Iffco Project

IFFCO

Narsinhbhai Patel College of Computer Studies & Management, Kadi.

1

IFFCO

.1) INTRODUCTION OF FERTILISER INDUSTRY

The fertilizer industry in India consists of three

major players; The Government owned Public Sector

undertakings, Cooperative Societies like IFFCO, KRIBHCO and

units from Private sector. There are about 33 major producers

producing N and NP/NPK fertilizers in the country at present.

The fertilizer industry of India had made constructive use of the

fertilizer provided by the Government of India to ensure that

the country achieved reasonable self-sufficiency in food grain

production. The fertilizer industry has organized itself through

Fertiliser Association of India (FAI) to coordinate with the

Government of India to achieve the macro-economic objectives

related to agricultural sector and to provide other services .


2

IFFCO

1.2) ABOUT IFFCO

The Indian Farmers Fertiliser Co-operative

Limited (IFFCO) is one of the largest producers of fertilizer in

India. Due to large imports of fertilizer by the country before

and after independence, need was felt to make India self reliant

in the fertilizer industry. IFFCO, the government of India

extended a share of 51% of the authorized share capital. Some

loan was taken from the financial institution. The remaining

capital was raised through village level co-operative societies.

Each co-operative society has a minimum of 2 farmers, each

farmer having a minimum of 1 share of Rs.1000 each. At the

initial stage, IFFCO managed to approximate 30,598 such co-

operative societies. IFFCO was registered on 3rd November

1967 under the Bombay Co-operative Act.

The first plant of IFFCO was commissioned at Kalol in

November 1974 to produce Ammonia. Its commercial

production started on 1st March 1975 subsequently; a Urea

plant was commissioned in January 1975, which began its

commercial production on 1st April 1975. Kalol plant has a

capacity of 3,00,300 tones of ammonia and 3,96,000 tones Urea

per year.

The Kandla plant was commissioned on 26th November

1974 and the commercial production of NPK/DAP (Phase – 1,

Train A&B). Started on 4th June 1981 and its commercial

production started on 6th September 1981. Kandla plant has

capacity of 3,09,130 tones per year in terms of P205.


3

IFFCO

The ammonia plant at Phulpur started its commercial

production on 10th October 1980 and that of urea on 15th

October 1980. Phulpur plant has capacity of 2,97,000 tones of

ammonia and 4,95,000 tones urea per year.

The Aonla plant, fourth in the series, started commercial

production in July 1988. The plant based on natural gas has

capacity to produce 4,95,500 tones of ammonia and 7,20,000

tones urea per year.

IFFCO is one of the largest fertilizer manufacturing co-

operative in Asia. IFFCO’s four plant at Kalol, Kandla, Phulpur

and Aonla produced 27.36 lakh tones of fertilizer materials,

which contributed about 13% of nitrogenous and 19% of

phosphoric fertilizer, produced in the country. IFFCO is the

biggest multi co-operative society in Asia with an authorized

capital of Rs.1150 crore.

Under the single window scheme 175 service centers are

supplying all agriculture inputs like fertilizers pesticides,

agricultural implements and technical advice to the farmers.

Over 1500 societies have been developed under the IFFCO-

NCDC program on the pattern on service centers. IFFCO Board

of Directors consists of a Chairman and Vice-chairman and

other 27 directors representing Government of India, Financing

institutions, National level state co-operative marketing

federations.

The Managing Director of IFFCO is the chief executive of

institutions and all IFFCO policies, decision and rules and

regulations, regulating IFFCO business and services are the


4

IFFCO

major responsibilities with the chief executive Mr. U.S.Awasthy

is the present Managing Director of IFFCO. The Head-office of

IFFCO is at New Delhi. The functional departments at the Head

Office are as follows:

Marketing

Personnel and Administration

Marketing Accounts

Agriculture Service

Marketing Service and Post Operation

Physical Distribution / Transportation

Training and Development

Public Relation

1.3) MISSION & OBJECTIVES OF IFFCO


5

IFFCO

The mission of Indian Farmers Fertilizer Co-Operative

Limited (IFFCO) is to enable Indian Farmers to prosper through

supply of reliable, timely, high quality agricultural inputs and

services in an

Environmentally sustainable manner and undertake other

cavities to improve their welfare.

To achieve this mission, IFFCO as a co-operative society,

undertakes several activities covering a board spectrum of

areas to promote the welfare of member co-operative and

farmers. The activities so covered are defined in IFFCO’S

byelaws and the appropriate section is placed below: =>

[a] The objects of IFFCO shall be to promote the economic

interest of its members by conducting its affairs in professional,

democratic and autonomous manner though self-help and

mutual co-operation for undertaking.

[b] In furtherance of above objects, IFFCO may undertake one

or more of the following activities, which are indicative but not

limited to:

To setup plant or plants for manufacture of chemical fertilizers

and products/bye-products.

To undertake production, processing and manufacture or

insecticides, pesticides, seeds, agricultural machinery and

implements and other agricultural production requisites by

setting up or taking on lease manufacturing units either directly

or in collaboration with or as a joint venture with other co-


6

IFFCO

operative institution/public sector enterprise or any other

agency.

To setup a storage unit for storing fertilizer and other goods by

it-self or in collaboration with any other co-operative institution

or any other agency.

To maintain transport units of its own or in collaboration with

any other organization in India or abroad for movement of

goods by land and sea etc.,

To provide technical consultancy and other services to

members societies and other agencies.

To subscribes to the share of co-operative and other institution.

To act as warehousing agency under the warehousing act and

construct its own go downs or higher go down for the storage of

fertilizer and other goods.

To enter into contract and collaboration for purchases,

production, manufactures and marketing of raw materials.

1.4) IFFCO-INDIAN FARMERS SUCCESS STORY

During mid-sixties, the co-operative sector in India was

responsible for distribution of 70% of fertilizer consumed in the

country. This sector had adequate infrastructure to distribute

fertilizer but had no production facilities of its own and hence

dependent on public/private sector for supplies.


7

IFFCO

IFFCO was created on November-3-1967 as a

multiunit co-operative society engaged in production and

distribution of fertilizer. In 1993 IFFCO had drawn up a major

expansion programmed of all the four plants under over all

against of IFFCO VISSION 2000. IFFCO’S annual capacity has

been increased to 3.69 million tunes of Urea and NPK / DAP

equivalent to 825 thousand tunes of Phosphates. The

distribution of IFFCO’S fertilizer is undertaken through over

35000 co-operative societies. The entire activities of

distribution, sales, promotion are coordinated by Marketing,

Central office (MKCO) at New Delhi assisted by the marketing

offices in the field. In addition, essential agro inputs for crop

production are made available to the farmers through a chain of

167 Farmers Service Center (FSC). IFFCO obsessively nurtures

its relations with farmers and undertakes a large number of

agricultural extension activities for their benefit every year.

IFFCO, today is a leading player in India’s fertilizer industry

and is marketing substantial contribution to the efforts of Indian

Government to increase food grain production in the country.

1.5) UNIT AT A GLANCE

Name Of The Unit

Indian Farmers Fertiliser

Co-Operative Ltd. (IFFCO)


8

IFFCO

Address

IFFCO,

Kandla Unit.

Post Box No12,

Gandhidham-370201

Kandla(kuchchh), Gujarat, INDIA

Registered Office

IFFCO

34, Nehru Place,

New Delhi – 110019

Date Of Registration

On November 3 rd, 1967 As a

Multi Co – Operative Society.

Size of the Unit

Large Scale Unit

Form of the Unit

Multi Co-Operative Society

Name of the Products

Urea


9

IFFCO

Ammonia

Dry-ice

Liquid Co2

Raw Material Used (Input)

Natural Gas

Associated Gas

Naphtha

Bore well Water

Fuel Oil

Electric Power

Bankers

Indian Overseas Bank

State Bank of India

Bank Of Baroda

The Maharastra State Co-Operative Bank Ltd.

The West Bengal State Co-Operative Bank Ltd.

Madhya Pradesh State Co-Operative Bank Ltd.

The Karnataka State Co-Operative Bank Ltd.

The Punjab State Co-Operative Bank Ltd.

Punjab National Bank.

Auditors

M/s.S.P. Chopra & Co.


10

IFFCO

Chartered Accountant

N Block, Bombay Life Building

Connaught Place

New Delhi – 110 001

M/s. Arun Singh & Co.


F-7, Lagpat Nagar-3


M/s. J.C. Bhalla & Co.


18-A, Nizamuddin West


Source: Annual Report 2005-06

1.6) ORGANISATION CHART

Chairman

Managing Director

Board of Director

Production Finance H.R.M. Marketing

Manager Manager Manager Manager


11

IFFCO

Supervisor Factory Accountant Supervisor

Manager

Workers Clerk Worker

1.7) LOCATION ADVANTAGES

Location factors occupy the major portion in total

industrial development. Location facilities minimize the cost of

production and facilities the production process and product

distribution. This plant of IFFCO was set at Kandla because of

the following location advantages.

Availability Of Land.


12

IFFCO

Easy availability of water from GIDC

by 11 bore wells and fuel, Naphtha & coal

from local market.

Nearness to GEB, so they get

electricity easily.

Availability of natural gas from

O.N.G.C.

1.8) DIVERSIFICATION

Diversified into general insurance due

to

- Tremendous potential

available

- To serve the insurance

needs of farmers

- IFFCO’S rural brand

The scope includes a mix of following


13

IFFCO

- Rural insurance business

- Fire insurance business

- Marine insurance business

- Miscellaneous

Chronology of ITGI

- Move with Tokio Marine and

fire insurance Co. Ltd. signed on 8-5-2000

- ITGI got registered with

registered of companies 8-September-2000.

- FIPB approved 25%

subscription by JV partner on 15-September-2000.

- IRDA issued license No.106

dated 4-12-2000 to ITGI for marketing of products in

commercial personal and rural sectors.

- Operations have begun in

December-2000.

Partners in ITGI IFFCO-TOKIO

Joint Venture partner: Tokio Marine

and fire insurance co.op.l.

Japan

Initial equity: Rs.100

crores

IFFCO: 49%

Tokio Marine: 26%

KRIBHCO: 20%

IPL: 05%


14

IFFCO

Agricultural extension and

fertilizer use promotion programmes are on integral Part of

the marketing activity. Programmes are conducted

Area/State/Zonal offices under the guidance of agricultural

scientists programmes undertaken are:

-Balanced fertilization programmes

-Adoption of villages for all the round

Socio-economic development.

-Farmers meeting, field days and crop

seminars.

-Mobile soil testing laboratory with

audio visual aids.

1.9) ACHIEVEMENTS OF IFFCO

(Major Award Received)

Kolol: -1) Seven Awards for overall performance from FAI.

(Fertiliser Association Of India).

2) Seventeen Safety Awards.

3) Awards for technical innovation from FAI.


15

IFFCO

4) Two Rajya Bhasha Shield for promoting Hindi.

5) Two Awards from National Productivity Council.

Phulpur: - Total 15 Awards from NPC, FAI & Energy

Commission.

Aonla: - Awards for best project – Conservation of Energy.

Kandla: - Total 23 Awards from Fertiliser Association of India

and Safety Council of U.S.A.

Others: - 1) Three Awards from Best Display in FAI

Exhibition.

2) Two Awards for highly commanded Account.

3) Awards in Appreciation of Initiative in family

planning.

4) Awards for best house journal.

1.10) PERFORMANCE HIGHLIGHTS

The performance highlights of the society for the year 2003-

2004

Production of Fertilisers 57.01 lakh tonne


16

IFFCO

Production of Urea 36.01 lakh tonne

Production of NPK / DAP 21 lakh tonne

Highest sale of fertilizers 60.54 lakh tonne

(Previous best 60.11 lakh tonne in

2002-03)

Highest sale of Urea 37.02 lakh tonne


2002-03)

Highest sale of NPK / DAP 23.52 lakh tonne


2002-03)

Profit Before Tax Rs. 512.70 Crore

Profit After Tax Rs. 329.67 Crore

Turnover Rs. 5919.57 Crore

Plant Productivity Rs. 1367 tonnes/head

Marketing Productivity 3345 tonnes/head

Manpower 5977

Source: Annual Report 2003-04


17

IFFCO

1.11) IFFCO – VISION 2010

The following main objectives have

been kept in view while formulating the “ VISION 2010 “.

Attaining an annual turnover of Rs. 15,000 crore by 2010;


18

IFFCO

Installation of Ammonia and Urea plants including acquisition of

fertiliser units;

Backward integration to meet feedstock requirement such as

Phosphoric Acid etc;

Generation of Power;

Exploration / Distribution of Hydrocarbons;

Production and marketing of micro-nutrients, seeds, bio-

fertilisers, pesticides etc;

Value addition to Agri-products and marketing;

Manufacture of Petrochemicals;

Banking and Financial services;

Information Technology and IT enabled services.


19

IFFCO

2.1) INTRODUCTION OF PERSONNEL MNGT

Human resource or manpower is most valuable things of any

organization. We can define if as a lifeblood of any organization

functioning. We can utilize it properly or at maximum possible

extent to achieve organizational as well as individual goals.

Human resource or manpower is assets of any organization.

Manpower management or personnel management is related


20

IFFCO

with the function of recruitment, selection, promotion,

demotion, transfer policy, wages and salary administration,

collective bargaining, union benefits and other activities.

In the opinion of Dun and Stephen’s, “the personnel

management is the process of attracting, holding and

motivating people involving all managers- line staff.”

According to Edward Flippo, “ personnel management is the

planning, organizing, and controlling of the procurement,

development, compensation, integration, maintenance and

separation of the human resources to the end that individuals,

organizational and societal objectives are accomplished”.

Source: “Human resources & personnel management” by K

Aswathppa, published by- Tata McGraw Hill, pp 4.

2.2) OBJECTIVES OF PERSONNEL MANAGEMENT

Palph C. Davis has divided the objectives of the personnel

management into two categories.

1) Primary objectives:


21

IFFCO

1. Relate to the satisfaction of community

and social objectives.

2. Relate to the creation and distribution of

some goods and services.

3. Relate to the satisfaction of personnel

objectives of an organization.

2) Secondary objectives:

1. The continuity of the enterprise.

2. The effective utilization of people and

materials in productive work.

3. The economic need, or usefulness of the

goods and services required by the

community / society.

2.3) GRADING SYSTEM AT IFFCO - KANDLA

GRADE(OFFICER) BASIC PAY (RUPEES)TOTAL NUMBER OF INCREMENTS

Actual Increment MaximumB1 23750 600 28550 08C0 21500 500 26300 08D0 20000 500 25000 10E0 18500 450 23900 12F0 17500 400 22300 12F1 16000 100 20800 12G0 14500 350 18700 12G1 13500 350 18050 13


22

IFFCO

G2 10750 300 16750 20H0 9100 250 14600 22

GRADE(WORKER) BASIC PAY (RUPEES)TOTAL NUMBER OF INCREMENTS

Actual Increment MaximumH1 8200 220 12380 19H2 7600 210 11590 19J0 7100 175 10425 19J1 6600 150 9450 19K0 6400 130 8870 19L0 6050 110 8360 21L1 5650 100 7760 21

MO 5300 90 7190 21N0 4900 80 6580 21P0 4100 70 5570 21

2.4) RECRUITMENT & SELECTION PROCEDURE

Recruitment and selection policy is to recruit and

promote most suitable person. Suitability of candidate is to be

judge by senior officer based on his

Academic qualification

Experience in and outside IFFCO

Nature of experience

Interview performance

Suitability for the post

Potential for future development


23

IFFCO

Engagement of APP:

Except graduate engineers, other apprentices

at unit level

GET to be absorbed “G2” as assistance

engineers

Dip. In engineering/ B.Sc (PCM) – Subject to

manpower requirements to be engaged as IFFCO

trainee for one year on successful completion of

trainings, to be absorbed in “L” grade as J2 tech/J2

opts. On probation for six months. No needs to sponsor

by EE. Age relation of 3 years.

ITI – to be engaged as IFFCO trainee for a

period of trainings on successful completion trainings,

to be absorbed in “L1” grade as J2 tech/J2 opts. On

probation for six months. G2 subjects to availability of

vacancies.

Charted accountant as FMT for one year

absorbed as AAO in gr. “G2” on probation for six

months.

B.Com. / M.Com. To be included as trainees for

1 year and on successful completion of trainings to be

absorbed as accountant asstt. “L1” (B.com) “L”

(M.Com) on probation for six months. G2 subjects to

availability of vacancies.


24

IFFCO

MSW/MBA 2 year’s full time PG DIP. In PM. May

be included as trainee for one year on successful

completion of trainings may be absorbed on asstt. In

“J1” grade on probation for six month.

STRATEGIC GROUP: - PGDBM for XLRI, TISS, PG

form Delhi school of economic, Indian institutes of

managements may be included as trainee (by campus

selection) for one year. They are absorbed as H1 grade

on probation for six months in discipline e.g marketing,

finance, HR, p&a, Tpt. etc.

Direct Recruitments at Lower Management Level

P&A / finance = graduate + PG DIP from IIMs

with specialization in personnel managements /

finance may be included based on campus selection, in

G2” as asstt.officer.

Procedure for feeling the post by recruitments

Vacant position to be operated only when

becomes necessary.


25

IFFCO

MD approved shall be obtained before initialing

recruitments action.

Recruitment to various post will normally be

made for the followings source:

EE as per provision of EEC Act 1959.

By advertisements or on IFFCO’s website.

Campus selection form premier instructions.

APP/Trainee

On contract for a specified period.

By deputation from other organization.

Consideration

Data bank application by IFFCO based on job

application directly

Methods of recruitments

Post unto I grade shall necessarily be notified to

the local/central EE

Posts to H1/H2 grade shall be advertised in

local newspapers out of which one should be in

local language.

Posts in grade “G2” and above may be

advertised on all India basis either in the

newspapers or on IFFCO’s website

Employments activity to constitutes

recruitments committee as to approve the their

recommendation shall be as under:

1. For all posts in grade H1 and above --

MD


26

IFFCO

2. For all posts below H1 grade -- unit

HEAD

For H0

Mktg. Head for

Mktg. division

Due consideration to the considers, whose

agriculture land is acquired by IFFCO. Age relation of 3

years as relaxation in qualifying marks by 5% where

written examination has been prescribed.

Depends of decreased employee will be entitled

to age relaxations of 3 years and relaxation in

qualifying marks by 5% where written examination has

been prescribed.

Relaxations of 3% marks in educational

qualification.

2.5) TRAINING AND DEVELOPMENT

New employee

a. Newly joined persons

Apprentice

Transferred form other units

New recruited officers

They required making familiar with plant, culture,

instruments, rules & regulation administration, and work

environment.


27

IFFCO

b. Skill developments

It is done for the person who is directly recruited from

collage of study. So they just have bookish knowledge into

practical work training is given.

Trainings for Existing employees

They develop skill among employee for new expansion,

developments of firm, projects works, medication, change in

process etc.

Redevelopments: it mean they are job of different

departments to a persons will go for instruments plants etc. so

this is the kind of redevelopments where the person is being

put in various departments. Purpose is to make him perfects in

every kind of activities. Which makes him confident & would

increase satisfaction & the person does not get tier out his job.

Job relation: They rotate the person in their own

departments like example in personal departments person

working in welfare will be transferred to transport of industrial

relation (IR). IR will look for other departments like

administrative work. So this way they get knowledge of every

department.

1. Lectures/ seminars:


28

IFFCO

2. Motivation

3. Communication

4. Leadership qualities

5. Team buildings

6. Group behavior

7. Ethics

8. Positive work culture development

9. Meditation

10. Health, Safety

11. First Aid

12. Yoga – Pranayam

13. Stress Management

There are the areas of subjects on which they give

lectures or conduct seminars. This all things play a very vital

role in developing good culture in the organization. That will

give employees satisfaction from their job. For giving such

lectures, they bring some outside who is professor or having a

great industrial exposure. Otherwise sometimes they conduct

lectures. Any senior officer or any employee who have good

knowledge is also allowed to deliver lecture.

These all are the way in which they give training for

workers, officers supervisors etc.


29

IFFCO

2.6) PERFORMANCE APPRAISAL

It is done on yearly bases. In March & April of every year

they make performance appraisal.

It is divided in two categories.

1) H1 & above – officers: They do their appraisal

system.

2) H2 & below – workers: They do not have self-

appraisal system.

H1 & above:

In this system they have been given questionnaires,

which they have to fill up, by themselves.

For every question there are five options:


30

IFFCO

Outstanding: Extra work other than normal

job done by Employee.

Very Good: They do their work timely,

perfectly or before time.

Good: They take help of some body for

initiate then do their work.

Fair: They just do their own work. No extra

work done by them.

Poor: They do not work at all.

The system is like this

First reviewing officer check the form that is superior or

boss of the employee.

Second reviewing officer check the form.

Then it comes to personnel and administration

department.

Final appraisal is done by head officer i.e. Delhi.

H2 & below:

Their superior or supervisor they have been given

questionnaires dose appraisal.


31

IFFCO

For every question there are five options:

Outstanding: Extra work other than normal job done by

Employee.

Very Good: They do their work timely, perfectly or before

time.

Good: They take help of some body for initiate then do

their work.

Fair: They just do their own work. No extra work done by

them.

Poor: They do not work at all.

The system is like this

Appraising officers firstly dose it.

Then first reviewing officers do it.

After the second reviewing officer do it.

Finally P & A department do appraisal.

On the basis of this system the head office

decides that whom to promote and whom to suspend of what

action have to be taken. IFFCO do not have feedback system.

They never discuss about performance of employees. So the

employees do not come to know where they are lacking.

In case of workers they are given instruction

everyday. But in such a huge staff it is difficult to call each and

every employee and give them individual feedback.

On the result of the system they decide the training

needs of employee. They also decide on the basis of the

performance that who are eligible for promotion, transfer and


32

IFFCO

demotion. So from all this above we can come to know that how

is their performance appraisal.

2.7) PROMOTION

Competence to discharge the responsibility of each job

is the prime consideration for promotion to a post. The

judgment of the competence of an individual to discharge his

duties will be based on:

Academic performance

Experience in and outside IFFCO

Nature of experience

Interview performance

Quality of post performance

His suitability for the senior position

post

His potential for future development

D.P.Committee

For all posts in grade “G1” and above - MD

For all posts in grade “H1” and below - H0 – ED

(P& A)

Matg. By

mktg.

Division.


33

IFFCO

Details of employees in the zone of consideration for

promotion falling under following categories shall be specifically

brought to the notice of the members of the DPCs:

Employees who are under suspension, pending enquiry.

Disciplinary proceeding are pending or a decision has

been taken to initiate disciplinary proceedings.

Employees who are awareded punishment as a result

of enquiry.

Employees against whom vigilance case is pending and

or being contemplated.

2.8) DEMOTION / TRANSFER

In case, the employee is awarded punishment his

disability period shall be extended by the following period:

a) demotion / reduction in post/grade/pay - 2 years

b) Withholding of increments with or without cumulative

effect - 1 year

Seniority of demoted employee shall be recorded from the

original date of entry in the demoted grade not from the date of

demotion.

Employee brings outside influence in the matter

pertaining to his/her service will be debarred from consideration

from promotion for a period of one year from the date of his

eligibility.


34

IFFCO

Employee refuses to accept promotion, with the change in

the place of posting, will be debarred for promotion for 2 years.

2.9) HUMAN RESOURCE DEVELOPMENT

The society derives strength from the invaluable

contribution made by its talented and dedicated employees,

who is well accomplished to deliver in the dynamic economic

scenario for gaining competitive advantage. They emphasis on

upgrading the manpower bridging the gap in the current and

desired competency level by imparting requisite training and

development programmes including in house management

programmes including management games, group discussion,

report presentetion, role play, situational exercises and case

studies were extensively organization of the knowledge and

reinforcing the commitment of the manpower in realizing the

societies mission and vision.

During the year under report, 284 need based training

programmes were organized for executives, workmen,

employees union as well a officers association covering the

subjects on leadership styles, motivation, communicational

skills, transactional analysis, team building, problem solving,

decision making, creativity and management etc.

Continuity its efforts to the str3enghthen the compute

awareness to ensure that every employee becomes a computer

literate, 72 training programmes on computer awareness

including hands on experience on the use of software packages


35

IFFCO

namely VIKAS, FAS, IMS, HRMS, ORACLE and application like MS

OFFICE Aware organized for SMMs/ Ams/ DMs and the other

fields staff.

2.10) TRANSPORTATION

Bus & Minibuses:

Function : Shift Duty/General

Shift/school/college

(Regular/exam)/Functions/Seminar/Festival

Cars:

Allotment of cars, based on daily basis as per

requirement

Plant utilization

Emergency requirement

Functions/Festival/Seminar

School/College(Regular/Exam)

IFFCO has its own vehicles

Vehicles No of vehicles

Buses 3

Cars 5

Trucks 1

Mini Truck (Toyota) 1

Fire Jeep 1

Fire Fighters 2


36

IFFCO

All vehicles are hiring against work order procedure. It is given for

two years

Vehicles No of vehicles

Minibuses 4

Bus 7

Cars 3

Ambulance 2

Jeep 2

This transportation facility is only given to employees

of IFFCO.

Every hour marketing facility from township

(Kasturinagar) to Ahmedabad and from Ahmedabad to township

(Kasturinagar) is given Buses.


37

IFFCO

2.11) HORTICULTURE & SANITATION

IFFCO, Kandla is beautifully developed horticultural

plant that it looks like a plant inside a garden. All kinds of trees

make the air purify. The lawn approximately 55000 square

meters are maintained by electrically operated lawn cutter

machine for which electrical plug points are provided.

Automation is given importance for minimizing manpower.

In number of areas, new lawns are developed to

increase greenery and getup of plant. IFFCO, Kandla is getting

various awards for horticulture beautification. In sanitation also

IFFCO is going for automatic sweeping machine and scrubbers.


38

IFFCO

2.12) ISSUE OFLIVERIES / MISC, ITEMS

PARTICULAR FREQUENCY COST

UNIFORM/PROTECTIVE CLOTHES:

Pants

Shirts

Saries

Blouse

YEARLY

858

649

1926

231

Socks

Shoes

Whether Shoes

YEARLY

100

715

715

Stitching Charges for 3 pairs

Stitching Charges for 3 Blouses

YEARLY 825

198

Misc. Items

Ball Pen

Towel-2

Coffee Mug

Pocket Planner

H.Y

H.Y

Y

Y

Y

-

Turben Clothes for Sikh Employee YEARLY 275

Woolen Suits 3 YEARS 2875

Woolen Joursy 3 YEARS 632

Gum Boots 4 YEARS -

Tourch 4 YEARS -


39

IFFCO

2.13) LABOUR WELFARE SCHEME INPERF

IFFCO is a Multi State Cooperative Society registered under

Bombay Cooperative Societies Act (Act 7 of 1925) under Multi Unit

Cooperative Societies Act 2002. Being a Cooperative Society, the philosophy

of the organization is guided by the Cooperative principles for economic and

social betterment through self-help and mutual aid. IFFCO views its human

capital as a key source in achieving its vision of becoming the global leader in

fertilizer industry. In rapidly changing business environment it has become

even more important to create a culture of high performance across the

organization, which can be achieved only with mutual care for each other’s

requirement. Apart from paying the best salary in the fertilizer industry the

Society has taken special care in designing various needs of its human

resource. The different welfare schemes formulated by IFFCO are given herein

below. Some of them have their origin linked to different statutory provisions

whereas some of them are non-statutory in nature.

1) Medical assistance scheme

2) Housing facility

3) House building loan scheme

4) Conveyance advance scheme

5) Canteen

6) Recreation clubs

7) IFFCO cooperative stores

8) Transport facilities

9) Educational facilities

10) Leave travel concession

11) Maternity benefit

12) Cultural activities and sports meets

13) Employees Provident Fund Trust

14) IFFCO Employees Group Gratuity Trust


40

IFFCO

15) IFFCO Employees Benevolent Fund Trust

16) Employees Pension Scheme

17) Post retirement medical benefit scheme

18) Group Personal Accident Insurance Scheme

19) Group Life Insurance Scheme

1. MEDICAL ASSISTANCE SCHEME:

The society has a comprehensive medical benefit

scheme for its employees. The employee and his dependent

family members are eligible for reimbursement of medical

expenses in respect of any ailment, disease, injury, or disability

suffered by them. For routine medical treatment the ceiling is

as under:

No. of family members Ceiling for routine Medical

Treatment(per annum)

For 2 family members Rs. 2250

For 3 family members Rs. 4500

In case of chronic diseases, specialized treatments,

hospitalization, pathological and radiological tests special

medical sanctions are given at actual.

We have full fledged dispensaries at our factories

manned by doctors, nurses and paramedical staff who provide

Medicare facilities to the employees and their dependents.

Besides this, most of the good hospitals and nursing homes in

the vicinity are on the approval panel of IFFCO, where the


41

IFFCO

employees and their dependent family members can be

referred for treatment, according to requirement.

Employees and their family members are periodically

examined and the report is given to them with doctor’s

suggestions for remedial action.

In the last financial year IFFCO incurred an

expenditure of Rs. 7.63 crore on medical expenses for the

employees for the employees and their dependents.

2. HOUSING FACILITY:

Housing facility is the most important welfare measure for

industrial worker. IFFCO has been very concerned about this

issue. IFFCO has housing townships at its factories at Kalol,

Kandla, Phulpur, Aonla and Gurgaon. The number of houses

constructed by IFFCO at different places is 2805. The houses

are well designed constructed and they are provided with

modern amenities, lawns, gardens and all round greenery have

been created in the township for pollution free healthier

environment. In fact all townships have a very wooded look

given by thousands of trees that encircle them. It adds grace to

townships. Purified drinking water is provided to all townships

residents. IFFCO township at Kalol and Aonla units have

acquired ISI – 14001 certificate for their environment

management systems. Employees who are not provided with

quarters are paid House Rent Allowance to enable them to

make their own arrangements.


42

IFFCO

3. HOUSE BUILDING LOAN SCHEME:

IFFCO believes in the social and economic

empowerment of its employees. This can be possible only if the

employee has his own abode. IFFCO encourages its employees

to have their own house. With

this end in view House Building loan upto 5 lacks is given to

employees, for acquiring / construction of dwelling unit. The

loan carries simple interest on reducing balance. Simple

interest at the rate of 6% per annum for advance upto Rs.2

lacks is charged. Advance is also given for addition /

modification and renovation of the exiting house, subject to the

above limit. Most of our employees have availed of facility and

have acquired a house at a very young age.

4. CONVEYANCE ADVANCE SCHEME:

Advance are given to the confirmed employees for

purchase of Motor, Car, Motor Cycle, Scooter, Moped and

Bicycle, according to their grades. The quantum of loan for

different types of vehicles is given herein below:

a) For Moped - Rs.20,000/-

b) For Scooter - Rs.30,000/-

c) For Motor Cycle - Rs.40,000/-

d) Car - Rs.1,80,000/-

Simple interest at the rate of 5% per annum is charged

on reducing balance.


43

IFFCO

5. CANTEEN:

Canteens have been provided at our factories, which

provide lunch, tea and snacks. Canteen management

committees consisting of the employees also monitor the

menus, cleanliness, quality of food. Canteen Subsidy is paid @

7% of the basic pay to officers and @ 5% of basic pay to

workmen.

6. RECREATION CLUBES:

Recreation clubs have been provided at our factories

and at Guargon Township. It has a library, sports and games

ground, tennis, badminton courts, Gymnasium, swimming pool,

indoor games like billiard, table tennis etc. Employees and

family members are taken on picnic from time to time. Ladies

clubs have also been formed at different townships, which are

managed by the wives of the employees.

7. IFFCO COOPERATIVE STORES:

IFFCO Cooperative societies have been established

at our townships, where employees get their household goods


44

IFFCO

at fairly reasonable rates. Cooking gas is made available

through their gas agency. Demonstration of household goods

like kitchen items, fancy items, ready made garments is

organized frequently.

8. TRANSPORT FACILITIES:

IFFCO is providing bus facility to its employees for

coming to their workplace at our factories and from Gurgaon

Township to Delhi Office.

9. LEAVE TRAVEL CONCESSION:

Leave Travel Concession is provided to the

employees limited to 18/20% of their annual basic pay once

every year to enable them to incur expenses on their travel

along with their family members to any where in India.

10. MATERNITY BENEFIT:

Women employees who are covered by any law

regarding Maternity Benefit are grated the benefits as per the

provisions of such law. Those not covered by any law are also


45

IFFCO

granted maternity leave, for period, which may extend upto, 90

days ( inclusive of holidays ) without any restriction of any

duration of leave during pre-natal and post natal period.

11. CULTURAL ACTIVITIES AND SPORTS MEETS:

Inter- unit sports meets are held for overall

development of IFFCO family as a whole consisting of

employees of Kalol, Kandla, Phulpur, Aonla units Head Office

and Marketing Offices. Cultural, Social and religious actrivities

are carried out from time to time to create a congenial

atmosphere. Quiz programmers are conducted frequently for

the children of the employees. Training programmes are also

conducted for the wifes of IFFCO employees on different

matters of their interest.

12. EMPLOYEES PROVIDENT FUND:

IFFCO has obtained exemption and formed its own

Provident Fund Trust, managed by Board of Trustees. It

provides better facilities than that is available in Provident Fund

managed by the RPFC. Employees can avail loans for different

purposes without any delay. On retirement the account is

settled expeditiously. IFFCO had made a contribution of Rs.

14.21 crores towards Provident Fund and other funds during the

financial year.

13. IFFCO EMPLOYEES GROUP GRATYITY TRUST:


46

IFFCO

IFFCO has taken a policy from Life Insurance

Corporation of India, which manages the Gratuity Fund.

Employees are entitled to gratuity at the rate of 15 days wages

for each completed year of service. The maximum ceiling of

gratuity is 20 months salary. The payment is made by IFFCO

and withdrawal benefit is taken from LIC. One of the features of

this scheme so that in case of death, their nominees get the

gratuity what the employee would have got had he retired on

superannuating. IFFCO had made a contribution of 8.58 crore

towards Group Gratuity Cum Life Assurance Fund during the

financial year 2001-2002.

14.IFFCO EMPLOYEES BENEVOLENT FUND TRUST:

IFFCO employees benevolent funds scheme has

been formulated with the motive of providing monitoring

assistance to the nominees of the employees, in case of their

untimely death. The employee contributes rupees 20 per month

with matching contribution from IFFCO. In case of death of the

employee his nominee is paid a lunpsum amount of Rs. 65,000/-

and in addition a monthly pension of Rs. 1250/- per month is

paid for next 60 months to take care of their basic needs in the

time of crises.

15. FAMILY PENSION SCHEME:


47

IFFCO

IFFCO is contributing a sum equivalent to 8.33%

of employee salary subject to a maximum Rs. 541/- per month

to Regional Provident Fund Commissioner towards employees

Pension Scheme, 1995. in case of untimely death his nominees

are entitled to a family pension and in case of survival, he gets

a pension to take care of his old age needs. No contribution is

required to be made by the employees.

16. POST RETIREMENT MEDICAL BENEFIT SCHEME:

IFFCO employees contribute Rs. 20/- per month

towards the Post Retirement Medical Benefit Scheme. IFFCO

makes a matching contribution. On retirement, the ex-

employees are entitled to medical claims up to Rs. 2000/- per

annum. In addition, he is also entitled to reimbursement of

expenditure incurred on hospitalization up to an amount of Rs.

15,000/- per annum, which can be cumulated up to Rs.

1,50,000/-.

17.GROUP PERSONAL ACCIDENT INSURANCE SCHEME:

IFFCO has taken a policy from IFFCO TOKIO

General Insurance Company to cover its employees round the

click for all types of accidents during the course of employment

and otherwise also. The employees are covered for 45 times


48

IFFCO

their mean basic pay. In case of death, the compensation is

double the Capital Sum Insured. In case of temporary partial

disablement, the rate of compensation is 1% of the capital sum

insured subject to a maximum weekly compensation of Rs.

3000/-. Reimbursement of medical expenses up to a limit of

25% of the compensation is also paid. No contribution is

required to be made by the employees .

18. GROUP LIFE INSURANCE SCHEME:

IFFCO has taken a policy from Life Insurance

Corporation to provide a death cover to its employees,

equivalent to 15 months salary, subject to a maximum of Rs.

1,00,000/-.

2.14) TIME KEEPING SYSTEM

For Keeping the employees absenteeism record

and leaves record, there is separate time keeping office in

IFFCO-Kandla. The main functions of time keeping office are


49

IFFCO

To maintain record of attendance of all

employees and

Trainees.

Reporting of different kind of leaves by

time management System.

Reporting of overtime received from all

departments.

Submission of absenteeism record to account

department every month.

This keeping officer’s whole functioning is

computerized. Time officer has 11 IDCO machines in which

employees punch their card while coming and going for trainees

they maintain register.

There are four shift in IFFCO

General shift 8 am. To

5.50 pm.

A shift 6 am. To 2

pm.

A shift 2 pm. To 10

pm.

C shift 10 pm. To 6

am.

2.15) TIME OFFICE FUNCTIONS

Leave Posting:

Casual leave – 14

Earned leave – 33 fully paid


50

IFFCO

Medical leave - 20 half pay

Leave without pay

Maternity leave

Blood donation

Rites

Natural disaster

Encashment at time of retirement:

EL+ML=TOTAL

180+120=300

60% of 300 are encased

On duty Posting:

For official work only.

Time laws:

Person can not go for his personal work for more

than 2 hours. If it is increased more then 2 it will

decrease in his salary.

Leave encashment:


51

IFFCO

3.1) INTRODUCTION

Marketing has vital role in our day-to-day life. It is the

broadest field among the entire different field and it is more

practical then any other field. It cannot be seen but

automatically it place and vital role in our routine life.


52

IFFCO

Marketing is social and managerial process by which

individual and groups obtain what they need and want through

creating, offering, and freely exchanging products and services

of value with others.

“Marketing management” is the analysis, planning,

implementation and center of programmes designed to create

build and maintain beneficial exchange with target buyers for

the purpose of achieving organizational objectives.

There are five alternative concepts of Marketing.

o Production concept

o Product concept

o Selling concept

o Marketing concept

o Social concept

The major functions of marketing are

o Product decision

o Pricing decision

o Distribution decision

o Promotional decision

o Marketing research

Source: “Marketing Management” by Philip Kotler, published by- Prentice

Hall Of India Private Limited, pp 7-8.

3.2) MARKETING DIVISION CHART

Marketing Division

(Central Office – New Delhi)


53

IFFCO

Zonal Zonal Zonal Zonal Zonal

Office Office Office Office Office

(North – (North-Central (East- (West- (South -

Chandigad) Lucknow) Kolkatta) Bhopal/M.P.) Banglore)

State State State State State


Area Area Area Area Area


3.3) PROMOTIONAL ACTIVITIES

Agricultural extension programmes are an integral part

of IFFCO’S marketing activities. The field personnel under the

able guidance of Area/State/Zonal agronomists conduct various

promotional and educational programmes. Some of the

programmes undertaken are:


54

IFFCO

Programmes to promote balanced use of fertilizers.

Village adoption programme for bringing all round socio-

economic development.

Farmers training at various agricultural institutes and

research farms.

Extent ion education programmes.

Soil testing cum publicity vans.

The farmer’s education programmes of IFFCO are broadly

classified as under.

Demonstration

Field programmes

Seed multiplication

Village adoption

3.4) MARKRTING OFFICES

IFFCCO distributes its fertilizer material through

more than 33000 co-operative societies. To have an effective

co-ordination with these cooperative societies and the farmers.

IFFCO has a wide marketing network spread throughout the

country. The illustration depicts the field structure of the IFFCO.

IFFCO’S marketing activities are coordinated through five Zonal


55

IFFCO

offices. Each Zonal office oversees the activities of State

offices, which in turn coordinate the various activities of the

Area offices. Area offices conduct IFFCO’S marketing operations

in few districts through field officers. At present, about 450 field

officers undertake distribution of fertilizers and various other

promotional activities. IFFCO undertakes a large number of

these programmes to educate the farmers on latest facets of

modest agricultural practices.

3.5) PRICING POLICY

The prices of various grades of fetilisers in India are

covered under the administer pricing mechanism i.e. the prices

are regulated by the government. The work of administering the

price fund account and determining the retention price from

time to time has been entrusted to the Fertiliser Industry Co-

ordination Committee (FICC), an office attached to the

Department of Fertilizers, Ministry of Chemicals & Fertilisers. Of


56

IFFCO

late there has been a small change in this policy by which some

of the fertilizers (including NPK grade 1, 2 and DAP) has been

decontrolled and brought out an administered price mechanism.

Pricing of decontrolled fertilizers manufactured by the society

and not to the sale of other products like Malathion, Dry ice,

sale of ammonia to outside parties, etc. Imported fertilizers are

also outside the scope of pricing system.

3.6) GOVERNMENT POLICY TOWARD FERTILIZERS

First it enabled consumer policy of fertilizers to

be kept at a reasonably low level thus ensuring the incentive to

use fertilizers despite the cost of making it available tending to

be higher in a world o inflation. Second, it ensured a reasonably

attractive investment climate-keeping manufacturer in business

despite their realization being pegged at an unrealistically low

level, unrelated to cost of production also. The fact that the

price fixed for a particular unit is related to prescribed

efficiency norms in respect of capacity utilization (in ammonia

plant for instance, 90% norms was assumed) and consumption

of raw materials and utilities, ensured that the unit will be able

to earn return allowed under the system (12% post tax on net

worth) only if it achieved the prescribed standards of efficiency.

In short, the fundamentals of the RPS were so designed as to

contribute to a growing and efficient fertiliser industry on the

one hand and increasing consumption on the other.


57

IFFCO

3.7) DISTRIBUTION CHANNEL

Most producers do not sell their goods directly to the

final users. Between producers and users stand intermediaries

who work on behalf of the producer’s and users. These

intermediaries are called channel of distribution.

Marketing channels are sets interdependent

organizations involved in the process of making product

available for use or consumption.

Distribution channel of IFFCO

The fertiliser has no direct Marketing. It’s marketing is

totally done through co-operative societies. IFFCO follows the

following distribution Channels.

IFFCO Fertiliser

Sole Distributors

Gujcomasol

Dist. Co-op. purchase & sale Union Ltd. (Dist.

Wholeseller)D.P.S.O.

Taluka Co-op. purchase & sale Union Ltd.

(Taluka Agent) T.P.S.O

Village Co-operative

Gujcomasol has recognized DPSO as it district

wholesaler. They turn in turn appoint taluka agent. Societies

have to place their indent through TPSO. A charge has been

bought into effect from April 1978. so as to ensure that the link


58

IFFCO

of Co-operative. Hereby is well observed. Village Co-operative

to get their supplies from TPSO. They do not have direct

connection with DPSO. Or Gujcomasol.

The Co-operative network presently amprises 29 state

level marketing federation, 16 special commodity Co-operative

federation, 171 District level marketing Societies. 3632 general

purpose marketing societies and 3290 special commodity

societies supported by about 89000 village level Co-operative in

the Country.

In short, presently about 33% of the fertiliser supply is

to distributed through this channel.

3.8) SALES PROMOTION

Promotion: -

Promotion call for developing a good product,

pricing. It attractively and making it accessible to target

customers promotion includes Advertising, Sales Promotion,

personal selling, public relations and publicity and direct

Marketing.

Advertising: -

Advertising is one of the most common tools companies

use to direct persuasive communication to target buyer and

publics.


59

IFFCO

Advertising is any paid form of non-personnel presentation

and promotion of ideas, goods or services an identified sponsor.

For effective Advertising five ‘M’ must be known by

marketers.

Mission :-What are the advertising

objectives.

Money :-How much can be spend?

Message :-What message should be spend.

Media :-What media should be used?

Measurement :-How should the result be

evaluated.

IFFCO Kandla also advertises through different

media.

Farm magazine.

Radio & Television.

Literature.

Press, Hearing and Wall printing.

Sales Promotion: -

Sales promotion consists of a collection of incentive,

tools, mostly short term, designed to stimulate quicker and/or

greater purchase of particular products/services by consumers

to the trade.


60

IFFCO

In short, it is a variety of short-term incentives to

encourage trail or purchase of a product or service.

The difference between advertising and sales

promotion is advertising offers reason to buy while sales

promotion offers an incentive to buy.

Promotional Offers: -

As we know that the demand for fertilizer is much

more than supply of it so IFFCO need not do for sales promotion

or Advertising but even quite to aware people about IFFCO

product, they publish IFFCO news from head office namely

“IFFCO Fertiliser Marketing News”.

Other Marketing Programs: -

Block/ Crop demonstration with field day.

To promote that for higher productivity and

profitability. Balanced and efficient fertiliser

use was necessary.

To promote technology of integrated and

sustainable agriculture.

Soil Testing.

To wider the base of soil testing as a

diagnostic tool on which every farmer must rely

for what proper follow up and interaction will be


61

IFFCO

essential part of soil testing. IFFCO had 53552 soil

jamples.

.

Farmer Training Program (Crop Seminar)

To organize need based programme for the

farmers.

To prepare farmers for crop diversification and

farming system for higher profitability per unit

land.

To prepare farmer for integrated agriculture while

is sustainable and environment friendly.

Farmer Service Centers (FSCs): -

A part from selling fertiliser through a

network of more than 3400 Co-operative societies,

The society provided fertilizers and other agro-

inputs to the farmers through a network of 168,

IFFCO Farmers service Centers (FSCs) spread over

twelve states and two union fertiliser. Besides

fertiliser, these centers also provided quality

seeds, agro chemicals, implements and modern

agriculture technology to the farmers. During

1997-98, 1.34 lakhs tones of fertiliser were sold to

the farmers through the FSCs. In addition these

FSCs also sold seeds and afro-chemicals worth Rs.

7.12 crores to the farmers during the year under

report the total over of the FSCs during the year

was Rs. 101.38 crores.


62

IFFCO

IFFCO NADC Scheme:

IFFCO in collaboration with National Co-

operative Development Corporation (NCDC) has

decided to develop nearly 2500 village level

societies on the pattern of IFFCO farmer’s service

centers. Under the Scheme, NCDC provided the

loan to the co-operative societies up to maximum

Rs.30, 000/- per society through IFFCO. An amount

of Rs. 424.94/- lakh had been released to 1450

societies through IFFCO. The loan was repayable

to NCDC in 10 equal installments. IFFCO provided

furniture/fixture and agricultural equipment’s (1)

Rs 1200/- per society get surlier of IFFCO or

through the Apex cooperative Marketing

federation of the respective state and sell IFFCO

fertilizers to the farmers federation of the

respective state and sell IFFCO fertilizers to the

farmers.

Cooperative Rural Development Trust (CORDET)

The cooperative Rural Development Trust

(CORDET) Promoted by IFFCO has been providing

practical training to the farmers to improve their

skills in agriculture product ion horticulture, dairy,

poultry, and progression leadership at the village

level. The trust has two establishments, one each

at Phulpur in U.P and Kalol in GUJARAT. In addition


63

IFFCO

to imparting training, CORDET also produce

quality seeds and saplings of fruits Ornamental

and forestry plants.

The Kandla center has been conducting

special training programmer for women in farm as

well as household activities. CORDET also

extended soil-testing facility to the farmers by

testing 50678-soil sample during the year 1997-98

at against 45118 in the year 1996-97 in two soil

testing laboratories at Phulpur and Kalol.

Production of bio-fertilisers is also under taken

through a 75 tones capacity plant at Phulpur,

during the year 1997-98, 44.18 tones of bio-

fertilizers were produced. The plant is capable of

producing various staring like azotobacter,

azosoporillum, PSB etc.

Publicity:

At refers to a variety of programs

designed to promote and/or protect a company’s

image or its individual products.

With the completion of IFFCO’s three

expansion projects, the volume of production and

sales has gone up to match the changed scenario,

IFFCO has formulated a multi-pronged publicity

strategy to combat the stiff completion in the

product and services, press, Doordarshan and nill

India Radio have been extensively be plowed to


64

IFFCO

promote the corporate image as well as the

concept of balanced fertilization and efficient

fertiliser use. Out door publicity tools like wall

painting, hoarding, roadside signboards

exhibitions caring IFFCO’s message have been

extensively used at strategic locations in rural and

semi rural areas.

The Doordarshan, All India radio

and national newspaper, has given the activities

undertaken by the society. A video firm entitled

“BAAT PATE KI” in Hindi.

3.9) MARKETING RESEARCH

Company always try to get information about how

many and what kind of people are using or will use their

product. An such a situated the marketing intelligence system

will provide detailed information needed. They need former

marketing system.

Marketing research is the systematic design.

Collection analysis and reporting of data and finding reliant to a

special marketing situation facing the company.

IFFCO’s product have much more demand. So there is

no need for market but IFFCO’s all four plants are going for

expression so they have tries to analysis market research.


65

IFFCO

Marketing Research Progress

Problem Recognition

Preliminary Investigation

Data Collection

Analyse The Data

Present The Findings

Marketing Strategy

Product Oriented

Distribution Oriented

Advertising Oriented

Price Printed

Promotion Oriented

IFFCO’s 16th marketing converrence hend at lucknow

in feb 1996. the main aim was marketing strategy in libralised

environment. About 200 officeal all India agricultural

universities and other institution participated in this

conference.

Dr. J.D.Sinh, inter-national intitute made a forceful

presentation on effective marketing strategy and elaboratated

the following points.

Not just think about customer, satisfaction of your

customer.

Not just sell to Co-operatives, self through co-

operative and also build the channel countervalence

power.


66

IFFCO

Not just sales target, focus on improving the quality

of sales market force.

Not just complete on price, focus on value and

enhancement and prand equity.

Not just the bottom line, what is above bottom line is

more important.

Internal required efforts strengthen the co-operative to

market the product efficiently.

Improve the quality of bag with reference to design

painting color weight etc.

Research and development efforts to be launched

for value enrichment in IFFCO products.

Noarding and other publicity board need excellent

maintenance and presentation.

Farmers must be evaluation on co-operative

naturient cost in different fertilizers.

Good catchy namer many be proposed for IFFCO

products.


67

IFFCO

4.1) INTRODUCTION

Any organization, whether it is small or large scale,

clears with financing every businessman keeps separate


68

IFFCO

records of financial matters. Finance and account department of

the business depends upon the financial policy of the firm.

Financial management is mainly concerned with finding

out rational basis through answering following three questions.

1) What total value of funds should be invested in the

business?

2) What specific assets should the business require?

3) How should the required funds be raised?

The scope of financial management comprises traditional

approach on procurement of funds rather than its allocation and

use. While modern approach covers not only acquisition but

also allocation and utilization of funds.

The firm may have any objectives but financial

management has the objectives of profit maximization or

weather maximization. Keeping in mind this particular

objectives only major 3 decision are taken that are:

Investment Decision

Financing Decision

Dividend Policy Decision

4.2) FUNCTIONS OF F & A DEPARTMENT

o To make payment

o To receive payment


69

IFFCO

o Accounting of transactions as per

o Accounting standards published by institutive of

chartered accountant.

o Company’s significant accountancy policy

o Master chart of account

Preparation of Budget viz.,

Revenue

Consumption/ Expenditure

Budget

Procurement of Raw material,

Packaging materials, general

stores, spare parts etc. budget

o Capital Budget

Advances to employees for HBL & Conveyance advance

Budget

Submission of Management Report

Provisional Monthly Report

Inventory Report

Standard cost vs. Actual Cost Variance Report

Revenue / Capital Budget Status Report

Monthly, Quarterly, Yearly Balance Sheet, P & l account,

etc.

o To get the account audited by

Internal auditors

Statutory auditors

o To arrange fund

Daily forecast


70

IFFCO

Weekly forecast

Monthly forecast

Quarterly forecast

Yearly forecast

Various sections of F & A department and their roll of function

o Bill section

Making of Payment

Accounting of Transaction i.e.

Bill inward register

SRV register

W.O. adjustment register

CWIP register

MIC register etc.

o Stores section

Control of inventory

Booking of receipt of inventory based or SRVs

Booking of consumption based on SRVs

Physical verification as per

A, B, C, Analysis

Maintaining of PSL

Review of slow / non-moving items, identification of

obsolete items and adjustment there of as per

H.O. guidelines.

o Pay roll & Establishment section


71

IFFCO

Employees related payments like salary & wages

advance for expenses, TA / DA Medical Reimbursement,

LTC, HBL, Conveyance Achievement etc.

o Cash & Bank section

Arranging of fund as per the requirement of different

sections.

Preparation of cheque.

Writing of cashbook / bankbook / bank reorganization

etc.

o Insurance section

To renew policies from time to time.

To ledge the claim in the event of occurrences.

To purchase the claim and get the settlement.

o Books

Preparation of monthly / quarterly / yearly accounts.

Getting the audit of accounts.

Co-ordination with auditors.

Submitting of actual cost data on yearly basis.

Getting of tax audit etc.

Analysis of financial ratios and Pay back period.


72

IFFCO

o Books of accounts

a) Accounts manual

b) Significant accounting policy

c) Guideline on closing of accounts

d) General guideline

e) Power of officers

f) Master chart of accounts

g) Maintaining chart of accounts

h) Maintaining of primary books

i) Cash-books

j) Bank-books

k) Journal Books

l) Ledger

m) Financial reports

n) Trial balance

o) Bank reconciliation

p) Profit & Loss account

q) Balance sheet

r) Cost of production

s) Actual Vs. Budget/Standard cost variance report

with reason for variation.

t) Review of ratios

u) Solvency ratios

v) Profitability ratios

w) Turn over ratio (stock ratio)

x) Service ratio


73

IFFCO

4.3) FINANCIAL PLANNING

Planning is pre-requisite for managing any little things

too. When we think about fund, financial planning comes at

first. Financial planning answers the following questions: -

o What should be funds requirements?

o How should procure funds?

o From where to procure the funds?

o How to utilize the fund at maximum level?

Head office deals with the arrangement of raising the

funds and provides funds required by any of four plants.


74

IFFCO

In IFFCO, they make weekly forecast of funds in which

requirement of each department is mentioned. After that the

proposal is sent to head office and got sanction from there.

So, financial planning has a significant place for making

decision of requirement and utilization of funds.

4.4) FINANCIAL LEVERAGE

Financial leverage is related to the financing activities of

a firm. It results from the presence of fixed financial charges.

Such expenses do not very with the operating profits. They

have to be paid regardless of the amount of EBIT available to

pay them. After paying them, the EBIT belongs to the

shareholders. Financial leverage is concerned with the effect of

changes in ability of a firm to use fixed financial charges to

magnify the effect of changes in EBIT on EPS.

EBIT D.F.L =

EBT


75

IFFCO

73,690 =

69,557.31

= 1.06

Implication of DFL.

IFFCO has 1.06 D.F.L., which is very less.

IFFCO did not issue any debenture and so it has not any pay

any interest and so it has less risk and work smoothly.

4.5) BUDGETING OF IFFCO

Now a days, the increasing use of modern techniques

and procedure. Budget is most effective tool for planning and

controlling of various activities and also for effective allocation

of scare resources among alternative uses.

In brief, budget refers to the statement of plan of

activities of an organization terms for a definite future period

approved in advance by top management.

Objectives of budgeting

To ensure adequate return in capital investment


76

IFFCO

To control expenditure

To ensure availability of adequate working capital for

efficient operation of plants and for capital expenditure.

Budget period

Generally period of 12 months is treated as normal

period for the purpose of budget. In IFFCO budgeting exercise is

done for financial year April to March every year.

The following procedure is followed in IFFCO.

1). Capital budget:

Review of on going project.

List of completed items.

Review of financial sources.

Review of budgeted estimates.

List of dropped items with justification.

2). Revenue budget:

Cash budget

The monthly break as being

prepared for fund requirement for each activity of expenditure

to ensure availability of adequate capital for efficient operation

of plants.

Purchase budget

Procurement budget for raw materials,

packing material, power, fuel, water etc.

Consumption budget

Consumption of capital.

Employee remuneration and benefits.


77

IFFCO

Miscellaneous income.

Cost of production.

Fixation of sales target.

Review of human resources.

Repairs and maintenance expenditure.

3). Advances / Loans to employee budget

In order to maintain industrial relations,

create welfare activities are also considered while preparing the

budget and provision for these advances are also made

accordingly for looking to the financial resources of the

organization.

4). Budgetary control

For effective control of the budget, proper

control of expenditure is necessary and therefore every month

a comparative statement for the actual expenditure incorrect

vs. budgeted estimates is prepared.

4.6) PROFITABILITY AND DIVIDEND DISTRIBUTION

Profitability

Profitability measures the efficiency of the

business. The profitability of the firm can be measured by its

profitability ratio.

Gross Profit Gross Profit Ratio = *100

Net Sales

73,784


78

IFFCO

= *100 3,75,339

= 19.66

Net Profit Net Profit Ratio = * 100

Net Sales

25,240.42 = * 100

3,75,339

= 6.72

Dividend Distribution

How much dividend should be distributed is an

important consideration. IFFCO has paid 14.76% dividend to the

societies.

Dividend Per Share Dividend Payout Ratio =

Earning Per Share

219187.00 = = 14.76

14849.66


79

IFFCO

4.7) RATIO ANALYSIS

Ratio, broadly speaking, is the numerical relationship

between to numbers, and hence ratio analysis of statement

stands for the process of determining and presenting the

relationship of items and groups of items in the statements. The

following are the importance and uses of ratio analysis.

Importance of ratios: The ratio analysis is one of the

powerful tools of the financial analysis. It is used as a device to

analysis more clearly and decisions made from such analysis.

The use of ratio is not confined to financial manager

only. There are different parties in ratio analysis for knowing

the financial position of the firm for different purposes. The

supplier of the goods on credit, banks, financial institutions,

investors, shareholders and management make use of ratio


80

IFFCO

analysis as a tool in evaluating the financial position and

performance of a firm for granting credit, providing loans for

making investments in the firm. Thus, ratios have wide

applications and are of immense use today.

Uses of ratio analysis: The following are the management

uses of the ratio analysis:-

1). The financial statement are prepared

primarily for decision-making. But the information provided in

the financial statements are not as end in itself and no

meaningful conclusions can be drawn from these statements

alone. Hence, ratio analysis helds in making decisions from the

information provided in these financial statements.

2). Ratio analysis is of much help in financial

forecasting and planning. Planning is looking ahead and the

ratios are calculated for a number of years worth as a guide for

the future. Meaningful conclusions can be drawn for future from

these ratio. Thus, ratio analysis helps in forecasting and

planning.

3).The financial strength and weakness of a firm are communicated in

a more easy and understandable manner by the use of ratio. The financial

statement conveys the information to the one for whom it is meant. Thus,

ratios help in communication and enhance the value of financial statements.

4).The ratio even help in co-ordination, which is of atmost importance

in the effective business management. Better communication of efficiency and

weakness of a firm results in a better coordination in the firm.


81

IFFCO

5).Ratio analysis even helps in exercising effective control over the

business. Standard ratio can be based upon the Perform of financial statements

and variances or deviations, if any, can be found the actual with standards so

as to take a corrective action at the right time. The weakness or otherwise, if

any, come to the knowledge of the management which helps in effective

control of the business.

Other Uses-Ratio analysis can also be used for other purposes. They

are as follows:-

1).Utility to shareholder or inventors- An inventor in the company

will like to asses the financial position of the concerned where he is going to

invest his first interest will be the security of his investment and then return in

the form of dividend or interest.

2).Utility to creditors:- The creditors or suppliers provide short term

credit for the concerned. They are interested to know whether the financial

position of the concerned warrants their payments at a specified time or not.

The current, liquid and Acid ratio will give an idea about the firm’s liquidity

position.

3).Utility to employees:- The employees are also

interested in the financial position of the concerned, especially

profitability. Their wage increases and amount of benefits are

related to the volume of profits earned by the firm. Various

profitability ratios relating to gross profit, net profit, etc. enable

the employees to put forward their viewpoint for the increase of

wages and other benefits.

4). Utility to government:- Government is also

interested to know the overall strength of the industry. Various

financial statements published by industrial units are used to

calculate ratio for determining short term, long term and overall


82

IFFCO

financial position of the firms. Profitability indexes can also be

prepared with the help of ratios. Government may base its

future policies on the basis of the industrial information

available from various units. The ratio may be used as

indicators of overall financial strength of public as well as

private sector. In the absence of the reliable economic

information the government plans and policies may not prove

successful.

Source: “Finance Management” by Khan & Jain, Fourth Edition,

published by Tata Mc Graw-Hill Publishing Company Limited.


83

IFFCO

FINDING AND SUGGESTION

After the year 2005 Govt. cut down the subsidy and

IFFCO get 40% subsidy from the Govt. This decision

make financial problem to the IFFCO.

Low availability of Natural Gas from the ONGC and

Gail That increase the cost of production.

Make own Power Generation Plant for generating the

electricity so that dependence on GEB reduces and

also gets electricity at lower cost.

In Inventory Management, IFFCO is not calculating

the Carrying cost and any Ordering cost i.e. no any


84

IFFCO

inventory techniques is use for calculating the

optimum inventory.

In the Debtors Turnover Ratio, which is very low as

compared to standards that delay payment of the

debtors.

Compare to the other competitors some raw

materials; IFFCO is getting at high cost, like LSHS.

CONCLUSION

IFFCO is leading fertiliser production unit in

fertiliser industry. It aims to produce more and more fertiliser

and to distribute it to co-operative societies at District Taluka

and Village level. It is going on very smoothly because of its

management and employees participation. During my

Vocational Training at IFFCO – Kandla I observed some points

which comprise positive and negative aspect of the unit.

Positive Aspect of the Unit

Efficient management.

Lot of Welfare activities.

Healthy relationship between management and

union.

Strict rules and regulation.

Negative Aspect of the Unit


85

IFFCO

Possibility of accident due to Ammonia.

No existence of marketing department in the unit.

No direct marketing.

From the Vocational training, I got at this

organization was an excellent and it was superb experience for

me to undergo this training.

Bibliography

Books:

“Marketing Management” by Philip Kotler, The

millennium Edition, published by Prentice Hall India.

“Finance Management” by Khan & Jain, Fourth Edition,

published by Tata Mc Graw-Hill Publishing Company

Limited.

“Human resources & personnel management” by K

Aswathppa, published by Tata McGraw-Hill Publishing

Company Limited.

Search Engines:


86

IFFCO

www.google.com

Website:

www.iffco.nic.in


87

http://www.google.com/

http://www.iffco.nic.in/

Date post:	25-Oct-2014
Category:	Documents
Upload:	dabhiviren
View:	133 times
Download:	5 times

Iffco Project

Documents