Atul Ltd Annual Report 2016-17

Atul Ltd | Annual Report 2016-17

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

Risk Management Oversight Structure in which each

Sub-segment 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.

07.

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, 2017, and the Board believes that the

controls are adequate.

08.

Fixed deposits

During 2016-17, the Company did not accept any

fixed deposits.

09.

Loans, guarantees, investments and security

Particulars of loans, guarantees, investments and

security provided are given at page numbers 108

and 110.

10.

Subsidiary, associate and joint venture

companies

During 2016-17, Atul Finserv Ltd, a wholly-owned

subsidiary of the Company formed two

wholly-owned subsidiary companies, Atul Fin

Resources Ltd and Atul Nivesh Ltd. There were no

other changes in the subsidiary, associate and joint

venture companies which were reported earlier.

Performance and financial position of such companies

are given at page number 26.

11.

Related Party Transactions

All the transactions entered into with the Related

Parties were in ordinary course of business and on

arm’s length basis. Details of such transactions

are given at page number 120. No transactions

were entered into by the Company which required

disclosure in Form AOC-2.

12.

Corporate Social Responsibility

Composition of the Corporate Social Responsibility

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

are given at page number 28.

13.

Extract of the Annual Return

This is given at page number 31.

14.

Auditors

Statutory Auditors

Dalal & Shah Chartered Accountants LLP, the Statutory

Auditors of the Company, will retire at the conclusion

of the ensuing Annual General Meeting (AGM).