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Directors Report of Britannia Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors present their Annual Report together with the Statement of Accounts for the year ended 31 March 2015.

1. FINANCIAL RESULTS

Rs. in crores

Particulars Year ended Year ended 31 March 15 31 March 14

Sale of Products 7,269.26 6,347.85

Other Operating 75.53 75.30

Revenues

Other Income 87.53 34.82

Profit from Operations 654.23 533.24

(PBT before other income, finance costs and exceptional items)

Profit before exceptional 740.55 562.62 items and tax

Exceptional Items* 42.06 (20.00)

Profit Before Tax 882.61 542.62

Less: Tax Expense 260.20 172.79

Net Profit 622.41 369.83

Add: Profit brought 491.15 326.89 forward

Profit available for 1,113.56 696.72 appropriation

Less: Proposed Dividend 191.88 143.91

Less: Tax on Proposed 39.06 24.46 Dividend

Less: Dividend - 0.22 (including tax on dividend) on equity shares issued under ESOS after the year end

Less: Transfer to General 62.24 36.98 Reserve

Less: Additional 9.31 - depreciation due to revision in useful life of Fixed Assets as per Companies Act, 2013 (Net of Deferred tax)

Balance carried forward 811.07 491.15 to Balance Sheet

Net Cash Flow from 515.33 614.51 Operating Activities

* Includes profit on sale of land & building of Rs. 159.92 crores, provision for diminution in value of investments in Daily Bread Gourmet Foods (India) Private Limited of Rs. 4 crores and Voluntary Retirement Scheme ("VRS") related cost to all workmen at Delhi factory of Rs. 13.86 crores.

2. OVERVIEW OF COMPANY PERFORMANCE

In an economic environment, wherein revenue growth in the FMCG sector has slowed down, your Company achieved a sales growth of 14.5% and added Rs. 921.41 crores to sales. Profit from operations increased 22.7% from Rs. 533.24 crores to Rs.654.23 crores. Earnings per share (of Rs. 2/- each) increased from Rs. 30.87 to Rs. 51.90.

During the year, your Company focused on product innovation, brand building and distribution to grow faster than the market. Your Company's brands have become iconic over time due to a combination of superior product and endearing communication.

Your Company's focus on building new capabilities and a robust pipeline of innovation resulted in new launches in the form of NutriChoice Heavens, Good Day Chunkies and Britannia Nut n Raisin Romance Cake. Coupled with leading edge go -to -market approaches, these innovations tap new sources of growth and profitable revenue, while building brand differentiation and relevance.

Your Company is focused to balance cost, quality and aspiration in its brand for consumer affordability at every price point. Cost effectiveness has been a key pillar of your Company's value creation strategy and this was achieved through scale in operations, technology interventions, complexity and wastage reduction in the value chain along with efficient management of working capital. Your Company will continue and intensify the thrust on cost effectiveness in the coming year as well.

3. DIVIDEND

The Board of Directors are pleased to recommend a dividend of 800% on the paid up equity share capital of the Company, which amounts to Rs. 16/- per share, for consideration and approval by the Members at the Annual General Meeting. The total payout amounts to Rs. 230.94 crores including dividend distribution tax of Rs. 39.06 crores.

4. CONSOLIDATED FINANCIAL RESULTS

Your Company has prepared Consolidated Financial Statements in accordance with Accounting Standard 21 - "Consolidated Financial Statements", prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The Consolidated Financial Statements reflect the results of the Company and those of its Subsidiaries and Associates. As required by Clause 32 of the Listing Agreement the Audited Consolidated Financial Statements together with the Independent Auditor's Report thereon are annexed and form part of this Annual Report.

Consolidated Sale of Products of your Company for the year ended 31 March 2015 was Rs. 7,944.18 crores compared with Rs. 6,945.52 crores in the previous year, a growth of 14.4%. Consolidated Net Profit for the year ended 31 March 2015 was Rs.688.64 crores compared with Rs. 395.35 crores in the previous year, a growth of 74.2%. Rs. in crores Year ended Year ended Particulars 31 March 15 31 March 14

Sale of Products 7,944.18 6,945.52

Other Operating Revenues 83.33 83.39

Other income 87.96 33.59

Profit from Operations (PBT before other income 719.43 544.02 and finance costs)

Profit Before Tax 949.59 569.32

Net Profit 688.64 395.35

SUBSIDIARIES & ASSOCIATES

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of our Subsidiaries and Associates in the prescribed format AOC-1 has been annexed and forming part of this Report.

The statement provides the details of performance, financial position of each of the Subsidiaries and Associates. Your Company does not have any Material Subsidiary (as defined under the Listing Agreement) as on 31 March 2015.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each Subsidiary, are available on our website: www.britannia.co.in.

Your Directors present herewith a broad overview of the operations and financials of Subsidiaries and Associates of your Company:

Britannia Dairy Private Limited (BDPL)

The Dairy business of your Company was favourably impacted by moderate inflation in milk price during the year and the business grew profitably by focusing on value added products and ensuring higher realization. The business registered a turnover of Rs. 329.48 crores compared to Rs. 299.32 crores in the previous year, a growth of 10.1% and achieved a Net Profit of Rs. 29.47 crores compared to Rs. 10.67crores in the previous year, a growth of 176.2%.

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

Daily Bread is a manufacturer of premium gourmet bakery products, including specialty breads, cakes, pastries and cookies. Its operations are largely confined to Bangalore. The turnover (net sale of products) of Daily Bread was Rs. 15.75 crores during the year, compared with Rs. 19.94 crores in the previous year. Loss for the year was Rs. 3.50 crores compared to Rs. 3.30 crores in the previous year. Strategic Food International Co. LLC, Dubai (SFIC) SFIC sales increased by 22.9% at AED 19.86 crores (Rs. 330.65 crores) compared with AED 16.16 crores (Rs. 265.71 crores) for the previous year. SFIC posted a net profit of AED 1.94 crores (Rs. 32.34 crores) as compared to AED 0.29 crores (Rs. 4.74 crores) in the previous year. Continued focus on product mix, productivity improvement and cost efficiencies helped to drive a profitable growth.

Al Sallan Food Industries Co. SAOC (ASFI)

ASFI sales are primarily to SFIC and for the year ended 31 March 2015 closed at RO 1.02 crores (Rs. 162.20 crores) as compared to RO 0.86 crores (Rs. 135.30 crores) for the previous year. It posted a net profit of RO 0.20 lakhs (Rs. 0.32 crores) against a loss of RO 2.13 lakhs (Rs. 3.34 crores) in the previous year.

Britannia and Associates (Mauritius) Private Limited, Mauritius (BAMPL)

BAMPL, a Company formed in Mauritius is a wholly-owned subsidiary of your Company, is the holding Company of Britannia and Associates (Dubai) Private Company Limited, a Jebel Ali Free Zone Offshore Company, which in turn holds investments in Strategic Food International Co. LLC, Dubai, Al Sallan Food Industries Co. SAOC, Oman and Strategic Brands Holding Company Limited, Dubai, a Jebel Ali Free Zone Offshore Company.

The combined revenue and loss of holding companies for the year ended 31 March 2015 was USD 0.08 crores (Rs. 5.08 crores) and USD 0.002 crores (Rs. 0.14 crores) compared to USD 0.13 crores (Rs. 7.69 crores) and profit of USD 0.005 crores (Rs. 0.30 crores) respectively in the previous year.

Britannia Dairy Holdings Private Limited, Mauritius (BDH)

BDH, a Company formed in Mauritius is a wholly- owned subsidiary of your Company. BDH holds certain trademarks relating to the Dairy business of your Company. BDH is not engaged in any commercial activity.

Investment Companies

Boribunder Finance and Investments Private Limited (Boribunder), Flora Investments Company Private Limited (Flora) and Gilt Edge Finance and Investments Private Limited (Gilt Edge) form the Investment Subsidiaries of your Company.

The combined revenue and profit of the Investment Subsidiaries for the year ended 31 March 2015 was Nil and Rs. 0.17 crores respectively.

Further, pursuant to Section 2(87) of the Companies Act, 2013, the following Companies engaged in manufacturing of biscuits at various locations are also Subsidiaries of your Company. The Revenue from Operations / Net Sales and Net Profit of the said Subsidiaries for the year ended 31 March 2015 are as under:

Rs. in crores

Revenue from Name of Subsidiary Operations/ Net Profit Net Sales

International Bakery Products Limited 25.94 (0.82)

J B Mangharam Foods Private Limited 25.44 0.02

Manna Foods Private Limited 41.48 1.26

Ganges Vally Foods Private Limited 20.96 0.10

Sunrise Biscuit Company Private Limited 147.09 0.22

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 three of the other Subsidiaries of your Company. These are Companies limited by guarantee, with 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.

Besides the above, there are two other Subsidiary Companies namely, (i) Vasana Agrex and Herbs Private Limited and (ii) Snacko Bisc Private Limited. They are not engaged in any commercial activity. The financial details of these Companies are forming part of this Report.

There are two Associate Companies namely, (i) Klassik Foods Private Limited and (ii) Nalanda Biscuits Company Limited. The financial details of these Companies are forming part of this Report.

5. RESERVES

Your Company has transferred an amount of Rs. 62.24 crores to the General Reserve for the Financial Year ended 31 March 2015.

6. SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31 March 2015 was Rs. 23.99 crores. There has been no change in the Equity Share Capital of the Company during the year.

7. PUBLIC DEPOSITS

The Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.

8. THE BRITANNIA PROMISE TO SPREAD DELIGHT

Your Company's oath to deliver a unique and ecstatic experience to its consumers, by maximizing on aspiration-worthiness, cost-effectiveness and quality has continued to be the guiding principle of operations. Guided by the Britannia Promise, the Management of your Company constantly assesses the current state of our products versus the desired state. The rigour and commitment behind product innovations which delivered new -to -market experiences is testimony to the promise being at the core of our being. This reflects in our performance in the market place as well. Several opportunities are in the pipeline and will be rolled out in the coming year, each delighting consumers and strengthening our brand credentials.

Your Company recognizes that it is only as good as the last product it has delivered to consumers. Keeping this in mind, all employees of your Company continuously challenge themselves to ensure that the products that reach consumers are not only superior to competitors in their design but they also reach them with consistently high quality. Consequently, each employee of your Company maintains market-place-vigilance on a regular basis and is effectively an independent market information source reporting back into a mechanism designed to identify and correct market place deficiencies quickly and comprehensively.

9. BRANDS

Brands are your Company's competitive edge and hence keeping them vibrant and relevant is paramount. The year 2014-15 saw a slew of new initiatives - big innovations, renovations, promotions, activations and advertising which kept your Company's brands salient in the Indian Consumer's minds.

The year 2014-15 saw subdued consumer sentiment on account of economic slowdown, but your Company created excitement with its brand, in addition to delivering good quality consistently to achieve its goals. Big strategic shifts were made to augment its media presence along with building strong associations in the field of Cricket and Cinema to touch every Indian's heart. The Company also took big strides in the Digital space by associating with leaders in E-Commerce and by expanding its own digital footprint to help reach and connect with the growing base of our digital savvy consumers.

Your Company's pillar brands - Good Day, NutriChoice, MarieGold, 50-50 and Milk Bikis continued their strong growth through product superiority, impactful advertising, activations and by staying price- competitive.

The two biggest strength areas of your Company - Indulgence and Health saw heightened activity. The year 2014-15 saw a renewed vigour with which your Company focused on regaining thought leadership by bringing "first of its kind" organoleptically superior offerings into the market. Good Day Chunkies brought the world's best cookie experience to India and NutriChoice Heavens made Health more delightful. IPL partnerships and activations, competitive pricing strategy and new advertising initiatives also made sure that our brands Good Day and NutriChoice continued their leadership within their respective categories. The year also saw the relaunch of the Company's iconic Bourbon.

Your Company's parent brand "Britannia" strengthened its consumer connect by associating with big properties like Filmfare and Cricket. These properties also helped build stature for the Company, setting it apart from the rest of the competition in the category.

With the Britannia Promise as the North Star, your Company feels confident that impactful innovations and renovations will continue to fuel the Company's growth in the years to come.

10. SUPPLY CHAIN AND MANUFACTURING OPERATIONS

Your Company has been focusing on developing a competitive edge in manufacturing by deploying Cost Efficiency and Operational Excellence programs across the value chain and is also working on scaling up some of the existing manufacturing units.

Your Company increased operating control on capacity with the successful completion of Jhagadia Factory expansion and acquisition of a Contract Manufacturing unit in Chennai. Two more Greenfield factories are under construction in Perundurai, Tamil Nadu and Bidadi, near Bangalore which are scheduled to be commissioned in Financial Year 2015-16. Your Company has successfully installed and commissioned a state-of-the-art biscuit line in Gwalior Factory and has rolled out NutriChoice Heavens and Good Day Chunkies (Innovation products) in the market. All these have helped in creating the right capacity and capability with superior technology to meet the growing demand and rising consumer expectation. The APO Planning tool has been further consolidated with focus on integrating the challenging demand-supply scenario with optimum inventory management to better serve the market. In the area of logistics the focus was on execution effectiveness, reduction in the distance travelled for products and optimum space utilization for higher throughput.

11. QUALITY PROGRAMS

Your Company is committed to provide superior quality and safe products of better nutritional value to consumers. Your Company continued to work to enhance delivered product quality by building superior product design, manufacturing excellence and structured quality programs. You will be pleased to know that your Company continued the quality excellence journey by building capability for international quality standards, product quality sustenance programs and focus on driving the quality culture.

Three of your factories (Manna Foods Private Limited, Madurai, J B Mangharam Foods Private Limited, Gwalior and Britannia Industries Limited, Jhagadia) were recognized for excellence in quality by CII and were recipients of National Award for Food Safety-2014.

12. RESEARCH AND DEVELOPMENT (R&D)

Your Company's Research and Development (R&D) team continues to play a very vital role in your Company's goal to deliver profitable growth by developing superior organoleptic products, while keeping the focus on value engineering of the product and packaging. This year was marked with various new launches and restage of two pillar brands - Tiger Glucose and Bourbon biscuits. The R&D team developed truly differentiated, highly indulgent and best tasting "Good Day Chunkies" with 30% melting chocolate chips and range of healthier cookies "NutriChoice Heavens" made with oats, cranberry, almond and banana. The packaging team delivered differentiated packaging for these innovations in the market with embossed cartons for better shelf display and premium appeal. Your Company has been working in the area of micronutrient deficiencies in the population through its micronutrient fortified products. Special iron and folic acid fortified biscuit was developed earlier to address the iron deficiency anemia in children. In partnership with BAIF Development Research Foundation, these biscuits were fed to children as a part of nutrition intervention program in rural Karnataka and a significant reduction in the prevalence of anemia was observed after the intervention and these results have been published in Indian Journal of Pediatrics, March 2015 issue.

You will be pleased to know that your Company has invested significantly in R&D and strengthened the teams with recruitment of talented resources and initiated construction of a new state-of-the-art R&D centre in Bangalore. These should help your Company to steer ahead in disruptive innovation while significantly revamping the existing portfolio.

13. INFORMATION TECHNOLOGY (IT)

IT systems are the backbone which support timely decisions through conversion of data into actionable information. During 2014-15, your Company started realizing the benefits of handheld application, enabling the sales team to plan and expand direct coverage. Your Company has successfully rolled out application for capturing outlets covered by Rural Preferred distributors and also consolidated some of the finance activities like customer claims / vendor payments in line with global trends.

In 2015-16, your Company plans to enhance analytical capabilities by introducing HANA (in-memory computing platform) in areas like sales/ marketing and finance which will support real- time operations, smarter decision making and deliver better business results. Your Company is also looking at centralizing / consolidating other activities in line with global trends, which will help in increasing flexibility to respond to market changes.

14. ENVIRONMENT AND SAFETY

Energy conservation and the use of clean fuels continue to be a priority area for your Company. A focused Energy Program has been established with a view to carry out specific initiatives in the field of Energy Efficiency and Conservation. Centralization of Oven Controls leading to substantial savings in energy has been initiated in the last year and is expected to be completed in all factories by 2015-16.

Environment, Health and Safety are treated as core values at your Company Your Company has strengthened its workplace systems and practices as a part of ZERO accident culture through several accident prevention programs and has introduced site level performance indicators which include (Lead, Lag and System related) to promote a positive and proactive culture at work place. Your Company focused on continual improvement programs at units through KAIZEN and Safety improvement initiatives. Your Company also extended safety programs at depots covering fire, electrical and operational safety

Your Company initiated several activities as part of employee engagement in safety management which is detailed below:

(a) Enhancing the awareness on safety practices at work place through safety week initiatives.

(b) Imparting hands-on training to workmen for following safe work practices.

(c) Visual display at work place for creating awareness on hazards and risks.

(d) Mock drills as part of emergency response system.

(e) Safety inspection program to identify unsafe conditions and eliminate them.

(f) Near miss reporting and review for capturing and mitigating potential hazards.

(g) Hazard and risk study at factories to capture process related hazards and risks associated with them.

(h) Hazard alert system as part of horizontal deployment of workplace recommendations to improve safety systems.

(i) Safety in project management as part of contractor safety program.

(j) Visitor safety guidelines at factories.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

For your Company, CSR means Corporate Sustainable Responsibility and this means embedding CSR into its business model. With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company as part of its CSR initiatives have undertaken projects as per the CSR Policy and the details of the CSR Activities are given as Annexure 'A' forming part of this Report.

16. PENSION

The proceedings in the suit filed by the Pensioners Welfare Association ('the Association') are in progress in the Honourable City Civil and Sessions Court, Bangalore.

Related matters have been dealt within Note No. 33 of the Financial Statements, which are self-explanatory.

17. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Details of energy conservation, technology absorption, foreign exchange earnings and outgoing in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given as Annexure 'B' forming part of this Report.

18. CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement a separate Report on Corporate Governance along with the Auditor's Certificate on its compliance is forming part of this Annual Report.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of your Company had appointed Mrs. Ranjana Kumar as an Additional Director of the Company with effect from 8 July 2014, in terms of Section 161 of the Companies Act, 2013 and Article 94 of the Articles of Association of the Company. Further the Members at the 95th Annual General Meeting held on 12 August 2014 had approved appointment of Mrs. Ranjana Kumar as Director of the Company

The Members of the Company at the 95th Annual General Meeting held on 12 August 2014 had approved appointment of Dr. Ajai Puri, Mr. Keki Dadiseth, Mr. Avijit Deb, Mr. Nimesh N Kampani, Mr. S S Kelkar, Mr. Nasser Munjee, Dr. Vijay L Kelkar and Mrs. Ranjana Kumar as Independent Directors of the Company to hold office for five consecutive years with effect from the date of the Annual General Meeting held on 12 August 2014 upto 11 August 2019 with an option to retire from the office at any time during the term of appointment. The Company issued letter of appointment to all the Independent Directors as per Schedule IV to the Companies Act, 2013. Further, no Director resigned from the Company during the year under review. In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ness N Wadia, Director, retiring by rotation at the ensuing Annual General Meeting, is eligible for re-appointment.

Mr. Vivek P Raizada, Company Secretary (CS) and Key Managerial Personnel (KMP) ceased to be CS & KMP of the Company with effect from the close of business hours on 10 October 2014. Mr. Rajesh Arora was appointed as Company Secretary (CS) and Key Managerial Personnel (KMP) of the Company with effect from 3 February 2015.

Mr. Vinod Krishna Menon, Chief Financial Officer (CFO) and Key Managerial Personnel (KMP) ceased to be CFO & KMP of the Company with effect from the close of business hours on 17 November 2014. Mr. Amlan Datta Majumdar was appointed as Chief Financial Officer (CFO) and Key Managerial Personnel (KMP) of the Company with effect from 12 March 2015.

20. DIRECTORS' RESPONSIBILITY

Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) They have selected such accounting policies and applied them consistently and made 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 2015 and of the profit of the Company for the year;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The Annual Accounts are prepared on a going concern basis;

(e) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and these systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and operationally effective during the Financial Year 2014-15.

21. DECLARATION BY INDEPENDENT DIRECTORS All the Independent Directors have given a declaration under sub-section (7) of Section 149 of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

22. BOARD MEETINGS

A calendar of meetings is prepared and circulated in advance to the Directors. The details of the Board Meetings held during the year are covered in the Clause No. 2 of the Corporate Governance Report.

23. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and that of its statutory committees viz., Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee and that of the individual Directors. The manner in which the evaluation has been carried out is covered in the Clause No. 3(b) of the Corporate Governance Report.

24. REMUNERATION POLICY

The details of the Remuneration Policy are covered in the Clause No. 3(b) of the Corporate Governance Report. It is hereby affirmed that the Remuneration paid is as per the Remuneration Policy of the Company.

25. AUDIT COMMITTEE

The Board has constituted the Audit Committee. The composition, powers, role and terms of reference of the Committee are in accordance with the requirements mandated under Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The details of the Audit Committee along with Meetings held during the year are covered in the Clause No. 3(a) of the Corporate Governance Report.

26. RELATED PARTY TRANSACTIONS

The Company has formulated a Policy on dealing with Related Party Transactions. The Policy is disclosed on the website of the Company, weblink: http://britannia.co.in/pdfs/statutory disclosures/Britannia%20Industries%20 Limited-Policy%20On%20Related%20Party%20 Transactions.pdf. All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the year were in the ordinary course of business and on an arms length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. However, pursuant to the provisions of Clause 49 of the Listing Agreement, prior approval of the Audit Committee was sought for entering into the Related Party Transactions.

During the year, the Company had not entered into any contract/ arrangement /transactions with Related Parties which could be considered as material, as defined under the Listing Agreement. In accordance with Accounting Standard 18, the Related Party Transactions are disclosed under Note No. 44 of the Standalone Financial Statements.

27. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The details about the adequacy of Internal Financial Controls are covered in the Clause (H) of the Management Discussion and Analysis Report.

28. PARTICULARS OF EMPLOYEES

The information as per Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. However, as per the provisions of Section 136 of the Companies Act, 2013, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

29. EMPLOYEE STOCK OPTION SCHEME (ESOS)

The information pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, erstwhile Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and as per Section 62(1) (b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is given as Annexure 'C' forming part of this Report.

30. COST AUDIT

The Order dated 24 January 2012 issued by the Ministry of Corporate Affairs (MCA) - Cost Audit Branch, Government of India, mandated Cost Audit being applicable to your Company as it manufactures packaged food products falling within Chapter 19 of the Central Excise Tariff Act, 1985. The Company was accordingly required to get its cost accounting records audited by a Cost Auditor.

As per Section 148 and other applicable provisions of the Companies Act, 2013, the Board of Directors based on the recommendation of the Audit Committee had appointed M/s. N I Mehta & Co., Cost Accountants, as Cost Auditors to carry out the audit of the Cost Records of the Company for the Financial Year 2014-15.

Later the MCA had notified the Companies (Cost records and Audit) Rules, 2014 and Companies (Cost records and Audit) Amendment Rules, 2014 specifying the Industry/Sector/Product/Service for maintaining and auditing of Cost Records.

As the above Rules were not applicable to your Company, the audit of the Cost Records was not carried out for the Financial Year 2014-15 and the Board of Directors have decided not to appoint Cost Auditor for Financial Year 2015-16.

31. STATUTORY AUDITORS

The Members at the 95th Annual General Meeting held on 12 August 2014 had appointed M/s. B S R & Co. LLP., Chartered Accountants, as the Statutory Auditors of the Company pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 to hold office from the conclusion of that Annual General Meeting till the conclusion of the 5th consecutive Annual General Meeting, subject to ratification by the Members at every Annual General Meeting, at a remuneration to be decided by the Board of Directors in consultation with the Auditors plus applicable service tax and reimbursement of travelling and out of pocket expenses incurred by them for the purpose of audit.

Accordingly, the Board recommends to the Members of the Company for ratification of the appointment of M/s. B S R & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company.

In this regard, M/s. B S R & Co., LLP, Chartered Accountants have submitted their written consent that they are eligible and qualified to be re-appointed as Statutory Auditors of the Company in terms of Section 139 of the Companies Act, 2013 and also satisfy the criteria provided in Section 141 of the Companies Act, 2013.

32. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report is given as Annexure 'D' forming part of this Report.

33. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Note No. 29, 30 and 31 of the Standalone Financial Statements.

34. RISK MANAGEMENT POLICY

The Company has formulated a Risk Assessment & Management Policy. The details of the same are covered in the Clause No. 5(d) of the Corporate Governance Report.

35. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant and material orders passed by the Regulators or Courts or Tribunals during the year impacting the going concern status and the Company's operations in future.

36. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The details of the Whistle Blower Policy is covered in the Clause No.5 (c) of the Corporate Governance Report. The Whistle Blower Policy is available on the website of the Company, weblink: http://britannia. co.in/pdfs/statutory disclosures/WHISTLE%20 BLOWER%20POLICY.pdf.

37. PARTICULARS OF REMUNERATION OF DIRECTORS, KMP's AND EMPLOYEES

A statement containing the details of the Remuneration of Directors, KMP's and Employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure 'E' forming part of this Report.

38. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013, an extract of the Annual Return in Form MGT-9 is given as Annexure 'F' forming part of this Report.

39. DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has set up an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at workplace. There was no case of sexual harassment reported during the year under review.

40. ACKNOWLEDGEMENTS

Your 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.

On behalf of the Board

Place : Mumbai Nusli N Wadia Date : 21 May 2015 Chairman


Mar 31, 2014

The Directors present their Annual Report together with the Statement of Accounts for the year ended 31 March 2014.

1. FINANCIAL RESULTS

Rs. in crores

Year ended Year ended Particulars 31 March''14 31 March''13

Sale of Products 6,347.85 5,649.66

Other Operating Revenues 75.30 51.11

Other Income 34.82 55.47

Profit from Operations 533.24 314.45 (PBT before other income, finance costs and exceptional items)

Profit Before Tax 542.62 332.18

Less: Tax Expense 172.79 98.31

Net Profit 369.83 233.87

Add: Profit brought forward 326.89 235.35

Profit available for 696.72 469.22

Appropriation

Less: Proposed Dividend 143.91 101.66

Less: Tax on Proposed 24.46 17.28

Dividend

Less: Dividend (including 0.22 - tax on dividend) for previous year on equity shares issued under ESOS after the year end

Less: Transfer to General 36.98 23.39 Reserve

Balance carried forward to 491.15 326.89 Balance Sheet

Net Cash Flow from 614.51 272.01 Operating Activities

2. OVERVIEW OF COMPANY PERFORMANCE

In a challenging economic environment and intensely competitive market, Profit from Operations increased 69.6%, from Rs. 314.45 crores to Rs. 533.24 crores. Several of your Company''s power brands grew double digit resulting in overall revenue growth of 12%. Your Company focused on profitability, capital productivity and working capital management to generate cash flow from operating activities of Rs. 614.51 crores compared to Rs. 272.01 crores in the previous year. Earnings per share (of Rs. 2/- each) increased to Rs. 30.87 from Rs. 19.57 in the previous year.

Based on the assessment of business of Daily Bread Gourmet Foods (India) Private Limited (wholly owned subsidiary) and in accordance with Accounting Standard 13 - "Accounting for Investments", prescribed by the Companies (Accounting Standard) Rules, 2006 of the Companies Act, 1956, your Company has made a provision of Rs. 20 crores for diminution in value of investment made in equity shares of Daily Bread Gourmet Foods (India) Private Limited. channel capabilities have been strengthened to increase width of distribution in rural markets and depth in the urban markets. Several initiatives were undertaken to drive sales productivity, which includes re-structuring of sales team, distributor consolidation, portfolio reconfiguration to simplify handling, split portfolio for focused selling, hub & spoke model to increase reach etc.

Your Company supported its brands aggressively in an intensely competitive market and focused on extracting the maximum out of its investment in advertising and sales promotion (A&SP) and channel infrastructure, through a series of initiatives focused on higher throughput, better returns, branding and communication excellence.

Your Company focused to balance cost, quality and aspiration in its brand for consumer affordability at every price point. Your Company also reinforced a strong cost effectiveness culture towards creating a robust demand & supply chain and leadership economics.

3. CONSOLIDATED FINANCIAL RESULTS

Your Company has prepared Consolidated Financial Statements in accordance with Accounting Standard 21 - "Consolidated Financial Statements", prescribed by the Companies (Accounting Standard) Rules, 2006 of the Companies Act, 1956. The Consolidated Statements refilect the results of the Company and those of its Subsidiaries. As required by Clause 32 of the Listing Agreement entered into with the Stock Exchanges, the Audited Consolidated Financial Statements together with the Independent Auditor''s Report thereon are annexed and form part of this Annual Report.

Consolidated Sale of Products of your Company for the year ended 31 March 2014 was Rs. 6,945.52 crores compared with Rs. 6,221.82 crores in the previous year, a growth of 11.6%.

Consolidated Net Profit for the year ended 31 March 2014 was Rs. 395.35 crores compared with Rs. 259.50 crores in the previous year, a growth of 52.3%.

Rs. in crores

Year ended Year ended Particulars 31 March''14 31 March''13

Sale of Products 6,945.52 6,221.82

Other Operating Revenues 83.39 49.50

Other income 33.59 52.24

Profit from Operations 544.02 347.49 (PBT before other income and finance costs)

Profit Before Tax 569.32 358.43

Net Profit 395.35 259.50

SUBSIDIARIES

Your Directors present herewith a broad overview of the operations and financials of Subsidiaries of your Company:

Britannia Dairy Private Limited (BDPL)

The Dairy business of your Company was impacted by unprecedented increase in milk cost of ~ 30% during the year. Your Company focused on value-added products and registered a turnover of Rs. 299.32 crores compared to Rs. 309.19 crores in the previous year. The business achieved a Net Profit of Rs. 10.67 crores compared to Rs. 35 crores in the previous year as a result of inordinate inflation in milk cost.

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

Daily Bread is a manufacturer of premium gourmet bakery products, including specialty breads, cakes, pastries and cookies which it sells through its own retail stores directly to consumers. It also sells a part of its bread range through modern trade and to institutions. Its operations are largely confined to Bangalore. The turnover (net sale of products) of Daily Bread was Rs. 19.94 crores during the year, compared with Rs. 23.06 crores in the previous year. Loss for the year was Rs. 3.30 crores compared to Rs. 2.67 crores in the previous year.

Strategic Food International Co. LLC, Dubai (SFIC)

SFIC sales increased by 4.1% at AED 16.16 crores (Rs. 265.71 crores) compared with AED 15.53 crores (Rs. 229.92 crores) for the previous year. It increased market share in key markets of UAE and KSA. SFIC posted a net profit of AED 0.29 crores (Rs. 4.74 crores) as compared to a net loss of AED 0.33 crores (Rs. 4.91 crores). Continued focus on product mix, productivity improvement and cost efficiencies helped to drive a profitable growth.

Al Sallan Food Industries Co. SAOC (ASFI)

ASFI sales are primarily to SFIC and for the year ended 31 March 2014 closed at RO 0.86 crores (Rs. 135.30 crores), almost at the level of previous year. It posted a net loss of RO 2.13 lakhs (Rs. 3.34 crores) against a net profit of RO 0.09 lakh (Rs. 0.12 crores) in the previous year.

Britannia and Associates (Mauritius) Private Limited, Mauritius (BAMPL)

BAMPL, a company formed in Mauritius and a wholly- owned subsidiary of your Company, is the holding company of Britannia and Associates (Dubai) Private Company Limited, a Jebel Ali Free Zone Offshore company, which in turn holds investments in Strategic Food International Co. LLC, Dubai, Al Sallan Food Industries Co. SAOC, Oman, and Strategic Brands Holding Company Limited, Dubai, a Jebel Ali Free Zone Offshore company.

The combined revenue and profit of holding companies for the year ended 31 March 2014 was USD 0.13 crores (Rs. 7.69 crores) and USD 0.01 crores (Rs. 0.30 crores) compared to USD 0.12 crores (Rs. 6.53 crores) and loss of USD 0.01 crores (Rs. 0.25 crores) respectively, for the year ended 31 March 2013.

Investment Companies

Boribunder Finance and Investments Private Limited (Boribunder), Flora Investments Company Private Limited (Flora) and Gilt Edge Finance and Investments Private Limited (Gilt Edge) form the Investment subsidiaries of your Company. Boribunder is a wholly owned subsidiary of your Company.

The combined revenue and loss of the investment companies for the year ended 31 March 2014 was Rs. Nil and Rs. 0.02 crores respectively.

Further, pursuant to Section 4 of the Companies Act, 1956, the following companies engaged in manufacturing of biscuits at various locations are also subsidiaries of your Company. The Revenue from Operations / Net Sales and Net Profit of the said subsidiaries for 2013-14 are as under:

Rs. in crores

Name of Subsidiary Revenue Net Profit from Operations / Net Sales

International Bakery Products 18.05 0.29 Limited, Puducherry

J B Mangharam Foods Private 25.26 0.25 Limited, Gwalior

Manna Foods Private Limited, 29.09 (0.19) Madurai

Ganges Vally Foods Private 16.86 0.24 Limited, Hoogly

Sunrise Biscuit Company Private 131.65 0.02 Limited, Guwahati

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 three of the other subsidiaries of your Company. These are companies limited by guarantee, with 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 are pleased to recommend a dividend of 600% on the paid up equity share capital of the Company, which amounts to Rs. 12/- per share, for consideration and approval by the Members at the Annual General Meeting. The total payout amounts to Rs. 168.37 crores including dividend distribution tax of Rs. 24.46 crores.

5. THE BRITANNIA PROMISE TO SPREAD DELIGHT

Last year your Company took an oath to coalesce the cost, quality and aspiration imaginatively to deliver a unique and ecstatic experience to its consumers. Guided by this Britannia Promise, an objective analysis was conducted to assess where we stand in terms of our products versus where we should be. This identified several opportunities which your Company aggressively pursued, resulting in a significantly superior consumer experience. This refilects in our market place performance. Equally, there are several other identified opportunities that are in various stages of completion. Many of these will reach consumers during the course of the current year.

Not only did Britannia Promise become the fountainhead of delightful consumer offering, but it also shaped the day-to-day activities of your Company. Your Company recognizes that we are only as good as the last product we delivered to consumers. Keeping this in mind all employees of your Company recommitted themselves to ensuring that the products that reach consumers are not only superior to competitors in their design but they also reach with consistently high quality. Consequently each employee of your Company maintains market-place-vigilance and is effectively an independent market information source reporting back into a mechanism designed to identify and correct market-place deficiency quickly and comprehensively.

6. BRANDS

Brands form the core of your Company''s business and keeping them relevant and differentiated is the first priority of your Company. 2013-14 has been a year of consolidating and growing base brands and brands launched in the previous years. Concurrently, your Company has kept up the pace of differentiation by working and investing aggressively behind new consumer understanding, advertising and activation programs and marketplace competitiveness.

Your Company''s pillar brands like Good Day, MarieGold, 50 50, NutriChoice, Jim Jam, Bourbon, Milk Bikis continued to drive growth for the Company by expanding both penetration and consumption in Indian homes. The Jim Jam brand was restaged with new packaging and a new chocolate variant as well as consumer facing advertising which brought alive the creaminess and jami-ness of the inherent product.

Your Company continues to focus on its two strength areas – Health and Indulgence – through brands that are targeted specifically on each of these need states. Brands are also segmented on consumer segments like Premium, Mid, Mass or demographic segments like homemakers, kids, adults, families etc. New campaigns were created for Good Day (Happy Good Day to you), NutriChoice Digestive (Tasty Health Biscuits) and NutriChoice Cracker (The Honestly Good Biscuit) to ensure that your brands stayed top of mind and relevant to consumers. Britannia Cakes was restaged with new packaging and new advertising.

The premium segment of the market saw intense activity in 2013-14 and your Company ensured that packs and products were kept price and value competitive – through the introduction of new SKUs or through consumer bonus programmes. This has resulted in improved performance of brands and helped expand their distribution as well as consumer penetration footprint. In 2013-14, your Company leveraged the understanding created with the Britannia Promise to innovate and renovate products to deliver the right cost, quality and aspiration to the consumers. This will be the continued endeavour of your Company over the next many years to come, making the product the centrepiece of all development work.

2013-14 symbolized a year of intense competitive activity with a subdued consumer activity on account of economic slowdown – it was critical for your Company to keep its brands salient on media in addition to delivering every day good quality. Your Company continued to invest in the traditional Television medium while increasing impact and visibility through hoardings and bus shelter (OOH medium), through the modern trade and key accounts retail visibility program as well as through investing behind new media like digital albeit in a small manner.

SUPPLY CHAIN AND MANUFACTURING OPERATIONS

Your Company has been focusing on deploying a competitive edge in technology and implementing operational excellence programs across the value chain to build leadership economics. Your

Company increased operating control on capacity with the commissioning of a Greenfield facility for biscuit manufacturing at Jhagadia, Gujarat and commencing work on the new Greenfield project in Perundurai, Tamil Nadu. Capacity and capability continued to be enhanced both in your Company''s manufacturing units and co-packers. All these have helped in creating the right capacity with superior technology to better serve the market. To improve the back-end planning process and availability, your Company has implemented the process of Advanced Planning & Optimizing (APO) tool which will provide an integrated platform to calibrate supply to a dynamic demand scenario. In the area of logistics the focus was on execution effectiveness and optimum space utilization for higher throughput.

8. QUALITY STANDARDS

Your Company assiduously works on enhancing delivered product quality through structured programs that build a quality culture. The culture of continuous improvement is deployed through various initiatives across the Company to improve the effectiveness of our processes and systems.

Your Company started a "Organoleptic8" Program, in order to give more Weight-age to the consumers sensorial appreciation. Your Company competency on "Organoleptic" differentiation will be significantly enhanced to deliver new and unique experiences across the portfolio.

9. INFORMATION TECHNOLOGY (IT)

IT systems are the backbone, which support timely decisions through converting data into actionable information. During 2013-14, your Company started realizing the benefits of best in class Supply Chain IT capabilities enabled through SAP during 2012-13. Integrating end-to-end supply chain covering demand, capacity and production planning has enabled an increased service delivery with reduction of inventory.

Your Company has also successfully rolled out handheld based system to enable its sales people to do better planning and execution.

Your Company has successfully built Procurement analytics / dashboards which provides greater visibility to commodity trends.

In 2014-15, your Company proposes to enhance analytics capabilities in other areas like marketing and finance. Your Company is also looking at centralizing / consolidating various activities in line with global trends, which will help your Company to increase its filexibility to respond to market changes.

10. ENVIRONMENT AND SAFETY

Energy conservation and the use of clean fuels continue to be a priority area for your Company. Biomass gassifier has been successfully commissioned at two factories and more will be installed in the coming year. A focused Energy Program has been established with a view to carrying out specific initiatives in the field of Energy Efficiency and Conservation.

Environment, Health and Safety are treated as core value at your Company. Your Company has strengthened its workplace system & practices as a part of ZERO accident culture through several accident prevention program techniques and has introduced site level performance indicators to promote positive & proactive culture at work place. Your Company also partnered with a leading company having expertise in Safety Management Systems as part of safety capability building in enhancing skills for shop floor line management. As part of this engagement, several programs were organized across various locations.

Your Company also initiated several activities as part of employee engagement in safety management like:

(a) Safety week celebrations to enhance the awareness on safety practices at work place.

(b) Adopted engineering controls for all hazardous rotating parts which has potential to cause accidents.

(c) On the job training to workmen on safe work practices.

(d) Visual display at work place for better understanding on hazards and risks.

(e) Mock drills as part of emergency response system.

(f) Safety inspection program to identify unsafe conditions and eliminate them.

(g) Near miss reporting to capture potential areas and mitigate the same.

11. CORPORATE SOCIAL RESPONSIBILITY (CSR)

For your Company, CSR means Corporate Sustainable Responsibility and this means embedding CSR into its business model. This covers two broad areas of food-based solutions to increase nutrition as well as energy conservation, which includes waste management.

Your Company continued its partnership with Karnataka Nutrition Mission in some villages in Karnataka to comprehensively address sanitation, health and immunization initiatives, nutrition supplementation for children, adolescent girls, pregnant women and nursing mothers. The 1st phase of this project was completed during the year.

As mentioned in previous reports, the "Britannia Nutrition Foundation" (BNF) was set up with the belief that every child in India has the right to growth and development through good food - every day. The Foundation disseminates scientific knowledge in the area of nutrition, builds awareness of the massive malnutrition challenge and its solutions and creates a platform for multi-sectoral dialogue and informed action.

In 2013, BNF was selected as the ''nutrition partner'' in a first-of-its-kind project in India, under a municipal corporation''s (East Delhi Municipal Corporation (EDMC)) jurisdiction. Through this program BNF assessed the health and nutritional status, including height, weight and haemoglobin of 50,000 children. The records of the Health Checks conducted have since been digitized and handed over to EDMC to be made a part of their school records. Their daily diets were supplemented with Iron & multiple micro-nutrient fortified biscuits and parents of the children were counselled on causes & effects of anaemia, ways to overcome it through proper eating habits and the importance of sanitation and hygienic living conditions, both within the home and the community.

The Foundation also partnered with AIIMS to do a field study on the efficacy of Nutrition Intervention through fortified food to "at-risk child populations". BNF also worked with Wadia Hospital in Mumbai to supplement the daily diets of all IPD (In Patient Department) children with Tiger biscuits.

The work of the Foundation also featured on 2 independent programs on Television focusing on malnutrition:

- NDTV program on "Our Girls, Our Pride" in December 2013.

- ''The Quest for Shunya'' (on Times Now) in October 2013, on companies / organizations that are on a Quest to reduce malnutrition.

The commitments of your Company in addressing child and maternal malnutrition were also included as a part of the SUN (Scaling Up Nutrition) (which originated from the United Nations Standing Committee on Nutrition (UNSCN) wherein UN agencies, Bilateral Partners and NGOs / CSOs come together to exchange information and discuss nutrition related issues) and DFID (Department for International Development of the Government of UK) global commitments.

12. PENSION

The proceedings in the suit filed by the Pensioners Welfare Association (''the Association'') are in progress in the Honourable City Civil and Sessions Court, Bangalore. In the meanwhile, the Company''s Pension Funds continue to pay pension to the members, in terms of the Honourable Court''s interim order passed on 1 January 2009 as reiterated by the Honourable Supreme Court in its order passed in January 2011, in accordance with the computation made on defined contribution basis and submitted by the Pension Funds to the Court.

Pending disposal by the Honourable High Courts of Madras and Calcutta of the petitions filed by some pensioners and the Association, the CIT, Kolkata, is yet to pass any orders on the deeds of variation filed by the Pension Funds in view of the interim restraint orders passed by these High Courts.

These and related matters have been dealt with in Note No. 29 to the financial statements, which are self-explanatory.

13. 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.

14. CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on corporate governance along with the Auditor''s Certificate on its compliance is attached to this Report.

15. DIRECTORS

The Board of Directors of your Company at their Meeting held on 11 November 2013 had appointed Mr. Varun Berry as an Additional Director of the Company with effect from 11 November 2013, in terms of Section 161 of the Companies Act, 2013 [corresponding to Section 260 of the Companies Act, 1956] and Article 94 of the Articles of Association of the Company and whose term of office expires at the ensuing Annual General Meeting and is eligible for appointment as Director of the Company. In the same Meeting Mr. Varun Berry was also appointed as Whole time Director designated as Executive Director of the Company with effect from 11 November 2013 for a period of five years. Further, the Board of Directors of your Company at their Meeting held on 25 March 2014 had appointed Mr. Varun Berry as Managing Director of the Company with effect from 1 April 2014 for a period from 1 April 2014 to 10 November 2018. Later, the Board of Directors of your Company at their Meeting held on 26 May 2014 had revised the terms and conditions of the appointment of Mr. Varun Berry as Managing Director of the Company for a period of five years with effect from 1 April 2014 to 31 March 2019.

Ms. Vinita Bali retired as Managing Director of the Company and also ceased to be a Director on the Board of the Company with effect from the close of business on 31 March 2014. Your Directors wish to place on record their appreciation for the contribution made by Ms. Vinita Bali during her tenure as Managing Director.

In accordance with the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Dr. Ajai Puri, Mr. Keki Dadiseth, Mr. Avijit Deb, Mr. Nimesh N. Kampani, Mr. S S Kelkar, Mr. Nasser Munjee and Dr. Vijay L Kelkar as Independent Directors for five consecutive years with effect from the date of the Annual General Meeting to be held on 12 August 2014 up to 11 August 2019 with an option to retire from the office at any time during the term of appointment.

In accordance with the provisions Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. A K Hirjee and Mr. Jeh N Wadia, Directors, retiring by rotation at the ensuing Annual General Meeting, are eligible for re-appointment.

Details of the proposal along with necessary resolutions for the appointment / re-appointment of the aforesaid Directors have been included in the Notice convening the ensuing AGM and Explanatory Statement under Section 102 of the Companies Act, 2013.

16. 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 Office of the Company or write to the Company Secretary for a copy thereof.

17. EMPLOYEE STOCK OPTION SCHEME (ESOS)

Requisite disclosure in respect of the Employee Stock Option Scheme (ESOS) in terms of Guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, has been provided in Annexure ''B'' to this Report.

The Share Capital of the Company has gone up from Rs. 23.91 crores as at 31 March 2013 to Rs. 23.99 crores as at 31 March 2014 consequent to allotment of 4,00,000 equity shares in aggregate on three occasions upon the exercise of stock options by Ms. Vinita Bali as granted under the ESOS in 2009, 2010, 2011 and 2012 respectively. Details of each allotment have been mentioned in Corporate Governance Report.

18. COST AUDIT

The Order dated 24 January 2012 issued by the Ministry of Corporate Affairs (MCA) – Cost Audit Branch, Government of India, mandating Cost Audit applies to your Company as it manufactures packaged food products falling within Chapter 19 of the Central Excise Tariff Act, 1985. The Company is accordingly required to get its cost accounting records audited by a Cost Auditor. Pursuant to Section 233B(2) of the Companies Act, 1956 the Board of Directors on the recommendation of the Audit Committee appointed M/s. N. I. Mehta & Co., Cost Accountants, as Cost Auditors for conducting Cost Audit for the financial year 2013-14. The Cost Audit Report is required to be filed within 180 days from the end of the financial year. The Cost Audit Report for the financial year ended 31 March 2013 was filed within the due date and for 31 March 2014 will be filed within the prescribed period.

19. AUDITORS

M/s. B S R & Co. LLP retire in accordance with the provisions of the Companies Act, 2013. They have indicated their willingness to continue in office and are recommended for appointment as the Company''s Auditors in accordance with the provisions of the Companies Act, 2013.

20. DIRECTORS'' RESPONSIBILITY

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors, based on representations from the Operating Management, confirm 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 2014 and of the profit of the Company for the year ended 31 March 2014;

(c) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

21. ACKNOWLEDGEMENTS

Your 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.

On behalf of the Board

Mumbai Nusli N Wadia

26 May 2014 Chairman


Mar 31, 2013

The Directors present their Annual Report together with the Statement of Accounts for the year ended 31 March 2013.

1. FINANCIAL RESULTS

Rs.in crores

Particulars Year ended Year ended 31 March 13 31 March 12

Sale of Products 5,649.66 5,005.66

Other Operating Revenues 51.11 27.15

Other Income 55.47 58.53

Profit from Operations 314.45 231.91

(PBT before other income and finance costs)

Profit Before Tax 332.18 252.37

Less: Tax Expense 98.31 65.63

Net Profit 233.87 186.74

Add: Profit brought forward 235.35 185.29

Profit available for 469.22 372.03 appropriation

Less: Proposed Dividend 101.66 101.53

Less: Tax on Proposed 17.28 16.47

Dividend

Less: Transfer to General 23.39 18.68 Reserve

Balance carried forward to 326.89 235.35 Balance Sheet

Net Cash Flow from 272.01 210.66 Operating Activities

2. OVERVIEW OF COMPANY PERFORMANCE

In an increasingly competitive market place and continuing commodity inflation during the year, Profit from Operations increased 35.6%, from Rs. 231.91 crores to Rs. 314.45 crores. Against an overall revenue growth of 12.5%, several of your Company''s iconic brands grew at a significantly higher rate, whilst a few were laggards. Your Company added Rs. 644 crores to its Operating Revenue (Sale of Products) and Rs. 82.54 crores to its Profit from Operations. Earnings per share (Basic) of Rs. 2 were Rs. 19.57.

Trend lines of key performance parameters are shown in the table below:

During the year, your Company won several accolades and prestigious awards, notable among which are:

1. ''Best In Class'' Global Performance Excellence Award 2012 from Asia Pacific Quality Organization, under the category of ''Large Manufacturing Organization'', for its manufacturing facilities at Delhi, Gwalior, Bidadi and Khopoli and the Corporate Office at Bangalore.

2. The Golden Peacock National Quality Award by the Institute of Directors, for its manufacturing facility at Kolkata.

3. Global Award for Excellence in Quality Management and Leadership by World Quality Congress.

4. The Namma Bengaluru Award from Namma Bengaluru Foundation for the year 2012-13 for effective solid waste management.

5. IWLF (International Women Leadership Forum) Award for ''Solid Waste Management'' and the work of ''The Britannia Nutrition Foundation''.

Britannia was once again rated the "Most Trusted Food Brand" by consumers across India in the annual survey done by Nielsen for The Economic Times. This is the fourth year in succession that your Company has achieved this distinction. Additionally, Brand Britannia also rose to the No. 2 position across all product categories amongst India''s Most Trusted Brands, as voted by consumers.

A focus on Revenue management, Cost management and Innovation forms the basis of your Company''s operations. As in previous years, the Company''s focus on creating and delivering relevant and differentiated propositions across the portfolio of products continued and will be elaborated later in the section on Brands. The year 2012 also marked the Silver Jubilee year of your Company''s most iconic brand - Good Day which saw new advertising and several consumer activities, culminating with the "Heart of Gold" program, that showcased stories of ordinary people doing extraordinarily compassionate acts.

Cost effectiveness has been a key pillar of your Company''s value creation strategy. As in the past, your Company addressed the cost challenge by continuing to build on several cost effectiveness and efficiency initiatives through a special program spanning the entire value chain. This program involved 400 projects across functions and geographies. In parallel, your Company continues to foster several improvement tools, using Kaizen, Total Productive Maintenance, Total Quality Management and Six Sigma in several manufacturing units. Your Company believes that these programs implemented continually will hardwire a culture of efficiency and effectiveness.

Your Company''s international business also expanded with export from India growing 28.1% and the two companies in the Middle East growing at 21.2%. International revenue now account for Rs. 340.73 crores.

3. CONSOLIDATED FINANCIAL RESULTS

Y our 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 reflect the results of the Company and those of its Subsidiaries. As required by Clause 32 of the Listing Agreement with the Stock Exchanges, the Audited Consolidated Financial Statements together with the Independent Auditor''s Report thereon are annexed and form part of this Annual Report.

Consolidated Sale of Products of your Company for the year ended 31 March 2013 was Rs. 6,221.82 crores compared with Rs. 5,519.96 crores in the previous year, a growth of 12.7%.

Consolidated Net Profit for the year ended 31 March 2013 was Rs. 259.50 crores compared with Rs. 199.55 crores in the previous year, a growth of 30%.

Rs.in crores

Particulars Year ended Year ended 31 March 13 31 March 12

Sale of Products 6,221.82 5,519.96

Other Operating 49.50 24.62 Revenues

Other Income 52.24 59.14

Profit from Operations 347.49 249.04 (PBT before other income and finance costs)

Profit Before Tax 358.43 266.58

Net Profit 259.50 199.55

Performance of Subsidiaries is discussed below:

SUBSIDIARIES

Your Directors present herewith a broad overview of the operations and financials of Subsidiaries of your Company.

Britannia Dairy Private Limited (BDPL)

Despite heightened competition both from local and international players, the Dairy business of your Company grew profitably by focusing on differentiated products. It more than doubled its Net Profit and registered a turnover of Rs. 309.19 crores compared to Rs. 293.06 crores in the previous year, a growth of 5.5%. The business achieved a Net Profit of Rs. 35 crores compared to Rs. 15.51 crores in the previous year, a growth of 125.6%. Your Company achieved this by focusing on its core brands like Cheese etc., by driving innovation and improving overall realisation.

With more value-added products in the pipeline, your Company''s dairy business continues to be anchored in increasing distribution and reach for its products.

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

Daily Bread is a manufacturer of premium gourmet bakery products, including specialty breads, cakes, pastries and cookies which it sells through its own retail stores directly to consumers. It also sells a part of its bread range through modern trade and to institutions. Its operations are largely confined to Bangalore.

The turnover (net sale of products) of Daily Bread was Rs. 23.06 crores during the year, compared with Rs. 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 for the year ended 31 March 2013 SFIC sales increased by 8.4% at AED 15.53 crores (Rs. 229.92 crores) compared with AED 14.32 crores (Rs. 186.28 crores) for the previous year. Saudi Arabia, a market the company entered last year, grew over 60% offering great promise for the future. Currency depreciation in South Africa and certain import restrictions in Nigeria and Angola limited growth. Soft Commodity prices coupled with several initiatives aimed at containing cost, helped support higher marketing investments to build the business. SFIC posted a net loss of AED 0.33 crore (Rs. 4.91 crores), almost at the previous year''s levels. Gross Margins improved with an unrelenting focus on containing cost, improving the product and geographic mix and concentrating on key categories like cookies, sugar free digestives and wafers to drive growth.

Al Sallan Food Industries Co. SAOC (ASFI)

ASFI sales are primarily to SFIC and for the year ended 31 March 2013 closed at RO 0.89 crore (Rs. 125.17 crores), higher by 3.2% compared with RO 0.86 crore (Rs. 106.99 crores) in the previous year. Persistent focus on cost reduction, productivity improvement and efficiency related initiatives helped post a net profit of RO 0.1 lakh (Rs. 0.12 crore) against a net loss of RO 1.31 lakhs (Rs. 1.63 crores) in the previous year.

Royal Decrees and Governmental directives issued in Oman for increments and wage increases for Omani nationals (who constitute a mandatory minimum of 35% of the workforce) continue to add to cost pressures and the company has adopted various innovative techniques to be competitive in this environment.

Britannia and Associates (Mauritius) Private Limited, Mauritius (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 Company Limited, a Jebel Ali Free Zone Offshore company, which in turn holds investments in Strategic Food International Co. LLC, Dubai, Al Sallan Food Industries Co. SAOC, Oman, and Strategic Brands Holding Company Limited, a Jebel Ali Free Zone Offshore company.

The combined revenue and loss of holding companies for the year ended 31 March 2013 was USD 0.12 crore (Rs. 6.53 crores) and USD 0.01 crore (Rs. 0.25 crores) compared to USD 0.13 crore (Rs. 6.35 crores) and USD 0.02 crore (Rs. 1.10 crores) respectively, for the period ended 31 March 2012.

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 subsidiaries 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 2013 was Rs. 0.65 crore and Rs. 0.47 crore respectively.

Further, pursuant to Section 4 of the Companies Act 1956, the following companies engaged in manufacture of biscuits at various locations are also subsidiaries of your Company. The Revenue from Operations and Net Profit of the said subsidiaries during 2012-13 are as under:

Rs.in crores

Name of Subsidiary Revenue Net Profit from Operations

International Bakery 14.28 0.23 Products Limited, Puducherry

J B Mangharam Foods 18.80 0.10 Private Limited, Gwalior

Manna Foods Private 23.21 0.05 Limited, Madurai

Ganges Vally Foods Private 16.11 0.15 Limited, Hoogly

Sunrise Biscuit Company 123.58 0.22 Private Limited, Guwahati

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 three of the other subsidiaries 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 are pleased to recommend a dividend of 425% on the paid-up equity share capital of the Company, which amounts to Rs. 8.50 per share, for consideration and approval by the shareholders at the Annual General Meeting. The total payout amounts to Rs. 118.94 crores including dividend distribution tax of Rs. 17.28 crores.

5. THE BRITANNIA PROMISE

It is the conviction of your Company that the fountainhead of its performance is the supremacy of its brands in terms of the unique delight they deliver - which starts with the look and feel of the pack and ends with the pleasurable satisfaction consumers experience after they have enjoyed the product. With the quest to understand and fully embrace this thought in every activity that leads to the final moment of purchase and consumption, your Company has engaged the services of a specialized consultant who will work closely with the Management to help uncover the needs and desires of the heterogeneous base of consumers in India. Your Company will design products that are distinctive and appeal to the sensory aspirations of the consumers as they see, smell, taste and feel satisfied after consuming the products. An objective analysis has revealed the opportunities to pursue and it is with this conviction that everybody in your Company has taken an oath to create and make available products that coalesce cost, quality and aspiration imaginatively to create experiences that are unique and differentiated. This process is deeply rooted in the understanding of consumers and the science of organoleptics. Through this process, your Company will make its products even more delightful, affordable and accessible to the heterogeneous people of India - across age, ethnicity and socio-economic status - anytime, anywhere - every day. With this Promise as the beacon to guide all actions, your Company will clearly differentiate its products and its performance in the marketplace. This is the ''Britannia Promise''.

6. BRANDS

Brands form the core of your Company''s business and keeping them relevant and differentiated is the first priority of your Company. 2012-13 has been a year of consolidating and growing base brands and brands launched in the previous year. Concurrently, your Company has kept up the pace of innovation by working and investing aggressively behind new consumer understanding, new technologies and capability programs. Your Company has also collaborated with reputed academic institutions and other companies to complement its efforts and build strong platforms for sustained and significant product categories and businesses.

Good Day completed 25 years and it was appropriate to celebrate this milestone with consumers, who, for the last 25 years have chosen Good Day as their favorite cookie. Towards the close of the anniversary, Good Day ran a programme - ''Heart of Gold'', which was enthusiastically received by consumers.

Contributing significantly to the healthy snacking objectives has been an important objective of your Company. Consistent with this objective your Company launched several products under the umbrella of NutriChoice. These diabetic friendly products were made available to more people across the country through extending their reach and distribution by almost 50%. Your Company believes that there is scope for further expansion.

Another aspect of the Company''s healthy snacking promise to the consumers has been to address the pervasive micro-nutrient deficiency among the children of India. Brand ''Tiger'' has been at the forefront of this, with each serving designed to deliver 25% of RDA of Iron. Other brands that are enriched with micro-nutrients include Milk Bikis, Britannia Marie Gold, VitaMarie, Britannia Bread, Tiger Chocolate and Badaam Milk and Britannia Flavored Yoghurt.

7. SUPPLY CHAIN AND MANUFACTURING OPERATIONS

Your Company has been focusing on improving operational efficiencies in Supply Chain and Manufacturing. New biscuit manufacturing facilities at Hajipur, Khurda and Madurai were optimally utilized. Your Company has added a state-of-the- art facility for cake manufacturing at Rudrapur and along with its co-packer, a Greenfield factory for biscuit manufacturing at Hyderabad. Capacity and capability continued to be enhanced both in your Company''s manufacturing units and co-packers. All these have helped in creating the right capacity with superior technology to better serve the market. Additionally, fiscal benefits in several of these regions have helped contain cost. To improve the back-end planning process and availability, your Company is in the process of implementing Advanced Planning & Optimizing (APO) which is progressing as per plan.

8. QUALITY STANDARDS

Your Company assiduously works on raising the delivered quality of its products and processes through its ''Q Next'' Program. The culture of continuous improvement is being created through deploying various initiatives like Kaizen, Total Productive Maintenance (TPM) and Total Quality Management (TQM). The Lean Six Sigma methodology has been adopted in solving complex issues in the organization, thereby improving the effectiveness of processes and systems. Consumer connect processes have been improved with respect to promptness in response to consumer queries. As mentioned earlier, several of the Company''s manufacturing units were recognized in India and Asia for delivering excellence in quality.

9. INFORMATION TECHNOLOGY

During 2012-13, your Company implemented best in class Supply Chain IT capabilities enabled through SAP to transform and integrate end-to-end supply chain covering demand, capacity, production and material planning. This will enable dynamic demand planning and accurate forecasting in both the short and long term and provide the capability to quickly respond to changing market needs.

Your Company has also successfully implemented a handheld based system to enable its sales people to drive efficiencies in generating and servicing retail orders. ''BritanniaKonnect'' is another world class capability that was launched during the year to enable tighter collaboration, communication and knowledge management within the organization.

In 2013-14, your Company proposes to build powerful IT capabilities for marketing. Your Company will also be implementing analytics in procurement to enable its procurement team to gain greater visibility and better forecast commodity price trends.

10. ENVIRONMENT AND SAFETY

Energy conservation and the use of clean fuels continue to be a priority area for your Company. Creation of multi-fuel flexibility has led to a significant shift towards use of cleaner fuels where available and more of these opportunities will be harnessed in the future. A biomass gasifier has been successfully commissioned at one factory and more will be installed in the coming year. Following a successful pilot, a new design oven to conserve energy was commissioned with improved benefits. A focused Energy Program has been conceived with a view to carrying out specific initiatives in the field of Energy Efficiency and Conservation. The program looked at fuel conservation by reviewing the design and usage of ovens, and making requisite improvements in both the design and technology. The endeavour is to continually look for opportunities to shift to cleaner fuels and conserve energy.

The initiative of setting up a wet waste composting facility at the Bangalore Office, last year, received the prestigious Namma Bengaluru Award from Namma Bengaluru Foundation for the year 2012-13 for effective solid waste management. This award recognises the extensive efforts made by Britannia in making Bangalore a cleaner city. As part of the continuous effort to encourage the culture of reducing and recycling, a waste management initiative has also been set up with the Company''s co-packer in Bangalore and several projects rolled out at other units are at various stages of completion.

With the objective of providing a healthy and safe environment, your Company''s Environment Health and Safety (EHS) program has been strengthened with dedicated resources and your Company has undertaken several safety measures at all its manufacturing units that include:

- Communicating the EHS Policy to all stakeholders.

- Assessing and identifying unsafe conditions at work place.

- Conducting Hazard and Risk Study at units.

- Monitoring Unit level performance through Total Reportable Incident Frequency Rate (TRIFR).

- Documenting and implementing Safe Operational Control Procedures at units.

- Training people on good sefety practices on the shop floor and elsewhere in the factory.

Your Company strives for a Zero Accident Culture through building a robust EHS Management System to ensure the health and safety of all its employees, contractors and visitors at the work place. As part of this, your Company is adopting Accident Prevention Program at the work place through structured Safety Committees, Systematic Awareness Programs, Periodic Monitoring and Measurement Systems and regular reviews along with business metrics.

11. CORPORATE SOCIAL RESPONSIBILITY (CSR)

For your Company, CSR means Corporate Sustainable Responsibility and this means embedding CSR into its business model. This covers the two broad areas of food-based solutions to increasing nutrition as well as energy conservation, which includes waste management. The solid waste management system of your Company is a first of its kind initiative and works on the credo of "reduce, recycle and re-use". The Company''s Executive Office in Bangalore is a Zero Waste generator unit. An effective system of ''segregation at source'' has been put in place and practised by all employees in the Company''s Executive Office. The dry waste is converted into paper through a collaboration with Khadi Gram Udyog. The wet waste is processed in an eco-centre on campus and 350 kgs of it is composted into manure on a daily basis.

As shared earlier, your Company''s commitment to health includes removal of harmful ingredients such as transfats from its recipes and addition of micronutrients (vitamins and minerals). This has been achieved through active redesign of recipes. Products like "NutriChoice Diabetic Friendly Essentials" have also been introduced. During 2012-13, your Company continued its partnership with Karnataka Nutrition Mission in 2 villages to comprehensively address health and nutrition concerns of children, adolescent girls, pregnant and lactating women. Part of the program was to provide biscuits fortified with micronutrients to the target audience. A study done amongst children (6-12 years) and adolescent girls (11-18 years) who consumed the fortified biscuits for 4 months has shown an improvement in anthropometric parameters like height and weight and a reduction in anemia. This work will continue till December 2013 when the project report will be presented to the Karnataka State Government.

As mentioned in previous reports, the "Britannia Nutrition Foundation" was set up with the belief that every child in India has the right to growth and development through good food - every day. The Foundation disseminates scientific knowledge in the area of nutrition, builds awareness of the massive malnutrition challenge and its solutions and creates a platform for multi-sectoral dialogue and informed action. In September 2012, as part of the national nutrition week, the Foundation partnered a leading English news channel to produce and air a 4 week series titled ''India@65: The Nutrition Challenge''.

The series included an eclectic mix of participants from the nutrition, policy making, development, corporate and communication sectors, in addition to participation from the audience, several of whom are members of civil society networks and working in the development sector on issues relating to health and nutrition. The program was a platform to throw light on the magnitude of the issue and share success stories in combating malnutrition along with social and scientific advancements in the area.

In addition to engaging with the external world, your Company is conducting internal employee programs to boost awareness of the causes and effects of Iron deficiency.

12. REDEMPTION OF BONUS DEBENTURES

The Company has fully redeemed on the due date i.e. 22 March 2013 the 23,890,163 8.25% Secured Redeemable Non-convertible Debentures of Rs. 170 each, amounting to an aggregate value of around Rs. 406.13 crores, issued and allotted in March 2010 from the General Reserve by way of distribution as bonus.

13. PENSION

The proceedings in the suit filed by the Pensioners Welfare Association (the Association) are in progress in the Hon''ble City Civil and Sessions Court, Bangalore. In the meanwhile, the Company''s Pension Funds continue to pay pension to the members, in terms of the Hon''ble Court''s interim order passed on 1 January 2009 as reiterated by the Hon''ble Supreme Court in its order passed in January 2011, in accordance with the computation made on defined contribution basis and submitted by the Pension Funds to the Court.

Pending disposal by the Hon''ble High Courts of Madras and Calcutta of the petitions filed by some Pensioners and the Association, the CIT, Kolkata, is yet to pass any orders on the Deeds of Variation filed by the Pension Funds in view of the interim restraint orders passed by these Hon''ble High Courts.

These and related matters have been dealt with in Note 30 to the financial statements, which are self-explanatory.

14. 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.

15. CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on corporate governance along with the Auditor''s Certificate on its compliance is attached to this Report.

16. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Nasser Munjee, Mr. Ness N Wadia, Dr. Vijay L Kelkar and Mr. Nusli N Wadia, Directors, retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

17. 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 Office of the Company or write to the Company Secretary for a copy thereof.

18. EMPLOYEE STOCK OPTION SCHEME (ESOS)

Requisite disclosure in respect of the Employee Stock Option Scheme (ESOS) in terms of Guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, has been provided in Annexure ''B'' to this Report.

The Share Capital of the Company has gone up from Rs. 23.89 crores as at 31 March 2012 to Rs. 23.91 crores as at 31 March 2013 and to Rs. 23.92 crores as on the date of this Report consequent upon allotment of 75,000 equity shares each on two occasions upon the exercise by the Managing Director of stock options granted under the ESOS in 2008 and 2009 respectively.

19. COST AUDIT

The Order dated 24 January 2012 issued by the Ministry of Corporate Affairs (MCA) - Cost Audit Branch, Government of India, mandating Cost Audit applies to the Company as it manufactures packaged food products falling within Chapter 19 of the Central Excise Tariff Act, 1985. The Company is accordingly required to get its cost accounting records in respect of the financial year commencing from 1 April 2012 audited by a Cost Auditor. Pursuant to Section 233B(2) of the Companies Act, 1956 the Board of Directors on the recommendation of the Audit Committee appointed M/s. N I Mehta & Co., Cost Accountants, as Cost Auditors for conducting Cost Audit for the financial year 2012-13. The Cost Audit Report is required to be filed within 180 days from the end of the financial year. The Cost Audit Report for the financial year ended 31 March 2013 will be filed within the prescribed period.

20. AUDITORS

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 office and are recommended for re-appointment as the Company''s 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, confirm 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 2013 and of the profit of the Company for the year ended 31 March 2013;

(c) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

22. ACKNOWLEDGEMENTS

Your 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.

On behalf of the Board

Mumbai Nusli N Wadia

24 May 2013 Chairman


Mar 31, 2010

The Directors present their Annual Report together with the Statement of Accounts for the year ended 31 March 2010.

1. FINANCIAL RESULTS

Rs. Million

Particulars Year ended Year ended

31 March 10 31 March 09

Gross Sales 34,246 31,429

Other Income 561 399 Profit from Operations

(PBT before Other

Income, Finance costs and

Exceptional Items) 1,257 2,293

Profit before Tax 1,208 2,325

Less: Tax 43 521

Net Profit 1,165 1,804

Add: Profit brought forward 1,096 600

Profit available for

appropriation 2,261 2,404

Less: Proposed Dividend 597 _

Less: Interim Dividend - 956

Less: Tax on Dividend 99 162

Less: Transfer to General

Reserve 117 190

Balance Carried forward to

Balance Sheet 1,448 1,096

Net Cash flow from

operating activities 2,353 2,468

2. OVERVIEW OF COMPANY PERFORMANCE

The year witnessed unprecedented commodity inflation, particularly in sugar, wheat and milk products, in the latter half of the year, coupled with a fiercely competitive environment. This restrained your Companys ability to correct selling prices and had a high adverse impact on margins and profitability. Consequently, whilst your Company added Rs. 2,817 MM to gross sales, Profit from Operations declined by Rs. 778 MM, excluding provisions for certain one-off items aggregating Rs. 258 MM for certain disputes relating to a long term lease, excise duty demand and obligation arising from a past acquisition. Net cash flow from operating activities was Rs. 2,353 MM, achieved by a disciplined approach to managing working capital. Exceptional items for the year include Rs. 329 MM towards amortization of VRS costs and provision of Rs. 200 MM for losses arising from Sri Lanka operations and closure. Earning Per

In retrospect, 2009-10 was a challenging year with the country going through an economic slowdown in the first half, unprecedented inflationary pressures on the consumer food basket and exceptional input commodity inflation 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 strategy of generating growth through increasing the base and frequency of consumption and, at the same time restructuring operations and eliminating waste.

The market challenge was successfully met by strengthening the Companys pillar brands which grew at over 17%, year on year, in the second half.

The Company addressed the cost challenge by removing over Rs. 700 MM (over 2% of sale value) in cost, by consolidating operations, optimizing manufacturing units, reducing complexity and eliminating wastages in the value chain. Your Company has also undertaken an ambitious program to more than double cost savings in the coming years.

Additionally, your Company focused attention on building new capabilities and a robust pipeline of innovation. Coupled with leading edge go-to-market approaches these innovations tap new sources of growth and profitable revenue, while building brand differentiation and relevance. New products like Britannia Cookies and Treat Choco- Decker were launched, leveraging new capabilities, to open up new growth vectors. Consumption opportunities were successfully tapped and widened through introduction of regional brands like Britannia Top, extensions of existing brands, like Nutri-Choice Nature Spice and "on-the-go consumption" at the Rs. 5 price point was enlarged and now contributes in excess of 10% of your Companys business.

The Companys Dairy operations represent a big pillar for growth. Subsequent to your Company acquiring from the JV partner its 49% equity stake and preference shareholding in erstwhile Britannia New Zealand Foods Pvt. Ltd., growth has been accelerated and synergies secured with the Britannia business. Operations have also been streamlined for superior profitability and new, differentiated products like Actimind have been introduced, in addition to strengthening the existing portfolio of cheese, dahi and UHT milk.

Once again, consumers voted brand Britannia among the Top 10 Most Trusted Brands across all categories for the 6th successive year in an independent survey conducted by AC Nielsen and Economic Times. Britannia was rated as # 2 Most Trusted Food brand and # 9 Most Trusted brand across all categories in 2009.

Britannia brands are embedded in the lives of people, adding joy and vitality to everyday moments. By delivering on Britannias promise of "zindagi mein life" through enjoyable food that is good for you, the Company contributes to the joy and well-being of its consumers. Brands that deliver over 50% of volume are now fortified with micro-nutrients that meet the WHO standards and transfats have been removed from most products. In October 2009, as a big step in this mission, your Company initiated the process of setting up the Britannia Nutrition Foundation, a non profit institution, dedicated to activities and programs that further the cause of nutrition for children. The work done by your Company in the area of child nutrition was also recognized as exemplary by the Clinton Global Initiative and featured in the closing plenary of the 2009 Meeting in New York.

During the year your Company won many accolades - Pure Magic Canister received the "PFFCA STAR AWARD" and Cake Greetings Carton pack the "CORRUSTAR AWARD" for The Best Consumer Pack of the Year awarded by Federation of Corrugated Box Manufacturers of India (FCBM). Treat Holography Pack and Greetings carton pack won the "INDIA STAR AWARD" while Pure Magic won the "INDIA STAR, ASIA STAR AND WORLD STAR AWARD."

Your Companys exports grew robustly this year with Britannia brands growing 50%, owing to a better product mix and higher pricing in all markets except Africa, which experienced a decline mainly owing to currency devaluation leading to severe pricing pressure. For Britannia Brands a three pronged strategy was followed through improved distribution in high growth markets of USA, Canada, Australia, New Zealand and Singapore, launch of new products like Rusk, Nutrichoice 5 Grain, Nutrichoice Digestive, and opening up of new geographies: Taiwan, Fiji, Nigeria, Botswana & Ghana.

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 reflect 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 2010 was Rs. 37,943 MM.

The Consolidated Net Profit of the Company for the year ended 31 March 2010 was Rs. 1,032 MM compared with Rs. 1,515 MM in the previous year.

Rs. MM

Particulars Year ended Year ended

31 March 10 31 March 09

Gross Sales 37,943 34,523

Other Income 635 387

Profit from Operations 1,084 1,721 (PBT before Other Income, Finance costs and Exceptional Items)

Profit before Tax 1,087 1,963

Net Profit 1,032 1,515

Performance of Subsidiaries and Associates is presented below:

SUBSIDIARIES AND ASSOCIATES

Your Directors present herewith a bread overview of the operations and financials of Subsidiaries and Associates of your Company.

Britannia Dairy Private Limited (BDPL) [Formerly known as Britannia New Zealand Foods Private Limited

(BNZF)]

During April 2009, your Company entered into an agreement with M/s. Fonterra Brands (Mauritius) Holdings Limited, Mauritius, for acquiring the latters

49% equity and preference shareholding in BNZE With this acquisition, your Company now holds the entire equity and preference capital in the Dairy entity. Consequent to this acquisition, BNZF has been renamed as Britannia Dairy Private Limited (BDPL).

The year witnessed an unprecedented increase in the cost of milk. Availability of dairy products, especially butter, was also severely affected. In these difficult conditions, BDPL grew profitably by diversifying its sourcing base and driving efficiencies across all cost elements of the supply chain. Consequently, for the year ended 31 March 2010, BDPL recorded a turnover of Rs. 1,888 MM compared with Rs. 1,619 MM in the previous year, a growth of 16.7% and recorded a Net Loss of Rs. 344 MM. The Net Loss of the current year includes an exceptional charge of Rs. 445 MM towards amortization of intangibles consequent to your Company acquiring 100% stake in BDPL. Excluding this, the company has achieved Net Profit of Rs. 101 MM, compared to Net Loss of Rs. 35 MM in the previous year.

Your Company has plans to scale up existing products and launch differentiated products to drive consumer preference, profitable growth and shareholder value. This will be implemented through a focused approach across products, channels and geographies. BDPL is also working towards strengthening its innovation funnel and supply chain operations. Dairy products will thus play a more dominant role in the growth of your Company going forward.

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 and retail segments. In 2009-10 Daily Bread consolidated its operations in Bangalore and focused its efforts as an incubation venture to arrive at the business model for roll out to other cities. The business made significant improvements in its operation to break even at the EBITDA level by the end of the year. Business growth was enhanced with expansion of the retail footprint using a franchising route and costs were reduced by streamlining commissary operations and optimising delivery models.

The Daily Bread business provides Britannia with the opportunity to engage with a new business opportunity in retail. Equally, it complements and synergizes Britannias core competency in Bakery, making it Indias foremost food brand with leadership across the extended bakery space of biscuits, cakes, rusks, bread etc.

The company achieved a turnover of Rs. 144.87 MM and recorded a net loss of Rs. 45.55 MM as against

a loss of Rs. 247.67 MM in the previous year. In the Bangalore market where it currently operates, Daily Bread registered a sales growth of 21.9%.

Strategic Food International Co. LLC, Dubai (SFIC)

During the financial year, your Company acquired the complete beneficial interest in the above business. Despite the challenging global economic scenario and a real population decline in Dubai, UAE where the Company has a sizeable presence, the Company maintained sales at AED. 99.3 MM (Rs. 1,280 MM) for the year ended 31 March 2010 on a pro rata basis at almost previous years levels (AED. 129.9 MM or Rs. 1,578 MM for the 15 months period ended 31 March 2009). SFIC posted a net loss of AED. 14.35 MM (Rs. 185 MM) for the year, compared to a net loss of AED. 22.17 MM (Rs. 269 MM) for 15 months ended 31 March 2009.

During the year, the Company has increased its market share in the GCC region, launched the "Nutro" brand in refreshing new packs and made significant brand investments. These have strengthened its competitive position, with share gains in all markets in the GCC where the Company operates. Additionally, the Company entered Kuwait and the Kingdom of Saudi Arabia with reputed distributors. Al Sallan Food Industries Co. SAOC (ASFI)

Sales for the year ended 31 March 2010 increased to Omani Rials (OMR) 7.56 MM (Rs. 924 MM) from OMR 6.3 MM (Rs. 730 MM) for the 15 months period ended 31 March 2009. The net loss for the year ended 31 March 2010 was OMR 0.68 MM (Rs. 83 MM) [15 months ended 31 March 2009 net loss OMR 0.59 MM (Rs. 69 MM)]. Profitability was adversely affected due to increase in commodity prices.

ASFI added Burtons of UK as a customer for its quality private label products of fig rolls and re- launched the "Bakers Pride" brand. Your Company makes and sells a select range of "Britannia" products at the world class facilities in Sohar, Sultanate of Oman primarily for Middle Eastern markets.

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 loss of the investment companies for the year ended 31 March 2010 was Rs. 0.5 MM and Rs. 13 MM respectively. The negative profit is on account of loss on sale of shares in group companies to your Company.

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 2009-10 are as under:

Rs. MM

Name of Subsidiary Gross Net

Income Profit

/ (Loss)

International Bakery Products 118 0.48

Limited, TC Balam

J B Mangharam Foods Private 168 10.39

Limited, Gwalior

Manna Foods Private 11 (6.80) ted, Kolkata

Ganges Vally Foods Private 100 0.49

Limited, Kolkata

Sunrise Biscuit Company 706 35.25

Private Limited, Guwahati

Britannia and Associates (Mauritius) Private Ltd. (BAMPL)

BAMPL, a company formed in Mauritius is the holding company of Britannia and Associates (Dubai) Private Ltd., 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. In March, 2010 your Company acquired the equity stakes held by the investment companies: Boribunder, Flora and Gilt Edge in BAMPL and consequently BAMPL is now a wholly owned subsidiary of the Company.

The combined revenue and loss of holding companies for the period ended 31 March 2010 was USD 0.01 MM (Rs. 0.64 MM) and USD 0.33 MM (Rs. 15.73 MM) respectively.

Welfare Companies

M/s Britannia Employees General Welfare Association Private Limited, M/s Britannia Employees Educational Welfare Association Private Limited and M/s Britannia Employees Medical Welfare Association Private Limited are the three other Associates of your Company. These are companies limited by guarantee, 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 250% on the paid up equity share capital of the Company, which works out to Rs. 25 per share, for consideration and approval by the shareholders at the Annual General Meeting. The total payout amounts to Rs. 696 MM including dividend distribution tax of Rs. 99 MM.

5. BRANDS

Your Company believes that its brands are its business. Therefore the right and adequate investment in brands is a key priority for profitable growth. This investment includes everything that the Company does to gain consumer insights and convert those into meaningful and differentiated propositions that delight and satisfy consumers and create value for all other stakeholders. During the year, investment in R&D, Advertisement & Sales Promotion increased by 27.3% and together with the renovation & innovation efforts across the portfolio, resulted in a healthy and double digit growth.

Your Company brands span two distinct portfolios in the bakery business - delight and lifestyle (brands like GoodDay, Treat, 50-50 and Pure Magic etc.) and health and nutrition (brands like Tiger, Milk Bikis, MarieGold, NutriChoice and products like bread and rusk). In addition, the Companys Dairy brands are a significant engine for the Companys growth, fuelling the health and nutrition position.

Several new and renovated offerings were successfully introduced across the entire portfolio and include Nutrichoice Nature-Spice Cracker, Marie renovation fortified with 10 micro-nutrients, Treat Choco Decker

- a biscuit-chocolate delight for kids. Research in the area of food ingredients has led to development of special texture product like Britannia Cookies. Completely innovative products such as long shelf- life vegetarian cakes, special breads like Healthy Slice, Milk Breads etc. have also been introduced. Simultaneously, in Dairy, your Company introduced Actimind, a milk based nutritive beverage for kids in a few markets and strengthened the dahi portfolio. Your Company has also invested significantly in building its capability and pipeline of innovation. This has reflected in an increased contribution of new lines to our business and is expected to strengthen in the coming years.

Your Company also introduced a number of new packs to target new consumption opportunities both in-home and out-of-home at an accessible price of

Rs. 5. The sales of these doubled in the current year with innovative "go to market" initiatives.

6. MANUFACTURING OPERATIONS

The manufacturing operations continue to focus attention on delivering consistent quality products to consumers, every time, all the time. In this regard, a systematic approach by way of focused work groups to rapidly and definitively deliver the new formats has been put in place, while concurrently developing competencies to handle adjacent technologies.

Concentration on cost minimization continues to be one of the key deliverables of the manufacturing system and in this regard, the appropriate exploitation of latest technologies like energy integration through new energy efficient ovens, on-line mixing etc. have been put in place in a few relevant units. This drive will continue in the forthcoming years to leverage Technology as a competitive edge. Uttarakhand factory continues to deliver a significant share of production and with investment in automation and mechanization, will continue to drive efficiencies. Marginal capacities have been exited during the course of this year like Manna Foods in Kolkata.

Rusk throughput levels have undergone an increase by way of strategic expansions in existing units as well as creation of third party greenfield operations. The scale benefits are now being leveraged by way of enhancement of manufacturing technologies.

7. QUALITY STANDARDS

As a philosophy your Company has, over the years, been continually striving and excelling in its delivered quality standards, not only in its products and packs, but also in its operations by establishing various quality systems and processes at critical points of the Supply Chain.

The thrust has been on ensuring that quality processes are utilized in various facets of the Supply Chain covering both existing and new processes such as Daily Quality Indexing, Food Safety Certifications in the form of ISO 22000, Quality Audits, Vendor Quality Improvement Program, Regulatory Processes, Training and New Product Quality tracking. The Consumer Quality Index tracking has now been institutionalized and covers the entire portfolio. The Comprehensive Consumer Quality Index has seen consistent improvement over the months which indicate higher delivered quality standards. Another significant shift during the year has been the establishment of "Cost Champions" to improve cost efficiency and effectiveness.

The results of the comprehensive Quality Systems and Processes which have been put in place are reflected in the significant reduction in consumer complaints reported during the year. Further, the spontaneous feedback from delighted consumers has been a matter of great pride for your Company.

8. INFORMATION TECHNOLOGY

Your Company continues to invest in Information Technology to improve operational efficiencies and to facilitate informed decision making. Workflow systems are deployed across all key business processes. This year, the core ERP system was integrated with the secondary sales system which enabled the implementation of a Continuous Replenishment System across depots. Several metrics for monitoring business performance are now using the business intelligence platform.

During the year, your Company has consolidated its IT infrastructure using virtualization technology, which has reduced the number of servers by 50% leading to significant reductions in energy/power conservation.

9. ENVIRONMENT AND SAFETY

Several initiatives were continued as part of energy saving measures including a new invention in baking. 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 were used for baking purposes wherever such fuels were available to reduce pollution.

10. CORPORATE SOCIAL RESPONSIBILITY

Your Company continues to pursue its Corporate Social Responsibility by driving the Nutrition agenda in India. It is a well documented statistic that India suffers from wide spread micronutrient deficiency - the most notable being Iron Deficiency or Anaemia which affects 70% of the Indian population. Your Company continues to support NGOs like the Navjyoti Foundation by supplying Iron Fortified biscuits - you may be pleased to note that within 3 months of supply of these biscuits, children showed a significant improvement in Iron status with a rise in Haemoglobin levels from around 8 to around 12.

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) etc. Your Company has been recognized for its CSR efforts by the global non-partisan organization CGI - Clinton Global Initiative. Out of 1,200 organisations that are part of the CGI, your Companys progress on its nutrition commitment

was acknowledged at the closing plenary and your Company was asked to present a progress update in front of a global audience of Heads of States, industry and NGO representatives and international media in New York in September 2009.

Your Company is in the process of setting up a foundation under the name and style of the "Britannia Nutrition Foundation" which will primarily work towards betterment of the undernourished segments of our society and will be supported by an external expert advisory board. To advance this process, your Company had organized a well attended technical seminar on "Addressing Malnutrition in India" on 12 October 2009 in New Delhi.

11. BONUS ISSUE OF NON-CONVERTIBLE DEBENTURES

Pursuant to the Scheme of Arrangement sanctioned by the Calcutta High Court vide its order passed on 11 February 2010 under Section 391(2) of the Companies Act, 1956, 23,890,163 Secured Redeemable Non-Convertible Debentures of Rs. 170 each (Bonus Debentures) amounting to an aggregate value of around Rs. 4,061.33 MM were issued and allotted on 22 March 2010 from the General Reserve by way of distribution as bonus, to the Members in the ratio of one Bonus Debenture of Rs. 170 for every equity share of Rs. 10 held on the Record Date, i.e. 9 March 2010. These Bonus Debentures have since been listed on BSE, NSE and CSE. These Debentures were rated AAA/Stable by CRISIL.

12. 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 c6ntribution of Rs. 121.199 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 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 has preferred an appeal before the Central Board of Direct Taxes, New Delhi challenging the orders of the CIT.

A suit was filed by the Britannia Industries Limited Pensioners Welfare Association in the Court of City Civil & Sessions Judge, Bangalore, where the Honble Court 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 computation made and submitted by the Pension Funds to the Court. This computation was on a defined 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 "Defined Benefit Basis", and gave the Funds 2 months time for complying with the order. An appeal was filed against this order in the Karnataka High Court, which was heard on 22 April 2010. The Honble Court has fixed 15 June 2010 for further hearing whilst modifying the Trial Courts order so as to extend the time limit from 2 months to 3 months.

The above matters have been dealt with in note No. 28 of Schedule T to the Accounts, which are self- explanatory.

13. 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 the Directors Report.

14. SETTLEMENT WITH KRAFT INC., USA

Your Company, Generale Biscuit S.A.(GB) and Kraft Foods Singapore Pte. Ltd. arrived at a negotiated settlement on 14July 2009 in full and final settlement of all claims from December 2007 onwards in respect of the disputes relating to infringement of your Companys Trade marks. In terms of the settlement your Company will have exclusive ownership of all IP rights in its Tiger Logo and GB and its affiliates were precluded from using that Tiger Logo in relation to any goods or services anywhere in the world. GB and its affiliates have consequently assigned the existing Tiger Logo registrations in favour of your Company, as envisaged under the settlement, effective 14 July 2009. GB would have exclusive ownership of all IP rights in the Tiger Logo it has developed. While your Company would desist from selling or distributing any products bearing any Tiger Logo or the Tiger Word Mark in Indonesia, Malaysia, Singapore, Egypt, Philippines, Vietnam, Yemen and Afghanistan for a period of 20 years, GB will not sell or distribute any products bearing any Tiger Logo or the Tiger Word Mark for a period of 30 years in India and 20 years in Sri Lanka. Bhutan. NeDal and Bangladesh.

15. 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 Certificate on its compliance is attached to this Report.

16. DIRECTORS

Your Board appointed Mr. Nasser Munjee as a Director with effect from 17 August 2009 in the casual vacancy caused by the resignation of Mr. Stephen Gerlich. He holds office 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.

Your Board also appointed as Additional Directors Mr. Ness N Wadia with effect from 29 April 2010 and Dr. Vijay L Kelkar with effect from 28 May 2010. They hold office up to the date of the forthcoming Annual General Meeting under Section 260 of the Companies Act, 1956 read with Article 94 of the Articles of Association of the Company, and are eligible for appointment as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Avijit Deb, Mr. Nimesh N Kampani and Mr. S S Kelkar, Directors, retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

17. 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 Office of the Company or write to the Company Secretary for a copy thereof.

18. 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.

19. AUDITORS

Messrs Lovelock & Lewes, Chartered Accountants, who are the Statutory Auditors of the Company, hold office, in accordance with the provisions of the Companies Act, 1956 (the Act), upto the conclusion of the forthcoming Annual General Meeting (AGM). They would not be seeking re-appointment at the ensuing AGM. The Company has received a special notice from a Member of the Company in terms of the provisions of the Act, signifying his intention to propose the appointment of Messrs B S R & Co., Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of the ensuing AGM until the conclusion of the next AGM. Messrs B S R & Co. have also expressed their willingness to act as Auditors of the Company, if appointed, and have confirmed their eligibility. Members are requested to appoint Messrs B S R & Co. as Auditors at remuneration to be fixed by the Board of Directors.

20. DIRECTORS RESPONSIBILITY

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors, based on representations from the Operating Management, confirm that:

i) In the preparation of annual accounts, the applicable Accounting Standards have been followed and there are no material departures;

ii) They have, in selection of the accounting policies, consulted the statutory auditors and applied these policies consistently, making judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31 March 2010 and of the profit of the Company for the year ended 31 March 2010;

iii) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

21. ACKNOWLEDGEMENTS

The Directors would like to thank all stakeholders, namely, customers, shareholders, dealers, suppliers, bankers, employees and all other business associates for the continuous support given by them to the Company and its management.

On behalf of the Board

Mumbai Nusli N Wadia 27 May 2010 Chairman

 
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