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Dividend Policy

Once a company makes a profit, management must decide on what to do with those profits. They could continue to retain the profits within the company, or they could pay out the profits to the owners of the firm in the form of dividends. Once the company decides on whether to pay dividends they may establish a somewhat permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets. What they decide depends on the situation of the company now and in the future. It also depends on the preferences of investors and potential investors Company act and payment of dividend In fact, the declaration and payment of dividend is an internal matter of the company and is governed by tis Articles. The power regarding appropriation of profits is given to the Board of directors,. However, they are governed by the provisions of Act. The directors are to follow table. A or the provisions of Articles a the provisions of the Companies Act 1950 in the regard. The following are the rules regarding declaration and payment of dividend:(1) Dividend on Paid up Capital. A company may, if so authorized by its Articles, pay dividend on the paid up value of shares under section 93 of the companies Act.

(2) Provisions of Articles of Association. Rules 85 to 94 of Table A provide that A company may declare dividend its general meeting provided it does not exceed the a mount recommenced by the board of directors. (ii) the board of directors may from the time pay to t members such interim dividends, as appears to it to be justified by the profits of the company Notice of any dividend should be given to those who are entitled to receive it. (iv) The directors my transfer an amount they think p[roper to the reserve fund which may be utilised for any contingencies. (v) When a dividend has been declared, it becomes a liability of the company to the shareholders from the date of its declaration but no interest can be claimed on it. 3. Dividends only of Profits. (a) Dividends can only be declared or paid out of (i) the current profits of the company, (ii) the past accumulated profits and (iii) moneys provided by the government for the payment of dividends in pursuance of a guarantee given by that government. No
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dividend can be paid out of capital. (Sec. 205 (i)). director who is responsible for payment of dividend out of capital shall be personally liable to take good such amount to the company. (b) companies are not entitled to pay any dividend unless present or arrears of depreciation have been provided for out of the profits and an amount of 10 % or reports has been transferred to reserve. However, central government may allow any company to declare or pay dividends out of profits before providing for any depreciation. (c) Capital Profits may also be utilised for the declarations of dividend provided (i) there is nothing in the Article prohibiting the distribution of dividend out of capital profits; (ii) they have been reallied in cash: and (iii) they ave been realised in cash and (iii) they remain as profits after revaluation of all assets and liabilities. (d) Dividend cannot be paid out of accumulated profits unless current losses are made good o (4) Payment of dividend only in Cash [ Sec. 205 (iii)]. Dividends are to be paid in cash only except in the following circumstances-

(a) by capitalizing the profits by issue of fully paid bonus shares, if Articles so permit, provided all legal formalities have been satisfied in respect of issue of bonus shares. (b) by paying up any unpaid amount on partly paid up shares. (5) Payment of Dividend to Specified Persons (Sec. 206). Dividend shall be paid only to those whose names appear on the Register of member son the date of declaration of dividend or to the holders of dividend warrant, if issued by the company. (6) Payment of Dividend within 42 days (Sec. 207) Dividend must be paid within 42 days of its declarations except in the following circumstance:(i) by operation of law of insolvency; (ii) in compliance of the directions of the shareholders; (iii) where right to receive dividend is pending decision; (iv) where it is not due to the default of the company. (v) if company lawfully adjusts the amount against any debt due form the shareholder.

(7) Payment of Interim dividend. The directors of a company can pay interim dividend subject to the provisions of Articles. Interim dividend can be paid at any time between the two annual general meetings taking into full year depreciation on fixed assets. (8) Transfer of Unpaid dividend to a Special Bank Account (Sec. 205 A) According to section 205 A, newly inserted by the Companies (Amendment) Act 1974, where a company has declared a dividend but has not posted the dividend warrant in respect therefor within 42 days to the shareholders entitled to it, such unpaid dividends shall be transferred to a special account to be opened by the company in that behalf in any Scheduled Bank to be called Unpaid Dividend Account of ......Co. Ltd/Co. (Pvt) Ltd.' If the unpaid dividend are not so transferred, the company shall pay an interest at 12 % p.a. Any unpaid amount of dividend declared before the commencement of this Amendment Act shall also be transferred to such special account within 6 months from the date of commencement of the Act. 9. Transfer Unclaimed Dividend to Central Government. Any amount transferred to the unpaid dividend account remains unpaid or unclaimed for 3
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years from the date of such transfer shall be transfered to the 'General Revenue Account' by the company along with a statement giving full particulars in respect of the sums so transferred and the last known addresses of the persons entitled to receive it and such other particulars as may be prescribed. The company is entitled so a receipt for such transfer from the Reserve Bank of India. If a company fails to comply the above said provisions (given in para 8 and 9 above), the company and every officer of the company who is in default shall be punishable with a fine which may extend to Rs. 500 for every day during which default continues.

o Different tvpe of divident


Dividend may be of different types. It can be classified according to the mode of its distribution as follows

(1) Regular Dividend. By dividend we mean regular dividend paid annually, proposed by the board of directors and approved by the shareholders in general meeting. It is also known as final dividend because it is usually paid after the finalization of accounts. It sis generally paid in cash as a percentage of paid up capital, say 10 % or 15 % of the capital. Sometimes, it is paid per share. No
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dividend is paid on calls in advance or calls in arrears. The company is, however, authorised to make provisions in the Articles prohibiting the payment of dividend on shares having calls in arrears. (2) Interim Dividend. If Articles so permit, the directors may decide to pay dividend at any time between the two Annual General Meeting before finalizing the accounts. It is generally declared and paid when company has earned heavy profits or abnormal profits during the year and directors which to pay the profits to shareholders. Such payment of dividend in between the two Annual General meetings before finalizing the accounts is called Interim Dividend. No Interim Dividend can be declared or paid unless depreciation for the full year (not proportionately) has been provided for. It is, thus,, an extra dividend paid during the year requiring no need of approval of the Annual General Meeting. It is paid in cash. (3) Stock-Dividend. Companies, not having good cash position, generally pay dividend in the form of shares by capitalizing the profits of current year and of past years. Such shares are issued instead of paying dividend in cash and called 'Bonus Shares'. Basically there is no change in the equity of shareholders. Certain guidelines have been used by the company Law Board in respect of Bonus Shares. (4) Scrip Dividend. Scrip dividends are used when earnings justify a dividend, but the cash position of the company is temporarily weak. So, shareholders are issued shares and debentures of other companies. Such payment
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of dividend is called Scrip Dividend. Shareholders generally do not like such dividend because the shares or debentures, so paid are worthless for the shareholders as directors would use only such investment is which were not . Such dividend was allowed before passing of the Companies (Amendment) Act 1960, but thereafter this unhealthy practice was stopped. (5) Bond Dividends. In rare instances, dividends are paid in the form of debentures or bounds or notes for a long-term period. The effect of such dividend is the same as that of paying dividend in scrips. The shareholders become the secured creditors is the bonds has a lien on assets. (6) Property Dividend. Sometimes, dividend is paid in the form of asset instead of payment of dividend in cash. The distribution of dividend is made whenever the asset is no longer required in the business such as investment or stock of finished goods. But, it is, however, important to note that in India, distribution of dividend is permissible in the form of cash or bonus shares only. Distribution of dividend in any other form is not allowed.

How Do Companies Calculate Dividends?


corporations corporations pay dividends as a way to share the company's profits with the shareholders. Companies are under no obligation or regulation to calculate their dividend payout a certain way. Investors should understand the dividend policy and philosophy of the stocks they own.
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Function

The decision to pay a dividend is at the discretion of a company's board of directors. Companies can elect to pay dividends quarterly, twice a year, annually or not at all. The amount of a dividend payout is usually related to a company's net income or free cash flow. Some boards adopt a regular dividend policy and other will pay a distribution only when they believe it is in the interest of the company and shareholders. Payout Ratio

For companies with a regular dividend policy, investors can look at the dividend payout ratio. A sustainable dividend policy requires that the company have enough net income to support the payout. The ratio is calculated by dividing the dividend rate by the net income per share. For example, if Company A pays a $1dividend each quarter and has a net earnings per share for the quarter of $2, the dividend payout ratio is 50 percent.

Types

Some types of stocks will have a higher payout ratio, sometimes even exceeding the net income per share. Real estate investment trusts (REITs), master limited partnership (MLPs) and capital intensive companies, including leasing and shipping companies, may have high-dividend payouts in relation to their net income. REIT and MLP stocks are required by tax law to pay a majority of their cash flow as dividends. Other high-dividend companies also have high depreciation amounts on their equipment, making free cash flow a more important measurement than net income

when evaluating dividend payouts. Yield

A stock's dividend yield is calculated by dividing the annual dividend payout into the stock share price. If a stock pay a 25 cent dividend quarterly and the stock is at $50, the dividend yield is $1 divided by 50 or 2 percent. The dividend yield number is only valid for companies with a regular, stable dividend payout. Potential Many companies will increase their dividend as the company grows and net income increases. These types of companies can provide significant long term investment growth. The Standard & Poors list of Dividend Aristocrats is a listing of companies that have increased their dividend payouts for at least 25 consecutive years. These are companies with a dividend policy dedicated to rewarding investors.

Dividend Per Share - DPS'


DPS can be calculated by using the following formula:

D - Sum of dividends over a period (usually 1 year) SD - Special, one time dividends S - Shares outstanding for the period

Dividend yeild
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The dividend yield or the dividend-price ratio on a company stock is the company's total annual dividend payments divided by its market capitalization, or the dividend per share, divided by the price per share. It is often expressed as a percentage. Its reciprocal is the Price/Dividend ratio. Preferred share dividend yield Dividend payments on preferred shares ("preference shares" in the UK) are set out in the prospectus. The name of the preferred share will typically include its yield at par: for example, a 6% preferred share. However, the dividend may under some circumstances be passed or reduced. The yield is the ratio of the annual dividend to the current market price, which will vary. [edit]Common share dividend yield Unlike preferred stock, there is no stipulated dividend for common stock ("ordinary shares" in the UK). Instead, dividends paid to holders of common stock are set by management, usually with regard to the company's earnings. There is no guarantee that future dividends will match past dividends or even be paid at all. The historic yield is calculated using the following formula:

For example, take a company which paid dividends totaling $1 per share last year and whose shares currently sell for $20. Its dividend yield would be calculated as

follows:

BSIC ISSUE INVOLVE IN DIVIDENT POLICY


There are ce

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rtain basic questions which are Involved in determining the sound dividend policy.

Such questions are:1. Cost of Capital. Cost of capital is one of the considerations for taking a decision whether to distribute dividend or not. As decision making tool, the Board calculates the ratio of rupee profits that the business expects to earn (Ra) to the rupee, profits that the shareholders can expect to earn outside (Rc) i.e., Rs./Rc. If the ratio is less than one, it is a signal to distribute dividend and if it is more than one, the distribution of dividend will be discontinued. 2. realisation of Objectives. The main objectives of the firm i.e., maximization of wealth for shareholders including there current rate of dividend-should also be aimed at in formulating the dividend policy. 3. Shareholders' Group. Dividend policy affects the shareholders group. It means a company with low pay-out an heavy reinvestment attracts shareholders interested in capital gains rather than n current income whereas a company with high dividend pay-out attracts those who are interested in current income. 4. Release of Corporate earnings. Dividend distribution is taking as a mens of distributing unused funds. Dividend policy affects the shareholders wealth by varying its dividend pay = out ratio. In Dividend policy, the financial manager decides whether to release Corporate earnings or not. These are certain basic issues Involved in formulating a Dividend policy. Dividend policy to a large extent affects the financial structure, the flow of funds, liquidity, stock prices and
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in the last shareholders' satisfaction. That is why management exercises a high degree of judgment establishing a sound dividend pattern.

FCTOR EFFECTING DIVIDENT POLICY


A number of considerations affect the dividend policy of company. The major factors are

1. Stability of Earnings. The nature of business has an important bearing on the dividend policy. Industrial units having stability of earnings may formulate a more consistent dividend policy than those having an uneven flow of incomes because they can predict easily their savings and earnings. Usually, enterprises dealing in necessities suffer less from oscillating earnings than those dealing in luxuries or fancy goods. 2. Age of corporation. Age of the corporation counts much in deciding the dividend policy. A newly established company may require much of its earnings for expansion and plant improvement and may adopt a rigid dividend policy while, on the other hand, an older company can formulate a clear cut and more consistent policy regarding dividend. 3. Liquidity of Funds. Availability of cash and sound financial position is also an important factor in dividend decisions. A dividend represents a cash outflow, the greater the funds and the liquidity of the firm the better the ability to pay dividend. The liquidity of a firm depends very much on the investment and financial decisions of the firm which in turn determines the rate of expansion and the manner of financing. If cash position is weak, stock dividend will be distributed and if cash position is good, company can distribute the cash dividend.
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4. Extent of share Distribution. Nature of ownership also affects the dividend decisions. A closely held company is likely to get the assent of the shareholders for the suspension of dividend or for following a conservative dividend policy. On the other hand, a company having a good number of shareholders widely distributed and forming low or medium income group, would face a great difficulty in securing such assent because they will emphasise to distribute higher dividend. 5. Needs for Additional Capital. Companies retain a part of their profits for strengthening their financial position. The income may be conserved for meeting the increased requirements of working capital or of future expansion. Small companies usually find difficulties in raising finance for their needs of increased working capital for expansion programmes. They having no other alternative, use their ploughed back profits. Thus, such Companies distribute dividend at low rates and retain a big part of profits. 6. Trade Cycles. Business cycles also exercise influence upon dividend Policy. Dividend policy is adjusted according to the business oscillations. During the boom, prudent management creates food reserves for contingencies which follow the inflationary period. Higher rates of dividend can be used as a tool for marketing the securities in an otherwise depressed market. The financial solvency can be proved and maintained by the companies in dull years if the adequate reserves have been built up. 7. Government Policies. The earnings capacity of the enterprise is widely affected by the change in fiscal, industrial, labour, control and other government policies. Sometimes government restricts the distribution of dividend beyond a certain percentage in a particular industry or in all spheres of business activity as was done in emergency. The dividend policy has to be modified or formulated accordingly in those enterprises.
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8. Taxation Policy. High taxation reduces the earnings of he companies and consequently the rate of dividend is lowered down. Sometimes government levies dividend-tax of distribution of dividend beyond a certain limit. It also affects the capital formation. N India, dividends beyond 10 % of paid-up capital are subject to dividend tax at 7.5 %. 9. Legal Requirements. In deciding on the dividend, the directors take the legal requirements too into consideration. In order to protect the interests of creditors an outsiders, the companies Act 1956 prescribes certain guidelines in respect of the distribution and payment of dividend. Moreover, a company is required to provide for depreciation on its fixed and tangible assets before declaring dividend on shares. It proposes that Dividend should not be distributed out of capita, in any case. Likewise, contractual obligation should also be fulfilled, for example, payment of dividend on preference shares in priority over ordinary dividend. 10. Past dividend Rates. While formulating the Dividend Policy, the directors must keep in mind the dividend paid in past years. The current rate should be around the average past rat. If it has been abnormally increased the shares will be subjected to speculation. In a new concern, the company should consider the dividend policy of the rival organisation. 11. Ability to Borrow. Well established and large firms have better access to the capital market than the new Companies and may borrow funds from the external sources if there arises any need. Such Companies may have a better dividend pay-out ratio. Whereas smaller firms have to depend on their internal sources and therefore they will have to built up good reserves by reducing the dividend pay out ratio for meeting any obligation requiring heavy funds.

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12. Policy of Control. Policy of control is another determining factor is so far as dividends are concerned. If the directors want to have control on company, they would not like to add new shareholders and therefore, declare a dividend at low rate. Because by adding new shareholders they fear dilution of control and diversion of policies and programmes of the existing management. So they prefer to meet the needs through retained earing. If the directors do not bother about the control of affairs they will follow a liberal dividend policy. Thus control is an influencing factor in framing the dividend policy. 13. Repayments of Loan. A company having loan indebtedness are vowed to a high rate of retention earnings, unless one other arrangements are made for the redemption of debt on maturity. It will naturally lower down the rate of dividend. Sometimes, the lenders (mostly institutional lenders) put restrictions on the dividend distribution still such time their loan is outstanding. Formal loan contracts generally provide a certain standard of liquidity and solvency to be maintained. Management is bound to hour such restrictions and to limit the rate of dividend payout. 14. Time for Payment of Dividend. When should the dividend be paid is another consideration. Payment of dividend means outflow of cash. It is, therefore, desirable to distribute dividend at a time when is least needed by the company because there are peak times as well as lean periods of expenditure. Wise management should plan the payment of dividend in such a manner that there is no cash outflow at a time when the undertaking is already in need of urgent finances. 15. Regularity and stability in Dividend Payment. Dividends should be paid regularly because each investor is interested in the regular payment of dividend. The management should, inspite of regular payment of dividend, consider that the rate of dividend should be all the most constant. For this purpose sometimes companies maintain dividend equalization Fund.

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How corporate managers view dividend policy.


by H. Kent Baker , Gary E. Powell Introduction Dividend policy is one of the most controversial subjects in finance. Finance scholars have engaged in extensive theorizing to explain why companies should pay or not pay dividends. Other researchers have developed and empirically tested various models to explain dividend behavior. Some researchers have surveyed corporate managers and institutional investors to determine their views about dividends. Despite extensive debate and research, the actual motivation for paying dividends remains a puzzle. In this paper, we investigate the views of corporate managers of major U.S. firms about three topics: (1) the relationship between dividend policy and value, (2) explanations of dividend relevance including the bird-in-thehand, signaling, tax-preference, and agency explanations, and (3) how firms determine the amount of dividends to pay. (2) We also examine whether the responses on these topics differ among three industry groups (manufacturing, wholesale/retail trade, and utilities). We examine the level of agreement that corporate managers express about 26 theoretical and empirical issues about dividend policy. Investigating these issues is important to determine to what extent corporate managers agree with the various messages contained in the academic literature on dividends. Understanding the beliefs of managers who are involved in setting dividend policy may contribute to our understanding of why firms pay cash dividends. This study also contributes to the growing body of survey research on dividend policy. For example, the current study not only expands and updates previous survey research by Baker, Farrelly, and Edelman (1985) among others but also asks different questions especially related to explanations of dividend
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policy. The study addresses four research questions. First, do corporate managers believe that dividends are relevant? Second, what explanation of dividends do managers tend to favor? Third, how do firms set the amount of dividends that they pay? Finally, do the views of managers about dividend issues differ among different industry groups? Some findings probably are predictable, while others are surprising. Overall, the evidence shows that: * Most respondents believe that dividend policy affects firm value; * The respondents generally show the highest level of agreement with statements about the signaling explanation of dividend relevance; * Managers' views on setting dividend payments today are consistent with those reported by managers interviewed by Lintner (1956) and his behavioral model of dividend policy; and * Few statistically significant differences exist among the responses from the three industries. Literature Review The Relationship Between Dividend Policy and Value The question of whether dividend policy affects the value of the firm has puzzled researchers and corporate managers for many years. Dividend policy is one of the most widely researched topics in finance. Yet, researchers have different views about whether the percentage of earnings that a firm pays out in dividends materially affects its long-term share price. Some empirical studies appear to support Miller and Modigliani's (1961) classic dividend irrelevance proposition [e.g., Black and Scholes (1974), Miller and Scholes (1978), Jose and Stevens (1989)]; others do not [e.g., Long (1978), Sterk and Vandenberg (1990)]. In addition, survey research by Farrelly, Baker, and Edelman (1985) shows that corporate managers typically believe that dividend policy affects a firm's value and that an optimal level of dividend payout exists. In practice, most firms pay cash dividends, although paying dividends is costly in various ways. Thus, empirical evidence on whether dividend policy affects a firm's
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value offers contradictory advice to corporate managers. Today, many academicians and corporate managers still debate whether dividend policy matters. Explanations of Dividend Relevance Given that managers typically believe in dividend relevance, the second question is "What explanations of dividends do managers tend to favor?" Researchers have offered four common explanations of dividend relevance: the bird-in-the-hand, signaling, tax preference, and agency explanations. The Bird-in-the-Hand Explanation One argument that a relationship exists between firm value and dividend payout is that dividends represent a sure thing relative to share price appreciation. Because dividends are supposedly less risky than capital gains, firms should set a high dividend payout ratio and offer a high dividend yield to maximize stock price. Miller and Modigliani (1961) disagree and call the theory that a high dividend payout ratio will maximize a firm's value the bird-in-the-hand fallacy. Bhattacharya (1979) also argues that the reasoning underlying the bird-in-the-hand explanation for dividend relevance is fallacious. The riskiness of a project's cash flows determines a firm's risk. An increase in dividend payout today will result in an equivalent drop in the stock's exdividend price. Thus, increasing the dividend today will not increase ...

Dividend Policy Problem


Also related to the equity problem is the dividend decision. Any compensation received by shareholders from the corporation will be in the form of some type of dividend (including a liquidating dividend). These dividends are usually in the form of cash; however, sometimes corporations will declare stock or product dividends to their shareholders. In any case, the financial manager must determine the appropriate form and quantity of dividend payments as well as payment dates in the best interest of shareholders. In the absence of taxes, transactions costs and other capital market imperfections, it can be shown that dividend policy should not
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affect shareholder wealth. A $5 dividend payment made by the firm reduces assets by $5, reducing equity by $5. Since shareholders received the $5 dividend, this payment exactly offsets the decline in equity value. However, when more realistic conditions are considered, we will find that dividend policy does affect shareholder wealth. For example, individual shareholders in high tax brackets will generally prefer to receive their income in the form of capital gains when the individual capital gains income tax rate is less than the rate charged on dividends or other income, or even if they can defer their capital gains income. Such individuals may pay premium prices for stock with growth potential as opposed to stocks providing steady dividend income. On the other hand, many retired shareholders living on incomes from their securities may prefer dividend income to capital gains income because they need not sell stock and incur transactions costs to receive income in the form of dividends. Corporations receive an 80% deduction for the dividends that they receive from other corporations and many non-profit institutions are tax exempt. These organizations often prefer holding shares in high dividend payout corporations. Thus, the value of a company's stock may depend on a clientele effect. The financial manager must remember that payment of dividends represents a use of the firm's funds. These payments may result in the firm having to raise additional capital from some external source, perhaps at a rather high cost. Thus, the firm must consider costs as well as benefits of dividends when determining its policy

Case study
Introduction of organization

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Mitsubishi Corporation (MC) is a global integrated business enterprise that develops and operates businesses across virtually every industry including industrial finance, energy, metals, machinery, chemicals, foods, and environmental business. MC's current activities are expanding far beyond its traditional trading operations as its diverse business ranges from natural resources development to investment in retail business, infrastructure, financial products and manufacturing of industrial goods. With more than 200 Offices & Subsidiaries in approximately 90 countries worldwide and a network of over 500 group companies, MC employs a multinational workforce of nearly 60,000 people.

COPERTE HISTORY Foundation to 1970s In 1954 the new Mitsubishi Shoji was founded, and that same year was listed on both the Tokyo and Osaka stock exchanges. In 1967, the company announced its first management plan. In 1968, the company committed to a large project in Brunei to develop LNG (liquefied natural gas). This was its first large-scale investment. Not content with mere tradebased activities, the company began expanding its development and investment-based businesses on a global scale, as evidenced by iron-ore and metallurgical coal projects in Australia and Canada, and salt field business in Mexico. In 1971, the company made "Mitsubishi Corporation" its official English name.

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The 1980s MC needed to construct new systems to generate profits. The company began streamlining its established businesses and developing more efficient operations. In 1986 the company firmly entrenched a new policy, shifting its focus from operating transactions to profits. That same year a new management plan was drawn up. In 1989, MC was listed on the London Stock Exchange. The 1990s In 1992, MC announced a new management policy: namely to reinvent the company as a "Sound, Global Enterprise." MC began placing greater focus on its consolidated operations and increasing the value of its assets. More efforts were made to globalize the company's operations and its people. In 1998, MC established "MC2000" which introduced a "Select & Focus" approach to business, strengthened strategic fields, and emphasized customer-oriented policies. The new plan was instrumental in shoring up the company's foundations and paving the way to a prosperous future. Into the New Millennium In 2001, MC introduced "MC2003", an aggressive new blueprint for growth, involving an expansion of the company's value chains, a strengthening of its profitability, and focused strategies to create new businesses. In 2004, "INNOVATION 2007" was unveiled which sought to establish MC as a "New Industry Innovator," with an aim to open up a new era and grow hand in hand with society. In 2007, MC newly established the Business Innovation Group and Industrial Finance, Logistics & Development Group. Then, in 2008, MC announced its management plan, "INNOVATION 2009." In 2009, MC systematically reorganized the Business Innovation Group and
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established its Corporate Development Section. In April, 2010, MC reorganized and enhanced this section through the establishment of two new Groups, the Global Environment Business Development Group and Business Service Group. In July 2010, MC announced a new management plan, "Midterm Corporate Strategy 2012."

Major Products & Services


Petroleum Products, Steel Products, Power & Electrical Systems, Elevator & Escalator Operation & Marketing, Plants, Automobiles, Petrochemical Products, Materials for Synthetic Fibers, Functional Chemicals, Materials for and Products by Synthetic Resins, Food (Products), Textiles, General Merchandise

Stock information and dividend policy


Note for Shareholders
Business Year One year, starting every April 1 and ending the following March 31 June Year-end dividend March 31 Midterm dividend September 30 100 shares Mitsubishi UFJ Trust and Banking Corporation 1-4-5, Marunouchi, Chiyodaku, Tokyo Mitsubishi UFJ Trust and Banking Corporation, Osaka 23

Annual Meeting of Shareholders Dividend Record Dates of Surplus Earnings

Number of Stocks per Unit Administrator of Shareholders Register

Administrative Office of Administrator of

Shareholders Register

Securities Exchange Representative Office 3-6-3, Fushimi-cho, Chuo-ku, Osaka-city Tel (Osaka): 0120-094-777 Mitsubishi UFJ Trust and Banking Corporation, main and other branches Nomura Securities Co., Ltd., main and other branches Electronic Notification However, in the event that electronic notification is not possible due to accident or other unavoidable circumstance, public notice will be given in the Nihon Keizai Shimbun.

Intermediary Offices of the Administrator of Shareholders Register

Public Notice Circulation Method

ng:

1This site may not be immediately rectified as correction of earnings data and . others. 2 .

Historical per share data were not adjusted to stock splits.

3From the first quarter of the fiscal year ending March 31, 2009, numerical data . are based on the "Accounting Standard for Quarterly Financial Reporting" (ASBJ Statement No. 12) and related regulations.

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4For the fiscal year ended March 31, 2008 and before, corresponding numerical . data were disclosed as the interim financial statements. 5We may only alter some of our financial indicators in our earnings . announcements at the end of the fiscal year. *2nd Quarter represents an aggregate of the 1st to 2nd quarters. *3rd Quarter represents an aggregate of the 1st to 3rd quarters. Total Dividend Per Share() Dividend Dividend to Net Assets

Dividend Payout Ratio

Payment [Consolidated] [Consolidated]

1st

2nd

3rd

Term- Full-

(1

Quarter Quarter Quarter End Year million)

(%)

(%)

3/12 [-]

32.00 [-]

[-]

3/11 [-]

26.00 [-]

- 39.00 65.00 106,872 [-] [-] [-] 23.1 3.4

3/10

17.00

- 21.00 38.00

62,455

22.9

2.3

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[-]

[-]

[-]

[-]

[-]

3/09 [-]

36.00 [-]

- 16.00 52.00 85,434 [-] [-] [-] 23.1 3.2

3/08 [-]

26.00 [-]

- 30.00 56.00 91,894 [-] [-] [-] 20.1 3.2

The data used within this site is compiled from the corporate prospectus and earnings announcements. In the preparation of the various data shown within this site, we make every effort to ensure its accuracy. But despite our best efforts, the possibility for inaccuracy in the data due to reasons beyond our control exists.

MC's dividend policy is to continue to maximize corporate value by utilizing retained earnings, while linking dividends to consolidated net income attributable to Mitsubishi Corporation.
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As announced separately, MC posted consolidated net income attributable to Mitsubishi Corporation of 463.2 billion yen for the fiscal year ended March 31, 2011, exceeding the 400.0 billion yen forecast announced at the end of October 2010. Accordingly, MC has decided to declare an annual ordinary dividend per share applicable to the fiscal year ended March 31, 2011 of 65 yen, comprising an interim dividend of 26 yen with a record date of September 30, and a yearend dividend of 39 yen. For the year ending March 2012, MC plan to pay an annual divided per share of 65 yen, the same as for the year ending March 2011, providing it achieves its current net income forecast of 450.0 billion yen.

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Note: The above forecasts are management's current views and beliefs in accordance with data currently available, and are subject to a number of risks, uncertainties and other factors that may cause actual results and dividends to differ materially from those projected. Dividend [Share Dealing And Settlement In accordance with the commercial Code of Japan,the transfer of shares is effected by delivery of share certificates, but in order to assert shareholders right against the company,the transferee must have his name and address registered on the companys register of shareholders. For this purpose, shareholders are required to file their names, addresses and seal impressions (or specimen signatures in the case of non-Japanese shareholders)with the companys transfer agent for the shares. Strength of corporation 1. Diversified product portfolio and well balanced revenue streams. 2. Strong global presence. 3. Strong focus on research and development.

Weakness 1. Fluctuating margins and cash flow 2. Overdependence on the Japanese market.

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Thread 1. Slowdown of the global economy 2. Envirmentl regulation 3. Price voltity in petroleum mrket opportunity 1. positive outlook for the global oil and gas sector 2. strong growth in globl electricity mrket 3. cclerting globl textile mill

reference Mitsubishi Corporation Islamabad Liaison Office. Address: House No.35, Street No.56, Sector F-6/4, Islamabad, Pakistan Telephone +92-51-2277-421

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