IEPF BNP Associates Company Secretaries www bnpassociates com

IEPF BNP & Associates Company Secretaries www. bnp-associates. com 1

Highlights of IEPF rules as amended • IEPF Authority constituted on 05 th May 2016 • IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended on 28 th Feb 2017 ## • * with effect from 28 th Feb 2017 ## • * Investor can claim refund of funds transferred under Section 205 C of Companies Act 1956 • * Per MCA circular no. 10/2016 dated 07 Sept. 2016: • IEPF-1 instead of Form INV-1 - no additional fees till 31 st May 2017 ### • Filing period 7 th September 2016 31 st may 2017. . #### © 2016 BNP & Associates 2

Highlights of IEPF rules as amended • * Rule 5: Transfer of Funds - as per section 125(2) of the Companies Act, 2013 • - Form IEPF -1 - details of funds transfer, within 30 days of transfer © • - Form IEPF -2 - details of unclaimed amount as on AGM date • file within 90 days of AGM, separately for each year until 7 years completed] • Upload on own website, IEPF website or other website to be specified by Govt. © 2016 BNP & Associates 3

Highlights of IEPF rules as amended • * Rule 6: Transfer of shares - as per section 124(6) of Companies Act, 2013 REVISED • - Form IEPF -3 - details of unpaid dividend and shares on which restraint ordered by Court/Tribunal/Statutory authority • File every year, within 30 days of end of FY • - Form IEPF -4 details of shares transferred to authority • File ‘while effecting transfer’. Within ? ? days. © 2016 BNP & Associates 4

Compliance 5

Immediate Compliance Rule 5 (1), (4), 6(c) • * For Unpaid and unclaimed amount u/s. 125(2)(a) to (n) for 7 years (since 2009 -10), pay to IEPF • as per Rule 5 - Even if 7 years are not consecutive Transfer required • * After payment, file form IEPF-1 within 30 days • * Company shall maintain records of persons in respect of whom amount transferred to IEPF © 2016 BNP & Associates 6

Immediate Compliance - Rule 5(8) • * Rule 5(8) • every company shall identify unclaimed amount of the nature u/s. 125(2), as on date of AGM! • And separately for each year, till completion of 7 years, upload IEPF-2 within 90 days of AGM, on its website as well as of IEPF or other website specified by MCA © 2016 BNP & Associates 7

Immediate Compliance proviso to Rule 6(3)(a) Revised Ø Transfer of Shares Ø In respect of unpaid and unclaimed dividend as on 28 th Feb 2017 during the last seven years Ø Less Court or Tribunal or Statutory Authority restraining transfer of Shares and payment of Dividend Ø Dispute cases, transmission cases, tax enquiry cases etc not covered Ø Simultaneously publish on website + advertisement in English and regional language having wide circulation © 2016 BNP & Associates

Immediate Compliance • Board shall authorise CS or other person to sign necessary documents Rule 6 (2) • -No relevance to clause 5 A of old Listing agreement? ? ? • Furnish to IEPF in – DETAILS OF SHARES TRANSFERRED IEPF-4 ‘while effecting transfer’ means immediately/simultaneously • Company shall preserve details of shareholders whose shares are transferred to IEPF Suspense A/c (in name of Company) © 2016 BNP & Associates 9

Regular compliance - Rule 5 • * Transfer of funds and thereafter file IEPF-1 within 30 days— Rule 5 for matters u/s. 125(2)(a) to (n). . Rule 5 (7) refers to (h) to (m) of the said section…. • * Maintain records of investors whose funds transferred • * Identify unclaimed amount u/s. 125(2) as on AGM date till completion of 7 years and file IEPF-2 separately for each year, within 90 days of AGM - Rule 5(8) © 2016 BNP & Associates 10

Regular Compliance - rule 6 Revised • Shares credited to Demat account to be opened by the IEPF Authority within 30 days of such shares due for transfer • Corporate Action instead of physical transfer or using DIS • in respect of unpaid and unclaimed dividend for 7 consecutive years which would get over in next 3 months • Less: Court/Tribunal/Statutory Authority restraining transfer of shares and payment of dividend • simultaneously, 3 months before such contemplated transfer, publish on own website + advertisement in leading newspaper in English and regional language having wide circulation © 2016 BNP & Associates 11

• Board shall authorise CS or other person to sign necessary documents …. . For eg issue of duplicate certificates, instructing the Depository for Corporate action • Furnish to IEPF details of shares transferred in IEPF-4 - ‘while effecting transfer’ means immediately/simultaneously • Company shall preserve details of shareholders whose shares are transferred to IEPF Suspense A/c (in name of Company) • After transfer of shares, if any bonus, split, consolidation, fraction etc. to be transferred to IEPF Suspense A/c - Rule 6(8) • Any further dividend, after transfer of shares, transfer such amount of dividend on shares so transferred to IEPF - per Rule 6(12) • Voting rights to remain frozen - Rule 6(6) © 2016 BNP & Associates 12

Transfer of Physical shares Ø Physical shares in possession Ø Cancel share certificates and do a credit Corporate action crediting IEPF Authority and move shares in ROM to Depository account… File IEPF 4 Rule 6(5) Physical shares not in possession Ø Where certificates not available. . Follow procedure for issue of Duplicate… Application by person authorized Ø Cancellation remark “ Issued in lieu of share certificate no … for purpose of transfer to IEPF” “duplicate” Ø Credit CA and preserve records…infinity period Ø File IEPF 4 © 2016 BNP & Associates

Transfer of Demat shares Ø Shares held in Demat Form Ø Held in NSDL or CDSL Ø Carry out a corporate action separately for each depository…. Ø Debit the investors account and credit the IEPF Authority account Ø Depository to effect the transfer respectively. Ø PRE SUPPOSES TWO ACCOUNTS BY IEPF AUTHORITY IN THE 2 DEPOSITORIES © 2016 BNP & Associates

Regular Compliance - Rule 6 & 8 • Inform to IEPF Authority in IEPF-3 within 30 days of end of FY about court/tribunal/statutory authority restraining such transfer of shares and payment of dividend • File IEPF-6 within 30 days of end of FY for amount due to be transferred in next FY [Rule 8(1)] • Within 30 days of closure of its accounts for the FY, details of funds due for transfer as per IEPF 6 and actuall amount transferred with reasons for deviation [Rule 8(2)] • First instance would be in 2017 © 2016 BNP & Associates 15

Regular compliance • Ensure while handling claim for shares, transmission process is first completed - Rule 7(8) • one claimant, one consolidated claim in a FY - Rule 7(10) • Verify documents of claimant asap and send verification report to IEPF Authority within 15 days of receipt of claim - in the format to be specified by IEPF Authority along with documents submitted by Claimant. Rule 7 (9) © 2016 BNP & Associates 16

Practical issues 17

Rule 5 - IEPF-2 related issue • IEPF-2: Unpaid and unclaimed as on AGM date ? • IEPF-2: Separately for each year till completion of 7 years • Lot of data and duplicate data with IEPF authority may create confusion if not handled properly • IEPF-2 requires details of small shareholders and small depositors. Term ‘small depositor’ not defined? Cos Act definition Nominal Value 20 k • Handling of shares held in Clearing member Pool a/c © 2016 BNP & Associates 18

IEPF related- issues • Number of Shares to be transferred to the Fund is not clear if the holdings change (due to corporate action or transactions) during the 7 year period being considered for unclaimed and outstanding dividend • whether closure of accounts means approval of financial statements? Rule 8(2) • Where shares and/or amount claimed and paid to claimant by IEPF Authority, same needs to be communicated to Company - for effecting subsequent corporate action. No provision for this. • For how long company to preserve records where shares/funds given back to claimant? © 2016 BNP & Associates 19

Rule 7(8)- transmission related issue • For shares in demat form, transmission is handled by DP. How will company handle this? • What could be the number of accounts to be opened and operated by the IEPF Authority…. • One each in NSDL and CDSL and probably one separately in either of the 2 Depositories for shares held in physical being credited to the IEPF Authority © 2016 BNP & Associates 20

Other issues • Shareholders details would be public and prone to misuse (by publishing on website and newspaper advertisement)…. Companies advised to keep some check and balances…. • SOME GOOD SAMARITANS ON THE PROWL. . • After reading advertisement or upon receipt of intimation, if claim is filed 1/few days before transfer of shares in favour of IEPF Authority - no time would be left with Company/RTA. • What happens to Clause 5 A of LA - shares could not be allotted due to insufficient information - and kept in Demat Suspense A/c by Company © 2016 BNP & Associates 21

PERSON RESPONSIB TYPE OF COMPLIANC LE FORM NAME RULES PURPOSE ES COMPLIANCES Form No. IEPF-1 Rule 5 (4) of Statement of Company General Along with a copy of challan / acknowledgement IEPF amounts (in case of NEFT) as required, furnish a statement credited to containing details of such transfer to the Investor Authority within 30 days of the submission of the Education and challan. Protection Fund Form No. IEPF-2 Rule 5 (8) of Statement of Company Immediate Intimate the Authority within a period of 90 days IEPF unclaimed and after the holding of Annual General Meeting unpaid amounts (AGM) or the date on which AGM should have Form No. IEPF-3 Section 124 (6) Statement of Company of the shares and Companies Act, unclaimed or 2013 and Rule 6 unpaid dividend (3) of IEPF not transferred to the Investor Education and Protection Fund Form No. IEPF-4 Rule 6 (5) of Statement of Company IEPF shares transferred to the Investor Education and Protection Fund been held or in case of extension of AGM and every year thereafter till completion of 7 years period. General If there is any specific order of Court or Tribunal or statutory authority restraining any transfer of such shares and payment of dividend then company shall not transfer such shares to the Fund. Furnish details of such shares and unpaid dividend within 30 days from the end of financial year along with the copy of the order General After the completion of transfer of shares, furnish a statement to the Authority containing details of such transfer.

Form IEPF-5 From IEPF-6 No. Section 125 Application to the Person General Any person claiming shares, unclaimed dividend, (3) of the authority for making matured deposits, matured debentures, application Companies claiming unpaid application money due for refund or interest thereon, sale proceed Act, 2013 and amounts and of fractional shares, redemption proceeds of Rule 7 (1) of shares out of preference shares, etc. or has been transfer to the fund, IEPF Investor make an application along with the feewith the Education and Authority. Protection Fund (IEPF) Any person whose amount referred to in clause (a) to (d) of 205 C (2) of the Companies Act, 1956 transferred to IEPF is also entitled to get refund as per proviso of sub section 3 of section 125 of the Companies Act, 2013 by filing Form No. IEPF-5 with the Authority. No. Rule 8 of IEPF Statement of Company Immediate The Company is required to file Form No. IEPF-6 twice unclaimed or in a year: unpaid amounts to be transferred At the end of the financial year: to the Investor (i) The statement wrt amount due to be transferred Education and to the Fund in the next financial year be intimated Protection Fund within 30 days of the end of financial year. After closure of the accounts for the financial year: (ii) The statement stating reasons of deviations, if any, of the amounts detailed in point no. (i) above and actual amount transferred to the Fund be intimated within 30 days of the closure of its account for the financial year and also in case of extension of AGM.

Websites Rule 5 (8) of Statement or information Company IEPF through Form No. IEPF-2 containing following information: Immediate Within a period of 90 days after the holding of Annual General Meeting (AGM) or the date on which AGM should have been held upload a statement or information through Form No. IEPF-2 on: (i) The names and last known address of the person entitled to receive the same (i) Company’s website (ii) The nature of the amount (ii) Authority’s website (iii) The amount to which each person is entitled (iii) Any other website as may be specified by the Government (iv) The due date for transfer into the IEPF Fund (v) Such other information as may be considered relevant for the purposes. Newspaper Rule 6 (3) of Details of shareholders and Company IEPF shares due for transfer Immediate Inform at the latest available address, the shareholder concern regarding transfer of shares 3 months before the due date of transfer of shares publish a notice in the following: (i) In the leading newspaper in English and regional language having wide circulation (ii) Company’s website

Preserv Rule 6 Preservati Company ation of (4) on of documents General The company duplicate certificates and copy of challan / acknowledgement (in case of NEFT) as per Rule 5 for records.

“I follow the process” –M S Dhoni 26

THANK YOU 10/28/2020 27