Atul Ltd | Integrated Annual Report 2024-25 ENDEAVOUR | EVOLVE | ELEVATE RESILIENCE
The mangroves depicted on the cover page symbolise resilience, demonstrating their ability to survive and grow in challenging environments such as saline waters, tidal zones and tropical coastlines. They protect shores, support diverse wildlife, enhance biodiversity and sequester carbon, playing a vital role in mitigating climate change. Their leaves excrete salt, while stilt-like aerial roots offer stability in muddy terrain and aid respiration, underscoring the importance of innovation for growth in competitive landscapes. Drawing inspiration from these marvels of nature, we continuously endeavour to evolve, elevate and transform our Company into a more resilient entity. We prioritise long-term sustainability and lasting value in all that we do. Contents Theme 146-306 Financial Statements 2 About Atul - Footprint 4 Performance at a glance 5 Business strategy 6 Pillars of value creation 8 Value creation model 10 Stakeholder engagement Performance overview 14 Letter to the shareholders 16 Financial trend (standalone financials) - five years 20 Financial trend (standalone financials) - 10 years 21 Financial trend (consolidated financials) - 10 years ESG overview 22 Materiality assessment 24 Risk management 31 ESG action report 33 - Environmental 36 - Social - People - Serving the society 42 - Governance - Governance philosophy - Governance structure - Board of Directors 2-47 Corporate overview 48 Directors’ Report 54 Annexure to the Directors’ Report 66 Management Discussion and Analysis 73 Corporate Governance Report 94 Business Responsibility and Sustainability Report 135 Notice 48-144 Statutory Reports 146 Standalone Financial Statements - Independent Auditor’s Report - Financial Statements 226 Consolidated Financial Statements - Independent Auditor’s Report - Financial Statements 307 Abbreviations - Gautama Buddha It is to the one who endures that the final victory comes. Contact The members may send in their comments or suggestions for improvement of the integrated annual report by mailing to shareholders@atul.co.in. 48th Annual General Meeting Friday, July 25, 2025 The meeting will be held through video conferencing. 10:30 am Integrated Annual Report 2024-25
United Nations Sustainable Development Goals We are pleased to present the second integrated annual report of our Company. This report aims to provide a comprehensive overview of the performance of our Company in 2024-25. We are committed to continually enhancing the quality of the annual reports by including additional, relevant information to support the stakeholders in making well-informed decisions. Basis of reporting This report is prepared in accordance with: Companies Act, 2013 (and the Rules made thereunder) Indian Accounting Standards SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Secretarial Standards It is aligned with the internationally recognised frameworks, standards and goals: Integrated Reporting <IR> framework (a benchmark for best practices in corporate reporting) Sustainability Accounting Standards Board Sustainable Development Goals set by the United Nations Reporting scope This report covers the sustainability performance of our Company. For a better understanding, we have placed our products belonging to the two reporting segments, namely, Life Science Chemicals and Performance and Other Chemicals, under nine sub-segments (also referred to as businesses), namely Aromatics, Bulk Chemicals and Intermediates, Colors, Crop Protection – Bulk Actives, Crop Protection – Retail, Floras, Pharmaceuticals, Polymers – Performance Materials and Polymers – Retail. These are effectively managed through a matrix organisational structure, enabling the achievement of comprehensive functional excellence across all areas. Reporting boundary This report extends beyond financial reporting and includes non-financial performance, risks, opportunities and sustainability initiatives aligned with the environmental, social and governance criteria and outcomes attributable to or associated with the key stakeholders. The financial information presented in this report pertains to i) standalone operations of our Company encompassing its national and international businesses, unless specified otherwise and ii) consolidated operations, which in addition to the foregoing, will also include the operations of its subsidiary and joint venture entities. The non-financial information primarily focuses on its own operations (unless specifically mentioned otherwise in the relevant sections). Reporting period The reporting period for this report is from April 01, 2024 to March 31, 2025. Materiality determination This report provides balanced information about the relevant matters that substantively affect the ability of our Company to create value both positively and negatively. We have taken a holistic perspective by engaging with the stakeholders to identify material information or matters. Forward-looking statements In this report, we have shared information and made forward-looking statements to enable investors to know the product portfolio, business logic of our Company and thereby comprehend its prospects. These include all statements other than statements of historical facts, including those regarding the financial position, business strategy, management plans and objectives for future operations. Such statements that we make are based on our assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘intend’, ‘plan’, ‘project’ or words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised although we believe we have been prudent in our assumptions. The actual results may be affected because of uncertainties, risks and even inaccurate assumptions. If uncertainties or known or unknown risks materialise or if underlying assumptions prove inaccurate, actual results may vary materially from those anticipated, believed, estimated, intended, planned or projected. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Statutory Reports Financial Statements 1 Corporate overview Performance overview ESG overview
About Atul Aqua circle, Atul site Our Company was founded by Kasturbhai Lalbhai on September 5, 1947 to create wealth in rural areas, generate employment on a large-scale and make India self-sufficient in selected chemicals (and thus igniting the spirit of self-reliance and laying the foundation for a brighter future for our country). It is the first private sector company of independent India to be inaugurated by its first Prime Minister, Jawaharlal Nehru, on March 17, 1952. Today, it is one of the largest integrated chemical companies in India. As a diversified enterprise and part of Lalbhai Group, one of the oldest business houses of India with a rich legacy, it caters to the needs of various industries. It has sustained through time and continues to evolve, driven by its deep-rooted Values and an ethos of sustainability. Integrated Annual Report 2024-25 2
Production facilities in India (Ankleshwar, Atul, Panoli and Tarapur) Subsidiary companies with production facilities in India (Ambernath and Atul) and the UK (Bristol) Joint venture entities with production facilities in India (Atul and Jodhpur) Wholly-owned subsidiary companies in Brazil (São Paulo), China (Shanghai), Ireland (Dublin), the UAE (Dubai), the UK (Wilmslow) and the USA (Charlotte) Distribution network of retail sales across India Sales of retail products in neighbouring countries Footprint Manufactures 900 products and 400 formulations Owns 140 brands Serves 4,000 customers in 88 countries Kasturbhai Lalbhai (1894 – 1980) Kasturbhai Lalbhai was an institution builder par excellence. He made seminal contributions, particularly in the fields of industry, education, culture and religion. His pioneering efforts helped transform a colonised and impoverished India to a land of emerging hopes and opportunities. He led a purposeful life guided by integrity, discipline, excellence, perseverance and simplicity. Balwantrai Mazumdar (1902 – 1981) An economist, Balwantrai Mazumdar was a voracious reader, sound thinker, patient listener and a farsighted professional. He created an atmosphere of camaraderie that brought out the collective best in the people of Atul. He was the moving force behind making Atul complex one of the largest eco-friendly chemical sites of its kind in the world. He remained with the Group till the end of his life as did most of the people who worked with our Founder. Siddharth Lalbhai (1923 – 1998) A chemical engineer and the elder son of the Founder, Siddharth Lalbhai dedicated his life to the development of Atul. He accorded equal value to creation of wealth and service to society. He upheld the principles of trusteeship, lived by the personal qualities of integrity, perseverance and simplicity and gave single-minded devotion to the tasks on hand. At Atul, we have the most onerous responsibility to expand and diversify its footprint and follow their figurative footsteps. We are endeavouring to achieve this remit in full measure. Statutory Reports Financial Statements 3 Corporate overview Performance overview ESG overview
Performance at a glance Financial* Non-financial Environmental Social Governance 7% increase in renewable energy consumption 1,31,917 direct beneficiaries of CSR projects no cases of corruption and anti-competitive practices 1,86,083 MT waste recycled 44 CSR projects implemented no instances of data breach 88,468 tCO₂e emissions decreased 111 villages reached through infrastructure and conservation initiatives 100% adherence to Code of Conduct *consolidated financials ₹ 5,583 cr revenue ₹ 1,022 cr EBITDA ₹ 692 cr PBT ₹ 25 dividend per share ₹ 26 cr savings through improvements in process efficiency ₹ 270 cr capital expenditure greenscape at Atul site Integrated Annual Report 2024-25 4
Purpose Business strategy Endeavour Evolve Elevate providing high-quality products and services, thus becoming the most preferred partner fostering a spirit of continuous learning and innovation seeking sustained, dynamic growth and securing long-term success having people who practice Values and exemplify a high standard of behaviour adopting developments in science and technology improving the quality of life of the communities we operate in taking responsible care of the surrounding environment We are committed to significantly enhance value for our stakeholders by: Priorities Our purpose in turn guides our business priorities. Broaden and deepen presence in the national and international marketplace in every business directly and with channel partners. Increase efficiency and productivity by strengthening business and people processes, incorporating digitalisation wherever desirable. Seek growth via existing, downstream and upstream, related, value-added and unrelated products, thus having a diversified portfolio. Leverage already deployed existing unit processes and unit operations on the one hand and integrated manufacturing on the other. Develop and grow a portfolio of retail products in India and other countries so as to participate in the full value chain. Serve the society, particularly in areas of national priorities like education, empowerment and infrastructure. Statutory Reports Financial Statements 5 Corporate overview Performance overview ESG overview
Pillars of value creation Our Company optimises the deployment of the six capitals across its operations to maximise value for its stakeholders. This refers to the strength of team members within an organisation. It encompasses their knowledge, skills and attributes. It also comprises their alignment with and support for the governance framework. Our Company is committed to continually enriching and empowering its team members (through upskilling), thus fulfilling their aspirations while creating a purpose-led and future-ready organisation. Human capital This refers to the knowledge base of an organisation. It comprises, amongst others, intellectual properties like copyrights, patents, procedures, protocols, rights and licenses, software and systems. Our Company is committed to enhancing consumer experience through improvements and innovations in i) processes across its functions in general and ii) research and development in particular, to introduce sustainable manufacturing processes and new products. Intellectual capital This refers to the monetary pool that is available to an organisation for production of its goods or provision of its services. It is usually obtained from equity, debt and (or) generated through operations. Our Company is committed to efficiently using its monetary resources (generated from its operations) to deliver long-term sustainable growth and thus enhance its value and share it with all its stakeholders. Financial capital Serving diverse industries and Agriculture Automobile Cosmetic Defence Flavour Food Home Care Horticulture Personal Care Pharmaceuticals Sport and Leisure Textile Integrated Annual Report 2024-25 6
This refers to relationships that an organisation has established with different stakeholder groups, formal and informal entities and institutions associated with it to improve both individual and collective well-being. Our Company is committed to nurturing relationships with each of its stakeholder groups, creating a favourable impact on them and together implementing well-being programs for the society at large to promote inclusive growth. Social and relationship capital This refers to the manufacturing assets (such as buildings, machineries and plants) that the organisation depends upon for carrying out its operations. It also comprises products manufactured by an organisation whether for sale or for its own use. Our Company is committed to safely improving efficiencies and increasing capacities (debottlenecking and new), incorporating initiatives related to digitalisation and delivering quality products to its consumers. Manufactured capital This refers to all renewable and non-renewable resources that are used by an organisation for manufacturing | producing goods or providing services. It comprises amongst others, air, forests, land, minerals and water. Our Company is committed to managing its ecological footprint through sustainable sourcing and initiatives that mitigate risks related to climate change, pollutants and water scarcity, thus creating a positive impact on the planet. Natural capital touching lives in many ways ... Composites Construction Dyestuff Electrical and Electronics Fragrance Glass Paint and Coatings Paper Rubber Soap and Detergent Tyre Wind Energy Statutory Reports Financial Statements 7 Corporate overview Performance overview ESG overview
Value creation model WHAT WE DEPEND ON WHAT WE DO Businesses Aromatics Bulk Chemicals and Intermediates Colors Crop Protection - Bulk Actives Crop Protection - Retail Pharmaceuticals Polymers - Retail Floras Polymers - Performance Materials *consolidated basis FINANCIAL CAPITAL Net worth: ` 5,538 cr CapEx: ` 191 cr Borrowings (net): nil HUMAN CAPITAL Team strength: 3,359 members Training: 78,079 man-hours Safety training: 21,457 man-hours INTELLECTUAL CAPITAL R&D laboratories: 10 R&D expenditure: ` 41 cr R&D team strength: 242 MANUFACTURED CAPITAL Manufacturing and production sites*: 8 Manufacturing and production assets*: ` 3,024 cr Zero liquid discharge sites*: 5 NATURAL CAPITAL Total energy consumption: 78,10,518 GJ (of which 1,82,172 GJ is renewable energy consumption) Total water consumption: 45,70,869 kL Salt (washed) consumption*: 1,53,082 MT SOCIAL AND RELATIONSHIP CAPITAL CSR amount spent: ` 13.59 crr No. of customers: 4,000 No. of suppliers: 3,643 Consumer insights Innovation Sales Sourcing Marketing Manufacturing Logistics Integrated Annual Report 2024-25 8
VALUE WE CREATE FOR VALUE WE CREATE *consolidated basis Revenue: ` 5,075 cr PAT: ` 456 cr RoCE: 13.73% Rate of dividend: 250% Current leadership team that is homegrown: 74% Positions filled internally*: 34% LTIFR (permanent team members): 0.06 Labour unrest: nil Amount saved because of of improvement in process efficiency: ` 26 cr New products developed: 46 New formulations developed: 24 Patents granted: 2 No. of products: 900 No. of formulations: 400 Industries served: 30 Countries served: 88 Water intensity reduced: 10.5% Water harvested: 7,30,454 kL Waste recycled: 1,86,083 MT Value-added products from waste: 3 CSR beneficiaries: 1,31,917 Customer satisfaction score: 84% Procurement sourced from India: 81% Sourcing by value from suppliers with over 10 years of relationship: 48% Consumers We aim to provide superior quality products, formulations and services to our well-informed consumers to meet their expectations. Customers We supply our products to customers consisting of users and channel partners (distributors and retailers) to grow their businesses (and ours). People We aim to create a safe and happy environment, reward team members fairly and provide them with opportunities to learn and grow. Suppliers and business partners We partner with suppliers and business partners for our requirement of materials and services which in turn grow their businesses (and ours). Government We contribute to the exchequers, in India and outside, through our business operations and also undertake public-private partnership projects. Shareholders We strive to deliver responsible, profitable and consistent growth for our shareholders, taking a long-term view. Planet We aim to make the planet better by improving our operations and bringing down gaseous emissions, liquid effluents and solid wastes. Society We serve, in particular, the communities we operate in, and in general, the society, to make a difference in the lives of people. Statutory Reports Financial Statements 9 Corporate overview Performance overview ESG overview
We actively engage with stakeholders who not only influence the business, but also those who are impacted by the operations of our Company. The business model of our Company places stakeholders at the core, ensuring that their evolving needs and expectations guide our decision-making. This approach fosters trust, safeguards stakeholder interests and strengthens relationships built on mutual respect and shared growth. Through continuous engagement, we address stakeholder priorities, integrate their insights into strategic planning and drive sustained value creation across the short, medium and long-term. We have identified eight stakeholder groups that are critical to the success of our Company. Stakeholder engagement Customers Consumers Capital linkages Capital linkages Key interests and concerns Key interests and concerns Digital transformation Knowledge support On-time deliveries Reliable services Return on investment Competitive costs On-time deliveries Product availability Product quality Sustainable products Methods of engagement Methods of engagement CRM platform Distributor meets* Induction sessions (new distributors) Personal outreach Performance reviews Advertisements Personal outreach Product labels Technical services Website Frequency ongoing, *once a year Frequency ongoing Capitals Financial Human Intellectual Manufactured Natural Social and relationship Integrated Annual Report 2024-25 10
Team members Capital linkages Key interests and concerns Competitive remuneration Diversity and inclusion Learning, development and career growth opportunities Purpose at work Safe and secure workplace Methods of engagement Communication* Engagement survey* Goal setting, performance reviews and feedbacks Intranet Learning and development programs Frequency ongoing, *once a year Ankleshwar site Suppliers and business partners Capital linkages Key interests and concerns Fair selection process Knowledge support Mutually beneficial partnerships Shared commitment on responsible sourcing Timely payments Methods of engagement Personal outreach Supplier evaluation and reviews Supplier meet* Supplier portal Website Frequency ongoing, *once a year Statutory Reports Financial Statements Corporate overview Performance overview ESG overview 11
Government Planet Capital linkages Capital linkages Key interests and concerns Key interests and concerns Capacity and skill building Compliance to laws Contribution to exchequer Natural assets protection Product safety Pollutants reduction and treatment Protection of biodiversity Regeneration of nature Renewable energy Water harvesting and recycling Methods of engagement Methods of engagement Advocacy through industry associations Personal outreach Public-private partnerships Public hearings Statutory approvals Advocacy with relevant local and state authorities Engagement with communities Environmental impact assessments Environment laboratory Products from pollutants (circular economy) Frequency ongoing Frequency ongoing Integrated Annual Report 2024-25 12
Shareholders Society Capital linkages Capital linkages Key interests and concerns Key interests and concerns Business resilience and growth Communication Corporate governance Dividends Long-term value creation Education and empowerment Employment Environmental protection Health Infrastructure development Methods of engagement Methods of engagement Analyst meet* Annual General Meeting* Annual report* Stock exchange filings Website Community feedback Personal outreach Initiatives by and projects of Atul Foundation Need assessment surveys Partnerships with NGOs Frequency ongoing, *once a year Frequency ongoing bird’s eye view of Atul Vidyalaya Statutory Reports Financial Statements Corporate overview Performance overview ESG overview 13
Dear fellow shareholders, 2024-25 was a better fiscal for our Company (compared to 2023-24) although not the best. The numbers below are on consolidated results basis. Sales: ` 5,583 cr, hitherto highest, up by 18% (17% volume) EBITDA: ` 1,022 cr, hitherto highest, up by 47% EBITDA margin: 18%, higher by three percentage points (earlier best 27%) PBT: ` 692 cr, higher by 54% (earlier best ` 882 cr) RoCE:14%, higher by one percentage point (earlier best 34%) The Board has recommended a dividend of 250% (2023-24: 200%) with a payout of 16% (2023-24: 15%). Meanwhile, team Atul is continuing its pursuit to surpass the previous bests. Global nominal GDP of US$ 110.55 t grew at 3.3% in 2024 (same as 2023) despite the ongoing economic, political and social uncertainties. India ranked fifth in GDP after USA, China, Germany and Japan GDP of USA and China were US$ 29.2 t and US$ 18.8 t GDP of Germany and Japan were US$ 4.7 t and US$ 4.1 t GDP of India was US$ 3.9 t (soon expected to rank fourth) GDP of India must grow at 7.8% to be a developed economy by 2047. Our Company will contribute in its own small way in this endeavour. There are three big changes consistently and significantly reshaping the profile of chemical industry (as is true for many other industries). Technology | Artificial intelligence (AI) and other technologies Sustainability | E + ESG* * Economic + Environmental, Social and Governance Tariffs | Protection to local manufacturers These evolving trends reflect the need to align | transform to be in step with time. We are identifying and implementing relevant initiatives. Global chemical industry grew at 3.9% in 2024, faster compared to 0.3% in 2023. India ranked sixth (after China, USA, Germany, Japan and South Korea) Size of chemical industry of China and USA was US$ 2.4 t and US$ 633 b Chemical industry of Germany – size of which was US$ 236 b – grew by 2.5% Chemical industry of Japan – size of which was US$ 158 b – de-grew by 1% Size of chemical industry of India was US$ 220 b (thus there is a huge scope to grow) Almost all manufactured products are enabled by chemistry. Our Company is well placed to tap into the emerging opportunities. Letter to the shareholders The newer entities under our Company – established with specific logic – are gradually improving their performance. Atul Products (100% owned) increased sales from ` 65 cr to ` 353 cr. It decreased loss and expects to be PBT positive in 2025-26. Sales of Anaven [50-50 joint venture (JV)], increased from ` 73 cr to ` 86 cr. It became EBITDA positive. Atul Rajasthan Date Palms (74-26 JV) is still perfecting the technology. It expects to gradually better its performance. Honourable Chief Minister of Gujarat, Shri Bhupendra Patel, unveiled Valsad Institute of Medical Sciences on February 3, 2025. The established entities under our Company have increased sales although not always profit. Atul Bioscience (100% owned) increased sales from ` 132 cr to ` 137 cr. It obtained USFDA for its Ambernath site. DPD (98% owned) increased sales from £ 4.7 m to £ 5 m. It has the potential to increase sales by 50%. RACL (50-50 JV) achieved its highest sales of ` 167 cr and PBT of ` 36 cr. It too has a good scope to raise its sales. Amal (49.85% owned), on a consolidated basis, achieved its highest sales of ` 135 cr and PBT of ` 33 cr. All the entities, subsidiary, JV and associate, are expected to steadily grow and boost the consolidated performance of our Company. Our Company and its subsidiary, JV and associate entities are strengthening their financial position to remain resilient: Our Company continues to remain debt-free. It had cash surplus of ` 691 cr (net of borrowings) as on March 31, 2025. Atul Bioscience decreased its total debt from ` 55 cr to ` 45 cr. Its debt-equity ratio improved further, from 0.8 to 0.6. DPD and Amal fully repaid their balance loans of ` 7 cr and ` 24 cr. Both the entities were cash surplus as on March 31, 2025. RACL continues to remain debt-free. It was cash surplus as on March 31, 2025. Atul Products (AP) and Anaven have debt of ` 151 cr and ` 127 cr. The debt of AP is under the state Government incentive scheme. One of the key objectives is to increase capacity utilisation and realise further consolidated sales of ` 2,500 cr from the existing investment. We continue to be guided by the five enduring and persistent mandates articulated through the years: Achieve excellence in R&D, technology and manufacturing Pervade technology (AI and other) across all functions (Steadily) enhance people productivity; remain lean on fixed cost Conserve cash (measure performance by free cash flow) Work closely with customers to identify big ideas, but start small We are identifying and implementing multifarious initiatives on an ongoing basis. 14 Integrated Annual Report 2024-25
While one of the key objectives is to raise sales from the investment made, the other is to sow seeds for future growth through the following: Debottlenecking and expanding existing products and product groups Growing downstream and upstream products Entering related products and product groups Introducing retail products and formulations Pursuing unrelated products, product groups and businesses (in a small way) As of now, our Company is executing RoI projects of ` 243 cr and non-RoI projects of ` 206 cr (warehouse, other infrastructure, etc). Atul Foundation received ` 15 cr from our Company, its subsidiary, JV and associate entities and ` 14 cr from the Government, corporates and individuals. Commenced GMDC Atul Vidyalaya School in Kadipani, Chhotaudepur Conducted 63 eye camps, covering 19,531 patients Facilitated 28,308 people to access 20 schemes of the Government We continue to nurture the spirit of social service as our Company grows its businesses. Please visit www.atulfoundation.org to know more. Our Company has a work environment where people are valued and team members are professionally challenged to give their best. We are focusing on the following: Developing team members (for higher and wider responsibilities) Enhancing performance focus Recruiting young talent and recruiting right Strengthening leadership pipeline in higher management Upgrading and digitalising HR processes Our Company has people of diverse nationalities – American, Brazilian, Chinese, English, Nepalese and of course Indian – working cohesively and learning together. There were changes in the Board to remain in sync with the mandate from the Companies Act 2013 and Securities and Exchange Board of India: Mr Mukund Chitale, Ms Shubhalakshmi Panse and Mr Baldev Arora retired as Independent Directors (IDs) after completing 10 years each. On behalf of the Board and my colleagues, I thank Mr Chitale, Ms Panse and Mr Arora for their critical analysis, constructive approach and constant encouragement. Ms Padmaja Chunduru, former Chairperson of Indian Bank and Managing Director and CEO of National Securities and Depository joined the Board as an ID. On behalf of the Board, I welcome Ms Chunduru. We are proposing to add two more IDs with commercial and techno- commercial insights. Mr Vivek Gadre, President, Corporate Strategy, was appointed as a Whole-time Director to succeed Mr Bharathy Mohanan, Whole-time Director, who retires on May 25, 2025. In order to maintain continuity and further strengthen the management, we are also planning to induct two more Executive Directors on the Board. We have further enhanced this second integrated annual report and hope it will help you to understand how we are developing our Company. ESG action reporting Risk management reporting Existing content restructuring Our Company received ICAI award for Excellence in Financial Reporting 2023-24 (Manufacturing and Trading Sector). We are grateful to all our stakeholders: Customers – for pushing us to innovate and improve every day Employees – for making our workplace diverse and dynamic Society – for offering us an opportunity to serve Shareholders – for supporting our efforts to create value We are here to give back more than we take. Our dreams are surging bigger and better – We will work relentlessly to build capability and enhance performance as we enter 2025-26 and beyond. We will co-create our vision and strategy responsibly We will prioritise long-term value as against short-term gains We will balance financial and social returns Our purpose and Values will guide us as we continue our path into the future, convinced that chemistry is vital and is connected with almost anything. Sincerely, Sunil Siddharth Lalbhai Chairman and Managing Director There are three ways to solve a problem. First – the bad way – is when we think we solved the problem but actually we have only shifted it. Two – still the bad way – is when we think we solved the problem but actually we have deepened it. And three – the better way – is when we have not only solved the problem but also solved a class of problems. Our endeavour is to solve the problem the better way. Valsad Insititute of Medical Sciences Statutory Reports Financial Statements 15 Corporate overview Performance overview ESG overview
Earnings before interest, taxes, depreciation and amortisation Expenses as % of revenue (` in cr) Sales India Outside India Growth 2020-21 2021-22 2022-23 2023-24 2024-25 Financial trend (standalone financials) - five years Sales by geography India North America Europe Australia Africa Asia (excluding India) South America 56% 57% 9% 16% 18% 9% 12% 11% 3% 4% 1% 2023-24 2024-25 2% 2% Raw materials Selling and distribution Depreciation Employees Repairs and maintenance Power, fuel and water Others Tax (` in cr) EBITDA EBITDA % 2020-21 2021-22 2022-23 2023-24 2024-25 2023-24 2024-25 50% 53% 3% 3% 3% 3% 7% 7% 7% 7% 11% 11% 4% 4% 5% 4% 27.5% 19.3% 16.2% 16.8% 950 953 895 696 842 17.9% 46% 50% 50% 43% 44% 54% 50% 50% 57% 56% 42% 1% (14%) 16% 4,929 5,002 4,301 5,003 (10%) 3,460 16 Integrated Annual Report 2024-25
Profit after tax and dividend (` in cr) PAT 2020-21 2021-22 2022-23 2023-24 2024-25 Sources and utilisation of cash Operating cash flows Other sources (` in cr) Sources Fixed assets Direct taxes Dividend Surplus Buy back of equity share Investment in group entities Utilisation 200% 250% 325% 200% 250% 631 608 552 385 456 (` in cr) Property, plant and equipment* (` in cr) 2020-21 2021-22 2022-23 2023-24 2024-25 1,056 1,273 1,347 1,654 1,739 277 779 374 899 268 1,079 493 1,161 303 1,436 * as at March 31 Additions during the year Capital expenditure 2020-21 2021-22 2022-23 2023-24 2024-25 286 314 457 356 178 Dividend % 2023-24 2024-25 568 723 49 91 141 189 16 59 212 2023-24 2024-25 100 344 38 74 62 196 Statutory Reports Financial Statements 17 Corporate overview Performance overview ESG overview
Payment to the exchequer (` in cr) 2020-21 2021-22 2022-23 2023-24 2024-25 698 948 914 774 923 Trade receivables* 2020-21 2021-22 2022-23 2023-24 2024-25 Trade receivables to sales % NoDs * as at March 31 (` in cr) 20.6% 21.5% 17.9% 19.7% 714 1,059 894 849 1,027 69 72 60 65 68 20.5% Average capital employed1 Return on average capital employed % ¹ Excluding capital work-in-progress | Revaluation reserve Return on average capital employed (` in cr) 2020-21 2021-22 2022-23 2023-24 2024-25 29.6% 23.6% 19.2% 12.5% 13.7% 2,808 3,424 3,812 4,089 4,585 Inventories* Inventories to sales % 2020-21 2021-22 2022-23 2023-24 2024-25 * as at March 31 NoDs (` in cr) 14.8% 13.0% 13.1% 701 563 54 52 47 48 48 13.1% 511 14.2% 648 655 18 Integrated Annual Report 2024-25
Earnings per share (` per share) 2020-21 2021-22 2022-23 2023-24 2024-25 205 213 187 130 155 Earnings per share Earnings per share and book value per share Employee benefit expenses and sales per employee (` in cr) Employee benefit expenses Sales per employee 2020-21 2021-22 2022-23 2023-24 2024-25 1.16 1.62 1.57 1.34 1.49 249 276 301 321 364 Market capitalisation* 2020-21 2021-22 2022-23 2023-24 2024-25 * as at March 31 20,935 30,440 20,544 16,894 18,067 (` in cr) 2020-21 2021-22 2022-23 2023-24 2024-25 213 205 187 130 155 1,254 1,459 1,555 1,728 1,881 (` in cr) Earnings per share Book value per share Statutory Reports Financial Statements 19 Corporate overview Performance overview ESG overview
Financial trend (standalone financials)-10 years (` cr) Particulars 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Operating results Net sales 5,003 4,301 5,002 4,929 3,460 3,824 3,845 3,052 2,639 2,403 Revenue 5,208 4,492 5,261 5,083 3,616 3,983 3,947 3,186 2,891 2,652 EBITDA 842 696 895 953 950 922 768 511 512 485 Finance costs 6 2 2 3 2 2 4 9 21 26 EBTDA¹ 836 694 893 950 948 920 764 502 491 459 Depreciation 213 184 163 146 120 117 112 105 91 62 Profit from operations¹ 623 510 730 804 828 803 652 397 400 397 Exceptional | Non-recurring items - - - - - - - - - 3 PBT 623 510 730 804 828 803 652 397 400 400 Tax 167 125 178 196 197 163 223 127 115 126 PAT 456 385 552 608 631 640 429 270 285 274 Dividend (including DDT2)3 59 74 96 59 - 151 40 33 36 30 Financial position Gross block4 2,934 2,818 2,485 2,098 1,839 1,595 1,333 1,243 1,118 945 Net block4 1,830 1,871 1,702 1,446 1,295 1,139 988 989 965 883 Other assets (net) 3,716 3,229 2,893 2,943 2,416 1,931 1,662 1,209 1,111 1,011 Capital employed 5,546 5,100 4,595 4,389 3,711 3,070 2,650 2,198 2,076 1,894 Equity share capital 29 29 30 30 30 30 30 30 30 30 Other equity 5,509 5,060 4,560 4,286 3,681 3,040 2,620 2,168 1,891 1,562 Total equity 5,538 5,089 4,590 4,316 3,711 3,070 2,650 2,198 1,921 1,592 Borrowings (net) - - - 73 - - - - 155 302 Per equity share (`) Dividend5 25.00 20.00 32.50 25.00 20.00 27.50 15.00 12.00 10.00 10.00 Book value 1,881 1,728 1,555 1,459 1,254 1,035 893 741 648 537 EPS 154.98 130.41 187.05 205.34 212.78 215.82 144.51 91.16 96.18 92.53 Key indicators EBITDA % 16.84 16.17 17.89 19.33 27.46 24.11 19.97 16.74 19.40 20.18 EBTDA % 16.72 16.12 17.85 19.27 27.40 24.06 19.87 16.45 18.61 19.10 PBT % 12.46 11.85 14.59 16.31 23.93 21.00 16.96 13.01 15.16 16.52 Employee cost % 7.28 7.46 6.02 5.60 7.20 6.51 5.70 5.93 6.56 6.99 Finance costs % 0.12 0.05 0.04 0.06 0.06 0.05 0.10 0.29 0.80 1.08 Operating cash flow | total revenue % 8.20 13.88 13.91 4.27 18.71 21.40 10.06 10.21 12.80 14.13 Asset turnover ratio6 1.76 1.65 2.35 2.56 2.16 2.81 3.04 2.60 2.44 3.10 RoCE %1 13.73 12.51 19.21 23.57 29.56 33.82 32.05 22.38 25.71 30.91 RoNW %1 8.59 7.95 12.40 15.15 18.61 22.38 17.70 13.11 16.23 20.78 Payment to exchequer 923 774 914 948 698 640 627 442 307 335 Notes: 1Excluding exceptional items | 2Dividend distribution tax | 3Paid during the year | 4Including capital work-in-progress 5Proposed | Paid for the year | 6Excluding capital work-in-progress 20 Integrated Annual Report 2024-25
Financial trend (consolidated financials)-10 years (` cr) Particulars 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Operating results Net sales 5,510 4,668 5,366 5,016 3,678 4,010 3,966 3,282 2,940 2,703 Revenue 5,583 4,726 5,428 5,081 3,731 4,093 4,038 3,338 2,996 2,755 EBITDA 1,022 695 890 988 1,020 980 802 531 562 494 Finance costs 24 11 8 9 9 9 7 13 25 28 EBTDA¹ 998 684 882 979 1,011 971 794 518 537 466 Depreciation 317 243 198 177 136 130 119 110 95 66 Profit from operations¹ 681 441 684 802 875 840 675 408 441 400 Share of net profit in associate and JVs 11 10 4 8 7 5 5 4 5 4 PBT before exceptional items 692 451 688 810 882 845 680 412 446 404 Exceptional | Non-recurring items - - - - - - - - - - PBT 692 451 688 810 882 845 680 412 446 404 Tax 193 127 181 205 222 175 244 131 123 130 Net profit 499 324 507 605 660 671 436 281 323 274 Dividend (including DDT2)3 59 74 96 59 - 150 40 38 35 31 Financial position Gross block4 4,324 4,162 3,672 2,762 2,246 1,968 1,639 1,364 1,244 996 Net block4 2,947 3,049 2,779 2,034 1,648 1,475 1,273 1,120 1,083 930 Other assets (net) 2,913 2,347 1,987 2,564 2,336 1,803 1,509 1,160 1,044 967 Capital employed 5,860 5,395 4,766 4,598 3,984 3,278 2,782 2,280 2,126 1,897 Equity share capital 29 29 30 30 30 30 30 30 30 30 Other equity 5,633 5,134 4,690 4,430 3,828 3,152 2,700 2,234 1,952 1,588 Total equity 5,662 5,163 4,719 4,460 3,857 3,181 2,730 2,264 1,981 1,617 Borrowings 198 232 47 138 127 97 52 16 145 280 Per equity share (`) Dividend5 25.00 20.00 32.50 25.00 20.00 27.50 15.00 12.00 10.00 10.00 Book value 1,923 1,754 1,599 1,507 1,304 1,073 920 763 668 545 EPS 164.37 109.54 174.15 204.23 221.17 224.69 145.72 94.82 109.01 92.47 Key indicators EBITDA % 18.55 14.89 16.58 19.69 27.73 24.44 20.21 16.18 19.12 18.26 EBTDA % 18.11 14.65 16.43 19.50 27.48 24.21 20.02 15.79 18.26 17.25 PBT % 12.36 9.45 12.75 15.98 23.77 20.96 17.03 12.43 15.01 14.80 Employee cost % 8.25 8.53 6.90 6.83 8.44 7.50 6.55 6.50 6.81 7.06 Finance costs % 0.44 0.24 0.15 0.18 0.25 0.23 0.19 0.39 0.86 1.02 Operating cash flow | total revenue % 10.80 14.12 13.02 4.56 19.24 21.53 10.00 12.09 13.22 14.22 Asset turnover ratio6 1.31 1.20 2.03 2.14 1.84 2.51 2.71 2.59 2.48 3.31 RoCE %1 14.70 11.60 19.47 22.91 29.62 34.85 29.94 20.67 28.57 31.95 RoNW %1 9.22 6.56 11.04 14.54 18.75 22.70 17.46 13.25 17.97 18.17 Notes: 1Excluding exceptional items | 2Dividend distribution tax | 3Paid during the year | 4Including capital work-in-progress | 5Proposed | Paid for the year | 6Excluding capital work-in-progress Statutory Reports Financial Statements 21 Corporate overview Performance overview ESG overview
Materiality assessment serves as the foundation of the environmental, social and governance (ESG) initiatives for our Company, enabling us to identify and prioritise issues that are significant to the business and stakeholders. By engaging with diverse stakeholders across the value chain, we gain valuable insights into evolving priorities, ensuring that the ESG initiatives are relevant to and aligned with their expectations. This sharpens our understanding of material topics and strengthens the ability to deliver on identified ESG priorities and enhances the relevance and impact of the efforts taken towards those initiatives. Validating and reviewing the material topics We validated the final list of material topics in relevance to the business, based on the criticality of impact and plotted the identified topics on a materiality matrix. We have appropriately integrated the topics into the performance management system. Prioritising the material topics The identified material topics were then prioritised through collective inputs from key internal and external stakeholders. Identifying the relevant topics We collated a comprehensive list of material topics based on business requirements, stakeholder concerns and peer analysis. Materiality determination process First conducted in 2021-22, the materiality assessment helped us identify relevant ESG topics by capturing the perspective of stakeholders. We repeated the process in 2023-24 to gain fresh insights. No assessment was conducted in 2024-25. Materiality assessment Atul factory on the banks of Par river 22 Integrated Annual Report 2024-25
1 Climate change 2 Water 3 Pollutants 4 Occupational health and safety 5 Employee development 6 Customer relations 7 Logistics 8 Innovation and technology 9 Energy 10 Process and chemical safety 11 Community support 12 Corporate governance 13 Quality assurance 14 Product stewardship 15 Digitalisation 16 Marketing 17 Biodiversity 18 Diversity and inclusion 19 Compliance 20 Information security and data privacy Materiality matrix High High Importance to stakeholders Impact to the business High impact Moderate impact Low impact Low Moderate Low Moderate 17 18 19 20 15 16 14 9 11 12 10 13 6 5 3 2 1 8 7 4 Environmental Social Governance Statutory Reports Financial Statements 23 Corporate overview Performance overview ESG overview
Risk management Risk management framework Enterprise risk management (ERM) of our Company involves identifying, evaluating, prioritising, categorising, mitigating, monitoring and reporting principal risks through bottom-up and top-down approaches. The bottom-up approach engages businesses and cross-functional teams in risk identification and mitigation planning, while the top-down approach ensures comprehensive framework effectiveness and long-term risk strategising. Risks are categorised into major themes to prioritise their mitigation strategies, overseen by an ERM council of Senior Management officials and the Risk Management Committee of the Board. Enterprise risk management Aims at understanding the diverse impact of risks and the degree of influence on their causes. It involves recognising various processes, identifying the root causes and gaining a clear understanding of risk associations. Risk governance structure Board of Directors Risk Management Committee Audit Committee Enterprise Risk Management Committee Risk identification Aims at discovering crucial risks, mapping out the root causes or contributing factors. Aims at addressing vital risks to limit their impact to a manageable level (within the stated risk appetite). It requires explicit action planning, assigning responsibilities and setting milestones. Risk mitigation Aims at providing the Audit Committee and the Board with regular information on risk profile changes and mitigation strategies. Risk reporting and oversight Aims at defining risk priorities and ownership of essential risks, assessing differing impacts, considering risk appetite and existing mitigation measures. Risk evaluation and prioritisation Risk categorisation 24 Integrated Annual Report 2024-25
We recognise that risks are inherent in any business, hence rather than avoiding them, we focus on identifying, monitoring and mitigating them. Effective risk management is essential for building resilience and ensuring sustainable growth. We regularly assess risks and take proactive measures to minimise their impacts. Key risks identified that may impact the business include: 4 10 8 6 9 3 7 5 1 2 High Low Moderate Impact Low High Moderate Probability Risk mapping 1 Digitalisation risk 2 Geopolitical risk 3 Business performance risk 4 Cyber risk 5 Supply chain risk 6 Talent risk 7 Compliance risk 8 Adverse regulatory risk 9 Sustainability risk 10 Safety risk Key risks Risk categories Strategic Operational Regulatory Sustainability Reputation Statutory Reports Financial Statements 25 Corporate overview Performance overview ESG overview
Key risk Risk category Risk description Digitalisation risk Strategic Negative impacts or vulnerabilities that arise from adopting and relying on digital technologies Geopolitical risk Strategic Negative impacts on business due to international political | key events (wars, trade disputes, elections, sanctions, etc) Business performance risk Operational Inability to achieve business targets due to external and internal performance-related factors Cyber risk Operational Data loss and business disruptions caused by cyberattacks Supply chain risk Operational Disruptions in obtaining necessary resources and delivering goods or services Talent risk Operational Challenges of attracting and retaining key talent Adverse regulatory risk Regulatory Impacts on business arising from changes in laws, regulations or government policies Compliance risk Regulatory Damages from failing to adhere to industry standards, laws and regulations Sustainability risk Sustainability Failure to address the climate change-related risks, by not prioritising efforts towards lowering carbon emissions, advancing circular economy initiatives (related to water, waste and renewable resources) and conserving nature and biodiversity Safety risk Reputation Deficiency in containment of safety hazards (process, product and workplace) Risk categories and descriptions Approach to risk management: Enterprise risk management (ERM) is a core component of the business model of our Company and the framework has progressively matured over the years. It encompasses the identification, classification, assessment, prioritisation, mitigation, monitoring and reporting of key risks. We employ both bottom-up and top-down approaches to implement ERM effectively. The bottom-up approach involves the identification and regular assessment of risks by individual business units and cross-functional teams, along with the development of structured mitigation plans. A top-down approach complements this, with Senior Management ensuring the robustness of the framework, assessing the effectiveness of mitigation strategies and addressing long-term and macro-level risks. To establish clear focus areas and prioritise mitigation efforts, risks are categorised under major themes. To oversee this process, our Company has established an ERM Council comprising members of Senior Management. The ERM is overseen by the Board of Directors through the Risk Management Committee of the Board. 26 Integrated Annual Report 2024-25
Capitals Financial Human Intellectual Natural Social and relationship Manufactured Risk category: Strategic Risk category: Operational Capital linkage Geo-political risk Oversight Audit Committee Risk Management Committee Senior Management* Negative impacts on business due to international political | key events (wars, trade disputes, elections, sanctions, etc) Mitigation plans Establish volume and price contracts with customers and ensure consistent service levels are maintained Monitor import volumes and prices and adjust the sales strategy accordingly Track macro-economic indicators and industry forecasts, while maintaining a strong focus on both variable and fixed costs across all entities Opportunities Drive input cost reduction initiatives Maximise customer engagement through targeted strategies *Management Committee Digitalisation risk Oversight Risk Management Committee IT Security Council* Negative impacts or vulnerabilities that arise from adopting and relying on digital technologies Mitigation plans Enhance technology infrastructure Improve data maturity Prepare a long-term digital strategy with periodic reviews Opportunities Achieve cost optimisation and process efficiency Leverage artificial intelligence, internet of things, cloud computing and machine learning to enhance efficiency, automate workflows and support real-time data-driven decision-making Capital linkages Business performance risk Oversight Risk Management Committee Senior Management* Inability to achieve business targets due to external and internal performance-related factors Mitigation plans Establish long-term agreements with customers Focus on new customers, geographies and products Take necessary and timely trade remedy measures to counter dumping from China Capital linkage Opportunities Drive innovation to overcome external and internal challenges Improve efficiency and productivity and make the business future-ready Statutory Reports Financial Statements 27 Corporate overview Performance overview ESG overview
Talent risk Oversight Nomination and Remuneration Committee Risk Management Committee Challenges of attracting and retaining key talent Mitigation plans Accelerate career progression for high-potential team members Enrich skills through trainings and job rotations Explore avenues for cross-functional deputations and growth through internal job postings Opportunities Develop future-ready competencies Provide avenues for career growth Capital linkage Mitigation plans Develop alternate sources to reduce single source risks Enter into long-term contracts with transporters and forwarding agents Source alternate materials to reduce dependency Supply chain risk Oversight Audit Committee Risk Management Committee Disruptions in obtaining necessary resources and delivering goods or services Opportunities Boost customer satisfaction by ensuring continuity and reliability of supply chain Enhance supply chain resilience by diversifying sourcing and building agile networks to better withstand disruptions, and meet sustainability and efficiency goals Capital linkages Risk category: Operational *Management Committee Cyber risk Oversight Risk Management Committee IT Security Council* Data loss and business disruptions caused by cyberattacks Mitigation plans Conduct periodic vulnerability assessments and penetration testing for critical assets and applications Enhance governance over data security and access controls Provide regular security awareness training Opportunities Enhance trust and reputation among all stakeholders Reduce instances of business disruption Capital linkages 28 Integrated Annual Report 2024-25
Risk category: Regulatory Compliance risk Oversight Audit Committee Risk Management Committee Damages from failing to adhere to industry standards, laws and regulations Opportunities Build a reputation as an ethical and trustworthy organisation Foster a culture of continuous learning to minimise incidents Capital linkages Mitigation plans Conduct periodic compliance training Ensure timely updates and enforcement of policies and legal statues Monitor the whistleblower reporting system regularly Adverse regulatory risk Impacts on a business arising from changes in laws, regulations or government policies Oversight Audit Committee Risk Management Committee Opportunities Plan and strategise to ensure adherence to timelines and regulatory compliances Transition proactively to more sustainable regimes Capital linkages Mitigation plans Collaborate with industry bodies, particularly those that convey industry perspectives to government departments involved in policy formulation and the issuance of regulations and notifications Engage in ongoing dialogues, meetings and conversations with regulatory authorities Monitor draft notifications and proposals from both the government and industry bodies, as well as identify potential risks that may arise *Management Committee Statutory Reports Financial Statements 29 Corporate overview Performance overview ESG overview
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