Business

HLL to stick to bonus debenture proposal

MUMBAI APRIL 5. Hindustan Lever said today that it had no plans to abandon the proposal to issue bonus debentures. HLL was waiting for the finalisation of the proposal relating to deduction of tax on dividends which were part of the Finance Bill 2002, says a release.

In case any material change was required in debenture scheme due to changes in tax laws, "the company will go back to shareholders to seek their approval for such changes". It was important to have clarity on the deduction of tax on dividends since `bonus debentures' are construed as `deemed dividend' for taxation purpose, HLL said.

Following a clear picture on this issue, the company would take appropriate action on the debentures scheme, pending before the Bombay High Court, it said.

The outflow on the proposed debentures may become part of `accounts' only after judicial approval. At present, auditors did not have any role in the debenture issue and in future, it would be restricted to making comments on its proper accounting as and when the scheme was executed, HLL said.

The shareholders had approved the bonus debenture proposal in December 2001. — PTI

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