AIROX TECHNOLOGIES PRIVATE LIMITED

Internal Controls Over Financial Reporting (ICOFR)

Risk and Control Matrix - Procurement to Payment
Period April 1, 2022 to March 31, 2023

Key Risk Events Control objective Control Description/ Control Activities (P)reventive/
Control Type On Frequency as On Control Owner as On
S.No Control Reference Process Sub process 2021-22 Assertion* Key/NonKey (D)etective
2022-23 2022-23 2022-23
control
Ineffective Material Requirement Planning of production For effective Material Requirement planning company has a
Planning (MRP) leading to stock out / material as per the sales plan standard excel file which is used for preventing stock out situation.
Material Requirment excess stock situation. In this file Sales team and stores shares input required for planning
1 P1 Purchase C,A Non Key Control P M On Occurrence Head of Purchase
Planning of procurement , this input's are analysed by purchase team.

Fictitious Vendors are added to To create error free Vendor 1. New vendor code is created in tally by authorized personnel in
Vendor Master.Critical information Master, avoid duplicate Vendor Purchase department i.e, Purchase officer on the basis of Vendor
entered in Vendor Master is Masters for the same Vendor form and supporting documents received and Head of Purchase will
Vendor Creation or incorrect/incomplete/unauthorized/ and all the data in the Masters approve physical copy after ensuring correct details are entered.
2 P2 Purchase modification and Duplicate Vendor Accounts are is complete with adequate back E,R&O Key Control P M On Occurrence Head of Purchase
created. up documentation. 2. Changes/Modifications to the
selection
vendor master are done by purchase officer on the basis of details
received through Vendor form/mail from vendor and Head of
Purchase will approve the physical copy after ensuring correct
details are entered.
Requisition raised by unauthorised Only authorised personnel can For Goods : Purchase requisition is raised by purchase officer which
personnel raise Purchase requisition is approved by Head of Purchase.
For Spares : Purchase requisition is raised by
3 P3 Purchase Purchase Requisitions service engineer which is approved by Head of Purchase. O,C, Key Control P M On Occurrence Head of Purchase
For
Others : Purchase requisition is raised by respective Head of
departments which is then approved by Head of Purchase.
Quotations are not analysed and Quotations to be analysed and For capital items, Minimum 3 quotations are obtained for subsequent
orders are placed. accordingly orders are placed. value and Quotation evaluation sheet is prepared where quotations
received are evaluated by purchase officer and finally vendor is Head of Purchase,
4 P4 Purchase Quotations O,A Non Key Control P M On Occurrence
approved by Head of Purchase, Manager F&A& CFO. Manager F&A& CFO.

PO is raised by unauthorized person All POs are raised by PO is raised by purchase officer and approved by Head of Purchase
Preparation of Purchase Inaccurate/duplicate purchase order appropriate authority against after reviewing all the details with supporting documents including
5 P5 Purchase O,A,C Key Control P M Ongoing Head of Purchase
Order approved purchase requisitions Purchase requisition.

Raw Material received are not All Raw material received are For Raw material & Fixed Assets : At security gate, entry is done in
recorded / recorded incorrectly. recorded accurately and timely. inward register and GRN, Invoice number is mentioned against each
Ineffective monitoring of short / entry. Stores head reviews and physically signs off gate inward
Invoicing and Receipt of excess receipt of material. register on weekely basis to ensure gate inward entries have GRN Weekly & Stores Head & Head
6 P6 Purchase O,A,C,CO Non Key Control P M
goods and Invoice number mapped to it. Head of Purchase reviews and Monthly of Purchase
monitors on monthly basis invoice is created for every GRN.

Invoicing and Receipt of Invoices are not approved by All invoices recorded are Invoices are approved by Purchase head which is recorded by
7 P7 Purchase O,A,C,CO Key Control P M Ongoing Head of Purchase
goods appropriate personnel approved. Purchase officer.
Spares received are not recorded / All Spares received are For spares : Delievery Challan is issued by service engineer once
Invoicing and Receipt of recorded incorrectly. Unauthorised approved and recorded spares are received. Purchase invoice is recorded by purchase officer
8 P8 Purchase O,A,C Key control P M Ongoing Head of Purchase
goods Invoices are recorded accurately & timely. on the basis of signed DC and approved by Head of Purchase

Inventory quantities recorded in the Expenses/ purchases booked For goods: At the time of inward, gate entry is done in inward
inventory system do not agree to correctly and are valid and in register. Head of Purchase does 3 way matching between GRN/DC,
9 P9 Purchase Recording of Invoice physical quantities received, inventory the same period. PO and Invoice on weekely basis and signs off. O,A,C,CO Key Control D M Ongoing Head of Purchase
rate do not agree to purchase order For expenses/services: Head of Purchase
rates reviews and signs off two way matching between PO and Invoice
Payable balances are not reflected All Payables are recorded are copy.
Reconciliation with balance confirmation & Subledger is prepared by
10 P10 Purchase Recording payables correctly in financial statements. correct and valid purchase officer every quarter which is reviewed & approved by E,C,V,R&O,A Key Control D M Quarterly Head of Purchase
Head of Purchase.
Account payable transactions and Appropriate forex rate to be As disclosed on RBI website, creditors are reinstated as per closing
balances in foreign currency are not used for ledgers with balance rate at every quarter end by assistant manager F&A and such
11 P11 Purchase Payment to Vendors translated at the correct exchange rate payable in foreign currency entry/working is reviewed and approved by CFO. A,C,V Key Control P M Quarterly CFO

Treatment of MSME vendors are not To assure company has Purchase officer sends the email to all new/existing vendors
done accurate and appropriately identified all MSME vendors. requesting to provide MSME certificates if any. On the basis of
12 P12 Purchase Payment to Vendors certificate received vendor is treated as MSME. Ultimate E,P&D Key Control P M Ongoing/Yearly Finance Manager
classification is reviewed and physically approved by Manager F&A.

Payment to Vendors is not made To ensure accurate and timely

within the credit period. Payment is payment to vendors A payment proposal is prepared by the Head of Purchase and
made to the wrong account. Payment physical approval is sought from the CFO. After approval, statutory
made is not accurate/ authorized department checks whether the GST returns are filed appropriately
13 P13 Purchase Payment to Vendors by the vendor. Then, the pending list of payment is reconciled with E,C,A,R&O Key Control P/D M Weekly CFO
ledgers by the Asst. Manager Accounts and payment is made by
Asst. Manager F&A through cash and cheque or net banking
respectively. The payments are made every week on friday.

All transactions in the sub ledger are To ensure that purchase and Manager F&A prepares montly reconciliation of purchase register &
not recorded in the general ledger accounts payable sub ledger Accounts Payable with general ledgeres which is verified and
14 P14 Purchase Payment to Vendors and/or the accounts balances are tallying with GL approved by CFO C,A Key Control D M Monthly CFO
balances.
Payments made do not relate to valid To ensure that all payments All payments are linked to appropriate invoices/ vouchers. Monthly,
business expenses, obligations or relate to business invoices, finance Officer extracts a report of payments and analyse whether
15 P15 Purchase Payment to Vendors payess obligation or payees. A,C Key Control D M Monthly Manager F&A
each of them are duly linked with appropriate invoices and the same
is authorised by Manager F&A.
Unauthorised Purchase return are All Purchase return are Purchase return is raised by Service Engineer/ Respective HOD
16 P16 Purchase Purchase Return made authorised which is then reviewed and approved by Purchase Head and O, C, A Non Key Control P M On Occurrence Purchase Head
accordingly podted by Purchase officer once approved.
Unauthorised R&D purchases are Ensure R&D purchase are R&D purchase request is raised by R&D Head which is then
17 P17 Purchase R& D Purchase made. authorised. reviewed by purchase head and approved by MD. Further O,C,A Key Control P M On Occurrence MD
procurement is same as Purchase of Goods.
Advance payment to Unauthorised Advances are promised All advances are authorised Advances to vendors request is raised by Purchase head which is
18 P18 Purchase to vendors and documented properly O,C,A Key Control P M On Occurrence Purchase Head
vendors approved by CFO.
Purchase made by sevice engineer are Purchase made by Service Service engineer raises miscellaneous requirements for spares
unauthorised or outside the engineers are approved as well which are reviewed by Purchase head and on analysing if purchase
reimbursement limit of purchases as within the approved limit. head consider that it is liable to purchase it from local then
Local purchase by made by them. Purchase head approves the request and accordingly Service
19 P19 Purchase E,C,A Key Control P M On Occurrence Purchase Head
Service Engineer engineer buys the spares from local and takes reimbursement.

Excess/ under provisioning may result Calcualtion of Provision must Finance officer takes provisioning details from various stakeholders
in incorrect financial reporting. be on the basis of valid on monthly basis.On the basis of details received finance officer
Provisions are not backed by working assumption and workings. prepares provision working and this working is physically reviewed
20 P20 Purchase Provision by finance manager and approved by CFO. E,C,V,A Key control P M Monthly Finance Manager