jammu & kashmir milk producers’ co-operative limited

1 Jammu & Kashmir Milk Producers’ Co-operative Limited 14th Annual Report 2017-18

JAMMU & KASHMIR MILK PRODUCERS’ CO-OPERATIVE LIMITEDRegistered Office: Milk Plant, Cheshmashahi, Srinagar-190001

Registered under J&K Self Reliant Co-operative Act,1999Registration No. 763/252, dated 12.07.2004

Board of Directors

Sr. No. Name Designation

1. Shri Ashok Kumar Angurana IAS (Retd.), Chairman

2. Shri R.S. Sodhi, Managing Director, Director GCMMF Ltd., Anand

3. Shri Atul Kumar Agrawal, Sr. GM (Finance) Director GCMMF Ltd., Anand

4. Mr. Abdul Majeed Dar Director

5. Mr. Nisar Ahmad Bhat Director

6. Mr. Gulzar Ahmad Ganaie Director

7. Mr. Mohammad Amin Ganaie Director

8. Shri Ranjeet Singh Director

9. Shri Sahib Singh Director

10. Shri Avtar Singh Director

11. Shri Ved Prakash Sharma Director

12. Shri Dhiraj Chaudhary, Sr. Manager (T&P), GCMMF Ltd., Anand Director

13. Shri Mayank Tiwari, CEO, JKMPCL Member Secretary

Bankers Auditors

Jammu & Kashmir Bank Ltd. P. Garg & Co. J&K Grameen Bank Ltd. Chartered Accountants Bank of Baroda Jammu HDFC Bank

Production Units

Milk Plant, Cheshmashahi, Srinagar-190001 Milk Plant, Satwari, Jammu-180003 Phone/Fax: 0194-2501786 Phone/Fax: 0191-2450716


Report of the Board of Directors,

Annual Accounts and Auditor’s Report

Adopted at their Meeting held on 13th September, 2018

for presentation at the

14th Annual General Body Meeting to be held

on 29th September, 2018.


Ladies & Gentlemen,

I heartily welcome you all to the 14th Annual General

Meeting of Jammu and Kashmir Milk Producers

Co-operative Limited (JKMPCL). I mention with

immense pride that this Co-operative of farmers has

completed one more year of successful operations.

During last year, we continued our growth trend in

milk procurement & sales and achieved turnover of

Rs. 52.37 Cr with a phenomenal growth rate of 74%

over previous year.

In the beginning of the year, we continued to expand our

milk procurement network in hitherto uncovered areas

of the state. Under Centrally Sponsored Scheme, SIQ-

Clean Milk Production (CMP), we created additional

chilling capacity of 35 thousand litres per day (TLPD)

taking our total chilling capacity to 105 TLPD across

the state. With the financial assistance received from

Jammu and Kashmir State Rural Livelihood Mission

(Project UMEED), we expanded our procurement base

Chairman’s Speech

in District Ganderbal and District Kupwara. In these

districts, 45 Self-Help Group (SHG) based automatic

milk collection booths were setup on similar model as

established in other districts of the state during 2016-

17. In Kupwara, milk collection booths were further

linked with Bulk Milk Coolers (BMCs) installed

under CSS Intensive Dairy Development Programme

(IDDP) whereas those of District Ganderbal were

linked to BMCs installed under CSS SIQ-Clean Milk

Production Scheme there by bringing convergence

between various Govt. sponsored projects being

executed by JKMPCL. During the year, we also

signed a MoU with Department of Tribal Affairs J&K

for setting up of 125 Milk Collection Booths and 4

Bulk Milk Coolers across Jammu, Kathua, Rajouri

and Samba districts. These booths and BMCs will be

operated by the tribal youth of our state.

Modernization and expansion work of Milk Plant,

Cheshmashahi, Srinagar started during previous year

has been successfully completed in 2017-18, and new

unit with installed capacity of 50 thousand litres of

milk processing per day is fully operational now.

This upgraded unit is equipped with 5MT per day

curd manufacturing facility, fully automated Cleaning

in-place (CIP) system, 10 KLPH water softening

plant, 400 KVA of power backup and 3 automatic

form fill seal Milk Packing Machines among other

things. The plant is supported by state-of-the-art

milk testing laboratory which is equipped with


advance milk analysers to assess, control and assure

various parameters of milk & milk products. Similar

modernization work is also being carried out in Milk

Plant, Satwari, Jammu which is likely to be completed

by first half of next year.

2017-18 was one of the most challenging years in the

history of dairy industry in India as milk co-operatives

across the country witnessed drastic rise in milk

procurement. In absence of similar growth in demand

for milk & milk products, a major share of this milk

was converted to bulk commodities like Skimmed

Milk Powder and White Butter which resulted in

drastic slide in the prices of these commodities. As

a result, to control the influx of excess milk, co-

operatives across the country had to reduce their

procurement prices of milk. This phenomenon had its

impact on JKMPCL as well and hence, we received

almost twice the quantity of milk in Jammu during last

quarter of 2017-18. To support our newly established

procurement network, we continued to pay good prices

to the farmers (one of the highest in the country),

which has impacted profitability of our units. The

losses shown in financial statements represent the high

depreciation due to modernization of the plant. I am

confident that we will cover these losses in 2018-19

by growing profitably and will continue our journey

to achieve Rs. 100 Cr Sales turnover mark by 2020.

I now present to you our organization’s Annual Report

and the Audited Accounts for the year 2017-18.

REVIEW OF OPERATIONS

MILK PROCUREMENT

During the year 2017-18, we procured 126.14 Lakh

kilograms of milk from our milk producers and paid

Rs. 3986.00 Lakh as price for milk.

SALES & NET PROFIT

During the year 2017-18, we sold 126.38 Lakh litres of

milk valued at Rs. 5423.34 Lakh, 6968 litres of ghee

valued at Rs. 24.79 Lakh and 4.47 Lakh kilograms

of curd valued at Rs. 294.70 Lakh. The turnover of

the JKMPCL for the year 2017-18 has been Rs. 5237

Lakh.

PROCUREMENT NETWORK

As on 31st March 2018, 14 milk routes covering 230

Village-level Milk Producer’s Cooperative Societies

have been operational in the Kashmir region and 17

milk routes covering 185 Village-level Milk Producer’s

Cooperative Societies have been operational in the

Jammu region.

PRICE TO MILK PRODUCERS

I am delighted to mention here that during the

year 2017-18, the purchase price to farmers comes

to Rs. 31.60 per kg as against the previous year


price of Rs. 28.91 per Kg.

Before concluding my speech, I would like to thank

all those who have contributed directly or indirectly in

making this organization a viable unit. We thank various

government departments especially the Department of

Animal Husbandry, Dairying & Fisheries, Ministry of

Agriculture & Farmers Welfare, Govt. of India and

Department of Animal Husbandry J&K for active

support and cooperation given during the year 2017-

18. We also express our gratitude to Department of

Rural Development, Jammu and Kashmir State Rural

Livelihoods Mission, Department of Food Safety,

Department of Industries and Commerce, Labour

Department, Consumer Affairs and Public Distribution

Department, Commercial Taxes Department, Power

Development Department, State Pollution Control

Board, Lakes & Water Development Authority, all

our clients and National Cooperative Dairy Federation

of India for their support during the year 2017-

18. Our bankers, insurers, management consultants,

suppliers, distributors and transport contractors have

been of great help to us in achieving our growth,

I thank all of them for their support. I also thank

Registrar cooperative societies Jammu & Kashmir

for the support and cooperation given for registering

the cooperative societies during the year 2017-18.

GCMMF Ltd, Gujarat has been supporting us from

the date this organization started. We are extremely

thankful to the management of GCMMF Ltd for the

support they have rendered during the year 2017-18

and I hope that they will continue to support us in

the future as well.

Last but not the least I thank all the staff working in

the JKMPCL and milk producers of our cooperative

for their continued faith and commitment for successful

running of the organization.

Thank You,

Ashok Kumar Angurana, IAS (Retd.)

Chairman, JKMPCL

2017-18

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Meeting with Hon’ble CM

Shri Ashok Kumar Angurana, Chairman, addressing 13th Annual General Meeting

Abdul Ghani Kohli, Ex-Minister for Animal, Sheep Husbandry and Fisheries visited Srinagar Plant

Meeting with Secretaries of Dairy Cooperative Societies in Jammu

Shri R.S. Sodhi, MD GCMMF visit to BMC Dablehar in RS Pura

Former Hon’ble Minister for Tribal Affairs Jenab Chowdhay Zulfkar Ali at inauguration function of BMC Vijayu Pur

JKMPCL Board on 46th Dairy Industry Conference, Kochi Kerala

Independent Auditors’ ReportThe Board of Directors

Jammu & Kashmir Milk Producers’ Co-operative Limited, Srinagar

We have audited the accompanying financial statements of Jammu & Kashmir Milk Producers’ Co-operative Limited, which comprise the Balance Sheet as at 31st March, 2018, and Profit & Loss Account for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the organization in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the society’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of Jammu & Kashmir Milk Producers’ Co-operative Limited as at March 31, 2018;

(b) in the case of the Profit & Loss Account, of the loss for the year ended on that date.

for P. GARG & CO., Chartered Accountants FRN: 007135N Place: Jammu Dated: September 13, 2018 (P. K. Garg) Proprietor M. No.: 085912


JAMMU & KASHMIR MILK PRODUCERS’BALANCE SHEET AS

Significant Accounting Polices and Notes on Accounts-”Schedule B”In terms of our attached report of even date.

P. Garg & Co. Amit RainaChartered Accountants Dy. Manager (Accounts) FRN: 007135N

(P.K.Garg) Prop. (M.No. 085912)

Place: Jammu Place: Jammu Date: September 13, 2018 Date: September 13, 2018

LIABILITIES AS AT 31.03.18Amount (`)

AS AT 31.03.17Amount (`)

SHARE CAPITALAuthorised1,00,000 Shares of `1,000/- each 10,00,00,000 10,00,00,000

Subscribed & Fully Paid Up 5824 Shares (Previous Year 5824) of `1,000/- each 58,24,000 58,24,000 RESERVE & SURPLUSReserve Fund:Balance Brought Forward from Previous Year 29,59,656 27,80,654 For the Year 1,66,629 1,79,002

31,26,285 29,59,656 SECURED LOANJ&K Bank Ltd. (Secured by Bank FDR) 37,38,228 22,93,239 HDFC Bank (secured by hypothecation of stock & book debts) 2,40,27,123 -

2,77,65,351 22,93,239 Profit & Loss AccountProfit Brought Forward from previous year 10,89,171 7,25,091 Add/(Loss) : Profit/(Loss) for the Year (32,36,465) 3,64,080

(21,57,294) 10,89,171 Unutilized Govt. Grant Opening balance as on 01.04.2017 2,28,86,198 3,08,35,706 Add : Opening Interest 6,42,525 -

2,35,28,723 3,08,35,706 Add:- Received During the year 1,59,50,000 9,10,37,000 Add:- Interest received on FDR (Net of TDS) 2,03,353 6,42,525 Add:- Opening Adjustment entry 33,46,692 - Less:- Incurred during the Year Capital Expenditure 3,45,06,645 9,78,24,597 Planning & Monitoring 4,64,481 61,053 Mgmt of DCS staff/ Propulsion for Vehicles 4,33,516 7,72,858 Paid to Director and Animal Husbandary 3,10,000 3,28,000

73,14,126 2,35,28,723 CURRENT LIABILITIES & PROVISIONSA. Sundry Creditors for Goods, Services, Expenses ,etc. 2,38,37,888 2,33,64,441 Other Liabilities 1,77,04,478 1,79,64,682 Due to Societies 1,94,61,927 59,02,438 Advances from Customers 16,25,145 1,36,74,300 B. Provisions Proposed Dividend - 4,13,000 Provision for Taxation (Net of Advance Tax) - 2,63,118

6,26,29,438 6,15,81,979 TOTAL 10,45,01,906 9,72,76,768


Mayank Tiwari Ashok Kumar Angurana Chief Executive Officer Chairman R.S. Sodhi Ranjeet Singh Abdul Majeed Dar Sahib Singh Nisar Ahmad Bhat Avtar Singh Gulzar Ahmad Ganaie Ved Prakash Sharma Mohhamad Amin Ganaie Dhiraj Chaudhary

CO-OPERATIVE LIMITED, SRINAGARAT 31ST MARCH, 2018

ASSETSAS AT 31.03.18

Amount (`)AS AT 31.03.17

Amount (`)FIXED ASSETS (As per Schedule 'A') 3,79,18,189 1,84,12,165

CURRENT ASSETSInventories(At lower of Cost or Net Realisable Value)

Stores, Spares, Packing Materials, etc. 1,08,93,645 76,52,822 Raw Materials (Goods in transit) 1,38,12,546 61,68,756 Raw Milk Stock 31,13,870 16,01,508 Finished Goods 1,41,74,577 14,93,386 Cattle Feed 76,472 7,16,840

4,20,71,110 1,76,33,312

Sundry Debtors(Unsecured,considered good) 90,01,594 1,05,35,569

Cash & Bank BalancesCash-in-Hand - 87,694 With Scheduled Banks in Current accounts 42,97,341 3,86,60,201 With Scheduled Bank in Fixed Deposit Account 41,73,985 75,00,000 84,71,326 4,62,47,895

Loans & AdvancesInterest accrued on deposits 22,571 2,34,585 Advances recoverable in cash or in kind or for value to be received or pending adjustments 67,80,693 39,76,821 Security Deposits 2,36,421 2,36,421

70,39,685 44,47,827

TOTAL 10,45,01,906 9,72,76,768

Directors Mohammad Amin Ganaie Ranjeet Singh Abdul Majeed Dar Sahib Singh Nisar Ahmad Bhat Avtar Singh Gulzar Ahmad Ganaie Ved Prakash Sharma Dhiraj Chaudhary Atul Kumar Agrawal


JAMMU & KASHMIR MILK PRODUCERS’

PROFIT AND LOSS ACCOUNT FOR THE YEAR

(Amount in `)PARTICULARS 2017-18 2016-17

To Opening Stock : Finished Goods 14,93,386 37,69,599 Raw Milk Stock 16,01,508 7,27,047 Raw Material 61,68,756 90,34,231 Cattle Feed 7,16,840 - 99,80,490 1,35,30,877 To Raw Milk Purchases 39,86,88,303 19,25,52,406 “ Raw Materials Purchases 3,11,23,108 3,46,98,205 “ Freight & Procurement Expenses 3,13,20,208 1,68,36,367 “ Purchase of Cattle Feed 61,69,785 48,23,586 “ Packaging Expenses 1,15,97,138 96,12,274 “ Conversion Charges 14,96,998 - “ Processing Expenses 38,37,829 27,52,054 Less Grant for Crates - 38,37,829 (5,00,000)“ Power & Fuel 1,15,82,907 78,92,351 “ Repairs & Maintenance Expenses 23,72,822 33,53,975 “ Forwarding & Marketing Expenses 1,72,76,125 44,46,384 “ Salary & Wages 2,24,10,034 1,77,26,052 “ Cooperative Development Expenses - 15,22,919 Less Grant Received - (10,00,000) Less Balance Recoverable - (5,22,919)“ Postage, Telephone, Printing & Stationery 10,91,069 7,57,804 “ Travelling & Conveyance 47,57,675 21,61,948 “ Insurance Premium 4,29,143 2,70,531 “ Rates & Taxes 1,26,245 76,199 “ General Expenses 12,54,322 8,27,143 “ Audit Fees & Expenses 5,04,431 3,95,864 “ Interest & Bank Commission 13,60,128 66,178 “ Legal & Professional Charges 1,44,600 4,36,000 “ Depreciation 26,56,263 25,09,660 “ Net Profit/(Loss) Carried Down (29,08,822) 14,79,249

TOTAL 55,72,70,801 31,67,05,107 APPROPRIATIONS: “ Transfer to Reserve Fund 1,66,629 1,79,002 (Income Other than business being interest Income) “ Income Tax Current Year - 5,23,167 Earlier Year 1,71,014 - “ Proposed Dividend ( Previous Year @ 10%) - 4,13,000 “ Balance carried to Balance Sheet (32,46,465) 3,64,080

TOTAL (29,08,822) 14,79,249

Significant Accounting Polices and Notes on Accounts-”Schedule B”In terms of our attached report of even date.

P. Garg & Co. Amit RainaChartered Accountants Dy. Manager (Accounts) FRN: 007135N

(P.K.Garg) Prop. (M.No. 085912)

Place: Jammu Place: Jammu Date: September 13, 2018 Date: September 13, 2018


CO-OPERATIVE LIMITED, SRINAGAR

ENDED 31ST MARCH, 2018

(Amount in `)PARTICULARS 2017-18 2016-17

By Sales Milk & Milk Products 51,37,07,777 29,87,31,562 Other Products 99,56,965 50,48,895

52,36,64,742 30,37,80,457 Less : Excise Duty - 341

52,36,64,742 30,37,80,116

“ Interest Income 1,66,629 1,79,002 “ Other Income 22,61,965 27,65,499 “ Closing Stock : Finished Goods 1,41,74,577 14,93,386 Raw Milk Stock 31,13,870 16,01,508 Raw Material 1,38,12,546 61,68,756 Cattle Feed 76,472 7,16,840 3,11,77,465 99,80,490

TOTAL 55,72,70,801 31,67,05,107

By Net Profit Brought down (29,08,822) 14,79,249

TOTAL (29,08,822) 14,79,249

Mayank Tiwari Ashok Kumar Angurana Chief Executive Officer Chairman R.S. Sodhi Ranjeet Singh Abdul Majeed Dar Sahib Singh Nisar Ahmad Bhat Avtar Singh Gulzar Ahmad Ganaie Ved Prakash Sharma Mohhamad Amin Ganaie Dhiraj Chaudhary



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JAMMU & KASHMIR MILK PRODUCERS’ CO-OPERATIVE LIMITED, SRINAGAR

SCHEDULE TO THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2018

SCHEDULE – B

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

1. SIGNIFICANT ACCOUNTING POLICIES:

A. BASIS OF ACCOUNTING:

The Society prepares its accounts on historical cost conventions, accrual basis of accounting except otherwise stated and in accordance with the generally accepted accounting principles accepted in India.

B. REVENUE RECOGNITION

i) Revenue on sale of Products is recognized when significant risk and reward of property in goods is transferred to customer which coincides usually on delivery of goods.

ii) Interest income is recognized on time proportion basis of principal amount and the rate applicable.

C. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition inclusive of duties, taxes, incidental expenses and interest etc. incurred upto the date the asset is put to use. Grant / Subsidy received against specific depreciable fixed assets has been treated as reduction in the cost of the respective assets.

D. DEPRECIATION:

Depreciation on Fixed Assets has been provided as specified under the Income Tax Act, 1961 and the Rules framed there under on WDV basis.

E. INVENTORIES:

1) Raw materials, Packing Material and Stores & Spares are valued at cost on FIFO basis.

2) Finished Goods are valued at cost or net realizable value whichever is less determined on average cost of production.

And the method of valuation is the same as was adopted in the preceding year.

F. ACCOUNTING FOR GOVERNMENT GRANTS

1) Capital grants received for purchase of capital assets has been reduced from the cost of respective assets.

2) Revenue grants received have been reduced from the respective expenditure head in the P&L Account.

3) Interest earned (Net of Tax Liability thereon) by temporary parking of unutilized grant in bank fixed deposit is reflected along with unutilized grant as at end of the year.

G. PROVISIONS AND CONTIGENT LIABILITIES:

Provisions have been made of known liabilities as a result of past events which require outflow of economic resources. Where the probability of outflow of economic resources is remote, neither any provision nor any disclosure is made.


For P. Garg & Co., Amit Raina Mayank TiwariChartered Accountants Dy. Manager (Accounts) Chief Executive OfficerFRN: 007135 N

(P. K. Garg) Ashok Kumar Angurana Prop. ChairmanMembership No.085912

Place : Jammu Place : Jammu Date: September 13, 2018 Date: September 13, 2018

2. NOTES ON ACCOUNTS:

A. The Co-operative Society has engaged employees on contractual basis; hence no provision has been made in the books of accounts on account of gratuity.

B. The amount appropriated towards Reserve Fund to the extent of Interest earned is ` 1.67 lacs (Previous Year ` 1.79 lacs). In view of current year losses, no Dividend is proposed for the year (Previous Year ` 4.13 lacs).

C. The society was being managed by an Expert Board nominated by Govt of Jammu and Kashmir vide its order No.51 –ASH of 2004 dated 8th April, 2004, No. 96-ASH of 2004 dated 21st July 2004., order No.143-ASH of 2005 dated 14th October, 2005 and order No. 20-Coop. of 2007 dt. 30th August, 2007. During the financial year 2004-05, Govt. of Jammu & Kashmir transferred land, buildings, equipments & Machinery of erstwhile Federations (The Kashmir Valley Milk Producers Co-operative Federation Limited and the Jammu Co-operative Milk Federation Limited) at Zero value to this society (JKMPCL Limited). With effect from August 2009 the management of the society has been taken over by the duly elected Board of Directors in terms of the Articles of Association of the society.

D. Contingent Liabilities not provided for in respect of:

Sr.

No.Particulars

As at 31st

March, 2018

As at 31st

March, 2017

(i)Demand raised by the PHE department against

water charges (net of provided in books) ` 27,59,400/- ` 27,59,400/--

E. Balances of Sundry Creditors, Debtors and Loans & Advances are subject to confirmation and in the opinion of the Management have realizable value at which they have been shown in the financial statements

F. Previous year’s figures have been regrouped where ever required.


jammu & kashmir milk producers’ co-operative limited

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