State the conditions to be satisfied by a company before issuing bonus shares. Is it possible for a listed company to withdraw the decision of bonus issue once it is announced under the provisions of the Companies Act, 2

Issue of bonus share is governed by the provisions of Section 63 read along with Rule 14 of the Companies (Share Capital and Debentures) Rules, 2014. The bonus shares can be issued out of Free Reserves, Securities Premium Account or Capital Redemption Reserve Account. Bonus shares cannot be issued by capitalizing reserves created by revaluation of assets. According to Section 63, the following conditions must be satisfied before issuing bonus shares: It is authorized by its articles; It has, on the recommendation of the Board, been authorized in the general meeting of the company; It has not defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it; It has not defaulted in respect of the payment of statutory dues of the employees, such as, contributories to provident fund, gratuity and bonus; The partly paid up shares, if any outstanding on the date of allotment, are made fully paid up; It complies with such conditions as may be prescribed. Rule 14 of the Companies (Share Capital and Debentures) Rules, 2014 provides that the company which has once announced the decision of its Board recommending a bonus issue shall not subsequently withdraw the same.