Annual Report 2019-2020
To The Members of Galaxy Cloud Kitchens Limited
(Formerly known as Galaxy Entertainment Corporation Limited) Report on the Audit of theFinancial Statements Opinion
We have audited the accompanying financial statements of Galaxy Cloud Kitchens Limited("the Company") which comprise the Balance Sheet as at March 31 2020 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 theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 the loss and totalcomprehensive loss 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 of the current period. We have determined thatthere are no key audit matters to communicate in our report.
Information Other than the Financial Statement and Auditor's Report Thereon TheCompany's Board of Directors is responsible for the preparation of the other information.The other information comprises the information included in the Management Discussion andAnalysis Board's Report including Annexure to Board's Report Corporate Governance andShareholder's Information but does not include the financial statements and our auditor'sreport there on. Our opinion on the financial statements does not cover the otherinformation and we do not 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 financial statementwhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 financial statementincluding the disclosures and whether the financial statement represents the underlyingtransactions 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 audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified 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
1. 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 2020 taken on record by the Board of Directors none of the director isdisqualified as on 31st March 2020 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate 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.
Annexure A to Independent Auditor's Report
Annual Report 2019-2020
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 2020
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 periodical manner which in our opinion is reasonablehaving regard to the size of the company and the nature of its assets.
No material 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 312020 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 31 2020 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 |
|West Bengal Sales Tax ||Sales Tax ||81.21 ||F.Y. 2011-12 ||Joint Commissioner of Sales Tax |
|Karnataka Sales Tax ||Sales Tax ||151.00 ||F.Y. 2014-15 ||Deputy Commissioner of Sales Tax |
|Service Tax ||Service Tax ||17922.00 ||F.Y. 2012-13 ||Additional Commissioner of Goods & Service 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 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 however the Company hasconverted the Compulsory Convertible Debentures issued in earlier years into Equity Sharesduring the year.
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.
Annexure B to Independent Auditor's Report Annual Report 2019-2020
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 2020 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by ICAI (the "Guidance Note")and the Standards on Auditing prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial 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 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 reporting to futureperiods are subject to the risk that the controls over internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 financialreporting were operating effectively as at 31st March 2020 based on the internalcontrol controls over financial reporting criteria established by the Company consideringthe essential components of internal Guidance Note on Audit of Internal Financial Controlsover Financial Reporting issued by the Institute of Chartered Accountants of India.