AKNOWLEDGMENT

I express my sincere thanks to almighty god, the most gracious and

merciful. I also thankful to my parents and friends for their sincere assistance,

guidance and encouragement bringing out of their report in time with a deep

sense of involvement and confidence.

 CONTENT

CONTENTS TITLE PAGE NO

Introduction
1
Significances of the study
Impotents
Statement of the problem
Objective of the study
Scope of the study
Research methodology
Limitation of the study

2 Review of Literature

3 Data Analysis and Interpretation

4 Findings, Suggestions and

Conclusion

BIBLIOGRAPHY
 CHAPTER 1
INTRODUTION

INTRODUCTION
 The Dairy Industry in India has developed on lines somewhat different

from that in other advanced countries. On account of the increasing pressure on

the small size dairy industry continued fragmentation of agricultural holdings:

There are no medium or large privately owned dairy farms. Stray efforts by

some manufacturers of dairy products to set up such farms did not succeed and

they have also come to depend mainly on milk collected from small producers

in the rural areas either by their agents or by the co-operatives. The only large

farms now in existence are military farms owned and run by the Central and

state Governments which serve mainly as centres for research and extension

and not as commercial ventures producing table butter in some areas and also

started selling liquid milk to some institutions and military establishments. Due

to the absence of a system of dairying based on commercial rural milk

production, collection, bulk transportation, processing and marketing of milk

and milk products to meet the demand of the growing urban population, the gap

between demand and supply in cities continued to grow and acute shortage was

felt in many areas. Private vendors took full advantage of such shortages by

large scale adulteration of milk and also charged high prices for poor quality

milk, On account of the general exploitation by the private vendors and as a

measure for counter-acting these acute shortages, a few cooperative milk supply

societies were started during the second and third decades of this century but

these societies were invariably consumer oriented and they did not try to

organize the producers or to provide facilities and inputs for increasing milk
production. Inspired by the achievement by the kaira (District Cooperative Milk

Producers' Union. The Government of India. Ministry of Agriculture constituted

a national Dairy Development Board (NDDB) on 26 Septemberl965 to organize

and oversee the planning and execution of dairy development programmes on a

national scale and to provide technical guidance to various states in setting up

projects for overall development of milk production, processing and marketing

in the country and provide, technical and consultancy services on all relevant

aspects. Dairying is mostly conducted in very small units, with one or two

milking animals and is usually secondary to other forms of agriculture. In rural

areas a sizable proportion of the total dairy herd is owned by landless producers,

such as agricultural workers. However, an estimated 5% of adult milch animals

are kept by specialized producers in urban and semi-urban areas, as a rule, the

larger farmers produce milk only for the market because crop production is

much more profitable and less labour intensive.

According to the Nutrition Advisory Committee of the Indian Council of

Medical Research, a balanced diet for an adult Indian should include 285 g of

milk per day. But, against this requirement the actual intake per head is much.

Significant of the study

In this research, the aim of the researcher is to conceptualize various financial

factors in evaluating the efficiency of Tiruchirappalli District co-operative milk

producers union Limited. Very little empirical studies in this area, with use of

financial ratios and so it requires better understanding of various financial

factors and implementation of a model to evaluate it. The accounting variables

of interest in this study amongst the principal financial aggregates reported in

financial statements shareholders, Equity(SE), Total Debt(TL) Sales(SA)

profit(P) non business income (NBI), subsidy (SO) and total cost(TC). The

purpose of the present study is to throw more light on the factors affecting the

performance of Tiruchirappalli District co-operative milk producers Union

Limited. That can guide the investors Government, lenders and other

shareholder to have a comprehensive Knowledge about the functioning of the

union before investing their funds.

Importants
Co-operative is a form of community organization where its entire members

works together in order to fulfill their common needs all the members of this

organization are obeyed to maintain their democratic participation and

transparent making procedure.

Statement of the Problem

 Humans being life is begin with milk and end with milk. Milk is

perishable commodity and the surplus cannot be stored for a long time.

Identifying a research problem is said that research is an activity with a focus on

something. This focus is the topic or the problem about which the research is

conducted. Therefore, what is to be researched about is more important than

research itself. In other words, unless a researcher has a problem to study about,

he cannot conduct research Therefore. identifying the research problem is one

of the basic steps in research. Researcher who has succeeded indentifying the

research problem is half-successful. It is often felt that any problem is fit

enough to research about. But, a problem is systematically identified and

conducting research on it. Researcher has clearly indicated how the entire

process of research suffers if there is no systematic attempt to identify the

research problem.

Objectives of the Study

 The main objective of this study is to identify the factors affecting the

financial parameters and thereby the efficiency of the Tiruchirappalli District

Cooperative milk producers' union Limited in an era of regulation and suggest a

model to capture the constraining factors in a better way. Several specific goals

are formulated to achieve this main objective.. Based on the literature review

and gaps such as lack of in-depth study of the factors, effects of regulations on

performance, following specific objectives are formulated to study the impact of

various performance factors on the operations of the Tiruchirappalli District

Cooperative milk producers union Limited.

1. To find out the internal factors impacting the efficiency of various

activities and profitability.

2. To identify impact of the critical cost factors that need to be monitored

with relation to return generation and the performance of Tiruchirappalli District

Cooperative milk producers union Limited.

Scope of the study

 In this study the Tiruchirappalli district milk producers' union limited has

been selected on the comprehensive of the performance appraisal analysis with

help of Trend analysis, financial Ratio analysis. Current ratio, Quick ration,

Stock Turnover ratio, Average collection period, Average payment period, Total

turnover ratio, Current assets turnover ratio, working capital turnover ratio,

gross profit ratio, net profit ratio, staff cost to total ratio, manufacturing to total

cost ratio, office and administrative cost to total cost ratio, interest cost to total

cost ratio and trade cost to total cost ratio.

This secondary data collected were analyzed for the annual report of

Tiruchirappalli district milk producers union limited. Data analyses were

performed with statistical package for social sciences (SPSS) using methods

that included descriptive statistics, regression analysis, Karls Pearson

correlation coefficient and AMOS package for structural equation Modeling and

Bayesian Estimation and testing.

Research Methodology
 Pooled data collection is to assess the impact of the performance of

Tiruchirappalli District Cooperative milk producers union Limited over the

time horizon viz., 1997 - 1998 to 2007 - 2008. The approach to macroeconomic

variables is time series. The design of the study is based on financial data,

which are published. The secondary data is considered as the most appropriate

research design to the measure the dimensional effects of the performance of the

Tiruchirappalli District Cooperative milk producers' union Limited in this study.

The secondary data is the most appropriate research design as it can enable the

researcher to identify the divergence in practice and collect information on

financial variables over a time horizon. The secondary data is practically, a

quantitative method that requires standardized information in order to define or

describe variables or to study the relationships between the variables.

Limitation of the study

 It is important that the findings of the Empirical research be evaluated in

the background of certain limitation carried along. Since acknowledgment of

the limitation could suggest new direction for future research.

1. Data on dependent and independent variables were collected from the

publishing report and from public domain. Findings therefore, will

represent a casual approach.

2. Some research argue that adjustments to the financial statement may lack

comparability but such adjustment indeed accepted by the accounting

professionals and also for cross industry comparison. it is the useful and

effective methodology to employs such an approach, as statues bar

publication dissemination of union sensitive information.

 CHAPTER II

REVIEW OF LITERATURE

Review of Literature
 This chapter provides a review of literature pertaining to empirical studies

on Cooperative, empirical studies on Role of Cooperatives, Cooperative for

Development, empirical studies on Types of Cooperative in the Country,

empirical studies on Cooperative for Poverty Reduction, empirical studies on

Milk Pricing System, empirical studies on Chain Actors in cooperative sector,

empirical studies on Principle of Empowering Smallholders, empirical studies

on Risk in the Dairy Business, empirical studies on Facilities for the Village

Level Milk Producers, empirical studies on Growth of co operative institution .

empirical studies on Constraints of the cooperative institution, empirical studies

on Performance Analysis of co-operatives, empirical studies on Cost analysis of

dairy cooperatives, empirical studies on Significance of dairy cooperatives, and,

finally empirical studies on Performance of diary cooperatives in India and

overseas.
 CHAPTER III

DATA ANALYSIS AND INTERPRETATION

 This chapter the results of the statistical analysis done for testing

hypothesis are presented and interpreted. Interpretation of data is very much

dependent on the type of analyses to which the date is subjected to. Selection of

appropriate tools of analysis would yield useful results. But how their results

could be used to defend any theory or inference depends on how these results

are interpreted. The analysis is done with SPSS, MINITAB and AMOS

software.

The following section presents the results of various relationships

between the Profit, Subsidy, Total Sales, Total Debt, Non Business Income and

Shareholders Wealth, relationships between Land and Building, Plant and

Machinery. Furniture, Debtors, Cash, Stock and Sales, relationship between

Manufacturing Cost, Staff Cost, Administration Cost, Trade Cost, Interest Cost

and Sales . In this chapter, the results bring out the crucial financial factors

affecting performance of the Tiruchirappalli District Co-operative milk

producers union Limited.

Trend Analysis
Table 3.1 - Manufacturing Cost, Staff Cost, Administrative Cost, Trade Cost and

Interest Cost of Tiruchirappalli District Co-operative milk producers union

Limited.

Amount in Rupees
Manu Adminis
Staff Trade Interest
Year facturing trative
Cost Cost Cost
Cost Cost
1997-1998 384912390 4567897 1425193 5795859 6646011
1998-1999 555894097 5678456 2824997 6357038 7845085
1999-2000 603755511 7890567 3002589 8321447 9354873
2000-2001 633106519 9876345 3472825 8441047 12706304
2001-2002 636666246 12345345 3485270 9060095 12239379
2002-2003 650893126 23434563 3510738 10176062 11169175
2003-2004 805134457 23467867 3651392 10338461 12238076
2004-2005 996063871 29568734 3701173 10450781 14482109
2005-2006 1044288511 31537581 3827556 12350781 14624583
2006-2007 1063922701 38123456 3958206 13012581 15237272
2007-2008 1233763603 44726233 4068354 14012831 16152968

Source: Annual Reports of Tiruchirappalli District Co-operative milk producers

union Limited.
Fig 3.1 Trend Analysis Plot for the Manufacturing Cost in TDC Milk
Producers Union Ltd

TrendAnlysis Plot for the ManufacturingCost inTDC Milk Producers' UnionLtd

Linar Trend Model
Yt =319362690 +77203204*t

1,400,000,000.00

1,200,000,000.00

1,000,000,000.00

Actual Fits
800,000,000.00

600,000,000.00

400,000,000.00

200,000,000.00

0.00
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Table 3.1 and Trend analysis figure 3.1 reveal the trends in the Manufacturing

Cost. The trend plot that shows the original data, and the fitted trend line, the

output also displays the fitted trend equation Yt = 319362690 + 77203204*t and

three measures help to determine the accuracy of the fitted values: 7.43743,

5.34868, and 4.01252. The Manufacturing Cost data show a general upward

trend, though with an evident cyclic factor. The trend model appears to fit well

to the overall trend. The above chart shows the amount of Manufacturing Cost

(in rupees) from 1997-1998 to 2007-2008. The value has increased from
384912390 rupees in 1998 to 1233763603 rupees in 2008. This is an increase of

848851213 rupees. The long-run trend for the manufacturing cost is increasing

in Tiruchirappalli District co-operative milk producers union Limited. From the

above trend from 2001 to 2004 the cost is below the fitted. trend line. In that

period the Tamilnadu co operative milk producers union reduce its cost. From

2005 onwards the cost above the fitted trend line which shows the inefficient

management of manufacturing cost. Reduce the cost of procurement, processing

and marketing of dairy products through economy of scale approach will leads

to increase profitability. After liberalization, the co-operative dairy plants are

facing aggressive competition from the private players for market share. Some

of the research concluded that the private players performance is better than co-

operative diary in cost control aspect. For example Pawar and Sawant (1979)

have confirmed that the private dairy plants use their resources efficiently and

reduce their total operational costs as compared to those by the co-operative

dairy plants.
Fig 3.2 Trend Analysis Plot for the Staff Cost in TDC Milk Producers

Union Ltd

Fig 3.26 Trend Analysis Plot for the Shareholders fund in TDC Milk
Producers Union Ltd
Table 3.7 and Trend analysis figure 3.26 reveal the trends in the Shareh fund.

The trend plot that shows the original data, and the fitted trend lir output also

displays the fitted trend equation Yt = 134176528 + 3265002 three measures

help to determine the accuracy of the fitted values: 9. 1.45733, and 3.91503.

The Shareholders fund data show a general upward trend, though with an

evident cyclic factor. The trend model appears to fit to the overall trend. The

above chart shows the amount of Shareholder: (in rupees) from 1997-1998 to

2007-2008. The value has increased 176232909 rupees in 1998 to 171198673

rupees in 2008. This is a decre 5034236 rupees due to accumulated loss during

the preceding years and the same has been set off and carry forward. The long-

run trend for the shareholders fund is increasing in Truchirappalli District co-

operative milk producers union Limited.

Empirical studies on roll of Co-operatives

While pricing the milk and product co-operative play an important role. A co-

operative is an enterprise owned by and operated for the benefit of those

members and users the dairy co-operative operated by the farmers to the

consumer where it is marketed. Also make a bargaining capacity for the price

with the traders it represents in that level of decision. Where different rules and

regulations are formed. Co-operative also can the product and the nature of

product from one to anther in order to maintain highest return to the members

and users.(shields 2009)

Empirical Studies on Co-operative for development

Co-operative are one of the major means of development co-operatives are

accepted worldwide as effective institution to enable and uplift the lower section

of the people and ultimately contribute to the economic. And social

development of the country (Bhandari 2008). Development of the cooperative

was started with the first 5 year plan in 1956 in Nepal. It was formalized by the

page of cooperative societies Act of 1960, in 1964 during the second plan

period, land reform was introduced with a compulsory savings plan for farmers

by the time of the third plan (1965-1970) a total of 1109 co-operative societies
has been established, but the financial, condition remains poor. In the fifth five

year plan (1975-80), more concrete effort was taken by the government and

initiated a separate development program to the farmers at the village level for

the sustainable development of the co-operative(Bhandari 2008)

Empirical studies on type of co-operative in the country

There are all together 9720 co-operative in the country, Among them only 1564

are related with milk production and are concerned with other purpose. Where

as the co-operative related with saving and credit shared most part in the co=-

operative field with the number of 3392 and id\s followed by multipurpose co-

operative 2532 in number. The saving and credit co-operative (35%)

multipurpose co-operative (26%) and dairy co-operative (16%) have covered

the 1st second and 3rd position respectively. The total number of the co-operative

in the country in 1259747; whereas the female members are 847300(67.3%)

respectively (Department of co-operative,2008)

 CHAPTER IV

FINDINGS, SUGGESTIONS AND CONCLUSION

 The findings obtained from trend analysis, ratio analysis and the

statistical test performed on the hypotheses, the structural equation mediated

models interest - sales model. Receivable Management - sales model and total

cost -shareholders fund regression models are given. Based on the findings the

overall performance picture are summarized for the investors, shareholders, and

executives for taking decision on investing and/or diversifying into a new

business activity. It will bring the scope for future research.

The trend plot of Manufacturing Cost elucidates the original data, and the

fitted trend line, the output also displays the fitted trend equation Yt =

319362690 + 77203204*t. The Manufacturing Cost has increased from

56318067 rupees in 1998 to 198961939 rupees in 2008. This is an

increase of 142643872 rupees. The long-run trend for the Manufacturing

Cost is increasing.
The trend-plot of staff cost demonstrates the original data, and the fitted

trend line, the output also displays the fitted trend equation Yt = 3753446

+ 4153350*t. The staff cost has increased from 4567897 rupees in 1998
 to 44726233 rupees in 2008. This is an increase of 40158336 rupees. The

long-run trend for the staff cost is increasing.

FINDINGS FROM REGRESSION ANALYSIS & STRUCTURAL

EQUATION MODEL

REGRESSION MODEL FOR COST DIMENSIONS - SALES

Standardized parameter estimates for mediated model explains the existing

relationships between the mediating factor Interest cost and Sales. R2 Value -.39

stated that the mediating factor interest. The Manufacturing cost 0.00, followed

by staff cost -.01. Trade cost = .77resulted significant impact on mediated factor,

Interest. Administration cost 1.62 is not significant. This model represents

Tiruchirappalli District cooperative milk producers union limited should

concentrate more on controlling Interest, besides concentrating on

Manufacturing Cost, Power and Fuel Cost, Other Administration Cost, and

Selling Costs for reporting reasonable Business Income (Sales).

REGRESSION MODEL FOR ASSET DIMENSIONS - SALES

Standardized parameter estimates for mediated model explains the existing

relationships between the mediating factor Sundry Debtors and Sales. R2

Value .42 stated that the mediating factor Debtors. The visual representation of
the results suggest that the relationship between dimensions of Asset and

mediated factor. R" Value .42 for mediating factor. This model represents

Tiruchirappalli District cooperative milk producers union limited may

concentrate more on Receivable Management, besides concentrating on cash

management, inventory

BIBILIOGRAPHY
Website Address

www.co-operative.coop/

www.en.wikipedia.org/wiki/Aavin

www.ahrq.gov >About AHRQ

www.nigms.nih.gov > About NIGMS

www.ed.gov/about/bdscomm/list/naciqi.html

Co-operation theory text book