PREFACE

Summer Training constitutes an important part a good practice oriented management

course. According to the syllabus of Information Technology, every student has to
undergo 4 weeks summer training for exposure in any commercial industry or
organization. So for the partial fulfillment of this requirement, I underwent my training at
IFFCO AONLA , BAREILLY. Training is necessary to understand that how theoretical
concepts are applicable practically. During my short stay in the organization, I was
introduced to entire company. I visited many Departments- Human Resources,
Accounts, Administration, Regulatory and Safety, Main plant etc.














ACKNOWLEDGEMENT
Expression of sincere gratitude is just a partial acknowledgment. The accomplishment
of this Project would have not been possible individually without the encouragement,
assistance & valuable support from various sources. My vocabulary falls short of word
to express my sincere gratitude to Mr. Deepak Yaday (account officer) under whose
guidance I had opportunity to carry out the present work.
I am very thankful to Mr. K.K. Pandey (Sr. Training officer) & Mr. D. Kalia (Manager
training) who support me & helped me throughout the project. I am also thankful to Mr.
D.R. Kundra (Sr. Manager-accounts) who helped me throughout the project with his
been supervision & guidance. I am thankful to F & A staff & to all the employee of
IFFCO who cooperated with me during my training period. Last but not the least , I
would like to express my gratitude to Mr. A.U.Ahamed ( Assistant Manager) and
Mr.Sandeep Ghambhir (deputy. Manager) for their help and guidance. I owe a deep
sense of gratitude to all the respondents who gave me valuable information for the
project.




VINOD KUMAR
PGDCA (First Year)
Government Polytechnic
Fatehgarh, Farrukhabad (U.P.)




ABSTRACT
In every organization management is that of an organization which concerns with
planning, organizing, directing and controlling of various marketing activities to attain the
business objectives. It is the science and art of preparing plans and organize them as
well as direct the human efforts to control the force and utilize the materials for the
benefits of human being. As an integral part of the curriculum, all MBA students are
required to undergo a practical training in some industry. The main objective of this
training is to supplement students theoretical knowledge with exposure to practical
operation of an organization. This provide the student with better understanding of all
functional areas of management and management skills applied in those functional
areas. In pursuance of the said requirement, I had my Summer Training at Indian
Farmers Fertilizers Cooperative Limited Aonla, one of the big producer of fertilizer in
Asia. My project was on the bases of computer work in Indian Farmers Fertilizer
Corporative Limited, I had a contrast of both happiness and anxiety and had undergone
difficulties also but with the immense assistance proper guidance and enough
systematically. I really enjoyed working under congenial and convivial environment of
IFFCO, Aonla.





Indian Farmers Fertilizer Co-operative Limited (IFFCO) was registered on November 3,
1967 as a Multi-unit Co-operative Society. On the enactment of the Multistate
Cooperative Societies act 1984 & 2002, the Society is deemed to be registered as a
Multistate Cooperative Society. The Society is primarily engaged in production and
distribution of fertilizers. The byelaws of the Society provide a broad frame work for the
activities of IFFCO as a Cooperative Society.
IFFCO commissioned an ammonia - urea complex at Kalol and the NPK/DAP plant at
Kandla both in the state of Gujarat in 1975. Another ammonia - urea complex was set
up at Phulpur in the state of Uttar Pradesh in 1981. The ammonia - urea unit at Aonla
was commissioned in 1988.
In 1993, IFFCO had drawn up a major expansion programme of all the four plants under
overall aegis of IFFCO VISION 2000. The expansion projects at Aonla, Kalol, Phulpur
and Kandla have been completed on schedule. Thus all the projects conceived as part
of Vision 2000 have been realized without time or cost overruns. All the production units
of IFFCO have established a reputation for excellence and quality. A new growth path
has been chalked out to realize newer dreams and greater heights through Vision 2010
which is presently under implementation. As part of the new vision, IFFCO has acquired
fertilizer unit at Paradeep in Orissa in September 2005. As a result of these expansion


projects and acquisition, IFFCO's annual capacity has been increased to 3.69 million
tons of Urea and NPK/DAP equivalent to 1.71 million tons of P2O5.
IFFCO has made strategic investments in several joint ventures. Godavari Fertilizers
and Chemicals Ltd (GFCL) & Indian Potash Ltd (IPL) in India, Industries Chimiques du
Senegal (ICS) in Senegal and Oman India Fertilizer Company (OMIFCO) in Oman are
important fertilizer joint ventures. Indo Egyptian Fertilizer Co (IEFC) in Egypt is under
implementation. As part of strategic diversification, IFFCO has entered into several key
sectors. IFFCO-Tokyo General Insurance Ltd (ITGI) is a foray into general insurance
sector. Through ITGI, IFFCO has formulated new services of benefit to farmers. 'Sankat
Haran Bima Yojana' provides free insurance cover to farmers along with each bag of
IFFCO fertilizer purchased. To take the benefits of emerging concepts like agricultural
commodity trading, IFFCO has taken equity in National Commodity and Derivative
Exchange (NCDEX) and National Collateral Management Services Ltd (NCMSL).
IFFCO Chhattisgarh Power Ltd (ICPL) which is under implementation is yet another
foray to move into core area of power. IFFCO is also behind several other companies
with the sole intention of benefitting farmers.
The distribution of IFFCO's fertilizer is undertaken through over 38155 co-operative
societies. The entire activities of Distribution, Sales and Promotion are co-ordinate by
Marketing Central Office (MKCO) at New Delhi assisted by the Marketing offices in the
field. In addition, essential agro-inputs for crop production are made available to the
farmers through a chain of 158 Farmers Service Centre (FSC). IFFCO has promoted
several institutions and organizations to work for the welfare of farmers, strengthening
cooperative movement, improve Indian agriculture. Indian Farm Forestry Development
Cooperative Ltd (IFFDC), Cooperative Rural Development Trust (CORDET), IFFCO
Foundation, Kisan Sewa Trust belong to this category. An ambitious project 'ICT
Initiatives for Farmers and Cooperatives' is launched to promote e-culture in rural India.
IFFCO obsessively nurtures its relations with farmers and undertakes a large number of
agricultural extension activities for their benefit every year.


At IFFCO, the thirst for ever improving the services to farmers and member co-
operatives is insatiable, commitment to quality is insurmountable and harnessing of
mother earths' bounty to drive hunger away from India in an ecologically sustainable
manner is the prime mission. All that IFFCO cherishes in exchange is an everlasting
smile on the face of Indian Farmer who form the moving spirit behind this mision.
IFFCO, to day, is a leading player in India's fertilizer industry and is making substantial
contribution to the efforts of Indian Government to increase food grain production in the
country.
Aonla unit Quality
THE ORGANISATION

Indian Farmers Fertilizer Cooperative Limited operates two Ammonia plants, each with
a production capacity of 1740 MTPD and four Urea plants, each with a production
capacity of 1515 MTPD at Aonla Unit, Bareilly, Uttar Pradesh in India. Ammonia plants
have been designed based on technology from M/s Haldor Topsoe, Denmark with
steam reforming of Natural Gas and /or naphtha and Urea plants have been designed
based on technology from M/s Snamprogetti, Italy with IFFCO Aonla is one of the most
energy efficient & prestigious fertilizer complexes and is based on Natural Gas from
HBJ pipeline. The Unit has been certified for ISO-9001, ISO-14000 and OHSAS-18001.
IFFCO Aonla has always been a front runner in 'Green Revolution' and has, always
taken pride in implementing quality initiatives and practices in its activities. Quality
concepts inculcate continual Improvement through fresh initiatives and review of the
existing practices.
QUALITY & ENVIRONMENTAL MANAGEMENT SYSTEM AT IFFCO AONLA
lFFCO Aonla is having well defined and implemented quality policy and environment
policy in line with corporate quality, safety, health and environment policies. An
approach of total quality management (TQM) is in practice at all levels in the unit.


QUALITY POLICY OF IFFCO AONLA UNIT
lFFCO Aonla is committed to achieve satisfaction of its cooperative societies, farming
community and customers by manufacturing and supplying specified quality product by
pursuing:
Improvement of Technology for enhancing/maintaining productivity and growth.
Creating safe & healthy working conditions and eco-friendly environment.
Co-operation and team spirit.
Development of human resources.
ENVIRONMENTAL POLICY OF IFFCO AONLA
IFFCO Aonla Unit is committed for continual improvement and protection of
environment by setting and reviewing the objectives and targets through environmental
management system focusing at:
Compliance of applicable legislation at work place and other requirements, which the
organization subscribe. Monitoring and conserving natural resources. Effluent and
waste minimization by way of recycling and reuse. Developing awareness and
competence amongst.
Employees,ContractorsStaffandRelatedAgenciesonEnvironmentissues.Emergency
preparedness for safety of concerned personnel and plant.
QUALITY CONTROL & RESOURCE CONSERVATION
Aonla has created following facilities to monitor and control Product Quality & Resource
Conservation:
A well equipped quality control laboratory. Technical core group for monitoring
product quality and energy consumption. Conservation of natural resources by
implementation of EMS.
HRD cell for creating all round awareness and competence on quality &
environmental issues.


ENERGY CONSERVATION & COST REDUCTION
Energy audit forms an integral part of energy conservation at IFFCO Aonla. Based on
the energy audit of various sections of the plants carried out on regular basis, various
steps are taken to conserve energy either by way of optimizing the plant operations or
by implementing the energy conservation schemes. Salient features of the strategy
adopted tor energy conservation are as given below :
a. Incorporation of proven energy conservation schemes involving large
investments.
b. In-house minor modifications for energy conservation schemes involving
small investments.
c. Utilization of excess steam from one plant to another.
d. Trimmed operation of cooling towers to achieve most optimum cooling
water temperature.
e. Minimize the unscheduled shutdowns by adopting exhaustive preventive
maintenance schedule for all the standby equipments.
f. Minimizes the loss of unproductive inputs during startup by minimizing
venting and by using the process gas from one plant to another plant
during start up.
g. Optimizing the process parameters.
h. Operating only one gas turbine in place of two gas turbines during winter
months.
i. Adopting change in original philosophy by operating motor drives during
normal operation in place of condensing turbines, thereby reducing heat
loss to cooling water which is a major heat sink.
j. Operating only 3 units of urea plant at high load in place of 4 units at low
load as and when required.
k. Checking of vents and relief valves for passing at regular intervals and
maintain a record for the same.
l. Monitoring of Energy Consumption & Cost of Production on Daily Basis


m. Monitoring of overall specific energy consumption and cost of inputs per
MT of Urea.
n. Monitoring of energy consumption of individual plants/sections by
monitoring the overall steam balance of the complex.
o. Task force to work on bringing down energy requirement in the complex.
p. Efficiency up gradation and waste reduction through implementation of
ISO 9001 / ISO 14001.
q. Good housekeeping.
With the above efforts, the average capacity utilization of plants at Aonla Unit has been
more than 100% resulting in realization of capital costs as well as saving of foreign
exchange by avoiding import of fertilizers. So far, Aonla Unit has produced and supplied
over 30 Million MT of Urea in 22 years of operation.






SAFETY PRACTICES
The quality levels of Aonla Unit reflect in its safety performance also. Aonla Unit has
observed accident free period for almost three years. Several safety features are in
built in the design of the plant. Longest continuous accident free running figure of 947
days has been achieved which is equivalent to 8.37 million man-hours. A detailed
disaster management action plan has been prepared to overcome any unforeseen
occurrence. Fire alarm system network has been installed and commissioned
throughout the factory consisting of automatic fire detection system and manual call
alarm stem.

ADOPTION OF DEVELOPMENT IN THE FIELD OF INFORMATION
TECHNOLOGY
1. Spreading Computer usage and IT awareness in the plant by providing
Computers in each and every section of the Plant; connected to each other
through High speed Gigabit Fiber Optic based Network. About 450 numbers of
PIV Computers are installed in the Plant premise sat present.
2. Provision of Internet Access on all installed computers , for accessing
common web sites like Banks, Examination Results, Railway Reservation,
Fertilizer ministry etc. Apart from this, full Internet Access provided to about
150 Computers across the plant.
3. Provision of E-mail Id to all officers and few common area in the Plant, totaling
520 in number, covering all employees in the ratio of 1:2 Enhancement of
Office Automation tools in English as well as Hindi; provision of paper- less
Work Flow System for Leave Application, Salary Advance, LTC/LTE, EL
Encashment etc. for Employees.
4. Introduction of State of the Art Biometric finger-print based Attendance
Recording System, to do away with Proxy Punching or malpractice of any
kind, in daily attendance of Employees.


5. Deployment of Web based Applications in the area of Material Management,
Finance & Accounts, Human Resources(HR), Production & Technical
Reporting, Product Dispatch, Plant Maintenance, Lab Analysis & Quality
Control, Visitors/ Material Gate Pass, etc. for management Information and
Decision Support.
6. Facility of On-line Video Conferencing with other Units and Corporate Office of
IFFCO, through MPLS-VPN based Wide Area Network.Provision of IP Phones
at important locations in the Plant to freely communicate with Plant persons of
different Units, HO and Marketing Offices of IFFCO.
ENVIRONMENT FRIENDLY APPROACH
Implementation of Environmental Management System - ISO 14001.
Developing the environment & natural surroundings in plant & township to
upgrade the quality of work life.
Green Belt development
Use of effluent water for development of green belt.
Ban on use of polythene bags in the township.
Tree plantation drive
Conducting awareness programmes to cover all employees on environmental
issues.
COMMUNITY DEVELOPMENT
IFFCO Aonla Unit is driven by a unique sense of social responsibility and always
strives to improve the socio-economic conditions inside and outside of the factory
complex.
IFFCO Aonla Unit has provided direct as well as indirect benefits to people in villages
surrounding the fertilizer complex. 196 villagers have derived direct benefits in the
form of direct employment while the other villagers, from whom land was acquired
got indirect benefits through various employment opportunities like providing goods
and services to the inmates of IFFCO Township, working as petty contractors etc.


Balanced fertilizer dose education scheme (BFDES) : To increase Farmers
awareness regarding Balanced Fertilizer Dose (BFD), balanced fertilizer dose
education scheme has been taken up at IFFCO Aonla which involves educating the
farmers on the issue and distribution of kits free of cost.
Prior to inception of IFFCO Aonla Fertilizer Complex the literacy rate of the area was
very poor. Intact the local inhabitants were not aware of the importance of education.,
particularly education of females. According to census of 1991 the literacy rate of
male and female was 38% and 12% respectively in the area. In 1998 as per the
study conducted by IRMED, New Delhi the literacy rate has gone up to 450% and
17% respectively. Moreover, the no. of school going children has also increased by
around 150%.
Schools: Facilities for education, for children of IFFCO Township and nearby villages
have been provided in form of a Kendriya Vidyalaya for students of classes I to XII;
Subah Shiksha Kendra for Nursery to class V; Tiny Tots School for Nursery and KG
classes. Along with other subjects, knowledge on use of computers is also imparted
to the students of Kendriya Vidyalaya. Elaborate facilities are provided in all the
schools for sports in form of a large playground and sports equipment.
IRDP PROGRAMME & OTHER WELFARE ACTIVITIES
IFFCO Aonla Unit initiates and implements various programs out of its welfare fund
and IRDP fund. Following programmes are being implemented under these
schemes:
a) Health Camps
b) Eye Camps
c) Animal Health Campaign
d) Education Programmes on Improved Methods of cultivation
e) Construction of Village Path Ways
f) Distribution of Plants through Social Forestry
g) Drinking Water Facilities like providing hand-pumps in villages


h) Construction of Bus Stops
i) Financial Aid to schools / institutions of nearby area
j) The commendable work which is executed successfully by IFFCO has brought
tremendous improvement in the overall quality of life of local habitants. It has
motivated villagers to live healthy and happy. The socio-economic
programmes are reaping following benefits :-
k) Overall community and rural development.
l) Initiating co-operative culture among people
m) Earning goodwill among people for IFFCO Aonla Unit as a socially responsible
organization
COOPERATIVE CULTURE
lFFCO Aonla takes great pride in its strong fundamental i.e. co-operative culture,
sustainable advantages are achieved through constantly reinventing the organization
and practicing the following :
An inbuilt approach in practice at all levels in organization to demonstrate that
lFFCO Aonla is not an entity but it is a ret1ection of farmer's identity.
Technical task force and core groups have been created to monitor and take
initiatives to bring down energy consumption and costs as well as address
environmental issues.
Identification of performance centers, observation by effective management
systems and accountability at all levels.
Developing the competence and potential of human capital so that continuous
organizational development takes place in order to meet the change-
challenges.
Energy, Safety, Quality and Environmental audits are carried out at periodical
intervals for continual improvement.
Employees suggestion scheme.
Celebration of Technology Week, Productivity Week, Rajbhasha Saptaha &
Safety Week.


Participation of members from all levels in the quest of improvement by
creating various committees and forums.
IFFCO TOWNSHIP: A MODEL OF HEALTH
It has been rightly said "Where there is a will, there is a way". This proverb has been
found absolutely correct in a remote but very well developed mini Township in
Bareilly district which is an example for providing complete physical, mental and
spiritual health to its residents and neighboring areas. Patients consisting of township
residents & their dependents and 20 non-dependents are being provided medical
facilities by specialist doctors in different fields. Around 20 patients are being
provided rehabilitation services by Physiotherapist every day. Regular preventive
medical checkup of around 30 employees per month is being carried out as per
OHSAS-18001 plan. High standard medical facilities through tertiary centers,
counseling and welfare camps are being provided that have resulted in good health
of residents of Township and surrounding areas. It is a matter of great satisfaction
that health of IFFCO Township residents is comparable and even at times better than
health of the people of the developed countries.





National Safety Council Award for IFFCO Aonla.
IFFCO Aonla Unit has won the NSCI Safety Award- 2002 (PRASHANSA PATRA) from
National safety Council of India. The awards committee under the Chairmanship of Shri
Anil D Ambani has declared the results of the NSCI safety awards for the year -2002 .
The achievement reflects the corporate culture on safety and health built assiduously
with commitment and leadership from the top. The award was presented by Shri Sushil
Kumar Shinde , Hon'ble Chief Minister of Maharashtra at a function held at 10.00 AM on
27th December, 2003 at Walchand Hirachand Hall ( 4th floor), Indian Merchants
Chamber, LNM IMC Building, Churchgate ,Mumbai. Shri Anil D Ambani, Chairman NSC
presided over the function.
The award was jointly received by Sh.V.K.Bali, Sr.Executive Director (Technical)
and Shri H.C.Dave, Sr.General Manager, Aonla Unit.



Above : Shri V.K.Bali , Sr.Executive Director(Tech.)-IFFCO & Shri
H.C.Dave , Sr.General Manager, Aonla receiving the award from Shri
Sushil Kumar Shinde , Chief Minister Maharashtra.




MARKETING
Sales Performance
The fertiliser consumption in the country during 2006-07 is estimated at about 217 lakh
tonne nutrients (N+P+K) as against 203 lakh tonne nutrients achieved during2005-06
representing an increase of about 7 per cent. Material-wise, Urea consumption during
2006-07 is likely to be about 237 lakh tonne against 223 lakh tonne in 2005-06 i.e. an
increase of about 6 per cent. DAP consumption during 2006-07 is likely to witness an
increase of about 7 per cent at 72 lakh tonne as against 68 lakh tonne in 2005-06. The
imports of Urea & DAP in the country during the year 2006-07 were about 47 lakh tonne
and 29 lakh tonne, respectively. Inspite of the erratic weather conditions prevailing
during 2006-07, IFFCO achieved the highest ever sale of 86.10 lakh tonne fertiliser
material during the year.

Sales of Fertiliser Material
2006-07 compared to the previous year's record sale of 81.95 lakh tonne material in
2005-06 representing an increase of about 5 per cent. Higher sales could be achieved
primarily due to proper logistics management and intensive marketing strategy adopted
by the Society at all levels. Urea sales during 2006-07 were 52.41 lakh tonne as
compared to 50.11 lakh tonne achieved during 2005-06 representing an increase of
about 5 per cent. NPK/DAP sales during 2006-07 were higher by about 6 per cent at
33.69 lakh tonne (inclusive of 0.21 lakh tonne of MOP)

DISTRIBUTION NETWORK
As against 31.82 lakh tonne in 2005-06. The Productivity 'per employee' in Marketing
Division at 5718 tonne of fertiliser material sold was the highest during 2006-07 as
compared to the previous highest achievement of 5565 tonne during 2005-06. The
budgeted sale for the year 2007-08 has been projected at 90.00 lakh tone comprising
46.70 lakh tonne Urea and 43.30 lakh tonne NPK/DAP. IFFCO distributes its fertilisers
in 29 States/UTs in the country through the cooperative network. Cooperative structure
differs from State to State and societies at each level (district/ taluka/ village), which
perform different functions in different states. At the State level, Apex Cooperative
Marketing Federations, whoever are involved in fertiliser trade, act as wholesalers,
Marketing Societies at district/ taluka level act as sub-wholesalers while Primary
Agriculture Cooperative Societies (PACS), which are the backbone of the cooperative
system, act as retailers at grass root level.

Product Movement
Your Society dispatched for sale about 90.50 lakh tonne of fertiliser material (Urea &
NPK/DAP) inclusive of 9.10 lakh tonne OMIFCO Urea, 4.6 lakh tone imported Urea on
GOI Account, 6.8 lakh tonne imported DAP and 0.4 lakh tone Muriate of Potash (MOP)
as compared to 84.4 lakh tonne during 2005-06. In order to make fertilisers available at


the doorstep of farmers, the Society hired warehouse space all over the country at 2100
locations from CWC/ SWC & Cooperatives during 2006-07 with a storage capacity of
about 9 lakh tonne as against storage space of 10 lakh tonne in the previous year. Out
of this, approximately 66 per cent of space was reserved with Cooperatives i.e. State
Cooperative Marketing Federations and Village Level Cooperative societies. The
average storage space turnover during the year was 9.20 as against 7.6 in 2005-06.

Product Channels
As a matter of policy, IFFCO is channelising its entire fertiliser production and imports
through the cooperative network. In case cooperatives are not able to absorb the
quantities offered by IFFCO, other institutional channels are involved. Small quantity is
also sold through 158 Farmers Service Centres owned and operated by IFFCO .

Cooperative Societies
IFFCO sells its fertilisers through a network of more than 38,150 cooperative societies
in different States of its marketing territory. These societies are well scattered, covering
almost all the villages in the country and are the backbone of the cooperative system.
Nearly 62 per cent of the societies are getting fertilisers directly from IFFCO whereas 29
per cent are getting through State Federations.

Farmers Service Centres
Apart from selling fertilisers through its network of Cooperative Societies, IFFCO
operates its own 158 Farmers Service Centres (FSCs) spread over in 10 States,
namely, Punjab, Haryana, Rajasthan, Himachal Pradesh, Uttar Pradesh, Uttarakhand,
Bihar, Madhya Pradesh,West Bengal and Goa. In addition to supply of fertilisers, seeds,
agro-chemicals etc. under one roof, these centres also serve as the contact point for
providing technical know-how to farmers. During 2006-07, these FSCs sold about 3.68
lakh tonne fertiliser as against 2.92 lakh tonne in 2005-06. The average turnover per
FSC during 2006-07 was Rs. 238 lakh as against Rs. 182 lakh in the previous year.
These FSCs also organized need based promotional programmes such as farmers
meeting, soil test campaigns in the villages around FSCs with a view to disseminate the
message of balanced and efficient use of fertilisers. Literature relating to package of
improved practices for various crops, balanced use of fertiliser, soil testing etc. were
distributed to the farmers in local languages through these FSCs. In number of FSCs,
Kiosks with Agri-Portals have been installed, which are becoming popular among
farmers primarily due to availability of agriculture related contents in local languages.

IFFCO FRANCHISEES
During 2006-07, 329 cooperative societies took up the activity of warehousing, 207
societies undertook transportation of fertilisers from warehouses to their godowns and
48 societies handled the work of transportation of fertilisers from warehouses to other


societies. However, only 34 societies have so far taken up rake handling and
transportation of fertilisers as these jobs involve large finances and technical knowhow.
IFFCOis encouraging more societies to undertake such jobs.

ADOPTION OF COOPERATIVE SOCIETIES
During 2006-07, sale of IFFCO fertilisers through 1307 adopted societies was 6.27 lakh
tonnes, which was about 7.3 per cent of the total sales of IFFCO fertilisers. The average
sale per adopted society worked out to 480 tonne. These were utilized as platform for
dissemination of agri-knowledge, and for improving economic and social conditions of
the community.

COMMUNITY CENTRES
As on 31st March 2007, 176 Storage-cum-Community centres were operating and 27
centres are under various stages of completion. The Storage-cum-Community Centres
are being utilized for storage of fertilisers and agricultural inputs, apart from providing
venues for organizing agricultural extension activities and social functions for villagers.

INVESTMENTS

Godavari Fertilisers and Chemicals Ltd. (GFCL)
The Society's investment of Rs. 8.25 crore in Godavari Fertilisers &Chemicals Limited
accounted for more than 25 per cent of the paid up share capital of the company.
IFFCO received a dividend of Rs. 1.60 crore from GFCL during 2006-07. The Society
had entered into Share Purchase Agreement with Coromandal Fertilizer Limited on 23rd
January, 2007 to sell its entire equity in GFCL at a total consideration of Rs. 120.01
crore. The transaction was completed on 12th April, 2007.

Indian Potash Ltd. (IPL)
IFFCO holds an investment of Rs. 2.68 crore in Indian Potash Limited (IPL) with equity
share holding of 34 per cent in the paid up equity share capital of IPL. IFFCO received a
dividend of Rs. 0.73 crore from IPLin the year 2006-07.

Industries Chimiques Du Senegal (ICS)
IFFCO holds around 19 per cent equity in ICS. During the year 2006, operations at the
plant faced some problems. However, the series of initiatives taken by the Board of ICS,
put into action a short term revival plan under a Management Committee. One stream of
the Plant has been in production since September 2006. Start up activities for the other
stream commenced in March 2007. The Government of Senegal is presently working on
a long term revival strategy for ICS along with IFFCO.




IFFCO-TOKIO General Insurance Company Limited (ITGI)
Honourable Members are aware that IFFCO TOKIO General Insurance Company
Limited (ITGI) was formed as a Joint Venture Company in the year 2000 for
underwriting general insurance business in India. IFFCO and its associates hold 74 per
cent equity in ITGI. As per provisional accounts for the year ended 31 March 2007,
profit before tax was estimated at Rs 42.46 crore as against Rs. 24.10 crore during the
year 2005-06. IFFCO received a dividend of Rs. 6.39 crore from ITGI for the year 2005-
06 Insurance Regulatory Development Authority (IRDA) has dismantled tariff regime
with partial effect from 1 January 2007. Consequent to tariff liberalization, the Insurance
Companies are free to charge their own premium subject to terms and conditions of the
tariff regime remaining unaltered. The de-tariff regime envisages stiff competition
among the players and is an upcoming challenge for the Company to retain its market
share and profitability. The Company is presently operating through 51 branches across
the country with plans to expand its operations further in the semi-urban and semi-rural
areas jointly with the IFFCO field offices and member societies. The subsidiary
company incorporated by ITGI, namely, IFFCO TOKIO Insurance Services Limited,
apart from sourcing direct business of Rs. 55 crore for ITGI during the year, has been
rendering services to the customers of ITGI both in urban and rural sectors. It is
presently operating at 89 locations across the country. The subsidiary company also
introduced Cooperative Model for distribution of its products and servicing ITGI
clientele. In recognition of the Company's efforts towards Marketing Channel
Development, M/s Tokio Marine Asia awarded ITGI with the First Prize for Explorer
Challenge for its remarkable achievement in terms of volume of business, business
model and sustainability in this category.

Oman India Fertiliser Company (OMIFCO)
IFFCO holds 25 per cent equity in the total equity of US $ 278 million in OMIFCO.
During the year ended 31 December 2006, OMIFCO produced 16.92 Lakh MT Urea. As
per audited accounts of OMIFCO, for this period, it recorded Revenue of US $ 288
million earning Net profit after Tax at US$ 115 million. IFFCO received dividend ofUS$
25.16 million from OMIFCO during 2006-07.

Kisan International Trading FZE (KIT), Dubai
Kisan International Trading FZE (KIT), which was set up as wholly owned subsidiary of
IFFCO in Dubai, has successfully completed two years of operation. KIT has been
trading in raw materials and finished fertilisers. KIT has also geared up for trading in
other diversified commodities on global basis. It has already ventured in exporting Iron
Ore Fines from India to buyers in China, and is also looking for import of Steam and
Cooking Coal from China and Indonesia to various buyers in India.





Indo Egyptian Fertilizers Company, SAE (IEFC)
In view of rapidly changing scenario of raw materials for phosphatic fertilizers in the
international market and with an objective to develop a long term and stable source of
supply, IFFCO promoted a joint venture in Egypt namely 'Indo Egyptian Fertilizers
Company SAE' (IEFC) along with El Nasr Mining Company of Egypt to set up
Phosphoric Acid plant with a capacity of 0.465 Million Tonne (P O ) per annum. IEFC
was incorporated in Egypt as a Joint Stock Company on 15 November 2005 with
shareholding of IFFCO and its associates at 76 per cent and El Nasr Mining Co. Egypt
holding 24 per cent equity. The project site is near El Sharawannah village in Edfu of
Aswan Governorate (Upper Egypt), which has the advantage of the proximity to
railways, highways, Nile river and Rock Phosphate mines. About 800 hectares of land
have since been handed over to IEFC on 15 February 2007 for the project site. The
Phosphoric Acid project, first of its kind in Egypt, is a landmark in Egyptian Fertilizer
Industry, IEFC was conferred Investor of the Year 2005 Award in Middle East and
North Africa by Organization for Economic Cooperation and Development (OECD),
Paris in association with Jordanian Investment Board. According to the current
schedule, the financial close of the project is expected by June 2007. The Phos. Acid
plant with a capacity of 0.465 million MT P O is expected to be commissioned by 2010.
The project will herald a new era for the socio-economic development of Upper Egypt
and step forward towards globalization of IFFCO as a multinational organization.
Commodity Exchange
IFFCO holds 12 per cent equity share in National Commodity and Derivative Exchange
Ltd. (NCDEX). It is a national level commodity exchange providing a trading platform for
Forward Commodity Derivative instruments, a national level market for the farmers'
goods with an opportunity to them of price discovery and to hedge risk through Forward
Trading. Currently, NCDEX offers contracts in 23 commodities including two bullions -
gold and silver. All other commodities are agricultural commodities. Efforts are
underway to add another 20 to 25 commodities including base metals and energy
products like natural gas, coal and power. NCDEX provides a range of services, which
include Price Discovery and Price Dissemination. NCDEX offers trading facilities
through its trading and clearing members located across over 250 centres in the country
NCDEX has generated sizable cash surpluses and it is planning some long term
strategic investments. The Profit Before Tax for the year 2005-06 was Rs. 42.76 crore.
Dividend of Rs. 0.54 crore was received from the company during 2006-07.

Collateral Management
IFFCO along with seven other institutions co-promoted National Collateral Management
Services Limited (NCMSL) in the year 2004. IFFCO holds 13.33 per cent equity in
NCMSL, which is the first national level collateral management company to be set up in


India On the agricultural side, NCMSL provides Procurement, Storage and
Preservation, Quality testing and Certification, Collateral Management and Information
Services. It accredits warehouses, which meet the parameters for scientific storage.
The Income from operations for the year 2006-07 is estimated at Rs. 51 crore with the
Profit Before Tax at Rs. 8.20 crore. The Company has envisaged the Storage Up
gradation Project and it is exploring possibilities of tie-ups with business partners. The
Company has also obtained approval from its shareholders for increase in authorized
share capital by way of issuing Preference and Equity Shares.

Power Project
IFFCO has diversified into the power sector by incorporating a joint venture company,
namely IFFCO Chhattisgarh Power Limited (ICPL) in joint venture with Chhattisgarh
State Electricity Board (CSEB) on 25 January 2006 to set up a 1320 MW coal based
mega power plant based on supercritical technology at an estimated cost of Rs. 5100
crore. The State Government has already earmarked the Tara Coal Block for this pit-
head thermal power project. ICPL is in the process of finalisation of a separate Joint
Venture Company along with Chhattisgarh Mineral Development Corporation (CMDC)
to develop the coal mines. IFFCO, as a majority partner, will hold 74 per cent equity in
the power company. The project is envisaged to be financed with a debt: equity ratio of
70:30. IFFCO has already subscribed to the initial share capital of Rs. 3.70 crore in the
company. ICPL has initiated the process of land acquisition, appointed the Main
Engineering Consultant, obtained statutory clearances like stack height and already
initiated steps for other clearances like Environmental Clearances and Mega Power
Project Status. The company is expected to achieve financial closure by the end of
2007. The first unit of 500/660 MW is likely to be commissioned by 2010. The JV
Company has also signed the Power Purchase Agreement (PPA) with CSEB for 90 per
cent of the net power produced from the project on power tariff as per CERC guidelines.
Balance power would be sold to other States.

Phosphoric Acid Project in J ordan
IFFCO signed an Mo U with Jordan Phosphates Mines Company (JPMC) on 10
January 2007 for setting up a Phosphoric Acid Plant with a capacity of about 1500 MT
per day P O at ESHIDYA in Jordan. In this JV, IFFCO will have 52 per cent stake, while
JPMC will hold 48 per cent. It is envisaged that the plant and associated facilities would
involve an
investment of around US $ 500 million. JPMC will make available the required quantity
of Rock Phosphate for the project.

VISION 2010
In pursuit of sustained pace towards its growth, the Society's perspective plan Vision
2010 aims at attaining an annual turnover of Rs. 15,000 crore by 2010.


For sustaining growth and ensuring adequate return to the member shareholders on
their investments, IFFCO is exploring opportunities for diversification into other
profitable business areas apart from investment in fertiliser sector. Under the
diversification plan, the Society would retain focus on farmer-oriented schemes and
strengthening cooperative infrastructure. Accordingly, the following business activities
have been identified under the VISION 2010 Installation of Ammonia Urea Plants
including acquisition of fertilizer units; Backward integration to meet feedstock
requirements such as Phosphoric Acid etc; Generation of Power ; Production and
marketing of micronutrients, seeds, bio-fertilisers, pesticides etc; Value addition to agri
products and marketing ; Information Technology and IT enabled services;
Establishment of Retail Chain in urban and semi-urban locations. Diversification into
new growth areas such as mobile telephony and communication technology in the rural
areas. Under VISION 2010, IFFCO acquired Phosphatic fertiliser complex at
Paradeep in September 2005, ICPL as the joint venture company with CSEB is
engaged in setting up the Power Plant. A joint venture to manufacture Phosphoric Acid
has already been established in Egypt, and another joint venture for setting up
Phosphoric Acid Plant in Jordan is being pursued.

COOPERATIVE DEVELOPMENT AND SERVICE TO FARMERS
Village Adoption
The village adoption programme was initiated by IFFCO with the objective of bringing
about overall economic development in rural areas with particular emphasis on
agriculture. Various promotional, social and community development programmes
based on specific need were organised. These included medical and veterinary check
up, drinking water facilities etc. During 2006-07, IFFCO worked in 402 adopted villages
under this programme.

Kiosks
IFFCO's 'Cyber Dhabas' (Farmers Information Kiosks) are being provided with a
desktop computer along with Internet connectivity to access information. The Kiosk acts
as a conduit through which farmers and cooperatives can access useful information and
avail of other services. As many as 108 such Farmer Information Kiosks were installed
in 17 different states of the country with information developed in 10 Indian languages.

IFFCO Chairs in Agriculture
The Society has instituted 17 IFFCO Chairs at Agricultural Universities/ Cooperative
Institutions in the disciplines of Agronomy, Soil Science, Agro Economics, Agricultural
Extension, Cooperation and Fertiliser Technology to provide a link between these
institutions in the areas of research, education and extension. IFFCO Chair Professors
are also involved in the promotional programmes. The Society organised 13th IFFCO
Chair Professors' Conference at Coimbatore during September 22 - 24, 2006. Work


done during the previous two years was reviewed by Resource Persons / Experts from
National Institutions and Action Plan for next two years was formulated.

PROMOTIONAL PROGRAMMES AND FARMERS EXTENSION ACTIVITIES
During the year under report, the Society conducted 3971 Field Programmes, 989 Sale
Point Personnel Training Programmes, 151 Crop Seminars and 978 Agricultural
Campaigns i.e. Soil Testing and Bio-Fertilisers. The Society analysed 1,24,624 soil
samples in different States including 32,008 soil samples tested by five mobile soil
testing vans for recommending optimum dose of fertilisers for improved productivity. In
addition, 6011 Critical Input Package (CIP) Kits containing seeds, fertilisers, bio
fertilisers, agro chemicals etc. were also distributed to the farmers in the field
programmes for raising good crops. These promotional programmes provide
opportunity for interaction between IFFCO, cooperatives and farmers on various issues
related to agriculture and cooperative development in general and fertiliser use in
particular. Literature in the form of crop folder, booklet, pamphlets etc. was distributed
during the field programmes.

KISAN SEWATRUST
The Society had established a charitable trust known as IFFCO Kisan Sewa Trust to
provide relief and rehabilitation to victims in the event of natural calamities, and
undertaking programmes for the welfare and critical medical attention of needy farmers.
IFFCO initially contributed Rs.10 crore towards its corpus fund. IFFCO employees also
regularly contribute to this Trust. The Trust organised Mega Medical Camps, Eye
Check-up Camps for the farmers of Rajasthan, Uttar Pradesh and Punjab. The Trust
sponsored two beds in Jagjiwan Sanatorium of Bihar to provide free medical treatment
to poor patients suffering from tuberculosis. The Trust provided financial assistance
for the medical treatment to about 100 needy farmers of different States. The trust is
extending financial assistance for welfare activities in the periphery of Paradeep Plant in
Orissa. The Trust also extends financial assistance to Indian Red Cross Society for
providing blood free of cost to the patients of thalassemia, haemophilia and blood
cancer. The Trust has also provided Rs. 10 lakh as financial assistance for medical
treatment to around 100 needy farmers of different states.

IFFCO FOUNDATION
The main objective of IFFCO Foundation is to promote innovation, create models and
catalyse their implementation. In its efforts to generate awareness and encourage co
operators to strengthen their own cooperatives about Policy Reforms, the Trust
organised various workshops, seminars, and symposia. The recommendations based
on these discussions were forwarded to Government of India. The thrust areas of the
IFFCO Foundation include Advocacy Role, Social Welfare, Preservation of Culture and
Providing Advisory Services for cooperative development. Self-help groups mobilised by
IFFCO Foundation provide opportunities to members in developing micro-enterprises


for ensuring better living standards, empowerment of rural women and youth through
risk management and vocational training.

FORESTRY DEVELOPMENT
IFFCO promoted a separate Multi-State Cooperative Society named 'Indian Farm
Forestry Development Cooperative Limited' (IFFDC) in 1993 with the prime objective of
development of wasteland for tree plantation and to enhance the socioeconomic status
of rural poor through sustainable Natural Resource Management by collective action. To
achieve this, IFFDC initially implemented afforestation andrural development projects in
the states of Uttar Pradesh, Madhya Pradesh and Rajasthan. The area of operation has
now been extended to Uttarakhand, Jharkhand, Orissa, Chhattisgarh,Andhra Pradesh
andWest Bengal. IFFDC is implementing Livelihood Improvement through Integrated
Rural Development (LIIRD) Project since April 2006 in 30 villages of 5 clusters in
Orissa. IFFDC has also started Indus Child Labour Project in district Sagar (MP) funded
by International Labour Organisation (ILO) with main interventions like identification of
the children at risks and provision of transitional education to children, income
generating alternatives for families of child labour; raising social mobilization awareness
and capacity building on child labour. During the year under report, IFFDC was awarded
the Certificate of Appreciation by TERI (The Energy and Resources Institute) under its
Corporate Social Responsibility Award 2004-05 for its efforts towards good corporate
citizenship and sustainable initiatives.

COOPERATIVE RURAL DEVELOPMENT TRUST(CORDET)
The Cooperative Rural Development Trust (CORDET) promoted by IFFCO has been
providing practical training to farmers to improve their skills in crop and animal
husbandry, horticulture, farm mechanization, professional leadership at village level,
bee-keeping, pisciculture, computer use, screen printing, printing, welding, tailoring and
embroidery, adult education programmes, fruits and vegetables preservation etc. The
Trust has three establishments - one at Phulpur in Uttar Pradesh and one each at Kalol
& Kandla in Gujarat State. During the year 2006-07, the CORDET has organised 192
training programmes benefiting 15,258 farmers from various States. CORDET Phulpur
and Kalol also provides free soil testing facilities through their Soil Testing Laboratories
to the farmers. During 2006-07, about 85,798 soil samples were analysed. In addition,
295 soil samples were also analysed for micro nutrients and 29 samples for irrigation
water. The bio-fertiliser Plant at CORDET Phulpur and Kalol together produced 394.27
tonne bio-fertilisers during 2006-07 of various strains like Azotobacter, Azospirillum,
Rhizobium, PSB etc. During the year under report, the Society sold about 375.13 tonne
bio-fertilisers.

CORPORATEGOVERNANCE
IFFCO has consistently followed transparent, democratic and professional practices in
corporate governance since inception. IFFCO has carved out a strong "Cooperative


Identity" and is making sincere efforts to uphold the "Cooperative Values" by cherishing
"Cooperative Principles". The Society's endeavour has been to achieve the highest
levels of transparency, accountability and full disclosure to its shareholders in a bid to
uphold the spirit of Cooperative Principles and Cooperative Values by following the
charter as laid down by International Cooperative Alliance (ICA). The activities of IFFCO
have been conducted within the provisions of the Multi State Cooperative Societies Act /
Rules and Bye-laws of the Society. In accordance with the provisions of Section 39(1)
(l) and 39(1)(n) of the Multi State Cooperative Societies Act, 2002, the IFFCO Bye-laws
No. 27 (x) and 27 (xi) provide that the General Body is to "Review the list of employees
who are relatives of the Members of the Board and the Chief Executive" and formulate
"Code of Conduct for the members of the Board and Officers". Accordingly, a well
defined "Code of Conduct for the Board of Directors of IFFCO and system for
declaration of the relative is in place. The norms for the same are strictly applicable to
the Members of the Board including Functional Directors. During the year, 9 meetings of
the Board of Directors, 9 meetings of the Executive Committee, 5 meetings of Project
Sub-committee, 4 meetings of the Sub-committee on Marketing and 4 meetings of the
Audit Committee were held. All the meetings were well attended.

INFORMATION&COMMUNICATIONTECHNOLOGY(ICT)
During 2006-07, Enterprise wide applications like Maintenance Management System,
Materials Management System, Financial Management System, E-procurement,
Marketing applications, Workflow applications have been further augmented with
enhanced functionalities. Consolidation of Server/ Storage infrastructure at Corporate
office, Saket in New Delhi and Disaster Recovery Plan for overall ICTservices was
undertaken and implementation is in process.

Communication Network&Information Security
Convergence of voice, data and video technologies has been achieved by the
deployment of Multi Protocol Label Switching (MPLS) based Virtual Private Network
(VPN) across different offices of IFFCO. Direct MPLS Link has been established at 86
offices across IFFCO and another 500 Field Offices across the country are on Dial-Up
VPN provided by M/s BSNL. Voice Over IP (VOIP) facility has been established in all
IFFCO Offices upto Area Offices which has facilitated free voice communication
between these offices. Network Operation Centre at FMDI, Gurgaon has been shifted to
Corporate Office, Saket having 6 Mbps MPLS connectivity. To enhance Network
Security, State-of-the-art security equipments from CISCO i.e. Pix Firewalls, Adaptive
Security Appliance (ASA) Firewall, Checkpoint on Alteon Firewall, Enterprise Anti Virus,
IPS, AAA Server for authentication and HIDS have been deployed. Internet facility has
been enhanced and provided centrally from Delhi to entire IFFCOas better security
compliance. An 'Information Security Policy' has been formulated for robust security of
information under the overall aegis of 'ICT Policy'. Best practices are being introduced
to secure various information systems within the Society.



E-Procurement
The system implemented at Head Office/MKCO, Production Units and Zonal Offices
has been further enhanced by incorporating newer features and functionalities. A total
of more than 3000 tenders have been processed since July 2004. The application has
been migrated to the latest dot net technology with a strategic tie-up with M/s Microsoft
Corporation under their Enterprise Go Programme. The application has been
undertaken by M/s. Microsoft as a Case Study and has been published at their website.

Marketing Computerisation
A major thrust has been given to computerization in Zonal, State, Area and Field Offices
of Marketing Division. Dial-up VPN has been provided to all Field Officers, and Area &
State Offices are networked through MPLS VPN, providing round the clock connectivity
in entire IFFCO. Broadband VPN to all Field Officers and FSCs of Marketing Division is
being provided. Anew software named 'e-Vikas' has been developed in-house, which
will soon be implemented, which is aimed to provide uniform online system for all
States.

ISO Certification
Your Society has been giving continuous thrust to quality movement in all functional
areas. Kalol unit was the first in the fertiliser industry to receive ISO-9002 International
Certification for Quality Assurance in Production, Installation and Services in A u g u s t
1 9 9 6 a n d w a s re-certified in August 1999. August, 2002 and October 2005. Phulpur
Unit also acquired ISO-9002 International Certification in July 2000. Both Kalol and
Phulpur units were considered by M/s Bureau Veritas Quality International (BVQI) for
their Quality Systems and were awarded the certificate as per New ISO Standard
Version ISO 9001:2000. Aonla unit had received International certifications ISO 9001-
2000, ISO 14001: 2004 and OHSAS 18001. At present, recertification of ISO 9001-2000
and ISO-14001: 2004 is in progress. Adoption of Integrated Management System
combining all the above systems is also in progress. A Consultant has been selected for
obtaining accreditation to International Standardization System (ISO-14001) in respect
of Paradeep Unit.

HR INITIATIVES
Training
One of the biggest challenges before the Society is multifarious development of skills of
the employees and to harness the potential of the human capital with a view to sustain
high performance. During the year, the focus was on holistic approach to people
management and development which resulted into improved productivity and
performance. HRD as a developmental arm of the Society effectively dealt with
developing the skills, knowledge and competencies of employees at junior, middle and
senior management level. Orientation, induction and rotational programmes were


conducted for the newly inducted GETs, FMTs, MTs and AGTs which included their
regular evaluation through tests and interviews during the period of training. Various
Programmes were organized for the employees to keep pace with the changes taking
place in the field of information and communication technology. Programmes on
Management and Leadership through Human Values have been organised to acquaint
the participantswith the conceptual and practical aspects of human values and ethics.
Programmes were also organised for the cooperative personnel from different countries.
The Marketing Division gave thrust on the programmes on Agricultural Technology and
covered various topics like balanced fertiliser use, fertiliser use efficiency, nutrient
interactions, integrated pest management, integrated weed management, dry land
farming, watershed management, orchard farming, tissue culture, reclamation of
problematic soils etc. Other progammes on marketing management, managerial
effectiveness, team effectiveness, motivation were also organised for marketing
personnel. Apart from the specialised technical programmes on Safety and Fire
Awareness, First Aid, Industrial Safety, Disaster Management, Environment Awareness,
ISO 14001 Auditor Course, OHSAS 18001, Inventory Management, etc. were also
conducted. During the year, special emphasis was given on the idea management
system whereby employees were encouraged to come up with innovative ideas under
the suggestion scheme. Based on the skills acquired, the employees were repositioned
in different disciplines. A large number of employees were also nominated for
participation in the reputed management development instituteswithin India andAbroad.

PUBLICITY
In the era of globalisation, IFFCO adopted an effective multi-pronged publicity strategy
to further popularise its products and services among farming community. Outdoor
publicity tools like wall paintings, posters, tractor trolley paintings, bus panels, Technical
literature conveying IFFCO's message were extensively deployed to project the image
of the organisation. A new look has been given to IFFCO's Farmers Service 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. IFFCO's Annual Calendar for year 2007, which
is dedicated to the 150th 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 Society's activities
and future plans, also received wide appreciation. IFFCO's Corporate Film has bagged
Best Documentary FilmAward instituted by National Cooperative Union of India.
Similarly 38th Annual Report (2005-06) got the Award for Excellence in Printing,
formatting and presentation.