Atul Ltd 2016-17

19 Directors’ Report Dear Members, The Board of Directors (Board) presents the Annual Report of Atul Ltd together with the audited Financial Statements for the year ended March 31, 2017. 01. Financial results ( ` cr ) 2016-17 2015-16 Sales 2,639 2,403 Revenue from operations 2,848 2,609 Other income 43 43 Total revenue 2,891 2,652 Profit before tax 400 400 Provision for tax 115 126 Profit for the year 285 274 Balance brought forward 1,145 900 Transfer from Comprehensive Income 3 (2) Disposable surplus 1,433 1,172 Less: Dividend paid 30 25 Dividend distribution tax (net) 6 2 Balance carried forward 1,397 1,145 02. Performance Sales increased by 10% from ` 2,403 cr to ` 2,639 cr mainly due to higher volumes (16%), partly offset by lower prices (6%). Sales in India increased by 3% from ` 1,198 cr to ` 1,239 cr. Sales outside India increased by 16% from ` 1,205 cr to ` 1,400 cr. The Earning per share increased from ` 92.53 to ` 96.18. While the operating profit before working capital changes increased by 1% from ` 478 cr to ` 485 cr, the net cash flow from operating activities decreased by 3% from ` 375 cr to ` 364 cr. Sales of Life Science Chemicals (LSC) Segment increased by 10% from ` 737 cr to ` 807 cr, mainly because of higher sales in Sub-segments Crop Protection and Aromatics - I; its EBIT decreased by 19% from ` 161 cr to ` 130 cr. Sales of Performance and Other Chemicals (POC) Segment increased by 10% from ` 1,666 cr to ` 1,832 cr mainly because of higher sales in Sub-segments Aromatics - II and Polymers; its EBIT increased by 16% from ` 249 cr to ` 290 cr. More details are given in the Management Discussion and Analysis (MDA) Report. The borrowings of the Company decreased (including current maturities of long-term borrowings) by 49% from ` 302 cr to ` 155 cr despite payments towards capital expenditure of ` 176 cr. Credit Analysis and Research Ltd (CARE) maintained its credit rating at ‘AA+’ (double A plus) for long-term borrowings of the Company. Its rating for short-term borrowings and commercial paper remained at ‘A1+’ (A1 plus), the highest possible awarded by CARE. The Company completed 3 expansion projects with an investment of ` 117 cr which are expected to generate sales of ` 220 cr at full capacity utilisation. 03. Dividend The Board recommends payment of dividend of ` 10 per share on 2,96,61,733 Equity shares of ` 10 each fully paid up. The dividend will entail an outflow of ` 35.70 cr {including dividend distribution tax (net)} on the paid-up Equity share capital of ` 29.66 cr. 04. Conservation of energy, technology absorption, foreign exchange earnings and outgo Information required under Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, as amended from time to time, forms a part of this Report which is given at page number 24. 05. Insurance The Company has taken adequate insurance to cover the risks to its employees, property (land and buildings), plant, equipment, other assets and third parties. 06. Risk Management Risk Management is an integral part of the business practices of the Company. The framework of Risk Management concentrates on formalising a system to deal with the most relevant risks, building on existing management practices, knowledge and structures. With the help of a reputed international consultancy firm, the Company has developed and