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Annexure A
to Independent Auditors’ Report
Referred to in paragraph 9(f) of the Independent Auditors’ Report
of even date to the Members of Atul Ltd on the Consolidated
Financial Statements for the year ended March 31, 2016.
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Act
1. In conjunction with our audit of the Consolidated Financial
Statements of the Company as of and for the year ended
March31, 2016, we have audited the Internal Financial Controls
over financial reporting of Atul Ltd (hereinafter referred to
as the ‘Holding Company’) and its subsidiary companies, its
associate companies and jointly controlled entity, which are
companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
2. The respective Board of Directors of the Holding Company,
its subsidiary companies, its associate companies and jointly
controlled entity, which are companies incorporated in India,
are responsible for establishing and maintaining Internal
Financial Controls based on 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 (ICAI). These responsibilities include
the design, implementation and maintenance of adequate
Internal Financial Controls that were operating effectively for
ensuring the orderly and efficient conduct of its business,
including adherence to the respective policies of the Company,
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 Internal
Financial Controls of the Company 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’) issued by the
ICAI and the Standards on Auditing deemed to be prescribed
under Section 143(10) of the Companies Act, 2013, 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. These 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 of the 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 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 Internal Financial Controls system over
financial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
6. The Internal Financial Control over financial reporting of
the Company 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.
The Internal Financial Control over financial reporting of the
Company 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 the
Management and the Directors of the Company; and (3)
provide reasonable assurance regarding prevention or timely
detection of unauthorised acquisition, use, or disposition of
the assets of the Company that may 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 override of controls by the
Management, 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
8. In our opinion, the Holding Company, its subsidiary
companies, its associate companies and jointly controlled
entity, 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, 2016, based on the Internal Financial 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
9. Our aforesaid reports 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 8 subsidiary companies, 14 associate companies and 1
jointly controlled entity, which are companies incorporated in
India, is based on the corresponding reports of the Auditors
of such companies incorporated in India. Our opinion is not
qualified in respect of this matter.
For Dalal & Shah Chartered Accountants LLP
Firm Registration Number: 102020W | W-100040
S Venkatesh
Mumbai
Partner
April 29, 2016
Membership Number: 037942