H.M. Electro Mech Limited has announced a proposal to amend its Article of Association by inserting a new clause titled “Waiver of Right to Receive Dividend by Shareholders.” This change, subject to member approval at the upcoming Annual General Meeting, would allow equity shareholders to voluntarily forgo their right to receive interim or final dividends. The waiver would become irrevocable after the record date and requires a signed document accepted by the company.
Proposed Amendment to Articles of Association
H.M. Electro Mech Limited is set to propose a significant amendment to its Articles of Association. The company announced that it will seek approval from its members to insert a new clause, specifically “Waiver of Right to Receive Dividend by Shareholders.” This proposed change aims to provide shareholders with the option to relinquish their entitlement to dividends.
Details of the Proposed Clause
Under the proposed new clause, equity shareholders will have the right to waive or forgo their entitlement to receive dividends, whether interim or final, for any financial year. This provision is subject to the overall Act and other applicable rules. The waiver, once initiated by a shareholder, will become irrevocable immediately after the specified record date or book closure date for dividend entitlement.
Implications for Shareholders
Once a shareholder waives their right to receive a dividend, the company will not be entitled to declare or pay any dividend on their equity shares for that period. The announcement also clarifies that a waiver is only effective if a member, including ‘Promoter and Promoter group’, signs and delivers a document expressing their intent to waive, and this waiver is accepted by the Company.
Next Steps
The proposed amendment to the Article of Association is scheduled to be presented for approval by the members at the upcoming Annual General Meeting. Further details regarding the new clause and additional required information are enclosed as Annexure -I.
Source: BSE
