Atul Ltd 2011-12

Atul Ltd | Annual Report 2011-12 Letter to the Shareholders Dear Shareholders, Atul completed 60 years of service through business, and we pay tribute to our Founder, Mr Kasturbhai Lalbhai, for leaving behind a legacy of Vision, Perseverance and Ethics. We also express our gratitude to Mr Balwantrai Mazumdar and Mr Siddharth Kasturbhai for their life time commitment in building strong foundations and creating one of the finest chemical sites in the world. Our committed employees and illustrious Directors are the backbone of our future growth, and we are looking forward to expand and diversify our business footprints in a responsible way. The world economy is estimated (by IMF) to have grown 3.8% in 2011 - advanced economies 1.6% and emerging economies 6.2%,with GDP for the year of around US$ 70 tn. Indian economy is estimated (by the Government) to have grown 6.9% in 2011-12, with GDP of around US$ 1.7 tn. Despite the hugely uncertain economic and political outlook at this time, we remain steadfast in fulfilling the needs of diverse industries which provide infinite possibilities, thus creating, giving and adding value. The growth of the world Chemical Industry in 2011 was about 4.8%, with revenues of around US$ 3.4 tn. (excluding Pharmaceutical industry). Indian Chemical industry, despite a huge untapped potential, grew only about 7%, with revenues of around US$ 83 bn. The United Nations proclaimed 2011 as the International Year of Chemistry , commemorating the achievements of chemistry. Grounded in the knowledge of chemistry, our Company, in its own small way, is working to make the label ‘Made in India’ proud across the world. The price of crude oil fluctuated between US$ 75 and US$ 114 per barrel; coal price in India increased by 24% and Indian ` vacillated between 44.65 to 54.24 to the US$. As the key raw materials used by our Company are derived from crude oil, steam and electricity are largely generated from coal and exports, imports and foreign currency loans are largely denominated in the US$, any abrupt changes in them affect our profitability.We will embrace external realities by seeking consistent internal improvements and actualising new growth opportunities. We are not happy with the results we delivered which are as follows:  Sales grew by 17% from ` 1508 cr to ` 1761 cr  Contribution margin declined from 27% to 26%  PBT before exceptional items declined from ` 129 cr to ` 116 cr  PAT decreased from ` 90 cr to ` 88 cr  RoCE declined from 18% to 17%  Gross working capital improved from 151 days to 150  Borrowing increased from ` 327 cr to ` 388 cr Our Company pursued several Key Initiatives to seek faster growth :  Completed p -Cresol project  Commenced implementation of 2,4 DCP, BLR 1 and BLR 2 projects  Executed 29 debottlenecking and small projects  Commissioned multi-purpose facilities in Atul Bioscience  Acquired DPD, a company engaged in tissue culture of date palms  Commissioned tissue culture facility of Atul Rajasthan Date Palms  Formed a JV each for textile chemicals and stone care chemicals