(1) A society earning profits, shall calculate the net profits by deducting from the gross profits for the year, all interests accrued and accruing in accounts but not realised, establishment charges, interest payable on loans and deposits, audit fees, working expenses including repairs, rent taxes and depreciations and after providing for or writing off 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.
1 Re-numbered and added by Notification No. F. 12(1) Coop/2011 dated 14.9.2011, pub. in Raj.
Gazette E.O. part 4 (x)(I) dated 19.9.2011, with immediate effect.
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Explanation :- Establishment charges shall also include the remuneration, allowances or honoraria paid or to be paid to a member of the society for the services rendered by him to the society.
(2) In addition to the sums referred in sub-rule (1), the following sums shall be deducted by a society from its profits before arriving at its profit for the purposes of distributable profits:
(i) Contribution, if any, to be made to any sinking fund or guarantee fund constituted under the provisions of the Act, these rules or bye-laws of the society for ensuring due fulfilment of guarantee given by the Government in respect of loans raised by the society.
(ii) Provision considered necessary for depreciation in the value of any security bonds or shares held by society as part of its investments.
(iii) Any provision required to be made for the redemption and share capital contributed by Government or by a financial bank.