Voluntary transfer to reserves permitted above cap provided dividend maintenance and average dividend safeguards are met. Rule 3 allows voluntary transfers to reserves above the baseline provided that if a dividend is declared the company ensures a minimum distribution maintaining either the average dividend rate over the three preceding years or, where bonus shares were issued, the average dividend amount over those years, subject to an exception when net profits after tax fall by twenty percent or more relative to the average of the two preceding years; if no dividend is declared, the transfer from current profits must be lower than the three year average dividend amount.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Voluntary transfer to reserves permitted above cap provided dividend maintenance and average dividend safeguards are met.
Rule 3 allows voluntary transfers to reserves above the baseline provided that if a dividend is declared the company ensures a minimum distribution maintaining either the average dividend rate over the three preceding years or, where bonus shares were issued, the average dividend amount over those years, subject to an exception when net profits after tax fall by twenty percent or more relative to the average of the two preceding years; if no dividend is declared, the transfer from current profits must be lower than the three year average dividend amount.
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