DIVIDEND DISTRIBUTION POLICY

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1 DIVIDEND DISTRIBUTION POLICY 1

2 1.Overview of the Policy i. Statement of Purpose and Coverage ii. Philosophy iii. Definitions SEBI has, through its notification dated July 8, 2016, released the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, incorporating Regulation 43 A Dividend Distribution Policy requiring the top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) to formulate a dividend distribution policy which shall be disclosed in their annual reports and on their websites. The objective of this policy is to lay down the criteria to be considered by the Board of Directors for recommending dividend to its shareholders for a financial year and manner of utilization of retained earnings. The Company is deeply committed to driving superior value creation for all its stakeholders. The Company believes that driving growth creates maximum shareholder value and thus it would first like to deploy its profits to fund its working capital requirements, capital expenditure requirements, allocate reserves for inorganic growth opportunities and thereafter distribute the surplus profits in the form of dividend to the shareholders. Company means SBI General Insurance Company Limited Board or Board of Directors means Board of Directors of the Company Dividend means Dividend as defined under Companies Act, 2013 Policy or this Policy means the Dividend Distribution Policy SEBI Regulations means the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 together with the circulars issued thereunder, including any statutory modification(s) or re enactment(s) thereof for the time being in force Page 2 of 8

3 iv. Criteria Dividend Declaration for a. Statutory and Regulatory Compliance: The Company shall declare dividend only after ensuring compliance with the Companies Act 2013, Insurance Laws (Amendment) Act, 2015 and the regulations made thereunder to the extent applicable, the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and to the extent applicable to Insurance Companies and Article of Association (AOA) of the Company b. Financial Criteria: i. Profitability and key financial metrics; ii. Any interim dividend paid, if any; iii. Available solvency margin iv. Dividend payout trends v. Capital expenditure requirements; vi. Tax implications if any, on distribution of dividends vii. Mergers and Acquisitions (M&A) viii. Such other factors and/or material events which the Board may consider c. External Factors: i. Compliance with prevailing legal requirements, regulatory conditions or restrictions laid down under the Applicable Laws including tax laws; ii. Shareholder expectations; iii. Significant changes in Macro-economic environment; iv. Capital market condition v. Dividend pay-out ratios of companies in the same industry Page 3 of 8

4 v. Utilization of Retained Earnings Subject to the provisions of the Companies Act 2013 and after having due regard to the parameters laid down in this Policy, no Dividend shall be declared or paid by the Company for any financial year except: (a) out of the profits of the company for that year arrived at after providing for depreciation in accordance with law, or out of the profits of the company for any previous financial year or years arrived at after providing for depreciation in accordance with law and remaining undistributed, or out of both; or (b) out of money provided by the Central Government or a State Government for the payment of dividend by the company in pursuance of a guarantee given by that Government: In computing the profits above, any amount representing unrealised gains, notional gains or revaluation of assets and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value shall be excluded. The Company may, before the declaration of any dividend in any financial year, transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the company. No dividend shall be declared or paid by the Company from its reserves other than free reserves. Further where, owing to inadequacy or absence of profits in any financial year, the Company proposes to declare dividend out of the accumulated profits earned by it in previous years and transferred by the company to the free reserves, such declaration of dividend shall not be made except in accordance with law. The Board of Directors may in extraordinary circumstances, deviate from the parameters listed in this policy The Board may also decide to employ the retained earnings in ensuring optimum level of solvency margin, meeting the Company s future growth plans, other strategic purposes and/or distribution to shareholders, subject to applicable regulations. Page 4 of 8

5 vi. Parameters for various classes of shares vii. Category of Dividends The Company stands committed to deliver sustainable value to all its stakeholders. The Company will strive to distribute an optimal and appropriate level of the profits earned by it in its business and investing activity, with the shareholders, in the form of dividend The Authorised Share Capital of the Company is divided into equity share of Rs.10 each. At present, the issued and paid-up share capital of the Company comprises of only equity shares. In the absence of any other class of equity shares and/or equity shares with differential voting rights, the entire distributable profit for the purpose of dividend declaration will be considered for equity shareholders. However, the provisions contained in this policy shall apply to all classes of Shares of the Company as an when issued by the Company. There is no explicit regulatory upper limit on dividend distribution ratio for insurance companies provided conditions of required solvency margin and surplus in the shareholders fund are met. The Companies Act 2013 provides for two forms of Dividend- Final & Interim: i. Final Dividend: The Board of Directors shall have the power to recommend final dividend to the shareholders for their approval in the General meeting of the Company. ii. Interim Dividend: The Board of Directors may declare interim dividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend is sought to be declared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend. Provided that in case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of Page 5 of 8

6 viii. Process for declaration and distribution of Dividend ix. Circumstances under which the shareholders may or may not expect Dividend interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during immediately preceding three financial years." The Board of Directors recommend/declare dividend as per the provisions of Companies Act, Interim Dividend will be paid on declaration of the same by the Board and the final dividend will be paid on the approval of shareholders at the Annual General Meeting. The Company shall ensure that the amount of the dividend, including interim dividend, shall be deposited in a scheduled bank in a separate account within five days of approval of shareholders / declaration by the Board. The Company shall pay the dividend within 30 days of approval of shareholders / declaration by the Board. The decision regarding dividend shall be taken only by the Board at its Meeting and not by the Committee of the Board or by way of resolution passed by circulation. The final dividend shall be paid only after approval at an Annual General Meeting (AGM). Shareholders approval is not required for payment of interim dividend declared by the Board The Company shall not recommend dividend if it is of the opinion that it is financially not prudent to do so. The shareholders of the Company may not expect Dividend under the following circumstances: i. If the eligibility criteria for recommendation of dividend has not been met by the Company, including any regulatory restriction placed on the Company on ii. iii. iv. declaration of dividend If the Board strongly believes the need to conserve capital for growth or other exigencies which will be spelt. In case the Company is undertaking significant expansion which would require higher allocation of resources. In case the Company proposes to utilise surplus cash for Page 6 of 8

7 buy back of securities v. Further, the shareholders of the Company may not expect Dividend in the event of inadequacy of profits or whenever the Company has incurred losses Capital and based on the capital and solvency position of the Company. vi. The Board may recommend higher dividends, subject to applicable regulations, if the capital and solvency supports a higher distribution to the shareholders. x. Review/ Modifications/ Limitation/ Precedence The Board shall review this policy on annual basis or as and when required by the law. The Board is authorised to change/amend this policy from time to time at its sole discretion and/or in pursuance of any amendments made in the Companies Act, 2013, the Regulations, etc. In the event of any conflict between the Companies Act 2013 or the SEBI Regulations or any other statutory enactments ( Regulations ) and the provisions of this policy, the Regulations shall prevail over this policy. Any subsequent amendment / modification in the Regulations, in this regard shall automatically apply to this policy. In any circumstance where the terms of this policy differ from any existing or newly enacted law, rule, regulation or standard governing the Company, the law, rule, regulation or standard will take precedence over these policies and procedures until such time as this policy is changed to conform to the law, rule, regulation or standard. xi. Disclosure The Company shall make appropriate disclosures as required under the Companies Act, 2013, the SEBI Regulations, etc. Page 7 of 8

8 2. Authorisation, Ownership and Document Control i. Owner Head Compliance, Legal & Company Secretary ii. Approver Board of Directors of SBI General iii. Effective Date Version 1.0 for Review History Action Taken New Version Date Approved New Effective Date Page 8 of 8

DIVIDEND DISTRIBUTION POLICY OF THERMAX LTD. TABLE OF CONTENTS. 1. Objective Philosophy Legal Framework 2. 4.

DIVIDEND DISTRIBUTION POLICY OF THERMAX LTD. TABLE OF CONTENTS Sr. No. Content Page No. 1. Objective 2 2. Philosophy 2 3. Legal Framework 2 4. Definitions 4 5. Parameters for declaration of Dividend 4