NON-CUMULATIVE PREFERENCE SHARES :

In the case of these preference shares, dividend does not accumulate. If there are no profits or the profits are inadequate in any year, the shares are not entitled to any dividend for that year. Unless there is a specific provision in the Articles of Association of the company, the preference shareholders have no right to participate in the surplus profits or in the surplus assets in a winding up. They are entitled to payment of the declared preference dividend in any particular year and to the repayment of their preference capital in the event of winding up before payment to the equity shareholders.