Hi All,
I have my final exams in May,16 and I am trying to study Corporate Law on my own.
I had a query.. hope sm1 can help.
As per Section 123(1) for distribution of Dividend out of Reserves, Rule 3(1) says: “The rate of dividend declared shall not exceed the average of the rates at which dividend was declared by it in the three years immediately preceding that year”.
I can draw three different meanings. Please help me to know which one is correct?
Example:
| Financial Years | Declared |
| 2010-11 | 4% |
| 2011-12 | 0% |
| 2012-13 | 3% |
| 2013-14 | 7% |
what will be the limit for rate of Dividend:-
a) (3 + 7)/3 = 3.33%
b) (4 + 3 + 7)/3 = 4.67%
c) (3 + 7)/2 = 5%
Thank You.
