Citizens' Issues
Shiv Sainiks protest at BCCI office in Mumbai
A group of Shiv Sainiks on Monday morning protested at BCCI president Shashank Manohar's office here against his move to hold talks with his Pakistani counterpart Shahryar Khan to resume cricket ties between the two countries.
The Shiv Sainiks, numbering over 70, carried a black flag and shouted slogans of 'Pakistan murdabad' and 'Shashank Manohar murdabad'.
Later, police detained more than two dozen activists and whisked them away, even as Manohar quietly watched from his office.
A protester said the Shiv Sena would not permit any cricket relations between the two countries until Pakistan stopped the killing of Indian soldiers and civilians on the border.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


Why CCD's coffee vending machines cost Rs1.15 lakh each
As per the prospectus, during FY2015, Coffee Day Enterprises' capitalised coffee vending machines at Rs1.62 lakh per unit. The company, however claims that the cost is Rs1.15 lakh and its machines are much superior than those available for Rs15,000-40,000
Coffee Day Enterprises Ltd (CDEL) that owns the coffee chain - Café Coffee Day, which just concluded its initial public offering (IPO), in its draft red herring prospectus (DRHP), has mentioned the cost of its coffee vending machines as Rs1.62 lakh per unit, taking its fixed assets under this head to Rs378.78 crore for FY2015. Although, there are coffee vending machines available in the market for around Rs15,000 to Rs40,000 per unit, the company claims that its machines are much superior and hence not comparable with other machines in India.
During FY2014-15, the company had shown Rs378.78 crore as tangible fixed asset under the head of coffee vending machines. The same as on 1 April 2014 is stated as Rs310.68 crore. Therefore, the company added fixed assets worth Rs68.10 crore under coffee vending machines. 
According to DRHP, for the financial years 2013, 2014 and 2015, and the three month period ended 30 June 2015, the total number of coffee vending machines placed at client locations were 21,594, 25,561, 29,760 and 30,916, respectively. 
As on 1 April 2014, CDEL had 25,561 coffee vending machines, which increased to 29,760 as on 31 March 2015. So the number of these machines grew by 4,199 during FY2015 at a cost of Rs68.10 crore. This means, the cost for each machine is about Rs1.62 lakh.
When we enquired whether this cost is on the higher side, Jayaraj C Hubli, chief financial officer (CFO) of Coffee Day Global Ltd, a unit of CDEL, denied the cost as Rs1.62 lakh per coffee vending machine. "During FY15, a total of 5,237 new machines were added. Excluding the refurbishment cost incurred for 3,514 existing machines (at an average of Rs22,831 per machine) the cost of new machines added works out to Rs1.15 lakh per machine. Excluding the cost of branding, cabinet and other accessories the cost per machine works out to only Rs99,500." Even considering the company had added 5,237 new machines, at a total cost of Rs68.10 crore (shown as fixed asset for FY15), the unit cost comes to Rs1.30 lakh.
When asked about the higher cost of CDEL coffee vending machines compared with similar machines in the market, Mr Jayaraj said, "These (machines) are not comparable with our machines since they use a pre-mix of milk and coffee powder in a pressure-less method to dispense coffee beverage. Our coffee vending machines use pressurised brewing technique using fresh coffee beans and fresh milk to dispense a variety of coffee beverages. Our machines have a grinder, an advanced metallic brewing system and other special features. More than 25% of the components in our machines are imported. Our machines are comparable with imported coffee vending machines which cost around Rs7 lakh."
CDEL's global vending business has a strong base of 30,916 vending machines across 12,500 corporate and growing at 25%-30%. CDG plans to grow the vending business by introducing new variants, leveraging its network and also target new customers like hotel, restaurant and catering companies (HORECA) market, for which it has tied up for a joint venture with Germany-based WMF. 
"We currently manufacture coffee vending machines in Bengaluru... in eight to 12 months, we will start joint manufacturing of coffee machines in Chikmagaluru with German giant WMF. WMF is the Rolls Royce of coffee machines," said media reports quoting CDEL chairman VG Siddhartha last week.  
On a consolidated basis, during FY201-2015, CDEL has reported a CAGR of about 30% in revenue growth to Rs2,479 crore. However, due to higher depreciation and interest costs, during FY2015, the company had incurred a consolidated net loss of about Rs87 crore.



Keshav Somani

7 months ago

Vending machine is pure wastage of money... They promise a lot but very poor services


2 years ago

You need to look at where they are buying the machines. If they have the volume why cannot they do import substitution and reduce the cost.

Also another angle would is this is an exclusive contract or are there multiple vendors.

If it is a sole source? If so, is that a related party or is there some sort of nexus between the machine supplier and the promoters.

Mahesh S Bhatt

2 years ago

More Gas Less of Frothy Coffee.

Congrats Moneylife PAKDA NAA.

Jiyo Sahi Galat Nahi.


Suketu Shah

2 years ago

The fact that Times group of promoting also is enough signs not to buy a single share of CCD ever.

Ambareesh Baliga

2 years ago

What's the business model in the Coffee Vending Machine Business?
The Vending Machine is capitalised at Rs. 1.62 lacs but average service charges per year is Rs. 18500/- approx Rs. 40 crs for 9 months for 28777 FY14 (9M) - Page F267 of DRHP.
This will take it about 9 years to recover just the capital cost...Will the Rolls Royce Vending Machine last that long?

Also other "cheaper" vending machines use Pre-Mix - which provides a huge value add to the suppliers as the user is compelled to buy the pre-mix from the Beverage Vending Machine Supplier - that's where the margin is - and not in leasing out the machine. Just like a inkjet printer - the money is made in consumables and not by selling the machine.

So what's CCD's model for Vending Machines - Selling only Coffee Beans? Because Milk can be bought from the local vendor, Sugar can be bought from any grocery shop. And what's the margin on Coffee Beans? Doesn't seem to high. Secondly the sales of Coffee Beans too have fallen in the latest year...

Somehow things don't add up....

Social media raises customer service stakes in India: Report
 Indians are far ahead of their Asian counterparts in the use of social media to get customer service response from companies, a survey released this week has said.
According to an American Express Customer Service Barometer, "71 percent Indians have used social media at least once in the past one year for customer service, more than twice that of Japan (29 percent) and ahead of Hong Kong (50 percent)."
The survey, conducted online among a sample of Indian consumers aged 18 years and above, also indicated that an overwhelming majority - 89 percent - said they were willing to spend more with a company that provided good customer service.
On average, they are willing to spend as much as 22 percent more with a company that gives superior consumer service.
Over 78 percent said they spent more with a company because of a history of positive customer service experiences.
The level of customer service was the third most important factor to choose a company. 25 percent said it was the most important reason.
Indians use various communication channels to talk about customer service experiences-face-to-face (53 percent, all the time), social networking sites (83 percent always or sometimes) and online chat or instant messaging (80 percent always or sometimes).
Another reason for the popularity of social media for is the speed with which a company resolves issues posted on such platforms, the survey said.
For simple issues, Indian consumers preferred going online (17 percent), via a company website or email.
For more complex enquiries, such as returning a product or getting assistance, consumers (22 percent) preferred speaking with a person on the phone.
The top five reasons for which Indian consumers use social media on customer service were:
- Sharing information about service experience - 56 percent
- Asking others about how to get better service - 50 percent
- Praising a company for service experience - 47 percent
- Seeking actual response from a company about an issue - 47 percent
- Seeking recommendations from others about good service providers - 45 percent.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


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