50
th
ANNUAL REPORT 2015-2016 THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL
117
Limited by Guarantee and not having Share Capital) on the
consolidated financial statements for the year ended 31
st
March, 2016.
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Act
1. We have audited the internal controls over financial
reportingof
THEGEM&JEWELLERYEXPORTPROMOTION
COUNCIL (A Company Limited by Guarantee and not
having Share Capital) (hereinafter referred to as “the
Council”, “the Holding Company”) and its subsidiaries
(the Holding Company and its Subsidiaries together
referred to as “the Group”) and associates of the Holding
Company
as of 31
st
March, 2016 in conjunction with our audit
of the consolidated financial statements of the Council for the
year ended on that date.
Management’s Responsibility for Internal Financial
Controls
2. The management of the Holding Company and its
Subsidiary companies are responsible for establishing and
maintaining internal financial controls based on the internal
control over financial reporting criteria established by theCouncil
considering the essential components of internal control stated
in the Guidance Note on “Audit of Internal Financial Controls
Over Financial Reporting” issued by the Institute of Chartered
Accountants of India (ICAI). These responsibilities include the
design, implementations and maintenance of adequate internal
financial controls that were operating effectively for ensuring
the orderly and efficient conduct of its business, including
adherence to Council’s policies, the safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under
the Act.
Auditor’s Responsibility
3. Our responsibility is to express an opinion on the
Council’s internal financial controls over financial reporting
based on our audit. We conducted our audit in accordance
with the Guidance Note on “Audit of Internal Financial
Controls Over Financial Reporting” (the ‘’Guidance Note”)
and the Standards on Auditing deemed to be prescribed
under section 143(10) of the Act to the extent applicable to
an audit of internal financial controls, both applicable to an
audit of internal financial controls and both issued by the
ICAI. Those standards and the Guidance Note require that
we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting
was established and maintained and if such controls operated
effectively in all material respects.
4. Our audit involves performing procedures to obtain
audit evidence about the adequacy of the internal financial
controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing
the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected
depend on the auditor’s judgement, including the assessment
do risks of material misstatement of the financial statements,
whether due to fraud or error.
5. We believe that the audit evidence we have obtained
and the evidence obtained by other auditors in terms of their
report are sufficient and appropriate to provide a basis for
our audit opinion on the Council’s internal financial controls
system over financial reporting.
Meaning of Internal Financial Controls over Financial
Reporting
6. A company’s internal financial control over financial
reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles.
A company’s internal financial control over financial reporting
includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Council;
(ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Council
are being made only in accordance with authorisations of
management and directors of the Council; and
(iii) provide reasonable assurance regarding prevention
or timely detection of unauthorised acquisition, use, or
disposition of the Council’s assets that could have a material
effect on the financial statements.
Inherent Limitations of Internal Financial Controls over
Financial Reporting
7. Because of the inherent limitations of internal financial
controls over financial reporting, including the possibility of
collusion or improper management override of controls,
material misstatement due to error or fraud may occur and
not be detected. Also, projections of any evaluation of the
internal financial control over financial reporting may become
inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
Other Matters
8. The financial statements of the Holding Company also
include the accounts for the following Units / Divisions of the
Holding company
(i). the Regional Offices of the Council at Delhi, Jaipur,
Chennai, Kolkatta and Surat;
(ii). the Indian Gemological Institute, Delhi;
(iii). the Gem Testing Laboratory, Jaipur;
(iv). the Indian Institute of Gems and Jewellery at Manikanchan,
(v). the Jewellery Product Development Centre, Jaipur;
the Units / Divisions of the Council; which have not been
audited by us.
We did not audit the financial statements of the subsidiaries
of the Holding Company and its associate whose financial
statements reflect total assets of Rs.13,23,78,161/- and
Annexure “A” to Independent Auditors’ Report
