Speciality Restaurants Ltd Directors Report.

DIRECTORS REPORT

To,

The Members

Speciality Restaurants Limited

Your Directors hereby present the Twenty First Annual Report together with the audited Financial Statements of the Company for the financial year ended March 31, 2020.

1. Financial Results In Millions

Particulars

Standalone

Consolidated

March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019
Revenue from operations 3,577.9 3,463.6 3,577.9 3,463.6
Other Income 99.6 94.6 102.7 94.6
Total Income 3,677.5 3,558.2 3,680.6 3,558.2
Earnings before Interest, Depreciation, Amortization and Tax 669.6 233.7 672.4 219.3
Less:
Finance Costs 211.5 0.0 211.4 0.0
Depreciation /Amortization/Impairment 574.9 287.0 574.9 287.0
Loss before exceptional item and tax (116.8) (53.3) (113.9) (67.8)
Share of loss in Joint venture company

-

(13) (02)
Loss before exceptional item and tax (116.8) (53.3) (115.2) (68.0)
Less: Exceptional item (273.8) (273.8) -
Loss before Tax (390.6) (53.3) (389.0) (68.0)
Less: Taxes Expenses / (credit)
Current Tax

-

9.0

-

9.0
Deferred Tax

-

-

-

-

Short provision for tax relating to prior years (9.0) 1.1 (9.0) 1.1
Loss for the year (381.6) (63.4) (380.0) (78.1)
Total other comprehensive (loss) / income (69) (45) (42) (53)
Total comprehensive loss for the period (388.5) (679) (384.2) (834)

2. Financial Performance and the state of Companys affairs

Your Companys performance for the financial year 2019-20 needs to be analysed in the context of the economic and operating environment as under:

(i) Total Income of your Company for the year under review, which was 3,677.5 million as against 3,558.2 million in the previous year, registered a growth of 3.35%.

(ii) The earnings before Depreciation, Interest, Tax and Amortization (EBDITA), which amounted to 669.6 million (18.21% of the revenue) as against 233.7 million (6.57% of the revenue) in the previous year.

(iii) Total comprehensive loss for the year under review was (388.5) million as against (67.9) million in the previous year.

The detailed analysis on financial performance is included under the Management Discussion and Analysis Report.

However, it is to be noted that the performance of the Company during March 2020 was impacted by the lockdown declared and closure of restaurants on account of the COVID - 19 pandemic.

During the year under review, your Company opened seventeen (17) restaurants out of which twelve (12) are Company Owned Company Operated (COCO) while five (5) are Franchise Owned Company Operated (FOCO) and eight (8) confectionaries. At the end of financial year ended March 31, 2020, your Company has 109 restaurants (including 26 franchisees) and 31 confectionaries.

3. Dividend on Equity Shares

The Board of Directors of your Company (the "Board"), after considering the financial performance during the year under review, has decided not to recommend any dividend for the year under review (previous year-Nil).

4. Employee Stock Option Scheme (ESOS)

During the year under review, the Company has not granted any fresh stock option to its employees. Details of the options granted under Employee Stock Option Scheme (ESOS), as also the disclosures in compliance with Section 62 of the Companies Act, 2013, as amended and the rules made thereunder ("Companies Act") and Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014, Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the "SEBI Guidelines") and SEBI (Share Based Employee Benefits) Regulations, 2014 (the "SEBI Regulations") are given in Annexure A which forms part of this report.

Certificate from Statutory Auditors M/s. Singhi and Co., Chartered Accountants, with regard to implementation of ESOS Scheme of the Company in compliance with SEBI Regulations would be available for electronic inspection by the Members at the ensuing annual general meeting.

5. Audited Financial Statements

As per Regulation 34(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2020

i.e. Balance Sheet, Statement of Profit and Loss and Cash Flow Statement are appended hereto.

There has been no material changes and commitments, which affect the financial position of the Company subsequent to the close of the financial year ended March 31, 2020 and till the date of this report, except for the impact arising out of COVID-19, which is detailed in this Report.

6. Subsidiary

The Company has two wholly owned subsidiaries and two step down subsidiaries as on March 31, 2020. There has been no material change in the nature of the business of the subsidiaries.

(i) Wholly Owned Subsidiaries:

a. Speciality Hospitality UK Limited was incorporated as a private limited company, limited by shares (bearing company number 10927982) on August 22, 2017, registered with The Registrar of Companies for England and Wales, having its registered office at 134 Buckingham Palace Road, London, SW1W 9SA, United Kingdom.

b. Speciality Hospitality US, Inc. (bearing number - 803423900) was incorporated on September 19, 2019, which is registered

with Office of the Secretary of State of Texas, having its registered office at 6161 Savoy Drive, Suite 1000, Houston TX 77036.

(ii) Step Down Subsidiaries:

a. Caterland Hospitality Ltd. was incorporated on July 18, 2019, as a private limited company, limited by shares (bearing

company number 12109778) registered with The Registrar of Companies for England and Wales, having its registered office

at 134 Buckingham Palace Road, London, SW1W 9SA, United Kingdom.

b. Foodland Ventures, LLC was incorporated on October 7, 2019, (bearing number - 803436901) which is registered with Office of the Secretary of State of Texas, having its registered office at 9894 Bissonnet Street, Suit 638, Houston TX 77036.

During the year under review, a Joint Venture Agreement dated July 24, 2019 was entered into between Speciality Hospitality UK Limited, a wholly owned subsidiary ("WOS") of the Company and Homage Ventures LLP, to setup, own and operate restaurant in London, United Kingdom under Caterland Hospitality Ltd.

During the year under review, a Joint Venture Agreement dated January 10, 2020 was entered into between Speciality Hospitality US, Inc., a wholly owned subsidiary (WOS) of the Company and Associated Hospitality & Developers LLC, to setup, own and operate restaurants in United States of America under Foodland Ventures LLC.

The Consolidated Financial Statements of your Company, its joint venture, WOS and step down subsidiaries, prepared in accordance with the relevant accounting standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the consolidated accounts.

Pursuant to the provisions of Section 129(3) of the Companies Act, a statement containing salient features of the financial statements of WOS and step down subsidiaries in Form AOC-1 is attached to the Financial Statements of your Company.

7. Joint Venture

Your Company has a joint venture company, Mainland China & Indigrill Restaurant LLC (erstwhile Mainland China Restaurant LLC) at Doha, Qatar. The Consolidated Financial Statements of your Company and its joint venture company, prepared in accordance with the relevant accounting standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the consolidated accounts.

The partners of the joint venture company, in view of the losses incurred, discontinued operations of the Mainland China Restaurant with effect from May 16, 2017. The Company is in the process of voluntary liquidation of the joint venture, Mainland China & Indigrill Restaurant LLC (erstwhile Mainland China Restaurant LLC) at Doha, Qatar.

Pursuant to the provisions of Section 129(3) of the Companies Act, a statement containing salient features of the financial statements of joint venture company in Form AOC-1 is attached to the Financial Statements of your Company.

8. Awards and Recognition

Your Companys brand initiatives have been recognized and appreciated across forums. During the year under review your Company has won the following awards:

Name & Place of Restaurant Awards Won
Sigree, Anna Nagar, Chennai Rocheston - Distinguished Restaurant
Oh! Calcutta, Gurgaon Best Regional Cuisine Award by Eazydiner Foodie Awards
Riyasat, Kolkata Best Progressive Indian - Casual Dining (Times food and night life awards)
Riyasat, Kolkata Best Indian By The Telegraph
BARishh, Kolkata Best Debutant Lounge By The Telegraph
Cafe Mezzuna, Kolkata Best Italian in Premium Dine In by The Telegraph
Cafe Mezzuna, Kolkata Best Italian in Premium Dine In (Times food and night life awards)
Mainland China, Pune Best Chinese - (Times food and night life awards)

9. Directors and Key Managerial Personnel

(i) Directors

Your Company has eight (8) Directors comprising four (4) Independent and four (4) Executive Directors.

(ii) Independent Directors

In terms of the definition of Independent Directors as prescribed under Regulation 16(1)(b) of the Listing Regulations and Section 149(6) of the Companies Act, the Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, to the effect that each of them meet the criteria of independence laid down in Section 149(6) of the Companies Act and Regulation 16(1) of the Listing Regulations and they are not aware of any circumstance or situation, which exists or is anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence as required under Regulation 25 of Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

The following Non-Executive Directors are Independent Directors of the Company:

1. Mr. Dushyant Mehta

2. Mr. Ullal Ravindra Bhat

3. Mr. Rakesh Pandey

4. Dr. Anita Bandyopadhyay (appointed with effect from February 3, 2020)

In terms of Section 150 of the Companies Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs.

(iii) Woman Director

Mrs. Suchhanda Chatterjee is a Director of the Company since the incorporation of the Company. Accordingly, the requirements of the provisions of Section 149 of the Companies Act and Regulation 17(1) of the Listing Regulations have been complied with by the Company.

In terms of Regulation 17 of Listing Regulations, at least 50% of the Board should comprise of non-executive independent directors with at least one woman director. In order to comply with the requirement, the Board appointed Dr. Anita Bandyopadhyay (DIN: 08672071) as an Additional Non-Executive Independent Director of the Company for a term of five years with effect from February 3, 2020, subject to the approval of the Members.

(iv) Managing Director and Whole-time Directors

Mr. Anjan Chatterjee has been serving as the Managing Director of the Company since December 2007. He has been appointed as the Chairman of the Board of Directors with effect from September 11, 2017.

Mrs. Suchhanda Chatterjee has been serving as the Whole-time Director of the Company since July 2010.

Mr. Indranil Chatterjee, Whole-time Director (designated as Director - Commercial Operations) was designated and appointed as Deputy Managing Director of the Company with effect from February 3, 2020 to February 2, 2023, subject to the approval of the Members of the Company.

Mr. Avik Chatterjee was appointed as Whole-time Director (designated as Executive Director - Innovation and New Formats) of the Company for a period of three years with effect from February 3, 2020 to February 2, 2023, subject to the approval of Members of the Company.

Further details about the directors seeking appointment in the ensuing Annual General Meeting are annexed to the Notice which is being sent to the Members along with the Annual Report.

(v) Re-appointment of Director Suchhanda Chatterjee (DIN: 00226893)

In accordance with the provisions of the Companies Act and the Articles of Association of the Company, Mrs. Suchhanda Chatterjee, (DIN: 00226893) Director of the Company retires by rotation at the ensuing annual general meeting and being eligible, offers herself for re-appointment.

Anjan Chatterjee (DIN: 00200443)

The Board of Directors of the Company at their meeting held on July 23, 2020, subject to the approval of the Members in the ensuing annual general meeting of the Company, approved the re-appointment of Mr. Anjan Chatterjee, as Managing Director of the Company for a period of three years with effect from December 27, 2020.

(vi) Key Managerial Personnel

Mr. Anjan Chatterjee, Chairman & Managing Director; Mrs. Suchhanda Chatterjee, Whole-time Director; Mr. Indranil Chatterjee, Whole-time Director; Mr. Rajesh Kumar Mohta, Executive Director-Finance and CFO and Mr. Avinash Kinhikar, Company Secretary & Legal Head are the Key Managerial Personnel of the Company as per the provisions of the Companies Act.

(vii) Evaluation of Performance of the Directors, Board and Committees of the Board

Pursuant to the applicable provisions of the Companies Act, the Listing Regulations and SEBI Guidance Note on Board Evaluation, the Board has carried out an annual evaluation of its own performance, the performance of its directors as well as evaluation of its committees.

The manner in which the formal annual evaluation of the directors, committees of the Board and the Board as a whole is disclosed in the report on Corporate Governance which forms part of the Annual Report.

(viii) Policy on Directors appointment, remuneration and other details

The Companys policy relating to remuneration of directors, key managerial personnel and other employees as stipulated in Section 178 (3) of the Companies Act has been disclosed in the Corporate Governance report, which forms part of this report.

(ix) Number of Board Meetings

The Board of Directors met six (6) times during the financial year ended March 31, 2020 and the intervening gap between the meetings did not exceed the period prescribed under Companies Act. Detailed information on the meetings of the Board is included in the report on Corporate Governance which forms part of this Annual Report.

The separate Independent Directors meeting scheduled on March 31, 2020 was rescheduled to June 29, 2020, due to outbreak of COVID-19 pandemic. This meeting was conducted through video conferencing without the presence of Non-Independent Directors and members of the management in compliance with Regulation 25 (3) of the Listing Regulations and Schedule IV of the Companies Act.

Besides the above, several committee meetings of the Board were held during the financial year ended March 31, 2020, the detailed information of which is included in the report on Corporate Governance.

10. Share Capital

The Paid-up Equity Share Capital of the Company as on March 31, 2020 was 46,95,76,570/-. During the year under review, there was no change in the issued, subscribed and paid-up share capital of the Company.

11. Related Party Transactions

All the related party contracts, arrangements and transactions during the year under review were entered in the ordinary course of business and on arms length basis. There were no materially significant related party contracts, arrangements and transactions entered during the year by your Company. Accordingly, the disclosure of related party transactions in Form AOC-2 is not provided.

All related party contracts, arrangements and transactions were presented to the Audit Committee for review and approval. Prior omnibus approval granted by the Audit Committee of the Company for the related party transactions which are foreseen and repetitive in nature were reviewed by the Committee on quarterly basis.

The Policy on Materiality of Related Party Transactions and also on dealing with related party transactions as approved by the Board is uploaded on the Companys website at the following web link http://www.speciality.co.in/pdf/policies/POLICY ON MATERIALITY OF RELATED PARTY TRANSACTIONS AND ALSO ON DEALING WITH RELATED PARTY TRANSACTIONS.pdf.

The details of the transactions with related parties are provided in the accompanying financial statements.

12. Report on Corporate Governance

The report on Corporate Governance as stipulated under Regulation 34(3) read with para C of Schedule V to the Listing Regulations forms part of the Annual Report. The requisite certificate from the practising company secretaries confirming compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations is attached to report on Corporate Governance.

13. Management Discussion and Analysis Report

As stipulated under Regulation 34(2) of the Listing Regulations, Management Discussion and Analysis Report for the financial year under review is provided in a separate section forming part of this report.

14. Composition of Audit Committee

The details relating to the composition of the Audit Committee are provided in the Report on Corporate Governance which forms part of this report.

15. Corporate Social Responsibility

In terms of Section 135 of the Companies Act, the Board has constituted a Corporate Social Responsibility Committee ("CSR Committee") under the Chairmanship of an Independent Director_of the Company. The CSR Committee of the Board has formulated a CSR Policy which has been uploaded on the website of the Company at http://www.speciality.co.in/pdf/policies/CORPORATE SOCIAL RESPONSIBILITY POLICY.pdf.

The Annual Report on CSR activities as prescribed under Section 135 of the Companies Act is annexed as Annexure B which forms part of this report.

16. Vigil Mechanism / Whistle Blower Policy

In pursuance of the provisions of Sections 177(9) and 177(10) of the Companies Act, a vigil mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www.speciality.co.in/pdf/policies/VIGIL_MECHANISM_POLICY.pdf.

17. Risk Management

The Audit Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the areas of internal financial and risk management systems. Other details including details pertaining to various risks faced by your Company and also development and implementation of risk management policy is provided in a separate section forming part of the Annual Report.

18. Particulars of loans, guarantees or investments

Disclosure on particulars relating to loans, guarantees or investments made during the financial year ended March 31, 2020 under Section 186 of the Companies Act is given in the notes to the Financial Statements.

19. Consolidated Financial Statement

The Consolidated Financial Statement of the Company, its joint venture company, wholly owned subsidiaries and step down subsidiaries for the financial year 2019-20 are prepared in accordance with the accounting principles generally accepted in India, including the accounting standards specified under Section 133 of the Companies Act read with Rule 7 of the Companies (Accounts) Rules, 2014, form part of the Annual Report and are reflected in the Consolidated Financial Statement of the Company.

The Company prepared its financial statements in accordance with Ind-AS, including accounting standard read with Section 133 of the Companies Act notified under the Companies (Accounting Standard) Rules, 2006.

In accordance with third proviso of Section 136(1) of the Companies Act, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements, has been placed on the website of the Company, www.speciality.co.in. Further, financial statements of WOS has also been placed on the website of the Company i.e. www.speciality.co.in.

20. Internal Financial Controls System and their adequacy

Your Company has laid down adequate internal financial controls system, through requisite policies and procedures which commensurate with its size and the nature of its operations. Such controls are operating effectively to ensure accuracy and completeness of the accounting records, the timely preparation of reliable financial information along with the orderly and efficient conduct of business.

In addition, during financial year 2019-20, as required under Section 143 of the Companies Act, the statutory auditors have evaluated and expressed an opinion on the Companys internal financial controls over financial reporting based on an audit. In their opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as on March 31, 2020.

Details of internal controls system are given in the Management Discussion and Analysis Report, which forms part of this Annual Report.

21. Auditors and Audit Reports

(i) Statutory Auditors and their report

At the twentieth annual general meeting held on August 23, 2019, the Members approved appointment of M/s. Singhi & Co., Chartered Accountants (Firm Registration No. 302049E) as Statutory Auditors of the Company (the "Statutory Auditors") to hold office for a period of five years from the conclusion of that annual general meeting till the conclusion of the twenty fifth annual general meeting to be held in the year 2024. The Statutory Auditors Report for FY 2019-20 on the financial statement of the Company forms part of this Annual Report. The report does not contain any qualifications, reservations or adverse remarks or disclaimer. The Statutory Auditors of the Company have not reported any fraud as specified in Section 143(12) of the Companies Act.

(ii) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. GMJ & Associates, a firm of Company Secretaries in practice, to conduct the secretarial audit of your Company for the financial year ended March 31, 2020. The Secretarial Audit Report for the financial year ended March 31, 2020 is annexed as Annexure C which forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

22. Compliance with Secretarial Standards on Board Meetings and General Meetings

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

23. Particulars of Employees

The ratio of remuneration of each director to the median employees remuneration and other details in terms of Section 197 of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure D which forms part of this report.

The information in respect of employees of the Company required pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request. In terms of Section 136 of the Companies Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the aforesaid annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

24. Statutory Disclosures

(i) Conservation of Energy, Technology Absorption and Foreign Exchange and Outgo

1. Conservation of Energy

The disclosures required as per the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3)(A) of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy is detailed below:

The Company values the significance of conservation of energy and remain conscious about the environmental impact of its business operations and continuously strives to improve energy efficiency through various initiatives. During the year, the Company continued to undertake a variety of energy conservation measures across all its restaurants, making continuous efforts for judicious use of energy at all levels of operations by utilizing energy efficient system and processes.

(a) The steps taken or impact on conservation of energy

• Installed energy efficient LED lights in all restaurants;

• Installed energy management system in 25 restaurants; and

• Installed energy saving sensors in the AC System of 25 restaurants.

(b) The steps taken by the Company for utilizing alternate sources of energy

The Company has a installed 20KW solar power plant at the Mainland China Restaurant at Greater Kailash (GK—II) at New Delhi, which is presently under renovation.

(c) The capital investment on energy conservation equipments

The Company made one time capital investment of 5.12 million on energy management system during financial year 2016-17 and 2017-18. The Company during financial year 2019-20 spent 1.80 million in order to maintain energy management system.

2. Technology Absorption

The activities of the Company are not covered under the disclosure required as per the provisions of Section 134(3)(m) of the Companies Act read with Rule 8(3)(B) of the Companies (Accounts) Rules, 2014 regarding technology absorption. The Company continues to adopt and use the latest technologies to improve the efficiency and effectiveness of its business operations.

3. Foreign Exchange Earnings and Outgo

The disclosure required as per the provisions of Section 134(3)(m) of the Companies Act read with Rule 8(3)(C) the Companies (Accounts) Rules, 2014 regarding foreign exchange earned in terms of actual inflows and foreign exchange outgo during the year under review in terms of actual outflows are given below:

in millions

Foreign Exchange Earnings and Outgo FY 2019-20 FY 2018-19
Foreign Exchange Earned in terms of actual inflows 12.11 14.3
Foreign Exchange Outgo in terms of actual outflows 2.1 3.1

(ii) Prevention of Sexual Harassment:

Your Company has zero tolerance for sexual harassment at its workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.

The Company has constituted Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has complied with the provisions relating to the constitution of Internal Complaints Committee and no complaint has been received during the year under review.

(iii) No stock options were granted to the directors of your Company during the year under review

(iv) Additional information and details as specified in Rule 8(5) of the Companies (Accounts) Rules, 2014 are included in the Directors Report.

25. General Disclosures

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

(i) Details relating to deposits covered under Chapter V of the Companies Act.

(ii) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(iii) Issue of shares including sweat equity shares to employees of the Company under any scheme save and except Employee Stock Options Scheme referred to in this Report.

(iv) Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from the subsidiary Companies.

(v) No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Companys operations in future.

26. Credit Ratings:

The credit ratings obtained by the Company along with any revision thereto has been disclosed in the Corporate Governance Report which forms part of this report.

27. Extracts of Annual Return

Pursuant to Sections 134(3)(a) and 92(3) of the Companies Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extracts of Annual Return as at March 31, 2020 is annexed as Annexure E which forms part of this report.

28. Directors Responsibility Statement The Directors confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2020, the applicable accounting standards have been followed and no material departures have been made from the same;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year ended March 31, 2020 and of the loss of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls for the Company and such internal financial controls are adequate and operating effectively; and

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

29. Utilisation of net proceeds from the Initial Public Offering ("Issue")

Pursuant to the approval of the Members of the Company obtained through postal ballot on November 27, 2015 the objects of the issue as disclosed in the prospectus dated May 22, 2012 issued by the Company for its issue were varied. In terms of variation, the Company had proposed to utilise the balance unutilised amount of 578.5 million as on March 31, 2015 towards development of new restaurants or conversion of existing restaurants under new formats in various locations across the country depending upon various factors such as the customers preference, competition, suitable location, selection of suitable premises at an affordable rent, etc., in the financial years 2015-18.

The Company had utilized 355.4 million upto March 31, 2018 out of the balance unutilized amount of 578.5 million towards the new objects relating to the business of the Company approved by the Members on November 27, 2015

The approval of Members was received through postal ballot on March 24, 2018 for variation in terms of the contract or objects of the issue, to utilise the balance amount towards development of new restaurants or conversion of existing restaurants under new formats for further period of three (3) years with effect from April 1, 2018

The initial public offer (IPO) proceeds raised as per the prospectus dated May 22, 2012 have been fully utilized during the year review for the purposes as stated in the prospectus issued for the IPO.

30. Acknowledgement

Your Directors would like to express their appreciation for the assistance and co-operation received from the banks, government authorities, customers, vendors and members during the year under review.

Your Directors also wish to place on record their appreciation for the committed services by the executives, staff and employees of the Company.

Annual Report on Corporate Social Responsibility Activities

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. A brief summary of initiative taken during the financial year 2019-20 is given below:-

1 A brief outline of the Companys CSR Policy including overview of projects or programs proposed to be undertaken and a reference to web-link to the CSR Policy and Projects or programs A brief outline of the Companies CSR Policy: The Company has framed the CSR Policy to identify and support initiatives aimed at:
(i) eradicating hunger, poverty and malnutrition, promoting health care and sanitation and improving the quality of life and economic well being of individuals;
(ii) training, providing and supporting educational needs of the underprivileged segments of society; and
(iii) such other activities as may be permissible under Schedule VII of the Companies Act, 2013 and the relevant rules.
The Board of Directors of the Company have already framed the Corporate Social Responsibility Policy based on the recommendation of CSR Committee and the same has been displayed on the Companys website at the following weblink:
http://www.speciality.co.in/pdf/policies/CORPORATE SOCIAL RESPONSIBILITY POLICY.pdf
In view of the inadequacy of profits, as per the provisions of the Companies Act, 2013, no amount was available to be contributed by the Company towards CSR activities for the Financial Year 2019-20.
2 Composition of the CSR Committee The composition of the CSR Committee is as under:-
Mr. Dushyant Mehta-Chairman
Mrs. Suchhanda Chatterjee-Member
Mr. Ullal R. Bhat-Member
3 Average Net Profits of the Company for the past three financial years. Nil
4 Prescribed CSR expenditure (Two Percent of the amount as in item 3 above). Nil
5 Details of CSR spent during the financial year 2019-20.
(i) Total amount to be spent for the financial year 2019-20. Nil
(ii) Amount un-spent if any. Not applicable
(iii) Manner in which the amount spent during the financial year 2019-20. Not applicable
6 In case the Company has failed to spend the two per cent of the average net profits of the last three financial years or any part thereof, the Company shall provide the reasons for not spending in its Board Report. Not applicable
7 A responsibility of the CSR Committee that the implementation The CSR Committee confirms that the implementation and
and monitoring of CSR Policy, is in compliance with CSR monitoring of CSR Policy is in compliance with the CSR Objectives
objectives and Policy of the Company. and Policy of the Company.