14. A listed company proposing to issue bonus shares shall comply with the following:
1. (a) No company shall, pending conversion of FCDs/PCDs, issue any shares by way of bonus unless similar benefit is extended to the holders of such FCDs/PCDs, through reservation of shares in proportion to such convertible part of FCDs or PCDs.

15.1.1 The bonus issue shall be made out of free reserves built out of the genuine profits or share premium collected in cash only.

15.1.2 Reserves created by revaluation of fixed assets are not capitalised.

15.1.3 The declaration of bonus issue, in lieu of dividend, is not made.

15.1.4 The bonus issue is not made unless the partly-paid shares, if any existing, are made fully paid-up.

15.1.5 The Company -

(a) has not defaulted in payment of interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption thereof and

(b) has sufficient reason to believe that it has not defaulted in respect of the payment of statutory dues of the employees such as contribution to provident fund, gratuity, bonus etc.

15.1.6 A company which announces its bonus issue after the approval of the Board of Directors must implement the proposal within a period of six months from the date of such approval and shall not have the option of changing the decision.

15.1.7 (i) The Articles of Association of the company shall contain a provision for capitalisation of reserves, etc.

(ii) If there is no such provision in the Articles the company shall pass a Resolution at its general body meeting making provisions in the Articles of Associations for capitalisation.

15.1.8 Consequent to the issue of Bonus shares if the subscribed and paid-up capital exceed the authorised share capital, a Resolution shall be passed by the company at its general body meeting for increasing the authorised Capital.