24029653 company analysis report of britannia

7/27/2019 24029653 Company Analysis Report of BRITANNIA

1/47

BRITANNIA

Company Overview

The story of one of India's favorite brands reads almost like a fairy tale. Once upon a time, in

1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now

Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today.

1. The beginnings might have been humble-the dreams were anything but. By 1910,

with the advent of electricity, Britannia mechanised its operations, and in 1921, it

became the first company east of the Suez Canal to use imported gas ovens.

Britannia's business was flourishing. But, more importantly, Britannia was acquiring a

reputation for quality and value. As a result, during the tragic World War II, the

Government reposed its trust in Britannia by contracting it to supply large quantities

of "service biscuits" to the armed forces.

As time moved on, the biscuit market continued to grow and Britannia grew along

with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits

from Parry's who till now distributed Britannia biscuits in India. In the subsequent

public issue of 1978, Indian shareholding crossed 60%, firmly establishing the

Indianness of the firm. The following year, Britannia Biscuit Company was re-

christened Britannia Industries Limited (BIL). Four years later in 1983, it crossed the

Rs. 100 crores revenue mark.

On the operations front, the company was making equally dynamic strides. In 1992, it

celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate

identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products

market. In 1999, the "Britannia Khao, World Cup Jao" promotion further fortified the

affinity consumers had with 'Brand Britannia'.Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent

food brand of the country. It was equally recognised for its innovative approach to products

and marketing: the Lagaan Match was voted India's most successful promotional activity of

the year 2001 while the delicious Britannia 50-50 Maska-Chaska became India's most

successful product launch. In 2002, Britannia's New Business Division formed a joint venture

with Fonterra, the world's second largest Dairy Company, and Britannia New Zealand Foods

Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global rated

1


2/47

Britannia 'One amongst the Top 200 Small Companies of the World', and The Economic

Times pegged Britannia India's 2nd Most Trusted Brand.

Today, more than a century after those tentative first steps, Britannia's fairy tale is not only

going strong but blazing new standards, and that miniscule initial investment has grown by

leaps and bounds to crores of rupees in wealth for Britannia's shareholders. The company's

offerings are spread across the spectrum with products ranging from the healthy and

economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. Having succeeded

in garnering the trust of almost one-third of India's one billion population and a strong

management at the helm means Britannia will continue to dream big on its path of innovation

and quality. And millions of consumers will savour the results, happily ever after.

For the year ended 31st March 2008, the Company achieved a sales growth of 17.5% on an

expanded base arising from 27.5% growth in the previous year. Net Profit of the Company

increased 77.5 % to Rs 1,910 Mn compared with Rs 1,076 Mn in 2006-07. Operating Margin

increased by 307 basis points to 7.5%.

The Company witnessed all round growth in key categories with Biscuits recording sales of

Rs. 23,299 Mn. Bread, Cake and Rusk business crossed the Rs. 2,700 Mn mark during 2007-

08. This business has doubled in two years.

In an intensely competitive biscuit environment, all Power Brands of the Company recorded

double digit growth, with Tiger and Good Day growing in excess of 20%. The Companys

innovation forays have successfully addressed new benefit clusters and NutriChoice

Digestive has claimed its position in the health and vitality space. The Company continues to

maintain its leadership edge in 6 out of 7 key product segments, the only exception being

Glucose.

The Company introduced several new and renovated offerings in Tiger, Good Day, Treat and

MarieGold. The health and nutrition platform was buttressed by Tiger Banana with iron-zor,

fortified Milk Bikis, renovated MarieGold and Nutrichoice Digestive. To tap the more

indulgent consumers, your Company launched Good Day Classic Cookies, while continuing

to roll out individual consumption packs at the highly affordable Rs. 5 price point.

The Bread, Cake and Rusk portfolio was strengthened with the successful relaunch of Breads,

fortified with vitamins and minerals, positioning them firmly as the healthy start to your day.

This innovation combined with relevant consumer activation in key markets has seen a 30%+

growth in the Bread, Cake and Rusk business.

2


3/47

As a Corporate, Britannia worked for the benefit of all stakeholders - shareholders,

consumers, dealers , suppliers, bankers and employees. It has established an excellent track

record in terms of its financial performance and dividends distributed to its shareholders. This

has been adequately demonstrated with the Company's topline growing from Rs 10,301 Mn

in 1999 to Rs 26,176 Mn in 2008, a growth of 154% over the last 10 years. The net profit

grew even more significantly at 382% from Rs 396 Mn in 1998-99 to Rs 1,910 Mn in 2007-

08, giving a CAGR of 19.1%. As at 31st March 2008, the issued and paid up capital of

Britannia amounts to 23, 890,163 equity shares having a nominal value of Rs 10 each. The

shareholder base is about 25,300 in number

3


4/47

MILESTONES OF THE COMPANY

1892 The Genesis - Britannia established with an investment of Rs. 295 in Kolkata

1910 Advent of electricity sees operations mechanized1921 Imported machinery introduced; Britannia becomes the first company East of

the Suez to use gas ovens

1939 44 Sales rise exponentially to Rs.16,27,202 in 1939 During 1944 sales ramp up

by more than eight times to reach Rs.1.36 crore

1975 Britannia Biscuit Company takes over biscuit distribution from Parry's

1978 Public issue - Indian shareholding crosses 60%

1979 Re-christened Britannia Industries Ltd. (BIL)

1983 Sales cross Rs.100 crore

1989 The Executive Office relocated to Bangalore

1992 BIL celebrates its Platinum Jubilee

1993 Wadia Group acquires stake in ABIL, UK and becomes an equal partner with

Groupe Danone in BIL

1994 Volumes cross 1,00,000 tons of biscuits

1997 Re-birth - new corporate identity 'Eat Healthy, Think Better' leads to new

mission: 'Make every third Indian a Britannia consumer' BIL enters the dairy

products market

1999 Britannia Khao World Cup Jao" - a major success! Profit up by 37%

2000 Forbes Global Ranking - Britannia among Top 300 small companies

2001 BIL ranked one of India's biggest brands No.1 food brand of the country

Britannia Lagaan Match: India's most successful promotional activity of the

year Maska Chaska: India's most successful FMCG launch

2002 BIL launches joint venture with Fonterra, the world's second largest dairy

company Britannia New Zealand Foods Pvt. Ltd. is born Rated as 'One

amongst the Top 200 Small Companies of the World' by Forbes Global

Economic Times ranks BIL India's 2nd Most Trusted BrandPure Magic

-Winner of the Worldstar, Asiastar and Indiastar award for packaging

2003 Treat Duet'- most successful launch of the year Britannia Khao World Cup Jao

rocks the consumer lives yet again 2004 Britannia accorded the status of being

4


5/47

a 'Superbrand' Volumes cross 3,00,000 tons of biscuits Good Day adds a new

variant - Choconut - in its range

2005 Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes the popular chant!

Britannia launched 'Greetings' range of premium assorted gift packs The new

plant in Uttaranchal, commissioned ahead of schedule. The launch of yet

another exciting snacking option - Britannia 50-50 Pepper Chakkar

2007 Britannia industries formed a joint venture with the Khimji Ramdas Group and

acquired a 70 percent beneficial state in the Dubai-based Strategic Foods

International Co. LLC and 65.4% in the Oman-based Al Sallan Food

Industries Co. SAOG

2008 Britannia launched Iron fortified 'Tiger Banana' biscuits, 'Good Day Classic

Cookies', Low Fat Dahi and renovated 'MarieGold'

5


6/47

KEY EMPLOYEES OF THE COMPANY

Name Designation

Mr. Nusli Neville Wadia Chairman

Ms. Vinita Bali Managing Director

Mr. A.K.Hirjee Director

Dr. Ajai Puri Director

Mr. Avijit Deb Director

Mr. Jeh N Wadia Director

Mr. Keki Dadiseth Director

Mr. Nimesh N Kampani Director

Mr. Pratap Khanna Director

Mr. S.S.Kelkar Director

PRODUCTS & SERVICES

6


7/47

Tiger, launched in 1997, became the largest brand in Britannia's portfolio

in the very first year of its launch and continues to be so till today. Tiger

has grown from strength to strength and the re-invigoration in June 2005

and more recently, in Apr 2008 has further helped bolster its growth in the highly competitive

glucose biscuit category .

Tiger is a Glucose biscuit, which comes with the added goodness of wheat and milk.

It is for modern mothers who play an enabling role for their children to compete in today's

world and thus want the best. Now Tiger Glucose has been fortified with "Iron Zor" with an

attempt towards addressing the Iron Deficiency crisis the children of India face.

Over the years, Tiger has become the mass-market face of Britannia symbolising fun

and energy in both urban and rural India, and transcending glucose biscuits.

Tiger Coconut : Delicious Coconut Flavoured Energy Biscuits, launched in 2001

Tiger Creams : Was Introduced in 2002 at just Rs 5 per pack. Tiger Cream is now available

in Orange, Elaichi, Chocolate, Pineapple, Strawberry and Butterscotch flavours, and promises

to bring more fun and more energy to children across the country.

Chota Tiger : Is an extension of brand Tiger launched nationally in May, 2007. It is mini

sized poppable glucose biscuit with coloured sugar sprinkling. It comes in two variants: Milk

Sparkies and Choco Sparkies

Tiger Banana : Britannia is committed to help secure every child's right to Growth &Development through good food everyday. Purposefully taking forward the credo of 'Eat

Healthy, Think Better ', we have launched a new variant under our power brand TIGER -

TIGER BANANA - power packed with IRON ZOR & and with the delightful taste of

banana.

Britannia Good Day was launched in 1986 in two delectable avatars -

Good Day Cashew and Butter. Over the years, new variants were

introduced - Good Day Pista Badam in 1989, Good Day Chocochips

in 2000 and Good Day Choconut in 2004.

7


8/47

This rich biscuit enjoys a fan following of consumers across all ages, loyal to the

brand promise of a great taste evident from the visibly abundant ingredients. Good Day is

amongst the fastest growing brands in Britannia's portfolio and is today the market leader

with almost 2/3 share of the market. The brand is synonymous with everyday treats that

infuse happiness into people's daily lives.

After two decades of magnificent success; it was time to give the nation yet another

reason to have a good day. Abundance, goodness, indulgence and now unrestrained joy - that

is the message of this new campaign.

The new TT ad is the uncontrollable expression of the ticket collector's happiness and

joy that is stimulated by consumption of the cookie, that spreads cheer amongst the people

around him creating an atmosphere of shared joy that's unorchestrated and straight from the

heart. The celebration was taken to the IPL as Good day cheered along with a million cricket

fans in the stadiums, each screaming and proclaiming "Ho gaya re Good Day". The dazzling

brilliance of this endeavour, the contagious rhythm needs to be lived and spread through the

nation, making 'Iska toh ho Gaya Re Good Day ' a part of the common lingo and a way of

life.

Good Day truly believes laughter and happiness are infectious, it transcends race,

caste creed unifying humanity in an inclusive emotion.

The brand perseveres to infuse cheer, hearten the nation and enliven lives. With its

rightful place on the front page of The Times of India, Good Day gifts the nation a priceless

treasure, that of spreading JOY!

With a brand name like 50-50, can the product be anything but fun?

Launched in 1993, 50-50 belongs to the family of crackers and is

considered the "very very tasty tasty" snack.

Britannia 50-50 is the leader in its category with more than one-third of market share. The

versatile and youthful brand constantly aims to provide a novel and exciting taste experience

to the consumer. As a result, in 2001, the delicious Maska Chaska was launched as a variant

of the original brand and became an instant success.

8


9/47

Kids may dislike drinking milk, but they love Britannia Milk Bikis! Milk Bikis has been

trusted by mothers as a source of growth energy of milk and their loyalty to the brand has

made it an integral part of their children's

nutrition regimen

In 1996, Milk Bikis launched a variant called Milk Cream. These round biscuits come with

smiley faces and are full of milk cream that makes them very popular with children. Milk

Cream also promoted the idea of 'eating milk' in a yummy way, which makes mothers happy

as well

.

To keep pace with the demands of the new generation and to bring milk nutrition to the

masses in a delightful form, Milk Bikis, went one step further in the last quarter of 2006 in

providing not just energy but developmental fuel for children. With a unique and attractive

honeycomb design and an enhanced product experience, the new biscuit is now fortified with

SMART NUTRIENTS 4 vital vitamins, iron and iodine, proven to aid mental and physical

development in growing kids.

Britannia's oldest brand enjoys a heritage that spans the last 50 years -

and going strong. In a market swamped with me-too products and where

even the name 'Marie' has become generic, Britannia Marie Gold has

maintained its stronghold. Today, the ever-popular Marie Gold is

synonymous with the 'Tea Time Biscuit'. Its taste, crispiness and lightness make it a must for

every tea break. It is the #1 brand in its category by a long shot.

9


10/47

Need For Study:-

In India brittania is one of biggest brand & preminent food brand of the country. The main

aspect or need for study to know about the present financed position of the company. To

know about the employee relations & their commitment towards the company. To gather the

information regarding distribution of its products. To determine global expansion of the

company.

OBJECTIVES OF THE STUDY:-

To know about the status of the competitors.

10


11/47

To analyse the business level strategy of the company.

To analyse the financial performance of the company

To know about the experts view of the company.

To determine sales activities by understanding customers business.

To analyse strengths and weakness of the company.

To know about the key employees of the company.

Data sources

The source of study is secondary data.

The company information is collected from various websites related to BRITANNIA retail.

www. BRITANNIA.com

www.moneycontrol.com

www.financialexpress.com.

11


12/47

www.wikipedia.com

www.indianfinancelevel.com

www.companyreviews.com

www.webindia.com

www.businesstimes.com

Company website: www.BRITANNIAretail.net

Limitations Of Study:-

Reliability is not guaranteed.

Secondary data can be general and vegue and maynot really help companies

with decision making.

The data may be old and out of data.

The company publishing the data may not be reputable.

12


13/47

FINANCIAL STATEMENT

Balance sheet

(Rs crore)

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04Sources of funds

Owner's fundEquity share capital 23.89 23.89 23.89 23.89 25.11

Share application money - - - - -Preference share capital - - - - -

Reserves & surplus 731.92 590.93 525.20 419.63 405.91

Loan fundsSecured loans 1.94 1.53 1.62 6.14 39.19

Unsecured loans 104.16 3.25 7.74 - -

Total 861.91 619.60 558.45 449.66 470.21Uses of funds

Fixed assetsGross block 453.18 392.12 315.37 250.35 273.51

Less : revaluation reserve - - - - -

Less : accumulated depreciation 212.19 193.75 174.81 154.39 146.07Net block 240.99 198.37 140.56 95.95 127.44

13


14/47

Capital work-in-progress 9.69 16.03 11.08 31.70 0.86

Investments 380.83 320.05 359.86 330.08 291.32Net current assets

Current assets, loans & advances 554.84 382.61 349.10 278.07 239.96

Less : current liabilities & provisions 347.67 323.03 318.22 320.37 235.67

Total net current assets 207.17 59.58 30.88 -42.30 4.29Miscellaneous expenses not written 23.23 25.58 16.06 34.24 46.30

Total 861.91 619.60 558.45 449.66 470.21Notes:

Book value of unquoted investments 380.81 352.55 392.33 228.56 291.28Market value of quoted investments 2.93 2.12 2.88 2.02 1.41

Contingent liabilities 169.55 102.63 67.24 61.24 58.55Number of equity sharesoutstanding 238.90 238.90 238.90 238.90 251.12

Cash flow

(Rs crore)

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04Profit before tax 232.26 118.41 200.71 220.24 184.39Net cashflow-operating activity 63.13 87.08 64.90 192.46 82.59

Net cash used in investing activity -130.31 59.05 -37.41 -45.18 39.47Netcash used in fin. activity 53.08 -49.15 -36.17 -140.51 -185.96

Net inc/dec in cash and equivlnt -14.10 96.98 -8.68 6.77 -63.90

Cash and equivalnt begin of year 238.91 141.93 150.61 9.86 73.76Cash and equivalnt end of year 224.81 238.91 141.93 16.63 9.86

14


15/47

Profit loss account

(Rs

crore)

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04Income:Operating income 2,587.86 2,199.32 1,713.34 1,587.57 1,439.61

Expenses

Material consumed 1,563.79 1,404.58 1,008.64 899.46 767.10Manufacturing expenses 244.96 212.30 162.42 204.39 194.39

Personnel expenses 90.53 76.71 73.07 71.64 82.06Selling expenses 363.20 303.67 209.75 157.64 167.39

Adminstrative expenses 93.06 73.37 58.50 70.51 67.24Expenses capitalised - - - - -Cost of sales 2,355.54 2,070.62 1,512.38 1,403.63 1,278.18

Operating profit 232.32 128.70 200.96 183.94 161.44Other recurring income 24.07 15.67 13.38 19.49 15.81

Adjusted PBDIT 256.39 144.37 214.34 203.43 177.24

Financial expenses 9.73 8.90 5.09 2.10 6.05Depreciation 29.08 25.27 21.72 18.97 22.40

Other write offs - - - - 9.72Adjusted PBT 217.57 110.20 187.53 182.35 139.07

Tax charges 41.26 10.76 54.29 57.95 65.59

Adjusted PAT 176.31 99.44 133.25 124.40 73.48Non recurring items -3.95 5.89 8.90 34.44 38.93

Other non cash adjustments 18.64 2.32 4.28 -8.99 6.39Reported net profit 191.00 107.65 146.43 149.85 118.80

Earnigs before appropriation 251.00 157.65 196.43 199.85 168.80

Equity dividend 43.00 35.84 35.84 33.45 27.23Preference dividend - - - - -

Dividend tax 7.31 6.09 5.03 4.69 3.49Retained earnings 200.69 115.73 155.57 161.71 138.08

Capital structure

(Rs

crore)

From

YearTo Year

Class Of

Share

Authorized

Capital

Issued

Capital

Paid Up

Shares

(Nos)

Paid Up

Face Value

Paid Up

Capital

15


16/47

2007 2008Equity

Share50.00 23.89 23890163 10 23.89

2006 2007Equity

Share50.00 23.89 23890163 10 23.89

2005 2006Equity

Share50.00 23.89 23890163 10 23.89

2004 2005Equity

Share50.00 23.89 23890163 10 23.89

2003 2004Equity

Share50.00 25.11 25112050 10 25.11

2002 2003Equity

Share50.00 25.90 25904276 10 25.90

2001 2002

Equity

Share 50.00 26.85 26850450 10 26.85

1999 2001Equity

Share50.00 27.85 27850450 10 27.85

1989 1999Equity

Share50.00 18.57 18566967 10 18.57

1988 1989Equity

Share20.00 12.38 12378000 10 12.38

Ratios

(Rs

crore)

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Per share ratios

Adjusted EPS (Rs) 73.80 41.62 55.78 52.07 29.26Adjusted cash EPS (Rs) 85.98 52.20 64.87 60.01 42.05

Reported EPS (Rs) 79.95 45.06 61.29 62.27 47.31

Reported cash EPS (Rs) 92.12 55.64 70.38 70.21 60.10Dividend per share 18.00 15.00 15.00 14.00 11.00

Operating profit per share (Rs) 97.24 53.87 84.12 76.99 64.29Book value (excl rev res) per share

(Rs)306.65 246.65 223.12 171.32 153.20

Book value (incl rev res) per share

(Rs.)306.65 246.65 223.12 171.32 153.20

16


17/47

Net operating income per share (Rs) 1,083.23 920.60 717.17 664.53 573.28

Free reserves per share (Rs) 294.86 234.99 211.46 159.66 142.11Profitability ratios

Operating margin (%) 8.97 5.85 11.72 11.58 11.21

Gross profit margin (%) 7.85 4.70 10.46 10.39 9.65

Net profit margin (%) 7.31 4.86 8.48 9.25 8.16Adjusted cash margin (%) 7.86 5.63 8.97 8.92 7.25Adjusted return on net worth (%) 24.06 16.87 24.99 30.39 19.09

Reported return on net worth (%) 26.07 18.26 27.47 36.34 30.87

Return on long term funds (%) 29.99 19.32 34.97 41.58 33.66Leverage ratios

Long term debt / Equity - - - - -Total debt/equity 0.14 0.01 0.01 0.01 0.09

Owners fund as % of total source 87.69 99.22 98.32 98.63 91.66

Fixed assets turnover ratio 5.73 5.63 5.43 6.34 5.93Liquidity ratios

Current ratio 1.60 1.18 1.10 0.86 1.02Current ratio (inc. st loans) 1.23 1.17 1.07 0.83 0.76

Quick ratio 0.72 0.51 0.47 0.40 0.44

Inventory turnover ratio 9.98 12.88 11.79 14.13 14.69Payout ratios

Dividend payout ratio (net profit) 26.34 38.94 27.90 25.63 25.86Dividend payout ratio (cash profit) 22.85 31.54 24.30 22.73 20.35

Earning retention ratio 71.47 57.84 69.34 69.35 58.19

Cash earnings retention ratio 75.51 66.39 73.64 73.40 70.91Coverage ratios

Adjusted cash flow time total debt 0.51 0.03 0.06 0.04 0.37Financial charges coverage ratio 26.34 16.22 42.14 96.71 29.32

Fin. charges cov.ratio (post tax) 23.61 15.94 34.06 80.74 25.96

Component ratiosMaterial cost component (%

earnings)59.76 65.41 59.58 56.04 54.20

Selling cost Component 14.03 13.80 12.24 9.92 11.62Exports as percent of total sales 0.44 0.66 0.65 2.51 0.37

Import comp. in raw mat. consumed 0.09 0.20 0.19 5.03 1.69Long term assets / total Assets 0.53 0.58 0.59 0.62 0.61

Bonus component in equity capital

(%) 91.82 91.82 91.82 91.82 92.22

17


18/47

Annual Performance 2007-08

For the year ended 31st March 2008, the Company achieved a sales growth of 17.5% on an


increased 77.5 % to Rs 1,910 Mn compared with Rs 1,076 Mn in 2006-07. Operating Margin


Exceptional items for the year include Rs 130.5 Mn towards amortisation of VRS costs.

Earnings per Share are Rs. 80 compared with Rs.45.1 last year The Company witnessed all

18


19/47

round growth in key categories with Biscuits recording sales of Rs. 23,299 Mn. Bread, Cake

and Rusk business crossed the Rs. 2,700 Mn mark during 2007-08. This business has doubled

in two years.


double digit growth, with Tiger and Good Day growing in excess of 20%. The Companys

innovation forays have successfully addressed new benefit clusters and NutriChoice

Digestive has claimed its position in the health and vitality space. The Company continues to

maintain its leadership edge in 6 out of 7 key product segments, the only exception being

Glucose.

The business continued to face inflationary pressure in key raw materials such as wheat flour,

refined palm oil, skimmed milk powder and other dairy products, as well as energy costs.

These were more than offset on the cost side through operational and procurement

efficiencies, productivity improvements, cost reduction programs and on the revenue side

through improved product mix and higher realisation, aided by strong consumer off take.

britannia has an excellent track record of rewarding its shareholders. The company has an

uninterrupted record of distributing dividends for several decades. The dividends declared

over the last 10 years are as under:

Year Dividend Percentage

1996 40.00

1997 40.00

1998 50.00

1999 55.00

2000 45.00

2001 55.00

2002 75.00

2003 100.00

2004 110.00

2005 140.00

2006 150.00

2007 150.00

2008 180.00

19


20/47

Bonus History

Year Bonus Particulars

1961 1 equity share for every 2 shares held

1966 4 equity shares for every 10 shares held








Comparison with Competitors

20


21/47

Last Price Market Cap.

(Rs. cr.)

Sales

Turnover

Net Profit Total Assets

GlaxoSmith Con 930.95 3,915.16 1,592.30 188.33 646.36Britannia 1,565.55 3,740.12 3,127.11 180.40 861.92

Lotte India 525.00 197.99 170.96 -2.14 77.67Heritage Foods 81.65 94.14 588.03 0.94 272.44

SKM Egg Product 18.10 47.66 123.90 10.50 82.15

Agro Dutch Ind 11.45 38.43 143.47 -32.05 482.41Sita Shree Food 10.35 22.81 95.08 1.39 56.82

Balance sheet

------------------- in Rs. Cr. -------------------

Britannia Nestle

GlaxoSmith

ConMavens Biotech

Kwality

Dairy

Mar '08 Dec '08 Dec '07 Mar '08 Mar '07

21


22/47

Sources Of Funds

Total Share Capital 23.89 96.42 42.06 10.99 18.20

Equity Share Capital 23.89 96.42 42.06 10.99 18.20

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 731.92 376.93 604.29 3.39 1.99

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 755.81 473.35 646.35 14.38 20.19

Secured Loans 1.94 0.82 0.00 0.00 13.79

Unsecured Loans 104.16 0.00 0.00 0.00 0.85

Total Debt 106.10 0.82 0.00 0.00 14.64

Total Liabilities 861.91 474.17 646.35 14.38 34.83

Britannia Nestle

GlaxoSmith

Con

Mavens

Biotech

Kwality

Dairy


Application Of Funds

Gross Block 453.181,404.8

5523.68 4.52 17.18

Less: Accum. Depreciation 212.19 651.85 297.65 0.39 10.28

Net Block 240.99 753.00 226.03 4.13 6.90

Capital Work in Progress 9.69 109.17 17.31 0.53 0.00

Investments 380.83 34.90 297.84 0.37 0.00Inventories 301.53 434.91 194.82 5.95 17.91

Sundry Debtors 46.33 45.59 27.36 2.84 24.02

Cash and Bank Balance 43.54 12.66 32.17 0.10 0.51

Total Current Assets 391.40 493.16 254.35 8.89 42.44

Loans and Advances 163.22 162.67 62.15 1.17 16.96

Fixed Deposits 0.23 181.03 61.50 0.00 0.68

Total CA, Loans & Advances 554.85 836.86 378.00 10.06 60.08

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 247.02 582.44 243.65 0.02 31.43Provisions 100.65 677.32 29.17 0.69 0.69

Total CL & Provisions 347.671,259.7

6272.82 0.71 32.12

Net Current Assets 207.18 -422.90 105.18 9.35 27.96

Miscellaneous Expenses 23.23 0.00 0.00 0.00 0.00

Total Assets 861.92 474.17 646.36 14.38 34.86

Contingent Liabilities 169.55 84.90 7.03 0.00 11.78

Book Value (Rs) 316.37 49.09 153.69 13.09 11.09

22


23/47

Profit & Loss account

------------------- in Rs. Cr. -------------------

Britannia NestleGlaxoSmith

Con

Mavens

Biotech

Kwality

Dairy


Income

Sales Turnover 2,617.664,472.0

41,429.97 20.77 149.61

Excise Duty 29.80 143.39 122.09 0.00 0.00

Net Sales 2,587.864,328.6

51,307.88 20.77 149.61

Other Income 20.12 29.88 31.67 0.12 0.07

Stock Adjustments -17.05 31.11 27.34 0.25 6.81

Total Income 2,590.934,389.6

41,366.89 21.14 156.49

Expenditure

Raw Materials 1,546.742,153.8

5471.61 0.00 141.75

Power & Fuel Cost 22.78 159.76 30.44 0.02 3.22

23


24/47

Employee Cost 90.53 314.58 154.94 0.14 0.86

Other Manufacturing Expenses 222.18 73.46 113.41 19.71 0.64

Selling and Admin Expenses 382.26 736.73 270.50 0.27 1.11

Miscellaneous Expenses 74.00 81.40 32.03 0.06 0.37

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Total Expenses 2,338.493,519.7

81,072.93 20.20 147.95

Britannia NestleGlaxoSmith

Con

Mavens

Biotech

Kwality

Dairy


Operating Profit 232.32 839.98 262.29 0.82 8.47

PBDIT 252.44 869.86 293.96 0.94 8.54

Interest 9.73 1.64 4.61 0.00 1.91

PBDT 242.71 868.22 289.35 0.94 6.63

Depreciation 29.08 92.36 43.49 0.09 0.89

Other Written Off 0.00 0.00 0.00 0.00 0.08

Profit Before Tax 213.63 775.86 245.86 0.85 5.66

Extra-ordinary items 18.64 0.00 0.02 0.00 0.00

PBT (Post Extra-ord Items) 232.27 775.86 245.88 0.85 5.66

Tax 41.26 238.74 82.46 0.30 1.93

Reported Net Profit 191.00 534.08 162.68 0.54 3.73

Total Value Addition 791.74

1,365.9

2 601.32 20.21 6.20

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 43.00 409.77 50.47 0.39 0.00

Corporate Dividend Tax 7.31 69.64 8.58 0.00 0.00

Per share data (annualised)

Shares in issue (lakhs) 238.90 964.16 420.56 109.92 182.00

Earning Per Share (Rs) 79.95 55.39 38.68 0.49 2.05

Equity Dividend (%) 180.00 425.00 120.00 3.00 0.00

Book Value (Rs) 316.37 49.09 153.69 13.09 11.09

24


25/47

TEN YEAR FINANCIAL STATISTICS : 1999 - 2008

Rs.million

As at / Year ended 31st

March1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Assets employed

Fixed assets less

Depreciation &

Amortisation

1,353 1,306 1,588 1,632 1,481 1,283 1,338 1,516 2,144 2,507

Investments 1,293 1,470 2,156 3,104 2,969 2,913 3,301 3,599 3,200 3,808Net current assets 18 65 257 592 747 43 (485) 309 596 2,072

Miscellaneous

expenditure- 122 163 217 260 463 342 161 256 232

2,664 2,963 4,164 5,545 5,457 4,702 4,496 5,585 6,196 8,619

Financed by

Equity shares 186 279 279 269 259 251 239 239 239 239

Reserves & Surplus 1,308 1,586 2,123 3,430 3,653 4,059 4,196 5,252 5,909 7,319

Loan funds 1,170 1,098 1,762 1,846 1,545 392 61 94 48 1,061

2,664 2,963 4,164 5,545 5,457 4,702 4,496 5,585 6,196 8,619

Profits and

appropriations

Sales 10,301 11,698 13,325 14,510 13,491 14,705 16,154 18,179 23,171 26,177

Profit before

Depreciation,

Amortisation

and Tax

735 962 1,369 1,630 1,722 2,251 2,645 2,218 1514 2,723

Depreciation and 159 172 189 240 261 224 190 217 253 291

25


26/47

Amortisation

Profit before tax and

Exceptional items576 790 1,180 1,390 1,461 2,027 2,455 2,001 1,261 2,432

Exceptional items - (19) (41) 1,201 12 (183) (252) 6 (77) (109)

Profit before tax * 576 771 1,139 2,591 1,473 1,844 2,203 2,007 1,184 2,323

Taxation 180 261 434 559 482 656 715 543 108 413

Profit after tax 396 510 705 2,032 991 1,188 1,488 1,464 1,076 1,910

Dividends 102 125 153 201 251 272 334 358 358 430

Tax on dividend 11 14 16 - 32 35 47 50 61 73

Debenture Redemption

Reserve- - 47 14 18 - - - - -

Retained earnings 283 371 489 1,564 692 910 1,117 1,056 657 1,407

26


27/47

Cash flows

------------------- in Rs. Cr. -------------------

BritanniaMavens

Biotech

Mount

Everest

GlaxoSmith

Con

Nestle

Mar '08 Mar '08 Mar '08 Dec '08 Dec '08

Net Profit Before Tax 12 mths 12 mths 12 mths 12 mths 12 mths

Net Cash From Operating

Activities232.26 0.84 -6.17 284.09 772.83

Net Cash (used in)/from

Investing Activities63.13 0.11 -10.23 130.67 723.57

Net Cash (used in)/from

Financing Activities -130.31 -0.12 -69.84 23.38 -251.92

Net (decrease)/increase In Cash

and Cash Equivalents53.08 0.00 71.23 -54.57 -375.22

Opening Cash & Cash

Equivalents-14.10 -0.01 -8.84 99.48 96.43

Closing Cash & Cash

Equivalents

The Directors present their Annual Report together with the Statement

of Accounts for the year ended March 31, 2008.

1. FINANCIAL RESULTS

27


28/47

Rs. Mn

Particulars Year Year

ended 31st ended 31st

March 08 March 07

Gross Turnover and Other 26,679 23,487

Income

Profit before Finance Cost, 2,820 1,603

Depreciation & amortisation

and Exceptional items

Finance Cost 97 89

Profit before Depreciation 2,723 1,514

and Exceptional Items

Depreciation and 291 253

Amortisation

Exceptional items 109 77

Profit before tax 2,323 1,184

Less: Tax 413 108

Net Profit 1,910. 1,076

Add: Profit brought forward 600 500

Profit available for 2,510 1,576

appropriation

Less: Dividend on Equity 430 358

Shares

Less: Tax on Dividend 73 61

Less: Transfer to General 1,407 557

Reserve

Balance carried forward to 600 600

Balance Sheet

2. COMPANY PERFORMANCE

For the year ended 31st March, 2008, your Company achieved a sales growth of 17.5% on an


28


29/47

increased 77.5% to Rs. 1,910 Mn compared to Rs. 1,076 Mn in 2006-07. Operating margin


The Company witnessed all round growth in key categories with Biscuits recording sales of

Rs. 23,299 Mn. Bread, Cake and Rusk business crossed the Rs. 2,700 Mn mark during 2007-

08. This business has doubled in two years.


double digit growth, with Tiger and Good Day growing in excess of 20%. Your Companys

innovation forays have successfully addressed new benefit clusters and Nutri Choice

Digestive has claimed its position in the health and vitality space. Your Company

continues to maintain its leadership edge in 6 out of 7 key product segments, the only

exception being Glucose.

The business continued to face inflationary pressure in key raw materials such as wheat

flour, refined palm oil, skimmed milk powder and other dairy products, as well as energy

costs. These were more than offset on the cost side through operational and procurement

efficiencies, productivity improvements, cost reduction programs and on the revenue side

through improved product mix and higher realisation, aided by strong consumer off take.

Exceptional items for the year include Rs. 130.5 Mn towards amortisation of VRS costs.

Earnings per share is Rs. 80 compared to Rs. 45 last year.

3. DIVIDEND

The Board of Directors is pleased to recommend a dividend of 180% onthe paid up equityshare capital of the Company, which works out to Rs.18 per share, for consideration and

29


30/47

approval by the shareholders at theAnnual General Meeting. The total payout amounts to Rs.

503 Mnncluding dividend distribution tax of Rs. 73 Mn.

4. BUSINESS OUTLOOK

After several years of strong GDP growth, the Indian economy is witnessing a slowdown.

We enter the new financial year, in the midst of a serious food crisis globally, which has led

to high inflation in all staples like wheat, rice, corn, pulses etc. We expect this supply

constrained inflationary environment to dampen industry growth in the coming year.

In this scenario, your Company will continue to pursue a strategy to identify and exploit

profitable growth opportunities by increasing the consumer preference and consumption of

Britannia brands, leveraging the three growth vectors of brand, geography and channel. The

key themes pursued by your Company are to increase brand relevance and

differentiation, improve availability, structurally building capability and efficiencies to be

cost competitive.

The overall level of brand and infrastructure investment has increased with both national and

regional players pursuing aggressive growth in an increasingly competitive market.

From a consumer perspective, several new dimensions have opened up as others have gained

strength, spurred by lifestyle and life stage choices. Your Company will continue to focus on

providing a range of enjoyable and healthy choices to consumers.

5. BRAND INVESTMENT

All Power Brands - Tiger, Good Day, Milk Bikis, Treat, MarieGold, 50:50 and NutriChoice

saw significant investment in increasing preference and purchase and secured double digit

growth.

Your Company also introduced several new and renovated offerings in Tiger, Good Day,

Treat and MarieGold. The health and nutrition platform was buttressed by Tiger Banana with

iron-zor, fortified Milk Bikis, renovated MarieGold and NutriChoice Digestive. To tap the

more indulgent consumers, your Company launched Good Day Classic Cookies,

while continuing to roll out individual consumption packs at the highly affordable Rs. 5 price

point.

30


31/47

The Bread, Cake and Rusk portfolio was strengthened with the successful relaunch of

Breads, fortified with vitamins and minerals, positioning them firmly as the healthy start to

your day. This innovation combined with relevant consumer activation in key markets has

seen a 30%+ growth in the Bread, Cake and Rusk business.

6. INTELLECTUAL PROPERTY RIGHTS (IPR)

Last year we reported the creation of the IPR Committee of the Board to monitor and direct

the Companys IPR. The key issue addressed by the Committee was the unauthorised use by

Generate Biscuit, a subsidiary of Groupe Danone, of your Companys Tiger brand in five

countries and registration in a large number of other countries. Based on legal advice, your

Company initiated proceedings against Generale Biscuit, and its

Associates in Singapore and Malaysia. Further, during the year, Groupe Danone divested its

biscuit business worldwide (with the exception of India and Latin America) including

Generale Biscuit, in favour of M/s Kraft Inc. USA and your Company continues to pursue the

return of its Tiger IPR under the direction of the Committee.

7. MANUFACTURING OPERATIONS

Following the significant addition to manufacturing capacity in the previous year, the focus

in 2007- 08 was to increase responsiveness and cost effectiveness of the supply chain.

Several technology innovation projects to secure cost and quality advantages and support

introduction of differentiated products were completed. New technology based products were

successfully manufactured using equipment designed internally. During the year your

Company filed for 2 patents.

Uttarakhand factory continued to perform at high efficiency levels and reached full capacity

utilisation of 5,000 Tonnes/month. Overall conversion costs were reduced due to efficiency

and productivity improvements in manufacturing. Capacity for Bread, Cakes and Rusks was

also expanded with a greenfield, state of the art, cake manufacturing facility in Assam.

With a view to optimise capacities and manufacturing cost, your Company, in April 2008,

offered a Voluntary Retirement Scheme (VRS) to workmen at its Chennai unit. The same

31


32/47

was accepted by all the workmen and consequently manufacturing operations have been

suspended.

8. QUALITY STANDARDS

Notable progress was made in quality, the drive for ongoing quality training, including the

development of an e-learning portal. The vendor quality improvement program was

intensified and the continuous grinding in of quality practices at all manufacturing units

formed a key plank of building a quality culture. A retail audit system was rolled out to

monitor quality of products at point of sale.

9. INFORMATION TECHNOLOGY

Several initiatives were undertaken to enhance business performance, enabled by IT

infrastructure and processes. These included availability of timely and granular information

to improve planning and performance measurement in manufacturing, logistics, distribution,

sales and quality.

Information protection infrastructure and systems were significantly strengthened. With the

objective of securing the best IT competencies, higher service levels for users, better

infrastructure management and inflation proofing cost, IT was outsourced in its entirety to

Hewlett Packard (HP) with a lock in period of 3 years.

10. ENVIRONMENT AND SAFETY

The drive to reduce energy consumption through process innovations and technology

upgradation continued during the year. Burner efficiency improvement was achieved through

use of magnetic resonance energisers for fuel.

Recycling of the waste heat was extended to manufacturing locations as also the usage of

alternate energy sources like gas which was extended wherever available, including Delhi

factory as well as contract packers.

Your Company has filed an application for availing carbon reduction benefits under the

Clean Development Mechanism of the Ministry of Environment and Forests, Government of

32


33/47

India as part of the United Nations Framework for Climate Change Control (UNFCCC) for

the Delhi factory.

11. CORPORATE SOCIAL RESPONSIBILITY

The partnership your Company has created with Global Alliance for Improved Nutrition

(GAIN) and the Naandi Foundation to supply iron fortified Tiger biscuits to supplement the

Mid-Day Meal program in schools, has been recognised as a unique program globally by

GAIN. This prompted the World Bank Institute to write a case study and your Company was

invited to make a commitment to the Clinton Global Initiative, a non-partisan catalyst for

action that brings together a community of global leaders to devise and implement solutions

for some of the worlds pressing challenges like nutrition. Iron deficiency among Indian

children is a key cause of school dropouts as well as decreased productivity. Based on the

experience from the Britannia-GAIN-Naandi partnership, your Company created a new

offering for all consumers - Tiger Banana, a delightful banana biscuit fortified with vitamins

and minerals.

In keeping with its core essence of Swasth Khao Tan Man Jagao, your Company constantly

strives to find sustainable opportunities to drive home the message of nutrition and good food

habits among children at the right age. Britannia is committed to help secure every childs

right to growth and development through good food everyday. Its largest power brand, Tiger,

is also being rolled out, fortified with iron.

Your Company was also the first in the industry to remove trans fat from most its biscuits as

yet another meaningful step in offering products that are both healthy and enjoyable.

12. PENSION

The Britannia Industries Limited Covenanted Staff Pension Fund (Trust) received a Show

Cause Notice from the Commissioner of Income Tax, Kolkata, asking the Trust to show

cause why the recognition granted to the Trust should not be withdrawn for refund of excess

contribution of Rs. 121.2 Mn to the Company. The matter has been dealt with in note No. 29

of Schedule T to the Accounts, which is self explanatory.

13. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

33


34/47

Details of energy conservation, technology absorption, foreign exchange earnings and

outgoings in accordance with the provisions of clause (e) of sub-section (1) of Section 217 of

the Companies Act, 1956, read with the Companies (Disclosure of the Particulars in the

Report of Board of Directors) Rules, 1988, are given as an annexure to the Directors Report.

14. CONSOLIDATED FINANCIAL RESULTS

Your Company has prepared Consolidated Financial Statements in accordance with

Accounting Standard 21(AS-21) issued by the Institute of Chartered Accountants of India.

The Consolidated Statements reflect the results of the Company with that of its Subsidiaries,

Joint Ventures and Associates. As required by Clause 32 of the Listing Agreement with the

Stock Exchanges, the Audited Consolidated Financial Statements together with the Auditors

Report thereon are annexed and form part of this Annual Report.

The Consolidated turnover and net profits of the Company for the year ended 31st March,

2008 were Rs. 28,099 Mn and Rs. 1,774 Mn respectively.

15. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Your Directors present herewith a broad overview of the operations and financials of its

Subsidiaries, Joint Ventures and Associates. Subsidiaries

Investment and Holding Companies

M/s Boribunder Finance and Investments Private Limited (Boribunder), M/s Flora

Investments Company Private Limited (Flora) and M/s Gilt Edge Finance and Investments

Private Limited

(Gilt Edge) form the Investment Associates of your Company. During 2007-08, M/s

Boribunder Finance and Investments Private Limited (Boribunder) became a wholly owned

subsidiary of your Company.

The combined revenue and loss of investment companies for the year ended 31st March,

2008 was Rs. 24 Mn and Rs 14 Mn respectively. The losses are due to provision for

diminution in value of investments.

Further, pursuant to Section 4 of the Companies Act, 1956, the following companies

engaged in manufacture of biscuits at various locations are also deemed to be subsidiaries of

34


35/47

your Company. The Gross Income and Net Profit of the said subsidiaries during 2007-08 are

as under:

Name of Subsidiary Gross Net Profit/ Income (Loss)

Rs.Mn Rs.Mn

International Bakery 106 3.5

Products Limited, TC

Balam, Tamil Nadu

J B Mangharam Foods 98 (7.4)

Private Limited, Gwalior

Manna Foods Private 30 1.6

Limited, Bangalore

Ganges Vally Foods 96 0.6

Private Limited, Kolkata

Sunrise Biscuit 83 (0.3)

Company Private Limited, Guwahati

Britannia and Associates (Mauritius) Private Ltd.

Britannia and Associates (Mauritius) Private Ltd, (BAMPL) a Company formed in Mauritius

is the holding Company of Britannia and Associates (Dubai) Private Co. Ltd, (BADCO) a

Jebel Ali Free Zone Company, which in turn holds strategic investments in Strategic Food

International Co. LLC, Dubai and Al Sallan Food Industries Company SAOG, Oman.

The combined revenue and loss of the holding companies for the year ended 31st December,

2007 was USD 0.62 Mn and USD 0.77 Mn respectively.

Joint Ventures

Britannia New Zealand Foods Private Limited (BNZF) BNZF, the Joint Venture with M/s

Fonterra Co-operative Group Limited of New Zealand is engaged in the business of dairy

products, comprising cheese, skimmed milk powder, butter and ghee. BNZF brands are

available nationally and lead the cheese segment. For the year ended 31st March 2008, BNZF

recorded a turnover of Rs. 1,424 Mn and incurred a net loss of Rs. 51 Mn compared to a

turnover of Rs. 1,186 Mn and a net loss of Rs. 112 Mn in the previous year.

35


36/47

Strategic Foods International Co. LLC, Dubai (SFIC) Your Company acquired 70% stake in

SFIC in March 2007. For the year ended 31st December, 2007, SFIC recorded a turnover of

AED 104.02 Mn and operating profit (before finance charges and depreciation) of AED 6.48

Mn and Net Loss of AED 3.14 Mn. During 2007 the business

encountered severe cost challenges due to unprecedented increases in market prices of all key

commodities like flour, skimmed milk powder, etc. The Company has implemented several

cost effectiveness programs which, together with efficient buying, managed to contain part of

the input cost inflation.

Al Sallan Food Industries Company SAOG, Oman (Al Sallan) Your Company acquired

65.5% stake in Al Sallan in March 2007. Al Sallan recorded a turnover of RO 3.24 Mn for

the year ended 31st December, 2007.

Both these acquisitions have given your Company the opportunity, infrastructure and

competence to effectively compete in the rapidly growing markets of the Middle East.

Daily Bread Gourmet Foods (India) Private Limited (Daily Bread) Daily Bread, another

acquisition made last year, is engaged in the business of premium bakery products. The

Company registered a growth of 47% last year. It has continued to focus on expanding its

retail presence as well as drive institutional business through addition of new customers. As a

part of this strategy, new manufacturing facilities were set up in Delhi and Hyderabad while

expanding capacity at Bangalore.

Welfare Companies

M/s Britannia Employees General Welfare Association Private Limited, M/s Britannia

Employees Educational Welfare Association Private Limited and M/s Britannia Employees

Medical Welfare Association Private Limited are the three other associates of your Company.

These are companies limited by guarantee and have no share capital. These have been set up

for general, educational and medical welfare of the employees of your Company.

16. CORPORATE GOVERNANCE

36


37/47

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, a

separate report on Corporate Governance along with the Auditors Certificate on its

compliance is attached to this Report.

17. DIRECTORS

Consequent to taking over as Chairman of the Finance Commission constituted by the

Government of India, Dr. Vijay Kelkar resigned as Director of your Company with effect

from 31st December, 2007. Your Board records its deep gratitude and appreciation for the

various contributions made by Dr. Kelkar during his association with the Company.

Mr. Georges Casala resigned as a Director of your Company with effect from 28th May,

2008. Your Board records its deep gratitude and appreciation for the various contributions

made by Mr. Casala during his association with the Company.

Your Board appointed Mr. Philippe Loic Jacob as an Additional Director at its meeting on

28th May, 2008. Mr. Jacob will hold office upto the date of the forthcoming Annual General

Meeting of the Company.

In accordance with the provisions of the Companies Act 1956 and the Articles of Association

of the Company, Mr. S S Kelkar, Mr. Pratap Khanna, Mr. Nusli N Wadia and Mr. Francois-

Xavier Roger, Directors, retire by rotation at the forthcoming Annual General Meeting and

are eligible for reappointment.

18. PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956,

read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the

Directors Report for the year ended 31st March, 2008 is also given in the annexure to this

report.

19. AUDITORS

M/s. Lovelock & Lewes retire in accordance with the provisions of the Companies Act,

1956. They have indicated their willingness to continue in office and are recommended for

reappointment as the Companys Auditors for the ensuing year.

20. DIRECTORS RESPONSIBILITY

37


38/47

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors,

based on representations from the Operating Management, confirm that:

I. In the preparation of annual accounts, the applicable accounting standards have been

followed and there are no material departures;

II. They have, in selection of the accounting policies, consulted the statutory auditors and

applied these policies consistently, making judgments and estimates that are reasonable and

prudent, so as to give a true and fair view of the state of affairs of the Company as on 31st

March, 2008 and of the profit of the Company for the year ended 31st March, 2008;

III. They have taken proper and sufficient care, to the best of their knowledge and ability, for

the maintenance of adequate accounting records in accordance with the provisions of the

Companies Act, 1956 for safeguarding the assets of the Company and for preventing and

detecting fraud and other irregularities;

IV. They have prepared the annual accounts on a going concern basis.

21. ACKNOWLEDGEMENTS

The Directors would like to thank all stakeholders, namely, customers, shareholders, dealers,

suppliers, bankers, employees and all other business associates for the continuous support

given by them to the Company and its management.

Top competitors of company

38


39/47

HERITAGE

PRIYAGOLD

PURE FOOD

PARLE-G

NESTLE

GALXOSMITH CON

Status of the competitors

Last Price Market Cap.

(Rs. cr.)

Sales

Turnover

Net Profit Total Assets

GlaxoSmith Con 930.95 3,915.16 1,592.30 188.33 646.36

Britannia 1,565.55 3,740.12 3,127.11 180.40 861.92

Lotte India 525.00 197.99 170.96 -2.14 77.67Heritage Foods 81.65 94.14 588.03 0.94 272.44

SKM Egg Product 18.10 47.66 123.90 10.50 82.15Agro Dutch Ind 11.45 38.43 143.47 -32.05 482.41

Sita Shree Food 10.35 22.81 95.08 1.39 56.82

Generally all organizations have competitors in the market. A particular organization always

comprises with other same business and according to market share we clarify the brand of

product is giving more challenge to my product.

I found many products which can be compared with Britannia Biscuit. As a conclusion I

found that particularly in my provided area Britannia is really doing well and its performance

is on surprising level. During the field work and after intensive study it was found that main

competitor of PRIYAGOLD biscuits is BRITANNIA as the market leader.

In my provided area the share of the market is as follows.

BRITANNIA 48%

PRIYAGOLD 20%

PARLE-G 16%

PURE FOOD 8%OTHERS 8%

39


40/47

When we compared with other businesses then we follow the quality, price, distribution

system, promotional strategy etc. of the competitors Britannia in this area is doing well.

So this is the comparison with other biscuits brands. According to our findings we found that

BRITANNIA is the market leader followed by BRITANNIA biscuits. These two biscuits

companies the lion's share in the 2,200 crore biscuits industry.

Expert views:

Britannia Industries-the market leader in the biscuits industry with a 34% share in value

terms-is back on the stock market analysts radar. After having been through uncertain times,

especially at the management level, analysts seem to be glad at the emerging clarity. This is

despite the biscuit industry facing intense competition and players like ITC and Priyagold

taking the battle to Britannia. Overall, in volume terms, the company was impacted as there

were supply constraints in the second half of FY08. Hence, when the industry grew by

around 7% (in volume terms) in FY08, Britannia recorded a 2.8% growth. This was largely

due to reduction in pack sizes across brands.

40


41/47

As players fight it across segments, Britannia has been concentrating on the premium

category where it recorded more than 20% growth in Goodday and Tiger brands in FY08. It

will work on extending the Tiger brand with new variants like Tiger Banana, Tiger Cream,

while also introducing newer Goodday variants. Analysts at Motilal Oswal Research expect

more lifestyle products, focus on modern retail and cost efficiencies ahead for Britannia.

Focus on the premium segment also allows the company to be flexible on pricing, thereby

protecting it against rising commodity prices. Recently, it undertook a 2-12% price hike

across brands by way of pack size reduction and absolute price increases in order to ward off

the continued rise in prices of wheat, vegetable oil and sugar. It reported a 350bp increase in

gross margins and 320bp increase in EBITDA margins for FY08.

Reduction in pack sizes helped here, as it cut material costs directly and also saw a 380bp

decline in excise duty. The fact that the company is sitting on a treasure trove in the form of

its real estate assets also attracts analysts. However, these investments do not directly

translate into earnings for Britannia. Also, analysts are now looking at the ability to deliver

price hikes on a consistent basis, and maintain margins as well, as its working capital

requirements have grown by three times in FY08. This, if not stemmed, could have a serious

dent on net earnings.

Product News

19 June 2009

We've made some changes to our mortgage range this week. Visit our mortgage section to get

a clear idea of what we can do for you.

We've also introduced two new fixed rate ISAs to expand our ISA range. Please be aware that

the products are limited issues and may be withdrawn at any time.

Of course it's not just our new products we're proud of! We're very proud of our continuing

range. Why not take a look at what we have to offer in

41
http://www.britannia.co.uk/home/_site/channels/mortgage/index.htmlhttp://www.britannia.co.uk/home/_site/channels/savings/tax-free-savings/index.htmlhttp://www.britannia.co.uk/home/_site/channels/mortgage/index.htmlhttp://www.britannia.co.uk/home/_site/channels/savings/tax-free-savings/index.html


42/47

SWOT ANALYSIS

Strength

Fulfill one of our Basic

Requirement among Air , Water ,

Food, Shelter

Widely accepted in all Generations

Easily available in various forms

Provide good Instant Remedy for

hunger in the form of readymade

food

Preserves the non seasonal food

and makes it available all

throughout the year

Weakness

Decreases nutritional value

Increases the cost of food product

Industry and technology requires

high investment

Regular usage of processed food

can cause alteration in health

42


43/47

Opportunities

Increase economy of India

Generate employment opportunity

Good quality of Goods

Provide competition to foreign

companies

Improve living standard

Provide goods to nation at cheaper

rate

Inflow of foreign reserve and funds

for the govt.(taxes)

Threats

Many companies are result oriented

Increase in pollution

Sometimes provide poor quality of

product for more profit

Lack of technology

Unable to utilize all the resources

efficiently

43


44/47

EXPORTS OF THE COMPANY

USA

GHANA

SAUDI ARABIA

KUWAIT

BAHRAIN

OATAR

SEYCHELLES

SINGAPORE

OMAN

UAE

44


45/47

SUGGESTIONS

1. Britannia Company must maintain good environment condition.

2. Company maintains proper usage of raw material value.

3. The company has to concentrate on nutritional value by that they will attract

more customers.

4. The company has to take control measures to reduction of cost.

5. Company must use the recent technology for increases the sales volume.

6. Company must decrease the cost of food product.

7. Company must follow the some measures to decrease in pollution .

CONCLUSION

45


46/47

Britannia is one of the biggest biscuit company in India. Britannia company

products are popular any where in India. Company having high volume assets

among its competitors. Company preserves the non-seasonal food and makes it

available all throughout the year. Company distributed dividend and company

growth have been increases year by year. Company has well dedicated

management team to efficiently lead the company always to the next level. So,

Britannia to hold their leadership positions in the market for long term. Finally

Britannia Company is the best company when compare to other companies.

BIBLIOGRAPHY

46


47/47

www. BRITANNIA.com

www.moneycontrol.com

www.financialexpress.com.

www.wikipedia.com

www.indianfinancelevel.com

www.companyreviews.com

www.webindia.com

www.businesstimes.com

24029653 company analysis report of britannia

Documents