Investor Education & Protection Fund- Detailed Analysis

(Applicable Section 123 – Declaration of Dividend)

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• Depreciation and Losses to be set off from the Profits of the company (current year or previous year )before payment of Dividend
• Excluding any amount representing unrealized or notional gains or revaluation of assets from the profits of the company
• Company may transfer profit to Reserves of the company before declaration of Dividend

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• Yes, Dividend can be paid out of the Free Reserves of the company
• Even in case of inadequacy or absence of profits in any financial year subject to the fulfillment of conditions prescribed under the rules

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• Yes, Company may pay interim dividend at any time during the closure of FY till holding of Annual General Meeting.
• Company may declare interim dividend:

√ out of the surplus in the P/L account of the company or

√ out of profit of financial year for which the interim dividend is declared or

√ out of the profit in the financial year till the end of quarter preceding declaration of dividend

In case the company has incurred loss during the current financial year upto the end of quarter immediately preceding the date of declaration of Interim Dividend then the company,

√ shall not declare dividend at a rate higher than the average rate of dividend declared during immediately preceding 3 financial year

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• Yes, the Company needs to open a separate account in a Scheduled Bank.
• Deposit the amount of dividend in the bank account within 5 days of declaration of dividend.

• Dividend payable in cash may be paid through cheque or warrant or in any electronic mode to the shareholders entitled to payment of dividend.

• The company may declared dividend in case of inadequacy of profit after fulfilling the conditions specified under Rule 3 of Companies (Declaration and Payment of Dividend) Rules, 2014 which are as follows:

√ Rate shouldn’t exceed the average rate of dividend paid by company in immediately preceding 3 FY.

• Company:

√ Rupees 1 Lakh

√ Rupees 5000 each day subject to maximum of Rupees 10 Lakhs ( in case of continuing failure)

• Officer in Default:

√ Rupees 25,000

√ Rupees 100 each day subject to maximum of rupees 2 lakhs ( in case of continuing failure)

• Donations or grants given by Central Government
• Amount in Unpaid Dividend Account of the company
• the interest or other income received out of investments made from the Fund
• application money received for allotment and due for refund
• Matured Deposits or Debentures
• Any interest on the points D, E and F
• Sales proceeds of fractional shares arising out of issuance of bonus shares, merger & amalgamation for 7 or more years
• redemption amount of preference shares remaining unpaid or unclaimed for 7 or more years
• all shares as well as the resultant benefits on such shares

• the refund of unclaimed dividends, matured deposits, matured debentures, the application money due for refund & interest thereon;
• promotion of investors’ education, awareness and protection;
• Distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders or depositors who have suffered losses due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement
• Reimbursement of legal expenses incurred in pursuing class action suits u/s 37 and 245 by members, debenture-holders or depositors as may be sanctioned by the Tribunal; and
• Any other purpose incidental thereto, in accordance with such rules as may be prescribed

• The dividend would be transferred to Unpaid Dividend Account as per section 124
• Except the Registered holder of shares authorize in writing for such payment to transferee

• Director if knowingly a part to default:

√ Imprisonment: Extendable to 2 years

• &

√ Fine: not less than 1000 Rs. Everyday till the default continues

• Company liable for 18% of simple interest p.a. till the default continues

• where the dividend could not be paid by reason of the operation of any law;
• where a shareholder has given directions to the company regarding the payment of the dividend and those directions cannot be complied with and the same has been communicated to him;
• where there is a dispute regarding the right to receive the dividend;
• where the dividend has been lawfully adjusted by the company against any sum due to it from the shareholder; or
• where, for any other reason, the failure to pay the dividend or to post the warrant within the period under this section was not due to any default on the part of the company

• Statement of unclaimed/unpaid amount &
• Details of Nodal officer

• Within 60 days of AGM
• Within 15 days of the rule/ any change in nodal officer within 7 days of such change.

• Company delist
• Company wound up
• Any further dividend (shares already transferred)

(Except Company
details)

• The amount to be credited to IEPF account:

1. Amount from Unpaid dividend

2. Application money received but due to be refunded

3. Matured deposit/debenture by the company

4. Interest accrued on 2 and 3

5. Sale proceeds of any issuance of bonus shares or merger & amalgamation

6. Redemption amount of preference shares

7. Grant or donation

• Along with the due date of amount to be credited to fund.
• Financial year to which the amount relates

• Within 60 days of holding of Annual General Meeting
• Within 7 days in case of change in details of nodal officer

• Statement of unclaimed and unpaid amounts
• Appointment of Nodal Officer
• Appointment of Deputy Nodal Officer
• Updation of details of Nodal Officer only
• Updation/Cessation of details of Deputy Nodal Officer only

• Details of Nodal officer (if filing for that purpose)
• Details of Unclaimed and Unpaid amount for Previous 7 years
• Amount of dividend declared on shares
  transferred to IEPF during the current year
• Any other benefit declared on the shares lying IEPF during the year

• Due to the order of court or Tribunal or any statutory authority;
• if the company does not transferthe
  amount/shares;
• then all such details shall be filed by the company/bank.

(Except Company
details)

• Folio no. /DP-Client ID account
• Kind of share
• Nominal Amount of Shares
• Amount of unpaid/unclaimed dividend
• Name and date of Court/Tribunal order
• Financial year to which it relates

(Except Company
details)

• Total Number and Total Nominal Amount of Shares to be transferred to IEPF
• Date of Corporate Action to demat the shares to IEPF Account
• Financial Year to which the amount relates

(Except Company
details)

√ Transferee Bank Name

√ Bank Transaction ID

• Details of amount transferred to bank account of the fund:

√ Dividend

√ Proceeds realized from delisting of shares

√ Proceeds realized from winding up of
company

√ Financial year to which the amount relates