Bakery and dairy products major Britannia Industries on Monday said its board has approved issuing bonus debentures and payment of dividend to reward its shareholders in such difficult and unprecedented times due to coronavirus pandemic.
The board of the company at its meeting held on Monday approved issue of a non-convertible, redeemable fully paid up debenture of the face value of Rs 29 by way of “bonus to the Members of the Company” for one paid-up equity share of face value of Re 1 (rupee one) each, by utilising its general reserve, Britannia Industries said in a regulatory filing.
Besides, the board has also approved “payment of dividend of Rs 12.50 per every one fully paid up equity share of face value of Re 1 each by utilising its accumulated profits”.
Elaborating the rationale behind the steps, Britannia Industries said upon taking into consideration its capability to generate strong cash flow and the accumulated profits being more than what is needed to fund the its future growth, “the company is of the view that these excess funds can be optimally utilised to reward its members in such difficult and unprecedented times by way of distribution”.
Accordingly, the company “has proposed, to distribute such funds amongst its members, by means of fully paid up bonus debentures and distribution of dividend through a scheme of arrangement with its members”, it added.
The company, however, said keeping with its philosophy of conservative cash management and being mindful of the challenging business environment, it is of the view that it would be prudent to retain liquidity in the company.
Shares of Britannia Industries on Monday settled at Rs 3,828.45 on BSE, up 0.49 per cent from the previous close.