The document discusses several provisions related to dividends under sections 205, 205A, 205B, 205C, 206, and 206A of the Companies Act. It summarizes that the company has declared a dividend of Rs. 160 crore from its profit of Rs. 1124 crore for the year 2011-2012 in compliance with section 205. It has also transferred more than the minimum 10% of profits amounting to Rs. 125 crore to reserves in accordance with the Companies (Transfer of Profits to Reserves) Rules, 1956. The document also analyzes that the company has complied with sections 205A and 205C by transferring unpaid dividends older than 7 years to the Investor

1. DIVIDENDS
Sections looked at:
205,205A, 205B, 205C, 206,206A, 207
1. According to 205: Dividend to be paid only out of profits
(1) No dividend shall be declared or paid by a company for any financial year except out
of the profits of the company for that year arrived at after providing for depreciation in
accordance with the provisions of sub-section
The financial summaries indicate that:
a) ₹1124 crore is the profit made by the company in the year 2011-2012, and from that
only a dividend of ₹160 crore is been paid.
Hence, compliance with the provision.
2. According to Companies (Transfer of Profits to Reserves) Rules, 1956
The company must transfer from the profits to its reserves the following minimum amount
before declaration of dividend: -

2. (i) Where the dividend proposed exceeds 10 per cent but not 12.5 per cent of the
paid-up capital, the amount to be transferred to the reserves shall not be less
than 2.5 per cent of the current profits ;
(ii) Where the dividend proposed exceeds 12.5 per cent but does not exceed 15 per
cent of the paid-up capital, the amount to be transferred to the reserves shall not
be less than 5 per cent of the current profits ;
(iii) Where the dividend proposed exceeds 15 per cent, but does not exceed 20 per
cent of the paid-up capital, the amount to be transferred to the reserves shall not
be less than 7.5 per cent of the current profits
(iv) Where the dividend proposed exceeds 20 per cent of the paid-up capital, the
amount to be transferred to reserves shall not be less than 10 per cent of the
current profits.
For the company
(i) The Directors recommend a dividend of ₹ 2 per share on 80,29,21,357 equity shares
of ₹2 each for the year 2011-12 amounting to ₹160.58 crore.
(ii) Hence, the company is giving 100% dividends
(iii) Therefore the company should transfer a minimum of 10% of profit to reserves.
(iv) The company is transferring₹125 crore to general reserves which is much greater
than 10% of ₹1124 crore(profit for the company)
(v) Hence the company complies to the provision.

3. 3. According to 205A. Unpaid dividend to be transferred to special dividend
account
(1) Where, after the commencement of the Companies (Amendment) Act, 1974 (41 of 1974),
a dividend has been declared by a company but has not been paid, 1[or claimed], within
2[thirty] days from the date of the declaration, to any shareholder entitled to the payment of
the dividend, the company shall, within seven days from the date of expiry of the said period
of 2[thirty] days, transfer the total amount of dividend which remains unpaid 3[or unclaimed]
within the said period of 2[thirty] days, to a special account to be opened by the company in
that behalf in any scheduled bank, to be called "Unpaid Dividend Account of... Company
Limited/Company (Private) Limited".
(5) Any money transferred to the unpaid dividend account of a company in pursuance of this
section which remains unpaid or unclaimed for a period of seven years from the date of such
transfer shall be transferred by the company to the Fund established under sub-section (1)
of section 205C.]( Investor Education and Protection Fund (IEPF))
For the company the Annual Report indicate :
All unclaimed dividends up to the financial year ended 31st March 1995 have been
transferred to the General Revenue Account of the Central Government Consequent to the
amendment of the companies Act, 1956, dividends that remain unclaimed for a period of

4. seven years shall be transferred to Investor Education and Protection Fund (IEPF).
Accordingly, unclaimed dividends
from the financial year ended 31st March 1996 till 31st March 2004 have been transferred by
the Company to IEPF.
Members may note that unclaimed dividend for the financial year ended 31st March 2005
shall become due for transfer to IEPF on 2nd October 2012. Members should also note that
any sum transferred to IEPF shall stand forfeited and no claim shall lie either against IEPF or
the Company. Those members, who have not encashed their dividends for the financial year
ended 31st March 2005, are requested to claim it from the Share Transfer Agents
immediately. Such of those members who have not so far claimed their dividend for the
subsequent financial years are also advised to claim it from the Share Transfer Agents.
Hence, compliance of Section 205A(1) and 205A(5)
4. According to 205C. Establishment of Investor Education and Protection
Fund
(1) The Central Government shall establish a fund to be called the Investor Education and
Protection Fund (hereafter in this section referred to as the "Fund").
(2) There shall be credited to the Fund the following amounts, namely : -
(a) Amounts in the unpaid dividend accounts of companies
Provided that no such amounts referred to in clauses (a) to (d) shall form part of the Fund
unless such amounts have remained unclaimed and unpaid for a period of seven years from
the date they became due for payment.
For the company
All unclaimed dividends up to the financial year ended 31st March 1995 have been
transferred to the General Revenue Account of the Central Government Consequent to the
amendment of the companies Act, 1956, dividends that remain unclaimed for a period of
seven years shall be transferred to Investor Education and Protection Fund (IEPF).
Accordingly, unclaimed dividends
from the financial year ended 31st March 1996 till 31st March 2004 have been transferred by
the Company to IEPF.
Since 7 years have already passed since 31st March 2004, all unclaimed dividends of that
year have been transferred to IEPF.
Hence, compliance of the provision.
5. According to the Companies Act, the rate of dividend is recommended by
the Board of Directors and is declared by shareholders in the AGM.
There is a compliance of this provision as the Annual Report says
“The dividend for the year ended 31st March 2012 as recommended by the Board, if
sanctioned at the Meeting, will be paid to those members whose names appear in the
Company’s Register of Members on Thursday, 2nd August “
6. According to another provision the dividend must be paid within 30 days of
the declaration.
There is a compliance of this provision as the declaration is made on 17th August and the
proposed Dividend Payment date is 23rd August.