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Directors Report of Atul Ltd.

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

 
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