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Coffee Day Enterprises Ltd.

BSE: 539436 Sector: Services
NSE: COFFEEDAY ISIN Code: INE335K01011
BSE LIVE 15:49 | 17 Nov 225.85 6.45
(2.94%)
OPEN

224.80

HIGH

228.00

LOW

221.00

NSE 15:59 | 17 Nov 225.80 5.80
(2.64%)
OPEN

224.80

HIGH

228.10

LOW

222.10

OPEN 224.80
PREVIOUS CLOSE 219.40
VOLUME 11206
52-Week high 276.85
52-Week low 190.50
P/E
Mkt Cap.(Rs cr) 4,653
Buy Price 0.00
Buy Qty 0.00
Sell Price 225.85
Sell Qty 65.00
OPEN 224.80
CLOSE 219.40
VOLUME 11206
52-Week high 276.85
52-Week low 190.50
P/E
Mkt Cap.(Rs cr) 4,653
Buy Price 0.00
Buy Qty 0.00
Sell Price 225.85
Sell Qty 65.00

Coffee Day Enterprises Ltd. (COFFEEDAY) - Auditors Report

Company auditors report

To

The Members of

Coffee Day Enterprises Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying financial statements of Coffee Day EnterprisesLimited (‘the Company') which comprise the balance sheet as at 31st March 2017the statement of profit and loss (including other comprehensive income) the statement ofcash flows and the statement of changes in equity for the year then ended and a summaryof significant accounting policies and other explanatory information (herein afterreferred to as "Standalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS financial statements

The Company's Board of Directors is responsible for the preparation of these StandaloneInd AS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia as specified under section 133 of the Companies Act 2013 (‘the Act') read withrelevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Standalone Ind AS financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the Standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expressing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the Standalone IndAS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give a true and fairview in conformity with the accounting principles generally accepted in India of thefinancial position of the Company as at 31st March 2017 its financial performanceincluding other comprehensive income for the year then ended and its cash flows and thechanges in equity for the year then ended.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in Annexure A a statement on the matters specified in paragraph 3 and 4of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act we report that:

(a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) the balance sheet the statement of profit and loss (including other comprehensiveincome) statement of changes in equity and the statement of cash flows dealt with by thisreport are in agreement with the books of account;

(d) in our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of the written representations received from the directors of theCompany as on 31st March 2017 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2017 from being appointed as a director interms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in ‘Annexure B'; and

(g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

a. The Company does not have any pending litigations which would impact its financialposition;

b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

c. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

d. The Company has provided requisite disclosures in its Standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note 39 to the Standalone Ind AS financialstatements.

for B S R & Co. LLP
Chartered Accountants
Firm's registration number: 101248W/W-100022
Supreet Sachdev
Bangalore Partner
18 May 2017 Membership number: 205385

Annexure A to the Independent Auditor's Report

As referred to in our Independent Auditor's Report to the members of the Company on theStandalone Ind AS financial statements for the year ended 31st March 2017 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified every year. In our opinion the periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. In accordance with the programme physical verification of fixed assets wascarried out during the year and no material discrepancies were noted.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records we have verified the lease agreement which is in the name ofthe Company for the land taken on lease (for construction of building) duly registeredwith the appropriate authority.

(ii) According to the information and explanations given to us and on the basis of ourexamination of the records the inventories of coffee beans have been physically verifiedby the Management during the year. In our opinion the frequency of verification isreasonable. The discrepancies identified on physical verification of inventories betweenphysical stocks and book records were not material. However there is no physicalinventory as at the year end.

(iii) According to the information and explanations given to us and on the basis of ourexamination of the records the Company has granted unsecured loans to the two whollyowned subsidiary Companies covered in the register maintained under Section 189 of the Actand;

(a) In our opinion the rate of interest and other terms and conditions on which loanshad been granted to the companies listed in the register maintained under Section 189 ofthe Act were not prima facie prejudicial to the interest of the Company.

(b) In case of loans granted to the subsidiaries listed in the register maintainedunder Section 189 of the Act the loans and interest are repayable on demand. As per theinformation and explanation given to us the borrowers have been regular in the repaymentof the principal amount. However no demand for interest is made by the Company during theyear.

(c) There are no overdue amounts in respect of the loan granted to companies listed inthe register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respect toloans and investments made and security and guarantee given.

(v) The Company has not accepted any deposits from the public.

(vi) According to the information and explanation given to us the Central Governmentof India has not prescribed the maintenance of cost records under Section 148(1) of theAct for any of the services rendered and goods sold by the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Service taxSales-tax Value added tax and other material statutory dues have generally been regularlydeposited during the year by the Company with the appropriate authorities except forundisputed Income tax dues which have not been regularly deposited with the appropriateauthorities and there have been delays in a number of cases. As explained to us theCompany did not have any dues on account of Employees' State Insurance Duty of CustomsDuty of Excise and Cess during the year.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Sales-tax Value added tax Income tax Service taxand other material statutory dues were in arrears as at 31st March 2017 for a period ofmore than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofProvident Fund Sales-tax Value added tax Income tax Service tax and other materialstatutory dues which have not been deposited with the appropriate authorities on accountof any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to its bankers financial institutionsand debenture holders. The Company does not have any dues to the government.

(ix) According to the information and explanations given to us and on the basis of ourexamination of the records the Company did not raise any money by way of initial publicoffer or further public offer (including debt instruments) during the year. In our opinionand according to the information and explanations given to us the term loans taken by theCompany were applied for the purposes for which they were raised.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the Company has not paid any ManagerialRemuneration during the year. Accordingly para 3(xi) of this Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) In our opinion and according to the information and explanations given to usand based on an examination of the records of the Company all transactions with therelated parties are in compliance with sections 177 and 188 of Companies Act 2013 whereapplicable and the details have been disclosed in the financial statements as required bythe applicable accounting standards.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or convertible debenturesduring the year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transaction with directors or person connected with him asreferred to in Section 192 of Companies Act 2013. Accordingly paragraph 3(xv) of theOrder is not applicable.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

for B S R & Co. LLP
Chartered Accountants
Firm's registration number: 101248W/W-100022
Supreet Sachdev
Bangalore Partner
18 May 2017 Membership number: 205385

Annexure - B to the Auditor's Report

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 (‘the Act')

We have audited the internal financial controls over financial reporting of Coffee DayEnterptises Limited (‘the Company') as of 31st March 2017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(‘the Guidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

for B S R & Co. LLP
Chartered Accountants
Firm's registration number: 101248W/W-100022
Supreet Sachdev
Bangalore Partner
18 May 2017 Membership number: 205385