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Atul Ltd | Annual Report 2017-18
Annexure A
to the Independent Auditor’s Report
Referred to in paragraph (f) under ‘Report on other legal and
regulatory requirements’ Section of our report of even date.
Report on the Internal Financial Controls over financial
reporting under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 (the Act)
01. In conjunction with our audit of the Consolidated Ind AS
Financial Statements of Atul Ltd (hereinafter referred to
as ’the Parent‘) as of and for the year ended March 31,
2018, we have audited the Internal Financial Controls
over financial reporting of the Parent, 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 Parent, its
subsidiary companies and joint venture company, which
are companies incorporated in India, are responsible
for establishing and maintaining Internal Financial
Controls based on the internal controls over financial
reporting criteria established by the respective companies
considering the essential components of internal controls
stated in the Guidance Note on Audit of Internal Financial
Controls over financial reporting (the Guidance Note)
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 Companies Act, 2013.
Auditor’s responsibility
03. Our responsibility is to express an opinion on the Internal
Financial Controls over financial reporting of the Parent,
its subsidiary companies and its joint venture company,
which are companies incorporated in India, based on
our audit. We conducted our audit in accordance with
the Guidance Note issued by the Institute of Chartered
Accountants of India and the Standards on Auditing,
prescribed under Section 143(10) of the Companies Act,
2013, to the extent applicable to an audit of Internal
Financial Controls. 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 were 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 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 of the
subsidiary companies and joint venture company, which
are companies incorporated in India, 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 Parent, its subsidiary
companies and its joint venture company, which are
companies incorporated in India.
Meaning of Internal Financial Controls over financial
reporting
06. The Internal Financial Controls over financial reporting
of the Company is a process designed to provide
reasonable assurance regarding the reliability of
financial reporting and the preparation of the Financial
Statements for external purposes in accordance with
Generally Accepted Accounting Principles. The Internal
Financial Controls over financial reporting of the
Company include those policies and procedures that a)
pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company, b) provide
reasonable assurance that transactions are recorded
as necessary to permit preparation of the 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 Management and Directors of the
Company and c) provide reasonable assurance regarding
preventionor timely detectionof unauthorisedacquisition,
use, or disposition of assets of the Company that could
have a material effect on the 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 Controls over financial reporting may
become inadequate because of changes in conditions,
or that the degree of compliance with the policies or
procedures may deteriorate.