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Britannia Industries Ltd.

BSE: 500825 Sector: Agri and agri inputs
NSE: BRITANNIA ISIN Code: INE216A01022
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OPEN 4770.00
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VOLUME 4367
52-Week high 4926.00
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P/E 67.12
Mkt Cap.(Rs cr) 57,873
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OPEN 4770.00
CLOSE 4757.90
VOLUME 4367
52-Week high 4926.00
52-Week low 2776.00
P/E 67.12
Mkt Cap.(Rs cr) 57,873
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Britannia Industries Ltd. (BRITANNIA) - Director Report

Company director report

Your Directors present their Report together with the audited financial statements forthe 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 8581.55 7880.56
Profit before tax 1251.16 1149.13
Profit after tax 843.69 763.31
Profit available for appropriation 1979.86 1509.34
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 leadershipin an environment which was impacted by sluggish category growths. While we witnessedrobust topline growth in the first half of the year there was significant slowdown in thesecond half of the year post demonetization. Besides growth in International Businessalso continued to be under pressure due to deteriorating geopolitical situation andcurrency fluctuations in geographies like Middle East Africa and a general economicslowdown in certain key export markets. To minimize effects of this trend your Companyfocused on:

(i) Strengthening distribution by enhancing direct reach which now stands in excess of1.5 million outlets;

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

(iii) Building new capabilities and driving innovation which resulted in many newlaunches and re-launches in the form of Good Day Nuts Cookies NutriChoice Oat Cookies50-50 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 andwitnessed significant price rise in key commodities. While your Company actionedrequisite price increases the primary focus was on accelerating its Cost EfficiencyProgram through scale in operations technology interventions wastage reduction in thevalue chain optimized advertising spends and fixed costs leverage. This helped yourCompany achieve a profit growth of 10.5% and sustain its profitability while ensuringcompetitiveness in the market place.

Your Company has been actively working on realising untapped opportunities in thebakery business as well as in the adjacent macro snacking space. To this end your Companyentered into a Joint Venture Agreement with Chipita S. A a Greek Company for manufactureand sale of ready-to-eat filled croissants which is a very large category in certaincountries demographically similar to India. Your Company shall continue to scout for manysuch profitable growth opportunities to ensure that it stays ahead of the market whiletransforming itself into a total Foods Company.

c. Consolidated Financial Performance

Consolidated Financial Statements prepared in accordance with Section 133 of theCompanies Act 2013 read with rules made thereunder and applicable Accounting Standardsalong 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.9232.30 Crores vis--vis Rs. 8554.36 Crores in the previous year registering a growthof 7.9%. Consolidated Net Profit for the financial year ended 31 March 2017 is Rs. 884.61Crores vis--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 Associatesincluded in the Consolidated Financial Statements is provided in Form AOC-1 and forms partof this Annual Report. The audited financial statements of all the subsidiaries areavailable 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 afterobtaining necessary approvals from High Court of Karnataka and High Court at Calcutta.

Acquisition: Your Company acquired 26% stake in Sunandaram Foods Private Limited acake 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 filledcroissants 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 FoodsLimited.

e. Dividend

Your Board is pleased to recommend a dividend of 1100% which amounts to Rs. 22/-pershare (face value Rs. 2 per share) for consideration and approval by the Members at theensuing Annual General Meeting. The total dividend payout amounts to Rs.317.75Crores 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 forthe financial year ended 31 March 2017.

g. Share Capital

During the year under review your Company has allotted 25000 equity shares of Rs. 2each upon exercise of 25000 options under Employee Stock Option Scheme. Consequently thepaid up equity share capital of your Company has increased by Rs. 50000 in the currentyear.

II. OPERATIONAL PERFORMANCE

a. The Britannia Promise to Spread Delight

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

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

b. Supply Chain

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

Your Company expanded its capacity during the year across five locations interaliaincluding a state-of-the-art imported Cream biscuit line an imported SpecialityCookie line and the first in-house Rusk Plant. Your Company has increased its operatingcontrol on capacity with the commissioning of these new production lines. Further oneGreenfield Plant is under way in Assam and two more are planned for Project startup in FY2017-18. To improve your Company's competitiveness in the International market aGreenfield Project at Mundra Special Economic Zone is being put up and is expected tocommission in the coming year.

These initiatives have helped in creating the right capacity and capability usingcost-efficient yet superior technology to meet the growing demand and rising consumerexpectations. With the ever increasing challenges in supply chain planning especiallyduring the period of demonetization your Company could manage the volatility in demand byeffectively 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 aZero Accident culture your Company has strengthened its workplace systems and practicesthrough several accident prevention programs. Further your Company has also introducedsite level performance indicators (Lead Lag and System related) to promote a positive andproactive culture at work place. During FY 2016-17 all the manufacturing units of yourCompany have successfully undertaken OHSAS 18001:2007 certification. Your Company alsoextended 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 qualityproducts to delight consumers. Your Company started its journey to excel in Food Safetyand Quality Standards by building American Institute of Baking (AIB) roadmap throughcapability enhancement in core teams followed by rigorous internal programs. In thisinitial phase of AIB roadmap two of Britannia's Biscuit units have successfully clearedexternal AIB inspection. The journey will continue in coming years to build globalstandards in Food Safety and Quality for your Company.

You would be happy to know that all biscuits cake and rusk manufacturing units are ISO22000 certified and new units are under certification process.

Your Company continued risk assessment based supplier quality assurance programs andcarried out rigorous vendor audits for key raw and packaging materials to ensure inputmaterial quality. Rigorous in-market delivered quality assessment programs helped deliverquality products to consumers. You would be happy to know that your Company's consumercare 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 receivedapproval from Department of Scientific and Industrial Research. This centre is now fullyoperational with enhanced capabilities for the core as well as future adjacent productcategories which will help in innovating faster with superior product experience delivery.

During FY 2016-17 R&D team developed for market launch a new differentiatedproduct ‘Cake Biscotti'. Your Company also expanded its presence in the Veg Cakeportfolio with the launch of ‘Veg Choco Cake'. Your R&D team developed delightfuland 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. Launchof ‘50-50 Mathri Masti' embarked into a new territory of cracker-snacks with thetaste profile of Indian ethnic snack Mathri.

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

Re-engineering of packaging laminate and paper based packaging continued and rolled outduring the year leading to use of less plastic and paper. Your R&D team builtstrategic partnership with global leaders in core areas of interest like Chocolate TasteTool boxes and Health & Wellness.

f. Conservation of Energy Research and Development Technology Absorption ForeignExchange Earnings and Outgo

Details of energy conservation technology absorption foreign exchange earnings andoutgo in accordance with the provisions of Section 134 (3) (m) of the Companies Act 2013read 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 relevantand the preferred choice of consumers is paramount. FY 2016-17 saw a slew of newinitiatives - big renovations innovations promotions activations and advertisementswhich kept your Company's brands salient in the consumers minds.

FY 2016- 17 witnessed subdued consumer demand especially in the later part of theyear. In view of this your Company invested in strengthening consumer demand through somefocused brand campaigns and activations. Your Company also consolidated product portfoliosto bring in efficiencies of scale and accelerated the launch of innovative products andvariants across the product portfolio.

The key campaigns executed by your Company were on Good Day Marie Gold Milk Bikis50-50 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 celebrityendorsements have helped the brands to strike a chord with their target audience asmeasured by increase in saliency of these brands.

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

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

Your Company launched a host of new-to-market taste experiences across its productportfolio- some of the key ones being Good Day 3 Nuts cookie Good Day Choco chip cookieNutriChoice Digestive Zero Oats cookies and 50-50 Mathri Masti. These innovations areperforming well in the market and your Company is continuing to invest behind growingthem.

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

Your Company won accolades and recognition at prestigious Marketing Forums in thecountry. It won the Pitch CMO Summit Award for ‘Best Use of Media'. The flagshipbrand Good Day won three medals at the prestigious Advertising & Marketing Abby'sAwards.

Your Company will renew its vigor on renovation innovation communication activationand as a result increase consumer engagement which will continue to hold your Company'sgrowth 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 theArticles of Association of the Company Mr. A.K Hirjee Non-Executive Directorretiring 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 13February 2017 appointed Dr. Ajay Shah and Dr. Y.S.P Thorat as Additional and IndependentDirectors 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 RemunerationCommittee Meeting prior to the Board meeting of your Company on 25 May 2017 to be giveneffect immediately on the conclusion of the Board meeting. In his letter to the Chairmanof the Board Mr. Munjee stated that "my continuance on the Britannia Board isno longer compatible with my activities in the Tata Group. Unfortunately this has arisenfrom the events that we all witnessed over the last few months". "Yourquestioning my independence on the Boards of Tata Companies……. and specificallywriting to SEBI has also complicated matters". "There have been consequences ofthis and matters are truly out of my hands".

The Chairman while responding to Mr. Munjee informed him that he did not understand therelevance of the statement "my continuance on the Britannia Board is no longercompatible with my activities in the Tata Group. Unfortunately this has arisen from theevents that we all witnessed over the last few months". He stated that he and theWadia Group as Promoters of Britannia Industries Limited repeatedly asked and wished himto continue on the Board and that his continued contribution as an Independent Directorwould in no way be affected by his Directorships at Tatas. He also informed him that thepressures 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. Munjeefor his resignation from the Board are neither germane nor relevant to Britannia.

The Board while accepting the resignation of Mr. Munjee appreciated and placedon record the valuable contribution made by him during his tenure as an IndependentDirector 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 thebest of their knowledge and ability confirm that:

(i) In the preparation of the annual accounts the applicable accounting standards havebeen followed;

(ii) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31 March 2017 and of the profit of theCompany for the year;

(iii) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 andthat such internal financial controls are adequate and are operating effectively;

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

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultant(s) and the reviews made by the Management andthe relevant Board Committees including the Audit Committee and Risk Management Committeethe Board is of the opinion that the Company's internal financial controls were adequateand 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 theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofits 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 ofthis Report.

V. EMPLOYEES

a. Key Managerial Personnel (KMP)

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

Mr. Rajesh Arora resigned from the position of Company Secretary and Key ManagerialPersonnel 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 Employeesas required under Section 197(12) of the Companies Act 2013 read with Rule 5 of theCompanies (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 ofSection 136 of the Companies Act 2013 the report and financial statements are being sentto the Members and others entitled thereto excluding the disclosure on particulars ofemployees. This is available for inspection by the Members at the Registered Office ofyour Company during business hours on working days of the Company up to the date of theensuing Annual General Meeting. If any Member is interested in obtaining a copy thereofsuch 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 CompaniesAct 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014is given as Annexure ‘D' to this Report.

e. Disclosure on Sexual Harassment of Women at Workplace

TheCompanyhasanInternalComplaintsCommittee for providing a redressal mechanismpertaining to sexual harassment of women employees at workplace. There was no case ofsexual 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. Thetalented and committed people of your Company have been the architects of its success andreputation which in turn has attracted new talent. This virtuous cycle has ensured thatthe skill and capability to successfully steer a Company as large as yours is ever presentand 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 teamcomprises of people promoted from within which is an industry benchmark according toexperts.

(ii) Britannia "Young Manager Council"

In order to build an inclusive work culture and young future leaders your Company hascreated a "Young Manager Council" consisting of employees who are less than 30years of age. The young Managers council is a way for the management to understand youthof the country. The idea behind this initiative is to encourage young managers /managementtrainees/ new joinees to provide input to the organization on food & snacking habitsand preferences of the youth so that Company can develop products accordingly. The youngmanagers provide feedback on current market trends through their distinctive lens. Thishelps us stay in tune with the changing preferences in palates and their dynamiclifestyles while it keeps them intricately involved in new product launches right from theR&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 withthe Statutory Auditor's Certificate on compliance with the provisions of corporategovernance 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 SEBICircular No. CIR/CFD/CMD/10/2015 dated 4 November 2015 the "Business ResponsibilityReport" (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 withthe rules made thereunder an extract of the Annual Return in Form MGT-9 is givenas 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 CorporateGovernance Report.

e. Board Evaluation

The details of evaluation of Directors Committees and Board as whole are given in theClause 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 theCorporate Governance Report.

g. Risk Management

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

h. Independent Directors

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

i. Board and Committees

The details of Board and its Committees are given in Clause No. 2 and 3 of theCorporate 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 2013read with the rules made thereunder. In accordance with Ind AS - 24 the Related PartyTransactions 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 themeaning of Section 73 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014 during the year.

l. Particulars of Investments Loans and Guarantees

The particulars of Investments Loans and Guarantees covered under the provisions ofSection 186 of the Companies Act 2013 read with the rules made thereunder are given inthe 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 orTribunals during the year impacting the going concern status and the operations of theCompany in future.

VII. AUDITORS

a. Statutory Auditors

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

In this regard M/s. B S R & Co. LLP Chartered Accountants have submitted theirwritten consent that they are eligible and qualified to be re-appointed as StatutoryAuditors of the Company in terms of Section 139 of the Companies Act 2013 and alsosatisfy 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 ensuingAnnual General Meeting.

b. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyappointed M/s. Parikh & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company for FY 2016-17. The Secretarial AuditReport 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 theManagement 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 CourtBangalore in the matter of pension payable to its eligible beneficiaries. The Board ofDirectors of the Company reviewed the judgement and after obtaining legal opinion fromeminent 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 inthe Hon'ble High Court of Karnataka. In response to the appeal filed the Hon'ble HighCourt of Karnataka in its order dated 18 December 2015 referred the matter to BangaloreMediation Centre for exploring the possibilities of settlement. The PWA through theirlegal counsel had submitted that they will not precipitate execution before the trialcourt during mediation.

As a result of the mediation process a Memorandum of Settlement (‘MoS') dated 29August 2016 was entered into between the PWA the Company and Trust Funds. As per terms ofthe MoS and the Decree passed by the Hon'ble High Court of Karnataka dated 18 October2016 the Covenanted Staff Pension Fund Trust inter alia filed an application with theHon'ble High Court at Calcutta for obtaining approval to use the fixed deposit held in thename of the Trust and interest thereon. In response to the petition filed by the Companythe Hon'ble High Court at Calcutta passed an order directing CIT Kolkata to consider therepresentations made by PWA and the Company.

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

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

X. ACKNOWLEDGEMENTS

Your Directors would like to thank all stakeholders namely customers shareholdersdealers suppliers bankers employees and all other business associates for thecontinuous 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)