Atul Ltd 2018-19

Key audit matters Auditor's responses Contingent liabilities and provisions 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 ūlj ūƭƥǜūǅƙ ūlj ƑĚƙūƭƑČĚƙ ĚŞċūēǋĿŠij ĚČūŠūŞĿČ ċĚŠĚǛƥƙȦ The audit procedures included but were not limited to: - 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 ūlj ƥĺĚ ūƭƥǜūǅƙȡ îŠē îƎƎƑūƎƑĿîƥĚ ƑĚƎūƑƥĿŠij ċǋ ƥĺĚ qîŠîijĚŞĚŠƥ îŠē ƥĚƙƥĿŠij implementation and operating effectiveness of the key controls. - Performing following procedures on samples selected: ȟ ÀŠēĚƑƙƥîŠēĿŠij ƥĺĚ ŞîƥƥĚƑƙ ċǋ ƑĚîēĿŠij ƥĺĚ ČūƑƑĚƙƎūŠēĚŠČĚƙ ʈ ČūŞŞƭŠĿČîƥĿūŠƙȡ minutes of the Audit Committee and | or the Board meetings and discussions with the appropriate Management personnel. ȟ qîŒĿŠij ČūƑƑūċūƑîƥĿǄĚ ĿŠƐƭĿƑĿĚƙ ǅĿƥĺ îƎƎƑūƎƑĿîƥĚ ŕĚǄĚŕ ūlj ƥĺĚ qîŠîijĚŞĚŠƥ 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. ȟ ~ċƥîĿŠĿŠij ēĿƑĚČƥ ČūŠǛƑŞîƥĿūŠ ljƑūŞ ƥĺĚ ŕĚijîŕ îƥƥūƑŠĚǋƙ ūlj ƥĺĚ ūŞƎîŠǋ îŠē considering their opinions | probability assessment of the outcomes. ȟ /ǄîŕƭîƥĿŠij ƥĺĚ ĚǄĿēĚŠČĚƙ ƙƭƎƎūƑƥĿŠij ƥĺĚ ŏƭēijĚŞĚŠƥ ūlj ƥĺĚ qîŠîijĚŞĚŠƥ îċūƭƥ 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 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. The audit procedures included but were not limited to: - Assessment of the processes of the Company for adoption of the new accounting standards. - Selecting a sample from each type of the contracts with the customers, and ƥĚƙƥĿŠij ƥĺĚ ūƎĚƑîƥĿŠij ĚljljĚČƥĿǄĚŠĚƙƙ ūlj ƥĺĚ ĿŠƥĚƑŠîŕ ČūŠƥƑūŕȡ ƑĚŕîƥĿŠij ƥū ĿēĚŠƥĿǛČîƥĿūŠ of the distinct performance obligations and determination of transaction price. Carrying out a combination of procedures involving enquiry and observation, re-performance 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: ȟ ¤ĚîēĿŠijȡ îŠîŕǋƙĿŠij îŠē ĿēĚŠƥĿljǋĿŠij ƥĺĚ ēĿƙƥĿŠČƥ ƎĚƑljūƑŞîŠČĚ ūċŕĿijîƥĿūŠƙ ĿŠ these contracts. ȟ ūŞƎîƑĿŠij ƥĺĚƙĚ ƎĚƑljūƑŞîŠČĚ ūċŕĿijîƥĿūŠƙ ǅĿƥĺ ƥĺîƥ ĿēĚŠƥĿǛĚē îŠē ƑĚČūƑēĚē by the Company. ȟ ūŠƙĿēĚƑĿŠij ƥĺĚ ƥĚƑŞƙ ūlj ƥĺĚ ČūŠƥƑîČƥƙ ƥū ēĚƥĚƑŞĿŠĚ ƥĺĚ ƥƑîŠƙîČƥĿūŠ ƎƑĿČĚ îŠē Ŀƥƙ îŕŕūČîƥĿūŠ ƥū ƥĺĚ ĿēĚŠƥĿǛĚē ƎĚƑljūƑŞîŠČĚ ūċŕĿijîƥĿūŠƙȦ ȟ ¹ĚƙƥĿŠij ƙîŞƎŕĚ ūlj ƑĚǄĚŠƭĚƙ ǅĿƥĺ ƥĺĚ ƎĚƑljūƑŞîŠČĚ ūċŕĿijîƥĿūŠƙ ƙƎĚČĿǛĚē ĿŠ ƥĺĚ underlying contracts. ȟ îƑƑǋĿŠij îŠîŕǋƥĿČîŕ ƎƑūČĚēƭƑĚƙ ljūƑ ƑĚîƙūŠîċŕĚŠĚƙƙ ūlj ƑĚǄĚŠƭĚƙ ēĿƙČŕūƙĚē ċǋ segments. - Evaluating the appropriateness of adequate disclosures in accordance with the standards. Corporate Overview 01-22 Statutory Reports 23-105 Financial Statements 107-250 108 Atul Ltd | Annual Report 2018-19