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Introduction

In compliance with the Directive No. BSEC / CMRRCD / 2021-386 / 03 dated 14 January, 2021 of the Bangladesh Securities and Exchange Commission (BSEC), the Board of Directors of The IBN SINA Pharmaceutical Industry Ltd. ("IBN SINA Pharma" or the "Company") has formulated The Dividend Distribution Policy about dividend declaration, pay off, disbursement and complianceand disclosed the same publishing this statement as a guiding framework for the shareholders in the company's annual report and official website.

This statement provides a brief outline of the legal and regulatory provisions relating to dividend, key issues in dividend considerations and the procedure for the declaration, approval and payment of dividend.

 

Definitions

The Act" means Companies Act 1994

The Company" means The IBN SINA Pharmaceutical Industry Ltd.

AGM" means Annual General Meeting

Board" means Board of Directors of The IBN SINA Pharmaceutical Industry Ltd.

Shareholders" means Members whose name is registered in the Member Register of the Company.

Shares" means Ordinary Equity Shares.

 

Concept of Dividend

Dividend  is  the  share  of  the  profit  payable to the Shareholders of a  Company  as recommended by the Board of Directors and subsequently approved by the Company in General Meeting to  distribute the same  among  its Shareholders  in proportion to the amount paid-up on shares held by the respective Shareholders in the form of Cash and/or  Stock  (Bonus). No dividend shall be paid otherwise than out of profit of the Company.

 

Kinds of Dividend

The Act deals with two types of dividend - Interim and Final.

-  Interim dividend is the dividend declared by the Board being authorized by the Act between two AGMs during any financial year out of the profits/the surplus shown in the Financial Statements.

- Final dividend is the dividend derivedout of the profits/the surplus shown in the particular year's Financial Statements of the Company which is recommended by the Board and thereafter be approved by the Shareholders at the AGM of the Company.  Dividend once recommended by the Board of Directors cannot be changed ahead of the scheduled AGM.

Declaration of Dividend

It is the Company's practice to declare dividend on annual basis based on annual financial performance. However, the Board may also declare interim dividend based on periodic financial results. Historically the Company declared dividend in either cash or stock or in prudent combination of cash and stock.

 

Key Factors in Dividend Decisions

The circumstances for dividend pay-out decision depends on various  external and internal factors  while recommending/declaring dividend, the  Board  of  Directors  shall  consider  among others:

External Factors:

Endeavoring  to retain a certain portion of profits to build upthe reserves for future requirements as per norms;

Evaluating the market trends in terms of technological changeswhich  may  require  the  Company  to conserve the resources;

Considering the restrictions, if any, imposed by the Act and other applicable laws;

Legal and regulatory compulsion and tax implication of retention and payout;

Dividend distribution tax or any tax deduction at source as required by tax regulations;

Any debt/loan covenants restricting dividend announcements; and

Other  factors  beyond  control  of  the  Management  like biographical (caused by pandemic/catastrophic etc.) matters, natural  calamities,  etc. materially effecting operations of the Company may also impact the decision about dividend declaration.

 

Internal Factors:

Company's current net earnings i.e. Profitability of the Company;

Liquidity of the Funds i.e. accumulated distributable reserves/surplus and availability of free cash flow;

Capital expenditure requirements for the existing businesses;

BMRE status (Expansion/Modernization) of the Company;

Investments in subsidiaries/associate(s) of the Company;

Cost of raising funds from the alternate sources;

Cost of servicing outstanding debts;

Funds for meeting contingent liabilities;

Mergers and acquisitions;

Consistency of the dividend over reasonable and foreseeable coming years and also shareholders' perceptions; and

Any other factorsreasonablyconsideredproper by the Board of Directors.

 

 

 

 

Eligibility of Shareholders for Dividend

Dividend is declared on the face value of each Equity Share. Unless otherwise stated, all the holders of Equity Shares whose names appear on the register of the Company on the Record Date declared by the Company for entitlement of dividend are eligible to get the dividend.

 

Timing of Dividend Announcement and Payment

The Board of Directors of the Company in its meeting duly held within 120 days from the date of closing of the financial year takes the decision of Annual dividend to be distributed to the entitled Shareholders. Such decisions are based on the results of the audited financial statements. The dividend recommended by the Directors is notified to the Shareholders through stock exchanges, website and public media (printing and digital).

 

 

Dividend recommendations made by the Directors are to be placed in the Annual General meeting of the Company for the Shareholders' approval. Dividend are transferred to the respective shareholders' account within 30 days from the date of its approval. Interim Dividend if any declared by the Company, are paid within 30 days from the Record Date fixed by the Company for the entitlement of such dividend.

 

Disclaimer

The above Policy Statement neither gives a guarantee of dividend to be declared by the Company nor does it constitute a commitment for any future dividend and thus be read as a general guidance on different dividend related issues. The policy upholds the Board's absolute/complete liberty to recommend any dividend in deviation of the policy.

 

Policy Approval and Effective Date

This Policy has been approved by the Board of Directors of the Company at its meeting held on September 21, 2021 and shall be effective and applicable for dividend, if any, to be declared for the Financial Year 2020-21 and onwards.

 

Disclosure

This "Dividend Distribution Policy"and annual "Dividend Distribution Compliance Report" shall be disclosed in the Annual Report of the Company and on the Company's website www.ibnsinapharma.com.

 

Review and Amendment

As necessitated by the legal and regulatory requirements and for any other obvious reasons deemed to be pertinent in this regard, the  Board  may  amend,  abrogate,  modify  or  revise  any  or  all  provisions  of  this  Policy. However, amendments already made and/or to be made in this behalf in the Act or in the Listing Regulations shall be binding even if not incorporated in this Policy.