1. The company has almost never paid a dividend, with the usual explanation being “to further strengthen the resources”. Why do the resources need further strengthening, given the company’s extremely strong balance sheet and earnings?

2. When will the company consider the resources as being “strong” enough to resume dividends? Please commit to a target expressed in terms of financial statement ratios.

In the last five years, NBI has been profitable every year and its net assets have been on a rising trend. However, it has only paid a dividend once:

NBI: profit, net assets and dividends

All figures in ₹ crore (10 million). Quoted investments valued at market. NBI does not include changes in value of investments within net profit.
Year ending MarchNet profitNet assetsDividend paid
20163.41,072-
201780.71,5020.1
20183.81,493-
20196.11,709-
202013.01,617-

The explanations have been as follows:

2016: To further strengthen the financial position of the Company and to conserve resources your Directors have decided not to recommend dividend [sic].

2017: [ Dividend declared. ]

2018: The Board does not recommend any dividend for the year . . . with a view to further strengthen the resources.

2019: The Board does not recommend any dividend for the year . . . with a view to further strengthen the resources.

2020: Please note that the Board has not recommended any dividend for the year … with a view to conserve resources.

In our view, these explanations do not form a sufficient argument for why resources need to be strengthened or conserved.