Mr. Jayesh has been recently appointed as Company Secretary of Mahalingam Limited, a company listed on Bombay Stock Exchange (BSE). He wants to draft a dividend distribution policy for the Company. Advise Mr. Jayesh.

Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 prescribes the criteria for Dividend Distribution Policy: Top 1000 Listed entities based on market capitalization shall formulate a dividend distribution policy. Dividend Distribution Policy shall be disclosed on the website of the listed entity and a web-link shall also be provided in their annual reports. The dividend distribution policy shall include the following parameters: the circumstances under which the shareholders of the listed entities may or may not expect dividend; the financial parameters that shall be considered while declaring dividend; internal and external factors that shall be considered for declaration of dividend; policy as to how the retained earnings shall be utilized; and parameters that shall be adopted with regard to various classes of shares. However, If the listed entity proposes to declare dividend on the basis of parameters or proposes to change such additional parameters or the dividend distribution policy contained in any of the parameters, it shall disclose such changes along with the rationale for the same in its annual report and on its website. Listed entities other than top 1000 may disclose their dividend distribution policies on a voluntary basis on their websites and provide a web-link in their annual reports. Mr. Jayesh therefore, would be required to comply with the above mentioned provisions to frame Dividend Distribution Policy.