Question 05

a) On 31 July 2015, the Directors of Clove Engineering Limited (CEL), a listed company,

declared an interim dividend of Rs. 5 per share. However, before making payment of the

dividend, the company suffered huge losses due to a massive fire in the factory. The CFO

has informed the board of directors about CEL's inability to pay the dividend in time.

Under the provisions of the Companies Act, 2017 briefly describe:

I. When an interim dividend is deemed to have been declared by CEL.

II. The consequences of non-payment of dividend within the stipulated time.

III. The circumstances under which CEL may not be responsible to pay dividend to certain

shareholders