Britannia Industries Limited is an Indian company based in Kolkata that is famous for its Britannia and Tiger brands

of biscuit, which are highly recognised throughout the country. Britannia is one of Indias leading biscuit firms, with an estimated 38% market share.[1] The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products.
Contents
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1 History 2 Growth and profitability 3 Business 3.1 Dairy products

3.1.1 Joint venture with New Zealand Dairy 3.2 Biscuits

4 Ownership and relationship between major shareholders 5 See also 6 References 7 External links

[edit]History It was started way back in 1892 with an investment of Rs. 295.[2] Initially, biscuits were manufactured in a small house in central Kolkata. Later, the business was acquired by the Gupta brothers and operated under the name of V.S. Brothers. In 1918, C H Holmes, an English businessman in Kolkata was taken as a partner and The Britannia Biscuit Company Limited (BBCo) was launched. The Mumbai factory was setup in 1924 and Peek Freans, UK acquired a controlling interest in BBCo. Biscuits were in big demand during World War II, which gave a fillip to the companys sales. The company name was changed to the current Britannia Industries Limited in 1979. In 1982 Nabisco Brands Inc., USA became a major foreign shareholder Kerala businessman K. Rajan Pillai secured control of the group in the late 1980s, becoming known in India as the 'Biscuit King'. In 1993, the Wadia Group acquired a stake in ABIL, UK and became an equal partner with Groupe Danone in Britannia Industries Limited. In what The Economic Times referred to as one of [India's] most dramatic corporate sagas,
[3]

Pillai ceded control to Wadia and Danone after a bitter boardroom struggle,[4] then fled his

Singapore base to India in 1995 after accusations of defrauding Britannia, and died the same year in Tihar Jail.[5] With all these inspiring history, Britannia has reached every households of

India reaching the top 100 Most Trusted brands listed in The Brand Trust Report by Trust Research Advisory. [edit]Growth

and profitability

The company is a growing and profitable one. Between 1998 and 2001, the company's sales grew at a compound annual rate of 16 per cent against the market, and operating profits reached 18 per cent. More recently, the company has been growing at 27 per cent a year, compared to the industry's growth rate of 20 per cent. At present, 90 per cent of Britannias annual revenue of Rs2,200 crore comes from biscuits. [edit]Business [edit]Dairy

products

Dairy products contribute close to 10 per cent to Britannia's revenue.[6] Britannia trades and markets dairy products, and its dairy portfolio grew at 47% in 2000-01 and by 30% in 200102. Britannia holds an equity stake in Dynamix Dairy and had outsourced the bulk of its dairy products from its associate. Its main competitors are Nestle India, and the National Dairy Development Board (NDDB),and amul(GCMMF)[7] [edit]Joint venture with New Zealand Dairy On 27 October 2001, Britannia announced a joint venture with Fonterra Co-operative Group of New Zealand, an integrated dairy company from procurement of milk to making value-added products such as cheese and buttermilk.[7] Britannia planned to source most of the products from New Zealand, which they would market in India.[6] The joint venture will allow technology transfer to Britannia.[7] Britannia and New Zealand Dairy each holding 49% of the JV, and the remaining 2 per cent held by a strategic investor. Britannia has also tentatively announced that its dairy business would be transferred and run by the joint venture.[7] The authorities' approval to the joint venture obliged the company to start manufacturing facilities of its own. It would not be allowed to trade, except at the wholesale level, thus pitching it in competition with Danone, which had recently established its own dairy business.
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[edit]Biscuits The company's factories have an annual capacity of 433,000 tonnes.[1] The brand names of biscuits include VitaMarieGold, Tiger, Nutrichoice Junior,Good day, 50 50, Treat, Pure Magic, Milk Bikis, Good Morning,Bourbon, Thin Arrowroot, Nice, Little Hearts and many more. Tiger, the mass market brand, realised $150.75 million in sales including exports to countries including the U.S. and Australia, or 20% of Britannia revenues in 2006.

The company alleged that Danone has violated its intellectual property rights in the Tiger brand by registering and using Tiger in several countries in 2006 without the consent of the Britannia Board. Managing Director Vinita Bali claims the company found out in 2004 Danone launched the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore, Pakistan and Egypt when it attempted to register the Tiger trademark in some of these countries.[8] Whilst it was initially reported in December 2006 that agreement had been reached,[9] it was reported in September 2007 that a solution remained elusive.[8] In the meantime since Danone's biscuit business has been taken over by Kraft, the Tiger brand of biscuits in Malaysia has been renamed Kraft TiGER Biscuits beginning September 2008. Britannia initiated legal action against Danone in Singapore in September 2007.[10] The dispute was resolved with Danone paying Rs 220 million to utilise the brand, and Britannia securing legitimate right to use the Tiger brand worldwide.[11] [edit]Ownership

and relationship between major shareholders

The Wadias' Kalabakan Investments and Groupe Danone have two equal joint venture companies, Wadia BSN and UK registered Associated Biscuits International Holdings Ltd., which together hold 51 per cent stake in Britannia.[12] The ABIH tranche was acquired in 1992, while the controlling stake held by Wadia BSN was acquired in 1995. It was agreed that, in case of a deadlock between the partners, Danone is obliged to buy the Wadia BSN stake at a "fair market value". ABIH which has a separate agreement signed in 1992 and is subject to the British law.[12] [13] Wadia was to be Danone's partner in the food and dairy business, and product launches from Groupe Danones were expected but never materialised despite the JV being in existence for over 11 years in India.[12]Under the 1995 joint venture agreement, Danone is prohibited from launching food brands within India without the consent of the Wadias.[14] In addition, the partners agreed there would be the right of first refusal to buy out the remaining partner in the event of the other wishing to sell its holding.[15] In May 2007, Nusli Wadia told the Ministry of Commerce and Industry that Danone invested in a Bangalore-based bio nutrition company, Avesthagen, in October 2006 in violation of the government's Press Note 1, 2005, which requires a foreign company to obtain the consent of its Indian joint venture partner before pursuing an independent business in a similar area, including joint ventures based purely on technical collaboration. Danone argued that Press Note 1 did not apply to it as it did not have a formal technology transfer or trademark agreement with Avesthagen, and that its 25 pct holding in Britannia was indirect.[16]Wadia also filed a case in the Bombay High Court for a breach of a non-compete clause in that connection. The court ordered Danone not to alienate, encumber or sell shares of Avestagen.
[17]

In September 2007, the Foreign Investment Promotion Board of India rejected Danone's claims that it does not need a non-compete waiver from the Wadias to enter into business in India alone.[18] In June 2006, Wadia claimed Danone had used the Tiger brand to launch biscuits in Bangalore.[15] After a prolonged legal battle, Danone agreed to sell its stake in Britannia and get out of this line of business. Danone will sell its 25.48% stake to Leila Lands, which is a Wadia group entity based in Mauritius. The deal is valued to be at $175200 m. With this buy-out, Wadia's will hold a majority stake of 50.96%.[19]

BRITANIA The story of one of India's favourite brands reads almost like a fairy tale. Once upon a time, in 1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today. The beginnings might have been humble-the dreams were anything but. By 1910, with the advent of electricity, Britannia mechanised its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. Britannia's business was flourishing. But, more importantly, Britannia was acquiring a reputation for quality and value. As a result, during the tragic World War II, the Government reposed its trust in Britannia by contracting it to supply large quantities of "service biscuits" to the armed forces. As time moved on, the biscuit market continued to grow and Britannia grew along with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till now distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indianness of the firm. The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). Four years later in 1983, it crossed the Rs. 100 crores revenue mark. On the operations front, the company was making equally dynamic strides. In 1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market. In 1999, the "Britannia Khao, World Cup Jao" promotion further fortified the affinity consumers had with 'Brand Britannia'. Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. It was equally recognised for its innovative approach to products and

marketing: the Lagaan Match was voted India's most successful promotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaska became India's most successful product launch. In 2002, Britannia's New Business Division formed a joint venture with Fonterra, the world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World', and The Economic Times pegged Britannia India's 2nd Most Trusted Brand. Today, more than a century after those tentative first steps, Britannia's fairy tale is not only going strong but blazing new standards, and that miniscule initial investment has grown by leaps and bounds to crores of rupees in wealth for Britannia's shareholders. The company's offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust of almost one-third of India's one billion population and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. And millions of consumers will savour the results, happily ever after.

BRITANIA
Annual Reports | Performance Annual 2009-10 | History of Growth rates | Quarterly Results | Annual Accounts-Subsidiaries

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 2817 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 2353 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. Earnings Per Share was Rs 48.77. The tables below show trends in performance across key parameters:

SIGNIFICANT RATIOS 2009-10 Measures of Investment Return on equity Profit after tax Shareholders funds % 29.40 22.6 2008-09

Book value per share

Shareholders' funds Number of equity shares

Rs.

165.9

334.0

Dividend cover

Earnings per share Dividend (plus tax) per share

times

1.7

1.6

Measures of Performance

Profit margin

Profit before tax & exceptional item Net Sales + Other Income

5.0

8.0

Debtors turnover

Gross Sales Debtors + Bills receivable

times

86.7

63.3

Stock turnover

Gross Sales Stock

times

12.8

12.4

Measures of Financial Status

Debt ratio

Borrowed capital Shareholders funds

108.4

3.2

Current ratio

Current assets Current liabilities

times

1.1

1.3

Tax ratio

Tax provision Profit before tax

3.5

22.4

Britannia has an excellent track record of rewarding its shareholders. The company has an uninterrupted record of distributing dividends for several decades. The dividends declared over the last 10 years are as under: Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Dividend Percentage 40.00 40.00 50.00 55.00 45.00 55.00 75.00 100.00 110.00 140.00 150.00 150.00 180.00

Bonus History

Bonus Particulars 1 equity share for every 2 shares held 4 equity shares for every 10 shares held 2 equity shares for every 3 shares held 2 equity shares for every 3 shares held 7 equity shares for every 10 shares held 2 equity shares for every 5 shares held 2 equity shares for every 5 shares held 1 equity share for every 2 shares held 1 equity share for every 2 shares held

Key Highlights Britannia Industries Limited (Britannia) is one of the leading bakery products manufacturers in India. The company, along with its subsidiaries, is engaged in the production and marketing of biscuits, breads, cakes, as well as dairy products such as cheese, butters and milk. These products are sold under the brand names of Good Day, Treat, 50-50, Pure Magic, Tiger, Milk Bikis, MarieGold, NutriChoice, Tiger Creams, and Berry Cherry among others. The company operates manufacturing plants in Mumbai, Kolkata, Delhi and Uttarakhand. Britannia has operations in India, Mauritius, United Arab Emirates and Sri Lanka. Britannia is headquartered in Kolkata, West Bengal, India.