Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities (i.e. shares, bonds etc.) in electronic form and credited into the investor's demat account maintained by him with his Depository Participant (DP).
SEBI has notified various companies whose shares shall be traded in demat form only. By virtue of such notification, the shares of the Company are also subject to compulsory trading in demat form on the Stock Exchanges. According to the Depositories Act, 1996, an investor has the option to hold securities either in physical or electronic form. Part of holding can be in physical form and part in demat form. However, SEBI has notified that settlement of market trades in listed securities should take place only in the demat mode.
Dividend of shareholders holding shares in dematerialized form will be credited through Electronic Mode to the bank accounts as opted by them while opening the Beneficiary Accounts with the DP. In other cases, dividend warrants will be dispatched to them with the bank account details, as furnished by the Depositories, printed thereon.
Holding shares in dematerialized form will not affect the rights of the Shareholders. They, as members of the Company, will be entitled to receive Annual Report, attend General Meetings and participate and vote there at to the extent of their entitlement.
Yes. Shares held in dematerialized form can be pledged as security for the purpose of availing loan/credit facility from a bank or as collateral for availing finance from other financial institutions, subject to complying with the terms and conditions prescribed by the DP.
Yes. Shares held in dematerialized form can be pledged as security for the purpose of availing loan/credit facility from a bank or as collateral for availing finance from other financial institutions, subject to complying with the terms and conditions prescribed by the DP.
Since shareholders demat account is maintained by their DP, all request/communication regarding change in address, bank account details, ECS mandate, registration of nomination etc. should be addressed by the shareholders to the DP directly.
Shareholder in such case need to contact the RTA of the Company, quoting their beneficiary account number (i.e. Client ID) and DP ID.
Transferee(s) need to send share certificate(s) along with share transfer deed in the prescribed Form SH4, duly filled in, executed and affixed with share transfer stamps along with self attested copies of PAN card(s) of all buyers and sellers to the Company's RTA. The statutory time limit fixed for completing a transfer is 15 days from the date of receipt of request for transfer under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and one month under the Companies Act, 2013.
As per Article 62(a) of Schedule 1 of Indian Stamp Act, 1899, currently stamp duty is payable @ 0.25% of total consideration viz. being the market value of the shares as traded on the date of execution of transfer.
SEBI vide its Circular MRD/DoP/ Cir-05/2009, dated May 20, 2009 and Schedule VII: Transfer of Securities (See Regulation 40(7) and 61(4)) has clarified that for securities market transactions and off-market / private transactions involving transfer of shares in physical form of listed companies, it shall be mandatory for the transferee(s) and transferor(s) to furnish copy of PAN card to the Company/ its RTA for registration of such transfer of shares.
Transferee needs to immediately proceed to get the errors/ discrepancies corrected. Transferee needs to contact the transferor (seller) either directly or through his broker for rectification or replacement with good securities. After rectification or replacement of the securities the same can be resubmitted for effecting transfer. In case the errors are non rectifiable, purchaser has recourse to the seller and his broker through the Stock Exchange to get back his money. However, in case of off-market transactions, matter should be settled with the seller only.
Conversion of single holding into joint holdings or joint holdings into single holding leads to a change in the pattern of ownership, and therefore, procedure for a normal transfer as mentioned above needs to be followed.
The procedure for registration of shares gifted (held in physical form) is same as the procedure for a normal transfer. The stamp duty payable for registration of gifted shares would be @ 25 paise for every Rs. 100 or part thereof, of the face value or the market value of the shares prevailing as on the date of the document, if any, conveying the gift or the date of execution of the transfer deed, whichever is higher. The procedure for registration of shares gifted (held in demat form) is the same as the procedure for transfer of shares in demat form in off-market mode. Transfer of shares as gift in the demat from does not attract any stamp duty.
The surviving shareholder(s) will have to submit a request letter supported by an attested copy of the death certificate of the deceased shareholder and accompanied by the relevant share certificate(s). The Company's RTA, on receipt of the said documents and after due scrutiny, will delete the name of the deceased shareholder from its records and return the share certificate(s) to the surviving shareholder(s) with necessary endorsement.
No. Deletion of name has to be done for the entire shareholding under a folio.
Addition of name tantamount to transfer of share. It can be done by following the procedure laid for transfer of shares.
The legal heir(s) should obtain a Succession Certificate or Letter of Administration with respect to the shares and send a true copy of the same, duly attested, along with a request letter, transmission form, and the share certificate(s) in original, to the Company's RTA for transmission of the shares in his / their name(s).
Share certificates along with a request letter duly signed by all the joint holders together with self attested PAN of all the holders may be sent to the Company's RTA for change in order of names, known as 'transposition'. Transposition can be done only for the entire holdings under a folio. For shares held in demat form, investors are advised to approach their DP concerned for transposition of the shares.
Shareholders who have lost / misplaced share certificate(s) should inform the Company's RTA, immediately about loss of share certificate(s), quoting their folio number and details of share certificate(s), if available. The RTA shall immediately mark a 'stop transfer' on the folio to prevent any further transfer of shares covered by the lost share certificate(s). It is recommended that the shareholders should lodge a FIR with the police regarding loss of share certificate(s). They should send their request for duplicate share certificate(s) to the Company's RTA and submit documents as required by the RTA.
Shareholder shall return the original share certificate(s) to RTA of the Company for cancellation.
Shareholder shall submit his / her application in writing to Company's RTA, duly signed by all the shareholders, requesting for replacement of share certificate(s), enclosing therein the torn, defaced or mutilated share certificate(s).
Shareholders may write to the Company's RTA enclosing the relevant share certificate for splitting into smaller lots. The share certificates, after splitting, will be sent by the Company's RTA to the shareholders at their registered address.
Consolidation of share certificates helps in saving costs in the event of dematerializing shares and also provides convenience in holding the shares physically. Shareholders having certificates in various denominations under the same folio should send all the certificates to the Company's RTA for consolidation of all the shares into a single certificate. If the shares are not under the same folio but have the same order of names, the shareholder should write to the Company's RTA for the prescribed form for consolidation of folios.
Shareholders holding shares in physical form, may send a request letter, duly signed by all the holders, giving the new address along with Pin Code, to the Company's RTA. Shareholders are also requested to quote their folio number and furnish proof such as attested copies of PAN Card / Aadhar Card / Passport / Latest Electricity or Telephone Bill / Lease Agreement etc. If shares are held in dematerialized form, information about change in address needs to be sent to the DP concerned.
Yes, if the POA has been registered with the Company and if such POA contains a provision authorizing him to instruct companies to record change in shareholders address. In case the POA has not been registered, POA holder is required to submit a certified true copy of the POA along with his application for effecting change in shareholders address.
Shareholders may request the Company's RTA for effecting change of name in the share certificate(s) and records of the Company. Original share certificate(s) along with the supporting documents like marriage certificate, court order / Gazette Notification, copy of self attested PAN Card should be enclosed. The Company's RTA, after verification, will effect the change of name and send the share certificate(s) in the new name of the shareholders. Shareholders holding shares in demat form, may request the concerned DP in the format prescribed by DP.
Shareholders need to execute a Power of Attorney in favour of the concerned person and submit a notarized copy of the same to the Company's RTA. After scrutiny of the documents, the RTA shall register the Power of Attorney and inform the shareholders concerned about the registration number of the same. Whenever a transaction is done by the Power of Attorney holder, this registration number should be quoted in the communication.
Nomination refers to the act of nominating a person in whom the shares would vest in the event of unfortunate death of the nominator (shareholder).
Notwithstanding anything contained in any other law or any testamentary deposition or otherwise, in respect of the shares, where a nomination has been made in accordance with the provisions of Companies Act, on the death of the shareholder, (or in case of joint holdings, on the death of all the joint holders), the Nominee shall become entitled to the rights in relation to such shares held by the deceased shareholder(s), to the exclusion of all other persons unless the nomination is revoked. This facility is mainly useful for individuals holding shares in sole name.
Shareholder shall submit Nomination Form in duplicate, duly filled and signed by all the shareholders. Shareholders can nominate three nominees per folio by giving the percentage of their holding to each nominee. However if the shareholder(s) hold more than one folio; but in different order of names or hold in joint names in more than one folio in different combination of names, then they can appoint different nominees under each folio. On receipt of the request for registration of nomination, the RTA will register the same by allotting a registration number. The duplicate copy of the nomination form will be returned to the shareholder(s) indicating the registration number and the date of registration of nomination.
In case the shares are held in dematerialized form, the nomination has to be recorded by the DP, who is maintaining the demat account. Once the nominee details are updated in shareholders demat account, the individual will be nominee for all the shares available in shareholders demat account. There is no need to separately inform each company of the demat account nominee.
No. The nomination should be made for the entire shareholding under a folio.
Individual shareholders holding the shares / debentures in single name or joint names can appoint a nominee. While an individual can be appointed as a nominee, a trust, society, body corporate, partnership firm, karta of HUF or a power of attorney holder will not be nominee(s). Minors can, however, be appointed as a nominee.
Yes, a nomination form must be witnessed by two witnesses
No
Joint holders are not nominees; they are joint holders of the relevant shares having joint rights on the same. In the event of death of any one of the joint holders, the surviving joint holder(s) of the shares is / are the only person(s) recognized under law as holder(s) of the shares. Surviving Joint holder(s) may appoint a nominee.
Yes. A nomination once made can be revoked by making a fresh nomination. In case joint shareholders have made a nomination, and one of them expires, the surviving shareholder(s) can make a fresh nomination. Further, upon transfer of shares, the nomination stands automatically rescinded.
RTA, on being satisfied about the identity of the Nominee, will request the Nominee elect to either register himself as a shareholder or to transfer the shares. The Nominee is then required to issue a notice of his election. However, if the Nominee elects to be registered as a shareholder, he shall send a notice to RTA in writing, stating that he so elects.
In the event of death of one of the joint holder, the shares get transmitted in the name of the surviving holder. The death of one of the joint holder does not rescind the nomination, as the Nominee will have title to the shares only after the death of all the joint holders. However, as stated earlier, the surviving shareholder(s) can make a fresh nomination.
In case of shares held by sole holder, upon the death of the shareholder, the nominee, to the exclusion of any other legal heir/beneficiary, is the only person in whom the shares vest. In other words, in case of a valid nomination, the Company will not entertain any claim from legal heirs or beneficiaries and the shares will be transmitted only in favour of the Nominee. In case the nomination is made by joint-holders, it will come into play only upon the death of all the joint holders. Therefore, if one of the joint shareholders dies, the shares will devolve on the surviving shareholders to the exclusion of the nominee. In this case, the surviving shareholders may make a fresh nomination if they so desire.
In terms of Sub-Section (4) of Section 72 of the Companies Act, 2013, if the Nominee is a minor, it shall be lawful for the holder of the shares to nominate in the prescribed manner any person to become entitled to shares in the event of his death during the minority of the Nominee. A perusal of the prescribed Form SH 13 reveals that in case of a minor Nominee, a person is required to be named as a guardian to whom the shares shall vest in the event of death of the shareholder during minority of Nominee. On attaining majority, the Nominee is required to send a notice of his decision to either become a shareholder or to transfer the shares.
If a nominee dies before the shareholder, the nomination automatically gets cancelled until and unless the shareholder furnishes fresh nomination form to the company. In such an event the company transmits the shares in favour of the legal heirs or the holder(s) of the succession certificate. Thus the heirs of the nominee are not entitled to the shares if the nominee has predeceased the shareholder.
The nominee is entitled to all the rights of the deceased shareholder to the exclusion of all other persons. In the event of death of the shareholder, all the rights of the shareholder shall vest in the nominee. The nominee is required to apply to the Company by reporting the death of the nominator along with the death certificate.
The nominee has an option to decide to register himself as a shareholder or he could send an application to have the shares transferred to any other person to whom the nominator could have otherwise transferred the shares. If the nominee opts to transfer the shares to a third party, he should submit to the Company's RTA the transfer deed(s) duly stamped and executed accompanied by the relevant certificate(s) and other documentary proof(s).
If shares are held in dematerialized form, nomination has to be registered with the concerned DP directly, as per the format prescribed by the DP
Duly signed transmission request form; - Original or Copy of death certificate duly attested by a Notary Public or by a Gazetted Officer; - Self-attested copy of PAN card (Copy of PAN card may be substituted with ID proof in case of residents of Sikkim after collecting address proof) - Additional documents:
National Automated Clearing House (NACH) is a centralized clearing system launched by the National Payments Corporation of India (NPCI). It is a centralized, web-based clearing service that can ease the work of banks, financial institutions, the government and corporates by consolidating all regional ECS systems into one national payment system, thereby removing any geographical barriers in efficient banking. The various facilities offered by NACH include standardization and digitization of mandates, overall simplification, reduction of operational cost, and minimization of activation time. It comes in two variants – ECS Credit and ECS Debit. The significant benefits to bank customers include automatic debits from their account for bill payments (telephone, electricity, etc), loan installments, insurance premiums and more.
While the Local ECS, Regional ECS, National ECS are controlled by the Reserve Bank of India or by the designated commercial banks, NACH functions on all India platforms managed by the National Payments Corporation of India (NPCI).
The NACH is different from NEFT or RTGS fund transfer because in case of NACH a person is not required to give a separate mandate for every transaction. A single mandate works for multiple transactions.
NACH operates on the principle of single debit to the sponsor bank’s account and multiple credits to different destination banks’ accounts.
It provides investors an option to collect dividend / interest directly through their bank accounts rather than receiving the same through post. Under this option, investor's bank account is directly credited and an advice thereof is issued by the Company after the transaction is effected. The concerned bank branch credits investor's account and indicate the credit entry in his / her pass book / statement of account. If any investor maintains more than one bank account, payment can be received at any one of his / her accounts as per the preference of the investor. The investor does not have to open a new bank account for the purpose
The advantage of NACH includes faster credit of remittance to the beneficiary's account, coverage of more bank branches and ease of operations for the remitting agencies.
Individual shareholders holding the shares / debentures in single name or joint names can appoint a nominee. While an individual can be appointed as a nominee, a trust, society, body corporate, partnership firm, karta of HUF or a power of attorney holder will not be nominee(s). Minors can, however, be appointed as a nominee.
Investors holding shares in physical form may send their NACH Mandate Form, duly filled in, to the Company’s RTA. However, if shares are held in dematerialized form, NACH mandate has to be sent to the concerned depository participants (DP) directly, in the format prescribed by the DP. Investors must note that NECS essentially operates on the new and unique bank account number, allotted by banks post implementation of Core Banking Solutions (CBS). Therefore, shareholders are requested to furnish the new bank account number allotted by the banks post implementation of CBS, along with a copy of cheque pertaining to the concerned account, to the Company’s RTA in case the shareholders hold shares in physical form and to the concerned DP in case the shareholders hold shares in demat form. In case shareholders do not provide their new account number allotted after implementation of CBS, the ECS to their old account may either be rejected or returned.
The Company obtains the details of beneficiary holders (Shareholders) from the Depositories as on the date of book closure / record date fixed by the Board of Directors. Dividend in respect of shares held in electronic form is normally credited through NACH to the bank account as per the details provided in the Beneficiary Account of the shareholder maintained by the DP. In the absence of such NACH facility in a particular city, the dividend warrants are dispatched to the address as available in the DP account and the bank account details are printed thereon.
Shareholders may write to the Company's RTA, furnishing the particulars of the dividend not received, and quoting the folio number/DP ID and Client ID particulars (in case of dematerialized shares). On expiry of the validity period, if the dividend warrant still appears as unpaid in records, duplicate warrant will be issued. The Company’s RTA would request the concerned shareholder to execute an indemnity before issuing the duplicate warrant.
However, duplicate warrants will not be issued against those shares wherein a ‘stop transfer indicator’ has been instituted either by virtue of a complaint or by law, unless the procedure for releasing the same has been completed.
Shareholders are requested to note that they have to wait till the expiry of the validity of the original warrant before a duplicate warrant is issued to them, since the dividend warrants are payable at par at several centres across the country and the banks do not accept ‘stop payment’ instructions on the said warrants.
Since the dividend warrants are payable at par at several centres across the country, banks do not accept 'stop payment' instructions. Hence, shareholders have to wait till the expiry of the validity of the original warrant.
Shareholders who have not encashed their dividend warrants within the validity period may send their request of revalidation to the Company's RTA enclosing the said dividend warrants. The Company's RTA will after due verification of the records, issue a revalidated dividend warrant. The revalidated warrant will be valid for a period of 3 months from the date of such warrant.
As per the Depository Regulations, the Company is obliged to pay dividend on dematerialized shares as per the bank account details furnished by the concerned Depository. Therefore, investors are requested to keep their bank particulars updated with the DP.
The dividend on shares lying in the clearing account of the brokers cannot be made available to the members directly by the Company. In case an investor has bought any shares, he must ensure that the shares are transferred to his demat account before the book closure / record date.
As per the provisions of Section 124 of the Companies Act, 2013, dividends not encashed / claimed by the Members of the Company, within a period of 7 (seven) years from the date of declaration of dividend, shall be transferred by the Company to the Investor Education and Protection Fund (IEPF).
Further, pursuant to the provisions of Section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority Rules, 2016 (IEPF Rules), all shares on which dividend has not been paid or claimed for seven consecutive years or more shall be transferred to an IEPF suspense account (in the name of the Company) within 30 (thirty) days of such shares becoming due for transfer to the Fund.
However, shares in respect of which specific order of Court or Tribunal or statutory Authority restraining any transfer of such shares and payment of dividend is registered with the company or shares which are pledged or hypothecated under the provisions of the Depositories Act, 1996, shall not be so transferred. The voting rights on shares transferred in the name of IEPF Authority shall remain frozen until the rightful owner claims the shares.
The Members/claimants whose shares and/ or unclaimed dividend have been transferred to the Fund, may claim the shares or apply for refund by making an application to IEPF Authority in Form IEPF 5 (available on www.iepf.gov.in) along with requisite fees as decided by the Authority from time to time. The member/claimant can file only one consolidated claim in a Financial Year as per IEPF Rules. The Company and IEPF Authority shall deal with the application in the manner provided in IEPF Rules.
This information is available at http://www.bajajcorp.com/unpaid_dividend.aspx in addition to being made available on Ministry of Corporate Affairs website.
