Annual Report: 2022
Here is a comprehensive summary of the Indian Potash Limited 67th Annual Report for 2021-22:
Overview The 67th Annual General Meeting of Indian Potash Limited (IPL) will be held on September 5, 2022, via video conferencing. The company's registered office is located in Chennai. The report reflects on the year's performance across its fertilizers, dairy, feeds, and sugar & bio-fuels divisions. IPL's bankers include State Bank of India, Canara Bank, HDFC Bank, and others, with Price Waterhouse Chartered Accountants LLP as auditors.
Ordinary Business The AGM includes items for adoption of audited standalone and consolidated financial statements for the year ended March 31, 2022. Declaration of a final dividend of Rs. 6/- per equity share of Rs. 10/- each, payable to shareholders on the register as of August 19, 2022. Re-appointments of retiring directors: Dr. U.S. Awasthi, Shri Dileep Sanghani, and Shri A. Sreenivas. Appointment of M/s MSKA & Associates as Statutory Auditors from the conclusion of 67th AGM until the conclusion of the 72nd AGM, at a remuneration of Rs. 36,00,000/- annually.
Special Business Ratification of remuneration for Independent Directors - Rs. 4 Lakhs each for FY 2020-21. Ratification of appointment of Cost Auditors for the Financial Year 2022-23, M/s. R M Bansal & Co. for Sugar and Sugar Products at Rs. 25,000 per unit/factory.
Director's Report Agriculture proved resilient, growing 3.6% in 2020-21 and 3.9% in 2021-22, aided by good monsoon behavior. Rainfall was generally above normal, with regional variations. Live storage in major reservoirs was above the previous year and 10-year average. Demand for fertilizers remained positive. Sales: Phosphatic fertilizer inventory dipped due to elevated international prices and limited availability. Major MOP suppliers reduced supply due to lower sales prices in India. Prices of phosphatic and potassic fertilizers increased significantly (200%-250%). The Government of India increased subsidies to mitigate the price impact. The company lowered DAP imports but increased complex fertilizer imports. Sales performance of DAP and MOP declined, while complex fertilizer sales grew. The company was designated a State Trading Enterprise for Urea imports on Government account. It handled 29.01 Lakhs MT on Government of India account valued at Rs 18,147.94 crores. The Sugar industry showed balanced demand-supply and improved prices. Dairy division saw stable demand for liquid milk with a revival in value-added products. Volume sales de-grew approximately 19% to 6.3 million tonnes (excluding Urea on DOF). The company’s total income grew 13% to Rs. 18,715.48 crores. Profit Before Tax (PBT) grew 8% to Rs. 821.85 crores. Profit After Tax (PAT) grew 8% to Rs. 615.06 crores. Factors contributing to profitability included economical sourcing, efficient logistics, stable forex market, judicious borrowing, and timely subsidy payments. Other highlights: Rs. 23.89 crores dividend income from associate company JPMC. Overall improvement in sugar division performance. 11.91 Lakh KG of Compressed Bio-gas supplied.
Extension & Promotion Activities IPL conducted field-oriented activities and campaigns to promote balanced fertilization and achieve the ideal NPK use ratio of 4:2:1. Activities included crop demonstrations, field days, farmer meetings, crop seminars, and dealer training programs. Promotional literature was distributed. Projects like Potash for Life (PFL), IPL Potash Promotion Project (IPPP), and Balance Nutrition Promotion Project (BNPP) were implemented.
Prospects for 2022-23 Normal monsoons are expected, leading to healthy moisture levels and increased cropping area. Fertilizer prices are expected to remain high due to elevated crop and energy prices. Retail prices of P&K fertilizers may not cover landed cost despite increased subsidies. Stable outlook expected with enhanced subsidy support from Government of India. Diversification benefits from sugar division investments and the combined Bio-refinery project are expected to contribute to sales and profits. Cattle Feed / Dairy Division expects to continue profitability. The Authorized Share Capital of the Company stands at Rs. 6,120 lakhs.
Board of Directors & Committees Changes were made to the Board of Directors, including appointments of nominee directors. Three independent directors were appointed on August 10, 2021. Key Managerial Personnel are Dr. P. S. Gahlaut, Shri. R. Srinivasan and Dr. Girish Kumar. Six Board meetings were held during FY 2021-22. The Audit Committee and Nomination and Remuneration Committee (NRC) also met.
Corporate Social Responsibility (CSR) IPL has undertaken various CSR Projects / Activities with a priority to fight COVID-19 pandemic and Preventive Health Care. They contributed the unspent amount of Rs.7.98 Crores (Rs.8.00 Crores rounded) to PM CARES Fund. CSR activities are aligned with Schedule VII of the Companies Act, 2013, and focus on promoting health, sanitation, education, skill development, environmental conservation, and rural development. The CSR committee is in compliance with the Companies Act.
Auditors & Related Matters Price Waterhouse Chartered Accountants LLP were appointed as Statutory Auditors. M/s. MSKA & Associates have been appointed as the Statutory Auditors of the company for a period of 5 years commencing from the Financial Year 1st April 2022 to 31st March 2027. Rengarajan & Associates are the Secretarial Auditors. M/s. R. M. Bansal & Co re-appointed as Cost Auditors for sugar products for FY 2022-23. The Company is addressing qualifications from auditors/CBI regarding investigations. Internal controls are strong. The company has ratified related party transactions and reconstituted the Board and sub-committees in line with the Companies Act, 2013.
Risk Management & Employee Disclosure A standardized Risk Management Process is in place. Particulars of employees are available as Annexure-3. All contracts/transactions with related parties were at arm's length. A Whistle Blower Policy exists. Adequate Internal Financial Control Systems are in place. The company has placed an Anti-Sexual Harassment Policy in line with the Sexual Harassment of Women at Workplace Act, 2013.
Significant & Material Orders, Director Responsibility, and Other Disclosures No significant material orders impacting going concern status. Directors affirm responsibility regarding financial statements and internal controls. Statutory information and other disclosures are available. Disclosure under Insolvency and Bankruptcy Code is NIL. Details of Crypto Currency or Virtual Currency are NIL. The company acknowledges support from various government bodies, banks, and employees.
Financial Performance Annexures Annexure 4 details Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo. Volume Sales of all Products at 6.3 Million Tonnes, the company's turnover at Rs.18,715.48 Crores, a growth of approx 13%, Annexure 1 lists CSR activities under Schedule VII. Annexure B lists Aspects to be considered while engaging with other entities. Annexure C provides the format for the Annual Report on CSR Activities to be included in the Board's Reports [Annexure -II]. Annexure D is Form CSR 2.
Independent Auditor's Report Qualified opinion due to ongoing CBI investigation against the Managing Director and Directors/relatives. Not compliant with Sections 177(2), 178(1) and 135(1), 177(4) respectively of the Act and Rules. However, the independent auditors provided that the financials were fairly presented.
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