Well Ravi! Here are the Monetary Benefits and Non-monetary Benefits.
Monetary Benefits
On the basis of the particulars of the holdings of beneficial owners received from NSDL on the cut-off date, the Issuer / its R&T Agent distribute dividend, interest and other monetary benefits directly to the beneficial owners.
SEBI vide its Circular No. DCC/FITTCIR-3/2001 dated October 15, 2001 has advised that companies should mandatorily use ECS facility for distribution of dividends and other cash benefits to the investors. However, where ECS facility is not available, companies may use warrants for distribution of dividends. Further, SEBI has advised that companies should mandatorily print the bank account details furnished by the Depositories on the payment instruments.
Non-monetary Benefits
On the basis of the particulars of the holdings of beneficial owners received from the depository as of the cut-off date, the Issuer / its R&T Agent informs the eligible beneficial owners about the corporate action / benefit. In case the benefits are in form of securities, the Issuer / its R&T Agent gives an option to all shareholders (including shareholders holding shares in physical form), to get securities allotted in electronic form or physical form. A person holding securities in physical form may opt for receiving securities in dematerialised form and vice-versa. If holders do not indicate any choice, the Issuer / its R&T Agent issues the securities in the same form in which the shareholder held the securities as on the record date. Thus, if a shareholder is holding shares in electronic form, the newly allotted shares will be credited to his account electronically.
If shareholders holding shares in physical form, opt for credit of newly allotted shares in electronic form, the Issuer / its RTA executes a corporate action to credit the newly allotted shares to the demat accounts of such shareholders on a particular date (i.e. the execution date). The Issuer / its R&T Agent allots the securities and informs NSDL about allotment details of all beneficial owners. On receipt of these details, NSDL makes the credit entries in the accounts of the beneficial owners on a date requested by the Issuer / its R&T Agent (the execution date).
In cases where the details of accounts to which the Issuer / its R&T Agent has made allotment, do not match with those maintained with NSDL, such records will be rejected. NSDL then requires the Issuer / its R&T Agent to rectify the records within thirty days from the execution date. In case the Issuer / its R&T Agent fails to rectify the records within the stipulated period, the allotment of the rejected records will have to be made in physical form outside the depository system.
The statement of transactions sent by the DP to the beneficial owners, will indicate the updated holdings after execution of the corporate action.
Information collected from www.nseindia.com
Answered by
Kumaar
at
3:52 PM on October 27, 2008
