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Annexure to Auditors’ Report

| Annual Report 2008-09

Referred to in paragraph 3 of the Auditors’ Report of even date

to the members of

Atul Ltd

on the financial statements for the

year ended March 31, 2009

(a) The Company has generally maintained proper records

showing particulars including quantitative details and

situation of fixed assets;

(b) As explained to us, fixed assets, according to the

practice of the Company, are physically verified

by the management at reasonable intervals, in a phased

verification-programme, which, in our opinion, is

reasonable, looking to the size of the Company and the

nature of its business. According to the information

and explanations given to us, discrepancies noticed on

physical verification have been adjusted in the books of

account;

of its fixed assets so as to affect its going concern

status;

ii.

(a) As explained to us, inventories have been physically

verified during the year by the management;

(b) The procedures explained to us, which are followed

by the management for physical verification of

inventories, are, in our opinion, reasonable and

adequate in relation to the size of the Company and

the nature of its business;

records of the Company, we are of the opinion that,

the Company is maintaining proper records of its

inventory. Discrepancies which were noticed on

physical verification of inventory as compared to book

records, have been properly dealt with in the books of

account;

iii. (a) The Company has not granted any loan, secured or

unsecured, to the companies, firms or other parties

covered in the register maintained under section 301 of

the Companies Act 1956;

(b) According to the information and explanations given

to us, the Company has taken unsecured loan (in the

nature of fixed deposits) from party listed in the register

maintained under Section 301 of the Companies Act,

1956. The maximum amount involved during the year

was Rs1.75 lacs and the year end balance of loan taken

from such parties was Rs1.75 lacs. The Company has

not taken any loan, secured or unsecured, from the

companies and firms covered in the register maintained

under Section 301 of the said Act;

conditions on which loan has been taken from the

parties listed in the register maintained under section

301 of the Companies Act, 1956 are not, prima-facie,

prejudicial to the interest of the company;

(d) The Company is regular in repaying the principal

amounts as stipulated and have been regular in the

payment of interest;

(e) There is no overdue amount of loans taken from the

parties listed in the register maintained under section

301 of the Companies Act, 1956;

iv. In our opinion and according to the information and

explanations given to us, there are generally adequate

internal control procedures commensurate with the size of

the Company and the nature of its business with regard to

purchase of inventory, fixed assets and for sale of goods

and services. During the course of our previous assessment,

no major weakness in internal control system, had come

to our notice;

(a) On the basis of the audit procedures performed by us,

and according to the information, explanations and

representations given to us, we are of the opinion that,

the particulars of contracts or arrangement in which

directors were interested and which were required to

be entered in the register maintained under Section

301 of the Companies Act, 1956, have been so

entered;

(b) In our opinion and according to the information and

explanations given to us, the transactions made in

pursuance of such contract or arrangements entered

in the register maintained under Section 301 of the

Companies Act, 1956 exceeding the value of rupees

five lacs in respect of any party during the year have

been made at prices which are reasonable having

regard to prevailing market prices at that time;

vi. In our opinion and according to the information and

explanations given to us the company has complied with

the directives issued by Reserve Bank of India and the

Provisions of section 58A and 58AA or any other relevant

provision of the Act and the rules framed there-under since