It is refreshing to note that TDM states its profit distribution policy and dividend policy so very clearly in the front pages of its annual report. It would be a great example to emulate by other listed companies too.
From Page 5 of TDM 2010 Annual Report:
Profit Distribution Policy
TDM Group’s annual consolidated distributable profits shall be appropriated as follows:
(i) one third for dividends to shareholders;
(ii) one third for capital expenditure of the Group; and
(iii) one third for the reserves of the Group.
This policy was approved by the Board of Directors of TDM Berhad on 13 August 2009
Dividend Policy
TDM Berhad will endeavour to payout dividends of at least 30% of its consolidated annual net profi t after taxation and minority interest, subject to availability of distributable reserves.
Dividends will only be paid if approved by the Board of Directors and the shareholders of the Company.
The actual amount and timing of dividend payments will be dependent upon TDM Berhad’s cash flow position, returns from operations, business prospects, current and expected obligations, funding needs for future growth, maintenance of an efficient capital structure and such other factors which the Board of Directors of TDM Berhad may deem relevant.
The Company will take every effort to grow its businesses and it should be reflected in growth in the dividend rate.
The objective of this dividend policy is to provide sustainable dividends to shareholders consistent with the Company’s earnings growth.
This policy was approved by the Board of Directors of TDM Berhad on 12 April 2009
2010 Annual Report of TDM
http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/3d7153ea4b2a666f4825787f002ca198/$FILE/TDM-AnnualReport2010%20(2MB).pdf
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