Atul Ltd 2008-09

26 of free reserves. Of the total equity capital, the promoters held 39.43% as at March 31, 2009. Reserves The reserves increased by 6% from Rs403 crores to Rs429 crores during the year. The net addition to reserves was owing to profits earned during the year. Loan funds The reliance on external funds decreased by 14 % to Rs368 crores. Focused approach to realise funds blocked with the Government and in inventories and debtors helped in reducing debt. Secured loans constituted 89% of the total loans. Of the secured loans, 15% was for funding working capital requirements, the balance being used in projects. Foreign currency loans constituted 27% of the total debt. The Company remained reasonably geared with the ratio of total debt to total equity at 0.77:1. Interest Interest cost during the year increased by 25% during the year owing to higher interest rates and increase in debt. The average debt cost stood at 8.70% p.a. on March 31, 2009 compared with 8.04% p.a. at the same time in the previous year. Year 2004-05 2005-06 2006-07 2007-08 2008-09 Debt-equity ratio 1.61 1.20 1.17 0.95 0.77 Interest coverage ratio Year 2004-05 2005-06 2006-07 2007-08 2008-09 Interest Coverage 2.98 2.48 2.96 3.06 2.89 Gross block During the year, gross block increased by 9% to Rs951 crores. Addition to plant and machinery accounted for Rs72 crores (77% of the total addition) whereas addition to buildings accounted for Rs14 crores (15% of the total addition). The investment in plant and machinery was owing to the addition of balancing equipment (for de-bottlenecking capacities) in different Divisions and DDS project in Pharmaceuticals & Intermediates Division resulting in enhanced production. Depreciation Depreciation cost increased by 8% over the previous year, corresponding to the increase in plant, machinery and building. Cumulative depreciation as a part of total gross block was 55%. Investments The Company invested its operational surplus in its business. Other investments remained more or less unchanged at Rs65 crores. Working capital Working capital outlay decreased from Rs356 crores at the end of the previous year to Rs313 crores during the year mainly due to: Focussed decrease in the stock of raw materials by the different businesses, improved systems, support to maintain an optimum level of inventories and introduction of better inventory management tools Decrease in debtors through the credit period reduction and emphasising timely collection The efficiency in working capital management was reflected in an important fact – despite a significant growth in business volumes, working capital outlay as a proportion of the total employed capital decreased from 41% to 37% during the year. Liquidity ratios remained at the level of the previous year, indicating stable short- term liquidity. Liquidity ratios Year 2007-08 2008-09 Current ratio 2.44 2.45 Quick ratio 1.26 1.17