Speciality Restaurants Ltd Directors Report.

To,

The Members

Speciality Restaurants Limited

Your Directors hereby present the Twentieth Annual Report together with the audited Financial Statements of the Company for the financial year ended March 31, 2019.

1. Financial Results

Particulars

Standalone

Consolidated

March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018
Revenue from operations 3,463.6 2,967.9 3,463.6 2,967.9
Other Income 94.6 79.0 94.6 79.0
Total Income 3,558.2 3,046.9 3,558.2 3046.9
Earnings before Interest, Depreciation, Amortization and Tax 233.7 86.6 219.3 86.6
Less:
Finance Costs 0.0 0.0 0.0 0.0
Depreciation /Amortization/Impairment 287.0 296.6 287.0 296.6
Loss before exceptional item and tax (53.3) (210.0) (67.8) (210.0)
Share of loss in Joint venture company - - (0.2) (19.2)
Loss before exceptional item and tax (53.3) (210.0) (68.0) (229.3)
Less: Exceptional item - 101.4 - 15.8
Loss before Tax (53.3) (311.4) (68.0) (245.0)
Less: Taxes Expenses / (credit)
Current Tax 9.0 - 9.0 -
Deferred Tax - 222.6 - 222.6
Short provision for tax relating to prior years 1.1 - 1.1 -
Loss for the year (63.4) (534.1) (78.1) (467.7)
Total other comprehensive (loss) / income (4.5) 3.7 (5.3) 3.7
Total comprehensive loss for the period (67.9) (530.4) (83.4) (463.9)

2. Financial Performance and the state of Companys affairs

Currently, India is the seventh largest economy in the world and continues to be one of the fastest growing economies. It is expected to become the fifth largest economy by 2023 with young population. Indian economys growth has become more stable, diversified, and resilient due to strong GDP growth, increase in disposable income, declining unemployment and steady inflation. India is the worlds third largest economy in purchasing parity terms, aspires to better the lives of all its citizens and become a high-middle income country by 2030.

Indian food and beverage industry continues to offer opportunity for growth due to factors such as secular trends of young population, growing affluence, rising urbanisation, increase in disposable income, growth of organised retail and burgeoning digital connectivity which is driving consumption.

This was a year of sustained and noticeable growth with rise in consumption and a gradual revival of investments in the restaurant sector, which has sought re-introduction of input tax credit from the government.

Your Companys performance for the financial year 2018-19 needs to be analysed in the context of the aforesaid economic and operating environment, which remained largely optimistic.

The Companys financial performance for the financial year ended March 31, 2019 is as under:

(i) Total Income of your Company for the year under review, which was 3,558.2 million as against 3,046.9 million in the previous year, registered a growth of 16.7%.

(ii) The earnings before Depreciation, Interest, Tax and Amortization (EBDITA), which amounted to 233.7 million (6.6% of the revenue) as against 86.6 million (2.92% of the revenue) in the previous year, registered a growth of 170%.

(iii) Total comprehensive loss for the year under review was (67.9) million as against (530.4) million in the previous year, reduced by 87.2%.

During the year under review, your Company opened five (5) restaurants out of which two (2) are Company Owned Company Operated (COCO) while three (3) are Franchise Owned Company Operated (FOCO) and four (4) confectionaries. At the end of financial year ended March 31, 2019, your Company has 104 Restaurants (including 24 franchisees) and 24 Confectionaries.

During the year under review, your Companys Machaan restaurant located at Mani Square, Kolkata was converted and launched under the new brand Jungle Safari.

Your Company continues to pursue the development of new restaurants and conversion of existing restaurants under various brands to newer formats, catering to the changing preferences of consumers in domestic markets and aggressively pursuing international expansion of existing brands through franchise route to achieve sustainable and profitable growth.

Your Company continues to combat the economic factors and structural changes in the taxation regime in the country by focussing on innovative offerings to enhance guest experience together with its efforts on cost rationalisation with a view to improve operational efficiency.

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

3. Dividend on Equity Shares

The Board of Directors of your Company, after considering the financial performance during the year under review and with no surplus amount being available for declaration of dividend through reserves outstanding as on March 31, 2019, 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 ("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. Deloitte Haskins and Sells LLP, Chartered Accountants, with regard to implementation of ESOS Scheme of the Company in compliance with SEBI Regulations would be placed for 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, 2019

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

There has been no material changes and commitments, which effect the financial position of the Company subsequent to the close of the financial year ended March 31, 2019 and till the date of this report.

6. Subsidiary

Your Company has a wholly owned subsidiary company (WOS), Speciality Hospitality UK Limited as at March 31, 2019, which 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 under the UK Companies Act, 2006. The WOS is in the process of setting up restaurant at London, United Kingdom. The Consolidated Financial Statements of your Company, its joint venture and WOS, 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 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
Mainland China, Pune Times Food Awards in the category of Best Chinese.
Asia Kitchen by Mainland China, Burjuman Centre, Dubai Whats On Award in the category of Favourite Pan Asian Restaurant (Below DHS400).
Asia Kitchen by Mainland China, Burjuman Centre, Dubai Suno 102.4 FM Flavours Awards in the category of The Best Asian Food Restaurant.
Oh! Calcutta, Nehru Place, Delhi Travel & Leisure Delicious Food Awards in the category of Best Bengali Cuisine.
Oh! Calcutta, Churchstreet, Bengaluru Times Food Awards in the category of Best Bengali in Casual Dining.
Oh! Calcutta, Mumbai The Week Award in the category of Best Regional Cuisine.
Oh! Calcutta, Tardeo, Mumbai Times Food Awards in the category of Best Bengali - Casual Dining (South Mumbai).
Oh! Calcutta, Cyber Hub, Gurgaon EazyDiner Foodie Awards in the category of Best Regional Cuisine Restaurant (Peoples Choice Awards).
Name & Place of Restaurant Awards Won
Sigree Global Grill, Powai, Mumbai Food Food Awards in the category of Best World Cuisine Restaurant (Standalone).
Sigree Global Grill, Silver Spring, Kolkata Restaurant Awards 2018 in the category of Casual Dining Restaurant of the Year.
Cafe Mezzuna, Kolkata Indian Nightlife Convention & Awards in the category of Cafe Bar of the Year.
POH, Mumbai The Week award in the category of Best Fine Dining (Standalone).
Gong, Balewadi, Pune Times Food Awards in the category of Best Pan Asian Restaurant.
Sweet Bengal, Mumbai Times Food Awards in the category of Best Mithai - Casual Dining (Suburbs Mumbai).

9. Directors and Key Managerial Personnel

I. Directors

Your Company has six (6) Directors comprising three (3) Independent and three (3) Executive Directors.

None of the Directors of the Company has resigned during the year under review.

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 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 Regulations 25 of Listing Regulations. The following Non-Executive Directors are Independent Directors of the Company:

1. Mr. Dushyant Mehta (re-appointed as Independent Director by Board of Directors for second term of five (5) consecutive years commencing from April 1, 2019 upto March 31, 2024, subject to approval of Members)

2. Mr. Ullal Ravindra Bhat

3. Mr. Rakesh Pandey

III. Woman Director

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

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 with effect from September 11, 2017.

Mrs. Suchhanda Chatterjee and Mr. Indranil Chatterjee have been serving as Whole-time Directors of the Company since July 2010.

V. Re-appointment of Director

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.

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.

VI. Disclosure of Re-appointment of Mr. Dushyant Mehta

Based on the recommendation of the Nomination and Remuneration Committee, the Board has re-appointed Mr. Dushyant Mehta as an Independent Director of the Company for a second term of five (5) consecutive years with effect from April 1, 2019 till March 31, 2024, subject to approval by the members of the Company at the ensuing AGM.

The Board places on record its appreciation towards valuable contributions made by Mr. Dushyant Mehta during his tenure as a Director of the Company.

The Company has received declaration from Mr. Dushyant Mehta confirming that he meets the criteria of independence prescribed under the Companies Act and the Listing Regulations.

The Nomination and Remuneration Committee, on the basis of performance evaluation of Independent Director and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. Dushyant Mehta during his tenure, has recommended to the Board that continued association of Mr. Dushyant Mehta as Independent Director of the Company would be beneficial to the Company. Based on the above and the performance evaluation of Independent Director, at the Meeting of the Board of Directors held on March 29, 2019, the Board approved the re-appointment of Mr. Dushyant Mehta, as an Independent Director of the Company for a second term of five (5) consecutive years on the Board of the Company with effect from April 1, 2019 to March 31, 2024 subject to approval of the Members of the Company at the ensuing AGM of the Company. The Board recommends the Special Resolution for re-appointment of Mr. Dushyant Mehta, as an Independent Director of the Company.

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.

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 the Directors report.

IX. Number of Board Meetings

The Board of Directors met six (6) times during the financial year ended March 31, 2019 and the intervening gap between the meetings did not exceed the period prescribed under the 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. A separate Meeting of Independent Directors was also held during the financial year ended March 31, 2019.

Besides the above, several Committee Meetings of the Board were held during the financial year ended March 31, 2019, the detailed information of which is included in the report on Corporate Governance.

X. Share Capital

The Paid-up Equity Share Capital of the Company as on March 31, 2019 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.

XI. 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 applicable to the Company.

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.

10. 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.

11. 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 the Annual Report.

12. 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.

13. Corporate Social Responsibility

In terms of Section 135 of the Companies Act, the Board of Directors of your Company 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.

14. 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

15. 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.

16. Particulars of loans, guarantees or investments

Disclosure on particulars relating to loans, guarantees or investments made during the financial year ended March 31, 2019 under Section 186 of the Companies Act is given in the Notes to the Financial Statements.

17. Consolidated Financial Statement

The Consolidated Financial Statement of the Company and its Joint Venture company and wholly owned subsidiary for the financial year 2018-19 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.

The annual financial statement of the wholly owned subsidiary and joint venture company and related detailed information will be kept at the Registered Office of the Company and will be available to investors seeking information.

The consolidated financial statement reflect the operations of the Mainland China & Indigrill Restaurant LLC (erstwhile Mainland China Restaurant LLC), the Joint Venture company, in which your Company has 49% stake and Speciality Hospitality UK Limited, Wholly Owned Subsidiary company.

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, 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. Members interested in obtaining a copy of the Financial Statements of WOS may write to the Company Secretary at the Companys corporate office.

18. 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 2018-19, 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, 2019.

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

19. Auditors and Audit Reports

I. Statutory Auditors and their report

M/s. Deloitte Haskins and Sells LLP, Statutory Auditors of the Company were appointed at the Fifteenth Annual General Meeting of the Company held on September 15, 2014 to hold office until the conclusion of the Twentieth Annual General Meeting to be held in the year 2019. 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, 2019. The Secretarial Audit Report for the financial year ended March 31, 2019 is annexed as Annexure C which forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

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

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

21. 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 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 which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

22. Statutory Disclosures

I. Conservation of Energy, Technology Absorption and Foreign Exchange and Outgo

(i) 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

• 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 Mainland China Restaurant at Greater Kailash (GK—II) at New Delhi.

c) The capital investment on energy conservation equipments

The Company made one time capital investment of 5.12 Millions on Energy Management System during financial year 2016-17 and 2017-18. The Company during financial year 2018-19 spent 1.87 Millions in order to maintain Energy Management System.

(ii) 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.

(iii) 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:

द in Millions
Foreign Exchange Earnings and Outgo FY 2018-19 FY 2017-18
Foreign Exchange Earned in terms of actual inflows 14.3 14.3
Foreign Exchange Outgo in terms of actual outflows 3.1 1.9

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.

23. 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 company.

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.

24. 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.

25. 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 31,2019 is annexed as Annexure E which forms part of this report.

26. Directors Responsibility Statement

The Directors confirm that:-

i. in the preparation of the annual accounts for the year ended March 31, 2019, 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, 2019 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.

27. 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/ 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 / conversion of existing restaurants under new formats for further period of three (3) years with effect from April 1, 2018.

The Company has a good set of brands in different cuisines and segments and has also been investing in refreshing of brands to service the aspirations of all guests across geographies. The Company is well poised to effectively capture the growth opportunities in food and beverage domain.

The details of utilization of the IPO Proceeds and the balance outstanding as on March 31, 2019 are provided in the Corporate Governance Report.

28. 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, 2019 (DIN: 00200443)