PLEASE NOTE THAT THESE CIRCULARS ARE NOT CORRECTLY PROOFREAD WITH ORIGINALS. SO KINDLY MAKE SURE THAT THEY MATCH WITH THE ORIGINAL CIRCULARS/ ORDERS. IF THERE IS ANY FONT PROBLEM PLEASE INSTAL ML-TT-KARTHIKA FONTS. FONT PROBLEMS UPTO A LEVEL CAN BE OVERCOME BY COPYING AND PASTING THE POST IN A WORD DOCUMENT. IF A LETTER NDA IS MISSING, INSTAL MLTTKARTHIKA FONT AND TYPE ALT+0173 FOR NDA.
No.G(3) 23516/70
Office of the Registrar of Co-operative Societies,
Trivandrum. 17th March 1971
CIRCULAR NO.2/1971
Sub: “Working Capital”-Definition of-Clarification –Regarding.
It has been brought to the notice of the Registrar that there is some confusion in the minds of the field staff about the way in which “working capital” of a society is to be arrived at. The following clarifications are issued for their guidance.
Rule 2(k) of the Kerala Co-operative Societies Rules, 1960 clearly gives the definition of “working capital”. Accordingly “working capital” means “such portion of the reserve fund, other funds, paid up share capital, loans and deposits received by a society and debentures issued by a society, as have not been invested in building and other assets.”
Thus “working capital” is the sum total of the statutory reserve fund and other funds and reserves, created by appropriation of net profit by a society as per its bye-laws, paid up share capital, loans and deposits received and debentures issued and deducting therefrom the sum total of such of the portion of the aforesaid reserve fund ,other funds, paid up share capital, loans and deposits received and debentures issued, as are invested in land , buildings and other fixed assets like furniture, fixtures, fittings, vehicles etc.
Appropriation of net profit of a society is done as per its bye-laws. The net profit of a society as per its bye-laws is appropriated towards statutory reserve fund, education fund, other funds, dividend, honorarium, bonus etc. The balance, if any, will be treated as undistributed profit till that is carried to reserve fund or building fund or other funds as the case may be, as specified in the bye-laws of the society.
All items so appropriated out of the net profits of a society do not form part of the working capital. Only the statutory reserve fund and other funds and reserves accumulated year after year through appropriation of yearly net profit of a society, are included in the working capital of the society. It is self evident that dividend, honorarium, bonus etc. appropriated out of net profit are not in the nature of any reserves of funds.
For all purposes including that of audit fee calculation, the definition given in Rule 2(k) of the Kerala Co-operative Societies Rule 1969 has to be followed.
K. Krishnan Nambiar
Registrar of Co-operative Societies
No.ADL (1) 15788/71.
Office of the Registrar of Co-operative Societies
Thiruvananthapuram, 26th May 1971
CIRCULAR No. 14/71
INTRODUCTION OF DOUBLE ENTRY SYSTEM OF BOOK-KEEPING IN CO-OPERATIVE SOCIETIES/BANKS
Double entry is the most scientific system of Book-keeping, and it is the only system in which both the aspects-the receiving aspect and the giving aspect-of every business transaction can be simultaneously recorded in the books of accounts. This is system is both simple and universal in its application. Advantages of keeping books in Double Entry System are many. It is for these reasons that this system is adopted in most of the modern business houses in the Public as well as in the private sectors.
Co-operatives, with all its fundamental principles and ideologies, are essentially business or economic organisations. The growing complexities of co-operative business side by side with the vast new ground that is being covered by the Co-operative movement requires skilled and scientific management for the efficient working of Co-operative Societies, so that they stand on a par with any modern business organisation. Keeping accounts in a scientific manner is an important factor contributing to the efficiency of the organisation. Despite the enormous progress the Co-operative movement has recorded all these years, it is still at the starting line so far as the system of accounting in co-operatives is concerned. That some co-operatives are keeping their accounts in more or less Double Entry System, is, however, not overlooked. This is a draw back on the movement, and this will stand in the way of its healthy growth. So it is high time that co-operative societies adopt double entry system for keeping their books of accounts. But it is not easy to ask each and every society in this State to switch on to this system overnight.
Therefore, to start with, we will introduce this system in the Kerala State Co-operative Bank, the Central Co-operative Banks, and in such of the Primary Cooperative Banks coming under the purview of the Banking Regulation Act as are in a position to adopt this system. Accordingly these institutions will adopt Double Entry System of accounts with effect from 1st July, 1971.
The Kerala State Co-operative Bank will take the lead and initiative in this regards, and do all that is necessary to introduce this system in all the banks. Training classes for theory, and study tours for practice, may be arranged for the personnel of the Co-operative Banks under the auspices of the State Co-operative Bank. It will be advantageous if the trainees get their practical training in small batches for a week or so. For this the State Co-operative Bank may, if necessary, request the assistance of the State Bank of India, State Bank of Travancore and other leading commercial Banks.
The forms now in use for the preparation of “Notes of Audit” by the auditors in respect of the State Co-operative Banks and the Central Co-operative Banks require revision to satisfy the various provisions in the Kerala Co-operative Societies Act and Rules, and to be in keeping with the Double Entry System of accounts. The revised forms have to be got ready before finalising the audit of these banks for the year 1971-72. For this also the Kerala State Co-operative Bank may take the initiative and suggest revised form of audit note.
The Registrar of Co-operative Societies will examine them and prescribe suitable forms.
The receipt of this circular may be acknowledged
K. Krishnan Nambiar
Registrar of Co-operative Societies
No. G (3) 18642/71.
Office of the Registrar of Co-operative Societies
Trivandrum, 8th June 1971
CIRCULAR No. 23/71
Sub: Co-operative Societies-Establishment of Staff Provident Fund and Gratuity-Instructions – Issued.
Ref: Circular No. 7805/70/G3 dated 4-5-1970.
In the Circular cited above the attention of all Cooperative institutions was invited to Sections 61 and 62 of the Kerala Co-operative Societies Act and Clauses 58 and 59 of the Kerala Co-operative Societies Rules and they were advised to establish Provident Fund and Gratuity Fund for the benefit of their employees, after framing detailed regulations. The Deputy Registrars were also instructed to see that such of the societies that have not established such funds, take immediate action to constitute the funds. It has been represented by the Kerala State Co-operative Employees Association that several Societies have not yet taken action to introduce these welfare measures. All the societies that have not yet established such funds are once again requested to constitute the funds without delay. The Deputy Registrars and Circle Officers are also requested to review the position and pull up the societies that have failed to comply with the Statutory Provisions.
K. Krishnan Nambiar
Registrar of Co-operative Societies
Office of the Co-operative Societies
Trivandrum, 14th July 1971
CIRCULAR No. 26/71
Sub: Audit-Audit held up for want of records-Further action-Instructions issued.
It is seen that audit of several societies is held up for want of records and the number of such societies is increasing year after year. The department cannot pass over the issue without any action. There is provision in the Kerala Co-operative Societies Act and Rules, empowering departmental authorities to take appropriate action in all such cases. In this connection the attention of the Deputy Registrar is invited to sections 32, 34 (3), 63(3), 65(3), 66 (4), 71(2)(b) and 94 (4) of the Act and clauses 30 and 33 of the rules.
2. The Deputy Registrars (Audit) should therefore prepare immediately a list of societies whose audit is held up for want of records indicating the periods for which the audit is in arrears and furnish the list to the concerned Deputy Registrar (General) or other District Officers (like District Industries Officer, Assistant Director of Fisheries, Director of Dairy etc., as the case may be) under Copy to this office. They may also suggest to the officers concerned to initiate immediate action under section 65 or other appropriate action and finish with such moribund societies if they cannot be revived. The provision under section 94 (4) may also be invoked wherever necessary. The very reason that records are not available will be a strong point for liquidation of such societies. On receipt of the copy of the list, this office will also take up the matter with the concerned Heads of Departments for further action.
3. It is seen that some Deputy Registrars (Audit) are not giving details of audit left over for want of records in their monthly D.O. Narrative report. They should furnish such details in future and also indicate the action taken by them.
4. On receipt of the list from the Deputy Registrars (Audit) the Deputy Registrars (General) should take immediate action in the cases of societies under their administrative control. They should also indicate the action taken by them in such cases, in their monthly D.O. Narrative reports. If the societies are indebted to the District Co-operative Banks, they may also address the Bank concerned to stop further financial assistance to the society until the accounts are brought up to date and got audited by the departmental auditors.
5. The receipt of this circular should be acknowledged.
K. Krishnan Nambiar
Registrar of Co-operative Societies
No.20050/71/G3.
Office of the Registrar of Co-operative Societies
Thiruvananthapuram, 25th June 1971
CIRCULAR No. 28/71
Sub: Co-operative Societies-Custody of cash, properties etc.-Instructions issued.
The attention of all Co-operative Institutions is invited to clause 47 of the Kerala Co-operative Societies Rules 1969, according to which the paid Secretary/Manager of the society shall be the custodian of cash, securities and all other properties of the society. Subject to the overall control of the President. If there is no Paid Secretary/Manager it shall be the duty of the President to arrange to keep the cash balances and other assets including bonds and securities under safe-custody. He will also act as the Treasurer of the society in cases where there are no specific provisions in the bye-laws to elect or appoint a treasurer. It has come to the notice of the Registrar, that in some societies where there are Paid Secretaries/Managers, the custody of cash balance is still retained by the President or other honorary Treasurers. This is contrary to the provisions of the rules. Even if there is a provision in the bye-laws to the contrary it has no force at all, vide section 110 (2) (ii) of the Act. The Secretary/Manager is found to follow the provisions in the rule in such cases and be alone will be held responsible if any misuse or irregularity in cash balance is noticed. In all such cases the societies may amend the bye-laws suitably, to be in conformity with the provisions of the rules.
The Deputy Registrars and Circle Officers are also requested to issue necessary instructions to the societies in the matter and also see that such societies propose necessary amendments to the bye-laws to be in conformity with Act and Rules.
K. Krishnan Nambiar
Registrar of Co-operative Societies
No.17160/71/G(3)
Office of the Registrar of Co-operative Societies,
Thiruvananthapuram 13th July 1971
CIRCULAR No. 33/71
Sub: Arbitration-Appearance of legal practitioners to represent parties –Instructions issued
It has been represented that some Departmental Officers who are appointed as Arbitrators to decide disputes do not allow the parties to engage legal practitioners to present their cases. According to sub-clause (8) of clause 67 of the Kerala Co-operative Societies Rules in the proceedings before the Registrar or such other person deciding the dispute or the Arbitrator, legal practitioners shall not be entitled, as a matter of right, to appear to represent parties. This does not however mean that legal practitioners should be completely excluded. Though this is entirely within the discretion of the person hearing the dispute, there is no point in denying this privilege to the parties when they specifically request permission to engage Advocates. In the cases of important and complicated references, the services of legal practitioners will be of great help to the Arbitrators in arriving at correct conclusions and to dispose of the references more conveniently and expeditiously. All the departmental officers are therefore informed that normal requests for permission to engage legal practitioners to represent parties in arbitration cases shall not be denied.
(Sd/-)
For Registrar of Co-operative Societies
No.24947/71 G.3.
Office of the Registrar of Co-operative Societies
Trivandrum, 4th August 1971
CIRCULAR No. 37/71
Sub: Co-operative Societies-Employee’s Provident Fund and security deposits-Payment of interest-Instructions issued.
It has come to the notice of the Registrar that some of the Co-operative Societies have provision in their bye-laws to pass on only a portion of the interest accrued on Provident Fund of staff to the contributors of that fund while retaining a portion of the interest as a source of income for the societies. This is a wrong procedure. The employees must be entitled to get credit to their fund to entire interest accrued on their Provident Fund deposits which include the subscriptions made by the employees and the contributions made by the employers. Under clause 58 of the Kerala Co-operative Societies Rules, the Societies have to frame regulations regarding maintenance and utilisation of employees’ Provident Fund and such regulations shall also stipulate the mode of investment of the fund and payment of interest thereon. If the regulations framed by any society provide for paying only a portion of the interest accrued on to deposits to the subscribers concerned, the societies should amend such regulations immediately so as to credit the entire interest to the Fund.
The same principle should apply in respect of the security deposit of employees. The interest accrued on the security deposits should go to those who have furnished the security. The societies should also see that the Provident Fund deposits and security deposits are invested in such a way as to fetch the maximum interest so that the benefit of the enhanced interest may go to the employees.
K.Krishnan Nambiar
Registrar of Co-operative Societies
No.G3/49965/71.
Office of the Registrar of Co-operative Societies
Trivandrum, 22nd December 1971
CIRCULAR No. 63/71
Sub: Office Procedure-Offices of the Circle Officers-Disposal of work in office-Instructions issued.
It is observed that there is no uniformity in the system of work in the offices of the Circle Officers. In some offices the Circle Officer maintains a Personal Register and each Unit Inspector is required to maintain separate Personal Registers while in some other offices only one Personal Register is maintained for the entire Circle Office. With proper co-ordinatioin of the work of the Circle Officer and the Unit Inspectors, the time spent in office routine work can be minimised considerably. Since the Unit Inspectors are essentially meant for field work it will affect their programme if they are required to work in the Circle Office for unduly long periods. It is therefore considered that only one set of Registers (Personal Register, /Periodical Register etc.) need be maintained in the Circle Office, but the Unit Inspectors may help the Circle Office in maintaining the Registers. When any reference requiring the report of the Unit Inspector is issued on when the concerned file is handed over to the Unit Inspector for report necessary entries may be made in the Personal Register or an acknowledgement may be obtained either in the Personal Register itself or in the Local Delivery Book. Such an arrangement will help to eliminate duplication of work. It will also facilitate the easy checking of the different Registers by the Circle Officer.
All the Circle Officers are therefore requested to unify the procedure by following the above instructions, with effect from 1-1-1972.
(Sd/-)
For Registrar of Co-operative Societies
No. 48275/71/G3.
Office of the Registrar of Co-operative Societies
Thiruvananthapuram, 31st December 1971
CIRCULAR No. 65/71
Sub: Kerala Co-operative Tribunal-Hearing of cases-Finishing of Back records and case diaries-Instructions issued.
It has been brought to the notice of the Registrar that difficulties are being experienced by the Tribunal for want of back records of cases called for from the officers of this Department. It is also seen that even after repeated requests made by the Secretary to the Tribunal the records are not supplied and some times the records furnished do not contain all the relevant papers. The original records should naturally contain all relevant records. In the case of an arbitration reference, the original file should contain the Plaint, the list of exhibits, depositions of witnesses, office copy of the Award, case diary etc., Under Rule 67 (b) of the Kerala Co-operative Societies Rules, the arbitrator or other person deciding the dispute has to prepare the case diary. It is informed that very often such case diaries are not seen in the original arbitration case file and even when it is available, the case diaries do not contain full details. The case diaries should invariably indicate date or dates on which the case was taken up for consideration, the action taken on each such date, the persons examined, documents exhibited etc. All the Deputy Registrars and Circle Officers are requested to see that the case records contain all these details. They should also see that the records required by the Tribunal are supplied in time.
(Sd/-)
For Registrar of Co-operative Societies
