RESEARCH PROJECT REPORTON

ACCOUNTING SYSTEM OF MARKFED

SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE DEGREE OFPOST GRADUATE DIPLOMA IN MANAGEMENT

SUBMITTED BY: NIDHI MAJHAUNIVERSITY ROLL NO: 95462264415

MBA 3rd SEMESTER

UNDER THE SUPERVISION OF

Ms. Rosy

Chandigarh Business School, Landran, Mohali

YEAR-2009-11

STUDENT DECLARATION

I hereby declare that the project report entitled, “ACCOUNTING SYSTEM

OF MARKFED” submitted in partial fulfillment of the requirements for the

degree of management to Chandigarh Business School, Landran Mohali, is

my original work and not submitted for the award of any other degree,

diploma, fellowship, or any other similar title or prizes.

NIDHI MAJHA MBA-3rd SEM.

CHANDIGARH BUSINESS SCHOOL

PERFACE

A Project work is mandatory requirement for the in POST GRADUATE

DEPLOMA IN MANAGEMENT. The industrial internship aims at exploring the young

prospective executive to the actual business world ESP. At the early stage of the maturity

in organization not only broaden horizon and also help them to grasp the various intricacies

of the business. So that it builds in them the confidence, when they are to occupy the

executive position.

To fulfill this aspiration of mine I entitled MARKFED Asia’s largest Marketing

Cooperative. The cooperation I got from the people at MARKFED is unique. I am

thankful and indebted to them.

ACKNOWLEDGEMENT

It has been subject of great honour for me to have been involved with the pioneer

and Versatile organization of “MARKFED” for the period of six weeks as a summer

vacation Trainee.

I am very grateful to Mr. AJEET SINGH PANNU, the Managing Director who

gave me the opportunity to enhance my knowledge. I am thankful to MR. S. RAGHUBIR

SINGH, the Senior Account Officer, who shared their knowledge with me. MR. KANTI

NANDAN SURI , Assistant Accountant for pain he took for me and the time devoted. I felt

very happy and comfortable while getting training under them. During training, I learnt so

much about the accounting system of “MARKFED”. I am obliged to him for the

knowledge that he shared with me and experience that I gained while working with him.

I am thankful to all the employees of “MARKFED” for their whole hearted and

mobilizing behavior in making my training a real success. Thanks to all of them. It is

opportunity of immense pleasure to study under the guidance of CHANDIGARH

BUSINESS SCHOOL LANDRAN MOHALI PUNJAB. assist has proved by its efficient

ways of teaching under the prestigious institution in providing Post Graduate Education. I

am also thankful to MS. ROSY for his upended cooperation, without which this project

cannot be a success. Indeed it’s my pleasure to have him as my project guide.

NIDHI MAJHA

TRAINING

T To be in time on your seat.

R Remain attentive all time.

A Actually participate.

I interact for clarity.

N Note point /facts that are difficult to minimize.

I improve listening habits.

N Never neglect the programmer.

G Gain as much as you can.

CONTENTS

PARTICULAR P. no

Introduction 7

Markfed agro Based activities 14

Markfed vision 15

Markfed Motto 16

It’s achievements 17

It’s strength 18

Objectives 21

Environment of Markfed 22

A brief profile of Markfed industries 24

Organization structure 25

Management 29

Quality product of Markfed 30

Exports 32

Future plan 36

Swot Analysis 37

Weekly training report 39

Research methodology 41

Introduction of accounting system 45

Divisional accounting

INTRODUCTION TO COOPERATIVES

The cooperative movement has been necessitated to protect the interests of

the weaker sections of the society. The primary objective of this movement

is “how to protect the economically weaker sections of society”. In all

forms of organizations be it a sole trade, partnership or joint stock

Company, the primary motive is to increase profits. The businessmen try to

promote his interest through all possible means including exploitation of

consumers. The cooperative form of organization is a democratic set up

run by its members for serving the interest of them. It is self help through

mutual help. The philosophy behind cooperative movement is “All For

One and One For All”.

‘Cooperative is a form of the organization wherein persons voluntarily

associate together as human being on the basis of equality for the

promotion of the economic interests of themselves’.

- According to Hubert Calvert

“A society which has its objective: the promotion of economic interests of

its members in accordance with cooperative principle”.

- The Indian cooperative societies Act, 1912 (Section 14)

To sum up we can describe a co-operative society as : Cooperative

societies are voluntary associations started with the aim of service to

members.

Cooperative Societies Act, 1912

As per section 6 of the Co-operative Societies Act, 1912, any ten

persons who are competent to enter into contract and who wish to form a

cooperative society which make an application to the Registrar of cooperative

societies of the state, wherein they propose to establish the cooperative

society.

The society is managed by the managing committee. The members of

which are elected annually at the general meeting of the society.

Each registered society is required to frame its own by-laws, which

have got to be registered with the Registrar of cooperative societies.

Any change in the bye-laws, which have got to be registered with the

registrar of co-operative societies. Any change in the by-laws will be

effective only if it has been approved by the registrar of the

cooperative societies.

From the liability point of view, the cooperative societies may be of two

types :

Limited liability societies : The liability of the members of a limited

liability society is limited. In the event of loss the members cannot be

made liable to pay more than the nominal values of shares held by

them. No member other than the registered society can owe more than

20% of the shares of the society or the values of shares should not

increase more than Rs. 1000.

Unlimited liability societies : The liabilities of the members will be

unlimited if the object of the society is to raise funds in order to lend

money to its members or where the majority of the members are

creditors of the society.

Cooperative societies Act 2 of 1912: A new Act was passed to make

an improvement over the Act of 1907; the purpose of this Act was to

facilitate the formation of cooperative societies for the promotion of thrift

and self help amongst agriculturists, artisans and persons of limited means.

All types of societies could be registered under this Act. The societies were

to transfer one fourth of its annual profits towards a reserve fund. It could

spend 10% of the profits for the welfare of the members.

MARKFED A SUCCESS STORY

Markfed Punjab is Asia’s marketing cooperative. As a cooperative, it exists both

because of farmer and for the farmers of the vibrant state. There needs have shape the

purpose of Markfed and also it’s future.

Markfed is federation about 3069 members’ cooperative societies, directly

representing dynamism of the people it represents: the people of Punjab. In the September

of 1954, what began with 13 members a share capital of Rs.54000/-, 3 employees and one

bicycle has today become the Asia’s largest marketing Cooperative, Markfed. Today this

organization employees about 3286 persons, has a network of manufacturing units, service

centers and offices crisscrossing Punjab and its operations spreading the around the world

Markfed is interest over 1 million farmers.

Markfed is the reflection on the sprit and dynamism of the people it represents: the

people of Punjab. MARKFED plays a pivotal role as a catalyst for integrated development

& growth in the rural areas of Punjab. It helps in stabilizing the market rates of farm

produce, ensures supply of quality goods, helps in generating employment and contributes

substantially towards earning foreign exchange. In spreading this vital information,

Markfed has joined hands with Punjab Marketing Board since 1984 to sponsor a Farmers

Information Programme “Mera Pind Mere Khet” (My Land My Fields) on Television.

Markfed provides innumerable services to the average farmer in terms of

Procurement, storage , processing and marketing of agricultural produce

Acting as a price support agency in the field of food grains, oilseeds, and other

farm produce

Commercial trading of wheat , paddy and cotton

Formulation of high quality agro-chemicals

Soil and water sample testing through mobile laboratories for optimum use of

fertilizers to increase farm productivity

Processing and marketing of high quality edible products like

Sugar

Basmati Rice

Canned Products

Refined Oils (groundnut, cottonseed, sunflower and mustard)

Hydrogenated oil Vanaspati

in domestic and international markets.

In its movement to emerge as a true business to business Internet enabled

organization, Markfed has its factories, offices, storage godowns and district level centers

interconnected through a network of wireless and advanced satellite communication

systems. The main factors contributing to Markfed’s progress have been its co-operative

structure, government support, progressive policies and dedicated personnel.

KEY STRENGTHS:

Asia’s largest marketing cooperative.

Punjab Markfed is a marketing federation of over three thousand societies.

With a turnover of over 2 billion USD, Markfed has won recognition and many

Awards from the Government of India in various fields of excellence.

MARKFED

Punjab Markfed's Distributor Network

MARKFED is an Apex Cooperative Marketing Federation which ensures timely supply of quality agricultural inputs to farmers and also acts as an agency of the State for procurement of food grains. It is India's largest Cooperative with an annual turnover of Rs. 15468.00 crores. It has 116 Cooperative Marketing Societies and 3069 Primary Cooperative Agricultural Service Societies as its members..

Asia's Largest Marketing Co-operative

NAME: “ The Punjab State Cooperative Supply and Marketing Federation Ltd”

Popularly known as MARKFED.

REGISTERED OFFICE: Ropar

HEAD QUARTERS: Markfed House, Plot no. 4 sector-35-B,Chandigarh

CONSTITUTION: Cooperative society

REGISTERATION NO: 818

REGISTERATION DATE: September 2, 1954

MEMBER SOCIETIES: 3,069

NO. OF EMPLOYEES: 3286

BUSINESS TURNOVER: Rs. 15468.00 CRORES

NO. OF DIVISIONS: 17

DISTRIBUTION OF AGRICULTURE INPUT: Seeds, Fertilizers, Pesticides

Cattle feed.

MARKFED BRANCHES : 100

NAME OF DIVISIONS:

Amritsar Bathinda Faridkot

Fatehgarh Sahib Ferozpur Gurdaspur

Hoshiarpur Jalandhar Kapurthala

Ludhiana Mansa Moga

Muktsar Nawanshehar Patiala

Ropar Sangrur

STORING CAPACITY: 14.85 Lac MTs

PROCUREMENT: Wheat, Paddy, Cotton and Oil Seeds.

EXPORTS: Cooking Media, Basmati Rice, Ready to eat canned and bottled

products, Potato.

PROCESSING UNITS :

Markfed vanastpati & allied inds. Khanna

Markfed refined oils & allied Inds. Kapurthala

Markfed cotton seed processing plant Giddarbaha

Markfed canneries Jaladhar

Markfed agro chemical S.A.S nagar

Markfed rice processing complex Batala,Patti,Giddarbaha, Goni

Markfed modern rice mills Rajpura, Nawanshehar ,Machhiwara

Markfed Food testing lab. Ropar

Markfed mechanized agro service centre Ludhiana

Markfed integrated cold storage Ludhiana

MARKFED AGRO-BASED ACTIVITIES

MARKFED VISION

FERTILIZERS

DISTRIBUTION

PADDY

CUSTOM MILLING

AGRI INPUTS

WHEATPROCUREMENT & TRADING

EXPORTS

WHEAT

RICE

VEGETABLES

PROCESSED FOOD

PROCESSING &MARKETING

AGR.CHEM.

AGRI PRODUCTSEDIBLES

EDIBLE OILS

BASMATI RICE

COTTON

NON.EDIBLESS EDIBLES

PROCESSED FOOD

SHORT TERM

Diversification / implementation of AEZ’S.

Further bulk handling project and start execution.

State of art and laboratories chemical analysis.

LONG TERM

Diversification of at least 6.5 lakhs acres of land from Wheat, Paddy

rotation.

Setting up of infrastructure for export fruits and vegetables like cold chain /

cold storages with participation and support from the government.

Set up a modern processing facility with JV partners in the field of potato

processing and honey processing.

With the reduction in the role of MSP mechanism Markfed would play

major role in the open market trading of food grains.

MOTTO OF MARKFED

Markfed is not just an agriculture products procurement agency; it walks on the live

policy of national development and provides new opportunities that lead to higher quality

and remunerative price. Markfed, which always share its knowledge, technology, resource

and services to keep in building the country, we now call it “MARKFED HOUSE”. The

cooperative philosophy, principles of brotherhood, help to farmers, latest modern technical

know- how, research and development have given wide acclaim to Markfed.

ITS ACHIEVEMENTS

GODOWN STORAGE FACILITY SCHEME:

The cotton prices are ruling higher than the minimum support price fixed by the Govt.

of India during 2007-08, markfed has purchased 75,386 bales under GSF Scheme

upto 29.2.08 and a profit of 82.14 lac has been booked on this activity. Markfed

expects to carry on the business of more than 1 lac bales under GSF Scheme during

the current cotton season with a profitability of around Rs. 1 crores.

INPTUS:

Last year the sale of Weedicides was 118483 packets and this year Markfed sold

306730 packets. Further Markfed has arranged 2 Lac packets of BT cotton seed for

the incoming sowing season of cotton crop.

VIILAGE CLUSTER ADOPTION PROGRAMME :

Markfed adopted Talwandi Sabo Block of Bathinda district consisting of 48 villages

for guiding farmers about picking, storage, marketing and overall development of

cotton crop. Markfed decided to honour 9 best farmers who obtained highest yield of

cotton in Talwandi Sabo on 5th March, 08 at Patiala, where Hon’ble COM, Punjab

honored the farmers. The yield of lint per hectare

obtained in Talwandi Sabo block is better than world average. Average yield of

cotton increased by 18 % in Talwandi sabo block.

Markfed – Its Strengths

Research and Development:

Markfed contributes toward research and development work carried out by the Punjab

agricultural universal Ludhiana (Punjab)

Latest techniques:

In keeping with the fast moving scenario, Markfed has adopted latest methodologies

like radio- wireless communication system, electronics data processing with facilities

to quicken processing and analysis of information.

Strong Network:

Markfed has a wide spread network of 17 district offices. 109 branches and 19 agro

services centers. This has helped Markfed to come close to the farmers.

Outstanding performance:

In recognition of its contribution towards development of Agro- industry, Markfed has

received National Productivity Council Awards.

Trading and Agro Export House:

Markfed has achieved the state of an export house from govt. of India. The govt. has

decided Markfed as a noble agency of fruits, vegetables and grains of Punjab.

OBJECTIVES

The objectives of Markfed are as follows :-

1. To make arrangements for procuring, marketing/ trading, processing / manufacturing

of agricultural products.

2. To find out and adopt latest technology and supply of goods on co-operative basis

and to act as an agent to its constituents and other persons and institutions approved

by the registrar, Co-operative Societies Punjab.

3. To raise funds for its own business.

4. To provide financial assistance to its members in the shape of advances, loans and

grants.

5. To make arrangements for procurement in bulk the requirement of its members in

respect of both procedures and consumers goods.

6. To make arrangements or distribution of agricultural inputs in retail to members and

non members.

7. To undertake processing, manufacturing, grading and packing activities and establish

industrial units.

8. To arrange for construction of buildings necessary for business of the federation and

its members and also to take up the construction work of others governmental/

institutional agencies.

9. To guide, assist and supervise the working of its member societies.

10. To carry publicity and propaganda in respect of cooperative marketing and supply by

publication of suitable literature, arrangements of demonstration by organizing

marketing, processing and supply societies, conferences, participation in exhibition

and otherwise.

11.To collect commercial information particularly relating to condition in principle

markets, general trend of the prices and circulate those amongst its members.

12.To run warehouses.

13. To undertake industrial trade, import and export of agricultural produce, farm

equipments and consumers goods.

14. To enter its collaboration with the co-operative and others in India or in foreign

countries in fulfillment off any of its objects, subject to the approval of the govt.

under section 7.7 of the act where required.

15. To act as an insurance agent and to guide and assist it’s member societies and others

etc. regarding all insurance matters.

16.To grantee the loans advanced or credit granted to any member society of the

federation by the government, state bank of India or any others agency within such

limits and such terms as may be fixed and charge commission thereon.

ENVIRONMENT OF MARKFED

EXTERNAL ENVIRONMENT:

Markfed is operating in dual environment. While some operations of Markfed are

protected and supported by the government but also rigidly controlled by the

Government rules and regulation, others face competition from private and

multinational cooperation.

GOVERNMENT CONTROLLED ENVIRONMENT:

For Markfed, procurement and distribution of the food grains and inputs are

cost- plus activities driven by government policy and controlled by the

government rules and regulation. Markfed neither faces any pressure on account

of customer demand not any competition in these activities. All prices support

operations of the market i.e. procurement of wheat and paddy are controlled by

the government and conducted on the behalf of Food Cooperation of India.

Within the overall framework of government of India policy, department of

food and supplies, Punjab Government oversees the entire procurement

operations and allots the mandi’s for procurement and mills for milling in case

of paddy.

For distribution of fertilizers and agro – chemicals, Markfed has operated as per

the policy stipulated by the Registrar of Cooperative Punjab. For import of

DAP, a high level government committee is constituted for taking purchase

decisions. M.D. of Markfed is the member of this committee the distribution of

Fertilizers is restricted through only the cooperatives.

COMPETITIVE ENVIRONMENT:

Markfed faces a highly competitive environment in case of other products such

as (Vanaspati, Refined Oil, Basmati, Canned Products and Agro – Chemicals)

being manufactured, processed and marketed in a market environment without

any quota or the government intervention. The profitability of these activities

depends upon efficiency in their production and competitiveness in marketing.

Markfed is also in export business where success depends solely on internal

efficiencies and competitiveness. The customers in international markets

demand high quality products in a competitive environment.

INTERNAL ENVIRONMENT:

In the internal functioning of Markfed the state government plays a substantial role.

Apart from the nominees from the government on its Board each and every policy decision

that is taken by Markfed has to be approved by the Registrar of Cooperative Societies

before it can be implemented.

Markfed also follows the system of inter departmental deputation whereby staff from

other government departments work with Markfed for a specified period of time. Not only

the managing directors are on deputation from different departments, even lower down the

administrative hierarchy there are some positions that have the earmarked for deputation

A Brief Profile of Markfed Industrial Units

Markfed Canneries Jalandhar

Operational area:

Manufacturers of Tomato Sauce, jams, pickles, squashes, spices, dehydrated and

Canned foods.

Markfed Vanaspati and Allied industries, Khanna

Operational area:

Manufacturers of sohna Vanaspati, cottonseed oils, sunflower oil and Mustard oil.

Refined oil plant Kapurthala

Operational area:

Manufacturing of groundnut oil

Kapurthala and Giddarbaha plan

Operational area:

Manufacturing of cattle feed.

Markfed Rice Mills Rajpura, Bagha, Purana, Macchiwara, Nawanshehar

Operational area:

Manufacturer of rice

Agro- Chemical Plant, Mohali

Operational Area:

Manufacturer of fertilizers.

Fertilizers Plant, Dhuri

Operational area:

Manufacturer of fertilizer.

H.D.P.E. Plant Anandpur Sahib

Operational Area:

Manufacturers of H.D.E. Bags.

Cement pipe Plants Singhapura,Roper and Sarna

Operational Area:

Manufactures of pipes.

AGRO SERVICE

19 Agro services centers

1 mobile soil testing lab.

8 soil testing lab at Amritsar,

Bathinda, Ropar, Hoshiarpur,

Custom spray service for Best control and Anti – termite Treatment.

Organizational Structure

Organization is the backbone of the management without efficient organization. No

management can perform its functions smoothly. Sound organization contributes greatly to

the continuity and success of the enterprise. It is the framework relationship of person

operation at various levels with verticals and horizontal dimensions. The type of

organization in company depends upon its size, technology and range of production.

Being a manufacturing organization Markfed is organized on function level and its

organizational setup is very well designed. There is a clearly defined line of authority. The

responsibility of the higher level for the acts of its subordinates absolute. The structure is

simple and flexible. Unity of direction’s there. At upper level, erosion is confined to single

major function. This makes the working of the organization highly efficient and speedy.

Span of management is neither too narrow nor too wide. Each superior has generally one to

six subordinates working under him. Upper level management consist of board of directors,

comprised of eight elected directors ,three government nominee of the apex co-operative

bank and managing directors appointed by the Punjab board who full exposure in their

respective fields like industry and technocrats who are well experience and have full

exposure in their respective fields like industry , administration , law and finance. A

common cadre of senior executives (manager “Asst. manager and accountants) has been

created by Markfed. Out of this pool suitable and trained personnel are lent to the

cooperative their efficiently and at the same time this arrangement ensure security of

service, concessions and amenities to the personnel.

CHIEF MANAGERPERSONNEL, MARKETING, INPUTS, PADDY, RICE, FOOD GRAIN,

MANAGER

SUPERITENDENT

SR.ASSISTANT

ASSISTANT

CLERK

SR. MANAGER

CHIEF ACCOUNT OFFICER

CHIEF INTERNAL AUDIT

DY. CHIEF ACCOUNT OFFICER

SR. ACCOUNT OFFICER

ASST.ACCTS.OFFICER

ACCOUNTANT

ASST.ACCOUNTANT

DY. CHIEF ACCOUNT OFFICER

SR. ACCOUNT OFFICER

ASST.ACCTS.OFFICER

ACCOUNTANT

ASST.ACCOUNTANT

AMD(GENERAL) AMD (PLANT)

MANAGING DIRECTOR

BOARD OF DIRECTORS

ORGANIZATION STRUCTURE IN THE HEAD OFFICE

The MD is the Chief Executive Officer of Markfed responsible for overall

performance under the control and direction of the Board of Directors. The Board members

are appointed for 5 years.

At the head office, Markfed under the MD is organized into various department and

functions that are as follows:

Administrative Branch

Accounts

General

Banking

Budget

Salary

Internal Audit

Marketing

Legal and Taxation

Engineering

Cotton

Monitoring

Markfed also has 20 manufacturing and processing plants spread all over the state.

The plant heads report to the particular functional help who is handling that product at the

head office.

Marketing section of Markfed is handling the sales of Edible and Non Edible

products manufactured in Markfed plants. Markfed has been marketing edible oils (sohna

sunflower, cotton seed, groundnut, kachi Ghani, Vanaspati being manufactured at Khanna,

Kapurthala, Gidderbaha Plants) Sohna Basmati Rice and various items manufactured at

Markfed Canneries, Jalandhar such as tomato ketchup, canned foods (Sarson ka saag). All

the edible products are marketed under one umbrella brand i.e. “SOHNA”.

Management

Management of Markfed is vested in the board of directors. The board of director

has for 3 years. There are 15 members in the Board of directors which consist of following:

Ten representatives if member of societies elected of zonal basis by dividing the

area of operation of the Federation into ten zones.

Three nominees of the state government.

A nominee of the Apex Co-operative Bank.

Managing Directors.

The Chairman and the Vise Chairman of the Board of directors are elected

representative of members of societies. The Board of Directors shall meet at least once in

six months and 15 days clear notice of the meeting shall be given to the Directors before

the meeting is held. There are executive committees and an administrative committee of the

federation consisting of six Directors constituted in the following manner:

Chairman of the Board of Directors.

Vice Chairman or Board of Directors.

Registrar, Cooperative societies Punjab or his nominee.

Two Directors to be appointed by Board of Directors out of its remaining elected

members.

Managing Director.

QUALITY PRODUCTS OF MARKFED

Sohna Edible Products

Vanaspati

Cottonseed refined oil

Groundnut refined oil

Sunflower refined oil

Mustard refined oil

Kachi ghani mustard oil

Sohna Processed Foods

Tomato ketchup

Dehyd peas

Mixed fruit jam

Honey

Gulab Sharbat

Sarson ka saag

Chatpat channa

Alu methi

Alu palak

Alu wari

Mutter Paneer

Sohna Basmati Rice

Supreme Basmati Rice

Superior Basmati Rice

Silver Basmati Rice

Adbar Basmati Rice

Broken Basmati Rice

Parmal Rice

Markfed Fertilizers

Pesticides Formulations

Markon75WP

Vitavax75WP

Markchlor50% EC

Makkanil

Markphos

Enoo Sulfan 35 EC

Other Products

Sohna Cement Pipes

Cattle Feed

HDPE Bags

The HDPE sacks plant of Markfed makes bags for cattle feed, tarpaulins,

polythene covers and HKPE bags for clients like IFFCO, KRIBHCO and nfl

for the packing of urea fertilizer. In order to ensure the use of high quality

packaging material, Markfed setup packaging test laboratory at Mohali in

1973.

EXPORTS

Markfed has set up number of Export Oriented Units to process Agriculture like

cotton, oilseeds, vegetables, fruits etc. Different products like refined oil, Vanaspati,

processed food, cottonseed, and canneries have found ready markets in countries like UK,

USA, Poland, Czech Republic, Slovakia, Hungry, Australia, Afghanistan and some

other Middle East European Countries. The Exotic Sohna Sarson ka saag is very popular in

UAE, Australia, Italy, America, Canada, Europe and other South Pacific areas. Various

Products of the Sohna Ethnic Food like Dal Makhni, Palak Paneer, Mutter Paneer, Kari

Pakora, Dal Tarka and Aloo Mutter are in perpetual demand in countries like USA, UAE,

Australia and Canada and bring millions of Indian’s living overseas fond memories and the

true taste of Punjabi Tradition.

The Punjab government in association with Punjab Agricultural University,

Ludhiana has declared MARKFED as Nodal agency for export of fruits, vegetables, and

food grains. Any reputed agency is welcome for negotiation to help boost exports.

MARKFED is a successful trading house, an example for other as a source of inspiration

for numerous Co-operative involved in similar pursuits.

Markfed exports to Indonesia, UAE, Vietnam, Philippines, Bangladesh, Sri-

lanka and Oman etc. The major clients for wheat exports are:-

Cargil International, Geneva.

Cargil International, Singapore.

Emirates gain Products Company LLC, UAE.

Toepfer International limited, Singapore.

Noble Grain PTE Limited, Singapore.

LMJ International.

SARA International Limited.

Louis Dreyfus Asia PTE Limited, Singapore

EXPORTS MANAGEMENT IN MARKFED

IMPORTANCE

EXPORT & INTERNATIONAL OPERATIONS

EXPORT OF POTATO

POTATO PROCESS UNIT

AGRI EXPORT ZONE FOR BASMATI

IMPORTANE OF EXPORT MANAGEMENT

In the early stages of economic development, man produced what he needed and consumed all that he produced. Human wants were limited and people fulfill their wants with limited resources which they themselves produced. But this self dependence could not long last. As the human wants increased, man started exchanging his surplus goods with those of others members. Commerce which is the sum total of those processes which are engaged in the removal of hindrances of persons, place and time in the exchange of commodities, began with the beginning of exchange of goods. In the modern days, commerce has grown world over. It has achieved great importance and spread to bigger dimension. Now a day, trade is not restricted within the boundaries of a nation, but has spread throughout the world. Development of the means of transport and communication has knit together all the nations of the world into one big market.

In today’s world, economic life has become more complex and diversified. No country can live in isolation and claim to be self-sufficient. Even countries with different ideologies, cultural, political, social and economic structure have trade relations with each others. Thus relations of U.S.A with U.S.S.R.and china with Japan are example.

The aim of foreign trade is to increase production and to raise the standard of living of the people. Foreign trade helps citizens of one nation to consume and enjoy the possession of goods produced in some others nation. There is a need of foreign trade due to the following reasons:-

1. Uneven distribution of natural resources 2. Division of labour and specialization 3. Difference in economic growth rate 4. Theory of comparative cost 5. Optimal use of natural resources 6. Availability of all types of goods 7. Specialization

EXPORT AND INTERNATIONAL OPERATION

A successful trading house and a source of inspiration to numerous cooperative involved in similar pursuits, Markfed has been declared as Punjab’s nodal agency for the export of fruits, vegetables and food grains by the govt. of India.

Markfed has carved a distinct identity for itself by setting up a no. export oriented units to process agricultural to produce like basmati rice, cotton, oilseeds, vegetable, fruit etc A vast range of products from Markfed have found markets in the U.A.E, UK USA, Canada ,Germany Poland, Hungary , Czechoslovakia, etc. annually Markfed export 2.5 million MTs of food grains which includes exports to UAE, Sudan , Yemen, Vietnam, Bangladesh, Korea, Oman, sri lanka, the major food players of the world like Cargill, toepfer, noble grain, Louis dreyfus and kotak agro.

AGRI EXPORT FOR POTATOES

Potato is considered as the third major cash crop and plays a pivotal role in crop diversification; India is fourth largest producer of potatoes in the world. Markfed helps farmers procuring potatoes and organizing their exports. The govt. of India has sanctioned an agri -export zone for potatoes in Punjab. Being set up in collaboration with APEDA the zone will be established in Patiala with satellite centers in jalandhar, Ludhiana, Batala, and Muktsar.

Markfed has been declared the nodal agency for setting up this AEZ to facilitate potato export in Punjab. The zone entails partnership of farmers, processors, exporters the state and the central govt. agencies to coordinate from end to end development of potatoes and its processed output from to consumers. The project will be implemented in two phase costing Rs 10.41 crores and Rs 102 crores respectively.

Markfed, the nodal agency for the project would coordinate the efforts of various organizations like NHS , NFPI, APEDA, ICAR, MOA, revenue departments and various state govt. agencies like department of agricultural and industries and will also act as the main link between central and state agencies and the state holders who are farmers, exporters and processors.

Markfed has started export of potatoes to Middle East and Canada since July 2002 under the agro export zone of potatoes. Major customers include duly hyper marks which own the biggest chain off super markets in Dubai and other gulf countries.

POTATO PROCESSING UNIT

Punjab Markfed has signed an MOU with Canadian manufacturing company ltd. Vancouver, Canada for setting up a joint venture to manufacture potatoes, French fries/potato flakes/ granules / vodka. The cost of project is approx….. Rs 70 crores.

The project will be put up in Patiala. The company will provide the technical know how to process potatoes grown in Punjab and will assist in marketing the product both in domestic and international markets.

AGRI EXPORT ZONE FOR BASMATI RICE

The AEZ will facilitate increased production of basmati rice accounting for almost 60% of the world export. The AEZ will be set-up in Punjab covering Gurdaspur, Amritsar, Kapurthala, Jalandhar, Hoshiarpur and Nawanshehar areas.

The main objective of this AEZ will be:

1. Providing remuneration returns o the farmers on a sustained basis by improved access to exports.

2. Interlinking the various constituent of the chain from farmer to consumer.

3. Establishing backward linkage with rice millers.

4. standardization of agronomical practices

5. Making quality seeds available.

6. Setting up of DNA based laboratory. The project cost is estimated at Rs.42.32 crores.

Future Plans

MARKFED has plan to set up a number of new projects for over Rs.449 crores in

the coming years and is logically looking for technical projects, cattle feed plant modern

facility food grain storage, fruit & vegetables processing plant, sunflower seed processing

plant, wheat processing project potato granules & flakes and vodka project and also for

technical collaboration and joint ventures.

Projects Estimated Costs (rupees in lakhs)

Modern Rice Mills 600

Mustard And Rape Seed Project 500

Husk Board Project 200

Potato Granules And Flakes Project 2000

Agro Chemicals Plant 9500

Cotton Seed Edible /Flour 2500

Vodka Project 1000

Rice Bran Project 1000

Sunflower Project 800

Tomato Juice Concentrates 1500

Terry Towel Project 3000

Basmati Rice Mills(Exports oriented) 1500

Breakfast Cereals 500

Instant Dal Plant 60

Denim Cloth Project 3000

Surgical Cotton Project 300

Wheat Gluten Project 6000

SWOT ANALYSIS

Strength and Weakness

Marketing strength

Largest marketing federation of India.

Good reputation in Punjab and neighbored states.

Proximity to the market.

Good networking of the distribution channel infrastructure or extensive

distribution network.

Weakness

Loosing market share.

Inefficient sale force.

Lack of professionalism infrastructure in marketing function.

Inappropriate pricing strategy.

Lack of continuous interaction with dealers.

Weak advertising network.

Financial strength

Strong capital base.

Availability of low cost capital.

High financial flexibility as a result of good relation with bank.

Weakness

High overheads.

Conventional approach for costing.

Low return from massive modernization.

Manufacturing Strength.

Easy access or raw material.

Well equipped plant and facilities.

Experienced and skilled manpower.

Organizational Strength

Full support from govt. and Cooperative Societies.

Network or DMs.

Largest Cooperative organization of Asia.

Adequate infrastructure, qualified manpower and good office space.

Weakness

Lack of vision leadership.

Traditional working environment.

Lack of motivation of employees.

Lack of experienced and knowledge sharing.

Opportunities

Growing demand of basmati in foreign market.

Got status of Export house by the Central Govt. recently.

Confined customer spent a little.

Sound financial position due to rapid profit.

Weakness

Slow down in expected demand of some products.

Huge investment by multinational and other popular brands in the advertisement

and promotional.

No initiative taken to introduce various contemporary issues in accounting like

HRA, social reporting, inflation accounting in Markfed.

Threats

The existence of Markfed entails a proper equilibrium between its

existences as a cooperative society with the aim of providing farmers the

right deal and as a business concern, the main aim of which is to earn the

profit.

WEEKLY

TRAINING

REPORT

WEEKLY SCHEDULE

WEEKS WORK DONE

1 st WEEK

(1st June-7th June) - 1. Introduction with AEZ staff members.

2. Studied the Bye Laws of Markfed.

3. Studied the Annual Report of Markfed.

2 nd WEEK

(8th June-14th June)- 1. Learned how to make vouchers.

3 rd WEEK

(15th June-21st June)- 1. Learned how to prepare and maintain dispatch

register.

4 th WEEK

(22nd June-29th June)- 1. Learned how to prepare and make entries in

register.

5 th WEEK

(30th June-6th July)- 1. Did filling and sorting of various documents.

2. I was allotted to do a project on AEZ

activity by the GUIDE of AEZ Department

Mr. KAMAL RAI.

6 th WEEK

(7th July-12th July)- 1. Collected the information and data relating to

the report and started preparing the report

OBJECTIVES OF STUDY

& RESEARCH

METHODOLOGY

OBJECTIVES OF THE STUDY

The objectives of the study in the organization:-

1. To study the important accounts and documents of the department so as

to know how they are prepared, how they are maintained and for what

purpose they are prepared.

2. To conduct a swot analysis so as to know the strengths of AEZ

department and markfed as a whole, the weaknesses of the trading

procedure, the opportunities available, and the threats confronting AEZ

department & markfed in general.

3. To conduct financial appraisal so as to know the various types of

accounting systems followed in markfed and how accounts are prepared

in the AEZ department and by studying them to get an overview about

the performance of the department.

4. To study the structure and performance of the department so as to get a

better understanding of the AEZ trading/procedure and the work carried

in the AEZ department.

5. To give suggestions on the basis of findings in the view to improve the

working of the department.

RESEARCH METHODOLOGY

There are certain steps which are to be followed for making an effective

research it depends upon organization to organization and person to person to

adopt a certain strategy in research which is termed as research methodology.

Research methodology followed by me in the organization is:

Visiting different departments.

Conversation with highly skilled and qualified employees.

Data collection from different sources.

Guidance from project guide.

Preparation of project report.

SOURCES OF INFORMATION

Primary data

The primary sources of data used in the making of this project report are

information from the employees of the organization.

Secondary data

Annual reports

Websites(www.markfedpunjab.com)

Publications

Data from various departments

Relevant diagrams and charts like bar charts to give pictorial

presentation of data collected for better understanding.

The data collected is segregated under suitable headings and then

tabulated.

TOOLS & TECHNIQUES USED

The tools and techniques used in the process of the making the report were the

observations made during the training period and thorough interactions with

the people operating in AEZ Department of Markfed.

Observations

The observations carried out while the training period was to observe and

study the whole procedure of how the AEZ are procured, how it is stored, how

it is sold .

Interviews

Thorough interaction with the head of AEZ Department helped a lot in

knowing about the AEZ trading in Markfed, their constructive criticism and

valuable information that they shared were quiet helpful for knowing about

the procedures / techniques followed in the organization.

PERIOD OF STUDY

The period for which the training research was carried out was from 1st June to

15th July (for 6 weeks) which proved to be of great help as it gave an exposure

to the corporate world.

INTRODUCTION TO ACCOUNTING SYSTEM

“Accounting is the art of identifying, recording, classifying and summarizing in a

significant manner and in terms of money, transaction and events which are, in part at

least, of the financial character and interpreting the result thereof.”

The record experience are summarized formally at the conclusion of limited period,

frequently at the end of each calendar year, although a fiscal year of twelve months, which

begins and end with month other than January and December, is often used normally it is

financial year commencing from 1st April every year.

In fact, accounting is primarily a method of analysis based on record of various

economic activities of the enterprise. This description of accountancy embodied a number

of significant features accounting includes a system of record keeping the records contain

analyzed data results from economic activities transaction in the board sense the economic

activities transaction in board sense the economic activities are those of the enterprise for

which the records are maintained and the data from accounting when properly interpreted

are useful in reaching, forward looking business decision

FUNCTION AND PURPOSE OF ACCOUNTING

In the board sense accounting has primary function: Facilitating the administration of the

economic activity. This function has two closely related phases:

1. Measuring and arraying economic data.

2. Communicating the results of thus process to interested parties.

Accounting is not an end in itself but is intend to provide information that is useful in

making business and economic decisions.

OBJECTIVES OF ACCOUNTING

The following are the chief objective of the Financial Accounting:

1. Ascertaining the results of operation during the period.

2. Ascertaining the financial position.

3. Maintaining control over Assets.

4. Planning in respect of cash.

5. Providing information to tax authorities and other government agencies.

BRANCHES OF ACCOUNTING

Accounting has at present four sub-fields or branches, mentioned as:

BOOK KEEPING: It is the systematic identification, and recording of economic

Events and maintaining proper books of accounts. It is restricted to low level

accounting work.

FINANICAL ACCOUNTING: Accounting is a wide and comprehensive concept.

It is an art of identifying, classifying, recording, summarizing and interpreting

business transactions of financial nature. Accounting as such is Book keeping plus

preparation of financial statements, fund and cash flow statements.

COST ACCOUNTING: It is that branch of accounting, which deals with cost of

production and its various constituents. It is concerned with the classification,

allocation, recording, summarizing and reporting current and prospective costs.

MANAGEMENT ACCOUNTING: Management in the business is concerned

with decision making for the efficient working of the enterprise, so Management

accounting is a system to assemble and furnish the useful material. The

management accounting serves as an effective tool for determining right line of

action in future.

THE STEPS IN THE ACCOUNTING SYSTEM IS SUMMARIZED AS FOLLOWS:

1. Analyze transaction from source document.

2. Record transaction in Journal.

3. Post entries to the Ledger.

4. Prepare a Trail balance of the Ledger.

5. Determine needed Adjustments.

6. Prepare Financial Statements.

BRANCH ACCOUNTING SYSTEM

A business can grow by tapping more customers. If customers are scattered all over

and cannot be tapped from one place, the objective can be achieved by opening branched at

far flung places. If the various divisions are located in different parts as Jalandhar, Khanna,

Kapurthala etc. these are known as branches. Head office controls the activities of various

branches.

The main object of keeping branch accounts is dependent on the nature of the business and

specific need of particular branch. The objectives of keeping the branch accounts

acceptable to all businesses are:

1. To know the profits or loss of each branch separately.

2. To ascertain the financial position of each of the branch on a particular date.

3. To know the cash and goods requirements of the various branches.

4. To evaluate the progress and performance of each branch.

5. To calculate commission for the payment to the managers, if based on Profit of branch.

6. To know the profitability of each branch and type of business for Expansion of the

business.

7. To give concrete suggestions for the improvement in the various branches.

8. To meet requirements of specific enactment as all branches of the Company must keep

the accounts for audit purposes.

Branch not keeping the full system of accounting:

The following are the main features of such branches:

1. Such branches sell only those goods which are received from the head office and are

not usually allowed to make purchases in the open market expect with the express

permission of head office.

2. Goods are supplied by the head office to such branches either at cost

price or at invoice price.

3. All expenses of the branch such as rent, salary to staff, advertisement etc.

are paid by the head office.

4. Petty expense such as cartage, entertainments, freights etc. are paid by the branch

manager out of the petty cash book balance.

5. The branch manager is normally expected to sell the goods for cash only but he may

be authorized to sell goods on credit in certain cases.

6. The amount received from cash sales or cash received from the debtors is either

remitted to the head office daily or deposited in the account of head office or some

local bank. .

Such branches do not keep accounts but accounts maintained in the books of head

office. The system to be adopted for accounting at the head office depends on the size of

branch and the degree of control to be exercised by the head office. The following are the

main ways in which office may keep the branch accounts in its books:

1. Debtor System.

2. Final Account System.

3. System and Debtor System

4. Wholesale Branch System

Branch keeping full system of accounting:

Branch keeping full system of accounting or independent branches are those

branches which also purchase good from the market besides getting the goods from the

head office. They can also supply goods to the head office, pay expenses from the cash

realized and deposit cash in there own account. In other words, these branches operate as

an independent unit for all practical purposes but their only link with Head Office is that

they are owned by the head office and whatever there profit or loss will be, that belongs to

the Head Office.

Such branches keep complete set of double entry book and prepare there on trail

balance, trading and profit and loss account and balance sheet. Such branches open Head

Office accounts in their books. This account is debited by cash sent to the Head Office,

goods supplied to head office and credited by cash received from the Head Office good

received from the head office, depreciation of branch fixed assets, charged made by Head

Office for rendering services and profit earned by the branch. Similarly the Head Office

will also maintain the branch account for each branch. This account will have the same

entries but on the reverse sides.

MARKFED’S BRANCH ACCOUNTING SYSTEM

From accounting point of view there are two systems of branch accounting

Markfed’s branch accounting system is such that it closely resembles to the system in

which branches are depending on the Head Offices and they do not maintain complete set

of account. The difference theoretical branch accounting system and that of Markfed is that

theoretical Head Office wants to ascertain the profit and loss of separate branches but in

case of Markfed profit or loss of each branch is not calculated.

.

BRANCH STRUCTURE :

There are total 17 district offices of Markfed one in each district of Punjab. There

are around 5 to 10 branches working under each of district office. There are total

120 branches under all district offices.

EXPENSES:

The District Office pays for all the expenses of branch office. Drafts are sent to

branch office by the district office as per their need.

ACCOUNTS:

Accounts maintain during the month:

1. District Manger General Account

2. Bank Account

3. Cash Account

4. Fertilizer Customer Account

5. Sales Account

6. Sales Tax Account

7. Expenses

All the monthly balances of account are transferred from the branch office. The

District Office maintains all the balances of the branch offices. At the end of the month all

the district offices sent the account to Head Office at Chandigarh. The Head Office has

different Departments for different accounts. The Head Offices has Departments like

Fertilizers Department which take care of purchase and sale of Fertilizers, Banking

Department, Food Grain Department, Salary Department, Budget Department, and Plant

Department etc.

The accounts not related to any of these divisions are sent to the General Account

Division. All the division makes accounts for their products and declares the results at the

end of the year whether they are earning profit or going in loss.

PURHASES:

Purchase is centralized in Markfed. All the purchases is made by the single

central authority and disbursed to different branched.

PROCUREMENT OPERATION:

Procurement of food grains, seed, pulses etc.Hence majority of buffer stock

of wheat and rice in India are held in Punjab.Markfed alone stores around 4.4

millions tones of wheat. As one of the major procurement agencies, it also plays

an important role in providing remunerative price to farmers. The food grains

procured for the PDS are distributed through a network of retail outlets. The food

grains policy revolves around the surpluses available for procurement, building a

buffer stock, distribution, trade regulation and price control.

Markfed procures mustard seed and sunflower to process them in its oil

complexes at Khanna, Kapurthala and Giddarbaha.

DIVISIONAL ACCOUNTING

Business is not confined to one line of activity these days. In order to grow business

diversify into many product lines whether in the same industry or in different industries. A

separate division is usually created for every line of activity. Hence, a total picture showing

overall profits may hide the inefficiencies of the weak division. This may really effect the

decision of business regarding which division to continue or shut down or expand etc.

hence, to get the best result, every division should be viewed as a ‘Profit Centre’.

Divisional Accounting comes to the fore when various divisions are viewed as profit

centers. It helps in deciding about the performance of the individual departments. Every

division can be viewed as a separate accounting entity and separate set of books can be

maintained for each division. But it becomes prohibitively expenses if the number of

departments is very large. Hence, business can have one set of books and the various

subsidiary books and corresponding ledger account may be in columnar form. The division

wise figures of sales, purchases, expenses incurred exclusively for a particular division are

ready ascertained and allocated to these divisions.

DIVISIONAL ACCOUNTING IN MARKFED

In Markfed all the branches sent the accounts relating to different product to District office.

The district Offices then sent these accounts to the Head Offices at Chandigarh. Various

divisions are made at the Head Office for different products.

Like separate divisions are made for cotton, food grain, cattle feed paddy and rice,

fertilizers etc. The Accounts not related to any of these divisions are sent to the General

Account Division. All the division makes accounts for their products and declares the result

at the year whether they are earning profit or going in loss. The Profit or Loss from these

divisions are calculated and shown in the profit and loss account yearly.

VARIOUS DIVISIONS ARE AS FOLLOWS:

PERSONNEL DIVISION :

The Personnel Division of Markfed is responsible for dealing with the personnel

matters in the organization. A major responsibility is ensuring the organizational meets of

its social and legal responsibilities toward its employee with regards to term and condition

of employment, quality of working life, the promotion of safe and healthy working

environment and system of work and equal opportunities to all. It provides training and

development programs for all employees.

INTERNAL AUDIT DIVISION:

Internal audit consists of a continuous, critical review of financial operating

activities by a staff of auditors functioning as full time salaried employees. It has therefore

become necessary for the managements of these organizations to have a team of experts to

review their procedure and operations and to have a team of experts to review their

procedure and operations and to report cased of non- compliance, inefficiency and lack of

control so that the necessary action can be taken. Internal Audit division examines the

financial statements and sees that adequate disclosures regarding accounting policies have

been made as per the statutory requirements or not. It examines if the fundamental

accounting assumptions have not been followed in preparing the financial statements or

not.

GENERAL ACCOUNT DIVISION :

This division takes care of all the accounts for which there are no separate

departments. This division makes the consolidated trail balance and the Balance Sheet few

figure of organization. (In lacs)

CO ls in Orissa, Tamil Nadu, Utter Pradesh, Gujarat and Maharashtra.It also

exports cotton bales to Far Eastern countries as a joint venture with NAFED. The

Profit for the year 2006-2007 is Rs.12, 733,775 as compared to previous year

profit Rs.12, 665,187.

FERTILIZERS DIVISION:

Markfed has an extended experience of procurement and distributing of

fertilizers through cooperatives against as per Punjab Government framed/

prescribed policy from time to time. Profit during the year 2006-2007 is Rs.29,

668,708 against the last year profit of Rs. 15,461,060.

COTTON DIVISIONS

YEAR 2007-08 2008-09 2009-10

WHEAT 471.66 711.29 1189.82

PADDY 6518.84 5348.02 5352.91

COTTON 103.03 20.10 26.00

FERTILIZER 16.41 869.4 894.50

MANUFACT- URING 665.86 1057.82 1123.47ACTIVITY

RICE MILLS 158.85 -12.9.41 109.90

TOTAL 8334.65 7877.22 8696.60

Cotton division takes care of the purchases, sale and various expenses related to

cotton. Markfed process and trade in cotton the world leading fiber an important cash crop

in Punjab

With in India, Markfed sells cotton to the processing mills on orrisa, tamilnadu,

uttar pardesh , gujrat and maharastra .It also exports cotton bales to far eastern countries as

a joint venture with NAFED.

FERTILIZERS DIVISIONS

Markfed has an extended experience of procurement & distributing of fertilizers

through cooperative against as per Punjab govt. framed/ prescribed policy from time to

time.

MARKETING DIVISION:

In order to improve the image of Markfed products and to get better realization,

following improvements have been initiated in the edible products:

1. Agrmark license for the double refined mustard oil was arranged at Markfed

Kapurthala plant. With the Agmarking of Kachi Ghani mustard oil, the sale of this item

has increased manifold. The item is also being exported to Dubai and Canada where it

has gained good acceptability.

2. Appropriate marketing strategies have been adopted for slashing wasteful

expenditure.

3. ISO 9001 and HACCP certification is being arranged for activities at

basmati plant, Nawanshehar and canneries plant, Jalandhar.

4. Product mix various ingredients in the manufacturer of Vanaspati and cattle

Feed was maintained to ensure economy.With the above measures there has been a

substantial increase in the sale of all product of oil plants.

RICE AND PADDY DIVISIONS :

During the year the profit in paddy activity has been worked out to

Rs.651,883,605.(07-08) as against the last year Rs. 75,571,644.(2006-07)

FOOD GRAINS DIVISIONS :

This division takes care of purchase, sale and various expenses related to food

grains. The profit for the year 2007-2008 is Rs.471,650,72 against last years profit of Rs.

623,300,535.

INTERNATIONAL TRADE DIVISION :

The International Trade Division assists Markfed in taking advantages of

worldwide opportunities by providing value- added services. It provides expert’s assistance

to Markfed to take advantages of oversea market opportunities. It helps the business grow

through International Sales.

A successful trading house and a source of inspiration to numerous cooperatives

involved in similar pursuits, Markfed has been declared as Punjab’s nodal agency for the

export of fruits, vegetables and food grains by the Government of India.

A vast range of products from Markfed have found market in the UAE, UK, US,

Canada, Germany, Poland, Hungary , Czechoslovakia, Afghanistan etc.Annually, Markfed

exports 2.5 million MTs of food grains till 2005.

PLANT ACCOUNTING SYSTEM OF MARKFED

Plants act as independent profit centers working under Markfed. These plants

maintain separate accounts from the head office.

The plants pay for there expenses from the cash realized and deposits cash in there

own account. All the expenses of the plant such as rent, salary to staff, advertisement etc,

are paid by the plant itself. Even if the Head Office sends some money to the plant, the

interest is charged on the Head Office.

In other words, these plants operate as an independent unit for all practical purposes

but there only link with head office is that they are owned by the Head Office and whatever

there Profit or Loss will be, that belongs to the Head Office.

The Plants maintain there separate Profit or Loss accounts and Balance sheet. These

profit and loss account and balance sheet are then transferred to the Head Offices plant

division. And then a single profit and loss account and balance sheets made all the plants

which show the profit or loss of each plant. Like in the year 2006-2007 plants Khanna

plant, Machhiwara, Baghapurana, Nawanshahar, Rajpura, Batala, Malout showed profit

and plants like Anandpur Sahib, Mohali, Jalandhar showed loss.

PLANT OPERATIONS :

The varied nature of Markfed’s operations depend a great on its infrastructure.

Today it takes pride in its own Oil Plants, Sugar Mill, Canneries, Rice Mills, Ginning&

Processing Plants, R & D Labs etc. at these state of the art manufacturing facilities,

Markfed produces world-class products which have carved a niche for themselves in

several markets.

SUGAR MILL:

Markfed has set up a new sugar mill at Malout at a total cost of Rs. 300 million.

With a production capacity of 1,750 TCD and spread over 50.4 acres of land, it provides

direct employment to about 300 persons. Markfed has also tied up with the Punjab

Agricultural University, Ludhiana, for the development of better varieties of sugarcane.

CATTLEFEED MANUFACTURING :

Markfed manufactures cattle feed at its plant at Gidderbaha & Kapurthala, which

have a combined annual production capacity of 63,000 tones. The animal feed

manufactured here is popular in Punjab, Haryana, HP, J&K, and Rajasthan & Delhi and is

sold through dealers & cooperative societies.

HDPE SACKS PLANT:

The HDPE Sacks Plant of Markfed makes bags for cattlefeed, tarpaulins, polythene

covers and HDPE bags for clients like IFFCO, KRIBHCO & NFL for the packaging of

Urea fertilizer. In order to ensure the use of high quality packaging material, Markfed set

up a Packaging Test Laboratory at Mohali 1993.

SOIL TESTING LABORATORIES:

Markfed’s eight wells- equipped Soil Testing Laboratories at Amritsar, Bathinda,

Ropar, Hoshiarpur, Kapurthala, Sangrur, Malout and a Mobile Lab manned by specialists

with an annual capacity to analyze 10,000 samples of soil & water, have been rendering

free services to farmers in obtaining best results from the use of chemical fertilizers since

1969.

VANASPATI AND REFINED OILS:

The oil mill at Khanna produces Vanaspati, Bakery – shortening and refined oils

such as cotton seed oil, Soya oil, mustard oil and vegetable oil with a total production

capacity of 33,000 MT per annum. The Kapurthala unit produced 33,000 MT of cattle

feed; whereas Gidderbaha unit produced 15,000 MT of oil & rice bran and 30,000 MT of

cattle feed. Our Kachi Ghani Sohna brand Mustard Oil has already reached the markets of

the Middle East & Canada and is a highly sought – after brand in the domestic market.

CANNERIES:

Markfed has set up canneries to produce Heat & Eat Food products (especially

curries); recipes of which have been prepared by Mr. Jiggs Kalra, a chef of international

repute. The products include delicacies like Sarson ka saag, Daal Makhni, Kadhi Pakora,

Mutter Paneer & much more. Besides this it also produces jams, ketchups, honey etc.

These products are being sold all over India and are being exported to many countries

around the world.

COMPUTERIZED SYSTEM

BAAN

Baan IV is the software or the computer system used in the markfed. This software works

in the whole markfed. All the accounting is done by this software. This software is self

owned by the MARKFED. It is prepared according to the requirement of the MARKFED .

JOURNALIZING

A Journal is a form in which transaction are recorded in chronological order (by

order of date). Since the journal is the first place in which transaction are formally recorded

it is referred to as book of original entry. There are many forms of journals in use. The

most basic form of journal has two money (or accounts) columns and is referred to as the

General Journal.

The process of recording transaction in journal is called Journalizing. Recording

transaction in a journal follows the same analysis, and uses the same transaction T

accounts. Recording transaction in journal, however, is considered to be a better practice

because both the debit and credit parts of an entry are shown together in the same record.

Most of journal entries involve only one debit and one credit. Occasionally, however, more

than one debit or credit will be needed to record an entry. An entry requiring more than one

debit or credit is compound entry.

The journal entry is the first transaction in the accounting system. Before the entry is

made, the following decisions are made:

Which accounts are affected by the transaction, and

Which account will be debited and which will be credited.

Some firms may first record its transaction in a waste book. This is only rough record and,

after it, systematic record is prepared. But Markfed adopts another practice. They record

the receipts of cash and payments of cash in a rough book and the relevant papers

(vouchers) are filled in a serial order. Further other transaction also the papers are properly

arranged and field. The papers, which support a transaction, are known as Vouchers. The

vouchers which will usually be found in a firm are as follow:

1. Vouchers in support of payments out of the till (office cash) or out of the bank.

2. Vouchers in supports of receipts of cash or cheques. This may usually be in the

form of counterfoil of the receipts issued by the firms or letter accompanying

remittances.

3. Bills received from the supplier.

4. Invoices made out for goods sold to customers or cash memos.

5. Other documents not covering transaction listed above for instance, bills received for

services rendered or a note received intimating that a particular customer has become

insolvent, etc.

The above constitutes only a very rough sort and for the purpose of making proper entries

in the books. All the transaction are then methodically classified and recorded in a

chronological order.

A General Journal entry takes the following form:

Date Name of account being Debited Amount

Name of account being Credited Amount

Optional: Short description of transaction

POSTING IN LEDGER

The journal provides a complete record of each transaction in chronological order.

However, the ledger is still needed to provide a summary of the data relating to each

account. Entries in the journal are transferred to the ledger a regular basis. The process of

transferring amounts from the journal to the ledger is called posting. The ledger is usually

called the book of final entry. Journal page numbers and account numbers are used as a

cross reference after posting. The column for folio is meant to record the number of the

page on which the relevant transaction has been journalized in the journal.

THE GENERAL LEDGER

The general ledger is the collection of Markfed’s accounts. While the general is

organized as a chronological record of transaction, the ledger is organized by the account.

In casual use the accounts of the General Ledger often take form of simple Two – column

T- accounts. In the formal records of the company they may contain a third or fourth

column to display the accounts balance after each posting.

Note the direct mapping between the journal entries and the ledger postings. While

posting of journalized transaction in the journal ledger at first may appear to be redundant

since the transaction already are recorded in the general journal, the general ledger serves

an important function, it allows one to view the activity and the balance of each account at

a glance. Because the posting to the ledger is simply a rearrangement of information

requiring no additional decisions, it is performed by accounting software, either when the

journal entry is made or as a batch process, for example at the end of the day or week.

Finally, while such T- Account are handy for informal use, in Markfed a three column or

four column account is used to show the running account balance, and in the case of a four

column account, whether that balance in net debit or credit. Additionally, reference

numbers may be used so that each posting can be traced back to its original journal entry.

In the journal each transaction is dealt with separately. On perusing the journal one cannot

form any idea of the net effect of the transaction since it record only which account is to be

debited and which is to be credited. The record made date wise. Transactions of the similar

nature are recorded in different places if they occur on different dates. Transactions on the

one day are rather diverse in character, examples Purchases of furniture, Sale of goods,

Payment of expenses etc

To get picture as a whole, the entries recorded in the journal have to be processed further.

All the similar transactions must be brought together. For example all transaction relating

to cash must be put on one place. Similarly, all the transaction must be arranged debit on

one side and credit on the other. The statement which contains all transactions relating to a

particular subject for a particular period and in which the transactions relating to particular

period and in which the transaction are nearly arranged into debit or credit is known as

account. In other words, an account is a statement which contains all benefits received by

the subject concerned on the one side and all the benefits given by it on the other.

TRAIL BALANCE

After recording and classification of business transaction, summarization of

classified information takes place. Preparation of trail balance is the first step in this

direction. Trail balance is the statement which lists debit and credit balances of ledger

accounts including cash and bank balance. To recapitulate, difference between the debit

and credit side total of account is the balance of the account. Debit balance of an account

means that debit side total is less than credit side total. Similarly, credit balance of an

account means that credit side total more than debit side total. Trail balance is the listing of

ledger accounts along with their balances in the following form:

S.NO PARTICULARS L.F AMT DEBIT AMT CREDIT

OBJECTIVES OF PREPARING A TRAIL BALANCE

1. To check Arithmetical accuracy of the books of accounts:

If the Trail Balance agrees it is assumed that transaction are correctly recorded on the basis

of double entry system and correct posting and balancing of ledger accounts has been taken

place.

2. To facilitate in preparation of financial statement:

It provides balances of all ledger accounts in a summarized form. Financial Statements

are prepared on the basis of trail balance after making necessary adjustments.

3. To detect error: If trail balance does not tally, it means that some error in recording of

posting of balancing of accounts has taken place. The steps are taken to locate and rectify

errors before preparing financial statements.

SUMMARY

MARKFED is Asia’s largest marketing cooperative. It exists both because of the

farmers. Its functions include procuring and processing operations, manufacturing

operations, domestic operations and international operations. Its strength is the trading and

Agro Export houses and the use of latest technique. It has 17 administrative district offices

and 17 industrial units, registered office at Ropar and Head Office at Chandigarh.

Accounting system at Markfed has different parts like General Accounting System,

Branch Accounting System, Plant Accounting System and Divisional Accounting System.

In General accounting first of all the transaction are analyzed from the source

document, and then recorded in journal, the entries are posted to the ledger, a trail balance

is made from ledger and finally the financial statements are made.

MARKFED’s Branch Accounting System is such that it is closely resembles to the system

where branches are dependent on the Head Office and they do no maintain complete set of

accounts. The system is such that separate profit of each branch calculated.

In the Divisional Accounting System, various divisions are made at the Head Office

for different products. Like separate divisions are made for cotton, food grains, cattle feed,

paddy and rice, fertilizers etc. the accounts not relating to any of these divisions are sent to

the General Account division. All the divisions are make accounts of their profit or going

in loss. The profit or loss from this division is calculated and also shown in the profit and

loss account yearly. Plants act as independent profit centers working under Markfed. These

plants maintain separate accounts from the head office. These plants operate as an

independent unit for all practical purposes but their only link with the head office is that

they are owned by the head office and whatever their profit or loss will be, that belongs to

the Head Office

SUGGESTIONS

At markfed the branch accounting system is such that the branches are dependent

on the Head Office and separate profit of each branch cannot be calculated.

Hence, a total picture showing overall profits may hide the inefficiencies of the

weak branches. This may really affect the decisions of the business regarding

which branch too continue should be viewed as a profit centre.

Business turnover is calculated as sales / income / accretion / purchase / expenses

/ discretion.

But the aggregate amount for which sales are affected or services are rendered

by an enterprise represent better picture of the organization.

Markfed not use the concept of Cost accounting. Cost accounting seeks to ascertain

the cost of each product or job produced or undertaken by the organization. Cost

Management can help Markfed in short run and long run planning and control

decision that increase value of the customer and lower cost of product and services.

No accounting standards are for the cooperatives societies like in case of

companies. Accounting standards can be useful for harmonization of accounts and

for comparison purposes.

Various contemporary issues in accounting like Human Resource Accounting,

Social Accounting and Inflation Accounting should also be introduced in Markfed.

BIBLIOGRAPHY

ANNUAL REPORT OF MARKFED (PUNJAB) OF YEAR 2003-04,

PUBLISHED BY PRINT LINKERS.

BYE LAWS OF

MARKFED

WEBSITE- WWW.MARKFEDPUNJAB.COM, LINKS USED

ABOUT MARKFED, CORPORATE PROFILE, PRODUCTS,

ACTIVITIES, NETWORK.

BOOKS OF ACCOUNTS OF MARKFED, OF THE YEAR 2006-07,

2007-08, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET.

RESEARCH METHODOLOGY (METHODS AND TECHNIQUES) -

BY C.R. KOTHARI, 2ND EDITION, YEAR 1996, PUBLISHED AT

VISHWA PRAKASHAN HOUSE.