The Hindu : Corporates queue up to defer dividend

Online edition of India's National Newspaper
Thursday, Mar 06, 2003

Business

Business

Corporates queue up to defer dividend

By Our Corporate Reporter

CHENNAI MARCH 5. The board of directors of TVS Motor Company has decided to declare and pay dividend on or after April 1, which was earlier scheduled to be declared during the third week of this month. In view of this the record date of March 27, fixed earlier, will be revised.

Similarly Sundaram Clayton, another TVS group company, has informed the Bombay Stock Exchange that the directors have decided to declare and pay dividend on or after April 1. It had earlier scheduled the meeting in the fourth week of this month. It had fixed the record date on March 29, which will be revised.

The promoters in TVS Motor hold 58.96 per cent on the equity capital of Rs. 23.10 crores. The promoters' stake in Sundaram Clayton is 80.13 per cent of the equity capital of Rs. 18.97 crores.

The proposed changes in the Central budget have replaced the provision for taxation of dividend at the hands of shareholders by a provision of dividend distribution tax at the hands of the company at a flat rate of 12.81 per cent (including surcharge). Though this would benefit retail shareholders, the promoter shareholders who have a large stake in the company, would also be benefited. Only in the last year budget the previous Finance Minister, Yashwant Sinha, shifted the incidence of taxation at the hands of shareholders with a view to targeting high networth individuals — mostly the promoters who had large stake in the company. But some companies, where the promoters were holding larger stake, came out with attractive interim dividends before the budget proposals were given effect keeping the dividend distribution tax burden on their companies. But the Securities and Exchange Board of India (SEBI) had to interfere in some instances where the listing norms were violated by not following mandatory notice periods for payment of dividend stipulated by the Stock Exchanges.

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