IFFCO Narsinhbhai Patel College of Computer Studies & Management, Kadi. 1
Oct 25, 2014
IFFCO
Narsinhbhai Patel College of Computer Studies & Management, Kadi.
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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 .
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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.
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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
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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
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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-
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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.
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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)
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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
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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.
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Chartered Accountant
N Block, Bombay Life Building
Connaught Place
New Delhi – 110 001
M/s. Arun Singh & Co.
Chartered Accountant
F-7, Lagpat Nagar-3
New Delhi – 110 024
M/s. J.C. Bhalla & Co.
Chartered Accountant
18-A, Nizamuddin West
New Delhi – 110 013
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
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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.
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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
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- 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%
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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.
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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
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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
(Previous best 36.74 lakh tonne in
2002-03)
Highest sale of NPK / DAP 23.52 lakh tonne
(Previous best 23.37 lakh tonne in
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
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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;
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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.
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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
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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:
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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
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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
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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.
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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.
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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
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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.
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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:
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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.
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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:
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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.
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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
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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.
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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.
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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
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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
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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.
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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.
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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 -
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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
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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
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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.
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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.
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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
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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
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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:
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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:
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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
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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
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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
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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:
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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.
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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)
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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
Office Office Office Office Office
Area Area Area Area Area
Office Office Office Office Office
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:
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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
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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
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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.
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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
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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.
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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.
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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
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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.
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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
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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
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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.
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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.
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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.
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4.1) INTRODUCTION
Any organization, whether it is small or large scale,
clears with financing every businessman keeps separate
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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
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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
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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
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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.
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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
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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.
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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
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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
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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.
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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
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= *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
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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
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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.
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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
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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.
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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
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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
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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:
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www.google.com
Website:
www.iffco.nic.in
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