britannia annual-report 2012-13 (1)

7/27/2019 Britannia Annual-Report 2012-13 (1)

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Britannia Annual Report 2012-13

BOARD OF DIRECTORS

CHAIRMAN :

Nusli N Wadia

MANAGING DIRECTOR :

Vinita BaliDIRECTORS :

A K Hirjee

S S Kelkar

Avijit Deb

Nimesh N Kampani

Jeh N Wadia

Keki Dadiseth

Ajai Puri

Nasser MunjeeNess N Wadia

Vijay L Kelkar

MANAGEMENT TEAM :

Varun Berry - Chie Operating Ocer

Vinod Krishna Menon - Chie Financial Ocer

Vinay Singh Kushwaha - Vice President-Supply Chain

Ashok Namboodiri - Head-Dairy Business

Manoj Balgi - Head-Procurement

Prashant Vatkar - Chie Executive Ocer-Britannia International Business

COMPANY SECRETARY :

Vivek P Raizada (w.e.f. 1 June 2013)

AUDITORS :

B S R & Co.Chartered AccountantsMaruthi Ino-Tech Centre,11-12/1, Inner Ring Road, Koramangala,Bangalore - 560 071.

BANKERS :

Bank o America N. A. Standard Chartered Bank

Bank o Tokyo-Mitsubishi UFJ State Bank o India

Citibank N. A. The Hongkong and Shanghai Banking Corporation Limited

HDFC Bank Limited The Royal Bank o Scotland N. V.

Indian Bank

Registered Oce : 5/1A, Hungerord Street, Kolkata - 700 017.Executive Oce : Britannia Gardens, Old Airport Road, Vimanapura, Bangalore - 560 017.


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CONTENTS

Financial Highlights .....................................................................................................................................01

Report o the Directors .................................................................................................................................02

Management Discussion and Analysis..........................................................................................................15

Report on Corporate Governance.................................................................................................................18

Independent Auditors Report.......................................................................................................................31

Balance Sheet ................................................................................................................................................34

Statement o Prot and Loss .........................................................................................................................35

Cash Flow Statement ....................................................................................................................................36

Notes to Financial Statements ......................................................................................................................38

Independent Auditors Report on the Consolidated Financial Statements ..................................................72

Consolidated Balance Sheet ..........................................................................................................................74

Consolidated Statement o Prot and Loss ...................................................................................................75

Consolidated Cash Flow Statement ..............................................................................................................76

Notes to Consolidated Financial Statements ................................................................................................78

Inormation on Subsidiary Companies .......................................................................................................106

Signicant Ratios ........................................................................................................................................107

Ten Year Financial Statistics : 2004 - 2013 .................................................................................................108


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FINANCIAL HIGHLIGHTS

`in crores 2012-13 2011-12 % Change

STANDALONE

Net Sale o Products 5,564.38 4,947.04 12%

Prot rom Operations 314.45 231.91 36%

Shareholders Funds 636.41 520.04 22%

Capital Expenditure 192.88 191.20 1%

Prot Beore Tax 332.18 252.37 32%

Net Prot 233.87 186.74 25%

Cash Prot 290.95 234.06 24%

Per Equity Share (Nominal value o`2/- each)

Earnings (Basic) 19.57 15.63 25%

Dividend 8.50 8.50

Dividend + Tax 9.94 9.88 1%

CONSOLIDATED

Net Sale o Products 6,135.91 5,460.75 12%

Prot rom Operations 347.49 249.04 40%

Prot Beore Tax 358.43 266.58 34%

Net Prot 259.50 199.55 30%


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REPORT OF THE DIRECTORS

The Directors present their Annual Report together withthe Statement o Accounts or the year ended 31 March2013.

1. FINANCIAL RESULTS

ìn croresParticulars Year ended

31 March 13Year ended

31 March 12

Sale o Products 5,649.66 5,005.66

Other Operating Revenues 51.11 27.15

Other Income 55.47 58.53

Proft rom Operations(PBT beore other incomeand nance costs)

314.45 231.91

Proft Beore Tax 332.18 252.37

Less: Tax Expense 98.31 65.63

Net Proft 233.87 186.74

Add: Prot brought orward 235.35 185.29

Proft available orappropriation

469.22 372.03

Less: Proposed Dividend 101.66 101.53

Less: Tax on Proposed

Dividend

17.28 16.47

Less: Transer to GeneralReserve

23.39 18.68

Balance carried orward toBalance Sheet

326.89 235.35

Net Cash Flow romOperating Activities

272.01 210.66

2. OVERVIEW OF COMPANY PERFORMANCE

In an increasingly competitive market place andcontinuing commodity infation during the year,Prot rom Operations increased 35.6%, rom`231.91 crores to`314.45 crores. Against an overallrevenue growth o 12.5%, several o your Companysiconic brands grew at a signicantly higher rate,whilst a ew were laggards. Your Company added` 644 crores to its Operating Revenue (Sale oProducts) and ` 82.54 crores to its Prot romOperations. Earnings per share (Basic) o`2 were`19.57.

Trend lines o key perormance parameters are shown inthe table below:

Sale of ProductsProfit fromOperations

Net Cash Flow fromOperating Activities

0

1,000

2,000

3,000

4,000

5,000

6,000

2012-132011-122010-112009-102008-090

50

100

150

200

250

300

350

Performance Trends

ìn crores

SaleofProducts

ProfitfromO

perations/NetC

ash

Flowfrom

OperatingActivities

EPS(NominalValueof

2each)

NetProfit/CashProfit

PAT, Cash Profit and EPS

Net Profit Cash Profit EPS

0

50

100

150

200

250

300

350

2012-132011-122010-112009-102008-090

5

10

15

20

25ìn crores

During the year, your Company won severaaccolades and prestigious awards, notable amonwhich are:

1. Best In Class Global PerormancExcellence Award 2012 rom Asia PaciQuality Organization, under the category oLarge Manuacturing Organization, or itmanuacturing acilities at Delhi, GwaliorBidadi and Khopoli and the Corporate Ocat Bangalore.

2. The Golden Peacock National QualitAward by the Institute o Directors, or itmanuacturing acility at Kolkata.

3. Global Award or Excellence in QualitManagement and Leadership by WorldQuality Congress.

4. The Namma Bengaluru Award rom NammBengaluru Foundation or the year 2012-1or eective solid waste management.


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5. IWLF (International Women LeadershipForum) Award or Solid Waste Managementand the work o The Britannia NutritionFoundation.

Britannia was once again rated the Most Trusted

Food Brand by consumers across India in theannual survey done by Nielsen or The EconomicTimes. This is the ourth year in succession thatyour Company has achieved this distinction.Additionally, Brand Britannia also rose to theNo. 2 position across all product categoriesamongst Indias Most Trusted Brands, as voted byconsumers.

A ocus on Revenue management, Costmanagement and Innovation orms the basis oyour Companys operations. As in previous years,the Companys ocus on creating and delivering

relevant and dierentiated propositions acrossthe portolio o products continued and will beelaborated later in the section on Brands. Theyear 2012 also marked the Silver Jubilee year oyour Companys most iconic brand - Good Daywhich saw new advertising and several consumeractivities, culminating with the Heart o Goldprogram, that showcased stories o ordinary peopledoing extraordinarily compassionate acts.

Cost eectiveness has been a key pillar o yourCompanys value creation strategy. As in the past,your Company addressed the cost challenge by

continuing to build on several cost eectivenessand eciency initiatives through a specialprogram spanning the entire value chain. Thisprogram involved 400 projects across unctionsand geographies. In parallel, your Companycontinues to oster several improvement tools,using Kaizen, Total Productive Maintenance,Total Quality Management and Six Sigma inseveral manuacturing units. Your Companybelieves that these programs implementedcontinually will hardwire a culture o eciencyand eectiveness.

Your Companys international business alsoexpanded with export rom India growing 28.1%and the two companies in the Middle East growingat 21.2%. International revenue now account or`340.73 crores.

3. CONSOLIDATED FINANCIAL RESULTS

Your Company has prepared Consolidated FinancialStatements in accordance with AccountingStandard 21 (AS21) issued by the Institute o

Chartered Accountants o India. The ConsolidateStatements refect the results o the Company andthose o its Subsidiaries. As required by Clause 3o the Listing Agreement with the Stock Exchangesthe Audited Consolidated Financial Statementtogether with the Independent Auditors Repor

thereon are annexed and orm part o this AnnuaReport.

Consolidated Sale o Products o your Company othe year ended 31 March 2013 was`6,221.82 crorecompared with`5,519.96 crores in the previouyear, a growth o 12.7%.

Consolidated Net Prot or the year ended31 March 2013 was`259.50 crores compared with` 199.55 crores in the previous year, a growtho 30%.

`in crore

Particulars Year ended31 March 13

Year ended31 March 12

Sale o Products 6,221.82 5,519.96

Other OperatingRevenues

49.50 24.62

Other Income 52.24 59.14

Proft rom Operations(PBT beore otherincome and fnancecosts)

347.49 249.04

Proft Beore Tax 358.43 266.58Net Proft 259.50 199.55

Perormance o Subsidiaries is discussed below:

SUBSIDIARIES

Your Directors present herewith a broad overviewo the operations and nancials o Subsidiaries oyour Company.

Britannia Dairy Private Limited (BDPL)

Despite heightened competition both rom locaand international players, the Dairy business o

your Company grew protably by ocusing ondierentiated products. It more than doubledits Net Prot and registered a turnover o`309.19 crores compared to `293.06 crores inthe previous year, a growth o 5.5%. The businesachieved a Net Prot o `35 crores compared t`15.51 crores in the previous year, a growth o125.6%. Your Company achieved this by ocusinon its core brands like Cheese etc., by drivininnovation and improving overall realisation.


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With more value-added products in the pipeline,your Companys dairy business continues to beanchored in increasing distribution and reach orits products.

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

Daily Bread is a manuacturer o premium gourmetbakery products, including specialty breads, cakes,pastries and cookies which it sells through its ownretail stores directly to consumers. It also sells apart o its bread range through modern trade andto institutions. Its operations are largely connedto Bangalore.

The turnover (net sale o products) o Daily Breadwas`23.06 crores during the year, compared with`23.69 crores in the previous year.

Strategic Food International Co. LLC, Dubai (SFIC)

Regional upheaval continued in the Middle East

which negatively impacted business and or theyear ended 31 March 2013 SFIC sales increasedby 8.4% at AED 15.53 crores (`229.92 crores)compared with AED 14.32 crores (` 186.28crores) or the previous year. Saudi Arabia, amarket the company entered last year, grewover 60% oering great promise or the uture.Currency depreciation in South Arica andcertain import restrictions in Nigeria and Angolalimited growth. Sot Commodity prices coupledwith several initiatives aimed at containing cost,helped support higher marketing investmentsto build the business. SFIC posted a net loss oAED 0.33 crore (` 4.91 crores), almost at theprevious years levels. Gross Margins improvedwith an unrelenting ocus on containing cost,improving the product and geographic mix andconcentrating on key categories like cookies, sugarree digestives and waers to drive growth.

Al Sallan Food Industries Co. SAOC (ASFI)

ASFI sales are primarily to SFIC and or the yearended 31 March 2013 closed at RO 0.89 crore(` 125.17 crores), higher by 3.2% comparedwith RO 0.86 crore (` 106.99 crores) in theprevious year. Persistent ocus on cost reduction,productivity improvement and eciency related

initiatives helped post a net prot o RO 0.1 lakh(`0.12 crore) against a net loss o RO 1.31 lakhs(`1.63 crores) in the previous year.

Royal Decrees and Governmental directives issuedin Oman or increments and wage increases orOmani nationals (who constitute a mandatoryminimum o 35% o the workorce) continue toadd to cost pressures and the company has adoptedvarious innovative techniques to be competitive inthis environment.

Britannia and Associates (Mauritius) PrivatLimited, Mauritius (BAMPL)

BAMPL, a company ormed in Mauritius and wholly-owned subsidiary o the Company, is thholding company o Britannia and Associate(Dubai) Private Company Limited, a Jebel Al

Free Zone Oshore company, which in turn holdinvestments in Strategic Food International Co. LLCDubai, Al Sallan Food Industries Co. SAOC, Omanand Strategic Brands Holding Company Limited,

Jebel Ali Free Zone Oshore company.

The combined revenue and loss o holdincompanies or the year ended 31 March 2013 waUSD 0.12 crore (`6.53 crores) and USD 0.01 cror(` 0.25 crores) compared to USD 0.13 cror(`6.35 crores) and USD 0.02 crore (`1.10 croresrespectively, or the period ended 31 March 2012

Investment Companies

M/s. Boribunder Finance and Investments PrivatLimited (Boribunder), M/s. Flora InvestmentCompany Private Limited (Flora) and M/s. GilEdge Finance and Investments Private Limited(Gilt Edge) orm the Investment subsidiaries oyour Company. Boribunder is a wholly ownedsubsidiary o your Company.

The combined revenue and prot o the investmencompanies or the year ended 31 March 2013 wa`0.65 crore and`0.47 crore respectively.

Further, pursuant to Section 4 o the CompanieAct 1956, the ollowing companies engaged in

manuacture o biscuits at various locations aralso subsidiaries o your Company. The Revenurom Operations and Net Prot o the saidsubsidiaries during 2012-13 are as under:

`in crore

Name o Subsidiary Revenuerom

Operations

Net Proft

International Bakery

Products Limited,

Puducherry

14.28 0.23

J B Mangharam FoodsPrivate Limited, Gwalior

18.80 0.10

Manna Foods Private

Limited, Madurai

23.21 0.05

Ganges Vally Foods Private

Limited, Hoogly

16.11 0.15

Sunrise Biscuit Company

Private Limited, Guwahati

123.58 0.22


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Welfare Companies

Britannia Employees General Welare AssociationPrivate Limited, Britannia Employees Educational

Welare Association Private Limited and BritanniaEmployees Medical Welare Association PrivateLimited are three o the other subsidiaries o

your Company. These are companies limited byguarantee, have no share capital and have been setup or general, educational and medical welareo the employees o your Company. They are notengaged in any commercial activity.

4. DIVIDEND

The Board o Directors are pleased to recommenda dividend o 425% on the paid-up equity sharecapital o the Company, which amounts to`8.50per share, or consideration and approval by theshareholders at the Annual General Meeting. Thetotal payout amounts to`118.94 crores including

dividend distribution tax o`17.28 crores.5. THE BRITANNIA PROMISE

It is the conviction o your Company that theountainhead o its perormance is the supremacyo its brands in terms o the unique delight theydeliver which starts with the look and eel o thepack and ends with the pleasurable satisactionconsumers experience ater they have enjoyed theproduct. With the quest to understand and ullyembrace this thought in every activity that leads tothe nal moment o purchase and consumption,your Company has engaged the services o aspecialized consultant who will work closely withthe Management to help uncover the needs anddesires o the heterogeneous base o consumers inIndia. Your Company will design products that aredistinctive and appeal to the sensory aspirationso the consumers as they see, smell, taste andeel satised ater consuming the products. Anobjective analysis has revealed the opportunities topursue and it is with this conviction that everybodyin your Company has taken an oath to create andmake available products that coalesce cost, qualityand aspiration imaginatively to create experiencesthat are unique and dierentiated. This process is

deeply rooted in the understanding o consumersand the science o organoleptics. Through thisprocess, your Company will make its productseven more delightul, aordable and accessible tothe heterogeneous people o India across age,ethnicity and socio-economic status - anytime,anywhere every day. With this Promise as thebeacon to guide all actions, your Company willclearly dierentiate its products and its perormancein the marketplace. This is the Britannia Promise.

6. BRANDS

Brands orm the core o your Companybusiness and keeping them relevant anddierentiated is the rst priority o your Company2012-13 has been a year o consolidating andgrowing base brands and brands launched in

the previous year. Concurrently, your Companhas kept up the pace o innovation by workinand investing aggressively behind new consumeunderstanding, new technologies and capabilitprograms. Your Company has also collaboratedwith reputed academic institutions and othecompanies to complement its eorts and builstrong platorms or sustained and signicanproduct categories and businesses.

Good Day completed 25 years and it was appropriatto celebrate this milestone with consumers, whoor the last 25 years have chosen Good Day a

their avorite cookie. Towards the close o thanniversary, Good Day ran a programme - Hearo Gold, which was enthusiastically received byconsumers.

Contributing signicantly to the healthy snackinobjectives has been an important objective o youCompany. Consistent with this objective youCompany launched several products under thumbrella o NutriChoice. These diabetic riendlyproducts were made available to more peoplacross the country through extending their reachand distribution by almost 50%. Your Companybelieves that there is scope or urther expansion.

Another aspect o the Companys healthy snackinpromise to the consumers has been to address thpervasive micro-nutrient deciency among thchildren o India. Brand Tiger has been at thoreront o this, with each serving designed tdeliver 25% o RDA o Iron. Other brands that arenriched with micro-nutrients include Milk BikisBritannia Marie Gold, VitaMarie, Britannia BreadTiger Chocolate and Badaam Milk and BritanniFlavored Yoghurt.

7. SUPPLY CHAIN AND MANUFACTURINGOPERATIONS

Your Company has been ocusing on improvingoperational eciencies in Supply Chain andManuacturing. New biscuit manuacturing acilitieat Hajipur, Khurda and Madurai were optimallutilized. Your Company has added a state-o-theart acility or cake manuacturing at Rudrapur andalong with its co-packer, a Greeneld actory obiscuit manuacturing at Hyderabad. Capacity andcapability continued to be enhanced both in you


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Companys manuacturing units and co-packers.All these have helped in creating the right capacitywith superior technology to better serve the market.Additionally, scal benets in several o these regionshave helped contain cost. To improve the back-endplanning process and availability, your Company is

in the process o implementing Advanced Planning &Optimizing (APO) which is progressing as per plan.

8. QUALITY STANDARDS

Your Company assiduously works on raising thedelivered quality o its products and processesthrough its Q Next Program. The cultureo continuous improvement is being createdthrough deploying various initiatives like Kaizen,Total Productive Maintenance (TPM) and TotalQuality Management (TQM). The Lean Six Sigmamethodology has been adopted in solving complexissues in the organization, thereby improving the

eectiveness o processes and systems. Consumerconnect processes have been improved with respectto promptness in response to consumer queries.As mentioned earlier, several o the Companysmanuacturing units were recognized in India andAsia or delivering excellence in quality.

9. INFORMATION TECHNOLOGY

During 2012-13, your Company implementedbest in class Supply Chain IT capabilities enabledthrough SAP to transorm and integrate end-to-endsupply chain covering demand, capacity, productionand material planning. This will enable dynamic

demand planning and accurate orecasting in boththe short and long term and provide the capabilityto quickly respond to changing market needs.

Your Company has also successully implementeda handheld based system to enable its sales peopleto drive eciencies in generating and servicingretail orders. BritanniaKonnect is another worldclass capability that was launched during the yearto enable tighter collaboration, communication andknowledge management within the organization.

In 2013-14, your Company proposes to buildpowerul IT capabilities or marketing. YourCompany will also be implementing analytics inprocurement to enable its procurement team to gaingreater visibility and better orecast commodityprice trends.

10. ENVIRONMENT AND SAFETY

Energy conservation and the use o clean uelscontinue to be a priority area or your Company.Creation o multi-uel fexibility has led to asignicant shit towards use o cleaner uels whereavailable and more o these opportunities will be

harnessed in the uture. A biomass gasier has beensuccessully commissioned at one actory and morwill be installed in the coming year. Following successul pilot, a new design oven to conserve energwas commissioned with improved benets. A ocusedEnergy Program has been conceived with a view t

carrying out specic initiatives in the eld o EnergEciency and Conservation. The program looked auel conservation by reviewing the design and usago ovens, and making requisite improvements inboth the design and technology. The endeavour is tcontinually look or opportunities to shit to cleaneuels and conserve energy.

The initiative o setting up a wet waste compostinacility at the Bangalore Oce, last year, receivethe prestigious Namma Bengaluru Award romNamma Bengaluru Foundation or the yea2012-13 or eective solid waste managementThis award recognises the extensive eorts madby Britannia in making Bangalore a cleaner cityAs part o the continuous eort to encouragthe culture o reducing and recycling, a wastmanagement initiative has also been set up withthe Companys co-packer in Bangalore and severaprojects rolled out at other units are at varioustages o completion.

With the objective o providing a healthy ansae environment, your Companys EnvironmenHealth and Saety (EHS) program has beenstrengthened with dedicated resources and youCompany has undertaken several saety measure

at all its manuacturing units that include: Communicating the EHS Policy to al

stakeholders.

Assessing and identiying unsae conditionat work place.

Conducting Hazard and Risk Study at units

Monitoring Unit level perormance throughTotal Reportable Incident Frequency Rat(TRIFR).

Documenting and implementing SaOperational Control Procedures at units.

Training people on good seety practices onthe shop foor and elsewhere in the actory.

Your Company strives or a Zero Accident Culturthrough building a robust EHS ManagemenSystem to ensure the health and saety o all itemployees, contractors and visitors at the workplace. As part o this, your Company is adoptinAccident Prevention Program at the work placthrough structured Saety Committees, SystematiAwareness Programs, Periodic Monitoring and


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Measurement Systems and regular reviews alongwith business metrics.

11. CORPORATE SOCIAL RESPONSIBILITY (CSR)

For your Company, CSR means Corporate SustainableResponsibility and this means embedding CSR intoits business model. This covers the two broad areaso ood-based solutions to increasing nutrition aswell as energy conservation, which includes wastemanagement. The solid waste management systemo your Company is a rst o its kind initiative andworks on the credo o reduce, recycle and re-use.The Companys Executive Oce in Bangalore isa Zero Waste generator unit. An eective systemo segregation at source has been put in place andpractised by all employees in the Companys ExecutiveOce. The dry waste is converted into paper througha collaboration with Khadi Gram Udyog. The wetwaste is processed in an eco-centre on campus and

350 kgs o it is composted into manure on a dailybasis.

As shared earlier, your Companys commitmentto health includes removal o harmul ingredientssuch as transats rom its recipes and addition omicronutrients (vitamins and minerals). Thishas been achieved through active redesign orecipes. Products like NutriChoice DiabeticFriendly Essentials have also been introduced.During 2012-13, your Company continued itspartnership with Karnataka Nutrition Mission in2 villages to comprehensively address healthand nutrition concerns o children, adolescent

girls, pregnant and lactating women. Part o theprogram was to provide biscuits ortied withmicronutrients to the target audience. A study doneamongst children (6-12 years) and adolescent girls(11-18 years) who consumed the ortied biscuitsor 4 months has shown an improvement inanthropometric parameters like height and weightand a reduction in anemia. This work will continuetill December 2013 when the project report will bepresented to the Karnataka State Government.

As mentioned in previous reports, the BritanniaNutrition Foundation was set up with the belie

that every child in India has the right to growth anddevelopment through good ood - every day. TheFoundation disseminates scientic knowledge inthe area o nutrition, builds awareness o the massivemalnutrition challenge and its solutions and createsa platorm or multi-sectoral dialogue and inormedaction. In September 2012, as part o the nationalnutrition week, the Foundation partnered a leadingEnglish news channel to produce and air a 4 weekseries titled India@65: The Nutrition Challenge.

The series included an eclectic mix o participantrom the nutrition, policy making, developmentcorporate and communication sectors, in additionto participation rom the audience, several o whomare members o civil society networks and workinin the development sector on issues relating t

health and nutrition. The program was a platorm tthrow light on the magnitude o the issue and sharsuccess stories in combating malnutrition alonwith social and scientic advancements in the area

In addition to engaging with the external worldyour Company is conducting internal employeprograms to boost awareness o the causes andeects o Iron deciency.

12. REDEMPTION OF BONUS DEBENTURES

The Company has ully redeemed on the due dati.e. 22 March 2013 the 23,890,163 8.25% SecureRedeemable Non-convertible Debentures o`17

each, amounting to an aggregate value o aroun`406.13 crores, issued and allotted in March 201rom the General Reserve by way o distribution abonus.

13. PENSION

The proceedings in the suit led by the PensionerWelare Association (the Association) are inprogress in the Honble City Civil and SessionCourt, Bangalore. In the meanwhile, the CompanyPension Funds continue to pay pension to thmembers, in terms o the Honble Courts interimorder passed on 1 January 2009 as reiterated by

the Honble Supreme Court in its order passed inJanuary 2011, in accordance with the computationmade on dened contribution basis and submittedby the Pension Funds to the Court.

Pending disposal by the Honble High Courts oMadras and Calcutta o the petitions led by somPensioners and the Association, the CIT, Kolkata, iyet to pass any orders on the Deeds o Variation leby the Pension Funds in view o the interim restrainorders passed by these Honble High Courts.

These and related matters have been dealt within Note 30 to the nancial statements, which ar

sel-explanatory.14. ENERGY, TECHNOLOGY AND FOREIGN

EXCHANGE

Details o energy conservation, technologabsorption, oreign exchange earnings and outgoingin accordance with the provisions o clause (e) osub-section (1) o Section 217 o the CompanieAct, 1956, read with the Companies (Disclosure othe Particulars in the Report o Board o DirectorsRules, 1988, are given as Annexure A to this Report


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15. CORPORATE GOVERNANCE

In accordance with Clause 49 o the ListingAgreement with the Stock Exchanges, a separatereport on corporate governance along with theAuditors Certicate on its compliance is attachedto this Report.

16. DIRECTORS

In accordance with the provisions o the CompaniesAct, 1956 and the Articles o Association o theCompany, Mr. Nasser Munjee, Mr. Ness N Wadia,Dr. Vijay L Kelkar and Mr. Nusli N Wadia, Directors,retire by rotation at the orthcoming Annual GeneralMeeting and are eligible or re-appointment.

17. PARTICULARS OF EMPLOYEES

Inormation as per Section 217 (2A) o theCompanies Act, 1956, (the Act) read with theCompanies (Particulars o Employees) Rules,

1975, orms part o this Report. However, as perthe provisions o Section 219(1) (b) (iv) o the Act,the report and accounts are being sent, excludingthe statement containing the particulars to beprovided under Section 217(2A) o the Act. Anymember interested in obtaining such particularsmay inspect the same at the Registered Oce othe Company or write to the Company Secretaryor a copy thereo.

18. EMPLOYEE STOCK OPTION SCHEME (ESOS)

Requisite disclosure in respect o the Employee StockOption Scheme (ESOS) in terms o Guideline 12

o the Securities and Exchange Board o India(Employee Stock Option Scheme and EmployeeShare Purchase Scheme) Guidelines 1999, has beenprovided in Annexure B to this Report.

The Share Capital o the Company has goneup rom `23.89 crores as at 31 March 2012 to` 23.91 crores as at 31 March 2013 and to` 23.92 crores as on the date o this Reportconsequent upon allotment o 75,000 equity shareseach on two occasions upon the exercise by theManaging Director o stock options granted underthe ESOS in 2008 and 2009 respectively.

19. COST AUDITThe Order dated 24 January 2012 issued by theMinistry o Corporate Aairs (MCA) Cost AuditBranch, Government o India, mandating CostAudit applies to the Company as it manuacturespackaged ood products alling within Chapter 19o the Central Excise Tari Act, 1985. TheCompany is accordingly required to get its costaccounting records in respect o the nancialyear commencing rom 1 April 2012 audited by

a Cost Auditor. Pursuant to Section 233B(2) othe Companies Act, 1956 the Board o Directoron the recommendation o the Audit Committeappointed M/s. N I Mehta & Co., Cost Accountantsas Cost Auditors or conducting Cost Audit or thnancial year 2012-13. The Cost Audit Report i

required to be led within 180 days rom the endo the nancial year. The Cost Audit Report or thnancial year ended 31 March 2013 will be ledwithin the prescribed period.

20. AUDITORS

M/s. B S R & Co. retire in accordance with thprovisions o the Companies Act, 1956. They havindicated their willingness to continue in ocand are recommended or re-appointment as thCompanys Auditors or the ensuing year.

21. DIRECTORS RESPONSIBILITY

Pursuant to sub-section (2AA) o Section 217 othe Companies Act, 1956, your Directors, based onrepresentations rom the Operating Managementconrm that:

(a) In the preparation o annual accounts, thapplicable Accounting Standards have beenollowed and there are no material departures

(b) They have, in selection o the accountinpolicies, consulted the statutory auditors andapplied these policies consistently, makin

judgments and estimates that are reasonabland prudent, so as to give a true and aiview o the state o aairs o the Companas on 31 March 2013 and o the prot o thCompany or the year ended 31 March 2013

(c) They have taken proper and sucient careto the best o their knowledge and abilityor the maintenance o adequate accountinrecords in accordance with the provisions othe Companies Act, 1956 or saeguardinthe assets o the Company and or preventinand detecting raud and other irregularities;

(d) They have prepared the annual accounts ona going concern basis.

22. ACKNOWLEDGEMENTSYour Directors would like to thank all stakeholdersnamely, customers, shareholders, dealerssuppliers, bankers, employees and all other businesassociates or the continuous support given bthem to the Company and its Management.

On behal o the Board

Mumbai Nusli N Wadi24 May 2013 Chairman


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ANNEXURE A TO THE DIRECTORS REPORT

Inormation under Section 217 (1) (e) o the Companies

Act, 1956 read with Companies (Disclosure o Particulars

in the Report o Board o Directors) Rules, 1988 and

orming part o Directors Report or the year ended

31 March 2013.

A. CONSERVATION OF ENERGY

(a) Some o the energy conservation measures

undertaken during 2012-13 are:

(i) Successul commissioning o a new design

oven using a dierent heating system that

signicantly reduces energy consumption.

(ii) Use o uel conservators in units running on

gas.

(iii) Installation o additional capacitor bank toimprove the Power Factor. Preheating o water

used in process through waste heat recovery.

(iv) Reduction o unloading and loading o

compressors by reducing the dierential

pressure.

(v) Provision o servo voltage stabilizer or

lighting loads, reducing the 3 Phase voltage.

(vi) Installation o clock timers to control

running times o high energy consuming

equipment.

(b) Additional Investments and proposals, i any, being

implemented or reducing energy consumption:

Your Company has already implemented the

initiatives stated above and will extend and expand

them wherever applicable. Additional investment

o `7 crores has been planned or 2013-14 in

various projects related to urther savings in energy

consumption.

(c) Impact o measures at (a) and (b) above:

In spite o a signicant increase in uel and energy

costs and a shit in the product-mix in the actories

towards products which consume more energy per

tonne o biscuits produced, both electricity and

baking uel consumptions were maintained with a

marginal increase.

Form A

Form o disclosure o particulars with respect tconservation o energy:

For the year ended

31 March

2013

31 March

2012

ELECTRICITY

(a) Purchased (gwh) 16.28 13.47

Total amount (`crores) 9.85 7.53

Rate / Unit (`/ kwh) 6.05 5.59

(1gwh = 1,000,000 kwh)

(b) Own generation

(i) Through diesel generator

(gwh)

2.31 1.56

Unit per litre o diesel oil

(kwh / litre)3.07 3.19

Cost / Unit (`/ kwh) 13.63 11.45

(1gwh = 1,000,000 kwh)

(ii) Through steam turbine /generator

Units (KL) NIL NIL

Unit per litre o uel oil / gas NIL NIL

Cost / Unit (`/ KL) NIL NIL

(iii) Others / Internal generation(Baking uel consumption) *

Quantity (Billion cal) 76,065 64,587

Total Cost (`crores) 36.7 28.3

Rate / Unit (`/ Billion cal) 4,824 4,386

Consumption per unit oproduction

Bakery products

Biscuits & Cakes (MT) 135,571 126,008

Electricity (kwh / MT) 137 119

Baking Fuel (Billion cal / MT) 0.56 0.51

* Dierent baking uels like urnace oil, piped natural gascoal gas and HSD are used at the actories.


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The rate per unit o electricity purchased was higher at`6.05 per kwh, compared with `5.59 per kwh in theprevious year, owing to increase in rate o grid power.

The increase in cost per unit o own generation o poweras well as the rate per unit o baking uel is due to the

increase in price o HSD and other uels used or baking.Consumption o energy per tonne o biscuit produced hasmarginally increased in own actories because o a higherproportion o premium varieties in the product-mix aswell as new production line or manuacturing cake atRudrapur.

Consumption o uel was higher than the normative

standard, during commissioning, trials and stabilization

o the varieties produced at Khurda actory during its

start-up phase.

Technology absorption, adaptation and innovation

(a) Eorts in brie made towards absorption,adaptation and innovation:

Various actions were initiated or upgradation otechnology and automation in specic areas:

Technology initiatives like continuous mixing,

new design oven using a dierent heating

system and high speed Packing Machines

with auto eeders, secondary packing system

and end o line conveyorisation implementedin the Greeneld unit at Khurda, have yielded

desired results.

Using renewable uels (biomass) as a bakinguel through the gasier technology has

helped in reducing the carbon ootprint as

well as cost o baking uel.

(b) Benefts derived as a result o the above:

The above initiatives resulted in improvedproductivity, better energy utilisation and reduced

energy cost and enhanced process and product

quality.

(c) Details o imported technology:

(i) Technology imported:

(a) Multihead co-extruder line.

(b) 5 roll mills or improved quality o

cream.

(ii) Year o import: 2012-13.

(iii) Has the technology been ully absorbed :

Being absorbed as per plan.

(iv) I not ully absorbed, areas where this hanot taken place, reasons thereo and uturplans o action: Not applicable.

B. TECHNOLOGY ABSORPTION

Research and Development (R&D)

Details o eorts made in technology absorption are:

1. Core areas o Research by the Company:

(i) Creation o a range o dierentiateproducts / packaging or premium healthpremium creams and premium cookies.

(ii) Continuous interaction and partnership withinstitutions and subject matter experts toderive improvements in ingredients, procestechnologies and cost-eective solutions.

(iii) Continuous research in the area o nutrition

analytical techniques, ingredients, packaginmaterials, process technology and ood saety

2. Benefts delivered as a result o above R&Dinitiatives:

(i) New products launched:

- Dierentiated variants o Time PasClassic Salted.

- New coee variant in Bourbon.

(ii) Packaging upgradation or dierentiationand serving dierent consumption occasion

and consumer segments:- Transition rom PVC to PP trays o

greener packaging.

- Tighter pack congurations or brandlike Good Day and Tiger.

- Tighter pack or Good Day.

- Tighter pack or Tiger.

3. Future plan o action:

In keeping with its belie, the Company wilcontinue to ocus on technology led innovation

to create dierent, better and special producexperiences. It will:

(i) Focus on technological solutions tintroduce new products with new benetand upgrade existing oerings.

(ii) Provide value through dierentiatedproduct / pack propositions and cutting edg

technologies.


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(iii) Explore new ingredients, processes and

technologies to create new propositions and

taste experiences.

4. Expenditure on R&D:

`in crores

Particulars 31 March 13Capital 0.52

Recurring 7.81Total 8.33Total R&D expenditure as a % oturnover (sale o products)

0.15%

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Activities relating to exports:

(i) The Company actively pursued and secured

new export markets or its core products.

(ii) Total oreign exchange used and earned:

`in crores

Particulars 31 March 13

Foreign exchange used * 74.18

Foreign exchange earned 96.44

* Foreign exchange used predominantly o

dividend, import o raw materials and capita

goods.

On behal o the Board

Mumbai Nusli N Wadi

24 May 2013 Chairman


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ANNEXURE B TO THE DIRECTORS REPORT

Disclosure pursuant to the provisions o SEBI (Employees Stock Option Scheme and Employee Stock PurchasScheme) Guidelines, 1999.

Particulars

(a) Options granted No. o Options

Financial Year: 2008-09 75,000 *Financial Year: 2009-10 75,000 *

Financial Year: 2010-11 100,000 *

Financial Year: 2011-12 125,000

Financial Year: 2012-13 100,000

Total 475,000

* Adjusted number o options consequent upon sub-division othe equity shares on and rom 9 September 2010.

(b) The pricing ormula The exercise price was determined in accordance with thepricing ormula approved by the shareholders i.e. at the latestavailable closing market price on the stock exchange having

highest trading volume, prior to the date o the meeting o theBoard o Directors or Remuneration / Compensation Committeein which options were granted.

Accordingly the options were granted at an exercise price o` 1,125.30, ` 1,698.15, ` 1,668.55, `391.75 and `528.75being the closing market price on the previous date o grant, i.e28 October 2008, 26 May 2009, 26 May 2010, 26 May 2011 and25 May 2012 respectively or the grants made on 29 October 200827 May 2009, 27 May 2010, 27 May 2011 and 28 May 2012.

The prices relating to the options granted on 29 October 2008and 27 May 2009 were adjusted downwards by`170, beingthe ace value o bonus debenture, issued as per Scheme o

Arrangement approved by Honble High Court o Calcutta byits order dated 11 February 2010.

Consequent upon the sub-division o equity shares on and rom9 September 2010, the exercise prices were urther adjusted asunder:

Date o Grant Adjusted Exercise Price (`/ share)

29 October 2008 191.06

27 May 2009 305.63

27 May 2010 333.71

(c) Options vested (as at 31 March 2013) 225,000 Options.

Options vest 1 year ater date o grant o options.The third lot o 100,000 options which were granted on27 May 2010 vested on 27 May 2011 the ourth lot o 125,000options granted on 27 May 2011 vested on 27 May 2012 andwhile th lot o 100,000 options granted on 28 May 2012 aredue or vesting in the next nancial year (i.e. 28 May 2013).

(d) Options exercised (as at 31 March 2013) 150,000 Options.

(e) The total number o shares arising as a result oexercise o option

150,000 Equity Shares.


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() Options lapsed Nil.

(g) Variation o terms o options Not applicable.

(h) Money realized by exercise o options `37,251,750

(i) Total number o options in orce 325,000 Options.

(j) Employee wise details o options granted to:(i) Senior managerial personnel 475,000 Options granted to the Managing Director, Ms. Vinita Bali

(ii) Any other employee who receives a grant inany one year o option amounting to 5% ormore o option granted during that year

Not applicable.

(iii) Identied employees who were grantedoption, during any one year, equal to orexceeding 1% o the issued capital (excludingoutstanding warrants and conversions) othe Company at the time o grant

Not applicable.

(k) Diluted Earnings Per Share (EPS) pursuant toissue o shares on exercise o option calculatedin accordance with Accounting Standard 20(AS20) - Earnings Per Share

`19.55

(l) Employee compensation cost

(i) Method o calculating employeeCompensation cost

The Company has calculated the employee compensation cosusing the intrinsic value method o accounting or the optiongranted under the Scheme.

(ii) Dierence between the employeecompensation cost so computed at (i)above and the employee compensationcost that shall have been recognised i ithad used the air value o the options

`1.19 crores.

(iii) The impact o this dierence on the protsand on EPS o the Company

Had the Company considered air value method then theadditional employee compensation cost would be`1.19 croreThe prot beore tax and EPS would be lower by`1.19 croreand`0.10 respectively.

(m) Weighted average exercise price and weightedaverage air values o options shall be disclosedseparately or options whose exercise priceeither equals or exceeds or is less than themarket price o the stock [Also reer point (b)]

Weighted average Exercise Price or the options granted duringthe year :`416.05.

Weighted average Fair Value o Option:`113.91 per option.

(n) Description o method and signicantassumptions used during the year to estimatethe air values o options:

Black-Scholes Model.

(i) Risk-ree interest rate 8.08%

(ii) Expected lie o options 3 years.

(iii) Expected volatility 22.16%

(iv) Expected dividends 425% o ace value o share.

(v) Market price (latest available closing priceprior to the date o the meeting o the Boardor grant)

`1,125.30,`1,698.15,`1,668.55,`391.75 and`528.75 as on28 October 2008, 26 May 2009, 26 May 2010, 26 May 2011 and25 May 2012 respectively.


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AUDITORS CERTIFICATE

To the Board o Directors o Britannia Industries Limited

We have examined the records and documents maintained by Britannia Industries Limited (the Company) and baseon the inormation and explanations given to us and to the best o our knowledge and belie, we conrm that theBritannia Industries Limited Employee Stock Option Scheme (ESOS) approved by the Company at its Annual GeneraMeeting held on 28 July 2008, duly amended by the special resolutions passed by the Company at its Annual GeneraMeeting held on 9 August 2010 and 6 August 2011, have been implemented in accordance with the provisions othe Securities and Exchange Board o India (Employee Stock Option Scheme and Employee Stock Purchase SchemeGuidelines,1999 as amended up to Circular No. SEBI/CFD/DIL/ESOP/5/2009/03/09 dated 3 September 2009 (theGuidelines) and in accordance with the terms o the aoresaid resolutions passed by the Company.

The certicate is issued on the request o the management o the Company and is solely or the purposes as stated inclause 14 o the Guidelines. This certicate is not intended to be and should not be used or any other purpose.

forB S R & CoChartered Accountant

Firm registration number: 101248W

Natrajh RamakrishnPlace: Mumbai PartneDate : 24 May 2013 Membership number: 3281


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MANAGEMENT DISCUSSION AND ANALYSIS

A) INDUSTRY STRUCTURE AND DEVELOPMENT

Bakery

Your Companys Bakery portolio includes biscuit,bread, cake and rusk. Biscuit is the largest othese categories, and has attracted a vast arrayo competitors ranging rom multinationals, onthe one hand, to large national local companiesand smaller regional players. Cake, rusk andbread on the other hand compete mostly withregional brands with Britannia being the onlynational player. Overall Bakery, despite the generaleconomic sluggishness, is still growing at 12-14%,with specic segments within that, growing aster at the top end, driven by dierentiation and newtaste experiences, and at the bottom end, throughavailability and aordability. Britannia, with abouta third share o the biscuit market and a dominant

share o other baked categories is well poised tobenet rom this growth, driven by the diversity oits product range and its availability ootprint.

The ood market itsel has seen some interestingstructural changes in the past ew years with theemergence o a diversied palate o choices acrossunctional and indulgent products. Additionally,with greater afuence and exposure, consumersare increasingly migrating rom unbrandedcommodities, sold loose, to branded and packagedsolutions that are hygienic and convenient. TheCompany, thereore expects the overall Bakerymarket to grow 13-15% in the coming year.

Dairy

India continues to be worlds largest producer andconsumer o dairy products. While liquid milkconsumption continues to drive the industry, thedairy market is also witnessing a signicant shitin value added milk products like branded andpackaged dahi, yoghurt, cheese, UHT milk andother milk based beverages. Milk prices remainedstable during the year which gave a urther boost tothe industry.

As mentioned earlier, with higher disposableincome, a greater array o choices and anincreasing health and nutrition consciousness,the dairy industry will continue to benet romthe migration to branded and value-added milkand milk based products. This has also increasedindustry competitiveness with local and regionalplayers going national and international playersextending their presence and business portolio.Accessibility, coupled with superior dierentiationis creating new categories and usage occasions in

dairy. Increasing competitive intensity also meanincreased investment in inrastructure creationall o which will ultimately benet the Indianconsumers, as more and better quality products arcreated and launched.

B) BUSINESS STRATEGY

Your Companys strategy is based on aspirationagrowth, in the context o the opportunities andchallenges that the Indian market presents anincreasing consumer appetite to continuallyupgrade, irrespective o price points, demandinvalue or money propositions at all times and more intense and vibrant competitive scenario

juxtaposed by the pricing policies o agriculturacommodities that orm the major input.

Bakery

The ocus continues to be on protable growthdriven through innovation and operationaexcellence right through the value chain. Revenuand cost management orm an intrinsic part ooperational excellence and will continue to bmonitored closely or improvement. The role oinnovation in your Company is about creatinnew sources o value. These include completelnew or renovated products and packs that creatgreater consumer delight or the application o newtechnology that reduces cost and increases qualitdelivery, or a process innovation that reducetime to completion and increases eciency. Thicomprehensive view o innovation enables youCompany to experiment and pilot new initiativeand scale those that are successul. An in-depthunderstanding o consumers and what exciteand motivates them orms the backbone o alour actions rom product design and benepropositions, to their delivery. Building, improvinand maintaining consumer preerence and purchasorm the basis o your Companys business anlong-term success. This involves considerablinvestment both in the business inrastructurand in Marketing and Sales. Consequently, and inline with its strategy your Company has investedin creating new capacity, both through its ownGreeneld units and through expansion withits existing partners. Your Company continueto enhance processes that enable it to ocus onextracting the maximum out o its investment inbrands behind advertising, promotions and displaat point o sale. Your Company is aggressivelbuilding and deploying its inormation technologinrastructure and capability to enable this moreectively. As shared last year, Go-to-Marke


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synergies have been created through the integrationo the bakery and dairy sales and distributionsystem, to present One Face o Britannia to itscustomers. One example o this is providing theront-end sales people with handheld devicesor order taking and analysis. Additionally, your

Company is using sophisticated analytical toolsto isolate the impact o dierent elements o themarketing mix, like price, promotions, advertising,availability, etc., on consumer purchases.

Dairy

The Dairy strategy o your Company, ocusing ongrowing the dierentiated portolio, extractingbenets rom an integrated sales and distributionsystem and diversied sourcing, led to creatingprotable growth and will be intensied in thecoming year. A greater marketing thrust andincreased investment in brand building and

innovation will help sustain higher levels oconsumer preerence, purchase and consumption.

Your Company has implemented several initiativesin all areas o operations to create an ecientand robust supply chain and build cold chaincapabilities to enhance sales and service to thetrade and nal consumers.

C) SEGMENT INFORMATION

The primary business segment o your Companyis Foods comprising (i) bakery products - biscuit,bread, cake and rusk, and (ii) dairy products milk, butter, cheese, ghee, dahi, milk-based ready

to drink beverages and dairy whitener.D) OUTLOOK

As discussed previously, the domestic marketor packaged, branded ood is expected to grow13-15% in the near term. The challenge to protablegrowth comes rom the trend in commodity prices,the general economic sentiment and a macroenvironment that contributes to operationalstability in the manuacturing units and markets.Simultaneously, the Indian market opportunityand ood market growth will attract new localand international players with deep pockets

and a dierentiated capability in their domainso operation to enter and expand operationsin India. Creating a leadership position in thisenvironment will demand that your Companysbrands and their propositions are relevant andexciting or consumers and dierentiated enoughto create a higher preerence and purchase. YourCompanys ocus is on dierentiating its productsand continually renovating and innovating themto create unique and superior experiences or its

consumers and customers. This, combined witheective cost management will generate protablgrowth.

International markets present an opportunitto segment and channel resources to generatprotable growth which is accretive to th

domestic business and which your Companhas demonstrated. Based on the opportunities ininternational markets which your Company haisolated, the strategy ocuses on key brands inkey markets to commercialise those opportunitieby sourcing rom its actories in India, Dubai anSohar. Britannia brands are now available in ove30 Countries.

E) FINANCIAL AND OPERATIONAPERFORMANCE

Sale o Products in the domestic market or bakeryproducts and exports rom India representinthe standalone perormance o your Companygrew 12.9% rom`5,005.66 crores in 2011-12 t` 5,649.66 crores in 2012-13. Net Prot grew25.2% rom`186.74 crores to`233.87 crores.

The key fnancials are as under:

`in crore

Particulars 2012-13 2011-12

Sales o Products 5,649.66 5,005.66

Total Expenditure 5,338.78 4,780.35

Prot Beore Tax 332.18 252.37

Tax Expense 98.31 65.63

Net Prot 233.87 186.74

F) OPPORTUNITIES AND THREATS

The opportunity or your Company is the largbase o consumers in India seeking upgradation aevery price point rom unbranded to branded aone end and to highly dierentiated and indulgenproducts at the other end. With increasing exposuredisposable income and new experiences, theiexpectations will become more demanding andhence superior consumer understanding and thability to continually engage and delight them will b

imperative or success and leadership. Paradoxicallythe large and growing base o consumers in Indiattracts international and local competition. Adiscussed earlier, branded ood is relatively nascenin the Indian market and poised or ast growth inline with the experience o other countries.

Internationally, the opportunities or youCompany continue to be the ability to serviccountries in the GCC and Middle East andselectively enter North America and other selec


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markets, with the dierentiated and successulproduct range rom India.

G) RISKS AND CONCERNS

The major risks and areas o concern stem romthe aspiration to drive high double digit growth in

an environment o economic sluggishness in India,coupled with the volatility o commodity pricesand policies. Additionally, greater competitiveintensity in this context could drive up the cost odoing business.

H) INTERNAL CONTROL SYSTEMS ANDADEQUACY

Your Companys internal control systems arecommensurate with the nature, size and complexityo its business and ensure proper saeguarding oassets, maintaining proper accounting records andproviding reliable nancial inormation.

An external independent rm carries out the internalaudit o the Company operations and reports itsndings to the Audit Committee on a regular basis.Internal Audit also evaluates the unctioning andquality o internal controls and provides assuranceo its adequacy and eectiveness through periodicreporting.

Your Company has a code o business conduct or allemployees and a clearly articulated and internalizeddelegation o nancial authority. These authoritylevels are periodically reviewed by management andmodications, i any, are submitted to the AuditCommittee and Board or approval. Your Companyalso takes prompt action on any violations o thecode o conduct by its employees.

The Audit Committee also reviews the riskmanagement ramework periodically and ensuresit is updated and relevant.

I) HUMAN RESOURCES AND INDUSTRIALRELATIONS

Your Company is committed to driving aneective and transparent Perormance Culture andmindset wherein people take higher ownership

and accountability or their own perormance andcontribute positively and collaboratively to yourCompanys Business Goals. The same is acilitatedthrough a structured goal alignment and cascadingprocess that links Company goals with individualand unctional goals. Your Company has alsorolled out unctional competency rameworksthat measure not just results but how results areachieved through the introduction o Core Values& Leadership behaviour. Top perormers and

high achievers are recognized or their exemplaryperormance as part o the ormal rewards andrecognition program launched in 2011-12.

To create an environment o learning anddevelopment, your Company has created speciprograms where employees take ownership or theiown learning and development and your Companyprovides these opportunities through classroomlearning, workshops and experiential learninthrough cross-unctional projects, programs andassignments.

Creating a robust talent pipeline is another priorityor your Company and in the last year, severasenior positions were lled through internaresources. Your Company has created a stronon-boarding program that includes Know YouBritannia (KYB), New Manager Orientation and inthe last year launched the Mentor program or new

external hires.

Various orums have been created to engage withpeople right across the Company. These includsmall group inormal interactions that ocus onvalues, behaviour and culture. There are alsoongoing employee orums that ocus on challengintasks using the tools and processes o QualitCircles, Kaizen, Six-Sigma, TQM, etc. Participation iencouraged at the grassroot level vertically withinthe unction and horizontally across unctions.

In 2012-13, Britannia continued to work towardimproving its Industrial relations environmenby ocusing on increasing worker engagementhrough ormal and inormal programs. YouCompany completed the long term settlement o2 o its actories.

As o 31 March 2013, your Company had 2,190employees (including workmen - 906) on its rolls

J) CAUTIONARY STATEMENT

Statements in this Management Discussion andAnalysis describing the Companys objectivesexpectations or predictions may be orwardlooking within the meaning o applicable laws and

regulations. Actual results could dier materiallrom those expressed or implied. Important actorthat could make a dierence to the Companyoperations include raw material availabilitand prices, cyclical demand and pricing in thCompanys principal markets, competitive actionschanges in Government regulations, tax regimeseconomic developments in India and in countriein which the Company conducts business andother incidental actors.


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REPORT ON CORPORATE GOVERNANCE

1. COMPANYS PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

Your Company considers good Corporate Governance a pre-requisite or meeting the needs and aspirations oits shareholders and other stakeholders in the Company and rmly believes that the same could be achieved bymaintaining transparency in its dealings, creating robust policies and practices or key processes and systemwith clear accountability, integrity, transparent governance practices and the highest standard o regulatorycompliance.

2. BOARD OF DIRECTORS

The Board is headed by a Non-Executive Chairman, Mr. Nusli N Wadia, and comprises eminent persons withconsiderable proessional experience and expertise in diverse elds. Over three-ourths o the Board consisto Non-Executive Directors. As o 31 March 2013, the Board comprised six independent directors constituting50% o the total Board strength.

During the year 2012-13, six (6) Board Meetings were held, the dates o the Meetings being 28 May 201212 July 2012, 6 August 2012, 21 September 2012, 6 November 2012 and 11 February 2013. The maximum gapbetween any two Board Meetings held during the year was not more than our (4) months.

The details o composition o the Board, Directors attendance at the Board Meetings and at the last Annual Genera

Meeting, Outside Directorships and the Board Committee Memberships as at 31 March 2013 are given hereunder

Name o the Director Nature o Directorship No. oBoard

Meetingsattended

Whetherattendedlast AGMheld on

06.08.2012

No. ooutside

Directorshipheld #

No. o BoardCommittee o other

Companies inwhich a Member /

Chairman ##

Mr. Nusli N Wadia Promoter andNon-Executive Chairman

6 Yes 7 Nil

Ms. Vinita Bali Managing Director 6 Yes 5 Member - 1

Mr. Keki Dadiseth Non-Executive andIndependent

4 Yes 8 Member - 3 / Chairman - 3

Mr. Avijit Deb Non-Executive andIndependent

5 Yes 1 Nil

Mr. A K Hirjee Promoter andNon-Executive


Mr. Nimesh N Kampani Non-Executive andIndependent


Mr. S S Kelkar Promoter andNon-Executive

6 Yes 8 Member - 4

Mr. Jeh N Wadia Promoter andNon-Executive

5 Yes 3 Nil

Dr. Ajai Puri Non-Executive and

Independent

4 Yes Nil Nil

Mr. Nasser Munjee Non-Executive andIndependent


Mr. Ness N Wadia Promoter andNon-Executive

5 Yes 6 Nil

Dr. Vijay L Kelkar Non-Executive andIndependent


# Excludes alternate directorship and directorship in oreign companies, private companies and companiegoverned by Section 25 o the Companies Act, 1956.


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## Excludes Committees other than Audit Committee and Shareholders / Investors Grievance Committeand companies other than Public Limited Companies.

Note:Mr. Nusli N Wadia, Mr. Jeh N Wadia and Mr. Ness N Wadia are relatives in terms o Section 6 o the CompanieAct, 1956.

3. BOARD COMMITTEESThe Board has constituted the ollowing Committees o Directors:

(a) Audit Committee:

The composition, powers, role and terms o reerence o the Committee are in accordance with threquirements mandated under Section 292A o the Companies Act, 1956 and Clause 49 o the ListingAgreement.

The Audit Committee, as on 31 March 2013, comprised the ollowing six Non-Executive Directors:

Mr. Nasser Munjee Chairman o the CommitteeMr. Nimesh N KampaniMr. Keki Dadiseth

Mr. Avijit DebMr. A K HirjeeMr. Ness N Wadia

The Chairman o the Committee, Mr. Nasser Munjee is an Independent Director. Apart rom Mr. NasseMunjee, the other Independent Directors are Mr. Nimesh N Kampani, Mr. Keki Dadiseth and Mr. Avijit Deb.

All the members o the Audit Committee are nancially literate and Mr. Nasser Munjee, Mr. Nimesh NKampani, Mr. Keki Dadiseth and Mr. A K Hirjee have nancial management expertise. Mr. P GovindanCompany Secretary, is the Secretary to the Audit Committee. Mr. Vivek P Raizada, Head Legal will take oveas Company Secretary eective 1 June 2013 and thereater, he will act as the Secretary o the Committee.

The role and terms o reerence o the Audit Committee include review o Internal Audit reports andStatutory Auditors report on Financial Statements, general interaction with Internal Auditors an

Statutory Auditors, selection and establishment o Accounting Policies, review o Financial Statementboth Quarterly and Annual beore submission to the Board, review o Management Discussion andAnalysis o nancial condition and results o operations, review o the perormance o Statutory andInternal Auditors, review o risk assessment ramework o the Company and adequacy o Internal ControSystems and other matters specied under Clause 49 o the Listing Agreement and Section 292A o thCompanies Act, 1956.

The Audit Committee also reviews statement o related party transactions, management letters and theresponse thereto by the management.

During the year under review, the Audit Committee held our (4) Meetings, the dates o meetings being28 May 2012, 6 August 2012, 6 November 2012 and 8 February 2013.

The attendance o the members at the Audit Committee Meetings held during the year under review is as

ollows:

Name No. o Audit CommitteeMeetings Attended

Mr. Nasser Munjee 3

Mr. Nimesh N Kampani 4

Mr. Keki Dadiseth 3

Mr. Avijit Deb 3Mr. A K Hirjee 4Mr. Ness N Wadia 3


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At the Annual General Meeting o the Company held on 6 August 2012, the then Chairman o the AudiCommittee, Mr. Nimesh N Kampani, was present.

The Managing Director, Chie Financial Ocer, Internal Auditors, Statutory Auditors and other Executiveas considered appropriate, also attended the Audit Committee Meetings.

Internal Audit and Control:

M/s. Aneja & Associates, Chartered Accountants, are the Internal Auditors o the Company and theiinternal audit plan and remuneration are approved by the Audit Committee. The reports and ndings othe Internal Auditor and the internal control system are periodically reviewed by the Audit Committee.

(b) Remuneration / Compensation Committee:

The Committee as on 31 March 2013 comprised the ollowing Directors:

Mr. Keki Dadiseth Chairman o the Committee

Mr. Nusli N Wadia

Mr. A K Hirjee

Mr. Nimesh N Kampani

Mr. Nasser Munjee

Dr. Ajai Puri

The Chairman o the Committee, Mr. Keki Dadiseth, is an Independent Director.

Broad terms o reerence o the Remuneration / Compensation Committee include:

(i) Recommendations to the Board, o salary / perquisites, commission and retirement benets annalisation o the perquisite package payable to the Companys Managing Director / WholetimDirectors.

(ii) To evolve and bring into eect the Employee Stock Option Scheme (ESOS) within the broaparameters approved by the Board / Shareholders and ormulate the detailed terms and conditiono the ESOS.

(iii) To be responsible or the administration and superintendence o the ESOS.During the year under review, the Remuneration / Compensation Committee met once on 28 May 2012Mr. Nusli N Wadia, Mr. Nimesh N Kampani and Mr. Nasser Munjee were present at the Meeting.

Remuneration Policy:

Managing Director

Ms. Vinita Bali was re-appointed as Managing Director or a period o ve years eective 31 May 2011 bthe Board o Directors at their Meeting held on 27 May 2011 on expiry o her earlier term o oce. Thesaid re-appointment was approved by the shareholders at the Annual General Meeting held on 6 Augus2011. The terms and conditions o re-appointment and remuneration payable to the Managing Directowere xed by the Board o Directors o the Company and an agreement dated 24 August 2011 was enteredbetween the Managing Director and the Company.

The details o remuneration paid to Ms. Vinita Bali or the year 2012-13 are as ollows:

Name Salary / Benefts (`) *

No. o Stock Options granted on

29 October2008

27 May2009

27 May2010

27 May2011

28 May2012

Ms. Vinita Bali 40,955,921 75,000 ** 75,000 ** 100,000 ** 125,000 100,000

* Contributions to employee retirement / post retirement and other employee benets which are based onactuarial valuation done on an overall Company basis are excluded rom above.


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** Adjusted numbers consequent upon sub-division o 1 equity share o`10 into 5 equity shares o`each on and rom 9 September 2010.

Notes:

(i) Vesting period o Options: A minimum period o 1 year rom the date o grant.

(ii) Exercise period o Options: A maximum period o 3 years rom the date o vesting.

(iii) Allotment o 75,000 equity shares each was made on 21 September 2012 and 2 April 2013 upoexercise o options granted in 2008 and 2009. Arising rom these allotments, Ms. Vinita BaliManaging Director, holds 150,000 equity shares o`2 each o the Company.

(iv) Details o the options granted including Exercise Price, etc. are given in Annexure B to the DirectorReport.

The remuneration to Ms. Vinita Bali comprises basic salary (upto a maximum o `20 lakhs per month)allowances, commission based on net prots, perquisites, contributions to provident und, superannuation undgratuity based on basic salary and encashment o unavailed leave. Notwithstanding anything to the contrary, inthe event o there being no prots or inadequate prots, the Company will pay remuneration by way o salaryand perquisites and allowances as specied above to Ms. Bali in compliance with Schedule XIII o the CompanieAct, 1956 and with the approval o the Central Government, i and to the extent necessary.

As per the agreement reerred to above, either party to the agreement is entitled to terminate the employmenby giving not less than six calendar months prior notice in writing to the other party; provided however that thCompany shall be entitled to terminate the incumbents employment at any time by payment to her o six monthsbasic salary in lieu o such notice. In addition, the Company has a right to terminate the agreement by givingat least 30 days notice in writing in case o any misconduct or any breach o the agreement by the incumbent.

Non-Executive Directors

The Non-Executive Directors do not draw any remuneration rom the Company other than sitting ees andcommission on the net prots o the Company. The Board collectively decides the aggregate amount ocommission or each year and the amount o commission payable to individual Non-Executive Directors isdetermined based on their attendance at the meetings o the Board o Directors and its Committees and theicontribution. The shareholders o the Company have approved the payment o commission to Non-Executiv

Directors at the Annual General Meeting held on 9 August 2010.Details o remuneration to Non-Executive Directors or the year 2012-13 are given below:

Name Sitting Fees (`) Commission (`) Total (`)

Mr. Nusli N Wadia 140,000 8,000,000 8,140,000Mr. A K Hirjee 280,000 1,976,000 2,256,000

Mr. S S Kelkar 240,000 1,694,000 1,934,000Mr. Nimesh N Kampani 240,000 1,835,000 2,075,000Mr. Avijit Deb 160,000 1,129,000 1,289,000Mr. Jeh N Wadia 140,000 988,000 1,128,000

Mr. Keki Dadiseth 140,000 1,059,000 1,199,000Dr. Ajai Puri 80,000 706,000 786,000Mr. Nasser Munjee 160,000 1,200,000 1,360,000

Mr. Ness N Wadia 160,000 1,129,000 1,289,000Dr. Vijay L Kelkar 40,000 284,000 324,000

The commission amount, as mentioned above, will be paid, subject to deduction o tax, ater the adoption oaccounts or the year ended 31 March 2013 by the shareholders at the Annual General Meeting to be held on12 August 2013. The Non-Executive Directors did not have any other pecuniary relationship or transactionwith the Company.

None o the Non-Executive Directors other than Mr. Nusli N Wadia, Non-Executive Chairman, holds any shareo the Company. Mr. Nusli N Wadia holds 2,250 equity shares o`2 each.


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(c) Share Transer & Shareholders / Investors Grievance and Ethics / Compliance Committee:

The Share Transer & Shareholders / Investors Grievance and Ethics / Compliance Committee consistedo our (4) Non-Executive Directors and Managing Director namely:

Mr. A K Hirjee Non-Executive Director (Chairman)

Mr. S S Kelkar Non-Executive Director

Mr. Nimesh N Kampani Non-Executive Director

Mr. Jeh N Wadia Non-Executive Director

Ms. Vinita Bali Managing Director

The Committee:

(i) approves and monitors transers, transmission, splitting, consolidation, dematerialisationrematerialisation o securities and issue o duplicate share certicates by the Company over andabove the delegated power as detailed below;

(ii) looks into various issues relating to shareholders, including redressal o complaints relating ttranser o shares, non-receipt o annual reports, dividends, etc.; and

(iii) carries out the unctions envisaged under the Code o Conduct or Prevention o Insider Tradinadopted by the Company in terms o Regulation 12(1) o the SEBI (Prohibition o Insider TradingRegulations, 1992.

The Board at its meeting held on 10 November 2010 had delegated the powers to approve transer andtransmission o securities, issuance o duplicate certicates o securities, etc. subject to certain guidelineand limits laid down and as modied by the Board at its meeting held on 6 August 2011, severally to thChie Financial Ocer and the Company Secretary.

During the year under review, the Committee held two (2) meetings, the dates o meetings being21 September 2012 and 18 March 2013.

The attendance o the members o the Committee at its meetings held during the year under review is aollows:

Name No. o Meetings Attended

Mr. A K Hirjee 1

Mr. S S Kelkar 2

Mr. Nimesh N Kampani 2

Mr. Jeh N Wadia 2

Ms. Vinita Bali 2

Mr. P Govindan, Company Secretary, is the Compliance Ocer o the Company till 31 May 2013 andMr. Vivek P Raizada, Head-Legal, will takeover as Company Secretary eective 1 June 2013 and act aCompliance Ocer thereater.

Complaints received and resolved during the year:No. o shareholders complaints received during the year 28

No. o complaints not resolved to the satisaction o shareholders Nil

No. o pending share transers Nil

The Company has generally attended to the investors grievances / correspondence within a period oten days rom the date o receipt o the same, except in cases that are constrained by disputes or legaimpediments. There are some pending cases relating to disputes over title to shares, in which the Companyis made a party. However, these cases are not material in nature.


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Shareholders requests or transer / transmission o equity shares were eected within 15 days rom the

date o receipt. There were no valid transers pending or registration as o 31 March 2013.

(d) Executive Committee o Board:

The Executive Committee o the Board (COB) consisted o Mr. Nusli N Wadia, Chairman

Mr. A K Hirjee, Dr. Ajai Puri, Mr. Nasser Munjee, Mr. Ness N Wadia and Dr. Vijay L Kelkar. The broad

terms o reerence o the COB included review and discussion rom time to time o business planand strategies, procurement strategies in respect o key commodities, business perormance, etc., and

addressing issues related to capital expenditure. During the year under review, no meeting o the COB wa

held since the business perormance, business plans and strategies were reviewed and deliberated upon

rom time to time by the ull Board.

(e) Other Committees o the Board:

In addition to the above Committees, the Board has constituted the ollowing Committees:

(i) Investment / Finance Committee:

The Committee comprises Mr. A K Hirjee, Chairman o the Committee, Mr. S S Kelkar, and

Mr. Ness N Wadia, all being Non-Executive Directors.

The brie terms o reerence o this Committee are to approve investments / divestments o the und

o the Company within the limits prescribed by the Board rom time to time. During the year unde

review, our (4) meetings o the Committee were held, the dates o meetings being 8 May 2012

12 July 2012, 25 October 2012 and 29 January 2013. While Mr. A K Hirjee and Mr. S S Kelkar

attended all the 4 meetings, Mr. Ness N Wadia could not attend any meeting. Further, telephone

meetings were held by the Committee members every month to review investments / disinvestment

/ re-investments, and related issues.

(ii) Nomination Committee:

The Nomination Committee comprises Mr. Nusli N Wadia, Chairman and Mr. Nimesh N Kampani

The terms o reerence o this Committee were to identiy and recommend to the Board th

appointment o the Managing Director / Wholetime Director / Chie Executive Ocer o theCompany. During the year under review, no meeting o the said Committee was held as there wer

no appointments or consideration.

(iii) Innovation Committee:

The Committee consisted o the ollowing Members:

Dr. Ajai Puri Non-Executive Director (Chairman)

Ms. Vinita Bali Managing Director

Mr. Keki Dadiseth Non-Executive Director

Mr. Ness N Wadia Non-Executive Director

The broad terms o reerence o the Innovation Committee are to address all matters relating to the

Companys products and technical development activities.

During the year under review no Innovation Committee Meeting was held since the matters relating to th

Companys products and technical development activities were taken up and reviewed in separate orum

and also at the Board Meetings rom time to time.


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4. GENERAL BODY MEETINGS

(a) Location and time where the last three Annual General Meetings were held and the Special Resolution

passed thereat:

Date Location Time Special Resolutions Passed

6 August 2012 Hyatt Regency, JA-1, Sector 3,Salt Lake City, Kolkata - 700 098.

11.00 a.m. Nil

6 August 2011 The Oberoi Grand, 15, JawaharlalNehru Road, Kolkata - 700 013.

11.00 a.m. Enhancement o number o optionsto be granted under the EmployeeStock Option Scheme.

9 August 2010 Hyatt Regency, JA-1, Sector 3,Salt Lake City, Kolkata - 700 098.

10.30 a.m. 1. Payment o commission toNon-Executive Directors.

2. Alteration o Articles oAssociation.

3. Amendment to Employee

Stock Option Scheme.(b) Whether any Special Resolutions were passed last year through postal ballot: No.

(c) Whether any Special Resolution is proposed to be passed through postal ballot this year: No.

5. DISCLOSURES

(a) Disclosures o materially signicant related party transactions i.e. transactions o the Company o materia

nature, with its promoters, the Directors or the Management, their Subsidiaries or relatives etc., that ma

have potential confict with the interests o the Company at large:

Related party transactions in the ordinary course o business are reported to the Audit Committee. Non

o them were (i) not in the normal course o business, or (ii) not on arms length basis, or (iii) in confic

with the interests o the Company at large, including the related party transactions that are disclosed

under Note 41 o the notes to nancial statements or the year 2012-13.

(b) Details o non-compliance by the Company, penalties, and strictures imposed on the Company by Stock

Exchange or Securities and Exchange Board o India or any statutory authority, on any matter related tcapital markets, during the last three years: None.

(c) Risk Management:

A detailed review o business risks and the Companys plan to mitigate them is presented to the Audi

Committee o the Board. The Company has been taking steps to mitigate oreseeable business risks

Business risk evaluation and management is an ongoing and continuous process within the Company and

regularly updated to the Audit Committee.

(d) Code o Conduct:

The Company has laid down a Code o Conduct or the members o the Board as well as or all employeeo the Company. The code has also been posted on the Companys website www.britannia.co.in. TheManaging Director has conrmed and declared that all members o the Board and Senior Managemen

have armed compliance with the Code o Conduct.

(e) Public, Rights and Other Issues: None.

() The nancial statements or the year 2012-13 have been prepared in accordance with the applicabl

Accounting Standards prescribed by the Institute o Chartered Accountants o India and as required unde

the Companies (Accounting Standards) Rules, 2006.


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(g) CEO / CFO Certication:

Ms. Vinita Bali, Managing Director and Mr. Vinod Krishna Menon, Chie Financial Ocer, have certied tothe Board in accordance with Clause 49(V) o the Listing Agreement pertaining to CEO / CFO certicationor the nancial year ended 31 March 2013.

(h) Management Discussion and Analysis Report:

This has been separately attached to the Directors Report.

(i) Compliance Reports:

The Board has noted and reviewed the compliance reports rom all unctions pertaining to the respectivlaws applicable to them, which were placed beore the Board at its meetings every quarter during the yeaunder review.

6. MEANS OF COMMUNICATION

Quarterly, Hal-Yearly and Annual Results:

Quarterly, hal-yearly and yearly nancial results are published within the stipulated time as per the ListinAgreement in leading newspapers, i.e. Financial Express (all editions) and Pratidin (Kolkata edition). The

Company also uploads nancial results on its website www.britannia.co.in.The quarterly and hal-yearly reports are not separately sent to each shareholder. However, the Companyprovides the same to individual shareholders, i requested.

Two presentations were made to the institutional investors and to the analysts during the year 2012-13 whichare available on the website o the Company www.britannia.co.in.

7. GENERAL SHAREHOLDER INFORMATION

(a) Annual General Meeting Date, time and venue:

12 August 2013 11 a.m. at Hyatt Regency, JA-1, Sector 3, Salt Lake City, Kolkata 700 098.

(b) Financial calendar (tentative):

Period Approval o Quarterly ResultsFor the rst quarter ending 30 June 2013 2nd week o August 2013

For the second quarter and hal year ending 30 September 2013 2nd week o November 2013

For the third quarter ending 31 December 2013 2nd week o February 2014

For the year ending 31 March 2014 Last week o May 2014

(c) Book closure period : Thursday, 25 July 2013 to Monday, 12 August 2013 (both days inclusive).

(d) Dividend payment date : On or rom 23 August 2013

(e) Listing on Stock Exchanges:

The Companys equity shares are listed on:

1. Bombay Stock Exchange Limited (BSE), Phiroze Jeejeebhoy Towers, Dalal Street, FortMumbai - 400 023.

2. National Stock Exchange o India Limited (NSE), Exchange Plaza, 5th Floor, Bandra Kurla ComplexBandra (East), Mumbai - 400 051.

Debentures remained on the list o securities listed on BSE, NSE and Calcutta Stock Exchange Limited(CSE) till their redemption on 22 March 2013 when the Debt Listing Agreement stood terminated.

Listing ees or equity shares as prescribed have been paid to BSE and NSE up to 31 March 2014.


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() Stock Code:

Stock Exchange Equity Shares

Bombay Stock Exchange Limited 500825

National Stock Exchange o India Limited BRITANNIA

(g) Stock Price Data:

Year / Month Bombay Stock Exchange(BSE)

(Closing Stock Price)

BSE(Sensex)(MonthlyClosing)

National Stock Exchange(NSE)

(Closing Stock Price)

NSE(Nity)

(MonthlyClosing)(in`) (in`)

High Low High Low

2012

April 599.90 543.20 17,318.81 599.90 530.10 5,248.15

May 566.95 506.60 16,218.53 566.10 506.50 4,924.25

June 549.00 511.10 17,429.98 547.90 494.95 5,278.90

July 552.90 462.00 17,236.18 552.15 462.05 5,229.00

August 505.00 450.00 17,429.56 505.00 380.00 5,258.50

September 509.00 468.15 18,762.74 510.00 468.00 5,703.30

October 524.80 462.95 18,505.38 524.90 470.60 5,619.70

November 504.00 400.00 19,339.90 503.80 458.50 5,879.85

December 509.25 486.15 19,426.71 505.00 444.90 5,905.10

2013

January 566.00 468.20 19,894.98 574.90 470.00 6,034.75

February 595.00 463.00 18,861.54 519.00 455.90 5,693.05

March 548.20 478.25 18,835.77 548.15 476.80 5,682.55

(h) Stock Perorma

britannia annual-report 2012-13 (1)

Documents