Following steps are to be considered, in general, while verifying payments of dividends:
Examine special provisions, if any, in the memorandum and Articles of Association regarding payment of dividends.
See that in declaring dividends, provisions of company’s rules have been complied with.
Examine the Board’s minute regarding the payments of dividends.
Verify the Shareholders’ Register and ensure that the names of all shareholders who are entitled to receive dividends have been included.
Check the computation of dividends with reference to the rate of dividends and number of shares held.
Ensure that the central bank’s permission has been obtained in case of remittance of dividends to non-resident shareholders.
See counterfoils of cheques for amounts paid to shareholders.
Verify the amount paid as dividend cross-reference to challans showing deposit of income tax deducted at source.