nestle annual report

2. About the Company
▹ Nestle India Ltd is primarily involved in Food business which incorporates
product groups viz. Milk Products and Nutrition, Prepared dishes and
cooking aids, Powdered and Liquid Beverages and Confectioneries. The
market capitalization of Nestle India Ltd as on 31st Dec 2020 is at Rs.1773
Billion (US$24.3 billion).
▹ The Total Assets of the company stood at Rs.78,997 million
▹ The Total Equity of the company stood at Rs. 20,193 million
▹ The Net Income of the company is Rs.20,824 million
▹ The Operating Income of the company is Rs. 28,775 million
▹ The Total Revenue of the company is Rs. 1,34,958.8 million

3. Share Holding pattern

4. Management

5. Business Overview & Risk
 Despite a challenging environment, your Company delivered robust growth across all its
categories, largely driven by volume and mix-led growth. CERELAC,CEREALS,NESCAFÉ,
KITKAT, MILKYBAR,NESTEA, BOOST, EVERYDAY, MAGGI noodles, outperformed and
continued to be significant growth drivers. Your Company delivered strong performance in the
e-commerce channel, due to rise in in-home consumption. During the rapidly evolving times,
your Company continued with its innovation and renovation journey to meet consumer needs
and seven out of the eight Nestlé brands held number one position, according to Nielsen
data. With a strong thrust on innovation
 Company is proposing to invest ` 26 Billion over the next three to four years to augment its
existing manufacturing capacities, as well as towards its new under construction ‘state of the
art’ factory in Sanand, Gujarat, which demonstrates your Company’s commitment to India.

6.  Purina PetCare private limited is a subsidiary company of nestle having
a net worth of 1712 crores, headquarter in St. Louis, Missouri,
U.S.principal activity of Purina PetCare is packaged food for canines.
This is the first time nestle has entered an new business segment in India
on its own since entering the market in 1912..
 COMPETITORS
 Hershey’s, Cadbury, Kellogg, Starbucks

7. Risk
 Global and Macro-Economic Factors
 Global and macro-economic factors may lead to a impact in consumer demand and sharp inflation in
commodity prices could create risks. However, your Company’s consumer cluster based model, brings in
agility and allows it to adapt to changing consumer demand and realign portfolios. Your Company launched
more than 80 new products in the last 5 years out of which 10 new products were launched in 2020.
 Changes in Out-of-Home Consumption
 Changes in ‘Out-of-Home’ consumption, as a result of restricted mobility, impacted the business.
However, with gradual increase in mobility, the demand for Out-of-Home channels continues to
improve and your Company continued to launch innovative products and solutions.
 Information Technology Vulnerability
 As a result of COVID-19, the dependence on IT increased, substantially because of the remote
working conditions. However, excessive dependence on IT has also led to vulnerability to cyber
attacks. To address this your Company has a robust IT system and firewalls to mitigate any
threats and risks.

8. Financial Report of Nestle
 Here is a summary of financial information of NESTLE INDIA LIMITED
for the financial year ending on 31 December, 2020.
 Revenue / turnover of NESTLE INDIA LIMITED is Over INR 500 cr
 Net worth of the company has increased by 4.51 %
 EBITDA of the company has increased by 11.77 %
 Total assets of the company has increased by 11.92 %
 Liabilities of the company has increased by 16.07 %

9. Revenue and Profit
2020 2019 Change in
percentage
Revenue 1,34,958.80 1,26,157.80
Cost of Material 57,432.40 53,681
Depreciation 3,703 3,701.50
Financial exp 1,641.80 1,291.20
Other expense 29,043.40 28,167.47
Employee
benefits
15,009.50 12,581.70
Profit before tax 28130.90 26736.83
Tax 7303.60 7,050.50
Profit after tax 20,824.30 19,684.40

10. Net Worth & Debt Equity Ratio
▹ Net worth is the total wealth of the company ,taking account of all the
financial assets and liabilities.
▹ Net worth = Equity share capital + other Equity
=₹964.2 + ₹19,229.2 = ₹20193.4
▹ Debt Equity Ratio
▹ The debt-equity ratio is a measure of the relative contribution of the creditors
and shareholders or owners in the capital employed in business.
▹ Debt equity ratio = Total liabilities / Shareholders fund
▹ 78,997.3 / 20193.4 = 3.91

11. Net Working Capital Cycle & Cash Ratio
Turnover Ratio Average/Day
Debtor 82 4
Inventories 10 38
Payables 4 99
 The working Capital cycle is negative
Cash Ratio
 The ratio of Current assets to Current Liabilities
 Cash and bank + Current investment / current liabilities
 24928.1/24925.5 = 1.00

12. Market value : Book Value
 Market value is the company’s worth based on the total value of its
outstanding shares in the market.
 Book value is the net value of a firms assets found on balance sheet
of the company
 MV:BV = Market value per share / Book value per share
 123.66 / 209.44
 = 0.59

13. EPS and Sector PE
 EPS
 Earnings per share (EPS) is a company's net profit divided by the
number of common shares it has outstanding.
 EPS = ₹ 216
 Sector PE
 Sector PE is the average price-to-earning ratio of a particular sector
or industry.
 = 73.99

14. PE Ratio
 PE Ratio is the ratio for valuing a company that measures its current
share price relative to its earnings per share.
 PE Ratio = Market price per share / Earning per share
 = 19,142/216 =88.62

15. Cash flow analysis
 A Cash flow from operating activities
Profit before tax 28,127.90
Adjustment for:
Depreciation 3,703.8
Deficit/(Surplus) (49.0)
Other income (1458.5)
Interest on bank overdraft 180.4
Interest on lease liabilities 85.0
Allowance 6.0
Unrealized exchange difference 12.6
Operating profit before working capital changes 30,608.2

16.  Adjustment for working capital changes:
Decrease / (increase) in trade receivable (416.0)
Decrease/ (increase) in inventories (1,334.1)
Decrease/ (increase) in loans other financial assets (109.7)
Increase / (Decrease) trade payable 225.6
Increase / (Decrease) in other financial liabilities 412.0
Increase /(Decrease) in provision for contingencies 114.3
Increase /(Decrease) in provision for employee benefit 2073.4
Cash generated from operation 31573.7
Income tax paid (7028.9)
Net cash Generated from Operating activities 24,544.8

17. B Cash flow from Investing activities
Purchase of Property Plant and equipment (4783.6)
Sales of property plant and equipment 42.4
Decrease/(Increase) in loans to employees 29.1
Income from mutual funds 20.4
Loan given to related parties (350.0)
Loan repaid by related parties 350.0
Interest received on bank deposit 1,477.1
Net cash (used in) investing activities (3,214.6)

18. C Cash flow from Financial activities
Increase in deferred VAT liabilities 30.8
Interest on bank overdraft (5.4)
Interest on lease liabilities (85.0)
Principal payment on lease liabilities (601.8)
Dividends (18,897.5)
Net Cash used in financing activities (19,558.5)
Net increase in cash and cash equivalent (A + B + C) 1,771.3