Cyrus Mistry brushed aside concerns of 'global volatility', saying Indian economy is doing well.
Amid demands from shareholders for bonus shares from Tata Group's crown jewel TCS, Chairman Cyrus Mistry on Friday saw one investor asking for 'sikkas' -- a play on rival Infosys' chief Vishal Sikka.
Mistry, who brushed aside concerns that a "lot of volatility" prevailing in world markets could impact TCS, replied with a smile to each suggestion from shareholders at the company's Annual General Meeting, but gave only the customary answer -- the board will consider. The over US $110 billion, salt-to-software Tata Group derives over half of its revenues from outside India. Amid worries about volatile financial markets, the Tata group Chairman also expressed hope that the rupee will remain stable on the back of the country's improving macroeconomic fundamentals. "Indian economy is doing well and our current account balances are well. At least, I look forward to a stable rupee going into the future. We can't say exactly what will happen," he said.
Many shareholders expressed concern over management compensation, while specifically pointing to TCS MD and CEO N Chandrasekaran's nearly Rs 36 crore package, which is nearly 460 times the median remuneration.
"The board is totally cognisant of the benchmark salary structure within the industry and has applied those. We think we have applied them appropriately," Mistry said. Several shareholders also asked for issuance of bonus shares while referring to the low amount of capital funds compared to the cash balances and reminding the management about the approaching golden jubilee (50th year) of the firm.
One of them even invoked the name of rival Infosys' Chief Executive and asked for a few "sikkas" (meaning coins) from the company. Mistry said smilingly the board will consider such suggestions. He acknowledged that there is a "lot of volatility" in the world and Tata Sons' largest company by profits, TCS, has multiple income streams spread across geographies and verticals to take care of the same. Calling 'Brexit' -- exit of Britain from EU -- as an "important" question, Mistry declined to answer specifically about its impact. A referendum is due this month in the UK to decide whether Britain stays in the European Union or not.
Mistry further said he does not see any impact on the company's operations in Tamil Nadu as a result of the state government's decision to allow IT employees to unionise. On the US $940 million claim by US-based Epic Systems alleging theft of trade secrets, Mistry said TCS believes it has not misused any intellectual property of the American firm and is currently awaiting a judgement.
Replying to a question on the lower provision despite the suit, Mistry said, "In the opinion of the company's legal counsel, the jury award is not binding, and it's currently assessed on the low possibility of the event." He sees the UK-based Diligenta, TCS' bet to expand in the insurance business, as having a good future from the long term perspective.
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