Page 176 - FBL AR 2019-20

Fermenta Biotech Limited
Annual Report 2019-20

ANNEXURE 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 Our audit involves performing procedures to obtain audit evidence
Financial Reporting under Clause (i) of Sub- about the adequacy of the internal financial controls system over
section 3 of Section 143 of the Companies Act, financial reporting and their operating effectiveness. Our audit
of internal financial controls over financial reporting included
2013 (“the Act”) obtaining an understanding of internal financial controls over
In conjunction with our audit of the consolidated financial financial reporting, assessing the risk that a material weakness exists,
statements of the Company as of and for the year ended March 31, and testing and evaluating the design and operating effectiveness of
2020, we have audited the internal financial controls over financial internal control based on the assessed risk. The procedures selected
reporting of Fermenta Biotech Limited (formerly known as DIL depend on the auditor’s judgement, including the assessment
Limited) (hereinafter referred to as “the Parent”) and its subsidiary of the risks of material misstatement of the financial statements,
companies (excluding an associate which is unaudited), which are whether due to fraud or error.
companies incorporated in India, as of that date. We believe that the audit evidence we have obtained and the

Management’s Responsibility for Internal audit evidence obtained by the other auditors of the subsidiary
Financial Controls companies, which are companies incorporated in India, in terms
of their reports referred to in the Other Matter paragraph below, is
The respective Board of Directors of the Parent and its subsidiary sufficient and appropriate to provide a basis for our qualified opinion
companies, which are companies incorporated in India, are on the internal financial controls system over financial reporting
responsible for establishing and maintaining internal financial of the Parent and its subsidiary companies, which are companies
controls based on the internal control over financial reporting incorporated in India.
criteria established by the respective Companies considering the
essential components of internal control stated in the Guidance Meaning of Internal Financial Controls Over
Note on Audit of Internal Financial Controls Over Financial Financial Reporting
Reporting issued by the Institute of Chartered Accountants of India A company’s internal financial control over financial reporting is a
(ICAI). These responsibilities include the design, implementation process designed to provide reasonable assurance regarding the
and maintenance of adequate internal financial controls that were reliability of financial reporting and the preparation of financial
operating effectively for ensuring the orderly and efficient conduct statements for external purposes in accordance with generally
of its business, including adherence to the respective company’s accepted accounting principles. A company’s internal financial
policies, the safeguarding of its assets, the prevention and detection control over financial reporting includes those policies and
of frauds and errors, the accuracy and completeness of the procedures that (1) pertain to the maintenance of records that, in
accounting records, and the timely preparation of reliable financial reasonable detail, accurately and fairly reflect the transactions and
information, as required under the Act. dispositions of the assets of the company; (2) provide reasonable
Auditor’s Responsibility assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
Our responsibility is to express an opinion on the internal financial accepted accounting principles, and that receipts and expenditures
controls over financial reporting of the Parent and its subsidiary of the company are being made only in accordance with
companies, which are companies incorporated in India, based authorisations of management and directors of the company; and
on our audit. We conducted our audit in accordance with the (3) provide reasonable assurance regarding prevention or timely
Guidance Note on Audit of Internal Financial Controls Over Financial detection of unauthorised acquisition, use, or disposition of the
Reporting (the “Guidance Note”) issued by the Institute of Chartered company’s assets that could have a material effect on the financial
Accountants of India and the Standards on Auditing, prescribed statements.
under Section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls. Those Standards Inherent Limitations of Internal Financial Controls
and the Guidance Note require that we comply with ethical Over Financial Reporting
requirements and plan and perform the audit to obtain reasonable
assurance about whether adequate internal financial controls over Because of the inherent limitations of internal financial controls over
financial reporting was established and maintained and if such financial reporting, including the possibility of collusion or improper
controls operated effectively in all material respects. management override of controls, material misstatements due to
error or fraud may occur and not be detected. Also, projections

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