Interim dividend can be declared:
AOnly at an AGM
BBy the Board, out of profits of the current financial year and out of free reserves
COnly with prior Central Government approval
DOnly by listed companies
Answer & Solution
Correct answer: B. By the Board, out of profits of the current financial year and out of free reserves
1. Section 123(3) — interim dividend can be declared by the Board out of (a) profits of the current FY up to the date of declaration, or (b) accumulated profits if loss-making, subject to conditions.
2. AGM approval is not required for interim dividend.
3. Hence (B).
_Source: ICAI BoS CA Inter Paper 2 — Declaration and Payment of Dividend_