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Directors Report of Britannia Industries Ltd.

Mar 31, 2017

The Directors present their Report together with the audited financial statements for the year ended 31 March 2017.

I. FINANCIAL PERFORMANCE

a. Standalone Financial Results

Rs. in Crores

Particulars

Year ended 31 March 2017

Year ended 31 March 2016

Sale of goods

8,581.55

7,880.56

Profit before tax

1,251.16

1,149.13

Profit after tax

843.69

763.31

Profit available for appropriation

1,979.86

1,509.34

Proposed dividend (including tax thereon)

317.75

288.80

b. Overview Of Company Performance

Your Company achieved a revenue growth of 8.9% and strengthened its market leadership in an environment which was impacted by sluggish category growths. While, we witnessed robust topline growth in the first half of the year, there was significant slowdown in the second half of the year post demonetization. Besides, growth in International Business also continued to be under pressure due to deteriorating geopolitical situation and currency fluctuations in geographies like Middle East, Africa and a general economic slowdown in certain key export markets. To minimize effects of this trend, your Company focused on:

(i) Strengthening distribution by enhancing direct reach which now stands in excess of 1.5 million outlets;

(ii) Driving the rural and weak state agenda and gaining market share while achieving double digit growth;

(iii) Building new capabilities and driving innovation which resulted in many new launches and re-launches in the form of Good Day Nuts Cookies, NutriChoice Oat Cookies, 50-50 Mathri Masti, Good Day Chocochips and so on which were well received by Consumers;

(iv) Finalising plans for expansion in export markets.

Your Company also encountered a very volatile commodity environment during the year and witnessed significant price rise in key commodities. While, your Company actioned requisite price increases, the primary focus was on accelerating its Cost Efficiency Program through scale in operations, technology interventions, wastage reduction in the value chain, optimized advertising spends and fixed costs leverage. This helped your Company achieve a profit growth of 10.5% and sustain its profitability while ensuring competitiveness in the market place.

Your Company has been actively working on realising untapped opportunities in the bakery business as well as in the adjacent macro snacking space. To this end, your Company entered into a Joint Venture Agreement with Chipita S. A, a Greek Company, for manufacture and sale of ready-to-eat filled croissants which is a very large category in certain countries demographically similar to India. Your Company shall continue to scout for many such profitable growth opportunities to ensure that it stays ahead of the market while transforming itself into a total Foods Company.

c. Consolidated Financial Performance

Consolidated Financial Statements prepared in accordance with Section 133 of the Companies Act, 2013 read with rules made thereunder and applicable Accounting Standards along with the Auditor’s Report form part of this Annual Report.

Consolidated Sale of your Company for the financial year ended 31 March 2017 is Rs.9,232.30 Crores vis-a-vis Rs.8,554.36 Crores in the previous year, registering a growth of 7.9%. Consolidated Net Profit for the financial year ended 31 March 2017 is Rs.884.61 Crores vis-a-vis Rs.824.58 Crores in the previous year, registering a growth of 7.3%.

d. Subsidiaries, Associates and Joint Ventures Financial Performance

A report on the financial performance of each of the Subsidiaries and Associates included in the Consolidated Financial Statements is provided in Form AOC-1 and forms part of this Annual Report. The audited financial statements of all the subsidiaries are available on the website of the Company: www. britannia.co.in.

Significant Developments during the year

Demerger: The Manufacturing and Retail Sales Business of Daily Bread Gourmet Foods (India) Private Limited has been demerged into Britannia Industries Limited after obtaining necessary approvals from High Court of Karnataka and High Court at Calcutta.

Acquisition: Your Company acquired 26% stake in Sunandaram Foods Private Limited, a cake manufacturing unit in Assam.

Joint Venture: Your Company entered into a Joint Venture Agreement with Chipita S. A, a Greek Company, for the purpose of manufacture and sale of ready-to-eat filled croissants through a Joint Venture Company in India namely ‘Britchip Foods Limited’. Your Company will hold 60% and Chipita will hold 40% of share capital of Britchip Foods Limited.

e. Dividend

Your Board is pleased to recommend a dividend of 1100% which amounts to Rs.22/-per share (face value Rs.2 per share) for consideration and approval by the Members at the ensuing Annual General Meeting. The total dividend payout amounts to Rs.317.75 Crores including dividend distribution tax of Rs.53.75 Crores.

f. Reserves

Your Company has transferred an amount of Rs.84.37 Crores to the General Reserve for the financial year ended 31 March 2017.

g. Share Capital

During the year under review, your Company has allotted 25,000 equity shares of Rs.2 each upon exercise of 25,000 options under Employee Stock Option Scheme. Consequently, the paid up equity share capital of your Company has increased by Rs.50,000 in the current year.

II. OPERATIONAL PERFORMANCE

a. 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 its products versus the desired state. The rigour and commitment behind product innovations which delivered new-to-market experiences is a testimony to the promise forming the core of your Company This reflects your Company’s 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.

b. Supply Chain

Your Company has been focusing on developing a competitive edge in manufacturing by deploying Cost Efficiency and Operational Excellence Programs across the value chain.

Your Company expanded its capacity during the year across five locations, interalia including, a state-of-the-art imported Cream biscuit line, an imported Speciality Cookie line and the first in-house Rusk Plant. Your Company has increased its operating control on capacity with the commissioning of these new production lines. Further, one Greenfield Plant is under way in Assam and two more are planned for Project startup in FY 2017-18. To improve your Company’s competitiveness in the International market, a Greenfield Project at Mundra Special Economic Zone, is being put up and is expected to commission in the coming year.

These initiatives have helped in creating the right capacity and capability using cost-efficient yet superior technology to meet the growing demand and rising consumer expectations. With the ever increasing challenges in supply chain planning, especially during the period of demonetization, your Company could manage the volatility in demand by effectively deploying various IT tools to cater to the service levels at an optimum cost.

c. Environment, Health and Safety

Environment, Health and Safety are treated as core values at your Company. Promoting a Zero Accident culture, your Company has strengthened its workplace systems and practices through several accident prevention programs. Further, your Company has also introduced site level performance indicators (Lead, Lag and System related) to promote a positive and proactive culture at work place. During FY 2016-17, all the manufacturing units of your Company have successfully undertaken OHSAS 18001:2007 certification. Your Company also extended safety programs at its depots covering fire, electrical and operational safety

d. Quality Programs

Your Company is committed to provide safe, compliant and consistently better quality products to delight consumers. Your Company started its journey to excel in Food Safety and Quality Standards by building American Institute of Baking (AIB) roadmap through capability enhancement in core teams followed by rigorous internal programs. In this initial phase of AIB roadmap, two of Britannia’s Biscuit units have successfully cleared external AIB inspection. The journey will continue in coming years to build global standards in Food Safety and Quality for your Company

You would be happy to know that all biscuits, cake and rusk manufacturing units are ISO 22000 certified and new units are under certification process. Your Company continued risk assessment based supplier quality assurance programs and carried out rigorous vendor audits for key raw and packaging materials to ensure input material quality Rigorous in-market delivered quality assessment programs helped deliver quality products to consumers.

You would be happy to know that your Company’s consumer care cell is now compliant to the ‘Global Standards on Customer Satisfaction & Guidelines on Complaint Handling’ and it has been awarded with ISO 10002 certification.

e. Research and Development (R&D)

You will be glad to know that your Company’s new R&D centre near Bangalore received approval from Department of Scientific and Industrial Research. This centre is now fully operational with enhanced capabilities for the core as well as future adjacent product categories which will help in innovating faster with superior product experience delivery

During FY 2016-17, R&D team developed for market launch, a new differentiated product ‘Cake Biscotti’. Your Company also expanded its presence in the Veg Cake portfolio with the launch of ‘Veg Choco Cake’. Your R&D team developed delightful and organoleptic superior ‘Good Day Choco Chips’ and ‘Good Day Nuts Cookie’, which received very favourable response from the consumers.

Your Company has further strengthened Health and Wellness portfolio with the launch of ‘Nutrichoice Digestive Zero’ made with whole wheat flour and no added sugar and ‘Nutrichoice Oats’ in two delightful variants, Orange and Almond & Milk. Launch of ‘50-50 Mathri Masti’ embarked into a new territory of cracker-snacks with the taste profile of Indian ethnic snack Mathri.

Your Company’s R&D team continued to work on building cost competitiveness based on value engineering for product and packaging and has also built a robust pipeline for the next year.

Re-engineering of packaging laminate and paper based packaging continued and rolled out during the year leading to use of less plastic and paper. Your R&D team built strategic partnership with global leaders in core areas of interest like Chocolate, Taste Tool boxes and Health & Wellness.

f. Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo

Details of energy conservation, technology absorption, foreign exchange earnings and outgo 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 ‘A’ to this Report.

g. Brands

Brands provide your Company a competitive edge and hence keeping them vibrant, relevant and the preferred choice of consumers is paramount. FY 2016-17 saw a slew of new initiatives - big renovations, innovations, promotions, activations and advertisements which kept your Company’s brands salient in the consumers minds.

FY 2016- 17 witnessed subdued consumer demand, especially in the later part of the year. In view of this, your Company invested in strengthening consumer demand through some focused brand campaigns and activations. Your Company also consolidated product portfolios to bring in efficiencies of scale and accelerated the launch of innovative products and variants across the product portfolio.

The key campaigns executed by your Company were on Good Day, Marie Gold, Milk Bikis, 50-50 and NutriChoice Oats cookies. These campaigns delivered rich returns for the brands.

Your Company brought on board two popular Bollywood Celebrities to endorse its brands - Farhan Akhtar for NutriChoice and Deepika Padukone for Good Day. Both celebrity endorsements have helped the brands to strike a chord with their target audience, as measured by increase in saliency of these brands.

Your Company invested in movie marketing tie ups to promote its brands. The key among them were Milk Bikis and Cheese tie up with the popular animated movie Ice Age, Milk Bikis’s tie up with Tamil movie Passanga starring popular Tamil actor, Suriya and Muffil’s tie up with the animated movie Kungfu Panda which was immensely popular with kids. Your Company also tied up with two IPL teams to create consumer excitement and engagement with its brands, Good Day and 50-50.

Your Company carried out a large scale consolidation of its Top and Time Pass brands with the 50-50 brand portfolio. The key reason was that 50-50 enjoys a high preference amongst its consumers in comparison to its competition. Hence, migrating the smaller brand portfolios of Top and Time Pass into 50-50 would have a positive rub off on them and strengthen our play in the (savory) snacking category.

Your Company launched a host of new-to-market taste experiences across its product portfolio- some of the key ones being Good Day 3 Nuts cookie, Good Day Choco chip cookie, NutriChoice Digestive Zero, Oats cookies and 50-50 Mathri Masti. These innovations are performing well in the market and your Company is continuing to invest behind growing them.

During the year under review, your Company ensured to protect consumer value and has enhanced its competitive edge in the market. This has helped your Company to retain market leadership through FY 2016-17.

Your Company won accolades and recognition at prestigious Marketing Forums in the country. It won the Pitch CMO Summit Award for ‘Best Use of Media’. The flagship brand Good Day won three medals at the prestigious Advertising & Marketing, Abby’s Awards.

Your Company will renew its vigor on renovation, innovation, communication, activation and as a result, increase consumer engagement which will continue to hold your Company’s growth in good stead in the years to come.

III. DIRECTORS

a. Appointment/Re-Appointment

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. A.K Hirjee, Non-Executive Director, retiring by rotation at the ensuing Annual General Meeting is eligible for reappointment.

During the year under review, the Board of Directors at their meeting held on 13 February 2017 appointed Dr. Ajay Shah and Dr. Y.S.P Thorat as Additional and Independent Directors of the Company w.e.f 13 February 2017 subject to approval of the Members.

Mr. Nasser Munjee, Director of the Company resigned at the Nomination and Remuneration Committee Meeting prior to the Board meeting of your Company on 25 May 2017 to be given effect immediately on the conclusion of the Board meeting. In his letter to the Chairman of the Board, Mr. Munjee stated that “my continuance on the Britannia Board is no longer compatible with my activities in the Tata Group. Unfortunately, this has arisen from the events that we all witnessed over the last few months”. “Your questioning my independence on the Boards of Tata Companies and specifically writing to SEBI has also complicated matters”. “There have been consequences of this and matters are truly out of my hands”.

The Chairman while responding to Mr. Munjee informed him that he did not understand the relevance of the statement “my continuance on the Britannia Board is no longer compatible with my activities in the Tata Group. Unfortunately, this has arisen from the events that we all witnessed over the last few months”. He stated that he and the Wadia Group as Promoters of Britannia Industries Limited repeatedly asked and wished him to continue on the Board and that his continued contribution as an Independent Director would in no way be affected by his Directorships at Tatas. He also informed him that the pressures that he was under were solely from the Tatas and not from Wadia Group.

The Directors of your Company are of the opinion that the reasons stated by Mr. Munjee for his resignation from the Board are neither germane nor relevant to Britannia.

The Board while accepting the resignation of Mr. Munjee, appreciated and placed on record the valuable contribution made by him during his tenure as an Independent Director as well as Chairman of the Audit Committee and Risk Management Committee.

b. 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:

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

(ii) 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 2017 and of the profit of the Company for the year;

(iii) 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;

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

(v) 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;

(vi) 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 and secretarial auditors and external consultant(s) and the reviews made by the Management and the relevant Board Committees including the Audit Committee and Risk Management Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and operationally effective during FY 2016-17.

IV. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company as part of its CSR initiatives has undertaken projects/programs in accordance with the CSR Policy. The details of the CSR activities are given as Annexure ‘B’ forming part of this Report.

V. EMPLOYEES

a. Key Managerial Personnel (KMP)

During the year under review, Mr. Amlan Datta Majumdar resigned from the position of Chief Financial Officer and Key Managerial Personnel w.e.f closing business hours of 30 November 2016 and Mr. N Venkataraman has been appointed as Chief Financial Officer and Key Managerial Personnel of the Company w.e.f 1 December 2016.

Mr. Rajesh Arora resigned from the position of Company Secretary and Key Managerial Personnel of the Company w.e.f closing business hours of 30 June 2017.

b. Particulars of Remuneration of Directors, KMPs and Employees

A statement containing the details of the Remuneration of Directors, KMPs 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 ‘C’ to this Report.

c. Particulars of Employees

The disclosure as per Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, forms part of this Report. However, as per the provisions of Section 136 of the Companies Act, 2013, the report and financial statements are being sent to the Members and others entitled thereto, excluding the disclosure on particulars of employees. This is available for inspection by the Members at the Registered Office of your 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 an email to investorrelations@britindia.com

d. Employee Stock Option Scheme (ESOS)

The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and 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 ‘D’ to this Report.

e. Disclosure on Sexual Harassment of Women at Workplace

The Company has 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.

f. Britannia’s Transformative HR Practices

(i) “Britannia for Britannians”

People are the pillar of any organization and your Company is no exception to this. The talented and committed people of your Company have been the architects of its success and reputation which in turn has attracted new talent. This virtuous cycle has ensured that the skill and capability to successfully steer a Company as large as yours is ever present and improving. Your Company termed this virtuous cycle as ‘Britannia for Britannians’ a term that is self-explanatory. Today, about 80% of your Company’s senior management team comprises of people promoted from within which is an industry benchmark according to experts.

(ii) Britannia “Young Manager Council”

In order to build an inclusive work culture and young future leaders, your Company has created a “Young Manager Council” consisting of employees who are less than 30 years of age. The young Managers council is a way for the management to understand youth of the country. The idea behind this initiative is to encourage young managers /management trainees/ new joinees to provide input to the organization on food & snacking habits and preferences of the youth so that Company can develop products accordingly. The young managers provide feedback on current market trends through their distinctive lens. This helps us stay in tune with the changing preferences in palates and their dynamic lifestyles while it keeps them intricately involved in new product launches right from the R&D stage till the launch.

VI. GOVERNANCE/SECRETARIAL

a. Corporate Governance

A Report on Corporate Governance for the financial year ended 31 March 2017 along with the Statutory Auditor’s Certificate on compliance with the provisions of corporate governance under SEBI (Listing Obligation and Disclosure Requirements (“LODR”)) Regulations, 2015 is forming part of the Annual Report.

b. Business Responsibility Report

Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015 read with SEBI Circular No. CIR/CFD/CMD/10/2015 dated 4 November 2015, the “Business Responsibility Report” (BRR) of the Company for FY 2016-17 is forming part of the Annual Report.

c. Extract of Annual Return

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013 read with the rules made thereunder, an extract of the Annual Return in Form MGT-9 is given as Annexure ‘E’ to this Report.

d. Whistle Blower Policy

The details of Whistle Blower Policy are given in the Clause No. 8(c) of the Corporate Governance Report.

e. Board Evaluation

The details of evaluation of Directors, Committees and Board as whole are given in the Clause No. 3(b) of the Corporate Governance Report.

f. Remuneration Policy

The details of the Remuneration Policy are given in the Clause No. 3(b) of the Corporate Governance Report.

g. Risk Management

Your Company has a well defined risk management framework in place and a robust organizational structure for managing and reporting risks. Your Company has constituted a Committee of the Board to monitor and review risk management plan. Risk management process has been established across your Company and is designed to identify, assess and frame a response to threats that affect the achievement of its objectives.

h. Independent Directors

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

i. Board and Committees

The details of Board and its Committees are given in Clause No. 2 and 3 of the Corporate Governance Report.

j. Related Party Transactions

The framework for dealing with related party transactions is given in Clause no. 8(a) of the Corporate Governance Report.

During the year, your Company had not entered into any contract / arrangement / transactions with Related Parties referred in Section 188(1) of the Companies Act, 2013 read with the rules made thereunder. In accordance with Ind AS - 24, the Related Party Transactions are disclosed under Note No. 44 of the Standalone Financial Statements.

k. Public Deposits

Your 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.

l. Particulars of Investments, Loans and Guarantees

The particulars of Investments, Loans and Guarantees covered under the provisions of Section 186 of the Companies Act, 2013 read with the rules made thereunder are given in the Note No. 37, 38 and 39 of the Standalone Financial Statements.

m. Significant and 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 operations of the Company in future.

VII. AUDITORS

a. Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Company by the members at the 95 Annual General Meeting held on 12 August 2014 for a term of 5 consecutive years subject to ratification by the Members at every Annual General Meeting.

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.

Accordingly, the Board recommends ratification of the appointment of M/s. B S R & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company at the ensuing Annual General Meeting.

b. 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, your Company appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for FY 2016-17. The Secretarial Audit Report submitted by them is given as Annexure ‘F’ to this Report.

VIII. INTERNAL FINANCIAL CONTROLS

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

IX. PENSION

In the suit filed by Britannia Industries Limited Pensioners Welfare Association (PWA), the Company received a judgement on 21 September 2015 from Hon’ble City Civil Court, Bangalore, in the matter of pension payable to its eligible beneficiaries. The Board of Directors of the Company reviewed the judgement and after obtaining legal opinion from eminent lawyers resolved to file an appeal in the higher court against the said judgement. Accordingly, the Company has appealed against the Hon’ble City Civil Court’s judgement in the Hon’ble High Court of Karnataka. In response to the appeal filed, the Hon’ble High Court of Karnataka in its order dated 18 December 2015 referred the matter to Bangalore Mediation Centre for exploring the possibilities of settlement. The PWA through their legal counsel had submitted that they will not precipitate execution before the trial court during mediation.

As a result of the mediation process, a Memorandum of Settlement (‘MoS’) dated 29 August 2016 was entered into between the PWA, the Company and Trust Funds. As per terms of the MoS and the Decree passed by the Hon’ble High Court of Karnataka dated 18 October 2016, the Covenanted Staff Pension Fund Trust inter alia, filed an application with the Hon’ble High Court at Calcutta for obtaining approval to use the fixed deposit held in the name of the Trust and interest thereon. In response to the petition filed by the Company, the Hon’ble High Court at Calcutta passed an order directing CIT, Kolkata to consider the representations made by PWA and the Company.

On 9 January 2017, the CIT passed an order withdrawing the approval accorded to Britannia Industries Covenanted Staff Pension Fund (Trust Fund) w.e.f. A.Y. 2003-04. The Trust Fund filed a Writ petition with the Hon’ble High Court at Calcutta against the said order of CIT, Kolkata. On 3 February 2017, while admitting the writ, the Hon’ble High Court at Calcutta did not pass any interim order/grant stay against the impugned order of the CIT. Aggrieved by the same, the Trust Fund filed an appeal in the Division Bench of Calcutta High Court which was heard on 10 March 2017. The Hon’ble High Court granted the stay, however, restrained the Company from encashing the fixed deposit of Rs.12.12 Crores till the final disposal of the writ petition and further directed the single bench of the High Court at Calcutta to dispose of the writ petition as expeditiously as possible. The matter is currently pending before the single bench of High Court at Calcutta.

Related matters have been dealt within Note No. 41 of the Standalone Financial Statements and Note No. 43 of the Consolidated Financial Statements, which are self-explanatory.

X. 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: 30 June 2017 Chairman

(DIN No: 00015731)


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, 2012

The Directors present their Annual Report together with the Statement of Accounts for the year ended 31 March 2012.

1. FINANCIAL RESULTS

Rs. in crores

Particulars Year ended Year ended 31 March 12 31 March 11

Sale of Products 5,005.66 4,230.59

Other Operating Revenues 27.15 25.20

Other Income 58.53 48.92

Profit from Operations 231.91 186.89

(PBT before other income and finance costs)

Profit Before Tax 252.37 198.06

Less: Tax 65.63 52.77

Net Profit 186.74 145.29

Add: Profit brought forward 185.29 144.77

Profit available for

Appropriation 372.03 290.06

Less: Proposed Dividend 101.53 77.64

Less: Tax on Proposed

Dividend 16.47 12.60

Less: Transfer to General

Reserve 18.68 14.53

Balance carried forward to

Balance Sheet 235.35 185.29

Net Cash Flow from

Operating Activities 210.66 246.32

2. OVERVIEW OF COMPANY PERFORMANCE

In an increasingly challenging environment and continuing commodity inflation, profit from operations increased 24.1%, from Rs. 186.89 crores to Rs. 231.91 crores. Your Company held its overall share of about one-third of the biscuit market, strengthened its position in other bakery products like bread, cake & rusk and added Rs. 775.07 crores to sale of products, which grew 18.3%. Earnings per Share ofRs. 2 wereRs. 15.63.

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

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

1. IMC Ramakrishna Bajaj Award for performance excellence for 4 factories in Delhi, Gwalior, Khopoli and Bangalore.

2. CII National Food Safety Award for Delhi factory.

Additionally, Britannia was once again rated the "Most Trusted Food Brand" by consumers across India and achieved the #1 position in the survey done by AC Nielsen for The Economic Times. Brand Britannia also entered the "Hall of Fame" for being in the top 10 most trusted brands, across all product categories, for the last decade.

Your Company continues to focus on 3 key areas to drive operational excellence – revenue management, cost management and innovation. In 2011-12, new products generated 10% of revenue in Bakery and 14% in Dairy. 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. March 2012 also marked the 25th anniversary of Good Day and several initiatives have been planned through the year to celebrate and enhance the consumer experience of one of the most iconic brands in India, with 4.5 MM packs purchased daily.

Your Company addressed its cost challenge by continuing to intensify cost effectiveness and efficiency initiatives in a special program that spans the entire value chain. Over 350 projects were taken up as part of this program in 2011-12 and covered every function and region. A structured program of continuous improvement was also undertaken in several manufacturing units, using kaizen, productive maintenance and total quality management. A separate program office has been set up to monitor these cross-functional projects on an ongoing basis, which involves a large number of employees across the organization.

To drive 'go to market' efficiencies, dairy and bakery distribution and sales were integrated to provide a higher width and depth of coverage and availability for dairy products. Technology investments were made, in the form of hand-held computers for order booking and capturing of relevant market place information.

Your Company's international business also expanded with export from India growing 36.4% and the 2 companies in the Middle East growing at 32.5%. International sales now account for Rs. 275.7 crores.

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.

Consolidated sale of products of the Company for the year ended 31 March 2012 was Rs. 5,519.96 crores compared with Rs. 4,623.25 crores in the previous year, a growth of 19.4%.

Consolidated Net Profit for the year ended 31 March 2012 was Rs. 199.55 crores compared with Rs. 134.35 crores in the previous year, a growth of 48.5%.

Rs.in crores

Particulars Year ended Year ended 31 March 12 31 March 11

Sale of Products 5,519.96 4,623.25

Other Operating

Revenues 24.62 19.65

Other Income 59.14 59.01

Profit from Operations 249.04 171.77

(PBT before other income and finance costs)

Profit Before Tax 266.58 187.15

Net Profit 199.55 134.35

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)

The Dairy segment saw heightened competition from both local and international players, as well as 17% milk inflation during the year. In this environment, the dairy business of your Company grew profitably by focusing on differentiated products and registered a turnover (sale of products) of Rs. 293.06 crores compared to Rs. 218.55 crores in the previous year, a growth of 34%. The business achieved net profit of Rs. 15.51 crores (after considering an amortization charge of Rs. 5.54 crores) compared to net profit of Rs. 4.22 crores (including an amortization charge of Rs. 13.04 crores) in the previous year. Your Company managed this by aggressively controlling cost, improving realization for its products and driving innovation in a very competitive market.

With more value-added products in the pipeline, your Company's dairy vision continues to be anchored in building differentiation and 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 has an institutional business too. Its operations are largely confined to Bangalore.

Daily Bread achieved a turnover (net sale of products) of Rs. 23.69 crores during the year, compared with Rs. 18.89 crores in the previous year, a growth of over 25.4%. The business is on track to be profitable in 2012-13.

Strategic Food International Co. LLC, Dubai (SFIC)

Despite the regional upheaval in the Middle East and North Africa due to the Arab Spring, SFIC grew sales by 29.2% at AED 14.32 crores (Rs. 186.28 crores) against AED 11.08 crores (Rs. 134.30 crores) for the previous year. It posted a net loss of AED 0.33 crore (Rs. 4.34 crores), compared to a net loss of AED 1.08 crore (Rs. 13.10 crores) in the previous year. The business has seen a sharp and significant improvement in performance with an unrelenting focus on containing cost, improving the product and geographic mix and launching innovative products that have gained consumer traction, like digestive biscuits and wafers.

During the year, the Company increased its market share in the GCC region, led by the UAE and Oman. All brands have shown excellent growth, backed by significant but selective brand investment initiatives that have strengthened the Company's competitive position in all markets where it operates. The Company also started selling in Saudi Arabia and sees good prospects there for future growth.

Al Sallan Food Industries Co. SAOC (ASFI)

Sales during the year ending 31 March 2012 increased 14.7% at RO 0.86 crore (Rs. 106.99 crores), compared with prior year sale of RO 0.75 crore (Rs. 86.90 crores). Net Loss for the year was RO 1.31 lakhs, or Rs. 163.34 lakhs (last year loss on a comparable basis was RO 4.78 lakhs, or Rs. 564.94 lakhs). However, arising from a one-time interest waiver by The National Bank of Oman, a profit of RO 1.54 lakhs, or Rs. 181.51 lakhs was posted in the previous year.

The company makes and sells a select range of "Britannia" products at its world class facilities in Sohar, Sultanate of Oman, primarily for Middle Eastern markets. Royal Decrees and Governmental directives recently issued in Oman have resulted in a sharp increase in wages for Omani nationals (who constitute a mandatory minimum 35% of the workforce) and the Company is taking several steps to remain cost competitive.

Britannia and Associates (Mauritius) Private Ltd. (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 Ltd., 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 Co. LLC, a Jebel Ali Free Zone offshore company.

The combined revenue and loss of holding companies for the year ended 31 March 2012 was USD 0.13 crore (Rs. 6.35 crores) and USD 0.02 crore (Rs. 1.10 crores,) compared to USD 0.07 crore (Rs. 3.35 crores) and USD 0.04 crore (Rs. 2.04 crores) respectively, for the period ended 31 March 2011.

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 2012 was Rs. 0.14 crore and Rs. 0.08 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 deemed to be subsidiaries of your Company. The revenue from operations and net profit of the said subsidiaries during 2011-12 are as under:

Rs. in crores

Name of Subsidiary Revenue Net Profit from / (Loss) Operations

International Bakery Products Ltd., Pondicherry 15.54 0.16

J B Mangharam Foods Private Ltd., Gwalior 22.64 1.62

Manna Foods Private Ltd., Madurai 10.06 0.06

Ganges Vally Foods Private Ltd., Hoogly 15.52 0.20

Sunrise Biscuit Company Private Ltd., Guwahati 93.65 (0.09)

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 is pleased to recommend a dividend of 425% on the paid up equity share capital of the Company, which works out to Rs. 8.50 per share, for consideration and approval by the shareholders at the Annual General Meeting. The total payout will be Rs. 118 crores, including dividend distribution tax ofRs. 16.47 crores.

5. BRANDS

Brands are the fountainhead of your Company's profitable growth and during the year, significant investments were made in product development, supply chain and advertising and promotion to make Britannia brands relevant and distinctive. Your Company invests a lot of time and effort in talking with consumers and crafting different, better and special products to delight and satisfy a vast array of their consumption occasions.

As mentioned earlier, several new and renovated offerings were successfully introduced across the entire portfolio that include: NutriChoice Multigrain Thins and Roasty, Pure Magic, Treat Fruit Creams, Marie with Honey and Oats, 50-50-Snackuits, Good Day Fresh Bake Butterscotch and Chocolate Ecstasy, etc. Additionally, the Britannia bread range was augmented with Multigrain, Honey-Oats, 100% Whole Wheat and Multifiber breads. A Gourmet cheese range consisting of slices and spreads, as well as the Tiger-Zor chocolate and almond milk provided significant impetus to the Dairy business.

Your Company has and will continue to invest aggressively in brand building programs, including the capability for establishing a continuous pipeline of innovations and renovations. 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.

Your Company is committed to building a competitive edge at the front-end, driving effectiveness by using technology powerfully and is the only food company that has introduced a 'Hand-Held' device for its sales people to book orders, enabling the capture of real time and accurate information to service demand with speed and precision.

6. SUPPLY CHAIN AND MANUFACTURING OPERATIONS

The focus here continues to be on reducing complexity, improving stock replenishment at depots and distributors and reducing total cost to deliver. Capacity has been added in several existing manufacturing units and 2 new Greenfield units in Hajipur, Bihar and Khurda, Orissa were completed and commissioned towards the end of the year. Additionally, technology innovations that increase manufacturing productivity have been implemented in several units and will be rolled out where relevant.

New tools are being introduced to deal with reducing the network complexity of manufacturing units and depots across the range of product lines, thereby improving availability at optimal cost. Your Company has, where relevant, created operational synergies through combining the sales, distribution and replenishment structure and infrastructure for domestic Bakery and Dairy.

Procurement processes have been reinforced to ensure greater competitiveness and transparency in price discovery, through the use of e-platforms.

7. QUALITY STANDARDS

The importance on comprehensively addressing quality right through the value-chain has been encompassed in a new program in the Company – 'Q-Next' where the emphasis is to continually raise standards of quality, not just in products and packs but also processes and systems.

To maintain sustained focus on all operational excellence programs, a new function for Manufacturing Excellence has been set up to drive various initiatives like Total Productive Maintenance (TPM), Total Quality Management (TQM) and ongoing improvements through a well-structured Kaizen program.

As mentioned earlier, 4 manufacturing units were given the prestigious IMC Ramakrishna Bajaj National Performance Excellence Award in the manufacturing category. The Corporate Office at Bangalore also received an award, the requirements of which are based on the Malcolm Baldrige Award for Business Excellence in the USA.

Additionally, the Delhi factory received the National Food Safety Award and the Gwalior factory a commendation certificate from the Confederation of Indian Industries. To strengthen the Company's capability for exports to the EU, both these factories have also been certified for BRC (British Retail Consortium) standards.

8. INFORMATION TECHNOLOGY

The relevant and smart application of Information Technology enables your Company to improve operational efficiencies and decision effectiveness. During 2011-12 your Company implemented a Product Lifecycle Management (PLM) system to enhance the productivity of its Research and Development processes. A Supplier Portal was also created to effectively manage procurement operations.

To address the security aspects of information technology systems, your Company deployed Network Security appliances and implemented redundancy in the MPLS network system to ensure high availability of IT systems across all its manufacturing and distribution locations.

A project has also been initiated to transform and integrate supply chain processes using an IT solution to enable dynamic demand planning and effectively address challenges in managing the supply chain.

9. ENVIRONMENT AND SAFETY

Energy conservation and the use of clean fuels continue to be a priority area for your Company. Following a successful pilot test at one unit, a new design oven, to conserve energy requirements, was commissioned in other units.

The use of environment friendly fuels like propane, LPG, PNG and biomass for baking purposes has been extended wherever such fuels are available. Creation of multi-fuel flexibility has led to a significant shift towards use of cleaner fuels and more such opportunities will be harnessed in future. Additionally, a pilot test is in progress to use polymer fuel made from recycled plastic. The endeavor is to continually look for opportunities to shift to clean fuels and conserve energy.

In the spirit of reducing waste and encouraging re- cycling, a wet waste composting facility has been set up at the Bangalore Office, in collaboration with a local NGO and a Waste Management System has been implemented that fully recycles both the dry and wet waste. The plan is to extend this to other office locations and factories, for which a pilot is already under way at a contract packing unit in Bangalore.

As part of its overall safety initiatives, your Company has implemented several safety measures at all its offices, mainly in terms of:

- An Emergency Preparedness Plan at the Corporate Office

- Safety Audits as per National Building Code for all Regional Offices

- Installation of Safety and Security systems (Fire Alarms, Access Control and Surveillance Systems) at regional offices

- Fire fighting mock drills in most locations.

Your Company is committed to being an environmentally responsible company and ensuring the health and safety of all its employees, contractors and visitors at the workplace. In line with this objective and to create a "Zero Accident" culture, all its factories and joint ventures will be OHSAS 18001 (Health and Safety Systems) certified during the next two years in a phased manner, the work for which has already begun.

Your Company is benchmarking its occupational health and safety performance indicators across all manufacturing locations to identify, monitor, record and adopt best practices in its operations. Its approach to safety and health in the workplace is an essential part of its value proposition for employees and several health and safety initiatives are undertaken on an ongoing basis.

As part of OHSAS certification, GAP assessment on occupational health and safety has been undertaken by Lloyd's Register Quality Assurance Ltd. (LRQA) at the Company's factories in Delhi and Rudrapur and at Super Snacks, a contract packer.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company believes that the best way to be socially responsible on a sustainable basis is to embed that into its business model. It, therefore, approaches CSR as Corporate Sustainable Responsibility and is focusing on 2 areas – food based solutions to increasing nutrition and energy conservation, which includes waste management, elaborated earlier in the note.

Its health and nutrition efforts embody the removal of unhealthy ingredients like transfats from its biscuit recipes and the addition of micro-nutrients (vitamins and minerals) to almost 60% of the volume it sells through brands like Tiger Glucose, Marie, Vita MarieGold, Milk Bikis, Britannia Bread, Tiger Chocolate and Badaam Milk.

Your Company has also pioneered relevant products to address specific health concerns like diabetes, which is fairly prevalent in India and was the first to bring to market, energy-snacks, with a low glycemic index specially created for people with diabetes – Nutrichoice Diabetic Friendly Essentials. Last year, your Company added to the portfolio a savory, multi-grain roasted snack, Roasty, also with a low glycemic index.

As you are aware, Indians, especially children and women, suffer from wide spread micronutrient deficiency – the most notable being Iron Deficiency Anaemia which affects almost 60% of school going children. Your Company has specially formulated iron-enriched biscuits that can supplement the main, hot meal that is given to children in school. The biscuit becomes an acceptable and welcome 'carrier' for iron supplementation. This initiative is executed through a range of partnerships with several NGOs and supply of iron-enriched biscuits to government schools in several states.

During 2011-12, your Company partnered with the Karnataka Nutrition Mission and adopted 2 villages to comprehensively address health and nutrition concerns of children, adolescent girls, pregnant and lactating women. The work involves a baseline understanding of the relevant nutrition and health parameters, creating awareness among women of good health and hygiene practices, educating them on the need for adequate food and nutrition for themselves and their families, supplementing their diet with micronutrients using biscuits as the carrier for these and measuring the health and nutrition indicators over a period of time.

Your Company continues to pursue relevant partnerships with key organizations in Nutrition like GAIN (Global Alliance for Improved Nutrition), UNWFP (United Nations World Food Program), WBI (World Bank Institute), CGI (Clinton Global Initiative), etc.

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 work of the Foundation is in three core areas - disseminating scientific knowledge in the area of nutrition, building awareness of the massive malnutrition challenge and its solutions and creating a platform for multi-sectoral dialog and informed action. The Foundation does this through an annual symposium during the National Nutrition Week in the 1st week of September, each year. The topic of the symposium on 2nd September 2011 in New Delhi was, "Making a case for all stakeholders to come together to combat malnutrition". The Symposium had 18 international and national speakers of eminence from the scientific and medical fraternities, the development sector and the Government. The Symposium shared success stories from other countries in combating malnutrition along with scientific advancements in the area. The final session was a panel discussion, televised on a leading national news channel and included an eclectic mix of participants from the nutrition, policy making, corporate and communication sectors, in addition to participation from the audience, several of whom are members of civil society networks and work in the development sector on issues relating to health and nutrition. For the first time, student papers were invited and awards given for new thinking. The jury for these awards was drawn from the academic and scientific community focusing on nutrition.

Your Company also sponsored and participated in health and nutrition seminars to further the cause of awareness building. Some of them are:

- International Life Sciences Seminar, New Delhi, April 2011

- Functional Foods and Beverages Seminar, Mumbai, July 2011

- India Diabetes Summit, New Delhi, August 2011

- 56th Annual National Conference of IPHA (Indian Public Health Association), Cochin, February 2012

- PFNDAI seminar on Carbohydrates for a Healthy Future, Mumbai, February 2012

- International Symposium on Access@Base of Pyramid, February 2012

11. PENSION

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

The deeds of variation filed by the Company's Pension Funds with the CIT, Kolkata, pursuant to the orders passed by CBDT in March 2011, are pending as the Hon'ble High Courts of Madras and Calcutta have restrained the CIT from passing any orders till disposal of the petitions filed by some pensioners and the Association.

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

12. 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.

13. 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.

14. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Keki Dadiseth, 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.

15. 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.

16. 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 Share Purchase Scheme) Guidelines 1999 has been provided in Annexure 'B' to this Report.

17. WADIA BRAND EQUITY & BUSINESS PROMOTION AND SHARED SERVICES AGREEMENT

The Wadia Group has several companies in diverse sectors like the airlines, food, textiles, chemicals etc. and employs various subject matter experts in areas such as Legal, Finance, Information Technology, Treasury, Taxation, Human Resources, Procurement, Risk Management etc. With a view to maximizing the efficiency and effectiveness of these specialized resources, a formal structure has been created under Nowrosjee Wadia & Sons Limited (NWS) to serve the common interests of all the Group Companies. The combined skills, knowledge and expertise of this structure will benefit all the Group Companies availing of this arrangement.

In order to formalize this structure of common services and avail of the standing of the Wadia Group Brand, the Board of your Company, during the year, approved an Agreement between NWS and your Company to enter into the 'Wadia Brand Equity & Business Promotion and Shared Services Scheme'.

18. COST AUDIT

The Ministry of Corporate Affairs (MCA) – Cost Audit Branch, Government of India, in terms of its Order Ref: File No. 52/26/CAB-2010 dated January 24, 2012, has directed that a company to which the Companies (Cost Accounting Records) Rules, 2011 apply and which are engaged in the production or manufacture inter alia of packaged food products falling within Chapters 2 to 25 (except Chapters 5, 6, 14, 23 and 24) of Central Excise Tariff Act, 1985 and whose aggregate value of the turnover made from sale or supply of all its products / activities during the immediately preceding financial year exceeds Rs. 100 crores; or whose equity or debt securities are listed on any stock exchange, is required to get its cost accounting records in respect of each of its financial year commencing on or after 1 April 2012, audited by a cost auditor who shall be, either a cost accountant or a firm of cost accountants, holding valid certificate of practice under the provisions of Cost and Works Accountants Act, 1959 (23 of 1959).

This Order 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 in respect of the financial year commencing from 1 April 2012, audited by a cost auditor. The Company has already initiated action for complying with the aforesaid Order.

19. 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.

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 2012 and of the profit of the Company for the year ended 31 March 2012;

(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

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

28 May 2012 Chairman


Mar 31, 2011

The Directors present their Annual Report together with the Statement of Accounts for the year ended 31 March 2011.

1. FINANCIAL RESULTS

Rs. MM

Particulars Year ended 31 March 11 Year ended 31 March 10

Gross sales 42,460 34,266

Other income 588 508

profit from operations 1,794 1,248

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

profit before tax 1,981 1,208

Less: Tax 528 43

Net profit 1,453 1,165

Add: profit brought forward 1,448 1,096

profit available for appropriation 2,901 2,261

Less: Proposed dividend 776 597

Less: Tax on dividend 126 99

Less: Transfer to general 146 117 reserve

Balance carried forward to 1,853 1,448

Balance sheet Net cash flow from operating activities 2,431 2,039

2. OVERVIEW OF COMPANY PERFORMANCE

In an environment that is becoming increasingly competitive and in a business whose profit and profitability are greatly impacted by commodity infation, profit from operations increased from Rs. 1,248 MM to Rs. 1,794 MM. Your Company added Rs. 8,194 MM to the gross sales, which grew 23.9%. Earning per Share was Rs. 12.16. The tables below show trends in performance across key parameters:

In 2010-11 the unprecedented infationary pressures on the consumer food basket continued, as did commodity infation for the food industry.

Against this adverse economic scenario and continued competitiveness that eroded the overall industry profit pool, your Company continued to focus on its growth strategy, led by its Power Brands and at the same time restructured operations to reduce cost. Britannia bakery brands including cake, rusk and bread grew 23.9% with biscuit brands outpacing market growth.

Your Company addressed the cost challenge by signifcantly reducing cost through consolidating operations, re-structuring manufacturing units, reducing complexity and eliminating wastages in the value chain. Your Company will continue and intensify the thrust on cost effectiveness in the coming year as well.

Your Companys focus on building new capabilities and a robust pipeline of innovation resulted in several new launches. Coupled with leading edge go-to-market approaches these innovations tap new sources of growth and profitable revenue, while building brand differentiation and relevance. Launches in the Indulgence portfolio continued with ‘Treat-O and ‘GoodDay Choconut and ‘GoodDay Chocochip cookies. Your Company further strengthened its entry in the mass cookies segment through the launch of ‘Tiger Krunch cookies in Fruit n Nut and Chocochip variants. Your Company also entered the functional health segment with the launch of specially formulated Diabetic-friendly biscuits under the Nutrichoice brand. "On-the- go consumption" at the Rs. 5 price point has been a thrust area.

2010-11 saw your Company entering new consumption segments, with the pilot launch of Breakfast Cereals - ‘Britannia Healthy Start in Mumbai. This is a delicious and healthy ready-to- cook range of breakfast options like porridge, oats, upma and poha mixes.

The Companys Dairy operations represent a big pillar for growth. Despite an unexpected infation in milk prices, growth has been accelerated in the Dairy vertical and synergies are being secured with the Britannia bakery business. Operations have also been streamlined for superior profitability and there have been sustained activities in the highly competitive cheese portfolio. Investment in new innovations - Actimind, Dahi, UHT Milk, Tiger Zor choco-milk was also strengthened.

Growth momentum continued and escalated in the emerging categories – Breads, Cakes and Rusks. Your Company is investing behind these categories and building consumer relevance and brand differentiation through new products, new consumption moments as well as through new communication.

Export out of India continues to grow rapidly at over 30%. Your Company has added dairy products to its exports range. During the current year the Company is expanding the range of products and opening new channels of distribution in key markets.

While the business environment continued to be challenging and competitive, consumers continued to buy and consume more of the Companys brands, more often. Your Company was ranked as the ‘Most Respected FMCG Company by Business World. Consumers once again voted brand "Britannia" as # 1 ‘Most Trusted Food Brand and # 5 ‘Most Trusted Brand across all product categories in an independent survey conducted by A C Nielsen and The Economic Times. Brand "Britannia" also entered the Hall of Fame as it has been voted among the Top 10 Most Trusted Brands for a continuous period of 10 years.

Britannia won the prestigious IMC Ramkrishna Bajaj National Quality performance excellence trophy 2010 for two of its units – the Rudrapur factory and the cake factory in Mangaldoi.

The Britannia Nutrition Foundation (BNF) was founded in this year and on the eve of National Nutrition Week (1 September 2010), BNF organized a symposium "Indias Malnutrition: Combating the Hard Core" in New Delhi. The symposium saw huge participation and engagement with 19 international and national speakers of repute and expertise, and a 200 strong audience comprising the government sector, the development sector, the medical and scientifc fraternity.

3. CONSOLIDATED FINANCIAL RESULTS

Your Company has prepared Consolidated Financial Statements in accordance with Accounting Standard 21(AS21) issued by the Institute of Chartered Accountants of India. The Consolidated Statements refect the results of the Company and those of its Subsidiaries and Associates. As required by Clause 32 of the Listing Agreement with the Stock Exchanges, the Audited Consolidated Financial Statements together with the Auditors Report thereon are annexed and form part of this Annual Report.

The Consolidated turnover of the Company for the year ended 31 March 2011 was Rs. 46,378 MM.

The Consolidated Net profit of the Company for the year ended 31 March 2011 was Rs. 1,343 MM compared with Rs. 1,032 MM in the previous year.

Rs. MM

Particulars Year ended Year ended 31 March 11 31 March 10

Gross sales 46,378 37,963

Other income 649 582

profit from operations 1,700 1,046 (PBT before other income, fnance costs and exceptional items)

profit before tax 1,871 1,087

Net profit 1,343 1,032

Performance of Subsidiaries and Associates is presented below:

SUBSIDIARIES AND ASSOCIATES

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

Britannia Dairy Private Limited (BDPL)

During the current year, the Company operated in a highly infationary environment and faced huge cost pressures owing to the surging price of milk which increased by around 17% compared to the previous year. In spite of this the business grew profitably by focusing on its value added portfolio like cheese and registered a turnover of Rs. 2,185 MM compared to Rs. 1,888 MM in the previous year - a growth of 16%. The business recorded a net profit of Rs. 42 MM (after considering an amortization charge of Rs. 130 MM) compared to a net loss of Rs. 344 MM (including an amortization charge of Rs. 498 MM) in the previous year. Your Company managed this by aggressively controlling costs and improving realization for its products in a very competitive market.

With more value-added products in the pipeline, your Companys dairy vision continues to be anchored in building differentiation by giving delightful consumer experiences. The plan is to accelerate profitable growth by augmenting and leveraging sales and distribution and accessing new geographies.

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

Daily Bread is a manufacturer and retailer of premium, gourmet bakery products, including specialty breads, cakes and cookies which it sells to institutional, modern trade and retail segments. In 2010-11 Daily Bread expanded its retail and franchisee operations in Bangalore and Hyderabad.

Daily Bread has achieved a turnover of Rs. 192 MM during the year as against Rs. 147 MM in the previous

year registering a growth of over 31%. Daily Bread has made signifcant improvement in its operations to achieve cash break-even for the year, compared to cash loss of Rs. 37 MM in previous year.

Strategic Food International Company LLC, Dubai (SFIC)

Despite the challenging global economic scenario and a real population decline in Dubai, UAE where the Company has a sizeable presence, the Company increased sales by 12% to AED 110.8 MM (Rs. 1,343 MM) for the year ended 31 March 2011 as against the previous years levels AED 99.3 MM (Rs. 1,280 MM). For the year ended 31 March 2011, SFIC posted a net loss of AED 10.8 MM (Rs. 131 MM), compared to a net loss of AED 14.4 MM (Rs. 185 MM) for the previous year. A new CEO was recruited in September 2010 to lead the business to the next level.

During the year, the Company increased its market share in the GCC region and made signifcant brand investments. These initiatives have strengthened the Companys competitive position, with share gains in all markets in the GCC where the Company operates. The recent upheaval in North Africa has affected business in markets such as Libya but the Company is confdent that this will be made up in other markets.

Al Sallan Food Industries Company SAOC (ASFI)

Sales for the year ended 31 March 2011 were recorded at Omani Rials (OMR) 7.52 MM (Rs. 869 MM) as against OMR 7.56 MM (Rs. 924 MM) for the year ended 31 March 2010. Unrest in Sohar led to loss of production in February and March 2011. The Company for the frst time since its inception recorded a net profit of OMR 0.15 MM (Rs. 18 MM) for the year ended 31 March 2011 compared to a net loss of OMR 0.68 MM (Rs. 83 MM) in previous year, after considering an interest waiver from the National Bank of Oman of OMR 0.63 MM (Rs. 74 MM) following the early settlement of the outstanding loan. profitability was adversely affected owing to increase in commodity prices and lower sales due to the challenging global economic scenario.

Investment Companies

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

The combined revenue and profit of the investment companies for the year ended 31 March 2011 was Rs. 30.49 MM and Rs. 23.80 MM respectively.

Further, pursuant to Section 4 of the Companies Act 1956, the following companies engaged in manufacture of biscuits at various locations are also deemed to be subsidiaries of your Company. The Gross Income and Net profit of the said subsidiaries during 2010-11 are as under:

Rs. MM

Name of Subsidiary Gross Net income profit /(loss)

International Bakery Products 139 0.7 Limited, TC Balam

J B Mangharam Foods Private 183 7.1 Limited, Gwalior

Manna Foods Private Limited, 2 0.07 Kolkata

Ganges Vally Foods Private 136 (0.98) Limited, Kolkata

Sunrise Biscuit Company 821 (23.0) Private Limited, Guwahati

Britannia and Associates (Mauritius) Private Limited (BAMPL)

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

The combined revenue and loss of holding companies for the period ended 31 March 2011 were USD 0.35 MM (Rs. 16.02 MM) and USD 0.45 MM (Rs. 20.23 MM) respectively.

Welfare Companies

Britannia Employees General Welfare Association Private Limited, Britannia Employees Educational Welfare Association Private Limited and Britannia Employees Medical Welfare Association Private Limited are the three other Associates of your Company. These are companies limited by guarantee, have no share capital and have been set up for general, educational and medical welfare of the employees of your Company. They are not engaged in any commercial activity.

4. DIVIDEND

The Board of Directors is pleased to recommend a dividend of 325% on the paid up equity share capital of the Company, which works out to Rs. 6.50 per share, for consideration and approval by the shareholders at the Annual General Meeting. The total payout amounts to Rs. 902 MM including dividend distribution tax of Rs. 126 MM.

5. BRANDS

Brands provide the momentum for business growth and during the year, investment in Research and Development, Advertisement and Sales Promotion increased by 12.7% and coupled with the renovation and innovation efforts, resulted in 23.9% growth.

Several new and renovated offerings were successfully introduced across the entire portfolio that include Milk Almond Cookies, Fruit Dhamaka Cookies, Tiger Krunch - Fruit n Nut/Chocochips,

Diabetic friendly biscuits under Nutrichoice, Time Pass Toasted snack variants, Maska Chaska variants, Treat-O and GoodDay - Chocochips and Choconut. Signifcant introductions in Bread and Cake include Sweet Bread, Milk Bread, Healthy Slice Bread, Premium Sandwich variants and Fruit chunk cakes, and provided signifcant impetus to the Bread and Cake business.

Your Company continues to invest signifcantly in its capability-building and structured innovation process, which is refected in the launch of varied and differentiated offerings to strengthen the business. Your Company has also initiated the process for breakthrough innovations through interactions with reputed institutions, which is expected to help build a strong platform for sustained and signifcant business leadership and growth.

Signifcant innovation in packaging has led to the introduction of attractive and cost-effective new packs catering to increasing purchase and consumption both in-home and out of home.

6. SUPPLY CHAIN

The singular focus of supply chain has been to improve availability of stocks and reduce overall cost. A continuous focus on availability through specifc projects in the customer service area improved the availability of SKUs at depots and with customers. New tools have been introduced for price discovery and this has brought in vendors with new capability. Further, a focused effort was made to improve volumetric utilization of trucks, which led to good savings. In addition, an IT tool was used to generate the optimum network and this was rigorously followed to deliver the least cost in manufacturing and distribution.

7. QUALITY STANDARDS

Each year your Company re-visits its quality standards and makes them more stringent.

Your Companys Rudrapur Unit (Biscuits) and one of its Contract Packers, Sunandram Foods Private Limited at Guwahati (Cakes) have been awarded the Performance Excellence Trophy in Manufacturing by The Indian Merchant Chambers and Ramkrishna Bajaj National Quality Awards Committee which includes a Crystal Trophy, a certifcate and a Citation. The requirements for this award are based on the Malcolm Baldridge model of the US.

It is your Companys endeavor to deliver excellence in quality and there are specifc programs in place to pervasively drive this quality culture.

To strengthen the Companys capability for exports to EU, its Contract Packer, M/s. Uttam Foods at Khopoli (Maharashtra) has been certifed for BRC (British Retail Consortium) Standards.

8. MANUFACTURING OPERATIONS

Your Company has revised its manufacturing footprint to support profitable growth. In that context, capacities were created at relevant locations to meet demand. Additionally, there was the continual focus on de-bottlenecking existing capacities and improving the productivity levels at current units.

The creation of these capacities and capabilities has helped the Company deliver the volume growth at improved customer service levels and lower costs.

9. INFORMATION TECHNOLOGY

Your Company continues to invest in Information Technology to improve operational effciencies and enhance productivity. During the year a business intelligence system was implemented to enable effective analysis of secondary sales information to drive top line growth by identifying new opportunities. A project has also been initiated to connect the contract manufacturing units and depots to the Companys data centre in Bangalore through a more effcient network to ensure faster response to IT systems.

During the year, your Company also consolidated its core ERP infrastructure using new generation servers leading to signifcant reductions in energy/ power consumption and enhanced effciencies.

10. ENVIRONMENT AND SAFETY

Several initiatives were continued by the Company as part of energy saving measures including a new generation oven piloted in one of its own units. The drive for energy conservation is always a key priority and your Company continually strives to achieve this through process improvements and through enhancing equipment capability. Environment friendly fuels like propane, LPG, PNG and biodiesel were used for baking purposes wherever such fuels were available, to reduce pollution.

As part of its overall safety initiatives, your Company has implemented several safety measures at its Corporate Offce at Bangalore mainly in terms of:

. Implementation of Fire Safety Measures in compliance with National Building Code and Fire Norms

. Creation of Emergency Control Room

. Emergency Preparedness and Evacuation

11. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company continues to pursue its Corporate Responsibility by driving the Health and Nutrition agenda in India. Your Company is moving along the path of "Better for You" products and "Good for You" products. "Better for You" includes initiatives of removal of unhealthy content like transfat which the Company undertook three years ago and continues to be the leading Company doing the same. Your Company now has a portfolio of "Good for You" products which are vitamin and mineral enriched – these products constitute 55% of your Companys product portfolio. In the last year, your Company pioneered energy-snacks specially created for people with diabetes – Nutrichoice Diabetic Friendly Essentials. As you would be well aware, India is the Diabetes capital of the world.

Another well documented statistic is that India suffers from wide spread micronutrient defciency - the most notable being Iron Defciency or Anaemia which affects 70% of the Indian population. Your Company continues to support several NGOs by supplying specially formulated Iron Fortifed Biscuits.

Your Company pursues relevant partnerships with key organizations in Nutrition like GAIN (Global Alliance for Improved Nutrition), UNWFP (United Nations World Food Program), WBI (World Bank Institute), CGI (Clinton Global Initiative), etc. Your Company has been recognized for its CSR efforts in the last year by the eminent Rotary Club of India and the Navjyoti Foundation.

Your Company also set up the Britannia Nutrition Foundation which seeks to "Secure every childs right to growth and development through good food everyday". The objective of the Britannia Nutrition Foundation is to work in three core areas - Scientifc Knowledge Building and Dissemination, Education and Awareness building at grass root levels, Creating a Platform for Action. Your Company organised an international symposium on 1 September 2010 in New Delhi coinciding with the National Nutrition Week. The symposium was titled "Indias Malnutrition - Combating the Hard Core". It had 19 international and national speakers of eminence from the scientifc and medical fraternities, the bureaucracy as well as the development sector. The symposium brought to light the success stories from around the world in combating malnutrition along with the scientifc advancements in the area. The fnal session of the symposium saw a healthy panel discussion on creating a platform for action in India.

Your Company also sponsors and participates in health and nutrition seminars to further the cause of awareness building. Some of them are:

. International Symposium on Transfats, Delhi, April 2010

. Sponsorship of Diabetes Blue Fortnight, World Diabetes Day, 14 November 2010

. 55th Annual National Conference of IPHA (Indian Public Health Association), Belgaum, January 2011

. 1st National Conference on Nutritional Anaemia, LTMG Hospital, Mumbai, January 2011

12. SUB-DIVISION OF EQUITY SHARES

In terms of the approval accorded by the shareholders at the Annual General Meeting held on 9 August 2010, each equity share of the face value of Rs. 10 each fully paid up was sub-divided into 5 equity shares of the face value of Rs. 2 each fully paid up on and from 9 September 2010 (the Record Date fixed by the Board for the purpose).

13. VOLUNTARY DELISTING OF EQUITY SHARES

The Companys equity shares were voluntarily delisted from the Calcutta Stock Exchange Limited (CSE) with effect from 12 January 2011 in terms of the SEBI (Delisting of Equity Shares) Regulations, 2009. However, the Companys equity shares continue to be listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE) having nation wide terminals.

14. PENSION

In respect of the notice received from the Commissioner of Income Tax (CIT), Kolkata in April 2007, to the Companys Covenanted Staff Pension Fund asking it to show cause why recognition granted to the Fund should not be withdrawn for refunding in the year 2004, the excess contribution of Rs. 121.20 MM received by it in earlier years, the Honble Supreme Court of India has directed the Single Judge of the Honble Calcutta High Court to hear the same.

Pursuant to the directions of the Honble Madras High Court, the CIT, Kolkata passed orders rejecting the deeds of variation submitted in May 2005 by the Companys Pension Funds on technical grounds. The Company preferred appeals before the Central Board of Direct Taxes (CBDT), New Delhi challenging the orders of the CIT. CBDT passed orders in the said appeals in March, 2011 directing the Company inter alia to submit deeds of variation incorporating the modifcations in line with the directions made in the orders effective 1 November 2004. The modifed deeds of variation in line with the directions contained in the CBDT orders have already been fled with the CIT, Kolkata, for his approval. In writ petitions fled by some of the pensioners, the Honble Madras High Court has passed an interim order restraining the CIT, Kolkata, from approving the deeds of variation pending disposal of the writ petitions.

A suit was fled by the Britannia Industries Limited Pensioners Welfare Association (‘the Association) in the Honble Court of City Civil and Sessions Judge, Bangalore, where the Honble Court passed interim orders on 1 January 2009 and 10 February 2009 directing the Funds to pay pension to the members in accordance with the computation made and submitted by the Pension Funds to the Court. This computation was on a defned contribution basis, and is consistent with the pension offered by the Pension Funds to eligible employees at the time of their retirement/exit. The Funds have been complying with the said order. In April 2010, the Honble judge passed another interim order requiring the Funds to pay pension as per Rule 11(a) of the Pension Fund Rules, i.e. on "Defned Beneft Basis", and gave the Funds 2 months time for complying with the order.

In an appeal fled against this order in the Honble Karnataka High Court, the Honble High Court in April 2010 modifed the Trial Courts order so as to extend the time limit from 2 months to 3 months and in July 2010, further modifed the Trial Courts order directing inter alia that the pension shall be paid as per Rule 11(a) from the date of fling of the suit by the Association in the Honble Bangalore City Civil Court, i.e. with effect from 17 June 2008.

The Company fled Special Leave Petitions (SLPs) in the Honble Supreme Court against the above order of the Honble Karnataka High Court. The Honble Supreme Court passed an order in January 2011 disposing of the SLPs and directing inter alia that the interim order passed by it in September 2010 directing that the Pension Funds should continue to pay pension as per the interim order passed by the Honble Bangalore City Civil Court on 1 January 2009 would continue till disposal of the suit by the Trial Court.

The proceedings in the main suit are currently in progress in the Honble Bangalore City Civil Court.

The above matters have been dealt with in Note No. 27 of schedule S to the Accounts, which are self- explanatory.

15. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Details of energy conservation, technology absorption, foreign exchange earnings and outgoings in accordance with the provisions of clause (e) of sub-section (1) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of the Particulars in the Report of Board of Directors) Rules, 1988, are given as Annexure ‘A to this Report.

16. CORPORATE GOVERNANCE

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

17. DIRECTORS

Mr. Pratap C. Khanna, Director, passed away on 12 February 2011. He was 85. He had a long association with the Company since 1948 in various capacities including as General Manager of its Delhi Branch and as a Director from 1973 to 1981 and from 1993 till his death in February 2011 and as a Member of the Audit Committee from 2008 to 2011. The Board records its sorrow and deep sense of loss on the passing away of Mr. Khanna.

Your Board had appointed Dr. Ajai Puri as a Director with effect from 30 April 2009 in the casual vacancy caused by the resignation of Mr. Philippe Loic Jacob. He holds offce up to the date of the forthcoming Annual General Meeting under Section 262 of the Companies Act, 1956 read with Article 112 of the Articles of Association of the Company, and is eligible for appointment as a Director of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Nusli N Wadia, Mr. A K Hirjee and Mr. Jeh N Wadia, Directors, retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

18. PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, (‘the Act) read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(1) (b) (iv) of the Act, the report and accounts are being sent, excluding the statement containing the particulars to be provided under Section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Registered Offce of the Company or write to the Company Secretary for a copy thereof.

19. EMPLOYEE STOCK OPTION SCHEME (ESOS)

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

20. AUUITORS

M/s. B S R & Co. retire in accordance with the provisions of the Companies Act, 1956. They have indicated their willingness to continue in offce and are recommended for re-appointment as the Companys Auditors for the ensuing year.

21. DIRECTORS RESPONSIBILITY

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

(a) In the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

(b) They have, in selection of the accounting policies, consulted the statutory auditors and applied these policies consistently, making judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31 March 2011 and of the profit of the Company for the year ended 31 March 2011;

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

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

22. ACKNOWLEDGEMENTS

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

ANNEXURE A To THE DIRECTORS REPORT

Information under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of Directors Report for the year ended 31 March 2011.

A. CONSERVATION OF ENERGY

(a) Following energy conservation measures were undertaken during 2010-11:

(i) Enhancement of cream shell production by 40% at Uttarakhand through optimum extension of baking oven length resulting in better utilisation of line equipments thereby enabling reduction in energy consumption per tonne.

(ii) Energy effcient continuous mixing system installation in Uttarakhand replacing conventional mixing system, which delivered substantial energy conservation.

(iii) Installation of roof top air extractors (operating without electricity) in place of electrical exhaust fans in Uttarakhand factory.

(iv) Installation of waste heat hot water generator at Delhi, enabling reduction of energy consumption and also ensuring reduction on impact on environment. The hot water generated is being used in the pre-mixing section.

(v) Installation of heater in the pre-oven section at Delhi, enabling core heating of the product thereby achieving baking time reduction, productivity enhancement and reduction in energy consumption per tonne.

(vi) Pre-heating of air in the Baking Oven at Kolkata factory has helped in improving combustion effciency, thereby ensuring energy conservation.

(vii) All sodium vapor lamps were replaced with metal halide lamps in Uttarakhand factory.

( v i i i ) Installation of CFL lights replacing conventional tube lights at possible locations.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

Investment of Rs. 40 MM planned in 2011-12 for investing in various projects relating to reduction in energy consumption

(c) Impact of measures at (a) and (b) above: Electricity consumption reduced to 116.71 units/mt of Biscuit production from 123.71 units/mt, resulting in reduction of almost 6% over the previous year.

The rate per unit of electricity purchased was higher at Rs. 4.95 per kwh, compared with Rs. 4.59 per kwh in the pervious year, due to increase in rate per unit of Electricity in Kolkata.

Own generation of electricity was higher by 100% since Uttarakhand had to rely more on own generation.

The increase in cost per unit of own generation as well as the rate per unit of baking fuel is due to the increase in cost of HSD and other fuels used in baking.

Due to increase in cost of Propane, usage of this fuel for baking was only for 6 months at Uttarakhand. This had also contributed to higher rate per unit of baking fuel.

Consequent upon the energy saving measures initiated, the electricity consumption for biscuits per tonne has reduced by 6% as compared to previous year.

Owing to change in product and SKU mix, as a few products like Jim Jam consume higher energy due to process complexity, there was marginal increase in baking fuel consumption per unit of biscuit production.

Technology absorption, adaptation and innovation

(a) Efforts in brief made towards absorption, adaptation and innovation:

Various actions were initiated for upgradation of technology and automation in specifc areas.

. New pre-heating technology in the baking process is being tested. This has a potential to increase the plant output by around 10%, depending on variety and SKU.

. Continuous mixing of ingredients has been implemented at Uttarakhand.

. Packing machine speed enhancement has been effected through Automation and Servo controlled motion.

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

The above initiatives resulted in improved productivity, reduction of wastages, better energy utilization, process improvements and enhanced product quality.

(c) Details of imported technology:

(i) Technology imported: Nil

(ii) Year of import: Not applicable

(iii) Has the technology been fully absorbed?: Not applicable

(iv) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action: Not applicable.

B. TECHNOLOGY ABSORPTION

Research and development (R & d)

Details of efforts made in technology absorption are

1. Core areas of research by the Company:

(i) Introduction of ‘Ready to Cook range of products.

(ii) The investment behind upgradation of basic research led to the successful launch of ‘Diabetic friendly cookies with validated claims.

(iii) Continuous research in the area of nutrition, analytical techniques, ingredients, packaging materials, process technology and food safety.

(iv) Partnership with leading NGOs / Institutes initiated for delivering specially formulated and fortifed products.

2. Benefts delivered as a result of above R&d initiatives:

(i) New products launched:

. Fruit Dhamaka Cookies

. Diabetic-friendly Cookies

. Healthy Start Range

. Almond Cookies

. Chocolate Biscuits

(ii) Manufacturing and exporting range of products:

. Digestive for SFIC

. Nutro cream renovation

(iii) Improved products with technology upgradation and cost effciencies:

. Mariegold, Vitamariegold

. Thin Arrowroot

. Nicetime

. Treat-O

(iv) Packaging upgradation for differentiation and serving different consumption occasions and target groups:

. Chocochip & Choconut re-launch with differentiated packaging formats.

. Britannia "Shubh Kamnayaen" offerings.

. Promotional offerings.

. New launches with differentiated packaging materials in Diabetic-friendly Cookies and Time pass variants.

(v) Rewards and recognition:

. INDIASTAR Award for Cuptainer and BSK Packaging.

3. Future plan of action:

Your Company will continue to focus on technology led innovations and effectively apply the same in cost-effcient initiatives across portfolio:

(i) New areas of research to facilitate product introduction in new beneft categories and upgrading the existing offerings to provide value for spend.

(ii) Differentiated and consumer-appealing product/ pack propositions catering to cross-sections of consumers.

(iii) Continuous improvement and strengthening of the process of ‘Concept to Commercialisation to ensure ‘FIRST-TIME RIGHT delivery.

(iv) Research in wheat characteristics, baking technology, sensory sciences, functional foods, specifc nutrition needs and food safety.

(v) New partnerships to explore alternative cereals/ fours and fat reduction/replacements to drive the health and nutrition agenda further.

4. expenditure on R&d Rs. MM

31 March 11

Capital 47.48

Recurring 45.34

Total 92.82

Total R & D expenditure as a % of 0.219% gross turnover

On behalf of the Board

Mumbai Nusli N Wadia

27 May 2011 Chairman


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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