Last Updated: Tuesday April 17, 2007
ANNEXURE II
ILLUSTRATION OF THE METHODS OF COMPUTATION
(A)
Allocation
of Compulsory Units in the First Year
If the profits of the company during the previous year are Rs. 8 lacs, its contribution to the Fund @ 2˝% shall be Rs. 20,000, i.e., 2,000 units, which shall be divided amongst workers as follows:---
|
(1) |
Number of workers drawing average monthly wages not exceeding Rs. 300. |
= 100 |
|
(2) |
Number of workers drawing wages exceeding Rs. 300 but not exceeding Rs. 600 |
= 40 |
|
(3) |
Number of workers drawing average wages exceeding Rs. 600 but not exceeding Rs. 1,000 |
= 20 |
|
|
Units to be divided on the basis of 100 x 3 + 40 x 2 + 20 + 1. |
= 400 |
Each worker in the first category shall, therefore, get 15 units (2000 x 3/400), in the second category 10 units (2000 x 2/400) and in the third 5 units, i.e., (2000 x 1/400) = 5.
(B)
Distribution
of Dividend and Interest Income
Income of the Fund shall be divided in the beginning of the second year as follows:---
|
Say income from interest on Rs. 10,000 |
= 750.00 |
|
and dividend income on balance |
= 1,250.00 |
|
Rs. 10,000 invested in shares. |
= 2,000.00 |
|
Total income Rs. 2,000 or Rs. 1 per unit. |
|
(C)
Net
asset value of the Units in second and subsequent years
The position of net assets as at the beginning of the second year may be say,---
|
Rs. 10,000 loan to the company |
= Rs. 10,000 |
|
Rs. |
= Rs. 14,000 |
|
Total |
= Rs. 24,000 |
|
Unit value = 24,000/2,000 = Rs. 12. |
|
If
the profits of the company in the previous year, i.e., 1st year are Rs. 6 lacs,
its contribution to the Fund @ 5% shall be Rs. 30,000 ÷ 12, i.e., 2,500 units.
(D)
Contributory
Units
If the workers have voluntarily subscribed in the first year an amount of Rs. 4,800, i.e., equivalent to 400 units bringing the total number of additional units available for distribution to 2,900. The contributory workers will get credit for 500 units, i.e., (400 x 5 / 4) = 500 as Contributory Units. The remaining 2,400 units shall be Compulsory Units and distributed as shown at A above.
(E)
Retirement
Benefits
|
Current units value |
x |
(number of units held by the retiring workers – Forfeiture if any, under paragraph 5. |
Special
provisions for undertakings operating for a part of the year
The Companies’
Profits (Workers’ Participation) Act, 1968
The Companies’
Profits (Workers’ Participation) Rules, 1971
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