Stock Holding Corp. of India Ltd.

MASTER OF FINANCE AND CONTROLBANARAS HINDU UNIVERSITY

SUMMER TRAINING REPORTON

PERCEPTION OF CUSTOMERSTOWARDS SHCIL AND ITS PRODUCTS

SESSION: 2008-10

Under the Supervision of: Prepared By:Mr. Kartikanand Jaiswal Jay Prashant EkkaBranch Manager, SHCIL MFC – 3rd SemesterKamachha, Varanasi. BHU, Varanasi.

ACKNOWLEDGEMENT

Working in an organization as a trainee provides a medium to look into and experience the practices and procedures of the corporate sector. The Stock Holding Corporation of India Ltd. gave me a lot of exposure of the capital market. During my training period I received unconditional help my every member of the Stock Holding Corporation.

Firstly, I would like to express my gratitude to Prof. Shyam Chandra (Dean, Faculty of Commerce, BHU) and to Prof B. Jha for their efforts to place me at SHCIL, Varanasi.

I am also thankful to Mr. Manu Raj Rai (Manager, SHCIL, Varanasi) for permitting me to work as a trainee in SHCIL. My sincere thanks to Mr. Karthikanand Jaiswal (Branch Manager, SHCIL) for giving his whole hearted support during my training period and providing me with valuable information. I am equally obliged to Mr. Rahul Singh for his guidance, cooperation and inspiration.

Finally, I would like to thank my friends, customers of SHCIL and all the people who helped me in the successful completion of my project.

Jay Prashant Ekka MFC, 3rd Semester

Faculty of Commerce, BHU.

PREFACE

In a professional course like MFC the significance of practical knowledge through summer training is imperative as one gets an opportunity to learn about a wide range of corporate activities.

Depositories in India till now have made way for the elimination of market risk associated with physical holding in the settlement of securities by providing a highly efficient clearing and settlement system. Having pioneered dematerialization Stock Holding Corporation of India ltd. is the first Depository Participant (DP) which is registered with the National Securities Depositories Ltd.

It has been my best and sincere effort to collect information from various sources to make this project effective. Due to shortage of time I am unable to give a detailed report but I have tried my level best to do justice.

In today’s competitive environment of depository services an attempt is made to understand the trading and settlement of securities through this project work. Any errors and omissions that might have crept in are totally unintentional. I shall always be grateful to all who post their valuable comments on this report.

CONTENTS

PART 1:

Introduction to SHCIL

Dematerialization Meaning Procedure

Re-materialization Introduction Features Procedure Precaution

Depository Introduction Advantages Bank-Depository-An Analog Services provided by depository

Depository Participant (DP) Introduction Opening an Account with DP

Depository in India NSDL CDSL

PART 2:

Products of SHCIL Add Shares Equibuy Fund Invest GOI Bonds Insurance Stock Direct Pension Funds

Services of SHCIL Custodial Services Depository Participant Services DEMAT Pledge Derivatives Services Clearing Member NRI Services

SWOT AnalysisPART 3:

Project Objective Research Methodology Analysis of Questionnaires Consumer View Chart in Relation to SCHIL Conclusion and Suggestion

Annexure

PART 1

INTRODUCTION TO SHCIL

Stock Holding Corporation of India ltd. (SHCIL) was incorporated at the special initiative of the government of India as a public ltd. Company in 1986. It has been jointly promoted and owned by the all India banks and financial institutions, viz., LIC, GIC and its subsidiaries, ICICI bank, UTI, IDBI, IFCI and IIBI, all leaders in their fields of business.

SHCIL began by offering custodial and post trading services adding depository services and other services to its portfolio over a period of time.

SHCIL has established itself in India as a one-stop solution provider in the financial services domain.

SHCIL VALUES

Safety and efficiency of operations is a hallmark of SHCIL. Professionalism and integrity. Customer first. Relationship building. Commitment to quality irrespective of asset size.

WHY WOULD YOU PREFER SHCIL AS A SERVICE PROVIDER

Well integrated front and back office, paper and electronic systems. A focused client relation team to manage your needs and queries. A single point contact for your comfort.

In-house capability to address all it needs in terms of software development, maintenance, back-office processing, database administration, network maintenance, backups and disaster recovery.

Multilevel security is maintained in software, applications and guards to access to various data, client and internal reports.

Expertise in running processes using digital signatures.

Regular audits, internal and external, by SEBI, depositories, clients and compliance to rules and regulations.

Constant review and benchmarking of processes to ensure adherence to global best practices.

Insurance cover with international re-insurance.

Full confidentiality of business operations.

DEMATERIALIZATION

Dematerialization is a recently introduced process by which share certificates are converted into electronic form. If you own shares of a company then you must

have the possession of the share certificates. Dematerialization means surrendering the physical form of shares to a depository and receiving the shares electronically.

A depository is like the central bank of the country and depository participants (DPs) are like the banks with which you can open an account so as to enable the depository to credit your account with these shares.

According to the securities and exchange board of India (SEBI) guidelines- banks, custodians and stock-brokers can become DPs.

An investor submits his shares to the DP who will in turn send the shares to the company for dematerialization. This is a process by which the company cancels the physical shares and credits your account with an equal number of shares. If you are holding shares for many years it is quite likely that the company may ask for a reconfirmation of your signature as there may be some differences in the signatures in their records and your current signature.

Once the account is opened and shares are dematerialized buying and selling of these shares is done through this account. The DP gives each investor or ‘account holder’ a passbook (just like a bank passbook) or a statement of holdings which is regularly updated. When shares are converted into the electronic form they will be credited to your account and if they are sold they will be debited. At the end of every fortnight you will receive a statement of account showing the number of shares debited and credited into your account. When trading is done through the electronic mode investors have to pay fees similar to the brokerage. However the charges are lower than the brokerage as the physical counting of shares is absent.While it is yet not compulsory that all the shares listed on the stock exchanges are dematerialized the NSDL regularly announces the companies whose shares have to be compulsorily dematerialized. But there is a steady increase in the number of companies trading in the dematerialized shares.

Overall, it is said that the benefits of having a dematerialized or book-entry holding through an account are: Modernism-electronic transactions take full account of modern IT facilities.Velocity of transactions-the transfer of securities by mere accounting entries allows for a rapid and efficient disposition of interests.Security-risk associated with physical securities such as delay or loss in transit, theft and mutilation are eliminated.The concept of an ‘odd lot’ in respect of dematerialized securities stands abolished as any amount can be a market lot. Sometimes dematerialized securities attract lower margin and lower interest rates compared to physical securities.

IS DEMATERIALIZATION OF SECURITIES COMPULSORY?

According to the depositories act, 1996, an investor has the option to hold securities either in physical or electronic form. However, SEBI has notified that settlement of trades in listed securities should take place only in the DEMAT mode. Although, trades up to 500 shares can be settled in physical form, physical settlement is virtually not taking place for the apprehension of bad delivery on account of mismatch of signatures, forgery of signatures, fake certificates, etc.

PROCEDURE FOR DEMATERIALIZATION

Open a DEMAT account with DP. Fill the DEMAT requisition form (DRF) and submit the same with the

physical certificate/s to the DP for dematerialization. DP defaces and sends the certificates to the issuer/registrar who credits an

equivalent number of securities in the DEMAT account maintained by CDSL. For each ISIN, a separate DRF has to be used.

REMATERIALIZATION

Re-materialization is the process by which a client can get his electronic holdings converted into physical certificates. The client has to submit the re-materialization request to the DP with whom he has an account. The DP enters the request in its system which blocks the client’s holdings to that extent automatically. The DP releases the request to NSDL and sends the request form to the issuer/R&T agent.Thereafter, the client’s blocked balances are debited.

FEATURES

A client can rematerialize his dematerialized holdings at any point of time. The re-materialization process is completed within 30 days. The securities sent for re-materialization cannot be traded.

PROCEDURE FOR REMATERIALIZATION

The client will submit a request to the DP for re-materialization of holdings in its account.

On receipt of the request form the DP will verify that the form is duly filled in and issue to the client, an acknowledgement slip, signed and stamped.

The DP will verify the signature of the client as on the form with the specimen available in its records.

If the signatures are different the DP will ensure the identity of the client. If the form is in order the DP will enter the request details in its DPM

(software provided by NSDL to the DP). While entering the details if it is found that the client’s account does not have enough balance, the DP will not entertain the request.

The DP will intimate the client that the request cannot be entertained since the client does not have sufficient balance.

If there is sufficient balance in the client’s account the DP will enter the request in the DPM and the DPM will generate a re-materialization request number (RRN).

The RRN so generated is entered in the space provided for the purpose in the re-materialization request form.

Details recorded in the RRN should be verified by a person other than the person who entered the data. The request is then released to the DM by the DP.

The DM forwards the request to the issuer/R&T agent electronically. The DP will fill the authorization portion of the request form. The DP will then dispatch the request form to the issuer/R&T agent. While processing the request, the issuer /R&T agent may report some

objections. Depending on the nature of objection, the issuer/R&T agent may reject the request or process it partially, seeking rectification for the remaining and send an objection memo to the DP.

The issuer/R&T agent accepts the request for re-materialization prints and dispatches the certificates to the client and sends electronic confirmation to the DM.

The DP must inform the client about the changes in the client account following the acceptance of the request.

PRECAUTIONS

The client has to mention the lot type in the re-materialization request form.

Securities sent for re-materialization cannot be traded. Before initiating a re-materialization request in a security, the client must ensure that he has sufficient free balances in that security in his depository account.

DEPOSITORY

INTRODUCTION

A depository is a facility for holding securities which enables securities transactions to be processed by book entry. To achieve this purpose the depository may immobilize the securities or de-materialize them (so that they exist only as electronic records). India has chosen the dematerialization route. In India, a depository is an organization which holds the beneficial owners’ securities in electronic form through a registered depository participant (DP). A depository functions somewhat similar to a commercial bank. To avail of the services offered by a depository the investor has to open an account with a registered DP.

ADVANTAGES OF DEPOSITORY SYSTEM

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

No stamp duty. Immediate transfer and registration of securities. Faster settlement cycle. No risk of buying fraudulent certificates. No courier/postal charges. Reduced record keeping. One investor account for all shares.

DEPOSITORY PARTICIPANT

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. As per the provisions of this act, a DP can offer depository-related services only after obtaining a certificate of registration from SEBI.

SEBI (D&P) regulations, 1996 prescribe a minimum net worth of Rs. 50 lakhs for stockbrokers, R&T agents and non-banking finance companies (NBFC), for granting them a certificate of registration to act as DPs. If a stockbroker seeks to act as a DP in more than one depository he should comply with the net worth criterion separately for each such depository. No minimum net worth criterion has been prescribed for other categories of DPs. NSDL requires a minimum net worth of Rs. 100 lakhs to be eligible to become a DP as against Rs. 50 lakh prescribed by SEBI (D&P) regulations.

OPENING AN ACCOUNT WITH DP

First an investor has to approach a DP and fill up an account opening form. The account opening form must be supported by copies of any one of the approved documents to serve as proof of identity (POI) and proof of address (POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening of account has been made mandatory effective from April 01, 2006.

All applicants should carry original documents for verification by an authorized official of the depository participant, under his signature.

Further the investor has to sign an agreement with DP in a depository prescribed standard format which details the rights and duties of the investor and the DP. The DP should provide the investor with a copy of the agreement and the schedule of charges for their future reference. The DP will open the account in

the system and give an account number, which is also called BO ID (beneficiary owner identification number).

The DP may revise the charges by giving 30 days notice in advance. SEBI has rationalized the cost structure for dematerialization by removing account opening charges, transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005.

Further, SEBI has vide circular dated November 09, 2005 advised that with effect from January 09, 2006 that no charges shall be levied by a depository on a DP and consequently by the 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 the transferor DP is a joint account, the BO account at transferee DP should also be a joint account in the same sequence of ownership.

BANK DEPOSITORY – AN ANALOGY

BANK DEPOSITORY

Holds funds in an account. Hold securities in an account.Transfers funds between accounts on the instruction of the account holder.

Transfers securities between accounts on the instruction of the account holder.

Facilitates transfer without having to handle money.

Facilitates transfer of ownership without having to handle securities.

Facilitates safe-keeping of money. Facilitates safe-keeping of securities.

SERVICES PROVIDED BY DEPOSITORY

Dematerialization (known as DEMAT) – converting physical shares into electronic form.

Re-materialization (known as REMAT) – is reverse of DEMAT, i.e. getting physical certificates from the electronic securities.

Transfer of securities – change of beneficial owner. Settlement of trades done on exchange connected to the depository. Pledge/hypothecation of DEMAT shares, viz., loan against shares. Electronic credit in public offerings of the companies. Non-cash corporate benefits, viz. bonus/rights – direct credit into electronic

form. Depository restricts the risk of fraud.

DEPOSITORIES IN INDIA

Currently there are two depositories operational in the country:(1) National Securities Depository Limited.(2) Central Depository Services Limited.

NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL)

Although India had a vibrant capital market which is more than a century old, the paper based settlement of trades caused substantial problems like bad delivery

and delayed transfer of title till recently. The enactment of depositories act in august 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standards that handles most of the securities held and settled in dematerialized form in the Indian capital market.

Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimize risk and reduce costs. At NSDL we play a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry.

In the depository system securities are held in depository accounts which are more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates.

CENTRAL DEPOSITORY SERVICES LIMITED (CDSL)

A depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a depository participant

(DP) who as an agent of the depository offers depository services to investors. According to SEBI guidelines financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a DEMAT account through any DP for dematerialization of his holdings and transferring securities.

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 paper-based 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.

CDSL was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. Some of the important milestones of CDSL system are:

CDSL received the certificate of commencement of business from SEBI in February, 1999.

Honorable union finance minister, Shri Yashwant Sinha flagged of the operations of CDSL on July 15, 1999.

Settlement of trades in the DEMAT mode through BOI shareholding limited, the clearing house of BSE, started in July, 1999.

All leading stock exchanges like the national stock exchange, Calcutta stock exchange, Delhi stock exchange, Ahmedabad stock exchange, et al have established connectivity with CDSL.

At the end of December, 2007, over 5000 issuers have admitted their securities (equities, bonds, debentures, commercial papers), units of mutual funds, certificate of deposits, etc. into the CDSL system.

PART 2

PRODUCTS OFFERED BY SHCIL

(A) ADD SHARES

INTRODUCTION

SHCIL arranges loan against DEMAT shares. Tie-up with reputed banks which offer you the most competitive interest

rates in the market. You can use the shares in your free account as collateral and take a loan

from any of our empanelled banks. SHCIL completes your documentation and processing and gives you a

cheque within 48 hours of application. This is a pure value add to your depository account with us. Add shares are available at SHCIL centers in all the major cities.

FEATURES

Loan against DEMAT shares held in the DP account with SHCIL. Competitive interest rates from a range of banks SHCIL has tied up with. SHCIL processes the entire paperwork required with the bank. The service is available at any of over 100 branches of SHCIL.

ADVANTAGES

Our tie ups with banks give you a wider range of banks to choose from. This leads to a wider range of specified and non-specified shares to get loan against.

The add shares team helps you with the paper formalities precedent to a loan.

You can now get a loan at a competitive interest rates and margins. This is a resultant of their tie up with a wide range of banks.

Add shares simplify long-winded loan procedures for you and facilitates early disbursements of funds.

Add shares are available at any of our branches numbering over 120.

(B) EQUIBUY

INTRODUCTION

Even after payments have been made we have to wait patiently to see those shares reflected in the DEMAT account. With the odd surprise of not seeing them at all which you cannot discount!

As your depository participant SHCIL assures you safe delivery of shares every time you buy on the exchange. We have lined up a panel of reputed brokers who process your orders on priority.

Our positions as the clearing corporations of leading stock exchanges ensures smooth and sure credits in your account.

An initial advance and timely replenishments into the purchase advance account take care of the payment for your purchases.

Go through the detailed EQUIBUY procedure and you will see how EQUIBUY in a one stop shop for your share purchases.

FEATURES

An EQUIBUY instruction from you gets the shares credited into your account the next day of payout.

Payment for your purchase made from a running account called purchase advance into which you remit an initial advance of Rs. 1000 and maintain a minimum balance of Rs. 250 at all times.

Choose one or more brokers from a list of 77 brokers empanelled with SHCIL. Registration with broker is not necessary if you are already registered under any of our other product schemes.

Purchase on BSE or NSE.

ADVANTAGES

Buy shares with a single instruction and get an assured credit of shares into your account the next day of payout. Leave the settlement procedures and broker interaction to us.

Affect a faster turnaround of your portfolio. EQUIBUY has a very nominal charge attached to it. An initial advance of Rs. 1000 in the purchase advance account and

replenishments, as and when necessary, take care of payment for your purchases.

Choose the exchange you want to buy from- BSE or NSE. Choose from a range of 77 SHCIL empanelled brokers to execute your

purchases. EQUIBUY from the SHCIL center closest to you. Select from 120 plus SHCIL

centers across the country.

PROCEDURE

If you are not already registered with one or more of our 77 empanelled brokers under any of our other product schemes, register yourself by filling up a broker registration form.

Fill up a remittance slip to open the purchase advance account by making an initial advance of Rs. 1000.

Approach any SHCIL branch and submit a purchase request slip.

Your request will be good till the end of the day. If the shares are not purchased before the end of the day your request lapses and a fresh request can be submitted the next day.

Your purchase request is transmitted to the broker as soon as you place request.

The broker executes the trade and confirms trade details to SHCIL. The payment for the shares purchased along with the service charge is made from the purchase advance account.

The shares get credited into your account the next day of payout.

TARIFF

On Delivery Basis

0.65% on the value of transaction on delivery basis with a minimum of Rs. 65 per client per broker settlement.

(C) FUND INVEST

INTRODUCTION

Fund invest is a basket of financial products ranging from fixed income securities like fixed deposits, infrastructure bonds and capital gain bonds to variable income securities like initial public offers (IPOs) of equities and mutual funds. It is an attempt to offer financial products that that cater to the various investment needs of our esteemed clients. An effort to guide the investor to a product

portfolio that best suits his risk-return profile. Applications for investments can be sourced from any of the SHCIL offices. Apart from guiding our investors to pick up the right combination of investment instruments we help them in ‘after-sales’ service by acting as an interlocutor between the investor and the issuer of the securities. SHCIL is an AMFI registered mutual fund advisor (ARMFA).

FEATURES

At present, SHCIL is distributing schemes of 28 different mutual funds. All these funds offer a wide variety of investment option depending on the risk appetite of the investor. Some of the major categories are:

Debt funds: The debt funds have the mandate of investing primarily in debt papers.Equity funds: The equity funds have the mandate of investing primarily in equities.Balanced funds: The balanced funds have the mandate of investing both in equities as well as debt papers.Capital gain bonds come under 54EC capital gains bonds, where the investors get exemption from capital gain tax. These are ‘on-tap’ issues. At present, SHCIL is distributing capital gain bonds of rural electrification corporation, national housing bank, small industries development bank of India and national highway authority of India. Infrastructures bonds are issued by ICICI bank and IDBI, with section 88 as the main feature.Private placements: debt papers issued for private placement with structural obligations by the state and central government typically targeted for trusts and provident funds are distributed by stock holding.Fixed deposits: fixed deposits with high investment rating and issued by blue-chip corporate are distributed by us. These papers generally offer 50 to 100 basis points more than bank fixed deposits of comparable period. At present, we are distributing IDBI SUVIDHA fixed deposits and HDFC fixed deposits.

Initial Public Offer: IPOs offered by blue-chip corporate can be subscribed from stock holding. Issues recently distributed by us are Canara Bank, Allahabad Bank, Bharti Tele and I-Flex.

(D) GOI BONDS

INTRODUCTION

Savings bonds are issued by RBI on behalf of government of India in the following series:8.0% taxable bonds: These bonds are held in electronic form in an account called bond ledger account (BLA). Bond ledger accounts can be opened and operated with RBI designated receiving offices. SHCIL has been designated as one of the receiving offices by RBI for this purpose. Subscriptions for savings bonds can be submitted at any of our branches.Savings bonds being sovereign in nature are absolutely safe and an attractive investment option in the current volatile market situation.

The following categories can subscribe to savings bonds:

Category of investor 8.0% (taxable)

Individual His or her individual capacity. Individual capacity on joint basis. Individual capacity on anyone or survivor basis. On basis of a minor as father/mother/legal guardian.

HUF (Hindu Undivided Family)

Charitable Institution Charitable institution to mean a company

registered under section 25 of the Indiancompanies act, 1956.

An institution which has obtained acertificate of registration as a charitableinstitution in accordance with a law in force.

Any institution which has obtained a certificatefrom income tax authority for the purpose ofsection 80G of the income tax act, 1961.

University

University means a university established orincorporated by a central, state or provincialAct and includes an institution declared underSection 3 of the University Grants CommissionAct, 1956 to be a university for the purposes ofthe act.

FEATURES

The salient features of the bonds are listed below:Feature

Investment limit

Interest option

8.0% (taxable)

Minimum investment is Rs. 1000 and there is no maximum limit.

Payable half yearly on 1st Feb., 1st Aug

Tax benefits

Transferability

Nomination

Repayment

Premature encashment

or cumulative on maturity.

Interest is taxable under IT Act, 1961. Exempt from wealth tax under Wealth Tax Act, 1957.

Non- transferable, non tradable and cannot be used as collateral for borrowings.

Available. Only sole holder or the surviving holder can nominate.Repayable on expiry of 6 years from date of issue. No interest would accrue after maturity.

Not available.

ADVANTAGES

Hassle free maintenance: the GOI bonds held in electronic form in an account called bond ledger account. This ensures smooth investing minus paperwork.

Electronic clearing services: you can avail of electronic clearing system (ECS) services. This ensures automatic credit of benefits and redemptions when they accrue.

Easy access: you can apply for subscriptions into these bonds in any SHCIL center across the country.

Dispatch: certificate of holdings are dispatched to the client through courier on realization of subscription.

PROCEDURE

Subscription is a very simple process. Obtain the application form from any of SHCIL notified centers across India. SHCIL officials will assist you in filling up of

your application form. Fill up all the relevant columns provided in the application form. E.g. for ECS facility, a proof of the ECS account like cancelled Cheque/bankers certification authenticating the account number and MICR details. Attach a Cheque /draft/pay order in accordance with the series of subscription you want to make for the requisite amount in favor of:‘Stock holding corporation of India ltd. a/c GOI 8.0% savings (taxable) bonds,A certificate of holding will be issued specifying the investment(s) made under the bond ledger account. The date of investment will be the date of realization of the instrument(s).

CHECKLIST

Kindly attach the following documents as per the checklist below:

Document 8.0% (taxable)

ECS mandate documents

Power of attorney documents (if appointed)

HUF declaration (for HUF investors only)

Certificate of identity – for address change and nominee claims

Minor – birth certificate, legal or natural guardian certificate

Form 60 or PAN for investments above Rs. 50000.

Charitable institutions- TDS exemption certificate from IT

department, board resolutions, trust deed

Form 15H (individuals claiming exemption of TDS)

Universities – incorporation certificate under section 3 of the

University Grants Commission Act, 1956.

(E) INSURANCE

INTRODUCTION

SHCIL, a company promoted by insurance majors and financial institutions, is a corporate agent of LIC for life insurance products and NIA for general insurance products. SHCIL has a dedicated team of IRDA certified insurance advisors to provide all services relating to insurance. We also provide free professional advice to clients on need base insurance. SHCIL has 100 odd branches all over India to take care of all your insurance related queries and needs.

FEATURES

An insurance policy compensates you against the financial impact that can arise following loss, damage of destruction of your property (such as home or vehicle) or your health or life.

A fundamental principle of insurance is to put you in the same financial position after a loss or accident that you enjoyed before the loss. This is relatively easy with repair or replacement of (say) a car, but is much more difficult with the loss of life. The insurance policy is a contract and like any contract contains clauses and conditions. Claims are settled in accordance with the conditions detailed in the policy.

SHCIL distributes life insurance policies of LIC and non-life insurance policies of NIA.

The service is available at any of over 100 branches of SHCIL.

LIC PRODUCTSKey Man KEY MAN INSURANCE

Children Insurance Policy Komal Jeewan plan 159 Jeewan Kishore plan 102 Jeewan Chayya plan 103

Endowment Policy Endowment with Profits plan 14 Limited Payment Endowment with Profits plan 48 Jeewan Mitra plan 133 Jeewan Anand plan 149 Joint Life (Jeewan Saathi) Policy plan 89

Retirement plan Retirement plan

NIA PRODUCTSMEDICLAIM POLICYFIRE INSURANCEPRIVATE CAR INSURANCEHOUSEHOLDER’S POLICYMEDICLAIM POLICY

The insurance policy can be used to protect the insured party against expenses incurred for hospitalization for illness/injury/diseases as well as domiciliary hospitalization. Suitable for:

Each and every person aged between 5 and 75 years of age. Children aged between 3 months and 5 years have to be insured along with their parents.

Government or private institutions for their employees. Clubs or associations for their bonafide members.

For more details contact: insurance@stockholding .com

FIRE INSURANCE

This policy offers protection against loss or damage of property/materials caused by fire. The insurance should be taken for a maximum amount of its current value after considering factors of wear and tear as well as depreciation.Suitable for:This policy is suitable for every individual or corporate body with

Insurable interest signifies the right to insure. The person or corporate body must be legally competent to enter into a fire insurance contract.

PRIVATE CAR INSURANCE

Risks coveredThis insurance policy protects the motor vehicle from loss or damage:

By fire, lightening, self-ignition, explosion, burglary, house breaking or theft.

Riot or strike. Flood, earthquake, cyclone or inundation. Transit by road, air, elevators or lifts. Liability for third party’s injury or death, third party property and towards

the paid driver too. Drunken driving.

HOUSEHOLDER’S POLICY

The householder’s insurance policy comprises of ten sections covering the insured’s building, fixtures and fittings, contents, jewelry and valuables, television sets and VCR’S, bicycles, accompanied baggage as well as personal accident and public liability benefits. Of these ten, the insured party must opt for at least three sections and section 2 is compulsory.

If the insured party opts for cover for more than 4 sections excluding compulsory sections, a discount of 15 % is on the non tariff sections. For more than 6 sections, excluding sections 1 and 2, 20 % discount is offered on non tariff sections.

(F) STOCK DIRECT

INTRODUCTION

Stock direct has changed the way you look at trading in securities. From your desktop you can now send instructions for buying/selling shares. A three way hands shake between leading brokers, national and international banks and SHCIL is the crux of stock direct.Stock direct – India’s first online trading platform was launched in 1999. Today stock direct is the most secure online trading platform which combines encryption technology/digital signature features. A few clicks will seamlessly check your funds and security positions, route the order to the broker of your choice and do the necessary fund and share movements for you.

FEATURES

A single instruction enables you to combine your trading, fund and shares transfer with SHCIL taking care of the settlement.

Trade from home on the internet with floppy containing stock direct software.

Security measures based on encryption and digital signature technology make your online deals 100% secure.

Open a purchase advance account with SHCIL to facilitate your fund transfers.

Choose the exchange to trade from BSE and NSE.

ADVANTAGES

One Stop ShopGive a single instruction towards funds confirmation for buy orders, order routing to your broker and fund and share movements for settlement purpose.

ConvenienceTrade at home through net.

SecurityDigital signature technology based on 128 bit encryption makes your transactions 100% secure.

Cost effectiveNo minimum value of transaction.

Choice of Stock ExchangesBuy/sell shares on BSE/NSE

PROCEDURE

If you already have a DEMAT account with us, fill up a conversion form to convert your DEMAT account to stock direct. If you do not have a DEMAT account, fill up a DEMAT account opening form and submit it at any of our branches.

Register with any of our empanelled brokers by filling up the broker registration form and submit it along with the account opening/conversion form.

Open account with SHCIL, a running account called the purchase advance by remitting an initial advance of Rs. 1000 by way of Cheque /DD.

TARIFF

Brokerage0.50% with a minimum of Rs.50 per client per broker per settlement*.Normal ISA charges applicable as per client’s tariff scheme. Service tax applicable as per GOI notifications.Media charges (one time): Rs.100 + Service tax.

(G) PENSION FUNDS

INTRODUCTION

SHCIL offers pension fund administration services to pension fund trusts. The pension fund scheme administered by the trust could be a defined benefit or a defined contribution scheme. For both the scheme types, SHCIL offers the entire range of services that include design, development and maintenance of a customized pension.

FEATURES

Services Offered to a Defined Contribution Scheme

Coordination with all client locations/branches for receipt of monthly contribution data of members.

Pension contribution account maintained at individual member level. Reconciling contributions with remittance amounts. Settling members claim on separation. Liaoning with insurer for purchase of annuity. Handling disbursements to members on commutation.

Distribution of earnings to eligible members, annually. Providing account statement to members annually. Maintain books of accounts of the trust. Handling audit and filing tax returns.

Services offered to a defined benefit scheme Service records of members maintained in electronic form. System generated pension orders, uniquely referenced and supported by

necessary documents. Tracking pension orders during the period of survival of member. Updating of software to incorporate changes taking from time to time in

pension rules and regulations.

ADVANTAGES

Customized pension fund administration software to meet the unique features of the pension scheme.

Records of members maintained in electronic form to enable quick access and retrieval of data.

System generated pension orders, uniquely referenced with necessary supporting documents.

Employees benefit from timely release of pension orders. Substantial saving in cost achievable through outsourcing.

Benefit from SHCIL’s vast and rich experience in providing back office services to the financial services industry as a whole and in the area of pension administration in a particular.

Application of latest IT technology to smoothen operations and achieve speedier settlement.

Benefit from the wide network of SHCIL offices across the country.

SERVICES OFFERED BY SHCIL

(1) CUSTODIAL SERVICES

INTRODUCTION

SHCIL provides first-rate custodial services to India’s leading Financial Institutions, Insurance Companies, Mutual Funds, Foreign Institutional Investors (FII’s), Banks, Indian and Foreign Venture Capital Companies, Funds, PF Trusts & Corporate.SHCIL,s core competence in custodial business spans 18 years, with a dedicated pool of trained and experienced professionals working literally round the clock using state-of-the-art computer systems and world class technology. SHCIL maintains dedicated communication channels, well connected to client institutions, stock exchanges, clearing houses and depositories, thus maintaining process and quality leadership.

As a custodian entrusted with sizable assets, SHCIL is continuously leveraging its scale and capabilities to help its clients mitigate risk and optimize efficiencies with greater control.

CLEARING AND SETTLEMENT SERVICES

POST TRADING SERVICES

SHCIL has specially trained personnel handling thousands of trade instructions involving large values on sophisticated systems using digital signature on STP (straight through processing) systems, ensuring smooth trade confirmations to stock exchanges. SHCIL provides the choice of multiple STP service provides enabling competitive advantage of efficient settlements. SHCIL seamlessly monitors trades and ensures failed trade management with reporting and resolution of mismatches, etc. At SHCIL, a client has the flexibility of settlement of funds through a wide panel of banks having RTGS facility.

SETTLEMENT SERVICES

Most of the institutional trades are settled through the clearing house of the stock exchanges. As a custodian, SHCIL facilitates timely settlement of funds and securities. Funds are collected /deposited from/to client and settled with the clearing houses.

Most of the institutional trades are settled in the depository mode. For the institutional segment alone, SHCIL has a unique clearing code on the two principal stock exchanges and separate DPM units on both NSDL and CDSL. This ensures smooth settlement of transactions on both exchanges/depositories, based on the deliverables and receivables received by them for each settlement. Daily verification of settlements (auction/normal) facilitates smooth reconciliation of settlements of client’s trades and mitigates systemic risk.For debt market deals SHCIL ensures timely movement of securities and funds.

For the occasional delivery and receipt of securities in the physical mode, SHCIL ensures prompt scrutiny, processing and lodgment of securities with the respective company/ registrar and transfer agent, with the objective of final transfer to the purchaser, with objections handling if needed. SHCIL also ensures that delivery of physical securities to exchanges is handled strictly as per exchange regulations.

PHYSICAL CUSTODY (VAULT) SERVICES

SHCIL has extensive vault capacity with state-of-the-art technology. This includes tracking with bar-coding techniques. Certificates are held in customized, fire resistant ‘modular sliding storage units’, with automated location tracking and logs with tight security.There are comprehensive document tracking and storage systems in place to hold investments in physical and electronic form. SHCIL tracks each and every security in the custody with absolute ease and tracks the status of investments at any point of time.Other security features include circuit TV, smoke detectors and fire extinguishers which are installed in the premises. SHCIL relies on audit trials and physical reconciliation continuously to reconfirm validity of systemic data. SHCIL also periodically seeks reconfirmations from internal and statutory audit firms for adherence to the established best practices.

INSTITUTIONAL DP SERVICES

SHCIL has installed dedicated DPMs (depository participant modules) on both the depositories, viz. NSDL and CDSL. A dedicated institutional DP team at SHCIL addresses your need for all core DP services like account opening and maintenance, conversion of physical holdings into electronic form, settlement of trade instructions, re-materialization, repurchase and pledge instructions, providing of holding and transaction statements and daily reconciliation of clients holdings.

SHCIL also provides special services like electronic credit and corporate action follow up, reporting of saleable holding positions required by many fund managers, monitoring of CP redemptions, prepayments and providing customized reports like put/call forecasts, logical holdings and non equity holding reports.

ASSET SERVICING

SHCIL has dedicated teams to handle the various aspects of asset servicing. The corporate actions team ensures forecast of all corporate actions and benefits accruing on a client’s holding, timely collection of monetary and non monetary benefits and cover all activities relating to a corporate event like calculation of entitlements, reconciling with companies/registrars prior to due date, collection of monetary corporate actions from the premises of company/registrar and transfer of same to clients. In case of any shortage, active follow-up with each company. Customized reporting to clients on the status of corporate actions is done periodically.The primary markets team takes care of applications on behalf of clients for primary market issues, calculates the entitlements, follows up for allotment or refunds and sends customized reports to clients.The dedicated redemptions team tracks the payouts of various debt instruments held by SHCIL’s clients and monitors put/call options. This team ensures timely monetary collection and deposits and keeps track of the outstanding amounts and reinvestments.At the heart is the support provided by a highly specialized ‘Databank’ team, which is unique to SHCIL. This team tracks over 8500 companies, over 12000 issued securities, 2500 registrars besides all relevant information available in all leading stock exchanges and depositories. The team ensures prompt availability of information on all corporate announcements, ISIN listings, etc. to the custodial teams and the information solely is for the benefit of SHCIL’s clients.Thus SHCIL is equipped to handle all types of instruments, listed on the BSE and NSE, money market instruments like CPs and CDs, all kind of debt instruments and unlisted securities.

CLIENT RELATIONSHIP MANAGEMENT

Every institutional client is assigned to an experienced client relationship manager who assists in resolving special issues relating to the client.Over and above the services offered we have a premium offering called ADVAIT, an integrated, web based, online reporting system which provides a single window access to institutional reports with enhanced security features.

(2) DEPOSITORY PARTICIPANT SERVICES

INTRODUCTION

Our depository participant services address your individual investment needs. With a parentage of leading financial institutions and insurance majors and a proven track record in the custodian business, we have reiterated our past success by establishing ourselves as the first ever and largest depository participant in India.Form a tentative foray in 1998 into the individual investor arena to servicing around seven lakhs accounts, we have endeavored to constantly add and innovate to make business a pleasure for you. Our networked branches ensure we are available where you look out for us. Fourteen depository participant machines (DPMs) connected to NSDL and seven connected to CDSL ensure fast and direct processing of your instructions.Our customer-centric account schemes have been designed keeping in mind the investment psyche of our clients. Your DP account with us takes care of your depository needs like dematerialization, re-materialization and pledging of shares.Matching of your scanned signature on every debit instruction with a digitally scanned original in our system makes all your trading transactions absolutely secure. A proactive backup of tour instructions prior to execution in the depository makes us oblivious to system crashes.At SHCIL we place a very high premium on client reporting. Periodic statements sent to you keep you informed of your current account status. Dedicated

customer care lines manned by trained staff answer your queries on DEMAT/trades/holdings. The latest in client response at SHCIL is Interactive Voice Response (IVR) system for round the system for round the clock information on your account. Registration on our website, SHCIL interactive, enables you to check your account – related information, stock market reports and statistics, corporate benefits declared by companies, real-time quotes of scrips on BSE and NSE and so much more online.

OPEN ACCOUNT

Before you open your account…. You can collect your account opening form from any of our branches or

download it from our site itself. As prescribed by depository bye-laws, accounts have to be opened in the

exact order in which the names(s) appear on the share certificate. Remember that holding pattern AB is not the same as BA. However, minor

differences like abbreviations, spelling mistakes can be ignored provided signatures recorded with the registrar/company are the same.

GET YOUR ACCOUNT OPENING FORM DETAILS RIGHT

Check your form against these details: All columns are filled in. write NA wherever not applicable. Bank account number with complete address and 9 digits MICR numbers

are filled correctly. This will facilitate effective disbursement of monetary corporate actions into your account.

Signature of account holders are always in black. If you would like to receive credit of shares purchased directly into your

account, mark standing instruction as ‘yes’.

YOUR ACCOUNT IS OPENED

Once your account is opened, you will be allotted a client identity number. You will be sent an operating kit containing:

Details of your account as recorded by SHCIL. Copy of the agreement entered into with SHCIL. ‘Delivery instruction by client’ booklet allotted to your DEMAT account. This

booklet helps you transfer shares from your account to broker account and other accounts.

Now you are ready to operate your DP account.

IMPORTANT POINTS

PAN mandatory. SMS alerts for debits and failed trades provided by NSDL. CDSL is providing

only for debits. Hence clients may get their mobile number and SMS flag updated.

As per the latest NSDL guidelines, client may give local address or correspondence address, depending on his preference to receive the communications from the companies.

Complete address of the bank branch, bank account number, account type and 9 digit MICR number is mandatory. Please provide the specimen copy of a Cheque for noting the correct 9 digit MICR code.

At the time of account opening, clients are requested to provide the proofs for identification and address. The list may be provided.

Thumb impressions should be attested by a magistrate or a notary public or a special executive magistrate.

NSDL does not have the facility to operate a beneficiary account on ‘either or survivor’ basis.

The power of attorney should either contain a clause which gives power to sell or to deal with securities generally or a clause which gives power to operate depository account. NSDL has provided a sample clause in its circular number: NSDL/PI/2000/982 dated June 23, 2000. The sample clause is as follows:

“To sell or otherwise deal with or dispose-off and to purchase, subscribe or otherwise acquire in any manner from the market or under public or rights issue or otherwise and accept the transfers of any stock, funds, shares, debentures, government and other promissory notes, securities, bonds, annuities or other mercantile negotiable instruments which shall or may at any time belong to me or which hereafter be transferred to me, whether solely or jointly and whether in my own right or having any other interest of whatsoever nature and however arising and in any capacity whatsoever including those belonging to others with my name and for such purposes to sign, execute or endorse all instruments of transfer and other documents for any purpose whatsoever by virtue of these present”.

NOMINATION FOR DP ACCOUNTS – INDIVIDUAL(S) BENEFICIARY ACCOUNTS

As per the instructions received from the depositories, we can take cognizance of nomination only if it is submitted in the prescribed format and the same ahs to be registered with the depository participant (DP) under a ‘nomination registration number’ (NRN). In the absence of NRN, DP will not be able to transmit the securities in favor of the nominee only if it is registered and after duly submitting the prescribed documents.

If nomination has not been registered, account holders may submit the nomination form in the prescribed format to the nearest SHCIL center. On registration of the nomination, the NRN will be communicated to the account holder(s). In case nomination is not registered, securities can be transmitted to legal documents as per depository guidelines.

MAINTENANCE

Change in Permanent/Correspondence Address

A request letter (format available on the site) signed by all the holders are required along with this photocopy of proof of identification and proof of new address is required. Please bring the originals with you for verification purpose. Client or the authorized bearer can visit our branch for the same. Copy of the last transaction statement received from SHCIL is also required.

Change in Signature

Request letter (format available) signed by the client. The new signature to be attested by the bank. The request may be submitted along with the copy of POI and the photocopy of the latest transaction statement received from SHCIL.

Addition of PAN/MAPIN

Request letter by the client giving the PAN/MAPIN number.

Account with Power Of Attorney

These accounts can be operated by both the client and the POA holder. In case the client has given the POA in favor of two or more persons, then the mode of operation of the POA holders is also to be mentioned. In case the power of attorney is to be revoked, a letter signed by the client is required.

Change of Telephone Number

Request letter signed by all the holders, with a photocopy of the recent telephone bill and proof of identification of one of the holder.

Instructions by Fax

Clients may avail this facility by faxing their delivery instructions to SHCIL, by executing the fax indemnity. The format of the indemnity is as follows:

Change in Standing Instruction

For recording any change in the standing instruction (for receiving direct credits) in the DEMAT account, we require a letter signed by all the holders.

Change in Power Of Attorney Details

If you have given POA details and you wish to operate the account yourself, the POA has to be revoked by you in writing.

DEATH OF BENEFICIARY ACCOUNT HOLDER(S) – TRANSMISSION OF ACCOUNT

Transmission of account takes place in the event of the death of the beneficiary account holder(s). There can be three situations in transmission of account. See which category you fit into and follow the relevant procedure:

(1) When the account has joint holders and one dies.(2) When the account has a sole holder with a nominee.(3) When the account has a sole holder without a nominee.If the shares are transmitted to beneficiary account of surviving holders and this beneficiary account is in a DP other than SHCIL. Classify the transmission case into the above categories. Over and above the documents explained above, the client master list from

the target DP has to be submitted.Freezing Of Account

An account is frozen /suspended: Only on your instruction. By competent authority, i.e., by the depository/SEBI. On receipt of court order.

De-freezing Of Account

De-freezing of an account takes place: Only on your instruction. For de-freezing pledge accounts, your instruction has to be accompanied by

bank authorization.

(3) DEMAT

De-materialization is the process of conversion of shares from physical form to the electronic mode. Our dedicated DEMAT team enable you to convert your physical holdings/debentures/bonds/G-SECS into electronic mode in a quick and hassle free manner.TRANSPOSITION CUM DEMATERIALIZATION

The clients can get the securities dematerialized in the same account if the names appearing on the certificates match with the names in the DEMAT account but are in different order. This can be done by submitting the certificates along with the transposition form and the dematerialization request form (DRF).

TRANSMISSION AND DEMATERIALIZATION

In case of death of one or more of the joint folders, the surviving holder(s) can get the name(s) of the deceased deleted from the security certificate and get the same dematerialized. Notarized copy of the death certificate, transmission form as per annexure OB and the dematerialization request form (DRF) have to be submitted by the surviving joint holder(s) along with the security certificates.

As per SEBI, scrips can be divided as: Scrips Eligible For DEMAT

These scrips can be traded either in physical or electronic form. Scrips falling under compulsory DEMAT

These scrips can be traded only in electronic form. Submit DEMAT Request Form.

Once your demat account is opened with us and you have received your client identity number, you can start dematerializing your shares. You can submit the shares over the counter at any of our branches. Do go through the tips given on filling up the DRF to avoid rejection.

Your Shares Are Dematerialized

When the company gives you credit, these shares will reflect under ‘free’ column. Now you can sell these shares. In case the company is not satisfied with the details furnished, it will reject the shares.

If your shares have been rejected by the company, SHCIL will forward the shares to you on receiving them from the company.

(4) PLEDGE

You can pledge or hypothecate your dematerialized shares against loan or credit facilities extended by a pledgee who also has an account with a DP.

The Pledge Procedure

Pledgor fills in a form requesting the DP to pledge the shares and hands it over to the DP.

If the form is complete in all respects, the DP processes the form and generates a pledge/hypothecation instruction number for the request.

Securities to the extent of the instruction are debited from free or locked-in balances and credited as pledged balances of the Pledgor so that they cannot be used for any transactions.

The pledgee will submit a form to its DP to accept/reject the pledge/hypothecation request.

If the pledgee accepts the request by the pledgor, the acceptance is communicated electronically to the pledgor’s DP. Once the pledge’s DP confirms the acceptance of the pledge, the pledgor cannot cancel the pledge/hypothecation order. The pledgee’s DP executes the pledge/hypothecation request as per the instructions given.

In case the pledgee rejects the pledge request, the pledgor’s DP is intimated electronically. Now the securities which were earlier credited as pledged balances will be credited to free/locked-in balances.

Once the loan is repaid by the pledgor, the pledgor initiates the closure of the pledge. The request for the closure is transmitted electronically to the pledgee’s DP. The pledgee’s acceptance/rejection of the request for the closure of pledge is transmitted electronically to the pledgor’s DP.

If the pledge is closed, the securities will be reflected as fee/locked-in balances.

In case the pledgor defaults in repaying the loan to the pledge, the pledge instructs his DP to invoke the pledge/hypothecation.

What You Need to Do?

IF YOU ARE A PLEDGOR IF YOU ARE A PLEDGEESee to it that: The pledge/hypothecation request The form for accepting/rejecting the Pledge/hypothecation request iscomplete in all respects. The form agreement number, closure date, invoking the pledge/hypothecationpledgee details and details of the request is complete in all respects.securities. The form submitted forclosure of pledge/hypothecation is complete in all respects.

(5) DERIVATIVE SERVICES

SHCIL provides clearing services for derivative segment of BSE/NSE and commodity segment of MCX / NCDEX.

(6) CLEARING MEMBER

INTRODUCTION

SHCIL’s long standing association with clearing members has enabled it to develop services based on an understanding of their working and their requirement for timely and accurate information. We accept deposits of base capital and additional base capital requirements stipulated by NSE for clearing members trading on its capital market segment. Besides, our new products with a broker empanelment clause ensure a mutually beneficial tie-up. Clearing members stand to earn a steady income from our product transactions and new add to their client base, while we capitalize on their rapports with the market.We currently offer depository services to more than 680 clearing members of various exchanges connected with NSDL and CDSL. Our customer care lines answer all your DP queries while the Interactive Voice Response (IVR) system gives you information on your account and other valuable data like CC calendar details, tariff, ISIN information, etc. via telephone, fax and e-mail.

ADVANTAGES

For institutional and retail clearing members we have customized tariff for clearing members benefitting.

Brokers having very high average trade value. Brokers with big retail clientele.

Special tariffs for : CM principal accounts. NSCCL CM accounts. Unified settlement pool accounts on CDSL.

SHCIL customer care help lines give timely and accurate information to CMs. The interactive voice response (IVR) system at SHCIL gives round the clock information on holdings and transactions, pay-in/pay-out details, overdue cum holding details, etc. via telephone, fax or e-mail.

Updated transactions statements are available on the website free of any charge whatsoever. Members have a choice of accessing their statements date wise for the last one month or settlement wise for the same period. Current trading day transactions are also made available, updated to the hour.

Besides the transaction statements, the delivery-out report, which is an extremely critical report for clearing members, is also made available on the website, updated to the hour.

OPEN ACCOUNT REQUIREMENTS

In case of proprietor’s account, if authorized signatory is a person other than the account holder; then the power of attorney is to be submitted by the proprietor giving authority to that person.

IF YOU ARE SHIFTING ANOTHER DP TO SHCIL:

Account opening form: Board resolution.

Memorandum of association. Authorized signatories (for corporate). SEBI registration certificate clearing indicating that it is for stockbroker. Closure letter addressed to old DP duly stamped and acknowledged by old

DP. Closure letter and shifting letter has to be on the letterhead of CM. Closure letter should be duly stamped and acknowledged by old DP. Shifting letter addressed to NSDL stating :

CM nameOld CM nameOld CM BP IDOld DP nameNew DP name.

IF YOU ARE OPENING A FRESH POOL ACCOUNT:

Account opening form Board resolution. Memorandum of association. Authorized signatories (for corporate). SEBI registration certificate clearly indicating that it is for stockbroker. Letter from stock exchange stating CC CM ID. In case of ISE mention on the letter:

Subject: Allotment of CC CM ID.

CUSTODIAL SERVICES FOR CM

CUSTODIAL SERVICES FOR BASE CAPITAL/ADDITIONAL CAPITAL REQUIREMENTS

We accept deposits of base minimum capital (base capital) and additional base capital as stipulated by NSE for clearing members to be able to trade on its capital market segment. The securities being deposited shall be subject to legal and beneficial ownership of :

TM clearing member / spouse in case of individuals.- Any of the partners/their spouses in case of partnership.- Any of the directors in case of corporate TM clearing member.

What qualifies as deposit?The following securities can be deposited:

Listed equity shares of approved companies subject to 15%. Margin. Equity shares of approved companies in DEMAT form subject to 15 %

margin (Nifty Scrips) and 25% margin (30 other scrips pertaining to junior nifty group).

Listed units of mutual funds subject to 155 margins. Unlisted units of mutual funds subject to 15% margin of the NAV of the

units prevalent on the last day of the preceding month. Listed PSU bonds subject to 15% margin. Other debt securities admitted for trading on wholesale debt market

segment of NSE subject to 15% margin. Listed GOI/treasury bills subject to 10% margin. Units under units scheme 1964 of UTI to be valued at the lowest of the

repurchase price prevalent in the preceding 12 months. Deposit of fixed deposit receipts (FDRs) issued by approved banks. In

case of FDRs, the members have to submit the following :- Original FDR issued by any approved bank and drawn and drawn on

specified cities.- A letter from the bank in a specified format.- A letter from the member in a specified format.- SHCIL charges upfront.- National saving certificate and Kisan Vikas Patra issued by post office.- SGL securities- Certificate of deposits (CDs) issued by banks/institution.

NSE members may also pledge dematerialized shares in favor of NSCCL for security base capital and additional base capital requirements. The DEMAT shares pledged by a member as additional base capital will be considered

for the purpose of gross exposure computation. In case of DEMAT scrips, the following conditions apply :

(1) The member has to open a separate beneficiary account for base capital and additional base capital :

- In the name of partners / their spouse in case of partnership firms.- In the name of corporate / directors of the company in case of corporate

clearing members.- In the name of proprietor / spouse in case of proprietary concerns.(2) The securities to be pledged to be transferred to the account. Pledge

instruction along with pledge deed in a specified format to be given to SHCIL.

(3) After pledge is created in favor of NSCCL, valuation is given to NSCCL by SHCIL.

(4) Closure of pledge takes place at the instruction of NSCCL.(5) Replacement / additional of securities also available.

(7) NRI

INTRODUCTION

Over the years, SHCIL has grown to become a major player in the capital market. With a network of offices operating across the country with franchisees operating abroad, SHCIL provides depository participant and other services close to 0.7 million satisfied investors out of which over 6000 are NRI clientele.

SHCIL has a fully fledged NRI cell operating specifically to cater needs pertaining to depository account opening and maintenance. NRI cell coordinates with prospective NRI customers, collects and assist in obtaining the relevant documents and ensures the depository account is opened hassle free.

NRI cell collects physical certificates to be sent for DEMAT and ensure that the certificates are in order and can be sent for dematerialization under the existing guidelines issued by the depositories. Instruction for trade is accepted by fax on request by NRI cell to ensure timely settlement of trades. In this case later on the client needs to regularize by sending the original trade delivery instruction. Any tariff and billing related query are addressed by NRI cell.

In short NRI cell is a single point contact for any matter elating to NRI depository operations. OPEN ACCOUNT

Before you open your account …. Ascertain your NRI depository account status as per guidelines issued by

RBI from time to time. In case of joint account, status of the first holder is reckoned for all

purposes. If a scrip is held by three holders of whom the first is a NRI and the other

two or residents, then the account falls under the NRI category. Accounts have to be opened in the exact order in which the names appear

in the certificate. Holding pattern AB is not the same as BA.

CHECK YOUR FORM AGAINST THESE DETAILS:

All columns are filled in. write NA wherever not applicable. Specify status as Non Repatriable (NRO) or Repatriable (NRE). Status cannot

be changed once account is opened. Bank account details should be compulsorily provided along with 9 digit

MICR code. Ensure that the account status and the bank details are as below :(a) If the status is NRE, bank details can be ‘NRE’ or ‘NRO’.(b) If the status is NRO, bank details can be ‘NRO’ only.

Copy of RBI approval is not mandatory and the standing instruction for automatic credits may be marked as ‘Y’ without furnishing RBI approval. However, the onus of reporting to RBI is on the client.

Proof of identity by way of copy of your passport and bank account attestation is compulsory.

Initial the agreement on the front side and sign in the order of of holders in the backside of the agreement.

Nomination.(a) Nominee may be any person other than the account holders.(b) Photograph of the nominee has to be affixed on the nomination form.(c) The nominee must sign across the photograph and in the space provided

below.(d) If the nominee is a minor, the guardian shall sign at all places where the

nominee is supposed to sign.(e) Photograph of the guardian also has to be affixed on the nomination form.

YOUR ACCOUNT IS OPENED...

Once your account is opened, you will be allotted a client identity number. You will be sent an operating kit containing:

Details of your account as provided by you and as recorded by SHCIL. Copy of the agreement entered into with SHCIL. ‘Delivery instruction by client’ booklet allotted to your DEMAT account. This

booklet helps you transfer shares from your account to broker account and other accounts.

SWOT ANALYSIS

STRENGTH

1. Wide coverage throughout the country.

2. Promoted by 7 financial institutions.

3. Largest account holders.

4. Largest custodian.5. Catering to Indians as well as

NRIs and FIIs.6. One stop shop for all financial

solutions.7. Advanced system network.

WEAKNESS

1. Lack of aggressive marketing.

2. Improper billings.

3. Expensive.(Because separate account has to be opened according to holdings).

4. Less investment in advertising.

OPPURTUNITIES

1. E – Broking.

2. Acquisition of smaller DPs.

THREAT

1. Promoters have become competitors with strong brand equity.

2. Increased cost as perceived by customers.

3. Collaboration with banks.

4. New products.

5. To increase business (by opening new branches at rural-urban areas.

3. Fluctuating market conditions affect the business.

STRENGTHS:

1. LARGEST DEPOSITPORY PARTICIPANT :

SHCIL is at the No. 1 position as depositor participant in all over India. Being a premier custodian SHCIL is currently holding more than 20 million certificates in etude as the largest custodian. SHCIL accounts for more than 50% of institutional business in the country.

2. BACK OFFICE SERVER :

For perfection in work SHCIL has back office server facility where all the branches of SHCIL meet their necessary requirements before any information takes place with the NSDL.

3. EXPERIENCE :

Stock holding is the oldest organization in custodian business all over India and it has more than 10 years of experience in the field. SHCIL has excellent management and technocrat’s team to handle workloads and provides the best of services to its customers.

4. PROMOTED BY FINANCIAL INSTITUTIONS :

SHCIL is promoted by all the major financial institutions in India, i.e. Industrial development bank of India. Life insurance Corporation of India. Oriental insurance co. ltd. Industrial credit and Investment Corporation of India. New India insurance corporation ltd. National insurance corporation ltd. United India insurance co. ltd.

It has professionals on its board to look after the business and meet its current and future requirements in the market.

NEW PRODUCTS:

SHCIL has offered some new products in the market like E-stamping to meet the customer requirement as well as established benchmark.

WEAKNESS:

1. SOME BRANCHES ARE NOT CONNECTED THROUGH VSAT :

SHCIL is the largest branch network depository participant in the custodian market but till now some few of the branches are not yet connected through the VSAT.

2. LESS ADVERTISEMENT SPILLS :

SHCIL has less advertisement spill compared to its main competitor like Kotak securities, HDFC, IDBI bank, and ICICI bank. These are also producing the facilities of banking services and other related services to the customers.

OPPORTUNITIES:

1. LARGE RURAL/SEMI-URBAN ARES ARE STILL UNEXPLORED :

SHCIL has a growing structure of its branch network but still our rural and urban areas are not covered in the process whereby the common man participates in the growth of the economy. Therefore it has become necessary to give attention to our rural and semi-urban sectors immediately.

2. SELL – N- CASH:

Sell- n- cash is totally a new concept of SHCIL where an investor can present his share to knell in the market and can take payment within 48 hours without delays.

3. MUTUAL FUND MARKETING :

Marketing and distribution of mutual fund is providing the facility to the customer who do have the time and the expertise and who are averse to risk.

4. SGL ACCOUNT :

SHCIL is the first corporation, which got he non –banking license to dematerialize the government securities. This enables the institutional investors to properly use their fund to derive the extra return from their investment.

5. INSURANCE MARKETING :

Marketing of insurance services recently started by SHCIL is also a great opportunity available for its growth. This field can enhance great opportunities and can alleviate their position in the market.

THREATS

1. CHARGES ARE HIGHER :

Indian customers have less money at their disposal. Since SHCIL is the No.1 in the custodial sector in the market and for providing the best services, it has higher charges detrimental for small investors.

2. TIE UP WITH EXTERNAL AGENCY :

Now day’s tie-ups, M&A are a regular phenomenon in the market to beat the competition and create a place for itself. The merger and tie-ups of financial corporations poses a bigger threat to SHCIL.

PART 3

NUMBER OF PEOPLE INVESTING IN STOCK MARKET

According to the findings 85% of people invest in the stock market, while 15% don’t invest in the stock market or invest elsewhere.

YES NO85% 15%

YES NO0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

85%

15%

After analyzing the data it was concluded that 85% of the people invest in the stock market through different DPs while 15% of them don’t invest in the stock market because they consider it more risky or they have little idea about stock market.

IMPORTANT FEATURES WHILE MAKING INVESTMENTS

The findings say that 58% think that return is the most important feature while making investments; 38% think safety as important; 24% give priority to liquidity and 19% think tax benefit as important.

SAFETY RETURN LIQUIDITY TAX BENEFIT38% 58% 34% 19%

SAFETY RETURN LIQUIDITY TAX BENEFIT0%

10%

20%

30%

40%

50%

60%

70%

38%

58%

24%19%

Return on investment is the prime motive behind investments. Investors also expect safety. Liquidity needs of the investors cannot be neglected as the demand for cash forms an important objective of investment. Lastly, it was observed that tax benefit also accounts for making various investment decisions.

MODES OF INVESTMENT

The given findings say that 59% of the people invest through banks; 66% through equity; 7% through bonds and 61% through mutual fund.

BANK EQUITY BONDS MUTUAL FUND59 66 7 61

BANK EQUITY BONDS MUTUAL FUNDS0%

10%

20%

30%

40%

50%

60%

70%

59%66%

7%

61%

After the analysis we can say that most of the people invest in equity as it provides growth opportunity. Almost the same amount is invested in mutual funds. A little less amount is invested in bank as it provides safety to cautious investors but little growth and only a few people invest in bonds.

DEMAT ACCOUNT WITH DIFFERENT DP

24% of people have their account with SHCIL, 12% have their Demat account with Karvy , 9% with IDBI, 10% with ICICI and 45% with others.

SHCIL KARVY IDBI ICICI OTHERS24 12 9 10 45

SHCIL KARVY IDBI ICICI OTHERS0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

24%

12%9% 10%

45%

Others include Eashika Stock Market, SPLF, Siddhi Shares, Kotak Securities, Religare, Anand Rathi, India Bulls and Unicon Solutions. These figures are on the basis of survey done in Varanasi only.

AWARENESS ABOUT SHCIL AS LARGEST DP

According to the survey 35% of the people know that SHCIL is the largest DP whereas 65% of them are unaware of the fact.

YES NO35% 65%

YES; 35%

NO; 65%

SHCIL’s still lags behind in popularity in spite of the fact of being the largest Depository Participant. This shows that it needs to spend heavily on advertisements to compete in the market as well as expand its business.

PRODUCTS AND SERVICES OF SHCIL

According to the findings first ranking is given to Demat, second to mutual fund, third to broking and fourth to insurance. No one knows about e-stamping as one of the services offered by SHCIL.

DEMAT MUTUAL FUND

BROKING INSURANCE E-STAMPING

38% 25% 32% 5% -

DEMAT MUTUAL FUND BROKING INSURANCE E-STAMPING0%

5%

10%

15%

20%

25%

30%

35%

40%

38%

25%

32%

5%0%

After going through the data it is seen that Demat facility of SHCIL is the most preferred by people, mutual fund at the second in preference; then comes broking and the least preferred is insurance.

BROKING FACILITY OF SHCIL IS BETTER THAN COMPETITORS

Considering the data collected it was found that 41% of people think that broking facility of SHCIL is better than its competitors while 59% think that it’s the vice-versa.

YES NO41% 59%

YES; 41%

NO; 59%

According to data collected 59% of people think that the broking facility of SHCIL is not better than its competitors because of a high broking rate.

MUTUAL FUND THROUGH SHCIL IS BENEFICIAL FOR INVESTORS

Through the data collected and after analyzing the questionnaires filled by people it was found that 56% of people think that investment in mutual fund through SHCIL is beneficial for them while 44% think that investment in mutual fund through SHCIL does not make a difference.

YES NO56% 44%

YES NO0%

10%

20%

30%

40%

50%

60%

56%

44%

INVESTMENT IN GOI BONDS

The findings reveal that 20% of the people invest in GOI bonds while 80% don’t invest in GOI bonds.

YES NO20% 80%

YES; 20%

NO; 80%

While doing the analysis it was found out that most of the people don’t invest in GOI bonds. This financial instrument could not gain popularity due to the technicalities involved.

AWARENESS ABOUT SHCIL AS AN INSURANCE AGENT

The data collected reveals that 15% of people know that SHCIL is also providing insurance facility and 85% are ignorant of the fact.

YES NO15% 85%

YES; 15%

NO; 85%

After studying the data collected the conclusion is that most of the people don’t know about SHCIL‘s insurance facility as it is newly launched.

SERVICE RATING OF SHCIL

22% people consider services of SHCIL to be very good, 51% consider it as good and 27% consider it as AVERAGE.

VERY GOOD GOOD AVERAGE22% 51% 27%

VERY GOOD GOOD AVERAGE0%

10%

20%

30%

40%

50%

60%

22%

51%

27%

Most of the people think that the services of SHCIL as good; some perceive it as average and few as very good.

PERCEPTION OF CUSTOMERS TOWARDS SHCIL AND ITS PRODUCTS

QUESTIONNAIREName:Occupation:Mobile No:

Q1. What is your annual income? 1. Above 1 lakh 2. Above 2 lakh 3. Above 3 lakhs 4. Above 4 lakhs 5. No income

Q2. How would you rank the following investment options?

1. Fixed deposits 2. Mutual funds 3. Gold 4. Shares 5. Insurance 6. Debt funds 7. Others (please specify)

Q3. Are you aware about SHCIL?1. Yes 2.No

Q4. What were the sources through which you came to know about SHCIL? 1. Newspapers & magazines 2. Friends 3. Television 4. Employees of SHCIL 5. Others

Q5. How do you perceive the SHCIL?1. As a broker 2. As a depository participant 3. As an investment consultant

4. As a banker 5. As a company 6. As an investment corporation

Q6. Are you availing of any of the following services/products offered by SHCIL? 1. Dematerialization of shares 2. Trading in shares 3. Mutual funds 4. Insurance 5. Fixed deposits 6. Govt. of India bonds

7. e-stamping Q7.What is your objectives/motives while making investments? 1. Growth 2. Tax benefits 3. Risk

4. Cost 5. Security 6. Others

Q8. What do you think are the benefits/advantages of availing the services of SHCIL? 1. High returns 2. Low costs 3. Time saving

4. Less legalities 5. Security 6. Others

Q9. Are you satisfied with the services and products offered by SHCIL?1. Yes 2. No

Q10. How would you rate our products in comparison to other institutions offering similar services on a 10 point scale?

Q11. What are the improvements you would like in the services that we offer?

Place…………………………….Date: ……. /……../……………

YOUR COOPERATION IS VALUABLE TO US

CUSTOMERS’ VIEW REGARDING STOCK HOLDING

FEATURES CUSTOMERS’ VIEWCharges Very highServices GoodPromotion Need to invest in promotional activitiesPersonal touch SatisfactoryReliability Very reliableSpeed GoodTime management Satisfactory

Awareness about SHCIL High awarenessKnowledge of its products and services Known to customers who often visit to

stock holding; others have little knowledge.

Visits to SHCIL’s website Quite regularDepository services GoodBilling services UnsatisfactoryOther services GoodWorking environment Needs more improvementDealing of employees with the customers

Good

Relationship between clients and SHCIL Good

CONCLUSION

SHCIL has been able to maintain a lead position in a highly competitive environment which is no small achievement by any standards. To further augment its client base and maintain the lead SHCIL has decided to leverage on the strength to identify new products which would enable it to achieve the desired objectives. Being an important constituent of the capital market the future of SHCIL is extricable intertwined with the fortunes of the capital market in general and the stock market in particular. SHCIL is aware of the need to utilize the existing infrastructure and exploit its strength to the maximum.

It has already introduced several innovative products like sell-n-cash, cash-on-payout, loans against Demat shares, fund invest, mutual fund distribution, Equibuy, etc. the objective is to provide the investors different investment options and financial products all under the same roof – a one stop shop for all financial products and services.

With the economy recovering from the recessionary pressure and the prices stabilizing gradually SHCIL expects growth and a brighter future.

SUGGESTIONS

(1) A the number of DPs has increased in recent years efforts should be made to provide best services to their existing as well as potential clients.

(2) SHCIL should adopt an intensive marketing campaign to promote new products.

(3) The cost structure needs to be revised so as to attract potential customers and compete in the market.

(4) SHCIL should create awareness among the public of the products that it currently deals with in order to provide various investment opportunities for the investing community.

(5) SHCIL should create more employment opportunities so as to tap best workforce available in the market.

PROJECT OBJECTIVE

The main objectives of the project are as follows:

(1) To analyze the genesis and growth of depository in India.

(2) To evaluate the operational framework of depositories in India and its technological developments.

(3) To analyze the management and working of SHCIL in Varanasi.

(4) Critically examine the depository services provided by SHCIL.

(5) To know about the customers’ expectations from the capital market.

RESEARCH METHODLOGY

Types of research Descriptive and conclusive.Data collected Primary and secondary data.Data collection method Questionnaires Personal observation Personal interviewData collection, mode Closed and open ended Undisguised questionnaireSample size 100

Data collection technique Area samplingData analysis techniques Quantitative and qualitativeData presentation Bar diagram, pie chart, line graphs, etc.

REFERENCES

Journals and Reports:

SHCIL Journal Report Various Forms Used in the Depository Work of SHCIL

Websites:

www.onlinestockholding.com www.sebiindia.com www.nsdl.com www.moneycontrol.com www.sharekhan.com www.investopedia.com

Books:

Security Analysis and Portfolio Management – Fischer and Jordan. Financial Management – R.P. Rustagi. Business on the Net: What’s and How’s of E-Commerce - Agarwala, K.N.

and Deeksha Ararwala.

ANNEXURE

Form for Nomination / Cancellation of Nomination. Request for Address/Bank Details Change. Dematerialization Request Form. Application for Allotment of Permanent Account Number. Updation of PAN Number.