Titan Company Limited (500114) Earnings Call Transcript & Summary

Dear shareholders, good afternoon. And a warm welcome to you all to the 36th Annual General Meeting of Titan Company Limited through videoconferencing or other audiovisual facility. [Operator Instructions] Please note that as per the requirements, the proceedings of the Annual General Meeting will be recorded and available on the website of the company. I now hand over the proceedings to Mr. Dinesh Shetty, Company Secretary of the company of Titan Company Limited. Over to you, sir.

Thank you, moderator. Good afternoon, shareholders. This is Dinesh Shetty, General Counsel and Company Secretary of Titan Company Limited. I'm very pleased to welcome to the 36th Annual General Meeting of the company held through videoconferencing, in compliance with the Government of India directives and to maintain social distance in these testing times. I'd like to inform you that Mr. Muruganandam, Chairman of the company, has conveyed his inability to attend this AGM. And hence, the Board of Directors have chosen, Mr. N.N. Tata, Vice Chairman of the company, as the Chairman to conduct the proceedings of the 36th Annual General Meeting. Now I'd like to take you through certain points regarding the participation at this AGM. [Operator Instructions] Thank you. And now may I request the Chairman of the meeting, Mr. Noel Tata to take forward the proceedings.

Thank you, Dinesh. Good afternoon, ladies and gentlemen. I would like to welcome all the shareholders to the 36th Annual General Meeting of the company. As the requisite quorum is present, I now call the meeting to order. As mentioned by the company's secretary, Mr. N. Muruganandam, Chairman of the Board, could not attend this meeting due to his other official commitments. Also Mr. Arun Roy, nonexecutive, nonindependent director of the company, could not attend the meeting due to preoccupation with other official commitments. I will now call upon the directors, who are on videoconference, to introduce themselves. Start with Ms. Ireena Vittal.

Good afternoon, shareholders. I'm an independent director of the company and I chair the Corporate Social Responsibility Committee as well as the Risk Management Committee at Titan. I am joining the meeting from my residence in [indiscernible].

Thank you, Ireena. Mr. Ashwani Puri?

[indiscernible] shareholders, I'm an independent director of Titan Company, chair its Audit Committee. I am [indiscernible] from my residence [indiscernible].

Thank you, Ashwani. Mr. B. Santhanam.

Good afternoon, shareholders. I'm an independent director of the Titan Company. And I chair the Nomination and Remuneration Committee and the Stakeholders Relationship committee in Titan. I'm joining the meeting from my residence in Chennai.

Thank you, Santhanam. Mr. Pradyumna Vyas.

Good afternoon, shareholders. I'm an independent director of the company, and I chair the Asset Committee Cycle. I'm joining the meeting from my residence in Ahmedabad.

Thank you. Dr. Mohanasankar Sivaprakasam.

Dr. Mohan, you've muted your audio. I'll request you to kindly unmute that.

Good afternoon, shareholders. I'm an independent director of the company. I'm joining the meeting from our residence in Chennai.

Thank you. Ms. Sindhu Gangadharan.

Good afternoon, dear shareholders. I'm an independent director of the Titan Company, and I'm joining this meeting from my residence in Bangalore.

Thank you. Mr. Bhaskar Bhat.

Good afternoon, shareholders, I am Bhaskar Bhat, Nonindependent Nonexecutive Director of the company attending the 36th Annual General Meeting of Titan Company Limited from the corporate office Integrity of Titan in Bangalore. [Foreign Language]

Thank you, Bhaskar. Finally. Mr. C.K. Venkataraman.

Dear shareholders, I'm C.K. Venkataraman, the Managing Director of Titan Company, and I'm participating in this AGM from the corporate office of Titan Company in Bangalore.

Thank you, Venkat. Thank you, my colleagues on the Board for your introductions. I will now call upon Mr. S. Subramaniam, Chief Financial Officer, to introduce himself.

Good afternoon, shareholders, my name is Subramaniam. I'm the Chief Financial Officer of Titan Company Limited, speaking to you from the corporate office of Titan Bangalore.

Thank you, Subbu. We also have the secretarial auditors and the statutory auditors attending this meeting through videoconference. I thank all the members for joining this meeting. I hope the members are safe and in good health. Due to the current situation arising out of the COVID-19 and the social distancing norms, we are, for the first time, holding this annual general meeting through videoconference. This is in compliance with the directions of the Ministry of Corporate Affairs and Securities and Exchange Board of India. A live streaming of this meeting is also being webcast on NSDL's website. The company has taken the requisite steps to enable members to participate and vote on the items being considered at this AGM. The annual report for the last financial year was sent to all the shareholders through e-mail in compliance with the directions of the Ministry of Corporate Affairs and SEBI. For your information, since there's no physical attendance of members, the requirement of appointing proxies is not applicable. The company has received 6 authorized representations from corporate shareholders appointing representatives on the Section 113 of the Companies Act 2013 in respect of 471,007,920 ordinary shares, representing 53.06% of the paid-up equity capital. The registers are required under the Companies Act 2013 are available for inspection. The notice of this meeting was sent to the members by electronic means to those who are entitled to receive the same. With your kind permission, ladies and gentlemen, I take the notice as read. Since there are no observations, qualifications or comment by the statutory auditors in their report on financial transactions or matters, which have any adverse effect on the functioning of the company, pursuant to Section 145 of the Companies Act 2013, the auditor's report is not required to be read. I now take this opportunity to read out the Chairman's statement. Ladies and gentlemen, it gives me great pleasure in welcoming you all to the 36th Annual General Meeting of your company, which is being conducted virtually, considering the circumstances and most importantly, to ensure the safety of all stakeholders. As you are aware, after an illustrious career in the company, Mr. Bhaskar Bhat, consequent to his superannuation on the 30th of September 2019, ceased to be the Managing Director of your company and passed on the baton to Mr. C.K. Venkataraman. I would like to take this opportunity to acknowledge Mr. Bhaskar Bhat's contribution to the company. And as you all know, there is exemplary leadership your company scale new heights. We are happy that Mr. Bhat continues to contribute to the growth of the company in his capacity as a director on the Board. Also, on behalf of the Board and the shareholders, I wish Venkat all the very best for his journey as a Managing Director. I would also take this opportunity to acknowledge and place on record the Board's appreciation for the contribution of Mrs. Hema Ravichander, who ceased to be an independent director of the company on completion of a second term effective July 31, 2020. She served on the Board for 11 years, and the company has benefited immensely from her rich experience and wise counsel. The year under review will be set with several challenges, starting with the slowdown in the economy, leading to subdued consumer sentiments, significant rises in gold prices, and subsequently, in the last quarter of the financial year, the onset of the COVID-19 pandemic, which brought to a halt all commercial activities with governments imposing strict lockdown measures to curtail the spread of the virus. Due to the alarming rate at which the COVID-19 was spreading, your company opted to close all stores, factories and offices, even before the government could impose the lockdown, to ensure the safety of its customers, business associates and employees. The company adopted a work-from-home policy during the entire lockdown period. In this difficult operating context, your company delivered a satisfactory performance with revenue from operations growing to INR 20,010 crore, up 4.9% from INR 19,070 crore in the year '18/'19, and profit after tax growing by 10.4% and to INR 1,518 crore compared to INR 1,374 crore in FY '18/'19. The Watches and Wearables division recorded a growth of 7.2%. The revenue from Jewellery division grew by 4.4%, touching INR 16,738 crore. The revenue from the Eyewear division grew by 6.4%. The Indian dress-wear division grew by 102% and the Fragrances and Accessories division recorded a growth of 27%. The year also witnessed aggressive expansion of the company's retail footprint. As of March 31, 2020, the company had 1,739 stores with over 2.27 million square feet of retail space. Considering your company's performance and the need to preserve cash for the current uncertain year, the Board has recommended a dividend of INR 4 per equity share for your approval. The current financial year began under severely challenging circumstances, and it is only in the last 2 months that we have seen some normalcy returning. As on date, your company has resumed operations in all its offices, plants and around 1,500 stores with staffing well within prescribed limits and stringent safety measures implemented. In your company and all its subsidiaries, including CaratLane, in the larger ecosystem that includes direct and indirect employees, we have unfortunately lost 3 people who succumbed to the virus, and we have 75 active cases. All care is being taken in all the premises of your company and support extended wherever required. With the COVID-19 crisis continuing to grapple the economy, customers showing restraint in shopping, the company's products being discretionary and in the touch and feel category and the general area of uncertainty surrounding commercial operations across the country and the world, sales are likely to be under additional pressure this financial year. Further, with several state governments enforcing intermittent and localized lockdown, the operations tend to be disrupted, thereby affecting the manufacturing and supply chains. However, your company believes in the adage that adversity is the mother of all invention, and as stated by Albert Einstein in his epigrammatic style, out of clutter, find simplicity; from discord, find harmony; in the middle of difficulty lies opportunity. Your company remains resolute to find opportunities amongst challenges and explore new ways to emerge stronger. Your company is confident that when the dust settles, a resilient Titan will prevail, and this intent is roughly reflected in the theme of this year's annual report resolute resurgence. True to this spirit, your company has fully leveraged the digital platform and has been rapidly moving towards omnichannel and offering various features, such as virtual try on, try at home, live chat, shop by appointment and virtual-assisted shopping. Your company also took several initiatives during the lockdown to nurture and strengthen the bond with the customers through various innovative and engaging digital interventions. The Jewellery division of your company saw an upward trend during the first quarter of the financial year 2021, which was attributable to the pent-up demand, where customers missed out on buying jewelry for occasions, such as Akshaya Tritiya and inquiries for weddings that were deferred due to the lockdown. Added to this there is an improvement in the perception of gold as an asset class, and your company intends to seize this opportunity. With fitness and wellness becoming the mantra for the future, the Watches and Wearables division of your company sees a lot of potential in this category and is well placed to address these demands. Vocal for local is another area that has been gaining momentum, and your company has always strived to bring to the fore and celebrate Indianess through various product offerings and will continue to come up with innovative products that resonate with the pride of being Indians. Your company's focus for the current year would be to ensure the availability of adequate liquidity to run the business efficiently and also leveraging the company's strong balance sheet to seize opportunities that may present itself and also to maximize the cost efficiency by various programs. Considering your company's unique position of strength and the multiple categories in which the company's product offerings are, your company remains poised to seize the opportunity in the market much better than other players. The company is also resolute in growing responsibly. And on this front, your company has reached out to its associates, vendors and business partners and extended financial support to its franchisees and vendors, particularly by providing soft loans at low interest rates. Further, in addition to the CSR [indiscernible] and projects that your company continues to support, your company also rose to the occasion and provided proactive and timely COVID-19 relief. In addition to contributions made to the Tata Group's efforts and to the Tamil Nadu Chief Minister's Relief Fund, your company has made contributions towards ventilators, [ multi-param ] monitors and oximeters, hospital beds, support towards setting up of a COVID-19 care in Bengaluru along with Rotary International. The company also provided personal protective equipment and provided food and water to migrant workers and students in large numbers. In conclusion, I would like to thank all our esteem shareholders, customers, business associates and vendors, bankers and the media for their continued support, trust and cooperation. I would also like to appreciate the hard work, dedication and tireless efforts of our employees and the management for the accomplishments of your company. I would also like to thank all the shareholders who have joined this AGM virtually. Your company remains steadfast in creating a stronger business that is set for resurgence as the market conditions improved. Thank you. I now request the company Secretary to explain the sequence of meeting and process of voting on -- no, sorry. I think we now [indiscernible]. Yes. We now [indiscernible]

The Companies Act 2013 and SEBI listing regulation provides for facilitating electronic voting on the resolutions as covered in the notice of the AGM. Currently, the company has provided its members a facility to cast their vote through the remote e-voting system administered by NSDL. Facility for voting at the meeting is also provided for members present here through videoconference and who have not voted yet. Members can vote with a working stage of NSDL e-voting website and cast their vote while at the same time watch the proceedings of this AGM. [ Mr. Pradeep Kulkarni ], the active Company Secretary, has been appointed as scrutinizer to scrutinize the votes cast at the meeting and through remote e-voting. Since the AGM is being held through videoconference and the resolution mentioned in the notice convening this AGM have been already put to work through remote e-voting, there will be notice of [indiscernible] resolutions. May I now request the Chairman of the meeting to continue with the proceedings.

Thank you, Dinesh. I now request members who have registered to speak to ask their questions one by one. May I now request the moderator to call out the names of the registered speaker shareholders.

[Operator Instructions] We have the first question from [ Ms. Kotokshi Sam Patel ].

Respected Vice Chairman, Mr. Noel Tata; our MD, Mr. Venkataraman; Mr. Bhaskar Bhat; Mr. Arun Ray; ladies on the Board; Mr. Ajoy Chawla, CEO of Jewellery Division; eminent directors on the Board; our company Secretary, Mr. Dinesh Shetty; our CFO, Mr. Subramaniam, a very good afternoon to all of you. I would also like to thank the moderator, Chorus Call people, for this videoconferencing. Videoconferencing this time, which has been arranged by various companies for shareholders attending the AGM, this system has been very much -- it's very good to adopt this system even in the coming years. This system will help us not only to save our time and money of the company but also of shareholders. I wish MCA and SEBI to continue with this practice in coming years. Titan is a joint venture between TIDCO and Tata Group from 1984 with superior craftsmanship and innovative technology trust with quality. Today, Titan stands at the fifth largest own brand watch company in the world from watches to eyewear to jewelry to drapes. We have given innumerable choices to Indian public. I congratulate the company for the various awards that the company has received as mentioned in your annual report. The CRS (sic) [ CSR ] activities of the company has also been very good. Company has spent almost INR 30.99 crores in CSR activities. Titan is a debt-free company, and I am very proud to be a shareholder of such a company. So Titan has launched Taneira. It has sarees and dresses. Do we have any separate stores for Taneira in Mumbai? Can we combine it with Trent or Westside? We can have small pop-ups in Westside or Trent so that ladies can shop from one single place and choosing from different items. We have our -- we have on the Board, Mr. Noel Tata, whose expert advice, we can avail as he is a very reliable and capable person who has built Westside and Trent. Now I put forth some few questions. So what are our plans to embark on the aggressive growth for Jewellery business? Will our demand come back, especially in this festive season of October, November, December, as it is a festive season? How much is your R&D cost on technological product, especially watches and eyewear? You have given R&D cost -- overall cost, you have given on Page 72. What is the individual cost of this technological product? Which is a higher-margin product in fragrance sector? Is it the perfume or the deodorants spray? Sir, you have made this a Fastrack version fourth version. Now fifth version has also come up. Do we have this [ fast version track ] where we get oximeter or the water sensor, especially in the watches because it will be very useful for not only for joggers but for even normal senior citizens also? Sir, cash and bank balance have come down considerably. What reasons does the company attribute for the same? Is it -- maybe is it due to the gold acceleration in price? Or are there any other reasons? COVID, of course? Has company applied for any patents? And how many patents we have received so far? And how many are pending? In the annual report, you have very well specified the various capitals. Now the -- I think the fixed capital of finance, HR, social, intellect. It gives us a very good insight about the company. Sir, there is a very high -- upward trend in the gold price. What impact does it create on our various products? With the increase in this price, is there any decrease in the footfalls in our showroom? Any chances of promoters trying to increase their stake in the company? I support all your resolutions. I'm extremely happy with the company, and I'm happy to be a shareholder of this company. I wish every employee, the management team and the Board for giving good results. Definitely, the pandemic period will also go away. And the sun will against shine, and we will come out successfully. I wish all good luck.

[Operator Instructions] We have the next question from [ Mr. Hari Rao Ramchandra ].

Dear Chairman, Managing Director and Directors, thank you very much for an opportunity to speak on this occasion. My name is Hari Rao. And my registration number is [ RN30001831112775985 ]. First, let me congratulate the Board in presenting an annual report showing a spectacular performance for the year 2019/'20, registered high growth -- highest level of growth and also a high level of profit. Thanks for a decent bonus despite the necessity for reserving for the coming year. And I congratulate the company for putting forth an extremely detailed and candid annual report for the disclosures and audit statement, governance, CSR initiatives and all other achievements. The charter approach to reporting in accordance with [ IARC's ] integrated reporting framework is really price worthy. This year's report has become a benchmark annual report. Referring to the Board report, Pages 58 onwards, both watches and jewelry have performed very well, together contributed profits. There is overall growth in other sectors as well. These are all very noteworthy. Another note will be the company has earned AAA rating from the [ CRISIL ]. Referring to the performance of the subsidiaries in Page 62, again, TEAL has returned INR 463 crore with a profit of INR 78.12 crore, an increase of 37%. I want to congratulate the management of this subsidiary, demonstrate how trust in leveraging internal core competence can bring substantial and sustained growth to the company. But [indiscernible] continues to be in adverse situation. This year also, it's showing a loss. I don't know what you supposed to do with that. The R&D expenditure of 23.97, most of which is actually towards recurring expenditure. This is actually less than 0.12% of the turnover. Appears to be too meager for a company of our size and our likes. Our own hedge created by company's internal R&D is performing well even today. How can you leverage our internal core competency to create new world-class products, product lines, except through sustained R&D simulation challenge and support? The company has earned -- on the foreign exchange side, the company has earned INR 156.7 crore, whereas the imports are as high as INR 748 crores. The low spend in R&D and large spends in foreign exchange over and above are what we are in the last few years need to be addressed, particularly in the present context. When it counteracts our Prime Minister's call for [indiscernible], we need a new manufacturing strategy to eliminate Chinese import. I now turn my attention to the letter of Managing Director in the annual report, Page 8 onwards, where he has rightly drawn our attention to a tough situation faced worldwide due to COVID-19 havoc. The menace is intense and terribly affects all economics activities, particularly our company's operations. Desperate times when India has crossed more 2.2 billion people afflicted by the deadly disease, more than 4 crores the world over, okay, whatever that is. While our Managing Director is indicating a bold approach to face the situation and assuring the best efforts of management to counter and I'm sure there's nothing will be spared, this is clearly the wholeheartedly appreciated. But the problem we are facing is not small, not local, but a global one where people over priority world over has totally changed besides high inflation, job losses, GDP growth world over, poor international trade connectivity are all compounding to change life patterns and economic activities. We cannot run ever from this crisis situation and face it in reality. It is in the -- in this context, that company must relook at our business model and enabled to counter the adverse situation. The fight against COVID-19 will be long. The trade will be affected quite seriously for a long time. Businesses and societies in a distinguished amount temporarily postponed, disturbed consumption of all our products and services as well identify new and more permanent patterns of consumption with digital coordination and medical health, et cetera. Add to this runaway price gold now. So it is become necessary shaping post-crisis reality, expecting change, understand broad social shift, scrutinize high-frequency data, identify own weaknesses, study regions of activity, scan maverick activities and new consumer needs and behaviors. So you will need such new products and product lines to motivate high -- motive hope and then growth of orientation, while, of course, continuing our efforts to maintain the present activities. Facing turbulent and changing market and customer problems as well as behavior need a well-tuned innovative system that can spark emerging product, services and business model opportunities, rapidly develop and successfully scale them and that typically, our company has many [ cellulose ] of innovative excellence, but mostly internally oriented to cost reduction. It has its own limitation. Now it will be time to harness, integrate, challenge these innovative capabilities with both new vision and new purpose to bend and address the new customer problems. It needs -- because the customer focus is now changed towards not barely a luxury product, but to maintain their food vertical and health care activities. And therefore, there is a different type of need with them coming in. In addition to that, there is also another need that's developing is the defense of the country, where Prime Minister has been -- we have seen now, opening of more than 150 -- 105 component reserve for our internal production defense cycle. And we are in a small way also in the defense activity, the aerospace activities. So therefore, we have to -- we have to address the new customer problem, create growth opportunities and creating new customer values. Our R&D must be renewed to address new core needs, new opportunity areas like health care, digitization, virtual imaging, defense and other needs as they evolve, shifting from Chinese imports to indigenous products as advocated the Prime Minister, they open new avenues. Our camaraderie that is more than a dozen Bangalore software companies have partnered to create new value for the [ MG ] cars now in the market. And how can we mobilize their expertise to open gateways into new and essential product line, which may be needed urgently for people to survive in the new environment, opens a whole new challenge, new opportunities and our growth and success depends upon how fast we are on our mind and our feet? While we are not sure what -- nor we are very much worried about how we'll perform during the current crisis this year, this may not -- we may not do -- reach the level that we had done last year, and it may be a difficult year, I know. This year, performance may be treated as a moratorium. It appears that we need to relook at our vision and time-bound action plans for growth of the company in the long run and coming years. I believe the management and Board must set up a series of [ mindblower ] meets from 0 base, like we did at Westin [indiscernible] in 1985. I kindly thank for this opportunity to talk to you. Thank you very much.

We have the next question from [ Chandravati Gatani ].

I'm [ CS Chandravati Gatani ], a joint holder in [ Chandravati Gatani ]. Mr. Noel Tata, sir, [Foreign Language] Sir, I've got a request, sir. I want your autograph and a visiting card, sir. Mr. Tata, I'm telling you, sir. We have got many awards, CSR is very good and our debt-free company, sir. I welcome our new MD also. But still, though I'm [indiscernible], I still have some questions, being a CS, sir. Our Titan is one of the -- and I've been given some time, right, I'm trying to be fast, sir. It is one of the largest watchmaker globally and got second ranking in volume in the smart wear [indiscernible] category, sir. Company has 11,000-plus multi-brand outlet and have around 7,500 employees with 1,700 plus retail stores. [Foreign Language] I'm a very happy. Now there are a lot of positives, sir. Profit, [ INR 1,518 crores ], it's amounting the revenue top INR 20,000 crores, and that's for the next year [Foreign Language]. The watch case manufacturing plant at Coimbatore, it achieved gold ready in IGBC certification, gold rating, sir, [Foreign Language]. So it's a very, very good thing. Still positive costs [Foreign Language] positive [Foreign Language]. Our market share has fallen from [ INR 101,370 crore ] to [ INR 82,893 crore ], sir. [Foreign Language] And return of equity, 1% [Foreign Language]. I give you the benefit of the doubt, sir. It may be COVID. It may be anything, sir. But kindly, sir, [Foreign Language] Our closing cash and cash equivalent, 5,046 [Foreign Language] 36,405, sir. It's not at control. As a CI, I don't like it, sir. [Foreign Language] What is the reason, I would like to know, sir. And our contingent liability is INR 35,226 crores [Foreign Language]. What is the status, sir? I support all your resolutions, sir, and I feel very happy [Foreign Language], Mr. Tata [Foreign Language].

We have the next question from [indiscernible] Gatani.

Madam, I've spoken.

Okay. We have the next question from [indiscernible]

Can you hear me?

Yes, we can hear you. You may go ahead.

[indiscernible]

We can't hear you, clearly, ma'am.

Can you hear me now?

Ma'am, we can't hear you clearly. But yes, you may go ahead.

[indiscernible]

Yes, ma'am, you may go ahead. [Technical Difficulty] We will move to the next question while we are checking for them. We have the next question from [ Vijanansing Simal ]. Sir, you may go ahead. Mr. Simal? Can you hear us? We have the next question. Sir, Mr. Simal, are you able to hear us? Sir, we can't hear you. We move to the next question. We have the next question from [ Mr. Vinod Motilal Agarwal ]. Mr. Vinod? [Technical Difficulty] We have the next question from [ Mr. Rajendraprasad Joshi ].

Respected Chairman, Sir, Muruganandam; Vice Chairman, Noel Tata; and MD Venkataraman; Company Secretary Dinesh Shetty, good evening to all of sirs. Sir, at the outset, I must appreciate the services of the secretary department. I received the soft copy of the annual report well on time. Sir, my thanks to [ Sarika, Diksha ] and others for contacting me to guide for the joining again. They are -- all well cooperative and cordial by nature. Sir, our company has really proved worth of its name, Titan, and has become a market leader with a strong brand value. Sir, our products are so acceptable in the market, and we are very fond of these products that your watches are superb in quality also. Sir, despite very difficult times for economy and all the sectors, our company has delivered a highly satisfactory financial performance. Both revenue and profits have surged upward. And Board has recommended dividend of INR 4 per share that is 400%. We are very much satisfied with this performance as well as reward to us by dividend. I congratulate the Board for company's upgradation of credit rating by CRISIL from AA+ to AAA. [indiscernible] rating agency also rated our company at AAA. This indicates a financial soundness of the company and also high security of our investment. Sir, our equity is of nearly INR 88 crores as against [indiscernible] are very high, INR 6,579 crores. I hope that our Board will consider the bonus this year. Sir, now I will have some queries. Do our company has any plans to diversify in any new verticals in FY 2021 and FY '21/'22? So to what extent all-time high prices or gold and silver have impacted the finance and business of our company? Third is how many new stores are likely to be added in FY 2021? Sir, what is your lookout for FY '2021? So with this, I strongly support all the regulations and wish all the best for the progress of the company. Thank you very much, sir.

We have the next question from Tamal Kumar.

Is it okay? Are you hearing me?

Yes, sir. You may go ahead. Yes sir, we can hear you.

Good afternoon, Mr. Tata. Mr. Bhat, Mr. Venkataraman, and other directors of the company, myself, Tamal Kumar Majumder, an equity shareholder from Kolkata. I have some queries relating to audited accounts and other matters. Due to COVID-19 pandemic, the company's sale was impacted significantly in the first or second half of March 2020 and announced a decline in income of 5.5% for the quarter 4 of financial year '20 in comparison to same quarter in financial year '19 on stand-alone basis. But overall revenue for the financial year '20 registered a growth of -- growth by 5%, and PBT grew by 9% on stand-alone basis over last year. And company's retail chain stands at 1,819 stores as of 31 March 2020, with a retail area crossing 2.3 million square feet necessarily for all its branch. Sir, all stores, factories and offices are closed from 17th March up to the first week of May due to COVID pandemic. And what is the present status now in this regard? Sir, Q1 of financial year '21 booked a loss before tax of INR 335 crores on stand-alone basis against a turnover of INR 1,862 crores, which includes sale of gold ingots of INR 611 crores. What is your expectation from the remaining part of the year? Why the sale of gold ingots increased so abnormally during the year -- during the first quarter? Sir, as per Schedule 19, Page 184, it appears that company's dependence on traded goods in respect of watches, jewelry, eyewear are increasing. Would you please share the rationale in this regard, whether profit margin is more -- please share the rationale in this regard. Whether we are depending on traded goods, keeping our installed capacity idle, please share your thoughts in this regard. Sir, one of the reason for increase in watch division, profit was due to receipt of largest corporate order of 4.15 lakh watches from TCS during financial year '20. Would you please share with us the total value of the order and profit booked on it? During financial year '20, watch market in UAE declined by 11%. How the Middle East market, including UAE, is doing in the current year? In Q1, financial year '21, watch segment booked a loss of INR 164 crores, excluding [indiscernible] so only INR 75 crores. And what about [indiscernible] of the year. Sir, [indiscernible] 83% [indiscernible] gold prices resulted in a higher inventory. How the company is coping with this problem? In Q1, financial year '21, [indiscernible] booked a loss of INR 54 crores, excluding interest and [indiscernible] on a stand-alone basis against INR 1,783 crores. What is the expectation from the remaining part of the year? And when do you expect [indiscernible] Dubai? Sir, though increase in turnover took place in [indiscernible] eyewear and others, which includes accessories [indiscernible] like last year, when do we expect it will break even and contribute [indiscernible] company has a closing balance of [ INR 4,000 crores ] [indiscernible] what is in this regard, sir, whether it is [indiscernible] please share your thoughts. Sir, as far as subsidiaries are concerned, which are engineering [indiscernible] declared a profit and dividend [indiscernible] trading booked losses. The company had an investment of INR 57.39 crores [indiscernible] global watch company [indiscernible] Titan provided INR 45 crores during financial year '19. The company has recovered that loss INR 45 crores [indiscernible] and would you please share your thoughts on this [indiscernible] turnaround plan? Sir, Tata Sons Private Limited started consolidating its various business across the [indiscernible] around 2 years ago under a single unified [indiscernible] entity, Tata [indiscernible] Tata Motors subsidiary transferred different [indiscernible] business to Tata [indiscernible] as regards [indiscernible] is concerned of Titan, there is [indiscernible] announcement in that? Could you please share your thoughts now? And sir, another subsidiary [indiscernible] Private Limited [indiscernible] as of 31 March [indiscernible] also [indiscernible] from INR 411 crores to INR 615 crores during financial year '20. In Q1, financial year year '20, it booked a loss of INR 7 crores. Is there any possibility of each becoming 100% subsidiary in the near future? How the unit is doing? Sir, due to infrastructure leasing and financial services limited fiasco, Titan had to provide INR 145 crores against its inter-corporate deposit with IL&FS and its subsidiary during financial year '19. Considering the current scenario whether Titan will be able to recover any amount in this respect is a million-dollar question. Can you share your thoughts in this regard? And during the first quarter of financial year '21, the company has issued [indiscernible] totaling INR 1,000 crores for 3 months. Out of the total amount, INR 500 crores worth of commercial papers redeemed on 30 July and another INR 500 crores will be redeemable on 18 August 2020, whether the management may go for commercial paper during the remaining part of the year also. Sir, Titan declared a dividend of INR 4 per equity share on a share of INR 1 each, which comes to 400% against an equity base of INR 89 crores. Total amount of INR 355 crores to be payable as dividend for the year -- financial year '20, which comes to 23% of PAT on stand-alone business. The company is on a strong footing due to its huge free reserve and more than INR 7,000 crores as of 31 March 2020, consisting of retained earnings, [ year ] result and share premium against an equity base of only INR 89 crores. Mr. Bhaskar Bhat, our last CEO and currently Nonexecutive Director of Titan who retired during financial year '19, must be complemented for making the company as well as the Titan and Tanishq brands so strong. So despite booking of loss by the company in Q1 financial year '21, I am not at all a worried shareholder. I strongly believe that Mr. Venkataraman and his team will bounce back during the remaining part of the year with innovations with support from the Board and shareholders. The brand Titan will remain safe despite current negative environment. And lastly, my special thanks to our Company Secretary, Mr. Dinesh Shetty and his team consists of [ Sarika Gokul ] and others for maintaining cordial relationship with shareholders. Thank you all for patiently hearing.

We have the next question from Mr. Arjun Jain.

First of all, my name is Arjun Jain. My registration number is 1208160002198071 and I'm from -- I'm an equity shareholder from [ Nakpul ]. Good afternoon. Good afternoon, Managing Director. Good afternoon, Chairman, respected members of the Board of Directors, and the company's Secretary, Mr Dinesh Shetty and all other dignitaries on the Board of the Directors. Thank you for providing me this opportunity to -- as a speaker and I'm extremely happy with the services of the company. Also, I'm extremely happy with the services of Chorus Call for arranging this meeting and taking pains -- taking efforts for [ this ]. Now so far as the running of the company, I'm extremely happy with the Board of the Directors and the performance of them. Now I have a suggestion. And my suggestion is basically pertaining to the customer experience effective and extensive [indiscernible] after sales and service network. Now when I visit the stores at [ Nakpul, at Hore, Bombay ], they are extremely helpful. They are extremely prudent about their products. Now only thing is that I have a suggestion towards the digitization of the sale. Digitization in the sense it implies that we have watches, we have jewelry, we have eyeglasses, we have perfumes and [indiscernible]. Now my exhortation of that idea is that when I purchase gold ornaments for jewelry or if I purchase any watches, my idea is that why can't we create a wallet or you could call as a medium, where we could store the digitized bill invoice in a certain account, maybe associated with a mobile number, where we could see the entire entire history of what we have purchased, both for the Titan watches, gold ornaments, everything. It would create a clarity. It would create transparency in a sense -- because in a sense that we have -- we could have a computerized bill invoice in our wallet. And what we have purchased, the entire history would be available to us, just like a Titan wallet. In that wallet, we could also create a space for the SIP or the wallet where we could store our money, just like we have Golden Harvest Scheme, Tanishq is offering Golden Harvest Scheme. Similar to -- similar or akin to that, we could create a wallet for the watches also, where they could deposit an amount. They could deposit small amount and -- for us for a certain period of time. And after this amount gets certified, they could purchase this amount just like an SIP, where a person is saving for that gold. And at a later stage, he could have the money in his hands and we have the exact amount [indiscernible] Another thing, there would be influx of money to the wallet and the customer is able to purchase by spending this quantum in a limited monthly scenario. In that sense, we could create and build trust. We could create a trust and reliance to the products, reliance to the products of the company. Now the theme of this report is resolute, resurgent. Resolute, resurgent means there is innovation to something. Similarly, what I am suggesting is the resurgence by creating a wallet so that by all these means, we could have a global customer care and a transparent sales network. Now the only thing -- the theme is resolute, resurgent. And I would like to suggest a reliance so that we want to create a trust. We want to create an absolutely credence to this -- to the name of Titan. So what I am suggesting is that -- and my suggestion is an exhortation in a way if the members of the Board of Directors, please do -- take a look at my views. It would help create a better understanding, better compliance, excellent customer sales network and greater transparency, which would enable both the customers and the company. Thanks for the -- for granting me this opportunity. And I would like for future endeavors that all the meetings which are being conducted through a [ PC OEM ], I would like that a small window would be also open for, in the near future, for the AGMs also. Thank you.

We have the next question from Mr. [ Vijnan ] Srimal.

Mr. Chairman of the meeting, members of the Board, I am C.A.B.S. Srimal from Kolkata. I am extremely grateful [indiscernible] for giving me this opportunity to interact in the proceeding of this AGM [indiscernible] my views and suggestions. I'm sure Mr. Chairman will take it in proper perspective and would respond to our queries fully so that we will be informed. I'm also thankful to fellow investors who have taken their time out to actively participate and make this meeting. Sir, the COVID-19 has thrown up this opportunity to organize AGM by virtual mode, and it has definitely opened up equally great opportunity to participate and join the meeting at the AGM by the investors all over India. While in this subject, sir, could you tell me -- tell us, sir, the expenses of conducting the meeting [Technical Difficulty]

Sorry to interrupt. While we are checking for Mr. Srimal, sir, we are not able to hear you clearly. We take the next question. The next question is from audio. We have the next question from Mr. [ Abhishek Jai ].

My name is [ Abhishek ], shareholder of the company. My VP ID IN301637, client ID is 41359155, and I'm from Chennai. I would like to congratulate the management on the eve of 36th annual general body meeting. We thank the management for giving a good dividend year-on-year. And even during this pandemic situation, the management has not stepped back and maintained the same dividend year-on-year. Sir, then I have some few observations and clarification in the balance sheet, like in page number 269, we can see bad debt of around INR 1,20,00,000 we have incurred. So why -- what is the [indiscernible] why we were not in a position to recover the bad debt? And we can see provision for bad debt is also being made for INR 2,82,00,000. So why we were not in a position to recover this bad debt. And this provision which you have made, unfortunately, we are going to write off this also in the subsequent year. So take certain necessary steps to recover the money instead of written off. Sir, then we can see a good amount of CSR being spent, INR 31 crores is being spent. We thank the management, and we are glad to be the shareholder of the company, and we see that the company is doing a lot of CSR and hope that the management will be contributing a major portion of our CSR this year towards COVID 2019. And since Tamil Nadu, Maharashtra and Delhi are the most affected states due to the pandemic situation, so you may navigate your CSR towards these states. And sir, we are -- had a complaint. We are facing a lot of issues with the [indiscernible] having obtained the [indiscernible] from the High Court of Madras in the year 2015. I'm not able to get my shares transferred from [indiscernible]. They are involving unwanted restrictions for silly reasons. They showed that the intention is other way. Finally, after complying with all the requirements, whatever documents they require after providing them, they have successfully transformed my shares to [ IEBF ]. I don't know what benefit accrued to them by transferring to [ IEBF ]. Their intentions are totally wrong. Being a Tamil-Nadu-based company, I would suggest you to appoint a local registrar either in Chennai or in Bangalore. I have traveled to Mumbai twice to hand over the documents, original share certificates in order to avoid any misplacement to the RTA to [indiscernible] in order to avoid any issues. But unfortunately, after handling over all these documents and taking so much of pain and hardship, they have successfully transferred the shares to [ IEBF ] It does not mean that if you appointed an RTA and your work is over. It requires to be monitored and we should have a regular audit and inspection to the RTA in order to keep an eye on them. Some efforts have to be taken from the management. Sir, I wouldn't have brought this issue to the Annual General Board meeting if the company secretary would have responded. The company secretary has also not bothered to respond me in the past 2 years. I have written the company secretary a letter and I have written some e-mails also and yesterday also. And so many times, I've tried to contact the company secretary. The person who answers the landline calls, they say we will transfer it to company secretary. Finally, the call gets disconnected. So until now, the company secretary has not contacted me. I have written -- the day before yesterday also, I have sent my questions. Some of my queries also are sent through e-mail. I don't want to repeat the same in this -- today's annual general body meeting. So company secretary should have some dedication towards the shareholder. He should be in a position to respond and resolve the queries. And I would like to know what is the Stakeholder Relationship Committee doing, who is the authorized person for the Stakeholder Relationship Committee. Kindly provide the designated person's contact number so that we can get our shares resolved. Because if [indiscernible] not doing, we can approach the CSR of Titan. So if Titan is not in a position to respond, whom should we approach? Kindly let us know, sir. And why company secretary is not answering our calls. And what is the reason he is neither bothered to give a reply to our e-mail. Please ensure the Stakeholder Relationship Committee should function in such a way that we should set as an example to other companies having a Tata Group of company, we should not see such kind of discrepancies to the shareholders. And I would like to know that certain queries that how many branches we have for Tanishq and Titan in Chennai and how many branches in Bangalore. I would like to know. Sir, I would like to also like to have a franchisee of Tanishq. So what will be our investment, all these details, you can kindly book me to the right person so that we can get the details from them. And some details about we would like to know from the company, sir, from the Chairman that -- what is the real impact of COVID 2019 in percentage terms, how your supply chain is affected, where do you see the light at the end of the tunnel, what will be the growth [indiscernible] in first half and second half? Sir, and what are the cost-cutting initiatives we have taken? And what is the view of the management in going forward. Sustainability of the profit earnings growth will remain challenged in the coming quarters. Sir, then we may kindly arrange a con call in order to include the company image and quarterly presentations and meeting global investor so that our representation in the market will be increased. And what are the credentials that the new and existing directors are bringing on the table to take the company to the next phase of growth or to guide the new generation? Is the appointment being done after taking all the new amendments on and the Clause 49, the -- and the -- sir, I hope that my issues pertaining to physical shares that is only pertaining to 80 shares. I've spent more than -- to start, was not more than INR 80,000. I had spent INR 30,000 for correspondence moving from Chennai to Mumbai and Mumbai to Chennai. So please ensure such discrepancy should not happen to the shareholders. And my case should be raised for our 37th annual general body meeting. And I should be in a position to honor our Chairman, come to the meeting and honor our Chairman in physical presence. And I wish the company and the Board of Directors a great success and prosperity in the coming quarters. Thank you for giving the opportunity, sir.

We have the next audio question from [ Behrooz Wezohi ].

Sir, we are very grateful to the Dinesh Shetty and his assistant [ Sarika Gokul ], who...

Operator, we can't hear. [Technical Difficulty]

We are very thankful to the company secretary, Mr. Dinesh Shetty and his assistant, [ Sarika Gokul ], who was previously in Tata Power. So we are very grateful that they have rung us up and they have tried to connect us with the Chorus people, and they have taken the testing and everything. And now all this fault is coming. And the Chairman has told in the beginning that the speaker should speak for only 3 minutes. And some people were speaking for 10 minutes and 15 minutes. So what is the fun actually. They are reading all the thesis, 20, 30 pages of the thesis, they are reading. So I don't understand why these persons are reading so much. In the Annual General Meeting, only the dividend portion and the profit and loss account should be the -- they were speaking all about this. And we are very unhappy to note that 3 of our employees have succumbed to the COVID, this -- and 75 people are still undergoing treatment for the COVID. So I hope to see that all the people to be treated very nicely, and they should recover. They should be taken care of by the company because they are their employees and they are dedicated employees. So we should take care of the health and amenities. Sir, your company is exceedingly doing well and we were allotted the shares in the IPO, then the share was split into 1:1 rupee and subsequently bonus was given. Sir, we would like to know whether [indiscernible] has been allotted as of -- because in many of the companies, the Managing Director gets [indiscernible] at a subsidized rate. And he could have really -- he has taken our company to such a great height. And Rakesh Jhunjhunwala today also came on the TV and he spoke very good about Titan. So Titan is a very good company, and Tanishq and Titan are branded products. And I don't want to speak more. I support all your resolutions. And so I'm handing over the -- this phone to [ Uma Purodi ].

Can you hear me?

Ma'am, we can hear you. You may go ahead.

As I said before, we are very sorry to hear about COVID causalities. Sir, number two, regarding our CSR activities, just wanted to draw your attention. Please give these protection kits to the hospitals. Even the [indiscernible] hospitals, they don't have protection kits. The ward boys, they themselves have complained to me that they are not being given protection kits. Sir, and one thing I want know, do you have a research department where you discover new designs? Because we haven't seen any of such things. We would like to know, whether your people have designers, they do research, they try new design. Sir, we have no idea. Sir, and do we export? Have exports resumed? Have you got the export orders? Sir, our shops were closed for 3 months or more. So what was the loss incurred because of this pandemic, because of the closure of our shops? Sir, because it didn't come under essential services. Sir, I am in Bombay. Things have still to resume normal because the train -- local train services are not resumed. Sir, I want to know so people cannot commute. So what about other cities? Is the normalcy there? Are our stores open? Can people freely communicate and come to our stores? Sir, how is the business now? Sir, what about the manufacturing activity? Have they started now? Sir, we are, of course, very proud of our Titan company and all the management, sir, very proud of Mr. Noel and our Chairman and everybody, sir. We wish -- we are supporting all your resolutions and we wish our company all the best. Thank you very much, sir.

We have the next question from Mr. Srimal.

Mr. Chairman of the meeting, I am C.A.B.S. Srimal from Kolkata. Sir, I am extremely grateful to you for giving me this opportunity to interact in the proceeding of the AGM and share my -- our views. I'm sure Mr. Chairman will take it in proper perspective and respond fully to our queries. I am also grateful to my fellow investor who have taken their time out to be -- actively participate and share our views and suggestion. Sir, COVID-19 has thrown up a great opportunity to organize AGM by a virtual mode, and it has definitely opened up equally great opportunity to participate and join the meeting at the AGM by the investor all over India. While in this subject, could you tell us, sir, the expenses of conducting the meeting on virtual mode vis-à-vis physical mode? I would request -- also request you to, sir, continue the AGM by virtual mode as done today subject to approval of SEBI, which would be definitely a cost advantage. Sir, could you enlighten us as to the number of shareholders attending at this virtual meeting vis-à-vis a physical meet. For physical meet, you are requested to have a factory visit organized. Before I go ahead and share my views of accounts, I'd like to pledge a few of my important suggestion for your kind consideration and implementation, please. You would perhaps appreciate that the annual report, which consists of 300-odd pages, is very difficult to go through at this time when AGMs are lined up every day practically. So I would like to suggest that -- so if I feel that the contents where pages are marked, they'll have the capability to open the necessary page when clicked at that particular page to get the desired pages. And for that effort should be made. I must appreciate and congratulate the company secretary and his team for presenting a wonderfully prepared balance sheet. A short resume of the Board of Directors is welcome. It should also contain the age of the Director. The figure of the balance sheet and profit and loss should be in crores in parity with the figures as published in other places in the annual return. My attention also drawn towards the Director, who is about 12 and appears to be too big as well. As the accounts are now discussing, it hardly has any significance in the view of the fact that it is a postmortem. Already, majority votes are being casted. Hence, this remains just a formality whereas the first quarter results, which you have published 2 days back, is an account which we should discuss. And there, I find that you have incurred a loss of INR 276 crores. Sir, could you give us a -- your how to recover the profitability of the company. Sir, what is the total capacity utilization by the company to debt and whether it has reached the pre-COVID-19 level now and when -- many of your -- how many of your manufacturing facilities are reopened and functioning throughout India and its turnover for the period? Please also let us know as to how many of your own outlets as well as the one given on franchisee basis are working. My attention is drawn to the fact that the company has incurred a loss of 753 -- INR 260 crores in the first quarter. Hence, that give us the map -- road map to contain this to the profitability. I would also like to have -- having said so, I would like to take the dividend payout, which is INR 4 per share and which comes to 23% against 35% last year. When investors are facing huge cash crunch, the pandemic and for many small investors live on dividend earnings, should you not have declared a higher dividend, sir? I would seriously request you to consider for an interim dividend. As the companies like [indiscernible] and other FMCG companies are declaring 91% of their PAT as their profit. Sir, what is your total CapEx for the current financial year? You have incurred a capital expenditure to the tune of INR 1,197 crores. Could you share with us as to how this capital expenditure has benefited the company by way of increase in revenue and profitability. As the current year would be going to be very tough, could you spell out, sir, the cost control measure and resale by the company? What are the new addition to your portfolio, sir? I would like to ask what is your e-commerce versus retail sales turnover, then donation to PMS and direct help to pandemic to date, total number of members present at this meeting? Sir, when do you feel the target of 100% of your renewable energy will be used for your production purposes? Sir, could you share your cost of renewable energy vis-à-vis second, the normal one, impact of huge surge in the gold price and its impact to the company's business, the last bonus declared in the year 2011. Hence, the bonus is also due. Should you kindly consider? The payments made to Tamil Nadu Development Corporation and Tata Sons may kindly be explained. Sir, as the finance cost of the company jumped from INR 44 crores to INR 147 crores, the action and resales to bring down, especially during the current year, financial year, in view of the pandemic outbreak. The consolidated profit saw the downward trend of profitability by INR 2 crores. This is due to the subsidiary companies. Could you give us a road map how to improve the working of the subsidiary companies? Sir, in this segment result appearing in Page 102 shows that the [indiscernible] and others, please give the details of your composition of others have incurred a loss of INR 1,433 crores and INR 5,841 crores, respectively. What is your road map for their revival and making it at least a breakeven? With this, I would like to conclude, sir. And I thank you very much for giving me this opportunity. I thank all of your staff members who has cooperated with me to be able to speak to you. Thank you very much.

Sir, we do not have any other further questions. So I will now hand it over to the Chairman. Sir, you may go ahead.

May I now request Venkat to answer the questions, please.

[indiscernible] to be speaking to you today in Bangalore. This is my first AGM as Managing Director of Titan Company. And I'm really looking forward to play the role [indiscernible] manner in which Mr. Bhaskar Bhat did it over the last so many years and created exceptional value for the company. Let me start with the questions that Ms. [ Patel ] raised, and some of them are with us earlier as well. We have -- our registered patents, 3 for jewelry and 2 for watches. And 47 are pending, 15 for jewelry, 30 for watches and 2 for eyewear. Your question on, can the [indiscernible] would change? I presume you're meaning [ side ] change chain, particularly. The 2 brands are very, very different in the sense of their brand value proposition. To some extent, the customer we target the business [indiscernible] and all that. And these would come in the way of any possible collaboration or a nature that you're suggesting. And [indiscernible] what I mean is the distinct [indiscernible] just on from that side [indiscernible] and so on, as it is in Titan listing from the watch business and the jewelry business and so on. So there is no thinking to do what you're suggesting. But thanks for the idea nevertheless. [indiscernible] outlets are in Mumbai. There are 2, Vashi and [indiscernible]. We spent INR 24 crores on R&D last year, INR 20 crores in watches and INR 4 crores in jewelry. What is the cash balance now as compared to the previous year? It was -- in March 2020, we're aware that the second half of March was a washout because of the lockdown. And therefore, [ the effort ] for that period did not happen, and we ended up accumulating inventory because that's' -- and it did not have [indiscernible] reason. The second was we have 2 significant sources of financing. Gold, one is the gold on loan and the second is the spot purchase and exchange that customers do. The share of exchange grew substantially in FY '20 and towards the end of the year as well because of which the credit that we get through the gold on loan scheme, it most -- and therefore, our cash position was accordingly suppressed. Number of road shows that were conducted in '19/'20. There were no road shows conducted in FY '20 and not in Mumbai as well. Now, suggested that we should take aggressive growth for jewelry business, we are doing that. In fact, we want to reach level 3 in quarter 4 of FY '21 in the [ jewelry ] business particularly, in fact, greater than FY '21 on FY '20 base. And as I said, that [indiscernible] the demand will come back. We believe so. Gold is a safe-haven product. In the current circumstances, more and more people are flocking to gold, gold jewelry, to a lesser extent even than in jewelry, and I'm sure October/November will be a great time for your company. Fragrances are intrinsically more profitable than deodorants. Oximeter and wearables is a very good idea. Although watches and wearables division is working on multiple ways to provide more solutions to customers in this new world that we're in. As the gold price is going up, what impact will there be on sales? Will there be lower footfalls? Footfalls at the moment are lower than last year, but that's because the world that we live in is a very, very different place compared to last year. But even within the constraints of these new circumstances, the footfalls to the jewelry business are very good because weddings are happening. The store of value point is kicking in. People are perhaps cutting down on the other kinds of celebrations for wedding but using that money to buy more jewelry for the daughter and so on. Are there chances of a promoter increasing the stake? I would leave that to the promoters to answer. Let me now go to Mr. [ Hari Rao ]. As always, thank you very much for pushing us to greater heights when you were here with us. And when you're watching from the sidelines, Mr. [ Hari Rao ], thank you. Favre Leuba, the luxury watch business, as you are aware, is a long-haul business. We do have a dream for Favre Leuba. We do believe that given the strength of Titan company in terms of its profits, in terms of its balance sheet, the kind of investment we are making in a brand like Favre Leuba are worth doing. It is a small effort from a large, deep pockets that we have. And we believe that it will teach us also a lot of things for the domestic market. And that's the reason why we continue to invest in Favre Leuba. You're very right that the R&D expenditure for Titan is low for a company of this size and a company of this level of innovation. We are stepping up on it. This year, particularly, we have reorganized some of the people here, and we are giving you the trust, particularly in the eyewear, watches and jewelry businesses. And hopefully, we'll see some results at the end of the year. Manufacturing in India should be accelerated. Yes, very much, given the potential global uncertainties that we are starting to see, it is certainly a focus for the company, particularly in the watch business and the eyewear business. You spoke about the MD's report. And while the approach and the attitude of Board, there has to be a certain realism in assessing the constraints within which we are operating. Of course, without any doubt, sir, it is just that there are 2 independent things that we need to work simultaneously in our minds. One is the desire to excel, the desire to exceed, do much better than other companies in the situation. So that is the boldness, if you will. The other is be practical about it, be tough about choices, be very, very critical about extracting value from operations in multiple ways while innovating, while experimenting substantially. And in products, in marketing, for example, we have done a lot of work. We have done a lot of leapfrogging. We're calling it the digital leap in terms of the omnichannel, analytics, CRM and all that. And we expect to be in a much, much -- in a better place, far ahead of others by the time the FY '21 happens. And Mr. [ Gattani ], the market cap has fallen, yes. Certainly, the company had a very, very ambitious growth plan leading up to FY '23. There was a little bit of a slacking on that in FY '20 on account of the last 2 weeks of March. And of course, FY '21 is turning out to be a very, very different year compared to any year that we've been part of. So naturally, the FY '23 dream that we had has had some kind of a setback. And I guess, the market cap recognizes that setback. Of course, it would be in our interest to take it up. But before doing that, we need to become strong. We need to sort of dig deeper into the foundations that we have made and make FY '21 a very good year from which we can leap into '22 and '23. The point about Ananya Panday, I wouldn't get into this. This is a decision that the marketing teams take on the basis of all these celebrities and their connections with the target customers that the brand is taking, target customers that the brand is going after. And therefore, if Ananya Panday is the most appropriate brand ambassador, and I'm sure the brand teams have considered all before choosing. On the contingent liability point, I'll leave -- maybe Subbu can answer that later. Maybe there are a few other things that Subbu could do. And Mr. [ Rajendra Joshi ], your first question was about, are we getting into any new verticals in FY '21? And no, this is -- more than any other year, this is a time for consolidation. We have 3 businesses, which are -- which have been there for a long time, in which we have developed exceptional category expertise. We have assets on the ground, which are very, very strong. And there are 2 new businesses, ethnic Indian wear on the one hand, accessories and fragrances on the other. The first one, very new; the second one, relatively new. And we still need to nurture them. We still need to help them explode to the potential that they have. And therefore, we will be focusing on those first in FY '21 and FY '22 before we think of any other vertical. Given the opportunity in the international markets in watches and in jewelry, the opportunities are high, and even that is something that we would invest in before we go anywhere else. Their prices, are they affecting sales is a question that came from 2, 3 people. Of course, they do. But what also happens is that once the gold prices settle, they remain in the ballpark for a while, and the customers are -- they come in. And obviously, the grams that they were originally willing to buy reduces, because the price program has gone up, but their budgets normally do not change that much. Especially if their view on the immediate future on gold price is strong, then they come in and buy. And the other big advantage is that Tanishq is a very, very unique brand in the jewelry market. There is a lot of consolidation, which is already happening post-demonetization. And now with more and more thinking -- people thinking about brands of trust and integrity and responsibility, we are already starting to see a share gain happening in the jewelry category from other jewelers. So I'm sure the gold rate will not necessarily have a large bearing on our business in the next 9 months. The store expansion plan, I don't recollect the exact number for the year for the company. We have certainly calibrated it down in FY '21 after COVID happened because of the demand situation on the one hand, because of the risk appetite, perceptions of potential franchisees on the other. But it will still be a very, very attractive aggressive expansion plan, because we have more than 550 districts in this country, and every district should have multiple stores of each of our brands or at least all the brands put together. And we are a distance from that goal, and we will keep expanding. And I'm sure we will accelerate our expansion in FY '22. FY '21 outlook, which is essentially the 9 months outlook, I think 2, 3 of you asked, we are now resolute, we are going to research. It's a very good situation that the Titan Company is in, because the portfolio of the company is reasonably wide. There is a good mix of lifestyle, full lifestyle, product categories, part lifestyle, part necessity, part store of value, part asset class categories within the company. And therefore, there are multiple reasons at work, which are building demand. So we are committed to reaching and trying to exceed the FY '20 sales and operations level of quarter 4 -- in the quarter 4 of FY '21. All the employees of Titan, who are the biggest asset for the company, are totally seized with this purpose. They're working day and night, wherever they are, at home or in the stores. We are delivering the exceptional safety standards in every store that we are selling through. And it's been a big talk of the tongue from our customers who had a decent expectation of what Titan would do, but were blown by what we were actually doing on the ground when it comes to safety. So our FY '21 outlook is very positive, and I'm sure we will deliver to that. What is the network open status on 30th of June? I think it was about 1,500 stores altogether in that ballpark, if I recollect, in the early 80s as a percentage of total network, even though in the month of July, some of those got closed on some of the days. So the store days in July was actually lower than the store days in June. But with Mumbai and NCR-Delhi opening up, we are seeing a better traction from August and towards the rest of the year. Why more traded goods was a question. Finally, we realized, we recognized that the vendor partner system that Titan Company has in all the businesses, the vendor partners are a very, very innovative lot, they're very, very close to customers. And therefore, their creations give our creations a certain fighting competition. And from a customer excitement point of view, it is very important that Titan Company collaborates effectively with its vendors to offer a line of products and solutions, which are a clear mark ahead of competition. And therefore, the role of traded goods should be seen in the largest strategic context of the innovation quotient in products that Titan Company is seeking to establish and not just in the cost that it is shown as in the balance sheet. And TCS sales and profit in FY '20, I wouldn't get into sharing such details. It was a very, very attractive institutional order that happened in last year. And in fact, it continued to some extent into quarter 1 of FY '21. Impact of gold price on inventory. This is a very, very complicated subject. Maybe Subbu can add this to the earlier question that I requested him to answer. Then Mr. [ Arjun Jain ], the digitization and the digital wallet is a very, very powerful idea, Mr. [ Jain ], your exhortation, we were actively listening to it. And from the company's side, we have done -- we have implemented one of the world's finest CRM solutions from the company's sales force, and it's currently in -- at play in most of the Titan Company stores. And through that, we are getting a 360-degree view of every single Encircle customer, every single number. And therefore, we are connecting multiple dots of transactions across the customer's journey with Eyewear, with Watches, with Helios, with Zoya, with Tanishq and so on and developing a full-blown understanding of customers for proper servicing of that customer's requirements. So the other side of that is perhaps the wallet, and we will take this idea and see what parts of it make sense for the customers and for the company and take it forward in the right manner. The idea of Golden Harvest equivalent for watches is also a nice idea in these times of cash flow pressures for families perhaps. And I'm sure the watch division will consider that as well. On a COVID virus front itself, I must assure all the shareholders that this subject has been the top most priority for the top team of Titan, in any case, starting early April. We have done a lot of preparatory work in terms of how we will approach post-lockdown situation and the SOPs and the protocols were developed for offices, manufacturing centers, for vendor establishments and certainly for all our stores. And starting early May, those protocols have been implemented with total obsession for it. And therefore, I'm sure we have benefited from that approach. We've benefited from that attitude towards safety. But the challenge is that COVID is now at a very, very high level of spreading. And therefore, it would be, I would say, impossible to stop it. We can only try and prevent it, reduce it to the extent. And the 75 people that you spoke of, of course, the company is very much in touch with all of them and making sure that they recover fastest. It was a tragedy that we lost 3 of our colleagues, but this disease is attacking in ways that the most expert doctors are finding difficult to deal with. And we only hope that there is no more in the company. Protection kits to hospitals from the CSR funds, we have done substantial work from the CSR funds for COVID relief support by diverting some of the funds that we had earmarked for other things in FY '21 into this. And every day, we are talking to some NGO or some government somewhere or the other in the country and trying to help in making whatever they are doing relatively easier for them. We do, do a lot of research before designing our products from trend research to concept research. And thereafter, when we execute those concepts into actual products, we involve our customers, get feedback on the products before launching them. And that's why Titan Company's capability in this area is a gold standard and our success rate is enviable. On the COVID operation recovery status, like I said, about 80-odd percent of our stores are open, but the sales levels are still lower than the FY '20 levels of the same month. So far, July has been the best, with jewelry performing the best because of some of the reasons that we shared, where manufacturing units are all open, but they're operating at a certain level of capacity because of the demand needs of each business being different. All our offices are open across the country, but we are working in alternative weeks in some places, in reduced share of employees in some places, with safety being the most important criteria. There are a couple of questions on the new businesses or some of the old businesses, when will they start making money. And there were also questions on the subsidiaries. We are very, very committed to turn the either business profitable without fail in FY '22. The Indian ethnic wear business has been configured with all the key performance indicators on the gross margin, sales per square foot, inventory turn. And the team is seized with making all these KPIs reach their targets by the end of FY '21 so that the FY '24 plan that we have, where it will become a large, exciting, profitable business for the company, which is not just letting the Titan flag of innovation, customer value proposition fly high, but also the profitability that is normally associated with Titan stand-alone is delivered by that division and that unit as well. Coming to subsidiaries. The engineering business is already a very, very profitable company. In fact, last year, it was the most profitable part of Titan consolidated in any case, but there is no issue there. CaratLane, again, is a very powerful idea. It's a very powerful organization, which has done substantial work in growth as well as margin expansion over time. It's just a matter of time, and I'm sure in FY '22, again, we will get CaratLane into profitability. And thereafter, the leverage will come year after year after year. Tata McGraw is a different matter. The global luxury market is an intensely competitive market. And like I answered Mr. [ Hari Rao ] earlier, INR 40 crores, INR 50 crore of investment in a beautiful idea like that for a few years is certainly something that Titan Company, with its level of profits and balance sheet -- size of balance sheet and our appetite for risk, can push the envelope and who knows, we may create a gem in the international luxury watch market, with a lot of benefits coming in terms of learning for the Indian operation as well. Then Mr. [ Abhishek ] spoke about the CSR focus shifting to COVID. Yes, Mr. [ Abhishek ], I did speak about the diversion of some of the monies of CSR in FY '21 into COVID. On the question on your shares, you spoke about the lack of response from our side. We will make sure, whatever the reasons, earlier on that, we will make sure that, that does not happen. And the comment here on that particular question is, on the basis of the letter sent by the registrar and transfer agents, you are advised to approach the IEPF authorities as the shares have been transferred to them. In case you require any support, you may reach out to the secretary department of the company or to our RTA. There are many other questions you've asked Mr. [ Abhishek ], and in the interest of time, I will choose what I believe are critical from the company's point of view and perhaps from your point of view as well. What is the real impact of COVID-19? Sales has dropped 74% compared to Q1 last year. And we are in a loss situation. Though we have significant disruption of sales and supply chain, we are able to get into cash positive. That said, it's a comment that you have made. I think the divisions -- the people have worked really hard on conserving cash by reducing inventory, selling -- melting and selling gold and the treasury department has been exceptional in getting CP at very low rates. And that's -- these are the 3 reasons for our cash positive position by end of Q1, and we really are keeping our foot on the pedal in terms of accelerating the rate of recovery. Everyone, we've got 15,000-plus salespeople in the stores and we have millions of Encircle Titan Company loyal customers with whom these 15,000 people have direct personal relationships. It must be, without exception, the best in the country on a relationship of millions of customers with not just brands, but with specific stores and the staff of those specific stores. The outreach potential of this is incalculable, and the benefits of all that are already coming our way and will continue to come from quarter 2 and quarter 3. Please provide the details of noncurrent liabilities. I will request Subbu to answer that. Top 300 shareholders list, we will send it across to you. And if you could, we have Mr. [ Abhishek's ] contact here? Yes. So you have expressed your interest in becoming a franchisee, and we'll connect you with the right people to evaluate your candidature. Where do you see light in the end of the tunnel? What will be the growth figures in the first and second half? Very, very powerful question that we are in a company which sells products of lifestyle partly, products of need, products of asset and store of value. So it's a very, very interesting combination. And therefore, when almost everyone in the country is continuing to sit at home and is going to continue to sit at home for a while, as it looks like, the challenge is actually creating desire, need, demand for products. So for example, using the Titan watch as a symbol of your appreciation of your spouse is, even when both of you are sitting at home or the whole family is sitting at home, is a commercial video film that the watch division has executed recently where a husband gifts a watch -- Titan watch to his wife for all the hard work that she has put in, in the last few months. So the gifting opportunity is a very, very large opportunity. All of our products are very, very aligned to that idea. They are emotional products, which are suffused with a lot of value of that nature. So all the divisions are working to deliver that. The second best thing is like there is whole new concept called above the keyboard dressing. 95% of this country is working from home, but they are all sitting in front of their laptops or phones and connecting with their colleagues. Now can we encourage people to dress up for the work from home as much as they dress up for the office? It's not impossible to conceive. In fact, some of the apparel companies that I'm in touch with are telling me that their biggest growth category that they're seeing is premium casuals. All of us, certainly men who are wearing T-shirts and doing hangouts, are starting to realize that we need a much better collection of T-shirts to be presentable on the call. And I'm sure that is paying off for apparel companies in terms of growth in high-end T-shirts and maybe even high-end shorts. So therefore, above the keyboard dressing is something that Titan Company is working on to create products, which sort of target this potential. The other is the entire omnichannel initiative of multiple kinds, which take into account the fear, the anxiety, the hesitation that people have in stepping out of home, how can we either go to their home ourselves or how can we fix an appointment so that they come in and get out fast and still finish the work that they wanted to do, because we enable them to see some of the products in their homes on the website and then collapse the choice that they make into the store and reduce the time and so on. So a lot of innovation, a lot of experimentation quickly help us and then scale up things that work is the mantra. A huge focus on cost reduction is a mantra. We have a program going on called go around waste, which is going to extract a lot of cost for FY '21 on the one hand. And a good part of that is a sustainable saving for FY '22 onwards so that the company gets into a stronger place. And maybe one more question, Mr. [ Abhishek ] from your side. After the COVID, what are the new innovations and new product launches did after April 1 and what is the response so are? Like I said, we believe in a lot of understanding of customers before we do anything. And therefore, listening to the customer, conducting customer conversations through virtually have helped us in realizing many opportunities for quarter 1 and beyond, including, on the one hand, weights of gold jewelry; on the other hand, special services in the smart watches that we are looking at and so on and so forth. Spectacles at sub-thousand prices and so on, and I'm sure we will be launching many exciting products, which are -- some of which are generic in nature and some of which take into account the situation around us. I think I have more or less done. If any -- well my apologies. I answered some questions of Mr. [ Amar Kumar ] without calling out his name, my apologies. I was reading sometimes without my specs, so maybe I missed, I'm sorry. In the annual report, the company has saved INR 35 lakh in resorting to the virtual digital version for FY '19-'20. The virtual AGM is costing us between INR 6 lakhs to 7 INR lakhs, and physical is about INR 50 lakhs. So obviously, it's a much cheaper one and a much more convenient one. And the point about, can we make it the normal is sort of well taken. So Subbu [indiscernible].

A few questions, which are the answer. One is on contingent liability. I think the question was, why is it at a high level? Let me just elaborate. Most of these are cases to do with taxation, sales tax, excise duty, income tax. Actually, as far as excise duty is concerned, we've reduced it. Most of these are in the case are basically distinct set, we are at different levels of adjudication, which sits and either the DRP, the High Court, ITAT, whatever. So in the case of excise duty, there was actually a reduction, whereas in the case of income tax, there was a fresh case, which we've added to the list now, which is a -- I mean, assessment year '16-'17 issue on tax pertaining to the hilly areas concession. We are very confident that these should be in our favor, which is the reason why we are still in continued liability and not provided for. Because in all these cases, our legal advisers, the lawyers are giving us a view that we have a very strong case. So that's the part on continued liability. On gold prices, yes, they do impact our inventory value. But just to give you an idea, we entirely hedge our gold inventory. And therefore, when prices go up or go down, we don't actually lose anything. So that is the saving grace here. We may have even make money in a burden like this, but it's a call that they've taken from the beginning that we will not speculate on gold. And I believe that's the right stance for a company of our size and stature. So gold prices, do -- they impact the level of the inventory, the value, but it does not impact our P&L in a way. The other question is on noncurrent liabilities. Essentially, these are -- if you know, there was a change in the accounting standard. We had Ind AS 116, which had to do with lease accounting, which was -- which had come into posting in the current financial year of FY '20 financial year. And that required us to take all our leases and then use what used to call finance leases methodology in the past. And also, you had an asset which was created and an equivalent liability also -- lease lability, which is the liability which is to be incurred over the life of these leases. And they have to be brought down to present value. So that is the main reason why the liability has gone up substantially. The other provisions are relating to employee leave and pension, et cetera. So with that, I hand it back to Venkat.

Thank you very much once again. And Mr. [ Majumdar -- Kamal Kumar Majumdar ], once again, my apologies. If there is any particularly important question that I have not answered, if you could just reach out to the company separately through e-mail, I will make sure that I will send you a written reply on that. I'll now hand over to Chairman to continue with the proceedings.

Thank you, Venkat and Subbu. I now authorize Mr. Dinesh Shetty, General Counsel and Company Secretary, to conduct the voting procedure and conclude the meeting. The e-voting facility will remain open for the next 15 minutes to enable members to cast their vote. The results would be announced in 48 hours of the conclusion of the meeting and the same would be intimated to the stock exchanges and uploaded on the website of the company and NSDL. Accordingly, I authorize Mr. Dinesh Shetty to announce the results on my behalf. I thank the shareholders for attending the meeting and for their continued support for showing a keen interest in the company by seeking clarifications on various matters. I also thank the directors for joining the meeting remotely. With your consent, the other Board members and I would like to leave the meeting. I request all shareholders to stay safe and to stay healthy. Thank you very much. [Voting]

The e-voting has been kept open for 15 minutes, as mentioned by the Chairman. We now close the e-voting. I would like to say that the quorum was present throughout the meeting. Results of the Annual General Meeting will be announced by the company on or before August 13, 2020. With this, I declare the meeting concluded. Thank you.