Nestlé India Limited (500790) Earnings Call Transcript & Summary

Dear members of Nestle [Foreign Language], good morning, and welcome to the 63rd Annual General Meeting of Nestle India Limited through videoconferencing or other audiovisual facility. [Operator Instructions] Please note, as per the requirements, the proceedings of the Annual General Meeting will be recorded and available on the company website. Without any delay, I hand it over to Mr. Suresh Narayanan, Chairman and Managing Director of Nestle India Limited.

Thank you, Inba. [Foreign Language], dear members. It is my privilege to welcome you to the 63rd Annual General Meeting being conducted through videoconferencing facility. This is my 7th AGM as the Chairman and Managing Director and the 3rd virtual AGM of the company. To begin with, I hope that all of you and your families are keeping well and safe, and we are hopefully coming out of this pandemic. Though I missed the privilege and pleasure of meeting you in person, the virtual AGM is a progressive step as it allows members irrespective of where they are physically present anywhere in India or even abroad to participate in the Annual General Meeting. Lots of planning and efforts have gone behind the virtual AGM of the company today with the objective that your participation is must. Although COVID-19 pandemic seems to be waning down, it is advised that we follow the safety protocol. I myself, all executive directors, Company Secretary and company officials are participating from our office at Gurgaon. All our independent directors are participating from their residents or other outside location. If there is any disturbance in the AGM due to this, I seek your liberty in advance due to the unavoidable situation. Let me now introduce illustrious Board members on the screen. Ms. Rama Bijapurkar, Independent Non-Executive Director, Chairperson of the Stakeholder Relationship Committee and member of the Corporate Social Responsibility Committee. She is participating from Mumbai. This would be her last Annual General Meeting as she is not standing for reelection and retiring at the end of her tenure on 30th April. On behalf of the Board and myself, I wish to record and place on record our sincere gratitude for her very valuable contributions, wisdom and direction to your company as an Independent Director from 2017 to 2022. Mr. P. R. Ramesh, Independent Non-Executive Director and Chairman of the Audit Committee and member of the Nomination and Remuneration Committee and the Risk Management Committee, is participating from Secunderabad. Mr. Rajya Vardhan Kanoria, Independent Non-Executive Director, Chairman of the Nomination and Remuneration Committee and member of the Audit Committee and Stakeholders Relationship Committee, he is participating from Delhi. Mr. Matthias Lohner, Executive Director, Technical and Permanent invitee to the Corporate Social Responsibility Committee participating from Gurgaon. Dr. Swati Piramal, Independent Non-Executive Director, Chairperson of the Corporate Social Responsibility Committee. She is participating from the United States of America. It is now a little past midnight in the U.S., and I greatly appreciate Dr. Piramal for joining at this hour and giving the AGM its due importance. Ms. Roopa Kudva, Independent Non-Executive Director, member of the Audit Committee, Nomination and Remuneration Committee and the Risk Management Committee, she is participating from Mumbai. Due to her other increased professional responsibilities, she has stepped down from the Board of Directors effective from 31st May 2022. So this too would be her last Annual General Meeting. On behalf of the Board and myself, wish to record our sincere gratitude for Ms. Kudva's valuable contributions, wisdom and direction to your company as an Independent Director from 2019 to 2022. Mr. David McDaniel, Executive Director, Finance and Control and CFO, member of the Corporate Social Responsibility Committee, Stakeholder Relationship Committee and the Risk Management Committee. He is participating from Gurgaon. Finally, I have the privilege of introducing Mr. B. Murli, General Counsel and Company Secretary. He is participating from Gurgaon. Today is also a regulator day for Murli. The company has grown to its size and existence because of the dedication, the hard work, the wisdom, the ethics and the contribution of all employees, be they men or women. Mr. Murli today has the distinction of participating in the 25th AGM that he would be participating as the Company Secretary. So 25 AGMs, Mr. Murli has been steadfast with the company. And in times when we were personally meeting not so long ago, he used to be, along with Mr. Rajendra Agrawal, Mr. Pramod Rai, Mr. Gunjan Arya and a few others, the pivot of these meetings. Mr. Murli will also be retiring from the services of the company this year. And therefore, it is my privilege to record my sincere gratitude for all the wisdom and for all the standards that he has set for this company in maintaining the high standards of governance that we have come to be known for. So thank you, Murli, for all that you have done for the company. The Company Secretary has advised me that the quorum as required under law is fulfilled, and I declare the meeting as validly convened. I also formally acknowledge the participation of the partners and authorized representatives of the statutory auditors, the cost auditors and secretarial auditors. The statutory registers required to be there during the AGM are available for inspection on the NSDL website under the tab AGM documents. The Board report for company's performance during 2021 is already available with you in the annual report. Before I present my thoughts on the year gone by, please allow me to share this quote that seems so relevant to the times we are in. Mahatma Gandhi, the father of our nation, once said, carefully watch your thoughts, for they become your words. Manage and watch your words, for they will become your actions. Consider and judge your actions, for they have become your habits. Acknowledge and watch your habits, for they shall become your values. Understand and embrace your values, for they become your destiny. 2021 was a very dynamic year, and I think it is important to reflect on what intrinsic strengths your company has and look ahead with hope and a lot of pride at what has been achieved over this period of time. Your company is committed towards being a force for good as we move together towards a journey focused on our culture and purpose, environmental sustainability, societal and people initiatives while enhancing our footprint and evolving with the times. Allow me to touch upon a few themes that have made this happen. Culture and purpose in action. Your company in Sanand factory in Gujarat is now fully operational and striving for the highest standards in sustainable operations as well as diversity and inclusion. The factory was built entirely during the pandemic period. It is a tribute to the dedication, ingenuity, commitment and tenacity of all the colleagues and partners for whom impossible was not a word. Sanand factory is a gem, a Navratna as we call it, because it is your company's most digitally and environmentally advanced factory. It is equipped with state-of-the-art biomass boilers, helping in reducing the carbon emissions through cleaner fuel and hybrid power. This factory will also be your company's first fully digitally integrated unit with complete digital manufacturing operations. Strengthening your company's commitment to diversity, your factory will have a separate social building block for female employees and a dedicated parking area for expecting mothers along with the creche. The facility is also equipped with ramps to ensure ease of mobility for specially-abled people. Relationships, partnerships, trust, dignity and respect are at the center of the Nestle business framework. Your company treats all trade partners with respect and fairness. Your company takes steps to support not just employees, but also its partners. Your company engages with thousands of frontline people who work as distributor salesman, loaders and merchandisers and their safety and well-being is of paramount importance. Your company has stepped up efforts in this hour of need and has taken numerous steps to support stakeholders like a family. Your company was like a banyan tree for over 4,000 suppliers, many of whose business is dependent on the Nestle India ecosystem. Your company supports an increasing number of suppliers for their working capital needs while working closely along with them across the value chain. Your company also helped suppliers who needed support to get permission to operate and help them in starting up their operations during the pandemic while training them in COVID protocols. Your company also conducted training and organized mask distribution to drivers who transport your company's products. The second theme, I wish to touch upon is environmental sustainability. Protecting and preserving the planet is part of your company's values. Within factories, there are continuous efforts to improve operational efficiencies, minimizing consumption of natural resources and reducing water, energy and CO2 emissions while maximizing production volumes. Your company has accelerated its sustainability journey by working across 4 focused areas relating to climate, packaging, sourcing and water. Your company collected and managed 23,600 metric tons of plastic and all the brands of your company are plastic neutral. Your company has reduced the use of plastic in packaging by 8.6% since 2018. Your company has taken a pioneering status of eliminating 30 million plastic straws annually and has replaced those with paper straws that are responsibly sourced for its ready-to-drink portfolio, and this journey has started with the Nescafe range of cold coffees and Milo RTD. This year marks the 10th year of the Nescafe plan. During these 10 years, your company has engaged with more than 4,400 coffee farmers, 2,400 of them being certified 4C in 251 villages across Karnataka, Kerala and Tamil Nadu. I'm very heartened by the positive and sustained change in the livelihoods of coffee farmers and their families that the Nescafe plan has brought. The plan has also made an impactful contribution in reducing water usage at farms by 23%, while resulting in an increase in yield by up to 18%. Such visible change through constructive and respectful partnerships with coffee farmers gives your company even greater inspiration to extend this initiative to other farm interventions across India. As far as spices are concerned, your company is one of the biggest users of spices in this country. Maggi's legacy of almost 4 decades rest on the rich aroma of the tastemaker and how it became a must-have in the kitchen across households. Your company launched the Maggi spice plan that ensures sustainable sourcing of spices by working on 3 aspects: planet, people and profits for the farmers. The spice plan today ensures traceability, which is important to establish that the spices are free from harmful pesticides and additives and is touching the lives of almost 1,300 farmers every year spread across 39 villages in 7 states. The third theme I would like to touch upon is societal initiatives. It has been 2 years since COVID-19 has transformed our lives. The pandemic has redefined compassion, empathy, values of families, organizations and people. Your company rose to the challenge of the current pandemic by continuing the fight against COVID-19. In moments of crisis, our strong values and purpose ensures that we never lose sight of being a force for good. Your company's initiatives includes contribution of 4.4 million cooked meals and 124,500 grocery kits since the pandemic began. Further, your company has set up oxygen plants across 5 locations as part of COVID relief. Your company also provided health care equipment, PPE, masks, oximeters, face shields, gloves, sanitizers and more. Through these relief efforts, your company has reached out to the people across 28 states and 6 union territories. Your company is focused on serving society and has been working towards building a healthier tomorrow, positively impacting the lives of the beneficiaries. Your company's flagship societal initiative, Nestle Healthy Kids program, in partnership with Magic Bus India Foundation expanded to lay this year, reaching out to 650 beneficiaries. The Nestle Healthy Kids program has benefited nearly 445,000 young adults across 23 states and union territories over the last decade. Your company's Project, Jagriti initiative has positively impacted the lives of over 8.4 million beneficiaries over the last 5 years across 8 states and union territories. As part of the vision of strengthening community-led rural development for positively impacting the lives of people, Project Vriddhi in collaboration with the SM Sehgal Foundation has touched the lives of 1,500 beneficiaries. In its second phase, the program is benefiting around 1,300 people through the adoption of 2 more villages. Your company's clean drinking water project has supported 150,000 students with safe water consumed. Your company has also empowered education for nearly 240,000 girl students through the provision of adequate sanitation facilities and schools. Your company's Project Serve Safe Food initiative has enabled and empowered 25,900 street vendors across 19 states through training interventions, through food quality and safety. I now come to the people initiatives. After a successful launch of Nesternships in 2020, your company rolled out Nesternships 2.0, focusing on upskilling 1,000 interns to help them thrive in workplaces. Your company recently also launched Nesternship 3.0 and has started onboarding the selected interns. Further, the Nest Vidya Initiative enabled learning anytime, anywhere for our field force. Increasing diversity as a theme at your company is a leadership imperative and not tokenism of a superficial kind. About 24% of the workforce of your company are now women. Your company has moved a fair degree on this. In 2021, 43% of all the recruitments that were done within the company were women candidates, and it is a trend your company plans to continue this year as well. It is a matter of great pride for your company that about 70% of the factory workforce in the Sanand factory are women. Your company intensified focus on well-being, increased mental health coverage for employees, provided vaccination support and stood by the families of colleagues who unfortunately succumbed to the pandemic, expanding our footprint and evolving with the times. To better penetrate the market, your company through the granular cluster-based approach powered by data and technology, deepened its engagement into newer towns and villages. Your company progressed firmly and resolutely on its rurban journey that was accelerated further by using a healthy mix of customized portfolio and building deeper consumer connect. Your company set out firmly and resolutely on its rurban journey by using a healthy mix of a customized portfolio, direct distribution and enhanced distribution infrastructure, deployment of resources, regional and localized communication, enhanced visibility, participation in village hearts and building consumer connection. Through Project Rurban, your company reached out to small towns with population less than 100,000 and large villages with population greater than 2,000 that offer long-term growth opportunities. Your company delivered strong rural growth performance in addition to sustained growth in smaller towns, classes and urban agglomerates. Digitalization is a growth accelerator for your company and will continue to be so in the future. Leveraging the power of data and analytics is your company's business strategy. It has a multi-intelligent data analytics system that sources internal and external data to converge insights that trigger swift and decisive business actions. In 2021, your company further accelerated use of virtual and digital platforms to build scale and intensity in training sales teams for continuous learning and engagement, covering around 650 sales employees and 8,400 field force of business partners. Through this model of training of leveraging network of internal subject matter experts, customized content and global expertise, the sales teams motivated employees to learn and improve performance. Further, automation and digitization across the supply chain enhanced efficiency in processes and speed to market, providing transparency to suppliers, farmers, customers and consumers. A simple yet innovative example of this was the timely implementation of a telecaller model to take orders across trade channels. I started my speech with a few words from Mahatma Gandhi. So it's fitting that we end with another famous quote from this great man. It's the action, not the fruit of the action that's important. You have to do the right thing, it may not be in your power, may not be in your time, that there'll be any fruit. But that doesn't mean you stop doing the right thing. You may never know what results come from your actions. But if you do nothing, there will be no result. On behalf of the Board of Directors of the company, I would like to especially thank the shareholders for the support and confidence in the company over the years and particularly during these difficult times. I also take the opportunity once again to thank Mr. Rama Bijapurkar, Ms. Roopa Kudva and our own Mr. Murli for their strong contributions and for their service to this fine company. Wishing all of our shareholders the very best of health. Thank you all once again for your patient listening. I will now take up the notice of the 63rd Annual General Meeting dated 4th March 2021, which together with the audited accounts and Board's report has been duly sent to the members by e-mail or post and public notice published in newspapers as stipulated. The auditor's report for the year ended 31st December 2021, does not have any qualifications, observations or comments on financial transactions or matters, which have any adverse effect on the functioning of the company. In view of the same, there is no need to read the auditor's report. Your company provided members remote e-voting facility on the AGM agenda items from 9th April 2022 from 9:00 a.m. to 11th April 2022 till 5:00 p.m. E-voting facility is available at the meeting. And as mentioned in the notice, at the end of discussion on the resolutions on which voting is to be held, there will be electronic voting using the e-voting platform of NSDL for all those members who are participating in the meeting, but have not cast their votes by availing the remote e-voting facility. The icon for e-voting is available on the top of your screen, which will redirect you to the e-voting portal of NSDL. The e-voting facility is active and will be closed along with the closure of the meeting. I will now proceed with the agenda as per the notice of the AGM with 4 ordinary business items listed as agenda items 1 to 4 and 2 special business items listed as agenda items 5 and 6. Agenda item 1 for the adoption of the audited financial statements of the company for the year 2021, including the balance sheet as at 31st December 2021, the statement of profit and loss and cash flow statement for the year ended on that date and the reports of the Board of Directors and auditors thereon. Agenda item #2, for the confirmation of payment of 2 interim dividends aggregating INR 135 per equity share for the year 2021 and declaration of final dividend of INR 65 per equity share of INR 10 each for the financial year ended 31st December 2021. And agenda item #3, for the appointment of a director in place of Mr. Matthias Christoph Lohner, who retires by rotation and being eligible offers himself for reappointment. Agenda item #4, for appointment of S.R. Batliboi & Company LLP, Chartered Accountants as the statutory auditors of the company in place of Ms. B.S.R. & Co. LLP, Chartered Acountants, the retiring statutory auditors, to hold office for a term of 5 years from the conclusion of the 63rd Annual General Meeting until the conclusion of the 68th Annual General Meeting of the company to be held in the year 2027. Now the two special business items, which in the opinion of the Board is considered unavoidable Agenda item #5 for the ratification of remuneration of Mrs. Ramanath Iyer & Company, Cost Auditors for registration 00019 appointed as the cost auditors by the Board of Directors of the company for the year ended 31st December 2022. And agenda item #6 for the appointment of Ms. Anjali Bansal as Independent Non-Executive Director of the company with effect from 1st May 2022 to hold office for a term of 5 consecutive years that is up to 30th April 2027, who has submitted a declaration that she meets the criteria for independence as provided in the Companies Act 2013 and listing regulations and in respect of whom the company has received notice in writing under Section 160 of the Act. This year also being a virtual AGM, there are 3 ways in which members can ask questions on the AGM agenda items. The first way is that for members who have preregistered as a speaker at least 48 hours in advance of the meeting at the designated investor e-mail address of the company as mentioned in the notice of the AGM. Secondly, members who have submitted their questions 48 hours in advance of the meeting at the designated investor e-mail address of the company as mentioned in the notice of the AGM. And finally, members can, during the meeting, post messages in the communication box available on the screen to each member participating in the meeting. So if members have missed preregistering as speaker or submitting questions in advance, they can also ask questions by posting messages on the communication box available on the screen. I would request Mr. Pramod Rai to collect the questions and share with me after I take up the questions from the speakers and e-mails received by the company. I will now request Inba to invite the esteemed members who have preregistered in advance as a speaker. In the interest of time, I would sincerely request all speakers to restrict their questions to a maximum of 3 minutes. They will respond to the questions asked by the speaker and then take up the question from the next speaker.

Thank you, Chairman sir. I would now like to invite our first speaker member, Mr. Santosh Kumar Saraf from Kolkata, having client ID #10080328, to speak.

[Foreign Language]

[Foreign Language] Thank you.

I now invite next speaker member, Mr. Sarvjeet Singh, from Delhi, having client ID #1201910102090517, to speak.

Chairman sir, can you hear my voice? Hello?

I can hear you.

Chairman sir, first of all, good morning to you, all the Board of Directors, all the staff of Nestle Limited and my fellow shareholders. [Foreign Language]

[Foreign Language] Thank you. Thank you, Sarvjeet.

I now invite speaker member, Mr. Manjit Singh, from Delhi, having client ID 10907641, to speak. Mr. Manjit Singh?

Am I audible?

Yes, sir, please go ahead.

Yes, you are.

[Foreign Language]

[Foreign Language] Thank you very much.

Thank you. I now invite next speaker member Mr. Yusuf Yunus Rangwala from Mumbai, having client ID #1601010000232396 to speak. Mr. Rangwala?

Can you hear my voice.

Yes. Go ahead.

I'm speaking from Mumbai. [Foreign Language]

Thank you, Yusuf bhai. Thank you very much. [Foreign Language]

I now invite our next speaker member, Mr. Raja Venkata Subramaniam from U.S.A. having client ID #1301240005401893, to speak.

Good morning to the Chairman and the Board of Directors. Am I audible?

Very much.

First and foremost, congratulations to Mr. Murli, our Company Secretary, who has been long enough to -- in fact, celebrating 25th AGM. Congratulation, sir. And my questions are related to the recent conflict between Ukraine and Russia. Are our sales or imports affected? One. Number two is the ongoing economic instability in Sri Lanka, has it affected our Indian sales or imports? The third is, I just request the company to inform all the shareholders about the new products being launched because there's -- okay, apart from seeing it on the press or TV, but if a small communication can be sent to mail, can be sent to all the shareholders, that will be good. That's my suggestion, sir. Thank you, sir.

Thank you. Thank you, Raja. Thank you. Firstly, thank you for joining at a very unearthly hour. I know you are calling from the U.S. So it cannot be broad daylight like what it is in India, so I'm really deeply grateful. Nice to see you once again, I mean, not just as a shareholder of the company, but also as a colleague. And also, I think shareholders need to know the longevity that your family has, you are a third generation Nestle employee. So therefore, I think it's a great honor to have your grandfather, your father, and you also work, you retired since from the company, but I think it's an honor to deal with somebody who has spent a lot of time in the company. Very good questions you've asked, Raja. See, on Ukraine and Russia, basically, we have really nothing much to do with both these markets. They are not big export markets for us. However, at this time, we have been approached to see whether we can make some supplies on behalf of Ukraine. It is being worked on because the recipes are quite different, the products are quite different, the tastes are very different, the Indian taste and the Ukrainian taste are quite different. But your colleagues in Nestle are working on this, and I do hope that we will be able to serve because a consumer served is a consumer worshiped, wherever it is, in whichever part of the world it is. So we are trying to do that. The situation in Sri Lanka is very worrying, Raja. I mean, it is very sad to see a fantastic country have such a meltdown. It's unfortunate. Our team is holding up extremely well. I'm very, very proud of our team in Sri Lanka for the manner in which and the maturity and the dignity with which they're conducting activities, which is not easy with 12- and 13-hour power breakdowns, with shortage of food, with medicines, with various other things being quite short. Our own sales to Sri Lanka are very limited. In fact, Sri Lanka is an export hub for some of our products. And that's what we are now watching out on to see whether we are able to service those markets. But it is a difficult and it is a worrying situation. I do have concern for the safety and security of all our people. That is the #1 concern. Business will come and go, but the safety and security of our people is always and will always be paramount as far as I'm concerned. Very good suggestion on new products, information to shareholders. I will certainly discuss with our team on how we can try and execute something like this. Because, yes, as a company, we keep launching 20, 30, 40 new products a year. It's not possible for all consumers to keep track of it. But at least for shareholders, if we can find a way, at least an electronic way of communicating it, it is a good suggestion. So thank you, Raja. Stay safe, and thank you very much for your participation.

I now invite our next speaker member, Mr. Toni Bhatia from Faridabad, having client ID #10914464, to speak. Mr. Bhatia?

[Foreign Language]

[Foreign Language]

[Foreign Language] Respected Chairman, sir, eminent Board of Directors, Madam Swatiji, Kanoria, sir, and other eminent Board of Directors. Sir, first of all, you gave us such a beautiful Chairman speech [Foreign Language], the speech was so beautiful, Mr. Chairman. There is all-round progress in the company. Our sales are INR 1,46,337 million, marvelous. PAT, profit after tax, that is INR 21,449 million, and you gave us a dividend of INR 200 per share, such a good dividend, total dividend, I mean to say, such a good dividend, Mr. Chairman. [Foreign Language] share price, that is not picking up. Last year, the same price was there, 17, 18, whatever, I don't remember. Today again, the price, you are giving us a good dividend, no doubt. [Foreign Language] Hindustan Unilever renamed, that share touched, I think, 2,900 or 3,000, stood at 2,100, same with Britannia. [Foreign Language] Our share price is not picking up. Yes, our quality is one of the best, second to none [Foreign Language]. My dear respected Chairman, quality is our first motto. Corporate forums, you have shone in such a good manner, I appreciate it. For this, credit goes to CFO and Company Secretary also. CSR activities [Foreign Language]. Bonus issue [Foreign Language], yes, in this regard, I will say, I am a shareholder of this company since 1977. [Foreign Language], Microsoft, I am not a shareholder of Microsoft. I heard they used to give after every 4, 5 years, 6 years, bonus share, but they don't give any dividend. [Foreign Language]. MRF Tyres, they don't go for split ups. And some other companies also, [Foreign Language]. I'm deadly against it. [Foreign Language] they provide me a link. So I am giving my views. [Foreign Language] I support and seconded the balance sheet [Foreign Language] next year, [Foreign Language]. With these words, once again, I support and seconded the balance sheet. God bless you, Mr. Chairman. Thank you, Mr. Chairman.

Thank you. Thank you, Toniji. Thank you. Thank you very much. [Foreign Language] So please stay safe, Toniji. [Foreign Language] Thank you very much, Mr. Bhatia. Thank you.

I now invite our next speaker member, Ms. Renuka Bhatia from Faridabad, having client ID #10800239, to speak.

Madam, she is not coming.

Okay. We'll move to the next question in that case. I now invite our next speaker member, Ms. Celestine Elizabeth Mascarenhas from Mumbai, having client ID #1205140000090218, to speak.

Am I audible?

Very much, madam. Very much.

Yes. Thank you very much. Respected Chairman and MD, Mr. Suresh Narayanan, other honorable members of the Board, my fellow shareholders attending virtual, my name is Mrs. Celestine Elizabeth Mascarenhas, I am speaking from Mumbai. First of all, I thank the Company Secretary and his team for sending me e-AGM notice. A physical copy would have been great joy to me. I forgot to write in the text that please send me a physical. Anyway, you can send me later also. And for registering me as speaker on my request and also this platform, giving me this platform where I am audible and visible, thank you, Chorus team. Now I come to the annual report. Very good, self-explanatory, with lots of pictures and also adhering to all the norms of the corporate governance. One chapter I find, I don't know because I could not online, I have found difficult to reach it, that ESG chapter is included, okay. Now I go to the working, all parameters are good. And what is most good is dividend of INR 200 per share. It is really creditable in this tough days with COVID and so many other things are coming. Also, our market cap is very good. And if the share is splitted, of course, some shareholders were not for it, but I feel that if you see HUL, and even a small shareholder can be the shareholder of this great, great company, which has been more than 100 years old. In India, it is 63. I feel because I am now a senior person, so I have nothing, I say let all the youngsters be in this share, like it's such a great company and with great products. So my view is that, but I have another problem is my shares are in the physical because I purchased -- today, I could not purchase these shares because with INR 18,000-plus, it was impossible to purchase. But because years back, 30 years back, I had purchased, it was hardly anything, so mine are in physical, and I have great, great problem in making it demat. Last 5 years, all hassles are going on, which was not earlier, and purposely I didn't demat because I know there is a temptation to sell because it was physical, it was in my hand, when there were great problems, I would go to my broker, he knows me, bank verification, and he would give me little less, that's finished. If I have great problem, I didn't have so far, but now making it demat and especially Alankit, I have in other share, I had a great problem. I went to the Chairman of that bank and then ultimately, it was made. So that's another story. Sir, please, your team should help me in dematting my shares. I've got 2 folios in the physical form. So please, can you -- if the Secretary can come in contact or somebody who can help me, which I have done in Titan. Titan also I faced a very -- then somebody was delegated and at least my shares are now in demat, I'm happy about it. So sir, I want this favor from you. Now I congratulate you and your team for all the awards, accolades and also for the good CSR work as given in the annual report. So now I go to my queries. Is there any acquisition in the piping for inorganic growth? Number two, in which product we are enjoying a very high margin and in which our market share is the highest, whether in milk products, soups or ready-to-eat or whatever, Maggi, which we are the highest in the market share, we are a name by itself? Then third question, any supply chain bottlenecks or disruptions we have faced especially now the COVID is passed, especially because of this Ukraine-Russia war and what methods are taken for derisking this bottleneck? Do we have sufficient stock of raw materials? For how many days we are holding this raw material? So if you could throw some light, it would be very great. Another is I have -- our fourth -- my fourth question is our ninth factory or Navratna is a very nice name, Navratna in Sanand, Gujarat, state-of-art, paperless, ecological and digitally advanced, environmental all cleared and with paperless, ecological and digitally friendly. Sir, have we applied for ESG certification for this? And my suggestion one more is, what about having such a factory in Maharashtra as an organic growth? Maharashtra is growing great, and we have Mumbai. I'm not telling in Mumbai, around Mumbai somewhere, so that I can visit this sort of state-of-art myself, I can fix up and all. Going to Gujarat is not that easy for me, even if you arrange, I head another person asking. Lastly, I support all the resolutions. I like the way you answered, sir, for your Chairman's speech also and your answers were fantastically, the way that honesty, I've never seen any such Chairman, really kudos to you, congratulations to you and your -- and also, I wish good health to you and the entire team, especially the staff with good health, prosperity and a sustainable future focusing on the 5 Ps, that is namely People, Purpose, Partnership, Planet, Performance. I add here a sixth P. Last year, you suggested. Today, I say the sixth P which is prayers, that prayers are also equally important, especially in the case of Ukraine-Russia war, I have been praying for 3, 4 times a day because we don't know what's going to happen and where all our food stuff, I don't know what. So I keep on praying because something which doesn't become, I go to the prayers, I don't see any gods, I see the prayers, having a dialogue with god and to solve it. With this, I thank you very much. My husband wants to say two lines. Please allow him, sir.

I'm a shareholder, I'm holding over 100 shares of this company in physical form, my problem is to demat. So kindly help me to demat my 100 shares in this company, which I have taken years ago. Another thing, now because of COVID, our immunization, body is not immune to the virus. So I would like -- like other companies, a humanized drink or food will be very good. And most of all, most of the shareholder companies who are friendly send their new product launches to the shareholders who would like to taste and give their observation. So I being one of your favorite shareholders, I would like any new launches, products to be send to me for tasting. And I would also like to join, seeing is believing, a factory visit, if you conduct and arrange. With this, I thank you very much for a patient hearing. Good luck and happy -- thank you, sir.

Thank you. Thank you very much, Madam Mascarenhas and Mr. Mascarenhas, thank you. Thank you very much for your -- for the love and affection and for the sincere expression of wishes that you have for the company, I'm really honored and really humbled by the manner in which you have spoken. I'll just address a few of your issues. I completely understand that as a senior citizen, the conversion of shares and dealing with it is vexating, is sometimes frustrating. I can completely empathize with it. And what I will be requesting my team, Mr. Murli and Pramod and others, to contact you to see how we can help to ensure that your physical holding of shares can be dematerialized. I think it is an accepted norm today. And really, we will try and see how best we can help you to do it because it is valuable, 100 shares is not a small quantum that you've got, and I think we will try and see how we can help you. Secondly, on M&A, I think mergers and acquisitions. The growth of your company, madam, has been 100% organic growth so far, but this does not mean that the company does not look at viable and attractive opportunities, large and small, in terms of acquisitions. So we are looking at this whole space, and as and when something happens, you will definitely come to hear of it. In terms of our market share provision, madam, you'll be happy to know that in 7 out of the 9 categories in which the company operates in, we are by far #1. So therefore, there is a very strong leadership position that the company enjoys. It's only in 2 categories, that is chocolates and in sauces, that we do not have the market leadership, but in most of the other categories, we have a strong market leadership, that has come out of really the trust, the quality and the confidence that has been built over the years. On the supply chain, I think one of the consequences of the Russia-Ukraine war has clearly been on the fuel prices and has been also on the oil prices and on the wheat prices. As you might be aware, now between Ukraine and Russia, about 30% of the global supply of wheat is involved, and Ukraine is the biggest supplier of sunflower oil. So there is a huge problem as far as the oils and wheat is concerned. And because of the crude oil prices, the packaging material also is badly affected. So the inflation is certainly a big issue. What we are concerned about is not just the inflation but also the longer-term availability because if the wheat situation does not improve substantially, there can be a global problem, especially for poorer countries. Not so much India because we are blessed with self-sufficiency. But most of the other countries, especially in the Middle East and North Africa, will get affected because they will not have enough supplies of wheat that will be available for them. But we are watching this space, and I want to assure you that for most materials, we are well secured as a company. So we will not have issues in terms of availability as we go forward. Of course, the price inflation is something that we are very, very concerned about. And finally, madam, I thank you very much for the sixth Ps that you add, which actually should be the first P. I think as human beings, prayers is what we begin with, everything else follows that. And I think surrounding all the 5Ps, in fact, is prayers. So I do hope and pray that you and your husband remains safe and secure and that life is comfortable for you in Mumbai, and look forward to meeting you some time. Thank you very much, madam. Thank you.

I now invite our next speaker member, Mr. Navneet Kaur Reen connecting with Bhupinder Singh Reen from Delhi, having Client ID #10019630, to speak.

[Foreign Language]

[Foreign Language]

I now invite our next speaker member, Mr. Yash Pal Chopra from Delhi, having client ID #10592558, to speak.

Honorable Chairman and eminent Board of Directors, to begin with, I must congratulate you all for the grand performance of the company. I say grand, though it is not grand, it is just satisfactory, but because circumstances under which it has come out, come out with the performance and come out with a nice dividend, I would just say is that our dedication, our intelligence, our strategies, those are worth praising. So I'm proud of you, sir. Sir, you have given an exhaustive speech. The speeches are never beautiful, those should be exhaustive and those should be informative. So you have given a speech like that, I'm very much convinced with that. And sir, the next to proceed with, the last 2 years were COVID-infected economy, and there was a very, very big problem worldwide, and our country was not an exception. And then still, we did a marvelous job, so that is a matter of pride, sir. But sir, the current year, that is worrying me most because this is the crude infected year. And because of the crude, the input cost of all your products from the manufacturing to the last man, delivery man, everything will be higher, costing you -- there will be a rise in the input cost. And at that stage, it shall be really very, very difficult for you to sell off your products with the same margin because if the margin gets squeezed and you don't get the profit, so there's no fun of going for such business. So sir, you just devise something just to ward off that problem because that problem is not a problem for a day because so long the war is going on between Ukraine and Russia, and there's a crunch of supply of this crude problems and all that, so this problem we will have to face. And for that, you have to have some bold strategy. And sir, the next thing, which is very, very important, you cannot afford to ignore, that is our Baba Ramdevji, who is coming up with Patanjali Foods, and he is introducing so many items day in, day out, and there's no channel -- you open any channel on the TV, you will find him selling Dant Kanti or selling Kesh Kanti or something else, he has entered in almost all the areas of our daily needs. And sir, being a health ambassador and yoga ambassador, every day, he is criticizing the consumption of maida, he is criticizing the consumption of coffee and tea, he is criticizing the consumption of chocolates and all that. And sir, as regards our company, the main product by which our company is known is Maggi, Nescafe and chocolates. I just tell you if you have a survey among your own shareholders, you will find that 90% of that they know only these 3 items, they don't know any other item, because these are the 3 main items, which is your bread earner, these are the 3 main items, which are getting the maximum revenue for the company. So I would request your R&D department to just make a research on other millets, oats and other products, which are health helpful, which cannot be criticized by the world over because now the people are very much health conscious. So under those circumstances, it looks very, very difficult. And sir, in the last time, I had given suggestion on the revamping of the PR department that because on every daily soap, there are so many soaps, mostly that from Sony and all that who are involving our audience every day the people are sticking to that in those, and over there our Babaji's product come as a hamper and all that, but our Nestle is not seen anywhere. So that suggestion I will not repeat because my own son who has been an ex-KPMG business head, now he is heading his own company, he has spoken to me in so many days, so many times, papa, that free advice, free suggestion and free advises are never respected and those suggestions are never accepted. Only that doctor who charges a maximum consultation fees, only he is respected. So it is better you don't go for that. But because it is my own company, and I am a person of 19th century, I'm not that of the 20th century, so -- and I feel it is my company, I can't help it. I think over what is best for my company and then I put forward those suggestions. So sir, this time my suggestion is that you have to revamp your marketing team, your marketing division has to wake up, they must work out the new strategies, just to demonstrate our products, just to educate our consumers. And I tell you, sir, for that, to begin with, as it said that charity begins from home, to begin with, you should have a consumer conference in almost all the metro cities of our country where you can invite your own shareholders residing lane in that area and all that. And with that exit, mobile exhibition of your products and all that, you just convince them and you should give them the loyalty coupons that you will just go so that once they've developed the taste of our own products, our own men, definitely, they will give a big, big message, because sir, you can't afford to take Baba Ramdev lightly now. This INR 2 share of soya, which that any company has purchased the share at INR 4 only, he has now been -- the face value INR 2 share is being sold at INR 1,000, and now the name has been changed to Patanjali Foods because he is introducing so many food items in fact. So you cannot afford to ignore that. So you have to be cautious and you have to revamp the marketing strategies. On the strategies, I can speak a lot but because I don't want to speak in the open and all that, once you've given me a chance to meet, I will definitely come forward with some suggestions and all that. Sir, to proceed further, I want to address to Mr. Murli. He is retiring after attending, conducting 25 AGMs. And I'm -- after my post retirement, this is my 25th year. And for the last 30 years, I'm with this share company since the time when the company was holding its AGM at Kamani Auditorium and all that thing. And as a matter of I can say that so far, even in the 30 years, I tried my best to get a direct number of Mr. Murli, I could not get it. And I know even no shareholder has ever got his direct number because -- and I can say that he -- and still he is popular. Though he is having no personal contact with any shareholder like that, still he is popular, and I wish him best of the entire life because it is not retired, it is retired life, which I joined for the last 25 years after my retirement in April 1997 from Indian Oil. Sir, I must compliment our corporate department under [ Mr. Gagan Aryaji ] and [ Mr. Sushant Singhji ]. Last year, I had spoken in the loss of Mr. [ Rajendra Agarwal ]. I know that loss is so far not repaired, so far that loss has not been compensated. But still, the way Mr. [ Prashant Singh ] is doing it, he has won over the heart of so many shareholders. Whenever anybody goes to his office, he is treating him just with a cup of Nescafe, just with a glass of butter, and people value that very much that the man has treated him, and he is very prompt in attending to the queries and all that. So at this time, one of my suggestion is that you should have a full-time person, officer above Mr. Prashant, not with a man with the additional charge and all that, because the interest of the investors, that is very, very important because the investors' blessings, that is the real strength of the country. Earlier, our AGM was the Mahautsav, people would wait for that utsav, wait for that festival, and they would go there and they would cherish that, they would enjoy that. Now they know it's the formality, formality provided by the MCA. But a person like me, at the age of 83, even then I'm very much obliged to MCA and I would like that any physical meeting at such age is really, really very difficult task and even though person like Mr. [ Sherof ] from Kolkata and [ Daruvala ] from Bombay and all that, even those people cannot attend. So we are going for physical meeting. We must have some system along with that, where we can express our views, our suggestions because I think being a part -- being a core partner of the company, we also deserves a right to put forward our suggestion. So sir, I will pray almighty to bestow positivity on you all from the top to the last man in our company so that positivity means the strength of the company and the strength of the company means strength of our investment, strength of my investment. I know that I will now -- this year -- last year, I have spoken a lot about split bonus and right and all those things. This year, I'm not going to touch those things because most of my friends have spoken on that. So I'm not -- I'm a person with not reputation, I don't want to create any reputation, my main worry is the marketing strategies you have to take in view of the problems hovering over our company. So that is my worry and that is my concern. So best of luck to you, sir. So we are very much proud of you. You are handling the company like anything for the last so many years. So thank you, sir.

Thank you. Thank you, Yash Palji. It's always a real pleasure and an honor for me to listen to you. And I think I respect your son's advice, but I think your son said it to the wrong person. Your wisdom, your perspective and your honesty of purpose is probably far more valuable than any advice a consultant can give to an organization. And like an elder member of the family, you give compliment, but you also give scope for improvement. So I can see that the 19th, 20th century discipline that you bring to chastising your younger people to do better is clearly there. So I'm deeply grateful, Mr. Chopra, for your kind words. I think you're absolutely right. Just to answer -- to respond to a few of your points, the input costs, the crude costs and the inflation is probably going to be the biggest challenge that we are going to face as a company. I think you are absolutely right. We have strategies in place how to manage the portfolio, and we will try and manage the balance between growth and profitability in the very difficult circumstances. I want to assure you, Mr. Chopra, and you have mentioned this before, we don't take competition lightly. Competition inspires us, competition does not make us complacent. So 5, 6 years ago or 7 years ago, you recall that we had a big crisis that was on the company. We came out of it. We came out of it stronger and we were able to, with the help and support of all of you, our shareholders, and also the dedicated employees and partners of this company, rise above the clouds and become a high-performing company. As I speak to you, some of the suggestions that you've given on looking at different R&D products is already being worked on. You'll be happy to know that some of the ideas that you have given on millets, on oats or on various other ancient grains is part of the work that the company is working on in order to improve even more the quality of nutrition that we have to offer. I want to assure you that under my watch, Mr. Chopra, we will never take competition lightly. We will not allow ourselves to be lulled into complacency. You will see more actions coming out of the company. You'll see more initiatives, but we do this in an ethical, honest way. That's what we are as a company. I cannot change the DNA of the company. The DNA of the company is honesty, sincerity and trustworthiness. And that's not something that we will ever compromise with. But we have the power of nutrition, of science and technology to be able to make the responses that we do. So I want to give you that assurance, Mr. Chopra, and I thank you very much for your very, very kind words. Also, your kind words for Mr. Murli, who's been an institution in this company. I don't think there are too many company secretaries who would have presided over 25 AGMs. So I think he will probably go in the Guinness Book of Records, if there is one, to look at the number of AGMs that he has handled. But thank you very much, Mr. Chopra. I deeply appreciate all the suggestions you have given, and also the firm but very pointed signal that you have given that competition is around the corner, don't take it lightly. And the message is very well received. Thank you, Mr. Chopra. Thank you very much, and keep safe.

I now invite our next speaker member, Mr. Shashikant Gajanan Marathe from Pune, having Client ID #1201090016308696, to speak. I'm sorry, Mr. Marathe, we are unable to hear you. Sir, can you please adjust your microphone? Mr. Marathe, we're still unable to hear you. Maybe we can just check your connection on the back end and rejoin you. We'll just check your connection at the back end and rejoin you. In the meanwhile, we'll move to our next speaker member, Mr. Krishan Lal Chadha, having Client ID #120141000010073, to speak. Please proceed.

Thank you, sir. Thank you for giving me the opportunity. Can you hear me?

Kindly speak a little louder, Mr. Chadha. Can't hear you very well.

Thank you, sir. I can speak loudly. Sir, thank you for giving me the opportunity on this quarter. Sir, on the Page #23, I'm very thankful to the management to take a good initiative to reduce the energy usage or usage of waste water usage. Sir, [Foreign Language] minus 43%, minus 67%, 52% [Foreign Language] on Page #23. But sir, 2020, 2021 [Foreign Language]. Thank you, sir. Thank you so much.

Thank you. Thank you, Mr. Chadha. I will choose to answer some of your questions in English because some of them I will be requesting one of my colleagues to answer you. Firstly, on the greenhouse gas emissions, energy usage, et cetera, 2 points have been given 2006 and 2021. The reduction has been in the last 15 years, so that is the number. So minus 57 is greenhouse gases, minus 43 is energy, minus 52 is water usage and minus 67 is waste water generation. That is completely in consonant with the annual report, which is the 2021 report. So from 2006 till 2021, that information has been given. The second point you were talking about is on plastics. In answer to earlier shareholder question, we have indicated that we have got almost a 9% reduction in plastics. One of the areas that we are looking at is there is, globally with us, Nestle packaging institute, which has been set up in Switzerland, whose services and whose output Nestle India is also a beneficiary of. There, we are working on solutions that will be nonplastic but which are commercially viable. So this is the work that is being done so that we are able to accelerate the quantum of the plastic reduction over a period of time. This is a constant journey that we're in, and I can assure you that there will be a fair amount of energy and focus as far as this is concerned. The third point, before I pass on the floor to my colleague, Mr. David McDaniel, the CFO of the company. Just to correct you, Mr. Chadha, with all respect, the company does not make soups anymore. So I don't know what soups you have seen in which stall. Maggi soups are no longer available. So the question of giving a buy one, get one free offer or by trying to control the price does not arise because, if I'm not mistaken, almost 6, 7 years ago, we have stopped these products. So it's some other soups probably that you have seen that might be giving you that confusion. Now the specific question, which I will pass on to Mr. David McDaniel. The question is, David, regarding the exceptional charge that has been taken on the P&L for 2021. What is it? And what is the nature of this? You might like to explain to Mr. Chadha.

Yes. Thank you, Suresh, and thank you very much for the question, Mr. Chadha. So exceptional charge is a onetime charge. It's -- simply put, it consists of 2 elements. One element is the actuarial valuation of the past service cost for current employees who were subject to this scheme, the Future Ready Plan and the difference between that actuarial valuation and the amount booked in our books for their past service. So there was a small delta where there was -- not small, but there was a delta for that. And the other element is the settlement cost -- what we call the settlement cost. Again, it's a difference between the cost agreed with the service -- future service provider compared to the obligation in our books for pensioners. So 2 cohorts that we transitioned into the Future Ready Plan: one will be some of the current employees; and one, the pensioners. And the 2 -- the total cost is the delta in each case, the price of transferring to the insurance provider versus what was already in our books. Thank you.

Thank you. We go to the next speaker.

I now invite our next speaker member, Mr. Shashikant Marathe.

I, Shashikant Marathe of Pune, wish good morning, good afternoon to all those at virtual AGM. Sir, I am pleased to note that the balance sheet is concise as well as gives all statutory obligations. The 2 interim dividends of INR 135 on equity shares of INR 10. Our notice to have given details of the proposed final dividend under explanatory statement giving Item 2 of the notice. Please ensure this in the next time. Final dividend of INR 65, if approved, will make the total dividend of INR 200 per share of INR 10. This is out of total earnings of INR 222.50 per share. The results are encouraging against pandemic, and the Board and employees deserve our sincere appreciation for the excellent results, which are a record on the decade. The key financial ratios barring operating profit margins have tapered. We appreciate your efforts for continuous progress on environment sustainability. The contributors of 9 different awards and recognition deserves our heartfelt appreciation. I suggest those who helped us should be rewarded suitably. Your strategy for -- reducing use of plastic and nonconvention -- and use of nonconventional energies are from an investor as well as Resident Indian, I have few observations for the Board of Directors. From next time, try to have AGM beyond trading hours. We are at 9 locations producing our products. We ought to explore space on roof as well as the areas within our factories for tapering -- for tapping solar energy. Now, our units, which install, operate and charge for use of power at reduced rate than we pay now. The tariff on power are bound to increase. Due to Russian invasion, oil prices will rise unabated. The sanction cannot be reduced, and we must explore this fully and even wheel the extra energy to the state grid. With efforts for increased digital tools usage as well as innovative efforts for productivity increases, it is noted that our employee strength rose by 902 numbers [indiscernible]. As a socially responsible entity, the manpower policies need a relook. As against 7,910 permanent employees, we do employ 8,878 hired contract employees, which constitute 112% of permanent strength. Central act on abolition and regulation of contract labor need to be read and implemented in its spirit. R&D expenses are just 0.26% of our [indiscernible] spend more than in their countries. It was jokingly said that the directors do continue on the Board as long as they tune in to their promoters' wishes, ideas. Due to Russian advances, the cost in Europe is bound to increase, and it is appropriate for our Board and its Chairman to study and prepare the cost-benefit ratio in that -- in the present unfavorable environment in Europe. It will be beneficial to start R&D activities in India. There are ample talented individuals to make R&D more rewarding and aim at R&D as a greenfield in India as many MNCs have facilities in India. Nestle is a drain on India's foreign exchange, as we import net of exports INR 18,247 million. Kindly persuade our promoters to invest in India and reap more by following Make in India. Noted the company has transferred to IEPF a sum of INR 94,805 million as unclaimed dividend. It is not enough to appeal shareholders to claim unpaid dividend and most of them might not be able to read our directions and are having physical shares, wherein KYC is not linked. One must explore rates and legal means to call for a sender of shares in hard format from concerned shareholders and pay them after putting the cost of consolidation and related expenses. Please do not neglect shareholders who have contributed, cooperated. Women constitute 14% of our strength. In Crisil, this is 37%. And 30% of managerial positions are manned by women in 38. On our Board, we have hardly 33.33%. Please ensure -- hope the company has taken all employees in confidence for the scheme of arrangement, Page 36. Please send a copy or gist of the item and details under Section 197 of the Companies Act. Thank you for giving me time. I thought that you would answer all the speakers at the end, but some or other you changed. One should have 3 minutes time for each. I think I have not taken more than 3, 4 minutes. Thank you very much.

Thank you. Thank you, Mr. Marathe. Thank you very much for your comments and for your suggestions. What I will do is in the interest of fairness and also respect, you had sent these questions in advance. So I will very quickly run through some of the answers of -- on the questions so that you have clarity on where the company stands. The first one you talked about was the strategy on reducing carbon footprints, reducing use of plastics and nonconventional energy. I think in my earlier responses to shareholders, we have talked about both recyclability as a key imperative for the company, also the usage of alternative materials and optimizing our pack sizes. We have also, interestingly, Mr. Marathe, started using recycled content in outer shrink film for coffee trays. That's one of the things that we have started in order. And also, in all our premia, that is what we use to give as gifts along with our main brands, we have shifted to glass and metal options and actively pursued not having any plastic as far as the gift items are concerned. You talked about the 9 locations where we are producing, and you talked about exploring the roof areas for tapering the -- for tapping the solar energy, especially in the context of the war and the heightened prices of oil. First of all, we are pleased, Mr. Marathe, you'll be happy to know that in the Sanand factory that has been set up, it is the most environmentally friendly factory, 100% clean and renewable for the thermal energy and 26% of our electrical energy is contracted with wind and solar hybrid. That is the maximum that is being currently allowed by the state, and we are going to the maximum. Having said this, we are also seriously exploring on-site possibilities to further enhance the net zero commitment on the solar roof, which is one of the options that we are actively considering. You talked about efforts on increasing the digital tools usage as also innovative efforts for productivity increases. And you talked about the employee strength having gone up by 902 numbers in the decade gone by under -- as probably an extra number that we could have avoided. I think I would just like to mention to you that during the last decade since 2012, the production volume of the company has grown by nearly 25%. This period has also seen capital expansion across locations, 2 new greenfield sites in Tahliwal, in Himachal, and Sanand came up in 2012 and 2021. In addition, greenfield -- greyfield projects were implemented in Moga for the Nestlé Health Science business, in Samalkha for the Milks and Nutrition business, in Ponda for the Chocolates business, in Nanjangud for the Coffee business, in Bicholim for the Noodles business. All of this clearly would mean an augmentation of the workforce, which is what we have tried to do. In addition, in order to exploit more the opportunities in the nutrition space, we have added about 300 people since 2012 to be able to cover the health care professionals in a more concerted and in a more complete manner. I think those are some of the initiatives that have been done and which is why the labor numbers are increasing. It's also good, Mr. Marathe, for the country because we are creating direct employment. And as you know, and as you would agree, that employment is one of the big challenges that the country also faces. You also talked about social responsibility in terms of 7,910 permanent employees against 8,878 contract employees and also the need for adherence to the Central Act on abolition and regulation of contract labor. I would like to assure you, Mr. Marathe, that the contractors deployed at all our sites are fully compliant to the Contract Labor Regulation and Abolition Act. Without that, not a single contract labor is being employed by us. About 1/4 of the contractual employees are actually in ancillary duties like housekeeping, security, canteen services, et cetera. Another 1/4 is deployed in our warehouses for the distribution network, forklift operations. These activities are not primary in nature to the manufacturing organization, and therefore, have been outsourced. I would like to assure you that the remaining contractual workers are mainly deployed in our factories in the end of line in secondary packaging, which are also being regulated as per the prescribed Contract Labor Regulation and Abolition Act. So, therefore, I would like to assure you that on this, the principles being followed are ethical, honest and completely compliant. And we would not be doing anything that is outside of this. You talked about the transfer to the IEPF a sum of INR 94,80,540 as unclaimed dividend. You talked about the fact that it is not enough to appeal to shareholders to claim unclaimed as most of them might not be able to read our instructions. I think some of those questions have already been raised in today's AGM, which we will look at. In terms of requirements, I think all the necessary notices in newspapers, and the company is sending out regular reminders in advance to all those shareholders on the transfer of shares to IEPF is being done. However, if there are ways in which this can be strengthened, we certainly will look at it. You talked about diversity, saying that in some organizations like Crisil, for example, there are 37% of women employees and 30% in managerial positions. We are at 14% as an overall organization if you include the entire workforce. The area where, Mr. Marathe, we are looking at progress is in manufacturing. That is where with Sanand with 65% of the workforce being women, we have taken the first important step, and I do hope that this becomes then easier for us to accept a larger number of women in the manufacturing workforce. However, on the white collar, 24% of our white collar is -- are women, and these are comparable to what you have in companies like Crisil or others, which are largely white-collar employees and not really the kind of blue-collar workers that we're talking about. We also have the highest representation of women in the field force at about 21%. This is an area that is not just tokenism, but a leadership imperative. And I think we will be moving faster in this direction and more aggressive in the direction of increasing diversity and also enabling mentorship programs, leadership development programs in order to enable the greater participation of women in the workforce. You talked about the gist and in the confidence for the scheme of arrangement, Page 36, can I get a gist -- any kind of gist of it? I would just like to read it out to you. The Board of Directors at the meeting held on 28th July 2021 had approved the scheme of arrangement under the Companies Act 2013 between the company and its shareholders for the transfer of balance of general reserve to the retained earnings. The same is made publicly announced immediately after the Board meeting. No employee is directly affected by this scheme. So I would like to assure you all that. We -- you talked about aiming at zero emission by 2029. I think carbon emission reduction has been implemented or is being implemented as far as our packaging is concerned, material supplies like free plantation, use of solvents in printing, reduction of water and electricity charges, usage of solar panels, et cetera, in order to reduce the carbon emissions. You talked about we are not ethical in spirit as our disputed unpaid statutory dues net of amount paid under protest is INR 10,752.4 million as against our paid equity of INR 964.2 million. The disputed statutory dues are on account of various demands raised by the tax authorities for direct and indirect tax matters, which have been disputed by your company in various courts of law. And that's why they are coming as provisions. In most cases, these demands have been stayed by various courts of law, and hence, remain unpaid. So the question is not one of being unethical about it, the question is final settlement of the matters that you would appreciate, we will have to wait through the due diligence of the law before we settle these matters. With this, Mr. Marathe, I hope I have satisfactorily answered the questions that you have posed. And I thank you very much for your taking the trouble and for putting down these questions. It is important that as shareholders, you ask the questions that concern you. And it is my responsibility, as the Chairman and Managing Director, to answer them as best as I can. If there are any further gaps, I'm quite happy to indulge and engage in order to answer them further. But thank you very much, Mr. Marathe, do appreciate your questions.

I now invite our next speaker member, Mr. Manoj Kumar Gupta from Kolkata, having Client ID No. 12 -- I'm sorry, 11218986, to speak.

Hello. Good afternoon, respected Chairman, Board of Directors, fellow shareholders. My name is Manoj Kumar Gupta, I'm equity shareholder of Nestle India Limited. Sir, I'm attending this meeting after 23 years, when Mr. Murli had joined as the Company Secretary with Mr. L. Vishwanath. At that time, I've attended this Nestle AGM in the Air Force auditorium. After that -- and I namaskar to R.V. Kanoria saab that we always find that person from Kolkata in the Nestle Board. We feel proud that earlier Mr. B.M. Khaitan in the Board and now Mr. Kanoria is in the Board from Kolkata. So we feel proud that people of Kolkata that one person from Kolkata is in the Board of like Nestle company. 9 years back, when the problem has started with Maggi, we had discussed with -- out of the AGM of Kanoria Chemicals with Mr. Kanoria, and he assured us that problem will be resolved out, don't worry, everything will be sort out. So such type of people are there that they can assure the investors, small investors that this is the fault -- and that was totally politically motivated. And earlier speaker says Baba Ramdev. Today, Baba Ramdev says, I'm going to change the name of the company from Ruchi Soya to Patanjali products. So what he will do [Foreign Language]. Any way that said, respected Chairman, Board of Directors, thanks to you that you had given a chance to us to join this meeting from Kolkata. And this all credit goes to the MCA that has allowed the corporate sector to hold the AGM through VC. And thanks to your company secretary and his team that has given a chance to speak. But I never met Mr. Murli. I tried 4 years back in Gurugram at your office. He sends one junior to meet me downstairs, "You go and meet him, see what's his problem". Then I say to that junior that I have no problem. That's just I want to meet him and I want a copy of balance sheet. Then after waiting half an hour, he come again to give me a balance sheet. And he says, Mr. Murli is busy, he could not meet you. But anyway, I pray to God for his healthy and prosperous, safe, long life after retirement. And in my life in 32 years, I've seen 2 or 3 company secretaries like B.B. Chatterjee in ITC, Mr. Murli in Nestle and one person in another company who has completed 25 years, continue, as a company secretary. So I wish to God for his healthy and prosperous, safe, long life. And sir, there is A, B, C, D, E, F, G for the investors. A for appreciation is there, B for bonus is not there. And I will not suggest you that issue the bonus. You can issue the bonus debenture. The equity will not increase, but bonus debenture at the rate of 8% or 8.5% you can issue. Like firstly, in India, Hindustan Unilever has issued the bonus debenture, then Dr. Reddy, then [indiscernible] and now the Britannia. Britannia has issued continuously 3 years bonus debenture in the ratio of 1:1. So you can also consider in the bonus. C for convertible debenture, you don't need any money that we will issue the convertible debenture. D for dividend, you are paying the excellent dividend of INR 200. That means you are paying the INR 3,000 crores dividend, include taxes. And sir, E for earnings per share is good. F For factory visit, I don't think that you will allow the factory visit. G for gift, gift is totally banned by the MCA, that you can't issue the gift to any investors. And sir, Sri Lanka, Sri Lanka is [Foreign Language]. And sir, single-use plastic, you said we have reduced to use the single-use plastic by 8.5%. Recently, in the Parliament session, before last day of the session, our environment minister says, we will -- totally completely ban of single-use plastic by 5th July -- from 5th July 2022. No one can use the single-use plastic from 5th July 2022, they have issued that. Why he says in these -- in total clarification he says to the Honorable Speaker of the house, why I'm saying 5th July is that before that people can use their products, people can use their stock in the market so that after that, they can't use the single-use plastic that is unfriendly, unhealthy. So what is your view, sir? How you will face after 5th July, when the government will issue a notification to completely ban of the single-use plastic? And sir, today, 2 lady directors will retire. And I will suggest one lady director should be an all-time director in the Board, either Finance Director, Marketing Director or Research and Development Director, bring one competent Lady Director as a Whole-time Director under your leadership. When you become the Chairman after -- before 5 years, we feel proud that after a long time, Nestle has got an Indian man as Chairman of the company. Earlier, I find that every time a foreigner were the Chairman of the company. And sir, how you will face the competition from Amul, Amul and Patanjali? Amul is always nowadays launching 2 or 3 products after every quarter. Recently, Amul has launched some soft drinks to compete with Pepsi and Coca-Cola. So how you will -- and now, they are launching cookie, chocolates and ghee and other things. How you will face this competition? Patanjali, my previous speaker has already discussed about the Baba, so I will not say about the Baba. And the spices, how you will face a competition from Tata and ITC? Recently, ITC has acquired the Sunrise of Eastern Group at the price of INR 2,200 crores. And Tata has launched Sampann brand, and people know the name of Tata. People know the name of culture of Tata. So people will like to buy the product of Tata. So how you will face that competition from ITC and Tata in your spices? And sir, have you any plan to bring any greenfield project or any takeover -- acquisition in the Eastern part or Northeastern part of the country because both part is growing. When the NDA has come in the Northeast, like Assam, Tripura, Meghalaya, now you see the picture of how the Assam has changed in last 7 years. So what is your view, sir? And sir, CSR -- sir, Mr. Kanoria knows that I do some social work in Kolkata, and we run 3 hospitals. And sir, try to reduce and ask the government to reduce your product of Lactogen to give some relief to the middle class and the lower people that they can buy the Lactogen1, Lactogen 0, Lactogen 1, 2 for their newly born babies or you can launch some small packs of INR 50, INR 100 in the Lactogen 0, 1, 2 that people can afford that to buy. And in the CSR, you can distribute some -- after such product will expire 3 months back that you can distribute under the CSR to some hospitals to give that products to the newly born babies, parents that they can give that product to their babies. Like Johnson, Johnson is distributing baby oil and baby soft to the hospitals of the short expiry, which products will expire 3, 4 months back that they are giving. So you can also consider under your CSR policy. And sir, I totally agree with Mr. Santosh Saraf [Foreign Language] in POLO. I am habituated to use your POLO, but [Foreign Language] POLO [Foreign Language]. So think about that POLO should be -- previous people can get like a previous one. And lastly, but I support your all motions, and thanks to you, and I always namaskar to R.V. Kanoria saab that we feel proud always that he's in the Board. And once again, I convey my thanks to Mr. Murli for his contribution and contribute his vast experience in this company. Thank you, sir.

Thank you. Thank you. Thank you, Manojji. Thank you very much for your very kind words, not just on the company, but also on our respected and esteemed Director, Mr. Rajya Vardhan Kanoria and also for your kind words for Mr. Murli, whom I hope that you will get to see someday when he doesn't have the responsibility of being the Company Secretary of the company. Your suggestions on various options of bonus debentures, convertible debentures, et cetera, is all taken on board as suggestions. And I think nearer the time, we can discuss as to what is the most relevant way of rewarding the shareholders. On single-use plastic, you'll be happy to know, Mr. Manoj, that Nestlé is the first company, and I repeat, it's the first company to shift to paper straws completely. 30 million straws, plastic single-use straws have been removed. We are complying with it even before the date of regulation is being mandated by the government. So I think this is an area. Most of our other packaging are either monolayer or multilayer packaging, where work is on in terms of reducing the plastic footprint. But on the single-use plastic, I think the company has already taken proactive steps and doing the needful as far as the regulation is concerned. As far as competition is concerned, yes, Amul and Patanjali are both very fierce competitors. But the Nestle is standing in this -- in all the areas, whether it is dairy or whether it is chocolates or whether it is food product, has been extremely strong in all these years. Please remember that in coming out of the crisis as a company, we have strengthened our innovation profile and our capabilities. We also have an R&D center in India, though it's a global R&D center, but we have the facility of it being utilized for, let's say, India in projects that are useful for us. So there are numerous projects that are on in that R&D center and also in our own facilities and factories and development groups in order to come up with products, not just in the milk space, in the nutrition space, in the food space, in the chocolate space and in the spices space. You will be happy to know that Masala-e-Magic, which is one of our brand of spices, is one of the fastest-growing brands in the marketplace today and also that Maggi noodles itself is a big user of spices. So spices is an area of expertise for the company, and you will see more action in this happening. As far as mergers and acquisitions are concerned, I think, as I mentioned earlier to a shareholder, there are opportunities that will keep coming up. We evaluate these opportunities depending on the fit, depending on the size of the price and depending on the kind of financials that work out for this. And this is an area that will be under active consideration as we go forward. But needless to add, competition, as I mentioned earlier, it energizes us. It helps us to focus better, and that's really what we'll be doing as a company. But thank you, Mr. Manoj, for your confidence and for your support of the organization and also of the stand that we are taking on various issues. Thank you very much.

Our next speaker member, Mr. Pramod Kumar Jain from Delhi with client ID 10082531 had registered; however, has not connected. We will, therefore, move to our next speaker member, that's Mr. Dipankar Purkayastha from New Delhi, having client ID number 1204720009417188, to speak.

Can you hear me, please?

Yes.

I can hear you, Mr. Purkayastha.

Okay. So thank you for the opportunity. I had sent in a list of questions in advance by e-mail. So I would -- for the benefit of other shareholders, just recap those questions, not necessarily in the same order as the mail. So the first set of question is relating to CapEx. So with the commissioning of the Sanand factory, how much of your INR 26 billion investment plan is left to be implemented? Second thing is I was a little disappointed that your annual report is quite silent on the proposal that has been submitted by Nestle under the government's PLI scheme, production-linked investment scheme, for processed fruits and vegetables. So does this mean that this is going to be implemented by some other vehicle and not by Nestle India as far as the Nestle Group is concerned? And if Nestle India is going to implement this, can you share with the shareholders what is the proposed investment, estimated timeframe for completion, the kind of business or products that this is going to do, the projected turnover in value and volume terms and projected incremental profits? Why I ask this question is because you have filed submissions to the stock exchanges informing the stock exchanges about this, but the annual report is silent on this. Third question on CapEx was that this year, there has been an addition of INR 1,824.8 million under the head buildings in right-of-use assets, Note 5. Basically, these are leased buildings. So what is this additional lease buildings that have been taken? My next set of question deals with your volume growth. I was very happy to see from the annual report that this year, there has been a welcome increase in sales volume in 3 out of 4 categories. I mean, in comparison to the depressed trend that we saw in the last 2 years. So that is a good thing. But if I look at your Milk Products and Nutrition category, the volume is at 1,34,669 MT are still below the 2018 figure, which was 1,37,066 MT. So what is the reason for this persistent lack of volume growth in this category? I mean, you can't blame this entirely on COVID because babies were being born in COVID period also. And in fact, the anecdotal evidence is that there were more babies being born during COVID than non-COVID period. So if you can throw some light on this phenomenon. And I would also request the company to consider disclosing the milk products and nutrition product figures separately so that we can understand where exactly the underperformance is happening. And the second issue is in the Beverages category, while you have had volume growth this year, the volumes are still less than the 2018 figure. Now, in this category, I appreciate that it has been severely impacted by COVID because hotels, restaurants, catering were closed for large parts of the last 2 years. So -- but do we have any sense of when we are going to finally leave COVID behind and move ahead? When are we going to get volumes above the 2018 figures? My third question is about 2 years back, I had spoken to the CFO on the volatility and the adverse impact, which this Defined Benefit Pension Scheme has on the P&L account of the company. And I was very, very happy to see that the Board and the company have finally seized the courage or to end this scheme and relieve the shareholders from this burden. Only a few minor questions on this is that in the presentation which you all had made to the analysts this year, I think in February or somewhere, you had said that approximately 2/3 of the Defined Benefit Pension liability has been covered under this future-ready plan. So 2/3 means how many? Can you tell me how many -- 2/3 have been covered? And the 1/3 which has still left to be covered, what would be their number? And what is the reason why this 1/3 has still being left behind? And finally, on this pension scheme. Typically, the beneficiaries of these defined benefit pension schemes are people who are senior, senior both in terms of age as well as hierarchy. So there is always an entrenched resistance to doing away with these schemes. So just wanted to know whether this investment -- onetime investment of INR 13,787 million in the insurance plan by the company, does this represent the full and final extinguishment of all pension liability towards these employees by Nestle? Or is there some kind of backstop arrangement still there on account of inflation indexing with regard to the annuities payable by the insurance company? I know Nestle has a very strong legal team, and they would have vetted the arrangements. But just if you can give me that assurance that this is finished, this whole chapter is now finally closed, at least for those 2/3 employees. Two questions I have are follow-up of questions which I had asked in the previous year's AGM. Last year, I had asked the Chairman on the feasibility or possibility of Nestle setting up your own e-commerce portal. And the Chairman had stated that the feasibility of our direct B2C business was being evaluated and that a decision would be taken soon. What is the status on this? Because as far as I can see, you still don't have a direct B2C business on the lines of the ITC Group's portal. And as so many shareholders have told you, visibility or awareness of Nestle products, especially in the smaller Tier 2 and 3 centers is very poor, wherein such a portal was, in my opinion, at least, would have been very helpful the way ITC Group has been able to leverage this portal. The other follow-up question to my last year's question was, again, is addressed to the CFO, is the sharp increase in the amount payable to MSME creditors, from INR 340 million to INR 1,140 million. This question I had raised last year that there's been an exponential increase over the last few years, and the CFO had clarified that this was because of a redefinition of MSME by the government in July 2020, resulting in increased coverage. So this year, again, there has been an increase from INR 1,140 million to INR 2,809 million, which is quite disproportionate to the general increase in the levels of creditors. So are you kind of telling me that this year also, there has been a further redefinition of the MSME term by government? If not, what accounts for this huge increase? And this is -- Nestle is an outlier as far as this. I own shares in many other listed companies. I don't notice this phenomenon in any of the other listed companies. I find this 2-year phenomenon only in Nestle. My next question is on this -- there is a cryptic note in your annual report balance sheet on the sale of shares in Sahyadri Agro and Dairy Private Limited. So can you please tell us for the benefit of the shareholders, why this investment was made in the first place? What is the rationale? And what are the circumstances which have changed that has necessitated the Board to consider the divestment of this investment? If you could just give us some brief background of this whole story. One very interesting thing in your annual report was that the usage of railways has gone up from 0.2% last year to 6.49% this year, very welcome step because it's by far the cheapest mode of transport. So have you all worked out the impact on the bottom line of the increased usage of railways? And since now the dedicated freight corridors are going full steam ahead, so does the company have a medium-term goal in respect of railway usage? I mean, are you targeting a particular medium-term goal? And if so, what is it? Finally, I have 2 suggestions to make apart from these questions. One is in the category of chocolates. With increasing health consciousness and aversion to sugar, people are shifting to dark chocolates. And the biggest beneficiary of this trend has been Amul, not Cadbury or Mondelez. Amul has very nicely tapped this shift. Unfortunately, Nestle, as far as I can see, we don't have dark chocolates. And I'm worried that if we don't introduce this -- fill up this gap, we will soon see all the younger generation moving out from us as far as chocolates is concerned. The other suggestion I have is in your coffee range. ITC Group has got a product called Dalgona coffee, which is marketed under the tagline Phenti Hui coffee. So in your Nescafé product range, you've got a wide range of products, but you don't have a Dalgona coffee. So I would suggest because I find from the youngsters in my family that this is an enormously popular group -- I mean, product with them. So you could also think of introducing this Phenti Hui coffee or Dalgona coffee. I think that covers all my questions. Thank you for the time. Good day.

Thank you. Thank you, Mr. Purkayastha. Thank you. Thank you very much for taking the trouble to really put down an exhaustive list of questions. I will try in the interest of time to answer them as briefly and as clearly as possible and also request my Finance Director, Mr. David McDaniel, to take some specific questions that might be a little bit more of accounting detail that you might like to know. So in the order, firstly, let me thank you for your suggestions on the dark chocolates and on the Dalgona coffee. Incidentally, one of the biggest beneficiaries of the Dalgona movement during the COVID was, in fact, Mr. Purkayastha, Nescafé. So far more than the benefits that anybody else has taken. One of the phenomena that really helped us because we use the recipe route of suggesting to how the consumers can create Dalgona coffee themselves, which is probably a more robust mechanism rather than trying to create technically slightly flimsy products, which might not be able to give a consistent taste experience. Nevertheless, I think it really reinforces the role that recipes and the lifestyles play as far as coffee is concerned. Dark chocolates, I think point well made. We do have some, but very, very limited, and we probably will need to look at that more aggressively. Let me now start in reverse order of the questions that you had. Firstly, with your railway question, what has been the impact on the bottom line of the increased use of railways from 0.2% to 6.49%? Is there a medium, long-term goal in respect of railway usage? There was an incremental impact on usage of railways by INR 70 million during the year 2021 from what we have transported. Impact was not material and is close to price neutral as we scale up volumes and collaborate closely with the railways. So this is really a ramping up that's happening. The medium-term goal ambition for usage of railways is 10% during 2022 and attempt to achieve 25% usage of railways for total primary movement by 2025. It helps us not only in terms of cost, as you know, Mr. Purkayastha, but more importantly, in terms of the carbon footprint as well. The question that you had in the last 62nd AGM in response to my question on the possibility of Nestlé setting up its own e-commerce portal for a B2C business. And also, you talked about the MSME creditors. The MSME creditors, I will leave it to my colleague, David McDaniel, to take on. But as far as the B2C is concerned, I'm happy to inform you, Mr. Purkayastha, that we are in a fairly advanced stage of rolling out the B2C model. We are doing various amounts, it has to be discriminating, it has to be compelling and it has to be sustainable as a platform. So this is the work that has been done during the pandemic. And in fact, we are adapting the approach to be aligned with the evolving regulatory landscape because, as you know, these also have strong regulatory impacts on e-commerce. Our focus will be on delighting our consumer. And quite soon, you will see the first pilot of it coming out. As far as the MSME question is concerned, David, would you like to take this?

Yes, absolutely, I can. Thank you. So absolutely, I remember the question last year, and the answer is broadly similar. There are more MSME vendors registered with us now this year. So last year, we had less than 800. Now, we have approaching 1,300 vendors who have registered as MSMEs, not because the scope has changed, but because they have now made the registration. So they come into the bucket for that reporting. Also, our business has grown during the last 12 months, and we're doing some more business with those MSMEs as well. So saliency as well as quantity of them. And I said last year, and I can repeat it, we do never -- sorry, bad English perhaps, we never pay people late, okay? So we are absolutely committed to paying people on time always, all of the people we work with, all of the suppliers we work with, and I can assure you that it is the case.

David, you might like to take the next question, what is the number of employees covered by the Future Ready Plan in respect of the Defined Benefit Pension Scheme?

Yes, I can. We've covered 2/3 of the liability with the work that we did last year, the Future Ready Plan, and 1/3 of the liability remains with those employees that we didn't progress with. In terms of quantum of people, around 2,000 people were covered under the first round and about 4,000 people are left. We are talking about people with not always the longest of 10 years, in fact, because our Defined Benefit Program was closed to new entrants in 2013. So some of those people who joined just before that closure are 10 years in the company and still have some way to go. So there is 1/3 of the liability left, and we are in active discussion as to how we will approach or how we will create a solution for that. But the amount of money invested with the insurance company for the tranche that was dealt with on the Future Ready plan last year is absolutely frozen and fixed, and there is no further liability or obligation there. Maybe I could take the SADPL question.

No. What you could do is just cover off this because Mr. Purkayastha had one more. On the inflation indexing with regard to the investment that has been made, is this full and final extinguishment? Or do we have any further liabilities?

No. As I just mentioned, that is a full and final settlement. The money that we've transferred to the insurance company is full and final for the Future Ready Plan. There is no further obligation with regard to that 2/3 of the liability that was transitioned out.

You can take the SADPL now.

Okay. So we did have an investment in SADPL, Sahyadri Agro and Dairy Private Limited, for a number of years pursuant to a business venture in the dairy industry. We had been looking actively for a disposal of that stake for quite some time, and that transaction was completed in February, and that is now off the books fully and that chapter is closed.

Let me take the question on the INR 26 billion investment plan, Mr. Purkayastha, that you asked about the CapEx. In 2020-'21, major expansion projects completed, including the greenfield factory in Sanand, involving 4 noodle lines, a new KitKat molding line in Ponda, adding capacity of about 10,000 tonnes and a new line for nutrition products in Samalkha. The total of -- this totals to about INR 9 billion, so out of INR 26 billion, INR 9 billion has been already spent. That leaves the balance of another INR 17 billion to take forward over the next 3 years. Coming to your question on the PLI scheme. Nestle has been selected for the PLI scheme under the processed fruits and vegetable category covering Maggi sauces, Maggi Masala-e-Magic and Maggi cubes. The benefit will be available over 6 years, starting financial year 2021-'22, subject to Nestlé making the committed investments and meeting the sales growth criteria. Nestlé will be completing the committed CapEx of INR 50 crores in the approved categories, sauces, Masala-e-Magic and cubes by 31st March 2023 on its own in our own factories. So this is not going to be outsourced, Mr. Purkayastha. It's going to be done 100% by the company. These investments will enable us to meet the sales growth criterion of 10% as per the PLI scheme. I hope this gives you an idea of the scheme and the impact. One final question for you, David, is on the right-of-use assets. During the year, there has been an addition of INR 1,824.8 million under the head buildings in the right-of-use assets. Note 5, what is this on account of?

Yes. This is on account of the new lease for our head office, which was put in place for a period of 9 years. That is the vast majority of the increased amount under this heading.

Coming to your final question on the milk and nutrition volume evolution. Thank you for the question. The Milk Products and Nutrition segment, Mr. Purkayastha, contains a motley number of different products, dairy whitener in UHT milk, sweet and condensed milk as well as our Infant Nutrition business. It is -- we agree that there is an importance of the Infant Nutrition business. However, I think one of the things I would respectfully disagree with you is on the so-called reviving the Infant Nutrition business. This is a strong market. We are strong market leaders in this category with the most advanced portfolio. And also, we have made some very aggressive and strong entries into the Toddler Nutrition business, where our growths are significant and probably one of the -- amongst the fastest new products that we have launched in the market. During the COVID, there has been, of course, headwinds. While some couples may have decided to postpone starting a family, in fact, the real evidence is slightly contrary to the anecdotal evidence that you picked up, Mr. Purkayastha. Actually, birth rates have come down secularly because people have decided to postpone starting their family and rightly so because of either the medical-related fears or indeed incomes, the other spaces that people have got. However, this is a category that is of considerable interest to us. And we are looking at -- and some of it has actually done extremely well during the pandemic. So some parts of nutrition, some parts of milk have done well, but others have not done well. So in the overall total, it looks to you a little bit short on growth. But clearly, it is an area of competitive advantage that we don't seek to give up in a hurry. On your coffee question, I think the main change is you answered it yourself. While the domestic retail business has actually grown by 26%, so it's a very strong growth that has happened in the domestic retail business, the out-of-home business, on the other hand, took a bad beating during this period because of COVID. Again, we are coming back. You'll be happy to know that we are today at almost 100% of what was the 2019 business. And I do hope that if nothing further happens on COVID, as we move forward, this will be an area of secular growth for the company. So that's where we will be. So with that, Mr. Purkayastha, I hope I have done justice to the numerous questions that you've had. I want to really thank you for taking the trouble. It is rare for a shareholder to delve into the annual report as detailed as you have with very pointed, very piercing and very intelligent questions. My compliments to you. And I do hope that you continue to have the interest in the organization the way you have shown in the meeting today. Thank you very much, Mr. Purkayastha.

I now invite the next speaker member, Mr. Jasmeet Singh from New Delhi, having Client ID No. 10987503, to speak.

Yes. Am I audible?

Yes, sir.

Yes, you are.

Yes. Thank you, Chairman. So it's been a long wait. Now that the meeting is coming to an end, and I will not hold you, the Board, still more on this call, let me quickly read out. Actually, much of my queries have already been addressed. So let me come to the point where we met last year when we concluded the meeting asking for the shareholders' opinion if you conduct the meeting physically in the next year, which is this year. Now, we are again connected on a virtual mode. I thought that this year we will be meeting in person. Nonetheless, hoping that next year around definitely we will be meeting in person. And again, a good set of numbers on within and kudos to the management, leadership team and everybody who have worked hard to deliver these set of numbers. I am sure the new product launches last year, behind of this year and the coming years will keep us growing year over year. Chair, I have a couple of observations. I -- if you recall last year, I accepted your honor during the virtual meeting to consider putting of Maggi Ka Langar to share humanity at some Gurdwara in South of Delhi, which you actually accepted and assured, but I didn't got any response from concerned team. I will be happy if you [indiscernible] this. My second point is, while Maggi is our -- one of the top sellers, but there are concerns over its composition leading to the health concerns. Hope our R&D team is working hard to make it safe and safer for the young children. Yes. So I conclude by saying that I'm happy with the secretarial team interacting with the shareholders, leading by Gunjan Arya, Prashant, who are working close with us to address any of our concerns... With this, I confirm that I have voted -- I and my group of techno shareholders have voted in favor of all the resolutions. And all the best. Thank you very much.

Thank you. Thank you, Mr. Jasmeet Singh. My sincere gratitude to you. You have spoken the last time as well. It's a privilege and honor to hear you again. My apologies for keeping you waiting. I think we do the due diligence of going through every question. I would like to answer them as best as I can. And unfortunately, that means it takes a bit of time, but I do hope that you will indulge me the time that has been spent today. Regarding your request for setting up a Maggi point in a Gurdwara, I do recall this. Kindly, we're good enough to send the details to our secretarial department. I will certainly have our person to take a look at it as to what we can do, why was it not done in the first place, there must be some good reason for it, and what we can do in order to help if there is anything that can be done in the matter. As far as making our products more nutrition is concerned, as you rightly said, Mr. Jasmeet, we have an R&D facility in India, where there is active work on what we call ancient grains, so grains like millets, like ragi, like jowar, like oats, et cetera. And we will be coming up with products and initiatives that will enhance the nutritive content of our brands as well. So that is a continuous journey, and I thank you for your encouragement of that journey. Thank you very much.

I now invite our next speaker member, Mr. Karam Arora from Faridabad, having Client ID 1204470003785696, to speak.

Good afternoon, Chairman saab, Board of Directors and my fellow shareholders. Sir, [Foreign Language], but I will stress on some -- certain issues. I will emphasize on some certain issues, like declaration of bonus, sir. Bonus [Foreign Language]. So very, very thanks to you for your 63rd AGM meeting. Congratulations, sir, to you and your Board of Directors. Thank you.

Thank you, Mr. Arora. Thank you very much. Thank you for your consideration of really keeping your question also very, very short and sweet. Your suggestion on bonus is taken on board, and we will see what we can do about it. On factory visits, I want to make it clear, sir, that if any of you is traveling close to our factory and you would like to visit, please get in touch. I think it can be enabled. We don't organize for factory visits as such because factories are also areas where there is a fair amount of concentrated work being done. But if somebody is traveling close by, gets in touch with us, I think a visit can be arranged. As far as competition is concerned, you're right, we are ready for competition. [Foreign Language] whether we are able to do the kind of things that we should be doing and hopefully earn the trust and respect of not only you, but also consumers. As regards jobs are concerned, I think your children are free to apply. This company is a meritocratic company. It's a merit-based company. I don't have any [Foreign Language] but if they want to apply, they are most welcome, and certainly, depending on the opportunity and depending on the merit, they will be given because [Foreign Language] Karam Singh will be more critical at an AGM saying [Foreign Language]. So, therefore, that's also something that we would like to keep in mind. But with all due respect, thank you very much for your kind words, and thank you for your suggestions. Thank you.

I now invite our next speaker member, Mr. Susheel Arora from Faridabad, having Client ID No. 1204470003553370, to speak.

[Foreign Language] Susheel Aroraji [Foreign Language]. Good afternoon, Chairman sir and [Foreign Language].

Thank you, Susheelji. Thank you very much for your question. And we will keep your suggestion in mind.

[Foreign Language].

Thank you. Thank you for your suggestion. [Foreign Language], and you will come to know of it. Thank you very much.

I now invite our -- I'm sorry, our next speaker member, Mr. Subhash Chander Wadhwa from Delhi with Client ID No. 10082349, had registered, however, has not connected to the meeting. We will, therefore, move to our next speaker member, that's Chander Shekhar from Delhi, Client ID No. 1201330000539287, to proceed.

Am I audible sir?

Yes, you are.

[Foreign Language]

[Foreign Language] Thank you very much, Chander Shekharji, for all your kind words. God bless you, and please take care of yourself. Thank you very much. Thank you, Mr. Shekhar. With that, we have completed all the speakers. Thanks to all the speakers participating from across the country for their comments and questions. We have tried our best to answer the questions raised by all the speakers. Next, the questions sent in advance by e-mail. I would just like to request, if it is not a problem, I will just take a 2-minute comfort break and please come back and resume the proceedings with your permission, please. So Inba, if you can just give me a 2-minute break, I'll just come back and we can start the proceedings on the next set of questions. Thank you. [Break]

Thank you very much, ladies and gentlemen, for your patience. I'm very, very happy that we have been able to answer all your questions as best as we can. Next, the questions sent in advance by e-mail. I would like to thank the esteemed members who have sent their questions in advance to the designated investor e-mail of the company. If I were to start with the first question, e-mail from Mr. Nitin Nerlekar and Meera Nerlekar, IN30082911351982 and 10018844. Nestle would spend INR 2,600 crores on CapEx to expand the manufacturing capacity under various categories. Would it be possible to quantify the amount earmarked for Infant Nutrition and Formula to be specific? What has been the historical growth rate in Infant Formula and has COVID resulted in muted growth in this category? Based on the published volume data in the annual accounts over the last several years, it appears that only pricing has resulted in incremental revenues with volumes, in fact, showing a negative growth. In fact, Nutrition, which accounts for more than 45% of the revenues is putting pressure on the overall growth of the business. What kind of strategy is proposed to revive the Nutrition business? Thank you very much for the question. The Milk and Nutrition Products segment, as I had answered earlier, Mr. Purkayastha as well, one of our esteemed shareholders, is a motley group of different products, consisting of dairy whiteners, UHT milk, sweet and condensed milk, et cetera, as well as our own Infant Nutrition business. I agree with you, recognizing the importance of the Infant Nutrition business. However, where I'd like to respectfully disagree is on the point of reviving the Infant Nutrition business. We are strong market leaders in infant nutrition with the most advanced portfolio in the category and have also made a strong entry into the toddler nutrition category, where we have enjoyed some very encouraging growth. During COVID, like all other categories, this business also had its share of headwinds and tailwinds, while some couples may have decided to postpone starting a family due to the pandemic or many hospitals were focused on providing COVID care at the same time, people focused on making healthier food choices, including for their infants in consultation with their doctors if breast feeding was not possible. The business has had a strong trajectory after the second wave, including gaining market share. On your question of investment, I'd like to reassure you that this business has never suffered in this area, particularly on upgrading quality norms or enabling product innovation. And that clearly is the strategy, which was the last part of the question, leadership in science, leadership in technology and quality and leadership in compliance. The second question, which has come is that there has been a lot of talk with regard to new product introductions across categories. Could you please highlight the broad progress on this? I'm not seeing any significant thrust, especially on the breakfast cereal category, which Nestle was upbeat some time back. The response, at Nestle, we constantly explore to contribute to a healthier future with good food for our consumers and aim to have a portfolio of products for all generations. All new product innovations are driven by this guiding principle, and we remain open to opportunities that may arise in times to come. In the last couple of years, we have launched almost 60 innovations in the last 3 years. For example, Maggi Nutrilicious - Atta, spinach noodles, Munch Nuts under out-of-home Nestea Instant Green Tea, instant hot and soluble green tea. We continuously look at our portfolio in terms of focusing on the core as well as new products depending on the opportunities. Breakfast cereals continues to be an area of focus and a source of future growth for the company. We've launched Nestle GOLD Corn & Oat Flakes with a distinct differentiation versus cornflakes and also continued our investments behind our kids offering, Koko Krunch. We also launched Koko Krunch Kookie Cereal, a first of its kind cereal with the taste profile of a cookie. Right now, we are focusing our investments in a few select geographies in order to gain share in the category, which is a very competitive category. The third question is, what are the plans with regard to coffee and chocolates for driving volumes and also new introductions? Company continues to grow in coffee. As I mentioned earlier, the growth have been very strong, have been consistent and have been built on the Nescafe platform. Nescafe has recorded another year of double-digit growth, led by Nescafe Classic based on significant growth in household penetration and increase in market shares. Nescafe continues its thrust in innovation and renovation. And as I mentioned earlier, have launched a Nescafe all-in-one, a convenient coffee premix affordably priced at INR 10. Nescafe Black Roast, an intense cup for strong coffee levels and a renovated recipe of NESCAFE Sunrise has also been put out into the market, especially in the South, which has gained good traction. Nescafe is also accelerating premiumization, building on the promise of delivering coffee at its best in Nescafe Gold. Chocolate is a growing category, high double-digit growth is what we have witnessed. Our leading brands, KITKAT, MUNCH and Milkybar are growing from strength to strength. Our solid execution in the market, supported by media campaigns, both on TV and digital, festive interventions, attractive consumer promotions are helping in driving the volumes. We have recently launched KITKAT mango and KITKAT mixed fruit in January 2022, which has received a very positive response from the consumer. Going forward in the year, we have more plans to launch exciting new products for our consumers. That completes the question that has been asked earlier. I now come to an e-mail from Mr. Sudhanshu Kela, DP ID 302902, Client ID 40085159. First question, significant decline in 2021 net profits and closing positions of cash and cash equivalents. Second, unfunded defined benefits pension planned by NIL with underlying risks. And third question, deferred tax assets and claim under the income tax. Since the questions are of a detailed nature, I would request my colleague, Mr. David McDaniel, to kindly answer as succinctly as possible, the 3 questions that have been posed.

Thank you, Suresh, and thank you, Mr. Sudhanshu, for your questions. Your questions do revolve around the defined benefit pension plan and the transition into the future-ready plan, which we did last year and covers various aspects around cost determination, decline in profits, reduction in cash investments with the insurance company, compliances and governance processes. So let me respond to all of that. Nestle is not an expert in managing funds. We are an expert in sustaining successful brands and delighting consumers with food and beverage solutions. So in the current scheme of things, the DB plan was unfunded and did not give any flexibility or portability to our employees. We've looked at this situation over a period of time. And over a period of time, different solutions have become available in the market to manage post-retirement benefits in a more professional and expert manner. So we evaluated options, and we went to specific partners to do so, very carefully running through evaluation processes at each stage to make sure that we are making the right decisions, taking our Board and relevant stakeholders through these proposals. And we've undertaken a transition to provide a very secure benefits going forward to our people. That the benefits have portability, have safety, have flexibility, features that modern post-retirement benefit schemes should have and now do have. So this is a changed management. We've embarked upon this as a journey. We have transitioned or worked on 2/3 of our liability as we've made clear in the note in our corporate report. And we are very comfortable with the governance process that we've been through, and we're very comfortable that the decision we've made is to the benefit of employees and in fact, all stakeholders. I believe I have covered most of your questions. Thank you.

Thank you. We come to the end of the e-mail questions. Now for the messages posted on the communication box, I wish to thank the members who have posted these messages. Mr. Pramod Rai, may I now request you to kindly spell out the questions and messages if any received on the communication box one by one.

Thank you, Chairman. There are a few questions and also a few comments. Some of the questions have already been answered. I take liberty to take up those questions and comments not answered or taken so far. Mr. Priyadarsan Mehrotra from Sitapur conveys their wishes to Nestle team for their success story, not just as an investor, but as an emotionally bonded business partner for the last 55 years and also for providing best returns to their shareholders. Also, they would like to know what is the plan for the company to bring out split of shares. Second question is from Mr. Gaurav Kumar Singh, who wishes to know the future plans of the company to come up with the rights issue in future. Third question is from Mohideen Gani, who wish to update on the product launches for the upcoming 1 to 2 years. Also, he wishes to know the plans of the company to manage the raw material cost increases in the recent months. And lastly, there is a question from Ms. Ritu Kanoi, who wishes to know the status of scheme of arrangement for reclassification of INR 837 crore standing to the credit of general reserves to the retained earnings. Thank you, sir. This concludes all the questions, which have been received on communication box.

Thank you. Thank you, Mr. Rai for the question. Firstly, I would like to thank Mr. Priyadarsan Mehrotra and others for their compliments to the company and for the steadfast relationship over the last 5 decades that they've had with us. I'm really gratified and proud of this relationship that makes us strong. Their suggestions regarding the splitting of shares and the bonus, again, as I've responded earlier, are suggestions that we will take on board and see how best we can respond over a period of time. As far as the question from Mr. Mohideen Gani is concerned on NPDs, I would like to inform him that in the last 5 years, almost 100 new products have been introduced by the company, contributing to about 5% of our sales. As I speak to you, Mr. Gani, there are almost 20, 25 projects that are on the anvil. Innovation, renovation will continue to be a key part of the acceleration project for the brand in terms of both getting in new consumers, vetting the appetite of existing consumers and also broadening the horizons of the engagement of Nestle India with the consumers in the market. So this will be something that will be a fairly aggressive platform that would be done, and I look forward to this process with all excitement in the future as well. Coming to the question that has been posed by Ritu Kanoi, may I again request Mr. David McDaniel to quickly summarize where we are on the classification of the general reserves project that we are on.

Yes. Thank you, Suresh, and thank you for the question. Yes, last year, we started a project to transfer the entire balance of INR 8,374 million from general reserves to retained earnings. This scheme of arrangement has been submitted. So far, we have a no-adverse-observation finding from the SEBI, Stock Exchange, Securities and Exchange Board of India. Now we go to NCLT, and the first hearing has been taken upon this matter on the 8th of April. And the order on the motion has been reserved by the NCLT. So we are progressing according to plan, and we expect this project to take 12 to 18 months, and we do hope to conclude on this matter in this year.

Thank you, David. Thank you very much, and thank you, Mr. Rai, for having summarized the questions and the observations. We have tried to answer them as best as is possible in the situation. If any of your questions has not been answered, please write to the designated investor e-mail of the company, [email protected], and we shall respond to you at the earliest. I now come for the voting on the agenda items. Now for the voting on the agenda items 1 to 6 as set out in the notice of the AGM. As explained earlier, members present at the AGM, but who have not cast their votes by availing the remote e-voting facility can exercise their vote in proportion to their shareholding through -- exercise through electronic voting platform provided by NSDL. The icon of which is available on the top of your screen. You will be redirected to the e-voting portal of NSDL. Mr. Abhinav Khosla, Partner M/s SCV & Company, LLP, Chartered Accountants, will scrutinize the votes cast through remote e-voting and votes cast during the AGM on e-voting platform as provided by NSDL. Mr. Khosla will submit the report thereon to me as the Chairman in the prescribed manner, not later than 2:00 p.m. tomorrow. The voting results on all the resolutions placed before the AGM will be declared not later than around 6:00 p.m. tomorrow and shall be immediately intimated to the Bombay Stock Exchange. The results, along with the report of the scrutinizer, shall be uploaded on the website of the company and the NSDL and shall be also available at the registered office of the company. I now wish to draw the attention of all the members participating in the AGM that the e-voting platform provided by NSDL will remain open for another 30 minutes. I thank you all for your participation and for your valuable suggestions and comments, which I assure you will receive due consideration of the management. The proceedings of the meeting will close after all the members participating in the meeting have cast their vote through e-voting, which will lapse after 30 minutes. May I once again take the opportunity of thanking every speaker today, every member, every shareholder who has been present, those who have asked questions on e-mail, those who have asked and made comments through the communication box for your active interest and engagement in the fortunes of your company, Nestle India. It is such engagement, such interest, such confidence and such trust that inspires me and my team and also our Board of Directors to take forward the business of this company to greater heights. Thank you all very much, and best of luck to all of you. Keep safe and keep smiling. Thank you very much.

Dear members, as instructed by the scrutinizers, request all the members participating in the AGM and who have not cast their vote to cast their vote in the remaining period of 10 minutes. Thank you. [Voting]

Dear members, as advised by the scrutinizers, the time for e-voting has elapsed, and they are of the opinion that all members who are participating in the Annual General Meeting have been given adequate time and opportunity to vote at the AGM, and this concludes the voting process of AGM. I hand it back to the Chairman.

Thank you, Inba. [Technical Difficulty] to cast their votes. I now formally declare this meeting closed. [Technical Difficulty]. Thank you all very much. Have a great day. Thank you.