Related to Deposit

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CS Ankur Srivastava

Company Secretary & Compliance Officer

17858 Points Joined November 2008

Under Acceptance of Deposit Rules, 1975 Every company shall before the 30 day of April of each year, deposit or invest, as the case may be, a sum which shall not be less than 15% of the amount of its deposit maturing during the year ending on the 31st day of March next following.

My question is if certain deposit are maturing during the April (i.e. 10 to 15 April) and the Company makes investment or deposit only on 29th -30th April, whether it is required to include that deposit also in computing the 15% of the amount.

I have two options.........

1. It should be included because law is saying for the amount of deposit maturing during the year

2.It should not be included because the intention of the law is to provide the security for the payment of deposits maturing and if any deposit is already paid what is the relevance to provide security for the same. (Also suggested by certain consultants)

In my opinion, it should be included but I am confused...........

Replies (5)

Ankur Garg

Company Secretary and Compliance Officer

114788 Points Joined January 2009

Let me try to solve your question with an example.

Deposit maturing the year ending March 31, 2011.

Last date of investment as per rule 3A=== April 30, 2010.

Minimum investment === 15% of deposits maturing on March 31, 2011.

As per my understanding for the purpose of 15% all the deposits maturing throughout the year from April 01, 2010 to March 31, 2011 should be taken into account excluding the amount already paid in April 2010.

For example:

1. Amount due for payment on April 01, 2010 (throughout the year 2010-11)=== 100000

2. Minimum investment required==== (15%) == Rs. 15,000

3. Date of investment by the company === April 25, 2010.

4. Now if you repay 20,000 on April 15, 2010 then minimum investment would be 12,000.

5. So on the date of point 3 only investment of Rs. 12,000 would be enough.

Ankur Garg

Company Secretary and Compliance Officer

114788 Points Joined January 2009

OTHER OPTIONS

It is advisable to make the investment on time that is on April 1, 2010 to make it simple for account department.

As 15% is the minimum investment there is no harm to continue with the investment of Rs. 15,000 (However only 12,000 are enough).

If you make the excess investment == you may later on withdraw the excess amount invested.

To conclude if you go by the intention of law then relevant date of calculation of minimum investment is the date of April 01, 2010 and due amount of investment is Rs. 15,000 at any point of time in April 2010. So in this way I agreed to your last line.

The answer above is based on my personal understanding.

Waiting for your contrary views.

Best Regards