PRESENTATION ON SUMMER TRANING BY :- Gurmukh Singh Vikas Bhatnagar MBA (IFS)

National Fertilizers Limited (N.F.L) was registered on 23.08.1974 with an authorized capital of 500 crores. NFL set up two fertilizer plant in Bathinda (Punjab) and Panipat (Haryana), NFL has emerged as an industrial giant in the fertilizer sector. Over the years company has expanded into a multi unit company with four manufacturing units with varied technology. Three of these units are strategically located in the high consumption areas of Punjab & Haryana and one is in Madhya Pradesh. The company has an installed capacity of 35.49 lack MT of Nitrogenous fertilizers.

Company Profile

  The plants at Nangal, Bhatinda and Panipat are based on

partial oxidation of fuel oil/high petroleum stock and matching Urea capacity of 1550 MT per day at Bhatinda and Panipat and 1450 MT per day Urea at NANGAL while the rest being converted to Industrial Products as per demand.

  The Vijaipur Plant was a landmark

achievement in project management in India. The plant was completed well within time and approved project cost. In recognition of this achievement, the project was awarded the First Prize on Excellence in Project Management by Govt. of India.

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 The company has an excellent track record and high profits, with highly motivated and dedicated workers and officers – no industrial relation problem.

N.F.L. was given the “Mini Ratna Category-I” by the Govt. of India in 1998 based on the company’s overall performance during the preceding years..

Recently NFL has been “A” in Public Sector Undertaking because of its constant good performance.

 

Salient Features of the Company

National Fertilizers Limited, Ranbaxy Laboratories Limited and Indo Rama Synthetics Limited have secured the National Safety Awards for the year

2001-02. NFL has signed memorandum of association for

2009-10 with the Department of Fertilizers. NFL is the first company in Pubic Sector having the

certification of ISO-9002, ISO-9001 and ISO-14001. NFL has linked agreement on 26th February, 2009

with Gas Authority of India Ltd. For transportation & supply of Natural Gas to NFL’s Panipat, Bathinda and Nangal Plants.

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Nangal Unit of NFL has received “ICWAI” National Award for Excellence in Cost Management 2008” from Institute of Cost and Works Accountants of India in appreciation of the efforts in Cost management.

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Registered office Scope Complex, core-111, 7 – Institutional

area, Lodhi road, New Delhi- 110003 

Corporate office A-11, sector –24, District Gautam Budh

Nagar, Noida (U.P) 201301 

  To produce targeted quantity of fertilizer

efficiency and economically by optimum utilization of resources with due regard to safety and production control.

MISSION STATEMENT

  BOARD LEVEL Mr. Satish Chandra C&M Director Ms. Neeru Abrol Director (Finance) Mr. S. K. Ghai GM I/c (Marketing) Mr. R. K. Aggarwal Director (Technical) Dr. Subir Kumar Bhattachary Director Mr. N. K. Goyal Director Mr. Tek Chand Company Secretary

MANAGEMENT TEAM

GM

Chief Manager

(F&A)

Chief Manager (P&A) Chief Manager Mat. & DGM Mktg.

GM (O&M)

Senior Manager

F&A

Sr..Manager

P&A

Dy. Mgr.(Mkt) Manager (Mat. / Tptn) _

DGM (MCI)

(ELECT) (TS)

(PROD)

Mgr/Dy/Asst. Manager Manager/ Dy/Asst. Manager

Mgr/Dy/Asst. Manager Chief Mgr.

Dy/Asst. Manager

Staff Staff Staff Staff

NFL National Fertilizers Ltd. RCF Rashtriya Chemicals fertilizers ltd. IFFCO Indian farmers Fertilizers Co-Operative

Ltd. KRIBHCO Krishak Bharati Co–Op. Ltd. GNVFC Gujarat Narmada Valley Fertilizers

Company Ltd. IGFCC Info Gulf fertilizers & Chemicals Ltd. CFCL Chambal fertilizers & chemical Ltd. TCL Tata Chemical Ltd. OCF Oswal Chemical and Fertilizer Ltd.

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STRENGTHS:   High capacity to produce. Percentage of profits in industrial products is very high. The company with an excellent track record of high profits. The NFL plants are located in virgin market for some of the

industrial products. An easy starter more that 25 years experience in the fertilizer

industries. Highly situated amidst high fertilizer consumption areas in the

state of Punjab, Haryana and Madhya Pradesh. Lower capital cost- plants at Bathinda, Panipat and Nangal. Fully

depreciated Vijaypur plant with an investment of Rs. 533 crores and vijaypur expansion plant with an investment of Rs. 1071 crores against the present glass root plant cost of about Rs. 1500 crores.

SWOT ANALYSIS

Large equity base. Old and energy intensive fuel oil based Nangal,

Panipat and Bathinda requiring high maintenance. High cost of production in fuel oil based plants. High investments for revamp/replacement and

change over of feedstock from fuel oil/ LSHS to LNG.

Single nutrient product base. Highly centralized system. Lack of sufficient promotional and publicity

activities. Requirement is seasonal.

WEAKNESSES

Growth in fertilizer consumption in the eastern market of the country.

Marketing of neem coated urea of large scale. Marketing of agriculture inputs/services under

one roof. Marketing of other fertilizer like DAP, MOP, SSP

to harness existing imbalance in nutrients base and to move towards the NPK ratio of 4:2:1

Marketing of seeds and pesticides. Marketing of specialized services and

association in joint venture in India/abroad.

OPPORTUNITIES

Decline in the consumption of nitrogenous fertilizers in predominant market areas.

Energy intensive i.e. fuel oil based could face closure due to new policy on fertilizer unless technology modifications are implemented.

Dismantling of distribution system. Availability of cheaper improved fertilizers. Increasing price of inputs i.e. fuel

oil/LSHS/Naphtha/gas in India. Requirement of large investments for

modernization of fuel oil/LSHS based plants.

THREATS

Sr. No. Product Chamical formula

Used for/industry

1 Methanol(CH3OH)

Formaldehyde Automotive antifreeze Chemical Synthesis Aviation Fuel Rocket Fuel Dehydrator for natural Gas

2 Nitric Acid Dilute (HNO3)

Organic Synthesis Photo engraving Medicine Preparation of Nitro Refining of Silver

Industrial Products

3 Ammonium Nitrate (NH4NO3) Explosive, Pyrotechnics Nitrous Oxide Absorbent for Nitrogen Oxides Ingredient for freezing mixture Oxidiser in solid rocket properties Nutrient for Antibiotics Catalyst

4 (S) Sulphuric Acid Sugar Industry Rubber & Tyre Industry

5 Industrial Grade Urea (NH2CONH2)

Animal Feed Synthetic resins Textile Finishes Melamine resins Paints and Dyes Drugs and Pharmaceuticals

6 Liquid Oxygen (O2) Steel Manufacturing Copper Manufacturing Welding and Cutting Medical purposes

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product Used for7 Liquid Nitrogen (N2) Animal Husbandry for Semen

preservation Electronic Industry

8 Carbon Slurry(C) Rubber Industry Ink making industry

9 Carbon dioxide Gas (CO2) Aerated Water Dry Ice

10 Anhydrous Ammonia (NH3) Nitric Acid production Urea production Nitriding of Steel Refrigerant Solvent Yeast Nutrient Rocket Fuel Reducing Agent for Ores

11 Sodium Nitrite (NaNO2) Organic Synthesis Rubber additives Chemical reagent Pharmaceuticals Photographic reagent Pickling meat Dyeing and printing of fabrics Rust proofing and medicines etc.

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product Used for12 Sodium Nitrate (NaNO3) Oxidizing agent

Oxidizer in solid rocket propellants Fertilizers Glass Manfacturing Chemical reagent Dynamits/Matches Military Explosives Referigerant/Medicines

13 Liquid Argon (Ar) Arc Welding Plasma cutting Lamp industries Aircraft and Missile industry Copper refining Metal refining

14 Liquid CO2 Aerated Water Dry Ice

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RESEARCH SITE  National Fertilizers Limited- Nangal Unit.   OBJECTIVES OF THE STUDY  “Good better best, never let it rest till your good is better

and your better is best”.  The objectives of the study are as follows:  To study the ratio analysis of NFL. It Includes: -

◦ To study their cash, receivable and inventory management◦ To analyze performance and position of the company.

 

TYPE OF RESEARCH 

A.CASH INFLOW AND OUTFLOW   CASH INFLOWS 1. Receives from corporate office Noida in sale of

products. 2. Sales in canteen 3. Rent 4. Income from hospital   OUT FLOWS 1. Petty expenses 2. Payments of salaries  

CASH MANAGEMENT:-

INCENTIVES To attract the customers at distant

places company provides cash rebate, distance rebate and quantity rebates.

    PENALTY No penalty for delayed payments is

imposed.

RECEIVABLE MANAGEMENT

Purchase department. Store department.

INVENTORY MANAGEMENT

NAME FORMULA 2008-09 2009-10 2010-11

CURRENT RATIO

C.A/C.L 1.34 2.04 1.82

ACID TEST RATIO

Q.A/C.L 1.06 1.06 1.41

LIQUIDITY RATIO 

NAME FORMULA 2008-09 2009-10 2010-11

INVENTORY TURNOVER RATIO

C.O.G.S/Avg. Stock.

64.73 Times 71.22 Times 70.20 Times

INVENTORY CONVERSION PERIOD

No. of Days/Inventory turnover ratio

5.6 days 5.12 days 5.19 days

DEBTOR TURNOVER RATIO

Net Sales/ Debtor

13.82 Times 5.30 Times 6.31 Times

ACTIVITY RATIOS

NAME FORMULA 2008-09 2009-10 2010-11

Debt Equity Outsiders funds/ share holders fund

1.19%1.08%

.50%

Proprietry Ratio

Share holders fund/ Total Asset

45.66% 63.72% 65.12%

Fixed Assets to Net Worth Ratio

Fixed Asset/Net worth

39.08% 42.93% 19.93%

LONG TERM SOLVENCY RATIO

KINDS OF WORKING CAPITAL

On the basis of concept

On the basis of time

Gross working capital

Net working capital

Permanent working capital

Temporary working capital

As I did summer project for two months in NFL Nangal unit this is a great experience for me . But time period is not sufficient that person can analyze the working capital by different tools but in this short span I did my best to analyze financial position of plant.

  FINDINGS: -   This unit is mainly producing urea apart from this they producing other product too which are

related with urea production. Methanol gas is providing good profit to unit as we see in current year also. But I found that company is confined to limited area they should diversify there plant and start entering in more competitive environment.

  Company is using old machinery for production due to this requirement of manpower is more and

the sales are just satisfactory.    Repair & Maintenance expenses of the plants are on higher side.  The unit incurs heavy Freight charges, which are more than the freight subsidy received from the

Govt.  Salary & wages, Social, Administrative and marketing expenses of the unit are very high. At the

same time these expenses constitute a major part of the cost of production. The cost of major raw material is increasing at alarming rate.

Findings:-

ORIENTATION IN DIFFERENT FINANCE DEPARTMENTS

A. COST AND MANAGEMENT ACCOUNTS B. PURCHASE ACCOUNTS C. WORKS ACCOUNTS D. PERSONNEL ACCOUNTS E. STORES ACCOUNTS F. PROJECT ACCOUNTS G. ESTATE AND MISLENEOUS ACCOUNTS H. SALES ACCOUNTS

TRAINING EXPERIENCE