The shareholders have the choice of receiving dividend in shares

The shareholders thus have the choice of receiving their dividend in shares or in cash. Note a special case. In 2014, LVMH decided to make a special distribution in the form of Hermes shares after giving up its takeover bid for the group.


The special dividends

A company may decide to pay an "outstanding" dividend representing several years of exceptional results or annual results. A group making a significant capital gain on disposal of an asset or a subsidiary may repay the shareholders. This dividend, non-recurring, do not therefore constitutes a signal for the future.


The special dividend may be motivated by the objective of the shareholder to accelerate its deleveraging. With the "debt push-down" a parent makes borrow its subsidiary to pay a special dividend, the risk of damaging its financial structure.



In 2015, frozen PICARD paid to its shareholder, Lion Capital investment fund a special dividend of € 602 million representing 4.5 times its annual profit. This payment caused a 88% increase in financial debt of PICARD and a sharp deterioration in its rating.

CFO’s objectives at the completion of the UAT

Please find attached the List of QC Laboratory Reagents (as of 31st Dec. 2013). I am sending you a reagent and Glassware list for QC & Microbiology. If you have any query feel free contact with me.

Thanks for the high level guidelines that you are looking from the team during UAT (User Acceptance Testing) completion. I am sure the team has captured all your guidelines in the UAT scenarios document and accordingly testing them. I will communicate to the KPMG team about your guidelines for the UAT (User Acceptance Testing) testing.

Please read the message from CFO (Chief Financial Officer) below. He has listed the objectives that he is looking to accomplish from the UAT (User Acceptance Testing) completion. I think we need to give the best to ensure that our project team can satisfy CFO’s objectives at the completion of the UAT.

In order to achieve CFO’s-(Chief Financial Officer) objectives, the following guidelines needs to be maintained :


I will request all the team members , copied in this email, to go through CFO’s objective as mentioned below. If you think that we are missing any of the mentioned objectives in the UAT (User Acceptance Testing) , please highlight to ITi & me immediately.

Role of the nomination committee and remuneration committee in corporate governance

The nomination committee and the remuneration committee, both of these committees have a vital role in corporate governance because they decide who will operate the company and how much they will be paid.
The objective is to introduce a measure of independence into the whole process. There is an argument; however, that as the community of non-executive directors, even on a global basis, is a comparatively small one, it may happen that a non executive director of company A may be the CEO of company B, whose non-executive directors may include the CEO of company A.

The function of the nomination committee is to recommend suitable candidates for appointment to the board and other senior posts. The nomination committee should make sure that the best person is selected for the job. If there was not such a committee in action and the decision was down to one person, an inappropriate appointment could be made. It could be just that the person is not the most suitable. However, it could be that appointment is made of someone who will back up the person making the appointment in board decisions and it could be a way of fixing board votes.

The function of the remuneration committee is to settle on fair rates of pay and other compensation – pension rights, share options etc – for management and other senior employees. Again, it is useful to use a committee to set salaries so that the decision does not rest with one person. That person could take bribes from other directors for giving undeserved pay rises.

• The remuneration committee should make sure that directors are not paid excessive amounts.
• They should be paid enough to catch the attention of good people to the role but not too much.
• However, it is now deemed beneficial to pay people for good performance.

What an Audit Committee should do?

While major functions of Audit committee are to monitoring the integrity of the financial statements, reviewing the company’s internal financial controls, monitoring and reviewing the effectiveness of the internal audit function, making recommendations in relation to the appointment and removal of the external auditor and their remuneration, reviewing and monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process, developing and implementing policy on the engagement of the external auditor to supply non-audit services, reviewing  arrangements for confidential reporting by employees and investigation of possible improprieties the committee has to ensure the following:

• Monitor and assess the effectiveness of internal audit in the overall context of the company’s risk management system.

• Review and assess the annual internal audit work plan.

• Review and monitor management’s responsiveness to the internal auditor’s findings and recommendations.
• Ensure that the internal auditor has direct access to the board chairman and to the audit committee and is accountable to the audit committee.
• Receive periodic reports on the results of internal audit work.
• Meet with the head of internal audit at least once a year without the presence of management.

Advantages and disadvantages of audit committees

An audit committee is a committee comprising of non-executive directors which is able to view a company’s affairs in a detached and independent way and collaborate effectively between the main board of directors and the external auditors.

Clearly, the functions of the audit committee are quite wide-reaching, therefore, it may be necessary to establish an internal audit function in order to help them fulfill their responsibilities.

• The company should have an audit committee of at least three non-executive directors (or, in the case of smaller companies, two).
• At least one member of the audit committee should have recent and relevant financial experience.

Advantages of audit committees: An audit committees have the following advantages:

• It may improve the quality of management accounting, as it is well placed to criticise internal functions.
• It should lead to better communication between the directors, external auditors and management.

Disadvantages of audit committees: An audit committees have the following disadvantages:

• fear that their purpose is to catch management out
• non-executive directors being overburdened with detail
• a ‘two-tier’ board of directors
• additional cost in terms, at least, of time involved.

Functions of Audit Committee

An audit committee is a committee comprising of non-executive directors which is able to view a company’s affairs in a detached and independent way and collaborate effectively between the main board of directors and the external auditors.

The objectives of the audit committee

• The company should have an audit committee of at least three non-executive directors (or, in the case of smaller companies, two).
• At least one member of the audit committee should have recent and relevant financial experience.
• Increasing public confidence in the credibility and objectivity of published financial information (including unaudited interim statements).
• Assisting directors (particularly executive directors) in meeting their responsibilities in respect of financial reporting.
• Strengthening the independent position of a company’s external auditor by providing an additional channel of communication.

Functions of Audit Committee

• Monitoring the integrity of the financial statements.
• Reviewing the company’s internal financial controls.
• Monitoring and reviewing the effectiveness of the internal audit functions.
• Making recommendations in relation to the appointment and removal of the external auditors and their remuneration.
• Reviewing and monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process.
• Developing and implementing policy on the engagement of the external auditor to supply non-audit services.
• Reviewing arrangements for confidential reporting by employees and investigation of possible improprieties.