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| Annual Report 2008-09
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Inventory
Inventory constituted 36% of current
assets as on March 31, 2009. Inventory
value decreased by 6% from Rs209
crores as on March 31, 2008 to Rs197
crores as on March 31, 2009. The
inventory cycle stood at 62 days during
the year against 77 days in the previous
year.
Debtors
Debtors constituted 40% of the current assets
as on March 31, 2009. Sundry debtors
decreased substantially by 21% – from Rs281
crores as on March 31, 2008 to Rs223 crores
as on March 31, 2009 – against the increase in
revenues of about 17% during the year. The
quality of the debtors is reflected in proportion
of debtors not more than ‘six months old’
coming down to 5% of total debtors, from 6%
in the previous year. Debtor days stood at 66
days during the year against 96 days in the
previous year.
Loans and advances
Loans and advances decreased by 3%
from Rs113 crores as on March 31, 2008
to Rs110 crores as on March 31, 2009.
This reduced mainly because of refunds
received of moneys blocked with the
Government departments paid in the
past and lower advance tax payment.
Creditors
Creditors of the Company (including
creditors for services and expenses)
decreased from Rs199 crores as on
March 31, 2008 to Rs145 crores as on
March 31, 2009 despite growth in
business activity. The creditors’ cycle
decreased from 120 days of turnover
equivalent in the previous year to 84 days
during the year, somewhat increasing the
burden on the working capital cycle.
Tax management
Total tax liability increased from Rs3
crores to Rs10 crores during the year.
Current tax:
Current tax increased from
Rs4 crores to Rs8 crores during the year.
The average corporate tax rate was about
16.61%.
Deferred tax:
The Company provided
Rs1.61 crores for deferred tax during the
year against Rs0.64 crores during the
previous year.
Foreign exchange
management
As a part of the Accounting Policy,
transactions denominated in foreign
currencies are recorded at the
rate prevailing on the date of the
transaction.
On account of a growing demand, nearly
48% of the revenues were derived from
exports during the year (48% in the
previous year). Aromatics Division
accounted for the highest share of total
export at 35%. To protect the income
against
any
foreign
exchange
fluctuations, the Company follows a
documented policy.
Human Resources
There is a continuous endeavour at Atul
to improve HR practices so that people
remain high on motivation and learning
to give their best.
Several steps were taken in this direction
during the year:
1) Modification
of
performance
management system significantly so
as to make it more objective and
transparent
2) Crystallisation of job descriptions for
every unique position to enhance role
clarity
3) Formalisation of Atul Values so that
they become a seamless thread and in
turn help present a common identity
4) Decision to implement the latest
version of PeopleSoft, a world-class
HR software, to boost HR capabilities
5) Several training programs to enrich
skills in select functions
A Union Settlement for a period of 5
years was signed for at Ankleshwar site.
Workmen, staff and managers worked as
one team to achieve common objectives.
The new HR initiatives will make the
Company one of the best in the industry
HR practices to ensure and secure long-
term success, and the Company is
committed to make this happen.
Internal Control Systems
The Company has during the year taken
steps to improve its current structure of
internal controls for safeguarding the
assets of the Company; ensuring
transactions are in accordance with
Company policies and are duly
authorised, recorded and reported;
preventing possibilities of fraud or any
other irregularities.
The internal audit department of the
Company is staffed with qualified
professionals and the efficiency and
effectiveness
of
controls
are
independently reviewed by them. During
the year, a system of peer review of the
in-house audit department was also
introduced. The annual audit plan is
reviewed by the Audit Committee and
major findings and actions taken |
proposed to be taken are also reported
to the Audit Committee.