Providing for proposed dividend in profit and loss account and showing the same under the head “Current liabilities and provisions” in balance sheet ‑ Whether statutory obligation breach of which invites prosecution - Companies Law - Letter: No. 3/124/75‑CL‑V,

Letter: No. 3/124/75 ‑ CL ‑ V, dated 26 ‑ 2 ‑ 1977. Subject:- Providing for proposed dividend in profit and loss account and showing the same under the head Current liabilities and provisions in balance sheet ‑ Whether statutory obligation breach of which invites prosecution Some representations were received from the Chambers of Commerce against the prosecution proceedings launched for contravention of Schedule VI read with section 211 in respect of non‑provisions for proposed dividend in the balance sheet and profit and loss account by certain companies. The matter has been carefully considered in the Department and it has now been decided to withdraw the prosecution already launched against the defaulting companies. It has also been decided to take a lenient view against those companies who have not made provisions for proposed dividend in their balance sheet and profit and loss accounts prepared before 15‑12‑1976. However, if no provision for proposed dividend is made in the accounts prepared after this date, suitable action for initiating prosecution proceedings may be taken against the defaulting companies for contravention of Schedule VI read with section 211.