Atul Ltd.
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ISIN No INE100A01010 52Wk High (Rs.) 3415 BV (Rs.) 756.50 FV (Rs.) 10.00
Bookclosure 20/07/2018 52Wk Low (Rs.) 2340 EPS (Rs.) 93.21 P/E (X) 34.77
Mkt Cap. (Rs. Cr.) 9,612.03 P/BV (X) 4.28 Div Yield (%) 0.37 Mkt Lot 1
2017-03

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

01. We have audited the accompanying Standalone Financial Statements of Atul Ltd (‘the Company’), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of changes in equity for the year then ended, and a summary of the significant Accounting Policies and other explanatory information.

Management’s responsibility for the Standalone Ind AS Financial Statements

02. The Board of Directors of the Company is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘Act’) with respect to the preparation of these Standalone Ind AS Financial Statements to give a true and fair view of the financial position, financial performance (including Other Comprehensive Income), cash flows and changes in equity of the Company in accordance with the Accounting Principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate Accounting Policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate Internal Financial Controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

03. Our responsibility is to express an opinion on these Standalone Ind AS Financial Statements based on our audit.

04. We have taken into account the provisions of the Act and the Rules made thereunder including the Accounting and Auditing Standards and matters which are required to be included in the Audit report.

05. We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements are free from material misstatement.

06. An audit involves performing procedures to obtain audit evidence about the amount and the disclosures in the Standalone Ind AS Financial Statements. The procedures selected depend on the Auditors’ judgement, including the assessment of the risks of material misstatement of the Standalone Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the Auditor considers Internal Financial Control relevant to the preparation of the Standalone Ind AS Financial Statements of the Company that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the Accounting Policies used and the reasonableness of the accounting estimates made by the Directors of the Company, as well as evaluating the overall presentation of the Standalone Ind AS Financial Statements.

07. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.

Opinion

08. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit (including Other Comprehensive Income), its cash flows and the changes in equity for the year ended on that date.

Other matter

09. The financial information of the Company for the year ended March 31, 2016 and the transition date opening Balance Sheet as at April 01, 2015 included in these Standalone Ind AS Financial Statements, are based on the previously issued Statutory Financial Statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated April 29, 2016 and April 30, 2015. The adjustments to those Financial Statements for the differences in Accounting Principles adopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of these matters.

Report on other legal and regulatory requirements

10. As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act (‘the Order’), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of changes in equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the Directors as on March 31, 2017 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2017 from being appointed as a Director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the Internal Financial Controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i) The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017 on its financial position in its Standalone Ind AS Financial Statements - refer Note 27.1;

ii) The Company has made provision as at March 31 , 201 7, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts;

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during 2016-17.

iv) The Company has provided requisite disclosures in the Financial Statements as to holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016. Based on audit procedures and relying on the Management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - refer Note 27.15.

Annexure B to the Independent Auditors’ Report

Referred to in paragraph 10 of the Independent Auditors’ Report of even date to the Members of Atul Ltd on the Standalone Ind AS Financial Statements as of and for the year ended March 31, 2017

01. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

c) The title deeds of immovable properties other than self-constructed immovable properties (buildings), as disclosed in Note 2 and 3 on fixed assets to the Ind AS Financial Statements, are held in the name of the Company (Atul Ltd), except for the following:

Name of entity on the title deed

Total number of Agreements

Book value of land (Rs. cr)

Atul Products Limited(*)

91

0.52

Atic Industries Limited

1

0.78

Cibatul Limited

3

0.15

Total

95

1.45

* Out of above 45 title deeds amounting to Rs.0.07 cr forms part of Investment properties. (refer Note 3)

02. The physical verification of inventory (excluding stocks with third parties) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

03. The Company has granted an interest bearing unsecured loan to a wholly owned subsidiary company Atul Bioscience Ltd and an interest free unsecured loan to Amal Ltd [Pursuant to an Order of the Board for Industrial and Financial Reconstruction] covered in the register maintained under Section 189 of the Act. The Company has not granted any loan, secured or unsecured, to firms, Limited Liability Partnerships or other parties covered in the said register.

a) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not prejudicial to the Company’s interest.

b) In respect of the aforesaid loans, the schedule of repayment of principal and payment of interest has been stipulated, and the parties are repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable.

c) In respect of the aforesaid loans, there is no amount which is overdue for more than 90 days.

04. In our opinion, and according to the information and explanations given to us, the Company has not granted any loans or provided any guarantees or security in respect of any loans to any party covered under Section 185 of the Act. In respect of loans granted to, guarantees or security in respect of any loan and investments made in body corporates by the Company, the provisions of Section 186 of the Act has been complied with. The Company has given an interest free loan of Rs.7.01 cr to Amal Ltd pursuant to the Order of the Board for Industrial and Financial Reconstruction. (refer Note 27.13).

05. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

06. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

07. a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales-tax, service-tax, duty of customs and value added tax which have not been deposited on account of any dispute. The particulars of dues of Income tax and duty of excise as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:

Name of the statute

Nature of dues

Amount (Rs. in cr) (a)

Period to which the amount relates

Forum where the dispute is pending (b)

Central Excise Act, 1944

Excise and service tax

0.94

1986 to 2016

Commissioner (Appeals)

4.07

1992 to 2011

Customs, Excise and Service Tax Appellate Tribunal

3.53

1994-95

High Court

Total

8.54

Income Tax Act, 1961

Income tax

0.19

2009-11

Commissioner of Income Tax (Appeals)

Total

0.19

(a) Net of amounts deposited. | (b) Necessary stay received from respective authorities.

08. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the Balance Sheet date.

09. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

10. During the course of our examination of the books and records of the Company, carried out in accordance with the Generally Accepted Auditing Practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

11. The Company has paid | provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

12. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

13. The Company has entered into transactions with Related Parties in compliance with the provisions of Sections 177 and 188 of the Act, where applicable. The details of such Related Party Transactions have been disclosed in the Ind AS Financial Statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

15. The Company has not entered into any non-cash transactions with its Directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

16. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Dalal & Shah Chartered Accountants LLP

Firm Registration Number: 102020W | W-100040

S Venkatesh

Mumbai Partner

May 05, 2017 Membership Number: 037942