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Kencana Bhd, is a successful Malaysian company running a number of different businesses. During its previous operating year, it has generated significant profits including profit

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Kencana Bhd, is a successful Malaysian company running a number of different businesses. During its previous operating year, it has generated significant profits including profit made from the sale of one of Its assets. Kencana Bhd's subsidiary, Nilam Sd Bhd, has also made a trading profit of RM6 million. Kencana Bhd intends to declare Its dividends based on the profits that it derived from the sale of properties and the profits made by its subsidiary. aj Advise Kencana Bhd whether the Companies Act 2016 allows such dividends to be paid. (6 marks) b) Explain to Kencane Bhd the consequences that the company and its director have to face If the company made the dividend distribution not out of profit. (4 marks) (Total: 10 marks)

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