The Members of
Galaxy Cloud Kitchens Limited
(Formerly known as Galaxy Entertainment Corporation Limited)
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Galaxy Cloud Kitchens Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes to thefinancial statement including a summary of significant accounting policies and otherexplanatory information (herein after referred to as "the financialstatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312019 the loss and total comprehensiveloss changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditors Responsibilities for the Audit of the financial statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statement under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. We havedetermined that there are no key audit matters to communicate in our report.
Information Other than the Financial Statement and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report CorporateGovernance and Shareholder's Information but does not include the financial statementsand our auditor's report there on.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statement our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statement or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Financial Statement
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statement that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified under Section 133of the Act. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the financial statement management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility for the Audit of the Financial Statement
Our objectives are to obtain reasonable assurance about whether the financial statementas a whole are free from material misstatement whether due to fraud or error and toissue an auditor's report that includes our opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statement.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatement whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls system in place and the operating effectivenessof such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statement or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatement including the disclosures and whether the financial statement represents theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statement thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statement may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statement.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in the internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statement of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in the paragraphs 3 and 4 of theorder to the extent applicable.
(A) As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet the Statement of Profit and Loss including Other Comprehensiveloss Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account;
(d) In our opinion the aforesaid financial statement comply with the Indian AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the director isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B";
(B) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statement
(ii) The Company did not have any long-term contracts including derivative contractshence the question of making a provision for any resulting material foreseeable lossesdoes not arise; and;
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For S A R A & Associates
Firm Registration No: 120927W
Membership No: 105153
May 24 2019
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF GALAXYCLOUD KITCHENS LIMITED (FORMERLY KNOWN AS GALAXY ENTERTAINMENT CORPORATION LIMITED'ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31 2019
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) As explained to us a part of fixed assets have been physically verified by themanagement during the year in the phased periodical manner which in our opinion isreasonable having regard to the size of the company and the nature of its assets. Nomaterial discrepancies were noticed on such physical verification.
(c) Since the Company does not have any immovable properties therefore the provisionsof the Clause 3 (i) (c) of the Order are not applicable to Company.
ii. As explained to us inventory consisting of consumables and supplies has beenphysically verified by the management during the year and no material discrepancies werenoticed.
iii. The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore the provisions of the Clause 3 (iii)(a) (b) & (c) of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany has not advanced any loans to the parties covered under section 185 of the Act.The company has not given any loans and guarantees but has made investments in thesecurities of other body corporate within the limits specified by section 186 of the Act.
v. According to the information and explanations given to us the Company has notaccepted any deposits from the public as per the provisions of section 73 74 75 and 76or any other relevant provisions of the Act and the Rules framed there under to the extentnotified.
vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the company.
vii. (a) According to the information and explanations given to us and based on therecords of the Company examined by us in our opinion the Company is generally regular indepositing the undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Custom Duty Goods and Service Tax Cess and other materialstatutory dues as applicable with the appropriate authorities.
(b) According to the information and explanations given to us and based on the recordsof the Company examined by us in our opinion no undisputed amounts payable in respect ofProvident Fund Employees' State Insurance Income tax Custom Duty Goods and ServiceTax Cess and other material statutory dues as applicable were in arrears as at March 312019 for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us and based on the recordsof the Company examined by us the particulars of dues of Income Tax Service Tax SalesTax Customs Duty and Excise Duty Value Added Tax Goods and Service Tax Cess as atMarch 312019 which have not been deposited on accounts of any disputes are as follows:
|Name of the Statute ||Nature of Dues ||Amount in Thousands (Rs) ||Period to which the amount relates ||Forum where dispute is pending |
|Karnataka Sales Tax ||Sales Tax ||3364.06 ||F.Y. 2012-13 ||Deputy Commissioner of Sales Tax |
|West Bengal Sales Tax ||Sales Tax ||81.21 ||F.Y. 2011-12 ||Joint Commissioner of Sales Tax |
| || ||2.26 ||A.Y. 2011-12 ||ITAT |
|Income Tax Act 1961 ||Income Tax ||1339.32 ||A.Y. 2012-13 ||ITAT |
| || ||17.41 ||A.Y. 2013-14 ||Assistant Commissioner of Income Tax |
viii. According to the information and explanation given to us and on the basis of ourexamination of relevant records the company has not defaulted in repayment of loans orborrowings to financial institution bank government or dues to debenture holders as atthe balance sheet date.
ix. In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) during the year. The term loans have been applied for thepurposes for which they were obtained.
x. According to the information and explanations given to us no fraud by the Companyand no material fraud on the Company by its officers or employees has been noticed orreported during the year.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration during the year in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly reporting as per paragraph 3(xii) of theOrder is not required.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statement as required by the applicableIndian Accounting Standards.
xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the company has made preferential allotment ofshares and fully convertible debentures during the year. The requirement of Section 42 ofthe Companies Act 2013 have been complied with and the amount raised have been used forthe purposes for which the funds were raised
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with its directors or persons connected with them. Accordingly reporting asper paragraph 3(xv) of the Order is not required.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For S A R A & Associates
Firm Registration No: 120927W
Membership No: 105153
May 24 2019
Annexure B to Independent Auditor's Report
The Annexure referred to in paragraph 1(A)(f) under "Report on Other Legal andRegulatory Requirements" section of our report of even date
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of GalaxyCloud Kitchens Limited (Formerly known as 'Galaxy Entertainment Corporation Limited')("the Company") as of 31st March 2019 in conjunction with our audit of thefinancial statement of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by ICAI (the "Guidance Note") and the Standards on Auditing prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statement whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statement for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statement inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statement.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.
For S A R A & Associates
Firm Registration No: 120927W
Membership No: 105153
Mumbai May 24 2019.