Terms/ rights attached to equity shares
The Company has a single class of equity shares having par value of ' 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
Terms related to dividend
The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
Notes:
(i) As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
(ii) A here were no equity shares issued as bonus and shares bought back during the period of five years immediately preceding the reporting date.
C. Issue of shares under QIP
I n the previous year March 31, 2022, the Company issued 108,480,018 fully paid up equity shares to Qualified Institutional Buyers in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. These shares were issued at a price of ' 129.25 per share (including securities premium of ' 119.25 per share) for an aggregate consideration of ' 14,021.04 million.
Nature of reserve:
1. S ecurities premium: Securities premium represents premium received on shares. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013.
2. S hare based payment reserve: Share based payment reserve represents the grant date fair value of options issued to employees under employee stock plan.
3. S etained earnings: Retained earnings are the losses that the Company has made till date, less any transfers to general reserve, dividends, or other distributions paid to the shareholders. Retained earning is a free reserve available to the Company.
4. S hare application pending allotment: Share application pending allotment represents the amount received on the share application on which allotment is not yet made.
The Company also had non-cash additions (net off remeasurements) to Rights-of-use assets of ' 3,255.11 million for March 31, 2023 (March 31, 2022: ' 1,620.03 million) (Refer Note 4)
The Company also had non-cash additions (net off remeasurements) to lease liabilities of ' 3,050.52 million for March 31, 2023 (March 31, 2022: ' 1,534.56 million)
Difference between ROU assets and lease liabilities pertaining to new leases recorded on initial recognition represents initial direct costs and deferred component of Security deposits given to lessors.
Practical expedient as per Ind AS 116 availed by the Company
(i) Short term leases or leases of low value assets
T he Company applies the short-term lease recognition exemption to its short-term leases of restaurant and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option).
(ii) Lease concessions
Ts per MCA notification dated 24th July 2020 and subsequently amended on June 18, 2021 in respect of Ind AS 116, a lessee may apply practical expedient and elect not to assess whether a rent concession is a lease modification if specified criteria are met. It applies to only those rent concessions occurring as a direct consequence of the COVID-19 pandemic and if all the following conditions are met:
(a) t he change in lease payments is substantially the same or less than the lease payments immediately preceding the change;
(b) any reduction in lease payments affects only the payments originally due on or before the June 30, 2022; and
(c) t here is no substantive change to other terms and conditions of the lease.
The Company has disclosed the application of the practical expedient and the amount recognised in the statement of profit or loss for the reporting period to reflect changes in lease payments that arise from rent concessions.
NOTE 32: EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the loss for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the loss attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
(b) Defined Benefit Plans
(i) Gratuity :
G ratuity liability is a defined benefit scheme. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member's length of service and salary at retirement age. The gratuity liability is unfunded.
The cost of providing benefits under this plan is determined on the basis of an actuarial valuation done.
(i) T he actuarial valuation of the defined benefit obligation were carried out at March 31, 2023. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
(ii) T iscount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.
(iii) T he salary escalation rate is arrived after taking into consideration the seniority, the industry practice, the promotion and other relevant factors, such as, demand and supply in employment market.
(iv) T he weighted average duration of the defined benefit plan obligation at March 31, 2023 is 09 years (March 31,2022: 11 years).
(i) D uring the 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 410,000 million (equivalent to ' 2,251.31 million) and USD 0.28 million (equivalent to ' 22.99 million) to secure PT Sari Burger Indonesia's liabilities towards the aforesaid banks. The outstanding borrowings in books of PT Sari Burger 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.
(ii) The 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 PT Sari Burger 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 PT Sari Burger Indonesia to BK Asia Pac as on March 31, 2023 is ' 22.47 million (March 31, 2022: ' 20.28 million).
D 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 1,253,656 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 PT Sari Burger 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).
The Company has charged commission in respect of performance guarantee.
(c) Dhe Company has granted options to the employees of its subsidiary company PT Sari Burger Indonesia and the related expense amounting to ' 4.10 million (March 31 2022: ' NIL) has been charged to the respective subsidiary company
T he Company provides share-based payment schemes to its senior executives for their association and performance as well as to motivate them to contribute to the growth and profitability of the Company.
T n September 21, 2015, the shareholders approved the Equity Settled BK Employee Stock Option Scheme 2015' ("ESOS 2015"). ESOS 2015 has been amended vide shareholder's resolutions dates April 25, 2018, June 28, 2019, October 23, 2019 and November 13, 2020 respectively and board resolution dated March 29, 2022.
T he ESOS 2015 was amended to increase the exercise period from 12 months to 24 months for the options vesting on the completion of the Initial Public Offer of the Company vide shareholders' resolution dated November 12, 2020.
T he ESOS 2015 was further amended on 24 November 2022 vide approval granted by Nomination and Remuneration Committee to increase the exercise period from 24 months to 36 months for the options vesting on the IPO and from 12 months to 24 months for the options vesting on 3 years from grant date.
T he Company has granted options to the employees of its subsidiary company PT Sari Burger Indonesia and the related expense amounting to ' 4.10 million (March 31 2022: ' NIL) has been charged to the respective subsidiary company.
b. Contingent Liabilities
(i) D uring the 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 410,000 million (equivalent to ' 2,251.31 million) and USD 0.28 million (equivalent to ' 22.99 million) to secure PT Sari Burger Indonesia's liabilities towards the aforesaid banks. The outstanding borrowings in books of PT Sari Burger 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.
(ii) D 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 PT Sari Burger 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 PT Sari Burger Indonesia to BK Asia Pac as on March 31, 2023 is ' 22.47 million (March 31, 2022: ' 20.28 million).
P 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 1,253,656 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 PT Sari Burger 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).
The Company has charged commission in respect of performance guarantee.
(iii) Phe Company believes that there is no impact of retrospective applicability of the Supreme Court (SC) judgement on definition of basic wages for PF contributions. The Company has complied with the Supreme Court (SC) judgement on prospective basis.
NOTE 37 : SEGMENT REPORTING
The Group Chief Executive Officer (CEO) of the Company has been identified as Chief Operating Decision Maker ("CODM") of the Company who evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by reportable segments. CODM reviews the entire operating results of the business as a whole for the purpose of making decisions about resource allocation and performance assessment and therefore, the Company believes that there is single reportable segment i.e. " Restaurants and Management". Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statement.
The Company operates only in India and hence all assets belonging to reportable segment are located in India. The Company doesn't have any individual customer who is contributing more than 10% of revenue.
NOTE 38 : FAIR VALUES OF FINANCIAL INSTRUMENTS
The fair values of financial instruments is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm's length transaction, other than in a forced or liquidation sale.
a. Fair value hierarchy
Phe Company categories fair value measurements using a fair value hierarchy that is dependent on the valuation inputs
used as follows:
- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
NOTE 39 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk and foreign currency risk. The following sections provide details regarding the Company's exposure to the financial risks and the objectives, policies and processes of the management for these risks.
(a) Credit risk
C redit risk is the risk of loss that may arise on the outstanding financial instruments should a counterparty default on its obligations. The Company's exposure to credit risk arises primarily from deposits with landlords for store properties taken on leases, trade and other receivables, investment in mutual funds and balances with banks and non banking financial institutions. There is no significant concentration of credit risk. For Investment in mutual funds, cash and bank balances and inter corporate deposit the Company minimises credit risk by dealing with high credit rating parties.
- Pevel 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Pevel 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
Pair value measurements that use inputs of different hierarchy levels are categorised in its entirety in the same level of
the fair value hierarchy as the lowest level input that is significant to the entire measurement.
Security deposits, Trade and other receivables:
T he Company's business is predominantly retail in nature on 'cash and carry' basis which is largely through cash and credit card collections. The credit risk on such credit card collections is minimal, since they are primarily owned by customers' card issuing banks. The Company also carries credit risk on lease deposits with landlords for store properties taken on leases, for which agreements are signed and property possessions timely taken for store operations. The risk relating to refunds after store shut down is managed through successful negotiations or appropriate legal actions, where necessary.
The company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets. No allowance for collective impairment was made based on past experience. (Refer Note 7 and 10)
Financial instruments and Cash deposits:
T redit risk from balances with banks and financial institutions is managed in accordance with the Company's policy. Investments of surplus funds in mutual funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments. (Refer Note 6 - Current investments, 7 and 14)
Credit risk concentration:
The Company's revenue is principally settled on cash terms or through credit cards, thus there are no significant past due balances in the Company's trade receivables. The Company's customers are walk-in whose individual annual expenditure at the Company's establishments does not constitute a substantial percentage relative to the company's revenue.
T ther financial assets consist mainly of deposits placed with various well-established and reputable lessors for lease of retail space and credit risk is not concentrated.
The Company's maximum exposure to credit risk for the components of the balance sheet is the carrying amount as provided in Note no 6 - Current investments, 7, 10 to 14.
(b) Liquidity risk
L iquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company monitor its liquidity risk and maintains a level of cash and cash equivalents deemed adequate bymanagement to finance the Company's operations and to mitigate the effects of fluctuations in cash flows. Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses including the servicing of financial obligations. The Company's operations are financed through internally generated funds, external borrowings and issue of shares. During the year ended March 31,2022, the Company raised ' 14,021.04 million through issue of shares to Qualified Institutional buyers.
(c) Foreign Currency risk
Foreign Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee.
NOTE 42: GOING CONCERN
NOTE 41: CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company.
The primary objective of the Company's capital management is to ensure it maintains sufficient cash in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended March 31, 2023. The Company does not have outstanding debt as at the end of the year.
During the year ended March 31,2023, the Company has incurred total comprehensive loss of ' 721.60 million (March 31,2022: ' 936.23 million). The accounts of the Company for the respective years have been prepared on the basis of going concern, as the management is confident that the performance of the Company will improve in the upcoming years. The Company has a positive net worth of ' 18,945.50 million as at March 31, 2023 (March 31, 2022 : ' 19,503.04 million). The Company is therefore considered as a going concern and accordingly, the financial statements have been prepared based on going concern assumption.
NOTE 43: COVID-19
There is no impact of COVID-19 pandemic on the business operations and the standalone financial results of the Company for the year ended March 31, 2023, however it had a significant impact on the business operations and the standalone financial results of the Company for the year ended March 31, 2022. The Company had assessed the impact of this pandemic on its business operations and considered all relevant internal and external information available up to the date of approval of these standalone financial results, in determination of the recoverability and carrying value of financial assets and non-financial assets.
NOTE 44: CODE OF SOCIAL SECURITY
The Code of Social Security 2020 ('Code') relating to employee benefits during employment and post-employment 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 and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period in which the Code becomes effective.
NOTE 45: CORPORATE SOCIAL RESPONSIBILITY ("CSR")
The provisions of Section 135 of the Companies Act 2013 are not applicable to the Company since the Company is a loss making Company and does not meet the applicability criteria as defined in the aforesaid section.
NOTE 46: OTHER STATUTORY INFORMATION
b) D uring the year ended March 31, 2022, the Company issued 108,480,018 fully paid up equity shares to Qualified Institutional Buyers in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. These shares were issued at a price of ' 129.25 per share (including securities premium of ' 119.25 per share) for an aggregate consideration of ' 14,021.04 million.
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company does not have any transactions with companies struck off u/s 248 of the Companies Act, 2013.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31, 2023.
(v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding whether recorded in writing or otherwise that the Company shall:
(a) T irectly 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies) (outside the group), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) T irectly 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
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vii) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of accounts, in the tax assessments under the Income Tax Act, 1961 as income during the year.
NOTE 47: ELECTRONIC BACKUP
The Company has a defined process to take daily back-up of books of account maintained electronically in a server maintained in India which is in compliance with the relevant provisions of the Companies (Accounts) Rules, 2014 (as amended). In the case of back up server of Microsoft Dynamics NAV, the Company has taken daily back-ups of books of account and maintained the logs of such back-ups for a period of 30 days. Considering the new regulations, the management is taking steps to configure systems to ensure that logs of daily back ups is available for the entire period to demonstrate compliance with the regulations.
NOTE 48: REGROUPINGS/RECLASSIFICATIONS
Previous year figures have been re-grouped/ re-classified wherever necessary, to confirm to current year's classification.
|