TO THE MEMBERS OF
GALAXY ENTERTAINMENT CORPORATION LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Galaxy EntertainmentCorporation Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the statement of changes in Equity for the year ended and asummary of significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance (including Other Comprehensive Income) cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards prescribed under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended and otheraccounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate 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 statements 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 the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's directors as well as evaluating the overall presentationof 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 2018 and its Loss (including other comprehensive income) its cash flows and changesin equity for the year ended on that date.
EMPHASIS OF MATTERS
1. Without qualifying our opinion we draw attention to Note No. 20(iii) to thefinancial statement wherein the Company had imported Capital Goods under the ExportPromotion Capital Goods Scheme of the Government of India at concessional rates of dutyon an undertaking to fulfill export obligation. The company has provided for the customduty of Rs.653.36 Lakhs in the previous financial year however the company has notprovided for the interest liability as the management is certain that the interestliability will not arise.
2. We draw attention to Note No. 21 to the financial statement wherein the Company haswritten off fixed assets and written back the credit balance during the previous financialyear based on order passed by Hon'ble High Court of Bombay dated July 20 2016 dismissingthe winding up petition filed by the creditor. However an appeal has been filed againstthe said order by the Creditor (petitioner) which is pending for admission.
3. Without qualifying our opinion we draw attention to the financial statement whereinthe Company has reported a net loss of Rs.1203.53/- Lakhs. The company incurredsubstantial loss during the year due to operational accumulated losses of the companyexceeded its paid-up capital and reserves and the company's current liabilities exceed itscurrent assets. The management of the company has represented that the business of thecompany cannot be affected materially on account of the aforesaid provisions and also thegoing concern concept.
Our Opinion is not modified in respect of these matters
REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act and according to the information and explanation given to us we give in the "AnnexureB" a statement on the matters 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 (including other comprehensiveincome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards specified Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 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 A".
g) With respect to the other matters to be included in Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our knowledge and belief and according to the information and explanations givento us:
i. The Company has disclosed the impact of pending litigations as at March 31 2018 onits 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
Date: May 16 2018
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 GalaxyEntertainment Corporation Limited ("the Company") as of March 31 2018 inconjunction with our audit of the financial 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientto company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial We conducted our audit in accordance with the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting (the "GuidanceNote") and the Standards on Auditing issued by ICAI and deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial 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 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 statements 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 statements 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 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 financial reporting were operating effectively as at March 31 2018 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
Date: May 16 2018
The Annexure referred to in our Independent Auditor's Report to the members of theCompany on the financial statements for the year ended 31st March 2018. 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 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 Clause3(iii)(a)(b)(c) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanation given to us duringthe year there are no loans investment guarantees and security given by the Company.Therefore the provisions of the Clause 3(iv) of the Order are not applicable to theCompany.
(v) In our opinion and according to the information and explanation given to us thecompany has not accepted any deposit from the public. Therefore provisions of the Clause3(v) of the order is not applicable to the Company.
(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 employee's state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand other material statutory dues with the appropriate authorities.
(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 2018 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 ||Sales Tax ||1668316 ||F.Y. 2003-04 ||Deputy Commissioner of Sales Tax |
|West Bengal Sales Tax ||Sales Tax ||81211 ||F.Y. 2011-12 ||Joint Commissioner of Sales Tax |
|Income Tax Act 1961 ||Income Tax ||2260 ||A.Y. 2011-12 ||ITAT |
| || ||1339320 ||A.Y. 2012-13 ||ITAT |
| || ||17410 ||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) 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.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly the provisionsof Clause 3(xii) of the Order are not applicable to the Company.
(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 wherever applicable and details of suchtransaction have been disclosed in the financial statements as required under IND AS 24Related Party Disclosures specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rule 2015.
(xiv) According to the information and explanation given to us by the management theCompany has complied with provisions of section 42 of the Companies Act 2013 in respectof the preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly to the information and explanationsgiven by management we report that the amounts raised have been used for the purposesfor which the funds were raised.
(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. Accordingly the provisions of Clause3(xv) of the Order are not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
For S A R A & Associates
Firm Regn No: 120927W
Membership No: 105153
May 16 2018