The Members of Galaxy Entertainment Corporation Limited
Your Directors take pleasure in presenting the Thirty Sixth Annual Report of theCompany on the business and operations of the Company along with the audited financialstatements for the year ended March 31 2018.
The Company's financial performance for the financial year ended March 31 2018 issummarized below:
| || ||(Rs. in lakhs) |
|Particulars ||Year ended 31.03.2018 ||Year Ended 31.03.2017 |
|Revenue from operations ||4052.43 ||4174.82 |
|Other Income ||201.83 ||691.30 |
|Total Income ||4254.26 ||4866.12 |
|Personnel Cost ||638.12 ||70.02 |
|Operating and other expenses ||4268.86 ||6115.10 |
|Total Expenditure ||5356.98 ||6185.12 |
|(Profit/Loss) before Interest Depreciation and Tax ||(1102.72) ||(1319.00) |
|Less: Interest ||- ||- |
|Less : Depreciation ||100.81 ||100.75 |
|Profit/(Loss) before tax ||(1203.53) ||(1419.75) |
|Less Provision for Tax ||- ||- |
|Profit/(Loss) after Tax ||(1203.53) ||(1419.75) |
Performance of the Company
During the year under review Your Company had earned revenue from operations (Gross)of Rs. 4052.43 Lakhs. The Loss before finance cost depreciation and amortization was ofRs. (1102.72) Lakhs (-27.21% of total revenue) as against Rs. (1319.00) Lakhs (-26.78% oftotal revenue) in the previous year. The operating Loss after tax reduced to Rs. (1203.53)Lakhs (-29.70% to revenue) as against Rs. (1419.75) Lakhs (-34.01% of revenue) in theprevious year showing a positive trend. The Company is targeting to achieve break even incurrent financial year.
During the year under review the Company has opened 5 commissaries in India. TheCompany operates Commissaries in Mumbai Pune Bengaluru Hyderabad and Kolkata.Commissaries are mainly focused on 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.
Your Directors have not recommended any dividend on equity shares in respect of thefinancial year 2017-18. Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") with regard toformulation of Dividend Distribution Policy are not applicable 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.
Increase in Share Capital
Pursuant to the approval granted by the shareholders at their Extra Ordinary GeneralMeeting of the Company held on December 8 2017 the Authorised share Capital of theCompany had increased from Rs. 200000000/- (Rupees Twenty Crore) divided into20000000 (Two Crore) Equity shares of Rs. 10/- (Rupee Ten) each to Rs. 400000000/-(Rupees Forty Crores) divided into 40000000 (Four Crore) Equity shares of Rs. 10/-(Rupees Ten) each fully paidup.
The Issued Subscribed and Paidup Share Capital of the Company as on March 31 2018 isRs. 252293700/- divided into 25229370 equity shares of Rs. 10/- fully paidup each.
Issue and allotment of Equity shares & Compulsorily Convertible Debentures (CCDs)on preferential basis
During the year under review the Committee of Directors of the Company at theirmeeting held on January 2 2018 had issue and allotted 9579435 Equity shares of Rs.10/- each at a premium of Rs. 11/- per share fully paidup on preferential allotment basisto Promoter group and/or Investors.
The Committee of Directors of the Company at their meeting held on January 22018 had issued and allotted 988744 Compulsorily Convertible Debentures (CCDs) havingface value of Rs. 100/- each fully paidup to Central Departmental Stores Private Limitedpromoter group Company on preferential allotment basis carrying a coupon rate of 0.01%per annum which shall be converted into 4708304 Equity Shares of Rs. 10/- each at aconversion price of Rs. 21/- each within 18 months from the date of allotment in one ormore tranches.
Conversion of CCDs into Equity Shares:
The Committee of Directors at their meeting held on April 3 2018 had converted452179 CCDs out of 988744 CCDs into 2153233 Equity shares having face value of Rs.10/- each fully paidup at a conversion price of Rs. 21/- each.
Registered office of the Company
During the year under review the registered office of the Company has been shiftedfrom 3rd floor Block A Orchid City Centre Mall 225 Belasis Road Mumbai CentralMumbai-400008 to Eyelet House M.S. Patel Compound Near John Baker Bus Stop Opp. ShahIndustrial Estate Saki-Vihar Road Saki Naka Andheri (East) Mumbai-400072 w.e.f.November 8 2017.
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 Directors of the Company regularly reviews the adequacy ofinternal control systems through such audits. The Internal Auditor reports directly to theAudit 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 Company are adequate.During the year under review no material or serious observation has been received fromthe Statutory Auditors and the Internal Auditors of the Company on the inefficiency orinadequacy of such controls.
Internal Control Systems
Adequate internal control systems commensurate with the nature of the Company'sbusiness and size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financialreporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyprotected.
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 2018 has been provided in the Annual Report andwhich forms part of this report.
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
Pursuant to the provisions of Section 134(3)(a) of the Act Extract of the AnnualReturn for the financial ended March 31 2018 made under the provisions of Section 92(3)of the Act is attached as (Annexure 'B') and which forms part of this Report.
A copy of the same is also placed at the website of the Company and shall be availableat www.thegalaxycorp.com
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 diversityof the Board of Directors. The Board Diversity Policy is available on our websitewww.thegalaxycorp.com.
Secretarial Auditor and Secretarial Audit Report
In terms of the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Mrs. NidhiBajaj of M/s. Nidhi Bajaj &
Associates Practicing Company Secretaries to conduct Secretarial Audit of the Companyfor the financial year 2017-18. The Secretarial Audit Report for the financial year2017-2018 is annexed herewith as (Annexure C') and forms part of this report. TheSecretarial Audit report does not containany qualification reservation or adverse remark.
Corporate Governance is about maximizing shareholders value legally ethically andsustainably. At GECL the goal of corporate governance is to ensure fairness for everyshareholder. We believe sound corporate governance is critical to enhance and retaininvestor trust. Our Board exercises its fiduciary responsibilities in the widest sense ofthe team. We also endeavor to enhance long-term shareholder value and respect minorityrights in all our business decisions.
Certificate on Corporate Governance
As per Regulation 34 (3) read with Schedule V of the Listing Regulations the auditor'scertificateon corporate governance is enclosed as (Annexure D') to the Board'sreport. The auditor's certificate for financial year 2018 reservation does not contain anyqualification or adverse remark.
Management's discussion & analysis
The Management Discussion and Analysis Report on the operations of the Company asrequired under Regulation 34 of Listing Regulations is provided in a separate section andforms an integral part of this Report.
Disclosures related to Board Committees Policies and number of Board meetingsMeetings of Board
The Board of Directors met five (5) times during the financial year ended March 312018 in accordance with the provisions of the Act and rules made there under. All theDirectors actively participated in the meetings and provided their valuable inputs on thematters brought before the Board of Directors from time to time. Additionally on February13 2018 the Independent Directors held a separate meeting in compliance with therequirements 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 the Act.
An Audit Committee is in existence in accordance with the provisions of Section 177 ofthe Act. The Audit Committee comprises of Mr. Rajneesh Agarwal Ms. Udita Jhunjhunwala andMr. Sharad Rustagi Independent Directors and Mr. Swapnil Kothari Non-Executive Director.Five meetings of the Audit Committee were held during the year. Kindly refer section onCorporate Governance under head Audit Committee' for matters relating toconstitution meetings and functions of this Committee.
During the year under review all the recommendations made by the Audit Committee wereaccepted by the Board. There were no instances where the Board has not accepted anyrecommendation of the Audit Committee.
Details of Committees of the Board of Directors along with their terms of referencecomposition and meetings held during the year under review are provided separately in theCorporate Governance Report which forms part of this Annual Report.
Directors and Key Managerial Personnel
The Board had judicious combination of Non-Executive and Independent Directors tomaintain the independence of the Board and separate its functions of governance andmanagement. As of March 31 2018 the Board of Directors of the Company consists of Mr.Rajneesh Agarwal Ms. Udita Jhunjhunwala and Mr. Sharad Rustagi Independent DirectorsMr. Sunil Biyani and Mr. Swapnil Kothari Non-Executive Directors.
In terms of the provisions of the Act and in terms of the Memorandum and Articles ofAssociation of the Company Mr. Sunil Biyani retires by rotation at the ensuing AGM andbeing eligible seeks for re-appointment. The Board recommends his re-appointment.
In accordance with the provisions of Section 149 of the Act read with ListingRegulations your Board of Directors recommend for re-appointment of Mr. Sharad Rustagias Independent Directors for a further term of 5 (five) consecutive years commencing fromSeptember 29 2018 to September 28 2023.
The notice convening forthcoming AGM includes the proposal forappointment/re-appointment of aforesaid Directors. A brief resume of the Directors seekingappointment/re-appointment at the forthcoming AGM and other details as required to bedisclosed in terms of Regulation 36(3) of the Listing Regulations and Secretarial Standardon General Meetings (SS-2) forms part of the Notice calling the AGM. None of the Directorsare disqualifiedfor appointment/ re-appointment under Section 164 of the Act.
During the year under review Mr. Vikas Kedia Chief Financial Officer/ComplianceOfficer had resigned from the post of Chief Financial Officer/Compliance of the Companyand the followings Key Managerial Personnels of the Company were appointed w.e.f. fromNovember 8 2017:
| Mr. Mayank Tandon ||- Chief Executive Officer |
| Ms. Suchita Rajput ||- Company Secretary |
| Mr. Tanuj Agarwal ||- Chief Financial Officer |
Declarations by Independent Directors
Pursuant to the provisions of sub-section (7) of Section 149 of the Act the Companyhas received individual declaration from all independent Directors confirming that theyfulfill the criteria of independence laid down in Section 149 of the Act and Regulation 25of Listing regulation.
Policy on Director's Appointment and Remuneration
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 (3) of Section 178 of the Act is available on our website atwww.thegalaxycorp.com.
There has been no change in the policy since last fiscal. We affirm that the sittingfees paid to Directors is as per the terms laid out in the Nomination and RemunerationPolicy of the Company.
Listing Regulations mandates that the Board shall monitor and review the evaluationframework. The frame work includes the evaluation of Directors on various parameters.
The Act states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual Directors. Schedule IV of the Actstates that the performance evaluation of Independent Directors shall be done by theentire Board of Directors excluding the Director being evaluated.
The evaluation of all the Directors and the Board as a whole was conducted based on thecriteria and frame work adopted by the Board. The evaluation process has been explained inthe Corporate Governance report.
Familiarization program for independent Directors
At the time of the appointment of an independent Director the Company issues a formalletter of appointment outlining his/her role function duties and responsibilities. Theletter of appointments issued to Independent Directors is available on our website atwww.thegalaxycorp.com.
Code of conduct for prevention of insider trading
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulations 2015.
The Insider Trading Policy of the Company lays down guidelines and procedures to befollowed and disclosure to be made while dealing with shares of the Company as well asthe consequences of violation. The policy has been formulated to regulate monitor andensure reporting of deals by employees and to maintain the highest ethical standards ofdealing in Company securities.
The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on our website viz. www.thegalaxycorp.com.
Listing on Stock Exchange
The Company has entered into Listing Agreement with BSE Limited (BSE) in terms of theListing Regulations and the listing fee for the year 2018-19 has been paid.
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 2018 the Board of Directors hereby confirmsthat:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures wherever applicable;
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 2018 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.
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.
The Company complies with all applicable secretarial standards.
Auditors and Auditor's Report
M/s. S A R A & Associates Chartered Accountants Statutory Auditors of theCompany bearing ICAI Registration No. 120927W have been appointed as the StatutoryAuditors of the Company for a period of 3 years From the conclusion of thirty fourth AGMtill the thirty seventh AGM of the Companysubjecttoratificationby the members in everyAGM.
In view of recent amendment in the Act which were notified with effect from May 072018 by the Ministry of Corporate Affairs the requirement of ratification of Auditors atevery year has been removed and accordingly there is no requirement of ratification ofappointment of Auditors.
The Statutory Auditors have confirmed their eligibility to continue to act as theauditors of the Company and they are not disqualified from completing the term ofappointment.
The notes on financial statements referred to in the Auditors Report areself-explanatory and do not call for any further comments and explanations. The Auditors'Report does not contain any qualification reservation or adverse remark. No instance offraud have been reported by the Statutory Auditors of the Company under Section 143(12) ofthe Act. The Auditor's Report is enclosed with the financial statements in 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.
Related Party Transactions
All transactions with related parties are placed before the Audit Committee for reviewand approval. Prior omnibus approval has obtained for transactions with related partieswhich are repetitive in nature.
All transactions entered into with related parties during the financial year underreview were in ordinary course of Business and on arm's length basis. During the yearunder review the Company has not entered into any material related party transactions asdefined under the RPT policy of the Company. Accordingly the disclosure in respect ofcontracts or arrangement with related parties as required under Section 134(3) of the Actin Form AOC-2 is not applicable.
The policy on materiality of related party transactions and dealing with related partytransactions ("RPT Policy") as approved by the Board is available on thewebsite of the Company www.thegalaxycorp.com.
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 8(13) of the Companies (Share Capital and Debenture) Rules 2014 hasbeen furnished.
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
No significant and material orders have been passed by any Regulators or Courts orTribunals which can have an impact on the going concern status and the Company'soperations in future.
Conservation of Energy Technology Absorption and Foreign Exchange earning and outgo
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 is included in (Annexure E').
Declaration by Chief Executive Officer
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 asDeposits' in terms of Section 73 of the Act read with the Companies (Acceptance ofDeposit) Rules 2014 and hence the requirement for furnishing of details of depositswhich are not in compliance 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 Companies Act2013
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 2017-18 no complaints were received by the Company related to sexualharassment.
Electronic copies of the Annual report 2017-18 of 36th Annual GeneralMeeting are sent to all members whose email addresses are registered with theCompany/depository participant(s). For members who have not registered their emailaddresses physical copies are sent in the permitted mode.
The Company has established a vigil mechanism to provide a framework for promotingresponsible and secure whistle blowing and to provide a channel to the employee(s)Directors and other stakeholders to report to the management concerns about unethicalbehavior actual or suspected fraud or violation the code of conduct or policy/ies of theCompany as adopted/framed from time to time.. The Policy on vigil mechanism and whistleblower policy may be accessed on the Company's website viz. http://www.thegalaxycorp.com/Corporate_Policies_and_Code.html
Detection of Fraud
No Fraud has been reported by the auditor's viz. statutory and internal auditors to theAudit Committee or the Board in terms of Section 143 (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.
The statements forming part of the Director's Report may contain certain forwardlooking remarks within the meaning of applicable securities laws and regulations. Manyfactors could cause the actual results performance or achievements of the Company to bematerially different from any future results performances or achievements that may beexpressed or implied by such forward looking statements.
| ||For and behalf of the Board of Directors || |
| ||Sunil Biyani ||Sharad Rustagi |
|Place: Mumbai ||(Director) ||(Director) |
|Date: August 2 2018 ||DIN: 00006583 ||DIN: 07232913 |