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PREFACE

This project is prepared during the vocational training under taken at KRIBHCO,

SURAT. On partial fulfillment of the degree in Master of Electronic Business.

Hence, this report is designed with the objective to gain practical knowledge and is

undertaken on a chemical fertilizer manufacturing industry. According to an old saying there

is a huge difference between to say and to do. To take theoretical knowledge is important but

it becomes more valuable when we apply it in the practice. So there is a huge gape between

theory and practice. So, for fulfilling this requirement, training in the KRIBHCO was very

practical exposure for us. This training provides golden opportunity for all students,

especially when the management student does not have perfect understanding of the working

of a unit.

Hence, this report is designed with the objective to gain practical knowledge & is

undertaken on a fertilizer manufacturing industry.

2 Anand Institute of Business Study

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Acknowledgement

Sharing our experience is one of the biggest honors, which every one cannot experience. To

share our experience at KRIBHCO as management student is a matter grate honor and pride.We are grateful to KRIBHCO for letting us to do this project. We express our gratitude to

Mr.N.K.Sahoo (P&A Manager), Mr.K.Ashokan & Mr.Sampat (store department),

Mr.Thomas T.S. (F & A Deptt), Mr.J.Naik (Purchase department), Mr.Tondon

(Transportation department), Mr.M.N.Patel & Mr.Purbia (H.R.D department), Mr.M.S.Desai

(Marketing department).

We are really thankful to employees of KRIBHCO who have been guiding us in this path

Step by step and have made our path really simple to get through .we will use this experience

through out our career and will make our future bright. So once again we thank all of them.

In regard to this programmed, we would like to acknowledge our gratitude and

Thanks to coordinator,

Anand Institute of Business Studies,

Sardar PatelUniversity

for catering us the opportunity of training. We also forward our special thanks to our All

Faculty Member for guiding us in training Programme. The valuable suggestion of our

faculty members during the course our Project work and giving us inspiration to achieve our

goal. The shape that project has been taken is due to our faculty members help, judicious

guideline and encouragement.

And the most precious part of our life, our parents who have showered their love and support

which can be never repaid in any form but can be commemorated without them this

achievement could not have been achievement.


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Declaration

I the undersigned RAHUL N.PRAJAPATI this financial training report with

KRISHAK BHARTI CO-OPERETIVE LTD is the result of our study which carriedout during 1 June to 31 July, 2009 and has not been previously submitted to any

other university or institute for any other examination and for any other purpose by

any other person.

Place: SuratDate: 31/07/2009

EXECUTIVE SUMMARY


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Today the significance of project work has greater importance in business world. Practical

knowledge is as important as theory so that one thing is said, Practice makes a men Perfect

I have made my project in KRISHAK BHARTI CO-OPERETIVE LTD which is basically

pharmaceutical company. I have made the report depicting the companies working

mechanism and the overview of its entire department. The companies mainly comprises of

following department:

- Production department

-Marketing department

-Finance department

-Human Resource Development

-Purchase & Store department

In the purview of Production department the process has been studied separately for 3

departments of the company (i.e) Bulk Packaging, Medium Packaging & Injection molding

Department, in production department we also describe the process of various products like

Ammonia, Urea, and Power plant. In order to understand the mechanism of Human Resource

department we took all relevant information of the functional field. The responses wereanalyzed and suggestion was provided in order to make their entire working mechanism to

increase its efficiency considering the human perspective. In marketing department we study

the strategy which will be selected or adopted by KRIBHCO. In finance department I studied

capitalization, working capital management etc. In purchase & store department the activity

done by this department is covered under this report.

As a part of the project report a special topic was selected for studying and analyzing in detail

the entire working of the Company. I have done report on production planning & Control tolearn the entire production process of the company and basic operation of entire production

planning and control. The Process chart was used depicting the entire production process and

step-by-step planning of the process.

The topic of my project is Inventory Management. In next part of the project contain the data

regarding Inventory Management. In this the Process of Inventory Management means how

inventory should be maintain and the various techniques adopted by KRIBHCO for Inventory

management should be studied under it.

INDEX


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SR NO. SUBJECT PAGE NO.

1 PART 1: GENERAL INFORMATION ABOUT

VARIOUS DEPARTMENT

2 INTRODUCTION 08

3 GLOBAL SCENARIO OF FERTILIZER INDUSTRY 10

4 INTRODUCTION OF KRIBHCO 13

5 ORGANIZATIONAL CHART OF KRIBHCO 23

6 HUMAN RESOURCE DEPARTMENT 25

7 MARKETING DEPARTMENT 37

8 TRANSPORTATION DEPARTMENT 45

9 PRODUCTION DEPARTMENT 47

10 MATERIAL DEPARTMENT 52

11 PURCHASE DEPARTMENT 53

12 STORE DEPARTMENT 56

13 FINANCE DEPARTMENT 59

14 PART 2: INVENTORY MANAGEMENT

15 METHODOLOGY 66

16 INTRODUCTION OF INVENTORY MANAGEMENT 67

17 INVENTORY MANAGEMENT IN KRIBHCO 70

18 CLASSIFICATION OF INVENTORY

MANAGEMENT

82

19 EOQ 86

20 COMPOSITION OF TOTAL INVENTORY 90

21 SUGGESTION 91

22 SWOT ANALYSIS 92

23 RECOMMENDATION 94

24 CONCLUSION 95


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25 BIBLIOGRAPHY 96

India lives in villages said Mahatma

Gandhi decades ago. It is true even today.

Like every developing economy, the economy

of India is also agro-based. Agriculture


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accounts for nearly 1/4th of India's GDP and more importantly, about 2/3rd of the

country's population is dependent on agriculture and allied activities for their

livelihood. As per statistics nearly 175 lakh MT of fertilizer nutrients are required every

year in this country. The demand of fertilizers was so high that India had to import

almost 30% of its requirement from other countries. Therefore, to achieve the economicgrowth, agriculture base of the country must be strengthened. To attain this objective,

agriculture practices have to be improved from their traditional pattern to a higher

technological track involving better irrigation and use of better quality seeds, fertilizers,

insecticides & pesticides. Therefore, chemical fertilizers are key player in this process

and fertilizer industries plays quite a major role in increasing food production in the

country and also helps to modernize the out look of the common farmers and make

them innovative and respective to the new technology change.

A fertilizer is any material, organic, inorganic, natural or synthetic, that is placed

on or incorporated into the soil to supply plants with one or more of the chemicals

elements necessary for normal growth. Fertilizer is the material, which supplies the

chemicals elements required for plant growth. Primary nutrients like nitrogen,

phosphates and potassium (required for fertilizer land) are supplied through chemical

fertilizer. Fertilizer response studies have proved that one kg. of fertilizer nutrient

application can the food grain production by 8-10 kg.

Fertilizer production is of permanent importance for this country because

fertilizer increases agriculture productivity. One hand population increasing but on the

other the supply of land is totally fixed. So we have to produce more without any

increase in arable land area. This can be done if productivity goes up. And fertilizer

plays a major role in productivity escalation.

As this is a vital commodity it is in the interest of nation that farmers get

fertilizers at reasonable rate and in adequate quantity. Looking to the poor economic

condition of Indian farmers Government of India framed fertilizer policy in 1977 basedon Maratha committee report. The purpose behind introducing this policy was to

supply fertilizer to resource poor at a price they could afford, so as to increase the

consumption of fertilizer, to increase food production, and ensure fair return to

fertilizer producers.

With this twin objective, Retention Price Scheme (RPS) for fertilizers came into

picture. In this scheme government has brought the fertilizer under the preview of

Essential Commodities Act (ECA) in which the retail price of fertilizer to the farmer is

notified by the Government of India from time to time. This retail price to the farmer is


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uniform throughout the country and is subject to local taxes applicable under the

respective States.

Further under ECA, the government also operates a system of distribution

control in which the manufacturers including the handling agents for the imported

fertilizers are directed to sell specified quantities of fertilizers in given states/union

territories. While doing so, the logistics of fertilizer distribution including storage,

transportation, handling etc. are also suitably regulated conforming to overall supply

plans of the government to meet the requirement in all the parts of the Country.

Now manufacturers also should get reasonable rate of return as all incentive for

producing fertilizers. Manufacturers should get at least that much, which call enable

them to remain in the industry.

Government of India fixes the price of fertilizers in such a way that

manufacturer's cost of production including cost of marketing is covered and the

manufacturer gets a 12% post tax return on net worth of the unit at a pre-defined

capacity utilization. Norms are fixed for consumption of raw material, utilities, services,

capacity utilization, depreciation etc. The price so fixed is called Retention Price (RP).

This price is reviewed every three years.

In a nutshell fertilizers can not be sold in open markets and producing unit has

almost nil say in fixing fertilizer price. Then how to increase profits? By operating plantefficiently only.

3. GLOBAL SCENARIO OF FERTILIZER INDUSTRY

The United Nations projection indicate the world population has been increasing at very

fast rate while the nature resource such as land remain the same so, to recover

increasing demand for the food grain the productivity of the crop can be increased by

using fertilizer.


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Today 35% of the world fertilizer/production from developing countries. But

their consumptions being 50% of the total global fertilizer consumptions; the

developing countries are the net importer of the fertilizers. This is natural because they

are essential agro based economics. While Canada and U.S.A. are top exporters of

fertilizer in the developing countries. India and china are also develop/ping their

scenario in the world market.


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-:: INDIA SCENARIO ::-

By fiscal year 1995, the fertilizer consumption in India touched 13.56 million

tons. In the same year, the total supply was 10.43 Million tons. With that become thethird largest producer after U.S.A. and china. To bridge the demand and supply gap

India has to import necessary fertilizer.

-:: WORTH OF FERTILIZER INDUSTRY ::-


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1. Pro Green Revolution Period

2. Green Revolution Period

3. Post Green Revolution Period

Pro Green Revolution :

The period is described in 1952-1953 era where increased growth of food grains

took place however this increased production in food grains took place due to increased

irrigation method. In this phase the land under agriculture was made more during this

period about 80%of the companys population was involved in agriculture either

directly orindiretly.

Green revolution Period :

During this phase government stated the programmer aimed at marking our

country self sufficient in food product this was the period between the year 1959-1960

this plan laid the emphasis on production of high yielding varieties. To make this plan a

success there was a high need to make sail fertile by providing it with nutrients like

phosphorus nitrogen and potassium.

Post Green Revolution Period :

The words population along with Indian population has kept on growing at an

alarming rate the fertilizer companies all over India are trying to expand their scale of

operation in order to increase the production rate. The demand for fertilizer per year is

increasing. The current demand of fertilizer in India is 18 million tones.


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4. INTRODUCTION OF KRIBHCO

Krishak Bharti Co-operative Limited

KRIBHCO the worlds premier fertilizer producing co-operative has an

outstanding track record to its credit in all spheres of its activities. Since 17th April 1980

as a national level co-operative society promoted by Government of India authorized to

manufacturing and distribution of fertilizers. Chemical fertilizer and allied farm

imputes KRIBHCO imbibed the co-operative philosophy fulfilling its commitment to

strengthening and promoting the cause of agriculture development and co-operative

movements in the country.

Krishak Bharti co-operative limited popularly known as KRIBHCO

has been registered as national level co-operative society under the provision of the

multi-state co-operative societies act, 1984.

TheKRIBHCO hazira unit is located around 15 kms, west of Surat and

lies on the north of river Tapti. An all weather road from Surat to hazira connects the

plant site with the city. The cannel belonging to irrigation department is running on the

plant site and is feeding water from ukai. A railway feeder line apporx. 55 kms. Long

has connected the site with Bombay Ahmedabad main line.

KRIBHCO multiunit co-operative societies were promoted jointly by

IFFCO and the agricultural co-operative all over the country.


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KRIBHCO PLANT AT HAZIRA

Plant is based on Natural Gas from BOMBAY HIGH SOUTH BASSEIN. The

society massive Ammonia, Urea complex is situated at HAZIRA near SURAT inGUJARAT.

KRIBHCO plant is one of the largest and most modern fertilizer compels in the co-

operative sector in the world. It has two phases on UREA plants consisting of two

streams of 1520 MTPP with an annual capacity to produce 14.52lakh.MT of urea

equipment to 6.68 lakhs MT interns of nutrient nitrogen.

KRIBHCO aims to fulfill the ever-growing fertilizer needs of the country. The

HAZIRA project with project zero date of 31st March, 1985. The estimated project cost

was Rs.957.71 crore However, the final project cost was Rs.885 crore resulting in hot

saving at Rs. 72.71 crore.


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MEMBERSHIP: -

A cooperative thrives on the trust of, its members. Membership of

KRIBHCO is open to government of India, national state and district and village

level cooperative society. At the initial stage, way back in June, 1981 the total

membership in KRIBHCO was only 221 cooperative societies which rose

significantly to 6044 cooperative societies as on march 31,2008 as against 5790 as on

march 31 2007. Phenomenal progress made by the society becomes a testimony to

the ever-increasing membership over the years.

The total paid up share capital as on March 31, 2008 was rs.39, 354.15 lakh as

against rs.49, 170.72lakh in the previous year. During the current financial year, the

society has refunded share capital of rs.9700 lakh to IFFCO and government of

India respectively .the state wise membership with share capital contribution as on

March 31, 2008 vis--vis march 31 2007.

MISSION: -

A) To contribute to agriculture &rural development in the regins.

B) Services to members of cooperatives society by selecting financing

C) Managing society desirable and commercial profitable investment

opportunity preferable at multiple locations.


5188

56245732 5790

6044

4600

4800

5000

5200

5400

5600

5800

6000

6200

2003-04 2004-05 2005-06 2006-07 2007-08

Years

Kribhco Membership

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VISION:-

They want to be a world class organization that represents the farmer

community and maximizes returns to them through specialization in agricultural

inputs and products and other diversified businesses that maximize

stakeholder value.

OBJECTIVES: -

a) To undertake the activities for he rural upliftment and agriculture development.

b) To promote economic interest of its members by undertaking manufacturing of

chemical fertilizer & allied product.


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In furtherance of these objectives KRIBHCO may undertake one or more of the

following activities: -

(I) To undertake production processing, manufacture, sale distribution, marketing,

import export and to otherwise deal in agriculture production requisites.

(II) To set up storage units for storing fertilizer and other goods by itself or in

collaboration with other agency.

(III) To act as warehousing agency under the warehousing act and own go downs or

hire go downs for the storage of fertilizers and other goods.

AWARDS: -

The excellence performance of the society has brought a number of laurels from various

organizations .The awards received during year were as follows: -

(I) National productivity council has awarded productivity award the society for

bio fertilizer product for the year 1999-2000, 2001-2002 in the year 2003-

2004.

(II) Hazira ammonia extension project (HAEP) rotating shield winner and

certificate for lowest disabling injury index in group-c industries.

(III) Sardar Vallabhbhai Patel Agriculture and Technical University, Meerut All

India Farmers Fair And agro Industrial Exhibition First Prize To Kribhco on

10-03-2005.

(IV) Kribhco has won first prize for Bio-Fertilizer Production, Marketing And

Promotion Award For the year 2003 And 2004 by National Productivity

Council (NPC). Award Has been given formal function held on 10th May,.2005

by Honble Minister For Agriculture Shri Shard Pawar Ji.

(V) Special Participation Award in Corporate Sector Event Vyapar 2005 Event

Organized By Southern Gujarat Chamber OF Commerce And Industries From

February 11 16, 2005, the theme of pavilion was Development OF Bio-

Technology In Kribhco


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KRIBHCO HAS WON ENTERPRISE EXCELLENCE AWARD

Managing Director Shri V.N. Rai is holding the Gold Plaque

KRIBHCO has won the Enterprise Excellence Award for the year 2003-2004 in thefertilizer sector from

the Indian Institute of Industrial Engineering (IIIE) ,forfinancial and operational strength of the Society. The

Award consisted of a gold plaque with certificate of Excellence was presented by Dr. T.S Vijayaraghavan,

IAS (Retd), former secretary, Petroleum, Govt of India, at the 8th CEOs Conference at Kodaikanal.


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The Prime Minister Shri Ataal Bihari Vajpayee is presented a dividend cheque by theManaging Director, KRIBHCO Shri V.N Rai in New Delhi on september 12, 2003 (Friday).

HISTORY OF KRIBHCO: -


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Encourage with the successful operation of fertilizer plant of kalul, kandla and

phulpur in the co-operative Limited. (IFFCO) higher to the one and the only co-

operative in the fertilizer industry has promoted another co-operative namely

KRIBHCO Ltd to made the new giant plant of hazira.

MILE STONES: -

(I) Project zero Date : 31/03/1981

(II) Foundation stone laid by Smt. Indira Gandhi: 5/02/1982

(III) Project completion : 31/03/1985

(IV) Plan completion : 26/11/1985

(V) Commercial production : 1/3/1986

(VI)Percent capacity utilization : Urea 99%

Ammonia95%

(VII) Plant ready of production : January/September,1985

(VIII) Gas available by ONGC : PHASE 1 & PHASE 2

18-9-85 6-11-85

(IX) Trial production Ammonia : PHASE 1 & PHASE 2

14-11-85 30-11-85

Urea (stream 11/31) 26-11-85 13-12-85

Ammonia (stream 21/41) 31-12-85 01-12-85

(X) ISO certificate (I) KRIBHCO plant

ISO 9001-2000

(II) KRIBHCO plant

ISO 14001

(III) KRIBHCO Mktg office

ISO 9001-2000


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DEPARTMENT AND MANPOWERS AT KRIBHCO

Financing & Accounting 62

Personnel & administration 82

HRD 09

Security 101

Material 55

Medical 32

Mechanical 210

Transportation 29

Fire safety 45

Purchase & store 56

Instrument 90

Electrical & civil 101

Laboratory 54

Production (HEAP Plant) 440

Total 1379

Contract labor 1600

Total manpower 2979


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PERFORMANCE HIGHLIGHT:-

RECORDS 2007-08

Highest monthly urea dispatches from Plant Oct.

06 since inception

Earlier Record (Dec. 87)

1.98 Lacs MT

1.94 Lacs MT

Highest monthly Urea Sales July 06 since inception

Earlier Records (June 87)

4.11 Lacs MT

3.84 Lacs MT

Highest Total Annual Urea Sale 2006-07 since

inception

Earlier Record (2005-06)

34.6 Lacs MT

28.2 Lacs MT

Highest Daily Bio Fertilizer Production from

Hazira Unit ( 01-14.11.2006)

Earlier Record

3000 Kg

2660 Kg

Highest Total Monthly Bio Fertilizer Production

Oct 06 Since Inception

Earlier Record (Oct 06)

97.5 MT

94.4 MT

Highest Monthly Bio Fertilizer Production from

Hazira Unit Nov 06 since Inception

Earlier Period

80.1 MT

71.8 MT

Highest Annual Bio-Fertilizer Sales 2006-07


784.4 MT

714.4 MT

Highest Annual Total Bio Fertilizers Dispatches

2006-07


843.3 MT

716.4 MT

Highest Annual Bio-Fertilizers dispatch from

Hazira Unit 2006-07


638.8 MT

491.4 MT

Highest Sales Productivity


5388 MT/ EMP

4315 MT/ EMP


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5. ORGANIZATIONAL CHART OF KRIBHCO


GM(P)

GM(Material)

GM(F&A)

GM(P&A)

GM(Tech)

CM(MIS)GM

(Mai.)

JGM(P)

JGM(Material)

JGM(F&A)

JGM(P&A)

JGM(Tech)

JGM(Maintain)

CM(P)

CM(Material)

CM(F&A)

CM(P&A)

CM(Tech)

CM(Maintain)

Government of India

Ministry of Agriculture

Department of fertilizer& Chemical

Chairman

Board of Directors

Managing Director

Operational Director

Ammonia

Urea

Power

PHP

Transportation

Purchase

Store

Process

Project

Laboratory

F&S

Civil

Instrument

Mechanic

Electrical

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QUALITY POLICY

Management of KRIBHCO, Hazira plant is committed to operate and maintain its fertilizer

manufacturing complex through quality assurance, environmental protection and to the

satisfaction of customers.

KRIBHCO, Hazira plant shall achieve this quality policy through following objectives:

1. Continually upgrading technology to improve plant efficiency & reliability.

2. Maintaining & improving the safety & environmental performance.

3. Improving the skills & knowledge of personnel.

4. Continuously improving the quality Management system.

FUTUREPLANS

A joint venture fertilizer project in Oman:

Society has invested US$ 80 million as equity in Oman India Fertilizer plant

which has achieved commercial production on 14th July 2005. The Project has annual

capacity of 16.52 lakhs MT Urea and 2.50 lakhs MT surplus ammonia and has been built at a

cost of US$ 969 million. Marketing of Urea produced by this plant has since been

commenced by the society.

Hazira Phase-II

Society is in the process of setting up a state of the art mega size ammonia plant of

capacity of 1850 MTDP and urea plant of capacity of 3250 MTDP at existing fertilizer

complex at Hazira. Existing infrastructure facilities will be utilized resulting in saving of cost.

Plant will be based on natural gas and we have energy consumption.

Gujarat state energy generation limited (GSEG)

Society has diversified to power sector and has invested Rs. 48.75 crores being 30%

equity in Gujarat State Energy Generation Limited, a joint venture company promoted by

government of Gujarat, GSEG is operating 156 MW Power Plant at Mora, District Surat.

.KRIBHCOs Hazira plant is also going to be expanded. The society is also exploring

the possibilities to set up a 200 MW liquid fuel based power project at Jhunjhunu, Rajasthan.

Society has deposited a development security of Rs.25 lakhs with Rajasthan State Electricity

Board (RSEB). Minister of power has given No Objection Certificate (NOC).


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6. HUMAN RESOURCE MANAGEMENT

Human Resource Management is that part of management which is concerned

with people at work & their relationship within the organization. The term Human Resource

Management refers to the management of personnel in the organization of any company to

achieve the predetermined goals. The duty of the personnel manager is to look after the

personnel department and various functions of the personnel like recruitment, selection,

promotion, transfer, etc.

In KRIBHCO, there is Personnel & Administration Department to carryout the

functions of Human Resource Management. Here, the term Personnel & Administrations

refers to the administration of personnel.

The objective of this department is as below:

(1) To ensure satisfaction to the workers so that they are freely ready to work.

(2) To attain maximum individual development.

(3) To improve efficiency of the human resources.

Realizing that employees are its greatest assets, KRIBHCO from its very inceptionhas been striving to build up a sound & transparent organizational culture to inclusive to

sense of belonging among its employees.

Personnel & Administration department mainly deal with:

Manpower Need Why? Where? How? And When?

Recruitment & Establishment functions

Performance Appraisal

Welfare & other services


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Loans & Claims

Human Resource Department

KRIBHCO considers its human resources as a the greatest assets. It invests

time and money to develop its employees through various HRD mechanisms. Regular in-

house training programs sponsorship to outside training institution, brainstorming, problem

solving workshops etc. are conducted for employees at all level.

Structure:-

Chief Manager (N.Bhatta)

Senior Manager (D.K Mandal)

Manager (H.D Desai)

Deputy Manager (P.T Solanki)

Sr. Assistant Manager (S.N Purabia)

Assistant Manager (M.N Patel)

Junior Manager (K.S Mohanan)

Average Employee Turnover rate--- NIL

Average Employee Absenteeism rate---NIL


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HR Planning:-

HR planning includes estimation of how many qualified people are necessary to

carry out the assigned activities, how many people will be available and what if anything,

must be done to ensure that personnel supply equals personnel demand at appropriate point in

future. It is the foundation for all personnel functions.

In KRIBHCO, forecast of manpower is based on expected promotion and

retirement. In KRIBHCO, bottom-up approach is used i.e. manager or department head

submit their departmental proposal to Establishment Section, which is forwarded to corporate

office.


Training and Development

Feedback and counseling

Educational opportunities

Rewards and encouragement

Induction training on the

job training refresher

courses

Process simulatorinformation

Gallery conference room

audio visual aids

Orientation

program

In house training

Evaluation and

feedback

Technical library

Lecture hall

auditorium

Facilities

Mechanism

Methodology

H

R

D

Performance

appraisal

Proper

communicatio

n

In housejournals

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Objectives of HRD at KRIBHCO:-

Maximize department contribution to KRIBHCO.

To increase KRIBHCO` s foundation through increasing in employees contribution.

Provide an opening of self- expression and self-development in congruence withorganization.

Provide need-based training to all employees of the organization.

Plan the right working condition for employees progress.

Plan and design appropriate training strategies to build competencies of employees

Ensure growth and development for all.

Personnel & Administration:-

Personnel Department is that part of management, which is concerned with

people at work 7 their relationship within the organization. The term personnel

management refers to the management of personnel in the organization of any company

to achieve the predetermined goals. The duty of the personnel manager is to look after the

personnel department and various functions of the personnel like recruitment, selection,

promotion, transfer, etc.

As there is so much important of the heart in the human being so much as

there is also importance of person in any organization. Person working in the organization

are considered as the blood and heart of the organization. The success of unit mainly

depends upon the personnel function in any organization. As in the organization there

must be maintain good relation between personnel of different department. Personnel

manager plays very important role between employers and employees.

The objective of this department is as below:

1) To ensure satisfaction to the workers so that they are freely ready to work.

2) To attain maximum individual development.

3) To improve efficiency of the human resources.

Personnel & Administration department is divided into two major departments.

1) Personnel Department

2) Administration Department


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The personnel department is further sub divided into four sub-division:

a) Recruitment and Establishment cell

b) Tine office and Wage & Salary Administration cell

c) Industrial Relations cell

d) Contract cell

The Administration Department look after the following matters:

a) Canteen

b) Transportation

c) Township

d) Horticulture

e) Guest house/ temple/ garden maintenance etc

Grade system in KRIBHCO plant site HAZIRA

A Managing Director

B Director [Operations/ Marketing/ finance]

B1 Executive Director

C senior general manager/ General Manager

D Joint general manager / Chief Manager

E senior manager/ CMO

F Manager

F1 Deputy Manager/ senior M.O.

G Sr. Assistant manager/ Sr. area manager/ Sr. engineer/ foremanG1 Assistant manager/ Engineer/ Assistant foreman

G2 Assistant Engineer/ Assistant manager

H Joint manager/ P.S.


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Function of Personnel & Administration Department

TIME OFFICE : Time office Management, Attendance & Leave,

Wage Administration, Leaves travel Concession,

Marketing Bus Coupons.

LOANS & CLAMS : HBL, Conveyance Loan, Salary Advance, MedicalBills, Accident Insurance Claims.

ESTABLISHMENT : Recruitment, Placement, Confirmation, Appraisal

Report, DPC, Personnel Records, Employment

Returns, Data Bank.

TRAINING &

DEVELOPMENT

: Nominating In-House/Outside raining, Learning

Group, Vocational Trainees.

PLANT

HORTICULTURE

: Horticulture work in KRIBHCO & HAEP Plants

FURNITURE BUDGET

INTERNAL AUDIT

: Procurement & Maintenance of office furniture &

Equipment, Physical Verification of Furniture.BUDGET & INTERNAL

AUDIT, VIGILANCE

MATTERS

: Preparation of Budget and matters related to it,

Internal Audit coordination & replies, Vigilance

matters.

RURAL DVELOPMENT

PUBLIC RELATIPON

: RURAL Development, Release of Advertisement &

Processing of Bills, Publishing of KRIBHCO

DARPAN/ Kribhco Today Publicity/ Liaison with

Press, Photography & Videography, Periodicals &

Newspapers.

HOUSE KEEPING &

DESPATCH

: House keeping and upkeep of Administrative

Block, Dispatch Section, Courier Service,

Attendant Service to various Sections.

INDUSTRIAL

RELATIONS

: Industrial Relation, Union & Association matters,

Collective Bargaining, Management of Industrial

canteen, Review of Personnel policies, Wage

Revision matters, Incentive payment, Sport &

Games, Cooperative Stores, Unit Level Class,

Management of Class, Management of Schools,

Welfare matters.

IMPLEMENTATION OF

HINDI

: Office Language Implementation

GUEST HOUSELIVERIES LOCAL

PURCHSE LAN

PRINTING OF

STATIONERY

: Management of Guest House-I & GH-II, trainingHostel, Procurement of liveries, Gift &

complimentary, local Purchase, Department Imp

rest, Printing of Stationary & Visiting Cards etc.

TRANSPORTATION : Hiring of Cars/ uses, staff Cars/ Buses, excursion

trips, Rail/Air Booking, Duplication Section.

ESTABLISHMENT : Township Horticulture, Maintenance of Public

Building, House-keeping of Township House,

Community Hall, Ladies Club, Celebration of

Festivals, Township House & Shop Allotment,

Hospital & security Administration, Fish culture,Horticulture of township


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CONTRACT CELL

LEGAL CELL

: Compliance of labour laws & contract Labour

[R&A] Act, Verification & Witnessing

Disbursement of Wages to Contract Labour,

Matters related to HAIA, SUDA& Payment Legal

Cases, Disciplinary matters.

PF & TERMINAL

BENEFITS JMC

: DBF & terminal Benefits, Joint Management

Council, Post Retirement Medical Assistance, Pf

trust, Suggestion Scheme.

COMPUTERIZATION

NODAL OFFOCER

: LAN Implementation in P&A Department,

computerization & other matters related to

Computer.

HAEP

ADMINISTRATION

: Day to Day Administration matters of HAEP

HOSPITAL

ADMINISTRATION

: Day to Day Administration matters of Hospital

ESTABHLISHMENT

Organizations are dynamic, organic ongoing systems consisting of many

individual. A successful management focuses on the individual and then attempts to relate the

individual to the group and different groups to the organization. Individuals join organization

to fulfill their goal and aspirations within the framework of the organization. It is one of the

major functions of management to convert the goals and aspirations of the individuals into the

goals of the organization.

KRIBHCO in the formative stages inherited miles and practices from IFFCO.

Subsequently, need was felt to streamline and standardized the existing practices and to

envolve R&P guidelines for KRIBHCO.

In line with the above, R&P guideline were formed and revised from time to

time. There are only guideline for the management and do not contain the detailed procedure

to implement the same.

Salient feature of the guidelines are given below:

General:-

Vacant position in organization chart shall not automatically be treated as

operative to be filled by recruitment or promotion. The positions shown in the chart are

estimated, keeping in view current and future requirement and are to be operated only when it

becomes necessary to operate them with the approval of competent authority.

Recruitment from outside agencies shall be made when , in the opinion of the

management suitable persons are not available within the organization.


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INCREMENT

Employees shall be entitled to annual increment in accordance with the

increment rates specified in various pay scales.

The first increment shall be awarded to KRIBHCO employees on initial

appointment subject to satisfactory completion of probation period in the following manner:

FOR EMPLOYEES JOINING BETWEEN DATE OF INCREMENT

a) 1st January to 30th June 1st January

b) 1st July to 31st December 1st July

In case of promotion to the next higher grade, the date of increment of an employee

arrived at on his initial appointment in KRIBHCO shall remain unaltered throughout his

service career in KRIBHCO unless otherwise specifically ordered by the Management to take

care of the anomaly in pay fixation and Leave Without Pay/ Absence from Duty.

If an employee remain absent from duty on account of leave Without Pay,

Unauthorized Absence, the date of award of next annual increment shall be postponed by the

corresponding period for which he remained on LWP/ unauthorized absence.

PROMOTION

Promotion means an improvement in pay, prestige, position and

responsibilities of an employee within organization.

In KRIBHCO, promotion is based on seniority cum merit basis. The

Establishment Section prepares the Eligibility List of employees for promotion twice in a

year on May 0 and November o1 of each year. Up to H/ H1 grade, promotion are done at

plant level by constituting committee which conducts personal interview to assess the

suitability of the candidate.

1. Preparation of list of eligible employees for promotion as per R&B Guidelines.

2. Annual Appraisal report of eligible employees to be got filled by the concerned

officers.

3. Competent Authoritys approval for constitution of the Department Promotion.

4. Bio-data of the eligible for constitution of the Department promotion Committee.

5. Bio-data of the eligible employees to be prepared for the DPC.


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6. Communication to the Chairman of the committee for fixing the date of DPC.

Communication to the employees for attending the DPC.

7. Making physical arrangements to the interview.

8. Preparation of selection proceedings.

9. Approval of the competent authority to be obtained for the selection proceedings.

10. Vigilance clearance to be obtained giving the promotion order.

11. Promotion ordered.

For promotion of G grade and above, Establishment Section put before the

Committee the Bio-data of eligible employee, annual appraisal report with rating and

signature of each member of the committee and forwards it to Managing Directors approval.

WAGE & SALARY ADMINISTRATION

Wage & Salary Administration refers to the establishment and implementation

of sound policies and practices of employee compensation. Generally, the remuneration paid

to the workers known as wage while the payment made to office staff known as salary.

Wage is the remuneration paid for service of labour in production, skilled and

unskilled person or employer, worker technicians. Salary refers to the monthly paid to clerical

administrative and professional employees.

A sound wage & salary administration tries to achieve these objectives:

a) For employees:

Employees are paid according to requirement of their job. This eliminates

inequalities.

The changes of favoritism are greatly minimized.

Employees morale & motivation are increased because wage program can be

explained & based upon facts.

b) To Employer:

A wage & salary Administration reduces the likelihood of friction &

grievance over wage inequities.

It enhances an employees morale & motivation because adequate and

fairly administered wage are basic to his wants and needs.

It attracts qualified employees ensuring an adequate payment for all the

jobs.


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The information about employees, presentation and absence provided by the

tine keeping system is directly linked with computer section. Then after pay slip is preferred

with the Master-Date. Finally after all additions and deductions, pay is paid to the employees.

The productivity linked bonus and incentive schemes also introduced by the KRIBHCO. The

employees of KRIBHCO have been paid bonus linked with productivity i.e. annual capacity

utilization of the plant and materials.

In KRIBHCO calculation of wage and salary is done by establishment section

in Finance & Account Department. In this section, wage and salary is calculated on

computers. It is the responsibility of personnel department which has to handle wages and

salary distribution together with account department.

Salary are payable on the last but on working day of every month. In this

organization for the wage and salary administration, first prepared the Master-Date under the

personnel department. In this Master-Date there are various column like grade, employee

number, pay scale, code, P.P. Account, number, name, basic-pay, living-pay, house rent,

over-time pay, medical allowance and other facilities rate etc.

Demotion:-

Demotion in any organization is very rare. The same is the case in KRIBHCO.

Demotion in the company occurs only in case of major indiscipline. This action is taken after

much inspection of the fault made. A special committee is formed for the inspection of the

whole matter and then finally a report in generated whether the employee is found guilty or

innocent. It even involves legal and police formalities many times. Provisions of this

indiscipline are available under certified standing order. Some of the Major Indiscipline is

as follows:

1. Breach or habitual breach of the provisions provided in the service rules framed orinstructions or orders issued by the management from time to time and in force.

2. Insubordination or refusal to obey.

3. Violation of any condition or term contract or employment.

4. Any big loss suffered by the company due to any employees disregard of operation or

carelessness in operation or maintenance.

5. Acting in a manner prejudicial to the interest or reputation of the organization.

6. International non-submission/ late submission of immovable property return in the

manner prescribe rules of complete account of movable or immovable properties


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acquired by the employee or concealment of any material fact relating to acquisition

of such properties.

Discipline & conduct:-

1. An employee shall, at all times, conduct himself soberly and temperately and show

proper respect and civility to his superior and persons having any official dealings

with KROBHCO.

2. An employee shall serve honestly and faithfully and shall use his utmost endeavors to

promote the interest of the organization.

3. All employees shall be full time employees of KRIBHCO and will devote themselves

exclusively to the duties assigned to them from time to time when required to do.

4. During the period of employment with Kribhco, no employee shall hold any office of

profit outside the organization or engage himself in any other service, business and

trade.

5. No employee shall take with him for his own personal use, any photograph, sketches,

etc. regarding any business or activity of the organization, building, plant process,

work etc.

6. No employee shall use organizations name or properties etc. for his personal use or

benefits.

7. An employee shall keep himself up to date with the knowledge, skill, information,

ability etc.

WELFARE FACILITIES IN KRIBHCO:-

(I) Housing:-

Townships facility to the extend of 99% of requirement of employees is

provided by KRIBHCO. KRIBHCO provided semi furnished accommodation with proper

housekeeping, security arrangements, repair and maintenance of houses in Township, cable

connection, electrical maintenance in the township for its employees. Park facilities with

equipments for playing of children, sitting arrangement in the garden, lawn maintenance,

plantation and maintenance of trees, maintenance of flower plants for beautification are also

being provided. Shopping canters in the township are provided to cater to the need and


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requirement of residents of the township. Post Office, Bank and PCO facility are provided in

the township. Township of KRIBHCO, in overall provides facilities for modern life.

(II) Educational Facilities:-

KRIBHCO has provided two schools namely Sunflower School in Gujarati

Medium and Central School in Hindi / English medium. Theses two school are situated inside

the township and are having facilities up to 12th standard. Both pre-primary and pre-nursery

educational facilities are also provided in township. Apart from this, KRIBHCO provides

transport facilities and arrangement for the children of township to avail educational facilities

available outside township i.e. in Surat city or in other nearby areas. Coaching classes and

Entrance examination preparatory classes are also run by KRIBHCO provides grants to

Officers Club and Staff Club to maintain Library and Reading Room in the township.

Officers Club and Staff Club arrange Computer-learning classes.

(III) Medical Facilities:-

KRIBHCO provides free medical facilities to its employees, their spouses,

dependent members of his family, be eligible for reimbursement of:

1. Fees paid by him to an authorized medical attendant for consultation whether at iscleaning or at he employees residence.

2. Fees paid for injection, dressing or minor surgery,

3. Fees paid for X-ray and pathological test etc.

4. Expenses of treatment for chronic or any specialized treatment or incase of

hospitalization, at actual.

5. Reimbursement of medical expenses for routine treatment Rs. 4500/- per annum

(2250/- for Township Residents)

In addition to above KRIBHCO is having its own hospital having both in-

patient and outpatient facility. Specialists from Reputed hospitals / practitioner visit

KRIBHCO visit KRIBHCO Hospital for Township Residents. In case of specialized and

chronic diseases cases are referred from KRIBHCO hospital to Empanelled Doctor/Hospital

in Surat or outside Surat.

(V) Other welfare Facilities:-


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a. Employees Cooperative Society is there which is managing distribution of

Milk, LPG Gas, dealership, Provision Stores and credit facilities.

b. Ashirvad Old age home for Township residents.

c. Workers Education Scheme is prevalent in KRIBHCO.

7. Marketing Department

Introduction: -

Marketing is the process of planning & executing the conception, pricing,

promotion and distribution of ideas, goods and services to create exchanges that satisfy

individual and organization goals.

In simple sense marketing is concerned with selling. But now a days the

concept has enlarged its meaning. We know that a product is provided with the aim of sale.

Marketing management covers marketing research, new product development and so many

other important functions.

The important responsibilities of the marketing departments are: -

Volume sales: - total production to be sold in each season.

Price realization: - selling price at level to the consumer (farmer) at

MRP.

Cost of marketing: - discounts, credit, distribution expenses, traveling

and communication &warehousing expenses, advertising& sales

promotion expenses, etc should be minimal.

In KRIBHCO marketing management has the task of regulation of level,

liming and character of demand in a way that will help the organization to achieve its


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objectives. The aims of producer totally depend on marketing, without marketing not a single

unit can run.

KRIBHCO marketing philosophy aims not to sell fertilizer but to help

farmers by education them the modern farming technology and the use of fertilizer for

optimum crop out. KRIBHCO sold urea mainly through co-operative societies. KRIBHCO

has been making celebrate arrangements for dispatch of urea from plant site to various

destinations as per requirement by optimum use of rail & road.

In KRIBHCO marketing is done by head office at Delhi. KRIBHCO has

nationwide marketing network and has covered all major stated in the countries. Presently it

is operating in the Uttar Pradesh, Himachal Pradesh, Delhi, Madhya Pradesh, Maharastra,

Karnataka, Tamilnadu, Punjab, Haryana, Gujarat, Rajasthan, Andhra Pradesh, West Bengal

and Bihar. (Chart) &marketing act ivies.

KRIBHCO Head offices

Central marketing offices co-operatives offices

State mkting offices state mkting offices state mkting offices

Area mkting offices Area mkting offices Area mkting offices

Field representative field representative field representative

Marketing Activities: -

1. Farmers Benefits programmes.

2. Sanket Haran bima yojana.

3. Marketing of BVFCL urea,


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4. ISO 90001-2000

5. Seed multiplication programme

6. Gramin vikas trust. (Rural Development Trust)

Product mix: -

KRIBHCO, manufacturing nitrogenous fertilizer and allied product viz. urea,

Ammonia, Bio-fertilizer, 30 mega watt power plant operation & maintained of heavy water

plant of department of atomic energy, But KRIBHCO is having urea as its main product.

They use Ammonia as raw material &main input of urea& sale the excess production to other

non-fertilizer industries.

Product mix of KRIBHCO

Urea Bio-fertilizer Seeds

-Wheat

I Azotobacter -Paddy

II Azospirillum -Pulses

III Rhizobium 1. Gram

IV phosphorus solubilising 2. Pea

Miro-o rganism (P S M) 3. Arthan

4. Urd

5. Lentils

6. Moog-Oil- seeds

1. Mustand

2. Soya bean

3. Castors


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Kribhco urea production and sales

Year Production (Lack MT) Sales (Lack MT)

2003-04 16.31 15.72

2004-05 16.94 17.21

2005-06 16.03 16.38

2006-07 17.73 18.37

2007-08 18.06 17.37

KRIBHCO UREA PRODUCTION & SALES

14

14.5

15

15.5

16

16.5

17

17.5

18

18.5

19

2003-04 2004-05 2005-06 2006-07 2007-08

YEARS

LACK

MProducti

Sales

Kribhco bio-fertilizer production and sales


Year

Production

(MT) sales(MT)

2003-04 384 354

2004-05 389 3732005-06 296 351

2006-07 603 516

2007-08 560 611

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KRIBHCO Bio fertilizer Production& Sales

0

100

200

300

400

500

600

700

2003-04 2004-05 2005-06 2006-07 2007-08

YEARS

Production (MT)sales(MT)

Kribhco ammonia production

8.5

9

9.5

10

10.5

11

11.5

2003-04 2004-05 2005-06 2006-07 2007-08

Years

KRIBHCO Ammonia Production

Producti

Kribhco seeds production and sales

Year

Production (Lack

-Qtls) Sales (Lack Qtls)

2003-04 1.04 0.76

2004-05 0.84 1.1

2005-06 1.08 1.06

2006-07 1.21 1.11

2007-08 1.54 1.49


2003-04 9.63

2004-05 9.92005-06 9.92

2006-07 11.17

2007-08 10.92

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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2003-04 2004-05 2005-06 2006-07 2007-08

Years

KRIBHCO Seeds Production & Sales

Production (Lack -Q

Sales (Lack Qtls)

Mode of Distribution: -

Proper planning and close monitoring enabled the society to dispatch it urea as perECA allocation from plant site to various destinations by optimal use of rail and road mix.

1. Railway: - major part of fertilizer almost 79% is transported through railway line to

the states like Maharastra, Madhya Pradesh, Punjab, Haryana and Uttar Pradesh.

2. Roadways: - the dispatch of fertilizer through roadway is limited to the state

like Gujarat, Rajasthan, Madhya Pradesh, and many other states

is round around 21%.

Road

19%

Rail

81%

Rail Road

Details of competitorsKRIBHCO generally dose not face any stiff competition as the government

decides the major parts of its marketing activities. Chemicals and fertilizer ministry of India

decides the ratio of sales of fertilizer and chemical in the industry. Generally competition

exists in free trade. Some of the competitors of KRIBHCO are:


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Sr. no Name Name

1 GNFC Gujarat Narmada

Fertilizer Corporation

2 GSFC Gujarat State Fertilizer

Corporation

3 IFFCO Indian farmer Fertilizer

Corporation

4 RCF Rashtriya Chemical

Fertilizer

5 NFL National fertilizer Ltd

6 HFC Hindustan Fertilizer

Corporation

7 FCL Fertilizer Corporation of

India

8 Nagarjuna -

9 Chambal -

Sales promotions: -

In modern world there is very strict competition so for stand in the market,

strongly sales promotion program is very important. The main aim of sales promotion is to

increase the sales and increase the number of customer. KRIBHCO s promotional Programs

are carried to farmers field through technically qualified and trained field force under the

highly qualified agronomists and managers the major promotional activities consists of the

following.

1. Block Demonstration

2. Co-operative conference

3. Krishak Bharti Seva Kendra

4. Crop seminars

5. RGB Members visits

6. Farmer benefits programs.

1. Block Demonstration:-

In these demonstrations, latest agricultural production technology was

demonstrated visa-a visa local practice. The review demonstration were organized on

different crops on approximately 100 hectares of land and a large number of farmers

visited this plots various other field Programme like farmers meetings etc were organized

at the site of these demonstration. Block demonstration was conducted in the state of U.P,

M.P, Haryana, Punjab & Gujarat.


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1. Co-operative Conference:-

All the product of KRIBHCO marketed by the co-operative societies, so their

mangers and salesmen are trained on better business, fertilizer and other agro- input

storage, soil testing etc. A group of 100 participants is trained in each co-operative

conference sufficient quality of crop folders and other technical material, provided to each

participant for further distribution to farmers through co-operative societies.

2. Krishak Bharti Seva Kendra

The society has established 10 Kendra in the state Haryana and Punjab. These

are successfully in operation and through these centers a package of inputs and services is

being provided to farmers right at their doorsteps. The society is already in process of

establishing 27 more seva Kendras in state of U.P, M.P, Rajasthan, Punjab, and

Maharastra.

4. Crops seminars

The society organized one crop seminar with collaboration of IIFCO in state

of Maharastra. In the seminar, experts I the field of agriculture were invited for expressing

their view points.

1. RGB members visitRepresentative General Body (RGB) delegates are the representatives of

Kribhco member society. They act as KRIBHCO spokesperson art various platforms

throughout the country. It is in the interest of KRIBHCO to provide maximum

information about its programmes to its members. Short study visit of 1-3 days duration

in each term are arranged for these RGB members at Hazira plant or other project site.

Advertisement

Consumer is the king in the modern market. Without consumer the task of

business is incomplete. So consumer must know about the product of company. Now a

day, advertisement is the best way to introduce the product to consumer.

KRIBHCOs advertising mainly depends upon its customer & their

customers are farmers and they are mostly illiterate. So, media gives advertisement in

regional language, but in present time farmers are also develop so advertising strategy

also taken into consideration. Company gives its advertisement in local newspapers also


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like Gujarat samachar, loksata, and jansatta, sandesh etc T.V; Radio magazines are also

taken as a media for these purpose.

Different language like Hindi, Punjabi, Marathi and Gujarati over various

stations of all over India radio. For the popularity of KRIBHCO large no. Of holdings &

roadside boards are installed on highway, bus pan ness, wall paintings and glow sing at

airports have also been installed for above purposes. Advertisements have been realized

from time to time in the dealing newspapers, and other periodical, special supplements

were brought in English, Hindi and regional languages.

8. TRANSPORTATION DEPARTMENT


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Transportation

Thus, customers are the aim of any business. The most important task of any

business unit or organization is to fulfill customers needs by providing them product or

service on right time, price and place. Customer satisfaction is the success of any

organization. For that material should be, reach on it is desired Place on right time and this is

possible only by any Transportation facility. Transportation is link between customer &

organization. Transportation is a most important function of any organization.

In KRIBHCO, Transportation alone accounts approximately 80% of the total

marketing cost. Hence, it requires utmost attention, careful planning and judicious approach

in finalization of transport contracts. In order to bring down the marketing expanses,

KRIBHCO is transporting its products (urea) by rail and road. Rail dispatches on an average

contributes 75% while road dispatches are 25% of the total urea produced and dispatched

from plant.


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The Road Transportation from plant is presently undertaken for the states of

Gujarat, Maharashtra, and M.P & Rajasthan. These states fall in economy zone where road

transportation is cheaper as compared to rail. Dispatch instructions (DIs) are given only to

such destinations where transportation by road is comparatively cheaper than rail. Hence,

annual contracts for road transportation for above states are performed.

The cheapest transportation mode is selected for dispatching the material to

the respective places. The production of the plant is more than 100%. For commercial sale the

price is Rs.7200 per metric ton, and for agricultural purposes its Rs.4800 which is subsidized

and sales tax free rate. There are 2 Silos where the materials can be stocked for 1 month. In

Gujarat on average, an everyday 80-ton is dispatched. The economic zones are Maharashtra,

MP, and Rajasthan, which touch the boundary of Gujarat. The documentation should reach

the consignee before the consignment reaches the consignee. The document which is of prior

importance is RR (railway receipt-railway), BL (bill of lading-Ship), AB (Airway bill-Air),

and LR (Lorry receipt-Road).

The product is sold at fixes rate throughout India. There are two types

of transportation subsidy and the other one is gives by FICC. Government fixes the retention

price, which is cost of production given by the government. The production is controlled

according to FCO standards that are fertilizer control order.

Major players in Fertilizer Industry in Gujarat

1) KRIBHCO

2) IFFCO (KALOL)

3) IFFCO (KANDLA)

4) GUJARAT NARMADA FERTILIZERS CO. LTD, (BHARUCH)

5) GUJARAT STATE FERTILIZER CO. LTD., (VADODARA)

9. PRODUCTION DEPARTMENT


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Production Department

Production is the process by which, raw materials and other inputs are converted into

finished products. It involves many functions such as manufacturing process, product and

process design, plant layout, inventory control, plant maintenance, etc. KRIBHCO has the

Production Department in the Plant Premises and it works in harmony with the Marketing

Department and Transportation Department as well as all other departments. It also includes

Stores and Purchase Department which take care of all the materials used in the production

process.


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Production Performance:-

Ammonia Urea

Year Qty

(in lac MT)

Year Qty

(in lac

MT)

1998-1999 10.50 1998-1999 17.22

1999-2000 9.86 1999-2000 15.40

2000-2001 10.80 2000-2001 17.72

2001-2002 9.39 2001-2002 15.17

2002-2003 9.47 2002-2003 15.57

2003-2004 9.63 2003-2004 16.31

2004-2005 9.90 2004-2005 16.94

2005-2006 9.92 2005-2006 16.03

2006-2007 11.17 2006-2007 17.73

2007-2008 10.92 2007-2008 18.06

PLANT DETAIL:-


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Plant-1 Plant-2

Ammonia 1520 MTPD 3040 MTPD

Urea 1310 MTPD 5240 MTPD

Bio-fertilizer - - 250 MTPA

(Per annum)

STEAM & POWER GENERATION


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The steam generation plant supplied by FOSTER WHEEL POWER, UK

consist of 3 boilers (2 running & 1 stand by) capable of producing 275 MT steam per boiler

per hour at 105 ata pressure and 510C to supply steam to the process plant and power

generation. The boilers are of single drum Monowall Balanced draft type, complete with all

accessories and mountings. The boilers can fired to 100% MCR with gas. All three boilers are

connected to a single common header and from their distribution of steam to different use

points.

In power plant with help of boiler, heater, deaerator and other instrument steam

is generated. From this steam about 65% is used in production plant and about 35% is used

for power generation. Power is generated with the help of two turbo generators.

The power plant consists of two extractions cum condensing type T.G. sets

each of 15 MW capacities, supplied by BHEL. Out of this KRIBHCO require 25 MW power

and remaining supplied to G.E.B.

OFF SIDE PLANT


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OFFSITES is the Off the Site plant. All those plants, which are not within battery

limit of main process plants, are called Offsites facilities. All the supporting plants of Urea &

Ammonia plants are called offsites plants.

The major offsite plants at KIBHCO Hazira Complex are:

1. Raw Water Canal, Kakarapar Pump House & Reservoirs

2. Water Pretreatment Plant

3. D. M. Plant4. Cooling Towers

5. Inert Gas Plant

6. Air Compressor House

7. Ammonia Storage & Handling

8. Effluent Treatment & Disposal System

9. Drinking Water Supply System

10. Sewage Treatment Plant

11. Emergency Power Generator Sets

12. Centralized Chemical Storage & Handling

10. MATERIAL DEPARTMENT


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MATERIAL DEPARTMENT

PURCHASE STORES

RECEIPT SECTION CUSTODY SECTION DISPOSAL SECTION

Spare Section Scrap Section

.

11. Purchase Department

Purchasing is one of the basic functions of Inventory Management and forms a major

pa rt of it. W ha t to bu y, w hen to buy, where it buy, how much to buy, h ow muc h to pay and how much

to stock are the fundamental of the Inventory control. It also involves creative functions such as

development of new resources, introducing new materials and sources in the undertaking etc. It needs

considerable expertise not only n egotiating but also in the techniques of competition and studying of

economic trends in respect of materials to be purchased in large quantity. Every rupee saved by the

good purchasing goe s directly in to the profit for the simple reason is that it is not spent at all.

Objectives of Purchasing:-


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The objective of Inventory purchasing can be enumerated as follows:

o To M aintain Continuity of production,

o To contribute to the com petitiveness of the end product,

o To contribute towards higher productivity,

o To buy for the best ultimate value not necessarily at the lowest initial price,

o To co ntribute towards standardization, variety reduction and value analysis programs,

o To increase profits through effectiveness in purchase contract.

Existing Purchase Procedure in KRIBHC O:-

To study the existing purchase system, the purchase procedure followed by the purchase

department have been analyzed and evaluated on the basis of observation and discussions with

concerned personnel of KRIBHC O is as follows:

1. Responsibilities of the purchase functions are,

The purchase department issues the material manager purchase orders/ contract after the

approval of the com petent authority. The purchase function in other o ffices (like head office at N EW

DELH I and its various branch offices) is headed b y the single officer designated for that purpose. The

indenters from v arious departments are issuing inquiries, inviting bids, entering into co rrespondence

or negotiation with vendors / contractors. All requisition for purpose is duly processed in accordance

with procedure laid down, w hich is forwarded to purchase department for nece ssary action.

2. Registration / Selection of Suitable Vender:

Purchase department is responsible for developing a list of approved vendors for various

types of m aterials and service as per procedure. An advertisement is issued in all the leading news

pa pers invi ting app lica tions in the prescribe d Performa fo r regist ra tion of supp lie rs an d con trac tors

for listing out of various types of purchase and service that are likely to be m ade during the next three

to five years. The application received are scrutinized by a committee consisting of a representative

from technical, finance and purchase department nominated by General Manager and ascertained the

resources, capacity and quality of workmanship of the vendor. The committee also calls the vendors

and contractors for personnel discussion and clarifies the applications and obtains such other

information as may be considered necessary by the comm ittee.


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The list of approved vendors and contractors as to be up dated at least everyfive years by

issuing a press adv ertisement.

3. Requisition to Purchase:-The indenters from various departments are raising a requisition called the Material Purchase

Requisition (M PR) for pu rchase in the prescribed Performa. It shou ld be ensured that the requisition

for purchase is com pleted in all respect with regard to.

(a) Description of the material / equipment / scope of work.

(b) Materia l o f cons truction / specif ication .

(c) Temperature / pressure / standard i f anywhere applicable.

(d ) Qua lity and chit o f measu rement.

(e) Date when del ivery of material / service is required.

(f) E stim ate d valu e and bu dget h ead .

(g) Whether item is a stock item / non - stock item and fast moving / slow moving.

The requisition for purchase of stock items is raised by the stores department after the quality

in stock-.has reached the re-order level as determined for the respective items. Such requisition

amongst other-particular also indicates the minimum, maximum and reorder level, the date on which

last supply was received and average con sumption per month since last purchase.

4. Purchase Function after Receipt of MPR:-

To enter requisition in indent register, the requisitions are checked for specification, quality,

code numbers, budget heads etc. This number is entered on all the four copies of indent, one copy isfor action by purchase department, second copy is sent to Finance department, third copy is returned

to indenter, and fourth copy is retained in the purchase department's master file.

5. Floating Inquiries:

Purchase department issue inquires to approved vendor or press advertisement depending

upon value of pu rchase which is followed as per the following guideline.


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Estimated value of purchase

order / work order/contract

Minimum of vendors to whom

inquiry to be issued

Minimum N o. of bids

to be obtained.

UptoRs.20,00,000/- 5 3

Exceeding Rs 20 ,00,000/`

All suppliers on the approve

list 3

6. Purchase Order / Work Order:-

The recommendation of the tender committee is routed though the finance department to

enable them to record the value of commitment in the budget records confirms availability of funds

under the approved b udget and also record financial concurrence.

As soon as the recommend ation of tender committee is approved by com petent authority, thepu rchase departmen t issues purchase /work order to the reco mmen ded succe ssfu l bidder.

The pu rchase department is responsible for following up o f the purchase order/contracts with

vendors and transporters until the material is reached and accepted at the plant/stores.

On receipt of materials at plant site/stores, the stores department w ill fill up the store receipt

voucher and arrange the inspection from the inspection department or indenters, as the case may be

necessary.

12. STORE DEPARTMENT

OBJECTIVE:-

To render materials service to the organization by receiving, issuing the

materials, preserving the materials which in custody, disposing the scrap/surplus materials.


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FUNCTION:

To receive all types (i.e. stock & non stock) materials, to arrange inspection of

materials.

To keep materials safe custody, issue of the materials to user department.

To initiate action for procurement of stock items, custody & issue to user

departments.

Raising indent for hiring services of contractor for material handling,

transportation, grass cutting etc.

STORE DEPARTMENT IS ALSO DIVIDED INTO THREE SECTIONS:

RECEIPT SECTION

CUSTODY SECTION

DISPOSALSECTION

The stores have about 64663 Nos. of items out of which about 1800 items are stock

items. Stores initiate the procurement action of stock items. The store is spread over in 02

lakhs sq. Mtr. Of space out of which 12000 sq. Mtr. Is covered area. Normal working hours

of stores is general shift hours. However, in case of shut down, emergency service of stores is

made available as by the user departments.


STORES

FLOW DIAGRAM

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PROCEDURE FOR RECONCILIATION OF INVENTORY STATUS

It is a system for identifying the unwanted inventory and the deviation in physical stocks for

reconciliation of the stock and maintaining the accuracy in management reporting system

for inventory status.


CUSTODYSECTION

RECEIPT

SECTION

DISPOSAL

DEL. OF MATERIALS

SOLD TO SUCCESSFUL

BIDDERS

(THROUGH MSTC)

SCRAP FROM PLANT HANDLING OVER

SURPLUSMATERIALS FOR

A T

ISSUE OF

MATERIALSTO

USER DEPT.

RECEIVING

MATERIAL

FROM

VENDORS &OTHER UNITS.

PROV.

INSURANCE

RETURN OF

REJECTED

MATERIALS

TO VENDORS& DESPATCH

OF

MATERIALS

J FORM FORCONTRACT OF

MATERIALS

HANDLING &TRANSPORTA

TION TO

PURCHASE

RETURN OF

MATERIAL

THROUGH

INSPECTION OF

MATERIALS

SRV

ACCEPTED MATERIALS

MPR FOR

STOCK

ITEM TO

PURCHASE

PRESERVATIONOF MATERIALS

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All items in stocks are to be physically verified once in a year so that necessary

adjustments can be made in stocks after obtaining necessary approvals from competent

authority.

PROCEDURE:-

Every item will be verified under perpetual type of inventory verification system

once in a year.

The finance or their representative of nominated hired agency will prepare the group

wise list of the items.

On hand quantity against the individual item will be noted with their respective

location.

The physical stock is then verified with the representative of stores dept.

The deviation will be checked, scrutinized and sorted out.

The final list of unsettled item with deviation in quantity will be prepared.

Management approval for write-off / write on the stock is obtained.

Stock is adjusted through a voucher- SAV

13. FINANCE DEPARTMENT


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INTRODUCTION OF FINANCE:-

Finance is the blood of the business. Finance Management is that managerial activity

which is concerned with the planning and controlling of the firms financial resources.

Finance management is the most important activity of the firm and it means that the firmsecures capital, if needs and employees it.

Finance management is mainly concerned with raising fund in the suitable

manner using the funds as profitably as possible, planning future operations and controlling

current performances and future developments through financial accounting, cost accounting,

budgeting and other functions.

Financial Planning

Planning is the design of a desired future state of an entity and of the effective

way of bringing it about. Also it involves the determination of the future causes or action for

accomplishing the objective of the enterprise.

Financial planning is essentially concerned with economical procurement &

profitable use of funds. It is used for determined by realistic investment decisions. Financial

planning should estimate the resources that will be required to carry out the operation of the


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firm and determine how for these resources can be generated by the firm itself and how far

they will have to be attained externally.

KRIBHCO has a fixed policy for financial planning and it depends upon the

requirements of the fund whichever they use. Then a report is prepared by the financemanager including total requirements. He collects the information and prepares the report and

submits it to the Managing Director.

Capitalization:-

Capitalization means total capital of the firm that introduced in business to carryout

commercial activity. Capitalization concerns with the decision regarding the total

requirements of long term funds of the firms. Capitalization means total amount of

companys capital or total of its capital stock.

In KRIBHCO, the shares are very high and it has large amount of reserves and

surplus.

FINANCING PATTERN

Original Final

Rs. Cr US$ million Rs. Cr US$ million

EQUITY

Government of India 344 202.59 328 193.17

Cooperative Societies 22 12.96 20 11.78

IFFCO 105 61.84 97 57.13

Sub Total 471 277.39 445 262.08

LOAN

Government of India 342.70 201.82 342.50 201.71

Internal Generation 15 8.83 ---- ----

IDBI & Other FInst. 129 75.97 102.50 60.36


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Sub Total 486.70 286.62 445 262.07

Cooperative

Societies

4%

IFFCO22%

Government ofIndia

74%

Government of India Cooperative Societies IFFCO

FINANCIAL ACHIEVEMENT FROM BEGINNING (RS. IN CORERS)

NET PROFIT:

YEAR Before

tax

Prov. For Income

tax

After tax

2003-2004 210.10 77.00 138.10

2004-2005 248.29 60.97 187.32

2005-2006 40 5.77 34.23

2006-2007 220.45 66.81 153.64

2007-2008 186.43 45.33 141.10

DIVIDEND PAID TO SHARE-HOLDERS:

(Govt. India, IFFCO, Other Society)

Year Amount(Rs. in

Crores)

Dividend %

2003-04 58.56 12

2004-05 97.92 20.06

2005-06 34.39 8

2006-07 88.33 20

2007-08 74.50 15


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CAPITAL BUDGET

The other major budget is capital budget. The formation of capital budget is on the

same pattern and follows same procedure as revenue budget.

It is important to understand distinction between capital and revenue expenditure. It

benefits of an expenditure are expected to accrue for long time; the expenditure is of capital

nature. Any expenditure whose benefit expires within the accounting year or expenditure that

merely seeks to maintain the business or keep assets in good working condition is revenue

expenditure.

On face of it, this distinction seems easy, but many of times it becomes quite

complicated to differentiate between these two expenditures.

Capital budget involves the planning to acquire worth while projects, together with

the timings of the estimated cost and cash flows of each project. Such projects require large

some of funds and have long term implications for the firm. Capital budgets are difficult to

prepare because estimate of the cash flows over a long period have to be made which involve

a greater degree of uncertainty.

The capital budgets are generally prepared separately from the operating budgets. In

many companies, there is a committee separate from the budget committee. To appropriate

funds for capital investment projects. In the capital budgeting, the profitability of each project

has to be carefully evaluated. Various techniques can be used to determine the profitableness

biases and capable of clearly indicating whether the project should be accepted or not.

REVENUE BUDGET:-

A letter duly signed by Chief Manager (F&A) is sent to all departments asking them

to submit the likely requirements of the year, before specific date (mostly last day of

November). They will also have to send the justification with adequate proof for the sum they

demand. Concerned department while submitting their proposals will also submit the report

containing details of expenditure done under the same head last year.

From all the information thus available, a preliminary budget formation takes place.

Subsequently discussions are held at various levels to check the validity of the budget so

formed and finally after passing through all checks it is presented before the Board ofDirectors for final approval.


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The above written procedure is not as simple as it seems and takes 4-5 months. The

concerned department also has to ensure that it neither asks for too much or too less amount

for in first case it would be questionable for excess amount lying unutilized, whereas in later

case they would not be given any additional amount to purchase in excess of budget.

Working Capital Management:-

Management of Working Capital refers to the management of current assets as

well as current liabilities. It mainly deals with managing the short term finance, negotiating

favorable credit terms, controlling the movement of cash, administering account receivable,

and monitoring the investment in inventories. Also it is changing with the change in currentassets and current liabilities. We can get the amount of working capital of KRIBHCO from

the following data of the year.

Current Assets - Current Liabilities = Working Capital

193,647.03 - 29,678.63 = 163,968.4

Working Capital Management involves a good deal of time in managing

Inventories, Receivables and Cash and Bank Management.


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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED

MARCH 31, 2008

Particular Year ended 31.03.2008 Year ended 31.03.2007Income From operation

Sales(Net of discounts) 140,002.80 135,383.39

Excise Duty (1,514.47) (986.29)

Concession from Government of

India

84,479.12 222,967.45 51,158.77 185,555.87

Other Revenue 26,730.12 24,811.70

Accretion in Finished Goods:

Closing Stock 11,020.20 14,696.98

Less: Opening Stock (14,696.98) (3,676.78) (6,376.20) 830.78

246,020.79 218,68835

Less: Cost of operation/other

outgoings

Consumption of Materials &

stores:

Raw materials 65,404.97 47,310.96

Packing materials 4,138.33 3,933.34

Chemicals & Catalysts 724.75 505.57

Power, Fuel & Water 40,848.15 111,116.20 30,793.20 82,453.07

Purchases:Seeds & Chemicals 2,180.02 1,361.72

Urea, DAP &am

Documents

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