156 / 236
Atul Ltd | Annual Report 2016-17
Annexure A
to Independent Auditors’ Report
Referred to in paragraph 10(f) of the Independent Auditors’
Report of even date to the Members of Atul Ltd on the
Consolidated Ind AS Financial Statements for the year ended
March 31, 2017
Report on the Internal Financial Controls under
Clause (i) of Sub-section 3 of Section 143 of the Act
01. In conjunction with our audit of the Consolidated Ind
AS Financial Statements of the Company as of and for
the year ended March 31, 2017, we have audited the
Internal Financial Controls over financial reporting of Atul
Ltd (hereinafter referred to as the ‘Holding Company’)
and its subsidiary companies and joint venture company,
which are companies incorporated in India, as of
that date.
Management’s responsibility for Internal Financial
Controls
02. The respective Board of Directors of the Holding
company, its subsidiary companies and joint venture
company, 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.
Auditors’ responsibility
03. Our responsibility is to express an opinion on the Internal
Financial Controls over financial reporting of the Company
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. 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 ware
established and maintained and if such controls operated
effectively in all material respects.
04. 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 Consolidated
Financial Statements, whether due to fraud or error.
05. 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
06. 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 Consolidated Ind AS 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 Consolidated Ind
AS 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
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 could have a material effect on the
Consolidated Financial Statements.
Inherent limitations of Internal Financial Controls over
financial reporting
07. 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
08. In our opinion, the Holding Company, its subsidiary
companies and joint venture company, which are
companies incorporated in India, have, in all material