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ANNEXURE – A
DIVIDEND
DISTRIBUTIONPOLICY
1. INTRODUCTION
The Company aims at rewarding its shareholders by sharing a
part of its profits after retaining sufficient funds for the growth
of the Company. The Company has been able to pursue its aim
over years and has been able to maintain fairness, consistency
and sustainability while distributing profits to its shareholders.
This policy has been framed with an objective to ensure the right
balance between the quantum of Dividend paid and amount of
profits retained in the business for various purposes.
2. PURPOSE AND REGULATORY
FRAMEWORK
In accordance with the provisions of the Companies Act, 2013
and rules made thereunder (the ‘Act’) and Regulation 43A of
the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (the ‘Listing
Regulations’), as amended from time to time, this Policy
provides guidance for declaration of dividend and its pay-out
by the Company.
The Board of Directors (the ‘Board’) will consider the Policy
while declaring / recommending dividend on behalf of the
Company. The Policy is not an alternative to the decision of
the Board for recommending / declaring dividend, which takes
into consideration all the relevant parameters/circumstances
enumerated hereunder or other factors as may be decided by
the Board.
3. CONCEPT OF DIVIDEND
Dividend is the share of the profit that a Company decides
to distribute among its shareholders. The profits earned by
the Company can either be retained in the business or can be
distributed among the shareholders as dividend.
4. TYPES OF DIVIDEND
The Act deals with two types of dividend - Interim and Final.
Interim Dividend
Interim dividend is the dividend declared by the Board between
two Annual General Meetings as and when considered
appropriate. The Board shall have the absolute power to declare
interim dividend during the financial year, as and when deemed
fit. The Act authorises the Board to declare interim dividend
during any financial year out of the profits for the financial year
in which the dividend is sought to be declared and/or out of the
surplus in the profit and loss account.
Normally, the Board could consider declaring an interim
dividend after finalization of quarterly (or half yearly) financial
statements.
Final Dividend
Final dividend is recommended for the financial year at the
time of approval of the Annual Financial Statements. The
Board shall have the power to recommend final dividend to the
shareholders for their approval at the Annual General Meeting
of the Company.
5. DIVIDEND DECLARATION
Subject to the provisions of the Act, dividend shall be declared
and paid out of:
I. Profits of the Company for the year for which the dividend is
to be paid after setting off carried over previous losses and
depreciation not provided in the previous year(s);
II. Undistributed profits of the previous financial years after
providing for depreciation in accordance with law and
remaining undistributed.
III. Out of I and II both.
Before declaration of dividend, the Company may transfer
a portion of its profits to reserves of the Company as may be
considered appropriate by the Board at its discretion.
In the event of inadequacy or absence of profits in any financial
year, a Company may declare dividend out of free reserves
subject to the compliance with the Act.
6. PARAMETER / FACTOR GOVERNING
DECLARATIONOF DIVIDEND
The decision regarding dividend pay-out is a crucial decision
as it determines the amount of profit to be distributed among
shareholders and amount of profit to be retained in business.
The circumstances for dividend pay-out decision depends on
various external and internal factors as under:
EXTERNAL FACTORS:
The Board shall consider various external factors while declaring
dividend including the following:
Economic Scenario
The Board shall endeavour to retain a larger portion of profits to
build up reserves, in case of adverse economic scenario.
Market Scenario
The Board shall evaluate the market trends in terms of
technological changes mandating investments, competition
impacting profits, etc., which may require the Company to
conserve resources.
Regulatory Restrictions / Obligations
In order to ensure compliance with the applicable laws, the
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