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CHENNAI, March 5

TWO TVS group companies - TVS Motor Co and Sundaram Clayton - today announced their decisions to defer declaring dividends, taking advantage of the Budget proposal to remove dividend tax at the hands of the shareholders.

The 2003-04 Budget had proposed to abolish the 10 per cent dividend tax payable at the hands of the shareholders and replace it with a 12.5 per cent tax to be paid by the companies themselves on the dividends distributed.

In separate communications to the stock exchanges, the two companies have said that in the interest of the shareholders, the board of directors has decided to declare and pay dividend on or after April 1. In the case of TVS Motor Co the dividend was earlier scheduled to be declared in the third week of March while Sundaram Clayton had proposed to declare dividend in the fourth week of this month.

In view of this, the record date of March 27 in the case of TVS Motor Co and March 29 in the case of Sundaram Clayton will be revised, according to the communications.

It may be recalled that when the 2002-03 Budget proposed replacing the dividend distribution tax and instead tax the dividend at the hands of the shareholders, a large number of companies rushed to declare dividends, as the promoters were the largest beneficiaries of the tax-free dividend for a majority of the companies.

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