Nigerian Exchange Group (NGX Group) Plc has published its dividend policy to ensure shareholders receive returns on their investments.
The policy document, which has been approved by the directors of the NGX Group and published on the company’s website, has been formulated in accordance with Nigerian investment and taxation laws, corporate governance codes as well as to internationally recognized best practices.
According to the NGX Group policy document, “NGX Group, through its dividend policy, seeks to secure shareholder rights, particularly with respect to return on investment. The policy is developed to address issues related to the determination and payment of dividends.
“The group will apply the policy, accordingly, to determine any claim by any shareholder, individual or institution, relating to distributions of dividends by NGX Group subject to the company’s articles of association.”
Regarding the Group’s administration of dividends, the policy document added that NGX would apply the policy on an annual basis to develop transparent and methodological dividend consideration and payments.
“This approach will ensure that NGX Group has sufficient distributable earnings and/or general reserves, as determined by a review of the company’s audited financial statements together with consideration of other financial factors, prior to any statement and/or or dividend payment.
To this end, the policy will guide NGX Group in its approach to distributing excess funds from its distributable earnings and/or general reserves to shareholders, based on earnings and the availability of cash for distribution; business operating and capital requirements; the expected future growth and earnings of the business; and the provisions of the company’s articles of association, among others. the company said.
The NGX Group policy document also guided the dividend payable in cash in one year. According to the document, “the range of dividends payable in cash will be between a distribution rate of 25% and 75% of the distributable profit of the same year in which the dividend is applicable.
In addition, the policy stated that the group board could recommend issuance of (bonus) certificates in any year and in any ratio it deemed appropriate for any year by the capitalization of any undistributed retained earnings, in which the board, in recommending a premium, must maintain a balance between paid-in capital and retained earnings.
In line with best practice in corporate governance, the policy has delegated responsibility for the decision to pay dividends to the Board of Directors and the Annual General Meeting (AGM).
In addition, the policy document stated: “The decision to declare and pay a dividend, including the procedure for paying dividends, must be approved at the general meeting of shareholders, on the recommendation of the directors.
“The directors may, at their discretion, declare an interim dividend based on earnings achieved in accordance with unaudited quarterly or semi-annual financial results, noting that where no final dividend is declared, the interim dividend will be considered as the final AGM dividend.”
The document also provided guidance on when shareholders should expect to receive dividends to be paid by NGX.
He added: “The dividend is to be paid on the date the AGM is held in the year the dividend is declared or such other date approved by the shareholders at the AGM and no interest will accrue on any dividend. not demanded”.