Column1 Column2 Column3 Column4 Column5 Column6 Column7 Column8

Britannia Annual Reports

CONSOLIDATED BALANCE SHEET

Rs. '000
As at 31-Mar-09 31-Mar-08

SOURCES OF FUNDS
Shareholders funds
Share Capital 238,902 238,902
Reserves and surplus 6,974,800 6,683,375
7,213,702 6,922,277
Minority Interest 36,974 101,954
Loan funds
Secured 645,440 65,035
Unsecured 2,058,033 2,657,499
2,703,473 2,722,534
Deffered tax liability, net 99,417 –
10,053,566 9,746,765

APPLICATION OF FUNDS
Fixed assets
Gross block 9,216,476 7,602,584
Less: Accumulated depreciation and amortisation 4,511,365 3,611,728
Net block 4,705,111 3,990,856
Capital work-in-progress and advances 62,990 101,257
4,768,101 4,092,113
Investments 3,773,437 3,398,390
Deferred tax asset, net – 25,353
Current assets, loans and advances
Inventories 2,886,890 3,293,094
Sundry debtors 740,000 690,426
Cash and bank balances 688,412 534,619
Other current assets 137,085 131,930
Loans and advances 1,654,709 1,358,099
6,107,096 6,008,168
Less: Current liabilities and provisions
Current liabilities 3,347,815 2,959,745
Provisions 1,517,254 1,057,045
4,865,069 4,016,790
Net current assets 1,242,027 1,991,378
Miscellaneous expenditure
(to the extent not written off or adjusted) 270,001 239,531
10,053,566 9,746,765
Column9 Column10 Column11

31-Mar-07 31-Mar-06 31-Mar-05

238,902 238,902 238,902

5,481,158 5,251,994 4,196,341
5,720,060 5,490,896 4,435,243
102,670 – –

79,431 16,200 61,379

1,490,171 77,383 –
1,569,602 93,583 61,379
– 16,913 170,600
7,392,332 5,601,392 4,667,222

6,820,104 3,153,666 2,503,463

3,198,093 1,748,063 1,543,940
3,622,011 1,405,603 959,523
163,684 110,782 317,007
3,785,695 1,516,385 1,276,530
2,907,568 3,598,641 3,300,767
12,426 – 137,084

2,367,141 1,847,956 1,342,237

567,499 208,516 427,764
546,817 353,395 163,062
1,709 5,558 1,847
871,878 940,652 708,720
4,355,044 3,356,077 2,643,630

2,988,956 2,247,006 2,059,717

935,255 783,313 973,431
3,924,211 3,030,319 3,033,148
430,833 325,758 -389,518

255,810 160,608 342,359

7,392,332 5,601,392 4,667,222
Column1 Column2 Column3 Column4 Column5 Column6 Column7 Column8
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Rs. '000
For the year ended 3/31/2009

INCOME
Gross Sales 34,522,596
Less: Excise duty 310,316
Net sales 34,212,280
Other income 387,176
34,599,456
EXPENDITURE
Cost of materials 21,190,636
Staff cost 1,587,075
Expenses 9,054,224
Depreciation and amortisation (including impairment) 659,106
Financial expenses 326,031
32,817,072
Profit before taxation and exceptional items 1,782,384
Exceptional items (Profit)/Loss -180,059
Profit before taxation 1,962,443
Income tax expense
Current income tax 346,508
Fringe benefit tax 54,648
Wealth tax 1,224
Deferred income tax, net 127,646
Profit after taxation before share of Profits/(Losses) of 1,432,417
Associates (Net) and Minority interest
Share of Net Profit/ (Loss) of Associates 2,117
Share of Loss/ (Profit) of minority 80,314
Profit after taxation 1,514,848
Profit brought forward 146,166
Profit available for appropriation 1,661,014
Appropriations
Transfer to general reserve 190,000
Interim dividend 955,607
Proposed dividend –
Tax on Interim/Proposed dividend 162,405
Profit carried forward 353,002
1,661,014
Basic earnings per share (Rs.) 63.41
Diluted earnings per share (Rs.) 63.40
Column9 Column10 Column11 Column12

3/31/2008 3/31/2007 3/31/2006 3/31/2005

28,098,919 23,841,384 18,179,211 16,154,485

329,597 1,178,500 1,045,828 278,787
27,769,322 22,662,884 17,133,383 15,875,698
513,688 288,477 216,847 791,930
28,283,010 22,951,361 17,350,230 16,667,628

16,929,035 14,540,326 10,049,609 7,358,693

1,262,579 793,025 730,661 586,096
7,218,760 6,023,182 4,343,508 6,112,565
393,606 259,630 217,228 189,707
185,956 116,923 50,861 –
25,989,936 21,733,086 15,391,867 14,247,061
2,293,074 1,218,275 1,958,363 2,420,567
111,651 53,697 -48,765 218,160
2,181,423 1,164,578 2,007,128 2,202,407

359,164 89,169 542,864 714,712

68,030 52,184 – –
1,225 1,225 – –
-12,094 -29,339 – –
1,765,098 1,051,339 542,864 1,487,695

413 – – –
8,878 – – –
1,774,389 1,051,339 542,864 1,487,695
146,166 500,000 500,000 500,000
1,920,555 1,551,339 1,964,264 1,998,472

1,271,284 599,299 1,055,653 1,117,102

– – – –
430,023 358,352 358,352 334,462
73,082 60,902 50,259 46,908
146,166 532,786 500,000 500,000
1,920,555 1,551,339 1,964,264 1,998,472
74.27 43.09 59.96 60.59
74.27
Column1 Column2 Column3 Column4 Column5 Column6 Column7
RATIOS:

Year ending 31-Mar-09 31-Mar-08 31-Mar-07 31-Mar-06

Current Ratio 1.33 1.571104605 1.165345358 1.074952626

Quick ratio 0.467617536 0.458476997 0.37338288 0.252544497
Inventory Turnover ratio 7.340299076 5.140768833 6.142568609 5.43822959
Debtors Turnover ratio 0.523210811 0.744016013 0.508330411 1.039953769
Working capital Turnover ratio 19.18447688 10.01526039 29.42135125 59.67028067
Debt equity ratio 0.838860269 0.82086848 0.79694234 0.426267225
Solvency ratio 0.523458979 0.498322393 0.496695201 0.370768128
Fixed assets ratio 0.480792262 0.424281305 0.519323804 0.271535626
Return on shareholder's investment 21.00% 25.63% 18.38% 19.15%
Net Profit ratio 4.43% 6.39% 4.64% 3.17%
Book value per share Rs. 334.00 Rs. 306.60 Rs. 257.40 Rs. 229.80
Tax ratio 27.01% 19.09% 9.72% 27.05%
Equity ratio 0.492448784 0.511850393 0.517150174 0.648191387
Column8

31-Mar-05

0.939405753
0.28774487
5.482409589
1.851324562
-58.9605791 * Current liabilities are included in outsider's funds
0.47823671
0.443751307
0.283886437
33.54%
9.37%
Rs. 185.65
32.45%
0.602777435
Year ending Current ratio
31-Mar-05 0.939405753314654
31-Mar-06 1.07495262584969
31-Mar-07 1.16534535804475
31-Mar-08 1.57110460529539
31-Mar-09 1.32993818356152

Current ratio
1.8
1.6
1.4
1.2
1 Current ratio

0.8
0.6
0.4
0.2
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

The current ratio for all the years is less than 2:1, which implies that the company doesn't has a very strong
liquidity position. But over the years this ratio has risen from 0.94 to 1.33. This indicates that its liquidity
position has improved over the 5 year period.

Year ending Quick ratio

31-Mar-05 0.28774486980493
31-Mar-06 0.252544496988437
31-Mar-07 0.373382880176222
31-Mar-08 0.458476997173743
31-Mar-09 0.467617535616514

Quick ratio
0.5
0.45
0.4
0.35
0.3 Quick ratio
0.25
0.2
0.15
0.1
0.05
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
 0.1
0.05
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

As a convention, a quick ratio of 1:1 is considered to be satisfactory. Here, for all the 5 years the quick ratio
is below 0.5, which implies that the company may not be able to meet its short term obligations. But the
good sign is that the ratio has risen, over the years.

Year ending Inventory Turnover ratio

31-Mar-05 5.48240958936462
31-Mar-06 5.43822958988201
31-Mar-07 6.14256860913651
31-Mar-08 5.14076883320063
31-Mar-09 7.34029907616847

Inventory Turnover ratio

8
7
6
5
Inventory Turnover ratio
4
3
2
1
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

Every firm has to maintain a certain level of inventory to be able to meet the requirements of the business.
The increasing inventory turnover ratio of Britannia indicates that the efficiency of inventory management
increases over the years.

Year ending Debtors turnover ratio

31-Mar-05 1.85132456214174
31-Mar-06 1.03995376853575
31-Mar-07 0.508330411154909
31-Mar-08 0.744016013301933
31-Mar-09 0.523210810810811

Debtors turnover ratio

2
1.8
1.6
1.4
1.2 Debtors turnover ratio
1
0.8
0.6
 2
1.8
1.6
1.4
1.2 Debtors turnover ratio
1
0.8
0.6
0.4
0.2
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

Debtors turnover ratio indicates the number of times the debtors ate turned over during a year.Over the 5
years, the debtors turnover ratio has fallen down, which implies that Britannia needs to work on the
management of its debtors.

Year ending Working capital turnover ratio

31-Mar-05 -58.9605791341832
31-Mar-06 59.6702806690457
31-Mar-07 29.4213512474454
31-Mar-08 10.0152603879493
31-Mar-09 19.1844768833539

Working capital turnover ratio

80

60

40

20 Working capital turnover ratio

0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
-20

-40
-60

-80

The working capital ratio measures efficiency with which the working capital is being used by a firm. A
higher ratio indicates efficient utilization of working capital and a low ratio indicates otherwise. We see that
in the year 2006, the ratio has risen from a negative to the highest in the 5 years. There is a fall in the
efficiency over the next 4 years, but, it is still well above 10.00.

Year ending Debt equity ratio

 31-Mar-05 0.478236705407122
31-Mar-06 0.426267224875503
31-Mar-07 0.796942339765667
31-Mar-08 0.820868480125832
31-Mar-09 0.838860268971466

Debt equity ratio

0.9
0.8
0.7
0.6
0.5 Debt equity ratio

0.4
0.3
0.2
0.1
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

Generally a low debt - equity ratio is preffered because a high proportion of owner's funds provide a
larger margin of safety. But a very low ratio is not considered satisfactory for the shareholders because it
indicates that the firm is not able to use the low cost outsiders funds to magnify their earnings.
In the 5 year period analysed, we see that the amount of debt is less as compared to the proportion of
shareholders equity, which may be considered favourable, and has increased over the years.. The
company should make sure that the proportion of debt is kept in control and is not allowed to rise above a
set level.

Year ending Solvency ratio

31-Mar-05 0.443751307248657
31-Mar-06 0.37076812783412
31-Mar-07 0.496695200941927
31-Mar-08 0.498322392802616
31-Mar-09 0.523458979178536

Solvency ratio
0.6

0.5

0.4
Solvency ratio
0.3

0.2

0.1

0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
 0.4
Solvency ratio
0.3

0.2

0.1

0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

Generally, lower the ratio of total liabilities to total assets, more satisfactory or stable is the long - term
solvency position of the firm. Here, for all the 5 years, the proportion of liabilities is less in comparison to
the assets, which is a positive for Britannia. But the solvency ratio is increasing, which means that the
proportion of assets is not increasing in the same proportion as the liabilities are. Therefore, the company
needs to have higher assets with itself.

Year ending Equity ratio

31-Mar-05 0.602777435369423
31-Mar-06 0.648191386647052
31-Mar-07 0.517150174405259
31-Mar-08 0.511850393048696
31-Mar-09 0.492448783961699

Equity ratio
0.7

0.6

0.5

0.4 Equity ratio

0.3

0.2

0.1

0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

As the equity ratio represents the relationship of owner's funds to total assets, higher the ratio or the share
of shareholders in the total capital of the company, the better is the long term solvency position of the
company.
It is a concern for Britannia as its equity ratio has declined over the last 5 years from above 60% to 49.2%.
Which implies that the company needs to raise its shareholders funds.

Year ending Fixed assets ratio

31-Mar-05 0.283886437419022
 31-Mar-06 0.271535625794277
31-Mar-07 0.5193238040392
31-Mar-08 0.424281305253156
31-Mar-09 0.480792261909263

Fixed assets ratio

0.6

0.5

0.4
Fixed assets ratio
0.3

0.2

0.1

0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

The ratio indicates the extent to which the total fixed assets are financed by the long term funds of the firm.
Britannia's total long term funds are more than its total fixed assets, which means that part of the working
capital requirements are met out of the long term funds of the firm. We see an increase in the fixed assets
ratio over the five years.

Year ending Return on shareholder's investment

31-Mar-05 33.54%
31-Mar-06 19.15%
31-Mar-07 18.38%
31-Mar-08 25.63%
31-Mar-09 21.00%

Return on shareholder's investment

40.00%
35.00%
30.00%
25.00%
Return on shareholder's investment
20.00%
15.00%
10.00%
5.00%
0.00%
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
 10.00%
5.00%
0.00%
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

The return on shareholder's investment decreases during the first 3 years.. then increases slightly in the
year ending 31st march 2008, but then again falls the next year, which is not a good sign for the company.

Year ending Net profit ratio

31-Mar-05 9.37%
31-Mar-06 3.17%
31-Mar-07 4.64%
31-Mar-08 6.39%
31-Mar-09 4.43%

Net profit ratio

10.00%
9.00%
8.00%
7.00%
6.00% Net profit ratio
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09

We see a sharp fall in the net profit ratio in the financial year ending 31st march 2006.Though in the next two
years, the ratio rises but it again falls in the year ending 31st march 2009, which could have been because of
the global economic slowdown. And over all in the 5 year period, the ratio has fallen from 9.37% to 4.43%,
which is a huge fall.
 Current ratio

as a very strong
at its liquidity

Quick ratio
 he quick ratio
tions. But the

Turnover ratio

the business.
management

s turnover ratio
s turnover ratio

ear.Over the 5
ork on the

al turnover ratio

by a firm. A
e. We see that
a fall in the
bt equity ratio

provide a
s because it
arnings.
oportion of
ars.. The
rise above a

Solvency ratio
 Solvency ratio

long - term
omparison to
ns that the
the company

Equity ratio

o or the share
sition of the

0% to 49.2%.
Fixed assets ratio

nds of the firm.

of the working
he fixed assets

lder's investment
slightly in the
the company.

Net profit ratio

in the next two

een because of
37% to 4.43%,