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Coffee Day Enterprises Ltd.

BSE: 539436 Sector: Services
NSE: COFFEEDAY ISIN Code: INE335K01011
BSE LIVE 15:40 | 07 Dec 204.05 -0.30
(-0.15%)
OPEN

203.00

HIGH

207.40

LOW

203.00

NSE LIVE 15:31 | 07 Dec 204.00 0.25
(0.12%)
OPEN

204.00

HIGH

206.80

LOW

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OPEN 203.00
PREVIOUS CLOSE 204.35
VOLUME 1535
52-Week high 297.40
52-Week low 198.50
P/E 340.08
Mkt Cap.(Rs cr) 4203.43
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 203.00
CLOSE 204.35
VOLUME 1535
52-Week high 297.40
52-Week low 198.50
P/E 340.08
Mkt Cap.(Rs cr) 4203.43
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Coffee Day Enterprises Ltd. (COFFEEDAY) - Auditors Report

Company auditors report

To the Members of Coffee Day Enterprises Limited (erstwhile Coffee Day EnterprisesPrivate Limited)

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Coffee DayEnterprises Limited (erstwhile Coffee Day Enterprises Private Limited) (‘theCompany’) which comprises of the balance sheet as at 31st March 2016 the statementof profit and loss and the cash flow statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theAuditor’s judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of Affairs of the Companyas at 31 March 2016 and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure A a statement on the matters specified inParagraph 3 and 4 of 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 and the cash flow statementdealt with by this report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statements comply with theAccounting 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 as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (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 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

for B S R & Co. LLP

Chartered Accountants

Firm registration number: 101248W/W-100022

Supreet Sachdev

Partner

Membership number: 205385

Bangalore

20 May 2016

Annexure A to the Independent Auditor’s Report

The Annexure referred to in our Independent Auditor’s Report to the members ofCoffee Day Enterprises Limited (erstwhile Coffee Day Enterprises Private Limited)(‘the Company’) on the standalone financial statements for the year ended 31March 2016 we report that:

(i) (a) The Company has maintained proper records showing full particularsincluding quantitative 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 for the land taken onlease (for construction of building) duly registered with the appropriate authority.

(ii) The inventories of coffee beans have been physically verified by theManagement during the year. In our opinion the frequency of verification is reasonable.The discrepancies identified on physical verification of inventories between physicalstocks and book records were not material. However there is no physical inventory as atthe year end.

(iii) The Company has granted unsecured loans to the two wholly owned subsidiaryCompanies covered in the register maintained under Section 189 of the Act and;

(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 the case of the loans granted to the companies listed in the register maintainedunder Section 189 of the Act the loans are interest free and repayable on demand. TheCompany has not made any demand for repayment during the year though there has been apre-payment of the loans by the borrower.

(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 usand based on the legal opinion received by the Company as referred to in note 32 of thefinancial statements the Company has complied with the provisions of Section 185 and 186of the Act with respect to loans and investments made and security and guarantee given.

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

(vi) The Central Government of India has not prescribed the maintenance of costrecords under Section 148(1) of the Act for any of the services rendered by the Company.

(vii) (a) According to the information and explanations given to us and on thebasis of our examination of the records of the Company amounts deducted/ accrued in thebooks of account in respect of undisputed statutory dues including Provident FundSales-tax Value added tax have been regularly deposited during the year by the Companywith the appropriate authorities except for undisputed Income tax and Service tax dueswhich have not been regularly deposited with the appropriate authorities and there havebeen serious delays in a large number of cases. As explained to us the Company did nothave any dues on account of Employees’ State Insurance Duty of Customs Duty ofExcise 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 31 March 2016 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 ofIncome Tax Sales tax Service tax and Value added tax which have not been deposited withthe appropriate authorities on account of any dispute.

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

(ix) The Company has raised monies by way of an initial public offer during theyear and term loans. In our opinion and according to the information and explanationsgiven to us the monies raised by way of an Initial Public Offer and term loans have beenutilized for the purposes for which they were raised.

(x) According to the information and explanations given to us no 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 ofour examination 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 usthe Company 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 tous and 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 hasnot made any preferential allotment or private placement of shares or convertibledebentures during the year.

(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.

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

for B S R & Co. LLP

Chartered Accountants

Firm registration number: 101248W / W-100022

Supreet Sachdev

Partner

Membership No.: 205385

Bangalore

20 May 2016

Coffee Day Enterprises Limited

(erstwhile Coffee Day Enterprises Private Limited)

Annexure B to the Independent Auditors’ Report Report on the Internal FinancialControls 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 reporting of Coffee DayEnterprises Limited (erstwhile Coffee Day Enterprises Private Limited) ("theCompany") as of 31 March 2016 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that 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 safeguardingof its 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 Act.

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 deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgement 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company’s internal financial control overfinancial reporting includes those policies and procedures that:

1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the Company; and

3) that provide reasonable assurance regarding prevention or the timely detection ofunauthorised acquisition use or disposition of the Company’s assets that could havea material effect on the concerned 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 2016 based on theinternal controls over financial reporting criteria established by the Company consideringthe essential components of internal controls 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 registration number: 101248W/W-100022

Supreet Sachdev

Partner

Membership number: 205385

Bangalore

20 May 2016

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