CHAPTER 1

INTRODUCTION OF CO-OPERATIVE SOCIETY

INTRODUCTION
A co-operative society is a voluntary association of individuals having common needs who join
hands for the achievement of common economic interest. Its aim is to serve the interest of the
poorer sections of society through the principle of self-help and mutual help. The main
objective is to provide support to the members. Nobody joins a cooperative society to earn
profit. People come forward as a group, pool their individual resources, utilise them in the best
possible manner, and derive some common benefit out of it.
A Co-operative Society can be formed as per the provisions of the Co-operative Societies Act,
1912. At least ten persons above of 18 years, having the capacity to enter into a contract with
common economic objectives, like farming, weaving, consuming, etc. can form a Co-operative
Society. Cooperative Societies Act is a Central Act. However, Cooperative Societies is a State
Subject (Entry 32 of List II of Seventh Schedule to Constitution, i.e. State List). Though the
Act is still in force, it has been specifically repealed in almost all the States and those States
have their own Cooperative Societies Act. Thus, practically, the Central Act is mainly of
academic interest and as per preamble to the Act, the Act is to facilitate formation of
cooperative societies for the promotion of thrift and self-help among agriculturists, artisans and
persons of limited means.
Co-operative movement in our country shall not only stay but also grow in times to come. In
spite of the drawbacks experienced in the working and administration of the co-operative
societies, they have positively contributed to the growth and development of the national
economy. Promotion of thrift, self-help and mutual aid are the fundamental principles of cooperation. The orientations of commercial organization and co-operative organizations are
basically different. In a commercial organization, earning and maximizing the profits is the sole
motive; whereas in a co-operative organization profit cannot be the sole motive. The prime
objectives, in addition to the three fundamentals of co-operation mentioned above are to make
available the goods and services in required quantity, of better quality and at a reasonable price
1

to its members. It does not mean that a Co-operative Society is a charitable organization. It
should, therefore, conduct itself in a businesslike manner in attaining its objectives efficiently.
Broadly speaking there are three sectors operating in the Union of India.
PUBLIC SECTOR wherein the State i.e. he Union of India and the respective State Government
undertake developments projects which are wholly owned by either the Central Government or the
State Government.
PRIVATE SECTOR which is a sector where private enterprises are permitted in certain fields of
economic activities
CO-OPERATIVE SECTOR which is beautifully blended in between a public sector and the private
sector. It has benefits of both the sectors and disadvantages of neither of them
If object of the society is creation of funds to be lent to its members, all the members must be
residing in the same town, village or group of villages or all members should be of same tribe,
class, caste or occupation, unless Registrar otherwise directs. The provision of minimum 10
members or residing in same town/village etc. is not applicable if a registered society is member
of another society. The Statement of Objects and reasons states as follows:
(a) Cooperative Society can be established for purpose of credit, production or

distribution.

(b) Agricultural credit societies must be with unlimited liability.

(c) Unlimited society is not best form of cooperation for agricultural commodities.
(d) Unlimited society can distribute profits with permission of State Government.

MEANING OF CO-OPERATIVE SOCIETY?

A co-operative society is an autonomous association of persons united voluntarily to meet

their common economic, social and cultural needs and aspirations through a jointly-owned

and democratically-controlled enterprise.

A co-operative society is another means for forming a legal entity to conduct business
besides forming a company. It pools together human resources in the spirit of self and

mutual help with the object of providing services and support to members.333333333
The Co-operative Principles under which a co-operative society operates and carries out its
business are :2

1. Voluntary and open membership.

2. Democratic control, one member one vote.
3. Autonomy and independence.
4. Promoting economic activities.
5. Promoting education and information technology.
6. Co-operation among co-operatives.
7. Concern for the social and ecological environment.

DEFINITION OF CO-OPERATIVE SOCIETY:

The Word 'Co-operation' is derived from the Latin word 'Co-operative' meaning "to work with".
It has been defined in various ways.

Sir Horace Plukelt:

"Co-operation is self-help rendered effective by organisation. It is better farming, better
business, better living".

International Labour Officer:

"An association of persons, usually of limited means, who have voluntarily joined together,
to achieve a common economic end, through the formation of a democratically controlled
business organisation, making equitable contributions to the capital required and accepting a
fair share of risks and benefits of the undertaking."

CHAPTER 2
MISSION,VISION AND OBJECTIVES
VISION:
To make financial services universally available; to promote poverty alleviation through the
development of a strong, sustainable economic infrastructure using financially sound market
mechanisms

MISSION

Linking the promotion of sustainable livelihoods with income-generation activities for the community
Ensure that all members follow the democratic way of making policies and electing representatives

and have an equal voice

Ensure that all profits are controlled democratically by members and for their benefit
Enhance accessibility of financial services

OBJECTIVES

Inculcate good habits of savings in the cooperative members

Focus on poor, low income and deprived people of the community, especially women who

have no accessibility to any financial institutions

Provide opportunities to people to organize services collectively by pooling their resources

without depending upon the government or other agencies

Seek active participation of all members without any kind of social, racial, political, gender

or religious discrimination
Provide education, training and information to develop their members as well as their staff
Enhance womens participation and decision in policy making-processes at all levels
To support the recognition and inclusion of the community sector as a social partner
In order to articulate the interests of those who experience social exclusion and
Inequality.
To promote a global perspective on justice issues and seek to make constructive links
With the sector and development issues in the Third World

HOW IS A CO-OPERATIVE SOCIETY REGULATED?

The operation of co-operative societies is subject to control so as to prevent fraud and to

ensure that every member enjoys equal rights and benefits (equity and equality) in respect of
the business of the society. There are restrictions on profit disposal and rules to sustain
corporate governance.

When a co-operative society is dissolved, the remaining surpluses shall be disposed by the
Registrar at his discretion for any co-operative purpose.

The Co-operative Societies Ordinance, Cap 33 enshrines the Co-operative Principles and the
Director of Agriculture, Fisheries and Conservation is appointed as the Registrar to register
and regulate co-operative societies.
Other than a registered co-operative society, or unless approved by the Chief Executive, no
one shall trade or carry on business under any name or title of which the word 'co-operative'
is part.

HOW TO FORM A CO-OPERATIVE SOCIETY?

To set up a preparatory committee, preferably with 5 members, to pool human and other
resources together.

To convene meetings to discuss the organizational structure of the proposed co-operative

society (e.g. name, object, common bond of its members, share and business scope).

To draft co-operative by-laws by referring to the model by-laws obtainable from the
Registrar and find suitable premises for the society.

To recruit members (at least 10 persons, each over 18 in age).

CHARACTERISTICS OF CO-OPERATIVE SOCIETY

A co-operative society is a special type of business organisation different from other forms of
organisation you have learnt earlier. Let us discuss its characteristics.

Open membership:
The membership of a Co-operative Society is open to all those who have a common
interest. A minimum of ten members are required to form a co-operative society. The
Cooperative societies Act do not specify the maximum number of members for any cooperative society. However, after the formation of the society, the member may specify
the maximum number of members.
Voluntary Association:
Members join the co-operative society voluntarily, that is, by choice. A member can join
the society as and when he likes, continue for as long a she likes, and leave the society at
will.
State control:
To protect the interest of members, co-operative societies are placed under state control
through registration. While getting registered, a society has to sub-mitt details about the
members and the business it is to undertake. It has to maintain books of accounts, which
are to be audited by government auditors.

Sources of Finance:
In a co-operative society capital is contributed by all the members. However, it can easily
raise loans and secure grants from government after its registration.
Democratic Management:
Co-operative societies are managed on democratic lines. The society is managed by a
group known as Board of Directors. The members of the board of directors are the
elected representatives of the society. Each member has a single vote, irrespective of the
number of shares held. For example, in a village credit society the small farmer having
one share has equal voting right as that of a landlord having 20 shares.
Service motive:
Co-operatives are not formed to maximise profit like other forms of business
organisation. The main purpose of a Co-operative Society is to provide service to its
members. For example, in a Consumer Co-operative Store, goods are sold to its members
6

at a reasonable price by retaining a small margin of profit. It also provides better quality
goods to its members and the general public.
Separate Legal Entity:
A Co-operative Society is registered under the Co-operative Societies Act. After
registration a society becomes a separate legal entity, with limited liability of its
members. Death, insolvency or lunacy of a member does not affect the existence
of a society. It can enter into agreements with others and can purchase or sell properties
in its own name.

Distribution of Surplus:
Every co-operative society in addition to providing services to its members also
generates some profit while conducting business. Profits are not earned at the cost of its
members. Profit generated is distributed to its members not on the basis of the shares
held by the members (like the company form of business), but on the basis of members
participation in the business of the society. For example, in a consumer co-operative
store only a small part of the profit is distributed to members as dividend on their shares;
a major part of the profit is paid as purchase bonus to members on the basis of goods
purchased by each member from the society.

Self-help through mutual cooperation:

Co-operative Societies thrive on the principle of mutual help. They are the organisations
of financially weaker sections of society. Co-operative Societies convert the weakness of
members into strength by adopting the principle of self-help through mutual cooperation. It is only by working jointly on the principle of Each for all and all for each;
the members can fight exploitation and secure a place in society.

BENEFITS OF COOPERATIVE SOCIETIES TO THE INDIVIDUAL

The first thing cooperative societies do to individual members is development of savings
culture. It is an age long established fact that nobody can escape poverty without a savings
habit. Anybody that spends everything on consumption is just a step away from poverty and its
various consequences, no matter how rich the person is today. The story of the prodigal son is
instructive in this regard.
7

Savings culture means, irrespective of how much you earn today, and your needs, you put
something aside for tomorrow, or invest, to make additional income. This, however, is a great
challenge for many people, especially for low income people, whose needs are far more than
what they earn. Some of them attempt to save, but because the saving is always within their
reach, they find it difficult not to spend the money. Yet, everybody needs to save and invest to
escape poverty. This is made relatively easy with cooperatives.
As a member of a cooperative, you must contribute regularly, most times monthly. The
contribution is usually deducted from your income, before you even receive it. So, irrespective
of your needs, you save compulsory. Also, because the money is not within easy reach, you
cannot easily access it to spend.
The second thing you benefit from cooperative as an individual is access to loans either in cash
or in the form of goods. As it is difficult for a camel to pass through the eye of a needle, so it is
for the average individual to get loan from the banks in Nigeria. For low income earners, it is
even worse, because they dont have collateral.
Even for those that can meet the conditions for bank loans, the loan may not come promptly as
needed. But as a member of a cooperative, you can access loan promptly. Your contributions
serve as collateral and fellow contributors are accepted as guarantors. Also, the interest rate and
repayment terms are not crushing as that of the banks. This easy access to loans has helped
many people achieve improved welfare.
Corporate power is another benefit of cooperative to an individual. There are some things that a
corporate body can achieve easily, which are near impossible for an individual. For example, if
an individual buys a parcel of land, the land owners can go back and resell the same land to
another person. The individual, especially a low income earner, most of the time loses out
eventually or may have to repurchase the land. But if it was a corporate body, especially a
cooperative, the land owners will not even try such mischief, because from the beginning, a
legal expert and government is involved (remember cooperatives are regulated by
government).
Also, with a co-operative, the individual participates in the running of the business of the
group, and in the process, acquires knowledge and expertise, which can be beneficial in his
8

personal affairs. Compare these benefits to investment in shares or bonds or in a collective

investment scheme. These other investment options do not impact savings culture; neither do
they provide easy access to loans. The individual also does not have the opportunity to enjoy
corporate power. In fact, he may become a victim of corporate power. And because the
individual does not participate in the management of the companies or his investment, he does
not have opportunity to acquire business acumen.

IMPORTANCE OF CO-OPERATIVE SOCIETY

Cooperative societies are important in order to help organize mutual benefits.
Within a cooperative structured society in its original tribal form, jobs are allocated
and resources are exchanged among each other and trading is only done with external
communities. Now cooperative societies are extremely important in the savings market and for
mortgage and professional credit within banks. Cooperative societies are businesses that are set
up by a number of individuals with the intention of gaining mutual benefits from them. These
societies are important to ensure that everyone who has put an investment into them gets a fair
and equal return.

CHAPTER 3
ADVANTAGES AND DISADVANTAGES
OF CO-OPERATIVE SOCIETY
ADVANTAGES OF CO-OPERATIVE SOCIETY:
The following are the main advantages of co-operatives:
Easy formation:
The formation of cooperative society is very simple as compared to the formation of
other form of business organization. Any two adults can come together and join their
hand and form a cooperative society.

The procedure of registration of the society is also very simple and easy. No legal
formalities are required for the formation of cooperative society.

Democratic management:
The management or co-operative is rest on the elected members from among themselves
by forming a committee. Every member gas equal say in making policies of the society.
The one man, one vote principle ensures a democratic management.

Open membership:
The membership of co-operative societies is open to each and every person. Anybody
wishing to enjoy the fruits of a co-operative can join it. Nobody is barred from joining
societies on the basis of economic position, caste, colour or creed. A person can enrolled
as a member any time he/she likes by contributing the minimum capital. He/she can also
withdraw the membership whenever he does not like to continue as a member.

Service motto:
The cooperative societies are formed not for profits but for providing service. The
societies try to promote the interests of the members. A feeling of co-operation is created
among members.

Economical Operation:
The operation carried out by the cooperative society is economical due to the elimination
of middlemen. The societies purchase goods directly from producers and sell them to the
members at cheap at rates. The services of the middlemen are provided by the members
at cheaper rate.

Low management costs:

The management of a co-operative society is in the hands of persons elected by the
shareholders. Members take active interests in the working of the society. Thus, the
recurring and non-recurring costs are low.

Sharing of surplus:
The societies sell goods to its members on a nominal profit to cover up administrative
costs. The surplus earned by the society is spent on the basis of cooperative Act.
10

After meeting the expenses, some portion of the surplus spent for welfare of the
members, some portion kept as reserve and balance is distributed among the members.

Check on business:
The co-operative are stared with service motive while all other forms of business are
launched with a profit motive. When businessmen try to exploit consumers by increasing
prices of their goods, co-operatives supply commodities at reasonable prices.
The co-operatives provide a check on the business of the other forms of enterprises.
Other traders will have to reduce their prices when co-operatives are supplying these
goods at lower prices. Consumers are not at the mercy of selfish businessmen.

Limited liability:
The liability of individual members is limited to the extent of shares purchased capital
contributed by him. Thus members can enjoy the benefits of limited liability. This makes
them free from the tear of utilization of their private property, in case of financial crunch
to the society.

DISADVANTAGES OF COOPERATIVE SOCIETY

Following are the disadvantages of cooperative societies:

Lack of Capital
Generally the members of cooperative societies are related to poor group and they
cannotprovide the capital on large scale. External financial resources are also limited. So,
cooperative society faces the shortage of capital, which isa handicap to their developmen.

Untrained Supervision
The government has sufficient control over the movement of this societies.Thesesocieties
cannot prosper because the staff appointed for supervision is mostly untrained.

Defective Organization
The organizations of cooperative societies are defective and these cannot operate efficien
tly to fulfil their objectives.

Illiterate and Ignorant

In our country, the villagers are generally illiterate and ignorant. So, they are not
Familiar with the basic concept of the cooperative societies.
11

 Lack of Experience
The members of societies have less experience of business. Due to lack of capital,

they

cannot hire the services of experts.

Lack of Discipline
Every member of the cooperative society considers himself as the owner of the
Business. Due to lack of discipline, business suffers a loss.

Lack of Sincere Management

Itis our common observation that the management of society remains in the handsof selfi
shand dishonest persons or members who obtains undue advantage form
Their powers. So, business suffers a loss.

Lack of Profit Incentive

Its not a profit earning institution.Due to absence of profit incentive, the progressof
cooperative society is very poor.

Lack of Secrecy
There is no secrecy in the business of cooperative societies.

Lack of Knowledge
The members of cooperative society do not know the principles and rules of
society. So, they create great problem for society.

Lack of Unity
In the absence of proper education and training, its useless to think about unity.
The lack of unity leads towards the destruction of the business.

No use of New Technology

The cooperative societies cannot use the latest technology in production. As
a result of this, demand and profit remains low.

No Public Confidence
A cooperative society is not bound to publish annual financial statements for the
information of general public. Due to this public shows less confidence in them.

Delay in Decision
The main cause of failure of cooperative societies is delayed in decisions.

12

 Government Control
The cooperative department of the provincial government supervises the work of all,coop
erative societies. The business ofa society is not free like other forms of business, so

it

cannot earn maximum profit.

TYPES OF CO-OPERATIVES SOCIETY:

Although all types of cooperative societies work on the same principle, they differ with
Regard to the nature of activities they perform. Followings are different types of
Co-operative societies that exist in our country

Housing Cooperative:
A housing cooperative is a legal mechanism for ownership of housing where residents either
own shares reflecting their equity in the co-operative's real estate, or have membership and
occupancy rights in a not-for-profit co-operative and they underwrite their housing through
paying subscriptions or rent.

Building Cooperative:
Members of a building cooperative (in Britain known as a self-build housing co-operative) pool
resources to build housing, normally using a high proportion of their own labour. When the
building is finished, each member is the sole owner of a homestead, and the cooperative may be
dissolved.

Retailers' Cooperative:
A retailers' cooperative (known as a secondary or marketing co-operative in some countries) is
an organization which employs economies of scale on behalf of its members to get discounts
from manufacturers and to pool marketing. It is common for locally-owned grocery stores,
hardware stores and pharmacies. In this case the members of the cooperative are businesses
rather than individuals.
13

Utility Cooperative:
A utility cooperative is a public utility that is owned by its customers. It is a type of consumers'
cooperative. In the US, many such cooperatives were formed to provide rural electrical and
telephone service.

Worker Cooperative:
A worker cooperative or producer cooperative is a cooperative that is owned and democratically
controlled by its "worker-owners". There are no outside owners in a "pure" workers' cooperative,
only the workers own shares of the business, though hybrid forms in which consumers,
community members or capitalist investors also own some shares are not uncommon.
Membership is not compulsory for employees, but generally only employees can become
members. However, in India there is a form of workers' cooperative which insists on compulsory
membership for all employees and compulsory employment for all members. That is the form of
the Indian Coffee Houses. This system was advocated by the Indian communist leader A. K.
Gopalan.

Consumers' Cooperative:
A consumers' cooperative is a business owned by its customers. Employees can also generally
become members. Members vote on major decisions, and elect the board of directors from
amongst their own number. A well known example in the United States is the REI (Recreational
Equipment Incorporated) co-op, and in Canada: Mountain Equipment Co-op.
The world's largest consumers' cooperative is the Co-operative Group in the United Kingdom,
which offers a variety of retail and financial services. The UK also has a number of autonomous
consumers' cooperative societies, such as the East of England Co-operative Society and mid
counties Co-operative..

Agricultural Cooperative:
Agricultural cooperatives are widespread in rural areas.
In the United States, there are both marketing and supply cooperatives. Agricultural marketing
cooperatives, some of which are government-sponsored, promote and may actually distribute
14

specific commodities. There are also agricultural supply cooperatives, which provide inputs into
the agricultural process.
In Europe, there are strong agricultural / agribusiness cooperatives, and agricultural cooperative
banks. Most emerging countries are developing agricultural cooperatives.

Co-Operative Credit Society:

These societies are formed to provide financial support to the members. The society accepts
deposits from members and grants them loans at reasonable rates of interest in times of need.
Village Service Co-operative Society and Urban Cooperative Banks are examples of cooperative credit society.

FORMAT OF TRADING AND PROFIT & LOSS ACCOUNT

15

Trading & Profit and Loss A/c for the year ended
Dr
Particulars

Cr.
Amount Amount

Amount Amount Particulars

To opening Stock
To Purchases
To Freight
To Wages
To Gross Profit c/d

By Sales
By Closing Stock

TOTAL
To Salaries
Liabilities
Less: Prepaid
I. Share Capital
To Rent and Taxes
Add:Outstanding
Issued & Paid up
To Postage
II.
Fund And
ToReserve
Depreciation
on Other Funds
Furniture
Reserve Fund
To Other Expenses
Development Fund
Commission
Add:Outstanding
III.Staff
Provident Fund
Travelling Expenses
ToSecured
PrintingLoans
and Stationery
IV.
To Net Profit
V. Unsecured Loans
VI. Deposites

TOTAL

VII. Current Liabilities &

Provisions

TOTAL
Balance Sheet As on 31st March 2011
By Gross Profit
By Interest
Accrude on
Amount Amount
Assests
Investment
I. Cash And Bank
By Other Income
Balances
Admission Fees
Cash In hand

Amount Amount

bank balance
II. Investment
Add: Interest
Accrued
III. Provident Fund
Investment
IV. Loans And
Advances
V. Sundry Debtors
TOTAL
VI. Current Assests
VII. Fixed Assests

VIII.Unclaimed Dividend

VIII.Misc.Expenses and
Losses

IX. Interest due but not Paid

IX. Other Items

X. Other Liabilities

X. Profit and Loss a/c

XI. Profit and Loss A/c

XI. Current Losses

Balance as on 1-4-2010
Current year

16

Total

Total

17

CHAPTER 4
MAHANAGAR CO-OPERATIVE BANK LTD.

COMPANY PROFILE:
This Bank was established by the people from the Ahmednagar Dist. in the name of The
Ahmednagar Sahakari Bank Ltd. on 6th October 1973. Solicitor Shri. G.S.Shelke and his
colleagues were the motivating force behind the establishment of this bank. Mr. G.S.Shelke
became the first Chairman, Lt. Shri .G.A.Thube, the first Vice-Chairman, Shri. .S.S.Bhagat, the
first Secretary. These were the people with deep and abiding ideals, faith, vision, optimism and
entrepreneurial skills. These dedicated men in charge of the Bank had commendable sense of
service and duty imbibed in them. Even today, our honorable founders inspire a sense of awe
and respect in the Bank and amongst the Shareholders of this bank.
The Bank has a humble but a very inspiring beginning. The minimum amount of Rs.10/- per
share was required from prospective members and as such practically, from all over Mumbai,
they collected the initial share capital of Rs.1.36 Lakhs. With this small amount they started
this co-operative activity in Greater Mumbai. The Bank was initially set up to help Mill
workers from Kalachowki and Lalbaug area and Dock workers from Carnac Bunder, Fruit,
Vegetable and Flower vendors from Crawford market, Byculla and Dadar market, Fish vendors
from Colaba and small number of shop keepers and self employed persons.
In the later stages, the Bank has changed its object and decided to cater the needs of common
people from all sectors of the society. To obtain this, the bank has decided to change the name
from The Ahmednagar Sahakari Bank Ltd. to The Mahanagar Co-operative Bank Ltd. The
new name came into force with effect from 21st January, 1998.
Thanks to the sustained and assiduous efforts over 41 years after its inception, the bank had
gained Strong foundation in terms of its membership, resources, assets and profits. During
these period the bank grew from strength to strength. The Bank has grown in stature,
progressed in its social and economic objectives and produced an image of what an ideal bank
18

should be. It is secured A grade classification for all the years from the beginning. Resultantly
the Reserve Bank of India awarded scheduled status to the Bank on 30th January 1998. This
also boosted the confidence of our members, account holders and depositors of the Bank.
At the helm of the Bank affairs, the bank has been consistently fortunate to have a galaxy of
illustrious men. These erudite men with excellent academic qualifications on the Board of
Directors of the Bank have given the Bank the benefit of wisdom, expertise and experience
with its rich heritage and the solid support that the Bank receives on all fronts from all its
constituents. The Bank is confident to make future wisely and consistently. The Bank has been
paying dividend to its share holders at the rate of 15% which is maximum permissible dividend
as per the MCS Act. Bank has a total of 55 Branches and nonstop 12 hours service in 4
Branches. Area of operation covers the all over Maharashtra. The Bank is perhaps the fastest
growing Bank in the Co-operative sector.
Besides this, the Board of Directors have visualized the future increasing competition in this
industry and also the expectations of Reserve Bank of India. For this purpose, the Board of
Directors is considering the introduction of Modern Banking Services such as ATM Centers,
Debit Card, Home Banking, RTGS, NEFT, Demat, etc. With this we are fully geared to face the
cut throat competition in the Banking Industry in the near future.
Innovative Banking is another area of operation that Mahanagar Bank is currently focusing on
for a sustainable long term growth. The Bank has always endeavoured for providing
satisfactory customer service with the help of the latest technology. The Bank has provided
fully computerized services to its valued clients. With a view to meet the challenges of
technologically advanced banking system and to upgrade its existing technology, the bank has
introduced "Total Bank Automation" to provide the facility of inter-branch connectivity for any
time and any branch banking transactions.

BALANCESHEET OF MAHANAGAR CO-OPERATIVE SOCIETY

19

Schedule

As at
31-Mar-13

As at
31-Mar-12

SHARE CAPITAL

6,376

5,328

RESERVE FUND , OTHER FUNDS & RESERVES

38,757

36,144

CAPITAL AND LIABILITIES

PROFIT & LOSS ACCOUNT

DEPOSITS

1
3

BORROWINGS

3,66,572
1,399

PROVISION FOR INTEREST CAPITALISED ON NPA

OVERDUE INTEREST RESERVE ON LOANS AND ADVANCES

3,25,366
-

124

88

4,092

3,342

17

36

394

283

5,977

5,147

162

524

4,23,871

3,76,258

12,422

10,409

BILLS FOR COLLECTION

BEING BILLS RECEIVABLE
(As per Contra)
INTEREST ACCRUED
OTHER LIABILITIES

SETTLEMENT CREDIT ACCOUNT (As per contra)

(Refer Schedule 13, Note no. 3)

TOTAL

CONTINGENT LIABILITIES

11

Significant Accounting Policies

12

Notes to Accounts

13

PROPERTY AND ASSETS

Schedul

As at

As at
20

CASH AND BANK BALANCES

31-Mar-13

31-Mar-12

54,720

63,912

MONEY AT CALL & SHORT NOTICE

3,583

INVESTMENTS

97,771

84,478

ADVANCES

2,40,453

1,96,124

INTEREST RECEIVABLE
a) on Investments and Staff loans

4,219

3,440

4,092

3,342

17

36

b) on Non-Performing Advances
BILLS RECEIVABLE
BEING BILLS FOR COLLECTION
(As per Contra)
FIXED ASSETS

18,721

17,673

OTHER ASSETS

10

3,061

2,809

DEFERRED TAX ASSET (NET)

(Refer Schedule 13, Note no. 14)

655

337

SETTLEMENT DEBIT ACCOUNT (As per contra)

162

524

4,23,871

3,76,258

(Refer Schedule 13, Note no. 3)

TOTAL

21

CHAPTER 5
SOLVED PRACTICAL PROBLEMS

ILLUSTRATION:
From the following trial balance of apna consumers co-operative society ltd as on 31 st
march,2011.Prepare the trading , profit and loss account for the year ended 31 st march 2011 and
balance sheet as on that date in the prescribed N Form. After considering the adjustments
given thereafter:
Trial balance as n 31-03-2011
Particulars
share capital
reserve fund
Creditor
P & L A/c 1-4-2011
Opening stock
Furniture
Container Deposite
Salaries
Debtors
Commission
Rent and Taxes
Postage
and
Telephone
Travelling Expenses
Printing
and
Stationery
Admission fees
Purchases
Freight
Wages
Investment
Sales
Cash in hand
Bank balance
Development Fund
TOTAL

Debit

Credit
33600
6000
4000
17600

39200
12400
3200
30000
6000
8800
6000
800
1800
1400
200
63400
0
12000
4000
60000
76200
0
600
4000
82420

800
82420
22

Adjustments:
1]Closing stock on 31st march,2011 was Rs.44000.
2]Depreciation on furniture @10% p.a.
3]Interest accrued on investment Rs.2000
4]Rent was outstanding Rs.400 and Commission payable was Rs.2000
5]Salary was paid in advance of Rs.800
6]it is proposed to transfer to
building Fund = Rs.12000
Development Fund=Rs.2000
Reserve Fund 25% of current years net profit.

23

Solution:Apna Consumers Co-operative Stores Ltd.

Trading & Profit and Loss A/c for the year ended 31-03-2011
Dr
Particulars

Amount Amount Particulars

To opening Stock
To Purchases
To Freight
To Wages
To Gross Profit c/d

To Salaries
Less: Prepaid
To Rent and Taxes
Add:Outstanding
To Postage
To Depreciation on
Furniture
To Other Expenses
Commission
Add:Outstanding
Travelling Expenses
To Printing and Stationery
To Net Profit

30000
800
6000
400

Cr.
Amount Amount

392000 By Sales
634000 By Closing Stock
12000
4000
116800

762000
44000

806000

806000

By Gross Profit
By Interest Accrude on
29200 Investment
By Other Income
6400 Admission Fees
800

116800
2000
200
200

1240
8800
2000
1800

12600
1400
67360
119000

119000

24

Liabilities
I. Share Capital
Issued & Paid up
II. Reserve Fund And Other
Funds
Reserve Fund
Development Fund

Balance Sheet As on 31st March 2011

Amount Amount Assests
I. Cash And Bank
Balances
33600
Cash In hand
bank balance
6000 II. Investment
800
Add: Interest Accrued
III. Provident Fund
Investment
IV. Loans And Advances
V. Sundry Debtors
VI. Current Assests

III.Staff Provident Fund

IV. Secured Loans
V. Unsecured Loans
VI. Deposites
VII. Current Liabilities &
Provisions
Creditors
Outstanding Rent
Outstanding Commission
VIII.Unclaimed Dividend
IX. Interest due but not Paid
X. Other Liabilities
XI. Profit and Loss A/c
Balance as on 1-4-2010
Current year

4000
400
2000
17600
67360

84960
131760

Stock
VII. Fixed Assests
Furniture
Less: Dep @10%
VIII.Misc.Expenses and
Losses
Advance Salaries
IX. Other Items
Container Deposit
X. Profit and Loss a/c
XI. Current Losses

Amount Amount

600
4000
60000
2000

62000
6000

44000
12400
1240

11160

800
3200
131760

25

Memorandum Profit And Loss Appropriation Account

Particulars
Amount Amount Particulars
Amount Amount
To Building und
12000 By Balance b/d
17600
To Development Fund
2000 By Net Profit
67360
To Reserve Fund(25% of 67360)
16840
To Balanc c/d
54120
84960
84960

Notes:No Actual appropriation out of current years profit can be made without the approval of the
general body. The above Memorandum profit and loss a/c shows only the proposed
appropriations.

CHAPTER 6
26

Suggestion, Recommendation and Findings

Cooperative Society is one of the Largest sector Provides nearly 800 million. India is
Employees more employee than to any other country in the world.
Being Agriculture based Indias most population is situated in rural areas nearly 2/3 of total. So
this gives clear indication of scope of cooperative society also Employment opportunities in
this area.
Much can be done to improve efficiency in cooperative society with proper management
implementation and Government policies. The Corporate culture will also bring sustainable
efficiency and thereby cooperatives can compete with strong private players.
There are a number of agricultural commodities like rice, sugar, fruits, vegetables; spices etc.
that have strong competitive advantage in export markets. Agricultural cooperatives can take
this advantage in foreign market
All co-operative societies should make provision for the education of their members, officers,
and employees and of the general public, in the principles and techniques of Co- operation,
both economic and democratic. To these we have though it important to add a principle of
growth by mutual co-operation among co-operative.

27

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