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BY Rajveer Singh AVP Legal & Secretary Chambal Fertilisers and Chemicals Ltd.

Transfer of shares to Investor Education and Protection Fund. BY Rajveer Singh AVP Legal & Secretary Chambal Fertilisers and Chemicals Ltd. December 16, 2017. Background: Section 124(6) of the Companies Act, 2013.

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BY Rajveer Singh AVP Legal & Secretary Chambal Fertilisers and Chemicals Ltd.

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  1. Transfer of shares to Investor Education and Protection Fund BY Rajveer Singh AVP Legal & Secretary Chambal Fertilisers and Chemicals Ltd. December 16, 2017

  2. Background: Section 124(6) of the Companies Act, 2013 • As per Standing Committee Report on the Companies Bill, 2011, transfer of shares to Investor Education and Protection Fund (IEPF) is mandated to ensure safety and security in capital market and avoid misuse by unscrupulous persons • Section 124(6) of the Companies Act, 2013 (Act) provides that all shares in respect of which dividend has not been paid or claimed for 7 consecutive years or more shall be transferred to IEPF • In case any dividend is paid or claimed for any year during the said period of 7 consecutive years, the shares shall not be transferred to IEPF • Ministry of Corporate Affairs (“MCA”) enforced Section 124(6) of the Companies Act, 2013 (“the Act”) on September 07, 2016

  3. Notification of IEPF Rules • MCA also notified Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) with effect from September, 07 2016 • IEPF Rules were further amended on February 28, 2017 and October 13, 2017 • As per Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2017 notified on October 13, 2017, where period of seven years provided under sub-section (5) of Section 124 of the Act has been completed or being completed during the period from September 7, 2016 to October 31, 2017, due date of transfer of such shares is October 31, 2017

  4. General provisions for transfer of shares to IEPF • Shares to be credited to DEMAT Account of IEPF Authority within 30 days of such shares becoming due for transfer to IEPF. • Board of Directors shall authorize Company Secretary or any other person to sign the necessary documents for effecting transfer of shares to IEPF. • Company shall inform, at the latest available address, the shareholder concerned regarding transfer of shares three months before the due date of transfer of shares to IEPF. Such details shall also be posted on website of company. • Simultaneously, Company to publish a notice in a leading newspaper in English and regional language having wide circulation.

  5. General provisions for transfer of shares to IEPF • If there is a specific order of Court or Tribunal or statutory Authority restraining any transfer of shares and payment of dividend or where shares are pledged or hypothecated under the provisions of the Depositories Act, 1996, such shares not to be transferred to IEPF • The Company to file Form IEPF-3 within 30 days from the end of financial year, furnishing details of such shares • The transfer of shares by the companies to IEPF shall be deemed to be transmission of shares and the procedure for transmission of shares to be followed while transferring the shares to IEPF

  6. Procedure for transfer of shares DEMAT Shares • Shares to be transferred by way of corporate action through concerned depository Physical Shares • The Company Secretary or the person authorised by the Board to make an application on behalf of the concerned shareholders, to the company, for issue of new share certificates • On receipt of the application, a new share certificate for each such shareholder shall be issued and it shall be stated on the face of the certificate that “Issued in lieu of share certificate No..... for the purpose of transfer to IEPF” and the same be recorded in the register maintained for the purpose • After issue of a new share certificate, the company to inform the depository by way of corporate action to convert the shares into DEMAT form and transfer in favour of the IEPF Authority

  7. Action points for transfer of shares to IEPF • Freezing and preparation of data for transferring the shares to IEPF. Identify the list of shareholders, whose shares are eligible for transfer to IEPF • Check the latest payment status of dividend of such shareholders. In case any dividend including dividend for the current year has been paid, the shares should not be transferred to IEPF • Preparation of separate lists for DEMAT shares, physical shares, shares held in Unpaid Suspense Account and Shares in respect of which trading permission is pending • Check if part of the shares in a folio are liable to be transferred to IEPF and make necessary provisions for the same • Take approval of Board/Stakeholders Relationship Committee (as the case may be) for issue of new share certificates (in case general approval is not obtained)

  8. Action points for transfer of shares to IEPF • After issue of new share certificates, submit corporate action forms with the concerned depositories for transfer of shares to IEPF. • Separate Corporate Actions to be effected for DEMAT shares, physical shares, Inter-depository transfers, shares held in Unpaid Suspense Account. • RTA to upload the Corporate Action files with the concerned depository. • For inter-depository transfer: - the debit corporate action to be effected through the depository where shareholders are holding DEMAT Account. - Confirmation of debit by the first depository to be submitted with the second depository having IEPF Account where shares are proposed to be transferred - On confirmation of debit, credit corporate action to be effected by second depository

  9. Action points for transfer of shares in IEPF • Obtain from the depository, confirmation of completion of corporate actions • Verify through RTA the credit in the DEMAT Account of IEPF Authority • Procedure is different for transfer of shares where trading permission is pending • File Form IEPF 4 with MCA regarding transfer of shares and upload the data of shareholders within 7 days of filing of the form. IEPF Rules prescribe that the Form to be filed while effecting transfer of shares to IEPF • Preserve the details of shareholding of each shareholder whose shares have been credited to the DEMAT Account of IEPF Authority

  10. IEPF Rules – Other Provisions • Company to nominate a Nodal Officer for the purpose of coordination with IEPF Authority. The particulars of nodal officer to be communicated to IEPF Authority within 15 days from October 13, 2017 and also to be displayed on the website of the Company • The voting rights on shares transferred to the IEPF shall remain frozen until the rightful owner claims the shares • Any further dividend received on such shares to be credited to IEPF and a separate ledger account to be maintained for such proceeds • All benefits accruing on such shares i.e. bonus, split shares, fraction shares, etc. except right issue to be credited to DEMAT account of IEPF Authority

  11. Refund to claimants from IEPF • Any person whose shares, unclaimed dividend, etc. has been transferred to IEPF may claim the same from IEPF Authority by submitting an online Form IEPF-5 • Claimant shall send Form IEPF-5 duly signed by him along with requisite documents as enumerated in Form IEPF- 5 to the concerned company at its registered office for verification • Company to send within 15 days a verification report to IEPF Authority in the specified format alongwith the documents submitted by the claimant • After verification of the entitlement of the claimant, IEPF Authority shall issue a refund sanction order with the approval of the Competent Authority and shall credit the shares to the DEMAT account of the claimant

  12. Refund to claimants from IEPF • Application for refund shall be disposed off by the Authority within 60 days from the date of receipt of the verification report from the Company complete in all respects • Delay beyond 60 days to be recorded with reasons and to be communicated to the claimant • A communication to be sent to the claimant and the concerned company by IEPF Authority if the application is incomplete or not approved due to deficiencies • In case of non receipt of documents / rectified documents by IEPF Authority after the expiry of 90 days, IEPF Authority may reject Form IEPF-5 after giving an opportunity to the claimant to furnish response within 30 days

  13. Refund to the Claimant from IEPF • In case of claim by legal heirs, successors, administrator or nominee, the transmission process to be completed by the Company before filing any claim with IEPF Authority. • Claimant to file only one consolidated claim in respect of a Company in a financial year

  14. Thank you

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