Page 112 - FBL AR 2019-20

Fermenta Biotech Limited
Annual Report 2019-20

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

[Referred to in paragraph 1(h) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date to the
members of Fermenta Biotech Limited (formerly known as DIL Limited)]

Report on the Internal Financial Controls Over and testing and evaluating the design and operating effectiveness of
Financial Reporting under Clause (i) of Sub- internal control based on the assessed risk. The procedures selected
section 3 of Section 143 of the Companies Act, depend on the auditor’s judgement, including the assessment
of the risks of material misstatement of the financial statements,
2013 (“the Act”) whether due to fraud or error.
We have audited the internal financial controls over financial We believe that the audit evidence we have obtained is sufficient
reporting of Fermenta Biotech Limited (formerly known as DIL and appropriate to provide a basis for our qualified opinion on
Limited) (“the Company”) as of March 31, 2020 in conjunction with the Company’s internal financial controls system over financial
our audit of the standalone financial statements of the Company for reporting.
the year ended on that date.
Meaning of Internal Financial Controls Over
Management’s Responsibility for Internal Financial Reporting
Financial Controls
A company’s internal financial control over financial reporting is a
The Company’s management is responsible for establishing and process designed to provide reasonable assurance regarding the
maintaining internal financial controls based on the internal control reliability of financial reporting and the preparation of financial
over financial reporting criteria established by the Company statements for external purposes in accordance with generally
considering the essential components of internal control stated accepted accounting principles. A company’s internal financial
in the Guidance Note on Audit of Internal Financial Controls Over control over financial reporting includes those policies and
Financial Reporting issued by the Institute of Chartered Accountants procedures that (1) pertain to the maintenance of records that, in
of India. These responsibilities include the design, implementation reasonable detail, accurately and fairly reflect the transactions and
and maintenance of adequate internal financial controls that were dispositions of the assets of the company; (2) provide reasonable
operating effectively for ensuring the orderly and efficient conduct assurance that transactions are recorded as necessary to permit
of its business, including adherence to company’s policies, the preparation of financial statements in accordance with generally
safeguarding of its assets, the prevention and detection of frauds accepted accounting principles, and that receipts and expenditures
and errors, the accuracy and completeness of the accounting of the company are being made only in accordance with
records, and the timely preparation of reliable financial information, authorisations of management and directors of the company; and
as required under the Companies Act, 2013. (3) provide reasonable assurance regarding prevention or timely
Auditor’s Responsibility detection of unauthorised acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial
Our responsibility is to express an opinion on the Company’s statements.
internal financial controls over financial reporting of the Company
based on our audit. We conducted our audit in accordance with Inherent Limitations of Internal Financial Controls
the Guidance Note on Audit of Internal Financial Controls Over Over Financial Reporting
Financial Reporting (the “Guidance Note”) issued by the Institute
of Chartered Accountants of India and the Standards on Auditing Because of the inherent limitations of internal financial controls over
prescribed under Section 143(10) of the Companies Act, 2013, financial reporting, including the possibility of collusion or improper
to the extent applicable to an audit of internal financial controls. management override of controls, material misstatements due to
Those Standards and the Guidance Note require that we comply error or fraud may occur and not be detected. Also, projections
with ethical requirements and plan and perform the audit to obtain of any evaluation of the internal financial controls over financial
reasonable assurance about whether adequate internal financial reporting to future periods are subject to the risk that the internal
controls over financial reporting was established and maintained financial control over financial reporting may become inadequate
and if such controls operated effectively in all material respects. because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Our audit involves performing procedures to obtain audit evidence
about the adequacy of the internal financial controls system over Basis for Qualified Opinion
financial reporting and their operating effectiveness. Our audit According to the information and explanations given to us and
of internal financial controls over financial reporting included based on our audit, a material weakness has been identified in
obtaining an understanding of internal financial controls over the Company’s internal financial controls over financial reporting
financial reporting, assessing the risk that a material weakness exists, in respect of the assessment of impairment in the carrying value

110