Q.As per Section 2(35) of the Companies Act, 2013, the term 'dividend' includes:
(A) only the final dividend declared at the Annual General Meeting
(B) any interim dividend
(C) only dividend paid to preference shareholders
(D) only bonus shares issued to shareholders

The underlined word Preference is wrong; the correct word is Equity. Corrected sentence: Equity shareholders get dividends from residual profits.

A company’s profits are distributed in a fixed order of priority.

• Preference shareholders receive a fixed rate of dividend, and it is paid before equity shareholders.

• Equity shareholders are the real owners who bear the greatest risk; they receive dividend only out of the residual (remaining) profits left after preference dividend is paid, and their dividend rate is not fixed.

• Therefore, the residual profits are shared by equity shareholders, not preference shareholders.

The word/term is Interim Dividend.

A dividend paid in the middle of a financial year, that is, between two annual general meetings, is called an interim dividend. It is declared by the Board of Directors when the company has earned sufficient profits during the year and wishes to reward shareholders without waiting for the year to end.

This is different from the final dividend, which is recommended by the Board and declared by the shareholders at the AGM after the annual accounts are finalised. Since the statement describes a dividend declared between two AGMs, the correct term is interim dividend.