Finolex Cables : Transcript 53rd Annual General Meeting

"Finolex Cables Limited 53rd Annual General Meeting"

September 29, 2021

BOARD OF DIRECTORS/KMP:

MR. DEEPAK K. CHHABRIA - EXECUTIVE CHAIRMAN

MR. P.R. BARPANDE - NON-EXECUTIVEINDEPENDENT DIRECTOR

MR. AVINASH S. KHARE - NON-EXECUTIVEINDEPENDENT DIRECTOR

MRS. FIROZA KAPADIA - INDEPENDENT WOMAN DIRECTOR

MR. P.M. DESHPANDE - NON-EXECUTIVEDIRECTOR

MR. SUNIL UPMANYU - EXECUTIVE DIRECTOR - OPERATIONS

MR. RUPEN BHATT - STATUTORY AUDITORS, DELOITTE HASKINS & SELLS

MR. MAHESH VISWANATHAN - CHIEF FINANCIAL OFFICER

MR. R. G. D'SILVA - COMPANY SECRETARY

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	Finolex Cables Limited
	September 29, 2021
Moderator:	I now handover the proceedings to Mr. Deepak K. Chhabria, Chairman of Finolex Cables
	Limited.
Deepak K. Chhabria:	Good Morning Ladies and Gentlemen. I am Deepak K. Chhabria, Executive Chairman of the
	Company. I am informed by the Company Secretary that the requisite quorum for the meeting
	is present, and the meeting is duly constituted. So I start with the proceedings of the meeting.
	I now request all the Directors present and the Chief Financial Officer, Statutory Auditor, and
	Company secretary to introduce himself, herself to the shareholders. Mr. P.R. Barpande please
P.R. Barpande:	Good morning shareholders, I am P.R. Barpande, Independent Director and Audit Committee
	Chairman, thank you.
Deepak K. Chhabria:	Thank you Mr. Barpande. Mr. A.S. Khare please.
A.S. Khare:	Good morning all participant shareholders. I am Avinash Khare, joined this meeting as
	Independent Director. I am also on the committees of the Board, some of the committees of the
	Board. Thank you.
Deepak K. Chhabria:	Thank you Mr. Khare. Mrs. Firoza Kapadia please.
Mrs. Firoza Kapadia:	Good morning shareholders, I am Firoza Kapadia, Independent Woman Director on the Board
	and also the Chairperson of the Nomination and Remuneration Committee.
Deepak K. Chhabria:	Thank you Mrs. Kapadia. Mr. P.M. Deshpande please.
P.M. Deshpande:	Good morning dear shareholders, I am Prasad Deshpande, and I am attending this AGM in the
	capacity of Non-Executive Director of the Company. Thank you very much.
Deepak K. Chhabria:	Thank you Mr. Deshpande. Mr. Sunil Upamanyu please.
Sunil Upamanyu:	Good morning everybody. I am Sunil Upamanyu, Executive Director (Operations) and I am
	attending this AGM from our Head Office at Pimpri, Pune and it is my pleasure to welcome you
	all in this AGM, thank you.
Deepak K. Chhabria:	Thank you Mr. Sunil Upamanyu. Mr. Rupen Bhatt, Partner of the Statutory Auditors of the
	Company please.
Rupen Bhatt:	Hi, good morning, all shareholders, ladies and gentlemen. I am Rupen Bhatt, Partner (Audit)
	representing Deloitte Haskins and Sells. I have also my colleague Mr. Rajesh Patel attending the
	meeting, thank you.
Deepak K. Chhabria:	Thank you Mr. Bhatt. Mr. Mahesh Viswanathan please.

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Finolex Cables Limited

September 29, 2021

Mahesh Viswanathan: Good morning ladies and gentlemen, my name is Mahesh Viswanathan. I am the Chief Financial Officer of the Company. I am participating in this meeting from the Registered Office of the Company. A very warm welcome to all of you. Thank you.

Deepak K. Chhabria: Thank you Mahesh. Mr. R.G. D'Silva please.

R.G. D'Silva:Thank you. Good morning ladies and gentlemen, I am Mr. R.G. D'Silva, Company Secretary of the Company. I welcome all the shareholders for this 53rd AGM. I now handover to the Chairman.

Deepak K. Chhabria: Ladies and gentlemen, Good morning. It's my honor and pleasure to extend a very warm welcome to all the shareholders gracing this occasion, the 53rd Annual General Meeting, of Finolex Cables Limited. This year too, in view of the continuing COVID-19 pandemic, this meeting is being organized virtually and I'm extremely glad that so many of you have taken it upon yourself to participate. Your enthusiasm and active participation will surely motivate all of us at the Company, to strive for excellence. In this period of COVID, I hope all members are taking good care of their health and safety and wish everyone the best of health.

Moving to the business of the day, the Notice convening this meeting, the Directors Report and the Auditor's Report for the Financial Year 2020-21 is already with you. The Auditor's Report is unqualified and clean and I take them as read. I would now like to mention a few major events of 2021. The pandemic peaked at the beginning of the financial year and took its toll on the economies and business across the world and here in India. As the cover of Annual Report states, this year has been one of exceptional adversity in which your Company and its employees showed outstanding character. The year started with complete lockdown of operations for two straight months. The results of the first quarter a reflective of this disruption, faced with an unprecedented situation and serious disturbances caused by a ravaging pandemic, your Company during this time strategically planned for business recovery post lockdown. When operations opened up, the consumer demand took its time to find traction and the Company started clocking significant numbers from the second quarter. All this, while the Company enjoyed the best safety, security and social distancing environment for its employees, as well as paying full salaries to all its employees during the times of closure.

Electrical wires, which contributes approximately 83% of the Company's total revenue depends on the performance of the real estate sector, which has experienced sluggish growth during the last couple of years. When the economy reopened during the second quarter of last year, build up in volumes were slow initially and started picking up from the third quarter. However, the second wave of COVID infections did impact business during the final quarter of the year, as well as the first quarter of the current year. The year was also marked by a steep rise in commodity prices due to which your Company had to adjust selling prices several times. The real estate sector has been marking its recovery as we speak, boosted by Government reforms and a slow but steady increase in demand. These reforms with schemes, such as Housing for All,

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Finolex Cables Limited

September 29, 2021

poised to boost the recovery for the sector and eventual thrust to the demand for the Company's products. Our endeavor to expand our retailer network bore fruit with the Company reaching a total of 90,000 retail touch points during the year. We are confident of reaching the targeted 150,000 retail touch points very soon. The Company expects these to be gradually convert into higher volumes going forward. Your Company is a well-recognized total cables solution provider and caters to diverse electrical requirements of commercial, industrial and consumer markets through its wide range of product portfolio. This proved to be a significant growth driver in the performance of the Company during the year and is expected to do so in the times to come.

The Government in the previous years had unveiled a host of programs and schemes towards betterment of infrastructure and continues to invest in them as committed. These programs such as National Infrastructure Pipeline, Smart Cities, Deen Dayal Upadhyaya Gram Jyoti Yojana, Power for All, Housing for All will boost the demand for electrical wires and cables. Increased activity in the electricity transmission and distribution sector and the renewable energy sector are expected to push demand even further. Having said this, despite their ambitious intent for maximum outreach, the telecom companies continue to operate under stress. Public sector undertakings in this sector faced severe liquidity crunch and despite their best intentions, could not place their orders as estimated. Private sector telecom operators continue to incur losses over their revenue models. This has resulted in sluggish growth of the telecommunication cable segment. The Digital India Program and the upcoming 5g infrastructure demand would be growth drivers to the communications cable segment. Your Company continues its focus on augmenting its revenues in the FMEG and other home appliance segments, which has been growing well even under the current economic conditions.

Now for the business highlights of 2021. Your Company's electrical wire segment revenue stood at Rs. 2,310 crores as compared to Rs. 2,361 crores in the previous year. The communication cables revenue stood at Rs. 322 crores as compared to Rs. 489 crores in the previous year. The segment title, other, showed higher revenue of Rs. 114 crores as against Rs. 88 crores in the previous year, a growth of 29%. This segment compromises of new product lines, such as lamps, switches, fans, water heaters and switch gear. Total income for the Financial Year 2021 stood at Rs. 2,845 crores as against Rs. 3,049 crores in the previous year. Other income for the year saw a significant decrease with negligible dividend income received during the current year as against Rs. 80 crores during the previous year, on account of an associate declaring regular as well as interim dividend during the year. Profit before taxes, stood at Rs. 392 crores as against Rs. 501 crores in the previous year. Profit after tax stood at Rs. 283 crores in Financial Year 2021 as against Rs. 402 crores in Financial Year 2019-20. Your Company continues to remain debt-free. Your Company believes that true character is in helping others succeed.

Our CSR efforts continue to be focused around projects in education, healthcare, women empowerment, COVID care and support to the police department. This year we incurred an expenditure of Rs. 9.8 crores on CSR activities.

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Finolex Cables Limited

September 29, 2021

Your Company commissioned its PVC conduit plant at Goa during the year and is committed to its proposed CAPEX of Rs. 200 crores over the next 18 to 20 months for enhancing its manufacturing capabilities at Urse, Pune and Verna Goa. This includes the construction of the electronic beam cured cables plant, which aims at serving the renewable energy sector and

	automobile segment.
	Revenue augmentation, efficient cost control, improved asset utilization, product quality
	maximization continue to remain the core focus areas of your Company and these I'm sure will
	lead to a stronger financial position of your Company. Finolex Cables Limited is well-poised to
	take advantage of any future growth opportunity. For the year ended 2021, your Directors are
	pleased to recommend a 275% dividend, Rs. 5.50 per equity share.
	Mr. P.R. Barpande and Mr. A.S. Khare, who are appointed by the Board as additional Directors
	Independent, hold office upon the date of this Annual General Meeting and being eligible offer
	themselves for appointment. The Board proposes and recommends their appointment as
	Independent Directors.
	Mr. Sunil Upamanyu, who was appointed as Additional Director, Executive Director
	(Operations) during the year, holds office up to the date of this Annual General Meeting and
	being eligible, offers himself for appointment. The Board recommends his appointment.
	Mr. P.M. Deshpande who was appointed by the Board as Additional Director, Non-Executive
	Non-Independent holds office up to the date of this AGM and being eligible, offers himself for
	appointment. The Board recommends his appointment.
	Mrs. Firoza F. Kapadia was appointed as Woman Director, Non-Executive Independent being
	eligible, offers herself for appointment as Independent Woman Director. The Board recommends
	her appointment.
	I take this opportunity to thank all members, particularly those of you who have so kindly made
	it convenient to attend this meeting, even during the pandemic. I'm grateful to the banks,
	financial institutions, government departments, local authorities, customers, suppliers and
	business associates of your Company, for their continued cooperation and support.
	I express my deep gratitude to all Directors of the Board and Employees of your Company at all
	levels for their efficient handling of your Company's operations. I look forward with confidence
	and optimism to their continued cooperation and support in future. With this, I conclude my
	opening remarks. Thank you.
Moderator:	Over to you, Chairman.
Deepak K. Chhabria:	I would like to inform the members that the statutory registers were made available through out
	at the registered office of the Company and scanned copies of the same is also made available

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