Nigerian Exchange Group Plc has issued a dividend policy to ensure adequate shareholder return.
According to a statement from NGX, the policy document, which was approved by the group board and posted on the company’s website, was formulated in accordance with Nigerian laws, corporate governance codes and tax and investment laws.
According to the document, “NGX Group, through its dividend policy, seeks to guarantee the rights of shareholders, particularly with regard 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 provisions of the Company’s articles of association”.
Regarding the company’s administration of dividends, the policy document added that NGX Group 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,” the document reads.
“To this end, the policy will guide NGX Group in its approach to distributing excess funds from its distributable profits 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 NGX Group policy document also provided guidelines on the payment of dividends.
“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 to which the dividend is applicable,” he added.
In addition, the policy stated that the “group board may recommend an issue of (bonus) certificates in any year and any ratio it deems 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-up capital and retained earnings”.
NGX added that the policy delegates responsibility for deciding whether to pay dividends to the board and the annual general meeting (AGM).
“The decision to declare and pay a dividend, including the procedure for the payment of dividends, must be approved at the annual general meeting (AGM) of shareholders, on the recommendation of the board of directors,” the policy states.
“The Board of Directors may, at its 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 dividend in the AGM.
“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 unclaimed dividend. “