Home  »  Company  »  Atul Ltd.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Atul Ltd.

Mar 31, 2017

Dear Members,

The Board of Directors (Board) presents the Annual Report of Atul Ltd together with the audited Financial Statements for the year ended March 31, 2017.

01. Financial results

(Rs. Cr)

2016-17

2015-16

Sales

2,639

2,403

Revenue from operations

2,848

2,609

Other income

43

43

Total revenue

2,891

2,652

Profit before tax

400

400

Provision for tax

115

126

Profit for the year

285

274

Balance brought forward

1,145

900

Transfer from comprehensive income

3

(2)

Disposable surplus

1,433

1,172

Less:

Dividend paid

30

25

Dividend distribution tax (net)

6

2

Balance carried forward

1,397

1,145

02. Performance

Sales increased by 10% from Rs.2,403 cr to Rs.2,639 cr mainly due to higher volumes (16%), partly offset by lower prices (6%). Sales in India increased by 3% from Rs.1,198 cr to Rs.1,239 cr. Sales outside India increased by 16% from Rs.1,205 cr to Rs.1,400 cr. The Earning per share increased from Rs.92.53 to Rs.96.18. While the operating profit before working capital changes increased by 1% from Rs.478 cr to Rs.485 cr, the net cash flow from operating activities decreased by 3% from Rs.375 cr to Rs.364 cr.

Sales of Life Science Chemicals (LSC) Segment increased by 10% from Rs.737 cr to Rs.807 cr, mainly because of higher sales in Sub-segments Crop Protection and Aromatics - I; its EBIT decreased by 19% from Rs.161 cr to Rs.130 cr. Sales of Performance and Other Chemicals (POC) Segment increased by 10% from Rs.1,666 cr to Rs.1,832 cr mainly because of higher sales in Sub-segments Aromatics - II and Polymers; its EBIT increased by 16% from Rs.249 cr stagnant at Rs.290 cr. More details are given in the Management Discussion and Analysis (MDA) Report. The borrowings of the Company decreased (including current maturities of long-term borrowings) by 49% from Rs.302 cr to Rs.1 55 cr despite payments towards capital expenditure of Rs.176 cr.

Credit Analysis and Research Ltd (CARE) maintained its credit rating at ‘AA ’ (double A plus) for long-term borrowings of the Company. Its rating for short-term borrowings and commercial paper remained at ‘A1 ’ (A1 plus), the highest possible awarded by CARE.

The Company completed 3 expansion projects with an investment of Rs.117 cr which are expected to generate sales of Rs.220 cr at full capacity utilisation.

03. Dividend

The Board recommends payment of dividend of Rs.10 per share on 2,96,61,733 Equity shares of Rs.10 each fully paid up. The dividend will entail an outflow of Rs.35.70 cr {including dividend distribution tax (net)} on the paid-up Equity share capital of Rs.29.66 cr.

04. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information required under Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, as amended from time to time, forms a part of this Report which is given at page number 24.

05. Insurance

The Company has taken adequate insurance to cover the risks to its employees, property (land and buildings), plant, equipment, other assets and third parties.

06. 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 Risk Management Oversight Structure in which each Sub-segment has 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).

Pursuant to Section 139 of the Companies Act, 2013 and Rules made thereunder, it is mandatory for the Company to rotate the current Statutory Auditors on completion of a maximum term permitted under the said Section. Accordingly, based on the recommendation of the Audit Committee, the Board at its meeting held on May 05, 2017, recommended the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants as the Statutory Auditors of the Company. Deloitte Haskins & Sells LLP will hold the office for a period of 5 consecutive years from the conclusion of the 40th AGM of the Company till the conclusion of the 45th AGM to be held in the year 2022, subject to the approval of the Shareholder(s) of the Company at the ensuing AGM and ratification at subsequent AGMs. Deloitte Haskins & Sells LLP have given their consent to act as the Auditors and confirmed their eligibility for appointment.

The relevant Notes forming part of the accounts are self-explanatory and give full information and explanation in respect of the observations made by the Auditors in their report.

Cost Auditors

The Shareholders ratified the appointment of R Nanabhoy & Co as the Cost Auditors for 2016-17 on July 29, 2016.

Secretarial Auditors

The Board appointed Mr A C Doshi, Practising Company Secretary, as the Secretarial Auditor for 2016-17 on April 29, 2015, and his report is given at page number 42.

15. Directors’ responsibility statement

Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors confirm that, to the best of their knowledge and belief:

15.1 The applicable Accounting Standards were followed along with proper explanations relating to material departures in the preparation of the annual accounts.

15.2 The Accounting Policies were selected and applied consistently and judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period.

15.3 Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

15.4 The attached annual accounts for the year ended March 31, 2017 were prepared on a going concern basis.

15.5 Adequate Internal Financial Controls to be followed by the Company were laid down; and they were adequate and operating effectively.

15.6 Proper systems were devised to ensure compliance with the provisions of all applicable laws and the same were adequate and operating effectively.

16. Directors

16.1 Appointments | Reappointments | Cessations

16.1.1 Subject to the approval of the Members in the AGM, Mr S A Lalbhai was reappointed as a Managing Director effective December 15, 2016 for a period of 5 years.

16.1.2 According to Article 86 of the Articles of Association of the Company, Mr R A Shah and Mr T R Gopi Kannan retire by rotation and being eligible, offer themselves for reappointment at the forthcoming AGM scheduled on July 28, 2017.

16.2 Policies on appointment and remuneration

16.2.1 Appointment

While recommending appointment of the Directors, the Nomination and Remuneration Committee considers the following factors:

i) Qualification: well-educated and experienced in senior leadership positions in industry | profession

ii) Traits: positive attributes and qualities

iii) Independence: criteria prescribed in Section 149 (6) of the Companies Act, 2013 for the Independent Directors, including no pecuniary interest and conflict of interest

16.2.2 Remuneration of the Non-executive Directors

i) Sitting fees: up to Rs.20,000 for attending a Board, Committee and any other meeting

ii) Commission: up to 1% of net profit as may be decided by the Board based on the following factors:

a. Membership of Committee(s)

b. Profit

c. Attendance

d. Category (Independent or Non-independent)

16.2.3 Remuneration of the Executive Directors This is given under para number 17.2.

16.3 Criteria and method of annual evaluation

16.3.1 The criteria for evaluation of performance of

a) the Non-independent Directors (Executive)

b) the Non-independent Directors (Non-executive)

c) the Independent Directors d) the Chairman

e) the Committees of the Board and f) the Board as a whole are summarised in the table at the end of the Directors’ Report at page number 22.

16.3.2 The Independent Directors have carried out annual:

i) Review of performance of the Non-independent Directors - Executive

ii) Review of performance of the Non-independent Directors - Non-executive

iii) Review of performance of the Chairman

iv) Assessment of quality, quantity and timeliness of the flow of information to the Board

v) Review of performance of the Board as a whole

16.3.3 The Board has carried out annual evaluation of performance of:

i) Its Committees namely Audit, Nomination and Remuneration, Stakeholders Relationship, Corporate Social Responsibility and Investment

ii) The Independent Directors

The templates for the above purpose were circulated in advance for feedback of the Directors.

16.4 Familiarisation Program for the Independent Directors The Company has Familiarisation Programs for its Independent Directors. It comprises, amongst others, presentations by and discussions with the senior Management on the nature of the industries in which it operates, its vision and strategy and its organisation structure. A visit is organised to one or more of its manufacturing sites. Details of the program are also available at http://www.atul.co.in/investors/ familiarisation_program.html

17. Key Managerial Personnel and other employees

17.1 Appointments and cessations of the Key Managerial Personnel

There were no appointments | cessation of the Key Managerial Personnel during 2016-17.

17.2 Remuneration

The Remuneration Policy of the Key Managerial Personnel and other employees consists of the following:

17.2.1 Components:

i) Fixed pay

a. Basic salary

b. Allowances

c. Perquisites

d. Retirals

ii) Variable pay

17.2.2 Factors for determining and changing fixed pay

i) Existing compensation

ii) Education

iii) Experience

iv) Salary bands

v) Performance

vi) Market benchmark

17.2.3 Factors for determining and changing variable pay

i) Business performance

ii) Individual performance

iii) Grade

18. Analysis of remuneration

The information required pursuant to Sections 134 (3)(q) and 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Act, the Report and the Accounts are being sent to the Members and others entitled thereto excluding the information on employees’ particulars which are available for inspection by the Members at the registered office of the Company during business hours on working days of the Company up to the date of ensuing AGM.

Any Member interested in obtaining a copy of such statement may write to the Company Secretary at the Registered office of the Company.

19. Management Discussion and Analysis

The Management Discussion and Analysis Report covering performance of the two reporting segments, namely, LSC and POC, is given at page number 46.

20. Corporate Governance Report

20.1 Statement of declaration given by the Independent Directors.

The Independent Directors have given declarations under Section 149 (6) of the Companies Act, 2013.

20.2 Report

The Corporate Governance Report along with the certificate from the Statutory Auditors regarding compliance of the conditions of Corporate Governance pursuant to Regulation 34 (3) read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given at page number 53. Details about the number of meetings of the Board held during 2016-17 are given at page number 56. The composition of the Audit Committee is given at page number 59.

All the recommendations given by the Audit Committee were accepted by the Board.

20.3 Whistle-blowing Policy

The Board, on the recommendation of the Audit Committee, had approved a vigil mechanism (Whistle-blowing Policy). The policy provides an independent mechanism for reporting and resolving complaints pertaining to unethical behaviour, actual or suspected fraud and violation of the Code of Conduct of the Company and is displayed on the website (of the Company) at http://www.atul.co.in/ investors/pdf/Whistle_Blowing_Policy.pdf No personnel has been denied access to the Audit Committee.

21. Business Responsibility Report

As per Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report is given at page number 68.

22. Dividend Distribution Policy

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is given at page number 74.

23. Acknowledgements

The Board expresses its sincere thanks to all the employees, customers, suppliers, lenders, regulatory and Government authorities, Stock Exchanges, investors for their support.

For and on behalf of the Board of Directors

Mumbai (Sunil Siddharth Lalbhai)

May 05, 2017 Chairman and Managing Director


Mar 31, 2013

Dear Members,

The Board of Directors presents the Annual Report of Atul together with the audited statement of accounts for the year ended March 31, 2013.

Financial Results

(Rs. cr)

2012-13 2011-12

Revenue from operations 2,001 1,778

Other income 19 14

Total revenues 2,020 1,792

Profit before tax and exchange rate difference 189 134

Exchange rate difference - expense /(income) (3) 12

Profit before tax 192 122

Provision for tax 56 34

Profit for the year 136 88

Tax adjustments for the earlier years - -

Profit available for appropriation 136 88

Balance brought forward 397 334

Disposable surplus 533 422

Appropriations

General reserve 14 9

Proposed dividend 18 14

Dividend distribution tax 3 2

Balance carried forward 498 397

Financial Performance

Net sales increased by 12% to Rs. 1,964 cr. Net sales in India increased by 5% to Rs. 986 cr. Export sales increased by 21% to Rs. 977 cr. PBT increased by 57% from Rs. 122 cr to Rs. 192 cr. During the year, CARE upgraded credit rating to CARE AA- (from CARE A in the Previous year) for long-term debts, while maintaining top notch CARE A1 for short-term debts.

In September 2012, the Company was directed by Gujarat Pollution Control Board to close down manufacturing at its Valsad Complex and take measures to dismantle the old pipelines used for carrying liquid effluents; accordingly, manufacturing activity at the complex remained closed for most of October 2012 with its consequential decrease in sales and profit in the second half of the year. However, the Company does not expect significant long-term adverse impact.

Moreover, the Company undertook 25 projects to further enhance its performance in the area of environment protection with an investment of Rs. 71 cr and expects to emerge stronger to face the future.

Dividend

The Board recommends payment of dividend of Rs. 6 per share on 2,96,61,733 Equity Shares of Rs.10 each fully paid-up. The dividend will entail an outflow of Rs. 20.82 cr (including dividend distribution tax) on the paid-up Equity Share capital of Rs. 29.66 cr.

Management Discussion and Analysis

Management Discussion and Analysis covering performance of the two Reporting Segments, namely, Life Science Chemicals and Performance & Other Chemicals, is given at page no 25 to 31 .

Corporate Governance

A Report on Corporate Governance along with the certificate from the Statutory Auditors regarding compliance of the conditions of Corporate Governance pursuant to Clause 49 of the Listing Agreements is given at page no 32 to 44.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo and Employees

Information required under Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules,1975, as amended from time to time, forms a part of this Report. However, as per the provisions of Section 219(1) (b)(iv), the Report and Accounts are being sent to all the Members excluding the information relating to conservation of energy, technology absorption, foreign exchange earnings & outgo and the statement of particulars of employees. Any Member interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy.

Insurance

The Company has taken adequate insurance to cover the risks to its people, plant and machineries, buildings and other assets, profits and third parties.

Fixed Deposits

Fixed deposits amounting to Rs. 0.06 cr as on March 31, 2013 were not claimed by the depositors. The fixed deposits which matured on or before March 31, 2006, but remained outstanding since then were transferred to the Investor Education and Protection Fund as required under Section 205 C of the Companies Act, 1956.

Subsidiary Companies

The Company has nine subsidiary companies namely, Atul Bioscience Ltd, Atul Rajasthan Date Palms Ltd, DPD Ltd, Atul USA Inc, Atul Europe Ltd, Atul Deutschland GmbH, Atul China Ltd, Atul Brasil Quimicos Ltda and Ameer Trading Corporation Ltd.

Pursuant to the general exemption granted by the Central Government, details as provided under Section 212(1) of the Companies Act, 1956 in respect of the subsidiary companies are not attached. However, the Investors may seek the copies of the Annual Reports and related detailed information of the subsidiary companies by writing to the Company Secretary at the Registered Office.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that to the best of their knowledge and belief:

(i) In the preparation of the annual accounts, the applicable Accounting Standards were followed

(ii) Such Accounting Policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2013 and of the profit of the Company for the year ended on that date

(iii) Proper and sufficient care was taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(iv) The attached annual accounts for the year ended March 31, 2013 were prepared on a going concern basis.

Directors

Dr K Aparajithan resigned from the Board with effect from January 18, 2013. The Board places on record its appreciation for his valuable contribution as a Director.

According to Article 134 of the Articles of Association of the Company, Dr S S Baijal, Mr S M Datta and Mr V S Rangan retire by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting (AGM) scheduled on July 26, 2013.

Mr R A Shah joined the Board as an Additional Director (Non- executive, Independent) with effect from January 18, 2013. Prior to this, he was Alternate Director to Dr Aparajithan. The term of Mr Shah as an Additional Director ceases in the ensuing AGM. Accordingly, his reappointment as a Director is proposed in the AGM Notice.

The current five year term of Mr S S Lalbhai, Chairman and Managing Director, expires on June 30, 2014. The reappointment of Mr Lalbhai for another term of five years is proposed in the AGM Notice.

Auditors

Dalal & Shah, the Statutory Auditors of the Company, will retire at the conclusion of the ensuing AGM. They have given their consent to continue to act as the Auditors for 2013-14, if reappointed.

The relevant notes forming a part of the accounts are self explanatory and give full information and explanation in respect of the observations made by the Auditors in their Report.

The Board appointed R Nanabhoy & Co as the Cost Auditors for 2013-14 on May 07, 2013.

Acknowledgements

The Board expresses its sincere thanks to all the customers, employees, investors, lenders, suppliers, regulatory and Government authorities and the Stock Exchanges for their continuing support.

For and on behalf of

the Board of Directors

Mumbai Sunil S Lalbhai

May 07, 2013 Chairman and Managing Director


Mar 31, 2011

The Board of Directors presents the Annual Report of Atul together with the audited statement of accounts for the year ended March 31, 2011.

Financial results

(Rs. crores)

2010-11 2009-10

Net sales and operating income 1548 1198

Other income 6 6

Total revenues 1554 1204

Profit before tax and exchange rate difference 148 89

Exchange rate difference income (expense) (9) (9)

Profit before tax 139 80

Provision for tax 43 27

Profit for the year 96 53

Tax adjustments for the earlier years (6) 4

Profit available for appropriation 90 57

Balance brought forward 265 227

Disposable surplus 355 284

Appropriations

General reserve 5 5

Proposed dividend 14 12

Dividend distribution tax on above 2 2

Balance carried forward 334 265

Dividend

The Board recommends payment of dividend of Rs. 4.5 per share on 2,96,61,733 equity shares of Rs. 10 each fully paid up. The dividend will entail an outflow of Rs. 15.51 crores (including dividend distribution tax) on the paid-up equity share capital of Rs. 29.66 crores.

Financial Performance

Net sales increased by 29% to Rs. 1508 crores. While Life Science Chemicals segment grew by 28% to Rs. 492 crores, Performance & Other Chemicals segment grew by 30% to Rs. 1016 crores. Profit after tax increased from Rs. 53 crores to Rs. 96 crores. Higher profit was mainly on account of higher sales resulting from volume growth of around 16%. The return on average capital employed improved from 13% to 18%. Interest to sales ratio reduced from 2.2% in the previous year to 1.7%. Borrowings increased by Rs. 33 crores as a result of higher working capital employed due to growth in sales and also payments towards capital expenditure of Rs. 47 crores. During the year, CARE upgraded

credit rating to PR1+ (from PR1 in the previous year) for short-term debts and to A (from A- in the previous year) for long-term debts of the Company.

Insurance

The Company has taken adequate insurance to cover the risks to its people, plant and machineries, buildings and other assets, profits and third parties.

Directors

According to Article 134 of the Articles of Association of the Company, Mr H S Shah, Dr S S Baijal and Dr K Aparajithan retire by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting scheduled on August 4, 2011.

Corporate Governance

A Report on Corporate Governance along with a certificate from the Statutory Auditors regarding compliance of the conditions of Corporate Governance pursuant to Clause 49 of the Listing Agreement is annexed.

Listing

The Company has paid the annual listing fees for the year 2011-2012 to Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd.

Fixed Deposits

Fixed deposits amounting to Rs. 0.20 crore as on March 31, 2011 were not claimed by the depositors. The fixed deposits which matured on or before March 31, 2004, but remained outstanding since then were transferred to the Investor Education and Protection Fund as required under Section 205 C of the Companies Act, 1956.

Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo, employees, etc.

Information required under Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules,1975, as amended from time to time, forms a part of this Report. However, as per the provisions Section 219(1) (b)(iv), the Report and Accounts are being sent to all the Members excluding the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo and the statement of particulars of employees. Any Member interested in obtaining such particulars may inspect the same at the registered office of the Company or write to the Company Secretary for a copy.

Subsidiary Companies

The Company has six subsidiary companies namely, Ameer Trading Corporation Ltd, Atul Americas Inc, Atul Deutschland GmbH, Atul Europe Ltd, Atul Rajasthan Date Palms Ltd and Atul International Trading (Shanghai) Co Ltd. It has got exemption from attaching the details as provided under Section 212(1) of the Companies Act, 1956 in respect of the subsidiary companies. However, the Investors may seek the copies of the Annual Reports and related detailed information of the subsidiary companies by writing to the Company Secretary at the registered office.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that to the best of their knowledge and belief:

(i) In the preparation of the annual accounts, the applicable accounting standards were followed

(ii) Such accounting policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2011 and of the profit of the Company for the year ended on that date

(iii) Proper and sufficient care was taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(iv) The attached annual accounts for the year ended March 31, 2011 were prepared on a going concern basis.

Auditors

Dalal & Shah, the Auditors of the Company, will retire at the conclusion of the ensuing AGM. They have given their consent to continue to act as the Auditors for 2011-12, if reappointed.

The relevant notes forming a part of the accounts are self explanatory and give full information and explanation in respect of the observations made by the Auditors in their Report.

Acknowledgements

The Board of Directors expresses its sincere thanks to all the customers, employees, investors, lenders, suppliers, regulatory and government authorities and the Stock Exchanges for their continuing support.

For and on behalf of the Board of Directors

Mumbai Sunil S Lalbhai May 13, 2011 Chairman & Managing Director


Mar 31, 2010

The Board of Directors of Atul Ltd presents the Annual Report of the Company together with the audited statement of accounts for the year ended March 31, 2010.

Financial results

(Rs Crores) 2009-10 2008-09

Sales and operating income 1198 1191

Other income 6 5

Total revenues 1204 1196

Profit before tax and exchange rate difference 89 90

Exchange rate difference income (expense) (9) (44)

Profit before tax 80 46

Provision for tax 27 10

Profit for the year 53 35

Tax adjustments relating to earlier years 4 2

Profit available for appropriation 57 38

Balance brought forward 227 204

Disposable surplus 284 242 Appropriation

General reserve 5 4

Proposed dividend 12 9

Dividend tax on above 2 2

Balance carried forward 265 227

Dividend

The Board of Directors of the Company recommend payment of dividend of Rs 4 per share on 2,96,61,733 equity shares of Rs 10 each fully paid up. The dividend will entail an outflow of Rs 13.84 crores on the paid-up equity share capital of Rs 29,66,17,330.

Profitability

Sales in terms of volume on an average increased by 18%; however due to steep reduction in prices of raw materials and the consequent fall in selling prices, sales at Rs 1168 crores (including exports of Rs 513 crores) registered only a negligible growth of less than 1%. Mainly because of a lower loss on account of exchange rate differences, the PBT grew by 75%, from Rs 46 crores to Rs 80 crores. The business Divisions mainly consolidated the spurt in profitability achieved during the previous year with the exception of Polymers which experienced a strong rebound and Colors which grew by about 10% and cut losses. Though lower than the previous year, the Company achieved reasonable cash flow from operations and reduced its borrowings by Rs 73 crores to Rs 295 crores which has substantially improved its leverage ratios and its capacity to raise finance for expansion and acquisitions. The Company improved its efficiencies through yields and de-bottlenecking, and focused on obtaining better realizations for its products.

Finance

The interest and finance charges for the year was Rs 26 crores compared to Rs 41 crores during the previous year - a decrease of 38% as compared to stagnant sales growth. The net interest to sales ratio, as a result decreased to 2.13% from 3.44% last year. In the current year, the benchmark PLR & LIBOR interest rates showed downward bias for most part of the year. LIBOR rates were at historical low levels during the year. The Company took benefit of lower LIBOR rates by increasing utilisation of Buyers credit to reduce the interest cost. Efforts are on to reduce the interest cost as a % of sales through better working capital norms and utilization of assets.

The Company follows a prudent financial policy and aims to maintain optimum financial gearing at all times. The I Company has repaid loans of Rs 66 crores during the year and the Debt to Equity ratio was 0.56 as on March 31, i 2010. During the year CARE reaffirmed the rating of PR1 for short term debt and A- for long term debts of the Company.

The Company takes forward contracts and uses other basic derivative products from time to time as permitted by the RBI to cover its net exports.These are purely based on the actual exposure or likely future anticipated export receivables, but never in the nature of speculation. The Company does not hold or issue derivative financial ; instruments for trading or speculative purposes and all ! the derivative transactions entered into by the Company i are to mitigate or offset the risks that arise from its normal business activities only. Loans taken were used for the purpose that they were sanctioned for by the respective banks or financial institutions.

Projects

During 2010-11 the Company acquired Rubber and Polyurethane Adhesives business and brand Polygrip. The acquired business recorded a sale of Rs 28 crores in 2009-10 prior to acquisition. The Company is in the process of integrating the acquired business with that of Polymers Division. It will also commission p-Cresol project of 8000 mt, which on full capacity basis will generate revenue of Rs 120 crores.

Insurance

The Company has taken adequate insurance to cover the risks to its people, plant & machineries, buildings and ; other assets, profits and third parties.

Directors

Mr N N Wadia resigned from the Board with effect from June 1, 2009 due to preoccupation. The Board places on record its appreciation for his invaluable contribution as a Director for more than three decades.i According to Article 134 of the Articles of Association of the Company, Mr B S Mehta and Mr S M Datta retire by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting (AGM) scheduled on August 31, 2010.

Mr V S Rangan joined the Board as a Non-executive Independent Director with effect irom July 19, 2010. His term as Additional Director ceases in the ensuing AGM. Accordingly, his reappointment as a Director is proposed in the AGM Notice.

Corporate Governance

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance pursuant to Clause 49 of the Listing Agreement is annexed.

Listing

As approved by the Board of Directors and pursuant to the Securities & Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 the Company has got its equity shares de-listed from Ahmedabad Stock Exchange Ltd, Ahmedabad effective March 31, 2010. The equity shares will continue to remain listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Fixed Deposits

As on March 31, 2010, fixed deposits amounting to Rs 0.19 crores were not claimed by the depositors from the Company. The fixed deposits which matured on or before March 31, 2003, but remained outstanding since then were transferred to the Investor Education & Protection Fund as required under Section 205 C of the Companies Act, 1956.

Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo, employees and subsidiary companies Information required under Section 217(1 )(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars Employees) Rules, 1975, as amended from time to time, forms a part of this Report.

However, as per the provisions Section 219(1)(b)(iv), the Report and Accounts are being sent to all the Members of the Company excluding the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo and the statement of particulars of employees. Any Member interested in obtaining such particulars may inspect the same at the registered office of the Company or write to the Company Secretary for a copy.

Subsidiary Companies

The Company has six wholly-owned subsidiary companies namely, Ameer Trading Corporation Ltd, Atul Americas Inc, Atul Deutschland GmbH, Atul Europe Ltd, Atul Rajasthan Date Palms Ltd and Atul International Trading (Shanghai) Co Ltd. The Company has got exemption from attaching the details as provided under Section 212(1) of the Companies Act, 1956 in respect of the subsidiary companies.

However, the investors may seek the copies of the Annual Reports and related detailed information of the subsidiary companies by writing to the Company Secretary at the registered office of the Company.

Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that to the best of their knowledge and belief;

i) In the preparation of the annual accounts, the applicable accounting standards were followed

ii) Such accounting policies were selected and applied consistently and such judgments and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2010 and of the profit of the Company for the year ended on that date

iii) Proper and sufficient care was taken to maintain adequate accounting records in accordance with the

provisions of the Companies Act, 1956forsafeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

iv) The attached annual accounts for the year ended March 31, 2010 were prepared on a going concern basis.

Auditors

Dalai & Shah, the Auditors of the Company, will retire at the conclusion of the ensuing AGM. They have given their consent to continue to act as the Auditors of the Company for 2010-11, if reappointed.

The relevant notes forming a part of the accounts are self- explanatory and give full information and explanation in respect of the observations made by the Auditors in their Report.

Acknowledgements

The Board of Directors expresses its sincere thanks to all the customers, employees, investors, lenders, suppliers regulatory and government authorities and stock exchanges for their continuing support.



For and on behalf of the Board of Directors

Sunil S Lalbhai

Chairman & Managing Director

Mumbai July 19, 2010

Find IFSC