An unlisted public company has Authorised Share Capital of 10,00,000 Equity voting shares of ₹10 each of same class. The subscribed and fully paid up Share Capital of the Company is 8,00,000 shares of ₹10 each. To comply

(i) As a general rule inter alia the Depository Rules, Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 and under Sec 23F of the Securities Contract Regulation Act, 1956, the dematerialisation of more than the issued securities of a company or delivers in the stock Exchange the securities which is not listed in stock Exchanges are not permitted at all. Further, according to Section 19E of Depository Act, 1996, if the company/ issuer fails to reconcile the records of dematerialised securities with all the securities issued, it shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees. The provisions of Section 28 of Depositories Act, 1996 provides that provisions of this Act shall be in addition to, and not in derogation of, any other law relating to the holding and transfer of securities. Therefore, the process adopted by the company is invalid. (ii) Section 23F of the Securities Contracts (Regulation) Act, 1956 provides that If any issuer dematerialises securities more than the issued securities of a company, he shall be liable to a penalty which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees.