A STUDY ON THE BUSINESS PERFORMANCE OF

G1680 POONAMALLEE PRIMARY AGRICULTURAL

CO-OPERATIVE CREDIT SOCIETY.
G1680 Poonamallee, Chennai (Dt).

A Project report submitted in partial fulfillment of the requirements for the award of

HIGHER DIPLOMA IN COOPERATIVE MANAGEMENT

Submitted by
K. ARUNAGIRI
Senior Inspector O/o The RCS
HDCM Correspondence course - III Batch

Under the Guidance of

Thiru. R.GANESAN
Deputy Director

NATESAN INSTITUTE OF CO-OPERATIVE MANAGEMENT,

CHENNAI
JUNE - 2014

Thiru. R.GANESAN
Deputy Director
NICM CHENNAI.

CERTIFICATE
Certified that this project report entitled A Study on the Business performance of
G1680 Poonamallee Primary Agricultural Co-operative Credit Society is a record of
project work done independently by K. ARUNAGIRI Under my guidance and supervision
and that it has not previously formed the basis for the award of any degree, fellowship, or
associate ship to him.

Place :

Signature of the Guide

Date :

K. ARUNAGIRI ,
ROLL NO: 8004
HDCM Correspondence Course
III Batch

DECLARATION
I hereby declare that this project report entitled A Study on the Business
performance of G1680 Poonamallee Primary Agricultural Co-operative Credit Society
is a bonafide record of work done by me during the course of project work and that it has not
previously formed the basis for the award to me for any degree/ diploma, associate ship,
fellowship, or other similar title of any other Institution.

Place :

(K. ARUNAGIRI )

Date :

ACKNOWLEDGEMENT
I wish to express my sincere thanks and gratitude to Dr. P. JAGANNATHAN,
Director, NICM, CHENNAI for giving me an opportunity to do this project work.

I wish to express thanks to Thiru. R.GANESAN., Deputy Director, as well

as my project Guide for his Valuable guidance, encouragement and suggestion for carrying
out my Project work.

My

thanks

are

due

to

Thiru.

K.S.Ravichandran,

President

and

Thiru.G.Giridhharan, Secretary and all other staff members of G1680 Poonamallee

Primary Agricultural Co-operative Credit Society, Poonamallee for their kind Co-operation.

I also convey my sincere thanks to all for providing me with valuable data and all
necessary informations and everyone who helped me to complete my project work.

(K. ARUNAGIRI )

CONTENTS
CHAPTER
NO
1

TITLE

PAGE NO

INTRODUCTION & DESIGN OF

THE STUDY
PROFILE OF THE G1680 POONAMALLEE PACCS

16

FUNCTIONS AND BUSINESS PERFORMANCE

24

OF THE PACCS
FINDINGS & SUGGESTIONS

49

BIBLIOGRAPHY

53

CHAPTER 1

INTRODUCTION & DESIGN OF THE STUDY

History of the cooperative movement

The cooperative movement began in Europe in the 19th century, primarily in Britain
and France, although The Shore Porters Society claims to be one of the world's first
cooperatives, being established in Aberdeen in 1498 (although it has since demutualized to
become a private partnership). The industrial revolution and the increasing mechanization of
the economy transformed society and threatened the livelihoods of many workers. The
concurrent labor and social movements and the issues they attempted to address describe the
climate at the time.
The first consumer cooperative may have been founded on March 14, 1761, in a
barely furnished cottage in Fenwick, East Ayrshire, when local weavers manhandled a sack
of oatmeal into John Walker's whitewashed front room and began selling the contents at a
discount, forming the Fenwick Weavers' Society.
In the decades that followed, several cooperatives or cooperative societies formed
including Lennoxtown Friendly Victualling Society, founded in 1812.
By 1830, there were several hundred co-operatives. Some were initially successful,
but most cooperatives founded in the early 19th century had failed by 1840. However,
Lockhurst Lane Industrial Co-operative Society (founded in 1832 and now Heart of England
Co-operative Society), and Galashiels and Hawick Co-operative Societies (1839 or earlier,
now Lothian, Borders & Angus Co-operative Society) still trade today.
It was not until 1844 when the Rochdale Society of Equitable Pioneers established the
Rochdale Principles on which they ran their cooperative, that the basis for development and
growth of the modern cooperative movement was established.

Robert Owen
Robert Owen (17711858) is considered the father of the cooperative movement. A
Welshman who made his fortune in the cotton trade, Owen believed in putting his workers in
a good environment with access to education for themselves and their children. These ideas
were put into effect successfully in the cotton mills of New Lanark, Scotland. It was here that
the first co-operative store was opened. Spurred on by the success of this, he had the idea of
7

forming "villages of co-operation" where workers would drag themselves out of poverty by
growing their own food, making their own clothes and ultimately becoming self-governing.
He tried to form such communities in Orbiston in Scotland and in New Harmony, Indiana in
the United States of America, but both communities failed.

William King
Although Owen inspired the co-operative movement, others such as Dr William
King (17861865) took his ideas and made them more workable and practical. King
believed in starting small, and realized that the working classes would need to set up cooperatives for themselves, so he saw his role as one of instruction. He founded a monthly
periodical called The Co-operator, the first edition of which appeared on 1 May 1828. This
gave a mixture of co-operative philosophy and practical advice about running a shop using
cooperative principles. King advised people not to cut themselves off from society, but rather
to form a society within a society, and to start with a shop because, "We must go to a shop
every day to buy food and necessaries - why then should we not go to our own shop?" He
proposed sensible rules, such as having a weekly account audit, having 3 trustees, and not
having meetings in pubs (to avoid the temptation of drinking profits).

The Rochdale Pioneers

The Rochdale Society of Equitable Pioneers was a group of 28 weavers and other
artisans in Rochdale, England, that was formed in 1844. As the mechanization of the
Industrial Revolution was forcing more and more skilled workers into poverty, these
tradesmen decided to band together to open their own store selling food items they could not
otherwise afford. With lessons from prior failed attempts at co-operation in mind, they
designed the now famous Rochdale Principles, and over a period of four months they
struggled to pool together one pound sterling per person for a total of 28 pounds of capital.
On December 21, 1844, they opened their store with a very meager selection of butter, sugar,
flour, oatmeal and a few candles. Within three months, they expanded their selection to
include tea and tobacco, and they were soon known for providing high quality, unadulterated
goods.

Co-operative movement in india

During the British rule , Nicholson a British Officer in India suggested to introduce
Raiffersen model of German agricultural credit Cooperatives in India. As a follow-up of that
recommendation, the first Cooperative Society Act of 1904 was enacted to enable formation
of "agricultural credit cooperatives" in villages in India under Government sponsorship. With
the enactment of 1904 Act, Cooperatives were to get a direct legal identity as every
agricultural Cooperative was to be registered under that Act only. The 1904 Cooperative
Societies Act, was repealed by 1912 Cooperative Societies Act which provided formation of
Cooperative societies other than credit. Under 1919 Administrative Reforms act ,
Cooperatives was made a provincial subject making each province responsible for
Cooperative development. In 1942, the British Government enacted the Multi-Unit
Cooperative Societies Act, 1942 with an object to cover societies whose operations are
extended to more than one state.
The impulses of the Indian freedom movement gave birth to many initiatives and
institutions in the post independence era in India and armed with an experience of 42 years in
the working of Multi Unit Cooperative Societies and the Multi-Unit Cooperative Societies
Act, 1942, the Central Government enacted a comprehensive Act known as Multi State
Cooperative Societies Act,1984,repealing the Act of 1942.
GROWTH OF COOPERATIVE SECTOR IN INDIA
India has basically an agrarian economy with 72% of its total population residing in
rural areas . The rural people need lot of services in daily life which are met by villagecooperative societies. The seeds of cooperation in India were sown in 1904 when the first
Cooperative Societies Act was passed . Since then, the cooperative movement has made
significant progress. Cooperatives have extended across the entire country and there are
currently an estimated 230 million members nationwide. The cooperative credit system of
India has the largest network in the world and cooperatives have advanced more credit in the
Indian agricultural sector than commercial banks.

The village cooperative societies provide strategic inputs for the agricultural sector,
consumer societies meet their consumption requirements at concessional rates; marketing
societies help the farmer to get remunerative prices and co-operative processing units help in
value additions to the raw products etc. In addition, co-operative societies are helping in
building up of storage go-downs including cold storages, rural roads and in providing
facilities like irrigation, electricity, transport and health. Various development activities in
agriculture, small industry marketing and processing, distribution and supplies are now
carried on through co-operatives.
In fertiliser production and distribution the Indian Farmers Fertilizer Cooperative
(IFFCO) commands over 35 percent of the market. In the production of sugar the cooperative
share of the market is over 58 percent and in the marketing and distribution of cotton they
have a share of around 60 percent. The cooperative sector accounts for 55 percent of the
looms in the hand-weaving sector. Cooperatives process, market and distribute 50 percent of
edible oils.
Dairy cooperatives operating under the leadership of the National Dairy Development
Board and through 15 state cooperative milk marketing federations has now become the
largest producer of milk in the world. The groundwork for this was laid in the early 1970's
when the largest dairy development programme in the world - Operation Flood - was
launched. Operation Flood was a national marketing strategy linked to a dairy infrastructure
development programme that created a chain of dairy processing plants, collection stations
and a national milk transportation grid. With the passage of the Insurance Act, cooperatives
have been allowed to entry into the insurance business. Insurance is a field where the
immense potential of cooperatives still remains untapped.

The Indian Farmers Fertiliser Cooperative has recently teamed up with a Japanese
company and formed a joint venture for undertaking general insurance business in India. This
signifies that Indian cooperatives have come of age in formulating strategic alliances.

The main areas of operation of co-operatives in India are as under:

10

 Agricultural credit
Agricultural supplies
Agricultural marketing
Agricultural processing
Industrial cooperatives
Public distribution of essential commodities through consumer cooperatives
Urban credit cooperatives
Housing cooperatives

Cooperative movement in Tamilnadu

From a small beginning, the cooperative movement in Tamilnadu has grown in
strength over the years. Opening of a village cooperative credit society in Thiroor in
Thiruvallore district in 1904 marked the advent of the cooperative movement in Tamilnadu
ushering in a new era of services for the people of the state, particularly the agriculturist
families.
The co-operative societies functioning in Tamil Nadu are governed by the following:
i) Tamil Nadu Co-operative Societies Act, 1983.
ii) Tamil Nadu Co-operative Societies Rules, 1988.
iii) Bye-laws of the respective institutions
PRINCIPLES OF COOPERATION
a) Open membership
b) Democratic management
c) Limited interest on capital
d) Distribution of surplus based on patronage
e) Provision of Co-operative Education and Training

11

f) Co-operation among cooperatives

g) Concern for community

ADMINISTRATIVE SETUP OF THE DEPARTMENT :

The Registrar of Cooperative Societies being the head of the department is
functioning at Chennai. The Registrar of Cooperative Societies is assisted by Additional
Registrars of Cooperative Societies, Joint Registrars of Cooperative Societies and Deputy
Registrars of Cooperative Societies at the Headquarters. A Joint Registrar of Cooperative
Societies is in-charge of each region. Circle Deputy Registrars of Cooperative Societies are
working under their control.
There are 32 regions in the State with a Joint Registrar in charge of each region
(District). The regional Joint Registrars are responsible for the proper functioning of the
cooperative societies in the district. Expect for Chennai Region for which Additional
Registrar is head of the regional office.
There are two Joint Registrars (Public Distribution System) in Chennai, exclusively
to attend to the work relating to distribution of essential commodities through the public
distribution system outlets of the cooperative societies functioning in Chennai City and belt
areas.
The State has been divided into circles for the administration of the department. The
circles on the territorial basis are generally coterminous with the Revenue Division. In
Chennai City, however, there are two circles which are functioning on functional basis, one
for credit and the other for non-credit cooperatives. The circle Deputy Registrars are working
under the immediate control of regional joint Registrars. Many of the powers of the Registrar
under the Tamilnadu Cooperative Societies Act, 1983 and the rules framed there under have
been delegated to circle Deputy Registrars in respect of primary cooperatives. The Deputy
Registrar attends to the inspection and supervision of all cooperative societies in his circle
and discharges all statutory functions relating to the societies, such as enquiry, arbitration,
execution, liquidation etc. A circle Deputy Registrar is assisted by few Cooperative Sub

12

Registrars and a complement of Senior Inspectors, Junior Inspectors and other ministerial
staff.

Apart from the regular circle Deputy Registrars, in every district, there is one Deputy
Registrar (Public Distribution System) with a complementary staff for the supervision of fair
price shops. They are also working under the direct control of the regional Joint Registrars.
There are seven Deputy Registrars (Public Distribution System) in Chennai City
functioning under the direct control of Joint Registrar (Public Distribution System) Chennai.
They are inspection the various public distribution system outlets of the cooperative societies
functioning in Chennai City and belt areas. Citizens can organise any type of cooperative
society as they have variety of needs and services subject to the provisions to Tamilnadu
cooperative Societies Act, 1983 and Rules 1988. Types of co-operative societies now
functioning in the state catering to various needs of citizens are furnished here under :-

Sl. No

Purpose served

Type of Cooperative Societies

Primary Agricultural Cooperative Banks /

For Agriculturist at Village level

For Urban People (Urban Area)

Cooperative Urban Banks

For Purchase / sale of Agricultural

product at remunerative price and to
get loan on the pledge of product.

Agricultural Producers Cooperative

Primary Cooperative Agriculture and

Loans for Minor Irrigation, Farming,

Seri culture, Horticulture, Non Farm
sector, Tractor requirement, Rural
Housing, Small, Transport, Hospital,
Clinic, Computer center.

For getting consumer goods at right

price, and right weighment.

Primary Cooperative Stores, Cooperative

Wholesale Stores, Cooperative Super
Markets.

For employees in Government

Department, Government sector,

Employees Thrift and Credit Cooperative

Societies.

Farmers service Cooperative Societies.

Marketing Societies.

13

Rural Development Banks.

public sector, private sector

7

For Barbers and Washermen

Barbers Cooperative societies and

Washermen Cooperative Societies.

For Labour

Labour Contact Cooperative societies.

For Vegetable Growers

Vegetable Growers Cooperative Marketing

Societies.

10

Agricultural Loan, Medium term loan

and other loan further needs of tribal Large sized multipurpose societies.
members.

PACCS Primary Agricultural Cooperative Credit Society

In Tamil Nadu, there are 4,543 Primary Agricultural Cooperative Credit Societies.
Their main objective is to provide agricultural and non-agricultural credit in rural areas. They
also undertake distribution and sale of agricultural inputs like fertilizers, seeds and small
agricultural implements. In addition, they operate 15,569 public distribution system outlets,
distributing essential commodities in rural areas.

STRUCTURE OF AGRICULTURAL CO-OPERATIVE CREDIT IN TAMILNADU

NABARD
(National Level)

Short and Medium Term

Long Term Credit

State Apex Co-operative Bank

State Agricultural and

14

(State level)

------- (1)

Rural Development Bank--------(1)

District Central Co-operative Bank

Primary Co-operative

(District Level)--------(23)

Agricultural and Rural

Development Bank--------(180)

Primary Agriculture Co-operative Credit Society

(Primary Level)-------------(4543)
OBJECTIVES OF THE STUDY :
To study the origin and growth of G1680 Poonamallee PACCS, Poonamallee.
To study the various functions of the G1680 Poonamallee PACCS, Poonamallee.
To analyze the causes of overdue of the G1680 Poonamallee PACCS, Poonamallee.
To give suitable measures to strengthen the society in future

METHODOLOGY OF THE STUDY

The study is based on case study method to analyze the performance of the PACCS,
secondary data has been collected from the Audit and Annual reports of the Society.

SOURCE OF THE DATA

Internal Sources :

15

The data such as total members of the PACCS, members share capital, overdue,
Borrowing, deposits and reserves etc., have been collected for the period of 2008- 2009 to
2012 2013 from the records and registers, balance sheets and Audit report of the above
mentioned period.

External Sources :
Co-operative Journals, Co-operative text books and website have been used as
external source.

PERIOD OF STUDY:
The study covers a period 5 years from 2008-2009 to 2012-2013.

CHAPTERISATION SCHEME:
The study is organized into three chapters. The following are the details of
Chapterisation scheme.

The project study starts with the Introduction & Design of the study , which deals
with the origin of Co-operative movement, Co-operative movement in India, Cooperative movement in Tamilnadu.

Design of Study includes sources of the data both external and internal, sources of
the date, objective, period of the study and Analysis of data.

16

First Chapter, Profile of the PACCS, deal with origin & growth of the PACCS, area
of operation, objectives, Management and organization set up, membership of the society
and its special features.

Second chapter, Functions and Business performance of the Society, deals with the
mobilization of the resources, deposits, working capital, reserve fund, Borrowings,
Overdue, PDS activities of the society.

The last chapter bring together the conclusion that emerged from the study and offers
necessary suggestions for the improvement in the performance of the management of
G1680 Poonamallee PACCS, Poonamallee, Chennai. (Dt).

CHAPTER 2

PROFILE OF THE G1680 POONAMALLEE PACCS,

POONAMALLEE.

17

PROFILE OF THE G1680 POONAMALLEE PACCS, POONAMALLEE.

Poonamallee is an agricultural Taluk. It is located in Chennai District, Poonamallee
Taluk about 28 km from Chennai.

ORIGIN AND DEVELOPMENT

The G1680 Poonamallee primary agricultural co-operative credit society was
registered as a primary agricultural society on 21.10.1957 and it commenced its business
from 06.11.1957, under the Tamilnadu Co-operative societies act.,

ADDRESS OF THE SOCIETY

D.1289 G1680 Poonamallee,
Primary Agricultural Co-operative Credit Society,
18

Thandarai Main road, By-pass Road,

Ponnamalle, Chennai-600072.
AREA OF OPERATION
The area operation of the

G1680 Poonamallee Agricultural Co-operative Credit

society covers the following villages

Ponnamalle
Chenner kuppam
Parivakkam
Bhanavedu thottam
Thirumalisai
Nasereth pettai
Malayam pakkam
Pidari thangal
Mankadu.
The total Land area is 8143 acres. Out of this wet land area 2548 acres and Dry land
area 3517 acres of Cultivatable lands.

OBJECTIVES OF THE SOCIETY

1. Issue of short term loans for agriculture purpose.
2. Issue of medium term loans for purchase of milk animals and for purchase of
bullock cart and Agricultural allied activities.
3. Issue of loans to rural artisans and issue of loans to weaker section to earn out
petty traders and cottage industries.
4. Issue of Jewel loan to members.
5. Distribution of manures and pesticides.
6. Collecting deposits and issuing deposit Loan.
7. To encourage the thrift and Co-operative Policies among the members and
depositors.

19

8. Public distribution of essential Commodities through PDS Shop attached with

society.
9. Common Service center
10. Agricultural Service center- Implements, Equipments, Machineries.
A DETAILED STUDY OF FINANCIAL PERFORMANCE OF STUDY UNIT IS
DISCUSSED IN THE FOLLOWING PAGES.
(1). MANAGEMENT OF THE SOCIETY
The Society is administered by the special officer. The officer of the cooperative
department in the cadre of sub-registrar is appointed as a special officer (Addl charge) and
the secretary and other supervisory staff assisted him. The following structure reveals the
hierarchy.

ORGANIZATION STRUCTURE OF THE G1680 POONAMALLEE PACCS.

General Body
Board of Management
President

Secretary (1)

Assistant Secretary (1)

20

Accounts (1)
Clerk (9)
(1. Savings

2. Deposit/Deposit Loans

5. JL Issue 6. KCC/ JLA/ JLG

3. JL Issue 4. JL Collection

7. MT Loan/ ARC/ EP/ Advance 8. PDS

9.Cashier )

Fer. Sales Man (1)

PDS Sales Man (8)

Office Assistant (1)

Night Watchman (1)

Total Staff

15

PDS Staff

8
23

II. SOURCES OF FUNDS

The primary agricultural credit society requires adequate finance to perform their
functions effectively. The society can raise finance both internally and externally. The
internal Source consists of share capital, entrance fees collected from members and nonmembers. The external source consists of loans from central cooperative Banks, loans grant
and subsidies from the government and receiving deposits from members and non members.
Source of funds

(A)Internal source /

(B)External sources

(or)

(or)

Owned funds

Borrowed funds

21

(1)Share Capital

(2)Reserves (3)Surplus

1(a)Member Govt

Statutory
Reserves

Reserves

Reserves

For Bad Debts

Other

For Overdue

Reserves

(1)Deposits
(2)Borrowings
(SDCCB + Govt )

a)Fixed

b)Savings c)Recurring d) Thrift

(A) Internal sources / owned fund

I.

SHARE CAPITAL
Share capital is one of the sources of primary agricultural Cooperative Credit society.

The share capital is collected from the member who availing loan or services from the
PACCS.
Table 1
SHARE CAPITAL POSITION (in Lakhs)
Particulars
Members

2008-09
2.87

2009-10
3.09

2010-11
3.24

2011-12
3.39

2012-13
5.03

Share
Govt. of T.N
ICDP
Total

0.07
2.94

0.08
3.17

0.08
3.32

0.08
3.47

0.65
5.68

22

CHART NO. 1
SHARE CAPITAL

Source: Audit report of the PACCS

I. (a) MEMBERSHIP
The membership of the PACCS is classified in to two types viz., Members and
associate members. Members are eligible to get all kinds of loans and also have right to vote
in the general body meeting. An associate member shall not be entitled to participate in the
general body meeting and has no voting right, only get the services from the society. The
decline in the members is due to withdrawal and also the High court stayed the admission of
new members.
TABLE 2 MEMBERS DETAILS
Sl.No
1.
2.
3.
4.
5.

Year
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

Members
1687
1747
1747
1747
1932
23

Govt
1
1
1
1
1

Total
1688
1748
1748
1748
1933

Membership.

2. RESERVES
There are several type of reserves created to strengthening the financial position of the
society. They are statutory reserves bad debts reserves, over due reserves and other kinds of
reserves all together created during the course of audit. The flexivation is due to creation of
reserves for the over due loan and interest and also for statutory reserves.
TABLE 3 Reserves (in lakhs)
Sl.

Year

Reserve fund

Other reserve

Total

No
1.
2.
3.
4.
5.

2008-09
2009-10
2010-11
2011-12
2012-13

0.29
0.33
0.33
1.29
1.29

fund
23.18
27.26
32.33
37.69
40.16

23.47
27.59
32.66
38.92
41.45

CHART 3 Reserves position

24

CHAPTER - 3

FUNCTIONS AND BUSINESS PERFORMANCES

OF THE PACCS

25

FUNCTION OF THE G 1680 POONAMALLEE

PRIMARY AGRICULTURAL

COOPERATIVE CREDIT SOCIETY

(B) EXTERNAL SOURCES / BORROWED FUND
The G1680 Poonamallee Primary Agricultural Cooperative Credit Societys main
functions are accepting various kinds of deposits from members and associate members.
Issue loans and advances in various purposes and trading activities in manure sales and PDS
Activities and Providing common service and agricultural Implement services to the farmers.

(1) DEPOSITS
The G1680 Poonamallee Primary Agricultural Cooperative Credit Society also raise
its resources by way of collecting deposits under various trends in order to meet its members
need and requirements of other borrowers. It has introduced various kinds of deposits which
are given below.
a) Saving Deposits

26

b) Fixed Deposits
c) Recurring Deposits
d) Thrift Deposits (Agri + MT Loan)

a) SAVING DEPOSITS
A Saving deposit of account is for the people to the lower and middle classed who
wish to save a part if their current income to meet their future needs and also intend to earn
an income from their savings facilities, Saving account creates the habit of thrift to member
and also other people.

The minimum amount acceptable is very low. A deposit cannot withdraw exceeding
to a certain amount of money from his saving deposits account unless prior notice is given.
The society does not allow any over draft facilities to saving account holders.

b) FIXED DEPOSITS
A fixed deposit is the deposits, which is not repayable before the expiry of a fixed
period. Certain minimum amount and Maximum period is prescribed up to which fixed
deposits are received. Interest allowed is higher than the other deposits.
Some times loans may be allowed by the society to the fixed deposit holders.

c) RECURRING DEPOSITS
The recurring deposits made by a person who undertakes, hat to pay to the society
every month a fixed amount for the stipulated period. The interest rate for recurring deposits
10.5 % per annum for deposit period more than one year.

27

d) THRIFT DEPOSITS
The Thrift Deposit were collected from the loan borrowed members at rate of

2%

to the borrowed principal amount. This deposit should be refunded only at the time of
withdrawal of member ship.

Table 4 DEPOSITS AND BORROWINGS (Rs.in Lakhs)

Year

From

KCCB

KCCB

Recapita

Subsid

Membe

members

loans

Current

lization

y and

rs loan

and

A/c

Fund

others

suspens

Total

2008-

16.78

Others
149.78

--

--

1.65

e
0.03

168.24

09
2009-

19.67

165.02

--

--

1.65

0.03

186.37

10
2010-

21.98

158.35

--

--

1.65

0.03

182.03

11
2011-

17.27

280.87

--

14.91

1.65

0.03

314.76

12
2012-

15.59

223.83

0.39

14.91

1.65

0.03

256.44

13
CHART-4 DEPOSITS AND BORROWINGS

28

The above table shows that the deposits of G1680 Poonamallee PACCS for the last 5
years are increasing trend.

Deposits from members are the most important source of fund for a primary
Agricultural Coop Credit society. The G1680 Poonamallee PACCS takes sincere efforts to
mobilize deposits from Public. The following are the different types of deposits mobilized by
the G1680 Poonamallee Primary Agricultural Co-operative Credit Society.
1. Fixed Deposits
2. Saving Deposits
3. Thrift Deposits
4. Recurring Deposits
Rate of Interest
Period of

Rate of

29

For senior citizen

Deposit
Fixed deposit
1-2 years
Savings A/c
RD A/c
Thrift

Interest
10.5%

10.25%

4%
10.5%
8.25%

----

(2) BORROWINGS
The Society has not borrowed any type of funds/ loans from the Chennai District
Central Cooperative Banks or from Government or any other agencies.

C) LOAN OPERATION AND ADVANCE

The second major function of the society is issuing loan and advances. The society is
lending money to the farmers/ members in terms of
1. Short term loan
2. Medium term loan
The following table reveals the member level loan outstanding for the past five years,
which is in the increasing trend.
Table 5 Total Member Loan outstanding
Year
No of loans
Amount (in Lakhs)
2008-2009
6162
1001.09
2009-2010
6484
1263.65
2010-2011
6395
1517.48
2012-2012
6744
2026.68
2012-2013
6655
2314.19
Chart - 5 Total Member Loan outstanding

30

(i)

SHORT TERM LOAN

Short term loans are given for the period of one year or less than one year. The type of loans
are.
a) Crop loan
b) Jewel loan
a) CROP LOAN
Crop loan is the most important component of agricultural credit extended by Primary
Agricultural Cooperative Credit Society. Crop loan concentrates on productive purpose it
includes purchase of seeds, fertilizer, pesticides etc.,
Crop loans are issued at two portions namely.
1. Cash portion at 60 %
2. Kind portion at 40 %
Repayment period is not More than one year according to the crop pattern.

31

The kind portion incluses fertilizer natural manures pesticides and seed portion
values. There is no interest for the crop loan if it is repaid before the due date.
Table-6 CROP LOAN ISSUE DETAILS (ALL TYPES)
Year
2008-09
2009-10
2010-11
2011-12
2012-13

NO

Amount (in

417
537
607
616
547

lakhs)
122.96
170.74
207.14
233.43
263.43

CHART-6 CROP LOAN ISSUE DETAILS

Source: Audit report of the PACCS

There are three types of Crop loans issuing to the farmers/ member of the society.
They are Kishan credit card and Jewel loan (Agri) for the Individual members and Joint
Liability group loan for a group which having 10-12 members.
Table 7 Kishan Credit Card (KCC)

32

Year

No

Out

2008-09
2009-10
2010-11
2011-12
2012-13

246
247
236
220
218

standing
66.82
72.53
71.19
72.28
74.36

CHART 7 Kishan Credit Card (KCC)

Source: Audit report of the PACCS

Table 8 Joint Liability Group (JLG)

Year
2008-09
2009-10
2010-11
2011-12
2012-13

33

No

Out

50
70
89
120
140

standing
8.34
14.35
20.14
29.45
21.70

CHART 8 Joint Liability Group(JLG)

Source: Audit report of the PACCS

Table 9 Jewel Loan (Agri)

Year
2008-09
2009-10
2010-11
2011-12
2012-13

34

No

Out

121
220
282
276
322

standing
47.80
83.86
115.81
131.70
167.38

CHART 9 Jewel Loan (Agri)

Source: Audit report of the PACCS

b) JEWEL LOAN
Jewel loan is issued by the society on the pledge of gold jewels by the borrowers. No
one is eligible to get jewel loan unless they enroll themselves as an associate member.
The jewel loan is given for the following two purposes.
o Agricultural purpose No Interest upto the loan due date. JL (Agri)
o

Non Agricultural purpose Interest charged at rate of 14.5% per year.

35

Table-10 Jewel loan issue particulars

Years
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

No

Amount

5185
5493
5357
5752
5848

(in lakhs)
676.88
917.82
1117.83
1598.58
1870.46

Chart-10 Jewel loan issue particulars

(2) MEDIUM TERM LOAN

The Medium term loans are given for the purpose of Agri allied activities and
purchase of farm implements purpose. The period of loan is 3-5 years.

Table 11 MT LOAN OUT STANDING

36

Type of

2008-2009

2009-2010

2010-2011

2011-2012

2012-013

Loans
MT (Nor)
Consume

No
64
3

Amt
17.75
0.27

No
62
--

Amt
20.11
--

No
79
--

Amt
26.06
--

No
77
--

Amt
25.71
--

No
88
--

Amt
23.58
---

r
NFS
SHG
MICRO

70
13
47

72.61
10.50
1.54

59
10
29

66.28
10.34
1.16

52
8
38

55.83
10.15
1.49

35
6
39

46.99
7.95
1.63

63
6
37

26.29
5.14
1.40

CREDIT
KVP/NS

99

21.04

74

18.38

52

17.40

44

11.29

53

8.27

C
Deposit
Total

264
560

77.54
201.25

220
454

58.78
175.05

202
431

81.54
192.47

175
376

101.08
194.65

310
557

106.95
171.63

Chart 11 MT LOAN OUT STANDING

37

(b) Deposits Loan

The deposit loan is issued on pledging of fixed deposit receipts to the society.
The amount sanctioning of loan to the maximum of 85% of the Deposit value. The rate
of interest being charged 2 % more than the deposit rate of interest noted in the deposit
receipt. The period of loan repayment is maximum of the deposit due date.
Table 12 Deposits Loans
year

No of loans

2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

264
220
202
175
310

Loan out
standing
Amount
74.54
58.78
81.54
101.08
106.95

Chart 12 Deposits Loans

(D) SUPPLY OF AGRICULTURAL INPUTS

38

The Primary Agricultural Co-operative Credit Society has been providing crop loans
to the farmers. The loan potation includes a ratio of seeds, pesticites, fertilizer and natural
manures as fixed in the agricultural credit limit with the help of the technical experts and
submits it before the district cooperative bank for approval. The agricultural inputs in cash
and kind required for the subsequent crop season is prepared well in advance and approved
by the District central cooperative bank.

The PACCS is also marketing the manures to the members and to the outsiders. They
are marking bulk purchase of manures and selling to the members and others with service
motive.

Table 13 SALE OF FERTILIZER

Inputs

Fertilizer

2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

( In Lakhs)
47.93
37.18
47.76
61.71
40.06

Chart 13 SALE OF FERTILIZER

39

(E) PUBLIC DISTRIBUTION SYSTEM

Distribution of essential commodities through ration method was first introduced
during Second world war when there was food shortage. It was a near revolution in the
history of public distributions system in the country when the ration shops were the ration
shops were started rough under cooperative in Tamilnadu on 1st October 1987.
The public distribution system aims of the supply of essential goods available in
urban areas should also be made available in rural areas. Public distribution system is
recognized as a permanent feature of the strategy to control prices, reduce fluctuation and
achieve equitable distribution of essential goods such as rice, wheat, sugar, edible oil,
kerosene and palmolion. According to the state policy for every 800-ration cards a retail
outlet is established. As and when the number of cards is increased due the size of family
holdings more shops are created.

G1680 Poonamallee Primary Agricultural Cooperative credit Society doing PDS

activities. There are 10 Full time shops and 4 part time shops total of 14 Shops under the

40

control of the society and total of 8549 numbers of users are family cards. Controlled goods
and non-controlled goods sales are undertaking by the society.

CONTROLLED GOODS

Rice

Sugar

Wheat

Kerosene

Palm Oil

Dhur dhal

Urd dhal

NON-CONTROLLED GOODS

Rava

Maidha

Tea Powder

Salt

Soap

Maligai Items.

Public distribution system has made perfect, since it is not treated merely an activity
of distribution of goods to the people but as a welfare measure and a anti poverty
programmer. The public Distribution system is a essential scheme of Government of Tamil
Nadu. The Primary Agricultural Co-operative Credit Society has been assigned a vital role in
distribution of quality consumer items at competitive are distributed through the PDS outlet
at village level.

Sl. No

Name of the Shop

41

No of Family cards

1.
2.
3.
4.
5.
6
7
8
9
10
11
12
13
14

Gangavalli - I
Gangavalli - II
Gangavalli - III
Anaiyampatty - I
Anaiyampatty - II
Anaiyampatty Pudhur
74 Krishnapuram
Thanneerpandhal
Valasakkal Patty
Ganesapuram
Naduvalur I
Nadavalur II
Pallakkadu
Samathuvapuram
Total

attached
1007
853
694
887
461
376
813
307
693
363
648
609
612
226
8549

TABLE 14 DETAILS OF PDS

Sl.
No

Year

1.
2.
3.
4.
5.

2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

PDS goods
Non. PDS goods
sales (in
sales (in lakhs)
lakhs)
90.90
10.43
118.97
10.99
137.84
11.81
124.02
21.95
110.39
30.51
CHART 14 SALE OF PDS

42

Total
101.33
129.96
149.65
145.97
140.90

Source : Audit Report of G1680 Poonamallee PACCS

BUSINESS PERFORMANCE AND ANALYSIS OF G1680 POONAMALLEE PACCS
(a) WORKING CAPITAL
Working capital consists of owned found and borrowed fund. The owned fund means
share capital and reserves. Borrowed fund means deposits and other borrowings.
TABLE 15 working capitals (in lakhs)
Sl.
No

Year

Share
Capital

Deposits

Borrowing

Reserve
fund

1.
2.
3.
4.
5.

2008-09
2009-10
2010-11
2011-12
2012-13

35.28
37.06
39.25
40.31
45.30

1134.14
1254.58
1567.21
1842.60
1983.45

122.01
170.54
308.04
467.26
339.01

43.58
53.42
57.26
69.64
83.64

Other
reserve
fund
34.35
18.23
17.01
50.92
41.18

working
capital
1369.46
1533.83
1988.77
2470.73
2492.58

CHART 15 working capital position

The above table shows there is and increased trend in all the working capitals in share
capital Deposits acceptance, Borrowings from 2008-09 to 2012-13.
RESERVE FUND

43

The reserve fund is created by the society mainly for the purpose of meeting
unexpected the losses and increasing the maximum power of the society.
Table- 16 DETAILS OF RESERVE FUND
Sl. No
1.
2.
3.
4.
5.

Year
2008-09
2009-10
2010-11
2011-12
2012-13

Reserve fund
43.58
53.42
57.26
69.24
83.64

CHART 16 RESERVE FUND

Source : Audit Report of G1680 Poonamallee PACCS

The above table show that reserve fund from 2008-09 to 2012-13 is constant.

BORROWINGS
Most of the co-operative institutions cannot fulfill their financial needs by their own
capital. The Borrowing power of the PACCS is fixed under the rules of cooperative societies
44

Act and rules. The Primary Agricultural co-operative society borrows from DCCB and
Government. The Society has

borrowed only agricultural credit Short term from the

Chennai District Central Cooperative Banks and not borrowed any funds from Government
or any other agencies.

INVESTMENT
The society invests its surplus funds with CCB. Investment details of the G1680
Poonamallee PACCS is as follows.

Chart- 17 Details of Investment

Sl. No
1.
2.
3.
4.
5.

Year
2008-09
2009-10
2010-11
2011-12
2012-13

Investment
430.00
350.00
585.00
526.00
643.48

Source : Audit Report of G1680 Poonamallee PACCS

From the above table it clears that the investment has been gradually
increasing during the study period.

Chart- 17 INVESTMENT

45

(b) OVER DUES

The due amount, which is not repaid within the stipulated period, is called overdue.
Overdue become a major problem at primary society level. The members of the agricultural
credit societies does not repay the loans, borrowed from the society due to various reasons
such as drought, failure of monsoon, waiver of loans etc.,

TABLE 18

Details of over dues

Sl. No
Year
Over dues
No of Loans
1.
2008-09
105.83
583
2.
2009-10
45.68
283
3.
2010-11
67.96
330
4.
2011-12
36.10
251
5.
2012-13
76.89
382
From the above table it could be seen that the over dues of the society is little high
during 2008-09. But it becomes decreased, Because the collection of dues has effectively
done by the society during the study period.
Chart-18 Over Dues

46

Source: Audit Report of G1680 Poonamallee PACCS

OTHER FUNCTIONS
(c ) PROFIT
The Society has earned Profit for the past 20 years. Continuing and declared dividend
an share at the ratio Maximum of 14% every year.
Sl.No
1
2
3
4
5

Year
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

Profit
12.63
25.75
27.88
46.15
50.15

Dividend
14%
14%
14%
14%
14%

(d) Agro Service Centers

Mechanisation has emerged as a major thrust area of agriculture in recent times
especially in the context of increased shortage of labour during peak agricultural seasons.
However, the small and the marginal farmers are at a disadvantage to avail the benefit of
mechanization because of their small holdings and low resource base. Therefore an initiative
has been taken in the form of 100 selected Primary Agricultural Cooperative Credit Societies

47

putting up Agro Service Centers to provide farm machineries and implements at a reasonable
rentals, so that the farmers in those areas
and the small/marginal farmers in particular can access this facility and improve their farm
production and productivity. These Agro Service Centers will provide the machineries like
mini tractors, power tillers with attachment and rice translators etc. which will help farm
mechanization even in the small and medium sized land holders
G1680 Poonamallee PACCS established agro service centre at a cost of Rs.9.66
lakhs. It provides farm equipments to the farmers at minimum rent . The following list shows
the particulars of the farm equipments and their cost.

Purchase Details
Sl.NO Name of the Equipments
1
Tractor
2
Rotavator
3
Power Tiller
4
Earth Auger
5
Rotary Tiller
6
Power weeder
7
Mist Blower
8
5 tines
9
9 tines
10
Brush Cutter
(With out subsidy)
TOTAL
Income earned from 1.4.2012 to 31.03.2013
Income

- 3.23 (Lakhs)

Expenditure

2.64 (Lakhs)

Net income

0.59 (Lakhs)

48

Cost (Rs)
642325.00
78384.00
90870.00
29080.00
32296.00
12285.00
17750.00
22050.00
26250.00
14850.00
965940.00

CHAPTER 4
FINDINGS AND SUGGESTIONS

49

FINDINGS
From the analysis of previous chapters the following are observed and necessary
suggestions are given below
There is slow decrease in the membership during the study period.
The share capital of the society shows an increasing trend during the study period.
The working capital of the society is increasing year by year, it is mainly depends on
the borrowings and deposits year by year, and also by creation of reserves during the
course of audit.
The amount allocated to the Reserve fund out of its yearly profit is increasing year by
year.
The borrowing of the society is increasing trend during the study period
Over dues of the society is in fluctuation during the study period. Mainly because
collection of over dues loan performance various from year by year
The PDS sale has increased during the study period.
Auditing is done regularly which help in maintain the records properly and knowing
the financial of the PACCS.

50

Suggestions
The Society should take necessary steps for increasing the membership.
The Society also increase its share capital by admitting new members.
It must take necessary steps to reduce its overdue position.
The Society has deputed its employees to various training programs, so as to keep
them to touch with the changing world.
The Society should try computerizing all its operations.(Now computerization under
process)
The public should be motivated by explaining the advantage of cooperatives when
compared to other agencies.
Persons with professional qualification can be employed to bring in higher
productivity.
The society should take strong actions against defaulters.
The society takes necessary steps to provide knowledge about cooperative principles
and habit of savings and thrift to its members.
To identify the genuine members and the loan should be given to them.

51

 Performing good services to the farmers/ members community by way of common

service and Agro Service centres
Providing all Agricultural Implements, Equipments and Machineries services at very
cheaper rate and constantly.
The Society office may be provided with fully Air Condition.

CONCLUSION

From the above study it has been ascertained that the society has made considerable progress
in the fields of deposit mobilization, loan and lending aspects and other activities. Also
functioning on net profit every year past 20 years, declaring 14% of dividend every year on
the member share capital. Hence we can conclude that the overall performance of G1680
Poonamallee Primary agricultural co-operative Credit society during the period of study was
in improving trend.

52

BIBILOGRAPHY

a)

Books

Authors

1.Co-operative Principles problem and practices

- T.N.Hajela

2.Co-operative in india

-B.S.Mathur

b) Website
c) Records
1. The audit report of the society.(2008-09 to 2012-13)
2. By-law of G1680 Poonamallee PACCS.
3. Data from files.

53