Blue Star Limited (500067) Earnings Call Transcript & Summary

Good afternoon. I, Rajesh Parte, Company Secretary and Compliance Officer, welcome you to the 76th Annual General Meeting of Blue Star Limited. Mr. Vir S. Advani, Chairman and Managing Director of the company, has occupied the Chair. Members are requested to note that this AGM is being held through video conference in accordance with the provisions of the Companies Act 2013, and applicable circulars issued by Ministry of Corporate Affairs and SEBI. However, the proceedings of the meeting shall be deemed to have been conducted at the registered office of the company. The facility for joining this meeting through video conference is being made available for the members on a first come, first serve basis. I have been requested by the Chairman to record the fact that the company has taken requisite steps to ensure that AGM through video conference is a seamless experience for all the stakeholders and all efforts feasible have been indeed made by the company to enable members to participate and vote on each item of the business. Members participating in the AGM through VC shall be reckoned for the purpose of quorum as per Section 103 of the Companies Act 2013. All members who have joined this meeting are by default kept on unmute to avoid any disturbance and ensure a smooth conduct of this meeting. The company has received requests from a few members to register themselves as the speakers. In the interest of time, we have restricted the number of speakers, we will request the shareholders to limit their speech to 3 minutes. [Operator Instructions] If there is connectivity problem at any speaker side, we will ask the next speaker to join and the said earlier speaker who could not speak due to connectivity problem will be called again to speak. Members are requested to refer to the instructions provided in the notice for a seamless participation through video conference. In case members face any difficulty, they may reach out on the helpline numbers mentioned in the notice of the Annual General Meeting. As the AGM is being held through video conference, the facility for appointment of proxies by the members was not applicable, and hence, the proxy register is not available for an inspection. The statutory registers and other documents have been made available for electronic inspection during the AGM. Members seeking to inspect such documents can send their requests to [email protected]. The company had brought remotely e-voting facility through NSDL to the shareholders to cast their votes electronically in respect of all businesses mentioned in the notice of AGM. The remote e-voting facility commenced from August 2, 2024, and ended on August 5, 2024 at 5:00 p.m. Indian Standard Time. The members present in the AGM through VC and who have not cast their vote on the resolutions through remote voting shall be eligible to cast their vote through the e-voting system during the AGM. Members may cast their vote while simultaneously viewing the proceedings of this meeting. Please note that there will be no voting by show of hands at this AGM. Mr. Bharat Upadhyay, partner of Mr. N L Bhatia & Associates, Practicing Company Secretaries, has been appointed as the scrutinizer to scrutinize the remote e-voting process and e-voting during the AGM in a fair and transparent manner. As the requisite quorum in terms of Section 103 of the Companies Act 2013 is present, I am calling this meeting to order. The company has not received any board resolution from any corporate shareholders appointing representatives under Section 113 of the Companies Act. We also have Mr. Nikhil Sohoni, Group Chief Financial Officer, attending this 76th Annual General Meeting. The representatives of statutory auditors and secretarial auditors are also attending this meeting. With the unanimous consent of the directors attending the meeting, I request Mr. B. Thiagarajan to occupy the Chair in case due to technical glitch unavoidable circumstances, Mr. Vir Advani fails to continue with the meeting.

I agree.

I agree.

I agree.

I agree.

Yes. Thank you, Directors. I now request Mr. Vir S. Advani, Chairman and Managing Director of the company, to initiate the formal proceedings of the meeting.

Thank you, Rajesh. Ladies and gentlemen, I, Vir S. Advani, Chairman and Managing Director of the company, have great pleasure in inviting you to the 76th Annual General Meeting of Blue Star Limited. Before we start the main proceedings of the meeting, I request all directors to introduce themselves one by one. Mr. B. Thiagarajan.

I am B. Thiagarajan, Managing Director of Blue Star Limited. I am the Chairman of Corporate Social Responsibility and ESG Committee, and a member of the Audit Committee and Risk Management Committee. I'm attending the 76th Annual General Meeting of Blue Star Limited from Mumbai.

I am Sam Balsara, Independent Director of Blue Star Limited. I am the Chairman of the Nomination and Remuneration Committee. I'm attending the 76th Annual General Meeting of Blue Star Limited from Mumbai.

I'm Anil Harish, Independent Director of Blue Star Limited, and a Chairman of the Audit Committee and a member of the Risk Management Committee. I am attending the 76th Annual General Meeting of Blue Star Limited from Mumbai.

I'm Anita Ramachandran, attending the 76th Annual General Meeting from Mumbai, I am a member of the NRC and of the CSR Committee of Blue Star.

Rajiv Lulla?

Good afternoon. I'm Rajiv Lulla, Non-Executive Director of Blue Star Limited. I'm a member of the Investor Grievance cum Stakeholders’ Relationship Committee and Risk Management Committee. I'm attending the 76th Annual General Meeting of Blue Star Limited from Mumbai.

G Murlidhar?

Good afternoon, everybody. I'm G Murlidhar, Independent Director of Blue Star Limited. I'm a member of the Audit Committee. I'm attending the 76th Annual General Meeting of Blue Star Limited from Mumbai. Thank you.

Sunaina Murthy?

Good afternoon. I'm Sunaina Murthy, Non-Executive Director of Blue Star Limited. I'm a member of the Investor Grievance cum Stakeholders Relationship Committee, and Corporate Social Responsibility and ESG Committee. I'm attending the 76th Annual General Meeting of Blue Star Limited from Mumbai.

Arvind Singhal?

Good afternoon. I am Arvind Singhal, Independent Director of Blue Star Limited. I'm the Chairman of Investor Grievance cum Stakeholders Relationship Committee and a member of Audit Committee. I am attending the 76th Annual General Meeting of Blue Star Limited from Mumbai.

Vipin Sondhi?

Namaskar, I'm Vipin Sondhi, Independent Director of Blue Star Limited. I'm attending the 76th Annual General Meeting of Blue Star from Mumbai.

Thank you. Dinesh Vaswani?

I am Dinesh Vaswani, Non-Executive Director of Blue Star Limited. I'm a member of the Nomination and Remuneration Committee, attending the 76th Annual General Meeting of Blue Star Limited from Mumbai.

Thank you, directors. As the notice was already circulated to all the members, I take the notice convening the meeting as read. The reports of the statutory auditors and secretarial auditors do not contain any adverse qualifications, observations or comments on the functioning of your company and hence, are not being read. Let me now apprise you on the performance of your company during FY '24. So good afternoon, ladies and gentlemen, once again. On behalf of the Board of Directors of Blue Star Limited and on my personal behalf, I extend a warm welcome to you to the 76th Annual General Meeting of Blue Star Limited, which is being conducted virtually. It is indeed an honor and a privilege to address you for the first time as the Chairman and Managing Director of your company. At the outset, I would like to sincerely express my deepest gratitude to Mr. Shailesh Haribhakti, who retired as Independent Director and Chairman of the Board on 31st March 2024, for leading the company for 5 years and enabling it to achieve several new milestones. He was associated with the company as an Independent Director for over 17 years, and significantly contributed to numerous areas, specifically corporate governance, taxation, risk, ESG and digitalization. He has been and continues to be a remarkable guide and mentor, and I have learned a lot from him during his tenure. I also take this opportunity to thank the Chairpersons of the past. The founder, Mr. Mohan T. Advani, Mr. B. T. Advani, Mr. Ram K. Malani, Mr. Ashok M. Advani and Mr. Suneel M. Advani, who have devoted their lifetimes to Blue Star, painstakingly building the company and taking it to where it proudly stands today. Thank you. Earlier today, the Board met and approved the results of the Q1 FY '25. Financial highlights for the first quarter on a consolidated basis are as follows. Revenue from operations for the quarter grew to INR 2,865 crores compared to INR 2,226 crores in the same quarter last year. EBITDA for Q1 FY '25 was INR 237.83 crores by a margin of 8.3% compared to INR 145 crores and an EBITDA margin of 6.5% in the quarter last year. Net profit for the first quarter was INR 168.76 crores compared to a net profit of INR 83.37 crores in Q1 FY '24. The net cash position of the company on June 30, 2024, stood at INR 1,042 crores compared with a net borrowing of INR 283 crores as of June 30, 2023. The carry forward order book as of June 30, 2024, was at a record INR 6,084 crores in comparison to INR 5,359 crores as of June 30, 2023. As you may have read in my letter to the shareholders in the annual report, FY '24 was a milestone year for the company, as it marked the completion of 80 years of our existence on September 27, 2023. We are gratified about the fact that coinciding with the 80th anniversary celebrations, the fiscal year '23-'24 was an exceptional one, with all businesses contributing significantly to the company's growth. The new fiscal year has begun on a high note, aided by a strong summer season, resulting in a record growth in our room air conditioner business this quarter. Additionally, we are experiencing strong demand from the manufacturing, data center and infrastructure segments for our Electro-Mechanical Projects business. Our central air conditioning business is witnessing increased demand from the industrial, health care, hospitality, retail and educational sectors. The Commercial Refrigeration business also gained significant traction driven by higher demand from ice cream OEMs, QSRs, the HoReCa segment, food retail, and health care. On the international front, we commenced commercial production of heat pumps for the North America market. Our market capitalization has grown fivefold in 5 years from INR 6,700 crores on April 1, 2019, to over INR 30,000 crores today. Reflecting the strong trust our investors have placed in us. I'm deeply grateful for your continued support in Blue Star. Thank you. While many of you are loyal shareholders, you will know the Blue Star history, the number of shareholders has grown by close to 80% in the last 5 years. I therefore thought it is important to share our story once again for their benefit. Blue Star was founded in 1943 during World War II by Mohan T. Advani, whom we fondly call MTA, a courageous startup entrepreneur with exemplary leadership qualities, passion and drive. World-class customer experience, delivering excellence, innovation and creativity, business ethics, transparency, professional management and meritocracy. Placing the interest of the enterprise over one's own were some of the values that drove him and not the valuation of the enterprise. Even today, the Board and employees of Blue Star are inspired by and follow these same values. MTA was initially engaged in the repair and reconditioning of air conditioners and refrigeration equipment on a shoestring budget of just INR 2,000 and a mere 3 member team. Blue Star began manufacturing ice cream, ice candy machines and bottle coolers, and initiated central air conditioning system design and execution in 1947. The journey of the electronics and instrumentation business of the company began with acquiring the distributorship for all Honeywell products in India in 1954. Blue Star was listed on the stock markets in 1969, which gave us the necessary capital to expand our core. In the early '70s, we gained the first-mover advantage by air conditioning the first 3 sky scrapers in Mumbai, the Air India headquarters, Express Towers and Oberoi Hotel. In 1983, long before the IT boom began, a software export unit was established at SEEPZ in Mumbai. In 1988, we became India's largest central air conditioning company and both in Commercial Air Conditioning and Commercial Refrigeration, we continue to be one of India's largest even now. Thereafter, we established 3 major JVs with Hewlett-Packard, Yokogawa and Motorola, which added value to Blue Star's global image and credibility. In 1997, we set up the most advanced world-class factory in the HVAC&R industry, in Dadra two decades before the Make in India initiative began. In the new millennium, we initiated the sale of products in the Middle East, both in our brand as well as an ODM partner. Recognizing the opportunities that India was likely to offer we expanded our manufacturing footprint in Himachal Pradesh and Wada, for production of AC&R equipment, as well as fortified our position as an MEP player in the Electro-Mechanical Projects business. In 2011, we forayed into the residential room AC business, which has now emerged as one of the largest businesses of the company. The last decade has been the most eventful, expansion into more product categories, including product adjacencies, setting up a Blue Star International FZCO in Dubai to make deeper inroads in global markets. Engagement with Virat Kohli, as the company's first brand ambassador for the room AC business, setting up of subsidiaries in North America and Europe for offering custom design and manufacturing solutions, and commencement of commercial production of the Sri City plant for room ACs as well as the new plant at Wada for deep freezers. We have built a legacy that has endured the test of time. Starting from partition to wars to recessions and most recently, the pandemic and stand strong with great resilience even today. Today, Blue Star has firmly established itself as a market leader across all chosen business sectors. We are a INR 10,000 crores enterprise known as a preferred employer, the brand of choice for customers, and a stock favored by investors. Our 5,000 delivery partners serve over 1,900 towns in India and more than 20 countries from North America to East Asia. Supporting 40,000 livelihoods daily. We lead in sustainability, adhering to strict regulations in energy labeling, ozone depletion, global warming, and e-waste management. Our investments in R&D have increased significantly over the years to 1.5% of total revenue in FY '24. We have 4 state-of-the-art R&D centers, including the Ashok M. Advani Innovation Center in Bhiwandi, propelled by the grant of INR 100 crores by Mr. Ashok M. Advani. We have over 46 patent applications and 46 design registrations and are working hard to nurture an innovation culture. Our 7 state-of-the-art manufacturing plants spread across the country, focus on excellence and quality enhancements using the latest machinery as well as adopting Industry 4.0 practices. The company employs total cost management techniques to reduce costs while maintaining high quality. In terms of our human resources, over 70% are engineers or possess technical diplomas and certifications. Our investments in leadership development and functional training include building a pipeline of young leaders. The company's brand and its value proposition built on trust remain compelling to both consumers and business customers. Having Virat Kohli, as the face of our room air conditioner business has significantly increased our visibility in Hindi-speaking markets in Tier 3, Tier 4 and Tier 5 towns, particularly amongst young consumers. As we march towards our centennial milestone, it is crucial to focus on strategic areas that will make Blue Star a future-ready organization. India's economic growth continues to shine in the global arena and is expected to do much better in the years ahead. India is currently the fifth largest economy. And according to IMF projections in about 5 years, it will emerge as a third largest economy only after the U.S. and China recording the highest growth rate in GDP as compared to any other nation. With this backdrop, the Indian HVAC&R industry is poised for exponential growth, driven by lower penetration of room ACs and the burgeoning middle class consumer with high disposable income, especially from Tier 3, 4 and 5 markets. The urban population is expected to rise by about 100 million people by 2030, which will further propel demand for all our products and solutions. The overall AC industry, both residential and commercial, currently valued at INR 27,000 crores is likely to double in the next 4 years. We believe that Blue Star now stands at the cusp of exponential growth and is very well placed to leverage the opportunities that India and specifically the Indian HVAC&R industry have to offer. Our multichannel strategy will encompass modern retail, regional power retailers, distributors, single outlet formats, e-commerce, ONDC and direct-to-consumer channels, all of which we will actively pursue. India is at the forefront of cooling industry advancements being the first country to announce a comprehensive action plan called the India Cooling Action Plan. The future of cooling will lie in energy efficiency, regulatory compliance and geographical presence for any player. We intend to play a leading role and will focus not only on creating innovative products that are energy efficient, but also sustainable. We aim to accelerate our efforts in the green building movement as well as a net zero mission, aligned with the UN Global Cooling Pledge, we aim to contribute to the cause of achieving the emission targets. We will continue with evaluating further investments in manufacturing and wherever feasible, also develop a local vendor ecosystem with an intent to reduce our dependence on imports. India's exports were just 1.8% of global trade in FY '24, and we believe this will grow rapidly in the coming years. We intend to significantly scale up exports and play a larger role in the decarbonization of heating and cooling markets globally. We are in the investment phase in this business and expect to emerge as a globally relevant HVAC&R player in the coming decade. There is likely to be a huge talent shortage given the increase in opportunities and your company will continue to invest heavily on training and development of not only its employees, but also its channel partners and vendor ecosystem in its endeavor to create a pool of talented resources and build a strong technical organization. As a leader, we will continue to invest in enhancing brand equity amongst both B2B and B2C consumers especially the new decision-makers comprising millennials and Gen Z buyers. Our deep consumer insights into the domestic market, coupled with our cooling expertise, expansive network of channel partners, robust brand equity, extensive domain knowledge, and innovative technologies positions us perfectly to seize the opportunities this growth will bring. As with R&D, your company has significantly increased its investments in digitalization initiatives, including data analytics, machine learning and artificial intelligence, with the objective of driving revenue growth, enhancing competitiveness and transforming customer experience. AI presents a tremendous opportunity to transform the way we do business as well as the way our products will interact with our users and we are excited with the journey ahead. Over the years, we have learned and demonstrated the ability to dynamically adapt to the changing market conditions and emerge successful. This, I believe, is our core DNA, which will hold us in good stead in the future as well. In conclusion, I place on record my gratitude to our customers, channel partners, business associates and vendors for their support and contribution to the success of Blue Star. I extend my heartfelt appreciation to the executive management and employees of Blue Star, not just for their outstanding performance for the year but also for their passion and commitment to the company. The company is built to last because each and every Blue Stariet, lives and breathes our credo every day. I also express my deep gratitude to my colleagues on the Board as well as Mr. Ashok M. Advani and Mr. Suneel M. Advani for their guidance, invaluable counsel and support that they provide to B. Thiagarajan and myself. Thank you, shareholders, for your continued trust as we navigate this exciting journey ahead. I'm confident that Blue Star will continue to rise to every occasion and achieve remarkable success. Warmest wishes to you all. Thank you. The agenda contained in the notice I request Mr. Rajesh Parte, Company Secretary and Company -- and Compliance Officer, to briefly explain the resolutions proposed to be passed at the AGM.

Thank you, Chairman. Since the remote e-voting is already concluded and many members have already casted their votes. There will be no proposer or seconder for the resolutions as set out in the notice of AGM. Item #1 of the notice, relates to approval of audited standalone financial statements of the company for the financial year ended March 31, 2024, along with all the reports of the Board of Directors and auditors thereon. And the audited consolidated financial statements of the company for the financial year ended 31st March 2024, together with the report of the auditors thereon. As stated earlier, the auditors' reports are unmodified. The resolution at Item #1 of the notice is therefore set for your -- is set forth for your approval as an ordinary resolution. Item #2 of the notice relates to approval of final dividend of INR 7 per equity share of the face value of INR 2 each for the financial year ended March 31, 2024. The resolution at Item #2 of the notice is set forth for your approval as an ordinary resolution. Item #3 relates to reappointment of Ms. Sunaina Murthy, who retires by rotation and being eligible, offers herself for reappointment. The resolution and Item #3 of the notice is set forth for your approval as an ordinary resolution. Item #4 of the notice relates to approval of remuneration of Narasimha Murthy & Co, Hyderabad, cost accountants for FY '24 and FY '25. The resolution at Item #4 of the notice is set forth for your approval as an ordinary resolution. In respect of Item #4, covered under special business, necessary information has been provided in the explanatory statement forming part of the notice of the Annual General Meeting. Approval of the members is therefore sought for the said agenda items. I now hand over the further proceedings to the Chairman.

Thank you, Rajesh. I now invite the shareholders to offer comments and seek clarifications on the resolutions contained in the notice. In order to afford an opportunity to as many of you as possible, I request you to be brief and avoid repeating the questions or comments made by earlier speakers. Shareholders are requested to mention their name before asking their questions. I now request the moderator to start the Q&A session.

Thank you, Chairman, sir. Before we begin taking questions from shareholders, a brief audio-visual will be played. [Presentation]

The Chairman will now be taking questions. [Operator Instructions] I invite our first speaker shareholder, Mr. Satish Shah to speak. We can hear you, sir. Please go ahead.

[Foreign Language]

Thank you very much Mr. Satish. I now invite Mr. Santosh Kumar Saraf, our next shareholder to speak. Sir, we can see you, kindly unmute your microphone and go ahead and speak.

[Foreign Language]

Thank you very much, Mr. Saraf. I now invite Ms. Smita Shah and Mr. Bharat Shah to address us. Yes, ma'am. Please go ahead.

Thank you, sir. My dear Chairman [Foreign Language]

[Foreign Language]

Thank you, Ms. Smita Shah. Thank you, Mr. Bharat Shah. I'll now invite Mr. Praful Chavda to speak.

[Foreign Language]

Thank you very much, Mr. Chavda. I now invite Mr. Dinesh Gopaldas Bhatia to speak.

[Foreign Language]

Thank you very much. Thank you, Mr. Bhatia. I now invite Mr. Bimal Kumar Agrawal to speak.

First of all, I'll thank the company Secretary and his team a very good team. They were other people also are said about team, very good team. They also remind -- sometimes we get fed up, but they don't get fed up in calling us. A very good team. Sir, you have given us a very good speech. And only I want to who are our competitors? I don't want to waste any one's time now. I think the question was already raised by the other speakers. And I also thank the moderator for calling my name.

I now request Mr. Dilip Kumar Das to speak. [Operator Instructions] Sir, I think there is a connectivity issue with Mr. Das' connectivity. Let's move on to our next speaker holder, [ Mr. Anil Babubhai Mehta ]. Okay. Let's move on to our next speaker, speaker #9, Mr. Hiranand Kotwani.

Namaste, it's a great place to join you. [Foreign Language]. Sir, one thing I was missing in your balance sheet, Mr. -- photo of Mr. Mohan Advani. He was the pioneer. So in the initial pages he should be given -- the historical background should be given. I read your whole night, 3 to 4 a.m., 2 days, very good balance sheet. I have a bad experience with your secretarial department. This year, they have called me, they remind me well. But last 2, 3 years, my experience is not good some issues with my physical shares. I have so many shares in physical form, my family, from Mahesh Kotwani and other Kotwani hold the shares. So there was a problem. So they are not currently accessible. Even the in-time people didn't help. So please note that they should be accessible to the shareholders in particular the -- those who are interested. Your working is good, all is well. And I used to criticize even Tata, but I have no room to criticize, [Foreign Language] We will certainly good wishes for future. Certainly, we will not remain the -- the organization remain there with a great name and fame also. How the export front we are working? How do you have to increase our export presence at the global level footprint and earning the foreign exchange for the nation. Nothing more to add, just convey good wishes. I have not visited any of your factory because sometimes they called me at the time I was busy. So if there is any visit, please do call before.

I now invite Mrs. Celestine Elizabeth Mascarenhas to share the thoughts with us.

Respected Chairman and MD, Vir S. Advani, MD, B. Thiagarajan, other members of the Board, my dear fellow shareholders, I am Mrs. C.E. Mascarenhas, I'm speaking from Mumbai. First of all, I thank the company's Secretary and his team for sending the annual report and also registering me as a speaker at my request. Thank you so much, and giving me this platform also to speak. Annual report is very, very beautiful with all the gadgets. It is great to see the annual report. And at the same time, a lot of figures and facts and self-explanatory adhering to all the norms of corporate governance. Our revenues are up PBT and PAT up, a good dividend of INR 2 per share also -- no INR 7 per share. Also bonus we have received 1:1, a good market cap. Next is congratulations for all the awards and accolades as given in the annual report, good CSR work. Now my queries. Have we listed ESG on any dedicated ESG platform, whether domestic or international? And what is our rating score? Next question is, we are the market leader in all our products, where we have great market share than others. We are in air conditioners, commercial refrigerations, the pictures are all shown 26 to 30 or something, we have even a portable AC. Sir, I would like to know, what is the market share because this can be carried anywhere? And what is the price of this portable AC? Next question is we have manufacturing units at Wada, Dadra, Himachal Pradesh, Ahmedabad, Sri City. Here, I would like to know what is the average capacity utilization? Next question is we have applied for 46 patents for innovations. What is the status of those 46 as only 6 are granted. Remaining as many previous speakers also spoke and further also will be asking, I support all the resolutions. I know our company has always been rewarding, and it will always reward in the future. My request is we would like some discount coupons, like the portable AC or something like that discount if you can do it. With this, I thank you so much for giving me this patient hearing, and I support all the resolutions. I wish all of you all good health as wealth is health and until we meet in the next year.

Speaker #11, Mr. Manoj Kumar Gupta has not logged in for the meeting. So we move on to Speaker #12, Mr. Manjit Singh. Mr. Singh?

[Foreign Language] Thank you for the management team. Thank you for the security.

Our next shareholder #13, Mr. Manoj Kumar Gupta has not logged in for the meeting. So we move on to Ms. Vasudha Vikas Dakwe.

Respected Chairman, sir, Board of Directors and my fellow shareholders, myself Vasudha from Thane. I would like to congrats our company, secretary team for sending me the soft copy of the report well in advanced, which itself is clear and transparent. The opening speech given by the Chairperson is also very informative and excellent. Most of the question was asked by my previous shareholder, I would like to ask only one question, what is our attrition rate? With this, I support all the resolutions. Thank you very much and wish the company all the best for coming financial years and my best wishes for coming Ganpati, Dussehra and Diwali festival.

Our next speaker, #15, Mr. Ramesh Shankar Golar has not joined the meeting. But we do have Mr. [ Anil Babubhai Mehta ] Speaker #8, who had a connective problem earlier. I'll request him now to go ahead and speak.

This is [ Anil Mehta ] attending this meeting from my residence Kandivali Mumbai, with my family members, they are also the shareholders of the company. We have a few questions, sir. The question number one, with increase in globalization, what helps the company done to increase the interest and breadth of knowledge and experience on the Board? Question #2, how does the management monitor intercompany transactions? Question #3, how does the company assess its liquidity and availability of the funding sources for operations? Last question, what is the company doing to improve the shareholder relations? Sir, we have one suggestion. Don't waste of money to appoint any ambassador. Our name is enough. So at least instead of that appointing any ambassador, kindly give some discount to our shareholders, regular customers. With this, we are supporting all the resolution and thanks to the Secretary department led by Mr. Rajesh Parte for the cooperation and support in nature. All the best.

[Operator Instructions] With that, all shareholders who registered to speak at this AGM and did log in have given an opportunity to express themselves. Thank you very much, dear shareholders. Before the Chairman addresses your queries, a brief audio-visual will be played. [Presentation]

I now request the Chairman to address the shareholders' queries. Over to you, sir.

Thank you so much to all the callers. Thank you for taking the time to address us. We appreciate it. I have tried to -- because there are overlaps, so I'm going to try and go in the best way I can. I think I should fill to answer all your questions and comments. I think the biggest one was all the appreciation with our secretarial team. So congratulations to Rajesh and team, who have done a great job. Everyone has all praised. And to the shareholders, we always appreciate the praise. It's what keeps the secretarial team going. So thank you for that. We appreciate it. There was a question about, I think, some confusion about the number of permanent employees and workers that should read as permanent employees. So that should be clear. There was also a question about we only have about 10% female employees. Why is it so low and what we're doing about it. You're right, 10% is well below the target that we have in the company, but you do know we are an engineering company and a manufacturing company. So we do expect to have a lower percentage, but nevertheless, 10% is below our own internal target. We are doing a number of initiatives in the company to improve the diversity that we have. One, for example, is that all the fresh engineers and MBA students and fresh college graduates who join us, a minimum of 50% of them are women, and we're trying to see how to improve that further. We're also taking various initiatives to help increase the number of women in management positions because it is extremely important that we get diversity even at that level. We will -- we are working on that and hope to bring that up to double digits as well. And we also have a new initiative of bringing women into the worker workforce as well in our factories and in our job sites. I'm happy to inform you that we made a lot of progress in our Sri City plant and are now attempting to do the same in all our factories. We are a light manufacturer and therefore, we should be promoting many more women to be looking at being employed in the factories. I assure you that we will continue to work hard on this and look forward to updating you on this number and improving it as we go forward. Next question was when will we be -- we achieve net 0. I think we're very far away from that goal. We have, however, taken up a number of initiatives in the company to improve energy efficiency to reduce energy consumption and manage our overall sustainability. You would have hopefully seen that in the annual report in a number of areas sustainability is a strategic objective for the company. And we will continue to work on it. I think we need another 2 years before we are able to finally declare a net 0 date. Please bear with me till then. I know that it may sound like a long time, but I want to assure you that we are continuing our journey towards net 0, even though we have not announced a final date. And as soon as we have the confidence of that date, we will be sure to inform our shareholders. There was another question on CSR activities. So there are 2 areas of CSR. One is, I'm happy to see the appreciation that several shareholders have shown of our CSR activities, but there's a question about how much we're spending. There was also a question about whether we're doing an audit. So just to let you know, last year, FY '24, we spent INR 4.7 crores. And this year, we're expecting to spend more than INR 7 crores. That's the spend, the activities, of course, have been shown in the annual report and those are clear. As far as a CSR audit is concerned, yes, we will be undertaking one in the coming financial year. And we'll certainly report back to the shareholders on the outcome of that audit. But we are confident that it will be a clean and positive audit. There was a question about what new products we will be introducing or have introduced in the market. You may have seen some of them in the annual report again, but some of the ones that come to my mind off the cup, we have a new product portfolio for data centers in India. You know that is a large and growing industry, and so we expect to gain a lot of market share in data centers. We also have a new set of chillers, which are to be used in process industry. These are low temperature chillers that are used in chemicals, plastics, et cetera. And therefore -- so that is a new segment that we will be addressing. We also are -- of course, you know we are present in the residential market, mainly with mini splits and cassette units. We are now present in the residential market with what we call VRF systems, which are high efficiencies, central air conditioning systems. These will be used more by the high-end residential market, and we are ready with that portfolio and are excited about that new entry. In our commercial refrigeration business, we have expanded our portfolio of deep freezers. We now manufacture an entire range from 60 liters, all the way up to 600 liters and these are both used in commercial as well as residential applications. Those are some of the new products. We will keep innovating and introducing new products as we go forward. There's a question on cybersecurity and actions that we are taking. We take this subject extremely seriously. I want to assure you that a large amount of our IT budget is dedicated towards cybersecurity. We have who we believe to be some of the best partners in this area as well as we have a number of redundancies and a very robust backup plan and a business continuity plan. So you should be rest assured that we are protected to the extent we can. However, we remain very vigilant about cyber-attacks because it is -- it has become very common in industry. There were several requests for physical meetings. We continue to evaluate the option of physical versus virtual. This year, we chose virtual. I think it was the right decision given the weather in Mumbai, it would have been difficult for even local shareholders to come all the way to Churchgate, let alone our outside shareholders. I also mentioned to you in my opening remarks that the number of shareholders that we now have has grown by about 80%, and a lot of these shareholders are from outside Mumbai. And so we did take that into consideration. But nevertheless, we will continue to review this. I appreciate the sentiment about wanting to meet in person. All of us, Directors, will be very happy to meet you in the near future, in physical when possible. There was a request for a factory visit. I know that is a long-standing ask what we had requested you last year is that it remains this year, we are in a very significant CapEx cycle, adding capacity in all our factories. It becomes very difficult to bring visitors to these factories when they are under construction and there's expansion going on. So please give us some time and we will come back to you. The next one was on -- there was some concern around -- sorry, there was a question around doing customer surveys to find out why people buy Blue Star products. I know one of the shareholders was unhappy with our spend on Virat Kohli. I want to assure you that we do very in-depth customer surveys regularly. We are trying to address and encourage the participation of youth in our purchasing process. And nothing resonates with the youth as much as cricket does, especially from -- all the way from the North of India to the South of India. And so we do prefer to do a cricket and Virat Kohli is a fantastic role model, and we do get a big benefit out of being associated with him. But nevertheless, I know there are differences of opinion and that is fine. But the company ensures that we do a very thorough customer survey before making any investments of any kind in the brand and promotion. There was a -- let me see. There was a question about who our competitors are in the market. That's a broad question. As you know, we operate in everything from the small residential market to very large industrial air conditioning. So the competition is different in different segments that we operate in. But you will understand that it is largely multinational dominant industry in India. And your company is one of the handful of Indian companies, Indian origin companies that continues to stay relevant and compete in the market and win in the market. So we, of course, keep very close watch on the competitive landscape and assure you that we are in very good shape going into the future. There was a very valid comment about the fact that we have not put a photograph of MTA in the annual report, your point is very valid, and we'll take it for the future. There was a question about exports and our presence and our plans, and it appeared a couple of times. We have explained that we have 2 different strategies for exports. One is in the Middle East. You know we are building the Blue Star brand. That is by exporting largely commercial air conditioning equipment like VRFs, and chillers and inducted systems. These are sold in the GCC in North Africa and in our South Asia region under the Blue Star brand. That business is growing. Of course, it is going to take much more time to expand, but we continue to invest there. The other part of the business is exporting to the U.S. and to Europe, where we do not sell under our own brand, but we actually partner with air conditioning and refrigeration companies in those markets and design and manufacture products that then get exported. Today, our exports go all over Europe, into the Netherlands as well and in North America. There was a -- several of you all recognize all the awards that the company has won. We thank you for that. It's a big effort in the company to make sure that we keep benchmarking ourselves with our competition and knowing what is happening globally, and so that's an effort around that. There was a question about ESG ratings, whether we have done one and whether we will do one. We have not done one as yet. We intend to do it in the near future, either this year or next year, we will report back to the shareholders once we have done the ratings. There was a question about portable air conditioner. I'll ask our Secretarial team to get back to you with that information if that is okay. There was a question about average capacity utilization. Again, it varies across factories, but we are approximately 75% capacity utilization, but there's a lot of expansion going on, as I mentioned. So this number may come down. There was a question about patent applications and the 46 that we have applied for and the status, they are at various stages of getting approved. You may know that the patent process is quite detailed and long. And of course, we continue to follow up. But this is a very, very long-term initiative of ours. We should not look at the current numbers. I think maybe we should challenge ourselves 10 years from now as to how many we have added by then. There was a question about R&D spend. Last year, we spent INR 143 crores, which is a combination of CapEx and operating expenses. That number is about 1.5% of revenue and is expected to grow faster than our revenue is going to grow. A lot of investment going there as you would have read in the annual report. A question about whether we are considering any buyback. As you know, we have just raised fresh equity, not even a year ago, and the objectives are to invest in CapEx and in the future of the company. So as of now, our intention is to continue to invest in the company. We have no plans for a buyback. There was a question about attrition rate. At junior levels, it will be at the industry level of 15% to 20%, at senior levels, we tend to do better than the industry, maybe 10% to 15%. At the senior most leadership level will be extremely low. We continue to do a number of initiatives in human resources to attract and retain the best talent in the industry. And I want to assure you that we are doing extremely well, and we would be the preferred employer in our industry for sure. There were a few questions about how we assess the liquidity in the business and what our process is for it. I want to assure you that we have a very robust process. We do monthly tracking of cash flow and working capital requirements and CapEx requirements. We have a very in-depth review mechanism that runs in the organization from top to bottom. And we are always making sure that we are projecting our cash requirements at least 6 to 12 months in advance. We've been relatively successful and that was one of the reasons why we raised the equity we did last year in order to plan for the expected cash requirements. There was a question about intercompany transactions and how it gets monitored. The audit committee monitors this extremely closely, both the Audit Committee of the parent entity as well as the Audit Committees of our subsidiary companies. I think you will agree with me that we have a fantastic track record on ensuring the highest level of transparency, and that is how the organization is run. There was finally a question about technical knowledge improvement and how we will keep up with the international market and world. You're certainly right. The air conditioning and refrigeration market globally is undergoing significant technology changes with sustainability measures coming, with regulation coming. We are -- that is the reason why we invest so heavily in R&D and in product management because we want to stay ahead of the curve as far as both the refrigerants are concerned, energy efficiency is concerned, and, of course, global warming. So with that, I think I would have gotten all the questions. In case I have forgotten any, I apologize. Our secretarial team will be sure to follow up with you and get you your answers. But with that, I think I'm done with answering the questions. So with that, we come to a close. Thank you, shareholders, for your valuable comments and questions. I trust we have satisfactorily answered all the questions, or at least most of them, and we have taken due note of your comments. The e-voting facility shall remain open for the next 15 minutes. Members who have not cast their vote are requested to do so now. Since all businesses as per agenda have been transacted, I declare the meeting has concluded, subject to completion of e-voting by the shareholders present through video conference. The scrutinizer shall present a consolidated report on remote e-voting and voting at the AGM within the statutory time lines. I therefore authorize Mr. Rajesh Parte, Company Secretary and Compliance Officer of the company to announce the results of voting, submit the voting results to the stock exchanges. The results shall be placed on the website of NSDL, company and be displayed at the registered office as well as at the corporate office of the company. I thank you for -- all of you for attending. Be safe and stay healthy. Thank you so much. Bye-bye.