budget comparision nfcl synopsis

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NFCL MAIN

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A report

INTRODUCTION

Finance is regarded as THE LIFE BLOOD OF BUSINESS ENTERPRISE. Finance function has become so important that it has given birth to financial management as a separate subject. So, this subject is acquiring universal applicability. Financial Management is that managerial activity which is concerned with the planning and controlling and of the firms financial resources. As a separate activity or discipline is of recent origin it was a branch of economics till 1890. Still today it has no unique today of knowledge of its own, and it draws heavily on economy for its theoretical concepts.

The subject of Financial Management is of immense interest to both academicians and practicing managers. It is of great interest to academicians because the subject is still developing, and there are still certain areas where controversies exist for which no unanimous solutions have been reached as yet. Practicing Managers are interested in this subject because among the most crucial decisions of the firm are those which relate to finance and an understanding of the theory of financial management provides them with conceptual and analytical insights.

OBJECTIVES OF THE STUDY

This project work is aimed to attain the following major objectives. The objectives are:

1. To know about the fertilizer industry and business activities of M/s. Nagarjuna Fertilizers and Chemicals Limited, Kakianda

2. To study the ability of the firm to meet its current requirements.

3. To study the extent to which the firm has used its long-term solvency by borrowing funds.

4. To study the overall operating efficiency in performance of M/s. Nagarjuna Fertilizers and Chemicals Limited, Kakianda.

5. To study the efficiency with which the firm is utilizing its various assets in generating sales.

6. To suggest guidelines to the company for improving its financial position.

METHOLOGODY OF THE STUDYThe required for this study would be collected through two sources i.e.,

1. Primary Data:

The primary data comprises information obtained by the candidate during discussions with Heads of Departments and from the meeting with officials and staff.

2. Secondary Data:

The secondary data has been collected from information through Annual Reports, Public Report, Bulleting and other Printed Materials supplied by the Company.

In the present study 1/4th of the total information of time is from primary data and the rest is from the secondary data.

LIMITATIONS OF STUDY

1. The study is limited to NFCL, Kakinada; it does not relate to any other company of Nagarjuna Group or other firms of Fertilizer Industry.

2. The smaller time frame for understanding this study is also a significant limitation.

3. The ratios are calculated on the basis of past data; these are not future indicators.

4. The scope of study is limited to the last five years balance sheets.

5. The analysis is made basing only on the Annual Reports of NFCL.

INDUSTRY PROFILE

India has been predominantly considered as an agricultural dependent economy. Agriculture plays a very dominant role as more than one-fourth of our GDP come from this sector. Nearly 70.6% of population depends on the agriculture for their lively-hood. The basic need for an agricultural dependant economy is fertilizers and urea is one of the main fertilizers. India is the second largest manufacturing country in the world.

All fertilizers consist of three main ingredients.

Nitrogen -(N) which promotes general plant

growth

Phosphorous -(P)

which promotes flowering

Potassium -(K)

which promotes strong roots.

The ingredients are mixed in various combinations because plants have different needs.

The combinations are indicated by a three number code:

The first number is the percent of Nitrogen

- (N)

The second number is the percent of Phosphorus - (P)

The third number is the percent of Potassium - (K)

About Fertilizer:

Fertilizer is simply, plant food. Just like the human body needs vitamins and minerals, plants need nutrients in order to grow. Plants need large amounts of three nutrients nitrogen, phosphorus, and potassium. These are commonly referred to as macronutrients. Fertilizer makers take those three nutrients from nature and put them into soluble forms that plants can easily use.

There are a number of other nutrients plants need in small amounts. These are referred to as the minor nutrients, or micronutrients. These many nutrients are typically produced separately, but end up being mixed together in varying amounts to match the needs of a particular crop. The analysis found on each bag or bulk shipment of fertilizer tells the farmer or consumer the amount of nutrients being supplied. States have a system of laws and regulations that ensure the fertilizer is properly labeled and delivers the amount for nutrients stated on the bag.

Our world would be vastly different without commercial fertilizers. Following World War II, new technologies allowed for the rapid expansion of fertilizer production. Coupled with growing food demand and the development of higher-yielding crop varieties, fertilizer helped fuel the Green Revolution. Today, the abundance of food we enjoy is just one way fertilizers help enrich the world around us.

While fertilizers provide many important benefits that are necessary for our way of life, the improper use of fertilizers can harm our environment. Weve used the most recent developments in science to study our products and make sure safety comes first.

FERTILIZER:

Fuel for growing plants just like humans and animals, plants need adequate water, sufficient food, and protection from diseases and pests to be healthy.

COMPANY PROFILE

NAGARJUNA GROUP - FOUNDER

Our founder Sri K.V.K.Raju (28.11.1928 16.06.1993) laid the foundation of the Nagarjuna Group in 1974 with an investment of

50 millions. He was a visionary and a professional technocrat entrepreneur who realized the importance of Core Sectors to an economy like ours. He has guided the group with his philosophy.SERVING SOCIETY THROUGH INDUSTRY

Nagarjuna Fertilizers and Chemicals Limited (NFCL) is the first gas based fertilizer factory in South India. The plant is based on the latest fertilizer technology from M/s. Snamprogetti, Italy for Urea process with an installed capacity of 1500 Mt/day for each unit. The ammonia process is based on technology from M/s. Haldor Topsoe, Denmark with an installed capacity of 900 MT/day per each unit.

NFCLS VISION STATEMENT

SERVING SOCIETY THROUGH INDUSTRY

For close to two decades, the employees at NFCL have predominantly been in the business of manufacturing and marketing Urea, a segment of the plant Nutrition business space. Given our cumulated experience and strengths in understanding the farmer, the agriculture, various initiatives taken in the past, the exposure of Indian agriculture to global economy and therefore the need for Indian farmers to be globally competitive, have realized the need to provide innovative and comprehensive Plant Nutrition Solutions.

The leadership they refer to in our Vision Statement is in terms of providing innovative and creative solutions.

NFCLS MISSION STATEMENT

They shall:

Pioneer transformation in the approach to plant nutrition

Deliver holistic plant nutrition solutions to the farmers

Be the most preferred organization to be associated withPioneer transformation in the approach to plant nutrition they shall develop crop, site and stage specific wholesome plant nutrition solutions. NFCL shall focus on all necessary initiatives towards this be it manufacturing technology, regulatory, logistics and using a mix of several sciences and skills. The most preferred organization to be associated with in the process of providing these solutions, NFCL shall delight all the stakeholders employees, investors, suppliers, customers and society at large. The stakeholders would prefer to be associated with us not only for the higher value they offer, but also shall cherish their relationship with us due to the way they deal with them with full commitment, responsibility and accountability.

NFCLs aim to have the most satisfied employee base by the turn of the century through its commitment to Personal and professional development of the individual.

Rewarding teamwork, innovation and quality behavior

Through job satisfaction

Creating and sustaining a close-knit family culture wherein every individual experience a sense of belonging.AWARDS AND HONOURS

EPIC Award for Anti-Pollution measures taken by the Industry by Environment Public interest Committee, Kakinada in 1993. Good Housekeeping Award for 1994 by National Safety Council, A.P. Chapter.

Best Industrial Canteen Award for 1994 by National Safety Council, A.P. Chapter.

Indian Chemical Manufacturers Association (ICMA) Award for Environmental Control Strategies and Safety in Chemical Plants for the year 1994.

Award of Merit for 1994-95 by National Safety Council, U.S.A. for completing 2 Million Accident Freeman Hours.

ISO 9002 Certification from Bureau Verities Quality International (BVQI), Netherlands, in 1995.

FUTURE PLANS OF THE COMPANY

1) To improve the capacity utilization and energy efficiency through technology up gradation.

2) Switching over to 100% natural gas as raw material instead of Naphtha in Ammonia plant II

3) To continue to improve environmental performance under the framework of ISO 14000 EMS.

4) To enhance the standards in the present quality management system (ISO 9002) by adopting the ISO 9001-2000 revision.

5) To widen the scope and offer technical services to various external agencies including overs as a excitement.

THEORITICAL FRAME WORKBUDGET

A budget is a financial and /or quantities a statement prepared prior to a definite period of time, of the policy to be pursed during that period that for the purpose of attaining a given objective.

A budget is a pre determined statement of management policy during a given period which provides a standard for comparison with the results actuality achieved.

BUDGETING:

Budgeting is the technique for formulation begets.

Budgets are the individual objectives of a department, whereas budgeting is the act of building budgets

BUDGETARY CONTROL

Budgetary control involves the use of budget and budgetary reports, throughout the period to co-ordinate, evaluate and control day to day operations in accordance with the goals specified by the budget.

ESSENTAIL OF EFFECTIVE SYSTEM OF BUDGETARY CONTOL:

There are certain steps which are necessary for the successful implementation of a budgetary control system. They are as follows:

1. Organization for budgetary control

2. Budget centers

3. Budget officer

4. Budget manual

5. Budget committee

6. Budget period

7. Determination of key factor.

ORGANISITION CHART

FOR

BUDGETARY CONROL

ADVATAGES OF BUDGETARY CONTROL:

The budgeting control system helps in fixing the goals for the organization as a whole and concerted efforts are made for its achievements. It enables economies in the enterprise. Some of the advantages of budgetary control are:

Maximization of profits :

The budgetary control aims at the maximization of profits of the enterprise. To achieve this aim, a proper planning and coordination of different functions is undertaken.

co ordination:

The working of different departments and sectors is properly coordinated. The coordination of various executives and sub ordinates is necessary to for achieving budgeted targets.

CHAPTER-IV

DATAANALYSIS & ITS iNTERPRETATION

Nagarjuna Fertilizers and Chemicals Limited - Kakinada Revenue Budget of CIVIL Department for the year ended 2011 2012

(Rupees in LakhsS.NoA/c DescriptionBudget

2010-2011Budget

2011 - 2012

1Consumption of consumables and utilities1.50

2Direct Charges - Roads & Buildings Repair36.9027.00

3Direct Charges - Plant & Machinery Repairs228.03145.00

4Consumption of Stores & Spares Other24.6718.00

5Repairs Others4.50

6Technical Consultancy4.60

7PR Gifts0.500.50

Total300.70190.50

Nagarjuna Fertilizers and Chemicals Limited - Kakinada Revenue Budget of ELECTRICAL Department for the year ended 2011 2012. (Rupees in Lakhs)S.NoA/c Description Budget

2010-2011 Budget

2011 - 2012

1Consumption of Chemicals0.10-

2Consumption of Consumables and Utilities 13.2015.35

3Direct Charges - Plant & Machinery repairs45.5041.22

4Consumption of Stores & spares - Imported Plant0.060.48

5Consumption of Stores & Spares - Other 47.8636.93

6Repairs Others0.01

7Stationery0.01

8Rates and Taxes Others0.60

9Other Welfare Expenses0.10

10License Fee0.010.65

TOTAL107.4594.63

Nagarjuna Fertilizers and Chemicals Limited - Kakinada Revenue Budget of INSTRUMENTATION Department for the year ended 2011 - 2012(Rupees in Lakhs)S.NoA/c Description Budget

2010-2011 Budget

2011 - 2012

1Consumption of Consumables and Utilities0.7317.40

2Direct Charges - Plant & Machinery repairs31.3014.66

3Consumption of Stores & Spares - Other95.7081.60

4Consumption of Stores & Spares - Imported - Plant40.0011.50

5Technical Consultancy2.30

6Furniture, Fittings & Office Equipment Repairs0.06

7Employee Travel Fares0.30

TOTAL :168.09127.46

Primary data

Secondary data

methods