Atul Ltd Annual Report 2016-17

Atul Ltd | Annual Report 2016-17

Annexure A

to Independent Auditors’ Report

Referred to in paragraph 11(f) of the Independent Auditors’

Report of even date to the Members of Atul Ltd on the

Standalone 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. We have audited the Internal Financial Controls over

financial reporting of Atul Ltd (‘the Company’) as of

March 31, 2017 in conjunction with our audit of the

Standalone Ind AS Financial Statements of the Company

for the year ended on that date.

Management’s responsibility for Internal Financial

Controls

02. The Management of the Company is responsible for

establishing and maintaining Internal Financial Controls

based on the internal controls 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 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 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) and the Standards on Auditing

deemed to be prescribed under Section 143(10) of the Act

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.

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 Ind AS Financial Statements, whether due to

fraud or error.

05. We believe that the audit evidence we have obtained 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

a company is a process designed to provide reasonable

assurance regarding the reliability of financial reporting

and the preparation of Ind AS Financial Statements for

external purposes in accordance with Generally Accepted

Accounting Principles. Internal Financial Control over

financial reporting of a 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 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 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 could have a material effect on the Ind AS

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 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.