Insight on IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012.

Introduction

Investor Education and Protection Fund (IEPF) has been established under Section 205C of the Companies Act, 1956 by way of Companies (Amendment) Act, 1999 for promotion of investors’ awareness and protection of the interests of investors.

Various rules such as the Investor Education and Protection Fund (awareness and protection of investors) Rules, 2001 and the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, were made by the Government to supplement the provisions of Section 205C of the Companies Act, 1956.

Applicability

The Central Government has mandated every company through the issue of IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012 to file eform 5INV containing the information of unclaimed and unpaid amounts as referred to in subsection (2) of section 205C of the Companies Act, 1956.

The eform 5INV must be filed every year

• within a period of 90 days after the holding of Annual General Meeting or
• within a period of 90 days from 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.

Excel sheet: An excel sheet has to be uploaded within 14 days of uploading of Form 5INV containing the Investor information. Multiple excel files can be uploaded in respect of a particular Form 5-INV yearwise, if required. All the excel files should be uploaded within the aforesaid time period. Total size of all the excel files uploaded in respect of a particular SRN cannot exceed 40 MB.

The sequential steps to be followed to file statement of Investor wise Unclaimed and Unpaid amounts:

 

1. Install the Pre-requisite Software’s to proceed. To know and install the same click on ‘Prerequisite Software‘ link:
2. Download Form 5 INV.

    

3. Fill the form according to the instructions given in its instruction kit.
4. Upload the filled form on the IEPF portal – http://www.iepf.gov.in/

5. After the Form 5INV is filled and uploaded on the MCA21 portal, you are required to provide the investor wise details of unclaimed and unpaid amount in an excel file. After the Form 5INV is filled and uploaded on the MCA21 portal, challan generated and will provide login details to upload excel sheet which contains the investor wise details of unclaimed and unpaid amount.

6. Download the excel template from the IEPF Portal

    

7. Fill in the excel template with investor-wise detail. Refer the read Me instruction provided in the excel template.
8. Upload the excel file with updated investor-wise details of unclaimed and unpaid amounts lying with the company for a period of 7 years till the date of AGM.
9. After all the details are uploaded confirm upload of unclaimed and unpaid amount details.
10. In case no excel file is uploaded within the prescribed time limit, the filing of Form 5INV shall be treated as Defective and the form shall be rejected.

Funds to be credited in IEPF

1. According to the provisions of Section 205C of the Companies Act, 1956, all amounts received shall be accounted under the following heads of account, which shall thereafter be transferred to the Fund.
   1. Unpaid dividend;
   2. Unpaid application money received from companies for allotment of securities and due for refund;
   3. Unpaid Matured Deposits;
   4. Unpaid matured Debentures;
   5. Interest accrued on the above mentioned amounts;
      • Interest on Unpaid Dividend;
      • Interest on unpaid application money received by Companies for allotment of securities and due for refund;
      • Interest on unpaid matured deposit;
      • Interest on unpaid matured debentures;
2. Grants and donations given to the Fund by the State Governments, Companies or any other Institutions.
3. Interest received by investing the above mentioned funds.

The company should transfer the above mentioned amounts in clause 1 to 5 to the IEPF fund after 7 years from the date they became due for payment.

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 with a fine of Rs. 5000/- and if the contravention continues shall be liable to Rs. 500/- per day as per the provisions of Section 629A of the Companies Act, 1956.

How to transfer the amount

1. Any amount as provided in the Act which is required to be credited by the companies to the IEPF Fund,  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 and the amount so credited shall be accounted for as provided in Section 205C (2) of the companies Act, 1956. In this regard connect to MCA portal and select payment options – miscellaneous payment there enter the details so that challan will be generated then we can make the payment alongwith this challan

2. • The amount shall be tendered by the companies on behalf of the Central Government in such branches of Punjab National Bank along with Challan (in triplicate) and the Bank will return two copies duly stamped to the Company as token of having received the amount.

   • 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. The Company shall fill in the full description and the nature of the amount tendered and its Head of Account.

   • Every Company shall, when affecting a credit to the account of the Fund, will separately furnish to the concerned Registrar of Companies a statement in Form 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. Provided that each Company shall 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 payable, for a period of three years and the Committee or Sub-Committee shall have powers to inspect such records of that period.

Example: Given below is the detailed procedure with fictitious dates for crediting the amounts in IEPF account.

1. “ABC” has declared dividend on 30^th September, 2005 within 5 days the amount should be transferred to a separate bank account and all the amounts which has not been paid or unclaimed by the shareholders within 30 days (i.e., 30^th October, 2005) from the date of declaration of dividend, the company has to transfer all the unclaimed and unpaid dividends to “Un- Dividend Account” within 7 days from 30^th October, 2005 (i.e.,06^th November,2005)

2. After 7 years (ie., on 29^th September, 2012), within 30 days the amount should be transferred to IEPF account i.e., on or before 29^th October, 2012.

3. A Board resolution must be passed containing the details of the amounts to be transferred and containing the details of such investors.

4. The said amounts must be transferred to the concerned branch (i.e., any PNB bank nearest to the registered office of the company) of Punjab National Bank with challan in triplicate as mentioned above or

5. One can make the remit the funds through online using following path
   Pay Miscellaneous Fee → Pay Fee for IEPF → Enter particulars of Payment and Amount → pay either challan or online mode → get SRN.

6. Transfer made through online payment should also be registered in the above mentioned path and SRN for the same must be obtained which will be entered in Form 1.

7. After the remittance of amount in IEPF account the company has to file Form 1 with the digital signature of the Managing Director, Director, Secretary or Manager duly authorised in above mentioned board resolution.

8. The said e-form 1 must also be digitally signed by a practicing CA/ CS/ CMA.

 

Practical points to be considered while entering the date in excel sheet

1. Investor First Name: Mandatory if last name is blank
2. Investor Middle Name: Optional
3. Investor Last Name: Mandatory if first name is blank
4. If Investor name is not known/available, then we can write “NOT AVAILABLE”
5. Investors Father/Husband First Name:Mandatory if last name is blank
6. Investors Father/Husband Middle Name: Optional
7. Investor Father/Husband Last Name: Mandatory if first name is blank
8. If Father/Husband name is not known/available, then we can write “NOT AVAILABLE”
9. Address: Mandatory
10. Country Name: Mandatory
11. State: Mandatory, if country is other than India, then State should be selected as NA (Not Applicable)
12. District: optional, if country is other than India, then District should be selected as NA (Not Applicable)
13. Pin Code: Optional
14. Folio Number: Mandatory
15. Investment Type: Mandatory
16. Amount due: Mandatory
17. Proposed date of transfer to IEPF Account: Mandatory

Application of IEPF fund

• Education programme through Media.
• Organizing Seminars and Symposia.
• Proposals for registration of Voluntary Associations or Institution or other organizations engaged in Investor Education and Protection activities.
• Proposals for projects for Investors’ Education and Protection including research activities and proposals for financing such projects.
• Coordinating with institutions engaged in Investor Education, awareness and protection activities.

 

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