Section 63. Disposal of net profits

63. Disposal of net profits.— (1) A multi-State co-operative society shall, out of its net profits in any year, — (a) transfer an amount not less than twenty-five per cent. to the reserve fund; 1[(b) credit annually one per cent. of net profit to co-operative education fund to be maintained by the Central Government in such manner as may be prescribed and the proceeds from such fund shall be used for co-operative education and training through the National Co-operative Union of India and any other agency in such manner as may be determined by the Central Government;] (c) transfer an amount not less than ten per cent. to a reserve fund for meeting unforeseen losses. (2) Subject to such conditions as may be prescribed, the balance of the net profits may be utilised for all or any of the following purposes, namely: — (a) payment of dividend to the members on their paid-up share capital at a rate not exceeding the prescribed limit; (b) constitution of, or contribution to, such special funds including education funds, as may be specified in the bye-laws; (c) donation of amounts not exceeding five per cent. of the net profits for any purpose connected with the development of co-operative movement or charitable purpose as defined in section 2 of the Charitable Endowments Act, 1890 (6 of 1890); (d) payment of ex gratia amount to employees of the multi-State co-operative society to the extent and in the manner specified in the bye-laws. 2 [63A. Establishment of Co-operative Rehabilitation, Reconstruction and Development Fund.— (1) The Central Government shall establish a Fund, to be called the Co-operative Rehabilitation, Reconstruction and Development Fund for revival of sick multi-State co-operative societies as referred to in section 63B and for development purposes in such manner as may be determined by it and there shall be credited to such Fund annually by multi-State co-operative societies which are in profit for the preceding three financial years one crore rupees or one per cent. of the net profits of such multi-State cooperative society, whichever is less. (2) The Central Government shall, by notification, constitute a Committee, consisting of such members as it may deem fit, to administer the Fund, and maintain separate accounts and other relevant records in relation to the Fund in such form as may be specified by the Central Government in consultation with the Comptroller and Auditor-General of India. (3) The Committee shall spend the money out of the Fund for carrying out the objects for which such Fund has been established.