An aqueous composition including a particulate novolac resin and a polyol, wherein >50% of the number of total particles of novolac resin have a particle size of >15 μm and >5% of the number of total particles of novolac resin have a particle size of >50 μm, wherein the particulate novolac resin has a dropping point temperature of >127° C., and wherein the aqueous composition is essentially free of organic solvent. The aqueous composition will form a stable dispersion which is ideal for the preparation of a film or coating of substrates such as fiberglass, nonwoven fibers, or lignocellulosic materials which include composite boards, plywoods, parquets, laminated veneer lumber (LVL), laminated flooring, doors, wood for door frames and paper.