dividend out of reserves sum

Follow rule 3 companies (Dividend) rules 2014. 

In give case company wants to declare dividend more than profit. You can give dividend out of free reserves by complying rule 3. 


Average Rate of dividend declare by company in last 3FY shall not be more than current year. 
less than or =1/10 of Paid up capital + Free reserves.
After withdrawing Amount from free reserves Balance shall not fall below 15% of Paid up share capital
after setoff all losses of current year


Out of 4 steps of rule 3 need can declare dividend which ever is less. subject to setting off losses of current year if any.. 

Note: Company should not be default under section 73 & 74 otherwise Equity Shareholder will not be eligible to get dividend.