Notes to Accounts of Coffee Day Enterprises Ltd.

Mar 31, 2017

(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 capitalization of the reserves lying to the credit of the securities premium account of the Company.

* 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)]

** As per the requirement of section 52 of the Companies Act 2013, the Company has utilized 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 utilized 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 recognized and accumulated under the heading of retained earnings. At the end of the year, the profit after tax is transferred from the statement of profit and loss to the retained earnings account.

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.

- 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 nonconvertible 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)

- 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.

- 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 installments 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.

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.

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.

- 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 nonconvertible 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 nonconvertible 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 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.

(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 a ailment 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 a ailment 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;

- 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 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 any time 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.

* 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.

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 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. Unallowable expenses comprises of certain other corporate costs.

The following summary describes the operations in each of the Company''s reportable segments:

C Geographical information

The Company''s operations are based only in India. Hence all of the revenues and the noncurrent 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

* 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.

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.

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.

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).

As per the terms set out in the prospectus on "Utilization of IPO Proceeds", the Company was required to utilize 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 unutilized as at 31 March 2016 has been entirely utilized by the Company towards repayment/ prepayment of loan and financing of coffee business during the year ended 31 March 2017.

The Company has not disclosed the fair values for financial instruments for loans (current and noncurrent), other financial assets (current and noncurrent) , trade receivables, cash and cash equivalents and bank balances other than cash and cash equivalents, Trade payables, other financial liabilities (current and noncurrent) 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.

The Company has not disclosed the fair values for financial instruments for loans (current and noncurrent), other financial assets (current and noncurrent) , trade receivables, cash and cash equivalents and bank balances other than cash and cash equivalents, Trade payables, other financial liabilities (current and noncurrent) 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.

The Company has not disclosed the fair values for financial instruments for loans (current and noncurrent), other financial assets (current and noncurrent) , trade receivables, cash and cash equivalents and bank balances other than cash and cash equivalents, Trade payables, other financial liabilities (current and noncurrent) 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 judgment and estimates made in determining the fair values of the financial instruments that are

a) recognized and measured at fair value

b) measured at amortized 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:

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 maximize 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:

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.

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.

(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 optimizing 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.

(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 optimizing 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.

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.

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).

(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 recognize 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 amortized 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 amortized 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 derecognized 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.

* 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 recognized in property, plant and equipment. This amount has been recognized 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 recognized in investments. This dividene income recognized against the same has been recognized 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 reassess the and classified the tax related assets classified under other noncurrent assets as per the previous GAAP amounting 35.59 million as on the date of transition ( 31 March 2016: Rs.28.22 million) 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 recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

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 recognized 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 recognized 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 equalization reserve

Under the previous GAAP, lease payments under an operating lease shall be recognized as an expense on a straight-line basis over the lease term. Under Ind AS, if the payments to the less or are structured to increase in line with expected general inflation to compensate for the less or’s expected inflationary cost increase, then lease payments are not straight-lined. Accordingly, the Company has reversed rent equalization reserve under Ind AS. Difference due to this has been recognized as rent expense. Consequent to this change, the amount of rent equalization 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

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Mar 31, 2016

1 Background

Coffee Day Enterprises Limited (erstwhile Coffee Day Enterprises Private Limited) (''CDEL'' or ''the Company'') was incorporated as a private limited company under the Companies Act, 1956 on 20 June 2008 by conversion of erstwhile partnership firm M/s Coffee Day Holding Co. The registered office of the Company is located in Bangalore, India. The Company converted into a public Company during the year 2014-15. During the year, the Company undertook an Initial Public Offer of equity shares and subsequently got the equity shares listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) effective 2 November 2015.

CDEL is the holding company of the Coffee Day Group. The Company owns and operates a resort and also renders consultancy services. The Company is also engaged in the trading of coffee beans.

1.1 The details of subsidiary companies, joint ventures and associates of the Company, together with the proportion of shareholding by the Company are as follows:

2 Leases

The Company leases land for operating the resort under a non-cancellable operating lease agreement. The Company intends to renew such leases in the normal course of its business. Total rental expense under non-cancellable operating lease was Rs. 6.32 million (Previous year: Rs. 6.32 million).

Future minimum lease payments under non-cancellable operating lease as at 31 March 2016 are as follows:

3 Related parties disclosures A. Enterprises where control exists

- The related parties where control exists also include subsidiaries as referred in Note 1.1

IB. Parties which are under common control and with whom transactions have taken place:

- Sivan Securities Private Limited

- Mysore Amalgamated Coffee Estates Limited

- Coffee Day Global Limited

C. Key management personnel

Executive key management personnel represented on the Board of the Company are:

- Mr. V.G. Siddhartha

- Mr. Sadananda Poojary

- Mr. R. Ram Mohan

The non-executive directors on the Board of the Company are:

- Mr. Sanjay Nayar

- Mrs. Malavika Hegde

- Mr. S V Ranganath

- Mr. Albert Hieronimus

- Mr. M D Mallya

4 Segment reporting

The Company is the holding company of the Coffee Day Group. The subsidiary companies have business interests across multiple sectors such as coffee and related business, leasing of commercial office space, financial services, integrated multimodal logistics, hospitality and IT/ ITeS. Other than being an investment company, on a standalone basis, the Company owns and operates a resort and also renders consultancy services.

Effective 1 April 2014, the Company has reorganized its business units. Consequently the financial reporting of the business unit performance to the Management has also been updated with the new organization structure. Pursuant to such re-organisation, Hospitality and Investment operations are identified as reportable business segments.

The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.

Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other costs, wherever allocable, are apportioned to the segments on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company therefore believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are separately disclosed as ''unallocated''.

The only geographical segment is India. Since the relevant information is available from the balance sheet and statement of profit and loss itself, the Company is not required to disclose the secondary segment information as per Accounting Standard 17 - Segment Reporting.

5 As per the requirements of Section 71(4) of the Companies Act 2013, the Company is required to create a Debenture Redemption Reserve (''DRR'') to which adequate amounts shall be credited out of its profits every year until such debentures are redeemed, and shall utilize the same exclusively for redemption of a particular set or series of debentures only. In the absence of profits, the Company has not transferred any amount to DRR during the year.

6 During the year, the Company has completed the initial public offer (IPO) and raised a total capital of Rs. 11,500 million by issuing 35,060,975 equity shares of Rs 10 each at a premium of Rs 318 per share. The equity shares of the Company were listed on the Bombay Stock Exchange and National Stock Exchange effective 2 November 2015. The proceeds from IPO is Rs. 10,738.63 million (net of issue expenses).

As per the terms set out in the prospectus on "Utilisation of IPO Proceeds", the Company was required to utilise IPO proceeds aggregating Rs 4,100 million towards repayment of existing loan as well as financing of coffee business in one of its subsidiary company Coffee Day Global Limited. The Company has transferred IPO proceeds to its Subsidiary Company by investing in Compulsorily Convertible Debentures having face value of Rs. 4,100 million. Of the Rs 4,100 million, the Subsidiary Company has utilized an amount of Rs. 2,459 million towards repayment of loan and financing of the coffee business and the balance unutilised amount of Rs. 1,641 million is maintained in fixed deposits with banks.

Expenses incurred by the Company aggregating to Rs. 761.37 million (including service tax), in connection with the IPO have been adjusted towards the securities premium in accordance with Section 52 of the Companies Act, 2013, of which Rs.47.37 million is accrued and maintained in a separate escrow account.

7 Deferred Taxes

In accordance with Accounting Standard 22 - "Accounting for taxes on income", the management believes that there is no virtual certainty supported by convincing evidence for recognising deferred tax asset on business losses incurred during the current as well as earlier years.

8 Corresponding figures for the previous year have been regrouped/ reclassified, where necessary, to conform to the current year''s classification.