speciality restaurants ltd share price Directors report


To,

The Members

Speciality Restaurants Limited

Your Directors hereby present the Twenty Fourth Annual Report together with the audited, standalone and consolidated Financial Statements of the Company for the financial year ended March 31, 2023.

1. Financial Results

(Rs in million)

Particulars

Standalone

Consolidated

March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Revenue from operations 3749.7 2,529.3 3,749.7 2,529.3
Other Income 237.4 136.2 241.2 136.2
Total Income 3,987.1 2,665.5 3990.9 2,665.5
Earnings before Interest, Depreciation, Amortization and Tax 1002.7 560.7 1006.1 560.1
Less:
Finance Costs 139.1 145.4 139.1 145.5
Depreciation /Amortization/Impairment 317.2 273.5 317.2 273.5
Profit before exceptional item and tax 546.4 141.8 549.8 141.1
Share of profit in Joint venture company - - 0.7 (59.6)
Profit before exceptional item and tax 546.4 141.8 550.5 81.5
Less: Exceptional item 75.9 (6.6) 83.9 -
Profit before Tax 622.3 135.2 634.4 81.5
Less: Taxes Expenses / (credit)
Current Tax 0.6 - 0.6 -
Deferred Tax (334.1) - (334.1) -
Profit for the year 955.8 135.2 967.9 81.5
Total other comprehensive income 0.7 12.2 1.9 11.5
Total comprehensive income for the period 956.5 147.4 969.8 93.0

2. Financial Performance and the state of Companys affairs

Your Company has successfully put the pandemic behind and has achieved the seventh consecutive quarter of sustained profitable growth. In the Financial Year 2022-23, we have added nearly Rs. 132 crores to achieve turnover of Rs. 398.71 crores and Rs. 82 crores to our profit after tax to achieve profit after tax of Rs. 95.58 crores, despite a volatile and high-inflationary external environment. Our performance has been especially impressive considering the challenges the world faces today.

In FY 2022-23 an impressive revenue growth of 49.6% was led by same-store sales growth at 46%. The gross margin for FY 2022-23 was approximately 70% which was similar with previous FY 2021-22.

The same needs to be analysed in the context of the economic and operating environment as under:

(i) The total income of your Company for the year under review was Rs. 3,987.1 million, as against the previous years total income of Rs. 2,665.5 million increased by 49.58%.

(ii) The earnings before Depreciation, Interest, Tax and Amortization (EBDITA), which amounted to Rs. 1002.7 million (26.7% of the revenue) as against Rs. 560.7 million (22.2% of the revenue) in the previous year increased by 4.5%.

(iii) Exceptional Item for the year under review was Rs. 75.9 million as against (6.6) million in the previous year.

(iv) Total comprehensive income for the year under review was Rs. 956.5 million as against Rs. 147.4 million in the previous year.

During the year under review, your Company opened 4 Cloud Kitchens. At the end of financial year ended March 31, 2023, your Company had 71 restaurants (including 17 franchisees), 16 Cloud Kitchens and 40 confectionaries.

During the year under review, there has been no change in the nature of the business of the Company.

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

3. Dividend on Equity Shares

Your Directors are pleased to recommend a dividend of Rs. 2.50 per share (25%) on Equity Shares of Rs. 10/- each for the financial year ended March 31, 2023 (previous year-Nil).

The Board recommended dividend based on the parameters laid down in the Dividend Distribution Policy and the dividend will be paid out of the profits for the financial year ended March 31, 2023.

The total outflow towards dividend on Equity Shares would be Rs. 11.89 crore resulting in a dividend pay-out of 12% of the standalone profits of the Company. The dividend once declared by the Shareholders will be paid within the timelines prescribed under the Companies Act, 2013 ("Companies Act") and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

Pursuant to Regulation 43A of the Listing Regulations, the Board of Directors of the Company have adopted a Dividend Distribution Policy which aims to maintain a balance between profit retention and a fair, sustainable and consistent distribution of profits among its Members. The said Policy is available on the website of the Company under the Investors section at www.speciality.co.in.

4. Book closure

In order to determine the eligibility of shareholder to vote and to receive the dividend for the financial year ended on March 31, 2023, the Register of Members and Share Transfer Books of the Company will be closed from Saturday, September 16, 2023 to Friday, September 22, 2023 (both days inclusive).

5. Transfer to Reserves

As permitted under the Companies Act, the Board does not propose to transfer any amount to general reserve and has decided to retain the entire amount of profit for Financial Year 2022-23 in the profit and loss account.

6. Audited Financial Statements

As per Regulation 34(2) of the Listing Regulations, Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2023 i.e. Balance Sheet, Statement of Profit and Loss and Cash Flow Statement are appended hereto.

There have 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, 2023 and till the date of this report, which forms a part of the Annual Report.

7. Subsidiary

As defined under the Companies Act, the Company has 3 wholly owned subsidiary companies and 2 step down subsidiaries as on March 31, 2023. There has been no material change in the nature of the business of the subsidiaries.

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 company 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.

c. During the year under review, the Company has acquired 100% of the Equity Share Capital of Speciality Hotels India Private Limited on August 2, 2022. Pursuant to the acquisition of equity shares, Speciality Hotels India Private Limited became wholly owned subsidiary company of the Company. During the year under review, the Company has subscribed to Rights Issue offered by Speciality Hotels India Private Limited of 4,000 equity shares of Rs. 100/- each amounting to Rs. 4,00,000/-.

Step Down Subsidiaries

a. Caterland Hospitality Ltd., a step down subsidiary company of the Company operates "CHOURANGI" restaurant at 3 Old Quebec St, London W1H 7AF with effect from October 7, 2021.

Chourangi is the first venture of Speciality Restaurants through its subsidiary, in the city of London. It has introduced Londons discerning food lovers to the unexplored cuisine of Calcutta - three centuries old and still evolving, bursting with taste and flavours that have never before been encountered in this city. Turnover for the year ended March 31, 2023 was GBP 22,29,541. Total profit for the year was GBP 17,975.

For further analysis on the consolidated performance, attention is invited to the section on Management Discussion and Analysis, notes to the consolidated financials and Form No. AOC - 1.

b. Foodland Ventures, LLC, a step down subsidiary company of the Company incorporated 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, wholly owned subsidiaries 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 wholly owned subsidiaries and step-down subsidiaries in Form AOC-1 is attached to the Financial Statements of your Company.

8. Scheme of Arrangement

During the year under review, the Board of Directors of the Company at its Meeting held on October 20, 2022 approved the Scheme of Arrangement between Speciality Restaurants Limited ("Demerged Company") and Speciality Hotels India Private Limited ("Resulting Company") and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, the rules and/ or regulations made thereunder (including any statutory modification(s) or reenactment(s) thereof for the time being in force), subject to requisite statutory approvals. The scheme envisages demerger of Leasehold Land at Bhubaneswar, Orissa allotted to the Company to set up food park business to exploit growth potential of the Land.

The Scheme is subject to the approval of National Company Law Tribunal (benches at Kolkata) and other regulatory authorities, as may be applicable.

The Scheme and other documents are hosted on the website of the Company, which can be accessed at the link - https://speciality.co.in/investors.html#.

9. Fund Raising

The Members of the Company at Extraordinary General Meeting held on January 18, 2023 approved issuance of 60,00,000 warrants convertible into equity shares on preferential basis at a price of Rs. 212.05 per warrant in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations") for an amount aggregating to Rs. 127.23 crores. The aggregate amount of the Issue will be utilized as per the objects of the Issue. The Company allotted 60,00,000 warrants convertible into equity shares on February 2, 2023 to the proposed allottees on preferential basis.

The Board of Directors of the Company at its Meeting held on April 29, 2023 had allotted 6,00,000 Equity Shares of face value of Rs. 10/- (Rupees Ten) each, in lieu of exercise of the conversion of 6,00,000 Warrants by warrant holders on payment of Rs. 212.05 (Rupees Two Hundred Twelve and Five Paise only) each and at the request of the 17 warrant holders extended the date of exercise of the conversion of the 54,00,000 warrants into equity shares beyond April 30, 2023 to on or before October 31, 2023, after receipt of written notice from the Company.

The details of utilization of the Funds raised through issuance of warrants convertible into equity shares, on preferential basis and the balance outstanding as on March 31, 2023 are provided in the Corporate Governance Report. During the quarter ended March 31, 2023, there was no deviation or variation in the use of funds raised through Issue of Warrants convertible into Equity Shares, issued on preferential basis from the Objects as stated in the Explanatory Statement to the Notice of Extraordinary General Meeting of the Company dated December 21, 2022.

10. 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 award:

Name & Place of Restaurant Award won
Mainland China, Mumbai Best Outlet (Viviana Mall)

11. Directors and Key Managerial Personnel

(i) Directors

Your Company has eight Directors comprising four Independent and four Executive Directors. During the year under review no Directors and Key Managerial Personnel were appointed or have resigned.

(ii) Independent Directors

In terms of the definition of Independent Directors as prescribed under Listing Regulations and the Companies Act, the Company has received necessary declaration from each independent director under the Companies Act, to the effect that each of them meet the criteria of independence laid down in the Companies Act and 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 the 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; and

4. Dr. Anita Bandyopadhyay.

In terms of Section 150 of the Companies Act and Rule 6 of the Companies (Appointments and Qualifications 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. Further, they have either confirmed that they are exempted or successfully undergone online proficiency self assessment test as required under the Companies Act.

The Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Companies Act and applicable rules thereunder) of all the Independent Directors.

(iii) Woman Director

Mrs. Suchhanda Chatterjee is a Director of the Company since the incorporation of the Company.

The Board and Members of the Company approved appointment of Dr. Anita Bandyopadhyay (DIN: 08672071) as an Independent Director of the Company for a term of five years with effect from February 3, 2020.

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.

(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 of the Company was designated and appointed as Deputy Managing Director of the Company with effect from February 3, 2020.

Mr. Avik Chatterjee was appointed as Whole-time Director (designated as Executive Director - Innovation and New Formats) of the Company with effect from February 3, 2020.

Further details about the directors seeking re-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 Anjan Chatterjee (DIN: 00200443)

The Nomination and Remuneration Committee and the Board of Directors of the Company at their respective meetings held on May 29, 2023, subject to the approval of the Members in the ensuing annual general meeting of the Company, approved the reappointment of Mr. Anjan Chatterjee, as Managing Director of the Company for a period of five years with effect from December 27, 2023. A resolution seeking Members approval for his re-appointment forms part of the Notice of the ensuing 24th Annual General Meeting.

Indranil Chatterjee (DIN: 00200577)

In accordance with the provisions of the Companies Act and the Articles of Association of the Company, Mr. Indranil Chatterjee, (DIN: 00200577) Director of the Company retires by rotation at the ensuing annual general meeting and being eligible, offers himself for re-appointment. A resolution seeking Members approval for his re-appointment forms part of the Notice of the ensuing 24th Annual General Meeting.

The above re-appointments were recommended by Nomination and Remuneration Committee and approved by the Board and consequently recommended by the Board to Members as applicable.

Brief particulars and expertise of directors seeking appointment/re-appointment together with their other directorships and committee memberships have been given in the annexure to the Notice of the AGM in accordance with the requirements of the Listing Regulations and Secretarial Standards.

(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 dated January 5, 2017, 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, senior management 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 seven times during the financial year ended March 31, 2023 and the intervening gap between the meetings did not exceed the period specified 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. All the Board and committee meetings took place virtually. Measures were taken to ensure security of information and confidentiality of process, at the same time, ensuring convenience of the Board members.

Besides the above, several committee meetings of the Board were held during the financial year ended March 31, 2023, the detailed information of which is included in the report on Corporate Governance.

The Meeting of Independent Directors was held on March 28, 2023.

(x) Committees of the Board

a) Audit Committee

b) Nomination and Remuneration Committee

c) Corporate Social Responsibility Committee

d) Risk Management Committee

e) Stakeholders Relationship Committee

During the year under review, all recommendations of the Committees were approved by the Board. The details including the composition of the Committees including attendance at the Meetings and terms of reference are included in the Corporate Governance Report, which forms a part of the Annual Report.

(xi) Pecuniary relationship or transactions with the Company

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees for the purpose of attending meetings of the Board/ Committee(s) of the Company.

12. Share Capital

The Paid-up Equity Share Capital of the Company as on March 31, 2023 was Rs. 46,95,76,570/-.

During the year under review, the authorized share capital of the Company increased from Rs. 58,00,00,000 (Rupees Fifty Eight Crores only) divided into 5,10,00,000 Equity Shares of Rs. 10 each and 70,00,000 compulsorily convertible preference shares of Rs. 10 each to Rs. 67,00,000 (Rupees Sixty Seven Crores only) divided into 6,00,00,000 Equity Shares of Rs. 10 each and 70,00,000 compulsorily convertible preference shares of Rs. 10 each.

During the year under review, the Company issued 60,00,000 warrants convertible into equity shares, on preferential basis at a price of Rs. 212.05 per warrant in accordance with the ICDR Regulations for an amount aggregating to Rs. 127.23 crores.

The details of movement in the paid up equity share capital of the Company are given below:

Particulars Amount (Rs)
Paid Up Equity Share Capital as on March 31, 2023 46,95,76,570
Additions pursuant to allotment of equity shares upon conversion of warrants (Allotment approved at the Meeting of Board held on April 29, 2023) 60,00,000
Paid Up Equity Share Capital as on April 29, 2023 47,55,76,570

The equity shares so allotted rank pari passu with the existing equity shares of the Company. Except as stated herein, there was no other change in the share capital of the Company.

Except as mentioned above, the Company had not issued any other shares or instruments convertible into equity shares of the Company or with differential voting rights nor has granted any sweat equity.

13. Related Party Transactions

There were no materially significant related party contracts, arrangements and transactions entered during the year under review by your Company. The details of the transactions with related parties are provided in the accompanying financial statements.

The Related Party Transactions entered into during the year under review were in the ordinary course of business, at arms length basis and were in compliance with the applicable provisions of the Companies Act read with the rules framed thereunder and the Listing Regulations. No material related party transactions were entered into during the year under review. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act in Form No. AOC-2 is not applicable to the Company for the financial year 2022-23 and hence does not form part of this Annual Report.

In terms of Regulation 23 of the Listing Regulations, the Company submits details of Related Party Transactions as per the prescribed format to the stock exchanges on a half-yearly basis.

The policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on the Companys website at the following web link https://speciality.co.in/pdf/pdf 2/Policies/Final SRL-Policy-on-RPT 0908.pdf

14. 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 practicing company secretaries confirming compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations is attached to report on Corporate Governance.

15. 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.

16. Business Responsibility & Sustainability Report

The Company endeavours to cater to the needs of the communities it operates in thereby creating maximum value for the society along with conducting its business in a way that creates a positive impact and enhances stakeholder value. As per Regulation 34(2) (f) of the Listing Regulations, the Business Responsibility & Sustainability Report depicting initiatives taken by the Company from an environmental, social and governance perspective forms part of this Annual Report.

17. 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.

18. 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 https://speciality.co.in/pdf/pdf 2/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 A which forms part of this report.

19. Vigil Mechanism / Whistle Blower Policy

In pursuance of the provisions of Sections 177(9) and 177(10) of the Companies Act and Regulation 22 of the Listing Regulations, 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 https://speciality.co.in/pdf/pdf 2/Policies/VIGIL MECHANISM POLICY.pdf

20. Risk Management

Your Company has constituted Risk Management Committee to monitor and review the risk management plan and such other functions as assigned from time to time.

The Company has implemented a mechanism for risk management and formulated a Risk Management Policy. The said policy provides for creation of a risk register, identification of risks and formulating mitigation plans. Major risks identified by the business and functions are systematically addressed through mitigation actions on a continuing basis.

The Company has set up a Risk Management Committee which is chaired by Mr. Rakesh Pandey, Independent Director, to monitor the risks and their mitigation actions as well as formulating strategies towards identifying new and emergent risks. Further, the Board is apprised of any actual / emergent risk that may threaten the long term plans of the Company.

Your Company has in place a Risk Management Policy to identify and evaluate business and other risks. The Company recognizes that these risks need to be managed and mitigated to protect the interest of the stakeholders and to achieve business objectives. The risk management framework is aimed at effectively mitigating the Companys various business and operational risks, through strategic timely actions. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis which forms a part of the Annual Report.

21. Particulars of loans, guarantees or investments

Disclosure on particulars relating to loans, guarantees or investments made during the financial year ended March 31, 2023 under Section 186 of the Companies Act is given in the notes to the Financial Statements.

22. Consolidated Financial Statement

According to Section 129(3) of the Companies Act, the Consolidated Financial Statement of the Company, its joint venture company, wholly owned subsidiaries and step-down subsidiaries for the financial year 2022-23 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 Statements 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 wholly owned subsidiaries have also been placed on the website of the Company i.e. www.speciality.co.in.

23. 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 2022-23, 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, 2023.

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

24. 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 the financial year 2022-23 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 had appointed M/s. T. Chatterjee and Associates, a firm of company secretaries in practice, to conduct the secretarial audit of your Company for the financial year ended March 31, 2023. The Secretarial Audit Report for the financial year ended March 31, 2023 is annexed as Annexure B which forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

25. 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.

26. 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 C 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 to the Members of the Company 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.

27. 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 remains 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 installed 20KW solar power plant at its restaurant premises at Greater Kailash (GK—II) at New Delhi.

(c) The capital investment on energy conservation equipments

During the year under review, the Company made capital investment of Rs. 12.7 million on energy conservation equipments.

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:

Rs in million

Foreign Exchange Earnings and Outgo FY 2022-23 FY 2021-22
Foreign Exchange Earned in terms of actual inflows 13.95 11.78
Foreign Exchange Outgo in terms of actual outflows 0.89 0.16

(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.

28. 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.

(vi) The Company is not required to maintain the cost records as specified by Central Government under section 148 (1) of the Companies Act and rules made thereunder.

(vii) The requirement to disclose the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

29. Proceedings under Insolvency and Bankruptcy Code, 2016

During the year under review, there were no proceedings that were filed by the Company or against the Company, which are pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other Courts.

30. 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.

31. Annual Return

In terms of Sections 92(3) and 134(3)(a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the link: https://speciality.co.in/investors.

32. Directors Responsibility Statement

The Directors confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2023, 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, 2023 and of the profits 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.

33. 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.

For and on behalf of the Board
Speciality Restaurants Limited
Anjan Chatterjee
Place: Mumbai Chairman & Managing Director
Date: May 29, 2023 (DIN: 00200443)