Cyrus Mistry addresses Tata Steel AGM

DDN Correspondent

Tata Steel Chairman Cyrus Mistry attended the AGM of the company as its chairman for the first time on Wednesday and he faced some tough questions from the shareholders as some of them asked him to tell that why dividend payout had gone down but the salaries of top management increased.

The shareholders said that the dividend per share of Tata Steel has declined by 50 per cent in last 6 years to Rs. 8, while it was Rs. 16 in 2007-08.

One of the shareholders said that a vote should be conducted against the proposed dividend, stressing for discussions on it. The shareholder, however, took back his demand following request from the management and other shareholders.

"I want a poll and discussion. you are giving a lollipop (to the investors)... Your salaries keep going up," he said to the company management.

Mistry tried to pacify the shareholders claiming that the slump in demand of steel across the world has affected the profits of the company.

"I think we need to understand what stage the company is in today. The company is in a volatile market at the low end of the steel cycle and at the same point in time, it is going through a massive expansion. We have to conserve capital for the expansion that is ahead of us," he said.

He further said that "notwithstanding all of that, the board took a decision to bring down the dividend in a minor way", which was "just to reflect an indication of the environment we are in, without impacting the shareholders significantly".

A dividend of Rs. 8 per ordinary share of Rs. 10 to 97,12,15,229 company shareholders for 2012-13 has been recommended by the board of Tata Steel.

The annual report of the company for the last fiscal year shows that total dividend payout will be Rs. 776.97 crore, which is 18 per cent of net profit of the company for 2012-13 (at Rs. 5,062.97 crore).