Arihant Superstructures Limited (506194) Earnings Call Transcript & Summary

First of all, dear members, very good afternoon to all of you. I, Govind Rao, Company Secretary and Compliance Officer of your company, delighted to welcome all of you to the 38th Annual General Meeting of your company, Arihant Superstructures Limited, which is being held through audio/video conference and other audio/video visuals as permitted by Ministry of Corporate Affairs and SEBI. It is a great honor and privilege for me to address all of you on behalf of the Board of Directors of the company. On behalf of the Board of members and the company, I would like to take this opportunity to thank all of you for becoming the part of this important meeting. Before we proceed the AGM further, I may like to introduce the Board of Directors, Chief Financial Officer and auditors of the company. Mr. Ashok Chhajer, Chairman and Managing Director of the company, is personally present here. Next is Mr. Virendra Mital, Independent Director and Chairman of the Audit Committee of the company, is also personally present here. Next is Mr. Raj Narain Bhardwaj, Independent Director of the company and Chairman of the Nomination and Remuneration Committee, is participating from his residence situated at Malad, Mumbai through video conference. Next is Ms. Divya Momaya, Independent Woman Director of the company, is participating from her residence situated at [indiscernible], Mumbai through video conference. Next is Mrs. Chandra Iyengar, additional Independent Woman Director of the company, is participating from her residence situated at [indiscernible], Mumbai through video conference. Mr. Deepak Lohia, Chief Financial Officer of the company, is personally present here. Mr. Sourabh Chouan, representing Kailash Chand Jain & Co., the statutory auditor of the company, is participating from his residence situated at Mumbai through video conference. Next, Mr. D.A. Kamat, representing D.A. Kamat & Co., the secretarial auditor of the company, is also personally present here. Now I would like to give you an overview of the process of -- to participate through video conferencing at the AGM. First, the AGM is being conducted through video conference and other audio/visual mode only without the presence of personal quorum. Personal quorum [ as a common menu ] as per the MCA circular as issued in this respect, along with the provisions of Companies Act 2013 and SEBI Listing Obligations and Disclosure Requirements Regulations 2015. The registered office of the company is deemed to be the venue of the AGM. The company has facility for e-voting on the agenda items along with the facility for participation at the AGM through NSDL's website and e-voting platform. And the proceedings of the meeting can be viewed by nonvoting and ordinary members through the company's website via a one-way live webcast. The details for e-voting and participation in the AGM through video conferencing are already circulated to all the members, along with the notice of AGM. The members who have not cast their vote on the agenda items may cast their vote electronically. E-voting is now open from the start of the AGM and will be now kept open further 30 minutes after conclusion of the AGM. Members who have registered themselves as a speaker for asking questions during the AGM will be called upon to speak. Members joining through video are requested to ensure sufficient bandwidth and keep their cameras on while asking their questions. Members may state their names and membership ID or folio number before asking the questions. Only members who have registered themselves as a speaker shall be permitted to ask questions and speak at the AGM. The Chairman shall, at their discretion, reply to the queries put forth by the members at the end of this meeting. The company shall provide sufficient time to the members to ask their question. However, in case of any audio/video lag due to poor connectivity, the company shall proceed with the next question or a speaker member. Every speaker will be given a maximum of 2 minutes each to ask their question or state their comments. All resolutions at the AGM are proposed for members' approval through e-voting and remote e-voting. As remote e-voting on these resolutions have already concluded, there is no requirement to propose and second the resolution at the AGM. Now I would like to invite Mr. Deepak Lohia, CFO of our company, to give some highlights on the financial aspects of the company. Deepakji? Deepakji, unmute yourself.

For the financial year ended 31st March 2021. I hope all of you and your loved one are doing well and safe at your place. The year started with a lot of fear as COVID-19 pandemic took its toll on business environment across the globe. However, real estate in India, especially affordable housing, was one such sector which bounced back extremely well. I had indicated this in my conversion with last -- your last AGM that customer inquiry have improved considerably. That trend gather momentum as economy open up, and we ended up with one of the best year for the number of units sold as well as top line reported by the company. And this was despite a 2 months complete lockdown and continued further disturbances. We sold 1,097 units totaling 10.16 lakh square feet at average rate of INR 4,556 per square feet, with aggregate value of INR 463 crore. Another reason for our confidence [ remain ] from the fact that the sales have not slowed down despite Maharashtra government limited [ period ] reduction of registration and stamp duty. This show that our demand is real and not solely dependent on the [ sup ] provided by the government. Thus, the [ sup ] provided by government is always welcome. Although our real estate market provided us opportunity post first wave of COVID, we would not have been able to take advantage of the same and perform had it not been for the visionary and dynamic leadership of Sri Ashok Chhajer. He has been confident of the revival in this space, and his vision ensure that we were prepared with enough inventory as we did not slow down new launches nor construction and engineering of the existing project. This gave customer a whole host of choice which could fit their requirement. This also ensure that we give timely delivery of our project. Another important achievement of the year was reduction of debt by INR 91 crores through operational cash flow, which would help reduce our interest, outgo [indiscernible]. With this, let me give you an overview of financial of Arihant Superstructures Limited for the financial year 2020 and '21. During the year under review, the revenue from operation of the company increased from INR 237.85 crore in FY '19-'20 to INR 272.30 crore in FY '20-'21 on consol basis. The revenue from operations on a stand-alone basis increased from INR 61.14 crore in FY '19-'20 to INR 107.23 crore in FY '20-'21. The profit after tax for the FY '20-'21 on consol basis was INR 15.74 crore in FY '20-'21 as against profit after tax of INR 10.98 crore for FY '19-'20. The profit after tax for the FY '20-'21 on a stand-alone basis was INR 3.9 crore as against loss of INR 1.41 crore for FY '19-'20. The increase in consolidated profit after tax for FY '20-'21 was on account of positive financial performance of the entire group. I would like to take this opportunity to thank you all of you that faith and trust [ we poses ] in us. I now hand over the proceed to our company secretary, Mr. Govind Rao.

Thank you, Deepakji. Now I would like to invite Mr. Ashok Chhajer, Chairman and Managing Director of our company, to interact with our shareholders. Sir?

[indiscernible] Am I audible?

Yes, sir.

And given the prospects of the real estate sector turnabout, the company did excellent or very good in aligning with the leading real estate developers on the -- at the country level. And in the last financial year, after the washout of almost 3 to 4 months due to COVID, in spite of that, in the rest of the 8 months and 9 months, [ we completed ] excellent sales where the cash flow has increased where we could reduce our debt. And on the same lines, going ahead, we would be -- this half year also, the desired results have been within the targets which are required to be done. And we hope that we would grow at [ a fast CAGR ] when compared to the previous year starting '18, '19 and '20. The slowdown period has already been [ left ] and the [indiscernible] analyst tell that it is an -- for the next 3 to 4 years, it is an upside swing and the company -- as Board and the company, the strategy would be to double the size of the company in terms of businesses in hand. And this will enable us to be -- this will enable us to have a better, better, better size of positioning in the market, and this will lead to also larger profits, the larger turnovers. And for this, the Board already has decided and we have come to the AGM also for approving the enabling resolution for raising up capital in this financial year. And in that tune, once the strategic investors and the institutions or the [ HNIs are ] there, it will then help us, the company, to refine more, better processes and systems and ride on the growth part from here onwards. About the projects. None of the projects has been stopped in the last financial year also. We have been able to start off new phases. The servicing of the debt was done in time to all the lenders, and the repayment also was in time. And this has also brought in a lot of credibility to the -- in the banking sector and the lending sector. And as on today, there's a good interest by the markets and [ institution ] and our IR team as well as our team is updating all the prospectus, participants of investors at the equity as well as the current shareholders also from time to time. We have kept up good governance in aspect of also giving up the information well in time for the company's [ prospects ] rather than waiting for only the Board meetings. And this has brought up -- [ just on the lines ] of good corporate governance. We did up in the first week of April, first week of June updates of the [ prospects ] of the company and -- so that the inside information is not restricted to key people, and it is available for all the shareholders in large. And the company always would look forward for the interest and the growth of the minority shareholders. The management, as well as the promoters, have always taken well care of this in the past years of '17, '18, '19 also in the interest of the company and always place company above than individuals. And we have been in a [ spear ] mode of acquiring talent and putting up professionals on the company for the future expansion to be taken place. And we are confident that we would be able to double the size. We would be able to [ do this CAGR ] growth. And we, today, have already in place all the systems and processes, and the scalability is not a different -- difficult task for the company. And also, you all stay tuned with the company as shareholders. And we, as managing committee of the businesses, will try to bring the best of them to the shareholders. Thank you very much, everybody.

Thank you, sir. Dear members, the annual report for the financial year ended on 31st March 2021, along with the notice of AGM, has been already circulated to you. Now with your permission, I read out the resolution for the benefit of the members. Resolution #1 is for adoption of financial statements for the financial year ended on 31st March 2021. Item #2 is for retirement by rotation, to appoint a director in place of Mr. Nimish Shah, who retires by rotation at this AGM and being eligible, offers himself for reappointment. Resolution #3 is for appointment of Mrs. Chandra Iyengar as an Independent Woman Director of the company. The resolution #4 is to raise funds through issue of securities up to an amount not exceeding INR 300 crores, including premium, if any. Resolution #5 is to approve the proposed material-related party transaction for the financial year 2021-'22. Now with the permission of the Chairman, I would like to call out the names of the members who are registered for speaking at the AGM as a speaker.

Permission [ granted ].

Yes, sir. [indiscernible], is there any speaker online? Let me check. We got 8 numbers of members request to register as a speaker. First is Mr. [ Vinod Agarwal ]. Client ID is IN30311610745291. And the second is Mr. [ Anil Parekh ]. Client ID is [ 120275100108650 ]. Third is Mr. [indiscernible], IN30018310015364. Fourth is Mr. [indiscernible], and fifth is Ms. [ Sultana Amirali ]. Next is -- sixth is [indiscernible]. Seventh is [indiscernible]. Eighth is [indiscernible]. Is there any speaker online? Okay. We'll just wait for some time. Okay. First, Mr. [ Vinod Agarwal ]. Sir?

Can you hear me? Can you hear me?

Yes, sir.