Dear All,
Pls clarify that whether Interim Dividend could be paid out of Accumulated profits or not ??
And what %age is required to be transferred to General Reserves ?
Thanks & Regards,
Sonia
2 Replies
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 04 March 2012
As per companies(Amendment) Act, 2000, the provisions relating to final Dividend declared are being made applicable at par to Interim dividend also. hence all the provision relating to Final dividend are applicable to Interim dividend also.
Hence Interim dividend can be paid out of accumulated profits. Following are the provision for trasnferring the profits to the reserves:
Declaration of Dividend out of Reserves.-
In the event of inadequacy or 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
previous years and transferred by it to the reserves, subject to the conditions that-
(i) the rate of the dividend declared shall not exceed the average of the rates at
which dividend was declared by it in the five years immediately preceding that
year or ten per cent of its paid-up capital, whichever is less;
(ii) the total account to be drawn from the accumulated profits earned in previous
years and transferred to the reserves shall not exceed an amount equal to onetenth 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 incurred in the financial year
before any dividend in respect of preference or equity shares is declared ; and
(iii) the balance of reserves after such drawal shall not fall below fifteen per cent of
its paid-up share capital.
Explanation.-
For the purposes of this rule, "profits 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 (43 of 1961) shall be included and all
items of Capital Reserves including reserves created by revaluation of assets shall be
excluded
sonia
(student)
(37 Points)
Replied 18 April 2012
Thanks a lot sir.
Giridhar ji,
I would also like to know regarding Reconciliation of share capital audit report
under Regulation 55A of SEBI.
Kindly explain me point no. 19 of the report which states that ,
"REFERENCE OF PREVIOUS QUARTER WITH REGARDS TO EXCESS DEMATERIALIZED SHARES"
Recent Topics
- CLAIMING OF U CLAIMED RCM
- Building construction works
- REGARDING GSTR-9 F.Y 2023-24
- Rectification to decrease income in SCHEDULE OS
- Can Statutory Auditor of a subsidiary become concu
- Client Asking for the Revised Invoice
- Share office desk in bkc, near family court
- 80D claim for payment paid by parent
- TDS on purchase of Flat under subvention scheme be
- GST registration for medical shop in Karnataka
Related Threads
CAclubindia
