参考答案：

 Dividends are the return received by shareholders in respect of their investment in a company. Subject to any restriction in the memorandum of association, every company has the implied power to apply its profits in the distribution of dividend payments to its shareholders. Although the directors recommend the level of dividend payment, it is for the company in a general meeting to declare the dividend. This is one of the items conducted at the annual general meeting. If the directors decline to recommend a dividend then it is not open to the general meeting to overrule that decision and declare a dividend. The longstanding common law rule is that dividends must not be paid out of capital (Flitcroft’s case AHHB). The current rules relating to the payment of dividends were introduced by the Companies Act AIH0, now the Companies Act AIHE. These rules represent a considerable strengthening of the previous situation, which was notoriously lax in the way in which dividend payments could be determined. The present Act governs, and imposes restrictions on distributions made by all companies, both public and private. Section BFC defines distribution as any payment, cash or otherwise, of a company’s assets to its members, except for the categories stated in the section, which include the issue of bonus shares, the redemption of shares, authorised reductions of share capital, and the distribution of assets on winding up. Section BFC also provides the basic condition for distribution applying to all companies, which, in essence, is that they must have profits available for that purpose. This term is defined as accumulated realised profits less accumulated realised losses, with profit or loss being either revenue or capital in origin. It is important to note that the use of the term accumulated means that any previous years’ losses must be included in determining the distributable surplus, and that the requirement that profits be realised prevents payment from purely paper profit resulting from the mere revaluation of assets. Section BGE provides that all losses are to be treated as realised except where a general revaluation of all fixed (non-current) assets has taken place.