Britannia Industries

1 Capital commitments and contingent liabilities:
 
 (a) Estimated amount of contracts remaining to be executed on capital
 account and not provided for Rs. 69,509 (Previous year: Rs. 129,895).
 
 (b) Contingent Liabilities for:
 
 (1) Bank guarantee and letter of credit for Rs. 43,799 (Previous year:
 Rs. 169,169).
 
 (2) Discounted cheques Rs. 737,696 (Previous year: Rs. 756,175).
 
 (3) Claims/demand against the Company not acknowledged as debts
 including Excise, Income tax, Sales tax and Trade and other demands Rs.
 822,401 (Previous year : Rs. 809,469).
 
 Note:
 
 (i) Contingent liabilities disclosed above represent possible
 obligations where possibility of cash
 
 outfow to settle the obligation is not remote.  (ii) The above does not
 include non quantifable industrial disputes and other legal disputes
 pending before various judicial authorities.
 
 2 (a) Operating leases
 
 The Company has certain operating leases for vehicles, offce facilities
 and residential premises (cancellable as well as non cancellable
 leases). Such leases are generally with the option of renewal against
 increased rent and premature termination of agreement. Rental expenses
 of Rs.13,019 (Previous year: Rs. 13,429) in respect of obligation under
 operating leases [including minimum lease payments of Rs. 1,343
 (Previous year: Rs. 1,343)] have been recognised in the Proft and Loss
 Account.
 
 Assets on operating lease which represent motor vehicles (acquired
 prior to 1 April 2001) aggregate to Rs. 4,064 (Previous year: Rs.
 5,707). The charge on account of lease rental to Proft and Loss Account
 for the year is Rs. 1,511 (Previous year: Rs. 1,456).
 
 3 The Company has an investment of Rs. 49 (Previous year: Rs. 49) in a
 partnership frm “Britannia Sports” having a capital of Rs. 100
 (Previous year: Rs. 100) in which it holds 49% share of the Proft and
 Loss and the balance share is held by two associate companies, Flora
 Investments Company Private Limited and Gilt Edge Finance and
 Investments Private Limited who hold 26% and 25% respectively. The
 Company has booked its proportionate share of partnership losses which
 is disclosed in the Proft and Loss Account.
 
 Notes:
 
 (a) The above value does not include sale of wheat and by-products on
 conversion of inputs aggregating to Rs. 812,914 (Previous year: Rs.
 609,770), which has been netted off with cost of material.
 
 (b) The above does not include quantities issued for sales promotion.
 
 4 The Company has written back a net amount of Rs. 59,062 (Previous
 year: Rs. 13,145) in respect of liabilities to certain packers and
 others which have been withdrawn and / or settled during the year.
 
 5 Provisions for deferred tax for the current year are after provision
 in respect of earlier years of Rs. 11,246 (Previous year: Rs.Nil).
 
 6 Salaries, wages and bonus and contribution to provident and other
 funds are net of recoveries of Rs. 27,953 and Rs. 2,789 respectively
 for seconded staff costs (Previous year: Rs. 19,546 and Rs. 1,998
 respectively).
 
 7 In accordance with AS 13 - “Accounting for Investments”, notifed u/s
 211(3C) of the Companies Act, 1956, the Company has, based on an
 approved business plan, retained provision of Rs. 325,000 (Previous
 year: Rs. 325,000) for diminution, other than temporary, on long term
 investment made in equity shares of a joint venture company.
 
 8 Directors remuneration of Rs. 60,145 (Previous year: Rs. 51,112 )
 includes :
 
 - Fees and estimated cost of benefts Rs. 29,869 (Privious year : Rs.
 24,453)
 
 - Contribution to Provident Fund, Pension Fund Rs. 2,700 (Previous year
 : Rs. 2,700)
 
 - Perquisites or benefts in cash or in kind Rs. 76 (Previous year : Rs.
 87)
 
 - Commission to Non-wholetime Directors Rs. 17,500 (Previous year : Rs.
 13,872), net of reversal of last years liability of Rs. Nil (Previous
 year : Rs. 1,128)
 
 9 Based on guiding principles in the AS 17 - “Segment Reporting,” the
 primary business segment of the Company is foods, comprising bakery and
 dairy products. As the Company operates in a single primary business
 segment, disclosure requirements are not applicable. The Company
 primarily caters to the domestic market and export sales are not
 signifcant and accordingly there is no reportable secondary segment.
 
 10 Related party disclosures under Accounting Standard 18:
 Relationships
 
 1.  Ultimate Holding Company ABI Holdings Limited (ABIH), UK, The
 Bombay Burmah Trading
 
 Corporation Limited effective from 14 April 2009.  Holding Company
 Associated Biscuits International Limited (ABIL), UK
 
 2.  Subsidiary Companies Strategic Food International Co. LLC, Dubai
 
 Boribunder Finance & Investments Private Limited
 
 International Bakery Products Limited
 
 J B Mangharam Foods Private Limited
 
 Sunrise Biscuit Company Private Limited
 
 Manna Foods Private Limited
 
 Ganges Vally Foods Private Limited
 
 Al Sallan Food Industries Company SAOG, Oman
 
 Flora Investments Company Private Limited
 
 Gilt Edge Finance & Investments Private Limited
 
 Britannia and Associates (Mauritius) Private Limited, Mauritius
 
 Britannia and Associates (Dubai) Private Company Limited, Dubai
 
 Strategic Brands Holding Company Limited, Dubai
 
 Britannia Lanka Pvt. Ltd, Srilanka
 
 Daily Bread Gourmet Foods (India) Private Limited
 
 3.  Fellow Subsidiary Companies Valletort Enterprises Pte Limited,
 Singapore
 
 Spargo Enterprises Pte Limited, Singapore Nacupa Enterprises Pte
 Limited, Singapore Dowbiggin Enterprises Pte Limited, Singapore
 Bannatyne Enterprises Pte Limited, Singapore
 
 4.  Other related parties with whom transactions have taken place
 during the year
 
 - Joint Venture Companies Britannia New Zealand Foods Private Limited
 
 Britannia New Zealand Holdings Private Limited, Mauritius
 
 - Associates Britannia Sports (partnership frm)
 
 Klassik Foods Private Limited Nalanda Biscuits Company Limited
 
 5.  Key Management Personnel (KMP)
 
 Managing Director Ms.Vinita Bali
 
 6.  Relatives of Key Management Personnel None
 
 Notes:
 
 1.  The above does not include related party transactions with retiral
 funds, as key management personnel who are trustees of the funds cannot
 individually exercise signifcant infuence on the retiral funds
 transactions.
 
 2.  The above information has been determined to the extent such
 parties have been identifed on the basis of information available with
 the Company and relied upon by the auditors.
 
 (b) Post Retirement Beneft- Defned Beneft Plans
 
 The Company makes annual contributions to the Britannia Industries
 Limited Covenanted Staff Gratuity Fund and Britannia Industries Limited
 Non Covenanted Staff Gratuity Fund, funded defned beneft plans for
 qualifying employees. The Scheme provides for lumpsum Payment to vested
 employees at retirement, death while in employment or on termination of
 employment of an amount equivalent to 15 days salary payable for each
 completed year of service or part thereof in excess of six months
 except in case of employees covered under Non Covenanted Gratuity Fund
 there is ceiling of Rs. 350. Vesting occurs only upon completion of fve
 years of service, except in case of death or permanent disability. The
 present value of the defned beneft obligation and the related current
 service cost are measured using the projected unit credit method with
 actuarial valuation being carried out at Balance Sheet date.
 
 Notes :
 
 (i) The discount rate is based on the prevailing market yield on
 Government Securities as at the Balance
 
 Sheet date for the estimated term of obligations.  (ii) The expected
 return on plan assets is determined considering several applicable
 factors mainly the
 
 composition of the plan assets held, assessed risks of asset
 management, historical results of the
 
 return on plan assets and the Company’s policy for plan asset
 management.  (iii) The estimate of future salary increases considered
 in actuarial valuation takes into account infation,
 
 seniority, promotion and other relevant factors such as supply and
 demand in the employment
 
 market.  (iv) The disclosure above includes amounts for both Britannia
 Industries Limited Covenanted Staff
 
 Gratuity Fund and Britannia Industries Limited Non Covenanted Staff
 Gratuity Fund.
 
 7 The Company had offered a VRS scheme to workers at its manufacturing
 unit at M.T.H. Road, Padi, Chennai during the month of April 2008. The
 same was accepted by all workers. Consequently, manufacturing
 operations have been suspended effective 7 April 2008.
 
 8 In April 2007, the Commissioner of Income Tax (CIT), Kolkata issued
 a notice to the Company’s Covenanted Staff Pension Fund (BILCSPF)
 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. 121,199 (Previous year: Rs. 121,199) received by it in earlier
 years. The Single Judge of the Calcutta High Court, on a writ petition,
 granted a stay restraining the CIT from proceeding with the show cause
 notice but with a direction to the Company to deposit Rs. 121,199
 (Previous year: Rs. 121,199) (included in Deposits under Schedule I)
 with a nationalized bank in the name of the Fund. On appeal, the
 Division Bench of the Calcutta High Court disposed off the writ
 petition pending before the Single Judge. The Fund fled a Special Leave
 Petition before the Supreme Court against the order of the Division
 Bench. The Supreme Court at its hearing on 12 May 2008 has set aside
 the order of the Division Bench of the Calcutta High Court. As a
 condition of the stay order granted, the Company has, under protest,
 made the deposit as per the direction of Hon’ble Calcutta High Court.
 
 Pursuant to the directions of the Madras High Court, the CIT, Kolkata
 passed orders rejecting the deeds of variation submitted in May 2005 by
 the Pension Fund on technical grounds. The Company has preferred an
 appeal before the Central Board of Direct Taxes, New Delhi challenging
 the order.
 
 A suit has been fled in the City Civil Court, Bangalore, where the
 Hon’ble judge has passed interim orders on 1 January 2009 and 10
 February 2009 directing the Funds to pay pension to the members in
 accordance with the Funds’ calculations. The Funds have since complied
 with the said order.
 
 The Britannia Industries Limited Pensioners Welfare Association had
 also fled a writ petition in the Hon’ble Calcutta High Court seeking
 various reliefs relating, inter alia, to their pension benefts. In
 April 2009, the association has withdrawn this case.
 
 The Company believes, based on current knowledge and after consultation
 with eminent legal counsel that the resolution of the matter. will not
 have material adverse effect on the fnancial statements of the Company.
 
 9 There are no Micro, Small and Medium Enterprises, to whom the
 Company owes dues, which are outstanding for more than 45 days as at 31
 March, 2009. This information as required under the Micro, Small and
 Medium Enterprises Development Act, 2006 has been determined to the
 extent such parties have been identifed on the basis of information
 available with the Company and has been relied upon by the auditors.
 
 10 During the year the Company has received Rs. 1,320 as grant in aid
 for implementation of ISO 22000 on HACCP systems from Government of
 India for Uttarakhand factory.
 
 11 The disclosure required under AS 27 - “Financial Reporting of
 Interests in Joint Ventures has been given below:
 
 12 During the year, there was no signifcant purchase of machinery
 spares that are of irregular usage.
 
 13 Figures in rupees have been rounded off to the nearest thousand,
 unless otherwise stated.