Atul Ltd 2009-10

Corporate Identity Serving Diverse Industries Purpose and Values Overview by the Chairman Operational Highlights Financial Analysis Research and Technology Safety, HealthandEnvironment Serving the Society Directors’ Report Management Discussion andAnalysis Report on Corporate Governance Financial Statements 5) Profit before tax at Rs 80 crores was higher by Rs 34 crores 6) Profit after tax at Rs 53 crores was higher by Rs 17 crores 7) Net Cash-flow from operating activities was Rs 106 crores 8) Borrowing came down from Rs 368 crores to Rs 295 crores The profit saw a significant improvement over the previous year mainly because of the substantially lower impact on account of adverse foreign exchange and lower interest cost. Our Company has the distinction of never skipping the dividend since it began its operations in 1952 except in 1999-2000. On behalf of the Board, I had in the Annual General Meeting held on August 18, 2000 indicated to the shareholders that the skipped dividend will be made good, and I am happy to state that the Directors have recommended a higher dividend of 40% in step with the verbal declaration. We brought down our capital expenditure during the year and instead undertook relatively smaller, but several projects of improvements; as against an outflow of Rs 72 crores in the previous year, our Company spent only Rs 21 crores during the year. These projects will further strengthen our long-term competitiveness and improve sales and profit. The potential of our Company is much in excess of what we have been able to deliver, and my colleagues and I are fully seized of this reality. Coupled with this, we are also clear that even in the depth of crisis, there are silver linings in the form of opportunities for internal improvement and growth, and we are working to realise them. During 2010-11 , we will continue with our long-term agenda and undertake several initiatives under 6 broad areas: i) improving efficiencies and productivity, ii) expanding existing products and introducing new value added products, iii) bringing down gaseous, liquid and solid pollutants, iv) making businesses more systems-driven, v) serving the society and vi) enhancing people competencies. We are certain these initiatives will significantly enhance our performance and help us in accessing different opportunities for rapid growth in the years ahead. In essence, we are working to further leverage the internal possibilities for generating surplus cash-flows. Our Company at present has four overseas subsidiary companies , one each in the USA, the UK, Germany and China. Since my last communication to you, we have taken effective steps in Malaysia and Brazil which may ultimately lead to the formation of two more overseas subsidiary companies. Asia and South America are growing rapidly, and we will participate more than ever before in these areas. In order to pursue opportunities in healthcare space in a focused way, our Company has established an associate company, Atul Bioscience Ltd . It owns the manufacturing facilities at Valsad site which earlier belonged to a multi- national pharmaceutical company. Atul Bioscience is investing Rs 15 crores to resurrect these facilities, which are expected to be commissioned before the end of 2010-11. Atul Rajasthan Date Palms Ltd , a subsidiary joint venture company with 74% shareholding by our Company and 26% by the Government of Rajasthan, will commission the largest facility in India to produce tissue cultured date palms. This is a pioneering initiative taken up to help transform the ecology and the economy of the arid regions. Our Company was founded by Mr Kasturbhai Lalbhai , one of the foremost Indians of his times and whose life epitomized exemplary leadership with a strong social purpose. He established Atul on September 15, 1947 with the ultimate objective of fulfilling the then priorities of making India self-reliant, generating large scale employment and creating wealth in rural areas. Since inception, our Company has pursued business with a larger purpose, and I am happy to inform you that in order to keep a track of the social work initiatives more formally, we have commenced reviewing them every month as though it was one of our businesses. We are working to make Atul more customer focused, efficient, growth seeking, knowledge intensive, people oriented and community sensitive and thus reinforce its foundation for the future. In this pursuit, we will change and also make change happen. What will remain constant are our Values , which will bind us together and bring unity in diversity. With best wishes, Sincerely, Sunil S Lalbhai Chairman and Managing Director