Atul Ltd Annual Report 2016-17

The user industries, Construction,

Defence, Electrical and Electronics,

Paint

and

Coatings

and

Wind Energy are growing

well, particularly in India.

The Company will participate

in this growth by i) widening

its market reach, ii) increasing

its manufacturing and working

capital efficiencies, iii) generating

and adding new capacities

of epoxy resins and hardeners

and iv) introducing new products

and formulations.

Cheaper imports of epoxy resins

and hardeners may keep the

margins under pressure. Since

the 2 main raw materials, namely

Bisphenol-A and Epichlorohydrin, are imported, fluctuations in foreign exchange may impact margins.

Internal Control Systems

Internal Control Systems of the Company are commensurate with the nature of its business and size and complexity of its

operations. These are routinely tested, certified and upgraded whenever required by the Statutory as well as the Internal

Auditors covering all key areas of business. Significant audit observations and follow up actions and recommendations

thereon are reported to the

higher Management and Audit

Committee for their review.

The Company has an in-house

Internal

Audit

department

(which became ISO 9001:2008

certified in 2014) consisting

professionally

qualified

managers. It is also working

with reputed firms specialising

in Internal Audit function. The

combined efforts are helping to

introduce best practices required

to manage its growing business

that now comprises, amongst

others, subsidiary, joint venture

and associate companies in India

and abroad. Internal Audit is also

carried out for Atul Foundation

and entities overseen by it.

During 2016-17, the Company further strengthened the systems of Internal Audit and risk assessment and mitigation and

took several Key Initiatives. In specific, it i) conducted 96 process reviews, ii) introduced continuous monitoring with the help

of system reports iii) developed | implemented 5 new Standard Operating Procedures (SOPs) and iv) reviewed and revised

45 more SOPs under SOP project for all functions.