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Unclaimed Investment Funds



Unclaimed Investment Funds 
The details of assessment made by the Government regarding quantum of unclaimed investment funds at the end of the financial year 2015-16 can be assessed only after filing of financial statements ending 31.03.2016 by companies with the Registrar of Companies (RoC). In accordance with the provisions of section 137 of the Companies Act, 2013, such financial statement as at 31.3.2016 is required to be filed by company duly adopted at their Annual General Meeting (AGM), with RoC within thirty days of the holding the AGM. Such AGMs have to be held latest by 30th September, 2016 and such financial statements have to be filed by 30th October, 2016. Therefore, this information is not available with the Ministry. 


As per provisions of Section 205A(5) of the Companies Act, 1956, the unpaid dividend accounts of the companies which remain unclaimed/unpaid for a period of 7 years are mandatorily required to be transferred to the Investor Education and Protection Fund (IEPF). Failure to do so will attract penalties as provided in Section 205A(8) of the Companies Act, 1956. The corresponding provision of Section 124 (7) of the Companies Act, 2013 which lays down the penal provisions for non-compliance of transfer of unpaid/unclaimed dividend on expiry of 7 years to IEPF, is yet to be notified.

Unclaimed and unpaid amount of Rs. 1273.66 Crore (approx.) has been transferred to IEPF after the expiry of the mandatory period of seven years, for the period from 2001-02 to 2015-16 (upto 26.02.2016).

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha today. 
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Submission of Financial Reports 
There is no information with the Government regarding companies registered in the offices of registrar of companies are incomplete, wrong and not updated.

However, several companies have not submitted their annual report/return, audited report, balance sheet and details of profit/loss. As per data generated from MCA 21 System, following are the details of companies who have not filed their Balance Sheets and Annual Returns:-

• Not filed only Annual Return for 2015 – 389503

• Not filed only Balance Sheet for 2015 – 386103

• Not filed Annual Return and Balance Sheet for 2015 – 374727

As per the provisions of the section 403 of the Companies Act, 2013 any document can be filed on payment of such additional fees for delay as prescribed within a period of 270 days from the date by which it should have been filed.

The Government had extended the last date upto 30.12.2015 for filing of Annual Returns. Further, for the State of Tamil Nadu and UT of Puducherry, the last date for filing Annual Returns was extended upto 30.01.2016.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha today. 
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Investment in Start-ups 
There is no official report on world ranking for the number of start-ups in the country. There is no estimate of investment in Start-ups. However, an action plan for start-ups has been released by the Prime Minister on 16th January, 2016. The Action Plan includes, inter-alia : (i) Simplification and Handholding; (ii) Funding Support and Incentives; and (iii) Industry-Academia Partnership and Incubation. The details of the Action Plan are available in the public domain (dipp.nic.in).

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Rajya Sabha today. 
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Carry Forward of Unspent CSR Funds 
The Ministry of Corporate Affairs in its circular dated 12th January 2016, has clarified that, the Board of the Company is free to decide whether any unspent amount from out of the minimum required CSR expenditure is to be carried forward to the next year. This provision is uniformly applicable to all CSR eligible companies including Public Sector Undertaking (PSUs).

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Rajya Sabha today. 
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Investigation of Corporate Frauds by SFIO 


To investigate corporate frauds of serious and complex nature the Government has set up a Serious Fraud Investigation Office (SFIO). The SFIO established vide Government of India’s Resolution No. 45011/16/2003-Admn-I dated 02-07-2003, has been notified under sub-section (1) of Section 211 of the Companies Act, 2013, vide Government of India, Gazette Notification S.O. 2005(E) dated 21.07.2015.

            Details of investigations completed and prosecutions/petitions in Company Law Board filed (including in respect of investigations completed in earlier years) by SFIO during the period of last three years and the current year (up to 31-12-2015), are as under:

Year
Number of investigations completed
Prosecutions filed
2012-13
22
45
2013-14
22
89
2014-15
39
61
2015-16
(up to 31-12-2015)
39
44
The nature of frauds detected involve:-

(i)         Falsification of financial statements through inflated sales, overstatement of assets and understatement of liabilities;
(ii)        Collection of deposits by companies under the guise of real estate, chit fund, etc. by alluring small investors with astronomical returns within short time without meeting the promises;
(iii)       Fraudulent transactions;
(iv)       Manipulation through related party transactions;
(v)        Siphoning off and diversion of funds generated through various sources.

Government has taken a number of measures to curb and prevent corporate frauds, which include;

(i)           Declaring ‘Fraud’ as a substantive offence has been introduced in the Companies Act, 2013.

(ii)         Statutory status to the Serious Fraud Investigation Office has been granted under the Companies Act, 2013.

(iii)       Stricter norms of Corporate Governance and their implementation under the Companies Act, 2013.

(iv)       Increasing application of technology for early detection of frauds through data analysis, surveillance and usage of forensic tools, etc.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Rajya Sabha today.


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Commission of Railway Safety Submits Preliminary Report on Derailment of Train No. 11006 Puducheri – Dadar Express 
Shri S. Nayak, Commissioner of Railway Safety, South Eastern Circle, Kolkata held a statutory inquiry into the Derailment of Train No. 11006 Puducheri – Dadar Express at Km. 472/100-200 between Hubballi and Unkal Stations on ‘D Special’ route of Hubballi – Londa Single Non Electrified BG Main Line Section of Hubballi Division of South Western Railway at about 15:27 hours of 21.12.2015.

As a result of the derailment No passenger was killed, 2 passengers had sustained grievous injury, 5 had simple injury and 4 had sustained trivial injury. According to the provisional findings of the Commissioner appended with his preliminary report the accident took place due to “Defect in P. Way –Failure of Equipment (Track)”

These findings are under the consideration of the Government.

(Note:- This press release is based on the information made available by the Office of Commission of Railway Safety, South Eastern Circle, Ministry of Civil Aviation, Govt. Of India) 


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