Académique Documents
Professionnel Documents
Culture Documents
Chapter 1 INTRODUCTION
1.1 ABOUT US
1.2 VISION
1.3 MISSION
Chapter 2 SUBSIDIARIES
2.1 CCD GLOBAL
2.2 SICAL
2.4 TANGLIN
i. INDEPENDENT DIRECTOR
ii. NON-INDEPENDENT DIRECTOR
VISION showing the world where coffee can take us. OUR
CULTURE IS WHAT WILL DETERMINE WHERE WE
TAKE COFFEE. We are right where coffee is. From nurturing
each plant, to coaxing the perfect favor, blend and brew into
each cup we serve in our cafés, we are also where coffee is
going next.
The first CCD outlet was set up on July 11, 1996, at Brigade
Road, Bangalore, Karnataka. It was founded by V.G.
Siddhartha.
MISSION
INTANGIBILITY:
Intangibility is an important consideration that complicates the
functional responsibility of a marketing manager, especially
while influencing and motivating the prospects/customers. The
goods of tangible nature can be displayed, the prospects or
buyers can have a view and they can even test and make a trial
before making the buying decisions. The selling processes are
thus found easier. We are aware of the fact that services are of
intangible nature and it is intangibility that complicates the task
of decision-makers.
Perishability:
Another point complicating the task of a professional is the
nature of perishability that we find in the services. The goods if
not sold today can be stored, preserved for further selling. Thus,
the risk element is here in a different form. But in the context of
services, if we fail to sell the services, it is lost only not for
today but even for the future. If a labour stops to work, if a seat
in the aircraft remains unsold, if a bedroom in a hotel remains
unbooked, a chair in a cinema hall remains vacant; we find the
business non-existent and the opportunities are lost and lost
forever. The services can’t be stored or preserved .
INSEPARABILITY:
This is also a feature that complicates the task of professionals
while marketing the services. The inseparability focuses on the
fact that the services are not of separable nature. Generally, the
services are created and supplied simultaneously. Like the
dancers, musicians, dentists and other professionals create and
offer services at the same time. In other words, the services and
their providers are the same. Donald Cowell says, “Goods are
produced, sold and then consumed whereas the services are sold
and then produced and consumed.”
HETEROGENEITY:
Another feature is heterogeneity which makes it difficult to
establish standard. The quality of services can’t be standardized.
The prices charged may be too high or too low. In the case of
entertainment and sports, we find the same thing. The same type
of services can’t be sold to all the customers even if they pay the
same price.
OWNERSHIP:
It is also ownership that makes it significant to market the
services in a bit different way. The goods sold are transferred
from one place to another, the ownership is also transferred and
this provides to the buyers an opportunity to resell. In the case
of services, we don’t find the same thing. The users have just an
access to the service. As for example, a consumer can use
personal care services or Medicare services or can use a hotel
room or swimming pool, however the ownership rests with the
providers.
SIMULTANEITY:
Services can’t be delivered to customers or users. Services don’t
move through the channel of distribution. For availing the
services, it is essential that the users are brought to the providers
or the providers go to the users. It is right to say that the services
have limited geographical areas.
QUALITY MEASUREMENT:
Nature of Demand:
AFFORDABILITY
what worked best for the Indian cafe coffee chain was its
combination of aspiration and affordability.
ACCESSIBILITY
It wasn’t just restricted to the metro cities. If there’s one singular
claim that Coffee Day can makeover all of its rivals, it is that it
took coffee to cities and towns across the country, and offered
the same experience everywhere.
ACCEPTABILITY
Today, coffee is not just seen as a beverage but a social glue that
brings people together to relax and unwind.
COMPETITOR ANALYSIS:
Cafe Coffee Days covers much of the popular consumer brands
like Kit Kat and Nescafe and so on. About 29 brand names
amongst all of its brand names, each brand name earned revenue
of about $1billion in 2010. Its major part of sale remains in The
United States and Canada constituting about 42% of its all sales.
In Europe and U.S. the leading major brand names offered by
Cafe Coffee Day in these states have a terrific trustworthy share
of market. Similarly Cafe Coffee Day, Unilever and DANONE
are two large markets of food and beverages along with its
primary rivals. In the year 2010, Cafe Coffee Day had actually
made its yearly earnings by 26% boost due to the fact that of its
increased food and beverages sale particularly in cooking stuff,
ice-cream, and drinks based on tea, and frozen food. On the
other hand, DANONE, due to the increasing costs of shares
resulting a boost of 38% in its profits. Cafe Coffee Day lowered
its sales cost by the adaptation of a new accounting procedure.
Unilever has number of employees about 230,000 and functions
in more than 160 nations and its London headquarter also. It has
actually ended up being the second biggest food and beverage
market in the West Europe with a market share of about 8.6%
with only a difference of 0.3 points with Cafe Coffee Day.
Unilever shares a market share of about 7.7 with Cafe Coffee
Day ending up being first and ranking DANONE as third. Cafe
Coffee Day draws in local clients by its low expense of the
product with the regional taste of the products keeping its first
place in the worldwide market. Cafe Coffee Day business has
about 280,000 workers and functions in more than 197 nations
edging its competitors in numerous areas. Cafe Coffee Day has
actually likewise decreased its expense of supply by introducing
E-marketing in contrast to its competitors.
SUBSIDIARIES:
WAY2WEALTH
TANGLIN
Founded in 1995 as the developer of technology parks and SEZs
for the Coffee Day Company, Tanglin Developments offers
bespoke infrastructural facilities for Technology enterprises.
TDL has two technology parks, 'Global Village' and 'Tech Bay',
situated in Bangalore and Mangalore respectively.
THE SERAI
The coffee market in India has been growing due to the demand
for Ready to drink coffee and has become a part of an
individual’s daily consumption basket. Due to changing
cultures, consumers are becoming aware of domestic and
foreign brands, which are boosting the consumption levels. The
export promotion schemes and other subsidies by the GOI, and
increasing trend of eating out coupled with the rising share of
young population has driven the market. Well-established coffee
shop chains, such as Cafe Coffee Day (CCD) and Barista,
enhanced their pan-India presence in the latter part of the review
period. In 2010, Cafe Coffee Day and Barista had 970 and 200
stores, respectively, and they aim to continue expanding in the
next few years. Meanwhile, several relatively new players, such
as Costa Coffee, Coffee Bean, Gloria Jean’s and Java Coffee,
are trying to establish a Electronic copy available at:
https://ssrn.com/abstract=1920827 footing in Indian coffee
retailing. Both these factors drove on-trade consumption of fresh
coffee beans in 2010, with volumes growing by 12%. On-trade
sales have emerged as the primary sales channel for fresh coffee
beans, in the absence of any appreciable off-trade consumption.
In 2010, the average bill amount at coffee outlet was between
rupees 135 and 150. This is expected to rise to rupees 245 by
2016. With customers paying significant amount for their
coffees, they are also expecting a lot from an outlet. Factors
such as menu, ambience, service and brand name are playing an
important role while choosing a coffee outlet. Indian Coffee
Chains market is quite mature which is evident from the fact
that Café Coffee Day alone maintains more than 1000 Café’s in
141 cities in India. This forms the main focus of this project.
Right, this is where we tell you stuff that you probably already
know, but just in case. Caffeine was put through some really
rigorous tests by the up-all-night researchers at MIT and they
found that it was a 'mind-accelerating mood-booster'. We're sure
you could do with some of that. That's not all, caffeine improves
mental performance, improves reaction time and attention span.
Now there's your explanation for all the great ideas you've had
while at a CCD, right? Coffee also reduces the risk associated
with certain cancers, cirrhosis of the liver and other scary stuff
that we're too grossed out to write here. But it's true! Drink
coffee, stay happy, stay healthy!
HOW IT WORKS
Assam Tea
Aztec single origin Coffee
Café Americano
Café Frappe
Café Latte
Café Mocha
Classic Cappuccino
Classic Lemonade
Cool Blue
Crunchy Frappe
Darjeeling Tea
Dark Frappe
Devil's Own
Enliven With Chamomile
Eye-opener Espresso
Filter Coffee
Green Tea
Hot Gourmet Cocoa
Inverted Cappuccino
Kaapi Nirvana
Masala Chai
Rasmalai Smoothie
Reverse With Oxbloxx
Tropical Iceberg
Vanilla Cappuccino
Vanilla Latte
Vegan Shake
Direct Competitors:
• Barista
• Cafe Mocha
• Costa Coffee
• Beyond Coffee
• Gloria Jeans
• Minerva Coffee Shop
Indirect Competitors:
• McDonald
• Haldirams
Global Competitors:
• Star Bucks
CORPORATE INFORMATION
Mr. V. G. Siddhartha
Chairman and Managing Director
Mr. S.V. Ranganath
Independent Director
Mr. M. D. Mallya
Independent Director
Dr. Albert Hieronimus
Independent Director
Mr. Sanjay Omprakash Nayar
Non-Executive, Nominee Director
Mrs. Malavika Hegde
Non-Executive, Non-Independent Director
“WHERE OTHERS SEE A BEVERAGE, WE SEE A
WORLD OF POSSIBILITIES.”
THE COFFEE DAY STORY
What started as a vision to pioneer café culture in a fast-
changing India post economic liberalization, soon snowballed
into us becoming the largest café chain in the country? Today,
we have established the largest footprint of café outlets in India
– spread across over 200 cities. Since our first year as a public
listed company in 2015, we have continued to strengthen brand
loyalty by focusing on customer delight, product innovation and
value for both customer as well as shareholders.
1,722 Cafés
47,747 Vending Machines
532 Xpress kiosks
403 Fresh & Ground outlets
THE PORTFOLIO
INTERNATIONAL CAFÉS
Our first international café opened in Vienna in the year 2005.
Today, we have 18 outlets in places like Austria, the Czech
Republic, Egypt, Malaysia and Nepal, helping us take the fne
taste of Indian coffee to the world.
TECHNOLOGY PARKS:
Our wholly-owned subsidiary, Tanglin Developments Limited,
is engaged in the business of developing technology parks in
Bangalore and Mangalore. This year Tanglin has moved to the
occupancy of 3.46 million sqft from 3.20 million sqft at the
same time last year.
LOGISTICS
Our subsidiary SICAL Logistics Ltd was founded in the year
1955. It is India’s leading provider of integrated logistics
solutions with over 6 decades of experience. With deep
knowhow in handling bulk commodities over the decades,
SICAL has entered the mining space and currently offers mining
and cargo handling solutions. It has also entered the Retail
Supply Chain space by offering warehousing facilities along
with last mile distribution and cold chain services.
SICAL
DIVIDEND:
The Board of Directors of the Company does not recommend
any dividend for the financial year 2017-18.
AUDIT COMMITTEE:
The Board has constituted an Audit Committee comprising of
Mr. S.V. Ranganath as Chairman, Dr. Albert Hieronimus and
Mr. V.G. Siddhartha as its Members. There have been no
instances during the year where recommendations of the Audit
Committee were not accepted by the Board. The details of the
composition of the Board and its Committees and number of
meetings held and attendance of Directors at such meetings are
provided in the Corporate Governance Report, which forms part
of the Annual Report.
PARTICULARS OF EMPLOYEES:
As stated in provisions of Section 197(12) of the Act read with
Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, as
amended from time to time, a statement showing the names and
other particulars of the employees drawing remuneration in
excess of the limits set out in the said rules which includes the
name of top 10 employees in terms of remuneration, forms part
of this annual report. Pursuant to the provisions of Section
136(1) of the Act, the Board report is being sent to the
shareholders including the said statement.
Disclosure pertaining to the remuneration as required under
Section 197(12) of the Act read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is provided in “Annexure-8”.
GREEN INITIATIVES:
In commitment to keeping in line with the Green Initiative and
going beyond to it, an electronic copy of the Notice of the 10th
Annual General Meeting of the Company is sent to all Members
whose email addresses are registered with the
Company/Depository Participant(s). For members who have not
registered their e-mail addresses, physical copies are sent
through the permitted mode.
Operating profit:
Operating profit (EBITDA) increased by 21% to Rs.8,253
million during 2017-18 from Rs.6,812 million in 2016-17,
including an exceptional gain of Rs. 532 Million on account of
sale of equity stake in Global Edge Software Limited largely
because of better financial performance of café business and
integrated multimodal logistics business.
Depreciation:
Depreciation for the year under review stood at Rs.2, 604
million, compared with Rs. 2,268 million recorded in the
previous year, up 15% on a y-o-y basis.
Finance costs:
Finance cost for the year under review increased by 10% from
Rs. 3,172 million to Rs. 3,491 million because of increase in the
gross debt.
Net profit
Consolidated net profit attractable to the owners for the year
under review stood at Rs. 1063 Million over Rs. 470 Million in
the previous financial year which includes exceptional gain of
Rs. 388 Million on account of sale of equity stake in Global
Edge Software Limited.
Balance Sheet Analysis
Net worth
The Company’s net worth stood at Rs. 30,155 million as on 31st
March, 2018, increasing by 6%, compared with Rs. 28,483
million as on 31st March, 2017. The net worth comprised paid-
up equity share capital amounting to Rs. 2,113 million as on
March 31, 2018 (211,251,719 equity shares of Rs. 10 each fully
paid up) and Non-controlling interests of Rs. 6,379 million. The
Company’s other equity stood at Rs. 21,663 million as at 31st
March 2018.
Loan profile
The total loan funds stood at Rs. 50,499 million while long-term
borrowings stood at Rs. 42,390 million. The Company’s net
debt as on 31st March, 2018 stood at Rs. 33,238 million.
Liabilities
Non-current liabilities (excluding borrowings) stood at Rs.
2,106 million, comprising of other financial liabilities Rs. 1,327
million, deferred tax liabilities Rs. 361 million, other non-
current liabilities Rs. 254 million and provisions amounting to
Rs. 164 million.
Current liabilities (excluding borrowings of Rs. 8,109 million
and current maturities of long-term borrowings amounting to
Rs. 10,464 million) stood at Rs. 6,000 million, comprising of
other financial liabilities (excluding current maturities of long-
term borrowings) of Rs. 3,343 million, trade payables of Rs.
1,325 million, other current liabilities Rs. 885 million, current
tax liabilities Rs. 411 million and provisions amounting to Rs.
36 million.
Total assets
The Company’s total assets increased to Rs. 88,759 million in
2017-18 from Rs. 80,252 million in 2016-17, representing an
increase of 11%. Capital work-in-progress (WIP) and
investment property under development for the year increased
by 11% to Rs.12,623 million in 2017-18, compared with Rs.
11,363 million in 2016-17 on account of ongoing construction in
our subsidiary engaged in the business of leasing of commercial
office space and further additions by integrated multimodal
logistics business.
Investments
The Company’s investments (current and non-current) including
equity accounted investees during the year under review
increased to Rs. 7,161 million from Rs. 6,641 million in the
previous year, an increase of 8% over the previous year.
Current and Non-current assets
Operational overview
COFFEE BUSINESS
HIGHLIGHTS, 2016-17
Retail Gross Revenue at Million; up 12% - Rs 15907
YoY Retail EBIDTA at million; up 14%- Rs 2906
Outlook
According to TechSci Research report, “India Coffee
Shops/Cafés Market Forecast, Consumer Survey and
Opportunities, 2021”, coffee shops / cafés market in India is
projected to grow at a CAGR of over 11% during 2017-2021, on
account of the growing coffee culture among young population,
increasing urbanization, rising disposable income levels and
changing eating and drinking preferences of consumers.
Changing work patterns of business executives is also driving
the demand for such coffee shops/cafés, as these outlets offer
services such as free Wi-Fi, entertainment zones, etc.
“In India, coffee shops/cafés market is in the developing stage,
with the majority of demand for coffee beverages emanating
from urban centers such as New Delhi, Mumbai, Bangalore,
Chennai, Hyderabad and Kolkata. In addition to metros and Tier
I cities, new companies and leading market players are targeting
expansion to Tier II and Tier III cities. This, coupled with the
implementation of various government plans to develop smart
cities, etc., is projected to drive growth in the Indian market for
coffee shops/cafés over the next five years.”, said Mr. Karan
Chechi, Research Director with TechSci Research, a research
based global management consulting firm.
With the growing influence from coffee chains like Café Coffee
Day, Starbucks, Costa Coffee etc., coffee consumption is
increasing in India. This trend is gaining momentum in the
northern and western part of the country, where traditionally the
consumers were tea drinkers. In addition, the increase in coffee
dispensed by vending machines has helped to drive the out-of-
house consumptions especially in offices and on-the-go.
HOSPITALITY BUSINESS:
The Company owns and operates luxury boutique resorts, one
directly through our Company, and two through our wholly-
owned subsidiary, Coffee Day Hotels & Resorts Private Limited
(CDHRPL), under the brand ‘The Serai’. These resorts are
located at Chikmagalur, Bandipur and Kabini, all in Karnataka.
The Company also with management control holds a minority
interest in a luxury resort in the Andaman and Nicobar islands.
Revenue from our hospitality business increased by 5.6% from
Rs. 355 million in 2016-17 to Rs. 375 million in 2017-18.
Outlook:
The Indian tourism and hospitality industry has emerged as one
of the key drivers of growth among the services sector in India.
Tourism in India has significant potential considering our rich
cultural and historical heritage, variety in ecology, terrains and
places of natural beauty spread across the country. Tourism is
also a potentially large employment generator besides being a
significant source of foreign exchange for the country. India's
Foreign Exchange Earnings (FEEs) increased by 17.6 % year-
on-year in January 2018 over January 2017. Source: IBEF
MARKET SIZE:
India is the most digitally-advanced traveller nation in terms of
digital tools being used for planning, booking and experiencing
a journey. India’s rising middle class and increasing disposable
incomes have continued to support the growth of domestic and
outbound tourism. Foreign Tourist Arrivals (FTAs) in India
increased 8.4 per cent year-on-year to 1.06 million and the
number of FTAs on e-tourist visa increased 58.5 per cent to 2.40
lakh foreign tourist as per Ministry of Tourism, Government of
India. India is expected to move up five spots, to be ranked
among the top five business travel markets globally by 2030, as
business travel spending in the country is expected to treble by
2030 from US$ 30 billion in 2015. Source. International hotel
chains will likely increase their expansion and investment plans
in India, and are expected to account for 50% share in the Indian
hospitality industry by 2022, from the current 44%.
GOVERNMENT INITIATIVES:
The Indian government has realized the country’s potential in
the tourism industry and has taken several steps to make India a
global tourism hub. Some of the major initiatives planned by the
Government of India to give a boost to the tourism and
hospitality sector are as follows: The Government of India
signed a loan agreement for US$ 40 million with the World
Bank for the Uttar Pradesh Pro-Poor Tourism Development
Project aimed at developing tourism facilities in the state. Under
Budget 2018-19, the government allotted Rs 1,250 crore
(US$193.08 million) for Integrated development of tourist
circuits under Swadesh Darshan and Pilgrimage Rejuvenation
and Spiritual Augmentation Drive (PRASAD).
Competition Risk:
Regulatory Risks:
Economic Risk:
Sluggish growth of the economy impacts the spending power
reducing consumption. Overall macroeconomic instability
results in a lower demand. Thus fluctuations in the economic
scenario possess a major risk to the business of the company.
Performance of the backward and forward linked industries is of
vital importance for the logistics sector to perform.
i. Website:
The Company’s official website www.coffeeday.com contains
the information pertaining to the Company that it is in
compliance with the Listing Regulations. A separate section for
investors is available wherein the updated information
pertaining to quarterly, half-yearly and annual financial results,
official press releases and presentations, if any, shareholding
pattern, etc. is available in a user-friendly and downloadable
form.
ii. Financial results:
The quarterly, half-yearly and annual financial results of the
Company are uploaded on NSE Electronic Application
Processing System (NEAPS) and BSE Listing Centre in
accordance with the Listing Regulations. The financial results
are displayed on BSE and NSE websites and are also published
in ‘The Business Line’ (English) and ‘Vijayvani’ (Kannada)
newspapers within forty-eight (48) hours of Board approval
thereof and posted on the Company’s official website.
iii. Annual report:
Annual Report containing, inter-alia, the Audited Standalone
and Consolidated Financial Statements, Board’s Report,
Auditor’s Report, Corporate Governance Report, Business
Responsibility Report, Management Discussion and Analysis
Report is circulated to members and others entitled thereto. The
same is made available on the Company’s official website under
the web link: http://www.coffeeday.com/ stakeholders.html
iv. Exclusive designated email address:
In terms of the Listing Regulations, the Company has designated
a separate email Id for dealing with Investors’ queries and
complaints viz., investors@ coffeeday.com v.
SCORES:
SEBI Complaints Redressal System (SCORES) is an online
facility, where investors can submit their complaints for
Redressal by the RTA/Company.
A. Revenue Recognition:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured, regardless of when the payment is being
made. Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually defined
terms of payment, inclusive of excise duty and net of taxes or
duties collected on behalf of the government. The Group has
concluded that it is the principal in all of its revenue
arrangements since it is the primary obligor in all the revenue
arrangements as it has pricing latitude and is also exposed to
inventory and credit risks. Sales tax/ value added tax (VAT) is
not received by the Group on its own account. Rather, it is tax
collected on value added to the commodity by the seller on
behalf of the government. Accordingly, it is excluded from
revenue the specific recognition criteria described below must
also be met before revenue is recognized
Sale of products:
Revenue from the sale of goods in the course of ordinary
activities is measured at the fair value of the consideration
received or receivable, net of returns, trade discounts and
volume rebates. This inter alia involves discounting of the
consideration due to the present value if payment extends
beyond normal credit terms. Revenue is recognized when the
significant risks and rewards of ownership have been transferred
to the buyer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated
reliably, there is no continuing effective control over, or
managerial involvement with, the goods, and the amount of
revenue can be measured reliably. The timing of transfers of
risks and rewards varies depending on the individual terms of
sale.
Sale of goods – customer loyalty programme (deferred revenue)
Sale of services :
Service revenues are recognized as the services are performed.
Services provided pursuant to a contract are either recognized
over the contract period or upon completion of the elements
specified in the contract depending on the terms of the contract.
Operating revenues from the distribution and maintenance of
vending machines are recognized when the services are
rendered. Revenues include unbilled as well as billed amounts.
Sale of import entitlement:
Import entitlements, which are primarily provided for shipping a
specified cumulative volume or shipping to/ from specific
locations, are recorded on accrual basis based on actual export
revenue for the year and pro-rated based on actual or projected
realization of the entitlement. When using realization, we rely
on historic trends as well as economic and other indicators to
estimate the recorded revenue for import entitlements.
Franchisee revenue:
Revenue from franchisee arrangement consists of sale of coffee
products and other related products as well as royalties paid by
franchisees to use the ‘Coffee Day’ brand. Sales of coffee
products and other related products are recognized on transfer of
all significant risks and rewards of ownership to franchisee.
Royalty revenues are recognized based upon a percentage of
reported revenues by the franchisee in accordance with the
terms of the relevant arrangement unless significant future
contingencies exist.
Advertisement Income:
Income from advertising is recognized ratably over the period of
the contract and in accordance with the terms and conditions of
the contract. Commodity trading Gain/ loss from commodity
future transactions is settled on a net basis and recognized on
accrual basis in the statement of profit and loss.
Other income:
People at Café Coffee Day believe that “People are hired for
what they know but fired for how they behave”. Motivation and
personal skill are laid emphasize upon. Their employees are like
friend to the customer but at the same time they know about
the international standards of hygiene and cleanliness and
personal grooming.