Dividend Policy
DIPAM, by an OM (F. No. 5/2/2016-Policy) dated May 27, 2016, issued “Guidelines on Capital Restructuring of Central Public Sector Enterprises” (“CPSE Capital Restructuring Guidelines”) read with OM F. No. PP/14(0005)/2016 dated June 20, 2016. In accordance with CPSE Capital Restructuring Guidelines, with effect from Fiscal Year 2016, our Company is required to pay a minimal annual dividend of 30% of its profit after tax (“PAT”) or 5% of its net worth, whichever is higher, unless an exemption is provided in accordance with the CPSE Capital Restructuring Guidelines. Therefore, subject to the provisions of CPSE Capital Restructuring Guidelines, the Articles of Association and the Companies Act, the declaration and payment of dividend is recommended by the Board and approved by the Shareholders.
Our Company has a formal dividend policy as adopted by the Board vide its board resolution dated August 28, 2022 (“Dividend Policy”). In terms of the Dividend Policy, the amount of dividend paid our Company, will depend on a number of factors, including but not limited to the future expansion plans and capital requirements, guidelines issued by DPE, profit earned during the fiscal year, utilization towards reserves and surpluses, liquidity and applicable taxes including dividend distribution tax payable by our Company, contractual restrictions, and restrictive covenants under the loan or financing arrangements we may enter into.
For further details on dividend paid by our Company, please refer “Restated Financial Statements– Notes to Restated Financial Statements” and “Financial Indebtedness” on pages 197 and 291 respectively.
The dividends and dividend distribution tax paid by our Company for the Financial Years ended on March 31, 2022, March 31, 2021 and March 31, 2020 as per our Restated Financial Statements and for the period starting from April 1, 2022, till the date of the Draft Red Herring Prospectus, are given below:
(In ₹ million)
| Particulars | Period | |||||||
|---|---|---|---|---|---|---|---|---|
| From April 1, 2022 till the date of this Draft Red Herring Prospectus | Fiscal 2022 | Fiscal 2021 | Fiscal 2020 | |||||
| Interim | Final | Interim | Final | Interim | Final | Interim | Final | |
| Face value per Equity Share (in ₹) | Nil | NA | Nil | NA | Nil | 10.00 | Nil | 100.00 |
| Total Dividend paid (in ₹ million) | Nil | NA | Nil | NA | Nil | 250.00 | Nil | 250.00 |
| Number of Equity Shares (in million) | Nil | NA | Nil | NA | Nil | 130.00 | Nil | 10.00 |
| Total Dividend paid per Equity Share (in ₹) | Nil | NA | Nil | NA | Nil | 1.92 | Nil | 25.00 |
| Total Rate of Dividend (%) | Nil | NA | Nil | NA | Nil | 19.23 | Nil | 25.00 |
| Dividend Distribution Tax (in ₹ million) | Nil | NA | Nil | NA | Nil | Nil | Nil | Nil |
| Mode of payment of dividend | Nil | NA | Nil | NA | Nil | Bank Transfer | Nil | Bank Transfer |
The amounts distributed as dividends in the past are not necessarily indicative of our dividend amounts, if any, or our dividend policy, in the future. There is no guarantee that any dividends will be declared or paid or that the amount thereof will not decrease in the future. Future dividends will depend on guidelines issued by DPE, our profits, revenues, capital requirements, contractual restrictions and overall financial position of our Company. For further details, see “Risk Factors – Our ability to pay dividends in the future will depend on our future cash flows, working capital requirements, capital expenditures and financial condition” on page 51.