Q.Explain Interim Dividend.

Interim dividend is a dividend declared by the Board of Directors between two AGMs, out of the current year's profits, before the year-end accounts are finalised.

Dividends are broadly of two types based on the time of declaration — interim dividend and final dividend. Interim dividend is declared by the Board of Directors of a company during a financial year, that is, between two annual general meetings, before the annual accounts are finalised.

Key features of interim dividend:

• It is declared by the Board of Directors alone; it does not require the approval of the shareholders in a general meeting at the time of declaration.
• It is paid out of the profits of the current financial year in which it is declared, or out of profits of previous years transferred to reserves, subject to the Companies Act, 2013.
• It is generally declared when the company has earned good profits during the year and the directors are confident that profits will be sufficient. …