The companies would not be able to provide dividends if the company is making continuous losses, according to the company law the management can decide to declare dividend if there happens to be a loss or profits are inadequate, by transferring the previous years profit reserves.
The share holders of Tata Motors are happy due to the fact that they have paid a good sum as dividend to the share holders, Its not the only company that has done this there are also other companies that have followed this pattern by paying high dividend. Blue chip companies like Dr Reddy’s Lab, Aditya Birla Nuvo, Punj Lloyd these companies have 15-125% range even after they have recorded losses in the range of Rs.225 cr to Rs.2505 cr.
The companies would not be able to provide dividends if the company is making continuous losses, according to the company law the management can decide to declare dividend if there happens to be a loss or profits are inadequate, by transferring the previous years profit reserves.
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