Atul-2014-15

Atul Ltd | Annual Report 2014-15

Risk Management

Risk Management is an integral part of the business

practices of the Company. The framework of Risk

Management concentrates on formalising a system to

deal with the most relevant risks, building on existing

management practices, knowledge and structures.

With the help of a reputed international consultancy

firm, the Company has developed and implemented

a comprehensive Risk Management system to ensure

that risks to the continued existence of the Company

as a going concern and to its growth are identified

and remedied on a timely basis. While defining and

developing the formalised Risk Management system,

leading standards and practices have been considered.

The Risk Management system is relevant to business

reality, pragmatic and simple and involves the following:

i) Risk identification and definition – Focused on

identifying relevant risks, creating | updating clear

definitions to ensure undisputed understanding

along with details of the underlying root causes |

contributing factors.

ii) Risk classification – Focused on understanding the

various impacts of risks and the level of influence

on its root causes. This involves identifying various

processes generating the root causes and clear

understanding of risk interrelationships.

iii) Risk assessment and prioritisation – Focused on

determining risk priority and risk ownership for

critical risks. This involves assessment of the various

impacts taking into consideration risk appetite and

existing mitigation controls.

iv) Risk mitigation – Focused on addressing critical

risks to restrict their impact(s) to an acceptable

level (within the defined risk appetite). This involves

a clear definition of actions, responsibilities and

milestones.

v) Risk reporting and monitoring – Focused on

providing to the Board and the Audit Committee

periodic information on risk profile evolution and

mitigation plans.

Roles and responsibilities

Governance

The Board has approved the Risk Management Policy of

the Company. The Company has laid down procedures

to inform the Board on i) to iv) above. The Audit

Committee periodically reviews the Risk Management

system and gives its recommendations, if any, to the

Board. The Board reviews and guides the Risk Policy.

Implementation

Implementation of the Risk Management Policy is

the responsibility of the Management. It ensures

functioning of the Risk Management system as per the

guidance of the Audit Committee. The Company has

a Risk Management Oversight Structure in which each

Business has a Chief Risk and Compliance Officer.

The Management at various levels takes accountability

for risk identification, appropriateness of risk analysis,

and timeliness as well as adequacy of risk mitigation

decisions at both individual and aggregate levels. It is

also responsible for the implementation, tracking and

reporting of defined mitigation plans, including periodic

reporting to the Audit Committee and the Board.

Internal financial controls

The internal financial controls over financial reporting

are designed to provide reasonable assurance

regarding the reliability of financial reporting and the

preparation of the Financial Statements.

These include those policies and procedures that

i) pertain to the maintenance of records which in

reasonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of the

Company, ii) 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 are being made only in

accordance with authorisations of the Management

and the Directors of the Company and iii) provide

reasonable assurance regarding prevention or

timely detection of unauthorised acquisition, use or

disposition of the assets that can have a material effect

on the Financial Statements. A reputed international

consultancy firm has reviewed the adequacy of the

internal financial controls with respect to the Financial

Statements.

The Management assessed the effectiveness of the

internal financial controls over financial reporting as

of March 31, 2015, and the Board believes that the

controls are adequate.

Fixed deposits

During 2014-15, the Company did not accept any

fixed deposits.

Loans, guarantees, investments and

security

Particulars of loans, guarantees, investments and

security are given in the Notes to the Accounts.

10.

Subsidiary, associate and joint venture

companies

10.1 Performance and financial position of such companies

are given at page number 28.

10.2 Atul Middle East FZ-LLC was incorporated in the

United Arab Emirates.

11.

Related Party Transactions

Particulars of contracts or arrangements with related

parties are given in the Notes to the Accounts.

12.

Corporate Social Responsibility

Composition of the Corporate Social Responsibility

(CSR) Committee, the CSR Policy and the CSR Report

are given at page number 30.

13. Extract of the Annual Return

This is given at page number 32.

14.

Auditors

Dalal & Shah Chartered Accountants LLP, the Statutory

Auditors of the Company, will retire at the conclusion

of the ensuing Annual General Meeting (AGM). They

have given their consent to continue to act as the