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

Answer: Specimen letter

SAHYADRI TEXTILES LIMITED
Regd. Office: 45, M. G. Road, Nashik 422001
CIN: L00000MH2008PLC000000 | Tel: 0253-2550000 | Email: secretary@sahyadritex.in

Ref. No.: STL/SEC/DIV/2025/078
Date: 10 August 2025

Mr. Sunil Patil
12, Gangapur Road,
Nashik 422013

Subject: Reply to your query regarding low rate of dividend

Dear Sir,

We acknowledge with thanks your letter dated 2 August 2025 enquiring about the reasons for the lower rate of dividend of 10% declared at the last Annual General Meeting, as against 15% in the previous year. We wish to explain the position as follows:

1. During the year, prices of cotton and yarn rose sharply and the demand for our products fell in the export market. As a result, the net profit of the company decreased compared to the previous year.
2. The company has undertaken an expansion and modernisation programme of its weaving unit. The Board considered it prudent to retain a larger part of the profits in the business (ploughing back of profits) to finance this programme instead of borrowing at high rates of interest.
3. A part of the profits has also been transferred to the general reserve to strengthen the financial position of the company.

The Board is confident that the expansion will improve production and profits in the coming years, and that shareholders will benefit through higher dividends and appreciation in the value of their shares.

We hope this clarifies your query and we look forward to your continued support.

Thanking you,

Yours faithfully,
For Sahyadri Textiles Limited

(Signature)
Company Secretary