Risk Risk COSO Spreads Transacti

Control- Aim of Financial Control Key- Location of

Sl No Risk ID Risk (WCGW) Assessment Assessment Control description Compone heets on Control Owner Manual / IT Frequency
ID Control Assertion type Control Control
Likelihood Significance nt used Type

Control
Completen
Environm
ess,
ent /
Completenes Existence
Risk
s, &
Assessme Ongoing /
Accuracy, Occurrence
Expected, nt / Weekly /
Critical, Validity, , Rights &
Likely, Informatio Preventiv Routine/ Monthly /
Material, Restricted Obligations
Feasible, n& e/ Yes / No Yes / No Non - Manual / IT Quarterly /
Significant, Access, , Valuation
Unlikely or Communi Detective Routine Half yearly /
Relevant Safeguardin &
Remote cation / Annual /
g of Assets, Measureme
Monitorin Ad hoc
Anti Fraud, nt,
g/
Compliance Presentatio
Control
n&
Activities
Disclosure

1 3.01 The Company has not Unlikely Critical 3.01A Registration Certificate is obtained for the company in respect of Compliance Not Control P No No Non- Head - Service Tax Corporate M One-time
obtained Centralized all applicable services. In case of change in Legislation (Finance Applicable Environme Routine
Registration Certificate for Bill), or when a new service is provided or when a new location is nt
all services rendered by it. to be registered, CTT revises the registration certificate as
applicable, to include the new services or to add the new location.

2 3.02 Changes/Amendments in Unlikely Material 3.02A Changes/Amendments in Rules, Procedures & Statutory Compliance, Not Control P No No Non- Head - Service Tax Corporate M Ad Hoc
Rules, Procedures & provisions are communicated by mail by the CTT as and when the Accuracy, Applicable Activities/ Routine
Statutory provisions are not legislation changes. Validity Information
tracked and &
communicated. Communic
ation

3 3.03 Tax rates are not updated Unlikely Material 3.03A Changes in tax rates are informed by CTT to the BPE team and Compliance, Valuation Control P Yes No Non- Head - Service Tax Corporate M Ad Hoc
in SAP whenever there is CTT ensures that the amended rates are updated in the SAP. Accuracy, and Activities/ Routine
change in tax laws. BPE sends a mail confirmation regarding the changes made. Validity Measureme Information
nt &
Post negative list based Service tax regime, CTT team in Communic
coordination with BPE, will create new tax codes for specific ation
requirements.

Based on applicability, buyer/user, will raise a request for

maintenance of conditions for above tax codes, at Vendor level
and service order level.

CTT approves the Service order level tax condition maintenance

request and the same will be maintained by MDM team.

CTT will advice BPE for blocking the tax codes not applicable.
(effective from November,12).

4 3.04 Service tax is not correctly
paid or not paid within the
due date on all taxable
services (Outward
services and reverse
charge).
Unlikely Relevant 3.04A Service tax is paid within due date on all taxable Services( as a Compliance, Completene Control P No Yes Routine Head - Service Tax Corporate M Monthly
service provider as well as as a service recipient under reverse Completenes ss, Rights & Activity
charge) as per the amended Service tax rules. (Eg. scientific & s Obligations
technical consultancy in API, renting of premises, manpower
services, Security services, cab operator by other than body
corporate and legal services by an individual advocate).

Confirmation from all BUs is obtained on a monthly basis as to

the services performed to assess whether any such service is
taxable.

The volume of the transactions are very minimal.

5 3.04 Service tax is not correctly Unlikely Relevant 3.04B Mails are circulated every month to all the Business Compliance, Completene Control P Yes Yes Routine Head - Service Tax Corporate M Monthly
paid or not paid within the units/Associated enterprises requesting them to provide the details Validity ss / Activitiy
due date on all taxable of all the Debit notes raised on DRL India for the period as Rights &
services. (Associated applicable. Obligations
enterprises)
Based on the above, service tax to be paid is calculated and
accrual entries are provided to respective BUs. A Control sheet is
maintained with respect to the debit notes in respect of which
Service Tax is booked and paid under reverse charge.

When opinion is given as regards the International payments

under Form 1 or 2, as the case may be pertaining to Associated
entities, the corresponding entry is marked/highlighted as the case
may be and the Service Tax opinion for that payment is given as
Nil by mentioning the SAP document no. through which already
the service tax liability was discharged.

6 3.04 Service tax is not correctly Unlikely Material 3.04C The invoices are processed by Genpact PTP team, which follows Compliance, Completene Control P Yes Yes Routine Head - Service Tax Corporate/ M Monthly
paid or not paid within the the guidelines of CTT for accounting the transactions relating to Validity ss / Activitiy Genpact
due date on all taxable GTA. The Genpact PTP team while processing the bill adopts the Rights & PTP
services. (GTA Services) applicable tax codes such as GTA FH & YH. Based on the same Obligations
the applicable service tax liability is booked.

During the month end CTT collects the physical copy of the GTA
bills and verifies the service tax booked.

For any deviations, CTT proposes necessary entry to Genpact

PTP team.

Accordingly, service tax liability is discharged along with other

liabilities by 6th of the following month.

7 3.04 Service tax is not correctly Unlikely Relevant 3.04D In case of the services received from foreign service provider, DRL Compliance, Completene Control P Yes Yes Routine Head - Service Tax Corporate M Monthly
paid or not paid within the is liable to pay service tax under reverse charge as per the Validity ss / Activitiy
due date on all taxable applicable rules. In case of foreign payments the same are being Rights &
services. (Foreign routed through CTT by way of FORM-1 / FORM-2 wherein CTT Obligations
Payments) confirms the applicability of Service tax on such transactions.

Genpact PTP team, while processing the payments, recognises

the appropriate liability in service tax payable account.

During the month end CTT reviews the transactions and discharge
the service tax liability along with other liabilities by 6th of the
following month.
8 3.04 Service tax is not correctly Unlikely Relevant 3.04E CTT prepares monthly service tax payable reconciliation and Completenes Completene Control P Yes No Routine Head - Service Tax Corporate/ M Monthly
paid or not paid within the forwards the same to Head- Service tax for his review and s ss / Activitiy Central
due date on all taxable approval of payment. Based on the same CTT advices the Rights & processing
services (Outward service Genpact PTP team along with applicable accounting codes for Obligations team
and reverse charge). discharging the total liability.

9 3.05 Service Tax is not Unlikely Significant 3.05A The balances in Service Tax Input Credit interim account is Accuracy, Valuation Control P Yes Yes Routine Head - Service Tax Corporate M Monthly
distributed on eligible categorized into the following broad areas: Validity and Activity
services or Service Tax Measureme
relating to Ineligible a) Direct credit pertaining to eligible Profit Centers as identified, nt
services/products is out of which the amounts pertaining to ineligible plants such as
distributed. PPG, FTO6, CTO1, CTO2, FTO1, CPS are set aside and
necessary entries for expensing off will be sent to respective BUs
at the end of every month before period closure. The list of
ineligible plants is periodically reviewed, for additions/deletions if
any. In addition to ineligible plants, certain Direct profit centers are
considered as Common/Ineligible, as these are in combination
with BUs/ineligible Plants.

b) In the common Profit Centers also, the ineligible services such

10 3.05 Service Tax is not
distributed on eligible
services or Service Tax
relating to Ineligible
services/products is
distributed.
as Catering services, Construction services, architect services,
Health Insurance services, etc are set aside and necessary entries
for expensing off will be sent to respective BUs at the end of every
month/on issue of ISD . Common credit pertaining to various BUs
such as Bulk, Corporate, Formulation and BFRoW is allocated
based on the turnover of the eligible plants in proportion to the
total turnover (as per the Provisions of CENVAT Credit rules) of all
the plants to which the respective BU offers its services.
Unlikely Significant 3.05B Service Tax input credit identifiable/ pertaining to exclusive Accuracy, Valuation Control P Yes Yes Routine Head - Service Tax Corporate M Monthly
products such as advertisement/ testing etc. is identified and Validity and Activity
based on place of manufacture or applicability of excise duty on Measureme
such product, eligibility for input credit is decided and eligible nt
amount only is distributed.
11 3.05 Dual benefit claimed for Unlikely Significant 3.05C Service tax paid on Services utilized post removal of goods from Accuracy, Valuation Control P Yes Yes Routine Head - Service Tax Corporate M Monthly
service tax paid on various plants for exports, is segregated based on nature of service and Validity and Activity
services utilized after place usage, and necessary entries for expensing off is send to Measureme
of removal of goods for respective BUs, as DRL is claiming the exemption by way of nt
exports. refund through shipping bill.

12 3.06 Returns are not filed as per Unlikely Material 3.06A a) The service tax return under Rule 5 of service tax Rules is filed Compliance Not Control P No Yes Non- Head - Service Tax Corporate M Half-yearly
the requirement of the on or before the due dates as below: Applicable Environme Routine
statute and are not nt
authorised, resulting in April To September - on or before 25th day of October
Penalties. October To March - on or before 25th day of April.

b) The return is prepared by Team member and

approved/authorized by Head- Service tax.

13 3.07 Provision not made for Feasible Material 3.07A All the communications, notices or orders, in whatever form Accuracy Presentation Control P Yes Yes Routine Head - Service Tax Corporate M Quarterly
service tax liability or received, are ultimately forwarded to the CTT by respective plants. & Disclosure Activity/
contingent liability not CTT after through evaluation, categorizes the risk of the issue, Information
shown in notes to and prepares an excel file with respect to status of pending &
accounts, due to non litigations and the financial impact thereof and sends the same to Communic
monitoring of all the service the Corporate Consolidation Team, legal, compliance team and ation
tax cases by the central finance controllers on a Quarterly basis.
team.
Based on the same respective BUs, provided the necessary
provision.
14 3.08 Show cause notice, Unlikely Relevant 3.08A All the communications, in whatever form received, are ultimately Compliance Not Control P No No Routine Head - Service Tax Corporate M Ad Hoc
summon, order and forwarded to the CTT. CTT prepares replies to and ensures Applicable Activity/
communication received submit ion of appeal within due date. Information
from the authorities are not &
replied to or appealed Any summons or personal hearings are attended by the Communic
against within due date, or authorised person of the company or the authorised consultant. ation
not attended by authorised
person.

15 3.09 Service Tax records (hard
& soft copies) are not
retrievable when needed
due to:
a) Inadequate tracking of
the records
b) Non maintenance of the
backup of the records
c) Loss / destruction of the
records due to
unauthorized / unrestricted
access
Unlikely Relevant 3.09A All the records for complying with the Act are kept under the Compliance, Not Control P No No Routine Head - Service Tax Corporate M Ongoing
Custody of Taxation Team. All the Service Tax invoices are kept Completenes Applicable Environme
with Shared Service Center, except those invoices with Service s nt / Control
Tax amount greater than or equal to Rs. 25,000, and the invoices Activities
relating to Goods Transport payments under Service Tax Reverse
charge, for which the documents are held under the custody of
CTT. Physical records are kept in safe custody. Soft copies are
protected from unauthorised access by implementing password
protection to the files. Back up copies of files in system are
maintained in a safe place.