TO THE MEMBERS OF
GALAXY ENTERTAINMENT CORPORATION LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements ofGalaxy EntertainmentCorporation Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2016 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and information.
MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Companys Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation& presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Companys directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 and its loss and its cash flows for the year ended on that date.
EMPHASIS OF MATTERS
We draw attention to note 28(c) to the financial statement on capital goods importedunder the Export Promotion Capital Goods Scheme of the Government of India atconcessional rates of duty on an undertaking to fulfil export obligation by October 2015for which Company had sought an extension with Directorate General of Foreign Trade.
We draw attention to note 29 to the financial statement regarding winding up petitionfiled against the company under section 433(e) / 434 of Companies Act 1956 before theHonble High Court of Bombay. The matter is subjudice.
Our Opinion is not modified in respect of these matters
We draw attention to note 43(ii) to the financial statement regarding disposal ofentire investments held by the Company in its non-operative subsidiary companies based ona valuation report from an Independent Chartered Accountant. The sale price was less thanthe cost of acquisition of said shares.
Our Opinion is not modified in respect of these matters
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on thematters specified in the paragraph 3 and 4 of the Order.
2. 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the 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 March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) ofthe Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and operating effectiveness of such controls refer to ourseparate report in "Annexure B" and
g) With respect to the other matters to be included in Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:
i. The Company has disclosed the impact of pending litigations as at March 31 2016 onits financial statements refer Note no. 27 28 29 and 30 of the financial statements.
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 Regn No: 120927W
Membership No.: 105153
The Annexure referred to in our Independent Auditors Report to the members of theCompany on the financial statements for the year ended 31st March 2016. We report that;
(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 paragraph3(i)(c) of the order is not applicable.
(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 paragraph 3(iii)(a)(b)(c) of the Orderis not applicable.
(iv) In our opinion and according to the information and explanation given to us thereare no loans investment guarantees and security given by the Company thereforeparagraph 3(iv) of the order is not applicable.
(v) In our opinion and according to the information and explanation given to us thecompany has not accepted any deposit from the public. Therefore paragraph 3(v) of theorder is not applicable.
(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 the records ofthe Company examined by us in our opinion the Company is generally regular in depositingthe undisputed statutory dues including provident fund employees state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand other statutory dues with the appropriate authorities wherever applicable. Except forthe service tax amounting to Rs.22422 (inclusive of interest) which was outstanding for aperiod of more than six months from the date they became payable as on the last day of thefinancial year and subsequently paid by the Company.
(b) According to the information and explanation given to us and the records of theCompany examined by us the particulars of dues as at 31st March 2016 which has not beendeposited on account of dispute are as follows
|Name of the Statute ||Nature of Dues ||Amount (Rs.) ||Period to which the amount relates ||Forum where dispute is pending |
|Maharashtra Sales Tax || ||1668316 ||F.Y. 2003-04 ||Deputy Commissioner of Sales Tax |
|Maharashtra Sales Tax ||Sales Tax ||7492720 ||F.Y. 2008-09 ||Deputy Commissioner of Sales Tax |
|West Bengal Sales Tax || ||81211 ||F.Y. 2011-12 ||Joint Commissioner of Sale Tax |
| ||Income Tax Act 1961 ||Income Tax ||A.Y. 2012-13 ||Assistant Commissioner of Income |
| || ||17410 ||A.Y. 2013-14 ||Tax |
|Bangalore Sales Tax Act ||Entertainment Tax ||2004648 ||November 2006 to August 2007 ||Sales Tax |
(viii)In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of loans or borrowings to financial institutionbank government or dues to debenture holders.
(ix) The Company did not raised money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringcourse of our audit.
(xi) According to the information and explanation given to us and on the basis of ourexamination of relevant records no managerial remunerations were paid or provided by theCompany during the year under audit.
(xii) In our opinion the Company is not a nidhi Company. Therefore paragraph 3(xii)of the order is not applicable.
(xiii)According to the information and explanation given to us and on the basis of ourexamination of relevant records of the Company transactions with the related parties arein compliance with section 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed in the financial statements etc. as required by theapplicable Accounting Standards.
(xiv)According to the information and explanation given to us and on the basis of ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) According to the information and explanation given to us and on the basis of ourexamination of the records the company has not entered in to any non-cash transactionwith its directors or persons connected with him.
(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 Regn No: 120927W
Membership No: 105153
Annexure B to the Independent Auditors Report
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 reportingof GalaxyEntertainment Corporation Limited ("the Company") as of March 31 2016 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companys management is responsible for establishing and maintaining internalfinancial controls by the Company considering the essential components of internal controlstated in the overfinancial Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013
Our responsibility is to express an opinion on the Companys 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 Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgement including the assessment of the risks ofmaterial misstatement of the financial statements 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 Companys internal financial controlssystem over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 thecompanys assets that could have a material effect on the financial statements.
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 financialreporting were operating effectively as at March 31 2016 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 Regn No: 120927W
Membership No.: 105153