Please tell why DRR is made on 30 th April n not on 31st March?

Now we have started Publishing the Useful Comments and Discussion  as received on  WhatsApp Group for Future reference of Teachers and Students. A Query answered by Sh. ABHISHEK SINGH follow:

 Query 1
1. Please tell why DRR is made on 30 th April n not on 31st March?

Query 2
In which type of questions of own debentures we assume DRR n DRI already exist n where we are supposed to create them.

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Reply on Query 1
Dear All
DRR and DRI are two different concepts...
The objective of DRR is to block surplus for redemption perspective.....
To synchronize it, the company should create DRR @25% before the beginning of effective redemption year....
Sequence states DRR should be created first and then DRI...
While DRI is done to make the funds available for payment.
 In accordance to company act and micellaneous rules it should be created by 30th April....
Now, law is silent about the DRI whether created whole or part,  but as per Rule 18 (7)(c)(v) The percentage should not fall below 15% in the year....so to comply law teachers should see that if the redemption is in lumpsum then DRI should be done with value of debentures(ie. In a one go @15%)....but if draw of lots is there it is better to created DRI every year so that the Rule 18 (7)(c)(v) should comply....
Since miscellaneous rule states that DRI 'shall not be less than 15%'....
Nothing prescribed about the maximum amount to be invested in DRI...so the maximum can also be created but since it is new to all teachers and student and we does not assume such a detailed explanation from the students also...it is better to comply with law rather than do research on it......

Reply on Query 2
In regards to purchase of own debentures it is better to see the mark allotted to the question if it is for 3 Mark it is better to shown purchase entry and profit and transfer to profit entry along with this give a one liner note about your assumption that DRR & DRI is existing....
Regards
Abhishek