Mumbai: A look at the latest filing report from Cafe Coffee Day may explain the pandemic-induced trouble, specifically for hospitality brands.
At Cafe Coffee Day, a prominent Coffee chain, the latest annual report spooks trouble for owners and shareholders.
Revenue is down by 61 percent to Rs 853 crores for the fiscal year 2020-21.
EBITDA is down 108 percent to Rs 137 crores while net profit is down by a massive 131 percent.
The company has reported a net profit after tax of Rs 584 crores for the fiscal. The saving grace was the last quarter where Cafe Caffe Day reported a net profit of Rs 262 crores.
There's more beyond the froth of dipping revenues and dwindling profits in this cup.
The Auditors report for Cafe Coffee Day says that nearly 30,000 vending machines were removed from customers locations.
Coffee Day Global Limited, a subsidiary and the Vending Division, built custom-made cabinets for its customers. These vending machines could be found at prominent cafetarias such as IT Parks, shopping malls and even Railway Stations. "During the year, due to pandemic, lot of vending machines were withdrawn from these locations," said the Auditor's report.
"Custom build cabinets are fixtures and cannot be removed and do not have any salvage value. In this situation, 29,996 cabinets are discarded and the balance written down value aggregating to Rs 79.78 Crores are fully depreciated during the year in the financial statements of Coffee Day Global Limited," reads the report.
The auditors also point to efforts in removing the label of "Fraud" from a subsidiary company. A subsidiary company which has 3 step-down subsidiaries and 2 joint ventures has been categorised as "Fraud" by Lakshmi Vilas Bank (presently DBS Bank India Limited). The auditors state that it has not affected the banking operations of Coffee Day Global Limited.
"However, since Coffee Day Global Limited (Subsidiary) did not have any credit facility or Guarantee extended with to LVB, Coffee Day Global Limited (Subsidiary) requested LVB to provide the basis on which they have classified Coffee Day Global Limited (Subsidiary) as fraud vide its letter dated 04.03.2021. Further Coffee Day Global Limited (Subsidiary) has requested LVB to clear the fraud tag, as there is no basis. Coffee Day Global Limited (Subsidiary) is awaiting the reply from LVB."
Then there's the instance of an NCLT complaint over non-payment of dues. Auditors state that more information is requested from the interim resolution professional, appointed by the National Company Law Tribunal, in the case of step-subsidiary Sical Logistics Limited.
Coffee Day Global is an unlisted company but the results were prepared voluntarily. On Friday, Coffee Day Enterprises shares ended at Rs 41 a piece. Some 2.55 lakh shares exchanged hands according to information from the BSE. The filing information can be read on the Bombay Stock Exchange.