AS financial
of cash flows and the statement of changes in equity for the year statements, whether due to fraud or error. In making those risk
then ended, and a summary of significant accounting policies assessments, the auditor considers internal financial control
and other explanatory information (herein after referred to as relevant to the Company’s preparation of the Standalone
“Standalone Ind AS financial statements”). Ind AS financial statements that give a true and fair view in
order to design audit procedures that are appropriate in the
Management’s Responsibility for the Standalone Ind AS
circumstances, but not for the purpose of expressing an opinion
financial statements
on whether the Company has in place an adequate internal
The Company’s Board of Directors is responsible for the
financial controls system over financial reporting and the
preparation of these Standalone Ind AS financial statements
operating effectiveness of such controls. An audit also includes
that give a true and fair view of the financial position, financial
evaluating the appropriateness of accounting policies used and
performance including other comprehensive income, cash flows
the reasonableness of the accounting estimates made by the
and changes in equity of the Company in accordance with the
Company’s Directors, as well as evaluating the overall presentation
accounting principles generally accepted in India as specified
of the Standalone Ind AS financial statements.
under section 133 of the Companies Act, 2013 (‘the Act’) read
with relevant rules issued thereunder. We believe that the audit evidence we have obtained is sufficient
This responsibility also includes maintenance of adequate and appropriate to provide a basis for our audit opinion on the
accounting records in accordance with the provisions of the Act financial statements.
for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and Opinion
application of appropriate accounting policies; making In our opinion and to the best of our information and according
judgments and estimates that are reasonable and prudent; and to the explanations given to us, the aforesaid Standalone Ind
design, implementation and maintenance of adequate internal AS financial statements give a true and fair view in conformity
financial control, that were operating effectively for ensuring the with the accounting principles generally accepted in India of
accuracy and completeness of the accounting records, relevant the financial position of the Company as at 31st March 2017, its
to the preparation and presentation of the Standalone Ind AS financial performance including other comprehensive income for
financial statements that give a true and fair view and are free the year then ended, and its cash flows and the changes in equity
from material misstatement, whether due to fraud or error. for the year then ended.

Auditor’s Responsibility Report on Other Legal and Regulatory Requirements

Our responsibility is to express an opinion on these financial 1. As required by the Companies (Auditor’s Report) Order, 2016
statements based on our audit. (‘the Order’), issued by the Central Government of India in
We have taken into account the provisions of the Act, the terms of sub-section (11) of section 143 of the Act, we give
accounting and auditing standards and matters which are in Annexure A, a statement on the matters specified in
required to be included in the audit report under the provisions paragraph 3 and 4 of the Order, to the extent applicable.
of the Act and the Rules made thereunder.
2. As required by Section 143 (3) of the Act, we report that:
We conducted our audit of the Standalone Ind AS financial
(a) we have sought and obtained all the information and
statements in accordance with the Standards on Auditing
explanations which to the best of our knowledge and
specified under section 143(10) of the Act. Those Standards
belief were necessary for the purposes of our audit;
require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether (b) in our opinion proper books of account as required by
the Standalone Ind AS financial statements are free from material law have been kept by the Company so far as it appears
misstatement. from our examination of those books;

FINANCIAL SECTION | 081

 (c) the balance sheet, the statement of profit and loss a. The Company does not have any pending litigations
(including other comprehensive income), statement of which would impact its financial position;
changes in equity and the statement of cash flows dealt
b. The Company did not have any long-term contracts
with by this report are in agreement with the books of
including derivative contracts for which there were
account;
any material foreseeable losses;
(d) in our opinion, the aforesaid Standalone Ind AS Financial
c. There were no amounts which were required
Statements comply with the Accounting Standards
to be transferred to the Investor Education and
specified under Section 133 of the Act, read with Rule 7
Protection Fund by the Company.
of the Companies (Accounts) Rules, 2014;
d. The Company has provided requisite disclosures
(e) on the basis of the written representations received
in its Standalone Ind AS financial statements as
from the directors of the Company as on 31st March
to holdings as well as dealings in Specified Bank
2017 taken on record by the Board of Directors, none of
Notes during the period from 8 November, 2016
the directors is disqualified as on 31st March 2017 from
to 30 December, 2016 and these are in accordance
being appointed as a director in terms of Section 164 (2)
with the books of accounts maintained by the
of the Act;
Company. Refer Note 39 to the Standalone Ind AS
(f ) with respect to the adequacy of the internal financial financial statements.
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our for B S R & Co. LLP
separate report in ‘Annexure B’; and Chartered Accountants
Firm’s registration number: 101248W/W-100022
(g) 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, in Supreet Sachdev
our opinion and to the best of our information and Bangalore Partner
according to the explanations given to us: 18 May 2017 Membership number: 205385

082 | COFFEE DAY | ANNUAL REPORT 2016-17

Annexure A to the Independent Auditor’s Report

As referred to in our Independent Auditor’s Report to the (c) There are no overdue amounts in respect of the loan
members of the Company on the Standalone Ind AS financial granted to companies listed in the register maintained
statements for the year ended 31st March 2017, we report that: under section 189 of the Act.
(i) (a) The Company has maintained proper records showing (iv) In our opinion and according to the information and explanation
full particulars, including quantitative details and given to us, the Company has complied with the provisions
situation of fixed assets. of Section 185 and 186 of the Act with respect to loans and
(b) The Company has a regular programme of physical investments made and security and guarantee given.
verification of its fixed assets by which fixed assets are (v) The Company has not accepted any deposits from the
verified every year. In our opinion, the periodicity of public.
physical verification is reasonable having regard to
the size of the Company and the nature of its assets. In (vi) According to the information and explanation given to us,
accordance with the programme, physical verification the Central Government of India has not prescribed the
of fixed assets was carried out during the year and no maintenance of cost records under Section 148(1) of the
material discrepancies were noted. Act, for any of the services rendered and goods sold by the
Company.
(c) According to the information and explanations given to
us and on the basis of our examination of the records, (vii) (a) According to the information and explanations given to
we have verified the lease agreement which is in the us and on the basis of our examination of the records
name of the Company for the land taken on lease of the Company, amounts deducted/ accrued in the
(for construction of building) duly registered with the books of account in respect of undisputed statutory
appropriate authority. dues including Provident Fund, Service tax, Sales-tax,
Value added tax and other material statutory dues have
(ii) According to the information and explanations given to
generally been regularly deposited during the year by
us and on the basis of our examination of the records, the
the Company with the appropriate authorities except
inventories of coffee beans have been physically verified
for undisputed Income tax dues which have not been
by the Management during the year. In our opinion, the
regularly deposited with the appropriate authorities
frequency of verification is reasonable. The discrepancies
and there have been delays in a number of cases. As
identified on physical verification of inventories between
explained to us, the Company did not have any dues
physical stocks and book records were not material. However,
on account of Employees’ State Insurance, Duty of
there is no physical inventory as at the year end.
Customs, Duty of Excise and Cess during the year.
(iii) According to the information and explanations given to
According to the information and explanations given
us and on the basis of our examination of the records, the
to us, no undisputed amounts payable in respect of
Company has granted unsecured loans to the two wholly
Provident Fund, Sales-tax, Value added tax, Income tax,
owned subsidiary Companies covered in the register
Service tax and other material statutory dues were in
maintained under Section 189 of the Act and;
arrears, as at 31st March 2017, for a period of more than
(a) In our opinion, the rate of interest and other terms six months from the date they became payable.
and conditions on which loans had been granted to
the companies listed in the register maintained under (b) According to the information and explanations given to
Section 189 of the Act were not, prima facie, prejudicial us, there are no dues of Provident Fund, Sales-tax, Value
to the interest of the Company. added tax, Income tax, Service tax and other material
statutory dues which have not been deposited with the
(b) In case of loans granted to the subsidiaries listed in the appropriate authorities on account of any dispute.
register maintained under Section 189 of the Act, the
loans and interest are repayable on demand. As per the (viii) In our opinion and according to the information and
information and explanation given to us, the borrowers explanations given to us, the Company has not defaulted in
have been regular in the repayment of the principal repayment of dues to its bankers, financial institutions and
amount. However, no demand for interest is made by debenture holders. The Company does not have any dues to
the Company during the year. the government.

FINANCIAL SECTION | 083

(ix) According to the information and explanations given to been disclosed in the financial statements as required by the
us and on the basis of our examination of the records, the applicable accounting standards.
Company did not raise any money by way of initial public
(xiv) According to the information and explanations given to
offer or further public offer (including debt instruments)
us, the Company has not made any preferential allotment
during the year. In our opinion and according to the
or private placement of shares or convertible debentures
information and explanations given to us, the term loans
during the year. Accordingly, paragraph 3(xiv) of the Order is
taken by the Company were applied for the purposes for
not applicable.
which they were raised.
(xv) According to the information and explanations given to us,
(x) According to the information and explanations given to us,
the Company has not entered into any non-cash transaction
no material fraud by the Company or on the Company by its
with directors or person connected with him as referred to in
officers or employees has been noticed or reported during
Section 192 of Companies Act 2013. Accordingly, paragraph
the year.
3(xv) of the Order is not applicable.
(xi) According to the information and explanation given to us
(xvi) In our opinion and according to the information and
and on the basis of our examination of the records of the
explanations given to us, the Company is not required to be
Company, the Company has not paid any Managerial
registered under Section 45-IA of the Reserve Bank of India
Remuneration during the year. Accordingly, para 3(xi) of this
Act, 1934.
Order is not applicable.
(xii) In our opinion and according to the information and
explanations given to us, the Company is not a Nidhi
Company. Accordingly, paragraph 3(xii) of the Order is not for B S R & Co. LLP
applicable. Chartered Accountants
Firm’s registration number: 101248W/W-100022
(xiii) In our opinion and according to the information and
explanations given to us, and based on an examination of
the records of the Company, all transactions with the related Supreet Sachdev
parties are in compliance with sections 177 and 188 of Bangalore Partner
Companies Act, 2013 where applicable and the details have 18 May 2017 Membership number: 205385

084 | COFFEE DAY | ANNUAL REPORT 2016-17

Annexure - B to the Auditor’s Report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

We have audited the internal financial controls over financial Meaning of Internal Financial Controls over Financial Reporting
reporting of Coffee Day Enterptises Limited (‘the Company’) as of A company's internal financial control over financial reporting is a
31st March 2017 in conjunction with our audit of the standalone process designed to provide reasonable assurance regarding the
Ind AS financial statements of the Company for the year ended reliability of financial reporting and the preparation of financial
on that date. statements for external purposes in accordance with generally
accepted accounting principles. A company's internal financial
Management’s Responsibility for Internal Financial Controls
control over financial reporting includes those policies and
The Company’s management is responsible for establishing and
procedures that (1) pertain to the maintenance of records that,
maintaining internal financial controls based on the internal
in reasonable detail, accurately and fairly reflect the transactions
control over financial reporting criteria established by the
and dispositions of the assets of the Company; (2) provide
Company considering the essential components of internal
reasonable assurance that transactions are recorded as necessary
control stated in the Guidance Note on Audit of Internal Financial
to permit preparation of financial statements in accordance
Controls over Financial Reporting issued by the Institute of
with generally accepted accounting principles, and that receipts
Chartered Accountants of India (‘ICAI’). These responsibilities
and expenditures of the Company are being made only in
include the design, implementation and maintenance of
accordance with authorisations of management and directors of
adequate internal financial controls that were operating effectively
the Company; and (3) provide reasonable assurance regarding
for ensuring the orderly and efficient conduct of its business,
prevention or timely detection of unauthorised acquisition, use,
including adherence to company’s policies, the safeguarding of
or disposition of the Company's assets that could have a material
its assets, the prevention and detection of frauds and errors, the
effect on the financial statements.
accuracy and completeness of the accounting records, and the
timely preparation of reliable financial information, as required Inherent Limitations of Internal Financial Controls Over
under the Companies Act, 2013. Financial Reporting
Because of the inherent limitations of internal financial controls
Auditor’s Responsibility
over financial reporting, including the possibility of collusion
Our responsibility is to express an opinion on the Company's
or improper management override of controls, material
internal financial controls over financial reporting based on our
misstatements due to error or fraud may occur and not be
audit. We conducted our audit in accordance with the Guidance
detected. Also, projections of any evaluation of the internal
Note on Audit of Internal Financial Controls over Financial
financial controls over financial reporting to future periods are
Reporting (‘the Guidance Note’) and the Standards on Auditing,
subject to the risk that the internal financial control over financial
issued by ICAI and deemed to be prescribed under section
reporting may become inadequate because of changes in
143(10) of the Companies Act, 2013, to the extent applicable to
conditions, or that the degree of compliance with the policies or
an audit of internal financial controls, both applicable to an audit
procedures may deteriorate.
of Internal Financial Controls and, both issued by the Institute
of Chartered Accountants of India. Those Standards and the Opinion
Guidance Note require that we comply with ethical requirements In our opinion, the Company has, in all material respects, an
and plan and perform the audit to obtain reasonable assurance adequate internal financial controls system over financial
about whether adequate internal financial controls over financial reporting and such internal financial controls over financial
reporting was established and maintained and if such controls reporting were operating effectively as at 31st March 2017, based
operated effectively in all material respects. on the internal control over financial reporting criteria established
by the Company considering the essential components of
Our audit involves performing procedures to obtain audit
internal control stated in the Guidance Note on Audit of Internal
evidence about the adequacy of the internal financial controls
Financial Controls Over Financial Reporting issued by the Institute
system over financial reporting and their operating effectiveness.
of Chartered Accountants of India.
Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial
controls over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed
risk. The procedures selected depend on the auditor’s judgment, for B S R & Co. LLP
including the assessment of the risks of material misstatement of Chartered Accountants
the financial statements, whether due to fraud or error. Firm’s registration number: 101248W/W-100022

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion on the Supreet Sachdev
Company’s internal financial controls system over financial Bangalore Partner
reporting. 18 May 2017 Membership number: 205385

FINANCIAL SECTION | 085

Balance sheet
as at 31st March 2017
(Rs. in million)
Note As at As at As at
31st March 2017 31st March 2016 1st April 2015
ASSETS
Non-current assets
Property, plant and equipment 4 54.28 57.11 59.80
Intangible assets 5 0.07 0.09 -
Financial assets
(I) Investments 6 20,010.11 20,004.76 15,877.45
(II) Loans 7-A 6.81 36.81 5.81
(III) Other financial assets 9-A - 41.06 186.02
Other tax assets 8 28.34 28.22 35.59
Other assets 10-A 2.24 1.19 -
Total non-current assets 20,101.85 20,169.24 16,164.67
Current assets
Financial assets
(I) Trade receivables 11 286.79 4.53 2.94
(II) Cash and cash equivalents 12 7.71 480.24 6.60
(III) Bank balances other than cash and cash equivalents 13 203.30 88.95 -
(IV) Loans 7-B 7,143.94 5,188.96 4,464.31
(V) Other financial assets 9-B 0.08 0.59 0.48
Other assets 10-B 4.18 3.45 210.96
Total current assets 7,646.00 5,766.72 4,685.29
TOTAL ASSETS 27,747.85 25,935.96 20,849.96
EQUITY AND LIABILITIES
Equity
Equity share capital 14 2,060.02 2,060.02 145.92
Other equity 15 16,027.46 16,823.22 790.15
Total equity 18,087.48 18,883.24 936.07
Non-current liabilities
Financial liabilities
(I) Borrowings 16-A 7,204.22 5,321.86 12,579.92
(II) Other financial liabilities (other than those specified above) 19-A 5.47 - -
Provision 17-A 5.36 4.59 3.98
Total non-current liabilities 7,215.05 5,326.45 12,583.90
Current liabilities
Financial liabilities
(I) Borrowings 16-B - - 300.00
(II) Trade payables 18
Total outstanding dues to micro enterprises and small enterprises - - -
Total outstanding dues other than to micro enterprises and small 18.41 34.26 7.33
enterprises
(III) Other financial liabilities (other than those specified above) 19-B 2,416.50 1,678.20 7,003.89
Provision 17-B - 0.24 0.27
Other current liabilities 20 10.41 13.57 18.50
Total current liabilities 2,445.32 1,726.27 7,329.99
TOTAL EQUITY AND LIABILITIES 27,747.85 25,935.96 20,849.96
Significant accounting policies 3
The notes referred to above form an integral part of the standalone financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

086 | COFFEE DAY | ANNUAL REPORT 2016-17

Statement of profit & loss
for the year ended 31st March 2017
(Rs. in million)
Note For the year ended For the year ended
31st March 2017 31st March 2016
REVENUE FROM OPERATIONS 21 964.59 503.09
Other income 22 18.58 101.45
Total income 983.17 604.54
EXPENSES
Purchase of stock in trade 393.15 207.06
Employee benefits expense 23 67.02 59.12
Finance costs 24 1,225.16 1,677.71
Depreciation and amortization expense 25 5.05 4.68
Other expenses 26 88.93 163.47
Total expenses 1,779.31 2,112.04
Loss before tax (796.14) (1,507.50)
Tax expense 27 - -
Loss for the period (796.14) (1,507.50)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plan 0.38 0.32
0.38 0.32
Income tax relating to items that will not be reclassified to profit or loss - -
Other comprehensive income for the period 0.38 0.32
Total Comprehensive Income for the period (795.76) (1,507.18)
Earnings per equity share:
- Basic 30 (3.86) (9.47)
- Diluted (3.86) (9.47)
Significant accounting policies 3

The notes referred to above form an integral part of the standalone financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

FINANCIAL SECTION | 087

Statement of cash flow
for the year ended 31st March 2017
(Rs. in million)
For the year ended For the year ended
31st March 2017 31st March 2016
A. Cash flows from operating activities
Loss for the year (795.76) (1,507.18)
Adjustments for:
- Interest income (including present value change in financial instruments) (10.82) (98.85)
- Interest expense 1,225.16 1,677.71
- Financial guarantee obligation income (5.35) (27.31)
- Depreciation and amortization 5.05 4.68
Operating cash flow before working capital changes 418.28 49.05
Changes in
- Trade receivables and loans (252.26) (32.59)
- Other current and non-current assets (0.55) 206.32
- Provisions 0.53 0.57
-Trade payables and other current and non current financial liabilities (69.33) 42.98
- Other current and non-current liabilities (3.16) (4.93)
Cash generated from operations (324.77) 212.35
Income taxes paid (0.12) 7.37
Cash (used in) /generated from operations [A] 93.39 268.77
B. Cash flows from investing activities
Acquisition of property, plant and equipment (2.30) (2.18)
(Investment in)/ withdrawal of fixed deposits (73.29) 56.01
Investment in debentures - (4,100.00)
Net cash generated from/(used in) investing activities [B] (75.59) (4,046.17)
C. Cash flows from financing activities
Proceeds from issue of share capital including premium - 11,500.00
Repayment of long term and short term borrowings - (3,470.00)
Proceeds from long term borrowings 1,000.00 1,530.00
Redemption of debentures including premium (2,164.67) (4,193.13)
Redemption of preference shares including premium - (719.29)
Proceeds from issue of debentures 3,800.00 2,100.00
Interest received 11.33 98.74
Interest paid (1,180.80) (1,158.44)
Share issue expenses - (716.96)
Loans given to related parties (11,749.61) (8,461.32)
Loans recovered from related parties 9,793.42 7,741.44
Net cash (used in)/ generated from financing activities [C] (490.33) 4,251.04
Net (decrease)/ increase in cash and cash equivalents [A+B+C] (472.53) 473.64
Cash and cash equivalents at the beginning of the year 480.24 6.60
Cash and cash equivalents at the end of the year (refer note 12) 7.71 480.24

The notes referred to above form an integral part of the standalone financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

088 | COFFEE DAY | ANNUAL REPORT 2016-17

Statement of changes in equity
as at 31st March 2017
a Equity share capital
(Rs. in million)
Note Amount
Balanace as at 1st April 2015 145.92
Changes in equity share capital during 2015-16 14 1,914.10
Balanace as at 31st March 2016 2,060.02
Changes in equity share capital during 2016-17 14 -
Balanace as at 31st March 2017 2,060.02

b Other Equity
For the year ended 31st March 2017
(Rs. in million)
Particulars Reserves and Surplus OCI - Total
Securities Retained Remeasuremets
Premium Earnings of Acturial gain
and losses
Balance as at 1 April 2016 21,664.51 (4,841.25) (0.04) 16,823.22
Total comprehensive income for the year ended 31st March 2017
Loss during the year - (796.14) - (796.14)
Other comprehensive income (Refer note 38) - - 0.38 0.38
Total comprehensive income 21,664.51 (5,637.39) 0.34 16,027.46
Balance as at 31st March 2017 21,664.51 (5,637.39) 0.34 16,027.46

For the year ended 31st March 2016

(Rs. in million)
Particulars Reserves and Surplus OCI - Total
Securities Retained Remeasuremets
Premium Earnings of Acturial gain
and losses
Balance as at 1 April 2015 4,124.26 (3,333.75) (0.36) 790.15
Total comprehensive income for the year ended 31st March 2016
Loss during the year - (1,507.50) (1,507.50)
Other comprehensive income (Refer note 38) - - 0.32 0.32
Total comprehensive income 4,124.26 (4,841.25) (0.04) (717.03)
Contributions by and distributions to owners:
Premium received on issue of equity shares 19,323.03 - - 19,323.03
Issue of bonus shares [Refer note 14(d)] (1,021.41) - - (1,021.41)
Share issue expenses (761.37) - - (761.37)
Balance as at 31st March 2016 21,664.51 (4,841.25) (0.04) 16,823.22
Significant accounting policies 3

The notes referred to above form an integral part of the standalone financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

FINANCIAL SECTION | 089

Notes to the financial statements for the year ended 31 March 2017
1.0 REPORTING ENTITY
Coffee Day Enterprises Limited (‘CDEL’ or ‘the Company’) was originally 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.
The Company undertook an Initial Public Offer of equity shares and subsequently got its equity shares listed on the Bombay Stock
Exchange (BSE) and National Stock Exchange (NSE) effective 2 November 2015.
CDEL is the parent 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.
The Company, primarily through its subsidiaries, associates and joint venture companies as detailed below are engaged in business
in multiple sectors such as Coffee-retail and exports, Leasing of commercial office space, Financial services, Integrated Multimodal
Logistics, Hospitality and Information Technology (IT) / Information Technology Enabled Services (ITeS).
List of subsidiaries with percentage holding –
Name of the entity Country of incorporation Percentage of
and other particulars holding (%)
Coffee Day Global Limited (erstwhile a subsidiary of the Company incorporated under the laws of India 86.63
Amalgamated Bean Coffee Trading
Company Limited) ('CDGL')
Tanglin Developments Limited ('TDL') a subsidiary of the Company incorporated under the laws of India 100.00
Coffee Day Hotels and Resorts Private a subsidiary of the Company incorporated under the laws of India 100.00
Limited ('CDHRPL')
Coffee Day Trading Limited (erstwhile a subsidiary of the Company incorporated under the laws of India 88.77
Global Technology Ventures Limited)
('CDTL')
STEP-DOWN SUBSIDIARIES
Way2Wealth Securities Private Limited a subsidiary of TDL and CDTL incorporated under the laws of 85.53
('WSPL') India
Amalgamated Holdings Limited ('AHL') a subsidiary of CDGL incorporated under the laws of India 100.00
Ganga Coffee Curing Works Limited a subsidiary of CDGL incorporated under the laws of India 100.00
A.N Coffeeday International Limited (‘AN a subsidiary of CDGL incorporated under the laws of Cyprus 100.00
CCD’)
Coffee Day Properties (India) Private a subsidiary of CDGL incorporated under the laws of India 100.00
Limited
Classic Coffee Curing Works a partnership firm with CDGL as a controlling partner having a 100.00
share of profit of 100%, registered under the laws of India
Coffeelab Limited a subsidiary of AHL incorporated under the laws of India 100.00
Coffee Day Gastronomie Und a subsidiary of AN CCD incorporated under the laws of Austria 100.00
Kaffeehandles GmbH
Coffee Day CZ a.s a subsidiary of AN CCD incorporated under the laws of Czech 100.00
Republic
Tanglin Retail Reality Developments a subsidiary of TDL incorporated under the laws of India 100.00
Private Limited ('TRR')
Sical Logistics Limited ('SL') a subsidiary of TRR incorporated under the laws of India 52.83
Sical Infra Assets Limited ('SIAL') a subsidiary of SL incorporated under the laws of India 53.60
Sical Iron Ore Terminal Limited a subsidiary of SL incorporated under the laws of India 63.00
Sical Iron Ore Terminal (Mangalore) a subsidiary of SL incorporated under the laws of India 100.00
Limited
Norsea Offshore India Limited a subsidiary of SL incorporated under the laws of India 100.00
Sical Mining Limted a subsidiary of SL incorporated under the laws of India 100.00
Sical Saumya Mining Limited a subsidiary of SL incorporated under the laws of India 65.00
Sical Bangalore Logistics Park Limited a subsidiary of SL incorporated under the laws of India 100.00
Sical Adams Offshore Limited a subsidiary of SL incorporated under the laws of India 100.00
Bergen Offshore Logistics Pte. Limited a subsidiary of SL incorporated under the laws of Singapore 100.00
('BOFL')

090 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
Name of the entity Country of incorporation Percentage of
and other particulars holding (%)
Norsea Global Offshore Pte Ltd a subsidiary of BOFL incorporated under the laws of Singapore 100.00
Sical Multimodal and Rail Transport a subsidiary of SIAL incorporated under the laws of India 100.00
Limited ('SMART')
Girividyuth India Limited a subsidiary of TDL incorporated under the laws of India 100.00
Wilderness Resorts Private Limited a subsidiary of CDHRPL incorporated under the laws of India 99.92
('WRPL')
Karnataka Wildlife Resorts Private Limited a subsidiary of WRPL incorporated under the laws of India 100.00
Mandi2Market Traders Private Limited a subsidiary of WSPL incorporated under the laws of India 100.00
(erstwhile Way2Wealth Institutional
Broking Private Limited / erstwhile
Way2Wealth Insurance Broking Private
Limited)
Way2Wealth Capital Private Limited a subsidiary of WSPL incorporated under the laws of India 99.99
Way2Wealth Realty Advisors Private a subsidiary of WSPL incorporated under the laws of India 94.99
Limited
Way2Wealth Brokers Private Limited a subsidiary of WSPL incorporated under the laws of India 99.99
('WBPL')
Way2Wealth Insurance Brokers Private a subsidiary of WSPL incorporated under the laws of India 99.99
Limited (erstwhile Total Insurance Brokers
Private Limited)
AlphaGrep Securities Private Limited a subsidiary of WSPL incorporated under the laws of India 51.00
(erstwhile Way2Wealth Illuminati
Securities Private Limited)
Way2Wealth Distributors Private Limited a subsidiary of WSPL incorporated under the laws of India 99.99
Way2Wealth Commodities Private Limited a subsidiary of WBPL incorporated under the laws of India 99.99
Way2Wealth Illuminati Pte. Limited a subsidiary of WBPL incorporated under the laws of Singapore 100.00
('W2WIP')
AlphaGrep UK Limited a subsidiary of W2WIP incorporated under the laws of United 100.00
Kingdom
Magnasoft Consulting India Private a subsidiary of CDTL incorporated under the laws of India 77.88
Limited ('MCIPL')
Magnasoft Europe Limited a subsidiary of MCIPL incorporated under the laws of United 100.00
Kingdom
Magnasoft Spatial Services Inc. a subsidiary of MCIPL incorporated under the laws of Denver 100.00
AlphaGrep Holding HK Limited a subsidiary of W2WIP incorporated under the laws of Hong Kong 100.00
Shanghai Dao GE International Trading a subsidiary of W2WIP incorporated under the laws of China 100.00
Ltd.
ASSOCIATES
Ittiam Systems Private Limited an associate of TDL incorporated under the laws of India 21.91
Global Edge Software Private Limited an associate of CDTL incorporated under the laws of India 26.50
Mindtree Limited an associate of the Company and CDTL incorporated under the 16.72
laws of India
Barefoot Resorts and Leisure India Private an associate of CDHRPL incorporated under the laws of India 27.69
Limited
JOINT VENTURES
Coffee Day Schaerer Technologies Private a joint venture of CDGL incorporated under the laws of India 49.00
Limited (‘CDSTPL’)
PSA Sical Terminals Limited a joint venture of SL incorporated under the laws of India 37.50
Sical Sattva Rail Terminal Private Limited a joint venture of SMART incorporated under the laws of India 50.00

FINANCIAL SECTION | 091

Notes to the financial statements for the year ended 31 March 2017
2.0 BASIS OF PREPARATION
2.1 Statement of compliance
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) as per Companies (Indian
Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act 2013, (the 'Act') and other relevant provisions of
the Act.
The Company has adopted all the Ind AS and the adoption was carried out in accordance with Ind AS 101, First‑Time Adoption
of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as
prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous
GAAP. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance
and cash flows of the Company is provided in Note 38. Accounting policies have been consistently applied except where a newly-
issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting
policy hitherto in use.
Details of the Company's accounting policies are included in note 3.
2.2 Functional and presentation currency
These financial statements are presented in Indian Rupees (Rs.), which is also the Company’s functional currency. All amounts have
been rounded-off to the nearest millions, unless otherwise indicated.
2.3 Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as
current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle,
- Held primarily for the purpose of trading,
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle,
- It is held primarily for the purpose of trading,
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
The Company has identified twelve months as its operating cycle."
2.4 Basis of measurement
The financial statements have been prepared on the historical cost basis except for the following items:
Items Measurement basis
Building (Property, plant and equipment) Fair value
Net defined benefit (asset)/ liability Fair value of plan assets less present value of defined benefit obligations.

2.5 Use of estimates and judgements

The preparation of the financial statements in conformity with Ind ASs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.

092 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
Judgements
Information about judgements made in applying accounting policies that have the most significant effects on the amounts
recognised in the financial statements are included in the following notes:
- Note 31 – lease classification
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the
year ending 31st March 2018 is included in the following notes:
- Note 27 – recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used;
- Note 34 – measurement of defined benefit obligations: key actuarial assumptions;
- Notes 28 – recognition and measurement of contingencies: key assumptions about the likelihood and magnitude of an outflow
of resources;
- Note 36 – impairment of financial assets.
2.6 Measurement of fair values
A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-
financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is
measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and
best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The Company has an established control framework with respect to the measurement of fair values. The Company engages with
external valuers for measurement of fair values in the absence of quoted prices in active markets.
Significant valuation issues are reported to the Company’s audit committee. All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a whole:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used
to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement
is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement. The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets, and significant
liabilities, such as contingent consideration.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. This note summarises
accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
- Financial instruments (note 36)
- Disclosures for valuation methods, significant estimates and assumptions (note 36)
- Quantitative disclosures of fair value measurement hierarchy (note 36)
- Financial instruments (including those carried at amortised cost) (note 36)

FINANCIAL SECTION | 093

Notes to the financial statements for the year ended 31 March 2017
3 SIGNIFICANT ACCOUNTING POLICIES
3.1 Property, plant and equipment and other intangible assets (other than goodwill)
Property, plant and equipment:
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working
condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is
located.
All items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in
which they are incurred.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate
items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
On transition to Ind AS, the Company has elected to recognise the carrying value of all of its property, plant and equipment as at 1
April 2015 as per para 16 of Ind AS 16 except for building which has been measured at fair value.
Depreciation methods, estimated useful lives and residual value
Depreciation is provided on a Straight Line Method (‘SLM’) over estimated useful life of the fixed assets estimated by the
Management. The Management believes that the useful lives as given below best represent the period over which management
expects to use these assets based on an internal assessment and technical evaluation where necessary. Hence, the useful lives for
these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013. Depreciation
for assets purchased/ sold during a period is proportionately charged. The Company estimates the useful lives for fixed assets as
follows:

Asset category Estimated useful life

Leasehold improvements Lease term or estimated useful life, whichever is lower
Plant and machinery 8 years
Office equipment 6 years
Computers (including software) 2 years
Furniture and fixtures 8 years
Vehicles 6 years
The building built on leasehold land is classified as building and amortised over the lease term (i.e 22 years) or the useful life of the
building (i.e 20 years), whichever is lower
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding
capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the
expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite.
The Company only has software as an intangible asset having a useful life of 3 years.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
3.2 Impairment of assets
The Company recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost; and
- financial assets measured at FVOCI- debt investments.
At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at FVOCI are
credit‑ impaired. A financial asset is ‘credit‑ impaired’ when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred.

094 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
Evidence that a financial asset is credit‑ impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or being past due for 90 days or more;
- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for a security because of financial difficulties.
The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are
measured as 12 month expected credit losses:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial
instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a
financial instrument.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12
months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over
which the Company is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available
without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's
historical experience and informed credit assessment and including forward‑ looking information.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as
realising security (if any is held); or
- the financial asset is 90 days or more past due.
Measurement of expected credit losses
Expected credit losses are a probability‑weighted estimate of credit losses. Credit losses are measured as the present value of all
cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows
that the Company expects to receive). Presentation of allowance for expected credit losses in the balance sheet Loss allowances for
financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect
of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income
that could generate sufficient cash flows to repay the amounts subject to the write‑off. However, financial assets that are written off
could still be subject to enforcement activities in order to comply with the Company's procedures for recovery of amounts due.
The Company's non-financial assets and inventories, are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually
for impairment.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units
(CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash
inflows of other assets or CGUs.
Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies
of the combination.

FINANCIAL SECTION | 095

Notes to the financial statements for the year ended 31 March 2017
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in
use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the CGU (or the asset)."
3.3 Inventories
Inventories are valued at the lower of cost and net realizable value. ‘Cost’ comprises purchase cost and all expenses incurred in
bringing the inventory to its present location and condition. Cost has been determined as follows:

Nature of inventory Method of valuation

Raw materials FIFO, landed cost
The comparison of cost and net realizable value is made on an item by item basis. The Company periodically assesses the inventory
for obsolescence and slow moving stocks.
3.4 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can
be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually defined terms of payment, inclusive of excise duty and net of taxes or
duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements
since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit
risks.
The Company derives its revenue primarily from running and/or managing hotels and resorts and providing consultancy services.
Service income is recognized when the related services are rendered unless significant future contingencies exist.
Revenue from sale of coffee beans is recognised on transfer of all significant risk and rewards of ownership to the buyer.
Sales are disclosed both gross and net of sales tax, services tax, trade discount and quality claims.
Interest on the deployment of funds is recognised using the time-proportion method, based on underlying interest rates.
Advances received from the customers are reported as liabilities until all conditions for revenue recognition are met and is
recognized as revenue once the related services are rendered.
Dividend income is recognised when the Company's right to receive dividend is established.
3.5 Leases
Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if
lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included
in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified
as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or
loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general
inflation to compensate for the lessor’s expected inflationary cost increases.
3.6 Investments and other financial assets
a) Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and
financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss
(FVTPL), transaction costs that are directly attributable to its acquisition or issue.
b) Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at
- amortised cost;
- FVOCI – debt investment;
- FVOCI – equity investment; or

096 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
- FVTPL
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its
business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
− the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
− the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs
of financial assets carried at fair value through profit or loss are expensed in profit or loss.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI (designated as FVOCI – equity investment). This election is made on
an investment‑ by‑ investment basis. All financial assets not classified as measured at amortised cost or FVOCI as described
above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably
designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if
doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets: Business model assessment
The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level
because this best reflects the way the business is managed and information is provided to management. The information
considered includes:
− the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether
management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching
the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows
through the sale of the assets;
– how the performance of the portfolio is evaluated and reported to the Company's management;
– the risks that affect the performance of the business model (and the financial assets held within that business model) and
how those risks are managed;
– how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets
managed or the contractual cash flows collected; and
– the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations
about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this
purpose, consistent with the Company's continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured
at FVTPL.
Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is
defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well
as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment,
the Company considers:
− contingent events that would change the amount or timing of cash flows;
− terms that may adjust the contractual coupon rate, including variable interest rate features;
− prepayment and extension features; and
− terms that limit the Company's claim to cash flows from specified assets (e.g. non‑ recourse features).

FINANCIAL SECTION | 097

Notes to the financial statements for the year ended 31 March 2017
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include
reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a
significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that
substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include
reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the
prepayment feature is insignificant at initial recognition.
Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest
or dividend income, are recognised in profit or loss.
Financial assets at These assets are subsequently measured at amortised cost using the effective interest method.
amortised cost The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains
and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Equity investments at These assets are subsequently measured at fair value. Dividends are recognised as income in
FVOCI profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
Financial liabilities: Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held‑ for‑ trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other
financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit
or loss. See Note 3(c)(v) for financial liabilities designated as hedging instruments.
c) Derecognition of financial assets
Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or
it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the
risks and rewards of ownership and does not retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms
are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The
difference between the carrying amount of the financial liability extinguished and the new financial liability with modified
terms is recognised in profit or loss.
3.7 Employee benefits
Defined benefit plans
The Company's gratuity plan is a defined benefit plan. The present value of gratuity obligation under such defined benefit plans is
determined based on actuarial valuations carried out by an independent actuary using the Projected Unit Credit Method, which
recognises each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately
to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates
used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government
securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains
and losses are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI
in the period in which they occur.
3.8 Foreign currency transactions
a) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which
the entity operates (‘the functional currency’). The financial statements are presented in Indian rupee (Rs.)

098 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit
or loss. A monetary item for which settlement is neither planned nor likely to occur in the foreseeable future is considered as a
part of the entity’s net investment in that foreign operation.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis
within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of
the fair value gain or loss.
3.9 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
3.10 Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the
reporting date in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI
or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
3.11 Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not
recognised for future operating losses.
Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract
exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources
embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable
estimate of such obligation.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
The disclosure of contingent liability is made when, as a result of obligating events, there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources.
3.12 Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities in the balance sheet.
3.13 Cash flow statement
Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects of transactions of
a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing
and financing activities of the Company are segregated.

FINANCIAL SECTION | 099

Notes to the financial statements for the year ended 31 March 2017
3.14 Earnings per share
The basic loss per share is computed by dividing the net profit/ (loss) attributable to owner's of the Company for the year by the
weighted average number of equity shares outstanding during reporting period.
The number of shares used in computing diluted earnings/ (loss) per share comprises the weighted average shares considered for
deriving basic earnings/ (loss) per share and also the weighted average number of equity shares which could have been issued on
the conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as of the beginning of the reporting date, unless they have been issued at a
later date. In computing diluted earnings per share, only potential equity shares that are dilutive and which either reduces earnings
per share or increase loss per share are included.
3.15 Segment reporting
Based on the "management approach" as defined in Ind AS 108, "Operating Segments", the Chief Operating Decision Maker
(CODM) evaluates the Company performance and allocates resources based on an analysis of various performance indicators by
business segments. Accordingly, information has been presented along these business segments viz. Coffee trading, Hospitality
and Investment operations as its operating segments.
3.16 Contributed equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
3.17 Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the
entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

4 PROPERTY, PLANT AND EQUIPMENT

(Rs. in million)
Owned Total
Buildings* Plant and Office Furniture Computers Vehicles
equipment equipment and fixtures
Cost or deemed cost
Balance as at 1st April 2015 53.22 5.02 1.50 4.86 1.15 0.19 65.94
Additions 1.43 0.23 0.11 0.01 0.11 0.06 1.95
Disposals - - - - - - -
Balance as at 31st March 2016 54.65 5.25 1.61 4.87 1.26 0.25 67.89
Balance as at 1st April 2016 54.65 5.25 1.61 4.87 1.26 0.25 67.89
Additions 0.20 1.45 0.09 0.30 0.11 0.02 2.17
Disposals - - - - - - -
Balance as at 31st March 2017 54.85 6.70 1.70 5.17 1.37 0.27 70.06
Accumulated depreciation:
Balance as at 1st April 2015 - 1.83 0.85 2.21 1.15 0.10 6.14
Depreciation for the year 3.36 0.64 0.26 0.24 0.11 0.03 4.64
(Refer note 25)
Disposals - - - - - - -
Balance as at 31st March 2016 3.36 2.47 1.11 2.45 1.26 0.13 10.78
Balance as at 1st April 2016 3.36 2.47 1.11 2.45 1.26 0.13 10.78
Depreciation for the year 3.39 0.78 0.26 0.41 0.11 0.05 5.00
(Refer note 25)
Disposals - - - - - - -
Balance as at 31st March 2017 6.75 3.25 1.37 2.86 1.37 0.18 15.78
Carrying amounts (net):
As at 1st April 2015 53.22 3.19 0.65 2.65 - 0.09 59.80
As at 31st March 2016 51.29 2.78 0.50 2.42 - 0.12 57.11
As at 31st March 2017 48.10 3.45 0.33 2.31 - 0.09 54.28
*Represents building constructed on leasehold land.

100 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
Significant estimates
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic
depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of
its life, if any. The useful lives and residual values of Company's assets are determined by management at the time the asset is acquired
and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as
anticipationof future events, which may impact their life, such as changes in technology.

5 INTANGIBLE ASSETS
(Rs. in million)
Software Total
Cost
Balance as at 1st April 2015 0.20 0.20
Additions 0.13 0.13
Disposals - -
Balance as at 31st March 2016 0.33 0.33
Balance as at 1st April 2016 0.33 0.33
Additions 0.03 0.03
Disposals - -
Balance as at 31st March 2017 0.36 0.36
Accumulated amortisation
Balance as at 1st April 2015 0.20 0.20
Amortisation for the year (Refer note 25) 0.04 0.04
Disposals - -
Balance as at 31st March 2016 0.24 0.24
Balance as at 1st April 2016 0.24 0.24
Amortisation for the year (Refer note 25) 0.05 0.05
Disposals - -
Balance as at 31st March 2017 0.29 0.29
Carrying amount:
As at 1st April 2015 - -
As at 31st March 2016 0.09 0.09
As at 31st March 2017 0.07 0.07

6 NON-CURRENT INVESTMENTS
(Rs. in million)
As at As at As at
31st March 2017 31st March 2016 1st April 2015
Investments accounted at cost
Trade investment - unquoted
Investment in debentures
- in subsidiaries
41,000,000 (31st March 2016: 41,000,000; 1st April 2015: Nil) debentures 4,100.00 4,100.00 -
of Coffee Day Global Limited [Refer note 6(a)]
Investment in equity instruments
- in subsidiaries
11,223,980 (31st March 2016: 11,223,980; 1st April 2015: 11,223,980) 706.68 706.50 706.50
equity shares of Coffee Day Hotels and Resorts Private Limited
5,131,651 (31st March 2016: 5,131,651; 1st April 2015: 5,131,651) equity 809.21 804.04 779.23
shares of Tanglin Developments Limited
147,192,442 (31st March 2016: 147,192,442; 1st April 2015: 147,192,442) 10,370.25 10,370.25 10,370.25
equity shares of Coffee Day Global Limited
30,922,186 (31st March 2016: 30,922,186; 1st April 2015: 30,922,186) 1,353.72 1,353.72 1,353.72
equity shares of Coffee Day Trading Limited

FINANCIAL SECTION | 101

Notes to the financial statements for the year ended 31 March 2017
6 NON-CURRENT INVESTMENTS (contd.)
(Rs. in million)
As at As at As at
31st March 2017 31st March 2016 1st April 2015
77,729,800 (31st March 2016: 77,729,800; 1st April 2015: 77,729,800) 723.78 723.78 721.28
equity shares of Way2Wealth Securities Private Limited
Trade investment - quoted
Investment in equity instruments
- in associates
17,461,768 (31st March 2016: 17,461,768; 1st April 2015: 8,730,844) equity 1,946.47 1,946.47 1,946.47
shares of Mindtree Limited
20,010.11 20,004.76 15,877.45

(a) 0.01% Unsecured compulsorily convertible debentures issued by Coffee Day Global Limited -
• As at the year end, the paid up value of these debentures is Rs.4,100 million [i.e., 41,000,000 unsecured rated compulsorily
convertible debentures of Rs.100 each (31st March 2016: 41,000,000; 1st April 2015: Nil)]
• These debentures carry an interest rate of 0.01% payable annually
• These debentures shall be converted into 18,755822 equity shares having a par value of Re 1 each after 4 years and 9 months
from the date of issue

Aggregate book value of quoted investments 1,946.47 1,946.47 1,946.47

Aggregate market value of quoted investments 7,899.70 11,385.95 11,388.13
Aggregate value of unquoted investments 18,063.64 18,058.29 13,930.98
Aggregate amount of impairment in the value of investments - - -
There were no non-current investments purchased or sold by the Company during the year. However during the previous year, the
Company had invested in debentures of Coffee Day Global Limited amounting to Rs.4,100 million as detailed in the note above.
7 LOANS
A Non-current loans
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Unsecured, considered good
Loans and advance to employees 4.00 4.00 3.00
Security deposit 2.81 32.81 2.81
6.81 36.81 5.81

B Current loans
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Unsecured, considered good
Loans to employees 0.05 1.28 0.13
Loans to related parties
Loans to wholly owned subsidiary companies (Refer note 33) 7,143.89 5,187.68 4,464.18
7,143.94 5,188.96 4,464.31

8 OTHER TAX ASSETS

(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Advance tax including tax deducted at source, net of provision for tax 25.40 25.91 32.97
Balance with government authorities 2.94 2.31 2.62
28.34 28.22 35.59

102 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31st March 2017
9 OTHER FINANCIAL ASSETS
A Other non-current financial assets
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Fixed deposit accounts with banks* - 41.06 186.02
- 41.06 186.02
* Represents balances held as Security for loan availed by the Company

B Other current financial assets

(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Interest accrued but not due 0.08 0.59 0.48
0.08 0.59 0.48

10 OTHER ASSETS
A Other non-current assets
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Prepaid expenses 2.24 1.19 -
2.24 1.19 -

B Other current financial assets

(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Prepaid expenses 4.18 3.45 210.96
4.18 3.45 210.96

11 TRADE RECEIVABLES
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Unsecured, considered good
Trade receivables 286.79 4.53 2.94
286.79 4.53 2.94
Non-current - - -
Current 286.79 4.53 2.94
286.79 4.53 2.94
Of the above trade receivables from related parties are as below:
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Unsecured, considered good
Trade receivables from related parties 286.06 2.18 1.71
286.06 2.18 1.71

The Company's exposure to credit and currency risks, and loss allowances related to trade receivables are disclosed in note 36

FINANCIAL SECTION | 103

Notes to the financial statements for the year ended 31 March 2017
12 CASH AND CASH EQUIVALENTS
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Balances with banks
- in current accounts 7.71 58.04 6.16
- on deposit accounts (with original maturity of 3 months or less) - 421.99 -
Cash on hand - 0.21 0.44
7.71 480.24 6.60

13 BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS

(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Fixed deposit accounts with banks* 203.30 88.95 -
203.30 88.95 -
*represents balances held as security for loan availed by the Company.

14 EQUITY SHARE CAPITAL

(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Authorised
270,584,000 (31st March 2016: 270,584,000, 1st April 2015: 27,000,000) 2,705.84 2,705.84 2,700.00
equity shares of Rs.10 each
3,500,000 (31st March 2016: 3,500,000, 1st April 2015: 3,500,000) 35.00 35.00 35.00
compulsorily convertible preference shares of Rs.10 each
Nil (31st March 2016: Nil, 1st April 2015: 238,000) series A non-convertible - - 2.38
redeemable preference shares of Rs.10 each
Nil (31st March 2016: Nil, 1st April 2015: 346,000) series B non-convertible - - 3.46
redeemable preference shares of Rs.10 each
2,740.84 2,740.84 2,740.84
Issued, subscribed and fully paid up
206,001,719 (31st March 2016: 206,001,719, 1st April 2015: 14,591,551) 2,060.02 2,060.02 145.92
equity shares of Rs.10 each.
2,060.02 2,060.02 145.92

(a) Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year is as given below:
(Rs. in million)
Particulars As at 31st March 2017 As at 31st March 2016
No of shares Amount No of shares Amount
Number of shares outstanding at the beginning of the year 206,001,719 2,060.02 14,591,551 145.92
Add:
- Issue of bonus shares [Refer Note 14 (d)] - - 102,140,857 1,021.41
- Conversion of compulsorily convertible preference shares - - 13,969,232 139.69
held by Standard Chartered Private Equity (Mauritius) II
Limited [Refer note 19(xi)]
- Conversion of compulsorily convertible debentures held - - 17,826,912 178.27
by KKR Mauritius PE Investments II Limited [Refer note 16
(xi)]
- Conversion of compulsorily convertible debentures held - - 22,412,192 224.12
by NLS Mauritius LLC [Refer note 16 (xii)]
- Issue of shares pursuant to initial public offer - - 35,060,975 350.61
[Refer Note 14 (b)]
Number of shares outstanding at the end of the year 206,001,719 2,060.02 206,001,719 2,060.02

104 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
(b) The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and
the repayment of capital:
Equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the
Company’s residual assets on winding up. The equity shares are entitled to receive dividend as declared from time to time, subject
to preferential right of preference shareholders to payment of dividend. The voting rights of an equity shareholder on a poll (not
on show of hands) are in proportion to his/its share of the paid-up equity share capital of the Company. Voting rights cannot be
exercised in respect of shares on which any call or other sums presently payable has not been paid.
Failure to pay any amount called up on shares may lead to their forfeiture. On winding up of the Company, the holders of equity
shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts, in
proportion to the number of equity shares held.
During the month of November 2015, 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 BSE and NSE effective 2 November 2015. The proceeds from IPO aggregates to Rs.10,739 million (net of issue expenses of
Rs.761.37 million).
(c) Equity shareholders holding more than 5% of equity shares along with the number of equity shares held at the beginning and at
the end of the year is as given below:
Particulars As at 31st March 2017 As at 31st March 2016
% of holding No of shares % of holding No of shares
Equity shares
Mr. V G Siddhartha 33.58% 69,174,700 31.04% 63,945,904
KKR Mauritius PE Investments II Limited 10.60% 21,826,912 10.60% 21,826,912
NLS Mauritius LLC 10.88% 22,412,992 10.88% 22,412,992
Devadarshini Info Technologies Private Limited 6.02% 12,408,440 6.02% 12,408,440
Coffeeday Consolidations Private Limited 5.96% 12,268,416 5.96% 12,268,416
Marina West (Singapore) Pte. Ltd. 5.54% 11,402,901 - -
Gonibedu Coffee Estates Private Limited 5.37% 11,071,104 5.37% 11,071,104
Standard Chartered Private Equity (Mauritius) II Limited - - 6.78% 13,969,232
(d) Pursuant to the approval of the shareholders granted at its extraordinary general meeting held on 8 May 2015, 102,140,857 equity
shares were allotted as fully paid-up to the existing shareholders of the Company in the ratio of seven equity shares for every one
equity share held on 7 May 2015. As on 7 May 2015, 14,591,551 equity shares were outstanding. The bonus equity shares were
issued by capitalisation of the reserves lying to the credit of the securities premium account of the Company.

15 OTHER EQUITY
(Rs. in million)
Particulars As at As at
31st March 2017 31st March 2016
Securities premium
At the commencement of the year 21,664.51 4,124.26
Add: Premium received on issue of equity shares* - 19,323.03
Less: Issue of bonus shares [Refer Note 15(d)] - (1,021.41)
Less: Share issue expenses ** - (761.37)
At the close of the year 21,664.51 21,664.51
Retained earnings/ (losses)
At the commencement of the year (4,841.25) (3,333.75)
Add: Net loss for the year (796.14) (1,507.50)
At the end of the year (5,637.39) (4,841.25)
Remeasurement of defined benefit (liability)/ asset:
At the commencement of the year (0.04) (0.36)
Add: acturial gain for the year 0.38 0.32
0.34 (0.04)
16,027.46 16,823.22
* During 2015-16, the Company has made an Initial Public Offer (IPO) and issued 35,060,975 equity shares at a premium of Rs.318
per share. Further the Company has credited Rs.5,786.70 million to securities premium account on conversion of Compulsorily
Convertible Debentures held by KKR Mauritius PE Investments II Limited, Arduino Holdings Limited and Standard Chartered Private
Equity (Mauritius) II Limited to equity shares during the year [Refer Note 16(xi), 16(xii), 19(xi)]

FINANCIAL SECTION | 105

Notes to the financial statements for the year ended 31 March 2017
** As per the requirement of section 52 of the Companies Act 2013, the Company has utilised the securities premium for the expenses
incurred in connection with the Initial Public Offer (IPO).
Nature and purpose of other reserves:
Securities premium:
Securities premium reserve is used to record the premium received on issue of shares by the Company. The reserve can be utilised
in accordance with the provision of sec 52(2) of Companies Act, 2013.
Remeasurement of defined benefit (liability)/ asset:
Remeasurements of defined benefit (liability)/ asset comprises actuarial gains and losses and return on plan assets (excluding
interest income)
Retained earnings:
The cumulative gain or loss arising from the operations which is retained by the Company is recognised and accumulated under
the heading of retained earnings. At the end of the year, the profit after tax istransferred from the statement of profit and loss to the
retained earnings account.
16 BORROWINGS
A Non-current borrowings
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Secured:
Debentures
§ 1,722 (31st March 2016: 2,500; 1st April 2015: 2,500) fully paid 1,512.23 2,602.50 2,664.85
secured rated redeemable non-convertible debentures of
Rs.1,000,000 each issued to Reliance Mutual Fund [Refer Note 16(i)]
§ Nil (31st March 2016: Nil, 1st April 2015: 650) zero coupon secured - - 765.53
rated redeemable non-convertible debentures of Rs.1,000,000
each issued to DSP BlackRock Income Opportunities Fund [Refer
Note 16(ii)]
§ Nil (31st March 2016: Nil, 1st April 2015: 1,000) secured rated - - 993.91
redeemable non-convertible debentures of Rs.1,000,000 each
issued to ICICI Prudential Asset Management Company [Refer Note
16(iii)]
§ Nil (31st March 2016: Nil, 1st April 2015: 850) zero coupon secured - - 1,044.18
rated redeemable non-convertible debentures of Rs.1,000,000
each held by Aditya Birla Private Equity - Fund I [Refer Note 16(iv)]
§ 1,000 (31st March 2016: Nil, 1st April 2015: Nil) secured rated 998.28 - -
redeemable non-convertible debentures of Rs.1,000,000 each
issued to ICICI Prudential Asset Management Company [Refer Note
16(v)]
§ 1,050 (31st March 2016: Nil, 1st April 2015: Nil) secured rated 1,046.78 - -
redeemable non-convertible debentures of Rs.1,000,000 each
issued to DSP Black Rock [Refer Note 16(vi)]
§ 1200 (31st March 2016: 1,200, 1st April 2015: Nil) secured rated 1,198.28 1,198.28 -
redeemable non-convertible debentures of Rs.1,000,000 each
issued to Birla Sun Life [Refer Note 16(vii)]
Term loans
From banks
- Aditya Birla Finance Limited [Refer Note 16(viii) (a) and (viii) (b)] 1,526.29 1,521.08 -
- Axis Bank Limited [Refer Note 16(ix)] 922.36 - -
- Rabo India Finance Limited [Refer Note 16(x)] - - 795.63
Unsecured:
Debentures
§ Nil (31st March 2016: Nil, 1st April 2015: 27,160,000) zero coupon - - 2,716.00
compulsorily convertible debentures of Rs.100 each issued to KKR
Mauritius PE Investments II Limited [Refer Note 16(xi)]
§ Nil (31st March 2016: Nil, 1st April 2015: 35,998,232) compulsorily - - 3,599.82
convertible debentures of Rs.100 each issued to Arduino Holdings
Limited [Refer Note 16(xii)]
7,204.22 5,321.86 12,579.92
Information about the Company’s exposure to interest rate and liquidity risks is included in note 36.

106 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
Notes:
(i) Fully paid secured rated redeemable non-convertible debentures issued to Reliance Mutual Fund -
§ As at the year end, the paid up value of these debentures is Rs.1,722 million including current maturities of long-term
debt) [i.e., 1,722 secured rated redeemable non convertible debentures of Rs.1 million each (31st March 2016: Rs.2,500
million; 1 April 2015: Rs.2,500 million)]
§ Security
- Pledge of a proportion of the shares of Mindtree Limited and Tanglin Development Limited held by the Company;
§ Personal guarantee of Mr. V. G. Siddhartha.
§ These debentures carry fixed maturity internal rate of return of 14.25% p.a. including quarterly payable coupon interest
rate of 6.5% p.a.
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.
§ The principal amount shall be repaid in 9 equal quarterly installments beginning from 18th March 2017 and expiring on
the scheduled maturity date (i.e., 15th March 2019).
§ The Company has an option of voluntary prepayment under certain circumstances as set out in the agreement.
§ During the year, the Company redeemed debentures worth Rs.777.78 million.
(ii) Zero coupon secured rated redeemable non-convertible debentures issued to DSP BlackRock Income Opportunities Fund -
§ As at the year end, the paid up value of these debentures is Rs.Nil (31st March 2016: Rs.Nil; 1st April 2015: Rs.650 million)]
§ Security
- Pledged a proportion of the shares of Mindtree Limited and Tanglin Development Limited held by the Company
- Personal guarantee of Mr. V. G. Siddhartha.
§ These debentures were redeemable by way of bullet repayment at the end of 36 months from the date of issue (i.e.,
28 December 2016). At the time of redemption, the Company will be liable to pay redemption premium equal to 15%
compounded interest (compounded annually) which aggregates to Rs.0.530 million per debenture. The Company had
accounted for the compounded interest @ 15% through its debenture redemption reserve for the year.
§ During the previous year 2015-16, the Company had voluntarily redeemed the entire 650 debentures of Rs.1 million each
at premium of Rs.254,930,000.
(iii) Secured rated redeemable non-convertible debentures issued to ICICI Prudential Asset Management Company -
§ As at the year end, the paid up value of these debentures is Rs.Nil (31st March 2016: Rs.Nil; 1st April 2015: Rs.1,000)
§ Security
- Pledged a proportion of the shares of Mindtree Limited and Coffee Day Global Limited held by the Company;
- Pledged a proportion of the shares of Sical Logistics Limited held by Tanglin Retail Reality Developments Private Limited
- Personal guarantee of Mr. V. G. Siddhartha
§ These debentures carried fixed maturity interest rate of 13.25% p.a.
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.
§ These debentures were redeemable by way of bullet repayment at the end of 36 months from the date of issue (i.e., 4 July
2016). The Company has an option of voluntary prepayment under certain circumstances as set out in the agreement.
§ During the year ended 31st March 2016, the Company redeemed had redeemed 1,000 debentures of Rs.1 million each
aggregating to Rs.1,000 million at premium of Rs.2.64 million
(iv) Secured rated redeemable non-convertible debentures issued to Aditya Birla Mutual Fund 1 -
§ As at the year end, the paid up value of these debentures is Rs.Nil (31st March 2016: Rs.220 million; 1st April 2015: Rs.850
million) including current maturities of long-term debt [i.e., 220 secured rated redeemable non convertible debentures of
Rs.1 million each]
§ Security
- Pledged a proportion of the shares of Mindtree Limited and Tanglin Development Limited held by the Company
- Personal guarantee of Mr. V. G. Siddhartha.

FINANCIAL SECTION | 107

Notes to the financial statements for the year ended 31 March 2017
§ Any delay in repayment of dues under the agreement entails payment of penal interest @ 18.5% p.a. for the period of
delay.
§ These debentures were redeemable by way of bullet repayment at the end of 36 months from the date of issue (i.e., 27
December 2016).
The Company shall make payment of a fixed redemption premium equal to 1.470290 times of the face value of the
debentures subject to certain other terms of the agreement. Additionally, at the time of redemption, the Company is also
liable to make payment of a floating redemption premium, which premium shall be, subject to the cap of - (i) 33.34%
of stock return or (ii) 1.676450 times of the principal amount (inclusive of the fixed redemption premium payable and
floating redemption premium payable).
§ During the year ended 31st March 2016, the Company had partly redeemed 630 debentures of Rs.1 million each
aggregating to Rs.630 million at premium of Rs.426.16 million. During the previous year 31st March 2017, the Company
redeemed 220 debentures of Rs.1 million each aggregating to Rs.220 million at premium of Rs.148.82 million.
(v) Secured rated redeemable non-convertible debentures issued to ICICI Prudential Asset Management Company -
Fully paid secured rated redeemable non-convertible debentures of Rs.1,000,000 each issued to ICICI Prudential Asset
Management Company -
§ As at the year end the paid up value of these debentures is Rs.1,000 million [i.e, 1000 secured rated redeemable non-
convertible debentures of Rs.1,000,000 each (31st March 2016: Rs.Nil; 1st April 2015: Nil)]
§ These debenturesc carry interest @ MIBOR plus 600 base points subject to a minimum of 10.99% and maximum of 11.01%
§ Security
- Pledge of shares of Mindtree where the aggregate amount shall be equal to the principal amount.
- Pledge of shares of CDGL where the aggregate amount shall be 2.5 times the benchmark amount from the allotment
date and atleast 1.5 times the benchmark amount from the effective date of issue of mindtree shares.
- Personal guarantee of Mr. V. G. Siddhartha.
§ The Company at all times shall maintain a minimum reserve which shall be equal to the money due and payable to the
debenture holders.
§ The amount shall be paid on bullet repayment basis on the expiry of the term. (i.e; 11th March 2019)
§ Amounts unpaid on due date will attract overdue interest at 2% p.a over and above the cash coupon rate.
§ The Company can redeem such debentures before maturity by giving one day notice of the same.
(vi) Secured rated redeemable non-convertible debentures issued to DSP Blackrock Income opportunities Fund -
§ As at the year end, the paid up value of these debentures is Rs.1,050 million (31st March 2016: Rs.Nil; 1st April 2015: Nil)
§ Security
- Pledge of shares of Mindtree where the aggregate value is equal to the benchmark amount
- Pledge of Tanglin Shares where the aggregate value of the shares is equal to the benchmark amount
- The Company shall at all times, deposit monies in the designated accounts which is due and payable to the debenture
holders on the Scheduled Maturity Date.
- Personal guarantee of Mr. V G Siddhartha.
§ These debentures carry fixed redemption premium of 11.50 % with an interest rate of 8% p.a. cash coupon
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.
§ These debentures are redeemable by way of bullet repayment at the end of 19 months and 6 days from the date of issue
(i.e., 25 October 2018)
The Company has an option of voluntary prepayment under certain circumstances as set out in the agreement.
(vii) Secured rated redeemable non-convertible debentures issued to Birla Sun Life-
§ As at the year end, the paid up value of these debentures is Rs.1,200 million (31st March 2016: Rs.1,200 million; 1st April
2015: Nil)

108 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
§ Security
- Pledge of a proportion of the shares of Mindtree Limited and Coffee Day Global Limited held by the Company;
- Pledge of a proportion of the shares of Sical Logistics Limited held by Tanglin Retail Reality Developments Private Limited
- Personal guarantee of Mr. V. G. Siddhartha
§ These debentures have been allotted in two tranches- 27 April 2015- Rs.600 million and 12 May 2015- Rs.600 million.
§ These debentures carry an interest rate of 14.5% p.a. (increases to 15.5% after one year from date of allotment)
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.
§ These debentures are redeemable by way of bullet repayment at the end of 36 months from the date of issue i.e., 26 April
2018 (Rs.600 million) and 11 May 2018 (Rs.600 million).
The Company has an option of voluntary prepayment under certain circumstances as set out in the agreement.
(viii) (a) From Aditya Birla Finance Limited [Principal amount of loan amounting to Rs.600 million (31st March 2016 Rs.600 million;
1st April 2015 - Rs.Nil) - Secured by
§ Security
- Pledge of a proportion of the shares of Mindtree Limited, Coffee Day Global Limited, Sical Logistics Limited held by the
Company;
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carries an interest rate of 13.75% p.a. payable quarterly
§ Any delay in repayment of interest entails payment of penal interest @ 24% p.a. for the period of delay.
§ The Company has an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company has an option to repay the loan in advance with a prepayment premium of 2% on the principal amount
outstanding as on the date of prepayment.
The loan is repayable by way of bullet repayment at the end of 36 months from the date of issue (i.e., 26 May 2018).
(viii) (b) From Aditya Birla Finance Limited [Principal amount of loan amounting to Rs.930 million (31st March 2016 Rs.930 million;
1st April 2015 - Rs.Nil) - Secured by
§ Security
- Pledge of a proportion of the shares of Mindtree Limited and Tanglin Developments Limited held by the Company;
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carries an interest rate of 12.50% p.a. payable quarterly
§ Any delay in repayment of interest entails payment of penal interest @ 24% p.a. for the period of delay.
§ The Company has an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company has an option to repay the loan in advance with a prepayment premium of 2% on the principal amount
outstanding as on the date of prepayment.
The loan is repayable by way of bullet repayment at the end of 36 months from the date of issue (i.e., 26 May 2018).
(ix) From Axis Bank Limited [Principal amount of loan amounting to Rs.1,000 million (31st March 2016: Rs.Nil; 1st April 2015 -
Rs.Nil) - Secured by
§ Security
- Pledge of Mindtree shares (55% of total security cover).
- Listed shares of Sical Logistics Ltd./ Lakshmi Vilas Bank/ CDEL/ any other listed entity acceptable to the lender (65% of
total security cover), held by promoter/ group covering 120% of exposure.
- Personal guarantee of Mr. V G Siddhartha
- Corporate guarantee of any entity pledging shares of Mindtree Ltd and Sical Logistics Ltd/ Lakshmi Vilas Bank/ CDEL/ any
other listed entity acceptable to the lender.
- Security cover by way of listed shares of at least 1.2x of the outstanding/ disbursed facility amount to be maintained
during the tenor of the loan on MTM basis.

FINANCIAL SECTION | 109

Notes to the financial statements for the year ended 31 March 2017
§ The interest rate for the loan is as follows:
- 1 year MCLR+ 1%(Spread) p.a, payable monthly (First three years)
- 1 year MCLR+ 1.75%(Spread) p.a, payable monthly (subject to minimum effective rate of interest of 10.65% p.a) (Post
three years)
§ The lender can exercise the call option at the end of three years
§ The Company has an option of voluntary prepayment with no penalty
§ The loan amount shal be repaid in 4 half yearly instalments beginning from 42nd month of first disbursement (i.e., 28 June
2020)
§ Amounts unpaid on due date will attract overdue interest at 2% p.a
(x) From Rabo India Finance Limited [Principal amount of loan amounting to Rs.Nil (31st March 2016: Rs.Nil; 1st April 2015 -
Rs.800 million) - Secured by
§ Security
- Pledged a proportion of the shares of Mindtree Limited, Coffee Day Global Limited and Tanglin Development Limited
held by the Company;
- Pledged a proportion of the shares of Sical Logistics Limited held by Tanglin Retail Reality Developments Private Limited;
- Exclusive charge over the charged assets of Tanglin Development Limited in favour of the lender;
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carried an interest rate of 13.20% p.a. payable quarterly
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.
§ The Company had an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company had an option to repay the loan in advance with a prepayment premium of 2% either on the date falling
on the expiry of 12 months from the availment date and every 3 months thereafter either in part or in full subject to a
minimum prepayment of Rs.200 million per installment or in multiples of 100 million.
§ The loan was repayable by way of bullet repayment at the end of 36 months from the date of issue (i.e., 11 July 2016).
§ This loan was pre-paid in the previous year ending 31st March 2016.
(xi) Zero coupon compulsorily convertible debentures of Rs.100 each issued to KKR Mauritius PE Investments II Limited -
The Company had issued Nil (31st March 2016: Nil; 1st April 2015: 27,160,000) zero coupon compulsorily convertible debentures
('CCDs') of Rs.100 each to KKR Mauritius PE Investments II Limited.
No interest shall be payable on the CCD's. However, in the event that the Company makes or declares any dividend to the
shareholders, the investor shall be entitled to receive the economic equivalent of the amount of dividend that the CCD's would
have been entitled to on a fully diluted basis by way of interest in the manner determined in the Agreement.
During the previous year, the Company had converted all of it's outstanding convertible securities to Equity Shares before filing
of the Red Herring Prospectus with the ROC. Accordingly, on May 8 2015, the Company had converted the CCPS's held by KKR
Mauritius PE Investments II Limited into 17,826,912 equity shares of Rs.10 each."
(xii) Compulsorily convertible debentures of Rs.100 each issued to Arduino Holdings Limited -
The Company had issued Nil (31st March 2016: Nil; 1st April 2015: 35,998,232) zero coupon compulsorily convertible debentures
('CCDs') of Rs.100 each to Arduino Holdings Limited ('Investor'). These CCDs upon issue had coupon rate of 7% for initial two
years, and at 3 months LIBOR plus 600 basis points for next three years.
Conversion - The investor can at any time prior to seventh anniversary (extendable up to ten years) of the issue of the CCDs
convert the same into equity shares such that post conversion, the total number of equity shares is determined to be at the
minimum of 10.71% of the equity capital of the Company on a fully diluted basis. The equity shares allotted on conversion of
the CCDs rank pari passu in all respect with the equity shares of the Company.
During the previous year, the Company had converted all of its outstanding convertible securities to Equity Shares before filing
of the Red Herring Prospectus with the ROC. Accordingly, on 8 May 2015, the Company has converted the CCPS's held by
Arduino Holdings Limited into 22,412,192 equity shares of Rs.10 each.

110 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
(xiii) Redeemable debentures in descending order of redemption:
(Rs. in million)
Particulars Manner of Earliest date of
conversion/ conversion /
redemption redemption
Fully paid secured rated redeemable non-convertible debentures held by ICICI Prudential Redemption 11th March 2019
Asset Management Company. (Refer note 16 (v))
Fully paid secured rated redeemable non-convertible debentures held by DSP Black Rock Redemption 25th October 2018
Income Opportunities Fund. (Refer note 16 (vi))
Fully paid secured rated redeemable non-convertible debentures held by Birla Sun Life. Redemption 26th April 2018/
(Refer note 16 (vii)) 11th May 2018
Fully paid secured rated redeemable non-convertible debentures held by ICICI Prudential Redemption 16th April 2017
Asset Management Company. (Refer note 19 (iii))
Fully paid secured rated redeemable non-convertible debentures held by ICICI Prudential Redemption 8th April 2017
Asset Management Company. (Refer note 19 (iv))
Fully paid secured rated redeemable non-convertible debentures held by Reliance Redemption 2017-2019
Mutual Fund. (Refer note (i))
(xiv) There are no continuing default in the repayment of the principal loan and interest amounts with respect to the above loans.
(xv) The aggregate amount of borrowing secured by personal guarantee of Director amounts to Rs.10,030 million (31st March 2016:
Rs.6,350 million; 1 April 2015: Rs.9,820 million).
B Current borrowings
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Secured:
Loan repayable on demand
- from other parties
- Tata Capital Limited (Refer Note below) - - 300.00
- - 300.00
Secured short-term borrowings from from Tata Capital Limited [Principal amount of loan outstanding amounting to Rs.Nil [31 March
2016- Rs.Nil; 1 April 2015- Rs.300 million]
§ Security
- Pledge of 1,583,711 equity shares of Coffee Day Enterprises Limited pledged by Mr. V.G. Siddhartha having value not less than 200%
of the facility amount.
- Mortgage of 6 acres residential land owned by Tanglin Developments Limited located at Mangalore.
- Personal guarantee of Mr. V.G Siddhartha
§ Any delay in repayment of dues under the agreement entails payment of penal interest @ 2% p.a. for the period of delay.
§ The loan was repayable in 12 months from the date of sanction, i.e; 16 December 2015. The same has been repaid during the year
ended 31 March 2016.
17 PROVISION
A Non-current provision
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Provision for employee benefits
- Gratuity [Refer Note 34] 5.36 4.59 3.98
5.36 4.59 3.98

B Current provision
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Provision for employee benefits
- Gratuity [Refer Note 34] - 0.24 0.27
- 0.24 0.27

FINANCIAL SECTION | 111

Notes to the financial statements for the year ended 31 March 2017
18 TRADE PAYABLES
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Trade payables 18.40 33.93 7.15
Trade payables to related parties (Refer note 33) 0.01 0.33 0.18
18.41 34.26 7.33
All trade payables are current
The Company's exposure to currency and liquidity risks related to trade payables is disclosed in note 36.
Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that
the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number
as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31st
March 2017 (31st March 2016: Nil; 1st April 2015 : Nil) has been made in the financial statements based on information received and
available with the Company. The Company has not received any claim for interest from any supplier under the said Act. Further in view
of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to
be material.
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
The principal amount and the interest due thereon remaining unpaid to any supplier
as at the end of each accounting year;
(a) (i) Principal - - -
(ii) Interest - - -
(b) The amount of interest paid by the Company in terms of Section 16 of the Micro,
Small and Medium Enterprises Development Act, 2006, along with the amounts
of the payment made to the supplier beyond the appointed day during the
year*;
(i) Interest - - -
(ii) Payment - - -
(c) The amount of interest due and payable for the period of delay in making - - -
payment (which have been paid but beyond the appointed day during the year)
but without adding the interest specified under the Micro, Small and Medium
Enterprises Development Act, 2006
(d) The amount of interest accrued and remaining unpaid at the end of the year - - -
(e) The amount of further interest remaining due and payable even in the - - -
succeeding years, until such date when the interest dues above are actually
paid to the small enterprise, for the purpose of disallowance of a deductible
expenditure under section 23 of the Micro, Small and Medium Enterprises
Development Act, 2006
* No interest has been paid by the Company during the year.

19 OTHER FINANCIAL LIABILITIES

A Other non-current financial liabilities
(Rs. in million)
Particulars As at As at As at
31st March 2017 31st March 2016 1st April 2015
Interest accrued but not due on borrowings 5.47 - -
5.47 - -

112 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
B Other current financial liabilities
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Current maturities of long-term debentures
Nil (31 March 2016: Nil, 1 April 2015: 600) secured rated redeemable non- - - 599.20
convertible debentures of Rs.1,000,000 each held by Aditya Birla Finance Limited
[Refer Note 19(i)]
Nil (31 March 2016: Nil, 1 April 2015: 750) secured rated redeemable non- - - 748.34
convertible debentures of Rs.1,000,000 each held by ICICI Prudential Asset
Management Company [Refer Note 19(ii)]
950 (31 March 2016: Nil, 1 April 2015: Nil) secured rated redeemable non- 949.87 - -
convertible debentures of Rs.1,000,000 each issued to ICICI Prudential Asset
Management Company [Refer Note 19(iii)]
800 (Previous year: Nil) secured rated redeemable non-convertible debentures 799.62 - -
of Rs.1,000,000 each issued to ICICI Prudential Asset Management Company
[Refer Note 19(iv)]
Nil (31 March 2016: 220, 1 April 2015: Nil) zero coupon secured rated redeemable - 423.84 -
non-convertible debentures of Rs.1,000,000 each held by Aditya Birla Private
Equity - Fund [Refer Note 16(iv)]
Nil (31 March 2016: 900, 1 April 2015: Nil) zero coupon secured rated redeemable - 898.49 -
non-convertible debentures of Rs.1,000,000 each issued to DSP BlackRock
Income Opportunities Fund [Refer Note 19(v)]
2,500 (31 March 2016: 2,500, 1 April 2015: 2,500) fully paid secured rated 652.03 277.78 -
redeemable non-convertible debentures of Rs.1,000,000 each issued to Reliance
Mutual Fund [Refer Note 16(i)]
Current maturities of long-term debt
- from other parties
- L & T Finance Limited [Refer Note 19(vi)(a) and 19(vi)(b)] - - 1,313.65
- Tata Capital Limited [Refer Note 19(vii)] - - 460.65
- Kotak Mahindra Prime Limited [Refer Note 19(viii)] - - 500.00
- Kotak Mahindra Investments Limited [Refer Note 19(ix)] - - 200.00
Nil (31 March 2016: Nil, 1 April 2015: 115,402) series A non-convertible - - 204.03
redeemable preference shares of Rs.10 each issued to Aten Portfolio Managers
Private Limited [Refer Note 19(x)]
Nil (31 March 2016: Nil, 1 April 2015: 167,404) series B non-convertible - - 508.31
redeemable preference shares of Rs.10 each issued to Aten Portfolio Managers
Private Limited [Refer Note 19(x)]
Nil (31 March 2016: Nil, 1 April 2015: 1,357,410) compulsorily convertible - - 2,399.90
preference shares of Rs.10 each issued to Standard Chartered Private Equity
(Mauritius) II Limited [Refer Note 19(xi)]
Interest accrued but not due on borrowings - 9.53 61.58
Financial guarantee obligation 10.40 14.77 3.36
Others
- accrued salaries and benefits 3.98 2.84 3.13
- creditors for expenses 0.10 50.35 1.04
- creditors for capital goods 0.50 0.60 0.70
2,416.50 1,678.20 7,003.89

(i) Zero coupon secured rated redeemable non-convertible debentures issued to Aditya Birla Private Equity - Fund I -
§ As at the year end, the paid up value of these debentures is Rs.Nil (31 March 2016 Rs.Nil; 1 April 2015: 600 million)]
§ Security
- Pledge of a proportion of the shares of Mindtree Limited and Coffee Day Global Limited held by the Company;
- Pledge of a proportion of the shares of Sical Logistics Limited held by Tanglin Retail Reality Developments Private Limited;
- Personal guarantee of Mr. V. G. Siddhartha.
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.

FINANCIAL SECTION | 113

Notes to the financial statements for the year ended 31 March 2017
§ These debentures carry fixed maturity interest rate of 14.75% p.a. payable quarterly.
§ The Company has an option of voluntary prepayment in certain circumstances. Further, the Company shall be entitled to
exercise the call option on either the date falling on the expiry of 15 months from the allotment date and every 3 months
thereafter either in partly or in full. Each debenture holder shall be entitled to exercise the put option on date falling on
the expiry of 15 months from the allotment date and every 3 months thereafter and require the Company to redeem the
debenture held by the said debenture holder, either in part or full.
These debentures are redeemable by way of bullet repayment at the end of 36 months from the date of issue (i.e., 31 May
2015).
§ During the year ended 31 March 2016, the Company voluntarily redeemed these debentures of Rs.1 million each
aggregating to Rs.600 million as per the terms set out in the agreement."
(ii) Secured rated redeemable non-convertible debentures issued to ICICI Prudential Asset Management Company -
§ As at the year end, the paid up value of these debentures is Rs.Nil [i.e., 750 secured rated redeemable non convertible
debentures of Rs.1 million each (31 March 2016: Nil; 1 April 2015: 750)]
§ Security
- Pledged a proportion of the shares of Mindtree Limited and Coffee Day Global Limited held by the Company;
- Pledged a proportion of the shares of Sical Logistics Limited held by Tanglin Retail Reality Developments Private Limited
- Personal guarantee of Mr. V. G. Siddhartha.
§ The loan carried an interest rate of 14.5% p.a.
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.
§ During the year ended 31 March 2016, the Company voluntarily redeemed these debentures of Rs.1,000,000 each
aggregating to Rs.750,000,000 as per the terms set out in the agreement.
(iii) Secured rated redeemable non-convertible debentures issued to ICICI Prudential Asset Management Company -
§ As at the year end the paid up value of these debentures is Rs.950 million [i.e, 950 secured rated redeemable non-
convertible debentures of Rs.1,000,000 each (31 March 2016: Nil; 1 April 2015: Nil)]
§ These debenturesc carry interest @ 13% p.a payable quarterly
§ Security
- Pledge of Mindtree shares equal to one time the principal amount with security cover being maintaned at all times
- Pledge of CDGL shares aggregate of which shall be equal to 1.5 times the face value of the debentures
- Personal guarantee of Mr. V. G. Siddhartha.
- Company shall at all points of time maintain in a account designated for this purpose amount equal to the cash coupons
payable by the Company in the financial quarter in which such date occurs.
§ The amount shall be paid on bullet repayment basis on the expiry of the term. (i.e; 16 April 2017)
§ Amounts unpaid on due date will attract overdue interest at 2% p.a over and above the cash coupon rate.
§ The Company can redeem such debentures before maturity by giving one day notice of the same.
(iv) Secured rated redeemable non-convertible debentures issued to ICICI Prudential Asset Management Company -
§ As at the year end the paid up value of these debentures is Rs.800 million [i.e, 800 secured rated redeemable non-
convertible debentures of Rs.1,000,000 each (31 March 2016: Rs.Nil; 1 April 2015: Rs.Nil)]
§ These debenturesc carry interest @ 13% p.a payable quarterly
§ Security
- Pledge of Mindtree shares equal to one time the principal amount with security cover being maintaned at all times
- Pledge of CDGL shares aggregate of which shall be equal to 1.5 times the face value of the debentures
- Personal guarantee of Mr. V. G. Siddhartha.
- Company shall at all points of time maintain in a account designated for this purpose amount equal to the cash coupons
payable by the Company in the financial quarter in which such date occurs.
§ The amount shall be paid on bullet repayment basis on the expiry of the term. (i.e; 8 April 2017)

114 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
§ Amounts unpaid on due date will attract overdue interest at 2% p.a over and above the cash coupon rate.
§ The Company can redeem such debentures before maturity by giving one day notice of the same.
(v) Zero coupon secured rated redeemable non-convertible debentures issued to DSP BlackRock Income Opportunities Fund-
§ As at the year end, the paid up value of these debentures is Nil [i.e., 900 secured rated redeemable non convertible
debentures of Rs.1 million each (31 March 2016: Rs.900 million; 1 April 2015: Rs.Nil)]
§ Security
- Pledged a proportion of the shares of Mindtree Limited and Tanglin Development Limited held by the Company
- Personal guarantee of Mr. V. G. Siddhartha.
§ Any delay in repayment of dues under the agreement entails payment of penal interest @ 2% p.a compounded monthly
for the period of delay.
§ These debentures were redeemable by way of bullet repayment at the end of 12 months and 6 days from the date of
allotment (i.e., 28 March 2017) at a premium of Rs.0.13 million per debenture.
§ During the current year, these debentures were redeemed at a premium of Rs.118.08 million
(vi) (a) From L & T Finance Limited [Principal amount of loan amounting to Rs.Nil (31 March 2016: Rs.Nil; 1 April 2015 -
Rs.1,000 million] Secured by-
§ Security
- Pledged a proportion of the shares of Mindtree Limited and Tanglin Development Limited held by the Company;
- Pledged a proportion of the shares of Sical Logistics Limited held by Tanglin Retail Reality Developments Private Limited;
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carried an interest rate of 14.5% p.a. internal rate of return.
§ Any delay in repayment of interest entails payment of penal interest @ 3% p.a. for the period of delay.
§ The Company had an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company has an option to repay the loan in advance with a prepayment premium of 2% either on the date falling
on the expiry of 12 months from the availment date and every 3 months thereafter either in part or in full subject to a
minimum prepayment of Rs.200 million per installment.
§ The loan was repayable by way of bullet repayment at the end of 24 months and 26 months from the date of issue (i.e., 25
December 2015 and 26 February 2016 respectively).
§ The Company had repaid the loan outstanding of Rs.1,000 million on 27 Nov 2015.
(vi) (b) From L & T Finance Limited [Principal amount of loan amounting to Rs.Nil (31 March 2016: Rs.Nil; 1 April 2015 - Rs.250
million)- Secured by
§ Security
- Pledged a proportion of the shares of Mindtree Limited and Coffee Day Global Limited held by the Company;
- Pledged a proportion of the shares of Sical Logistics Limited held by Tanglin Retail Reality Developments Private Limited;
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carried an interest rate of 13.75% p.a. Internal rate of return.
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a. for the period of delay.
§ The Company had an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company has an option to repay the loan in advance with a prepayment premium of 2% either on the date falling
on the expiry of 12 months from the availment date and every 3 months thereafter either in part or in full subject to a
minimum prepayment of Rs.500 million per installment.
The loan was repayable by way of bullet repayment at the end of 36 months from the date of issue (i.e., 1 May 2015).
§ The Company had repaid the loan outstanding of Rs.250 million on 5 May 2015.
(vii) From Tata Capital Limited [Principal amount of loan outstanding amounting to Rs.Nil (31 March 2016: Rs.Nil; 1 April 2015
- Rs.420 million classified under current maturities of long-term debt) - Secured by
§ Security
- Pledged a proportion of the shares of the Company having value not less than 200% of facility amount i.e. Rs.2,800
million held by promoters of the Company;

FINANCIAL SECTION | 115

Notes to the financial statements for the year ended 31 March 2017
- Equitable mortgage having value not less than Rs.350 million in the form of land and property (i.e., 25% of the loan
facility) of its subsidiary Tanglin Development Limited;
- unconditional and irrevocable personal guarantee of Mr. V. G. Siddhartha.
§ The loan carried an interest rate of 15% internal rate of return over the period of the loan.
§ Any delay in repayment of interest entails payment of penal interest @ 3% p.a. for the period of delay.
§ The Company had an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company has an option to repay the loan in advance with a prepayment premium of 2% payable on the outstanding
principal amount.
The loan was repayable in quarterly installments with first installment falling due on 15 October 2012 and last installment
on 15 July 2015.
§ The Company had repaid the loan outstanding of Rs.420 million on 11 September 2015.
(viii) From Kotak Mahindra Prime Limited [Principal amount of loan amounting to Rs.Nil (31 March 2016: Rs.Nil; 1 April 2015 -
Rs.500 million)- Secured by
§ Security
- Pledged a proportion of shares of Mindtree Limited as acceptable by Kotak Mahindra Prime Limited (drawing power
capped at 25 crores)
- Pledge of 159,804 shares of Coffee Day Enterprises Limited (drawing power capped at 25 crores)
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carried an interest rate of 15% p.a. compounded monthly.
§ The Company had an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company has an option to repay the loan in advance with a prepayment premium of 2%.
§ Amounts unpaid on due date will attract overdue interest at 24% p.a compounded monthly
§ The loan was repayable at the end of 60 months from the date of issue.
§ The Company had prepaid the loan outstanding of Rs.500 million on 9 November 2015.
(ix) From Kotak Mahindra Investments Limited [Principal amount of loan amounting to Rs.Nil (31 March 2016: Rs.Nil; 1 April
2015 - Rs.200 million)- Secured by
§ Security
- Pledged a proportion of shares of Mindtree Limited as acceptable by KMPL (drawing power capped at Rs.100 million)
- Pledge of 864,920 shares of Coffee Day Global Limited (drawing power capped at Rs.100 million)
- Pledged a proportion of shares of Sical Logistics Ltd towards additional security for the limit of Rs.100 million (against
Mindtree shares)
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carried an interest rate of 15% p.a. which should be debited to the loan account of the borrower.
§ The Company had an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further,
the Company has an option to repay the loan in advance with a prepayment premium of 2%.
§ Amounts unpaid on due date will attract overdue interest at 24% p.a compounded monthly
§ The loan is repayable at the end of 60 months from the date of issue.
§ The Company had prepaid the loan outstanding of Rs.200 million on 9 November 2015.
(x) Non-convertible redeemable preference shares
The Company had issued 115,402 Series A non-cumulative redeemable preference shares ('NCRPS') of Rs.10 each and 167,404
Series B NCRPS of Rs.10 each, at a premium of Rs.1,758 per share to Aten Portfolio Managers Private Limited. The holders of
Series A and Series B NCRPS shall be entitled to a non-cumulative preferred dividend calculated at the rate of 0.001% on the
NCRPS amounts on a quarterly basis, which shall be payable, if declared by the Company.
Redemption - All NCRPS shall be redeemed on the redemption date, being 36 months from first closing date i.e. 27 April 2012
or the trigger date whichever is earlier. Series A NCRPS shall be redeemed on the redemption date at an amount calculated

116 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
by multiplying the Series A investment amount with the amounts provided in Part A of Schedule II of shareholders agreement
resulting in a redemption premium of Rs.13.47 million. Series B NCRPS shall be redeemed on the redemption date at an
amount equivalent to Rs.50 crores resulting in a redemption premium of Rs.204.03 million. In the event redemption of the
Series A NCRPS occurs at anytime prior to the redemption date, then the aggregate redemption amount for the Series A NCRPS
and Series B NCRPS shall be equivalent to sum of the investment amount and the charges calculated at the rate of 14.5% per
annum on the investment amount from the previous Series A put option date on which the put option has been exercised by
the investor till the date of redemption.
NCRPS carry a call option on the earlier of the date of expiry of 18 months from the first closing date and thereafter on the
date falling on expiry of every six months from the call option trigger date or the date on which the investors issues the notice
for indemnification. The Promoter shall have the right but not an obligation to call upon the investor to transfer the investor
securities to the Promoter, subject to the conditions as defined in the Share Subscription Agreement. The investor at any time
after expiry of period of 24 months from the investment date or the occurrence of the trigger event as defined in the put
option agreement whichever is earlier, at its sole option shall have the right but not the obligation to issue a notice to the
purchaser pursuant to which the investor shall require the purchaser to purchase, at the investor's put option price, all of the
investor securities held by the investor in the Company on such date and as indicated in the investor put option notice on the
put option settlement date.
Liquidation preference - The investor shall have a right to receive the entire Series A and Series B redemption amount and shall
rank pari passu with the right of the other holders of securities in the Company upon the occurrence of a liquidation event.
The Company vide Board Resolution dated 12 May 2015 redeemed 115,402 Series A non-convertible redeemable preference
shares of Rs.10 each and 167,404 Series B non-convertible redeemable preference shares of Rs.10 each at an aggregate sum of
Rs.719.29 million which included a redemption premium of Rs.716.47 million.
(xi) Compulsorily convertible preference shares
The Company had issued 1,357,410 non-cumulative compulsorily convertible preference shares ('CCPS') of Rs.10 each at a
premium of Rs.1,758.07 per share to Standard Chartered Private Equity (Mauritius) II Limited. These CCPS carry a dividend rate
of 0.001% p.a. In case of Company declaring any dividend on its equity shares, shareholder of CCPS will also be eligible for
economic equivalent of preference dividend on a fully dilutive basis.
During the year ended 31 March 2016, the Company has converted all of its outstanding convertible securities to Equity Shares
before filing of the Red Herring Prospectus with the Registrar of Companies (RoC). Accordingly, on 28 September 2015, the
Company has converted the CCPS's held by Standard Chartered Private Equity (Mauritius) II Limited into 13,969,232 equity
shares of Rs.10 each.
(xii) There are no continuing default in the repayment of the principal loan and interest amounts with respectto the above
loans.
(xiii) Refer 16(xv) for the aggregate amount of borrowing secured by personal guarantee of Director.

20 OTHER CURRENT LIABILITIES

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Statutory dues 2.78 7.51 15.51
Others
- Advance from customers 7.63 6.06 2.99
10.41 13.57 18.50

21 REVENUE FROM OPERATIONS

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Sale of products
- Sale of coffee beans 414.12 217.17
- Sale of food, beverages and other items 27.05 22.48
- Sale of merchandise items 0.28 0.37
Sale of services
- Income from hospitality services 101.91 92.15
- Income from consultancy services 18.00 -

FINANCIAL SECTION | 117

Notes to the financial statements for the year ended 31 March 2017
21 REVENUE FROM OPERATIONS (contd.)
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Other operating revenue
- Dividend income 178.37 189.60
- Commission income - 9.64
- Interest income on loans given to subsidiary 266.00 -
Less: sales tax (24.98) (14.15)
Less: luxury tax (6.43) (6.00)
Less: service tax (9.73) (8.17)
964.59 503.09

22 OTHER INCOME
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Interest income
- Bank deposits 10.82 98.85
- Income tax refund 5.97 1.23
- Miscellaneous income 1.79 1.37
18.58 101.45

23 EMPLOYEE BENEFITS EXPENSE

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Salaries and wages 64.78 56.32
Contribution to provident and other funds 2.01 1.65
Staff welfare expenses 0.23 1.15
67.02 59.12

24 FINANCE COSTS
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Interest expense 1,225.16 1,677.71
1,225.16 1,677.71

25 DEPRECIATION AND AMORTIZATION EXPENSE

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Depreciation of property, plant and equipment (Refer note 4) 5.00 4.64
Amortization of intangible assets (Refer note 5) 0.05 0.04
5.05 4.68

26 OTHER EXPENSES
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Advertisement expenses 12.16 96.31
Legal and professional fees (Refer note 29) 20.93 17.05
Rates and taxes 14.20 10.62
Food, beverages and other consumables 12.61 9.64
Power and fuel 6.23 7.19
Rent (Refer note 31) 5.06 4.71
Director sitting fee 2.28 5.29

118 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
26 OTHER EXPENSES (contd.)
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Repairs and maintenance
- Others 5.85 5.48
- Machinery 1.46 1.63
- Buildings 0.89 0.47
Travelling and conveyance 2.52 1.43
Insurance 1.05 1.02
Communication expenses 0.47 0.56
Printing and stationery 1.78 0.46
Freight and handling charges 0.31 0.17
Miscellaneous expenses 1.13 1.44
88.93 163.47

27 TAX EXPENSES
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profit will
be available against which the Company can use the benefits therefrom:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Carry forward of business losses 3,712.10 1,902.09
Potential tax benefit @ 33% * 1,224.99 627.69
*The deductible temporary differences do not expire under current tax legislation.

28 CONTINGENT LIABILITIES, COMMITMENTS AND CONTINGENT ASSETS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Contingent liabilities:
Corporate guarantee given for loan taken by group companies - - 300.00
Investments pledged for loan taken by a subsidiary 5,660.11 5,193.70 1,126.45
Commitments:
Other commitments towards advertisement contract entered by the - - 50.00
Company

Reconciliation of guarantees given as at the beginning and as at the end of the year:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Given to:
Way2Wealth Securities Private Limited
At the commencement of the year - 300.00 300.00
Given during the year - - -
Reduced during the year - (300.00) -
At the end of the year - - 300.00
Coffee Day Global Limited
At the commencement of the year - - 268.30
Given during the year - - -
Reduced during the year - - (268.30)
At the end of the year - - -

FINANCIAL SECTION | 119

Notes to the financial statements for the year ended 31 March 2017
28 CONTINGENT LIABILITIES, COMMITMENTS AND CONTINGENT ASSETS (contd.)

Reconciliation of investments pledged as at the beginning and as at the end of the year:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Given to:
Tanglin Retail Reality Developments Private Limited
At the commencement of the year 1,776.30 1,000.00 1,000.00
Given during the year 500.00 1,026.30 -
Reduced during the year (907.40) (250.00) -
At the end of the year 1,368.90 1,776.30 1,000.00
Tanglin Development Limited
At the commencement of the year 1,750.10 126.45 126.45
Given during the year 2,332.46 1,750.10 -
Reduced during the year (1,127.72) (126.45) -
At the end of the year 2,954.84 1,750.10 126.45
SICAL Logistics Limited
At the commencement of the year 1,167.30 - -
Given during the year - 1,167.30 -
Reduced during the year (697.30) - -
At the end of the year 470.00 1,167.30 -
Coffee Day Hotels and Resorts Private Limited
At the commencement of the year - - -
Given during the year 366.37 - -
Reduced during the year - - -
At the end of the year 366.37 - -
Way2Wealth Securities Private Limited
At the commencement of the year 500.00 - -
Given during the year - 500.00 -
Reduced during the year - - -
At the end of the year 500.00 500.00 -

29 AUDITOR'S REMUNERATION (INCLUDED IN LEGAL AND PROFESSIONAL FEES AND EXCLUDES SERVICE TAX)
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
As auditor
- for statutory audit 1.20 1.20 0.70
- limited reviews 1.50 1.50 -
- for other services* - 24.55 -
Reimbursement of expenses 0.02 0.02 0.02
2.72 27.27 0.72
* The amount pertains to IPO fees paid which is debited to the securities premium account during the previous year ended 31 March
2016.

30 LOSS PER SHARE

(i) Loss attributable to equity shareholders (basic and diluted):
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Loss for the year, attributable to the equity holders (795.76) (1,507.18)

120 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
30 LOSS PER SHARE
(ii) Weighted average number of equity shares (basic and diluted):
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Number of equity shares at the beginning of the year (Refer note 14) 206,001,719 14,591,551
Add: Weighted average number of equity shares issued during the year - 42,492,521
Number of weighted average equity shares considered for calculation of basic 206,001,719 57,084,072
earnings per share
Add: Bonus shares issued after the balance sheet date - 102,140,857
Number of weighted average equity shares considered for calculation of 206,001,719 159,224,929
diluted earnings per share
* In accordance with Ind AS 33 on 'Earnings Per Share', basic and diluted earnings per share is adjusted for 1:7 bonus issue for
previous period presented.
** As the effect of conversion of compulsorily convertible preference shares and compulsorily convertible debentures are anti-
dilutive, dilutive effect for the previous year have been considered as Nil.

(iii) Loss per share:

- Basic (3.86) (9.47)
- Diluted (3.86) (9.47)

31 LEASES
The Company leases land for operating resort under non-cancellable operating lease agreement. The Company intends to renew
such lease in the normal course of its business. Total rental expense under non-cancellable operating lease was Rs.4.90 million
(Previous year: Rs.4.55 million).
The future minimum lease payments under non-cancellable operating leases inaggregate are as follows:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Not later than 1 year 5.01 4.77 4.54
Later than 1 year and not later than 5 years 22.67 21.59 18.12
More than 5 years 85.49 91.57 99.82

The Company leases office premises and staff quarters under cancellable operating lease agreements. The Company intends to
renew such leases in the normal course of its business. Total rental expense under cancellable operating leases was Rs.0.16 million
(Previous year: Rs.0.16 million).

32 SEGMENT INFORMATION
A Basis for segmentation
Based on the ""management approach"" as defined in Ind AS 108 - Operating Segments, Managing Director of the Company
has been identified as the Chief Operating Decision Maker (CODM). The Chief Operating Decision Maker evaluates the
Company's performance and allocates resources based on an analysis of various performance indicators by business segments.
Accordingly, information has been presented along these business segments viz. Coffee trading, Hospitality and Investment
operations as its operating segments.
The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and
expenditure in individual segments, and are as set out in the significant policies.
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 unallocated. Unallocable expenses comprises of certain other corporate costs.
The following summary describes the operations in each of the Company's reportable segments:

Reportable segments Operations

Coffee trading Trading of coffee beans
Hospitality Operation and maintenance of resort
Investment operations Investment in subsidiaries and Management consultancyservices

FINANCIAL SECTION | 121

Notes to the financial statements for the year ended 31 March 2017
32 SEGMENT INFORMATION (contd.)
B Information about reportable segments
(i) Segment Revenue:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Coffee trading 414.12 217.17
Hospitality 129.24 115.00
Investment operations 462.37 199.24
Total segment revenue 1,005.73 531.41
Reconciling items:
- taxes (41.14) (28.32)
Total revenue as per statement of profit and loss 964.59 503.09

(ii)
Segment Results:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Coffee trading 1.41 0.41
Hospitality 29.02 17.80
Investment operations 403.35 154.41
Total segment results 433.78 172.62
Reconciling items:
- finance cost (1,225.16) (1,677.71)
- depreciation (5.05) (4.68)
- other unallocable expenses (18.29) (99.18)
- other income 18.58 101.45
Loss before tax as per statement of profit and loss (796.14) (1,507.50)
Income tax expense - -
Loss after tax as per statement of profit and loss (796.14) (1,507.50)
Revenue from major products and services
The Company's revenue from continuing operations from its major products or services are as follows:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Sale of coffee beans 414.12 217.17
Sale of food, beverages and other items 27.05 22.48
Income from hospitality services 102.19 92.52
C Geographical information
The Company's operations are based only in India. Hence all of the revenues and the non current assets of the Company are
located in India.
D Major Customer
Revenue from two parties of the Company's Investment operations segment is Rs.444.37 million (Previous year: 199.24 million)
which is more than 10% of the Company's total revenue.
Revenue from one Customer of the Company's coffee trading segment is Rs.283.33 million (Previous year: Nil) which is more
than 10%of the Company's total revenue.

33 RELATED PARTY TRANSACTIONS

A. Enterprises where control exists:
- The related parties where control exists include subsidiaries, associates and joint ventures as referred in Note 1
B. Key management personnel
Executive key management personnel represented on the Board of the Company are -
- Mr. V.G. Siddhartha
- Mr. Sadananda Poojary
- Mr. R. Ram Mohan

122 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
33 RELATED PARTY TRANSACTIONS (contd.)
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
C. The aggreate value of the Company's transactions and outstanding balances relating to key management personnel and
entities over which they have control or significant influence is as follows:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Significant transactions with entities where control exists -
Services rendered (Income from hospitality):
- Karnataka Wildlife Resorts Private Limited 19.30 16.86
Rent paid:
- Coffee Day Global Limited 0.10 0.10
Loans given to:
- Tanglin Developments Limited 8,838.01 5,858.12
- Coffee Day Hotels and Resorts Private Limited 2,911.69 2,603.20
Interest income:
- Tanglin Developments limited 266.03 -
Sale of coffee beans:
- Sampigehutty Estates Private Limited 268.56 -
Purchase of consumables:
- Coffee Day Global Limited 0.80 0.26
- Amalgamated Holdings Limited 0.08 0.07
Loans recovered from:
- Tanglin Developments Limited 6,506.63 5,105.84
- Coffee Day Hotels and Resorts Private Limited 3,286.79 2,635.09
- Coffee Day Global Limited - 0.51
Significant transactions with entities where significant influence exists -
Dividend income:
Mindtree Limited 174.62 183.35
Consultancy services:
- Magnasoft Consulting India Pvt Ltd 18.00 -

D. The following is a summary of balances receivable from and payable to related parties:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Long-term loans and advances recoverable:*
-Tanglin Developments Limited 6,073.60 3,742.28 2,990.01
- Coffee Day Hotels and Resorts Private Limited 1,070.29 1,434.09 1,465.97
Trade payables:
- Mysore Amalgamated Coffee Estates Limited - - 0.18
- Coffee Day Global Limited - 0.26 -
- Amalgamated Holdings Limited 0.01 0.07 -
Trade receivables:
- Karnataka Wildlife Resorts Private Limited 1.53 1.14 1.05
- Tanglin Developments Limited 266.03 0.38 -
- Mysore Amalgamated Coffee Estates Limited - 0.66 0.66
- Magnasoft Consulting India Pvt Ltd 18.00 - -
- SICAL Logistics Ltd 0.13 - -
- Coffee Day Global Ltd 0.37 - -
Advances recoverable in cash or in kind- short term
- Coffee Day Hotels and Resorts Private Limited - 11.31 8.20
* Details of inter- corporate loans given

FINANCIAL SECTION | 123

Notes to the financial statements for the year ended 31 March 2017
(a) Terms and conditions on which inter-corporate loans have been given:
Party name Nature of Interest rate Repayment Purpose
relationship terms
Tanglin Developments Limited Subsidiary 10% p.a** On demand General
Coffee Day Hotels and Resorts Private Limited Subsidiary 0% p.a* On demand General
* Section 186 (7) of the Companies Act, 2013 ('the Act') states that no loan shall be given at a rate of interest lower than the
prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan. However,
section 186 (11) of the Act grants exemption from application of Section 186 of the Act, to loans made by companies
engaged in the business of providing infrastructure facilities. Schedule VI of the Act has defined infrastructure facilities to
include tourism, including hotels, convention centers and entertainment centres. Since, the Company is in the business
of operating resorts, it has obtained a opinion that it is exempt from the provisions of Section 186 of the Act. Accordingly,
the Company has not charged interest in relation to loan provided to its wholly owned subsidiary.
** However, the Company has charged interest on loans given to Tanglin Developments Limited @ 10% with effect from
1 April 2016.
(b) Reconciliation of inter-company loans and advances given as at the beginning and as at the end of the year:
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
(i) Tanglin Developments Limited
At the commencement of the year 3,742.29 2,990.01
Add: Given during the year 8,838.01 5,858.12
Less: Repaid during the year (6,506.63) (5,105.84)
At the end of the year 6,073.67 3,742.29
(ii) Coffee Day Hotels and Resorts Private Limited-Long Term
At the commencement of the year 1,434.08 1,465.97
Add: Given during the year 2,911.69 2,603.20
Less: Repaid during the year (3,275.48) (2,635.09)
At the end of the year 1,070.29 1,434.08
(iii) Coffee Day Hotels and Resorts Private Limited-Short Term
At the commencement of the year 11.31 8.21
Add: Given during the year - 3.10
Less: Repaid during the year (11.31) -
At the end of the year - 11.31
E. Compensation of key management personnel of the Company:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Short-term employee benefits 4.05 -
4.05 -
The remuneration of directors and key executives is determined by the remuneration committee having regard to the
performance of individuals and market trends. Post employment benefit comprising gratuity and compensated absences are
not disclosed as these are determined for the Company as a whole.
F. Terms and conditions
All transactions and outstanding balances with these related parties are priced on an arm’s length basis and are to be settled
within the credit period allowed as per the policy. None of the balances are secured.

124 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
34 EMPLOYEE BENEFITS OBLIGATIONS
A Reconciliation of the net defined benefit liability
Reconciliation of the projected benefit obligations
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Change in projected benefit obligation:
Obligations at the beginning of the year 4.82 4.25
Included in profit and loss:
- Service cost 0.91 0.85
- Interest cost 0.37 0.33
Included in other comprehensive income:
- Remeasurement (gains)/ losses in other comprehensive income:
- Actuarial (gains)/ losses arising from changes in demographic assumptions - -
- Actuarial (gains)/ losses arising from changes in financial assumptions 0.45 (0.03)
- Actuarial (gains)/ losses arising from experience adjustments (0.82) (0.29)
Benefits settled (0.35) (0.29)
Past service cost
Obligations at year end 5.38 4.82
Change in plan assets:
Plans assets at the beginning of the year, at fair value - -
Plan assets acquired on acquisition during the year - -
Included in profit and loss:
- Interest income - -
Included in other comprehensive income:
- Expected return on plan assets - -
- Actuarial (loss)/gain - -
Contributions 0.37 0.29
Benefits settled (0.35) (0.29)
Plans assets at year end, at fair value 0.02 -
Liability recognised in the balance sheet 5.36 4.82
Non current 5.36 4.59
Current - 0.24

B Expense recognised in the statement of profit and loss and other comprehensive income:
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Gratuity cost for the year
Included in profit and loss:
- Service cost 0.91 0.85
- Interest cost 0.37 0.33
Included in other comprehensive income:
- Remeasurement (gains)/ losses in other comprehensive income:
- Actuarial (gains)/ losses arising from changes in demographic assumptions - -
- Actuarial losses/ (gains) arising from changes in financial assumptions 0.45 (0.03)
- Actuarial gains arising from experience adjustments (0.82) (0.29)
Net gratuity cost 0.91 0.86
C Defined benefit obligation

Particulars As at As at
31 March 2017 31 March 2016
(i) Assumptions
Interest rate 7.20% 7.95%
Expected rate of return on plan assets 8.00% 8.00%
Salary increase 8.00% 8.00%
Retirement age 60 years 60 years
Attrition rate 2-10% based on the age group 2-10% based on the age group
Mortality table IALM (2006-08) IALM (2006-08)

FINANCIAL SECTION | 125

Notes to the financial statements for the year ended 31 March 2017
34 EMPLOYEE BENEFITS OBLIGATIONS (contd.)
The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and
other relevant factors such as supply and demand factors in the employment market.
Assumptions regarding future mortality have been based on published statistics and mortality tables. The current longevities
underlying the values of the defined benefit obligation at the reporting date were as follows.
(ii) Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation by the amounts shown below.
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Increase Decrease Increase Decrease
Discount rate (0.50% movement) (0.31) 0.34 (0.28) 0.31
Future salary growth (0.50% movement) 0.30 (0.27) 0.26 (0.24)
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an
approximation of the sensitivity of the assumptions shown.
35 During the year 31 March 2016, the Company had 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 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).
Details of utilisation of proceeds of IPO are as follows:
(Rs. in million)
Objects of the issue as per the prospectus To be utilised as per Actual utilisation as Unutilised amount
the objectives per the objectives as at 31 March 2017
Financing coffee businesses 2,875.10 2,875.10 -
Repayment or prepayment of loans 6,328.00 6,328.00 -
General corporate purposes 1,535.53 1,535.53 -
Total 10,738.63 10,738.63 -
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.
The amount of Rs.1,641 million lying unutilised as at 31 March 2016 has been entirely utilised by the Company towards repayment/
prepayment of loan and financing of coffee business during the year ended 31 March 2017.

36 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT

A Accounting classification and fair value
(Rs. in million)
Particulars Carrying value Fair Value
As at Level 1 Level 2 Level 3 Total
31 March 2017
Financial assets measured at amortised cost:
Loans (current and non current) 7,150.75 - - - -
Other financial assets (current and non current) 0.08 - - - -
Trade receivables 286.79 - - - -
Cash and cash equivalents 7.71 - - - -
Bank balances other than cash and cash equivalents 203.30 - - - -
Total 7,648.63 - - - -
Financial liabilities measured at amortised cost:
Borrowings (current and non current) 7,204.22 - - 9,944.33 9,944.33
Trade payables 18.41 - - - -
Other financial liabilities (current and non current) 2,421.97 - - - -
Total 9,644.60 - - 9,944.33 9,944.33

126 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
The Company has not disclosed the fair values for financial instruments for loans (current and non current), other financial assets
(current and non current) , trade receivables, cash and cash equivalents and bank balances other than cash and cash equivalents,
Trade payables, other financial liabilities (current and non current) because their carrying amounts are reasonably approximation
of fair value. Investment in equity shares are not appearing as financial asset in the table above being investment in subsidiaries
accounted under Ind AS 27, Separate Financial Statements is scoped out under Ind AS 109.
(Rs. in million)
Particulars Carrying value Fair Value
As at Level 1 Level 2 Level 3 Total
31 March 2016
Financial assets measured at amortised cost:
Loans (current and non current) 5,225.77 - - - -
Other financial assets (current and non current) 41.65 - - - -
Trade receivables 4.53 - - - -
Cash and cash equivalents 480.24 - - - -
Bank balances other than cash and cash equivalents 88.95 - - - -
Total 5,841.14 - - - -
Financial liabilities measured at amortised cost:
Borrowings (current and non current) 5,321.86 - - 7,100.71 7,100.71
Trade payables 34.26 - - - -
Other financial liabilities (current and non current) 1,678.20 - - - -
Total 7,034.32 - - 7,100.71 7,100.71
The Company has not disclosed the fair values for financial instruments for loans (current and non current), other financial assets
(current and non current) , trade receivables, cash and cash equivalents and bank balances other than cash and cash equivalents,
Trade payables, other financial liabilities (current and non current) because their carrying amounts are reasonably approximation
of fair value. Investment in equity shares are not appearing as financial asset in the table above being investment in subsidiaries
accounted under Ind AS 27, Separate Financial Statements is scoped out under Ind AS 109.
A Accounting classification and fair value (continued)
(Rs. in million)
Particulars Carrying value Fair Value
As at Level 1 Level 2 Level 3 Total
1 April 2015
Financial assets measured at amortised cost:
Loans (current and non current) 4,470.12 - - - -
Other financial assets (current and non current) 186.50 - - - -
Trade receivables 2.94 - - - -
Cash and cash equivalents 6.60 - - - -
Bank balances other than cash and cash equivalents - - - - -
Total 4,666.16 - - - -
Financial liabilities measured at amortised cost:
Borrowings (current and non current) 12,879.92 - - 10,263.74 10,263.74
Trade payables 7.33 - - - -
Other financial liabilities (current and non current) 7,003.89 - - - -
Total 19,891.14 - - 10,263.74 10,263.74
The Company has not disclosed the fair values for financial instruments for loans (current and non current), other financial assets
(current and non current) , trade receivables, cash and cash equivalents and bank balances other than cash and cash equivalents,
Trade payables, other financial liabilities (current and non current) because their carrying amounts are reasonably approximation
of fair value. Investment in equity shares are not appearing as financial asset in the table above being investment in subsidiaries
accounted under Ind AS 27, Separate Financial Statements is scoped out under Ind AS 109.
Fair value hierarchy
Fair value hierarchy explains the judgement and estimates made in determining the fair values of the financial instruments that are-
a) recognised and measured at fair value
b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial
instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the
table:

FINANCIAL SECTION | 127

Notes to the financial statements for the year ended 31 March 2017
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments,
traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded
in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing
NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as
possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is
the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
B Measurement of fair values
(i) Valuation techniques and significant unobservable inputs
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and
assumptions were used to estimate the fair values:
- The fair values of the Company’s interest-bearing debentures and loans are determined by using DCF method using
discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance risk
as at 31 March 2017 and 31 March 2016 was assessed to be insignificant.
The following tables show the valuation techniques used in measuring Level 3 fair values. The significant unobservable
inputs used have not been disclosed as no financial assets and liabilities have been measured at fair value:
Financial instruments measured at fair value
(Rs. in million)
Type Valuation Significant Inter relationship
technique unobservable between significant
inputs unobservable inputs and
fair value measurement
Borrowings Discounted cash flows: The valuation model Not applicable Not applicable
considers the present value of expected
payment, discounted using a risk-adjusted
discount rate.
C Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (b));
- liquidity risk (see (c)); and
- market risk (see (d)).
(a) Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Company’s risk management policies are established to identify and analyse the risks
faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s
activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined
and constructive control environment in which all employees understand their roles and obligations.
Board oversees how management monitors compliance with the Company’s risk management policies and procedures,
and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. Board
is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk
management controls and procedures, the results of which are reported to the Audit Committee.
(b)
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company's receivables from customers; loans and investments
in debt securities.
The carrying amounts of financial assets represent the maximum credit risk exposure.

128 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
i) Trade receivables:
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default risk
associated with the industry and country in which customers operate.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase
in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default
as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially
the following indicators are incorporated:
∞ internal credit rating
∞ actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a
significant change to the borrower’s ability to meet its obligations
∞ actual or expected significant changes in the operating results of the borrower
∞ significant changes in the expected performance and behavior of the borrower, including changes in the payment status
of borrowers in the Company and changes in the operating results of the borrower
Based on the above analysis, the Company does not expect any credit risk from its trade receivables for any of the years
reported in this financial statements.
ii) Loans, security deposits and investments:
Expected credit loss for loans, security deposits and investments
(Rs. in million)
Particulars Period Asset Estimated Expected Expected Carrying
ended group gross carrying probability of credit losses amount, net
amount at default of impairment
default provision
Loss allowance Financial assets for 31-Mar-17 Loans 7,147.94 0% - 7,147.94
measured at 12 which credit risk has not Security 2.81 0% - 2.81
month expected increased significantly deposits
credit loss since initial recognition
Loss allowance Financial assets for 31-Mar-16 Loans 5,192.96 0% - 5,192.96
measured at 12 which credit risk has not Security 32.81 0% - 32.81
month expected increased significantly deposits
credit loss since initial recognition
Loss allowance Financial assets for 1-Apr-15 Loans 4,467.31 0% - 4,467.31
measured at 12 which credit risk has not Security 2.81 0% - 2.81
month expected increased significantly deposits
credit loss since initial recognition

(c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company uses
activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimising
its cash return on investments.
Maturities of financial liabilities
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted contractual cash flow, and include contractual interest payments and exclude the impact of netting agreements.
(Rs. in million)
As at 31 March 2017 Carrying Total 6 months 6–12 1–2 years 2–5 years More than
amount or less months 5 years
Non-derivative financial liabilities
Secured bank loans 2,448.65 3,285.37 149.28 149.05 1,678.50 1,308.54 -
Non-convertible redeemable 7,157.09 8,243.78 2,153.08 2,204.15 3,886.55 - -
debentures
Trade payables 18.41 18.41 18.41 - - - -
9,624.15 11,547.56 2,320.77 2,353.20 1,308.54 - -

FINANCIAL SECTION | 129

Notes to the financial statements for the year ended 31 March 2017
(Rs. in million)
As at 31 March 2016 Carrying Total 6 months 6–12 1–2 years 2–5 years More than
amount or less months 5 years
Secured bank loans 1,521.08 1,979.29 99.97 99.74 199.71 1,579.87 -
Non-convertible redeemable 5,400.89 6,761.11 167.28 1,989.33 2,957.53 1,646.97 -
debentures
Trade payables 34.26 34.26 34.26 - - - -
6,956.23 8,774.66 301.51 2,089.07 3,157.24 3,226.84 -

(Rs. in million)
As at 1 April 2015 Carrying Total 6 months 6–12 1–2 years 2–5 years More than
amount or less months 5 years
Secured bank loans 3,269.93 3,620.33 891.23 1,902.70 826.40 - -
Redeemable preference shares 712.34 712.34 712.34 - - - -
Non-convertible redeemable 6,816.01 9,026.08 818.69 204.14 4,770.37 3,232.88 -
debentures
Trade payables 7.33 7.33 7.33 - - - -
10,805.61 13,366.08 2,429.59 2,106.84 5,596.77 3,232.88 -

(d) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will
affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters, while optimising the return.
i) Currency risk
The Company is not exposed to any currency risk. The currencies in which these transactions are denominated is Rs.
ii) Interest rate risk
The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company
to cash flow interest rate risk. The Company adopts a policy of ensuring that between 80% and 90% of its interest rate
risk exposure is at a fixed rate. This is achieved partly by entering into fixed‑rate instruments and partly by borrowing at a
floating rate.
Exposure to interest rate risk
The interest rate profile of the Company's interest-bearing financial instruments as reported to management is as follows:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Fixed rate instruments
Financial liabilities 8,683.38 6,921.97 10,085.94
Variable rate instruments
Financial liabilities 922.36 - -
Sensitivity analysis
Fair value sensitivity analysis for fixed-rate instruments
Fair value sensitivity analysis for fixed-rate instruments A reasonably possible change of 100 basis points in interest rates at the
reporting date would have increased or decreased profit or loss by Rs.109.32 million (2015-16: Rs.81.35 million). This analysis
assumes that all other variables, in particular foreign currency exchange rates, remain constant.
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange
rates, remain constant.
(Rs. in million)
Particulars Impact on profit or loss
31 March 2017 31 March 2016
Interest rates - increases by 100 bps (2.58) -
Interest rates - decreases by 100 bps 2.58 -

130 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
37 CAPITAL MANAGEMENT
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise
the shareholder value.
The Company monitors capital using a ratio of net debt to equity. For this purpose, net debt is defined as total liabilities, comprising
borrowings, trade payables and other liabilities less cash and cash equivalents. Equity comprises all components of equity. The
Company's net debt to equity ratio at 31 March 2017 was as follows.
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Borrowings other than convertible preference shares and 9,605.74 6,931.50 10,798.28
convertible debentures
Trade payables 18.41 34.26 7.33
Other payables - - -
Less: cash and cash equivalents 7.71 480.24 6.60
Net debt 9,616.44 6,485.52 10,799.01
Equity and reserves 18,087.14 18,883.28 936.43
Convertible preference shares - - 2,399.90
Convertible debentures - - 6,315.82
Total equity 18,087.14 18,883.28 9,652.15
Net debt to equity ratio 0.53 0.34 1.12

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in
meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in
the financial covenants of any interest-bearing loans and borrowing in the current year.
38 FIRST TIME ADOPTION
As stated in Note 2.1, these financial statements of the Company for the year ended 31 March 2017 is the first prepared in accordance
with Indian Accounting Standards (Ind AS). For the year ended 31 March 2016, the Company had prepared its financial statements
in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant
provisions of the Act ('Previous GAAP').
The accounting policies set out in Note 2 have been applied in preparing these financial statements for the year ended 31 March
2017 including the comparative information for the year ended 31 March 2016 and the opening standalone Ind AS balance sheet
on the date of transition i.e. 1 April 2015.
In preparing its Ind AS balance sheet as at 1 April 2015 and in presenting the comparative information for the year ended 31 March
2016, the Company has adjusted amounts reported previously in standalone financial statements prepared in accordance with
previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in
accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company financial position,
financial performance.
Optional exemptions availed and mandatory exceptions
In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory
exceptions.
(a) Optional exemptions availed:
(i) Property plant and equipment, intangible assets
As per Ind AS 101 an entity may elect to:
(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as
its deemed cost at that date
(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as
deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly
comparable to:
- fair value;
- or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.
The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind
AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation
(including the existence of an active market).

FINANCIAL SECTION | 131

Notes to the financial statements for the year ended 31 March 2017
(iii) use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of
transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating
to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on
the date of transition.
On transition to Ind AS, the Company has elected to recognise the carrying value of all of its property, plant and
equipment as at 1 April 2015 as per para 16 of Ind AS 16 except for building which has been measured at fair value.
(ii)
Leases
Ind AS 17 requires a lease of land to be assessed as an operating or finance lease at the commencement of the lease.
However, Ind AS 101 provides the option to assess the same based on facts and circumstances existing on the date of
transition.
The Company has elected to avail the exception available under Ind AS 101 and assess for the classification of lease as on
the date of transition only.
(iii) Investments in subsidiaries and associates
Ind AS 101 provides an exemption to the first-time adopter to measure an investment in subsidiaries and associates at:
a) cost determined in accordance with Ind AS 27; or
b) deemed cost, which shall be its:
i) fair value at the entity’s date of transition to Ind ASs in its separate financial statements; or
ii) previous GAAP carrying amount at that date.
The Company has chosen to avail the exemption provided by Ind AS 101 and value all its investments in subsidiaries
and associates at cost as per Ind AS 27.
(b) Mandatory exceptions availed:
Ind AS 101 also allows first-time adopters certain mandatory exceptions to be applied for retrospective application of certain
requirements under Ind AS for transition from the previous GAAP:
(i) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing
as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost
based on facts and circumstances existing at the date of transition if retrospective application is impracticable.
Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist
on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively
except where the same is impracticable.
(ii)
Estimates
As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the
comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent
with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that
those estimates were in error.
However, the estimates should be adjusted to reflect any differences in accounting policies. As per Ind AS 101, where
application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those
estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance
sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).
Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity
to revise such estimates under Ind AS, other than those required due to application of Ind AS.
(iii) De-recognition of financial assets and liabilities
As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively
for transactions occurring on or after the date of transition to Ind AS.
However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information
needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was
obtained at the time of initially accounting for those transactions.
The Company has chosen to avail the exception to apply the derecognition provisions of Ind AS 109 prospectively from
the date of transition.

132 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
(c) Reconciliation between previous GAAP and Ind AS:
(i) (a) Reconciliation of balance sheet as at date of transition (1 April 2015)

(Rs. in million)
Note No. Previous GAAP* Adjustments Ind AS
ASSETS
Non-current assets
Property, plant and equipment 1 91.04 (31.24) 59.80
Intangible assets - - -
Financial Assets
(i) Investments 2 15,865.32 12.13 15,877.45
(ii) Loans 3 4,461.79 (4,455.98) 5.81
(iii) Other non-current financial assets 186.02 - 186.02
Other tax assets 4,5 - 35.59 35.59
Other non-current assets 62.56 (62.56) -
Total non-current assets 20,666.73 (4,502.06) 16,164.67
Current assets
Financial assets
(i) Trade receivables 2.94 - 2.94
(ii) Cash and cash equivalents 6.60 - 6.60
(iii) Loans 3 8.33 4,455.98 4,464.31
(iv) Other financial assets 0.48 - 0.48
Other current assets 5 250.82 (39.86) 210.96
Total current assets 269.17 4,416.12 4,685.29
Total assets 20,935.90 (85.94) 20,849.96
EQUITY AND LIABILITIES
EQUITY
Equity share capital 6 162.31 (16.39) 145.92
Other equity 1,2,5,8 3,745.05 (2,954.90) 790.15
Total equity 3,907.36 (2,971.29) 936.07
Non-current liabilities
Financial liabilities
(i) Borrowings 5 12,115.82 464.10 12,579.92
(ii) Other financial liabilities (other than those specified above) 5 199.03 (199.03) -
Provisions 5 279.94 (275.96) 3.98
Other non-current liabilities 8 11.69 (11.69) -
Total non-current liabilities 12,606.48 (22.58) 12,583.90
Current liabilities
Financial liabilities
(i) Borrowings 300.00 - 300.00
(ii) Trade payables
Total outstanding dues to micro enterprises and small enterprises
Total outstanding dues other than to micro enterprises and small 7.33 7.33
enterprises
(iii) Other financial liabilities 5 3,883.62 3,120.27 7,003.89
Provisions 5 212.61 (212.34) 0.27
Other current liabilities 18.50 - 18.50
Total current liabilities 4,422.06 2,907.93 7,329.99
TOTAL EQUITY AND LIABILITIES 20,935.90 (85.94) 20,849.96

* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

FINANCIAL SECTION | 133

Notes to the financial statements for the year ended 31 March 2017
(b) Reconciliation of balance sheet as at 31 March 2016
(Rs. in million)
Note No. Previous GAAP* Adjustments Ind AS
ASSETS
Non-current assets
Property, plant and equipment 1 86.35 (29.24) 57.11
Intangible assets 0.09 - 0.09
Financial Assets
(i) Investments 2 19,965.32 39.44 20,004.76
(ii) Loans 3 5,213.17 (5,176.36) 36.81
(iii) Other non-current financial assets 41.06 - 41.06
Other tax assets 4 - 28.22 28.22
Other non-current assets 5 45.73 (44.54) 1.19
Total non-current assets 25,351.72 (5,182.48) 20,169.24
Current assets
Financial assets
(i) Trade receivables 4.53 - 4.53
(ii) Cash and cash equivalents 480.24 - 480.24
(iii) Bank balances other than cash and cash equivalents 88.95 - 88.95
(iii) Loans 3 12.60 5,176.36 5,188.96
(iv) Other financial assets 0.59 - 0.59
Other current assets 5 15.83 (12.38) 3.45
Total current assets 602.74 5,163.98 5,766.72
TOTAL ASSETS 25,954.46 (18.50) 25,935.96
EQUITY AND LIABILITIES
Equity
Equity share capital 2,060.02 - 2,060.02
Other equity 1,2,5,8 16,763.71 59.51 16,823.22
Total equity 18,823.73 59.51 18,883.24
Non-current liabilities
Financial liabilities
- Borrowings 5 5,230.00 91.86 5,321.86
- Other financial liabilities 5 413.38 (413.38) -
Provisions 4.59 - 4.59
Other non-current liabilities 8 13.46 (13.46) -
Total non-current liabilities 5,661.43 (334.98) 5,326.45
Current liabilities
Financial liabilities
(i) Trade payables
Total outstanding dues to micro enterprises and small enterprises - - -
Total outstanding dues other than to micro enterprises and small 34.26 - 34.26
enterprises
- Other financial liabilities 2, 5 1,183.76 494.44 1,678.20
Provisions 5 237.71 (237.47) 0.24
Other current liabilities 13.57 - 13.57
Total current liabilities 1,469.30 256.97 1,726.27
TOTAL EQUITY AND LIABILITIES 25,954.46 (18.50) 25,935.96
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

134 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
(ii) Reconciliation of total comprehensive income for the year ended 31 March 2016
(Rs. in million)
Particulars Note No. Previous GAAP* Adjustments Ind AS
INCOME
Revenue from operations 2 487.20 15.89 503.09
Other income 101.45 - 101.45
Total income 588.65 15.89 604.54
EXPENSES
Purchase of stock in trade 207.06 - 207.06
Employee benefits expense 7 58.80 0.32 59.12
Finance costs 5 1,256.06 421.65 1,677.71
Depreciation and amortization expense 1 6.66 (1.98) 4.68
Other expenses 8 165.24 (1.77) 163.47
Total expenses 1,693.82 418.22 2,112.04
Loss before tax (1,105.17) (402.33) (1,507.50)
Tax expense - - -
Loss after tax (1,105.17) (402.33) (1,507.50)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plan actuarial gains/ (losses) 7 - 0.32 0.32
Other comprehensive income for the period - 0.32 0.32
Total Comprehensive Income for the period (1,105.17) (402.01) (1,507.18)
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

(iii) Reconciliation of total equity as at 31 March 2016 and 1 April 2015

(Rs. in million)
Particulars Note No. 31 March 2016 1 April 2015
Total equity (shareholder’s funds) as per previous GAAP 18,823.73 3,907.36
Adjustments:
Equity portion of redeemable and compulsory convertible preference 6 - (16.38)
shares classified as financial liability
Amortisation of finance cost under effective interest method 5 50.68 (2,944.12)
Reversal of straight lining of rental expense to the extent of structured 8 13.46 11.69
escalation which is in line with expected general inflation
Fair valuation impact of Building classified under Property, plant and equipment 1 (31.24) (31.24)
Financial gurantee commission income 2 24.63 8.76
Decrease in depreciation consequent to adoption of deemed cost model 1 1.98 -
for property, plant and equipment
Total adjustments 59.51 (2,971.29)
Total equity as per Ind AS 18,883.24 936.07

FINANCIAL SECTION | 135

Notes to the financial statements for the year ended 31 March 2017
(iv) Reconciliation of total comprehensive income for the year ended 31 March 2016
(Rs. in million)
Particulars Notes to first-time 31 March 2016
adoption
Profit after tax as per previous GAAP (1,105.17)
Financial gurantee commission income 2 15.89
Actuarial loss of defined benefit obligation - Gratuity (net of tax) 7 (0.32)
Amortisation of finance cost under effective interest method 5 (421.65)
Decrease in depreciation consequent to adoption of deemed cost model for property, 1 1.98
plant and equipment
Reversal of straight lining of rental expense to the extent of structured escalation which is in 8 1.77
line with expected general inflation
Tax effects of adjustments -
Total adjustments (402.33)
Profit after tax as per Ind AS (1,507.50)
Other comprehensive income 7 0.32
Total comprehensive income as per Ind AS (1,507.17)

(v) Adjustments to the statement of cash flows:

(Rs. in million)
Particulars For the year ended 31 March 2016
Previous GAAP* Adjustments Ind AS
Net cash flow from operating activities 413.74 (144.97) 268.77
Net cash flow from investing activities (4,102.19) 56.02 (4,046.17)
Net cash flow from financing activities 4,251.04 - 4,251.04
Net increase/ (decrease) in cash and cash equivalents 562.59 (88.95) 473.64
Cash and cash equivalents as at 1 April 2015 6.60 - 6.60
Cash and cash equivalents as at 31 March 2016 569.19 (88.95) 480.24
* The previous GAAP figures have been reclassified to conform with Ind AS.
The adjustment is on account of fixed deposits as at 31 March 2016 amounting to Rs.88.95 million classified under cash and cash
equivalents under previous GAAP which is classified under balances other than cash and cash equivalents under Ind AS.
(d) Notes to explanation of transition to Ind AS
1) Fair valuation of property, plant and equipment and other intangible assets
The Company has elected to measure building at fair value at the date of transition to Ind AS. Hence at the date of
transition to Ind AS, a decrease of Rs.31.24 million (31 March 2016: Rs.29.24 million) was recognised in property, plant and
equipment. This amount has been recognised against retained earnings.
2) Financial guarantee commission to subsidiaries
The Company has provided financial gurantees to bank and financial institutions for loans taken by its subsidiaries and
step-subsidiaries. Hence at the date of transition to Ind AS, an increase of Rs.12.13 million (31 March 2016: Rs.39.43 million)
was recognised in investments. This dividene income recognised against the same has been recognised against retained
earnings.
3) Loans to subsidiaries
The Company has provided loans to its subsidiaries and step-subsidiaries. At the date of transition to Ind AS, the Company
has reassesd the terms and conditions for loans given and classified as current financial assets.
4) Current tax assets
At the date of transition to Ind AS, the Company has reassesd the and classified the tax related assets classified under other
non current assets as per the previous GAAP amounting 35.59 million as on the date of transition ( 31 March 2016: Rs.28.22
milliom) as current tax assets as per Ind AS.
5)
Borrowings
Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount
of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as
part of the interest expense by applying the effective interest rate method.

136 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the financial statements for the year ended 31 March 2017
The impact arising on from the change is summarised as follows:
(Rs. in million)
31 March 2016
Statement of profit and loss
Finance costs 421.64

(Rs. in million)
Balance sheet As at 31 March 2016 As at 1 April 2015
Borrowings at amortised cost 50.68 (2,944.12)
Adjustment to retained earnings 50.68 (2,944.12)

6) Compulsorily convertible and non-convertible preference shares

The Company has issued compulsorily convertible preference shares and non-convertible redeemable preference shares.
The compulsorily convertible preference shares carry fixed cumulative dividend at rate of 0.001% p.a. and non-convertible
redeemable preference shares carries non-cumulative preferred dividend calculated at the rate of 0.001%, if declared by
the Company. Under Indian GAAP, these preference shares were classified as equity and dividend payable thereon was
treated as distribution of profit, if any.
Under Ind AS, preference shares are classified as liability based on the terms of their contract. Interest and premium on
liability component is recognised using the effective interest method. Thus the preference share capital is reduced by
Rs.16.39 million (31 March 2016: Nil) with a corresponding increase in borrowings as liability component.
7) Remeasurement of post-employment benefit expenses
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included
in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of
profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a
result of this change, the profit for the year ended 31 March 31 2016 decreased by Rs.0.32 million. There is no impact on
the total equity as at 31 March 2016.
8) Rent equalisation reserve
Under the previous GAAP, lease payments under an operating lease shall be recognised as an expense on a straight-line
basis over the lease term. Under Ind AS, if the payments to the lessor are structured to increase in line with expected
general inflation to compensate for the lessor’s expected inflationary cost increase, then lease payments are not straight-
lined. Accordingly, the Company has reversed rent equalisation reserve under Ind AS. Difference due to this has been
recognised as rent expense. Consequent to this change, the amount of rent equalisation reserve decreased by Rs.11.69
million as at 1 April 2015 (31 March 2016 – Rs.13.46 million). Total equity increased by Rs.11.69 million as on 1 April 2015.
The profit for the year and total equity as at 31 March 2016 increased by Rs.1.71 million due to reversal of rent equalisation
reserve.
39 During the year, the Company had Specified Bank Notes (SBNs) or other denomination notes as defined in the MCA notification,
G.S.R. 308(E), dated 31 March 2017. The details of SBNs held and transacted during the period from 8 November 2016 to 30 December
2016, the denomination wise SBNs and other notes as per the notification are as follows:
(Rs. in million)
Particulars Specified bank notes Other denomination Total
notes
Closing cash in hand as on 8 November 2016 0.29 0.02 0.31
Add: Permitted receipts - 0.23 0.23
Less: Permitted payments - 0.02 0.02
Less: Amount deposited in banks (0.29) - (0.29)
Closing cash in hand as on 30 December 2016 - 0.27 0.27
For the purposes of this note, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the
Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8 November 2016.

As per our report of even date attached

for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

FINANCIAL SECTION | 137

 Consolidated
Financial Statements of
Coffee Day Enterprises Limited

138 | COFFEE DAY | ANNUAL REPORT 2016-17

Independent Auditor’s report
To
The Members of
Coffee Day Enterprises Limited

Report on the Consolidated Ind AS Financial Statements We have taken into account the provisions of the Act, the
We have audited the accompanying consolidated Ind AS accounting and auditing standards and matters which are
financial statements of Coffee Day Enterprises Limited (“the required to be included in the audit report under the provisions
Holding Company”), its subsidiaries, associates and joint of the Act and the Rules made thereunder.
ventures (collectively referred to as “the Group”), which
comprise the consolidated balance sheet as at 31 March 2017, We conducted our audit in accordance with the Standards
the consolidated statement of profit and loss (including other on Auditing specified under Section 143(10) of the Act. Those
comprehensive income), the consolidated cash flow statement Standards require that we comply with ethical requirements and
and the consolidated statement of changes in equity for the year plan and perform the audit to obtain reasonable assurance about
then ended, and a summary of significant accounting policies whether the consolidated Ind AS financial statements are free
and other explanatory information (hereinafter referred to as from material misstatement.
“consolidated Ind AS financial statements”). An audit involves performing procedures to obtain audit
Management’s Responsibility for the Consolidated Ind AS evidence about the amounts and disclosures in the consolidated
financial statements Ind AS financial statements. The procedures selected depend
The Holding Company’s Board of Directors is responsible on the Auditor’s judgment, including the assessment of the
for the preparation of these consolidated Ind AS financial risks of material misstatement of the consolidated Ind AS
statements in terms of the requirement of the Companies Act, financial statements, whether due to fraud or error. In making
2013 (hereinafter referred to as “the Act”) that give a true and those risk assessments, the auditor considers internal financial
fair view of the consolidated financial position, consolidated control relevant to the Holding Company’s preparation of the
financial performance including other comprehensive income, consolidated Ind AS financial statements that give a true and fair
consolidated cash flows and consolidated changes in equity of view in order to design audit procedures that are appropriate
the Group in accordance with the accounting principles generally in the circumstances. An audit also includes evaluating
accepted in India, including the Accounting Standards (Ind AS) the appropriateness of accounting policies used and the
prescribed under Section 133 of the Act read with relevant reasonableness of the accounting estimates made by the Holding
rules issued thereunder. The respective Board of Directors Company’s Board of Directors, as well as evaluating the overall
of the companies included in the Group are responsible for presentation of the consolidated Ind AS financial statements.
maintenance of adequate accounting records in accordance with
We believe that the audit evidence obtained by us and the audit
the provisions of the Act for safeguarding the assets of the Group
evidence obtained by the other auditors in terms of their reports
and for preventing and detecting frauds and other irregularities;
referred to in the other matters paragraph below, is sufficient
the selection and application of appropriate accounting policies;
and appropriate to provide a basis for our audit opinion on the
making judgments and estimates that are reasonable and
consolidated Ind AS financial statement.
prudent; and the design, implementation and maintenance
of adequate internal financial controls, that were operating
Opinion
effectively for ensuring the accuracy and completeness of the
In our opinion and to the best of our information and according
accounting records, relevant to the preparation and presentation
to the explanations given to us, the aforesaid consolidated Ind AS
of the consolidated Ind AS financial statements that give a true
financial statements give the information required by the Act in
and fair view and are free from material misstatement, whether
the manner so required and give a true and fair view in conformity
due to fraud or error, which have been used for the purpose of
with the accounting principles generally accepted in India
preparation of the consolidated Ind AS financial statements by
including Ind AS, of the consolidated state of affairs of the Group
the Directors of the Holding Company, as aforesaid.
as at 31 March 2017, and its consolidated financial performance
Auditor’s Responsibility including other comprehensive income, its consolidated cash
Our responsibility is to express an opinion on these consolidated flows and the consolidated changes in equity for the year then
Ind AS financial statements based on our audit. ended.

FINANCIAL SECTION | 139

Other matter Report on Other Legal and Regulatory Requirements
(a) We did not audit the Ind AS financial statements of certain 1. As required by Section 143(3) of the Act, we report, to the
subsidiaries, whose consolidated Ind AS financial statements extent applicable, that:
reflect total assets of Rs.56,289.99 million and net assets
(a) We have sought and obtained all the information and
of Rs.9,383.95 million as at 31 March 2017, total revenues
explanations which to the best of our knowledge and
of Rs.16,556.04 million and net cash inflows amounting to
belief were necessary for the purposes of our audit of
Rs.3,964.54 million for the year then ended, as considered
the aforesaid consolidated Ind AS financial statements;
in the consolidated Ind AS financial statements. These
consolidated Ind AS financial statements have been audited (b) In our opinion, proper books of account as required by
by other auditors whose reports have been furnished to us by law relating to preparation of the aforesaid consolidated
the Management and our opinion on the consolidated Ind Ind AS financial statements have been kept so far as it
AS financial statements, in so far as it relates to the amounts appears from our examination of those books and the
and disclosures included in respect of these subsidiaries and reports of the other auditors;
our report in terms of sub-sections (3) and (11) of Section 143
of the Act, insofar as it relates to the aforesaid subsidiaries (c) The consolidated balance sheet, the consolidated
and joint ventures is based solely on the reports of the other statement of profit and loss (including other
auditors. comprehensive income), the consolidated statement
of cash flows and consolidated statement of changes
(b) The consolidated Ind AS financial statements also include the in equity dealt with by this report are in agreement
Group’s share of total comprehensive income of Rs.604.14 with the relevant books of account maintained for
million for the year ended 31 March 2017, as considered the purpose of preparation of the consolidated Ind AS
in this Statement, in respect of two associates and two financial statements;
joint ventures, whose Ind AS financial statements have not
been audited by us. These Ind AS financial statements have (d) In our opinion, the aforesaid consolidated Ind AS
been audited by other auditors whose reports have been financial statements comply with the Accounting
furnished to us by the Management and our opinion on the Standards specified under Section 133 of the Act, read
consolidated Ind AS financial statements, in so far as it relates with read with relevant rules issued thereunder;
to the amounts and disclosures included in respect of these
(e) On the basis of the written representations received
associates and joint ventures and our report in terms of sub-
from the directors of the Holding company as on 31
sections (3) and (11) of Section 143 of the Act, insofar as it
March 2017 taken on record by the Board of Directors
relates to the aforesaid associates and joint ventures is based
of the Holding company and the reports of the
solely on the reports of the other auditors.
statutory auditors of its subsidiary companies, associate
Our opinion on the consolidated Ind AS financial statements, and companies and joint venture companies incorporated
our report on Other Legal and Regulatory Requirements below, is in India, none of the directors of the Group companies
not modified in respect of the above matters with respect to our incorporated in India is disqualified as on 31 March 2017
reliance on the work done and the reports of the other auditors from being appointed as a director in terms of Section
and the Ind AS financial statements certified by the Management. 164 (2) of the Act;

140 | COFFEE DAY | ANNUAL REPORT 2016-17

 (f ) With respect to the adequacy of the internal financial (iv) The requisite disclosures in the consolidated Ind
controls over financial reporting of the Holding AS financial statements, for holdings as well as
company, its subsidiary companies, associate companies dealings in Specified Bank Notes as defined in the
and joint venture companies incorporated in India and Notification S.O. 3407(E) dated 8 November 2016
the operating effectiveness of such controls, refer to our of the Ministry of Finance, during the period from
separate report in the Annexure; and 8 November 2016 to 30 December 2016, have
been provided with respect to Holding Company
(g) With respect to the other matters to be included in
and its subsidiary companies incorporated in
the Auditor’s Report in accordance with Rule 11 of
India. Based on audit procedures and reliance on
the Companies (Audit and Auditor’s) Rules, 2014, in
the management representation we report that
our opinion and to the best of our information and
the disclosures are in accordance with books of
according to the explanations given to us:
account maintained by the Holding Company
(i) The consolidated Ind AS financial statements and its subsidiary companies incorporated in
disclose the impact of pending litigations on India and as produced to us by the Management
the consolidated financial position of the Group. of the Holding Company. Refer Note 46 to the
Refer note 44 to consolidated Ind AS the financial consolidated Ind AS financial statements.
statements;
(ii) The Group did not have any material foreseeable
losses on long-term contracts including derivative for B S R & Co. LLP
contracts; Chartered Accountants
Firm’s registration number: 101248W/W-100022
(iii) There were no amounts during the year which were,
required to be transferred, to the Investor Education
and Protection Fund by the Holding Company, its Supreet Sachdev
subsidiary companies, associate companies and Bangalore Partner
joint venture companies incorporated in India; 18 May 2017 Membership number: 205385

FINANCIAL SECTION | 141

Annexure to the Independent Auditor’s Report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

In conjunction with our audit of the consolidated Ind AS financial controls over financial reporting, assessing the risk that a material
statements of the Company as of and for the year ended 31 weakness exists, and testing and evaluating the design and
March 2017, we have audited the internal financial controls over operating effectiveness of internal control based on the assessed
financial reporting of Coffee Day Enterprises Limited (‘the Holding risk. The procedures selected depend on the auditor’s judgment,
Company’), its subsidiaries, associates and joint ventures, which including the assessment of the risks of material misstatement of
are companies incorporated in India, as of that date. the Ind AS financial statements, whether due to fraud or error.
Management’s Responsibility for Internal Financial Controls We believe that the audit evidence we have obtained and the
The respective Board of Directors of the Holding Company, its audit evidence obtained by the other auditor’s in terms of their
subsidiaries, associates and joint venture companies incorporated reports referred to in other matters paragraph below, is sufficient
in India, are responsible for establishing and maintaining internal and appropriate to provide a basis for our audit opinion on the
financial controls based on the internal control over financial Company’s internal financial controls system over financial
reporting criteria established by the Company considering the reporting.
essential components of internal control stated in the Guidance
Meaning of Internal Financial Controls over Financial Reporting
Note on Audit of Internal Financial Controls over Financial
A company's internal financial control over financial reporting is
Reporting issued by the Institute of Chartered Accountants
a process designed to provide reasonable assurance regarding
of India (‘ICAI’). These responsibilities include the design,
the reliability of financial reporting and the preparation of Ind
implementation and maintenance of adequate internal financial
AS financial statements for external purposes in accordance
controls that were operating effectively for ensuring the orderly
with generally accepted accounting principles. A company's
and efficient conduct of its business, including adherence to
internal financial control over financial reporting includes those
company’s policies, the safeguarding of its assets, the prevention
policies and procedures that (1) pertain to the maintenance of
and detection of frauds and errors, the accuracy and completeness
records that, in reasonable detail, accurately and fairly reflect the
of the accounting records, and the timely preparation of reliable
transactions and dispositions of the assets of the Company; (2)
financial information, as required under the Companies Act, 2013.
provide reasonable assurance that transactions are recorded as
Auditor’s Responsibility necessary to permit preparation of Ind AS financial statements in
Our responsibility is to express an opinion on the Company's accordance with generally accepted accounting principles, and
internal financial controls over financial reporting based on our that receipts and expenditures of the Company are being made
audit. We conducted our audit in accordance with the Guidance only in accordance with authorisations of management and
Note on Audit of Internal Financial Controls over Financial directors of the Company; and (3) provide reasonable assurance
Reporting (‘the Guidance Note’) and the Standards on Auditing, regarding prevention or timely detection of unauthorised
issued by ICAI and deemed to be prescribed under section acquisition, use, or disposition of the Company's assets that could
143(10) of the Act to the extent applicable to an audit of internal have a material effect on the Ind AS financial statements.
financial controls, both applicable to an audit of Internal Financial
Inherent Limitations of Internal Financial Controls Over
Controls and, both issued by the ICAI. Those Standards and the
Financial Reporting
Guidance Note require that we comply with ethical requirements
Because of the inherent limitations of internal financial controls
and plan and perform the audit to obtain reasonable assurance
over financial reporting, including the possibility of collusion
about whether adequate internal financial controls over financial
or improper management override of controls, material
reporting was established and maintained and if such controls
misstatements due to error or fraud may occur and not be
operated effectively in all material respects.
detected. Also, projections of any evaluation of the internal
Our audit involves performing procedures to obtain audit financial controls over financial reporting to future periods are
evidence about the adequacy of the internal financial controls subject to the risk that the internal financial control over financial
system over financial reporting and their operating effectiveness. reporting may become inadequate because of changes in
Our audit of internal financial controls over financial reporting conditions, or that the degree of compliance with the policies or
included obtaining an understanding of internal financial procedures may deteriorate

142 | COFFEE DAY | ANNUAL REPORT 2016-17

Opinion controls over financial reporting in so far as it relates to ten
In our opinion, the Holding Company, its subsidiaries, associates subsidiary companies and two associate companies, which are
and joint venture companies, which are companies incorporated companies incorporated in India, is based on the corresponding
in India, have, in all material respects, an adequate internal reports of the auditors of such companies.
financial controls system over financial reporting and such
internal financial controls over financial reporting were operating
effectively as at 31 March 2017, based on the internal control for B S R & Co. LLP
over financial reporting criteria established by the Company Chartered Accountants
considering the essential components of internal control stated Firm’s registration number: 101248W/W-100022
in the Guidance Note ICAI.
Other matters Supreet Sachdev
Our aforesaid reports under Section 143(3)(i) of the Act on the Bangalore Partner
adequacy and operating effectiveness of the internal financial 18 May 2017 Membership number: 205385

FINANCIAL SECTION | 143

Consolidated balance sheet
as at 31st March, 2017
(Rs. in million)
Note As at As at As at
31 March 2017 31 March 2016 1 April 2015
ASSETS
Non-current assets
Property, plant and equipment 4 18,904.61 17,361.42 16,402.38
Capital work-in-progress 4 8,156.37 7,063.24 6,117.61
Investment property 5 5,055.80 4,787.25 4,368.92
Investment property under development 3,206.52 2,684.11 2,473.98
Goodwill 6 5,000.85 5,017.04 5,009.05
Other intangible assets 7 428.88 219.11 260.94
Intangible assets under development 7 7.91 83.28 22.27
Investments accounted for using equity method 8A 6,348.75 6,000.70 5,394.95
Financial Assets
- Investments 8B 274.87 138.10 168.71
- Trade receivables 9 - 67.30 19.00
- Loans 10 1,104.06 975.73 862.56
- Other non-current financial assets 11 272.02 1,420.12 978.10
Deferred tax assets (net) 12 635.73 501.34 520.18
Non current tax assets (net) 71.28 77.30 44.31
Other non-current assets 13 5,355.47 3,298.64 2,768.54
Total non-current assets 54,823.12 49,694.68 45,411.50
Current assets
Inventories 14 1,325.40 1,250.17 1,175.09
Financial assets
- Investments 15 17.74 126.08 5.15
- Trade receivables 9 4,089.03 3,059.08 2,720.64
- Cash and cash equivalents 16 12,686.95 9,791.69 6,191.10
- Bank balances other than cash and cash equivalents 17 1,806.86 2,003.81 949.36
- Loans 18 1,534.31 1,364.87 746.85
- Other current financial assets 19 1,249.54 978.80 809.69
Current tax assets (net) 497.23 673.66 712.63
Other current assets 20 2,255.12 1,371.50 1,273.03
Total current assets 25,462.17 20,619.66 14,583.54
Total assets 80,285.29 70,314.34 59,995.04
EQUITY AND LIABILITIES
Equity
Equity share capital 21 2,060.02 2,060.02 145.92
Other equity 22 20,216.55 19,596.34 2,562.64
Equity attributable to owners of the Company 22,276.57 21,656.36 2,708.56
Non-controlling interests 6,214.47 5,749.38 5,050.80
Total equity 28,491.04 27,405.74 7,759.36
Non-current liabilities
Financial liabilities
- Borrowings 23 32,034.26 26,695.83 31,313.57
- Other financial liabilities 24 1,209.07 1,297.88 1,218.38
Provisions 25 120.52 105.33 79.15
Deferred tax liabilities (net) 26 256.23 160.05 142.79
Other non-current liabilities 27 217.39 226.63 213.98
Total non-current liabilities 33,837.47 28,485.72 32,967.87
Current liabilities
Financial liabilities
- Borrowings 28 5,416.74 5,222.87 4,616.18
- Trade payables 29
Total outstanding dues to micro enterprises and small enterprises - - -
Total outstanding dues other than micro enterprises and small enterprises 1,011.68 991.65 1,234.22
- Other financial liabilities 30 10,645.37 7,655.51 12,878.07
Provisions 31 43.28 45.97 35.02
Current tax liabilities (net) 32 268.34 206.37 47.10
Other current liabilities 33 571.37 300.51 457.22
Total current liabilities 17,956.78 14,422.88 19,267.81
Total equity and liabilities 80,285.29 70,314.34 59,995.04
Significant accounting policies 3

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

144 | COFFEE DAY | ANNUAL REPORT 2016-17

Consolidated statement of profit & loss
for the year ended 31st March, 2017
(Rs. in million)
Note For the year ended For the year ended
31 March 2017 31 March 2016
INCOME
Revenue from operations 34 31,196.42 27,805.18
Other income 35 637.87 643.71
Total income 31,834.29 28,448.89
EXPENSES
Cost of materials consumed 36 7,298.32 6,737.78
Cost of integrated logistics services 37 6,687.80 5,974.50
Purchases of stock-in-trade 454.34 68.64
Changes in inventories of finished goods, stock-in -trade and work-in-progress 38 63.98 (96.49)
Employee benefits expense 39 3,911.41 3,433.99
Finance costs 40 3,172.09 3,594.89
Depreciation and amortization expense 41 2,268.40 2,516.99
Other expenses 42 7,343.50 6,807.56
Total expenses 31,199.84 29,037.86
Profit/(loss) before investments accounted for using equity method and tax 634.45 (588.97)
Share of profit from associates and joint ventures accounted for using equity method 736.06 939.36
Profit before tax 1,370.51 350.39
Tax expense: 43A
- Current tax 536.24 431.04
- Deferred tax 18.64 15.35
Profit/(loss) for the year 815.63 (96.00)
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plan actuarial gains/ (losses) 2.51 (4.36)
Net changes in fair value of equity instruments through other comprehensive income 138.00 (32.22)
Share of other comprehensive income in associates and joint ventures, to the (109.82) (39.41)
extent not to be classified into profit or loss
30.69 (75.99)
Income tax relating to items that will not be reclassified to profit or loss 43B (1.01) 2.62
Items that will be reclassified subsequently to profit or loss:
Foreign currency translation reserve 14.00 (2.74)
Effective portion of gains and losses on hedging 7.31 15.27
21.31 12.53
Income tax relating to items that will be reclassified to profit or loss 43B (2.53) (5.29)
Other comprehensive income for the period 48.46 (66.13)
Total comprehensive income for the period 864.09 (162.13)
Profit/ (loss) attributable to:
- Owners of the Company 461.95 (424.63)
- Non- controlling interests 353.68 328.63
Other comprehensive income attributable to:
- Owners of the Company 30.68 (62.03)
- Non- controlling interests 17.78 (4.10)
Total comprehensive income attributable to:
- Owners of the Company 492.63 (486.66)
- Non- controlling interests 371.46 324.53
Earnings per equity share (for continuing operation): 45
- Basic 2.39 (3.06)
- Diluted 2.39 (3.06)
Significant accounting policies 3
The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

FINANCIAL SECTION | 145

 (Rs. in million)
Consolidated statement of changes in equity
Other equity
Particulars Equity Reserves and Surplus Other comprehensive income Equity Non Total
share Debenture General Shares Reserve fund Capital Securities Retained Foreign Equity instruments Cash flow Remeasurements Other items attributable to controlling equity
capital redemption reserve options (As per 45IC of reserve premium earnings currency through other hedges of actuarial gain of other owners of the interests
reserve outstanding Reserve Bank of translation comprehensive and losses comprehensive Company
account India, 1934) reserve income income
Balance as at 1 April 2015 145.92 183.40 0.01 24.38 - 395.60 3,722.36 (1,736.89) (22.58) 19.76 (19.61) (4.84) 1.05 2,708.56 5,050.80 7,759.36
Changes in total comprehensive income:
Profit or (loss) during the year - - - - - - - (424.63) - - - - - (424.63) 328.63 (96.00)
Other comprehensive income (net of taxes) - - - - - - - - (2.80) (27.24) 8.23 (1.42) (38.80) (62.03) (4.10) (66.13)
Contributions and distributions:
Issue of bonus shares 1,021.41 - - - - - (1,021.41) - - - - - - - - -
Conversion of compulsorily convertible 542.08 - - - - - 8,487.47 - - - - - - 9,029.55 - 9,029.55
preference shares / debentures
Issue of shares pursuant to initial public offer 350.61 - - - - - 11,150.00 - - - - - - 11,500.61 - 11,500.61
Transfer to debenture redemption reserve - 91.70 - - - - - (91.70) - - - - - - - -
Transfer to reserve fund - - - - 0.92 - - (0.92) - - - - - - - -
Share issue expenses - - - - - - (761.37) - - - - - - (761.37) - (761.37)
Share options exercised - - - 27.25 - - - - - - - - - 27.25 - 27.25
Changes in ownership interest that do

146 | COFFEE DAY | ANNUAL REPORT 2016-17

not result in loss of control:
Dilution in ownership without change in control - - - - - (363.68) - - 2.10 - - - - (361.58) 374.05 12.47
Balance as at 31 March 2016 2,060.02 275.10 0.01 51.63 0.92 31.92 21,577.05 (2,254.14) (23.28) (7.48) (11.38) (6.26) (37.75) 21,656.36 5,749.38 27,405.74

(Rs. in million)
Other equity
Particulars Equity Reserves and Surplus Other comprehensive income Equity Non Total
share Debenture General Shares Reserve fund Capital Securities Retained Foreign Equity instruments Cash flow Remeasurements Other items attributable to controlling equity
capital redemption reserve options (As per 45IC of reserve premium earnings currency through other hedges of actuarial gain of other owners of the interests
reserve outstanding Reserve Bank of translation comprehensive and losses comprehensive Company
account India, 1934) reserve income income
Balance as at 1 April 2016 2,060.02 275.10 0.01 51.63 0.92 31.92 21,577.05 (2,254.14) (23.28) (7.48) (11.38) (6.26) (37.75) 21,656.36 5,749.38 27,405.74
Changes in total comprehensive income:
Profit or (loss) during the year - - - - - - - 461.95 - - - - - 461.95 353.68 815.63
Other comprehensive income (net of taxes) - - - - - - - - 11.96 118.03 4.13 1.35 (104.78) 30.69 17.78 48.47
Contributions and distributions:
Conversion of compulsorily convertible - - - - - - 168.37 - - - - - - 168.37 - 168.37
preference shares / debentures
Transfer to debenture redemption reserve - 12.31 - - - - - (12.31) - - - - - - - -
Transfer to reserve fund - - - - 0.94 - - (0.94) - - - - - - - -
Share options exercised - - - 13.04 - - - - - - - - - 13.04 - 13.04
Changes in ownership interest that do
not result in loss of control:
Dilution in ownership without change in control - - - - - (45.69) - - - - - - - (45.69) 42.41 (3.28)
Increase in non-controlling interest in - - - - - - - - - - - - - - 32.56 32.56
subsidiary pursuant to increase in share
capital by subsidiary
Loss of joint venture derecognized on sale - - - - - - - 0.11 - - - - - 0.11 - 0.11
Transfer of wholly owned subsidiary within - - - - - - - (16.89) 8.63 - - - - (8.26) 18.66 10.40
group with reduction of control
Balance as at 31 March 2017 2,060.02 287.41 0.01 64.67 1.86 (13.77) 21,745.42 (1,822.22) (2.69) 110.55 (7.25) (4.91) (142.53) 22,276.57 6,214.47 28,491.04
The notes referred to above form an integral part of the standalone financial statements
As per our report of even date attached for and on behalf of the Board of Directors of Coffee Day Enterprises Limited
for B S R & Co. LLP
Supreet Sachdev Chartered Accountants V. G. Siddhartha Malavika Hegde R Ram Mohan Sadananda Poojary
Partner Firm registration number: Managing Director Director Chief Financial Officer Company Secretary
Membership no.: 205385 101248W/W-100022 DIN: 00063987 DIN: 00136524
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017
Consolidated statement of cash flow
for the year ended 31st March, 2017
(Rs. in million)
For the year ended For the year ended
31 March 2017 31 March 2016
Cash flows from operating activities
Profit/(loss) before investments accounted for using equity method and tax 634.45 (588.97)
Adjustments:
- Interest income (464.51) (479.34)
- Loss on sale of fixed assets 3.00 36.70
- Provision for impairment of goodwill 7.07 -
- Rental expense/(income) on fair valuation of rental deposits 1.42 (5.51)
- Impact of rent straightlining 27.23 71.52
- Dividend income (12.99) (4.62)
- Interest expense 3,172.09 3,594.89
- Provision for doubtful debts 40.33 87.54
- (Gain)/ loss from forex hedging, net (1.05) (6.16)
- Stock compensation expense 13.04 27.25
- Depreciation and amortization 2,268.40 2,516.99
Operating cash flow before working capital changes 5,688.48 5,250.29
Changes in
- Current and non current trade receivables (1,002.99) (474.27)
- Current and non current loans (232.14) (732.71)
- Other current and non-current financial assets 891.29 (561.06)
- Other current and non-current assets (971.93) (128.07)
- Inventories (75.22) (75.09)
- Trade payables 20.03 (242.57)
- Current and non current provisions 13.86 35.71
- Other current and non current liabilities 255.49 (226.40)
- Other current and non current financial liabilities 628.76 583.92
Cash generated from operations 5,215.63 3,429.75
Income taxes paid (348.66) (245.07)
Cash generated from operations [A] 4,866.97 3,184.68
Cash flows from investing activities
Purchase of fixed assets (7,087.46) (4,997.01)
Proceeds from sale of fixed assets 29.74 25.98
Acquisition of investment property (790.96) (628.46)
(Investment in) / sale of associates and joint ventures 57.48 10.36
(Investment in) / sale of other investments 89.61 (115.45)
Withdrawal/ (Investment in) of fixed deposits 196.94 (1,054.45)
Interest received 451.50 429.27
Dividends received 296.22 295.34
Net cash used in investing activities [B] (6,756.93) (6,034.42)
Cash flows from financing activities
Proceeds from issue of share capital including premium - 11,500.00
Share issue expenses incurred - (761.37)
Proceeds from / (repayment of ) long term and short term borrowings 7,824.34 (768.49)
Interest paid (2,896.54) (3,258.11)
Net cash generated from financing activities [C] 4,927.80 6,712.03
Increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year 9,496.82 5,634.53
Movement in cash and cash equivalents [A +B +C] 3,037.84 3,862.29
Cash and cash equivalents at the end of the year 12,534.66 9,496.82
Components of cash and cash equivalents (refer note 16, 28 and 30)
Cash in hand 61.78 56.02
Balances with banks
- in current accounts 6,635.15 4,066.36
- in fixed deposits 5,970.97 5,634.37
- in escrow account 19.05 34.94
Less: Book overdraft (151.78) (152.64)
Less: Bank overdraft (0.51) (142.23)
Total cash and cash equivalents 12,534.66 9,496.82

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

FINANCIAL SECTION | 147

Notes to the consolidated financial statements for the year ended 31 March 2017
1 GROUP OVERVIEW
Coffee Day Enterprises Limited (‘CDEL’ or ‘the Company’) and its subsidiaries, associates and joint venture (collectively known as 'The
Group') was originally 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. The Company undertook an Initial Public Offer of equity
shares and subsequently got its equity shares listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)
effective 2 November 2015.
CDEL is the parent 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.
The Company, primarily through its subsidiaries, associates and joint venture companies as detailed below are engaged in business
in multiple sectors such as Coffee-retail and exports, Leasing of commercial office space, Financial services, Integrated Multimodal
Logistics, Hospitality and Information Technology (IT) / Information Technology Enabled Services (ITeS).
List of subsidiaries with percentage holding –
Name of the entity Country of incorporation Percentage of
and other particulars holding (%)
DIRECT SUBSIDIARIES
Coffee Day Global Limited (erstwhile a subsidiary of the Company incorporated under the laws of India 86.63
Amalgamated Bean Coffee Trading
Company Limited) ('CDGL')
Tanglin Developments Limited ('TDL') a subsidiary of the Company incorporated under the laws of India 100.00
Coffee Day Hotels and Resorts Private a subsidiary of the Company incorporated under the laws of India 100.00
Limited ('CDHRPL')
Coffee Day Trading Limited (erstwhile a subsidiary of the Company incorporated under the laws of India 88.77
Global Technology Ventures Limited)
('CDTL')
STEP-DOWN SUBSIDIARIES
Way2Wealth Securities Private Limited a subsidiary of TDL and CDTL incorporated under the laws of 85.53
('WSPL') India
Amalgamated Holdings Limited ('AHL') a subsidiary of CDGL incorporated under the laws of India 100.00
Ganga Coffee Curing Works Limited a subsidiary of CDGL incorporated under the laws of India 100.00
A.N Coffeeday International Limited a subsidiary of CDGL incorporated under the laws of Cyprus 100.00
(‘AN CCD’)
Coffee Day Properties (India) Private a subsidiary of CDGL incorporated under the laws of India 100.00
Limited
Classic Coffee Curing Works a partnership firm with CDGL as a controlling partner having a 100.00
share of profit of 100%, registered under the laws of India
Coffeelab Limited a subsidiary of AHL incorporated under the laws of India 100.00
Coffee Day Gastronomie Und a subsidiary of AN CCD incorporated under the laws of Austria 100.00
Kaffeehandles GmbH
Coffee Day CZ a.s a subsidiary of AN CCD incorporated under the laws of Czech 100.00
Republic
Tanglin Retail Reality Developments a subsidiary of TDL incorporated under the laws of India 100.00
Private Limited ('TRR')
Sical Logistics Limited ('SL') a subsidiary of TRR incorporated under the laws of India 52.83
Sical Infra Assets Limited ('SIAL') a subsidiary of SL incorporated under the laws of India 53.60
Sical Iron Ore Terminal Limited a subsidiary of SL incorporated under the laws of India 63.00
Sical Iron Ore Terminal (Mangalore) a subsidiary of SL incorporated under the laws of India 100.00
Limited
Norsea Offshore India Limited a subsidiary of SL incorporated under the laws of India 100.00
Sical Mining Limited a subsidiary of SL incorporated under the laws of India 100.00
Sical Saumya Mining Limited a subsidiary of SL incorporated under the laws of India 65.00
Sical Bangalore Logistics Park Limited a subsidiary of SL incorporated under the laws of India 100.00
Sical Adams Offshore Limited a subsidiary of SL incorporated under the laws of India 100.00

148 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
Name of the entity Country of incorporation Percentage of
and other particulars holding (%)
Bergen Offshore Logistics Pte. Limited a subsidiary of SL incorporated under the laws of Singapore 100.00
('BOFL')
Norsea Global Offshore Pte Ltd a subsidiary of BOFL incorporated under the laws of Singapore 100.00
Sical Multimodal and Rail Transport a subsidiary of SIAL incorporated under the laws of India 100.00
Limited ('SMART')
Girividyuth India Limited a subsidiary of TDL incorporated under the laws of India 100.00
Wilderness Resorts Private Limited a subsidiary of CDHRPL incorporated under the laws of India 100.00
('WRPL')
Karnataka Wildlife Resorts Private Limited a subsidiary of WRPL incorporated under the laws of India 100.00
Mandi2Market Traders Private Limited a subsidiary of WSPL incorporated under the laws of India 100.00
(erstwhile Way2Wealth Institutional
Broking Private Limited / erstwhile
Way2Wealth Insurance Broking Private
Limited)
Way2Wealth Capital Private Limited a subsidiary of WSPL incorporated under the laws of India 100.00
Way2Wealth Realty Advisors Private a subsidiary of WSPL incorporated under the laws of India 94.99
Limited
Way2Wealth Brokers Private Limited a subsidiary of WSPL incorporated under the laws of India 100.00
('WBPL')
Way2Wealth Insurance Brokers Private a subsidiary of WSPL incorporated under the laws of India 100.00
Limited (erstwhile Total Insurance Brokers
Private Limited)
AlphaGrep Securities Private Limited a subsidiary of WSPL incorporated under the laws of India 51.00
(erstwhile Way2Wealth Illuminati
Securities Private Limited)
Way2Wealth Distributors Private Limited a subsidiary of WSPL incorporated under the laws of India 100.00
Way2Wealth Commodities Private Limited a subsidiary of WBPL incorporated under the laws of India 100.00
Way2Wealth Illuminati Pte. Limited a subsidiary of WBPL incorporated under the laws of Singapore 100.00
('W2WIP')
AlphaGrep Holding HK Limited ('AHHKL') a subsidiary of W2WIP incorporated under the laws of Hong Kong 100.00
AlphaGrep UK Limited a subsidiary of W2WIP incorporated under the laws of Hong Kong 100.00
Shanghai Dao Ge International Trading a subsidiary of W2WIP incorporated under the laws of Hong Kong 100.00
Limited
Magnasoft Consulting India Private a subsidiary of CDTL incorporated under the laws of India 77.88
Limited ('MCIPL')
Magnasoft Europe Limited a subsidiary of MCIPL incorporated under the laws of United 100.00
Kingdom
Magnasoft Spatial Services Inc. a subsidiary of MCIPL incorporated under the laws of Denver 100.00
ASSOCIATES
Ittiam Systems Private Limited an associate of TDL incorporated under the laws of India 21.91
Global Edge Software Private Limited an associate of CDTL incorporated under the laws of India 26.50
Mindtree Limited an associate of the Company and CDTL incorporated under the 16.70
laws of India
Barefoot Resorts and Leisure India Private an associate of CDHRPL incorporated under the laws of India 27.69
Limited
JOINT VENTURES
Coffee Day Schaerer Technologies Private a joint venture of CDGL incorporated under the laws of India 49.00
Limited (‘CDSTPL’)
PSA Sical Terminals Limited a joint venture of SL incorporated under the laws of India 37.50
Sical Sattva Rail Terminal Private Limited a joint venture of SMART incorporated under the laws of India 50.00

FINANCIAL SECTION | 149

Notes to the consolidated financial statements for the year ended 31 March 2017
2 BASIS OF PREPARATION
A Statement of compliance
These consolidated financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) as per
Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act 2013, (the 'Act') and other
relevant provisions of the Act.
The Group has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101, First‑Time
Adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted
in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which
was the previous GAAP. An explanation of how the transition to Ind AS has affected the previously reported financial position,
financial performance and cash flows of the Group is provided in Note 57.
Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
Details of the Group's accounting policies are included in note 3.
B Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated Ind AS financial statements
are presented in Indian rupee (Rs.), which is Coffee Day Enterprises Limited’s functional and presentation currency. All financial
information presented in Indian rupee has been rounded to the nearest million unless otherwise indicated.
C Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis, except for the following:
Items Measurement basis
Certain financial assets and liabilities (refer accounting Fair value
policy regarding financial instrument)
Derivative financial instrument Fair value
Share-based payment arrangements Fair value
Net defined benefit (asset)/ liability less present value Fair value of plan assets less present value of defined benefit plan
of defined obligations

D Current versus non-current classification

The Group presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realized within twelve months after the reporting period or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash
equivalents. The Group has identified twelve months as its operating cycle.
E Use of estimates and judgments
The preparation of the consolidated financial statements in conformity with Ind ASs requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.

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Notes to the consolidated financial statements for the year ended 31 March 2017
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimates are revised and in any future periods affected.
Judgments
Information about judgments made in applying accounting policies that have the most significant effects on the amounts
recognized in the consolidated financial statements is included in the following notes:
∞ note 23: Classification of an item as equity or liability;
∞ note 3(l): lease classification and straight lining of lease rentals.
Assumptions and estimation uncertainties
Information about judgments, assumptions and estimations uncertainties in applying accounting policies that have the most
significant effect on the amounts recognized in the financial statements is included in the following notes:
∞ note 4: depreciation method and useful life of items of property, plant and equipment;
∞ note 6: impairment of goodwill;
∞ note 44: provisions and contingencies; key assumptions about the likelihood and magnitude of an outflow of resources;
∞ note 49: measurement of defined benefit obligation - key actuarial assumptions.
∞ note 55: impairment of financial assets
F Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is
measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest..
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in
its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
The Group has an established control framework with respect to the measurement of fair values. The Group engages with
external valuers for measurement of fair values in the absence of quoted prices in active markets.
Significant valuation issues are reported to the Group’s audit committee. All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. If the inputs
used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value
measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant
to the entire measurement. The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets, and significant
liabilities, such as contingent consideration.

FINANCIAL SECTION | 151

Notes to the consolidated financial statements for the year ended 31 March 2017
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. This note summarizes
accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
- Financial instruments (note 55)
- Disclosures for valuation methods, significant estimates and assumptions (note 55)
- Quantitative disclosures of fair value measurement hierarchy (note 55)
- Financial instruments (including those carried at amortized cost) (note 55)
G Basis of Consolidation
Business combinations
Business combinations (other than common control business combinations) on or after 1 April 2015:
As part of its transition to Ind AS, the Group has elected to apply Ind AS 103, Business Combinations, to only those business
combinations that occurred on or after 1 April 2015. In accordance with Ind AS 103, the Group accounts for these business
combinations using the acquisition method when control is transferred to the Group. The consideration transferred for the
business combination is generally measured at fair value as at the date the control is acquired (acquisition date), as are the
net identifiable assets acquired. Any goodwill that arises is tested annually for impairment (see Note 6). The gain on business
combination is recognized directly in equity as capital reserve. Transaction costs are expensed as incurred, except to the extent
related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships with the
acquiree. Such amounts are generally recognized in the consolidated statement of profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration
that meets the definition of a financial instrument is classified as equity, then it is not remeasured subsequently and settlement
is accounted for within equity. Other contingent consideration is remeasured at fair value at each reporting date and changes
in the fair value of the contingent consideration are recognized in the consolidated statement of profit or loss.
If a business combination is achieved in stages, any previously held equity interest in the acquiree is re-measured at its
acquisition date fair value and any resulting gain or loss is recognized in the consolidated statement of profit or loss or OCI, as
appropriate.
Business combinations prior to 1 April 2015:
In respect of such business combinations, goodwill represents the amount recognized under the Group’s previous accounting
framework under Indian GAAP adjusted for the reclassification of certain intangibles.
Subsidiary companies
Subsidiary Companies are all entities (including structured entities) over which the group has control. The group controls an
entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
The Group combines the financial statements of the parent and its subsidiaries line by line adding together like items of
assets, liabilities, equity, income and expenses. Intercompany transactions, balances and unrealized gains on transactions
between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of
an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group.
Non-controlling interests (NCI)
NCI in the results and equity of subsidiaries are shown separately in the consolidated statement of profit and loss, consolidated
statement of changes in equity and balance sheet respectively. NCI are measured at their proportionate share of the acquiree's
net identifiable assets at the date of acquisition.
Changes in the Group's equity interest in a subsidiary that do not results in a loss of control are accounted for as equity
transactions.
Associates and Joint ventures
Interests in associates and joint ventures are accounted for using the equity method, after initially being recognized at cost in
the consolidated balance sheet.

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Notes to the consolidated financial statements for the year ended 31 March 2017
Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize
the group’s share of the post-acquisition profits or losses of the investee in profit and loss, and the group’s share of other
comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and
joint ventures are recognized as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any
other unsecured long-term receivables, the Group does not recognize further losses, unless it has incurred obligations or made
payments on behalf of the other entity.
Unrealized gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of
the Group’s interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary
to ensure consistency with the policies adopted by the Group.
The carrying amount of equity accounted investments are tested for impairment in accordance with the policy described in
note 3 (h)(ii) below.
Change in ownership interest
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the
adjustment to non-controlling interests and any consideration paid or received is recognized within equity.
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or
significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount
recognized in the consolidated statement of profit or loss. This fair value becomes the initial carrying amount for the purposes
of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income
are reclassified to profit or loss.

3 SIGNIFICANT ACCOUNTING POLICIES

a Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment, inclusive of excise duty
and net of taxes or duties collected on behalf of the government. The Group has concluded that it is the principal in all of
its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also
exposed to inventory and credit risks.
Sales tax/ value added tax (VAT) is not received by the Group on its own account. Rather, it is tax collected on value added to
the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognized.
Sale of products
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received
or receivable, net of returns, trade discounts and volume rebates. This inter alia involves discounting of the consideration due
to the present value if payment extends beyond normal credit terms. Revenue is recognized when the significant risks and
rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and
possible return of goods can be estimated reliably, there is no continuing effective control over, or managerial involvement
with, the goods, and the amount of revenue can be measured reliably. The timing of transfers of risks and rewards varies
depending on the individual terms of sale.
For customer loyalty programmes, the fair value of the consideration received or receivable in respect of the initial sale is
allocated between the award credits and the other components of the sale. The amount allocated to award credits is deferred
and is recognized as revenue when the award credits are redeemed and the Group has fulfilled its obligations to supply
the discounted products under the terms of the programme or when it is no longer probable that the award credits will be
redeemed.
Sale of services
Service revenues are recognized as the services are performed. Services provided pursuant to a contract are either recognized
over the contract period or upon completion of the elements specified in the contract depending on the terms of the contract.

FINANCIAL SECTION | 153

Notes to the consolidated financial statements for the year ended 31 March 2017
Operating revenues from the integrated logistics services / distribution and maintenance of vending machines are recognized
when the services are rendered. Revenues include unbilled as well as billed amounts.
Revenue from software development on time-and material basis is recognized as the related services are rendered. Revenue
from fixed price contracts is recognized using the proportionate completion method, which is determined by relating the
actual project cost of work performed to date to the estimated total project cost for each contract.
Provision for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable
based on the current contract estimates. Maintenance revenue is recognized ratably over the period of the maintenance
contract.
Income from operations of resort primarily comprises revenue from room rentals and sale of food and beverage charges. Such
service income is recognized when the related services are rendered unless significant future contingencies exist.
Income from leasing of commercial office space
The Company derives its revenue from licensing of usage of property to companies. License fee is in the nature of operating
lease income and is recognized as per the terms of agreement unless the escalation is not in line with inflation. Where escalation
is not in line with inflation revenue is recognized on a straight line basis over the non-cancellable lease term. Maintenance,
electricity and transportation income are recognized on the accrual basis in accordance with the terms of the agreements with
lessees.
Advance rent received is amortized on a straight line basis over the Lock-in period and income is recognized under income
from operations.
Income from financial services
Trading income is recognized when a legally binding contract is executed.
Brokerage income and transaction charges are recognized on the trade date of the transaction upon confirmation of the
transaction by the exchanges. Brokerage income from mutual funds, Initial Public Offer, fixed deposits of Companies and Post
Office are accounted on accrual basis as per the statement of accounts received from the respective organizations.
Income from consultancy services is accounted for on the basis of actual progress/technical assessment of work executed, in
line with the terms of respective consultancy contracts.
Interest income from debt instruments is recognized using the effective interest rate method. The effective interest rate is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying
amount of a financial asset. When calculating the effective interest rate, the Group estimates the expected cash flows by
considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
Depository transaction charges are recognized on completion of respective transaction. Annual maintenance charges for
depository accounts are accounted as and when the services are rendered.
Income from portfolio management fees are recognized on the basis of agreements entered into with clients and when the
right to receive income is established.
Futures and options trading income comprises of profit/ loss on derivative instruments and these are marked to market.
Other operating revenues
Import entitlements, which are primarily provided for shipping a specified cumulative volume or shipping to/from specific
locations, are recorded on accrual basis based on actual export revenue for the year and pro-rated based on actual or projected
realization of the entitlement. When using realization, we rely on historic trends as well as economic and other indicators to
estimate the recorded revenue for import entitlements.
Revenue from franchisee arrangement consists of sale of coffee products and other related products as well as royalties paid by
franchisees to use the ‘Coffee Day’ brand. Sales of coffee products and other related products are recognized on transfer of all
significant risks and rewards of ownership to franchisee. Royalty revenues are recognized based upon a percentage of reported
revenues by the franchisee in accordance with the terms of the relevant arrangement unless significant future contingencies
exist.
Income from advertising is recognized ratably over the period of the contract and in accordance with the terms and conditions
of the contract.
Gain/ loss from commodity future transactions is settled on a net basis and recognized on accrual basis in the consolidated
statement of profit and loss.
Other income
Interest income from debt instruments is recognized using the effective interest rate method. The effective interest rate is the

154 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying
amount of a financial asset. When calculating the effective interest rate, the Group estimates the expected cash flows by
considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic
benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.
b Property, plant and equipment
1. Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated
depreciation and accumulated impairment losses, if any. Cost of an item of property, plant and equipment comprises its
purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates,
any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of
dismantling and removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any
other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of
dismantling and removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as
separate items (major components) of property, plant and equipment.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included
in the income statement when the asset is derecognized.
2. Transition to Ind AS
Certain items of property, plant and equipment have been measured at fair value at the date of transition to Ind AS. The
Group regards the fair value as deemed cost at the transition date, viz., 1 April 2015. Refer note 57.
3. Subsequent expenditure
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the
expenditure will flow to the Group.
4. Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over
their estimated useful lives using the straight-line method as well as written down value basis from the date the assets
are ready for intended use, and is generally recognized in the consolidated statement of profit and loss. Assets acquired
under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. The building built on
leasehold land is classified as building and is amortized over the lease term or the useful life of the building, whichever is
lower.
Coffee business
The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as
follows:
Asset Management estimate of useful lives Method of depreciation
Building 30 – 60 years SLM
Leasehold improvements 9 years SLM
Plant and machinery 12 years SLM
Office equipment 5 years SLM
Furniture and fixtures 8 - 10 years SLM
Computers 3 years SLM
Vehicles 8 years SLM
Coffee vending machines 7 - 9 years SLM
Leasehold land Lease term SLM

FINANCIAL SECTION | 155

Notes to the consolidated financial statements for the year ended 31 March 2017
Integrated Logistics business
The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as
follows:
Asset Management estimate of useful lives Method of depreciation
Buildings 30 / 60 years SLM
Furniture & Fixtures 10 / 15 years SLM/WDV
Office Equipments 5 years SLM
Computers 3 / 5 years SLM/WDV
Plant & Machinery 5 years SLM
Vehicles 8 years SLM
Port handling equipment 20 years SLM
Electrical Installations 10 / 5 years SLM/WDV
Dredger 14 years SLM
Tender boat 14 years SLM
Pipes and floaters 20 years WDV

Hospitality business
The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as
follows:
Asset Management estimate of useful lives Method of depreciation
Leasehold improvements 20 years SLM
Plant and machinery 8 years SLM
Office equipment 6 years SLM
Computers (including software) 2 years SLM
Furniture and fixtures 8 years SLM
Vehicles 6 years SLM
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as given
above best represent the period over which management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which asset is ready for
use (disposed of ).
5. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated
intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in profit
or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an
intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered
to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The
amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss unless such
expenditure forms part of carrying value of another asset.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually
or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the
indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective
basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the consolidated statement of profit or loss when
the asset is derecognized.

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Notes to the consolidated financial statements for the year ended 31 March 2017
The estimated useful lives of items of finite intangibles of the Group for the current and comparative periods are as
follows:
Asset Management estimate of useful lives Method of amortization
Computer software 2 - 6 years SLM
License fees 20 years SLM
North star software 3 years SLM
6. Investment properties
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group,
is classified as investment property. Investment property is measured initially at its cost, including related transaction
costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset’s carrying amount only
when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of
the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an
investment property is replaced, the carrying amount of the replaced part is derecognized.
Investment property comprise of assets land, building, and other assets such as plant & machinery, furniture & fixtures
and equipments which are integral to the generation of cash flows of group of assets. These asset are depreciated using
straight line method over their estimated useful life as mentioned in the table below.
Though the Company measures investment property using cost based measurement, the fair value of investment
property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited
external independent valuer.
The estimated useful lives of items of the Group for the current and comparative periods are as follows:
Asset Management estimate of useful lives Method of amortization
Building 60 Years SLM
Plant and machinery 15 Years SLM
Furniture and fixtures 6 Years SLM
Office equipment 5 Years SLM

c Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-
out formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs
incurred in bringing them to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.
The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products.
Raw materials, components and other supplies held for use in the production of finished products are not written down below
cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed
their net realisable value.
The comparison of cost and net realisable value is made on an item-by-item basis.
d Employee benefits
Defined contribution plan
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay further amounts. The Group makes specified monthly contributions
towards Government administered provident fund scheme. Obligations for contributions to defined contribution plans are
recognised as an employee benefit expense in profit or loss in the periods during which the related services are rendered by
employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments
is available.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation
in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that
employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan
assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value

FINANCIAL SECTION | 157

Notes to the consolidated financial statements for the year ended 31 March 2017
of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the
plan (‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum
funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Group determines
the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used
to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset),
taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and
benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service
(‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in profit or loss. The Group
recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Short-term employee benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided. A liability is recognised for the amount expected to be paid, if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be
estimated reliably.
Long-term employee benefit
The liabilities for compensated absences are not expected to be settled wholly within 12 months after the end of the period
in which the employee render the related services. The present value of compensated absences obligation is determined
based on actuarial valuations carried out by an independent actuary using the Projected Unit Credit Method, as at year end.
The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the
present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the
balance sheet date, having maturity periods approximating to the terms of related obligations. Remeasurements as a result
of experience adjustments and changes in actuarial assumptions are recognised in the consolidated statement of profit and
loss. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or
settlement occurs.
Share-based payment transactions
The grant date fair value of equity settled share-based payment awards granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the
awards. The amount recognised as expense is based on the estimate of the number of awards for which the related service and
non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on
the number of awards that do meet the related service and non-market vesting conditions at the vesting date. For share-based
payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such
conditions and there is no true-up for differences between expected and actual outcomes.
e Foreign currency transactions
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions or an average rate if the average rate approximates the actual rate at the date of transaction. Monetary assets and
liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting
date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional
currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured
based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Exchange differences are recognised in profit or loss, except exchange differences arising from the translation of the following
items which are recognised in OCI:
- equity investments at fair value through OCI (FVOCI);
- a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective
- qualifying cash flow hedges to the extent that the hedges are effective;
As per Ind AS 101, the Group has chosen to avail the exemption of capitalising the exchange difference arising from foreign
currency loan taken on or before 31 March 2016 and not recognised in the consolidated statement of profit and loss.
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into Rs.at the rate of exchange prevailing at the
reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions.

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Notes to the consolidated financial statements for the year ended 31 March 2017
For practical reasons, the group uses an average rate to translate income and expense items, if the average rate approximates
the exchange rates at the dates of the transactions. The exchange differences arising on translation for consolidation are
recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is
recognised in the statement of consolidated profit or loss.
Any goodwill arising in the acquisition/ business combination of a foreign operation on or after 1 April 2014 and any fair value
adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the
foreign operation and translated at the spot rate of exchange at the reporting date.
Any goodwill or fair value adjustments arising in business combinations/ acquisitions, which occurred before the date of
transition to Ind AS (1 April 2014), are treated as assets and liabilities of the entity rather than as assets and liabilities of the
foreign operation. Therefore, those assets and liabilities are non-monetary items already expressed in the functional currency
of the parent and no further translation differences occur.
f Income taxes
Income tax comprises current and deferred tax. It is recognised in the consolidated statement of profit and loss except to the
extent that it relates to an item recognised directly in equity or in other comprehensive income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment
to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax
amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using
tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised
amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
Current tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive
income or in equity). Current tax items are recognised in correlation to the underlying transaction either in Other Comprehensive
Income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Minimum alternate tax (‘MAT’) paid in a year is charged to the consolidated statement of profit and loss as current tax. The
Group recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Group will
pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward.
In the year in which the Group recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for
Credit Available in respect of Minimum Alternative Tax under the Income tax Act, 1961, the said asset is created by way of
credit to the consolidated statement of profit and loss and shown as ‘MAT Credit Entitlement’. The Group reviews the ‘MAT
credit entitlement’ asset at each reporting date and writes down the asset to the extent the Group does not have convincing
evidence that it will pay normal tax during the specified period.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in
respect of carried forward tax losses and tax credits.
Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:
- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss at the time of the transaction;
- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group
is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the
foreseeable future; and
- taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the
related tax benefit will be realized. Deferred income tax assets and liabilities are measured using tax rates and tax laws that
have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on
deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the
substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit
will be available against which the deductible temporary differences and tax losses can be utilized.

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Notes to the consolidated financial statements for the year ended 31 March 2017
g Provisions and contingent liabilities
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to
settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected
future operating losses are not provided for.
Onerous contracts
A contract is considered to be onerous when the expected economic benefits to be derived by the Group from the contract
are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is
measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of
continuing with the contract.
Before such a provision is made, the Group recognises any impairment loss on the assets associated with that contract.
The disclosure of contingent liability is made when, as a result of obligating events, there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources.
h Impairment
(i) Impairment of financial instruments
The Group recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost; and
- financial assets measured at FVOCI- debt investments.
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI
are credit‑impaired. A financial asset is ‘credit‑impaired’ when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit‑impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or being past due for one year or more;
- the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for a security because of financial difficulties.
The Group measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which
are measured as 12 month expected credit losses:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of
the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected
life of a financial instrument.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible
within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period
over which the Group is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating expected credit losses, the Group considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on
the Group’s historical experience and informed credit assessment and including forward‑ looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Group considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such
as realising security (if any is held); or
- the financial asset is one year or more past due.

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Notes to the consolidated financial statements for the year ended 31 March 2017
Measurement of expected credit losses:
Expected credit losses are a probability‑weighted estimate of credit losses. Credit losses are measured as the present value
of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the
cash flows that the Group expects to receive).
Presentation of allowance for expected credit losses in the balance sheet:
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the
assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or
sources of income that could generate sufficient cash flows to repay the amounts subject to the write‑off. However,
financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s
procedures for recovery of amounts due.
(ii) Impairment of non-financial assets:
The Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating
units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent
of the cash inflows of other assets or CGUs.
Goodwill arising from a business combination is allocated to CGUs or Groups of CGUs that are expected to benefit from
the synergies of the combination.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell.
Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset). In
determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can
be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted
share prices for publicly traded companies or other available fair value indicators.
The Group’s corporate assets (e.g., central office building for providing support to various CGUs) do not generate
independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs
to which the corporate asset belongs. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds
its estimated recoverable amount. Impairment losses are recognised in the consolidated statement of profit and loss.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the consolidated statement of profit and loss. Impairment loss recognised in respect
of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the
carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not subsequently reversed. In respect of assets for which impairment loss
has been recognised in prior periods, the Group reviews at each reporting date whether there is any indication that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. Such a reversal is made only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss
had been recognised.
i Earnings per share
The basic earnings per share is computed by dividing the net profit attributable to owner's of the Group for the year by the
weighted average number of equity shares outstanding during reporting period.
Diluted Earnings Per Share amounts are calculated by dividing the profit attributable to equity holders of the parent (after
adjusting for interest on the convertible preference shares) by the weighted average number of equity shares outstanding
during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive
potential equity shares into equity shares.
Dilutive potential equity shares are deemed converted as of the beginning of the reporting date, unless they have been issued
at a later date. In computing diluted earnings per share, only potential equity shares that are dilutive and which either reduces
earnings per share or increase loss per share are included.

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Notes to the consolidated financial statements for the year ended 31 March 2017
j Cash and cash equivalents
Cash and cash equivalents in the consolidated balance sheet comprises of cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
k Cash flow statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of
a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Group are segregated.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits,
as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.
l Leases
As a lessee
Assets held under leases
Leases of property, plant and equipment that transfer to the Group substantially all the risks and rewards of ownership are
classified as finance lease. The leased assets are measured initially at an amount equal to the lower of their fair value and the
present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance
with the accounting policy applicable to similar owned assets. Assets held under leases that do not transfer to the Group
substantially all the risks and rewards of ownership (i.e. operating leases) are not recognised in the Group’s consolidated
balance sheet.
Lease payments
Payments made under operating leases are generally recognised in profit or loss on a straight-line basis over the term of the
lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessor’s
expected inflationary cost increases. Lease incentives received are recognised as an integral part of the total lease expense over
the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance charge and
the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce
a constant periodic rate of interest on the remaining balance of the liability.
As a lessor
Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line basis over the lease
term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected
inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
m Government grants
Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be
received and all attaching conditions will be complied with.
Since the grant compensates the Group for expenses incurred, it is recognised in the consolidated statement of profit and loss
as a reduction from the respective expenses on a systematic basis in the periods in which such expenses are recognised.
n Contributed equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
o Goodwill
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount
recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities
assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses
whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used
to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value
of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in
equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in
equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-
generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there
is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying

162 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to
the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill
is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the
goodwill associated with the disposed operation is included in the carrying amount of the operation when determining
the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the
disposed operation and the portion of the cash-generating unit retained. If the initial accounting for a business combination
is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts
for the items for which the accounting is incomplete. Those provisional amounts are adjusted through goodwill during the
measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and
circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.
These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from
the acquisition date.
p Financial instruments
i. Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets
and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the
instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and
loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement
Financial assets: Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at
- amortised cost;
- Fair value through other comprehensive income (FVOCI) – debt investment;
- FVOCI – equity investment; or
- FVTPL
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Group changes
its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
FVTPL:
− the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
− the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
− the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets; and
− the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI (designated as FVOCI – equity investment). This election is made
on an investment‑ by‑ investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that
otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
Financial assets: Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at an individual
asset level because this best reflects the way the business is managed and information is provided to management. The
information considered includes:
− the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether
management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile,

FINANCIAL SECTION | 163

Notes to the consolidated financial statements for the year ended 31 March 2017
matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising
cash flows through the sale of the assets;
– how the performance of the portfolio is evaluated and reported to the Group’s management;
– the risks that affect the performance of the business model (and the financial assets held within that business model)
and how those risks are managed;
– how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets
managed or the contractual cash flows collected; and
– the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations
about future sales activity.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are
measured at FVTPL.
Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition.
‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal
amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that
could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this
assessment, the Group considers:
− contingent events that would change the amount or timing of cash flows;
− terms that may adjust the contractual coupon rate, including variable interest rate features;
− prepayment and extension features; and
− terms that limit the Group’s claim to cash flows from specified assets (e.g. non‑ recourse features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include
reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at
a significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an
amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which
may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if
the fair value of the prepayment feature is insignificant at initial recognition.
Financial assets: Subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any
interest or dividend income, are recognised in profit or loss. However, refer note 3(p)(v) for
derivatives designated as hedging instruments.
Financial assets at These assets are subsequently measured at amortised cost using the effective interest
amortised cost method. The amortised cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss
on derecognition is recognised in profit or loss.
Debt investments at These assets are subsequently measured at fair value. Interest income under the effective
FVOCI interest method, foreign exchange gains and losses and impairment are recognised in profit
or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses
accumulated in OCI are reclassified to profit or loss.
Equity investments at These assets are subsequently measured at fair value. Dividends are recognised as income
FVOCI in profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and are not reclassified to
profit or loss.
Financial liabilities: Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it
is classified as held‑ for‑ trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or
loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest

164 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss. See note 55 for financial liabilities designated as hedging instruments.
iii.
Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards
of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the
risks and rewards of ownership and does not retain control of the financial asset.
If the Group enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Group also derecognises a financial liability when its terms are modified and the cash flows under the modified terms
are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The
difference between the carrying amount of the financial liability extinguished and the new financial liability with modified
terms is recognised in profit or loss.
iv.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only
when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a
net basis or to realise the asset and settle the liability simultaneously.
v. Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded
derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset
and certain criteria are met.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and
changes therein are generally recognised in profit or loss. The Group designates certain derivatives as hedging instruments
to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in interest
rates.
At inception of designated hedging relationships, the Group documents the risk management objective and strategy
for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the
hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are
expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of
the derivative is recognised in OCI and accumulated in the other equity under ‘effective portion of cash flow hedges’. The
effective portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change
in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion
of changes in the fair value of the derivative is recognised immediately in profit or loss.
The amount accumulated in other equity is reclassified to profit or loss in the same period or periods during which the
hedged expected future cash flows affect profit or loss.
If a hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated
or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is
discontinued, the amount that has been accumulated in other equity remains there until, it is reclassified to profit or loss
in the same period or periods as the hedged expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other
equity are immediately reclassified to profit or loss.
vi. Compound financial instruments
Compound financial instruments are those instruments which contains both a financial liability component and an equity
component. The option to convert the financial instrument into equity shares of the Group would be with the holder of
the instrument.

FINANCIAL SECTION | 165

Notes to the consolidated financial statements for the year ended 31 March 2017
The liability component of a compound financial instrument is initially recognised at the fair value of a similar liability
that does not have an equity conversion option. The equity component is initially recognised at the difference between
the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly
attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying
amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured
subsequently.
Interest related to the financial liability is recognised in profit or loss (unless it qualifies for inclusion in the cost of an asset).
In case of conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised.
q Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale.
Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
r Segment reporting
Based on the "management approach" as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker
evaluates the Group performance and allocates resources based on an analysis of various performance indicators by business
segments. Accordingly, information has been presented along these business segments viz. Coffee and related business,
Integrated multimodal logistics, Financial services, Leasing of commercial office space, Hospitality services and Investment
and other corporate functions.
s Recent accounting pronouncements
(a) Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments)
Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These
amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB)
to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the
Group from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-
cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for
liabilities arising from financing activities, to meet the disclosure requirement.
The Group is evaluating the requirements of the amendment and the effect on the financial statements.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-
settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled
awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market
performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to
vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are
modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted
for as such from the date of the modification. Further, the amendment requires the award that include a net settlement
feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority
is treated as if it was part of an equity settlement.
The Group does not have any cash settled awards and accordingly this is not applicable.

166 | COFFEE DAY | ANNUAL REPORT 2016-17

 Notes to the consolidated financial statements for the year ended 31 March 2017
4 PROPERTY, PLANT AND EQUIPMENT AND CAPITAL WORK-IN-PROGRESS
(Rs. in million)
Particulars Owned Leased Total Capital
work-in-
Freehold Buildings Leasehold Plant and Office Furniture and Dredger Tender Pipes and Electrical Port Computers Vehicles Coffee Plant and Leasehold
progress
land (refer note i) improvements equipment equipment fixtures boat floaters installation handling vending equipment land (refer
equipment machine (refer note iii) note iii)
Cost or deemed cost:
Balance as at 1 April 2015 4,091.94 2,876.65 2,366.35 2,792.86 154.78 568.59 1,292.10 30.40 11.00 0.40 1,165.20 178.91 708.57 2,041.90 25.87 968.09 19,273.61 6,117.61
Additions (refer note ii) 3.60 64.51 549.71 574.21 18.13 357.60 75.20 1.80 - - 2.16 26.33 489.86 738.27 13.37 - 2,914.75 2,315.76
Reclassification (refer note iv) - - 19.59 (58.57) 10.33 25.73 - - - - - 2.92 - - - - - -
Disposals/ capitalisation - - (34.46) (54.39) (0.38) (3.48) - - - - - (0.90) (121.77) - - - (215.38) (1,370.13)
Exchange differences on translation of - - 5.91 9.04 1.86 4.86 - - - - - 0.46 - - - - 22.13 -
foreign operations (refer note v)
Balance as at 31 March 2016 4,095.54 2,941.16 2,907.10 3,263.15 184.72 953.30 1,367.30 32.20 11.00 0.40 1,167.36 207.72 1,076.66 2,780.17 39.24 968.09 21,995.11 7,063.24
Balance as at 1 April 2016 4,095.54 2,941.16 2,907.10 3,263.15 184.72 953.30 1,367.30 32.20 11.00 0.40 1,167.36 207.72 1,076.66 2,780.17 39.24 968.09 21,995.11 7,063.24
Additions (refer note ii) 57.59 219.98 347.56 563.61 63.45 269.13 - - - - 2.10 47.58 1,152.95 973.28 3.53 - 3,700.76 2,484.97
Disposals/ capitalisation - - (29.60) - (0.20) (12.82) (30.00) (0.70) - - - (0.80) (0.80) - - - (74.92) (1,391.84)
Exchange differences on translation of - - (3.16) (6.01) (1.06) (3.10) - - - - - (0.25) - - - - (13.58) -
foreign operations (refer note v)
Balance as at 31 March 2017 4,153.13 3,161.14 3,221.90 3,820.75 246.91 1,206.51 1,337.30 31.50 11.00 0.40 1,169.46 254.25 2,228.81 3,753.45 42.77 968.09 25,607.37 8,156.37
Accumulated depreciation
Balance as at 1 April 2015 - 238.80 99.62 571.39 117.99 194.93 311.60 6.30 7.20 0.24 794.60 148.48 358.54 - 21.54 - 2,871.23 -
Depreciation for the year (refer Note 41) - 114.10 567.33 441.49 17.66 128.20 86.00 2.00 0.60 0.10 56.90 12.50 75.44 390.89 5.05 - 1,898.26 -
Reclassification (refer note iv) - - 22.15 (54.99) 8.35 22.22 - - - - - 2.27 - - - - - -
Exchange differences on translation of - - 5.25 5.79 1.44 3.94 - - - - - 0.48 - - - - 16.90 -
foreign operations (refer note v)
Disposals - - (18.70) (23.99) (0.38) (0.45) - - - - - (0.84) (108.34) - - - (152.70) -
Balance as at 31 March 2016 - 352.90 675.65 939.69 145.06 348.84 397.60 8.30 7.80 0.34 851.50 162.89 325.64 390.89 26.59 - 4,633.69 -
Balance as at 1 April 2016 - 352.90 675.65 939.69 145.06 348.84 397.60 8.30 7.80 0.34 851.50 162.89 325.64 390.89 26.59 - 4,633.69 -
Depreciation for the year (refer Note 41) - 119.58 589.87 451.20 20.21 168.80 89.20 2.10 0.50 - 52.20 15.03 147.71 460.13 6.00 - 2,122.53 -
Exchange differences on translation of - - (4.18) (3.66) (0.95) (2.26) - - - - - (0.23) - - - - (11.28) -
foreign operations (refer note v)
Disposals - - (26.59) - (0.20) (13.89) - - - - - (0.70) (0.80) - - - (42.18) -
Balance as at 31 March 2017 - 472.48 1,234.75 1,387.23 164.12 501.49 486.80 10.40 8.30 0.34 903.70 176.99 472.55 851.02 32.59 - 6,702.76 -
Carrying amount:
As at 1 April 2015 4,091.94 2,637.85 2,266.73 2,221.47 36.79 373.66 980.50 24.10 3.80 0.16 370.60 30.43 350.03 2,041.90 4.33 968.09 16,402.38 6,117.61
As at 31 March 2016 4,095.54 2,588.26 2,231.45 2,323.46 39.66 604.46 969.70 23.90 3.20 0.06 315.86 44.83 751.02 2,389.28 12.65 968.09 17,361.42 7,063.24
As at 31 March 2017 4,153.13 2,688.66 1,987.15 2,433.52 82.79 705.02 850.50 21.10 2.70 0.06 265.76 77.26 1,756.26 2,902.43 10.18 968.09 18,904.61 8,156.37

FINANCIAL SECTION | 167

Notes to the consolidated financial statements for the year ended 31 March 2017
4 PROPERTY, PLANT AND EQUIPMENT AND CAPITAL WORK-IN-PROGRESS (Contd.)
Notes:
i) Includes building constructed on leasehold land.
ii) As per Ind AS 101, a first-time adopter may continue the policy adopted for accounting for exchange differences arising from
translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately
before the beginning of the first Ind AS financial reporting period as per the previous GAAP. Accordingly, the Group has opted to
avail the option as given in paragraph D13AA of Ind AS 101 - First-time Adoption of Indian Accounting Standards and accordingly
capitalised foreign exchange gain/ (loss) of Rs.24.82 million (31 March 2016: (Rs.159.82 million)).
iii) Finance leases
- The carrying value of land held under finance leases as at 31 March 2017 was Rs.968.09 million (31 March 2016: Rs.968.09 million, 1
April 2015: Rs.968.09 million). The Group has taken land admeasuring 10.05 acres in Chikmangalur on lease for a period of 99 years
on 1 April 1995. The Group has classified the lease as as a finance lease since it has an option to purchase the land at the end of the
lease period.
- Leased plant and machinery represents assets acquired under finance leases contracts. Leased assets are pledged as security for
the related finance lease liabilities.
iv) Represents reclassification of certain assets in the previous year from plant and machinery to other asset categories.
v) Represents the effect of translation of assets held by foreign subsidiaries.
vi) Security
- Property, plant and equipment amounting to Rs.15,969.43 million as at 31 March 2017 (31 March 2016: Rs.14,215.12 million; 1 April
2015: Rs.13,239.71 million) has been pledged as security by the Company against loans taken from banks and financial institutions.
- Vehicles with a carrying amount of Rs.11.35 million as at 31 March 2017 (31 March 2016: Rs.1.93 million, 1 April 2015: Rs.2.85 million)
are subject to vehicles loans from bank.
vii) Contractual obligations
Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities on account of cafés in the
course of opening amounting to Rs.23.23 million (March 2016: 132.74 million, April 2015: 203.18 million).
viii) Significant estimates
Property, plant and equipment represents a significant proportion of the asset base of the Group. The charge in respect of periodic
depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of
its life, if any. The useful lives and residual values of Group'sassets are determined by management at the time the asset is acquired
and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well
as anticipation of future events, which may impact their life, such as changes in technology. (Refer note 2(e))

5 INVESTMENT PROPERTY
(Rs. in million)
Particulars Owned Total
Freehold Buildings Plant and Furniture Office
land equipment and fixtures equipment
Cost or deemed cost:
Balance as at 1 April 2015 481.84 4,995.69 804.14 179.77 9.38 6,470.82
Additions - 809.39 152.14 17.98 1.18 980.69
Balance as at 31 March 2016 481.84 5805.08 956.28 197.75 10.56 7451.51
Balance as at 1 April 2016 481.84 5805.08 956.28 197.75 10.56 7451.51
Additions 225.03 156.31 0.88 - - 382.22
Deletions - - - (3.53) - (3.53)
Balance as at 31 March 2017 706.87 5961.39 957.16 194.22 10.56 7830.20
Accumulated depreciation
Balance as at 1 April 2015 - 1528.37 410.47 153.77 9.29 2101.90
Depreciation for the year (refer note 41) - 392.31 153.37 16.62 0.06 562.36
Balance as at 31 March 2016 - 1920.68 563.84 170.39 9.35 2664.26
Balance as at 1 April 2016 - 1920.68 563.84 170.39 9.35 2664.26
Depreciation for the year (refer note 41) - 68.24 30.45 11.20 0.25 110.14
Balance as at 31 March 2017 - 1988.92 594.29 181.59 9.60 2774.40
Carrying amount:
As at 1 April 2015 481.84 3467.32 393.67 26.00 0.09 4368.92
As at 31 March 2016 481.84 388.40 392.44 27.36 1.21 4787.25
As at 31 March 2017 706.87 3972.47 362.87 12.63 0.96 5055.80

168 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
5 INVESTMENT PROPERTY (Contd.)
A. Notes:
i) For investment property existing as on 1 April 2015, i.e. its date of transition to Ind AS, the group has used Indian GAAP carrying
value as deemed cost.
ii) During the year the Company has changed the useful life of building from 30 to 60 years, Plant and machinery from 6 to 15
years and depreciation on the same has been accounted prospectively.
iii) As per Ind AS 101, a first-time adopter may continue the policy adopted for accounting for exchange differences arising
from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending
immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP. Accordingly, the
Group has opted to avail the option as given in paragraph D13AA of Ind AS 101 - First-time Adoption of Indian Accounting
Standards and accordingly capitalised foreign exchange gain/ (loss) of Rs.164.49 million (31 March 2016: (Rs.411.93 million);
1 April 2015: (Rs.274.21 million)).
iv) Borrowing cost capitalised during the year amounts to Rs.242.46 million (31 March 2016: Rs.275.78 million); 1 April 2015:
(Rs.303.57 million)
v) Contractual obligations
Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities amounting to Rs.370.00
million (March 2016: Rs.227.00 million, April 2015: Rs.59.00 million).
vi) Security
Investment property amounting to Rs.4,698 million as at 31 March 2017 (31 March 2016: Rs.4,429 million; 1 April 2015: Rs.4,011
million) has been pledged as security by the Company against loans taken from banks and financial institutions.
B. Amounts recognised in profit and loss for investment properties
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Rental income derived from investment properties 1,100.34 1,000.42
Direct operating expenses (including repairs and maintenance) (61.16) (58.78)
Profit arising from investment properties before depreciation and indirect expenses 1,039.18 941.64
Less: Depreciation (110.14) (562.36)
Profit arising from investment properties before indirect expenses 929.04 379.28
C. Fair value
The Group obtains independent valuations for its investment properties at least annually. As at 31 March 2017, 31 March 2016 and
1 April 2015, the fair values of the properties are Rs.22,388 million, Rs.21,776 million and Rs.17,794 million respectively. The fair value
of investment property has been determined by external, independent property valuers, having appropriate recognised professional
qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the
investment property has been categorised as level 3 fair value based on the inputs to the valuation techniques used.
All resulting fair value estimated for investment properties are based on the inputs as follows:
Valuation technique Significant Inter-relationship between key unobservable
unobservable inputs inputs and fair value measurement
Considering the revenue generating - Teminal yield rate: 31 March 2017: - Teminal Yield Rate: - Increase in 100 basis points in terminal
potential of the existing built-up area 10.7%; 31 March 2016: 10.7%,; 1 April yield would result in fair valuation of Rs.19,398 million
both under Part A (Non-SEZ) and Part 2015: 10.7%. - Decrease in 100 basis points in terminal yield would result
B (SEZ), opinion on Market Value of the
– Discount rates: 31 March 2017: 13%, in fair valuation of Rs.24,207 million
built-up area of the Project Site - 1 is
31 March 2016 : 13%, 31 March 2015 - Discount rates: - Increase in 100 basis points in risk through
offered using ‘Discounted Cash Flow’
13%. increased discount rate would result in fair valuation of
approach. Further, the Project Site - 1
Rs.20,747 million
also has unutilized built potential under - Benchmark rentals - 44 per sq. ft. per
both SEZ & Non-SEZ area of about month - Decrease in 100 basis points in risk through increased
7,170,410 sq. ft. Since the micro-market discount rate would result in fair valuation of Rs.22,482
- Occupancy loss for each lease renewal- million
does not have large land parcels
Nil
transacted/sold and/or available for - Benchmark Rentals - Increase in benchmark rentals by
sale, the opinion on Market Value of - Rent free period for new leases - Nil 500 basis points would result in fair valuation of Rs.23,030
the unutilized built potential of the million.
Project Site - 1 is offered using only - Decrease in benchmark rentals by 500 basis points would
‘Residual’ Approach. The paragraphs result in fair valuation of Rs.20,126 million.
below present description of the
- Occupancy Loss for each lease renewal by six months
proposed valuation approaches used
would result in fair valuation of Rs.21,307 million
in the valuation of different project
components of the Project Site - 1. - Rent Free period for new leases if increased to one year
would result in fair valuation of Rs.20,699 million.

FINANCIAL SECTION | 169

Notes to the consolidated financial statements for the year ended 31 March 2017
5 INVESTMENT PROPERTY (Contd.)
Discounted Cash Flow Approach: The discounted cash flow method is based on the present value of the future receivable net income
from the current operational leases / revenues. The current revenues and the future achievable revenues derived from the operational
project components of the project site would be adjusted for the outgoing expenses to derive 10-year cash flows. The same is then
discounted at an appropriate discounting rate linked with risk adjusted discounting factor to arrive at the sale value for the operational
project components.
Residual Approach: Residual approach is adopted in valuing the unutilized land parcel vis- à-vis the property with the benefit of the
proposed development scheme together with the provided information and relevant assumptions. The residual approach involves
firstly the assessment of the capital value of the land parcel vis-à-vis the property on completion basis i.e. assuming completed as at the
date of valuation. Estimated total cost of the construction of the development including fees, plus an allowance for interest and other
associated expenditure including developer’s risk and profit are deducted from the gross development value. The resultant figure is
the residual value. This method is subject to a number of hypothetical assumptions/ parameters. A slight change in one or more of the
assumptions/ parameters would have a significant impact on the conclusions reached.
6 GOODWILL
(Rs. in million)
Particulars As at As at 31 March
31 March 2017 2016
Carrying amount at the beginning of the year 5,017.04 5,009.05
Exchange differences on translation of foreign operations (9.12) 7.99
Provision for impairment of goodwill (7.07) -
Carrying amount at the end of the year 5,000.85 5,017.04
For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent the lowest level within
the Group at which goodwill is monitored for internal management purposes, which is not higher than the Group’s operating segments.
The aggregate carrying amounts of goodwill allocated to each unit are as follows:-
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Coffee and related business 3,358.12 3,367.25
Financial services 864.79 864.79
Hospitality services 402.10 402.10
Integrated multimodal logistics 303.12 303.12
Multiple units without significant goodwill 79.79 79.78
Less: impairment of goodwill in coffee business (7.07) -
5,000.85 5,017.04
The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. The fair value of a CGU is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date or the market capitalization as at the date of reporting. Value in use is generally calculated as the net present value of the projected
post-tax cash flows, based on financial budgets approved by management at the assumptions mentioned below plus a terminal value
of the cash generating unit to which the goodwill is allocated. Management has determined the values assigned to each of the key
assumptions as follows:
Assumption Approach used to determining values
Terminal value growth rate This is the weighted average growth rate used to extrapolate revenue beyond the budget period. The
rates are consistent with forecasts included in industry reports.
Discount rate Reflect specific risks relating to the relevant segments and the countries in which they operate.
Terminal EBITDA growth rate Operating EBITDA has been estimated based on expectations of future outcomes taking into account
past experience, adjusted for anticipated revenue growth.
Coffee business
The key assumptions used in the estimation of the recoverable amount are set out below:
Particulars As at 31 March 2017
Terminal value growth rate 5.0%
Discount rate 18.2%
Terminal EBITDA growth rate Discounted comparable EBIDTA multiple

The values assigned to the key assumptions represent management's assessment of future trends in the relevant industries and have
been based on historical data from both external and internal sources. Discount rate reflects the current market assessment of the risks
specific to a CGU or group of CGUs. The discount rate is estimated based on the capital asset pricing method for respective CGU or group
of CGUs. The cash flow projections included specific estimates for seven years developed using internal forecasts. The planning horizon
reflects the assumptions for short-to-midterm market developments. The Group believes that any reasonably possible change in the
key assumptions on which a recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate
recoverable amount of the cash generating unit.

170 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
6 GOODWILL (Contd.)
Coffee testing:
During the year ended 31 March 2017, the CGU made a downward revision in the future profitability projection for the coffee testing
division primarily due to a lowering of previous expectations. The CGU assessed the events and circumstances and determined that it
was more likely than not that the fair value of the coffee testing unit was less than its carrying value. Accordingly, the CGU conducted
the goodwill impairment tests using profitability projection and recalculated the implied fair value of the goodwill of the reporting
unit. As a result of this recalculation, the carrying value of the goodwill was determined to be zero. Consequently, the entire amount
of the goodwill related to coffee testing, Rs.7.70 million, was impaired during the current year. The impairment loss is included in other
operating expense in the consolidated statements of profit and loss.
Financial services
The key assumptions used in the estimation of the recoverable amount are set out below:
Particulars As at 31 March 2017
Terminal value growth rate 4.0%
Discount rate 15.0%
Terminal EBITDA growth rate 7.4%
The values assigned to the key assumptions represent management's assessment of future trends in the relevant industries and have
been based on historical data from both external and internal sources.
Discount rate reflects the current market assessment of the risks specific to a CGU. The discount rate is estimated based on the weighted
average cost of capital for respective CGU. The cash flow projections included specific estimates for five years developed using internal
forecasts. The planning horizon reflects the assumptions for short-to-midterm market developments. The Group believes that any
reasonably possible change in the key assumptions on which a recoverable amount is based would not cause the aggregate carrying
amount to exceed the aggregate recoverable amount of the cash generating unit.
The estimated recoverable amount of the CGU exceeded its carrying amount, hence impairment is not triggered.
Hospitality services
The recoverable amount of this CGU is based on fair value less cost to sell, estimated using an independent valuer report of the identified
real properties under assumed earnings (in use premise) as of the March 31, 2017. The estimated recoverable amount of the CGU
exceeded its carrying amount, hence impairment is not triggered.
Integrated multimodal logistics
The recoverable amount of this CGU is based on fair value, estimated based on the market capitalization. As of March 31, 2017, the
estimated recoverable amount of the CGU exceeded its carrying amount, hence impairment is not triggered.

7 OTHER INTANGIBLE ASSETS

(Rs. in million)
Particulars License Software Total Intangible
fees assets under
development
Cost or deemed cost:
Balance as at 1 April 2015 190.90 193.90 384.80 22.27
Additions - 14.47 14.47 61.01
Exchange differences on translation of foreign operations (refer note i) - 0.42 0.42 -
Balance as at 31 March 2016 190.90 208.79 399.69 83.28
Balance as at 1 April 2016 190.90 208.79 399.69 83.28
Additions - 245.50 245.50 73.48
Disposals/ capitalisation - - - (148.85)
Balance as at 31 March 2017 190.90 454.29 645.19 7.91
Accumulated amortisation
Balance as at 1 April 2015 (refer note 41) - 123.86 123.86 -
Amortisation for the year 24.80 31.56 56.36 -
Exchange differences on translation of foreign operations (refer note i) - 0.36 0.36 -
Disposals/ capitalisation - - - -
Balance as at 31 March 2016 24.80 155.78 180.58 -
Balance as at 1 April 2016 (refer note 41) 24.80 155.78 180.58 -
Amortisation for the year 5.90 29.83 35.73 -
Balance as at 31 March 2017 30.70 185.61 216.31 -
Carrying amount:
As at 1 April 2015 190.90 70.04 260.94 22.27
As at 31 March 2016 166.10 53.01 219.11 83.28
As at 31 March 2017 160.20 268.68 428.88 7.91
Note:
i) Represents the effect of translation of assets held by foreign subsidiaries.

FINANCIAL SECTION | 171

Notes to the consolidated financial statements for the year ended 31 March 2017
8 NON-CURRENT INVESTMENTS
A Investments accounted for using equity method
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Investment in Equity instrument:
Quoted
- 28.06 million (31 Mar 2016: 28.06 million, 1 Apr 2015: 14.03 million) 5,650.35 5,335.64 4,748.41
equity shares of Mindtree Limited of Rs.10 each fully paid-up
Unquoted
- 5.97 million (31 Mar 2016: 5.97 million, 1 Apr 2015: 5.97 million) 188.42 153.86 133.57
equity shares of Global Edge Software Private Limited of Rs.1 each
- 3.20 million (31 Mar 2016: 3.20 million, 1 Apr 2015: 3.20 million) 182.07 183.73 183.41
equity shares of Ittiam Systems Private Limited of Rs.1 each
- 0.02 million (31 Mar 2016: 0.02 million, 1 Apr 2015: 0.02 million) 157.19 158.12 158.56
equity shares of Barefoot Resorts & Leisure India Private Limited of
Rs.100 each
- 5.63 million (31 Mar 2016: 5.63 million, 1 Apr 2015: 5.63 million) 148.80 139.10 131.10
equity shares of PSA Sical Terminals Limited of Rs.10 each
- 1.73 million (31 Mar 2016: 1.73 million, 1 Apr 2015: 1.73 million) 20.20 29.90 39.90
equity shares of Sical Sattva Rail Terminal Private Limited of Rs.10
each
- 0.69 million (31 Mar 2016: 0.19 million, 1 Apr 2015: Nil) equity shares 1.72 0.35 -
of Coffee Day Schaerer Technologies Private Limited of Rs.10 each
6,348.75 6,000.70 5,394.95

B Other Non-current investments

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Quoted
(i) Investments carried at fair value through profit and loss
- 0.05 million (31 Mar 2016: 0.05 million, 1 Apr 2015: 0.05 million) 1.30 0.80 0.51
equity shares of Sicagen India Limited of Rs.10 each fully paid-
up
(ii) Investments carried at fair value through other comprehensive
income
- 1.60 million (31 Mar 2016: 1.60 million, 1 Apr 2015: 1.56 million) 270.63 133.32 163.07
equity shares of Lakshmi Vilas Bank Limited of Rs.10 each fully
paid-up
(iii) Investments carried at amortized cost
- Nil (31 Mar 2016: 100, 1 Apr 2015: 100) units of 9.95% SBI - 1.05 1.05
Bonds of face value Rs.1000 each
Unquoted
(i) Investments carried at fair value through other comprehensive
income
- 133,150 (31 Mar 2016: 133,150, 1 Apr 2015: 133,150) equity 2.58 2.57 3.73
shares of BGSE Properties & Securities Private Limited of Rs.1
each (fully paid-up)
- 20,000 (31 Mar 2016: 20,000, 1 Apr 2015: 20,000) equity shares 0.36 0.36 0.35
of BGSE Financials Limited of Rs.10 each (fully paid-up)
274.87 138.10 168.71

Aggregate amount of unquoted investments 701.34 667.99 650.62

Aggregate amount of quoted investments 5,922.28 5,470.81 4,913.04
Aggregate amount of market value of quoted investments 12,979.90 18,462.76 9,308.51

Information about the Company's exposure to credit and market risks, and fair value measurement is included in Note 55.

172 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
9 TRADE RECEIVABLES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Unsecured, considered good 4,089.03 3,126.38 2,739.64
Doubtful 394.41 396.10 317.26
4,483.44 3,522.48 3,056.90
Loss allowance for doubtful debts (394.41) (396.10) (317.26)
4,089.03 3,126.38 2,739.64
Current 4,089.03 3,059.08 2,720.64
Non-current - 67.30 19.00

Of the above, trade receivables from related parties are as below:

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Total trade receivables from related parties (refer note 51) 21.08 27.11 25.87
Loss allowance: - - -
Net trade receivables 21.08 27.11 25.87

The Company's exposure to credit and currency risks, and loss allowances related to trade receivables is disclosed in Note 55.

10 NON-CURRENT LOANS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Secured, considered good
- Loans and advances to clients 41.09 - 0.37
Unsecured, considered good
Security deposit
- Deposits with others 1,001.07 923.92 812.17
- Deposits with Stock Exchange/ Clearing Member 57.90 47.81 47.02
Other loans
- Loans and advance to employees 4.00 4.00 3.00
1,104.06 975.73 862.56

11 OTHER NON-CURRENT FINANCIAL ASSETS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Fixed bank deposit accounts with banks* 110.39 1,350.49 925.10
Margin money deposits with banks 161.63 69.63 53.00
272.02 1,420.12 978.10

* Notes
- includes Rs.106.20 million (31 March 2016: Rs.1,262.91 million, 1 April 2015: Rs.811.52 million) given as security to banks for loans and
various credit facilities availed by the subsidiaries.
- includes Rs.2 million (31 March 2016: Nil, 1 April 2015: Rs.2 million) marked as lien in favour of Insurance Regulatory Development
Authority by the subsidiary.

FINANCIAL SECTION | 173

Notes to the consolidated financial statements for the year ended 31 March 2017
12 DEFERRED TAX ASSETS, NET
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Deferred tax assets
- Unabsorbed losses 497.51 526.12 509.42
- Provision for doubtful debts 92.90 56.53 38.84
- Employee benefits 29.13 26.13 20.27
- Borrowings measured at amortized cost 18.72 18.84 21.26
- Rent straightlining 18.39 18.39 10.65
- Security deposit 14.91 14.91 13.27
- Excess of depreciation provided in the books over depreciation 8.50 2.25 13.89
allowable under income tax laws
- Investment carried at fair value through other comprehensive 4.50 - 4.50
income
- Expenditure covered under 40(a)(ia) of Income-tax Act, 1961 1.79 - -
- Loss on fair value routed through other comprehensive income as 0.14 - 7.96
per Ind AS 109
Deferred tax liability
- Other disallowance under income tax laws (464.53) (468.16) (382.12)
- Excess of depreciation allowed under Income Tax Act, 1961 over (26.82) (26.01) (38.14)
depreciation as per books
- Net unrealised gain on open future positions (2.78) (0.45) (1.37)
- Net gain on fair valuation of equity or debt instruments (0.66) (0.29) (0.57)
Minimum Alternate Tax credit entitlement 444.03 333.08 302.32
635.73 501.34 520.18

13 OTHER NON-CURRENT ASSETS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Capital advances (refer note 51) 4,501.21 2,485.62 1,992.14
Advances other than capital advances:
- Deferred rental expense 206.88 222.14 219.54
- Taxes paid under protest 69.18 46.68 38.10
- LIC fund for gratuity 26.30 33.40 24.30
- Advances for supply of goods and rendering of services 31.28 40.24 37.30
- PF demand deposited under protest 3.45 3.45 3.40
- Prepaid expenses 20.17 27.42 14.80
- Balances with government authorities 203.39 146.69 145.96
- Other advances 293.61 293.00 293.00
5,355.47 3,298.64 2,768.54

174 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
14 INVENTORIES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Raw materials
- Stock of raw coffee and packing materials 490.78 190.72 134.92
- Stock of perishables, consumables and merchandise 506.81 671.67 748.23
Finished goods of clean and roasted coffee 112.27 175.37 94.57
Stores and spares 134.70 130.80 131.75
Work-in-progress 79.44 80.21 64.32
Loose tools 1.40 1.40 1.30
1,325.40 1,250.17 1,175.09

Carrying amount of inventories pledged as securities for borrowings 633.02 397.92 245.23
(refer note 23)

15 CURRENT INVESTMENTS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Quoted
(i) Investments carried at fair value through profit and loss*
- Investments in equity instruments (fully paid-up) 7.26 6.08 5.09
- Investments in mutual funds 10.48 120.00 0.06
17.74 126.08 5.15

Aggregate amount of quoted investments and market value thereof 17.74 126.08 5.15

* Notes
a) Since the amount of individual investments are insignificant, further breakup is not provided.
b) Information about the Company's exposure to credit and market risks, and fair value measurement is included in Note55.

16 CASH AND CASH EQUIVALENTS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Balances with banks
- in current accounts 6,635.15 4,066.36 1,271.83
- in escrow accounts 19.05 34.94 23.21
- in fixed deposit accounts with banks (original maturity less than 3 5,970.97 5,634.37 4,844.07
months)
Cash in hand 61.78 56.02 51.99
12,686.95 9,791.69 6,191.10

17 BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Balances with banks*
-in margin money deposits with banks 168.09 228.24 123.40
- in fixed deposit accounts with banks 1,638.77 1,775.57 825.96
1,806.86 2,003.81 949.36

* Notes
- includes Rs.1,230.61 million (31 March 2016: Rs.126.05 million, 1 April 2015: Rs.474.00 million) given as security to banks for loans and
various credit facilities availed by the Group.

FINANCIAL SECTION | 175

Notes to the consolidated financial statements for the year ended 31 March 2017
17 BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS (Contd.)
- includes Rs.15.49 million (31 March 2016: Rs.15.49 million, 1 April 2015: Rs.12.89 million) held as margin money deposits against
guarantees given by the subsidiary.
- includes NIL (31 March 2016: Rs.2.00 million, 1 April 2015: NIL) marked as lien in favour of Insurance Regulatory Development
Authority by the subsidiary.

18 CURRENT LOANS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Secured, considered good
- Loan to clients 121.78 127.36 83.41
Unsecured, considered good
- Loan to clients 3.64 1.78 14.26
Security deposit
- Security Margin money with Stock exchange/ Clearing house 987.61 835.30 278.86
- Other deposits 126.51 100.68 78.10
Loans to related parties (refer note 51)
- Coffee Day Barefoot Resorts Private Limited 153.39 149.78 151.57
- Coffee Day Resorts MSM Private Limited - 63.39 63.36
Other loans (refer note 51)
- Alphagrep Technologies Pvt. Ltd. 63.71 61.92 63.48
- Alphagrep HK Ltd. - 1.12 1.05
- Ess & Ess HRM Services Private limited 6.12 5.81 0.96
- Illuminati Software Private Limited 32.51 - -
- Loans and advance to employees 39.04 17.73 11.80
1,534.31 1,364.87 746.85

19 OTHER CURRENT FINANCIAL ASSETS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Derivatives instruments at fair value through OCI
Cash flow hedges/ not designated as hedges
- Interest rate swaps 6.55 - -
Others
Unsecured, considered good
Interest accrued 124.57 111.56 61.50
Export benefit receivable 31.07 75.73 90.40
Receivable from exchanges 94.80 110.04 94.31
Advance to ESOP Trust - - 10.58
Insurance claims 3.50 - 13.90
Electricity charges recoverable 38.39 36.18 30.57
Staff advances 38.96 25.34 9.75
Unbilled revenue 458.51 272.86 93.33
Receivable from clients 350.53 288.39 322.42
Other receivables 102.66 58.70 82.93
1,249.54 978.80 809.69
Unsecured, considered doubtful
Receivable from clients 62.63 63.23 65.91
Less: Provision for receivable from clients (62.63) (63.23) (65.91)
1,249.54 978.80 809.69

176 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
20 OTHER CURRENT ASSETS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Advances for supply of goods and rendering of services 1,028.83 570.29 505.42
Prepaid expenses 898.09 536.10 558.73
Statutory advances 86.60 16.00 18.00
Balances with government authorities 87.46 74.84 57.20
Deferred rental expense 56.90 65.14 60.71
Service tax credit receivable 27.80 21.70 10.90
Other advances 69.44 87.43 62.07
2,255.12 1,371.50 1,273.03

21 EQUITY SHARE CAPITAL

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Authorised
270,584,000 (31 March 2016: 270,584,000, 1 April 2015: 270,000,000) 2,705.84 2,705.84 2,700.00
equity shares of Rs.10 each
3,500,000 (31 March 2016: 3,500,000, 1 April 2015: 3,500,000) compulsorily 35.00 35.00 35.00
convertible preference shares of Rs.10 each
Nil (31 March 2016: Nil, 1 April 2015: 238,000) series A non-convertible - - 2.38
redeemable preference shares of Rs.10 each
Nil (31 March 2016: Nil, 1 April 2015: 346,000) series B non-convertible - - 3.46
redeemable preference shares of Rs.10 each
2,740.84 2,740.84 2,740.84
Issued, subscribed and fully paid up
206,001,719 (31 March 2016: 206,001,719, 1 April 2015: 14,591,551) equity 2,060.02 2,060.02 145.92
shares of Rs.10 each.
2,060.02 2,060.02 145.92
(a) Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year is as given below:
(Rs. in million) (except share data)
Particulars As at 31 March 2017 As at 31 March 2016
No of shares Amount No of shares Amount
Number of shares outstanding at the beginning of the year 206,001,719 2,060.02 14,591,551 145.92
Add:
- Issue of bonus shares [Refer Note 21 (d)] - - 102,140,857 1,021.41
- Conversion of compulsorily convertible preference shares - - 13,969,232 139.69
held by Standard Chartered Private Equity (Mauritius) II
Limited [Refer note 23]
- Conversion of compulsorily convertible debentures held - - 17,826,912 178.27
by KKR Mauritius PE Investments II Limited [Refer note 23]
- Conversion of compulsorily convertible debentures held - - 22,412,192 224.12
by Arduino Holdings Ltd. [Refer note 23]
- Issue of shares pursuant to initial public offer [Refer Note - - 35,060,975 350.61
21 (b)]
Number of shares outstanding at the end of the year 206,001,719 2,060.02 206,001,719 2,060.02

(b) The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and
the repayment of capital:
Equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the
Company’s residual assets on winding up. The equity shares are entitled to receive dividend as declared from time to time, subject
to preferential right of preference shareholders to payment of dividend. The voting rights of an equity shareholder on a poll (not
on show of hands) are in proportion to his/its share of the paid-up equity share capital of the Company. Voting rights cannot be
exercised in respect of shares on which any call or other sums presently payable has not been paid.

FINANCIAL SECTION | 177

Notes to the consolidated financial statements for the year ended 31 March 2017
21 EQUITY SHARE CAPITAL (Contd.)
Failure to pay any amount called up on shares may lead to their forfeiture. On winding up of the Company, the holders of equity
shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts, in
proportion to the number of equity shares held.
During the month of November 2015, 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 BSE and NSE effective 2 November 2015. The proceeds from IPO aggregates to Rs.10,739 million (net of issue expenses of
Rs.761.37 million).
(c) Equity shareholders holding more than 5% of equity shares along with the number of equity shares held at the beginning and
at the end of the year is as given below:
Name of the shareholder As at 31 March 2017 As at 31 March 2016
% of holding No of shares % of holding No of shares
Equity shares
Mr. V G Siddhartha 33.58% 69,174,700 31.04% 63,945,904
KKR Mauritius PE Investments II Limited 10.60% 21,826,912 10.60% 21,826,912
NLS Mauritius LLC 10.88% 22,412,992 10.88% 22,412,992
Devadarshini Info Technologies Private Limited 6.02% 12,408,440 6.02% 12,408,440
Coffeeday Consolidations Private Limited 5.96% 12,268,416 5.96% 12,268,416
Marina West (Singapore) Pte. Ltd. 5.54% 11,402,901 - -
Gonibedu Coffee Estates Private Limited 5.37% 11,071,104 5.37% 11,071,104
Standard Chartered Private Equity (Mauritius) II Limited - - 6.78% 13,969,232

(d) Pursuant to the approval of the shareholders granted at its extraordinary general meeting held on 8 May 2015, 102,140,857 equity
shares were allotted as fully paid-up to the existing shareholders of the Company in the ratio of seven equity shares for every one
equity share held on 7 May 2015. As on 7 May 2015, 14,591,551 equity shares were outstanding. The bonus equity shares were
issued by capitalisation of the reserves lying to the credit of the securities premium account of the Company.
(e) During the five year period ended 31 March 2017:
102,140,857 equity shares were allotted as fully paid-up bonus shares to the existing shareholders of the Company in the ratio of
seven equity shares for every one equity share held on 7 May 2015. The bonus equity shares were issued by capitalisation of the
reserves lying to the credit of the securities premium account of the Company. The Company has not bought back any class of
equity shares during the period of five years immediately preceding the balance sheet date nor has issued shares for consideration
other than cash.

22 OTHER EQUITY
Summary of other equity balances*
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Reserves and Surplus
- Debenture redemption reserve 287.41 275.10 183.40
- General reserve 0.01 0.01 0.01
- Share options outstanding account 64.67 51.63 24.38
- Reserve fund (As per 45IC of Reserve Bank of India, 1934) 1.86 0.92 -
- Capital reserve (13.77) 31.92 395.60
- Securities premium 21,745.42 21,577.05 3,722.36
- Retained earnings (1,822.22) (2,254.14) (1,736.89)
Other comprehensive income
- Foreign currency translation reserve (2.69) (23.28) (22.58)
- Equity instruments through other comprehensive income 110.55 (7.48) 19.76
- Cash flow hedges reserve (7.25) (11.38) (19.61)
- Remeasurements of actuarial gain and losses (4.91) (6.26) (4.84)
- Other items of other comprehensive income (142.53) (37.75) 1.05
20,216.55 19,596.34 2,562.64
*Refer consolidated statement of changes in equity for detailed movement in other equity balances.

178 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
22 OTHER EQUITY (Contd.)
Nature and purpose of other equity:
Debenture redemption reserve
Debenture redemption reserve is created out of the profits which is available for payment of premium for the purpose of redemption
of debentures.
General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve
is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in
general reserve will not be reclassified subsequently to profit and loss.
Share options outstanding account
The fair value of the equity-settled share based payment transactions with employees is recognised in statement of profit and loss with
corresponding credit to employee stock options outstanding account.
Reserve fund (as per section 45IC of RBI Act 1934)
Reserve fund represents the accumulation of amount transferred from surplus year on year based on the fixed percentage of profit for
the year, as per section 451C of Reserve Bank of India Act 1934.
Capital reserve
Share of pre-acquisition profits of subsidiaries at the time of acquisition by the Group is accounted as capital reserve.
Securities premium
Securities premium account comprises of the premium on issue of shares. The reserve is utilised in accordance with the specific provision
of the Companies Act, 2013.
Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other
distributions paid to investors.
Foreign currency translation reserve
This reserve comprises of all foreign currency differences arising from the translation of the financial statements of foreign operations to
functional currency.
Equity instruments through other comprehensive income
This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through
other comprehensive income that have been recognised in other comprehensive income, net of amounts reclassified to retained
earnings when those assets have been disposed off and the income tax thereon.
Cash flow hedges reserve
The effective portion of cash flow hedge represents the cumulative effective portion of gains or losses arising on changes in fair value
of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in
fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow
hedges reserve will be reclassified to profit and loss only when the hedged transaction affects the profit or loss, or included as a basis
adjustment to the non-financial hedged item.
Remeasurements of actuarial gain and losses
The cumulative balances of actuarial gain or loss arising on remeasurements of defined benefit plan is accumulated and recognised.
Items included in actuarial gain or loss reserve will not be reclassified subsequently to profit and loss.
Other items of other comprehensive income
The cumulative balances of share of income or loss from associates and joint ventures from other comprehensive income net of taxes
has been recognised, amounts reclassified to retained earnings when those assets have been disposed off and the income tax thereon.

FINANCIAL SECTION | 179

Notes to the consolidated financial statements for the year ended 31 March 2017
23 NON-CURRENT BORROWINGS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Secured:
Debentures 9,492.51 4,800.79 6,965.05
Term loans 22,247.93 21,391.17 17,275.76
Long-term maturities of finance lease obligations 3.36 5.81 2.41
Unsecured:
Debentures 290.46 498.06 7,070.35
32,034.26 26,695.83 31,313.57
Information about the Group's exposure to interest rate, foreign currency and liquidity risks is included in note 55.
Notes:
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Reliance Mutual Fund Secured Debentures 2,164.26 § Security
§ Pledge of a proportion of the shares of Mindtree Limited and Tanglin
Development Limited held by the Company;
§ Personal guarantee of Mr. V. G. Siddhartha.
§ These debentures carry fixed maturity internal rate of return of 14.25% p.a.
including quarterly payable coupon interest rate of 6.5% p.a.
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a.
for the period of delay.
§ The principal amount shall be repaid in 9 equal quarterly instalments beginning
from 18 March 2017 and expiring on the scheduled maturity date (i.e., 15 March
2019).
§ The Company has an option of voluntary prepayment under certain
circumstances as set out in the agreement.
§ During the year, the Company redeemed debentures worth Rs.777.78 million.
ICICI Prudential Secured Debentures 998.28 § These debentures carry interest @ MIBOR plus 600 base points subject to a
Asset Management minimum of 10.99% and maximum of 11.01%
Company § Security
- Pledge of shares of Mindtree where the aggregate amount shall be equal to
the principal amount.
- Pledge of shares of CDGL where the aggregate amount shall be 2.5 times
the benchmark amount from the allotment date and atleast 1.5 times the
benchmark amount from the effective date of issue of Mindtree shares.
- Personal guarantee of Mr. V. G. Siddhartha.
§ The Company at all times shall maintain a minimum reserve which shall be
equal to the money due and payable to the debenture holders.
§ The amount shall be paid on bullet repayment basis on the expiry of the term.
(i.e.; 11 March 2019)
§ Amounts unpaid on due date will attract overdue interest at 2% p.a over and
above the cash coupon rate.
§ The Company can redeem such debentures before maturity by giving one day
notice of the same.

180 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
DSP Blackrock Income Secured Debentures 1,046.78 § Security
opportunities Fund - Pledge of shares of Mindtree where the aggregate value is equal to the
benchmark amount
- Pledge of Tanglin Shares where the aggregate value of the shares is equal to
the benchmark amount
- The Company shall at all times, deposit monies in the designated accounts
which is due and payable to the debenture holders on the Scheduled Maturity
Date.
- Personal guarantee of Mr. V G Siddhartha.
§ These debentures carry fixed redemption premium of 11.50 % with an interest
rate of 8% p.a. cash coupon
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a.
for the period of delay.
§ These debentures are redeemable by way of bullet repayment at the end of 19
months and 6 days from the date of issue (i.e., 25 October 2018)
The Company has an option of voluntary prepayment under certain
circumstances as set out in the agreement.
Birla Sun Life Secured Debentures 1,198.28 § Security
- Pledge of a proportion of the shares of Mindtree Limited and Coffee Day Global
Limited held by the Company;
- Pledge of a proportion of the shares of Sical Logistics Limited held by Tanglin
Retail Reality Developments Private Limited
- Personal guarantee of Mr. V. G. Siddhartha
§ These debentures have been allotted in two tranches- 27 April 2015- Rs.600
million and 12 May 2015- Rs.600 million.
§ These debentures carry an interest rate of 14.5% p.a. (increases to 15.5% after
one year from date of allotment)
§ Any delay in repayment of interest entails payment of penal interest @ 2% p.a.
for the period of delay.
§ These debentures are redeemable by way of bullet repayment at the end of 36
months from the date of issue i.e., 26 April 2018 (Rs.600 million) and 11 May 2018
(Rs.600 million).
The Company has an option of voluntary prepayment under certain
circumstances as set out in the agreement.
Aditya Birla Finance Secured Term loan 1,526.30 A) Principal amount of loan amounting to Rs.600 million
Limited § Security
- Pledge of a proportion of the shares of Mindtree Limited, Coffee Day Global
Limited, Sical Logistics Limited held by the Company;
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carries an interest rate of 13.75% p.a. payable quarterly
§ Any delay in repayment of interest entails payment of penal interest @ 24% p.a.
for the period of delay.
§ The Company has an option of voluntary prepayment under certain
circumstances as set out in the arrangement. Further, the Company has an
option to repay the loan in advance with a prepayment premium of 2% on the
principal amount outstanding as on the date of prepayment.
The loan is repayable by way of bullet repayment at the end of 36 months from
the date of issue (i.e., 26 May 2018).
B) Principal amount of loan amounting to Rs.930 million
§ Security
- Pledge of a proportion of the shares of Mindtree Limited and Tanglin
Developments Limited held by the Company;
- Personal guarantee of Mr. V. G. Siddhartha
§ The loan carries an interest rate of 12.50% p.a. payable quarterly
§ Any delay in repayment of interest entails payment of penal interest @ 24% p.a.
for the period of delay.
§ The Company has an option of voluntary prepayment under certain
circumstances as set out in the arrangement. Further, the Company has an
option to repay the loan in advance with a prepayment premium of 2% on the
principal amount outstanding as on the date of prepayment.
The loan is repayable by way of bullet repayment at the end of 36 months from
the date of issue (i.e., 26 May 2018).

FINANCIAL SECTION | 181

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Axis Bank Limited Secured Term loan 922.36 § Security
- Pledge of Mindtree shares (55% of total security cover).
- Listed shares of Sical Logistics Ltd./ Lakshmi Vilas Bank/ CDEL/ any other listed
entity acceptable to the lender (65% of total security cover), held by promoter/
group covering 120% of exposure.
- Personal guarantee of Mr. V G Siddhartha
- Corporate guarantee of any entity pledging shares of Mindtree Ltd and Sical
Logistics Ltd/ Lakshmi Vilas Bank/ CDEL/ any other listed entity acceptable to the
lender.
- Security cover by way of listed shares of at least 1.2x of the outstanding/
disbursed facility amount to be maintained during the tenor of the loan on MTM
basis.
§ The interest rate for the loan is as follows:
- 1 year MCLR+ 1%(Spread) p.a, payable monthly (First three years)
- 1 year MCLR+ 1.75%(Spread) p.a, payable monthly (subject to minimum
effective rate of interest of 10.65% p.a) (Post three years)
§ The lender can exercise the call option at the end of three years
§ The Company has an option of voluntary prepayment with no penalty
§ The loan amount shall be repaid in 4 half yearly instalments beginning from
42nd month of first disbursement (i.e., 28 June 2020)
§ Amounts unpaid on due date will attract overdue interest at 2% p.a
ICICI Prudential Secured Debentures 949.87 § These debentures carry interest @ 13% p.a payable quarterly
Asset Management § Security
Company - Pledge of Mindtree shares equal to one time the principal amount with security
cover being maintained at all times
- Pledge of CDGL shares aggregate of which shall be equal to 1.5 times the face
value of the debentures
- Personal guarantee of Mr. V. G. Siddhartha.
- Company shall at all points of time maintain in a account designated for this
purpose amount equal to the cash coupons payable by the Company in the
financial quarter in which such date occurs.
§ The amount shall be paid on bullet repayment basis on the expiry of the term.
(i.e.; 16 April 2017)
§ Amounts unpaid on due date will attract overdue interest at 2% p.a over and
above the cash coupon rate.
§ The Company can redeem such debentures before maturity by giving one day
notice of the same.
ICICI Prudential Secured Debentures 799.62 § These debentures carry interest @ 13% p.a payable quarterly
Asset Management § Security
Company - Pledge of Mindtree shares equal to one time the principal amount with security
cover being maintained at all times
- Pledge of CDGL shares aggregate of which shall be equal to 1.5 times the face
value of the debentures
- Personal guarantee of Mr. V. G. Siddhartha.
- Company shall at all points of time maintain in a account designated for this
purpose amount equal to the cash coupons payable by the Company in the
financial quarter in which such date occurs.
§ The amount shall be paid on bullet repayment basis on the expiry of the term.
(i.e.; 8 April 2017)
§ Amounts unpaid on due date will attract overdue interest at 2% p.a over and
above the cash coupon rate.
§ The Company can redeem such debentures before maturity by giving one day
notice of the same.

182 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Rabobank Secured Term loan 1,163.16 Secured by
International § Personal guarantee of the Promoter;
§ Charge on specific movable assets of the Coffee Day Global Limited; and
§ First ranking equitable mortgages on the following immovable properties–
o Converted land of 2 estates with building located in Mangalore owned by
Tanglin Developments Limited;
o Land and building located in Hassan, owned by Ganga Coffee Curing Works; and
o Land located in Palace Road, Bangalore owned by the Coffee Day Global Limited
with a carrying amount of Rs.79 million as at 31 March 2017 (31 March 2016:
Rs.79 million, 1 April 2015: Rs.79 million).
§ Second ranking equitable mortgage on the land and buildings of the Corporate
Headquarters of the Coffee Day Global Limited located at
Vittal Mallya Road, Bangalore with a carrying amount of Rs.1,314 million as at 31
March 2017 (31 March 2016: Rs.1,390 million, 1 April 2015: Rs.1,465 million)
Loan from Rabobank International, Singapore carries a floating interest rate of
LIBOR plus 4.15% margin p.a and is repayable in 12 biannual instalments. The
Group has entered into an interest rate swap agreement to pay fixed LIBOR of
1.67% (31 March 2016: 1.67%, 1 April 2015: 1.67%) and receive floating LIBOR rate
for the above loans.
Loan from Rabobank International, Hong Kong carries a floating interest rate
of LIBOR plus 3.5% margin p.a and is repayable in 8 biannual instalments with
effect from January 2017.
Standard Chartered Secured Term loan 191.06 Secured by
Bank § Charge on all movable fixed assets of the Coffee Day Global Limited;
§ Charge over all cash deposits with landlords for cafes and future cafes starting
with Standard Chartered Bank facility.
§ First exclusive charge and irrecoverable rights of lien and set-off on the fixed
deposit with Standard Chartered Bank with a carrying value of Rs.Nil (31 March
2016: Rs.88.48 million, 1 April 2015: Rs.86.89 million)
The loan carries a floating interest rate of 3 months LIBOR plus 2.75% margin p.a.
which is repayable in 17 equal quarterly instalments with effect from August
2013. The loan is denominated in foreign currency. The Coffee Day Global
Limited has entered into an interest rate swap to pay fixed rate of interest of
4.46% (31 March 2016: 4.46%, 1 April 2015: 4.46%) and receive floating LIBOR
rate.
Vehicle loans Secured Term loan 1.24 Secured by hypothecation of vehicles.
This loan carries an interest rate within a range of 11.10% p.a. to 11.75% p.a. The
principal amount has to be repaid in equal instalments over the period of loan in
respect of each vehicle.
FMO Unsecured Debentures 460.22 These debentures carry interest rate of 14.5% p.a. payable bi-annually.
The debentures shall be converted into equity shares on earlier of the following
dates:
- Mandatory conversion date i.e. date falling 10 years after the issue of debentures
(i.e., 30 March 2010);
- Optional conversion date i.e. dates falling 66 months, 72 months, 78 months, 84
months, 90 months, 96 months, 102 months and 108 months from the closing date
(i.e. 30 March 2010);
- In the event of IPO, the latest permissible date up to which the debentures can
remain outstanding under local laws; and
- At the investors option upon the occurrence of an event of default.
The number of equity shares arising upon conversion will result in 2.85% of total
issued and paid up equity share capital of the Coffee Day Global Limited on a fully
diluted basis on the date of issue of debentures..
During the year, the holders sold 1,697,572 (31 March 2016: 848,786) Compulsorily
Convertible Debentures (CCDs) to the promoter V.G. Siddhartha, subsequent to
which the CCDs were converted to 1,230,910 (31 March 2016: 615,455) equity
shares of Re 1 each as per the original terms of agreement.

FINANCIAL SECTION | 183

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Karnataka Bank Secured Loan 377.64 Secured by
Limited repayable § Hypothecation of stocks of coffee beans located at Chikmangalur;
on demand § Hypothecation of goods covered under export bills;
§ Further, the loan is collaterally secured by -
- Deposit of title deeds of a property belonging to a relative of Promoter;
- Personal guarantee of Promoter and relatives of Promoter; and
- Promissory note provided by the Coffee Day Global Limited and the Promoter.
Oriental Bank of Secured Loan 334.13 Secured by
Commerce repayable § Foreign documentary demand/ usance bill having maximum usance of 270
on demand days accompanied by Airways bills/ Bill of Lading and drawn under irrevocable
letter of credit/ confirmed orders only towards bills purchased;
§ Hypothecation of stock of coffee at Hassan earmarked for export and advance
paid to planters;
§ Equitable/ Registered mortgage of non agricultural industrial land in the name
of Classic Coffee Curing Works at Chikmangalur; and
§ Personal guarantee of the Managing Director and relatives of the Managing
Director.
HSBC Bank Secured Loan 100.00 Secured by
repayable § Exclusive charge over movable fixed assets, both present and future of the
on demand Coffee Day Global Limited's outlets (café's) with asset cover of 1.75x.
§ Personal Guarantee of Managing Director.
Vijaya bank Secured Loan 49.88 Secured by
repayable § Hypothecation of stocks and receivables pertaining to vending division of
on demand Coffee Day Global Limited
Kotak Mahindra Bank Secured Loan 140.57 Secured by
Limited repayable § Exclusive charge over movable fixed assets of 100 café outlets and 2,146 vending
on demand machines of Coffee Day Global Limited
HDFC Bank Limited Secured Term loan 2.57 Secured by hypothecation of vehicles of Coffee Day Global Limited
This loan carries an interest rate of 9.25% p.a. The principal amount has to be repaid
in 36 equal instalments over the period of loan in respect of each vehicle.
Kotak Mahindra Secured Term loan 495.19 The loan is secured by:
Investments Limited - Pledge of shares of Mindtree Limited, Sical Logistics Limited and Coffeeday Global
Limited.
- Personal guarantee of Mr. V G Siddhartha..
Loan is repayable within 60 months from date of first disbursement (first
disbursement being March 2016)
Rate of interest 12.50% p.a. compounded monthly and payable quarterly ,loan
carries effective interest rate of 12.81% p.a
HDFC Bank Limited Secured Loan 130.25 USD 2,000,000 overdraft facility was obtained by foreign subsidiary Way2wealth
repayable Illuminate PTE limited and it is secured by SBLC issued by Way2wealth Brokers
on demand Private Limited in favour of HDFC Bank.
Rate of interest is 1 year LIBOR + 2.5%.
§ Secured against fixed deposit with the Bank and it is payable on demand. Rate
of interest: 0.75%-2%
Bajaj Finance Limited Secured Loan 36.02 Loans are borrowed against securities.
repayable - Rate of interest is 11.5% p.a.
on demand
DBS Bank Secured Loan 178.31 Secured against fixed deposit of group company.
repayable Interest rate for each drawing will be 3% p.a. Loan tenure is 3 months from the
on demand date of renewal.

184 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
RBL Bank Limited Secured Debentures 500.45 These debentures carry interest rate of 12.50% p.a. These debentures are secured
by -
Share pledge of Mindtree Limited held by Mr.V.G. Siddhartha, M/s Coffeeday
Enterprises Limited & Coffeeday Trading Limited
Share pledge of Coffee Day Global Limited held by the Company
Personal guarantee of V G Siddhartha
These debentures are redeemable by way of bullet repayment at the end of 2 years
from the date of issue (i.e., 23 June 2018).
RBL Bank Limited Secured Debentures 502.25 These debentures carry interest rate of 11.50% p.a. These debentures are secured
by -
Share pledge of Mindtree Limited held by Mr.V.G. Siddhartha, M/s Coffeeday
Enterprises Limited & Coffeeday Trading Limited
Share pledge of Coffee Day Global Limited held by the Company
Personal guarantee of V G Siddhartha
These debentures are redeemable by way of bullet repayment at the end of 2 years
from the date of issue (i.e., 23 June 2018).
Indiabulls Mutual Secured Debentures 265.83 These debentures carry interest rate of 1.25% p.a. and are redeemable at premium
Fund with effective interest rate of 14.25% p.a.p.q including the cash coupons paid
earlier i.e. 1.25% interest payment.
These debentures are secured by -
Pledge of Sical Shares held by Tanglin Retail Reality Developers Private Limited
Pledge of Coffee Day Global Limited Shares held by Cofeeday Enterprises Limited
and Corporate guarantee of Tanglin Retail Reality Developers Private Limited
Personal guarantee of V G Siddhartha
These debentures are redeemable by way of bullet repayment at the end of 38
months from the date of issue (i.e., 22 November 2019).
Birla Sunlife Trustee Secured Debentures 1,205.33 These debentures carry interest rate of 12.75% p.a.These debentures are secured
Company Private by -
Limited Pledge of Coffeeday Global Limited shares held by Coffee Day Enterprises Limited
and personal guarantee of VG Siddhartha
These debentures are redeemable by way of bullet repayment at the end of 38
months from the date of issue (i.e., 22 November 2019).
A.K Capital Finance Secured Debentures 263.08 These debentures carry interest rate of 1.25% p.a. and are redeemable at premium
Private Limited with effective interest rate of 13.55% p.a after taking into account cash coupons
paid at the rate of 1.25% p.a.
These debentures are secured by -
Pledge of Sical Logistics Limited Shares held by Tanglin Retail Reality Developments
Private limited
Corporate guarantee of Coffee Day Enterprises Limited
Corporate guarantee of Tanglin Retail Reality Developments Private limited
Pledge of Coffee Day Global Limited Shares held by Coffee Day Enterprises Limited
Personal guarantee of V G Siddhartha
These debentures are redeemable by way of bullet repayment at the end of 38
months from the date of issue (i.e., 23 Jan 2020).

FINANCIAL SECTION | 185

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Axis Bank Limited Secured Term loan 1,001.68 § Security
Pledge of Shares of Mindtree Limited held by coffeeday Enterprises Limited ,Coffee
Day Trading Limited and VG Siddhartha.
Pledge of shares of Sical Logistics Limited held by Tanglin Retail Reality
Developments Private Limited.
Pledge of shares of Lakshmi Vilas Bank held by Sivan Securities Limited.
Pledge of shares of Coffee Day Global Limited held by Company.
Personal Guarantee of Mr.V G Siddhartha and Corporate Guarantee of Sivan
Securities Limited and Tanglin Retail Reality Private Limited.
The loan carries interest rate at MCLR+0% for first nine month and MCLR+1.75%
post nine months (Spread will be modified for an effective interest rate of 11% post
nine months) .
The maturity date of the loan is 27 September 2018.
Housing Secured Term loan 8,119.63 a) Rs.4,000 million- loan is to be repaid in 4 equal instalments at the end of the
Development Finance 7th, 8th, 9th and 10th year from the date of disbursement i.e. repayable after
Corporation Limited June 2018, while the interest is to be serviced at the end of every calendar
quarter.
The Loan is currently denominated in the notional USD Terms and it was to be
converted to rupee terms 1/3rd each (i.e., Rs.1,340 million- at end of 4th year,
Rs.1,330 million- each at the end of 5th and 6th year based on average RBI rate
for USD for the one week prior to conversion). During the year the Company
has requested the lender to continue to denominate the loan in Notional
USD terms.
The rate of Interest for the period, the loan is a notional USD Loan, is 3 month
USD LIBOR plus 570 basis points and after conversion into Rs.Terms, the
interest rate shall be the HDFC Corporate Prime Lending Rate (HDFC CPLR)
minus 450 basis points.
b) Rs.1,100 million- loan is to be repaid in 15 equal quarterly instalments of
Rs.92.5 million- each and a final payment of Rs.51.33 million (including
interest component) beginning from the end of 4 calendar quarters from the
date of disbursement. Interest is to be serviced quarterly at the rate of HDFC
CPLR minus 400 basis points.
The loan has been repaid during the year.
c) Rs.1,200 million - loan is to be repaid in 4 equal instalments at the end of
the 7th, 8th, 9th and 10th year from the date of disbursement i.e.. repayable
after June 2019, while the interest is to be serviced at the end of every
calendar quarter. The Loan is currently in the Notional USD Terms and it will
be converted to mutually agreeable rupee terms at the end of 4th year (i.e.
June 2016). The rate of Interest for the period the loan is a notional USD Loan,
is 3 month USD LIBOR plus 625 to 700 basis points and after conversion into
Rs.Terms, the interest rate shall be the HDFC Corporate Prime Lending Rate
(HDFC CPLR).
d) Rs.500 million loan is to be repaid in 16 quarterly instalments; instalment
consisting of 16 equal quarterly instalments of Rs.31.25 million- each
beginning from the end of 24 quarters from the date of disbursement i.e..
repayable after June 2020. The interest is to be serviced quarterly and interest
at the rate of HDFC CPLR minus 410 basis points would be charged.
e) Rs.850 million- (availed to the extent of Rs.800 million-) loan is to be repaid in 29
quarterly instalments; instalment consisting of,18 equal quarterly instalments
of Rs.35 million each and 11 equal quarterly instalments of Rs.20 million each,
beginning from the end of 7 quarters from the date of disbursement. The
repayment towards the loan has been started from June,2015.The interest is
to be serviced quarterly and interest at the rate of HDFC CPLR minus 400 basis
points would be charged.
Entire loan is secured by mortgage of Investment property of global village
software park.

186 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Bajaj Finance Limited Secured Term loan 450.00 § Security
Equitable mortgage over the land and buildings of property pledge and pledge of
shares of Coffee Day Global Limited
Corporate Guarantee from Coffee Day Hotels and Resorts Limited, Corporate
guarantee from wilderness Resorts Private Limited, Personal guarantee of the V G
Siddhartha and Letter of comfort from Coffee Day Enterprises;
The loan is repayable within 36 Months from the date of disbursement (i.e. 29 Feb
2020)
Loan bears interest at the rate of 10.75% (i.e. BFL rate minus 40 basis points) payable
quarterly.
HDFC Bank Limited Secured Term loan 3.07 Secured by hypothecation of vehicles.
This loan carries an interest rate of 10 - 11.25% p.a. The principal amount has to be
repaid in 60 equal instalments over the period of loan in respect of each vehicle.
ICICI Bank Limited Secured Term loan 6.04 Secured by hypothecation of vehicles.
This loan carries an interest rate of 8.85 - 9.0% p.a. The principal amount has to be
repaid in 60 equal instalments over the period of loan in respect of each vehicle.
Standard Chartered Secured Loan 500.00 The loan is secured by:
Investments and repayable Corporate guarantee of Coffee Day Global Limited
Loans (India) Limited on demand The loan carries interest rate of 12.5% p.a. till 20 March 2017 and 13.25% thereafter.
The loan is repayable within 3 months from the date of disbursement/amendment
date (i.e. 19 June 2017)
Aditya Birla Finance Secured Loan 750.00 The loan is secured by:
Limited repayable a) Pledge of shares of Coffee Day Global Limited (formerly Amalgamated Bean
on demand Coffee Trading Co Limited), Mindtree Limited, Sical Logistics Limited held by
Tanglin Retail Reality Developers Private Limited,
b) Personal guarantee of Mr.V.G.Siddhartha, Director of the holding company
c) Demand promissory note for the amount
The loan carries interest rate of 14% p.a.
A.K Capital Finance Secured Loan 250.00 The loan is secured by:
Private Limited repayable Registered Mortgage over the immovable property of Coffeeday Curing Works
on demand admeasuring 20Acres owned by Vasanthi hegde situated at KM road, Chikmangalur
along with irrevocable power of attorney in favour of the lender within 2 months
from the date of first disbursement including deposition of original title deeds for
the said property.
Pledge of 29,49,173 equity shares of Coffee Day Global held by Coffee Day
Enterprises
unconditional, irrevocable personal guarantee of Mr.V.G. Siddhartha
unconditional, irrevocable personal guarantee of the holding company
The loan carries interest rate of 18% p.a.
50% of the facility amount shall be repaid at the end of 2nd month from the date
of first disbursement under the facility
And balance of the facility amount shall be repaid at the end of 3nd month from
the date of first disbursement under the facility
The Company has the option to be rollover the facility for maximum period up to
3Months in such a way that the facility rolled over shall not go beyond the validity
of the facility.
ECL Finance Ltd Secured Term loan 1,000.00 The facility carries interest at ECL Prime Lending Rate (EPLR) minus 300 basis points
per annum, subject to minimum of 14.5% p.a payable monthly and the loan is
secured by:
§ Pledge of shares of Sical Logistics Limited held by the Company
§ Pledge of shares of Company held by group companies
§ Pledge of shares of Mindtree Limited held by group companies
§ Corporate Guarantee of Tanglin Developments Limited
§ Personal guarantee of Mr. V.G. Siddhartha
Tenure of Loan - 36 months from the first drawdown date
Repayment is to be done at the end of 36 months commencing from the first
drawdown date or on demand whichever is earlier

FINANCIAL SECTION | 187

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Kotak Mahindra Secured Term loan 59.31 The facility of Rs.250 million carries interest rate of 15.00%p.a compounded
Investments Limited monthly, payable quarterly and the loan is secured by:
§ Pledge of Mindtree shares Limited Capped at Rs.12.50 crores
§ Pledge of 10,81,15-0 shares of Coffee Day Global Limited Capped at Rs.12.50
crores
§ Pledge of shares of Sical Logistics Limited towards additional security
§ Personal guarantee of Mr. V.G. Siddhartha
Tenure of Loan - 60 months from the date of first disbursement
Repayment is to be done at the end of 60 months from the date of first disbursement
or on exercise of call/ put option by the lender or borrower respectively
Out of the credit availed, Rs.190 million was repaid during the year 2016-17
Kotak Mahindra Prime Secured Term loan 199.81 The facility of Rs.250 million carries interest rate of 12.50% p.a compounded
Limited monthly, payable quarterly and the loan is secured by:
§ Pledge of shares of Mindtree Limited
§ Pledge of shares of Coffee Day Global Limited
§ Pledge of shares of Sical logistics Limited towards additional security
§ Guarantee of pledger
§ Personal guarantee of Mr. V.G. Siddhartha
Tenure of Loan - 36 months from the date of first disbursement of this facility
Repayment is to be done at the end of 36 months from the date of first disbursement
or on exercise of call/ put option by the lender or borrower respectively
Out of the credit availed, Rs.48.50 million was repaid during the year 2016-17
Standard Chartered Secured Term loan 942.40 The facility carries interest rate of 12.50% p.a. payable monthly and the loan is
Investments and secured by:
Loans (India) Limited § Pledge of shares of Mindtree Ltd held by group companies
§ Pledge of shares of Sical Logistics Ltd held by the Company
§ Mortgage of property situated at Mangalore held by Tanglin Developments Ltd
§ Personal Guarantee of Mr. V.G. Siddhartha
Tenure of Loan - 24 months
The credit availed has to be repaid at the end of 24 months commencing from first
utilisation date.
Tata Capital Financial Secured Term loan 595.51 The credit availed carries an interest of 11.60% p.a. payable quarterly and the loan
Services Ltd is secured by:
§ Pledge of unencumbered shares of Mindtree Limited held by the Company
§ Mortgage of property situated at Mangalore city admeasuring 6.76 acres
standing the name of Tanglin Developments Limited
§ Corporate guarantee of Tanglin Developments Limited
§ Personal guarantee of Mr. V.G. Siddhartha
The tenure of this facility is 36 months from the first drawdown date
A bullet repayment at the end of 36 months or on exercise of call/ put option by
the lender or borrower respectively is to be done.

188 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
A.K Capital Finance Secured Loan 250.00 The facility carries an interest rate of 18.00% p.a. and was borrowed and the loan
Private Limited repayable is secured by:
on demand § Mortgage over the immovable property owned by Mahadeshwara Enterprises
situated in Malleshwaram
§ Pledge of unencumbered Equity shares of Coffee Day Global Limited. held by
Coffee Day Enterprises Limited.
§ Corporate Guarantee of Coffee Day Enterprises Limited (CDEL)
§ Personal guarantee of Mr. V.G. Siddhartha
Repayment Terms:
§ First 50% of the facility should be repaid at the end of the 2nd month from the
date of first disbursement
§ The balance 50% of the facility should be repaid at the end of the 3rd month
from the date of first disbursement
§ An option to rollover the facility for a maximum period up to 9 months in a way
that it does not go beyond the validity of the facility taken (Validity being 12
months from date of disbursement).
A facility of the Rs.25,00,00,000 was borrowed and repaid during the year 2016-17
having similar terms.
Standard Chartered Secured Term loan 550.00 The loan is secured by:
Investments and § Pledge against the shares of companies and Mortgage over land owned by
Loans (India) Limited Group company
§ Personal guarantee of the Promoter and corporate guarantee.
The loan carries interest rate of 12.5% p.a and is repayable within 24 months(For
Rs.30 Crores) and 22 months (For Rs.25 Crores) from the date of first utilisation.
Oriental Bank of Secured Term loan 152.50 The loan is secured by:
Commerce § First charge over specific fixed assets.
§ Personal guarantee of the Promoter.
The loan carries interest rate of bank rate plus 4.35% bank spread and is repayable
in 28 quarterly instalments. The maturity date of the loan is 30.06.2020
Axis Bank Limited Secured Loan 0.51 Secured by
repayable § Hypothecation of stocks and receivables.
on demand § Charge over movable fixed assets of the subsidiary.
Clix Capital Services Secured Term loan 750.00 The loan is secured by:
Private Limited § Pledge of unencumbered Equity shares of Coffee Day Global Limited. held by
Coffee Day Enterprises Limited.
§ Corporate Guarantee of Company
§ Personal guarantee of Mr. V.G. Siddhartha
The loan carries interest rate of 12.5% p.a and is repayable within 12 months from
the date of first utilisation.
IDFC Bank Limited Secured Debentures 1,000.00 The Group had raised a sum of Rs.1000 million through issue of 1,000 Nos. secured
listed 11% Non-convertible debentures of Rs.10 lakh each against the security of
dredger belonging to the subsidiary company viz Norsea Offshore India Ltd for the
purpose of redeeming the then existing debentures of Kotak Mahindra [earlier ING
Vysya Bank Limited].
The NCDs are listed in NSE. The IDBI Trusteeship Services Ltd has been appointed
as the debenture trustees.
Debentures are redeemable on 25 June 2021.

FINANCIAL SECTION | 189

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
RBL Bank Limited Secured Debentures 1,000.00 Sical Multimodal and Rail Transport Limited has raised a sum of Rs.1000 million
through issue of 1000 Nos. Secured listed 11% Non-convertible debentures of
Rs.10 lakh each against the security of -
(a) Exclusive first ranking mortgage on 0.60 acres of land situated at Anupampattu
Village, Ponneri Taluk, Thiruvallur District, Tamil Nadu;
(b) Exclusive first mortgage charge on land (admeasuring 19.5 acres) & Building
situated there on at Minjur, Chennai;
(c) First Pari passu mortgage charge along with existing charge holder on land
(admeasuring around 2.248 acres) owned by SMART covering access road to
above mentioned land & building;
(d) Exclusive first charge over specific plant & machinery/ movable fixed assets
(i.e. 2 rakes & 1,045 Containers) and
(e) Unconditional and irrevocable Corporate Guarantee of SICAL Logistics
Limited.
Canara Bank Secured Term loan 750.00 The subsidiary has taken a secured term loan of Rs.400 million during FY 2013-14,
Rs.100 million in FY 2014-15 and Rs.5,00 million during the year against security
of pari pasu second charge over current assets and movable fixed assets of the
Company with a moratorium period of 12 months along with Bank of Baroda
who has the first charge over the assets. Loan is repayable in 16 equal quarterly
instalments. The interest rate as on 31 March 2017 is 11.55% which is linked to the
base rate.
Indusind Bank Secured Term loan 688.40 a) The subsidiary has taken a term loan of Rs.270 million during the FY 2013-14
against security of pari-passu charge on the Ennore Project Assets. Loan is
repayable in 84 equal monthly instalments. The interest rate as on 31 March
2017 is 10.98% which is linked to the base rate.
b) The subsidiary has taken a term loan of Rs.70 million during the current
financial year general corporate purposes. Loan is repayable in 45 equal
monthly instalments. The subsidiary has also taken Rs.521 millions of term
loan during the current financial year. Loan is repayable in 59 step-up
monthly instalments including 3 months of moratorium. The interest rate as
on 31 March 2017 is 10.98% which is linked to the base rate. The securities
offered for these loans are as below (including a)):
i) charge on receivables from Ennore project;
ii) pari-passu charge on the Ennore project assets and
iii) exclusive charge on the office building located at 11, 12, 13, 14 and 15
Rajgiri Chambers, Mumbai.
c) The loan is secured by a charge on the assets purchased out of the loan. The
interest rate as on 31 March 2017 is 11.00%.
Bank of Baroda Secured Term loan 1,224.90 a) The subsidiary had taken term loan of Rs.750 million during the FY 2014-
15 against security of certain Immovable properties (Land) for carrying
CAPEX and other expenditure for work orders awarded from Neyveli Lignite
Corporation Limited and Mahanadi Coal fields Limited, with a moratorium
period of 9 months. Loan is repayable in step up 16 quarterly instalments. The
interest rate as on 31 March 2017 is 13.10% which is linked to the base rate.
b) The subsidiary has taken term loan of Rs.34 million secured by way of
hypothecation charge of assets created out of term loan from CFS division.
The loan is repayable in 21 monthly instalments. The interest rate as on 31
March 2017 is 11.40% which is linked to the base rate.
c) Sical Multimodal and Rail Transport Limited has taken term loan of Rs.941
million against security of equitable mortgage of land and building situated
at CFS Minjur comprising of 35.50 acres of land and charge on assets created
out of term loan, with a moratorium period of 12 months. Loan is repayable
in step up 24 quarterly instalments. The interest rate as on 31 March 2017 is
11.40% which is linked to the base rate.

190 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
South India Bank Secured Term loan 500.00 The subsidiary had taken a term loan of Rs.500 million during the FY 2015-16 to
meet its capital expenditure requirements against security of movable Fixed assets
to be funded out of the loan amount, with a moratorium period of 12 months.
Loan is repayable in 12 equal quarterly instalments. The interest rate as on 31 March
2017 is 12.80% which is linked to the base rate.
Yes Bank Secured Term loan 2,796.10 a) The subsidiary had taken a term loan of Rs.1300 million during the FY 2015-
16 to meet its capital expenditure requirements against security of fixed and
current assets, with a moratorium period of 6 months. Loan is repayable in 18
quarterly instalments. The interest rate as on 31 March 2017 is 14% which is
linked to the base rate.
b) The subsidiary has taken a term loan of Rs.1050 million during the current
financial year to meet its capital expenditure requirements against security of
subservient charge over fixed and current assets and charge over FD of Rs.300
million. Loan is repayable in 12 step-up quarterly instalments, including
moratorium of 6 months. The interest rate as on 31 March 2017 is 11.25%
which is linked to the base rate.
c) Norsea Offshore India Limited had obtained Rs.800 million term loan facility
carrying an interest rate of 10.70% which is linked to the base rate during FY
2012-13. This term loan is secured by subservient charge over dredger. The
tenor of the loan is 84 months including a moratorium of 36 months followed
by 16 quarterly repayment.
d) The loan is secured by a charge on the assets purchased out of the loan. The
interest rate as on 31 March 2017 is 10.75%.
Axis Bank Limited Secured Term loan 92.40 The loan is secured by a charge on the assets purchased out of the loan. The
interest rate as on 31 March 2017 is 9.52%.
Kotak Mahindra Bank Secured Term loan 62.20 The loan is secured by a charge on the assets purchased out of the loan. The
Limited interest rate as on 31 March 2017 is 10.01%.
DCB Bank Limited Secured Term loan 168.80 The loan is secured by a charge on the assets purchased out of the loan. The
interest rate as on 31 March 2017 is 10.0%.
RBL Bank Limited Secured Term loan 776.80 The loan availed by Sical Saumya Mining Limited from bank is secured by exclusive
charge on current assets of the Company, unconditional and irrevocable corporate
guarantee of Sical Logistics Limited. The loan is repayable over 32 months including
a moratorium period of 2 months. The interest rate as on 31 March 2017 is 12.45%
which is liked to the base rate.
SREI Infrastructure Secured Term loan 442.90 The loan is secured by a charge on the assets purchased out of the loan. The
Finance Limited interest rate as on 31 March 2017 is 9.47%.
Sundaram Finance Secured Term loan 191.40 The loan is secured by a charge on the assets purchased out of the loan. The
Limited interest rate as on 31 March 2017 is 10.34%.
Tata Finance Limited Secured Term loan 73.40 The loan is secured by a charge on the assets purchased out of the loan. The
interest rate as on 31 March 2017 is 10.79%.
Daimler Financial Secured Term loan 311.90 The loan is secured by a charge on the assets purchased out of the loan. The
Services India Private interest rate as on 31 March 2017 is 10.66%.
Limited
Cholamandalam Secured Term loan 130.70 The loan is secured by a charge on the assets purchased out of the loan. The
Invest & Finance Co interest rate as on 31 March 2017 is 10.39%.
Ltd
HDB Financial Service Secured Term loan 12.80 The loan is secured by a charge on the assets purchased out of the loan. The
Ltd interest rate as on 31 March 2017 is 11%.
Reliance Commercial Secured Term loan 33.40 The loan is secured by a charge on the assets purchased out of the loan. The
Finance Limited interest rate as on 31 March 2017 is 13.50%.
Siemens Financial Secured Term loan 15.10 The loan is secured by a charge on the assets purchased out of the loan. The
Services Private interest rate as on 31 March 2017 is 9.60%.
Limited
Tata Motor Finance Secured Term loan 94.30 The loan is secured by a charge on the assets purchased out of the loan. The
Service Limited interest rate as on 31 March 2017 is 10.28%.
Volvo Financial Secured Term loan 210.30 The loan is secured by a charge on the assets purchased out of the loan. The
Services India Private interest rate as on 31 March 2017 is 8.95%.
Limited

FINANCIAL SECTION | 191

Notes to the consolidated financial statements for the year ended 31 March 2017
(Rs. in million)
Institution Nature Type Amount Terms and conditions
Bank of Baroda Secured Loan 1,988.70 a) Working capital facility is secured by composite hypothecation of entire
repayable raw materials, stock in process, stores and spares, packing material, finished
on demand goods, plant and machinery etc and book debts and trade advances of the
Company both present and future as well as equitable mortgage of certain
immovable properties. The interest rate as on 31 March 2017 is 11.90% which
is liked to the base rate.
b) Working capital facility is secured by composite hypothecation agreement
for hypothecation of entire raw materials, stock-in-process, stores & spares,
packing materials, finished goods, etc and Book-debts & trade advance of the
Company, both present & future of CFS division. The interest rate as on 31
March 2017 is 11.40% which is liked to the base rate.
Hewlett Packard Secured Term loan 2.77 Secured by
Financial Services § Charge on movable fixed assets of the Magnasoft Consulting India Private
India Pvt Ltd Limited with WDV of Rs.27,83,577 as on 31 March 217;
The loan carries a interest rate of 12% to 16% p.a. which is repayable in equal
monthly instalments with effect from August 2015 payable.
Hewlett Packard Secured Long-term 10.47 Secured by
Financial Services maturities § Charge on leased plant and equipment of the Magnasoft Consulting India
India Pvt Ltd of finance Private Limited with WDV of Rs.10.17 as on 31 March 217;
lease The loan carries a interest rate of 13.35% which is repayable in equal monthly
obligations instalments.
ICICI Bank Limited Secured Loan 79.72 Primary Security: Exclusive charge on the entire current assets of the group.
repayable Exclusive Charge on the movable fixed asset of the group and the assets funded
on demand by the bank .
Collaterally Secured by lien on Fixed Deposit of the group to the extent of Rs.2.14
million and lien on fixed deposit held by the holding group M/s.Coffee Day Trading
Limited(formerly known as Global Technology Ventures Limited) ,to the extent of
Rs.13.28 million.
Personal Guarantee: Mr.Harmit Karla, Director and Member (Personal Guarantee is
not less than Rs.100 million)
Corporate guarantee by the holding group.
Rate of Interest:
For cash credit - I Base plus 3.25%
For FCNR loan Cash credit - Upfront 1.7% and monthly 3 months LIBOR plus 5.45%
Other short term loan - Upfront 2% and monthly 3 months LIBOR plus 5.15%.
FCNR short term loan is repayable in 2 years in monthly instalments with an option
to renew for 1 more year.
Axis Bank Limited Secured Loan 14.29 Collaterally Secured by lien on Fixed Deposit of the Company to the extent of
repayable Rs.2,01,123 and lien on fixed deposit held by the holding company M/s. Coffee Day
on demand Trading Limited(formerly known as Global Technology Ventures Limited) ,to the
extent of Rs.95,13,457/-
Personal Guarantee: Mr.Harmit Karla, Director and Member (Personal Guarantee is
not less than Rs.100,000)
Rate of interest:
For cash credit - 2.15% above axis bank's MCLR 3 months ( the MCLR 3 M rate
applicable at present being 9.15% p.a.) i.e., with present applicable rate of 11.30%
per annum

192 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
24 OTHER NON-CURRENT FINANCIAL LIABILITIES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Deposits from customers 371.80 276.16 227.68
Derivative liability 15.00 58.10 27.40
Rental deposits 815.90 801.32 786.01
Interest accrued but not due on borrowings 5.42 - 38.89
Payables for purchase of fixed assets - 162.30 138.40
Other payables 0.95 - -
1,209.07 1,297.88 1,218.38

25 NON-CURRENT PROVISIONS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Provision for employee benefits
- Gratuity 108.81 97.31 72.62
- Compensated absence 11.21 7.55 6.07
Others
- Contingent provisions against standard assets 0.50 0.47 0.46
120.52 105.33 79.15

26 DEFERRED TAX LIABILITIES (NET)

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Deferred tax liability
- Excess of depreciation allowed under Income Tax Act, 1961 over 917.91 770.75 724.45
depreciation as per books
- Net unrealised gain on open future positions - 0.46 0.54
- Net gain on fair valuation of equity or debt instruments - - 0.17
- Others 9.90 8.80 7.70
Deferred tax assets
- Unabsorbed losses (578.90) (482.70) (498.60)
- Expenditure covered under 43 B of Income-tax Act, 1961 (26.90) (26.11) (1.10)
- Other disallowance under income tax laws - (4.80) (3.10)
- Gratuity (1.28) (0.85) (1.07)
- Provision for doubtful trade receivables (64.50) (105.50) (86.20)
256.23 160.05 142.79

27 OTHER NON-CURRENT LIABILITIES

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Due to others
- Advance from customers 147.87 181.65 177.46
- Rent equalisation reserve 69.52 44.98 36.52
217.39 226.63 213.98
28 CURRENT BORROWINGS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Secured:
Loan repayable on demand * 5,179.51 4,783.32 4,009.95
Unsecured:
- Loans from related parties (refer note 51) - 26.05 23.12

FINANCIAL SECTION | 193

Notes to the consolidated financial statements for the year ended 31 March 2017
28 CURRENT BORROWINGS (Contd.)
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
- Loans and advances from parties other than related parties
- Illuminati Trading Private Limited 115.00 85.00 25.00
- DAX Partners 61.61 34.03 -
- Highgrove Management 60.11 62.35 58.85
- Ess & Ess HRM services Private Limited - - 12.75
- Bank overdraft * 0.51 142.23 127.71
- Commercial papers issued to banks/ financial institution - 89.89 358.80
5,416.74 5,222.87 4,616.18

Information about the Group's exposure to interest rate, foreign currency and liquidity risks is included in note 55.
* For detailed terms and conditions refer note 23.

29 TRADE PAYABLES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Outstanding dues to micro enterprises and small enterprises - - -
Outstanding dues to other than micro enterprises and small enterprises 1,011.68 991.65 1,234.22
(refer note 51)
1,011.68 991.65 1,234.22
All trade payables are 'current'.
Information about the Group's exposure to interest rate, foreign currency and liquidity risks is included in note 55.

30 OTHER CURRENT FINANCIAL LIABILITIES

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Current maturities of long-term debt *
- Debentures 2,571.28 2,268.33 1,347.54
- Term loans 4,462.47 2,427.47 5,336.50
- Others loans - 258.08 3,575.68
Current maturity of finance lease obligation * 7.11 5.64 2.46
Interest accrued
- Interest accrued and not due on borrowings 346.36 142.04 182.29
- Interest accrued and due on borrowings 6.66 2.22 12.42
Derivatives not designated as hedges
- foreign exchange forward contracts - 1.82 0.30
Others
- Security deposits 20.23 4.57 43.93
- Accrued salaries and benefits 354.66 422.53 206.24
- Payable to clients 801.56 393.29 321.31
- Creditors for capital goods (refer note 51) 256.81 134.41 138.96
- Employee dues 19.78 - 14.17
- Deposits from customers 442.07 443.67 356.30
- Book overdraft 151.78 152.64 428.86
- Creditors for expenses 1,122.02 913.15 792.30
- Other payables 82.58 85.65 97.07
- Liability towards purchase of shares - - 21.74
10,645.37 7,655.51 12,878.07
Information about the Group's exposure to interest rate, foreign currency and liquidity risks is included in note 55.
* For detailed terms and conditions refer note 23.

194 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
31 CURRENT PROVISIONS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Provision for employee benefits
- Gratuity 12.56 11.49 12.59
- Compensated absence 30.72 33.12 22.43
- Others - 1.36 -
43.28 45.97 35.02

32 CURRENT TAX LIABILITIES

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
- Provision for tax, net of advance tax 268.34 206.37 47.10
Closing balance 268.34 206.37 47.10

33 OTHER CURRENT LIABILITIES

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
- Advance from customers (refer note 51) 306.05 78.67 226.95
- Government subsidy received in advance (refer note 48) 2.86 38.34 25.00
- Statutory dues 226.10 163.67 182.49
- Advance payments towards unexpired gift vouchers 6.13 3.86 12.80
- Rent equalisation reserve 10.83 8.15 6.53
- Others 19.40 7.82 3.45
571.37 300.51 457.22

34 REVENUE FROM OPERATIONS

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Sale of products
Sale of coffee beans 4,606.36 4,046.22
Sale of food, beverages and other items 11,877.96 10,299.15
Sale of merchandise items 624.44 634.06
Sale of traded goods 2.35 -
Sale of services
Rental income from SEZ and IT parks 1,100.34 1,000.42
Income from integrated logistics services 9,850.80 8,297.20
Service income from coffee vending machines 807.80 696.27
Income from software development and related services 410.33 397.15
Income from operations of resort 227.83 207.29
Maintenance income 146.44 152.58
Income from financial services
Consultancy services 368.56 166.15
Trading income - securities 2,725.45 2,981.55
Brokerage income 610.20 548.64
Transaction charges 901.22 624.38
Delayed payment charges 46.89 50.18
Depository charges 20.26 25.85
Portfolio management fees 10.44 5.29
Interest income 31.70 30.15
Other operating revenue
Sale of import entitlements 104.76 89.59
Advertisement income 300.09 224.36
Interest Income 41.56 35.65
Gain / (loss) from commodity futures 50.08 (36.09)

FINANCIAL SECTION | 195

Notes to the consolidated financial statements for the year ended 31 March 2017
34 REVENUE FROM OPERATIONS (Contd.)
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Electricity charges 128.97 145.31
Others 8.54 21.23
Less: quality claims (3.80) (1.66)
Less: sales tax and luxury tax (1,260.94) (1,117.26)
Less: service tax (1,837.35) (1,357.67)
Less: trade discounts (704.86) (360.81)
31,196.42 27,805.18

35 OTHER INCOME
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Interest income 464.51 479.34
Interest on Income tax refund 54.21 11.57
Rental income 49.92 22.76
Excess provision written back 49.47 11.20
Dividend income
- Investments carried at fair value through profit and loss 12.99 4.62
Bad debts recovered 1.43 0.22
Gain from forex hedging 1.05 6.16
Profit on sale of asset 0.03 3.20
Foreign exchange gain, net - 63.33
Non-redemption of gift vouchers - 1.95
Miscellaneous income 4.26 39.36
637.87 643.71

36 COST OF MATERIALS CONSUMED

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Opening stock of raw coffee, packing materials, perishables, consumables and 862.39 883.15
merchandise
Purchase of raw materials and packing materials
- Purchase of coffee beans 3,633.68 3,606.29
- Purchase of perishables, consumables and packing materials 3,699.99 2,981.92
- Purchase of merchandise items 99.85 128.81
Closing stock of raw coffee, packing materials, perishables, consumables and (997.59) (862.39)
merchandise
7,298.32 6,737.78

37 COST OF INTEGRATED LOGISTICS SERVICES

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Handling and transportation 4,049.10 3,675.10
Freight 1,873.80 1,559.60
Other cost of integrated logistics services 764.90 739.80
6,687.80 5,974.50

196 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
38 CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
(a) Opening stock
Finished goods 175.37 94.57
Work-in-progress 79.91 64.22
(b) Closing stock
Finished goods (112.27) (175.37)
Work-in-progress (79.03) (79.91)
63.98 (96.49)

39 EMPLOYEE BENEFITS EXPENSE

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Salaries and wages 3,529.92 3,116.39
Contribution to provident and other funds 269.19 221.71
Share based payments to employees 13.04 27.25
Staff welfare expenses 99.26 68.64
3,911.41 3,433.99

40 FINANCE COSTS
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Interest expense 3,074.67 3,422.77
Other borrowing costs 97.42 172.12
3,172.09 3,594.89

41 DEPRECIATION AND AMORTIZATION EXPENSE

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Depreciation of property, plant and equipment (refer note 4) 2,122.53 1,898.27
Depreciation on Investment Properties (refer note 5) 110.14 562.36
Amortization of intangible assets (note 7) 35.73 56.36
2,268.40 2,516.99

42 OTHER EXPENSES
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Rent 2,033.81 1,715.18
Securities transaction tax 1,277.00 1,168.79
Exchange charges 1,210.79 1,051.97
Brokerage and commission 359.76 326.01
Power and fuel 320.60 344.36
Legal, professional and consultancy 295.54 220.53
Transportation, traveling and conveyance 263.43 233.26
Communication expenses 234.52 155.59
Rates and taxes 152.71 148.73
Café housekeeping and maintenance 150.95 173.22
Subcontracting charges 136.41 127.34

FINANCIAL SECTION | 197

Notes to the consolidated financial statements for the year ended 31 March 2017
42 OTHER EXPENSES (Contd.)
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Repairs and maintenance
- plant and machinery 79.77 155.59
- buildings 31.31 26.29
- vehicles 2.40 2.30
- others 99.86 82.41
Advertising and business promotion expenses 80.17 216.07
Grinding and curing charges 80.17 72.35
Security charges 63.34 47.52
Insurance 42.15 26.92
Freight and handling charges 41.23 87.07
Membership and subscription 40.52 28.75
Provision for doubtful debts 40.33 87.54
Office maintenance and utilities 26.23 29.76
Recruitment charges 22.46 9.73
Foreign exchange loss, net 21.73 -
License fee 20.07 26.15
Payment to auditor's 14.06 14.00
Printing and stationery 13.71 14.98
Food, beverages and other consumables 11.73 9.57
Corporate social responsibility 11.70 6.25
Provision for impairment of goodwill 7.07 -
Director's fees 5.32 8.87
Hotel maintenance 4.12 2.99
Linen, room and other operating expenses 4.12 4.21
Bad debts written off 3.61 16.23
Commission to directors 3.10 3.10
Loss on sale of assets, net 3.03 39.89
Miscellaneous expenses 134.67 124.04
7,343.50 6,807.56

43 INCOME TAX
A Amounts recognised in statement of profit and loss
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Current income tax:
Income tax charge 617.35 469.10
Adjustments in respect of income tax of previous year (81.11) (38.06)
536.24 431.04
Deferred tax:
Relating to origination and reversal of temporary differences 76.72 68.55
Increase/ reduction of tax rate (7.50) (0.61)
Recognition of previously unrecognised/ (derecognition of previously - (3.58)
recognised) deductible temporary differences
Minimum alternative tax credit entitlement (44.02) (49.01)
Minimum alternative tax credit entitlement of earlier years (6.56) -
18.64 15.35
Income tax expense reported in the statement of profit or loss 554.88 446.39

198 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
43 INCOME TAX (Contd.)
B Amounts recognised in other comprehensive income
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Gain/(loss) on financial assets measured at fair value through other - 0.37
comprehensive income, net of tax
Effective portion of gains and losses on hedging (2.53) (5.29)
Net (gain)/loss on remeasurement of defined benefit liability/ (assets) (1.01) 2.25
Income tax charged to other comprehensive income (3.54) (2.67)

C Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Profit/ (loss) before investment, accounted for using equity method and tax 634.45 (588.97)
Loss from entities in the Group before taxes 1,146.46 1,868.64
Adjusted profit before tax 1,780.91 1,279.67
Tax at the Indian tax rate of 34.61% (31 March 2016: 34.61%) 616.37 442.89
Effect of:
Recognition of previously unrecognised tax loses (117.43) (64.05)
Changes in unrecognised temporary differences 89.87 85.38
Adjustments in respect of current income tax of previous years (19.98) 0.94
Income taxed at special rates (10.15) (13.05)
Others (3.80) (5.72)
554.88 446.39
D. Amount for which no deferred tax asset is recognised in the balance sheet:
Deferred tax assets have not been recognised in respect of the following losses arisen in the Group that have been loss-making
and it is not likely to generate taxable income in the foreseeable future.
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Unused tax losses 3,719.88 1,915.60
Deductible temporary differences 24.59 15.72
Provision for bad and doubtful debts - 0.28

The unused tax losses of the previous year are set off against current year income. 8.25
The subsidiary company has earned sufficient profits to set off major portion of the opening unused tax losses. 0.41*
*Accordingly deffered tax asset is recognised as at the year end in respect of carry forward of unutilised tax losses and deductible
temporary differences.
Other deductible temporary differences do not expire under current tax legislation.

FINANCIAL SECTION | 199

Notes to the consolidated financial statements for the year ended 31 March 2017
44 CONTINGENT LIABILITIES AND COMMITMENTS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Contingent liabilities:
Claims against the Group not acknowledged as debt (includes tax 2,424.68 1,979.91 1,088.46
demands)
Guarantees excluding financial guarantees 1,994.33 1,231.43 822.83
Other financial guarantees 32.00 88.50 82.70
Commitments:
Estimated amount of contracts remaining to be executed on capital 440.15 360.83 444.13
account (net of advances) and not provided for
Other commitments towards advertisement contract entered by the - - 50.00
Company
4,891.16 3,660.67 2,488.12

Notes:
a) Pending resolution of the respective proceedings, it is not practicable for the Group to estimate the timings of cash outflows, if any,
in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
b) The Group has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required
and disclosed as contingent liabilities where applicable, in its financial statements. Based on the advice from the Group's legal
counsel, management does not expect the outcome of these proceedings to have a materially adverse effect on its financial
position. The Group does not expect any reimbursements in respect of the above contingent liabilities.

45 EARNINGS PER SHARE (EPS)

(i) Reconciliation of earnings for calculation of earnings per share:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Total comprehensive income as per statement of profit and loss 492.63 (486.66)
Net profit for basic earnings per share 492.63 (486.66)
Net profit for diluted earnings per share 492.63 (486.66)

(ii) Reconciliation of number of equity shares for computation of basic earnings per share is set out below:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Number of equity shares at the beginning of the year (Refer note 21) 206,001,719 14,591,551
Add: Weighted average number of equity shares issued during the year - 42,492,521
Number of weighted average equity shares outstanding during the year 206,001,719 57,084,072
Add: Bonus shares issued during the year* - 102,140,857
Weighted average number of equity shares for calculation of earnings per share 206,001,719 159,224,929
* In accordance with Ind AS 33 on 'Earnings Per Share', basic and diluted earnings per share is adjusted for 1:7 bonus issue for previous
period presented.

(iii) Earnings per share:

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
From continuing operations
- Basic 2.39 (3.06)
- Diluted 2.39 (3.06)

200 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
46
SPECIFIED BANK NOTE
During the year, the Group had Specified Bank Notes (SBNs) or other denomination notes as defined in the MCA notification, G.S.R.
308(E), dated March 31, 2017. The details of SBNs held and transacted during the period from November 8, 2016 to December 30,
2016, the denomination‑wise SBNs and other notes as per the notification are as follows :
(Rs. in million)
Particulars SBNs* Other denomination Total
notes
Closing cash in hand on 8 November, 2016 63.27 9.65 72.92
(+) Permitted receipts - 416.78 416.78
(-) Permitted payments 2.41 11.89 14.30
(-) Amount deposited in Banks 60.86 349.79 410.65
Closing cash in hand on 30 December, 2016 - 64.75 64.75
* For the purposes of this note, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the
Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated November 8,
2016.
47 SHARE-BASED PAYMENTS
A. Description of share-based payment arrangements:
Certain employees of one of the subsidiary, Coffee Day Global Limited (CDGL) have received employee stock options (‘ESOP’)
on the shares granted by a trust sponsored by the promoters of the CDGL. The Employee Option Plan is designed to reward
the employees.
The promoters of the CDGL have reserved 6.2 million equity shares of the CDGL with ABC Employees’ Welfare Trust (‘the Trust’)
for issuance to eligible employees, under ESOP plans (‘Plan A and Plan B’).
The Plans are administered by an ESOP Advisory Committee (‘the Committee’) constituted by the Board of the CDGL.
Under the plans, the options will be issued to employees at an exercise price, which may be decided by the committee from
time to time. The equity shares covered under these options vest over a period of thirty six months for Plan A and eighteen
months for Plan B from the date of grant. The exercise period of the options is 3 months from the date of vesting.
The terms and conditions related to the grant of the share options are as follows:-
Plan A:
Particulars
Employees entitled All Employees in permanent employment except the Promoters and Directors
Number of options 6.2 million shares have been reserved for issue under employee stock option scheme (Plan A and
Plan B).
Vesting conditions 25% of the options will expire at the end of the 1st and 2nd year and the remaining 50% will expire
at the end of the third year.
Contractual life of years The contractual life of the options are 39 months.

Plan B:
Particulars
Employees entitled All Employees in permanent employment except the Promoters and Directors
Number of options 6.2 million shares have been reserved for issue under employee stock option scheme (Plan A and
Plan B).
Vesting conditions 100% of the Grants vests at the end of 18 months from Grant date.
Contractual life of years The contractual life of the options are 21 months.
In addition to above scheme, certain employees of the Magnasoft Consulting India Private Limited (MCIPL) have also
received employee stock options (‘ESOP’) on the shares granted by a trust sponsored by the promoters of the MCIPL. The
Employee Option Plan is designed to reward the employees.
The group have reserved 1.34 million equity shares of the group with Magnasoft Employees’ Welfare Trust (‘the Trust’) for
issuance to eligible employees, under ESOP plans.
The Plans are administered by the Board of the group.
Under the plans, the options will be issued to employees at an exercise price, which may be decided by the Board from time
to time. The equity shares covered under these options vest over a period of 12 to 36 months from the date of grant.

FINANCIAL SECTION | 201

Notes to the consolidated financial statements for the year ended 31 March 2017
47 SHARE-BASED PAYMENTS (Contd.)
The terms and conditions related to the grant of the share options are as follows:-
Particulars
Employees entitled All Employees in permanent employment except the Promoters and Directors
Number of options 1.3 million shares have been reserved for issue under employee stock option scheme (Plan A)
Vesting conditions 100% of the Grants vests at the end of 12 - 36 months from Grant date.
Contractual life of years The contractual life of the options are 36 months

B. Measurement of fair values

The fair value at the grant date is determined using the Black Scholes model which takes into account the exercise price, the term
of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk free interest rate for the term of the option.
The fair value at the grant date of options granted to employees of CDGL during the year ended 31 March 2017 was Rs.Nil per
option (31 March 2016: Rs.20.81). The inputs used in the measurement of the grant date fair values of the plan are as follows:
Plan A:
Ind AS 102 requires the share-based plan to be measured at fair value. However, Ind AS 101 gives an optional exemption to measure
the equity settled share-based plan at intrinsic value for options which were vested as on the transition date. For options vested
before 1 April 2015, the Group has availed the exemption and accounted the same at intrinsic value. For options unvested as at 1
April 2015, the Group has measured the options at fair value. However, there are no outstanding options as at 31 March 2017 as all
the options that were granted have been exercised or forfeited during the year. The fair value at the grant date of options granted
during the previous year ended 31 March 2016 was Rs.25.58 per option. The fair value at the grant date is determined using the
Black Scholes model which takes into account the exercise price, the term of the option, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The inputs used in the measurement of the grant date fair values of the plan are as follows:
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Vesting period - 36 months
Exercise price - 30
Expected term (years) - 3.25
Fair value of share price at grant date - 44.71
Expected price volatility of shares - 54.49%
Expected dividend yield - 0%
Risk free interest rate - 6.58%
Plan B:
There are no outstanding options as at 31 March 2017 as all the options that were granted have been forfeited during the year. The
fair value at the grant date of options granted during the previous year ended 31 March 2016 was Rs.86.94 per option. The fair value
at the grant date is determined using the Black Scholes model which takes into account the exercise price, the term of the option,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option.
The inputs used in the measurement of the grant date fair values of the plan areas follows:
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Vesting period - 18 months
Exercise price - 150
Expected term (years) - 1.75
Fair value of share price at grant date - 199.42
Expected price volatility of shares - 54.49%
Expected dividend yield - 0%
Risk free interest rate - 7%
The fair value at the grant date of options granted to employees of MCIPL during the year ended 31 March 2017 was Rs.Nil per
option (31 March 2016: Rs.5.86). The model inputs for options granted during the year ended 31 March 2017 included:

202 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
47 SHARE-BASED PAYMENTS (Contd.)
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Vesting period - 0.16 to 3.31 years
Exercise price - Rs.1
Grant date - Various dates
Expiry date Upon termination of employment
Share price at grant date - Rs.6.58 - 8.67
Expected price volatility of shares - 0%
Expected dividend yield - 0%
Risk free interest rate - 7.66% to 7.87%
- The expected volatility is a measure of the amount by which a price is expected to fluctuate during a period. The measure of
volatility used in option pricing models is the annualised standard deviation of the continuously compounded rates of return on
the share over a period of time.
- As per Ind AS 102, the risk-free interest rate is the implied yield currently available on zero-coupon government issues of the
country in whose currency the exercise price is expressed, with a remaining term equal to the expected term of the option being
valued (based on the option’s remaining contractual life and taking into account the effects of expected early exercise).
- The expected term of an option is the length of the period over which the option is expected to be unexercised.
C. Reconciliation of outstanding share option
The movements in the options under the plans during the year ended 31 March 2017 and 31 March 2016 is set out below:
CDGL Plan A: (Rs. except per share data)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Weighted Shares arising Weighted Shares arising
average price out of options average price out of options
Outstanding at the beginning of the year 22.00 136,187 22.00 136,187
Granted during the year - - - -
Forfeitures during the year 30.00 (115,087) - -
Exercised during the year 30.00 (21,100) - -
Outstanding at the end of the year - - 22.00 136,187
Exercisable at the end of the year - - - 99,125
The trust had 136,187 shares outstanding at the end of the year ended 31 March 2016 having an exercise price of Rs.30. The
weighted average fair value of the above mentioned options estimated on the grant dates using the Black-Scholes-Merton model
is Rs.25.58. The options outstanding as at 31 March 2017 had a weighted average remaining contractual life of Nil years (Previous
year: 1 year).
CDGL Plan B: (Rs. except per share data)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Weighted Shares arising Weighted Shares arising
average price out of options average price out of options
Outstanding at the beginning of the year 150.00 822,000 - -
Granted during the year - - 150.00 822,000
Forfeitures during the year 150.00 822,000 - -
Exercised during the year - - - -
Outstanding at the end of the year - - 150.00 822,000
Exercisable at the end of the year - - - -

The trust has granted 822,000 shares during the previous year at an exercise price of Rs.150. The weighted average fair value of the
above mentioned options estimated on the grant dates using the Black-Scholes-Merton model is Rs.86.94. The options outstanding
as at 31 March 2017 had a weighted average remaining contractual life of Nil years (Previous year: 1 year).

FINANCIAL SECTION | 203

Notes to the consolidated financial statements for the year ended 31 March 2017
47 SHARE-BASED PAYMENTS (Contd.)
MCIPL Plan: (Rs. except per share data)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Weighted Shares arising Weighted Shares arising
average price out of options average price out of options
Outstanding at the beginning of the year 1.00 1,399,900 - -
Granted during the year - - 1.00 1,399,900
Forfeitures during the year - - - -
Exercised/ forfeited during the year 1.00 (1,219,500) - -
Outstanding at the end of the year 1.00 180,400 1.00 1,399,900
Exercisable at the end of the year 1.00 117,400 1.00 963,850

The trust has granted 1,219,500 shares during the previous year at an exercise price of Re. 1. The weighted average fair value of the
above mentioned options estimated on the grant dates using the Black-Scholes-Merton model is Rs.5.86. The options outstanding
as at 31 March 2017 had a weighted average remaining contractual life of 1 year (Previous year: 1 year).
Share options outstanding at the end of the year have the following expiry date and exercise price:
(Rs. in million)
(except share data)
Type of arrangement Grant Exercise Number of Fair value as Expense Outstanding
Date price options granted at 31 March recognized liability as at
(outstanding as 2017 during the the year end
at the year end) year
CDGL:
Plan A 1-Aug-12 30.00 - - 2.42 7.07
Plan B 1-Oct-15 150.00 - - 10.40 56.97
MCIPL Various dates 1.00 180,400 - 0.22 0.63
Total 13.04 64.67

48 GOVERNMENT GRANT
The Group is entitled to receive grant from various State Governments under Deen Dayal Upadhyaya Grameen Kaushalya Yojana
(erstwhile Aajeevika Skills Development Programme) launched by the Ministry of Rural Development (MoRD), Government of India,
towards providing training facilities. As at 31 March 2017, the Company has received cumulatively, total grant of Rs.77.05 million (31
March 2016 Rs.68.62 million, 1 April 2015: Rs.31.95 million).
The Group has incurred a cost of Rs.49.52 million (Previous year: Rs.23.34 million) under various heads. The said expenses has been
reduced from the proceeds of this grant.
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Staff welfare expenses 23.04 9.87
Rent 18.32 7.44
Legal and professional 2.05 3.45
Transportation, travelling and conveyance 3.54 1.11
Repairs and maintenance - buildings 1.28 1.04
Power and fuel 0.72 0.39
Printing and stationery 0.57 0.04
49.52 23.34

49 EMPLOYEE BENEFITS OBLIGATIONS

A. Defined contribution plan
The Group has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. Employees who are in
continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the
employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of
service. The gratuity plan is a funded plan and the Group makes contributions to recognised funds in India. The same is maintained
by the LIC New Group Gratuity Cash Accumulation Plan and Kotak gratuity group plan.

204 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
49 EMPLOYEE BENEFITS OBLIGATIONS (Contd.)
B. Reconciliation of the projected benefit obligations
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Change in projected benefit obligation:
Obligations at the beginning of the year 195.41 166.27
Included in profit and loss:
- Service cost 49.69 36.16
- Interest cost 11.84 9.99
Included in other comprehensive income:
- Actuarial (gains)/ losses arising from changes in financial assumptions 5.46 1.17
- Actuarial (gains)/ losses arising from experience adjustments (9.42) 3.86
- (Return)/ loss on plan assets excluding interest income (0.23) (0.32)
Benefits settled (22.43) (21.72)
Obligations at year end 230.32 195.41
Change in plan assets:
Plans assets at the beginning of the year, at fair value 120.01 113.97
Expected return on plan assets 12.97 13.27
Actuarial (loss)/gain 1.68 (0.35)
Contributions 23.02 14.84
Benefits settled (22.43) (21.72)
Plans assets at year end, at fair value 135.25 120.01

Liability recognised in the balance sheet

(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Fair value of plan assets: 135.25 120.01
Present value of defined benefit obligation at the end of the year 230.32 195.41
Total employee benefit liabilities 95.07 75.40
Net Liability
- Current 12.56 11.49
- Non current 108.81 97.31
- Prepaid gratuity (26.30) (33.40)
C. (i) Expense recognised in profit or loss:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Cost for the year
Service cost 49.69 36.16
Interest cost 11.84 9.99
(Return)/ loss on plan assets excluding interest income (6.93) (6.37)
Interest income (6.04) (6.90)
Net gratuity cost 48.56 32.88

(ii) Remeasurements recognised in other comprehensive income:

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Actuarial (gains)/ losses arising from changes in financial assumptions 1.77 6.20
Actuarial (gains)/ losses arising from experience adjustments (5.72) (1.17)
(Return)/ loss on plan assets excluding interest income 1.44 (0.67)
Net gratuity cost (2.51) 4.36

D. Plan Assets comprise of the funds amounting to Rs.135.25 million (March 2016: 120.01 million).

FINANCIAL SECTION | 205

Notes to the consolidated financial statements for the year ended 31 March 2017
49 EMPLOYEE BENEFITS OBLIGATIONS (Contd.)
E. Defined benefit obligation
(i) Actuarial assumptions
Principal actuarial assumptions at the reporting date:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Interest rate 6.65% - 7.82% 7.31% to 8.13%
Expected rate of return on plan assets 7.50% - 9.00% 8.50% to 9.31%
Salary increase 3.00% - 10.00% 3.00% - 10.00%
Retirement age 60 years 60 years
Attrition rate 2.00% - 37.00% 2.00% - 37.00%
Mortality table IALM (2006-08) IALM (2006-08)
The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and
other relevant factors such as supply and demand factors in the employment market.
(ii) Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation by the amounts shown below.
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Increase Decrease Increase Decrease
Discount rate (100 basis points movement) 110.93 117.62 89.70 95.01
Future salary growth (100 basis points movement) 117.68 110.82 95.07 89.59
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an
approximation of the sensitivity of the assumptions shown.

50 LEASES
(i) Operating lease
Assets given on operating lease:
The Group earns its facility rental income from investment property leased under operating lease which is recognized in the
statement of profit and loss on a straight-line basis over the term of the lease. Total lease rental income recognised in the
statement of profit and loss for the year is:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Cancellable 249.69 355.75
Non-cancellable 997.09 797.25
1,246.78 1,153.00
The future minimum lease receivables under non-cancellable operating leases in aggregate are as follows:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Not later than 1 year 236.02 367.44 212.85
Later than 1 year and not later than 5 years 229.53 444.49 328.21
More than 5 years 135.82 155.94 176.07

Amounts recognised in other comprehensive income

Assets taken on operating lease:
The Company leases office premises, café outlets, residential facilities and warehouses under operating lease agreements. The
Company intends to renew such leases in the normal course of its business. Total rental expense under operating leases was
Rs.2,033.81 million and Rs.1,715.18 million for the year ended 31 March 2017 and 31 March 2016 respectively.

206 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
50 LEASES (Contd.)
The future minimum lease payments under non-cancellable operating leases in aggregate are as follows:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Not later than 1 year 1,587.32 1,293.09 1,116.65
Later than 1 year and not later than 5 years 4,846.56 4,901.43 3,743.36
More than 5 years 1,961.06 1,782.28 2,020.83

(ii) Finance lease

The Group has entered into finance lease arrangements for certain equipments, which provide the Group an option to
purchase the assets at the end of the lease period
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016 As at1 April 2015
Minimum Net Minimum Net Minimum Net
lease present lease present lease present
payments value payments value payments value
Not later than 1 year 8.12 7.11 7.00 5.64 2.98 2.46
Later than 1 year and not later than 5 years 3.61 3.36 7.91 5.81 2.57 2.41

51 RELATED PARTY TRANSACTIONS

A. Enterprises where control exists
The related parties where control exists include subsidiaries, associates and joint ventures as referred in Note 1
B. Parties where significant influence exists/ parties under common control and with whom transactions have taken place:
Mysore Amalgamated Coffee Estates Limited Global Edge Software Private Limited
Sivan Securities Private Limited Coffee Day Schaerer Technologies Private Limited
Dark Forest Furniture Company Private Limited PSA SICAL Terminals Limited
Coffee Day Barefoot Resorts Private Limited AlphaGrep Trading Limited*
Coffee Day Resorts (MSM) Private Limited AlphaGrep HK Limited*
Sical Sattva Logistics Private Limited Alphagrep Technologies Limited*
Mindtree Limited Sampigehutty Estates Private Limited
* Alphagrep Technologies Limited, AlphaGrep HK Limited and AlphaGrep Trading Limited ceased to be joint ventures due to
loss of control by divestment of 40.5% stake in the entities.
C. Key management personnel :
Executive key management personnel: Non-Executive / Independent Directors:
Mr. V. G. Siddhartha Ms. Malavika Hegde
Mr. R. Ram Mohan Mr. Sanjay Nayar
Mr. Sadananda Poojary Mr. M. D. Mallya
Mr. Jayraj Hubli Mr. S.V. Ranganath
Mr. Venu Madhav Dr. Albert Hieronimus
Mr. B G Srinath
Mr. M R Shashi Bhushan
Mr. Kush Desai
Mr. Sumit R Kamath
Mr. Capt. K.N. Ramesh
Mr. Shankar V
Mr. Harmit Kalra
Mr. Radhakrishnan

FINANCIAL SECTION | 207

Notes to the consolidated financial statements for the year ended 31 March 2017
51 RELATED PARTY TRANSACTIONS (Contd.)
D. Related party transactions other than those with key management personnel
I. The following is a summary of transactions:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Services provided
PSA SICAL Terminals Limited - 16.00
Cost of services
Sical Sattva Logistics Private Limited 14.20 22.80
Loan / advance given
Dark Forest Furniture Company Private Limited 220.08 -
Mysore Amalgamated Coffee Estates Limited 6,028.94 6,946.60
Coffee Day Barefoot Resorts Private Limited 4.25 0.82
Loan received
Coffee Day Resorts (MSM) Private Limited 0.35 -
Mysore Amalgamated Coffee Estates Limited 3,385.60 3,152.84
Repayment of loan / advances
Mysore Amalgamated Coffee Estates Limited 2,945.14 3,152.83
Sivan Securities Private Limited - 10.06
Loans / advance recovered
Mysore Amalgamated Coffee Estates Limited 6,108.37 7,000.67
Coffee Day Resorts MSM Private Ltd 63.38 -
Interest received
Mysore Amalgamated Coffee Estates Limited 88.26 60.08
Interest paid on advances received from
Mysore Amalgamated Coffee Estates Limited 5.52 14.56
Reimbursement of expenses paid
Coffee Day Schaerer Technologies Private Limited 8.77 1.57
Purchase of fixed assets
Dark Forest Furniture Company Private Limited 344.70 356.48
Purchase of clean and raw coffee
Mysore Amalgamated Coffee Estates Limited 440.46 469.00
Sampigehutty Estates Private Limited 268.56 -
Purchases of coffee vending machines
Coffee Day Schaerer Technologies Private Limited 18.73 -
Sale of coffee vending machines spares
Coffee Day Schaerer Technologies Private Limited - 1.45
Sale of coffee and service income
Mindtree Limited 24.40 24.37
Rent received
Global Edge Software Private Limited 41.18 36.67
Mindtree Limited 419.21 415.32
Refundable deposit received
Mindtree Limited 117.41 -
Global Edge software Private Limited - 5.10
Deposits refunded
Mindtree Limited 159.71 193.52
Discount provided
Mindtree Limited 16.62 -
Advance received for sale of land
Coffee Day Barefoot Resorts Private Limited - 400.00
Advance refunded for sale of land
Coffee Day Barefoot Resorts Private Limited - 400.00
Purchase of software
Mindtree Limited 50.89 11.23

208 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
51 RELATED PARTY TRANSACTIONS (Contd.)
D. Related party transactions other than those with key management personnel (continued)
II. The following is a summary of balances receivable from and payable:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Creditors for capital goods
Mindtree Limited 37.41 10.37 -
Dark Forest Furniture Company Private Limited 105.33 22.32 -
Coffee Day Schaerer Technologies Private Limited 11.69 - -
Deposits payable
Mindtree Limited 481.61 523.91 717.44
Global Edge Software Private Limited 26.92 26.92 21.82
Other current liabilities
Mindtree Limited - 31.71 110.00
Current borrowings
Sivan Securities Private Limited - 0.07 10.06
Alphagrep Holding HK ltd - 25.24 13.06
AlphaGrep Trading Limited - 0.74 -
Trade payables
Sical Sattva Logistics Private Limited 25.20 28.00 21.89
Dark Forest Furniture Company Private Limited - 2.82 0.38
Current loans
Coffee Day Barefoot Resorts Private Limited 153.39 149.78 151.57
Coffee Day Resorts (MSM) Private Limited - 63.39 63.36
AlphaGrep HK Limited - 1.12 1.05
Alphagrep Technologies Limited 63.71 61.92 63.48
Advance for purchase of property (Capital advances)
Sivan Securities Private Limited 1,400.00 1,400.00 1,400.00
Trade receivables
Mysore Amalgamated Coffee Estates Limited - 1.26 0.66
Coffee Day Schaerer Technologies Private Limited - 2.40 -
Mindtree Limited 21.08 23.45 22.04
PSA SICAL Terminals Limited - - 3.17

E. Related party transactions with key management personnel

I. The following is a summary of transactions:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Compensation
- Short-term employee benefits* 76.80 69.47
- Sitting fees 23.00 47.00
Guarantee given/ (closed) (956.90) (138.18)
* The remuneration of directors and key executives is determined having regard to the performance of individuals and market
trends. Post employment benefit comprising gratuity and compensated absences are not disclosed as these are determined
for the Group as a whole.
II. The following is a summary of balances receivable from and payable:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Loans and advances 2.81 - -
Corporate guarantee received 2,172.22 3,129.12 3,267.30
F. Terms and conditions
All outstanding balances with these related parties are priced on an arm’s length basis and resulting outstanding balances are
to be settled in cash within the credit period allowed as per the policy. None of the balances is secured. No expense has been
recognised in the current year or prior year for bad or doubtful debts in respect of amounts owed by related parties.

FINANCIAL SECTION | 209

Notes to the consolidated financial statements for the year ended 31 March 2017
52 SEGMENT INFORMATION
Based on the "management approach" as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker ("CODM")
evaluates the Group performance and allocates resources based on an analysis of various performance indicators by business segments.
Chairman & Managing Director of the Company have been identified as the CODM.
Accordingly, information has been presented along these business segments viz. Coffee and related business, Integrated multimodal
logistics, Financial services, Leasing of commercial office space, Hospitality services and Investment and other corporate operations.
The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure
in individual segments, and are as set out in the significant policies.
Segment result represents EBITDA i.e. earnings before interest expense, depreciation / amortisation expense and tax. For the purpose
of segment reporting, the Group has included share of profit from associates and joint ventures under respective business segments.
Since the information about segment assets and segment liabilities are not reviewed by the CODM, the Group has not presented such
information as a part of its segment disclosure which is in accordance with the requirements of Ind AS 108.
Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Group,
therefore, believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are
separately disclosed as unallocated.
Unallocable expenses comprises of finance cost and certain other corporate costs. Unallocable income comprises of interest income
and other income.
(i) Segment Revenue:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Revenue from external customers:
Coffee and related business 18,273.14 15,872.37
Integrated multimodal logistics 9,850.80 8,297.20
Financial services 4,758.11 4,482.09
Leasing of commercial office space 1,375.74 1,298.31
Hospitality services 335.28 299.76
Investment and other corporate operations 410.30 397.15
Inter-segment revenue:
Coffee and related business 0.94 6.73
Integrated multimodal logistics 478.20 251.00
Financial services 1.44 -
Leasing of commercial office space 15.76 21.13
Hospitality services 19.33 16.86
Investment and other corporate operations - 0.12
Total segment revenue 35,519.04 30,942.72
Reconciling items:
- taxes and discounts on sales (3,806.95) (2,837.40)
- inter-segment revenue (515.67) (300.14)
Total revenue as per statement of profit and loss 31,196.42 27,805.18
(ii) Segment Results:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Coffee and related business 2,605.64 2,410.59
Integrated multimodal logistics 1,653.80 1,158.50
Financial services 556.17 750.91
Leasing of commercial office space 1,165.33 1,105.21
Hospitality services 49.12 45.79
Investment and other corporate operations 780.94 991.27
Total segment results 6,811.00 6,462.27
Reconciling items:
- depreciation (2,268.40) (2,516.99)
- finance cost (3,172.09) (3,594.89)
Profit before tax as per statement of profit and loss 1,370.51 350.39
Income tax expense (554.88) (446.39)
Profit after tax as per statement of profit and loss 815.63 (96.00)

210 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
52 SEGMENT INFORMATION (Contd.)
(iii) Geographical information
(a) Segment Revenue:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Revenue from external customers:
- India 27,980.10 25,022.04
- Europe 2,831.13 2,292.09
- Other foreign countries 385.19 491.05
Total segment revenue 31,196.42 27,805.18

(b) Segment non-current assets:

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
- India 51,589.68 45,851.86 42,335.25
- Europe 726.47 581.73 421.59
- Other foreign countries 220.29 158.50 106.11
Total 52,536.44 46,592.09 42,862.95
Reconciling items:
- deferred tax assets 635.73 501.34 520.18
- non-current financial assets 1,650.95 2,601.25 2,028.37
Total non-current assets 54,823.12 49,694.68 45,411.50

(iv) Revenue from major products and services

The Group's revenue from continuing operations from its major products or services are as follows:

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Sale of food, beverages and coffee beans 18,273.14 15,872.37
Income from integrated logistics services 9,850.80 8,297.20
Securities trading, brokerage and consultancy services 4,758.11 4,482.09
License fee and maintenance income from SEZ and IT parks 1,375.74 1,298.31
Income from software development and related services 410.30 397.15
Income from operations of resort 335.28 299.76

(v) Information about major customers

Revenue from top three customers of the Group's leasing of commercial office space segment is Rs.792 million (Previous
year: Rs.735 million) which is more than 10% of the segment's total revenue.
Revenue from top five customers of the Group's integrated multimodal logistics segment is Rs.5,911 million (Previous
year: Rs.4,530 million) which is more than 10% of the segment's total revenue.
The Group does not derive more than 10% of it's revenues in other segments from a single customer.

FINANCIAL SECTION | 211

Notes to the consolidated financial statements for the year ended 31 March 2017
53 CONSOLIDATED FINANCIAL INFORMATION
Additional information required to be disclosed pursuant to paragraph 2 of Division II of Schedule III to the Companies Act, 2013 -
'General instructions for the preparation of consolidated financial statements' as at and for the year ended 31 March 2017 is as follows:
(Rs. in million)
Name of the entity in the group Net Assets Share in profit or loss Share in other Share in total
comprehensive income comprehensive income
As % of Amount As % of Amount As % of Amount As % of Amount
consolidated consolidated consolidated consolidated
net assets profit/ (loss) other total
comprehensive comprehensive
income income
Parent company
Coffee Day Enterprises Limited 69.9% 19,905.80 -157.3% (1,283.26) 0.8% 0.39 -148.5% (1,282.87)
Indian subsidiaries
Coffee Day Global Limited* 1.7% 497.44 30.8% 251.58 8.1% 3.91 29.6% 255.49
Sical Logistics Limited* 8.5% 2,427.52 48.5% 395.44 0.0% - 45.8% 395.44
Way2Wealth Securities Private 3.1% 891.60 37.5% 305.61 317.2% 153.73 53.2% 459.34
Limited*
Tanglin Development Limited 7.6% 2,178.56 74.1% 603.99 0.2% 0.11 69.9% 604.10
Coffee Day Trading Limited -0.6% (172.61) -1.5% (12.29) 0.1% 0.05 -1.4% (12.24)
Magnasoft Consulting India Private 0.8% 223.60 11.0% 90.05 0.2% 0.09 10.4% 90.14
Limited*
Coffee Day Hotels And Resorts -1.8% (504.05) -11.7% (95.56) 0.0% - -11.1% (95.56)
Private Limited
Wilderness Resorts Private Limited -0.2% (65.44) -7.7% (62.65) 0.0% - -7.3% (62.65)
Karnataka Wildlife Resorts Private -0.8% (216.11) 3.7% 29.78 0.0% - 3.4% 29.78
Limited
Tanglin Retail Reality Developments -1.5% (438.35) -16.8% (136.81) 0.0% - -15.8% (136.81)
Private Limited
Girividyuth India Limited 0.0% 0.06 0.0% (0.05) 0.0% - 0.0% (0.05)
Associates (investment as per the
equity method)
Mindtree Limited* 12.6% 3,578.45 85.7% 698.96 -214.0% (103.69) 68.9% 595.26
Ittiam Systems Private Limited* 0.2% 53.35 -0.1% (0.91) -1.6% (0.76) -0.2% (1.66)
Global Edge Software Private 0.5% 134.03 4.0% 32.68 -11.1% (5.37) 3.2% 27.31
Limited*
Barefoot Resorts & Leisure India 0.0% (2.81) -0.1% (0.93) 0.0% - -0.1% (0.93)
Private Limited
Total 28,491.04 815.63 48.46 864.09
Attributable to: Owners of the group 78.2% 22,276.57 56.6% 461.95 63.3% 30.68 57.0% 492.63
Attributable to: Non-controlling 21.8% 6,214.47 43.4% 353.68 36.7% 17.78 43.0% 371.46
interests

# Further adjusted for inter company transactions and balances arising on account of acquisition.
* Balances extracted from consolidated financial statements of the entity and includes step down subsidiaries along with associates
and joint ventures accounted for using equity method at respective entity level.

212 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
54 INTEREST IN OTHER ENTITIES
(i) Subsidiaries:
(a) The consolidated financial statements of the Group includes subsidiaries listed in the table below:
Name of the entity Country of Principal activities Ownership interest Ownership interest held by
incorporation held by the group (%) non-controlling interest (%)
31 March 31 March 1 April 31 March 31 March 1 April
2017 2016 2015 2017 2016 2015
Coffee Day Global Limited India Integrated coffee business 86.63% 87.26% 90.53% 13.37% 12.74% 9.47%
Sical Logistics Limited India Integrated logistics 52.83% 52.83% 52.83% 47.17% 47.17% 47.17%
provider
Way2Wealth Securities India Financial intermediary 85.53% 85.53% 85.53% 14.47% 14.47% 14.47%
Private Limited services
Coffee Day Trading Limited India Investments in IT/ITeS 88.77% 88.77% 88.77% 11.23% 11.23% 11.23%
Magnasoft Consulting India Geospatial services 77.88% 77.88% 77.88% 22.12% 22.12% 22.12%
India Private Limited
Tanglin Development India Development of Tech 100.00% 100.00% 100.00% - - -
Limited Parks / SEZs
Tanglin Retail Reality India Property developers 100.00% 100.00% 100.00% - - -
Developments Private Limited
Girividyuth India Limited India Power generation 100.00% 100.00% 100.00% - - -
Coffee Day Hotels And India Operation of holiday 100.00% 100.00% 100.00% - - -
Resorts Private Limited resorts
Wilderness Resorts India Operation of holiday 100.00% 100.00% 100.00% - - -
Private Limited resorts
Karnataka Wildlife Resorts India Operation of holiday 100.00% 100.00% 100.00% - - -
Private Limited resorts

(b) Summarised financial information of the material subsidiaries that have non-controlling interest before inter company
eliminations:
(Rs. in million)
Summarised balance Coffee Day Global Limited Sical Logistics Limited Way2Wealth Securities Private Limited
sheet 31 March 31 March 1 April 31 March 31 March 1 April 31 March 31 March 1 April
2017 2016 2015 2017 2016 2015 2017 2016 2015
Current assets 5,937.58 7,356.00 4,456.36 5,587.40 4,030.40 3,179.10 3,839.90 2,532.90 2,070.50
Non-current assets 11,944.54 11,562.95 10,693.86 17,533.40 15,694.10 14,262.80 701.50 1,059.00 498.20
Current liabilities 3,422.59 4,347.63 4,283.64 7,478.80 5,267.00 4,674.90 2,102.50 1,654.70 1,179.80
Non-current liabilities 1,653.01 2,220.19 3,191.46 8,822.10 8,030.60 6,526.60 541.20 532.40 368.50
Accumulated balance 1,215.37 1,137.84 734.93 2,287.66 2,106.75 2,019.85 192.57 131.95 92.76
of NCI

(Rs. in million)
Summarised statement of Coffee Day Sical Way2Wealth
profit and loss Global Limited Logistics Limited Securities Private Limited
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
31 March 2017 31 March 2016 31 March 2017 31 March 2016 31 March 2017 31 March 2016
Revenue 15,354.66 13,699.72 9,219.50 7,774.30 4,554.60 4,336.20
Profit for the year 263.54 241.27 393.10 184.00 306.60 417.60
Other comprehensive income 13.59 5.18 - - 153.80 (33.20)
Total comprehensive income 277.13 246.45 393.10 184.00 460.40 384.40
Total comprehensive income 35.12 28.86 180.91 86.89 60.62 39.19
allocated to NCI
Dividend allocated to NCI - - - - - -

FINANCIAL SECTION | 213

Notes to the consolidated financial statements for the year ended 31 March 2017
54 INTEREST IN OTHER ENTITIES (Contd.)
(Rs. in million)
Summarised Cash Flows Coffee Day Sical Way2Wealth
Global Limited Logistics Limited Securities Private Limited
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
31 March 2017 31 March 2016 31 March 2017 31 March 2016 31 March 2017 31 March 2016
Cash flow from operating activities 1,783.81 2,026.26 548.50 754.90 455.40 253.80
Cash flow from investing activities (289.80) (3,560.55) (2,238.40) (1,876.40) 55.10 (314.80)
Cash flow from financing activities (2,000.50) 2,668.69 1,979.60 1,193.60 (34.90) 249.20
Net increase/ (decrease) in cash (506.49) 1,134.40 289.70 72.10 475.60 188.20
and cash equivalents
(ii) Associates and joint ventures
(a) The associates and joint ventures of the group as at 31 March 2017 which in the opinion of the directors, are material to the
Group are listed below:
(Rs. in million)
Name of the entity Principal activities Country of % of Relationship Accounting Quoted fair value
incorporation ownership method 31 March 31 March 1 April
interest 2017 2016 2015
Mindtree Limited IT consulting and India 16.70% Associate Equity 12,707.97 18,327.59 9,143.88
software development method

(Rs. in million)
Name of the entity Country of % of Relationship Accounting Carrying amount
incorporation ownership method 31 March 31 March 1 April
interest 2017 2016 2015
Other immaterial associates India - Associate Equity 527.68 495.71 475.54
method
Other immaterial joint ventures India - Joint ventures Equity 170.72 169.35 171.00
method

(b) Summarised financial information about the joint venture or associate:

(Rs. in million)
Summarised balance sheet Mindtree Limited
As at As at As at
31 March 2017 31 March 2016 1 April 2015
Current assets
- Cash and cash equivalents 2,508.00 2,332.00 3,763.00
- Other current assets 18,102.00 15,942.00 14,935.00
Total 20,610.00 18,274.00 18,698.00
Non-current assets 13,296.00 14,495.00 7,996.00
Current liabilities
- Financial liabilities (excluding trade payables) 3,616.00 3,169.00 2,011.00
- Trade payables 1,651.00 1,890.00 1,418.00
- Provisions 1,105.00 1,289.00 797.00
- Other current liabilities 1,449.00 1,396.00 825.00
Total 7,821.00 7,744.00 5,051.00
Non-current liabilities
- Financial liabilities (excluding trade payables) 243.00 785.00 250.00
- Other non-current liabilities 71.00 91.00 128.00
Total 314.00 876.00 378.00
Net assets 25,771.00 24,149.00 21,265.00

214 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
54 INTEREST IN OTHER ENTITIES (Contd.)
Reconciliation to carrying amount:
(Rs. in million)
Summarised balance sheet Mindtree Limited
As at As at
31 March 2017 31 March 2016
Opening net assets 24,149.00 21,265.00
Profit for the year 4,186.00 5,525.00
Other comprehensive income (621.00) (242.00)
Dividend paid (2,005.00) (2,489.00)
Changes in other equity 62.00 90.00
Closing net assets 25,771.00 24,149.00
Group's share in % 16.70% 16.72%
Group's share in Rs. 4,303.76 4,037.71
Goodwill 1,346.59 1,297.93
Carrying amount 5,650.35 5,335.64

(Rs. in million)
Summarised statement of profit and loss Mindtree Limited
As at As at
31 March 2017 31 March 2016
Revenue 52,364.00 46,730.00
Depreciation and amortization 1,858.00 1,658.00
Finance costs 191.00 160.00
Tax expense 1,363.00 1,706.00
Profit/ (loss) for the year 4,186.00 5,525.00
Other comprehensive income (621.00) (242.00)
Total comprehensive income 3,565.00 5,283.00

(c) Individually immaterial joint venture and associates

The Group also has interests in a number of immaterial joint venture and associates that are accounted for using the equity
method.
(Rs. in million)
Particulars Associates Joint Venture
31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015
Carrying amount of interests in all 527.68 495.71 475.54 170.72 169.35 171.00
individually immaterial associates/
joint ventures
Aggregate amount of Group's
share of:
- profit or loss from 30.85 19.11 - 6.26 (3.61) -
continuing operations.
- post-tax profit or loss from - - - - - -
discontinued operations.
- other comprehensive (6.13) 1.06 - - - -
income
Total comprehensive income 24.72 20.17 - 6.26 (3.61) -

FINANCIAL SECTION | 215

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT
A. Accounting classification and fair value
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the
fair value hierarchy.
As at 31 March 2017 (Rs. in million)
Particulars Carrying value Fair Value
FVTPL FVOCI Amortised Total Level 1 Level 2 Level 3 Total
cost
Financial assets:
- Non-current investments 1.30 273.57 - 274.87 271.93 - 2.94 274.87
- Non-current loans
Security deposits - - 1,058.97 1,058.97 - - - -
Others - - 45.09 45.09 - - - -
- Other non-current financial assets - - 272.02 272.02 - - - -
- Current investments 17.74 - - 17.74 17.74 - - 17.74
- Trade receivables - - 4,089.03 4,089.03 - - - -
- Cash and cash equivalents - - 12,686.95 12,686.95 - - - -
- Bank balances other than cash and - - 1,806.86 1,806.86 - - - -
cash equivalents
- Current loans
Security deposits - - 1,114.12 1,114.12 - - - -
Others - - 420.19 420.19 - - - -
- Other current financial assets
Interest rate swaps - 6.55 - 6.55 - 6.55 - 6.55
Others - - 1,242.99 1,242.99 - - - -
Total 19.04 280.12 22,736.22 23,035.38 289.67 6.55 2.94 299.16
Financial liabilities:
- Non-current borrowings
(including current maturities)
Fixed rate instruments - - 18,103.09 18,103.09 - 19,360.69 - 19,360.69
Variable rate instruments - - 20,972.03 20,972.03 - - - -
- Other non-current financial
liabilities
Derivative liability 15.00 - - 15.00 - 15.00 - 15.00
Others - - 1,194.07 1,194.07 - - - -
- Current borrowings
Fixed rate instruments - - 2,331.26 2,331.26 - - - -
Variable rate instruments - - 3,085.48 3,085.48 - - - -
- Trade payables - - 1,011.68 1,011.68 - - - -
- Other current financial liabilities - - 3,604.51 3,604.51 - - - -
(excluding current maturities)
Total 15.00 - 50,302.12 50,317.12 - 19,375.69 - 19,375.69

216 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
As at 31 March 2016 (Rs. in million)
Particulars Carrying value Fair Value
FVTPL FVOCI Amortised Total Level 1 Level 2 Level 3 Total
cost
Financial assets:
- Non-current investments 0.80 136.25 1.05 138.10 135.17 - 2.93 138.10

- Non-current loans
Security deposits - - 971.73 971.73 - - - -
Others - - 4.00 4.00 - - - -
- Other non-current financial - - 1,420.12 1,420.12 - - - -
assets
- Current investments 126.08 - - 126.08 126.08 - - 126.08
- Trade receivables - - 3,126.38 3,126.38 - - - -
- Cash and cash equivalents - - 9,791.69 9,791.69 - - - -
- Bank balances other than - - 2,003.81 2,003.81 - - - -
cash and cash equivalents
- Current loans
Security deposits - - 935.98 935.98 - - - -
Others - - 428.89 428.89 - - - -

- Other current financial assets - - 978.80 978.80 - - - -

Total 126.88 136.25 19,662.45 19,925.58 261.25 - 2.93 264.18
Financial liabilities:
- Non-current borrowings
(including current maturities)
Fixed rate instruments - - 12,113.29 12,113.29 - 12,322.71 - 12,322.71
Variable rate instruments - - 19,542.06 19,542.06 - - - -

- Other non-current financial

liabilities
Derivative liability 58.10 - - 58.10 - 58.10 - 58.10
Others - - 1,239.78 1,239.78 - - - -
- Current borrowings
Fixed rate instruments - - 2,865.69 2,865.69 - - - -
Variable rate instruments - - 2,357.18 2,357.18 - - - -
- Trade payables - - 991.65 991.65 - - - -
- Other current financial - - 2,695.99 2,695.99 - - - -
liabilities (excluding current
maturities)
Total 58.10 - 41,805.64 41,863.74 - 12,380.81 - 12,380.81

FINANCIAL SECTION | 217

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)

As at 1 April 2015 (Rs. in million)

Particulars Carrying value Fair Value
FVTPL FVOCI Amortised Total Level 1 Level 2 Level 3 Total
cost
Financial assets:
- Non-current investments 0.51 167.15 1.05 168.71 164.63 - 4.09 168.72
- Non-current loans
Security deposits - - 859.19 859.19 - - - -
Others - - 3.37 3.37 - - - -
- Other non-current financial assets - - 978.10 978.10 - - - -
- Current investments 5.15 - - 5.15 5.15 - - 5.15
- Trade receivables - - 2,739.64 2,739.64 - - - -
- Cash and cash equivalents - - 6,191.10 6,191.10 - - - -
- Bank balances other than cash - - 949.36 949.36 - - - -
and cash equivalents
- Current loans
Security deposits - - 356.96 356.96 - - - -
Others - - 389.89 389.89 - - - -
- Other current financial assets - - 809.69 809.69 - - - -
Total 5.66 167.15 13,278.35 13,451.16 169.78 - 4.09 173.87
Financial liabilities:
- Non-current borrowings
(including current maturities)
Fixed rate instruments - - 13,555.32 13,555.32 - 13,715.77 - 13,715.77
Variable rate instruments - - 22,192.08 22,192.08 - - - -
Convertible instruments - - 5,828.35 5,828.35 - - - -
- Other non-current financial
liabilities
Derivative liability 27.40 - - 27.40 - 27.40 - 27.40
Others - - 1,190.98 1,190.98 - - - -
- Current borrowings - - - - - - -
Fixed rate instruments - - 2,061.99 2,061.99 - - - -
Variable rate instruments - - 2,554.19 2,554.19 - - - -
- Trade payables - - 1,234.22 1,234.22 - - - -
- Other current financial liabilities - - 2,615.89 2,615.89 - - - -
(excluding current maturities)
Total 27.40 - 51,233.02 51,260.42 - 13,743.17 - 13,743.17

The Group has not disclosed the fair values for financial instruments such as other non current financial assets, trade receivables,
cash and cash equivalents, bank balances other than cash and cash equivalents, other current financial assets, loans, non current
borrowings with fluctuating interest rate, current borrowings, other non current financial liabilities, trade payables and other current
financial liabilities because their carrying amounts are a reasonable approximation of fair value.
B. Measurement of fair values
The section explains the judgement and estimates made in determining the fair values of the financial instruments that are:
a) recognised and measured at fair value
b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial
instruments into the three levels prescribed under the accounting standard. An explanation of each level is mentioned below:

218 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments,
traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded
in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing
net asset value.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as
possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Valuation technique and significant unobservable inputs
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale. The following table shows the valuation
techniques used in measuring Level 2 and Level 3 fair values for financial instruments measured at fair value in the balance sheet,
as well as the significant unobservable inputs used. Related valuation processes are described in Note 2(F).
(Rs. in million)
Financial Type Valuation Significant Inter relationship
instruments technique unobservable between significant
measurement inputs unobservable inputs and
fair value measurement
Fair value Investments Quoted market prices of the respective Not applicable Not applicable
investments.
Fair value Derivative The fair value is calculated as the present value Not applicable Not applicable
liability - of the estimated future cash flows. Estimates
Interest rate of future floating-rate cash flows are based
swaps on quoted swap rates, futures prices and
interbank borrowing rates. Estimated cash
flows are discounted using a yield curve
constructed from similar sources and which
reflects the relevant benchmark interbank rate
used by market participants for this purpose
when pricing interest rate swaps. The fair value
estimate is subject to a credit risk adjustment
that reflects the credit risk of the entity and
of the counterparty; this is calculated based
on credit spreads derived from current credit
default swap or bond prices.
Amortised cost Borrowings Discounted cash flows: The valuation model Not applicable Not applicable
considers the present value of expected
receipt/payment discounted using risk-
adjusted / appropriate discounting rates.
Fair value Equity shares Estimated enterprise value per share of the Not applicable Not applicable
investee company.
C. Financial risk management
The Group's has exposure to the following risks arising from financial instruments:
- credit risk (refer note ii below)
- liquidity risk (refer note iii below)
- market risk (refer note iv below)
(i) Risk management framework
The Group’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities.

FINANCIAL SECTION | 219

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
C. Financial risk management (continued)
The Group’s Audit Committee oversees how management monitors compliance with the Group’s risk management policies
and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The
Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of
risk management controls and procedures, the results of which are reported to the Audit Committee.
(ii) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial
instruments.
The carrying amount of financial assets represents the maximum credit exposure.
Trade and other receivables:
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management
also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the
industry and country in which customers operate.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each client. However, management
also considers the factors that may influence the credit risk of its customer base, including the default risk associated with
the industry. In respect of trade and client receivables each company in the group uses a provision matrix to compute the
expected credit loss allowance. The provision matrix takes into account available external and internal credit risk factors such
as credit default and the group's historical experience from customers.
Expected credit loss (ECL) assessment for customers as at 31 March 2017, 31 March 2016 and 1 April 2015:
The Group allocates each exposure to a credit risk is grade based on a variety of data that is determined to be predictive of the
risk loss (including but not limited to past payment history, cash flow projections and available press information about the
customers) and applying experienced credit judgement.
The following table provides information about the exposure to credit risk and the expected credit loss for trade receivables:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016 As at1 April 2015
Carrying Provision Carrying Provision Carrying Provision
amount amount amount amount amount amount
Up to 180 days 1,528.42 - 1,242.25 - 1,204.17 -
180 days - 1 year 2,416.71 40.09 1,787.81 20.00 1,447.46 -
1 - 2 years 462.49 278.50 410.17 293.85 335.81 247.80
More than 2 years 75.82 75.82 82.25 82.25 69.46 69.46
4,483.44 394.41 3,522.48 396.10 3,056.90 317.26
The gross carrying amount of trade receivables is Rs.4,443.44 million as at 31 March 2017 (31 March 2016: Rs.3,522.48 million; 1
April 2015: Rs.3,056.90 million).
Loans and other financial asset:
Expected credit loss for loans and other financialasset is as follows:
Particulars Period Asset group Estimated Expected Expected Carrying
ended gross probability credit amount,
carrying of default losses net of
amount at impairment
default provision
Loss allowance measured Financial assets for which 31-Mar-17 Security 2,173.09 0.0% - 2,173.09
at 12 month expected credit risk has not increased deposits
credit loss significantly since initial Other financial 1,521.56 4.1% 62.63 1,458.93
recognition asset
Loan 465.28 0.0% - 465.28
Loss allowance measured Financial assets for which 31-Mar-16 Security 1,907.71 0.0% - 1,907.71
at 12 month expected credit risk has not increased deposits
credit loss significantly since initial Other financial 2,398.92 2.6% 63.23 2,335.69
recognition asset
Loan 432.89 0.0% - 432.89

220 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)

Particulars Period Asset group Estimated Expected Expected Carrying

ended gross probability credit amount,
carrying of default losses net of
amount at impairment
default provision
Loss allowance measured Financial assets for which 1-Apr-15 Security 1,216.15 0.0% - 1,216.15
at 12 month expected credit risk has not increased deposits
credit loss significantly since initial Other financial 1,787.79 3.7% 65.91 1,721.88
recognition asset
Loan 393.26 0.0% - 393.26

Cash and cash equivalents (including bank balances, fixed deposits and margin money with banks):
Credit risk on cash and cash equivalent is limited as the Group generally transacts with banks and financial institutions with
high credit ratings assigned by international and domestic credit rating agencies.
Reconciliation of loss allowance:
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Loss allowance in the beginning of the year 459.33 383.17
Excess provision written back (49.47) (11.20)
Provision for doubtful debts 40.33 87.54
Exchange differences on translation of foreign operations 6.85 (0.18)
Loss allowance at the end of the year 457.04 459.33
(iii) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as
far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Management monitors rolling forecasts of the Group’s liquidity position and cash and cash equivalents on the basis of expected
cash flows. This is generally carried out by the Management of the Group in accordance with practice and limits set by the
Group. In addition, the Group’s liquidity management policy involves projecting cash flows and considering the level of liquid
assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements
and maintaining debt financing plans.
Exposure to liquidity risk
The table below provides details regarding the undiscounted contractual maturities of significant financial liabilities. The
amounts are gross and undiscounted contractual cash flow.
(Rs. in million)
As at 31 March 2017 Carrying Total Less than 1–2 years 3–5 years More than
amount 1 year 5 years
Non-derivative financial liabilities
- Non-current borrowings (including current 39,075.12 47,081.62 13,770.57 16,823.82 15,239.83 1,247.40
maturities)
- Current borrowings 5,416.74 5,416.74 5,416.74 - - -
- Trade payables 1,011.68 1,011.68 1,011.68 - - -
- Other financial liabilities (current and non- 4,798.58 4,798.58 3,604.51 1,194.07 - -
current excluding current maturities)
50,302.12 58,308.62 23,803.50 18,017.89 15,239.83 1,247.40

FINANCIAL SECTION | 221

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
(Rs. in million)
As at 31 March 2016 Carrying Total Less than 1–2 years 3–5 years More than
amount 1 year 5 years
Non-derivative financial liabilities
- Non-current borrowings (including current 31,655.35 41,282.65 9,931.10 12,121.63 16,498.15 2,731.77
maturities)
- Current borrowings 5,222.87 5,222.87 5,222.87 - - -
- Trade payables 991.65 991.65 991.65 - - -
- Other financial liabilities (current and non- 3,935.77 3,935.77 2,695.99 1,239.78 - -
current excluding current maturities)
41,805.64 51,432.94 18,841.61 13,361.41 16,498.15 2,731.77

(Rs. in million)
As at 1 April 2015 Carrying Total Less than 1–2 years 3–5 years More than
amount 1 year 5 years
Non-derivative financial liabilities
- Non-current borrowings (including current 41,575.75 43,821.46 11,543.89 14,984.72 12,861.20 4,431.65
maturities)
- Current borrowings 4,616.18 4,616.18 4,616.18 - - -
- Trade payables 1,234.22 1,234.22 1,234.22 - - -
- Other financial liabilities (current and non- 3,806.87 3,806.87 2,615.89 1,190.98 - -
current excluding current maturities)
51,233.02 53,478.73 20,010.18 16,175.70 12,861.20 4,431.65
The outflows disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial
liabilities held for risk management purposes and which are not usually closed out before contractual maturity.
(iv) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimising the return.
The Group uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the risk
management committee. Generally, the Group seeks to apply hedge accounting to manage volatility in profit or loss.
Currency risk
The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases
and borrowings are denominated and the respective functional currencies of Group. The functional currencies of the Group is
primarily Rs.. The currencies in which these transactions are primarily denominated are Euro and US dollars, etc.
Exposure to currency risk
The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the Group is as
follows:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Foreign Currency Amount
Financial assets
Trade receivables
AED - 0.01 -
AUD 0.18 0.14 0.04
BRL 0.08 0.12 0.20
CAD 0.17 0.10 0.09
EURO 0.56 0.40 0.27
GBP 0.31 0.14 0.09
SGD 0.03 0.03 0.06
USD 9.47 8.50 11.64

222 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
Exposure to currency risk (Contd.)
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Foreign Currency Amount
Advances recoverable in cash or in kind
USD 0.50 1.05 1.28
GBP 0.05 0.05 0.05
Financial liabilities
Bank Loan
USD (131.15) (144.61) (136.44)
EURO (2.02) - -
Net statement of financial position exposure (121.82) (134.07) (122.72)
Less: Forward exchange contracts (USD) 2.94 8.82 14.71
Net exposure (118.88) (125.25) (108.01)

The following significant exchange rates have been applied:

(Rs. in million)
Year-end spot rate
Rs. As at As at
31 March 2017 31 March 2016
AED 17.62 18.00
AUD 49.61 50.62
BRL 20.70 18.20
CAD 48.58 50.77
EURO 69.51 74.82
GBP 80.63 95.19
SGD 46.39 48.89
USD 64.74 66.14

Sensitivity analysis
A reasonably possible strengthening (weakening) of foreign currencies at 31 March would have affected the measurement of
financial instruments denominated in a foreign currency by the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
(Rs. in million)
Particulars Percentage Profit or loss Equity, net of tax
movement Strengthening Weakening Strengthening Weakening
31 March 2017
AED 2% - - - -
AUD 2% 0.18 (0.18) - -
BRL 14% 0.23 (0.23) - -
CAD 4% 0.33 (0.33) - -
SGD 7% (7.10) 7.10 - -
USD 15% 4.35 (4.35) - -
ZAR 5% 0.07 (0.07) - -
NZD 2% (156.90) 156.90 (160.71) 160.71
31 March 2016
AED 3% 0.01 (0.01) - -
AUD 5% 0.35 (0.35) - -
BRL 5% 0.11 (0.11) - -
CAD 3% 0.15 (0.15) - -
CHF 7% - - - -
EURO 10% 2.99 (2.99) - -
GBP 3% 0.54 (0.54) - -
SGD 7% 0.10 (0.10) - -
USD 6% (535.97) 535.97 (570.97) 570.97

FINANCIAL SECTION | 223

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
Commodity price risk
The Group purchases coffee on an ongoing basis for its operations. The increased volatility in coffee price has led to the
decision to enter into commodity forward contracts. Its operating activities require the ongoing purchase and sale of coffee
and therefore require a continuous supply of coffee. The Group’s Board of Directors have developed and enacted a risk
management strategy regarding commodity price risk and its mitigation. Based on a 12-month forecast of the required coffee
supply, the Group hedges the purchase price using forward commodity purchase contracts.
Exposure to commodity risk
The exposure of the Group due to commodity price changes at the end of the reporting period are as follows :
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Financial asset 22.22 37.61 -
Net exposure 22.22 37.61 -

Sensitivity analysis
A reasonably possible strengthening (weakening) of the coffee prices as at 31 March would have affected the measurement of
financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below.
This analysis assumes that all other variables remain constant and ignores any impact of forecast sales and purchases.
(Rs. in million)
Commodity price sensitivity Profit or loss Equity, net of tax
Strengthening Weakening Strengthening Weakening
31 March 2017
Coffee (11% movement) (1.47) 1.47 (1.47) 1.47
31 March 2016
Coffee (6% movement) (2.21) 2.21 (2.21) 2.21
Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow
interest rate risk. The Group has entered into interest rate swap to hedge the interest rate risk.
Exposure to interest rate risk
The exposure of the Group's borrowing to interest rate changes at the end of the reporting period are as follows:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Fixed rate instruments:
Financial assets 8,049.85 9,058.30 6,771.53
Financial borrowings (20,434.35) (14,978.98) (15,617.31)
Effect of interest rate swaps 1,808.94 (1,017.25) (1,798.41)
Fixed rate instruments exposed to interest rate risks (10,575.56) (6,937.93) (10,644.19)
Variable rate instruments:
Financial borrowings (24,057.51) (21,899.24) (24,746.27)
Effect of interest rate swaps (1,808.94) 1,017.25 1,798.41
Variable rate instruments exposed to interest rate risks (25,866.45) (20,881.99) (22,947.86)

Sensitivity analysis
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed‑rate financial assets or financial liabilities at fair value through profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 1% in interest rates at the reporting date would have increased (decreased) equity and profit
and loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange
rates, remain constant.

224 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
(Rs. in million)
Particulars Profit or Loss
1% increase 1% decrease
31 March 2017
Variable rate instruments (258.66) 258.66
31 March 2016
Variable rate instruments (208.82) 208.82

Equity Price risk

The Group’s exposure to equity securities price risk arises from investments held by the Group and classified in the balance
sheet either as fair value through OCI or at fair value through profit or loss.
The majority of the Company’s equity investments are publicly traded.
Exposure to equity price risk
The exposure of the Group's equity to price changes at the end of the reporting period are as follows :
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Quoted investments:
Fair value through profit and loss 19.04 126.88 5.66
Fair value through other comprehensive income 270.63 133.32 163.07
Measured at amortised cost - 1.05 1.05

Sensitivity analysis
The table below summarises the impact of increase/decrease of the market price of the listed instruments on the Company’s
equity and profit for the period. The analysis is based on the assumption that the market price had increased by 2% or
decreasedby 2%.
(Rs. in million)
Particulars Impact on profit or loss Impact on equity
31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015
Market price increases by 2% 0.38 2.56 0.13 5.41 2.67 3.26
Market price decreases by 2% (0.38) (2.56) (0.13) (5.41) (2.67) (3.26)
Hedge accounting
The Group holds the following instruments to hedge exposures to changes in interest rates:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016 As at1 April 2015
Maturity in Maturity in Maturity in Maturity in Maturity in Maturity in
less than 1 more than 1 less than 1 more than 1 less than 1 more than 1
year year year year year year
Interest rate risk
Interest rate swaps:
Net exposure 191.06 - 586.60 430.65 - 1,798.43
Average fixed interest rate (LIBOR) 0.02 - 0.02 0.02 - 0.02

The amounts relating to items designated as hedging instruments and hedge ineffectiveness are as follows:
As at 31 March 2017: (Rs. in million)
Type of hedge Nominal Carrying Line item in Changes in Change in the Hedge Amount Line item in
and risks value amount of the statement the value of value of hedged ineffectiveness reclassified profit or loss
hedging of financial the hedging item used as recognised in from equity affected by the
instrument position where instrument the basis for profit or loss head ‘effective reclassification
the hedging recognised recognising portion of cash
instrument is in OCI hedge flow hedges’ to
Asset included effectiveness profit or loss
Interest rate risk
- Interest rate swap 191.06 6.55 Other financial 7.31 (7.31) Nil Nil Nil
assets

FINANCIAL SECTION | 225

Notes to the consolidated financial statements for the year ended 31 March 2017
55 FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT (Contd.)
As at 31 March 2016: (Rs. in million)
Type of hedge Nominal Carrying Line item in Changes in Change in the Hedge Amount Line item in
and risks value amount of the statement the value of value of hedged ineffectiveness reclassified profit or loss
hedging of financial the hedging item used as recognised in from equity affected by the
instrument position where instrument the basis for profit or loss head ‘effective reclassification
the hedging recognised recognising portion of cash
instrument is in OCI hedge flow hedges’ to
Asset included effectiveness profit or loss
Cash flow hedge:
- Interest rate swap 1,017.25 - Other financial 15.27 (15.27) Nil Nil Nil
liabilities

As at 1 April 2015: (Rs. in million)

Type of hedge and risks Nominal value Carrying amount of Line item in the statement of
hedging instrument financial position where the
hedging instrument is included
Liability
Cash flow hedge:
- Interest rate swap 1,798.41 23.00 Other financial liabilities

The following table provides a reconciliation by risk category of components of equity and analysis of OCI items, net of tax,
resulting from cash flow hedge accounting:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016
Equity head ‘Effective Equity head ‘Effective
portion of cash flow hedges’ portion of cash flow hedges’
Opening balance for the period (11.38) (19.61)
Cash flow hedges : Interest rate risk
Changes in fair value 7.31 15.27
Tax on movements in relevant items of OCI during the year (2.53) (5.29)
Non-controlling interest (0.65) (1.75)
Closing balance for the period (7.25) (11.38)

56 CAPITAL MANAGEMENT
For the purpose of the Group’s capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise
the shareholder value.
The Group's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. Management monitors the return on capital, as well as the level of dividends to equity
shareholders. The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher
levels of borrowing and the advantages and security afforded by a sound capital position.
The Group monitors capital using a ratio of 'adjusted net debt' to 'equity'. For this purpose, adjusted net debt is defined as total
interest-bearing loans and borrowings less cash and cash equivalents including deposits. Equity comprises all components of
equity including non-controlling interest. The Company's adjusted net debt to equity ratio at 31 March 2017 was as follows.
(Rs. in million)
Particulars As at 31 March As at 31 March Share in
2017 2016 profit or loss
Total borrowings 44,491.86 36,878.22 46,191.93
Less: cash and cash equivalents 14,765.83 13,215.62 8,118.56
Adjusted net debt 29,726.03 23,662.60 38,073.37
Equity 28,491.04 27,405.74 7,759.36
Adjusted net debt to equity ratio 1.04 0.86 4.91

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in
meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in
the financial covenants of any interest-bearing loans and borrowing in the current period.

226 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
57 FIRST TIME ADOPTION OF IND AS
As stated in Note 2A, these are the Group’s first consolidated financial statements prepared in accordance with Ind AS. For the year
ended 31 March 2016, the Group had prepared its consolidated financial statements in accordance with Companies (Accounting
Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).
The accounting policies set out in Note 3 have been applied in preparing these consolidated financial statements for the year
ended 31 March 2017 including the comparative information for the year ended 31 March 2016 and the opening consolidated Ind
AS balance sheet on the date of transition i.e. 1 April 2015.
In preparing its consolidated Ind AS balance sheet as at 1 April 2015 and in presenting the comparative information for the year
ended 31 March 2016, the Group has adjusted amounts reported previously in consolidated financial statements prepared in
accordance with previous GAAP. This note explains the principal adjustments made by the Group in restating its consolidated
financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected
the Group’s financial position, financial performance and cash flows.
Optional exemptions availed and mandatory exceptions
In preparing these consolidated financial statements, the Group has applied the below mentioned optional exemptions and
mandatory exceptions.
A. Optional exemptions availed:
(i) Property plant and equipment and intangible assets
As per Ind AS 101 an entity may elect to:
(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as
its deemed cost at that date; or
(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as
deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly
comparable to:
− fair value;
− or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price
index.
The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind
AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation
(including the existence of an active market); or
(iii) use carrying values of property, plant and equipment and intangible assets as on the date of transition to Ind AS
(which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning
liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.
As permitted by Ind AS 101, the Group has elected to measure certain items of property, plant and equipment at fair value
at the date of transition to Ind AS and rest of the items of property, plant and equipment are measured in accordance with
the requirements of Ind AS 16 and Ind AS 38.
(ii) Share-based payments
A first-time adopter is encouraged, but not required, to apply Ind AS 102, Share-based Payment to equity instruments
that were granted on or before the date of transition to Ind AS and have vested before that date. However, if a first-time
adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair
value of those equity instruments determined at the measurement date as defined in Ind AS 102. For all grants of equity
instruments that are still outstanding at the date of transition to Ind AS, and to which Ind AS 102 has not been applied, a
first-time adopter must disclose information that enables users of the financial statements to understand the nature and
extent of share-based payment arrangements that existed (paragraphs 44 and 45 of Ind AS 102).
For share-based payment transactions that give rise to liabilities, a first-time adopter is encouraged, but not required, to
apply Ind AS 102 if transactions were settled before the date of transition to Ind AS.
Accordingly, the Group has elected the optional exemption given and not accounted for share options vested before 1
April 2015 as per Ind AS 102.
(iii) Determining whether an arrangement contains a lease
Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind
AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts
and circumstances existing at the date of transition (rather than at the inception of the arrangement).

FINANCIAL SECTION | 227

Notes to the consolidated financial statements for the year ended 31 March 2017
57 FIRST TIME ADOPTION OF IND AS (Contd.)
The Group has elected to avail of the above exemption.
(iv) Investments in and joint ventures
Ind AS 101 provides an exemption to the first-time adopter to measures an investment in subsidiaries, associates and joint
ventures at:
a) cost determined in accordance with Ind AS 27; or
b) deemed cost, which shall be its:
i) fair value at the entity’s date of transition to Ind ASs in its separate financial statements; or
ii) previous GAAP carrying amount at that date.
The Group has chosen to value its investment in joint ventures at the cost determined in accordance with Ind AS 27.
(v) Long term foreign currency monetary items
Ind AS 101 provides an option to continue the policy of recognising the exchange differences on long term foreign
currency monetary items for those long term foreign currency monetary items which were recognised in the financial
statements before the beginning of first Ind AS reporting period i.e. 1 April 2016 which the Group has chosen to avail.
(vi) Business combination:
As per Ind AS 101, at the date of transition, an entity may elect not to restate business combinations that occurred before
the date of transition. If the entity restates any business combinations that occurred before the date of transition, then it
restates all later business combinations, and also applies Ind AS 110, Consolidated Financial Statements, from that same
date.
The Group has opted not to restate business combinations prior to the date of transition i.e. 1 April 2015. Since all business
combinations were prior to 1 April 2015, we have not restated goodwill, as per Ind AS 103. Hence, the goodwill represents
the amount recognised under the previous GAAP subject to specific adjustments as prescribed under Ind AS 101.
(vii) Foreign currency translation reserve
As per Ind AS 101, an entity may either continue to carry forward the foreign currency translation reserve or deem that the
cumulative translation differences for all foreign operations to be zero as at the date of transition by transferring any such
cumulative differences to retained earnings.
The Group has elected to continue the balance of foreign currency translation reserve as per previous GAAP.
B. Mandatory exemptions:
Ind AS 101 also allows first-time adopters certain mandatory exceptions to be applied for retrospective application of certain
requirements under Ind AS for transition from the previous GAAP (IGAAP):
(i) Hedge accounting
The Group uses derivative financial instruments, such as interest rate swaps contract, to hedge its interest rate risks. Under
Indian GAAP, there is no mandatory standard that deals comprehensively with hedge accounting, which has resulted in
the adoption of varying practices. The Group has designated various economic hedges and applied economic hedge
accounting principles to avoid profit or loss mismatch. All the hedges designated under Indian GAAP are of types which
qualify for hedge accounting in accordance with Ind AS 109 also. Moreover, the Group, before the date of transition to
Ind AS, has designated transactions as hedge and also meets all the conditions for hedge accounting in Ind AS 109.
Consequently, the Group continues to apply hedge accounting after the date of transition to Ind AS.
(ii) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing
as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost
based on facts and circumstances existing at the date of transition if retrospective application is impracticable.
Accordingly, the Group has determined the classification of financial assets based on facts and circumstances that exist
on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively
except where the same is impracticable.
(iii) Estimates
As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the
comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent
with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that
those estimates were in error.

228 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
57 FIRST TIME ADOPTION OF IND AS (Contd.)
However, the estimates should be adjusted to reflect any differences in accounting policies. As per Ind AS 101, where
application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those
estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS Balance
sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).
The Group’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation
of the financial statements that were not required under the previous GAAP are listed below:
- Fair valuation of financial instruments carried at FVTPL and/ or FVOCI.
- Impairment of financial assets based on the expected credit loss model.
- Determination of the discounted value for financial instruments carried at amortised cost.
(iv) De-recognition of financial assets and liabilities
As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively
for transactions occurring on or after the date of transition to Ind AS.
However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information
needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was
obtained at the time of initially accounting for those transactions.
The Group has elected to apply the derecognition principles of Ind AS 109 prospectively as reliable information is not
available at the time of initially accounting for these transactions.
C. Explanation of transition to Ind AS
(i) Reconciliation of equity:
(Rs. in million)
Particulars Notes to As at As at
first-time 31 March 2016 1 April 2015
adoption
Equity under previous GAAP attributable to:
- Coffee Day Enterprises Limited 21,507.73 5,475.22
- Non-controlling interests 5,547.56 5,101.75
Equity under previous GAAP 27,055.29 10,576.97
Adjustments:
Leases 1 310.16 244.08
Borrowings at amortized cost 2 (38.32) (161.02)
Deemed cost model 3 656.25 372.95
Business combinations 4 (278.01) (122.02)
Expected credit loss model 5 (540.09) (475.08)
Share based payments 6 4.27 -
Fair valuation of financial assets and liabilities 7 18.60 25.70
Classification of financial liabilities 8 - (3,123.79)
Interest rate swaps 9 (4.30) 30.58
Equity method of accounting 10 10.25 (17.38)
Initial direct costs of leases 11 24.44 12.62
Tax impact 12 78.24 200.02
Adjustments in share of profits from associates on account of restatement of 108.96 195.73
balances due to transition to Ind AS.
Equity as per Ind AS 27,405.74 7,759.36
Attributable to:
- Coffee Day Enterprises Limited 21,656.36 2,708.56
- Non-controlling interests 5,749.38 5,050.80

FINANCIAL SECTION | 229

Notes to the consolidated financial statements for the year ended 31 March 2017
57 FIRST TIME ADOPTION OF IND AS (Contd.)
(ii) Reconciliation of total comprehensive income:
(Rs. in million)
Particulars Notes to first-time As at
adoption 31 March 2016
Profit / (loss) as per previous GAAP attributable to:
- Coffee Day Enterprises Limited (75.29)
- Non-controlling interests 258.34
Profit / (loss) as per previous GAAP 183.05
Adjustments:
Leases 1 61.45
Borrowings at amortized cost 2 (425.51)
Deemed cost model 3 293.77
Expected credit loss model 5 (66.86)
Share based payments 6 (12.93)
Fair valuation of financial assets and liabilities 7 (5.50)
Interest rate swaps 9 (0.13)
Equity method of accounting 10 26.54
Initial direct costs of leases 11 11.82
Tax impact 12 (119.11)
Defined benefit plans 13 4.43
Adjustments in share of profits from associates on account of restatement of (47.02)
balances due to transition to Ind AS.
Profit/(loss) for the year as per Ind AS (96.00)
Other comprehensive income (OCI) 14 (66.13)
Total comprehensive income for the period (162.13)

(iii) Adjustments to the statement of cash flows:

(Rs. in million)
Particulars For the year ended 31 March 2016
Previous GAAP* Adjustment Ind AS
Net cash flow from operating activities 3,507.46 (322.78) 3,184.68
Net cash flow from investing activities (4,544.17) (1,490.25) (6,034.42)
Net cash flow from financing activities 6,229.08 482.95 6,712.03
Net increase/ (decrease) in cash and cash equivalents 5,192.37 (1,330.08) 3,862.29
Cash and cash equivalents as at 1 April 2015 4,630.29 1,004.24 5,634.53
Cash and cash equivalents as at 31 March 2016 9,822.66 (325.84) 9,496.82
* The previous GAAP figures have been reclassified to conform with Ind AS
D. Notes to first time adoption
1 Leases
Under Previous GAAP, lease payments are required to be recognised on a straight-line basis over the term of the lease.
Under Ind AS, lease payments which are structured to increase in line with expected general inflation to compensate for
the lessor’s expected inflationary cost increases, are required to be recognised as an expense in line with its contractual
term. Accordingly, the provision for scheduled increases on operating lease recognised under Previous GAAP has been
written back under Ind AS.
2 Borrowings at amortized cost
Under previous GAAP, transaction costs incurred towards origination of borrowings are recognised as prepaid expenses
to be amortized in the profit or loss over the tenure of the borrowing. Under Ind AS, transaction costs incurred towards
origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are
recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective
interest rate method.
3 Deemed cost model
The Group has elected to measure certain items of property, plant and equipment and intangibles at fair value in
accordance to para D5 of Ind AS 101 at the date of transition to Ind AS. A leasehold land which was recognised as an item
of property, plant and equipment under the previous GAAP has been classified as operating lease as per Ind AS 17.

230 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
57 FIRST TIME ADOPTION OF IND AS (Contd.)
Reconciliation of property, plant and equipment as at 1 April 2015:
(Rs. in million)
Particulars Previous GAAP Adjustment on Ind AS value for
value of assets fair transition to Ind assets fair valued
valued AS
Freehold land 1,036.74 2,595.70 3,632.44
Buildings 1,062.48 1,089.78 2,152.26
Leasehold improvements 3,285.78 (1,164.11) 2,121.67
Plant and equipment 3,827.42 (1,272.53) 2,554.89
Office equipment 0.28 (0.28) -
Furniture and fixtures 846.31 (520.81) 325.50
Computers 1.34 1.39 2.73
Vehicles 409.00 (88.01) 320.99
Coffee vending machine 2,465.37 (423.43) 2,041.94
Leasehold land 8.35 950.95 959.30
Capital work-in-progress 1,315.68 (795.70) 519.98
14,258.75 372.95 14,631.70

4 Business combinations
Under Previous GAAP, changes in parent's ownership interest without loss of control was accounted by adjusting the
carrying amount of non-controlling interest to reflect the change in ownership interest in the subsidiary. Further, any
difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration
paid or received was recognised in goodwill; arising as a result of past acquisitions.
Under Ind AS, these transactions are treated as equity transactions whereby any difference between the amount by which
the non controlling interest is adjusted and the fair value of the consideration paid or received is recognised in equity
and attributed to the parent's equity holders. This impact has been recognised in 'Capital reserve' in the equity with the
corresponding increase or decrease in non-controlling interest.
5 Expected credit loss model
Under previous GAAP, the Group had created provision for impairment of receivables based on actual incurred losses.
Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL) under which the group
impaired its trade receivable as on 1 April 2015 which has been eliminated against retained earnings. The impact for year
ended on 31 March 2016 has been recognized in the statement of profit and loss.
6 Share based payments
Under Previous GAAP, the intrinsic value of the employee stock option plan is recognised as an expense over the vesting
period. Under Ind AS, the compensation cost of employee stock option plan is recognised based on the fair value of the
options determined using an appropriate pricing model at the date of grant. The reduction in employee compensation
cost for the unvested options as on the date of transition based on fair value method has been adjusted against retained
earnings. The impact for the year ended 31 March, 2016 has been recognised in 'Employee benefits expenses' in the
Statement of Profit and Loss.
7 Fair valuation of financial assets and liabilities
a) Under Previous GAAP, the security deposits for leases are accounted at an undiscounted value. Under Ind AS, the
security deposits for leases have been recognised at discounted value and the difference between undiscounted and
discounted value has been recognised as ‘Deferred lease rent’ which has been amortised over respective lease term
as rent expense under ‘other expenses’ or rental income under 'revenue from operations'. The discounted value of the
security deposits is increased over the period of lease term by recognising the notional interest income / expenses
under ‘other income’ or 'finance cost'.
b) Under Previous GAAP, long term liabilities and retention dues are recognised on undiscounted basis. Under Ind
AS, these are recognised at present value (discounted value) where the effect of time value of money is material.
This led to a change in carrying value on the date of transition which was adjusted against retained earnings. Also,
where discounting is used, the carrying value in each period is adjusted to reflect the passage of time. The impact of
unwinding of discount and change in discount rate are recognised in the Statement of Profit and Loss under 'Finance
costs' and 'Interest income' for the year ended 31st March, 2016.
Discounting of long-term liabilities resulted in reversal of liabilities to be recognised as 'Finance cost' over the tenure
of the liability.
Discounting of retention money resulted in reduction of trade receivables to be recognised as interest income over
the retention period.

FINANCIAL SECTION | 231

Notes to the consolidated financial statements for the year ended 31 March 2017
57 FIRST TIME ADOPTION OF IND AS (Contd.)
8 Classification of financial liabilities
The Group has issued compulsorily convertible preference shares and non-convertible redeemable preference shares.
The compulsorily convertible preference shares carry fixed cumulative dividend at rate of 0.001% p.a. and non-convertible
redeemable preference shares carries non-cumulative preferred dividend calculated at the rate of 0.001%, if declared by
the Company. Under Indian GAAP, these preference shares were classified as equity and dividend payable thereon was
treated as distribution of profit, if any.
Under Ind AS, preference shares are classified as liability based on the terms of their contract. Interest and premium on
liability component is recognised using the effective interest method. Thus the preference share capital is reduced with a
corresponding increase in borrowings as liability component.
9 Interest rate swaps
a) Under Ind AS, financial assets designated at fair value through other comprehensive income (FVTOCI) are fair valued
at each reporting date with changes in fair value (net of deferred taxes) recognized directly in other comprehensive
income. Under previous GAAP, they are measured at cost with provision for diminution other than temporary.
Investments in equity instruments have been classified as FVTOCI. Consequently, fair value of such equity instruments
designated at FVTOCI has resulted in a gain / (loss) in other comprehensive income.
b) Under Ind AS, financial assets and financial liabilities designated at fair value through profit and loss (FVTPL) are fair
valued at each reporting date with changes in fair value recognized in the statement of profit and loss. Under previous
GAAP, they are measured at lower of cost or net realisable value. Mutual fund investments have been classified as
FVTPL. Consequently, change in fair value of such investments has resulted in a gain / (loss) in the statement of profit
and loss.
10 Equity method of accounting
Under Previous GAAP, investment in joint ventures was proportionately consolidated along with the consolidated assets
and liabilities. Under Ind AS, investment in joint ventures will be measured using the equity method. Consequently, on
the date of transition, the initial investment shall be measured as the aggregate of the carrying amount of the assets and
liabilities that the entity had previously proportionately consolidated.
11 Initial direct costs of leases
Under Previous GAAP, initial direct cost incurred by lessor in negotiating and arranging an operating lease are recognised
immediately in the statement of profit or loss. Under Ind AS, these expenses shall be added to the carrying amount of the
lease asset and recognised as an expense over the lease term on the same basis as the lease income.
12
Tax impact
Under Previous GAAP, deferred taxes were recognised for the tax effect of timing differences between accounting profit
and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using
the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities
and their respective tax bases. The above difference, together with the consequential tax impact of the other Ind AS
transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the
underlying transaction either in retained earnings or through profit or loss / other comprehensive income.
13 Defined benefit plans
Under previous GAAP, actuarial gains and losses were recognised in the statement profit and loss. Under Ind AS, the
actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in
other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive
income under Ind AS instead of statement of profit and loss.
14 Other comprehensive income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period,
unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but
are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit
plans and effective portion of gains and losses on cash flow hedging instruments. The concept of other comprehensive
income did not exist under previous GAAP.
15 Foreign currency translation reserve
In accordance with Ind AS 101, amount of foreign currency differences arising from translation of the financial statement of
the foreign subsidiaries to Indian Rupees for the year ended 31 March 2016 has been routed through other comprehensive
income.

232 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
57 FIRST TIME ADOPTION OF IND AS (Contd.)

16
Bank overdrafts
Under Ind AS, bank overdrafts repayable on demand and which form an integral part of the cash management process
are included in cash and cash equivalents for the purpose of presentation of statement of cash flows. Under previous
GAAP, bank overdrafts were considered as part of borrowings and movements in bank overdrafts were shown as part of
financing activities.
17
Book overdrafts
Under Ind AS, book overdrafts are included in cash and cash equivalent for the purpose of presentation of statement of
cash flows. Under previous GAAP, book overdrafts were considered as part of other current liabilities and movement in
book overdraft were shown as part of operating activities.
58 During the year ended 31 March 2017, the Company vide its Board meeting dated 11 August 2016 has approved for the scheme of
merger between itself and Coffee Day Overseas Private Limited (CDOPL), to be filed with the National Company Law Tribunal (NCLT)
after obtaining requisite regulatory approvals. CDOPL is a private limited company and holds 3.21% of shares in Coffee Day Global
Limited, a subsidiary of the Company, on a fully diluted basis. The appointed date of the scheme is 1 August 2016 and currently, the
Company has obtained approvals from Competition Commission of India, Stock exchanges and SEBI post which the scheme was
filed with the NCLT for final approval. Pending approvals, no accounting adjustments are presently recorded in the consolidated
financial results of the Company.

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Enterprises Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
R. Ram Mohan Sadananda Poojary
Chief Financial Officer Company Secretary
Place: Bangalore Place: Bangalore Place: Bangalore
Date: 18 May 2017 Date: 18 May 2017 Date: 18 May 2017

FINANCIAL SECTION | 233

 AOC - I

the Company is presenting summarised financial information about individual subsidiaries as at March 31, 2017/
December 31, 2016.
(Rs. in million)
S. Name of the Subsidiary Reporting Reporting Exchange Share Reserves Total Total Invest- % of Turn- Profit Provision Profit Proposed
No. Period Currency rate as on Capital & Surplus Assets Liabilities ments Holding over Before for after Dividend
March 31 excluding Taxation Taxation Taxation
2017 / (6) & (7)
Dec 31
2016
1 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1 Coffee Day Global Limited Apr-March Rs. 1 169.91 9184.73 18409.93 9055.29 970.36 86.63 14603.34 538.46 216.36 322.1 -
2 Way2Wealth Securities Private Apr-March Rs. 1 475.02 822.40 2,016.90 719.48 993.40 85.53 851.30 167.70 58.70 109.00
Limited
3 Tanglin Developments Limited Apr-March Rs. 1 51.31 513.32 24001.6 23437 1098.4 100 1229.5 314.1 -35.6 349.7
4 Coffee Day Hotels and Resorts Apr-March Rs. 1 112.24 -244.54 2187.88 2320.18 352.27 100 112.74 -95.56 0 -95.56
Private Limited
5 Coffee Day Trading Limited Apr-March Rs. 348.32 1744.13 2095.76 3.31 265.67 88.77 232.25 97.7 0.04 97.65
6 Ganga Coffee Curing Works Apr-March Rs. 1 11.82 6.74 36.82 18.26 0 100 28.47 -2.56 0 -2.56 0
Limited
7 Classic Coffee Curing Works Apr-March Rs. 1 31.01 -11.65 20.07 0.71 0 100 0 -0.32 0 -0.32 0
8 Coffee Day Properties (India) Apr-March Rs. 1 11.33 -8.89 4.98 2.53 0 100 0 -0.31 0 -0.31 0
Private Limited
9 Amalgamated Holdings Limited Apr-March Rs. 1 11.04 223.96 290.77 55.77 0 100 949.81 20.59 14.14 6.45
10 Coffeelab Limited Apr-March Rs. 1 0.59 -6.17 4.24 1.33 0 100 14.04 -4.26 -0.09 -4.35
11 A N Coffeeday International Apr-March USD 64.8 53.42 541.66 737.98 142.9 596.03 100 0 -1.33 0 -1.33 0
Limited
12 Coffee Day Gastronomie Und Apr-March EURO 69.15 1.05 11.21 23.16 10.89 0 100 58.35 -19.03 0 -19.03 0
Kaffeehandles GmbH
13 Coffee Day CZ a.s. Apr-March CZK 2.56 91.67 -209.82 42 160.14 0 100 148.67 -36.89 0 -36.89 0
14 Way2Wealth Distributors Private Apr-March Rs. 1 2.50 (2.32) 42.05 41.87 7.11 99.99 89.91 (3.20) (0.90) (2.30)
Limited
15 Way2Wealth Capital Private Apr-March Rs. 1 80.00 67.99 207.40 59.41 0.63 99.9 28.91 6.84 2.12 4.72
Limited
16 Way2Wealth Realty Advisors Apr-March Rs. 1 0.10 1.69 5.70 3.91 95 125.24 10.00 1.09 8.91
Private Limited
17 Way2Wealth Insurance Brokers Apr-March Rs. 1 10.00 2.02 19.87 7.85 100 31.18 2.00 0.69 1.31
Private Limited
18 Mandi2Market Traders Private Apr-March Rs. 1 6.00 (1.45) 24.82 20.27 99.99 145.13 1.79 0.84 0.95
Limited
19 Way2Wealth Brokers Private Apr-March Rs. 1 183.50 703.10 2,621.50 1,734.90 267.60 99.99 1,393.90 103.00 6.40 96.60
Limited
20 Way2Wealth Commodities Private Apr-March Rs. 1 15.00 8.01 245.60 222.59 - 99.99 337.74 (0.00) 0.19 (0.19)
Limited
21 Alphagrep Securities Private Apr-March Rs. 1 14.50 472.63 622.40 135.27 161.36 51 1,451.50 125.00 42.00 83.00
Limited
22 Way2Wealth Illuminati Pte Limited USD 64.84 129.47 36.50 786.57 620.59 0.08 100 355.21 29.68 - 29.68
23 AlphaGrep Holding HK Limited USD 64.84 0.08 (2.26) 97.30 99.48 0.01 100 73.83 13.72 - 13.72 -
24 AlphaGrep UK Limited USD 64.84 0.00 0.44 3.93 3.49 - 100 8.93 0.48 0.03 0.44 -
25 Shanghai Dao Ge International - - - - - - - 100 - - - - -
Trading Limited
26 Girividhyuth India Limited Apr-March Rs. - 8.75 -6.55 3.57 1.37 - 100 - 0 - - -
27 Tanglin Retail Realty Apr-March Rs. - 1 -436.68 7473.89 7909.57 2407.84 100 - -137.28 - -137.28 -
Developments Private Limited
28 Sical Logistics Limited Apr-March Rs. 1 556.2 4935.4 17949.8 12458.2 2893.5 52.83 7396 739.7 284.3 455.4 -
29 Sical Mining Limited Apr-March Rs. 1 0.1 - 0.1 - - 100 - - - - -
30 Sical Iron Ore Terminal Limited Apr-March Rs. 1 1300 18 7561.8 6243.8 - 63 - - - - -
31 Sical Iron Ore Terminal (Mangalore) Apr-March Rs. 1 365 0 391.96 26.96 0 100 0 0 0 0
Limited
32 Sical Adams Offshore Limited Apr-March Rs. 1 0.5 - 0.6 0.1 - 99.99 - - - - -
33 Sical Saumya Mining Limited Apr-March Rs. 1 0.1 14.65 1021.25 1006.5 0 65 1268.47 12.56 4.21 8.35
34 Norsea Offshore India Limited Apr-March Rs. 1 0.5 -536.71 1274.67 1810.89 0 99.99 0 -165.98 60.23 -105.75
35 Sical Infra Assets Limited Apr-March Rs. 1 532.97 1992.36 2616.44 91.1 910.95 53.6 99.58 12.73 -2.86 15.59
36 Sical Bangalore Logistics Park Apr-March Rs. 1 0.1 0 12.63 12.43 0 100 0 0 0 0
Limited
37 Sical Multimodal and Rail Apr-March Rs. 1 726.9 875.8 5772.3 4169.6 34.5 99.99 1778.3 29.4 20.9 8.5 0
Transport Limited
38 Bergen Offshore Logistics Pte Apr-March USD 64.84 466.8 -461.4 1350.1 1344.7 - 100 - - - - -
Limited*
39 Wilderness Resorts Private Limited Apr-March Rs. 1 12.83 34.75 602.9 555.32 1.3 100 0 -62.65 0 -62.65 0
40 Karnataka Wildlife Resorts Private Apr-March Rs. 1 13 -220.91 573.68 781.59 0 100 74.43 10.48 0 10.48 0
Limited
41 Magnasoft Consulting India Apr-March Rs. 1 33.62 273.42 512.03 204.99 0.09 77.88 413.55 57.88 1.91 55.97 0
Private Limited
42 Magnasoft Europe Limited Apr-March GBP 0 -0.08 0 0.09 0 100 0 0 0 0 0
43 Magnasoft Spatial Services Inc. Apr-March USD 64.84 0 -0.29 0.52 0.81 0 100 1.45 0 0 0 0

234 | COFFEE DAY | ANNUAL REPORT 2016-17

* The financials of Bergen Offshore Logistics Pte Limited reflects the consolidated financials including the wholly owned subsidiary
Norsea Global Offshore Pte Limited
1 There is a Significant influence due to Percentage of Share Capital
2 Names of Associates or Joint Ventures or Subsidiaries which are yet to commence Business
a. Girividyuth India Ltd
b. Tanglin Retail Reality Developments Private Limited
c. Sical Bangalore Logistics Park Limited
d. Sical Mining Limited
e. Sical Adams Offshore Limited
f. Sical Iron Ore Terminal Limited
g. Sical Iron Ore Terminal (Mangalore) Limited
3 Name of associates or subsidiaries which have been liquidated or sold during the year
a. step-down subsidiary of the Company “AlphaGrep Holding HK Limited” has divested 4050 [40.50 %] shares in its subsidiary
namely Lighthouse Financial Technologies Limited (formerly known as AlphaGrep Technologies Limited (AG TECH) and
its subsidiaries Lighthouse Financial HK Limited [ Formerly known as Alpha Grep HK Limited (AG HK) and Lighthouse
Financial Trading Limited [ Formerly known as AlphaGrep Trading Limited (AG TL) ]
b. step-down subsidiary of the Company “Way2Wealth Brokers Private Limited” has transferred entire [100%] shares in its
subsidiary namely Way2Wealth Illuminati Pte. Limited to Alphagrep Securities Private Limited

PART B - LIST OF ASSOCIATES

(Rs. in million)
S. Name of Associates/ Latest No. of Shares Amount of Extend of Reason why Net worth Profit
No. Joint Ventures audited held by the Investment Holding (In the associate attributable to Considered in
Balance Company in in Associates percentage) is not shareholding Consolidation
Sheet date Associate on consolidated as per latest
the year end audited
Balance Sheet
1 Ittiam Systems Private 31-Mar-17 3200000 128.70 21.91 NA 232.68 1.3
Limited
2 Barefoot Resorts and 31-Mar-17 17672 160 27.69 NA 82.82 -1.72
Leisure India Private
Limited
3 Global Edge Software 31-Mar-17 6520343 54.39 26.5 NA 128.1 25.94
Limited
4 Mindtree Limited 31-Mar-17 28056012 2071.9 16.7 NA 4605.52 18.9
5 Coffee Day Schaerer 31-Mar-17 680000 6.86 49 NA 1.719 -3.53
Technologies Private
Limited
6 PSA Sical Terminals 31-Mar-17 5625030 65.4 37.5 NA 1678 14.3
Limited
7 Sical Sattva Rail Terminal 31-Mar-17 1725000 34.5 50 NA 312 -4.5
Private Limited

FINANCIAL SECTION | 235

 Consolidated
Financial Statements of
Coffee Day Global Limited

236 | COFFEE DAY | ANNUAL REPORT 2016-17

Independent Auditor’s Report
To
The Members of
Coffee Day Global Limited

Report on the Consolidated Ind AS Financial Statements We conducted our audit in accordance with the Standards
We have audited the accompanying consolidated Ind AS on Auditing specified under Section 143(10) of the Act. Those
financial statements of Coffee Day Global Limited (“the Standards require that we comply with ethical requirements and
Holding Company”), its subsidiary companies and a joint plan and perform the audit to obtain reasonable assurance about
venture company (collectively referred to as “the Group”), which whether the consolidated Ind AS financial statements are free
comprise the consolidated balance sheet as at 31 March 2017, from material misstatement.
the consolidated statement of profit and loss (including other
comprehensive income), the consolidated cash flow statement An audit involves performing procedures to obtain audit
and the consolidated statement of changes in equity for the year evidence about the amounts and disclosures in the consolidated
then ended, and a summary of significant accounting policies Ind AS financial statements. The procedures selected depend on
and other explanatory information (hereinafter referred to as the Auditor’s judgment, including the assessment of the risks of
“consolidated Ind AS financial statements”). material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments,
Management’s Responsibility for the Consolidated Ind AS the auditor considers internal financial control relevant to the
Financial Statements Holding Company’s preparation of the consolidated Ind AS
The Holding Company’s Board of Directors is responsible financial statements that give a true and fair view in order to design
for the preparation of these consolidated Ind AS financial audit procedures that are appropriate in the circumstances. An
statements in terms of the requirement of the Companies Act, audit also includes evaluating the appropriateness of accounting
2013 (hereinafter referred to as “the Act”) that give a true and policies used and the reasonableness of the accounting estimates
fair view of the consolidated financial position, consolidated made by the Holding Company’s Board of Directors, as well as
financial performance including other comprehensive income, evaluating the overall presentation of the consolidated Ind AS
consolidated cash flows and consolidated changes in equity of financial statements.
the Group in accordance with the accounting principles generally
accepted in India, including the Accounting Standards (Ind AS) We believe that the audit evidence obtained by us and the audit
prescribed under Section 133 of the Act read with relevant evidence obtained by the other auditors in terms of their reports
rules issued thereunder. The respective Board of Directors of referred to in the other matters paragraph below, is sufficient
the companies included in the Group and its joint venture are and appropriate to provide a basis for our audit opinion on the
responsible for maintenance of adequate accounting records in consolidated Ind AS financial statement.
accordance with the provisions of the Act for safeguarding the
assets of the Group and for preventing and detecting frauds and Opinion
other irregularities; the selection and application of appropriate In our opinion and to the best of our information and according
accounting policies; making judgments and estimates that are to the explanations given to us, the aforesaid consolidated Ind AS
reasonable and prudent; and the design, implementation and financial statements give the information required by the Act in
maintenance of adequate internal financial controls, that were the manner so required and give a true and fair view in conformity
operating effectively for ensuring the accuracy and completeness with the accounting principles generally accepted in India
of the accounting records, relevant to the preparation and including Ind AS, of the consolidated state of affairs of the Group
presentation of the consolidated Ind AS financial statements that as at 31 March 2017, and its consolidated financial performance
give a true and fair view and are free from material misstatement, including other comprehensive income, its consolidated cash
whether due to fraud or error, which have been used for the flows and the consolidated changes in equity for the year then
purpose of preparation of the consolidated Ind AS consolidated ended.
financial statements by the Directors of the Holding Company, as Other matter
aforesaid. We did not audit the financial statements of five subsidiaries
Auditor’s Responsibility included in the consolidated Ind AS financial statements. Of the
Our responsibility is to express an opinion on these consolidated above:
Ind AS financial statements based on our audit.
(a) We did not audit the financial statements of three
We have taken into account the provisions of the Act, the subsidiary companies incorporated outside India,
accounting and auditing standards and matters which are whose financial statements reflect total assets of Rs.60.21
required to be included in the audit report under the provisions million as at 31 March 2017, total revenues of Rs.209.67
of the Act and the Rules made thereunder. million and net cash outflows amounting to Rs.0.39

FINANCIAL SECTION | 237

 million for the year then ended, as considered in the (e) On the basis of the written representations received
consolidated Ind AS financial statements. The financial from the directors of the Holding company as on 31
statements of these subsidiaries, incorporated outside March 2017 taken on record by the Board of Directors of
India, are drawn up in accordance with the generally the Holding company and the reports of the statutory
accepted accounting principles of the respective auditors of its subsidiary companies and joint venture
countries (‘the local GAAP’) which have been audited incorporated in India, none of the directors of the Group
by other auditors duly qualified to act as auditors in companies incorporated in India is disqualified as on 31
those countries. For the purpose of preparation of March 2017 from being appointed as a director in terms
consolidated financial statements, the aforesaid local of Section 164 (2) of the Act;
GAAP financial statements have been restated by the
(f ) With respect to the adequacy of the internal financial
Management of the said entities so that they conform
controls over financial reporting of the Group and the
to the generally accepted accounting principle of India.
operating effectiveness of such controls, refer to our
(b) We did not audit the Ind AS financial statements of separate report in the Annexure; and
two subsidiary companies whose Ind AS financial
(g) With respect to the other matters to be included in
statements reflect total assets of Rs.56.89 million as at
the Auditor’s Report in accordance with Rule 11 of
31 March 2017, total revenues of Rs.29.87 million and
the Companies (Audit and Auditor’s) Rules, 2014, in
net cash outflows amounting to Rs.0.09 million for the
our opinion and to the best of our information and
year then ended, as considered in the consolidated Ind
according to the explanations given to us:
AS financial statements. These financial statements have
been audited by other auditors whose reports have been (i) The consolidated Ind AS financial statements
furnished to us by the Management and our opinion on disclose the impact of pending litigations on
the consolidated Ind AS financial statements, in so far the consolidated financial position of the Group.
as it relates to the amounts and disclosures included in Refer note 33 to consolidated Ind AS the financial
respect of these subsidiary companies, and our report statements;
in terms of sub-sections (3) and (11) of Section 143 of
(ii) The Group did not have any material foreseeable
the Act, insofar as it relates to the aforesaid subsidiary
losses on long-term contracts including derivative
companies is based solely on the reports of the other
contracts;
auditors.
(iii) There has been no delay in transferring amounts,
Our opinion on the consolidated Ind AS financial statements,
required to be transferred, to the Investor Education
and our report on Other Legal and Regulatory Requirements
and Protection Fund by the Holding Company, its
below, is not modified in respect of the above matters with
subsidiary companies and joint venture company
respect to our reliance on the work done and the reports of
incorporated in India;
the other auditors and the financial statements certified by
the Management. (iv) The requisite disclosures in the consolidated Ind
AS financial statements, for holdings as well as
Report on Other Legal and Regulatory Requirements
dealings in Specified Bank Notes as defined in the
1. As required by Section 143(3) of the Act, we report, to the
Notification S.O. 3407(E) dated 8 November 2016
extent applicable, that:
of the Ministry of Finance, during the period from
(a) We have sought and obtained all the information and 8 November 2016 to 30 December 2016, have
explanations which to the best of our knowledge and been provided with respect to Holding Company
belief were necessary for the purposes of our audit of and its subsidiary companies incorporated in
the aforesaid consolidated Ind AS financial statements; India. Based on audit procedures and reliance on
(b) In our opinion, proper books of account as required by the management representation we report that
law relating to preparation of the aforesaid consolidated the disclosures are in accordance with books of
Ind AS financial statements have been kept so far as it account maintained by the Holding Company
appears from our examination of those books and the and its subsidiary companies incorporated in
reports of the other auditors; India and as produced to us by the Management
of the Holding Company. Refer Note 39 to the
(c) The consolidated balance sheet, the consolidated consolidated Ind AS financial statements.
statement of profit and loss, the consolidated statement
of cash flows and consolidated statement of changes
in equity dealt with by this report are in agreement
with the relevant books of account maintained for for B S R & Co. LLP
the purpose of preparation of the consolidated Ind AS Chartered Accountants
financial statements; Firm’s registration number: 101248W/W-100022

(d) In our opinion, the aforesaid consolidated Ind AS

financial statements comply with the Accounting Supreet Sachdev
Standards specified under Section 133 of the Act, read Bangalore Partner
with read with relevant rules issued thereunder; 18 May 2017 Membership number: 205385

238 | COFFEE DAY | ANNUAL REPORT 2016-17

Annexure to the Independent Auditor’s Report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

In conjunction with our audit of the consolidated Ind AS financial Meaning of Internal Financial Controls over Financial Reporting
statements of the Company as of and for the year ended 31 A company's internal financial control over financial reporting is a
March 2017, we have audited the internal financial controls over process designed to provide reasonable assurance regarding the
financial reporting of Coffee Day Global Limited (‘the Holding reliability of financial reporting and the preparation of financial
Company’) and its subsidiary companies which are companies statements for external purposes in accordance with generally
incorporated in India, as of that date. accepted accounting principles. A company's internal financial
control over financial reporting includes those policies and
Management’s Responsibility for Internal Financial Controls
procedures that (1) pertain to the maintenance of records that,
The respective Board of Directors of the Holding Company and its
in reasonable detail, accurately and fairly reflect the transactions
subsidiary companies and joint venture company incorporated
and dispositions of the assets of the Company; (2) provide
in India, are responsible for establishing and maintaining internal
reasonable assurance that transactions are recorded as necessary
financial controls based on the internal control over financial
to permit preparation of financial statements in accordance
reporting criteria established by the Company considering the
with generally accepted accounting principles, and that receipts
essential components of internal control stated in the Guidance
and expenditures of the Company are being made only in
Note on Audit of Internal Financial Controls over Financial
accordance with authorisations of management and directors of
Reporting issued by the Institute of Chartered Accountants
the Company; and (3) provide reasonable assurance regarding
of India (‘ICAI’). These responsibilities include the design,
prevention or timely detection of unauthorised acquisition, use,
implementation and maintenance of adequate internal financial
or disposition of the Company's assets that could have a material
controls that were operating effectively for ensuring the orderly
effect on the financial statements.
and efficient conduct of its business, including adherence to
company’s policies, the safeguarding of its assets, the prevention Inherent Limitations of Internal Financial Controls Over
and detection of frauds and errors, the accuracy and completeness Financial Reporting
of the accounting records, and the timely preparation of reliable Because of the inherent limitations of internal financial controls
financial information, as required under the Companies Act, 2013. over financial reporting, including the possibility of collusion
or improper management override of controls, material
Auditor’s Responsibility misstatements due to error or fraud may occur and not be
Our responsibility is to express an opinion on the Company's detected. Also, projections of any evaluation of the internal
internal financial controls over financial reporting based on our financial controls over financial reporting to future periods are
audit. We conducted our audit in accordance with the Guidance subject to the risk that the internal financial control over financial
Note on Audit of Internal Financial Controls over Financial reporting may become inadequate because of changes in
Reporting (‘the Guidance Note’) and the Standards on Auditing, conditions, or that the degree of compliance with the policies or
issued by ICAI and deemed to be prescribed under section procedures may deteriorate.
143(10) of the Act to the extent applicable to an audit of internal
Opinion
financial controls, both applicable to an audit of Internal Financial
In our opinion, the Holding Company, its subsidiary companies
Controls and, both issued by the ICAI. Those Standards and the
and joint venture company, which are companies incorporated in
Guidance Note require that we comply with ethical requirements
India, have, in all material respects, an adequate internal financial
and plan and perform the audit to obtain reasonable assurance
controls system over financial reporting and such internal financial
about whether adequate internal financial controls over financial
controls over financial reporting were operating effectively as
reporting was established and maintained and if such controls
at 31 March 2017, based on the internal control over financial
operated effectively in all material respects.
reporting criteria established by the Company considering the
Our audit involves performing procedures to obtain audit essential components of internal control stated in the Guidance
evidence about the adequacy of the internal financial controls Note ICAI.
system over financial reporting and their operating effectiveness.
Other matters
Our audit of internal financial controls over financial reporting
Our aforesaid reports under Section 143(3)(i) of the Act on the
included obtaining an understanding of internal financial
adequacy and operating effectiveness of the internal financial
controls over financial reporting, assessing the risk that a material
controls over financial reporting in so far as it relates to one
weakness exists, and testing and evaluating the design and
subsidiary companies, which is a company incorporated in India,
operating effectiveness of internal control based on the assessed
is based on the corresponding reports of the auditors of such
risk. The procedures selected depend on the auditor’s judgment,
companies.
including the assessment of the risks of material misstatement of
the Ind AS financial statements, whether due to fraud or error. for B S R & Co. LLP
We believe that the audit evidence we have obtained and the Chartered Accountants
audit evidence obtained by the other auditor’s in terms of their Firm’s registration number: 101248W/W-100022
reports referred to in other matters paragraph below, is sufficient
and appropriate to provide a basis for our audit opinion on the Supreet Sachdev
Company’s internal financial controls system over financial Bangalore Partner
reporting. 18 May 2017 Membership number: 205385

FINANCIAL SECTION | 239

Balance sheet
as at 31st March, 2017
(Rs. in million)
Note As at As at As at
31 March 2017 31 March 2016 1 April 2015
ASSETS
Non-current assets
Property, plant and equipment 4 9,388.17 9,253.99 8,884.15
Capital work-in-progress 4 535.15 368.74 297.85
Goodwill 6 159.40 175.59 167.60
Intangible assets 5 85.25 6.26 1.32
Financial assets
- Investments 7 1.72 0.35 -
- Loans 8-A 780.54 698.12 626.12
- Other non-current financial assets 9-A 77.63 154.47 113.00
Deferred tax assets (net) 32-D 91.27 49.69 68.10
Other non-current assets 10-A 825.40 855.77 535.72
Total non-current assets 11,944.53 11,562.98 10,693.86
Current assets
Inventories 11 1,186.80 1,116.23 1,041.94
Financial assets
- Trade receivables 12 1,545.83 1,279.85 1,204.17
- Cash and cash equivalents 13 2,159.51 2,610.81 1,509.34
- Bank balances other than cash and cash equivalent 14 60.01 1,665.52 94.60
- Loans 8-B 50.18 38.76 11.69
- Other current financial assets 9-B 133.59 161.30 163.16
Other current assets 10-B 801.66 483.53 431.47
Total current assets 5,937.58 7,356.00 4,456.37
Total assets 17,882.11 18,918.98 15,150.23
EQUITY AND LIABILITIES
Equity
Equity share capital 15 169.91 168.68 162.60
Compulsorily convertible debentures 16 4,100.00 4,100.00 -
Other equity 17 8,536.63 8,082.48 7,512.53
Total equity attributable to owners of the Company 12,806.54 12,351.16 7,675.13
Non-current liabilities
Financial liabilities
- Borrowings 18-A 1,190.66 1,876.34 2,897.72
- Other non-current financial liabilities 19-A 372.75 276.16 250.68
Provisions 20-A 16.62 16.10 3.62
Other non-current liabilities 21-A 72.97 51.60 39.43
Total non-current liabilities 1,653.00 2,220.20 3,191.45
Current liabilities
Financial liabilities
- Borrowings 18-B 1,002.22 1,095.97 1,470.01
- Trade payables 22
Total outstanding dues of micro enterprises and small - - -
enterprises
Total outstanding dues of creditors other than micro 286.22 408.82 536.76
enterprises and small enterprises
- Other current financial liabilities 19-B 1,438.76 2,535.62 2,113.33
Provisions 20-B 22.47 22.27 13.63
Current tax liabilities (net) 23 254.69 148.78 14.15
Other current liabilities 21-B 418.21 136.16 135.77
Total current liabilities 3,422.57 4,347.62 4,283.65
Total equity and liabilities 17,882.11 18,918.98 15,150.23
Significant accounting policies 3

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Global Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
Place: Bangalore Jayaraj C Hubli Sadananda Poojary
Date: 18 May 2017 CFO/ Director (DIN: 00073670) Company Secretary

240 | COFFEE DAY | ANNUAL REPORT 2016-17

Consolidated statements of profit & loss
for the year ended 31st March, 2017
(Rs. in million)
Note For the year ended For the year ended
31 March 2017 31 March 2016
INCOME
Revenue from operations 24 15,354.66 13,699.72
Other income 25 283.65 251.87
Total income 15,638.31 13,951.59
EXPENSES
Cost of materials consumed 26 7,146.31 6,373.16
Cost of traded goods 59.54 68.64
Changes in inventories of finished goods and work-in-progress 27 64.05 (96.49)
Employee benefits expense 28 2,082.34 1,736.23
Finance costs 29 478.95 493.06
Depreciation and amortization expense 30 1,632.65 1,526.29
Other expenses 31 3,676.81 3,456.77
Total expenses 15,140.65 13,557.66
Profit before tax 497.66 393.93
Tax expense:
- Current tax 32 274.57 178.22
- Deferred tax 32 (44.08) (28.22)
Profit for the year before loss from joint venture 267.17 243.93
Share of loss of joint venture (3.54) (1.61)
Profit for the year 263.63 242.32
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plan actuarial gains/ (losses) (0.91) (6.75)
Income tax relating to items that will not be reclassified to profit or loss (0.05) 2.15
(0.96) (4.60)
Items that will be reclassified subsequently to profit or loss:
Foreign currency translation reserve 9.68 (1.22)
Effective portion of gains and losses on hedging 7.31 15.27
Income tax relating to items that will be reclassified to profit or loss (2.53) (5.28)
14.46 8.77
Other comprehensive income for the period 13.50 4.17
Total comprehensive income for the period 277.13 246.49
Profit attributable to:
- Owners of the Company 263.63 242.32
- Non-controlling interests - -
Other comprehensive income attributable to:
- Owners of the Company 13.50 4.17
- Non-controlling interests - -
Total comprehensive income attributable to:
- Owners of the Company 277.13 246.49
- Non-controlling interests - -
Earnings per equity share 35
- Basic 1.64 1.50
- Diluted 1.47 1.34
Significant accounting policies 3

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Global Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
Place: Bangalore Jayaraj C Hubli Sadananda Poojary
Date: 18 May 2017 CFO/ Director (DIN: 00073670) Company Secretary

FINANCIAL SECTION | 241

Consolidated statements of cash flow
for the year ended 31st March, 2017
(Rs. in million)
For the year ended For the year ended
31 March 2017 31 March 2016
A. Cash flows from operating activities
Profit before tax 497.66 393.93
Adjustments:
- Interest income (including fair value change in financial instruments) (243.01) (198.73)
- Provision for doubtful debts, net 20.00 20.00
- Provision for impairment of goodwill 7.07 -
- Share based payments 12.71 26.99
- Loss on sale of property, plant and equipment, net 3.01 39.66
- Interest expense (including fair value change in financial instruments) 478.95 493.06
- Depreciation and amortization 1,632.65 1,526.29
- Gain from forex hedging (1.05) (6.16)
- Commission income on guarantees given to group companies (6.58) (2.54)
- Effect of foreign currency translation of subsidiaries 18.80 (9.21)
- Rental expense (due to fair value change in financial instruments) 64.25 61.98
Operating cash flow before working capital changes 2,484.46 2,345.27
Changes in
- Trade receivables (285.98) (95.68)
- Current and non-current loans (73.87) (105.32)
- Current and non-current financial assets 18.55 26.53
- Other current and non-current assets (321.20) (52.75)
- Inventories (70.57) (74.29)
- Trade payables (122.60) (127.94)
- Current and non-current liabilities 37.12 128.83
- Current and non-current financial liabilities 306.25 8.85
- Current and non-current provisions (0.19) 14.37
Cash generated from operations 1,971.97 2,067.87
Income taxes paid (net) (188.16) (41.61)
Cash used in operations (A) 1,783.81 2,026.26
B. Cash flows from investing activities
Purchase of property, plant and equipment (2,035.54) (2,136.91)
Proceeds from sale of property, plant and equipment (1.07) 5.28
Investment in/ (withdrawal) of fixed deposits, net 1,554.67 (1,538.26)
Investment in joint venture (4.91) (1.96)
Interest received 197.05 111.30
Net cash generated from investing activities (B) (289.80) (3,560.55)

242 | COFFEE DAY | ANNUAL REPORT 2016-17

Consolidated statements of cash flow
for the year ended 31st March, 2017
(Rs. in million)
For the year ended For the year ended
31 March 2017 31 March 2016
C. Cash flows from financing activities
Proceeds from/ (repayment of ) long-term and short-term borrowings (1,606.10) (851.96)
Proceeds from compulsorily convertible debentures - 4,100.00
Interest paid (522.08) (505.22)
Redemption of/ (investment in) deposit placed as security for loans availed, net 127.68 (74.13)
Net cash used in financing activities '(C) (2,000.50) 2,668.69
Net (decrease)/increase in cash and cash equivalents (A+B+C) (506.49) 1,134.40
Cash and cash equivalents at the beginning of the year 2,353.53 1,219.13
Cash and cash equivalents at the end of the year 1,847.04 2,353.53
Components of cash and cash equivalents (refer note 13, 18-B and 19-B)
Balances with banks:
- in current accounts 485.19 268.66
- in escrow accounts 19.05 34.94
- in fixed deposit accounts (original maturity less than 3 months) 1,600.77 2,262.95
Cash on hand 54.50 44.26
Book overdraft (17.85) (8.38)
Bank overdraft (294.62) (248.90)
Cash and cash equivalents at the end of the year 1,847.04 2,353.53

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Global Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
Place: Bangalore Jayaraj C Hubli Sadananda Poojary
Date: 18 May 2017 CFO/ Director (DIN: 00073670) Company Secretary

FINANCIAL SECTION | 243

Consolidated statement of changes in equity
as at 31st March, 2017
a Equity share capital
(Rs. in million)
Particulars Amount
Equity shares of Re 1 each issued, subscribed and fully paid
Balance as at 1 April 2015 162.60
Changes in equity share capital during 2015-16 6.08
Balance as at the 31 March 2016 168.68
Changes in equity share capital during 2016-17 1.23
Balance as at 31 March 2017 169.91

b Instruments entirely equity in nature

Compulsorily convertible debentures
(Rs. in million)
Particulars Amount
Compulsorily convertible debentures of Rs.100 each
Balance as at 1 April 2015 -
Changes in compulsorily convertible debentures during 2015-16 4,100.00
Balance as at the 31 March 2016 4,100.00
Changes in compulsorily convertible debentures during 2016-17 -
Balance as at 31 March 2017 4,100.00

c Other Equity
(Rs. in million)
Particulars Reserves and Surplus Other comprehensive income Equity
Capital Shares Securities Debenture General Retained Foreign Effective Remeasurements attributable
reserve options premium redemption reserve earnings currency portion of of actuarial gain to owners
outstanding reserve translation cash flow and losses of the
account reserve hedge Company

Balance as at 1 April 2015 0.04 24.34 7,165.87 83.40 106.50 128.89 18.95 (15.01) (0.45) 7,512.53
Total comprehensive income for the
year ended 31 March 2016:
Profit during the year - - - - - 242.32 - - - 242.32
Effective portion of gains and losses - - - - - - - 9.99 - 9.99
on hedging
Actuarial gain/ (losses) - - - - - - - - (4.60) (4.60)
Exchange difference arising on - - - - - - (1.22) - - (1.22)
translating the foreign operations,
net of tax
Total comprehensive income 0.04 24.34 7,165.87 83.40 106.50 371.21 17.73 (5.02) (5.05) 7,759.02
Contributions and distributions:
Dividends - - - - - (6.25) - - - (6.25)
Transferred from statement of profit - - - 41.70 - (41.70) - - - -
and loss for the year
Conversion of preference shares and - - 302.72 - - - - - - 302.72
compulsorily convertible debentures
to equity shares
Share-based payment - 26.99 - - - - - - - 26.99
Balance as at 31 March 2016 0.04 51.33 7,468.59 125.10 106.50 323.26 17.73 (5.02) (5.05) 8,082.48

244 | COFFEE DAY | ANNUAL REPORT 2016-17

Consolidated statement of changes in equity
as at 31st March, 2017
c Other Equity
(Rs. in million)
Particulars Reserves and Surplus Other comprehensive income Equity
attributable
Capital Shares Securities Debenture General Retained Foreign Effective Remeasurements
to owners
reserve options premium redemption reserve earnings currency portion of of actuarial gain
of the
outstanding reserve translation cash flow and losses
Company
account reserve hedge
Balance as at 1 April 2016 0.04 51.33 7,468.59 125.10 106.50 323.26 17.73 (5.02) (5.05) 8,082.48
Total comprehensive income for the
year ended 31 March 2017:
Profit during the year - - - - - 263.63 - - - 263.63
Effective portion of gains and losses - - - - - - - 4.78 - 4.78
on hedging
Actuarial gain/ (losses) - - - - - - - - (0.96) (0.96)
Exchange difference arising on - - - - - - 9.68 - - 9.68
translating the foreign operations,
net of tax
Total comprehensive income 0.04 51.33 7,468.59 125.10 106.50 586.89 27.41 (0.24) (6.01) 8,359.61
Contributions and distributions:
Dividends - - - - - (3.75) - - - (3.75)
Transfer to retained earnings - - - (125.10) - 125.10 - - - -
Conversion of compulsorily - - 168.45 - - - - - - 168.45
convertible debentures to equity
shares
Share-based payment - 12.71 - - - - - - - 12.71
Others (0.39) - - - - - - - - (0.39)
Balance as at 31 March 2017 (0.35) 64.04 7,637.04 - 106.50 708.24 27.41 (0.24) (6.01) 8,536.63

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Global Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
Place: Bangalore Jayaraj C Hubli Sadananda Poojary
Date: 18 May 2017 CFO/ Director (DIN: 00073670) Company Secretary

FINANCIAL SECTION | 245

Notes to the consolidated financial statements for the year ended 31 March 2017
1.0 COMPANY BACKGROUND
Coffee Day Global Limited ('CDGL' or 'the Company') was originally incorporated as "Amalgamated Bean Coffee Trading Company
Private Limited" on 6 December 1993 under the Companies Act, 1956. On 3 February 1997, the status of the Company was changed
to a public company and the Company deleted the word "Private" from its name. Subsequently, the Company has changed its
name to Coffee Day Global Limited with effect from 20 March 2015.
The registered office of the Company is located in Chikmagalur, Karnataka. The Company is a subsidiary of Coffee Day Enterprises
Limited (the 'ultimate holding company').
Coffee Day Global Limited together with its subsidiary companies and a joint venture company is hereinafter referred to as
"the Group".
The Group is engaged in the business of retailing of coffee and other products mainly through its chain of outlets under the Cafe
and Xpress kiosks formats, under the brand name 'Coffee Day'. The Group also derives its revenue from retail operations from
the sale of coffee beans and other related products and services in respect of coffee vending machines. It is also is engaged in
coffee business which ranges from procuring, processing and roasting of coffee beans to retailing coffee to domestic and overseas
customers.
The Group's consolidated financial statements are approved for issue by the Company's Board of Directors on 18 May 2017.

2 BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

A Statement of compliance
These consolidated financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) as per Companies
(Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act 2013, (the 'Act') and other relevant
provisions of the Act.
The Group has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101, First‑Time
Adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted
in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was
the previous GAAP. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial
performance and cash flows of the Group is provided in Note 46.
Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
Details of the Group's accounting policies are included in note 3.
B Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated Ind AS financial statements are presented in
Indian rupee (Rs.), which is Coffee Day Global Limited’s functional and presentation currency. All financial information presented in
Indian rupee has been rounded to the nearest million unless otherwise indicated.
C Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis, except for the following:
Items Measurement basis
Certain financial assets and liabilities Fair value
(refer accounting policy regarding financial instrument)
Derivative financial instrument Fair value
Share-based payment arrangements Fair value
Net defined benefit (asset)/ liability less present value of Fair value of plan assets less present value of defined benefit plan
defined obligations
D Current versus non-current classification
The Group presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.

246 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
The Group has identified twelve months as its operating cycle.

2 BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

E Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with Ind AS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, incomes
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.
Judgements
Information about judgements made in applying accounting policies that have the most significant effects on the amounts
recognised in the consolidated financial statements is included in the following notes:
∞ note 16 (b), 18 (vii), (viii) and (ix): Classification of an item as equity or liability;
∞ note 3(1): lease classification and straight lining of lease rentals.
Assumptions and estimation uncertainties
Information about judgements, assumptions and estimations uncertainties in applying accounting policies that have the most
significant effect on the amounts recognised in the financial statements is included in the following notes:
∞ note 4: depreciation method and useful life of items of property, plant and equipment;
∞ note 6: impairment of goodwill;
∞ note 7: impairment of investments;
∞ note 33: provisions and contingencies; key assumptions about the likelihood and magnitude of an outflow of resources;
∞ note 43: measurement of defined benefit obligation - key actuarial assumptions.
F Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-
financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured
using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act
in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and
best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

FINANCIAL SECTION | 247

Notes to the consolidated financial statements for the year ended 31 March 2017
The Group has an established control framework with respect to the measurement of fair values. The Group engages with external
valuers for measurement of fair values in the absence of quoted prices in active markets.
Significant valuation issues are reported to the Group’s audit committee. All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. If the inputs used
to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement
is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change has occurred.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets, and significant
liabilities, such as contingent consideration.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. This note summarises
accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
- Financial instruments (note 44)
- Disclosures for valuation methods, significant estimates and assumptions (note 44)
- Quantitative disclosures of fair value measurement hierarchy (note 44)
- Financial instruments (including those carried at amortised cost) (note 44)
G Basis of Consolidation
Business combinations
Business combinations (other than common control business combinations) on or after 1 April 2015:
As part of its transition to Ind AS, the Group has elected to apply Ind AS 103, Business Combinations, to only those business
combinations that occurred on or after 1 April 2015. In accordance with Ind AS 103, the Group accounts for these business
combinations using the acquisition method when control is transferred to the Holding Company. The consideration transferred
for the business combination is generally measured at fair value as at the date the control is acquired (acquisition date), as are
the net identifiable assets acquired. Any goodwill that arises is tested annually for impairment (see note 6). The gain on business
combination is recognised directly in equity as capital reserve. Transaction costs are expensed as incurred, except to the extent
related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships with the acquiree.
Such amounts are generally recognised in the consolidated statement of profit and loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration
that meets the definition of a financial instrument is classified as equity, then it is not remeasured subsequently and settlement is
accounted for within equity. Other contingent consideration is remeasured at fair value at each reporting date and changes in the
fair value of the contingent consideration are recognised in the consolidated statement of profit and loss.
If a business combination is achieved in stages, any previously held equity interest in the acquiree is re-measured at its acquisition
date fair value and any resulting gain or loss is recognised in statement of profit and loss or other comprehensive income (OCI), as
appropriate.
Business combinations prior to 1 April 2015:
In respect of such business combinations, goodwill represents the amount recognised under the Group’s previous accounting
framework under Indian GAAP adjusted for the reclassification of certain intangibles.
Subsidiary companies
Subsidiary companies are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power to direct the relevant activities of the entity. Subsidiary companies are fully consolidated from the
date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

248 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
The acquisition method of accounting is used to account for business combinations by the Group.
The Group combines the financial statements of the parent and its subsidiaries line by line adding together like items of assets,
liabilities, equity, incomes and expenses. Intercompany transactions, balances and unrealised gains on transactions between group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiary companies have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit and
loss, consolidated statement of changes in equity and balance sheet respectively.
Joint venture company
Interests in joint venture company are accounted for using the equity method, after initially being recognised at cost in the
consolidated balance sheet.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the
Group’s share of the post-acquisition profits or losses of the investee in profit and loss, and the Group’s share of other comprehensive
income of the investee in other comprehensive income. Dividends received or receivable from associate and joint venture
companies are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s
interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency
with the policies adopted by the Group.
The carrying amount of equity accounted investments are tested for impairment in accordance with the policy described in note 3
(h) below.
Change in ownership interest
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and
non-controlling interests to reflect their relative interests in the subsidiary companies. Any difference between the amount of the
adjustment to non-controlling interests and any consideration paid or received is recognised within equity.
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant
influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit
or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.

3 SIGNIFICANT ACCOUNTING POLICIES

a Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can
be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually defined terms of payment, inclusive of excise duty and net of taxes or
duties collected on behalf of the government. The Group has concluded that it is the principal in all of its revenue arrangements
since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit
risks.
Sales tax/ value added tax (VAT) is not received by the Group on its own account. Rather, it is tax collected on value added to the
commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognised.
Sale of products
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or
receivable, net of returns, trade discounts and volume rebates. This inter alia involves discounting of the consideration due to the
present value if payment extends beyond normal credit terms. Revenue is recognised when the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of

FINANCIAL SECTION | 249

Notes to the consolidated financial statements for the year ended 31 March 2017
goods can be estimated reliably, there is no continuing effective control over, or managerial involvement with, the goods, and the
amount of revenue can be measured reliably. The timing of transfers of risks and rewards varies depending on the individual terms
of sale.
Sale of goods – customer loyalty programme (deferred revenue)
For customer loyalty programmes, the fair value of the consideration received or receivable in respect of the initial sale is allocated
between the award credits and the other components of the sale. The amount allocated to award credits is deferred and is
recognised as revenue when the award credits are redeemed and the Group has fulfilled its obligations to supply the discounted
products under the terms of the programme or when it is no longer probable that the award credits will be redeemed.
Sale of services
Service revenues are recognized as the services are performed. Services provided pursuant to a contract are either recognized
over the contract period or upon completion of the elements specified in the contract depending on the terms of the contract.
Operating revenues from the distribution and maintenance of vending machines are recognized when the services are rendered.
Revenues include unbilled as well as billed amounts.
Sale of import entitlement
Import entitlements, which are primarily provided for shipping a specified cumulative volume or shipping to/from specific locations,
are recorded on accrual basis based on actual export revenue for the year and pro-rated based on actual or projected realization
of the entitlement. When using realisation, we rely on historic trends as well as economic and other indicators to estimate the
recorded revenue for import entitlements.
Franchisee revenue
Revenue from franchisee arrangement consists of sale of coffee products and other related products as well as royalties paid by
franchisees to use the ‘Coffee Day’ brand. Sales of coffee products and other related products are recognized on transfer of all
significant risks and rewards of ownership to franchisee. Royalty revenues are recognized based upon a percentage of reported
revenues by the franchisee in accordance with the terms of the relevant arrangement unless significant future contingencies exist.
Advertisement income
Income from advertising is recognised ratably over the period of the contract and in accordance with the terms and conditions of
the contract.
Commodity trading
Gain/ loss from commodity future transactions is settled on a net basis and recognized on accrual basis in the statement of profit
and loss.
Other income
Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount
of a financial asset. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the
contractual terms of the financial instrument but does not consider the expected credit losses.
Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic
benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.
b Property, plant and equipment
1. Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated
depreciation and accumulated impairment losses, if any. Cost of an item of property, plant and equipment comprises its
purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any
directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling
and removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any other
costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling
and removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as
separate items (major components) of property, plant and equipment.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when
no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
income statement when the asset is derecognised.

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Notes to the consolidated financial statements for the year ended 31 March 2017
2. Transition to Ind AS
Certain items of property, plant and equipment have been measured at fair value at the date of transition to Ind AS. The Group
regards the fair value as deemed cost at the transition date, viz., 1 April 2015. Refer note 46 (A) (i).
3. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure
will flow to the Group.
4. Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their
estimated useful lives using the straight-line method, and is generally recognised in the statement of profit and loss. Assets
acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. The building built
on leasehold land is classified as building and is amortised over the lease term or the useful life of the building, whichever is
lower.
The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:
Asset Management estimate of useful lives Useful life as per Schedule II
Building 30 – 60 years 30 – 60 years
Leasehold improvements Lease term or estimated useful life of Lease term or estimated useful life,
9 years, whichever is lower whichever is lower
Plant and machinery 12 years 15 years
Office equipment 5 years 5 years
Furniture and fixtures 8 - 10 years 10 years
Computers 3 years 3 years
Vehicles 8 years 8 years
Coffee vending machines 7 - 9 years 15 years
Leasehold land Lease term Lease term

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Based on technical evaluation and consequent advice, the Management believes that its estimates of useful lives as given
above best represent the period over which Management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which asset is ready for use
(disposed of ).
5. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets
are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles,
excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the
period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life
or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense
on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of
carrying value of another asset.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
The Group only has software as an intangible asset having a useful life of 3 years.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is
derecognised.

FINANCIAL SECTION | 251

Notes to the consolidated financial statements for the year ended 31 March 2017
c Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out
formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in
bringing them to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.
The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products.
Raw materials, components and other supplies held for use in the production of finished products are not written down below cost
except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net
realisable value.
The comparison of cost and net realisable value is made on an item-by-item basis.
d Employee benefits
Defined contribution plan
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity
and will have no legal or constructive obligation to pay further amounts. The Group makes specified monthly contributions towards
Government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognised as
an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in
respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees
have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic
benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset
ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding
interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Group determines the net interest
expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the
defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account
any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net
interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service
(‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in the consolidated statement
of profit and loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Short-term employee benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be paid, if the Group has a present legal or constructive obligation to
pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
Share-based payment transactions
The grant date fair value of equity settled share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The
amount recognised as expense is based on the estimate of the number of awards for which the related service and non-market
vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of
awards that do meet the related service and non-market vesting conditions at the vesting date. For share-based payment awards
with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there
is no true-up for differences between expected and actual outcomes.
e Foreign currency transactions
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions
or an average rate if the average rate approximates the actual rate at the date of transaction. Monetary assets and liabilities
denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-

252 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the
exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost
in a foreign currency are translated at the exchange rate at the date of the transaction.
Exchange differences are recognised in the consolidated statement of profit and loss, except exchange differences arising from the
translation of the following items which are recognised in OCI:
- equity investments at fair value through OCI (FVOCI);
- a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective
- qualifying cash flow hedges to the extent that the hedges are effective;
As per Ind AS 101, the Group has chosen to avail the exemption of capitalising the exchange difference arising from foreign currency
loan taken on or before 31 March 2016 and not recognised in the consolidated statement of profit and loss.
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into Rs.at the rate of exchange prevailing at the
reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions.
For practical reasons, the Group uses an average rate to translate income and expense items, if the average rate approximates the
exchange rates at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in
OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in profit or
loss.
Any goodwill arising in the acquisition/ business combination of a foreign operation on or after 1 April 2015 and any fair value
adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the
foreign operation and translated at the spot rate of exchange at the reporting date.
Any goodwill or fair value adjustments arising in business combinations/ acquisitions, which occurred before the date of transition
to Ind AS (1 April 2014), are treated as assets and liabilities of the entity rather than as assets and liabilities of the foreign operation.
Therefore, those assets and liabilities are non-monetary items already expressed in the functional currency of the parent and no
further translation differences occur.
f Income taxes
Income tax comprises current and deferred tax. It is recognised in the consolidated statement of profit and loss except to the extent
that it relates to an item recognised directly in equity or in other comprehensive income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount
expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and
tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts,
and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
Current tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive
income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations
are subject to interpretation and establishes provisions where appropriate.
Minimum alternate tax (‘MAT’) paid in a year is charged to the consolidated statement of profit and loss as current tax. The Group
recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Group will pay normal
income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which
the Group recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect
of Minimum Alternative Tax under the Income tax Act, 1961, the said asset is created by way of credit to the statement of profit and
loss and shown as ‘MAT Credit Entitlement’. The Group reviews the ‘MAT credit entitlement’ asset at each reporting date and writes
down the asset to the extent the Group does not have convincing evidence that it will pay normal tax during the specified period.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried
forward tax losses and tax credits.

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Notes to the consolidated financial statements for the year ended 31 March 2017
Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:
- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss at the time of the transaction;
- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is
able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable
future; and
- taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related
tax benefit will be realized. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been
enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax
assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment
date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against
which the deductible temporary differences and tax losses can be utilized.
g Provisions and contingent liabilities
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined
by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present
obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not
provided for.
Onerous contracts
A contract is considered to be onerous when the expected economic benefits to be derived by the Group from the contract are
lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured
at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the
contract.
Before such a provision is made, the Group recognises any impairment loss on the assets associated with that contract.
The disclosure of contingent liability is made when, as a result of obligating events, there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources.
h Impairment
(i) Impairment of financial instruments
The Group recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost; and
- financial assets measured at FVOCI- debt investments.
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are
credit‑impaired. A financial asset is ‘credit‑impaired’ when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit‑impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or being past due for one year or more;
- the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for a security because of financial difficulties.
The Group measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are
measured as 12 month expected credit losses:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the
financial instrument) has not increased significantly since initial recognition.

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Notes to the consolidated financial statements for the year ended 31 March 2017
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life
of a financial instrument.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible
within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over
which the Group is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating expected credit losses, the Group considers reasonable and supportable information that is relevant and available
without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s
historical experience and informed credit assessment and including forward‑ looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Group considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as
realising security (if any is held); or
- the financial asset is one year or more past due.
Measurement of expected credit losses:
Expected credit losses are a probability‑weighted estimate of credit losses. Credit losses are measured as the present value of
all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash
flows that the Group expects to receive).
Presentation of allowance for expected credit losses in the balance sheet:
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
For debt securities at fair value through OCI (FVOCI), the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of
income that could generate sufficient cash flows to repay the amounts subject to the write‑off. However, financial assets that
are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of
amounts due.
(ii) Impairment of non-financial assets:
The Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating
units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the
cash inflows of other assets or CGUs.
Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the
synergies of the combination.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell.
Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset). In determining
fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified,
an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded companies or other available fair value indicators.
The Group’s corporate assets (e.g., central office building for providing support to various CGUs) do not generate independent
cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the
corporate asset belongs. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses are recognised in the statement of profit and loss.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is

FINANCIAL SECTION | 255

Notes to the consolidated financial statements for the year ended 31 March 2017
allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts
of the other assets of the CGU (or group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not subsequently reversed. In respect of assets for which impairment loss has
been recognised in prior periods, the Group reviews at each reporting date whether there is any indication that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount. Such a reversal is made only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
i Earnings per share
The basic earnings per share is computed by dividing the net profit attributable to owner's of the Group for the year by the weighted
average number of equity shares outstanding during reporting period.
Diluted earnings per share amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting
for interest on the convertible preference shares) by the weighted average number of equity shares outstanding during the year
plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares
into equity shares.
Dilutive potential equity shares are deemed converted as of the beginning of the reporting date, unless they have been issued at a
later date. In computing diluted earnings per share, only potential equity shares that are dilutive and which either reduces earnings
per share or increase loss per share are included.
j Cash and cash equivalents
Cash and cash equivalents in the consolidated balance sheet comprises of cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value.
k Cash flow statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-
cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and
financing activities of the Group are segregated.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as
defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.
l Leases
As a lessee
Assets held under leases
Leases of property, plant and equipment that transfer to the Group substantially all the risks and rewards of ownership are classified
as finance lease. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of
the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting
policy applicable to similar owned assets. Assets held under leases that do not transfer to the Group substantially all the risks and
rewards of ownership (i.e. operating leases) are not recognised in the Group’s consolidated balance sheet.
Lease payments
Payments made under operating leases are generally recognised in the consolidated statement of profit and loss on a straight-
line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to
compensate for the lessor’s expected inflationary cost increases. Lease incentives received are recognised as an integral part of the
total lease expense over the term of the lease. Minimum lease payments made under finance leases are apportioned between the
finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term
so as to produce a constant periodic rate of interest on the remaining balance of the liability.
As a lessor
Lease income from operating leases where the Group is a lessor is recognised as income in the consolidated statement of profit and
loss on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation
to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on
their nature.
m Government grants
Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be
received and all attaching conditions will be complied with.
Since the grant compensates the Group for expenses incurred, it is recognised in the consolidated statement of profit and loss as a
reduction from the respective expenses on a systematic basis in the periods in which such expenses are recognised.

256 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
n Contributed equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
o Goodwill
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised
for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the
fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has
correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired
over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve.
However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without
routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating
units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets
of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit
or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on
disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the
portion of the cash-generating unit retained. If the initial accounting for a business combination is incomplete by the end of the
reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting
is incomplete. Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or
liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date
that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period
adjustments. The measurement period does not exceed one year from the acquisition date.
p Financial instruments
i. Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and
financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss
(FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement
Financial assets: Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at
- amortised cost;
- Fair value through other comprehensive income (FVOCI) – debt investment;
- FVOCI – equity investment; or
- FVTPL
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Group changes its
business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
− the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
− the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

FINANCIAL SECTION | 257

Notes to the consolidated financial statements for the year ended 31 March 2017
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
− the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and
− the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI (designated as FVOCI – equity investment). This election is made on
an investment‑ by‑ investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes
all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets
the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
Financial assets: Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at an individual asset
level because this best reflects the way the business is managed and information is provided to management. The information
considered includes:
− the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether
management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching
the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows
through the sale of the assets;
– how the performance of the portfolio is evaluated and reported to the Group’s management;
– the risks that affect the performance of the business model (and the financial assets held within that business model) and
how those risks are managed;
– how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets
managed or the contractual cash flows collected; and
– the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations
about future sales activity.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured
at FVTPL.
Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is
defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well
as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment,
the Group considers:
− contingent events that would change the amount or timing of cash flows;
− terms that may adjust the contractual coupon rate, including variable interest rate features;
− prepayment and extension features; and
− terms that limit the Group’s claim to cash flows from specified assets (e.g. non‑ recourse features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include
reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a
significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that
substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include
reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the
prepayment feature is insignificant at initial recognition.

258 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
Financial assets: Subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest
or dividend income, are recognised in profit or loss. However, refer note 3(p)(v) for derivatives
designated as hedging instruments.
Financial assets at These assets are subsequently measured at amortised cost using the effective interest method.
amortised cost The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains
and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Debt investments at These assets are subsequently measured at fair value. Interest income under the effective interest
FVOCI method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other
net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI
are reclassified to profit or loss.
Equity investments at These assets are subsequently measured at fair value. Dividends are recognised as income in profit
FVOCI or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
The Group does not have financial assets measured at FVTPL or FVOCI.
Financial liabilities: Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held‑ for‑ trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other
financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit
or loss. See note 44 for financial liabilities designated as hedging instruments.
iii. Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks
and rewards of ownership and does not retain control of the financial asset.
If the Group enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Group also derecognises a financial liability when its terms are modified and the cash flows under the modified terms
are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The
difference between the carrying amount of the financial liability extinguished and the new financial liability with modified
terms is recognised in profit or loss.
iv. Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the
Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to
realise the asset and settle the liability simultaneously.
v. Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded
derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and
certain criteria are met.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and
changes therein are generally recognised in profit or loss. The Group designates certain derivatives as hedging instruments to
hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in interest rates.
At inception of designated hedging relationships, the Group documents the risk management objective and strategy for
undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging
instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset
each other.

FINANCIAL SECTION | 259

Notes to the consolidated financial statements for the year ended 31 March 2017
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the
derivative is recognised in OCI and accumulated in the other equity under ‘effective portion of cash flow hedges’. The effective
portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value
of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in
the fair value of the derivative is recognised immediately in profit or loss.
The amount accumulated in other equity is reclassified to profit or loss in the same period or periods during which the hedged
expected future cash flows affect profit or loss.
If a hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is
exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued,
the amount that has been accumulated in other equity remains there until, it is reclassified to profit or loss in the same period
or periods as the hedged expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other
equity are immediately reclassified to profit or loss.
vi. Compound financial instruments
Compound financial instruments are those instruments which contains both a financial liability component and an equity
component. The option to convert the financial instrument into equity shares of the Group would be with the holder of the
instrument.
The liability component of a compound financial instrument is initially recognised at the fair value of a similar liability that
does not have an equity conversion option. The equity component is initially recognised at the difference between the fair
value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable
transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured
subsequently.
Interest related to the financial liability is recognised in profit or loss (unless it qualifies for inclusion in the cost of an asset). In
case of conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised.
Recent accounting pronouncements
(a) Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments)
Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These
amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB)
to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the
Group from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising
from financing activities, to meet the disclosure requirement.
The Group is evaluating the requirements of the amendment and the effect on the financial statements.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-
settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled
awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market
performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest.
Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified
with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such
from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect
of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was
part of an equity settlement.
The Group does not have any cash settled awards and accordingly this is not applicable.

260 | COFFEE DAY | ANNUAL REPORT 2016-17

 Notes to the consolidated financial statements
4 PROPERTY, PLANT AND EQUIPMENT AND CAPITAL WORK-IN-PROGRESS
(Rs. in million)
Particulars Owned Leased Total Capital work-in- Total
Freehold Buildings Leasehold Plant and Office Furniture Computers Vehicles Coffee Leasehold (A) progress (refer
land (refer improvements equipment equipment and vending land (refer note iii) (B)
note i) fixtures machine note iv)
Cost or deemed cost:
Balance as at 1 April 2015 216.44 1,585.42 2,338.85 1,811.73 18.92 439.56 30.64 5.96 2,041.90 968.09 9,457.51 297.85 9,755.36
Additions (refer note ii) - 1.11 546.91 294.05 0.41 353.83 0.34 - 738.30 - 1,934.95 1,441.02 3,375.97
Reclassification (refer note v) - - 19.59 (58.57) 10.33 25.73 2.92 - - - - - -
Exchange differences on translation of - - 5.91 9.04 1.26 4.86 0.36 - - - 21.43 - 21.43
foreign operations (refer note vi)
Disposals/ capitalisation - - 34.26 48.19 0.08 3.28 0.10 1.47 - - 87.38 1,370.13 1,457.51
Balance as at 31 March 2016 216.44 1,586.53 2,877.00 2,008.06 30.84 820.70 34.16 4.49 2,780.20 968.09 11,326.51 368.74 11,695.25
Balance as at 1 April 2016 216.44 1,586.53 2,877.00 2,008.06 30.84 820.70 34.16 4.49 2,780.20 968.09 11,326.51 368.74 11,695.25
Additions (refer note ii) 0.99 0.49 339.16 187.66 0.89 263.24 3.37 - 973.26 - 1,769.06 1,558.27 3,327.33
Exchange differences on translation of - - (3.16) (6.01) (0.96) (3.10) (0.25) - - - (13.48) - (13.48)
foreign operations (refer note vi)
Disposals/ capitalisation - - 29.60 - - 12.82 - - - - 42.42 1,391.86 1,434.28
Balance as at 31 March 2017 217.43 1,587.02 3,183.40 2,189.71 30.77 1,068.02 37.28 4.49 3,753.46 968.09 13,039.67 535.15 13,574.82
Accumulated depreciation:
Balance as at 1 April 2015 - 30.03 83.92 326.02 14.85 88.38 26.87 3.29 - - 573.36 - 573.36
Depreciation for the year - 82.06 565.13 359.12 2.94 122.62 2.26 0.28 390.89 - 1,525.30 - 1,525.30
Reclassification (refer note v) - - 22.15 (54.99) 8.35 22.22 2.27 - - - - - -
Exchange differences on translation of - - 5.25 5.79 1.04 3.94 0.28 - - - 16.30 - 16.30
foreign operations (refer note vi)
Disposals - - 18.60 21.93 0.08 0.35 0.04 1.44 - - 42.44 - 42.44
Balance as at 31 March 2016 - 112.09 657.85 614.01 27.10 236.81 31.64 2.13 390.89 - 2,072.52 - 2,072.52
Balance as at 1 April 2016 - 112.09 657.85 614.01 27.10 236.81 31.64 2.13 390.89 - 2,072.52 - 2,072.52
Depreciation for the year - 81.87 585.71 333.93 2.50 164.11 1.91 0.48 460.13 - 1,630.64 - 1,630.64
Exchange differences on translation of - - (4.18) (3.66) (0.85) (2.26) (0.23) - - - (11.18) - (11.18)
foreign operations (refer note vi)
Disposals - - 26.59 - - 13.89 - - - - 40.48 - 40.48
Balance as at 31 March 2017 - 193.96 1,212.79 944.28 28.75 384.77 33.32 2.61 851.02 - 3,651.50 - 3,651.50
Carrying amount:
As at 1 April 2015 216.44 1,555.39 2,254.93 1,485.71 4.07 351.18 3.77 2.67 2,041.90 968.09 8,884.15 297.85 9,182.00
As at 31 March 2016 216.44 1,474.44 2,219.15 1,394.05 3.74 583.89 2.52 2.36 2,389.31 968.09 9,253.99 368.74 9,622.73
As at 31 March 2017 217.43 1,393.06 1,970.61 1,245.43 2.02 683.25 3.96 1.88 2,902.44 968.09 9,388.17 535.15 9,923.32

FINANCIAL SECTION | 261

Notes to the consolidated financial statements for the year ended 31 March 2017
Notes:
i) Includes building constructed on leasehold land.
ii) As per Ind AS 101, a first-time adopter may continue the policy adopted for accounting for exchange differences arising from
translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately
before the beginning of the first Ind AS financial reporting period as per the previous GAAP.
Accordingly, the Group has opted to avail the option as given in paragraph D13AA of Ind AS 101 - First-time Adoption of Indian
Accounting Standards and accordingly capitalised foreign exchange gain/ (loss) of Rs.24.82 million (31 March 2016: (Rs.159.82
million); 1 April 2015: (Rs.328.60 million)).
iii) Capital work in progress
Capital work in progress mainly comprises of upcoming cafes and roasting unit under construction.
iv) Finance leases
The carrying value of land held under finance leases as at 31 March 2017 was Rs.Rs.968.09 million (31 March 2016: Rs.968.09 million,
1 April 2015: Rs.968.09 million). The Company has taken land admeasuring 10.05 acres in Chickamangalur on lease for a period of 99
years on 1 April 1995. The Company has classified the lease as as a finance lease since it has an option to purchase the land at the
end of the lease period.
v) Represents reclassification of certain assets in the previous year from plant and machinery to other asset categories.
vi) Represents the effect of translation of assets held by foreign subsidiary companies.
vii) Security
Property, plant and equipment amounting to Rs.7,135.73 million as at 31 March 2017 (31 March 2016: Rs.6,741.92 million; 1 April
2015: Rs.6,327.31 million) has been pledged as security by the Group against loans taken from banks and financial institutions.
viii) Contractual obligations
Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities on account of cafés in the
course of opening amounting to Rs.23.23 million (March 2016: 132.74 million, April 2015: 203.18 million).
ix) Significant estimates
Property, plant and equipment represent a significant proportion of the asset base of the Group. The charge in respect of periodic
depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of
its life, if any. The useful lives and residual values of group's assets are determined by Management at the time the asset is acquired
and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well
as anticipation of future events, which may impact their life, such as changes in technology.

5 INTANGIBLE ASSETS
(Rs. in million)
Software Total
Cost or deemed cost:
Balance as at 1 April 2015 3.27 3.27
Additions 5.97 5.97
Exchange differences on translation of foreign operations 0.32 0.32
Disposals - -
Balance as at 31 March 2016 9.56 9.56
Balance as at 1 April 2016 9.56 9.56
Additions 81.00 81.00
Exchange differences on translation of foreign operations - -
Disposals - -
Balance as at 31 March 2017 90.56 90.56
Accumulated amortisation:
Balance as at 1 April 2015 1.95 1.95
Amortisation for the year 0.99 0.99
Exchange differences on translation of foreign operations 0.36 0.36
Disposals - -
Balance as at 31 March 2016 3.30 3.30

262 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
5 INTANGIBLE ASSETS (contd.)
(Rs. in million)
Software Total
Balance as at 1 April 2016 3.30 3.30
Amortisation for the year 2.01 2.01
Exchange differences on translation of foreign operations - -
Disposals - -
Balance as at 31 March 2017 5.31 5.31
Carrying amount:
As at 1 April 2015 1.32 1.32
As at 31 March 2016 6.26 6.26
As at 31 March 2017 85.25 85.25

6 GOODWILL
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Carrying amount at the beginning of the year 175.59 167.60
Exchange differences on translation of foreign operations (9.12) 7.99
Provision for impairment of goodwill (7.07) -
Carrying amount at the end of the year 159.40 175.59

For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent the lowest level within
the Group at which goodwill is monitored for internal management purposes, which is not higher than the Group’s operating segments.
The aggregate carrying amounts of goodwill allocated to each unit are as follows :-
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Production, procurement and export division - -
Retail operation:
- Café retail 149.01 158.13
- Coffee curing 10.39 10.39
- Coffee testing 7.07 7.07
Less: impairment of goodwill in coffee testing (7.07) -
159.40 175.59
Café retail:
The recoverable amount of this CGU is based on value in use calculations which require the use of assumptions. The calculations use
cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-
year period are extrapolated using the estimated growth rates stated below. These growth rates are consistent with forecasts included
in industry reports specific to the industry in which each CGU operates.
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions
represent management’s assessment of future trends in the relevant industries and have been based on historical data from both
external and internal sources.
Particulars As at
31 March 2017
Terminal value growth rate of revenue 2.00%
Terminal EBITDA as a % of revenue 26.40%
Discount rate 17.00%

Management has determined the values assigned to each of the above key assumptions as follows:
Assumption Approach used to determining values
Terminal value growth rate of This is the weighted average growth rate used to extrapolate revenue beyond the budget period.
revenue The rates are consistent with forecasts included in industry reports.
Pre-tax discount rate Reflect specific risks relating to the relevant segments and the countries in which they operate.
Terminal EBITDA as a % of revenue Operating EBITDA has been estimated based on expectations of future outcomes taking into
account past experience, adjusted for anticipated revenue growth.

FINANCIAL SECTION | 263

Notes to the consolidated financial statements for the year ended 31 March 2017
6 GOODWILL (contd.)
The estimated recoverable amount of the CGU exceeds its carrying amount by approximately Rs.25.29 million. Management has
identified that a reasonably possible change in these key assumptions could cause the carrying amount to exceed the recoverable
amount. The following table shows the amount by which these three assumptions would need to change individually for the estimated
recoverable amount to be equal to the carrying amount.
Particulars As at
31 March 2017
Terminal value growth rate of revenue 1.50%
Terminal EBITDA as a % of revenue 25.30%
Discount rate 17.30%
Coffee testing:
During the year ended 31 March 2017, the Group made a downward revision in the future profitability projection for the Coffee testing
division primarily due to a lowering of previous expectations. The Group assessed the aforementioned events and circumstances and
determined that it was more likely than not that the fair value of the Coffee testing unit was less than its carrying value. Accordingly,
the Group conducted the goodwill impairment tests using this new profitability projection and recalculated the implied fair value
of the goodwill of the reporting unit. As a result of this recalculation, the carrying value of the goodwill was determined to be zero.
Consequently, the entire amount of the goodwill related to Coffee testing, Rs.7.70 million, was impaired during the current year. The
impairment loss is included in other operating expense in the consolidated statements of profit and loss.

7 NON-CURRENT INVESTMENTS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Unquoted equity shares
Investment in Equity instruments:
(i) Investment in Joint venture company measured under equity
method (fully paid):
0.69 million (31 March 2016: 0.19, 1 April 2015: Nil) equity shares of 1.72 0.35 -
Coffee Day Schaerer Technologies Private Limited of Rs.10 each
1.72 0.35 -
Aggregate value of unquoted investments 1.72 0.35 -
Information about the Group's exposure to credit and market risks, and fair value measurement, is included in note 44.

8 LOANS
A Non-current loans
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Unsecured, considered good
Security deposit 780.54 698.12 626.12
780.54 698.12 626.12

B Current loans
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Unsecured, considered good
Security deposit 11.18 22.31 -
Staff advances 39.00 16.45 11.69
50.18 38.76 11.69

264 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
9 OTHER FINANCIAL ASSETS
A Other non-current financial assets
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Others
Fixed deposit accounts with banks* 75.50 144.94 86.90
Margin money deposits with banks 2.13 9.53 26.10
77.63 154.47 113.00
Includes Rs.75.50 million (31st March, 2016: Rs.109.05 million, 1 April 2015: Rs.75.50 million) given as security for loan availed by the
Group. These fixed deposits cannot be withdrawn by the Group within 12 months of Balance Sheet date.

B Other current financial assets

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Derivatives instruments at fair value through OCI
Cash flow hedges
- Interest rate swaps 6.55 - -
Export benefit receivable 31.07 75.73 90.40
Other advances 82.99 56.88 68.74
Interest accrued but not due 12.98 28.69 4.02
133.59 161.30 163.16

10 OTHER ASSETS
A Other non-current assets
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Capital advances 438.84 468.19 197.38
Advances other than capital advances:
- deposit with government authorities 10.37 1.57 1.30
- advance tax including tax deducted at source, net of provision for tax 71.28 74.28 41.34
- taxes paid under protest 69.18 46.68 38.10
- supplier advance 28.23 40.24 37.30
- deferred rent expense 206.89 224.81 220.30
- others 0.61 - -
825.40 855.77 535.72

B Other current financial assets

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Supplier advance 697.30 377.61 348.79
Balances with government authorities 30.24 32.20 16.65
Deferred rental expense 56.80 62.47 59.95
Prepaid expenses 16.81 8.91 5.08
Others 0.51 2.34 1.00
801.66 483.53 431.47

FINANCIAL SECTION | 265

Notes to the consolidated financial statements for the year ended 31 March 2017
11 INVENTORIES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Stock of raw coffee and packing material 490.78 190.72 134.92
Stock of perishables, consumables and merchandise 504.79 670.23 748.23
Finished goods of clean and roasted coffee 112.27 175.37 94.57
Work-in-progress 78.96 79.91 64.22
1,186.80 1,116.23 1,041.94
Carrying amount of inventories (included in above) pledged as 633.02 397.92 245.23
securities for borrowings (refer note 18)

12 TRADE RECEIVABLES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Trade receivables
Unsecured, considered good 1,545.83 1,279.85 1,204.17
Doubtful 40.00 20.00 -
1,585.83 1,299.85 1,204.17
Loss allowance
Unsecured, considered good
Doubtful (40.00) (20.00) -
1,545.83 1,279.85 1,204.17

All trade receivables are 'current'.

Of the above trade receivables from related parties are as below:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Total trade receivables from related parties 5.62 8.46 2.83
Loss allowance - - -
Net trade receivables 5.62 8.46 2.83
The Group's exposure to credit and currency risks, and loss allowances related to trade receivables is disclosed in note 44.

13 CASH AND CASH EQUIVALENTS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Balances with banks
- in current accounts 485.19 268.66 310.22
- in escrow accounts 19.05 34.94 23.21
- in fixed deposit accounts (original maturity less than 3 months) 1,600.77 2,262.95 1,139.90
Cash on hand 54.50 44.26 36.01
2,159.51 2,610.81 1,509.34

14 BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Balances with banks
- in fixed deposit accounts with banks* 52.09 1,537.32 57.10
-in margin money deposits with banks 7.92 128.20 37.50
60.01 1,665.52 94.60

*includes Rs.49.31 million (31 March 2016: Nil, 1 April 2015: Nil) given as security for loan and overdraft facility availed by the Group.

266 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
15 SHARE CAPITAL
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Authorised
2,260,890,413 (31 March 2016: 2,260,890,413, 1 April 2015: 2,260,890,413) 2,260.89 2,260.89 2,260.89
equity shares of Re 1 each
3,970,222 (31 March 2016: 3,970,222, 1 April 2015: 3,970,222) IFC 3.97 3.97 3.97
Subscribed "A" preference shares of Re 1 each
900,000 (31 March 2016: 900,000, 1 April 2015: 900,000) IFC Subscribed 90.00 90.00 90.00
"B" preference shares of Rs.100 each
2,354.86 2,354.86 2,354.86
Issued, subscribed and fully paid up
169,906,657 (31 March 2016: 168,675,747, 1 April 2015: 162,598,207) 169.91 168.68 162.60
equity shares of Re 1 each
169.91 168.68 162.60

(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the reporting year is as given below:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016
No of shares Amount No of shares Amount
Number of shares at the beginning of the year 168,675,747 168.68 162,598,207 162.60
Add: Shares issued against preference shares - - 5,462,085 5.46
Add: Shares issued against convertible debentures 1,230,910 1.23 615,455 0.62
Number of shares outstanding at the end of the year 169,906,657 169.91 168,675,747 168.68
(b) The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends
and the repayment of capital:
The Company has one class of equity shares having a par value of Re 1 per share. Each shareholder is eligible for one vote per share
held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General
Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining
assets of the Company after distribution of all preferential amounts if any, in proportion to their shareholding.
(c) Equity shareholders holding more than 5% of equity shares along with the number of equity shares held at the beginning and
at the end of the year isas given below:
Particulars As at 31 March 2017 As at 31 March 2016 As at 1 April 2015
% of No of % of No of % of No of
holding shares holding shares holding shares
Coffee Day Enterprises Limited, holding company 86.63% 147,192,442 87.26% 147,192,442 90.53% 147,192,442
Devardarshini Info Technologies Private Limited 4.83% 8,205,742 4.86% 8,205,742 5.05% 8,205,742

(d) The Company has not allotted any fully paid up equity shares by way of bonus shares nor has bought back any class of equity
shares during the period of five years immediately preceding the balance sheet date nor has issued shares for consideration
other than cash.
(e) Particulars of each class of shares held by holding, ultimate holding, subsidiaries or associates of the holding company or the
ultimate holding company:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Coffee Day Enterprises Limited, holding company 147.20 147.20 147.20

(f ) Shares reserved for issue under options and contracts/ commitments for sale of shares:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016
No of shares Amount No of shares Amount
For compulsorily convertible debentures of Rs.100 each* 19,755,822 19.76 19,755,822 19.76
* Refer Note 16(b)

FINANCIAL SECTION | 267

Notes to the consolidated financial statements for the year ended 31 March 2017
16 COMPULSORILY CONVERTIBLE DEBENTURES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
41,000,000 (31 March 2016: 41,000,000, 1 April 2015: Nil) compulsorily 4,100.00 4,100.00 -
convertible debentures of Rs.100 each fully paid up
4,100.00 4,100.00 -
(a) Reconciliation of the number of compulsorily convertible debentures outstanding at the beginning and at the end of the
reporting year:

(Rs. in million)
(except share data)
Particulars As at 31 March 2017 As at 31 March 2016
No of Amount No of Amount
debentures debentures
Number of compulsorily convertible debentures at the 41,000,000 4,100.00 - -
beginning of the year
Add: Debentures issued during the year - - 41,000,000 4,100.00
Number of compulsorily convertible debentures 41,000,000 4,100.00 41,000,000 4,100.00
outstanding at the end of the year
(b) The rights, preferences and restrictions attaching to compulsorily convertible debentures issued to Coffee Day Enterprises
Limited, holding company including restrictions if any:
The Company has one class of compulsorily convertible debentures of Rs.100 per debenture. These debentures are unsecured and
carry interest rate of 0.01% p.a. payable annually. The debentures shall be compulsorily converted into 19,755,822 equity shares
having a par value of Re 1 each after 4 years 9 months of issue date.
(c) Particulars of convertible debentures held by holding , ultimate holding, subsidiaries or associates of the holding company or
the ultimate holding company:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Coffee Day Enterprises Limited, holding company 4,100.00 4,100.00 -
(d) Debenture holders holding more than 5% of convertible debentures along with the number of debentures held at the
beginning and at the end of the year is as given below:
Particulars As at 31 March 2017 As at 31 March 2016
% of No of % of No of
holding debentures holding debentures
Coffee Day Enterprises Limited, holding company 100.00% 41,000,000 100.00% 41,000,000

17 OTHER EQUITY
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Capital reserve
At the commencement of the year 0.04 0.04
Add: Movement during the year (0.39) -
At the end of the year (0.35) 0.04
Shares options outstanding account
At the commencement of the year 51.33 24.34
Add: Additions during the year on account of stock option 12.71 26.99
At the end of the year 64.04 51.33
Securities premium
At the commencement of the year 7,468.59 7,165.87
Add: Additions during the year on conversion of preference shares and compulsorily 168.45 302.72
convertible debentures to equity shares
At the end of the year 7,637.04 7,468.59

268 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
17 OTHER EQUITY (contd.)
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Debenture redemption reserve
At the commencement of the year 125.10 83.40
Add: Transferred (to)/ from statement of profit and loss for the year (125.10) 41.70
At the end of the year - 125.10
General reserve
At the commencement of the year 106.50 106.50
Add: Movement during the year - -
At the end of the year 106.50 106.50
Retained earnings
At the commencement of the year 323.26 128.89
Add: Net profit for the year 263.63 242.32
Add: Transfer from/ (to) debenture redemption reserve 125.10 (41.70)
Dividends (3.75) (6.25)
At the end of the year 708.24 323.26
Foreign currency translation reserve
At the commencement of the year 17.73 18.95
Add/ (less): Exchange difference arising on translating the foreign operations, net of tax 9.68 (1.22)
At the end of the year 27.41 17.73
Cash flow hedges reserve
At the commencement of the year (5.02) (15.01)
Add: Movement during the year 4.78 9.99
At the end of the year (0.24) (5.02)
Actuarial gain or losses
At the commencement of the year (5.05) (0.45)
Add: Remeasurements of defined benefit plan actuarial gains/ (losses) (0.96) (4.60)
At the end of the year (6.01) (5.05)
8,536.63 8,082.48

Nature and purpose of other reserves:

Share options outstanding account:
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under stock
option plan.
Securities premium reserve:
Securities premium reserve is used to record the premium received on issue of shares by the Company. The reserve can be utilised
in accordance with the provision of Section 52(2) of Companies Act, 2013.
Debenture redemption reserve:
Debenture redemption reserve is created out of the profits which is available for payment of premium for the purpose of redemption
of debentures.
General reserve:
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general
reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items
included in general reserve will not be reclassified subsequently to profit and loss.
Foreign currency translation reserve:
The translation reserve comprise all foreign currency differences arising from the translation of the financial statements of foreign
operations, as well as the effective portion of any foreign currency differences arising from hedges of a net investment in a foreign
operation.
Cash flow hedges reserve
The effective portion of cash flow hedge represents the cumulative effective portion of gains or losses arising on changes in
fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising
on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the

FINANCIAL SECTION | 269

Notes to the consolidated financial statements for the year ended 31 March 2017
17 OTHER EQUITY (contd.)
heading of cash flow hedges reserve will be reclassified to profit and loss only when the hedged transaction affects the profit or
loss, or included as a basis adjustment to the non-financial hedged item.
Actuarial gain or losses
The cumulative gain or loss arising on the actuarial valuation on remeasurements of defined benefit plan is recognised and
accumulated under the heading of actuarial gains and losses reserve. Items included in actuarial gain or loss reserve will not be
reclassified subsequently to profit and loss.
Retained earnings
The cumulative gain or loss arising from the operations which is retained by the Group is recognised and accumulated under the
heading of retained earnings. At the end of the year, the profit after tax is transferred from the consolidated statement of profit and
loss to the retained earnings account.
18 BORROWINGS
A Non-current borrowings
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Secured:
Debentures
Nil (March 2016: Nil, April 2015: 496.58 million) 12.5% p.a. non - - 496.58
convertible redeemable debentures of Rs.1 million each issued to
ING Vysya Bank [refer note (i)]
Term loans
- from banks
- Rabobank International [refer note (ii)] 900.20 1,183.72 157.92
- Standard Chartered Bank [refer note (iii)] - 194.20 551.25
- Vehicle loans from banks [refer note (iv)] - 0.36 1.00
- Vijaya Bank [refer note (v)] - - 700.00
- from other parties
- Deutsche Investitions-Und Entwicklungsgesellschaft MBH - - 236.44
('DEG') [refer note (vi)]
Unsecured:
Compulsorily convertible debentures issued to FMO [refer note (vii)] 290.46 498.06 754.53
1,190.66 1,876.34 2,897.72
B Current borrowings
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Secured:
Loan repayable on demand
- from banks
- bank overdraft
- Karnataka Bank Limited [refer note (xii)] 0.83 0.43 50.20
- Oriental Bank of Commerce [refer note (xiii)] 3.34 - 10.70
- HSBC [refer note (xiv)] 100.00 107.03 100.00
- Vijaya Bank [refer note (xv)] 49.88 - -
- Kotak Mahindra Bank Ltd [refer note (xvi)] 140.57 - -
- packing credit loan from banks
- Karnataka Bank Limited [refer note (xii)] 165.93 244.44 45.00
- Oriental Bank of Commerce [refer note (xiii)] 207.10 239.10 363.30
- bill discounting facility from banks
- Karnataka Bank Limited [refer note (xii)] 210.88 173.72 340.50
- Oriental Bank of Commerce [refer note (xiii)] 123.69 99.92 73.80
Unsecured:
- bank overdraft
- Kotak Mahindra Bank Limited [refer note ((xvii))] - 141.44 127.71
- commercial papers issued to banks/ financial institution - 89.89 358.80
1,002.22 1,095.97 1,470.01
Information about the Group's exposure to interest rate, foreign currency and liquidity risks is included in note 44.

270 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
18 BORROWINGS (contd.)
Notes:
(i) Non convertible redeemable debentures issued to ING Vysya Bank - (amounting to: Nil (31 March 2016: Rs.498.45 million; 1
April 2015: Rs.496.58 million) - including current maturities of non-current borrowings
These debentures carry interest rate of 12.5% p.a. and is payable quarterly. These debentures are secured by -
§ Hypothecation of certain movable fixed assets of the Company and its related charge of cash flow.
§ Charge on cash flows from 100 cafe outlets.
§ Personal guarantee of Promoter.
These debentures are redeemable by way of bullet repayment at the end of 3 years from the date of issue (i.e., 20 November 2016).
(ii) From Rabobank International, Singapore and Rabobank International, Hong Kong - (amounting to: Rs.1,163.16 million (31
March 2016: Rs.1,493.93 million; 1 April 2015: Rs.399.59 million) - including current maturities of non-current borrowings
Secured by
§ Personal guarantee of the Promoter;
§ Charge on specific movable assets of the Company; and
§ First ranking equitable mortgages on the following immovable properties–
o Converted land of 2 estates with building located in Mangalore owned by Tanglin Developments Limited;
o Land and building located in Hassan, owned by Ganga Coffee Curing Works; and
o Land located in Palace Road, Bangalore owned by the Company with a carrying amount of Rs.79 million as at 31 March
2017 (31 March 2016: Rs.79 million, 1 April 2015: Rs.79 million).
§ Second ranking equitable mortgage on the land and buildings of the Corporate Headquarters of the Company located at Vittal
Mallya Road, Bangalore with a carrying amount of Rs.1,314 million as at 31 March 2017 (31 March 2016: Rs.1,390 million, 1 April
2015: Rs.1,465 million)
Loan from Rabobank International, Singapore carries a floating interest rate of LIBOR plus 4.15% margin p.a and is repayable in 12
biannual installments. The Group has entered into an interest rate swap agreement to pay fixed LIBOR of 1.67% (31 March 2016:
1.67%, 1 April 2015: 1.67%) and receive floating LIBOR rate for the above loans.
Loan from Rabobank International, Hong Kong carries a floating interest rate of LIBOR plus 3.5% margin p.a and is repayable in 8
biannual installments with effect from January 2017.
(iii) From Standard Chartered Bank - (amounting to: Rs.191.06 million (31 March 2016: Rs.586.60 million; 1 April 2015: Rs.922.84
million) - including current maturities of non-current borrowings
Secured by
§ Charge on all movable fixed assets of the Company;
§ Charge over all cash deposits with landlords for cafes and future cafes starting with Standard Chartered Bank facility.
§ First exclusive charge and irrecoverable rights of lien and set-off on the fixed deposit with Standard Chartered Bank with a
carrying value of Rs.Nil (31 March 2016: Rs.88.48 million, 1 April 2015: Rs.86.89 million)
The loan carries a floating interest rate of 3 months LIBOR plus 2.75% margin p.a. which is repayable in 17 equal quarterly
installments with effect from August 2013. The loan is denominated in foreign currency. The Company has entered into an
interest rate swap to pay fixed rate of interest of 4.46% (31 March 2016: 4.46%, 1 April 2015: 4.46%) and receive floating LIBOR
rate.
(iv) Vehicles loan - (amounting to: Rs.0.36 million (31 March 2016: Rs.1.04 million; 1 April 2015: Rs.1.70 million) - including current
maturities of non-current borrowings
Secured by hypothecation of vehicles.
This loan carries an interest rate within a range of 11.10% p.a. to 11.75% p.a. The principal amount has to be repaid in equal
installments over the period of loan in respect of each vehicle."
(v) From Vijaya Bank - (amounting to: Nil (31 March 2016: Rs.0.11 million; 1 April 2015: Rs.900.00 million) - including current
maturities of non-current borrowings
Secured by
§ First charge over specific fixed assets;

FINANCIAL SECTION | 271

Notes to the consolidated financial statements for the year ended 31 March 2017
18 BORROWINGS (contd.)
§ Personal guarantee of the Promoter.
§ Post dated cheques for entire loan amount with interest.
The loan carries interest rate of bank rate plus 2.25% term premium and is repayable in 20 equal quarterly installments with effect
from December 2014. The Company has prepaid the loan during the year.
(vi) From Deutsche Investitions-Und Entwicklungsgesellschaft MBH ('DEG') - (amounting to: Nil (31 March 2016: Rs.258.08 million;
1 April 2015: Rs.475.98 million) - including current maturities of non-current borrowings
Secured by
§ Personal guarantee of the Promoter;
§ Charge on specific movable assets of the Company; and
§ First ranking equitable mortgages on the following immovable properties–
o Converted land of 2 estates with building located in Mangalore owned by Tanglin Developments Limited;
o Land and building located in Hassan, owned by Ganga Coffee Curing Works; and
o Land located in Palace Road, Bangalore owned by the Company.
§ Second ranking equitable mortgage on the land and buildings of the Corporate Headquarters of the Company located at Vittal
Mallya Road, Bangalore.
Loan from DEG carries a floating interest rate of 3 months LIBOR plus 4.15% margin p.a and is repayable in 12 biannual installments
with effect from September 2011. The Company has entered into an interest rate swap agreement to pay fixed LIBOR of Nil (31
March 2016: 1.67%, 1 April 2015: 1.67%) and receive floating LIBOR rate for the above loans.
(vii) Compulsorily convertible debentures issued to FMO - (amounting to: Rs.460.22 million (31 March 2016: Rs.667.82 million; 1
April 2015: Rs.754.53 million) - including current maturities of non-current borrowings
These debentures carry interest rate of 14.5% p.a. payable bi-annually.
The debentures shall be converted into equity shares on earlier of the following dates:
- Mandatory conversion date i.e. date falling 10 years after the issue of debentures (i.e., 30 March 2010);
- Optional conversion date i.e. dates falling 66 months, 72 months, 78 months, 84 months, 90 months, 96 months, 102 months and
108 months from the closing date (i.e. 30 March 2010);
- In the event of IPO, the latest permissible date up to which the debentures can remain outstanding under local laws; and
- At the investors option upon the occurrence of an event of default.
The number of equity shares arising upon conversion will result in 2.85% of total issued and paid up equity share capital of the
Company on a fully diluted basis on the date of issue of debentures..
During the year, the holders sold 1,697,572 (31 March 2016: 848,786) Compulsorily Convertible Debentures (CCDs) to the promoter
V.G. Siddhartha, subsequent to which the CCDs were converted to 1,230,910 (31 March 2016: 615,455) equity shares of Re 1 each as
per the original terms of agreement.
(viii) IFC Subscribed "A" preference shares of Re 1 each -
The Company had issued Nil (31 March 2016: Nil; 1 April 2015: 3,970,222) IFC Subscribed ""A"" preference shares of Re 1 each to
shareholder. IFC Subscribed "A" preference shares carry a dividend rate of 0.001% p.a. The preference 'A' shares will participate with
the equity shares in any dividend declaration assuming a conversion ratio of 1:1. No dividend shall be paid on any other shares if the
preference dividend has not been allocated and paid to shareholders.
IFC had the option to seek redemption/ conversion of IFC Subscribed "A" preference shares.
Redemption - IFC at its option, can seek redemption of preference shares at any time on or after 31 December 2011. Redemption
price shall be determined to provide shareholders with an 18% compounded annual internal rate of return on the preference
shares, calculated in rupee terms.
Conversion – On conversion of IFC Subscribed ""A"" preference shares and IFC Subscribed ""B"" preference shares, shareholders shall
receive such number of equity shares in order to achieve 3.16% of the outstanding shares of the Company on a fully diluted basis
subject to achievement of certain performance parameters.

272 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
18 BORROWINGS (contd.)
During the previous year, the preference shareholders have exercised the conversion option by which the Company has converted
3,970,222 number of optionally convertible International Financial Corporation subscribed ""A"" preference share held by International
Financial Corporation (2,894,411 preference shares) and V. G. Siddhartha (1,075,811 preference shares) into 3,970,222 number of
equity shares and 900,000 number of optionally convertible International Financial Corporation subscribed "B" preference share
into 1,491,863 number of equity shares as per the terms and conditions specified in the agreement. Subsequent to the conversion
of the preference shares, V. G. Siddhartha has bought 4,386,274 shares held by International Financial Corporation.
(ix) IFC Subscribed "B" preference shares of Rs.100 each:-
The Company has issued Nil (31 March 2016: Nil; 1 April 2015: 900,000) IFC Subscribed "B" preference shares of Rs.100 each to
International Financial Corporation ('IFC'). IFC Subscribed "B" preference shares carry a dividend rate of 0.001% p.a. No dividend shall
be paid on any other shares if the preference dividend has not been allocated and paid to IFC for the IFC preference shares.
Redemption - IFC at its option, can seek redemption of preference shares at any time on or after 31 December 2011. Redemption
price shall be determined to provide IFC with an 18% compounded annual internal rate of return on the preference shares,
calculated in rupee terms.
Conversion – refer note 18(viii) for conversion in the previous year.
(x) Convertible / redeemable debentures in descending order of conversion/ redemption:-

(Rs. in million)
Particulars Convertible into Conversion/ Earliest date
maturity of conversion/
redemption
IFC Subscribed "A" preference shares Equity shares Conversion Refer (viii) above.
IFC Subscribed "B" preference shares Equity shares Conversion Refer (ix) above.
Non convertible redeemable debentures issued to ING Vysya Bank None Redemption Redeemed on 20
November 2016
Compulsorily convertible debentures issued to FMO Equity shares Conversion Refer (vii) above.

(xi) The aggregate amount of long-term borrowings secured by personal guarantee of Managing Director and relatives of
Managing Director amounts to Rs.1,170.00 million (31 March 2016: 2,264.48, 1 April 2015: 2,283.93).
(xii) From Karnataka Bank Limited (includes bank overdraft, bills discounting and packing credit loan account) –
Secured by
§ Hypothecation of stocks of coffee beans located at Chikmagalur;
§ Hypothecation of goods covered under export bills;
§ Further, the loan is collaterally secured by -
- Deposit of title deeds of a property belonging to a relative of Promoter;
- Personal guarantee of Promoter and relatives of Promoter; and
- Promissory note provided by the Company and the Promoter.
(xiii) From Oriental Bank of Commerce (includes bank overdraft, bills discounting and packing credit loan account) –
Secured by
§ Foreign documentary demand/ usance bill having maximum usance of 270 days accompanied by Airways bills/ Bill of Lading
and drawn under irrevocable letter of credit/ confirmed orders only towards bills purchased;
§ Hypothecation of stock of coffee at Hassan earmarked for export and advance paid to planters;
§ Equitable/ Registered mortgage of non agricultural industrial land in the name of Classic Coffee Curing Works at Chikmagalur; and
§ Personal guarantee of the Managing Director and relatives of the Managing Director.
(xiv) From HSBC (bank overdraft)–
Secured by
§ Exclusive charge over movable fixed assets, both present and future of the Company's outlets (café's) with asset cover of 1.75x.
§ Personal Guarantee of Managing Director.

FINANCIAL SECTION | 273

Notes to the consolidated financial statements for the year ended 31 March 2017
18 BORROWINGS (contd.)
(xv) From Vijaya bank (bank overdraft)–
Secured by
§ Hypothecation of stocks and receivables pertaining to vending division.
(xvi) From Kotak Mahindra Bank Limited (bank overdraft)–
Secured by
§ Exclusive charge over movable fixed assets of 100 café outlets and 2,146 vending machines.
(xvii) From Kotak Mahindra Bank Limited (bank overdraft)–
Secured by
§ Bank guarantee given by Coffee Day Global Limited amounting to Nil (31 March 2016: Rs.151.26 million (Euro 2 million); 1 April
2015: Rs.134.01 million (Euro 2 million)).
(xviii) There is no continuing default in the repayment of the principal loan and interest amounts with respect to the above loans.
(xix) The aggregate amount of current borrowings secured by personal guarantee of Managing Director and relatives of Managing
Director amounts to Rs.1002.23 million (31 March 2016: Rs.864.64 million, 1 April 2015: Rs.983.37 million).

19 NON-CURRENT FINANCIAL LIABILITIES

A. Other non-current financial liabilities
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Others
- deposits from customers 371.80 276.16 227.68
- other payables 0.95 - -
- derivative liability - - 23.00
372.75 276.16 250.68

B. Other current financial liabilities

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Current maturities of long-term debt*
- debentures
- ING Vysya Bank - 498.45 -
- Compulsorily convertible debentures issued to FMO 169.76 169.76 -
- from banks
- Rabobank International 262.96 310.21 241.67
- Standard Chartered Bank 191.06 392.40 371.59
- Vehicle loans from banks 0.36 0.68 0.70
- Vijaya Bank - 0.11 200.00
- from other parties
- Deutsche Investitions-Und Entwicklungsgesellschaft MBH ('DEG') - 258.08 239.54
- Nil (31 March 2016: Nil, 1 April 2015: 3,970,222) IFC Subscribed - - 9.46
"A" preference shares of Re 1 each [refer note 8 (viii)]
- Nil (31 March 2016: Nil, 1 April 2015: 900,000) IFC Subscribed - - 214.44
"B" preference shares of Rs.100 each [refer note 8 (ix)]
Interest accrued but not due on borrowings 34.86 47.97 57.60
Derivatives not designated as hedge
- foreign exchange forward contracts - 1.82 0.30
Others
- accrued salaries and benefits 132.30 116.88 85.70
- creditors for expenses 156.34 222.68 213.53
- creditors for capital goods 85.50 111.88 120.90
- book overdraft 17.85 8.38 1.60
- deposits from customers 387.77 396.32 356.30
1,438.76 2,535.62 2,113.33
* The details of interest rate, repayment terms, nature and value of securities furnished and guarantees given are disclosed under note 18.
274 | COFFEE DAY | ANNUAL REPORT 2016-17
Notes to the consolidated financial statements for the year ended 31 March 2017
20 PROVISION
A Non-current provision
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Provision for employee benefits
- Gratuity [Refer Note 43] 16.62 16.10 3.62
16.62 16.10 3.62
B Current provision
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Provision for employee benefits
- Gratuity (Refer Note 43) 6.90 7.12 6.32
- Compensated Absence 15.57 13.79 7.31
Others - 1.36 -
22.47 22.27 13.63

(i) Movements in provision:

(Rs. in million)
Particulars Gratuity Compensated
absences
Balance at 1 April 2016 23.22 13.79
Additional provision recognised 4.89 1.78
Reduction arising from payments (4.59) -
Balance at 31 March 2017 23.52 15.57

21 OTHER LIABILITIES
A Other non-current liabilities
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Rent equalisation reserve 69.17 44.97 36.51
Financial guarantee obligation 3.80 6.63 2.92
72.97 51.60 39.43
B Other current liabilities
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Statutory dues 115.66 85.74 91.39
Rent equalisation reserve 10.83 8.15 6.53
Others
- advance payments towards unexpired gift vouchers 6.13 3.86 12.80
- advance from customers 282.73 0.07 0.05
- subsidy advance (refer note 38) 2.86 38.34 25.00
418.21 136.16 135.77

22 TRADE PAYABLES
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Trade payables to related parties 145.66 133.09 40.88
Other trade payables 140.56 275.73 495.88
286.22 408.82 536.76
All trade payables are 'current'.
The Group's exposure to currency and liquidity risks related to trade payables is disclosed in Note 44.

FINANCIAL SECTION | 275

Notes to the consolidated financial statements for the year ended 31 March 2017
22 TRADE PAYABLES (contd.)
Dues to Micro, small and medium enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that
the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number
as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31
March 2017 has been made in the financial statements based on information received and available with the Group. The Group has not
received any claim for interest from any supplier under the said Act. Further in view of the Management, the impact of interest, if any,
that may be payable in accordance with the provisions of the Act is not expected to be material.
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
The principal amount and the interest due thereon remaining unpaid to any
supplier as at the end of each accounting year;
(a) (i) Principal - - -
(ii) Interest - - -
(b) The amount of interest paid by the Group in terms of Section 16 of the
Micro, Small and Medium Enterprises Development Act, 2006, along with the
amounts of the payment made to the supplier beyond the appointed day
during the year*;
(i) Interest - - -
(ii) Payment - - -
(c) The amount of interest due and payable for the period of delay in making - - -
payment (which have been paid but beyond the appointed day during the
year) but without adding the interest specified under the Micro, Small and
Medium Enterprises Development Act, 2006
(d) The amount of interest accrued and remaining unpaid at the end of the year - - -
(e) The amount of further interest remaining due and payable even in the - - -
succeeding years, until such date when the interest dues above are actually
paid to the small enterprise, for the purpose of disallowance of a deductible
expenditure under section 23 of the Micro, Small and Medium Enterprises
Development Act, 2006
* No interest has been paid by the Group during the year.

23 CURRENT TAX LIABILITIES, NET

Particulars As at As at
31 March 2017 31 March 2016
Opening balance 148.78 14.15
Add: Current tax payable for the year 274.57 178.22
Less: Tax paid during the year (168.66) (43.59)
Closing balance 254.69 148.78

24 REVENUE FROM OPERATIONS

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Sale of products
- Sale of coffee beans 4,065.26 3,693.64
- Sale of food, beverages and other items 11,775.74 10,211.70
- Sale of merchandise items 624.16 633.69
Service income 807.80 701.82
Other operating revenue
- Sale of import entitlements 104.76 89.59
- Advertisement income 300.09 225.40
- Gain/ (loss) from commodity futures 50.08 (36.09)
Less: quality claims (3.81) (1.66)
Less: sales tax (1,200.04) (1,069.50)
Less: service tax (464.52) (388.06)
Less: trade discounts (704.86) (360.81)
15,354.66 13,699.72

276 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
25 OTHER INCOME
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Interest income 243.01 198.73
Rental income 22.47 21.46
Commission income 6.58 2.54
Gain from forex hedging 1.05 6.16
Non-redemption of gift vouchers - 1.95
Others 10.54 21.03
283.65 251.87

26 COST OF MATERIALS CONSUMED

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Opening stock of raw coffee, packing materials, perishables, consumables and 860.95 883.15
merchandise
Purchase of raw materials and packing materials
- Purchase of coffee beans 3,512.21 3,270.17
- Purchase of perishables, consumables and packing materials 3,668.86 2,951.98
- Purchase of merchandise items 99.86 128.81
Closing stock of raw coffee, packing materials, perishables, consumables and (995.57) (860.95)
merchandise
7,146.31 6,373.16

27 CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
(a) Opening stock
Finished goods 175.37 94.57
Work-in-progress 79.91 64.22
255.28 158.79
(b) Closing stock
Finished goods 112.27 175.37
Work-in-progress 78.96 79.91
191.23 255.28
64.05 (96.49)

28 EMPLOYEE BENEFITS EXPENSE

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Salaries and wages 1,837.68 1,525.07
Contribution to provident and other funds 188.35 156.32
Share based payments to employees 12.71 26.99
Staff welfare expenses 43.60 27.85
2,082.34 1,736.23

29 FINANCE COSTS
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Interest expense 447.56 445.11
Other borrowing costs 31.39 47.95
478.95 493.06

FINANCIAL SECTION | 277

Notes to the consolidated financial statements for the year ended 31 March 2017
30 DEPRECIATION AND AMORTIZATION EXPENSE
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Depreciation of property, plant and equipment (Refer note 4) 1,630.64 1,525.30
Amortization of intangible assets (Refer note 5) 2.01 0.99
1,632.65 1,526.29
31 OTHER EXPENSES
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Rent 1,950.13 1,649.45
Transportation, traveling and conveyance 595.91 363.89
Power and fuel 265.78 293.14
Café housekeeping and maintenance 150.95 173.22
Subcontracting charges 132.56 127.34
Brokerage and commission 116.71 149.21
Grinding and curing charges 80.17 72.35
Repairs and maintenance
- plant and machinery 48.26 126.29
- buildings 0.99 0.25
- others 17.78 20.21
Advertising and sales promotion 48.30 99.30
Legal and professional fees 42.29 52.00
Rates and taxes 36.33 44.52
Communication expenses 33.19 46.71
Freight and handling charges 40.20 86.25
Office maintenance and utilities 21.26 24.50
Provision for doubtful debts 20.00 20.00
Printing and stationery 11.21 13.72
Insurance 13.64 8.30
Loss on sale of assets, net 3.01 39.66
Foreign exchange loss, net 0.02 0.03
Provision for impairment of goodwill (refer note 6) 7.07 -
Miscellaneous 41.05 46.43
3,676.81 3,456.77

32 INCOME TAX
A Major components of income tax expense for the years ended 31 March 2017 and 31 March 2016:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Current income tax:
Current income tax charge 250.14 178.22
Adjustments in respect of current income tax of previous years 24.43 -
274.57 178.22
Deferred tax:
Relating to origination and reversal of temporary differences (44.08) (28.22)
(44.08) (28.22)
Income tax expense reported in the statement of profit or loss 230.49 150.00

B Income tax recognised in other comprehensive income

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Effective portion of gains and losses on hedging (2.53) (5.28)
Net (gain)/loss on remeasurement of defined benefit liability/ (assets) (0.05) 2.15
Income tax charged to OCI (2.58) (3.13)

278 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
32 INCOME TAX
C. Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Profit before tax 497.66 393.93
Current-year losses of subsidiary companies 65.68 68.80
Adjusted profit before tax 563.34 462.73
Tax at the Indian tax rate of 34.608% (31 March 2016: 34.608%) 194.96 160.14
Difference in tax rate on account of tax paid by subsidiary company under MAT - (11.69)
@ 19.06%
Impact non-deductible expenses for tax purposes 11.10 1.55
Adjustments in respect of current income tax of previous years 24.43 -
Income tax expense 230.49 150.00

D Deferred tax
Deferred tax relates to the following:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Deferred tax assets/ (liabilities)
Short/ (excess) of depreciation allowed under Income Tax Act, 1961 14.14 (26.01) (38.14)
over depreciation as per books
Borrowings 9.99 20.38 21.26
Security deposit 15.92 14.91 13.27
Employee benefits 14.00 12.42 9.60
Rent straight lining 23.23 18.39 10.65
Provision for doubtful debts 13.84 6.92 -
Effective portion of gains on hedging instruments in cash flow 0.15 2.68 7.96
hedges
Minimum Alternate Tax Credit entitlement - - 43.50
91.27 49.69 68.10

E Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable
profit will be available against which the Group can use the benefits therefrom:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Deductible temporary differences 24.59 15.59
Impact of tax losses 7.78 5.26
* The deductible temporary differences do not expire under current tax legislation.
33 CONTINGENT LIABILITIES, COMMITMENTS AND CONTINGENT ASSETS
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Contingent liabilities:
Claims against the Group not acknowledged as debt in respect to income 656.43 320.02 104.56
tax matter, service tax and value added tax matters (refer note i and ii)
Commitments:
Estimated amount of contracts remaining to be executed on capital 70.50 132.74 203.18
account (net of advances) and not provided for (refer note iii)
Notes:
i) Pending resolution of the respective proceedings, it is not practicable for the Group to estimate the timings of cash outflows, if any,
in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
ii) The Group has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required
and disclosed as contingent liabilities where applicable, in its financial statements. Based on the advice from the Group's legal
counsel, management does not expect the outcome of these proceedings to have a materially adverse effect on its financial
position. The Group does not expect any reimbursements in respect of the above contingent liabilities.

FINANCIAL SECTION | 279

Notes to the consolidated financial statements for the year ended 31 March 2017
33 CONTINGENT LIABILITIES, COMMITMENTS AND CONTINGENT ASSETS (contd.)

iii) As at 31 March 2017, the Group is committed to spend Rs.23.23 million (31 March 2016:Rs.132.74 million; 1 April 2015: Rs.203.18
million) under a contract to purchase property, plant and equipment.

34 SHARE-BASED PAYMENTS
A. Description of share-based payment arrangements:
Certain employees of the Group have received employee stock options (‘ESOP’) on the shares granted by a trust sponsored by
the promoters of the Group. The Employee Option Plan is designed to reward the employees.
The promoters of the Group have reserved 6.2 million equity shares of the Group with ABC Employees’ Welfare Trust (‘the Trust’)
for issuance to eligible employees, under ESOP plans (‘Plan A and Plan B’).
The Plans are administered by an ESOP Advisory Committee (‘the Committee’) constituted by the Board of the Company.
Under the plans, the options will be issued to employees at an exercise price, which may be decided by the committee from
time to time. The equity shares covered under these options vest over a period of thirty six months for Plan A and eighteen
months for Plan B from the date of grant. The exercise period of the options is 3 months from the date of vesting.
The movements in the options under the plans during the year ended 31 March 2017 and 31 March 2016 is set out below:
The terms and conditions related to the grant of the share options are as follows:
Plan A:
Particulars
Employees entitled All Employees in permanent employment except the Promoters and Directors
Number of options 6.2 million shares have been reserved for issue under employee stock option scheme (Plan A and
Plan B).
Vesting conditions 25% of the options will expire at the end of the 1st and 2nd year and the remaining 50% will expire
at the end of the third year.
Contractual life of years The contractual life of the options are 39 months.

Plan B:
Particulars
Employees entitled All Employees in permanent employment except the Promoters and Directors
Number of options 6.2 million shares have been reserved for issue under employee stock option scheme (Plan A and
Plan B).
Vesting conditions 100% of the Grants vests at the end of 18 months from Grant date.
Contractual life of years The contractual life of the options are 21 months.

B. Measurement of fair values

The fair value at the grant date of options granted during the year ended 31 March 2017 was Rs.Nil per option (31 March 2016:
Rs.20.81). The fair value at the grant date is determined using the Black Scholes model which takes into account the exercise
price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
The inputs used in the measurement of the grant date fair values of the plan are as follows:
Plan A:
Ind AS 102 requires the share-based plan to be measured at fair value. However, Ind AS 101 gives an optional exemption to
measure the equity settled share-based plan at intrinsic value for options which were vested as on the transition date. For
options vested before 1 April 2015, the Group has availed the exemption and accounted the same at intrinsic value. For options
unvested as at 1 April 2015, the Group has measured the options at fair value. However, there are no outstanding options as at
31 March 2017 as all the options that were granted have been exercised or forfeited during the year. The fair value at the grant
date of options granted during the previous year ended 31 March 2016 was Rs.25.58 per option. The fair value at the grant date
is determined using the Black Scholes model which takes into account the exercise price, the term of the option, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest
rate for the term of the option.

280 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
34 SHARE-BASED PAYMENTS (contd.)
The inputs used in the measurement of thegrant date fair values of the plan are as follows:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Vesting period - 36 months
Exercise price - 30
Expected term (years) - 3.25
Fair value of share price at grant date - 44.71
Expected price volatility of shares - 54.49%
Expected dividend yield - 0%
Risk free interest rate - 6.58%

Plan B:
There are no outstanding options as at 31 March 2017 as all the options that were granted have been forfeited during the year.
The fair value at the grant date of options granted during the previous year ended 31 March 2016 was Rs.86.94 per option. The
fair value at the grant date is determined using the Black Scholes model which takes into account the exercise price, the term
of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option.
The inputs used in the measurement of the grant date fair values of the plan are as follows:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Vesting period - 18 months
Exercise price - 150
Expected term (years) - 1.75
Fair value of share price at grant date - 199.42
Expected price volatility of shares - 54.49%
Expected dividend yield - 0%
Risk free interest rate - 7.00%

- The expected volatility is a measure of the amount by which a price is expected to fluctuate during a period. The measure of
volatility used in option pricing models is the annualised standard deviation of the continuously compounded rates of return
on the share over a period of time.
- As per Ind AS 102, the risk-free interest rate is the implied yield currently available on zero-coupon government issues of the
country in whose currency the exercise price is expressed, with a remaining term equal to the expected term of the option
being valued (based on the option’s remaining contractual life and taking into account the effects of expected early exercise).
- The expected term of an option is the length of the period over which the option is expected to be unexercised.
C. Reconciliation of outstanding share option
The movements in the options under the plans during the year ended 31 March 2017 and 31 March 2016 is set out below:
Plan A: Rs. except per share data
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Weighted Shares arising Weighted Shares arising
average price out of options average price out of options
Outstanding at the beginning of the year 22.00 136,187 22.00 136,187
Granted during the year - - - -
Forfeitures during the year 30.00 (115,087) - -
Exercised during the year 30.00 (21,100) - -
Outstanding at the end of the year - - 22.00 136,187
Exercisable at the end of the year - - - 99,125
The trust had 136,187 shares outstanding at the end of the year ended 31 March 2016 having an exercise price of Rs.30. The
weighted average fair value of the above mentioned options estimated on the grant dates using the Black-Scholes-Merton
model is Rs.25.58. The options outstanding as at 31 March 2017 had a weighted average remaining contractual life of Nil years
(Previous year: 1 year).

FINANCIAL SECTION | 281

Notes to the consolidated financial statements for the year ended 31 March 2017
34 SHARE-BASED PAYMENTS (contd.)
C Reconciliation of outstanding share option (contd.)
Plan B:
Rs. except per share data
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Weighted Shares arising Weighted Shares arising
average price out of options average price out of options
Outstanding at the beginning of the year 150.00 822,000.00 - -
Granted during the year - - 150.00 822,000
Forfeitures during the year 150.00 822,000.00 - -
Exercised during the year - - - -
Outstanding at the end of the year - - 150.00 822,000
Exercisable at the end of the year - - - -

The trust has granted 822,000 shares during the previous year at an exercise price of Rs.150. The weighted average fair value
of the above mentioned options estimated on the grant dates using the Black-Scholes-Merton model is Rs.86.94. The options
outstanding as at 31 March 2017 had a weighted average remaining contractual life of Nil years (Previous year: 1 year).
Share options outstanding at the end of the year have the following expiry date and exercise price:
(Rs. in million)
(except share data)
Type of arrangement Grant Exercise Number of Fair value as Expense Outstanding
Date price options granted at 31 March recognized liability as at
(outstanding as 2017 during the the year end
at the year end) year
Plan A 1-Aug-12 30.00 - - 2.31 7.07
Plan B 1-Oct-15 150.00 - - 10.40 56.97
Total 12.71 64.04

35 EARNINGS PER SHARE (EPS)

(i) Reconciliation of earnings used in calculating earnings pershare:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Total comprehensive income as per statement of profit and loss 277.13 246.49
Net profit for basic earnings per share 277.13 246.49
Net profit for diluted earnings per share 277.13 246.49
(ii) Reconciliation of basic and diluted shares used in computing earnings per share:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Number of equity shares at the beginning of the year 168,675,747 162,598,207
Add: Weighted average number of equity shares issued during the year:
- Due to conversion of convertible preference shares - 2,095,046
- Due to conversion of debentures 628,944 70,819
Number of weighted average equity shares considered for calculation 169,304,691 164,764,072
of basic earnings per share
Add: Dilutive effect of convertible debentures 19,755,822 19,755,822
Number of weighted average equity shares considered for calculation 189,060,513 184,519,894
of diluted earnings per share
For the year ended 31 March 2017, 4,243,930 (31 March 2016: 5,941,502) compulsorily convertible debentures issued to FMO
which are convertible into 3,077,275 (31 March 2016: 4,308,185) equity shares were excluded from the calculation of diluted
weighted average number of equity shares as their effect would have been anti-dilutive.
(iii) Earnings per share:
From continuing operations
- Basic 1.64 1.50
- Diluted 1.47 1.34

282 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
36 LEASES
(i) Operating lease
Assets given on operating lease:
The Group earns its facility rental income from premises sub-leased under operating lease which is recognized in the statement
of profit and loss on a straight-line basis over the term of the lease. Total lease rental income recognised in the statement of
profit and loss for the year is:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Cancellable 22.47 21.46
22.47 21.46

Assets taken on operating lease:

The Group leases office premises, residential facilities and cafe spaces under operating lease agreements. The Group intends to
renew such leases in the normal course of its business. Total rental expense under operating leases was Rs.1,950.13 million and
Rs.1,649.45 million for the year ended 31 March 2017 and 31 March 2016 respectively.
Future minimum lease payments
The future minimum lease payments to be made under non-cancellable operating leases as on 31 March 2017, 31 March 2016
and 1 April 2015 are as follows:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Payable in less than one year 1,567.06 1,273.67 1,098.03
Payable between one and five years 4,817.61 4,858.30 3,691.37
Payable after five years 1,875.57 1,690.71 1,921.01
37 SEGMENT INFORMATION
Based on the "management approach" as defined in Ind AS 108 - Operating Segments, Managing Director of the Group have been
identified as the Chief Operating Decision Maker (CODM). The Chief Operating Decision Maker evaluates the Group performance
and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information
has been presented along these business segments viz. Production, procurement and export division and retail operations as its
operating segments.
The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and
expenditure in individual segments, and are as set out in the significant policies.
Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Group,
therefore, believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are
separately disclosed as unallocated.
Unallocable expenses comprises of finance cost and certain other corporate costs. Unallocable income comprises of interest
income and other income.
(i) Segment revenue:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Revenue from external customers:
Production, procurement and export division 3,494.36 2,983.78
Retail operation 14,233.53 12,535.97
Inter-segment revenue:
Production, procurement and export division 382.82 383.48
Retail operation 61.99 12.60
Total segment revenue 18,172.70 15,915.83
Reconciling items:
- taxes and discounts on sales (2,373.23) (1,820.03)
- inter-segment revenue (444.81) (396.08)
Total revenue as per statement of profit and loss 15,354.66 13,699.72

FINANCIAL SECTION | 283

Notes to the consolidated financial statements for the year ended 31 March 2017
37 SEGMENT INFORMATION (contd.)
(ii) Segment Results:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Production, procurement and export division 53.23 52.56
Retail operation 2,556.03 2,360.72
Total segment results 2,609.26 2,413.28
Reconciling items:
- depreciation (1,632.65) (1,526.29)
- finance cost (478.95) (493.06)
- share of loss of joint ventures accounted for by the equity method (3.54) (1.61)
Profit before tax as per statement of profit and loss 494.12 392.32
Income tax expense (230.49) (150.00)
Profit after tax as per statement of profit and loss 263.63 242.32
Note:
Since, the information about segment assets and segment liabilities are not provided to the CODM for his review, the Group has not
presented such information as a part of its segment disclosure which is in accordance with the requirements of Ind AS 108.
Geographical information
(i) Segment Revenue:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Revenue from external customers:
- India 12,488.18 11,245.96
- Europe 2,680.82 2,173.20
- Other foreign countries 185.66 280.56
Total segment revenue 15,354.66 13,699.72

(ii) Segment non-current assets

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
- India 10,966.90 10,628.62 9,865.05
- Europe 26.47 31.73 21.59
Total 10,993.37 10,660.35 9,886.64
Reconciling items:
- deferred tax assets 91.27 49.69 68.10
- non-current financial assets 859.89 852.94 739.12
Total non-current assets 11,944.53 11,562.98 10,693.86

Revenue from major products and services

The Group's revenue from continuing operations from its major products or services are as follows:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Sale of coffee beans 4,065.26 3,693.64
Sale of food, beverages and other items 11,775.74 10,211.70
Sale of merchandise items 624.16 633.69
Service income from vending machines 807.80 701.82
Information about major customers
The Group does not derive more than 10% of it's revenues from any single customer.
38 GOVERNMENT GRANT
The Group is entitled to receive grant from various State Governments under Deen Dayal Upadhyaya Grameen Kaushalya Yojana
(erstwhile Aajeevika Skills Development Programme) launched by the Ministry of Rural Development (MoRD), Government of India,
towards providing training facilities. As at 31 March 2017, the Group has received cumulatively, total grant of Rs.77.05 million (31
March 2016 Rs.68.62 million, 1 April 2015: Rs.31.95 million).

284 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
38 GOVERNMENT GRANT (contd.)
The Group has incurred a cost of Rs.49.52 million for the year ended 31 March 2017 (Previous year: Rs.23.34 million) under various
heads. The said expenses has been reduced from the proceeds of this grant.
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Staff welfare expenses 23.04 9.87
Rent 18.32 7.44
Legal and professional 2.05 3.45
Transportation, traveling and conveyance 3.54 1.11
Repairs and maintenance - buildings 1.28 1.04
Power and fuel 0.72 0.39
Printing and stationery 0.57 0.04
49.52 23.34

39 SPECIFIED BANK NOTE

During the year, the Company and its subsidiary companies incorporated in India, had Specified Bank Notes (SBNs) or other
denomination notes as defined in the MCA notification, G.S.R. 308(E), dated 31 March 2017. The details of SBNs held and transacted
during the period from 8 November 2016 to 30 December 2016, the denomination‑wise SBNs and other notes as per the notification
are as follows:
(Rs. in million)
Particulars Specified bank notes Other denomination Total
notes
Closing cash in hand as on 8 November 2016 51.65 7.13 58.78
Add: Permitted receipts - 401.89 401.89
Less: Amount deposited in banks (51.65) (348.92) (400.57)
Closing cash in hand as on 30 December 2016 - 60.10 60.10
For the purposes of this note, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the
Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8 November 2016.
40 INTEREST IN OTHER ENTITIES
A. Subsidiary companies:
The consolidated financial statements of the Group includes subsidiary companies listed in the table below:
(Rs. in million)
Name of the entity Country of Principal Ownership interest Ownership interest held by
incorporation activities held by the group (%) non-controlling interest (%)
31 March 31 March 1 April 31 March 31 March 1 April
2017 2016 2015 2017 2016 2015
Amalgamated Holdings Limited India Retail 100.00 100.00 100.00 - - -
Ganga Coffee Curing Works Limited India Coffee 100.00 100.00 100.00 - - -
Curing
A.N Coffeeday International Limited Cyprus Investment 100.00 100.00 100.00 - - -
Coffee Day Properties (India) Private India Retail 100.00 100.00 100.00 - - -
Limited
Classic Coffee Curing Works India Coffee 99.00 99.00 99.00 1.00 1.00 1.00
Curing
Coffeelab Limited India Retail 100.00 100.00 100.00 - - -
Coffee Day Gastronomie Und Austria Retail 100.00 100.00 100.00 - - -
Kaffeehandles GmbH
Coffee Day CZ a.s Czech Retail 100.00 100.00 100.00 - - -
Republic

FINANCIAL SECTION | 285

Notes to the consolidated financial statements for the year ended 31 March 2017
40 INTEREST IN OTHER ENTITIES (contd.)
B. Joint venture company
(i) Coffee Day Schaerer Technologies Private Limited ("CDSTPL") is a joint venture company of the Group with 49% ownership
interest as at 31 March 2017 which in the opinion of the directors is material. CDSTPL manufactures and sells automatic and
semi-automatic coffee vending machines, its components and spare parts.
(Rs. in million)
Name of the entity Country of % of Relationship Accounting Carrying amount
incorporation ownership method 31 March 31 March 1 April
interest 2017 2016 2015
Coffee Day Schaerer Technologies Private India 49.00 Joint venture Equity 1.72 0.35 -
Limited method

(ii) Summarised financial information about the joint venture company and the carrying amount of the Group’s interest in the
joint venture company:
(Rs. in million)
Summarised balance sheet Coffee Day Schaerer Technologies Private Limited
As at 31 March 2017 As at 31 March 2016 As at 1 April 2015
Current assets:
- Cash and cash equivalents 2.35 0.21 -
- Other current assets 35.96 3.51 -
Total 38.31 3.72 -
Non-current assets 4.87 3.48 -
Current liabilities:
- Financial liabilities (excluding trade payables) 14.71 3.18 -
- Trade payables 23.84 3.19
- Other current liabilities 1.06 0.11 -
Total 39.61 6.48 -
Non-current liabilities:
- Provisions 0.06 - -
Total 0.06 - -
Net assets 3.51 0.72 -
Group’s share of net assets (49%) 1.72 0.35
Carrying amount of interest in joint venture 1.72 0.35

(Rs. in million)
Summarised statement of profit and loss Coffee Day Schaerer Technologies
Private Limited
For the year ended For the year ended
31 March 2017 31 March 2016
Revenue 18.73 -
Total income 18.73 -
Cost of materials consumed 15.19 -
Changes in inventories of finished goods and work-in-progress (2.69) -
Employee benefits expense 2.55 -
Depreciation and amortisation 0.66 0.03
Other expenses 10.24 3.25
Total expenses 25.95 3.28
Loss from operations for the year (7.22) (3.28)
Other comprehensive income - -
Total comprehensive income (7.22) (3.28)
Group’s share of total comprehensive income (49%) (3.54) (1.61)

286 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
41 CONSOLIDATED FINANCIAL INFORMATION
Additional information required to be disclosed pursuant to paragraph 2 of Division II of Schedule III to the Companies Act, 2013
- 'General instructions for the preparation of consolidated financial statements' as at and for the year ended 31 March 2017 is as
follows:
(Rs. in million)
Name of the entity in the group Net Assets Share in profit or loss Share in other Share in total
comprehensive income comprehensive income
As % of Amount As % of Amount As % of Amount As % of Amount
consolidated consolidated consolidated consolidated
net assets profit/ (loss) other total
comprehensive comprehensive
income income
Parent company
Coffee Day Global Limited 96.36% 12,340.99 121.14% 319.26 35.80% 4.87 116.96% 324.13
Indian subsidiaries
Amalgamated Holdings 1.82% 233.40 5.15% 13.58 -7.01% (0.95) 4.56% 12.63
Limited
Ganga Coffee Curing Works 0.23% 29.52 -0.97% (2.56) 0.00% - -0.92% (2.56)
Limited
Coffee Day Properties (India) 0.11% 14.26 -0.12% (0.31) 0.00% - -0.11% (0.31)
Private Limited
Classic Coffee Curing Works 0.15% 18.74 -0.52% (1.37) 0.00% - -0.49% (1.37)
Coffeelab Limited -0.04% (5.58) -1.62% (4.26) 0.00% - -1.54% (4.26)
Foreign subsidiaries
A.N Coffeeday International 0.01% 0.65 -0.50% (1.33) -52.07% (7.08) -3.03% (8.41)
Limited
Coffee Day Gastronomie 0.09% 10.89 -7.22% (19.03) 36.08% 4.90 -5.10% (14.13)
Und Kaffeehandles GmbH
Coffee Day CZ a.s 1.25% 160.16 -14.00% (36.81) 87.20% 11.76 -9.04% (25.05)
Joint ventures (investment as
per the equity method) Indian
Coffee Day Schaerer 0.03% 3.51 -1.34% (3.54) 0.00% - - (3.54)
Technologies Private
Limited
Total 100.01% 12,806.54 100.00% 263.63 100.00% 13.50 101.29% 277.13

42 RELATED PARTY DISCLOSURE

A. Related parties with whom transactions have taken place during the year
I. Parent entity
- Coffee Day Enterprises Limited
II. Subsidiary companies
- Amalgamated Holdings Limited
- Ganga Coffee Curing Works Limited
- A.N Coffeeday International Limited
- Coffee Day Properties (India) Private Limited
- Coffee Day Gastronomie Und Kaffeehandles GmbH
- Coffee Day CZ a.s.
- Coffeelab Limited
- Classic Coffee Curing Works
III. Joint venture company
- Coffee Day Schaerer Technologies Private Limited
IV. Entities under common control, associates of holding company with whom transactions have taken place:
- Tanglin Developments Limited
- Mysore Amalgamated Coffee Estates Limited
- Kesar Marbles and Granites Limited
- Dark Forest Furniture Company Private Limited
- Mindtree Limited
- SICAL Logistics Limited
- Tanglin Retail Reality Developments Private Limited

FINANCIAL SECTION | 287

Notes to the consolidated financial statements for the year ended 31 March 2017
42 RELATED PARTY DISCLOSURE (contd.)
- Coffee Day Hotels and Resorts Private Limited
- Wilderness Resorts Private Limited
- Karnataka Wildlife Resorts Private Limited
V. Key management personnel of the entity
Executive key management personnel represented on the Board of the Company are -
- V.G. Siddhartha, Managing Director
- Malavika Hegde
- Jayaraj Hubli, Chief Financial Officer
- Venu Madhav
- Sadananda Poojary, Company Secretary
The non executive directors on the Board of the Company are -
- Sanjay Nayar
- S.V.Ranganath (Appointed with effect from 5 May 2015)
- K.P.Balaraj (Appointed with effect from 17 August 2015)
- Nainesh Jaisingh (Resigned with effect from 6 May 2015)
- Parag Saxena (Resigned with effect from 5 May 2015)
B. Transactions with related party:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Transactions with :
I. Parent entity: Coffee Day Enterprises Limited
Issue of compulsorily convertible debentures : 0.10 0.10
Reimbursable expenses incurred by the Company 3.75 6.25
Non-cash distributions 0.80 -
Sale of consumables - 0.51
II. Joint venture company
Investment in
- Coffee Day Schaerer Technologies Private Limited 79.32 -
Sale of coffee vending machines spares
- Coffee Day Schaerer Technologies Private Limited - 2.79
Purchases of coffee vending machines
- Coffee Day Schaerer Technologies Private Limited 18.73 -
Reimbursable expenses incurred by the Company on behalf of
- Coffee Day Schaerer Technologies Private Limited 8.77 3.07
III. Entities under common control, associates of holding company:
Commission income
- Tanglin Retail Reality Developments Private Limited 2.37 0.03
- Wilderness Resorts Private Limited 1.29 0.01
- Karnataka Wildlife Resorts Private Limited 0.13 0.75
- Coffee Day Hotels and Resorts Private Limited 0.29 1.75
- Tanglin Developments Limited 2.50 -
Transportation and subcontracting charges
- SICAL Logistics Limited 515.92 251.00
Sale of coffee and service income
- Mindtree Limited 24.40 24.37
- Coffee Day Hotels and Resorts Private Limited 3.14 -
- Karnataka Wild Life Resorts Private Limited 0.99 -
Purchase of clean and raw coffee
- Mysore Amalgamated Coffee Estates Limited 440.46 469.00
Purchase of fixed assets
- Dark Forest Furniture Company Private Limited 344.70 356.48
Purchase of Software
- Mindtree Limited 50.89 11.23
Advance paid to
- Dark Forest Furniture Company Private Limited 220.08 -

288 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
42 RELATED PARTY DISCLOSURE (contd.)
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Advance received from
- Mysore Amalgamated Coffee Estates Limited 3,385.60 3,152.83
Interest paid on advances received from
- Mysore Amalgamated Coffee Estates Limited 5.52 14.57
Reimbursable expenses incurred by the Company on behalf of
- Tanglin Developments Limited 3.53 3.45
Repayment of advances from
- Kesar Marble & Granites Limited 0.58 -
Repayment of advances to
- Mysore Amalgamated Coffee Estates Limited 2,945.14 2,683.83
Guarantee given/ (closed)
- Tanglin Retail Reality Developments Private Limited - 950.00
- Wilderness Resorts Private Limited 250.00 300.00
- Karnataka Wildlife Resorts Private Limited (300.00) -
- Coffee Day Hotels and Resorts Private Limited (700.00) -
- Tanglin Developments Limited (500.00) 500.00
IV. Key management personnel of the entity
Key management personnel compensation
- Jayaraj Hubli 7.52 6.97
- Sadananda Poojary 3.80 3.17
- Venu Madhav A 8.65 7.50
Guarantee given/ (closed)
- V. G. Siddhartha (956.90) (138.18)

C. The following is a summary of balances receivable from and payable to related parties:
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
I. Parent entity: Coffee Day Enterprises Limited
- Compulsorily convertible debentures 4,100.00 4,100.00 -
- Other payables 0.37 - -
- Other receivable - 0.26 -
II. Joint venture company
Trade receivables
- Coffee Day Schaerer Technologies Private Limited - 3.19 -
Other receivables
- Coffee Day Schaerer Technologies Private Limited - 1.53 -
Current loans
- Coffee Day Schaerer Technologies Private Limited 15.46 - -
Creditors for capital goods
- Coffee Day Schaerer Technologies Private Limited 11.69 - -
III. Entities with common control, associates of holding company:
Trade receivables
- Mindtree Limited 5.62 5.27 2.83
Creditors for capital goods
- Mindtree Limited 37.41 10.37 -
- Dark Forest Furniture Company Private Limited 105.33 22.32 -
Trade payables
- SICAL Logistics Limited 145.66 130.27 40.88
- Dark Forest Furniture Company Private Limited - 2.82 -
Other receivables
- Tanglin Developments Limited 1.50 1.50 -
- Kesar Marble & Granites Limited - 0.58 -

FINANCIAL SECTION | 289

Notes to the consolidated financial statements for the year ended 31 March 2017
42 RELATED PARTY DISCLOSURE (contd.)
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Corporate guarantees given
- Tanglin Retail Reality Developments Private Limited 950.00 950.00 -
- Wilderness Resorts Private Limited 550.00 300.00 -
- Karnataka Wildlife Resorts Private Limited - 300.00 300.00
- Coffee Day Hotels and Resorts Private Limited - 700.00 700.00
- Tanglin Developments Limited - 500.00 -
IV. Key management personnel of the entity:
Corporate guarantee received for loans taken
- V. G. Siddhartha 2,172.22 3,129.12 3,267.30

D. Compensation of key management personnel of the Group:

The remuneration of directors and other members of key management personnel during the year was as follows:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Short-term employee benefits 19.97 17.64
19.97 17.64

The remuneration of directors and key executives is determined having regard to the performance of individuals and market trends.
Post employment benefit comprising gratuity and compensated absences are not disclosed as these are determined for the Group
as a whole.
E. Terms and conditions
All outstanding balances with these related parties are priced on an arm’s length basis and are to be settled in cash within the
credit period allowed as per the policy. None of the balances are secured.

43 EMPLOYEE BENEFITS OBLIGATIONS

A. Defined benefit plan
The Group has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. Employees who are in
continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination
is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of
years of service. The gratuity plan is a funded plan and the Group makes contributions to recognised funds in India. The same
is maintained by the LIC New Group Gratuity Cash Accumulation Plan and Kotak gratuity group plan.
B. Reconciliation of the projected benefit obligations
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Change in projected benefit obligation:
Obligations at the beginning of the year 106.61 86.41
Service cost 22.06 18.04
Interest cost 5.47 5.35
Actuarial (gains) losses recognised in other comprehensive income:
- due to changes in financial assumptions 2.93 1.37
- due to experience adjustments (3.70) 5.03
Benefits settled (4.59) (9.59)
Obligations at year end 128.78 106.61

290 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
43 EMPLOYEE BENEFITS OBLIGATIONS (contd.)
Change in plan assets:
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Plans assets at the beginning of the year, at fair value 83.39 76.47
Expected return on plan assets 6.03 6.90
Actuarial (loss)/gain (1.68) (0.35)
Contributions 22.11 9.96
Benefits settled (4.59) (9.59)
Plans assets at year end, at fair value 105.26 83.39

Reconciliation of present value of obligation and fair value of plan assets:

(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Net defined benefit assets 105.26 83.39 76.47
Total employee benefit assets (non-current) 105.26 83.39 76.47
Net defined benefit liability 128.78 106.61 86.41
Total employee benefit liabilities 128.78 106.61 86.41
Net liability:
Non-current 16.62 16.10 3.62
Current 6.90 7.12 6.32
23.52 23.22 9.94

C. (i) Expense recognised in profit or loss:

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Current service cost 22.06 18.04
Interest cost 5.47 5.35
Interest income (6.03) (6.90)
Net gratuity cost 21.50 16.49

C. (ii) Remeasurements recognised in other comprehensive income:

(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Actuarial (gains) / losses (0.77) 6.40
(Return)/ loss on plan assets excluding interest income 1.68 0.35
0.91 6.75

D. Plan assets comprise of the funds amounting to Rs.105.26 million (31 March 2016: Rs.83.39 million).
E Defined benefit obligation
(i) Actuarial assumptions
Principal actuarial assumptions at the reporting date:

Particulars For the year ended For the year ended

31 March 2017 31 March 2016
Interest rate 6.65% 7.35%
Expected rate of return on plan assets 9.00% 9.00%
Salary increase 3% - 4% 3% - 4%
Attrition rate 25.00% 25.00%
Mortality table IALM (2006-08) IALM (2006-08)
The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and
other relevant factors such as supply and demand factors in the employment market.

FINANCIAL SECTION | 291

Notes to the consolidated financial statements for the year ended 31 March 2017
43 EMPLOYEE BENEFITS OBLIGATIONS (contd.)
(ii) Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation by the amounts shown below:
(Rs. in million)
Particulars For the year ended For the year ended
31 March 2017 31 March 2016
Increase Decrease Increase Decrease
Discount rate (100 basis points movement) 110.93 117.62 89.70 95.01
Future salary growth (100 basis points movement) 117.68 110.82 95.07 89.59
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an
approximation of the sensitivity of the assumptions shown.
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT
A Accounting classification and fair value
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels
in the fair value hierarchy.
(Rs. in million)
Particulars Carrying value Fair Value
As at Level 1 Level 2 Level 3 Total
31 March 2017
Financial assets measured at fair value through OCI:
- Interest rate swaps 6.55 - 6.55 - 6.55
Financial assets measured at amortised cost:
- Other financial assets (current) 133.59 - - - -
- Fixed deposits and margin money with banks 77.63 - - - -
- Trade receivables 1,545.83 - - - -
- Cash and cash equivalents 2,159.51 - - - -
- Bank balances other than cash and cash equivalents 60.01 - - - -
- Security deposits 791.72 - - - -
- Loans (current and non-current) 39.00 - - - -
Total 4,813.84 - 6.55 - 6.55
Financial liabilities
- Borrowings (current and non-current) 2,192.88 - - - -
- Other financial liabilities (current and non-current) 1,811.51 - - - -
- Trade payables 286.22 - - - -
Total 4,290.61 - - - -

The Group has not disclosed the fair values for financial instruments such as other non current financial assets, trade receivables,
cash and cash equivalents, bank balances, other current financial assets, loans, borrowings with fluctuating interest rate, other non
current financial liabilities, trade payables and other current financial liabilities because their carrying amounts are a reasonable
approximation of fair value.
(Rs. in million)
Particulars Carrying value Fair Value
As at Level 1 Level 2 Level 3 Total
31 March 2016
Financial assets measured at amortised cost:
- Other financial assets (current) 161.30 - - - -
- Fixed deposits and margin money with banks 154.47 - - - -
- Trade receivables 1,279.85 - - - -
- Cash and cash equivalents 2,610.81 - - - -
- Bank balances other than cash and cash equivalents 1,665.52 - - - -
- Security deposits 720.43 - - - -
- Loans (current and non-current) 16.45 - - - -
Total 6,608.83 - - - -

292 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (contd.)
A Accounting classification and fair value (contd.)
(Rs. in million)
Particulars Carrying value Fair Value
As at Level 1 Level 2 Level 3 Total
31 March 2016
Financial liabilities
- Borrowings (current and non-current) 2,972.31 - - - -
- Other financial liabilities (current and non-current) 2,811.78 - - - -
- Trade payables 408.82 - - - -
Total 6,192.91 - - - -
The Group has not disclosed the fair values for financial instruments such as other non current financial assets, trade receivables,
cash and cash equivalents, bank balances, other current financial assets, loans, borrowings with fluctuating interest rate, other non
current financial liabilities, trade payables and other current financial liabilities because their carrying amounts are a reasonable
approximation of fair value.
(Rs. in million)
Particulars Carrying value Fair Value
As at Level 1 Level 2 Level 3 Total
1 April 2015
Financial assets measured at amortised cost:
- Other financial assets (current) 163.16 - - - -
- Fixed deposits and margin money with banks 113.00 - - - -
- Trade receivables 1,204.17 - - - -
- Cash and cash equivalents 1,509.34 - - - -
- Bank balances other than cash and cash equivalents 94.60 - - - -
- Security deposits 626.12 - - - -
- Loans (current and non-current) 11.69 - - - -
Total 732.41 - - - -
Financial liabilities measured at amortised cost:
- Borrowings (current and non-current): 4,367.73 - - - -
- Other financial liabilities (current and non-current) 2,364.01 - - - -
- Trade payables 536.76 - - - -
Total 7,268.50
The Group has not disclosed the fair values for financial instruments such as other non current financial assets, trade receivables,
cash and cash equivalents, bank balances, other current financial assets, loans, borrowings with fluctuating interest rate, other non
current financial liabilities, trade payables and other current financial liabilities because their carrying amounts are a reasonable
approximation of fair value.
B. Measurement of fair values
The section explains the judgement and estimates made in determining the fair values of the financial instruments that are:
a) recognised and measured at fair value
b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial
instruments into the three levels prescribed under the accounting standard. An explanation of each level is mentioned below:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments,
traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded
in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing
NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as
possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

FINANCIAL SECTION | 293

Notes to the consolidated financial statements for the year ended 31 March 2017
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (contd.)
B. Measurement of fair values (contd.)
Valuation technique and significant unobservable inputs
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale. The following table shows the valuation
techniques used in measuring Level 2 and Level 3 fair values for financial instruments measured at fair value in the balance sheet,
as well as the significant unobservable inputs used. Related valuation processes are described in Note 2(F).
(Rs. in million)
Financial Type Valuation Significant Inter relationship
instruments technique unobservable between significant
measured at inputs unobservable inputs and
fair value fair value measurement
Fair value Interest rate The fair value is calculated as the present value Not applicable Not applicable
swaps of the estimated future cash flows. Estimates
of future floating-rate cash flows are based
on quoted swap rates, futures prices and
interbank borrowing rates. Estimated cash
flows are discounted using a yield curve
constructed from similar sources and which
reflects the relevant benchmark interbank rate
used by market participants for this purpose
when pricing interest rate swaps. The fair value
estimate is subject to a credit risk adjustment
that reflects the credit risk of the entity and
of the counterparty; this is calculated based
on credit spreads derived from current credit
default swap or bond prices.
Amortised cost Borrowings at The valuation model considers the present Not applicable Not applicable
fixed interest value of expected payment, discounted using
rate a risk-adjusted discount rate.
C. Financial risk management
The Group's has exposure to the following risks arising from financial instruments:
- credit risk (refer note ii below)
- liquidity risk (refer note iii below)
- market risk (refer note iv below)
(i) Risk management framework
The Group’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group,
to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group’s Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the
Group. The Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and
ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
(ii) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and
from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and
other financial instruments.
The carrying amount of financial assets represents the maximum credit exposure.
Trade and other receivables:
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default risk
associated with the industry and country in which customers operate.

294 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (contd.)
C. Financial risk management (contd.)
Outstanding customer receivables, which can be classified into receivables from corporates and receivables from retail
operations are evaluated as minimal credit risk by the Group. Receivable from corporates are mainly from reputed
companies from which we have noted a trend of timely collections. Retail operations pertains to customers who pay at
the point of sale at the cafe and xpress outlets. However there is low risk on account of payments made through credit
cards and coupons which are recoverable from banks, financial institutions and corporates having minimal credit risk.
Due to this factor, management believes that no additional credit risk is inherent in the Group’s trade receivables and other
receivables and unbilled revenue. At the balance sheet date, there were no significant concentrations of credit risk.
Expected credit loss (ECL) assessment for customers as at 31 March 2017, 31 March 2016 and 1 April 2015:
The Group allocates each exposure to a credit risk is grade based on a variety of data that is determined to be predictive
of the risk loss (including but not limited to past payment history, cash flow projections and available press information
about the customers) and applying experienced credit judgement.
As explained above, the Group has categorised its receivables into the following parts:
- Receivables from corporate customers: Receivables above 1 year are considered to be doubtful and provision is created
for the balance.
- Receivables from retail operations: Receivables above 6 months are considered to be doubtful and provision is created
for the balance.
The following table provides information about the exposure to credit risk and the expected credit loss for trade receivables:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016 As at1 April 2015
Carrying Provision Carrying Provision Carrying Provision
amount amount amount amount amount amount
Up to 180 days 1,528.42 - 1,242.25 - 1,204.17 -
More than 180 days 57.41 40.00 57.60 20.00 - -
1,585.83 40.00 1,299.85 20.00 1,204.17 -

The gross carrying amount of trade receivables is Rs.1,585.83 million as at 31 March 2017 (31 March 2016: Rs.1,299.85
million; 1 April 2015: Rs.1,204.17 million).
Reconciliation of loss allowance:
(Rs. in million)
Particulars As at As at
31 March 2017 31 March 2016
Loss allowance in the beginning of the year 20.00 -
Changes in allowance 20.00 20.00
Loss allowance at the end of the year 40.00 20.00
Cash and cash equivalents (including bank balances, fixed deposits and margin money with banks):
Credit risk on cash and cash equivalent is limited as the Group generally transacts with banks and financial institutions
with high credit ratings assigned by international and domestic credit rating agencies.
Loans and security deposit:
Expected credit loss for loans and security deposits is as follows:

Particulars Period Asset group Estimated Expected Expected Carrying

ended gross probability credit losses amount,
carrying of default net of
amount at impairment
default provision
Loss allowance Financial assets for which credit risk has 31-Mar-17 Security 791.72 - - 791.72
measured at 12 month not increased significantly since initial deposits
expected credit loss recognition Loan 39.00 - - 39.00
Loss allowance Financial assets for which credit risk has 31-Mar-16 Security 720.43 - - 720.43
measured at 12 month not increased significantly since initial deposits
expected credit loss recognition Loan 16.45 - - 16.45
Loss allowance Financial assets for which credit risk has 1-Apr-15 Security 626.12 - - 626.12
measured at 12 month not increased significantly since initial deposits
expected credit loss recognition Loan 11.69 - - 11.69

FINANCIAL SECTION | 295

Notes to the consolidated financial statements for the year ended 31 March 2017
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (contd.)
C. Financial risk management (contd.)
(iii)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Management monitors rolling forecasts of the Group’s liquidity position and cash and cash equivalents on the basis of
expected cash flows. This is generally carried out by the Management of the Group in accordance with practice and limits
set by the Group. In addition, the Group’s liquidity management policy involves projecting cash flows and considering
the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external
regulatory requirements and maintaining debt financing plans.
Exposure to liquidity risk
The table below provides details regarding the undiscounted contractual maturities of significant financial liabilities. The
amounts are gross and undiscounted contractual cash flow.
(Rs. in million)
As at 31 March 2017 Carrying Total Less than 1–2 years 3–5 years More than
amount 1 year 5 years
Non-derivative financial liabilities
Current borrowings 1,002.22 1,002.22 1,002.22 - - -
Non-current borrowings (including current 1,814.80 2,788.16 1,623.52 462.26 702.38 -
maturities)
Trade payables 286.22 286.22 286.22 - - -
Other financial liabilities (current and non- 1,187.37 1,187.37 814.62 372.75 - -
current)
4,290.61 5,263.97 3,726.58 835.01 702.38 -

(Rs. in million)
As at 31 March 2016 Carrying Total Less than 1–2 years 3–5 years More than
amount 1 year 5 years
Non-derivative financial liabilities
Current borrowings 1,095.97 1,095.97 1,095.97 - - -
Non-current borrowings (including current 3,506.03 6,494.90 3,281.26 1,094.76 2,118.88 -
maturities)
Trade payables 408.82 408.82 408.82 - - -
Other financial liabilities (current and non- 1,182.09 1,182.09 905.93 276.16 - -
current)
6,192.91 9,181.78 5,691.98 1,370.92 2,118.88 -

(Rs. in million)
As at 1 April 2015 Carrying Total Less than 1–2 years 3–5 years More than
amount 1 year 5 years
Non-derivative financial liabilities
Current borrowings 1,470.01 1,470.01 1,470.01 - - -
Non-current borrowings (including current 4,175.12 7,761.11 3,421.68 3,383.81 955.62 -
maturities)
Trade payables 536.76 536.76 536.76 - - -
Other financial liabilities (current and non- 1,086.61 1,086.61 835.93 250.68 - -
current)
7,268.50 10,854.49 6,264.38 3,634.49 955.62 -

The outflows disclosed in the above table represent the contractual undiscounted cash flows relating to derivative
financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity.

296 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (contd.)
C. Financial risk management (contd.)
(iv)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices,
which will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The Group uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the
risk management committee. Generally, the Group seeks to apply hedge accounting to manage volatility in profit or loss.
Currency risk
The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales,
purchases and borrowings are denominated and the respective functional currencies of Group. The functional currencies
of the Group is primarily Rs.. The currencies in which these transactions are primarily denominated are Euro and US dollars,
etc.
Exposure to currency risk
The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the Group
is as follows:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016 As at1 April 2015
EUR USD EUR USD EUR USD
Financial assets
Trade receivables 0.02 7.89 0.08 7.40 0.04 10.59
Advances recoverable in cash or in kind - 0.34 - 0.57 - 0.67
Financial liabilities
Trade payables - - - - - -
Bank Loan (2.02) (20.94) - (33.32) - (26.21)
Net statement of financial position exposure (2.00) (12.71) 0.08 (25.35) 0.04 (14.95)
Less: Forward exchange contracts - 2.94 - 8.82 - 14.71
Net exposure (2.00) (9.77) 0.08 (16.53) 0.04 (0.24)
The following significant exchange rates have been applied:
(Rs. in million)
Rs. As at As at As at
31 March 2017 31 March 2016 1 April 2015
USD 1 64.84 66.30 61.46
EUR 1 69.25 75.01 66.30

Sensitivity analysis
A reasonably possible strengthening (weakening) of the Euro or US dollar against all other currencies at 31 March would
have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain
constant and ignores any impact of forecast sales and purchases.
(Rs. in million)
Particulars Profit or loss Equity, net of tax
Strengthening Weakening Strengthening Weakening
31 March 2017
Euro (8% movement) 11.08 (11.08) 7.25 (7.25)
USD (2% movement) 12.67 (12.67) 8.29 (8.29)
31 March 2016
Euro (13% movement) 0.78 (11.08) 0.51 (0.51)
USD (8% movement) 87.68 (11.49) 57.34 (57.34)
Commodity price risk
The Group purchases coffee on an ongoing basis for its operations. The increased volatility in coffee price has led to the
decision to enter into commodity forward contracts. Its operating activities require the ongoing purchase and sale of
coffee and therefore require a continuous supply of coffee. The Group’s Board of Directors have developed and enacted
a risk management strategy regarding commodity price risk and its mitigation. Based on a 12-month forecast of the
required coffee supply, the Group hedges the purchase price using forward commodity purchase contracts.

FINANCIAL SECTION | 297

Notes to the consolidated financial statements for the year ended 31 March 2017
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (contd.)
C. Financial risk management (contd.)
Exposure to commodity risk
The exposure of the Group due to commodity price changes at the end of the reporting period are as follows :
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Financial asset 22.22 37.61 -
Net exposure 22.22 37.61 -

Sensitivity analysis
A reasonably possible strengthening (weakening) of the coffee prices as at 31 March would have affected the
measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the
amounts shown below. This analysis assumes that all other variables remain constant and ignores any impact of forecast
sales and purchases.
(Rs. in million)
Commodity price sensitivity Profit or loss Equity, net of tax
Strengthening Weakening Strengthening Weakening
31 March 2017
Coffee (11% movement) (1.47) 1.47 (1.47) 1.47
31 March 2016
Coffee (6% movement) (2.21) 2.21 (2.21) 2.21

Interest rate risk

The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash
flow interest rate risk. The Group has entered into interest rate swap to hedge the interest rate risk.
Exposure to interest rate risk
The exposure of the Group's borrowing to interest rate changes at the end of the reporting period are as follows :
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Fixed rate instruments:
Financial assets 1,738.41 4,082.94 1,347.50
Financial borrowings (460.58) (1,257.20) (1,611.61)
Effect of interest rate swaps 191.06 1,017.25 1,798.41
Fixed rate instruments exposed to interest rate risks 1,468.89 3,842.99 1,534.30
Variable rate instruments:
Financial assets - - -
Financial borrowings (2,356.44) (3,344.80) (3,809.62)
Effect of interest rate swaps 191.06 1,017.25 1,798.41
Variable rate instruments exposed to interest rate risks (2,165.38) (2,327.55) (2,011.21)
Sensitivity analysis
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed‑rate financial assets or financial liabilities at fair value through profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 1% in interest rates at the reporting date would have increased (decreased) equity and
profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
exchange rates, remain constant.
(Rs. in million)
Particulars Profit or Loss
1% increase 1% decrease
31 March 2017
Variable rate instruments (35.42) 35.42
31 March 2016
Variable rate instruments (15.07) 15.07

298 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
44 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (contd.)
C. Financial risk management (contd.)
Hedge accounting
The Group holds the following instruments to hedge exposures to changes in interest rates:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016 As at1 April 2015
Maturity in Maturity in Maturity in Maturity in Maturity in Maturity in
less than 1 more than less than 1 more than less than 1 more than
year 1 year year 1 year year 1 year
Interest rate risk
Interest rate swaps:
Net exposure 191.06 - 586.60 430.65 - 1,798.43
Average fixed interest rate (LIBOR) 0.02 - 0.02 0.02 - 0.02

The amounts relating to items designated as hedging instruments and hedge ineffectiveness are as follows:

As at 31 March 2017: (Rs. in million)

Type of hedge Nominal Carrying Line item in Changes in Change in the Hedge Amount Line item in
and risks value amount of the statement the value of value of hedged ineffectiveness reclassified profit or loss
hedging of financial the hedging item used as recognised in from equity affected by the
instrument position where instrument the basis for profit or loss head ‘effective reclassification
the hedging recognised recognising portion of cash
instrument is in OCI hedge flow hedges’ to
Asset included effectiveness profit or loss
Interest rate risk
- Interest rate swap 191.06 6.55 Other financial 7.31 (7.31) Nil Nil Nil
assets

Variable rate instruments exposed to interest rate risks

As at 31 March 2016: (Rs. in million)
Type of hedge Nominal Carrying Line item in Changes in Change in the Hedge Amount Line item in
and risks value amount of the statement the value of value of hedged ineffectiveness reclassified profit or loss
hedging of financial the hedging item used as recognised in from equity affected by the
instrument position where instrument the basis for profit or loss head ‘effective reclassification
the hedging recognised recognising portion of cash
instrument is in OCI hedge flow hedges’ to
Asset included effectiveness profit or loss
Cash flow hedge:
- Interest rate swap 1,017.25 - Other financial 15.27 (15.27) Nil Nil Nil
liabilities

As at 1 April 2015: (Rs. in million)

Type of hedge and risks Nominal value Carrying amount of Line item in the statement
hedging instrument of financial position where
the hedging instrument is
included
Liability
Cash flow hedge:
- Interest rate swap 1,798.41 23.00 Other financial liabilities

The following table provides a reconciliation by risk category of components of equity and analysis of OCI items, net of tax,
resulting from cash flow hedge accounting:
(Rs. in million)
Particulars As at 31 March 2017 As at 31 March 2016
Equity head ‘Effective Equity head ‘Effective
portion of cash flow hedges’ portion of cash flow hedges’
Opening balance for the period (5.02) (15.01)
Cash flow hedges : Interest rate risk
Changes in fair value 7.31 15.27
Tax on movements in relevant items of OCI during the year (2.53) (5.28)
Closing balance for the period (0.24) (5.02)

FINANCIAL SECTION | 299

Notes to the consolidated financial statements for the year ended 31 March 2017
45 CAPITAL MANAGEMENT
For the purpose of the Group’s capital management, capital includes issued equity capital, convertible preference shares,
compulsorily convertible debentures, share premium and all other equity reserves attributable to the equity holders of the parent.
The primary objective of the Group’s capital management is to maximise the shareholder value.
The Group's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. Management monitors the return on capital. The Board of Directors seeks to maintain a balance
between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a
sound capital position.
The Group monitors capital using a ratio of 'adjusted net debt' to 'adjusted equity'. For this purpose, adjusted net debt is defined
as total liabilities, comprising interest-bearing loans and borrowings less cash and cash equivalents. Adjusted equity comprises all
components of equity other than amounts accumulated in the effective portion of cash flow hedges. The Group's adjusted net
debt to equity ratio at 31 March 2017 was as follows.
(Rs. in million)
Particulars As at As at As at
31 March 2017 31 March 2016 1 April 2015
Total liabilities 5,075.57 6,567.82 7,475.10
Less: cash and cash equivalents 2,159.51 2,610.81 1,509.34
Adjusted net debt 2,916.06 3,957.01 5,965.76
Total equity 12,806.54 12,351.16 7,675.13
Less: effective portion of cash flow hedges (0.24) (5.02) (15.01)
Adjusted equity 12,806.78 12,356.18 7,690.14
Adjusted net debt to equity ratio 0.23 0.32 0.78

In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in
meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in
the financial covenants of any interest-bearing loans and borrowing in the current period.

46 FIRST TIME ADOPTION

As stated in Note 2A, these are the Group’s first consolidated financial statements prepared in accordance with Ind AS. For the year
ended 31 March 2016, the Group had prepared its consolidated financial statements in accordance with Companies (Accounting
Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).
The accounting policies set out in Note 3 have been applied in preparing these consolidated financial statements for the year
ended 31 March 2017 including the comparative information for the year ended 31 March 2016 and the opening consolidated Ind
AS balance sheet on the date of transition i.e. 1 April 2015.
In preparing its consolidated Ind AS balance sheet as at 1 April 2015 and in presenting the comparative information for the year
ended 31 March 2016, the Group has adjusted amounts reported previously in consolidated financial statements prepared in
accordance with previous GAAP. This note explains the principal adjustments made by the Group in restating its consolidated
financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected
the Group’s financial position, financial performance and cash flows.
Optional exemptions availed and mandatory exceptions
In preparing these consolidated financial statements, the Group has applied the below mentioned optional exemptions and
mandatory exceptions.
A. Optional exemptions availed:
(i) Property plant and equipment and intangible assets
As per Ind AS 101 an entity may elect to:
(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its
deemed cost at that date; or
(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed
cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:
− fair value;
− or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

300 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38,
Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the
existence of an active market); or
(iii) use carrying values of property, plant and equipment and intangible assets as on the date of transition to Ind AS (which
are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities
prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.
As permitted by Ind AS 101, the Group has elected to measure certain items of property, plant and equipment at fair value
at the date of transition to Ind AS and rest of the items of property, plant and equipment are measured in accordance with
the requirements of Ind AS 16 and Ind AS 38.
(ii)
Share-based payments
A first-time adopter is encouraged, but not required, to apply Ind AS 102, Share-based Payment to equity instruments
that were granted on or before the date of transition to Ind AS and have vested before that date. However, if a first-time
adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair
value of those equity instruments determined at the measurement date as defined in Ind AS 102. For all grants of equity
instruments that are still outstanding at the date of transition to Ind AS, and to which Ind AS 102 has not been applied, a
first-time adopter must disclose information that enables users of the financial statements to understand the nature and
extent of share-based payment arrangements that existed (paragraphs 44 and 45 of Ind AS 102).
For share-based payment transactions that give rise to liabilities, a first-time adopter is encouraged, but not required, to
apply Ind AS 102 if transactions were settled before the date of transition to Ind AS.
Accordingly, the Group has elected the optional exemption given and not accounted for share options vested before 1
April 2015 as per Ind AS 102.
(iii) Determining whether an arrangement contains a lease
Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind
AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts
and circumstances existing at the date of transition (rather than at the inception of the arrangement).
The Group has elected to avail of the above exemption.
(iv) Investments in and joint ventures
Ind AS 101 provides an exemption to the first-time adopter to measures an investment in subsidiaries, associates and joint
ventures at:
a) cost determined in accordance with Ind AS 27; or
b) deemed cost, which shall be its:
i) fair value at the entity’s date of transition to Ind ASs in its separate financial statements; or
ii) previous GAAP carrying amount at that date.
The Group has chosen to value its investment in joint ventures at the cost determined in accordance with Ind AS 27.
(v) Long term foreign currency monetary items
Ind AS 101 provides an option to continue the policy of recognising the exchange differences on long term foreign
currency monetary items for those long term foreign currency monetary items which were recognised in the financial
statements before the beginning of first Ind AS reporting period i.e. 1 April 2016 which the Group has chosen to avail.
(vi)
Business combination:
As per Ind AS 101, at the date of transition, an entity may elect not to restate business combinations that occurred before
the date of transition. If the entity restates any business combinations that occurred before the date of transition, then it
restates all later business combinations, and also applies Ind AS 110, Consolidated Financial Statements, from that same
date.
The Group has opted not to restate business combinations prior to the date of transition i.e. 1 April 2015. Since all business
combinations were prior to 1 April 2015, we have not restated goodwill, as per Ind AS 103. Hence, the goodwill represents
the amount recognised under the previous GAAP subject to specific adjustments as prescribed under Ind AS 101.

FINANCIAL SECTION | 301

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
(vii) Foreign currency translation reserve
As per Ind AS 101, an entity may either continue to carry forward the foreign currency translation reserve or deem that the
cumulative translation differences for all foreign operations to be zero as at the date of transition by transferring any such
cumulative differences to retained earnings.
The Group has elected to continue the balance of foreign currency translation reserve as per previous GAAP.
B. Mandatory exemptions:
Ind AS 101 also allows first-time adopters certain mandatory exceptions to be applied for retrospective application of certain
requirements under Ind AS for transition from the previous GAAP (IGAAP):
(i) Hedge accounting
The Group uses derivative financial instruments, such as interest rate swaps contract, to hedge its interest rate risks. Under
Indian GAAP, there is no mandatory standard that deals comprehensively with hedge accounting, which has resulted in
the adoption of varying practices. The Group has designated various economic hedges and applied economic hedge
accounting principles to avoid profit or loss mismatch. All the hedges designated under Indian GAAP are of types which
qualify for hedge accounting in accordance with Ind AS 109 also. Moreover, the Group, before the date of transition to
Ind AS, has designated transactions as hedge and also meets all the conditions for hedge accounting in Ind AS 109.
Consequently, the Group continues to apply hedge accounting after the date of transition to Ind AS.
(ii) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing
as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost
based on facts and circumstances existing at the date of transition if retrospective application is impracticable.
Accordingly, the Group has determined the classification of financial assets based on facts and circumstances that exist
on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively
except where the same is impracticable.
(iii)
Estimates
As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the
comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent
with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that
those estimates were in error.
However, the estimates should be adjusted to reflect any differences in accounting policies. As per Ind AS 101, where
application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those
estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS Balance
sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).
The Group’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation
of the financial statements that were not required under the previous GAAP are listed below:
- Fair valuation of financial instruments carried at FVTPL and/ or FVOCI.
- Impairment of financial assets based on the expected credit loss model.
- Determination of the discounted value for financial instruments carried at amortised cost.
(iv) De-recognition of financial assets and liabilities
As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively
for transactions occurring on or after the date of transition to Ind AS.
However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information
needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was
obtained at the time of initially accounting for those transactions.
The Group has elected to apply the derecognition principles of Ind AS 109 prospectively as reliable information is not
available at the time of initially accounting for these transactions.

302 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
C. Reconciliation between previous GAAP and Ind AS:
(i) (a) Reconciliation of Balance Sheet as at date of transition 1 April 2015:
(Rs. in million)
Particulars Notes to Previous GAAP* Adjustments Ind AS
first-time
adoption
ASSETS
Non-current assets
Property, plant and equipment 1 8,760.20 123.95 8,884.15
Capital work-in-progress 1 363.55 (65.70) 297.85
Other intangible assets 1.32 - 1.32
Goodwill 167.60 - 167.60
Financial Assets
- Loans 3 946.31 (320.19) 626.12
- Other current financial assets 113.00 - 113.00
Deferred tax assets (net) 12 43.50 24.60 68.10
Other non-current assets 3 315.42 220.30 535.72
Total non-current assets 10,710.90 (17.04) 10,693.86
Current assets
Inventories 2 1,105.60 (63.66) 1,041.94
Financial assets
- Trade receivables 1,204.17 - 1,204.17
- Cash and cash equivalents 1,509.34 - 1,509.34
- Bank balances other than cash and cash equivalents 94.60 - 94.60
- Loans 11.69 - 11.69
- Other current financial assets 163.16 - 163.16
Other current assets 3 371.52 59.95 431.47
Total current assets 4,460.08 (3.71) 4,456.37
Total assets 15,170.98 (20.75) 15,150.23
EQUITY AND LIABILITIES
Equity
Equity share capital 4 256.57 (93.97) 162.60
Other equity 13 7,403.55 108.98 7,512.53
Total equity 7,660.12 15.01 7,675.13
Non-current liabilities
Financial liabilities
- Borrowings 6 2,844.00 53.72 2,897.72
- Other financial liabilities 250.68 - 250.68
Provisions 3.62 - 3.62
Deferred tax liabilities (net) 12 79.84 (79.84) -
Other non-current liabilities 7 and 9 260.22 (220.79) 39.43
Total non-current liabilities 3,438.36 (246.91) 3,191.45
Current liabilities
Financial liabilities
- Borrowings 1,470.01 - 1,470.01
- Trade payables 536.76 - 536.76
- Other financial liabilities 4, 6, 7 1,908.71 204.62 2,113.33
Provisions 13.63 - 13.63
Current tax liabilities (net) 14.15 - 14.15
Other current liabilities 7 129.24 6.53 135.77
Total current liabilities 4,072.50 211.15 4,283.65
Total equity and liabilities 15,170.98 (20.75) 15,150.23
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

FINANCIAL SECTION | 303

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
(b) Reconciliation of Balance Sheet as at 31 March 2016:
(Rs. in million)
Particulars Notes to Previous GAAP* Adjustments Ind AS
first-time
adoption
ASSETS
Non-current assets
Property, plant and equipment 1 and 16 8,987.61 266.38 9,253.99
Capital work-in-progress 1 434.44 (65.70) 368.74
Other intangible assets 1 5.32 0.94 6.26
Goodwill 175.59 - 175.59
Financial Assets
- Investments 16 - 0.35 0.35
- Loans 3 1,024.56 (326.44) 698.12
- Other non-current financial assets 154.47 - 154.47
Deferred tax assets (net) 12 20.90 28.79 49.69
Other non-current assets 3 and 16 630.99 224.78 855.77
Total non-current assets 11,433.88 129.10 11,562.98
Current assets
Inventories 2 and 16 1,181.26 (65.03) 1,116.23
Financial assets
- Trade receivables 1,279.85 - 1,279.85
- Cash and cash equivalents 16 2,610.91 (0.10) 2,610.81
- Bank balances other than cash and cash equivalents 1,665.52 - 1,665.52
- Loans 38.76 - 38.76
- Other current financial assets 161.30 - 161.30
Other current assets 3 and 16 421.42 62.11 483.53
Total current assets 7,359.02 (3.02) 7,356.00
Total assets 18,792.90 126.08 18,918.98
EQUITY AND LIABILITIES
Equity
Equity share capital 168.68 - 168.68
Convertible debentures 8 - 4,100.00 4,100.00
Other equity 13 7,711.06 371.42 8,082.48
Total equity 7,879.74 4,471.42 12,351.16
Non-current liabilities
Financial liabilities
- Borrowings 6, 8 and 15 5,919.01 (4,042.67) 1,876.34
- Other financial liabilities 276.16 - 276.16
Provisions 16.10 - 16.10
Other non-current liabilities 7 and 9 337.01 (285.41) 51.60
Total non-current liabilities 6,548.28 (4,328.08) 2,220.20
Current liabilities
Financial liabilities
- Borrowings 1,095.97 - 1,095.97
- Trade payables 16 410.38 (1.56) 408.82
- Other financial liabilities 4, 6, 7, 15 2,559.42 (23.80) 2,535.62
and 16
Provisions 22.27 - 22.27
Current tax liabilities (net) 148.78 - 148.78
Other current liabilities 7 and 16 128.06 8.10 136.16
Total current liabilities 4,364.88 (17.26) 4,347.62
Total equity and liabilities 18,792.90 126.08 18,918.98
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

304 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
(ii) Reconciliation of total comprehensive income for the year ended 31 March 2016
(Rs. in million)
Particulars Notes to Previous GAAP* Adjustments Ind AS
first-time
adoption
Income
Revenue from operations 13,699.72 - 13,699.72
Other income 3 and 9 186.57 65.30 251.87
Total income 13,886.29 65.30 13,951.59
Expenses
Cost of materials consumed 6,373.16 - 6,373.16
Cost of traded goods 68.64 - 68.64
Changes in inventories of finished goods and work-in-progress (96.49) - (96.49)
Employee benefits expense 10 and 11 1,730.31 5.92 1,736.23
Finance costs 6 495.59 (2.53) 493.06
Depreciation and amortization expense 1 and 16 1,652.55 (126.26) 1,526.29
Other expenses 1, 3, 7 3,478.68 (21.91) 3,456.77
and 16
Total expenses 13,702.44 (144.78) 13,557.66
Profit/(loss) before tax 183.85 210.08 393.93
Tax expense:
- Current tax 178.22 - 178.22
- Deferred tax 12 (100.74) 72.52 (28.22)
Profit for the year before loss from joint venture 106.37 137.56 243.93
Share of loss of joint venture - (1.61) (1.61)
Profit for the year 106.37 135.95 242.32
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liability/(asset) 10 - (6.75) (6.75)
Income tax relating to items that will not be reclassified to profit or loss - 2.15 2.15
Net other comprehensive income not to be classified to profit or loss - (4.60) (4.60)
Items that will be reclassified subsequently to profit or loss
Foreign currency translation reserve 17 (1.22) (1.22)
Effective portion of gains (losses) on hedging instruments in 5 - 15.27 15.27
cash flow hedges
Income-tax relating to items that will be reclassified to profit or loss - (5.28) (5.28)
Net other comprehensive income to be classified to profit or loss - 8.77 8.77
Other comprehensive income for the period, net of income tax - 4.17 4.17
Total Comprehensive Income for the period 106.37 140.12 246.49
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

(iii) Adjustments to the statement of cash flows:

(Rs. in million)
Particulars Notes to For the year ended 31 March 2016
first-time
Previous Adjustments Ind AS
adoption
GAAP*
Net cash flow from operating activities 16 2,025.60 0.66 2,026.26
Net cash flow from investing activities 16 and 18 (3,592.46) 31.91 (3,560.55)
Net cash flow from financing activities 16 2,661.65 7.04 2,668.69
Net increase/ (decrease) in cash and cash equivalents 1,094.79 39.61 1,134.40
Cash and cash equivalents as at 1 April 2015 16 and 18 1,507.74 (288.61) 1,219.13
Cash and cash equivalents as at 31 March 2016 2,602.53 (249.00) 2,353.53
* The previous GAAP figures have been reclassified to conform with Ind AS.

FINANCIAL SECTION | 305

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
(iv) Reconciliation of total equity as at 31 March 2016 and 1 April 2015:
(Rs. in million)
Particulars Notes to 31 March 2016 1 April 2015
first-time
adoption
Total equity (shareholder’s funds) as per previous GAAP 7,879.74 7,660.12
Adjustments:
Fair valuation impact of Property, plant and equipment 1 9.39 9.39
Derecognition of land due to classification of lease as operating lease 1 (14.80) (14.80)
Decrease in depreciation consequent to adoption of deemed cost model 1 145.00 -
for property, plant and equipment
Fair valuation of certain financial assets 3 (39.16) (39.94)
Reclassification of optionally convertible preference shares to liability 4 - (223.90)
Impact on finance cost consequent to adoption of effective interest method 6 (58.89) (61.42)
Reversal of straight lining of rental expense to the extent of structured 7 307.70 244.16
escalation which is in line with expected general inflation
Reclassification of compulsorily convertible debentures to equity 8 4,100.00 -
Financial guarantee obligation 9 (6.63) (2.92)
Tax effects of adjustments 12 28.81 104.44
Total adjustments 4,471.42 15.01
Total equity as per Ind AS 12,351.16 7,675.13

(v) Reconciliation of total comprehensive income for the year ended 31 March 2016:
(Rs. in million)
Particulars Notes to first-time 31 March 2016
adoption
Profit after tax as per previous GAAP 106.37
Decrease in depreciation consequent to adoption of deemed cost model for property, 1 145.00
plant and equipment
Finance income recognized due to fair valuation of certain financial assets 3 0.78
Impact on finance cost consequent to adoption of effective interest method 6 2.53
Reversal of straight lining of rental expense to the extent of structured escalation which 7 63.54
is in line with expected general inflation
Commission income 9 2.54
Measurements of post-employment benefit obligations 10 6.75
Employee stock option expense recognised based on fair value method 11 (12.67)
Tax effects of adjustments 12 (72.52)
Total adjustments 135.95
Profit after tax as per Ind AS 242.32
Other comprehensive income 4.17
Total comprehensive income as per Ind AS 246.49

D. Notes to the reconciliations

1 Property, plant and equipment and other intangible assets including capital work in progress
The Group has elected to measure certain items of property, plant and equipment and intangibles at fair value in
accordance to para D5 of Ind AS 101 at the date of transition to Ind AS.
A leasehold land which was recognised as an item of property, plant and equipment under the previous GAAP has been
classified as operating lease as per Ind AS 17. Property, plant and equipment amounting to Rs.14.80 million as at 1 April
2015 has been reversed through retained earnings.
The impact arising from the changes is summarised below:
(Rs. in million)
Year ended
31 March 2016
Statement of profit and loss
Decrease in depreciation and amortization expense (126.25)
Decrease in loss on sale of assets, net (other expenses) (18.75)
Adjustment before income tax (145.00)

306 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
(Rs. in million)
Balance sheet As at 31 March 2016 As at 1 April 2015
a) Due to fair valuation of property, plant and equipment including
capital work-in-progress:
Property, plant and equipment 219.17 75.09
Capital work-in-progress (65.70) (65.70)
Intangible assets 0.94 -
Adjustment to retained earnings 154.41 9.39
b) Due to classification of lease as operating lease:
Property, plant and equipment (14.80) (14.80)
c) Due to reclassification from inventory*:
Property, plant and equipment 63.66 63.66
* refer note 2

Reconciliation of property, plant and equipment as at 1 April 2015:

(Rs. in million)
Particulars Previous GAAP Adjustment on Ind AS value for
value of assets fair transition to Ind assets fair valued
valued AS
Freehold land 17.54 179.50 197.04
Buildings 182.62 1,327.22 1,509.84
Leasehold improvements 3,285.78 (1,164.11) 2,121.67
Plant and equipment 1,564.02 (285.73) 1,278.29
Office equipment 0.28 (0.28) -
Furniture and fixtures 832.11 (512.41) 319.70
Computers 1.34 1.39 2.73
Vehicles 0.30 1.99 2.29
Coffee vending machine 2,465.37 (423.43) 2,041.94
Leasehold land 8.35 950.95 959.30
Capital work-in-progress 364.28 (65.70) 298.58
8,721.99 9.39 8,731.38

2 Inventories
Certain assets which were previously classified as inventory have now been reclassed to property, plant and equipment
due to change its accounting policy and has been depreciated over its estimated useful life of 1 year. Inventory amounting
to Rs.63.66 million as at 1 April 2015 has been reclassed to property, plant and equipment.
3 Security deposits
Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease
term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value.
Accordingly, the Group has fair valued these security deposits under Ind AS. Difference between the fair value and
transaction value of the security deposit has been recognised as deferred rent expense.
The impact arising from the changes is summarised below:
(Rs. in million)
Year ended
31 March 2016
Statement of profit and loss
Increase in interest income (other income) 62.76
Increase in rent (other expenses) 61.98
Adjustment before income tax 0.78

(Rs. in million)
As at 31 March 2016 As at 1 April 2015
Balance sheet
Other non-current loans (reclass of lease deposit to deferred rental expense) (326.44) (320.19)
Deferred rental expense (non-current) 224.81 220.30
Deferred rental expense (current) 62.47 59.95
Adjustment to retained earnings (39.16) (39.94)

FINANCIAL SECTION | 307

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
4 Compulsorily convertible preference shares
The Group has issued convertible redeemable preference shares. Under Indian GAAP, the preference shares were classified
as equity. Under Ind AS, convertible preference shares are reclassified as liability based on the terms of the contract.
Interest on liability component is recognised using the effective interest method.
The impact arising from the changes is summarised below:
(Rs. in million)
As at 31 March 2016 As at 1 April 2015
Balance sheet
IFC Subscribed "A" preference shares of Re 1 each (share capital) - (3.97)
IFC Subscribed "B" preference shares of Rs.100 each (share capital) - (90.00)
IFC Subscribed "A" preference shares of Re 1 each (other current financial - 9.46
liabilities)
IFC Subscribed "B" preference shares of Rs.100 each (other current financial - 214.44
liabilities)
Securities premium - (129.93)
Adjustment to retained earnings - -

5 Interest rate swap

The Group has certain interest rate swap contracts entered into prior to the date of transition and had early adopted the
requirements of AS 30. Accordingly, these interest rate swap contracts were designated as cash flow hedge. Under the
previous GAAP, the effective and ineffective gain or loss arising due to such contract was directly routed through hedge
reserve. Under Ind AS, the effective gain or loss is required to be routed through the other comprehensive income.
6 Borrowings
Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount
of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as
part of the interest expense by applying the effective interest rate method.
The impact arising from the changes is summarised below:
(Rs. in million)
Year ended
31 March 2016
Statement of profit and loss
Decrease in interest expense (finance costs) (2.53)
Adjustment before income tax (2.53)

(Rs. in million)
As at 31 March 2016 As at 1 April 2015
Balance sheet
Borrowings (non-current financial liabilities) 57.33 53.72
Current maturities of long-term debt (other current financial liabilities) 1.56 7.70
Adjustment to retained earnings 58.89 61.42
7 Lease
Under the previous GAAP, lease payments under an operating lease shall be recognised as an expense on a straight-line
basis over the lease term. Under Ind AS, if the payments to the lessor are structured to increase in line with expected
general inflation to compensate for the lessor’s expected inflationary cost increase, then lease payments are not straight-
lined. Accordingly, the Group has reversed rent equalisation reserve under Ind AS. Difference due to this has been
recognised as rent expense.
The impact arising from the changes is summarised below:
(Rs. in million)
Year ended
31 March 2016
Statement of profit and loss
Decrease in rent (other expenses) (63.54)
Adjustment before income tax (63.54)

308 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
(Rs. in million)
As at 31 March 2016 As at 1 April 2015
Balance sheet
Rent equalisation reserve (other non-current liabilities) (292.04) (223.71)
Rent equalisation reserve (other current liabilities) 8.15 6.53
Creditors for expenses (other current financial liabilities) (23.81) (26.98)
Adjustment to retained earnings (307.70) (244.16)

8 Compulsorily convertible debentures issued to Coffee Day Enterprises Limited (CDEL)

The Company has issued compulsorily convertible debentures to Coffee Day Enterprises Limited, holding company.
Under Indian GAAP, the debentures were classified as liability. Under Ind AS, compulsorily convertible debentures are
reclassified as equity based on the terms of the contract. Thus the liability was reduced by Rs.4100.00 million as on 31
March 2016 with a corresponding increase in equity.
9 Financial guarantee obligation
The Group has given guarantee against the loan taken by it's related parties from banks. Under the previous GAAP,
the guarantees given were disclosed in the financial statement as a contingent liability. Under Ind AS, the Group has
recognised such guarantee as a financial guarantee liability under Ind AS 109 and recorded the same at it's fair value.
The impact arising from the changes is summarised below:
(Rs. in million)
Year ended
31 March 2016
Statement of profit and loss
Increase in commission income (other income) 2.54
Adjustment before income tax 2.54

(Rs. in million)
As at 31 March 2016 As at 1 April 2015
Balance sheet
Financial guarantee obligation (other non-current liabilities) 6.63 2.92
Adjustment to retained earnings 6.63 2.92

10 Remeasurement of post-employment benefit expenses

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included
in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of
profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a
result of this change, the profit for the year ended 31 March 2016 decreased by Rs.6.75 million.
11
Share-based payment
Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic value
method. Under Ind AS, the cost of equity settled share-based plan unvested as at 1 April 2015 and issued subsequent to
transition date is recognised based on the fair value of the options as at the grant date.
The impact arising from the changes is summarised below:
(Rs. in million)
Year ended
31 March 2016
Statement of profit and loss
Increase in share-based payments to employees (employee benefits expense) 12.67
Adjustment before income tax 12.67

(Rs. in million)
As at 31 March 2016 As at 1 April 2015
Balance sheet
Share options outstanding account 14.97 2.30
Adjustment to retained earnings 14.97 2.30
There is no impact on the total equity as at 31 March 2016.
12
Deferred tax
Deferred tax have been recognised on the adjustments made on transition to Ind AS.

FINANCIAL SECTION | 309

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
13
Retained earnings
Retained earnings as at 1 April 2015 has been adjusted consequent to the above mentioned Ind AS adjustments.
14 Other comprehensive income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period,
unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but
are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit
plans and effective portion of gains and losses on cash flow hedging instruments. The concept of other comprehensive
income did not exist under previous GAAP.
15 Compulsorily convertible debentures issued to FMO
We have reclassified the Previous GAAP number for the current portion of the compulsorily convertible debenture as at
31 March 2016 amounting to Rs.169.76 million from Borrowings (non-current financial liabilities to other current financial
liabilities.
16
Joint venture
Under the previous GAAP, Coffee Day Schaerer Technologies Private Limited ("CDSTPL") was classified as a ‘jointly controlled
entity’ and accordingly accounted for using proportionate consolidation method. On transition to Ind AS, CDSTPL has
been classified as a joint venture has been consolidated using equity method as per Ind AS 28, Investments in Associates
and Joint Ventures. No impairment has been identified on the investment at the date of transition. Details of assets,
liabilities along with the consequential changes in the statement of profit and loss as well as cash flow statement are
summarised below.
(i) The following assets and liabilities of Coffee Day Schaerer Technologies Private Limited were previouslyproportionately
consolidated under previous GAAP:
(Rs. in million)
Particulars As at
31 March 2016
Non-current assets
Property, plant and equipment 1.65
Other non-current assets 0.03
Total non-current assets 1.68
Current assets
Inventories 1.37
Cash and cash equivalents 0.10
Other current assets 0.36
Total current assets 1.83
Total assets 3.51
Current liabilities
Trade payables 1.56
Other current financial liabilities 1.55
Other current liabilities 0.05
Total liabilities 3.16
Net assets derecognised 0.35
(ii) The following items of income and expenditure were previously proportionately consolidated under previous GAAP:
(Rs. in million)
Particulars For the year ended
31 March 2016
Revenue -
Expenses:
Depreciation and amortisation expense 0.01
Other expenses 1.60
Loss after tax (1.61)

Impact on account of equity accounting of the joint venture under Ind AS:
(Rs. in million)
Particulars For the year ended
31 March 2016
Share of profits of joint venture recognised as per equity method (1.61)
Share of other comprehensive income (remeasurements) of joint venture recognised as per -
equity method

310 | COFFEE DAY | ANNUAL REPORT 2016-17

Notes to the consolidated financial statements for the year ended 31 March 2017
46 FIRST TIME ADOPTION (contd.)
(iii) Summarised statement of cash flows of Coffee Day Schaerer Technologies Private Limited for the year ended 31
March 2016 not considered under Ind AS in the consolidated statement of cash flows:
(Rs. in million)
Particulars As at 31 March 2016 As at 1 April 2015
Cash and cash equivalent as per previous GAAP 2,602.53 1,507.74
Joint venture – equity accounting (0.10) -
Other Ind AS adjustment (248.90) (288.61)
Cash and cash equivalents for the purpose of statement of cash flows under 2,353.53 1,219.13
Ind AS
17 Foreign currency translation reserve
In accordance with Ind AS 101, amount of foreign currency differences arising from translation of the financial statement of
the foreign subsidiaries to Indian Rupees for the year ended 31 March 2016 has been routed through other comprehensive
income amounting to Rs.1.22 million.
18
Bank overdrafts
Under Ind AS, bank overdrafts repayable on demand and which form an integral part of the cash management process
are included in cash and cash equivalents for the purpose of presentation of statement of cash flows. Under previous
GAAP, bank overdrafts were considered as part of borrowings and movements in bank overdrafts were shown as part of
financing activities. Consequently, cash and cash equivalents have reduced by Rs.248.90 million as at 31 March 2016 (1
April 2015: Rs.288.61 million) and cash flows from financing activities for the year ended 31 March 2016 have also reduced
by Rs.39.71 million to the effect of the movements in bank overdrafts.

The notes referred to above form an integral part of the consolidated financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Coffee Day Global Limited
Firm registration number: 101248W/W-100022
Supreet Sachdev V. G. Siddhartha Malavika Hegde
Partner Managing Director Director
Membership no.: 205385 DIN: 00063987 DIN: 00136524
Place: Bangalore Jayaraj C Hubli Sadananda Poojary
Date: 18 May 2017 CFO/ Director (DIN: 00073670) Company Secretary

FINANCIAL SECTION | 311

 NOTICE IS HEREBY GIVEN THAT THE 9TH ANNUAL GENERAL MEETING OF THE MEMBERS OF
COFFEE DAY ENTERPRISES LIMITED WILL BE HELD AT CAFÉ COFFEE DAY, GLOBAL VILLAGE, RVCE
POST, MYSORE ROAD, MYLASANDRA, BANGALORE-560059 ON THURSDAY, THE SEPTEMBER 14TH,
2017 AT 11:00 AM TO TRANSACT THE FOLLOWING BUSINESSES:

ORDINARY BUSINESS: modifications or re-enactments thereof for the time being in force)
Item No.1: To consider and adopt the Audited Financial and the Rules, Regulations, Guidelines and Circulars, as amended
Statements (including Consolidated Financial Statements) of the from time to time, the Memorandum and Articles of Association
Company for the Financial Year ended March 31, 2017, together of the Company and subject to such other approvals as may be
with the reports of the Board of Directors and Auditors thereon. required from regulatory authorities from time to time, consent of
the Members be and is hereby accorded to the Board of Directors/
Item No.2: To re-appoint a Director in place of Mrs. Malavika
Committee of Directors to offer, issue and allot, in one or more
Hegde (DIN: 00136524) who retires by rotation and being eligible
tranches, Secured or Unsecured Non-convertible Debentures/
offers herself for re-appointment.
Bonds on private placement basis during the Financial Year 2017-
Item No.3: To Ratify the appointment of Statutory Auditors and 2018, for an amount not exceeding Rs.3,000,000,000/- (Rupees
fixing their remuneration: Three Hundred Crores only) on such terms and conditions and
at such times at par or at such premium, as may be decided by
To consider and if thought fit, to pass the following resolution
the Board/Committee of Directors to such person or persons,
with or without modification(s) as an Ordinary Resolution:
including one or more companies, bodies corporate(s), statutory
“RESOLVED THAT pursuant to the provisions of Section 139, 142 corporations, commercial banks, lending agencies, financial
and such other applicable provisions, if any, of the Companies institutions, insurance companies, mutual funds, pension/
Act, 2013 (including any statutory modification or re-enactment provident funds and individuals, as the case may be or such other
thereof for the time being in force) and the Rules made thereunder, person/persons as the Board/Committee of Directors may decide
as amended from time to time, pursuant to the recommendation so, however that the aggregate amount of funds to be raised by
of the Audit Committee and that of the Board of Directors and issue of Non-convertible Debentures/Bonds shall not exceed
pursuant to the resolution passed by the members at the AGM Rs.300 Crores.
held on 30th September 2014, the appointment of B.S.R & Co. LLP,
RESOLVED FURTHER THAT in connection with the above, the
Chartered Accountants (ICAI Firm Registration No. 101248W/W-
Board/Committee of Directors be and is hereby authorized to
100022) as Auditors of the Company to hold office from the
do all such acts, deeds, matters and things as may be deemed
conclusion of the Ninth Annual General Meeting (AGM) till the
necessary, desirable, proper or expedient for the purpose of giving
conclusion of the Tenth AGM, be and is hereby ratified and that
effect to this Resolution and for matters connected therewith or
board be and is hereby authorized to fix such remuneration as
incidental thereto.”
may be mutually agreed upon between the Board of Directors of
the Company and the Auditors.” By Order of the Board
For Coffee Day Enterprises Limited
SPECIAL BUSINESS:
Date: May 18th, 2017
Item No.4: Issue of Non - Convertible Debentures on Private
Placement Basis for an amount not exceeding Rs.300 crores Registered Office:
(Three Hundred Crores Only): 23/2, Coffee Day Square, Vittal Mallya Road, Bangalore-560001
To consider and if thought fit, to pass with or without modification, CIN: L55101KA2008PLC046866
the following Resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 42 and 71

Sd/-
of the Companies Act, 2013 (‘the Act’), Rule 14(2) of Companies
Sadananda Poojary
(Prospectus and Allotment of Securities) Rules, 2014 and other
Company Secretary & Compliance Officer
applicable provisions, if any, of the Act (including any statutory
FCS: 5223

312 | COFFEE DAY | ANNUAL REPORT 2016-17

NOTES:
1. Information under Regulation 36 of the SEBI (LODR) 2015 7. Copies of the Annual Report 2016-17, the Notice of the 9th
relating to Directors proposed to be appointed/ re-appointed are Annual General Meeting of the Company and instructions for
provided in Annexure to this Notice. e-voting, along with the Attendance Slip and Proxy Form, are
being sent by electronic mode only to all the members whose
2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL
email addresses are registered with the Company / Depository
GENERAL MEETING (THE “MEETING”) IS ENTITLED TO APPOINT A
Participant(s) for communication purposes unless any member
PROXY TO ATTEND AND VOTE ON A POLL IN HIS/HER STEAD AND
has requested for a hard copy of the same.
THE PROXY NEED NOT BE A MEMBER OF The Company. PROXIES
IN ORDER TO BE EFFECTIVE MUST BE RECEIVED AT The Company’S 8. Members may also note that the Notice of the 9th Annual
REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE General Meeting and the Annual Report 2016-17 will be available
COMMENCEMENT OF THE MEETING. PROXIES SUBMITTED ON on the Company’s website, www.coffeeday.com.
BEHALF OF LIMITED COMPANIES, SOCIETIES, PARTNERSHIP FIRMS
9. Shareholders, intending to require information about the
ETC. MUST BE ACCOMPANIED BY APPROPRIATE RESOLUTION/
Financial Accounts to be approved at the Meeting, are requested
AUTHORITY AS APPLICABLE, ISSUED ON BEHALF OF THE
to inform the Company at least a week in advance of their
NOMINATING ORGANIZATION.
intention to do so, so that the papers relating thereto may be
A PERSON CAN ACT AS A PROXY ON BEHALF OF MEMBERS made available, if the Chairman permits such information to be
NOT EXCEEDING FIFTY AND HOLDING IN THE AGGREGATE NOT furnished.
MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF
10. The Company has designated an exclusive e-mail id viz.,
The Company CARRYING VOTING RIGHTS. A MEMBER HOLDING
[email protected] to enable investors to register their
MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF The
complaints/ queries, if any.
Company CARRYING VOTING RIGHTS MAY APPOINT A SINGLE
PERSON AS PROXY AND SUCH PERSON SHALL NOT ACT AS A 11. The Annual Report of the Company for the year ended March
PROXY FOR ANY OTHER PERSON OR SHAREHOLDER. IN CASE OF 31, 2017 along with Notice, process and manner of remote
JOINT HOLDERS ATTENDING THE MEETING, ONLY SUCH JOINT e-voting, Attendance Slip and Proxy form are being sent by e-mail
HOLDER WHO IS HIGHER IN THE ORDER OF NAMES WILL BE to those members who have registered their e-mail address with
ENTITLED TO VOTE. the Company or with their Depository Participant or Registrar
and Share Transfer Agents of the Company. Members who are
3. A statement pursuant to section 102 of the Companies Act,
desirous to have a physical copy of the Annual Report should send
2013 setting out the material facts in respect of Special Business
a request to the Company e-mail id viz., [email protected]
under Item No. 4 is annexed hereto.
clearly mentioning their Folio number / DP and Client ID.
4. The business set out in the Notice will be transacted through
12. Relevant documents referred to in the accompanying Notice
E-voting system through NSDL. Complete details of the
and the Explanatory Statement are open for inspection by the
instructions for E-voting are annexed to this Notice. In accordance
members at the Registered Office of the Company on all working
with Regulation 44 of SEBI (LODR) 2015, the Company has provided
days, except Saturdays, Sundays and Bank Holidays during
the facility for voting through physical ballot for shareholder who
business hours up to the date of the Meeting.
do not have access to internet. Facility for voting through tablet
will also be provided to the shareholders at the Meeting who 13. Voting through electronic means pursuant to the provisions
have not cast their Ballot either through Ballot Paper or e-Voting. of section 108 of the Companies Act, 2013, Rule 20 and Rule 21
of Companies (Management and Administration) Rules, 2014,
5. Change of Address: Members are requested to notify any change
the Company is pleased to provide members facility to exercise
of address and bank details to their depository participants in
their right to vote at the 9th Annual General Meeting (AGM) by
respect of their holdings in electronic form.
electronic means and the business may be transacted through
6. The Securities and Exchange Board of India (SEBI) has mandated e-voting services provided by National Securities Depository
the submission of Permanent Account Number (PAN) by every Limited. (NSDL)
participant in securities market. Members holding shares in
14. Information and other instructions relating to remote e-voting
electronic form are, therefore, requested to submit the PAN to
are as under:
their Depository Participants with whom they are maintaining
their demat account(s). I. In compliance with provisions of Section 108 of the Companies

NOTICE | 313
 Act, 2013, Rule 20 of the Companies (Management and (iii) Click on Shareholder - Login
Administration) Rules, 2014 as amended by the Companies
(iv) Put user ID and password as initial password/PIN
(Management and Administration) Amendment Rules, 2015
noted in step (i) above. Click Login.
and Regulation 44 of LODR, the Company is pleased to
provide members facility to exercise their right to vote on (v) Password change menu appears. Change the
resolutions proposed to be considered at the 9th Annual password/PIN with new password of your choice with
General Meeting (AGM) by electronic means and the business minimum 8 digits/characters or combination thereof.
may be transacted through e-Voting Services. The facility of Note new password. It is strongly recommended not
casting the votes by the members using an electronic voting to share your password with any other person and
system from a place other than venue of the AGM (“remote take utmost care to keep your password confidential.
e-voting”) will be provided by National Securities Depository (vi) Home page of remote e-voting opens. Click on
Limited (NSDL). remote e-voting: Active Voting Cycles.
II. The facility for voting through tablet shall be made available at (vii) Select “EVEN” of Coffee Day Enterprises limited.
the AGM and the members attending the meeting who have
(viii) Now you are ready for remote e-voting as Cast Vote
not cast their vote by remote e-voting shall be able to exercise
page opens.
their right at the meeting through Tablet.
(ix) Cast your vote by selecting appropriate option and
III. The members who have cast their vote by remote e-voting
click on “Submit” and also “Confirm” when prompted.
prior to the AGM may also attend the AGM but shall not be
entitled to cast their vote again. (x) Upon confirmation, the message “Vote cast
successfully” will be displayed.
IV. The e-voting period commences on 11th September, 2017
(9:00 am) and ends on 13th September, 2017 (5:00 pm). During (xi) Once you have voted on the resolution, you will not
this period, members’ of the Company, holding shares either be allowed to modify your vote.
in physical form or in dematerialized form, as on the cut-off
(xii) Institutional shareholders (i.e. other than individuals,
date of 7th September, 2017, may cast their vote by remote
HUF, NRI etc.) are required to send scanned copy
e-voting. The e-voting module shall be disabled by NSDL for
(PDF/JPG Format) of the relevant Board Resolution/
voting thereafter. Once the vote on a resolution is cast by
Authority letter etc. together with attested specimen
the member, the member shall not be allowed to change it
signature of the duly authorized signatory(ies) who are
subsequently.
authorized to vote, to the Scrutinizer through e-mail
V. The process and manner for remote e-voting are as under: to [email protected] with a copy marked to
[email protected]
A. In case a Member receives an email from NSDL [for
members whose email IDs are registered with the B. In case a Member receives physical copy of the Notice of
Company/Depository Participants(s)] : AGM [for members whose email IDs are not registered with
the Company/Depository Participants(s) or requesting
(i) Open email and open PDF file viz; “Coffee Day remote
physical copy] :
e-voting.pdf” with your Client ID or Folio No. as
password. The said PDF file contains your user ID and (i) Initial password is provided as below/at the bottom of
password/PIN for remote e-voting. Please note that the Attendance Slip for the AGM :
the password is an initial password. If you are already
EVEN (e-voting Event Number) USER ID PASSWORD/PIN
registered with NSDL for e-Voting then you can use
your existing user ID and password. (ii) Please follow all steps from Sl. No. (ii) to Sl. No. (xii)
above, to cast vote.
(ii) Launch internet browser by typing the following URL:
https://www.evoting.nsdl.com/ VI. In case of any queries, you may refer the Frequently
Asked Questions (FAQs) for Members and remote

314 | COFFEE DAY | ANNUAL REPORT 2016-17

 e-voting user manual for Members available at the but shall not be allowed to vote again at the AGM.
downloads section of www.evoting.nsdl.com or call
XII. A person, whose name is recorded in the register
on toll free no.: 1800-222-990.
of members or in the register of beneficial owners
VII. If you are already registered with NSDL for remote maintained by the depositories as on the cut-off date
e-voting then you can use your existing user ID and only shall be entitled to avail the facility of remote
password/PIN for casting your vote. e-voting as well as voting at the AGM through tablet.

NOTE: Shareholders who forgot the User Details/ XIII. Mr. Harshavardhan R. Boratti, Company Secretary in
Password can use “Forgot User Details/Password?” or practice (Membership No. 31152) M/s HRB & Co., has
“Physical User Reset Password?” option available on been appointed for as the Scrutinizer for providing
www.evoting.nsdl.com. facility to the members of the Company to scrutinize
the voting and remote e-voting process in a fair and
In case Shareholders are holding shares in demat
transparent manner.
mode, USER-ID is the combination of (DPID+ClientID).
XIV. The Chairman shall, at the AGM, at the end of
In case Shareholders are holding shares in physical
discussion on the resolutions on which voting is to be
mode, USER-ID is the combination of (Even No+Folio
held, allow voting with the assistance of scrutinizer, by
No).
use of tablet for all those members who are present at
VIII. You can also update your mobile number and e-mail the AGM but have not cast their votes by availing the
id in the user profile details of the folio which may be remote e-voting facility.
used for sending future communication(s).
XV. The Scrutinizer shall after the conclusion of voting at
IX. The voting rights of members shall be in proportion the general meeting, will first count the votes cast
to their shares of the paid up equity share capital of at the meeting and thereafter unblock the votes
the Company as on the cut-off date of 7th September, cast through remote e-voting in the presence of at
2017. least two witnesses not in the employment of the
X. Any person, who acquires shares of the Company and Company and shall make, not later than three days of
become member of the Company after dispatch of the conclusion of the AGM, a consolidated scrutinizer’s
the notice and holding shares as of the cut-off date report of the total votes cast in favour or against, if any,
i.e. 7th September, 2017, may obtain the login ID and to the Chairman or a person authorized by him in
password by sending a request at [email protected]. writing, who shall countersign the same and declare
However, if you are already registered with NSDL for the result of the voting forthwith.
remote e-voting then you can use your existing user XVI. The Results declared along with the report of the
ID and password for casting your vote. If you forgot Scrutinizer shall be placed on the website of the
your password, you can reset your password by using Company www.coffeeday.com and on the website
“Forgot User Details/Password” or “Physical User Reset of NSDL immediately after the declaration of result by
Password?” option available on www.evoting.nsdl. the Chairman or a person authorized by him in writing.
com. The results shall also be immediately forwarded to the
XI. A member may participate in the AGM even after BSE Limited, Mumbai and the NSE India Limited.
exercising his right to vote through remote e-voting

NOTICE | 315
DETAILS OF DIRECTOR(S) SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL
MEETING PURSUANT TO REGULATION 36 OF THE SEBI (LODR) 2015
Name of the Director Malavika Hedge
Date of Birth/Age 12.06.1967/49 Years
Date of Appointment on the Board 20.06.2008
Qualification B.Com, Bangalore University.
Brief profile and nature of their expertise in Mrs. Malavika Hegde is a Non-Executive Director of our Company. She is the wife
specific functional areas of V. G. Siddhartha and has significant years of experience in the business of coffee
growing, procurement, processing, export and retail. She is in charge of the overall
responsibilities of operating the hospitality business since 2008.
Directorship held in other Companies 3*
Memberships / Chairmanships of committees Nil
across all other listed companies
Shareholding in the Company 1.47%
*List of Companies being part of Corporate Governance Report

316 | COFFEE DAY | ANNUAL REPORT 2016-17

EXPLANATORY STATEMENT TO BE ANNEXED TO THE NOTICE PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No.4: Issue of Non - Convertible Debenture on Private Consent of the Members is, therefore, sought in connection
Placement Basis with the aforesaid issue of debentures/bonds from time to time
NCD’S/Bonds/Other instruments including commercial paper and they are requested to authorize the Board (including any
issued on private placement basis is one of the important & cost Committee of the Board) to issue Non-convertible Debentures/
effective source of borrowing of the Company, The Company with Bonds during the FY 2017-18 on private placement basis upto
the intention to restructure its debt capital by repaying the existing Rs.300 crores as stipulated above, in one or more tranches.
debt, may raise NCD’s during FY 2017-18, the Board of Directors The Board recommends the Special Resolution set forth in Item
of the Company at its meeting held on 18th May, 2017 subject No. 4 of the Notice for approval of the Members. None of the
to the approval of Members in the general meeting proposed to Directors or Key Managerial Personnel of the Company including
issue Non-convertible Debentures/ Bonds to various person(s) their relatives are interested or concerned in the Resolution
on private placement basis, at such terms and conditions and at except to the extent of their shareholding, if any, in the Company.
such price(s) in compliance with the requirements of regulatory
By Order of the Board
authorities, if any and as may be finalized by the Board and/or
For Coffee Day Enterprises Limited
Committee of Directors. The amount to be raised by way of issue
of Nonconvertible Debentures on a private placement basis Date: May 18th, 2017
however shall not exceed Rs.300 crores (Rs.Three Hundred Crores)
Registered Office:
only in aggregate.
23/2, Coffee Day Square, Vittal Mallya Road, Bangalore-560001
It may be noted that Rule 14(2) of Companies (Prospectus and
CIN: L55101KA2008PLC046866
Allotment of Securities) Rules, 2014 read with Section 42 of
the Companies Act, 2013, allows a company to pass a special
resolution once in a year for all the offer or invitation for non- Sd/-
convertible debentures to be made during the year through a Sadananda Poojary
private placement basis in one or more tranches. Company Secretary & Compliance Officer
FCS: 5223

NOTICE | 317
 Route Map of AGM Venue
Global Village
Café Coffee Day,
RVCE Post, Mysore Road,
Mylasandra, Bangalore 560059
Karnataka

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Pick Up Facility Will Be Arranged FACILITYRVCE

* TRANSPORT From Bus Stop
WILL BE ARRANGED At10:15
FROM 10:30AM TOAm
11:00 AM ON AGM DATE, FROM RVCE BUS STOP TO REACH

318 | COFFEE DAY | ANNUAL REPORT 2016-17

 Coffee Day Enterprises Limited
CIN: L55101KA2008PLC046866
Registered Office: 23/2, Coffee Day Square, Vittal Mallya Road Bengaluru – 560 001
Phone: +91 (80) 40012345; Fax: +91 (80) 40012987
Website: www.coffeeday.com E-mail: [email protected]

ATTENDANCE SLIP

NAME & ADDRESS OF THE SHAREHOLDER FOLIO. NO.

DP ID:

CLIENT ID:

NO. OF SHARES

I hereby record my presence at the 9th Annual general Meeting of the Company at Café Coffee Day, Global village, RVCE Post, Mysore
Road, Mylasandra, Bangalore-560059 on Thursday the 14th September, 2017 at 11:00 AM

NAME OF THE SHAREHOLDER/PROXY SIGNATURE OF THE SHAREHOLDER/PROXY

*Strike out whichever is not applicable

 Coffee Day Enterprises Limited
CIN: L55101KA2008PLC046866
Registered Office: 23/2, Coffee Day Square, Vittal Mallya Road Bengaluru – 560 001
Phone: +91 (80) 40012345; Fax: +91 (80) 40012987
Website: www.coffeeday.com E-mail: [email protected]

PROXY FORM
Form No. MGT - 11
[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of
the Companies (Management and Administration) Rules, 2014]

Name of the Member

Registered Address

E-Mail ID

Folio No./DP ID-Client ID

I/We being the member(s) holding _____________ shares of above named Company, hereby appoint:

Name:__________________________________ Address: ____________________________________________________________

E-mail ID________________________________ Signature: ____________________________________________ Or failing him/her

Name:__________________________________ Address: ____________________________________________________________

E-mail ID________________________________ Signature: ____________________________________________ Or failing him/her

Name:__________________________________ Address: ____________________________________________________________

E-mail ID________________________________ Signature: ___________________________________________________________

as my / our proxy to attend and vote (on a poll) for me/us and on my / our behalf at the 9th Annual General Meeting of the Company to
be held on Thursday, September 14th , 2017 at 11.00 A.M. (IST), at “Café Coffee Day, Global village, RVCE Post, Mysore Road, Mylasandra,
Bangalore-560059” and at any adjournment thereof in respect of such resolutions asare indicated below:

Resolutions For Against

1. Adoption of Financial Statements and Reports of the Board of Directors and the Auditors thereon.
2. Re-appointment of Mrs.Malavika Hegde as Director
3. Ratification of appointment of Auditor, M/s.B.S.R & CO LLP, Chartered Accountants, (ICAI Regn No.
101248W/W-100022), as Statutory Auditors.
4. Issue of Non - Convertible Debentures on Private Placement Basis.

Signed this __________________________ day of __________________________ 2016

_______________________________ Affix Revenue _______________________________

Signature of Member(s) Stamp Signature of Proxy holder(s)
Re 1/-
Notes:
1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not
less than 48 hours before the commencement of the Meeting.
2. For the Resolutions, Statement setting out material facts thereon and notes, please refer to the Notice of the 9th Annual General
Meeting.
3. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in the aggregate not more than 10% of the
total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a Member holding more
than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other
person or Member.
Notice
Notice
23/2 Coffee Day Square,
Vittal Mallya Road,
Bengaluru 560001,
Karnataka, India.

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