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PROJECT REPORT ON “TRANSPORT MANAGEMENT” OF IFFCO AONLA”

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF THE AWARD OF THE DEGREE OF BECHLOR OF BUSINESS ADMINISTRATION

SUBMITTED BY:

SAURABH TYAGI

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Expression of sincere gratitude is just a partial acknowledgment. The accomplishment “TRANSPORT MANAGEMENT” I would have not been of this project vocabulary falls short of word to express my sincere gratitude to Mr. D R Kundra possible (Deputy GM, Finance) and Mr. Rajan Kumar Keshri (Sr. Accounts Officer) under whose guidance opportunity to carry out the present I had the work. very thankful I am Mr. D. Chief Manager (Training ) & K.K. to Kalia, Mr. Pandey,Dy. Manger (Training) who supported me & helped me throughout the project. I am also thankful to Mr. Yogish Kumar Pundir and Mr. A.K. Mishra, who provided me with relevant information and spared their precious time with me. I am thankful to Finance & Account staff & to all the employees of IFFCO who cooperated with me during my training period. I OWE A DEEP SENSE OF GRATITUDE TO ALL THE RESPONDENTS WHO GAVE ME VALUABLE INFORMATION FOR THE . PROJECT

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42 YEARS OF COOPERATING GLORY
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LIST OF CONTENTS 1) Introduction to topic 2) Objective of study 3) Research 8 4) Introduction about IFFCO 17 5) Objective of the 18 6) Management 21 7) Aim. 6 7 9company 1922Approach Principles Emblem highlights Associates 313339444754-55 Dispatch 63- 4 . 25 10) IFFCO’s 26 11) Organization chart of IFFCO 27 12) All India share of IFFCO 28 13) Performance 29 14) IFFCO 30 15) Awards galore 32 16) Aonla unit 38 17) Finance and accounts department 43 18) Inventory management 46 19) Various sections of inventory 52 20) Imported material 53 21) Material coding 22) Packing & 56 23) Document for dispatch of goods. 66 5962 Methodology Page No. Vision. 57-58 24) Accounting of raw material 61 25) Store section 26) Verification of Inventories. 24 9) Commitment. Mission 23 8) Vision 2010.

27) Techniques of Inventory control 70 28) Criteria for judging the Inventory system 72 29) Inventory software 73 30) Data Entry menu 75 31) Reports Menu 82 32) Production department 33) Different vouchers 96 34) Rejection/Discreption Report 98 35) Tender 99 36) Performance bank guarantee 101 37) Material purchase 102 38) Store adjustment 103 39) SWOT Analysis & Strategies 107 40) Conclusions & Recommendations 109 41) Bibliography 110 6771747683-86 8797enquiry 100Requitions voucher 104108- 5 .

If the water is let in too fast. By proper planning it is possible for a company to reduce its levels of inventories to a considerable degree. etc. without any adverse effect on production and sales. the tub is soon empty. by using simply inventory planning and control technique. An efficient system of inventory management will determine 1) What to purchase 2) How much to purchase 3) From where to purchase 4) Where to store. The investment in inventory is very high in most of the undertakings engaged in manufacturing. storing and accounting should form a part of inventory management. 6 . The reduction in excessive inventories carries a favorable impact on company’s profitability. It is necessary for every management to give proper attention to inventory management. A proper planning of purchasing. The amount of investment is sometimes more in inventory than in other assets.INTRODUCTION TO THE TOPIC INVENTORY MANAGEMENT “Managing the level of inventory is like maintaining the level of water in a bath tub with an open drain. About 90 percent part of working capital is invested in inventories. the tub overflows.” The dictionary meaning of inventory is ‘stock of goods’. If water is let in too slowly. The water is flowing out continuously. handling.

“Effective inventory management enables an organization to meet or exceed customers’ expectations of product availability while maximizing net profits or minimizing costs” 7 .

4) To analyze the financial position of the company. 5) To give suggestion if any. Apart from our main objective. our other objectives are: 1) To analyze the level of investment in inventory by IFFCO. Therefore effective management is necessary to minimize the cost and ultimately increases profitability of an organization. of 8 . to ensure smooth and uninterrupted supply without making unnecessary investment of funds in inventory.OBJECTIVE OF STUDY “The main aim of study is to check the efficiency and effectiveness inventory management system at IFFCO Aonla.” Investment in inventory incurs a high cost. regarding effective inventory management. 2) To study the inventory policy of the company. 3) To analyze the policy adopted by the company.

(3) Data collection – The study is conducted through collection of data through surveys. (2) Extensive literature – Many published studies. C. cost of material consumed. It is a matter of great importance for inventory department. (4) Analysis and – The data about inventory is analysed to find out interpretation the effectiveness and efficiency of inventory policy. Sample of material was obtained randomly. ABC analysis was used where sample of material was graded under three categories: A. Basically research is the objective and systematic method of finding solution to a problem.RESEARCH METHODOLOGY Research covers the search for retrieval of information for a specific purpose. Material is important for the efficiency of the system. Inventory department of IFFCO. B. interviews with officials etc. As regards the financial performance. Thus the whole study is conducted under the guidance of officers of this department. Books of accounts of Aonla –I and Aonla – II are studied thoroughly to details about inventory stock. books or material on survey effective control of inventory were referred to for getting a true direction to research process. Aonla to control the inventory is basically studied through analytical research. how effective problem are the measures applied by Iffco. Personal interviews were conducted where a set of preconceived questions were asked from the officers of inventory department regarding material control policies adopted by them. Aonla is responsible for efficient inventory control. the data about different financial indicators is analysed to calculate the different ratios and to draw the graphs. The steps followed to conduct this study are as follows:(1) Formulating research – The problem under study viz. increase and decrease in stock in the last few years etc. 9 .

a new cooperative society was conceived to specifically cater to the requirements of farmers. On the enactment of the Multi state Cooperative Societies Act 1984 which was amended in 2002. It was a unique venture in which the farmers of the country through their own co-operative societies created this new institution to safeguard their Indian Farmers Fertiliser Cooperative limited. 10 . IFFCO’s growth reflects its belief in the strength of the farmer. The byelaws of the Society provide a broad framework for the activities of IFFCO as a Cooperative Society. The initial equity capital of Rs. This is an organisation that believes in fair play and has always followed transparent and professional practices in corporate governance.426 crore. a multiinterests.sixties the co-operative sector in India was responsible for distribution of 70 per cent of fertilisers consumed in the country. A pioneer in this field. state Cooperative has emerged as a role model for cooperatives Over 42 years of its inception. This sector had adequate infrastructure to distribute fertilisers but had no production facilities of its own and hence dependent on public/private sectors for supplies. Thus was born IFFCO. Indian Farmers Fertiliser Co-operative Limited (IFFCO) was registered on November 3. IFFCO has turned into a true Cooperative – Of the Farmers. 2008.6 lakh contributed by the cooperatives in 1967-68 has also gone upto a paidup capital of Rs. Several prestigious awards stand testimony to the fact that IFFCO is driven by its values and the dedication of its people. The Society is primarily engaged in production and distribution of fertilisers. IFFCO has steadily grown in strength and stature from a modest membership of 57 societies in 1967-68 to 39564 societies as on 31 st March. the Society is deemed to be registered as a Multi state Cooperative Society. the world’s largest fertiliser cooperative. By the Farmers and For the Farmers. To overcome this lacuna and to bridge the demand-supply gap in the country.INTRODUCTION ABOUT IFFCO During mid. 1967 as a Multi-unit Co-operative Society.

This was a historic moment.47 lakh tonne of fertiliser material comprising 39. for it was the first private sector unit to be acquired by any Indian cooperative. .PRODUCTION The largest producer of fertilisers in the country. As part of the new vision and in order to augment its complex fertilizer manufacturing capacity.urea unit at Aonla was commissioned in 1988. 410 crore 11 .63 lakh tonne of urea and 28. IFFCO’s market share in ‘N’ production is 20 percent and 25 percent in 2 O5 produced in P the country. The Paradeep unit was expected to achieve an optimal production load during 2008-09. These are considered to be among the best professionally managed fertiliser plants in the world. IFFCO has five state-of-theart plants that ensure its special position. Another ammonia . The ammonia . Orissa in September 2005. IFFCO acquired DAP/NPK/NP plant in Paradeep. During 2007-08. These plants commenced commercial production in the year 1974-75. IFFCO has initiated energy saving schemes in all its five ammonia plants at a cost of Rs. IFFCO had set up the KALOL plant for manufacture of Nitrogenous Fertiliser and KANDLA plant for manufacture of Phosphoric fertiliser.84 lakh tonne of NPK/DAP/NP which bears ample testimony to its superlative performance.urea complex was set up at Phulpur in the state of Uttar Pradesh in 1981. IFFCO’s plants rolled out 68.

Best ever marketing productivity also sprang to 6158 tonne/head.24 lakh tonne of fertiliser material comprising of 54. These Centres also organize promotional programmes such as soil test campaigns and farmers’ meetings. With the completion of Kalol Expansion Project. This year. These impressive figures have been made possible largely because of the fact that IFFCO distributes its products through cooperative channels.000 cooperative societies and 158 Farmers Service Centres spread across 29 states and union territories in India make sure that IFFCO’s productsNPK/NP/DAP/UREA-are easily available to farmers. the organisation hired storage space at more than 1. thereby attaining the distinction of world leader in fertilizer production. IFFCO is all set to realize the objective of producing 100 lakh tonne of fertilizers. IFFCO’s Farmers Service Centres not only supply material under one roof.MARKETING DISTRIBUTION AND A strong marketing team and a sound distribution network make the bottom line secure. During 2007-08. Around 40.29 lakh tonnes of urea and 38.3% as against 86. the goal is to reach out to each district. IFFCO has dispatched around 86 lakh tonne of fertilizer material from its plants and ports by rail and road. 12 . Every fourth bag of fertilizer produced and every third bag of fertilizer sold in the country belongs to IFFCO. With the aim of delivering to the doorstep of the farmer in all parts of the country.95 lakh tonne of NPK/DAP/NP witnessing a growth of 8. resulting in the highest-ever sales of fertilizer material this year. Backed by this belief.10 lakh tonnes in the previous year. . IFFCO has notched up a record sale of 93. taluka and village and hence sell more. Though the cooperative structure may differ from state to state. they are used as contact points for providing technical know-how to farmers.700 locations. IFFCO has gone all out to extend its reach.

creating an environment that attracts the best talent. Employees were sponsored for participation I prestigious both in India and abroad. A new VPN was created to provide round-the-clock connectivity in the plants. HUMAN RESOURCE – PUTTING PEOPLE FIRST No vision. Its achievements and its contributions to the farming community are highlighted in various exhibitions and fairs. we see teamwork at its best. Other initiatives to help the growth of its people included workshops on human values.380. Hence.12163 crore during 2007-08 while its pre tax profit stood at Rs. The society declared a dividend of 20% for its shareholders for seventh successive year. successfully showcased its image in India and overseas. zonal office and head office. IFFCO has. leadership and work ethics.257. IFFCO has augmented its workflow applications. over the years. however grand.59 crore. can be fulfilled without the cooperation of its people. 13 . Recognizing this fact. enhancing skills is of great significance for the organisation. The Corporate Data Centre in New Delhi has been refurbished with the latest technology. At IFFCO. a dream that is understood in IFFCO’s Vision 2010.FINANCIAL PERFORMANCE The society recorded an all time high turnover of Rs. Employees at all levels share a common dream. There were also many technical activities that led to development and skill upgradation.52 crore and profit after tax at Rs. With the firm belief that Information and Communication Technology (ICT) helps the people and the organisation to grow together. IFFCO has made a sustained investment in its people.

there is little wonder. received honorary Doctorate of Science degree from Dr Balram Jakhar. Further. CII and Government of India. Energy Conservation and Efficient Water Management to Phulpur Plant. With this. and SUN and NDTV Green IT Award to Kandla Plant. Paradeep has achieved greater laurels by producing more than 13 lakh MT of NP/DAP despite shortage of raw material. U.S. Aonla Unit for the first time has crossed production of 20 lakh MT of urea which is commendable. Y. Acer Intel Smart Workplace Award. Safety and Environment Management to Aonla Plant. Energy Conservation and Industrial Safety Award to Kalol Plant. Governor of Madhya Pradesh. interalia. In addition IFFCO has pocketed “SMART WORKPLACE AWARD” in the manufacturing and industrial segment by the prestigious Economic Times. Society has crossed the landmark sales and transportation of over 112 lakh MT of fertilizers material registering a sharp rise of 20% over the last year.S. at the Vikram University Campus in Ujjain. These awards. This National Energy Conservation Award 2008 was among many accolades IFFCO received for its safety and conservation endeavours from FAI. include for Best Production Performance. that the work environment here is one encourages creativity and nurtures success. At the world communications awards in London its associate IKSL has been conferred award for Best Content Service and Best Project Management. Chief Minister of Andhra Pradesh. Awasthi. Dr. Rajasekhara Reddy. Another significant event was the laying of the foundation stone of India’s firstever Kisan SEZ (Special Economic Zone) by Dr.Given the fact that IFFCO acknowledge that people are the key drivers in its growth. that A YEAR OF APPRECIATION (2008-09) It was a moment of pride for every member when the President of India in the year 2007 lauded IFFCO’s efforts at conserving energy and keeping its consumption at the lowest level. IFFCO has now become the largest marketer of process 14 . IFFCO’s Managing Director. Awards for Best Technical Innovation. then.

This reaches out to member cooperative societies. Society has already achieved the sales turnover of about Rs. all with the intent of reaching out to those in need and improving the quality of their lives. Here. IFFCO-Tokio General Insurance Company Limited (ITGI). farmers are provided insurance against accidents with the purchase of a 50 kilogram bag of IFFCO fertiliser. a leading chemical and fertilizer manufacturing company of Kazhakistan. During the year 2008-09. Mausam Bima Yojana and Janta Bima Yojana. community development. thus empowering many lives. Another agreement of intent has been signed with Qatar for setting up a Urea plant. fertilisers.32800 crore during the financial year 2008-09. farmers meetings. CORPORATE SOCIAL RESPONSIBILITIES In line with its vision and mission statement. kits containing seeds. sales point personnel training. IFFCO has adopted 439 villages. IFFCO has initiated several promotional projects to provide greater opportunities to the farmer by organizing field days. the society has entered into a long term agreement with LEGEND International for supply of rock phosphate along with equity stake. It has initialed an MoU with Kazphosphate. launched by IFFCO’s subsidiary. IFFCO has undertaken several social activities in the areas of education.000 people since its inception in September 2001. crop seminars. special agriculture campaigns to effect transfer of modern farming trends. creation of drinking water facilities. ITGI also offers customized policies for farmers such as Barish Bima Yojana. The programme started with an objective to bring about overall development in the living standards of rural community through integrated rural development with particular emphasis on agriculture development. environment protection and horticulture. bio-fertilisers and agrochemicals along with 15 . Another scheme that benefits the farmers is Sankat Haran Bima Yojana. Besides. health care/medical facilities etc.fertilizers not only in India but in the entire world. The policy has helped over 7. Adopting a village is of paramount importance to IFFCO. medical and veterinary check up.

This Trust assists farmers in getting medical treatment. Phulpur and Aonla plants have received the ISO-9001 certification for Quality Management.booklets/literature were distributed to farmers. The Kisan Sewa Trust organizes cancer detection and eye camps and arranges for blood through the Red Cross Society.221 farmers. IFFCO presents monthly scholarships to deserving students and also organizes training programmes for women. The Cooperative Rural Development Trust provides practical training to farmers and has organized 229 programmes 2008. including women. In keeping with its intent of empowering the weaker sections of society. The emphasis is on current topics in agriculture. The aim: enhancing crop productivity and thus improving lives. IFFCO has contributed Rs 10 crore to set up the IFFCO Kisan Sewa Trust. in 16 . The Kalol. The environment is a major concern with IFFCO. The organisation has instituted 17 IFFCO Chairs at agricultural universities and cooperatives. benefiting 22. Phulpur. the Kalol. health and environment of its manufacturing units. Further.14001 certificate for Environment Management System. IFFCO is also committed to improving the safety. The IFFCO Foundation has been promoted as the think tank of the organisation. in line with international norms. was given a certificate of appreciation by the Tata Energy Research Institute for its efforts towards good corporate citizenship. Its objective is to focus on strengthening village level cooperatives in harmony with the law and culture of the country. surrounded by trees. IFFCO uses its 12 storage-cum-community Centres for helping people come together and share their experiences. Employees also contribute regularly to it. Aonla and Kandla units have been awarded the ISO. Indian Farm Forestry Development Cooperative Limited (IFFDC). promoted by IFFCO. Its units and townships comprise beautiful landscapes.

4242.2 d. For this purpose. we can say that: IFFCO IS: 1. and information on cooperative sector. Besides that. NPK/DAP . TOTAL ‘P O5 . 108 touch screen monitor based Farmers Information Kiosks or Cyber Dhabas in 10 languages have been installed in 17 different states of the country. In short.8 17 . fertiliser industry.4 2 (‘000 c. No. During 2008-09. IFFCO has developed and implemented several ERP solutions and e-commerce solutions for internal use as well as for use in its joint projects. Largest producer of fertilisers in the country 2. of Plant Locations : Five 3. Some of these solutions have got recognition by Indian as well as by International Media Groups.2 b. Installed Annual Capacity MT) a. UREA .4335.INFORMATION AND COMMUNICATION TECHNOLOGY IFFCO is taking measures to develop web based services to provide exhaustive information on agriculture.1712. TOTAL ‘N’ 2628. IFFCO has undertaken enhancement of WAN & Network security for all the plants and marketing offices across the country. Symantec antivirus server has been consolidated and clients installed on all the machines across the country for protection against virus attacks. agro-chemicals.

O5 ” produced in and 158 2 Societies 18 . 5. Fertilisers marketed through 39564 Cooperative Farmers Service Centers. Contributed about 20% to the total ‘N’ and 25% to the total “P the country during the year 2007-08. Only Fertiliser Institution in the country to produce 68.47 lakh MT of fertilisers and 93. Service to the Farmers through a variety of programmes.24 lakh MT of sales during 2007-08.4. 7. 6.

3) Ensuring availability of fertilisers at the farmer’s doorstep.OBJECTIVES OF THE COMPANY The broad objectives of setting up this venture:1) Producing fertilisers. 8) To promote the activity for enriching the life of the rural. 6) Improving agricultural productivity through balanced fertiliser application.R. It has emerged not only as the largest fertiliser producing organization in India but also Asia’s largest fertiliser co-operative. 4) Creating scientific awareness among farmers. Extra. 9) To achieve self reliant and self generated economy. 5) Promoting nation’s growth through modern farming techniques. 5310 7897 8335 6895 9950 5055 Local Taxes applicable. 2) Promoting the fertilisers distribution system in the co-operative sector. 7) Strengthening cooperation distribution system. where ever MANAGEMENT 19 . Prices of IFFCO's Fertilisers (Applicable only within India) (Indian Rupees Per Tonne w. IFFCO has grown steadily since its inception today.P.f 31-042010) UREA NPK DAP MOP N-46% 10-26-26 12-32-16 20:20:00 18-46-0 K-60% M.e.

ventures) the Joint Venture operations and Director (Coop. supervision and management of day to day business and affairs of IFFCO. Development ) looks after Cooperative Development. direct the various activities of the Society and undertake any other activities conducive to overall growth and development of Societies. The Board of Directors frame policies. Such elected delegates shall be as per the provisions of the Multi-State Cooperative Societies Act/ Rules amended from time to time. Th Director looks after the Techincal Director is e (Technical) aspects.The Representative General Body (RGB) which is the General Body forms the supreme body that guides the various activities of IFFCO. 3. Th Managing is the Chief Executive of the organisation e Director with responsibilities for general conduct. These functional directors are assisted by experts in various disciplines. Senior Executives who are 20 . However the maximum number of such delegates from any State/Union Territory at the rate of one delegate for every 200 societies or part thereof shall not exceed 25. The Board is headed by the Chairman. Delegates to be elected from amongst the representatives of Member – Societies (other than Members holding shares of the value of Rs. 2. One delegate from each of the Member Societies holding shares of the value of Rs. (HRD) responsible for all the Human Director (Joint oversees all Resources. The Board of Directors of IFFCO carry out all functions as specified under the Multi-state Cooperative Societies Act/Rules. 100 thousand and above ) in each State/ Union Territory at the rate of one delegate for every 200 societies or part thereof. Members of the Board of Directors.100 thousand and above. The RGB consists of: 1. such delegate shall be as per the provisions of the Multi-State Cooperative Societies Act/Rules as amended from time to time. The Finance Director oversees the The financial aspects and Marketing looks after the marketing functions of the Director IFFCO.

BOARD OF DIRECTORS The Directors of IFFCO Chairperson – Shri Jakhar Surinder Kumar Vice-Chairperson . Srinivasa Gowda Shri K. Somashekhar Rao Shri Simachal Padhy Shri Pramod Kumar Singh Shri R. U. Maikota Shri Vithalbhai H.Vishwanathan Managing Awasthi Director – Dr.K. Patel DIRECTORS Shri Chandra Prakash Shri S. 21 .Gopal Reddy Shri Ankushrao R. Dharme Gowda Shri Kartick Chandra Sarkar Shri Harminder Singh Jassi Shri M.S. Radadia Shri Sheesh Pal Singh Shri Raj Kumar Tripathi Shri Balvinder Singh Nakai Shri Ravindra Pratap Singh Shri K.Tope Shri Rajhans Upadhyaya Shri G.Dhami Shri B.C.P.L.S.Shri N.

Joint Managing Director-cum-FD – Shri Rakesh Kapur Director (Coop. G.) – Shri A K Singh BANKERS India Overseas Bank State Bank of India Bank of Baroda Standard Chartered Bank The Maharashtra State Co-operative Bank Ltd.N. Singh Director (Joint Ventures) – Mr. ICICI Bank Ltd. IDBI Bank Ltd. Singh Executive Director (Tech. The West Bengal State Co-operative Bank Ltd. IFFCO’s MAIN AIM 22 . K. The Karnatake State Co-operative Bank Ltd. The Hongkong and Shanghai Baking Co-operation Ltd. Development) – Dr. Saxena Executive Director (HRD) – Shri R. The Punjab State Co-operative Bank Ltd. P.L. Madhya Pradesh State Co-operative Bank Ltd.

environment and forestry development to enrich the quality of community life.” VISION “To augment the incremental incomes of farmers by helping them to increase their crop productivity through balanced use of energy efficient fertilisers.” IFFCO’s mission is “to enable Indian farmers to prosper through timely supply of reliable. advisory and technological interventions sourced from within the country and abroad and in accordance of the Cooperative Principles and in harmony with the law and culture of the land. empowerment and innovation which would help in incremental growth of employees and enable achievement of strategic objectives. MISSIO N 23 . 4) Commitment to social responsibilities for a strong social fabric. 5) To institutionalize core values and create a culture of team building. 2) To make plants energy efficient and continually review various schemes to conserve energy.“Strengthening management and participatory character of the Indian Cooperative Movement by using duly tested and appropriate consultancy. and to make co-operative societies economically and democratically strong for professionalized services to the farming community to ensure an empowered rural India. safety. high quality fertilisers and farm inputs and services in an environmentally sustainable manner and to undertake other activities to improve their socio-economic status.” 1) To provide to farmers high quality fertilisers in right time and in adequate quantities with an objective to increase crop productivity. openness and mutual concern to make working a stimulating and challenging experience for stakeholders. 3) Commitment to health. maintain the environmental health. 6) Foster a culture of trust.

7) Building a value driven organization with an improved and responsive customer focus. 11) A true co-operative society commitment operative movement in the country. enhancing earnings to maximize the shareholder’s value. 10) To ensure growth in core and non-core sectors. 8) To acquire. 9) Sourcing raw materials for production of phosphatic fertilisers at economical cost by entering into joint ventures outside India. A true commitment to transparency. assimilate and adopt reliable. VISION 2010 24 . focusing on strategic strengths. accountability and integrity in principle & practice. seizing opportunities for generating and building upon past success. efficient and cost effective technologies. for fostering co- Emerging as dynamic organization.

9.Backward integration to meet feed stock requirements such as Phosphoric acid. pesticides etc. bio-fertilisers. Attaining an annual turnover of Rs.000 crore by 2010. IFFCO as a Cooperative society.15.Information technology and IT enabled services 8.IFFCO has set up a power generation company in Chattisgarh and formed a joint venture to manufacture Phosphoric Acid in Egypt APPROACH To achieve our mission. 6. Natural gas etc. 4. Under Vision 2010.Easblishment of retail chain in urban and semi-urban locations.Diversification into new growth areas such as mobile telephony and communication Technology in the rural areas. undertakes several activities 25 .Value addition to agri-products and marketing 7. seeds. 2.Production and marketing of micro-nutrients.Installation of Ammonia and Urea plants including acquisition of fertiliser units 3. Generation of Power 5.Having accomplished the objectives envisaged in “vision2000”and”mission-2005” IFFCO embarked on “vision2010” which focuses on future growth and development of the society and aims at: 1.

commitment to quality is insurmountable and harnessing of mother earth’s bounty to drive hunger away from India in an ecologically sustainable manner is the prime mission. • • • • • 26 . The activities envisaged to be covered are exhaustively defined in IFFCO’s Byelaws COMMITMEN T Our thirst for ever improving the services to farmers and member co-operatives is insatiable.covering a broad spectrum of areas to promote welfare of member cooperatives and farmers. price of the product and better service after selling the product. To increase the efficiency of the workers. To maintain better human relations and discipline among all the employees. To fair price of the product manufactured by the company is subsidy to the farmers. BUSINESS PRINCIPLES OF THE COMPANY • • Appreciation of national need of generation upto optimum return of investment. All that IFFCO cherishes in exchange is an everlasting smile on the face of Indian Farmer who forms the moving spirit behind this mission. Effective management information system. To develop good relation with customers. Total consumer satisfaction as a quality of the product.

After one year of establishment in 1968. So the EMBLEM is made by Mr. The executive of the company said that which can be easily fit into any place or easily changeable according to the place and made by simple geometrical method.I. Gupta.IFFCO’S EMBLEM The Emblem of any organisation i. the remaining white color shows that the quality of the IFFCO’s product is very good and oval shape is meant for the wealth and prosperity. the logo is very important by which the company is known to everyone or that is identity of the company. The rectangle shows that the Indian economy is depend upon the agriculture and green color shows the faith of the farmers. M. ORGANISATION CHART OF IFFCO 27 . they believe that after using the urea their fields will always be green.e. the organisation has decided to make an EMBLEM of IFFCO. Chief Visualiser Developer and looks like Logo’s ratio is1:2:5 and the color is green.

Board of Directors Chairman Chairman & Vice Managing Director Dy. (Coop. Director Dy.MDcum-Mkt.MDcumFinance Director Director (Technical ) Director (HR D) Director. Development) 28 .

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12163 crore in (2007-08) (Previous Plant Productivity (Best 1669 MT in 200506) Highest Marketing Productivity (Previous best 6158 MT in 2007-08) Composite Energy Consumption Lowest 5.29 lakh MT in 2007-08) Highest Sales of NPK/DAP (Previous best 38.907Gcal / MT in 200708) 71. Highest Production of Fertilisers (Previous Best 70.63 lakh MT in 2007-08) Production of NPK/DAP/NP MT in 2006-07) (Best 32.68 MT 31.68 MT 40.Provisional highlights of IFFCO performance during 200809.49 MT 53.24 lakh MT in 2007-08) Highest Sales of Urea (Previous best 54.84 MT lakh lakh lakh lakh lakh lakh Rs 32800 crore 1376 MT per employee 7380 MT per employee 5.95 lakh MT in 2007-08) Highest Turnover best Rs.9433 Gcal/ MT 30 .26 lakh Highest Sales of Fertilisers (Previous best 93.33 MT 58.12 lakh MT in 2006-07) Highest Production of Urea (Previous Best 39.00 MT 112.

IFFCO ASSOCIATES 1.A. CHIMIQUES FERTILISER DU COMPANY 31 . INDUSTRIES SENEGAL 2. OMAN INDIA S.C.O.

COOPERATIVE RURAL DEVELOPMENT TRUST 7. 6. NATIONAL COMMODITY & DERIVATIVES EXCHANGE LTD. 5. 2) Two awards for industrial safety from GOI. LEGEND INTERNATIONAL HOLDINGS INC AWARDS GALORE KALOL UNIT 1) Seven awards received for overall performances from FAI. 3) Award for technical innovation from FAI.3. 4. 32 . INDIAN POTASH LTD. IFFCO FOUNDATION 9. NATIONAL COLLATERAL MANAGEMENT SERVICES LTD. KISAN SEWA TRUST 8.

7) Three awards for best environmental protection from FAI. 9) Best technical paper award by FAI. 8) Best environmental excellence awards from Indo German green tech foundation. 3) Two awards for overall performance from FAI. KANDLA UNIT 1) Twelve safety awards from national safety council Bombay GOI.4) Two Rajya Bhasha Shield for promoting Hindi. Chicago. 2) Award for conservation of energy from GOI 3) National Award for “Excellence in Energy Management” 4) C Indo German and Greentech Environment Excellence Award 5) C Award for Best overall performance from FAI 33 . PHULPUR UNIT 1) Four awards for productivity from NPC. 2) Twenty-three safeties award from Gujarat. 6) Indo German greentech environment excellence award. 6) Three national energy conservation awards. 5) Award for safety from National Safety Council. AONLA UNIT 1) Award for best implemented project nd price) from (2 GOI. 2) Six national safety’s award from GOI. 3) Raj Bhasa award for promoting Hindi. 4) Six awards for overall performance from FAI. Goa. 5) FAI’s Award for Best Overall Performance of an operating fertiliser unit for Nitrogen (Ammonia and Urea) Plant jointly with Zuari Industries Limited. 4) Two awards for technical innovation from FAI.

Nearest Delhi Airport New 34 LOCATIO N Uttar .6) C Two Awards for Excellence in Safety from FAI 7) C Two Safety Awards from National Safety Council of India 8) C Rajiv Ratna National Gold Award 2005 for Best Executive 9) C Excellence Award for papers published on “Safety and Health in Chemical Industry” and “Hazard Identification & Risk Management 10) National energy conservation award 2006 11) Golden Peacock Environment Management Award 2008 ABOUT AONLA UNIT State Pradesh State Capital Lucknow Distance from Lucknow 280 Km. Distance from New Delhi 260 Km.

6 Crore AONLAI : 1996 INVESTMEN : Rs.800 AMMONIA 3480 11. It was set up on 08 35 .149. Southwest on Bareilly-Aonla Road. Area under Hectares Area under Hectares Aonla (10 Km.99.908 The IFFCO AONLA Unit is located in the Gangetic Plains of Uttar Pradesh in Bareilly district about 28 Km.7 Crore AONLAT II YEAR OF DEBOTTLENECKING : 2008 INVESTMEN T : Rs.651.954.48.400 TOPSOE UREA 6060 SNAMPROGETTI ‘N’ 2788 9. From the In Bareilly–Aonla Bareilly Plant 260 220 Township YEAR COMMISSIONING INVESTMEN T YEAR OF EXPANSION OF : : 1988 : Rs.19.Railway Station Plant) Road Plant is highway.2 Crore PRODUCT CAPACITY TECHNOLOGY TPD TPA HALDOR 19.

K.urea complex is comprised of the two phases: AONLA1 AONLA2 AONLA -1 was established in 1988 and it was digested to nation by honourable Prime Minister of India late Shri Rajeev Gandhi on 17 May 1989.000MT 7. This unit was designed to nation by honorable Prime Minister of India Shri I. AONLA-2 was established in1996 December.1985 30. a quality registrar has certified it as ISO: 9002 unit and M/s BVQI London has accredited it as ISO:14001 unit.1993 Mechanical completion 08.1988 30. an Ammonia.45. Gujral on 28 Jan 1997.1996 36 .11. The infrastructure of AONLA unit is very big and constructed on 713 acres of land.January 1985 and started commercial urea production at 16 July 1988.500MT 4.500MT Urea 7.26.A.26.000MT Project zero date 08. SALIENT FEATURES OF AONLA UNIT Particular Aonla-1 Aonla-2 Capacity (P.01.) Ammonia 4.45. IFFCO Aonla unit is the most efficient and quality-wise as well as environmental oriented unit so that M/s KPMG Peat Marwick.09. The Aonla unit.01.

1996 Urea production started 18.1988 26.1996 Feedstock Natural gas Natural gas with Naphtha (Natural Gas from HBJ pipeline being supplied from Bombay ) high Capacity Enhancement of Aonla and Phulpur Units IFFCO has submitted the Techno-Economic Feasibility Report (TEFR) for Capacity Enhancement of Aonla and Phulpur Unit to the Department of Fertilisers (DOF).11.05. Following enhancement in capacity has been envisaged with a total annual increase in Urea Capacity by 5.Ammonia production started 15.12.05.1988 15.115 lakh MT: Name of Proposed Unit Present Capacity Capacity (MTPD) Increase in Capacity (MTPD) 37 .

65-70 lakh per MTPD Urea in case of a Grassroots Plant. 19 lakh per MTPD of Urea as against the Rs.( MTPD) Phulpur-1 1670 2080 410 Phulpur-2 2620 3000 380 Aonla-1 2620 3000 380 Aonla-2 2620 3000 380 Total 9530 11080 1550 The installed cost for the Enhanced Capacity is estimated at about Rs. IFFCO has initiated action for De-bottlenecking of its plant at Aonla and Phulpur Units for Capacity Enhancement. Steam and Power Generation Plant 1. AMMONIA PLANT 38 . We are awaiting final clearance from DOF. Product Handling Plant 4. Urea plant 3. Therefore De-bottlenecking of existing Urea Units is the best route to create additional Urea capacity. Ammonia Plant 2. PLANTS OF AONLA UNIT There are mainly four plants in the unit namely: 1. Incidentally this will also reduce the subsidy to Government vis a vis imported Urea.

3. STEAM AND POWER GENERATION PLANT To meet the continuous power supply needs of the main plants. Italy on Ammonia stripping process. Two silos of 45. Manager General General Manager General Manager JGM/DGM Production JGM/DGM Maint. rail wagons or seasonal demand 4. Additionally. The technology is based on Haldor Topsoe.There are two streams of Ammonia plants having the capacity to produce 2x1520 MTDP of liquid ammonia. The technology is based on Snamprogetti. PRODUCT HANDLING PLANT Product handling plant is composed of Urea storage known as Silo and packing and transport activities. two gas turbines each having the capacity of 18MW along with heat recovery steam generation unit has been provided to cater to the plant needs of power and steam. JGM/DGM F&A 39 . HRU unit of Ammonia –II add to the steam supply of the complex.000 MT capacity have been provided to Urea product to ensure continuous urea production even if it is not taken off due to nonavailability of fluctuations. captive power plant and stem generation facilities have been provided.000 and 30. JGM/DGM Technica l JGM/DGM Utility JGM/DGM Comm. Denmark process with Natural Gas and Naphtha as main raw material. In this plant. ORGANISATION CHART AT AONLA UNIT Sr. UREA PLANT There are four streams of Urea Plant having the capacity to produce 4x1310 MTPD OF Urea Fertiliser. 2.

& Instrumental Offsite Store Drawing Library & Document Laborator y Training & Development General Engg.Ammonia Plant Mechanical Process Power Plant Purchase A F& Urea Plant Electrical Design & Product Handlin g Civil Fire Safety & Env. to facilitate smooth and easy functioning and control. Organisation Structure FINANCE ACCOUNT DEPARTMEN T & 40 . Aonla is divided into 5 sections. JGM/CM JGM/CM Traffic Finance & Accounts Department At A Glance The Finance & Accounts Department of IFFCO.

BOOKS/FICC CELL

FINANCIA L CONCURRENCE

BIL L SECTIO N

PAYROLL TAXATION SECTIO N

&

PSL SECTIO N

Supply Section

Note Sheet Payment

Work Order

Indigenous supply

Imported supply

Work contract

Service contract

Line of Control in Finance & Account Department
HOD JGM/DGM (F & A)

Chief Manager (F& A)

Chief Manager (F& A)

Sr.Manager (Account)

Sr.Manager (Account)

Sr.Manager (Account)

Sr.Manager (Account)

41

Manager Account

Manager Account Manager Account Manager Account

Deputy Account Manager

Sr. Account Officers Account officers Jr. Account Officer Sr. Accountant Jr. Accountant

FINANCE AND ACOUNTS DEPARTMENT

Each company is carried with a purpose of earning money. Money or capital being a scare as well as crucial resource in the working of any organization needs to be given prime importance. The financial resources have been planned and controlled in a proper and continuous manner. As among the most crucial decisions of a firm are those which relate to finance. Finance & accounts from an integral part of any organization. Proper and smooth functioning of this section is very vital for the organization to survive and grow.

42

Finance functions are of two types: Managerial finance function Routine finance function

Managerial finance functions are so called because they require skilful planning, control and execution of financial activities. Routine finance functions on the other hand, do not require a great managerial ability to carry them out. They are chiefly and are incidental to the effective handling of the material finance functions. The various areas covering under the preview of subsections are as follows

1. BOOKS SECTION
This section basically deals with accounting function, maintenance and keeping of records.

The various functions include:

Books: Preparing and maintaining balance sheets. IFCC (Fertiliser Industries Coordination committee) Costing & Pricing Cells Reporting

2. PAY ROLL SECTION
This section deals with the payments of salary and wages to the employees and extending various other benefits are covering under to preview are – Salar y
43

Taxation Section As per the status and operations of the society. It is an integrated package based on Oracle DBMS. Bank Payment Vouchers and Journal Vouchers generated in HRMS are automatically posted online to Payroll Section of Finance & Accounts Department. IFFCO mainly produce ammonia and urea at Aonla plant. In this relation monthly production report is prepared and all 44 . Simultaneously. It deals with the following Taxes:Central Excise Duty Income Tax Service Tax Sales Tax Central Excise Duty As we know that this duty is charged by Central Government on the goods manufactured.Leave Travel Concession (LTC) Medical Allowance Conveyanc e Advance s Loans to employees Aonla Unit undertakes processing of salary and other staff related payments of all employees through Human Resource Management System (HRMS).relation of HRMS and FAS so that cash payment/receipt vouchers. The System integrates Personnel & Administration Department and Finance & Accounts Department. There is also inter. Financial Accounting System (FAS) which is also based on Oracle DBMS has been launched in F&A DEPARTMENT through which General Ledger Sub Ledger of Employees is maintained and Trial Balance and Financial Accounts are generated. So duty on ammonia is charged.

inventory is a tangible property which is held: For sale in the ordinary course of business. 45 . For consumption in the process of production of goods and services for sale including maintenance supplies and consumables other than machinery spares. The duty is deposited in the Government bank account on the th day of the 5 month. e literary meaning of inventory is stock of goods. According to International Accounting Standards-2.documents and accounts are prepared by the Finance & Accounts Department. CONCEPT OF INVENTORY MANAGEMENT Dictionary meaning of inventory “detailed list of movable Th is articles”. EXCISE is not charged on production of Duty Urea. In the process of manufacture for such a sale.

All goods manufactured during a particular period may not be sold immediately. various types of raw materials are being used in the production system.Inventory Management involves the control of assets being produced for the purpose of sale in the normal course of the company's operations. To ensure smooth production function and also to avoid any kind of production delays the concern has to keep inventory of raw materials. However. These are to be kept in warehouse.that are associated with holding inventories. As such. Such spare parts are either bought from outside or manufactured in the concern itself. the importance of inventory management to the company depends upon the extent of investment in inventory. The idea is to uncouple the production and sales function so that it is no longer necessary to produce the goods before a sale can occur.I.) of Work-In-Process : 46 . etc. some materials might have been issued to the production process but might not have been completed as finished goods. Inventory Goods : of Finished Inventory (W. Bolts. nuts screws. This is known as work-inprocess. Sometimes the manufacturing system involves various processes for converting raw materials into finished goods.P. clamps. Inventory of Stores and Spare Parts : This inventory consists of those products which serve as accessories to the main products manufactured for the purpose of sale.direct and indirect . are the examples of stores and spares parts.. The term ‘inventory’ includes: Inventory of Raw Materials : In the case of manufacturing concerns. The goal of effective inventory management is to minimize the total costs .

Only on the basis of various control techniques one can ensures whether inventory would be timely available. there is need for controlling as well. But effective control in itself depends upon organizing and coordination. Need for inventory management Inventory management is an integral part of general management. Thus. inventory management comprises the functions of planning. These are: 1) Production management 2) Marketing management 3) Financial management 47 . quantity.The application of managerial function on the basis of management principles in the field of inventory is termed as inventory management. controlling and organizing the types of all goods. Three important functional aspects of a business are closely related to inventory management.sequence etc. For timely availability along with optimum size. it may be called inventory management. The objective of inventory management is to plan the optimum size of inventory which is neither excessive nor deficient and is timely available. status. flow and time. Managerial functions are performed with respect to inventory.

In financial management. production manager will always strive to have a large inventory of raw materials and of such a good quality as to ensure stable production operations. Proper handling of input materials ensures the smooth running of plant. verification and controls of materials in right quantity and at right time to facilities the production function. marketing manager aims at satisfying ever increasing demands for improved customers’ service by having large inventory of inside goods. In marketing management . MATERIAL DEPARTMENT Material Department is responsible for the proper handling of inputs and controlling of material inputs. In production management . finance manager will effort towards to keep investments in different types of inventory at a minimum possible level so that the business concern may earn maximum return. 48 . Material department recognizes the need of the input materials and arranges them for the plant. financial management is concerned with the financial aspect of the inventory management.Here the production management and marketing management are related to the physical aspect of inventory management and. It includes the procurement.

Material management functions: • • Purchasing includes two important Storing and control of materials That’s why. Purchase department do enquiry about the inputs whether it is required or not. This enquiry is done in two ways that are: 1) Single stage 2) Two stage 49 . it is divided into following sections: • • Purchase section ( It is responsible for purchasing of materials ) Store section ( It stores the inputs) These both sections are interrelated and perform their function on coordination. Material purchase indent should give following information: 1) Quantity in stores 2) Average monthly consumption since last purchase for stock items 3) Maximum /minimum level 4) Last purchase reference 5) Reorder level order PURCHASE SECTION The purchase department is at the interface of internal and external department. All purchases are to be made only by the materials department except purchases of petty item through some vouchers and Department Managers within the limits prescribed in purchase procedure/power of officer.

Purchasing involves the extra knowledge as the tenders. Purchase department is responsible for the delivery of right amount of material at the right time and at the right location to avoid the hampering of the production.After enquiry purchase department invites a tender. After confirmation of all terms and conditions the department contacts the supplier and orders for the inputs. The purchase department considers various things before purchasing the raw materials.vendor 3. after service. various vendors. their prices. Purchasing is distinct from buying. dispatching follow up and payment terms. Reasonable price of that material 4. Thus it is responsible for purchasing of materials and other raw materials whatever is required by the organization. All terms and conditions Indenter is that person who raises the indent. Sources of material. comparison between them. 1. Information about the input material 2. sale PURCHASE PROCESS The purchase process can be expressed as following: INDENTER 50 .

If that particular material is not available at the particular point of time then store informs to the purchase department. 2) RECOGNITION OF NEED : The purchase department recognizes the need of indenter and checks whether that material is available in the store or not. This indenter may belong to any department. After it the working of purchase department starts.Procurement Manual (15 days) (21 days) Opening Quotation Comparative Statement (QCS) Technically Acceptable L-1 Bidder Order (With approval of competent authority) The diagram can also be summarized as follows: 1) RAISING OF INDENT : First of all the indenter raises the indent.Material Purchase Requirement (MPR) Single stage Enquiry Two stage E. The 51 . Now the indenter informs to the store.

In this he gives several information like:a. 3) input material at all points of time is the responsibility of is an intimation to purchase department by the indenter that he has need of certain materials. Unit d. Material description/ Reason b. required e. For stock items MPR is raised by store keeping in view maximum. He raises indent by filling a form ‘Material Purchase Requisition’ (MPR). minimum & re-ordering lable. Indenter PAYMANT AGAINST PURCHASE: There are various modes of payment through which payment is done: Advance payment1. Budget code g. Item code/ proposed code c. h.availability of purchase department . MPR No. supplier to : If both the parties are agreed upon advance payment that is specifically provided in the contract order. The advance payment to 52 . only then advance payment is given. Value Quantity Proposed REQUISITION TO PURCHASE : This f.

is recovered before releasing the balance payment. Where there is delay in supplying the material and the payment through bank is 90% to 95%. 53 . viii. Whether materials supplied are as specified in the purchase order. they are forwarding bank intimation along with a copy of the purchase order to ascertain that the invoice is raised for the material ordered and conforms to the other terms and conditions of purchase order. a clarification is to be sought from materials department and proper approval taken for waiving of penalty or otherwise before retiring documents. Quantity supplied. ix.contractors shall be made against submission of bank guarantee in Performa provided by IFFCO. Price basis whether F. the Full payment / 90% to 95% payment : In case the terms of payment provide for full payment or part payment against dispatch documents through bank. v. the supplier will be negotiating the documents through the bankers. After the documents are received by the bankers. as provided in the purchase order. sale tax and other taxes are as per the order.O.R. Whether materials supplied are as specified in the purchase iii. Other terms and conditions of the purchase order. vii. or Exworks vi. After the intimation from the bank is received the invoice of the suppliers will be scrutinized by the Finance and Account Department for the followingi. 2. Advance payment against indemnity bond shall not be released as provided in the purchase procedure. It should be ensured that penalty for delay. Whether bank charges are claimed as per the purchase order. Purchase order number ii. Where payment required to be made. iv. Document with bank for retirement should have consignee copy of GR. Whether excise duty.

Full payment / Balance payment after receipt of materials : In case the purchase order provides the 100% payment after receiving of materials and accepted payment is to be released after the SRV is received from the stores department. IMPORTED MATERIAL Materials procured may be either indigenous or imported. Before released of the payment. Payment is made to the foreign party by debiting to the appropriate advance account. inspected and accepted as per the SRV. Orders are also placed by the unit directly. the invoices should be scrutinized as the case of payments released through bank.The payments under the contracts must be regulated as per the expressed terms and conditions. For major projects the foreign contracts are normally finalized at head office level and payment against these contracts are made by the concerned unit. If 54 . In addition it should also be verified whether all the items invoiced have been received. Any payment not covered by the contractual terms and conditions should not be released. which confirms that the material has been accepted after inspection and taken on charge. 3. In case 95% or 90% released against document retired from bank then the balance payment can be released after receipt of SRV from store.

So the items are coded to avoid confusion. After receiving DCSRV/SRV project accounts will clear the supplier’s advance account for material. project engineer shall accept the material and initiate for preparation of DCSRV/SRV. It will be very typical to identify them at the time of requirement. Thus every item has a code that is called its material code. Clearing and handling of imported material is the responsibility of material department on the arrival of ship the materials will be cleared with reference MATERIAL CODING It is very typical for the every organization to maintain the stock items in case of largenumber of items.the payments are made through L/C against documents. the same shall be debited to advances to foreign suppliers account. On receipt of material at site. 55 . For the coding of materials the account person assigns code for every item of store.

Advantages of codification 1.Material coding facilitates the account persons and store manager to maintain the transactions of the items whether of receiving or of issuing. It ensures clarity. It economizes space in forms and reduces clerical work. Every item maintained by its code in the stock as well as in the store accounting section. 5. (LAN) In this way it is very comfortable task to maintain the inventories on the inventory software with the help of material coding. b)Alphabetic:Each item is denoted by a combination of alphabets. If the alphabet selected indicates the inventory sound when it is pronounced. because the computers of stores and accounting section are connected through Local Area Network. CODING There are different types of coding that are as follows: a) Numeri :Each item is given a c number. It is comprehensive. 56 . 4. 3. 7. 6. It facilitates. This helps in remembering the codes. Whenever a transaction is done in store for the inventories the full details of that transaction is send to store accounting section also. Lengthy descriptions are replaced by a simple code. Secrecy of description can be maintained. it is known as mnemonic system. mechanized accounting. 2. Ease in identification of stores. The item/material code remains same in stores and accounting section.

d) :It is basically a numeric system. Urea 3.13 4.Decimal System c) Alphanumeri :It is a combination of alphabets and numeric c code. boxing and protection shall conform to the specification or requirements of the order. In 12 digits coding is done. Power plant -15 2 digits= for the plant location 3 digits= for the equipment 3 digits= for the material 3 digits= for the size and 1 digit = for the item identification. Ammonia – 11 2. The supplier shall be held liable for the damage or breakage of the goods due to defective or insufficient packing. It will be according to term and conditions that are given already in the format. Packing & Dispatch All packing. sub-group may be indicated by decimals.12 . Product handling -14 5. Offsite . 57 . IFFCO The various codes for the different materials are as follows: 1.

All goods shall be dispatched by rail/road freight paid and the railway receipt/lorry receipt shall be posted to the concerned officer of IFFCO. DOCUMENT REQUIRED FOR THE DISPATCH OF GOODS Following documents are required for the dispatching of materials: Challan 3 copies Packing list 3 copies 58 .

If there is any damage in the material or they are insufficient in quantity then rejection report is prepared. there are some conditions in this regard. Damaged/Short/Rejected Materials If the materials are received short or in damaged condition. The person inspecting the material will sign on the stores receipt voucher in token of having inspected and accepted the material. Only after inspection material enters into the store. Inspection of materials in other cases shall be carried out on receipt of materials at site. Sometimes inspection is done at the gate of IFFCO. This insurance is done by IFFCO TOKIO GENERAL INSURANCE COMPANY. a claim should be lodged with insurance company for the value of material plus incidentals. Only materials those cleared by the inspection will be taken on charge in stores. In cases where the responsibility for the transit insurance is on IFFCO. Its copies are distributed among all the parties which are involved in it. As soon as the shortage per damage of the materials is noticed the material department will lodge the provisional claim with the underwriters and pass on the relevant papers to the finance & accounts department for lodging monetary claim. Generally indenter is called upon for the inspection of the material. 59 .Test certificate copies Railway/ Lorry/ copies Consignment note 3 Air 4 Inspection of Material The material department shall coordinate with other departments and arrange inspection of material at vendor’s shop prior to dispatch.

60 . A report is prepared in this case. Described below is the accounting requirement of major raw material. No.In respect of transit insurance claims bill section will pass an adjustment Entry debiting “claim recoverable account” and credit the “Advance to Vendors account”. After the adjustments the bill section sent the copy of journal voucher along with all necessary details such as P. Accounting of Raw Materials Based on the projected consumption requirement of raw materials. name of the supplier to the insurance section for following up the claim with the insurance company. . the procurement action is taken by the commercial department at the head office which is in Delhi. purchase department and finance and account department. Where the responsibility for short supply or damages in transit is of the suppliers. MRR No. quantity and value.O. Its copies are sent to the supplier. the material department should take up the matter with the supplier for arranging replacement.

The quantity received is accounted at the price payable to the party which is fixed by the Govt. All connected expenditure like customs duty. This price is fixed at par with the landed cost of imported ammonia. The valuation of inventory at the month end is to be made on the basis of exchange rates prevailing on the last day of the month. are also included in inventory valuation. Where free on board (FOB) price is agreed.Imported Phosphoric acid and Ammonia The consignment of phosphoric acid and Ammonia are received at Kandla and the material actually received is valued at the contracted cost & freight price. of India. Indigenous Ammonia The indigenous ammonia is supplied by KRIBHCO / GNFC to Kandla unit. After releasing the payments the inter unit 61 . The finance department at head office ensure that payment for these raw materials are released on due dates to avoid interest liability. The account department also ensures that all claim suppliers for shortage are booked on monthly basis and necessary on quarterly basis for the pending claims. handling charges etc. The difference if any between the provisional rate and the actual payment rate shall be charged off to the consumption account. the ocean freight element is loaded separately. Potash Potash purchase orders are placed by the commercial department time to time depending on the material requirement. The material received valued at agreed price plus local sales tax and freight for transportation of material up to plant site. if the material is already consumed.

Phulpur and Aonla plant consume as feed stock and fuel. gas is supplied to IFFCO at the price fixed by Govt. For Catalysts & Resins where IFFCO has pooling arrangement with other companies.debit advice is sent to plant. the material received is taken to inventory at the actual price paid and equivalent amount is credited to “material received on loan account”. On receipt of the payment advices the supplier’s account is adjusted in the plant. There are excise duty concessions available for these items provided they are consumed for manufacture of fertilisers. Meter reading is carried out jointly by ONGC / GAIL and IFFCO representatives. Koyli. Natural Gas Kalol. Catalysts & Resins The Catalysts & Resins are produced by the material department at the plant. 62 . The price payable to IOC for naphtha is fixed by the Govt. from time to time. on the receipt of the material the inventory is valued at the agreed price. The meters provided at the inlet point in the plants are the basis for monthly billing. Phulpur & Aonla units. Panipat & Bagoun to Kalol. The unit sends the e-mail to head office for making payment to ONGC / GAIL after due certification of bill by the head of technical department about quantity of gas received. The naphtha is supplied by IOC from its refiners located at Mathura. of India from time to time. Accounts department in coordination with production department shall ensure that all the excise duty requirements are fulfilled that the duty concessions are fully availed. Naphtha Naphtha is supplied by IOC against advance payment terms. As per the contract with ONGC. BRPL. The inventory is valued based on the quantity received as per MRR received from production department on monthly basis.

This entry will be reverse when the material is procured by IFFCO and replenished for return of loan. 63 . The inventory and consumption account then shall be accounted at the actual procurement price.

Store B for Aonla-2 unit. It is the responsibility of stores to receive the material required by the organization’s operations to keep it properly & to issue it as when required. The stores are divided in two subsections for greater flexibility like receipt and custody section. a.STORE SECTION Store of any organization is of vital importance. In IFFCO there are two stores.( it contains mainly catalysts used by Aonla2) Store has the following warehouses: • • • • • • • Main Store Cement godown Petrol Pump Cable yard Chemical godown Paint godown PDIL store 64 . Store A for Aonla-1( this store contains that spares which are used by Aonla1) b.

packing materials and finished products are to be verified on quarterly basis by an independent surveyor by the society. The inventories for other items such as stores. The inventories are classified in three categories for verification purpose.Verification of Inventories The officer of stores will coordinate the job of physical verification and the accounts officer in charge shall render all assistance to ensure that the physical verification of inventories is carried out as per the policy and the policy and the approved program. spares. Kardex contains all the information that is in the store. However the stock registers shall be adjusted on the basis of actual stock in order to replace the notional figures of stocks by more accurate estimate based on physical verification. In case of finished goods also the same principle applied except that no adjustments in the books of accounts shall be made. are also verified every year keeping in view ABC analysis of stock items value and exercise of verification may be completed by March every year. The store department will ensure that the posting in the Kardex are updated before the verification of inventories. Chemicals & Spare parts Finished products The stocks of raw materials. • • • Raw material & Packing materials Stores. construction materials etc. 65 . This is as per guidelines issued by the head office. No adjustments need be carried out in the books of accounts unless the discrepancies in liquid raw materials and solid raw material are in excess of 1% to 5% respectively.

Issue and return transaction along with quantity ledger.000/.000/.001 to 50. Categories Value (Rs.70% C Below Rs. priced store ledger shall be prepared for each item for stores. B.000/.For the purpose of verification of stores.25% A team of stock verifiers shall prepare a stock verification sheet giving the kardex balance and the physical balance of each item covered in the stock verification. Internal Check 1) One set of document for receipts. C categories. per unit) Quantum of Verification A Above Rs. The quantity balance appearing in priced store ledger shall serve as counter check for accuracy of 66 . issues and return of materials shall be sent to the accounting section of finance department. The priced store ledger shall provide value of each receipt. 10. the stock verification sheets shall be forwarded to the materials department for scrutiny and reconciliation and adjustment in consultation with finance department accepted shortage shall be processed for the approval of the competent authority. After filling up the particulars of the value and quality discrepancies with reference to the priced stores ledger balance.100% B 10. chemicals & spare parts shall be classified in to A. 50. Based on these documents. It is desirable to complete the physical verification work by March every year so that reconciliation/adjustment action can be completed within the year itself. RECONCILIATION AND ADJUSTMENT After each physical verification by the custodians of inventories and suitable adjustment action has to be taken. The material code number between stores and accounts shall be identical.

c. The third element is the most difficult to measure and is often handled by establishing a "service level" policy. utilize people the effectively and equipment. The cost of shortage. based on the interest rate). b.bin card balance in store which is essential for proper functioning of inventory control syste m 2) The priced store ledger shall not be maintained for large number of low value items such as stationery. and communicate with . customers Inventory Management and the activities of Inventory Control do not make decisions or manage operations. Inventory Control Inventory control is concerned with minimizing the total cost of inventory. canteen stores etc.g. medicines. g. Quantitative record shall be kept by the concerned department and shall be produced as and when required for audit purpose.. in this case the expenditure shall be charged to the appropriate expense account at time purchase. for row material stocks) or the set-up cost of production.g. The three main factors in inventory control decision making process are: The cost of holding the stock (e. The cost of placing an order (e. what is lost if the stock is insufficient to meet all demand . coordinate internal activities.. they provide the information to Managers who more accurate make and decisions to manage their timely operations. i. certain percentage of demand will be met from stock without delay. e. The Inventory Management system and the Inventory Control Process provides information to efficiently manage flow of materials . a.e. 67 ..

If men and machinery in the factory could wait and so could the customers.Inventory control is a systematic control and regulation of purchase and usage of materials in such a way so as to maintain an even flow of production at the same time avoiding excessive investment in inventories. The need and importance of inventories varies in direct proportion to the idle time cost of men and machinery. TECHNIQUES OF INVENTORY CONTROL 68 . Inventory control is the core of material management. and urgency of requirements. Efficient material control reduces losses and wastage of materials that otherwise pass unnoticed. materials good not lie in want for them and no inventory need to be carried. But it is highly uneconomical to keep the men and machine waiting and the requirements for modern life are so urgent that they can not wait for materials to arrive after the need for them has arisen.

if it is observed that stock level of a given item will not be sufficient till the next schedule review keeping in view of its probable rate of depletion. 3) Fixation of Various Levels: 69 .Reduction of surplus stock is an essential requirement inventory control. In that. an order is placed to replenish its supply. Minimum level establishes the reorder point and order is placed for quantity of material. 2) Order Cycling System: In this system. quantities in hand of each item or class of stock are reviewed periodically. which will bring it to the maximum level. Various techniques are available to solve the various types of problems associated with inventory control:1) Min-Max plan 2) Order cycling system 3) Fixation of various levels 4) Use of control ratios 5) Review of slow and non-moving items 6) The ABC Analysis 1) Min-Max plan: In this plan analyst lays down a maximum and minimum for each stock item.

Minimum Level It represents the quantity of stock that should be held at all the time. 70 . Maximum = Re-ordering level + Re-ordering QuantityLevel (Minimum Consumption*Minimum Re-ordering period) B). Re-ordering = Maximum Consumption*Maximum Re-order level period. d). stock level is normally not allowed facing below this level.Certain stock levels or fixed levels are given below:- A). Re-ordering Level When the quantity of materials reaches at a certain figure then fresh order is sent to get materials again. Safety Level Normal issues of stock usually stopped at this level and made only under specific instructions. Minimum = Re-order level – (Normal consumption*Normal Re-order Period) Level C). Maximum Level It is the quantity of materials beyond which a firm should not exceed its stocks. Safety stock is a buffer to meet some unanticipated increase in usage. Safety stock level = Ordering Level – (Average rate of consumption * Re-order level) OR = (Maximum rate of consumption – Average rate of consumption) * Lead Time. If the quantity exceeds maximum level limit then it will be overstocking.

Cost of average stock = [Cost of opening stock + Cost of closing stock] / 2 Inventory turnover ratio [in days] Days during the period /Inventory turnover = ratio.moving items: Stock turnover ratio should be as high as possible.4) Use of Control Ratios: Inventory turnover ratio helps management to avoid capital being locked up unnecessarily. Loss due to obsolescence be eliminated or these items used in some profitable work. Inventory turnover ratio Cost of materials consumed / Cost of average stock = held during the period Where . Slow moving stock should be identified and speedily disposed off.. The speed of movement should be increased. This ratio reveals the efficiency of stock keeping . the percentage of slow moving stores = Slow moving stores / Total Inventory 71 . 5) Review of slow moving and non. The turnover of different items of stock can be analyzed to find out the moving stocks.

72 . i. technical or other problems and its relative money value in the total investment in inventories. We calculate the index by dividing a part’s inventory quantity by its usage during the most recent 24 month period.TECHNIQUE USED IN IFFCO FOR INVENTORY CONTROL The ABC Analysis: With the numerous parts and materials that enter into each and every industrial production.e. “C” report lists the parts with more than six months supply but not more than one year. Such analytical approach is popularly known as ABC (ALWAYS BETTER CONTROL) Analysis. to the problem of analysis. Turnover frequency is measured by an exposure index. The logic behind is that the management should study each item of stock in terms of its usage. Th ABC Reportsare e made: “A” inventory reports lists parts having little or no turnover. This Plan is based upon segregation of material for selection control. “B” report shows the parts with more than a one year supply but less than a 2-year supply. cost significance for each materials item in relation to total cost and inventory value. It measures money value i. lead-time . Critical. inventory and foremost. and low value items need to be devoted minimum expense and effort in the task of controlling inventories. inventory control leads itself. high value items deserve very close attention.e.

Otherwise it is likely to be perceived as a mysterious ‘Black box’ of dubious value. This generates enthusiasm for the system and enhances its credibility. new situations and new requirements be handled by the system? A certain degree of flexibility and adaptability must be desired into the system to make it versatile. logic and rationale are transparent. The system must be properly explained to all concerned people so that its purpose. it should be clearly understood by all affected parties. Is the system responsive to change? 2. If it is developed with this ideal. regardless of whether it is automated or manual. it is likely to be a complex monstrosity. Remember the caveat that the design of any system should ordinarily take care of about 90% of the cases. Irrespective of how simple or how complex a system is.Criteria For Judging The Inventory System While the over-all objectives of the inventory system is to minimize the cost to the firm the risk level acceptable to the management. Of course this cannot be and this should not be carried too far. 73 . Adaptability The questions raised in this context are: 1. leaving the balance 10% to be handled by hand. the more proximate criteria for judging the are: Comprehensibility Inventory system range from the utterly simple to the complex ones. Can new products. The system must not provide for every possible and imaginable contingency.

Timeliness Inventories may suffer loss in value on account of a variety of factors. It should provide adequate forewarning which triggers appropriate corrective steps 74 . Price fluctuation because of inherent volatility of certain commodities The inventory system should be capable of inducing timely action. Physical deterioration with the passage of time. The more common sources of value decline are: Obsolescence caused by changes in technology & shifts in consumer taste.

75 .Inventory Software In IFFCO the PSL software is used for the management of inventories. This software holds all the transactions of the stocks. Calculator vi. It makes very easy to account persons to maintain the transactions of inventories. There are six different menus in this software these are as follows: i. Reports iv. Processing v. whenever a transaction is made in the store. because both the systems are connected in the local area network (LAN). So with the help of LAN environment it is very easier to accountants to retrieve the information regarding the transactions made by the stores. this software has the variety of qualities which we can discuss with the help of menus of software. Apart from this. Exit vii. Queries iii. Data entry ii. A part of this software is installed on the systems of the stores. the details of that transaction is reaches to the systems of the store accounting section. So this software helps much in maintenance of stocks.

The very first menu that is data entry is used for the various types of entries of transactions. SIV. In the data entry menu there are several options shown in above diagram.DATA ENTRY MENU Data Entry Document entry SRV SI V ISR VA S V STV (IN) STV (Out) Adjustment SIV Adjustment ISRV Physica l Verification Entry Entry of Surplus/ obsolete/ Insur. ISRV. Document Entry: This option is used to enter the data in various types of documents like SRV. STV (out) etc. STV (in). 76 .

Thus easily adjustments are made. they punched the quantity verified or lock the verified quantity till the next verification. 77 . due to any previous adjustment. comes under obsolete items. While the spares which are not in working condition or they are outdated. If the value of material has wrongly feed in the documents or the valuation is high then it is used to decreases the value of that material. Entry of Surplus/ Obsolete: This option is used for adjust the surplus items which is declared by the plant. the items which are exceeds from the records.Adjustment Entry: With the help of this option we may easily make the adjustments in the stock issue voucher (SIV). This is used whenever the valuation of any material has to increase. The surplus items means. There are some spares which are not in used. Adjustment ISRV: This option of data entry menu has the same working in issue stock return voucher (ISRV). Physical Verification: In case of verification of stock the person responsible for stock verification estimates a range of items for verification and after verifies the selected range of items. So in case of this situation the accountants make entry @ of 1 Rupee per unit of items. We give entry them in surplus.

REPORTS MENU Reports Summary wise account head Month Report before PSL runs PSL JV Month Report after PSL runs Inventory Consumption Kardex Code status Yearly HO Issue above Issue than more wise inventory for summary Other reports 78 .

) Loose Tools Chemicals General Stores Construction Materials etc. because if there is any mistake in any document and PSL run is performed it will create the wrong final reports. ISRV. STV (in). So that by this option we can see all the journal voucher of the entries of inventories. Monthly report before PSL runs: This option creates the monthly report of all the documents like – SIV.. so that the account persons may check whether the documents are correct or not. PSL JV: After processing of PSL run all the documents becomes updated and all the transactions also gets updated. SAV. Monthly report after PSL runs: The working of this option is same as the previous option but the difference is that the reports made after the PSL run are more accurate updated and non volatile in nature.Summary A/C head wise: This option creates the summary reports of all the A/Cs in respect of accounts heads like Inventory spares (Ammonia. Urea etc. STV (out) etc. 79 .

80 . its current stock. It is as follows. location in the store and as well as its minimum. We can create report for selected codes. This code is of 12 digits in the IFFCO. Kardex shows the update inventory and also shows the past status of every past tears. It helps in deciding the re-order level of inventory. Kardex: The kardex is the very useful tool for showing the current status of all the items. As when the material was received i. This report helps in forecasting of material purchasing for the future consumption of the materials. vendor.Inventory consumption: This option of the report menu shows the data regarding the consumption of materials according to the date.e. when the material was issued i. It is in form of a software in IFFCO. its balance in the store. The kardex retain all information about the material. its value.e. maximum and reorder level. We can see the consumption of a particular item. issues. The accountant may see the past status as on any past date. Code wise inventory status: This option creates a report inventory code wise. receipts. Thus it reserves every information about the materials. Here I have given a example of kardex in which each detail of material is written.

material description. The appearing statement contains the material code. PSL rate that is the per unit price and also the location of that material.QUERIES MENU Queries Brows Master Inventory This menu has single option that is brows inventory master. 81 . closing quantity. This option is very helpful in search of of any particular transaction in inventories. opening quantity. In this option we may see the status of various materials or items. In a query task we are supposed to enter the material code in the material code box and then click over the retrieve button. As soon as we click over the retrieve button the whole in formation regarding that code is appears on the screen . we can perform the query task. that are twelve digits number. values. As the name of this menu. on the basis of material codes.

82 .PROCESSING MENU Processing Weekly proc. because all the reports which are forwarded to the concerning authorities and are the basis for the further actions are made only after the processing or the PSL run.1 PSL Put account group in INVMAS T Reverse Physical Kardex mismatch stock for Cumulative process Reverse stock Kardex mismatch PSL Process 1 for PSL Processing is the most important task of this software. PSL processing makes update all the documents.

So that this task is very sensitive so the operating person should have the great care and responsibility in processing task. Put A/C group in inventory Master: This option also a processing task when we executes this option it assigns the account group to all the inventory / item codes so that these codes may link to a particular account group .PSL Process I: The option process I update and calculate the values for all documents and makes available to create the final reports. Once a PSL run is processed the data can not be changed. 83 . because the physical verification of the inventories is done once in a year. Reverse stock for physical kardex mismatch: This option creates a list of mismatches of karedx and physical verification. This processing performed once in year. If there is any mismatch in PSL and Kardex the report shows those mismatches on the screen. PSL Process is done for tallying codes and value of the material. In this inventory are grouped. Reverse stock for PSL kardex mismatch: It is very important processing because it creates a list of all the items which are mismatching in respect of units / quantity between the PSL and kardex.

Apart from this the exit menu is simply for quitting the software. whenever we click over the exit menu it exits from the software.Calculator & Exit Menus The calculator menu has no sub option we can use the calculator only by clicking on the calculator menu. It helps much in manual calculations make the surety of correctness. 84 .

For every ammonia plant there are two urea plants each of 1100 MTPD capacity. Product handling Plant Ammonia Plant: Ammonia plant is designed to produce 1380 MTPD liquid ammonia based on Haldore Topsoe Process with Natural Gas the main raw material. we can study the production department into three parts as follows: 1. Urea Plant is linked with two product handling plants. It is carried out with the help of two ammonia plants. For the production of Ammonia Hydrogen & Nitrogen are required in the ratio 3:1. Ammonia Plant 2. Urea 3. So. The source of hydrogen is 85 .PRODUCTION DEPARTMENT IFFCO Aonla is town to production of Urea.

P stripper where most of them converted carbamate get stripped of as gaseous ammonia and COS. carbon mono-oxide and carbon. CO2. Further reforming takes place in the secondary reformer where air is added to furnish the nitrogen required for ammonia synthesis. Carbon dioxide from gaseous mixture is separated in CO2 absorber using benefield process and sent to urea plant. Butane. Hot reformed gases from Secondary reformer are cooled by heat recovery in Waste Heat Boilers. water and the source of nitrogen is atmospheric air.Natural gas. Reactor product from urea reactor flow to a steam heated H. Pure synthesis gas from methanator exit is compressed and sent to Ammonia converter where ammonia is formed ammonia product obtain in sent to urea plant for manufacturing urea. Pentane. Sulphur free gas is yhan mixed with steam and sent to primary reformer where reforming reaction takes place in the presence of catalyst and produces a gaseous mixture of hydrogen. Small quantity of Sulphur compound in the gas is removed by passing the gas through de-sulphurisation unit.dioxide. Nitrogen gas is supplied by GAIL through HBJ pipe line from Bombay High and is used as feed stock which contains large percentage of Methane. In urea Reactor Ammonia and CO2 react to 180 form Ammonium Carbonate a part of which dehydrates to urea. along with Ethane. and introduced in the shift C onverters where most of the CO get converted into CO2. Urea Plant: Two streams of Urea plant each having capacity of 100 MTPD has been provide. Residual of oxides of carbon in synthesis gas leaving absorber are converted to methane in the Methanator. Vapour of ammonia and CO2 obtained from the above purification section are converted into ammonium 86 . Propore. Nitrogen and Sulphur compounds. Urea solution having the bottom of stripper still contains some amount of carbamate. Ammonia and CO2 obtain from NH3 plant are sent to Urea Reactor operating at 150 ATM pressure and o C temperature. Urea process is based Snamprogetti Ammonia Self Stripping process. Further purification of urea to about 72 % concentration takes place in medium and low pressure decompressors.

Storage is equipped with EOT crimes two in number.5 mm. Denier of tape equal to 1. The fine droplets while descending through the lower come into contact with cold air are solidify to form prills.8 % concentration) from the concentration section is pumped to the top of natural draft Prilling Tower and sprayed by the means of rotating pril bucket. The movement of empty bags from these destinations to out side is by road. There are 2 million bag storage capacities in 1400 2 area.03 atm respectively. each having lifting capacity of 1 tonne. Aurangabad etc. Product Urea from the bottom of prilling tower is sent to Urea Silo or Product handling plant. Calcutta.90 for HDPE and around 6.carbamate and recycled back to Urea Reactor for production of Urea Vaccum concentration are provided to concentrate 72 % Urea solution to 99. IFFCO has very strict quality control of bags. Average daily traffic will be two to three trucks. The bags once are ready for dispatch from vendor’s workshop are got inspected by various up to date inspection agencies sponsored by us.3 atm and 0.5 for Jute bag. The cost of bags varies m from Rs 11. Railway Siding: 87 . weighing 10 grams in case HDPE bags made out of 10 X 10 mashes per inch using. The bag will be supplied various vendors based at Kanpur. Hyderabad.25 in inches or 915 X 610 in mm. Urea melt ( 99. Empty Bags: Empty bag’s size is 36.40 to 11. The consignment on its arrival at site is also screened by our Laboratory before it is piled for storage.000 and width of tape 1.8 % in two stages operating at 0. The monthly requirement of bag is around 10 Lakhs. Ahmadabad.

yard forms 2. In addition to it. 2 line each 340 meter long to accommodate off loading of completing Naphtha rake. In plant.up station. the plant has: a. b.3 km in length and is equipped with: I. NR section tapping has been taken at Bisharat Ganj Railway. III. These lines are laid over ballast less platform and have concerts floor in order to recover spillage / leakage while handling fuel oil stock. 4 lines for dealing incoming and out going traffic (from 715-803 meter long). Railway track has been laid which is 09. 1 Engine escape line (685 meter long). of land. II. 3 loading lines (from 700-715 meter in length).From main track of Chandausi. an alternative fuel for power plant. 88 .Barely broad quage. 2 lines each 340 meter long accommodating one rake length for fuel oil stock.38 km long through major one villages acquiring 110 acre approx. Two additional loop lines and simultaneous reception facilities have been incorporated at Take. Take-up station.

ISSUE VOUCHER • SIV voucher) (Store issue 3.DIFFERENT VOUCHERS In IFFCO there are 3 types of receipt and 1 issue voucher are generally used for the particular receipt and issue material. These are listed as below: 1. VOUCHER • • ADJUSTMENT SAV voucher) STV voucher) (Stock (Stock adjustment transfer SRV When material is checked with /invoice and the purchase order for quantity challan SRV (store receipt voucher) is prepared and the material kept in section. SRV can be of two : types (a) FIS ( from supplier voucher) Receipt 89 . RECEIPT VOUCHER • • • SRV voucher) ISRV voucher) DCSRV voucher) (Store (Internal (Direct receipt store receipt store receipt consumption 2.

These vouchers are generally generated by the store whenever the material is received from the supplier/ vendor in stores. (b) H. (d) 1 copy lie with stores itself. (b) 1 copy to indent department. in this stage the concerned party or department will revert back the remaining raw material to store by using such type of issue voucher. BC:Such type of ISRV are generally used by the contractor for return of remaining raw material.P ( voucher for direct consumption) Receipt These vouchers are generally generated when material is directly received by the indenter for direct consumption of raw material. BA:these are also used by controller for spares. BE:These vouchers are used for stationary items. 90 . These ISRV can be of 5 types which are as follows: BD:Such type of ISRV are generally used by the particular department for the general item. (c) 2 copy account department. BB:Such type of ISRV are used for the spare return by the particular department. ISRV (INTERNAL STORE RECEIPT VOUCHER) If the hundred percent of the issued material have not been utilized by the particular department or parties. The copy of these SRV will be dispatched departments such as: (a) 1 copy to purchase department.

an appropriate account code shall be given in accordance with the chart of account. Note: The issue notes shall be priced on the Weighted Average Rate basis after accounting the last receipt of the material. After ascertaining the nature of the expenditure . (b) Two copy to account department. 91 .Note: The copy of these ISRV will be send to the following departments mentioned as: (a) One copy to store. (c) One copy lies with the indenter itself. the job for which the material is issued .

Deptt. code department S no.S.S.items Preferable same group four Authorised b y Name Receive d b y Hash Total Checked by J. 1 2 3 4 Qty Code Description Req d. Posting Issued Kardex b posted y by Designatio n 92 . See. Material U. Qty Issued Balan Rs.STORE ISSUE VOUCHER No. MGR(S) P. ce Please use one voucher for max. MGR/ Sr.M./ S.L . P. Job/ work order Cost center Exp.O.O.

Certified Posted by b y Unit Qty Retu rn Qty Receive Balanc Rs.L. Material Code Descriptio n 1 2 3 4 Reason cylinder Inspecte d b y Name for ReturnAuthorise d by New/Serviceable/Recondition/Scrap/Empty Returne d by Received Kardex by Posted P.S.IFFCO INTERNAL STORE RETURN VOUCHER ISRV Date SIV Date No. P. code department See. Job/work order Vendor Code Exp. S. No.no. e Designatio n 93 .

Posting Issued Kardex b posted y by Designatio n INDIAN FARMERS FERTILISER COOPERATIVE LTD. 1 2 3 4 Qty Code Description Req d. Please use one voucher for max. AONLA UNIT 94 .S. Deptt. Material U. Job/ work order Cost center Exp.M.L . code department S. See.O. MGR(S) P. MGR/Sr. Qty Issued Balance Rs. P.items Preferable same group four Authorised b y Name Receive d b y Hash Total Checked by J.STORE ISSUE VOUCHER CONTRACTOR No.O./ S. no.S.

RR Freight From: DEPT CODE: Truck/Trailer/Wago Date:.& Date ABNL ABB Ltd. DIRECT CONSUMPTION STORE RECEIPT VOUCHER INDIAN FARMERS FERTILISER COOPERATIVE LTD.No. CRR GR/RR No. ITEM CODE DESCRIPTION Unit Qty. Paid DEPT Name n Transporter FARIDABA D S. Value Inspection PO SNo Card balance No Po: Challan: Received: Accepted : Rejected: PO SNo Card balance No Po: Challan: Received: Accepted : Rejected: remarks DIS/REJ No.STORES RECEIPT VOUCHER SRV NUMBER DATE CRR NUMBER SRV PREPARED: PO No. FORM 31 No. Date RECD Date CHALLAN/BIL L No. AONLA UNIT 95 . DIS/REJ No.

DCSRV

SRV NUMBER DATE CRR NUMBER SRV REF:

PO No.& Date Inter unit trans. GR/RR No. Date:, Transporter S.No.

IFPH IFFCO PHULPUR UNIT Freight From: TRK/WGN Paid PHULPUR

CRR Date

RECD Date

CHALLAN/BIL L No. FORM 31 No.

DEPT CODE: DEPT Name Unit Qty. Inspection No Po: Challan: Received: Accepted : Rejected:

Value remarks

PO SNo

DESCRIPTIO N BOLT WITH NUT SIZE M12*165MM LONG PT.NO.BN 12*165(SS304)

Exp. Code DIS/REJ No.

PO SNo

No Po: Challan: Received: Accepted : Rejected: DIS/REJ No. Exp. code

DESPATCH ADVICE

NO: TIN NO: P.O/W.O.NO: AUTHORITY FOR DISPATCH:G M
96

KER ENGG. WORKS RAMPUR BAREILLY ROAD,

C.B.GUNJ. BAREILL Y

S.NO DESCRIPTION QUANTITY REMARKS 1 2RE-69 ROUND RAR(5 NO) 2 3 4 CASE MAR K DIMENSIONS & TOTAL NO PKG NET WT .

UNIT MR FOR MR -DOMR -DOMR -DOPKD.BY PREP. BY DESPATCH THROUGH: DOOR DELIVERY RR/GR NO: GATE PASS: FREIGHT MACHININ G

PKGS

COST: RS. SIV NO: SR. MANAGER STORES THE AFORESAID ITEMS HAVE BEEN RECEIVED IN GOOD ORDER & CONDITIO N COPY TO: 1) CONSIGNEE 4) INDENTOR 2) TRANSPORTER 5) G.M.APP./W.O.FILE 3) CM(F &A)/ INSURANCE . RECEIVER’S SIGNATURE& STAMP

97

REJECTION/DISCREPENCY REPORT

REF: DATED: M/S AB SALES SERVICES 365, HARRIS GANJ KANPUR FAX: CRR NUMBER:

&

SUB: OUR P.O. NO:4410/1294/WS0137//071125 YOUR REF/INVOICE/BILL.CHALLAN 10/SP/TAX/08 NO.

98

material has not been accepted. 2. Make good of shortages. Cost of damage if any_____________________________________________ Payment Terms: yours faithfully. Being excess supply than our order quantity. S. The packing case/s was/were received in sound/broken condition. Dispatch replacement against breakages/unacceptable material. ACTION REQUIRED BY YOU YOU ARE REQUESTED TO:1.No Material Unit QUANTITY Remarks Description Desp. 99 . Please refer to the supply of materials against your invoice/Challan No. On opening the case/s and checking the contents the following discrepencies have been observed.RR/LR DATE: Transpoter: DATE: NUMBER: SOUTH BOMBA Y GR EASTERN 8319469 ROADWAYS Dear Sir. as mentioned above. 2. Received Rejected Excess Short 1. 4. Inform disposal action for breakages/unacceptable material. 3.

IFFCO Township. Bareilly P.O.For INDIAN COOP.No. MANAGER e-Mail: Fax: Phone Through E-proc INDIA N FARMERS FERTILISER COOPERATIVE LIMITED Aonla Unit. Item Code Description Quantity Unit 1 DC Liquid Chlorine 99% pure as per IS code 220 MT 100 . FARMERS FERTILISER Location (STORES) CH. S.LTD. MPR No 080380 TENDER ENQUIRY Enquiry No: 6000/672/UT0044/IE/080308(*) This Enquiry is due on 14/07/2008 Desired Weeks Delivery: 4 INDENTOR’S COPY UTILITIES DEPT Enquiry Type Stage Dear Sir. as per terms and conditions and specification given below and enclosed herewith. with earliest delivery. Single Please submit your Sealed Quotation.

PERFORMANCE BANK GUARANTEE: The seller on award of P.646/1988(latest version) in IFFCO. shall furnish a Performance Bank Guarantee equivalent to 5% of the P. Nehru Order No. Add: 803-4. This bank guarantee shall be issued by any State Bank of India and its associates. value in our Performa enclosed..O. INDIA N FARMERS FERTILISER COOPERATIVE LIMITED PURCHASE ORDER Thru Courier M/s : JASUBHAI ENGINEERING PVT. Your Quot: 101 .O.O. Chiranjiv Towers./W. Nationalised/ Scheduled Commercial Bank/ Cooperative Bank who are members of IFFCO’s consortium of Banks (Except other cooperative and Gramin Banks) having branch in India and be valid to cover the guarantee period with a claim period of further six months.

00% extra Excise Duty : Extra as applicable against documentary evidence present rate is @ 14.No Description Quantity Unit Rate Amount 1 2 Total Value ………………… Price Basis : Ex-Works Ahmadabad P& F Charges : P&F Charges @ 2. Pin: 110019 Our Enq No: Deliver y Dely Pd.place City: New Delhi E-mail: Code: JASU Test Copy Dear Sir.: On freight to pay basis. Consignee: Destination: Please arrange to supply the following as per your quotation referred above to conditions mentioned herein and enclosed subject herewith. S.42% Sales Tax : Extra as applicable against form ‘C’ Freight Condn. 102 .

Ordinary. D. ……….: 080472 Dept-Ref-No.. Single stage Indentor: ADMN SECTION Suggested Vendor Ctegory: Godrej & Boyce Mfg...05 ……….. Last Pos/WOs Ref Nos: Last Pos/WOs total value: 103 . capital. Proprietory. Co.: 2200/2171 Budget Code Sanctioned Amt UtilisedAmt This MPR(Rs.C. Supply.IFFCO-AONLA MATERIAL PURCHASE REQUITION : MPR-NO. Lucknow. MPR Description: Procurement of official furniture for the year-2008 Brief Justification: Office furniture are required for different section/deptt. ………… ………. Class: Stock.) Balance Date: IssueExpected: Dly Date: N*. Domestic.

E ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 104 . AONLA UNIT SAV NUMBER: 089UYW008 DATE : 8/6/2009 STORES ADJUSTMENT VOUCHER ----------------------------------------------------------------------------------------------------------------------------------------------------------FROM T O ----------------------------------------------------------------------------------------------------------------------------------------------------------Sno Stock Code No.unit/ last 3yr consumption INDIAN FARMER FERTILISER COOPERATIVE LTD.No Item Material 1 DC 2 DC 3 DC code decription Unit Quantity required Inventor y levels Value Stk-oth.S.

105 . 4 IFFCO is a co operative organization and selling its product through cooperative channel. There are only to organization IFFCO & KRIBCO. 3 Government ensures the availability of raw material (NG/NAPHTHA) at reasonable price as it has at subsidy on fertilizer is subsidize product. it means not much competition in the channel.SIG N INDENTER MANAGER STORE STORE KEEPER STORE STORE OFFICER SWOT ANALYSIS Strength 1 Fertilizer is the basic raw material for agriculture production. 2 Demand of fertilizer is more in the country than the production capacity therefore whatever is produced will be sold. No Govt. can dare to make policies which are not conducive to the farmers.

3 IFFCO also taken up power project at Chhattisgarh. In case demand fall short in the channel company end up with higher stock inventory . 5 IFFCO is also perusing a multiproduct kisan SEZ at NELLORE in A. 2 Price of the product cannot be raised and government pay the subsidies as per its calculation of fertilizers cost. however NG in liquid from is imported from various Gulf countries and regasified at Petronet in 106 . Threats 1 NG supply in the country is not sufficient to meet present country requirement.operative channel only for sale of its product. thereby enhancing it’s profitability.5 all plants are of latest technology of art and are in healthy condition. 6 IFFCO has also entered into a long term of take and supply agreement with International Holdings of AUSTRALIA for supplying rock phosphate to insure raw material supply NPK/DAP fertilizers plants. IFFCO has taken up energy saving project in all its five ammonia plants at the cost of Rs 410 core. 2 IFFCO can also reduce it’s fixed cost per MT of urea by enchasing it’s production capacity & thereby increase in production and profitability. Weakness 1 As per by law of the company it can fallows the co.P. IFFCO has taken up capacity enhancement project for all its ammonia & urea plants. Opportunity 1 IFFCO can cut on cost by reducing energy consumption for per MT of urea. 4 IFFCO has also contributed 25% equity in Oman India fertilizers company (OMIFCO).

2 Naphtha is also imported Gulf countries. 3 reducing cost by low energy consumption & increasing production to enhance it profitability. This commitment is reflected in many ways. Its rates are not stable in the international market & it availability is also affected by its international demand.GUJRAT to meet demand of fertilizers units. Further IFFCO has made long term agreement for procurement of ROCK phosphate with various countries to overcome it major threats of raw materials for the production of NPK/DAP. It has embarked 107 . Therefore it can be said that IFFCO is on sound footing to protect it stability and enhance it profitability by cutting on cost and increasing production in years to come Strategies 1 IFFCO is doing its best to conserve energy & keeps it consumption at lowest label 2 Enhance its production by enhancing the capacity of the exiting plants & constructing new plants. Supply of ROCK Phosphate is also a threat to the production NPK/DAP. on a day. 5 IFFCO also care for farmer and the community. Analysis With the finding of NG at KG basin of RIL most of requirement of fertilizers units will be meet for the countries on resources and dependability on the import will be reduce there by ensuring the raw material supply to the fertilizer units at reasonable price. 4Ensure supply of raw material by entering into agreement nationally or international with the suppliers. it will be reflected in production of IFFCO. It rate are not stable in the international market. 3 Rock phosphate is also imported to produce NPK/DAP at IFFCO’s Kandla & Paradeep Units.to-day bases. IFFCO believes in the welfare of society. If supplies of NG suffer due to an region.

Kits containing seeds. These projects cover education . Besides. 2001 d) IFFCO has initiated several promotional projects to provide greater opportunities to the farmer by organizing field day. Learning & Recommendation 108 . b) IFFCO has adopted 439 villages. sales point personal tanning. crop seminars. environment & health. special agriculture campaigns to effect transfer of modern farming trends. fertilizers. bio-fertilizes and agrochemicals along with book lets-literature were distribute to the farmers. with special emphasis on agriculture and better for management. c) ITGI in collaboration with IFFCO has introduce for farmer a Sankat Haran Bima yojana . Key Finding. farmers meetings. The aim enhancing crop productivity and thus improving lives This has brought the farmer community nearer to IFFCO & IFFCO product as popular brand which ultimately raised demand IFFCO product. a) IFFCO has installed CDR plants to reduce discharge of flue gases in the atmosphere. This policy has helped over 7000 people since its inception in sep. Under this policy farmer are provided insurance against accident with the purchase of a 50 kilogram bag of IFFCO fertilizer.community development. thus empowering many lives.on many Corporate Social Responsibility(CSR) Project.

Conclusion Therefore it can be said that IFFCO is on sound footing to protect it stability and enhance it profitability by cutting on cost and increasing production in years to come.I had done my project in inventory management & analysis of IFFCO Financial strength by ratio analysis. JORDAN India fertilizer company . OMIFCO at OMAN. Industrial Chimiques DU Senegal (ICS)and Kisan International Trading FZE at Dubai.T. Therefore IFFCO main business is Product & sell fertilizers but it has extends its wings for backward integration& meet the needs of its services Requirement & to serve better to the famer community. It might seem axiomatic that inventory control is efficient as long as inventory level is going down. IFFCO Tokio General insurance. the sales manager and the purchasing manager.. IFFCO Kisan Sanchar L.D. IFFCO has taken Joint Venture out of India i. Further IFFCO has also taken various other venture like SEZ at NELLORE. Power plant at CHASSIGARDH. which calls for a greater concentration of efforts on inventory items accounting for the bulk of usage value. Further . This is desired in view of the financial considerations involved in the problem and also because of need for coordinating different kinds of inventories and conflicting view points of different 109 . ABC analysis based on this empirical reality advocates in essence a selective approach to inventory control.But the fact is that if inventories are minimized without adequate operations. Responsibility for control of inventories is of the top management. Thus.I have also understand the role of F&A departments at unit level.e. the basic objectives of inventory management appear to be conflicting in nature. Inventories should increase or decrease in amount or time as related to sales requirements and production schedules. In most inventories a small proportion of items accounts for a very substantial usage (in terms of monetary value and annual consumption ) and a large proportion of items accounts for a small usage. Though decision in this regard might well be based upon the combined judgement of the production manager. inventories have been mismanaged rather than controlled efficiently.

More effective exercise should be followed of vigilance against imbalance of raw material and work in progress which tends to limit the utility of stocks. There are some points that may be given as recommendation or a program may be constructed for inventory monitoring and controlling which consists of following elements: • • Active disposal of goods that is surplus. To shortening cycle. Decisions relating to inventories should be taken by higher authority of the organisation as well as departments. To strict adherence to production schedule. To maintain the special pricing to dispose off unusually slow moving items. obsolete and unusable.departments. which are available off the shelf. the production • • • To change in design to maximize use of standard parts and components. • • 110 . To make vigorous efforts to expedite completion of unfinished production jobs to get them in to sellable condition.

P K Jain Tata Mc-Graw Hill Publishing Company Ltd.COM 111 . 2. S K Maheshwari Vikas Publishing House Pvt. Ltd 3. Management Accounting Third Edition M Y Khan. WWW. Advanced Accountancy Ninth Edition S N Maheshwari . Financial Management Ninth Edition I M Pandey Vikas Publishing House Pvt. Ltd.IFFCO.BIBLIOGRAPHY 1.

ACCOUNT MANUAL OF IFFCO. AONLA 112 .