Professional Documents
Culture Documents
I also extend my sincere appreciation to Mr. VINOD GOYAL and other staff
members of F&A who provided his valuable suggestions and precious time
in accomplishing my Training Report.
We deem it to a previldge to thank our principal Dr. sachin sachdeva and our
head of department Ms. Bhawana khanna for having given us the opportunity
to do the project which has been a very valuable learning experience.
Lastly, I would like to thank the almighty and my parents for their for their
moral support and my friends with whom I shared my day to day experience
and received lots of suggestions that improved my quality of work.
A Brief introduction to Finance and account department of NFL
Bathinda Unit.
Financial activities are an integral part of every organization. Finances are a
report card of the organization’s performance. To perform such activities in
an efficient and effective manner, every organization needs to follow a proper
hierarchical order management that helps in better performance of the finance
department of the organization. NFL Bathinda’s has a very good hierarchical
order management in the department of finance. The F&A departmental
organization structure is explained with the help of chart below: -
5. PROJECT 6.
INSURANCE
DEPARTMENT 8. BILLS
7. WORKS PAYBLE
12. FE/CIVIL
9. 11. SALES
10. STORES
MISCELLANEOU
S
NFL, a Schedule ‘A’ & a Mini Ratna (Category-1) Company having its
registered Office at New Delhi was incorporated on 23rd August 1974. It
Corporate Office is at NOIDA (U.P). NFL is under the administrative control
of Ministry of Chemicals &Fertilizers, Department of Fertilizers. It has an
authorized capital of `1000 crore and a paid up capital of ` 490.58 crore out of
which Government of India’s share is 90% and 10% is held by financial
institutions & others.
The company has been mandated to revive the closed plants of Fertilizer
Corporation of India Limited (FCIL) at Ramagundam in collaboration with
M/s EIL and M/s FCIL by setting up Ammonia & Urea plants of annual
capacity 7.26 LMT & 12.71 LMT respectively.
Production Performance
The Company has achieved the Urea Production of 37.99 LMT with an overall
capacity utilization of 117.58% during 2020-21 against previous year
production of 37.27 LMT achieved during 2019-20 (CPLY). The Company
has also produced 14071.90 MT of Bentonite Sulphur (BS) during the year
against CPLY of 12807 MT, achieving a growth of around 9.88%.
State of the art safety practices were adopted by contractors during the
project construction and commissioning at Panipat, Bathinda and Nangal Unit
at the time of conversion of feedstock from Fuel-oil to gas. There had been no
reportable accident in any of the plant sites. Panipat Unit has been awarded
“Shreshtha Suraksha Puraskar” for the year 2011 by National Safety. Council
(India) Mumbai,amongst the manufacturing sector of Chemical & Chemical
products and National Level Safety Award for excellence in Safety in
Nitrogenous and Complex Fertilizer
plant ”Runner Up for 2011-12” by FAI.
Silo system for collecting fly ash from ESP hoppers of coal fired boilers
using dense phase pneumatic conveying system has been commissioned at
Nangal in line with systems already in place at Panipat and Bathinda Units.
These systems have reduced the quantity of ash slurry disposal and the
ecological problem associated with its disposal and has helped in saving
electrical energy used for pumping the ash slurry.
Afforestation has been adopted by all units. 79729 trees in and around
various units/ marketing offices were planted in Company’s drive towards
leaving a cleaner and greener earth for future generations.
NFL has also switched over the support fuel in the coal fired boilers at
Panipat, Bathinda & Nangal to natural gas from fuel oil. This has eliminated
use of costly fuel oil besides improving reliability and reducing carbon
footprint.
NFL BATHINDA
National Fertilizers Limited
SALES ACCOUNTING
INTRODUCTION
Manufacturing units
Urea
Bio fertilizers
Industrial Products
As per the instructions of the D&C cell, the despatch instructions (DI)
containing the name of the dealer (dealer defined by the Marketing
department), party code of the dealer, product code, name of the destination,
CRV No., particulars of the amount deposited by the dealer quantity to be
despatched, type of material etc. are prepared by them and sent to the
Transportation department. On the basis of the DI the Transportation
department arranges the Truck and other carriage vehicles for the dispatch of
the goods. Plant supervises the Loading of the fertilizer bags in the truck. At
the time of the dispatch, the Loading statement and gate passes are prepared
by the Transportation department of the actual loading done in the trucks and
rail wagons. The Loading statement is then sent to the Sales Account section,
D&C Cell and the Computer Service Section. Based on the Loading Statement
the invoice for sale is prepared. The truck leaves the premises of the unit based
on the Gate Passes so shown at the Dispatch Gate.
Most of the transactions in this method of dispatch are being done on FOR
basis i.e. the material is sent with all the risk and reward of NFL till the
destination of the dealer. Freight charges are reimbursed from concerned NFL
unit to the truck operators for which separate rates are finalized for different
location and on the presentation of the Proof of Delivery (POD)
along with the bill. In case of Industrial Products, the delivery terms are on
ex-works basis.
The monthly supply plan is devised at CMO in consultation with Zonal offices
based on the production plan of units, ECA allocation, requirement in a
particular state and is got approved from DOF. Based on approved supply
plan, rake planning is done by zonal offices. D&C cell places the rake indents
with Transportation dept. in accordance with the rake plan. If the goods have
to be despatched through Rail then the Transportation department shall indent
the Rake with the Chief Goods Clerk (CGC) of the Indian Railways. On the
arrival of the Rake at the siding, loading shall be done by the Bagging
department. Transportation department checks and verifies whether the
freight charged are as per the tariff and rationalized route has been taken into
consideration.
For each wagon loaded, forwarding Notes are prepared by the Bagging
department which are handed over to the Transportation department who
prepare the Loading statement and the Gate Pass. CGC shall prepare the
Railway Receipt and the freight bill of the same. Both the documents are then
sent to the Sales Account section and to the D&C Cell. The Sales Account
section shall note the details in the Rake Register & DMS data and prepares
monthly debit advices based on the Rake Disposal Statement received from
various area offices.
The Train destination point which is also called as Rake Point, unloading is
done, Loading is done into Trucks and then unloading is done in the
Warehouses which are handled by the Area Incharge of the Area Office under
whose jurisdiction the material has been received.
The Area Office informs the Zonal office (ZO) as well to the Central
Marketing Office (CMO) about the availability of the stocks, order received,
order settled. The total accounting of the stocks is done at the Area Office
level. However on the month end all the debtors are transferred to CMO for
proper monitoring and accounting. Further fixed freight are also paid to the
dealers where the material is being lifted by the dealers themselves.
Fixed freight is paid as per CSS scheme where H&T is done by the dealers.
The outputs of Receipt summary, sale summary and stock ledger is generated
at CMO.
2. Procedure of Dispatch – Bio - Fertilizer
Bio Fertilizers are being dispatched only by road on stock transfer basis. No
direct sales is made from Units. No DIs are issued in this case. Stock transfer
DOs are issued by D&C Cell and Receipt under existing system is being
booked by Stock section of CMO (Finance & Accounts) on the basis of stock
transfer DOs issued by D&C cell and gate passes received along with advice
of Vijaipur Unit.
• Liquid Nitrogen
• Liquid CO2
• Pure CO2
• Hydrogen
• Liquid Oxygen
• Sulphur
• Carbon Slurry
• Nitric Acid 54%
• Nitric Acid 60%
• Ammonium Nitrate(Lumps)
• Ammonium Nitrate(Melt)
• Methanol
• Sodium Nitrate
• Sodium Nitrite
• D.M Water
• Off Grade/waste Methanol
Sale of the IP are done against the advance taken in accordance with the sales
terms settled with the Purchaser. The D&C Cell issues instructions through
Dispatch Instructions to the Transportation department as well as to the
production department. At the time of the despatch, the Loading statement is
prepared by the transportation department of the actual loading done in the
trucks. Based on the DI and Loading Statement, the Gate Pass is prepared and
Excisable Invoice is generated of the same. The Purchasers obtain the delivery
of the industrial products from the respective plants. Subsequent commercial
invoices are also issued to respective dealers.
Invoices are entered in the Sales Day Book product wise. Monthly journal
voucher is prepared for this Sales day book and Debit advice raised to CMO.
However in cases where realization is to be done by CMO through LC/ Bank
Guarantee then a copy of Invoice is also sent to the CMO office on dispatch
of material.
In order to provide all inputs at one door (single window concept) , NFl has
tied up with different manufacturers for the sale of certain items like Seeds,
DAP, NPK, SSP,Pesticide, Organic Manure, Mycorrhiza. However at present
the company is selling the following items to them which are taken on bought
out basis:
• Seeds
• Organic Manure
• Mycorrhiza
The company has adopted two methods for the sale of bought out items. The
Seeds are sold through Back to Back sales system. On the receipt of any order
from any party, purchase order for the similar quantity are placed with the
party for the purchase of goods and sales are affected at the purchase rate. At
the end of the year, commission is paid to NFL by the Seed Manufacturing
company.The other two items of bought out items are sold as a Trading goods.
No entry is passed at the Unit level as no sale are affected by the Units. The
sale has been accounted for by Zonal Office The entries for purchase and sale
of bought out products is passed by Zonal Office level. Receipt under existing
system is being booked by Zonal Finance. The invoices are currently being
issued by Zonal Finance.
As stated earlier, the Urea come under the Essential Commodities Act hence
the rate, the area of sale, the quantity are all restricted and has to be done as
per the approved norms of the Government. Further the Government of India
through Ministry of Agriculture finalises the rate at which the Urea is to be
provided to the farmers. Hence the Maximum Retail Price (MRP) is fixed by
Government of India. Further the Government also prepares and provides a
supply plan so that the detailed mapping is done regarding the period and
places at which the Fertilizer has to be sent by NFL and other manufacturing
companies.
The MRP is always less than the Cost of Production of the Urea. Hence in
order to compensate the company engaged in the manufacture of the Urea, the
Government of India gives Subsidy to the companies engaged in the
manufacture of the Urea. In order to calculate the subsidy the Nominative rate
is calculated which is the sum total of the energy cost to produce per tonne of
urea plus appropriate overheads. The subsidy is the difference between the
Nominative rate and the MRP rate.
Sales tax subsidy on input is also reimbursed by FICC as per notified dates.
In addition to the normal claim, the company is also eligible for the subsidy
on account of through Supplementary Bill.
Warehouse
On raising the Supplementary Bill, the entry similar to the one above are
passed by the Unit At the end of the year based on the actual increase in the
cost of the Production for which data has been given to FICC but the rates are
yet to be approved by the Government, the company to make a provisional
entry as per the accrual system of the accounting for the Subsidy to be realised.
However in case where the subsidy is not received on account of change in
the estimates, appropriate reversal/ enhancement of the Provisional Subsidy
is made in the books of account.
Industrial Products
Bio-Fertilizers
The Company sold 528 MT of Bio-Fertilizers (Solid & Liquid) to the tune of ` 1.83
crore in F.Y. 2020-21 as against 713 MT of 2.05 crore during CPLY.
Import and Sale of Fertilizers
The Company sold 8.56 LMT of imported non-Urea Fertilizers including DAP,
MOP, APS, NPK etc. worth ` 2541.88 crore during2020-21 against 8.67 LMT worth
` 2879.20 crore during 2019-20.
Apart from the above, NFL also sold 10.45 LMT of Urea imported in government
account out of 9.98 LMT received & 0.52 LMT opening balance available at various
ports during 2020-21.
Strengths
- Large player in domestic Urea Production (15% share in total production of
the country).
- A multi-product Company with well established “Kisan” Brand.
- Majority equity held by GoI.
- Pan India distribution and sales network with least marketing cost amongst
Urea players in the Country.
- Three plants located in the most intensive fertilizers consuming States i.e.
Punjab and Haryana.
- Manufacturing Facilities for Industrial Products.
- Well established eco-system for Seed Production & Sale.
- Skilled & Experienced work force.
- Adequate Infrastructure for future expansion/sharing.
Weaknesses
- Low operating margins in Urea due to regulatory environment.
- Increase in working capital requirement after implementation of DBT.
- Bathinda, Nangal and Panipat being old & smaller capacity plants consuming
Higher energy than new & large capacity plants.
- Locational disadvantage of Vijaipur Unit.
- Dependence on subsidy.
- Huge attrition of manpower in next couple of years due to retirement.
Opportunities
Threats
- The management should have to change the way to estimate the data
because the variation between budget and actual is very wide.
- In the recent years the demand for the fertilizers products is rapidly
increasing. even if the market survey has been done properly, it is only valid
for some period and it is hard to estimate for whole year. Assuming the
market changes budget should therefore be revised each and every time there
is a change.
- while look at financial results about employee remuneration expenditure was
observed that the total employee remuneration expenditure was increased.
- The fixed overhead like repair and maintenance, interest charges,
depreciation etc. should be kept in control and should not exceed the
Budgeted Overheads.
- Effective control should be kept on manufacturing fixed and variable cost.