Accountancy
Laws in practice -- II
THE agenda for the meeting of the board of directors of Successful Enterprises Ltd held on March 20, 2001, for adopting the annual accounts for the year ended December 31, 2000, included an item relating to payment of dividend. At the meeting it became a pparent that the profits made during the year ended December 31, 2000, were inadequate to declare dividend. The board was keen to maintain the rate of 20 per cent dividend on the equity shares as declared in the previous years so as to maintain the image of the company. The company has some accumulated profits earned in previous years, which were transferred to reserves. Advise the company as to how it should go about achieving the objective of paying dividend at the rate of 20 per cent on the equity sh ares.

Corporate
Even-handed doles
DONATIONS paid include donation to the following persons for political purpose under Section 293A of the Companies Act: i) DMK -- Rs 50,000; ii) AIADMK -- Rs 50,000; iii) MDMK -- Rs 50,000; and iv) BJP -- Rs 50,000. (Notes to accounts, Thiagarajar Mills Ltd, Madurai)

Economy
The transfer-pricing game
WITH world economies opening up, the natural process of global specialisation among countries based on comparative advantages has accelerated. MNCs are setting up manufacturing or developing bases in countries that offer these advantages. The WTO regime has further widened the markets of companies.

Taxation
The sick refuge
I UNDERSTAND that the BIFR is being increasingly flooded with applications from corporates for being declared as a `sick company'. Is not sickness some thing which is detestable? Why then are corporates courting sickness, as it were?

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