It acquired a reputation for quality and value. During World War II, the government contracted with Britannia company to supply large quantities of "service Biscuits" to armed force. In 1992 the Britannia company celebrated its Platinum Jubilee. In 1997, it unveiled its corporate identity "Eat Healthy, Think Better". In 2001 the India's most successful product is Britannia 50-50 Maska-Chaska. Britannia - the Biscuit Leader from past is because the changes in consumer needs-needs that are varying from 100+ years epoch. The core essence of Britannia is Healthy, Optimistic, Nutrition and delightful product range which offend variety and choice to consumers. The reputation of Britannia Company is same from past because of its high ethical standards which are also one of the greatest asset of Britannia to preserve this asset, the company documented the Code of Business Conduct (COBC). The COBC is that which contains principles, laws and policies that govern the activities of company, employees and others who work with it directly or indirectly.
VISSION: The vision of Britannia company is that to dominate food and beverage market in India with distinctive range of Britannia brands.
OBJECTIVIES:
The long term objective:
In the market it wants to be the lowest-cost producer.
In the bakery industry it wants to be the largest volume player.
The short term objectives:
Increase its Net Sales Value and Rate on Line.
Improve its internal process and controls.
Improve the image of shareholders.
SWOT ANALYSIS of Britannia Company:
SWOT (Strengths, Weakness, Opportunities and Threats) of Britannia company are:
STRENGTHS of Britannia Company:
It has a widespread distribution network.
It main focus is on rural market.
It used Superior technology (SAP).
It had good Research and Development department.
It had established a brand name.
It has world class factories.
It has wide range of products covering all segments.
Weakness of Britannia Company:
The overhead cost is high.
It has more competition with other companies.
Opportunities of Britannia Company:
It has more opportunity from rural market.
There is a price hike for 100-grams of Parle-G brand.
On bakery product there is saving in cost and from lowering excise duty.
Threats of Britannia Company:
There is rise in input cost.
There is more competition from ITC and HUL.
The other companies reduced the price of its products.
Some products of Britannia:
Fig b: one of the most successful Product of Britannia Company.
Fig c: Different products of Britannia Company.
BRAND AMBASSDORS OF BRITANNIA COMPANY:
Fig d: Brand Ambassadors of Britannia company.
OVERVIEW OF ITC COMPANY:
ITC company was established in August 24, 1910 under the name Imperial Tobacco Company of India LTD. After that the name of ITC changed to India Tobacco Company LTD in 1970. It has wide range of business in that it also has FMCG goods like Sun feast Biscuits. In the year 2003 the Sunfeast as a company entered the biscuit segment.
Sunfeast it is the name of umbrella brand which was introduced in Glucose, Cream and Marie segment. Tagline of Sun Feast is "Light Khao Light Raho".
The brand ambassador of Sunfeast is sun which reinforcing the position of brand "Spread the Smile" which express the satisfaction, happiness, pleasure and contentment. It started with two unique products and new flavours for the first time in the India market they are Orange Marie and Butterscotch Cream biscuits. On July 30th, 2003 the ITC's food business announced to launch sunfeast in Kolkata with a range of high quality and good tasting biscuits. The ITC launched nationally over One million retail outlets across the country. After that in the year 2007 ITC entered the snacks category with Bingo. Within eight years the Food business has grown to significant size with 200 differentiated products under 6 distinctive brands, with solid market standing, rapid growing market share and distribution research. After launch of Sunfeast products within 6years it launched the many new varieties of products in almost all types of biscuit categories.
AIM OF ITC:
The main aim of ITC is that it wants to be the most trusted provider of food products in Indian market.
VISION OF ITC:
ITC's Vision is that it wants to be one the most valuable corporations through world class performance, creating value to Indian economy and companies stakeholders.
MISSION OF ITC:
The Mission of ITC is that it wants to enhance the wealth generating capability of enterprise in globalizing environment, sustainable stakeholder value and delivering superior.
SWOT ANALYSIS of ITC:
Strengths of ITC:
ITC used traditional business for new segments to develop new brands.
ITC is a umbrella company which involved in different business sectors which includes paper, cigarettes, packaged foods, agriculture, IT, personal care, greeting cards, safety matches, stationery and incesnse sticks.
Weakness of ITC:
The ITC company is still dependent upon tobacco revenues.
The ITC's main business is tobacco. ITC stands for Imperial Tobacco Company of India LTD. The branding continues to use its original name, the negative connection of tobacco with premature death and poor health.
Opportunities of ITC:
ITC is involved in all sectors including Information Technology, supporting business solutions.
Indian consumers use personal care products is lowest in the world offering an opportunity for ITC fragrances, soaps and shampoos.
The ITC company researches more to know the consumer tastes in North, West and East of India.
The core brands such as Sun Feast, Aashirvaad, Bingo and Mint-o which can develop using marketing penetration, market development and product development.
THREATS of ITC:
The ITC's threat is from competition both from domestic and international. The laws of economics dictate if competitors see that solid profit to be made in emerging consumer society ultimately new products and services will be made available.
Fig e: Different products of Sun Feast.
FINANCIAL RATIOS:
LIQUIDITY RATIOS: The term liquidity refers to ability of company to meet its current liabilities. It assesses capacity of the firm to repay its short term liabilities. The different liquidity ratios are:
Current Ratio.
Quick Ratio.
CURRENT RATIO: It is the ratio between current assets and current liabilities of a firm for a particular period. It is used to measure the ability of the firm to meet its short term liability.
Formula:
CURRENT RATIO = Current Assets ÷ Current Liabilities.
Current Assets: Those assets which can be converted into cash within a short period.
Current Liabilities: Those liabilities which are expected to be paid within a year.
COMPARISION BETWEEN TWO COMPANIES:
The current ratios two companies in years 2009 & 2010
Current Ratio of ITC Company in the year 2009
Current Ratio of ITC Company in the year 2010
1.42
0.92
Current Ratio of Britannia Company in the year 2009
Current Ratio of Britannia Company in the year 2010
1.27
0.94
QUICK RATIO: It is another ratio which is used to test liability of the concern. This ratio measures the ability of the firm to pay its current liabilities.
Formula:
QUICK RATIO = Liquid or Quick Assets ÷ Current Liabilities.
Liquid Assets = Current Assets - (Stock + Prepared Expenses).
Comparison between two companieS
The Quick Ratio of two companies in the years 2009 & 2010
Quick ratio of ITC company in year 2009
Quick ratio of ITC company in year 2010
0.61
0.39
Quick ratio of Britannia company in year 2009
Quick ratio of Britannia company in year 2010
0.65
0.43
SOLVENCY RATIOS:
It refers to ability of a firm to meet its long term obligations. These ratios indicate firm's ability to meet the fixed interest, its cost and repayment schedules associated with long term borrowings. There are 2 Types of Solvency ratios they are:
Debt Equity Ratio.
Proprietary Ratio.
Debt Equity Ratio: It is also known as external to internal equity ratio. It is used to know the relative claims of outsiders and owners against the firm's assets.
Formula:
Debt Equity Ratio = Outsiders Funds ÷ Shareholders Funds.
COMPARISION BETWEEN TWO COMPANIES
Debt Equity Ratio of ITC in year 2009
Debt Equity Ratio of ITC in year 2010
0.01
0.01
Debt Equity Ratio of Britannia in year 2009
Debt Equity Ratio of Britannia in year 2010
0.03
1.08
PROPRIETARY RATIO: It is also known as equity ratio. It establishes relationship between shareholders funds to total assets of firm.
Formula:
Proprietary Ratio = Shareholders Funds ÷ Total Assets
Shareholder Funds = Share Capital + Reserves.
COMPARISION BETWEEN TWO COMPANIES:
Proprietary Ratio of ITC in year 2009
Proprietary Ratio of ITC in year 2010
13,912.63
14,172.09
Proprietary Ratio of Britannia in year 2009
Proprietary Ratio of Britannia in year 2010
0.03
1.08
PROFITABILITY RATIO:
It is used to know how much profit has been earned with the help of the amount invested in the business. These ratios examine the current operating performance and efficiency of the business. There are 3 types of profitability ratios they are:
Gross Profit Ratio.
Net Profit Ratio.
Operating Profit Ratio.
Return on Investment Ratio.
Gross Profit Ratio:
Formula:
Gross Profit Ratio = (Gross Profit ÷ Net Sales) * 100
Here,
Net Sales = Total Sales - ( Sales Returns + Excise Duty)
Gross Profit = Net Sales - Cost of Goods Sold.
COMPARISION BETWEEN TWO COMPANIES
Gross Profit Ratio of ITC in year 2009
Gross Profit Ratio of ITC in year 2010
29.17
29.74
Gross Profit Ratio of Britannia in year 2009
Gross Profit Ratio of Britannia in year 2010
6.17
4.89
Operating Profit Ratio:
Formula:
Operating Profit Ratio = (Operating Profit ÷ Net Sales) * 100
Here,
Operating Profit = Gross Profit - (Administrative Expenses + Selling Expenses)
COMPARISON BETWEEN TWO COMPANIES:
Operating Profit Ratio of ITC in year 2009
Operating Profit Ratio Of ITC IN year 2010
32.84
33.08
Operating Profit Ratio of Britannia in year 2009
Operating Profit Ratio of Britannia in year 2010
7.20
5.99
Net Profit Ratio:
Formula:
Net Profit Ratio = (Net Profit ÷ Net Sales)* 100
COMPARISION BETWEEN TWO COMPANIES:
Net Profit Ratio of ITC in year 2009
Net Profit Ratio of ITC in year 2010
21.18
21.30
Net Profit Ratio of Britannia in year 2009
Net Profit Ratio of Britannia in year 2010
5.75
3.38
Return on Investment Ratio:
Formula:
ROI = (Net Profit before Interest, Tax and Dividend ÷ Capital Employed) * 100
Here,
Net Profit before tax, interest and dividend = PBDIT - Depreciation
Capital employed = share capital + reserves + secured loans + unsecured loans.
COMPARISION BETWEEN TWO COMPANIES
ROI of ITC in year 2009
ROI of ITC in year 2010
34.62
42.98
ROI of Britannia in year 2009
ROI of Britannia in year 2010
26.13
14.80
GRAPH:
Fig e: Performance Trends of Britannia.
Fig f: Britannia companies cash profits
HORIZONTAL:
Profit and Loss account of Britannia Company in the years 2009 & 2010 Rs in crore:
Debit
2009
2010
Credit
2009
2010
Expenditure
Raw materials
Depreciation
Interest
Equity Dividend
Preference Dividend
Power and fuel
Corporate Dividend Tax
Reported Net Profits
Transfer to capital account
To Net profit
1936.66
33.46
16.01
95.56
0
21.47
16.24
180.40
863.4
3163.2
2197.74
37.54
8.21
59.73
0
22.38
9.92
116.51
926.54
3378.57
Income:
Sales turnover
Excise duty
Net sales
Other income
Stock adjustment
3142.89
30.51
3112.38
31.38
19.44
3163.2
3424.58
23.27
3401.31
-44.19
21.45
3378.57
Balance sheet of Britannia Company in the years 2009 & 2010 Rs in crore:
Liabilities
2009
2010
Assets
2009
2010
Sources of funds:
Total share capital
Share application money
Preference share capital
Reserves
Revolution reserves
Securied Loans
Unsecuried loans
Current Liabilities:
Provisions
Total
23.89
0
0
800.65
0
2.20
22.97
290.06
147.48
1287.25
23.89
0
0
371.36
0
408.10
21.51
345.08
241.17
1412.11
Gross Block
Less: Accumulator Depreciation
Investments
Current Assets:
Inventories
Sundary Deters
Cash& Bank balance
Loans& advances
Fixed deposits
Miscellaneous expenses
Capital working progress
511.50
233.67
423.10
253.63
49.61
40.56
209.61
0.24
26.64
6.02
1287.25
547.83
266.33
566.79
268.34
39.49
18.11
221.0
5.25
0
11.64
1412.11
Cash Flows of Britannia Company for years 2009 & 2010 Rs in crore:
SOURCES
2009
2010
Applications
2009
2010
Cash Opening Balance
Cash from Operations
Net Cash from Investment activities
Net Cash from Financing activities
Total
224.81
232.52
12.28
-45.77
423.84
338.09
120.78
-109.69
-184.05
279.64
Closing Cash Equivalent
338.09
338.09
279.64
279.64
Profit and loss account of ITC Company in year 2009 & 2010 Rs in crore:
Debit
2009
2010
Credit
2009
2010
Expenditure
Raw materials
Depreciation
Interest
Equity Dividend
Preference Dividend
Power and fuel
Corporate Dividend Tax
Reported Net Profits
Transfer to capital account
To Net Profit
6864.96
549.41
47.65
0
0
394.12
237.34
3263.59
36218.82
47575.89
7140.69
608.71
90.28
0
0
387.34
634.15
4061.00
39974.6
52896.77
Income:
Sales turnover
Excise duty
Net sales
Other income
Stock adjustment
23247.84
8262.03
14,985.81
426.21
630.00
47575.89
26,399.63
7832.18
18,567.45
545.05
-447.54
52896.77
Balance sheet of ITC Company in the year 2009 & 2010 Rs in crore:
Liabilities
2009
2010
Assets
2009
2010
Sources of funds:
Total share capital
Share application money
Preference share capital
Reserves
Revolution reserves
Securied Loans
Unsecuried loans
Current Liabilities:
Provisions
Total
377.44
0
0
13,302.55
55.09
11.63
165.92
4121.59
1740.49
19774.71
381.82
0
0
13,628.17
54.39
0
107.71
4619.54
4549.94
23341.57
Gross Block
Less: Accumulator Depreciation
Investments
Current Assets:
Inventories
Sundary Deters
Cash& Bank balance
Loans& advances
Fixed deposits
Miscellaneous expenses
Capital working progress
10,558.65
3286.74
2837.75
4599.72
668.67
68.73
2150.21
963.66
0
1214.06
19774.71
11,967.86
3825.46
5726.87
4549.07
858.80
120.16
1929.16
1006.12
0
1008.99
23341.57
Cash flows of ITC Company in years 2009 & 2010 Rs in crore:
SOURCES
2009
2010
Applications
2009
2010
Cash Opening Balance
Cash from Operations
Net Cash from Investment activities
Net Cash from Financing activities
Total
570.25
3279.03
-1260.74
-1556.15
1032.39
993.70
4630.65
-3531.56
-1009.86
1082.93
Closing Cash Equivalent
1032.39
1032.39
1082.93
1082.93
VERTICAL ANALYSIS:
Profit & Loss account of Britannia in year 2009 & 2010 Rs in crore:
March 2009 March 2010
Income
Sales Turnover
3,142.89
3,424.58
Excise Duty
30.51
23.27
Net Sales
3,112.38
3,401.31
Other Income
31.38
-44.19
Stock Adjustments
19.44
21.45
Total Income
3,163.20
3,378.57
Expenditure
Raw Materials
1,936.66
2,197.74
Power & Fuel Cost
21.47
22.38
Employee Cost
96.02
99.52
Other Manufacturing Expenses
281.37
304.86
Selling and Admin Expenses
499.69
513.99
Miscellaneous Expenses
72.45
80.21
Preoperative Exp Capitalised
0.00
0.00
Total Expenses
2,907.66
3,218.70
Mar '09
Mar '10
Operating Profit
224.16
204.06
PBDIT
255.54
159.87
Interest
16.01
8.21
PBDT
239.53
151.66
Depreciation
33.46
37.54
Other Written Off
0.00
0.00
Profit Before Tax
206.07
114.12
Extra-ordinary items
26.42
6.65
PBT (Post Extra-ord Items)
232.49
120.77
Tax
52.12
4.27
Reported Net Profit
180.40
116.51
Total Value Addition
970.99
1,020.96
Preference Dividend
0.00
0.00
Equity Dividend
95.56
59.73
Corporate Dividend Tax
16.24
9.92
Per share data (annualised)
Shares in issue (lakhs)
238.90
238.90
Earning Per Share (Rs)
75.51
48.77
Equity Dividend (%)
400.00
250.00
Book Value (Rs)
345.14
165.86
BALANCE SHEET of Britannia Company in years 2009 & 2010 Rs in crore:
2009 2010
Sources Of Funds
Total Share Capital
23.89
23.89
Equity Share Capital
23.89
23.89
Share Application Money
0.00
0.00
Preference Share Capital
0.00
0.00
Reserves
800.65
372.36
Revaluation Reserves
0.00
0.00
Networth
824.54
396.25
Secured Loans
2.20
408.10
Unsecured Loans
22.97
21.51
Total Debt
25.17
429.61
Total Liabilities
849.71
825.86
Mar '09
Mar '10
Application Of Funds
Gross Block
511.50
547.83
Less: Accum. Depreciation
233.67
266.33
Net Block
277.83
281.50
Capital Work in Progress
6.02
11.64
Investments
423.10
566.79
Inventories
253.63
268.34
Sundry Debtors
49.61
39.49
Cash and Bank Balance
40.56
18.11
Total Current Assets
343.80
325.94
Loans and Advances
209.61
221.00
Fixed Deposits
0.24
5.25
Total CA, Loans & Advances
553.65
552.19
Deffered Credit
0.00
0.00
Current Liabilities
290.06
345.08
Provisions
147.48
241.17
Total CL & Provisions
437.54
586.25
Net Current Assets
116.11
-34.06
Miscellaneous Expenses
26.64
0.00
Total Assets
849.70
825.87
Contingent Liabilities
329.05
318.67
Book Value (Rs)
345.14
165.86
Cash Flows of Britannia company in years 2009 & 2010 Rs in crore:
2009 2010
Net Profit Before Tax
232.52
120.78
Net Cash From Operating Activities
246.78
235.29
Net Cash (used in)/from
Investing Activities
12.28
-109.69
Net Cash (used in)/from Financing Activities
-145.77
-184.05
Net (decrease)/increase In Cash and Cash Equivalents
113.28
-58.45
Opening Cash & Cash Equivalents
224.81
338.09
Closing Cash & Cash Equivalents
338.09
279.64
Profit & Loss account of ITC Company in year 2009 & 2010 Rs in crore:
2009 2010
Income
Sales Turnover
23,247.84
26,399.63
Excise Duty
8,262.03
7,832.18
Net Sales
14,985.81
18,567.45
Other Income
426.21
545.05
Stock Adjustments
630.30
-447.54
Total Income
16,042.32
18,664.96
Expenditure
Raw Materials
6,864.96
7,140.69
Power & Fuel Cost
394.12
387.34
Employee Cost
903.37
1,014.87
Other Manufacturing Expenses
402.88
413.79
Selling and Admin Expenses
1,684.41
2,093.87
Miscellaneous Expenses
516.90
1,008.91
Preoperative Exp Capitalised
-72.55
-71.88
Total Expenses
10,694.09
11,987.59
Mar '09
Mar '10
Operating Profit
4,922.02
6,132.32
PBDIT
5,348.23
6,677.37
Interest
47.65
90.28
PBDT
5,300.58
6,587.09
Depreciation
549.41
608.71
Other Written Off
0.00
0.00
Profit Before Tax
4,751.17
5,978.38
Extra-ordinary items
81.52
48.65
PBT (Post Extra-ord Items)
4,832.69
6,027.03
Tax
1,565.13
1,965.43
Reported Net Profit
3,263.59
4,061.00
Total Value Addition
3,829.13
4,846.90
Preference Dividend
0.00
0.00
Equity Dividend
1,396.53
3,818.18
Corporate Dividend Tax
237.34
634.15
Per share data (annualised)
Shares in issue (lakhs)
37,744.00
38,181.77
Earning Per Share (Rs)
8.65
10.64
Equity Dividend (%)
370.00
1,000.00
Book Value (Rs)
36.24
36.69
BALANCE SHEET OF ITC COMPANY IN YEAR 2009 & 2010 Rs in Crore:
