The Phosphate Company Ltd Management Discussions.

Cautionary Statement

Some of the statements in the report may be forward looking and are stated as required by applicable laws & regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook. The Companys Performance is dependent on several external factors such as performance of monsoons, government policy, fluctuation of prices of raw material and finished products and also their availability,and not to say the least, the pandemic situation in the country, which could adversely affect the operations of the Company.

Industry review:

The year 2020-21 turned out to be a pandemic year. With a country wide lock down to begin with, the Company could start its operations only gradually and that too with a lot of restrictive conditions like poor availability of manpower, service engineers, spare parts suppliers and so on. However despite all the above restrictive conditions the Company could improve its performance over the previous year due to several factors like normal monsoons and good income with farmers saw Fertilizer Industry as one of the few Industrys to do well in the pandemic year.

Government Policy

Government is giving subsidy as per Nutrient Based Subsidy Policy on sale of all types of P & K Fertiliser. Rate of subsidy is decided by Government in advance for full financial year. Subsidy on Sale of Single Super Phosphate Fertiliser during Financial Year 2020-21 was Rs.2643/- per MT which has been increased to Rs.7513/- per MT upto October 2021for the financial year 2021-22.The share of agriculture in gross domestic product (GDP) has reached almost 20 per cent for the first time in the last 17 years, making it the sole bright spot in GDP performance during 2020-21, according to the Economic Survey 2020-2021.

The GOI could successfully implement the partial Direct Benefit Transfer system for the Fertilizer Industry. The GOI also agreed to keep the subsidy for the Ssp sector separately earmarked within the overall Phosphates and Potassium segment. This further enabled improve the liquidity in the sector.

Review of the Company

During the current year due to COVID, Companys turnover was lower at Rs.6883 lacs compared to Rs.7883 lacs in the previous year. However raw material prices were soft during the major part of the year which helped the Company achieve higher Total Comprehensive Income of Rs.242 lacs after making provisions for all expenses and tax, compared to Rs.202 lacs in previous year on Standalone basis.

Opportunities& Risks Opportunities

Agriculture is the third largest sector of Indian Economy, which contributes around 17% of total GDP of the Country. Fertilizer Industry,with the emerging scenario, plays vital role in the growth of Agriculture Sector. The balanced use of chemical fertilizer is important not only for increasing agricultural productivity but also for sustaining soil fertility. Single Super Phosphate is a multi-nutrient fertilizer containing phosphate (16%) and sulphur (11%) as primary nutrients. SSP is applied as a basal fertilizer being rich in secondary nutrients like calcium and magnesium oxide and several micro nutrients. It is an essential Fertilizer for crops likes Potato, Tobacco, Rice, Vegetables, Fruits etc.

Risk

General Risks of Operation, Environment, Human Resource etc. as applicable to every business is also applicable to us.

Internal Control Systems and their adequacy:

The Company has proper and adequate system of internal controls commensurate with its size and scale of operation to protect all its assets against loss from unauthorized use or disposition and all transactions are authorized, recorded and reported in conformity with generally accepted accounting principles. Internal Controls are also reviewed by the Internal Auditor.

Disclosure of Accounting Treatment:

The Financial Statements have been prepared as per IND-AS in conformity with the applicable accounting standards with proper explanations justifying the cause of any deviation wherever occurred. The notes to the financial statements.