The Company recognizes the need to lay down a broad framework for considering decisions by the Board of the Company, with regard to distribution of dividend to its shareholders and/ or retaining or plough back of its profits.

The objective of the Policy is to appropriately reward shareholders through dividends while retaining the capital required for supporting future growth. This Policy is applicable to dividend declared/recommended on the equity shares of the Company. The Company is deeply committed to driving superior value creation for all its stakeholders. The focus will continue to be on sustainable returns, through an appropriate capital strategy for both medium term and long term value creation. Accordingly, the Board would continue to adopt a progressive and dynamic dividend policy, ensuring the immediate as well as long term needs of the business.

The Company can declare dividend only after ensuring compliance with the Companies Act, 2013, the Rules made thereunder and regulatory guidelines issued by RBI from time to time.

Under Section 2(35) of the Companies Act, 2013, “Dividend” includes any interim dividend. In common parlance, “dividend” means the profit of a company, which is not retained in the business and is distributed among the shareholders in proportion to the amount paid-up on the shares held by them.

Dividends will generally be recommended by the Board once a year after the announcement of annual results and before the Annual General Meeting (AGM) of the shareholders, as may be permitted by the Companies Act, 2013. The dividends for any financial year shall normally be paid out of the Company profits for that year. If circumstances require, the Board may also declare dividend out of accumulated profits of any previous financial year(s) in accordance with provisions of the Companies Act 2013 and Statutory Regulations, as applicable. The Board may also declare one or more Interim Dividends during the year.

The Dividend pay-out decision may depend upon certain external and internal factors:

EXTERNAL FACTORS

State of Economy: In case of uncertain or recessionary economic and business conditions, Board will endeavour to retain larger part of the profits to build up reserves and absorb future shocks.

INTERNAL FACTORS

Apart from various external factors as mentioned above, the Board will take into account various internal factors while declaring Dividend, which inter alia would include:

• Income/Profits earned during the year
• The Company’s liquidity position and future cash flow needs;
• Past dividend Trends ;
• Prevailing Taxation Policy or any amendments expected thereof, with respect to Dividend distribution;
• Present and future capital requirements of the business;
• Cost and availability of alternative sources of financing;
• Buyback of shares or any such alternate profit distribution measure
• Any other relevant factors that the Board may deem fit to consider before declaring Dividend

In case the Company is not fulfilling the criteria specified in point no. 5 above for each of the last three financial years, the Company may be eligible to declare dividend, subject to a cap of 10 percent on the dividend payout ratio, provided the Company complies with the following conditions:

(a) Meets the applicable capital adequacy requirement in the financial year for which it proposes to pay dividend; and

(b) Has net NPA of less than 4 per cent as at the close of the financial year.

The shareholders of the Company may not expect Dividend under the following circumstances:

• In the event of a growth opportunity where the company may be required to allocate significant amount of capital ;
• In the event of higher fund requirements for business operations or otherwise.
• In the event of inadequacy of cash flow available for distribution
• Allocation of cash required for buy-back of securities;
• Any of the above referred internal or external factors, including any regulatory or contractual restriction, if any, restraining the Company from considering dividend;

The Company shall endeavour to utlise the retained earnings in the following manner

• For expansion and growth of the business;
• Additional investments in existing business;
• Declaration of Dividend;
• General Corporate purpose and
• Any other specific purpose as may be approved by the Board

This Policy will be reviewed annually and placed before the Board of Directors of the Company. The Policy will also be subject to amendments necessitated due to changes in laws, rules, and regulations as and when required. Any changes or revisions to the Policy will be communicated to the Shareholders in a timely manner.