Declaration of Dividend

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Can a Company Declare interim or final dividend out of profit for that financial year after depreciation when it has accumulated carry forward losses for previous years?

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    A Company cannot declare dividend, either interim or final, out of profit for the current financial year (CFY) after adjusting for depreciation when it has accumulated losses for the previous years that is not set-off.

    Relevant Provisions

    According to the fourth proviso to Section 123(1) of the Companies Act, 2013 (Act), no company shall declare dividend unless carried over previous losses and depreciation not provided in PYs are set off against profit of the company for the CFY.

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