Q.Draft a reply letter resolving the query of the member on low rate of dividend.

The secretary drafts a polite reply that acknowledges the member's concern, explains the genuine reasons for the lower dividend (lower profits, transfer to reserves, ploughing back for growth) and reassures the member about the company's future.

When a member writes questioning the low rate of dividend, the company secretary replies on behalf of the Board, giving honest reasons and reassurance. A properly formatted specimen reply letter is given below.

PRAGATI INDUSTRIES LTD.

Registered Office: 45, MIDC Industrial Area, Pune - 411 018

Ref. No.: SEC/DIV/2026/118

Date: 15th April, 2026

To,

Mr. Rajesh Kulkarni

12, Shivaji Nagar,

Nashik - 422 005

Sub.: Reply regarding rate of dividend declared

Dear Sir,

We thank you for your letter dated 5th April, 2026 in which you have expressed concern about the comparatively low rate of dividend declared by the company for the year ended 31st March, 2026.

We wish to assure you that the Board of Directors is fully conscious of the shareholders' expectations. The lower rate of dividend this year is mainly on account of a fall in profits caused by increased cost of raw materials and a temporary slowdown in demand. Further, in order to strengthen the company's financial position, the Board has transferred a larger amount to reserves and has retained a part of the profit to finance the ongoing expansion of the factory at Aurangabad.

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