INDEPENDENT AUDITOR'S REPORT
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying standalone financial statements
of Future Consumer Limited ("the Company"), which comprise the
Balance sheet as at March 31, 2023, the Statement of Profit and Loss,
including the statement of Other Comprehensive Income, the Cash
Flow Statement and the Statement of Changes in Equity for the year
then ended, and notes to the standalone financial statements, including
a summary of significant accounting policies and other explanatory
information.
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter described
in the 'Basis for Qualified Opinion' section of our report, the aforesaid
standalone financial statements give the information required by the
Companies Act, 2013, as amended ("the Act") in the manner so required
and give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as at
March 31, 2023, its loss including other comprehensive income, its cash
flows and the changes in equity for the year ended on that date.
Basis for Qualified Opinion
As described in Note 50 to the standalone financial statements, due
to non-availability of financial information and ongoing dispute with
the JV partner, the Company is unable to determine the fair value of
Company's investments in Aussee Oats Milling Private Limited (joint
venture) and Aussee Oats India Private Limited (step down joint venture)
as at March 31, 2023. In absence of sufficient and appropriate evidence,
we are unable to comment on the carrying value of above investments
(including investments, loans and other assets) amounting to Rs.
9,164.90 lakhs and the consequent impact thereof.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing (SAs), as specified under
section 143(10) of the Act. Our responsibilities under those Standards
are further described in the 'Auditor's Responsibilities for the Audit of
the Standalone Financial Statements' section of our report. We are
independent of the Company in accordance with the 'Code of Ethics'
issued by the Institute of Chartered Accountants of India together with
the ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Act and the Rules thereunder,
and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified audit opinion on the standalone financial statements.
Material Uncertainty Related to Going Concern
We refer to Note 48 to the standalone financial statements, the
Company has incurred a loss before taxes of Rs. 54,770.40 lakhs
(including exceptional items) for the year ended March 31, 2023 and
has a net capital deficiency of Rs. 13,234.74 lakhs as at March 31, 2023.
The Company has also suffered consistent downgrades in its credit
ratings, as a result of which the Company's ability to raise funds has
been significantly impaired, with normal business operations being
substantially curtailed. In addition, the Company has defaulted in
repayment of loans and interest thereon to banks and consequently
the lenders have classified the Company's account as Non performing
asset. The Company has been unable to conclude re-negotiations or
obtain replacement financing or monetise its assets as agreed with the
lenders. These conditions, along with other matters, set forth in said
note, indicate the existence of a material uncertainty that may cast
significant doubt about the Company's ability to continue as a going
concern. As explained in aforesaid note, management is of the view that
the appropriateness of Going concern assumption is dependent upon
Company's ability to arrange sufficient liquidity by monetisation of its
assets and other strategic initiatives including fresh investment to meet
its obligations. Our opinion is not modified with respect to this matter.
Emphasis of Matter
We draw attention to Note 49 to the standalone financial statements,
which more fully describes certain forensic audits that have been
initiated on the Company, by SEBI and by lenders, which are currently in
progress. Our conclusion is not modified in respect of the above matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the standalone financial
statements for the financial year ended March 31, 2023. These matters
were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to the
matter described in the 'Basis for Qualified Opinion' section and in
the 'Material Uncertainty Related to Going Concern' section, we have
determined the matters described below to be the key audit matters to
be communicated in our report. For each matter below, our description
of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor's
responsibilities for the audit of the standalone financial statements
section of our report, including in relation to these matters. Accordingly,
our audit included the performance of procedures designed to respond
to our assessment of the risks of material misstatement of the
standalone financial statements. The results of our audit procedures,
including the procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying standalone
financial statements.
Other Information
The Company's Board of Directors is responsible for the other
information. The other information comprises the Director's Report
and it's annexure, Business Responsibility and Sustainability report and
Management Discussion and Analysis Report, but does not include the
standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover
the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the standalone financial statements,
our responsibility is to read the other information and, in doing so,
consider whether such other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Management for the Standalone Financial
Statements
The Company's Board of Directors is responsible for the matters stated
in section 134(5) of the Act with respect to the preparation of these
standalone financial statements that give a true and fair view of the
financial position, financial performance including other comprehensive
income, cash flows and changes in equity of the Company in accordance
with the accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under section 133 of
the Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the
standalone financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is
responsible for assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the
Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial
Statements
Our objectives are to obtain reasonable assurance about whether
the standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the
standalone financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we
are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls with reference
to standalone financial statements in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management's use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company's
ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the standalone financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or
conditions may cause the Company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures, and
whether the standalone financial statements represent the
underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the
audit of the standalone financial statements for the financial year
ended March 31, 2023 and are therefore the key audit matters. We
describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would
reasonably be 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, 2020 ("the
Order"), issued by the Central Government of India in terms of sub¬
section (11) of section 143 of the Act, we give in the "Annexure 1"
a statement on the matters specified in paragraphs 3 and 4 of the
Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and except for the matter described in the Basis
for Qualified Opinion paragraph, obtained all the information and
explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b) Except for the matter described in the Basis for Qualified Opinion
paragraph, in our opinion, proper books of account as required by
law have been kept 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
the Statement of Other Comprehensive Income, the Cash Flow
Statement and Statement of Changes in Equity dealt with by this
Report are in agreement with the books of account;
(d) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, in our opinion, the aforesaid
financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Companies
(Indian Accounting Standards) Rules, 2015, as amended;
(e) The going concern matter described in Material Uncertainty
Related to Going Concern paragraph above, the matter described
in the Basis for Qualified Opinion paragraph above, in our opinion,
may have an adverse effect on the functioning of the Company;
(f) On the basis of the written representations received from the
directors as on March 31, 2023 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2023
from being appointed as a director in terms of Section 164 (2) of the
Act;
(g) The qualification relating to the maintenance of accounts and
other matters connected therewith are as stated in the Basis for
Qualified Opinion paragraph and paragraph (b) above;
(h) With respect to the adequacy of the internal financial controls with
reference to standalone financial statements and the operating
effectiveness of such controls, refer to our separate Report in
"Annexure 2" to this report;
(i) In our opinion, the managerial remuneration for the year ended
March 31, 2023 has been paid / provided by the Company to its
directors in accordance with the provisions of section 197 read with
Schedule V to the Act.
(j) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended in our opinion and 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 financial position in its standalone financial statements
- Refer Note 37 to the standalone financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material
foreseeable losses;
iii. There are no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company
iv. a) The management has represented that, to the best
of its knowledge and belief, other than as disclosed in
the note 51 (v) to the standalone financial statements,
no funds have been advanced or loaned or invested
(either from borrowed funds or share premium or any
other sources or kind of funds) by the Company to or
in any other person or entity, including foreign entities
("Intermediaries"), with the understanding, whether
recorded in writing or otherwise, that the Intermediary
shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner
whatsoever by or on behalf of the Company ("Ultimate
Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of
its knowledge and belief, other than as disclosed in the
note 51 (vi) to the standalone financial statements, no
funds have been received by the Company from any
person or entity, including foreign entities ("Funding
Parties"), with the understanding, whether recorded in
writing or otherwise, that the Company shall, whether,
directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on
behalf of the Funding Party ("Ultimate Beneficiaries") or
provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have
been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has
caused us to believe that the representations under sub¬
clause (a) and (b) contain any material misstatement.
v. No dividend has been declared or paid during the year by
the Company.
vi. As proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014 is applicable for the Company only w.e.f. April
1, 2023, reporting under this clause is not applicable.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Pramod Kumar Bapna
Partner
Membership Number: 105497
UDIN: 23105497BGXBOA3273
Place of Signature: Mumbai
Date: May 30, 2023
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