(1) A society earning profit shall calculate the net profits by deducting from the gross profits for the year, all interest accrued and accruing in accounts which are overdue, establishment charges, interest payable on loans and deposits, audit fee, working expenses including repairs, rent, taxes and depreciation, and after providing for or writing of bad debts and losses not adjusted against any fund created out of profits. A society may, however, add to the net profits for the year, interest accrued in the preceding years, but actually recovered during the year. The net profits thus arrived at, together with the amount of profits brought forward from the previous year, shall be available for appropriation.
(2) A society may appropriate its net profits to the reserve or any other fund, to payment of dividends to members on their shares, to the contribution to the educational fund of the society which may be notified in this behalf by the Registrar, to the payment of bonus on the basis of support received from members and persons who are not members to its business, to payment of honoraria, provident fund to its employees, and towards any other purpose which may be specified in the rules or bye-laws:
Provided that, no part of the profits shall be appropriated except with the approval of the society in its annual general meeting and in conformity with the Act, rules and bye-laws.