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annual
report
20
16-17
kajaria
ceramics
corporate
overview
management
reports
Financial
statements
be prescribed under section 143(10) of the Companies Act,
2013, to the extent applicable to an audit of internal financial
controls, both issued by the Institute of Chartered Accountants
of India. 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.
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
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud
or error. We believe that the audit evidence we have obtained
and the audit evidence obtained by the other auditors in terms
of their reports referred to in the Other Matters paragraph
below, is sufficient and appropriate to provide a basis for our
audit opinion on the Company’s internal financial controls
system over financial reporting.
Meaning of Internal Financial Controls Over Financial
Reporting
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
(1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company;
(2) 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 company are
being made only in accordance with authorisations of
management and directors of the company;
(3) provide reasonable assurance regarding prevention or timely
detection of unauthorised acquisition, use, or disposition of
the company’s assets that could have a material effect on
the financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
Because of the inherent limitations of internal financial controls
over financial reporting, including the possibility of collusion
or improper management override of controls, material
misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal
financial controls over financial reporting to future periods
are subject to the risk that 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.
Opinion
In our opinion, the Holding Company and its subsidiary
companies which are companies incorporated in India, have,
in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial
controls over financial reporting were operating effectively as
at March 31, 2017, based on the internal control over financial
reporting criteria established by the Company 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.
Other Matters
Our aforesaid report under Section 143(3)(i) of the Act on the
adequacy and operating effectiveness of the internal financial
controls over financial reporting insofar as it relates to six
subsidiary companies, which are companies incorporated in
India, is based on the corresponding reports of the auditors of
such companies incorporated in India.
For
O. P. Bagla & Co.
Chartered Accountants
Firm Regn No. 000018N
(Atul Bagla)
Place : New Delhi
Partner
Dated : 15 May, 2017
Membership No. 91885