Eveready Industries India will not be able to pay dividend for 2014-15 even though it made a net profit of ₹49.03 crore during the financial year. The company, in a statement to the stock exchanges on Thursday, said it was unable to declare a dividend in the changed circumstances and withdrew the earlier recommendation for a dividend.

An amendment to the Companies Act 2013, effective from May 29 this year, barred it from declaring dividend. Reason: the company had a small carried forward loss of less than ₹1 crore. The amendment disallows such an action. The specific amendment says, “No company shall declare dividend unless carried over previous losses and depreciation not provided in the previous year or years are set off against profit of the company for the current year.”

On May 11 (before the change in law), the company had declared a dividend of ₹2/share or 40 per cent for 2014-15. The amendment came after 18 days.

The company said, “Consequent to the amendment to Section 123 of the Companies Act, 2013, by the Companies (Amendment) Act, 2015, effective from May 29, 2015, the company is unable to declare the dividend, for the year ended March 31, 2015, as recommended earlier on May 11, 2015.”

Company Secretary T Punwani told BusinessLine that there was a carried forward nominal loss of ₹96.63 lakh on this fiscal’s profit and loss account. “We had recommended the dividend for the year as there was no bar before the amended law came into existence,” Punwani explained.

Amritanshu Khaitan, Managing Director, said it was “unfortunate.” The board of directors of the company to be legally compliant “revised the financial statements (limited to the extent of modification of dividend)” on Thursday and did not recommend any dividend for the financial year 2015.

The ₹5 Eveready stock closed 3 per cent down on BSE at ₹321.

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