Speciality Restaurants Ltd Management Discussions.

Economic Overview

The Indian economy registered a growth of 4.2% in Financial Year (FY) 2019-20, much lower than the 6.1% in FY 2018-19 (Source: IMF). Wage stagnation, job losses, rising rural unemployment rates, stressed non-banking financial companies and decline in credit growth caused a sharp drop in domestic demand. On the supply side, excess idle production capacity and lower private investments further dragged down economic activity. The Government of India undertook initiatives such as liberalising sectors to attract foreign direct investments, upfront capital infusion in public sector banks to alleviate liquidity concerns and reducing corporate tax rates to revive private investments. The Government of India also announced a number of policy measures to boost investment, such as reduction in corporate tax rate from 30% to 22%, which was complemented by the easing of repo rates by RBI.

Indian food and beverage industry continues to offer opportunities for growth due to several factors such as changing consumer behaviour, exploring new cuisines, consumer discerning in their choices, trust in branded foods for assurance of quality, change in government regulations, changes in economic and demographic profile, growing affluence, rising urbanisation, higher disposable income, penetration of internet, growth of organised retail and burgeoning digital connectivity, technological innovations, increased focus on health, protein-rich fibre foods and wellness which are driving consumption.

This was a year of gradual revival for the restaurant sector. The Covid-19 pandemic since mid-March 2020 onwards has caused disruption in the industry and we anticipate mid to long term shifts in consumer behaviour.

Your Companys performance for the year 2019-20 needs to be analysed in the context of the aforesaid economic and operating environment. Food and Beverages Services Industry Overview

Food and Beverages services continues to remains one of the key segments of the Indian economy contributing to employment generation, skill development, growth in the allied industries, entrepreneurship and creating experiences.

India has one of the highest millennial population aged between 18 to 35 years whose food habits and tastes are very different unlike the earlier generations, they happen to be tech-savvy, independent, career driven individuals with global exposure and higher spending capacity.

The restaurant sector still attribute to the highest manpower requirement in the hospitality sector 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 interest from domestic as well as international investors as the sector is largely domestic consumption driven with high growth potential.

The Indian food services market continues to evolve from home grown, standalone, family run business ventures into corporatisation with chain of restaurants, international partnerships with multipolar and integrated business model. International chain of restaurants have already entered the Indian market leading to a surge with 35% share of organised sector in the Indian food service industry which is steadily rising.

Industry Trends

Food and Beverage Trends

• 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, dried-fruits and prunes and protein bars.

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

• Food presentation plays a bigger role.

Consumers Eating Out Behaviour

Consumer 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 it being on weekend. Eating out is not restricted to occasions such as business meetings, alternate to home cooking, looking to try new cuisines but has become an occasion in itself. Consumer is becoming increasingly conscious of eating food at high-quality outlets across socio-economic segments. The food service industry is blessed 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 creating new opportunities in the industry.

Eating out as an experience

Hospitality is a great dining experience when guests needs are anticipated and met with innovative presentation, unique food concepts and exceptional service.

Social Media / Digital Marketing

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 are continue to shape the Indian food service sector. Social media presence for restaurants also defines how popular they are. Social media accessible through smart phones

are an integral part of the young generations lifestyle. It has become an avenue for them to express their views and opinions, compare and evaluate choices and share feedback. Use of digital marketing in the restaurant space is the new trend in the food and restaurant segment in India to communicate offers, incentives, product information and promotions.

Focus on consumer engagement using technology

Technology has helped restaurant industry to focus on consumer engagement:

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 are offering table reservation service to their clients to manage demand more efficiently and improve on sourcing & staffing. It is beneficial to a customer as reservation guarantee ones table at the designated time and place with the likelyhood of a personalised service at the restaurant.

Online ordering: Technology has eased the process of customers having to travel to a restaurant for eating out. 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 leisure.

Market Segments

The market segment of the organised food service industry is dominated by Casual Dining Restaurants followed by Quick Service Restaurants and Pub, Club & Bar, while Cafe chains, Full Service Restaurants (Premium Casual Dining Restaurants and Fine Dining Restaurants) and Others (Frozen desserts and ice-creams etc.) constitute the rest.

Evolving Customer Preferences

The combination of rising incomes, increasing working population, ever expanding urbanization, internet penetration and changing consumer preferences towards eating out has evolved the lifestyle of todays progressive young Indians, who are willing to experiment different cuisines and alcoholic beverages.

Experimenting with Cuisines

Indian Consumers are experimenting with various authentic Indian regional as well as cuisines from other international regions. 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, European, African besides the popular Chinese, Thai and American fast foods over and above the Indian and regional cuisines. Emerging retail formats

One of the most popular and most visited retail formats is the Mall, offering everything that a consumer wants to buy, all under one roof, from clothes, accessories, salons and spas to cinemas, gaming zones, dedicated food courts including fine, casual / fun casual restaurants in a controlled operating environment and also comes with a dedicated parking space. Other retail avenues are airports and amusement parks which drive consumers towards food services.

Dine-in v/s Take-away/Deliveries

The delivery segment is growing steadily and restaurants are providing option to consumers for ordering food at home.

Cloud Kitchen

Cloud kitchen is emerging 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 the operation of a chain of restaurants and also cost beneficial. 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. They have a base kitchen that delivers raw materials, sauces and all ingredients in portions to multiple restauarants. 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.

Dark Kitchen

Dark kitchen, also known as virtual kitchen, is a fully-equipped commercial kitchen with no restaurant or even a takeaway counter which are dedicated to meet the requirements of online delivery services, facilitated by the third party delivery apps. These are basically delivery points.

International Opportunities

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.

Opportunities and Challenges

The success of our organisation depends on our ability to identify strengths & opportunities and leverage them while mitigating the risks that arise while conducting our business. The strength of our restaurants lie in what we do best viz., serving tasty food, offering quality service and providing decor that makes the fun of eating at our restaurants a memorable experience. 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.

Opportunities for the Company are -

• Millennial centric brands.

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

• Experimentation with new formats, themes and menus; interest through entrepreneurial ventures.

• Setting-up of Cloud Kichen/ Commissary and also Dark 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.

• Sweating of assets and extended hours at select locations to build operational leverage.

Your Companys success depends on the value and relevance of its brands and products to consumers and on our ability to ring 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 are dependent on creating innovative products that continue to meet the needs of consumers.

Challenges

The Companys prospects largely depends on economic factors such as changes in regulatory environment i.e. food inflation, 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. The COVID-19 pandemic has caused widespread disruption in the industry and we see long term shifts in consumer behaviour. The digital disruption can be seen as a 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.

Competitive Advantage

Your Company continues to be at the top in occupying the mind share of consumers in the Fine Dining and Casual Dining sector and now even gaining share in the pie for Pubs & Bars. The key to this has been continuous endeavour on improvement and building on existing strengths and pragmatic expansions. Food served at our restaurants and service is the biggest competitive advantage we have.

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

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 and increase in footfalls.

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.

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.

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.

Riyasat

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 Progressive Indian - Casual Dining award by Times food and night life and Best Indian by The Telegraph.

BARishh

A place that is vibrant and chic, with stunning decor, a splash of pop colours that spell youthful and comes a breath of fresh air... celebrate all things millennial with a touch of "ishh". BARishh — the newest brand from the house of Speciality Restaurants — is for all day, 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.

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 26 outlets it is the only chain serving authentic Bengali sweets and Bengali snacks in Mumbai. Buoyed by the tremendous success the Company has now started expanding and spreading its sweetness in its hometown - Kolkata with the opening of 2 outlets as of now.

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.

Zoodles is a Quick Service Restaurant providing tossed, stirred, grilled and wok fried delicacies.

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 unaticipated change in regulatory framework for the industry. COVID-19 Pandemic

The Financial Year 2020 ended with the Covid-19 pandemic disrupting the global economy and supply chains. The rampant spread of pandemic across borders and geographies, has severely impacted almost the whole world and triggered significant downside risks to the overall global economic outlook.

Fiscal FY2021 began with a lockdown, with almost no economic activity in India, which took strict measures to contain the spread and intensity of the pandemic. With an extended lockdown in Q1-F21, the impact on GDP is expected to be significant with the risk of negative growth for FY2021, an all-time low in many years.

While it is difficult to estimate the impact of COVID-19 on the business beyond Q1-FY21, the economy is expected to see demand constraints particularly for discretionary spends. These are primarily driven by stagnant or lower household incomes and uncertainty over employment and economic growth at large.

As the economy at large, adapts to operating and living in a post-COVID era, it is expected that there will be recovery in the second half of the fiscal, albeit slow. An important lever that will be critical to monitor will be the roll out of Government stimulus and pro-active policy measures to ‘reboot and ‘rebound the economy.

The Company has initiated various countermeasures to minimise any short-term impact and mitigate any long-term impact on the Company, including realigning the cost structures to the new activity levels post the lockdown. Also, Pre-Covid-19, there was a Company-wide initiative to optimise costs and conserve cash, which is expected to accrue benefits in the future.

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.

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.

Productivity

In order to improve the realization from each store or improvement on per square feet basis, the Company is working towards increase in service hours by keeping restaurants open between lunch and dinner at select locations, thereby enhancing sales and productivity. Competition

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, 2020

a) Total Revenue (? In Millions)

2019-20 2018-19 Change (?) Change (%)
Revenue From Operations 3,577.9 3,463.6 114.3 3.3
Other Income 99.6 94.6 5 5.3
Total 3,677.5 3,558.2 119.3 3.4

Total Income which comprises of Revenues from Operations and Other Income registered an increase of 3.4% for the year. The increase in revenue from operations was steady during the year despite headwinds in the economy and impact of Covid-19 pandemic in the month of March 2020. 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)
2019-20 2018-19 Change (?) Change (%)
Cost of Material Consumed 1,134.8 1,089.1 45.7 4.2

Cost of Materials consumed for the year has increased by 4.2% due to increase in revenues as compared to the previous year and inflationary increase in raw material prices.

c) Employee Benefit Expenses (? In Millions)

2019-20 2018-19 Change (?) Change (%)
Employee Benefit Expenses 820.2 805.5 14.7 1.8

Employee Benefit Expenses comprises salary, bonus, allowances, Staff welfare expenses and Companys contribution to Provident Fund, ESIC and Gratuity. The increase is due to addition of new units during the year.

d) Finance Costs

2019-20 2018-19 Change (?) Change (%)
Interest 211.5 0 211.5 100.0

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

2019-20 2018-19 Change (?) Change (%)
Depreciation and amortisation Expense 574.9 287.1 287.8 100.2

The charge for depreciation on Property, Plant & Equipment and Intangible assets was 202.5 million and Right of Use assets as per IND-AS 116 was 365.4 million (previous year nil).

f) Other Expenses

2019-20 2018-19 Change (?) Change (%)
Other Expenses 1051.0 1392.7 (341.7) (24.5)

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 reduction is due to entries related to IND-AS 116 on account of Right of Use assets for 365.4 million.

g) Profitability ( In Millions)

2019-20 2018-19 Change (?) Change (%)
Loss Before Tax (LBT) (116.8) (53.3) (63.5) 119.1
Loss After Tax (Net Loss) (381.6) (63.4) (318.2) 501.6

The Company has recognised impairment loss under the head exceptional item amounting to 254.4 million because of impairment testing as per IND-AS 116 of the assets as at 31st March, 2020. The performance during the month of March 2020 was also impacted because of Covid-19 pandemic resulting into country wide lockdown as restaurant operations were shut because of lockdown.

Financial Position a) Equity

2019-20 2018-19 Change (?) Change (%)
Paid Up Share Capital 469.6 469.6 - -
Other Equity 1,191.2 1,751.1 (560.0) (32.0)
Total Equity 1,660.8 2,220.7 (560.0) (25.2)

Total Equity of the Company decreased during the year due to loss for the year. b) Non-Current Financial Liabilities

2019-20 2018-19 Change (?) Change (%)
Other Financial Liabilities 1,109.9 109.7 1000.2 911.8

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 amounting to 1091.6 million.

c) Current Liabilities and Provisions ( In Millions)

2019-20 2018-19 Change (?) Change (%)
Current Liabilities and Provisions 725.4 521.4 204.0 39.1

Current Liabilities comprise of trade payables, payables for purchase of property, plant and equipments, provisions and other current liabilities. The increase is because of accounting for lease liability on Right of Use Asset as per IND-AS 116.

d) Net Tangible and Intangible Assets ( In Millions)

2019-20 2018-19 Change (?) Change (%)
Tangible and Intangible Assets after Depreciation (Net) 562.3 820.1 (257.8) (31.4)
Capital Work-in Progress 331.2 349.8 (18.6) (5.3)
Total 893.4 1169.9 (276.5) (23.6)

There was an overall decrease of 23.6% 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

2019-20 2018-19 Change (?) Change (%)
Investments 102.6 89.2 13.4 15.0
Loans 204.7 13.8 190.9 1383.3
Other financial Assets (2.0) 304.2 (306.2) 100.7
Total 305.3 407.2 (102.0) (25.0)

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

2019-20 2018-19 Change (?) Change (%)
Other non-current assets 264.8 241.8 23.0 9.5

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 increase is because of income tax deducted at source and capital advances.

g) Current Assets

2019-20 2018-19 Change (?) Change (%)
Inventories 73.8 66.8 7.0 10.5
Financial assets
- Investments 614.3 632.1 (17.8) (2.8)
- Trade Receivables 23.1 53.9 (30.8) (57.2)
- Cash and Cash equivalents 14.4 83.5 (69.1) (82.8)
- Bank balances other than cash above 0.8 0.8 - -
- loans 204.2 34.7 169.5 488.5
- other financial assets 22.8 37.2 (14.4) (38.7)
other current assets 79.0 123.9 (44.9) (36.2)
Total 1,032.4 1,032.9 (0.5) (0.1)

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, 2020 March 31, 2019 Change % Due to
Debtors Turnover (times) 154.89 58.78 163.51 Realisation of outstanding dues and normal increase in revenue
Inventory Turnover (times) 48.50 51.84 (6.43) Lower revenues of March 2020 because of pandemic
Operating Profit Margin (%) 18.21 6.57 177.13 Accounting entries on implementation of IND-AS 116 have impacted the margins.
Net Profit Margin (%) (10.38) (1.78) (483.15)
Return on Net Worth (%) (22.98) (2.86) (703.50) Reduction in Networth because of losses.

Consolidated Financial performance for the year ended March 31, 2020

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, 2020.

Particulars March 31, 2020 March 31, 2019 Change (?) Change (%)
Revenue from operations 3,577.9 3,463.6 114.3 3.3
Other Income 102.7 94.6 8.10 8.5
Total Income 3,680.6 3,558.2 122.4 3.4
Cost of materials consumed 1,134.8 1,089.1 45.7 4.2
Employee benefit expense 820.2 818.8 1.4 0.2
Impairment loss on financial assets 1.9 37.1 (35.2) (95.0)
Other expenses 1,051.3 1,393.9 (342.6) (24.6)
Earnings before Interest, Depreciation, Amortization and Tax 672.4 219.3 453.1 206.6
Less:
Finance Costs 211.4 - 211.4 100.0
Depreciation /Amortization 574.9 287.1 287.8 100.2
Loss before share of loss in Joint venture, exceptional item and Tax (113.9) (67.8) (46.1) (68.0)
Share of Loss in Joint Venture Company (1.3) (0.2) (1.1) (550.0)
Exceptional Item (273.8) - - 100.0
Loss before tax for the year (389.0) (68.0) (321) (472.1)
Less: Taxes Expenses / (credit)
Current Tax - 9.0 - -
Deferred Tax - - - -
Short provision for tax relating to prior years (9.0) 1.1
Loss for the year (380.0) (78.1) (301.9) (386.6)
Total Other Comprehensive (Loss)/Income (4.2) (5.3) (1.1) 20.7
Total Comprehensive loss for the period (384.2) (83.4) (300.7) (360.5)

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.

Outlook

Due to Covid-19 outbreak, India implemented one of the strictest nationwide lockdowns in the world early on, in order to keep the infection numbers under control. This has resulted in mass unemployment in the lower income segment and staff downsizing across sectors. The restriction on free movement of goods and people disrupted supply chains and nearly wiped out the demand for nonessential goods and services.

Economic recovery depends to a great extent on the pandemic being brought under control, containment measures being scaled back and trade and manufacturing activities being gradually restored without causing a second wave of contagion.

Amidst the Covid-19 crisis, Fitch Ratings lowered Indias economic growth estimate for FY 2020-21 to 0.8%, citing a fall in consumer spending and fixed investment and disruption in economic activities. However, it expects a sharp rebound in Indias growth to 6.7% in FY 2021-22.

The Company expects demand constraint to continue to remain and expects to pick up once the disposable income in the hands of consumers to increase due to pick up in economic activity once the lockdown is lifted and various government initiatives to boost the economy.

The Company with its set of brands in different cuisines, formats and segments is well placed to leverage the opportunity.

Material developments in Human Resources

Your Company firmly believes in the strength of its most vital asset of over 3200 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. Training of employees is carried out both by in-house and outside trainers at various locations to sharpen the skill set of the workforce, building capability and creating performance oriented focus to support business performance. 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.