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Notes to Accounts of Speciality Restaurants Ltd.

Mar 31, 2015

1 COMPANY BACKGROUND

Speciality Restaurants Limited ("The Company") was incorporated on 1 December 1999. The Company is primarily engaged in the business of operating restaurant outlets / sweet shops.

2 Contingent Liabilities and Commitments (To the extent not provided for)

particulars 2014-2015 2013-2014

Contingent Liabilities in respect of:

Claims against the Company not acknowledged as debts

a. Legal cases against the Company 167.18 167.18

b. Sales Tax demands 22.92 0.27

c. Income Tax demands 26.40 23.92

216.50 191.37

Other matters Indirect taxes 16.13 16.13

Future cash outflows in respect of above matters are determinable only on receipt of judgements / decisions pending at various forums / authorities

Commitments Estimated amount of contracts remaining to be executed on capital 88.97 75.27 account and not provided for (Net of Advances) 88.97 75.27

b) Lease payments recognised in the Statement of Profit and Loss for the year ended 31 March, 2015 are as under: Fixed lease rentals - Rs. 367.65 Million (Previous Year Rs. 333.56 Million)

Contingent rent - Rs. 68.26 Million (Previous Year Rs. 57.53 Million )

c) Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 5 years

d) For certain restaurant outlets rent is payable in accordance with the leasing agreement at the higher of:

i) Fixed minimum guarantee amount and;

ii) Revenue share percentage

3 Related Party Disclosures:

List of Related parties and their relationships

Sr.No Category of related parties Names

1 Key management personnel Anjan Chatterjee Suchhanda Chatterjee Indroneil Chatterjee

2 Enterprises over which directors or relatives Situations Advertising of directors exercise control & Marketing Services / significant influence Private Limited

Shruthi Hotels Enterprises Private Limited

Prosperous Promotors Private Limited

Havik Export (P)Limited Supriya Taxtrade Private Limited Span Promotions Private Limited Mainland Restaurants Private Limited Anjan Chatterjee - HUF Indroneil Chatterjee - HUF

3 Subsidiaries Love Sugar and Dough Private Limited

4 Jointly controlled entity Mainland China Restaurant (LLC)

4 Employee Stock Option Scheme

a) During the previous year, the Board Goverance & Remuneration committee in its meeting held on 6 September, 2013 granted 577,200 stock options under the Speciality Restaurants Limited - Employee Stock Option Scheme 2012 (ESOP 2012 Scheme) to few eligible employees of the Company. The options allotted under the ESOP 2012 scheme are convertible into equal number of equity shares of the face value of Rs. 10 each. The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

b) Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be alloted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the options and expires at the end of six years from the date of grant and would not exceed 3 years from the date of vesting in respect of Options granted under the ESOP 2012 Scheme.

5 Segment Reporting

The Company is engaged in the food business which, in the context of Accounting Standard 17 on Segment Reporting constitutes a single reportable business segment. As at 31 March, 2015, Fixed Assets (Capital Work In Progress) include Rs. 197.29 Million (segment assets) (As at 31 March, 2014, Rs. 183.74 Million) related to non-reportable segments.

6 Utilisation of IPO Proceeds as on 31 March, 2015

The Company had issued equity shares amounting to Rs. 1,760.91 Million for purposes of development of new restaurants and a food plaza, repayment of term loans and general corporate purposes. As at 31 March, 2015, an amount aggregating Rs. 998.80 Million has been utilised in development of new restaurants, repayment of term loan facilities, general corporate purpose and issue related expenses. The balance amount of Rs. 578.50 Million is intended to be utilised in future periods. The unutilised amount has temporarily been invested by the company in mutual funds and term deposits with banks.

7 The Company is yet to realise amounts aggregating Rs. 26.59 Million, receivable from overseas franchisees which are outstanding for a period more than that specified under the Foreign Exchange Management Act, 1999. The Company has initiated the process of obtaining the necessary approvals in this connection.

8 Comparatives

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosureclosure


Mar 31, 2014

1 Contingent liabilites and Commitments (To the extent not provided for)

Rs. in Millions

Particulars 2013-2014 2012-2013

Contingent Liabilites in Respect of:

Claims against the company not acknowledged as debts

a. Legal cases against the company 167.18 167.18

b. Sales Tax demands 0.27 17.44

c. Income Tax demands 23.92 21.37

191.37 205.99

Other maters

Indirect taxes 16.13 -

Commitments

Estmated amount of contracts remaining to be executed on capital 75.27 53.72 account and not provided for (Net of Advances)

75.27 53.72

2 Disclosures in respect of Operating Leases

a) Future minimum lease payments in respect of non-cancellable leases are as follows:

b) Lease payments recognized in the Statement of profit and Loss for the year ended March 31, 2014 are as under: Fixed lease rentals – Rs. 333.56 Million (Previous Year Rs. 286.59 Million)

Contingent rent – Rs. 57.53 Million (Previous Year Rs. 49.99 Million)

c) Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 5 years

d) For certain restaurant outlets rent is payable in accordance with the leasing agreement at the higher of: i) Fixed minimum guarantee amount and;

ii) Revenue share percentage

29 Employee Stock Option Scheme

a) During the current year, the Board Goverance & Remuneraton commitee in its meetng held on 6 September 2013 granted 577,200 stock optons under the Speciality Restaurants Limited - Employee Stock Opton Scheme 2012 (ESOP 2012 Scheme) to few eligible employees of the Company. The optons alloted under the ESOP 2012 scheme are convertble into equal number of equity shares of the face value of Rs. 10 each. The diference between the fair price of the share underlying the optons granted on the date of grant of opton and the exercise price of the opton (being the intrinsic value of the opton) representng Stock compensaton expense is expensed over the vestng period.

c) Terms and Conditons of Options Granted

Each Opton entitles the holder thereof to apply for and be alloted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the optons and expires at the end of six years from the date of grant and would not exceed 3 years from the date of vestng in respect of Optons granted under the ESOP 2012 Scheme.

The exercise price per opton, being the fair market price at the date of grant, is Rs. 126.20 for 1 share of the face value of Rs. 10 each.

35 Segment Reportng

The Company is engaged in the food business which, in the context of Accountng Standard 17 on Segment Reportng consttutes a single reportable business segment. As at 31 March 2014, Fixed Assets (Capital Work In Progress) include Rs 183.74 Million, (segment assets) (As at 31 March 2013, Rs. 89.93 Million) related to non-reportable segments.

36 Utlisaton of ipo proceeds as on 31 march 2014

The Company had issued equity shares amountng to Rs. 1,760.91 Million for purposes of development of new restaurants and a food plaza, repayment of term loans and general corporate purposes. As at 31 March 2014, an amount aggregatng Rs. 844.10 Million has been utlised in development of new restaurants, repayment of term loan facilites and issue related expenses and an amount of Rs. 916.80 Million is pending utlisaton in future periods. The unutlised amount has temporarily been invested by the company in mutual funds and term deposits with banks.

37 Comparatves

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1 COMPANY BACKGROUND

Speciality Restaurants Limited ("The Company") was incorporated on 1 December 1999. The Company is primarily engaged in the business of operating restaurant outlets / sweet shops.

On 30 May 2012 the Equity Shares of the Company were listed on the Bombay Stock Exchange and the National Stock Exchange.

2 Contingent Liabilities and Commitments

Rs. In Millions

Particulars 2012-2013 2011-2012

Contingent Liabilities in respect of:

a. Legal cases against the company 167.18 167.18

b. Sales Tax demands 17.44 17.44

c. Income Tax demands 21.37 2.87

205.99 187.49

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 53.72 86.99

53.72 86.99

3 Disclosures in respect of Operating leases

a) Future minimum lease payments in respect of non-cancellable leases are as follows:

b) Lease payments recognized in the Statement of Profit and Loss for the year ended March 31, 2013 are as under: Minimum lease payments - Rs. 280.83 Million (Previous Year Rs. 241.02 Million)

Contingent rents - Rs. 55.75 Million (Previous Year Rs. 50.33 Million)

c) Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 10 years

d) Contingent rent for certain restaurant outlets is payable in accordance with the leasing agreement at the higher of:

i) Fixed minimum guarantee amount and;

ii) Revenue share percentage

4 Segment Reporting

The Company is engaged in the food business which, in the context of Accounting Standard 17 on Segment Reporting constitutes a single reportable business segment. As at 31 March 2013, Fixed Assets (Capital Work In Progress) include Rs 89.93 Million (segment assets), (As at 31 March 2012, Rs. 78.95 Million) related to non-reportable segments.

5 Utilisation of IPO Proceeds as on 31 March 2013

The Company had issued equity shares amounting to Rs. 1,760.91 million for purposes of development of new restaurants and food plaza, repayment of term loans and general corporate purposes. As at 31 March, 2013, an amount of Rs. 1,237.80 million is pending utilisation in future periods. Accordingly, the unutilised amount has been invested in mutual funds and term deposits with banks.

6 Comparatives

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1. COMPANY BACKGROUND

Speciality Restaurants Limited ("The Company") was incorporated on 1 December 1999. The Company is primarily engaged in the business of operating restaurant outlets / sweet shops.

On 30 May 2012 the Equity Shares of the Company were listed on the Bombay Stock Exchange and the National Stock Exchange. The Company raised Rs. 1760.91 million through public issue of 11,739,415 Equity Shares of Rs.10/- each for cash at a premium of Rs. 140/- per share.

2. Contingent Liabilities and Commitments

Rs. In Millions Particulars 2011-2012 2010-2011

Contingent Liabilities in respect of:

a. Legal cases against the company 167.18 177.47

b. Sales Tax demands 17.44 0.11

c. Income Tax demands 2.87 -

187.49 177.58

Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 86.99 135.83

86.99 135.83

3. Derivative Instruments

There are no outstanding forward contracts as at 31 March, 2012 and 31 March, 2011.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

b) Lease payments recognized in the statement of profit and loss for the year ended March 31, 2012 are as under: Minimum lease payments - Rs. 236.70 million (Previous Year Rs. 201.48 million)

Contingent rent - Rs.50.33 million (Previous Year Rs. 36.61 million)

c) Premises are taken on Lease for periods ranging from 2 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 2 to 9 years

d) Contingent rent for certain restaurant outlets is payable in accordance with the leasing agreement as the higher of: i) Fixed minimum guarantee amount and; ii) Revenue share percentage

4. Segment Reporting

The Company is engaged in the food business which, in the context of Accounting Standard 17 on Segment Reporting constitutes a single reportable business segment. As at 31 March 2012, Fixed Assets (Capital Work In Progress) include Rs. 75.49 million (segment assets), (As at 31 March 2011, Rs. 50.12 million) related to non-reportable segments.

5. Comparatives

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

 
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