Malaysia legislation
Section 39
Section 39
(a)
maintain a reserve fund; and
(b)
before declaring any dividend from its net profits of each year (after due provision made for taxation), transfer to its reserve fund out of the net profits of each year—
(i)
a sum equal to not less than fifty per cent of the net profits of that year, so long as the amount of the reserve fund is less than fifty per cent of its paid-up capital; or
(ii)
a sum equal to not less than twenty-five per cent of the net profits of that year, so long as the amount of
Development Financial Institutions 65
the reserve fund is fifty per cent but less than one hundred per cent of its paid-up capital.
(2)
Notwithstanding subsection (1), the Bank may specify a different portion of the net profits of each year to be transferred to the reserve fund of a prescribed institution for the purpose of ensuring that the amount of its reserve fund is sufficient for the purpose of its business and adequate in relation to its liabilities.
(3)
Notwithstanding subsection (1), the reserve fund of a prescribed institution may, with the approval of the Bank and subject to such terms and conditions as the Bank may impose, be applied in paying up any unissued shares to be issued to its members as fully paid bonus shares.
(4)
Nothing in this section shall authorize the prescribed institution to pay dividends out of its reserve fund.
(5)
(Deleted by Act A1502).
Maintenance of assets in Malaysia