Answer: (a) No (b) No (c) Within 30 days
(a) No. Under Section 123(3) of the Companies Act, 2013, the Board may declare interim dividend only out of the surplus in the Profit and Loss Account and out of profits of the financial year for which it is declared. If profits up to date are insufficient (or there is a loss up to the end of the preceding quarter), the rate of interim dividend cannot exceed the average rate declared in the three preceding financial years. Declaring ₹ 10 per share without adequate profits is not justified.
(b) No. Interim dividend is declared by the Board under Section 123(3) of the Companies Act, 2013, and can be paid only out of the surplus in the Profit and Loss Account or out of profits of the financial year in which it is declared. Free reserves can be used for dividend only when the company in general meeting declares dividend in a year of inadequate profits, subject to the Companies (Declaration and Payment of Dividend) Rules, 2014. So the Board cannot declare interim dividend out of free reserves.
(c) Dividend must be paid (or the warrant posted) within 30 days from the date of declaration. The amount must be deposited in a separate bank account within 5 days of declaration.
