Draft a reply letter resolving the query of the member on low rate of dividend.

Answer: Specimen letter

ABC LIMITED
Regd. Office: 15, M.G. Road, Pune 411001
CIN: L00000MH2000PLC000000 | Tel: 020-12345678 | Email: cs@abcltd.in

Ref. No.: ABC/SEC/DIV/2026/45
Date: 10 March 2026

Mr. Rajesh Patil
Folio No. / DP ID-Client ID: 012345
22, Shivaji Nagar,
Nashik 422001

Subject: Reply to your query regarding low rate of dividend

Dear Sir,

We acknowledge with thanks your letter dated 2 March 2026 in which you have expressed concern about the reduced rate of dividend of 10% declared for the year 2024-25 as against 18% for the previous year.

We would like to clarify the reasons for the lower rate of dividend:

1. The prices of raw materials and fuel rose sharply during the year, which reduced the profit margin of the company.
2. The Board decided to plough back a larger part of the profits to finance the new manufacturing unit at Aurangabad, which will increase production capacity and future earnings.
3. As required for a sound financial position, a part of the profit was transferred to the General Reserve.

The Board recommended the dividend after careful consideration, and it was approved by the members at the Annual General Meeting. We are confident that the expansion will improve profits and enable the company to reward its members with a better dividend in the coming years.

We thank you for your continued support and trust in the company.

Yours faithfully,
For ABC Limited

(Signature)
Company Secretary