Annexure I
1. Industry structure and developments:
Fertilizers enhance growth of plants by supplying crucial nutrients to them. Some of
the essential nutrients required by plants are:
Straight Fertilizers: N-Nitrogen, P-Phosphorous, K-Potassium Secondary
Fertilizers: CA-Calcium, Mg-Magnesium and S-Sulphur Micronutrients- Cu-Copper,
Fe- Iron, Mn- Manganese, Zn- Zinc, B-Boron etc.
Nitrogen, phosphorus, potassium (NPK) are three major constituents of fertilizers.
Nitrogen helps in leaf growth, Phosphorous helps in development of roots, flowers, seeds
and fruits and potassium helps in strong stem growth, movement of water in plants and
promotion of flowering and fruiting.
Due to non-availability of indigenous Rock Phosphate (32%), we depend on imported Rock
Phosphate, which can be processed to give water soluble phosphatic fertilizers. Single
Super Phosphate is a cheap fertilizer and also known as common farmers fertilizer.
Single super phosphate (SSP) manufactured by carrying out reaction of rock
phosphate with Sulphuric acid for converting non-soluble phosphate (present in rock
phosphate) into water soluble phosphate which is called single super phosphate. It
contains 14.5-16% water soluble phosphorous, 10-11% Sulphur, and 18-21% Calcium. Straight
Phosphatic 16% P205 Grade Company was started its manufacturing unit of single
super phosphate (powder plant) in 1992 with a capacity of 66000 MT per annum while single
super phosphate (Granulated plant) in 1993 with a capacity of 45000 MT per annum and
Sulphuric Acid in 1993 with a capacity of 33000 MT per annum which is used for the
production of SSP, in Village Devk^iya, block Sardar Nagar, Tehsil Chauri Chaura,
Gorakhpur, Uttar Pradesh.
At present Company has its own Brand name "PASHUPATI".
2. Opportunities and Threats:
Since agriculture sector has its own importance in Indian economy, it is bound to grow
and our product SSP has also its own importance in Agriculture sector. Govt, of India has
emphasized to promote SSP to fulfill the demand of phosphatic fertilizers and also
fertilizers Association of India has organizing farmers meeting in all states of India to
promote SSP and convinced to farmers for use of SSP instead of DAP or other phosphatic
fertilizers.
3. Segment-wise or product-wise performance:
Single Super phosphate: Company is producing single super phosphate in two
categories one is powder and second is granule. Company is able to achieve production of
26098.48 MT of Green SSP during the year 2022-23 against the targeted production of 46000
MT which is 56.74% of the targeted production and 39.54% of the installed capacity of
66000 MT. Company has dispatched 28908 MT during the year. Quantum wise production of SSP
has decreased during the year because of hike in the prices of imported Rock Phosphate and
poor availability. Dispatches of SSP is also decreases during the year due to severe
drought in KHARIF Season which badly affected dispatches and consumption of SSP at
farmers level.
Sulphuric Acid: Company has produced the Sulphuric acid for the captive
consumptions and excess quantity of Acid sold by Company. Company was able to achieve the
production of 30417.10MT of the Sulphuric acid during the year 2022-23 against the
installed capacity of 33000 MT which is 92.17% of the installed capacity. The captive
consumption of the Sulphuric Acid for production of SSP is 8367.47 MT and the sale of
Sulphuric Acid was 25904.26 MT including trading also. Quantum wise production of
Sulphuric acid has increased during the year.
4. Outlook;
Agriculture has been playing a vital role in Indian economy with its contribution to
GDP. Around 49% of Indian population is still dependent on agriculture and its allied
activities for their livelihood. The growth rate in agriculture has been fluctuating and
these uncertainties/ fluctuations in growth rate can be attributed to over dependence on
rains (around 60% of agriculture is still rainfall dependent). One of the vital industries
in Indian economy is the fertilizer industry which serves as a very crucial raw material
for agriculture. Fertilizer, alone accounts for large subsidy, the second highest after
food. Owing to poor monsoons in last two years and low commodity prices, there was a
slowdown in the fertilizer sector.
5. Risks and concerns;
(a) Government Policy:
This sector was operated in a highly regulated environment with cost of production and
selling prices being regulated by the Government of India. Due to this reason, fertilizer
industry suffered from low profitability as compared to other sectors. Govt, imposed
several regulations on prices, subsidies, import etc.
There have been changes in regulations, subsidy structure from time to time creating
confusion and uncertainty among producers. In past years, govt, has decontrolled DAP, MOP,
complex fertilizers and SSP which will stimulate growth of this industry and thereby
ensure adequate supply of essential fertilizers to farmers.
Subsidy for P&K fertilizers is fixed and does not vary with market prices. Govt,
does not regulate import of DAP and MOP as it does for Urea. Govt, has decontrolled prices
of P&K fertilizers, MRP is left open to manufactures to decide and so domestic prices
are decided by demand and supply. P&K fertilizers are less regulated compared to Urea,
therefore P&K fertilizer producers can optimize operation, improve supply chain and
product mix to earn better profits.
Considering all the issues relating to agriculture productivity, balanced
fertilization, growth of indigenous fertilizer industry, competiveness amongst the
fertilizer companies and to overcome the deficiency of concession scheme, the Government
introduced Nutrient Based Subsidy (NBS) Policy for P&K fertilizers with
effective from 1.4.2010.
Under the NBS Policy, a fixed rate of subsidy (in Rs. per Kg basis) is announced on
nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) by the Government
on annual basis which is decided based on international prices, exchange rates, inventory
and prevailing MRP etc.
The Govt, of India has opened the MRP of SSP from 01/04/2011 and manufacturers are free
to decide their rates upto a fixed limit.
(b) Development In Government Policy:
Investment required for setting up a SSP unit is modest compared to Nitrogenous
fertilizers. The setup with indigenous technology depends on imported material because of
non-availability of good quality of rock phosphate exceptfrom Rajasthan State Mines &
Minerals Limited, a State Govt. Undertaking. The demand of fertilizers is likely to
increase with the emphasis by the Govt, on augmenting agriculture produce. The Govt, of
India has notified that Imported Rock Phosphate from some countries for use in production
of SSP for competitive Production cost.
(c) Availability of Raw Material:
Rock Phosphate is imported from various country by different dealers.There is problem
in availability and hike of Prices of Raw Material
(d) Subsidy on SSP:
The Govt, of India has introduced nutrient based subsidy policy for all types of
fertilizers including SSP. The Govt, of India has flexible subsidy for whole year and for
the reporting year subsidy was Rs. 7513/MT which continuous from the year 2021-22. There
is no increase of subsidy in SSP whether costing is very high.
6. Internal control systems and their adequacy:
In any industry, the processes and internal control systems play a critical role in the
health of the Company. The Companys well defined organizational structure, documented
policy guidelines, defined authority matrix and internal controls ensure efficiency of
operations, compliance with internal policies and applicable laws and regulations as well
as protection of resources. Moreover, the Company continuously upgrades these systems in
line with the best available practices. The internal control system is supplemented by
extensive internal audits, regular reviews by the management and standard policies and
guidelines to ensure reliability of financial and all other records to prepare financial
statements and other data.
7. Discussion on financial performance with respect to operational performance;
The highlights of the companys performance for the year ended March 31, 2023 are as
under:
Revenue from operation increased by 9.52% to Rs. 8059.74 Lakhs.
PBDIT decreased by 12.70% to Rs.388.10 Lakhs.
Profit before tax decreased by 27.26% to Rs.223.44 Lakhs.
Net profit decreased by 30% to Rs. 161.11 Lakhs.
8. Material developments in Human Resources / Industrial Relations front, including
number of people employed:
Asian Fertilizers Limited is a knowledge-driven organization focused on judicious
people recruitment and retention. The Companys HR function focuses on employee training,
values inculcation and enhanced functional expertise. The Companys key HR objective is to
ensure that employees are aware of expected roles leading to organizational momentum. The
top management conducted several discussions with employees to discuss multiple issues
including leadership qualities, values, responsibilities, workplace freedom and empowered
decision-making. Going ahead, the Company will continue to invest in people to strengthen
its production processes, product quality and service delivery. During the year under
report, the Company also focused on the automation of key HR processes for employee
benefit. The result of these initiatives was that the Company was able to keep its
attrition levels well under control, much below the industry average. The companys head
count stood at 31 as on 31st March 2023.
|
For and on behalf of the Board of Directors of |
|
| Place: Gorakhpur |
Asian Fertilizers Limited |
Asian Fertilizers Limited |
| Date: 26/05/2023 |
Sd/- |
Sd/- |
|
Ashok Kumar Matanhelia |
Somil Matanhelia |
|
Managing Director |
Whole Time Director |
|
DIN:01763776 |
DIN : 01738413 |
|
789, Ajay Khand, |
789, Ajay Khand, |
|
Patrakar Puram, |
Patrakar Puram, |
|
Rapti Nagar, |
Rapti Nagar, |
|
Gorakhpur |
Gorakhpur |
+91-9892691696
