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Notes to Accounts of Galaxy Cloud Kitchens Ltd.

Mar 31, 2018

Notes on Financial Statements for the year ended March 31, 2018

The fair value of the long-term borrowing from bank with floating-rate of interest is not impacted due to interest rate changes and will not be significantly different from their carrying amounts as there is no significant change in the underlying credit risk of the company''s borrowing (since the date of inception of the loans). Further, the company has no long-term Borrowings with fixed rate of interest.

Note 28: Financial risk management

The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company''s risk are reviewed regularly to reflect changes in market conditions and the Company''s activities.

A. Market Risks

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk.

The company is not significantly exposed to foreign currency risk. Moreover, the company has no investments in equity shares thus the company is not exposed to price risk also.

(a) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, management of the Company performs a corporate interest rate risk.

According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or 20 basis point decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

The exposure of the Company''s borrowing to interest rate changes at the end of the reporting period are as follows:

ft in thousand)

Particulars

As at 31st March, 2018

As at 31st March, 2017

Variable rate borrowings

33,007.70

181,825.52

Percentage of variable rate borrowings to total borrowings

100%

100%

Total Borrowings

33,007.70

181,825.52

Sensitivity

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.

Interest rates - increase by 100 basis points*

330.08

1,818.26

Interest rates - decrease by 20 basis points*

66.02

363.65

B. Credit Risks

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities primarily trade receivables and from its loans and advances and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the company''s established policy, procedures and control relating to customer credit risk management.

The Company measures the expected credit loss of trade receivables and loan & advances customers wise based on historical trend. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

Movement in provisions of doubtful debts ft in thousand)

Particulars

As at 31st March, 2018

As at 31st March, 2017

Opening provision

1,212.39

1,212.39

Add:- Additional provision made

-

-

Less:- Provision write off

-

-

Less:- Provision reversed Closing provisions

-

-

1,212.39

1,212.39

Movement in provisions of doubtful Loans & Advance

Opening provision

1,711.92

1,711.92

Add:- Additional provision made

-

-

Less:- Provision write off

-

-

Less:- Provision reversed

-

-

Closing provisions

1,711.92

1,711.92

Financial Assets are considered to be of good quality and there is no significant increase in credit risk C. Liquidity Risk:

Liquidity risk is the risk that the company will face in meeting its obligations associated with its financial liabilities. The company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions. A material and sustained shortfall in our cash flow could undermine the company''s credit rating and impair investor confidence.

The following table shows the maturity analysis of the company''s financial liabilities based on contractually agreed undiscounted cash flows as at the balance sheet date:

Maturity patterns of liabilities: ft in thousand)

Particulars As at 31st March, 2018

Less than 12 months

More than 12 months

Total

Trade payables

147,497.54

-

147,497.54

Borrowings

35,747.27

-

35,747.27

Other Non Financial liabilities

6,479.38

-

6,479.38

As at 31st March, 2017

Trade payables

211,104.01

-

211,104.01

Borrowings

102,397.88

135,286.48

237,684.36

Other Non Financial liabilities

6,632.85

-

6,632.85

D. Capital Management

The Company aim to manages its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize returns to our shareholders.

The capital structure of the Company is based on management''s judgment of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company does not distribute dividends to the shareholders.

Note 29: Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief finance officer of the Company. Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in Ind AS -108.

The Company has identified two reportable segments viz. Leisure and Entertainment Services and Trading. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with following additional policies for segment reporting:

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Common assets and liabilities which can not be allocated to any of the business segment are shown as unallocable assets / liabilities.

(a) Description of segments and principal activities

(i) Leisure and Entertainment Services: Under this segment the company is offers variety of facilities such as bowling, pool and video games, restaurant services, bakery, food court etc.

(ii) Trading Merchandise: Under this segment the company deals in trading of merchandise.

(b) Segment Details

The company operates as a two segment. The segment revenue is measured in the same way as in the statement of profit or loss.

(^ in thousand) Particulars

Year Ended 31st March, 2018

Year Ended 31st March, 2017

Segment Revenue Leisure and Entertainment Services

403,465.14

24,653.03

Trading Merchandise

1,778.09

392,828.79

Total Segment Revenue

405,243.23

417,481.82

Segment Result

Leisure and Entertainment Services

(08,243.45)

(122,000.38)

Trading Merchandise

4.26

111.77

Total

(108,239.19)

(121,888.61)

Less: Other un-allocable expenditure net off un-allocable income

(12,113.54)

(20,086.86)

Total Profit Before Tax

(120,352.73)

(141,975.47)

Segment Assets

Leisure and Entertainment Services

252,826.53

159,688.68

Trading Merchandise

3,259.71

153,742.74

Total Segment Assets

256,085.24

313,431.42

Segment Liabilities

Leisure and Entertainment Services

261,253.71

300,283.87

Trading Merchandise

-

164,920.28

Total Segment Liabilities

261,253.71

465,204.15

Note 30: Earnings per share

Particulars

Year Ended

(X in thousand) Year Ended

31st March, 2018

31st March, 2017

(a) Basic and diluted earnings per share

Profit attributable to the equity holders of the company

(120,352.73)

(141,975.47)

Total basic earnings per share attributable to the equity holders of the company

(120,352.73)

(141,975.47)

(b) Weighted average number of shares used as the denominator

Weighted average number of equity shares used as the denominator in calculating basic and diluted earnings per share

17,959,497

15,649,935

Earning Per Share - Basic and diluted ( Face value of ? 10 Per Share)

(6.70)

(9.07)

Note 31: Balances of Trade Receivable and Payables are subject to confirmations and reconciliation.

Note 32: In the opinion of the Board, all assets other than fixed assets and non-current investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated.

Note 33 : The figures for the previous financial year are re-classified / re-arranged / re-grouped, wherever necessary, to correspond with the current period''s classification / disclosure.


Mar 31, 2016

1. Capital and Other Commitments

a) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for '' Nil (Previous Year '' Nil)

28. Contingent Liabilities not provided for:

a) In respect of guarantees provided by Company''s banker on behalf of the Company of '' 11,138,459 (Previous Year '' 11,296,459)

b) In respect of disputed tax demand not provided as following:

c) The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rates of duty, on an undertaking to fulfill export obligation by October 2015 or such other dates as may be permitted by DGFT. Outstanding as at balance sheet date is '' 65,396,367 (Previous Year '' 66,316,951).

2. Winding Up Petition

A winding up petition has been filed by Manjiro Works against the company under Section 433 (e)/434 of the Companies Act, 1956 before the Hon''ble High Court of Bombay.

The company has imported certain gaming machinery from Manjiro Works, Japan in the year 2007. The company made part payments against the delivery of machinery and due to delay in delivery of shipments of machineries and damage of certain parts of machineries, the balance payment were disputed is yet to be admitted.

3. The demand notice from Sales Tax Authority (Agra) was challenged by the Company and the same was set aside vide orders dated December 29, 2015 passed by Additional Commissioner Grade II (Appeal), Sales Tax Agra and referred for reassessment.

4. Going Concern Assumption

An entity is viewed as continuing in business for the foreseeable future. General purpose financial statements are prepared on a going concern basis, unless management either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so.

Based on the projections made by the Company considering the new business plans the Company hope to better the financial position in the coming financial years.

5. Segment Reporting

The Company has identified two reportable segments viz. Restaurants, Gaming & Others and Trading. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with following additional policies for segment reporting.

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

Notes:

1) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) taking into account the organization''s structure as well as the differential risks and returns of these segments.

2) The Company has disclosed Business Segment as the primary segment and type of products and services in each segment:

3) The revenue and results figure given above are directly identifiable to respective segments and expenditure on common services incurred at the corporate level are not directly identifiable to respective segments have been shown as "Other Un-allocable Expenditure".

4) The other Information figures given above are directly identifiable to respective segments and information for corporate services for head office and investments related to acquisitions have been shown as "Others Un-allocable".

6. Deferred Tax Asset/ (Liability):

On a conservative basis, the Company has not recognized any deferred tax asset on unabsorbed business losses/unabsorbed depreciation during the current year.

7. Related Party Disclosure:

In accordance with the Accounting Standard 18 on "Related Party Disclosure" notified under the Companies (Accounting Standard) Rules, 2014, as amended, the relevant information for the year ended March 31, 2016 is as under.

(i) List of related parties where control exists and related parties with whom transactions have taken place and relationships:

Sr. Name of the Related Party Nature of Relationship No.

1 Future Retail Limited Enterprises where control exists through substantial equity interest

2 Rain fruits & More Pvt. Ltd. Subsidiaries up to 31st March 2016

3 Galaxy Rain Restaurants Pvt. Ltd. Subsidiaries up to 31st March 2016

4 Vikas Kedia Key Managerial Personnel

8. Based on the available information with the management, the Company does not owe any sum to suppliers who are registered as Micro, Small, Medium Enterprise as at March 31, 2016 in terms of the provisions of "The Micro, Small, Medium Enterprise Development Act, 2006".

9. In respect of amounts payable to overseas creditors for import of certain gaming machinery all liability has been provided in the respective year of imports and the management believes no further liability is to be recorded in respect of such imports.

10. Balances of Trade Receivable and Payables are subject to confirmations and reconciliation.

11. In the opinion of the Board, all assets other than fixed assets and non-current investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated.

12. i. During the year, the company has sold its entire investments held in its non-operative subsidiaries viz

Galaxy Rain Restaurants Private Limited and Rain Fruits & More Private Limited hence the consolidation of accounts are not made.

ii. The Sale consideration received towards the sale of investments held by the Company in Rain Fruits & More Private Limited was based on fair value derived by an independent Chartered Accountant in practice; vide valuation report dated January 2, 2016, which was less than the cost of acquisition of the said investment.

13. Prior year comparative:

The figures for the previous financial year are re-classified / re-arranged / re-grouped, wherever necessary, to correspond with the current period''s classification / disclosure.


Mar 31, 2015

1. Capital and Other Commitments

a) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. Nil (Previous Year Rs. 12,213,561)

2. Contingent Liabilities not provided for:

a) In respect of guarantees given by Company's banker on behalf of the Company of Rs. 11,296,459 (Previous Year Rs. 11,298,459)

3. Winding Up Petition

A winding up petition has been fled by Manjiro Works against the company under Section 433 (e)/434 of the Companies Act, 1956 before the Hon'ble High Court of Bombay.

The company had ordered certain gaming machinery from Manjiro Works in the year 2007 but there was no Specific contract executed amongst the parties. The company made part payments against the delivery of machinery and due to delay in delivery of shipments of machineries and damage of certain parts of machineries, the balance payments were disputed and the petition is yet to be admitted.

4. Going Concern Assumption

The enterprise is normally viewed as a going concern, that is, as continuing in operation for the foreseeable future. It is assumed that the enterprise has neither the intention nor the necessity of liquidation or of curtailing materially the scale of the operations.

5. Segment Reporting

The Company has identified two reportable segments viz. Restaurants, Gaming & Others and Trading. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with following additional policies for segment reporting.

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments.

Notes:

1) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) taking into account the organization's structure as well as the differential risks and returns of these segments.

2) The Company has disclosed Business Segment as the primary segment and type of products and services in each segment:

3) The revenue and results figure given above are directly identifiable to respective segments and expenditure on common services incurred at the corporate level are not directly identifiable to respective segments have been shown as "Other Un-allocable Expenditure".

4) The other Information figures given above are directly identifiable to respective segments and information for corporate services for head office and investments related to acquisitions have been shown as "Others Un-allocable".

6. Deferred Tax Asset/ (Liability):

On a conservative basis, the Company has not recognized any deferred tax asset on unabsorbed business losses/unabsorbed depreciation during the current year.

7. Related Party Disclosure

In accordance with the Accounting Standard 18 on "Related Party Disclosure" notified under the Companies (Accounting Standard) Rules, 2006, as amended, the relevant information for the year ended March 31, 2015 is as under. Names of related parties and description of relationship:

8. Employee Benefits:

The Company has classified various Benefits provided to employees as under:

(i) Defined Contribution Plans: Company's contribution to the provident fund scheme is recognised during the year in which the related service is rendered with the following amounts in the financial Statement:

9. Based on the available information with the management, the Company does not owe any sum to suppliers who are registered as Micro, Small, Medium Enterprise as at March 31, 2015 in terms of the provisions of "The Micro, Small, Medium Enterprise Development Act, 2006".

10. In respect of amounts payable to overseas creditors for import of certain gaming machinery all liability has been provided in the respective year of imports and the management believes no further liability is to be recorded in respect of such imports.

11. Balances of Debtors and Creditors are subject to Confirmations and reconciliation.

12. In the opinion of the Board, all assets other than fixed assets and non-current investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated.


Mar 31, 2014

1. Background

Galaxy Entertainment Corporation Limited (''the Company'') was incorporated on August 13, 1981. It operates leisure and entertainment centers across the country and as at the balance sheet date it has 28 centers offering a variety of facilities such as bowling, pool and video games, restaurant services, bakery, food court, etc. Further, during the year 2013-14, the company has undertaken trading activity.

2. Capital and Other Commitments

a) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 12,213,561 (Previous Year Rs. Nil).

b) Other Commitment

The Company has entered into certain non-cancellable agreements with landlord for premises. Commitment toward the same is Rs. NIL (Previous Year Rs. 6,51,000).

3. Contingent Liabilities not provided for

a) In respect of guarantees given by Company''s banker on behalf of the Company of Rs.11,298,459 (Previous Year Rs. 11,398,459).

b) In respect of disputed tax demand not provided as following:

Particulars 2013-2014 2012-2013

Entertainment Tax Demand 20,04,648 1,603,718

Indirect Tax Demand

2003-2004 16,68,316 2,168,316

2008-2009 74,92,720 7,492,720

Income Tax

A.Y. 2009-2010 33,56,688 Nil

c) Claims on accounts of service tax on rental premises consequent to retrospective charge of service on renting activity by Finance Act 2010. Amount which is not demanded has not been provided.

d) The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rates of duty, on an undertaking to fulfll export obligation by October 2015. Outstanding as at balance sheet date is Rs. 66,316,951 (Previous Year Rs. 66,316,951).

4. Going Concern Assumption

The enterprise is normally viewed as a going concern, that is, as continuing in operation for the foreseeable future. It is assumed that the enterprise has neither the intention nor the necessity of liquidation or of curtailing materially the scale of the operations.

5. Segment Reporting

Since incorporation the Company operated in a single business segment of Leisure and Entertainment services. However, during the year it has done trading activity in Fabric also. Thus, this disclosure is applicable. As per geographical segment, the Company operates in a single reportable geographical segment, i.e. within India.

Notes:

1) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) taking into account the organization''s structure as well as the differential risks and returns of these segments.

2) The Company has disclosed Business Segment as the primary segment and type of products and services in each segment.

3) The revenue and results figures given above are directly identifable to respective segments and expenditure on common services incurred at the corporate level are not directly identifable to respective segments have been shown as "Other Un-allocable Expenditure".

4) The Other Information figures given above are directly identifable to respective segments and information for corporate services for head office and investments related to acquisitions have been shown as "Others Un-allocable".

6. Deferred Tax Asset/(Liability)

On a conservative basis, the Company has not recognized any deferred tax asset on unabsorbed business losses/unabsorbed depreciation during the current year.

7. Related Party Disclosure

In accordance with the Accounting Standard 18 on "Related Party Disclosure" notifed under the Companies (Accounting Standard) Rules, 2006, as amended, the relevant information for the year ended March 31, 2014 is as under. Names of related parties and description of relationship:

I. Entities where control exists - Subsidiaries:

a) Rain Fruits & More Pvt. Ltd. ("RFMPL")

b) Galaxy Rain Restaurants Pvt. Ltd. ("GRRPL")

II. Entity where control exists through substantial equity interest:

a) Future Retail Limited ("FRL") (formally known as "Pantaloon Retail (I) Limited")

b) Future Value Retail Limited ("FVRL") (Merged with "Future Retail Limited")

8. Based on the available information with the management, the Company does not owe any sum to suppliers who are registered as Micro, Small, Medium Enterprise as at March 31, 2014 in terms of the provisions of "The Micro, Small, Medium Enterprise Development Act, 2006".

9. In respect of amounts payable to overseas creditors for import of certain gaming machinery all liability has been provided in the respective year of imports and the management believes no further liability is to be recorded in respect of such imports.

10. Balances of Debtors and Creditors are subject to confirmations and reconciliation.

11. In the opinion of the Board, all assets other than fixed assets and non-current investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated.

12. The Company made investments in National Saving Certifcates (NSC) in the name of Managing Director of the company and the same has been pledged with excise authority at Mumbai (Maharashtra) on behalf of the company. The interest accrued on such investment will be accounted for on maturity.


Mar 31, 2013

1. Background

Galaxy Entertainment Corporation Limited (''the Company'') was incorporated on August 13, 1981. It operates leisure and entertainment centers across the country and as at the balance sheet date it has 17 centers offering a variety of facilities such as bowling, pool and video games, restaurant services, bakery, food court, etc.

2. Capital and Other Commitments

a) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. Nil (Previous Year Rs. Nil).

b) Other Commitment

The Company has entered into certain non-cancellable agreements with landlord for premises. Commitment toward the same is Rs. 651,000 (Previous Year Rs. 2,170,000).

3. Contingent Liabilities not provided for:

a) In respect of guarantees given by Company''s banker on behalf of the Company of Rs. 11,398,459 (Previous Year Rs. 11,533,959)

b) In respect of disputed tax demand not provided as following:

Particulars 2012-2013 2011-2012 Rupees Rupees

Entertainment Tax Demand 1,603,718 1,603,718

Indirect Tax Demand

2003-2004 2,168,316 2,168,316

2008-2009 7,492,720 -

c) Claims on accounts of service Tax on rental premises consequent to retrospective charge of service on renting activity by Finance Act 2010. Amount which is not demanded has not been provided.

d) The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rates of duty, on an undertaking to fulfill export obligation by October 2015. Outstanding as at balance sheet date is Rs. 529, 663,942 (Previous Year Rs. 529,663,942).

4. Going Concern:

The Statutory Auditors had made an observation in their audit report for the year ending 31 March, 2012 as the going concern assumption due to complete erosion of net worth. The Company has turned around during the year and there is no negative net worth as on 31 March, 2013.

5. The Board of Directors of the Company has decided to transfer, sell and/or dispose off 5 centres of Sports Bar Undertaking operated by the Company in terms of business transfer agreement dated 28th March 2012, The approval of Shareholders of the Company under the provision of section 293(1) (a) read with section 192A is also given, As the agreement is subject to certain conditions, the disclosure required under Accounting Standard 24-"Discontinuing Operations" will be made after fulfillment of such conditions.

6. The Company operates in a single business segment of Leisure and Entertainment services. Further, the Company operates in a single reportable geographical segment, i.e. within India.

7. Deferred Tax Asset/(Liability):

On a conservative basis, the Company has not recognized any deferred tax asset on unabsorbed business losses/unabsorbed depreciation during the current year.

8. In accordance with the Accounting Standard 18 on "Related Party Disclosure" notified under the Companies (Accounting Standard) Rules, 2006, as amended, the relevant information for the year ended March 31, 2013 is as under:

Names of related parties and description of relationship:

I. Entities where control exists - Subsidiaries: Rain Fruits & More Pvt. Ltd. ("RFMPL") Galaxy Rain Restaurants Pvt. Ltd. ("GRRPL")

II. Entity where control exists through substantial equity interest: Pantaloon Retail (India) Ltd. ("PRIL")

III. Key Managerial Personnel:

M r. Rohinton Rabady (April – September)

9. Based on the available information with the management, the Company does not owe any sum to suppliers who are registered as Micro, Small, Medium Enterprise as at March 31, 2013 in terms of the provisions of "The Micro, Small, Medium Enterprise Development Act, 2006".

10. In respect of amounts payable to overseas creditors for import of certain gaming machinery all liability has been provided in the respective year of imports and the management believes no further liability is to be recorded in respect of such imports.

11. The agreement for certain premises occupied by the Company has expired during the year the Company is in the process of executing revised agreements.

12. During the year the Company has assigned/transferred the Brand "Sports Bar Express". The brand was self generated and hence had no cost of acquisition. The amount receivable on such assignment has been disclosed under Other Operating Income.

13. Balances of Debtors and Creditors are subject to confirmations and reconciliation.

14. In the opinion of the Board, all assets other than fixed assets and non-current investments have value on realisation in the ordinary course of business at least equal to the amount at which they are stated.


Mar 31, 2012

1. Background

Galaxy Entertainment Corporation Limited ('the Company') was incorporated on August 13,1981. It operates leisure and entertainment centres across the country and as at the balance sheet date it has 14 centres offering a variety of facilities such as bowling, pool and video games, restaurant services, etc.

2. Capital and Other Commitments

a) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. Nil (Previous Year Rs. Nil).

b) Other Commitment

The Company has entered into certain non-cancellable agreements with landlord for premises. Commitment toward the same is Rs. 2,170,000 (Previous Year Rs. 648,252).

3. Contingent Liabilities not provided for:

a) In respect of guarantees given by banks of Rs. 11,533,959 (Previous Year Rs. 10,383,500)

b) In respect of disputed tax demand not provided as following:

Particulars 2011-2012 2010-2011 Rupees Rupees

Entertainment Tax Demand 1,603,718 -

Indirect Tax Demand 2,168,316 2,168,316

c) Claims on accounts of service Tax on rental premises consequent to retrospective charge of service on renting activity by Finance Act 2010. Amount which is not demanded has not been provided.

d) The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rates of duty, on an undertaking to fulfill export obligation by October 2015. Outstanding as at balance sheet date is Rs. 529,663,942 (Previous Year Rs. 529,663,942).

4. Improvements to Leasehold Premises at Colaba are depreciated at 5%, being the written down value rate applicable to Buildings as per Schedule XIV of the Companies Act, 1956. The lease agreement in respect of the premises is for 9 years respectively. The Company has, however, decided to depreciate the asset in accordance with the rates laid down in Schedule XIV, since the Company considers this to be, effectively, a long term arrangement and expects to renew the agreement for longer periods after the expiry of the agreement. In case of other centers, company has decided to depreciate the assets over a period of 9 years which is based on primary lease term.

5. Going Concern:

The Company is incurring losses for last few years, and its accumulated losses at the last date of the financial year exceeded the net worth of the Company and its net worth has been completely eroded. The Company has restructured its business in the past years and is also considering viable expansion/restructuring plans. The company has neither the intention nor the necessity of liquidating or of curtailing materially the scale of its operations. Therefore, these accounts have been prepared on the going concern assumption.

6. The Board of Directors of the Company has decided to transfer, sell and/or dispose off 5 centres of Sports Bar Undertaking operated by the Company to a potential purchaser, together with all its assets, rights, liabilities/obligations of all nature and kind along with its employees on a going concern basis as a slump sale. The company has entered into a "Business Transfer - Payment of Advance Agreement" with the purchaser and pursuant to the said agreement has received an advance of Rs. 25,000,000. The said amount received is shown under Note No. 10-Other Current Liabilities. on Financial Statements for the Year Ended March 31, 2012

The said transaction is subject to the approval of shareholders of the company under the provisions of Section 293(l)(a) read with Section 192Aand such other applicable provisions, if any, of the Companies Act, 1956.

7. The Company operates in a single business segment of Leisure and Entertainment services. Further, the Company operates in a single reportable geographical segment.

8. Deferred Tax Asset/(Liability):

On a conservative basis, the Company has not recognized any deferred tax asset/(liability) pertaining to the currentyear.

9. In accordance with the Accounting Standard 18 on "Related Party Disclosure" notified under the Companies (Accounting Standard) Rules, 2006, as amended, the relevant information for the year ended March 31,2012 is asunder:

Names of related parties and description of relationship:

I. Entities where control exists - Subsidiaries: Rain Fruits&MorePvt. Ltd. CRFMPL") Galaxy Rain Restaurants Pvt. Ltd. ("GRRPL")

II. Entity wherecontrol existsthrough substantial equity interest: Pantaloon Retail (India) Ltd. CPRIL")

III. Key Managerial Personnel: Mr.RohintonRabady

10. Based on the available information with the management, the Company does not owe any sum to suppliers who are registered as Micro, Small, Medium Enterprise as at March 31,2012 in terms of the provisions of "The Micro, Small, Medium Enterprise Development Act, 2006".

11. In the opinion of the Board, all assets other than fixed assets and non-current investments have value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

12. As notified by the Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956, is applicable to the financial statement for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended March 31, 2012 are prepared in accordance with the revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of the Revised Schedule VI.


Mar 31, 2011

1. BACKGROUND

Galaxy Entertainment Corporation Limited ('the Company') was incorporated on August 13, 1981. It operates leisure and entertainment centres across the country and as at the balance sheet date it has 20 centers offering a variety of facilities such as bowling, pool and video games, restaurant services, etc.

2. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. Nil (Previous year Rs.Nil).

3. a) Contingent liabilities not provided for in respect of guarantees given by banks of Rs. 10,383,500 (Previous Year Rs. 10,937,600)

b) The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme, of the Government of India, at concessional rates of duty on an undertaking to fulfill export obligation by October 2015. Outstanding as at balance sheet date is Rs.529,663,942 (Previous Year Rs. 529,663,942).

c) Claims on accounts of service Tax on rental premises consequent to retrospective charge of service on renting activity by Finance Act 2010. Amount not ascertained.

4. Improvements to Leasehold Premises at Colaba is depreciated at 5%, being the written down value rate applicable to Buildings as per Schedule XIV of the Companies Act, 1956. The lease agreement in respect of the premises is for 9 years respectively. The Company has, however, decided to depreciate the asset in accordance with the rates laid down in Schedule XIV, since the Company considers this to be, effectively, a long term arrangement and expects to renew the agreement for longer periods after the expiry of the agreement. In case of other centers, company has decided to depreciate the assets over a period of 9 years which is based on primary lease term.

5. Vide Notification no: SO 301(E) dated 08/02/2011 issued by MCA.The Company has availed exemption from the disclosure requirements under para 3(i) (a) & 3(ii)(d) of Part III of Schedule VI with respect to figures of sales and purchases. The Board of Directors has given consent with regard to non-disclosure of information.

6. The Company operates in a single business segment of Leisure and Entertainment services. Further, the Company operates in a single reportable geographical segment.

7. Deferred Tax Asset/(Liability): - On a conservative basis, the Company has not recognized any deferred tax asset /(liability) pertaining to the current year.

8. Related party disclosures

In accordance with the Accounting Standard 18 on "Related Party Disclosure" issued by the ICAI, the relevant information for the year ended March 31,2011 is asunder:

Names of related parties and description of relationship:

I. Entities where control exists - Subsidiaries:

Rain Fruits & More Pvt. Ltd. ("RFMPL") Galaxy Rain Restaurants Pvt. Ltd. CGRRPL")

II. Entity where control exists through substantial equity interest:

Pantaloon Retail (India) Ltd. ("PRIL")

III. Key Managerial Personnel

Mr.Rohinton Rabady

9. The Company has classified various benefits provided to employees as under:

II. Defined Benefit Plans

a. Contribution to Gratuity Fund (Non-Funded Scheme)

b. Leave Encashment (Non - Funded Scheme)

10. Based on the available information with the management, the Company does not owe any sum to a small scale industrial undertaking as defined in clause (j) to section 3 of the Industries (Development and Regulation) Act, 1951 and there are no suppliers who are registered as Micro, Small, Medium Enterprise as at March 31,2011 in terms of the provisions of "The Micro, Small, Medium Enterprise Development Act, 2006".

11. In the opinion of the management, the current assets, loans and advances and current liabilities are of the value stated, if realized/paid in the ordinary course of business. The provision for depreciation on fixed assets and provision for all known liabilities is adequate and is not in excess of amounts considered reasonably necessary.

12. Previous year's figures have been regrouped where necessary to conform to current year's classification.


Mar 31, 2010

1. Background

Galaxy Entertainment Corporation Limited (the Company) was incorporated on August 13, 1981. It operates leisure and entertainment centers across the country and as at the balance sheet date it has 23 centers offering a variety of facilities such as bowling, pool and video games, restaurant services, etc.

2. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs Nil (Previous year Rs.20,097,830).

3. a) Contingent liabilities not provided for in respect of guarantees given by banks of Rs. 10,937,600 (Previous Year Rs. 11,902,559).

b) The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme, of the Government of India, at concessional rates of duty on an undertaking to fulfill export obligation of Rs.529,663,942 outstanding as at balance sheet date (Previous Year Rs. 529,663,942).

c) Claims on accounts of Service Tax on rental premises consequent to retrospective charge of service on renting activity by Finance Act 2010. Amount not ascertained.

4. Improvements to Leasehold Premises at Lower Parel and Colaba are depreciated at 5%, being the written down value rate applicable to Buildings as per Schedule XIV of the Companies Act, 1956. The lease agreement in respect of these premises is for 12 and 9 years respectively. The Company has, however, decided to depreciate the asset in accordance with the rates laid down in Schedule XIV, since the Company considers this to be, effectively, a long term arrangement, and expects to renew the agreement for longer periods after the expiry of the agreement. In case of other centers, company has decided to depreciate the assets over a period of 9 years which is based on primary lease term.

5. The Department of Company Affairs has vide its order no. 46/80/2010-CL/HI dated April 30, 2010 granted exemption for the financial year ending on March 31, 2010 from disclosing the quantitative details required by paragraph 3(i)(a) [in respect of turnover] subject to income from wine and liquor to be shown under separate sub-head under the head income and 3(ii)(d) [in respect of opening and closing stock, purchases, sales and consumption of raw material] subject to consumption of provisions, wine and smokes to be shown under the following two sub-heads respectively of Part II of Schedule VI to the Companies Act, 1956 in respect of the Company:

6. The Company operates in a single business segment of Leisure and Entertainment services. Further, the Company operates in a single reportable geographical segment.

7. Contingent Liabilities

Particulars 2009-2010 2008-2009 Rupees Rupees

Income Tax Demand 4,042,964 4,042,964

Indirect Tax Demand 2,168,316 2,168,316

8. Related Party Disclosures

In accordance with the Accounting Standard 18 on "Related Party Disclosure" issued by the ICAI, the relevant information for the year ended March 31,2010 is as under:

Names of related parties and description of relationship:

I. Entities where control exists - Subsidiaries: Rain Fruits & More Pvt. Ltd. ("RFMPL") Galaxy Rain Restaurants Pvt. Ltd. ("GRRPL")

II. Entity where control exists through substantial equity interest: Pantaloon Retail (India) Ltd. ("PRIL")

III. Key Managerial Personnel

Mr. Sanjay Seksaria (Whole Time Director)

The following are the volume of transactions with related parties during the year and outstanding balances as at the year end disclosed in aggregate by type of related party:

9. The Company has classified various benefits provided to employees as under: I. Defined Contribution Plans

Provident Fund

The Company has recognized the following amounts in Profit and Loss Account:

II. Defined Benefit Plans

a. Contribution to Gratuity Fund (Non-Funded Scheme)

b. Leave Encashment (Non-Funded Scheme)

In accordance with the Accounting Standard (AS 15) (Revised 2005), actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:

Discount Rate (per annum) 8%

Rate of increase in compensation levels (per annum) 10%

The actuarial valuations have been done without giving effect to the enhanced limit of Gratuity payable from Rs. 350,000 to Rs. 1,000,000, the resulting effect of which is not quantifiable.

10. Based on the available information with the management, the Company does not owe any sum to a small scale industrial undertaking as defined in clause (j) to section 3 of the Industries (Development and Regulation) Act, 1951 and there are no suppliers who are registered as Micro, Small, Medium Enterprise as at March 31, 2010 in terms of the provisions of "The Micro, Small, Medium Enterprise Development Act, 2006".

11. In the opinion of the management, the current assets, loans and advances and current liabilities are of the value stated, if realized/paid in the ordinary course of business. The provision for depreciation on fixed assets and provision for all known liabilities is adequate and is not in excess of amounts considered reasonably necessary.

12. Previous years figures have been regrouped where necessary, to conform to current years classification.

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