THE HIMACHAL PRADESH STATE COOPERATIVE MARKETING AND CONSUMERS

THE HIMACHAL PRADESH STATE COOPERATIVE MARKETING AND CONSUMERS’ FEDERATION LTD. www. himfed. com 1

ABOUT THE HIMFED - • The HP State Cooperative Marketing And Consumers’ Federation Ltd. (HIMFED), Shimla was established on 30 th June 1952 and registered under the HP Cooperative Societies Act 1968. Membership AREA OF OPERATION • 917 Cooperative Societies being shareholders of the Federation • The area of operation of the Federation is whole of India, but its membership is restricted only to Himachal Pradesh. 2

ESSENTIAL SUPPLIES DURING COVID-19 Kind of Fertilizers FERTILIZER PETROL/ DIESEL SALE QTY (MT) SALE VALUE (In Rs. ) Urea 46% NPK 12: 32: 16 NPK 15: 15 SSP 16% MOP 60% DAP 18: 46: 0 Calcium Nitrate Plain Calcium Nitrate Boron 2617. 480 1214. 600 247. 350 81. 100 122. 400 12. 500 40. 225 4. 700 15501292. 41 28786020. 00 5243820. 00 903454. 00 2325600. 00 300000. 00 1596530. 25 179239. 20 Grand Total 4340. 355 54835955. 86 PRODUCT SALE QTY (LTR) SALE VALUE (In Rs. ) Petrol 7, 23, 055(Approx) 5, 24, 21, 231. 53 Diesel 7, 53, 234(Approx) 4, 83, 15, 875. 57 Agricultural/Horticultural Tools /Machinery Etc. Sale Value Rs. 2, 31, 67, 292. 89 3

OBJECTIVES OF THE FEDERATION To arrange for the sale of Agricultural produce of the members or that purchased by the Federation to the best advantage. To act as Agent of Co-operative Societies for recovery of production loans given by them to their members. To arrange for transport services. To encourage thrift, self help and co-operation among its members. To rent or own godowns and processing yards to facilitate storage, processing and sale of goods. To process raw material belonging to the members, or purchased by the Federation To act as agent of the Government for the procurement and distributions of agricultural produce and other essential commodities , and To arrange for the grading and packing of agricultural produce of the members or purchased by the Federation. To supply to members, through their local societies or otherwise, manure, seeds and 4 implements etc. required for their farm business, and essential domestic requirements.

OBJECTIVES OF THE FEDERATION To Promote the Establishment of Industries. To promote and establish tourism and hotels under tourism industry. To undertake the purchase/sale and leasing of tools and machinery of all kinds to Govt. and other agencies. To undertake the wholesale and retail business of all types of Liquor. To arrange procurement and distribution of consumers goods to its members and through them or direct to public. To purchase Raw Materials, tools and appliances connected with the industries and for supply to its members. To undertake all other activities calculated to further the objects mentioned above and in the interest of members. To advance loans to members on the security of their produce, raw or processed. HIMFED TO BE COMPLETELY TRANSFORMED BY IT INITIATIVES/ONLINE/ E-OFFICE FOR EFFICIENCY & TRANSPARENT GOVERNANCE. 5

Management & Organization GENERAL BODY ELECTED BOARD OF DIRECTORS CHAIRMAN VICE-CHAIRMAN MANAGING DIRECTOR MARKETING FINANCE ESTABLISHMENT AREA OFFICES UNA SOLAN SHIMLA RAMPUR NAHAN NAGROTA BAGWAN MANDI KULLU HAMIRPUR CHAMBA BILASPUR 6

BUSINESS ACTIVITIES OF THE HIMFED Two-tier fertilizer distribution system The Government has entrusted the work of whole sale fertilizer procurement and distribution to the HIMFED as a State Institutional Agency and has been acting as Nodal Agency since 1981. • HIMFED as wholeseller. • Primary Agricultural Cooperative Societies and Private Depot Holders in the State being suppliers are ensuring timely fertilizer supplies across the State. The State Govt. has also appointed Private dealers for undertaking the retail sale of fertilizers in those areas where Cooperative Societies do not exist. The State Govt. has allowed IFFCO for direct sale of NPK 12: 32: 16 and Urea 46% fertilizers to the extent of 40% of total fertilizers distribution in the State since 2002 which has adversely affected the interest of the Himfed. Presently HIMFED is supplying fertilizer to 2625 PACS and 871 Pvt. Depot holders. The IFFCO is making direct supply of fertilizer to 1032 of its member societies and 4 retail outlets. These societies adopted by the IFFCO are financially sound, easily approachable and are nearer to rail head rake point, and the HIMFED is left with those Societies and Pvt. Depot Holders whose area of operation generally fall in remote and interior regions of the State where overhead cost is substantial. The HIMFED supplies fertilizers viz. Urea 46% , NPK 12: 32: 16 & 15: 15, MOP, SSP, DAP , Ammonium Sulphate and Calcium Nitrate etc. The HIMFED has established 11 Area offices and 83 wholesale / Retail Centres for sale and distribution of fertilizers and following other products/activities : - 7

STIHL Power Tiller, Grass Cutter, Wood Cutter, Power Sprayer and Crop Cutter etc Retail dealership of Steel Authority of India Ltd. (SAIL) in most of the Districts in Himachal Pradesh for supply of steel to the Govt. Departments on FOR basis. Organic Manures, Bio Fertilizers, Horticultural/ Agricultural Tools, Implements, Machines, etc. Retail sale of Indian Oil Corporation products, Tree Spray Oil etc Supply of Tools, Equipments and Consumable items to Farmers. Warehousing by providing storage space to other Govt. departments/ organizations. Sale of Apple Cartons and Trays. 6 Petrol Stations at Shimla, Theog , Sarahan (Sirmour) , Padhar (Mandi) , Dobhi (Kullu) and Chowari (Chamba) with a gross annual turnover of nearly Rs. 45 Crores Nodal Agency for construction & operation of food grain storage godowns for Food Corp. Of India under Pvt. Entrepreneur Guarantee Scheme. 8

The State Govt. has assigned the task of procurement of Apple/Citrus fruits /Mangos in the State from the growers under the Marketing Intervention Scheme (MIS) based on the MIS Policy notified for each year. The Himfed has been accomplishing this task since 1996. In the preceding year, i. e 2019, 27959 MT Apples were procured @ Rs. 8 per Kg at 117 collection centers and its sale was effected at auction center Parwanoo and certain quantity was supplied to the HPMC for processing. The sale rate of the apples under the scheme was fixed as Rs. 3. 50 per kg by the Govt. but the Himfed after best endeavor could sell at an average rate of Rs. 2. 95 per kg thereby facing loss to the tune of Rs 1. 5 Cr. (approx. ). We have requested the Govt. to refund the difference amount for sustenance. The handling charges were allowed @ Rs. 2. 75 per kg. Similarly MIS schemes for Mango and Citrus fruit were also implemented. The collection centers were set up at various locations of District Kangra, Bilaspur, Hamirpur, Solan, Una, Sirmour, Mandi, Kullu. The Himfed is committed to abide by the Govt. directions for such procurement this year also , however , the Govt. is requested to kindly fix the sale price of Apples (MIS) by considering the overhead charges. 9

Procurement of Apples under MIS (MT) Procurement Qty MT Year Claim value (In Lakh) Procure Claim ment Qty value MT ( In Lakh) 2015 -16 15898. 44 1365. 89 2016 -17 7751. 94 704. 73 2017 -18 14732. 95 1434. 92 2018 -19 11849. 07 1214. 53 2019 -20 27959. 36 2292. 06 10

District Wise Area of Operations Sr. No Name of Area Office Area of operation 1. Bilaspur District Bilaspur 2. Chamba 3. 4. Area office wise nos. of wholesale/Retail Centres District wise sale centres 6 Bilaspur 6 District Chamba 5 Hamirpur District Hamirpur 5 Kullu District Kullu and Lahaul Division of Lahaul Spiti District Mandi 4 Kullu 5 9 Mandi 9 District Kangra 9 1 6 2 Kinnaur , Shimla 9 9 Sirmaur 9 5. Mandi 6. Nagrota Bagwan Rampur Bushaihar 1 8. Nahan District Kinnaur Part of Shimla Distt, Kaza Div. of L/Spiti Outer Siraj of Kullu Distt. District Sirmour 9. Shimla District Shimla 16 10. Solan District Solan 6 11. Una District Una 4 Una 11 7. 4

Sale of Chemical Fertilizers (MT) Year Sale Qty MT Value ( In Lakh) 2015 -16 72772 8945. 89 2016 -17 74580 8553. 24 2017 -18 76648 9296. 36 2018 -19 61471 8320. 98 2019 -20 68066 9464. 00 Sale Qty MT Value (In Lakh) 12

Sale of Petroleum Products (Kilo. Litres) Year Sale Qty Kilolitre Value ( In Lakh) 2015 -16 4195. 566 1918. 29 2016 -17 4533. 046 2328. 70 2017 -18 5350. 058 2893. 20 2018 -19 6541. 329 4033. 94 2019 -20 6974. 44 4410. 73 Sale Qty Kilolitre Value ( In Lakh) 13

PDS / Non PDS Items Year Sale Value ( In Lakh) 2015 -16 313. 51 2016 -17 264. 21 2017 -18 503. 50 2018 -19 293. 38 2019 -20 392. 26 14

Manpower Sr. No Name of the Post 1. Managing Director 1 1 0 0 2. General Manager 1 1 0 0 3. Dy. Controller(F&A) 1 1 0 0 4. Sr. Manager 2 1 1 0 5. System Manager(IT) 1 1 0 0 6. Programmer 1 1 7. Superintendent G-II 1 0 1 0 8. Private Secretary 1 0 9. Area Manager 1 0 6 0 10. Accounts Officer 1 0 11. Audit Officer 1 1 0 0 Sanctioned In position Vacancies Filled up on Outsourcing Basis 15

Sr. No Name of the Post Sanctioned In position Vacancies Filled up on Outsourcing Basis 12 Personal Asstt. 1 0 13 Accountants 14 Jr. Auditor 15 JE (Civil) 15 2 1 10 0 0 5 2 1 7 0 1 16 Sr. Asstt 11 10 1 0 17 Marketing Asstt. 17 11 6 1 18 Store Keeper/JMA 19 EDP Asstt. 20 Jr. Draftsman 93 2 1 52 0 1 41 2 0 16 0 0 21 Clerk/Jr. Asstt. 28 7 21 17 22 Jr. Scale Stenographer 23 Steno Typist 24 Peon-cum. Chowkidar 25 Helper 25 Driver 26 Cleaner 1 0 1 39 1 23 0 16 0 6 3 10 5 1 2 5 4 5 2 0 1 248 1 130 0 118 0 56 27 Sweeper Total 16

Assets of the HIMFED 79 • Godowns with the capacity of 41359 MT 1 • Bottling Plant Parwanoo 8 • Office Buildings/ Commercial spaces located in Shimla and other Districts Land Buildings across the State can be valued approx. as Rs. 500 Crores at 17

Proposal to utilise Infrastructure of the HIMFED Out of total storage capacity of 41359. 00 MT, half portion of each Godown mostly remains unutilized during the year. To harness the potential of godowns optimally and to derive economic benefits, Cold Chain Stores based on the infrastructural requirement and potential of the area for commodities like Apples , Stone fruits viz. Plums, Apricots , Cherry, Mangos, Citrus Fruits, Potatoes , Tomatoes , Ginger, Green Peas etc. of the Growers/Farmers have been proposed to be setup. CA stores can be established with the financial assistance of NCDC, New Delhi which also offers subsidy upto 50% for Cold Chain Stores and allied activities. 18

Finance at a Glance SHARE CAPITAL Reserve Fund BORROWINGS • The authorized Share Capital of the Federation is Rs. 15, 00, 000/-( Rupees Fifteen Crores only), which is reserved for the members of Cooperative Societies, Government of Himachal Pradesh and National Cooperative Development Corporation, New Delhi. The paid up share capital of the Federation as on 31/03/2020 is Rs. 601. 11 lakhs. • The reserve and other funds of the Federation on 31 st March 2020 are Rs. 1173. 44 Lakhs • The federation has been sanctioned Cash Credit Limit at the interest rate of 11% on monthly rest for Rs. 6. 00 Crore (Rupees Six Crores Only) from the Kangra Central Cooperative Bank Ltd. , Nagrota Bagwan and Cash Credit Limit of Rs. 7, 00, 000/(Rupees Seven Crores Only) from the Himachal Pradesh State Cooperative Bank Ltd. the Mall Shimla at the interest rate of 11% but has not been utilized the same so far, The NCDC has released Rs. 24. 00 Cr. in the year 2019 as loan @ 12. 50% PA for marketing activities payable in 5 years. 19

SHARE CAPITAL & OTHER FUNDS (as on 31 -03 -2020) In Lakhs Authorized Share Capital 1500. 00 Paid Up Capital 601. 11 Reserve & Other Funds 1173. 44 Fixed Assets 444. 73 Fixed Deposits 1163. 76 Cash-Credit Limits 254. 58 Govt. Loans 3840. 84 Cumulative Losses 2779. 53 20

Area Offices Infrastructure 11 Wholesale Centers 83 Farmers’ Service Centers 4 Godowns/ Warehouses 79 Storage Capacity 41359 (MT) PDS Shops (Shimla Town) 5 Petrol Pumps 6 21

PDS The PDS Shops were being run by the Super Bazaar Cooperative Store until 1994 and were put under liquidation. Its management and staff was assigned to the HIMFED. 26 employees were placed at the disposal of the HIMFED 15 employees have retired and 11 employees are still on the payroll. The HIMFED suffered cumulative losses worth Rs 297 lacs till 31/03/2019 in this venture. The principle employer of these employees is the Liquidator of Super Bazaar Cooperative store (Under Liquidation). The Himfed is operating six petrol pumps allotted by the Govt of India Oil Companies at Chotta Shimla, Chowari(Chamba) , Sarahan (Sirmour), Theog, Padhar(Mandi) and Dobhi (Kullu). The annual turnover of these petrol pumps is around Rs. 50. 00 crores. 22

Turnover/Gross Profit & Loss Year Turnover Gross profit Net Profit / Loss Rs. In Lakhs 2014 -15 13074. 08 621. 98 177. 56 (+) 2015 -16 14563. 80 747. 68 292. 22 (-) 2016 -17 14818. 14 916. 43 112. 37(-) 2017 -18 14553. 38 780. 24 320. 16(-) 2018 -19 13996. 41 726. 15 113. 23(+) 2019 -20 (Tentative) 18726. 37 959. 60 112. 08(+) 23

New Business Proposals Setting up of the CA Stores in the Districts for the storage of farm produce Providing the Horticulture Tools & Machinery and Anti Hail Nets through Himfed to the Farmers of the State on subsidy being provided by the Horticulture Department. Establishment of additional Petrol /Diesel stations at viable locations and C&F of lubricants for entire State. Dealership of Bitumen from the Govt. owned Petroleum companies for supply to the Govt. Departments/ Projects etc. . Subsidized distribution business of insecticide and pesticides carried out by the Horticultures/Agriculture Departments of Himachal Pradesh. Sale of Horticultural/Agricultural implements. Dealing in supply of SAIL TMT Steel/ GP & GC Sheets. LPG Agencies. Setting up of Medicines Retail Shops in the premises of AIIMS – Bilaspur and State Hospitals on the pattern of H. P. State Civil Supply Corporation Ltd. Supply of Stationery items, etc. 24

Tangible Reasons for Cumulative Losses Incurred by the HIMFED Interest on CCL Limits obtained from the Cooperative Banks for the purchase of fertilizers Interest liabilities on inventory due to long period of Storage of Fertilizers in the Godowns of HIMFED Less distribution margins on fertilizers Most of HIMFED’s business is agriculture based which rotates around the climatic conditions Lack of other business activities/diversifications Increase in expenditure on establishment 25

Two Pronged Steps To Make Himfed Economically Viable Short Term • Grant of revolving Fund of Rs 25 Crores by the Govt. for strengthening Fertilizer Business. • No CCL limits shall be required, to help save interest to the tune of about Rs. 3. 5 to 4. 00 Crores annually • A margin of about 3% to 10% can be earned as cash discounts through bargaining with Fertilizer companies and other suppliers. • Setting up of additional Petrol/ Diesel stations • Authorized supplier of Bitumen to the HPPWD, Govt. Departments including the Projects. • C&F of lubricants of Govt. owned Petroleum companies • Setting up of the Cold chain stores. Long Term • Himachal Pradesh is the 1 st State in the country where Cooperative movement was started in Una before independence but could not associate every household comparable to other States. The Himfed can engage experts to initiate ventures for employment generation in Cooperative sector in the state. • The Cottage Industry together with Skill development activities encouraged by the Government can be harnessed which will help not only employment generation, implementation of Government policy effectively but will also strengthened financial health of the organization. 26

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