PROJECT REPORT

AT

STOCK HOLDING CORPORATION OF INDIA LIMITED

ON

“A Descriptive Analysis of Depository Participant With

Stock Holding Corporation of India Ltd”

DR. GAUR HARI SINGHANIA INSTITUTE OF MANAGEMENT AND RESEARCH

Dr. Gaur Hari Singhania Institute Of Management and Research

DECLARATION

Submitted by:

Jayati Poddar

1340

(2010-2012)

Submitted to:

Faculty Guide- Jyotika Kukrety

Company Guide: Mr. Vinay Singh

I, Jayati poddar studying in Dr.Gaur Hari Singhania Institute Of Management And research do hereby declare that this Project relating to Stock Holding Corporation of India Ltd (SHCIL) and the title “A Descriptive analysis of the depository participant with Reference to SHCIL” has been prepared by me after undergoing the prescribed industrial survey as part of the requirement of the PGDM program of GHS-IMR.

My guide for the training was Mr. Vinay Singh (Branch manager) and Mentor lecturer Mrs.Jyotika Kukrety.

I, further declare that this project work is the outcome of my efforts and not a replica of any other report/work submitted to any university or boards.

Name of student: Jayati Poddar

Place: Kanpur

ACKNOWLEDGEMENT

I express my gratitude to Prof.Prithvi Yadav sir, Director

Of GHS-IMR for providing me an opportunity to undergo summer training. And also for those who have guided and inspired me in completing this study. I would like to express my deep sense of gratitude to our faculty mentor Mrs. Jyotika Kukrety for giving me support and helping me during my project study.

I would like to express my gratitude to my project guide Mr. Vinay Singh for his constant encouragement and guidance without the task would not have been completed.

Last but not the least I would like to thank my parent and friends for their support.

THANKYOU ALL

Jayati Poddar

STOCK HOLDING CORPORATION OF INDIA LTD.

EXECUTIVE SUMMARY

The study is about describing the different services and products offered at SHCIL.

Project mainly deals with how the resources of the organization are used in their day to-day activities.

Stock holding has various financial Products and Services to be offered to the clients but problem lies in the low promotional activities undertaken by it, due to which though it has the services not offered by other DP's it fails in captivating customers.

The past few years have seen a phenomenal growth in the capital market leading to an explosion in transaction holding despite the transparency offered by NSE and BSE, the primitive settlement and transfer process kept the biggest chunk of the market risk- bad delivery, delayed transfer, fake certificates, loss and theft etc, unresolved. The Depositories is the answer to such risk and problems.

Along with it a brief introduction to India’s largest financial intermediary, SHCIL has been given and it is shown that what are demat a/c, mutual funds and life insurance and how they work.

The main objective of this project is concerned with studying the Depository system the services provided by the depositories to the customers and what are procedures for opening the various types of accounts like Demat a/c etc

Thus, I got interested to conduct study on the Depository Services under the title “Descriptive analysis of Depository Participants with reference to Stock Holding Corporation of India limited.

How to open demat account

Before opening the account the form can be collected from any of our branches.

The name should appear same as it on the share certificate

All columns must be filled in.

Write bank account number and 9 digit MICR number correctly issued by your

bank as it will facilitate effective disbursement of monetary corporate actions into

your account.

Signature of the holder must be with BLACK pen.

Fill the details regarding PAN card and all financial details required to be filled

For proof identity and address proof , there must be any one among them-

passport, voter ID, driving license, college ID.

2 recent photograph and signature across it

Client ID is given to the customers

Charges for accounts opening Investors traders

1. annual membership charges 500 1200

2. charges (one time)kit charges 30 30

3. custody charges nil nil

4. dematerialisation 3/- 3/-

5. rematerialisation 25/- 25/-

6. postage 25/- 25/-

7. invocation of pledge 50/- 50/-

8. transaction charges 10/- 10/-

Once the account is opened then, you will be allotted client identity number.

You will be sent a 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.

Maintenance

Change in permanent/correspondence address

A request letter ( format available on the site) signed by all the holders is required

Along with this Photocopy of proof of identification and proof of new address is

required. Please also bring the originals with you for verification purpose. Client or

the authorized bearer can visit our branch for the same. Copy of the latest 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/Map in

Request letter signed by the client giving the PAN/Map in number.

Accounts 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 favour of 2 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. Instruction by Fax

Clients may avail this facility by faxing their delivery instructions to SHCIL, by

executing the fax indemnity. 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 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:

- When the account has joint holders and one of the holder dies.

- When the account has a sole holder with a nominee.

- When the account has a sole holder without a nominee.

If the shares are transmitted to beneficiary accounts 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.

Defreezing of account

Defreezing of an account takes place,

- Only on your instruction.

- For defreezing pledge accounts, your instruction has to be

accompanied by bank authorization.

Research Title

A Descriptive Analysis of Depository Participants with “Stock Holding Corporation Of India Ltd.”

Purpose

The past few years have seen a phenomenal growth in the capital market leading to an explosion in transaction holding despite the transparency offered by NSE and BSE, the primitive settlement and transfer process kept the biggest chunk of the market risk- bad delivery, delayed transfer, fake certificates, loss and theft etc, unresolved. The Depositories is the answer to such risk and problems.

Introduction of the depositories has paved the way for instituting an infrastructure for eliminating these risks and increasing the efficiency of the system. The purpose of this study is to provide information to both the organization and the investors/savers, providing to the former present state and future prospect and to the later differences among the services provided by the various depository participants.

This Analysis will help to have a better understanding about where SHCIL stands in the market today and also to compare various DPs on certain parameters

Objectives

The main objectives of the project undertaken are:

1. To understand the attitude and perception of investors/savers towards the DP’s

2. To ascertain SHCIL’s position in the competitive market.

3. To develop and analyze strategies of SHCIL

4. To help improve its market share.

5. To offer suggestions based upon the findings

Limitations of the study

1. The study is limited only to SHCIL, BO Govind Nagar, Kanpur

2. There was a constraint of time.

3. The entire study is based on the information provided by the various respondents

4. The policy of the company does not allow getting all the information.

STOCK HOLDING CORPORATION OF INDIA LTD

INTRODUCTION TO SHCIL

Introduction to SHCIL

Background

1. Depository:

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 dematerialize 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 owner's 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 it through a registered DP.

2. Depository Participant

A Depository Participant (DP) is an agent of the depository who is authorized to offer depository services to investors. Financial institutions, banks, custodians and stockbrokers complying with the requirements prescribed by SEBI/ Depositories can be registered as DP.

Benefits of Depository

1. Bad delivery eliminated

2. Immediate transfer of shares

3. No stamp duty on such transfers

4. Elimination of risks that are normally associated in dealing with Physical certificates - loss / theft / mutilation due to careless handling / forgery / etc

5. Reduced transaction cost

Services provided by Depository

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

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

3.Transfer of securities, change of beneficial ownership

4. Settlement of trades done on exchange connected to the Depository

5. Pledge / Hypothecation of demat shares, viz. Loan against shares

6. Electronic credit in public offering of the Companies

7. Non - Cash corporate benefits, viz. Bonus / Rights - direct credit into

electronic form.

No. of Depository in the country

National Securities Depository Ltd.

Central Depository Services Ltd

Stock Holding Corporation Of India Ltd.

Industry Profile

Industry profile

Financial Markets

Stock Holding Corporation Of India Ltd. (SHCIL), the premier custodian of Indian Capital Market providing services of international standards, is geared up to reposition itself in the changed scenario.

The corporation has restructured and geared itself to serve the growing needs of individual investors in the paperless environment. The organization in its willingness to provide its state of art of financial services in securities industries to the various segments of the investors has expanded itself to more than 100 cities across the country. SHC desires to give investors the time and attention in monitoring the performance of their securities consistently. All aimed at providing the investor with optimum financial gain.

India has a well established capital market mechanism where in effective and efficient transfer of money capital or financial resources from the investing class to the entrepreneur class in the private and the public sector of the economy occur. Indian capital market has a long history of organized trading which started with the transaction in the loan stocks of the East India Company; from that time it has undergone drastic changes to meet the requirements of the globalization.There has been a shift of house hold savings from physical assets to financial assets, particularly the risk bearing securities such as shares and debentures. Capital market structure has also undergone sea changes with number of financial services and banking companies, private limited companies coming into the scene which made the competition in the market stiffer.

CAPITAL MARKET

The capital market consists of primary market and secondary market segments. The primary market deals with the issue of new instruments by the corporate sector such as equity shares, preference shares and debentures. The public sector consisting of central and state governments, various public sector industrial units (PSUs), statutory and other authorities such as state electricity boards and port trust also issue bonds. The primary market in which public issue of securities is made through a prospectus is a retail market and there is no physical location. Direct mailing, advertisements and brokers reach the investors. Screen based trading eliminates the need of trading floor.

The secondary market or stock exchange where existing securities are traded is an auction arena. Since 1995, trading in securities is screen based. Screen based trading has also made an appearance in India. The secondary markets consist of 23 stock exchanges including the NSE and OTCE and Inter Connected Stock Exchanges of India ltd. The secondary market provides a trading place for the securities already issued to be bought and sold. It also provides liquidity to the initial buyers in the primary market to re-offer the securities to any interested buyer at a price, if mutually accepted. An active secondary market actually promotes the growth of the primary market and capital formation because investors in the primary market are assured of a continuous market and they can liquidate their investments in the stock exchange.

DEPOSITORY

Depository is an organization where the securities of a share holder are kept in the electronic form at the request of the shareholder through a medium of a

depository participant (DP). The principal function of a depository is to dematerialize securities and enable their transactions in book formelectronically.

In India, the Depository Act defines a depository to mean “A company formed and registered under the companies act, 1956 and which has been granted a certificate of registration under sub-section (la) of section 12 of the Securities and Exchange Board of India (SEBI) act, 1992”. A depository established under the Depositories Act can provide any service connected with recording of allotment of securities or transfer of ownership of securities in the record of a depository. A depository cannot directly open accounts and provide services to clients. Any person willing to avail of the services of the depository can do so by entering into an agreement with the depository through any of its Depository Participants.

Legal Framework of Depositories:

The depositories act of 1996 provides for regulation of depositories in securities and for matter there with or incidental there to and came into force on 2Oth of September, 1995. SEBI formulated the Depositories and participants regulations act, 1996 to oversee the matter regarding admission and working of depositories and its participant. The depositories act passed by parliament received the presidents’ assent on August 10, 1996 enables the setting up of multiple depositories in the country. Only a company registered under the Companies Act Of 1956 and sponsored by the specified categories of institution can setup depositories in India. The depository offers services relating to holding of securities and facility processing of transactions in such securities in book entry form. The transactions handed by depositories include settlement of market trades, settlement of off trades, Securities lending and borrowing, pledge and hypothecations.

Eligibility criteria for a depository:

1. A public financial institution as defined in section 4a of companies act of 1956.

2. A bank included in second schedule to the RBI act, 19343. A foreign bank operating in India with the approval of the RBI.4. Recognized Stock Exchanges5. An institution engaged in providing financial services where not less

than 75% of equity held jointly or severely by these institution.6. A custodian of securities approved by government of India.7. A foreign financial services institutions approved by government of

India.8. The promoters of depository are also known as its sponsor. 9. A depository company must have a minimum worth of Rs. 100 Cr. 10. The sponsor of the depository has to hold at least 51% of capital

of the depository company.

Agreement Between Depository and Issuers:If either the issuer (a company which has issued securities) or the investor opts to hold his securities in a demat form, the issuer enters into an agreement with the depository to enable the investors to dematerialize their securities.No such agreement is necessary where :i. Depository, is the issuer of securities, or;ii. The State or Central Government is the issuer of government securities.Where the issuer has appointed a registrar to the issue or share transfer, the depository enters into a tripartite agreement with the Issuer and Registrar & Transfer (R&T) Agent, as the case may be, for the securities declared eligible for dematerialisation. At present, NSDL is discharging the responsibility of R&T Agent for the securities issued by State and Central Governments.

Rights and Obligations of Depositories:

1. Every depository should have adequate mechanisms for reviewing monitoring and evaluating the controls, systems, procedures and safeguards.

2. Annual inspections of the procedures and same should be reported to SEBI.3. To ensure that the integrity of automatic data processor systems is maintained to safeguard information.4. Adequate measures including insurances, to protect the interests of the beneficial owners against any risk.5. It should conduct an annual inspection of these procedures and forward a copy of the inspection report to SEBI.

Functions of Depository:

DematerlisationOne of the primary functions of depository is to eliminate or minimize the movement of physical securities in the market. This is done through converting securities held in physical form in to holdings in to back entry form.Accounts TransferThe depository gives effects to all transfers resulting from the settlement of trade and other transaction between various beneficial owners by recording entries in the accounts of such beneficial owners.Transfer and registrationA transfer is a legal change of ownership of a security in the records of the issuer. Transfer of securities under demat occurs merely by passing book entries in the records of the depositories, on the instructions of beneficial owner.Pledge and hypothecationDepositories allow the securities placed with them to be used as collateral to secure loans and other credits. The securities pledged are transferred to a segregated or collateral account through book entries in the records of the depository.

Linkages with clearing systemThe clearing system performs the functions of ascertaining the pay-in (sell) or pay (buy) of brokers who leave traded on the stock-exchange. Actual delivery of securities to the clearing system from the selling brokers and delivery of securities from the clearing system to the buying broker is done by depository.

To achieve this, depositories and the clearing system are linked electronically.To handle the securities in electronic as per the Depositories Act 1996, twodepositories are registered with SEBI. They are: National SecuritiesDepository Limited (NSDL), Central Depository Services (India) Limited(CDSL).

DEPOSITORY PARTICIPANTS

Depository participants (DPS) are described as an agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DP’s and the depository is governed by an arrangement 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 services only after obtaining a certificate of registration from SEBI.

Eligibility Criteria For Depository Participant1. A public financial institution as defined in sections of the companies act.2. A bank included for the time being in the second schedule to the RBI.3. A foreign bank operating in India with the approval of RBI.4. A state financial corporation established under the provisions of section 3 of the state financial corporation’s act, 1951.5. An institution engaged in providing financial services promoted jointly or severally by any of the institutions mentioned above.6. A custodian of securities who has been granted a certificate of registration by SEBI.7. A clearing corporations or a clearinghouse of stock exchange.8. A stock broker who has been granted a certificate of registration by SEBI.

9. A non-banking finance company.10. A R& T agent who has been granted a certificate of registration bySEBI.

A person desirous of becoming a DP of NSDL should make an application to SEBI through NSDL. NSDL evaluates and sends to SEW within 30 with recommendations. If all the conditions are met SEBI grants the registration certificate to the applicant. SEBI prescribes a minimum net worth of Rs.50 Lakh for stock brokers and non-banking finance companies (NBFCs) for granting them a certificate & registration to act as a DR. A certificate of registration is valid for a period of 5 years. It may be renewed after 5 years.

Rights and Obligations of Depository Participant

1. Agreement with beneficial owners:The DP must enter into an agreement with a beneficial owner before acting as a DR on his behalf. A DR while conducting business with a client, acts as an agent of NSDL and is liable to the clients for all the acts and deeds performed by him.

2. Separate accounts:The DP shall open a separate account in the name of each beneficial owner’s account only on receipt of instructions from beneficial owner.

3. Statement of account:The DP should provide statements of accounts to the beneficial owner as laid in the agreement with the beneficial owner. It should be done fortnightly if any transactions are made and at least quarterly if no transactions are done, It can be provided through internet.

4. Transfer or withdrawal by beneficial owner:The DP should allow a beneficial owner to withdraw or transfer securities from its accounts in such manner as specified in the agreement with beneficial owner.

5. Connectivity:The DP should maintain continuous electronic communication with each Depository in which it is participant.

6. Monitoring, reviewing & evaluating internet systems & controls:

DP should have an adequate mechanism for the purposes of reviewing monitoring and evaluating its internal accounting controls and systems. It has to get an audit done on quarterly basis.

7. Reconciliation:

The DP shot reconcile its records with every depository in which it is participant on a daily basis. The NSDL system is designed to do this automatically every day at the end of the day (EOD).

8. Returns:The DP should submit periodic returns to SEBI and to every depository in which it is a participant.

9. DP to indemnify depositoryA DP has to indemnify the depository, its officers and employees for all costs, fees, expenses, liability, taxes, actual losses and damages of any nature whatsoever suffered like failure to company with laws, failure to deliver eligible securities etc..

10. Prohibition Of AssignmentNo DP can assign or delegate its functions as a participants to any other person prior approval of NSDL.

11. InsuranceDP’s should take appropriate insurance cover to insure against losses arising from any business risk and system failure.12. Record Of Services The DP should maintain and preserve the documents for all transactions for a minimum period of 5 years.13. DP to ensure integrity and back-up of dataWhile DP’s maintain electronic records, they should ensure the integrity of the data processing system. All necessary precautions should be taken to ensure that the records are not lost, destroyed. It should be tampered with sufficient back-up of records should be taken and made available at all times at different places. All DP’s must comply with the rules of SEBI. If not, SEBI may cancel the registration of DP.

GOVERNING BODIES OF DEPOSITORY PARTICIPANTGoverning bodies of depository participantsNational Securities Depository Limited (NSDL)

National securities depository limited is the first depository to be set up in India. It was incorporated on December 12, 1995. The Industrial Development Bank Of India (IDBI) largest development bank in India, UTI largest Indian mutual fund and the National Stock Exchange In India sponsored the setting up of NSDL and

subscribed to the initial capital. NSDL commenced operations on November 8,1996.

Following organizations are shareholders of NSDL as on March 31, 2001:

1.Industrial Development Bank Of India 2. United Trust Of India3. National Stock Exchange Of India4. State Bank Of India5. Global Trust Bank6. CITI BANK7. Standard Charted Bank 8. HDFC Bank (housing and development finance corporation) 9. HSBC (hongkong and shinghai banking corporation) 10. Deutsche Bank11. Dena Bank12.Canara Bank

Ownership:NSDL is a public limited company incorporated under the companies act, 1956. NSDL had a paid up equity capital of Rs.10 crore. The paid-up capital has been reduced to Rs.80 crore since NSDL has bought back its shares of the face value of Rs.4.2 crore in the year 2000. However, its network is above Rs.100 crore as required by SEBI regulations.

Management of NSDL:

NSDL is managed by professional board of director. The managing director conducts the day to day operations. To assist the MD in his functions, the board appoints an executive committee of not more than 16 members. The eligibility criteria and period of nomination of the members of eligibility criteria etc. are governed by the bye-laws of NSDL in this regard.

Bye-laws of NSDL:

The bye-laws approved by SEBI which contain 14 chapters they are:a) Short title and commencementb) Definitionsc) Board of directorsd) Executive committee

e) Business rulesf) Participatesg) Safeguards to protect interest of clients and participants.h) Securitiesi) Accounts by book entryj) Reconciliation accounts and auditk) Disciplinary action appeall) Appealsm) Conciliationn) Arbitration

Function of NSDL:

NSDL performs the following functions through Depository participants (DP)1. Enables the surrender and withdrawal of securities to and from the depository (dematerialisation and rematerialisation).2. Maintains investor holdings in the electronic form.3. Effects settlement of trades not done on the stock-exchange (offmarket trades).4. Transfer of securities.5. Pledging I hypothecation of companies or corporates.6. Receipt of non-cash corporate benefits like bonus rights r electronic form.7. Stock lending and borrowing.The investors interact with a depository participant (DP) of NSDL. A DP can be a bank, financial institution, a custodian or a broker. Just as one opens a bank account to avail of the services of a bank, an investor has to open an account with a DP in order to avail of the depository facilities.

Milestone of NSDL

August 2009 Demat Accounts cross one crore

August 2008Launch of Central Recordkeeping Agency (for New Pension System)

May 2008NSDL and Japan Securities Depository Center sign Information Sharing and Collaboration Pact

April 2008NSDL and National Depository Center (Russia) sign Information Sharing and Collaboration Pact

February 2008 NSDL and Euroclear (Belgium) sign Information Sharing and

Collaboration Pact

September 2007Value of securities held in dematerialised form at NSDL crosses US$ 1 trillion

September 2007 Launch of SMS alert facility for investors

June 2007NSDL and DTCC (US Depository) sign Information Sharing and Collaboration Pact

January 2007NSDL and TDCC (Taiwan Depository) sign Information Sharing and Collaboration Pact

November 2006 NSDL completes a decade of depository operationsJanuary 2006 Launch of National Skills Registry by NDMLJuly 2005 Launch of Tax Information Network - PAN LedgerJanuary 2005 Launch of online upload of Central Excise challan dataOctober 2004 Intraday production shifting to Disaster Recovery Site

June 2004Incorporation of NSDL Database Management Limited (NDML) - wholly owned subsidiary company of NSDL

June 2004 Launch of Online Tax Accounting System (OLTAS)June 2004 Launch of PAN card services January 2004 Launch of Tax Information Network (TIN)January 2004 Launch of IDeASNovember 2003 Introduction of demat of Warehouse Receipts

November 2003Launch of Market Participants and Investors Database (MAPIN)

October 2003 Demat Accounts cross 6 millionApril 2003 Introduction of T+2 Rolling SettlementDecember 2002 Demat Accounts cross 5 millionNovember 2002 Launch of STEADY - An STP initiative by NSDLApril 2002 Introduction of T+3 Rolling SettlementSeptember 2001 NSDL launches SPEED-e

July 2001Introduction of T+5 Rolling Settlement and Uniform Settlement Cycle

June 2000 98% settlement in demat formJune 2000 Commencement of Demat of Debt InstrumentsMay 2000 Demat accounts with NSDL cross 2.5 mnFebruary 2000 NSDL launches internet based service - SPEED - for CMs

May 1999 NSDL launches NCFM - Depository Operations ModuleJanuary 1999 Commencement of compulsory trading for retail investorsDecember 1998 Introduction of Demat of Government Securities December 1998 Establishment of NSDL branches at Chennai, Delhi & KolkataNovember 1998 Demat accounts with NSDL cross 100,000April 1998 Demat delivery in physical segment at NSE and BSE

March 1998Value of securities held in dematerialised form at NSDL crosses US$ 5 bn.

January 1998 Compulsory demat trading for Institutional investorsDecember 1997 Commencement of Demat trading at BSE

June 1997Value of securities held in dematerialised form at NSDL crosses US$ 1 bn.

December 1996 Commencement of Demat trading at NSENovember 1996 NSDL InaugurationAugust 1996 Enactment of Depositories ActDecember 1995 NSDL IncorporationSeptember 1995 Promulgation of Depositories Ordinance

Central Depository Services Of India Limited (CDSL)

Central depository services of India ltd were the second depository to be granted the commencement certificate by SEBI on 8 February 1999, inaugurated on 15 July 1999. It is promoted by the Bombay stock exchange, in association of bank of

India. Both NSDL and CDSL interface with investors through their service providers known as DP. The depository is interconnected. It is possible to transfer shares from one depository to another.

CDSL was promoted by The Stock Exchange, Mumbai (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.

Milestones of CDSL system :

1.CDSL received the certificate of commencement of business from SEBI in February 1999.2. Honorable union finance minister, Shri Yashwanth Sinha flagged off the operations of CDSL on July 15 1999.3. Settlement of trades in the demat mode through BOl shareholding limited,the clearing house of BSE started in July 1999.4. All leading stock exchanges like national stock exchange, Calcutta stockexchange, Delhi stock exchange, stock exchange Ahemdabad, etc haveestablished Connectivity with CDSL.5. As at the end of Dec 2004, over 4900 issuers have admitted their securities(equities, bonds, debentures, and commercial papers), units of mutual funds, certificate of deposits etc. into the CDSL system. CDSL’s demat services are extended through its agents called Depository Participants (DP). The DP is the link between the investor and CDSL. An investor who opens a demat account with a DP can utilize the services offered by CDSL. While the OP processes the instructions of the investor , the account and records thereof is maintained with CDSL. 6. The recurring costs to be incurred by a CDSL DP in terms of maintaining back-upsand the related data storage are minimal. This enables a CDSL DP to offer depository services to investors at an attractive price and at the same time achieve break-even faster at much lower volumes. The centralized architecture also allows CDSL-DP to make available to the investors a to-the minute status of their account and transactions.

BENEFITS AND SAFETY OF DEPOSITORY SYSTEM

1. Elimination of bad deliveries:

Once the holdings of investors are dematerialized, the question of bad deliveries doesn’t arise because both transfer deed and share certificate are eliminated in depository system.

2. Elimination of all risks associated with physical certificate:

Dealing with physical securities have the associated risks of loss of certificates during movements to and from the registrars. These expose the investor to cost of obtaining duplicate certificates, advertisement etc., such problems don’t arise in the depository environment.

3. No stamp duty:No stamp duty for transfer of equity instruments and units of mutual funds in this system.

4. Immediate transfer and registration of certificate:Once the securities are credited, to the investors account on payout, he becomes the legal owner of the securities.

5. Faster settlement cycle:

The exclusive demat segment follow rolling settlement of T+2 days which enables faster turnover of stock and enhance liquidity with the investor.

6. Buyer is secured:

In physical environment, the buyer is not secured since the shares purchased may not be transferred. This is not the case with depository system.

7. Faster disbursement of non-cash corporate benefits:

NSDL provides for direct credit of non-cash corporate entitlements like rights, bonus etc., to an investors account ensuring faster disbursement.

8. Reduction in rate of interest on loan:

Some banks provide these benefits against pledge of departmentalized securities.

9. Increase in maximum limit of advances:

This increases from Rs.l0 lakh to Rs.20 Lakh per borrower. There is also areduction in minimum margin from 50% to 25% by banks to advances againstdemat securities.10. Reduction in brokerage:Brokers may provide a reduction in the brokerage of 0.25% to 0.5% for tradingin dematerialised securities as it reduces their back office cost of handlingpaper.11. Reduction in handling huge volumes of paper:In the physical environment every entity involved in purchase or sale of securities was to handle paper and pass on the paper to the next entity. But in the depository system only the delivery instruction to be given by the client is in the form of paper.

12. Periodic status reports:

DP’s need to provide periodic reports to investors on their holding and transactions. Dematerialized securities can be delivered in the physical segment: From April 1998 this facility is available at stock-exchange where trading in dematerialized securities is allowed. But physical securities are not allowed to be delivered in the dematerialized segment, making dematerialized stocks held with the investors more liquid than physical stocks.13. Elimination of problems related to change of address of investors,transmission etc:

Investors have to inform the change of address which will be reflected in the database of all the companies where the investor is a registered holder of securities.

14. Elimination of problems related to nominations:

An account holder can get securities in all companies transmitted transferred to his account by completing formalities with a single entity.

15. Elimination of problems related to selling securities on behalf of a minor:

A natural guardian is not required to take court approval for selling demat securities on behalf of a minor.

16. Convenient consideration of account:

To multiple accounts opened by investors, all accounts can be consolidated into one account by giving instructions to DP.

17. Convenient portfolio monitoring:Client can monitor portfolio by checking a single statement of holding/transactions.18. Increased volumes:Due to case in transaction and related costs, many players have entered/increased their transaction, which increases liquidity.

19. Newer services:

Opportunities like pledge / hypothecation and stock lending are given specifically by depository system. Many safety measures like investor grievances, insurances cover, computer and communication infrastructure, periodic review, certificate of registration were made necessary to protect investors.

STOCK HOLDING CORPORATION OF INDIA LIMITED

COMPANY PROFILE

STOCK HOLDING CORPORATION OF INDIA LIMITED

Introduction to the company:Stock Holding Corporation of India ltd (SHCIL) was incorporated under the companies Act, 1956 on July 28, 1986 at the initiative of the Government of India, with an authorized capital of Rs.25 cores and a paid up capital of Rs.10.5 cores, subscribed by seven All India financial and investment institutions and insurance companies, viz.Industrial Development Bank of India (IDBI)Unit Trust of India (UTI)Life insurance corporation of India (LIC)ICICI LtdIndustrial finance corporation of India Ltd (IFCI)Industrial Investment Bank of India (IIBI)General Insurance corporation of India and its subsidiaries, viz.1. Oriental insurance co ltd2. New India insurance co ltd3. National insurance co ltd4. United India insurance co ltd.SHCIL was incorporated as a public limited company on July 28, 1986 and

provides custodial services to institutional investors and depository services to retail investors. SHCIL commenced operations in August 1988 and has been providing custodial and related services of international standards for nearly a decade to the promoter and other institutions, foreign institutional investors (FIIs), commercial banks and mutual funds.

It is headed by luminaries from its promoter institutions who constitute its Board of Directors and take policy decisions pertinent to the affairs of the corporation. A senior management team that reports to the Managing Director and the CEO aids, assists and strategies business lines for the Corporation.

The primary focus of the corporation was specific – to set up custodial services of international standards in India and in the process to manage the entire array of post trade activities of Financial Institutions and Foreign Institutional Investors with dedicated client relationship teams and state-of-the-art reporting systems.

The corporation quickly garnered nearly 70% market share of the domestic custodial business and the financial figures shot up impressively for the first decade of it existence.

SHCIL has also received “No Action Letter” from Securities Exchange Commission (SEC) of USA, which renders it an eligible institution to hold assets of US-based funds.

SHCIL subsidiaries:

SHCIL Projects Ltd. SHCIL Services Ltd. SHCIL ltd. SHCIL Commodities& Derivatives Trading Co. ltd.

Vision of the Company:

“To become one stop shop for all financial services”.

This vision of the company is slowly being achieved with the foray of the company into new financial services and products into its portfolio the latest to be the Insurance product, which would be soon distributed.

Mission of the Company:

“To spread Quality Service through the innovative use of technology”.

Objectives of the Company:

1. To retain the No. 1 position in the DP industry by being ahead of all other DP service providers with the innovative use of technology would be soon distributed.

2. To provide justified service to every rupee the client pays.

3. To ensure security and convenience of transaction to its clients at reasonable price.

4. To channel technology to make convenient products for financial market that give quantum benefits to investors, corporate houses and brokers.

5. To reach 37 million Internet users in the years to come with e-commerce projection scaling USD 1.7 billion.

6. To move with speed and ease, diversifying into new areas, considerably on others and sharpening its focus and paradigms.

7. To increase its customer base, this at present is 7 lakh.

8. To evolve a new strategy to emerge as a broad based financial powerhouse in the years to come.

9. To find ways to make information and reporting system more effective for the institutional clients.

10. To expand to the South-East Asia, with the aim of becoming the leader.

Basic facts about SHCIL

1. SHCIL is India’s largest depository participant.

2. SHCIL has around 20% market share i.e. over 8 lakhs demat accounts.

3. SHCIL has approx, 50% market share of delivery- based transaction which amount to

1.33 crore transaction.

Our Values

1.Safety and Efficiency of operations is a hallmark of SHCIL

2.Professionalism and Integrity

3.Customer First

4.Relationship Building

5. Commitment to Quality irrespective of asset size

STOCK HOLDING CORPORATION OF INDIA LIMITED

PRODUCTS AND SERVICES

STOCK HOLDING CORPORATION OF INDIA LIMITED

PRODUCT PROFILE

1. ADDSHARES2. FUNDINVEST3. GOI BONDS4. INSURANCE5. PENSION FUNDS

1. ADDSHARES

Introduction

SHCIL arranges loan against DEMAT shares.

1· Tie-up with reputed banks which offer you the most competitive interest rates in the market.

2· You can use the shares in your free account as collateral and take a loan from any of our empanelled banks.

3· SHCIL completes your documentation and processing and gives you a cheque within 48 hours of application.

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. 3. FUNDINVEST

Introduction

Fund Invest is a basket of financial products, ranging from fixed income securitieslike fixed deposits, Infrastructure bonds and Capital Gain Bonds to variable incomesecurities like Initial Public Offers (IPO’s) of Equities and Mutual Funds. It is anattempt to offer financial products that cater to the various investment needs of ouresteemed clients. An effort to guide the investor to a product portfolio that best suitshis risk- return profile.Applications for investments can be source from any of the SHCIL offices. Apart

from guiding our investor to pick up the right combination of investment instruments, we help them '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).

4. GOI BONDSSavings Bonds are issued by RBI on behalf of Government of India in the followingseries.8.0% taxable bondsThese Bonds are held in electronic form in an account called Bond Ledger Account(BLA). Bond Ledger Accounts can be opened and operated with RBI designatedReceiving Offices. SHCIL has been designated as one of the Receiving Offices byRBI for this purpose. Subscriptions for Savings Bonds can be submitted at any of ourbranches.

The following categories can subscribe to Savings Bonds:Category of Investor 8.0% (Taxable)1. IndividualHis or her individual capacity.Individual capacity on joint basis.Individual capacity on anyone or survivor basis.On behalf of a minor as father/mother/legal guardian.2. HUF (Hindu Undivided Family)3. Charitable InstitutionCharitable Institution to mean a Company registered under Section 25 of the IndianCompanies Act 1956An Institution which has obtained a Certificate of Registration as a Charitable Institution in accordance with a law in force.Any institution which has obtained a certificate from Income tax Authority for thepurposes of Section 80G of the Income Tax Act, 1961.

Advantages

Hassle free maintenance: The GOI Bonds are held in electronic form in an account called Bond Ledger Account. This ensures smooth investing minus paperwork.1. Electronic Clearing Services: You can avail of Electronic Clearing System

(ECS) services. This ensures automatic credit of benefits and redemptionswhen they accrue.2. Easy access: You can apply for subscriptions into these Bonds in any SHCILcenter across the country.3. Dispatch: Certificate of Holdings is dispatched to the client through courier onrealization of subscription.5. INSURANCE:Introduction:SHCIL, a company promoted by Insurance majors & 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 allservices relating to Insurance. We also provide Free Professional advice to clients onneed base insurance. SHCIL has 200 plus odd Branches all over India to take care of all your Insurance related queries and needs.LIC products:1. KEY MAN INSURANCEKey Man Insurance is an insurance taken by a business firm on life of an employee (Key Man) whose services contribute substantially to the success of the business of the firm.The object of Key man insurance is to indemnify business firm from the loss of earnings may occur because immediate replacement of the Key Man may not bepossible. Section 37 (1) of the Income Tax Act ,1961 provides that any expenditure laid out orexpended wholly and exclusively for the purposes of business or profession shall beallowed as a deduction in the computation of income from business or profession.Only Partnership firms and Companies are eligible for Key Man Insurance. 2. CHILDREN POLICY

KOMAL JEEWAN Plan 159Under this children’s plan, the payment of premium ceases on policy anniversary immediately after the child attains 18 years of age. The plan, besides offering risk cover, also offers payment of sum assured in installments at age 18, 20, 22, 24 and guaranteed and loyalty additions, if any, at 26 years of age.

JEEWAN KISHORE Plan1021. High bonus from day one.

2. Child becomes owner of the policy automatically at the age of 18 years. JEEWAN CHAYYA Plan 103

1. Ideal for parents having less than a year old child.2. Makes provision for education/ marriage of the child.3. Extra benefit of waiver of premium in case of death of the policy holder.This policy is given under non-medical scheme up to sum assured of Rs.1 lakh,3. ENDOWMENT POLICY

ENDOWMENT WITH PROFITS Plan 141. Moderate Premiums2. High bonus3. High liquidity4. Savings orientedThis policy not only makes provisions for the family of the Life Assured in event of his early death but also assures a lump sum at a desired age. The lump sum can be reinvested to provide an annuity during the remainder of his life or in any other way considered suitable at that time.

LIMITED PAYMENT ENDOWMENT WITH PROFITS Plan 48Just as in the case of limited payment whole life polices, here, too, the payment of premium can be limited either to a single payment or to a term shorter than the policy.The endowment is, however, payable only at the end of the policy term, or upon deathof the policy holder if it takes place earlier.If payment of the premiums ceases after at least three years' premiums have been paid,a free paid-up Policy for an amount bearing the same proportion to the sum assured as the number of premiums actually paid bears to the number stipulated for in the policy, will be automatically secured provided the reduced sum assured, exclusive of any attached bonus, is not less than Rs.250 Such reduced paid-up policy will not be entitled to participate in the profits declared thereafter, but such bonus as has already been declared on the policy will remain attached thereto.

JEEWAN MITRA Plan 133The benefits of this policy can be considered only for standard and substandard livesClass I and II. It cannot be allowed for people engaged in hazardous occupations.Individuals engaged in dangerous pursuits will be rated against the revised tabularoccupational extra rates. This policy covers the risk for triple the sum assured.

JEEWAN ANAND Plan 149

Jeevan Anand is a With Profit Assurance Plan. It is a combination of the Whole Life Plan and the most popular Endowment Assurance Plan. The plan provides the predecidedSum Assured and Bonuses at the end of the stipulated premium paying term, but the risk cover on the life continues till death.1. Moderate Premiums2. High bonus3. High liquidity4. Savings oriented

JOINT LIFE (Jeewan Saathi) POLICY Plan 89

This policy is issued on the lives of the husband and wife provided the female's life belongs to Category I or is actively engaged in her spouse's business. In case of death of one of the policy holder the surviving partner gets the sum assured, the premium is stopped and on death or maturity full sum assured along with bonus is paid back.

4. RETIREMENT PLANIts once again that time of the year when most of you are on the look out for tax saving avenues for investment. And for most, insurance has been on the top of the list of choices. While earlier, buying insurance was mainly for tax benefits, but these days with increased awareness, consumers have been narrowing down on picking up the right policy that suits their future needs.NIA Products:

1. MEDICLAIM POLICY2. FIRE INSURANCE3. PRIVATE CAR INSURANCE4. HOUSEHOLDER’S POLICY

MEDICLAIM POLICYThis 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:1. 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.

2. Government or private institutions for their employees.3. Clubs or associations for their bona-fide members.

FIRE INSURANCE

This policy offers protection against loss or damage of property/ materials caused byfire. The insurance should be taken for a maximum amount of its current value afterconsidering factors of wear and tear as well as depreciation.Suitable for: This policy is vital for every individual or corporate body with respectto the property where they have insurable interest. Since insurable interest signifiesthe right to insure, the person or corporate body must be legally competent to enterinto a fire insurance contract.

PRIVATE CAR INSURANCERiskscoveredThis insurance policy protects the motor vehicle from loss or damage1. By fire, lightning, self-ignition, explosion, burglary, housebreaking or theft.2. Riot or strike.3. Flood, earthquake, cyclone or inundation.4. Transit by road, air, elevators or lifts.5. Liability for third party's injury or death, third party property and towards the paid driver too.6. Drunken driving.

HOUSEHOLDER’S POLICYThe Householder's Insurance Policy comprises of ten sections covering of the insured's building, fixtures and fittings, contents, jewellery and valuables, television sets and VCRs, 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 compulsorysections, a discount of 15 percent is offered on the Non-Tariff sections. For more than6 sections, excluding Sections I and II, 20 percent discount is offered on Non-Tariff sections.

5. STOCK DIRECT

Stock direct has changed the way you look at trading in securities. 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.

Advantages One Stop Shop

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

ConvenienceTrade from home through the net or use the RTMs placed at specified SHCIL centers.

SecurityDigital Signature & Smart Card technology based on 128 bit Encryption make your transactions 100% secure.

Cost-EffectiveNo minimum value of transaction.

Choice of Stock ExchangesBuy/Sell shares on BSE / NSE

(G) PENSION FUNDSSHCIL offers pension fund administration services to pension fund trusts. Thepension fund scheme administered by the trust could be a defined benefit or a definedcontribution scheme. For both the scheme types, SHCIL offers the entire range ofservices that include design, development and maintenance of a customized pension.

SERVICE PROFILE

Various Services Provided By Stock Holding Corporation Of India Limited :-

DP SERVICES:-SHCIL Depository Participant services address customers individual investment needs. With a parentage of leading financial institutions and insurance majors and a proven track record in the Custodian business, Company have reiterated their past success by establishing ourselves as the first ever and largest Depository Participant in India. From a tentative foray in 1998 into the individual investor arena to servicing around seven lakh accounts, it have endeavored to constantly add and innovate to make business a pleasure for you.At SHCIL, company places a very high premium on client reporting. Periodic statements sent to you keep you informed of customers account status. Dedicated Customer Care lines manned by trained staff answer customer queries on demat / trades / holdings. The latest in client response at SHCIL is Interactive Voice Response (IVR) system for round the clock information on customers account.DEMAT:-

Dematerialisation is the process of conversion of shares from physical form to the electronic mode. Companies dedicated demat team enable you to convert customer’s physical holdings into electronic mode in a quick and hassle-free manner.CLEARING MEMBER SERVICES:-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 .It accepts deposits of base capital and Additional base capital requirements stipulated by NSE for clearing members trading on its capital market segment. Besides, SHCIL s new products with a broker empanelment clause ensure a mutually beneficial tie-up. Clearing members stand to earn a steady income from SHCIL s product transactions and new add to their client-base, while they capitalize on their rapport with the market. It currently offers Depository services to more than 680 clearing members of various exchanges connected with NSDL and CDSL. SHCIL s Customer Care lines answer all customers DP queries while the Interactive Voice Response (IVR) system gives you information on customers account and other valuable data like CC calendar details, tariff, ISIN information, etc. via telephone, fax and e-mail.Advantage:-

SHCIL s 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 & transactions Pay in / Pay out details, overdue cum holding details, etc. via telephone, fax or e-mail.

DERIVATIVE SERVICES:-SHCIL provides Clearing Services for derivative segment of BSE/NSE andCommodity segment of MCX/NCDEX.

STOCK DERIVATIVES-SHCIL is a Custodian/Professional Clearing Member of derivative segment at the Bombay Stock Exchange and at the Futures & Options Segment of the NSEIL respectively.

COMMODITY DERIVATIVES:-SHCIL is the first Professional Clearing Member of Commodity segment on the Multi Commodity Exchange (MCX) and National Commodity & Derivative Exchange (NCDEX).SHCIL has a full fledged in-house back office systems and procedures to cater to the needs of trading members and other institutional / corporate clients in this

segment. A dedicated team of professionals handles derivative operations and assists its clients.As a professional clearing member, SHCIL performs the following functions;

Clearing - Computing obligations of all his TM s i.e. determining positions to settle.

Settlement - Performing actual settlement. Collateral Management - Collection of collateral (cash and cash/cash

equivalents and setting up exposure limits for TMs and Institutional clients. Risk Management - Setting position limits based on upfront

deposits/margins for each TM and monitoring positions on a continuous basis.

Advantage:SHCIL has always been a pioneer in clearing and settlement services in the cash. SHCIL has the capability to handle large volumes of business with greatest accuracy, keeping customer interests as the top priority.SHCIL being a professional clearing member has no trading interests in the Commodity segment. There is strictly no dissemination of information on trading or any other operation of any of its clients.Collateral ManagementSHCIL has excellent system to manage cash and cash equivalents deposited as collateral for derivatives trading. Continuous Patronage from Institutional clients:SHCIL being a custodian clearing member having major institutional clients, provides more credibility. Tie-up with banks having nation-wide reach for bankingactivities: Since settlement in derivatives trading takes place daily. Funds movement has to be fast. SHCIL has tie up with new generation banks having wide reach and modernfacilities like TT / anywhere banking etc. to contain the time lag in banking transactions.

Competitive service charges:SHCIL is the pioneer in introducing Derivatives Clearing and Settlement services in the country. Service charges are so competitively structured to facilitate any entrant.Low investment:The clearing function in the Commodity derivative segment requires huge investment in back office systems and requires strict compliance to the regulatory framework.BROKING

Stock Holding Corporation of India Ltd. (SHCIL) in its endeavor to provide one stop shop to its large retail & institutional clients has promoted SHCIL Services Limited (SSL) as its broking arm.SHCIL has been promoted by All India Public Financial Institutions and Insurance Majors. SHCIL is known for its Security, Integrity, wide network and focus on technology. SHCIL Services Ltd will continue this tradition .NRI SERVICES:-SHCIL has grown to become a major player in the capital market. With a network of more than 120 offices operating across the country and franchisees operating abroad, SHCIL provides Depository Participant and related services close to 0.7 million satisfied investors out of which over 6000 are NRI Clientele. SHCIL has a full fledged NRI cell operating specifically to cater needs pertaining to Depository account opening and maintenance. NRI cell co-ordinates with prospective NRI customers, collects and assists in obtaining the relevant documents and ensures the Depository Account is opened hassle free. CUSTODIAL SEGMENT:-SHCIL has been providing Custodial Services of international standards to DomesticMutual Funds, Financial Institutions and Foreign Institutional Investors. With almost 70% of the Institutional business in its fold, SHCIL has evolved over the times to meet the changing requirements of dynamic markets and demanding clients. A dedicated pool of trained and highly experienced professionals work literally round the clock on state of the art computer systems, dedicated communication channels, well connected to Client institutions, Stock Exchanges, Clearing houses, Depositories and leading Institutional brokers. In terms of collective man-years, SHCIL has the most experienced team in the entire Industry.Tariff:-1. Annual membership charges Rs 500/-

2. Purchase Nil

3. Sale( market&off market) 0.05%(min Rs 25/-)+NSDL

charges

4. Custody charges NIL

5. Dematerialisation Rs 3/- per certificate

6. Postage per Demat request Rs 25/-

7. Rematerialisation Rs 15/- per certificate

8. Postage per remat request Rs 25/-

9. Creation/confirmation of creation of

pledge

0.02%+NSDL charges

10. Closure/confirmation of closure of

pledge

0.02%+NSDL charges

11. Invocation Rs. 50/- per transaction

12. Late transaction charges Rs. 10/-

Trade processing 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, reporting and resolution of mismatches with Clients, etc.

Settlement services:Institutional trades are either settled through the Clearing House of the Stock Exchanges or as DVP directly with the contracting broker or Counter Party. As a Custodian SHCIL strives for timely settlement of Funds and Securities. Funds are collected/ deposited from/to client and settled with the Clearing Houses/ Brokers/ Counter Parties.In the present context, 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. For the occasional delivery and receipt of securities in the physical mode, Institutional services:SHCIL has installed dedicated DPM’s (Depository Participant Modules) on both the Depositories, viz. NSDL (National Securities Depository Ltd) and CDSL (Central Depository Services Ltd). A dedicated Institutional DP team at SHCIL addresses your need for all core DP services like conversion of physical holdings into electronic form, settlement of trade instructions, rematerialisation, repurchase and pledge instructions, providing of holding and transaction statements and daily reconciliation of client holdings.

COMPETITORS:

Kotak Securities

Karvy Securities

Motilal Oswal

Anand Rathi

India Bull

1. Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. One of the oldest broking houses in India, its operations include stock broking and distribution of various financial products. It is a corporate member of both the Bombay Stock Exchange and the National Stock Exchange of India. Kotak Securities was founded in 1994 and is headquartered in Mumbai, India.

Motilal Oswal financial services ltd. is a diversified financial services firm offering a range of financial products and services such as Wealth Management , Broking & Distribution, Commodity Broking, Portfolio Management Services , Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies. Motilal Oswal Securities is a Depository Participant of NSDL and a Depository Participant of Central Depository Services Limited (CDSIL) in 2000. The company started offering Derivatives products and advisory services on both BSE as well as NSE in 2001.

Anand Rathi is a leading full service securities firm providing the entire gamut of financial services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan India presence as well as an international presence through offices in Dubai and Bangkok. AR provides a breadth of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and insurance, structured products - all of which are supported by powerful research teams. The firm's philosophy is entirely client centric, with a clear focus on providing long term value addition to clients, while maintaining the highest standards of excellence, ethics and professionalism. The entire firm activities are divided across distinct client groups: Individuals, Private Clients, Corporates and Institutions and was recently ranked by Asia Money 2006 poll amongst South Asia's top 5 wealth

managers for the ultra-rich. In year 2007 Citigroup Venture Capital International joined the group as a financial partner.

India bulls is an Indian company with its presence in the Real Estate, Infrastructure, Financial Services, Securities, Retail, Multiplex and Power sectors. The company was founded in May 2000 as an online stock brokerage and has since then diversified into its current portfolio. India bulls Group is one of India's large Business houses. The Group has several businesses which cover a wide spectrum of Real Estate, Financial Services, Securities, Power and Chartered Aviation. Many of the companies are public entities and are listed on Indian stock markets.

Karvy has presence with leadership position in a wide range of financial services including Broking, Commodities, Registry Services, Merchant Banking, Realty services etc. The group also has presence in the BPO services and technology services space. A professionally managed and highly focused financial intermediary in the Indian markets.

SWOT ANALYSISSTOCK HOLDING CORPORATION OF INDIA LIMITED

STRENGTH

1. Wide coverage throughout the country.2. Promoted by 7 financial institutions.3. Largest account holders4. Largest custodian.5. Catering to Indians as well as NRIs and FIIs.6. One stop shop for all financial solutions.7. Advanced system network.8. SHCIL is the first depository participant. It has the opportunity of holding more than 7000000 accounts at all centers.9. Multiple products and services: SHCIL provides a variety of services under the same roof.10. It is the member of both NSDL and CDSL.

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.5. The clients are not provided any incentives or motivations, which wouldencourage them to make timely payment.6. The company has not undertaken sufficient steps to create awareness among the clients about SHCIL. The only procedure adopted is the Internet.7. The HR department is placed in Mumbai. So the newly recruited employees lack sufficient training facilities.

OPPORTUNITIES

1. E – Broking.2. Acquisition of smaller DPs.3. Collaboration with banks.

4. New products.5. The company can take steps to increase the awareness among the clients and thereby increase the business.6. The company can attract more number of franchises.

THREATS

1. Increased cost as perceived by customers.

2. Fluctuating market conditions affect the business.3. The number of competitors is increasing at a higher rate. Their charges are also low when compared to the charges of SHCIL. The nearest competitors are banks providing DP services along with their regular services.4. The company does not charge any amount for closing the account. Since retaining the customer is very important and most of the customers will not think of closing the account at time of opening the account the company can charge some for closure.5. The discounts and offers given by other DP’s when compared to offers of SHCIL are leading to reduction in the number of clients.

SWOT ANALYSIS OF KARVY

STRENGTH

·Employees are highly empowered.·Strong Communication Network.·Good co-operation between employees.·Number 1 Registrar and Transfer agent in India.·Number 1 dealer of Investment Products in India. WEAKNESSHigh Employee TurnoverOPPORTUNITY1. Growth rate of mutual fund industry is 40 to 50% during last year andit expected that this rate will be maintained in future also.2. Marketing at rural and semi-urban areas.THREATS1. Increasing number of local players.2. Past image of Mutual Fund.

SWOT ANALYSIS OF INDIA BULLS

STRENGTH

• Online trading platform.

• Diverse Branch Network provides ample opportunities to penetrate deep into the existing & untapped market.  

• India bulls offers its clients a pool of financial services and products:

• No annual maintenance charges. • No custodial charge. • It does not keep any condition as to collect minimum amount of

brokerage from its clients • Most competitive BROKERAGE and DP charges (on delivery

0.5% and on intraday 0.1%) • Equity analysis report to support the investment decision of its

clients • Trading via branch network, telephones and internet account i.e.

both online and offline • Induction of new employees through an extensive computer based

training module.

WEAKNESS

• It should have its own mutual funds as India bulls is providing advises in mutual fund.

• It should provide tips via SMS. • There should be a separate set of staff working in fields and trading

on behalf of their clients:   • Position to answer the questions of their clients relating to the

current market position as they are on fields. • Commodities are not traded online.

• It does not provide with the indices of major world markets, ADR prices of Indian scripts.

• Unlike some of its competitors like ICICI and Kotak, India bulls does not provide a complete catalogue of financial services (e.g. Banking facility).

OPPORTUNITIES1. Financial services like banking .2. Market expansion i.e. opening branches at untapped areas. 3. India bulls is registered with Luxembourg stock exchange and so can target other stock exchanges. 4. ATM facility should be provided for easy withdrawals. 5. The Capital market in the last few years has turned out to be one of the favorable avenues for the retail investors 6. Scope of online trading on BSE. 7. India bulls has tied up with other third party companies to sell their products. Due to the high client base of India bulls, there exists an opportunity to cross sell these products in the market.

THREATS1. Companies like Share khan, ICICI Direct, Kotak, and Private Brokers are major threats to India bulls. 2. Banks with demat facility jockeying for position. 3. Local brokers capable of charging lower brokerage. 4. Industry competitors vying for the same target segment. 5. Changes in SEBI guidelines & other tax implications. 6. Government Regulations.

STRENGTH:

Breadth of Services

In line with its client-centric philosophy, the firm offers to its clients the entire spectrum of financial services ranging from brokerage services in equities and commodities, distribution of mutual funds, IPOs and insurance products, real estate, investment banking, merger and acquisitions, corporate finance andcorporate advisory.Clients deal with a relationship manager who leverages and brings together the product specialists from across the firm to create an optimum solution to the client needs.

Management Team

Anand Rathi brings together a highly professional core management team that comprises ofindividuals with extensive business as well as industry experience.

In-Depth ResearchOur research expertise is at the core of the value proposition that we offer to our clients. Research teams across the firm continuously track various markets and products. The aim is however common - to go far deeper than others, to deliver incisive insights and ideas and be accountable for resultsWEAKNESSThe name of the organization ANAND RATHI indirectly indicates that it belongs to an individual.Small range of product line.

SWOT ANALYSIS OF MOTILAL OSWALStrengths

Large and diverse distribution network Strong research and sales teams Brand recognition Experienced top management Strong financial results

WeaknessesCharges are high compare to other companies in industry

Opportunities

Growing Financial Services industry's share of wallet for disposable income. Huge market opportunity for wealth management service providers as

Indian wealth management business is transforming from mere wealth safeguarding to growing wealth.

Regulatory reforms would aid greater participation by all class of investors Leveraging technology to enable best practices and processes Increased appetite (need) of Indian corporate for growth capital

Threats Execution risk Slowdown in global liquidity flows Increased intensity of competition from local and global players Unfavorable economic conditions

RESEARCH METHODOLOGY

METHODOLOGY

Type of research descriptive and explanatory

Sampling technique non-probability sampling

Sample size 88

Instrumentation technique Interview and Questionnaire

Sources of data collection Primary Data was collected by Interview and

Questionnaire while Secondary Data collected from books, internet, magazine.

It is a survey method. The questionnaire and interview schedule, personal interview will be relied upon for gathering primary data. An aggregate of 96 respondents from various Depository Participants responded to the questionnaire.

For the purpose of secondary data books, articles, reports, annual reports of the stock exchanges, Internet are used.

Analysis:

Age-investment amount

Income-investment amount

Education-investment amount

1. age –investment amount

Research Hypothesis

Ho: there is independency of investment amount on age.

Ha: there is no independency of investment amount on age.

Test applied: chi-square contingency test

Formula:

X2 = ∑∑(fo-fe)^2/fe

α=5% (assume)

df= (r-1)(c-1)=2

X2 0.05,2= 5.9915

X2 calculated= 0.737193

X2table value> X2 calculated

5.9915> 0.737193

Result: Ho: accepted

Business Implication:

As the null hypothesis is accepted, it means that the investment amount invested by the investors is

independent of age.

2. income- investment amount

Research methodology

Ho: there is independency of investment amount on the income of the investors.

Ha: there is no independency of investment amount on the income of the investors.

Test applied: chi-square contingency test

Formula:

X2 = ∑∑(fo-fe)^2/fe

α=5% (assume)

df= (r-1)(c-1)= 2 X2 0.05,2= 5.9915

investment amountincome

below 1L 1L-1.5L

10000-20000 32 5 3720001-30000 12 5 17above 30000 24 9 33

68 19 87

I II III=(I-II)^2 IV=III/IIobserved expected (O-E)^2

32 28.91954 9.4892324 0.3281255 8.08046 9.4892324 1.174343

12 13.28736 1.6572863 0.1247275 3.712644 1.6572863 0.44639

24 25.7931 3.21522 0.1246549 7.206897 3.21522 0.446131

Calculated value 2.64437

X2 calculated= 2.64437

X2table value< X2 calculated

X2 calculated = 2.64437

X2table value> X2 calculated

5.9915> 2.64437

Result: Ho. accepted

Business Implication:

As the null hypothesis is accepted which means that the amount invested on the preferred investment

is independent of their education.

3. education- investment amount

Research hypothesis:

Ho: there is independency of investment amount invested by the investors on education.

Ha: there is no independency of investment amount invested by the investors on education.

Test applied: chi-square contingency test

Formula:

X2 = ∑∑(fo-fe)^2/fe

α=5% (assume)

df= (r-1)(c-1)= 2

X20.05,1= 3.8415

investment amounteducation below1L 1L-1.5LGRAD 31 9 40PG+UG+OTHER 37 10 47

68 19 87

e1131.2643

7

e128.73563

2

e2136.7356

3

e2210.2643

7

I IIIII=(I-II)^2 IV=III/II

observed

expected (O-E)^2

3131.2643

70.0698

90.00223

5

98.73563

20.0698

90.00800

1

3736.7356

30.0698

90.00190

3

1010.2643

70.0698

90.00680

9

calculated value 0.01894

8

X2 calculated= 0.018948

X2table value< X2 calculated

3.8415< 0.018948

Result: Ho. accepted

Business Implication:

As the null hypothesis is accepted which means that the amount invested on the preferred investment

is independent of their education.