Professional Documents
Culture Documents
INTRODUCTION
MEANING
NON-PROFIT ORGANISATIONS
There are certain institutions whose main aim is not to earn profit. They are
established to provide services and their sole motto is to render services, e.g.,
schools, libraries, sports clubs, hospitals and professionals like, doctors, lawyers,
chartered accountants, company secretaries and co-operative housing societies, etc.
Though the main aim of these bodies is not to earn profit but still they are interested
in knowing whether their current income is more than the current expenses or not.
They are also keen in knowing the financial position of their concern. Co-operative
Societies are not charitable societies. They carry on Economic Activities. The profit is
not the motive but the proper accounts need to be maintained and presented before
the members for their approval in the Annual General Body meeting. The same need
to be properly audited as per the provisions of the Act.
1
DEFINITIONS UNDER MCS ACT:-
1) Co-operative society:-Under section 2(27) of the act, Society means a
co-operative society registered or deemed to be registered under this Act.
Co-operative society is corporate body distinct from its member. Section 167
of co-operative societies A ct state that provisions of companies Act are not
applicable to Co-operatives.
4) Bye-laws:- Under section 2(5) bye-laws registered under this Act and for
the time being in force and includes registered amendments of such bye-
laws. bye-laws of a co-operative society may be be compared with the
articles of a company. The bye-laws cannot be contrary to the provisions of
the co-opreatives societies Act. The bye-laws generally includes the
followings clauses for internal management of co-operatives society-
1. Name and address of society
2. Area of operation
3. The manner in which , and the limits upto which the funds of the
society should be raised.
4. Objects of society
5. Maximum amount of the share capital that may held by a member
6. Terms and qualifications for admission of membership
7. Rights , duites and liabilities of members
8. Maximum loans admissible to a member
9. Disposal of net profit
2
(Rule 8 of Maharashtra State Co-operative Societies Rules, 1961 give the
various details if the items in the bye-laws of the society. Any
amendments , changes or deletion in bye-laws shall have to be approved
by a resolution at special general meeting and also a wirtten approval for
the District Deputy Registrar is necessary. The first bye-laws of the
society are required to be approved by the Registrar, as per Rule No. 9.)
5) Co-operative year:- The Act as fixed 31st day of March as day of bal;ancing
of accounts of the society. However ,any other day can be fixed by the
society for this purpose with the prior approval of the registrar. It means that
st
the co-operative year need not necessarilyber from 1 April to 31st March.
Normally , now-a-days societies follow 31 March as the year-ending to
comform with the Income-tax Act.
A co-operative housing society may be formed for all or any of the following objects-
3
to erect a dwelling-house on land already owned by him; or
to erect a dwelling-house on Crown land leased by him for a term of not less
than 50 years being Crown land within an area approved by the Governor in
Council for the purposes of this Act;
ACCOUNT
4
wherein the left hand side is called the debit side and the right hand side the
credit side. All accounts (except the cash or bank), which are maintained in
cashbook, are maintained in ledger.
ACCOUNTING YEAR
The erotically speaking a business may adopt any period of 12 months as its
accounting year except for first accounting year which may be less or more than a
period of 12 months. Under income tax act however every person is required
(W.E.F 1.4.1989) to adopt a uniform accounting year i.e. financial year,
commencing on 1st April and ending on 31st march next year. Accordingly, since
1993, the co-operative year also has been changed to Financial Year.
As per bye law no 142 and as per standard accounting principles following accounts
books need to be maintained in respect of the financial transaction of the society.
5
c) The personal ledger (member wise monthly collection register)
f) Monthly /quarterly bills raised on the members for outgoings of the society.
g) Receipts of the collection of charges transfer fees and other funds of the society.
h) Bank passbook, check issued with counter files ,pay in slips book of the bank.
6
and get it registered with the Registrar of Co-operative Societies.
6. State Assistance: Both Central and State governments provide all kinds of
help to the societies. Such help may be provided in the form of capital
contribution, loans at low rates of interest, exemption in tax, subsidies in
repayment of loans, etc.
7. Stable Life: A co-operative society has a fairly stable life and it continues to
exist for a long period of time. Its existence is not affected by the death,
insolvency, lunacy or resignation of any of its members.
1. Limited Capital: The amount of capital that a cooperative society can raise
7
from its member is very limited because the membership is generally confined
to a particular section of the society. Again due to low rate of return the
members do not invest more capital. Governments assistance is often
inadequate for most of the co-operative societies.
4. Lack of Co-operation: The co-operative societies are formed with the idea of
mutual co-operation. But it is often seen that there is a lot of friction between
the members because of personality differences, ego clash, etc. The selfish
attitude of members may sometimes bring an end to the society.
8
4.FORMATION OF CO-OPERATIVE HOUSING SOCIETY
9
Condominium
Private Limited Company and
Co-operative Society, (excluding the unrealistic rental housing)
(a) Open Plot Societies- members purchase or take one lease a plot of land
and they construct the building.
(b) Flat Owners Societies- When a builder constructs flats and sells them to Flat
Owners, the Society when formed is called Flat Owners Society
10
Flat means a separate set and self-contained set of premises used or
intended to be used or intended to be used for residence, or office or show-
room, or shop, or go down and includes a garage, or dispensary, or
consulting room, or clinic, or flour mill, the premises forming part of a building
and includes an apartment.
11
3. Information about promoter members of the proposed society in Statement C
(vide Govt. Circular Dt. 2-5-1980).
5. Model Bye-laws.
11. Affidavit on Rs. 20/- Stamp Paper from at least 10 promoter members to the
effect that they are residing in the area of operation of the Society (Proposed),
made before a Competent Authority.
12. Affidavit from the Chief Promoter on Stamp Paper of Rs. 20/- executed before
the Competent Authority in form Y.
13. Certified True Copy of agreement made on Stamp paper and registered
between the builder, promoter and purchasers of flat.
14. Where the promoter members are firms/ companies, a letter of authority from
such firms/companies authorizing the promoter to sign on behalf of
12
firm/company.
15. In case of such proposed societies, names of 60% of the flat holders of the
total number of flats constructed or proposed to be constructed as per the
plan approved, must be included in Statement A to be attached to the
Registration Proposal.
b) Stamp duty:-
Present rates of stamp duty for residential premises in the city of Mumbai are RS.
38,750/- on Rs. 10, 00,000/-. Thereafter it is @ 8% for the additional value. The
rate of stamp duty for shops/Galas/office Premises and Garage even if used for car
parking is 10% in Mumbai Stamp duty has to be paid on the agreement Value or
the market value of the property whichever is higher. Stamp duty has to be paid
13
every time the flat is being sold. Stamp duty has to be paid even if it is a transfer
within family.
c) Registration of Documents:-
The documents have to be registered within a period of fours months from the date
of its execution. The parties can go to the office of the Joint Sub-Registrar
individually /collectively to register the document. If for certain reasons the parties
cannot attend the office of the sub-Registrar within a period of the four months then
in such cases the parties can execute a deed of confirmation and complete the
registration formalities.
d) Stamp paper:-
As per the amendment of section 34 of the Bombay Stamp Act 1958, the stamp
paper should be in the name of one of the parties executing the document.
5.AUDIT REPORT
PART-I
INTRODUCTION
14
The statutory audit of Shiv Samrath co-op. housing society Ltd., New Panvel (E)
Taluka- Panvel, dist- Raigad has been completed in the basis of records produced
to me by the disignitories of the society, oral explanation given by them and on my
total knowledge.
The financial statement at the end of the audit period prepared the disignitories of
the society are attached herewith which will give the idea of financial position of the
society.
3. RECTIFICATION REPORT:-
the society should submit the audit rectification report within in three month of
receipt of audit report.
A) LIABILITIES SIDE:-
15
(1) SHARE CAPITAL:-
16
(c) abhyudaya Co-op. bank Rs. 23,570.00
the above balance are correct as per cash book and bank pass book as on 31-
03-2011.
kept dead stock register and record dead stock in dead stock register.
5. AUDIT CLASSIFICATION:-
taking into consideration the financial position and over all working of the
society has been awarded B audit class for financial year 01 st april 2009 to
31st march 2011.
6. ACKNOWLEGEMENT:-
17
we are thankful to the members of managing committee for their co-operative
during the audit.
PART-II
18
2) Monthly meeting of committee and annual general body should be conducted
as per the laws, with prior agenda to each member. Minutes of general body
meeting and committee meeting should be recorded in register (two separate
register).
3) Collect registered agreement from all members of society and take building cost
those units in balance-sheet.
6) Close the saving account of chief promoter Raigad district central co-op. bank
Ltd, New Panvel
19
(chief promoter)
Electric bill 950
Bonus 2200
Member contribution 178995 Meeting 2292
Water, shed & color 168930 Bank charge 211
Transfer premium 30000 Crack filling, shed & coloring 293700
Bank interest 3288 Flooring work 7000
Fix deposit 80000
Salary 24200
Festival & pooja exp 12548
Plastic tank 15250
Bonus 2200
20
Bank interest 3288 Meeting 2292
Bank charge 211
Crack filling, shed & coloring 293700
Flooring work 7000
Plastic tank 15250
Salary 24200
Festival & pooja exp 12548
Depreciation(dead stock) 2573
21
Income & expenditure A/C Fixed assets
Surplus balance 74571.50 Dead stock
12864
22
Festival & pooja exp 16241
insurance 4838
Bonus 1250
Meeting 849
Bank charge 40
Salary 32200
23
Depreciation(dead stock) 2318
24
Income & expenditure A/C Fixed assets
Surplus balance 140062.50 Dead stock
12864
(+)purchase in Yr.
1300
(+) surplus in Yr. 5726.00 145788
(-) depreciation 2318 9273
AUDIT REPORT
(Maharashtra state co.operative act 1960 section no. 81(5-B) & rules 69)
I have examined the attached balance sheet as 31 st march 2010, 31st march 2011
and the income & expenditure account for financial year 01-04-09 to 31-03-2011 of
the Shiv Samrath co-op. housing society Ltd., New Panvel (E) and report that:-
1. We have obtained all the information and explanation which the best of my
knowledge and belief were necessary for the purpose of our audit.
2. In our opinion, proper book of accounts as required under the M.C.S Act,
rules and Bye Laws of the society has been kept by the society.
3. In our opinion and the best of our information and according to the
explanation given to us.
a) the accounts subject to and read with the statement of general remarks
there on stated in PART-I and PART-II attached here with gives information
required under the Maharashtra Co-operative societies Act and present true
25
and fair view of financial transaction of the society.
b) the balance sheet and income and expenditure account are in agreement
with the books of account and the said balance sheet gives true and fair view
of state of affairs of the society as on 31st march 2010 and 31st march 2011
and the income and expenditure accounts gives true and fair view of the
surplus/deficit for the period ended on that dates.
Liabilities
Paid up share capital 4250 4500 250 5.88
Member contribution -- -- - -
ASSETS
Closing cash/bank balance 6021 9683 3662 60.82
26
Investment & deposit
Fixed deposit 80000 130000 50000 62.5
Sinking fund F.D. - 4000 4000 100
Comment-
27
7.CONLUSION
I conclude based upon the data in my project I have learned what is cooperative
housing society and there are many advantages and disadvantages in cooperative
housing society. Though the main aim of these cooperative housing society is not to
earn profit but still they are interested in knowing whether their current income is
more than the current expenses or not. They are also keen in knowing the financial
position of their concern. Co-operative Societies are not charitable societies. They
carry on Economic Activities. The profit is not the motive but the proper accounts
need to be maintained and presented before the members for their approval in the
Annual General Body meeting.
While doing this project I learn how to register the cooperative housing society, step
involve while registering a society. While studying the auditing report of two year
2010 and 2011 and making project on a Shiv Samrath cooperative housing society
was also a knowledgeable experience for me.
28
8.BIBLIOGRAPHY
sahakarayukta.maharashtra.gov.in/
29