Notes to Accounts of Speciality Restaurants Ltd.

Mar 31, 2025

2.13 Provisions and contingent liabilities

Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the
amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present
obligation at the Balance sheet date.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the
control of the Company or a present obligation that arises from past events where it is either not probable that an outflow
of resources will be required to settle or a reliable estimate of the amount cannot be made.

Contingent liabilities are disclosed in the financial statements as notes to accounts, unless possibility of an outflow of
resources embodying economic benefit is remote.

2.14 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders
by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the
Company''s earnings per share is the net profit or loss for the year after any attributable tax thereto for the year. The • ¹
weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for
events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of
equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings
per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares
outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

2.15 Employee Benefits

(a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the year in which the employees render the related service are recognized in respect of
employees'' services up to the end of the year and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet and •
are recognized in the Profit and Loss Account as an expense at the undiscounted amount on an accrual basis.

(b) Other long-term employee benefit obligations

(i) Defined contribution plan

Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the Company
has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does
not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the
Statement of Profit and Loss.

Employee''s State Insurance Scheme: Company''s contribution to defined contribution plans such as Group
Mediclaim Insurance Policy, Employees'' state insurance scheme, Labour welfare fund is made to the regulatory
authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution
Schemes as the Company does not carry any further obligations. Said contributions are recognized in the Profit
and Loss Account on an accrual basis.

(ii) Defined benefit plans

Gratuity: The Company provides for gratuity, a defined benefit plan (the ''Gratuity Plan”) covering eligible
employees in accordance with the Payment of Gratuity Act, 1972 through an independent professional entity.

The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective employee''s salary. The Company''s liability is
actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains
are recognized in the other comprehensive income in the year in which they arise.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated
future cash outflows by reference to market yields at the end of the reporting period on government bonds that have
terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation
and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in other comprehensive income. Changes in the present value
of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit
or loss as past service cost.

2.16 Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling
interests in the acquiree. Acquisition-related costs are recognised in the Statement of Profit and Loss as incurred.

At the acquisition date, the identifiable assets acquired, and the liabilities and contingent liabilities assumed are recognised
at their acquisition date fair values. However, certain assets and liabilities i.e., deferred tax assets or liabilities, assets
or liabilities related to employee benefit arrangements, liabilities or equity instruments related to share-based payment
arrangements and assets or disposal groups that are classified as held for sale, acquired or assumed in a business
combination are measured as per the applicable Ind AS. , *

Judgement is applied in determining the acquisition date and determining whether control is transferred from one party
to another. Control exists when the Company is exposed to or has rights to variable returns from its involvement with the
entity and has the ability to affect those returns through power over the entity. In assessing control, potential voting rights
are considered only if the rights are substantive.

At the acquisition date, goodwill on business combination is initially measured at cost, being the excess of the sum of the
consideration transferred, the amount recognised for any non-controlling interests in the acquiree, and the fair value of the
acquirer''s previously held equity interest in the acquiree (if any) over the net identifiable assets acquired and the liabilities
assumed.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is allocated to each of the Company''s cash-generating
units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree
are assigned to those units.

A cash generating unit to which goodwill has been allocated is tested for impairment annually as at reporting date. When
the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.

3 Material accounting judgments, estimates and assumptions

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future years.

A. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the year end date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company based its assumptions and estimates on parameters available
when the financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the control of the Company.
Such changes are reflected in the assumptions when they occur.

(a) Taxes

• Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be

• available against which the losses can be utilized. Significant management judgment is required to determine the

amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable
profits together with future tax planning strategies.

The Company neither have any taxable temporary difference nor any tax planning opportunities available that
could partly support the recognition of these losses as deferred tax assets. On this basis, the Company has
determined that it cannot recognize deferred tax assets on the tax losses carried forward.

(b) Defined benefit plans (gratuity benefits)

The cost of the defined benefit plans such as gratuity are determined using actuarial valuations. An actuarial
valuation involves making various assumptions that may differ from actual developments in the future. These
include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities
involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in
these assumptions. All assumptions are reviewed at each year end.

The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market
yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary
increase rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis.

(c) Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units
based on expected future cash flows and uses an interest rate to discount them.

(d) Going concern assumption

The books of accounts have been prepared on a going concern basis. Management believes that the Company
will be able to continue as a ''going concern'' in the foreseeable future from the date of this financial statement
based on the following:

i) Expected future operating cash flows based on business projections, and

ii) Available credit facilities with its bankers.

(e) Contingencies

In the normal course of business, contingent liabilities may arise from litigations and other claims against the
Company. There are certain obligations which management have concluded based on all available facts and
circumstances that are not probable of payment and such obligations are treated as contingent liabilities and
are disclosed in the notes (unless the probability of payment is remote) but are not provided for in the financial
statements.

(f) Impairment of trade receivables

The Company estimates the probability of collection of accounts receivable by analyzing historical payment
patterns, customer status, customer credit-worthiness and current economic trends. If the financial condition of a
customer deteriorates, additional allowances may be required.

4 Recent Pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2025, MCA has not notified
any new standards or amendments to the existing standards applicable to the Company.

(v) On 02 February 2023, the Company had allotted 60,00,000 warrants convertible into Equity Shares, each convertible
! into one equity share of face value of INR 10/- each, on preferential basis, at an issue price of INR 212.05/- each

• amounting to INR 1,272.30 million. Application money of INR 53.02/- per warrant equivalent to 25% of the issue price
as warrant subscription money, amounting to INR 318.12 million was received by the Company and the balance 75%
of the issue price of INR 159.03/- per warrant, amounting to INR 954.18 million was to be received from the warrant
holders on or before 01 August 2024. During the warrant exercise period till 01 August 2024, an amount of INR 203.24
million as balance 75% of Warrant Exercise Price for 12,78,000 warrants was received for conversion on various dates,
accordingly 12,78,000 equity shares have been allotted by the Company. The application money of INR 53.02/- per
warrant for 47,22,000 warrants amounting INR 250.36 million is forfeited due to non-exercise of warrants within the 18
months from the date of allotment of warrants.

(vi) The company has not issued fully paid-up shares without payment being received in cash during the period of 5 years
immediately preceding the date of Balance Sheet.

(vii) The company has no shares reserved for issue under the Share based payment plan.

• (viii) The company has not bought back shares of any class during the period of five years immediately preceding the date

of Balance Sheet.

(b) Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at
least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility
(CSR) activities. The areas for CSR activities are as defined under the CSR Policy of the Company. A CSR committee
has been formed by the company as per the Act. The funds are utilized through the year on these activities which are
specified in Schedule VII of the Companies Act, 2013.

B Defined benefit plans - Gratuity payable to employees

The gratuity scheme is a defined benefit plan that provides for a lump sum payment to the employees on exit either
by way of retirement, death, disability or voluntary withdrawal. Under the scheme, the employees are entitled to a
lump sum amount aggregating to 15 days final basic salary for each year of completed service payable at the time of
retirement/resignation, provided the employee has completed 5 years of continuous service. The defined benefit plan
is administered by a third-party insurer. The third-party insurer is responsible for the investment policy with regards to
the assets of the plan. The employees of the Company are assumed to retire at the age of 58 years.

(i) The plan exposes the Company to actuarial risks such as: investment risk, interest rate risk and salary risk.

Investment risk: The return on investments will impact the position of the defined benefit plan liability. If the return falls,
net benefit obligation will increase the value of the liability.

Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. All other
aspects remaining same, if bond yields fall, the defined benefit obligation will increase the value of the liability.

Salary Inflation risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries
of plan participants. As such, an increase in the salary in higher proportion of the plan participants will increase the
plan''s liability.

h) Sensitivity analysis

Method used for sensitivity analysis:

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes
in demographic assumptions. The key actuarial assumptions to which the defined benefit obligation results are
particularly sensitive to are the discount rate and the future salary escalation rate. The following table summarizes
the impact on the reported defined benefit obligation at the end of the reporting period arising on account of an
increase or decrease in the reported assumption by 50 basis points.

36 Leases

Leases where Company is a lessee

The company has entered into certain arrangements in the form of leases for business of operating casual dining restaurants
outlets and confectionary outlets. As per terms, the company''s obligation could be fixed or purely variable or variable with
minimum guarantee payment for use of property.

The Company''s leases mainly comprise of stores and buildings. The Company leases buildings for the purpose of business
operations.

Set out below are the carrying amounts of lease liabilities and the movements during the year:

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to
meet the obligations related to lease liabilities as and when they fall due.

The Company has applied a single discount rate to a portfolio of leases of a similar assets in similar economic environment
with similar end date.

The Company has several lease contracts that include extension and termination options. These options are negotiated
by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business
needs. Management exercises significant judgement in determining whether these extension and termination options are
reasonably certain to be exercised.

37 Related Party Disclosures:

In accordance with the requirements of Ind AS - 24 ''Related Party Disclosures'', names of the related parties, related party
relationship, transactions and outstanding balances including commitments where control exits and with whom transactions
have taken place during reported periods are:

(i) Post retirement benefits is determined by the Group as a whole for all employees put together and hence disclosures
of post employment benefits of Key management personnel is not separately available.

(ii) All the related party transactions entered during the year were in ordinary course of business and are on arm''s
length price.

38 Financial Instruments
38.1 Capital management

The Company''s objective for capital management is to maximise shareholder value, safeguard business continuity and
support the growth of the Company. The Company determines the capital requirement based on annual operating plans and
long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows
generated. The Company is not subject to any externally imposed capital requirements.

38.2Fair value hierarchy

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

• The above Investments excludes investments in subsidiaries and joint venture amounting to INR 116.56 million (31
March 2024: INR 116.56 million).

• The carrying amount of cash and cash equivalents, trade receivables, loans, bank balance other than covered in cash
and cash equivalents, other financial assets (except security deposits), trade payables and other financial liabilities
approximate the fair value due to short term nature of these financial instruments.

• The amortized cost using effective interest rate (EIR) of other financial assets consisting of security deposits and lease
liabilities are not significantly different from the carrying amount.

• Financial assets that are neither past due nor impaired include cash and cash equivalents, trade receivables, loans,
bank balance other than covered in cash and cash equivalents, other financial assets.

38.3 Financial risk management objectives and policies

The Company''s principal financial liabilities, comprise trade and other payables. The main purpose of these financial
liabilities is to support its operations. The Company''s principal financial assets include trade and other receivables and cash
and short-term deposits that are derived directly from its operations. Current investments are optimal deployment of excess
funds.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign
currency risk). The Company''s Board of Directors reviews and sets out policies for managing these risks and monitors
suitable actions taken by management to minimize potential adverse effects of such risks on the Company''s operational and
financial performance.

(a) Liquidity Risk

_• "The Company''s principal sources of liquidity are cash and cash equivalents, cash flow generated from operations and

by churning of current investments. The Company does not have any borrowing outstanding as at the year end. The
Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is
perceived.

The following tables detail the Company''s remaining contractual maturity for its financial liabilities with agreed repayment
periods. The table has been drawn up based on the undiscounted cash flows of the financial liabilities based on the
earliest date on which the Company can be required to pay:

(b) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. Credit risk arises principally from the Company''s receivables from deposits with
landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial
institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of
managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of
the counterparties, taking into account their financial position, past experience and other factors.

The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions
and retaining sufficient balances in bank accounts required to meet a month''s operational costs. The Management
reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus
cash in bank accounts. The Company does a proper financial and credibility check on the landlords before taking any
property on lease and hasn''t had a single instance of non-refund of security deposit on vacating the leased property.
The Company also in some cases ensure that the notice period rentals are adjusted against the security deposits and
only differential, if any, is paid out thereby further mitigating the non-realization risk. The Company does not foresee any
credit risks on deposits with regulatory authorities.

Trade and other receivables: The Company''s business is predominantly through cash and credit card collections. The
credit risk on credit card collections is minimal, since they are primarily owned by customers'' card issuing banks. The
Company has adopted a policy of dealing with only credit worthy counterparties in case of franchisees and the credit
risk exposure for them is managed by the Company by credit worthiness checks. The Company also carries credit
risk on lease deposits with landlords for restaurant properties taken on leases, for which agreements are signed and
property possessions timely taken for restaurant operations. The risk relating to refunds after vacating or restaurant
shut down is minimal since the possession of the premises is retained till the refund is collected or there are liabilities
outstanding against which the asset can be adjusted.

Financial instruments and cash deposits: The Company''s treasury, in accordance with the board approved policy,
maintains its cash and cash equivalents, deposits and investment in mutual funds and enters into derivative financial
instruments - with banks, financial and other institutions, having good reputation and past track record, and high credit
rating. Similarly, counter-parties of the Company''s other receivables carry either no or very minimal credit risk. Further,
the Company reviews the credit-worthiness of the counter-parties (on the basis of its ratings, credit spreads and
financial strength) of all the above assets on an ongoing basis, and if required, takes necessary mitigation measures.

(c) Market Risk

The Company is exposed to market risks associated with foreign currency rates and commodity prices.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate
fluctuations arise. The exchange gains or losses are recognised in Statement of Profit or Loss on the date of settlement
and restatement at quarterly intervals.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the
end of the reporting period are as follows.

required by the Company, the Company believes that there are sufficient other quality suppliers in the marketplace such
that the Company sources of supply can be replaced as necessary.

Investments

The Company invests its surplus funds in various mutual funds (debt fund, equity fund, liquid schemes and income
funds etc.), corporate bonds and Infrastructure Investment trust (InvIT). In order to manage its price risk arising from
investments, the Company diversifies its portfolio in accordance with the limits set by the risk management policies. 1%
appreciation / depreciation of the respective financial instruments held by Company would result in increase / decrease
in the company''s profit before taxes by approximately INR 16.08 million for the year ended 31 March 2025 (31 March
2024: INR 16.97 million).

39 Segment reporting

• The principal business of the Company is operating casual dining restaurants outlets and confectionary outlets. All other
activities of the Company revolve around its principal business. The Chairman & Managing Director (CMD) of the Company,
has been identified as the Chief Operating Decision Maker (CODM). The CODM evaluates the Company''s performance,
allocates resources based on analysis of the various performance indicators of the Company as a single unit. Therefore,
the management has concluded that there is only one operating reportable segment as defined by Ind AS 108 - Operating
Segments. The Company predominantly operates in one geography, i.e., India.

43 Other disclosures

a. •The Company does not have any Benami property, where any proceeding has been initiated or pending against the

company for holding any Benami property.

b. »The Management confirms that the Company is not declared a wilful defaulter (as defined by RBI Circular) by Any bank

or financial Institution or other lender.

c. «The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013

or section 560 of Companies Act, 1956.

d. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.

e. The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the
Companies (Restriction on number of Layers) Rules, 2017.

f. The Company does not have any undisclosed income which is not recorded in the books of account that has been
surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

g. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

h. The Company has not borrowed any funds. Hence, disclosure pertaining to end use and the filing of quarterly statements
with the banks is not applicable.

i. No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the
Companies Act, 2013.

j. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”)
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party
identified by or on behalf of the Company (Ultimate Beneficiaries).

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall
whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

44 The Board of Directors (“the Board”) of the Company at its meeting held on 20th October, 2022 has inter alia, subject to
requisite approvals/ consents, considered and approved the scheme of Demerger of Asset by and between Speciality
Restaurants Limited (the “Transferee Company” or “Company”) and the wholly owned subsidiary namely Speciality Hotels
India Private Limited (“Transferor Company”) under section 230 to 232 of the Companies Act, 2013 (“Scheme”). Appointed
date for demerger is 01-10-2022 and the asset has been classified as “Assets held for Sale”.

45 Business Combination

On 18 February 2025, the Company has taken over the business of ''Mainland China'' franchisee located at ''East Coast
Road, Palavakkam, Chennai'' from ''M/s Brydan Foods'' at a purchase consideration of INR 23.00 million on slump sale basis.

As per Ind AS 103 on Business Combination, purchase consideration has been allocated on a basis of the fair value of the
acquired assets and liabilities. The resulting differential has been accounted as goodwill. The financial statements include
the profit and loss statement of the said business for the period from 18 February 2025 to 31 March 2025.

• 46 Dividends

Dividends paid by the Company during the year ended 31 March 2025 include an amount of INR 1.00 (10%) per equity share
having face value of INR 10 each towards final dividend for the year ended 31 March 2024.

• On 12 May 2025, the Board of Directors of the Company have proposed a final dividend of INR 1.00 (10%) per equity share
having face value of INR 10 each in respect of the year ended 31 March 2025 subject to the approval of shareholders at the
Annual General Meeting. Dividends declared by the Company are based on profits available for distribution.

_a 47 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post- employment benefits
received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on
which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes
into effect and will record any related impact in the period the Code becomes effective.

48 Prior year comparatives are regrouped / reclassified wherever necessery to conform to current period presentation.

As per our report of even date attached For and on behalf of the Board of Directors

Speciality Restaurants Limited
CIN: L55101WB1999PLC090672

For Singhi & Co

Chartered Accountants Anjanmoy Chatterjee Ullal Ravindra Bhat

FRN: 302049E Chairman and Managing Director Director

DIN : 00200443 DIN : 00008425

Milind Agal Rajesh Kumar Mohta Avinash Kinhikar

Partner Executive Director - Finance Company Secretary

Membership No.: 123314 & Chief Financial Officer & Legal Head

Place: Mumbai Place: Mumbai

Date: 12 May, 2025 Date: 12 May, 2025

---

Mar 31, 2024

2.14 Provisions and contingent liabilities

Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Contingent liabilities are disclosed in the financial statements as notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.

2.15 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Company''s earnings per share is the net profit or loss for the year after any attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

2.16 Employee Benefits

(a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are recognized in respect of employees'' services up to the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet and are recognized in the Profit and Loss Account as an expense at the undiscounted amount on an accrual basis.

(b) Other long-term employee benefit obligations

(i) Defined contribution plan

Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

Employee''s State Insurance Scheme: Company''s contribution to defined contribution plans such as Group Mediclaim Insurance Policy, Employees'' state insurance scheme, Labour welfare fund is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations. Said contributions are recognized in the Profit and Loss Account on an accrual basis.

(ii) Defined benefit plans

Gratuity: The Company provides for gratuity, a defined benefit plan (the ''Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972 through an independent professional entity. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the other comprehensive income in the year in which they arise.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.

3 Material accounting judgments, estimates and assumptions

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future years.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the year end date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(a) Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

The Company neither have any has taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Company has determined that it cannot recognize deferred tax assets on the tax losses carried forward.

(b) Defined benefit plans (gratuity benefits)

The cost of the defined benefit plans such as gratuity are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each year end.

The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis.

(c) Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them.

(d) Going concern assumption

The books of accounts have been prepared on a going concern basis. Management believes that the Company will be able to continue as a ''going concern'' in the foreseeable future from the date of this financial statement based on the following:

i) Expected future operating cash flows based on business projections, and

ii) Available credit facilities with its bankers.

Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(e) Contingencies

In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. There are certain obligations which management have concluded based on all available facts and circumstances that are not probable of payment and such obligations are treated as contingent liabilities and disclosed in the notes (unless the probability of payment is remote) but are not provided for in the financial statements.

(f) Impairment of trade receivables

The Company estimates the probability of collection of accounts receivable by analyzing historical payment patterns, customer status, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.

4 Recent Pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

B Defined benefit plans - Gratuity payable to employees

The gratuity scheme is a defined benefit plan that provides for a lump sum payment to the employees on exit either by way of retirement, death, disability or voluntary withdrawal Under the scheme, the employees are entitled to a lump sum amount aggregating to 15 days final basic salary for each year of completed service payable at the time of retirement/resignation, provided the employee has completed 5 years of continuous service. The defined benefit plan is administered by a third-party insurer. The third-party insurer is responsible for the investment policy with regards to the assets of the plan. The employees of the Company are assumed to retire at the age of 58 years.

(i) The plan exposes the Company to actuarial risks such as: investment risk, interest rate risk and salary risk.

Investment risk: The return on investments will impact the position of the defined benefit plan liability. If the return falls, net benefit obligation will increase the value of the liability.

Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. All other aspects remaining same, if bond yields fall, the defined benefit obligation will increase the value of the liability.

Salary Inflation risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary in higher proportion of the plan participants will increase the plan''s liability.

h) Sensitivity analysis

Method used for sensitivity analysis:

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the defined benefit obligation results are particularly sensitive to are the discount rate and the future salary escalation rate. The following table summarizes the impact on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.

(i) These balances had been fully provided for in preceeding previous years.

(ii) Post retirement benefits is determined by the Company as a whole for all employees put together and hence disclosures of post employment benefits of Key management personnel is not separately available.

(iii) All the related party transactions entered during the year were in ordinary course of business and are on arm''s length price.

38 Financial Instruments

38.1 Capital management

The Group''s objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Group. The Group determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated. The Group is not subject to any externally imposed capital requirements.

38.2 Fair value hierarchy

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

• The above Investments excludes investments in subsidiaries and joint venture amounting to INR 116.56 million (31 March 2023: INR 116.56 million).

• The carrying amount of cash and cash equivalents, trade receivables, loans, bank balance other than covered in cash and cash equivalents, other financial assets (except security deposits), trade payables and other financial liabilities approximate the fair value due to short term nature of these financial instruments.

• The amortized cost using effective interest rate (EIR) of other financial assets consisting of security deposits and lease liabilities are not significantly different from the carrying amount.

• Financial assets that are neither past due nor impaired include cash and cash equivalents, trade receivables, loans, bank balance other than covered in cash and cash equivalents, other financial assets.

• The cost of investment in government securities included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

38.3Financial risk management objectives and policies

The Group''s principal financial liabilities, comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Group''s principal financial assets include trade and other receivables and cash and short-term deposits that are derived directly from its operations. Current investments are optimal deployment of excess funds.

The Group''s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency risk). The Group''s Board of Directors reviews and sets out policies for managing these risks and monitors suitable actions taken by management to minimize potential adverse effects of such risks on the Group''s operational and financial performance.

(a) Liquidity Risk

The Group''s principal sources of liquidity are cash and cash equivalents, cash flow generated from operations and by churningof current investments. The Group does not have any borrowing outstanding as at the year end. The Group believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

(b) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Company''s receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a month''s operational costs. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does a proper financial and credibility check on the landlords before taking any property on lease and hasn''t had a single instance of non-refund of security deposit on vacating the leased property. The Company also in some cases ensure that the notice period rentals are adjusted against the security deposits and only differential, if any, is paid out thereby further mitigating the non-realization risk. The Company does not foresee any credit risks on deposits with regulatory authorities.

Trade and other receivables: The Company''s business is predominantly through cash and credit card collections. The credit risk on credit card collections is minimal, since they are primarily owned by customers'' card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of franchisees and the credit risk exposure for them is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for restaurant properties taken on leases, for which agreements are signed and property possessions timely taken for restaurant operations. The risk relating to refunds after vacating or restaurant shut down is minimal since the possession of the premises is retained till the refund is collected or there are liabilities outstanding against which the asset can be adjusted.

Financial instruments and cash deposits: The Company''s treasury, in accordance with the board approved policy, maintains its cash and cash equivalents, deposits and investment in mutual funds and enters into derivative financial instruments - with banks, financial and other institutions, having good reputation and past track record, and high credit rating. Similarly, counter-parties of the Company''s other receivables carry either no or very minimal credit risk. Further, the Company reviews the credit-worthiness of the counter-parties (on the basis of its ratings, credit spreads and financial strength) of all the above assets on an ongoing basis, and if required, takes necessary mitigation measures.

(c) Market Risk

The Company is exposed to market risks associated with foreign currency rates and commodity prices.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate fluctuations arise. The exchange gains or losses are recognised in Statement of Profit or Loss on the date of settlement and restatement at quarterly intervals.

Note: As a result, if the value of the Indian Rupee appreciates relative to these foreign currencies, the Company''s revenues measured in Indian Rupees will decrease. The exchange rate between the Indian Rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lesser quantum of revenue and expenses from foreign currencies, the Company is not significantly exposed to foreign currency risk.

Foreign Currency Sensitivity:

5% appreciation / depreciation of the respective functional currency of the Company with respect to various foreign currencies would result in increase / decrease in the company''s profit before taxes by approximately INR 0.18 million for the year ended 31 March 2024 (31 March 2023: INR 0.65 million). The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material.

Price Risk :

Commodity

The Company purchases certain products, including meat, cheese, vegetables and other commodities which are subject to price volatility that is caused by weather, market conditions and other factors that are not considered predictable or within the Company''s control. The Company''s supplies and raw materials are available from several sources, and not dependent upon any single source for these items. If any existing suppliers fail or are unable to deliver in quantities required by the Company, the Company believes that there are sufficient other quality suppliers in the marketplace such that the Company sources of supply can be replaced as necessary.

Investments

The Company invests its surplus funds in various mutual funds (debt fund, equity fund, liquid schemes and income funds etc.), corporate bonds and Infrastructure Investment trust (InvIT). In order to manage its price risk arising from investments, the Company diversifies its portfolio in accordance with the limits set by the risk management policies. 1% appreciation / depreciation of the respective financial instruments held by Company would result in increase / decrease in the company''s profit before taxes by approximately INR 16.97 million for the year ended 31 March 2024 (31 March 2023: INR 16.46 million).

39 Segment reporting

The principal business of the Group is operating casual dining restaurants outlets and confectionary outlets. All other activities of the Group revolve around its principal business. The Chairman & Managing Director (CMD) of the Company, has been identified as the Chief Operating Decision Maker (CODM). The CODM evaluates the Group''s performance, allocates resources based on analysis of the various performance indicators of the Group as a single unit. Therefore, the management has concluded that there is only one operating reportable segment as defined by Ind AS 108 - Operating Segments. The Group predominantly operates in one geography, i.e., India.

43 Other disclosures

a. The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

b. The Management confirms that the Company is not declared a wilful defaulter (as defined by RBI Circular) by Any bank or financial Institution or other lender.

c. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

d. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

e. The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

f. The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

g. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

h. The Company has not borrowed any funds. Hence, disclosure pertaining to end use and the filing of quarterly statements with the banks is not applicable.

i. No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

j. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

44 The Board of Directors (“the Board”) of the Company at its meeting held on 20th October, 2022 has inter alia, subject to requisite approvals/ consents, considered and approved the scheme of Demerger of Asset by and between Speciality Restaurants Limited (the “Transferee Company” or “Company”) and the wholly owned subsidiary namely Speciality Hotels India Private Limited (“Transferor Company”) under section 230 to 232 of the Companies Act, 2013 (“Scheme”). Appointed date for demerger is 01-10-2022 and the asset has been classified as “Assets held for Sale”.

45 Dividends

Dividends paid by the Company during the year ended 31 March 2024 include an amount of INR 2.50 (25%) per equity share having face value of INR 10 each towards final dividend for the year ended 31 March 2023.

On 14 May 2024, the Board of Directors of the Company have proposed a final dividend of INR 1.00 (10%) per equity share having face value of INR 10 each in respect of the year ended 31 March 2024 subject to the approval of shareholders at the Annual General Meeting. Dividends declared by the Company are based on profits available for distribution.

46 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post- employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

47 Prior year comparatives are regrouped / reclassified whereever necessery to conform to current period presentation.

As per our report of even date attached For and on behalf of the Board of Directors

Speciality Restaurants Limited CIN: L55101WB1999PLC090672

For Singhi & Co

Chartered Accountants Anjanmoy Chatterjee Ullal Ravindra Bhat

FRN: 302049E Chairman and Managing Director Director

DIN : 00200443 DIN : 00008425

Milind Agal Rajesh Kumar Mohta Avinash Kinhikar

Partner Executive Director - Finance Company Secretary

Membership No.: 123314 & Chief Financial Officer & Legal Head

Place: Mumbai Place: Mumbai

Date: 14 May, 2024 Date: 14 May, 2024

---

Mar 31, 2023

p) Provisions and contingencies:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

In the normal course of business, contingent liabilities may arise from litigations and other claims against the company. There are certain obligations which management have concluded based on all available facts and circumstances that are not probable of payment and such obligations are treated as contingent liabilities and disclosed in the notes (unless the probability of payment is remote) but are not provided for in the financial statements.

A contingent asset is neither recognised nor disclosed in the financial statements.

q) Employee share based payments:

Equity settled share based payments to employees are measured at the fair value of the equity instruments at the grant date. The fair value determined at the grant date of Equity settled share based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the Equity settled employee benefits reserve.

r) Financial instruments:

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (FVTPL)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Statement of Profit or Loss.

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets

Classification of financial assets:

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated at fair value through profit or loss on initial recognition):

• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All other financial assets are subsequently measured at fair value.

Effective interest method:

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in Statement of Profit or Loss and is included in the "Other income" line item.

Financial assets at FVTPL:

Financial assets that do not meet the amortised cost criteria or Fair value through other comprehensive income (FVTOCI) criteria are measured at FVTPL. In addition, financial assets that meet the amortised cost criteria or the FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in Statement of Profit or Loss. The net gain or loss recognized in Statement of Profit or Loss incorporates any dividend or interest earned on the financial asset and is included in the ''Other income'' line item. Dividend on financial assets at FVTPL is recognised when the Company''s right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.

Investment in Joint venture and subsidiaries:

Investment in joint venture and subsidiaries is carried at cost in the financial statements.

Impairment of financial assets:

The Company applies the expected credit loss model for recognizing impairment loss on financial assets measured at amortised cost, trade receivables and other contractual rights to receive cash or other financial asset.

For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.

Financial liabilities and equity instruments Classification as debt or equity:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Financial liabilities:

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial instruments:

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid/payable is recognised in the Statement of Profit and Loss.

3 Significant accounting judgments, estimates and assumptions

In application of the Company''s accounting policies, which are described in note 2, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3.1 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

3.1.1 Useful lives of property, plant and equipment:

The Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period. During financial years ended 31 March 2023 and 2022, there were no changes in useful lives of property plant and equipment and intangible assets.

3.1.2 Impairment of property, plant and equipment:

The Company at the end of each reporting period, based on external and internal sources of information, assesses indicators and mitigating factors of whether a restaurant (cash generating unit) may have suffered an impairment loss. If it is determined that an impairment loss has been suffered, it is recognised in the Statement of Profit and Loss.

3.1.3 Impairment of trade receivables:

The Company estimates the probability of collection of accounts receivable by analyzing historical payment patterns, customer status, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.

3.1.4 Defined benefit plans:

The cost and present obligation of Defined Benefit Gratuity Plan are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are made at each reporting date.

3.1.5 Fair Value measurement of Financial Instruments:

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility, etc. Changes in assumptions/ judgements about these factors could affect the reported fair value of financial instruments.

3.1.6 Contingencies:

In the normal course of business, contingent liabilities may arise from litigations and other claims against the company. There are certain obligations which management have concluded based on all available facts and circumstances that are not probable of payment and such obligations are treated as contingent liabilities and disclosed in the notes (unless the probability of payment is remote) but are not provided for in the financial statements.

15.1 Total outstanding dues of micro enterprises and small enterprises

Disclosures relating to amounts payable as at the year-end together with interest paid/payable to Micro and Small Enterprise have been made in the accounts, as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status and the required disclosures are given below.

Company as Lessee

- The Company has entered into certain arrangements in the form of leases for its retail business. As per terms, the Company''s obligation could be fixed or purely variable or variable with minimum guarantee payment for use of property.

- During the year the Company has paid fixed lease rent of Rs. 403.90 Millions which has been considered in the calculation of lease liabilities and right of use assets as per Ind AS 116. In addition to fixed rent the Company has paid variable lease rentals (primarily w.r.t properties), rentals relating to lease of low value assets & certain services which are short term in nature amounting to Rs. 140.10 Millions (including Rs. 24.54 Millions of rent on unwinding of deposits) which has not been considered in calculation right of use asset and lease liabilities under Ind AS 116.

- Total cash outflow for leases (including interest on lease liabilities) amounting to Rs. 399.90 Millions.

- Impact on Financial ratios: Interest on lease liabilities is included in finance cost and lease liabilities is included in borrowings. Consequently, financial ratios like debt equity ratio, interest coverage ratio, debt services coverage ratio etc. have been significantly impacted following the adoption of Ind AS 116.

32.3 Financial risk management objectives

The Company''s principal financial liabilities, comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Company''s principal financial assets include trade and other receivables and cash and short-term deposits that are derived directly from its operations. Current investments are optimal deployment of excess funds.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency risk). The Company''s Board of Directors reviews and sets out policies for managing these risks and monitors suitable actions taken by management to minimize potential adverse effects of such risks on the company''s operational and financial performance.

32.3.1 Credit risk

Credit risk arises when a counterparty defaults on its contractual obligations to pay resulting in financial loss to the Company. The credit risk for the Company primarily arises from credit exposures to trade receivables (mainly franchisees), deposits with landlords for restaurant properties taken on lease and other receivables.

Trade and other receivables: The Company''s business is predominantly through cash and credit card collections. The credit risk on credit card collections is minimal, since they are primarily owned by customers'' card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of franchisees and the credit risk exposure for them is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for restaurant properties taken on leases, for which agreements are signed and property possessions timely taken for restaurant operations. The risk relating to refunds after vacating or restaurant shut down is minimal since the possession of the premises is retained till the refund is collected or there are liabilities outstanding against which the asset can be adjusted.

As a result, if the value of the Indian Rupee appreciates relative to these foreign currencies, the Company''s revenues measured in Indian Rupees will decrease. The exchange rate between the Indian Rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lesser quantum of revenue and expenses from foreign currencies, the Company is not significantly exposed to foreign currency risk.

Commodity Price Risk:

The Company purchases certain products, including meat, cheese, vegetables and other commodities which are subject to price volatility that is caused by weather, market conditions and other factors that are not considered predictable or within the Company''s control. The Company''s supplies and raw materials are available from several sources, and not dependent upon any single source for these items. If any existing suppliers fail or are unable to deliver in quantities required by the Company, the Company believes that there are sufficient other quality suppliers in the marketplace such that the Company sources of supply can be replaced as necessary.

Foreign Currency Sensitivity:

The following tables demonstrates the sensitivity to a 5% increase/decrease in foreign currencies exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material.

32.4 Fair value measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

32.4.1 Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company''s financial assets are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation technique(s) and inputs used).

Segment information

The principal business of the Company is operating food outlets/ sweet shops. All other activities of the Company revolve around its principal business. The Chairman & Managing Director (CMD) of the Company, has been identified as the Chief Operating Decision Maker (CODM). The CODM evaluates the Company''s performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit. Therefore, directors have concluded that there is only one operating reportable segment as defined by Ind AS 108 - Operating Segments. The Company predominantly operates in one geography i.e. India.

Asset held for sale

The Board of Directors ("the Board") of the Company at its meeting held on 20th October, 2022 has inter alia, subject to requisite approvals/ consents, considered and approved the scheme of Demerger of Asset by and between Speciality Restaurants Limited (the "Transferee Company" or "Company") and the wholly owned subsidiary namely Speciality Hotels India Private Limited ("Transferor Company") under section 230 to 232 of the Companies Act, 2013 ("Scheme"). Appointed date for demerger is 01-10-2022 and the asset has been classified as "Assets held for Sale". Previous year also includes capital work in progress at project MIOC - 2 amounting to Rs. 8.46 millions, as the management intended to sell off the asset

Note 38 Other notes

- The Company has not borrowed any funds. Hence, disclosure pertaining to end use and the filing of quarterly statements with the banks is not applicable.

- No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

- No funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

- No proceedings have been initiated or is pending against the Company during the year for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

- The Company is not declared wilful defaulter by any bank or financial Institution or other lender.

- The company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

- No charges or satisfaction are pending to be registered with Registrar of Companies beyond the statutory period.

- No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

- The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

- The Company has not traded or invested in crypto currency or virtual currency during the year.

Note 39

Money received against share warrant

On 2nd February,2023 the Company had allotted 60,00,000 warrants convertible into Equity Shares, each convertible into one equity share of face value of Rs.10/- each, on preferential basis, at an issue price of Rs. 212.05 each amounting to Rs. 1272.3 millions.

Application money of Rs. 53.02 per warrant equivalent to 25% of the issue price as warrant subscription money, amounting to Rs. 318.1 millions was received by the Company and the balance 75% of the issue price of Rs. 159.03 per warrant, amounting to Rs. 954.2 millions was to be received from the warrant holders on or before 30th April, 2023 which was extended to 31st October , 2023 by the Board of Directors in the meeting held on 29th April, 2023.

However, on or before to the Board Meeting on 29th April, 2023 after the year end, an amount of Rs.95.4 millions as balance 75% of Warranl Exercise Price for 6,00,000 warrants was received for conversion and 6,00,000 shares are allotted by the Company on 29th April, 2023. The balance amount of Rs. 858.8 millions with respect to 54,00,000 warrants shall be payable by the warrant holders on or before 31st October, 2023 after receipt of a written notice from the company.

Note 40

Exceptional Item

Exceptional item:

a) During the year ended March, 2023 includes reversal of impairment charge (net off depreciation/amortisation) taken on account of Covid - 19 pandemic, as the uncertainties with regards to Cash Flow''s of operating units no longer exists.

i) Right of use asset amounting to Rs. 54.55 millions

ii) Property, plant and equipment amounting to Rs. 29.40 millions

b) During the year ended March, 2023 includes Impairment of investment in subsidiary Company amounting to Rs. 8.03 millions (previous year amounting Rs. 6.56 millions in year ended March, 2022).

Note 41

The Board of Directors of the Company in its meeting on 29th May, 2023 recommended a dividend of Rs. 2.50 per equity share (at the rate of 25% on face value of Rs. 10 per share) of the Company for the year ended 31st March, 2023 which will be paid subject to the approvals of the shareholders in the annual general meeting of the Company, to those shareholders whose names appear in the register of members as on the date of the book closure in proportion to the paid up value of the equity shares and if approved and would result in a net cash outflow of Rs. 118.89 Millions.

Note 42

The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post- employment benefits receivec Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code wil come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

Note 43

Previous period / year figures have been regrouped, wherever necessary.

Note 44

Approval of financial statements

The financial statements were approved for issue by the board of directors on 29 May, 2023.

As per our report of even date attached For and on behalf of the Board of Directors

For Singhi & Co Speciality Restaurants Limited

Chartered Accountants Anjan Chatterjee Ullal Ravindra Bhat

FRN: 302049E Chairman and Managing Director Director

DIN : 00200443 DIN : 00008425

Milind Agal Rajesh Kumar Mohta Dushyant Mehta

Partner Executive Director - Finance Director

M No. 123314 & Chief Financial Officer DIN : 00126977

Avinash Kinhikar

Company Secretary & Legal Head

Place: Mumbai Place: Mumbai

Date: 29 May, 2023 Date: 29 May, 2023

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Mar 31, 2018

1 COMPANY BACKGROUND

Speciality Restaurants Limited ("The Company") is a limited company incorporated in India. The Company was incorporated on 1 December 1999. The Company is primarily engaged in the business of operating restaurant outlets / sweet shops.

14.4 Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

16.1 Summary of borrowing arrangements

(i) Details of Security Secured by the assets leased.

(ii) The loans is repayable in equated monthly instalments and interest rate is in the range of 9% - 13%

Note 2. Obligations under finance leases

31.1 Leasing arrangements

The Company has taken on lease land and vehicles. At the end of the lease period the vehicles will be transferred in the name of the Company. Vehicles are taken on lease for periods ranging from 3 to 5 years.

Interest rate underlying the obligations under finance leases of vehicles, are fixed at respective contract dates, is 9.21% per annum (as at 31 March, 2017: 9.21% per annum; as at 1 April, 2016: 9% to 13% per annum).

Note 3. Employee benefit plans

32.1 Defined contribution plans

The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 32.46 million (Previous Year ended 31 March, 2017 Rs. 38.85 million) for Provident Fund contributions in the Statement of profit & loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

32.2 Defined benefit plans:

The gratuity scheme is a defined benefit plan that provides for a lump sum payment to the employees on exit either by way of retirement, death, disability or voluntary withdrawal. Under the scheme, the employees are entitled to a lump sum amount aggregating to 15 days final basic salary for each year of completed service payable at the time of retirement/resignation, provided the employee has completed 5 years of continuous service. The defined benefit plan is administered by a third-party insurer. The third-party insurer is responsible for the investment policy with regards to the assets of the plan.

The Company expects to make a contribution of '' 19.80 Million (as at 31 March, 2017: Rs. 11.99 Million; as at 1 April, 2016: Rs. 7.49 Million) to the defined benefit plans during the next financial year.

(g) The weighted average duration of the defined benefit obligation as at 31 March 2018 is 7.52 years (2017: 7.98 years, 2016: 9.36 years)

(h) Sensitivity Analysis

Method used for sensitivity analysis:

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to the discount rate and the future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There is no change in the method of valuation for the prior periods in preparing the sensitivity analysis. For change in assumptions refer to note 32.4 (a) above.

Note 4. Employee Stock Option Scheme (ESOS)

33.1 During the FY 2013-14, the Board Governance & Remuneration committee in its meeting held on 6 September, 2013 granted 577,200 stock options under the Speciality Restaurants Limited - Employee Stock Option Scheme 2012 (ESOP 2012 Scheme) to the few eligible employees of the Company. The options allotted under the ESOP 2012 scheme are convertible into equal number of equity shares of the face value of Rs. 10 each.

Each Option entitles the holder thereof to apply for and be allotted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The option would vest in 4 annual instalments after one year of the grant. The exercise period commences from the date of vesting of the options and expires at the end of six years from the date of grant and would not exceed 3 years from the date of vesting in respect of Options granted under the ESOP 2012 Scheme.

33.2 Fair value of share options granted in the year

There are no new grants during the financial year 2017-18 Note 34 Financial Instruments

34.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders. The Company does not have any significant borrowing.

The Company is not subject to any externally imposed capital requirements.

The Company''s principal financial liabilities, comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Company''s principal financial assets include trade and other receivables, current investments and cash and short-term deposits that are derived directly from its operations.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk). The Company''s Board of Directors reviews and sets out policies for managing these risks and monitors suitable actions taken by management to minimize potential adverse effects of such risks on the company''s operational and financial performance.

34.3.1 Credit risk

Credit risk arises when a counterparty defaults on its contractual obligations to pay resulting in financial loss to the Company. The credit risk for the Company primarily arises from credit exposures to trade receivables (mainly franchisees), deposits with landlords for restaurant properties taken on lease and other receivables.

Trade and other receivables: The Company''s business is predominantly through cash and credit card collections. The credit risk on credit card collections is minimal, since they are primarily owned by customers'' card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of franchisees and the credit risk exposure for them is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for restaurant properties taken on leases, for which agreements are signed and property possessions timely taken for restaurant operations. The risk relating to refunds after vacating or restaurant shut down is managed through successful negotiations or appropriate legal actions, where necessary.

34.3.2 Liquidity risk management

The Company''s principal sources of liquidity are cash and cash equivalents, cash flow generated from operations and by churning of current investments. The Company does not have any significant borrowing. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

Liquidity risk tables

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of the financial liabilities based on the earliest date on which the Company can be required to pay.

34.3.3 Market Risk

The Company is exposed to market risks associated with foreign currency rates and commodity prices.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate fluctuations arise. The exchange gains or losses are recognised in profit or loss on the date of settlement and restatement at quarter intervals.

The Company''s exchange risk arises from its foreign currency revenues and expenses, (primarily in U.S. Dollars).

As a result, if the value of the Indian Rupee appreciates relative to these foreign currencies, the Company''s revenues measured in Indian Rupees will decrease. The exchange rate between the Indian Rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lesser quantum of revenue and expenses from foreign currencies, the Company is not significantly exposed to foreign currency risk.

Commodity Price Risk:

The Company purchases certain products, including meat, cheese, vegetables and other commodities which are subject to price volatility that is caused by weather, market conditions and other factors that are not considered predictable or within the Company''s control. The Company''s supplies and raw materials are available from several sources, and not dependent upon any single source for these items. If any existing suppliers fail or are unable to deliver in quantities required by the Company, the Company believes that there are sufficient other quality suppliers in the marketplace such that the Company sources of supply can be replaced as necessary. In most cases, the Company historically has been able to pass a substantial portion of the increased commodity costs to the Company''s customers through periodic menu price adjustments.

34.4 Fair value measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

34.4.1 Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company''s financial assets are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation technique(s) and inputs used).

34.4.2 Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

The directors are of the belief that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.

5. Leasing arrangements

Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 5 years

For certain restaurant outlets, rent is payable in accordance with the leasing agreement at the higher of:

i) Fixed minimum guarantee amount and;

ii) Revenue share percentage Note 36 Segment information

The principal business of the Company is operating food outlets/ sweet shops. All other activities of the Company revolve around its main business. The Chairman & Managing Director (MD) of the Company, has been identified as the chief operating decision maker (CODM). The CODM evaluates the Company''s performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit. Therefore, directors have concluded that there is only one operating reportable segment as defined by Ind AS 108 - Operating Segments.

Notes

1 These balances have been fully provided and have been disclosed as an exceptional item (refer note 42)

2 Figures in parenthesis relate to the corresponding previous year figures in relation to the Statement of Profit and Loss and the figures as at 31 March, 2017 in relation to the Balance Sheet

3 Rent and other expenses are shown as net of indirect taxes

4 Post retirement benefits is determined by the Company as a whole for all employees put together and hence disclosures of post employment benefits of Key management personnel is not separately available.

Notes to the reconciliation

a) Under the previous GAAP, interest free lease deposits were recorded at their transaction value. On transition to Ind AS, these lease deposits are remeasured at amortised cost using the effective interest rate method. The difference between the transaction value of the deposit and amortised cost is regarded as prepaid rent and recognised as expenses uniformly over the lease period. Interest income, measured by the effective interest rate method is accrued. The effect of these is reflected in total equity and / or profit or loss, as applicable.

b) Under the previous GAAP, in respect of certain leased properties, operating lease rentals were accounted on the basis of the ratio of forecasted sales over the balance lease period. On transition to Ind AS, the operating lease rents have been recognised as an expense on a straight-line basis over the lease term. The effect of these is reflected in total equity and / or profit or loss, as applicable.

c) Under the previous GAAP, equity settled employee share-based payments were recognised using the intrinsic value method. Under Ind AS, the cost of equity settled employee share-based payments is recognised based on the fair value of the options as on the grant date. The effect of these is reflected in total equity and/ or profit or loss as applicable.

d) Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the return on plan asset and actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognised in other comprehensive income. This resulted in a reclassification between profit or loss and other comprehensive income.

Note:

The amount shown in column (G) (ii) represents utilised amount after March 31, 2015 related to the objects disclosed in the prospectus dated May 22, 2012. Rs. 661 Lakhs was spent from April 1, 2015 upto the date of approval by the shareholders on November 27, 2015, which is included in total spend of Rs. 3,554 Lakhs.

Note 6. Exceptional Item

The exceptional item related to a provision of financial assets on account of restructuring pertaining to the joint venture company in Doha, Qatar. During the year, the Company along with the joint venture partner had entered into a Memorandum of Understanding (MOU) to sell specific portions of their shareholding in the joint venture entity to include local expertise with a change in the format of the restaurant outlet to enable operations & profitability of the joint venture entity to improve. However, owing to delay in complying with the terms and conditions of the MOU by the Company, the said MOU was cancelled by the potential buyers. Consequently, the change in format of the restaurant outlet was abandoned and the joint venture company did not resume operations. Accordingly, the Company recognised an impairment loss of Rs. 101.41 million for diminution in value of company''s investment in equity shares and receivables from the joint venture company.

Note 7.

(a) Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof: Rs. Nil (Previous year: Rs. 1.9 Million)

(b) Gross amount required to be spent during the period: Rs. Nil (Previous year: Rs. 2.19 Million).

Note 8. Disclosure of Holdings as well as dealings in Specified Bank Notes:

Pursuant to the notification dated 30th March, 2017 issued by the Ministry of Corporate Affairs (MCA), the Company has to disclose the holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016. Also pursuant to another notification issued by MCA on the same date amending the Schedule III of the Companies Act, 2013 requiring the company to disclose the details of Specified Bank Notes held and transacted during the period from 8 November, 2016 to 30 December, 2016 . The details are as given below:

Note 9. Approval of financial statements

The financial statements were approved for issue by the board of directors on 26 May 2018.

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Mar 31, 2017

1. Total outstanding dues of micro enterprises and small enterprises

Disclosures relating to amounts payable as at the year-end together with interest paid/payable to Micro and Small Enterprise have been made in the accounts, as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status and the required disclosures are given below.

The Company expects to contribute Rs. 11.99 Million (previous year Rs. 7.49 Million) to its gratuity plan for the next year. In assessing the Company''s post retirement liabilities the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the Indian assured Lives mortality 2006-08 ultimate tables.

The Company operates a funded gratuity plan for qualifying employees. Under the plan, the employees are entitled to gratuity benefits based on final salary at retirement. The Company makes provision in the books based on third party actuarial valuations.

The estimates of future salary increase, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The Expected Rate of Return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company''s policy for Plan Assets Management.

The details of the composition of the plan asset, by category, from the insurers have not been received and hence the disclosures as required by AS 15 -Employee Benefits have not been given.

2. Lease payments recognized in the Statement of Profit and Loss for the year ended 31 March, 2017 are as under:

Fixed lease rentals - Rs. 447.54 Million (Previous Year Rs. 415.36 Million)

Contingent rent - Rs. 63.39 Million (Previous Year Rs. 67.50 Million )

3. Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 5 years

4. For certain restaurant outlets rent is payable in accordance with the leasing agreement at the higher of:

5. Fixed minimum guarantee amount and;

6. Revenue share percentage

7. Employee Stock Option Scheme

8. During the previous year, the Board Governance & Remuneration committee in its meeting held on 6 September, 2013 granted 577,200 stock options under the Speciality Restaurants Limited - Employee Stock Option Scheme 2012 (ESOP 2012 Scheme) to few eligible employees of the Company. The options allotted under the ESOP 2012 scheme are convertible into equal number of equity shares of the face value of Rs. 10 each.

9. Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be allotted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the options and expires at the end of six years from the date of grant and would not exceed 3 years from the date of vesting in respect of Options granted under the ESOP 2012 Scheme.

10. Details of Corporate Social Responsibility (CSR) expenditure

11. Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof -Rs. 1.9 Million (Previous year Rs. 0.55 Million)

12. Gross amount required to be spent during the period - Rs. 2.19 Million (Previous year Rs. 4.45 Million).

13. Comparatives

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2016

Note: 1

Figures in parenthesis relate to the corresponding previous year figures.

Note: 2

Depreciation for the year includes impairment charge aggregating to Rs.14.26 Million (Previous Year Rs.7.07 Million)

Note: 3

Pursuant to the enactment of the Companies Act, 2013, effective 1 April, 2014, the Company has reviewed and revised the estimated economic useful lives of its fixed assets generally in accordance with those provided in Schedule II to the Companies Act, 2013 except in case of furniture and fixtures. The Company assessed the estimated useful life of furniture and fixtures as 10 years based on past experience and technical evaluation.

Consequent to the change in the estimated useful life of the assets, the depreciation expense in the Statement of Profit and Loss for the previous year was higher by Rs.23.33 Million.

Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Rs. Nil as on April 1, 2014, and has consequently adjusted an amount of Rs.0.93 Million (net of deferred tax of Rs.0.48 Million) in the previous year against the opening balance in the Statement of Profit and Loss under Reserves and Surplus.

The Company expects to contribute Rs. 7.49 Million (previous year Rs. 20.63 Million) to its gratuity plan for the next year. In assessing the Company''s post retirement liabilities the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the Indian assured Lives mortality 2006-08 ultimate tables.

The Company operates a funded gratuity plan for qualifying employees. Under the plan, the employees are entitled to gratuity benefits based on final salary at retirement. The Company makes provision in the books based on third party actuarial valuations.

The estimates of future salary increase, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The Expected Rate of Return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company''s policy for Plan Assets Management.

4. Disclosures in respect of Operating leases

b) Lease payments recognised in the Statement of Profit and Loss for the year ended 31 March, 2016 are as under:

Fixed lease rentals - Rs. 415.36 Million (Previous Year Rs. 367.65 Million)

Contingent rent - Rs. 67.50 Million (Previous Year Rs. 68.26 Million )

c) Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 5 years

d) For certain restaurant outlets rent is payable in accordance with the leasing agreement at the higher of:

i) Fixed minimum guarantee amount and;

ii) Revenue share percentage

5. Employee Stock Option Scheme

a) During the previous year, the Board Governance & Remuneration committee in its meeting held on 6 September, 2013 granted 577,200 stock options under the Speciality Restaurants Limited - Employee Stock Option Scheme 2012 (ESOP 2012 Scheme) to few eligible employees of the Company. The options allotted under the ESOP 2012 scheme are convertible into equal number of equity shares of the face value of Rs. 10 each.

c) Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be allotted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the options and expires at the end of six years from the date of grant and would not exceed 3 years from the date of vesting in respect of Options granted under the ESOP 2012 Scheme.

6. Segment Reporting

The Company is engaged in the food business which, in the context of Accounting Standard 17 on Segment Reporting constitutes a single reportable business segment. As at 31 March, 2016, Fixed Assets (Capital Work In Progress) include Rs. 224.57 Million (segment assets) (As at 31 March, 2015, Rs. 197.29 Million) related to non-reportable segments.

There is only one Geographical segment i.e. India.

7. Utilization of IPO Proceeds as on 31 March, 2016

The Company had issued equity shares pursuant to its IPO in 2011-12 amounting to Rs. 1,760.91 Million for the purposes of development of new restaurants and a food plaza, repayment of term loans and general corporate purposes. As at 31 March, 2016, an amount aggregating Rs. 1,144.5 Million (Previous year Rs. 998.80 Million) has been utilized in development of new restaurants, repayment of term loan facilities, general corporate purpose excluding issue related expenses. The balance amount of Rs.432.8 Million (Previous year Rs. 578.50 Million) is intended to be utilized in future periods. The shareholders on 27 November, 2015 passed a special resolution by postal ballot to utilize the balance unutilized amount as on 31 March, 2015 for the revised object - development of new restaurants/ conversion of existing restaurants. The unutilized amount has temporarily been invested by the Company in mutual funds and term deposits with banks.

8. Details of Corporate Social Responsibility (CSR) expenditure

(a) Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof - Rs.0.55 Million (Previous year Rs. 0.55 Million)

(b) Gross amount required to be spent during the period - Rs. 4.45 Million (Previous year Rs. 5.32 Million).

9. Comparatives

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2015

1 COMPANY BACKGROUND

Speciality Restaurants Limited ("The Company") was incorporated on 1 December 1999. The Company is primarily engaged in the business of operating restaurant outlets / sweet shops.

2 Contingent Liabilities and Commitments (To the extent not provided for)

particulars 2014-2015 2013-2014

Contingent Liabilities in respect of:

Claims against the Company not acknowledged as debts

a. Legal cases against the Company 167.18 167.18

b. Sales Tax demands 22.92 0.27

c. Income Tax demands 26.40 23.92

216.50 191.37

Other matters Indirect taxes 16.13 16.13

Future cash outflows in respect of above matters are determinable only on receipt of judgements / decisions pending at various forums / authorities

Commitments Estimated amount of contracts remaining to be executed on capital 88.97 75.27 account and not provided for (Net of Advances) 88.97 75.27

b) Lease payments recognised in the Statement of Profit and Loss for the year ended 31 March, 2015 are as under: Fixed lease rentals - Rs. 367.65 Million (Previous Year Rs. 333.56 Million)

Contingent rent - Rs. 68.26 Million (Previous Year Rs. 57.53 Million )

c) Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 5 years

d) For certain restaurant outlets rent is payable in accordance with the leasing agreement at the higher of:

i) Fixed minimum guarantee amount and;

ii) Revenue share percentage

3 Related Party Disclosures:

List of Related parties and their relationships

Sr.No Category of related parties Names

1 Key management personnel Anjan Chatterjee Suchhanda Chatterjee Indroneil Chatterjee

2 Enterprises over which directors or relatives Situations Advertising of directors exercise control & Marketing Services / significant influence Private Limited

Shruthi Hotels Enterprises Private Limited

Prosperous Promotors Private Limited

Havik Export (P)Limited Supriya Taxtrade Private Limited Span Promotions Private Limited Mainland Restaurants Private Limited Anjan Chatterjee - HUF Indroneil Chatterjee - HUF

3 Subsidiaries Love Sugar and Dough Private Limited

4 Jointly controlled entity Mainland China Restaurant (LLC)

4 Employee Stock Option Scheme

a) During the previous year, the Board Goverance & Remuneration committee in its meeting held on 6 September, 2013 granted 577,200 stock options under the Speciality Restaurants Limited - Employee Stock Option Scheme 2012 (ESOP 2012 Scheme) to few eligible employees of the Company. The options allotted under the ESOP 2012 scheme are convertible into equal number of equity shares of the face value of Rs. 10 each. The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

b) Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be alloted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the options and expires at the end of six years from the date of grant and would not exceed 3 years from the date of vesting in respect of Options granted under the ESOP 2012 Scheme.

5 Segment Reporting

The Company is engaged in the food business which, in the context of Accounting Standard 17 on Segment Reporting constitutes a single reportable business segment. As at 31 March, 2015, Fixed Assets (Capital Work In Progress) include Rs. 197.29 Million (segment assets) (As at 31 March, 2014, Rs. 183.74 Million) related to non-reportable segments.

6 Utilisation of IPO Proceeds as on 31 March, 2015

The Company had issued equity shares amounting to Rs. 1,760.91 Million for purposes of development of new restaurants and a food plaza, repayment of term loans and general corporate purposes. As at 31 March, 2015, an amount aggregating Rs. 998.80 Million has been utilised in development of new restaurants, repayment of term loan facilities, general corporate purpose and issue related expenses. The balance amount of Rs. 578.50 Million is intended to be utilised in future periods. The unutilised amount has temporarily been invested by the company in mutual funds and term deposits with banks.

7 The Company is yet to realise amounts aggregating Rs. 26.59 Million, receivable from overseas franchisees which are outstanding for a period more than that specified under the Foreign Exchange Management Act, 1999. The Company has initiated the process of obtaining the necessary approvals in this connection.

8 Comparatives

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosureclosure

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Mar 31, 2014

1 Contingent liabilites and Commitments (To the extent not provided for)

Rs. in Millions

Particulars 2013-2014 2012-2013

Contingent Liabilites in Respect of:

Claims against the company not acknowledged as debts

a. Legal cases against the company 167.18 167.18

b. Sales Tax demands 0.27 17.44

c. Income Tax demands 23.92 21.37

191.37 205.99

Other maters

Indirect taxes 16.13 -

Commitments

Estmated amount of contracts remaining to be executed on capital 75.27 53.72 account and not provided for (Net of Advances)

75.27 53.72

2 Disclosures in respect of Operating Leases

a) Future minimum lease payments in respect of non-cancellable leases are as follows:

b) Lease payments recognized in the Statement of profit and Loss for the year ended March 31, 2014 are as under: Fixed lease rentals – Rs. 333.56 Million (Previous Year Rs. 286.59 Million)

Contingent rent – Rs. 57.53 Million (Previous Year Rs. 49.99 Million)

c) Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 5 years

d) For certain restaurant outlets rent is payable in accordance with the leasing agreement at the higher of: i) Fixed minimum guarantee amount and;

ii) Revenue share percentage

29 Employee Stock Option Scheme

a) During the current year, the Board Goverance & Remuneraton commitee in its meetng held on 6 September 2013 granted 577,200 stock optons under the Speciality Restaurants Limited - Employee Stock Opton Scheme 2012 (ESOP 2012 Scheme) to few eligible employees of the Company. The optons alloted under the ESOP 2012 scheme are convertble into equal number of equity shares of the face value of Rs. 10 each. The diference between the fair price of the share underlying the optons granted on the date of grant of opton and the exercise price of the opton (being the intrinsic value of the opton) representng Stock compensaton expense is expensed over the vestng period.

c) Terms and Conditons of Options Granted

Each Opton entitles the holder thereof to apply for and be alloted one equity share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the optons and expires at the end of six years from the date of grant and would not exceed 3 years from the date of vestng in respect of Optons granted under the ESOP 2012 Scheme.

The exercise price per opton, being the fair market price at the date of grant, is Rs. 126.20 for 1 share of the face value of Rs. 10 each.

35 Segment Reportng

The Company is engaged in the food business which, in the context of Accountng Standard 17 on Segment Reportng consttutes a single reportable business segment. As at 31 March 2014, Fixed Assets (Capital Work In Progress) include Rs 183.74 Million, (segment assets) (As at 31 March 2013, Rs. 89.93 Million) related to non-reportable segments.

36 Utlisaton of ipo proceeds as on 31 march 2014

The Company had issued equity shares amountng to Rs. 1,760.91 Million for purposes of development of new restaurants and a food plaza, repayment of term loans and general corporate purposes. As at 31 March 2014, an amount aggregatng Rs. 844.10 Million has been utlised in development of new restaurants, repayment of term loan facilites and issue related expenses and an amount of Rs. 916.80 Million is pending utlisaton in future periods. The unutlised amount has temporarily been invested by the company in mutual funds and term deposits with banks.

37 Comparatves

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2013

1 COMPANY BACKGROUND

Speciality Restaurants Limited ("The Company") was incorporated on 1 December 1999. The Company is primarily engaged in the business of operating restaurant outlets / sweet shops.

On 30 May 2012 the Equity Shares of the Company were listed on the Bombay Stock Exchange and the National Stock Exchange.

2 Contingent Liabilities and Commitments

Rs. In Millions

Particulars 2012-2013 2011-2012

Contingent Liabilities in respect of:

a. Legal cases against the company 167.18 167.18

b. Sales Tax demands 17.44 17.44

c. Income Tax demands 21.37 2.87

205.99 187.49

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 53.72 86.99

53.72 86.99

3 Disclosures in respect of Operating leases

a) Future minimum lease payments in respect of non-cancellable leases are as follows:

b) Lease payments recognized in the Statement of Profit and Loss for the year ended March 31, 2013 are as under: Minimum lease payments - Rs. 280.83 Million (Previous Year Rs. 241.02 Million)

Contingent rents - Rs. 55.75 Million (Previous Year Rs. 50.33 Million)

c) Premises are taken on Lease for periods ranging from 1 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 1 to 10 years

d) Contingent rent for certain restaurant outlets is payable in accordance with the leasing agreement at the higher of:

i) Fixed minimum guarantee amount and;

ii) Revenue share percentage

4 Segment Reporting

The Company is engaged in the food business which, in the context of Accounting Standard 17 on Segment Reporting constitutes a single reportable business segment. As at 31 March 2013, Fixed Assets (Capital Work In Progress) include Rs 89.93 Million (segment assets), (As at 31 March 2012, Rs. 78.95 Million) related to non-reportable segments.

5 Utilisation of IPO Proceeds as on 31 March 2013

The Company had issued equity shares amounting to Rs. 1,760.91 million for purposes of development of new restaurants and food plaza, repayment of term loans and general corporate purposes. As at 31 March, 2013, an amount of Rs. 1,237.80 million is pending utilisation in future periods. Accordingly, the unutilised amount has been invested in mutual funds and term deposits with banks.

6 Comparatives

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2012

1. COMPANY BACKGROUND

Speciality Restaurants Limited ("The Company") was incorporated on 1 December 1999. The Company is primarily engaged in the business of operating restaurant outlets / sweet shops.

On 30 May 2012 the Equity Shares of the Company were listed on the Bombay Stock Exchange and the National Stock Exchange. The Company raised Rs. 1760.91 million through public issue of 11,739,415 Equity Shares of Rs.10/- each for cash at a premium of Rs. 140/- per share.

2. Contingent Liabilities and Commitments

Rs. In Millions Particulars 2011-2012 2010-2011

Contingent Liabilities in respect of:

a. Legal cases against the company 167.18 177.47

b. Sales Tax demands 17.44 0.11

c. Income Tax demands 2.87 -

187.49 177.58

Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 86.99 135.83

86.99 135.83

3. Derivative Instruments

There are no outstanding forward contracts as at 31 March, 2012 and 31 March, 2011.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

b) Lease payments recognized in the statement of profit and loss for the year ended March 31, 2012 are as under: Minimum lease payments - Rs. 236.70 million (Previous Year Rs. 201.48 million)

Contingent rent - Rs.50.33 million (Previous Year Rs. 36.61 million)

c) Premises are taken on Lease for periods ranging from 2 to 50 years with a non- cancellable period at the beginning of the agreement ranging from 2 to 9 years

d) Contingent rent for certain restaurant outlets is payable in accordance with the leasing agreement as the higher of: i) Fixed minimum guarantee amount and; ii) Revenue share percentage

4. Segment Reporting

The Company is engaged in the food business which, in the context of Accounting Standard 17 on Segment Reporting constitutes a single reportable business segment. As at 31 March 2012, Fixed Assets (Capital Work In Progress) include Rs. 75.49 million (segment assets), (As at 31 March 2011, Rs. 50.12 million) related to non-reportable segments.

5. Comparatives

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.