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ORGANISATION UNDERSTANDING

THE PANCHMAHAL DISTRICT CO-OPERATIVE MILK


PRODUCERS’ UNION LTD. GODHRA

By

Gyaneshwar Ranjan and Amarkant Sinha

Organisational Traineeship Segment (OTS)


PRM2004-06

INSTITUTE OF RURAL MANAGEMENT ANAND

2005
ACKNOWLEDGEMENT

We are thankful to our host organisation “The Panchmahal District Co-operative Milk
Producers’ Union Limited” for giving us the opportunity to carry out our Organization
Traineeship Segment (OTS) of our PRM course. We are grateful to Dr. R. S. Patel,
Managing Director,“The Panchmahal District Cooperative Milk Producers’ Union
Limited” for providing us with the opportunity to understand the market and
functioning of the dairy. We owe special words of thanks to our Reporting Officers
Dr. A. K. Panchal and Mr. R. J. Mehta for helping us during the progress of the work
and providing us valuable insights.
We are also very thankful to the other staffs of various other departments who helped
us during the study of the organization. And we extend our heartiest thanks to all the
personnel of “The Panchmahal District Cooperative Milk Producers’ Union Limited”
who cooperated with us during the study of the organization.
Finally, we thank to our faculty guide, Prof. S.N. Biswas for offering helpful
suggestions and comments. Prof S.N. Biswas has guided us in this project through his
invaluable constructive suggestions without which we would not have been through
this project.

Amarkant Sinha (25054)


Gyaneshwar Ranjan (25070)

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EXECUTIVE SUMMARY

Students’ Name : Gyaneshwar Ranjan and Amarkant Sinha


Organisation : The Panchmahal District Co-operative
Milk Producers' Union Limited, Godhra
Reporting Officer : Dr. A. K. Panchal and Mr. R. J. Mehta
Faculty Guide : Prof. S. N. Biswas
Project Title : Organization Understanding

Scope of study: The scope of our study included understanding of the structure,
functions and interface with the external environment of “The Panchmahal District
Co-operative Milk Producers' Union Limited, Godhra”. The study also includes the
chilling centers, the cattle feed plant and the dairy cooperative societies associated
with the dairy.
Objectives:
 To have understanding of what an organization is all about.
 To know its activities, its strength and weaknesses.
 To understand how an organization comes into existence, how it grows, adapts
and absorbs changes and sustains itself.
 To understand the interface between the organization and its external
environment.
 To understand the perspectives and ethos of individuals as it exists in the
organization.
 To understand the dynamics that comes into play at various levels in the
organization.
Methodology: Appreciative enquiry, semi structured interviews with stakeholders,
interviews, observation and informal discussions are the primary data sources, and the
secondary data sources consist of various documents mainly annual reports, financial
statements etc. available in the organization. The concepts of 7-S framework were
applied to gain a holistic understanding of the organization.
Genesis: The Panchmahal District Co-operative Milk Producers' Union LTD., Godhra
popularly known as Panchmahal Dairy is a cooperative venture of the milk producers
of Panchmahal and Dahod districts. It was established in the year 1973 and during the

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year of inception its milk procurement was 21,000 liters. The dairy was managed by
GDDC till 1982. The Panchmahal cooperative dairy development programme was
taken up under NDDB’S operation flood-II programme during September 1982.
During OF-II programmes the input activities viz. veterinary services, extension
programmes, Artificial insemination programmes were initiated.
Mission: The union as such does not have any explicit mission but the same is
reflected in its quality policy which states “we are committed to excellence, both in
providing the best quality inputs and services to our esteemed milk producers and
excellent quality of milk and milk products to patron consumers.
“We shall continue to adopt this state of the art technology, HACCP principles and
innovations for manufacturing products and providing congenial and healthy
environment to encourage excellence in every area.”
Strategies: Quality consciousness in the consumers created the demand of clean and
healthy milk having minimum bacterial load. The dairy is planning to be a leader in
the quality of milk and for that various measures such as installation of bulk milk
coolers, automatic milk collection station, computerization of DCS, providing
stainless steel cans, quick reception and testing of milk both at DCS and dairy dock
are undertaken.
Current Scenario: The Panchmahal District Co-Operative Milk Producers' Union
Ltd., Godhra is located at Lunawada Road, 2.5 Km. away from Godhra City. It is
mainly a liquid milk plant with installed capacity of 2 LLPD. But at present the dairy
is handling more milk than its installed capacity. In lean season it handles 2.5LLPD
and its handling capacity in flush season up to 3.25 LLPD. These figures also show its
level of procurement in those seasons. It is producing Liquid Milk, Ghee, Table
Butter, Dried Milk & Dried Milk Products, i.e. Skimmed Milk Powder, Mithaee
Makers Powder, Gulab Jamun Mix & another important milk is Flavoured Milk as a
very high demand. The Panchmahal Dairy is manufacturing its products under the
brand names “AMUL” & “PANCHAMRUT". It was awarded with HACCP & ISO
9002 certificates for its high quality products & production polices by Quality
Assurance Service QAS, Australia in the year 2003.
The profit and loss account statement of milk shed reveals the increasing business and
increased returns to its members continuously. The financial viability of milk union is
becoming stronger and stronger day by day. Total turn over of the Panchmahal Dairy

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during the year 2004-2005 was ('000 Rs.) 1,75,90,39. Total profit made was ('000 Rs)
5998.

TABLE OF CONTENTS

1. INTRODUCTION

1.1 Name

1.2 Location and Topographical Conditions

1.3 Objective of the Panchmahal Dairy

2.0 ENVIRONMENT

3.0 TECHNOLOGY

4.0 CENTRALITY

5.0 LINE AND STAFF FUNCTIONS

6.0 THE PANCHMAHAL DAIRY FROM THE 7-S FRAMEWORK

6.1 Shared value


6.1.1 Core values
6.1.2 Vision
6.1.3 Mission
6.4.1 Management of information system
6.4.2 Management by objective at the Panchmahal dairy
6.5.1 Individual initiative
6.5.2 Risk tolerance
6.5.3 Direction
6.5.4 Integration
6.5.5 Management support
6.5.6 Control
6.5.7 Identity
6.5.8 Conflict tolerance
6.5.9 Communication pattern

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6.6.1 Productivity flexibility
6.7.1 Recruitment process
6.7.2 Induction
6.7.3 Training activities
6.7.4 Performance appraisal system
6.7.5 Promotion and transfer
6.7.6 Worker and management relations
6.7.7 Employee turn-over rate

7. DEPARMENTS

7.1 Personnel and administrative department

7.2 Procurement Department

7.3 Purchase Department

7.4 Production Department

7.5 Store Department


7.6 Marketing Department
7.6.1 Functioning of Marketing Department
7.6.2 Customer Handling Procedure
7.6.3 Future strategies of Marketing Department

7.7 Quality control department


7.8 Project and input department
7.8.1 Artificial Insemination and Veterinary services
7.8.2 Supply of Fodder Seeds
7.8.3 Women cooperative dairy societies
7.8.4 Women Extension Workers
7.8.5 Women Dairy Cooperative Leadership Programme

7.9 Accounts department

8.0 FINANCIAL ANALYSIS

9. PERFORMANCE INDICATORS

10.0 SWOT ANALYSIS OF THE ORGANISATION

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11.0 LEARNING

REFERENCE

APPENDIX 1

APPENDIX 2

APPENDIX 3

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List of Tables

Serial No. Page No.

1. Present Status of the Panchmahal Dairy 3

2. Board of Directors 4

3. Induction Schedule 20

4. Type of milk sold 29

5. Financial Ratios 36

6. Share Capital 38

7. Number of Societies Organized 38

8. Total Sales 39

9. Societies Come under A. I. 39

10. Numbers of A. I. Performed 40

11. Fodder Seed Sales 41

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Lists of Figures

Serial No. Page No.

1. Emery and Trist Framework 5

2. Perrow’s Technology Classification 6


3. The 7-S Framework 9

4. Miles and Snow’s Model 12

5. Competitive Strategies Framework by Michel Porter 13

6. Procurement-cum-distribution Channel. 25

7. Sale of Liquid Milk per Day 29

8. Manufacturing of Milk Products 30

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1. INTRODUCTION

1.1 Name
The name of the organisation is “The Panchmahal District Co-operative Milk
Producers' Union Ltd” (PDCMPUL), Godhra.

1.2 Location and Topographical Conditions


The Panchmahal dairy is located at Lonawada Road, 2.5 km away from Godhra town
in Panchmahal district. The dairy procures milk from the producers who live in 1600
villages of Panchmahal and Dahod districts. These are the backward districts of
Gujarat, where 90% people are tribal and in which 60% people live below poverty
line. The average rainfall of the districts are 600 to 750 mm but it rains irregularly
therefore the districts have to face draught frequently. Most of the land is rain-fed land
and the farmers have to depend upon the monsoon. Apart from this, the most of its
functioning areas (especially Dahod) are hilly and therefore, the transportation cost is
higher in collecting milk from the scattered villages. Again, it can't be said that the
Panchmahal dairy is situated at strategic location in term of getting any large market
for its produces but with its own efforts and also with GCMMF, it is continuing
scaling up the sales through exploring new areas such as Indore, Dahod, etc.

1.3 Objective of the Panchmahal Dairy

• To procure raw milk from the societies and execute effective marketing of the
milk and milk products after processing the raw milk in order to uplift the
social and economical status of the producers.
• To ensure better & remunerative market for milk to milk producers round the
year.

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• To provide veterinary aids to the members at their door step through routine
mobile veterinary routes and also to attend emergency call, besides providing
facilities of artificial insemination.
• To arrange an effective training for the members of the union & related
societies to minimize the cost of milk produced at village level.
• To create direct or indirect employment to enhance milk production activities.
• To supply balanced cattle feed as per requirement of milk producers at
reasonable rates.
• To provide technical inputs to the milk producers for producing clean milk at
village level.
• To execute various social welfare programmes for the upliftment of the
members as well as the societies as a whole.

1.4 History and Development

The Panchmahal District Co-operative Milk Producers' union was organized at


Godhra in May 1973. Initially, the dairy used to collect 21,000 liters of milk from the
40 villages of Panchmahal district. Milk used to be procured and delivered to the
adjacent district union in Kheda and Baroda on account of lack of processing facilities
at Godhra. Only bordering villages were availing these benefits of arrangements. So,
in order to increase to a larger numbers of farmers of deep-seated villages, a milk
processing plant with 30,000 LPD capacities was established at Godhra in 1977.

The union was managed by GDDC till 1982. The dairy development programmes on
the lines of the Anand pattern was undertaken under operation flood II programmes
during the year 1982-83. The capacity of the milk processing plant was further
expanded to one lakh LPD.

Under Operation Flood III programme it was proposed to procure milk from 725
DCS. The procurement expected to be of 90,000 liters by the end of 1992. The
proposed financial outlay under OF III programme for the union was Rs. 3.15 lakh,
which involved investment on chilling centers, expansion of existing dairy plant,
technical input service and support to villages’ dairy cooperatives.

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In the year 1999 - 2000 the organization received ISO 9002 and HACCP certificates
by an industrial agency QAS. Where ISO 9002 stands for the Quality Management
System of the milk and milk products such as milk powder, butter, butter milk, ghee
and gulab jamun mix, and HACCP covers the safety and quality management system
for the manufacturing of milk and milk products.
The average milk collection per day during the year 2004-05 was 2,58,000 liters from
1,600 milk producers cooperative societies. Solid Not Fat (S.N.F.) and Fat are the two
main bases on which the milk is priced with the maximum of Rs. 205 Fat/Kg for
buffalo milk.
Table No. 1- Present Status of the Panchmahal Dairy
State Gujarat

District Panchmahal and Dahod


Address The Panchmahal District Co-operative Milk
Producers' Union Ltd” (PDCMPUL,
Lonawada Road, Godhra - 389001
Type of Products Double Toned Milk, Single Toned Milk,
Standardized Milk & Whole Milk, Skimmed
Milk Powder, Ghee, Better, Flavored Milk
and Gulab Jamun Mix
Product Brand Name Panchamrut and Amul
Marketed By GCMMF and Itself
Milk Handling Capacity 2 Lakh Litres/Day
Capacity utilization 100%
Pasteurization Capacity 30000 Litres/Hour
Capacity of animal feed plant 100 tones / day
Capacity utilization 100%
Capacity of Powder Plant 16 Mt/Day
Capacity of Ghee Plant 12 Mt/Day
No. of Milk Routes for procurement 75

No. of Village Level Society 1600


Staff Strength(permanent) 492
No. of Agents 235

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The capacity utilization animal plant is 100%. The capacity utilization fluctuates
according to the demand. In February it worked at 200% capacity during peak. The
dairy is handling more milk per day than its installed capacity of 2LLPD. The powder
plant remains closed in the lean season of milk production.

1.5 Governing Structure

The Panchmahal District Co-operative Milk Producers' Union Limited is governed by


20 members Board of Directors. Out of these fifteen are elected members and rest five
are nominated or ex-officio members; one from NDDB, two from GCMMF, District
Registrar (Co-operative Society) and Managing Director. The Chairman comes from
the 15 elected members. Detail of the Board of Directors is given below.

Table no. 2 - Board of Directors (2004-05)

Shri Bhupendrasinh Prabhatsinh Solanki Chairman


Shri Shanabahi Galabhai Patel Director
Shri Kanubhai Somabhai Patel Director
Shri Narvatsinh Khatusinh Chauhan Director
Shri Ravjibhai Shankarbhai Patel Director
Shri Ganeshbhai Mathurbhai Patel Director
Shri Magansingh Ratansinh Baria Director
Shri Rameshbhai Devjibhai Patel Director
Shri Vasantkumar Kantilal Pandya Director
Shri Bachubhai Somabhai Parmar Director
Shri Indrajitsinh Pramodsinh Parmar Director
Shri Ranvirsinh Raysinh Solanki Director
Shri Jiviben Virabhai Patel Director
Shri Ilaba Jayadrathsinh Parmar Director
SMT. Sumanben Kalsing Bhabhor Director
Shri J. G. Pandya District Registrar
Shri Jayen Mehta Representatie of GCMMF
Shri Atulkumar Agrawal Representatie of GCMMF
Dr. Mohan Namjoshi Representative of NDDB
Dr. R. S. Patel Managing Director

2.0 ENVIRONMENT

The environment of an organization identifies everything outside an organization’s


boundaries. The “general environment” encompasses conditions that may have an

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impact on the organization, but their relevance is not overtly clear whereas the
“specific environment” is that part of the environment that is directly relevant to the
organization in achieving its goals. It includes producer members, customers,
competitors, G.C.C.M.F. and government regulatory agencies.
The environment that the Panchmahal Milk Union faces is of the placid-clustered
type according to the classification by Emery and Trist.

PLACID-RANDOMIZED PLACID-CLUSTERED
CHARACTERISTICS

Relatively stable Relatively stable


Low uncertainty Threats slow but clustered

Changes slow and random Relatively more attention to environment


Centralized structures
Less attention to environment

DISTURBED-REACTIVE TURBULENT FIELD

More complex and changing Most dynamic and uncertain


Many competitors with one or more Change ever-present
organ domin organizations dominant Elements in the environment create a
More flexibility needed to counteract compounded change effect
environme environment and competitors Highest order of flexibility and innovation
More decentralized structures needed to counteract

Figure 1: Emery and Trist Framework

After introduction of MMPO in 2002, the environment in dairy sector has become
very dynamic. Now any major player can enter into the milk shed of another
established player and try to entice its produces. In the case of the Panchmahal Milk
Union, major competition is faced from the “Sanchi Dairy” besides other small
players such as local doodhiyas. Still, in the local market of operations, the
Panchmahal dairy is the dominant player. To be more effective in such environment,
the organization needs to be more flexible and more decentralized as compared to its
existing form.

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3.0 TECHNOLOGY

The technology refers to the information, equipment, techniques and processes


required to transform inputs into outputs in the organization. According to Perrow
technology can be defined “as the action that an individual perform upon an object,
with or without the aid of tools or mechanical devices, in order to make some change
in that object.” According to his classification, the Panchmahal Dairy employs a
routine technology. It is easy to analyze the problems. There is mass production. The
routine technology can be accomplished best through the standardized coordination
and control.

Task Variability
Few Exceptions Many Exceptions

Craft Non-routine
Unanalyzable
Ill defined &
Problem Analyzability

Routine Engineering
Well defined &
Analyzable

Figure 2: Perrow’s Technology Classification

The technology used by the dairy is of routine type in which there is very low scope
of any change from the procedure followed. There is mass production and personnel
in production department keep on performing same task. The technology at the union
is characterized by low task variability. There are few exceptions and people do the
same job in the same way most of the time. There is high formalization and
centralization. The span of control is high and the coordination and control is done by
planning and rigid rules in the organization.

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4.0 CENTRALITY

We tried to analyze the different centralities of the Panchmahal dairy on the basis of
the framework given by Prof. Katar Singh and Prof. Debiprasad Mishra.

4.1 Member Centrality

In this region, most of the villagers are very poor and their livelihood depends on
agriculture and animal husbandry. Selling milk is the main business of the villagers
after farming. Even, rainfed agriculture becomes secondary livelihood option due to
the infrequent rainfall and subsequent drought. A major portion of the family income
depends on the income of pouring milk. The Panchmahal dairy returns 83 paise/rupee
of milk to the producers. This is the reason of high practice of rearing cattle in the
household and pouring milk in the society. The average household has 4 to 6 cattle.
Therefore, member centrality is high with the dairy business in this area.

4.2 Patronage Centrality

The products of the Panchmahal dairy sell at the brand names of Amul and
Panchmrut. Amul is the market leader in the dairy sector and continuing progressing
ahead. Panchmrut is also a well know brand in its domain and no other brand is its
closed competitor. Under the cooperative principle, the Panchmahal dairy procures
milk whatsoever producers want to sell. In this way, it procures the high percentage of
milk quantity from 1600 villages out of total 1900 villages in its domain. Therefore, it
can be said that it has captured the large factor market (here raw liquid milk) and has
the capacity to dictate the local market. So, the patronage centrality is also high. But,
there is a need of market development as well as new market for catering the growing
milk procurements.

4.3 Domain Centrality

In this region, this sector constitutes a major business, as there is no any other
industry in this region except one automobile industry in the Halol Taluka of
Panchmahal. The Panchmahal dairy gives the major contribution in the GDP of the

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region. People of 1600 villages out of 1900 villages are attached with the dairy and
get direct benefit from it.

5.0 LINE AND STAFF FUNCTIONS

Line function is directly involved in the main functions, that is, manufacturing
products or delivering services. Its contribution is most comprehensive to the
organization. In this organization the line functions are procurement, production and
marketing of milk and milk products.
The staff function is a specialist function and is not directly involved in the production
process. Its main function is to provide support to the line function. This function
extends across organization and helps make the line function most effective. Typical
staff function includes administrative, training, personnel, accounts, purchase, store
etc.
Here in this organization, it is seen a clear cut demarcation between staff and line
department, both in terms of culture and attitude of the employees. The employees in
the line departments think that they are the ones who do all the important work, but it
is the employees from the staff department who enjoy more power and are close to the
management. Therefore, it is found that there exists a bit of grudge among the line
staffs. When we talked to the staff people, we found that some of them were candid
enough to admit that they are close to the power centre as they look after the finances
and also the personnel policies. Moreover the line employees think that the staff
people have a comfortable job as they have routine life and their work schedule is also
fixed from 9 A.M to 5 P.M. on the other hand the line people have to work in shifts
and the shifts changes every week.

6.0 THE PANCHMAHAL DAIRY FROM THE 7-S FRAMEWORK

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Figure 3: 7-S Framework
Figure 3: 7-S Framework

6.1 Structure
Organization structure defines how tasks are to be allocated, who reports to whom,
and the formal coordinating mechanisms and interaction patterns that will be
followed. Organization structure has three components: complexity, formalization and
centralization. Complexity refers to the degree of differentiation that exists within the
organization. Horizontal differentiation considers the degree of horizontal
separation between the units. The horizontal differentiation was high as the
organization is having various plants located at different places. The Panchmahal
dairy had commissioned a 100 MT/day capacity Cattle Feed Plant at Khandia, in
Shehra Taluka in November 2004. The organization has three chilling centres located
at Lunawada (Chopda), Limdi and Shivrajpur. For providing artificial insemination a
Frozen Semen Station was also established in the dairy premises. At present there is
1600 Dairy Cooperative Societies working under the organisation.
Vertical differentiation refers to the depth of the organizational hierarchy. The
vertical differentiation is high in production department but it is low in other
departments.
Formalization refers to the degree to which jobs within the organization are
standardized. There are explicit job descriptions, lots of organizational rules and

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clearly defined procedures covering work processes in the organization. There is very
less scope of doing anything beyond the laid down rules.
Centralization refers to the degree to which decision making is concentrated at a
single point in the organization. It is concerned with the dispersion of authority to
make decisions within the organization. In the Panchmahal dairy, most of the financial
powers rest with “Board of Directors”. The diagram of organization structure has been
given in Appendix 1.
The main functions of the organisation are:
1. Procure milk from Panchmahal and Dahod areas
2. Selling milk and milk products to the nearby markets
3. Providing cattle improvement facilities to the farmers through veterinary camps
and member education
4. Providing cattle feed
5. Group insurance schemes under the cooperative setup for the farmers in LIC of
India.
6. Provide different welfare activities to the members under the co-operative
principle of social concern with the help of the Government of Gujarat and other
funding agencies such as UNICEF, GEDA etc.
The plant has been divided into following sections according to their functions: Dairy
dock and processing, Engineering, Internal audit, Purchase, Care taking, Security (on
contract), Marketing, Quality control, Transport pool, and Central store, Accounts,
Establishment, Information, Projects and Inputs and Cattle feed plant.
There is departmentalization by virtue of horizontal differentiation in the Panchmahal
dairy. The above-mentioned sections have been segregated to the ten departments:
Personnel & Administration (P&A), Marketing, Account, Procurement, System,
Production, Purchase & Storage (P&S), Engineering, Projects & Inputs (P&I) and
Quality & Control (Q&C). The different departments are segregated on the basis of
their functions and specializations.

The elite departments are the Procurement Department and the P&A (Personnel and
Administration) Department. They derive this distinction on the basis of their
criticality to the organisation or their closeness to the power centres. The Procurement
department personnel are in close contact with the Board of Directors and hence have

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a network centrality. The P&A department is dominant by virtue of its powers in the
various administrative matters.

6.2 Strategy

Strategy refers to the determination of long-term goals and objectives of the


organization, and the adoption of courses of action and the allocation of resources
necessary for carrying out these goals. Strategy can be viewed as premeditated or as
something that can become clear only over the time. Strategy considers both means
and ends.

The main strategy followed by the organization is market` differentiation strategy


under which the organization is trying to offer higher quality products and also new
products. By using techniques like advertising, market segmentation and prestige
pricing the organization is becoming more and more market oriented. The other main
strategy applied by the organization is that of cost control. This is mainly done by
reducing the wastage and other expenditures those are unnecessary in nature.

When we see the strategies followed by the organization from the view point of
“Miles and Snow” (1960s) then the organization will come under the category of
Analyzers. Under this strategy the goals become stability and flexibility in the
changing environment. It has achieved stability over the years of its functioning as a
significant player in the local market. Also, it needs flexibility to change itself quickly
according to the changing environment in which it operates. Being an Analyzer type
of organization, it refrains from taking risks, and tries to get maximum benefits out of
the opportunities offered by the market. It waits for performance of new products
launched by other players and if they succeed, the organization quickly offers that
product in the market. The structure is moderately centralized and there is tight
control over current activities. The Panchmahal dairy started manufacturing Amul’s
masti dahi and amul’s kool flavoured milk after it became successful in the market.
The dairy is smaller in comparison to other sister dairies so it can’t afford to take risks
as prospectors. The dairy wants to minimize risk while maximising the profit.

Figure 4: Miles and Snow’s Model

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ANALYZER PROSPECTOR
Goals Environmen Structural Goals Environment Structural
t Characteristics Characteristics
Stability Changing  Moderately CentralizedFlexibility Dynamic  Loose Structure
and Control  Low division of
Flexibility  Wait and follow labour
approach  Decentralized
 Minimize risk  Low formalizati
maximise
opportunity

DEFENDER REACTOR
Goals Environmen Structural Goals Environment Structural
t Characteristics Characteristics
Stability Stable  Tight Control All good As perceived  Hybrid of other
and  Extensive division things at all three strategies
Efficiency of labour times  Lack of clarity
 High formalization on strategy
 Centralized
MARKET TARGET

TYPE OF COMPETITIVE ADVANTAGE


BEING PURSUED

Overall
Low-Cost Broad
Leadership Differentiation
Strategy Strategy

Lower Cost Differentiation


Best-Cost
Provider

Focusedxxii Focused
Low-Cost Differentiation
Strategy Strategy
A Broad
Cross-Section
of Buyers

A Narrow
Buyer Segment

Figure 5: The Five Generic Competitive Strategies Framework by Michel

Porter

The Panchmahal dairy follows a Best-Cost Provider Strategy

Strategic Target: At present the Panchmahal dairy is targeting customers of all the
strata of income, which can be understood from the type of milk it is selling to
consumers. The dairy is having milk with 1.5% fat for lower end consumers and it is
having whole milk with 6% fat for higher end consumers.
Basis of competitive advantage: The dairy is having competitive advantage over
“doodhiyas” who are its main competitor. The dairy is able to supply milk to
consumers through out the year where as it is not so with doodhiyas.
Product Line: The dairy is having wide line of products to cater people from different
strata. It is also manufacturing milk products besides milk of different types.
Product Range: A wide array of products ranging from common milk products to
products like flavored milk, gulab jamun mix, ghee, etc.
Production Emphasis: Various cost cutting measures with newer advanced
technology have been taken in past. The dairy tries to utilize all the by-products which
is formed during the production process.
Marketing Emphasis: The dairy has the emphasis on providing better quality
products to consumers at less marketing cost. The quality of the products is
maintained despite of high quality of the products. The Panchmahal dairy has not

xxiii
increased the price of the milk for four years and strived to maintain the same price in
spite of increase in costs of various inputs.
Sustenance of the strategy: Developing a sustainable competitive advantage by
simultaneously cutting costs and improving product attributes.

Another important part of the strategy reflects from its short-term planning, which
contains the goals that the Panchmahal dairy aims to complete in next two to three
years. Following are the various targets that it envisages to achieve in coming years.
These targets are revised on an annual basis and if need arises, changes are
incorporated in the plan.
• The Amul Kool flavoured milk processing plant's capacity will be doubled to
meet the demand of flavoured milk.
• The Amul brand milk has become popular and to meet the demand of this
brand at Indore, Bhopal and Dhar, the milk union, with the financial assistance
from GCMMF, packaging plant has been set-up at Devas in M.P.
• Branded cattle feed varieties mainly the Panchamrut, Panchamrut Special and
Panchmrut Super Special will be made in 25, 50 and 65 kilogram packs.
• The Bye-pass Protein Feed Production will also commence in near future.
• The area- specific Panchamrut Mineral Mixture containing required nutrients
will be manufactured and provided in easy to handle packs of 1 and 5
kilogram.
• Use of Bio-fertilizer will be encouraged and therefore Vermi Composting
Demonstration Farms will be established.
• Bulk Milk Chilling Units will be established in the remote areas of Dahod, at
Kharedi and Dhanpur.
• The District Co-operative Society (DCS) procuring 500 LPD or more milk
will be provided with Bulk Chilling Unit, on demand.
• Installation of a new Spray Drying Plant to manufacture ''Amulya'' powder
milk which is undergoing at present.
• Installation of used self-clarifier and cream separator of ''waste falia'' to
manufacture excellent milk products.
• Augmenting the capacity of the ETP plant from 4.5 lakh litres per day to 12
lakh litres per day.

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• Undertaking research under the technical guidance of the GCMMF to
manufacture '' Amul Basundi''.
• Initiating the ''Heifer Project'' for the ideal rearing of the female calf.

6.3 System
6.3.1 Management of Information System

An information system may be a system that creates information and manages the
same for the stakeholders of the system to provide an ambience to take some informed
decisions. The Panchmahal dairy has developed MIS system, data from the different
departments like Marketing, Production, and Purchase etc is analyzed to generate
reports which is of immense benefit to the management while taking critical decisions
on the operational and tactical issues of the Union. The core processes are normally
attached to the objective of the organization and do not change very often.
The support processes are those that provide support to core processes to happen.
These processes provide either indirect or direct support to the core processes and
directly influence the actors and its properties.
Management processes formulate strategies and even identify the process rules,
logics, processes itself.
MIS has become a one of the important systems in the Panchmahal dairy after the
initiative of the GCMMF. The MIS department has only two employees one of whom
is at the rank of deputy manager and the other is of clerical rank.
6.3.2 Management by Objective at the Panchmahal dairy

In order to achieve performance targets based upon participation of each department,


the Panchmahal dairy is following the policy of management by objectives (MBO).
Under this system targets are set for each department by the consensus of all the
employees. These objectives are then reviewed on a monthly basis and based upon
that are revised again. For example, a typical MBO for accounts department would be
about reduction of expenses in the department and then there would be a comparison
with previous month whether there was an increase or decrease. This helps all the
departments in reviewing their performances and since objectives are set by
consensus there is unanimity in achieving them.

6.4 Style

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Some of the key characteristics along which the style of the Panchmahal dairy was
captured as follows:

6.4.1 Individual Initiative

Individual initiative in employees varies from department to department as different


departments have different scope of responsibilities assigned to them. Also since the
most of the systems and procedures are already established scope for individual
initiative is also limited.
6.4.2 Risk Tolerance

Risk tolerance is low in the Panchmahal dairy, as most of the decisions require the
approval of the Board of Directors. All the decisions, which involve capital
expenditure of more than Rs. 50,000, cannot be approved even by the GM and require
the permission of board of directors.

6.4.3 Direction

In this dairy, the management uses various tools to facilitate direction and uses
Management by Objectives (MBO) on a monthly basis for setting targets to be
achieved by various departments. Besides this, top hierarchy provides regulation to its
sub-ordinates whenever required.

6.4.4 Integration

There is reasonable degree of integration amongst various departments in the


Panchmahal dairy. Various projects run in the dairy with the coordination of one and
other departments where Personnel & Administration plays major role in integrating
them with the help of Management Information System (MIS).

6.4.5 Management support

Management support is one of the strengths at the Panchmahal dairy as managers are
in constant touch with their subordinates providing timely directions and support to
their subordinates.

6.4.6 Control

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Since, it is a cooperative organisation there are many rules and regulations, stipulated
by the act and byelaws, which it needs to comply with. Approval from registrar is
required for all the important matters concerned with employees.
6.4.7 Identity

There exist multiple subcultures within the organisation largely on the basis of
departments. An integrated organizational identity is not very strong and employees
generally view themselves as the employees of a particular department rather than of
the organisation as a whole.
6.4.8 Conflict tolerance

In order to handle conflicts and grievances of employees in a constructive manner,


monthly and bimonthly meetings of employees and management representatives take
place where they are encouraged to express their views and differences. Management
also tries to find solutions to such conflicts and grievances before they get aggravated.
6.4.9 Communication pattern

There is an existence of scalar chain in the Panchmahal dairy, most of the


communication pattern follows the hierarchical chain of authority. The
communication flow is mostly downward from the top management to the middle
management and so on.

6.5 Skills

6.5.1 Productivity flexibility


Based upon the demand conveyed by the marketing department after integrating the
requisition put forward by the agents and GCMMF, the production department
produces the daily demand. This daily demand is highly fluctuating and keeping in
mind the fact that the installed capacity of the plant is only about 2 lakh LPD; the
production department displays a commendable flexibility in handling such a
fluctuating demand. It converts the surplus milk in the skimmed milk powder and
other milk products as and when necessary after meeting the regular demand of liquid
milk.

6.5.2 Quality assurance

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Quality assurance is one of the strengths of the Panchmahal dairy. It follows quality
standards of the highest order in the production and delivery of various products. It
has earned ISO 9000, QAS and HACCP certification in recognition of its commitment
towards quality.

6.6 Staff
6.6.1 Recruitment process

The recruitment for the technical and non-technical staffs is done by the Personnel &
Administration (P&A) department. The recruitment committee consists the following
members:
- Board of Directors
- Managing Director
- Departmental Head
- Outside Expert from NDDB & GCMMF Ltd.
- D. G. M. (P&A)

Source of Recruitment:

- Internal advertisement within the dairy.


- Internal candidates by way of promotion of higher posts and
- Employment Exchange,
- Advertisement in reputed newspapers.
- Campus interview for technical post.

The qualifications and eligibility for recruitment to the various posts excluding
technical posts are the same as they were at the time of the establishment of the
Union. Some officials expressed the need for their revision particularly in the light of
the growing professionalism in the industry. The cumbersome procedure that requires
the approval of the Registrar of Cooperative Societies and has to be routed through
the Board of Directors is the biggest impediment in the revision of outdated eligibility
criteria as perceived by some officials. Surprisingly some of the forms which were
there in circulation thirty years ago are still in use in the dairy as we have found in the
engineering department where still they opt for I.T.I. qualified persons when
engineers are willing to work in the department.

xxviii
Procedure of Recruitment

The recruitment in the Panchmahal dairy is based on the principle of internal


selections i.e. only employees from within the Union are invited for the required posts
in the first case. If an internal selection is not possible then the recruitment is done
through selection of employees from its sister concerns i.e. the other milk Unions
under GCMMF.

Only if the above two methods fail to yield any result, an open interview is conducted
after placing an advertisement in regional newspapers and magazines. After receiving
applications, the personnel department scrutinizes them and prepares a list of
candidates for written test / interview for all the posts. Now a day, the selection of
technical persons is being done through the campus interview in the reputed colleges
as we have found in the case of technical officers in production department who are
being recruited from “Dairy Technology College” and also in case of veterinary
officers who are recruited through campus interview from “Veterinary College” of
“Anand Agriculture University”.

6.6.2 Induction

Induction is required for the purpose of introducing person to people with whom he is
going to work. To make person aware of the general policies, of the company certify
all doubts and provide him job instruction.

In Panchmahal Dairy, the induction process is working for officers & managerial level
only. The induction period is of two days.

Schedule of Induction:

Sr. No. Day Department Time Sign


Head of
Head

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1 First P&A 9 to 1
2 First Recess 1 to 2
3 First Co-op. Dep. 2 to 5
4 Second Prod. / Eng. 9 to 10
5 Second Laboratory 10 to 11
6 Second Marketing 11 to 12
7 Second Account 12 to 1
8 Second Recess 1 to 2
9 Second Purchase 2 to 3
10 Second Store / Soc./ Chem. 3 to 5

Table 3: Induction Schedule

6.6.3 Training activities

Both in-house and outhouse trainings are conducted for imparting trainings of various
kind to employees.
The Personnel and Administration (P&A) department makes a yearly schedule for
conducting various training programmes at the beginning of every year and thus the
trainings are carried out according to this preplanned yearly schedule.

6.6.4 Performance appraisal system

Performance appraisal means to motivate employees for better performance by


providing good incentives, promotions services & more payment. By the records of
whole year the organization will appreciate their employees.

The personnel department conducts performance appraisal of all, the employees every
year through the immediate supervisor. The personnel department sends performance
appraisal forms to the departmental heads and requests them to return with full details
within 30 days. After receiving the forms, the HOD (P & A) prepares a brief report of
all the employees and places it before the Managing Director for review and
comments.
In the PDCMPUL, performance appraisal system is applied through the basis of
following criteria:

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1. Job Performance 2. Knowledge of Job
3. Accuracy of work 4. Use of working time
5. Conduct on the job 6. Ability to learn
7. Capacity and willingness to develop 8. Report with supervisor
9. Initiative 10. Innovativeness
11. Trustworthiness (Integrity) 12. Leadership Quality
If there is any lacuna find in technical knowledge, the concerned employee is sent for
appropriate training programme.

6.6.5 Promotion and transfer

The dairy has introduced two types of promotion policy (1) merit cum seniority
promotion (ii) time scale promotion.
As the time of promotion, the employees' confidential report, performance appraisal
report, qualification, experience, departmental head's report, and work motivation
factors are analyzed. The employees have to appear for an interview before the
selection committee. So far as time bound promotion is concerned, if a particular
employee completed his / her stipulated service tenure with above terms and
conditions he is eligible to get time bound promotion. In case the existing posts are
not available for time bound promotion, the dairy gives them time scale in the present
post with some additional responsibility.

The Dairy motivates its employees from time to time through several steps.
i) To give certain authority as per rules.
ii) Praise the employees on their work performance.
iii) Monetary rewards for good contribution and suggestions.
iv) Providing fringe benefits.
v) Providing health insurance schemes and other developmental activities.
6.6.6 Worker and management relations

Worker management relations are healthy and harmonious at the Panchmahal dairy.
There is no union of workers here. The joint meeting of the various departments helds
generally monthly or bimonthly to sort out any differences or to settle any policy
matter relating to one-another. The employees have responded enthusiastically and the
work culture is excellent which can be exhibited through our following observations.

xxxi
- Employees have developed good confidence in the work and management.
- They willingly carry out higher responsibilities.
- They have reached target within the time.
- Employees motivate each others.
- Team building and organizational spirit are excellent.
- Productivity and quality of work have increased.
- There is a good industrial relations system.
6.6.7 Employee turn-over rate

Employee turn over rate had been almost nil in the general cadre and the number of
employees have remained nearly constant since few years. The reason for this low
turnover rate can be assigned to it being a semi government organisation. The
employees prefer the sense of job security here to the opportunities of growth on the
basis of performance in private organisation. But, the turn over rate of the technical
employees' especially dairy technologists is quite high due to the low salary package
as well as slow and steady growth.

6.7 Shared value


6.7.1 Core values

Core value of the Panchmahal dairy is welfare of the farmers. Farmers have to be
provided secured and viable market for their milk. Farmers are given the top priority
in all decision-makings. Besides this, the organization has to ensure supply of milk
and milk products to the consumers in Panchmahal, Dahod and its nearby areas
regularly and at competitive price.
In one study conducted it was found that 83% of money earned by the dairy goes back
to farmers.
6.7.2 Vision

Vision of the organization is to improve the socio-economic status of the rural mass
engaged in the profession of the dairy farming and cattle management through
cooperative.
The Panchmahal dairy makes persistent effort to attain the goals through participation
in management by farmers particularly by small farmers and landless agricultural
laborers with the technical help from the NDDB. The organization wants to achieve

xxxii
goals by including all the aspects of dairying, animal production, health coverage,
feed and fodder development and marketing of the milk products.

6.7.3 Mission

The union as such does not have any explicit mission but the same is reflected in its
quality policy, which states, “We are committed to excellence, both in providing the
best quality inputs and service to our esteemed milk producers and excellent quality
of milk and milk products patron consumers.
“We shall continue to adopt this state of the art technology, HACCP
principles and innovations for manufacturing products and providing congenial and
healthy environment to encourage excellence in every area.”
It shows the Panchmahal dairy's total commitment to maintain consistency in quality
of products and services, application of innovative techniques and the state of the art
in technology, developing motivated and dedicated workforce, application of quality
and food safety management systems and ensuring continual improvement.

7. DEPARMENTS
7.1 Personnel and administrative department

The various functions performed by this department are:


 To implement training program for various employees of different
departments.
 To provide required manpower with skills
 Implementation of reward system
 To create ideal work environment
 Arrange for the payment of salaries
 Implementation of appraisal system and human resource management
practices system
 Recruitment and training of the new employees.

7.2 Procurement Department

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The procurement department is one of the most important departments in any dairy
since it is responsible for bringing the basic raw material i.e. milk from the producers
to the milk union. The procurement department decides the area of the operation,
villages from which it would procure milk in consultation with other departments and
also decides the routes on which vehicle would ply to fetch the milk from the
producers. It gives a contract to a transporter to run its vehicle on one route or a no. of
routes. It decides the timing at which each vehicle would collect the milk from the
dairy cooperative societies and would reach to the dairy union. The milk is collected
at the dairy cooperative societies in cans. The milk vehicle reaches at the village at a
fixed time and collects it. The cans bear the name of the dairy cooperative society.
The vehicle collects all the cans from the route assigned to it and then it brings them
to the dairy where they are emptied at the dairy dock.
The procurement department also provides technical equipments to the society and
provides services for their maintenance. A procurement supervisor constantly checks
the accounts as well as functioning of the society. If sometimes any problem crops up
in the society the procurement department tackles it.
The chief functions performed by procurement department are:

• To ensure timely and regular supply of milk from the producers to the dairy
union
• To ensure that the dairy cooperative societies are functioning well and
maintaining norms specified by the dairy union.
• To provide technological help to the dairy societies
• To make efforts to maximize the milk procurement especially in the lean
season.
• To ensure that the milk reaches safely to the union without deterioration in the
milk quality and accordingly make arrangements for transport etc.
Currently the capacity of the Panchmahal Dairy is to process 2 lakh liters per day
while it is only able to procure somewhere 1.5 lakh liters in lean season and up to 3.25
lakh liters in flush season. During 2004-05, the Milk Union registered an increase of
8% in milk collection with an average collection of 2.58 lakh liters of milk everyday
and on an average paid Rs.191 per kilo fat for the milk purchased from the milk co-
operative societies. Since, the work of the expanding the capacity of the milk
processing plant from the existing 2 lakh liters per day to 4 lakh liters per day is on

xxxiv
the verge of completion, the procurement department plans to implement the
following strategies with the help of Project & Input department to increase the
procurement in the current future.
• To give a better price to the producers.
 To motivate farmers to bring milk to the societies.
 To enhance and speed up veterinary services in the villages.
 To review its artificial insemination program for which they have also hired a
consultant from NDDB.
 To form an alliance with leading banks such as Bank of Baroda to provide
loan to the farmer for milch animal.
 Better provision of other input services such as cattle feed, fodder seeds etc. to
the farmers at subsidized rates.
Figure 6: Procurement-cum-distribution channel.

DCS Through Contract Vans


Through Contract Vans

Panchmaha
l Through Insulated Milk Vans

Agent

Consumer
s

The milk which is collected in the dairy cooperative societies are brought to the dairy
through vans or mini trucks. The job of transportation of milk and milk products have
been outsourced to local transporters. In this way the dairy is able to reduce the cost.
The milk in the dairy is then pasteurized and standardized according to the demand in
the market. Then it is packaged in different types of packs and then it is stored in the
chilling room till the time it is transported for the consumption to the towns. There

xxxv
agents receive the milk according to their indents and then they sell these milk to
consumers.

7.3 Purchase Department

An indent is raised by the concerned department, which is sent to stores. From stores
department it is sent to purchase department which sends it to general manager
(G.M)/managing director (M.D) for approval. If approved then an enquiry is raised by
the purchase department to the suppliers to submit quotations on or before due date.
After receiving the quotation, a quotation opening committee that consists of clerks
each from purchase and account department opens the quotation and sends it to the
purchase department.
The quotation has details of material specification, price, suppliers name and other
details. A comparative statement is prepared by the purchase department which is
analyzed by purchase manger and suitable recommendation is given by him. It is
further sent to the concerned department which checks if there is any deviation from
originally raised indent and gives his opinion on the comparative statement. It is then
sent to purchase committee, which consists of managers from production, accounts,
procurement, purchase and general manager. For any decision at least 3 managers
should be present out of which presence of purchase and accounts head is must.

The meeting of purchase committee is held every Tuesday where decisions as to how
much material is to be purchased and from whom is taken, thereafter it is sent to M.D
for approval. If approved it is sent for audit. Auditor audits it and sends it to purchase
head, which places purchase order to the supplier to supply goods within a fixed
period. Material is received at stores department, which sends information to the
concerned department as well as quality control department in case of chemicals and
films. After inspection a Goods Received Note (GRN) is prepared which consists of
all the details about the material. This GRN is sent to the concerned department head
for clearance, which comes to the purchase department head along with GRN and bill.
Purchase head sends invoice and GRN to the accounts department.

xxxvi
7.4 Production Department

There are 150 persons working in this department headed by Deputy General
Manager.The Production Department comprises of the main area of the dairy. It could
be divided into following sub-sections:
1. Reception Dock
2. Processing section
The processing plant can be further subdivided into following categories:
• Fluid Milk Processing
• Butter Section
• Ghee Section
• Chhach Section
• Powder Plant Section
• Flavoured Milk Section
• Gulab Jamun Mix Section
The detail of the each section has been given in the Appendix.

7.5 Engineering Department


The Engineering Department is concerned with the maintenance of the equipments
and taking care of any breakdown. The engineering department is also responsible for
disposal of wastes and waste treatment facility. The various sections which are taken
care by the Engineering Department are:
1. Refrigeration Section
2. Boiler Section
3. Air Compression Section
4. Electrical Section
5. Effluent Treatment Plant
6. Staff Quarter Maintenance (Electric and Water Supply)

For water supply it has its own boring and it also takes water from the Godhra
Municipal Corporation. For electrical supply it has to depend on the Gujarat State
Electricity Board (GSEB).

xxxvii
7.5 Store Department

At present, the Deputy General Manager of the Engineering department also heads
store. The basic function of stores is to store and issue material as per the request
made by any department and to manage the inventory.
For issuing any material store requisition form is sent by the department and on that
basis material is issued if it is available in the stores. The stores department is also
responsible to send a daily report of inventory at the end of the day to the
management. It also prepares monthly, quarterly and annual reports. For the purpose
of easy, different cost centers are formed and each material is assigned to a cost center
so as to trace it properly. For the purpose of inventory the stores are using valuation
FIFO method.

7.6 Marketing Department


The various functions performed by marketing department are:
• To arrange for the supply of the milk and milk products manufactured by the
Panchmahal dairy in the market.
• To supply demand of milk and milk products to the production department.
• To make sure that retailers get timely and regular supply of milk and other
products.
• To handle customer complaints about any defects in the products.
• To carry out various sales and promotion activities.
• To implement incentive systems for retailers.

Table 4- Type of milk sold by the dairy and its composition

Name of variant Fat content SNF content

Amul Gold (FCM) Min 6% Min 9.1%

Amul Shakti (Standardized) Min 4.5% Min 8.5%

Panchamrut (Toned) Min 3% Min 9%

xxxviii
Double toned milk "Health" (DTM) Min 1.5% Min 9%

Figure 7: Sale of Liquid Milk Per Day (in liters)

36000
66000 Ahmedabad +
Indore(Federation)
Mother Dairy, Gandhinagar

Local Sales
96000

In the year 2004-05, the Panchmahal dairy has sold 198000 liters of liquid milk
besides 92 lakh bottles of sterilized flavoured Amul Kool (Kesar, Elaichi, Rose and
Coffee). The rest of the milk is converted into milk products and skimmed milk
powder (SMP).

xxxix
Figure 8: Manufacture of Milk Products (in MT)

76 628 Table Butter


Milk Powder
Ghee
Gulabjamun Mix

2671
2161

During the year 2004-05 under review, on an average 66000 litres of liquid milk per
day was supplied to the local customers. And 36000 liters Amul brand milk was daily
supplied to Ahmedabad and Indore. Besides 92 lakh bottles of sterilized flavoured
Amul Kool were manufactured in the year. In addition, the Milk Union daily sold
96000 liters of milk per day to the neighbouring Milk Unions and Mother Dairy,
Gandhinagar. The Union also met the demand of local consumers supplying 9 lakh
liters of butter milk under the brand name of Panchamrut Goras.
A pride in place for the Union is the sale and export of Panchamrut Ghee. The Ghee
worth Rs. 2 Crores was exported to the Gulf countries that mainly include Abu Dhabi,
Dubai, Bahrain and Oman. During the year under annual report, 2671MT Ghee was
produced and 2478 MT Ghee supplied to consumers. The Union also Produced 2161
MT Milk Powder, 628 MT Table Butter, 76 MT of Gulab Jamun Mix of which 1316
MT, 528 MT and 78 MT were sold respectively.

The Panchmahal dairy is currently marketing its milk and milk products under the
brand name Amul and Panchmarut. The marketing is done through the help of
GCMMF and through its own department.

xl
7.6.1 Functioning of Marketing Department

The marketing department chiefly operates through retailers/ agents who give the
entire demand to the marketing department. While doing the assessment of the total
demand, the demand of each individual retailer as well as private shops is taken into
consideration. The agents get milk according to the indents raised by them. The
transport vehicle which is hired by the dairy is used for transport of milk from the
dairy to the agents of different towns. The agents wait for the vehicle at the pre-
decided place for getting their indents. The agents get milk in crates of the dairy. The
agents have to return the crates during the return journey of the vehicle. At present,
the retailers get the commission of 40 paisa per liters for all type of milks. At present
for a person to be a retailer/ agent he has to first apply to the union with giving the
security money of Rs. 15000.

Customers

Customers can be divided intoInstitutiona


two categories – institutional
General and general retail
customers. Institutional customers include hospitals, hotels, canteens, hostels and
manufacturing units in and around city. The retail customers are served through
established agent network in city.

7.6.2 Customer Handling Procedure

There is no formal arrangement for taking customer feedback directly from the
customers however the union handles customer’s complaints through retailers. For
this purpose each lot is given a machine number and the date of packaging and one
sample from each lot is maintained by the quality control department. On customer
complaints two persons one from marketing and the other from quality department
examines who is at fault. It could be because of the mistake in the distribution channel
or even the customer may be at fault. However we observed that most of the retailers
were not happy about the way union handles their complaints about leakage. They
also showed their dissatisfaction on the commission that they get on selling milk as
the commission for the agents had not been revised since 2000.

xli
7.6.3 Future strategies of Marketing Department
• Increase the coverage and awareness of consumers through education and

publicity by print and electronic media (hoarding, ad poles and electronic


boards).
• Increase coverage through home delivery system.
• Add new markets like Indore, Dewas, Jabalpur, etc.
• Add new rural markets in Panchmahal and Dahod districts.
• Increase outlets in all the existing towns.

7.7 Quality control department

In the Panchmahal Milk Union, the Quality Control Department is concerned with the
assurance of the quality of the products made at the plant and checking the quality of
the raw materials received by them. It has got a laboratory, both at the dock level and
the main laboratory at the plant level. The various tests conducted at this laboratory
are:
 Organoleptic Tests.
 Chemical Tests.
 Bacteriological Tests.

Following are the main functions performed by the various sections of QA


department:
• Grading of incoming raw milk.
• Raw milk testing.
• Testing of outgoing pasteurized milk.
• Testing of processed milk stored in storage tank or silo.
• Cream testing.
• Butter Milk Testing.
• Standardization of Fluid Milk.
• Checking of the strengths of chemicals.
• Checking the weight, film thickness, prints and length of the pouches for city
supply milk.

xlii
• Checking the parameters of effluents generated.

7.8 Project and input department


This is one of the most active departments of the Panchmahal dairy. It has obtained a
reputed place through implementation of the various welfare schemes with the help of
Government of Gujarat, GWSSB, GEDA and UNICEF. The various programmes are
being executed by the Senior Manager with the help of 68 other staffs. Some schemes
are as following:
• Animal Breeding and Health Care
• Animal Nutrition Scheme
• Human Resource Development Programmes
• Milch Animal Distribution Scheme
• Mini Village Water Supply Scheme
• Rural Sanitation Mart Scheme
• Community TV Scheme
• Cattle Insurance Scheme
• Janashree Bima Yojana
• Universal Health Insurance Scheme
• Promoting Solar Energy Technologies.

7.8.1 Artificial Insemination and Veterinary services

Under the Animal Breeding Program, total 749 milk co-operatives were covered and
122000 animals have been artificially inseminated. 68% of these animals gave birth to
about 28000 female calves as reported.

The main objectives of this service are:


 To provide quality A. I. Service for producing genetically superior animals to
meet future production needs.
 To Promote a Sustainable Professionally managed / A. I. and animal health /
production service Network.
• Decision on charges for different kinds of treatments / interventions.

xliii
• Regular visit of Union Veterinarians / Pvt. Veterinarians to the DCSs.
• Approach for Vaccinations & other Technical Advise.
• Creation of Veterinary Service Zone (VSZ) with Union veterinarians & search
for Pvt. Veterinarians.
• Awareness of farmers with the concept of VSZs.

7.8.2 Supply of Fodder Seeds

• Procurement & supply of good quality fodder seeds.


• Competitive cost & timely supply.
• Induction of new varieties of fodder seeds.
• Urea treatment of straw & feeding of crop residues.
• Advise to Milk Producers regarding feeding of Calf, Heifer, pregnant animals,
Cows / Buffaloes in milk & Dry.

At present the union has one cattle feed plant which is located at Khandia with a
capacity of 100 MTD. The cattle feed plant in peak demand season worked at 200%
of installed capacity. The union is manufacturing three types of cattle feed
1. Balanced cattle feed
2. High energy feed
3. Pregnancy ration.

7.8.3 Women Cooperative Dairy Societies


There are 42 women cooperative dairy societies which give milk to the union. The
formation of these women dairy cooperative was done by the union. A Woman can
carry the messages of better husbandry, better veterinary care, better feeding & better
breeding of animals to other Women. Special attention is given to educate women
about various tasks involved in the milk production such as

• Care, management & feeding of animals.


• Feeding during growth, pregnancy, lactation, dry period & under different
conditions like flood & drought.
• Disease & Pest problems.

xliv
• First signs of heat in cattle & buffalo.
• Detection of heat.
• Right time of insemination.
• Conception after calving.

7.8.4 Women Extension Workers


For development of Women Dairy Cooperatives role of trained, efficient &
intelligent women extension workers is vital. For that union started cooperative
development program, which was designed to strengthen the role of Women members
in the Control & Governance of the Dairy Cooperatives. Under this following steps
were undertaken:

 Men were educated about the role of Women in Dairying.


 Women were motivated to join Dairy Cooperatives.
 Assert their rights as members.
 Attend meetings with extension workers.
 Take payment from the DCS.
 Encouraged to stand for membership of Managing Committee.

7.8.5 Women Dairy Cooperative Leadership Programme

The various objectives of this program undertaken by the Panchmahal milk union are
as follows:
 Raise percentage of active Women members in Dairy Cooperatives.
 Presence of elected leaders at every level.
 Numbers & status of Women employees.
 Thrift & credit cooperatives of Women. (Leader & Leadership skills)
 Working together not only increases the family income but also brings about
significant change in the health of Women & girls, Literacy standards of adult
Women, Education of girls, and Women’s status in the family / society.

xlv
7.9Accounts Department
The chief functions performed by the accounts department are
• To make arrangements for the payment of salaries of the employees.
• To make arrangement for the timely payment to the suppliers.
• To maintain the accounts book and all records.
• To prepare annual balance sheet and profit and loss statements.

The accounts department deals with all the financial matters of the dairy union. It
keeps track of day-to-day financial transactions of the dairy and prepares reports
accordingly. It prepares daily, monthly and quarterly reports, which are used by the
senior management. It gets all the data pertaining to sales, and expenses from various
departments and accordingly prepares report.

8.0 FINANCIAL ANALYSIS


Net profit margin ratio is quite low all the years because high fat price is paid to the
producers for their milk. And all the benefit is transferred to them. In a study
conducted by the managing director of the dairy it was found that 83% of the money
earned is again goes back to farmers. The current ratio of the dairy is less than 1 at
present which is not a healthy sign. The dairy should return some of the loans which it
had incurred and get some long term debt if it has liquidity crunch. Acid test ratio for
the bank is also very less. The debt-equity ratio has increased in the current financial
year because of the huge loan taken from N.D.D.B for the future perspective plan.
The top management should plan strategically for getting higher return on investment
because the return is low as well as it has decreased in the current year.

Table 5: Financial Ratios


Ratios* 2002-03 2003-04 2004-05

Current ratio 1.106 0.95378 0.9571

Acid test ratio 0.740 0.689 0.614

Debt-equity ratio 0.4596 0.4771 1.3

Inventory (stock) turnover ratio - 9.29 8

xlvi
Return on Investment (ROI) 0.0063 0.0066 0.00502

Gross profit margin 0.00484 0.00655 0.00644

Note: The Balance-sheet and Profit and Loss Account have been given in
the Appendix 2. Assets Schedules and Accounting Procedure are
also attached with it.

Current Assets
Current Ratio = --------------------------------
Current Liabilities

Quick Assets (Current Assets – Inventories)


Acid-test Ratio = ------------------------------------------------------------
Current Liabilities

Debt
Debt-equity Ratio = ------------------
Equity

Cost of Good Sold


Inventory Turn-over Ratio = ---------------------------
Average Inventory

Net Profit after Tax


Return on Investment (ROI) = ----------------------------
Total Assets

Gross Profit
Gross Profit Margin = ------------------------
Net Sales

xlvii
9. PERFORMANCE INDICATORS
9.1 Share Capital
SHARE CAPITAL(RUPEES IN) LAKHS

400

350

300

250

200 372 (RUPEES IN) LAKHS


335 353
308
150 277

100

50

0
2000-01 2001-02 2002-03 2003-04 2004-05

Table 6
The share capital has been constantly increasing over the years in the dairy. Actually
the dairy deposits a part of profit each year in the share capital. There had been
increase of over 5% every year in the share capital.
9.2 Societies Organized
No. OF SOCIETIES ORGANISED

1600

1550

1500

1450 1600
SOCIETIES
1566
1508
1400
1458
1421
1350

1300
2000-01 2001-02 2002-03 2003-04 2004-05

xlviii
Table 7

At present there are around 1600 societies associated with the dairy out of which
around 1375 societies are registered societies. Out of total registered societies 42
societies are women societies which have been working very well since inception.
Out of 1375 societies, 1350 societies are regular societies and doing daily transactions
with the dairy.
9.3 Sales Patterns
The dairy sales is showing increasing trend over the years. There was an increase of
over 5% in 2004-05 over the previous year. Besides liquid milk the dairy also
manufacture various products which is sold through GCMMF in all the parts of
country.
TOTAL SALES (In Lakh Rs.)

18000

15687
16000
14893

14000
12675
12000 11348 11162

10000
Series1

8000

6000

4000

2000

0
2000-01 2001-02 2002-03 2003-04 2004-05

Table 8
9.4 Societies Covered under A.I
SOCIET IES COVERED UNDER A.I.

800

700

600

500

400 749 SOCIETIES


720
672
616 620
300

200

100

0
2000-01 2001-02 2002-03 2003-04 2004-05

xlix
Table 9
749 societies were covered under A.I. in the year 2004-05. The artificial insemination
is done to improvise the local hardy breeds and this also helps in the increasing the
milk yield of the animals. The dairy provides facilities such as veterinary aids, de-
worming, cheaper and timely veterinary treatment at the door steps of the farmers.

9.5 Artificial Insemination Performed


There was an increase of over 15% in A.I. performed by the Para- vets and vets of the
dairy. The local unemployed youths were trained by the dairy to perform A.I. in the
animals. These people get money from the dairy on every successful A.I. done. The
step of employing youths for this purpose has yielded good result in improving local
breeds.

A.I. PERFORMED(In '000)

140

120

100

80
A.I. PERFORMED
122
60
105 106
84
40 75

20

0
2000-01 2001-02 2002-03 2003-04 2004-05

Table 10

l
9.6 Fodder Seed Sales

There had been increasing trend in the fodder seed sold by the dairy. These fodder
seeds are cultivated in the fields by the farmers. The availability of this fodder has
increased the milk yield from the animals and it has been increasing the income of the
farmers. Main fodder seed sold by the dairy is Hybrid Napier Bajra, Deennath grass
e.t.c FODDER SEED SALES( MT)

160

140

120

100

80 FODDER SEED SALES( MT)


142
60

40 77 68 71
60
20

0
2000-01 2001-02 2002-03 2003-04 2004-05

Table 11

li
PROGRESS REPORT
(Technical Input Activities)

Sr. 2000- 2001- 2002- 2003-


No. Particulars 01 02 03 04

1 No. of societies covered under AI 616 620 672 720


2 Number of AI performed 74781 84095 105395 106356
3 Number of mobile emergency Vety. Units 32 38 38 38
4 Societies covered under VFA programme 722 710 630 720
5 Total number of animals treated through Emergency Calls 85515 92705 102415 106448
Total number of animals treated through Vet. First Aid
6 Center 34483 28857 33050 52069
7 Animals Vaccination against F.M.D 40001 99156 106000 110000
No. of animals covered under Group Cattle Insurance
8 Scheme 11775 13633 15314 12820
No. of animals covered under Group Members Insurance
9 Scheme 17913 18275 21133 31000
10 Quantity of cattle feed sold (MT) 6936 5634 7364 8805
11 Quantity of fodder feed sold (MT) 77 60 68 71
Member trained under Village Self Development
12 Programme
Members 15356 15868 12219 12180
Chairmen - MCM 1048 804 1143 1318
Secretaries 328 67 55 58

PROGRESS AT A GLANCE

Sr.
No. Particulars 2000-01 2001-02 2002-03 2003-04 2004-05
Primary Co-operative Societies Organised 1421 1458 1508 1566 1600

lii
1
2 No. of Registered Societies 1320 1336 1339 1347 1411
3 No. of Member Societies 984 977 1063 1066 1241
4 No. of Farmer Members (' 000) 178 180 189 194 208
5 Paid up Share Capital (Rs.' 000) 27746 30767 33468 35319 37186
6 Funds (Rs.' 000) 201509 215680 245691 286084 329863
7 Daily Avg. Milk Procurement (' 000kgs) 211 207 236 239 258
8 Total Milk Purchase (' 000kgs) 77187 75476 86150 87235 94188
106778
9 Milk Purchage value (' 000) 893379 857803 970452 8 1228584
10 Daily Avg. Milk Sale (' 000Ltrs.)
Local Sale 68 63 60 63 66
Sale through GCMMF 11 15 18 38 36
11 Total Production of Ghee (MT) 2298 2440 2708 2671 2671
12 Total Ghee Sale (MT) 2179 2772 2766 2813 2477
13 Total Production of Milk Powder (MT) 1952 1527 2024 1785 2161
14 Total Milk Powder Sold (MT) 1979 1015 1715 1907 1316
15 Total Production of Table Butter (MT) 336 407 382 322 628
16 Total Table Butter Sale (MT) 319 355 354 327 573
126754 148926
17 Total Sales (' 000 Rs.) 1134810 1116195 3 0 1568745
18 Profit (' 000 Rs.) 3935 4652 5136 5757 5998
19 Dividend 12% 12% 12% 12% 12%
20 Working Capital (' 000 Rs.) 88822 57380 33034 38090 122393
21 Audit Class A A A A A

liii
10.0 SWOT ANALYSIS OF THE ORGANISATION

RESOURCE STRENGTHS AND RESOURCE WEAKNESSES AND


COMPETITIVE CAPABILITIES COMPETITIVE DEFICIENCIES
Large procurement areas (Panchmahal & Excessive control by the Federation
Dahod districts) and the State Government
Untapped liquid milk market in vicinity Limited Capacity of the Plant
(Indore, Dewas, Dahod, etc.) Lack of trained professionals
Strong brand image (Amul) support Procurement Constraints
Starting exporting milk products Limited financial muscle
High Production Flexibility Underdeveloped MIS
High Utilization of Fixed Assets Unclear local market strategy
High range of Products Per society low procurement base
Excellent Quality of Products Poor advertisement for Panchamrut brand
Committed Workforce value
Strong procurement base Low retailers base and no wholeseller
Strong welfare services
POTENTIAL OPPORTUNITIES POTENTIAL EXTERNAL THREATS
Breed improvement potential Intensification of competition in its
Growth of the Milkshed in terms of markets especially local markets
productivity and producer base Erosion of procurement base due to entry
Extension of product range by other players in its Milkshed
Moving up the value chain to exploit Cheaper imports due to lifting of QRs
brand image
Strengthening export market
Increasing processing capacity
Extend social welfare programmes

liv
11.0 LEARNING

The OU component helped us in understanding every aspects of the organization such


as its purpose, strategies, structures, culture, resources, customers, strength, weakness,
opportunities, threats and other factors that have direct influence on the working of
the organization. It also provided us an opportunity to study how the external and
internal environment affects the functioning of the organization.
We have studied many courses related with management, finance, operations,
understanding organizations and other different functional subjects during all the three
terms but understanding organization component provided us an opportunity to learn
the application of all these courses. We got the first hand experience to see how the
different sections interact with each other and the importance of coordination among
various sections for smooth functioning of an organization. One of the important
learning from this component was to know how the culture of an organization helps
the organization in achieving its goals and objectives. By studying the structure of the
organization, we learnt how tasks are allocated, who reports to whom and the formal
and informal coordinating mechanism and interaction pattern that is followed. In short
we would like to conclude by saying that every day during this component provided
us an opportunities to learn new and different things from which some can be written
but most of them can be felt only by whom who has experienced.

lv
REFERENCE
• Robbins, Stephens P., “Organization Theory: Structure, Design and
Application”, Third Edition, Prentice Hall of India, 2001.

• “Annual Report: The Panchmahal District Co-operative Milk Producers'


Union LTD.,Godhra”, 2003-04 and 2004-05.

• “Reports from MIS department and Projects & Inputs departments ”, The
Panchmahal Districts Co-operative Milk Producers' Union LTD., Godhra.

lvi
APPENDIX 1
ORGANISATION STRUCTURE

BOARD OF DIRECTORS

MANAGING DIRECTOR

General Manager General Manager

Dy. MGR (A/C) Sys. Off. Asstt. Mgr SR. Manager Chilling centers (3)

Acct. Officer Asstt. Officer (MKT) Manager (P&I)

Dy. Manager (Vety)


Asstt. Acct. Officer Asstt.
Vety. Supdt.

Asstt. A/C SR. Clerk SR. Very. Supdt

Vety. Officer

Dy. GM Dy. GM Dy.GM Asstt.GM Manager Purchase Officer


(P&D) (Prod.) (Engg.) (Procurement) (QC)

Officer ASO AGM D.M. officer M.P.O. Asstt. MGR Assistant

Asstt. Off. SS DY. MGR Engineer Asstt. M.P.O JR Asstt.

JR. Asstt Guard Suptd. Operator Supervisor SR. Chemist Clerk

T.O. Chemist

Worker

lvii
APPENDIX 2

THREE YEARS BALANCE SHEET

Liabilities 2002-03 2003-04 2004-05


SHARE CAPITAL 50000000 50000000 50000000
Authorised
500000 Shares of Rs. 100 each
Subscribed and fully paid 33468300 35319500 37186400

RESERVES
Reserve Fund 96218916 111952140 115114083

DEPRICIATION 149472044 174131828 212749188


Loans (Secured)
NDDB Perspective plan loans 67832312 56171280 158498939

Current Liabilities & Provisions 485902377 665056076


Deposits 17850313 19285601 18852805
Due to Societies 110010560 144235318 199233480
O/S Against Expenses/ Purchase 45723220 53103473 68574682
Sundry Creditors 25155412 25342294 52469283
Provision for income tax 6393285 10393285 14500000
Bank of Baroda OD 53289810 17427830 55829597
State bank of India OD 33418955 6202680 15596229
Bank of Baroda CC 4 0000000
PDC Bank Ltd OD 12687034 14911896
Bill discounting – Bank A/c 150000000 195000000 200000000

Profit- Loss Account


Current year profit 5135967 5756670 5998472
Total 806656128 869233795 1194603158

lviii
Assets 2002-03 2003-04 2004-05
FIXED ASSETS 303736067 405785507 558062618
Gross value as per schedule 2 column 5 269396691 342626436 543310219
Work under construction 34339376 63259071 14752399

INVESTMENTS( as per schedule-3) 16260000 20760000 20760000

STOCK 150287157 107577170 203279040


Trading stock 131989648 87437892 169059475
Store material 18297509 20139278 34219565

ADVANCES & DEBTORS 162484986 123974038 175116560

Deposit 2922162 5335595 9386187


Due from societies 13066104 23943838 32269334
Advances 6351866 5322929 19459492
Trade debtors 73564206 19559670 31632688
Sundry Debtors 61657189 61754324 73304584
Income Tax deposits 4923459 8057682 9064275

CASH & BANK BALANCES 173887918 211137080 237384940


Cash-on- Hand 2277846 1981019 4029104
With bank current, fixed deposit& saving
account & post saving account 171610072 209156061 233355836
Total 806656128 869233795 1194603158

lix
PROFIT AND LOSS ACCOUNTS OF THREE YEARS

EXPENDITURE 2002-03 2003-04 2004-05


To opening stock 117549939 131989648 87437892
To Purchases 1047396712 1153914406 1325198558
To excise expenses 2260910 1293725 1316079
To research and extension expenses 5053112 5130633 6792484
To Processing expenses 21014481 22473451 31305843
To packing Expenses 52971571 80326434 85265466
To electricity & fuel Expenses 37617815 43098267 49525056
To salary and wages expenses 46267800 51022486 51808734
To staff PF, Gratuity & other benefits 12155783 14320504 14454077
To repairs & Maintenance Exp. 9982966 11832720 12705026
To marketing Exp. 13061862 12691549 12814818
To postage, telephone etc. 1924604 2205871 2275789
To insurance premium 711756 916439 1354091
To rent, rates and taxes 231344 201494 212389
To audit fees expenses 3007545 3344992 3080814
To miscellaneous expenses 1127225 1507634 1589087
To interest and bank commission 29936278 25048269 21031710
To depreciation 12089402 24818911 40766539
To income tax provision 1000000 4000000 4106715
599847
To net profit 5135967 5756670 2
Total 1420497072 1595894103 1759039639
INCOME 2002-03 2003-04 2004-05
By Sales 1267543076 1489259832 1568744845
By sundry income 20964348 19196379 21235319
By closing stock 131989648 87437892 169059475

Total 1420497072 1595894103 1759039639

J.J. Shah Dr. R.S. Patel Bhupendrasinh P.Solanki


Gen. Manager Managing Director Chairman

As per report attached


P. N. Desai
Special Auditor (Milk), Godhra

lx
SCHEDULE 1:

RESERVE FUND AND OTHER FUNDS – (BALANCE SHEET) 31-03-2005

Name of the As on 31-3-04 Addition Deduction As on 31-3-05


fund
Reserve Fund 9525582 1439170 - 10964752
Co-op 58765 9309 - 68074
Propaganda
Fund
Dairy Research 38259 5585 - 43844
Fund
Dividend 32853 3723 - 36576
Equalization
Fund
Capital subsidy 8234298 - - 8234298
fund DPAP
Capital Subsidy 30674498 - - 30674498
Fund NDDB-
OF
Capital Subsidy 531000 - - 531000
Fund (Land)
Capital Subsidy 47214 - - 47214
Fund Tribal
Charity Fund 6177 18617 - 24794
Bonus to 434894 148939 - 583833
Society Fund
TASP Grant- 6191000 1625000 750000 7066000
Bulk Cooler
DRDA Grant- 15700000 - - 15700000
Limdi
Tribal sub plan 3896750 517600 - 4414350
- Limdi
Investment 3950000 - - 3950000
Revaluation
Fund(Bonus
Shares)
Solar Subsidy 240000 144000 384000
Tribal Sub Plan 1670850 - - 1670850
Grant- Women
Training
Centre- Limdi
DRDA Grant – 30720000 - - 30720000
Cattle Feed
Project

lxi
Name of Gross Addition Deducti Gross Total Depreciat Deducti Total Net block
the assets value during the on value 31- depreciati ion on depre 31-03-
31-03-2004 year during 03-2005 on during during ciation 2005
the year 31-03-2004 the year the year 31-03-2005
Land 7330107 1666964 - 8997071 - - - - 8997071
Buildings 99229751 52339246 - 151568997 40727123 8467225 - 49194348 102374649
Plant and 183602308 142758310 2362790 323997828 97429088 27614287 1970210 123073165 200924663
machinery
Can crates 20647140 2275839 238680 22684299 16962 969 1163975 178969 17947975 4736324
Vehicles 5084290 800770 - 5885060 3114334 502594 3616928 2268132
Dead stock 26732840 1910120 - 28642960 15898314 2711654 - 18609968 10032992
Cattle feed - 1534004 - 1534004 - 306804 - 306804 1227200
plant and p
exchanges
Total 342626436 203285253 2601470 543310219 174131828 40766539 2149179 212749188 330561031

ASSETS SCHEDULE -2 (BALANCE SHEET) 31-03-2005

INVESTMENT- SCHEDULE: 3 (BALANCE SHEET) 31-03-2005

Serial Particulars Amount Rs.


number

1 The Panchmahal district co-operative bank ltd, Godhra 1,00,000


10000 shares each Rs 10/

2 GCMMF, Anand 16160 shares each Rs 1000/- 16160000


3 KRIBHCO New Delhi 10 shares each Rs 100000/ - 1000000
4 IFFCO New Delhi 25 Shares Each RS 100000/ 2500000
5 Shree Mahi Panchmahal Sahakari Sugar Ind Ltd., GODHRA 1000000
100 shares each Rs 10000/

TOTAL 20760000

1. SIGNIFICANT ACCOUNTING POLICIES

lxii
A. Basis of accounting:

The accounts are prepared on accrual basis in accordance with generally accepted
accounting principles.

B. Fixed Assets:

Fixed assets are started at cost. Accumulated depreciation is shown as fund.

C. Depreciation:

Depreciation on fixed assets is provided for on written down value method.

D. Capital Work in Progress:

The cost incurred for projects under commissioning and other fixed assets, the
construction/ installation / acquisition of which is not completed, are included under
the capital work in progress and the same are classified to the respective assets on its
completion except in the cases where the project accounts are settled.

E. Investments:

Investments are stated at fair market value or cost price whichever is lower.

F. Contingent Liability:

Contingent liabilities are not provided for and are disclosed by way of notes.

G. Valuation of Inventories:

Stock of Stores & Store and Trading material, Stock of Raw material, Material in
progress and finished goods are valued at cost or market value whichever is lower.

H. Retirement Benefit:

Regular contribution to Provident Fund, Super Annuation & Gratuity is made. The
liability towards gratuity and super annuation for its employees are funded with Life
Insurance Corporation of India.

I. Deferred Tax Liability:

Deferred tax asset/liability is not calculated but charged off to P&L A/C as and when
due.

2. CONTINGENT LIABILITIES

lxiii
A. Disputed liabilities for exercise Rs. 7.08 lakhs plus interest.

B. Disputed income tax liabilities Rs. 54.30 lakhs plus interest.

Jaswant J. Shah Dr. R. S. Patel Bhupendrasinh P. Solanki

General Manager Managing Director Chairman

P. N. Desai

Special Auditor (Milk), Godhra Directors

lxiv
APPENDIX 3
FLOW DAIGRAM FOR MILK RECEPTION

MILK FROM CHILLING CENTERS TO RMRD

Producers

Milk Collection Booth

Booths near the dairy Mini truck, tractor in chilling center

Weighing, Grading

Sampling

Chilling

Transfer to the tankers

RMRD

Raw Milk Tanks

lxv
FLOW DIAGRAM OF MILK PASTEURIZER

Chilled whole milk from raw milk storage tank



Balance tank
↓ ← Pump
Musslion filter

Regeneration - I ( 40° - 45° C )

Duppler filter

Cream Seperator → Cream → Cream Pasteurizer

Regeneration - II ( 60° - 65° C )

Regeneration - I ( 78° - 82° C )

Holding tubes ( 15 Sec )

Regeneration - II

Regeneration - I

Chilled Water Section

Storage Tank

lxvi
FLOW DIAGRAM FOR TABLE BUTTER

Pasteurized Cream ( 38 - 45 % Fat )



Chilling & Ageing at 10º C ( overnight )

Churning ( 15 rpm ) 3 - 4 times

Sampling

Churning ( 28 rpm )

Breaking Stage

Churning ( 15 rpm ) → Removal of
butter milk

Colour Addition ( Annatto colour @ 0.9% )

Addition of Water (10º C ) ↓

Forward & Reverse churning ( 5 / 2 min at 15 rpm )

Removal of washed water

Free Working

Salting ( addition at @ 2.5% )

Churning ( 9 rpm )

Sampling ( 1st moisture )

Water Addition ( for desired percentage )

Churning ( 9 rpm )

Churning ( 4 rpm )

Final Sampling ( for final moisture )

Unloading in trolleys

Packaging in machine & Storage

lxvii
FLOW DIAGRAM FOR GHEE

Cream for tank ( 12º C / 4 h )



C B M Machine

Butter → Butter Milk

Spiro Heater ( 60º C )

Melted Butter Tank ( MBT )

Duplex Filter

Serum Separator → Serum

Butter ( 92% fat )

Butter Melting Vat ( BMV )
↓ ← Pump
Ghee Kettle ( 113 - 119º C & 3.5 kg / cm ( max) )

Filter ( 4 Nylon filter - 60 mesh & 1 Nylon filter - 120 mesh )

Clarifiers ( 105 - 110º C )

Ghee Storage Tank ( GST )

Filters ( 160 mesh Nylon )

Packaging & Storage

lxviii
FLOW DIAGRAM FOR CHHASH MAKING

Pasteurized ( Skim Milk )

Heating ( 30 - 37° C )

Inoculation Mother Culture at 0.8% acidity, @ 1%

Standardization ( water addition for SNF % maintained )

Processing ( 60 - 65° C / 15 sec )


Chilling up to 10° C


Storage Tank


Packaging 500 ml pouch


Storage ( below 5° C )

lxix
FLOW DIAGRAM FOR SKIMMED MILK POWDER

Skim Milk

Balance Tank

Filter

Feed Pump

Berometric Leg condenser ( 20° C )

Pre Heater - 1 ( 30° C )

Pre Heater - 2 ( 40° C )

Pre Heater - 3 ( 50° C )

Pre Heater - 4 ( 60° C )

Low Temperature Pasteurization ( LTP ) ( 78° C )

Holding Tube ( 16 sec )

Calendria - 1

Vapour Seperator - 1 ( 60 - 63° C / 650 mm Hg )

Calendria - 2

Vapour Seperator - 2 ( 55 - 58° C / 700 mm Hg )

Calendria - 4

Vapour Seperator - 4 ( 50 - 55° C / 720 mm Hg )

Finisher

lxx
( For WMP ) Homogenization ← Vapour Seperator - F ( 45 - 50° C / 760 mm
Hg )

Condensed Milk Balance Tank

FLOW DIAGRAM FOR FLAVOURED MILK

Receiving Milk

Filtration

Cooling ( 5º C ) & Storage

Pre-Heating (60º C )

Homogenization ( 78 - 82º C / 15 sec )

3 or 4 can in milk ← Cooling & Storage ( 5º C ) in Vertical Tank
↓ ↓
Mixing accurate quantity → Balance Tank
of Sugar, Colour & Flavour

Vacuum Filling ( manually )

Sterilization ( 120º C / 30 min )

Slow Cooling At Room Temperature

Bulk Packing by machine with polythene

Carton Packing ( manually )

Storage

lxxi
FLOW DIAGRAM FOR TREATMENT OF DAIRY WASTE WATER

Waster water from plant



Collection in primary tank (PH 10)

Sump house

Sludge ← Some Settled ← Lifted to phase tank & mixed with CaCO3
PH
Drying Tank Particles adjusted to 7.5

Primary Settling Tank ( mixed with Alum )

Mixing & Agitation
↓ → Sludge Removal
Aeration tank
Sludge Deposition ↓
Clarifier
-------------------------------------------------
↓ ↓
Floating matter is send to Disposal of treated
Sludge during tank water / effluent

lxxii
lxxiii