CCL Products (India) Limited (519600) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I welcome you all to the 61st Annual General Meeting of CCL Products (India) Limited. I appreciate your input and being with us. I'll be [indiscernible] held by using video conference or other audio-visual means mode. I would like to take you through certain points regarding participation at this meeting. The facility of joining the AGM through videoconference or other audio-visual means is being made available for members on first come, first serve basis. To avoid any background noise and to ensure smooth conduct of the meeting, all the members who have joined this meeting will be placed on mute mode by the host. Once the question-and-answer sessions starts, I will announce the names of the shareholders who have registered as speaker shareholder. Subsequently, they will be unmuted by the host. The speaker shareholders are advised to put video on while speaking. If speaker shareholders fail to speak using video mode, he or she may speak using audio mode with the earphones on. If there is any connectivity problem at speaker's end, we may ask other speaker to join. We would like to request shareholders to kindly restrict their speech to 3 to 4 minutes. During the proceedings of AGM, if any member faces any issue, he or she may contact the helpline number mentioned in the notice of the AGM. The company has taken requisite steps to allow members to cast their votes on items being considered at this AGM. Since there is no physical attendance of members, the appointment of proxy is not applicable. The registers are required under -- the registers acquired under company at 2013 are open for inspection. Members who have not voted using remote e-voting can cast their vote in the CDSL-evoting web page. I now take the privilege in welcoming our Executive Chairman, Sri Challa Rajendra Prasad Garu; our Managing Director, Sri Challa Srishant Garu; our Executive Director, Sri B. Mohan Krishna Garu; and our Independent Director, Sri. P. M. Garu, who is also the Chairman of CSR Committee; Sri Kata Chandrahas Garu, who is also the Chairman of Audit Committee and Stakeholder Relationship Committee; G.V. Krishna Rau Garu, who is also the Chairman of Nomination Remuneration Committee; Sri Kode Durga Prasad Garu, Sri Veerayya Chowdary Garu and Shrimati Kulsoom Noor Saifullah Garu; and our Non-Executive Directors, Shrimati Challa Shantha Prasad Garu, Sri K. K. Sarma Garu and Dr. Lanka Krishnanand Garu to the 61st Annual General Meeting through videoconference mode. I also welcome our CEO, Sri Praveen Jaipuriar; our CFO, V. Lakshmi Narayana; our secretariat auditor, [indiscernible]; [indiscernible]; and the scrutinizer, Mr. M.V. Samuel to this AGM through videoconference mode. May I now request Sri Challa Rajendra Prasad Garu, our Executive Chairman of the company, to conduct the proceedings of this meeting.

Good afternoon, all shareholders. I feel privileged to welcome you all to the 61st Annual General Meeting of your company. In view of the presence of requisite decorum, I call this meeting to order. Thank you all, directors and all the key executives of the company attending the meeting. I thank all the shareholders and members for joining this meeting. I hope all of you are safe and healthy. As we are conducting today's meeting through videoconference, more pursuant to the directions of the Ministry of Corporate Affairs and Security Exchange Board of India, the live streamlining of this meeting is also being webcast on CDSL platform. This remote eVoting [indiscernible] on August 27, 2022, at 9 a.m. and concluded on 29th August 2022 at 5 p.m. [Audio Gap] Was appointed as a scrutinizer to scrutinize the words passed through remote e-voting process, and through e-voting process during AGM in the fair and transparent manner. Since the annual report is already circulated to all the members, I take this as [indiscernible]. So I request the Chairman speaks. I welcome you all for the 21st -- the 61 Annual General Meeting of the company. It gives me great pleasure to share with you the company's performance and the progress achieved during the financial year 2021/'22 and talk to you fully about what lies ahead of all of us. Before I proceed further, I wish to say that all of us passed through some very difficult times in the last 2 years, with COVID seems to be somewhat under control. However, its aftereffects continue to trouble people and business alike. I hope you and your families are keeping safe, and I thank all the stakeholders of your -- for your safetiness and being with us during these challenging times. The annual report for the financial year 2021-'22, along with the audited financial statements, have been reviewed for some time. With your permission, I should take this as read. Now I wish to say a few words on the performance of the company during the year. Your company as a group has performed quite well. As a group on a consolidated basis, your company had a turnover of INR 14,66 crores and earned net profit of INR 204 crores. On the stand-alone basis, its turnover stood as INR 954 crores and the net profit at INR 127 crores for the year. The net profit includes dividend amount of INR 26 crores received from the only one subsidiary in Vietnam. Let me know -- let me now briefly refer to the performance of our subsidiary companies. First, Ngon coffee Limited Vietnam. As you are aware, this is a wholly-owned subsidiary of your company at Vietnam, which is in the ninth year of commercial operations, has posted a turnover of INR 451 crores with a net profit of INR 104 crores. During the commercial operation, coming to the Continental Coffee SA in Switzerland, which is also a wholly-owned subsidiary of your company, has achieved a turnover of INR 218 crores and a net profit of INR 7 crores for the year. We acknowledge the work of the Managing Director, Mr. Henry Goffaux, and his team in seeing that the operations of the company has become profitable. Their efforts in securing orders for the local -- from the local supermarkets in Switzerland for the company has yielded good results. We are confident that in the years ahead, the company will perform even better. Let me talk about domestic market. Domestic market, you all are aware that the turnover of -- we did a turnover of INR 174 crores despite the challenging conditions in the year '21-'22. Today, we are fast-gaining chain from the already established big place in terms of distribution point, footprint, we are now in the process of expanding our network plan in India. We are planning for aggressive and sustainable growth this year as well. I am glad to inform that Continental Coffee Pvt. Limited only owned subsidiary of CCL Products (India) Limited, developed plant-based protein snacks under the brand of Continental Greenberg. These products were launched in June 2022. This is the fodder of -- by the company and its subsidiaries into a new product category, which is outside coffee. Progressing on the vision of the company to be a house of brands, that is our first step. Considering the fact that the world is moving towards sustainable living and concerns about the environment, plant-based products have a big future, and this prompted us to venture into this business. Our seasonal freeze dried unit, it did [indiscernible] with 5,000 ton -- metric tons capacity in [indiscernible] has completed 3 years of its commercial operations. I'm happy to inform that the unit has achieved commendable profit in the first 3 years of operation itself. Coming to the expansions, we are adding 16,500 metric tons of our Vietnam plant -- at our Vietnam plant. This capacity will be commissioned during the first quarter of this financial year. As we speak, we are also working to further expand through a greenfield project in India, addition to our [indiscernible] unit. We are looking at adding 16,000 metric tons of spray dried capacity through a newly -- new wholly-owned subsidiary company. The aggressive capacity expansion needs to meet the near-term demand of our coffee both in India as well as our international markets. Finally, on behalf of the Board and personally online we have, I thank the CCL family for the support and continued commitment, which is helping us navigate through these difficult times. I also expressed my gratitude to my colleagues, our customers, bankers, business associates, collaborators for their valuable assistance. I also thank the shareholders for their confidence and constant support. We will continue to make every effort to increase value for the stakeholders. We will remain committed to justify the faith and trust you have reposed in us. As we progress and grow, I look forward for your continued support. Thank you. Now I request Sridevi, company Secretary, to read out the resolutions to -- in the Northeast.

I'm now reading the ordinary business resolutions. Resolution 1 is to receive constant and adopt the audited standalone financial statement of the company for the financial year 2021-'22, together with the report of the Board of Directors and auditors thereon and the audited consolidated financial statement of the company for the financial year 2021-'22, together with the report of the auditors thereof. Second resolution: to confirm the interim dividend of INR 3 per equity share of INR 2 each to the shareholders declared by the Board of Directors in their meeting held on 19th January 2022 for the financial year 2021-'22 and to declare the final dividend of INR 2 for equity share of INR 2 each to the shareholders for the financial year 2021-'22. Third resolution: to appoint a director in place of Sri B. Mohan Krishna who retires by rotation, and being eligible, offers himself for reappointment to the office of director. And the fourth resolution: to appoint a director in place of Dr. Lanka Krishnanand Garu, who retires by rotation, and being eligible, offers himself for reappointment to the office of director. And the fifth one is appointment of statutory auditors. Resolve that percent of the provisions of Section 139, 141 and 142 of the company's act 2013. Ms. [indiscernible] and Rao, Chartered accountants [indiscernible] are hereby appointed as a statutory auditors of the company to hold the office from the conclusion of this meeting until the conclusion of 66th Annual General Meeting on such remuneration as may be agreed upon by the Board of Directors and the auditors. In addition to the reimbursement of all after-pocket expenses in connection with the audit of the accounts of the company for every financial year ending 31st March. Now I'm going to read out the special business items. Sixth one, to consider and, if thought fit, to pass with or without modifications the following resolution as a special resolution. The appointment of Sri Challa Rajendra Prasad Garu as an Executive Chairman of the company. And seventh one: ratification of remuneration to the cost auditors for the financial year 2021-'22. And this resolution to concern, if thought fit, to be passed as ordinary resolution. And the eighth resolution: ratification of remuneration to cost auditors for the financial year 2022-'23, and this resolution to concerned, if thought fit, to pass as an ordinary resolution and to concerned, if though fit, to pass with or without modifications, all the following resolutions are special resolution. Ninth one: approval of CCL employees' stock option scheme 2022 and grant options under the scheme. Tenth resolution is to approve for grant of options pursuant to CCL employee stock option scheme 2022 to the employees of the subsidiary companies. 11th resolution: approval of implementation of CCL employee stock option scheme 2022 through [indiscernible]. And 12th resolution: approval for grant of low to CCL employees trust for an amount not exceeding INR 20 lakhs only by the company for implementation of CCL employees stock option scheme 2022. Further, I would like to inform you that pursuant of the provisions of Section 108 of the company's act 2013, trade with company's management and administration rules 2014, the company has extended e-voting facility to its members in respect of all the businesses to be transacted at the 61st Annual General Meeting of the company. The e-voting commenced on Saturday, 27th August 2022 at 9 a.m., and concluded on Monday, 29th August 2022 at 5 p.m. The facility of e-voting to those shareholders who have not cast their vote using remote e-voting is also available. Members may cast their vote simultaneously while watching the proceedings of this meeting on CDSL e-voting web page. The company has appointed Mr. M.V. Samuel Company Secretary as scrutinizer to scrutinize the vote cast through remote e-voting process and through e-voting process during AGM in a fair and transparent manner. This AGM is being conducted -- held through videoconference or audiovisual means, and the resolutions mentioned in the notice during this AGM have already been put to vote through remote e-voting and through e-voting during this AGM.

Now I will take question and answers and invite speakers.

First speaker is [indiscernible].

And one more request. Now we are going to take all the questions from all the speakers at a time, and we try to replay all the questions at the end of the -- after the end of question-and-answer session. And if at all, any questions we are unable to answer, we'll send a separate mail to the particular respective to shareholders again.

So Praful, please go ahead. Praful, can you hear us?

Yes, sir.

Now, please go ahead.

[Foreign Language]

Thank you. Okay.

Next speaker is [indiscernible].

One moment, please. Suresh, can you hear? Yes, Suresh, Please go ahead. Sir Suresh, please go ahead. Can you hear us? Madame, let's go to the next one.

And we move on to next speaker then. I'll recall his name again. Meanwhile, we'll take the next speaker, [indiscernible].

[Technical Difficulty] So thank you, sir. [Foreign Language] Thank you, sir.

[Foreign Language]

[Foreign Language]

Thank you. Thank you. Next speaker.

Next speaker, [indiscernible].

Thank you, sir. [indiscernible] please to open my camera also?

1 Okay.

Thank you.

[Foreign Language]

[Foreign Language]

[Foreign Language]

Okay, sir.

Yes.

Thank you, sir. My Chairman, [indiscernible] and also all the independent [indiscernible] of the company and my fellow shareholders to the conference. Sir, good afternoon. [Foreign Language]. My name is [indiscernible]. I'm from Hyderabad, sir. I'm a financial adviser, sir. Sir, first of all, [indiscernible] always smiling face, sir. My bottom of the heart, saying this word, sir. Thank you, sir, integrity and commitment [indiscernible]. Sir, [indiscernible]. We have 100% confident, sir. Sir, as a shareholder, we are very happy about the company performance of financial '22, sir. Sir, you have given a very good nice information speech about you, sir. And also colorful and wonderful and nice annual reports that we have seen, sir. Sir, we have good memorable photographs with you, sir, CCL best of brand [indiscernible]. Sir, I would like to thank and appreciate this corporate governance, sir. Corporate governance, wonderful governance, Sir. World-class, transparent governance, maintenance governance like especially ethical, accountability, transparency, especially integrity [indiscernible], sir. [indiscernible] when a company [indiscernible] integrity [indiscernible]. Sir, that's the reason I'm -- special kudos to all the [indiscernible] of this company and especially company secretary, Sridevi Garu. Sir, financial, as we say, strong performance [indiscernible], the consistent growth [indiscernible] wonderful year-on-year growth, sir. Thanks for this dividend also. Sir, we are exporting 90 country, Sir. Very wonderful. We are very proud, sir. World favorite brand Continental Coffee. Sir, strong -- world-class standards [indiscernible]. That's the reason, sir. Congrats on all the wonderful performance this quality meeting, Sir. Sir, [indiscernible] appreciate and [indiscernible], especially sir. We have [indiscernible] awards, sir. It took [indiscernible]. We have received this 2020 and '21, sir. We are very happy, sir, [indiscernible] so we are achieving, sir, Continental Coffee best own, best brand in the 2022 award [indiscernible] group [indiscernible] with India today. Wonderful, sir. Go ahead, sir. [Foreign Language] Required amount is only 458 lacs, but you have spent 492 lacs. We are building very good homes with promotion and dedication, and promotion of health, housing, economy. Rural development also very good. [Foreign Language] Any drop points in tribal areas? Please provide them vocational courses. Thank you, sir. Sir, question and answer [Foreign Language]. No questions, Sir. [Foreign Language] I'm very happy to give a service as an financial adviser, sir. [indiscernible] I will mail if you have any queries. [indiscernible] Always reachable and nice and humility person, Sir. [Foreign Language], sir. Sir, on the regulation already in e-voting [indiscernible]. Sir, I would like to thank company secretary [indiscernible] and his wonderful team, sir. The company secretary role is very important, sir. [Foreign Language]. At the same time, obligation [indiscernible]. Sir, I think she is doing 100% his roles, sir. That's the reason [indiscernible]. Go ahead. Look at him. [Foreign Language]. Company Secretary Department [indiscernible] is the #1 associate, sir. [Foreign Language]. My best wishes to the entire team of this company. [Foreign Language]. Sir, I personally believe that, sir, the company will achieve many more higher awards and recognitions under the leadership of the one and only Challa Rajendra Garu, Sir. I wish all the best, good health and happiness to continue the society, sir. [Foreign Language].

Thank you. Namaste. Okay. Next.

Next speaker, Subharti Sharaf.

Just give me a minute. Subharti Ji, you're there?

[indiscernible] One minute, Sir. I'm a joint holder in [indiscernible]. Sir, video? Operator?

Yes. Turn on the video, please.

[Foreign Language].

Next speaker, [indiscernible].

Yes, I'm unmuted now. Respected Chairman, Challa Rajendra Prasad; MD, Challa Srishant; and CEO, Praveen Jaipuriar; CFO, Lakshmi Narayana. Good afternoon to everyone, sir. I'm speaking from Mumbai. I'm a proud shareholder of coffee CCL products. It has given a good capital appreciation over a period of time. The vision of the promoter, Rajendra Prasad is expanding capacity also in Vietnam this year by 16,500 tons and even in Hyderabad 16,000 tons sprayed-dried products. I'd like to know what is the total CapEx that you're planning for these 2 projects that you're getting done? And I'm happy that the dividend that you've declared is 3 plus 2 -- on face value of INR 2. That is a 20 -- 50% dividend you have given, sir. And even on the CSR front, sir, the mandate was only to do INR 4 lakh -- INR 4,58 lakh, but you exceeded that, and you've done INR 4,92 lakh. That is 34 lakh more than the amount that was required by you to do in CSR. Then most of your CSR worker have done [indiscernible] INR 127 crores this year against last year INR 158 crores. This has come down on the stand-alone basis, largely due to the lesser dividend income received from your subsidiary last year. Last year, the dividend income of INR 6,000 -- INR 60 crores, and this year only INR 26 crores. So that has brought down the -- on the stand-alone basis the PAT on the stand-alone basis. Your coffee is doing very well, sir, and even your Continental Coffee in Switzerland. But the -- your local coffee Continental Private Limited in India has shown a loss. Sir, I am sure that with your guidance and your hard work and your management team, will look into it and bring it into profit and it will be positive from next year onwards, sir, and I wish the company all the best for future and thankful to Madame Sridevi for helping me join. She's very polite and soft spoken person. Whenever you have a chance to speak to her, at least I've had 1 or 2 chance. She's very polite and very humble and -- to speak to, sir. I'm thankful to her for making me join this AGM today and I voted for all the 12 resolutions that was sought to be passed in today's AGM. Thank you, sir. Signing off [indiscernible] from Mumbai.

Thank you, [indiscernible]. Thank you.

Next speaker [indiscernible].

Hello. Can you hear me, sir?

Yes.

Sir, sir, video, sir.

Rumesh, Go ahead, please.

[Foreign Language] Thank you, sir. Have a good day. God bless you all, sir.

Thank you.

Next speaker, [indiscernible].

Please go ahead. [indiscernible], can you hear us? Please go ahead.

Or can we go to the next speaker, meanwhile?