United Foodbrands Limited has successfully completed strategic acquisitions in Thailand through its wholly-owned subsidiary, marking a significant expansion into Southeast Asian markets. The company announced that Barbeque Nation MENA Holding Limited, domiciled in Dubai, has acquired shares in two Thai limited liability companies, expanding operations in Southeast Asia for restaurant business growth.

Acquisition Details

The acquisitions involve two newly incorporated Thai entities that have now become step-down subsidiaries of United Foodbrands Limited. The Thai Department of Business Development, Ministry of Commerce, confirmed the share transfers.

United Foodbrands Thai Holding Co., Ltd.

This entity is authorized to establish limited liability companies, branch offices, operate hotels and restaurants, and provide consultancy services.

United Foodbrands Thai Co., Ltd.

This subsidiary is authorized to operate restaurants, hotels, bars, and nightclubs in Thailand.

Strategic Rationale

The acquisitions align with United Foodbrands' objective to explore business opportunities in Southeast Asia, particularly Thailand. Both acquired entities operate within the restaurant and hospitality sector, directly supporting the company's core business activities. The step-down subsidiaries will enable United Foodbrands to establish an operational presence in Thailand's food service market.

Regulatory Compliance

The transactions constitute related party transactions under Section 2(76) of the Companies Act, 2013, as both acquired entities are now step-down subsidiaries. However, none of the promoters, promoter group members, or directors of United Foodbrands have any financial or other interests in the acquired Thai entities. The acquisitions were disclosed under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Business Impact

Both Thai entities are newly incorporated companies with no operational history or turnover for the past three financial years. The acquisitions provide United Foodbrands with established legal entities to commence restaurant operations in Thailand, supporting the company's international expansion strategy in the Southeast Asian hospitality market.

United Foodbrands Limited (formerly known as Barbeque-Nation Hospitality Limited) has secured a significant victory in its tax appeal case. The Income Tax Appellate Tribunal (ITAT), Bengaluru Bench, has upheld the company's eligibility for depreciation on goodwill for Assessment Years 2013-14 to 2018-19, overturning earlier disallowances.

Key Highlights

• Tribunal Decision: The ITAT has ruled in favor of United Foodbrands, allowing depreciation on goodwill for six assessment years.
• Financial Impact: The company had faced disallowance of ₹11.05 crores in goodwill depreciation for the period in question.
• Pending Assessment: United Foodbrands is awaiting the final assessment order from the assessing officer to determine the exact positive financial impact.

Background of the Case

United Foodbrands had appealed to the ITAT against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] which had disallowed depreciation on goodwill and other expenses for the Assessment Years 2013-14 to 2018-19.

Implications of the Ruling

The ITAT's decision overturns the previous disallowances made by the Assessing Officer and CIT(A). This ruling is expected to have a positive impact on the company's financial statements, although the exact figures are yet to be determined.

Financial Overview

To provide context on the company's financial position, here's a snapshot of United Foodbrands' key financial metrics:

Note: Figures are based on the standalone financial statements.

Looking Ahead

The company is now awaiting the final assessment order from the Assessing Officer, which will provide clarity on the exact financial benefit resulting from this favorable ruling. This decision may strengthen United Foodbrands' financial position and could set a precedent for similar cases in the industry.

Investors and stakeholders will be keenly watching for the final assessment order to gauge the full impact of this ruling on the company's financials and future tax liabilities.