Indian Potash Limited Unlisted Shares

Annual Report: 2023

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Year: 2023

Annual Report Summary

The 68th Annual Report for 2022-23 of Indian Potash Limited (IPL) covers the company's performance across its various divisions, including fertilizers, dairy & feeds, and sugars & bio fuels. The Annual General Meeting will be held on July 22, 2023, via video conferencing.

Board of Directors: The report identifies the Board of Directors, including Shri. Pankaj Kumar Bansal, IAS (Chairman), Dr. P.S. Gahlaut (Managing Director), and others.

Financial Performance:

Total Income: Rs. 34,010.75 crores, an 82% increase. If Urea imports on DOF account are included, it would be Rs. 42,446.72 crores.
Total Expenses: Rs. 32,987.78 crores.
Profit Before Tax (PBT): Rs. 1,022.97 crores, a 24% increase.
Profit After Tax (PAT): Rs. 751.50 crores, a 22% increase.
Volume Sales: 6.9 million tonnes (excluding Urea), a 10% increase.

Key Factors Affecting Profitability:

Agro-climatic conditions: Total rainfall was normal, but spacing was uneven.
Monsoon: South-west monsoon was sluggish, with an 8% deficit, but the southwest monsoon seasonal rainfall was normal over Northwest India (101%) and excess in central India (119%) and South peninsula (122%).
Reservoir Levels: Live storage in 146 major reservoirs was 76.058 BCM, 94% of last year and 118% of the 10-year average.
Fertilizer Imports: DAP and MOP imports reduced by 21% and 27% respectively due to increased international prices and less availability. China's suspension of DAP exports further limited supplies.
Government Subsidies: Increased NBS subsidy effective April 2022, but reduced from October 2022. Further reduction in January 2023 impacted profitability.
DAP and MOP: Import of DAP decreased by 5% and MOP by 20%.
Complex Fertilizers: Import increased by 198%.
Point of Sales: DAP sales increased by 36%, MOP decreased by 4% compared to All India Sales.
NPK Ratio: Deteriorated to 12:5:1 against an ideal 4:2:1 due to price distortions. DAP per bag at Rs. 1,350 is cheaper than complexes and MOP at Rs 1,700.
Sugar Industry: Witnessed balanced demand-supply and uptrend in prices. Company completed its export quota with reasonable profit.
Dairy Division: Revival in demand for liquid milk and milk products.

Other Key Points:

Forex Loss: Rs. 218.09 crores due to volatility.
Finance Costs: Increased by Rs. 577.63 crores due to forex costs and subsidy reimbursement delays.
Subsidy Revision: Negative impact of Rs. 700 crores due to downward revision by the Government.
Dairy and Cattle Feed: Overall improvement in performance.
Sugar Division: Profit of Rs.81.14 Crores.
Compressed Bio-gas: Supplied 16.55 Lakh KG to IOCL.
Internal Control: Systems are adequate.
Odisha Acquisition: Successfully merged Sugar, Distillery, Soya and Bio-waste at Dhenkanal from Sakthi Group.
Distillery Project: 190 KLPD Grain based distillery project at Talajaring, Odisha, expected to commence by end of October 2023.
Promotion Activities: Focused on balanced fertilization.

Extension & Promotion Activities Conducted During 2022-23:

Field Days: 109
Sales Campaigns: 98
Farmers Meetings: 228
Crop Seminars: 23
Dealer's Training Programs: 44
Agri Fair Exhibitions: 33
Wall/Trolley paintings in rural areas: 2,03,696 sq. ft.

Projects:

PFL (Potash for Life): Continued since October 2013, implemented in 13 states.
IPPP (IPL Potash Promotion Project): Started in 2021-22, implemented in 5 states.
BNPP (Balance Nutrition Promotion Project): Started in 2021-22, implemented in 5 states.

Prospects for 2023-24: El Nino conditions may impact agricultural output and rural income. Moderation in fertilizer prices will reduce the subsidy budget.

Other Statutory Information:

Share Capital: Authorized share capital is Rs. 6,120 Lakhs.
Dividend: Directors recommended a dividend of Rs. 7/- per equity share.
Board of Directors: Changes in the position of Directors noted.
Meetings: The Board met Six (6) times. The Audit Committee met Three times.
Auditors: M/s. MSKA & Associates are the Statutory Auditors. M/s. R. M. Bansal & Co have been re-appointed as Cost Auditors.
The company has constituted CSR committee.

Risk Management, Internal Control, and Other Disclosures:

Risk Management: A standardized process and system is in place.
Whistle Blower Policy: The company has a whistle blower policy
Internal financial Control Systems and Adequacy
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Significant and material orders passed by the regulators.

Auditors' Qualifications: A qualified opinion is issued due to an ongoing CBI investigation against the Managing Director. The Board has not carried out an independent investigation. The impacts are not ascertainable at this stage. The auditor qualified additional items related to the maintenance of accounts and internal controls.

The extracts of the Annual Return are available on the company's website.

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