To guarantee that investors get a return on their investments, Nigerian Exchange Group (NGX Group) Plc has published its dividend policy.
The policy document was developed in accordance with nigerian investment and tax laws, codes of corporate governance, and generally accepted best practices. it was approved by the ngx group directors and posted on the company website.
the ngx group policy paper states that “ngx group intends to ensure shareholder rights through its dividend policy, particularly as it relates to return on investment.” the policy was created to address problems with dividend calculation and distribution.
In accordance with the policy, the group “must apply the policy to determine any claim by any shareholder, individual, or institution, regarding the dividends payments by NGX Group subject to the articles of association of the company.”
The policy paper further said that NGX will implement the policy annually to create transparent and methodical dividend consideration and disbursements with regard to the administration of dividends by the Group.
This strategy will guarantee that NGX Group has enough distributable profits and/or general reserves before any dividend declaration and/or payment, as decided by a review of the company’s audited financial statements as well as consideration of other financial variables.
In order to achieve this, the policy will direct the NGX Group’s approach to allocating excess funds from its distributable profits and/or general reserves to shareholders, as may be determined, among other things, by profit and cash available for distribution, the company’s operating and investment needs, its anticipated future growth and earnings, and the provisions of its articles of association. The business stated.
The annual dividend payable in cash was likewise governed by the NGX Group policy statement. “The range of dividend payable in cash will range between a pay-out ratio of 25% and 75% of the distributable earnings of the same year to which the dividend is relevant,” the paper states.
The policy also stated that the board of directors of the Group may capitalise any undistributed retained earnings in any year and in any ratio that it deems appropriate, and that the board, in recommending a bonus issue, shall maintain a balance between the paid-up capital and the undistributed retained earnings.
The policy assigned control over the decision to pay dividends to the Board of Directors and the annual general meeting(AGM) in accordance with best practices in corporate governance.
In addition, the policy paper stated: “On the proposal of the directors, the decision to declare and pay a dividend, including the method for making dividend payments, shall be authorized at the AGM of shareholders.
If no final dividend is declared, the interim dividend will be regarded as the final dividend in the AGM. “The directors may, in their discretion, declare an interim dividend based on profits arrived at as per quarterly or half-yearly unaudited financial results.”
The paper also included information about the day when stockholders might anticipate receiving dividend payments from NGX.
The statement continued, “Dividend is to be paid on the day of the AGM held in the year in which dividend is declared or on any other date approved by the shareholders at the AGM and no interest shall accrue on any unclaimed dividend.”