The Members of
Galaxy Cloud Kitchens Limited
(Formerly known as Galaxy Entertainment Corporation Limited)
Your Directors take pleasure in presenting the Thirty Seventh Annual Report of GalaxyCloud Kitchens Limited on the business and operations of the Company along with auditedfinancial statements for the financial year ended March 31 2019.
The Company's financial performance for the year ended March 31 2019 is as below:
| || ||(र in thousands) |
|Particulars ||Year ended 31.03.2019 ||Year Ended 31.03.2018 |
|Revenue from operations ||718675.34 ||405243.23 |
|Other Income ||15845.41 ||20182.67 |
|Total Income ||734520.75 ||425425.90 |
|Personnel Cost ||142360.20 ||63811.64 |
|Operating and other expenses ||766879.91 ||459772.67 |
|Total Expenditure ||909240.11 ||523584.31 |
|Profit before Interest Depreciation and Tax ||(174719.36) ||(98158.41) |
|Less: Interest ||3049.01 ||12113.54 |
|Less : Depreciation ||14053.54 ||10080.78 |
|Profit/(Loss) before tax ||(191821.91) ||(120352.73) |
|Less Provision for Tax ||- ||- |
|Profit/(Loss) after Tax ||(191821.91) ||(120352.73) |
Review of performance of the Company
During the year under review Your Company had earned revenue from operations (Gross)of र718675.34 thousands. The Loss before finance cost depreciation and amortizationwas of र(172129.77) thousands (-24.32% of total revenue) as against (98158.41)thousands (-23.07% of total revenue) in the previous year. The operating Loss after taxreduced to र(191821.91) thousand (-26.49% to revenue) as against र(120352.73)thousands (-28.29% of revenue) in the previous year showing a positive trend. The Companyis targeting to achieve break even in current financial year.
The Company operates Cloud Kitchens in Mumbai Pune Bengaluru Hyderabad and Kolkataand are planning to open two more cloud kitchens at Ludhiyana and Faridabad. CloudKitchens are mainly engaged in manufacturing of fresh foods ranging from fresh bakerydesserts hot meals cold meals to home meal convenience foods and ready to eat products.Currently the Company does private label for renowned players in retail industry andcaters to QSR companies having PAN India presence currently Company is operating in B2Bmodel and soon planning go into B2C model also.
The Board of Directors of the Company have not recommended any dividend on equityshares in respect of the financial year 201819. Regulation 43A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") with regard to formulation of Dividend Distribution Policy are notapplicable to our Company.
Transfer to Reserve
The Company has not transferred any amount to reserves during the year and hence noinformation as per the provisions of Section 134 (3) (j) of the Companies Act 2013("the Act") has been furnished.
Pursuant to the approval granted by the shareholders at their Extra Ordinary GeneralMeeting of the Company held on January 18 2019 the Authorised Share Capital of theCompany has been increased from र400000000/- (Rupees Forty Crore) divided into40000000 (Four Crore) Equity shares of र10/- (Rupee Ten) each to र500000000/-(Rupees Fifty Crores) divided into 50000000 (Five Crore) Equity shares of र10/-(Rupees Ten) each.
The Issued Subscribed and Paidup Share Capital of the Company as on March 31 2019 wasर385826030/- divided into 38582603 equity shares of र10/- each.
Issue and allotment of Equity shares on preferential basis
During the year under review the Committee of Directors of the Company at theirmeeting held on February 12 2019 had issued and allotted 11200000 Equity shares ofर10/- each at a premium of र11/- per share fully paidup on preferential allotmentbasis to Investors.
Conversion of Compulsorily Convertible Debentures (CCDs) into Equity shares
The Company had made allotment of 988744 CCDs having face value of र100/- each onJanuary 2 2018 on preferential basis to Central Departmental Stores Private Limitedpromoter group Company Which shall be converted into equity shares within the period of18 months in one or more tranches. During the year under review the Committee ofDirectors at their meeting held on April 3 2018 had issued and allotted 2153233 Equityshares of र10/- each pursuant to conversion of 452179 CCDs out of 988744 CCDs at aconversion price of र21/- each fully paid.
Allotment of Compulsorily Convertible Debentures (CCDs) on preferential basis
The Committee of Directors of the Company at their meeting held on February 12 2019had issued and allotted 3800000 CCDs having face value of र30/- each fully paidup toFuture Enterprises Limited promoter Company on preferential allotment basis which shallbe converted into 3800000 Equity Shares of र10/- each at a premium of र20/- perequity share within 18 months from the date of allotment in one or more tranches.
Change in name of the Company
During the year under review the name of the Company has been changed from 'GalaxyEntertainment Corporation Limited' to 'Galaxy Cloud Kitchen Limited' w.e.f. February 42019.
The Company has robust internal control systems and procedures commensurate with itsnature of business which meets the following objectives:
providing assurance regarding the effectiveness and efficiency of operations;
efficient use and safeguarding of resources;
compliance with policies procedures applicable laws and regulations; and
transactions being accurately recorded and promptly reported.
The Company continues to have periodical audits conducted of all its functions andactivities to ensure that systems and procedures are followed across all areas.
The Audit Committee of Board of Directors of the Company regularly reviews the adequacyof internal control systems through such audits. The Internal Auditor reports directly tothe Audit Committee.
The Company also has a budgetary control system to monitor expenditure against approvedbudgets on an ongoing basis.
Internal Financial Controls
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Statutory Auditors and the InternalAuditors of the Company on the inefficiency or inadequacy of such controls.
The Board of Directors of the Company has formulated a Risk Management Policy whichaims at minimizing the risk and enhancing the value and reviews the elements of risks withregard to the business.
The risk management approach is based on a clear understanding of the variety of risksthat the organization faces disciplined risk monitoring and measurement and continuousrisk assessment and mitigation measures.
Cash Flow Statement
In conformity with the provisions of Regulation 34 of Listing Regulations Cash FlowStatement for the year ended March 31 2019 has been provided in the Annual Report andwhich forms part of this report.
Subsidiaries and Associates
The Company is not a holding Company in terms of Section 2 (46) of the Act. There areno subsidiary associate or joint venture Companies within the meaning of Section 2(6) ofthe Act. Hence Form AOC-1 pursuant to provisions of Section 129(3) of the Act is notprovided in this report.
Particulars of Employees and other additional information
The ratio of the remuneration of each Key Managerial Personal (KMP) to the median ofemployee's remuneration as per section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rule 2014 forms part ofthe Board's Report under ('Annexure A').
None of the employees are drawing remuneration as per the ceiling stipulated in termsof Rule 5 (2) (ii) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
Extract of Annual Return
In terms of provisions of Section 92 and 134(3)(a) of the Act an extract of the AnnualReturn for the financial year ended March 31 2019 is annexed in this report as ('AnnexureB') and a copy of the same is also placed at the website of the Company and shall beavailable at www.galaxycloudkitchens.in.
The Company recognizes and embraces the importance of a diverse board in success. Webelieve that a truly diverse board will leverage differences in thought perspectiveknowledge skill regional and industry experiences cultural and geographical backgroundage ethnicity race and gender which will help us to retain our competitive advantage.The Board has adopted the Board Diversity Policy which sets out the approach to diversity.The Board Diversity Policy is available on our website www.galaxycloudkitchens.in.
Additional details on Board diversity are available in the Corporate Governance reportthat forms part of this Annual Report.
Secretarial Auditor and Secretarial Audit Report
Pursuant to Section 179 and 204 of the Act and rules made thereunder M/s. Nidhi Bajaj& Associates Practising Company Secretary (Membership No. 28907/Certificate ofPractice No. 14596) was appointed as a Secretarial Auditor to conduct the secretarialaudit of the Company for the financial year 2018-19 in the manner as stated above inforgoing provision.
The Secretarial Audit Report for the financial year 2018-19 is appended as ('AnnexureC') which forms part of this Report. The said Secretarial Auditors Report does not containany qualifications reservations or adverse remarks.
Cost records and Cost audit
Maintenance of cost records and requirements of cost audit as prescribed under Section148(1) of the Act are not applicable for the business activities carried out by theCompany.
Our corporate governance practices are reflection of our value system encompassing ourculture policies and relationships with our stakeholders. Integrity and transparency arekey to our corporate governance practices to ensure that we gain and retain the trust ofour stakeholders at all times.
As per Regulation 34 (3) read with Schedule V of the Listing Regulations the auditor'scertificate on corporate governance is enclosed as ('Annexure D') to the Board's report.The auditor's certificate for financial year 2018-19 does not contain any qualificationreservation or adverse remark.
Management Discussion & Analysis
In terms of the provisions of Regulation 34 of Listing Regulations the ManagementDiscussion and Analysis for the year ended March 312019 is set out in this Annual Report.
Disclosures related to Board Committees Policies and number of Board meetingsMeetings
The Board of Directors met five (5) times during the financial year in accordance withthe provisions of the Act and rules made there under. All the Directors activelyparticipated in the meetings and provided their valuable inputs on the matters broughtbefore the Board of Directors from time to time.
On February 112019 the Independent Directors held a separate meeting in compliancewith the requirements of Schedule IV of the Act and the provisions of Listing Regulations.The meeting details are provided in the Corporate Governance Report that forms part ofthis Annual Report. The maximum interval between any two meetings did not exceed 120 daysas prescribed in Act. Details of Committees of the Company along with their terms ofreference composition and meetings held during the year are provided in the CorporateGovernance Report which forms part of this Annual Report.
Matter related to Directors and Key Managerial Personnel Directors
The Board had judicious combination of Executive Non-Executive and IndependentDirectors to maintain the independence of the Board and separate its functions ofgovernance and management. As of March 31 2019 the Board of Directors of the Companyconsists of Mr. Arvind Agrawal Managing Director Mr. Rajneesh Agarwal Ms. UditaJhunjhunwala and Mr. Sharad Rustagi Independent Directors Mr. Sunil Biyani and Mr.Swapnil Kothari Non-Executive Directors.
There was no change in the composition of Board of Directors apart from appointment ofMr. Arvind Agrawal as Managing Director of the Company with effect from November 3 2018.
During the year under review Mr. Tanuj Agarwal resigned as Chief Financial Officerand Key Managerial Personnel of the Company w.e.f. February 28 2019 and Mr. Atul Joshihas been appointed as Chief Financial Officer and Key Managerial Personnel of the Companyw.e.f. March 12019.
The Composition terms of reference powers and roles of Audit Committee of the Companyare disclosed in the Corporate Governance Report which forms part of this Annual Report.There were no instances where the Board did not accept the recommendations of the AuditCommittee.
Nomination Remuneration and Compensation Committee
A Nomination Remuneration and Compensation Committee is in existence in accordancewith the provisions of sub-section (1) of Section 178 of the Act. Kindly refer section onCorporate Governance which is forming part of this report under head 'NominationRemuneration and Compensation Committee for matters relating to constitution meetingsfunctions of the Committee and the remuneration policy formulated by this Committee.
Policy on Director's Appointment and Remuneration
The current policy is to have an appropriate mix of Executive Non-Executive andIndependent Directors to maintain the independence of the Board and separate its functionof governance and management
The policy of the Company on Director's appointment and remuneration including thecriteria for determining qualifications positive attributes independence of a Directorand other matters as required under sub-section (3) of Section 178 of the Act isavailable on our website at www.galaxycloudkitchens.in Declaration by IndependentDirectors
The Company has received necessary declaration from each Independent Directors thathe/she meets the criteria of independence laid down in Section 149(6) of the Act andRegulation 25 of Listing Regulations.
Pursuant to the provisions of the Act the Board has carried out an annual evaluationof performance of its own the Committees and Individual Directors thereof.
At the meeting of the Board all the relevant factors that are material for evaluatingthe performance of the Committees and of the Board were discussed in detail.
A separate exercise was carried out to evaluate the performance of Individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board except the Independent Director beingevaluated. The performance evaluation of the Chairman and Non-Independent Directors wascarried out by the Independent Directors. The Directors expressed their satisfaction withthe evaluation process.
Moreover further detail regarding skill expertise and competencies of Directors aredisclosed in the Corporate Governance Report which forms part of this Annual Report.
Listing on Stock Exchange
The Company's shares are listed on BSE Limited.
The Company has entered into necessary agreements with the Central Depository Services(India) Limited (CDSL) and National Securities Depository Limited (NSDL) for availing theDepository services.
Director's Responsibility statement
In terms of Section 134(5) of the Act in relation to the audited financial statementsof the Company for the year ended March 31 2019 it is hereby confirmed that:
i. In preparation of the annual accounts for the financial year the applicableaccounting standards have been followed and there are no material departures whereverapplicable;
ii. such accounting policies have been selected and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2019 and of the loss of the Companyfor the year ended on that date
iii. proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis;
v. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and operating effectively;
vi. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
During the year under review the Company has complied with Secretarial Standards onmeetings of the Board of Directors ("SS- 1") and on General Meetings("SS-2") as amended and issued by the Institute of Company Secretaries of India.The Company has devised proper system to ensure compliance with the provisions and is incompliance with the same.
Auditors and Auditor s' Report
Under Section 139 of the Act and the rules made thereunder it is mandatory to rotatethe statutory auditors on completion of the maximum term permitted under the provisions ofthe Act
M/s. S A R A & Associates Chartered Accountants (Firm Registration No. 120927W)hold office till conclusion of the ensuing Annual General Meeting and are eligible forre-appointment. They have confirmed their eligibility to the effect that theirre-appointment if made would be within the prescribed limits under the Act and they arenot disqualified for re-appointment.
The Auditors' Report on the financial statements for the financial year ended March 312019 does not contain any qualification observation emphasis of matter of adverse remarkand doesn't contain any instances of fraud as mentioned under Section 143 of the Act. TheAuditors' Report is enclosed with the financial statements as a part of this AnnualReport.
Corporate Social Responsibility
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable to Company.
Particulars of Contracts and arrangements made with related parties
During the year under review all transactions entered into by the Company with relatedparties as defined under the Act and the Listing Regulations were in the ordinary courseof business and on an arm's length basis.
Omnibus approval is obtained for the transactions which are foreseen and repetitive innature with related parties. A statement of all such related party transactions waspresented before the Audit Committee on periodic and need basis for its review andapproval.
There were no materially significant transactions with the related parties during thefinancial year which were in conflict with the interest of the Company. Disclosure oftransactions with related parties (including entity belonging to the Promoter/PromoterGroup which hold(s) 10% or more shareholding in the Company) as required under ListingRegulations and the applicable Accounting Standards have been given in the Notes formingpart of the financial statement.
During the year under review the Company has not entered into any material relatedparty transactions as defined under the RPT policy of the Company. Accordingly thedisclosure in respect of contracts or arrangement with related parties as required underSection 134(3) of the Act in Form AOC-2 is not applicable.
Disclosure relating to equity shares with differential rights
The Company has not issued any equity shares with differential rights during the yearunder review and hence no information as per provisions of Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 has been furnished.
Disclosure relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme
The Company has not issued or granted any Employee Stock Option Scheme and EmployeeStock Purchase Scheme during the year under review and hence no information as perprovisions of Rule 12 of the Companies (Share Capital and Debenture) Rules 2014 has beenfurnished.
Disclosure relating to sweat equity shares
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Rule 8(13) of the Companies (Share Capital andDebenture) Rules 2014 has been furnished.
Disclosures in respect of voting rights not directly exercised by employees
There are no shares held by trustees for the benefit of employees and hence nodisclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules 2014has been furnished.
Disclosure of Orders passed by Regulators or Courts or Tribunal
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and the Company's operations in future.
Energy Technology Absorption and Foreign Exchange
Information required under Section 134 (3)(m) of the Act read with Rule 8(3) of theCompanies (Accounts) Rules 2014 with respect to conservation of energy technologyabsorption and foreign exchange earnings and outgo are enclosed as ('Annexure E') to theBoard's report.
Declaration by Managing Director
As per Regulation 34(3) read with Schedule V of the Listing Regulations declarationstating that the members of board of Directors and senior management personnel haveaffirmed compliance with the code of conduct of board of Directors and senior managementis enclosed as ('Annexure F').
Deposits from Public
During the year under review your Company neither accepted any deposits nor there wereany amounts outstanding at the beginning of the year which were classified as 'Deposits'in terms of Section 73 of the Act read with the Companies (Acceptance of Deposit) Rules2014 and hence the requirement for furnishing of details of deposits which are not incompliance with the Chapter V of the Act is not applicable.
Disclosures under Section 134(3)(l) of the Companies Act 2013
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
Particulars of Loans Guarantees or Investments under section 186 of the Act
Details of loans Guarantees and Investments covered under the provisions of Section186 of the Act form part of the Notes to the Financial Statements provided in this AnnualReport.
Prevention of Sexual Harassment Policy
The Company has in place a prevention of Sexual Harassment Policy in line with therequirements of the sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. We follow a gender-neutral approach in handling complaints ofsexual harassment and we are compliant with law of the Land. We have also constituted aninternal Committee to consider and address sexual harassment complaints in accordance withthe Sexual Harassment of Women at Workplace (prevention prohibition and Redressal) Act2013. All employees (Permanent contractual temporary and trainees) are covered underthis policy. During the year 2018-19 no complaints were received by the Company relatedto sexual harassment.
Electronic copies of the Annual report 2018-19 of 37th AGM are sent to allmembers whose email addresses are registered with the Company/depository participant(s).For members who have not registered their email addresses physical copies are sent in thepermitted mode.
The Company has established a vigil mechanism to provide a framework of promotingresponsible and secure whistle blower mechanism and to provide a channel to theemployee(s) and Directors to report to the management concerns about unethical behavioractual or suspected fraud or violation of the code of conduct or policy/ies of theCompany as adopted framed or revised from time to time. The mechanism provides foradequate safeguards against victimisation of employees and Directors to avail of themechanism and also provide for direct access to the Chairman of the Audit Committee inexceptional cases.
The Company has formulated and disseminated a Vigil Mechanism and Whistle Blower Policyfor employees and Directors of the Company to report genuine concerns that could haveserious impact on the operations and performance of the business of the Company. ThisPolicy is in compliance with the provisions of the Act and the regulations of the ListingRegulations.
Furthermore the policy outlining this mechanism is approved and revised by the Boardof Directors from time to time.
Detection of Fraud
During the year under review No Fraud has been reported by the auditor's viz.statutory and secretarial auditors to the Audit Committee or the Board in terms of Section143(12) of the Act.
The Board appreciates and places on record the contribution made by the employeesduring the year under review. The Board also places on record their appreciation of thesupport of all stakeholders particularly shareholders customers bankers suppliers andbusiness partners.
| || ||For and behalf of the Board of Directors |
| ||Arvind Agrawal ||Sharad Rustagi |
|Place: Mumbai ||Managing Director ||Director |
|Date: May 24 2019 ||DIN: 02268683 ||DIN: 07232913 |