WATCH YOUR NIC DIVIDEND OR ELSE...

If NIC pays out 5/= per share as per her declarations, Investors stand to lose 4.5% (total figure:94,230,000/=) of their dividend earning for the financial year end 2009, which would otherwise cover half of the required dividend withholding tax.

WHY NIC?
As the NIC Vs Makerere dons scandal rages on, on issues pertaining valuations of the DAP fund, here is a related 'valuation' issue
from a shareholder's standpoint.
I hope the Capital Markets Authority, will come in to Value incase!


What is the Dividend 'Valuation' Genesis?
NIC in her end of year 2009 published financial statement (New Vision, June 25th 2010, page 20) declare a Dividend Per Share of 5.23/=. It is prudent to note that this publication is a requirement by the Insurance Industry Regulator; therefore unsophisticated Shareholders' were not able to fully comprehend them.

Later on, in August, the NIC released Investor financial statements, a requirement of the Stock Exchange, in the print media declaring 5/= Dividend Per Share as well as announcing the AGM Date of 10th September 2010.

Is the NIC being logically Honest?


THE LOGIC OF DIVIDENDS.
Dividends per share are the earning entitlement paid on each share as a portion of company profits, therefore:

Dividend Per share (DPS) = Total Dividend payable DIVIDED by the number or Shares,

NIC DPS = 2,113,630,000/403,880,000
Therefore, NIC DPS = 5.23/=


Important Notes:

- Witholding tax on Dividend is; 10% for Individual Nationals and Residents and 15% for Companies and Non-Residents.

- NIC has a Share Capital of 2,019,400,000/= which is 403,880,000 shares of 5/= each. There were no extra share issues and this is business exclusive to the AGM.

- Explanations of rounding off could arise (from 5.23 to 5...), however the precedent at the Stock Market is to declare also those points as evidenced from the other listed company dividend declarations.

INVESTOR BE AWARE. Learn from the lessons of Makerere.