Corporate Actions, Dividends & Governance — 60 Terms Defined

Acquisition Corporate Actions, Dividends & Governance qualitative One company obtaining control of another by buying its shares or assets, with the target continuing to exist. Test: the acquirer obtains control, defined in India as 25% of voting rights or the right to appoint a majority of directors

Adjusted Price Corporate Actions, Dividends & Governance ₹ A historical price restated to account for corporate actions, so that a price series is comparable over time. Adjustment Factor for a bonus or split = 1 / (New Shares per Old Share); historical prices are multiplied by the cumulative factor

Annual General Meeting Corporate Actions, Dividends & Governance qualitative The yearly meeting at which shareholders approve accounts, declare final dividends and elect directors. Test: held within six months of the financial year end and no more than fifteen months after the previous one

Annual Report Corporate Actions, Dividends & Governance qualitative A company's yearly publication containing its audited financial statements, directors' report and governance disclosures. Test: the document contains the audited accounts, board report, management discussion and analysis, and the corporate governance report

Associate Company Corporate Actions, Dividends & Governance qualitative A company in which another holds significant influence but not control, typically 20% or more of voting power. Test: the investor holds at least 20% of voting power or has significant influence without control; accounted for by the equity method

Audit Committee Corporate Actions, Dividends & Governance qualitative A board committee, composed mainly of independent directors, that oversees financial reporting, internal controls and the auditors. Test: the committee has a majority of independent directors, an independent chair, and members with financial literacy

Board of Directors Corporate Actions, Dividends & Governance qualitative The body elected by shareholders to direct a company's management and safeguard shareholder interests. Test: directors are appointed by shareholders and owe fiduciary duties to the company under the Companies Act

Bonus Issue Corporate Actions, Dividends & Governance shares The issue of additional free shares to existing shareholders, funded by capitalising reserves. New Share Count = Old Count x (1 + Bonus Ratio); Adjusted Price = Old Price / (1 + Bonus Ratio)

Capital Reduction Corporate Actions, Dividends & Governance ₹ crore A court-approved reduction of a company's share capital, by cancelling shares or returning capital to shareholders. Test: approved by special resolution and confirmed by the National Company Law Tribunal, with creditor objections heard

Corporate Action Corporate Actions, Dividends & Governance qualitative Any event initiated by a company that changes its securities or affects its shareholders' holdings. Test: the event alters the number, value, or form of the shares held, or distributes something to holders on a record date

Corporate Governance Corporate Actions, Dividends & Governance qualitative The system of rules and practices by which a company is directed and held accountable to its shareholders. Test: independent board oversight, transparent disclosure, fair treatment of minority shareholders, and effective audit and risk functions

Delisting Corporate Actions, Dividends & Governance qualitative The removal of a company's shares from trading on a stock exchange. Test: the security is no longer admitted to dealings on the exchange, whether at the company's initiative or the exchange's

Demerger Corporate Actions, Dividends & Governance qualitative The separation of a business division into an independent company, with shares issued to the existing shareholders. Test: an undertaking transfers to a resulting company, whose shares are issued to the demerged company's shareholders in proportion to their holdings

Dividend Corporate Actions, Dividends & Governance ₹ A distribution of a company's profits to its shareholders, paid in cash out of distributable reserves. Total Dividend Paid = Dividend per Share x Number of Shares Outstanding

Dividend Payout Ratio Corporate Actions, Dividends & Governance % The proportion of a company's earnings distributed to shareholders as dividends. Dividend Payout Ratio = Dividend per Share / Earnings per Share x 100

Dividend per Share Corporate Actions, Dividends & Governance ₹ The total dividend declared for a period divided by the number of shares outstanding. Dividend per Share = Total Dividend Declared / Number of Shares Outstanding

Dividend Trap Corporate Actions, Dividends & Governance qualitative A share whose high dividend yield reflects a falling price and an unsustainable payout rather than attractive income. Test: the yield is elevated because the price fell, and the dividend exceeds free cash flow or is funded by borrowing

Dividend Yield Corporate Actions, Dividends & Governance % The annual dividend per share expressed as a percentage of the share price. Dividend Yield = Annual Dividend per Share / Market Price per Share x 100

E-Voting Corporate Actions, Dividends & Governance qualitative Electronic voting on shareholder resolutions, mandatory for listed companies in India. Test: the company provides a remote electronic voting facility open for a stated period before the meeting

Employee Stock Option Corporate Actions, Dividends & Governance ₹ A right granted to an employee to buy company shares at a preset price after a vesting period. Perquisite Value on Exercise = (Fair Market Value on Exercise Date - Exercise Price) x Number of Options Exercised

Ex-Dividend Date Corporate Actions, Dividends & Governance ₹ The first day a share trades without entitlement to a declared dividend. Theoretical Ex-Dividend Price = Cum-Dividend Price - Dividend per Share

Extraordinary General Meeting Corporate Actions, Dividends & Governance qualitative Any general meeting of shareholders other than the annual general meeting, called to decide urgent business. Test: the meeting is convened by the board, or on requisition by members holding at least one-tenth of the paid-up capital carrying voting rights

Final Dividend Corporate Actions, Dividends & Governance ₹ A dividend recommended by the board after the year's accounts are prepared and approved by shareholders at the annual general meeting. Test: the dividend is recommended with the annual results and requires an ordinary resolution at the annual general meeting

Holding Company Corporate Actions, Dividends & Governance qualitative A company whose principal assets are controlling stakes in other companies rather than an operating business of its own. Test: the company controls the composition of another company's board or holds more than half its voting power