1) Cost of Capital (using Dividend Discount Model) -----> This is the discount rate

Rf
Rp

8.25% Rm
6% Beta

14.25%

CAPM

11%

0.44

2) Projected Operating & Stockholder Information

EXHIBIT 4 Condensed Operating and Stockholder Information for
Britannia, 2009-2013

OPERATIONS ( Rs Crores)
Net sales
Cost of goods sold
Selling, general & admin.
Depreciation expense
Interest expense
INCOME BEFORE TAXES
Taxes (a)
NET INCOME
PERCENTAGE OF SALES
Cost of goods sold
Selling, general & admin.
Income before taxes
Taxes

STOCKHOLDER INFORMATION
Earnings per share
Dividends per share
Book value per share
Market price - low
Market price - high
P/E ratio - low
P/E ratio - high

EPS TTM

23.12

2009

3112.21
2,311.18
464.2
33.46
16.01
287.36

2011

2012

2013

3403.46 4223.52
2,599.70 3,273.76
558.28
614.6
37.54
44.59
8.21 35.37772

2010

4974.19
3,813.88
725
47.32
35.5568

5615.49
4,245.05
825.68
57.08
19.37326

352.43

468.31

199.73

255.19

52.12

40.27

52.77

65.63

98.31

235.24

159.46

202.42

286.80

370.00

2009

2010

2011

2012

2013

76%
15%
18%

20%

21%

19%

21%

15.63

19.57
8.5
46.1

8.5
34.3

3) Valuation of Britannia Company

Add :Less :-

EBIT(1-T)
Depn.
NWC
Capex
FCF

Continuity Value
Discount Factor
Discounted FCF
P.V. of the firm
Value of equity
Price per Share

r
9%
ke
11%
PE
33.07
dividend
8.5
mps
764.65
growth
13.48%
other deduction
tax
33%
2014

2015

2016

2017

2018

6372.46

7231.47

8206.27

9312.47

10567.79

4817.28

5466.65

6203.56

7039.80

7988.76

936.98
64.77
19.37326

1063.29
73.51
19.37326

1206.62
83.41
19.37326

1369.27
94.66
19.37326

1553.85
107.42
19.37326

534.05

608.65

693.30

789.37

898.39

176.24

200.85

228.79

260.49

296.47

357.81

407.79

464.51

528.88

601.92

2014

2015

2016

2017

2018

kd
wght kd
wght ke
Ke(WACC)
2%

6%
215.48
23.91
7%

2014
357.81
64.77
-55.93
78.20
400.31
12179.19

2015
407.79
73.51
-33.27
88.74
425.83

2016
464.51
83.41
-4.54
100.70
451.76

2017
528.88
94.66
31.39
114.28
477.87

2018
601.92
107.42
41.17
129.68 (assumed to be zero)
538.49

Interest is to be assumed constant

Growth Rate Calculation

Economy
20%
Industry
30%
Company
50%

4.4%
17.0%
15%

0.0088
0.051
0.075
13%

Year

FCF
1
2
3
4
5

TV

400.31
425.83
451.76
477.87
538.49
12179.19

DCF
PV
0.938880473
375.84
0.881496542
375.36
0.82761989
373.89
0.777036154
371.32
0.729544071
392.85
0.729544071 8885.26
PV of the firm
10774.52
Value of Debt
215.48
Value of Equity 10559.04
Outstanding shares11.94903
IV
883.674

EXHIBIT 5 Balance Sheet of Britannia Company as of

2013 ($ millions)

ASSETS
Cash
Accounts receivable
Inventories
Other
TOTAL CURRENT ASSETS
Investment in subsidiaries
Net plant and equipment
TOTAL ASSETS

Mar-13

Apr-13

May-13

Jun-13

Jul-13

580.12

658.32

747.06

847.77

962.04

LIABILITIES & NET WORTH

Mar-13
Accounts payable
Other
TOTAL CURRENT LIABILITIES
Long-term debt
215.48
Common stock
23.91
TOTAL LIABILITIES & NET WORTH

Mar-14

Mar-15

Mar-16

Mar-17

Mar-14
811.81

Mar-15
921.25

Mar-16
1045.43

867.74

954.51

-55.92678

-33.26835

64.48
77.12
331.49
242.29
715.38

Statement of Net Working Capital

Mar-13
Less :-

Total Current Assets

715.38
Total Current Liabilities
867.74
NET WORKING CAPITAL -152.36

Mar-17
Mar-18
1186.35
1346.27
1,049.97
1154.96
1305.11
-4.53584 31.391524 41.166919

Aug-13

1091.73

Dec-18

1.) Cost of Goods Sold

Particulars
Increase/Decrease in stock
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Total COGS

2.) Selling , General and Administration

Particulars
General And Admin
Selling and Distribution
Total Selling General and Administration

2009

2010

2011

2012

-19.61
1930
21.47
90
289.32

-21.35
2184.98
22.38
99.94
313.75

-17.89
2782.23
29.55
119.93
359.94

-4.79
3184.54
40.1
145.87
448.16

2,311.18

2,599.70

3,273.76

3,813.88

2009
29.47
434.73

2010
45.86
512.42

2011
23.36
591.24

2012
28.12
696.88

464.2

558.28

614.6

725

the FMCG market has seen a CAGR of 18.7% over CY05-11.

http://www.indianexpress.com/news/consumer-sector-premium-rush/996943/

FMCG sector set to grow 13% in FY11: report

Based on Accenture report for 2012 , the FMCG segment witnessed strong growth (15-20 percent) in 201
expect BRIT to post 16.5% cagr of sales

http://altavis.co.in/industry-practices
http://www.livemint.com/Industry/LyNBizkuOMdmThw6iaoGbN/Five-trends-that-will-drive-FMCG-growth-in-201
http://www.business-standard.com/article/management/the-future-of-fmcg-110112900006_1.html
angel broking
http://www.stockmarketsreview.com/recommendations/britannia_industries_1qfy2014_performance_highlights
ecotimes http://economictimes.indiatimes.com/britannia-industries-ltd/stocks/companyid-13934.cms

Interest Calculation
Term Loan from Banks
7%

short term borrowings

9%
189.24
Long term financial
12%
debt
16%
11%

debt

Total

2013 Interest rate

Interest
2013 Amt
0.41
7.10% 0.02911
189.24
9.25% 17.5047
25.71
7.10% 1.82541
0.12
11.70% 0.01404
215.48
19.37326

2012
0.58
27.57
406.13
0.22

2013
-10.16
3528.6
52.27
143.5
530.84
4,245.05

2013
26.1
799.58

825.68

growth (15-20 percent) in 2012.

4 quarters ka
q1growth
of 2013-14
of 2012
11.90%
14.2
9.50%
16.40%
11.70%

at-will-drive-FMCG-growth-in-2013.html
10112900006_1.html
1qfy2014_performance_highlights_results_update_325202/
d-13934.cms

Interest 2012
Value
11.70% 0.06786
7.10% 1.95747
8.25% 33.50573
11.70% 0.02574
8.25%
0
35.5568

2011
0.76
23.68
0.87
406.13

11.70% 0.08892
7.10% 1.68128
8.25%
0
11.70% 0.10179
8.25% 33.50573
35.37772