Atul Ltd 2019-20

Corporate Overview Statutory Reports Financial Statements 01-21 22-91 92-228 54 Atul Ltd | Annual Report 2019-20 The products falling under these product groups are used by customers belonging to Aerospace, Automobile, Composites, Construction, Defence, Electrical and Electronics, Footwear, Paint and Coatings, Paper, Sport and Leisure and Wind Energy industries. The product groups comprise about 96 synthetic products and 300 formulations. B11, P62 and P101 are some of the key products. Synthetic and formulated products are versatile and have significant applications in Aerospace, Automobile, FRP Composites, Wind Energy, Electrical and Electronics, Paint and Coatings, Construction, Defence, Sports and Leisure and Paper industries. During 2019-20, sales decreased by 1% from ` 1,048 cr to ` 1,041 cr. Sales in India decreased by 10% from ` 711 cr to ` 642 cr; bulk sales in India decreased by 13% from ` 593 cr to ` 517 cr, whereas retail sales increased by 6% from ` 118 cr to ` 125 cr. Sales outside India increased by 18% from ` 337 cr to ` 399 cr and formed 38% of the total. Growth on account of volume was 5%. POLYMERS Product groups: Epoxy resins, Curing agents, Reactive diluents, Sulfones, Protective paints and Adhesives based on Epoxy, Synthetic rubber, Polyurethane, Cyanoacrylate, PVC and PVA The world market for epoxy resins and curing agents is estimated at US$ 7.6 bn and is growing at about 2% and Indian market is estimated at US$ 285 mn and is growing at about 6%. There are about seven major companies which dominate the world marketplace. The world market for sulfones (curing agents) is estimated at US$ 393 mn and is growing at about 6%. The user industries, Construction, Defence, Electrical and Electronics, Paint and Coatings are growing well particularly in India. The Company will participate in this growth by i) widening its market reach, ii) increasing its manufacturing and working capital efficiencies, iii) debottlenecking and adding new capacities of epoxy resins and curing agents. Cheaper imports and new entrants in the market will keep the market competitive and may keep margins under pressure. Since the two main raw materials, namely Bisphenol-A and Epichlorohydrin, are imported, fluctuations in foreign exchange may impact margins. The Company has implemented adequate internal control systems and risk management processes commensurate with the nature of its business and size and complexity of its operations. They provide reasonable assurance on effectiveness and INTERNAL CONTROL SYSTEMS efficiency of its operations, reliability of financial reporting and compliance with applicable laws and regulations. The internal control systems that deploy an amalgam of modern and traditional audit tools are routinely tested, certified and upgraded as required by the Statutory Auditors as well as the Internal Auditors to ensure both relevance and comprehensiveness. Significant audit observations and follow-up actions and recommendations thereon are also reported to the Senior Management and the Audit Committee for their review. The uncertainties associated with the pandemic COVID-19 may have adverse impact on the demand and supply chain in the short-term in both the segments, and the Company is working tominimise the impact of such aberrations to sustain the operations and identify new opportunities to grow.