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TCS enters China — Sets up wholly-owned subsidiary

Our Bureau

NEW DELHI, June 19

TATA Consultancy Services (TCS), a division of Tata Sons and India's largest software solutions and consulting services enterprise, today announced its entry into China with the incorporation of a new company — Tata Information Technology (Shanghai) Co Ltd — headquartered in Shanghai.

While this new entity will be a wholly-owned subsidiary of Tata Sons Ltd, the management of the subsidiary would be vested with TCS, the Executive Vice-President of TCS, Mr Phiroz A Vandrevala, told newspersons here.

Elaborating the strategic intent behind TCS's entry into China, Mr Vandrevala said that the Chinese subsidiary will help service the needs of global clients better.

``China will be a key element in our strategy going forward. It will help in Business Continuity Planning as well as give us a major impetus in terms of global reach,'' he said.

Mr Vandrevala said that the Mayor of Shanghai had presented the licence to do business to TCS Chief Executive Officer, Mr S Ramadorai, at a function held on Tuesday in Shanghai. ``In the short term, we would meet our global customer needs in the APAC region by expanding operations in China and create delivery capability to supplement India. In the long term, we would expand TCS operations by leveraging on the local market growth opportunities and meet global market need,'' he said.

Outlining the three part business framework of TCS China, Mr Vandrevala said that the office in Beijing will undertake marketing activities for the company's China operations and will cover areas in client relationship management, public relations and legal areas, in addition to providing support to the North East and North West regions.

Besides being the headquarters, the Shanghai office would have the development and demonstration lab and will collaborate with the local universities of repute in research and development.

In Hangzhou, TCS will set up a development centre which will provide end-to-end services for clients over the Asia Pacific region, in coordination with TCS delivery centres in India.

``The size of this centre will grow to 150 personnel in the first year of operations. We have also identified the clients. I can name two of them — GE and AIG. We have got confirmed orders from them and they are our existing clients,'' Mr Vandrevala said.

He also said that the revenues of the development centre, which will be at the Pudong Park, will be fully tax exempt. On the initial public offering (IPO) of TCS, Mr Vandrevala said, ``internal work has already begun''.

He said that TCS has also started working on getting its accounts US GAAP compliant. He however declined to hazard a guess on either the timing of the IPO or whether the company would tap both the domestic and international markets.

TCS registered a total revenue of Rs 4,187 crore for the year ended March 31, 2002, reflecting a growth of about 35-36 per cent over the topline of the previous year.

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