Atul Ltd 2014-15

Atul Ltd | Annual Report 2014-15 Dear Shareholder, During the fiscal, we pursued the Purpose enunciated by our karmayogi Founder, Mr Kasturbhai Lalbhai, while endeavouring to imbibe, nourish and promote the Values he so fondly cherished. We remained committed to continuing his legacy of conducting business that reflects its true purpose. To actualise this, we prepared ourselves further for growing meaningfully in a more competitive world; simultaneously we worked so as to consistently and increasingly give back to each section of the Stakeholders. 2014 was a year of optimism for many economies – the world GDP grew by 3.4% to US$ 77.3 t. The USA led the show – its GDP grew by 2.4% to US$ 17.4 t, that of China grew by 7.4% to US$ 10.4 t and that of Euro Area grew by 0.9% to US$ 13.4 t. The GDP of India grew by 7.2%* to US$ 2.1 t. 2015 has had a shaky start – many believe that recession is likely to plague some economies, and demand is likely to remain subdued at least in the first half. World Chemical Industry , the size of which is US$ 4.3 t, grew by 2.5%. India at US$ 100 b* grew at 4% and continued to remain at number 7. China at US$ 1.5 t grew at 5% and maintained its number one position. The other five countries ahead of India, namely the USA, Japan, Germany, South Korea and France, showed growth between -0.8% and 4% in 2014. The Industry is expected to grow slower at 2% during 2015; nonetheless we will work with focus and optimism and promote the ‘Make in India’ theme in our own small way. Our Company put forward improved results for the fiscal: sales grew to ` 2,510 cr ( ↑ 9%), EBITDA increased to ` 391 cr ( ↑ 8%) and PBT from operations increased to ` 312 cr ( ↑ 13%). EBITDA margin at 16% remained almost unchanged because of increase in fixed costs. The increases in sales and profit were small – indeed, we believe that we have the potential to perform significantly better. The Board has recommended a dividend of 85%, the highest so far, reflecting confidence in the future. *2014-15 During the fiscal, our Company completed 4 projects with an investment of ` 33 cr which are expected to generate sales of ` 143 cr at full capacity utilisation; 7 projects with an investment of ` 321 cr are underway, which on completion, at full capacity utilisation, are expected to generate sales of ` 554 cr, and it will be within the reach of our Company to aim for achieving sales of ` 4,000 cr in 2017-18, as we see at present. In addition, we are continuously taking up small capital expenditure proposals for debottlenecking and upgradation as we believe we have a lot to harness and optimise from what we already have. The subsidiary and joint venture companies have further improved their performance: Atul Bioscience grew its sales and PBT by 37% and 50% to ` 47 cr and ` 6 cr respectively. Rudolf Atul Chemicals increased its sales and PBT by 42% and 55% to ` 43 cr and ` 8 cr respectively. DPD grew its sales and PBT by 17% and 9% to £ 1.6 m and £ 0.3 m respectively. Atul Rajasthan Date Palms will commence sales only during 2015-16. The proposal to merge Amal Ltd, an associate company, was approved by the Board of our Company. Atul Brasil Quimicos, a subsidiary of our Company, is expected to help grow sales in South America. Atul USA, Atul Europe and Atul China have further improved their sales and are expected to increase trading of products other than those manufactured by our Company. Our Company established Atul Middle East FZ-LLC for growing sales in that part of Asia and Africa. These actions reflect the aspirations of our Company to grow across the world and focus on better, more informed service to our customers . Atul Foundation (Trust) under which all other trusts, institutions, etc promoted by our Company related to social responsibility are placed, continued to serve the society mainly in the areas of education, empowerment, health, relief, infrastructure and conservation. Page number 18 will give a broad idea about some initiatives. The creation of Atul Institute of Vocational Excellence, replete with world-class infrastructure facilities (which Letter to the Shareholders