A Summer Training Project Report On

A SUMMER TRAINING PROJECT REPORT ON

AT UNICON SECURITIES PVT. LTD Submitted in partial fulfillment of the degree Of MASTER’S OF BUSINESS ADMINISTRATION SESSION (2007-2009) SUBMITTED TO: KURUKSHETRA UNIVERSITY, KURUKSHETRA.

SUBMITTED BY:Sunny Gambhir MBA (3rd semester) Marketing/finance College Roll no. –

4019 University Roll no. _

DOON VALLEY INSTITUTE OF ENGG. & TECHNOLOGY KARNAL, HARYANA (Approved by AICTE, Affiliated to Kurukshetra University, Kurukshetra)

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DECLARATION I sunny Gambhir, student of MBA IInd Semester, studying at Doon Valley Institute of Engineering and Technology, Karnal, hereby declare that the summer training report on “DEMAT ACCOUNT” submitted to Kurukshetra University, Kurkshetra in partial fulfillment of Degree of Master’s of Business Administration is the original work conducted by me. The information and data given in the report is authentic to the best of my knowledge. This summer training report is not being submitted to any other University for award of any other Degree, Diploma and Fellowship.

(Sunny Gambhir)

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ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or indirectly contributed in the development of this work and who influenced my thinking, behavior, and acts during the course of study. I express my sincere gratitude to Dr. Harish Abhichandani, worthy Principal for providing me an opportunity to undergo summer training at Unicon Investment Solutions I am thankful to Mr. Sachin Arora, zonal head of unicon investment Solution for his support, cooperation, and motivation provided to me during the training for constant inspiration, presence and blessings. I also extend my sincere appreciation to Mr. Vineet sachdeva (lecturer, D.I.E.T) who provided their valuable suggestions and precious time in accomplishing my project report. Lastly, I would like to thank the almighty and my parents for their moral support and my friends with whom I shared my day-to-day experience and received lots of suggestion that improved my quality of work.

(Sunny Gambhir)

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Table of Contents S.No.

Particulars

Page No. 1-19

1.

COMPANY PROFILE OF UNICON INVESTMENT SOLUTIONS

2.

OBJECTIVES OF THE STUDY

3.

INTRODUCTION TO DEMAT ACCOUNT

21-24

4.

STUDY OF “DEMAT ACCOUNT PROCEDURE”

25-54

5.

RESEARCH METHODOLOGY

55-59

6.

DATA ANALYSIS & INTERPRETATIONS

60-70

7.

LIMITATIONS OF THE STUDY

71

8.

SUGGESTIONS AND RECOMMENDATIONS

72

9.

BIBLIOGRAPHY

73

10.

APPENDIX ANNEXURE – 1 QUESTIONNAIRE

4

20

74-76



INTRODUCTION TO UNICON INVESTMENT SOLUTIONS

 MISSION AND VISION

 MANAGEMENT TEAM

 PRODUCTS AND SERVICES OFFERED BY UNICON

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INTRODUCTION TO UNICON

Unicon has been founded with the aim of providing world class investing experience to hitherto underserved investor community. The technology today has made it possible to reach out to the last person in the financial market and give him the same level of service which was available to only the selected few. Unicon gives personalized premium service with reasonable commission on the NSE, BSE & DERVATIVES market through their equity broking arm Unicon Securities private ltd. and commodities on NCDEX and MCX through their Unicon Commodities Pvt Ltd. With their sophisticated technology we can trade through our own computer and if we want human touch we can also deal through our relationships managers out of more than 100 branches. Unicon also give personalized services on insurance (Life and General) &Investments ( Mutual funds & IPO’S ) needs through their Insurance & Investment distribution arm Unicon Insurance Advisors Pvt. Ltd. Their tailormade customized solutions are perfect match to different financial objectives. Their distribution network is backed by in house back office support to serve their customers promptly

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MISSION AND VISION OF UNICON INVESTMENT SOLUTIONS

MISSION: To create long term value by empowering individual investors through superior financial services supported by culture based on highest level of team work, efficiency and integrity

VISION: To provide the most useful and ethical investment solutions guided by values driven approach to growth, client service and development

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MANAGEMENT TEAM OF UNICON INVESTMENT SOLUTIONS

Founder& CEO: Mr. Gajender Nagpal Mr Nagpal with his dynamic leadership brings vision to the company. A management graduate by qualification, Mr. Nagpal brings with him over 14 years of experience in the stock market. Before joining Unicon he has served at senior positions for 5 years with Kotak securities at a regional level and Indiabulls securities for 4 years at national level assignments. Mr. Nagpal brings with him the rich experience of building a retail broking network. He is a familiar face on the electronic media and is well respected in the broking industry for his stock market expertise. Co-Founder& President: Mr. Ram M Gupta Mr. Gupta through his aggression and dynamism brings energy to the team. He has 8 years of stock market experience behind him and is responsible for driving the sales team. Mr. Gupta has held senior level postions in Karvy stock broking and Indiabulls Securities. Mr. Gupta is supported by a team of over 850 relationship mangers spread over 89 locations across the country Chief Operating Officer: Mr. Sandeep Arora Mr. Sandeep Arora brings with him over 11 years of experience of managing operations of stock broking company. Mr. Sandeep Arora before taking over as head of operations at Unicon was responsible for managing the operations of Indiabulls Securities Ltd. Mr. Sandeep Arora is supported by his team of over 400 people helping him to give world class service to the clients.

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Chief Financial Officer: Mr. Vikas Mallan Mr Mallan A Chartered Accountant, Company Secretary and Cost Accountant by profession. Mr. Mallan has over 14 years of experience in the area of finance. Before joining Unicon he has served at senior level positions with Rediff.com, Reliance Telecom and Koshika Telecom. His experience includes a Nasdaq listing of an Indian internet company and Head of Finance of a leading Law firm. Mr. Mallan is heading Distribution / Mutual Fund initiative and is supported by around 1100 dedicated employees nationwide. Chief Compliance Officer: Ms. Anjali Mukhija Ms. Anjali Mukhija heads compliance. She brings with her 12 years of experience in the stock markets. Her current job profile includes broking operations, client relations & grievance redressal, coupled with Public dealings. Prior to joining Unicon, she was with the National Stock Exchange, Delhi Regional Office for 10 years and had held senior position for a brief period in a reputed broking house. National Head (E-Broking): Mr. Trinadh Kiran Mr Trinadh Kiran is an MBA marketing professional from Aligarh Muslim University and has done 10 months research in Capital Markets from IIM-Ahmedabad. He brings with him a total work experience of 7 years and has worked with almost all big giants of capital market like India Infoline, India Bulls and Net worth Stock Broking. He is associated with Unicon since June 2005. He has extensive knowledge of Retail Broking and expertise in E-Broking.

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National Head (Business Alliances): Mr. Vijay Chopra Mr. Vijay Chopra is a management graduate from Indian Institute of Foreign Trade, New Delhi. He has a illustrious professional track record of spanning over 11 years wherein he has handled various assignments at a senior levels with some of the best names in the Consulting, FMCG & healthcare space. His forte has been supply chain management, New Product Launches, Sales, Marketing, Product management & Training. Mr. Chopra along with his team handles over 300 business partner network which is spread over the entire geographical spread of the country. Head-Priveleged Client Group: Mr. Ashish Kukreja Mr. Ashish has the responsibility of handling PCG business with Unicon. He brings with him a wide industry exposure and joined Unicon in July 2006 after rendering his services to Kotak Securities, where he was taking care of franchisee business and later started handling HNI desk. He is an MBA (finance) from ICFAI Business School. Vice President-HR &Training: Ms. Deepa Mohamed Ms Deepa Mohamed Sqn. Ldr.(Retd). Deepa Mohamed, pioneer as first batch of women Officer in Indian Air Force is an Electronics & Communications engineer from Netaji Subhas Institute of Technology (Delhi). She has also undergone Aeronautical Engineering course from AFTC, Bangalore and Post graduation specialization in Human Resource Management from XLRI-Jamshedpur. She has 12 years of working experience in personnel management and administration and is associated with Unicon since September, 2006. She has been instrumental in setting up Human resource and Training division. She has worked as an OD consultant and her expertise lies in Organization development and change management.

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PRODUCT & SERVICES OFFERED BY UNICON Unicon deals with a numbers of products & services: • Equity • Commodity • Depository • Privileged Client Group •

Properties

• Distribution • NRI Services • Back Office

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Equity Unicon offers a unique feature of a single Screen Trading Platform of NSE, BSE & Derivatives. Unicon offers both Offline & Online trading platforms. You can Walk in or place your orders through telephone at any of our branch locations Online Trading Products: • Unicon plus • Unicon Swift Unicon Plus Browser based trading terminal that can be accessed by a unique ID and password. This facility is available to all our online customers the moment they get registered with us. Unicon Swift Application based terminal for active traders. It provides better speed, greater analytical features & priority access to Relationship Managers.

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Commodity Unicon offers a unique feature of a single screen trading platform in MCX and NCDEX.Unicon offers both Offline & Online trading platforms. You can Walk in or place your orders through telephone at any of our branch location Online commodity internet trading platform through uniflex. • Live Market Watch for commodity market (NCDEX, MCX) in one screen • Add any number of scrips in the Market Watch • Tick by tick live updation of Intraday chart • Greater exposure for trading on the margin available • Common window for market watch and order execution • Key board driven short cuts for punching orders quicklyon • Real time updation of exposure and portfolio • Facility to customize any number of portfolios & watchlists. • Market depth, i.e. Best 5 bids and offers, updated live for all scripts • Facility to cancel all pending orders with a single click • Instant trade confirmations • Stop-loss feature.

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Depository Unicon depositories services offers dematerialization services as a participant in Central Depositry Services Limited (CDSL) through its depository operations. The company believes in efficient and costeffective and integrated service support to its brokerage business. Unicon Securities Private Limited, as a depository participant, will offer depository accounts for individual investors as well as corporates which will enable them to transact in the dematerialized segment, without any hassles. Depository offers a safe, convenient way to hold securities as compared to holding securities in paper form. Our service provides an integrated single platform for all our clients ensuring a risk free, efficient and prompt depository process.

Facilities Offered by Unicon

* De-materialization: You can submit your physical shares at the Unicon branch for dematerialization into electronic form. * Re-materialization: You can also request for Re-materialization which enables you to convert the dematerialized shares into physical form.

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* Transfer: Inter and intra depository services are available through which you can transfer shares. IPO: You can apply for IPO using your demat account details and on allotment the securities are transferred directly to your demat account. * Corporate Actions: While holding your stock in demat account, in case you are eligible for any bonus and rights issues the allotment would be transferred to your demat account. * Easi: You can view your demat account over the Internet and avail a host of services. This facility empowers our clients to view, download

Priveleged client group We provide customer focused transparent investment planning and solutions. We offer products which benefit your special status. PCG has a specialized advisory team which nurtures all your investment. We ensure that your investments work for you rather than you for them.

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Products offered by unicon • Unicon Signature Account • Nifty Tracker • Unicon Trade Plus • Stastical Arbitrage • Unicon Wealth Planner

Properties Unicon is a specialized property broking company. Our highly experienced and professional teams present retail, office, industrial and residential property opportunities to a broad base of clients. Whether it is a residential or commercial development, Unicon offers a total solution to our clients inclusive of market research, marketing strategy, interaction with the professional teams and sales or leasing of the property. Unicon’s professional team of consultants will assist you to identify suitable premises that satisfy your requirements. We will help you negotiate favorable leases and assist with the preparation of all documentation.

“Whether you are looking for a home or a place to conduct business Unicon shall find you one”

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Distribution Unicon is fast emerging as a leader in the Insurance and Mutual Funds distribution space. Unicon has over 100 branches and a huge number of “Business Development Executives” who help to source and service the customers throughout the country. Unicon is fast becoming the preferred “Vendor Independent” distribution houses because of providing efficient service like free pick-up of collection of cheques/DD’s, Keeping track of the premiums etc to its customers. Unicon offers the following distribution products:IPO's Mutual Funds Insurance

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IPO At Unicon you can invest in the Primary markets (Initial Public Offerings) online without going through the hassles of filling up any IPO application forms or any other paperwork. We shall make sure that you do not miss the opportunity to subscribe/invest in a good IPO issue by providing you an online IPO application form, transfer of funds online through secured payment Gateways of leading banks like ICICI, HDFC, AXIS bank. In addition to the above we shall provide you with the In-Depth analysis of the IPO issues which shall be hitting the Indian Markets in near future, IPO Calendar, analysis on the recent IPO listings, prospectus, offer documents and other IPO research reports so as to help you take an informed decision to invest in the IPO issues. Online IPO facility is open to all our registered clients at no cost whatsoever. All you need is the following to subscribe online to the IPO issues • A trading account with Unicon • A Demat account with Unicon • An access to the net banking facility with the Banks through which Unicon has operational Gateway facility (ICICI, HDFC and AXIS Bank). • You must have signed a Power of Attorney (POA) agreement for applying in IPO’s online

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Mutual Funds Unicon Provides expert advice to its clients for their investments in equity & debt markets through Mutual Funds. Our experts advice you the best investment solutions that suit you and help you to reach your financial goals. We help you ascertain your risk profile & guide you with the right product mix which reduce your tax liability increase your savings & enhance your wealth. Weather you have a conservative, medium or aggressive investment risk appetite, our experts would guide you to build a portfolio to optimize the return of interest. Classification of Mutual Funds • By structure 1. Open-ended Scheme 2. Close-ended Scheme 3. Interval Schemes • By Investment objective 1. 2. 3. 4.

Growth Schemes Income Schemes Balanced Schemes Money market Schemes

• By Other Schemes 1. Tax saving schemes 2. Special schemes 3. Index Schemes

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Insurance General Insurance Unicon offers all products of General Insurance under one umbrella. Unicon comprises of a team of distinguished professionals from insurance, finance and other management disciplines who have vast business & managerial experience. Unicon team evaluates the client's business environment and studies the risk profile based on the results of these evaluations, Unicon team then suggests the most cost effective , integrated insurance package that is perfectly suited to the client's risk profile. Unicon has a nationwide network of branches all over India, equipped with top quality infrastructure facilities, to provide you prompt & efficient service. Life Insurance Unicon offers you a Peace of Mind by offering various life insurance plans for your unique & specific needs. Our philosophy is that for every financial problem, there is a solution also. And we are here to give you complete financial solutions. At the same time we offer you very Prompt & Reliable Policy related service for enduring relationship. We offer a very wide range of products to fulfill your particular requirements. You can always have an access to our 83 Branch Offices situated at prime locations of the city, or you can call our Relationship Manager to guide on your Investments.

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Following is the glimpse of Life Insurance Plans • Protection Plans • Investment Plans • Child Plans • Retirement/Pension Plans • Saving Plans • NRI Plans • Health Plans

NRI SERVICES With India becoming the epicentre of growth the Global Indian feels the need to be connected to the domestic growth story. Unicon now offers a convenient and hassle-free way of Investing in the Indian Securities Market to the people who are living outside India and wish to participate in the Indian Growth story.

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Procedure for NRI operations in Indian Capital Markets • The NRI can deal with only one bank at any point of time • The NRI He is allowed to invest only 5% of the paid up capital of a company. The aggregate paid up value of equity of any company purchased by all NRI's and OCBs cannot exceed 10 percent of the paid up capital of the company and in the case of convertible debentures, the aggregate paid up value of each series of debentures purchased by all NRI's and OCBs cannot exceed 10 % of the paid up value of each series of convertible debentures. •

He can enter only into delivery based trades; all deliveries must only be routed through beneficiary accounts and not directly through the broker.

• Shares bought by him cannot be sold unless the payout of the same is received from exchange. • All purchase and sale transactions have to be reported to the RBI by the designated bank • Original brokers contract notes have to be submitted to the designated Bank branch, within 24 hours of the transaction. • He will be required to make bill to bill payments/ settlements. No adjustments of purchase against sale consideration should be done • Shares cannot be bought against the shares sold in the same settlement

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• All Purchase and Sales will be dealt separately for payments / receipts

• Sale proceeds of any transaction not reported/approved by the RBI is allowed to be credited to the NRE/NRO savings/demat account. The transaction will have to be reversed in the account and losses if any will be borne by the client. • All tax liabilities arising out of buying and selling of securities will be handled by the designated bank

Back Office Unicon through its online back-office aims to increase the transparency and provides you the link to view the details of your account online anytime and anywhere. Here you have the advantage of viewing the following reports online • Sauda Details • Financial Ledger • Net position for the day • Net position Detail (for the complete financial year) • E-Contract Note

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OBJECTIVE OF THE STUDY

•

The main objective of the study is to know about the potential of the market regarding people’s dealing in share market.

• To know the role of DEMAT ACCOUNT . • To know the procedure of opening DEMAT ACCOUNT. • The objective is to know that how many people in the city are aware of the UNICON SECURITIES PVT. LTD. • To know where people have already opened their demat a/c and on what basis.

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INTRODUCTION

The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a nation-wide online fully automated screen based trading system where a member can punch into the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a counter party. Screen based electronic system electronically matches orders on a strict price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It allows faster incorporation of price sensitive information into prevailing prices, thus increasing the informational efficiency of markets. It enables market participants, irrespective of their geographical locations, to trade with one another simultaneous, improving the depth and liquidity of the market. It provides full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access to everybody. It also provides a perfect audit trial, which helps to resolve disputes by logging in the trade execution process entirety. The sucked liquidity from other exchanges and in the very first year of its operation, NSE became the leading stock exchange in the country, impacting the fortunes of other exchanges and forcing them to adopt SBTS also. Today India can boast that almost 100% trading take place through electronic order matching.

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Now dematerialisation of shares is introduced “a new concept” which converts paper based physical trading into electronic trading. It is a safe and convenient way to hold securities. Screen based trading system helps in faster transfer of securities and no stamp duty is required on transfer of securities. The trading system operates on a strict price time priority. All orders received on the system are sorted with the best priced order getting the first priority for matching i.e. the best buy order match with the best sell order. Orders are matched automatically by the computer keeping the system transparent, objective and fair. The trading system provides tremendous flexibility to the users in terms of kinds of orders that can be placed on the system. The trading system also provides market information online. In order to promote dematerialization of securities, NSE joined hands with leading financial institutions to establish the national securities depository Ltd. (NSDL), the first depository in the country, with the objective of enhancing the efficiency in settlement systems as also to reduce the menace of fake/forged and stolen securities. This has ushered in an era of dematerialised trading and settlement. SEBI has made dematerialised settlement mandatory in an ever –increasing number of securities in a phased manner, thus bringing about an increase in the proportion of shares delivered in dematerialised form. There is an increasing preference to settle trades, particularly in high value securities, in demat form. Such high level of demat settlement reassures success of rolling settlement.

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WHAT IS DEMAT In India, a demat account, the abbreviation for dematerialised account, is a type of banking account which dematerializes paper-based physical stock shares. Conversion of Securities from Physical (Paper) Mode into Electronic Mode is Called Dematerialisation. The Client opens Demat Account with any DP. Upon Demat, the Certificates are destroyed and credit entry of exactly equal number of Securities is created in Depository in Electronic mode. The B.O. account of holder is credited and the securities loose their identities. The dematerialised account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. This account is popular in India. The market regulator, securities and exchange board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should possess a permanent account number (PAN), and the deadline for submission of PAN details to the depository lapsed on January 2007.

Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor's account with its DP. In order to dematerialize certificates; an investor will have to first open an account with a DP and then request for the dematerialisation of certificates by filling up a dematerialisation request form [DRF], which is available with 28

the DP and submitting the same along with the physical certificates. The investor has to ensure that before the certificates are handed over to the DP for demat, they are defaced by marking "Surrendered for Dematerialisation" on the face of the certificates.

ACCOUNT OPENING To avail the services of a depository an investor is required to open an account with a depository participant of any depository.

PROCEDURE FOR OPENING AN ACCOUNT A demat account are opened on the same lines as that of a Bank Account. Prescribed Account opening forms are available with the DP, needs to be filled in. Standard Agreements are to be signed by the Client and the DP, which details the rights and obligations of both parties • The DP officials will make available the relevant account opening form (depending on whether the client is a retail investor or corporate client/clearing member) and specify the list of documents regarding references that should be submitted along with the form. It will also give a copy of the relevant agreement to be entered with the client, in duplicate. • The client will submit the duly filled in account opening form and client has to visit personally for opening the account in DP. The DP 29

officials have to do in person verification and affix the “IN PERSON VERIFICATION” stamp on the account opening form. It should also furnish such documents regarding references, as specified by the DP, along with the account opening form. After executing the agreement the client has to forward it to the DP.

• The DP officials will verify that the account opening form is duly filled in. It will also verify the enclosed documents, if any. Incomplete forms will be forwarded to the client for rectification. • For Corporate Clients, the DP officials will verify if the board resolution for the authorized signatories is enclosed. • In case the documents are not proper, the DP officials will reject the form and intimate the client of the same, stating the reasons for doing so. •

If the form is in order; the DP officials will accept the same and affix the stamp “verified with original” on each and every proof after seeing the original proofs.

•

After completion of all documentation, the DP officials will verify the pan from income tax website. And affix the stamp “PAN VERIFIED” with date and sign on the stamp.

• The DP officials will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL & CDSL to the Participant) screen provided for the purpose. In case of NSDL A/c opening the SR. Assist will capture all the details in the DPM and record the client’s signature (on the form) as specimen for authorizations in the future. • After entering client details in the system, a client account number will be generated by the DPM. The DP officials will enter this in the account opening form. After that the officers will verify the 30

details in the DPM captured by the SR. Assist. and activate the account. • The DP officials are not allowed to give the demat a/c no to the clients until the a/c is activate, this is applicable for both NSDL & CDSL.

• When the demat a/c is activated the DP officials have to send the client master and the copy of agreement between DP and client at the client’s address

The account holder is called 'beneficial owner' in a depository system and the account is known as 'beneficiary account'.

Features of Beneficary Account· • • •

No minimum balance is required to be retained in a beneficiary account. An investor can close a beneficiary account with one DP and open an account with another DP. To dematerialise existing physical holdings, the beneficiary account must be opened in the same ownership pattern in which the securities are held in the physical form e.g.,if one certificate is in individual name and another certificate is jointly held by X & Y, two different accounts should be opened. However, in case of joint holders, securities can be dematerialised in the same account even though share certificates are in different sequence of names e.g., shares held in joint names of X & Y can also be dematerialised in an account opened in the names of Y & X as well by submitting an additional form (Transposition Form) alongwith Demat Request

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Form to the DP.However, shares held jointly by X & Y cannot be dematerialised in an account opened in the name of only X or only Y or any

DOCUMENTS SHOULD BE REQUIRED FOR DEMAT ACCOUNT . Proof of Identity (POI): • Passport • Voter ID card • Driving license • PAN card with photograph • Identity card with applicant’s photograph issued by 1. Central or state government and its department 2. Statutory/regulatory authorities 3. Public sector undertakings 4. Scheduled commercial banks 5. Public financial institutions 6. College affiliated to universities Proof of Address (POA): • Ration card • Passport • Voter ID card • Driving License • Bank passbook • Verified copies of : 1. Electricity bills (not more than 2 months old) 32

2. Residence landline telephone bill (not more than 2 months old) 3. Leave & license agreement/agreement to sell (duly attested) 4. Self declaration by supreme court/high court judges, giving the new address in respect of their own accounts.

•

Identity card with applicants photograph issued by

Central or state government and its department Statutory/regulatory authorities Public sector undertakings Scheduled commercial banks Public financial institutions College affiliated to universities. • Passport-size photograph • Copy of PAN card along with original PAN card for verification 1. 2. 3. 4. 5. 6.

Bank details: • Copy of cancelled cheque with printed name from the bank. •

Copy of bank passbook with name and address and copy of cancelled cheque.

• Bank statement with name and address (duly authorized by the bank, if statement is on plain paper) not more than 4 months old and copy of cancelled cheque of MICR & bank detail verification. In case of minor • Date of birth certificate duly notarized • Proof of address and identity documents of the guardian both minor and guardian’s photograph and guardian to sign across both photographs • PAN card of minor as well guardian is mandatory 33

In case of NRI Foreign address and RBI approval date attested copy of RBI approval • NRO-Indian address alonwith proofs • Bank account details •

In case of joint holdings In case of joint holdings, POI and POA documents alongwith PAN card must be submitted in respect of all account holders. Original documents must be taken to the DP for verification. The DP will also provide a copy of the DP-Client agreement. Account opening form require the applicants to give the following details: •

(a) Name(s) of account holder(s) -The investor should ensure that the name is identical to that which appears on the certificate(s) to be dematerialised. In case of joint holdings, account may be opened in any one combination, irrespective of the sequence in which names are appearing on share certificates. Investors are advised to open their account in their fully expanded name, i.e., to spell to the first name as well as the middle name. This would obviate any doubts about the veracity of the information.

•

(b) Mailing and communication address(es) - The veracity of the applicant's address is determined through the documents submitted 34

for verification like ration card, passport, voter ID, PAN card, driving license, bank passbook, etc. For NRI accounts, proof is required for both addresses - that of the account holder as well as the constituted attorney. For corporate accounts, a copy of Memorandum of Association, Articles of Association, Board resolution permitting opening of account, the registered address of the company have to be furnished.

•

(c) Details of guardian in case account holder is a minor -Only a guardian can open a depository account for a minor. The guardian is required to sign the application form, and details of his name and address need to be given in addition to the details of the minor.

•

(d) Foreign Address and RBI approval details for NRI, FII or OCB accounts -For foreign-based applicants like NRIs, Flls, OCBs, etc., the applicant must furnish original or attested copies of the power of attorney and the approval letter from RBI permitting them to invest, as the case may be.If the account holder is an FII or an OCB, SEBI registration details along with attested copy of registration certificate issued by SEBI and authorisation letter is required.

•

(e) Details of bank account -Details of bank account of the account holder, including the nine digit code number of the bank and branch appearing on the MICR cheques issued by the bank have to be filled in the application form. Companies use this information for printing them on dividend/interest warrants etc.

•

(f) Nomination declaration - A beneficial owner can make a nomination of his account in favour of any person by filing the nomination form with his DP. Such nomination is considered to be conclusive evidence of the account holder'(s) disposition in respect of all the securities in the account for which the nomination is made.

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•

(g) Standing Instruction - a facility of standing instruction is provided to the investors for receiving securities to the credit of their accounts without giving a separate receipt instruction.

The demat account cannot be operated on "either or survivor" basis like the bank account. In case of the joint account for the beneficial owners, all the joint holders have to sign the account opening form. The investor will submit to his DP the duly filled in account opening form & DP-client agreement along with the documents. The DP will verify whether the account opening form has been duly filled in or not. He will also verify the submitted documents. For corporate investors, the DP will also verify whether the board resolution for the authorized signatories has been enclosed. The DP will ensure that client's signature is recorded on the form which will serve as specimen for authorizations in future. If the application form and documents are in order, then the DP will accept them and give an acknowledgement slip duly signed and stamped to the client. The DP will execute the agreement and give a copy of it to the client. After completion of all documentation, the DP will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL to the DP) screen provided for the purpose. After entering client details in the system, a client account number will be generated by the DPM. The DP will enter this in the account opening form. On successful opening of the account, the DP will give: • • •

Client Id - an eight digit number to be used along with DP Id for any future transactions. Delivery Instruction slip book. A copy of the report listing the client details captured in the DPM database to the client. The report will be generated by the DPM.

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PREREQUISTIES FOR DEMATERIALISATION REQUEST 1. The registered holder of the securities should make the request. 2. Securities to be dematerialised must be recognised by NSDL/CDSL as eligible. In other words, only those securities whose ISIN has been activated by NSDL/CDSL, can be dematerialised. 3.

The

company/issuer

should

have

established

connectivity

with

NSDL/CDSL. Only after such connectivity is established that the securities of

that

company/issuer

are

recognized

to

be

"available

for

dematerialisation". 4. The holder of securities should have a beneficiary account in the same name as it appears on the security certificates to be dematerialised. 5. The request should be made in the prescribed dematerialisation request form.

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REASONS FOR DEMATERIALISATION REQUEST REJECTION

1. The quantity of shares mentioned in the DRF is more than the actual certificates sent. 2. The quantity of shares mentioned in the DRF is less than the actual certificates sent. 3The certificates sent are fake. 4. The certificates sent are reported Stolen. 5. Original certificates present are those for which the duplicates have already been issued. 6. Endorsements on the certificates are forged. 7. Securities stand on a different name than those mentioned in the DRF. 8. The details mentioned on the certificates do not match with the details on the DRF, or the order of the holders name on the DRF is different from the names given on the certificates. The scrutiny by the DP is incomplete. 9. The securities attached / DRF does not pertain to the R&T Agent to whom the DRF is sent. 10. Electronic request received but physical certificates are not received with in 15 days. 38

11. Specimen Signature on the DRF differs from the signatures recorded with the Registrar / Transfer Agents. 12. The certificates sent have a court injunction against them

Precautions: •

•

•

Corporate investors to enclose Memorandum of Association/Trust deed/Board resolution for the authorized signatories along with the account opening form. Details with respect to the bank account details of an investor must be indicated in the space provided for the same in the account opening form. If an investor is interested in availing the facility of standing instructions for credits to his account, then such instructions may be given to the DP. Otherwise, he will need to give a receipt instruction to his DP for receiving credits to his account.

BENEFITS OF DEMATERIALISATION •

No stamp duty for transfer of securities in the Depository System. In the case of physical shares, stamp duty of 0.25% of sale value is payable on transfer of shares.

•

Elimination of bad deliveries and all risks associated with physical certificates such as loss in transit, theft, mutilation, damage, etc.

•

Facility for freezing/locking of investor accounts to make it nonoperational for specified period.

•

Instead of filling up transfer deed(s) a simpler form is to be given `to the DP.

•

Facility to pledge and hypothecate securities. Pledging Dematerialised securities is easier and advantageous as compared 39

to pledging physical shares. In respect of shares in "compulsory Demat" category, banks prefer to lend against shares held in electronic form, and offer better terms.

•

Odd lots are not differentiated in the electronic system. Even a single share can be traded at the market rates without any reduction in realisation.

•

Just like a bank branch, the DP will give a periodical statement of account of holdings. In addition, investor can obtain a statement of holdings as and when required for a fee.

•

In case investor loses the statement of holdings, he can inform his DP and obtain a duplicate statement. Investor's statement of holdings cannot be used by anybody else for trading in his account.

•

When an investor opens an account with a DP, he signs an agreement with the DP in which the DP will indemnify the investor for any mis-use of his holdings. The depository will also ensure thatthe interests of the investor are protected. Grievances, if any, against his DP will be resolved by the Depository.

•

Every transaction in investor's account will have to be authorised by him, which ensures total control of the investor over his investment

•

A safe and convenient way to hold securities and there is immediate transfer of securities.

•

Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately.

•

Reduction in paperwork involved in transfer of securities and Reduction in transaction cost

•

Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc. 40

DEMAT PROCESS 1. The registered holder of the securities makes the request. 2. Securities must be recognised by Depository as eligible. 3. Client submits DRF & physical certificates to DP. DP checks securities. 4. Client defaces certificates and DP punches two holes on name of company. 5. DP enters demat request in system for Depository. 6. DP dispatches certificates along with DRF to R&T. 7. Depository records the details and sends to R&T. 8. R&T agent verifies the details and confirms to Depository. 9. Depository credits the demat securities to BO a/c of client and intimates DP electronically. 10.DP issues statement to client.

41

DEMAT -PROCESS

Demat Process: Shareholders

Depository Participants

Account Opening

The DP sends Share certificates to R&T agent for dematerialisation

R&T Agent

With Physical Certificate

Shareholder goes to DP with his physical share certificates

Shareholder opens his account with DP.

Demat Request Form (DRF)

Shareholder fills DRF in duplicate, defaces the shares and hands over to DP

Depository

DP sends information electronically to Depository

Dematerialisation

Upon confirmation of Demat by R&T Agent, the Depository confirms Dematerialisation.

Credit to the BO A/c. of the Investor

42

INFORMATION NEEDED FOR DEMAT ACCOUNT An investor has to give his bank account details at the time of account opening. It is for the protection of investor’s interest. The bank account number will be mentioned on the interest or dividend warrant, so that such warrant cannot be encashed by any one else. Further, cash corporate benefits such as dividend, interest will be credited to the investors account directly through the ECS (Electronic Clearing Service) facility, wherever available, by the company. An investor can change the details of his bank account. Since in the depository system monetary benefits on the security balances are paid as per the bank account details provided by the investor at the time of account opening, the investor must ensure that any subsequent change in bank account details is informed to the DP. An Investor should immediately inform his/her DP if the address of the investor changes, who in turn will update the records. This will obviate the need of informing different companies. An investor can open more than one account in the same name with the same DP and also with different DPs. An investor has not to keep any minimum balance of securities in his/her accounts. Depository / DP can be chosen by investor as per convenience irrespective of the DP of the broker. The demat account must be opened in the same ownership pattern such as securities owned individually in which the securities are held in the physical form. e. g. if one share certificate is in the individual name and another certificate is jointly with somebody, two different accounts would have to be opened.

43

WHAT IS DEPOSITORY AND DEPOSITORY PARTICIPANT

Depository can in many ways be compared to a bank. Securities of the investors are held in electronic / book entry form by the Depository. Apart from holding the securities, Depository also provides services related to transactions in securities. In India, a Depository Participant (DP) is described as an agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between the two under the Depositories Act. In a Strictly legal sense, a DP is an entity who is registered as such with SEBI under the provisions of the SEBI Act. Think of it like a bank. The head office where all the technology rests and details of all accounts held is like the depository. And the DPs are the branches that cater to individuals. At present two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (I) Limited (CDSL) are registered with SEBI

44

NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL) NSDL was the first depository organization promoted by IDBI, UTI, and National Stock Exchange (NSE). NSDL was set up to provide electronic depository facilities for securities being traded in capital market. The depositories ordinance was promulgated by the Government of India in September 1995. The Securities and Exchange Board of India (SEBI) issued guidelines for depositories in May, 1996. NSDL has minimum net worth of Rs 100 crores. NSDL deals with shares in dematerialized form through depository participants who are agents of investor banks, stockbrokers and financial institutions. NSDL Depository Participant can be a public financial institution, bank, custodian, registered stockbroker or a non-banking financial company subject to the approval from the Depository Company and SEBI. NSDL aims at ensuring the safety and soundness of Indian capital market by developing settlement solutions that increase efficiency, minimize risk and reduce costs.

45

CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED (CDSL) CENTRAL DEPOSITORY SERVICEES LIMITED (CDSL) is second depository in India, is set up to meet the objective the Act & to fulfill the user’s need. CDSL is secured “Certificate of Commencement” of business on Feb 8, 1999 from SEBI. The balances in the investors’ account recorded and maintained with CDSL can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account, which gives the details of the securities holdings and transactions. The depository system has effectively eliminated paperbased certificates, which were prone to be fake, forged, counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities. CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Union Bank of India and Centurion Bank. Each and every activity of CDSL stem from the essential reason behind forming this depository, i.e. to encourage India's individual investors to benefit from actively participating in a depository.

46

Services provided by Depository system •

Dematerialisation (usually known as demat) is converting physical certificates to electronic form.

•

Rematerialisation, known as remat, is reverse of demat, i.e. getting physical certificates from the electronic securities.

• Transfer of securities, change of beneficial ownership • Settlement of trades done on exchange connected to the Depository • Pledge / Hypothecation of demat shares, viz. Loan against shares • Electronic credit in public offering of the Companies • Non - Cash corporate benefits, viz. Bonus / Rights - direct credit into electronic form • Depository restrict the risk of fraud

47

The charges for account closure and securities transfer due to account closing. SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005 advised that with effect from January 09, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership. All other transfer of securities consequent to closure of account, not fulfilling the above-stated criteria, would be treated like any other transaction and charged as per the schedule of charges agreed upon between the BO and the DP.

Freeze or lock of an account Investors can freeze or lock their accounts for any given period of time, if so desired. Accounts can be frozen for debits (preventing transfer of securities out of accounts) or for credits (preventing any movements of hindrances into accounts) or for both.

48

Trading / Settlement Traditionally settlement system on Indian stock exchanges gave rise to settlement risk due to the time that elapsed before trades were settled by physical movement of certificates. The process of physical moving the securities from seller to his broker to clearing corporation to the buyer’s broker and finally to the buyer took time with the risk of delay somewhere along the chain. Now depository holds securities in dematerialised form. The procedure for buying and selling dematerialised securities is similar to the procedure for buying and selling physical securities. The difference lies in the process of delivery (in case of sale) and receipt (in case of purchase) of securities.

In case of purchase:• The broker will receive the securities in his account on the payout day • The broker will give instruction to its DP to debit his account and credit investor's account • Investor will give ‘Receipt Instruction to DP for receiving credit by filling appropriate form. However one can give standing instruction for credit in to ones accounts that will obviate the need of giving Receipt Instruction every time.

In case of sale:The investor will give delivery instruction to DP to debit his account and credit the broker’s account. Such instruction should reach the DP’s office at least 24 hours before the pay-in as other wise DP will accept the instruction only at the investor’s risk.

49

'Standing Instruction' given in the account opening form In a bank account, credit to the account is given only when a 'pay in' slip is submitted together with cash/cheque. Similarly, in a depository account 'Receipt in' form has to be submitted to receive securities in the account. However, for the convenience of investors, facility of 'standing instruction' is given. If you say 'Yes' for standing instruction, you need not submit 'Receipt in' slip everytime you buy securities. If you are particular that securities can be credited to your account only with your consent, then do not say 'yes' [or tick ] to standing instruction in the application form.

Delivery Instruction Slip (DIS) and the precautions which one need to observe with respect to Delivery Instruction Slips To give the delivery one has to fill a form called Delivery Instruction Slip (DIS). DIS may be compared to cheque book of a bank account. The following precautions are to be taken in respect of DIS:• Ensure and insist with DP to issue DIS book. • Ensure that DIS numbers are pre-printed and DP takes acknowledgment for the DIS booklet issued to investor. • Ensure that your account number [client id] is pre-stamped. • If the account is a joint account, all the joint holders have to sign the instruction slips. Instruction cannot be executed if all joint holders have not signed. • Avoid using loose slips. • Do not leave signed blank DIS with anyone viz., broker/subbroker. • Keep the DIS book under lock and key when not in use.

50

• If only one entry is made in the DIS book, strike out remaining space to prevent misuse by any one. • Investor should personally fill in target account -id and all details in the DIS.

It is possible to give delivery instructions to the DP over Internet .Both NSDL and CDSL have launched this facility for delivering instructions to your DP over Internet, called SPEED-e and EASI respectively. The facility can be used by all registered users after paying the applicable charges.

Lending and borrowing of demat securities If any person required to deliver a security in the market does not readily have that security, he can borrow the same from another person who is willing to lend as per the Securities Lending and Borrowing Scheme. Lending and borrowing has to be done through an 'Approved Intermediary' registered with SEBI. The approved intermediary would borrow the securities for further lending to borrowers. Lenders of the securities and borrowers of the securities enter into separate agreements with the approved intermediary for lending and borrowing the securities. Lending and borrowing is affected through the depository system. You can lend your securities through Approved Intermediaries registered with SEBI. One can lend his/her demat seurities by entering into an agreement with the approved intermediary to be a lender under this scheme. After that, you may lend securities any time by submitting lending instruction to your DP. Intermediary may return the securities at any time or at the end of the agreed period of lending. Intermediary has to repay the securities together with any benefits received during the period of the loan. One can receive the corporate benefits which would accrue on these securities during the period of lending.The benefits will be given to the Intermediary/borrower. However, whenever the securities are being returned / recalled. Intermediary/borrower will return the securities together with benefits received. 51

PHYSICAL SEGMENT Change in Name / Status -

All requests for change of name should be accompanied by a copy of the notification in Official Gazette or a Newspaper.

-

Request for change of name consequent upon marriage/divorce should be accompanied with marriage certificate/divorce decree.

-

For effecting change of status from minor to major, please send proof of age (such as attested copy of Birth Certificate or School Leaving Certificate)

-

In the case of limited companies, a certified copy of the Certificate of Incorporation consequent to Change of Name issued by the Registrar of Companies should be submitted along with Memorandum & Articles of Association

-

The new specimen signature duly attested by holder's banker should be lodged with the Company to take on record the new signature.

Change of Address Please inform the R&TA viz Integrated Enterprises (India) Limited immediately if there is any change in address, quoting Folio No. Duly signed by the main (1st) holder as per specimen signature recorded with us. This is the reason for which we would advise you not to send change

52

of address request by mail. If shares are held in demat form, please advice your DP regarding change of address.

Loss of Share Certificates Any communication to the Company regarding loss of share certificates should always be signed by the shareholder as per specimen signature registered with the Company, accompanied by FIR lodged with local police station giving full details of lost certificate(s) such as certificate(s) Nos., Distinctive Nos. etc. - Please immediately apply for injunction order in appropriate Court of Law for stopping transfer, giving full details of Certificate Nos., Distinctive Nos. etc. - Upon receipt of such communication, the procedure to be followed for obtaining duplicate share certificates will be advised

Nomination Nomination when shares are held in physical form Nomination will enable smooth inheritance of ownership of the shares by the Nominee without any procedural difficulties. (Presently, there is no difficulty where shares are registered in joint names. But if the shares are held in an individual name, addition of a joint name can only be done as a transfer, involving share transfer form, stamp duty, surrender of original certificates etc. Following the nomination procedure eliminates all this inconvenience). Therefore, if shares are held in a single name, , with the intention of holding them for some more time, then please advise nomination immediately without delay

53

Following Instructions for the Nomination 1.

2. 3.

4. 5.

6. 7. 8. 9.

Nomination can be made only by individuals, holding shares on their own behalf singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate. If the shares are held jointly, all joint holders must sign the nomination form. A minor can be nominated by a holder of shares and in that event the name and address of the Guardian must be given by the holder. The nominee shall not be a trust, society, body corporate, partnership firm, Karta of Hindu Undivided Family or a power of attorney holder. A non-resident Indian can be a nominee on repatriable basis. Nomination will stand cancelled upon transfer of shares. The Company will be fully discharged from its responsibility towards the legal heirs of a shareholder, if the shares are transmitted as per the nomination filed with the company, without any further reference to the legal heirs of a deceased individual shareholder(s) Where the space provided in the Form is not sufficient, shareholders are requested to attach separate sheet(s) giving details of distinctive nos. of shares. The Nomination Form should be filed in duplicate with the Company, who will return one copy thereof to the shareholder. Although Form 2B as prescribed does not provide for specimen signature of nominee, this has been suggested in order to facilitate smooth transmission of title to the nominee when the need arises. Please note that if physical shares are subsequently converted into electronic form, any nomination already filed will cease to have

54

effect; the nomination details furnished to the Depository Participant will prevail thereafter

ISIN

 International Securities Identification Number (ISIN) Each of the securities dematerialised in the NSDL depository bears a distinctive ISIN – an identification number. International Securities Identification Number (ISIN) is a unique identification number for each security issued in any of the International Standards Organisation (ISO) member countries in accordance with the ISIN Standard (ISO 6166). ISO 6166 was developed for use in an international (cross-border) as well as domestic trades. ISIN is a 12-character long identification mark. It has three components - a pre-fix, a basic number and a check digit. The prefix is a two-letter country code as stated under ISO 3166 (IN for India). The basic number comprises nine alphanumeric characters (letter and/or digits). The check digit at the end of the ISIN is computed according to the modulus 10 "Double-Add- Double". It establishes that the ISIN is valid. Securities issued by the same company, issued at different times or carrying different rights, terms and conditions are considered different securities for the purpose of allocating ISIN and are allotted distinct ISINs. In India, SEBI assigns ISIN to various publicly traded securities. Different ISINs are allocated to the physical and dematerialised securities of the same issue.

55

SEBI being the national numbering agency for India has permitted NSDL to allot international securities identification number (ISIN) for demat shares. The ISINs allotted by NSDL does not at any point of time breach the uniqueness of ISIN of physical form for the same security. ISIN for a security is allotted when the security is admitted to NSDL. The numbering system is simple. The numbering system of ISIN is in compliance with the structure of ISIN adopted by SEBI. International Securities Identification Number: 1. Issued by International Standards Organisation (ISO) member countries in accordance with ISO 6166. 2. ISIN is 12 digit alpha numeric number. 3. It has three components, prefix, basic & check digit. 4. Prefix is a two letter country code i.e. IN for India. 5. The basic number has nine alpha numeric characters. 6. The last digit is check digit. It ensures the ISIN is valid.

Numbering system of ISIN The numbering structures for securities in NSDL is of 12 digit alpha numeric string. The first two characters represent country code i.e. IN(in accordance wirh ISO 3166). The third characters represents the issuer type as detailed below:

56

Issuers type

Issuer type

code allotted

Central government

A

State government

B

Municipal corporation

C

Union territories

D

Company, statutory corporation, Baking company

E

Mutual funds including UTI

F

The list may be expanded per the needs. Maximum issuer types can be 35 (A to Z and 0 to 8. the pro-rata dividend shares are identified by 9). The next 4 characters (fourth to seventh character) represent company identity. The first 3 characters are numeric. The fourth character is alpha character. The numbering begins with ‘001A’ and continues till ‘999A’ and proceeds to ‘001B’. the next two characters (the eight and ninth characters) represent security type for a given issuer. Both the characters are numeric. The next two characters (the tenth and eleventh characters) 57

are serially issued for each security of the issuer entering the system. Last digit is double-add-double check digit.

The security types are planned which may be expanded as per the need as detailed below:Security type

code

Equity

01

Non voting equity

02

Convertible preference shares

03

Non convertible preference shares

04

Mutual fund units –close ended

05

Mutual fund units-open ended

06

Secured debentures

07

Unsecured debentures

08

Regular return bonds-promissory notes

09

Floating rate bonds

10

Deep discount bonds

11

Step discount bonds

12

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Warrants

13

RESEARCH METHODOLOGY Research methodology refers to the search for Knowledge. It is a way to systematically solve the research problem. In it we study the various steps that are generally adopted by the researcher in studying his research problem along with logic behind them. Research Methodology concerning a research problem or study provide answers to various questions like; why a research study has been undertaken, how the research problem has been defined, what data have been collected and what particular method has been adopted to collect the data, what technique has been used for analyzing the data and a host of similar other questions Though there are more than one alternative approaches available to the researcher, but this not enough to make the task of selecting the suitable research design simpler. Like the so-called suitable research design may require some in between approach. The objective of study being the main determinant of the validity and reliability of the method adopted the degree of usefulness of the scientific method. Since there are many aspects of research methodology, in line of action has to be chosen from variety of alternatives, so that individual choice of suitable method is further complicated and make a viable whole. The choice of suitable method is further complicated by the possibility of many permutations and combinations. The fair selection can be arrived at through the objective assessment and of course comparison of various alternatives. The finally selected line of action must ensure that this is indeed best one as against those rejected by the researcher. in addition, the circumstances 59

and problems also having a bearing in the choice. To count a fem, limitations could be imposed in the sense of funds available, time and urgency in conducting the research. So the final choice must be based on assessment of its advantage and disadvantages when weighted against affecting factors. Research methodology can be said to have four major components namely-Research design, Sample design, Data collection procedure and methods of analyzing and reporting the findings.

Research Design The research problem having been formulated in clear cut terms, the researcher will be required to prepare a research design i.e., he will have to state the conceptual structure with in which research would be conducted. The preparation of such a design facilitates research to be as efficient as possible yielding maximal information. But how all there can be achieved depends mainly on the research purpose. Research purpose may be grouped into four categories. (1) Exploration (2)Description (3) Diagnoses and (4) Experimentation. Exploratory research studies are those whose main purpose is that of formulating a problem for more precise investigation or of developing the working hypotheses from on operational point of view. Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or of a group Diagnostic research studies determine the frequency with which something occurs. Experimental research studies are those where the researcher tests the hypothesis of casual relationship between the variables.

60

Research design of this particular research study of dematerialization of shares is primarily based on descriptive and diagnostic research design. As descriptive and diagnostic research design describes the characteristics and determines the frequency with which something occurs respectively, similarly this research determines the characteristics of the individuals who deal in share and also determine the frequency of dealing on the basis of their characteristics.

Sample Design All the items under consideration in any field of inquiry constitute a ‘Universe’ or ‘Population’. A complete enumeration of all the items in the population is known as a census inquiry. This type of inquiry involves a great ideal of time, money and energy. Hence quite often a few items so selected constitute what is technically called a sample. The researcher must decide the way of selecting a sample or what is popularly known as sample design. A sample design is a definite plan determined before any data are actually collected for obtaining a sample from a given population. Samples can be either probability or nonprobability samples. With probability samples each element has a known probability of being included in the sample but non-probability samples are those based on simples do not allow the researcher to determine this probability. Probability samples are those based on simple random sampling, systematic sampling , etc where as non probability samples are those based on convenient sampling, judgment sampling etc.

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Data collection techniques The required data is collected both from primary as well as secondary sources. Primary Sources: The primary data was collected through structured unbiased questionnaire and personal interviews of investors. For this purpose questionnaire included were both open ended & close ended & mulple-choice questions. Secondary Sources: Secondary data is the data, which is collected and complied for different purposes, which are used in research for this study. The secondary data includes material collected from:Megazines & Bulletines- Brochure of unicon investment solutions. Internetwww.sebi.gov.in www.nseindia.com www.uniconindia.in SIZE OF SAMPLE

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The overall sample involved in the study consisted of 50 individuals. Keeping in view the limited resources of time, a limited sample of individuals. It was fixed before hand and every effort was made to cover the given number of individuals with available time for the collection of data for this project. The data was collected with the help of the questionnaire herself by the researcher.

Method used for analysis of study The methodology used for this purpose is Survey and Questionnaire Method. It is a time consuming and expensive method and requires more administrative planning and supervision. It is also subjective to interviewer bias or distortion.

Analysis of Data After the data have been collected, the researcher turns to the task of analyzing them. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences. The unwisely data should necessary be condensed into a few manageable groups and tables for further analysis. Thus researcher should classify the raw data into some purposeful and usable categories. In the process of analysis, relationships or differences supporting or conflicting with original or new hypotheses should be subjected to tests of significance to determine with what validity data can be said to indicate any conclusion

63

Interpretation The interpretation is done on the basis of the analyzed data and also some recommendations are given to fill the loopholes of the actual scenario.

DATA ANALYSIS AND INTERPRETATION Research is conducted for finding the solution of the problem. So to find the solution of the problem data analysis and interpretation is must. There are some questions related to this research to interpret the result. The sample size in this study consisted of 50 individuals and data analyzed from the response of these 50 individuals.

1. ARE YOU AWARE OF STOCK MARKET?

The basic purpose of this question is to know about how many people are aware of the stock market and its activities. NUMBER OF RESPONSES

% OF RESPONSES

YES

50

100

NO

0

0

RESPONSES

64

TOTAL

50

100

NO

Series1

YES

0

20

40

60

80

100

120

Analysis:This graph shows that all the 50 individuals were aware of stock market. So it can also be possible that investors will rise in near future.

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2. ARE YOU AWARE OF DEMAT ACCOUNT?

The basic purpose of this question is to know about awareness of demat account among respondents. NUMBER OF RESPONSES

% OF RESPONSES

YES

40

80

NO

10

20

50

100

RESPONSES

TOTAL

66

YES NO

Analysis:The above table clearly shows that from a sample size of 50 respondents, 40 individuals were aware of demat account.

3. DURATION FOR WHICH INVESTOR HAS BEEN TRANSACT IN THE STOCK EXCHANGE The purpose of this question is to know about the duration for which investor has been transact in stock exchange.

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NUMBER OF RESPONSES

% OF RESPONSES

LESS THAN 1 YEAR

20

40

1 YEAR

5

10

2 YEAR

10

20

MORE THAN 2YEAR

15

30

50

100

DURATION

TOTAL

68

LESS THAN 1 YEAR 1 YEAR 2 YEAR MORE THAN 2 YEAER

Analysis:The above table clearly shows that from a sample size of 50 respondents, 15 have been trading in the stock exchange for more than 2 years. 10 investors were trading for 2 years and remaining 25 for one year or less than a year.

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4. DO YOU TRADE- FREQUENTLY OR OCCASIONALLY?

This purpose of this question is to find out how many persons trade frequently or occasionally. NUMBER OF RESPONSES

% OF RESPONSES

FREQUENTLY

20

40

OCCASIONALLY

30

60

50

100

TRADE

TOTAL

70

FREQUENTLY OCCASIONALLY

Analysis:This chart shows that 30 individuals trade occasionally and 20 individuals trade frequently.

5. WHICH TYPE OF SCRIPTS YOU HAVE?

The purpose of this question is to know about which type of scripts the respondents have.

71

NUMBER OF RESPONSES

% OF RESPONSES

PHYSICAL

15

30

DEMATERIALISED

35

70

50

100

SCRIPTS

TOTAL

40 35 30 25 20

Series1

15 10 5 0 PHYSICAL

DEMATERIALISED

72

Analysis:Above graph shows that many individuals have dematerialised scripts and some have physical scripts.

RESPONSE

NUMBER OF RESPONSES

% OF RESPONSES

YES

30

60

NO

20

40

50

100

TOTAL

6. DO YOU CONVERT YOUR SHARES ELECTRONICALLY?

The basic purpose of this question is to know about how many persons are interested to convert their shares electronically.

73

YES NO

Analysis:This chart shows that 30 individuals wanted to convert their shares electronically and rest were not.

7. ARE YOU SATISFIED WITH DEMAT SERVICE PROVIDER?

The purpose of this question is know satisfaction about demat service provider.

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NUMBER OF RESPONSES

% OF RESPONSES

YES

45

90

NO

5

10

50

100

RESPONSES

TOTAL

100 90 80 70 60 50 40 30

Series1

20 10 0 YES

NO

Analysis:-

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This graph shows that most of the people were satisfied with demat service provider.

8. PROBLEMS

BEING FACED RELATING TO TRADING

BY THE

RESPONDENTS

This question tells us about the type of problems faced by the respondents. NUMBER OF RESPONSES

% OF RESPONSES

10

20

OTHER TYPE OF PROBLEM

20

40

NO PROBLEM

20

40

50

100

PROBLEMS NO TRANSFER OR BAD DELIVERY OF SHARES

TOTAL

76

NO TRANSFER OR BAD DELIVERY OF SHARES OTHER TYPE OF PROBLEM NO PROBLEM

77

Analysis:From the above chart we can see that 20 investors faced no problem due to the introduction of DEMAT. Nearly 10 respondents faced problems due to non-transfer and bad delivery of shares. Because of many sick companies being listed in the stock exchange, the problem of non-receipt of dividend can be found among 7 investors. There were 20 persons who were facing other problems.

Limitations Of The Research Study

•

Due to the lack of time, it was not possible for the researcher to approach all the people.

•

The respondents were asked to indicate their true responses to the questions being asked, but rather than giving the response, they

78

might have been in a form of expert comments which might have based the result of the study.

• The results of the study may not be universally applicable due to regional constraints.

•

Money was also considered as a major constraint during the research work.

• Personal biasness may be included in the research work.

SUGGESTIONS AND RECOMMENDATIONS

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• As many of the people who dealt in share market are aware of UNICON’S name but not of its services. So company should advertise its services , so that people can be made aware of all the services provided by the company.

• Most if the people are not finding any spare time to convert their shares electronically. So company should approach to such people at their doorstep to open their demat account.

• As far as people preference regarding opening of demat a/c is concerned then they mainly prefer two factors i.e. service and trust. So it becomes necessary for the company to take care of these two factors.

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BIBLIOGRAPHY • Unicon forms for opening depository and trading account. •

Study material of capital market and derivatives market of NCFM.

• Zikmund, William G; “Business Research Methodology”, Seventh Edition, Thompson South Western Publication • Websites Visited www.sebi.gov.in www.nseindia.com www.bseindia.com www.nseindia.com

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QUESTIONAIRE I am a student of M.B.A. from Doon Valley Institute of Engineering & Technology, Karnal, Haryana. You are required to fill this questionnaire to enable me to undertake the study on the said project. NAME:

_________________________________

CONTACT NUMBER:

_________________________________

OCCUPATION:

_________________________________

ADDRESS:

_________________________________

1. Are you aware of stock market? (a) Yes

(b) No

2. Do you deal in share? (a) Yes

(b) No

3. Are you aware of DEMAT? (a) Yes

(b) No

4. Are you aware of REMAT? (a) Yes

(b) No

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5. How long have you been transacting in the stock exchange? (a) Less than 1 year (c) 2 year

(b) 1 year (d) More than 3 year

6. Do you trade frequently or occasionally? (a) Frequently

(b) Occasionally

7. In which securities do you trade frequently? (a) Equity

(b) Bonds

(c) Debentures

(d) Futures & Options

8. Which type of script you have? (a) Physical

(b) Dematerialized

9. Why you have not dematerialized your script? (a) Lack of awareness

(b) Time constraint

(c) Liability of changes 10.Do you like to convert your shares electronically? (a) Yes

(e) All

(b) No

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11. On what basis you have taken your decisions of opening of demat

A/c? (a) Service

(b) Changes

(c)

Convenience 12.Are you satisfied with your demat service provider? (a) Yes

(b) No

13. What type of problems do you centrally face when you trade in securities? (a) Non transfer of shares (c) Bad transfer of shares

(b) Other type of problems (d) No Problem

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