Britannia Industries Ltd
Directors Reports
Your Directors present their Report together with the Audited Financial Statements for
the year ended 31 March, 2020.
I. FINANCIAL PERFORMANCE
a. Standalone Financial Results
|
|
Rs. in Crores |
| Particulars |
Year ended 31 March 2020 |
Year ended 31 March 2019 |
| Revenue from Operations |
10,986.68 |
10,482.45 |
| Profit before tax |
1,908.26 |
1,716.11 |
| Profit after tax Dividend: |
1,484.30 |
1,122.20 |
| Final Dividend (including tax thereon) |
- |
422.27A |
| Interim Dividend* |
841.64 |
- |
*Dividend Distribution Tax is not applicable with effect from 1 April 2020
A Net of dividend distribution tax on dividend received from one of the subsidiaries
b. Consolidated Financial Performance
Consolidated Financial Statements prepared in accordance with Section 133 of the
Companies Act, 2013 read with the rules made thereunder and Indian Accounting Standards
(Ind AS) along with the Auditor's Report form part of the Annual Report.
Consolidated Sales of your Company for the financial year ended 31 March 2020 is
Rs.11,443.99 Crores vis-a-vis Rs.10,973.46 Crores in the previous year, registering a
growth of 4.3%. Consolidated Net Profit attributable to the owners of the Company for the
financial year ended 31 March 2020 is Rs.1,402.63 Crores vis-a-vis Rs.1,159.12 Crores in
the previous year, registering a growth of 21%.
c. Overview of Company Performance
Your Company witnessed moderate growth in the first half of the year. The last part of
4th quarter was impacted by the unforeseen development of the COVID-19 pandemic. Despite
the challenging business environment during the year 2019-20, your Company was able to
increase its market share and improve profitability through innovations, cost efficiency
programs and expansion in distribution.
COVID-19 has had a catastrophic impact on people and economy globally. We, in Britannia
focussed on the following during this crisis:
(a) Safety of employees and other stakeholders
(b) Ensuring availability of our products, which are daily essentials, across the
country.
During this crisis, the Wadia Group of Companies contributed to the nation's cause by
providing 1.35 crore meal & meal equivalents and 90 lacs of bakery packs to the less
fortunate, especially migrants, across 19 states and 110 cities.
Your Directors wish to place on record their appreciation to the Company's employees,
suppliers, customers & Government authorities for their selfless efforts which helped
your Company reach normalcy in operations within few weeks of lock-down. The ownership and
responsiveness shown by all the stakeholders is unparalleled and is a testimony of the
spirit of this great organisation.
Your Company shall review the long term impact of the pandemic and take all steps
necessary to adapt itself to emerging changes and the new normal.
d. Subsidiaries, Associates and Joint Ventures
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.
During the year under review, your Company incorporated a wholly owned subsidiary in
Dhaka, Bangladesh under the name of Britannia Bangladesh Private Limited. Your Company
sold its equity stake in Klassik Foods Private Limited, an Associate Company, during the
year.
e. Dividend
The Board of Directors at their Meeting held on 23 April 2020 declared Interim Dividend
@ 3500% i.e., Rs.35 per Equity Share of Rs.1/- each for FY 2019-20. The Interim Dividend
was paid to the shareholders holding shares as on Record Date i.e., Saturday, 2 May 2020.
The total dividend payout for FY 2019-20 stands at Rs.841.64 Crores.
f. Bonus Debentures
Your Company, on completion of 100 years, rewarded its shareholders with allotment of
24,03,18,294 3-year secured, non-convertible, redeemable, fully paid-up Bonus Debentures
of face value of Rs.30/- each, bearing interest at 8% p.a., to the Members of the Company,
as on the Record Date, 23 August 2019, as per the ratio stipulated in the Scheme of
Arrangement i.e., 1 fully paid-up Debenture of face value of Rs.30/- each for every 1
fully paid-up equity share of face value of Re 1/- each.
g. Reserves
Your Company transferred an amount of Rs.148.43 Crores to the General Reserve and
Rs.180.24 Crores to the Debenture Redemption Reserve during the financial year ended 31
March 2020.
h. Share Capital
During the year under review, your Company allotted 1,50,002 equity shares of Rs.1/-
each upon exercise of options under Britannia Industries Limited Employee Stock Option
Scheme. Consequently, the paid up equity share capital of your Company increased by
Rs.1,50,002 during the year.
II. OPERATIONAL PERFORMANCE
a. The Britannia Promise to Spread Delight
The desire to delight consumers with products that deliver excitement and goodness in
every bite is at the heart of Britannia's promise. Your Company's commitment to deliver
unique and ecstatic experiences to consumers continued to be the guiding principle of
operations.
b. Supply Chain & Operations
Your Company, in the quest of improving competitiveness in its operations, has been
carrying out various Cost Efficiency and Operational Excellence Programs across the value
chain. During the year, your Company implemented Small Group Activity Programs across all
its factories to strengthen the culture of safety of workers in such programs. Further,
your Company successfully commissioned 3 Biscuit Lines and 1 Snack line at the Integrated
Food Park, Ranjangaon, Maharashtra and operationalized its greenfield unit in Nepal.
c. Environment, Health and Safety
EHS policy of your Company drives Zero Accident Culture and that stands out as a Key
differentiator to drive workplace safety initiatives. Your Company, during the year,
reduced recordable injuries by 27% over the previous year.
All our manufacturing units are certified for conformance to OHSAS 18001 standards,
other than a few recently commercialized units. Your Company manages occupational health
and safety by systematically assessing the hazards and mitigating risks through awareness
programs and safety training for employees.
Your Company has constituted a Central Medical Council that addresses health and
hygiene needs at workplace by engaging with occupational health experts and providing
advice to site based medical and paramedical staff to proactively manage health and
wellness of employees.
A process was put in place to manage risks related to COVID-19 by day-to-day health
monitoring of all employees and sanitising the workplace with the highest standard. Social
distancing measures go beyond plant boundaries and all transport vehicles adhere to
stipulated needs outlined by the government.
Your Company has also constituted a Central Environment Council led by subject matter
experts to enable compliance to air, water and solid waste management. Water stewardship
plan is in place to move towards water conservation and recharge.
d. Quality Programs
Quality and Food Safety continue to be key priorities for your Company. Your Company's
efforts to ensure delivery of superior, safe and compliant products to its consumers were
further strengthened during the year.
You would be happy to know that all the existing manufacturing units of your Company
including contract manufacturing units are certified by an accredited third party in
accordance with ‘Hazard Analysis Critical Control Points' (HACCP)/ISO 22000 standards
and operate in compliance with stringent food safety and quality standards.
Your Company has received American Institute of Baking (AIB) Certification for 13 of
its manufacturing units through compliance to Global Food Safety Standards.
Your Company's "Consumer Care Cell" continues to be compliant to the
‘Global standards on customer satisfaction & Guidelines on complaint handling'
and sustained the revised requirements and certification ISO 10002:2018 during the year.
You will be delighted to know that your Company was recognized as "Food Company of
the Year 2019" for the second time in succession at the India Food Safety Excellence
Awards 2019 organized by SYNNEX.
e. Research and Development (R&D)
In its quest to be a ‘Global Total Foods Company', your Company is leveraging its
R&D capabilities and expertise to innovate & renovate, provide world class
products, improve packaging and reduce wastages.
Your R&D team has been working relentlessly towards building technology
capabilities to provide more nutrients in Company's product portfolio. It has successfully
built capability to use alternate cereals, whole grains, super seeds and protein isolates
in the product portfolio.
During the year, "Britannia Nutrition Policy" was also adopted with the
objective to provide consumers with convenient, delightful food choices to meet their
daily nutritional needs and thereby contribute to a better quality of life and address
major country specific nutrition related public health concerns like undernutrition and
iron deficiency anaemia.
As part of its continuing efforts to ‘Make a Difference' to the community, your
Company continues to invest in research and development to address key nutritional
deficiencies. According to National Family Health Survey 4 (2015-16), anaemia continues to
be a prime health concern across India with ~53% of the women being anaemic. In order to
address Iron Deficiency Anaemia (IDA), your Company has developed a tasty and affordable
Iron & Folic Acid fortified biscuit delivering 50-75% RDA of these nutrients to the
women.
You will be happy to know that the ‘Suphoshan' Nutrition Intervention Program
undertaken by the Britannia Nutrition Foundation (BNF), Narayana Health Charitable Trust
and National Health Mission, Government of Rajasthan in adolescent school going children
with iron and folic acid fortified biscuits developed by your Company's R&D team has
led to significant increase in the haemoglobin levels in adolescents.
You will be delighted to know that your Company is the highest scoring among Indian
headquartered companies in meeting the nutrition needs of consumers declared by
"Access to Nutritional Index" (ATNI) in the 2nd iteration of the India spotlight
2020. Your Company was acknowledged for significant improvement since the last index in
2016.
Your Company aims to recycle, reduce and recover used plastic for sustainability.
R&D team has been continuously working to reduce usage of plastic by removing plastic
trays from the portfolio and is in the process of developing 100% reusable packaging. Your
Company has successfully scaled up Extended Producers' Responsibility (EPR) initiatives
PAN India for multilayer and plastic packaging waste collection and energy recovery in
association with IPCA (Indian Pollution Control Association).
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
2019-20 was a challenging year due to economic slowdown in the country impacting
consumer spending. However, your Company's focus on brand building, delivering superior
products and creating point of view based communication ensured growth and market
leadership.
This was made possible by a host of marketing strategies and interventions.
Experiential activation of Brand Britannia - Britannia Khao World Cup Jao
Your Company brought back one of its most memorable campaigns - Britannia Khao World
Cup Jao in April 2019. The nostalgic campaign, which debuted in 1999, brought together
your Company and ICC Men's Cricket World Cup, with the mega prize of trip to watch live
match in England and Wales.
The promotion also offered a bouquet of experiences and rewards to millions of
consumers. The share of voice that the campaign garnered across media was unparalleled by
any other brand which was active around the sporting event.
Strengthening core brands with activation and advertising
Your Company's leading biscuit brand, Good Day strengthened its presence in the market
with new campaign in November 2019 which starred Deepika Padukone, leading Bollywood
Actor. The campaign "Khushiyon Ki Zidd Karo" was to encourage people to
reprioritize their goals and chase happiness instead.
Britannia Marie Gold launched the 2nd season of ‘Britannia Marie Gold My Startup'
initiative which provides financial assistance to homemakers with entrepreneurial ideas.
This year, the brand partnered with National Skill Development Corporation (NSDC) to
launch India's first-ever skill development program customized for women with
entrepreneurial aspirations. 10,000 women homemakers from across the country will undergo
this online certification from the comfort of their homes. The Britannia Marie Gold My
Start Up initiative is designed to help India's homemakers become financially independent
and transform them into job creators.
Your Company also expanded its brand Milk Bikis to North & West India with new
campaigns, market visibility and intensive sales efforts.
Powerful Relaunches
Your Company has re-launched NutriChoice Cream Crackers and NutriChoice Thin Arrowroot
with improved product mix, visual product differentiation and differentiated packaging
which have helped these brands to grow much faster than the industry.
Innovation Leadership-Britannia has re-enforced its thought & market leadership
through multiple pioneering innovations Britannia nurtured innovations that were launched
at the end of FY 2018-19 - Britannia Treat Burst, Britannia Treat Stars and Britannia
50-50 Jeera during FY 2019-20. In addition, two variants were launched under
Treat-Tiramisu and Red Velvet as an "in and out" during the year and these were
received very well by the consumers. Little Hearts Strawberry was also launched which is
under test marketing in Maharashtra.
Wooing the millennial, digital consumers through disruptive digital content Little
Hearts, a digital only brand, had launched a differentiated campaign for Valentine's Day,
with a first-of-its-kind Qawwali- Rap battle, featuring Kaam Bhari and Ahsaas Channa. The
brand-new song released on the eve of Valentine's Day is set in a rap-meets qawwali genre
and is a fresh, fun and edgy take on heartbreaks and received more than 10 million views.
Britannia Good Day, India's Most Trusted Food Brand in reputed nation-wide consumer
survey
In the reputed ‘Most Trusted Brands' survey conducted every year by The Economic
Times Brand Equity publication, Britannia Good Day won the coveted position of Most
Trusted Food brand in the country. The brand also secured the position of the 3rd most
trusted brand in the country, a testimony to the immense love and trust our consumers
across diverse age groups and demographics bestow on us.
Marie Gold and Bourbon also featured in the most trusted food brands in the same
survey, in 6th position and 11th position respectively.
Awards & Recognition received in FY 2019-20
Your Company was honoured with the following:
• Goodday was rated the Most Trusted Brand in the Food Category & 3rd Most
Trusted Brand across categories by Brand Equity.
• Pitch Best CMO Award for Consumer Connect.
• ATNI (Access to Nutrition Index) - Britannia ranked No.1 amongst Indian
headquartered companies in ATNI 2020, underlining Britannia's efforts and commitments
towards making nutrition accessible to billions in the country.
• CMO Global- Star of The Industry Awards For Excellence in Branding &
Marketing- Best Brand Re-vitalization Award- Britannia 50-50.
- Best Use of Social Media in Marketing- Britannia Little Heart.
- Best Marketing Campaign- Britannia 100 years campaign.
• Campaign awards for Britannia Marie Gold My Start Up campaign 2019- Sabre Awards
South Asia- Diamond Sabre Award for Superior Achievement in Research & Planning
category.
- Fulcrum Awards- Best use of Integrated Communication.
- PR Asia Awards 2019- Cause related- Diversity & Inclusion.
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. Nusli N Wadia (DIN:00015731), Chairman and
Non-Executive Director is retiring by rotation at the ensuing Annual General Meeting (AGM)
and is eligible for re-appointment.
The Board of Directors at their Meeting held on 2 June 2020, on the basis of the
recommendation of the Nomination and Remuneration Committee, has proposed the
re-appointment of Mr. Nusli N Wadia for approval of the shareholders at the ensuing AGM of
the Company.
During the year under review, Mr. Nimesh N Kampani and Mrs. Ranjana Kumar retired from
the Board of Directors of the Company w.e.f. 12 August 2019.
Further, the shareholders at the 100th Annual General Meeting held on 9 August 2019
appointed Mrs. Tanya Dubash as an Independent Director for a term of 5 years w.e.f. 7
February 2019 and re-appointed Mr. Avijit Deb, Mr. Keki Dadiseth and Dr. Ajai Puri as
Independent Directors for another term of 5 years w.e.f. 12 August 2019.
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 2020 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, the Board is of the opinion
that the Company's internal financial controls were adequate and operationally effective
during FY 2019-20.
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. 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.
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 after
excluding the disclosure on particulars of employees. The disclosure is available for
inspection by the Members at the Registered Office of your Company during business hours
on all 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 e-mail
to investorrelations@britindia.com.
b. Employee Stock Option Scheme (ESOS)
The disclosure pursuant to the provisions of Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations, 2014 read with SEBI Circular No.
CIR/CFD/POLICY CELL/2/2015 dated 16 June 2015 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.
c. 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. During the year, two
complaints were received by the Company under Anti-Sexual Harassment Policy and the same
were resolved.
VI. GOVERNANCE/SECRETARIAL
a. Corporate Governance
A Report on Corporate Governance for the financial year ended 31 March 2020 along with
the Statutory Auditor's Certificate on compliance with the provisions of corporate
governance under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(hereinafter referred to as ‘SEBI Listing Regulations, 2015') is forming part of the
Annual Report.
b. Business Responsibility Report
Pursuant to Regulation 34(2) (f) of SEBI Listing 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 2019-20 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, the Extract of Annual Return of the Company has been placed on
the website of the Company.
Weblink: http://britannia.co.in/investors/annual-report.
d. Whistle Blower Policy
The details of Whistle Blower Policy are given in Clause No. 8 (c) of the Corporate
Governance Report.
e. Board Evaluation
The details of evaluation of Directors, Committees and Board as a whole are given in
Clause No. 3 (b) of the Corporate Governance Report.
f. Remuneration Policy
The details of the Remuneration Policy are given in Clause No. 3(b) of the Corporate
Governance Report. Britannia Industries Limited Remuneration Policy for Directors, Key
Managerial Personnel and other Employees is disclosed on the website of the Company.
Web Link: http://britannia.co.in/pdfs/Code of
conduct/policies/Remuneration-Policy-for-Directors- KMPs.pdf
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 Listing 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 did not enter 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. 45 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. 38, 39 and 40 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.
n. Compliance with Secretarial Standards
During the year under review, the Company has complied with all the applicable
Secretarial Standards.
VII. AUDITORS
a. Statutory Auditors
M/s B S R & Co. LLP, Chartered Accountants, (‘BSR') (ICAI Firm Registration
Number 101248W/W- 100022) were appointed as Statutory Auditors at the 91st Annual General
Meeting (AGM) held on 9 August 2010 and thereafter at every AGM till 12 August 2014 in
accordance with Section 224 of the erstwhile Companies Act, 1956.
Consequent to enactment of Companies Act, 2013, M/s B S R & Co. LLP, were appointed
as the Statutory Auditors of the Company at the 95th AGM held on 12 August 2014 for a
period of 5 consecutive years, subject to ratification by Members at every AGM in
accordance with Section 139 of the Companies Act, 2013 read with the rules made
thereunder.
Further, M/s B S R & Co. LLP were re-appointed as Statutory Auditors at the 100th
AGM held on 9 August 2019, to hold office upto the ensuing AGM.
Since M/s B S R & Co. LLP, would be completing their term of 10 years as the
Statutory Auditors of the Company, they are required to mandatorily retire at the ensuing
AGM as per Section 139 of the Companies Act, 2013.
Pursuant to the recommendation of the Audit Committee, the Board of Directors of the
Company at its meeting held on 7 February 2020 recommended the appointment of M/s Walker
Chandiok & Co, Chartered Accountants (Firm Registration No. 001076N/N500013) as
Statutory Auditors of the Company, for a period of five (5) consecutive years from the
conclusion of the 101st AGM till the conclusion of 106th AGM of the Company to be held in
the year 2025 subject to the approval of shareholders of the Company at the ensuing AGM.
In this regard, M/s Walker Chandiok & Co, Chartered Accountants have submitted
their written consent that they are eligible and qualified to be 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.
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 2019-20. The Secretarial Audit
Report submitted by them is given as Annexure-‘E' to this Report.
c. Reporting of Frauds by Auditors
During the year under review, the Auditors have not reported any instances of frauds
committed in the Company by its Officers or Employees to the Audit Committee under Section
143(12) of the Companies Act, 2013.
VIII. INTERNAL FINANCIAL CONTROLS
The details of adequacy of Internal Financial Controls are given in Clause (I) of the
Management Discussion and Analysis Report.
IX. ACKNOWLEDGEMENTS
Your Directors would like to thank all stakeholders viz., 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 |
|
Nusli N Wadia |
| Place : Bengaluru |
Chairman |
| Date : 2 June 2020 |
(DIN:00015731) |
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