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A

Project Report

On

Achieving Carbon Credit by IFFCO

At

Indian Farmers Fertilizers Co-Operative Limited.(IFFCO).

(Kalol Unit)

Under the Guidance of (in Company)

Mr.D.U.Shah

(Account Manager)

Under the Guidance of (College)

Mrs.Arpita Vaghela

(Faculty)

Institution

Submitted to

Gujarat Technological University - Ahmedabad

Prepared By

Hetal M. Kaswala

MBA 2nd

sem

Seat No.:-13947

Academic year 2009-10

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Company Certificate

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K. K. Parekh Institute of Management Student Amreli

Dr. Jivraj Mehta Vidhya Vihar Campus Lathi road Amreli

Ph: (02792) 223509 fax: (02792) 223509

E-mail: kkpimsa@yahoo.com

Web: kkpimsamreli.com

DIRECTORS RECOMMENDATION

TO,

The Registrar

Gujarat Technological UniversityAhmedabad

Subject: MBA Summer Training Project Report

Respected Sir,

I am recommending the Summer Training Project entitled- AchievingCarbon Credit prepared by Hetal M. Kaswala at Indian Farmer Fertilizer Co-

operative Limited(IFFCO)as the partial fulfillment of the University requirement

for the award of MBA degree of Gujarat Technology UniversityAhmedabad.

Date: - Thanking You,

Place: - Amreli Yours Truly

Director

S T U D E N T D E C L A R A T I O N

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I the undersigned student Hetal M. Kaswala ofK.

K. Parekh Institute of Management Studies Amreli M.B.A. II

Semester, hereby declare that, the project on Achiev ing

Carbon Credit by IFFCOis my own work.

In the partial fulfillment of Master Degree of

Business Administration, I had undergone project work at Indian

Farmers Fert i l izers Co-operat ive Limited (Kalol) under the

guidance of Mrs. Arpita Vaghela K. K. Parekh Institute of

Management Studies Amreli and submitted to Gujarat

Technological University, Ahmedabad.

This project work is my original work and

has not been submitted to any where earlier

I also declare that all the information collected

from the various secondary sources has been duly acknowledged

in this project report.

De: 27/07/2010

Place: Amreli Hetal m. kaswala

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I also declare h all the information collected

from the various secondary sources h been duly acknowledged in

this project report.

PREFACE

Knowledge and human power are synonyms, once said

the great philosopher Francis Bacon. However based on the experience

within todays global markets, he would probably say, The ability to capture,

communicate & leverage knowledge to solve problems is human power. This

raises the question how exactly one can best capture, communicate &leverage knowledge, especially within world of system engineering.

The tryst for knowledge and power led me to two years

M.B.A. degree course as part of this long-term investment. This course not

only enabled me to focus firmly on the current trend but also helped to focus

on future changes.

As a part of this M.B.A. degree, students have toundergo a project, which is designed keeping the prerogative and preferences

of industry in mind. This particular project allows a student to implement what

I have learned within the four walls of classroom. It is here that the caliber of

student is tested to find his flexibility for rigorous tasks assigned to him in

future.

This report that I am submitting intends to highlight my

versatility in sustaining the pulls and pressure of day to day professional life

and put to perspective the facts that I am capable enough to deliver whenever

a challenge is thrown to me.

This report is divided in two parts. The first part gives the

basic information about the project, the industry and the company. The

second part consists of Research Analysis and Conclusion on the basis of

particular Research Process. At the end I have provided a short list of the

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reference books and the sites that provided useful information during the

project.

Date: 27/07/2010

Place: Amreli He. kaswala

Acknowledgement

No endeavor is complete without acknowledging those

who have helped to make this project a success. As such I would like to thank

all those who have helped me to complete this project.

I am obliged with the Gujarat Technological University,

Ahmadabad for granting me the golden opportunity to work as a trainee. I

would also like to express my gratitude to K.K.Parekh Institute of

Management Studies, Amreli.

I, Indebted to Indian Farmers Fertilizers Co-Operative Limited.(IFFCO).

I would also like to thank Mr. Bharat shah(Training Manager)

for his active involvement in my research work, his enthusiasm in reviewing

my research, and for giving me valuable insights. Your patience and support

is greatly appreciated.

This study could not have been successful without thevaluable input of the clients of the Indian Farmers Fertilizers Co-Operative

Limited.(IFFCO).

Date: 27/07/2010

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Place: Amreli Hetal m. kaswala

Executive Summary

The Indian Fertilizer Cooperative Limited (IFFCO)

established in 1967 is the largest chemical fertilizer manufacture in

Asia.IFFCO has established IFFCO foundation in 2003 under Indian Trust Act

as an independent institution in the form of a public Trust. Beside promoting

and strengthening cooperative development, the foundation is expected to

enhance capacities and capabilities of human resource, technical and

business competence of IFFCO constituents and others by being a

development partner with government, national and international agencies

and renowned NGOs and to encourage effective participation of cooperative

in national and international economic, trade, culture and other spheres.

The focus of foundations programmed is on agriculture and

rural development, welfare of farming communities, specially women, income-

generating opportunities for artisans, folk artists, small entrepreneurs, food ,

nutrition and live hood securing and protection of environment and ecology

mainly through the institutions of cooperative and NGOs. The foundation

hereby invites all scholars, scientists, researcher, technicians, planners, field

and social workers to submit their innovative ideas, concepts, projects and

programmers [in English or Hindi]. The details which may be submitted in the

following format will be assessed by a group of specialists and those found

innovative and viable would be taken up for implementation on a pilot

basis:

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I. Project Title

II. Perceived objective

III. Target Group

IV. Plan of Implementation

V. Resources needed

VI. Expected social and economic benefits to the target group

VII. Whether the project was submitted or implemented elsewhere

VIII. 8-10 neatly typed pages with illustration , if any, on A4 size paper,

IX. A 2-page executive summary of the proposal

X. Full name, address, phone numbers, present and past occupations

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Kalol Unit

SERVICE TO FARMERS

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INDEX

Sr.no Particular Page no.

1 Industry profile 3

1.1 Introduction about fertilizers industries 4

2 Company Profile 5

2.1 History of Kalol unit 7

2.2 Eye view of the company 10

2.3 Vision & Mission 12

2.4 Fire & Safety 15

2.5 Organization Structure 16

2.6Company Associations 17

2.7 company Competitors 18

2.8 Board of Directors 19

2.9 Plant Location 20

2.10 Performance Highlights 2009-10 21

2.11 Major Achievement 22

3 Study of four functional area 33

3.1 Marketing Department 34

3.2 Human Resources Department 43

3.3 Production & Operation Department 53

3.4 Finance Department 60

4 Research methodology 67

4.1 Introduction 68

4.2 Define the problem 68

4.3 Objective of the study 71

4.4 Rational of the study 71

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4.5 Limitations of the study 72

4.6 Variables & Hypothesis formulation 72

4.7 Data collection 73

4.8 Data Analysis & interpretation 81

Finding 83

conclusion 84

Bibliography 85

Appendix 86

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Introduction about Fertilizer Industries

In India there are many Fertilizer industries. That means each

number of Industries has a great numbers of competitors. And from that

IFFCO is one of the best Fertilizer industries. It had faced a large problem

during Establishment because of large number of compotators. It has many

branches in India like KALOL, KANDALA, PHULPUR, AONALA, ORISSA.

Almost all fertilizer industries were producing Urea, ammonia, etc..

Name of companies in fertilizer industries are as below:-

Chambal fertilizer and chemicals Ltd. New DelhiNational fertilizer Ltd. Noida

Chemicals fertilizer Ltd. Banglore.

Hindalco Industries Ltd. Mumbai

Indian potashLtd. New Delhi

Indian farmers fertilizer coop.Ltd.

Brahmaputra Valley fertilizer cooperative Ltd. Namrup.

Indo Gulf Fertilizer and chemical Ltd. Vadodara

Deepak fertilizer and petrochemiacals crop. Pune.

Godavari fertilizer & chemicals Ltd. Orissa

GNFC Ltd. Bharuch

Gujarat State fertilizer and chemical LTD. Vadodara

Bio-fertilizers are capable of fixing atmospheric nitrogen when suitable crops

are inoculated with them. Bio-fertilizers are low cost, effective, environmental

friendly and renewable source of plant nutrients and their management is

necessary for maintain soil health for sustainable agriculture. The bacterial

organisms present in the biofertiliser either fix atmospheric nitrogen or

Solubilising insoluble forms of soil phosphate. The range of nitrogen fixed per

ha/year varies from crop to crop; it is 80-85 kg for cowpea, 50-60 kg

groundnut, 60-80 kg for soybean and 50-55 kg for moonbeam...

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BIO FERTILISERS

A Bio fertilizer unit was established at cooperative

Rural Development Trust, Phulpur (Uttar Pradesh) in 1996-97

other at Kalol (Gujarat) in 2003-04 with an annual capacity of 75

MT and 165 MT respectively of different cultures such as

Rhizobium, Azotobacter, PSM, Azospirillium, and Acetobacter

Phosphate Solubilising Micro

Organism: - Several soil bacteria and

fungi posses the ability to bringinsoluble forms by secreting organic

acids. They can be applied to and

recommended for all crops.

Rhizobium: - it is the most important

nitrogen-fixing organism. It lives

symbiotically in the root nodules ofleguminous plants through nitrogen to

the crop; nitrogen fixed by legume-

Rhizobium association would also

leave residual nitrogen for the

succeeding crops. The beneficiary

crops are groundnut, soybean, Red

gram, green gram, and black gram,

Lentil, Cowpea, Bengal-gram, and

Fodder legumes.

Azotobacter: - It is non-symbiotic

nitrogen fixing bacteria recommended

for non-leguminous crops like paddy,

Wheat, Millets, Cotton, Tomato,

Cabbage, Mustard, Safflower, and

Sunflower. The Azotobacter performs

well if the soil organic matter content

is high..

Acetobacter: - It is a

symbiotic bacterium capable of fixing

atmospheric nitrogen by living within

the sugar plant. They are found in all

parts of plant of plant body. It is

suitable for sugarcane cultivation.

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History of Kalol unit

Indian Farmers fertilizer Cooperative Ltd. Was established on

3rd November, 1967 under multi state co-operative society Registration act.

But at Kalol & Kandala it established in the year 1972.

Kalol unit - the oldest unit of IFFCO is located at 26 km from

Ahmadabad on the Ahmadabad Mehasana highway. The Unit started

commercial production in April, 1975 in an area covering 96 hectares. The

original project cost that was spends is RS. 71.23 Corers and project cost for

the expansion of KEP was RS. 149.71 Corers. That is its Industry License No.

L/18(1)/1. its Annual license capacity of Urea plant (tpa); 396.000(Original

plant),544.500 (with Expansion).Its D.G.T.D. factory No.DW-302001.On 23-

06-1972 they started a construction work at Kalol. Mechanical completion of

Ammonia is on 15-03-1974 and of Urea on 15-10-1974. Commercial

Production of both Ammonia and Urea is started on the same date that is 31-

03-1975. Production of Dry Ice on March 1978. And production of Liquid CO2

is on 01-04-1998. Dedication of Kalol plant by the then prime Minister Late

Smt. Indira Gandhi is on 08-11-1974.

The unit consists of plants to produce 910 t/d ammonia based

on MW Kellogg USA natural gas steam reforming process and 1200 t/d urea

based on Stamicarbons CO2

stripping process. Urea feed stocks i.e.

ammonia and CO2

are supplied from ammonia plant. Capacity of ammonia

plant at IFFCO Kalol was updated from 910 tpd to 1100 tpd in August, 1997

with installation of Pre-reformer unit using naphtha as feed stock. R-LNG

which is the main feedstock is presently supplied by GSPCL. The fuels natural

gas (NG) and associated gas (AG) are supplied by ONGC/GAIL from nearby

gas wells and LSHS & Naphtha are from ONGC. Water is supplied by GIDC

from 15 bore wells around the Unit. The unit also has plants to produce 6 tpd

Dry Ice and 12 tpd Liquid CO2along with necessary offsite facilities.

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And also commercial production of KEP is on 31-08-1997. on 02-08-1998

there was a dedication of KEP to farmers by Shri L.K.Advani,the then Union

Home Minister of India.

Till mid sixties cooperative in India had no production facility despite

marketing nearly 70% of fertilizers.

IFFCO was established as the farmers own initiative in cooperative

sector on 3rd Nov. 1967 with the proposed plants at Kalol & Kandala.

With the enactment of multi State co-operative society Act 2002, the

society is deemed to be registered as a Multi State co-operative

society. The society is fully owned by Cooperatives...

On 12-09-2003 zero date of Energy Saving Project ( ESP) was started. And in

that part-1 of that ESP work is completed on Sept. 2005, and part-2 is going

on. Commitment to Better Environment & Quality Management and

information about some certificate of IFFCO Kalol unit is below:-

ISO-9002 Certification of Approval by BVQI 10-08-1996

ISO-9002 Re-Certification 07-08-1999

ISO-14001 Certificate of Approval by BVQI 20-09-2000

ISO-14001 Certificate of Approval for Township-(Kasturinagar) by

BVQI

26-05-2001

ISO-9001: 2000 Re-Certificate 14-08-2002

ISO-14001 Recertification for factory 09-10-2003

ISO-14001 Recertification for Township-(Kasturinagar) 13-07-2004

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Eye View of the com pany

IFFCO Kalol Unit

Gandhingar

Product / Service Fertilizer (Urea)

Company Profile Fertilizer Company

Establishment Year 1973

Firm type Organization

Nature of Business Manufacture

Level To Expand National

Contact Information

Web site Visit Web Site

Contact person A M KANCHANI

Designation MANAGER (MECH.)

Phone (office) 079-23282338

Phone (Resi.) 079-27643471

Mobile 09898505554

Fax 079-23286021

Address Po..Kasturinagar

Dist. GandhingarNorth Gujarat (India)

State Gujarat, Inia

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State Capital Gandhi Nagar, is about 18 Km from the plant site.

Distance from New

Delhi

912 Km

Distance from Mumbai 514 Km

Nearest Airport Ahemdabad (About 25 Km. away from Plant)

Railway Station Kalol (7 Km from the plant)

Road Ahemdabad (25 Km from the plant)

On Ahmedabad-Mehsana State Highway (SH)

Area under Plant 96 Hectares

Area under Township 22 Hectares

Temperature ( o C ) 45 (Maximum) in summer to 4 (Minimum) in winter.

Rainfall (mm) 742

Longitude 72-31-40

Latitude 23-12-3

Address Indian Farmers Fertilizer Cooperative Limited

KALOL,

(P.O.) Kasturi Nagar,

Gandhi Nagar, PIN 382423

(Gujarat), INDIA.

Phones 91-2764-223256,91-2764-223258,91-2764-223272,

91-2764-223273, 91-2764-220202, 91-2764-220209,

91-2764-221056, 91-2764-221165, 91-2764-220604

FAX : 91-79-23286020/21/22/23/24

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VISION 2010

To augment the incremental incomes of farmers by helping

them to increase their crop productivity through balanced use of energy

efficient fertilizers; maintain the environmental health; and to make

cooperative societies economically and democratically strong for

professionalized services to the farming community to ensure an empowered

rural India.

VISION 2015

IFFCO successfully implemented its earlier Corporate Plans

namely VISION 2000, MISSION 2005 and VISION 2010 which resulted

into becoming one of the largest producer and marketer of Chemical

Fertilizers by expansion of IFFCOs existing units, setting up joint venture

companies overseas and diversification into new sectors. IFFCO has now

visualized a comprehensive Plan entitled VISION-2015having objectives of :-

Production of fertilizers through expansion of existing units

Setting up of additional fertilizer production facilities in India and

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Abroad through joint ventures

Diversification into other profitable sectors

strengthening raw material sourcing through Strategic joint ventures

Formulation of Strategic Alliances through IFFCO consortium

TARGETS UNDER VISION - 2015

Area of Operation Projected Target

Production of fertilizers 15 Million Tonne

Sale of Fertilizers 15 Million Tonne

Turnover USD 6500 Million

Net worth USD 1700 Million

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Major salient features of Vision-2015

Become Global Leader in Fertilizers Production to cater to Food

Security needs of the Nation.

Maximize synergies of core business through downstream value

additions and Forward/Backward integration.

Enhance presence in International markets through strategic joint

ventures and Synergistic Acquisitions.

Promote Integrated Nutrient Management to improve efficiency of

fertilizer use and to promote location specific research an efficient

fertilizer practices.

Bring sustainability and strategies to prevent climate changes by

reducing Energy consumption, Improving Resources management and

promoting Renewable Energy sources.

Help Cooperative Societies to become economically strong,

professionally managed and to equip Farming community with

advanced agricultural practices for improved productivity to ensure

empowered Rural India.

Achieve Fertilizers Production/Marketing target of 15 million Tonne per

annum with an annual turnover of Rs. 30,000 crore.

MISSION

To provide to farmers high quality fertilizers in right time and in

adequate quantities with an objective to increase crop productivity.

To make plants energy efficient and continually review various

schemes to conserve energy.

Commitment to health, safety, environment and forestry development

to enrich the quality of community life.

Commitment to social responsibilities for a strong social fabric.

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To institutionalize core values and create a culture of team building,

empowerment and innovation which would help in incremental growth

of employees and enable achievement of strategic objectives.

Foster a culture of trust, openness and mutual concern to make

working a stimulating and challenging experience for stakeholders.

Building a value driven organization with an improved and responsive

customer focus. A true commitment to transparency, accountability and

integrity in principle and practice.

To acquire, assimilate and adopt reliable, efficient and cost effective

technologies.

Sourcing raw materials for production of phosphates fertilizers at

economical cost by entering into Joint Ventures outside India.

To ensure growth in core and non-core sectors.

A true cooperative society committed for fostering cooperative

movement in the country. Emerging as dynamic organization, focusing

on strategic strengths, seizing opportunities for generating and building

upon past success, enhancing earnings to maximize the shareholders

value.

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Fire & Safety

Fire in industry causes colossal losses every year over the world, in

developed countries, such losses are quite high. Such losses are in form of

destruction of raw material, finished product, plant equipment, and less of

lives. Business these high potentials, the industrial fire losses are causing

serious set back to individual business, loss of national wealth and a very

serious set back to the development planning of a country. Fire is oxidation of

burning MIT in the presence of O2.

Causes of Fire:

Electrical equipment

Smoking

Friction

Foreign object or tramp material

Open flames

Heaters (gas & oil fined), air heaters cause fire.Overtaking

Failure to provide substantial space shield

Failure to provide a secure base

Torches

Welding and cutting

Spontaneous ignition

Poor house keeping

Explosive atmosphere

Fire Prevention:

Detailed guidelines and are of practices are available on this topic.

However to reduce the losses to both life and properties study of the following

aspect during planning stage is necessary.

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Proper spacing, layout of buildings, plant, warehouses, storage

facilities etc.

Proper road approaches, which would adequate access to emergency

vehicles.Proper process design which would take care of temperature and

pressure controls, effective cooling system provision of relief values,

automatic purging with inert gases etc.

Proper process equipment, which can bear stress and strain under

varied process condition and an atmospheric condition.

Providing adequate fire resistance to all elements of structure in

consideration to the fire load.

Providing effective fire detection system.

The above mentioned measure not only helps in keeping the losses to the

minimum but reduce the possibility of major fire accidents of catastrophes.

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Organization Structure

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IFFCO Associates

IFFCO-Tokio General Insurance Company Ltd.

Oman India Fertiliser Company S.A.O.C.

Jordan India Fertiliser Company L.L.C

IFFCO Chhattisgarh Power Ltd.

IFFCO Kisan Sanchar Ltd.

IFFCO Kisan SEZ Ltd.

Industries Chimiques Du Senegal

Kisan International Trading, FZE

National Commodity & Derivatives Exchange Ltd.

National Collateral Management Services Ltd.

Indian Potash Limited.

IFFCO Kisan Bazar Ltd.

Indian Farm Forestry Development Cooperative Ltd.

IFFCO Foundation

Cooperative Rural Development Trust

IFFCO Kisan Sewa TRUST

GrowMax Agri Corp.

Aria Chemicals (Orissa) Ltd.

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COMPETITORS

IFFCO has a very large number of competitors in India. Some name of

there competitors are as below..:-

Chambal fertilizer and chemicals Ltd. New Delhi

National fertilizer Ltd. Noida

Chemicals fertilizer Ltd. Banglore.

Hindalco Industries Ltd. Mumbai

Indian potashLtd. New Delhi

Indian farmers fertilizer coop.Ltd.Brahmaputra Valley fertilizer cooperative Ltd. Namrup.

Indo Gulf Fertilizer and chemical Ltd. Vadodara

Deepak fertilizer and petrochemiacals crop. Pune.

Godavari fertilizer & chemicals Ltd. Orissa

GNFC Ltd. Bharuch

Gujarat State fertilizer and chemical LTD. Vadodara

Shriam Fertilizer & Chemicals, New Delhi.

Rashtriya fertilizer & Chemicals Ltd. Mumbai.

MMTC Ltd. Mumbai..

Tata Chemicals Ltd. Mumbai.

Paradeep Phosphates Ltd. Bhuneswar

Madras Fertiliser Ltd. Chennai.

Fertilisers & Chemicals Travancore Ltd. Hyderabad.

Rama Phosphates Ltd. Mumbai

Coromandel Fertiliser Ltd. Secunderabad

Krishak Bharati Cooperative Ltd. Noida

Dharmsi Morarji Chemicals Company Ltd. Mumbai

Nagarjuna fertilizer & Chemicals, Ltd Hyderabad

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BOARD OF DIRECTOR

Chairman Vice-Chairman

Surinder Kumar Jakhar N.P. Patel

Managing Director Marketing Director

Dr.U.S.Awasthi Arabinda Roy

Directors

Prem Chandra Munshi R.K. Meena

Raj Kumar Tripathi K. Srinivasa Gowda

Tryambakrao G. Sirsath Harminder Singh Jassi

Dr. B.S. Vishwanathan Simachal Padhy

Vithalbhai H. Radadia Ankushrao R. Tope

Pramod Kumar Singh Ravindra Pratap Singh

Kartick Chandra Sarkar Ramakant Bhargava

Ram Chandra Singh Pradhan Balvinder Singh Nakai

Sheesh Pal Singh Umesh Tripathi

A.Praveen Reddy G.M.Dhanajaya

Anil Malik Ramakant Bhargaya

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Registered Office

IFFCO Sadan,C-1,

District Centre

Saket Place,

New Delhi-110017

Bankers

Indian Overseas Bank

State Bank of India

Bank of Baroda

Standard Chartered Bank

The Maharashtra State Cooperative Bank Ltd.

The West Bengal State Cooperative Bank Ltd.

Madhya Pradesh State Cooperative Bank Ltd

The Karnataka State Cooperative Bank Ltd.

The Punjab State Cooperative Bank Ltd.

The Hongkong and Shanghai Banking Cooperation Ltd.

ICICI Bank Ltd.

IDBI Bank Ltd.

HDFC Bank Ltd.

Punjab National Bank.

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Auditors

M/S. S.K. Mehta & Co.,

Charteded Accountants

2682, Gai No. 2, Beadan Pura

Ajmal Khan Road Market

Karol Bagh New Delhi 110005

M/S, S.C. Vasudeva & Co.,

Chartered Accounts

B-41, Panchasheel EnclaveNew Delhi 110017

M/S. Arun Singh & Co.,

Chartered Accounts

F-7, Lajpat Nagar 3

New Delhi 110024

M/S. J.C. Bhalla & Co.,

Chartered Accountants

B-5, Sector-6

NOIDA 201301

M/S. Rajnish Associates

Chartered Accounts

92 & 87, Defence Colony Flyover Market

New Delhi 110024

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Companys main units across the countryKalol Unit:-

Ammonia-Urea Complex commissioned in 1975

Production Capacity

Ammonia - 0.36 million TPA

Urea - 0.55 million TPA

Paradeep Unit:-

DAP/NPK: 2 Million Tons/Year

Sulphuric Acid: 7000 TPD

Phosphoric Acid: 2650 TPD

Kandala Unit:-

NPK/DAP Complex commissioned in 1975

Production CapacityNPK/DAP: 2.42 million MTPA

In P2O5 terms: 0.910 million MTPA

Anola Unit:-Ammonia-Urea Complex commissioned in 1988

Re-assessed Production Capacity

Ammonia - 1.003 million TPA

Urea - 1.730 million TPA

Phulpur Unit:-

Ammonia-Urea Complex commissioned in 1981

Re-assessed Production Capacity

Ammonia - 0.824 million TPA

Urea - 1.416 million TPA

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Directors Report

Dear Cooperators,

With immense sense of pride and satisfaction, I place

before you the 42nd Annual Report of your society for year 2009-10. This has

been surpassed and new milestones created, the society has won several

prestigious awards. I, therefore, feel honored to be a part of this illustrious

organization and present before you its performance and accounts for 2009-

10.

As you all are awere,the Nutrient based subsidy

scheme, for phosphate and Potosi fertilizers, was recently introduced by the

Govt. of India. And made effective from April1, 2010. This decision of the

Govt. will encourage balanced nutrients usage, improved soil conditions,

higher productivity and introduction of increased formulation of crop specific

and nutrient fortified fertilizer. This will make the Indian fertilizer industries

strong and resist to cope with Global challenges lead to providing direct

subsidy to farmers.

It is matter of great honors that the chairman of your

society has been elected for the second time on the global board of

international cooperative alliance(ICA). Further , your society has received

the Dot Coop Global Award for Cooperative Excellence in recognitions of its

efforts for providing services to its cooperative members.

Friends, in the year 2009-10 your society has shown

commendable performance in all the spheres of its function, surpassing itsown previous best record in the areas of production, sales, transportation,

specific energy consumption and over all performance.

With the commitment and dedication of over

professional team, It is certain that your society will continue to strive harder

to surpass its own records in order to emerge as a Global Leader in the

Production and marketing of fertilizers with out compromising on the motto of

Service To Farmers.. On behalf of all the members, I take this opportunity to

Congratulate Dr.Awasthi and his entire team for their exemplary performance.

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Auditors Report

We have audited the Attachmate balance sheet of

Indian Farmers Fertilizer Cooperative Ltd.(Multi state Cooperative society) as

at 31st march 2010 and Profit & loss A/C for the year ended on that date

Annexed thereto and cash flow statement for the year on the date. These

Financial Statement are the responsibility of the societys management. Our

responsibility is to express and opinion on this Financial Statements based on

our audit.

We conducted our audit in accordance with auditing

standards generally accepted in India. Those standards require that we plan

and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement, of thstatement. An

audit includes examining, on a test basis, evidence supporting the amounts

and disclosures in the financial statements. An audit also includes assessing

the accounting principals used and significant estimates made by the

Management, as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable basis for our

opinion.

We report that:

(A) We have obtained all the information and explanations, which to the

best of our knowledge and belief were necessary for the purposes of

our audit.

(B) In our opinion, proper books of account as specified in the Multi State

Cooperative Societies Rules, 2002 have been kept by the Society so

far as appears from our examination of the books and proper returns

adequate for the purpose of our audit have been received from

adequate for the purpose of our audit have been received from the

branches not visited by us.

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(C) The accounts of the Muscat Branch at Oman, Which have been

audited by the auditors other than the societys auditors and the

financial statement as received from the Muscat Branch have been

incorporated in the financial statements as audited by us, in

accordance with the accounting policies of the society.

(D) The financial statements i.e the ?Balance sheet, Profit & Loss

Account and Cash Flow Statement dealt with by this report are in

agreement with the books of account after considering the audited

financial Statement received from Foreign Branch of the Society.

(E) In our opinion and to the best of our information and according to the

explanations given to us and as shown by the books of account of the

society, the said accounts. Read together with Notes given in schedule

20 and Significant Accounting policies, forming part of the Accounts,

give a true and fair view in conformity with the accounting principles

generally accepted in India:

I. In the case of Balance sheet, of the state of affairs of the society

as at 31st March, 2010.

II. In the case of profit & loss Account, of the Profit of the society for

the year ended on that date: and

III. In the case of cash flow Statements, of the cash Flow of the

Society for the year ended on the date

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PERFORMANCE HIGHLIGHTS OF 2009-10

Highest Production of Fertilizers 81.98 lakh MT

(Previous Best 71.68 lakh MT in 2008-09)

Highest Production of Urea 43.24 lakh MT

(Previous Best 40.68 lakh MT in 2008-09)

Highest Production of NP/NPK/DAP 38.74 lakh MT

(Previous Best 32.26 lakh MT in 2006-07)

Highest Sales of Fertilizers 118.27 lakh MT

(Previous Best 112.58 lakh MT in 08- 09)

Highest Sale of Urea 63.35 lakh MT

(Previous Best 58.69 lakh MT in 2008-09)

Highest Sales of NP/NPK/DAP 54.92 lakh MT

(Previous Best 53.89 lakh MT in 2008-09)

Profit before Tax Rs 567.28 Crore

(Best PBT Rs. 807.09 crore in 2002-03)

Profit after Tax Rs. 401.10 Crore

(Best PAT Rs. 557.2 crore in 2002-03)

Total Turnover Rs. 16809 Crore

(Previous Best Rs 32,933 crore in 08-09)

Plant Productivity 1608 MT/Employee

(Best 1669 MT/Employee in 2005-06)

Highest Marketing Productivity 7885 MT/Employee

( Best 7397 MT/Employee in 08-09)

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Major Awards Received

Prestigious Economic Times Acer and Intel Smart Workplace Award in

the Manufacturing and Industrial Segment

Best Content Service as well as the Best Project Management in

respect of IFFCO Kisan Sanchar Limited (IKSL) at the World

Communications Award held at London

Institute of Chartered Accountants of India (ICAI) Award for Excellence

in Financial Reporting for IFFCOs Annual report and accounts for the

year 2007-08

Best cooperative Society Award from Public relations Society of India(PRSI) at its Golden Jubilee Ceremony in Mauritius

IFFCO has been ranked 1st in Sales Turnover and 2nd in terms of Net

worth and Profitability amongst unlisted enterprises by Economic Time

Intelligence Group for the year 2007-08

IFFCO has also got Prestigious CIO 100 Award by International Data

group (IDGI India) the worlds leading Technology Media Event and

Research Group

Best managed Workforce Award for the year 2004 from Hewitt

Associates and CNBC TV-18

Two Awards for Highly Commendable Accounts

National HRD Award from National HRD Network for outstanding

contribution in HR Development

IFFCO Annual Report bagged the third prize , instituted by Public

Relation Society of India (PRSI)

FAI Golden Jubilee Award on Transfer of improved Farm

Technology

1st prize for Best Corporate Film from NCUI

There awards for Best Display in FAI Exhibitions

IFFCO Corporate film was adjudged the best by Public Relation

Society of India (PRSI)

IFFCO has bagged FAI Best Video Film Award 2006-07 for film on

WaterHarvesting

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Kalol Unit

Name of Awards

National Energy Conservation Award

FAI Award for Best Overall Performance &

Technical Innovation

Productivity Council Award

Indo-German Greentech Environment

National Safety Council Award

Gujarat State Safety Council Award

Gujarat Horticultural Awards

Vishwakarma Rashtriya Puraskar

Times

3

8

1

1

8

20

6

2

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Commitment to Better Environment & Quality

Management

All IFFCO Units and townships have attractive landscape

surrounded by thousands of trees.

IFFCO is committed to improve safety, health and

environment in and around our plants in line with

international norms.

Kalol, Phulpur, Aonla and Kandla Units hold ISO-14001

Certificate for Environment Management System.

Kalol, Phulpur and Aonla Units have received ISO-9001 for

Quality Management.

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HumanResource

Department

FinanceDepartment

Production&Operation

Department

Marketing

Department

Study forFunctional

Area

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MARKETING

Introduction:

Marketing is both buying and selling activities

Marketing starts before the production and it also works after the sale of the

product. Marketing in this competitive world plays a very important role

because without it no one can imagine or predict about the product demand

and its supply for managing business activities very perfectly and for attaining

the organizational goal marketing is very important. Marketing department of

any organization plays a very crucial role and it requires highly skilled and

extra ordinary mind.

Men have unlimited and repetitive wants in nature. To satisfy these

wants products are to be produced and exchanged. When the word

Exchange comes, the word Marketing automatically comes into the point.

Exchange is the most important and powerful function in marketing. Marketing

may be explained as a business function entrusted with creation and

satisfaction of customers to achieve the aim of business.

For managerial definition, marketing has often been described as,

The Art of selling products. But People are surprised when they hear that

the important part of marketing is not selling! Selling is only the tip of

marketing iceberg. Peter Drucker, a leading management theorist, puts it this

way:

There will always, one can assume, be need for some selling. But

the aim of marketing is to make selling superfluous. The aim of

Marketing is to know and understand the customer so well that the

product or service fits him and sells itself. Ideally, marketing should

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result in a customer who is ready to buy. All that should be needed them

is to make the product or service available.

IFFCOs Marketing set up at present comprises 5 zonal offices, 17

state marketing offices and 62 area offices. Each area office covers four of

five districts. Each area has eight to ten field officer attached to it. They are

posted at district and taluka level towns. At present, there are about 463 field

officers. The total numbers of personnel in marketing division are 1749.

MARKETING MIX OF IFFCO

Whenmarketing their products firms need to create a successful mix of:

Product:

Marketing starts before the production it plans for the future requirement and

according to that the communication with the supplier is made and order

placed for the production, and with the help of supply chain receiving &

inspection of raw material is done.

PROCESSPEOPLE

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The main supplier of IFFCO Kandla unit are outside India and for placing of

an order and getting the delivery of raw material it requires more time so, H.O.

of IFFCO taking information from its marketing department regarding the

future requirements of the product and according to the information they place

the order and communicate with the supplier.

Price:-

Price is also one of the factor which plays important role in the profitability of

the company In IFFCO the product selling price is decided by the central

government and the difference between the total cost of production and

selling price is paid by the government in the form of the subsidy.

The selling price of the IFFCO Kandla plants products are (per tonne Rs.)

NPK GradeI (10:26:26) 15,048

Grade-II (12:32:16) 15,086

DAP (18:46:00) 17,237

MAP 9,350

Place:-

In IFFCO the final product is transported through railway and by road.

The total transportation of IFFCO is made by

Railway 88%

Road 12%

Promotion:-

Fertilizer promotion is one of the important components in

fertilizer marketing. The objective is to create awareness about fertilizer and

provide technical information o improved agricultural practices and fertilizer

use so as to increase productivity and fertilizer use efficiency.

IFFCO has adopted a policy of multimedia oriented publicity

strategy to popularize its products and services among the farming

community. Outdoor publicity tools including wall paintings, posters, technical

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MarketingCentralOffice

North

Central

Zone

North Zone

Chandigarh

South Zone

Banglore

PUN,HAR,

RAJ,J&K,HP

AP,TN,

KAR,KERALA

East Zone

Kalkota

West Zone

Bhopal

GUJ,MP,

MAH,

CHATGARH

ASSAM,

ORISSA,W.B.

UP.Bihar

JharkhanUttaranchal

literature, bus panels, and participation in fairs and exhibitions carrying the

message of IFFCO were also adopted.

Some promotional activities of IFFCO are as follow:

Advertisement in doordarshan, media and press.

Fairs and exhibitions.

Technical lecture.

Hoarding and road side Sign Boards.

Crop films.

MARKETING CHANNELS

Distribution of fertilizers mainly through the Cooperative System

State level Apex Cooperative Marketing Federation acts as wholesaler

Direct supplies to Societies in some States

IFFCO-NCDC Cooperative Society

Small quantities to institutional agencies like Agro Industries

Corporation etc

158 IFFCO Farmers Service Centers

MARKETING TERRITORIES OF IFFCO

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DISTRIBUTION &

WAREHOUSING

Distribution Network

IFFCO distributes its fertilizers in 29 States/UTs in the country through the

cooperative system. Cooperative structure differs from State to State, and

societies at each level (district/taluka/village) perform different functions in

different States. IFFCOs fertilizers are sold through a network of more than

39,500 cooperative societies in different States. Nearly 62 per cent of the

material was sold directly to the Societies whereas 29 per cent was routed

through Federations.

As a matter of policy, IFFCO is canalizing its entire fertilizer production and

imports through cooperative network. In case, the Cooperatives are not able

to absorb the quantities offered by IFFCO, other institutional channels are

utilized for distribution. The fertilizers are also sold through Farmers Service

Centers run by IFFCO.

TRANSPORTATION

Both by Rail (90%) and Road (10%)

WAREHOUSING

Federations & Cooperative GodownsCentral Warehousing Corporation (CWC) and

State Warehousing Corporation (SWC)

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Farmers Service Centers

IFFCO operates its own 158 Farmers Service Centers (FSCs) spread over 10

States. Apart from supply of fertilizers, seeds, agro-chemicals etc. under one

roof, these Centers also serve as the contact point for providing technical

know-how to the farmers. FSCs also organized need based promotional

programmes such as farmers meetings, soil test campaigns and

demonstrations etc. in the villages around FSCs with a view to disseminate

the message of balanced and efficient use of fertilizers. Literature on packageof good practices for various crops, balanced use of fertilizers, soil testing etc.

was distributed to the farmers in local languages through these FSCs.

Product Channels:

As matter of policy, IFFCO is channelising its entire fertilizer production and

imports through the cooperative network in case cooperatives are not able to

absorb the quantities offered by the IFFCO, others institutional channels areinvolved. Small quantity is also sold through 158 farmer service centre owned

and operative by IFFCO.

Cooperative societies:

IFFCO sale its fertilizers through a network of more than 38,155

cooperative societies in different states of its

marketing territory. These

societies are well scattered, covering almost all the villages in the

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country and are the backbone of the cooperative systems. Nearly

62% of the societies are getting fertilizers directly from the IFFCO

where as 29% are getting through state federations.

Public relation & Publicity:

In the era of globalization, IFFCO adopted an effective multi-pronged publicity

strategy to further popularize its products and services among farming

community. Outdoor publicity tools like wall paintings, posters, tractor trolley

paintings, bus panels, technical literature conveying IFFCOs message were

extensively deployed to project the image of the organization. A new look has

been given to IFFCOs Farmers Services Centres.

IFFCO participated in various exhibitions/fairs all over the country by putting

up attractive and impressive stalls, which brought laurels to the society. The

society received wide, elaborate and exclusive coverage in print and

electronic media, all India radio, Doordarshan and other channels.

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IFFCOs annual calendar for the year 2008, which is dedicated to the 150 th

year of 1st

freedom struggle of India, received wide appreciation. House

journal IFFCO NEWS, which is a forum for sharing news, views and ideas

focusing on employees contribution/participation in the societys activities and

future plans, also received wide appreciation.

IFFCOs corporate film has bagged best documentary film award instituted by

National Cooperative Union of India.

Sale of Fertilizer Material

(Lakh MT)

Material 2009-10 2008-09

UREA -Own 43.22 40.71

-Imported 20.13 17.98

SUB TOTAL 63.35 58.69

NP/NPK 27.94* 24.47

DAP/MAP -Own 11.14** 6.88

-Imported 15.84 22.58

SUB TOTAL 26.98 29.42

TOTAL(NPK/DAP) 54.92 53.89

TOTAL(UREA+NP/NPK+DAP) 118.27 112.58

*Includes sales of 174.0 MT Imported NPK 19:19:19, 100% water soluble

fertilizer

**Includes sales of 385.6 MT of Urea Phosphate (17:44:00), 100% water

soluble fertilizer produced at Kandla Unit.

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Sales performance

During the year, IFFCO achieved the Highest-ever Sales of

118.27 Lakh tones of fertilizer material compared to the previous years

recorded sale of 112.58 Lakh Tonne, representing an increase of about 5%.

Higher sales could be achieved primarily due to effective planning, proper

logistics management combined with timely supply and distribution, and

intensive marketing strategy adopted by the society at all levels. Urea sales

during 2009-10 were 63.35 Lakh Tonne as compared to 58.69 Lakh tones

achieved during 2008-09, representing an increase of 7.9%. NP/NPK/DAP

sales during 2009-10 were slightly higher by about 1.9% at 54.92 Lakh tones

as against 53.89 Lakh tones in 2008-09.

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What is Human Resource???

With a view to create an ambience of excellence in every sphere

of organizational activities and enable employees to realize their potential to

the fullest sharpening of skill and harnessing of expertise, a number of

initiatives have been taken up during the year. The key people challenges

related to skill sets were identified as work force productivity, employee

engagement and driving performance across all levels. A series of structural

training modules customized to the need of the society have been embarked

during the year. The thrust has been on functional and managerial

programmers for middle and senior management to hone the Leadership

skills of managers.

An Employee Engagement Survey was conducted by the

society to know the perception of employee towards their organization. The

overall score was encouraging. Which indicated that 87% employee are highly

engaged and satisfied.

In order to bring performance orientation among the

employees, the society has laid the groundwork for introducing robust

performance management mechanism, which will be based on key

responsibility, key performance areas and key performance indicators, values,

managerial and cross-functional competencies as well as potential

competencies.

Industrial Relation

The directors wish to place on record their appreciation for the

contribution made by the employees at all levels in ensuring un interrupted

high level of performance in production, dispatch and marketing of fertilizer.

During the year also, as in the past, industrial relations remained extremely

cordial and harmonious, with the result the societys growth remain extremely

good. It is ameter of pride that various joint ventures and subsidiaries have

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come into existence and progressing with the corporation of the employees.

The productivity at the plant level has increased from 1376 MT to 1608 MT

and the sales of fertilizer from 7397 MT to 7885 MT per head in comparison to

the last year 2008-09.

Industrial safety

Your society continuous to accord the highest the priority to

industrial safety. Training and education is continuously imparted to all

concerned to create and enhance safety awareness.

Facilities provided for employees

Safety Shower and Eye Weather

Tagging System

Public address system

Internet system

Walky-talky system

Colony facilities

Education to child of employees

Club & swimming facilities

Medical facilities

Canteen facilities

Performance appraisal

Awards & promotion

Take feedback

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Guest

House

Hindi

Public

Relation

Estate

Welfare Admin.

Personnel

Legal

Security

Medical

Time

Office

P & A

P & A Department:

ABSENTEEISM:-

Absenteeism is the total man shift lost because of absences as

a percentage of the total number of man shift schedule to work.

Absenteeism is a serious problem for a management because

involves heavy additional expenses. Reserve studies one kept in

readiness to take place of the Absenteeism, failing which overload cost

of idle equipment has to be faced.

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REASONS FOR ABSENTEEISM:-

Various studies on the micro level in India have been

undertaken to find out the cause which have contribution to a high

percentage of Absenteeism IFFCO the Absenteeism ratio is hardly 5%

the reason for such Absenteeism are stated as under

Reason for absenteeism

In-plant causes

Personal causes

Community or

social causes.

Illness due to working

condition.

Night Shift.

Accident inside theplant.

Disharmony with

foreman.

Boredom, general

sickness.

Blood donation.

Family planning

Going home town

Going out station.

Visit to foreign city.

Picnic

Relative

Religious

Family sickness.

Attain marriage.

Social work.

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EMPLOYEE TURNOVER:-

Employee Turnover refers to the process of employees leaving

an organization and requiring to the replaced. High turnover increased

cost on recruitment, selection, training and difficulties in teamwork and

employee morale.

The actions that will help in minimization of employee turnover

are letter hiring practices orientation training, working conditions,

remuneration and benefits, and opportunities for advancement.

In IFFCO Kandla, the employee turnover is hardly 0.5%.....

Recruitment

Recruitment is the process of finding of attractive capable applicants for

the employment the process begins when new recruits are sought and ends

when their application submitted

In IFFCO Kandla unit H2 & above grade employees recruitment

procedure is directly based on centralized recruitment and the procedure of it

is done by the IFFCO Head office Delhi.

Advantages of Centralizing Recruitment

Strengthens employment brand

Facilitates applying strategic priorities

Reduces duplication of HR activities

Reduces cost of new HR technologies

Builds teams of HR experts

Provides better measurement of HR performance

Allows for sharing of applicant pools

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Sources of Recruitment

Internal Recruitment:-

1. Promotion

By giving the promotion to the existing employee by evaluating his skills,

knowledge, ability, performance, employment report and after taking tests the

promotion is giving and the vacant place are filled. The promotion decision

and procedure are directly handled by the IFFCO Head office and as per

current rules and promotion policy of the IFFCO employee is eligible to get

promotion after 4 years of services.

2. Transfer

By giving transfer to the existing employee from one unit to the other unit

as per the requirement of the particular unit and with the assent or by the

decision of the management the manpower requirement is fulfilled.

3. DemotionBy placing an employee from his current level of employment to the

lower level of employment and by that way the employees requirement are

fulfilled but mostly this gives negative impact on the employee thats why this

source is not adopted by the IFFCO.

External Sources of Recruitment:

Advertisement in News paper

Advertisement through Internet

Campus Placement

Contract Labour

Government agency

Recruitment agency

IFFCO uses mainly these all are the external sources of recruitment for

fulfill the need of man power in the organization

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Selection

The selection process of IFFCO is

1. Application blank/application form (Back ground Information)

a. Identifying information

b. Information regarding experience

c. Information regarding education

d. Expected salaries and allowances

e. Information regarding community activities

2. Receipt and scrutiny of application

3. Selection test

a. Aptitude test

b. Personality test

4. Sending of call letters to appropriate candidate who obtained good marks in

the selection test.

5. Preliminary interview

a. Final interview

Judge an applicants qualifications and characteristics

To give an applicant essential facts about the job and

the company

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To given information regarding rules & regulations of the company

of the employment.

b. Checking of references

c. Physical or medical examination

d. Approval by appropriate authority

e. Placement & Offer letter

Vigilance/Legal/IR section

Compliance of various labour laws by IFFCO

Ensure compliance of labour laws by contractors

Ensure compliances of PF by contractors

Ensure minimum wages to contractor labors

Passing running/final bills of contractors

Attending labour/Ind./Civil high courts

To deal with conciliation cases

Preparation of written statements

To deal with arbitration matters

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Vigilance

During the year under report, Vigilance Department of IFFCO

continued its sustained functioning with great zeal and dedication on proactive

and preventive vigilance rather than punitive vigilance since IFFCO strongly

believes in Prevention is better than Cure. The Society adopted various

steps to curb corruption and to raise awareness amongst employees for

taking initiatives for improvement in the systems and procedures for redressal

of grievances.

This year also the Society voluntarily organized Vigilance Awareness

Week 2007 at its Corporate Office, Saket, New Delhi. Dr. Awasthi

reiterated that IFFCO has been following thepath of merit andrighteousness,

and constant fight against corrupt practices would make the system free from

corruption.

During the year, interactions were organized between vigilancefunctionaries and the line managers on regular basis at plant levels with a

view to understand the role of vigilance and to educate them on the policies,

guidelines and procedures of the Society. A Vigilance Workshop was also

organized for Senior Officers which

focus on Service Rules, Purchase Procedures and Power of Officers and to

create an environment of ethical growth in the Society.

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Production

Since its inception, the units have cumulatively produces

1190.91 Lakh MT fertilizer material comprising 714.94 Lakh MT Urea and

475.97 Lakh MT NPK/DAP up to the period ending March 31st 2010. During

the year 2009-10, the unit surpassed all pervious production records by

producing the highest ever 81.98 Lakh MT of fertilizer consisting of the

highest ever 43.24 Lakh MT Urea and also the highest ever 38.74 Lakh MT

NP/NPK/DAP. The previous best production level was 71.68 Lakh MT of

fertilizer during the year 2008-09. thus, the society has produce and

additional 10.40 Lakh MT of fertilizer during 2009-2010 as compared to the

last year, registering an increase in production by 14.5%. Urea units have

produce the highest ever 43.24 Lakh MT as compared to 40.68 Lakh MT in

the pervious year, achieving an overall capacity utilization of 101.9%.

Products of IFFCO

UREA:

IFFCOs Urea is not merely a source of 46% of nutrient

nitrogen for crops, but it is an integral part of millions of farmers in India. A

bag of IFFCOs urea is a constant source of confidence and is a trusted

companion for Indian farmer.

When farmers buy IFFCOs products Urea, they know that what they get is

not just a product but a complete package of services, ably supported by a

dedicated team of qualified personnel. More importantly, they are aware that

it is their own urea, produced and supplied by a cooperative society owned by

them.

About Urea.

Urea is the most important nitrogenous fertilizers in the

country because of its high N content (46%N). besides its use in the crops, it

is used as a cattie feed supplement to replace a part of protein requirements.

It has also numerous industrial use notably for production of plastics.

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Specification of Urea as per fertilizer control order

1. Moisture % by weight, maximum 1.0

2. Total N% by weight(on dry basis)minimum 46.0

3. Biuret % by weight ,maximum 1.54. Particle size 90 % of the material shall pass through 2.8 mm IS sieve

and not less than 80% by weight shall be retained on 1 mm IS sieve.

If Urea is applied to bare soil surface significant

quantities of ammonia may be lost by volatilization because of its rapid

hydrolysis to ammonium carbonate. The hydrolysis of UERA can be

altered by the use of several compound called ureas inhibitors. Theses

inhibitors inactivate the enzyme and thereby prevent the rapid hydrolysis

of urea when it is added to soil. The rapid hydrolysis of urea in soils is also

responsible for ammonia injury to seedlings if large quantities of this

material placed with or too close to the seed. Proper placement of fertilizer

urea with respect to seed can eliminate this difficulty.

About NPK/DAP

As far Indian farmers is concerned, IFFCOs NPK/DAP is

not just a source of crucial nutrients N, P,K for the crops, but is an integral

part of his/her quest for nurturing mother earth. The bountiful crop that results

from this care is an enough reason for the graceful bags of IFFCO NPK/DPK

bags to be an integral part of the farmers family.

The two grades of NPK produced by IFFCO, 10:26:26 and

12:32:16, indicating the content of N, P, K Proportion, are

Air

LNG/AG/Naphtha

Steam

Ammonia

Plant1100 MTPDUrea Plant

1650 MTPD

Carbon dioxide

Ammonia Urea

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CUMULATIVE PRODUCTION TILL DATE

(As on 31st March 2010)

In Lakh MT)

UNIT PRODUCT PRODUCTION

KALOL UREA 150.35

PHULPUR I UREA 155.44PHULPUR - II UREA 106.92

AONLA - I UREA 184.44

AONLA - II UREA 117.79

TOTAL UREA 714.94

KANDLA NPK 266.87

DAP 164.68

PARADEEP NP 25.72

DAP 18.80

TOTAL NPK/DAP 476.07

TOTAL FERTS. 1191.01

NUTRIENTS N 394.56

P2O5 168.40

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0

5

10

15

20

25

30

35

40

45

50

Jan'75

Apr.'75

Mar

.'81

Sep.'81

Jul.'88

Dec.'96

Aug.'97

Dec.'97

Aug.'99Ap

r.'01Ap

r.'02Ap

r.'04Oc

t.'05

Dce.'08

Urea

NPK/DAP

GROWTH IN PRODUCTION CAPACITIES

(000 MT)

As on Date UREA NPK/DAP Total Ferts

Jan.75 - 415.6 415.6

Apr.75 396.0 415.6 811.6

Mar.81 891.0 415.6 1306.6

Sep.81 891.0 881.3 1772.3

Jul.88 1617.0 881.3 2498.3

Dec.96 2343.0 881.3 3224.3

Aug.97 2491.5 881.3 3372.8

Dec.97 3217.5 881.3 4098.8

Aug.99 3217.5 1600.1 4817.6

Apr.01 3689.4 1973.6 5663.0

Apr.02 3689.4 2191.1 5880.5

Apr.04 3689.4 2415.4 6104.8

Oct.05 3689.4 4335.4 8024.8

Dec 08 4242.2 4335.4 8577.6

.

(In Lakh MT)

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Information and Communication Technology

Major ICT Activities

Wide Area Network (WAN) up to Area Office level with Corporate

Server at Delhi.

Virtual Private Network (VPN) connecting all Offices of IFFCO.

IP Telephones available up to Area Office. Many phones have video

facility.

Video conferencing extensively used nationally and internationally

Among first Corporate to successfully implement e-procurement based

on Public Key Infrastructure, Digital Certificate under legal

framework of IT ACT 2000.

Integrated Corporate enterprise wide Applications in all Areas like HR,

Finance, Marketing, Transportation, Materials, Maintenance,

Production etc.

Benefit of Pre-audit annual accounts by 1st week of April every year

for the last five years.

Server consolidated at Head Office and disaster recovery system set

up at Kalol.

All Software developed by in-house expertise, often consulted by

other organizations.

HRMS, an in-house developed ERP, having 25 applications for better

Corporate Governance and internal workflow.

Intranet applications on Rules & Procedures, News, Weather, Cropgrowing periods, Notice Board, Technical Papers, Telephone, Blood

Group, Software Project Monitoring Hardware Complaints and Annual

Confidential Reports etc.

Multilingual Agri Information Portal to extend benefit of ICT to

Cooperatives and farmers. More than 100 touch screen based Kiosks

installed in 16 states.

Free Multilingual email facilities to Cooperatives.

Work flow applications implemented to reduce paper work.

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ICT ACTIVITIES DURING 2009-2010

Symantec antivirus server has been consolidated

and installed on all the machines across the

clients country for protection against virus attacks.

MIS Portal, Materials Management System, Plant

Maintenance Management System, Water

Management System, Product Dispatch System etc.

have been further upgraded.

Biometrics Attendance Recording System has been

Introduced in Paradeep and Aonla Units.

IFFCO has also provided software support to ITGI,

ICPL, IKSL, IKSEZ and OMIFCO.

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Introduction

Hoagland says:- Financial management is concerned with such

matters as now a business corporation raises its finance and how it makes

use of it.

Finance Management is nothing but overall management

concerns with raising of funds in most economic and suitable manner, using

the fund as profitably as possible, Planning for future operation, controlling the

current performance and future development with through financial accounting

concerned with procurement of fund and effective utilization of fund.

All the activates in IFFCO are concurred under financial

system. All the decision related to raise of fund, use of fund, etc. are decided

by finance manager in head office, Delhi. All the payment and receipt is made

through INDIAN OVERSEAS BANK.

Accounting Policies:-

The company follows the accrual method of accounting. The

company has follows the entire applicable accounting standards made

mandatory by the institute of Chartered accounts of India.

Finance department is responsible for the following

activities in IFFCO:

Raw material management

Purchase order

Work order

Book section- budget preparation

Pay roll section

Cash & bank

Check approval voucher

Loan

Surprise inspection

Medical facility

Minimum usage of cash transaction

Miscellaneous expense

Fund management

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Purchase Order

As IFFCO is using proprietary nature of material it is purchased

from foreign. IFFCO have suppliers of Material from not only in India but also

in Denmark, USA, Germany, Japan. Purchase order is main activity of IFFCO

that is to be considering in financial system.

Government decides marketing and distribution strategies for fertilizer.

Decision regarding purchase and sale of fertilizer are under control of

central government authority.

Price is fixed by government.

IFFCO is not considering direct selling.

Target customer are divided as per region like: Gujarat, Rajasthan,

M.P, Maharashtra

Independence department for purchase for raw material.

The process of Vendors selection

1. AVL (Approval Vendors List)

2. Category Divided

3. Inquires about Vendor

4. Reply about Vendor

5. QCS(Quantitative Compare Statements)

6. Selection of Vendor

7. Place an Order

IFFCO use following option for payment

IT (Telegraphic Transfer)

LOC (Letter of Credit)

Site Draft

Advance payment

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Financial Performance

As per its tradition, the society has again exhibited an impressive

financial performance in all its major parameters, namely, revenue growth,

margins and resources utilization, testifying to the robustness of its corporate

strategy of creating multiply drivers of growth in spite of constraints in the

availability of raw materials and the inordinate delays in the receipt of large

subsidy amounts from Government of India. It was made possible due to

higher production, sales volume and improvement in operating efficiencies.

With the efforts of your society, international prices of fertilizer have

eased to reasonable levels, which is good from the point of supply strategic

plant nutrients to farmers at affordable prices. As a consequence of lowering

of international prices of inputs and imported fertilizer and subsidy levels, the

sales turnover of the society in value has come down to Rs.16809 Crore

during 2009-10 from Rs.32933 Crore in the previous year even though with

physical turn over was higher at 118.27 Lakh MT of fertilizer during 2009-10

as against 112.58 Lakh MT in 2008-09. the performance is even more

satisfying when viewed in the light of the challenging business environment in

the fertilizer industry.

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FINANCIAL PERFORMANCE

(In Rs. Crore)

2006-07 2007-08 2008-09 2009-10

SALES TURNOVER 10330.11 12162.82 32933.30 16808.57

PROFIT BEFORE TAX 251.25 380.52 441.95 567.28

PROFIT AFTER TAX 175.02 257.59 360.01 401.10

SHARE CAPITAL 422.92 423.93 426.28 426.24

RESERVES ANDSURPLUS

3218.92 3264.73 3532.59 3844.26

NETWORTH 3641.84 3688.66 3958.87 4270.50

NET ASSETS

EMPLOYED

INVESTMENTS JVs/

10661.98 10998.49 17303.77 16319.45

ASSOCIATES/OTHERS 740.46 770.57 914.00 892.33

INVESTMENTS

FERTILISER BONDS- 646.16 6638.95 6638.95

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Balance sheet as at 31stMarch, 2010

(in crore)

PARTICULARS As at 31.3.2010 As at 31.3.2009

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

SHARE CAPITAL 426.24 426.28

Reserves and Surplus 3844.26 4270.50 3532.59 3958.87

Loans funds

Secured loans 5032.93 7373.18

Unsecured loans 6499.24 11532.17 5429.60 12802.78

Deferred tax Liability (net) 516.78 542.12

Total 16319.45 17303.77

Application of funds

Fixed assets

Gross block 9100.60 8808.00

Less: accumulated depreciation/

amortization

4276.32 3842.16

Net block 4824.28 4965.84

Capital work in progress 333.00 5157.28 290.98 5256.82

Investments 7531.28 7552.95

Current assets, Loans & Advance

Inventories 1302.25 1731.36

Sundry debtors 68.08 407.23

Cash and bank balance 1075.31 69.63

Loans and advances 3376.87 5464.77

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Total 5822.51 7672.99

Less: current Liabilities & provision

Current liabilities 1799.40 2860.18

provisions 392.22 322.71

Net current assets 3630.89 3182.89 4490.10

Miscellaneous expenditure 3.90

Total 16319.45 17303.77

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4.1 Define the Pro blem : ------

To this study is qualitative in nature which was aimed to find out reasons

of questions Why IFFCO is no t gett ing Carbon Credit 2009-10??? ???

Li terature reviewing o f Study : ------

There is one researcher on the global warming and for that there was

one seminar arranged in Washington, DC to know about the Global warmingin the world which is most prior matter to solve and reduce the energy

consumption by the all-chemical industries.

Which is

Making Forest Carbon Markets Work

March 6-8, 2009

The first Forest Carbon Finance Summit was held in

Washington, DC against the backdrop of active development of U.S. climate

change legislation and preparations for inter-session meetings of the United

Nations Framework Convention on Climate Change. Summit sessions

addressed the conditions under which preserving and enhancing tropical

forests could be used to generate compliance credits under national or

international climate change regimes, including cap-and-trade systems and a

future international climate treaty to be negotiated in Copenhagen, Demark in

December of this year. In particular, discussions focused on how supply and

demand for forest carbon credits might be created and maintained, the steps

needed to address likely risks for investors, how institutional frameworks

could be developed to facilitate transactions and what safeguards must be

created to address social and environmental considerations.

Participants identified the great need for reducing emissions from

deforestation, and the potential for private capital to be mobilized if an

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appropriate REDD framework were to be established. Participants also

identified many areas of uncertainty regarding system design at the

international level and within forested countries. Some expressed concern

whether the challenges of creating a market for forest-based compliance

carbon were too difficult considering challenges of transparency and

governance and/or liability in many forest countries. There was broad

agreement on the need for follow up work in areas of uncertainty.

Reduced Emissions from Deforestation and Degradation (REDD).

Background

Reduced emissions from deforestation and forest degradation (REDD)

activities in developing countries could address a major source of greenhouse

gas emissions while at the same time paving the way for developing countries

to actively take part in international emission reduction efforts without

compromising their development needs.

REDD could open up the possibility of a development pathway for resource,

rich developing countries that does not rely on destructive environmental

exploitation and the conversion of most

natural forests to other land uses, i.e. the opportunity to avoid following the

deplorable example of industrialized nations.

REDD offers a real opportunity to improve governance in many potential

host countries and to reverse a long history of unsuccessful attempts at

tackling the complex drivers of deforestation and degradation. Given that most

developing countries with a significant REDD income potential score poorly on

many governance indicators, promoting good governance is a fundamental

precondition for any successful REDD strategy.

Performance based rewards for conserving and sustain ably managing

forests would provide a genuine economic alternative to current incentives

and could help overcome real and perceived

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conflicts between urgent short term development needs and long term

conservation and sustainability.

Once there are ambitious international emission reduction targets in place,

carbon credits from REDD would help to take full advantage of mitigation

opportunities across sectors efficiently without distorting the carbon market or

risking its environmental integrity. Incorporating a major additional sector with

a range of low to high cost abatement options would allow the international

community to reach more demanding reduction goals at lower total cost.

Carbon markets can create a transparent incentive system that rewards

independently verifiable emission reductions while subjecting market

participants to international environmental scrutiny and civil society vigilance.

In order to deliver emission reductions effectively and at the necessary scale

they need to be driven by ambitious regulatory commitments to combat

climate change.

Carbon markets are a very recent policy instrument compared to traditional

environment regulation and are still rapidly evolving and maturing.

Nevertheless, they can be a clear improvement to the baseline conditions of

environmental governance, natural resource management and accountability

of governmental and private sector actors in many developed and developing

countries.

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4.2 Objecti ve o f s tud y: ------

To know how much energy consume by the urea process

To know how much carbon credit is given by developed country

To understand how the carbon credit created

To know how much reward or money is given by the developed country

against the consumption of energy

Rationale of the study: ----

The analysis is help to know about consumption of energy.

The company can know that why they are not getting carbon credit in

2009-10.

The main purpose of the research is to awareness of global warming

and Green House effect by the chemicals industries.

Limitation of the study: ----

Time limit:

The time duration for the research is short, so a census is

not possible due to time limit, so I have collected data through secondary

sources.

Lack of expertise:

This research work is prepared by me, so there is chance

of lack of expertise knowledge in the particular field.

Lack of Knowledge:

A person has no more information related to carbon

credit, so not get accurate results.

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Data collection

Primary Data Secondary Data

4.5 Data collection: -----

Data is required to make a decision in any business

situation. The researcher is faced with one of the most difficult problems of

obtaining suitable, accurate and adequate data. Utmost care must be

exercised while collecting data because the quality of the research results

depends upon the reliability of the data.

Statistical investigation requires systematic collection of

data, so that all relevant groups are presented in the data.

Data collection has two methods. Which are as under:-

In my research, I used Primary as well as secondary data. The

primary data are used via Personal Interview.

I interviewed three managers to find out solution of theproblem. The names of managers are as under

1. Mr. D.U.Shah (Account Manager)

2. Mr. Sanket Patel (Account Manager)

3. Mr. G.N.Prasad (Account Manager)

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I organised structured personal interview and try to

get answers of my research problem. The type of questions and general

analysis of answers are given below.

Que.1 what is Carbon Credit?? ?Carbon credits are new financial commodity

representing certified reductions in the emission or accumulation of

greenhouse gases in the atmosphere. Greenhouse gases trap

heat from the sun and help regulate the temperature ofthe earths

atmosphere. As concentrations of atmospheric greenhouse gases

increase due to human activities, global average temperaturesmay rise - with potentially costly consequences. Man-made

greenhouse gases produced from industrial, agricultural, and

municipal sources include carbon dioxide, methane, nitrous oxide

and several other chemical compounds.

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Terminology

Deforestation and degradation are principle subcomponents of

in ternat ional forest carbon, denoting the two forms under which forest

carbon stocks can be drawn down and emitted to the atmosphere. The other

main components are a forestation,

reforestation, and forest management

which can build forest carbon stocks by

removing CO2 from the atmosphere via

photosynthesis and carbon storage in

biomass and soils. Because in ternat ional

forest carbonis broader in scope than

REDD (reduced emissions from

deforestat ion and degradat ion)and

because the U.S. policy process, which is

the primary focus of this brief, refers to international forest carbon rather than

to REDD alonewe will follow that guide and use the terms in ternat ional

forest carbonand forest carbonin this brief, rather than the term REDD

used more commonly in the UNFCCC discussions. In many cases, these

terms can be used almost interchangeably.

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Que.2 How Carbon Credit Created??

Carbon credits can be created from agricultural, waste

management and renewable energy projects that reduce greenhouse gas

emissions. By implementing appropriate practices and technologies

according to specific protocols, reductions in greenhouse gas emissions can

be monitored, documented, independently verified, and registered to an

account (e.g. within the Chicago Climate Exchange or other voluntary

greenhouse gas program) as certified, tradable carbon credits.

Now days, the major Problem in Global world is the scare

resources of natural gas. In the developing country, the industries of

chemicals use more and more natural resources and spread the carbon

dioxide in the weather and for that the layer of ozone is broken. So ReducedEmissions from Deforestation and Degradation (REDD).

Que.3 On which bases company get Carbon

Credit?? ?

Company gets carbon Credit on the bases ofEnergy

consumption. Kalol unit has produced 560201 MT of urea and 345663Tonne of ammonia during the year 2006-2007 attaining a capacity

utilization of 102.88 % and 95.22 % respectively. The ever lowest specific

energy consumption of5.981 GCal/MT and 8.702 GCal/MT was achieved in

the year 2006-07 for Urea and Ammonia production respectively.

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Energy Saving Project

IFFCO Kalol Ammonia plant is of early 70s Kellogg

technology and has limitations in implementing new technologies. Space

availability is another major problem. In spite of these constraints Kalol unit is

continuously putting efforts to reduce specific energy consumption.

Energy Saving Project (ESP) was one such measure

which targeted to reduce specific energy consumption by 0.915 GCal/t of

ammonia at an estimated cost of Rs. 125.30 crore. ESP Phase-II was

implemented and commissioned in April-May 2006.

There is considerable reduction in Specific Energy

Consumption of Ammonia and in turn, Urea as a result of implementation of

schemes under ESP.

The reduction trend in Specific Energy Consumption for

the last three years is shown below.

Particulars 2004-05 2005-06 2006-07

Sp. energy per of ammonia 9.163 8.967 8.702

Sp. energy per t of Urea 6.347 6.179 5.981

Energy cost (a) (Rs. Lakhs) 35008.76 32692.84 48613.47

Manufacturing cost of Bagged

Urea (b) (Rs. Lakhs)

44594.19 42123.72 58621.68

(a)/(b)*100 78.51 77.61 82.93

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Specific Energy Consumption: Ammonia

Specific Energy Consumption: Urea

9.44

9.163

8.967

8.7

8.8

8.9

9

9.1

9.2

9.3

9.4

9.5

2004-05 2005-06 2006-07

energy

6.587

6.347

6.179

5.9

6

6.1

6.2

6.3

6.4

6.5

6.6

6.7

2004-05 2005-06 2006-07energy

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Energy Pol icy:

At IFFCO Kalol, optimum utilization of energy and the total

energy management are the part of corporate mission and IFFCO is fully

committed to reduce the specific energy consumption in the production of

nitrogenous fertilizer through:

Conducting in-house energy audit and monitoring the energy consumption

norms.

Carrying out various minor and major modifications.

Adoption of technological advancement befitting to the old plant. Development of human resources.

Creating safe, healthy and energy conscious working environment.

Better housekeeping in the plant.

Energy Conservat ion Ac hievements

Ever lowest yearly specific energy consumption of 8.967 GCal/ t of

Ammonia. Ever lowest yearly specific energy consumption of 6.179 GCal/ t of Urea.

Ever lowest monthly specific energy consumption of 5.952 GCal/ t of Urea in

February-06.

Ever lowest monthly specific energy consumption of 8.728 GCal/ t of

Ammonia in February 2006

Que.4 When Company gets Carbon Credit?? ? ?

All the plant has worked hard to energy. The

composite specific energy consumption for urea plants during 2009-10 came

down to the lowest ever 5.832 GCal/MT as against the pervious lowest

specific. Energy consumption of 5.907 GCal/MT achieved during 2007-08.

IFFCO, for the first time, monetized its CARBON CREDITS by affecting its

sale to a Spanish agency for a consideration of Rs.4 crore under the clean

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development Mechanism (CDM) of the United Nations Framework of Climate

change.

Que.5 How much company gets carbon credit at2007-08???

IFFCO, for the first time, monetized its Carbon Credit

by affecting its sale to a Spanish agency for a consideration of Rs. 4 crore

under the Clean Development Mechanism (CDM) of the United Nations

Framework of climate