Mr.BRMohanty, around two-decade back; along with two of his elder brothers and few friends, who are pharma and chemical engineers by profession promoted two companies; first being Well-Mount Limited (WML) dealing in wellness products and pharmaceuticals ; whereas other is Tex-Mount Limited (TML) dealing in textile products. During these two decades, both WML and TML has grown magnificently as both the sectors expanded beyond imagination. Both companies went public and stock of same listed on leading stock exchanges of countries.

TML did well in the past and emerged as a major export unit but in recent years the textile sector witness stiff competition due to new entrants. The increased cost of the workforce and other input materials is also made sector unprofitable and recent lockdown hit the sector further adversely.

TML’s bottom line for the current financial year is red. TML was declaring dividends since the very first year of operation and willing to continue the tradition considering dividend as signalling effect to an investor for valuation purpose. Rate of dividend for the recent five years was 9%, 10%, 8%, 5% and 2% (9% being five years ago and 2% being the previous year) respectively. The management at TML decided to declare dividends out of the profit of previous years. TML deals in export hence came under the scanner of enforcement authority, who seek financial statements and books of accounts of TML for scrutiny for the last 10 preceding financial years. In response to notice, TML furnish financial statements and books of accounts for last 8 immediately preceding financial years only, stating as per its Article of Association; TML is required to maintain and keep the books of accounts for 8 immediately preceding financial years only and that too without any record of vouchers pertaining to such accounts.

WML is doing well, it seizes outbreak of COVID-19 as a business opportunity and registers significant growth in both top and bottom line. For the past many years, WML declare a dividend at a constant rate of 20%. During the financial year 2019-20, WML earns a profit of 580 Crores.

Board of directors of WML declares 25% dividend without transferring any % to reserve on 15th June, 2020. On 14th July, 2020 some of the amount remaining unpaid, due to operation of law; has been transferred to unpaid dividend account on 20th July, 2020. CA. Dev was appointed as auditor under section 139 of Companies Act, 2013 of WML in individual capacity during 17th AGM for against the financial year 2018-19.

In case of TML, which of the following statements are correct regarding the declaration of dividend?

Mr.BRMohanty, around two-decade back; along with two of his elder brothers and few friends, who are pharma and chemical engineers by profession promoted two companies; first being Well-Mount Limited (WML) dealing in wellness products and pharmaceuticals ; whereas other is Tex-Mount Limited (TML) dealing in textile products. During these two decades, both WML and TML has grown magnificently as both the sectors expanded beyond imagination. Both companies went public and stock of same listed on leading stock exchanges of countries.

TML did well in the past and emerged as a major export unit but in recent years the textile sector witness stiff competition due to new entrants. The increased cost of the workforce and other input materials is also made sector unprofitable and recent lockdown hit the sector further adversely.

TML’s bottom line for the current financial year is red. TML was declaring dividends since the very first year of operation and willing to continue the tradition considering dividend as signalling effect to an investor for valuation purpose. Rate of dividend for the recent five years was 9%, 10%, 8%, 5% and 2% (9% being five years ago and 2% being the previous year) respectively. The management at TML decided to declare dividends out of the profit of previous years. TML deals in export hence came under the scanner of enforcement authority, who seek financial statements and books of accounts of TML for scrutiny for the last 10 preceding financial years. In response to notice, TML furnish financial statements and books of accounts for last 8 immediately preceding financial years only, stating as per its Article of Association; TML is required to maintain and keep the books of accounts for 8 immediately preceding financial years only and that too without any record of vouchers pertaining to such accounts.

WML is doing well, it seizes outbreak of COVID-19 as a business opportunity and registers significant growth in both top and bottom line. For the past many years, WML declare a dividend at a constant rate of 20%. During the financial year 2019-20, WML earns a profit of 580 Crores.

Board of directors of WML declares 25% dividend without transferring any % to reserve on 15th June, 2020. On 14th July, 2020 some of the amount remaining unpaid, due to operation of law; has been transferred to unpaid dividend account on 20th July, 2020. CA. Dev was appointed as auditor under section 139 of Companies Act, 2013 of WML in individual capacity during 17th AGM for against the financial year 2018-19.

CA. Dev, who is the auditor of WML have to vacate the office of the auditor in and can be reappointed again only in

Mr.BRMohanty, around two-decade back; along with two of his elder brothers and few friends, who are pharma and chemical engineers by profession promoted two companies; first being Well-Mount Limited (WML) dealing in wellness products and pharmaceuticals ; whereas other is Tex-Mount Limited (TML) dealing in textile products. During these two decades, both WML and TML has grown magnificently as both the sectors expanded beyond imagination. Both companies went public and stock of same listed on leading stock exchanges of countries.

TML did well in the past and emerged as a major export unit but in recent years the textile sector witness stiff competition due to new entrants. The increased cost of the workforce and other input materials is also made sector unprofitable and recent lockdown hit the sector further adversely.

TML’s bottom line for the current financial year is red. TML was declaring dividends since the very first year of operation and willing to continue the tradition considering dividend as signalling effect to an investor for valuation purpose. Rate of dividend for the recent five years was 9%, 10%, 8%, 5% and 2% (9% being five years ago and 2% being the previous year) respectively. The management at TML decided to declare dividends out of the profit of previous years. TML deals in export hence came under the scanner of enforcement authority, who seek financial statements and books of accounts of TML for scrutiny for the last 10 preceding financial years. In response to notice, TML furnish financial statements and books of accounts for last 8 immediately preceding financial years only, stating as per its Article of Association; TML is required to maintain and keep the books of accounts for 8 immediately preceding financial years only and that too without any record of vouchers pertaining to such accounts.

WML is doing well, it seizes outbreak of COVID-19 as a business opportunity and registers significant growth in both top and bottom line. For the past many years, WML declare a dividend at a constant rate of 20%. During the financial year 2019-20, WML earns a profit of 580 Crores.

Board of directors of WML declares 25% dividend without transferring any % to reserve on 15th June, 2020. On 14th July, 2020 some of the amount remaining unpaid, due to operation of law; has been transferred to unpaid dividend account on 20th July, 2020. CA. Dev was appointed as auditor under section 139 of Companies Act, 2013 of WML in individual capacity during 17th AGM for against the financial year 2018-19.

In case of WML, which of the following statements is correct regarding the declaration of dividend?

Mr.BRMohanty, around two-decade back; along with two of his elder brothers and few friends, who are pharma and chemical engineers by profession promoted two companies; first being Well-Mount Limited (WML) dealing in wellness products and pharmaceuticals ; whereas other is Tex-Mount Limited (TML) dealing in textile products. During these two decades, both WML and TML has grown magnificently as both the sectors expanded beyond imagination. Both companies went public and stock of same listed on leading stock exchanges of countries.

TML did well in the past and emerged as a major export unit but in recent years the textile sector witness stiff competition due to new entrants. The increased cost of the workforce and other input materials is also made sector unprofitable and recent lockdown hit the sector further adversely.

TML’s bottom line for the current financial year is red. TML was declaring dividends since the very first year of operation and willing to continue the tradition considering dividend as signalling effect to an investor for valuation purpose. Rate of dividend for the recent five years was 9%, 10%, 8%, 5% and 2% (9% being five years ago and 2% being the previous year) respectively. The management at TML decided to declare dividends out of the profit of previous years. TML deals in export hence came under the scanner of enforcement authority, who seek financial statements and books of accounts of TML for scrutiny for the last 10 preceding financial years. In response to notice, TML furnish financial statements and books of accounts for last 8 immediately preceding financial years only, stating as per its Article of Association; TML is required to maintain and keep the books of accounts for 8 immediately preceding financial years only and that too without any record of vouchers pertaining to such accounts.

WML is doing well, it seizes outbreak of COVID-19 as a business opportunity and registers significant growth in both top and bottom line. For the past many years, WML declare a dividend at a constant rate of 20%. During the financial year 2019-20, WML earns a profit of 580 Crores.

Board of directors of WML declares 25% dividend without transferring any % to reserve on 15th June, 2020. On 14th July, 2020 some of the amount remaining unpaid, due to operation of law; has been transferred to unpaid dividend account on 20th July, 2020. CA. Dev was appointed as auditor under section 139 of Companies Act, 2013 of WML in individual capacity during 17th AGM for against the financial year 2018-19.

In case of TML, regarding maintenance and keeping the books of account; which of the following statements hold truth?

Regarding declaration and distribution of dividend by WML, which of the following statements is correct from the view of the timeline?

Shreyas Mechanics Limited owns a plot of land which was purchased long before. As the property rates are going up, it is decided to revalue the plot at fair value which is moderately ten times the original price, thus resulting in a revaluation profit of Rs. 20,00,000. The Board of Directors is keen to utilize Rs. 20,00,000 along with free reserves of Rs. 24,00,000 for declaration of dividend at the forthcoming Annual General Meeting (AGM) to be held on 28th September, 2019. Advise the company

Mr. Ajay is also director of Padmani Silk Limited (PSL). PSL was established around 25 years back as a private company operating as a micro business with 10 employees in a three- room building. During these years, the company grew exceptionally and went public and was also listed on SME exchange. PSL declares the interim dividend out of the previous year’s undistributed profit on 31st August 2020 on the occasion of the 25th anniversary of the company. PSL deposited the amount of said dividend in a separate bank account with a NBFC on 4th of September, 2020. Question-Regarding compliance for declaration and distribution of Interim dividend by PSL, which of the following statements is correct?

ABC Ltd., a listed company proposed a dividend @ 15% on equity shares for the financial year ended on 31st March 2018. The Annual General Meeting (AGM) of the company was held on 15 th July 2018 and the proposed dividend was approved and declared in the same. Due to some technical issues, dividend on 600 shares neither be paid within the time limit prescribed by the Act nor was transferred to unpaid dividend account. In such a situation which regulatory authority can take action against the company and its officers in default?

The Board of Directors of Vidyut Limited are contemplating to declare interim dividend in the last week of July, 2021 but the company has incurred loss during the current financial year up to the end of June, 2021. However, it is noted that during the previous five financial years i.e., 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21, the company had declared dividend at the rate of 8%, 9%, 12%, 11% and 10% respectively. Advise the Board as to the maximum rate at which they can declare interim dividend despite incurring loss during the current financial year.

Mr. Guru bought 40,000 shares of Real Consultancy Services (RCS) of face value 10 each out of his savings. On such shares, the final call of Rs. 2 is due but unpaid by Mr. Guru. In the meantime, RCS declared dividend at a rate of 15%. Regarding un-paid call money by Mr. Guru, in light of dividend due to him from RCS, state which of following the statements is correct?

Dividend once declared, should be paid within days from the date of declaration

Which of the following amount need not be credited to Investor Education and Protection Fund Account (IEPF)?

The authorised and paid-up share capital of Avantika Ayurvedic Products Limited is Rs.50.00 lacs divided into 5,00,000 equity shares of Rs.10 each. At its Annual General Meeting (AGM) held on 24th September, 2019, the company declared a dividend of Rs.2 per share by passing an ordinary resolution. Mention the latest date by which the amount of dividend must be deposited in a separate account maintained with a scheduled bank

The Directors of Silver tongue Solutions Limited proposed dividend at 18% on equity shares for the financial year 2018-2019. The same was approved at the Annual general body meeting held on 30th September 2019. Mr. Jagan was the holder of 2000 equity of shares on 31st March, 2019, but he transferred the shares to Mr. Rajiv on 8th August 2019. Mr. Rajiv has sent the shares together with the instrument of transfer to the company for registration of the shares in his favour only on 25th September 2019. The registration of the transfer of shares is pending on 30th September 2019. With respect to the dividend declared the correct action to be taken by the company is:

The Board of Directors of Jip Rise Pharmaceuticals Limited wish to declare interim dividend in the last week of July, 2018. The company has incurred a loss during the current financial year up to the end of June, 2018. However, it is noted that during the previous five financial years i.e., 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18, the company had declared dividend at the rate of 8%, 9%, 12%, 11% and 10% respectively. Advise the Board as to the maximum rate at which they can declare interim dividend despite incurring loss during the current financial year

Which of the following amount need not be credited to Investor Education and Protection Fund Account (IEPF)?

Dividend once declared, should be paid within days from the date of declaration.

The amount accumulated in the Investor Education and Protection Fund shall not be used for:

The authorised and paid-up share capital of Avantika Ayurvedic Products Limited is '50.00 Lakh divided into 5,00,000 equity shares of 10 each. At its Annual General Meeting (AGM) held on 24th September, 2022, the company declared a dividend of 2 per share by passing an ordinary resolution. Mention the Latest date by which the amount of dividend must be deposited in a separate account maintained with a scheduled bank

Annual General meeting of the shareholders of M Limited was convened on 1st September 2023, in which the annual accounts of the company were presented before the shareholders. The shareholders have approved dividend @ 3%.

By what date should the amount be deposited in a separate account maintained with the scheduled bank for dividend purposes?

The Board of Directors of Vidyut Limited are contemplating to declare interim dividend in the Last week of July, 2022 but the company has incurred Loss during the current financial year up to the end of June, 2022. However, it is noted that during the previous five financial years i.e., 2017-18, 2018-19, 2019-20, 2020-21 and 2021-2022 the company had declared dividend at the rate of 8%, 9%, 12%, 11 % and 10% respectively. Advise the Board as to the maximum rate at which they can declare interim dividend despite incurring Loss during the current financial year.

Annual General meeting of the shareholders of A Limited was convened on 26th August, 2023, in which the annual accounts of the company were presented before the shareholders. The shareholders have approved dividend @ 10%.

By what date should the amount be deposited in a separate account maintained with the scheduled bank for dividend purposes?

Mr. Guru bought 40,000 shares of Real Consultancy Services (RCS) of face value 10 each out of his savings. On such shares, the final call of Rs. 2 is due but unpaid by Mr. Guru. In the meantime, RCS declared dividend at a rate of 15%. Regarding un-paid call money by Mr. Guru, in light of dividend due to him from RCS, state which of following the statements is correct?

Shreyas Mechanics Limited owns a plot of land which was purchased long before. As the property rates are going up, it is decided to revalue the plot at fair value which is moderately ten times the original price, thus resulting in a revaluation profit of Rs. 20,00,000. The Board of Directors is keen to utilize Rs. 20,00,000 along with free reserves of Rs. 24,00,000 for declaration of dividend at the forthcoming Annual General Meeting (AGM) to be held on 28th September, 2019. Advise the company.

Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures which matured four years back. However, 1000 such debentures of Rs. 100 each are still remaining unclaimed and unpaid even after the maturity. State the period after which the company needs to transfer them to Investor Education and Protection Fund (IEPF) if they remain unclaimed and unpaid.

Shreyas Mechanics Limited owns a plot of land which was purchased long before. As the property rates are going up, it is decided to revalue the plot at fair value which is moderately ten times the original price, thus resulting in a revaluation profit of Rs. 20,00,000. The Board of Directors is keen to utilize Rs. 20,00,000 along with free reserves of Rs. 24,00,000 for declaration of dividend at the forthcoming Annual General Meeting (AGM) to be held on 28th September, 2019. Advise the company.

In how many days from the date of declaration of interim dividend, it shall be deposited in a separate bank account

ABC Ltd., a listed company proposed a dividend @ 15% on equity shares for the financial year ended on 31st March 2018. The Annual General Meeting (AGM) of the company was held on 15th July 2018 and the proposed dividend was approved and declared in the same. Due to some technical issues, dividend on 600 shares neither be paid within the time limit prescribed by the Act nor was transferred to unpaid dividend account. In such a situation which regulatory authority can take action against the company and its officers in default?

Which one of the following required ordinary resolution?

Dividend once declared, should be paid within_____________ days from the date of declaration

Which of the following amount is not credited to IEPF Account?

The authorised and paid-up share capital of Avantika Ayurvedic Products Limited is Rs. 50.00 lacs divided into 5,00,000 equity shares of Rs. 10 each. At its Annual General Meeting (AGM) held on 24th September, 2019, the company declared a dividend of Rs. 2 per share by passing an ordinary resolution. Mention the latest date by which the amount of dividend must be deposited in a separate account maintained with a scheduled bank

The Directors of Silver tongue Solutions Limited proposed dividend at 18% on equity shares for the f inancial year 2018-2019. The same was approved in the Annual general body meeting held on 30th September 2019. The Directors declared the approved dividends. Mr. Jagan was the holder of 2000 equity of shares on 31st March, 2019, but he transferred the shares to Mr. Rajiv on 8th August 2019. Mr. Rajiv has sent the shares together with the instrument of transfer to the company for registration of the shares in his favour only on 25th September 2019. The registration of the transfer of shares is pending on 30th September 2019. With respect to the dividend declared the correct action to be taken by the company is:

The Board of Directors of Jip Rise Pharmaceuticals Limited are contemplating to declare interim dividend in the last week of July, 2018 but the company has incurred loss during the current financial year up to the end of June, 2018. However, it is noted that during the previous five financial years i.e., 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18, the company had declared dividend at the rate of 8%, 9%, 12%, 11% and 10% respectively. Advise the Board as to the maximum rate at which they can declare interim dividend despite incurring loss during the current financial year.

The Board of Directors of LESCO Pharmaceuticals Limited (hereinafter referred to as “company”) were meeting again in the month of May 2019 for the discussion of two important agenda which had a direct relation to the ensuing Annual General Meeting scheduled for 30th September 2019. The first Agenda was related to the authentication of financial statements and the second one was in connection with Dividend. Although the first item in the agenda did not take much time and necessary Board resolution was passed, the second agenda was a matter of concern for the directors.

Ms. Sunita, one of the directors proposed that since the company had not made any profits during the year, it would not be appropriate to declare any dividend for the financial year 2018-19. However, all other directors felt that last year’s rate of dividend of 5% should be maintained and the same should at least be paid this year

to keep the shareholders happy. Ms. Sunita again objected by saying that the legal provisions as envisaged under Section 123 of the Companies Act, 2013 clearly states that dividend by a company for any financial year can be paid or declared only out of the profits of the company of that year and since there was no profit there was no legal compulsion to pay dividend. She strongly contended that paying dividend was a matter of financial choice by the Board of Directors and accordingly, the board should take an informed decision. The priority for the Board is to ensure that cash flow is maintained first and then the “happiness” of the Shareholders be considered.

Another director, Mr. Robinder suggested that the company had made a substantial gain on revaluation of assets and if that would be considered then there would be sufficient profits for declaration of dividends out of such gain.

Finally, the Chairman-cum-Managing Director, Mr. Ramesh interfered and suggested that perhaps there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of profits and that the Company Secretary, Ms. Ameeka should work out the possibilities and all legal aspects connected and then

call for another Board Meeting for finalising the payment of Dividend. The meeting then ended with a vote of thanks to the Chair.

Based on the discussions in the Board Meeting of the Company, which of the following is a correct statement relating to the source for payment of Dividend by the Company:

The Board of Directors of LESCO Pharmaceuticals Limited (hereinafter referred to as “company”) were meeting again in the month of May 2019 for the discussion of two important agenda which had a direct relation to the ensuing Annual General Meeting scheduled for 30th September 2019. The first Agenda was related to the authentication of financial statements and the second one was in connection with Dividend. Although the first item in the agenda did not take much time and necessary Board resolution was passed, the second agenda was a matter of concern for the directors.

Ms. Sunita, one of the directors proposed that since the company had not made any profits during the year, it would not be appropriate to declare any dividend for the financial year 2018-19. However, all other directors felt that last year’s rate of dividend of 5% should be maintained and the same should at least be paid this year

to keep the shareholders happy. Ms. Sunita again objected by saying that the legal provisions as envisaged under Section 123 of the Companies Act, 2013 clearly states that dividend by a company for any financial year can be paid or declared only out of the profits of the company of that year and since there was no profit there was no legal compulsion to pay dividend. She strongly contended that paying dividend was a matter of financial choice by the Board of Directors and accordingly, the board should take an informed decision. The priority for the Board is to ensure that cash flow is maintained first and then the “happiness” of the Shareholders be considered.

Another director, Mr. Robinder suggested that the company had made a substantial gain on revaluation of assets and if that would be considered then there would be sufficient profits for declaration of dividends out of such gain.

Finally, the Chairman-cum-Managing Director, Mr. Ramesh interfered and suggested that perhaps there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of profits and that the Company Secretary, Ms. Ameeka should work out the possibilities and all legal aspects connected and then

call for another Board Meeting for finalising the payment of Dividend. The meeting then ended with a vote of thanks to the Chair.

With reference to claim made by Ms. Sunita that Dividend could only be paid or declared out of profits and no other source, which of the following would you completely agree or partly agree?

The Board of Directors of LESCO Pharmaceuticals Limited (hereinafter referred to as “company”) were meeting again in the month of May 2019 for the discussion of two important agenda which had a direct relation to the ensuing Annual General Meeting scheduled for 30th September 2019. The first Agenda was related to the authentication of financial statements and the second one was in connection with Dividend. Although the first item in the agenda did not take much time and necessary Board resolution was passed, the second agenda was a matter of concern for the directors.

Ms. Sunita, one of the directors proposed that since the company had not made any profits during the year, it would not be appropriate to declare any dividend for the financial year 2018-19. However, all other directors felt that last year’s rate of dividend of 5% should be maintained and the same should at least be paid this year

to keep the shareholders happy. Ms. Sunita again objected by saying that the legal provisions as envisaged under Section 123 of the Companies Act, 2013 clearly states that dividend by a company for any financial year can be paid or declared only out of the profits of the company of that year and since there was no profit there was no legal compulsion to pay dividend. She strongly contended that paying dividend was a matter of financial choice by the Board of Directors and accordingly, the board should take an informed decision. The priority for the Board is to ensure that cash flow is maintained first and then the “happiness” of the Shareholders be considered.

Another director, Mr. Robinder suggested that the company had made a substantial gain on revaluation of assets and if that would be considered then there would be sufficient profits for declaration of dividends out of such gain.

Finally, the Chairman-cum-Managing Director, Mr. Ramesh interfered and suggested that perhaps there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of profits and that the Company Secretary, Ms. Ameeka should work out the possibilities and all legal aspects connected and then

call for another Board Meeting for finalising the payment of Dividend. The meeting then ended with a vote of thanks to the Chair.

Which of the option is correct with regard to the proposal made by Mr. Robinder?

The Board of Directors of LESCO Pharmaceuticals Limited (hereinafter referred to as “company”) were meeting again in the month of May 2019 for the discussion of two important agenda which had a direct relation to the ensuing Annual General Meeting scheduled for 30th September 2019. The first Agenda was related to the authentication of financial statements and the second one was in connection with Dividend. Although the first item in the agenda did not take much time and necessary Board resolution was passed, the second agenda was a matter of concern for the directors.

Ms. Sunita, one of the directors proposed that since the company had not made any profits during the year, it would not be appropriate to declare any dividend for the financial year 2018-19. However, all other directors felt that last year’s rate of dividend of 5% should be maintained and the same should at least be paid this year

to keep the shareholders happy. Ms. Sunita again objected by saying that the legal provisions as envisaged under Section 123 of the Companies Act, 2013 clearly states that dividend by a company for any financial year can be paid or declared only out of the profits of the company of that year and since there was no profit there was no legal compulsion to pay dividend. She strongly contended that paying dividend was a matter of financial choice by the Board of Directors and accordingly, the board should take an informed decision. The priority for the Board is to ensure that cash flow is maintained first and then the “happiness” of the Shareholders be considered.

Another director, Mr. Robinder suggested that the company had made a substantial gain on revaluation of assets and if that would be considered then there would be sufficient profits for declaration of dividends out of such gain.

Finally, the Chairman-cum-Managing Director, Mr. Ramesh interfered and suggested that perhaps there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of profits and that the Company Secretary, Ms. Ameeka should work out the possibilities and all legal aspects connected and then

call for another Board Meeting for finalising the payment of Dividend. The meeting then ended with a vote of thanks to the Chair.

As per the Chairman-cum-Managing Director, Mr. Ramesh, there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of profits. Which of the following is correct with respect to the rate of dividend in such cases?

The Board of Directors of LESCO Pharmaceuticals Limited (hereinafter referred to as “company”) were meeting again in the month of May 2019 for the discussion of two important agenda which had a direct relation to the ensuing Annual General Meeting scheduled for 30th September 2019. The first Agenda was related to the authentication of financial statements and the second one was in connection with Dividend. Although the first item in the agenda did not take much time and necessary Board resolution was passed, the second agenda was a matter of concern for the directors.

Ms. Sunita, one of the directors proposed that since the company had not made any profits during the year, it would not be appropriate to declare any dividend for the financial year 2018-19. However, all other directors felt that last year’s rate of dividend of 5% should be maintained and the same should at least be paid this year

to keep the shareholders happy. Ms. Sunita again objected by saying that the legal provisions as envisaged under Section 123 of the Companies Act, 2013 clearly states that dividend by a company for any financial year can be paid or declared only out of the profits of the company of that year and since there was no profit there was no legal compulsion to pay dividend. She strongly contended that paying dividend was a matter of financial choice by the Board of Directors and accordingly, the board should take an informed decision. The priority for the Board is to ensure that cash flow is maintained first and then the “happiness” of the Shareholders be considered.

Another director, Mr. Robinder suggested that the company had made a substantial gain on revaluation of assets and if that would be considered then there would be sufficient profits for declaration of dividends out of such gain.

Finally, the Chairman-cum-Managing Director, Mr. Ramesh interfered and suggested that perhaps there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of profits and that the Company Secretary, Ms. Ameeka should work out the possibilities and all legal aspects connected and then

call for another Board Meeting for finalising the payment of Dividend. The meeting then ended with a vote of thanks to the Chair.

According to the Chairman-cum-Managing Director, Mr. Ramesh, there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of profits, which of the following is correct with respect to the amount that can be drawn from such accumulated profits of the previous year(s)?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2020. Despite the Covid-19 pandemic, the company results for the first quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of financial year 2019-20.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the confidence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors.

Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Profits earned in the financial year 2019-20

(b) Out of Profits earned in the financial year 2020-21 (From the Q-1 ending 30th June 2020)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clarified that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any

financial year and at any time during the period from the closure of the financial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2020, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial

Year 19-20 were already approved by the Board of Directors in meeting held on 10th May 2020 and the duly authenticated financial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 19-20, it is implied that the annual accounts were not yet

adopted by the shareholders and hence there was still some scope for paying interim dividend out of profits of FY 19-20.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2020, answer the following questions:

Based on the recommendations of Mr. Sanjay, one of the directors, which of the following is correct with regard to the source out of which the interim dividend may be paid?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2020. Despite the Covid-19 pandemic, the company results for the first quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of financial year 2019-20.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the confidence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors.

Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Profits earned in the financial year 2019-20

(b) Out of Profits earned in the financial year 2020-21 (From the Q-1 ending 30th June 2020)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clarified that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any

financial year and at any time during the period from the closure of the financial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2020, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial

Year 19-20 were already approved by the Board of Directors in meeting held on 10th May 2020 and the duly authenticated financial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 19-20, it is implied that the annual accounts were not yet

adopted by the shareholders and hence there was still some scope for paying interim dividend out of profits of FY 19-20.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2020, answer the following questions:

Going by the facts of the case, if the interim dividend of the company was declared in the meeting dated 10th July 2020, then by what date should the amount be deposited in a separate account maintained with the scheduled bank for dividend purposes?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2020. Despite the Covid-19 pandemic, the company results for the first quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of financial year 2019-20.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the confidence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors.

Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Profits earned in the financial year 2019-20

(b) Out of Profits earned in the financial year 2020-21 (From the Q-1 ending 30th June 2020)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clarified that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any

financial year and at any time during the period from the closure of the financial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2020, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial

Year 19-20 were already approved by the Board of Directors in meeting held on 10th May 2020 and the duly authenticated financial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 19-20, it is implied that the annual accounts were not yet

adopted by the shareholders and hence there was still some scope for paying interim dividend out of profits of FY 19-20.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2020, answer the following questions:

Which of the option is correct with regard to ratification of the payment of dividend?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2020. Despite the Covid-19 pandemic, the company results for the first quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of financial year 2019-20.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the confidence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors.

Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Profits earned in the financial year 2019-20

(b) Out of Profits earned in the financial year 2020-21 (From the Q-1 ending 30th June 2020)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clarified that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any

financial year and at any time during the period from the closure of the financial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2020, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial

Year 19-20 were already approved by the Board of Directors in meeting held on 10th May 2020 and the duly authenticated financial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 19-20, it is implied that the annual accounts were not yet

adopted by the shareholders and hence there was still some scope for paying interim dividend out of profits of FY 19-20.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2020, answer the following questions:

In case the company would have incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, then what should be the rate of the interim dividend?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2020. Despite the Covid-19 pandemic, the company results for the first quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of financial year 2019-20.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the confidence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors.

Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Profits earned in the financial year 2019-20

(b) Out of Profits earned in the financial year 2020-21 (From the Q-1 ending 30th June 2020)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clarified that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any

financial year and at any time during the period from the closure of the financial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2020, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial

Year 19-20 were already approved by the Board of Directors in meeting held on 10th May 2020 and the duly authenticated financial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 19-20, it is implied that the annual accounts were not yet

adopted by the shareholders and hence there was still some scope for paying interim dividend out of profits of FY 19-20.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2020, answer the following questions:

By what date should the interim dividend declared in the meeting held on 10th July 2020 be paid to the members of the company?

In how many years the amount of unpaid dividend account should be transferred to Investor Education and Protection Fund

XP Ltd declared 12% dividend to its Equity Shareholders. However, Company missed to transfer unpaid dividend to bank account even after 40 days from declaration of Dividend. In such case how much interest will be payable?

The rate of Dividend proposed by the Board may be _____ by the members.

Statement (1): The Declaration of dividend at an annual general meeting is an item of Ordinary Business.

Statement (2): A Company may pay dividend in proportion to the amount paid up on shares, if the company is authorized by Board.

The Dividend for any Financial year can be Declared or paid out of ___

A company shall not declare any dividend on ____, if it has failed to comply with the provisions of Section 73 or Section 74

In case of Joint Holders, the dividend shall be paid to ____

The amount of dividend shall be deposited by the company in ____ in a separate account within _____ of declaration of such dividend.

If a Company fails to transfer the unpaid or unclaimed dividend to the Unpaid Dividend Account, the company shall be liable to pay interest @_____ per annum.

Any money transferred to the Unpaid Dividend Account which remains unpaid for ____ from the date of such transfer shall be transferred by the company, along with interest accrued, if any, to the ‘Investor Education and Protection Fund’.

All such shares in respect of which dividend has not been paid or claimed for __ shall be transferred by the company in the name of Investor Education and Protection fund

The Central Government shall constitute, by noti cation, any Authority for administration of the Investor Education and Protection fund consisting of chairperson and such other members; not exceeding __ and a chief executive o cer, as the Central Government may appoint.

The amount accumulated in the Investor Education and Protection fund shall not be used for _____

Where a transfer deed has been delivered to the company for registration, but the transfer of shares has not yet been registered by the company, the company shall

Where a transfer deed has been delivered to the company for registration, but the transfer of shares has not been registered by the company, any o er of right shares or bonus shares made by the company __

The dividend shall be paid within days from the date of of dividend

Dividend (other than interim dividend) is declared by ___

Ram, a member of Ayodhya Ltd. had given directions to the company regarding payment of dividend, but those direction could not be complied with. Consequently, dividend could not be paid to Ram. Consider the following Statements:

Statement (1): Ayodhya Ltd. has contravened the provisions of section 127, and is therefore, liable for penalty under section 127.

Statement (2): In case a company contravenes the provisions of section 127, it shall be liable to pay simple interest@ 12% per annum during the period for which the default continues

Statement (1): The Board may declare interim dividend out of surplus in the pro t and loss account.

Statement (2): The Board may declare interim dividend out of pro ts of the nancial year for which interim dividend is sought to be prepared.

Statement (3): The Board may declare interim dividend out of pro ts generated in the nancial year till the quarter preceding the date of declaration of the interim dividend.

Statement (4): The Board may declare interim dividend out of pro ts which have been transferred to reserves.

If company has incurred loss upto__ immediately preceding the date of declaration of interim dividend then, the rate of interim dividend shall not be higher than the average rate of dividends declared by the company during immediately preceding __ nancial years.

A Ltd. proposes to declare dividend out of accumulated pro ts earned by it in the previous years and transferred to the free reserves. The rate of dividend declared by it shall not exceed the average of the rates at which dividend was declared by it in the immediately preceding nancial years, and the total amount to be drawn from reserves shall not exceed of the sum of its paid-up share capital and free reserves as per the latest audited nancial statements.

B Ltd. has incurred loss for the nancial year 2017-18. However, for the nancial year 2017-18, B Ltd. promises to declare dividend out of accumulated pro ts earned by it in the previous years and transferred to the free reserves.

Consider the following statements:

Statement (1): The total amount to be drawn from reserves shall not exceed 1/20th of the sum of its paid-up share capital and free reserves as per the latest audited nancial statements.

Statement (2): Any amount drawn from reserves shall rst be utilized to set o the losses incurred in the nancial year for which the dividend is declared.

Statement (3): The balance of reserves after withdrawal from reserves shall not fall below 10% of its paid-up share capital as per the latest audited nancial statements

Statement 1: Revocation of dividend is a valid ground for non- payment of dividend. Statement 2: Where the company ceases to be a going concern, declared dividend may be revoked

Statement 1: The accounts of the Fund shall be audited by the CAG or CA authorised by CAG.

Statement 2: The audited accounts and audit report shall be forwarded quarterly by the authority to CG.

Statement 1: Dividend is payable only in cash.

Statement 2: The dividend may be paid by cheque / dividend warrant/ electronic mode

The dividend shall be paid to -

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2022. Despite the Covid-19 pandemic, the company results for the rst quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of nancial year 2021-22.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the condence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors. Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Pro ts earned in the nancial year 2021-22 (b) Out of Pro ts earned in the nancial year 2022-23 (From the Q-1 ending 30th June 2022).

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clari ed that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any nancial year and at any time during the period from the closure of the nancial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2022, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial Year 21-22 were already approved by the Board of Directors in meeting held on 10th May 2022 and the duly authenticated nancial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 21-22, it is implied that the annual accounts were not yet adopted by the shareholders and hence there was still some scope for paying interim dividend out of pro ts of FY 21-22.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2022, answer the following questions:

Based on the recommendations of Mr. Sanjay, one of the directors, which of the following is correct with regard to the source out of which the interim dividend may be paid?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2022. Despite the Covid-19 pandemic, the company results for the rst quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of nancial year 2021-22.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the condence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors. Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Pro ts earned in the nancial year 2021-22 (b) Out of Pro ts earned in the nancial year 2022-23 (From the Q-1 ending 30th June 2022)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clari ed that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any nancial year and at any time during the period from the closure of the nancial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2022, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial Year 21-22 were already approved by the Board of Directors in meeting held on 10th May 2022 and the duly authenticated nancial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 21-22, it is implied that the annual accounts were not yet adopted by the shareholders and hence there was still some scope for paying interim dividend out of pro ts of FY 21-22.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2022, answer the following questions:

Going by the facts of the case, if the interim dividend of the company was declared in the meeting dated 10th July 2022, then by what date should the amount be deposited in a separate account maintained with the scheduled bank for dividend purposes?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2022. Despite the Covid-19 pandemic, the company results for the rst quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of nancial year 2021-22.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the condence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors. Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Pro ts earned in the nancial year 2021-22 (b) Out of Pro ts earned in the nancial year 2022-23 (From the Q-1 ending 30th June 2022)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clari ed that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any nancial year and at any time during the period from the closure of the nancial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2022, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial Year 21-22 were already approved by the Board of Directors in meeting held on 10th May 2022 and the duly authenticated nancial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 21-22, it is implied that the annual accounts were not yet adopted by the shareholders and hence there was still some scope for paying interim dividend out of pro ts of FY 21-22.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2022, answer the following questions:

Which of the option is correct with regard to rati cation of the payment of dividend?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2022. Despite the Covid-19 pandemic, the company results for the rst quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of nancial year 2021-22.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the condence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors. Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Pro ts earned in the nancial year 2021-22 (b) Out of Pro ts earned in the nancial year 2022-23 (From the Q-1 ending 30th June 2022)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clari ed that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any nancial year and at any time during the period from the closure of the nancial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2022, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial Year 21-22 were already approved by the Board of Directors in meeting held on 10th May 2022 and the duly authenticated nancial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 21-22, it is implied that the annual accounts were not yet adopted by the shareholders and hence there was still some scope for paying interim dividend out of pro ts of FY 21-22.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2022, answer the following questions:

In case the company would have incurred loss during the current nancial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, then what should be the rate of the interim dividend?

The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the “company”) were having their Board meeting on 10th July 2022. Despite the Covid-19 pandemic, the company results for the rst quarter (hereinafter referred to as “Q-1”) showed some great numbers. The maximum turnover was on account of sale of sanitisers, masks and other related products. All the directors felt jubilant about the results particularly at a time when majority of the companies were struggling to even pay salaries and meet their operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of the company was trading. It showed an upward trend despite stock prices falling for many reputed companies. The closing share price of the Company was Rs. 217.80. It was evident that the capital markets were responding well with the results of the Q-1 and also with the results of nancial year 2021-22.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim dividend be declared for the shareholders. He expressed his view that this would not only boost the condence of the investors in the wake of the Pandemic situation, but also strengthen the position of the company among its competitors. Accordingly, he proposed to declare an interim dividend of 10% and the source of interim dividend should be as follows:

(a) Out of Pro ts earned in the nancial year 2021-22 (b) Out of Pro ts earned in the nancial year 2022-23 (From the Q-1 ending 30th June 2022)

Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be declared at this point of time or should the company wait for the ensuing Annual General Meeting (AGM). Mr. Sanjay clari ed that as per Section 123(3) and 123(4) of the Companies Act, 2013, interim dividend can be declared during any nancial year and at any time during the period from the closure of the nancial year till the holding of the AGM. Since the AGM of the company was proposed to be held on 30th September 2022, the company can easily pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results of the Financial Year 21-22 were already approved by the Board of Directors in meeting held on 10th May 2022 and the duly authenticated nancial statement are presently in the process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not yet held for FY 21-22, it is implied that the annual accounts were not yet adopted by the shareholders and hence there was still some scope for paying interim dividend out of pro ts of FY 21-22.

In view of the above discussion in the Board Meeting of the Company held on 10th July 2022, answer the following questions:

By what date should the interim dividend declared in the meeting held on 10th July 2022 be paid to the members of the company

XP Ltd declared 12% dividend to its Equity Shareholders. However Company missed to transfer unpaid dividend to bank account even after 40 days from declaration of Dividend. In such case how much interest will be payable?

Mr. X is a shareholder of mark Pvt. Ltd. He transferred his shares to his daughter Ms. D, in the month of February. Registration of such instrument of transfer is still pending by the Company. In this scenario, Companies Act, 2013 state certain provisions which have to be kept in mind by the company. Which provision mentioned below in this regard is correct?

Which of the following amount is not credited to IEPF Account?

The authorised and paid-up share capital of Avantika Ayurvedic Product Limited is Rs. 50 lakhs divided into 5,00,000 equity share of Rs. 10 each. At its Annual General Meeting (AGM) held on 24th September, 2022, the company declared a dividend of Rs. 2 per share by passing an ordinary resolution. Mention the latest date by which the amount of dividend must be deposited in a scheduled bank.

The Directors of Silver Tongue solutions limited proposed dividend at 18% on equity shares for the nancial year 2021-22. The same was approved in the Annual general body meeting held on 30th September, 2022. The directors declared the approved dividends. Mr. jagan was the holder of 2,000 equity of shares on 31st March, 2022, but hi transferred the shares to Mr. Rajiv on 8th August, 2022. Mr. Rajiv has sent the shares together with the instrument of transfer to the company for registration of the shares in his favour only on 25th September, 2022. The registration of the transfer of shares is pending on 30th September, 2022. With respect to the dividend declared the correct action to be taken by the company is:

In how many days from the date of declaration of Interim dividend, it shall be deposited in a separate bank account.

After Declaration of dividend It should be paid within.

ABC Ltd., a listed company proposed a dividend @ 15% on equity shares for the nancial year ended on 31st March, 2022. The Annual General Meeting (AGM) of the company was held on 15th July, 2021 and the proposed dividend, was approved and declared in the same. Due to some technical Issues, dividend on 600 shares neither be paid within the time limit prescribed by the Act nor was transferred to unpaid dividend account. In such a situation which regulatory authority can take action against the company and its o cers in default?

Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures which matured four years back. However, 1,000 such debentures of Rs. 100 each are still remaining unclaimed and unpaid even after the maturity. State the period after which the company needs to transfer them to Investor Education and Protection Fund (IEPF) if they remain unclaimed and unpaid.

Shreyas Mechanics Limited owns a plot of land which was purchased long before. As the property rates are going up, it is decided to revalue the plot at fair value which is moderately ten times the original price, thus resulting in a revaluation pro t of Rs. 20 lakhs. The board of Directors keen to utilize Rs. 20 lakhs along with free reserves of Rs. 24 lakhs for declaration of dividend at the forthcoming Annual General Meeti.ng (AGM) to be held on 28th September, 2022. Advise the company.

The board of Directors of Vidyut Limited are contemplating to declare interim dividend in the last week of July, 2022 but the company has incurred loss during the current nancial year up to the end of June, 2022. However, it is noted that during the previous ve nancial years i.e., 2017-18, 2018-19, 2019 20, 2020- 21 and 2021-22, the company had declared dividend at the rate of 8%, 9%, 12%, 11 % and 10% respectively. Advise the Board as to the maximum rate at which they can declare interim dividend despite incurring loss during the current nancial year.

Amount to be transferred to reserves out of pro ts before any declaration of dividend is _____.

Mr. Guru bought 40,000 shares of real consultancy services (RCS) of face value 10 each out of his savings. On such shares, the nal call of Rs. 2 is due but unpaid by Mr. Guru. In the meantime, RCS declared dividend due to him from RCS, state which of the following statement is correct?

When the dividend is declared at the Annual General Meeting of the company, it is known as --

Under the Companies Act, 2013, any unpaid or unclaimed dividend shall be transferred to the Unpaid Dividend Account (UDA) within how many days from the date of declaration of dividend?

If the unpaid dividend is not transferred to the Unpaid Dividend Account within the prescribed time, what is the interest rate that the company must pay on the amount?

How long can a company retain the dividend in the Unpaid Dividend Account before transferring it to the Investor Education and Protection Fund (IEPF)?

What happens to the shares in respect of which the dividend has not been claimed for seven consecutive years?

Under Section 127, if a company fails to pay the dividend within 30 days from its declaration, it is punishable with a fine. What is the minimum fine prescribed?

A director of a company can escape punishment under Section 127 for non-payment of dividend under which of the following circumstances?

After how many years of non-claim by the shareholder does the amount of unpaid or unclaimed dividend get transferred to the Investor Education and Protection Fund (IEPF)?

Which of the following transactions is prohibited by law for funds lying in the Unpaid Dividend Account?

Under the IEPF rules, claims for unpaid dividend or shares transferred to IEPF can be made by shareholders by applying to whom?

The amount remaining unpaid in the Unpaid Dividend Account for how many years must be transferred to IEPF?

What is the consequence if a company fails to comply with the provisions of Section 124 regarding the transfer of unpaid dividend to UDA?

Under Section 124, if a dividend remains unpaid, the company is required to:

Which section of the Companies Act, 2013 deals with the transfer of unclaimed or unpaid dividend to the IEPF?

Which of the following is not a condition for exemption from punishment under Section 127?

What is the maximum penalty for the company if it fails to transfer the dividend to the Unpaid Dividend Account within the stipulated time?

The shares transferred to IEPF can be claimed back by the shareholder by submitting a claim to the:

When a dividend is declared by the company but remains unpaid for more than 30 days, which document must the company file with the Registrar?

Under the Companies Act, 2013, for non-payment of dividend within 30 days, a director may be imprisoned for a maximum term of:

Dividends remaining unpaid for more than seven years and transferred to IEPF include which of the following?

Section 124(6) of the Companies Act, 2013 mandates the transfer of shares to IEPF if:

When a company fails to comply with the requirements of UDA or IEPF transfer, who can impose penalties on the company?

The company must provide information on the unpaid dividend and the shareholders entitled to claim it on which of the following platforms?