A Journey that Enduring
VALUE …
TEAM MEMBERSTEAM MEMBERS
MANENDRA SHUKLA RAHUL JOSHI
RICHA SRIVASTAVASHIV BALAK GIRI
3
One of India’s Most One of India’s Most “Valuable”“Valuable”
CorporationCorporation
COMPANY PROFILE
• Chairman:- Y.C Deveshwar
• ITC was incorporated on August 24, 1910
• ITC- 'Imperial Tobacco Company of India Limited'.
• In the initial days it used to operate from a leased office on Radha Bazar Lane, Kolkata.
• IN 1928 headquarter building build, i.e, 'Virginia House' , Kolkata.
COMPANY PROFILE
• Full stop were removed and it become 'ITC Limited‘ on 21st September 2001.
• ITC capitalization- nearly US $ 15 billion
• Turnover- US $ 4.75 billion • Employee-21,000 people • Location-60 locations across India
• VISION: "Enduring Value for the nation & for the Shareholder”
1910
THE CHRONOLOGY OF SUCCESS BY
ITC was incorporated on August 24, 1910. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses
ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house.
1925
In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation
1975
In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India
1979
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since inception, its shares have been held by ITC, British American Tobacco and various independent shareholders in Nepal.
2002
In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal).
1985
In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry
1990
in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of India's largest exporters
1990
ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers
2000
In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards.
2000
A line of premium range of notebooks under brand “Paperkraft” was launched in 2002its offering and to reach a wider student population
2002
The popular range of notebooks was launched under brand “Classmate” in 2003. “Classmate” over the years has grown to become India’s largest notebook brand and has also increased its portfolio to occupy a greater share of the school bag
2003In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC Infotech is one of India’s fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers across key focus verticals - Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and Media & Entertainment.
2000ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000.The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players,
2000In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry
2006Years 2007- 2009 saw the launch of Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the “Classmate” brand. In 2008ITC repositioned the business as the Education and Stationery Products Business and launched India's first environment friendly premium business paper under the “Paperkraft” Brand. “Paperkraft” offers a diverse portfolio in the premium executive stationery and office consumables segment
2007-09Paperkraft entered new categories in the office
consumable segment with the launch of Textliners, Permanent Ink Markers and White Board Markers in 2009.
20092002
In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet
another expression in the Safety Matches initiative
2002
ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its
partnership with the cottage sector
ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men
and women in July 2005
2005Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively
2007Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008
200820032009……Recently Company has introduce another Series of Classmate, i.e “CLASSMATE-VICTOR” (a Geometry Box, MRP Rs. 45)
AND THE JOURNEY CONTINUES…..
BOARD OF DIRECTORS
CHAIRMANY C Deveshwar
Anup Singh
EXECUTIVE DIRECTORS
K Vaidyanath
NON-EXECUTIVE DIRECTORS
Anil Baijal R K Kaul S H Khan
S B Mathur D K Mehrotra H G Powell
P B Ramanujam Anthony Ruys Basudev Sen
B Vijayaraghavan
Chairman of the Board from January 1, 1996
Anup Singh-Director on the Board of ITC from November 21, 1997
K Vaidyanath-Director on the
Board of ITC from January
17, 2001
•ITC is rated among the World's Most Reputable Companies by Forbes magazine . ITC ranks among Asia's 50 best performing companies compiled by Business Week ITC is the first Indian company and the second in the world to win the prestigious Development Gateway Award ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility (Asia)' in 2007The Award for ‘CSR in Emerging Economies 2005’ and ‘Excellence in Corporate Governance' ITC Infotech finds pride of place among a select group of SEI CMM Level 5 companies in the world. The only Indian FMCG company to have featured in the Forbes 2000 list The NDTV Profit Business Leadership Award for being the Best Food Company of 2007
GLOBAL HONOURS
The ITC Vision
The ITC Mission
To enhance the wealth generating capability of
the enterprise in a globalizing environment, delivering superior and sustainable stakeholder
value
Sustain ITC's position as one of India's most valuable
corporations through world class performance, creating growing value for the Indian economy and the Company’s
stakeholders
10
ITC - Business Portfolio
ITC
HOTELSFMCG: Cigarettes
Other FMCG
Agri Business
Leaf TobaccoAgri
Commodities
Paperboard
Paper &Packaging
2 0 0 9HOTELS BUSINESS
FMCG: Cigarettes
Other FMCG
Agri Business
Leaf TobaccoAgri
Commodities
Paperboard
Paper &Packaging
When it comes to cigarettes, a brand name that would
instantaneously hit one’s mind would be
“Wills”.
ITC Welcomgroup was named the Best Premier Hotel
Brand at the Galileo-Express TravelWorld Awards 2008 & 2006. ITC WelcomHeritage
won the Best Heritage Hotel Brand award in 2006.
ITC's Agri Inputs business actively encourages the farming community to use judicious combination of organic
and chemical inputs towards Integrated Crop Management (ICM) for sustainable agriculture with focus
on productivity and quality.
ITC’s Paperboards and Specialty Papers Division is India’s largest and most technologically advanced paper and paperboards business.ITC’s Paperboards and Specialty papers business enjoys market leadership in the value-added paperboards segment, and also has a significant share of the Indian paperboards market. It is also the largest Indian exporter of coated boards
Other FMCG
Strategy of Organization (For managing diversity of Portfolio)
Formal 3-tiered Governance Structure :
Board of Directors: Comprising Executive (4) & Non-Executive Directors (11) Strategic Supervision
Corporate Management Committee: Comprising Executive Directors & Senior Managers Strategic Management
Divisional Chief Executive & Divisional Management Committee:
Executive Management
HUMANHUMAN
RESOURCES
THE SMALLEST SEED OF FAITH IS BETTER THAN THE LARGEST FRUIT OF HAPPINESS
HR practices of ITCPolicies of ITC• Policy on Human Rights
• Policy to ensure respect for human rights policy across the supply chain
• Policy to prevent discrimination at workplace
• Policy on freedom of association
• Policy prohibiting child labour and preventing forced labour and preventing forced labour from workplace
• Policy on information and consultation on changes
• HIV/ AIDS policy
Openness
Hard work
Meritocracy (completely professional work atmosphere)
Right balance between work and fun
Informal dress and vibrant weekends
Skip level feedback
Openness
Hard work
Meritocracy (completely professional work atmosphere)
Right balance between work and fun
Informal dress and vibrant weekends
Skip level feedback
WORK CULTURE OF ITC
EMPLOYEE BENEFIT SCHEME
Post retirement Non-Contributory Pension
Family Hospitalisation Assistance Scheme
Housing loan Assistance
Educational Assistance
Recreation Clubs
Subsidised Canteens
•Strategic Human Resource Management
•Sr. Management Committee & Management Framework
•Line Management Capacity for HRM
•Management Development
•Contracts
•Consultants
MANAGEMENT OF PEOPLE IN “ITC”MANAGEMENT OF PEOPLE IN “ITC”
Institutional Memory
ITC Field Presence
The Employment Cycle of ITC
Training and Development
Career & Succession Planning
Enhancing Staff Performance
Management Approach
•Policy
•Responsibility
•Management
•Training and Awareness
•Monitoring and Follow-Up
•Objectives
•Awards
•Context
Labour Practices & Decent Work Environment
•ITC Q1 net up 17.37% at Rs 879 Crore
•Net income rose to Rs 4,132.92 crore in the latest quarter, against Rs 3,934 crore in the same period last fiscal.
•ALTMAN’S Z-SCORE IS 3.17 WHICH IS GREATER THAN 2.99 i,e.
•NSE LAST TRADED PRICE ON 21st IS RS.228.95
•BSE LAST TRADED PRICE ON 21ST IS RS.228.90
“SAFE ZONE”
FINANCIAL GLOSSERY
POSITION OF THE COMPANY FROM 2006 TO 2009
SALES (IN CRORES)
YEAR AMOUNT
2009 15,582.73
2008 13,947.53
2007 12,369.30
2006 9,790.53
SALES REVENUE
0
2000
4000
6000
8000
10000
12000
TOTAL FMCG HOTELS AGRI-BUSINESS PAPERBOARDS,PAPER &
PACKAGING
SEGMENTWISE REVENUE
(IN CRORES)
2009 2008
A. FMCG- Cigarettes 7,557 6,635
- Others 3,050 2,510
TOTAL FMCG 10,607 9,145
B. HOTELS 985 1,012
C. AGRI-BUSINESS 3,896 3,868
D. PAPERBOARDS, PAPER & PACKAGING 2,697 2,158
TOTAL 18,185 16,183
LESS: Inter Segment Revenue 2,603 2,235
SALE 15,582 13,948
SEGMENTWISE REVENUE
Rs. (IN CRORES)
YEARTOTAL
ASSETS
2009 13,857
2008 12,216
2007 10,581
2006 9,122
TOTAL ASSETS
Rs.(IN CRORES)
YEAR PAT2009 3,1832008 2,9662007 2,6622006 2,259
PROFIT AFTER TAX
Rs. (IN CRORES)
YEARRESERVES
& SURPLUS
SHARE CAPITAL
2009 13,302 377
2008 11,624 377
2007 10,003 376
2006 8,626 375
SHAREHOLDER’S FUND
YearCURRENT ASSETS
CURRENT LIABILITIES
CURRENT RATIO
Rs (in crores)
2009 8,450 5,862 1.44
2008 7,306 5,265 1.39
2007 6,281 4,585 1.37
2006 5,228 4,126 1.27
CURRENT RATIO
YEAREPS (Rs.) DPS (RS.)
2009 8.65 3.70
2008 8.28 3.50
2007 7.18 3.10
2006 5.95 2.65
EARNING PER SHARE &
DIVIDEND PER SHARE
36.919,1223,3672006
37.8410,5814,0042007
36.2612,2164,4302008
35.5213,8584,9232009
ROI(%)CAPITAL
EMPLOYEDEBITYEAR
IN CRORE
RETURN ON INVESTMENT
POSITION OF ITC LTD. FROM-SEP O8’ TO AUG O9’ ON NSE
PROFIT & LOSS ACCOUNT(IN CRORES)
MAR' 09 MAR' 08 MAR' 07 MAR'06
INCOME:
OPERATING INCOME 14,985.81 14,032.20 12,313.83 9,798.33
EXPENSES:
MATERIAL CONSUMED 6,233.67 6,275.33 5,484.52 4,130.04
MANUFACTURING EXP 481.16 383.42 318.32 295.25
PERSONAL EXPENSES 903.37 745 630.15 541.4
SELLING EXPENSES 1,024.94 1,044.40 803.29 627
ADMINISTRATIVE EXP. 1,492.21 1,266.57 1,116.23 853.39
EXPENSES CAPITALISED -72.55 -112.75 -42.52 -15.78
COST OF SALES 10,062.80 9,601.97 8,309.99 6,431.30
OPERATING PROFIT 4,923.01 4,430.23 4,003.84 3,367.03
OTHER RECURRING ITEMS 422.8 479.82 300.14 273.22
ADJUSTED PBDIT 5,345.81 4,910.05 4,303.98 3,640.25
FINANCIAL EXPENSES 47.65 24.61 16.04 21.1
DEPRECIATION 549.41 438.46 362.92 332.34
OTHER WRITE-OFFS - - - -
ADJUSTED PBT 4,748.75 4,446.98 3,925.02 3,286.81
TAX CHARGES 1,565.13 1,480.97 1,263.07 1,027.57
ADJUSTED PAT 3,183.62 2,966.01 2,661.95 2,259.24
NON RECURRING ITEMS 2.42 36.68 -23.92 -70.02
OTHER NON-CASH ADJUSTMENTS 81.52 117.41 61.94 46.13
REPORTED NET PROFIT 3,267.56 3,120.10 2,699.97 2,235.35
EARNINGS BEFORE APPROPRIATION 3,992.01 3,767.63 3,262.03 2,846.76
EQUITY DIVIDEND 1,396.53 1,319.01 1,166.29 995.12
PREFERENCE DIVIDEND - - - -
DIVIDEND TAX 237.34 224.17 198.21 139.58
RETAINED EARNINGS 2,358.14 2,224.45 1,897.53 1,712.06
MAR' 09 MAR' 08 MAR' 07 MAR‘06
PROFIT & LOSS ACCOUNT (IN CRORES)
BALANCE SHEET(IN CRORES)
MAR' 09 MAR' 08 MAR' 07 MAR' 06
SOURCES OF FUNDS
OWNERS FUND:
EQUITY SHARE CAPITAL 377.44 376.86 376.22 375.52
SHARE APPLICATION MONEY - - - -
PREFERENCE SHARE CAPITAL - - - -
RESERVE AND SURPLUS 13,302.55 11,624.69 10,003.78 8,626.79
LOAN FUNDS:
SECURED LOANS 11.63 5.57 60.78 25.91
UNSECURED LOANS 165.92 208.86 140.1 93.82
TOTAL 13,857.54 12,215.98 10,580.88 9,122.04
FIXED ASSETS:
GROSS BLOCK 10,558.65 8,959.70 7,134.31 6,227.17
LESS: REVALUATION RESERVE 55.09 56.12 57.08 59.17
LESS: ACCUMULATED DEPRICIATION 3,286.74 2,790.87 2,389.54 2,065.44
NET BLOCKS 7,216.82 6,112.71 4,687.69 4,102.56
CAPITAL WORK-IN-PROGRESS 1,214.06 1,126.82 1,130.20 399.97
INVESTMENTS 2,837.75 2,934.55 3,067.77 3,517.01
NET CURRENT ASSETS:
CURRENT ASSETS, LOANS & ADVANCES 8,450.99 7,306.99 6,281.07 5,228.49
LESS: CURRENT LIABILITIES & PROVISION 5,862.08 5,265.09 4,585.85 4,125.99
TOTAL NET CURRENT ASSETS 2,588.91 2,041.90 1,695.22 1,102.50
MISC. EXPENSES NOT WRITTEN - - - -
TOTAL 13,857.54 12,215.98 10,580.88 9,122.04
BALANCE SHEET
MAR’09 MAR’08 MAR’07 MAR’06APPLICATION OF FUNDS
(IN CRORES)
MAR ' 09 MAR ' 08 MAR ' 07 MAR ' 06
LIQUIDITY RATIOS:
CURRENT RATIO 1.44 1.39 1.37 1.27
CURRENT RATIO (INC. ST. LOANS) 1.42 1.36 1.33 1.25
QUICK RATIO 0.60 0.56 0.58 0.57
INVENTRY TURNOVER RATIO 5.26 5.51 6.05 6.43
PROFITABILITY RATIOS:
OPERATING MARGIN(%) 32.85 31.57 32.51 34.36
GROSS PROFIT MARGIN(%) 29.18 28.44 29.56 30.97
NET PROFIT MARGIN(%) 21.18 21.5 21.4 22.19
REPORTED RETURN ON NET WORTH(%) 23.85 25.99 26.01 24.83
LEVERAGE RATIOS:
LONG TERM DEBT / EQUITY 0.01 0.01 0.01 0.01
TOTAL DEBT / EQUITY 0.44 0.46 0.46 0.47
OWNERS FUND AS % OF TOTAL SOURCE 98.71 98.24 98.1 98.68
FIXED ASSETS TURNOVER RATIO 1.44 1.59 1.75 1.59
RATIO ANALYSIS
MAR ' 09 MAR ' 08 MAR ' 07 MAR ' 06
PAYOUT RATIOS:
DIVIDEND PAYOUT RATIO (NET PROFIT) 50.06 49.45 50.53 50.76
DIVIDEND PAYOUT RATIO (CASH PROFIT) 42.84 43.36 44.54 44.19
EARNING RETAINTION RATIO 48.68 47.98 48.75 49.78
PER SHARE RATIOS:
REPORTED EPS (Rs.) 8.65 8.28 7.18 5.95
DIVIDEND PER SHARE (Rs.) 3.70 3.50 3.10 2.65
BOOK VALUE PER SHARE (Rs.) 36.24 31.85 27.59 23.97
RATIO ANALYSIS
MARKETING
ITC's Core Values are aimed at developing a customer-focused, high-performance organisation
Customer Focus:- We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction
ITC regards corporations as critical tools of social development, and considers public - private - people partnerships – bringing together community, government and business– as the only sustainable basis for social sector and infrastructure development.
Corporate Strategies Sustain multiple drivers of growth, matching internal capabilities
with emerging market opportunities
Pursue World class competitiveness in all businesses and across
the entire value chain
Best-in-class in terms of:
Internal Vitality
Market Standing
Profitability
Strategy of Organisation and Governance processes geared to
manage multiple businesses
Blend core competencies and leverage ITC umbrella strengths to
create new avenues of growth
Segmentation
Geographic:• Rural• Urban
Demographic:• Age• Gender• Occupation
Psychographic:• Lifestyle
Stars•Hotels•Paperboards / Packaging.•Agri business.
?•FMCG- Others
Cows•FMCG-Cigarettes
Dogs •ITC InfoTech.
BCG Matrix for ITC Ltd. M
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row
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Market Share
46
STRENTHSTRENTH ITC is a diversified company
ITC leveraged it traditional businesses to develop new brands for new segments.
For example:-
• ITC used its experience of transporting and
distributing tobacco products to remote and distant
parts of India to the advantage of its FMCG products.
ITC master chefs from its hotel chain are often asked to develop new food concepts for its FMCG business.
WEAKNESWEAKNESSS
The company's original business was traded in tobacco (the negative connection of tobacco with poor health and premature death. )
To fund its cash guzzling FMCG start-up, the company is
still dependant upon its tobacco revenues .
ITC is moving into new and emerging sectors including Information Technology, supporting business solutions
ITC leverages e-Choupal in a novel way . It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages
OPPORTUNITIEOPPORTUNITIESS
The obvious threat is from competition, both domestic and international.
Western companies will see India as an exciting opportunity for themselves to find new market segments for their own offerings.
THREATSTHREATS
Market Share of ITC Ltd.Outstanding market leader
Cigarettes, Hotels, Paperboards,Packaging and Agri-Exports.
Gaining market shareNascent businesses of Packaged Foods& Confectionery, Branded Apparel and
Greeting Cards.
Direct marketing:- Sign boards, posters at shops on point of sale
Delivery vans
Sales force
PROMOTION
7’S OF ITC
• STRATEGY• STRUCTURE• SYSTEM• STYLE• SKILLS• STAFF• SHARED VALUES
COMPETITOR ANALYSIS
The cigarette market in India has 3 players• Godfrey Phillips India (GPI), a Philip Morris affiliate,13%of market share• Vazir Sultan Tobacco (VST), a BAT affiliate, 13% of thetotal market share• Golden Tobacco Company (GTC) with 8% of the marketshare.
Domestic competitors• Kanhayya tobacco• MR tobacco• Sapna enterprises• Sudarshan tobacco
ITC still attains a gigantic market share of 66%
SPANCOP
• S:- Suspect who can buy our product
• P:- Prospect the chances and needs for which customers may buy the product
• A:- Approach the prospect with the USP’s of our product
• N:- Negotiate the deal for the product
• C:- Closing of deal
• O:- Get the order
• P:- Payment follow up
MARKETING STRATEGY BY
ITC is committed to delivering world-class products and services.
This requires a clear focus on continuously striving to create a higher value to customers by achieving excellence in all Company's operations.
Business excellence calls for a passionate focus on:-
•Technology• Products• Services• Processes • An operating environment firmly anchored to an impregnable foundation of Quality.
The Company's R&D team collaborates with other centres of excellence, and leverages expertise from several leading institutes
ITC R & D Centres are manned by highly qualified and trained scientists specialised in their fields. The labs and pilot plants have ultra modern,
state-of-the-art testing and prototyping facilities
e-Choupal is an initiative of ITC Limited to link directly with rural farmers for procurement of agricultural / aquaculture produce like soybeans, wheat, coffee, etc.
e-Choupal is distributed transaction platform that brings together sellers, buyers along with information and service providers.
e-Choupal is an ICT platform for carrying out trade at a number of
locations
ITC's globally recognised e-Choupal initiative is the world's largest rural digital infrastructure benefiting over 4 million farming families.
ITC's businesses generate livelihoods for over 5 million PEOPLE.
Evolving along with emerging changes
through efficient utilization of available
resources, thus maintaining sustainability
Acting proactively by enhancing
capabilities to fulfill the future needs.
MORALE OF THE STORY