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A Oneindia Venture

Nifty 24,005.80 -1.82%

22k Gold ₹ 14,820 /gm

Sensex 77,566.16 -1.71%

Nifty 24,005.80 -1.82%

22k Gold ₹ 14,820 /gm

Sensex 77,566.16 -1.71%

Nifty 24,005.80 -1.82%

22k Gold ₹ 14,820 /gm

Directors Report of Sapphire Foods India Ltd.

Mar 31, 2025

Your directors are pleased to present the 16^th Annual Report on the business and operations of Sapphire Foods India Limited ("Companyâ) together with the audited financial statements for the financial year ended 31^st March 2025.

Financial Results and Performance

The financial statements of the Company have been prepared in accordance with the applicable provisions of Indian Accounting Standards ("Ind ASâ), Companies Act, 2013 and Rules made thereunder ("Companies Actâ), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulationsâ) and such other applicable rules, regulations, guidelines, etc., as amended from time to time.

The Company''s financial (standalone and consolidated) performance during the financial year ended 31^st March 2025 as compared to the previous financial year, is summarized below:

(''in Millions)
Particular	Standalone		Consolidated
Particular	F.Y. 2024 -25	F.Y. 2023-24	F.Y. 2024- 25	F.Y. 2023-24
Total Income	24,838.82	22,676.55	29,190.79	26,277.21
Less: Total Expenses	24,658.29	22,022.95	28,806.48	25,578.12
Profit/ (Loss) before tax	(27.86)	653.60	231.36	699.09
Less: Total tax expense/(credit)	35.34	145.92	64.32	179.53
Profit/ (Loss) after Tax	(63.20)	507.68	167.04	519.56
Total Comprehensive Income/(Loss) for the year, net of tax	(77.66)	494.97	207.75	568.38

During the year under review, the total income of your Company was '' 24,838.82 million on a standalone basis and ''29,190.79 million on a consolidated basis as compared to the previous financial year total income of '' 22,676.55 million on a standalone basis and '' 26,277.21 million on a consolidated basis. The net loss for the year under review after total tax expense stood at ''63.20 million on a standalone basis, whereas, the net profit on a consolidated basis stood at ''167.04 million.

The Company has not transferred any amount to the general reserves. There was no change in the nature of the business of the Company during the year under review.

Business Operations and State of Company''s Affairs

Sapphire Foods India Limited, directly and through its'' subsidiaries, is one of the largest franchisees of Yum! Brands Inc. in Indian sub-continent with a track record of successfully operating 963 Restaurants of KFC, Pizza Hut and Taco Bell across India and Sri Lanka.

For complete detail on Business Operations and State of Company''s Affairs, please refer to the section of ''Management Discussion and Analysis Report'' which forms an integral part of this Annual Report.

Dividend

During the financial year under review, your directors have not recommended any dividend to the shareholders of the Company.

The Board of Directors of your Company has adopted Dividend Distribution Policy based on the parameters as specified under Listing Regulations. The Policy can be accessed from the website of the Company at https:// www.sapphirefoods.in/investors-relation/corporate-governance.

The Company has not transferred any amount to the Investor Education & Protection Fund (IEPF) and no amount is lying in Unpaid Dividend Account of the Company.

Subsidiaries, Joint Venture and Associate Companies

As at the close of the financial year 31^st March 2025, your Company has two wholly-owned subsidiary companies viz., Gamma Pizzakraft Lanka (Private) Limited, Sri Lanka & French Restaurants (Private) Limited, Sri Lanka and one subsidiary / joint venture viz., Gamma Island Food Private Limited, Maldives.

Apart from the above, no other company has become or ceased to be a subsidiary, joint venture or associate of the Company during the financial year under review.

In pursuance of Section 136 of the Companies Act, the annual report of the Company containing its standalone and consolidated financial statements has been uploaded on the website of the company. Further, financials of the subsidiaries, are available on the website of the Company at https://www.sapphirefoods.in/investors-relation/annual-reports.

The highlights of performance and financial position of each of the subsidiary company for the financial year ended 31^st March 2025, are provided in form AOC-1, in accordance with the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014. The form AOC-1 is enclosed with the Consolidated Financial Statements and forms an integral part of this Annual Report.

Your Company, in accordance with the Listing Regulations, has formulated and adopted the policy for determining material subsidiaries. The said policy is available on the website of the Company at https://www.sapphirefoods. in/investors-relation/corporate-governance.

Share Capital

Sub-Division/ Split of Equity Shares

During the financial year under review, the Board of Directors at their meeting held on 19^th June 2024, has approved the sub-division/ split of the existing equity shares of the Company from 1 (One) equity share having face value of '' 10/- (Rupees Ten) each fully paid up, into 5 (Five) equity shares having face value of '' 2/- (Rupees Two) each fully paid-up. Consequently, the shareholders of the Company at their 15^th Annual General Meeting held on 9^thAugust 2024 approved the said sub-division/ split of equity shares. Following necessary approvals from the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited and the Depositories i.e. National Securities Depository Limited and Central Depository Services (India) Limited, new ISIN (INE806T01020) was allotted to the Company. The change in face value of the Equity shares of the Company were reflected on the share price on the Stock Exchanges with effect from the Record Date i.e. 5^thSeptember 2024.

Authorised Share Capital

Consequent to the sub-division/ split of equity shares of the Company, the authorised share capital of the Company was altered and stands at '' 467,01,20,000 divided into 233,50,60,000 Equity shares of face value '' 2 each.

Issued, Subscribed and Paid-up Share Capital

As on 31^st March 2025, the issued, subscribed and paid-up capital of the Company stands at '' 64,23,81,788 comprising of 32,11,90,894 equity shares of face value of '' 2 each.

During the year under review, your Company had issued and allotted 26,68,814 equity shares to its eligible employees pursuant to the exercise of stock options under Employee Stock Option Schemes.

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Employee Stock Option Plan / Schemes

With a view to attract, reward and retain talented and key employees in the competitive environment and encourage them to align their individual performance with Company objectives, your Company has implemented Sapphire Foods Employees Stock Option Plan 2017 ("ESOP Planâ) which was originally approved by the Board of Directors and the Shareholders of the Company on 24^th May 2018 and 30^th May 2018 respectively and subsequently ratified by the shareholders of the Company post IPO. Sapphire Foods Employees Stock Option Scheme 2019 - Scheme

III - Management other than CEO ("Scheme IIIâ), Sapphire Foods Employees Stock Option Scheme 2019 - Scheme

IV - CEO ("Scheme IVâ), Sapphire Foods Employee Stock Option Scheme 2022 - Scheme IIIA - Management other than CEO ("Scheme IIIAâ) and Sapphire Foods Employee Stock Option Scheme 2022 - Scheme IVA - CEO ("Scheme IVAâ) (hereinafter collectively referred to as "ESOP Schemesâ) forms an integral part of the ESOP Plan. With a view to reward loyalty for past services with the Company, retention of critical employees and align employees'' interest with company''s performance and shareholder''s interest, the Company has granted, from time to time, stock options to the eligible employees under the said ESOP Plan / Schemes. During the year under review, there were no material changes in the Employee Stock Option Plan / Schemes (ESOPs) of the Company.

The Nomination and Remuneration Committee is entrusted with the responsibility of implementation and administration of the ESOP Plan / Schemes.

The details of ESOP are provided in the notes to accounts in the financial statements forming part of this Annual Report and the disclosures as mandated under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB & SE Regulationsâ) are made available on the website of the Company at https://www.sapphirefoods.in/investors-relation/Updates. Certificate from M/s. Alwyn Jay & Co. LLP, Secretarial Auditors of the Company, with respect to the implementation of ESOP Plan / Schemes in accordance with SEBI SBEB & SE Regulations shall be placed before the members at the ensuing Annual General Meeting of the Company.

The Company has not issued any sweat equity shares during the year under review and hence no information as per the provisions of the Companies Act and SEBI SBEB & SE Regulations is furnished thereto.

Credit Rating

As at the end of the financial year 31^st March 2025, longterm rating on the bank lines of your company is [ICRA]A (Stable) and the long term/short term unallocated limits is [ICRA]A (Stable) / [ICRA]A2 .

Deposits

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing details relating to deposits covered under Chapter V of the Companies Act or the details of deposits which are not in compliance with Chapter V of the Companies Act is not applicable.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the financial year under review, as prescribed under Listing Regulations, is presented as a separate section which forms an integral part of this Annual Report.

Report on Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. A separate report on Corporate Governance for the financial year ended 31^stMarch 2025 is appended to this report and forms an integral part of this Annual Report.

A certificate from Practicing Company Secretary confirming compliance with the conditions of Corporate Governance under Listing Regulations is also annexed to the report on Corporate Governance.

Environment, Social and Governance & Corporate Social Responsibility Practices

Environment, Social and Governance (ESG) has long been an integral to our journey and your company recognize it as a continuous path that requires a clear strategy and roadmap. As part of the ESG journey, your company is committed for integrating environmental, social, and governance (ESG) considerations into our business operations, guided by our four strategic pillars - Food, People, Planet and Governance. These pillars serve as the foundation for our ESG approach, emphasizing on sustainability, responsible practices, and long-term value creation for our stakeholders.

During the financial year under review, S&P Global Ratings had assigned ESG Score of 50 (Methodology Year: 2024) to the Company. Your Company was ranked No.1* QSR Brand in India for the second consecutive year and at 97^th percentile amongst QSR globally on Dow Jones Sustainability Index (DJSI).

The ESG Report for FY2025 is published alongside this Annual Report and can be accessed at httpsV/www sapphirefoods.in/investors-relation/annual-reports.

In accordance with the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, your Company has formed the CSR Committee (widely

known as CSR & ESG Committee) to monitor CSR & ESG activities of the Company. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Board of Directors has approved a CSR Policy for the Company which provides a broad framework with regard to implementation of CSR activities carried out by the Company in accordance with Schedule VII of the Act. The CSR Policy is available on the Company''s website at https://www.sapphirefoods.in/investors-relation/ corporate-governance.

The Business Responsibility and Sustainability Report ("BRSRâ) as mandated under Listing Regulations, detailing the various initiatives taken by your Company from the Environmental, Social and Governance perspective, forms part of this annual report and is appended hereinbelow. The Annual Report on CSR activities as prescribed under the Companies Act and Rules made thereunder is also annexed to this report.

Directors and Key Managerial Personnel

The Board of Directors is constituted in accordance with the provisions of the Companies Act and Listing Regulations and Articles of Association of the Company. The Company has received relevant disclosures and declarations from the Directors and none of them are disqualified from being appointed as Director in terms of Section 164(2) of the Companies Act and Listing Regulations.

Your Board consists of eminent personalities with considerable professional expertise and credentials in finance, law, accountancy, retail and other related skills and fields. Their wide experience and professional credentials help the Company with strategy formulation and its implementation, thereby enabling its growth objectives. This is detailed in the Corporate Governance Report which is annexed hereto.

As on 31^st March 2025, the composition of Board of Directors of your Company was as under:

Sr. No.	Name of Director		Designation	DIN
1.	Mr. Sunil Chandiramani		Chairman & Independent Director	00524035
2.	Mr. Sanjay Purohit		Whole Time Director & Group CEO	00117676
3.	Mr.	Sumeet Narang	Non-Executive Nominee Director	01874599
4.	Mr.	Vikram Agarwal	Non-Executive Nominee Director	03038370
5.	Mr.	Kabir Thakur	Non-Executive Nominee Director	08422362
6.	Mr.	Vinod Nambiar	Non-Executive Nominee Director	07290613
7.	Ms.	Anu Aggarwal	Independent Director	07301689
8.	Ms.	Deepa Wadhwa	Independent Director	07862942
9.	Mr.	Rohitt Mutthoo	Non- Executive Nominee Director	10386059

During the period under review, Mr. Norbert Fernandes (DIN: 06716549), Non-Executive Nominee Director had resigned from the Board of Directors of the Company effective from 28^th September 2024. Consequently, the Board of Directors at their meeting held on 28^th October 2024 based on the recommendation of Nomination and Remuneration Committee, had appointed Mr. Rohitt Mutthoo (DIN: 10386059) as an Additional Director in the capacity of Non- Executive Non-Independent Nominee Director which was regularized by the members of the Company through postal ballot dated 3^rd January 2025.

Further, as on the date of this report, Mr. Vikram Agarwal, Non-Executive Nominee Director has resigned from the Board of Directors of the Company effective from 28^th May 2025. Consequently, pursuant to the recommendation of Nomination and Remuneration Committee, Mr. Vijay Jain was appointed as an Additional Director, designated as Executive Director and Chief Financial Officer ("ED & CFOâ) by the Board of Directors on 28^th May 2025. The regularization of Mr. Vijay Jain as Executive Director and Chief Financial Officer shall be placed before the shareholders at the ensuing 16^th Annual General Meeting of the Company.

Except as stated above, there were no other changes in the Directorship of the Company.

Retirement by Rotation

In terms of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Kabir Thakur and Mr. Vinod Nambiar, Non-Executive Nominee Directors of the Company, retires by rotation and being eligible, offers themselves for re-appointment at the ensuing 16^thAnnual General Meeting of the Company.

The brief profile in terms of Regulation 36 of Listing Regulations and the Secretarial Standards on General Meetings (SS-2), in respect of the directors seeking appointment/re-appointment has been annexed to the notice of the 16^th Annual General Meeting.

Independent Directors

Mr. Sunil Chandiramani, Ms. Anu Aggarwal and Ms. Deepa Wadhwa were appointed as Independent Directors of the Company, effective 5^th August 2021, for a fixed term of five years from the date of their respective appointment/ regularization by the shareholders. Mr. Sunil Chandiramani has been designated as the Chairperson of the Board of Directors.

Code of Conduct of the Company and that they have registered themselves as an Independent Director in the data bank maintained with the Indian Institute of Corporate Affairs. The Independent Directors of the Company are not liable to retire by rotation.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of strategy, planning and execution, management and leadership, functional and managerial experience, legal and risk management, corporate governance systems and practices, finance, banking and accounts, retail, etc. and they hold highest standards of integrity and are independent of the management.

Key Managerial Personnel

Pursuant to the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following persons are the Key Managerial Personnel ("KMPâ) of your Company:

Name of the KMP	Designation
Mr. Sanjay Purohit	Whole Time Director & Group CEO
Mr. Vijay Jain	Executive Director & Chief Financial Officer
Mr. Sachin Dudam	Company Secretary & Compliance Officer

During the year under review, there has been no change in the Key Managerial Personnel of the Company.

Board Meetings

During the financial year 2024-25, five (5) meetings of the Board of Directors were convened and held. The meetings were held as per the business requirements and the maximum gap between any two Board Meetings is within the permissible limits as prescribed under the Companies Act and Listing Regulations.

The details of the composition of the board, meetings held during the year and the attendance of the directors at the Board Meetings, inter-alia, are provided at Report on Corporate Governance, forming part of this Report.

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on meetings of Board of Directors and General Meetings.

Board Committees

The Board of Directors of the Company has constituted the following Committees in order to effectively carry out some of the diverse functions of the Board:

â¢ Audit Committee

â¢ Nomination and Remuneration Committee

â¢ Stakeholders Relationship Committee

â¢ Risk Management Committee

â¢ CSR & ESG Committee

â¢ Operations Committee

The details of the composition of these committees of the Board, meetings held during the financial year, etc. are set out in the Report on Corporate Governance, forming part of this Report.

Board Evaluation

In accordance with the provisions of the Companies Act and Listing Regulations, the Board of Directors conduct formal evaluation, on annual basis, of its own performance and that of its committees and individual directors including chairperson. The Nomination and Remuneration Committee is mandated for formulating criteria for evaluation of performance of the Board of Directors and its Committees and Directors.

The details of board evaluation during the financial year under review are set out in the report on Corporate Governance, forming part of this Report.

Nomination and Remuneration Policy

In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations, the Board of Directors have formulated and adopted Nomination and Remuneration Policy for the Company, covering following objectives:

â¢ To lay down criteria and terms and conditions for identifying persons who are qualified to become Directors & KMPs and who may be appointed / reappointed in Senior Management of the Company.

â¢ To provide framework for remuneration of Directors and Employees and align with the Company''s business strategies, values, key priorities and goals.

â¢ To provide for rewards linked directly to the effort, performance and achievement of Company''s targets by the employees.

â¢ Formulating the criteria for performance evaluation of all Directors.

â¢ Succession Planning for Board and Senior Management.

â¢ Board Diversity.

The salient features of this policy have been disclosed in the Report of Corporate Governance, forming part of this Report. The Nomination and Remuneration Policy of the Company can be accessed on the website of the Company at https://www.sapphirefoods.in/investors-relation/corporate-governance.

Particulars of Employees

The disclosures pertaining to remuneration and other required information pursuant to Section 197(12) of the Companies Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of Directors, Key Managerial Personnel''s and Employees of the Company, is appended to this report and forms part of this Annual Report.

The disclosure pertaining to remuneration as required under provisions of Section 197(12) of the Companies Act read with 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 said information. Any shareholder interested in obtaining copy of the aforesaid information, may send an email to the Company Secretary and Compliance Officer at [email protected].

Auditors

Statutory Auditors

The second term of five years of M/s. S R B C & Co. LLP, Chartered Accountants will expire upon conclusion of the 16^th Annual General Meeting ("AGMâ) of the Company. The Board of Directors on the recommendation of the Audit Committee have considered and recommended the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 117365W) as the Statutory Auditors of the Company for term of five (5) consecutive years, commencing from conclusion of the ensuing 16^th Annual General Meeting till conclusion of 21^st Annual General Meeting of the Company, subject to approval of the shareholders of the Company at the ensuing 16^th Annual General Meeting of the Company.

The Company has received requisite disclosures from the proposed Statutory Auditors to the effect that their appointment, if made, shall be in compliance with the provisions of Section 139 and 141 of the Act. The proposed auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under Listing Regulations. Necessary resolution seeking approval of the members for the appointment of Statutory Auditors has been incorporated in the Notice of AGM convening the 16^th AGM.

The report given by the incumbent Statutory Auditors on the Financial Statements (Standalone and Consolidated) of the Company for the financial year ended 31^st March 2025 is annexed to the Financial Statements, forming an integral part of this Annual Report. The Auditors'' Report read together with Annexures referred to in the Auditors'' Report for the financial year ended 31^st March 2025 does not contain any qualification, reservation, adverse remark or disclaimers.

During the year under review, the Statutory Auditors have not reported any matter of fraud under Section 143(12) of the Companies Act.

Internal Auditors

The Company had appointed M/s. Protiviti India Member Private Limited, Chartered Accountants, as Internal Auditor Partner for carrying out the activities of Management Testing of Internal Financial Controls and Internal Audit of various business/ functions process for the financial year 31^st March 2025.

The Company had designated Mr. Balkrishna Chaturvedi as Internal Auditor of the Company, in compliance with the provisions of Section 138 of the Companies Act, 2013 and Rules framed thereunder.

Internal Audit Reports are reviewed by the Audit Committee of the Company at their meetings held during quarterly intervals. The Internal Auditor/Partner carry out their functions as per the scope of work assigned and place their reports at the meetings of the Audit Committee, during quarterly intervals.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors, has appointed M/s. Alwyn Jay & Co., Practicing Company Secretaries (Firm Registration No. P2010MH021500) as Secretarial Auditor for carrying out secretarial audit and requisite certifications as mandated under Companies Act and Listing Regulations.

The Secretarial Audit Report for the financial year ended 31^stMarch 2025 received from M/s. Alwyn Jay & Co., Secretarial Auditor of the Company is annexed to this report and forms an integral part of this Annual Report. The Report does not contain any qualifications, reservations, adverse remarks, disclaimers or reporting of fraud.

Further, as per recently amended Regulation 24A of Listing Regulations and based on the recommendation of the Audit Committee, the Board of Directors has approved appointment of M/s. Alwyn Jay & Co., Practicing Company Secretaries (Firm Registration No. P2010MH021500) as Secretarial Auditors of the Company for a period of five (5) consecutive years commencing from the financial year 2025-26 to hold office from the conclusion of 16^th

Annual General Meeting till conclusion of 21^st Annual General Meeting of the Company, subject to approval of the shareholders of the Company at the ensuing Annual General Meeting of the Company.

Cost Auditors

The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Companies Act, 2013 and Rules made thereunder.

Particulars of Investments, Loans, Guarantees and Securities

The full particulars of the loan, investments, guarantees and securities, in accordance with the applicable provisions of the Companies Act, 2013 and Listing Regulations made by your Company during the financial year 2024-25, has been furnished at the Notes to Accounts of the Financial Statements forming an integral part of this Annual Report.

Particular of Contracts or Arrangements with Related Parties

The Related Party Transactions are placed at the meetings of the Audit Committee for their respective approval. Prior omnibus approval of the Audit Committee is obtained by the Company on an annual basis for Related Party Transactions that are foreseeable and repetitive in nature. A detailed statement of such Related Party Transactions entered into pursuant to the omnibus approval so granted are placed at the meetings of the Audit Committee for their review on a quarterly basis. The half yearly statement on the Related Party Transactions are also filed with the respective stock exchanges on which the equity shares of the Company are listed.

The Related Party Transactions entered during the financial year under review were in the ordinary course of business and on arm''s length basis. There were no significant material related party transactions entered into by the Company with any related party during the financial year under review. Thus, the disclosure under Section 134 of the Companies Act, 2013 as per specified form AOC-2 is not applicable to the Company.

The details of Related Party Transactions as per Indian Accounting Standard - 24 (Ind AS 24) are given under Note 37 forming part of the Notes to Account of the Standalone Financial Statements to this Report.

Pursuant to the provisions of the Companies Act and Listing Regulations, your company has formulated a policy on Related Party Transactions for the purpose of identification and monitoring of such transactions, which is available on the website of the Company at https://www. sapphirefoods in/investors-relation/corporate-governance

Annual Return

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the copy of the Annual Return of the Company for the financial year ended 31^stMarch 2025 is placed at the Company''s Website and can be accessed at https://www.sapphirefoods.in/investors-relation/updates.

Risk Management Policy

Adequate Risk Management Framework is a necessity for the purpose of Risk Assessment and minimization/ mitigation of risks involved in business activity. The Company has laid down a robust risk management framework for identification and management of risks that could adversely affect the Company. The Company has formulated Risk Management Policy in order to achieve the following objectives, inter-alia:

â¢ To ensure that all the current and future material risk exposures of the Company are identified, assessed, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management.

â¢ To establish a framework for the company''s risk management process and to ensure its implementation.

â¢ To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.

â¢ To assure business growth with financial stability.

In terms of the provision of Regulation 21 of Listing Regulations, the Board of Directors has constituted a Risk Management Committee. The details with respect to its terms of reference, composition and meetings held during the part of the financial year under review are set out at the Report on Corporate Governance, annexed to this Report. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The Risk Management Policy is also available on the website of the Company at https://www.sapphirefoods.in/ investors-relation/corporate-governance. For more details on risk management framework, please refer to the section of ''Management Discussion and Analysis Report'' which forms an integral part of this Annual Report.

Vigil Mechanism

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior.

Your Company has adopted a Whistle Blower Policy to provide a mechanism for the employees, vendors and

suppliers to report genuine concerns about any unethical behavior, actual or suspected fraud or violation of your Company''s Code of Conduct.

The constituents concerned, including employees of the Company, are encouraged to voice their concerns internally and at a high level and to disclose information which the individual believes shows malpractice or impropriety. A designated email id whistleblowerasapphirefoods in has been created and disseminated through this policy/code to the concerned stakeholders to voice their grievances. The access of this designated email id is mapped and made available to the members of the Audit Committee including its Chairperson.

The provisions of this policy are in line with the provisions of Section 177 (9) of the Companies Act, 2013 and Regulation 22 of Listing Regulations. All cases registered under the whistle blower policy of the Company are subject to review by the Audit Committee. The Whistle Blower policy of the Company is available on the Company''s website at https:// www.sapphirefoods.in/investors-relation/corporate-governance.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Actâ), your Company has in place a policy on prevention, prohibition and redressal of sexual harassment at workplace. All employees (permanent, contractual, temporary, trainees) including at store level, are covered under this policy.

As per the rules made under the POSH Act, the Company has constituted an Internal Complaints Committee (ICC) to redress the complaints received pertaining to sexual harassment at workplace. The Committee meets, as and when required, to discuss various cases received and to address the same uniformly across the organization.

The details of the complaints received during the financial year 2024-25 are as follows:

Particulars	No. of
Particulars	Complaints
Complaints pending as on start of the financial year i.e. 1^st April 2024	2
Complaints received during the financial year under review	5
Complaints disposed off during the financial year under review	6
Complaints pending as on end of the financial year i.e. 31^st March 2025	1

An update on the aforesaid complaints received and disposed off are placed at the meetings of the Audit Committee during quarterly intervals.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The activities of the Company are not energy intensive as the Company is not engaged in any manufacturing activity. Further, no technology has been developed and / or imported by way of foreign collaboration.

For complete details, please refer to the section of ''Business Responsibility and Sustainability Report'' which forms an integral part of this Report. The particulars with regard to Foreign Exchange Earnings and Outgo are given in Standalone and Consolidated Financial Statements, forming part of this Annual Report.

Disclosure of Orders Passed by Regulators or Courts or Tribunal

During the financial year under review, there were no significant/ material orders passed by the Regulator, Courts, Tribunals, etc. which could have an impact on the going concern status and the Company''s operations in future.

Internal Financial Controls

Your Company has aligned its current systems of internal financial control with the requirement of the Companies Act, 2013. The Internal Control Framework is intended to increase transparency and accountability in an organization''s process of designing and implementing a system of internal control. Your Company has successfully laid down the framework and ensured its effectiveness. The internal controls are commensurate with the size of the Company and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies.

M/s. S R B C & Co LLP, Statutory Auditors of the Company have audited the financial statements included in this annual report and have issued an attestation report on our internal control over financial reporting (as defined in section 143 of Companies Act 2013).

The internal audit department along with the external partners/ consultants carry out internal audit of the

Company''s business/ functional activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with and approved by the audit committee. The audit committee reviews reports submitted by the internal auditor, internal audit partner and statutory auditor. Basis inputs received from the audit committee, suggestions for improvement are considered and the audit committee follows up on corrective action.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal auditor, statutory auditors and external partner/consultant, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year ended 31^st March 2025.

Director''s Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. they 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 as on 31^st March 2025 and of the profit/loss of the Company for that year;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts of the Company on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Material Changes and Commitments, if any, affecting Financial Position of the Company

Except as disclosed in this report, no material changes and commitments which could affect the Company''s financial position, have occurred between the end of the financial year of the Company and date of this report.

Acknowledgements and Appreciation

The Board places on record its appreciation for the support and co-operation, your company has been receiving from its various stakeholders including Customers, Suppliers, Business Partners and Associates, Financial Institutions, Regulatory Bodies and Central & State Governments.

Your Directors appreciate and value the contribution made by every member of the Sapphire Family.

Mar 31, 2024

The directors are pleased to present the 15^th Annual Report on the business and operations of Sapphire Foods India Limited ("Company") together with the audited financial statements for the financial year ended 31^st March 2024.

Financial Results and Performance

The financial statements of the Company have been prepared in accordance with the applicable provisions of Indian Accounting Standards ("Ind AS"), Companies Act, 2013 and Rules made thereunder ("Companies Act"), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and such other applicable rules, regulations, guidelines, etc., as amended from time to time.

The Company''s financial (standalone and consolidated) performance during the financial year ended 31^st March 2024 as compared to the previous financial year, is summarized below:

(Rs. in Million)
Particular	Standalone		Consolidated
Particular	F.Y. 2023-24	F.Y. 2022-23^A	F.Y. 2023-24	F.Y. 2022-23
Total Income	22,676.55	20,108.48	26,277.21	22,966.66
Less Total Expenses	22,022.95	19,097.33	25,578.12	21,882.42
Profit/ (Loss) before tax	653.60	1,011.15	699.09	1,084.24
Less: Total tax expense/(credit)	145.92	(1,252.66)	179.53	(1,247.67)
Profit/ (Loss) after Tax	507.68	2,263.81	519.56	2,331.91
Total Comprehensive Income/(Loss) for the year, net of tax	494.97	2,262.45	568.38	2,318.89

^Arestated pursuant to merger

During the year under review, the total income of your Company was '' 22,676.55 million on a standalone basis and '' 26,277.21 million on a consolidated basis as compared to the previous financial year total income of '' 20,108.48 million on a standalone basis and '' 22,966.66 million on a consolidated basis. The net profit/ (loss) for the year under review after total tax expense/ (credit) stood at '' 507.68 million on a standalone basis and '' 519.56 million on a consolidated basis.

The Company has not transferred any amount to the general reserves. There was no change in the nature of the business of the Company during the year under review.

Business Operations and State of Company''s Affairs

Sapphire Foods India Limited, directly and through its'' subsidiaries, is one of the largest franchisees of Yum! Brands Inc. in Indian sub-continent with a track record of successfully operating 872 Restaurants of KFC, Pizza Hut and Taco Bell across India, Sri Lanka and Maldives.

Dividend

During the financial year under review, your directors have not recommended any dividend to the shareholders of the Company.

The Company has not transferred any amount to the Investor Education & Protection Fund (IEPF) and no amount is lying in Unpaid Dividend Account of the Company.

Subsidiaries, Joint Venture and Associate Companies:

As at the ciose of the financiai year 31^st March 2024, your Company has two whoiiy-owned subsidiary companies viz., Gamma Pizzakraft Lanka (Private) Limited, Sri Lanka & French Restaurant Private Limited, Sri Lanka and one subsidiary / joint venture viz., Gamma Island Foods Private Limited, Maldives.

During the financial year under review, Gamma Pizzakraft (Overseas) Private Limited ("GPOPL"), whoiiy-owned subsidiary of Sapphire Foods India Limited ("Company") had subscribed for 81,914 Equity Shares of Gamma Isiand Foods Private Limited ("GIFPL"), subsidiary of GPOPL and then step-down subsidiary of the Company, for a totai consideration of up to MVR 18,840,220. Pursuant to this acquisition, the equity share holding of GPOPL in GIFPL increased from existing 51% up to 75%.

Further, pursuant to Scheme of Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited ("GPOPL") and Gamma Pizzakraft Private Limited ("GPPL") (hereinafter collectively to be referred as "Transferor Companies") with Sapphire Foods India Limited ("Company") sanctioned by Hon''bie National Company Law Tribunal (NCLT) vide order reference number C.P. (CAA)/312/MB-I/2023 dated 20^thMarch 2024, both the Transferor Companies ceased to be the subsidiaries of the Company effective from the close of business hours of 31^st March 2024.

Apart from the above, no other company has become or ceased to be a subsidiary, joint venture or associate of the Company during the financial year under review.

The highlights of performance and financial position of each of the subsidiary company for the financial year ended 31^st March 2024, is provided in form AOC-1, in accordance with the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014. The form AOC-1 is enclosed with the Consolidated Financial Statements and forms an integral part of this Annuai Report.

Your Company, in accordance with the Listing Regulations, has formuiated and adopted the poiicy for determining material subsidiaries. The said policy is available on the website of the Company at https://www.sapphirefoods. in/investors-reiation/corporate-governance.

The Company has obtained a certificate from M/s. S R B C & Co. LLP, Statutory Auditor, for financial year ended 31^stMarch 2024 certifying that the Company is in compliance with the Foreign Exchange Management (Non - Debt Instruments) Rules, 2019 read with Foreign Exchange Management (Mode of Payment and Reporting of NonDebt Instruments) Reguiations, 2019 with respect to Downstream Investment. The said certificate issued by the Statutory Auditor does not contain any observation and is free from qualifications.

Scheme of Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited and Gamma Pizzakraft Private Limited, wholly-owned subsidiaries with Sapphire Foods India Limited and their respective shareholders

the Companies Act and Listing Reguiations. The appointed date of the Scheme was 1^st Aprii 2022.

The merger application was jointly filed by the Company together with the Transferor Companies (i.e. GPPL and GPOPL) with Hon''bie NCLT, Mumbai on 5^th May 2022 and the same was admitted by the Hon''bie NCLT vide Order dated 4^th October 2023. Further, the merger petition jointiy fiied by the Company together with the Transferor Companies (i.e. GPPL and GPOPL) with Hon''bie NCLT, Mumbai was admitted vide Order dated 15^th December 2023. The Hon''bie NCLT, Mumbai approved the Scheme vide order reference number C.P (CAA)/312/MB-I/2023 dated 20^th March 2024 which was fiied with the Registrar of Companies at the ciose of business hours on 31^stMarch, 2024.

Share Capital Authorised Share Capital

Consequent to the Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited ("GPOPL") and Gamma Pizzakraft Private Limited ("GPPL") with Sapphire Foods India Limited ("Company"), the authorised share capitai of the Company increased from '' 4,31,68,20,000 comprising 43,16,82,000 Equity Shares of face vaiue of '' 10 each to '' 467,01,20,000 divided into 46,70,12,000 equity shares of '' 10 each.

Accordingiy, the Capitai Ciause of the Memorandum of Association of the Company was aitered and substituted with the new Ciause V to reflect the corresponding changes in the Authorised Share Capitai.

Issued, Subscribed and Paid-up Share Capital

As on 31^st March 2024, the issued, subscribed and paid-up capitai of the Company stands at '' 63,70,44,160 comprising of 6,37,04,416 equity shares of face vaiue of '' 10 each.

During the year under review, your Company had issued and aiiotted 1,61,875 equity shares to its eiigibie empioyees pursuant to the exercise of stock options under Empioyee Stock Option Schemes.

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Ruie 4(4) of the Companies (Share Capitai and Debenture) Ruies, 2014 is furnished.

Employee Stock Option Plan / Schemes

With a view to attract, reward and retain taiented and key empioyees in the competitive environment and encourage them to aiign their individuai performance with Company objectives, your Company has impiemented Sapphire Foods Empioyees Stock Option Pian 2017 ("ESOP Pian") which was originaiiy approved by the Board of Directors and the Sharehoiders of the Company on 24^th May 2018 and 30^th May 2018 respectiveiy and subsequentiy ratified by the sharehoiders of the Company post IPO. Sapphire Foods Empioyees Stock Option Scheme 2019 - Scheme

III - Management other than CEO ("Scheme III"), Sapphire Foods Empioyees Stock Option Scheme 2019 - Scheme

IV - CEO ("Scheme IV"), Sapphire Foods Empioyee Stock Option Scheme 2022 - Scheme IIIA - Management other than CEO ("Scheme IIIA") and Sapphire Foods Empioyee Stock Option Scheme 2022 - Scheme IVA - CEO ("Scheme IVA") (hereinafter coiiectiveiy referred to as "ESOP Schemes") forms an integrai part of the ESOP Pian. With a view to reward ioyaity for past services with the Company, retention of criticai empioyees and aiign empioyees'' interest with company''s performance and sharehoider''s interest, the Company has granted, from time to time, stock options to the eiigibie empioyees under the said ESOP Pian / Schemes. During the year under review, there were no materiai changes in the Empioyee Stock Option Pian / Schemes (ESOPs) of the Company.

The Nomination and Remuneration Committee is entrusted with the responsibiiity of impiementation and administration of the ESOP Pian / Schemes.

The detaiis of ESOP are provided in the notes to accounts in the financiai statements forming part of this Annuai Report and the disciosures as mandated under Securities and Exchange Board of India (Share Based Empioyee Benefits and Sweat Equity) Reguiations, 2021 ("SEBI SBEB & SE Reguiations") are made avaiiabie on the website of the Company at https://www.sapphirefoods.in/investors-reiation/updates. Certificate from M/s. Aiwyn Jay & Co., Secretariai Auditors of the Company, with respect to the impiementation of ESOP Pian / Schemes in accordance with SEBI SBEB & SE Reguiations shaii be piaced before the members at the ensuing Annuai Generai Meeting of the Company.

The Company has not issued any sweat equity shares during the year under review and hence no information as per the provisions of the Companies Act and SEBI SBEB & SE Reguiations is furnished thereto.

Credit Rating

As at the end of the financiai year 31^st March 2024, iong-term rating on the bank iines of your company is [ICRA]A (Stabie) and the iong term/short term unaiiocated iimits is [ICRA]A (Stabie) / [ICRA]A2 .

Deposits

The Company has not accepted or renewed any amount faiiing within the purview of provisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit) Ruies, 2014 during the year under review. Hence, the requirement for furnishing of detaiis reiating to deposits covered under Chapter V of the Companies Act or the detaiis of deposits which are not in compiiance with Chapter V of the Companies Act is not appiicabie.

Management Discussion and Analysis Report

The Management Discussion and Anaiysis Report for the financiai year under review, as prescribed under Listing

Reguiations, is presented as a separate section which forms an integrai part of this Annuai Report.

Report on Corporate Governance:

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. A separate report on Corporate Governance for the financiai year ended 31^stMarch 2024 is appended to this report and forms an integrai part of this annuai report.

A certificate from Practicing Company Secretary confirming the compiiance with the conditions of Corporate Governance under Listing Reguiations is aiso annexed to the report on Corporate Governance.

Environmental, Social and Governance & Corporate Social Responsibility Practices

Environmentai, Sociai and Governance (ESG) has iong been an integrai to our journey and your company recognize it as a continuous path that requires a ciear strategy and roadmap. As part of the ESG journey, your company is committed for integrating environmentai, sociai, and governance (ESG) considerations into our business operations, guided by our four strategic piiiars -Food, Peopie, Pianet and Governance. These piiiars serve as the foundation for our ESG approach, emphasizing on sustainabiiity, responsibie practices, and iong-term vaiue creation for our stakehoiders.

During the financiai year under review, S&P Giobai Ratings had assigned ESG Score of 42 (Methodoiogy Year: 2023) to the Company. Your Company is ranked No.1 QSR in India and at 95^th percentiie amongst QSR giobaiiy on Dow Jones Sustainabiiity Index (DJSI).

The ESG Report for FY2024 is pubiished aiongside this Annuai Report and can be accessed at https://www. sapphirefoods.in/investors-reiation/annuai-reports.

In accordance with the provisions of Section 135 of the Companies Act, 2013 and Ruies made thereunder, your Company has formed CSR & ESG Committee to monitor CSR & ESG activities of the Company. The detaiis of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Board of Directors has approved a CSR Poiicy for the Company which provides a broad framework with regard to impiementation of CSR activities carried out by the Company in accordance with Scheduie VII of the Act. The CSR Poiicy is avaiiabie on the Company''s website at https://www.sapphirefoods.in/investors-reiation/ corporate-governance.

The Business Responsibiiity and Sustainabiiity Report ("BRSR") as mandated under Listing Reguiations, detaiiing the various initiatives taken by your Company from the Environmentai, Sociai and Governance perspective, forms part of this annuai report and is appended hereinbeiow.

The Annual Report on CSR activities as prescribed under the Companies Act and Rules made thereunder is also annexed to this report.

Directors and Key Managerial Personnel

As of 31^st March 2024, the composition of Board of Directors of your Company was as under:

Sr. No.	Name of Director	Designation	DIN
1.	Mr. Sunil Chandiramani	Chairman & Independent Director	00524035
2.	Mr. Sanjay Purohit	Whole Time Director & Group CEO	00117676
3.	Mr. Sumeet Narang	Non-Executive Nominee Director	01874599
4.	Mr. Vikram Agarwal	Non-Executive Nominee Director	03038370
5.	Mr. Kabir Thakur	Non-Executive Nominee Director	08422362
6.	Mr. Vinod Nambiar	Non-Executive Nominee Director	07290613
7.	Ms. Anu Aggarwal	Independent Director	07301689
8.	Ms. Deepa Wadhwa	Independent Director	07862942
9.	Mr. Norbert	Non-Executive	06716549

During the period under review, Mr. Paul Robine (DIN: 07828525), Non-Executive Non-Independent Nominee Director resigned from the Board of Directors of the Company and consequently Mr. Norbert Fernandes ceased to be the Alternate Director to Mr. Paul Robine effective from 12^th May 2023.

Further, the Board of Directors at their meeting held on 12^thMay 2023 based on the recommendation of Nomination and Remuneration Committee had appointed Mr. Norbert Fernandes (DIN: 06716549) as an Additional Director in the capacity of Non-Executive Non-Independent Nominee Director which was regularized by the members at their

14^th Annual General Meeting of the Company held on 11^thAugust 2023.

During the financial year under review, except as stated above, there were no other changes in the Directorship of the Company.

Retirement by Rotation

In terms of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Vinod Nambiar and Mr. Norbert Fernandes, Non-Executive Nominee Directors of the Company, retires by rotation and being eligible, offers themselves for re-appointment at the ensuing 15^th Annual General Meeting of the Company.

Independent Directors

The Company has received declarations from the Independent Directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under applicable provisions of the Companies Act and Listing Regulations. The Independent Directors have also confirmed that they have complied with the Code of Conduct of the Company and that they have registered themselves as an Independent Director in the data bank maintained with the Indian Institute of Corporate Affairs. The Independent Directors of the Company are not liable to retire by rotation.

Key Managerial Personnel

Name of the KMP	Designation
Mr. Sanjay Purohit	Whole Time Director & Group
	CEO
Mr. Vijay Jain	Chief Financial Officer
Mr. Sachin Dudam	Company Secretary &
	Compliance Officer

During the year under review, there has been no change in the Key Managerial Personnel of the Company.

Board Meetings

During the financial year 2023-24, four (4) meetings of the Board of Directors were convened and held. The meetings were held as per the business requirements and the maximum gap between any two Board Meetings is within the permissible limits as prescribed under the Companies Act and Listing Regulations.

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on meetings of Board of Directors and General Meetings.

Board Committees

The Board of Directors of the Company has constituted the following Committees in order to effectively carry out some of the diverse functions of the Board:

â¢ Audit Committee

â¢ Nomination and Remuneration Committee

â¢ Stakeholders Relationship Committee

â¢ Risk Management Committee

â¢ CSR & ESG Committee

â¢ Operations Committee

â¢ IPO Committee (dissolved w.e.f. 2^nd November, 2023)

The details of the composition of these committees of the Board, meetings held during the financial year, etc. are set out in the Report on Corporate Governance, forming part of this Report.

Board Evaluation

Pursuant to determination of criteria by the Nomination and Remuneration Committee, the Company has carried out performance evaluation surveys for the Board of

Directors and its Committees, Individual Directors including Whole-time Director & Group CEO, Chairperson, etc. The evaluation surveys were circulated to the concerned board members through BoardPAC application. ALL the Directors actively participated in the evaluation surveys carried out by the Company.

The results along with feedback were shared with the Independent Directors at a duly convened meeting of the Independent Directors for their consideration. The Independent Directors, at their meeting held on 15^th March 2024, deliberated in detail on the performance evaluation of the Board of Directors (as a whole), its Committees and Non-Independent Directors including Whole-time Director and Chairperson, inter-alia. Thereafter, the feedback from the meeting of the Independent Directors and board evaLuation were presented to the Management and Board of Directors for their perusaL and impLementation thereof.

Nomination and Remuneration Policy

In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations, the Board of Directors have formulated and adopted Nomination and Remuneration PoLicy for the Company, covering foLLowing objectives:

â¢ To Lay down criteria and terms and conditions for identifying persons who are quaLified to become Directors & KMPs and who may be appointed / reappointed in Senior Management of the Company.

â¢ To provide framework for remuneration of Directors and Employees and align with the Company''s business strategies, vaLues, key priorities and goaLs.

â¢ To provide for rewards Linked directLy to the effort, performance and achievement of Company''s targets by the empLoyees.

â¢ FormuLating the criteria for performance evaLuation of aLL Directors

â¢ Succession PLanning for Board and Senior Management

â¢ Board Diversity

The saLient features of this poLicy have been discLosed in the Report of Corporate Governance, forming part of this Report. The Nomination and Remuneration Policy of the Company can be accessed on the website of the Company at https://www.sapphirefoods.in/investors-reLation/corporate-governance.

Particulars of Employees

The discLosures pertaining to remuneration and other required information pursuant to Section 197(12) of the Companies Act read with RuLe 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of Directors, Key Managerial PersonneL''s and EmpLoyees of the Company, is appended to this report and forms part of this AnnuaL Report.

Auditors Statutory Auditors

M/s. S R B C & Co. LLP, Chartered Accountants (Registration No. 324982E/E300003) were re-appointed as Statutory Auditors of the Company at Annual General Meeting held on 15^th October 2020, for a term of five consecutive years to hold office from the conclusion of 11^th Annual General Meeting (AGM) till the conclusion of 16^th Annual General Meeting of the Company. The auditors have confirmed that they are not disqualified from being re-appointed as Statutory Auditors of the Company and that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The report given by the Statutory Auditors on the Financial Statements (Standalone and Consolidated) of the Company for the financial year ended 31^st March 2024 is annexed to the Financial Statements, forming an integral part of this Annual Report. The Auditors'' Report read together with Annexures referred to in the Auditors'' Report for the financial year ended 31^st March 2024 does not contain any qualification, reservation, adverse remark or disclaimers. During the year under review, the Statutory Auditors have not reported any matter of fraud under Section 143(12) of the Companies Act.

Internal Auditors

The Company had designated Mr. Balkrishna Chaturvedi as Internal Auditor of the Company, in compliance with the provisions of Section 138 of the Companies Act, 2013 and Rules framed thereunder.

Internal Audit Reports are reviewed by the Audit Committee of the Company at their meetings held during quarterly intervals. Both internal auditors carry out their functions as per the scope of work assigned and place their reports at the meetings of the Audit Committee, during quarterly intervals.

Secretarial Auditors

The Secretarial Audit Report for the financial year ended 31^stMarch 2024 received from M/s. Alwyn Jay & Co., Secretarial Auditor of the Company is annexed to this report and forms an integral part of this Annual Report. The Report does not contain any qualifications, reservations, adverse remarks, disclaimers or reporting of fraud.

Cost Auditors

The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Companies Act, 2013 and Rules made thereunder.

Particulars of Investments, Loans, Guarantees and Securities:

The full particulars of the loan, investments, guarantees and securities, in accordance with the applicable provisions of the Companies Act, 2013 and Listing Regulations made by your Company during the financial year 2023-24, has been furnished at Note 5 to the Notes to Accounts of the Financial Statements forming an integral part of this Annual Report.

Particular of Contracts or Arrangements with Related Parties

The Related Party Transactions are placed at the meetings of the Audit Committee / Board of Directors for their respective approval. Prior omnibus approval of the Audit Committee is obtained by the Company on an annual basis for Related Party Transactions that are foreseeable and repetitive in nature. A detailed statement of such Related Party Transactions entered into pursuant to the omnibus approval so granted are placed at the meetings of the Audit Committee for their review on a quarterly basis. The half yearly statement on the Related Party Transactions are also filed with the respective stock exchanges on which the equity shares of the Company are listed.

Details of Related Party Transactions as per Indian Accounting Standard - 24 (Ind AS 24) are given under Note 36 forming part of the Notes to Account of the Standalone Financial Statements to this Report.

Annual Return

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the copy of the Annual Return of the Company for the financial year ended 31^stMarch 2024 is placed at the Company''s Website and can be accessed at https://www.sapphirefoods.in/investors-relation/updates.

Risk Management Policy

â¢ To establish a framework for the company''s risk management process and to ensure its implementation.

â¢ To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.

â¢ To assure business growth with financial stability.

Vigil Mechanism

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting

the highest standards of professionalism, honesty, integrity and ethical behavior.

Your Company has adopted a Whistle Blower Policy to provide a mechanism for the employees, vendors and suppliers to report genuine concerns about any unethical behavior, actual or suspected fraud or violation of your Company''s Code of Conduct.

The concerned constituents, including employees of the Company, are encouraged to voice their concerns internally and at a high level and to disclose information which the individual believes shows malpractice or impropriety. A designated email id [email protected] has been created and disseminated through this policy/code to the concerned stakeholders to voice their grievances. The access of this designated email id is mapped and made available to the members of the Audit Committee including its Chairperson.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), your Company has in place a policy on prevention, prohibition and redressal of sexual harassment at workplace. All employees (permanent, contractual, temporary, trainees) including at store level, are covered under this policy.

The details of the complaints received during the financial year 2023-24 are as follows:

Particulars		No. of Complaints
Complaints pending as on start of the financial year i.e. 1^st April 2023		0
Complaints received during the financial under review	year	7
Complaints disposed off during the financial under review	year	5
Complaints pending as on end of the financial year i.e. 31^st March 2024		2

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Material Changes and Commitments, if any, affecting Financial Position of the Company

An update on the aforesaid complaints received and disposed off are placed at the meetings of the Audit Committee during quarterly intervals.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Disclosure of Orders Passed by Regulators or Courts or Tribunal

The Company has not filed any application under Insolvency and Bankruptcy Code, 2016 as at the end of the financial year 31^st March 2024. However, during the financial year ended on 31^st March 2023, the Company had received copies of duly notarized petitions from two operational creditors ("lessors"), related to each other, for initiating the corporate insolvency resolution process against the Company at National Company Law Tribunal ("NCLT"), Mumbai. Prima facie, the said petitions appeared to have been filed before the NCLT, however, after verifying the records with NCLT, it was observed that no such petitions were filed with the NCLT.

Your company would like to clarify and state that the monetary demands raised by the operational creditors in the said petitions are unreasonable and inappropriate. The Company continues to monitor the status of the said petitions through its legal representatives and have not come across any filings of such petitions with NCLT as on the date of this report.

Internal Financial Controls

Your Company has aligned its current systems of internal financial control with the requirement of the Companies Act 2013. The Internal Control Framework is intended to increase transparency and accountability in an organization''s process of designing and implementing a system of internal control. Your Company has successfully laid down the framework and ensured its effectiveness. The internal controls are commensurate with the size of the Company and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial

and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies.

The internal audit department along with the external partners/ consultants carry out internal audit of the Company''s business/ functional activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with and approved by the audit committee. The audit committee reviews reports submitted by the internal auditor, internal audit partner and statutory auditor. Basis inputs received from the audit committee, suggestions for improvement are considered and the audit committee follows up on corrective action.

Director''s Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. they 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 as on 31^st March 2024 and of the profit/loss of the Company for that year;

d. they have prepared the annual accounts of the Company on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

Acknowledgements and Appreciation

Your Directors appreciate and value the contribution made by every member of the Sapphire Family

Mar 31, 2023

Your directors are pleased to present the 14^th Annual Report on the business and operations of Sapphire Foods India Limited ("Company") together with the audited financial statements for the financial year ended 31^st March 2023.

Financial Results and Performance

The Company''s financial (standalone and consolidated) performance during the financial year ended 31^st March 2023 as compared to the previous financial year, is summarised below:

(Rs. in Million)
Particulars	Standalone		Consolidated
Particulars	F.Y. 2022-23	F.Y. 2021-22	F.Y. 2022-23	F.Y. 2021-22
Total Income	19,917.17	14,322.47	22,966.66	17,595.50
Less: Total Expenses	18,909.23	14,074.40	21,882.42	17,081.65
Profit/ (Loss) before tax	1,007.94	248.07	1,084.24	513.85
Less: Total tax expense/(credit)	(1,252.66)	-	(1,247.67)	54.00
Profit/ (Loss) after Tax	2,260.60	248.07	2,331.91	459.85
Total Comprehensive Income/(Loss) for the year, net of tax	2,259.04	231.82	2,318.89	231.84

During the year under review, the total income of your Company was ''19,917.17 million on a standalone basis and ''22,966.66 million on a consolidated basis as compared to the previous financial year total income of ''14,322.47 million on a standalone basis and ''17,595.50 million on consolidated basis. The net profit/ (loss) for the year under review after total tax expense/ (credit) stood at ''2260.60 million on a standalone basis and ''2,331.91 million on a consolidated basis.

The Company has not transferred any amount to the general reserves. There was no change in the nature of the business of the Company during the year under review.

Business Operations and State of Company''s Affairs

Sapphire Foods India Limited, directly and through its'' subsidiaries, is one of the largest franchisees of Yum! Brands in Indian sub-continent with a track record of successfully operating 743 KFC, Pizza Hut and Taco Bell restaurants across India, Sri Lanka and Maldives. Your Company has delivered highest revenue, profitability and new restaurant additions for the financial year ended on 31^st March 2023.

Dividend

During the financial year under review, your Directors has not recommended any dividend to the Shareholders of the Company.

The Board of Directors of your Company has adopted Dividend Distribution Policy based on the parameters as specified under Listing Regulations. The Policy can be accessed from the website of the Company at https://www.sapphirefoods.in/investors-relation/corporate-governance.

Subsidiaries, Joint Venture and Associate Companies

As at the close of the financial year 31^st March 2023, your Company has one wholly-owned subsidiary company viz., Gamma Pizzakraft (Overseas) Private Limited, which in turn, has three wholly-owned subsidiaries viz., Gamma Pizzakraft Private Limited, India; Gamma Pizzakraft Lanka (Private) Limited, Sri Lanka & French Restaurant Private Limited, Sri Lanka and one subsidiary viz., Gamma Island Foods Private Limited, Maldives. Apart from the above, no other company has become or ceased to be subsidiary, joint venture or associate of the Company during the financial year under review.

Pursuant to the applicable provisions of Indian Accounting Standards ("Ind AS"), Companies Act, 2013 and Rules made thereunder ("Companies Act"), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and such other

applicable rules, regulations, guidelines, etc., the consolidated financial statements presented by the Company include financial information of the subsidiary companies, which forms part of this Annual Report. In pursuance of Section 136 of the Companies Act, the annual report of the Company containing its standalone and consolidated financial statements have been uploaded on the website of the company. Further, Financials of the subsidiaries, are available on the website of the Company at https://www.sapphirefoods.in/investors-relation/annual-reports.

The highlights of performance and financial position of each of the subsidiary company for the financial year ended 31^stMarch 2023, is provided in form AOC-1, in accordance with the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014. The form AOC-1 is enclosed with the Consolidated Financial Statements and forms an integral part of this Annual Report.

The Company has obtained a certificate from M/s. S R B C & Co. LLP, Statutory Auditor, for financial year ended 31^st March 2023 certifying that the Company is in compliance with the Foreign Exchange Management (Non - Debt Instruments) Rules, 2019 read with Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 with respect to Downstream Investment. The said certificate issued by the Statutory Auditor does not contain any observation and is free from qualifications.

The Board of Directors of your Company at their meeting held on 11^th February 2022, subject to requisite approvals/ consents, approved the Scheme of Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited ("GPOPL") and Gamma Pizzakraft Private Limited ("GPPL") with Sapphire Foods India Limited ("Company") and their respective shareholders ("Scheme") under the applicable provisions of the Companies Act and Listing Regulations. The appointed date of the Scheme is 1^st April 2022. Upon the Scheme becoming effective, all equity shares held by the Company in GPOPL and GPOPL in GPPL shall stand cancelled, without any further act or deed and no consideration shall be issued on merger.

The scheme application was filed and admitted with the National Company Law Tribunal (NCLT), Mumbai Bench on 5^th May 2022. The merger formalities is currently in progress.

Increase in Equity Stake of Gamma Island Food Private Limited, step-down subsidiary of Sapphire Foods India Limited ("Company") through Gamma Pizzakraft

(Overseas) Private Limited, wholly-owned subsidiary of the Company

During the year under review, the Board of Directors of Gamma Pizzakraft (Overseas) Private Limited ("GPOPL"), wholly-owned subsidiary of Sapphire Foods India Limited ("Company"), has considered and approved subscription of upto 81,914 Equity Shares of Gamma Island Food Private Limited ("GIFPL"), subsidiary of GPOPL and step-down subsidiary of the Company, for a total consideration of upto MVR 18,840,220 ("Proposed Acquisition"). Pursuant to this proposed acquisition, the equity share holding of GPOPL in GIFPL will be increased from the existing 51% up to 75%. The proposed acquisition will be completed on or before 30^th June, 2023.

Share Capital

Authorised Share Capital

During the financial year under review, there was no change in the authorised share capital of the Company. The authorised share capital of the company as on 31^st March 2023 amounted to ''4,31,68,20,000 comprising of 43,16,82,000 Equity Shares of face value of ''10 each.

Issued, Subscribed and Paid-up Share Capital

As on 31^st March 2023, the issued, subscribed and paid-up capital of the Company stands at ''63,54,25,410 comprising of 6,35,42,541 equity shares of face value of ''10 /- each.

Employee Stock Option Plan / Schemes

With a view to attract, reward and retain talented and key employees in the competitive environment and encourage them to align individual performance with Company objectives, the Company has implemented Sapphire Foods Employees Stock Option Plan 2017 ("ESOP Plan") which was originally approved by the Board of Directors and the Shareholders of the Company on 24^th May 2018 and 30^th May 2018 respectively. Sapphire Foods Employees Stock Option Scheme 2019 - Scheme III -Management other than CEO ("Scheme III"), Sapphire Foods Employees Stock Option Scheme 2019 - Scheme IV - CEO ("Scheme IV"), Sapphire Foods Employee Stock Option Scheme 2022 - Scheme IIIA - Management other than CEO ("Scheme IIIA") and Sapphire Foods Employee Stock Option Scheme 2022 - Scheme IVA - CEO ("Scheme IVA") (hereinafter collectively referred to as "ESOP Schemes") forms an integral part of the ESOP Plan. With a view to reward loyalty for past services with the Company, retention of critical employees and align employees'' interest with company''s performance and shareholder''s interest, the Company has granted, from time to time, stock options to the eligible employees under the said ESOP Plan / Schemes.

Subsequent to the Initial Public Offering ("IPO") of the Company in November 2021, the shareholders of the Company, pursuant to the approval and recommendation of the Nomination and

Remuneration Committee and Board of Directors at their respective meetings, has passed special resolutions by way of postal ballot on 8^th April 2022 for:

â¢ Ratification of Sapphire Foods Employees Stock Option Scheme 2019 - Scheme III - Management other than CEO and Sapphire Foods Employees Stock Option Scheme 2019 -Scheme IV - CEO read with Sapphire Foods Employees Stock Option Plan 2017;

â¢ Amendment of ESOP Plan to increase the quantum of options reserved under the ESOP Plan from 28,39,033 stock options to 43,33,889 stock options by creating additional 14,94,856 stock options convertible into equivalent number of equity shares of face value of ''10 each fully paid-up, upon exercise of vested options;

â¢ Approval and Institution of Sapphire Foods Employee Stock Option Scheme 2022 - Scheme IIIA - Management other than CEO read with Sapphire Foods Employees Stock Option Plan 2017;

â¢ Approval and Institution of Sapphire Foods Employee Stock Option Scheme 2022 - Scheme IVA - CEO read with Sapphire Foods Employees Stock Option Plan 2017;

â¢ Approval of grant of stock options to Whole-time Director & Group CEO exceeding 1% of the issued and paid-up capital of the Company.

The shareholders of the Company, further, at their 13^th Annual General Meeting held on 2^nd September 2022, pursuant to the recommendation of the Nomination and Remuneration Committee and Board of Directors at their respective meetings, has passed special resolutions for:

â¢ Ratification of Sapphire Food Employees Stock Option Scheme 2019 - Scheme III - Management other than CEO read with Sapphire Foods Employees Stock Option Plan 2017, for grant of options to the eligible employees of subsidiary companies.

â¢ Approval of grants under Sapphire Foods Employee Stock Option Scheme 2022 - Scheme III A - Management other than CEO read with Sapphire Foods Employee Stock Option Plan 2017 to the eligible employees / directors of the subsidiary company(ies) of the Company.

The Nomination and Remuneration Committee of the Board is entrusted with the responsibility of implementation and administration of the ESOP Plan / Schemes.

The details of ESOP are provided in the notes to accounts in the financial statements forming part of this Annual Report and the disclosures as mandated under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB & SE Regulations") are made available on the website of the Company at https://www. sapphirefoods.in/investors-relation/updates. Certificate from M/s. Alwyn Jay & Co. LLP, Secretarial Auditors of the Company,

with respect to the implementation of ESOP Plan / Schemes in accordance with SEBI SBEB & SE Regulations shall be placed before the members at the ensuing Annual General Meeting of the Company.

The Company has not issued any sweat equity shares during the year under review and hence no information as per the provisions of Companies Act and SEBI SBEB & SE Regulations is furnished thereto.

Credit Rating

As at the end of the financial year 31^st March 2023, long-term rating on the bank lines of your company is [ICRA]A (Stable) and the long term/short term unallocated limits is [ICRA]A (Stable) / [ICRA]A2 .

Deposits

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Companies Act or the details of deposits which are not in compliance with Chapter V of the Companies Act is not applicable.

Management Discussion and Analysis Report

Report on Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. A separate report on Corporate Governance for the financial year ended 31^st March 2023 is appended to this report and forms an integral part of this annual report.

A certificate from Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance under Listing Regulations is also annexed to the report on Corporate Governance.

Environment, Social and Governance & Corporate Social Responsibility Practices

Environment, Social and Governance (ESG) has long been an integral to our journey and your company recognise it as a continuous path that requires a clear strategy and roadmap. As part of the ESG journey, your company aim to reduce the carbon footprint of our value chain and to improve business resilience by managing the short and long-term risks and impacts of climate change. Your company also endeavor to have a diverse, equitable and inclusive workplace which makes us stronger and enables us to create a better shared future for employees and communities. The Company is committed for making a tangible difference in society through interventions across four strategic

pillars i.e., People, Planet, Food and Governance. The ESG Report for FY2023 is published along side this Annual Report and can be accessed at https://www.sapphirefoods.in/investors-relation/ annual-reports.

In accordance with the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, your Company has formed a Corporate Social Responsibility (CSR) Committee to monitor CSR activities of the Company. During the financial year 31^st March 2023, the scope of the existing CSR Committee was enhanced to accommodate the scope of ESG / BRSR framework and the Committee was renamed as "CSR & ESG Committee" of the Board of Directors. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Board of Directors has approved a CSR Policy for the Company which provides a broad framework with regard to implementation of CSR activities carried out by the Company in accordance with Schedule VII of the Act. The CSR Policy is available on the Company''s website at https://www. sapphirefoods.in/investors-relation/corporate-governance.

The Business Responsibility and Sustainability Report ("BRSR") as mandated under Listing Regulations, detailing the various initiatives taken by your Company from the Environmental, Social and Governance perspective, forms part of this annual report and is appended hereinbelow. The Annual Report on CSR activities as prescribed under the Companies Act and Rules made thereunder is also annexed to this report.

Directors and Key Managerial Personnel

The Board of Directors are constituted in accordance with the provisions of Companies Act and Listing Regulations and Articles of Association of the Company. The Company has received relevant disclosures and declarations from the Directors and none of them are disqualified from being appointed as Director in terms of Section 164(2) of the Companies Act and Listing Regulations.

Your Board consists of eminent personalities with considerable professional expertise and credentials in finance, law, accountancy and other related skills and fields. Their wide experience and professional credentials help the Company for strategy formulation and its implementation, thereby enabling its growth objectives. As at 31^st March 2023, the composition of Board of Directors of your Company was as under:

Sr. No.	Name of Director	Designation	DIN
1.	Mr. Sunil Chandiramani	Chairman & Independent Director	00524035
2.	Mr. Sanjay Purohit	Whole Time Director & Group CEO	00117676
3.	Mr. Sumeet Narang	Non-Executive Nominee Director	01874599
4.	Mr. Vikram Agarwal	Non-Executive Nominee Director	03038370

Sr. No.	Name of Director	Designation	DIN
5.	Mr. Kabir Thakur	Non-Executive Nominee Director	08422362
6.	Mr. Vinod Nambiar	Non-Executive Nominee Director	07290613
7.	Mr. Paul Robine	Non-Executive Nominee Director	07828525
8.	Ms. Anu Aggarwal	Independent Director	07301689
9.	Ms. Deepa Wadhwa	Independent Director	07862942
10.	Mr. Norbert Fernandes	Alternate Director	06716549

The Board of Directors at their meeting held on 17^th May 2022 had appointed Mr. Norbert Fernandes (DIN: 06716549) as an Alternate Director (in the capacity of Non-Executive NonIndependent Nominee Director) to Mr. Paul Robine. During the financial year under review, there were no other changes in the Directorship of the Company.

As on the date of this report, Mr. Paul Robine has resigned from the Board of Directors of the Company and consequently Mr. Norbert Fernandes ceased to be the Alternate Director to Mr. Paul Robine effective from 12^th May, 2023. Further, pursuant to the recommendation of Nomination and Remuneration Committee, Mr. Norbert Fernandes was appointed as Additional (Non-Executive Nominee) Director by the Board of Directors on 12^th May 2023. The regularisation of Mr. Norbert Fernandes as Non-Executive Nominee Director shall be placed before the shareholders at the ensuing 14^th Annual General Meeting of the Company.

Retirement by Rotation

In terms of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Vikram Agarwal and Mr. Kabir Thakur, Non-Executive Nominee Directors of the Company, retires by rotation and being eligible, offers themselves for re-appointment at the ensuing 14^th Annual General Meeting of the Company.

Independent Directors

Mr. Sunil Chandiramani, Ms. Anu Aggarwal and Ms. Deepa Wadhwa were appointed as Independent Directors of the Company, effective 5^th August 2021, for a fixed term of five years from the date of their respective appointment/regularisation by the shareholders. Mr. Sunil Chandiramani is designated as the Chairperson of the Board of Directors.

the data bank maintained with the Indian Institute of Corporate Affairs. The Independent Directors of the Company are not liable to retire by rotation.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of strategy, planning and execution, management and leadership, functional and managerial experience, legal and risk management, corporate governance systems and practices, finance, banking and accounts and they hold highest standards of integrity and are independent of the management.

Key Managerial Personnel

Name of the KMP	Designation
Mr. Sanjay Purohit	Whole Time Director & Group CEO
Mr. Vijay Jain	Chief Financial Officer
Mr. Sachin Dudam	Company Secretary & Compliance Officer

During the year under review, there has been no change in the Key Managerial Personnel of the Company.

Board Meetings

During the financial year 2022-23, four (4) meetings of the Board of Directors were convened and held. The meetings were held as per the business requirements and maximum gap between any two Board Meetings is within the permissible limits as prescribed under the Companies Act and Listing Regulations.

The details of the composition of the board, meetings held during the year and the attendance of the Directors at the Board Meetings, inter-alia, are provided at Report on Corporate Governance, forming part of this Report.

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on meetings of Board of Directors and General Meetings.

Board Committees

The Board of Directors of the Company has constituted following Committees in order to effectively carry out some of the diverse functions of the Board:

â¢ Audit Committee

â¢ Nomination and Remuneration Committee

â¢ Stakeholders Relationship Committee

â¢ Risk Management Committee

â¢ CSR & ESG Committee

â¢ Operations Committee

â¢ IPO Committee

The details of the composition of these committees of the Board, meetings held during the financial year, etc. are set out at the Report on Corporate Governance, forming part of this Report.

Familiarsiation Programme

Pursuant to Regulation 25 of Listing Regulations, the Board of Directors has framed a policy to familiarise the Independent Directors about the Company. The Company shall conduct orientation programs / presentations / training sessions/ store visits, periodically at regular intervals, to familiarise the Directors including Independent Directors with the strategy, operations and functions of the Company. The Directors are also familiarised through presentation on business performance / operations, risk management framework, etc. at the Board Meetings.

The details as per the applicable provisions of the Companies Act and Listing Regulations are posted on the website of the Company at https://www.sapphirefoods.in/investors-relation/ corporate-governance.

Board Evaluation

In accordance with the provisions of Companies Act and Listing Regulations, the Board of Directors shall conduct formal evaluation, on annual basis, of its own performance and that of its committees and individual directors including chairperson. The Nomination and Remuneration Committee is mandated for formulating criteria for evaluation of performance of the Board of Directors and its Committees and Directors.

Pursuant to determination of criteria by the Nomination and Remuneration Committee, the Company has carried out performance evaluation surveys for the Board of Directors and its Committees, Individual Directors including Whole-time Director & Group CEO, Chairperson, etc. The evaluation surveys were circulated to the concerned board members through BoardPAC application. All the Directors had actively participated in the evaluation surveys carried out by the Company.

The results along with feedback were shared with the Independent Directors at a duly convened meeting of the Independent Directors for their consideration. The Independent Directors, at their meeting held on 21^st March 2023, deliberated in detail on the performance evaluation of the Board of Directors (as a whole), its Committees and Non-Independent Directors including Whole-time Director and Chairperson, inter-alia. Thereafter, the feedback from the meeting of the Independent Directors and board evaluation were presented to the Management and Board of Directors for their perusal and implementation thereof.

Nomination and Remuneration Policy

â¢ To lay down criteria and terms and conditions for identifying persons who are qualified to become Directors & KMPs and

who may be appointed / reappointed in Senior Management of the Company.

â¢ To provide framework for remuneration of Directors and Employees and align with the Company''s business strategies, values, key priorities and goals.

â¢ To provide for rewards linked directly to the effort, performance and achievement of Company''s targets by the employees.

â¢ Formulating the criteria for performance evaluation of all Directors

â¢ Succession Planning for Board and Senior Management

â¢ Board Diversity

The salient features of this policy have been disclosed in the Report of Corporate Governance, forming part of this Report. The Nomination and Remuneration Policy of the Company can be accessed on the website of the Company at https://www. sapphirefoods.in/investors-relation/corporate-governance.

Particulars of Employees

Auditors

Statutory Auditors

The report given by the Statutory Auditors on the Financial Statements (Standalone and Consolidated) of the Company for financial year ended 31^st March 2023 are annexed to the Financial Statements, forming an integral part of this Annual Report. The Auditors'' Report read together with Annexures referred to in the Auditors'' Report for the financial year ended 31^st March 2023 does not contain any qualification, reservation, adverse remark or disclaimers. During the year under review, the Statutory Auditors have not reported any matter of frauds under Section 143(12) of the Companies Act.

Internal Auditors

The Company had appointed M/s. Deloitte Touche Tohmatsu India LLP, Chartered Accountants, as Internal Auditor Partner for carrying out the activities of Management Testing of Internal Financial Controls and Internal Audit of various business/ functions process for the financial year 31^st March 2023.

The Company had designated Mr. Balkrishna Chaturvedi, Head-Management Assurance and Special Projects, as Internal Auditor of the Company, in compliance with the provisions of Section 138 of the Companies Act, 2013 and Rules framed thereunder.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors, has appointed M/s. Alwyn Jay & Co., Practising Company Secretaries (Firm Registration No. P2010MH021500) as Secretarial Auditor for carrying out secretarial audit and requisite certifications as mandated under Companies Act and Listing Regulations.

The Secretarial Audit Report for the financial year ended 31^stMarch 2023 received from M/s. Alwyn Jay & Co., Secretarial Auditor of the Company is annexed to this report and forms an integral part of this Annual Report. The Report does not contain any qualifications, reservations, adverse remarks, disclaimers or reporting of fraud.

Cost Auditors

The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Companies Act, 2013 and Rules made thereunder.

Particulars of Investments, Loans, Guarantees and Securities

The full particulars of the loan, investments, guarantees and securities, in accordance with the applicable provisions of the Companies Act, 2013 and Listing Regulations made by your Company during the financial year 2022-23, has been furnished at Note 5 to the Notes to Accounts of the Financial Statements forming an integral part of this Annual Report.

â¢ To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.

â¢ To assure business growth with financial stability.

The Risk Management Policy is also available on the website of the Company at https://www.sapphirefoods.in/investors-relation/ corporate-governance. For more details on risk management framework, please refer to the section of ''Management Discussion and Analysis Report'' which forms an integral part of this Annual Report.

Vigil Mechanism

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior.

Your Company has adopted a Whistle Blower Policy to provide a mechanism for the employees to report genuine concerns about any unethical behavior, actual or suspected fraud or violation of your Company''s Code of Conduct. During the year under review, this policy was amended to enhance the scope for the vendors and suppliers of the company and subsequently the code of conduct for suppliers was introduced and promulgated.

The concerned constituents including employees of the Company are encouraged to voice their concerns internally and at a high level and to disclose information which the individual believes shows malpractice or impropriety. A designated email id [email protected] has been created and disseminated through this policy/code to the concerned stakeholders to voice their grievances. The access of this designated email id is mapped and made available to the members of the Audit Committee including its Chairperson.

The provisions of this policy are in line with the provisions of Section 177 (9) of the Companies Act, 2013 and Regulation 22 of Listing Regulations. All cases registered under the whistle blower policy of the Company are subject to review by the Audit Committee. The Whistle Blower policy of the Company is available on the Company''s website at https://www. sapphirefoods.in/investors-relation/corporate-governance.

Disclosure Under Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013

The details of the complaints received during the financial year 2022-23 are as follows:

Particulars	No. of Complaints
Complaints pending as on start of the financial year i.e. 1^st April 2022	1
Complaints received during the financial year under review	8
Complaints disposed off during the financial year under review	9
Complaints pending as on end of the financial year i.e. 31^st March 2023	0

Particular of Contracts or Arrangements with Related Parties

Pursuant to the provisions of the Companies Act and Listing Regulations, your company has formulated a policy on Related Party Transactions for the purpose of identification and monitoring of such transactions, which is available on the website of the Company at - https://www.sapphirefoods.in/ investors-relation/corporate-governance.

Annual Return

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the copy of the Annual Return of the Company for the financial year ended 31^st March 2023 is placed at the Company''s Website and can be accessed at https://www.sapphirefoods.in/investors-relation/updates

Risk Management Policy

Adequate Risk Management Framework is a necessity for the purpose of Risk Assessment and minimisation/mitigation of risks involved in business activity. The Company has laid down a robust risk management framework for identification and management of risks that could adversely affect the Company. The Company has formulated Risk Management Policy in order to achieve the following objectives, inter-alia:

â¢ To ensure that all the current and future material risk exposures of the Company are identified, assessed, appropriately mitigated, minimised and managed i.e. to ensure adequate systems for risk management.

â¢ To establish a framework for the company''s risk management process and to ensure its implementation.

An update on the aforesaid complaints received and disposed are placed at the meetings of the Audit Committee during quarterly intervals.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Disclosure of Orders Passed by Regulators or Courts or Tribunal

During the financial year under review, there were no significant/ material orders passed by the Regulator, Courts, Tribunals, etc. which can have an impact on the going concern status and the Company''s operations in future.

The Company has not filed any application under Insolvency and Bankruptcy Code, 2016 as at the end of the financial year 31^st March 2023. However, during the financial year ended on 31^st March 2023, two petitions were pending against your company with National Company Law Tribunal ("NCLT") filed by operational creditors ("lessors"). Your company would like to clarify and state that the monetary demands raised by these operational creditors are unreasonable and inappropriate. Your company will make the necessary appearance before the NCLT in the concerned cases and is of the belief that the petitions may not be admitted by the Hon''ble NCLT and strike-off at the outset.

Internal Financial Controls

Your Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The Internal Control Framework is intended to increase transparency and accountability in an organisation''s process of designing and implementing a system of internal control. Your Company has successfully laid down the framework and ensured its effectiveness. The internal controls are commensurate with the size of the Company and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance with corporate policies.

Director''s Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, the

Board of Directors hereby confirms that:

a. i n the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. they 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 as at 31^st March 2023 and of the profit/loss of the Company for that year;

d. they have prepared the annual accounts of the Company on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Material Changes and Commitments, if any, Affecting Financial Position of the Company

Acknowledgements and Appreciation

Your Directors appreciate and value the contribution made by every member of the Sapphire Family.

Mar 31, 2022

Your Directors are pleased to present the 13^th Annual Report on the business and operations of Sapphire Foods India Limited ("Companyâ) together with the Audited Standalone and Consolidated Financial Statements for the Financial Year ended March 31, 2022.

Financial Results and Performance

The Companyâs financial (standalone and consolidated) performance during the financial year ended March 31, 2022 as compared to the previous financial year, is summarized below:

(H in Millions)
Particular	Standalone		Consolidated
	F.Y. 2021-22	F.Y. 2020-21	F.Y. 2021-22	F.Y. 2020-21
Total Income	14,322.47	8,584.19	17,595.50	10,812.35
Less: Expenses	14,074.40	9,551.21	17,081.65	11,799.29
Profit/ (Loss) before exceptional item and Tax	248.07	(967.02)	513.85	(986.94)
Less: Exceptional Items	-	-	-	-
Profit/ (Loss) before Tax	248.07	(967.02)	513.85	(986.94)
Less: Current Tax and Deferred Tax	-	-	(54.00)	(12.03)
Profit/ (Loss) after Tax	248.07	(967.02)	459.85	(998.97)
Total Comprehensive Income/(Loss) for the year, Net of tax	231.82	(977.27)	231.84	(1,041.50)

During the year under review, the total income of your Company was Rs. 14,322.47 millions on a standalone basis and Rs. 17,595.50 millions on a consolidated basis as compared to the previous financial yearâs total income of Rs. 8,584.19 millions on a standalone

basis and Rs. 10,812.34 millions on consolidated basis. The net profit/ (loss) for the year under review, after taxation and deferred tax stood at Rs. 248.07 millions on a standalone basis and Rs. 459.85 millions on a consolidated basis.

The Company has not transferred any amount to the general reserves. There was no change in the nature of the business of the Company during the year under review.

Business Operation and State of Company Affairs

Sapphire Foods India Limited, directly and through itsâ subsidiaries, is one of the largest franchisees of Yum! Brands in Indian sub-continent in terms of revenue with the rights to operate KFC, Pizza Hut and Taco Bell Stores in India, Sri-Lanka and Maldives. Your Company has delivered highest ever Revenue, Profitability and New Restaurant addition for financial year ended on March 31, 2022. As on March 31, 2022, your Company, directly and through its subsidiaries, operates 264 KFC stores, 310 Pizza Hut stores and 5 Taco Bell stores across India, Sri-Lanka and Maldives.

The financial year 2021-22 had turned out to be one of the important milestones in the corporate history of your Company. During the financial year under review, the Company was converted from private limited company to public limited company and consequently, the name of the Company was changed from âSapphire Foods India Private Limited to âSapphire Foods India Limitedâ. Subsequently, the Company has successfully completed its Initial Public Offering ("IPOâ) through Offer for Sale ("OFSâ) which received overwhelming response from the investors. The equity shares of the Company were listed and admitted for trading on the bourses of BSE Limited and National Stock Exchange of India Limited with effect from November 18, 2021.

For complete detail on Business Operations and State of Company Affairs, please refer to the section of âManagement Discussion and Analysis Report which forms an integral part of this Report.

Dividend

During the financial year under review, your Directors has not recommended any dividend to the Shareholders of the Company.

In terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mandatory for top 1000 listed companies based on their market capitalization (as on 31st day of every financial year), to formulate a Dividend Distribution Policy. The Company had listed its equity shares on the bourses of BSE Limited and National Stock Exchange of India Limited on November 18, 2021. As on March 31, 2022, your Company is counted among one of the top 1000 companies, based on market capitalisation.

The Board of Directors of your Company at their meeting held on May 17, 2022 has adopted Dividend Distribution Policy based on the parameters as specified under Listing Regulations. The Policy can be accessed from the website of the Company at https:// www.sapphirefoods.in/investors-relation/policies.

Subsidiaries, Joint Venture and Associate Companies:

As on March 31, 2022, your Company has "oneâ wholly-owned subsidiary company viz., Gamma Pizzakraft

Regulations, has formulated and adopted the policy for determining material subsidiaries. The said policy is available on the website of the Company, at the we blink htt ps://www.sa p p h i r ef o od s. i n/i nvesto rs-

relation/policies

The Company has obtained a certificate from M/s. S R B C & Co. LLP, Statutory Auditor, for financial year ended March 31, 2022 certifying that the Company is in compliance with the Foreign Exchange Management (Non - Debt Instruments) Rules, 2019 read with notification on Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 with respect to Downstream Investment. The said certificate issued by the Statutory Auditor does not contain any observation and is free from qualifications.

The Board of Directors of your Company at their meeting held on February 11, 2022, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited ("GPOPLâ) and Gamma Pizzakraft Private Limited ("GPPLâ) with Sapphire Foods India Limited ("Companyâ) and their respective shareholders ("Schemeâ) under the applicable provisions of the Companies Act and Listing Regulations. The Appointed Date of the Scheme is April 1, 2022. Upon the Scheme becoming effective, all equity shares held

(Overseas) Private Limited, which in turn, has three wholly-owned subsidiaries viz., Gamma Pizzakraft Private Limited, India; Gamma Pizzakraft Lanka (Private) Limited, Sri Lanka and French Restaurant Private Limited, Sri Lanka & one subsidiary viz., Gamma Island Foods Private Limited, Maldives. Apart from above, no other company have became or ceased to be subsidiary, joint venture or associate of the Company during the financial year under review.

Pursuant to the applicable provisions of Indian Accounting Standards ("Ind ASâ), Companies Act, 2013 and Rules made thereunder ("Companies Actâ), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulationsâ) and such other applicable rules, regulations, guidelines, etc., the consolidated financial statements presented by the Company include financial information of the subsidiary companies, which forms part of this Annual Report. In pursuance of Section 136 of the Companies Act, separate audited accounts of the subsidiaries, are available on the website of the Company (web link: htt ps://www.sa p ph i refoods. i n/i nvesto rs- rel at i o n/ shareholders-information).

The highlights of performance and financial position of each of the subsidiary company for the financial year ended March 31, 2022 is provided in form AOC-1, in accordance with the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014. The form AOC-1 is enclosed to the Consolidated Financial Statements and forms an integral part of this Annual Report.

Your Company, in accordance with the Listing

by the Company in GPOPL and GPOPL in GPPL shall stand cancelled, without any further act or deed and no consideration shall be issued on merger.

The scheme application was filed and admitted with National Company Law Tribunal (NCLT), Mumbai Bench on May 5, 2022.

Share Capital Authorised Share Capital

During the financial year under review, the authorised share capital of the Company was reclassified on June 15, 2021, from Rs. 4,31,68,20,000 consisting of

18.30.90.000 Equity Shares of face value of Rs.10 each,

2.50.000 8% Compulsorily Convertible Preference Shares of face value of Rs.100 each and 68,00,000 Compulsorily Convertible Preference Shares of face value of Rs. 361.90 each TO Rs. 4,31,68,20,000 comprising of 43,16,82,000 Equity Shares of face value of Rs.10 each and subsequently the capital clause of the Memorandum of Association was amended to this effect.

Issued, Subscribed and Paid-up Share Capital

During the financial year under review, your Company has raised capital of Rs. 4742.04 million on August 5, 2021 by issuance of 91,89,789 Equity Shares of face value of Rs.10 each, fully paid-up, on preferential basis ("Preferential Allotmentâ), at a price of Rs.505.13 per equity share (inclusive of a share premium of Rs. 495.13 per Equity Share) to Arinjaya (Mauritius) Limited and Sapphire Foods Mauritius Limited and 1,83,682 Equity Shares of face value of Rs.10 each, fully paid-up, on preferential allotment basis, at a price of Rs.544.42 per equity share (inclusive of a share premium of

Rs. 534.42 per Equity Share) to Edelweiss Alternative Investment Opportunities Trust-Edelweiss Crossover Opportunities Fund - Series II.

The Company, on September 10, 2021, has issued and allotted 13,78,661 Equity Shares of face value of Rs.10 each, fully paid-up, to the employees of the Company and its Subsidiaries, at pre-determined exercise price, pursuant to exercise of stock options granted by the Company under Sapphire Foods Employees Stock Option Plan, 2017 read with Sapphire Foods Employees Stock Option Scheme 2019 - Scheme III - Management other than CEO & Sapphire Foods Employees Stock Option Scheme 2019 - Scheme IV - CEO.

As on March 31, 2022, the issued, subscribed and paid-up capital of the Company stands at Rs. 63,54,25,410 comprising of 6,35,42,541 equity shares of Rs. 10 /- each.

Initial Public Offering

During the financial year under review, your Company has successfully completed its Initial Public Offering of Rs.20,732.53 million by way of an Offer for Sale of 17,569,941 equity shares of face value of Rs.10 each, fully paid-up, by the existing shareholders ("selling shareholdersâ) at an Offer Price of Rs. 1,180 per equity share including share premium of Rs.1,170 per equity share.

The Initial Public Offering was opened on November 9, 2021 and closed on November 11, 2021 (both days

inclusive) and it received overwhelming response from the investors. Pursuant to the Offer, 17,569,941 equity shares under the offer for sale were allotted and transferred to the respective applicants under various categories, at an offer price of Rs.1,180 per equity share, on November 16, 2021.

Subsequently, the equity shares of the Company were listed and admitted for trading on BSE Limited and National Stock Exchange of India Limited with effect from November 18, 2021.

Employee Stock Option Plan / Schemes

The Company has implemented Sapphire Foods Employees Stock Option Plan 2017 ("ESOP Planâ) which was originally approved by the Board of Directors and the Shareholders of the Company on May 24, 2018 and May 30, 2018 respectively. Sapphire Foods Employees Stock Option Scheme 2019 - Scheme III - Management other than CEO ("Scheme INâ) and Sapphire Foods Employees Stock Option Scheme 2019 - Scheme IV -CEO ("Scheme IVâ) (hereinafter collectively referred as "ESOP Schemesâ) forms an integral part of the ESOP Plan. With a view to reward loyalty for past services with the Company, retention of critical employees and align employee interest with shareholderâs interest and wealth accumulation, the Company has granted, from time to time, stock options to the eligible employees under the said ESOP Plan / Schemes.

Pursuant to the recommendation of the Nomination and Remuneration Committee and Board of Directors, the Shareholders of the Company has amended Scheme III read with ESOP Plan on May 18, 2021, with a view to make the terms of the options in synchronization with best practices, inter-alia and to

extend the benefit of Scheme III read with ESOP Plan to the eligible employees of its Subsidiary Companies. In order to bring the terms of Scheme IV read with ESOP Plan, in sync with Scheme III in relation to best practices, the Shareholders of the Company, by way of special resolution dated July 9, 2021 has amended Scheme IV read with ESOP Plan.

The Shareholders of the Company, on July 23, 2021, by way of special resolution had enhanced the limit of the existing pool to 28,39,033 options by way of addition of 8,07,784 options and subsequent amendment of ESOP Plan to this effect. Further, in terms of regulatory requirement, ESOP Plan / Schemes were amended by the Shareholders of the Company vide special resolution dated September 15, 2021, pursuant to the approval and recommendation of the Nomination and Remuneration Committee and Board of Directors, with a view to align it in accordance with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits Sweat Equity) Regulations, 2021 (âSEBI SBEB & SE Regulationsâ).

Subsequent to the Initial Public Offering, the shareholders of the Company, pursuant to the approval and recommendation of the Nomination and Remuneration Committee and Board of Directors at their respective meetings held on March 8, 2022, has passed special resolution by way of Postal Ballot on April 8, 2022 for:

â¢ Ratification of pre-ipo ESOP Plan / Schemes in terms of Regulation 12(1) of SEBI SBEB & SE Regulations

â¢ Amendment of ESOP Plan to increase the quantum of options reserved under the ESOP Plan from 28,39,033 stock options to 43,33,889 stock options

by creating additional 14,94,856 stock options convertible into equivalent number of equity shares of face value of Rs.10 each fully paid-up upon exercise of vested options.

â¢ Approval and Institution of Sapphire Foods Employee Stock Option Scheme 2022 - Scheme III A - Management other than CEO ("Scheme IIIAâ) read with Sapphire Foods Employee Stock Option Plan 2017

â¢ Approval and Institution of Sapphire Foods Employee Stock Option Scheme 2022 - Scheme IV A - CEO ("Scheme IVAâ) read with Sapphire Foods Employee Stock Option Plan 2017

â¢ Approval of Grant of Stock Options to Whole-time Director & Group CEO exceeding 1% of the Issued and Paid-Up capital of the Company.

The Nomination and Remuneration Committee of the Board is entrusted with the responsibility of implementation and administration of the ESOP Plan / Schemes including Scheme III A and Scheme IV A.

The details of ESOP are provided in the notes to accounts in the Financial Statements forming part of this Annual Report and the disclosures as mandated under SEBI SBEB & SE Regulations are made available on the website of the Company at https://www. sapphirefoods.in/investors-relation/shareholders-information. Certificate from M/s. Alwyn Jay & Co. LLP, Secretarial Auditors of the Company, with respect to the implementation of ESOP Plan / Schemes would be placed before the members at the ensuing Annual General Meeting of the Company.

The Company has not issued any sweat equity shares

during the year under review and hence no information as per provisions of Companies Act and SEBI SBEB & SE Regulations is furnished thereto.

Credit Rating

As at the end of the financial year March 31, 2022, your Company has been assigned rating of [ICRA] BBB ; Positive for Long Term - Term Loan and [ICRA] BBB ; Positive for Unallocated Amount - Short Term and Long Term.

Deposits

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the financial year under review, as prescribed under Regulation 34 of the Listing Regulations, is presented as a separate section which forms an integral part of this Annual Report.

Report on Corporate Governance:

The Company has complied with Regulation 34 read with Schedule V of the Securities and Exchange

Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance for the period under review is included at Annexure I and forms an integral part of this report.

A certificate from Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance under Listing Regulations is also annexed to the report on Corporate Governance.

Business Responsibility Report

A Business Responsibility Report as per Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailing the various initiatives taken by your Company from the environmental, social and governance perspective, forms an integral part of this report and is appended at Annexure II.

Directors and Key Managerial Personnel:

The Board of Directors are constituted in accordance with the provisions of Companies Act, 2013 ("Companies Actâ), SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 ("Listing Regulationsâ) and Articles of Association of the Company. The Company has received relevant disclosures and declarations from the Directors and none of them are disqualified from being appointed as Director in terms of Section 164(2) of the Companies Act and Listing Regulations.

credentials help the Company for strategy formulation and its implementation, thereby enabling its growth objectives. As on March 31, 2022, the composition of Board of Directors of your Company is as under:

Sr. No.	Name of Director	Designation	DIN
1.	Mr. Sunil Chandiramani	Chairman & Independent Director	00524035
2.	Mr. Sanjay Purohit	Whole Time Director & Group CEO	00117676
3.	Mr. Sumeet Narang	Non-Executive Nominee Director	01874599
4.	Mr. Vikram Agarwal	Non-Executive Nominee Director	03038370
5.	Mr. Kabir Thakur	Non-Executive Nominee Director	08422362
6.	Mr. Vinod Nambiar	Non-Executive Nominee Director	07290613
7.	Mr. Paul Robine	Non-Executive Nominee Director	07828525
8.	Ms. Anu Aggarwal	Independent Director	07301689
9.	Ms. Deepa Wadhwa	Independent Director	07862942

During the year under review, the following changes were made in the constitution of the Board of Directors of the Company:

â¢ The Board of Directors vide circular resolution dated April 14, 2021 accepted resignation of Mr. Niladri Mukhopadhyay (DIN: 06734203) as Non-Executive Nominee Director, representing WWD Ruby

Limited, from the directorship of the Company.

â¢ Mr. Ankur Gulati and Ms. Somwrita Biswas, NonExecutive Director, representing WWD Ruby Limited, had resigned from the directorship of the Company with effect from June 16, 2021. The Board of Directors at their meeting held on July 8, 2021 has accepted and taken on record the said resignations.

â¢ Keeping in view the Initial Public Offering ("IPOâ) of the Company, the Board of Directors were reconstituted on July 22, 2021 and accordingly Mr. Sumeet Narang, Mr. Manish Mehta, Mr. Girish Bhat, Mr. Vikram Agarwal, Non-Executive Directors had resigned from the directorships of the Company, as a part of rejig exercise. Subsequently, the Board of Directors at the same meeting on July 22, 2021, pursuant to the recommendation of the Nomination and Remuneration Committee, had appointed Mr. Sumeet Narang, Mr. Manish Mehta, Mr. Girish Bhat, as Additional Directors (in the capacity of Non-Executive Nominee Director) representing Sapphire Foods Mauritius Limited ("Promoter Shareholderâ) and Mr. Vikram Agarwal, as Additional Director (in the capacity of Non-Executive Nominee Director), representing QSR Management Trust ("Promoter Shareholderâ) of the Company. The said appointments were regularized by the shareholders of the Company at their extra-ordinary general meeting held on July 23, 2021.

â¢ The term of Whole-time Director & Group CEO, Mr. Sanjay Purohit, was set to expire on August 30, 2021. The Board of Directors and Shareholders of the Company at their meeting held on July 22, 2021 and July 23, 2021, respectively, had re-appointed

Mr. Sanjay Purohit, Group CEO, as the Whole-time Director of the Company for the further term of five years on such terms and conditions including remuneration, as recommended by Nomination and Remuneration Committee and approved by the Board and Shareholders of the Company.

â¢ Further, as a part of rejig exercise of the Board, as mentioned above, the Board of Directors on August 5, 2021, accepted resignations of Mr. Amar Raj Singh, Mr. Debobroto Das, Mr. Pranav Parikh, Mr. Tarun Khanna, Mr. Julien Kinic and Mr. Snehal Singhania from the directorships of the Company.

â¢ Pursuant to the preferential issue of Rs. 4742.04 million on August 5, 2021, the Board of Directors, pursuant to recommendation of the Nomination and Remuneration Committee, appointed Mr. Kabir Thakur, as Additional Director (in the capacity ofNon-Executive Nominee Director) representing Sapphire Foods Mauritius Limited ("Promoter Shareholderâ). The said appointment was regularized by the Shareholders of the Company at their extra-ordinary general meeting held on August 6, 2021.

â¢ In compliance with the provisions of the Companies Act and Listing Regulations and pursuant to the approval/recommendation of Nomination and Remuneration Committee and Board of Directors, Mr. Sunil Chandiramani, Ms. Anu Aggarwal and Ms. Deepa Wadhwa were appointed as Independent Directors by the Shareholders of the Company, effective August 5, 2021. Mr. Sunil Chandiramani, Independent Director, was designated as Chairperson of the Board of Directors of the Company.

â¢ Post listing of equity shares on the bourses of BSE Limited and National Stock Exchange of India Limited, Mr. Paul Robine and Mr. Vinod Nambiar were appointed as Additional Directors (in the capacity of Non-Executive Nominee Directors) on the Board representing Sapphire Foods Mauritius Limited ("Promoter Shareholderâ), on January 10, 2022. These appointments were in replacement of Mr. Manish Mehta and Mr. Girish Bhat, who had tendered resignation from the directorship positions of the Company. The said appointments of Mr. Paul Robine and Mr. Vinod Nambiar as NonExecutive Nominee Directors were regularized by the Shareholders of the Company on April 8, 2022 by way of passing resolutions through Postal Ballot conducted by the Company.

During the financial year under review, except as stated above, there were no changes in the Directorship of the Company.

Retirement by Rotation

The appointment / re-appointment is based on the performance evaluation carried out by the Board of Directors in accordance with the provisions of the Companies Act, 2013 and Listing Regulations.

The brief profile in terms of Regulation 36 of Listing Regulations and the Secretarial Standards on General Meetings (SS-2), in respect of the directors seeking

appointment / re-appointment has been annexed to the notice of the 13^th Annual General Meeting.

Independent Directors

Mr. Sunil Chandiramani, Ms. Anu Aggarwal and Ms. Deepa Wadhwa, were appointed as Independent Directors of the Company, effective August 5, 2021, for a fixed term of five years from the date of their respective appointment / regularization by the shareholders. Mr. Sunil Chandiramani has been designated as the Chairperson of the Board of Directors.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of strategy, planning and execution, management and leadership, functional and managerial experience, legal and risk management, corporate governance systems and practices, finance, banking and accounts and they hold highest standards of integrity and are independent of the management.

Key Managerial Personnel

Pursuant to the provisions of Sections 2(51) and 203

of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following persons are the Key Managerial Personnel ("KMPâ) of your Company:

Name of the KMP	Designation
Mr. Sanjay Purohit	Whole Time Director &
	Group CEO
Mr. Vijay Jain	Chief Financial Officer
Mr. Sachin Dudam	Company Secretary &
	Compliance Officer

During the year under review, there has been no change in the Key Managerial Personnel of the Company.

Board Meetings

During the financial year 2021-22, sixteen (16) meetings of the Board of Directors were convened and held. The meetings were held as per the business requirements and maximum gap between any two Board Meetings is within the permissible limits as prescribed under the Companies Act and Listing Regulations.

The details of the composition of the Board, meetings held during the year and the attendance of the directors at the board meetings, inter-alia, are provided at Report on Corporate Governance, forming part of this Report.

Board Committees

The Board of Directors of the Company has constituted following Committees in order to effectively carry out some of the diverse functions of the Board:

â¢ Audit Committee

â¢ Nomination and Remuneration Committee

â¢ Stakeholder Relationship Committee

â¢ Risk Management Committee

â¢ Corporate Social Responsibility Committee

â¢ Operations Committee

â¢ IPO Committee

The details of the composition of these committees of the Board, meetings held during the financial year, etc. are set out at the Report on Corporate Governance, forming part of this Report.

Familiarsiation Programme

Pursuant to Regulation 25 of Listing Regulations, the Board of Directors has framed a policy to familiarize the Independent Directors about the Company. The Company shall conduct orientation programs / presentations / training sessions/ store visits, periodically at regular intervals, to familiarize the Independent Directors with the strategy, operations and functions of the Company. The Independent Directors are also familiarized through presentation on business performance / operations, store visits, risk management framework, etc. at the Board Meetings.

The Company will conduct the Program "as neededâ basis during the year and will appropriately disclose the details as per the applicable provisions of the Companies Act and Listing Regulations on the website of the Company at the weblink https://www. sapphirefoods.in/investors-relation/policies

Board Evaluation

In accordance with the provisions of Listing Regulations

and Companies Act, the Board of Directors shall conduct formal evaluation, on annual basis, of its own performance and that of its committees and individual directors including chairperson. The Nomination and Remuneration Committee is mandated for formulating criteria for evaluation of performance of the Board of Directors and its Committees and Directors.

Pursuant to determination of criteria by the Nomination and Remuneration Committee, the Company has carried out performance evaluation surveys for the Board of Directors and its Committees, Individual Directors including Whole-time Director & Group CEO, Chairperson, etc. The evaluation surveys were circulated to the concerned board members through BoardPAC application. All the directors had actively participated in the evaluation surveys carried out by the Company.

The results along with feedback were shared with the Independent Directors at a duly convened meeting of the Independent Directors for their consideration. The Independent Directors, at their meeting held on March 24, 2022, deliberated in detail on the performance evaluation of the Board of Directors (as a whole), its Committees and Non-Independent Directors including Whole-time Director and Chairperson, inter-alia. Thereafter, the feedback from the meeting of the Independent Directors and board evaluation were presented to the Management and Board of Directors for their perusal and implementation thereof.

Nomination and Remuneration Policy

In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations, the Board

of Directors have formulated and adopted Nomination and Remuneration Policy for the Company, covering following objectives:

â¢ To lay down criteria and terms and conditions for identifying persons who are qualified to become Directors & KMPs and who may be appointed / reappointed in Senior Management of the Company.

â¢ To provide framework for remuneration of Directors and Employees and align with the Companyâs business strategies, values, key priorities and goals.

â¢ To provide for rewards linked directly to the effort, performance and achievement of Companyâs targets by the employees.

â¢ Formulating the criteria for performance evaluation of all Directors

â¢ Succession Planning for Board and Senior Management

â¢ Board Diversity

Particulars of Employees

Company, is provided herewith as Annexure III and forms part of this Report.

Auditors Statutory Auditors

M/s. S R B C & Co. LLP, Chartered Accountants (Registration No. 324982 E/E300003) were reappointed as Statutory Auditors of the Company at Annual General Meeting held on October 15, 2020, for a term of five consecutive years to hold office from the conclusion of 11^th Annual General Meeting (AGM) till the conclusion of 16^th Annual General Meeting of the Company. The auditors have confirmed that they are not disqualified from being re-appointed as Statutory Auditors of the Company and that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India

The Report given by the Statutory Auditors on the Financial Statements (Standalone and Consolidated) of the Company for financial year ended March 31, 2022 are annexed to the Financial Statements, forming an integral part of this Annual Report. The Auditorsâ

Report read together with Annexures referred to in the Auditorsâ Report for the financial year ended March 31, 2022 does not contain any qualification, reservation, adverse remark or disclaimers. During the year under review, the Statutory Auditors have not reported any matter of frauds under Section 143(12) of the Act.

Internal Auditors

The Company had appointed M/s. Deloitte Touche Tohmatsu India LLP, Chartered Accountants, as Internal Auditors for carrying out the activities of Management Testing of Internal Financial Controls and Internal Audit of various business processes for the financial year under review.

The Company has further designated Mr. Balkrishna Chaturvedi, Head- Management Assurance and Special Projects, as Internal Auditor of the Company, in compliance with the provisions of Section 138 of the Companies Act, 2013 and Rules framed thereunder.

Internal Audit Reports are discussed with the management and are reviewed by the Audit Committee of their Company. Both internal auditors carry out their functions as per the scope of work assigned and place their reports at the meetings of the Audit Committee, during quarterly intervals.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors, upon recommendation of the Audit Committee, has appointed M/s. Alwyn Jay & Co., Practising Company Secretaries (Firm Registration No. P2010MH021500) as Secretarial Auditor for carrying out secretarial audit and requisite certifications as mandated under Companies Act and Listing Regulations.

â¢ To establish a framework for the companyâs risk management process and to ensure its implementation.

â¢ To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.

The Risk Management Policy is also available on the website of the Company at https://www.sapphirefoods. in/investors-relation/policies.

Whistle Blower Policy

Your Company has adopted a Whistle Blower Policy to provide a mechanism for the employees to report genuine concerns about any unethical behavior, actual or suspected fraud or violation of your Companyâs Code of Conduct. The Board of Directors, as on the date of this report, has modified the policy for extending its applicability to the vendors and suppliers of the Company.

The employees of the Company are encouraged to voice their concerns internally and at a high level and to disclose information which the individual believes

The Secretarial Audit Report for the financial year ended March 31, 2022 received from M/s. Alwyn Jay & Co., Secretarial Auditor of the Company is annexed herewith at Annexure IV and forms an integral part of this report. The Report does not contain any qualifications, reservations, adverse remarks, disclaimers or reporting of fraud.

Cost Auditors

The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Companies Act, 2013 and Rules made thereunder.

Particulars of Investments, Loans, Guarantees and Securities:

The full particulars of the loan, investments, guarantees and securities, in accordance with the applicable provisions of the Companies Act, 2013 and Listing Regulations made by your Company during the financial year 2021-22, has been furnished at Note 5 to the notes to accounts of the financial statements forming an integral part of this Annual Report.

Particular of Contracts or Arrangements with Related Parties

All Related Party Transactions are placed before the Audit Committee and the Board for approval. Prior omnibus approval of the Audit Committee is obtained by the Company on an annual basis for related party transactions that are foreseeable and repetitive in nature. A detailed statement of such Related Party Transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee for their review on a quarterly basis.

The Related Party Transactions entered during the financial year under review were in the ordinary course of business and on armâs length basis. There were no significant material related party transactions entered into by the Company with any related party during the financial year under review. Thus, the disclosure under Section 134 of the Companies Act, 2013 as per specified form AOC-2 is not applicable to the Company.

Pursuant to the provisions of the Companies Act and Listing Regulations, your company has formulated a policy on Related Party Transactions for the purpose of identification and monitoring of such transactions, which is available on the website of the Company (we blink: htt ps://www.sa p p h i r ef o od s. i n/i n vest o rs-

relation/policies).

Corporate Social Responsibility

Your Company stands committed to the social and economic development of the communities in which it operates. The companyâs commitment towards this includes contributing to Institutions which are engaged in activities aligned to the activities forming part of its CSR policies.

In accordance with the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, your Company has formed a Corporate Social Responsibility (CSR) Committee to monitor CSR activities of the Company. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Board of Directors has approved a CSR Policy for the Company which provides a broad framework with regard to implementation of CSR activities carried out by the Company in accordance with Schedule VII of the Act. The CSR Policy is available on the Companyâs website at the weblink https://www.sapphirefoods.in/ investors-relation/policies

The key areas identified by the Company includes Hunger Management and Eradication, Education and Livelihood, Health, among others. A report on CSR activities as prescribed under the Act and Rules made thereunder is annexed herewith at Annexure V.

Annual Return

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the Annual Return is placed on the Companyâs Website: https://www.sapphirefoods.in/investors-relation/ shareholders-information

Risk Management Policy

Adequate Risk Management Framework is a necessity for the purpose of Risk Assessment and minimization/ mitigation of Risks involved in business activity. The Company has laid down a robust risk management framework for identification and management of Risks that could adversely affect the Company. The Company has formulated Risk Management Policy in order to achieve the following objectives, inter-alia:

various cases received and to address the same uniformly across the organization.

The details of the complaints received during the financial year 2021-22 are as follows:

Particulars	No. of Complaints
Complaints pending as on start of the financial year i.e. April 1, 2021	NIL
Complaints received during the financial year under review	04
Complaints disposed off during the financial year under review	03
Complaints pending as on end of the financial year i.e. March 31, 2022*	01

shows malpractice or impropriety. None of the employees has been denied access to the Chairperson of the Audit Committee. A designated email id [email protected] has been created and disseminated through this policy to the concerned stakeholders to voice their grievances. Access of this designated email id is mapped and made available to the members of the Audit Committee including its Chairperson.

The Whistle Blower policy of the Company is available on the Companyâs website at https://www. sapphirefoods.in/investors-relation/policies.

Disclosure under Sexual Harassment of Women at Work Place (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 the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Actâ). All employees (permanent, contractual, temporary, trainees) are covered under this policy.

* The Company has received complaint on March 6, 2022. As on the date of this report, the Internal Complaints Committee has deliberated on the said complaint and disposed off the case.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings And Outgo

For complete detail, please refer to the section of âBusiness Responsibility Reportâ which forms an integral part of this Report.

The particulars with regard to Foreign Exchange

Earnings and Outgo are given in Standalone and Consolidated Financial Statements, forming part of this Annual Report.

Compliance of Secretarial Standards

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on meetings of Board of Directors and General Meetings.

Disclosure of Orders Passed by Regulators or Courts or Tribunal

During the financial year under review, there were no significant/material orders passed by the Regulator, Courts, Tribunals, etc. which can have an impact on the going concern status and the Companyâs operations in future.

The Company has not filed any application or no proceeding is pending under Insolvency and Bankruptcy Code, 2016 as at the end of the financial year March 31, 2022.

Internal Financial Controls

Your Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The Internal Control Framework is intended to increase transparency and accountability in an organizationâs process of designing and implementing a system of internal control. Your Company has successfully laid down the framework and ensured its effectiveness. The internal controls are commensurate with the size of the Company and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and

operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies.

The internal audit department along with the external consultants carry out internal audit of the Companyâs activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with and approved by the audit committee. The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year ended March 31, 2022.

Directorâs Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. they 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 as at March 31, 2022 and of the profit/ loss of the Company for that year;

d. they have prepared the annual accounts of the Company on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Material Changes and Commitments, if any, Affecting Financial Position of the Company

Except as disclosed in this report, no material changes and commitments which could affect the Companyâs financial position, have occurred between the end of the financial year of the Company and date of this report.

Acknowledgements and Appreciation

Your Directors appreciate and value the contribution made by every member of the Sapphire Family.

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