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Notes to Accounts of Speciality Restaurants Ltd.

Mar 31, 2018

1 COMPANY BACKGROUND

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

14.4 Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

16.1 Summary of borrowing arrangements

(i) Details of Security Secured by the assets leased.

(ii) The loans is repayable in equated monthly instalments and interest rate is in the range of 9% - 13%

Note 2. Obligations under finance leases

31.1 Leasing arrangements

The Company has taken on lease land and vehicles. At the end of the lease period the vehicles will be transferred in the name of the Company. Vehicles are taken on lease for periods ranging from 3 to 5 years.

Interest rate underlying the obligations under finance leases of vehicles, are fixed at respective contract dates, is 9.21% per annum (as at 31 March, 2017: 9.21% per annum; as at 1 April, 2016: 9% to 13% per annum).

Note 3. Employee benefit plans

32.1 Defined contribution plans

The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 32.46 million (Previous Year ended 31 March, 2017 Rs. 38.85 million) for Provident Fund contributions in the Statement of profit & loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

32.2 Defined benefit plans:

The gratuity scheme is a defined benefit plan that provides for a lump sum payment to the employees on exit either by way of retirement, death, disability or voluntary withdrawal. Under the scheme, the employees are entitled to a lump sum amount aggregating to 15 days final basic salary for each year of completed service payable at the time of retirement/resignation, provided the employee has completed 5 years of continuous service. The defined benefit plan is administered by a third-party insurer. The third-party insurer is responsible for the investment policy with regards to the assets of the plan.

The Company expects to make a contribution of '' 19.80 Million (as at 31 March, 2017: Rs. 11.99 Million; as at 1 April, 2016: Rs. 7.49 Million) to the defined benefit plans during the next financial year.

(g) The weighted average duration of the defined benefit obligation as at 31 March 2018 is 7.52 years (2017: 7.98 years, 2016: 9.36 years)

(h) Sensitivity Analysis

Method used for sensitivity analysis:

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to the discount rate and the future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There is no change in the method of valuation for the prior periods in preparing the sensitivity analysis. For change in assumptions refer to note 32.4 (a) above.

Note 4. Employee Stock Option Scheme (ESOS)

33.1 During the FY 2013-14, the Board Governance & 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 the 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.

Each Option entitles the holder thereof to apply for and be allotted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The option would vest in 4 annual instalments after one year of the grant. 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.

33.2 Fair value of share options granted in the year

There are no new grants during the financial year 2017-18 Note 34 Financial Instruments

34.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders. The Company does not have any significant borrowing.

The Company is not subject to any externally imposed capital requirements.

The Company''s principal financial liabilities, comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Company''s principal financial assets include trade and other receivables, current investments and cash and short-term deposits that are derived directly from its operations.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk). The Company''s Board of Directors reviews and sets out policies for managing these risks and monitors suitable actions taken by management to minimize potential adverse effects of such risks on the company''s operational and financial performance.

34.3.1 Credit risk

Credit risk arises when a counterparty defaults on its contractual obligations to pay resulting in financial loss to the Company. The credit risk for the Company primarily arises from credit exposures to trade receivables (mainly franchisees), deposits with landlords for restaurant properties taken on lease and other receivables.

Trade and other receivables: The Company''s business is predominantly through cash and credit card collections. The credit risk on credit card collections is minimal, since they are primarily owned by customers'' card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of franchisees and the credit risk exposure for them is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for restaurant properties taken on leases, for which agreements are signed and property possessions timely taken for restaurant operations. The risk relating to refunds after vacating or restaurant shut down is managed through successful negotiations or appropriate legal actions, where necessary.

34.3.2 Liquidity risk management

The Company''s principal sources of liquidity are cash and cash equivalents, cash flow generated from operations and by churning of current investments. The Company does not have any significant borrowing. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

Liquidity risk tables

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of the financial liabilities based on the earliest date on which the Company can be required to pay.

34.3.3 Market Risk

The Company is exposed to market risks associated with foreign currency rates and commodity prices.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate fluctuations arise. The exchange gains or losses are recognised in profit or loss on the date of settlement and restatement at quarter intervals.

The Company''s exchange risk arises from its foreign currency revenues and expenses, (primarily in U.S. Dollars).

As a result, if the value of the Indian Rupee appreciates relative to these foreign currencies, the Company''s revenues measured in Indian Rupees will decrease. The exchange rate between the Indian Rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lesser quantum of revenue and expenses from foreign currencies, the Company is not significantly exposed to foreign currency risk.

Commodity Price Risk:

The Company purchases certain products, including meat, cheese, vegetables and other commodities which are subject to price volatility that is caused by weather, market conditions and other factors that are not considered predictable or within the Company''s control. The Company''s supplies and raw materials are available from several sources, and not dependent upon any single source for these items. If any existing suppliers fail or are unable to deliver in quantities required by the Company, the Company believes that there are sufficient other quality suppliers in the marketplace such that the Company sources of supply can be replaced as necessary. In most cases, the Company historically has been able to pass a substantial portion of the increased commodity costs to the Company''s customers through periodic menu price adjustments.

34.4 Fair value measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

34.4.1 Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company''s financial assets are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation technique(s) and inputs used).

34.4.2 Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

The directors are of the belief that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.

5. Leasing arrangements

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

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 Note 36 Segment information

The principal business of the Company is operating food outlets/ sweet shops. All other activities of the Company revolve around its main business. The Chairman & Managing Director (MD) of the Company, has been identified as the chief operating decision maker (CODM). The CODM evaluates the Company''s performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit. Therefore, directors have concluded that there is only one operating reportable segment as defined by Ind AS 108 - Operating Segments.

Notes

1 These balances have been fully provided and have been disclosed as an exceptional item (refer note 42)

2 Figures in parenthesis relate to the corresponding previous year figures in relation to the Statement of Profit and Loss and the figures as at 31 March, 2017 in relation to the Balance Sheet

3 Rent and other expenses are shown as net of indirect taxes

4 Post retirement benefits is determined by the Company as a whole for all employees put together and hence disclosures of post employment benefits of Key management personnel is not separately available.

Notes to the reconciliation

a) Under the previous GAAP, interest free lease deposits were recorded at their transaction value. On transition to Ind AS, these lease deposits are remeasured at amortised cost using the effective interest rate method. The difference between the transaction value of the deposit and amortised cost is regarded as prepaid rent and recognised as expenses uniformly over the lease period. Interest income, measured by the effective interest rate method is accrued. The effect of these is reflected in total equity and / or profit or loss, as applicable.

b) Under the previous GAAP, in respect of certain leased properties, operating lease rentals were accounted on the basis of the ratio of forecasted sales over the balance lease period. On transition to Ind AS, the operating lease rents have been recognised as an expense on a straight-line basis over the lease term. The effect of these is reflected in total equity and / or profit or loss, as applicable.

c) Under the previous GAAP, equity settled employee share-based payments were recognised using the intrinsic value method. Under Ind AS, the cost of equity settled employee share-based payments is recognised based on the fair value of the options as on the grant date. The effect of these is reflected in total equity and/ or profit or loss as applicable.

d) Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the return on plan asset and actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognised in other comprehensive income. This resulted in a reclassification between profit or loss and other comprehensive income.

Note:

The amount shown in column (G) (ii) represents utilised amount after March 31, 2015 related to the objects disclosed in the prospectus dated May 22, 2012. Rs. 661 Lakhs was spent from April 1, 2015 upto the date of approval by the shareholders on November 27, 2015, which is included in total spend of Rs. 3,554 Lakhs.

Note 6. Exceptional Item

The exceptional item related to a provision of financial assets on account of restructuring pertaining to the joint venture company in Doha, Qatar. During the year, the Company along with the joint venture partner had entered into a Memorandum of Understanding (MOU) to sell specific portions of their shareholding in the joint venture entity to include local expertise with a change in the format of the restaurant outlet to enable operations & profitability of the joint venture entity to improve. However, owing to delay in complying with the terms and conditions of the MOU by the Company, the said MOU was cancelled by the potential buyers. Consequently, the change in format of the restaurant outlet was abandoned and the joint venture company did not resume operations. Accordingly, the Company recognised an impairment loss of Rs. 101.41 million for diminution in value of company''s investment in equity shares and receivables from the joint venture company.

Note 7.

(a) Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof: Rs. Nil (Previous year: Rs. 1.9 Million)

(b) Gross amount required to be spent during the period: Rs. Nil (Previous year: Rs. 2.19 Million).

Note 8. Disclosure of Holdings as well as dealings in Specified Bank Notes:

Pursuant to the notification dated 30th March, 2017 issued by the Ministry of Corporate Affairs (MCA), the Company has to disclose the holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016. Also pursuant to another notification issued by MCA on the same date amending the Schedule III of the Companies Act, 2013 requiring the company to disclose the details of Specified Bank Notes held and transacted during the period from 8 November, 2016 to 30 December, 2016 . The details are as given below:

Note 9. Approval of financial statements

The financial statements were approved for issue by the board of directors on 26 May 2018.


Mar 31, 2017

1. Total outstanding dues of micro enterprises and small enterprises

Disclosures relating to amounts payable as at the year-end together with interest paid/payable to Micro and Small Enterprise have been made in the accounts, as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status and the required disclosures are given below.

The Company expects to contribute Rs. 11.99 Million (previous year Rs. 7.49 Million) to its gratuity plan for the next year. In assessing the Company''s post retirement liabilities the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the Indian assured Lives mortality 2006-08 ultimate tables.

The Company operates a funded gratuity plan for qualifying employees. Under the plan, the employees are entitled to gratuity benefits based on final salary at retirement. The Company makes provision in the books based on third party actuarial valuations.

The estimates of future salary increase, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The Expected Rate of Return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company''s policy for Plan Assets Management.

The details of the composition of the plan asset, by category, from the insurers have not been received and hence the disclosures as required by AS 15 -Employee Benefits have not been given.

2. Lease payments recognized in the Statement of Profit and Loss for the year ended 31 March, 2017 are as under:

Fixed lease rentals - Rs. 447.54 Million (Previous Year Rs. 415.36 Million)

Contingent rent - Rs. 63.39 Million (Previous Year Rs. 67.50 Million )

3. 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

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

5. Fixed minimum guarantee amount and;

6. Revenue share percentage

7. Employee Stock Option Scheme

8. During the previous year, the Board Governance & 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.

9. Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be allotted 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.

10. Details of Corporate Social Responsibility (CSR) expenditure

11. Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof -Rs. 1.9 Million (Previous year Rs. 0.55 Million)

12. Gross amount required to be spent during the period - Rs. 2.19 Million (Previous year Rs. 4.45 Million).

13. Comparatives

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


Mar 31, 2016

Note: 1

Figures in parenthesis relate to the corresponding previous year figures.

Note: 2

Depreciation for the year includes impairment charge aggregating to Rs.14.26 Million (Previous Year Rs.7.07 Million)

Note: 3

Pursuant to the enactment of the Companies Act, 2013, effective 1 April, 2014, the Company has reviewed and revised the estimated economic useful lives of its fixed assets generally in accordance with those provided in Schedule II to the Companies Act, 2013 except in case of furniture and fixtures. The Company assessed the estimated useful life of furniture and fixtures as 10 years based on past experience and technical evaluation.

Consequent to the change in the estimated useful life of the assets, the depreciation expense in the Statement of Profit and Loss for the previous year was higher by Rs.23.33 Million.

Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Rs. Nil as on April 1, 2014, and has consequently adjusted an amount of Rs.0.93 Million (net of deferred tax of Rs.0.48 Million) in the previous year against the opening balance in the Statement of Profit and Loss under Reserves and Surplus.

The Company expects to contribute Rs. 7.49 Million (previous year Rs. 20.63 Million) to its gratuity plan for the next year. In assessing the Company''s post retirement liabilities the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the Indian assured Lives mortality 2006-08 ultimate tables.

The Company operates a funded gratuity plan for qualifying employees. Under the plan, the employees are entitled to gratuity benefits based on final salary at retirement. The Company makes provision in the books based on third party actuarial valuations.

The estimates of future salary increase, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The Expected Rate of Return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company''s policy for Plan Assets Management.

4. Disclosures in respect of Operating leases

b) Lease payments recognised in the Statement of Profit and Loss for the year ended 31 March, 2016 are as under:

Fixed lease rentals - Rs. 415.36 Million (Previous Year Rs. 367.65 Million)

Contingent rent - Rs. 67.50 Million (Previous Year Rs. 68.26 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

5. Employee Stock Option Scheme

a) During the previous year, the Board Governance & 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.

c) Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be allotted 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.

6. 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, 2016, Fixed Assets (Capital Work In Progress) include Rs. 224.57 Million (segment assets) (As at 31 March, 2015, Rs. 197.29 Million) related to non-reportable segments.

There is only one Geographical segment i.e. India.

7. Utilization of IPO Proceeds as on 31 March, 2016

The Company had issued equity shares pursuant to its IPO in 2011-12 amounting to Rs. 1,760.91 Million for the purposes of development of new restaurants and a food plaza, repayment of term loans and general corporate purposes. As at 31 March, 2016, an amount aggregating Rs. 1,144.5 Million (Previous year Rs. 998.80 Million) has been utilized in development of new restaurants, repayment of term loan facilities, general corporate purpose excluding issue related expenses. The balance amount of Rs.432.8 Million (Previous year Rs. 578.50 Million) is intended to be utilized in future periods. The shareholders on 27 November, 2015 passed a special resolution by postal ballot to utilize the balance unutilized amount as on 31 March, 2015 for the revised object - development of new restaurants/ conversion of existing restaurants. The unutilized amount has temporarily been invested by the Company in mutual funds and term deposits with banks.

8. Details of Corporate Social Responsibility (CSR) expenditure

(a) Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof - Rs.0.55 Million (Previous year Rs. 0.55 Million)

(b) Gross amount required to be spent during the period - Rs. 4.45 Million (Previous year Rs. 5.32 Million).

9. Comparatives

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


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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