During the year ended March 31, 2008 the operating revenues crossed an important milestone of Rs 1000 crores; at Rs 1014 crores they recorded a notable growth of 11% despite appreciation of Rupee by 12% which adversely impacted export sales realization. Domestic sales grew by 20% and export sales by 4%. In dollar terms, however the exports grew by 17%. Around 50% of the total sales were exports.

Other income increased from Rs 14.6 crores to Rs 27.7 crores [which included refund of Rs 7.3 crores by a coal supplier due to downward revision of prices charged in 2005 and 2006 and exchange rate gain on foreign currency loans Rs10 crores (previous year Rs 4.2 crores)].Mr. Sunil Lalbhai, Chairman & CEO, Atul, gave his comments on the performance and also the strategic initiatives being undertaken by the Company. The salient features are as follows:

1.Despite competition intensifying and exchange rate being elusive, the steady sales growth achieved by the Company in the last 5 years (CAGR 14%) reinforced a benign sense of optimism in the Company. The Company also demonstrated in the last 5 years that it had the wherewithal to counter declining margins through higher volumes given the credibility it enjoyed with its customers internationally.

2. The growth of 11% in sales achieved despite several odds on input and currency fronts are the result of the assiduous efforts made by the Company to aggressively increase its market share in certain product groups mainly in crop protection branded goods, Aromatics and Polymers businesses.

3. The period under review witnessed a steep rise in prices of many raw materials. The adverse impact of sulfur, used in high volumes by the Company alone, adversely impacted by Rs28 crores. The Company made sincere efforts to communicate to the customers the changes taking place on the input price front and could increase the selling prices of many products with the active support of the customers. This partly mitigated the impact of input price increase. The Company minimized the adverse impact on the bottom-line through higher sales and better efficiencies. Several debottlenecking initiatives and small yield improvement projects were successfully executed to improve profitability.

4. Given the exports of USD 124 million and imports of USD 42 million (net receivable of USD 82 million), the sharp appreciation of Rupee vs USD drastically affected profitability adversely to the extent of Rs41 crores. Again, this was overcome through a dedicated focus on yield improvement and volume growth. Despite the general increase in interest rates the Company managed to maintain its average interest cost.

The Chairman & CEO further stated that the major actions taken during 2007-08 and planned during 2008-09 will ensure sustainable growth in the medium term. Outlining such actions, he stated that the marketing network for branded agrochemicals goods had been substantially strengthened, new products had been developed and certain expansion of capacities had already been commissioned or were on the verge of being done so, a finishing facility had been acquired and there was a renewed focus on consumer pack adhesive business.

The Chairman & CEO ended on a positive note saying the perseverance and never-say-die attitude of its top management team and the strategic actions already taken and also planned will ensure rapid growth in sales and profitability in the forthcoming years.

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