Camlin Fine Sciences Limited (532834) Earnings Call Transcript & Summary

Ladies and gentlemen, on behalf of the Board of Directors of -- and CFS Group. I extend a cordial welcome to you at the 27th Annual General Meeting, AGM of your Company. I have been informed that 87 members are present in person. Further, the necessary records are kept available for inspection by the members. As per the requirement of companies at 2013, sufficient quorum is present and thereby, I declare that the meeting has been properly convened and duly constituted. Dear shareholders, we value your presence here today and the unflinched support you have extended to CFS Group over the past several years. Good afternoon, once again, and welcome you on 27th Annual General Meeting of Camlin Fine Sciences Limited. It is indeed my pleasure to reconnect with you, although we are meeting virtually this time. On behalf of Board of Directors, a sincere thanks to you for making an extraordinary effort to join us today. This resolute support and your confidence in us that too in such an uncertain time and choose us to excel in our efforts to build the greater value and business. Corona pandemic is an unprecedented event and by the -- most of the disruptive one in the modern history. It has a global impact and has literally affected every country, business and of all entire human kind. That definitely is not an easy time for your company and the other stakeholders in the business. But the management of your company under the leadership of Mr. Ashish Dandekar, Managing Director, has faced this challenge with a belief that adversity opens the door for numerous opportunities. The results of this tenacity and determination is all the manufacturing facility of your company locally and globally are working at optimum capacity. Your company has successfully completed a capacity -- the capital raise program to augment the resources required for the growth and sustenance. During the financial year 2019/20, a consolidated business -- on a consolidated basis, the CFS Group operational revenue crossed the coveted figure of INR 1,000 crores. It stood at INR 1,095 crores as compared to INR 894 crores last year, a growth of 17.6% and profit after tax grew to INR 29 crores from INR 3 crores last year. Stand-alone operation revenue of the company increased by 5.8% to INR 579 crores, while profit after tax tripled to the INR 30 crores from INR 10 crores last year. This stellar performance is a result of sustained focus on growth, improvement in margins and focus on expense management. Over the last few years, company has made substantial investment in making CFS stronger and resilient. These investments have positioned us in a situation that we are able to take on a next phase of growth, the phase of restructuring and substantial value creation. Needless to say, this step has also helped the company to successfully respond to the COVID crisis. This struggle of last few years for striving to become the world-leading integrated specialty chemical manufacturer is showing a positive results now. CFS Group is continuously collaborating with its customers for value-based and effective solution. As we complete the current capital raise program, we are delighted to welcome Infinity Holdings and Conversion, a new partners. We look forward at a strong partnership and their confidence and investment and the company will certainly benefit as an organization. The financial results for the company for the quarter ending June 30, 2020, which has been subject to limited review by the auditors were approved by the Board at the meeting held earlier today. During the first quarter, June 30, 2020, company achieved the sales turnover of INR 121 crores as compared to INR 140 crores in the corresponding quarter of the previous year. For the quarter ending June 30, 2020, your company reported a profit before tax of INR 5.10 crores as compared to profit of INR 2.41 crores in the corresponding quarter of the previous year. After providing INR 1.29 crores for tax, the profit after tax during the quarter amounted to INR 3.81 crores. While on the consolidated basis, first quarter operational revenue was INR 306 crores as compared to INR 260 crores in the corresponding quarter of the previous year. The profit before tax was INR 31.51 crores as compared to INR 22.69 crores in the corresponding quarter of the previous year. PAT was INR 20.56 crores for the current quarter. This is an excellent performance looking at the pandemic situation. Having said this, the post-COVID pandemic situation and the impact on the business is difficult to predict at this moment. Hence the management will keep pursuing its caution approach for better its operation and minimizing the impact. [Audio Gap] In this trying time, the Board would like to record their sincere appreciation and gratitude for the dedication and sustained support of the employees and the shareholders of the company, especially the applause goes to the global employees, who have shown exemplary dedication and resilience during the crisis. My special thanks goes to Mr. Sharad Kulkarni and Mr. Pramod Sapre, directors of the company, who are stepping down from the Board on September 30, 2020 on completion of their tenure. Both of them were part of the CFS family since long and had enormously benefited by their guidance and knowledge. I take pleasure to welcome Mr. Amol Shah and Sutapa Banerjee, as the independent directors to the Board. Both brings tremendous value to the company. I am also pleased to welcome Mr. Harsha Raghavan as a Director on the Board, who was appointed as non-executive directors in the Board meeting held earlier today. He has been as Investor Director by Infinity Holding, the new investor. This appointment, of course, is the subject to ratification by the shareholders at the next AGM. We remain indebted to all the stakeholders, customers, bankers, lenders, investors, consultants, contractors and vendors for their continued trust and faith in the company. I gratefully appreciate all my colleagues on the Board for their contribution and guidance in the growth of the company, their support and immense encouragement. CFS remain committed for a stronger and sustainable future of your company. CFS would be consistent in its efforts to innovate and bring science to everyday's life. We seek your continued support to achieve the strategic goals of the company and create value. In conclusion of my speech, I would like to thank Mr. Subhash Dandekar, founder and senior corporate adviser of the CFS for his valuable guidance and his presence today. This 27th AGM is being conducted in the manner laid down in the circulars issued by the Ministry of Corporate Office prescribing procedures and manner of conducting extraordinary general meeting through the VC or OAVM. Notice convened the 27 AGM along with the annual report for the year ending 31st March 2020, along with the Director's report and the audited financial statement of the company have been circulated to you. The audit report issued by the statutory auditors on the audited financial statement does not contain any qualification. I now request you to kindly -- kind permission to take these documents as [Audio Gap] the requirement of sending physical copy of the notice of 27 AGM and annual report of the -- for the year ending 31st March 2020, to the members have been dispensed with pursuant to the circular dated April 13, 2020, issued by Ministry of Corporate Affair. As you are aware, company has provided to all the shareholders, the facility of e-voting and the e-voting was open between 7th August 2020 to 9th August 2020. Mr. Jayant Ranade, practicing secretary -- company secretary of Messrs. JHR Associates has been appointed as a scrutinizer to carry out the entire exercise of e-voting. The company is providing the facility to electronically cast the votes for those shareholders, who could not exercise their votes during the e-voting period. As per the provisions of the company at 2013, there will be no show of hands for the proposed resolution. We would now move on the resolution set out in the notice of 27 AGM and take questions from the shareholders. Now I move to the resolution. First resolution, ordinary business, ordinary resolution number one. Adoption of audited financial statement, including the consolidated financial statement for the company for the year ending 31st March 2020 and reports of the Board of Directors and auditors thereon. [Audio Gap] interested in the business proposal of item #2, I'll hand over the chair to Mr. Atul Pradhan.

Thank you, Mr. Dandekar. Dear members, I will now read business proposed item 2 of [Audio Gap] the resolution #2. This is about the appointment of Mr. Dilip Dandekar, retires by rotation and being eligible offers himself for reappointment. I would now hand over the proceedings back to Mr. Dilip Dandekar for conducting the remaining business. Over to you, sir.

Thank you very much, Mr. Pradhan. I move to the ordinary resolution #3, appointment of Mr. Nirmal Momaya, who retires by rotation and being eligible to offer himself for the reappointment. Special business. Ordinary resolution #4, appointment of MS. Sutapa Banerjee, non-Executive Independent Director. Ordinary resolution #5, approval of material-related party transactions for the financial year 2020/2021. Special Resolution #6, payment of revised remuneration to Mr. Arjun Dukane, Executive Director, with effect from June 2019 up to May 31, 2021. I now request the shareholders to share their questions, if any, pertaining to the proposed resolution through the chat box available on the webcast page. I'm requesting the company secretary, if anyone has registered himself or herself as a speaker, if yes, company secretary will quickly explain the process to the speakers.

Yes, sir. Thank you. Yes, we have 3 shareholders, who have registered themselves as speakers, and they have joined the proceedings as well. We would request the speakers to limit their address to -- up to 2 minutes so that the meeting can be efficiently managed and we also have enough time to address the queries raised by the shareholders. So I would like to invite Mr. Yusuf Rangwala, who is one of the speaker shareholders.

Can you hear my voice? Hello? Hello?

Yes, Mr. Rangwala, we can hear you.

Good afternoon, sir. Can you hear my voice?

Yes, yes, we can hear you.

Good afternoon, sir. I'm very thankful, our dynamic Yogesh sir and his team for giving me a chance. This is a very kind. This is a very good, excellent management by Dandekar sir -- Dilip Dandekar sir. I'm very happy to see you. Please take care of yourself. I'm very close to you. I never missed your meetings in my lifetime, sir. And sir, yesterday, our share was down. Today, it has gone up. So showing in your guidance, how the company is going up? In your guidance at this stage, how we are carrying for this company in your knowledge of person, sir? And one more. I would like to know, Camlin India [Foreign Language] our group company, whether the meeting is gone [Foreign Language] it is now in September, the Camlin India? I would like to know. I'm the shareholder of Camlin, but when is the meeting, if you give Camlin India, I would like to know, because I'm the shareholder of their own company, if you don't mind. And nothing more to add. My good wishes are there, and it will be with you. [Foreign language] Wish a happy Govinda. [Foreign Language]. In the blessing of the god [Foreign Language] Coming year, we will come in dividend list. This is the 27 years, in 3 times, you will give -- all the losses will be in your guidance, and it will come in a dividend only, I think, say, in 3 years' time, with your guidance. And in your business Camlin Fine, which is one of the dynamic companies. And hold a min -- sir, in the China, which we have banned, any effect in our company? The China [Foreign Language] any effect in our company? Any raw material we are getting from China? Nothing from China no, sir? Not to worry no in China? Look this China's people are -- they are -- trouble every people. See how the people have affected in this. And this COVID-19, what our companies helped given the -- any help to the poor people that I would like to know. There is a film actor, Sonu Sood. He has done excellent to people to travel where the people come. Our companies done such practice to travel -- to any people who required help from us, our company had done, sir? And nothing more to add. I will end because there are only 3 speakers and I am the one of the first speaker, it gives me pleasure that you are considering me in this -- you are considering me as a speaker. It is very happy and a very knowledgeable. And I pray to God, our company will come in a good flavor. And I will say some few word. [Foreign Language].

Thank you. Thank you, Mr. Rangwala.

Mandar, you want all the questions to be completed first or you want to go ahead?

Yes, sir. Yes, sir. Sir, we have now 2 more speakers to go.

Who is the next one?

Sir, now we have Mr. Hariram Choudhary. Mr. Choudhary, can you hear us?

Yes, yes, I can hear. You can hear my voice?

Yes, sir.

And let me put my video also. Now you can see my video also.

Yes.

Now, Mr. Chairman, Dilip Dandekar, other directors on the Board and my dear shareholders, my name is Hariram Choudhary. We are happy that at least this AGM is held by video conference. But Mr. Chairman, I suggest that in the last week of October before Diwali, the Diwali get together of the speaker shareholders may be organized, what is known by the Diwali. So last week of October will be the ideal place and speakers shareholders will like to meet each other. It will be a get together. So kindly consider my request. And kindly, let us know, whether today's meeting is streamed by this website, and let us know about that. We welcome your words that adversity is turned into opportunity. We are very happy to read about that. About the financial results, you had mentioned, and they are very encouraging for the year '19/'20. You have given the figures of first quarter of April to June also. And in spite of the COVID-19, we find that the readers are quite satisfactory. Now I come to this CSR. Now in CSR, Mr. Chairman, kindly let us know, how much amount we have spent for welfare of the COVID-affected people? Whether we have provided ambulance or ventilator or beds for the COVID-affected people? Or in what way we have helped these COVID-affected people? And who is the Chairman of the CSR Committee, kindly let us know. Now here Mr. Chairman, my suggestion is that if we receive an application from a person -- from a shareholder, who is affected by COVID, kindly give INR 1 lakh because the total expenditure for treatment is INR 15 lakh, that is INR 1 lakh we should give so that we can save the life of a shareholder. Now you have mentioned that 87 were there, 87 shareholders. What is the total capacity of this Webex? How many we can accommodate? Kindly let us know that also. And about this -- now about the physical properties you have not printed, Reliance Industries and BSNL are printed, but we are not printed, is it all right? Because it doesn't matter? And kindly let us know how many staff members are working from home? And how many staff members we have total that you kindly let us know. And with this, I conclude by conveying my best wishes for all-round progress and prosperity of the company. Thank you, Dilip ji and Ashish Dandekar ji, the Managing Director. Thank you very much.

Mandar? You said one more shareholder is there no.

So we have only one speaker left now, Ms. [indiscernible]. Can you hear us?

Yes. Can you hear me?

Yes, yes, yes.

Good afternoon, sir.

Good afternoon.

Good afternoon. Thank you for giving me opportunity to speak. I would like to congrats Company Secretary and his team for sending soft copy of the report well in advance, indicates the clear and transparent picture of the company. I want to ask what is the road map of next 2 years of the company. And secondly, I request you after the lockdown is over, please arrange factory visit for the shareholders. Thank you very much.

Thank you, [indiscernible]

Mandar, anything on the chat, clear is it?

Yes, sir, we have some queries on the chat. So we'll just take a break some minutes so that the management can compile the answers and then we can proceed for answering the questions.

Okay.

Sir, with your permission, can we now close the chat session for receiving the questions so that we can compile the answers for which we already received?

Yes, I think.

Thank you, sir. Thank you, sir. Hello. Dilip sir, we are ready with the answers. So you can give appropriate instructions.

Okay. I think there was 3 members, who spoke through the chat -- through the video. And there are a few questions. So I request Mr. Ashish Dandekar, Managing Director, and his team, he will delegate the responsibility to somebody to answer the question. But about -- there was one question asked by Rangwala about the -- let me tell you that Ashish is handling the entire management of Camlin Fine Sciences. And his team we must give the complements to him for the performance what they have shown in this COVID period. You're also query about the Camlin Limited. Still, the date is not decided. Once the date is finalized by the Board, we'll communicate to the shareholders. Rest everything I request Ashish to answer them.

Thank you. Thank you. Good afternoon. I will try to answer as comprehensively as I can from the questions that have been asked. First of all, I would like to make you all understand that we have a tremendous team, and the team is responsible for the performance that has happened in spite of the COVID-19 situation. We -- our offices have been closed right from the time of a lockout. And only when the skeletal staff of 10% has been allowed, we have 3 to 5 people going sometimes for work, which has to be physically done. But otherwise, your entire company has been running from people from home. And of course, the manufacturing locations have been working very well and efficiently. We had some closures because of the lockdowns. But since our food and blends came into essential services, we were allowed to reopen our manufacturing a little earlier than most other companies. That said and done, let me try to answer some of the questions that have been asked. The status of the Dahej plant and when is it going to be commercialized? Our Dahej plant, as you know, was online to get commercialized, maybe a few months earlier. But because of the COVID-19, there were disruptions, there was closure. And so now we are probably going towards commercialization within the next 2 months. It is proceeding very well. Trial production is going very smoothly. We are slowly ramping up the capacities. And at the moment, we have the confidence of efficient and clear production, we will declare commercialization. As far as the status of taking 100% control of our overseas subsidiaries in China, we do not really have an exact date yet. The process is under on and we will keep you updated. The next question is by Mr. Mahesh Makhija. Promoters' holdings have gone down over the last 5 years. I would like to know if promoters are planning to raise their holdings in the company. Well, we have had a lowering of promoters' holdings in the last 5 years, and some of it has been due to personal reasons and reasons beyond our control. But rest assured that, we, promoters would like to increase our shareholding as and when we can. And the first is the call option that is part of the agreement that has been signed with the new investors, which would let us raise our shareholdings. The next question is, where do you see the company in the next 3 years? Well, as you know, we have been on a growth path in the last 1, 1.5 years since we changed cores and gotten to a new business segment and category of blends. We see growth now in the next 5 years coming from all the segments, mostly from the blends and from food ingredients, but also from our industrial chemicals or performance chemicals, as we call it. We would not like to give really guidance on numbers, but rest assured that we are very confident of growth year to year. The next question is dividend policy. We have no clear cut dividend policy in place right now. And in the growth phase that we are in, we would always rather utilize the cash flow for growth rather than paying dividends over -- on a large sum. But rest assured that we would like to pay dividends as and when we can. The last question is, what is the guidance on EBITDA sales going forward? We would not like to really give any guidance other than what I said before, that we are very positive that we are going to be growing at a healthy pace. Mandar, those are the only questions that I see in front of me. So is that all there is?

Yes, sir.

Ashish, I will just interject here, sorry. A small question. We do have a dividend policy by the Board. But because of inadequate profits, we are not. So I'd like to correct that. We do have a dividend. Secondly, there are a couple of questions on NSDL and all these things, which I think, Mandar, can take over. I think otherwise, we have covered everything generally.

Okay. Thank you, Santosh, sir. So yes, so the question regarding NSDL is we have tied up with NSDL for which offers a platform for conducting the general meetings through video conferences. And they have a very good connectivity. And as many as 10,000 shareholders can attend the general meetings in one single point of time. Plus, it also has a paid coverage as far as the server capacity goes. So I mean -- so NSDL is the authority. Of course, there are also other agencies, but we have tied up with NSDL for the general meetings through video conferences.

Ashish, there was a question on China also.

Yes, about the status of taking 100% control, right?

Right.

So I responded to that that we are still under process. We are still evaluating what are the best options for doing it. So we will keep...

No, no, China ban. Ban on China.

So we have not been directly affected by the ban because our products do not come under any category that has been banned. Any other question? Can we start?

One question on CSR. We had losses. So we are not eligible for making any CSR, that has been disclosed in there. Of course, in this year wherever eligible, we will look into it. We have our CSR Committee, which generally verifies this decision on this.

We have made some CSR in the form of hand sanitizers -- in the form of sanitizers to the government.

And who is the Chairman of CSR, that is also one of the questions.

Yes. So Mr. Amol Shah is the Chairman of CSR Committee.

So Mandar, can you take that all the questions which are read by the shareholders have been answered by the management team?

Yes, sir.

Okay. So thank you, Ashish, for answering all the questions, along with your team. And now that the question-answer session is over, so now I request the shareholders to cast their vote on all this resolution set out in the AGM notice. Those shareholders who have already voted through the e-voting will not be eligible to vote again in the meeting but can only participate in the business of the meeting. After all the shareholders have cast their votes, the scrutinizer will go through all the votes cast by the shareholders. And the combined results of the voting and voting of AGM will be announced on or before 12th August 2020. The voting results will be -- also be forwarded to the stock exchange and will be made available on the website of the company. As the business of the meeting is over, I finally declare that the meeting as concluded. Thank you very much for your presence. Thanks a lot.

Sir, I would like to propose a vote of thanks to Dilip sir for conducting this meeting.

Thank you. Thank you very much.

Thank you. Are we done?

Yes.

Well, thank you, everybody. Thank you for all the directors for attending and giving their valuable advice and time. Thank you.

Thank you. Goodbye.

Bye-bye.

Thank you.