GUIDANCE NOTE ON FILING OF DETAILS OF UNCLAIMED / UNPAID AMOUNT WITH THE MCA PURSUANT TO THE RECENT NOTIFICATION G.S.R. 352(E) DATED MAY 10, 2012 BY P. SRIRAM DIRECTOR
Sl. No Contents Page Nos. 1 Introduction 2 2 Proviso under the Act IEPF Rules 2012 2 3 Credits to IEPF 3 4 Procedure for Crediting before Amendment : 3 5 Recent Amendment 4 6 Filing of E-Form 5 4 7 Post Process Of Filing Form 5INV 6 8 Other Points to be taken care 8 9 Default in Filing Form 5 INV 9 10 Conclusion 9 1
INTRODUCTION : Investor Education and Protection Fund (IEPF) has been established under Section 205C of the Companies Act, 1956 by way Companies (Amendment) Act, 1999 for promotion of investors awareness and protection of the interests of investors w.e.f. 31 st October1998. The IEPF is administered under the provisions of Section 205C of Companies Act, Investor Education and Protection Fund (awareness and protection of investors) Rules, 2001 notified on 01 st October 2001 and the guidelines issued by the Committee and the Sub Committee. MCA vide recent Notification G.S.R. 352(E) dated 10 th May, 2012 has introduced Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012 which mandates filing of Form 5 INV containing the information of unclaimed and unpaid amounts as referred to in sub section (2) of section 205C of the Companies Act, 1956. PROVISO UNDER THE ACT : Rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012: Every Company (including Non banking Financial Companies and Residuary Non banking Companies) shall, within a period of 90 days after the holding of Annual General Meeting or the date on which it should have been held as per the provisions of section 166 of the Act and every year thereafter till completion of the seven years period, identify the unclaimed amounts as referred to in sub section (2) of section 205C of the Act, separately furnish and upload on its own website as also on the Ministry's website or any other website as may be specified by the Government a statement or information through eform 5 INV, separately for each year, containing following information, namely: (a) the names and last known addresses of the persons entitled to receive the sum; (b) the nature of amount; (c) the amount to which each person is entitled; (d) the due date for transfer into the Investor Education and Protection Fund; and (e) such other information as considered relevant for the purpose; 2
Provided that, for the financial year ended March 31, 2011, the information shall be filed, latest by the July 31, 2012. CREDITS TO IEPF Section 205C (2) of the Companies Act, 1956 specifies the amounts that shall be credited to Investor Education and Protection Fund in the prescribed manner. Amounts that remained unpaid and unclaimed for a period of seven years from the date they became due for payment is credited to the fund. Amounts in the unpaid dividend accounts of the companies the application moneys received by companies for allotment of any securities and due for refund matured deposits with companies matured debentures with companies the interest accrued on the amounts referred to in clauses (i) to (iv grants and donations given to the fund by the Central Government, State Governments, companies or any other institutions for the purposes of the fund; and the interest or other income received out of the investments made from the fund PROCEDURE FOR CREDITING BEFORE AMENDMENT: Any amount required to be credited by the companies to the Fund, as provided in the Act shall be remitted into the concerned specified branches of Punjab National Bank, within a period of thirty days of such amounts becoming due to be credited to the Fund. Every Company shall file with the concerned Registrar of Companies one copy of the Challan referred to in (a) evidencing deposit of the amount to the Fund, a statement in Form 1 duly certified by a Chartered Accountant or a Company Secretary or a Cost Accountant practicing in India or by the statutory auditors of the company. 3
However, it is mandatory that each Company keep a record relating to folio number, Certificate Number etc. in respect of persons to whom the amount of unpaid or unclaimed dividend, application money, matured deposit or debentures, interest accrued or was payable, for a period of three years and the Committee or Sub Committee shall have powers to inspect such records of that period. RECENT AMENDMENT : The Ministry of Corporate Affairs vide notice dated 18th May, 2012 has mandated every company to file e Form 5INV containing the information of unclaimed and unpaid amounts as referred to in sub section (2) of section 205C of the Companies Act, 1956 This information is required to be filed every year within a period of 90 days a.) after the holding of Annual General Meeting (or ) b.) the date on which it should have been held as per the provisions of section 166 of the Act, and every year thereafter till completion of the seven years period. The requisite information as per the above mentioned rules vide Form 5 INV for the financial year ended on 31 st March 2011, should be filed latest by 31st July 2012. An excel sheet containing detailed investor wise details is to be filed separately. FILING OF E FORM 5 : The e form 5 requires the following information : 1. Number of small shareholders of the company : In spite of absence of the definition for Small Share holder here, Small Shareholders for this purpose may be construed as defined under Section 252 of the Companies Act, 1956 which defines Small shareholders means a shareholder holding shares of nominal value of twenty thousand rupees or less in a public company to which this section applies. Hence the Company, to prepare the Form 5 INV should examine the Number of Small Shareholder as on the date of the Annual General Meeting of the Company. 4
2. Number of small depositors of the company : Small Depositor for this purpose is construed as defined under Section 58AA of the Companies Act, 1956 which defines a small depositor means a depositor who has deposited in a financial year a sum not exceeding twenty thousand rupees in a company and includes his successors, nominees and legal representatives. Hence the Company, to prepare the Form 5 INV should examine the Number of Small Depositor as on the date of the Annual General Meeting of the Company. However, this clause applies only to Companies which accept deposits under Section 58A of the Companies Act, 1956. 3. Details of unclaimed and unpaid amounts : A dividend has been declared by a company but has not been paid or claimed within 30 [thirty days] from the date of the declaration, to any shareholder entitled to the payment of the dividend, the company shall, within seven days from the date of expiry of said period of 30 [thirty days], transfer the total amount of dividend which remains unpaid or unclaimed within said period of 30 [thirty days], to a special account to be opened by the company in that behalf in any scheduled bank, to be called Unpaid Dividend Account of... Company Limited/Company (Private) Limited. Any money transferred to the unpaid dividend account of a company in pursuance of this section which remains unpaid or unclaimed for a period of seven years from the date of such transfer shall be transferred by the company to the Investor Education and Protection Fund. Sub Clause 4 of Section 205 A provides that if default is made in transferring the total amount referred above or any part thereof to the unpaid dividend account of the concerned company, the company shall pay, from the date of such default, interest on so much of the amount as has not been transferred to the said account, at the rate of twelve per cent per annum and the interest accruing on such amount shall ensure to the benefit of the members of the company in proportion to the amount remaining unpaid to them. With the above provisions of Section 205 of the Companies Act, 1956, the Company should produce the following details in the Form 5 INV: 1) Amount of Unclaimed and unpaid dividend 2) Amount of application moneys received and due for refund 3) Amount of matured deposits 5
4) Amount of matured debentures 5) Interest accrued on the amounts referred to in clause (a) to (d) above (i) Unpaid dividend (ii) Application money due for refund (iii) Matured deposit with companies (iv) Matured debentures with companies POINTS TO BE NOTED WHILE FILING THE E FORM 5 INV WITH MCA 1. The information to be provided in the e Form 5 INV should be as on the date of AGM. 2. E Form 5 INV shall be duly verified and certified by the statutory auditors of the company or a Chartered Accountant or a Company Secretary or a Cost Accountant practicing in India 3. The e form 5 INV should be filed annually within 90 days from the AGM date. However, for the financial year ended March 31, 2011, companies can file the form up to July 31, 2012. 4. After successful upload of form 5 INV, the Investor wise details of unclaimed and unpaid amounts need to be uploaded on the IEPF portal using the excel template, as detailed below. POST PROCESS OF FILING FORM 5 INV The next process upon filing of Form 5 INV is to upload the excel file on the Investor wise details of unclaimed and unpaid amounts on the IEPF portal The template of the excel sheet is given herewith for your ready reference. http://www.iepf.gov.in/iepf/pdf/investordetailexcel.zip How to read the Excel Template: 1. There are three sheet to the excel template. They are : a. Read Me b. Investor Details c. Error 2. The following process is to be adhered in the Investor Details worksheet : 6
a. Macros should be enabled on the template document b. Upon filling of the CIN of the Company, the pre fill option can be used to generate details of the Company from the MCA Website c. The details of the Investor like First Name, Middle Name, Last Name, Address, Country, State etc d. Once the entire investor details are entered, the Validation process should be done by pressing the validate icon. e. An offline validation process will be initiated and the errors identified shall be displayed in the Error worksheet. f. Upon rectification of the errors displayed, the final excel sheet shall be saved and is ready for uploading. Steps to be followed to upload the excel file containing investor wise details of unclaimed and unpaid amounts during the year Upon filling of necessary details on the Excel template and upon successful validation of the sheet, there involves two stages : Sl.No Stages Time line 1. Uploading of the details of Investors Within 14 days from the date of upload E form 5 2. Confirmation of the details of Investors Within 15 days from the date of upload of E form 5 PROCEDURE FOR UPLOADING THE EXCEL FILE IN IEPF PORTAL: 1. The filled in excel sheet should be uploaded in the Mca portal and the path is MCA Portal >> Investor Services >> IEPF >> IEPF Application >> Upload Investor Details. 7
2. User ID, Password (provided at the time of upload of eform 5 INV) along with SRN of Form 5 INV and CIN. 3. Click on validate button. After the details are validated, upload the excel file containing investor wise details of unclaimed and unpaid amounts 4. Ensure that the correct details are uploaded on the IEPF portal as an excel file once uploaded cannot be deleted. To modify the details, the excel file with the same file name shall have to be uploaded which shall replace the earlier file 5. In case no excel file is uploaded within the prescribed time limit, the filing of Form 5 INV shall be treated as Defective and the form shall be rejected PROCEDURE FOR CONFIRMATION OF EXCEL FILE IN THE PORTAL : 1. Click on Confirm Upload of unclaimed and unpaid amount details. Path for the same is MCA Portal >> Investor Services >> IEPF >> IEPF Application >> Confirm Uploaded Files and the CIN and SRN details shall be provided. 2. On successful confirmation, the details shall be processed and thereafter the Form 5 INV shall be marked as Approved. 3. In case uploaded excel files are not confirmed within the aforesaid time period, then the same will be automatically confirmed by the system. OTHER POINTS TO BE TAKEN CARE: 1. The filing of Form 5 INV shall be treated as complete only after the excel file(s) are uploaded and confirmed. 2. In case the form has been marked as defective, its filing shall be cancelled and shall stand rejected. 8
3. In case of the Form 5 INV stood rejected the company should file the Form 5 INV once again on the IEPF portal. Thereafter the process of uploading and confirming the excel files has to be made. 4. Multiple excel files can be uploaded in respect of Form 5 INV and the total size of all the excel files uploaded in respect of a particular SRN cannot exceed 40 MB. 5. The E form 5 INV does not require for attachment of any document, hence the excel file to be uploaded and confirmed are the sole data. Hence care should be taken that the details entered in the excel sheet is the same as given in the form 5 INV. Any mismatch of data would cause the eform 5 filed, defective and the company has to file the eform afresh. 6. The Company has to maintain the details of Small Shareholders and Small Depositors for the purpose of filing the eform 5 INV as on the date of AGM. DEFAULT IN FILING OF INFORMATION If a company fails to furnish and upload information or furnishes and uploads false information on the website, the company, and every officer of the company who is in default, shall be liable and in such case the provisions of Section 629A of the Companies Act, 1956 shall be applicable. CONCLUSION: From the notification it is clear that this is one of the key initiatives of MCA in the interest of investors and investors can now easily access the data available on the portal with respect to their unclaimed dividend portion though it causes an additional responsibility to the Corporate. Thus, this move is clearly a step towards keeping the stakeholders well informed with respect to the unclaimed dividend lying with the company. Moreover, it will also make the companies more accountable by ensuring such disclosure requirement upon the companies. ******** 9