Dividends are declared from the profits made by a company on the recommendations of the company's directors. The recommended dividends are approved for each financial year at the company's Annual General Meeting, AGM, following the end of the financial year. However, the company's directors may declare an interim dividend, which is paid to the shareholders during the financial year.
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Before the introduction of e-divided payment, dividend warrants were issued to shareholders. The dividend warrants should be paid into a bank account within 15 months after their issue otherwise the warrants are declared as unclaimed and the corresponding funds returned to the company.
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Dividends which remain unclaimed for over 12 years stand forfeited and the corresponding funds are transferred to the company's general reserve.
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These dividends are no longer recoverable or actionable by the shareholders in accordance with the Companies and Allied Matters Act, CAMA.