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

Good morning, ladies and gentlemen. I welcome you all to the 62nd Annual General Meeting CCL Products India Limited, and appreciate your interest in being with us today. As this meeting is being held using video conference or other audiovisual means mode, I would like to take you through certain points regarding the participation at this meeting. [Operator Instructions] 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 as required in the company's act 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; our Managing Director, Sri Challa Srishant; our Executive Director, Sri B. Mohan Krishna; our Independent Director, Sri Vipin Kumar Singal, who is the Chairman of CSR Committee; Sri Kata Chandrahas, who is the Chairman of Audit Committee and Stakeholders Relationship Committee; Sri G.V. Krishna Rau, who is the Chairman of Nomination Remuneration Committee; Sri Kode Durga Prasad; Sri K. V. Chowdary; Smt. Kulsoom Noor Saifullah; Dr. Lanka Krishnanand; and our Non-Executive Directors, Smt. Challa Shantha Prasad; Sri K. K. Sarma; and Sri Satyavada Venkata Ramachandra Rao to the 62nd Annual General meeting through video conference mode. I also welcome our CEO, Sri Praveen Jaipuriar; our CFO, Sri V. Lakshmi Narayana; our Statutory Auditors, Sri K Srinivasan; and Lakshmi; our Secretarial Auditors, Sri Vikas Sirohiya, who is the Scrutinizer; and Scrutinizer Mr. M.B. Suneel to this AGM through video conference mode. Now I -- may I now request Sri Challa Rajendra Prasad, our Executive Chairman of the company, to conduct the proceedings of the meeting.

Good morning, shareholders. I feel privileged to welcome you all to the 62nd Annual General Meeting of your company. In lieu of the presence of requisite quorum, I call this meeting in 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 video conference, more pursuant to the directions of the Ministry of Corporate Affairs and Securities of Exchange of India, the live streaming of this meeting is also being webcast on the CDSL platform. The remote e-voting commenced on Saturday, 19th August 2023 at 9 a.m. and concluded on Monday, 21st August 2023 at 5:00 p.m. Sri M.B. Suneel, practicing company secretary, was appointed as Scrutinizer to scrutinize the votes cast through remote e-voting process and through e-voting process during AGM in a fair and transparent manner. Since the annual report is already circulated to all the members, I take this as read. [Audio Gap] Chairman's speech. Ladies and gentlemen, a warm welcome to the 62nd Annual General Body Meeting of your company. It gives me great pleasure and joy to update you on the progress we have made during the financial year 2022-'23 and mention our plans for the future. Before I continue, I want to express my advert gratitude to all the shareholders for their unwavering support and faith of the company. Your trust remains the foundation of our efforts as we look back to our achievements and ahead of -- to our new goals. You have had a chance to go through the annual report and audited financial statements for the year 2022-'23. It is all right with you. If it is all right with you, I'll consider them as read. I am happy to share that we have achieved 2 significant milestones during the year. Once we have crossed INR 2,000 crores turnover mark, which is a testament to our collective dedication. Second, we have also crossed the USD 1 billion mark of market cap of the company during this financial year. Let's talk about performance during the year. As a group, we have done well. Consolidated figures show a turnover of INR 2,071 crores, with a net profit of INR 268 crores. On a stand-alone basis, our turnover stood at INR 1,335 crores, and we have earned a net profit of INR 167 crores. This includes a dividend of INR 37 crores from our wholly owned subsidiary in Vietnam. Now a few words about our subsidy companies. First, Ngon Coffee Company Limited in Vietnam, our only own subsidy. They operated now for 10 years, achieved a turnover of INR 647 crores and a net profit of INR 146 crores. In the year '23, the manufacturing capacity of the -- was increased around 13,500 metric tons per year to 30,000 metric tons per year, and an additional 6,000 tonnes annual capacity will come online in the year 2025. Next, Continental Coffee SA in Switzerland. Another wholly owned subsidiary, it has achieved a turnover of INR 296 crores and a net profit of INR 12 crores. Thanks to the hard work of our Managing Director, Mr. Henry Goffaux and his team, the company's operations are profitable. Efforts to secure orders from local supermarkets are paying off and growing steadily. We are looking forward to build on this foundation. In the domestic market, we achieved a turnover of INR 208 crores. We are steadily gaining ground and have achieved the distinction of being the -- recognized as the 3rd largest instant coffee brand in the Indian domestic market. Our products are now available over more than 100,000 outlets. We are expanding our distribution very rapidly. As you are aware, during the year, your company and Continental Coffee Private Limited entered into a scheme of arrangement, whereby the coffee division of the Continental Coffee shall be demerged into parent company CCL, effective from 1/10/2022 being the appointed date, considering various advantages that would endure upon the proposed demerger, such a dedication focus on the respective business, insulation from each other's business risk, enhancement of shareholders' value, greater economies of scale and efficient utilization of resources. The Board of Directors of both the said companies in their respective meetings have approved the sales team. Further, the respective secured creditors and unsecured creditors have also provided their consent to the said scheme. Final approval is awaited from NCLT. Moving forward, we are excited about the plant-based protein snacks, Continental Greenbird, developed by Continental Coffee Private Limited. This diversification beyond coffee is a small step and we are hopeful developing this business. We are targeting both consumers and HoReCa channels for expansion. We have also made strategic acquisition of brands like Percol and Rocket Fuel from Food Brands Group U.K., which will help us as well as to penetrate the U.K. Market and our own brand and possibility of launching scheme in other areas in due course. Our capacity expansion has been remarkable. Over the years, we have increased capacity and positioned ourselves as the world's largest private label soluble coffee manufacturer. In your company's growth capacity from 30,000 tonnes per annum to 55,000 tonnes per annum in '23, we are further aiming to expand to 75,000 to 77,000 metric tons per annum by 2025. This kind of systematic and sustainable expansion over the years is especially remarkable considering the global market is growing in a very slow single-digit. In conclusion, I want to thank the entire CCL family for their unwavering support. My gratitude towards -- to extend it to all our employees, colleagues, customers, distributors, bankers, business associate, collaborators, state and central government authorities. I also thank -- expressed my appreciation to our shareholders for their confidence and support. We are committed to creating value and living up to the trust you have placed on us, and we continue to progress and grow and look forward to your ongoing support. Thank you very much. As the notice of the Annual General Body Meeting's since already been circulated was taken as read with the permission of the members and the auditor's report was also taken as read. Now in times request, Sridevi, Company Secretary to read out the agenda items of the notice for the information of the members.

Thank you, sir. Now I'm reading out the ordinary business items. First one is to receive, consider and adopt the audited stand-alone financial statement of the company for the year 2022-'23, together with the report of Board of Directors and auditors thereon; and the audited consolidated financial statement of the company for the year 2022-'23, together read -- with the report of the auditors thereof. Second item is 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 18th January 2023 for the financial year 2022-'23. Third item of business is to declare a final dividend of INR 2.50 per equity share of INR 2 each to the shareholders for the financial year 2022-'23. Fourth item is to appoint Smt. Challa Shantha Prasad, who retires by rotation as a Director. Fifth item of business is to appoint Sri K. K. Sarma, who retires by rotation as a Director, and this item of business has to be passed as a special resolution. Now I'm going to read out the special business items. To consider and if thought fit to pass without modifications, the following resolutions are special resolutions. Sixth item of business is the reappointment of Sri Durga Prasad Kode to the office of the Independent Director. Seventh item is to reappointment of Smt. Kulsoom Noor Saifullah, to the office of Independent Director. Eighth item, reappointment of Sri K.V. Chowdary to the office of Independent Director. Ninth item, appointment of Dr. Krishnanand Lanka, to the office of Independent Director. 10th item, appointment of Sri Satyavada Venkata Ramachandra Rao, to the office of Non-Executive Director. 11th item, reappointment of Sri Challa Srishant, to the Office of Managing Director. 12th item, reappointment of Sri B. Mohan Krishna, to the office of Whole-time Director. 13th item, Ratification of Remuneration to Cost Auditors. This item can be passed by passing ordinary resolution. Further, I would like to inform you that pursuant to provisions of Section 108 of Companies Act 2013, read with Companies Management and Administration Rules 2014, the company has extended e-voting facility to its members in respect of all the business items to be transacted at the 62nd AGM of the company. The e-voting commenced on Saturday, 19th of August 2023 at 9:00 a.m. and concluded on Monday, 21st August '23 at 5:00 p.m. The facility of e-voting to those shareholders who have not cast their vote using remote e-voting is also available now. Members may cast their vote simultaneously, while watching the proceedings of this meeting on the CDSL e-voting web page. As I mentioned earlier, the company has appointed Mr. M.B. Suneel, Company Secretary as Scrutinizer to scrutinize the votes, pass through remote e-voting process and through e-voting process during AGM in a fair and transparent manner. This AGM is being held through video conference, other audio visual means mode and the resolutions mentioned in the notice convening this AGM have already been put to vote through remote e-voting and through e-voting during this AGM.

Now I take the questions, and we invite the speakers.

First speaker for the session is Sri Praful Yadav.

[Foreign Language]

[Foreign Language]

Chairman sir, Board of Directors. [Foreign Language] Rajendra Prasad sir [Foreign Language] Venkat Vada -- Venkat Satyavada -- Venkat Ramachandra [Foreign Language] Mohan Krishna sir, K. K. Sarma sir [Foreign Language] 1 decade company [Foreign Language] So 1 decade [Foreign Language], 10 years [Foreign Language].

Thank you, Prafulji. [Foreign Language] Okay? Thank you.

Next speaker, Sri Suresh [ Shan Jain ].

Suresh sir, kindly unmute and speak.

[Foreign Language] shareholder. Sir [Foreign Language] [Foreign Language] Chairman history [Foreign Language] excellent [Foreign Language] IPO [Foreign Language] shareholder, [Foreign Language] Asian Coffee [Foreign Language] shareholder [Foreign Language] share [Foreign Language] return [Foreign Language] new high [Foreign Language] 700 [Foreign Language] INR 2 bonus, total value [Foreign Language] 7,500 shares [Foreign Language] Hello? [Foreign Language] technical problem [Foreign Language] company acquisition [Foreign Language] last year, 3-year growth [Foreign Language] revenues [Foreign Language]? [Foreign Language] electric vehicle [Foreign Language] city local supplying [Foreign Language] electrical vehicle use [Foreign Language] fuel, power [Foreign Language]expenses control [Foreign Language], sir? [Foreign Language]

Thank you, Srikanth. Srikanth [Foreign Language] product, manufacturing [Foreign Language] European company [Foreign Language] European company [Foreign Language] coffee [Foreign Language] interest [Foreign Language] sales [Foreign Language] shareholders or collaborators [Foreign Language] Thank you.

Next speaker Sri Vinod Agarwal.

Vinod sir, kindly unmute and go ahead.

Yes. Can you hear me? Respected Chairman Mr. Challa Rajendra Prasadji; our MD Challa Srishantji; the CEO, Mr. Praveen Jaipuriar; and our CFO, Lakshmi Narayana; and our CSC Sridevi Dasari. Good morning and congrats to everyone I've voted for all 16 resolutions. I've already sent a detailed e-mail to the company with my observations and queries on the annual report. But I just like to just say 1 or 2 points, sir. We acquired the 6 brands of Löfbergs last year at a discounted price of INR 5.5 crores against its true value of INR 18 crores, which is a very good buy for us sir, and this will take our branded business of B2C segment internationally now. We already we were there associated with Löfbergs, but now this will be our own owned brand, which will take us international. We already have our own brands in the domestic markets for Continental Xtra, Continental Speciale, Continental Strong and Malgudi for roasted and ground coffee. Sir, we have made our retail presence in 1 lakh outlet, which is very good. And during the year 2023, we surpass the top line of INR 2,000 crores. It's a new milestone. And we also had a market cap crossing $1 billion, which also was very good, Sir. And Sir, I'm thankful to Madam Sridevi and [ Lakshmi ] from his team for helping me join today's AGM, sir. And my other observations are there in my email sent to you, I am always proud of a shareholder with your vision of being -- creating this company from scratch, sir. You're an engineer here, technocrat and now you became an entrepreneur turnaround in USA in 1994. And started this company, which is very good, sir. And you've taken international big giants by their horns and taken -- means you've become a marketing name all of the world and the coffee world, sir. I wish you all the best, sir, and the company all the best, sir. Vinod Agarwal from Mumbai.

Thank you, Agarwal.

Next speaker, Sri Kankanala Bharatraj.

Bharat, sir, kindly unmute and speak.

Sir, a wonderful performance by the entire Board of Directors. Chairman, sir, first of all, congratulate you on consolidated basis we crossed INR 2,000 crores. Wonderful achievement, Mr. Chairman. Mr. Chairman, the dividend payout, sir. Wonderful, sir, every year you're increasing. Thank you for giving the wonderful dividend payout. And I congratulate the management for acqu [Audio Gap] from U.K., it is wonderful, sir. We are in -- you're making my competent internationally branded company. Thank you very much. Chairman, sir, in the resolution, I've seen the ESOPs. Here ESOPs are very good encouragement for our employment, congratulate you to encouraging our employees to ESOPs. Chairman, sir, CSR is wonderful, sir, there is no point -- there is no need to give a black spot -- any black spot about the CSR. And congratulate the entire management and Board for the best award for the water service. EHS, you're concentrating on the environmental safety, is wonderful. I congratulate the entire Board for taking care of the environment. Chairman, sir, our CCL Food and Beverage company newly started, and you recently seen the plant in Tirupati, sir. Please give me some glimpse about the factory and what are the products you want to give, sir? And Chairman, sir, whenever I visit the Metro, I see our Continental outlets. So I'm very proud, sir, you're making my brand all over the Metro stations wonderful, sir. I used to test out -- the beauty in that outlet is -- I love this Chaco Cake, sir. Wonderful sir. And the beverages is also wonderful. Thank you. You're making the brand of CCL wonderful position, sir. Chairman, sir, there is no issue, sir. My best wishes to you, all the best to you, sir. And with me, Mr. Reddappa Gudalur is there. Due to technical reason, he cannot arrange -- he cannot attend -- log in that. Please allow Reddappa Gudalur. Chairman.

[Foreign Language] Sir, my name is Reddappa Gudalur, I'm from Hyderabad, I'm a financial adviser. Sir, I have received the annual report well in advance. I've gone through the annual report. There is a very wonderful figures and everything information colorfully is maintained, sir. I felt very happy that's a reason, special thanks to the preparation team of annual report. And also, I found that there is a wonderful world-class transparent governancy under the leadership of Challaya Garu. So there is a -- I found that there is a transparent governancy, ethical is, overall, I can say there is integrity, sir. So thanks to that, sir. Financial also sir, my company performing consistent growth, consistent dividend track, wonderful achieving year-on-year, sir. So no need to talk about the financials, wonderful financial, sir. Sir, and also, we are receiving several many awards across global. We thank you, sir, and keep it up. CSR also, no need to talk about CSR. Wonderful CSR under your leadership, sir. You're a kind heart, sir. God will bless you, sir. And also, sir, I found that there is no questions in balance sheet, sir. I read and gone through the all annual report, sir, single question not found, sir. So here just to give me your next vision, sir. We already reached a very good milestone. Higher milestone. So next what type of your mission and vision, sir? So just to give me this vision, sir. There's no question at all. I have already supported all the resolution and special thanks to Company Secretary Sridevi Madam and her team. Wonderful, always reachable, sir. Whenever I have any queries and any issues, there is always reachable, sir, through e-mail and all. So I would like to thank the entire team of Sridevi Madam. God bless you, Madam. Keep it up, sir. I believe that under leadership of Challa Garu and dynamic young and young leaders, sir. The company will achieve many more higher amazing awards, sir. Hopefully. So I thank you management. I wish to you good health and happiness to you sir.n God bless you, sir.

Okay. [Foreign Language] already one of the biggest plant [Foreign Language] 5,000 tonnes. Then also, we have put the biggest packing facility [Foreign Language] we are already start [Foreign Language] by next year [Foreign Language] 16,000 to 17,000 tonnes of instant coffee powder [Foreign Language] So that also will be the next year, financial year, [Foreign Language] we'll be in production. [Foreign Language] So thank you very much, thank you all of you.

No more speakers, sir. We have completed all the speakers queries. Now we can proceed to closure.

So all the thanks. I want to thank all the shareholders for taking the initiative for joining the meeting through video conference and also working with us patiently to conduct this meeting. I thank all the directors who are joining this meeting from various parts, places. I now authorize Mr. M.B. Suneel, Scrutinizer, to complete the e-voting procedure and Ms. Sridevi Dasari, Company Secretary to conclude the meeting. With your consent, I and other Board members would like to leave the meeting. We wish all the members a healthy future and take care of your families and health. Thank you very much.

The e-voting facility will remain open for the next 15 minutes to enable those members who have not casted their votes, who would like to cast their vote. The results will be announced on or before 24th of August 2023, and the same would be intimated to stock exchanges and uploaded on the website of the company and of CDSL. With this, I declare the 62nd AGM as concluded.