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Definitions of dividend on the Web:

Dividends are payments made by a corporation to its shareholder members. It is the

portion of corporate profits paid out to stockholders.[1] When a corporation earns a profit
or surplus, that money can be put to two uses: it can either be re-invested in the business
(called retained earnings), or it can be paid to the shareholders as a dividend. Many
corporations retain a portion of their earnings and pay the remainder as a dividend.

For a joint stock company, a dividend is allocated as a fixed amount per share. Therefore,
a shareholder receives a dividend in proportion to their shareholding. For the joint stock
company, paying dividends is not an expense; rather, it is the division of after tax profits
among shareholders. Retained earnings (profits that have not been distributed as
dividends) are shown in the shareholder equity section in the company´s balance sheet -
the same as its issued share capital. Public companies usually pay dividends on a fixed
schedule, but may declare a dividend at any time, sometimes called a special dividend to
distinguish it from a regular one.

Cooperatives, on the other hand, allocate dividends according to members' activity, so

their dividends are often considered to be a pre-tax expense.

Dividends are usually settled on a cash basis, store credits (common among retail
consumers' cooperatives) and shares in the company (either newly created shares or
existing shares bought in the market.) Further, many public companies offer dividend
reinvestment plans, which automatically use the cash dividend to purchase additional
shares for the shareholder.

• that part of the earnings of a corporation that is distributed to its shareholders;

usually paid quarterly
• a number to be divided by another number
• a bonus; something extra (especially a share of a surplus)

 Dividends are payments made by a corporation to its shareholder members. It is the

portion of corporate profits paid out to stockholders. ...
 A number or expression that is to be divided by another; A pro rata payment of
money by a company to its shareholders, usually made periodically (eg, quarterly or
 ( Dividende ) The proportional share of a bankrupt's estate paid out by the trustee to
creditors who have proven claims against that estate.
 The proportionate amount of company earnings issued to the holder of the
corresponding shares of stock. Decided upon by the Board of Directors, the amounts are
typically paid quarterly.
 The distribution of funds to creditors in a sequestration. Also, the proportion of the
debt repaid to a creditor in a sequestration; expressed as x pence in the £.
 A partial return of premium to policyholders. In an interinsurance exchange, the
company's governing board would normally declare a dividend to be disbursed for a
particular state or specialty if the company's claims and financial experience for one or
more past years resulted in funds exceeding ...
 An amount of money or stock that a corporation pays to its shareholders quarterly.
Typically, only larger companies pay dividends; smaller companies need to invest their
own profits to grow.
 A portion of the net profits paid directly to the stockholders paid at a fixed amount.
 All life insurance policies pay some kind of dividend, large or small, which good
management returns to the insured person. The insured may leave these dividends with
the company at normal interest, or may accept the payment in cash.
 That part of company profits after tax paid to shareholders in proportion to their
shareholding. Division 13A (ITAA) A division of the Income Tax Assessment Act 1936
which provides tax concessional treatment of shares and rights acquired under employee
share schemes meeting certain specified ...
 Funds paid to members based on account size and rates declared regularly (monthly,
quarterly or annually) by the board of directors for various types of accounts. A dividend
represents the payment by the credit union to the member for use of the member's funds.
 The payment by a company to its shareholders.
Rules of government
Companies Act and Payment of Dividend In fact, the declaration and payment of
dividend is an internal matter of the company and is governed by tis Articles.

The power regarding appropriation of profits is given to the Board of directors,.

However, they are governed by the provisions of Act. The directors are to follow table. A
or the provisions of Articles a the provisions of the Companies Act 1950 in the regard.
The following are the rules regarding declaration and payment of dividend:-

(1) Dividend on Paid up Capital. A company may, if so authorized by its Articles, pay
dividend on the paid up value of shares under section 93 of the companies Act.

(2) Provisions of Articles of Association. Rules 85 to 94 of Table A provide that-

(i) A company may declare dividend its general meeting provided it does not exceed the a
mount recommenced by the board of directors.

(ii) the board of directors may from the time pay to t members such interim dividends, as
appears to it to be justified by the profits of the company.

(iii) Notice of any dividend should be given to those who are entitled to receive it.

(iv) The directors my transfer an amount they think p[roper to the reserve fund which
may be utilised for any contingencies.

(v) When a dividend has been declared, it becomes a liability of the company to the
shareholders from the date of its declaration but no interest can be claimed on it.

3. Dividends only of Profits. (a) Dividends can only be declared or paid out of (i) the
current profits of the company, (ii) the past accumulated profits and (iii) moneys provided
by the government for the payment of dividends in pursuance of a guarantee given by
that government. No dividend can be paid out of capital. (Sec. 205 (i)). director who is
responsible for payment of dividend out of capital shall be personally liable to take good
such amount to the company.

(b) companies are not entitled to pay any dividend unless present or arrears of
depreciation have been provided for out of the profits and an amount of 10 % or reports
has been transferred to reserve. However, central government may allow any company to
declare or pay dividends out of profits before providing for any depreciation.
(c) Capital Profits may also be utilised for the declarations of dividend provided (i) there
is nothing in the Article prohibiting the distribution of dividend out of capital profits; (ii)
they have been reallied in cash: and (iii) they ave been realised in cash and (iii) they
remain as profits after revaluation of all assets and liabilities.

(d) Dividend cannot be paid out of accumulated profits unless current losses are made

(4) Payment of dividend only in Cash [ Sec. 205 (iii)]. Dividends are to be paid in cash
only except in the following circumstances-

(a) by capitalizing the profits by issue of fully paid bonus shares, if Articles so permit,
provided all legal formalities have been satisfied in respect of issue of bonus shares.

(b) by paying up any unpaid amount on partly paid up shares.

(5) Payment of Dividend to Specified Persons (Sec. 206). Dividend shall be paid only
to those whose names appear on the Register of member son the date of declaration of
dividend or to the holders of dividend warrant, if issued by the company.

(6) Payment of Dividend within 42 days (Sec. 207) Dividend must be paid within 42
days of its declarations except in the following circumstance:-

(i) by operation of law of insolvency;

(ii) in compliance of the directions of the shareholders;
(iii) where right to receive dividend is pending decision;
(iv) where it is not due to the default of the company.
(v) if company lawfully adjusts the amount against any debt due form the shareholder.

(7) Payment of Interim dividend. The directors of a company can pay interim dividend
subject to the provisions of Articles. Interim dividend can be paid at any time between the
two annual general meetings taking into full year depreciation on fixed assets.

(8) Transfer of Unpaid dividend to a Special Bank Account (Sec. 205 A) According to
section 205 A, newly inserted by the Companies (Amendment) Act 1974, where a
company has declared a dividend but has not posted the dividend warrant in respect
therefor within 42 days to the shareholders entitled to it, such unpaid dividends shall be
transferred to a special account to be opened by the company in that behalf in any
Scheduled Bank to be called Unpaid Dividend Account of ......Co. Ltd/Co. (Pvt) Ltd.' If
the unpaid dividend are not so transferred, the company shall pay an interest at 12 % p.a.
Any unpaid amount of dividend declared before the commencement of this Amendment
Act shall also be transferred to such special account within 6 months from the date of
commencement of the Act.

9. Transfer Unclaimed Dividend to Central Government. Any amount transferred to

the unpaid dividend account remains unpaid or unclaimed for 3 years from the date of
such transfer shall be transfered to the 'General Revenue Account' by the company along
with a statement giving full particulars in respect of the sums so transferred and the last
known addresses of the persons entitled to receive it and such other particulars as may be
prescribed. The company is entitled so a receipt for such transfer from the Reserve Bank
of India.

If a company fails to comply the above said provisions (given in para 8 and 9 above), the
company and every officer of the company who is in default shall be punishable with a
fine which may extend to Rs. 500 for every day during which default continues.

1. Chapter Introduction:
This chapter will acquaint you with the meaning, types and purposes of dividend.
Dividend is a portion of the profits distributed to shareholders in a company and is
usually expressed as a percentage of nominal value of shares. Dividends are often paid in
cash, though in theory other forms also exist.

Dividend affects the mood of the present shareholders, it also influences the behaviour
and response of prospective investors, stock exchanges and financial institutions because
of its relationship with the worth of the company which in turn affects the market value
of its shares. The decision regarding dividend is taken by the Board of Directors and is
then recommended to the shareholders for their formal approval in the annual general
meeting of the company.

2. Dividend out of Profits:

Q. “Dividend can be paid out of profits”. Explain this statement. Will a company be
justified in paying dividends when it has unwritten-off accumulated losses of the past?
(Dec. 99)

The word dividend is derived from ‘dividendum’ which means total divisible sum. The
expression dividend has two meanings. For an existing company, i.e., going concern, the
dividend is the distribution of divisible profits by a joint stock company to its
shareholders by way of return on their investments in the shares after complying with the
provisions of the Companies Act and Articles of Association of the company. In the case
of winding up, it means a division of the realised assets among the creditors and
contributors according to their respective rights. The legal provisions as to dividends for a
company as a going concern are summarised as under:

1. Dividends cannot be paid except out of profits. As such the payment of dividend
is ruled out when there is loss except where the Central or State’ Government has
guaranteed the payment of dividends by the company (Section 205).
2. Dividend must be paid within 42 days of declaration (Section 207).
3. Dividend is payable only to a registered shareholder or on his order to his banker.
However where a company has issued share warrants in pursuance of Section
114, dividend is to be paid to the bearer of such warrantor to his banker.
4. Articles normally provide (as Article 88 of. Table A) that dividends may be paid
up in proportion to the amount paid up on each share (Section 93). In the
absence .of such provision, dividends are payable on the nominal amount of each
share and not on the amount paid. [Oak Bank Oil Company Vs. Crum (1882) &
App. Cas. 65 H.L.]
5. No dividend is paid on calls-in-advance; it would be unjust if the same sum paid
on shares carried interest and dividend at the same time.
6. Where calls are in arrears, the company can make provision in the articles
prohibiting the payment of dividends on shares on which full amount has not been
paid. Otherwise dividend is payable only on the amount actually paid up.
7. The amount of dividend payable to shareholders may be rounded off to the
nearest rupees. Thus where such amount contains a part of a rupee consisting of
paisa, then, if such part is fifty paisa or more, it shall be increased to one rupee
and if such part is less than fifty paisa, it shall be ignored. .

Sources of dividend: There are three sources from which dividends may be declared,
namely: (i) current year’s profits, (ii) past profits remaining undistributed and (iii)
moneys provided by Government.

Dividends out of current years profits: A company can declare dividend out of current
year’s profits only after providing for depreciation in accordance with the provisions of
sub-section (2) of Section 205.

Dividends out of previous year’s profits: A company can pay dividend out of the
profits of any financial year(s) which falls after the commencement of Companies
(Amendment) Act 1960 after providing for depreciation in accordance with those
provisions and remaining undistributed. The legal position is summarised as under: .

(1) Arrears of depreciation are to be considered only if dividend for any financial year is
declared out of profits of any previous financial year or years falling after 28 December,
1960. ‘.
(2) If the company has incurred any loss in any previous financial year or years falling
after 28th December, 1960, then

(a) the amount of loss; or

(b) an amount which is equal- to the amount provided for depreciation for that year or
those years, whichever is less, shall be set off:

(i) against the profits of the company for the year for which the dividend is proposed to
be declared or paid; or
(ii) against the profits of the company for any previous financial year or years arrived at
after providing for the prescribed depreciation as per Section 205 (2); or .
(iii) against the aggregate of (i) and (ii) together.

(3) The Central Government may, if it thinks necessary to do so in the public interest,
allow any company to declare or pay dividend for any financial year out of the profits of
the company for that year or years or any financial year without providing for
(4) It shall not be necessary for the company to provide for arrears of depreciation where
dividend for any financial year is declared or paid out of profits of any previous financial
year or years which falls or fall before 28 December, 1960.
(5) Dividends can be declared out of the aggregate of the profits of the current year and
previous year(s).

Dividend out of subsidy: Where the Central or State Government has guaranteed the
payment of dividend by the company, dividend may be paid out of money provided by
such Government.


In case of inadequacy or absence of profits in any year, a company can declare and pay
dividends by withdrawing amount out of reserves. It is clear that only revenue reserves,
which are free and uncommitted, can be used for this purpose. Section 205 A (3) inserted
by Companies (Amendment) Act, 1974, provides that declaration of dividends out of the
accumulated profits earned by the company in previous years and transferred by it to the
reserves cannot be made in case of inadequacy or absence of profits in any year, except in
accordance with the prescribed rules or in special cases with the previous approval of the
Central Government. The prescribed rules framed by the Central Government in this
respect are known as the Companies (Declaration of Dividend out of Reserves) Rules,
1975. Rule 2 provides that in the event of inadequacy or in the absence of profits in any
year, dividend may be declared by a company for that year out of the accumulated profits
earned by it in the previous year and transferred by it to the reserves, subject to the
conditions that:

a. The rate of dividend shall not exceed the average of the rates at which dividend
was declared by it in the five years immediately preceding that year or 10 per cent
of its paid up capital, whichever is less;
b. The total amount to be drawn from the accumulated profits earned in previous
years and transferred to the reserves shall not exceed an amount equal to one tenth
of the sum of its paid up capital and free reserves and the amount so drawn shall
first be utilised to set off the losses in the financial year before any dividend in
respect of preference or equity shares is declared; and
c. The balance of reserves after such draw shall not fall below 15 per cent of its paid
up capital. Explanation: For the purpose of the rules, profit earned by a company
in previous years and transferred by it to the ‘reserves’ shall mean the total
amount of net profits after tax, transferred to reserves as at the beginning of the
year for which the dividend is to be declared; and in computing the said amount,
the appropriations out of the amount transferred from the Development Rebate
Reserve (at the expiry of the period specified under the Income Tax Act, 1961)
shall be included and all items of capital reserves including reserves created by
revaluation of assets shall be excluded.

It would be noticed that Section 205 (3) imposes restrictions’ on the payment of
dividends out of reserves only and not out of the accumulated profits carried forward in
the profit and loss account (without being transferred to reserves). There seems to be no
basis for such discrimination and the omission may be regarded merely accidental.
Otherwise, this lacuna in the drafting of this new section would defeat the purpose for
which it appears to have been incorporated.

3. Dividend Policy Goals:

Q. “While formulating a dividend policy, the management has to reconcile company’s
need for funds with the expectations of the shareholders.” Elaborate this statement and
state the policy goals which have to be kept in view by the management while taking a
decision on dividends. (Dec. 02)

The objective of corporate management is to maximize the market value of the enterprise.
The market value of common stock of a company is influenced by its policy regarding
allocation of net earnings into “plough back” & “payout”. While maximizing the market
value of shares, the dividend policy should be so oriented as to satisfy the interests of the
existing shareholders as well as to attract the potential investors. Thus, the aim should be
to maximize the present value of future dividends and the appreciation in the market price
of shares.

Dividend Policy Goals

• Dividend policy should be analyzed in terms of its effect on the value of the
• Investment by the company in new profitable opportunities creates value and
when a company foregoes an attractive investment, shareholders incur an
opportunity loss.
• Dividend, investment, & financing decisions are interdependent and there is often
a trade off.
• Dividend decision should not be considered as a short run residual decision.
• Whatever dividend policy is adopted by the company, the general principles
guiding the dividend policy should be communicated clearly to investors.
• Erratic & frequent changes in dividends should be avoided. Reduction in the rate
of dividend is painful thing for the shareholders to bear.

4. Role of Finance Manager:

Q. Discuss the role of the financial manager in the matter of dividend policy. What
alternative might he consider and what factors should he take into consideration before
finalizing his views on dividend policy. (June 00)

The disposal of the earnings is an issue of fundamental importance in financial

management. The financial manager plays a key role in advising the management, i.e.,
Board of Directors regarding the decision. It is the latter whose privilege it is to take the
decision. The retention of profits in business helps the company in mobilizing funds for

The dividend policy, particularly the timing of the declaration of dividend, influences the
market value of a company’s shares. The financial manager, therefore, should be well
informed about the capital market trends and the tax policies of the government, besides
the rationale behind the investment programme of the company.

The dividend alternatives available to finance manager while deciding the dividend
decision are listed below:

• Regular Dividend: If the company gives dividend every year right from the
initial year of operation, it is called regular dividend.
• Stable Dividend: Whether equal amount or a fixed % of dividend paid every
year, irrespective of the quantum of earnings as in case of preference shares, i.e.,
stable dividend.
• Fixed Payout Ratio: When a fix payout ratio is decided on the total of earning
available is called fixed payout ratio.
• Bonus Shares or Property Dividend: In this case, the company issues bonus

What factors should he take into consideration before finalizing his views on
dividend policy?
> Please refer to the next question for details.

5. Factors Affecting Dividend Decision:

Q. What factors could a company in general consider before it takes a decision on
dividends? (June 01)

The dividend decision is difficult decision because of conflicting objectives and also
because of lack of specific decision-making techniques. It is not easy to lay down an
optimum dividend policy which would maximize the long-run wealth of the shareholders.
The factors affecting dividend policy are grouped into two broad categories.

1. Ownership considerations
2. Firm-oriented considerations

Ownership considerations: Where ownership is concentrated in few people, there are no

problems in identifying ownership interests. However, if ownership is decentralized on a
wide spectrum, the identification of their interests becomes difficult.

Various groups of shareholders may have different desires and objectives. Investors
gravitate to those companies which combine the mix of growth and desired dividends.

Firm-oriented considerations: Ownership interests alone may not determine the

dividend policy. A firm’s needs are also an important consideration, which include the

• Contractual and legal restrictions

• Liquidity, credit-standing and working capital
• Needs of funds for immediate or future expansion
• Availability of external capital.
• Risk of losing control of organization
• Relative cost of external funds
• Business cycles
• Post dividend policies and stockholder relationships.

The following factors affect the shaping of a dividend policy:

Nature of Business: Companies with unstable earnings adopt dividend policies which
are different from those which have steady earnings.

Composition of Shareholding: In the case of a closely held company, the personal

objectives of the directors and of a majority of shareholders may govern the decision. To
the contrary, widely held companies may take a dividend decision with a greater sense of
responsibility by adopting a more formal and scientific approach.

Investment Opportunities: Many companies retain earnings to facilitate planned

expansion. Companies with low credit ratings may feel that they may not be able to sell
their securities for raising necessary finance they would need for future expansion. So,
they may adopt a policy for retaining larger portion of earnings.

Similarly, is a company has lucrative opportunities for investing its funds and can earn a
rate which is higher than its cost of capital, it may adopt a conservative dividend policy.

Liquidity: This is an important factor. There are companies, which are profitable but
cannot generate sufficient cash, since profits are to be reinvested in fixed assets and
working capital to boost sales.
Restrictions by Financial Institutions: Sometimes financial institutions which grant
long-term loans to a company put a clause restricting dividend payment till the loan or a
substantial part of it is repaid.

Inflation: In period of inflation, funds generated from depreciation may not be adequate
to replace worn out equipment. Under inflationary situation, the firm has to depend upon
retained earnings as a source of funds to make up for the shortfall. Consequently, the
dividend pay out ratio will tend to be low.

Other factors: Age of the company has some effect on the dividend decision.

The demand for capital expenditure, money supply, etc., undergo great oscillations
during the different stages of a business cycle. As a result, dividend policies may
fluctuate from time to time.
A major contributor to this article appears to have a close connection with its
subject. It may require cleanup to comply with Wikipedia's content policies,
particularly neutral point of view. Please discuss further on the talk page. (April

(NSE: RCOM, BSE: 532712)
Industry Telecommunications
Founded 2004
Founder(s) Dhirubhai Ambani
Headquarters Navi Mumbai, Maharashtra, India
Area served India
Anil Ambani
Key people
Satish Seth

Products Television
Data Cards
Recharge Vouchers
Revenue 22,948 crore (US$ 5.21 billion) (2009)
9,305 crore (US$ 2.11 billion) (2009)
Net income 6,045 crore (US$ 1.37 billion) (2009)
Total assets 102,207 crore (US$ 23.2 billion) (2009)
Total equity 1,032 crore (US$ 234.26 million) (2009)
Employees 31,884 (2009)
Parent Reliance Anil Dhirubhai Ambani Group
Reliance Telecom Limited
Reliance Globalcom Limited
Reliance Tech Services
Subsidiaries Reliance Communications Infrastructure
Limited (RCIL)
Reliance Big TV Limited
Reliance Infratel Limited
Website Reliance Communications

Reliance Communications (NSE: RCOM, BSE: 532712), formerly known as Reliance

Infocomm, along with Reliance Telecom and Flag Telecom, is part of Reliance
Communications Ventures (RCoVL). Reliance Communications Limited, founded by
Dhirubhai H Ambani (1932–2002), is the flagship company of the Reliance Anil
Dhirubhai Ambani Group. The Reliance Anil Dhirubhai Ambani Group currently has a
net worth in excess of 64,000 crore (US$13.6 billion), cash flows of 13,000 crore ($2.8
billion), and a net profit of 8,400 crore ($1.8 billion). The Equity Shares of RCOM are
listed on Bombay Stock Exchange Limited and National Stock Exchange Limited. The
Global Depository Receipts and Foreign Currency Convertible Bonds are listed on
Luxembourg Stock Exchange and Singapore Stock Exchange respectively.


• 1 Background
• 2 Main subsidiaries
o 2.1 Reliance Telecommunication Limited (RTL)
o 2.2 Reliance Globalcom
o 2.3 Reliance Internet Data Center (RIDC)
o 2.4 Reliance Big TV Limited
o 2.5 Reliance Infratel Limited (RITL)
• 3 Acquisition
• 4 Offices
• 5 Subscriber base

• 6 References

[edit] Background
It ranks among the top 5 telecommunications companies [1] in the world by number of
customers in a single country. Reliance Communications corporate clientele includes
2,100 Indian and multinational corporations, and over 800 global, regional and domestic
carriers. The company has established a pan-India, next-generation, integrated (wireless
and wireline), convergent (voice, data and video) digital network that is capable of
supporting services spanning the entire communications value chain, covering over
24,000 towns and 600,000 villages. Reliance Communications owns and operates the
next-generation IP-enabled connectivity infrastructure,[2] comprising over 190,000
kilometers of fiber optic cable systems in India, USA, Europe, Middle East and the Asia
Pacific region.

[edit] Main subsidiaries

[edit] Reliance Telecommunication Limited (RTL)

In July 2007, the company announced it was buying US-based managed ethernet and
application delivery services company Yipes Enterprise Services for a cash amount of
1200 crore (the equivalent of US$300 million). The deal was announced of the overseas
acquisition, the Reliance group has amalgamated the United States-based Flag Telecom
for $210 million (roughly 950 crore). RTL operates in Madhya Pradesh, West Bengal,
Himachal Pradesh, Orissa, Bihar, Assam, Kolkata and Northeast, offering GSM services.

[edit] Reliance Globalcom

RGL owns the worlds largest private undersea cable system,[4] spanning 65,000 km
seamlessly integrated with Reliance Communications. Over 110,000 km of domestic
optic fiber provides a robust Global Service Delivery Platform, connecting 40 key
business markets in India, the Middle East, Asia, Europe, and the U.S.

[edit] Reliance Internet Data Center (RIDC)

RIDC provides Internet Data Center (IDC) services located in Mumbai, Bangalore,
Hyderabad and Chennai. Spread across 650,000 sq ft (60,000 m2) of hosting space, it
offers IT infrastructure management services to large, medium and small enterprises. It is
one of the leading data center service provider in India and provides services like
colocation, managed server hosting, virtual private server and data security. It has
launched cloud computing services,[5] offering product under its infrastructure as a server
(Iaas) and software as a service (Saas) portfolio, which enables enterprises, mainly small
and medium, a cost-effective IT infrastructure and application on pay-per-user model.

[edit] Reliance Big TV Limited

Reliance Big Tv launched in August 2008[6] and thereafter acquired 1 million subscribers
within 90 days of launch,[7] the fastest ramp-up ever achieved by any DTH operator in the
world. Reliance Big TV offers its 1.7 million customers DVD-quality pictures on over
200 channels using MPEG-4 technology.

[edit] Reliance Infratel Limited (RITL)

RITL’s business is to build, own and operate telecommunication towers, optic fiber cable
assets and related assets at designated sites, and to provide these passive
telecommunication infrastructure assets on a shared basis to wireless service providers
and other communications service providers under long-term contracts.

[edit] Acquisition
• FLAG Telecom
• Yipes ethernet service
• Digicable

[edit] Offices
Reliance Communications Limited has its offices in Ahmedabad, Bangalore, Bhopal,
Chandigarh, Chennai, Hyderabad, Jaipur, Kochi, Kolkata, Lucknow, Patna and Pune.
Company History - Reliance Communications

-Nokia and Reliance Communications Ltd have joined hands to market

the Nokia 1255 mobile handset in India at a price of Rs 1,999.

-Reliance Comm forays into video conferencing


- Reliance Communications rolled out a range of mobile handsets

priced at between Rs 777 and Rs 888, shaving by half to one-third the
existing entry level mobility costs in the country.

- Reliance Communications Ltd has informed that the Board of

Directors of the Company at its meeting held on July 17, 2007, has
appointed Shri. A K Purwar, former Chairman of State Bank of India,
as an Additional Director of the Company with effect from July 17,

- RCoM acquires Yipes for 0mn.

-Reliance Communications Ltd has launched Money Transfer through

mobile phones across the country through it's tie-up with ICICI

-Microsoft Corp and Reliance Communications (RCom) announced their

joint foray into Internet Protocol Television (IPTV) or simply put
television on internet instead of the traditional route.


-The US-French telecom equipment supplier Alcatel-Lucent and Reliance

Communications announced on May 12, a joint venture to provide network
services to telecommunications operators.


- Telecom operator Etisalat DB, formerly known as Swan Telecom, will

be outsourcing its telecom infrastructure requirements to the Anil
Ambani Group company Reliance Communications as part of a Rs
10,000-crore deal spread over the next 10 years.

- Reliance Communications announced its partnership with Microsoft

for offering Windows Mobile solutions on its wireless networks where
according to the agreement, Microsoft is said to offer Windows Mobile
solutions to RCom customers, including push email support, chat,
photo-sharing, content back-up and other applications.

- Reliance Communications on Nov 27 introduced one paise per SMS for

both GSM and CDMA customers, triggering a war of tariffs on data
services from voice calls.


- Reliance Communications has entered into a pact with Polycom Inc,

the global leader in tele-presence, video and voice solutions, in
order to introduce world's first wireless, high-resolution video
conferencing service.

- Reliance Communications (RCom) has inked an alliance with GetJar.

Under the alliance, GetJar will offer Reliance Communications its
extensive catalogue of over 65,000 free mobile applications.

- Reliance Communications, today announced an unlimited internet

access plans called -MobileNet Plan, under which, the subscribers of
both post paid as well as pre paid can access unlimited mobile
internet at Rs 99 per month.
quarterly results in brief
Sep ' 10 Jun ' 10 Mar ' 10 Dec ' 09 Sep ' 09
Sales 3,081.53 3,177.57 3,092.62 3,108.46 3,057.89
Operating profit -3.23 118.03 205.61 39.29 375.01
Interest 110.56 211.15 -487.35 -342.77 342.97
Gross profit -105.69 -84.78 744.33 383.26 35.15
EPS (Rs) -2.31 -2.38 1.28 -0.18 -0.57

Quarterly results in details

Sep ' 10 Jun ' 10 Mar ' 10 Dec ' 09 Sep ' 09
Other income 8.10 8.34 51.37 1.20 3.11
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 156.83 167.26 154.72 168.96 162.63
Excise - - - - -
Admin and selling expenses - - - - -
Research and development expenses - - - - -
Expenses capitalised - - - - -
Other expenses 2,927.93 2,892.28 2,732.29 2,900.21 2,520.25
Provisions made - - - - -
Depreciation 370.78 406.03 355.60 386.29 213.03
Taxation - - 130.86 9.68 -60.00
Net profit / loss -476.47 -490.81 264.52 -37.71 -117.88
Extra ordinary item - - 6.65 -25.00 -
Prior year adjustments - - - - -
Equity capital 1,032.01 1,032.01 1,032.01 1,032.01 1,032.01
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 6662.97 6662.07 6691.07 6706.86 6766.86
Agg.of non promotoholding (%) 32.28 32.28 32.42 32.49 32.78
OPM (%) -0.10 3.71 6.65 1.26 12.26
GPM (%) -3.42 -2.66 23.67 12.32 1.15
NPM (%) -15.42 -15.41 8.41 -1.21 -3.85

Half yearly results in brief

Sep ' 10 Mar ' 10 Sep ' 09 Mar ' 09 Sep ' 08
Sales 6,259.10 6,201.08 6,089.53 6,506.96 7,103.62
Operating profit 114.80 244.90 624.67 1,963.03 2,374.13
Interest 321.71 -830.12 -228.26 6.02 368.00
Gross profit -190.47 1,127.59 1,021.47 2,038.49 2,008.75
EPS (Rs) -4.69 1.10 1.22 7.45 3.95

Half yearly results in details

Sep ' 10 Mar ' 10 Sep ' 09 Mar ' 09 Sep ' 08
Other income 16.44 52.57 168.54 81.48 2.62
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 324.09 323.68 348.12 319.47 438.88
Excise - - - - -
Admin and selling expenses - - - - -
Research and development expenses - - - - -
Expenses capitalised - - - - -
Other expenses 5,820.21 5,632.50 5,116.74 4,224.46 4,290.61
Provisions made - - - - -
Depreciation 776.81 741.89 769.35 1,309.91 1,056.99
Taxation - 140.54 - 5.40 7.00
Net profit / loss -967.28 226.81 252.12 1,536.81 816.12
Extra ordinary item - -18.35 - 813.63 -128.64
Prior year adjustments - - - - -
Equity capital 1,032.01 1,032.01 1,032.01 1,032.01 1,032.01
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 6662.97 6691.07 6766.86 6741.66 6992.16
Agg.of non promotoholding (%) 32.28 32.42 32.78 32.66 33.88
OPM (%) 1.83 3.95 10.26 30.17 33.42
GPM (%) -3.04 18.03 16.32 30.94 28.27
NPM (%) -15.41 3.63 4.03 23.33 11.48

Annual results in brief

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 06
Sales 12,290.61 13,610.58 13,416.19 11,725.26 8,584.97
Operating profit 869.57 4,337.16 4,882.46 4,476.60 3,276.94
Interest -1,058.38 85.58 445.17 232.38 162.84
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 06
Gross profit 2,149.06 4,335.67 4,447.75 4,280.87 3,149.84
EPS (Rs) 2.32 11.40 12.53 11.78 8.42

Annual results in details

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 06
Other income 221.11 84.09 10.46 36.65 35.74
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 671.80 759.35 858.65 684.40 492.04
Excise - - - - -
Admin and selling expenses - - - 2,119.44 1,544.81
Research and development
- - - - -
Expenses capitalised - - - - -
Other expenses 10,749.24 8,514.07 7,675.08 4,444.82 3,271.18
Provisions made - - - - -
Depreciation 1,511.24 2,366.90 1,843.66 1,836.12 1,364.39
Taxation 140.54 12.40 17.64 12.00 18.35
Net profit / loss 478.93 2,352.93 2,586.45 2,408.85 1,722.10
Extra ordinary item -18.35 396.56 - -23.90 -45.00
Prior year adjustments - - - - -
Equity capital 1,032.01 1,032.01 1,032.01 1,022.31 1,022.31
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 6691.07 6741.66 6992.16 6798.04 6797.94
Agg.of non promotoHolding (%) 32.42 32.66 33.88 33.25 33.25
OPM (%) 7.08 31.87 36.39 38.18 38.17
GPM (%) 17.18 31.66 33.13 36.40 36.54
NPM (%) 3.83 17.18 19.26 20.48 19.98

Profit loss account

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 05

Operating income 13,554.60 15,086.66 14,792.05 12,756.30 -
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 05

Material consumed 50.39 29.95 15.15 16.48 -
Manufacturing expenses 7,994.76 5,975.57 4,144.21 3,358.34 -
Personnel expenses 672.39 754.56 858.65 684.40 1.11
Selling expenses 662.96 773.21 1,067.76 1,399.88 -
Adminstrative expenses 1,980.67 2,323.44 2,532.99 1,784.19 0.55
Expenses capitalised - - - - -
Cost of sales 11,361.17 9,856.73 8,618.76 7,243.29 1.66
Operating profit 2,193.43 5,229.93 6,173.29 5,513.01 -
Other recurring income 797.98 675.12 28.68 169.61 13.26
Adjusted PBDIT 2,991.41 5,905.05 6,201.97 5,682.62 11.59
Financial expenses 1,253.84 1,153.24 870.05 456.55 -
Depreciation 1,511.24 1,933.51 1,843.66 1,836.12 2.74
Other write offs - - - - -
Adjusted PBT 226.33 2,818.30 3,488.26 3,389.95 8.86
Tax charges 1,404.59 1,488.64 1,393.66 1,043.38 3.20
Adjusted PAT -1,178.26 1,329.66 2,094.60 2,346.57 5.65
Non recurring items 1,657.19 3,473.01 491.85 62.28 -
Other non cash adjustments - - - - -
Reported net profit 478.93 4,802.67 2,586.45 2,408.85 5.65
Earnigs before appropriation 981.68 9,102.91 4,881.35 2,414.50 5.65
Equity dividend 175.44 165.12 154.80 102.23 -
Preference dividend - - - - -
Dividend tax 29.14 28.06 26.31 17.37 -
Retained earnings 777.10 8,909.73 4,700.24 2,294.90 5.65

Year Month Dividend (%)
2010 May 17
2009 Jul 16
2008 Apr 15
2007 Apr 10
Capital structure
Paid Up
From To Class Of Authorized Issued Paid Up Paid Up
Year Year Share Capital Capital Shares (Nos) Capital
2009 2010 1,500.00 1,032.01 2064026881 5 1,032.01
2008 2009 1,500.00 1,032.01 2064026881 5 1,032.01
2007 2008 1,500.00 1,032.01 2064026881 5 1,032.01
2006 2007 1,500.00 1,022.31 2044614990 5 1,022.31
2005 2005 625.00 0.05 100000 5 0.05

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 05

Per share ratios

Adjusted EPS (Rs) -5.71 6.44 10.15 11.48 565.39
Adjusted cash EPS (Rs) 1.61 15.81 19.08 20.46 839.17
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 05
Reported EPS (Rs) 2.32 23.27 12.53 11.78 565.39
Reported cash EPS (Rs) 9.64 32.64 21.46 20.76 839.17
Dividend per share 0.85 0.80 0.75 0.50 -
Operating profit per share (Rs) 10.63 25.34 29.91 26.96 -166.42
Book value (excl rev res) per share
244.66 250.43 120.35 100.39 0.03
Book value (incl rev res) per share
244.66 250.43 120.35 100.39 0.03
Net operating income per share (Rs) 65.67 73.09 71.67 62.39 -
Free reserves per share (Rs) 233.03 239.16 109.11 95.39 14,78,342.67

Profitability ratios
Operating margin (%) 16.18 34.66 41.73 43.21 -
Gross profit margin (%) 5.03 21.84 29.26 28.82 -
Net profit margin (%) 3.33 30.47 17.45 18.63 42.64
Adjusted cash margin (%) 2.32 20.70 26.57 32.35 63.29
Adjusted return on net worth (%) -2.33 2.57 8.43 11.43 0.03
Reported return on net worth (%) 0.94 9.29 10.41 11.73 0.03
Return on long term funds (%) 2.12 5.34 11.81 11.16 0.05

Leverage ratios
Long term debt / Equity 0.37 0.43 0.48 0.67 -
Total debt/equity 0.48 0.59 0.81 0.70 -
Owners fund as % of total source 67.35 62.58 55.04 58.48 100.00
Fixed assets turnover ratio 0.62 0.76 0.77 0.69 -

Liquidity ratios
Current ratio 2.17 2.73 1.65 1.87 742.81
Current ratio (inc. st loans) 1.37 1.45 0.95 1.77 742.81
Quick ratio 2.14 2.70 1.63 1.86 742.81
Inventory turnover ratio 41.20 - - - -

Payout ratios
Dividend payout ratio (net profit) 42.71 4.02 7.00 4.96 -
Dividend payout ratio (cash profit) 10.27 2.86 4.08 2.81 -
Earning retention ratio 117.36 85.48 91.36 94.91 100.00
Cash earnings retention ratio 38.57 94.08 95.41 97.15 100.00

Coverage ratios
Adjusted cash flow time total debt 73.51 9.47 5.15 3.48 -
Financial charges coverage ratio 2.39 5.12 7.13 12.45 -
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 05
Fin. charges cov.ratio (post tax) 2.59 6.84 6.09 10.30 -

Component ratios
Material cost component (% earnings) 0.37 0.19 0.10 0.12 -
Selling cost Component 4.89 5.12 7.21 10.97 -
Exports as percent of total sales 6.26 9.23 8.88 13.23 -
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.69 0.65 0.65 0.53 0.79
Bonus component in equity capital
- - - - -
Dividend policy
A company's dividend policy is the company's usual practice when deciding how big a
dividend payment to make.

Dividend policy may be explicitly stated, or investors may infer it from the dividend
payments a company has made in the past. If a company states a dividend policy it
usually takes the form of a target pay-out ratio.

If a company has not stated a dividend policy then investors will infer it. Assumptions
that investors are likely to make are:
• The DPS will be maintained at at least the previous year's level (excluding special
dividends) — unless dividend cover is very low or the company has warned that a
dividend cut is possible
• If the payout ratio has been maintained at a roughly constant level in the past, the
same will be done in the future
• Any other pattern of dividend growth will continue as long as the cover does not
fall too low.

Companies do not normally increase dividends unless they are confident that the increase
is sustainable. This means that increasing the dividend is a way in which the management
of a company can signal investors that they are confident.

Conversely, dividend cuts are often an acknowledgement of some permanent

deterioration in a company's business. Sometimes it only reflects a need to keep cash for
capex. It is usually clear which it is.

Shareholders look into the capability of companies to initiate a dividend. Dividends are payments
made by a company to a shareholder usually after a company earns a profit (Wikipedia 2007
[online]). Since dividends are money divided to shareholders after a profit, it is not considered a
business expense but a sharing of recognized assets among shareholders. Dividends are either
paid regularly or can be called out anytime. Consequently, a dividend policy is a set of company
rules and guidelines used to decide how much the company will pay out to its shareholders
(Investopedia 2007 [online]).

A dividend policy is first known as a heavy factor in a company’s stock value. However, more
scholars are suggesting that corporate dividend policies do not matter and should not matter in a
company’s stock value (Investopedia 2003 [online]). Arguments against dividend policies start
from the fact that investors can create their own dividends on other investment option. A wise
investor can look at more stable bonds to earn a return of investment rather than a dividend
policy that can fluctuate. Secondly, earning from dividends is taxed higher than capital gains
(Investopedia 2007 [online]). For these reasons, investors are not lured to relative corporate
dividend policies of companies as an accurate value of their stock.

Some companies believe that a no-dividend policy is just as sound as companies with a dividend
policy. Companies without a dividend policy can use their profit earnings to reinvest and expand
the company shares or buy assets. Having a dividend policy foregoes these opportunities.

For people who value profit certainty of a company, a sound dividend policy is important. It
follows that a high and regular corporate dividend policy means that companies have a
benchmark for doing well. Therefore, more dividends can equate to the overall health of the
company. Dividend policies are more valuable to small companies or cooperatives with excess
cash and a few good projects where the net present value of these projects is positive.
Meanwhile companies, without excess cash but have several good projects where NPV is also
positive will only derail the undertaking of current projects. While a good corporate dividend policy
is equated to excess cash, the value of the company is not hinged on the value of dividends as
there are other indicator’s of a company’s performance.

There are different kinds of dividend policies. First, residual dividend policy is a method of
distribution where dividends are paid after all the requirements for capital are met. Thus,
dividends are computed from the residual cash after spending on new capital goods. The aim of
this dividend policy is to decide if there is enough money left after all costs are met.

A cyclical policy or stable policy is a regular dividend payout usually given every quarter. A
cyclical dividend policy is set at a fixed fraction of quarterly earnings while a stable policy is set as
a fraction of yearly earnings. This produces certainty for investors that they get regular income for
their investments.

In the end, the value of dividend policies falls on investor decisions. While there are contrasting
views of its usefulness, the most important factor is achieving the best bang-for-buck.
BCE announces plan to return value to its shareholders
Reinstates common share dividend, announces 5% NCIB share buyback
Bell continues move forward as a competitive, customer-focused

MONTREAL, Québec, Dec. 12 2008 -- Following the termination of the

proposed privatization agreement by BCE in accordance with its terms,
BCE Inc.
(TSX, NYSE: BCE) today announced plans to return value to BCE
with a reinstated common share dividend and a new Normal Course Issuer
(NCIB) common share buyback program.
Bell Canada will also continue its move forward as a re-energized
with a clear goal - to be recognized by customers as Canada's leading
communications company - and the customer-focused strategy and structure
required to achieve it.
"Our enhanced operational performance in recent months confirms
that Bell
is competing as a cost-effective and customer-focused communications
The Bell team has implemented a range of programs to deliver a better
experience, and we are eager to build on the clear progress we've
made," said George Cope, President and CEO of Bell and BCE. "Given this
steadily improving business trajectory, we view the dividend and share
initiatives announced by BCE today as very attractive to our
shareholders now
and going forward."
"The BCE Board of Directors is in full support of the operational
investment strategy and capital market approach implemented by our CEO
Cope and his executive team," said Richard J. Currie, BCE and Bell
Board Chair.

Bell's move forward

In July 2008, Bell instituted a new strategy and a 100-day plan to

enhance its customer service capability, competitiveness and cost
With a strict focus on its core business as a communications service
Bell is executing on 5 Strategic Imperatives - Improve Customer Service,
Accelerate Wireless, Leverage Wireline Momentum, Invest in Broadband
& Services, and Achieve a Competitive Cost Structure - in order to
deliver a
better customer experience.
Beginning in July, Bell announced several significant operational
initiatives supporting its Strategic Imperatives, including an
restructuring that reduced the number of management layers at Bell,
all team members closer to the customer, while reducing the number of
management positions by 15%; ambitious new service programs such as
Same Day
Next Day service and Express Install; major investments in its wireless
and IP
fibre networks, as well as its service infrastructure; and a bold new
that highlights Bell's move forward in the business and consumer
Bell's cost reduction initiatives will result in savings of
$400 million, an enhanced competitive position and, as evidenced by the
progress shown in the Company's third-quarter (Q3) results, steadily
operational and financial performance supporting Bell's future as a
company, and the shareholder value initiatives announced today.
Strong balance sheet and liquidity

Maintaining a public company capital structure, underpinned by

investment grade credit metrics, BCE is retaining high levels of
liquidity to fund its maturing debt obligations given today's market
environment. The Company also today announced new initiatives - a
common share dividend and an NCIB program - dedicated to returning
value to
its shareholders.

Reinstated common share dividend

BCE has reinstated its common share dividend and declared this
its fourth quarter of 2008 common dividend. For shareholders of record
as of
December 23, 2008, a quarterly dividend per share of $0.365 will be
paid on
January 15, 2009.

NCIB share buyback program

BCE will return capital to shareholders in the form of a Normal

Issuer Bid (NCIB). To that end, BCE will repurchase up to approximately
5% of
outstanding common shares, or about 40 million common shares. The NCIB
subject to approval by the Toronto Stock Exchange (TSX) and will be
out in accordance with the requirements of the TSX and applicable laws.
"A share buyback is the most efficient method of distributing
capital to
our shareholders, particularly given the current valuation metrics of
Company," said Siim Vanaselja, Chief Financial Officer of BCE. "The
buyback will be accretive to earnings per share and cash flow. Our
operational progress provides the Company with confidence in our
ability to
return value to shareholders now and into the future."

Annual Shareholder Meeting

The Company's shareholders' meeting will be held on Tuesday

February 17,
2009 in Montréal.
At this meeting, the Company will further outline Bell's goal and 5
Strategic Imperatives and BCE's capital structure and shareholder value
initiatives, including its dividend payout policy.

Return of share certificates

BCE has advised Computershare Investor Services Inc. that the
privatization transaction will not proceed. As a result, holders of BCE
will maintain their status as BCE shareholders. Computershare will
return to
depositing shareholders a share certificate representing their
deposited BCE
common and preferred shares and any ancillary documents it received
from each
such shareholder by first class mail as soon as practicable. For more
information, investors may contact Computershare at 1-800-564-6253.

Termination of cash tender offers for certain outstanding debt


In addition, BCE and Bell Canada announced today that they have
terminated their previously announced conditional cash tender offers for
outstanding BCE 7.35% Series C Notes due October 30, 2009 (the "BCE
and outstanding Bell Canada 6.15% Debentures, Series M-2, due June 15,
and 5.50% Debentures, Series M-16, due August 12, 2010 (the "Bell
BCE and Bell Canada, respectively, have notified the depositaries
of the
termination of the tender offers, that they will not accept for payment
or pay
for any BCE Notes or Bell Debentures deposited to the tender offers, and
instructed the depositaries to promptly return all BCE Notes and Bell
Debentures deposited by the tendering holders.

Caution Concerning Forward-Looking Statements

Certain statements made in this news release, including, but not

to, statements relating to BCE's expected operational and financial
performance, as well as BCE's objectives concerning the distribution of
capital to shareholders, and other statements that are not historical
are forward-looking statements and are subject to important risks,
uncertainties and assumptions, and our board's discretion in respect of
declaration of dividends.
The results or events predicted in these forward-looking statements
differ materially from actual results or events. As a result, we cannot
guarantee that any forward-looking statement will materialize and you
cautioned not to place undue reliance on these forward-looking
statements. The
forward-looking statements contained in this news release are made as
of the
date of this release and, accordingly, are subject to change after such
Except as may be required by Canadian securities laws, we do not
undertake any
obligation to update or revise any forward-looking statements contained
this news release, whether as a result of new information, future
events or
otherwise. Except as otherwise indicated by BCE, these statements do not
reflect the potential impact of any non-recurring or other special
items or of
any dispositions, monetizations, mergers, acquisitions, other business
combinations or other transactions that may be announced or that may
after the date hereof.
Risks and assumptions that could cause actual results or events to
materially from current expectations include, among others: general
and credit market conditions; failure to achieve our business
increased pension fund contributions; the intensity of competitive
and the increase in wireless competitive activity that could result from
Industry Canada's licensing of AWS spectrum; our ability to respond to
technological changes and rapidly offer new products and services;
affecting the functionality of, and our ability to protect, maintain and
replace, our networks, IT systems and software; labour disruptions; the
potential adverse effects on our Internet and wireless businesses of the
significant increase in broadband demand; events affecting the
operations of
our service providers operating outside Canada; our ability to raise the
capital we need to implement our business plan; our ability to
certain traditional services as necessary to improve capital and
efficiencies; regulatory initiatives or proceedings, litigation and
changes in
laws or regulations; increased regulation banning the use of wireless
while driving; launch and in-orbit risks of satellites used by Bell TV;
competition from unregulated U.S. direct-to-home satellite television
sold illegally in Canada and the theft of our satellite television
BCE's dependence on its subsidiaries' ability to pay dividends; delays
completion of the high speed packet access overlay of our wireless
and health concerns about radio frequency emissions from wireless
For additional information with respect to certain of these and
assumptions and risks, please refer to BCE's 2007 annual management's
discussion and analysis ("MD&A") dated March 5, 2008 included in the
Canada Enterprises 2007 Annual Report, BCE's 2008 First Quarter MD&A
dated May
6, 2008, BCE's 2008 Second Quarter MD&A dated August 5, 2008 and BCE's
Third Quarter MD&A dated October 28, 2008, all filed by BCE with the
securities commissions (available at and with the
Securities and Exchange Commission (available at
These documents
are also available on BCE's website at

About BCE

BCE is Canada's largest communications company, providing the most

comprehensive and innovative suite of communication services to
and business customers in Canada. Under the Bell brand, the Company's
include local, long distance and wireless phone services, high-speed and
wireless Internet access, IP-broadband services, information and
communications technology services (or value-added services) and
direct-to-home satellite and VDSL television services. BCE also holds an
interest in CTVglobemedia, Canada's premier media company. BCE shares
listed in Canada and the United States. For corporate information on
please visit