Speciality Restaurants Ltd Management Discussions.

Economic Overview

The contraction in GDP was seen in all economies around the world including India, due to COVID-19 pandemic which was unprecedented in the history of mankind resulting in fear and uncertainty. People drastically curtailed discretionary spendings and focused only on essentials and more on savings due to job loss, or salary cuts or reduced earnings for businesses across all sectors barring healthcare, the fallout of which restricted mobility and reduced economic activities. Before even recovering from the first wave there were eruptions of new waves and variants of the mutating virus which necessitated restrictions and further lockdowns, to prevent a collapse of the healthcare system which significantly impacted all businesses.

Countries responded to the pandemic by deploying measures to stimulate the economy through liquidity support, tax cuts and other regulatory changes. The Government of India also announced a special economic and comprehensive package under AtmaNirbhar Bharat including measures taken by RBI amounting to about 27.1 lakh crore - more than 13 per cent of Indias GDP - to combat the impact of the COVID-19 pandemic and to revive economic growth. The package included, among others, in-kind and cash transfer relief measures for households, employment provision measures under Pradhan Mantri Garib Kalyan Rojgar Abhiyaan and increased allocation under MGNREGS, credit guarantee and equity infusion-based relief measures for MSMEs and NBFCs and regulatory and compliance measures. Structural reforms were also announced as part of the AtmaNirbhar Bharat Package which, inter alia, included deregulation of the agricultural sector, change in definition of MSMEs, new PSU policy, commercialization of coal mining, higher FDI limits in defence and space sector, development of Industrial Land/ Land Bank and Industrial Information System, revamp of Viability Gap Funding scheme for social infrastructure, new power tariff policy and incentivizing States to undertake sector reforms.

Indias growth contracted by 7.7 percent in the financial year 2020-21 and is estimated to grow by 10.5 percent in 2021-22 subject to normalization of economic activities and speedy rollout of COVID-19 vaccination drive.

This was a year of survival for the restaurant sector. The Covid-19 pandemic since mid-March 2020 onwards has continued to cause enormous disruptions in the industry and we anticipate a mid to long term shifts in consumer behaviour. The restrictions were gradually relaxed within a regulated environment since September 2020 onwards. During the second half of the year, the Company witnessed some signs of recovery in business. However, the second wave of the COVID-19 pandemic with imposition of lockdowns and restrictions in the last few months have again resulted in reduction in revenues pushing the company back to a survival mode. Though there has been an increased vaccination drive initiated by the Government of India, your Company continues to closely monitor the situation.

Your Companys performance for the year 2020-21 was severely impacted and needs to be analysed in the context of the aforesaid economic and operating environment.

Food and Beverages Service Industry Overview

Food and Beverages industry is one of the key segment of the Indian economy contributing to employment generation, skill development, growth in the allied industries, entrepreneurship and creating experiences.

The restaurant sector has higher manpower requirement as all functions are manual and labour driven and also provides impetus to other allied sectors as well, such as agriculture, food processing, supply chain and logistics, consulting, digital technology, specialised commercial kitchen equipments and real estate.

The food services sector continues to attract investment from domestic as well as international players as the sector has high growth potential led by domestic consumption.

The Indian food services market has evolved from unorganized home grown, standalone, family run business ventures into organized structure with priorities on transparency, corporatisation with formation of chain of restaurants, international partnerships with multipolar and integrated business models such as COCO (company owned company operated) and FOCO (franchise owned company operated) models. A number of reputed International chains of restaurants are already in the Indian market leading to a surge in the share of organised sector in the Indian food service industry.

Industry Trends

Food and Beverage Trends

• Healthy food to boost immunity

• Wholesome small eats are most preferable

• Consumers are moving towards sugar-free food or food with less sugar.

• Consumers are looking for high-protein, grab-and-go options that are both nutritious and convenient, such as nutritious puffed snacks, dry fruits, prunes and protein bars.

• Alternative diets such as gluten-free, dairy-free, vegan and keto options are becoming menu mainstays.

• Food presentation playing a bigger role because of the growth of social media influence.

Eating Out

Over the years, the Indian consumers profile, behaviour and spending patterns have evolved with the changing economic, social and demographic landscape. The widening exposure to new cultures and cuisines and the increased propensity of eating out, along with the growing need for home delivered food and take away has led to the growth of the food service market. Eating out is now no more restricted to specific occasions such as business meetings, celebrations of any kind, periodical family outing but its now more seen as a need for change in palate and as an alternate to home cooking and looking out for new cuisines each of which have become an occasion in itself. Consumers are slowly embracing the mid-week break as against weekend offs. Eating out on weekdays is catching up as a new trend as against only being restricted to weekend. Consumer is also becoming increasingly conscious of dining at high profile outlets across socioeconomic segments and more brand conscious also. On the positive side India has now one of the youngest population in the world and the food service industry is benefitting from it with a young, dynamic and diverse food-loving consumer with a high disposable income. The growing participation of women in the workforce and double-income families preference for eating out or ready- to-eat meals are also creating new opportunities in the industry.

Eating out as an experience

Consumers look forward to experiences in order to de-stress from daily hectic routines. Eating out has emerged as a prominent avenue for relaxing and spending quality time with the family or with friends. Hospitality sector provides a great dining experience where the guest needs are anticipated and met with consistently great tasting food, wide varities, innovative presentation, unique food concepts coupled with exceptional service.

Social Media / Digital Marketing

Social media with accessibility through smart phones, has become an integral part of the young populations lifestyle. Indian food service operators are making use of social media to communicate offers, incentives, product information and promotions. Rise of various food tech models, enhanced penetration of internet and increase in internet speeds, use of technology to improve consumer experience and continued use of social media for consumer engagement are some of the key trends that continue to influence and shape the Indian food service sector. Social media presence for restaurants also defines how popular they are.

Focus on consumer engagement using technology

Technology has become an avenue for the restaurant industry to focus on consumer engagement. It has helped the consumer to express their views and opinions, compare and evaluate choices and share feedback. With the emergence of technology enabled food service and restaurant discovery players the consumers are now making table reservations, ordering food either online or through a phone call and use mobile wallets for payment. Application based online aggregators and development of third party logistics service providers has brought in a whole new dimension to food service business.

Food Discovery/Restaurant Search: Food guides and eating out directories of restaurants with reviews, opinions and vital information are available with food discovery or restaurant search players at just a few clicks away.

Table Reservation: Fine dine restaurants offer table reservation service to their clients to manage demand more efficiently and improve on sourcing and staffing. It is beneficial to a customer as reservation guarantee ones table at the designated time and place with the likely hood of personalised service at the restaurant.

Online ordering: Technology has helped to manage time and also eased the process of customers having to travel to a restaurant for eating out without the waiting period. Today customers can use their smartphones and order food from any restaurant of their choice thus enabling them to save time on travelling and enjoy their choicest food while at work or at leisure.

Market Segments

The market segment of the organized food service industry is led by Quick Service Restaurants followed by Casual Dine-in formats followed by Cafe chains, Frozen Desserts, Ice-creams and then followed by Fine dining. The rest of the market is shared by Pubs, Bars, Clubs and Lounges. QSR and Casual Dine-in are popular with working professionals while Fine dining is family get together and more occasion driven.

Evolving Customer Preferences

Food services industry is largely driven by changing consumer preferences. Key players in the industry are continuously monitoring such patterns and accordingly offering innovative and new products. Whether it is the health-conscious nature of a particular age group or changing consumer taste; the Indian food service industry has started regular modification of products and services. Customization of products and services have become the key success driver in todays industry. Eating out has evolved the lifestyle of todays progressive young Indians, who are willing to experiment different cuisines and beverages.

Experimenting with Cuisines

The strong cosmopolitan culture of major metros of India is also represented in the cuisine mix of the cities. Consumers are experimenting with regional as well as international cuisines. The food service industry is catering to these demands by serving a variety of foods from across the world like Italian, Mexican, Japanese, Middle Eastern, Mediterranean, Modern European, African besides the all time popular Chinese, Thai, and American fast foods over and above the Indian and regional cuisines.

Emerging retail formats

Dedicated food courts and food malls and new retail avenues such as airports, amusement parks are driving consumers towards food counters. In Malls fine dining / semi-casual dining restaurants in a controlled atmosphere lends variety to the food retail space with paid parking facility, which is a very essential factor to any retailing establishments success. Mall developers consider fine-dining restaurants very important to their overall tenant mix because they help the establishment to attain a degree of exclusiveness and give customers a more holistic experience. Malls have become one of the most popular and visited retail formats, as it gives a holistic experience to the buyer and satisfies his various needs under one roof, from attires, accessories, salons and spas to cinemas, gaming zones, super markets and of course dedicated food courts with cafes interspersed.

Over the last couple of years, fine dining restaurants have been on the rise in India and many operators are coming up with novel concepts. The upwardly mobile Indian customer has lapped it up all, and there is a significant increase in interest by mall operators to include fine dining options.

Dine-in v/s Take-away/Deliveries

The take-away and delivery segment has grown steadily and restaurants are providing option to consumers for ordering food at home/ office.

Cloud Kitchen

A cloud kitchen is a centralised kitchen for a chain of outlets/ restaurants that accepts orders only through online ordering systems and offers no dine-in facility. Cloud kitchen format has emerged as an alternative as it can be setup with a very low capital expenditure as compared to a Cafe or a Restaurant and helps in increasing the delivery revenues of the restaurant chain with cost benefits.

A Cloud Kitchen also acts as a Commissary base kitchen delivering raw materials, sauces, all basic ingredients and food in portions to multiple restaurants. This format is helping the industry to reduce the high rental cost and also cost of labour and also helping in faster turnaround over and above standardisation of quality.

Kitchen within Kitchen

It is a kitchen within existing restaurant kitchen, which offers no dine in facility. It is dedicated to meet the requirements of online delivery services, facilitated by the third party delivery apps. It is easy to setup multiple brands using the existing infrastructure with a very low capital expenditure as compared to a Cloud Kitchen and helps in the operation of a chain of restaurants with sweating of assets at the existing restaurant.

International Opportunities

Indian cuisines are also being accepted and gaining popularity in international markets which is a very healthy sign for the growth of the industry. Theres global demand for Indian cuisine as its popularity caters to the diaspora, and popular Indian restaurant chains are leveraging that with financial and management bandwidth and harnessing this opportunity.

Many Indian restaurant operators had entered the global market with traditional and exclusive Indian regional cuisines due to attractive growth potential, ease of doing business, fewer regulatory issues and higher returns on investment than in India.

With a vision to tap this opportunity, many established Indian food service operators including your Company have entered key markets such as Middle East, United Kingdom and United States of America for profitable growth.

Opportunities and Challenges

New opportunities are emerging in the organised segment in certain locations where a high density of people congregate, including shopping malls, travel terminals, office complexes. Shopping Malls with multiplex, in particular are becoming a customary place for congregation leading to an increase in customer spending. Shopping malls tend to favour efficient formats such as kiosks and food courts and casual dining restaurants, while fine dining full-service restaurants are likely to remain as standalone.

The success of your Company depends on its ability to identify strengths & opportunities and leverage them while mitigating the risks that arise while conducting its business. The strength of our restaurants lie in what we do best viz., serving tasty food, offering quality service and providing an unforgettable dining experience which serves as a key differentiator with other brands with the motto of making you feel special.

Opportunities for the Company are -

• Millennial centric brands.

• Optimizing share of delivery and take-away formats, with focus on convenience and assurance of hygiene standards.

• Strengthening our delivery business with new product innovations, like Meal-in-a-box

• Experimentation with new formats, themes and menus;

• Setting-up of Cloud Kitchens / Commissary, and also Kitchen within Kitchens through sweating of assets (converting all our existing kitchens into multi brand kitchens)

• International expansion.

• Strategic / differential pricing for the buffet format for weekday and weekend.

• Riding on the technology wave with tech savvy consumers and online food aggregators.

Your Companys success depends on the value and relevance of its brands and products to consumers and on our ability to bring in changes, innovate and remaining competitive and ahead of time. Consumer tastes, preferences and behaviours are changing more rapidly than ever before. Your Companys ability to identify and respond to these changes is vital to its business success. We continue to work on creating innovative products with the objective that those continue to meet the needs of consumers.


The Companys prospects largely depends on economic factors such as changes in regulatory environment i.e., food inflation triggered by increasing fuel prices, licensing regulations, competition, operational challenges including high real estate cost, availability of skilled manpower, supply chain management, people management and all that it entails - from recruiting, training holds the key to engage with the new age young techno savvy consumers.

Competitive Advantage

Your Company continues to enjoy leadership position in the Fine Dining Industry. The key to this has been the continuous and well-paced focus on innovation, building on existing strengths and pragmatic expansions.

Your Company continues to be at the top in occupying the mind share of consumers in the Fine Dining and Casual Dining segment is gaining share of the of Cloud Kitchens by expanding. The key to this has been continuous endeavour on improvement and building on our existing strengths and pragmatic expansions.

During the year under review, your Company opened seven (7) Company Owned Company Operated (COCO) restaurants and eight (8) confectionaries. At the end of financial year ended March 31, 2021, your Company has 79 restaurants (including 16 franchisees) and 38 confectionaries.

Mainland China, our flagship brand, focuses on serving Chinese cuisine with contrasting flavours and spices. The Company has succeeded in retaining a high brand recall over the years and has won many awards for the same. With a new initiative of rationalising the Menu with new offerings and backed by fresh training and standardising certain mother sauces and ingredients have helped improve consumer satisfaction. It has won Best Chinese Restaurant - Casual Dining award by Times Food and Night Life Awards 2021.

Asia Kitchen by Mainland China was created as a brand refresh of the mother brand offering a much less uninhibited space to attract the larger and younger audience. With almost 50% of Chinese cuisine (best of Mainland Chinas offerings) coupled with 50% new offerings in the form of Pan Asian cuisine which includes gourmet dishes from Hong Kong, Singapore, Malaysia, Thailand, Japan, Korea, Myanmar in addition to China, it has already carved its own identity successfully migrating the equity of Mainland China.

It has won Best Oriental Restaurant - Casual Dining award by Times Food and Night Life Awards 2021.

Oh! Calcutta continues to be the coveted destination for Bengali food lovers and now a big draw for global travellers and food connoiseurs and remains one of our core brands. With a rare cuisine that celebrates Calcuttas melting pot of cultures, Oh! Calcuttas appeal reaches out to food connoisseurs far beyond Bengalis and today it is truly recognised as global cuisine.

It has won Best Bengali Restaurant - Casual Dining award by Times Food and Night Life Awards 2021.

Gong, serving modern asian cuisine exudes a new level of happiness with its high energy ambience that is a contemporary take on traditional Japanese temple architecture. Though categorised as pan asian, it offers diverse Asian flavours that are prepared using western cooking techniques and presentations to take you through a journey of the mysterious culinary traditions in the Far-East.

Sigree Global Grill is another one of the core brands serving grilled flavours from the Mediterranean, Oriental, Spanish, Mexican and Indian cuisine. It has an innovative vibrant format with live grills on each table that adds an aroma to the ambience.

Hoppipola which was launched primarily to attract the younger TG with high disposable income. It is an All-day Bar serving finger food, bar nibbles and innovative mocktails. Its target market is those young-at-heart.

Cafe Mezzuna which offering modern European food in a semi-casual format lends diversity to the brand portfolio. It serves dishes with Mediterranean, Moroccan, Spanish, French and Italian flavours alongwith a complimenting bar menu.

It has won Best Global - Premium Dining award by Times Food and Night Life Awards 2021.


Infused with a contemporary Indian cuisine - Riyasat is a story woven through royal celebrations and victories and is inspired from the stately homes of the royal families of the 19th century. The cuisine is inspired from the North-western frontiers that is vibrant, robust and encompasses the healthier culinary techniques and dining experiences to blend in with the changing time and trends.

It also boasts of crafted beverages curated by mixologists, embracing the past with twists on classics - creating a theatrical mood where you can sit and just immerse into the experience.

It has won Best North Indian - Premium Dining award by Times Food and Night Life Awards 2021.


A place that is vibrant and chic, with stunning decor, a splash of pop colours that spell youthful and breathes of fresh air is for all day and any mood. With striking blue walls with large and small butterfly murals, the 120-seater also makes use of elements like soothing green and quirky writings on the wall, giving BARishh a balanced look and feel.

The entire food menu is derived out of Indian ingredients with a western touch to it making global in presentation. Gin has been having its moment for the last couple of years and the moment is only here to stay. Created by international mixologists, highlights of BARishh are not just cocktails but innovative gin infusions featuring on it.

BARishh is for the modern Indian youth who loves living in the grey areas of life where its very non-committal... a zone we all live in.

It has won Best Resto-Bar award by Times Food and Night Life Awards 2021.

Episode One

Episode One is one of a kind resto-bar serving delectable food from all over the world along with some beautifully crafted taptails. Episode One is todays take on a Gymkhana or the British Club. Episode One desires to build a creative community bringing together like minded individuals from all walks of life including art, music, fashion, films, media, technology and more.

It has won Best Global Restaurant - Casual Dining and Best Bar for Beer award by Times Food and Night Life Awards 2021.

Sweet Bengal It has proved to be the favourite Bengali sweet destination. The sole credit for this goes to the innovative and traditional spread of Bengali Sweets created from pure cows milk by ‘karigars’ from West Bengal who literally crafts each and every sweet. With 35 outlets it is the only chain serving authentic Bengali sweets and Bengali snacks in Mumbai.

It has won ‘Best Mithai - Casual Dining award by Times Food and Night Life Awards 2021.

Dariole is your cosy, affectionate neighbourhood confectionary and cafe, where the citys best croissants, buns, puffs, wraps, cakes, cookies, pastries and breads are born every day.

Haka, devised for the guest on the go. Haka is ideal for those seeking to shop or watch a movie and have a quick bite. Featuring modern Chinese cuisine in small plates including dim sums and quick meal at comfortable prices, typically found on Hong Kong and Shanghai streets. The contemporary ambience of each Haka restaurant is created with red walls and modern impressionist artwork emphasizing efficiency and functionality in layout.

Risk, concerns and Mitigation

Business risks such as industry risk, general economic conditions, socio-political risks and company specific risks exist for any enterprise having national and international exposure. Your Company also faces some such risks, the key ones being - a longer than anticipated delay in economic revival, continuing inflationary conditions, dependence on fine-dine segment, competition from global chains and other segments of the restaurant industry, hostile neighbouring countries and any sudden unanticipated change in regulatory framework for the industry. Covid-19 Pandemic

The COVID-19 pandemic has emerged as a major global challenge, creating economic and social disruptions along with tragic loss of lives and livelihoods across the world. The eruptions of new waives and variants of the virus necessitated restrictions and lockdowns, not only posed a health challenge but significantly impacted businesses.

The COVID-19 pandemic has caused widespread disruption in the industry and we have seen shifts in consumer behaviour. The digital disruption is boon for the growth of online delivery module. We see rise of consumers who are more price and value conscious in their choices, given the uncertainty caused by the pandemic.

The challenge has transformed business and business models to create a new work order. Your Company has identified new locations as well as existing kitchens/outlets to make them operational as we are experiencing higher customer preference due to the unwavering faith and confidence in our established brands not only on the food but on hygiene and safety parameters which is now the new norm.

The pandemic has led to changes in food consumption habits. Consumers have started experimenting with convenience leading to a shift in preferences for easy-to-prepare meals. Being confined to homes, balancing work and household chores, has led to an increase in the demand for food and beverage options. As there was need for food and beverages from trusted brands during and post-lockdowns, your Company operated kitchens from select locations for deliveries and takeaway services, as per Government directives. Food deliveries were carried out primarily through delivery channels/food aggregators and also through own delivery vehicles.

The few steps taken by the Company are as follows:

(i) All safety protocol related to Covid-19 as advised by the government are being implemented.

(ii) The Company has issued safety guidelines for its employees and workers.

(iii) All employees are required to wear protective face masks and gloves.

(iv) Social distancing norms being strictly followed at offices.

(v) Contactless ordering and delivery for guests with gloves, face masks, social distancing and sanitization.

(vi) Sanitization of premises.

(vii) Temperature control.

The Company, with its 25 years of unparalleled brand equity, being a food-led Company with established brands for takeaway and delivery, continues to be in a position of strength to overcome this crisis and capture future growth opportunities in an optimal manner.

Details of impact of COVID-19

(i) The Company has adequate liquidity which will ensure to meet its obligations.

(ii) The Company doesnt have any debt on its book. Hence there is no impact pertaining to debt obligations on the Company.

(iii) The supply chain was intermittently disrupted in view of lockdown and subsequent lockdown. The Company has worked with its vendors to ensure that supply was not impacted

(iv) The Company does not see incremental risk to recoverability of its assets (Inventories, Investments, Receivables, Deposits etc.) given the measures being undertaken to mitigate the risks.

(v) The Company has reviewed the existing contracts/agreements and judiciously sought and received relief during the lockdown period and thereafter.

The Company is well aware of these risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions.

Raw Material Costs

In addition to renewing contracts at better rates, the Company has undertaken import substitution to the extent possible without compromising quality.

Commodity Prices

Changes in commodity prices reduce profit margins. The impact of commodity price fluctuations is managed by the Company across its value chain to effectively manage its financial performance and profitability by negotiating with the suppliers towards a fixed price agreement. Fixed Costs

The restaurants which have been launched by the Company are of a more compact size to reduce the fixed costs and to enhance efficiencies. Various re-negotiation with the owners of the property during the year has resulted in reduction of the rent cost.


Multi-tasking of the workforce has been the key during this period of new normal which took care of the kitchen within kitchen serving multiple brands from the same location for delivery and takeaway.


The brand positioning and refreshment of the existing brands as well as introduction of new brands targeted at niche cuisines or customer has helped the Company to remain competitive. Hoppipola which is specifically for younger crowds and Cafe Mezzuna which covers European cuisine are examples of the same. Asia Kitchen by Mainland China riding on the equity of the mother brand has included Pan Asian dishes in addition to the traditional fare of its Chinese cuisine offerings and promises to be a winner going forward. Sigree Global Grill is being positioned as another winner brand and is receiving a great response.

Internal Controls System and their Adequacy

Your Company has put in place adequate internal controls system to ensure that all assets are protected, with documented procedures covering all corporate functions and restaurants. Systems of internal controls are designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls and compliance with applicable laws and regulations.

Adequate internal control systems are in the form of various policies & procedures issued by the Management covering all critical and important activities viz. Revenue Management, Restaurant Operations, Purchase, Finance, Human Resources, Safety, etc. These policies & procedures are updated from time to time and compliance is monitored by Internal Auditor. The Company continues its efforts to align all its processes and controls with best practices. The effectiveness of internal controls is reviewed through the internal audit process, which is undertaken for operational units and all major corporate functions.

The Company uses an Enterprise Resource Planning (ERP) application to record data for accounting, consolidation and management information purposes and connects to different locations for efficient exchange of information. The Companys internal control systems are commensurate with the nature of its business, the size and complexity of operations.

The Audit Committee of the Board oversees the adequacy of the internal control environment through regular reviews of the audit findings and monitoring implementations of internal audit recommendations through the compliance reports submitted to them.

The Chairman & Managing Director and Executive Director-Finance & CFO of the Company have provided a certificate on the adequacy and effectiveness of internal controls system and procedures, which forms part of this annual report.

Financial Performance Accounting policy

The financial statements have been prepared in accordance with the Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2015.

Standalone Financial performance for the year ended March 31, 2021

a) Total Revenue ( In Millions)

2020-21 2019-20 Change (?) Change (%)
Revenue From Operations 1,501.4 3,577.9 (2,076.5) (58.0)
Other Income 166.6 101.3 65.3 64.4
Total 1,668.0 3,679.2 (2,011.2) (54.6)

Total Revenue for the year was lower by 54.6% from the previous year. The dine-in business was significantly impacted due to Covid-19 pandemic from the third week of March 2020. With unlock plan by various State Governments business started recovering in H2FY2021 which recorded 80% of the financial year business. Companys focus on delivery from cloud kitchen and kitchen within kitchens yielded results. Other income includes interest received from Banks/Others, Dividend on Mutual Fund Investments, Profit on Sale of Current Investments and Fixed Assets (Net), Foreign Exchange Gains (Net) and Miscellaneous Income.

b) Cost of Material Consumed ( In Millions)

2020-21 2019-20 Change (?) Change (%)
Cost of Material Consumed 452.0 1,134.8 (682.8) (60.2)

The decrease in Cost of Material Consumed was variable to Revenue from Operations which correspondingly decreased by 58% from the previous year.

c) Employee Benefit Expenses

( In Millions)

Employee Benefit Expenses 2020-21 2019-20 Change (?) Change (%)
338.3 820.2 (481.9) (58.8)

Employee Benefit Expenses comprises salary, bonus, allowances, Staff welfare expenses and Companys contribution to Provident Fund, ESIC and Gratuity. In response to the Covid-19 pandemic, the Company has been compelled to take many steps to control employee costs. These included optimizing the employee strength at restaurants, temporary reduction in the salary and leave management. Reduction in senior management salaries, variable pay and incentives also contributed to savings in employee benefit expenses.

d) Finance Costs (? In Millions)

2020-21 2019-20 Change (?) Change (%)
Interest 165.0 211.5 (46.5) (22.0)

There was no debt in the Company during the financial year. The interest under finance cost is due to computation of interest on lease liability on Right of Use Asset as per IND-AS 116 during the financial year.

e) Depreciation and amortisation expense (? In Millions)

2020-21 2019-20 Change (?) Change (%)
Depreciation and amortisation expense 322.4 574.9 (252.5) (43.9)

The charge for depreciation on Property, Plant & Equipment and Intangible assets was ? 130.39 million and Right of Use assets as per IND-AS 116 was ? 191.99 million (previous year ? 365.35).

f) Other Expenses (? In Millions)

2020-21 2019-20 Change (?) Change (%)
Other Expenses 725.6 1054.6 (329) (31.2)

Other expenses includes rent, power & fuel, rates, taxes & license fee, insurance, operating supplies, advertising and marketing expenses, repairs and maintenance and other miscellaneous expenses. The company undertook various cost optimization effort in response to unprecedented drop in Revenues consequent to COVID-19. It promptly began reviewing the fixed cost such as re-negotiating the rentals with the owners of the property, optimal manning at the restaurants and reduction of corporate overhead

g) Profitability (? In Millions)

2020-21 2019-20 Change (?) Change (%)
Loss Before Tax (LBT) (291.7) (390.6) 98.9 25.3
Loss After Tax (Net Loss) (293.4) (381.6) 88.2 23.1

The performance during the year under review was impacted due to Covid-19 pandemic resulting into country wide lockdown because of which the dine-in operations at restaurants were shut for a considerable period.

Financial Position

a) Equity (? In Millions)

2020-21 2019-20 Change (?) Change (%)
Paid Up Share Capital 469.6 469.6 - -
Other Equity 900.4 1,191.2 (290.8) (24.4)
Total Equity 1,370.0 1,660.8 (290.8) (17.5)

Total Equity of the Company decreased during the year due to loss for the year.

b) Non-Current Financial Liabilities (? In Millions)

2020-21 2019-20 Change (?) Change (%)
Other Financial Liabilities 1,222.1 1,109.9 112.2 10.1

The Company did not have any debts on its books and thus continues to be a debt free company. The increase is because of accounting for lease liability on Right of Use Asset as per IND-AS 116

c) Current Liabilities and Provisions

2020-21 2019-20 Change (?) Change (%)
Current Liabilities and Provisions 733.6 725.4 8.2 1.1

Current Liabilities comprise of trade payables, payables for purchase of property, plant and equipments, provisions and other current liabilities.

d) Net Tangible and Intangible Assets ( In Millions)

2020-21 2019-20 Change (?) Change (%)
Tangible and Intangible Assets after Depreciation (Net) 550.0 562.3 (12.3) (2.2)
Capital Work-in Progress 290.3 331.2 (40.9) (12.3)
Total 840.3 893.5 (53.2) (6.0)

There was an overall decrease of 6% in the Net Tangible and Intangible Assets of the Company primarily due to depreciation being charged on the basis of Written down value method.

e) Non-Current Financial Assets ( In Millions)

2020-21 2019-20 Change (?) Change (%)
Investments 102.6 102.6 - -
Loans 230.2 204.7 25.5 12.5
Total 332.8 307.3 25.5 8.3

Investments include investment in Speciality Hospitality UK Limited and Speciality Hospitality US Inc respectively, Wholly Owned Subsidiaries of the Company. Loans and Other financial assets comprises of Security and other deposits given by the Company.

f) Other Non - Current Assets ( In Millions)

2020-21 2019-20 Change (?) Change (%)
Other non-current assets 190.7 264.8 (74.1) (28)

Other Non-Current assets comprises of capital and normal advances to vendors, prepaid expenses and deferred rent, advance tax (net) and balances with government authorities paid under protest. The reduction is because of refunds received from Income Tax Authorities and reduction is the advances.

g) Current Assets ( In Millions)

2020-21 2019-20 Change (?) Change (%)
Inventories 58.1 73.8 (15.7) (21.3)
Financial assets
- Investments 645.4 614.3 31.1 5.1
- Trade Receivables 31.7 23.1 8.6 37.2
- Cash and Cash equivalents 71.1 14.4 56.7 393.8
- Bank balances other than cash above 0.9 0.8 0.1 12.5
- loans 95.7 204.2 (108.5) (53.1)
- other financial assets 7.9 22.8 (14.9) (65.4)
other current assets 89.0 79.0 10.0 12.7
Total 999.8 1,032.4 (32.6) (3.2)

Significant changes in key financial ratios

The details of significant change of 25% or more as compared to the immediately previous financial year in key financial ratios, along with detailed explanations therefor is as under:

Key Ratios March 31, 2021 March 31, 2020 Change % Due to
Debtors Turnover (times) 47.41 154.89 (69.4) Lower revenues because of Pandemic
Inventory Turnover (times) 25.84 48.50 (46.7) Reduced turnover with steady inventory of liquor
Operating Profit Margin (%) 9.28 18.21 (49.0) Lower Revenues with impact of Operating Leverage
Net Profit Margin (%) (17.74) (10.38) (70.9)
Return on Net Worth (%) (21.29) (22.98) 7.4 Lower profitability because of Pandemic with reduction in Networth because of losses

Consolidated Financial performance for the year ended March 31, 2021

The Consolidated Financial Statements comprise the Company and its Joint Venture and WOS company prepared in accordance with Ind AS as applicable to your Company. The Consolidated Statements include the financial position of joint venture by applying equity method of accounting and WOS by proportionate consolidation method of accounting. The following table sets forth the Consolidated Financial results for the year ended March 31, 2021.

Particulars March 31, 2021 March 31, 2020 Change (?) Change (%)
Revenue from operations 1,501.4 3,577.8 (2,076.4) (58.0)
Other Income 168.0 104.4 63.6 60.9
Total Income 1,669.4 3,682.2 (2,012.8) (54.7)
Cost of materials consumed 452.0 1,134.8 (682.8) (60.2)
Employee benefit expense 338.3 820.2 (481.9) (58.8)
Other expenses 725.6 1,054.8 (329.2) (31.2)
Earnings before Interest, Depreciation, Amortization and Tax 153.5 672.4 (518.9) (77.2)
Finance Costs 165.0 211.5 (46.5) (22.0)
Depreciation /Amortization 322.4 574.9 (252.5) (43.9)
Loss before share of loss in Joint venture, exceptional item and Tax (333.9) (114) (219.9) (192.9)
Share of Loss in Joint Venture Company (1.4) (1.3) (0.1) (7.7)
Exceptional Item 43.6 (273.8) 317.1 115.8
Loss before tax for the year (291.7) (389.1) 97.4 (25.0)
Less: Taxes Expenses / (credit)
Current Tax - - - -
Deferred Tax - - - -
Short provision for tax relating to prior years 1.7 (9.0) 10.7 118.9
Loss for the year (293.4) (380.1) 86.7 22.8
Total Other Comprehensive (Loss)/Income 8.6 (4.2) 12.8 304.8
Total Comprehensive loss for the period (284.8) (384.3) (99.5) (25.9)

Disclosure of accounting treatment in preparation of financial statements

The Company has followed prescribed Accounting Standards as laid down by the Institute of Chartered Accountants of India in preparation of its financial statements.


Covid -19 had its impact in the FY 2020-21 and the second wave thereafter had built in fear psychosis among the population. The silver lining is the pace of vaccination programme undertaken by the Government which will instill confidence of the people to once again move towards normalcy.

It is expected that the Indian economy is to grow by 8.3% and 7.5% in the FY 2021-22 and FY 2022-23 as per the estimate of the World Bank. This growth rate will be the highest in the world and is expected the business would get back to pre-covid levels.

Material developments in Human Resources

Your Company firmly believes in the strength of its most vital asset of over 2,700 strong workforce. To maintain its competitive edge in a highly dynamic industry, your Company recognizes the importance of having a work force which is consumer-focused and performance- driven. In keeping with this, a number of policies and initiatives have been drawn up to ensure a healthy balance between business needs and individual aspirations. The company ensured for the well-being of the entire workforce by counseling and videos to ensure safety protocols. To enhance immunity of all individual various vitamin tablets were given to all.

Cautionary Statement

This Annual Report and the Management Discussion and Analysis report contains certain "forward-looking statements". These forwardlooking statements can generally be identified by words or phrases such as "aim", "anticipate", "believe", "expect", "estimate", "intend", "objective", "plan", "project", "will", "will continue", "will pursue", "seek to" or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans, prospects or goals are also forward-looking statements. Forward-looking statements reflect the current views of our Company as of the date of this Management Discussion and Analysis report and are not a guarantee of future performance. These statements are based on the managements beliefs and assumptions, which is in turn and based on currently available information. Although we believe the assumptions upon which these forward-looking statements are based to be reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect.