Atul Ltd 2013-14

Atul Ltd | Annual Report 2013-14 Dear Shareholders, Our legendary Founder , Mr Kasturbhai Lalbhai, established Atul with an inspiring vision and eye for details. We are working with the realisation that we have the responsibility and privilege to be the reflection of his legacy and are endeavouring to carry it forward with passion - focusing on the Values exemplified by him and cherished by us: excellence, perseverance and larger purpose, as we pursue our goals. In 2013, the world GDP grew 3% (from 3.2%). The GDP of the UK and Brazil registered a strong growth at 1.8% (from 0.3%) and 2.3% (from 1%) respectively whereas that of China was stable at 7.7%. The GDP of the USA and India grew slower at 1.9% (from 2.8%) and 4.4% (from 4.7%) respectively, but that of Euro Area at -0.6% (from -0.7%) continued its decline. It is expected that 2014 will overall be a better year for the world and also India. The World Chemical Industry *, the size of which is US$ 4.1 t, grew by 2.5% in 2013. The first five countries in terms of size of their Chemical Industry are China (US$ 1,340 b), the USA (US$ 598 b), Japan (US$ 225 b), Germany (US$ 211 b), and South Korea (US$ 163 b). India (US$ 108 b) comes at number 6! The size and the share of Indian Chemical Industry only mirrors the possibilities of our times to grow and contribute to the economic and social development of India. Our Company improved its overall performance in 2013-14; it attained: Sales of ` 2,307 cr (17% over 2012-13), EBITDA of 15%** (14% in 2012-13), profit before tax from operations of ` 277** cr ( ` 187 cr in 2012-13), GWC of 133 days (141 days in 2012-13) and RoCE of 26%** (21% in 2012-13). More importantly, barring a small dip in 2011-12, our Company has been able to consistently improve its profit before tax from operations from ` 7 cr to ` 277** cr over the last 11 years. The Boardof Directors (Board) has recommended the highest ever dividend of 75%, considering improvedperformance and also to commemorate the 90 th birth anniversary of our second Chairman, Mr Siddharth Kasturbhai, who tirelessly worked for 45 years to build and strengthen the foundations of our Company and simultaneously nurtured the Values with exemplary leadership. I trust you will give your unanimous support to the recommendation. We completed 8 debottlenecking and expansion projects during 2013-14 and got approval of the Investment Committee of the Board to undertake 8 modernisation ı expansion projects involving an outlay of ` 370 cr: these comprise, mainly, 2 projects related to modernisation and 6 projects of expansion (existing and new). It will be well within reach for our Company to cross sales of ` 3,500 cr once the approved projects are completed. The subsidiary and joint venture companies are growing steadily. In particular, Atul Bioscience Ltd has increased its sales from ` 0 in 2009-10 to ` 35 cr in 2013-14 and Rudolf Atul Chemicals Ltd (RACL) has increased its sales from ` 9 cr in 2011-12 (the year in which Atul acquired 50% shareholding) to ` 30 cr in 2013-14. The Board of RACL has proposed a maiden dividend of 15% for 2013-14. With their consistent performance, these companies will enhance the intrinsic value of our Company. Our Company continued to take initiatives for serving the society , remaining in step with its enriching legacy. The erection of buildings of Atul Institute of Vocational Excellence (AIVE), a project based on Public Private Partnership model, began in Dharampur, Gujarat; AIVE is expected to impart training to about 1,000 tribal students per year. All the other initiatives are mainly directed towards education, health and infrastructure. Our future aspirations outweigh our past achievements, and it is imperative we de-risk businesses, make them Letter to the Shareholders