(2)No company shall capitalise its profits or reserves for the purpose of issuing fully paid-up bonus shares under sub-section (1), unless—(a)it is authorised by its articles;(b)it has, on the recommendation of the Board, been authorised in the general meeting of the company;(c)it has not defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it;(d)it has not defaulted in respect of the payment of statutory dues of the employees, such as, contribution to provident fund, gratuity and bonus;(e)the partly paid-up shares, if any outstanding on the date of allotment, are made fully paid-up;(f)it complies with such conditions as may be prescribed.
