Dividend out of past reserves

This query is : Open

Rajat (Querist)
Follow

19 October 2010 As per provisions in the companies act, it is specifically mentioned that if a company incurs loss during the year, it can still declare dividend out of past reserves provided it fulfills all the 3 conditions.

1 condition out of that is - Max dividend which a company can declare in case of loss is - Average Rate of last 5 years dividend paid or 10% of paid up capital, whichever is less

Then how come a listed company like Indiabulls Securities (Auditor - Deloitte) declared 100% dividend for FY09 even though it reported net loss for that year.

Could some expert please enlighten me with the rules for distributing dividend in case of loss.

CA Shiv

CA Shiv (Expert)
Follow

19 October 2010 I think there was a profit 6121 lacs for 31.03.2010

Rajat

Rajat (Querist)
Follow

19 October 2010 Sir, I am referring to financial year 2008-09. In FY09 company reported Net loss of Rs 12.88 cr (Loss before tax of Rs 19.68 cr). Despite this it distributed 100% dividend.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

rajkumar yadav

madhu sudan

Shivchandra Jakhotia

mohammad.asraf

Anirudh Sharma

Subscribe Now

Dividend out of past reserves

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA