Recommendation of Dividend on Equity Shares under Companies Act, 2013

“RESOLVED THAT pursuant to the provisions of Sections 123, 124, 127 and other applicable provisions, if any, of the Companies Act, 2013 read with the rules made thereunder and subject to approval of the members at the ensuing Annual General Meeting, the Board of Directors be and is hereby pleased to recommend a dividend of ₹[●] per Equity Share (being [●]%) on the Equity Shares of the Company for the financial year ended [●], aggregating to ₹[●], out of the profits of the Company available for distribution.

RESOLVED FURTHER THAT the aforesaid dividend, if declared by the members at the Annual General Meeting, shall be paid to the members whose names appear in the Register of Members/beneficial owners as on the Record Date or Book Closure Date determined by the Company.

RESOLVED FURTHER THAT any Director and/or Company Secretary and/or Chief Financial Officer be and are hereby severally authorised to undertake all actions necessary for payment and distribution of the dividend and to do all such acts, deeds and things as may be necessary for giving effect to this resolution.”
----------------------------------------------------------------------------------------------------------
Important Compliance Note – Exemptions / Cases where Dividend Declaration is not required

1. The Companies Act, 2013 does not mandate declaration of dividend. Dividend is discretionary and may be declared only when the Board considers it financially prudent and in the interests of the Company.
2. The Board may lawfully recommend nil dividend and retain profits for:
3. • business expansion;
   • capital expenditure;
   • debt reduction;
   • working capital requirements;
   • acquisitions or strategic investments;
   • reserve strengthening; or
   • any other legitimate corporate purpose.
3. No provision under Sections 123 to 127 requires to mandatorily declare dividend merely because profits exist.
4. • Private Companies;
   • One Person Companies (OPCs);
   • Small Companies;
   • Start-ups;
   • Section 8 Companies (which are prohibited from distributing profits to members);
   • Government Companies; or
   • Nidhi Companies

Therefore, dividend declaration is generally an enabling corporate action and not a mandatory compliance requirement under the Companies Act, 2013, except where specific contractual, constitutional or regulatory obligations require otherwise.