Zeta Ltd (ZL) wants to declare dividend out of past reserves for the year ending 2009–10. Suggest how and what percentage of dividend it can declare as per rules. The relevant details are as follows:

Paid-up equity capital ₹100 lakh, free reserves ₹40 lakh, loss of the current year ₹4 lakh. The dividend declared by the company during immediately preceding five financial years is 9%, 13%, 17%, 14% and 7.

Will your answer change if the amount of reserves is only 20 lakh?