Part – 3 Dematerialisation (Demat) / Rematerialisation (Remat) Of Shares
Members are informed that pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2018 effective 1st April, 2019 requests for effecting transfer of securities in physical form cannot be processed by the Company unless the securities are held in the dematerialized form with a depository. Hence, investors are requested to consider dematerializing their physical holdings into demat form.
Dematerialisation is the process by which physical share certificates are converted to electronic form through investor's Depository Participant (DP) and credited to the investor's account with his DP. Carborundum Universal Limited (CUMI) has entered into a tri-partite agreement with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) with Kfintech as the R&T agent to facilitate investors to hold and trade in CUMI’S shares in electronic form. The address of M/s KFin Technologies Private Limited is as follows:
KFin Technologies Private Limited
(Formerly known as Karvy Fintech Private Limited)
Unit: Carborundum Universal Limited,
Selenium building, Tower B, Plot 31-32,
Financial District, Nanakramguda,
Serilingampally, Hyderabad 500 032.
Toll Free No.: 1800-345-4001
Contact Person: Mr. Rajkumar Kale – Senior Manager
(A) Opening a demat account
A demat account needs to be opened with any one Depository Participant (DP) of investor's choice. You may also visit web site of depositories viz., NSDL or CDSL for further understanding about the demat procedure:
NSDL website: https://nsdl.co.in/faqs/faq.php (dematerialization)
CDSL website: https://www.cdslindia.com/investors/open-demat.aspx
- While opening demat account, the holder will be required to give details of his Bank Account No., Name of the Bank and Branch along with a self-attested copy of PAN, as part of the information requirement. The dividends declared by the Company will be automatically credited to the shareholder’s bank account through the Company’s dividend banker. In case, the dividend transfer through electronic mode is not successful, then dividend cheques/DDs will be sent to the shareholder by printing the bank details on the instrument.
- Please note that the order of names appearing in the demat account and the share certificates should be same.
(B) Dematerialising (Dematting) physical certificates
- In order to get the shares dematerialised, the investor needs to fill a Dematerialisation Request Form (DRF) which is available with the DP. The share certificates are to be submitted along with the duly filled up form to the DP.
- On receipt of the DRF, the DP will transmit the DRF to RTA and electronically generate the Dematerialisation Request.
- DRF along with share certificates with a seal "Surrendered for dematerialisation" affixed on the share certificates will be sent by the DP to RTA.
- RTA will verify the certificates and DRF, and if found in order, confirm the dematerialisation to NSDL/CDSL. NSDL/CDSL will in turn confirm the dematerialisation to the DP.
- On receiving the confirmation, DP will credit investor's account with the number of shares so dematerialised and thereafter the investor will be holding the shares in the electronic form.
- Normally the investor’s account will be credited within 15 days from the date of receipt of both Electronic Request and physical certificates along with DRF.
- DP will give periodic statements of holdings and will update client's account after each transaction.
The following are the advantages which the investor avails by getting his shares dematerialised.
- No stamp duty for transfer of securities in the Depository System. In the case of physical shares, stamp duty is payable on transfer of shares (at the rate of 0.25 paise for every Rs. 100 of the market value/consideration of shares, whichever is higher as on the date of execution of transfer).
- Elimination of bad deliveries and all risks associated with physical certificates such as loss in transit, theft, mutilation, damage, etc.
- Instead of filling up transfer deed(s) a simpler form is to be given to the DP.
- Facility to pledge and hypothecate securities. Pledging dematerialised securities is easier and advantageous as compared to pledging physical shares. In respect of shares in "compulsory demat" category, banks prefer to lend against shares held in electronic form, and offer better terms.
- Odd lots are not differentiated in the electronic system. Even a single share can be traded at the market rates without any reduction in realisation.
- Just like a bank branch, the DP will give a periodical statement of account of holdings. In addition, investor can obtain a statement of holdings as and when required for a fee.
- In case investor loses the statement of holdings, he can inform his DP and obtain a duplicate statement. Investor's statement of holdings cannot be used by anybody else for trading in his account.
- When an investor opens an account with a DP, he signs an agreement with the DP in which the DP will indemnify the investor for any misuse of his holdings. The depository will also ensure that the interests of the investor are protected. Grievances, if any, against his DP will be resolved by the Depository.
- Every transaction in investor's account will have to be authorised by him which ensures total control of the investor over his investment.
It is possible to re-convert securities held in electronic form after demat, back to physical holding. 'Rematerialisation' is the term used for converting electronic holdings back into physical certificates.
- Any investor wishing to convert securities held in electronic form to physical form, has to submit a Rematerialisation Request Form (RRF) to his DP for rematerialisation of the same.
- DP will electronically transmit RRF to RTA and generate Rematerialisation Request No (RRN).
- RRF submitted by the investor will be sent by the DP to RTA.
- RTA will verify the RRF and confirm the rematerialisation to NSDL/CDSL. NSDL/CDSL will remove the securities rematerialised from the investor account.
- RTA will print the certificates and forward the same to the Company for the signature of the authorised officials in the certificates for onward transmission to the investor.
Considering the demerits of holding shares in physical form, members are encouraged to hold shares in dematerialized mode.