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INTRODUCTION
MEANING
A co-operative Society is a body corporate with perpetual succession. It can
acquire, hold and dispose off properties, enter into contracts and it can sue and it
can be used. In the state of Maharashtra a society is formed, regulated and
governed and controlled by the Maharashtra Co-operative Societies Act, 1960.
(Section 36 of M.C.S. Act, 1960).All the Co-operative Societies have to maintain the
records as per the Maharashtra Co-operative Societies Act, 1960, M.C.S. Rules,
1961 and the Byelaws of the Society.
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.
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.
2) Working capital:-Under section 2(31) of the Act, Working capital means
funds at the disposal of society inclusive of paid up share capital, funds built
up out of profits and money raised by knowing and other means. The
definition of the term is different as generally working capital means Net
current assets less current liabilities. The audit fees of certain types of
socities such as Urban co-operative banks, salaray earners credit socities
are related to the amount of the working capital.
3) Auditor:- Rule no 69 of co-operative societies rules states that the audit of
co-operative societies shall be conducted either by departmental auditor or
certified auditors. The term certified auditors includes the following:
a) Chartered accountant
b) A person who holds a government diploma in co-operative accounts
and audit.
c) A person who has served as an auditor in the co-operative
department of the state government .
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 byelaws. 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
followings clauses for internal management of co-operatives society1. Name and address of society
2. Area of operation
3. The manner in which , and the limits upto which the funds of the
4.
5.
6.
7.
8.
9.
st
ACCOUNT
An account is formal presentation of the transactions pertaining to an item or
person or an income or expense. An account is generally prepared in T form
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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.
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.
2. Problems in Management: Generally it is seen that co-operative societies do
not function efficiently due to lack of managerial talent. The members or their
elected representatives are not experienced enough to manage the society.
Again, because of limited capital they are not able to get the benefits of
professional management.
3. Lack of Motivation: Every co-operative society is formed to render service to
its members rather than to earn profit. This does not provide enough
motivation to the members to put in their best effort and manage the society
efficiently.
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.
a) Formation of Co-operative Housing Society:Practically every developer has to form a Co-operative Housing Society at one
point of time or another. With the limited amount of options available with regard
to management of the affairs of the building i.e.
Condominium
(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
(c) Tenant Societies- When Landlord forms a Society of tenants, it is called
Tenants Society.
(d) Housing Board Societies- When a Society is formed by Allotted of flats
and building is constructed by the Housing Board Authorities, i.e. Mumbai
Housing and Development Board, then the Society so formed is of the type of
Housing Board Society .
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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
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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
SHIV SAMRATH CO-OPERATIVE HOUSING SOCIETY
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.
1. MEETING:- (01-04-2009 TO 31-032011)
A. First general body meeting: N.A.
B. General meeting date:- -C. Managing committee meetings :- -D. Special general body meeting :- --
3. RECTIFICATION REPORT:the society should submit the audit rectification report within in three month of
receipt of audit report.
4. ANALYSIS OF BALANCE SHEET: - (31-03-2011)
A) LIABILITIES SIDE:15
share paid up share capital:- 4500/(2)RESERVE AND OTHER FUND:reserve fund:- Rs. 60770 amount received as entrance fee,
transfer premium, transfer fee transferred to reserve fund as per
BYE-LAWS.
(3) INCOME & EXPENDITURE A/C:surplus balance as per balance sheet for year ended 31-03-2011
Rs. 1,45,788/-
(B) ASSETS SIDE:(01) CASH & BANK BALANCE:(a) cash in hand Rs. 9,683.00
(b) The R.D.C.C. Bank, New Panvel Br.(C.P) Rs.4,420.00
16
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
PART-II
REMARK AND SUGGESTION
Rs.
PAYMENT
Rs.
1270
206219
20251.50
4420
30713
672
1000
27846
19
(chief promoter)
Member contribution
Water, shed & color
Transfer premium
Bank interest
TOTAL
178995
168930
30000
3288
613373.50
Electric bill
950
Bonus
Meeting
Bank charge
Crack filling, shed & coloring
Flooring work
2200
2292
211
293700
7000
Fix deposit
Salary
Festival & pooja exp
Plastic tank
80000
24200
12548
15250
6021
81583
22767.50
4420
TOTAL
613373.50
Rs.
EXPENDITURE
Rs.
Member contribution
178995
30713
168930
672
Recovery in Yr
168930
Pest control
1000
Water bill
27846
In last Yr.
135433
Electric bill
950
Bonus
2200
20
Bank interest
3288
TOTAL
486646
Meeting
2292
Bank charge
211
293700
Flooring work
7000
Plastic tank
15250
Salary
24200
12548
Depreciation(dead stock)
2573
Surplus balance
65491
TOTAL
486646
Rs.
ASSETS
Rs.
4250
6021
R.D.C.C. bank
81583
Reserve fund
30770
22767.50
30000
60770
4420
--
Member contribution
Fixed deposit
80000
&
advances
21
--
Fixed assets
Dead stock
12864
140062
(-) depreciation
TOTAL
205082.50 TOTAL
2573 10291
205082.50
Rs.
PAYMENT
Rs.
6021
27431
R.D.C.C. bank
81583
4000
22767
Pest control
2500
4420
Water bill
30844
Electric bill
24590
Bonus
1250
Member contribution
139800
Meeting
849
76500
Bank charge
40
4024
Shed work
73900
Bank interest
2403
Dead stock
1300
Member share
250
Fix deposit
50000
100
Salary
32200
22
TOTAL
337868
16241
insurance
4838
9683
R.D.C.C. bank
30212
23570
4420
TOTAL
337868
Rs.
EXPENDITURE
Rs.
Member contribution
139800
27431
76500
insurance
4838
Bank interest
2403
Pest control
2500
4024
Water bill
30844
Electric bill
24590
Bonus
1250
Meeting
849
Bank charge
40
Shed work
73900
Salary
32200
16241
23
TOTAL
222727
Depreciation(dead stock)
2318
Surplus balance
5726
TOTAL
222727
Rs.
ASSETS
Rs.
4500
9683
R.D.C.C. bank
4420
23570
30212
Member contribution
60770
--
130000
4000
&
advances
24
--
Fixed assets
Dead stock
12864
(+)purchase in Yr.
1300
5726.00
145788
(-) depreciation
TOTAL
211158
TOTAL
2318 9273
211158
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
% Of (increase/
Decrease)
Liabilities
Paid up share capital
4250
4500
250
5.88
60770
60770
Member contribution
--
--
--
--
145788
5726
4.08
60755
29.62
205082.50 211158
ASSETS
Closing cash/bank balance 6021
9683
3662
60.82
R.D.C.C. bank
81583
Abhyudaya co-op bank
22767.50
RDCC bank (chief promoter) 4420
4420
23570
30212
(77163)
802.5
25792
(94.58)
3.52
583.52
26
80000
-
130000
4000
50000
4000
62.5
100
--
--
Fixed assets
10291
9273
(1018)
(9.89)
TOTAL ASSETS
205082.50 211158
60755
29.62
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.
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8.BIBLIOGRAPHY
The Maharashtra Co-operative Societies Rules, 1961
Advanced Financial Accounting (M.Com Part-I)
Dr. Varsha M. Ainapure (Manan Prakashan)
sahakarayukta.maharashtra.gov.in/
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