Speciality Restaurants Ltd Management Discussions.

Economic Overview

Currently, India is the seventh largest economy in the world which continues to be one of the fastest growing and 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. Added to this Governments promise in ramping up infrastructure and ammending poilicies to favour business and stimulate growth is expected to growth in eonomy and in turn improved consumer confidence. 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 changing economic and emographic profile, secular trends of young population, growing affluence, rising urbanisation, increase in disposable income, increased internet penetration, growth of organised retail and burgeoning digital connectivity, technological innovations, increased focus on health and wellness are driving consumption.

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

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

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. The total Indian F&B service market (organised and unorganised) is estimated at 4,23,865 crore in 2018-19 and projected to grow at compounded annual growth rate (CAGR) of 9% per annum and is expected to reach 5,99,782 crore by 2022-23. The organised segment with market share of 35% is estimated at 1,48,353 crore in 2018-19 and is projected to grow at a CAGR of 15% to reach 2,57,907 crore by 2022-33. (Source: NRAI India Food Services Report 2019)

India has one of the highest millennial population aged between 18 to 35 years, which happens to be tech-savvy, independent, career driven individuals with global exposure possessing higher spending capacity. Today, almost one-third of the population is below 25 years and almost half of the population is below 35 years. While this means that consumer demand will keep growing in the future, thereby propelling Indias GDP via internal consumption, it also means that the types of products, services and experiences will undergo a big change to keep pace with the outlook of this young population.

The restaurant sector continues to contribute highest to manpower requirement in the hospitality sector and also provides impetus to other 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 a domestic consumption driven with high growth potential.

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

Industry Trends

Consumers Eating Out Behaviour

Eating out on weekdays is slowly 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 that goes far beyond presentation, unique food concept 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 continuing to shape the Indian food service sector. Social media presence for restaurants also defines how popular they are. Social media accessible through smart devices is an integral part of the young populations 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 Food Services 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 by food discovery or restaurant search players on just a few clicks away.

Table Reservation: Fine dine restaurants are offering table reservation service to their clients to manage demand more efficiently to improve on sourcing & staffing. It is beneficial to a customer as reservation guarantee ones table at the time and place he has planned and likely to receive better 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 to order food from any restaurant of their choice and are able to save time and enjoy restaurant food at the same time.

Market Segments

The market segment of the organised food service industry is dominated by Casual Dining Restaurants with 55% market share followed by Quick Service Restaurants at 20% and Pub, Club & Bar at 12%, while Cafe chains at 7%, Full Service Restaurants (Premium Casual Dining Restaurants and Fine Dining Restaurants) at 2% and Others (Frozen desserts and ice-creams etc.) at 3% forms 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 willing to experiment 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.

Emerging retail formats

One of the most popular and most visited retail formats is the mall providing everything that a person wants to buy, all under one roof from clothes, accessories and cinemas to dedicated food courts including fine, casual / fun casual restaurants offer a controlled operating environment atmosphere and provide parking. Other retail avenues are airports and amusement parks which drive consumers towards food services.

Dine-In v/s Take-away/Delivery

The delivery segment is growing steadily and restaurants are providing option to the consumer to order food.

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 reastaurants. 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 turn around 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.

International Opportunities

Theres global demand for Indian cuisine as its popularity caters to the diaspora, Indian restaurant chains are leveraging that with financial and management bandwidth to invest and harness this opportunity.

Many Indian restaurant operators had entered the global market with traditional and exclusive Indian cuisines due to attractive growth options, 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 and medical institutions. In particular, shopping malls are becoming a customary place for congregation and customer spending in shopping malls is increasing. Shopping malls tend to favour efficient formats such as kiosks and food courts, which are most suitable for fast food restaurants and casual dining full-service restaurants will likely remain standalone as mall developers are expected to encourage kiosks and food courts that house multiple establishments.

Opportunities to the Company are -

• Incorporate millennial centric brand.

• 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 Cloud Kichen/ Commissary and also dark Kitchens from existing kitchens at own outlets

• 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 innovate and remain competitive. 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.

The challenges to the Companys prospects largely depends on economic factors such as changes in regulatory environment i.e. food inflation, removal of input tax credit under GST, licensing and market factors such as change in taste and preferences of consumers, 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 and culture to our companys purpose is still the key to engaging with techno savvy customers. Competitive Advantage

Your Company continues to enjoy top of mind position in the Fine Dining and Casual Dining Industry and now even making a mark in the section of Pubs & Bars. The key to this has been the continuous and well-paced focus on innovation, building on existing strengths and pragmatic expansions. Food served at our restaurants and service is the biggest competitive advantage we have.

During the financial year 2018-19, the Company has opened five (5) restaurants of which two (2) are Company Owned Company Operated (COCO) and three (3) are Franchise Owned Company Operated (FOCO) and four (4) confectionaries. The Company closed financial year 2018-19 with 104 restaurants (including 24 franchisees) and 24 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 arresting the fall of the previous 2/3 years.

Asia Kitchen by Mainland China was created as a brand refresh with a much less uninhibitated space to attarct a 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 created a position for itself.

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 truly recognised as global cuisine.

POH, (Progressive Oriental House) was launched as a new boutique Oriental restaurant serving modern Pan Asian Market cuisine in India. The restaurant is targeted towards the globally exposed creme de la creme and HNIs, looking for newer flavours and experience. Unfortunately after a massive accident at Kamal Mills the location in itself has posed a challenge for all operators and your company is also planning to relocate it at a suitable destination since it has already been acknowledged as one of the finest and classiet in the city.

Gong, sacred chinese gongs are inscribed with the Mandarin chinese characters called Tai Loi, which means, happiness has arrived. GONG Modern Asian takes you to a new level of happiness with its high energy ambience that is a contemporary take on traditional Japanese temple architecture and diverse Asian flavours that are prepared using western cooking techniques and presentations to take you journey through the mysterious culinary traditions of the Far-East.

Sigree Global Grill is a core brand serving grilled flavours from Mediterranean, Oriental, Spanish, Mexican and Indian cuisine. It has an innovative format with live grills on each table.

Hoppipola which was launched to attract younger generation has seen one more outlet opened during the year. It is an All Day Bar serving finger food, bar nibbles and innovative mocktails. Its target market is those of young-at-heart.

Cafe Mezzuna which offers European food extends the cuisines and makes the brand portfolio well rounded. It serves dishes with Mediterranean, Moroccan, Spanish, French and Italian flavours alongwith a complimenting bar menu.

Sweet Bengal is a chain of confectionaries serving traditional Bengali sweets and snacks created with pure cows milk by "Karigars" from West Bengal.

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.

The Haka menu features modern Chinese cuisine with small dishes including dim sum and other snacks typically found in modern Chinese casual dinners in Hong Kong and Shanghai city streets. The contemporary ambience of each Haka restaurant is created by red walls and modern impressionists artwork. The design and construction emphasizes efficiency and functionality in layout.

Zoodles is a Quick Service Restaurant providing tossed, stirred, grilled and wok fried delicacies. Your Company is proceeding cautiously with a Hub and Spokes model to ensure efficient operations without compromise on quality and service.

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 and any sudden unaticipated change in regulatory framework for the industry.

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 are being 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. Mainland China is now being positioned as Asia Kitchen by Mainland China. Here, the Company has included Pan Asian dishes in addition to the traditional fare of Chinese cuisine. Sigree Global Grill is being positioned as another flagship 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, 2019

a) Total Revenue

2018-2019 2017-2018 Change (द) Change (%)
Revenue From Operations 3,463.6 2,967.9 495.7 16.7
Other Income 94.6 79.0 15.6 19.7
Total 3,558.2 3,046.9 511.3 16.8

Total Income which comprises of Revenues from Operations and Other Income registered an increase of 16.8% for the year. The Increase in revenue operations was mainly due to the same store sales growth of 12.5% and new units launched during the year. 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

2018-19 2017-18 Change (द) Change (%)
Cost of Material Consumed 1,089.1 953.4 135.7 14.2

Cost of Materials consumed for the year has increased by 14.2% in line with increase in revenues as compared to the previous year.

c) Employee Benefit Expenses (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Employee Benefit Expenses 805.5 764.6 40.9 5.3

Employee Benefit Expenses comprises salary, bonus, allowances, Staff welfare expenses and Companys contribution to Provident Fund and Gratuity. There is an overall 5.3% increase in Employee Benefit expenses during the year under review as compared to previous year due to launch of new restaurants during the year 2018-19.

d) Finance Costs (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Interest 0 0.1 (0.1) (100)

The interest cost on vehicle loan has decreased by 100% due to repayment of vehicle loans. There was no Long-term/Short-term debt raised during the year.

e) Depreciation and amortisation expense (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Depreciation and amortisation Expense 287.1 296.6 (9.5) (3.2)

The charge for depreciation on Property, Plant & Equipment and Intangible assets was reduced for the year under review as compared to last year on account of Written down value method followed for charging depreciation.

f) Other Expenses (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Other Expenses 1392.7 1234.4 158.3 12.8

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 increase in other expenses was mainly due to rent linked to revenue share and advertisement & marketing expenses.

g) Profitability (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Loss Before Tax (LBT) (53.3) (311.5) (258.2) (82.9)
Loss After Tax (Net Loss) (63.4) (534.1) (470.7) (88.1)

Upward trend of discretionary spend, same store sales growth being in positive territory, increase in footfalls during weekdays compared to previous year and reduction in breakeven period of new restaurants coupled with increase in revenues improved the margins during the financial year 2018-19. Restaurant sector has sought re-introduction of input tax credit from the government under the Goods and Service Tax which if accepted is expected to further reduce loss during the financial year 2019-20.

Financial Position

a) Equity (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Paid Up Share Capital 469.6 469.6



Other Equity 1,751.1 1,821.1 (70) (3.8)
Total Equity 2,220.7 2,290.7 (70) (31)

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

b) Non-Current Financial Liabilities (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Other Financial Liabilities 109.7 101.6 8.1 7.9

The Company did not have any debts on its books and thus continues to be a debt free company. The increase in non-current financial liabilities is due to receipt of security deposits by the Company.

c) Current Liabilities and Provisions (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Current Liabilities and Provisions 521.4 513.9 7.5 1.5

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

2018-19 2017-18 Change (द) Change (%)
Tangible and Intangible Assets after Depreciation (Net) 820.1 1,010.5 (190.4) (18.8)
Capital Work-in Progress 349.8 288.4 61.4 21.3
Total 1169.9 1298.9 (129.0) (9.9)

There was an overall decrease of 18.8% in the Net Tangible and Intangible Assets of the Company primarily due to depreciation being charged on the basis of Written down value method. There was an increase of 21.3% in Capital Work-in Progress due to new projects undertaken.

e) Non-Current Financial Assets (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Investments 89.2 0.2 89 100.0
Loans 13.8 13.0 0.8 6.1
Other financial Assets 304.2 276.1 28.1 10.2
Total 407.2 289.3 117.9 40.8

Investments include investment in Speciality Hospitality UK Limited, WOS of the Company and other marketable securities. Other financial assets comprises of Security and other deposits given by the Company.

f) Other Non - Current Assets (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Other non-current assets 241.8 263.4 (21.6) (8.2)

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. There was an overall decrease of 8.2% due to deferred rent.

g) Current Assets (द in Millions)
2018-19 2017-18 Change (द) Change (%)
Inventories 66.8 70.4 (3.6) (5.1)
Financial assets
- Investments 632.1 672.0 (39.9) (5.9)
- Trade Receivables 53.9 63.9 (10) (15.6)
- Cash and Cash equivalents 83.5 52.2 31.3 59.9
- Bank balances other than cash above 0.8 0.8 - -
- loans 4.4 6.2 (1.8) (29.0)
- other financial assets 67.5 72.1 (4.6) (6.4)
other current assets 123.9 117.0 6.9 5.9
Total 1,032.9 1,054.6 (21.7) (2.1)

The decrease in Investments (mutual funds) was due to deployment of funds for funding WOS. The increase in cash and cash equivalent was primarily due to internal accruals. Cash and Cash Equivalents decreased during the year due to parking of surplus cash temporarily in Mutual Funds/Bank and Fixed Deposits.

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, 2019 March 31, 2018 Change % Due to
Debtors Turnover (times) 58.78 52.26 12.47 Realisation of outstanding dues and increase in revenues.
Inventory Turnover (times) 51.84 42.13 23.04 Increase in sales has resulted into improvement in inventory turnover ratio.
Debt Equity Ratio (times) 0 0.01 (100) Repayment of borrowings.
Operating Profit Margin (%) 6.57 2.84 131.11 Improved business and optimisation of costs resulted in improved operating & net profit margins and consequently improved return on net worth.
Net Profit Margin (%) (1.78) (17.53) 89.33
Return on Net Worth (%) (2.86) (23.31) 87.75

Consolidated Financial performance for the year ended March 31, 2019

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, 2019.

(द in Millions)
Particulars March 31, 2019 March 31, 2018 Change (द) Change (%)
Revenue from operations 3,463.6 2,967.9 495.7 16.7
Other Income 94.6 79.0 15.6 19.7
Total Income 3,558.2 3,046.9 511.3 16.8
Cost of materials consumed 1089.1 953.4 135.7 14.2
Employee benefit expense 818.8 764.6 54.2 7.0
Other expenses 1,431.1 1242.3 188.8 15.2
Earnings before Interest, Depreciation, Amortization and Tax 219.3 86.6 132.7 153.2
Finance Costs


0.1 0.1 (100.0)
Depreciation /Amortization 287.1 296.6 (9.5) (3.2)
Loss before share of loss in Joint venture, exceptional item and tax (67.8) (210.1) (142.3) (67.7)
Share of Loss in Joint Venture Company (0.2) (19.2) (19) (99.0)
Exceptional Item (15.8) (15.8) (100.0)
Loss before tax for the year (68.0) (245.1) (177.1) (72.2)
Less: Taxes Expenses / (credit)
Current Tax 9.0


9.0 100.0
Deferred Tax


222.6 (222.6) (100.0)
Short provision for tax relating to prior years 1.1


1.1 100.0
Loss for the year (78.1) (467.7) 389.6 83.3
Total Other Comprehensive (Loss)/Income (5.3) 3.7 (9.0) (243.0)
Total Comprehensive loss for the period (834) (464.0) 380.6 82.0

The consolidated financial statements includes pre-operative expenses incurred by Speciality Hospitality UK Limited, WOS company of the Company, which is in the process of setting up restaurant at London, UK.

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.


GDP growth is expected to touch a respectable mark of 7.3% in 2020, up from 7.1% in the previous year and 7.5% in 2021, supported by the continued recovery of investment and robust consumption amid a more expansionary stance of monetary policy and some expected impetus from fiscal policy is expected to spur demand by improving the overall consumer sentiment in the financial year 2019-20. The Company expects demand to continue to remain buoyant and expects the disposable income in the hands of consumers to increase due to pick up in economic activity and various government initiatives in the areas of ease of doing business based on continued implementation of structural reforms and easing of infrastructure bottlenecks further opening of FDI, targeting inflation for monetary policy, smart cities campaign, urban development, encouraging start-ups and skill development etc.

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.