I shall now proceed to certain other sailent features of the Bill.

In regard to companies whosw

profits are only partly chargebale to tax, the rest being exempt, clause 4 of the Bill, as it stood before its
amendment by the select committee, provided that such portion of the dividend which was attributable
to the taxed profits of the compan would be inceased. Some companies expressed their willingness to
increse the preferential dividends, but they indicated that the polictical difficulties in the way of
declaring higher dividends on prefrence shares could onl be removed by suitable legislation. In these
circumstances, it became neccessary to undertake this legislation.

The bill provides for a minimum increase in the stipulated dividends on preference shares issued
and subscribed for before 1st april, 1960 leaving it again to individuals companies to pay higher
dividends by adopting there usual procedure in this matter. The quantam of increase, as laid down in
clause 3 of the bill before its amendments by the Select Committee, was 25 percent of the stipulated
dividend on preference shares free of income tax shares on which dividend is payble without any
reduction by the company for its own income tax and 7 percent on shares the stipulated