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      Question

      Which of the following statements regardingĀ Interim

      DividendĀ isĀ FALSEĀ as per Section 123?
      A It can be declared by the Board of Directors during any financial year or at any time during the period from the closure of the financial year till the holding of the AGM. Correct Answer Incorrect Answer
      B It is declared out of the surplus in the profit and loss account or out of profits of the financial year in which it is sought to be declared. Correct Answer Incorrect Answer
      C If the company has incurred a loss during the current financial year up to the end of the quarter immediately preceding the date of declaration, the interim dividend cannot be declared at a rate higher than the average dividends declared during the last three financial years. Correct Answer Incorrect Answer
      D Once an interim dividend is declared by the Board, it has to be paid before the Annaul General Meeting for the financial year. Correct Answer Incorrect Answer
      E The amount of the dividend, including interim dividend, shall be deposited in a scheduled bank in a separate account within 5 days from the date of declaration. Correct Answer Incorrect Answer

      Solution

      The timelines for payment of divided (final and interim) apply, once it has been declared and transferred in the schedule bank. As such it has to be paid in 30 days.

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