Amal Ltd | Annual Report 2021-22 Letter to the shareholders Fellow shareholders, 2021-22 may forever be remembered as amongst the most uncertain fiscal because of the pandemic and later the geopolitical conflict. Nonetheless, as we write this letter, we wish to find reasons to be hopeful – our Company wiped out the remaining carried forward loss of ` 0.29 cr which at peak was ` 56 cr. Amal Speciality Chemicals Ltd (ASCL), a 100% subsidiary, will soon commission its new manufacturing facility for 300 mt per day of H2SO4 equivalent products in Ankleshwar. Financial performance in 2021-22 declined because of low demand of finished products (particularly H2SO4 and SO3) and high input prices (particularly of Sulphur) for most of 2021-22 – sales rose by 43% to ` 45 cr; EBIDTA decreased from 41% to 14%, PBT decreased by 69% to ` 3 cr and RoCE from 35% to 11%. The Directors did not recommend dividend consequent to a stipulation in the revival scheme; it is also prudent to wait till the new investment of ` 93 cr in ASCL delivers a positive impact. During 2021-22, we adjusted the product portfolio which helped in preventing further fall in contribution margin by 1.2%. During the fiscal, we also completed further debottlenecking of the capacity of SO3, Oleum 25% and H2SO4 which will help increase contribution margin. Furthermore, we added 17 teammembers who will be required to take up responsibilities in sync with the forthcoming new manufacturing facility of Amal Speciality Chemicals Ltd. Our Company along with ASCL is expected to achieve consolidated sales of ~ ` 135 cr at full capacity utilisation. The new manufacturing facility is expected to be commissioned during the second quarter of 2022-23. Our first task will be to streamline the parameters and achieve the projections. Thereafter, we will focus on a few proposals on hand to grow our Company beyond. We will execute proposals based on market attractiveness and ability to compete. So far, 2022-23 has seen the highest price of Sulphur, the key raw material, in the last 12 years. On the other hand, it has so far been difficult to pass on the entire increase. It is therefore possible that 2022-23 may see a pressure on prices of finished products such as H2SO4, Oleum, SO3 and SO2. In our view, such a situation is unsustainable andwill change for the better. Meanwhile, team Amal is taking several actions at the workplace and marketplace to enhance performance. Our Company contributed ` 26 lakhs towards fulfilling its obligation to society – it was used for improving infrastructure of five schools and providing relief to COVID-19 patients in four hospitals. The mandate is to take up projects, no matter how small, in step with national priorities. The initiatives were implemented by Atul Foundation – you may like to see the link at the end of the letter. The concept ‘serve and grow’ is robust; it makes our Company sustainable. We are grateful to our customers for giving us an opportunity to serve and grow our Company – their expectations help us improve our standards. We recognise and appreciate every member of teamAmal who is persevering to improve performance. We value the engagement, analysis, value addition and guidance of the Non-executive Directors. In order to maintain continuity, we have inducted Mr Jyotin Mehta as an Independent Director. We again reiterate our five everlasting mandates: one – drive efficiency in manufacturing and other processes, two – become financially resilient, three – boost people productivity and remain lean in fixed costs, four – pervade R&Dand information technology in every function and five – work with customers on ideas with high potential. We believe that the abovemandates will help our Company growbetter and faster as it turns yet another page in its never-ending journey. Sincerely, (Sunil Lalbhai) (Rajeev Kumar) Chairman Managing Director www.atulfoundation.org
RkJQdWJsaXNoZXIy MjA2MDI2