Wonderla Holidays Limited (WONDERLA) Earnings Call Transcript & Summary

So ladies and gentlemen, respected shareholders and colleagues on the Board, welcome all of you for the 18th Annual General Meeting of the company through videoconference. Today for the 18th AGM, we have with us Mr. Kochouseph Chittilappilly, Director; Mr. George Joseph, Joint Managing Director; Mr. Arun Chittilappilly, Director. Arun Chittilappilly has come?

Yes, yes.

Okay. Yes. Then, Priya Sarah Joseph Cheeran (sic) [ Priya Sarah Cheeran Joseph. And we have Anjali Nair and Mr. Lakshminarayanan -- R. Lakshminarayanan, Directors. And then we have following other executives: Satheesh Seshadri, CFO.

Yes.

Srinivasulu Raju, Company Secretary.

Yes, sir.

Vipin Lodha, BSR & Associates, Secretary Auditors.

Yes. Hi, everyone.

Okay. Somy Jacob, Scrutinizer for the e-voting.

Hi. Good evening, everybody.

Good evening. Good evening to all of you. So now, since the quorum is present for the meeting, we shall commence the proceedings of this 18th AGM. So before we start, I will just address the shareholders. The financial year 2019/'20 was highly challenging. Turnover of the company was INR 283 crores as against INR 292 crores in the previous year. The net profit after tax is INR 65 crores as against INR 55 crores in the previous year. The increase was mainly due to an exceptional item of INR 19 crores, arising out of reversal of the earlier provision for disputed service tax demands, which were settled under the Sabka Vishwas scheme of the government. Your company had paid interim dividend of 18% during the year, the same rate as in the year '18-'19. In fact, the first quarter of 2019 was quite positive for us and the business grew, but the economic slowdown in the second quarter put severe income constraints on the middle-class Indians whose footfall is essential for the profitability of our business. We had put in extra efforts to take advantage of the festival season in the third quarter, but the footfall was not as many as we had hoped for. And the fourth quarter, which is usually a lean season for us because of the school exams, was hurt badly from the middle of February 2020, as people began to practice social distancing following the growing threat of coronavirus infection. We closed our parks around the middle of March 2020, consequent to the directions of the state governments. We are not sure about the date when the governments will give us clearance for reopening the amusement parks. We have unfortunately lost business for most part of the -- this is about the current scenario. Unfortunately, we have lost business for the most part of the entire first quarter of 2020-'21, which means losing the largest share of the profits generated by our parks in any year. We are optimistic that post-lockdown, the public sentiments will improve to restore the footfalls. When people come to play with the -- play at any of the Wonderla parks, they will be protected by every measure possible, with special attention to their health, safety concerns arising out of this pandemic. Our major planned investment in the upcoming Chennai park, following the lockdown, the construction work of the site -- at the site was stopped. Once the lockdown is lifted, we shall resume the work. On behalf of the Board of Directors and the Wonderla team, I thank our shareholders, patrons, investors, regulators, bankers and vendors for their support and faith in us. I'm grateful for the dedicated efforts made by each member of the Wonderla Holidays Limited. The details of the company's financial performance for 2019-'20 and growth strategies will be presented by Mr. George Joseph, Joint Managing Director. And before that -- should I introduce Anjali Nair? Okay. So Mr. George Joseph will...

Thank you, Chairman, our esteemed directors. Mr. Kochouseph Chittilappilly; Mr. Arun Chittilappilly; Priya Sarah Cheeran, Mr. Lakshminarayanan and the new Director to the first AGM for her, Ms. Anjali Nair; our -- the -- Mr. Vipin Lodha, Partner, BSR & Associates; Mr. Somy Jacob, Scrutinizer for the e-voting; our esteemed shareholders; our other colleagues who have joined the AGM. The brief outline for our performance for the year has already been told by our Chairman in his opening remarks. We should all know that Wonderla has completed 20 years of its existence. The Kochi Park is -- has completed 20 years. Bengaluru Park has completed 15 years and the Hyderabad Park has completed 4 years. The year '19-'20 had varied challenges. In fact, the year, as Chairman mentioned, started very well. We had dropped a turnover of about INR 121 crores in the first quarter, excellent start for the company. But our -- the second quarter and thereafter the third quarter and the fourth quarter was severely affected on account of the closure of the park for 15 days in the month of -- Kochi Park start -- closed on March 11. Thereafter, the Bengaluru and Hyderabad Parks got closed on -- and the resort got closed on 14th and 15th respectively on account of the COVID. Even before the outbreak of COVID, there was a slowdown in the global economy, which has affected the footfall. And that is exactly why after the first quarter, we are seeing a negative growth in our footfall. However, we have introduced 7 new rides in the -- in our parks, Bengaluru, Kochi and Hyderabad in the last year, I mean, with an investment of about INR 25 crores. And so this is our strategy of keeping on adding new attractions in every location, so that we will give some novelty to the repeat visitors who are coming in. In the year 2019-'20, we saw a footfall reduction of 3%. As I mentioned, we had an excellent first quarter. But however, overall footfall reduced by 3%. While the footfall reduced only by 3%, the reduction in the walk-in was much more, more pronounced. But however, the groups went up on account of our real, I mean, hard work, driving more the BDP, the Business Development Partners and Business Development Offices of the company. As a result, the groups went up and the recession affected the general walk-in. Because of the increased share of the groups, the RPV, that is the revenue per visitor, as you are all aware, the groups, we offer more discounts and spend per visitor is lesser. As a result, the revenue per visitor dropped down as a result of the groups going up and the footfall -- I mean, direct walk-in coming down. In the year 2019-'20, we have been giving more focus on safety protocol. And with the -- I mean, the emergence of the COVID, we have taken a lot of precautionary measures, trained our employees. And we are in all prepared us for reopening the park at any time once we get the government permission. Coming to the financial performance, which our Chairman mentioned, we had a turnover of about INR 283 crores, which is against INR 292 crores propped in the previous year, reduction there also. However, the PAT, profit after tax, showed an increase of 17% from INR 55 crores last year to INR 65 crores. This, as Chairman mentioned, is on account of an exceptional item on account of the service tax provision, which we have made earlier, which have been permitted to be reversed on account of this Sabka Vikas (sic) [ Sabka Vishwas ] scheme of the Government of India, which we have availed in the last year. Even though we have been affected towards the last part of the year, we continue to be a strong company. We have a cash pile of -- we had a cash pile of about INR 120 crores at the end of March 2020. Right now, it is around INR 110 crores. And we have continued to be a 0 debt company. We have no borrowings. And we have assets, unencumbered fixed assets. So that is property and equipments valued around INR 776 crores; and total assets of, I mean, INR 981 crores in the balance sheet. So that means we continue to a strong company, even though first quarter in the history of the company -- a quarter without any income, without any activity in the parks. And so historically, we are a very profitable company. This is the first time that we are having a quarter without any activity and profit. However, we continue to be a very, very strong company among the community of the amusement parks in the country. I would also like to mention here that the recent Tripadvisor rating, our Bengaluru Park has been adjudged as the second best park in the country. It's an increase in the ranking from the third position to second position and they figure [ as one ] among the first top 10 of the Asian parks, that is Bengaluru is appearing as an eighth best park in Asia. And Kochi and Hyderabad, they figure among the sixth and seventh, I mean, rank in the country. I would also like to mention that we have -- we hold -- we get a Great Place to Work certification in the last year, that is a certification by an institute, Great Place to Work Institute is a global institute, wherein they analyze the performance of the company from the HR angle, where about 10,000 companies are analyzed and a few of them are certified. And I'm happy to mention that we got the certification, Great Place to Work certification in the first year of our appearance under the certification process. So that means we are a good place for our employees. And we -- even in the COVID times, we treat them as one of the very strong stakeholders of the company. We interact with them. We engage with them. And we see that the talents are spotted and brought up. And we are interacting with them on a daily basis -- the LT team, we are interacting on a daily basis. The [ intel ] team, in a month, we are interacting. And I'm happy to mention that against the first quarter result, I mean, which were declared just now, we had a total overhead expenditure of INR 49.95 crores in the last year, that have been brought down to INR 11.9 crores in the current year. This has been on account of the cooperation and sacrifice made by our people, our great workforce, who have volunteered to take a salary cut -- a big salary cut and help the company to tide over and survive the [ upcoming ] crisis. We don't know how long it will go. So I extend all my compliments and appreciation for our great people who are sacrificing for the company in these times of crisis. So going forward, I mean, we are -- our -- the biggest stakeholder of the company are our customers, our visitors, who have been supporting us almost about 2.5 to 3 million every year. So we are engaging with them on a daily basis. We see that we are in the top of the engagement process compared to other players in the market. And we find that, compared to other players, we are more visible in the social media and other platforms. And we get more support and reviews, I mean, much more than other parks. And we are engaging with them. And the idea is to bring back more footfalls, especially walk-in and attracting more repeat crowd, then driving higher RPV. And then we have a Strategy Committee formed in February, March of the current year, wherein our esteemed Director, Mr. Lakshminarayanan, is handholding us in the Strategy Committee. And he with his -- I mean, eminence in branding and marketing in the country, he is an expert. He is an eminent branding and marketing expert in the country. He is handholding us. And with his initiative and handholding, our whole-time Director, Mr. Arun Chittilappilly, is spearheading the team. And we are into a lot of initiatives which would be -- it would be too early to spell out in the current AGM. Probably we'll come out with the initiatives which the marketing team is brainstorming and trying to bring out in the current year before reopening of the park. I should also mention to you here that the association -- industry association, that is Indian Amusement and -- Indian Association of Amusement Park Industries (sic) [ Indian Association of Amusement Parks and Industries ] has been continuously representing to the state governments and the central government for making us to reopen the parks. So we -- they -- in fact, they have sent representation even to the Prime Minister and also the other ministers, including the Finance Minister, the Transport Minister, requesting that the parks be permitted to be operated and also the amusement park industry, which is the worst-hit compared to other businesses, should be provided with a lot of, I mean, reliefs and incentives in the form of GST reduction and other incentives, including declaring us as an industry and instituting all the benefits of an industry. So before I end, I would like to introduce -- a brief introduction of our new Director, Ms. Anjali Nair. She has joined the company in the current year. And Ms. Nair is an engineering graduate with the specialization in electricals and electronics. She has got over 2 decades of hands-on experience in development and commercialization of software-driven high-tech products, incorporating design thinking, data sciences, advanced algorithms and applied artificial intelligence in the B2B space globally. Ms. Anjali Nair is currently the Chief Operating Officer of SP Life Care Pvt. Ltd., Trivandrum, operating health care business, primarily senior living and home health care. She is involved in setting up new businesses for the group, mergers, acquisitions, implementing strategies for scaling and expansion. She has been helping us in our branding strategies and in our strategic initiatives, and she is a wonderful addition to our Board of Directors. So before I request Anjali madam to speak a few words, I thank our esteemed directors, our esteemed shareholders and other stakeholders, all our patrons and the wonderful Wonderla team who has been with us for the last 20-year journey. So I thank all of them. I thank our statutory auditors, led by Mr. Vipin Lodha. I thank the company Secretary Auditor, Mr. Somy Jacob, and I leave you all the good wishes and support and prayers because in these difficult times, we need [ them ]. We also wish you all the best for the return of the world to normalcy. And I assure you that once normalcy returns, Wonderla will reemerge as a force to reckon with among the community of the amusement park in the country and even globally. Thank you very much. Over to Anjali Madam.

Thank you, and a very good afternoon and a good morning to all of you. I'm Anjali. I have over 20 years of experience in technology. I have assumed positions of IT service management, head of DevOps, head of the IT governance for a $1 billion company. I have been involved in design, development and commercialization of software products for Global 1000 customers. Currently, as George sir mentioned, I am the Chief Operating Officer of SP Life Group of Companies. I'm also the principal for Season Two Ventures fund, which is a venture capital company, which is a $100 million venture capital fund. And [ as well ] at this time also on the Board of 10 other companies, which represent the business of IT services, product and design, food for toddlers, medical tourism and elder care, of course. So this is my primary responsibility, SP Life Care Group of Companies or rather Season Two living. It's about setting senior living communities across Kerala and nationally. So we have -- our plan is to touch 10,000 lives in the next few years. I'm excited to be a part of Wonderla Holidays, and I look forward to being here. Thank you so much.

Okay. So with that, we'll go to the -- further into the -- our meeting. In compliance to the provisions of Section 108 of the Companies Act, 2013, and [ Rule 21(2) ] of the Companies Management and Administration Amendment of 2015, the company has provided e-voting facility to members to exercise their right to vote at the AGM as per the notice circulated to them. Members who have not voted through e-voting can cast their votes through the platform made available during this videoconference. The company has also assigned Ms. Somy Jacob, Practicing Company Secretary, as scrutinizer for conducting the e-voting process. The result of the voting will be intimated to Government Stock Exchange and National Stock Exchange within 48 hours of the conclusion of the AGM and also be published in the company's website, www.wonderla.com. So the conciliary members present and notice of -- notice convening the AGM meeting is taken as read. Now we ask Company Secretary to read out the auditor's report and the major portion -- no, an important portion of that, not the entire report. Because if we read the entire report, it will take a lot of time. Over to company secretary.

Good afternoon, respected dignitaries of the Board and the respected shareholders of the company. The auditor's report submitted by BSR & Associates LLP is an unqualified and unmodified opinion. And I'll just [ shot ] on to the main synopsis of the report. The opinion letters by the BSR & Associates LLP will be post [ PMS ]. We have audited the financial statements of Wonderla Holidays Limited, the company, which comprise the balance sheet as of March 31, 2020, and the statement of profit and loss, including other comprehensive income, statement of changes in equity, and statement of cash flows for the year then ended and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls with reference to financial statements for future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of the changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Those [ notes are ] from the audit report.

Okay. Thank you, Srinivas. Now we go to the next item. Now we will take up the matters as per the notice. The items of business are -- for voting, I request the shareholders to use the e-voting platform of NSDL for voting. The questions will be taken once the business items -- I mean, you may be having some questions. So those same questions can come after these items are [ and subject ]. Item #1 of the notice, adoption of financial statements of the company. I would move this following resolution, pursuant that balance sheet as at March 31, 2020, and the statement of profit and loss for the year and at -- as on that date, together with the reports of the Board of Directors and auditors, be and are hereby adopted. The second item of the notice, confirmation of the interim dividend paid for the financial year 2019-'20. Confirmation from the shareholders is sought for the interim dividend of INR 1.8 per share or 18%, declared by the Board of Directors for the financial year 2019-'20. Item #3 of the notice. The appointment of Mr. Kochouseph Chittilappilly as a Director, liable to retire by rotation. Approval of the members is sought for reappointment of Mr. Kochouseph Chittilappilly, promoter and Non-Executive Director, who retires by rotation and being eligible, has sought reappointment. Item #4, appointment of Mr. Arun K. Chittilappilly as whole-time director. Approval of the members is sought for the appointment of Mr. Arun K. Chittilappilly as whole-time director of the company for a term of 5 years commencing from April 1, 2020. Item #5 of the notice. Appointment of Mrs. Anjali Nair as an Independent Director. Approval of the shareholders is sought for appointment of Mrs. Anjali Nair as an Independent Director of the company for a period of 5 years commencing from April 1, 2020. Item #6 of the notice. Reappointment of Mr. George Joseph as a Joint Managing Director. Approval of the members is sought for reappointment of Mr. George Joseph as a Joint Managing Director of the company for a term of 2 years commencing from July 9, 2020. Having [ granted ] all the items of business in the notice successfully, I extend my sincere thanks to the members for their participation. So now I request the members to take part in the deliberation and express their views on the performance of the company during this period under review. The members are requested to share their DP ID, Client ID and name while participating in the deliberation.

The speaker, shareholders are now requested to post questions [ to the AGM ]. And we have asked the shareholders to post the questions to [ the lead portal ]. As of now, we have not received any questions from the shareholders.

No questions from the shareholders. Okay.

If there are no questions from the shareholders, I will request Mr. Satheesh Seshadri, our CFO, to propose vote of thanks.

So the job of CFO is one of saying thanks. In the times of this COVID, gratitude is more important. And we do know that all things in life are as a result of some collaborative effort, whether directly or indirectly. Kochi Park has now reached 20 years of operations and Bengaluru Park 15 years of operations. Development of one amusement park at Kochi to leadership in amusement park industry. We would like to thank the architect and the captain of the ship, Kochouseph [ shed be thankful ] to build a big room so that even today, there is enough space for each of us to have -- to practice of the innovations. Thanks to the Board members for providing wonderful support strategies and guidances. Thanks to the -- special thanks to our shareholders, this could not have happened without you. Thanks to all the shareholders and stakeholders for helping us to reach this 20 years of operations in Kochi Park and 15 years in Bengaluru Park, the government authorities, leadership team, employees, business development partners, concessioners, auditors for their time, passion and talent.

Satheesh, before we conclude, could you please also mention about the Wonder Kitchen, which I failed to mention in my address, Wonder Kitchen initiative.

Yes, yes. During this quarter -- first quarter '21, we have started a new initiative called Wonder Kitchen under the Wonderla flagship, where we have started a takeaway counter. We have started in the area, Kengeri, at the Bengaluru, which is about 12 kilometers from our park. The feedback from the customers who have had our takeaway food has been fantastic. And we have been receiving repeated accolades from them. And this is encouraging us to have one more counter at the Rajarajeshwari Nagar. Going forward, we would like to develop some -- few more counters at Kochi and Hyderabad too. And this will help us in using our resources, our -- in terms of the common kitchen, our manpower effectively. Plus the presence, that is brand recall, is more appropriate in the places where it is [ commonly aided ]. Thank you so much.

Sure. Having closed our business today, I declare that this 18th AGM is closed. Thank you for your participation. Thank you.