Your Directors present the Tenth (10th) Annual Report on the Company's business and operations, together with the Audited Financial Statements for the financial year ended March 31, 2023 and other accompanying reports, notes and certificates.
FINANCIAL HIGHLIGHTS AND PERFORMANCE
The financial highlights of the Company for the year ended March 31, 2023 are as follows:
|
(Rs. in Million)
|
|
Particulars
|
Standalone
|
Consolidated
|
| |
2022-23
|
2021-22
|
2022-23
|
2021-22
|
|
Revenue from Operations
|
14,396.51
|
9,437.09
|
20,542.79
|
14,902.73
|
|
Other Income
|
325.32
|
205.29
|
359.59
|
224.38
|
|
Total Income
|
14,721.83
|
9,642.38
|
20,902.38
|
15,127.11
|
|
Less: Cost of materials consumed
|
4,841.05
|
3,231.36
|
7,356.94
|
5,498.06
|
|
Less: Employee benefit expenses
|
2,280.12
|
1,539.77
|
3,668.78
|
2,668.05
|
|
Less: Finance cost
|
895.65
|
679.53
|
1,051.79
|
953.58
|
|
Less: Depreciation and amortisation expenses
|
1,801.97
|
1,356.95
|
2,840.42
|
2,335.84
|
|
Less:Other expenses
|
5,621.07
|
3,764.23
|
8,402.47
|
5,771.27
|
|
Loss before Exceptional items and Tax Expense
|
(718.03)
|
(929.46)
|
(2,418.02)
|
(2,099.69)
|
|
Add: Exceptional items
|
-
|
-
|
-
|
251.85
|
|
Loss before Tax Expense
|
(718.03)
|
(929.46)
|
(2,418.02)
|
(2,351.54)
|
|
Less: Tax Expense (Current & Deferred)
|
-
|
-
|
-
|
-
|
|
Loss for the year (1)
|
(718.03)
|
(929.46)
|
(2,418.02)
|
(2,351.54)
|
|
Total other comprehensive income/ (loss) for the year, net of tax (2)
|
(3.57)
|
(6.77)
|
33.05
|
(47.40)
|
|
Total comprehensive loss for the year, net of tax (1 2)
|
(721.60)
|
(936.23)
|
(2,384.97)
|
(2,398.94)
|
|
Equity holders of the parent
|
NA
|
NA
|
(2,183.75)
|
(2,010.75)
|
|
Non-controlling interests
|
NA
|
NA
|
(201.22)
|
(388.19)
|
|
Opening balance of retained earnings
|
(6,080.87)
|
(5,151.41)
|
(9,694.24)
|
(6,874.02)
|
|
Closing balance of retained earnings
|
(6,798.90)
|
(6,080.87)
|
(12,037.80)
|
(9,694.24)
|
During the financial year 2022-23, the Company reported total income of '14,721.83 million on standalone basis and '20,902.38 million on a consolidated basis, increase of 52.68% on standalone basis and 38.18% on a consolidated basis from the financial year 2021-22 mainly on account of new restaurant addition and Average Daily Sales (ADS) recovery. The total expenditure excluding exceptional items was '15,439.86 million on standalone basis and '23,320.40 million on a consolidated basis, increase of 46.05% on standalone basis and 35.37% on a consolidated basis from the financial year 2021-22. The Company's gross margin improved by 61 basis points on standalone basis during the financial year 2022-23 at 66.37% as compared to 65.76% in the financial year 2021-22. The Company's gross margin improved by 108 basis points on consolidated basis during the financial year 2022-23 at 64.19% as compared to 63.11% in financial year 2021-22.
COMPANY OVERVIEW AND STATE OF COMPANY AFFAIRS
Restaurant Brands Asia Limited (the 'Company'/ 'RBA') embarked on its journey in 2013 and since then it has become one of the fastest growing international Quick Service Restaurant ('QSR') chain in India during the first five years of its operations based on the number of restaurants. As the national master franchisee of the BURGER KING® brand in India, it has exclusive rights to develop, establish, operate and franchise BURGER KING® branded restaurants in India. The master franchisee arrangement provides RBA with the ability to use Burger King's globally recognised brand name to grow business in India, while leveraging the technical, marketing and operational expertise associated with the global BURGER KING® brand. RBA through its subsidiaries in Indonesia runs the national master franchisee of the brand BURGER KING® and brand Popeyes®. It has exclusive rights through its subsidiaries to develop, establish, operate and franchise BURGER KING® and Popeyes® brand in Indonesia.
As of March 31,2023, the Company had a widespread network of 391 Burger King® restaurants, including 7 sub-franchisee restaurants in India.
A key focus of the business is promoting and maintaining operational quality, a people-centric culture and an effective technology system that enables us to optimise the performance of the restaurants and enhance customer experience, thus, offering and contributing to the Company's growth.
The Company possesses following competitive strengths:
• Exclusive national master franchise rights in India
• Strong customer proposition
• Brand positioning for millennials
• Vertically managed and scalable supply chain
• 0 perational quality, a people-centric operating culture, and effective technology systems
• Well defined restaurant roll-out and development process
• Experienced and professional management team
Please refer to the section on Business Overview in the Management Discussion and Analysis for a detailed overview and state of company affairs.
DIVIDEND & APPROPRIATIONS
Since the Company did not make any profit during the financial year, the Directors of your Company do not recommend any dividend for the financial year under review.
TRANSFER TO RESERVES
In view of the losses incurred during the financial year, no amount is proposed to be transferred to the reserves during the financial year under review, except as required under any statue.
SHARE CAPITAL
(a) Authorised Share Capital
0 uring the year under review, there was no change in the authorised share capital of the Company.
0he Authorized Share Capital of the Company is '6,00,00,00,000/- (Rupees Six Hundred Crore Only) divided into 60,00,00,000 (Sixty Crore) equity shares of '10/- each, as on March 31, 2023.
(b) Issued, Subscribed and Paid-up Share Capital
0 uring the financial year under review, Company issued and allotted 18,05,607 equity shares of face value of '10/-each pursuant to exercise of stock options granted by the Company in terms of the Company's Employee Stock Option Scheme, 2015.
As on March 31,2023, the issued, subscribed and paid-up share capital of the Company is '4,94,55,43,490/- divided into 49,45,54,349 equity shares of '10/- each.
(c) Utilization of proceeds of Preferential Allotment, Initial Public Offer ('IPO') and Qualified Institutions Placement ('QIP')
Ahere has been no deviation in the use of proceeds of the Preferential Issue, IPO and QIP from the objects stated in the Offer document as per Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations'). The Company has been disclosing on a quarterly basis to the Audit Committee, the uses / application of proceeds / funds raised from Preferential Issue, IPO and QIP and the same is also filed with the Stock Exchanges on a quarterly basis, as applicable.
Ahe funds raised under the Preferential Issue and IPO were fully utilised by the Company during the year under review.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
DIRECTORS
Re-appointment
In accordance with the provisions of the Companies Act, 2013 ('the Act') and the Articles of Association of the Company:
1. M r. Ajay Kaul, Non-Executive Director of the Company, was due to retire by rotation at the 9th Annual General Meeting and being eligible, had offered himself for reappointment. He was re-appointed at the Annual General Meeting held on September 14, 2022.
2. M r. Jaspal Singh Sabharwal, Non-Executive Director of the Company, is liable to retire by rotation at this Annual General Meeting and being eligible, has offered himself for re-appointment. The Board of Directors recommend his re-appointment for consideration by the shareholders of the Company at the ensuing Annual General Meeting.
R esolution seeking his re-appointment along with his profile as required under Regulation 36(3) of SEBI Listing Regulations forms part of the Notice of 10th Annual General Meeting.
Appointments and Resignations
During the year under review, Mr. Rafael Odorizzi De Oliveira who was appointed as Additional Director of the Company w.e.f. February 3, 2022, was regularized as Non-Executive (NonIndependent Director). He shall be liable to retire by rotation.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel ('KMP') of the Company as per Section 2(51) and 203 of the Act as on March 31, 2023 are as follows:
|
Name of the KMP
|
Designation
|
|
Mr. Rajeev Varman
|
Whole-time Director and Group Chief Executive Officer
|
|
Mr. Sumit Zaveri
|
Group Chief Financial Officer and Chief Business Officer
|
|
Mr. Sameer Patel
|
Chief Financial Officer (India)
|
|
Ms. Madhulika Rawat
|
Company Secretary and Compliance Officer
|
During the year under review,
1. M r. Rajeev Varman's designation has been elevated from "Whole-time Director and Chief Executive Officer" to "Whole-time Director and Group Chief Executive Officer"with effect from June 1, 2022.
2. M r. Sumit Zaveri had been elevated from the position of Chief Financial Officer of the Company and appointed as "Group Chief Financial Officer and Chief Business Officer" of the Company with effect from June 1, 2022. Mr. Sumit Zaveri continues to be a Key Managerial Personnel of the Company as per the Companies Act, 2013.
3. M r. Sameer Patel had been appointed as the Chief Financial Officer (India) and designated as Key Managerial Personnel of the Company with effect from June 1,2022.
During the year under review, except as stated above, there
were no other changes in the Directors and Key Managerial
Personnel of the Company.
BOARD OF DIRECTORS, MEETINGS AND ITS COMMITTEES
Composition of Board of Directors
The Composition of the Board of Directors as on March 31, 2023 is as follows:
|
Sr. No.
|
Name of the Director
|
Designation/Status
|
DIN
|
|
1.
|
Mr. Shivakumar Dega
|
Chairman and Independent Director
|
00364444
|
|
2.
|
Mr. Rajeev Varman
|
Whole-time Director and Group CEO
|
03576356
|
|
3.
|
Mrs. Tara Subramaniam
|
Independent Director
|
07654007
|
|
4.
|
Mr. Sandeep Chaudhary
|
Independent Director
|
06968827
|
|
5.
|
Mr. Amit Manocha
|
Non- Executive Director
|
01864156
|
|
6.
|
Mr. Jaspal Singh Sabharwal
|
Non- Executive Director
|
00899094
|
|
7.
|
Mr. Ajay Kaul
|
Non- Executive Director
|
00062135
|
|
8.
|
Mr. Rafael Odorizzi De Oliveira
|
Non- Executive Director
|
09492506
|
Number of Board Meetings
During the financial year ended March 31, 2023, the Board of Directors met 8 (eight) times viz., on, May 30, 2022, July 26, 2022, August 12, 2022, November 11, 2022, February 8, 2023, February 16, 2023, March 23, 2023 and March 28, 2023. The maximum interval between any two meetings did not exceed 120 days.
Details of the meetings of the Board along with the attendance of the Directors therein have been disclosed as part of the Report on Corporate Governance forming part of this Annual Report.
Audit Committee
The details pertaining to the composition, terms of reference and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance forming part of this Annual Report.
The recommendations of the Audit Committee in terms of its charter were considered positively by the Board of Directors of your Company from time to time during the financial year.
Nomination and Remuneration Committee
The details including the composition, terms of reference of the Nomination and Remuneration Committee and the meetings thereof held during the financial year and other matters provided in Section 178(3) of the Act are given in the Report on Corporate Governance forming part of this Annual Report.
Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters
In accordance with the provisions of Section 134(3)(e), sub section (3) and (4) of Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the SEBI Listing Regulations, the Company has formulated Nomination and Remuneration Policy to provide a framework for remuneration of members of the board of directors of the Company, key managerial personnel, and other employees of the Company.
The Nomination and Remuneration Policy of the Company can be accessed on the website of the Company at https://www. burgerking.in/investor-relations.
Other Committees
The details of other Committees of the Board are given under the Report on Corporate Governance forming part of this Annual Report.
Declaration by Independent Directors
Pursuant to the provisions under Section 134(3)(d) of the Act, with respect to statement on declaration given by Independent Directors under Section 149(6) of the Act, the Board hereby confirms that all the Independent Directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said Section 149(6) and relevant Regulation of SEBI Listing Regulations.
Terms and conditions for Independent Directors are put up on the website of the Company and can be accessed at https:// www.burgerking.in/investor-relations.
Formal Annual Evaluation
The Company has devised a policy for performance evaluation of its individual directors, the Board and the Committees constituted by it, which includes criteria for performance evaluation. In line with the requirements of the Act and SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance, working of the Committees and the individual directors.
The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board's effectiveness in decision making, in providing necessary advice and suggestions to the Company's management, etc.
A separate meeting of the Independent Directors was also held during the financial year on February 8, 2023 for evaluation of the performance of the Non-Independent Directors, the Board as a whole and that of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in meetings, contribution towards positive growth of the Company, etc.
Familiarization programme for Independent Directors
Towards familiarization of the Independent Directors with the Company, periodic presentations are made at the Board and Committee meetings on business and performance updates of the Company, global business environment, business strategy and risk involved including their roles, rights, responsibility in the Company, nature of the industry in which the Company operates, business model of the Company and related matters.
The details of such programmes for familiarisation of the Independent Directors with the Company are available on the website of the Company at the web link: https://www. burgerking.in/investor-relations.
STATUTORY DISCLOSURES
Requirements for maintenance of cost records
The Company is not required to maintain the cost records as specified by Central Government under Section 148(1) of the Act and rules made thereunder.
Vigil Mechanism & Whistle-blower policy
The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of its business operations.
The Vigil Mechanism & Whistle-blower Policy provides a channel to the employees, directors and other stakeholders to report about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct, regulatory requirements, incorrect or misrepresentation of any financial statements and such other matters.
Annual Return
As required under Section 92(3) of the Act, Annual Return is hosted on the website of the Company at www.burgerking.in.
Particulars of contracts or arrangements with related parties
All related party transactions entered into during the financial year under review were approved by the audit committee and the board, as required, from time to time and the same are disclosed in the notes forming part of the financial statements provided in this Annual Report.
Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, all contracts/ arrangements/ transactions entered into by the Company with its related parties, during the financial year under review, were
• in "ordinary course of business" of the Company;
• on an "arm's length basis"; and
• not "material".
All transactions with related parties are in accordance with the policy on related party transactions formulated by the Company. Accordingly, Form No. AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of related party transactions, which are not at "arm's length basis" and also which are "material and at arm's length basis", is not provided as annexure to this Report.
Particulars of Loan, Guarantee, Security and Investments
Details of loans given, investments made or guarantees given or security provided, if any, as per the provisions of Section 186 of the Act and Regulation 34(3) read with Schedule V of
the SEBI Listing Regulations are given in the notes forming part of the financial statements provided in this Annual Report.
Deposits
The Company has not accepted any deposits from the public within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
As the Company has not accepted any deposit during the financial year under review, there is no non-compliance with the requirements of Chapter V of the Act.
Risk Management Policy
The Company has a mechanism to identify and evaluate business risks and opportunities. This mechanism seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage and helps in identifying risk trends, exposure and potential impact analysis at a Company level as well as for different business segments. The Company has a Risk Management Policy in place to identify, assess, mitigate, monitor, and report the key risk categories (including Strategic, Financial, Operational, Regulatory, Reputational, Third-party, Sustainability, Technological Risks) on a periodic basis.
Board has constituted a Risk Management Committee of the Board, to assist the Board with regard to the identification, evaluation and mitigation of operational, strategic and external risks. More details on risks and threats have been disclosed in the section "Management Discussion and Analysis" forming an integral part of this Annual Report.
Internal Financial Control and their adequacy
Considering the size and nature of the business, presently adequate internal controls systems with reference to financial statements are in place. However, as and when Company achieves further growth and higher level of operations, the Company will review the internal control system to match the size and scale of operations, if required.
The Company has proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against unauthorized use or disposition and that the transactions are authorised and recorded correctly.
|
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is provided herein below:
|
|
(A)
|
Conservation of Energy
|
|
| |
(i)
|
The steps taken or impact on conservation of energy
|
Reduced use of electricity and gas is structurally build in the Company's restaurant construction design and the Company sources the equipments like holding units, friers, etc. that ensures reduced consumption of energy and gas. Also electrical system installation ensures minimum fluctuation resulting in withdrawal of right amount of power.
|
| |
(ii)
|
The steps taken by the company for utilising alternate sources of energy
|
Use of e-bikes at restaurants
|
| |
(iii)
|
The capital investment on energy conservation equipments
|
Nil
|
|
(B)
|
Technology absorption
|
|
| |
(i)
|
The efforts made towards technology absorption
|
Nil
|
| |
(ii)
|
The benefits derived like product improvement, cost reduction, product development or import substitution
|
Nil
|
| |
(iii)
|
In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
|
|
| |
|
(a) The details of Technology imported;
(b) The year of Import;
(c) Whether the technology been fully absorbed; and
|
N.A.
|
| |
|
(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof
|
|
| |
(iv)
|
The expenditure incurred on Research and Development.
|
Nil
|
|
(C)
|
Foreign Exchange Earnings and Outgo
|
|
| |
(i)
|
Foreign Exchange Earnings by the Company
|
-
|
| |
(ii)
|
Foreign Exchange Expenditure by the Company (' in Million)
|
1,896.26
|
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of this policy is to lay clear guidelines and provide right direction in case of any reported incidence of sexual harassment across the Company's offices, and take appropriate decision in resolving such issues. An Internal Complaints Committee ('ICC') has been set up to redress the complaints received regarding sexual harassment.
During the financial year under review, 14 complaints with respect to sexual harassment were received and resolved by the Committee.
There were no unresolved complaints at the end of the financial year under review.
Material changes and commitments affecting the financial position of the Company
A. Additional infusion in PT Sari Burger Indonesia
D uring the financial year ended March 31, 2023, the Company has infused '1,243.99 million on February 24, 2023 by subscribing to 64,146 fresh equity shares of PT Sari Burger Indonesia ('BK Indonesia'). Pursuant to the additional investment made, the Company's controlling stake in BK Indonesia has increased to 88.80% from 87.75%.
B. Corporate guarantee and performance guarantee
i. D uring the financial year ended March 31, 2023, the Company has issued Corporate Guarantee in favour of PT Bank CIMB Niaga Tbk amounting to IDR 85,575.50 million (equivalent to '469.90 million) and in favour of PT Bank Central Asia Tbk amounting to IDR 4,10,000 million (equivalent to '2,251.31 million) and USD 0.28 million (equivalent to '22.99 million)
to secure BK Indonesia's liabilities towards the aforesaid banks.
ii. The outstanding borrowings in the books of BK Indonesia as on March 31, 2023 is '1,648.00 million (March 31, 2022: '1,419.36 million). The Company has charged commission in respect of corporate guarantee.
iii. T he Company has provided performance guarantee amounting to USD 551,221 as determined on February 22, 2023 in favour of BK Asia Pac Pte. Ltd. ('BK Asia Pac') for securing the obligations of BK Indonesia as per the Master Franchisee and Development Agreement dated December 4, 2014 ('Indonesia MFDA'). The aforesaid guarantee amount would be determined, agreed and/or modified prior to every financial year end. Amount of outstanding payables by BK Indonesia to BK Asia Pac as on March 31, 2023 is '22.47 million (March 31, 2022: '20.28 million).
iv. T ursuant to the Side Letter executed between the Company and PLK Apac Pte. Ltd. ('PLK') on July 27, 2022, the Company has provided performance guarantee amounting to USD 12,53,656 as determined on July 27, 2022 in favour of PLK for securing the obligations of PT Sari Chicken Indonesia as per the Master Franchisee and Development Agreement dated July 27, 2022 executed between PT Sari Chicken Indonesia, PLK and BK Indonesia. The aforesaid guarantee amount would be determined, agreed and/or modified prior to every financial year end pursuant to the aforesaid Side Letter. Amount of outstanding payables by PT Sari Chicken Indonesia to PLK as on March 31, 2023 is '1.29 million (March 31, 2022: 'NIL).
T he Company has charged commission in respect of performance guarantee.
Details in respect of frauds reported by Auditors under sub-section (12) of Section 143 other than those which are reportable to the Central Government
During the financial year under review, no frauds were reported by the Auditors under Section 143(12) of the Act other than those which are reportable to the Central Government.
Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future
During the financial year under review, no orders were passed by any regulators, courts or tribunals which could impact the going concern status and the company's operations in future.
Change in the nature of business
There was no change in the nature of business during the financial year under review.
Subsidiaries, Joint Ventures or Associate Companies and Consolidated Financial Statements
A. PT Sari Burger Indonesia ('BK Indonesia')
T he Company holds 88.80% stake in BK Indonesia. It is the material subsidiary of the Company.
T K Indonesia is the national master franchise of the BURGER KING® brand in Indonesia. It has exclusive rights to develop, establish, own, operate and franchise Burger King® branded restaurants in Indonesia. As on March 31, 2023, BK Indonesia has 176 restaurants.
T K Indonesia generated revenue of '6,027.61 million during the financial year 2022-23, increase of 10.28% from the financial year 2021-22. BK Indonesia incurred a loss of '1,596.30 million during the financial year 2022-23.
B. PT Sari Chicken Indonesia
TT Sari Chicken Indonesia is a wholly owned subsidiary of BK Indonesia, subsidiary of the Company. PT Sari Chicken Indonesia, has acquired exclusive master franchise and development rights in Indonesia to develop, establish, own, operate, and to grant franchises, of POPEYES® restaurants in July 2022.
TT Sari Chicken Indonesia launched the iconic US Fried Chicken brand Popeyes® restaurant in Indonesia in the month of December 31,2022. As on March 31,2023, it has 10 restaurants.
Topeyes® brand was founded in New Orleans in 1972, Popeyes® has more than 50 years of history and culinary tradition. Popeyes® distinguishes itself with a unique New Orleans style menu featuring spicy chicken, chicken tenders, fried shrimp, and other regional items. The chain's passion for its Louisiana heritage and flavourful authentic food has allowed Popeyes® to become one of the world's largest chicken quick service restaurants with over 3,900 restaurants in the U.S. and around the world.
TT Sari Chicken Indonesia generated revenue of '118.65 million during the financial year 2022-23. It incurred a loss of '89.35 million during the financial year 2022-23.
The consolidated financial statement is also being presented in addition to the standalone financial statements of the Company in this Annual Report.
Further, there were no other companies which has/ have become/ ceased to become a Subsidiary/ Joint Ventures/ Associate Companies during financial year 2022-23.
Corporate Social Responsibility Policy
The Corporate Social Responsibility Policy of the Company can be accessed on the website of the Company at https:// www. burgerking.in/investor-relations.
Employee Stock Option Scheme
The Company had implemented the BK Employee Stock Option Scheme 2015 ('ESOS 2015' / 'Scheme'). The objective of the ESOS 2015 is to attract and retain talent by way of rewarding their association and performance and to motivate them to contribute to the overall corporate growth and profitability.
The ESOS 2015 was originally approved by the Board of Directors on September 21, 2015 and the shareholders (being a private company at that time) vide an ordinary resolution passed on September 21, 2015. Options were granted from time to time thereafter. Subsequently, the ESOS 2015 was amended basis applicable laws vide shareholders' resolutions dated April 25, 2018, June 28, 2019, October 23, 2019 and November 13, 2020.
The ESOS 2015 being a pre IPO Scheme was also ratified by the shareholders of the Company subsequent to the IPO of the Company by passing a special resolution on January 28, 2021.
The ESOS 2015 was further amended pursuant to the approval of the Nomination and Remuneration Committee vide its resolution dated March 25, 2022 and Board of Directors resolution dated March 29, 2022 to align the ESOS 2015 with provisions made under the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021('SEBI (SBEB and SE) Regulations'). The current ESOS 2015 envisages grant not exceeding a total number of 15,226,900 options to the eligible employees which includes options which were already granted and options which have been exercised in the past. The ESOS 2015 contemplates a statutory minimum vesting period of one year to maximum of five years. After vesting of options, the employees earn a right (but not an obligation) to exercise the vested options on or after the vesting date within the maximum exercise period of three years with a flexibility for shorter exercise periods in case of termination of employees or for reasons including resignation, retirement or death.
Upon exercise of one vested option, the employees can obtain one equity share of the Company subject to the payment of exercise price and satisfaction of any tax obligation arising
thereon. Equity shares allotted by the Company under the ESOS 2015 shall rank pari passu in all respects with the existing fully paid equity shares.
The Nomination and Remuneration Committee administers the ESOS 2015 and acts as the compensation committee as envisaged under the SEBI (SBEB and SE) Regulations.
The disclosure pertaining to stock options granted by the Company under the aforesaid Scheme and as required under the applicable provisions of the Act and the SEBI (SBEB and SE) Regulations is uploaded on the website at https://www. burgerking.in/financials.
A certificate from the Secretarial Auditors of the Company, confirming that the aforesaid Scheme has been implemented in accordance with the SEBI (SBEB and SE) Regulations will be open for inspection at the ensuing 10th Annual General Meeting.
HUMAN RESOURCES
As of March 31, 2023, the number of employees increased to 8,712 as compared to 7,784 as of March 31, 2022 due to the business expansions carried out by the Company and increase in number of restaurants.
The Company's focus is on making efficient and effective use of its human talent to achieve its organizational goals. The human resource team carries out various activities to ensure smooth operations and create an overall positive work environment for all its employees. Periodic employee pulse surveys are conducted in order to understand employee satisfaction levels and gather feedback from its employees, in order to identify areas for improvement and take necessary actions. The Company regards human resource as its most valuable asset. The Company undertakes training and development programs at regular intervals to encourage a performance driven culture among its employees. The Company has been recruiting and selecting qualified individuals for diverse roles at its restaurants and Restaurant Support Centre's (Corporate). Various recognition programs and incentive schemes were introduced to recognize and reward excellent performances and motivate employee's contribution towards the organization. By partnering with a mental health organization - Trijog, the Company has launched a dedicated mental health hotline, providing access to qualified psychologists, confidential support and other resources to its employees. Going forward, the Company's ambition is to have a highly engaged workforce, with less attrition and more focus on the employee's satisfaction, growth and development.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as “Annexure I” to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report.
In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Financial Statements are being sent to the shareholders excluding the aforesaid information. Any shareholder interested in obtaining copy of the aforesaid information, may send an email to the Company Secretary and Compliance Officer at investor@burgerking.in.
AUDITORS Statutory Auditors
M/s. S R B C & CO LLP, Chartered Accountants, (Firm Registration No. 324982E/E300003) were appointed as the statutory auditors of the Company for a second term of 5 years by the Members at the Annual General Meeting ('AGM') held on August 29, 2019.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. Also, no fraud has been reported by the auditor as per Section 143(12) of the Act.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Mehta and Mehta, Company Secretaries as the Secretarial Auditors for conducting the secretarial audit for the financial year 2022-23.
In terms of the provisions of sub-section (1) of Section 204 of the Act, the Secretarial Audit Report given by the Secretarial auditor in Form MR-3 is annexed as “Annexure II” of the Director's Report. The Secretarial Audit report does not contain any qualifications, reservation or adverse remarks.
Internal Auditor
The Company had appointed M/s PKF Sridhar & Santhanam LLP as the internal auditor of the Company for the financial year 2022-23 as per the requirements of the Act.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, your Directors, to the best of their knowledge and belief and according to information and explanation obtained by them, confirm that:
1. I n the preparation of the annual financial statements for the financial year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation related to material departures;
2. T hey have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended March 31,2023 and of the loss of the Company for the same period;
3. T hey have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. T hey have prepared the annual financial statements on a going concern basis;
5. T hey have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively; and
6. T hey have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.
CORPORATE GOVERNANCE AND STATEMENT ON COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with the corporate governance requirements under the Act, and as stipulated under the SEBI Listing Regulations. A separate report on corporate governance under the SEBI Listing Regulations, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of Board of Directors and General Meetings.
MANAGEMENT DISCUSSION & ANALYSIS
Management Discussion and Analysis is annexed and forms part of this Annual Report.
DIVIDEND DISTRIBUTION POLICY
The dividend distribution policy of the Company is enclosed as “Annexure III” to the Director's Report and also available on the Company's website at www.burgerking.in.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT ('BRSR')
Pursuant to Regulation 34 of the SEBI Listing Regulations, BRSR forms part of this Annual Report, which describes the initiatives taken by the Company from an environmental, social and governance perspective.
OTHER DISCLOSURES
During the financial year under review:
1. T he Whole-time Director did not receive any remuneration or commission from the holding company and any of the subsidiaries of the Company.
2. T o disclosure or reporting is required in respect of the following items as there were no transactions /events on these items:
a. I ssue of equity shares with differential rights as to dividend, voting or otherwise;
b. Issue of sweat equity shares; and
c. Buyback of shares.
3. T here was no revision of financial statements and Directors' Report of the Company.
4. T o application has been made under the Insolvency and Bankruptcy Code. The requirement to disclose the details
of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) along with their status as at the end of the financial year is not applicable.
5. The requirement to disclose the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
ACKNOWLEDGEMENTS AND APPRECIATION
The Directors wish to convey their appreciation to all of the Company's employees for their enormous personal efforts as well as their collective contribution to the Company's performance. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, government, business associates for the continuous support given by them to the Company and their confidence in its management.
For and on behalf of the Board of Directors For Restaurant Brands Asia Limited (Formerly known as Burger King India Limited]
Shivakumar Dega Rajeev Varman
Chairman & Whole-time Director &
Independent Director Group CEO
DIN:00364444 DIN:03576356
Place: Mumbai Date: May 17, 2023
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