Trading in the shares of the Company is compulsory in dematerialized form for all investors.

The Company has, therefore, enlisted its shares with both the depositories, viz, NSDL and CDSL. This means that you have now have the option to hold and trade in the shares of the Company in electronic form. While most of you may be familiar with how a Depository functions, given below is a brief outline, in question and answer format, which we hope will be useful to you. What is Dematerialisation? Dematerialisation (Demat in short form) signifies conversion of a share certificate from its physical form to electronic form for the same number of holding which is credited to your demat account which you open with a Depository Participant (DP). Dematerialisation is a process by which the physical share certificates of an investor are taken back by the Company and an equivalent number of securities are credited in electronic form at the request of the investor. An investor will have to first open an account with a Depository Participant and then request for the dematerialisation of his share certificates through the Depository Participant so that the dematerialised holdings can be credited into that account. This is very similar to opening a Bank Account. Dematerialisation of shares is optional and an investor can still hold shares in physical form. However, he / she has to demat the shares if he / she wishes to sell the same through the Stock Exchanges. Similarly, if an investor purchases shares, he / she will get delivery of the shares in demat form. What is a Depository? A Depository (NSDL & CDSL) is an organisation like a Central Bank where the securities of a shareholder are held in the electronic form at the request of the shareholder through the medium of a Depository Participant. If an investor wants to utilise the services offered by a Depository, the investor has to open an account with the Depository through a Depository Participant. So is a depository just another form of a custodial service, the only difference being that the securities are held in an electronic form? No, the two are different. The Depository can legally transfer beneficial ownership which a custodian cannot. The main objective of a Depository is to minimize the paper work involved with the ownership, trading and transfer of securities. Who is a Depository Participant? Similar to the brokers who trade on your behalf in and outside the Stock Exchange; a Depository Participant (DP) is your representative (agent) in the depository system providing the link between the Company and you through the Depository. Your Depository Participant will maintain your securities account balances and intimate to you the status of your holding from time to time. According to SEBI guidelines, Financial Institutions like banks, custodians, stockbrokers etc. can become participants in the depository. A DP is one with

whom you need to open an account to deal in electronic form. While the Depository can be compared to a Bank, DP is like a branch of your bank with whom you can have an account. How does the Depository System operate? The Depository System functions very much like the banking system. A bank holds funds in accounts whereas a Depository holds securities in accounts for its clients. A Bank transfers funds between accounts whereas a Depository transfers securities between accounts. In both systems, the transfer of funds or securities happens without the actual handling of funds or securities. Both the Banks and the Depository are accountable for the safe keeping of funds and securities respectively. What are the benefits of having a demat account? a. Trading in the shares of the Company is now under the compulsory demat segment.With SEBI making demat mandatory on most of the traded scrips, electronic transaction will be the only way everyone will trade. b. No stamp duty for transfer of securities in the electronic form. In case of transfer of physical shares, stamp duty of 0.5 percent is payable on the market value of shares being transferred. c. All risks associated with physical certificates such as delays, loss, in transit, theft, mutilation, bad deliveries, etc. eliminated. Your shares can be kept in the Frozen Mode by your Depository Participant under your specific instructions. d. The concept of an odd lot in respect of dematerialized shares stands abolished, i.e. in the demat mode, market lot becomes one share. e. Dematerialised securities are most preferred by banks and other financiers for providing credit facility against securities. Generally, demat securities attract lower margin and lower rates of interest compared to physical securities. f. Even in the electronic mode of trading, the payment mechanism (usually through a broker) between the buyer and seller continues to be as before. Also the usual brokerage charges would have to be incurred. However, after the settlement, pay in and pay out are on the same day for scripless trading which means you get your securities as well as cash immediately. g. Shares bought or sold are transferred in your name on the very next day of pay out. In case of physical shares, transfer of ownership takes 30 days or sometimes even more. h. No courier / postal charges for sending share certificates / transfer deeds. i. Facility for freezing / locking of investor accounts, which enables you to make your account non-operational, for instance if you are abroad. j. Facility to pledge and hypothecate your securities available. k. As the Depository System becomes popular, brokers will be increasingly reluctant to deal with physical shares.

l. Investors prefer to buy shares which are already in dematerialised form. Why should investors prefer to buy shares in the depository mode? When you buy shares already in the depository mode, you will become the owner of those shares in the depository within a day of the settlement being completed. You will not have to apply to the Company for registering the shares in your name. Thus, there will be no possibility of loss or theft when the share certificates are posted to the Company. You will have no fear that any fake or stolen shares may have been delivered to you. Why should brokers become reluctant to deal with physical shares? Apart from the risk arising out of having to deal with the paper work and keeping account of the share certificates, the brokers are exposed to the risk of bad deliveries in the present system. It may take upto one year for the broker to discover that such a risk exists. As against this in the depository mode the broker will be free from the worries of bad deliveries. The broker's only risk will be that the investor does not own the shares which the investor has sold. But this will be known within the settlement period (10-15 days). The broker will thus prefer to sell securities that are in the depository mode. Is dematerialisation 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 upto 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. What is the procedure for dematerialisation? To dematerialise any physical security: a) open a demat account with a DP. b) fill in a DRF (Demat Request Form) and submit the same with the physical certificate/s to the DP for dematerialisation. c) DP defaces and sends the certificates to the Issuer/Registrar who credits an equivalent number of securities in the demat account, maintained by CDSL. d) For each ISIN, a separate DRF has to be used. Is it compulsory to mention the ISIN of the security while filling up the DRF (Demat Request Form)? Yes, the ISIN of the security should be mentioned in the DRF, to ensure that the correct security is dematerialised. If, however, the investor does not know the ISIN, he can obtain the same from his DP or from CDSL's website www.cdslindia.com Is transfer deed required for dematerializing physical certificates? No. There is no need to fill in a transfer deed. The physical certificates have to be accompanied by a DRF, which can be obtained from the DP. What should one do if one wants to dematerialise a security of a company that is not admitted with CDSL?

In such a case, the investor should request the company to have that security admitted with CDSL and once that is done, he can get it dematerialised. It may be mentioned that, on the request of any investor, a company must get that security admitted with the depository/ies. Can securities in odd lots be dematerialised? Yes. In demat form the market lot is one share and therefore, there is no question of an odd lot. do dematerialised securities have distinctive or certificate numbers? Dematerialised securities do not have any distinctive or certificate numbers. In demat all securities are fully fungible, which means that any 100 shares of an ISIN are similar to any other 100 shares of that ISIN. Can electronic holdings be converted back in certificate form? Yes, it can be done through Rematerialisation, which is the term used for converting electronic holdings back into physical certificates. For this, a BO should submit his request in a Remat Request Form (RRF) to his DP. DP will electronically forward the request to the Issuer / Registrar after verifying that there is a sufficient balance of that security in the account. The Issuer / Registrar will send the physical certificates directly to the BO. Is there any charge for dematerialisation of physical certificates? CDSL does not levy any charge for dematerialisation of securities. However, DPs collect a dematerialisation charge together with postage / courier charges.
How do you demat your shares? The process of opening an account with a Depository Participant is similar to the opening of a bank ac

Can a BO's holdings be held partially in physical and demat form? Yes, part of the BO's holdings can be held in physical form as per the choice of the investor. Though it is advisable to have the entire holdings held in demat mode so that the holdings have liquidity as and when available, it should be noted that part dematerialisation of holdings in a single physical certificate is not allowed.
count. First, you will have to open an account with a Depository Participant (DP) of your choice by filling up an Account Opening Form and signing a Participant-Client Agreement. You will be then given a unique client ID number, which must be quoted in all correspondence with the DP. Thereafter, you will have to fill up and submit a Dematerialisation Request Form (DRF) provided by the DP duly signed by all the holders and surrender the physical shares intended to be dematted to the DP. The DP upon receipt of the shares and the DRF, will issue you an acknowledgement and will send an electronic request to the Company/ Registrars and Transfer Agents of the Company through the Depository for confirmation of demat. The DP will simultaneously surrender the DRF and the shares to the Company / Registrars and Transfer Agents of the Company with a covering letter requesting the Company to confirm demat. The Registrars and Transfer Agents of the Company, after necessary verification of the documents received from the DP, will cancel the physical shares and confirm demat to the Depository. This confirmation will be passed on by the Depository to the DP which holds your account. After receiving this confirmation from the Depository, the DP will

credit your account with the number of shares dematerialized. The DP will hold the shares in the dematerialized form thereafter on your behalf. And you will become the beneficial owner of these dematerialized shares. DO NOT SEND THE SHARE CERTIFICATES / DOCUMENTS FOR DEMATERIALISATION TO THE COMPANY OR ITS REGISTRARS AND TRANSFER AGENTS. When you submit the shares for dematerialisation, your DP will deface the share certificates with the stamp SURRENDERED FOR DEMATERIALISATION. This ensures that your shares are not lost in transit or misused till credit is received by you in your demat account. What are the charges to be paid for opening an account and to demat one's physical shares? Will there be any charges for each transaction? Each DP can levy charges by way of account opening fees, transaction fees, custody fees and so on. The charges differ from Depository Participant to Depository Participant and therefore you will have to contact your DP for the same. I have purchased some shares in paper form. Can I directly give the share certificates to my Depository Participant for dematting them in my favour? Prior to dematting your shares, they have to be registered in your favour. Hence, you have to necessarily lodge the share certificates with a duly executed transfer deed with the Registrars and Transfer Agents of the Company. Once the share transfer is processed, an option letter for dematting your shares will be sent to you. You can then give us your Demat Account No. with the Demat Request form for the dematting process through your DP and the shares will be directly credited to your Demat Account. Is it a fact that Bank of India shares are to be traded compulsorily in Demat Form? Do I have the option of holding them in physical form? Yes. The shares of the Bank are to be compulsorily traded in demat form. However you can still buy shares in physical form upto 500 (through odd lot window facilities provided by Stock Exchanges) and send the same for transfer to the Registrars and Transfer Agents of the Company. You may indicate your desire to return the shares in physical form, while lodging the same for transfer. After the transfer is registered in your favour, the share certificates will be returned to you in physical form. How do I get my dividends on dematted shares? Will I get the Annual Report after I demat my shares and would I be able to attend the AGM? The Depositories will give the list of demat account holders and the number of shares held by them in electronic form on the Record date to the Registrars and Transfer Agents of the Company (known as Benpos). On the basis of Benpos, the Company will issue dividend warrants in favour of the demat account holders. The rights of the shareholders holding shares in demat form are at par with the holders in physical

form. Hence you will be eligible to get the Annual Report and will have the right to attend the AGM as a shareholder. What are the chances of any fraud/disputes in using a demat account? Whom should I approach in such cases? Common risk factors applicable to trading in physical shares like mismatch in signatures, loss in postal transit, etc., are absent since the dematted shares are traded scripless. However, in the unlikely event of any other dispute, the concerned Stock Exchange and/or Depository Custodian viz. NSDL/CDSL or SEBI would have to be approached for resolving such issues. Can I pledge my shares in demat form for the purpose of availing any funding/loan arrangement with my bankers? Yes. You will have to contact your DP for this. Can your dematted shares be converted back into physical shares? Yes, definitely. If you wish to get your securities in the physical form all you have to do is to submit a Rematerialisation Request Form (RRF) through your DP in the same manner as Dematerialisation. Your Depository Participant will forward your request to the Depository after verifying that you have the necessary securities in balance. The Depository in turn will intimate the Registrar and Transfer Agents of the Company who will print and despatch to you the share certificates for the number of shares so rematerialised and your account will be debited by the Depository and credited with the Company. Will you get back the same certificates after rematerialisation? It does not really matter at all. The Registrars and Transfer Agents will print new certificates with a new range of certificate numbers. You will be allotted a new folio number; however if you already have an existing folio number you may be allotted the same. How will I know that my Depository Participant has updated my account after each transaction? Here again just like a Bank, the Depository Participant will give you a Pass Book or a Statement of Holdings. The Statement of Holdings will be despatched to you periodically by the Depository Participant; however the Statement of Holdings can be sent to you as and when requested for a fee. What if there are any discrepancies in the share holding statement or the pass book entries?

In case of any discrepancy in the Statement of Holdings, you can contact your Depository Participant. If the discrepancy cannot be solved at the Depository Participants level, you should approach the Depository concerned for clarification.

What happens if you lose your share holding statement or depository pass book? Inform your Depository Participant and obtain a duplicate share holding statement or depository pass-book. Your holding statement or pass-book cannot be used by anybody else for trading in your account.

Are you restricted to having accounts with only one depository participant? There are absolutely no restrictions on the number of DPs you can open accounts with. Opening an account with a DP is very similar to opening a bank account. Just as you can have savings or current accounts with more than one bank, you can open accounts with more than one Depository Participant. However, you would need to open accounts in the same sequence of names in which the shares are held by you. For example, if you hold some shares jointly in the names A, B, C and some shares also in the names A, C, B, you would need to open 2 DP accounts.

Do you have to keep any minimum balance of securities in your account? No, the Depository has not prescribed any minimum balance. In fact, you can have zero balance in your account. However, the DPs may fix some minimum limits. What security do you have if the only proof of your holdings in your depository is merely a piece of paper indicating your account balance? When you open an account with a DP, you sign an agreement with the Depository Participant, in which the DP indemnifies you for any misuse of your holdings. The Depository will also ensure that the interests of the investors are protected, so that your grievances, if any, against your DP will be resolved by the Depository. Are there any additional security features which depository participants will offer you to protect your account? Yes, every transaction in your account will be authorised by you. You can authorise any transaction either by affixing your signature or by using any smart card similar to the use of an ATM or a credit card. Your Depository Participant will advertise its facilities and you should go through them carefully. There is a facility by which you can lock your account so that the Depository Participant will not be able to carry out any transactions in your absence without your authorisation. Is it possible for you to get the securities allotted to you in public offerings credited to your account directly in electronic form? Definitely. In fact, in the public issue application form itself there will be a provision for you to indicate the manner in which you want the securities allotted to you. All you have to do is to mention your client account number and the name of the DP and any allotment due to you will be credited into that account.

Who will give you the benefits arising out of your holdings, say bonus rights or dividend? When any corporate event such as rights or bonus or dividend is announced for a particular security, the Depositories will give all the details of the clients having electronic holdings of that security as of record date / book closure to the Registrars and Transfer Agents of the Company who will then calculate the corporate benefits due to all the share holders. The disbursement of cash benefits such as dividend / interest will be done by the Company whereas the distribution of securities / entitlements will be done by the Depositories based on the information provided by the Registrars and Transfer Agents of the Company. Thus, bonus / rights shares, if any, will be credited to your account electronically. Do you have an option as to the manner in which you wish to receive your corporate benefits?

Well, in case of those corporate events where you can exercise your option such as rights issue or optional conversion of debentures to shares, you do have a choice of either physical or electronic mode of holdings. However, corporate entitlements such as bonus will be made in the same form as of your original holdings. In case of discrepancies in corporate benefits, whom do you contact? You can approach your DP who in turn will contact the Registrars and Transfer Agents of the Company for clarifications regarding allotment of securities. In case of discrepancies in cash benefits you will have to contact the Registrars and Transfer Agents of the Company. Who can I approach for further information or clarifications in the matter? Your share broker can be of assistance to you. Our Registrars and Transfer Agents, M/s. Sharepro Services, will also be happy to provide any clarifications. Q. 1 What is Demat and what are its benefits? Dematerialization ('Demat' in short form) signifies conversion of a share certificate from its present physical form to electronic form for the same number of holding. It offers scope for paperless trading through state-of-the-art technology, whereby share transactions and transfers are processed electronically without involving any share certificate or transfer deed after the share certificates have been converted from physical form to electronic form. Demat attempts to avoid the time consuming and complex process of getting shares transferred in the name of buyers as well its inherent problems of bad deliveries, delay in processing/fraudulent interception in postal transit, etc. Dematerialization of shares is optional and an investor can still hold shares in physical form. However, he/she has to demat the shares if he/she wishes to sell the same through the Stock Exchanges. Similarly, if an investor purchases shares, he/she will get delivery of the shares in demat form only.

The Depositories Act 1996 has been enacted to regulate the matters related and incidental to the operation of Depositories and demat operations. Two Depositories are in operation National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). Q. 2 How does the Depository System operate? The operations in the Depository System involve the participation of a Depository, Depository Participants, Company/Registrars and Investors. The company is also called the Issuer. A Depository (NSDL and CDSL) is an organization like a Central Bank, i.e. Reserve Bank where the securities on an investor are held in electronic form, through Depository participants. A Depository Participant is the agent of the Depository and is the medium through which the shares are held in the electronic form. They are also the representatives of the investor, providing the link between the investor and the company through the Depository. To draw analogy, the Depository system functions very much like the banking system. A bank holds funds in accounts whereas; a Depository holds securities in accounts for its clients. A bank transfers funds between accounts whereas; a Depository transfers securities between accounts.
In both systems, the transfer of funds or securities happens without the actual handling of funds or securities. Both the banks and the Depository are accountable.

for safe keeping of funds and securities respectively. Q. 3 How do I demat my shares? First, you will have to open an account with a Depository Participant (DP) and get a unique Client ID number. Thereafter, you will have to fill up a Dematerialization Request Form (DRF) provided by the DP and surrender the physical shares, which you want to be dematted to the DP. The DP upon receipt of the shares and the DRF, will send an electronic request to the companys registrar and share transfer agent through the Depository for confirmation of demat. Each request will bear a unique transaction number. The DP will simultaneously surrender the DRF and the shares to the companys registrar and share transfer agent with a covering letter requesting the registrar and share transfer agent of the company to confirm demat. The companys registrar and share transfer agent after necessary verification of the documents received from the DP, will confirm demat to the Depository. This confirmation will be passed on from the Depository to the DP, which holds your account. After receiving this confirmation from the Depository, the DP will credit the account with the shares so dematerialized. The DP will hold the shares in the dematerialized form thereafter on your behalf. And you will become beneficial owner of these dematerialized

shares. Q. 4 Once my shares are dematted, can I ever get them converted into physical shares? If you are holding shares in electronic form, you still have the option to convert your holding in physical form by submitting a Rematerialization Request Form (RRF) through your DP in the same manner as Dematerialization. Upon receipt of such request from your DP, the company will issue share certificates for the number of shares so rematerialized.

Q. 5 What are the charges to be paid to demat one's physical shares? Will the company pay it or do I have to pay for it? The charges differ from DP to DP and therefore you will have to contact your DP for the same. The charges for demat have to be borne by the shareholder. Q. 6 I have purchased some shares in Physical (paper) form. Can I directly give the share certificates to my Depository Participant for dematting them in my favor? Prior to dematting your shares, they have to be registered in your favor. Hence, you have to necessarily lodge the share certificates with a duly executed transfer deed with the companys registrar and share transfer agent. Q. 8 How do I get my dividends on dematted shares? Will I get the Annual Report after I demat my shares and would I be able to attend the AGM? The Depository Participants will give the list of demat account holders and the number of shares held by them in electronic form on the Record date to the company (Beneficiary Persons, known as Benpos in short). On the basis of Benpos, the company will issue dividend warrants in favor of the demat account holders. The rights of the shareholders holding shares in demat form are at par with the holders in physical form. Hence you will be eligible to get the Annual Report and will have the right to attend the AGM as a shareholder.

Q. 9 What are the chances of any fraud/disputes in using a demat account? Whom should I approach in such cases? Common risk factors applicable to trading in physical shares like mismatch in signatures, loss in postal transit, etc., are absent since the dematted shares are traded scrip less. However, in the unlikely event of any other dispute, the concerned Stock Exchange and/or Depository Custodian viz. NSDL/CSDL or SEBI would have to be approached for resolving such issues.
Q. Can I pledge my shares in demat form for the purpose of availing any funding/loan arrangement with my bankers?

Yes. You will have to contact your DP for this.

How is a depository similar to a bank? It can be compared with a bank, which holds the funds for depositors. A Bank Depository analogy is given in the following table: BANK-DEPOSITORY AN ANALOGY BANK Holds funds in an account Transfers funds between accounts on the instruction of the account holder Facilitates transfer without having to handle money Facilitates safekeeping of money DEPOSITORY Holds securities in an account Transfers securities between accounts on the instruction of the BO account holder Facilitates transfer of ownership without having to handle securities Facilitates safekeeping of securities

How many Depositories are registered with SEBI? At present two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are registered with SEBI. Who is a Depository Participant? A Depository Participant (DP) is an agent of the depository through which it interfaces with the investor and provides depository services. Public financial institutions, scheduled commercial banks, foreign banks operating in India with the approval of the Reserve Bank of India, state financial corporations, custodians, stock-brokers, clearing corporations /clearing houses, NBFCs and Registrar to an Issue or Share Transfer Agent complying with the requirements prescribed by SEBI can be registered as DP. Banking services can be availed through a branch whereas depository services can be availed through a DP. What is the minimum net worth required for a depository? The minimum net worth stipulated by SEBI for a depository is Rs.100 crore.

Is it compulsory for every investor to open a beneficial owner (BO) account to trade in the capital market? As per the available statistics at BSE and NSE, 99.9% transactions take place in dematerialised mode only. Therefore, in view of the convenience of trading in dematerialised mode, it is advisable to have a beneficial owner (BO) account for trading at the exchanges. However to facilitate trading by small investors (Maximum 500 shares, irrespective of their value) in physical mode the stock exchanges provide an additional trading window, which gives one time facility for small investors to sell physical shares which are in compulsory demat list. The buyer of these shares has to demat such shares What are the benefits of availing depository services? The benefits are enumerated below: A safe and convenient way to hold securities; Immediate transfer of securities; No stamp duty on transfer of securities; Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc. Reduction in paperwork involved in transfer of securities; Reduction in transaction cost; No odd lot problem, even one share can be traded; Nomination facility; 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;

Transmission of securities is done by DP eliminating correspondence with companies; Automatic credit into demat account bonus/split/consolidation/merger etc. of shares, arising out of

Holding investments in equity and debt instruments in a single account. before further selling.

PROCEDURE FOR DEMATERIALISATION OF SHARES OF COMPANY

1. The company should amend its Articles by passing a special resolution at general meeting to insert the articles relating to dematerialisation of shares. 2. The company should sign agreements with the Depositories, NSDL and CDSL after getting it approved by the board of Directors in Board meeting. SEBI has stipulated that if a company wishes to provide demat facility to its investors it must sign agreements with both the depositories. 3. In order to dematerialise its shares, a company must have electronic connectivity with the depositories. Electronic connectivity can be established either in-house by investing in computer hardware, software and other equipment or through a Registrar which has got the required infrastructure. In case a company opts for an outside Registrar, the agreement mentioned above will be a tri-partite agreement. 4. Once the company is admitted in the depository system, an ISIN (International Securities Identification Number) is allotted by the depository. This number is unique for each security of the company that is admitted in the depository. 5. After establishment of electronic connectivity, Depositories inform the name and ISIN of the company, which has joined the depository System, to the Participant. 6. The company should inform the Stock Exchanges, where its shares are listed that the company's shares are eligible for dematerialisation. The shareholders should also be informed that the company's shares can be held in dematerialised form. This can also be done by issuing an advertisement in news papers or by way of a mention in the Annual Report of the Company. PROCEDURE TO BE FOLLOWED BY DP ON RECEIVING OF REQUEST FROM THE INVESTOR 1. In order to dematerialise the Physical Share Certificates, an investor will have to first open an account called as Demat A/c or Security A/c with any of the DP of his choice. 2. Obtain the Account No. from his DP. 3. Obtain the Dematerialised Request Form (DRF) from his DP. 4. This DRF, together with the Share Certificates desired to be dematerialised is to be submitted to DP. 5. The DP upon receipt of the shares and the DRF, will issue an acknowledgement and will send an electronic request to the Company/Registrars and Transfer Agents of the Company through the Depository for confirmation of demat. 6. DP, then issues an acknowledgement to the investor and afterwards follows the following procedure:

(a) Defaces the Share Certificates by putting a rubber stamp "Surrendered for Dematerialisation" and by punching two holes on the name of the company on the Share Certificate. (b) Generates a Demat Request Number (DRN) through his Depository Participant Module (DPM) and fills the same in DRF at the appropriate place. (c) Sends an electronic communication to Depository viz. NSDL or CDSL, as the case may be, to the effect that so many shares of this company (Identified by ISIN) have been received for dematerialisation. (d) Sends the DRF and Share Certificates to the company by courier. The role of DP comes to an end with this but he must send a reminder in case credit of shares is not received in demat account of investors within a month. 7. The depository electronically downloads the particulars of demat request, received from DP and sends to the electronic Registrar of the company so that these shares could be dematerialized. Ultimately, the company or its RTA, as the case may be, receives two kinds of communications: (a) DRF and Physical Share Certificates from DP. (b) Electronic Download of Demat Request from depository through electronic Registrar. PROCEDURE TO BE FOLLOWED BY COMPANY AFTER THE COMPLETION OF FORMALITIES BY THE DP 1. Separate folios should be created in computer in the names of NSDL and CDSL to which dematerialised shares will be transferred. 2. The particulars mentioned in DRF should be checked from Share Certificates. This is very much similar to scrutiny of Share Certificates and Transfer Deed in case of Transfer of shares. However, special attention should be given that the pattern of holding written on DRF is the same as the endorsement on Share Certificates. 3. Signatures or shareholders on DRF should be verified from the specimen signatures as per records of the company. All the joint holders should sign the DRF. 4. The ISIN should be mentioned in the DRF. This, to a certain extent, ensures that the security mentioned in the DRF is the one, which the investor intends to dematerialise. 5. Odd lot share certificates can also be dematerialised. In fact the market lot in demat mode is one share and an investor can even hold one share in a company. 6. The investor can dematerialise part of his holdings and hold the balance in physical mode for the same security. 7. The data of all demat requests received viz. DRN, DP-Id, Client-Id, Distinctive Nos. of Shares are entered in computer. 8. After completion of data entry, a checklist containing all the demat requests is generated which should be checked thoroughly to ensure that only those shares for which Share Certificates have been received are dematerialised. 9. After ensuring that all corrections pointed out during checking of check list have been made out, updation is done in computer as a result of which the shares are transferred from the Folios of various shareholders, who have surrendered their shares for demat, to NSDL/CDSL Folio as the case may be. Hence, the Register of Members gets updated. 10. In the end a report is generated which contains the details of DRNs, which have been dematerialised in company's records as well as DRNs, which have been rejected on account of some objection. The report is forwarded to the company's electronic Registrar which in turn uploads the data of confirmed demat requests to depository for credit of shares in demat account of shareholders. Similarly the DRNs rejected are also uploaded to depository so that an intimation regarding rejection of demat requests is sent to DPs. Once the DRNs are either accepted or rejected for dematerialisation these are removed from pending list of company.

11. The DRFs & Share Certificates, which are rejected due to any objection should be returned to respective DP so that the same can be lodged again after generating a fresh DRN and rectification of objection. 12. The company should furnish the data of shares dematerialised comprising of Folio No., Name of Shareholder, No. of Shares, Distinctive No. of Shares to Stock Exchanges as per SEBI (Depository and Participant) Regulations, 1996 to enable Stock Exchange to update their database. A certificate to this effect should also be sent to the Depositories. 13. Depositories, then confirm the dematerialisation of shares to DP. 14. DP, then credit the holding of shares into account, electronically. 15. Dematerialisation will normally take about 30 days. 16. Partly paid up shares and fully paid up shares are identified by separate ISINs (International Securities Identification Number). These are also traded separately at the Stock Exchanges. The company issues call notices to the beneficial holders of partly paid up securities in the electronic form. The details of such beneficial holders will be provided to the RTA/Company by the Depositories. After the call money realisation, RTA/Company will electronically convert the partly-paid up shares to fully paid up shares.