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63rd ANNUAL REPORT 2017 - 2018 INDIAN POTASH LIMITED REGISTERED OFFICE 1ST FLOOR, SEETHAKATHI BUSINESS CENTRE, 684-690, ANNA SALAI, CHENNAI - 600 006. TELEPHONE : 044 - 28297855 FAX : 044 - 28297407 INDIAN POTASH LIMITED BOARD OF DIRECTORS SHRI. SUNDEEP KUMAR NAYAK, IAS SHRI. B.S. NAKAI DR. U.S. AWASTHI Chairman Ms. MEENAKSHI GUPTA SHRI. DEVINDER KUMAR SHRI. A.M. TIWARI, IAS AS & FA Ms. SWATI MEENA NAIK, IAS SHRI. M.V. RAO, IAS SHRI. P.C. MUNSHI Ms. REENA KAISHING SHRI. DILEEP SANGHANI SHRI. AMARJIT SINGH SAMRA SHRI. ANTONYSAMY JOHN PETER SHRI. SONY SEBASTIAN DR. P.S.GAHLAUT Managing Director 3 INDIAN POTASH LIMITED BANKERS STATE BANK OF INDIA HDFC BANK LTD BANK OF BARODA PUNJAB NATIONAL BANK IDBI BANK LTD ICICI BANK LTD CANARA BANK AXIS BANK LTD ALLAHABAD BANK INDUSIND BANK LTD DBS BANK LTD DEUTSCHE BANK AG AUDITORS Messrs. Price Waterhouse Chartered Accountants LLP 4 INDIAN POTASH LIMITED DIRECTORS’ REPORT during the year 2017-18 by 2.5% and 0.5% respectively. The Sales of all major fertilizers The Directors have pleasure in presenting increased during 2017-18 as compared to their 63rd Annual Report along with the audited the previous year 2016-17. The provisional accounts of the Company for the year ended fertiliser sales during 2017-18 increased 31st March, 2018. by app. 3.36% over 2016-17. However our GENERAL sales growth is 2.25% only. The marginal decrease in our sales growth is because of The year 2017-18 received good precipitation non-allocation of supply plan of P&K fertilizers all over the country during South-West during the months of February and March Monsoon season. The cumulative rainfall 2018 by DOF. during South-West Monsoon 2017 was 5% less than the Long Period Average (LPA). After Our Urea import volume (in DOF A/c) has experiencing good rainfall in S-W Monsoon increased from 4.64 lakh MTs in the year period, the country received deficient rainfall 2016-17 to 14.23 lakh MTs during 2017-18. during post-Monsoon period ( October – FINANCIAL RESULTS FOR THE YEAR December 2017) and very deficient rainfall 2017-18 during Winter Monsoon (January – February 2018) . During 2017-18, Indian Agricultural Your Company’s total volume sales of all sector expected growth is 2.10%. products excluding Urea on DOF account during the year 2017-18 is 5.05 million tonnes According to World Bank estimates, half of which is 2% lower than 5.13 million tonnes the Indian population would be urban by the achieved in the year 2016-17. year 2050. It is estimated that percentage of agricultural workers in total work force would The total income of the Company at drop to 25.7 per cent by 2050 from 58.2 per Rs.13,530.20 crores has shown an increase cent in 2001. Thus, there is a need to enhance of 13.2% vis-à-vis the total income of the level of farm mechanisation in the country. Rs.11,947.49 crores achieved in the previous fiscal. It is however to be noted that despite an Inspite of soaring international prices, timely increase in the total income, the Profit Before imports by Industry / Government ensured Tax has shown a decline for the year under adequate availability of all fertilisers at review at Rs.525.68 crores from the Profit reasonable prices throughout the year as before tax of Rs.571.72 crores registered in compared to 2016-17. In addition, the the previous year. The Profit After Tax (PAT) Government has implemented during 2017- at Rs.350.28 crores has also declined against 18, a slew of measures to improve agriculture Rs.367.34 crores in the same period last year. and increase farmer’s welfare, the benefits of which have just started manifesting. The decrease in profits could be attributed to the following reasons : SALES 1. Rupee remained fairly stable in first The imports of Urea and MOP has increased two quarters and strengthened towards by 219% and 2% respectively during the month of December 2017 and weakened year 2017-18. However, imports of DAP and during the last quarter of 2017-18 and Complex fertilisers have shown a decline 5 INDIAN POTASH LIMITED this trend continued till the end of the DIVIDEND fiscal year under review. Considering the current performance of your 2. Department of Fertilisers had reduced company during the year and prospects the subsidy with effect from April 2017 for 2018-19, your Directors recommend on MOP by Rs 1,845/- per MT and there to maintain a Dividend of Rs.3 per Equity has not been any change since then Share of Rs.10/- each subject to approval of and subsidy continues to remain at Rs shareholders. 7,437/- per MT till the end of the fiscal EXTENSION & PROMOTION ACTIVITIES year under review . This has impacted in CONDUCTED DURING 2017-18 per ton realisation on MOP . Because of rupee strengthening in first two quarters Our strenuous efforts have been to promote of 2017-18, MRP was revised upwards balanced fertilization and to correct the marginally by Rs 890/- per MT which did imbalance use of fertilizers to achieve the not cover full reduction of subsidy impact. NPK use of ratio to 4:2:1 and to educate the farmers to increase fertilizer use efficiency 3. The Sugar Division has shown marked and crop productivity through intensified field improvement in terms of production but oriented activities under IPL and collaborative realisable value of finished sugar product projects. and molasses has shown a decrease due to excess production of sugar in the Under IPL, in all we have laid out 189 Crops market. This has had an impact on the demonstrations, conducted 46 numbers of sugar profitability to the extent of app. Field days. We have organized 77 Sales Rs 64 crores. campaigns, 143 Farmer’s meetings, 21 Crop seminars and 51 numbers of Dealer’s 4. The Company always carefully monitors training programs. We have also participated and controls operational cost, selling in 38 Agri fair/ Exhibitions. We have done expenses and other administrative 68831 sq. ft. of Wall/Trolley paintings in rural overheads. areas. Apart from this, we have also done 5. A major contribution of Rs.329.64 during the year under review, 1954 Audio Crores which is higher by Rs.110 Crores visual programs through which we have compared to last year has come from educated farmers about balanced fertilization “Other Income”. This is mainly due to with special reference to role of potash in company’s adopting and following an crop production. We have also distributed promotional literatures like Wheat, Paddy, uniform provisioning policy of write back Mustard, Sugarcane, Groundnut, Vegetable, of liabilities for approx. Rs 189.58 crores Cotton,Chilli crop folders and literatures on beyond some years after ascertaining SOP product and Potash Product in vernacular the adequacy and the need etc. and language to the farmers during A.V. Show, marginal interest saving from judicious Farmer’s Meeting and Crop Seminars. These deployment of funds and realization of promotional measures are an integral part of various claims through arbitration / Court the Company’s initiative to reach out to farmer proceedings, suppliers, etc. community at large. 6 INDIAN POTASH LIMITED UNDER COLLABORATIVE PROJECTS: PROSPECTS FOR 2018-19 SOP From time to time, The Government of India is taking all the necessary measures for the Similarly under SOP we had laid out 6 economic reforms of the farmers by means of Demonstration, conducted 3 Field Days, doubling their farm income by 2022. organized 24 Farmer’s meeting, 7 Sales In this mission, major stone will be turned by campaigns, 3 Crop seminars, 8 Dealers good monsoon and balanced use of fertilizers Training Programme and participated in 5 Agri with timely availability in coming years. This is exhibitions. And we had undertaken 8235 sq. second consecutive year in which monsoon is ft. of Wall paintings in rural areas. expected to be normal as there is no chances of El Nino phenomenon. In the year 2018-19, ICPPP (INDO CANADIAN POTASH India will get a normal Monsoon with rainfall PROMOTION PROJECT) expected at 97% of the average precipitation This project has been phased over 3 years auguring well for agriculture and it is going to from 2015-16 and implemented in 5 states: be a very good Monsoon so far as agriculture Orissa, Haryana, Rajasthan, Gujarat, is concerned. So the time ahead may be good for fertilizer industry as well as for the farmers and Tamil Nadu during the year 2017- in terms of input sales growth and high farm 18. Under this project we had laid out 483 productivity respectively. demonstrations, conducted 57 Field days, Based on requirement of fertilisers finalized organized 109 Farmer’s meeting, 24 nos. by Department of Fertilisers, Government of Sales campaigns, 16 Crop Seminars, 13 of India, the Company expects substantial Dealers/Retailers Training Programmes and increase in demand for fertilisers during also done 132,976 sq. ft. of Wall paintings. Kharif 2018. We have spent around Rs.1.80 crores out of However implementation of schemes like Rs.2.00 crores budgeted. Direct benefit transfer (DBT), E-way Bill POTASH FOR LIFE may affect sale of fertilizers due to various operational issues. Further to resolve these This project has been phased over 5 years and issues, industry may incur extra expenses implemented in 11 states: W. Bengal, Bihar, which may result shrink in the profitability. Uttar Pradesh, Jammu & Kashmir, Madhya A subsidy cut of Rs.763/- pmt on MOP Pradesh, Maharashtra, Chhattisgarh, Andhra together with fluctuating exchange rate will Pradesh, Punjab, Telangana and Karnataka result in steep rise in the MRP of this product from October 2013 onwards with budgetary and farmers could reduce its use resulting in imbalanced use of nutrients which both outlay of Rs.6.00 crores per annum to educate Government and Industry have been trying to the farmers to correct the imbalance in use improve for better soil health and agricultural of fertilizers.

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