Section 36B in Andhra Pradesh Co-Operative Societies Rules, 1964
36B. Constitution of administrative and Contingent Fund.
- Every society by a resolution of the General Body shall open a separate account into which an amount not more than 30% of gross profit or 2% of working capital, whichever is less, as per the previous year financial statement, [as prescribed in Form M appended to this rule shall be credited and utilised for administrative and contingent expenditure. Failure to credit requisite amount to this fund, and or any excess expenditure over and above the limits fixed by the Act shall be specifically pointed out by the auditor and excess expenditure if any shall be a charge on the Managing Committee jointly and severally.] [Added by G.O.Ms. No. 223, A&C (Coop. IV), dated 27-6-2005.][Explanation. - The following definition of gross profit shall be adopted for the purpose of implementation of Section 116(c)(1) in respect of different categories of Co-operative Societies.] [Added by G.O.Ms.No. 199, Agriculture & Coop. (Co-Operative IV), dated 30-05-2002.](1)Banking and Credit societies and Societies having predominantly financial nature of business. - In this category of societies, since the main business is of borrowing and lending money and the society gets income mainly by way of interest on lending and the expenditure mainly consist of payment of interest on deposits and borrowings, hence in respect of this category of societies the following definition of gross profit shall be adopted."Gross Profit" means interest received on loans, advances and investments and the income earned on non-credit business minus the interest paid on borrowings and deposits on the basis of actuals as per the financial statement of the previous year."(2)Trading Societies. - In respect of trading societies the "gross profit means value of sales minus cost of purchases".(3)Manufacturing Societies. - In respect of manufacturing societies the gross profit means profit before taxation, provision, depreciation and management cost.(4)Service Societies. - These societies do not generate profit and do not prepare profit and loss account, hence the concept of gross profit will not be applicable to them. The management cost should be within 2% of their working capital.
