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Section 1 - Introduction
(1) The University has established a number of subsidiary entities over which it exercises control. That control enables the University to govern the financial and operating policies of each entity for the benefit of the University in fulfilling its objects and conducting its functions. In the course of their operations, controlled entities may accumulate surpluses that are distributable via a dividend payment to the University. This policy sets out the University's requirements of its controlled entities relating to the payment of dividends to the University.
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Section 2 - Scope
(2) This guideline applies to all controlled entities of the University whose corporate structure enables them to pay a dividend.
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Section 3 - Policy Intent
(3) This guideline is designed to confirm the requirement for controlled entities to provide a maximum return on capital invested to the University in the form of a cash dividend. This policy also recognises the need for controlled entities to maintain sufficient cash for operational purposes and, where appropriate, future development and growth.
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Section 4 - Policy Provisions
(4) Prior to the end of each financial year a controlled entity shall declare a dividend to the University.
(5) Such dividend declared shall be paid to the University within 30 days of the end of the financial year.
(6) The amount of the dividend shall be maximised and be calculated using the Controlled Entity Dividend Calculation Schedule as the lesser of:
- cash and investments held by the controlled entity that are surplus to its ordinary operating requirements, capital expenditure, and future development requirements', and
- the expected balance of retained profits at the end of the financial year.
(7) In the event that a controlled entity seeks to reduce the dividend amount for cash flow purposes it shall request specific written approval from the Vice-Chancellor of the University by providing:
- a description of the reasons for a reduced dividend amount supported by operational and capital expenditure plans.
- relevant supporting financial information to enable the University to undertake an assessment of the entity's financial performance, position and cash flow requirements.