FINANCIAL

STATEMENTS
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INTRODUCTION TO CO-OPERATIVE
The government of India started this
movement in India in 1904 with purpose
of freeing the farmers from the group of
moneylenders and this movement proved
to be a boom for the social and economic
development of entire country. The co-
operative movement in Punjab contributed
heavily to the agricultural development as
the first step and this resulted in the green
revolution due to which Punjab was
crowned as the grain bowl of the country.
MARKFED COOPERATIVE LTD.
The Punjab State Co-op Supply & Marketing Federation Ltd. known as
“Markfed” was registered in 1954. At the time of registration, it began with
one bicycle, three employees, thirteen members and a capital of Rs.54,000/-,
it has now achieved meteoritic volumes and has grown to become the largest
marketing co-operative in Asia
MARKFED PLANTS:-
 Markfed modern rice mills Rajpura Nawashaor Machiwara, Bahgapuran.
Markfed cotton ginning processing factories Sadigarh, RampuraPhul.
Markfed cement pipe plants (Pathankot) Singepura.
Markfed Vanaspati oil and Allied Industries, Khanna.
Markfed modern rice mills Rajpura Nawashahor.
Markfed cotton ginning a processing Plant, Giddarbaha
Markfed Canneries, Jalandhar.
10. Markfed Agro Chemicals, Mohali.
Markfed Fertilizers Dhuri.
 The Punjab State Cooperative Supply and Marketing Federation
(MARKFED) is the largest marketing co-operative in Asia. It was set
up in 1954. MARKFED is playing a leading role in serving the farmers
of the state as well as customers in India and overseas by providing
83 hygienic and safe quality consumer products. The management of
MARKFED vests with the
  Board of Directors, including government nominees which creates
and makes the policies of undertaking business of the federation.
 REGISTRATION NO. 818

 REGISTRATION ON.2.9.1954

 MARKFED BRANCHES.110

 PROCESSING UNITS.22
ACTIVITIES
  DOMESTIC OPERATIONS-
  Procuring & Distribution Operations:

  Markfed, being a State Government procuring agency is engaged in

Procurement of agricultural produce. It procures wheat, paddy, Cotton, oil-
seeds like mustard, sunflower on behalf of Govt. of India through FCI /
NAFED as part of Minimum Support Price (MSP) policy / Price Support
Scheme. The food-grains business comprises more than 85% of the
business turn-over of the Markfed.
 Procurement of Food Grains:

  Wheat- During the year 2013-14, Markfed procures wheat on behalf of

Govt. of India and is also responsible for supply of wheat under Atta and
Daal Scheme of Punjab Govt.
 Paddy- Markfed plays a vital role in paddy procurement in the state. The
milling of paddy is done under the Custom milling Policy of Food Civil
Supplies & Consumer Affairs, Govt. of Punjab
 Distribution & Trading Operations:
  Fertilizer

  Markfed has been appointed as a nodal agency for procurement & distribution
of DAP fertilizers through cooperatives since last three years. It holds a market
share of 45% in the state of Punjab. The state always relies on Markfed for the
rescue of Punjab Farmer. Markfed distributes about 8.00 Lac MT urea and 3.50
Lac MT DAP annually.
 Agro-Chemical

  To facilitate efficient crop management, Markfed has an Agro-Chemicals unit at

Mohali, to formulate about 29 pesticides mostly ISI marked. This unit is ISO:
9001-2015 certified. It has tied up with leading MNC Syngenta and D.I.Dupont
for providing quality agrochemical products. Apart from this the department is
providing and distributing quality BT seed and Wheat seed to farmers in Punjab.
 Cotton

  Markfed is doing the business of purchasing Cotton Pressed Bales on

commission basis for Spinning Mills and has purchased 8687 Cotton Bales upto
July 2013.
 OBJECTIVES :
 To make arrangements for procuring, marketing/ trading, processing/
manufacturing of agricultural products as well as by-products of its affiliated
members and their members to their best advantage within the country and outside
the country.
 To find out and adopt latest technology and supply of goods on co-operative basis
and to act as agent to its constituents and other persons and institutions approved by
he Registrar, Cooperative Societies, Punjab.
 To raise funds for its own business.

 To provide financial assistance to its members in the shape of advances, loans and
grants.
 To make arrangements for procurement in bulk the requirements of its members in
respect of both producers and consumers goods.
 To make arrangements for distribution of agricultural inputs in retail to members and
non-members.
 To undertake processing, manufacturing, grading and packing activities and
establish industrial units.
 To arrange for construction of buildings necessary for business of the Federation
and its members and also to take up the construction work of other government/
institutional agencies.
 To guide, assist and supervise the working of its member societies.
 To carry out publicity and propaganda in respect of Cooperative
marketing and supply  by publication of suitable literature, arrangement
of demonstration by organizing marketing, processing and supply
societies conferences, participation in exhibitions and other-wise.
 To collect commercial information particularly relating to conditions in
principal markets, general trends of the prices and circulate those
amongst its members.
 To run warehouses.

 To undertake interstate trade, import and export of agricultural

produce, farm equipments and consumer goods.
 To enter into collaboration with the Co-operative and others in India or
in Foreign Countries in fulfillment of any of its objects, subject to the
approval of the Government under Section 77 of the Act wherever
required.
ORGANISATIONAL STRUCTURE OF
MARKFED
(1)Head office
B.O.D, Markfed Punjab
Managing director
 Additional managing director(two)
d)Chief managers/function managers
(2)District officers in each district of Punjab state
a) District manager
b) Technical officer
c) Senior account officer
(3) 110 branch offices in the state
(a) Sr. branch officer/branch officers
(4)20 plants /mfg. units in the state
a)General manager/managers
b)Deputy chief accounts officer/Sr. accounts officer

Marked head office and district offices are open 5 days a week i.e. Monday to Friday
In head office & all other branches working hours 9-5
  OBJECTIVES OF THE STUDY
 To study the profitability of Markfed.
 To find financial performance and efficient use of capital employed

 To compare the previous years and present year performance of

the company.
 To give suggestion and recommendation based on the study

 To evaluate the performance of the company by using ratios as a

yardstick to measure the efficiency of the company
 To understand the liquidity, profitability and efficiency positions of
the company during the study period.
 To evaluate and analyze various facts of the financial performance
of the company. To make comparisons between the ratios during
different periods.
RESEARCH METHODOLOGY

 MEANING OF RESEARCH
  Research is component of two syllables, a prefix re and a verb search.
Remain again, anew, over again. Search mean to examine closely and
careful, to test and try to probe. The two word from noun to describe a
careful and systematic study in some field of knowledge, undertaking
facts or principle. Research is an organized and systematic way of
finding answers to questions.
  RESEARCH DESIGN

 Descriptive research is used in this study because it will ensure the

minimization of bias and maximization of reliability of data collected.
The researcher had to use fact and information already available
through financial statements of earlier years and analyze these to make
critical evaluation of the available material. Hence by making the type of
the research conducted to be both Descriptive and Analytical in
nature.
 STATEMENT OF THE PROBLEM:
 The study is being conducted to analyse financial statements of
Marfed.. For the purpose of study secondary data has been
used for this purpose various articles, journals and annual
reports of the firm has been studied. Annual and audit reports
have been used .
  STATISTICAL TOOLS

 The Researcher has used the following tools to present and

analysis data:
 data analysis

 Microsoft Power Point

   PERIOD OF THE STUDY

 this study of financial ratio analysis is limited to six years from

2017-2018. the accounting year starts from 1 April to 31 march
FINANCIAL STATEMENT

 Financial statements are formal records of the financial

activities and position of a business, person, or other
entity A company’s management uses it to communicate
with external stakeholders. like shareholders, tax
authorities, regulatory bodies, investors, creditors, etc..
 Financial statements basically include the following reports:

 Balance sheet

 Profit and Loss statement

 A balance sheet or statement of financial position, reports
on a company's assets, liabilities, and owners equity at a
given point in time.
 An income statement—or profit and loss report,
or statement of comprehensive income, or statement of
revenue & expense—reports on a
company's income, expenses, and profits over a stated
period of time. A profit and loss statement provides
information on the operation of the enterprise. These
include sales and the various expenses incurred during the
stated period.
OBJECTIVES OF FINANCIAL STATEMENTS
 Financial statements show an accurate state of a
company’s economic assets and liabilities.
 They help in predicting the extent of a company’s capacity to earn
profits.
 Financial statements of a company depict the effectiveness of its
management.
 These statements also provide information relating to the
company’s cash flows
USES OF FINANCIAL STATEMENTS
 Management
 Financial statements basically reflect a company’s financial
performances. They show profits and liabilities of the business. 
 Availing Credit from Lenders

 Every business needs to borrow funds for functioning. They

have to rely on lenders like banks and financial institutions for
this purpose.
 Use for Investors

 Investors also extensively use a company’s financial statements

to asses its finances. That helps them figure out how the
company’s solvency will be in the longer term.
 Use for Government
 Governmental policies pertaining to corporates depend
heavily on financial statements. 
 Use for Stock Exchanges

  SEBI can assess a company’s internal matters using

themInformation on Investments
 The shareholders of a company rely on these statements to
understand how their investments are paying off. If a
company is earning profits, they might decide to invest even
more money.
 to ensure the protection of investors
FINANCIAL STATEMENT ANALYSIS

 Financial statement analysis involves gaining an

understanding of an organization's financial situation by
reviewing its financial reports. The results can be used to
make investment and lending decisions.
FINANCIAL STATEMENTS

 Comparative statements
1.Comapritive p&l statement
2.Coparitive balance sheet
 Common size statements

1.Common size p&l statement

2.Common size balance sheet
COMPARATIVE STATEMENTS

 Comparative Balance Sheet

 To understand the comparative balance sheet, it must have
two columns for the data of original balance sheets. A third
column is used to show increases/decrease in figures. The
fourth column gives percentages of increases or decreases.
 Comparative Income Statement

 To compare the profitability, particulars of profit & loss are

compared with the corresponding figures of previous years
individually. To analyze the profitability of the business, the
changes in money value and percentage is determined.
 COMPARITIVE STATEMENT OF PROFIT AND LOSS For the year ended 31 march 2017 and 2018

Particulars Note.No Previous Year Current Year Absolute Changes Percentage changes

A.Revenue From Operations 153097092614 125152233797 27944858817 18.25

B.ADD.Others Incomes 7434547624 2141557537 5292990087 71.19

closing stock 7410916728 16582634651 -9171717923 -123.76

C. Total Revenue A+B 167942556966 143876425985 24066130981 14.33

D.Less:Expenses

Cost of materials consumed 31110118588 7410916724 23699201864 76.18

Purchase of Stock in trade 117217436401 128733845570 -11516409169 -9.82

work in progress and stock in trade 8171938554 3,80,66,41,098 4365297456 53.42

Administration expenses 1630433282 1885352674 -254919392 -15.64

Finance cost 13583436017 5565737298 8017698719 59.03

Depreciation and amortization expenses 195433771 262759622 -67325851 -34.45

Total Expenses 171908796613 1,47,66,52,52,986 24243543627 14.10

E.Profit/ loss before Tax(C-D) -3,96,62,39,647 3788827001 -7755066648 195.53

F.Less:Tax

G.Profit after tax (E-F)

COMMON SIZE STATEMENTS
Common Size Income Statement
A common size income statement is an income statement in which each
line item is expressed as a percentage of the value of sales. It is used
for vertical analysis, in which each line item in a financial statement is listed
as a percentage of a base figure within the statement, to make comparisons
easier.
Common Size Balance Sheet
A common size balance sheet is a balance sheet that displays both the
numeric value and relative percentage for total assets, total liabilities,
and equity accounts. Common size balance sheets are used by internal and
external analysts. 
 COMMON SIZE STATEMENT OF PROFIT AND LOSS For the year ended 31 march 2017 and 2018

absolute amount Percentage

Particulars Note.No Previous Year Current Year Previous Year Current Year

A.Revenue From Operations 153097092614 125152233797 100 100.00

B.ADD.Others Incomes 7434547624 2141557537 4.86% 1.71%

closing stock 7410916728 16582634651 4.84% 13.25%

C. Total Revenue
A+B 167942556966 143876425985 109.70% 114.96%

D.Less:Expenses

Cost of materials consumed 31110118588 7410916724 20.32% 5.92%

Purchase of Stock in trade 117217436401 128733845570 76.56% 102.86%

work in progress and stock in trade 8171938554 3,80,66,41,098 5.34% 3.04%

Administration expenses 1630433282 1885352674 1.06% 1.51%

Finance cost 13583436017 5565737298 8.87% 4.45%

Depreciation and amortization expenses 195433771 262759622 0.13% 0.21%

Total Expenses 171908796613 1,47,66,52,52,986 112.29% 117.99%

E.Profit/ loss before Tax(C-D) -3,96,62,39,647 3788827001 -3.38% 3.03%

F.Less:Tax

G.Profit after tax (E-F)

  
FINDINGS
  Markfed has its current ratio at 2.09:1 . ideal ratio is 2;1 so the firm is doing well current assets are
double the amount of current liabilities.
  The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s
ability to meet its short-term obligations with its most liquid assets.. 2015 the quick ratio of the
company was below standard that means large part of current asset of the firm is tie up in slow
moving and unsellable investment of Finish goods and also slow moving of debts, but, the overall
trend shows declining which is not a positive sign
 If we compared the figures of sales and inventory of first two years, the level of inventory is almost
same, but in the FY 2015 and16 the sales was increased with low cost of inventory which implies the
management is successful to reduce the cost involved for management of inventory.
 This means, a very long collection period would imply either for credit selection or an inadequate
collection. The average collection period short in FY 2016 which means that better is a credit
management and prompt payment on the part of debtors.
 The debt-to-equity (D/E) ratio is calculated by dividing a company’s total liabilities by its shareholder
equity. These numbers are available on the balance sheet of a company’s financial statements. The
ratio is used to evaluate a company's financial leverage. chart the debt equity ratio of the Markfed was
consistently declined from 24.47% in FY 2013 to 14.12% in FY 2015.The low debt equity ratio in FY
2017 indicates the firm had less claims from outsiders as compared to those of owner.
 The operating profit ratio and net profit ratio can not be calculated because the firm is suffering
losses .
 Average collection period is quite high hence firm should focus on improving its debt collection
position.
SUGGESTIONS:
 More of manual data is being maintained . In markfed computerized accounting
is not in practice. Tones of manually recorded files are maintained and stocked
with not a proper way to store it. It leads to more time consumption and
increases chances of error as well.
 the inventory stock levels of fertilizers maintained in the organization are quite
high.
 the cost involved in maintaining and holding the stock of fertilizers and their
preservation is quite high . So proper measures should be taken in this regard .
 At markfed , the branch accounting system is such that the branches are
dependent on Head office and separate profit of each branch can not be
calculated.
 There is no proper maintenance of records and old files . Piles of dust can be
seen upon them.
 It requires proper management with respect to profit earning because the firm is
in loss since 2 years.
LIMITATIONS OF STUDY
  

There is no activity that can be completed without any limitation .The main
limitation faced during the preparation of this project report on financial
statements “of “Markfed” is :
 Time available for the completion of the project is very short.,Hence much
information could not be undertaken.
 The information collected through secondary data..Some of the information
might be wrong.
 The calculation & computation are based on valuable information given by
the firm.
 The report is based on the analysis of the last five years data,which may not
be sufficient in some cases.
 The analysis and conclusion made is as per my limited understanding for this
concerned subject.
 Lack of practical knowledge about conducting the research.
 Ratio itself will not completely show the company’s good or bad financial
position.
 The study of financial performance can be only a means to know about the
financial condition of the company and cannot show a through picture of the
activities of the company
CONCLUSION
 The purpose our project report at the organization was to help us
attain knowledge about the working pattern in a organization.
  Applying theoretical knowledge into practice helps in gaining
additional knowledge. We learnt the skill of planning, organizing and
completing the assignment within the stipulated time.
THANK YOU