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Atul Ltd.

BSE: 500027 Sector: Industrials
NSE: ATUL ISIN Code: INE100A01010
BSE 00:00 | 24 Apr 2020 Atul Ltd
NSE 05:30 | 01 Jan 1970 Atul Ltd

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OPEN 4537.00
PREVIOUS CLOSE 4506.35
VOLUME 552
52-Week high 5447.25
52-Week low 3256.60
P/E 22.50
Mkt Cap.(Rs cr) 13,645
Buy Price 4401.00
Buy Qty 3.00
Sell Price 4600.60
Sell Qty 2.00
OPEN 4537.00
CLOSE 4506.35
VOLUME 552
52-Week high 5447.25
52-Week low 3256.60
P/E 22.50
Mkt Cap.(Rs cr) 13,645
Buy Price 4401.00
Buy Qty 3.00
Sell Price 4600.60
Sell Qty 2.00

Atul Ltd. (ATUL) - Auditors Report


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Company auditors report

To the Members of Atul Ltd

Report on the audit of the Standalone Financial

Statements

Opinion

01. We have audited the accompanying Standalone Financial Statements of Atul Ltd (theCompany) which comprise the Balance Sheet as at March 31 2019 and the Statement ofProfit and Loss (including other comprehensive income) the Statement of Cash Flows andthe Statement of changes in equity for the year then ended and a summary of significantAccounting Policies and other explanatory information.

02. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 (the Act) in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under Section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(Ind AS) and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit total comprehensive incomeits cash flows and the changes in equity for the year ended on that date.

Basis for opinion

03. We conducted our audit of the Standalone Financial

Statements in accordance with the Standards on Auditing specified under Section 143(10)of the Act (SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibility for the Audit of the Standalone Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.

Key audit matters

04. Key audit matters are those matters that in our professional judgement were ofmost significance in our audit of the Standalone Financial Statements of the currentperiod. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key audit matters Auditor's responses
Contingent liabilities and provisions The audit procedures included but were not limited to:
The Company has received certain claims from the government authorities and customers which are disputed. These involve a high degree of judgement to determine the possible outcomes and estimates relating to the timing and the amount of outflows of resources embodying economic benefits. • Obtaining a detailed understanding processes and controls of the Management with respect to claims or disputes.
• Evaluation of the design of the controls relating to compilation of the claims; assessment of probability of outcome estimates of the timing and the amount of the outflows and appropriate reporting by the Management and testing implementation and operating effectiveness of the key controls.
• Performing following procedures on samples selected:
• Understanding the matters by reading the correspondences communications minutes of the Audit Committee and or the Board meetings and discussions with the appropriate Management personnel.
• Performing corroborative inquiries with appropriate level of the Management personnel including status update expectation of outcomes with the basis and the future course of action contemplated by the Company and perusing legal opinions if any obtained by the Management.
• Obtaining direct confirmation from the legal attorneys of the Company and considering their opinions probability assessment of the outcomes.
• Evaluating the evidences supporting thejudgement of the Management about possible outcomes and the reasonableness of the estimates. We involved our internal experts for technical guidance and evaluation of the assessments of the Management as appropriate.
• Evaluating appropriateness of adequate disclosures in accordance with the applicable accounting standards.
Adoption of Ind AS 115 Revenue from contracts with customers (new revenue accounting standard) The audit procedures included but were not limited to:
- Assessment of the processes of the Company for adoption of the new Accounting Standards.
The Company sells products to the customers under different types of contractual terms. The application of the new revenue accounting standard involved assessing if distinct performance obligations exist under each type of the contracts and ensuring appropriate and adequate disclosures in the Standalone Financial Statements. - Selecting a sample from each type of the contracts with the customers and testing the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. Carrying out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
-Testing the relevant controls including access and change management controls of information technology systems which are relevant for appropriate measurement and presentation of revenue and related account balances.
-Performing following procedures on the samples selected:
• Reading analysing and identifying the distinct performance obligations in these contracts.
• Comparing these performance obligations with that identified and recorded by the Company.
• Considering the terms of the contracts to determine the transaction price and its allocation to the identified performance obligations.
• Testing sample of revenues with the performance obligations specified in the underlying contracts.
• Performing analytical procedures for reasonableness of revenues disclosed by segments.
- Evaluating the appropriateness of adequate disclosures in accordance with the standards.

05. Information other than the Financial Statements and Auditor's Report thereon

a) The Board of Directors of the Company is responsible for the other information. Theother information comprises the information included in the letter to shareholdersoperational highlights financial charts Directors Report and its annexure ManagementDiscussion and Analysis Corporate Governance Report Business Responsibility ReportDividend Distribution Policy and performance trend but does not include the StandaloneFinancial Statements Consolidated Financial Statements and our Auditor's Report thereon.

b) Our opinion on the Standalone Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

c) In connection with our audit of the Standalone Financial Statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

d) If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's responsibility for the Standalone Financial Statements

06. The Board of Directors of the Company is responsible for the matters stated inSection 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.

07. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

08. In preparing the Standalone Financial Statements Management is responsible forassessing the ability of the Company to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless Management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the financial reportingprocess of the Company.

Auditor's responsibility for the audit of the Standalone Financial Statements

09. Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's Report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

10. As part of an audit in accordance with SAs specified under Section 143(10) of theAct we exercise professional judgement and maintain professional skepticism throughoutthe audit. We also:

a) Identify and assess the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

b) Obtain an understanding of internal financial control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the Management.

d) Conclude on the appropriateness of use of the going concern basis of accounting bythe Management and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on ability of theCompany to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our Auditor's Report to the related disclosures inthe Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourAuditor's Report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

e) Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our Auditor's Report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

11. As required by Section 143(3) of the Act based on our audit on the separateFinancial Statements we report to the extent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome Statement of Cash Flows and Statement of changes in equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the Directors of theCompany as on March 31 2019 taken on record by the Board of Directors none of theDirectors is disqualified as on March 31 2019 from being appointed as a Director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.

Our report expresses an unmodified opinion on the adequacy and operating effectivenessof the internal financial controls over financial reporting of the Company.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its Directors during the year is in accordance withthe provisions of Section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

12. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe Central Government in terms of Section 143(11) of the Act we give in Annexure B astatement on the matters specified in paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells LLP
Chartered Accountants
Firm registration number: 117366W W-100018)
Samir R. Shah
Mumbai Partner
April 26 2019 Membership number: 101708

Annexure A to the Independent Auditor's Report

Referred to in para 11(f) under ‘Report on other legal and regulatoryrequirements' section of our report of even date.

Report on the internal financial controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act)

01. We have audited the internal financial controls over financial reporting of AtulLtd (the Company) as of March 31 2019 in conjunction with our audit of the StandaloneFinancial 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 maintaininginternal financial controls based on the internal controls over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the Guidance Note) issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the policies of the Company thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable 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 ofthe Company over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note issued by the Institute of Chartered Accountants ofIndia and the Standards on Auditing prescribed under Section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

04. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls overfinancialreporting assessing the riskthat a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the Auditor's judgement including the assessment of therisks of material misstatement of the Standalone Financial Statements whether due to fraudor error.

05. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the internal financial controls system overfinancial 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 processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of Standalone Financial Statements for external purposes in accordancewith Generally Accepted Accounting Principles. Internal financial control over financialreporting of a Company includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with Generally Accepted Accounting Principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of Management and Directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the assets of the Company that could have a material effect on theStandalone Financial Statements.

Inherent limitations of internal financial controls over financial reporting

07. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

08. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.

For Deloitte Haskins & Sells LLP
Chartered Accountants
Firm registration number: 117366W W-100018)
Samir R. Shah
Mumbai Partner
April 26 2019 Membership number: 101708

Annexure B to the Independent Auditor's Report

Referred to in para 12 under ‘Report on other legal and regulatory requirements'Section of our report of even date

01. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of 3 years which in our opinion appears generallyreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program certain fixed assets were physically verified by the Management during theyear. According to the information and explanations given to us whilst reconciliationbetween physical verification report and fixed assets register for certain buildingsoffice equipment and furnitures etc is under progress the discrepancies noted are primafacie not material.

c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed transfer deed conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and acquired buildings which are freehold are held in thename of the Company as at the Balance Sheet date except the following:

Particulars of land and building Carrying value as at March 31 2019 Name of entity on the title deed
Freehold land Rs 0.15 cr Atul Products Ltd
Freehold land Rs 3.85 cr Land purchased from various individuals is in process of being transferred in the name of the Company
Freehold land - Investment properties Rs 0.94 cr Atul Products Ltd
Building in Delhi Rs 0.02 cr Atul Products Ltd

In respect of land that have been taken on lease and disclosed as property plant andequipment in the Standalone Financial Statements the lease Agreements are in the name ofthe Company where the Company is the lessee in the Agreement. There are no buildings thathave been taken on lease.

02. As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification.

03. According to the information and explanations given to us the Company has grantedan interest free unsecured loan to Amal Ltd [Pursuant to an Order of the Board forIndustrial and Financial Reconstruction] covered in the register maintained under Section189 of the Companies Act 2013. The Company has not granted any loans secured orunsecured to firms Limited Liability Partnerships or other parties covered in theregister maintained under Section 189 of the Companies Act 2013.

In respect of aforesaid loans:

a) The terms and conditions of the grant of such loans are in our opinion notprejudicial to interest of the Company.

b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

c) There is no overdue amount remaining outstanding as at the Balance Sheet date.

04. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

05. According to the information and explanations given to us the Company has notaccepted any deposit during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.

06. The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under Sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We have however not made a detailed examinationof the cost records with a view to determine whether they are accurate or complete.

07. According to the information and explanations given to us in respect of statutorydues:

a) The Company has been regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax customs duty cess goods andservices tax and other material statutory dues applicable to it to the appropriateauthorities.

b) There were no undisputed amounts payable in respect of provident fund employees'state insurance income tax customs duty cess goods and services tax and other materialstatutory dues in arrears as at March 31 2019 for a period of more than 6 months from thedate they became payable.

c) There are no disputed dues of customs duty and goods and service tax which have notbeen deposited as on March 31 2019. Details of dues of income tax and excise duty whichhave not been deposited as on March 31 2019 on account of disputes are given below:

Name of statute Nature of dues Forum where dispute is pending Period to which the amount relates Amount unpaid (' cr) Amount paid under protest (' cr)
Income Tax Act 1961 Income tax Commissioner of Income Tax (Appeals) Assessment year 1999-2000 2011-12 1.28 0.91
Income Tax Appellate Tribunal 2010-11 * 0.87
The Central Excise Act 1944 and Chapter V of the Finance Act 1994 Excise duty and service tax Commissioner (Appeals) 1993-2016 0.97 0.05
Customs Excise and Service Tax Appellate Tribunal 1992-2018 7.19 0.44
High Court 1994-95 3.53 -
Customs Act 1962 Customs duty Commissioner (Appeals) 1994-2009 3.19

-

High Court 2017-18 1.76

-

* Rs 16000

08. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings from financialinstitutions banks and government. The Company has not issued any debentures.

09. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under Clause (ix) ofthe Order is not applicable.

10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

11. In our opinion and according to the information and explanations given to us theCompany has paid provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

12. The Company is not a Nidhi Company and hence reporting under Clause (xii) of theOrder is not applicable.

13. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Standalone Financial Statements etc as requiredby the applicable accounting standards.

14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underClause (xiv) of the Order is not applicable to the Company.

15. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or Directors of its subsidiary company or persons connected with them and henceprovisions of Section 192 of the Companies Act 2013 are not applicable.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells LLP
Chartered Accountants
Firm registration number: 117366W W-100018)
Samir R. Shah
Mumbai Partner
April 26 2019 Membership number: 101708

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