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Submitted To:
Pranjal Upadhyay
MMS A Roll No. 60
Table of Contents
Sector Analysis ........................................................................................................................................ 3 Notices .................................................................................................................................................... 5 JFL List of Directors ................................................................................................................................. 6 Management Discussions and Analysis .................................................................................................. 9 Directors Report................................................................................................................................... 11 Corporate Governance Report.............................................................................................................. 13 Auditors Report .................................................................................................................................... 15
Sector Analysis
The Indian Fast Food Market is one of the fastest growing markets all across the globe. Every year we can see a steady rise in the Fast Food Market in India which bank upon both Indian and Foreign Investors. The Indian Fast Food Market is growing at a rapid rate of around 30-35% per annum. There are number of foreign fast food chains which are aggressively targeting the Indian consumers. They collect enough local information before entering the local market and starts targeting there specific market right from the word go. Relaxation in the rules of FDI was supposed to be the big step to bring in the foreign Investor in big numbers but some poor government policies and poor market conditions didnt supported the cause. Two of the most popular Fast Food joints in Indian are 1. MacDonalds 2. Dominos Pizza The Market shares of the various Fast food Joints in world markets is shown below
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The stakes in Indian Markets are high, with India's quick-service restaurant market worth $13 billion. According to the Indian Food Service Report 2013 given by NRAI thats the National Restaurants Association of India, Indian Fast Food Industry which in current state is estimated to be of worth Rs 2, 47,680 crore is expected to touch Rs 4,08,040 crore by the year 2018. 700 million people or about 60 percent of Indias population are under the age of 30 are the prime targets for fast-food in India. The youth are more attracted towards Burgers then a normal vada sambhar at a restaurant which is time consuming. The other foreign fast food chain which planned to enter the Indian market last year was Dunkins Donuts. The brand launched their product in the market partnering with the major Fast Food operator Jubilant Foodworks Ltd that provides Dominos Pizza chain in India. According to the analysts in a country like India the affordable Menus play a vital role as incomes in this part of the world are comparatively low by global standards and lunch are even available at a cost as low as 50 U.S. cents on street stalls. Jubilant Foodworks is majorly known as the Pizza dominated fast food chain. The Pizza market in India is majorly controlled by the Dominos Pizza whereas on a global level there are many other big players as shown by the fig below:-
Yum brand is next big thing in the Indian Market and they are ready to invest in big numbers by launching more than 100 stores in the next year. Pizzeria plans to enter the Indian Market next year and in this case the Indian Market will be more tough to compete with but in either cases the customers or the consumers will be at all gains.
Notices
Minor Issues The Balance Sheet as at 31st March 2013 will be adopted and the Statement of Profit and Loss for the year ended and the Reports given by the Directors and the Auditors will also be considered and adopted. Mr. Shyam S. Bhartia the current Director, who retires as per the rotation policy seeks Re-appointment, so a decision on the same will be taken. Mr. Phiroz Vandrevala current Director, who retires as per the rotation policy seeks Re-appointment, so a decision on the same will be taken. Fixing of remuneration recommended by the Audit Committee and fixed by the Board for the Statuary Auditors and re-appointment of the M/s S. R Batliboi. Major Issues To consider passing a special Resolution if found fit, with or without modifications. Pursuant to SEBI guidelines and all other applicable law, the company hereby accords for modification of the JFL Employees Stock Option Scheme 2011 by substituting clause 3.40 & 3.41 in the following manner: According to clause 3.40 Trust means JFL Employees Welfare Trust for purposes like subscription of shares from the company or acquiring shares of the company under SEBI guidelines, for transferring and holding of shares in the manner specified in the Trust Deeds to Participants. According to clause 3.41 Trust Deed means the Deeds of private trust between the trustee(s) and the company, for welfare of the employees by creation of JFL Employees Welfare Trust, for transferring and holding of shares in the manner specified in the Trust Deeds to Participants. There are certain notes given in the notice: The members who are unable to attend the General Meeting can appoint a poll to attend and poll instead of him. The Proxy form needs to be submitted at the registered office 48 hours before the meeting starts. Members who hold equality shares in electronic mode should provide there proxy with their Client ID and DP ID number and for those who have equality shares in physical should write their folio number in the attendance slip. Corporate Members need to send a copy of power of Attorney in case they are sending their representatives to attend and vote. If theres any change in address of the member holding the shares in physical form then he/she needs to inform the company. According to the Ministry of Corporate Affairs (MCA) circular no. 17/2011 issued on 21st April 2011 propagating Green Initiative by allowing e-mails or paperless compliances by companies. At JFL the Green Initiative is always given importance.
The rise in GDP will help RBI lower the interest rates for lending and also attract new business to the country.
2. Industry Overview
The ongoing challenges in the Indian Market have impacted sectors like Infrastructure, manufacturing etc but the Indian Food Service Industry (FSI) remains undeterred and continues to grow rapidly. The size of FSI scaled to 75,000 Crore in 2012 from 53,000 Crore in 2010 and is further expected to touch 1, 37,000 Crore with next 2 years. Despite all the growth momentum a strong pressure was felt on the same store sales due to the market slowdown in the country.
Fine and Casual Dinning 30% Organised Format Indian Food Service Industry 70% Unorganised Sector Take Away, Home delivery- Quick Service Restaurant(QPR) Roadside eateries, Street stalls, Trolleys, Dhabas
3. Growth Drivers
The domestic FSI growth continues to be pushed forward by drivers working synergistically and cohesively. On demand side, the market is being influenced by the expanding consumer base and increase in the family disposable income. On supply side, a surge in the number of brands entering the market to tap the present opportunities is changing the current market scenario.
4. Business Overview
Jubilant FoodWorks Ltd. (JFL) - a Jubilant Bhartia Group company, along with its subsidiary, manages the Dominos Pizza brand with exclusive rights for India, Bangladesh, Nepal and Srilanka. As Indias largest and fastest growing food service company, Dominos Pizza India enjoys a dominant 62% share in the organised pizza market and more than 70% share in the pizza home delivery segment countrywide. The JFL Companys leadership position is evident from the facts and numbers it sells nearly 66 Lakh pizzas a month across its network of 576 pizza stores across 123 cities in India; the top 10 Stores in the world by the number of pizzas sold in a year are of Dominos Pizza India; Domino's Pizza's 30-minute home delivery promise has a success rate of roughly 99%.
5. Business Strengths
Both brands of the Company - Dominos Pizza and Dunkin Donuts - enjoy a very strong brand legacy. Founded way back in 1960, Dominos Pizza is a well recognised global pizza Delivery brand. The Companys roll-out of the Dunkin Donuts brand has helped it build a very balanced and complementary portfolio of brands for the Indian consumers. The Company is Cognisant of the industry dynamics and believes that there is tremendous potential to grow and achieve. With the established brand pedigrees, the Company is well poised to benefit from the Opportunities in the fast growing Indian QSR market.
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Directors Report
According to the Directors report the Company has been growing in numbers in the financial year 2013. The Companys total incomes yields a growth of 38%, and stood at 14,153 Million. The Profit before Interest, Tax and Depreciation increased from 1,922 Million in FY 2012 to 2,522 Million in FY 2013, registering a growth of 31%. The net profit registered a growth of 28% to 1,351 Million in FY 2013 from 1,056 Million in FY 2012. Dividend The Company has got some expansion plans and keeping in view, the requirement of Capital, the Board has not recommended any dividend. Operational Performance The steady growth continued in the FY 2013, hallmarked by customer focussed innovation combined with both the powerful brands. Both the brands Dominos Pizza and Dunkin Donuts have made their priority to understand their consumers; this is one of the prime reasons of the growth and success that the company is seeing. Dominos Pizza During FY 2013, 111 new stores were added to the Dominos network as they entered into 18 new cities. Dominos pizza store count at the end of the year st ood at 576 stores across 123 cities. During FY 2013, a Same Store Sales (SSS) growth of 16.2% was delivered by the company. A significant milestone was achieved when Dominos Pizza open its 500 th store in New Delhi. During FY 2013, the new product offerings included Taco Indiana, Potato Smackers, Spicy Twistyz and Cheesy Boloroni Pizza. The emotional proposition described as happiness Home delivered Khushiyon ki Home Delivery has been changed after four years and in its endeavour to deepen the bonding and engagement with consumers, a new brand positioning Yeh Hai Rishton Ka Time was launched. Dunkin Donuts By the end of the FY 20013, there were a total of 10 restaurants in India, 9 of them are in Delhi NCR area and 1 in Chandigarh. The consumer response has been phenomenal and the company is planning to expand by rolling out strategy to attract more and more consumers. The company offered Dunkin Donuts Diwali Gift packs at the time of Diwali and Dunkin Donuts winter blast wherein new varieties were offered to the consumers.
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Share Capital During the FY 2013, Under the Employees Stock Option Plan, 2007, the company issued 10/each of 198,560 Equity Shares and Under JFL Employees Stock Option Scheme,2011, the company issued 10/- each of 6,890 Equity shares. The two resulting in taking the number of issued, subscribed and paid-up equity share capital to 65,283,390 at 31st march 2013 from 65,077,940 equity shares on 31st march 2012. Human Resource Management In order to run a successful organisation, the leaders need to have a high performing team which exhibit cohesiveness and collaboration. A lot of programs such as Coaching Skills and Finance for non Finance have been performed to train people for different level of jobs. Performance Management for People Managers and Leadership Skills for middle and senior management have ensured creation of future leaders of the organisation. The Company aims at providing the employees with the latest technologies in order to make their work easier and faster like the implementation of Touch Screen Training PCs which have been launched at around 250 stores and the launch of Learning Management System online which helps in training, collaborative learning on a scalable web based platform. Employees Stock Option Schemes The Company has got 2 different Employees Stock Option Schemes in operation at present: 1. Employees Stock Option Plan (ESOP), 2007 2. JFL Employees Stock Option Scheme (ESOS), 2011 Both the Employees stock Option Schemes are administered and monitored by the Compensation Committee of the Company.
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These committees enable the company to have a more focussed attention on each diversified matter. The Companys corporate philosophy follows the SEBI code and guidelines to prevent Insider trading. To maintain utmost transparency a Whistle Blower Policy is established. The establishment of such Policy helps in maintaining a neutral and unbiased forum for both Indian and foreign partners and employees to voice their concern in a better manner without fear of getting fired. The company has a strong focus on retaining and nurturing the best available talent in the organisation. There are different plans and schemes established to award the best employees in both junior and senior executive levels. The company maintains a regular communication with their employees and stakeholders, including e-mailing and messaging of financial performance, in order to maintain a trust and confidence level in the employees and shareholders.
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FIIs 42%
Indian Public 2%
The Share Holding Pattern has been shown above which shows that 54% of the companys shares belong to the Promoters and Promoters group. The next major share that of 42% which the company posses is that of the FIIs. The Indian Public and the Corporate Bodies posses each of 2% shares in the company.
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Auditors Report
Report on Financial Statement
The auditors have audited the Financial Statements of Jubilant Foodworks Ltd which comprises the Balance sheet for the FY 2013 and also the Profit and Loss statement for the year end. This information will be attached with a summary of important accounting policies and other desired information.
Auditors Responsibility
The auditors responsibility is to give their views on the Financial Statements based on their audit. The auditors while auditing the report had worked accordance to the Accounting Standards.
Auditors Opinion
According to the auditors, they have prepared the report with reference to the explanation given to them by the company. The information is so presented that it provides a fair and true view with the accounting standards generally accepted in India: The Balance Sheet of the state of affairs at 31st march 2013. The P/L statement of the company and profit for the year on the last date. The cash flow statements of the company and cash flow for the year on that date.
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References
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