Professional Documents
Culture Documents
ON
ACCOUNTING SYSTEM OF
MARKFED
Ms. Rosy
YEAR-2009-11
STUDENT DECLARATION
NIDHI MAJHA
MBA-3rd SEM.
CHANDIGARH BUSINESS SCHOOL
PERFACE
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
A Actually participate.
PARTICULAR P. no
Introduction 7
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 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”.
Sugar
Basmati Rice
Canned Products
Refined Oils (groundnut, cottonseed, sunflower and mustard)
Hydrogenated oil Vanaspati
in domestic and international markets.
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
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.
NO. OF DIVISIONS: 17
NAME OF DIVISIONS:
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
CUSTOM
& TRADING
MILLING
PADDY
FERTILIZERS
DISTRIBUTION
AGRI INPUTS
WHEAT
EXPORTS RICE
VEGETABLES
PROCESSED FOOD
PROCESSING COTTON
AGR.CHEM.
&
MARKETING NON.EDIBLESS
EDIBLES
EDIBLE OILS
MARKFED VISION
SHORT TERM
LONG TERM
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.
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:
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 :-
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.
4. To provide financial assistance to its members in the shape of advances, loans and
grants.
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.
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.
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.
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:
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
AGRO SERVICE
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.
BOARD OF DIRECTORS
MANAGING DIRECTOR
CHIEF MANAGER
PERSONNEL, MARKETING, INPUTS, CHIEF ACCOUNT CHIEF INTERNAL
PADDY, RICE, FOOD GRAIN, OFFICER AUDIT
DY. CHIEF
DY. CHIEF ACCOUNT ACCOUNT OFFICER
SR. MANAGER
OFFICER
SR. ACCOUNT
MANAGER SR. ACCOUNT
OFFICER
OFFICER
SUPERITENDENT ASST.ACCTS.OFFICER
ASST.ACCTS.OFFICER
ACCOUNTANT
SR.ASSISTANT ACCOUNTANT
ASST.ACCOUNTANT
ASSISTANT ASST.ACCOUNTANT
CLERK
ORGANIZATION STRUCTURE IN THE HEAD OFFICE
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
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
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:-
IMPORTANCE
EXPORT OF POTATO
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.
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.
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.
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.
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.
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
1st 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.
2nd WEEK
(8th June-14th June)- 1. Learned how to make vouchers.
3rd WEEK
(15th June-21st June)- 1. Learned how to prepare and maintain dispatch
register.
4th WEEK
(22nd June-29th June)- 1. Learned how to prepare and make entries in
register.
5th 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.
6th WEEK
(7th July-12th July)- 1. Collected the information and data relating to
the report and started preparing the report
OBJECTIVES
OF STUDY
&
RESEARCH
METHODOLOG
Y
OBJECTIVES OF THE STUDY
The objectives of the study in the organization:-
to know how they are prepared, how they are maintained and for what
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:
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.
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
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.
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
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
BRANCHES OF ACCOUNTING
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.
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
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:
PROCUREMENT OPERATION:
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.
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.
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)
COls in Orissa, Tamil Nadu, Utter Pradesh, Gujarat and Maharashtra.It also
WHEAT 471.66 711.29 1189.82
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
PADDY 6518.84 5348.02 5352.91
profit Rs.12, 665,187.
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)
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.
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
The journal entry is the first transaction in the accounting system. Before the entry is
made, the following decisions are made:
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:
POSTING IN 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
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
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.
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.