Sebi Imposes Rs 38 Lakh Fine on Coffee Day Enterprises and Officials for Accounting Lapses

Financial Report: Coffee Day Enterprises Ltd

Summary

On March 2, the Securities and Exchange Board of India (SEBI) imposed penalties totaling Rs 38 lakh on Coffee Day Enterprises Ltd and several of its officials for non-compliance with mandatory accounting and disclosure requirements.

Key Findings

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• The company failed to adhere to Indian Accounting Standards (Ind AS) in the preparation and presentation of its standalone and consolidated financial statements, as well as quarterly financial results.
• Coffee Day Enterprises Ltd did not disclose the reasons for deviations from prescribed accounting standards, as mandated under the Companies Act, 2013.
• A key violation pertained to the non-recognition of interest cost on borrowings in both standalone and consolidated financial statements for four financial years (FY21, FY22, FY23, and FY24).
• The lapse extended to quarterly results from March 31, 2021 (Q4 FY21) to September 30, 2024 (Q2 FY25), covering 15 quarters.

Penalties

• Rs 10 lakh was imposed on Coffee Day Enterprises Ltd.
• Officials were fined for their roles in approving and overseeing financial statements that did not comply with Ind AS and mandatory disclosure requirements:

• Malavika Hegde, S V Ranganath, and K R Mohan: Rs 5 lakh each
• C H Vasundhara Devi, Giri Devnur, and I R Ravish: Rs 3 lakh each
• Ram Mohan: Rs 2 lakh
• Sadananda Poojary and Albert Hieronimus: Rs 1 lakh each