The Directors present their Annual Report together with the Statement
of Accounts for the year ended 31 March 2011.
1. FINANCIAL RESULTS
Rs. MM
Particulars Year ended
31 March 11 Year ended
31 March 10
Gross sales 42,460 34,266
Other income 588 508
profit from operations 1,794 1,248
(PBT before other income,
fnance costs and exceptional
items)
profit before tax 1,981 1,208
Less: Tax 528 43
Net profit 1,453 1,165
Add: profit brought forward 1,448 1,096
profit available for
appropriation 2,901 2,261
Less: Proposed dividend 776 597
Less: Tax on dividend 126 99
Less: Transfer to general 146 117
reserve
Balance carried forward to 1,853 1,448
Balance sheet
Net cash flow from
operating activities 2,431 2,039
2. OVERVIEW OF COMPANY PERFORMANCE
In an environment that is becoming increasingly competitive and in a
business whose profit and profitability are greatly impacted by commodity
infation, profit from operations increased from Rs. 1,248 MM to Rs. 1,794
MM. Your Company added Rs. 8,194 MM to the gross sales, which grew 23.9%.
Earning per Share was Rs. 12.16. The tables below show trends in
performance across key parameters:
In 2010-11 the unprecedented infationary pressures on the consumer food
basket continued, as did commodity infation for the food industry.
Against this adverse economic scenario and continued competitiveness
that eroded the overall industry profit pool, your Company continued to
focus on its growth strategy, led by its Power Brands and at the same
time restructured operations to reduce cost. Britannia bakery brands
including cake, rusk and bread grew 23.9% with biscuit brands outpacing
market growth.
Your Company addressed the cost challenge by signifcantly reducing cost
through consolidating operations, re-structuring manufacturing units,
reducing complexity and eliminating wastages in the value chain. Your
Company will continue and intensify the thrust on cost effectiveness in
the coming year as well.
Your Companys focus on building new capabilities and a robust pipeline
of innovation resulted in several new launches. Coupled with leading
edge go-to-market approaches these innovations tap new sources of
growth and profitable revenue, while building brand differentiation and
relevance. Launches in the Indulgence portfolio continued with
‘Treat-O and ‘GoodDay Choconut and ‘GoodDay Chocochip cookies. Your
Company further strengthened its entry in the mass cookies segment
through the launch of ‘Tiger Krunch cookies in Fruit n Nut and
Chocochip variants. Your Company also entered the functional health
segment with the launch of specially formulated Diabetic-friendly
biscuits under the Nutrichoice brand. On-the- go consumption at the Rs.
5 price point has been a thrust area.
2010-11 saw your Company entering new consumption segments, with the
pilot launch of Breakfast Cereals - ‘Britannia Healthy Start in
Mumbai. This is a delicious and healthy ready-to- cook range of
breakfast options like porridge, oats, upma and poha mixes.
The Companys Dairy operations represent a big pillar for growth.
Despite an unexpected infation in milk prices, growth has been
accelerated in the Dairy vertical and synergies are being secured with
the Britannia bakery business. Operations have also been streamlined
for superior profitability and there have been sustained activities in
the highly competitive cheese portfolio. Investment in new innovations
- Actimind, Dahi, UHT Milk, Tiger Zor choco-milk was also strengthened.
Growth momentum continued and escalated in the emerging categories –
Breads, Cakes and Rusks. Your Company is investing behind these
categories and building consumer relevance and brand differentiation
through new products, new consumption moments as well as through new
communication.
Export out of India continues to grow rapidly at over 30%. Your Company
has added dairy products to its exports range. During the current year
the Company is expanding the range of products and opening new channels
of distribution in key markets.
While the business environment continued to be challenging and
competitive, consumers continued to buy and consume more of the
Companys brands, more often. Your Company was ranked as the ‘Most
Respected FMCG Company by Business World. Consumers once again voted
brand Britannia as # 1 ‘Most Trusted Food Brand and # 5 ‘Most
Trusted Brand across all product categories in an independent survey
conducted by A C Nielsen and The Economic Times. Brand Britannia also
entered the Hall of Fame as it has been voted among the Top 10 Most
Trusted Brands for a continuous period of 10 years.
Britannia won the prestigious IMC Ramkrishna Bajaj National Quality
performance excellence trophy 2010 for two of its units – the Rudrapur
factory and the cake factory in Mangaldoi.
The Britannia Nutrition Foundation (BNF) was founded in this year and
on the eve of National Nutrition Week (1 September 2010), BNF organized
a symposium Indias Malnutrition: Combating the Hard Core in New
Delhi. The symposium saw huge participation and engagement with 19
international and national speakers of repute and expertise, and a 200
strong audience comprising the government sector, the development
sector, the medical and scientifc fraternity.
3. CONSOLIDATED FINANCIAL RESULTS
Your Company has prepared Consolidated Financial Statements in
accordance with Accounting Standard 21(AS21) issued by the Institute of
Chartered Accountants of India. The Consolidated Statements refect the
results of the Company and those of its Subsidiaries and Associates. As
required by Clause 32 of the Listing Agreement with the Stock
Exchanges, the Audited Consolidated Financial Statements together with
the Auditors Report thereon are annexed and form part of this Annual
Report.
The Consolidated turnover of the Company for the year ended 31 March
2011 was Rs. 46,378 MM.
The Consolidated Net profit of the Company for the year ended 31 March
2011 was Rs. 1,343 MM compared with Rs. 1,032 MM in the previous year.
Rs. MM
Particulars Year ended Year ended
31 March 11 31 March 10
Gross sales 46,378 37,963
Other income 649 582
profit from operations 1,700 1,046
(PBT before other
income, fnance costs
and exceptional items)
profit before tax 1,871 1,087
Net profit 1,343 1,032
Performance of Subsidiaries and Associates is presented below:
SUBSIDIARIES AND ASSOCIATES
Your Directors present herewith a broad overview of the operations and
financials of Subsidiaries and Associates of your Company.
Britannia Dairy Private Limited (BDPL)
During the current year, the Company operated in a highly infationary
environment and faced huge cost pressures owing to the surging price of
milk which increased by around 17% compared to the previous year. In
spite of this the business grew profitably by focusing on its value
added portfolio like cheese and registered a turnover of Rs. 2,185 MM
compared to Rs. 1,888 MM in the previous year - a growth of 16%. The
business recorded a net profit of Rs. 42 MM (after considering an
amortization charge of Rs. 130 MM) compared to a net loss of Rs. 344 MM
(including an amortization charge of Rs. 498 MM) in the previous year.
Your Company managed this by aggressively controlling costs and
improving realization for its products in a very competitive market.
With more value-added products in the pipeline, your Companys dairy
vision continues to be anchored in building differentiation by giving
delightful consumer experiences. The plan is to accelerate profitable
growth by augmenting and leveraging sales and distribution and
accessing new geographies.
Daily Bread Gourmet Foods (India) Private Limited (Daily Bread)
Daily Bread is a manufacturer and retailer of premium, gourmet bakery
products, including specialty breads, cakes and cookies which it sells
to institutional, modern trade and retail segments. In 2010-11 Daily
Bread expanded its retail and franchisee operations in Bangalore and
Hyderabad.
Daily Bread has achieved a turnover of Rs. 192 MM during the year as
against Rs. 147 MM in the previous
year registering a growth of over 31%. Daily Bread has made signifcant
improvement in its operations to achieve cash break-even for the year,
compared to cash loss of Rs. 37 MM in previous year.
Strategic Food International Company LLC, Dubai (SFIC)
Despite the challenging global economic scenario and a real population
decline in Dubai, UAE where the Company has a sizeable presence, the
Company increased sales by 12% to AED 110.8 MM (Rs. 1,343 MM) for the
year ended 31 March 2011 as against the previous years levels AED 99.3
MM (Rs. 1,280 MM). For the year ended 31 March 2011, SFIC posted a net
loss of AED 10.8 MM (Rs. 131 MM), compared to a net loss of AED 14.4 MM
(Rs. 185 MM) for the previous year. A new CEO was recruited in September
2010 to lead the business to the next level.
During the year, the Company increased its market share in the GCC
region and made signifcant brand investments. These initiatives have
strengthened the Companys competitive position, with share gains in
all markets in the GCC where the Company operates. The recent upheaval
in North Africa has affected business in markets such as Libya but the
Company is confdent that this will be made up in other markets.
Al Sallan Food Industries Company SAOC (ASFI)
Sales for the year ended 31 March 2011 were recorded at Omani Rials
(OMR) 7.52 MM (Rs. 869 MM) as against OMR 7.56 MM (Rs. 924 MM) for the year
ended 31 March 2010. Unrest in Sohar led to loss of production in
February and March 2011. The Company for the frst time since its
inception recorded a net profit of OMR 0.15 MM (Rs. 18 MM) for the year
ended 31 March 2011 compared to a net loss of OMR 0.68 MM (Rs. 83 MM) in
previous year, after considering an interest waiver from the National
Bank of Oman of OMR 0.63 MM (Rs. 74 MM) following the early settlement of
the outstanding loan. profitability was adversely affected owing to
increase in commodity prices and lower sales due to the challenging
global economic scenario.
Investment Companies
M/s. Boribunder Finance and Investments Private Limited (Boribunder),
M/s. Flora Investments Company Private Limited (Flora) and M/s. Gilt
Edge Finance and Investments Private Limited (Gilt Edge) form the
Investment Associates of your Company. Boribunder is a wholly owned
subsidiary of your Company.
The combined revenue and profit of the investment companies for the year
ended 31 March 2011 was Rs. 30.49 MM and Rs. 23.80 MM respectively.
Further, pursuant to Section 4 of the Companies Act 1956, the following
companies engaged in manufacture of biscuits at various locations are
also deemed to be subsidiaries of your Company. The Gross Income and
Net profit of the said subsidiaries during 2010-11 are as under:
Rs. MM
Name of Subsidiary Gross Net
income profit
/(loss)
International Bakery Products 139 0.7
Limited, TC Balam
J B Mangharam Foods Private 183 7.1
Limited, Gwalior
Manna Foods Private Limited, 2 0.07
Kolkata
Ganges Vally Foods Private 136 (0.98)
Limited, Kolkata
Sunrise Biscuit Company 821 (23.0)
Private Limited, Guwahati
Britannia and Associates (Mauritius) Private Limited (BAMPL)
BAMPL, a Company formed in Mauritius and a wholly owned subsidiary of
the Company, is the holding company of Britannia and Associates (Dubai)
Private Co. Limited, a Jebel Ali Free Zone Company, which in turn holds
investments in Strategic Food International Co. LLC, Dubai and Al
Sallan Food Industries Company SAOC, Oman.
The combined revenue and loss of holding companies for the period ended
31 March 2011 were USD 0.35 MM (Rs. 16.02 MM) and USD 0.45 MM (Rs. 20.23
MM) respectively.
Welfare Companies
Britannia Employees General Welfare Association Private Limited,
Britannia Employees Educational Welfare Association Private Limited and
Britannia Employees Medical Welfare Association Private Limited are the
three other Associates of your Company. These are companies limited by
guarantee, have no share capital and have been set up for general,
educational and medical welfare of the employees of your Company. They
are not engaged in any commercial activity.
4. DIVIDEND
The Board of Directors is pleased to recommend a dividend of 325% on
the paid up equity share capital of the Company, which works out to Rs.
6.50 per share, for consideration and approval by the shareholders at
the Annual General Meeting. The total payout amounts to Rs. 902 MM
including dividend distribution tax of Rs. 126 MM.
5. BRANDS
Brands provide the momentum for business growth and during the year,
investment in Research and Development, Advertisement and Sales
Promotion increased by 12.7% and coupled with the renovation and
innovation efforts, resulted in 23.9% growth.
Several new and renovated offerings were successfully introduced across
the entire portfolio that include Milk Almond Cookies, Fruit Dhamaka
Cookies, Tiger Krunch - Fruit n Nut/Chocochips,
Diabetic friendly biscuits under Nutrichoice, Time Pass Toasted snack
variants, Maska Chaska variants, Treat-O and GoodDay - Chocochips and
Choconut. Signifcant introductions in Bread and Cake include Sweet
Bread, Milk Bread, Healthy Slice Bread, Premium Sandwich variants and
Fruit chunk cakes, and provided signifcant impetus to the Bread and
Cake business.
Your Company continues to invest signifcantly in its
capability-building and structured innovation process, which is
refected in the launch of varied and differentiated offerings to
strengthen the business. Your Company has also initiated the process
for breakthrough innovations through interactions with reputed
institutions, which is expected to help build a strong platform for
sustained and signifcant business leadership and growth.
Signifcant innovation in packaging has led to the introduction of
attractive and cost-effective new packs catering to increasing purchase
and consumption both in-home and out of home.
6. SUPPLY CHAIN
The singular focus of supply chain has been to improve availability of
stocks and reduce overall cost. A continuous focus on availability
through specifc projects in the customer service area improved the
availability of SKUs at depots and with customers. New tools have been
introduced for price discovery and this has brought in vendors with new
capability. Further, a focused effort was made to improve volumetric
utilization of trucks, which led to good savings. In addition, an IT
tool was used to generate the optimum network and this was rigorously
followed to deliver the least cost in manufacturing and distribution.
7. QUALITY STANDARDS
Each year your Company re-visits its quality standards and makes them
more stringent.
Your Companys Rudrapur Unit (Biscuits) and one of its Contract
Packers, Sunandram Foods Private Limited at Guwahati (Cakes) have been
awarded the Performance Excellence Trophy in Manufacturing by The
Indian Merchant Chambers and Ramkrishna Bajaj National Quality Awards
Committee which includes a Crystal Trophy, a certifcate and a Citation.
The requirements for this award are based on the Malcolm Baldridge
model of the US.
It is your Companys endeavor to deliver excellence in quality and
there are specifc programs in place to pervasively drive this quality
culture.
To strengthen the Companys capability for exports to EU, its Contract
Packer, M/s. Uttam Foods at Khopoli (Maharashtra) has been certifed for
BRC (British Retail Consortium) Standards.
8. MANUFACTURING OPERATIONS
Your Company has revised its manufacturing footprint to support
profitable growth. In that context, capacities were created at relevant
locations to meet demand. Additionally, there was the continual focus
on de-bottlenecking existing capacities and improving the productivity
levels at current units.
The creation of these capacities and capabilities has helped the
Company deliver the volume growth at improved customer service levels
and lower costs.
9. INFORMATION TECHNOLOGY
Your Company continues to invest in Information Technology to improve
operational effciencies and enhance productivity. During the year a
business intelligence system was implemented to enable effective
analysis of secondary sales information to drive top line growth by
identifying new opportunities. A project has also been initiated to
connect the contract manufacturing units and depots to the Companys
data centre in Bangalore through a more effcient network to ensure
faster response to IT systems.
During the year, your Company also consolidated its core ERP
infrastructure using new generation servers leading to signifcant
reductions in energy/ power consumption and enhanced effciencies.
10. ENVIRONMENT AND SAFETY
Several initiatives were continued by the Company as part of energy
saving measures including a new generation oven piloted in one of its
own units. The drive for energy conservation is always a key priority
and your Company continually strives to achieve this through process
improvements and through enhancing equipment capability. Environment
friendly fuels like propane, LPG, PNG and biodiesel were used for
baking purposes wherever such fuels were available, to reduce
pollution.
As part of its overall safety initiatives, your Company has implemented
several safety measures at its Corporate Offce at Bangalore mainly in
terms of:
. Implementation of Fire Safety Measures in compliance with National
Building Code and Fire Norms
. Creation of Emergency Control Room
. Emergency Preparedness and Evacuation
11. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company continues to pursue its Corporate Responsibility by
driving the Health and Nutrition agenda in India. Your Company is
moving along the path of Better for You products and Good for You
products. Better for You includes initiatives of removal of unhealthy
content like transfat which the Company undertook three years ago and
continues to be the leading Company doing the same. Your Company now
has a portfolio of Good for You products which are vitamin and
mineral enriched – these products constitute 55% of your Companys
product portfolio. In the last year, your Company pioneered
energy-snacks specially created for people with diabetes – Nutrichoice
Diabetic Friendly Essentials. As you would be well aware, India is the
Diabetes capital of the world.
Another well documented statistic is that India suffers from wide
spread micronutrient defciency - the most notable being Iron Defciency
or Anaemia which affects 70% of the Indian population. Your Company
continues to support several NGOs by supplying specially formulated
Iron Fortifed Biscuits.
Your Company pursues relevant partnerships with key organizations in
Nutrition like GAIN (Global Alliance for Improved Nutrition), UNWFP
(United Nations World Food Program), WBI (World Bank Institute), CGI
(Clinton Global Initiative), etc. Your Company has been recognized for
its CSR efforts in the last year by the eminent Rotary Club of India
and the Navjyoti Foundation.
Your Company also set up the Britannia Nutrition Foundation which seeks
to Secure every childs right to growth and development through good
food everyday. The objective of the Britannia Nutrition Foundation is
to work in three core areas - Scientifc Knowledge Building and
Dissemination, Education and Awareness building at grass root levels,
Creating a Platform for Action. Your Company organised an international
symposium on 1 September 2010 in New Delhi coinciding with the National
Nutrition Week. The symposium was titled Indias Malnutrition -
Combating the Hard Core. It had 19 international and national speakers
of eminence from the scientifc and medical fraternities, the
bureaucracy as well as the development sector. The symposium brought to
light the success stories from around the world in combating
malnutrition along with the scientifc advancements in the area. The
fnal session of the symposium saw a healthy panel discussion on
creating a platform for action in India.
Your Company also sponsors and participates in health and nutrition
seminars to further the cause of awareness building. Some of them are:
. International Symposium on Transfats, Delhi, April 2010
. Sponsorship of Diabetes Blue Fortnight, World Diabetes Day, 14
November 2010
. 55th Annual National Conference of IPHA (Indian Public Health
Association), Belgaum, January 2011
. 1st National Conference on Nutritional Anaemia, LTMG Hospital,
Mumbai, January 2011
12. SUB-DIVISION OF EQUITY SHARES
In terms of the approval accorded by the shareholders at the Annual
General Meeting held on 9 August 2010, each equity share of the face
value of Rs. 10 each fully paid up was sub-divided into 5 equity shares
of the face value of Rs. 2 each fully paid up on and from 9 September
2010 (the Record Date fixed by the Board for the purpose).
13. VOLUNTARY DELISTING OF EQUITY SHARES
The Companys equity shares were voluntarily delisted from the Calcutta
Stock Exchange Limited (CSE) with effect from 12 January 2011 in terms
of the SEBI (Delisting of Equity Shares) Regulations, 2009. However,
the Companys equity shares continue to be listed on the Bombay Stock
Exchange Limited (BSE) and the National Stock Exchange of India Limited
(NSE) having nation wide terminals.
14. PENSION
In respect of the notice received from the Commissioner of Income Tax
(CIT), Kolkata in April 2007, to the Companys Covenanted Staff Pension
Fund asking it to show cause why recognition granted to the Fund should
not be withdrawn for refunding in the year 2004, the excess
contribution of Rs. 121.20 MM received by it in earlier years, the
Honble Supreme Court of India has directed the Single Judge of the
Honble Calcutta High Court to hear the same.
Pursuant to the directions of the Honble Madras High Court, the CIT,
Kolkata passed orders rejecting the deeds of variation submitted in May
2005 by the Companys Pension Funds on technical grounds. The Company
preferred appeals before the Central Board of Direct Taxes (CBDT), New
Delhi challenging the orders of the CIT. CBDT passed orders in the said
appeals in March, 2011 directing the Company inter alia to submit deeds
of variation incorporating the modifcations in line with the directions
made in the orders effective 1 November 2004. The modifed deeds of
variation in line with the directions contained in the CBDT orders have
already been fled with the CIT, Kolkata, for his approval. In writ
petitions fled by some of the pensioners, the Honble Madras High Court
has passed an interim order restraining the CIT, Kolkata, from
approving the deeds of variation pending disposal of the writ
petitions.
A suit was fled by the Britannia Industries Limited Pensioners Welfare
Association (‘the Association) in the Honble Court of City Civil and
Sessions Judge, Bangalore, where the Honble Court passed interim
orders on 1 January 2009 and 10 February 2009 directing the Funds to
pay pension to the members in accordance with the computation made and
submitted by the Pension Funds to the Court. This computation was on a
defned contribution basis, and is consistent with the pension offered
by the Pension Funds to eligible employees at the time of their
retirement/exit. The Funds have been complying with the said order. In
April 2010, the Honble judge passed another interim order requiring
the Funds to pay pension as per Rule 11(a) of the Pension Fund Rules,
i.e. on Defned Beneft Basis, and gave the Funds 2 months time for
complying with the order.
In an appeal fled against this order in the Honble Karnataka High
Court, the Honble High Court in April 2010 modifed the Trial Courts
order so as to extend the time limit from 2 months to 3 months and in
July 2010, further modifed the Trial Courts order directing inter alia
that the pension shall be paid as per Rule 11(a) from the date of fling
of the suit by the Association in the Honble Bangalore City Civil
Court, i.e. with effect from 17 June 2008.
The Company fled Special Leave Petitions (SLPs) in the Honble Supreme
Court against the above order of the Honble Karnataka High Court. The
Honble Supreme Court passed an order in January 2011 disposing of the
SLPs and directing inter alia that the interim order passed by it in
September 2010 directing that the Pension Funds should continue to pay
pension as per the interim order passed by the Honble Bangalore City
Civil Court on 1 January 2009 would continue till disposal of the suit
by the Trial Court.
The proceedings in the main suit are currently in progress in the
Honble Bangalore City Civil Court.
The above matters have been dealt with in Note No. 27 of schedule S to
the Accounts, which are self- explanatory.
15. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Details of energy conservation, technology absorption, foreign exchange
earnings and outgoings in accordance with the provisions of clause (e)
of sub-section (1) of Section 217 of the Companies Act, 1956, read with
the Companies (Disclosure of the Particulars in the Report of Board of
Directors) Rules, 1988, are given as Annexure ‘A to this Report.
16. CORPORATE GOVERNANCE
In accordance with Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate report on corporate governance along with the
Auditors Certifcate on its compliance is attached to this Report.
17. DIRECTORS
Mr. Pratap C. Khanna, Director, passed away on 12 February 2011. He was
85. He had a long association with the Company since 1948 in various
capacities including as General Manager of its Delhi Branch and as a
Director from 1973 to 1981 and from 1993 till his death in February
2011 and as a Member of the Audit Committee from 2008 to 2011. The
Board records its sorrow and deep sense of loss on the passing away of
Mr. Khanna.
Your Board had appointed Dr. Ajai Puri as a Director with effect from
30 April 2009 in the casual vacancy caused by the resignation of Mr.
Philippe Loic Jacob. He holds offce up to the date of the forthcoming
Annual General Meeting under Section 262 of the Companies Act, 1956
read with Article 112 of the Articles of Association of the Company,
and is eligible for appointment as a Director of the Company.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Nusli N Wadia, Mr. A K
Hirjee and Mr. Jeh N Wadia, Directors, retire by rotation at the
forthcoming Annual General Meeting and are eligible for re-appointment.
18. PARTICULARS OF EMPLOYEES
Information as per Section 217 (2A) of the Companies Act, 1956, (‘the
Act) read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report. However, as per the provisions of Section
219(1) (b) (iv) of the Act, the report and accounts are being sent,
excluding the statement containing the particulars to be provided under
Section 217(2A) of the Act. Any member interested in obtaining such
particulars may inspect the same at the Registered Offce of the Company
or write to the Company Secretary for a copy thereof.
19. EMPLOYEE STOCK OPTION SCHEME (ESOS)
Requisite disclosure in respect of the Employee Stock Option Scheme in
terms of Guideline 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines 1999, has been provided in Annexure ‘B to this Report.
20. AUUITORS
M/s. B S R & Co. retire in accordance with the provisions of the
Companies Act, 1956. They have indicated their willingness to continue
in offce and are recommended for re-appointment as the Companys
Auditors for the ensuing year.
21. DIRECTORS RESPONSIBILITY
Pursuant to sub-section (2AA) of Section 217 of the Companies Act,
1956, your Directors, based on representations from the Operating
Management, confrm that:
(a) In the preparation of annual accounts, the applicable accounting
standards have been followed and there are no material departures;
(b) They have, in selection of the accounting policies, consulted the
statutory auditors and applied these policies consistently, making
judgments and estimates that are reasonable and prudent, so as to give
a true and fair view of the state of affairs of the Company as on 31
March 2011 and of the profit of the Company for the year ended 31 March
2011;
(c) They have taken proper and suffcient care, to the best of their
knowledge and ability, for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(d) They have prepared the annual accounts on a going concern basis.
22. ACKNOWLEDGEMENTS
The Directors would like to thank all stakeholders, namely, customers,
shareholders, dealers, suppliers, bankers, employees and all other
business associates for the continuous support given by them to the
Company and its management.
ANNEXURE A To THE DIRECTORS REPORT
Information under Section 217 (1) (e) of the Companies Act, 1956 read
with Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 and forming part of Directors Report for the
year ended 31 March 2011.
A. CONSERVATION OF ENERGY
(a) Following energy conservation measures were undertaken during
2010-11:
(i) Enhancement of cream shell production by 40% at Uttarakhand through
optimum extension of baking oven length resulting in better utilisation
of line equipments thereby enabling reduction in energy consumption per
tonne.
(ii) Energy effcient continuous mixing system installation in
Uttarakhand replacing conventional mixing system, which delivered
substantial energy conservation.
(iii) Installation of roof top air extractors (operating without
electricity) in place of electrical exhaust fans in Uttarakhand
factory.
(iv) Installation of waste heat hot water generator at Delhi, enabling
reduction of energy consumption and also ensuring reduction on impact
on environment. The hot water generated is being used in the pre-mixing
section.
(v) Installation of heater in the pre-oven section at Delhi, enabling
core heating of the product thereby achieving baking time reduction,
productivity enhancement and reduction in energy consumption per tonne.
(vi) Pre-heating of air in the Baking Oven at Kolkata factory has
helped in improving combustion effciency, thereby ensuring energy
conservation.
(vii) All sodium vapor lamps were replaced with metal halide lamps in
Uttarakhand factory.
( v i i i ) Installation of CFL lights replacing conventional tube
lights at possible locations.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:
Investment of Rs. 40 MM planned in 2011-12 for investing in various
projects relating to reduction in energy consumption
(c) Impact of measures at (a) and (b) above: Electricity consumption
reduced to 116.71 units/mt of Biscuit production from 123.71 units/mt,
resulting in reduction of almost 6% over the previous year.
The rate per unit of electricity purchased was higher at Rs. 4.95 per
kwh, compared with Rs. 4.59 per kwh in the pervious year, due to increase
in rate per unit of Electricity in Kolkata.
Own generation of electricity was higher by 100% since Uttarakhand had
to rely more on own generation.
The increase in cost per unit of own generation as well as the rate per
unit of baking fuel is due to the increase in cost of HSD and other
fuels used in baking.
Due to increase in cost of Propane, usage of this fuel for baking was
only for 6 months at Uttarakhand. This had also contributed to higher
rate per unit of baking fuel.
Consequent upon the energy saving measures initiated, the electricity
consumption for biscuits per tonne has reduced by 6% as compared to
previous year.
Owing to change in product and SKU mix, as a few products like Jim Jam
consume higher energy due to process complexity, there was marginal
increase in baking fuel consumption per unit of biscuit production.
Technology absorption, adaptation and innovation
(a) Efforts in brief made towards absorption, adaptation and
innovation:
Various actions were initiated for upgradation of technology and
automation in specifc areas.
. New pre-heating technology in the baking process is being tested.
This has a potential to increase the plant output by around 10%,
depending on variety and SKU.
. Continuous mixing of ingredients has been implemented at Uttarakhand.
. Packing machine speed enhancement has been effected through
Automation and Servo controlled motion.
(b) Benefts derived as a result of the above:
The above initiatives resulted in improved productivity, reduction of
wastages, better energy utilization, process improvements and enhanced
product quality.
(c) Details of imported technology:
(i) Technology imported: Nil
(ii) Year of import: Not applicable
(iii) Has the technology been fully absorbed?: Not applicable
(iv) If not fully absorbed, areas where this has not taken place,
reasons therefor and future plans of action: Not applicable.
B. TECHNOLOGY ABSORPTION
Research and development (R & d)
Details of efforts made in technology absorption are
1. Core areas of research by the Company:
(i) Introduction of ‘Ready to Cook range of products.
(ii) The investment behind upgradation of basic research led to the
successful launch of ‘Diabetic friendly cookies with validated claims.
(iii) Continuous research in the area of nutrition, analytical
techniques, ingredients, packaging materials, process technology and
food safety.
(iv) Partnership with leading NGOs / Institutes initiated for
delivering specially formulated and fortifed products.
2. Benefts delivered as a result of above R&d initiatives:
(i) New products launched:
. Fruit Dhamaka Cookies
. Diabetic-friendly Cookies
. Healthy Start Range
. Almond Cookies
. Chocolate Biscuits
(ii) Manufacturing and exporting range of products:
. Digestive for SFIC
. Nutro cream renovation
(iii) Improved products with technology upgradation and cost
effciencies:
. Mariegold, Vitamariegold
. Thin Arrowroot
. Nicetime
. Treat-O
(iv) Packaging upgradation for differentiation and serving different
consumption occasions and target groups:
. Chocochip & Choconut re-launch with differentiated packaging formats.
. Britannia Shubh Kamnayaen offerings.
. Promotional offerings.
. New launches with differentiated packaging materials in
Diabetic-friendly Cookies and Time pass variants.
(v) Rewards and recognition:
. INDIASTAR Award for Cuptainer and BSK Packaging.
3. Future plan of action:
Your Company will continue to focus on technology led innovations and
effectively apply the same in cost-effcient initiatives across
portfolio:
(i) New areas of research to facilitate product introduction in new
beneft categories and upgrading the existing offerings to provide value
for spend.
(ii) Differentiated and consumer-appealing product/ pack propositions
catering to cross-sections of consumers.
(iii) Continuous improvement and strengthening of the process of
‘Concept to Commercialisation to ensure ‘FIRST-TIME RIGHT delivery.
(iv) Research in wheat characteristics, baking technology, sensory
sciences, functional foods, specifc nutrition needs and food safety.
(v) New partnerships to explore alternative cereals/ fours and fat
reduction/replacements to drive the health and nutrition agenda
further.
4. expenditure on R&d Rs. MM
31 March 11
Capital 47.48
Recurring 45.34
Total 92.82
Total R & D expenditure as a % of 0.219%
gross turnover
On behalf of the Board
Mumbai Nusli N Wadia
27 May 2011 Chairman
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