A PROJECT ON BRITANNIA IN THE SUBJECT ADVANCED FINANCIAL ACCOUNTING SUBMITTED BY NAME: SOUMEET D. SARKAR ROLL NO.

: 041 DIVISIONS: A

UNDER THE GUIDANCE OF PROF. BHARAT PATEL TO UNIVERSITY OF MUMBAI FOR MASTER OF COMMERCE PROGRAMME (SEMESTER - I) YEAR: 2013-14

SVKMS NARSEE MONJEE COLLEGE OF COMMERCE &ECONOMICS VILE PARLE (W), MUMBAI 400056.

EVALUATION CERTIFICATE

This is to certify that the undersigned have assessed and evaluated the project on BRITANNIA submitted by student of M.Com. Part - I (Semester I) for the academic year 2013-14. This project is original to the best of our knowledge and has been accepted for Internal Assessment.

Name & Signature of Internal Examiner

Name & Signature of External Examiner

PRINCIPAL Shri. Sunil B. Mantri

DECLARATION BY THE STUDENT

I, student of M.Com. (Part I) Roll No.:041 hereby declare that the project titled BRITANNIA for the subject ADVANCED FINANCIAL ACCOUNTING submitted by me for Semester I of the academic year 2013-14, is based on actual work carried out by me under the guidance and supervision of PROF. BHARAT PATEL. I further state that this work is original and not submitted anywhere else for any examination.

Place: MUMBAI. Date:

(SOUMEET D. SARKAR) Name & Signature of Student

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ACKNOWLEDGEMENT It is indeed a great pleasure and proud privilege to present this project work. I thank my project guide and M-COM co-ordinator of SVKMS NARSEE MONJEE COLEGE OF COMMERCE AND ECONOMICS, VILE PARLE (WEST). Their co-operation and guidance have helped me to complete this project. I would sincerely like to thank the principal of our college Shri.Sunil B.Mantri for his support and guidance. I would also like to thank the college library and its staff for patiently listening and guiding me and finally. I would like to thank my family and friends who supported me in this project. THANK YOU.

CONTENT Sr. No. PARTICULARS CHAPTER I INTRODUCTION 1.1 1.2 1.3 1.4 1.5 1.6 Company Information Major Players & Market Share Pricing & Cost Sheet Milestones Achieved Products Available Product Information 6 8 9 11 18 12 Page No.

CHAPTER II DATA ANALYSIS & COLLECTION 2.1 2.2 2.3 2.4 2.5 2.6 Balance Sheet Profit & Loss A/c Statement of Cash Flow Comparative Balance Sheet Comparative Profit & Loss A/c Significant Ratios CHAPTER IV CONCLUSION 4.1 4.2 4.3 Comments Conclusion Biblography 37 40 42 23 25 27 30 32 34

INTRODUCTION:The story of one of India's favourite brands reads almost like a fairy tale. Once upon a time, in 1892 to be precise, a biscuit company was started in a non-descript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today. Initially, biscuits were manufactured in a small house in central Kolkata. Later, the enterprise was acquired by the Gupta brothers mainly Nalin Chandra Gupta, a renowned attorney, and operated under the name of " V . S . Brothers ". In 1918, C.H. Holmes, an English businessman in Kolkata, was taken on as a partner and the Britannia Biscuit Company Limited (BBCo) was launched. The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest in BBCo. Biscuits were in big demand during World War II, which gave a boost to the companys sales. The company name finally was changed to the current "Britannia Industries Limited" in 1979. In 1982 the American company Nabisco Brands Inc. became a major foreign shareholder. 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 Indian-ness 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 preeminent 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 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. At present, the company is growing at a steady rate, and is currently profitable. Between 1998 and 2001, the company's sales grew at a compound annual rate of 16% against the market, and operating profits reached 18%. More recently, the company has been growing at 27% a year, compared to the industry's growth rate of 20%. At present, 90% of Britannias annual revenue of Rs.22 billion comes from biscuits. Britannia is one of India's 100 Most Trusted brands listed in THE BRAND TRUST REPORT.
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Major Players in the Industry:1) BRITANNIA INDUSTRIES LTD. (BIL) 2) PARLE 3) ITC Ltd. 4) Surya Foods & Agro Ltd. (PRIYA GOLD)

Market Share:-

MARKET SHARE

BRITANNIA PARLE OTHERS

PRICING of the product has played an important role for the company to achieve a
major market share. For pricing company has taken into factors like fixed and variable costs, competition, company objectives, proposed positioning strategies, target group and willingness to pay. The pricing strategies adopted are:1) Competition Pricing:- They have set a price which is competitive when compared with competitors. 2) Product Line Pricing:- Priced different products within the same product range at different price points. The better the feature and the benefit given the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits. 3) Bundle Pricing:- The organisation bundles a group of products at a reduced price when providing family packs. 4) Value Pricing:- They have also used value based pricing. Britannia has worked a lot on fixing the price of its biscuits. It has packaged its products in various sizes and at various prices. Its biscuits ranges from Rs.10 to Rs.20.

Cost Sheet:-

Particulars
Cost of Production 1.00

Rs.

Company Profit

1.50

Packaging

0.50

Promotion

2.00

Transportation

1.00

Selling and Distribution

1.75

Cost to Distributor

7.75

Distributors Profit

0.75

Cost to Wholesaler

8.50

Wholesaler Profit

0.50

Retailer Cost

9.00

Retailer Profit

1.00

MRP

10.00

10

MILESTONES ACHIEVED:-

1892

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

Kolkata.

1910 1921

2. Advent of electricity sees operations mechanized. 3. Imported machinery introduced; Britannia becomes the first company
east of the Suez to use gas ovens.

1939 44

4. Sales rise exponentially to Rs.16,27,202 in 1939. 5. During 1944 sales ramp up by more than eight times to reach
Rs.1.36 crores.

1975

6. Britannia Biscuit Company takes over biscuit distribution from

Parry's.

1978 1979 1983 1989 1992 1993

7. Public issue - Indian shareholding crosses 60%. 8. Re-christened Britannia Industries Ltd. (BIL). 9. Sales cross Rs.100 crores. 10. The Executive Office relocated to Bangalore. 11. BIL celebrates its Platinum Jubilee. 12. Wadia Group acquires stake in ABIL, UK and becomes an equal
partner with Group Dan-one in BIL.

1994

13. Volumes cross 1,00,000 tons of biscuits .

11

1997

14. Re-birth new corporate identity 'Eat Healthy, Think Better' leads to
new mission: 'Make every third Indian a Britannia consumer'.

15. BIL enters the dairy products market. 1999 16. "Britannia Khao World Cup Jao" - a major success profi t up by
37%.

2000

17. Forbes Global Ranking - Britannia among Top 300 small

companies.

2001

18. BIL ranked one of India's biggest brands. 19. No.1 food brand of the country. 20. Britannia Lagaan Match: India's most successful promotional
activity of the year.

21. Maska Chaska: India's most successful FMCG launch.

2002

22. BIL launches joint venture with Fonterra, the world's second largest
dairy company.

23. Britannia New Zealand Foods Pvt. Ltd. is born. 24. Rated as 'One amongst the Top 200 Small Companies of the
World' by Forbes Global.

25. Economic Times ranks BIL India's 2nd Most Trusted Brand. 26. Pure Magic - Winner of the World star, Asia star and India star
award for packaging.

2003

27. 'Treat Duet'- most successful launch of the year. 28. Britannia Khao World Cup Jao rocks the consumer lives yet again.

2004

29. Britannia accorded the status of being a 'Superbrand'. 30. Volumes cross 3,00,000 tons of biscuits.
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31. Good Day adds a new variant Choco-nut in its range. 2005 32. Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes the
popular chant.

33. Britannia launched 'Greetings' range of premium assorted gift

packs.

34. The new plant in Uttaranchal, commissioned ahead of schedule. 35.The launch of yet another exciting snacking option - Britannia 50-50
Pepper Chakkar.

2006

36. Britannia re-launched Nutri-Choice Hi-Fibre Digestive biscuits in an

international large sized biscuit pack.

37. Britannia acquires 51% stake in Bangalore based bakery foods

retailer Daily Bread.

2007

38. Britannia industries formed a joint venture with the Khimji Ramdas
Group and acquired a 70% beneficial stake in the Dubai based Strategic Foods International Co. LLC and 65.4% in the Oman based Al Sallan Food Industries Co.

39. Britannia Nutri-Choice Sugar out range introduced - 1st of its kind
of biscuits to be launched in India with "No Added Sugar" (Variants - Chocolate Cream, Orange Cream, and Lite-time).

2008

40. Britannia Nutri-Choice 5 Grain biscuits launched - Biscuits with

the goodness of 5 health cereals, and sweetened with natural honey. Britannia Nutri-choice promised consumers "Bhook Bhagao, Kuch Healthy Khao".

41. Britannia launched Iron fortified 'Tiger Banana' biscuits, 'Good

Day Classic Cookies' , Low Fat Dahi and renovated ' Marie-Gold'.

2009

42. Britannia launches Acti-Mind A first of its kind milk based health
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drink for kids, which helps improve mental sharpness. Launch of Acti-Mind marked Britannia's entry into the beverage segment and has further extended its creed of 'Eat Healthy, Think Better' to 'Drink Healthy, Think Better' as well.

43. Britannia Nutri-Choice Nature Spice Crackers launched - Your

favorite Cream Crackers, now made even more exciting with the addition of Sabut, Ajwain and Jeera spices.

44. Britannia takes full control of Daily Bread. 45. Britannia Industries buys out New Zealand's Fonterra from
existing dairy joint venture, Britannia New Zealand Foods (BNZF). BNZF became a 100% Britannia subsidiary and was renamed Britannia Dairy Private Limited (BDPL).

46. Recognizing the changing global trends & health benefits of

removing trans-fats, Britannia is the first bakery brand in India to remove trans-fats from its products.

47. Wadia Group acquired stake holdings from Group Dan-one and
becomes the single largest shareholder in BIL.

2010

48. 50-50 Maska Chaska was re-launched with a new masaaledar twist a delightful blend of butter and imported flavours along with sprinkling of masala in September 2010.

49. Tiger enters the cookies category, with the launch of crunch cookies
in october. These cookies are not only high on de-light but also high on energy and have been created keeping in mind the needs of today's kids. These delightful cookies come in two exciting variants Fruit & Nut and Choco-chips and at an affordable price point of just Rs.5.

50. Brand Nutri-Choice, in keeping with its track record of launching

differentiated healthy snacks, launched diabetic friendly essentials on

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14th November, a day that is world over recognized as World Diabetes Day. The range comprised of 2 variants - Oats cookies and Ragi cookies - and is available in top Indian cities.

51. Britannia was presented the Master Brand 2010 Award by CMO
Council in November 2010.

52. Rotary Club of Chennai awarded CSR Award to Britannia in

November, for our work in nutrition.

2011

53. Always committed to constant innovation, Britannia launched

Britannia Healthy Start in Mumbai in January 2011. Specially designed with Indian tastes in mind, Healthy Start is a complete range of ready-to-cook breakfast mixes of Upmas, Pohas, Porridges and Oats that are healthy, delicious, and take just 5 minutes to cook. This is the only product range in its category that combines the natural nutrition of multi-grains, 100% real vegetables, pulses and nuts all in one pack.

54. Britannia received the Most Respected Company Award 2011

from Business World.

55. Bourbon received the Most Popular Confectionery Product

Preferred by Youth (Biscuit) Award.

56. IMCRBNQA (Indian Merchant Chambers Ramakrishna Bajaj

National Quality Award) conferred the Manufacturing Performance Excellence Trophy a National Quality Award for the 2010 cycle, for Britannia Corporate Office (Bangalore), Britannia Industries Ltd. (Rudrapur) and Sunandram Foods Pvt Ltd (Mangaldoi, Guwahati).

57. Britannia further enhanced its foray into healthy milk based drinks
by launching Tiger-Zor Choco milk & Tiger-Zor Badam milk in May 2011. These are delicious milk based beverages fortified with 5

15

active nutrients that help in the overall development of mind and body.

58. Britannia Bread launched its new range of Health Breads in Delhi
in November. The range consists of Honey & Oats Bread, MultiGrain Bread, 100% Whole Wheat Bread and Multi-Fiber Bread.

59. Delhi factory was adjudged as the winner for Outstanding

Performance in Food Safety Excellence in the category of 'Large Food Businesses- Manufacturing', by CII. JBM Foods Pvt. Ltd. was also recognized with Re-commendation Certificate for Strong Commitment to Excel in the Category of 'Medium Food Businesses- Manufacturing' for the year 2011. The awards were given at the CII National Quality Summit held at Bangalore on 1st December 2011.

60. BRITANNIA was honoured with CREATIVE HR PRACTICES

AWARD by Employer Branding Institute India, on the occasion of 6th Employer Branding Awards ceremony held on the 10th of December 2011 at Hotel Taj Deccan, Hyderabad.

2012

61. IMC Ramakrishna Bajaj National Quality Award 2011 was

awarded to Britannia Industries Limited, Bangalore, Bidadi, Delhi, Gwalior & Khopoli in the manufacturing category, at the Fifteenth IMC Ramakrishna Bajaj National Quality Awards and IMC Juran Quality Medal ceremony held in Mumbai on 6th April 2012.

62. Britannia Industries Limited Khurda was commissioned on 17th

April 2012.

63. The Modern Trade team of Britannia was honoured with

Winner BEST BAKERY SUPPLIER award for the year 201112 , at the 1st SPENCER'S Best Supplier Awards 2012 on 22nd June.

16

64. Britannia was awarded the Global Performance Excellence Award

(GPEA) by Asia Pacific Quality Organization (APQO) at the 18th APQO International Conference on Quality in Colombo, Sri Lanka on October 14. Britannia won this "Best in Class" award, an international recognition for its manufacturing units and the overall processes of performance excellence adopted by the company. Britannia is the only Indian food and manufacturing company to receive this award.

65. Britannia won Global award given out by 'World Quality

Congress' at their award ceremony at Mumbai held on 22nd and 23rd November 2012.

2013

66. On the 17th January 2013, Britannia Industries Ltd, Kolkata was
selected the winner of the GOLDEN PEACOCK NATIONAL QUALITY AWARD for the year 2012 by the awards jury under the chairmanship of Justice P. N. Bhagwati, former Chief Justice of India and Member, UN Human Rights Commission.

67. Britannia was awarded "Manufacturing Supply Chain Award for

End to End Customer Solution Excellence" on 23rd January 2013 at the Asia Manufacturing Supply Chain Summit (AMSCS) held in Mumbai.

68. Britannia bagged two National Quality Excellence Awards for

2013 - one for Best End-to-End Customer Solution (Supply Chain), and the second, for Planning, Processes and Systems - on 14th February 2013 at Taj Lands End, Mumbai.

69. Britannia won the Namma Bengaluru Award for 2012, at the
award ceremony held on 16th March 2013 in Bengaluru, in the Corporate Social Responsibility category for initiating and implementing Solid Waste Management.

17

70. Britannia bagged the prestigious IWLF Award for 'Solid Waste
Management Project' at the International Women Leadership Forum held in Mumbai on 25th April 2013.

PRODUCTS AVAILABLE:-

GLUCOSE BISCUITS 1) TIGER 2) CHOTA TIGER 3) TIGER CHAI BISKOOT 4) TIGER ROSEMILK CREAM 5) TIGER BRITA ENERGY POPS 6) TIGER CHOCLATE CREAM 7) TIGER ORANGE CREAM 8) TIGER COCONUT ENERGY 9) TIGER ELAICHI CREAM 10) TIGER KESAR CREAM 11) TIGER BANANA

CREAM BISCUITS 1) TREAT CHOCO GELO 2) TREAT DELICIOUS DATES 3) TREAT APPLE PUNCH 4) TREAT FLAVOURED TANGY ORANGE 5) TREAT STRAWBERRY FLAVOURED SURPRISE 6) BOURBORN TREAT 7) TREAT ELAICHI FON
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8) TREAT JIM JAM 9) TREAT MANGO MISCHIEF 10) TREAT MASTI ORANGE 11) TREAT PINEAPPLE PRANK

NUTRI CHOICE BISCUITS 1) NUTRI CHOICE 5 GRAINS 2) NUTRI CHOICE DIGESTIVE 3) NUTRI CHOICE CREAM CRACKER 4) NUTRI CHOICE THIN ARROWROOT 5) NUTRI CHOICE SUGAROUT CHOCLATE 6) NUTRI CHOICE SUGAROUT LITETIME 7) NUTRI CHOICE SUGAR OUT ORANGE CREAM

MARIE BISCUITS 1) MARIE GOLD 2) VITA MARIE GOLD

MILK BISCUITS 1) MILK BIKIS 2) MILK BIKIS CREAM

GOOD DAY BISCUITS 1) GOOD DAY CHOCONUT 2) GOOD DAY BUTTER SCOTCH 3) GOOD DAY HONEY & RAISIN 4) GOOD DAY CHOCLATE CHIP
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5) GOOD DAY RICH BUTTER COOKIES 6) GOOD DAY RICH CASHEW COOKIES 7) GOOD DAY RICH PISTA BADAM

50-50 BISCUITS 1) 50-50 2) 50-50 MASKA CHASKA 3) PEPPER CHAKKAR

LITTLE HEARTS 1) LITTLE HEARTS CLASSIC

PURE MAGIC 1) PURE MAGIC

1. 50-50:- Brand name 50-50 launched in 1993, 50-50 because of its "Hatke" taste and
youthful appeal quickly emerged as the leader of category with more than one-fourth of market share. In 2001, the delicious Maska Chaska was launched as a variant of the original brand and became an instant success. In 2008, 50-50 sharpened its focus on housewives and positioned as a snack. 50-50 snacks the latest entry will give housewives one more reason to be happy snack happy. Being aware of the needs of his consumers, 50-50 snacks comes in three unique international flavors- Italiano Pizza, Swiss cheese & Chilly and Chinese Hot & Sweet. 50-50 snacks bridges the gap between biscuits & snacks and tries to bring the best of many worlds - biscuits bhi Snack bhi, Sweet bhi Spicy bhi, Baked bhi Chatapata bhi. The new product being baked and in bag format allows guilt free snacking both in and out of home and thus making housewives "Snack happy".

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2. GOOD DAY:- 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 Choco-chips in 2000 and Good Day Choco-nut in 2004. This rich cookie 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 among the fastest growing brands in Britannia's portfolio and it has been the leader in the cookies category ever since its launch. The brand is synonymous with everyday treats that infuse happiness into people's 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 un-restrained joy that is the message of this new campaign. The new TC ad is the un-controllable 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.

3. TIGER:- Britannia Tiger, one of the biggest brands in the kids segment, has reinvented itself to revolutionize the concept of kids nutrition in the country. Equipped with a new vision of leading the kids nutrition space, britannia tiger has revamped its offerings to embody fun and energy on one hand and health and nutrition on the other. Enriched with growth nutrients across all its variants, britannia tiger comes with the
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credo of 'Roz Badho'. Aimed at addressing every mothers concern on their kids nutrition, britannia tiger has undergone a considerable shift in its product offering, transforming itself into a healthier and tastier avatar. Identifying the role of biscuits as a important component of daily food and a major carrier of nutrition, britannia tiger fortifies itself, across categories, with growth nutrients like iron, calcium, folic acid, vitamin A and D packed with 25% of daily growth nutrients (every 100 gms).

4. MILK BIKIS:- Milk Bikis, the favourite growth partner of kids, now brings greate r
value and delight to all with its new product and pack design. Recently re-launched in its existing Southern & Eastern markets, and extended across India, the new milk bikis is all set to add excitement and appeal to nutritious food. Whoever said that good food needs to look dull and boring, will just have to take a look at milk bikis. With a unique and attractive honeycomb design and an enhanced product experience, the new biscuit prompts the kids will love it reaction amongst mothers. The milk goodness in the recipe is now enhanced with smart nutrients & 4 vital vitamins, iron and iodine, proven to aid mental and physical development in growing kids. The premium packaging, besides appealing to kids, also ensures that the biscuits remain fresh and crisp. So whether its breakfast time or snack time at school, rest assured that kids will look forward to munching these crunchy, milky biscuits which even helps in their development.

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DATA ANALYSIS AND COLLECTION:-

Britannia Annual Report 2011-12

BALANCE SHEET

Rs. in crores

As at

31 March 2012

31 March 2011

I. EQUITY AND LIABILITIES (1) Shareholders funds (a) Share capital (b) Reserves and surplus 23.89 496.15 520.04 (2) Non-current liabilities (a) Long-term borrowings (b) Deferred tax liabilities (net) (c) Other long-term liabilities (d) Long-term provisions 28.15 8.16 19.91 116.82 173.04 (3) Current liabilities (a) Trade payables (b) Other current liabilities (c) Short-term provisions 336.20 518.26 124.80 979.26 1,672.34 239.68 119.38 96.65 455.71 1,482.49 430.57 6.24 15.99 122.68 575.48 23.89 427.41 451.30

23

II. ASSETS (1) Non-current assets (a) Fixed assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress 370.63 8.46 79.73 458.82 (b) Non-current investments (c) Long-term loans and adv. (d) Other non-current assets 218.40 125.02 12.12 298.68 5.02 11.70 315.40 308.94 142.13 12.12

(2) Current assets (b) Inventories (c) Trade receivables (d) Cash and bank balances (e) Short-term loans and adv.

210.54 382.28 52.14 30.94 182.08 857.98 1,672.34

236.06 311.20 57.26 28.75 70.63 703.90 1,482.49

24

Britannia Annual Report 2011-12

STATEMENT OF PROFIT AND LOSS

Rs. in crores

For the year ended

31 March 2012

31 March 2011

I. Revenue From Operations Sale of products Less: Excise duty Net sale of products Other operating revenues 5,005.66 (58.62) 4,947.04 27.15 4,974.19 II. Other Income III. Total Revenue (I + II) IV. Expenses: Raw materials including packaging materials consumed Purchase of stock-in-trade Changes in inventories of finished goods, work-in-progress and stock-in-trade Employee benefits expense Finance costs Depreciation and amortisation expense Other expenses Total Expenses V. Profit Before Tax (III IV) 145.87 38.07 47.32 1,369.34 4,780.35 252.37 119.93 37.75 44.59 1,107.77 4,074.38 198.06 529.53 (4.79) 410.31 (17.89) 2,655.01 2,371.92 58.53 5,032.72 4,230.59 (32.27) 4,198.32 25.20 4,223.52 48.92 4,272.44

25

VI. Tax Expense: (1) Current tax

Income tax Minimum alternative tax for earlier years Income tax for earlier years (2) Deferred tax

63.71 1.92 186.74

41.52 (13.91) 12.34 12.82 145.29

VII. Profit / (Loss) For The Year (V VI)

26

Britannia Annual Report 2011-12

CASH FLOW STATEMENT

Rs. in crores

For the year ended Cash Flows From Operating Activities Profit before tax Adjustments For: Depreciation and amortisation Provision / (reversal) for diminution in value of investments, net Profit on sale of investments, net Profit on sale of fixed assets, net Dividend income Interest income Interest expense Operating Profit Before Working Capital Changes (Increase) / decrease in inventories (Increase) / decrease in trade receivables (Increase) / decrease in loans and advances and other assets (Increase) / decrease in bank balances (other than cash and cash equivalents) Increase / (decrease) in liabilities and provisions

31 March 2012

31 March 2011

252.37

198.06

47.32 2.35

44.59 (1.78)

(9.10) (16.40) (0.19) (32.12) 38.07 282.30

(8.66) (12.80) (0.28) (24.84) 37.75 232.04

(71.08) 5.12 (62.70)

(42.86) (17.77) 72.55

(0.88)

3.13

107.54

31.71

27

Cash Generated From Operations Income taxes paid, net of refund Net Cash Provided By Operating Activities Cash Flows From Investing Activities Purchase of fixed assets ( including finance leased assets) Proceeds from sale of fixed asset Sale of investments, net Inter-corporate deposits placed, net Loans given to subsidiaries Loans repaid by subsidiaries Interest received Dividend received Net Cash Used In Investing Activities Cash flows from financing activities Re-payment of secured loans, net Interest paid Dividend paid including tax thereon Net Cash Used In Financing Activities Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year

260.30 (49.64) 210.66

278.80 (32.48) 246.32

(191.20)

(82.35)

20.14 122.82 (37.96) 2.27 32.18 0.19 (51.56)

14.64 (43.91) (50.00) (27.64) 10.23 22.33 0.28 (156.42)

(0.83) (37.66) (90.06) (128.55) 30.55

(4.36)

(0.34) (37.50) (69.55) (107.39) (17.49)

13.13

Cash and cash equivalents at the end of the year (Refer note on next page)

26.19

(4.36)

28

NOTE:For the year ended Cash and cash equivalents at the end of the year Book overdraft 26.19 (29.24) (4.36) 31 March 2012 26.19 31 March 2011 24.88

29

Britannia Annual Report 2011-12

COMPARATIVE BALANCE SHEET

Rs. in crores

As at

31 March 2012

31 March 2011

Absolute Increase or Decrease

%
Increase or Decrease

I. EQUITY AND LIABILITIES (1) Shareholders funds (a) Share capital (b) Reserves and surplus 23.89 496.15 520.04 (2) Non-current liabilities (a) Long-term borrowings (b) Deferred tax liabilities (net) (c) Other long-term liabilities (d) Long-term provisions 28.15 8.16 19.91 116.82 173.04 (3) Current liabilities (a) Trade payables (b) Other current liabilities (c) Short-term provisions 336.20 518.26 124.80 979.26 1,672.34 239.68 119.38 96.65 455.71 1,482.49 96.52 398.88 28.15 523.55 189.85 40.27 334.12 29.12 114.88 12.80 430.57 6.24 15.99 122.68 575.48 (402.42) 1.92 3.92 (5.86) (402.44) (93.46) 30.76 24.51 (4.77) (69.93) 23.89 427.41 451.30 NIL 68.74 68.74 NIL 16.08 15.23

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II. ASSETS (1) Non-current assets (a) Fixed assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress 370.63 8.46 79.73 458.82 (b) Non-current investments (c) Long-term loans and adv. (d) Other non-current assets 218.40 125.02 12.12 298.68 5.02 11.70 315.40 308.94 142.13 12.12 71.95 3.44 68.03 143.42 (90.54) (17.11) NIL 24.08 68.52 581.45 45.47 (29.3) (12.03) NIL

(2) Current assets (b) Inventories (c) Trade receivables (d) Cash and bank balances (e) Short-term loans and adv.

210.54 382.28 52.14 30.94 182.08 857.98 1,672.34

236.06 311.20 57.26 28.75 70.63 703.90 1,482.49

(25.52) 71.08 (5.12) 2.19 111.45 154.08 189.85

(10.8) 22.84 (8.94) 7.61 157.79 21.88 12.80

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Britannia Annual Report 2011-12

COMPARATIVE STATEMENT OF PROFIT AND LOSS

Rs. in crores

For the year ended

31 March 2012

31 March 2011

Absolute Increase or Decrease

% Increase or Decrease

I. Revenue From Operations Sale of products Less: Excise duty Net sale of products Other operating revenues 5,005.66 (58.62) 4,947.04 27.15 4,974.19 II. Other Income III. Total Revenue (I + II) IV. Expenses: Raw materials including packaging materials consumed Purchase of stock-in-trade Changes in inventories of finished goods, work-in-progress and stock-in-trade Employee benefits expense Finance costs Depreciation and amortization 145.87 38.07 47.32 119.93 37.75 44.59 25.94 0.32 2.73 21.62 0.84 6.12 529.53 (4.79) 410.31 (17.89) 119.22 (13.1) 29.05 (73.22) 2,655.01 2,371.92 283.09 11.93 58.53 5,032.72 4,230.59 (32.27) 4,198.32 25.20 4,223.52 48.92 4,272.44 775.07 26.35 748.72 1.95 750.67 9.61 760.28 18.32 81.65 17.8 7.73 17.77 19.64 17.79

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expense Other expenses Total Expenses V. Profit Before Tax (III IV) VI. Tax Expense: (1) Current tax Income tax Minimum alternative tax for earlier years Income tax for earlier years (2) Deferred tax VII. Profit / (Loss) For The Year (V VI) 1.92 186.74 12.82 145.29 (10.9) 41.45 (85.02) 28.52 12.34 (12.34) (100) 63.71 41.52 (13.91) 22.19 13.91 53.44 100 1,369.34 4,780.35 252.37 1,107.77 4,074.38 198.06 261.57 705.97 54.31 23.61 17.32 27.42

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Britannia Annual Report 2011-12

SIGNIFICANT RATIOS

20112012 Measures of Investment

20102011

Return on Equity

Net profit Shareholders funds

35.9

32.2

Earning Per Share (NV of Rs. 2)

Net profit Number of equity shares

Rs.

15.63

12.16

Dividend Cover

Earnings per share (Basic) Dividend (plus tax) per share

Times

1.6

1.6

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Measures of Performance

Profit Margin

Profit before tax Revenue from operations + Other income

5.0

4.6

Debtors Turnover

Sale of products Trade receivables

Times

96.0

73.9

Stock Turnover

Sale of products Inventories (Finished goods + Stock-in-trade)

Times

39.2

34.8

Measures of Financial Status

Debt Equity Ratio

Long-term borrowings + Current maturities of long-term debt and finance lease obligations Shareholders funds

83.6

95.6

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Current Ratio

Current assets Current liabilities Current maturities of long-term debt and finance lease obligations

Times

1.5

1.5

Tax Ratio

Provision for tax Profit before tax

26.0

26.6

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COMMENTS:-

Return on Equity Capital:- Return on equity capital ratio calculates the amount of profits available to take care of equity dividends, transfer to reserves, etc. 1) The return on equity capital is 35.9%. 2) It indicates that on each Rs.100 of equity capital:a) Average net return of Rs.35.9 is earned. b) This amount of Rs.35.9 is available for appropriation to equity shareholders. 3) There is a good scope to attract fresh funds by issue of equity shares by way of rights or public issue.

Current Ratio:- Current ratio is a liquidity/solvency ratio which indicates the ability of a concern to meet its short-term liability. 1) Rs.1.5 of current asset is available for each Re.1 of current liability. 2) Current ratio is constant for two financial years. 3) It shows an:a) Optimum liquidity/solvency position. b) Optimum level of current asset. c) Optimum level of trading(i.e, optimum turnover generated from the given level of assets employed).

Debt-Equity Ratio:- Debt-equity ratio is a solvency ratio which indicates the proportion of debt and equity in financing of the assets of the concern. 1) Debt-Equity ratio is 83.6% which means that long term loans(debts) are 83.6% of shareholders funds. 2) It indicates that:37

a) There is very satisfactory safety margin for the long term creditors. b) More dependence on equity. c) Ease of raising additional loans. d) Smaller burden of fixed interest payments.

Stock Turnover Ratio:- Stock turnover ratio shows the relationship between the cost of goods sold and the average stock. 1) Stock turnover ratio is 39.2 times which means that during the year stock was converted into sales 39.2 times. 2) Stock Velocity will be 365/39.2 = 9.3 days which means that on an average 9.3 days production will be held by company as stock or it also means that it takes 9.3 days for the company to sell stock after it is produced. 3) Stock is sold out fast. 4) Working capital requirement is less.

Debtors Turnover Ratio:- Debtors turnover ratio shows relationship between credit sales and debtors. Its purpose is to calculate the speed with which debtors get settled on an average during the year and to calculate debtors velocity to indicate the period of credit allowed to an average debtor. 1) The debtors turnover ratio is 96 times which shows that debts are being collected at a fast speed during the year. 2) Debtors Velocity will be 365/96 = 3.48 days which shows that on an average it takes 3.48 days to settle a debt. 3) The amount of credit given by the concern to its customer is less. 4) Less funds are blocked up in debtors and working capital. 5) There are less chances of bad debts. 6) The debtors are managed very efficiently.
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Profit Margin Ratio:- Profit margin ratio helps to judge how efficiently the concern is managing all its activities of operations, financing and investment and how much amount is available for appropriation. 1) The profit margin has increased from 4.6% to 5%. 2) All activities of the company are managed efficiently. 3) There is very good control over all cost ,i.e, operating as well as non-operating cost. 4) A good margin is available to make appropriation.

Dividend Coverage Ratio:- Dividend coverage ratio indicates the capacity of a company to pay dividends out of profit attributable to the shareholders. 1) The dividend coverage ratio is 1.6 times which is just above the standard ratio of 1.5 times. 2) It is constant for past two financial years which shows that company is retaining similar portion of its earnings to meet its financial requirements.

Earning Per Share:- Earning per share calculates the amount of profits available to take care of equity dividends, transfer to reserves, etc. 1) The earning per share has increased from Rs.12.6 to Rs.15.63 (NV is Rs.2). 2) It indicates that on each Rs.100 of equity capital:a) Average net return of Rs.15.63 is earned. b) This amount of Rs.15.63 is available for appropriation to equity shareholders. 3) There is a good scope to attract fresh funds by issue of equity shares by way of rights or public issue.

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Conclusion:Britannia Industries Limited is also a major player in the ready to eat food segment with leadership position in bakery category. The companys plants are situated in Kolkata, Delhi, Chennai, Mumbai, Uttarakhand, Orissa & Bihar with a capacity of 160,000 MT. The company has transformed itself from being a primarily a biscuit company in 2008 with diversification efforts into other bakery products & dairy. Britannia made its strong presence felt in dairy this year and recently forayed into ready to eat Indian breakfast market & savory market. We expect this new initiative to start yielding results from 2014. Companys product categories are all growing at +15% while the overall industry is growing at +10%. The company has over last 3-4 years done the innovations in its product portfolio in all facets such as pricing, packaging and entry into new segments. Innovation has been focused on growing its segments with the base of health and nutrition. The company has over the years innovated its product portfolio so as to command pricing premium in the market. Brand leverage has helped Britannia gain foot hold in new segment such as chaas and healthy bread offerings. Innovation backed by advertisement exposure to help improve growth. Britannia accelerated the nutritional drive in the last 3-4 years and has been growing in double digits in this segment. The adults Health and Wellness segment is growing at +20% levels and Britannia is witnessing similar to higher growth. Approximately 50% of its revenues flow in from this health & wellness segment. In an increasingly challenging environment and continuing commodity inflation, Britannia net profit has increased by 28.5% ,i.e, from Rs.145.29 crores to Rs.186.74 crores. The company held its overall share of about one-third of the biscuit market, strengthened its position in other bakery products like bread, cake & rusk and added Rs.775.07 crores to sale of products, which grew 18.32%. Earnings per share of Rs.2 were Rs.15.63. In the domestic market, competitive intensity in both bakery and dairy will continue to increase as more players, both multinational and local companies, compete for a greater share of the large and growing packaged food segment, of which biscuits account for the highest share. Growth is expected to be driven through heavy investment in advertising & promotions as well as infrastructure investments to build scale and support new
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introductions, both in the premium and discount segments. Also, Britannia Nutrition Foundation continues to work on initiatives related to malnutrition in children and women and will partner with the government, NGOs etc., to pilot and scale up successful initiatives.

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BIBLOGRAPHY:1) WWW.BRITANNIA.CO.IN

2) WWW.MONEYCONTROL.COM

3) WWW.WIKIPEDIA.COM

4) WWW.BUSINESSTANDARD.COM

5) WWW.ECONOMICTIMES.COM

6) WWW.JUST-FOOD.COM

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