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Section 123 to 127 of 2013

Section 123 to 127 of 2013. Declaration and Payment of Dividend. Declaration of Dividend. Transfer to Reserves. A company may voluntarily transfer a percentage of its profits to reserves as it considers appropriate. Mandatory transfer to reserves is not required

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Section 123 to 127 of 2013

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  1. Section 123 to 127 of 2013 Declaration and Payment of Dividend

  2. Declaration of Dividend

  3. Transfer to Reserves • A company may voluntarily transfer a percentage of its profits to reserves as it considers appropriate. Mandatory transfer to reserves is not required • Dividend can be paid only out of free reserves. Securities premium is not free reserve.

  4. Declaration of Dividend in case of Inadequacy Profit • Company can declare dividend out of the accumulated profits earned by it in previous years and transferred to reserves, but the rate of dividend declared shall not exceed the average of the rates at which dividend was declared by it in the immediately 3 preceding years.

  5. Interim Dividend • Can be declared out of the surplus in the Profit & Loss Account as well as profits of the FY in which dividend is sought to be declared. • If loss is incurred in preceding quarter of the current FY then interim dividend shall not be declared at a rate higher than the average dividends declared by the company during the immediately preceding 3 Fys. • Failure to comply with provisions relating to acceptance and repayment of deposits will bar the company to declare any dividend during the period of non-compliance.

  6. Separate Bank Account • A Separate Account is to be opened in a scheduled bank where the amount of dividend including interim dividend shall be deposited within 5 days from the date of declaration of such dividend.

  7. Unpaid Dividend Account • If not paid or claimed within 30 days from the date of Declaration, then the company shall within 7 days from the expiry of said 30 days transfer such amount to Unpaid Dividend Account. • A Special Account named Unpaid Dividend Account has to be opened with a Scheduled Bank. • The company shall within 90 days, after transferring the amount to unpaid dividend account prepare a statement containing names their last address known and unpaid dividend to be paid to each person and should place it on website of company.

  8. Investor Education Protection Fund • Any amount transferred to Unpaid Dividend Account which remains unpaid/unclaimed for a period of 7 years from the date of transfer shall be transferred along with Interest to IEPF. • Company should also sent a statement prescribing the details of such transfer. • Any claimant can claim his shares which are transferred to IEPF account as per the procedure and submission of documents.

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