Dividends ‑ Declaration of ‑ Transfer to reserves of certain percentage of profits ‑ Queries arising from the Companies (Transfer of Profits to Reserves) Rules, 1975 and the Companies (Declaration of Dividend out of Reserves) Rules, 1975

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..... V, dated 3-8-1976. Subject:- Dividends ‑ Declaration of ‑ Transfer to reserves of certain percentage of profits ‑ Queries arising from the Companies (Transfer of Profits to Reserves) Rules, 1975 and the Companies (Declaration of Dividend out of Reserves) Rules, 1975 answered Query: On a plain reading of rule 2, it appears that no obligation is cast on compani .....

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..... the rules. It would also be difficult for companies to maintain the rate of dividend calculated at the average rate of dividend declared by the company for the three years immediately preceding the current year, where the capital base has been increased on account of issue of bonus/right shares. Answer: In regard to the Transfer of Profits to Reserves Rules, the presumption made in (a) above .....

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