Distribution of cooperative funds restricted: only net profits, computed after specified deductions, may be allocated to members. Prohibits division of a multi State co operative society's funds among members except as net profits. Net profits are calculated by deducting from gross profit specified items-overdue interest, establishment charges, interest on loans and deposits, audit fees, working expenses, employee bonus and equalisation fund, provisions for income tax and approved donations, development and equalisation funds, provision for retirement benefits, and bad debts and losses; interest recovered in the year but accrued earlier may be added. Societies without share capital must treat surplus per their bye laws rather than as net profits.