dividend
This query is : Resolved
ajay arora
(Querist)
17 December 2010
if company annouces dividend 10% on capital on 30/04/2010,company capital is 10 crore as on 31.03.2010 and 11 crore as on 15/04/2010.what will be the capital for dividend.
Jayashree S Iyer
(Expert)
17 December 2010
It depends on the record date announced by the company.
ajay arora
(Querist)
17 December 2010
record date is 1/09/2010,
Jayashree S Iyer
(Expert)
17 December 2010
Strange. Company annouces the dividend on 30/4/2010 and the record date is 01/09/2010. Generally the record date is prior to declaration date??????
ajay arora
(Querist)
17 December 2010
sir ...wts its section and board annouces the dividend on 30/04/2010...agm is on 22/09/2010 which is the decleration date ..then what capital we consider.
Ajay Mishra
(Expert)
17 December 2010
Hi
Every country imposes some restrictions on payment of dividend, as dividend distribution affects the economic conditions of the company, shareholders and other parties of the society. In India too, a number of restrictions has been placed on dividend payment by Indian Companies Act, e.g. there are restrictions on sources from which dividend can be paid, the time period within which dividend is to paid, the manner in which unclaimed dividend is to be dispatched etc.
(1) Sources of Dividend: The Company can declare dividend for the financial year out of the following sources according to Sec. 205:
(i) Out of the profits of the company for that year arrived at after providing for depreciation according to law or
(ii) Out of the profits of the company for any previous financial year or years arrived at after providing for depreciation, remaining undistributed or out of both or
(iii) Out of moneys provided by the Government for the payment of dividend in pursuance of guarantee given by that government.
(2) Calculation of Profit: There are some restrictions on calculation of profit available for distribution as dividend. Before declaring dividend, it is compulsory for companies to provide for depreciation on its fixed assets. If depreciation has not been provided for any previous year, it has to be first provided before paying dividend. If the company has incurred any loss in any previous financial years, then the amount of loss has also to be written off.
In short, if final dividend is declared or paid on AGM, in that case details of profit will be taken as on March 31, 2010 and list of shareholders will be count before the record date (book closure date).
Regards
Every country imposes some restrictions on payment of dividend, as dividend distribution affects the economic conditions of the company, shareholders and other parties of the society. In India too, a number of restrictions has been placed on dividend payment by Indian Companies Act, e.g. there are restrictions on sources from which dividend can be paid, the time period within which dividend is to paid, the manner in which unclaimed dividend is to be dispatched etc.
(1) Sources of Dividend: The Company can declare dividend for the financial year out of the following sources according to Sec. 205:
(i) Out of the profits of the company for that year arrived at after providing for depreciation according to law or
(ii) Out of the profits of the company for any previous financial year or years arrived at after providing for depreciation, remaining undistributed or out of both or
(iii) Out of moneys provided by the Government for the payment of dividend in pursuance of guarantee given by that government.
(2) Calculation of Profit: There are some restrictions on calculation of profit available for distribution as dividend. Before declaring dividend, it is compulsory for companies to provide for depreciation on its fixed assets. If depreciation has not been provided for any previous year, it has to be first provided before paying dividend. If the company has incurred any loss in any previous financial years, then the amount of loss has also to be written off.
In short, if final dividend is declared or paid on AGM, in that case details of profit will be taken as on March 31, 2010 and list of shareholders will be count before the record date (book closure date).
Regards
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