R Company Ltd. incorporated on 16th December, 2020. The Company adopted its first financial year as from 16th December, 2020 to 31st March, 2021. The profit and loss account prepared in accordance with the Schedule III o

As per Section 123 (3) of the Companies Act, 2013, the Board of Directors of a company may declare interim dividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend sought to be declared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend. In the given case, R Company Ltd. has complied due diligence in declaring interim dividend as the Interim Dividend is going to declare by Board of directors at their meeting to be held on 25th June, 2021 before holding its first Annual General. Also the financial statement shown net profit so the interim dividend can be paid out of profits of the financial year ending 31st March, 2021.