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Future Market Networks Ltd.

BSE: 533296 Sector: Others
NSE: FMNL ISIN Code: INE360L01017
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OPEN 8.85
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VOLUME 176401
52-Week high 23.55
52-Week low 7.50
P/E
Mkt Cap.(Rs cr) 48
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.85
CLOSE 8.79
VOLUME 176401
52-Week high 23.55
52-Week low 7.50
P/E
Mkt Cap.(Rs cr) 48
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Future Market Networks Ltd. (FMNL) - Auditors Report

Company auditors report

To the Members of

FUTURE MARKET NETWORKS LIMITED

Report on the Audit of Standalone Ind-AS Financial Statements

Opinion

We have audited the standalone Ind-AS financial statements of FutureMarket Networks Limited ('the Company') which comprise the Balance Sheet as at March312020 the Statement of Profit and Loss (including Other Comprehensive Income) thestandalone Cash Flow Statement and the standalone Statement of Changes in Equity for theyear then ended and notes to the Ind-AS financial statements including a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas 'the standalone Ind-AS financial statements').

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind-AS financial statements give theinformation required by the Companies Act 2013as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India including Ind-AS specified under section 133 of theAct of the state of affairs of the Company as at March 312020 its profit and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Standalone Ind-AS financialstatements under the provisions of the Companies Act 2013 and the Rules there-under andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the Ind AS financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Revenue Recognition :
The Company earns revenue from leasing out of commercial units / shops. Revenue pertaining to lease rents is recognized on straight line basis over the lease term in accordance with Ind AS 116. Contingent rent is that portion of the lease payments that is not fixed in amount but is based on the future amount of a factor that changes other than with the passage of time (eg. percentage of future sales amount of future use future price indices future market rates of interest). Such rent is recognised in the Statement of Profit & Loss in the period they are earned. As part of our audit we:
• Assessed the appropriateness of the accounting policies for revenue recognition the amount of revenue recognised as per the agreement
entered into with the tenants along with Ind AS 116. • Performed analytical procedures to identify deviations in monthly rent received from the tenants / lessees / sub-lessees.
• Performed substantive testing by verifying the implementation and operating effectiveness of controls over the data set collected by the management with regards to the revenue of shops and the computation of such contingent rent.
• Tested the design implementation and operating effectiveness of controls over the calculation of discount and rebates.
• Assessed the adequacy of the company's disclosures made in to the financial statements
Allowance for credit losses
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. As part of our audit we:
• Tested the effectiveness of controls over the development of the methodology for the allowance for credit losses including consideration of the current and estimated future economic conditions completeness and accuracy of information used in the estimation of probability of default and computation of the allowance for credit losses.
The Company considered current and anticipated future economic conditions relating to industry the Company deals with. In calculating expected credit loss the Company has also considered related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID -19.
• Verified the mathematical accuracy and computation of the allowances by using the same input data used by the Company.

Information Other Than the Financial Statements and Auditor's Reportthereon

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourauditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information; we are required to report that fact. We have nothing to report inthis regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Ind-AS Financial Statements

The Company's management and Board of Directors is responsible for thematters stated in Section 134(5) of the Act with respect to the preparation of thesestandalone Ind-AS financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind-AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind-AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Ind-AS financial statements management andBoard of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements

Our objectives are to obtain reasonable assurance about whether the IndAS financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theInd AS financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Ind AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theInd AS financial statements including the disclosures and whether the Ind AS financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the Ind ASfinancial statements for the year ended March 312020 and are therefore the key auditmatters. We describe these matters in our auditors' report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Other Matters

The corresponding financial information of the Company for the yearended March 31 2019 included in these Standalone Ind-AS financial statements are basedon the financial statements for the year ended March 312019 prepared in accordance withthe Companies (Indian Accounting Standards) Rules 2015 (as amended) which were audited byM/s. Viren Gandhi & Co. Chartered Accountants ("previous StatutoryAuditor") on which they expressed an unmodified opinion vide their report dated May212019 and the same was approved by the members of the Company on September 16 2019 inthe annual general meeting. (Also refer Note 36 to the standalone financial statements)

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central Government in terms of section 143 (11) ofthe Act we give in the "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable. As required by Section 143(3)of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) the Balance Sheet the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equitydealt with by this report are in agreement with the books of account;

d) In our opinion the aforesaid Ind-AS financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014;

e) On the basis of the written representations received from thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors are disqualified as on March 312020 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure A".

g) In our opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to its directors during the

current year is in accordance with the provisions of Section 197 of theAct. The remuneration paid to any director is not in excess of the limit laid

down under Section 197 of the Act.

h) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules

2014 in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements- Refer Note 38 on ContingentLiabilities to the standalone financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses as at March312020;

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

For S. K. Patodia & Associates
Chartered Accountants
Firm Registration Number: 112723W
Dhiraj Lalpuria
Place : Mumbai Partner
Date : June 30 2020 Membership Number: 146268 UDIN : 20146268AAAAIP6097

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1(f) under the heading "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members ofFuture Market Networks Limited

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financialreporting of Future Market Networks Limited ("the Company") as of March 312020in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as"the Act").

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our auditconducted in accordance with the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting (the "Guidance Note") and the Standards on Auditing asspecified under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both issued by the Institute of Chartered Accountants ofIndia (ICAI). Those Standards and the Guidance Note require that we comply with theethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting with reference tothese financial statements was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial control system over financial reporting andtheir operating effectiveness. Our audit of internal financial controls over financialreporting included operating and understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exist and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risk of material misstatement of the financial statement whether due tofraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls over financial reporting with reference to the standalone financialstatements of the Company.

Meaning of Internal Financial controls with Reference to FinancialStatements

6. A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements include those policies andprocedures that:

i. pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

ii. provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and

iii. provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or dispositions of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting With Reference to these Financial Statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and as suchinternal financial controls were operating effectively as at March 312020 based on theinternal financial controls with reference to standalone financial statements 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 (the "Guidance Note").

For S. K. Patodia & Associates
Chartered Accountants
Firm Registration Number: 112723W
Dhiraj Lalpuria
Place : Mumbai Partner
Date : June 30 2020 Membership Number: 146268
UDIN : 20146268AAAAIP6097

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members ofFuture Market Networks Limited

(i) (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of property plant &equipment.

(b) The Company has a regular programme of physical verification of itsproperty plant & equipment by which all property plant & equipment are verifiedin a phased manner. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Thefrequency of physical verification is reasonable and no material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the conveyance deed provided to uswe report that the title deeds comprising of all immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

(ii) As explained to us physical verification of inventory has beenconducted at reasonable intervals by the management and no material discrepancies werenoticed on physical verification.

(iii) In respect of the loans secured or unsecured granted by theCompany to companies firms limited liability partnerships or other parties covered inthe register maintained under Section 189 of the Act :

(a) In our opinion and the information given to us the terms andconditions of the loans given by the company are prima facie not prejudicial to theinterest of the Company.

(b) The schedule of repayment of principal and payment of interest hasbeen stipulated and repayments of principal amounts and/or receipts of interest have beenregular as per stipulations.

(c) There are no overdue amounts as at the year-end in respect of bothprincipal and interest.

(iv) In our opinion and according to the information and explanationgiven to us the Company has complied with the provisions of Section 185 and 186 of theAct in respect of loans making investments and providing guarantees and securities.

(v) According to the information and explanations given to us theCompany has not accepted any deposits from the public covered under Section 73 to 76 ofthe Act and accordingly paragraph 3(v) of the Order is not applicable.

(vi) To the best of our knowledge and as explained the CentralGovernment has not specified maintenance of cost records under sub-section (1) of section148 of the Act for the products of the Company.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company in our opinion the

Company is generally regular in depositing the undisputed statutorydues including provident fund employees' state insurance income-tax goods and servicestax cess and other material statutory dues as applicable with the appropriateauthorities.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company no undisputed amounts payablein respect of provident fund employees' state insurance income-tax goods and servicestax cess and other material statutory dues were outstanding as at March 312020 for aperiod of more than six months from the date they became payable.

(c) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of income tax sales tax goods& service tax duty of customs duty of excise or value added tax or cess which havenot been deposited on account of any dispute except as below :

Name of Statue Name of dues Amount (' in lakhs) Period to which amount relates Forum where the dispute is pending
Finance Act 1994 Service Tax 95.80 Prior to 2014 High Court
Income Tax Act 1961 Tax deducted at Source (TDS) 5.46 FY 2014-15 Commissioner of Income Tax (Appeals)

The above disputed service tax amount is due and payable by the thirdparty (Refer note 38)

(viii) According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to financial institution or banks at the balance sheet date. TheCompany does not have any loans or borrowings from Government. Further the Company hasnot issued any debentures. Accordingly the Paragraph 3(viii) of the order is notapplicable to the Company.

(ix) According to the information and explanations given to us and therecords of the Company examined by us the Company has not raised any money by way ofinitial public offer or further public offer (including debt instruments) and term loansduring the period. Accordingly provisions of Clause 3(ix) of the Order are not applicableto the company.

(x) According to the information and explanations given to us no fraudby the Company or fraud on the Company by its officers and employees has been noticed orreported during the course of our audit.

(xi) In our opinion and according to the information and explanationsgiven to us managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theAct.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company and accordingly the provisions of clause3(xii) of the Order are not applicable.

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions entered into by theCompany with the related parties are in compliance with Sections 177 and 188 of the Actwhere applicable and the details of related party transactions as required by theapplicable accounting standards have been disclosed in the standalone financialstatements.

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence the provisions of clause 3(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company in respect of which we are unableto comment on any potential implications for the reasons described therein the Companyhas not entered into non-cash transactions with directors or persons connected with them.Accordingly the provisions of clause 3(xv) of the Order are not applicable to theCompany.

(xvi) According to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly the provisions of clause 3(xvi) of the Order are not applicable tothe Company.

For S. K. Patodia & Associates
Chartered Accountants
Firm Registration Number: 112723W
Dhiraj Lalpuria
Place : Mumbai Partner
Date : June 30 2020 Membership Number: 146268 UDIN : 20146268AAAAIP6097

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