Mohsin Knitwear Limited (‘MKL’), a public unlisted company, earned a substantial profi t. It declared a dividend of Rs. 5·00 per share at its annual general meeting held last week. Today, MKL has received an order from a regular customer for the supply of large quantities of knitted garments. The board of directors wants to utilise all available funds, including MKL’s profi ts, for buying raw material to meet the order. Accordingly, the board of directors wants to delay the payment of the dividends to the shareholders until completion of the order.Required:With reference to the Companies Ordinance, 1984, advise the board of directors whether the payment of dividends can be delayed. (10 marks)
