The Members of Galaxy Cloud Kitchens Limited
Your Directors take pleasure in presenting the Fortieth Annual Report of Galaxy CloudKitchens Limited on the business and operations of the Company along with auditedfinancial statements for the financial year ended March 312022.
The Company's financial performance for the year ended March 312022 is as below:
| || ||(Rs in lakhs) |
|Particulars ||Year ended 31.03.2022 ||Year ended 31.03.2021 |
|Revenue from operations ||407407.83 ||302474.83 |
|Other Income ||79602.62 ||15797.94 |
|Total Income ||487010.45 ||318272.77 |
|Personnel Cost ||97711 ||69502.35 |
|Operating and other expenses ||334398.04 ||253385.28 |
|Total Expenditure ||432109.04 ||322887.63 |
|Profit before Interest Depreciation and Tax ||54901.41 ||(4614.86) |
|Less: Interest ||7830.60 ||10811.23 |
|Less : Depreciation ||38110.24 ||40821.32 |
|Profit/(Loss) before tax ||8960.57 ||(56247.41) |
|Less Provision for Tax ||- ||- |
|Profit/(Loss) after Tax ||8960.57 ||(56247.41) |
RESULT OF OPERATIONS AND THE STATE OF THE COMPANY'S AFFAIRS
During the year under review Your Company had earned revenue from operations (Gross)of ' 407407.83 thousands. The profit before finance cost depreciation and amortizationwas of ' 54901.41thousands as against loss of ' 4614.86 thousands in the previous year.The operating profit after tax was ' 8960.57 thousand as against loss of ' 56247.41thousands in the previous year.
During the year under review some of the promoters of the company submitted theirrequest to discontinue as promoters of the company and further requested the company tore-classify them under public category. To give effect to the same the company had takenapproval of the shareholders by way of postal ballot after receiving recommendation fromthe Board based on applicable listing regulations based on which an application has beenforwarded to the Bombay Stock Exchange (BSE) where the shares of the company are listed areply is awaited from the BSE regarding the same.
The Company operates Cloud Kitchens in Mumbai Bengaluru and Gurgaon Cloud Kitchensare mainly engaged in manufacturing of fresh foods ranging from fresh bakery dessertshot meals cold meals to home meal convenience foods and ready to eat products. Currentlythe Company does private label for renowned players in retail industry and caters to QSRCompanies having PAN India presence currently Company is operating in B2B model and soonplanning go into B2C model also.
COVID-19 - IMPACT AND MEASURES
The Second wave of COVID-19 badly affected the human life and economy of the Country.The situation became grave in April 2021 resulting in imposition of lockdown by many stategovernments in India. The sudden spike of COVID cases pushed the Indian Economy into atechnical recession and adversely impacted the business of the Company during the firstquarter of the financial year 2021-22.
The third wave of Covid-19 hit the country during the third quarter of the financialyear 2021-22. The situation aroused due to the third wave was under control due to thepreventive measures taken by the states and central governments. The vaccination at largescale availability of oxygen medicines and other medical facilities helped incontrolling the situation. This has resulted in limited impact and loss of life in thethird wave of covid-19 compared to the first and the second waves. The state governmentshad imposed restrictions in different parts of India to prevent spread of the omicronvariant of Covid-19 virus.
The Company has taken preventive measures such as wearing of masks sanitizationsocial distancing thermal screening and swab testing within office premises and all thecommissaries to prevent spread of Covid-19. The Company has provided adequate GroupMediclaim Insurance cover for treatment of employees and their dependent family members.
The Board of Directors of the Company have not recommended any dividend on equityshares in respect of the financial year 202122 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.
During the year under review the Authorized Share Capital as Stated in Clause V of theMemorandum of Association of the Company was increased from ' 500000000/- to '650000000/- vide ordinary resolution passed by the members at their Extra-OrdinaryGeneral meeting held on April 29 2021.
Acordingly the Authorised Share Capital of the Company is ' 650000000/- (RupeesSixty Fifty crore) divided into 65000000 (Six Crore Fifty Lacs) Equity shares of ' 10/-(Rupees Ten) each fully paidup as on March 312022.
The Issued Subscribed and Paidup Share Capital of the Company as on March 312022 was' 449376740/- (Rupees Forty Four Crore Ninety Three lakhs Seventy Six Thousand Sevenhundred and Forty) divided into 44937674 (Four Crore Forty Nine lakhs Thirty SevenThousand Six hundred and Seventy Four) equity shares of ' 10/- (Rupees Ten) each fullypaidup.
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 monitorexpenditure against approved budgets 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 ofthe variety of risks that the organization faces disciplined risk monitoring andmeasurement and continuous risk assessment devising and implementing mitigation measures.
Cash Flow Statement
In conformity with the provisions of Regulation 34 of Listing Regulations Cash FlowStatement for the year ended March 312022 has been provided in the Annual Report andwhich forms part of this report.
Management Discussion & Analysis
In terms of the provisions of Regulation 34 of Listing Regulations the ManagementDiscussion and Analysis for the year ended March 312022 is set out in this Annual 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.
The Company complies with all applicable mandatory Secretarial Standards issued by theInstitute of Company Secretaries of India.
Listing on Stock Exchanges
The Company's equity shares are listed on BSE Limited.
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 of the Act read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rule 2014 forms part of theBoard'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.
Disclosures under Section 134(3)(l) of the Companies Act 2013
No material changes and commitments which could affect the Company's financialposition have occurred between the end of the financial year of the Company and date ofthis report.
Particulars of Contracts and arrangements made with related parties
All Related Party Transactions that were entered into during the financial year were onarm's length and were in the ordinary course of business. All Related Party Transactionswere placed before the Audit Committee of the Board of Directors for their approval. TheAudit Committee has granted omnibus approval for Related Party Transactions as per theprovisions and restrictions contained in the Listing Regulations. Pursuant to Regulation23 of the Listing Regulations all related party transactions were placed before the AuditCommittee on a quarterly basis specifying the nature value and terms & conditions ofthe transactions for their review.
The information on transactions with related parties pursuant to Section 134(3)(h) ofthe Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given in Form No.AOC-2 as (Annexure B') which forms part of this report.
The related party disclosures as specified in Para A of Schedule V read with Regulation34(3) of the Listing Regulations are given in the Financial Statements.
Corporate Social Responsibility
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable to Company.
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'sreport. The auditor's certificate for financial year 2021-22 does not contain anyqualification reservation or adverse remark.
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 that will help us to retain our competitive advantage. TheBoard has adopted the Board Diversity Policy which sets out the approach to diversity. TheBoard Diversity Policy is available on our websitehttp://www.galaxycloudkitchens.in/Corporate_Policies_and_Code.html#.YwzR93ZBwuU.Additional details on Board diversity are available in the Corporate Governance reportthat forms part of this Annual Report.
Disclosures related to Board Committees Policies and number of Board meetings
During the year 5 (Five) Board Meetings were convened and held through audio/videoconferencing the details of which are given in the Corporate Governance Report. Theintervening gap between two consecutive meetings was within the period prescribed underthe Act. All the Directors actively participated in the meetings and provided theirvaluable inputs on the matters brought before the Board of Directors from time to time.
On February 10 2022 the Independent Directors held a separate meeting in compliancewith the requirements of Schedule IV of the Act and the provisions of Listing Regulations.
As on March 31 2022 the Board had three committees: the Audit committee NominationRemuneration and Compensation Committee and the Stakeholders Relationship Committee. Themeeting details are provided in the Corporate Governance Report that forms part of thisAnnual Report. Details of Committees of the Company along with their terms of referencecomposition and meetings held during the year are provided in the Corporate GovernanceReport which forms part of this Annual Report.
Directors and Key Managerial Personnel:
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 on March 31 2022 the Board of Directors of the Companyconsisted of Mr. Arvind Agrawal Managing Director Mr. Rajesh Mittal Mrs. UditaJhunjhunwala and Mr. Sharad Rustagi Independent Directors Mr. Sunil Biyani and Mr.Swapnil Kothari Non-Executive Directors.
Mr. Sunil Biyani retires by rotation and being eligible offers himself forre-appointment. A resolution seeking shareholders' approval for his re-appointment formspart of the Notice.
Mr. Nishant Dholakia was appointed as Chief Executive Officer of the Company w.e.fMarch 17 2022.
Mr. Arvind Agrawal has resigned from the post of Managing Director of the Company fromthe close of the working hours of March 312022.
Mr. Sharad Rustagi (DIN: 07232913) Independent Director of the Company resigned fromthe Board of the Company w.e.f. July 25 2022 due to preoccupation and confirmed thatthere is no other reason other than those stated in his resignation letter dated July 252022. Consequently Mr. Sharad Rustagi also ceased to be a member of Audit committeew.e.f. July 25 2022.
Ms. Udita Jhunjhunwala (DIN: 00120951) would be completing completed her second term asIndependent Director of the Company on September 17 2022. Ms. Udita Jhunjhunwala wouldalso ceased to be a member of Audit committee and Nomination and Remuneration Committeew.e.f. September 17 2022 due to expiry of her term as Independent Director.
Ms. Suchita Rajput has resigned from the post of Company Secretary and ComplianceOfficer of the Company with effect from October 3 2021. Ms. Shruti Shrivastava anassociate member of the Institute of Company Secretary of India has been appointed asCompany Secretary and Compliance Officer w.e.f October 30 2021 in her place.
Mr. Atul Joshi has resigned from the post of Chief Financial Officer of the Companyfrom the close of the working hours of July 31 2022. Mr. Suraj Bhatt CharteredAccountant has been appointed as the Chief Financial Officer of the Company w.e.f August12022 in his place.
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 Directors' 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 Directors' appointment andremuneration including the criteria for determining qualifications positive attributesindependence of a Director and other matters as required under sub-section (3) of Section178 of the Act is available on our website at http://www.galaxycloudkitchens.in/Corporate_Policies_and_Code.html#.YwzR93ZBwuU.
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and SEBIListing Regulations.
In a separate meeting of independent Directors performance of non-independentdirectors the Board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive Director and non-executive Directors. The Directorsexpressed their satisfaction with the evaluation process.
The Board and the Nomination Remuneration and Compensation Committee reviewed theperformance of individual Directors on the basis of criteria such as the contribution ofthe individual Director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc.
At the board meeting that followed the meeting of the Independent Directors and meetingof Nomination Remuneration and Compensation Committee the performance of the Board itsCommittees and individual Directors was also discussed. Performance evaluation ofIndependent Directors was done by the entire Board excluding the independent Directorbeing evaluated.
Moreover further detail regarding skill expertise and competencies of Directors aredisclosed in the Corporate Governance Report which forms part of this Annual Report.
Declaration by Independent Directors
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 alongwith Rules framed thereunder and Regulation 25 of Listing Regulations.
Director's Responsibility statement
Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowledge and ability confirm 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 at the end of the financial year and of the profitof the Company for 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.
Auditors and Auditor s' Report
At the thirty seventh AGM held on September 16 2019 the Members approvedre-appointment of S A R A & Associates Chartered Accountants (Registration No.120927W) as Statutory Auditors of the Company to hold office for a period of five yearsfrom the conclusion of that AGM till the conclusion of the forty second AGM of theCompany.
The Auditors' Report on the financial statements for the financial year ended March 312022 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.
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 2021-22.The Secretarial Auditors' Report forthe financial year 2021-22 is enclosed as (Annexure C') which forms part of thisReport. The said Secretarial Auditors Report does not contain any qualificationsreservations 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.
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') tothe Board's report.
Declaration by Executive Director and CEO
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.
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 2021-22 no complaints were received by the Company relatedto sexual harassment.
The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees in confirmation with Section 177(9) of the Act andRegulation 22 of Listing Regulations to report concerns about unethical behaviour. Thedetails of the policy have been disclosed in the Corporate Governance Report which is apart of this report and is also available onhttp://www.galaxycloudkitchens.in/Corporate_Policies_and_Code.html#.YwzR93ZBwuU.
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 Directors thank the Company's employees customers vendors investors and academicpartners for their continuous support. We place on record our appreciation for thecontribution made by our employees at all levels. Our consistent growth was made possibleby their hard work solidarity cooperation and support.
The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.
| || ||For and behalf of the Board of Directors |
| ||Nishant Dholakia ||Sunil Biyani |
| ||Executive Director and ||Director |
|Place: Mumbai ||Chief Executive Officer ||DIN: 00006583 |
|Date: July 26 2022 ||DIN: 05200058 || |