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  • ITC LimitedOne of India’s Most Admired Companies 1
  • Performance Track Record - Snapshot Rs crores Cagr 95-96 Rs Crs 95-96 09-10 to 09-10 Gross Turnover 5115 26,260 12.4% Net Turnover 2536 18,153 15.1% Market Capitalisation 5571 100,475 22.9% PBDIT 584 6,677 19.0% PBIT 536 6,069 18.9% PBT 452 6,015 20.3% PAT (After Exceptional Items) 261 4,061 21.7% EPS Rs (Equalised for 95-96) 0.7 10.73 21.4% Net Worth 1121 14,064 19.8% Capital Employed 1886 14,957 15.9% ROCE% 28.4 40.6 Total Shareholders Returns % 24.3%Rs. 1 crore= Rs. 10 million 2
  • ITC - Key Financials – 2009/10 09/10 08/09 Rs crs Goly % Actuals ActualsGross Turnover External 26260 23144 13.5Net Turnover External 18153 15612 16.3PBDIT 6677 5393 23.8PBIT 6069 4844 25.3PBT 6015 4826 24.7PAT 4061 3264 24.4
  • 2009/10: Segment Revenues Full Year 2009-10 2008-09 Goly1. Segment Revenue (Gross) a) FMCG - Cigarettes 17,283 15,115 14.3 - Others 3,642 3,014 20.8 Total FMCG 20,925 18,129 15.4 b) Hotels 911 1,020 (10.7) c) Agri Business 3,862 3,846 0.4 d) Paperboards, Paper & Packaging 3,234 2,822 14.6 Total 28,931 25,817 12.1 Less : Inter segment revenue 2,672 2,674 (0.1)Gross sales / income from operns. 26,260 23,144 13.5 2009-10 2008-09 Goly2. Segment Revenue (Net) a) FMCG - Cigarettes 9,321 7,781 19.8 - Others 3,634 3,006 20.9 Total FMCG 12,955 10,786 20.1 b) Hotels 851 935 (9.1) c) Agri Business 3,862 3,846 0.4 d) Paperboards, Paper & Packaging 3,108 2,647 17.4 Total 20,776 18,215 14.1 Less : Inter segment revenue 2,622 2,603 0.8Net sales / income from operns. 18,153 15,612 16.3
  • 2009/10: Segment Results Full Year 2009-10 2008-09 Goly3. Segment Results a) FMCG - Cigarettes 4,938 4,184 18.0 - Others (350) (483) 27.7 Total FMCG 4,589 3,700 24.0 b) Hotels 217 316 (31.5) c) Agri Business 436 256 70.3 d) Paperboards, Paper & Packaging 684 509 34.5 Total 5,926 4,781 23.9 Less : i) Interest (Net) 53 18 191.2 ii) Other net un-allocable expenditure/ income (143) (63) 127.6Total PBT 6,015 4,826 24.7
  • 2009/10: Segment Capital Employed Full Year 2009-10 2008-09 Goly4. Capital Employed a) FMCG - Cigarettes * 2,998 2,936 2.1 - Others 1,719 2,101 (18.2) Total FMCG 4,717 5,037 (6.4) b) Hotels 2,457 2,189 12.3 c) Agri Business 1,580 1,039 52.1 d) Paperboards, Paper & Packaging 3,711 3,771 (1.6)Total Segment Capital Employed 12,465 12,035 3.6* Local Tax Provision not incl. 628.64 542.86 15.8
  • ITC - Key Financials – Q1 2010/11 Q1 10/11 Q1 09/10 Rs Crs Goly % Actuals ActualsGross Turnover External 7043 6131 14.9Net Turnover External 4817 4148 16.1PBDIT 1736 1475 17.7PBIT 1576 1323 19.1PBT 1570 1317 19.2PAT 1070 879 21.8
  • Q1 2010/11: Segment Revenues Rs. crores Q1 2010-11 2009-10 Goly(%)1. Segment Revenue (Gross) a) FMCG - Cigarettes 4670 4161 12.2 - Others 1006 759 32.4 Total FMCG 5675 4920 15.4 b) Hotels 225 186 21.2 c) Agri Business 1350 941 43.5 d) Paperboards, Paper & Packaging 829 731 13.5 Total 8079 6777 19.2 Less : Inter segment revenue 1036 646 60.4Gross sales / income from operns. 7043 6131 14.9 2010-11 2009-10 Goly(%)2. Segment Revenue (Net) a) FMCG - Cigarettes 2484 2210 12.4 - Others 1001 758 32.2 Total FMCG 3485 2968 17.4 b) Hotels 210 173 21.5 c) Agri Business 1350 941 43.5 d) Paperboards, Paper & Packaging 794 703 13.0 Total 5838 4784 22.0 Less : Inter segment revenue 1022 636 60.6Net sales / income from operns. 4817 4148 16.1
  • Q1 2010/11: Segment Results Q1 2010-11 2009-10 Goly(%)Segment Results a) FMCG - Cigarettes 1305 1125 16.0 - Others (89) (100) 10.5 Total FMCG 1216 1026 18.5 b) Hotels 39 31 25.9 c) Agri Business 123 100 23.2 d) Paperboards, Paper & Packaging 188 128 47.5 Total 1566 1284 22.0 Less : i) Interest (Net) 6 6 (0.7) ii) Other net un-allocable expenditure/ income (10) (39) (74.4)Total PBT 1570 1317 19.2
  • Segment Capital Employed Q1 2010-11 2009-10 Goly(%)4. Capital Employed a) FMCG - Cigarettes * 3032 2632 15.2 - Others 1888 1929 (2.1) Total FMCG 4920 4561 7.9 b) Hotels 2511 2272 10.5 c) Agri Business 1441 1389 3.7 d) Paperboards, Paper & Packaging 3636 3707 (1.9)Total Segment Capital Employed 12507 11930 4.8* Local Tax Provision not incl. 657 554 18.6
  • ITCOne of India’s most valuable and admired companies One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004  Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 5 bln. & are rated as the ‘most attractive companies for investors’ Only Indian FMCG Company to feature in Forbes 2000 List  A comprehensive ranking of world’s biggest companies measured by a composite of sales, profits, assets & market value One of the foremost in the private sector in terms of :  Sustained value creation (BT-Stern Stewart survey)  Operating profits  Cash Profits Ranks No. 4 among Indian listed Private Sector Companies by market cap. • No. 1 in FMCG Sector Rated as one of India’s Most Respected Companies (IMRB-Businessworld Survey 2006) 11
  • Awards & Accolades (1)• ‘ITC received the FICCI Outstanding Vision Corporate Triple Impact Award 2007 for invaluable contribution to the triple bottom line benchmarks of building economic, social and natural capital for the nation.• Global Leadership Award conferred on Chairman Y C Deveshwar by the US India Business Council of the US Chamber of Commerce• Sustainability Leadership Award 2007 conferred on Chairman Y C Deveshwar by the Sustainability Forum, Zurich and SAM/SPG at the International Sustainability Leadership Symposium• Business Today Award for the Best Managed Company – Retail and Consumer Products, has been conferred on ITC in recognition of its outstanding initiatives in the consumer products segment.• Ryutaro Hashimoto Incentive Prize 2007 for Environment & Development from the Asia Pacific Forum• In the first of its kind S&P Environmental, Social and Corporate Governance (ESG) ratings released recently, ITC ranked second among top Indian companies.• The Company has won the Corporate Social Responsibility Crown Award for Water Practices from UNESCO and Water Digest for its distinguished work carried out in the water sector in India.• ITC Limited won the top UNIDO award at the International Conference on Sharing Innovative Agribusiness Solutions 2008 at Cairo in recognition for its initiatives in agri business.• ITC has been conferred the ICAI Award for Excellence in Financial Reporting with its Annual Report and Accounts, adjudged as a commendable entry under the “Manufacturing and Trading Enterprises” category.• The Best Corporate Social Responsibility Practice Award 2008 jointly instituted by the Bombay Stock Exchange, Times Foundation and the NASSCOM Foundation. 12
  • Accolades & Awards (2)• e-Choupal initiative wins global recognition: – Stockholm Challenge Award 2006 in the Economic Development category which recognises initiatives that leverage Information Technology to improve living conditions and foster economic growth in all parts of the world. – First Indian Company to win the Development Gateway Award 2005 for the most exemplary contribution in the field of Information & Communication Technologies (ICT) for development during the last 10 years – World Business Award 2004: International Chamber of Commerce & the HRH Prince of Wales & International Business forum – Harvard University case study – Recognised in World Development Report 2008 published by World Bank – Applauded by President of India Dr APJ Kalam in his “special address during the national symposium to commemorate 60th year of independence” 13
  • ITC Business Portfolio FMCGCigarettes Foods Personal Care Lifestyle Retailing , Education & Stationery Matches Incense Sticks Paper & Agri Information Hotels Packaging Technology Business
  • Strategy of Organisation to manage diversity of PortfolioFormal 3-tiered governance structure: Board of Directors :  Comprising executive (3) and non-executive directors (11)  Strategic supervision Corporate Management Committee :  Comprising executive directors and senior managers  Strategic management Divisional Chief Executive & Divisional Management Committee :  Executive management 15
  • 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 16
  • FMCG - Cigarettes 17
  • ITC’s Cigarettes Business Market leadership Powerful brands across segments Leadership in all segments - geographic & price Extensive FMCG distribution network  Direct servicing of 1,00,000 markets & 2 million retail outlets World-class state-of-the-art technology and products  Investment - Rs.10 billion in six years Exciting long term growth potential 18
  • Cigarettes: Growth potential Cigarettes account for less than 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation • Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sector Of the 58% of adult Indian males who consume tobacco, barely 15% can afford cigarettes Biri : Cigarettes ratio = 10 : 1 Annual per capita adult cigarette consumption in India is appx. one tenth world average : 85 Future growth depends on relative rates of growth of per capita income and moderation in taxes 19
  • Per Capita Consumption of Tobacco in India (gms per year) 12561145 743 438 461 468China USA Pakistan Nepal India WorldSource:World Cigarettes – ERC Statistics, Tob Board & Industry Estimates – gms/Yr Per Capita consumption is ~ 60% of World Average
  • 2920 Per Capita Cigarette Consumption 3000 2500 2000 1886 1771 1500 1000 844OCN 618agoerstfi 488 500 303 243 85 0 A U S d n a I N C i p a n h e a n p a J l i W d o r l A g a v r e P n k a s t i L k n S a r i Countries B h d n g a e s l  Per Capita consumption in India ~ 10% of World average 21
  • Cigarettes: Challenges Competitive context • Competition including international majors becoming more active • Domestic illegal volumes still very strong. Along with smuggled contraband, has emerged as substantive segment Regulatory & Taxation • Pictorial Graphic warnings in place w.e.f. June 09. • VAT hikes in Maharashtra, Delhi, Rajasthan & Pondicherry- threatening the concept of the ‘Indian Common Market’ Cost table increasing with increase in leaf costs 22
  • Hotels & Tourism 23
  • Hotels & Tourism industry Foreign arrivals into India: 5 million appx. Vs. 35 million in China • The two nations were on par 2 decades ago at 750,000 arrivals Today, Beijing alone has as many hotel rooms as the whole of India India’s luxury rooms availability lower than even smaller East Asian countries 80000 70000 60000 50000 40000 30000 20000 10000 0 HongKong Bangkok Singapore Malaysia India Source: Compendium of Tourism statistics, WTO 24
  • Indian Hotel Industry Current supply – appx. 110,000 rooms of which 5 Star category accounts for appx. 30% India needs an additional 50,000 rooms in the next 2/3 years to service projected tourist arrivals Present mismatch between supply and demand expected to persist over the short term As infrastructure for trade & commerce improves - growing potential for leisure tourism 25
  • ITC’s Hotel Business ITC-Welcomgroup : a leading hotel chain in India • Established presence in key business locations • Over 6000 rooms under 4 distinct brands Category Brand Positioning Luxury ITC Hotel: Luxury Collection "Mansions of Luxury" Upper upscale WelcomHotel: Sheraton "Passion for Quality" Upscale - mid-scale Fortune Hotels "Promise of True Value" Heritage WelcomHeritage "Unique Experiences" Bangalore 292 room luxury hotel launched in October ‘09 Capacity expansion underway at Chennai & Kolkata; plans for other locations also being progressed. Fastest growing hotel chain with highest operating efficiency (PBDIT/Net Income @ 40%) amongst the 3 leading chains Leverages unique service proposition and international alliance with Starwood Hotels & Resorts - ‘Luxury Collection’ / ‘Sheraton’ 26
  • ITC’s Hotel Business• Manages 34 full service mid-market properties (2000 + rooms ) under the Fortune Hotels brand – 21 more hotels in pipeline; room inventory- 4800 appx. – 100% subsidiary company : Fortune Park Hotels Ltd.• Also operates 60 properties under the ‘WelcomHeritage’ brand in 19 states - Maharaja Heritage Resorts Ltd. 50% JV with Marudhar Hotels (P) Ltd. 27
  • Paperboards, Paper & Packaging 28
  • Indian paperboard market Annual paperboard demand – appx. 2 million tonnes Fragmented capacity & obsolete technology Low per capita usage at around 7 kgs p.a. (world average – over 55 kgs p.a.) Indian paperboard market growing at 7% p.a. Value Added Coated board - the fastest growing segment (15% p.a.) in India driven by the growing sophistication of the consumer 29
  • ITC’s Paperboards Business Market leader in growth segment - value added coated boards World-class contemporary technology • Ozone bleached Pulp Mill fully operational – only one of its kind in Asia meeting world-class environmental standards Internationally competitive quality and cost Social farm forestry in mill command area to improve access to cost effective fibre & to attain self-sufficiency • Biotech research based high yielding Clones – effectiveness tested in > 1,00,000 hectares Fully integrated operations with in-house pulping capacity at appx. 2.80 lac MT 30
  • ITC’s Paperboards & Packaging businesses Capacity expansion projects installed – at optimum capacity utilization • 120000 TPA Pulp Mill – Machine stabilised • 100000 TPA paper machine (to support Education & Stationery business growth plans) Machine stabilized • Investment in 100,000 TPA paperboards machine underway ITC’s packaging SBU -India’s largest converter of paperboard into high quality printed packaging • Leading supplier to Indian FMCG and Consumer Electronic segments • Provides superior packaging solutions to the cigarettes and new FMCG businesses 31
  • Agri Businesses - Leaf Tobacco- Agri Commodities 32
  • Indian Leaf Tobacco industry India – the third largest producer of tobacco However, India’s share is only 7% in world tobacco trade Upgradation of tobacco consumption from other formats to cigarettes will enable: • growing domestic base & larger opportunities for value added exports ITC – India’s largest buyer, processor, consumer & exporter of cigarette tobaccos  6th largest leaf tobacco exporter in the world Pioneering cultivation of flavourful Flue-cured, superior Burley and Oriental tobaccos in India Export business - robust growth in export volumes with improvement in realization over the last 2 years 33
  • ITC’s Agri Commodity Business Farm linkages in 14 states covering Soya, Wheat, Marine products, Coffee etc. Focus on value added agri commodities Unique CRM programme in commodity exports Leveraging IT for the transformational ‘e-Choupal’ initiative • Rural India’s largest Internet-based intervention • Over 40000 villages linked through around 6500 e-Choupals servicing over 3.5 million farmers Distinctive sourcing capability for ITC’s Foods business 34
  • e-choupal: Strategic Thrust Procurement: cost & quality optimisation • strategic sourcing support to the Foods business (support creation of verticals in wheat, soya, corn, potato etc.) • cost-effective sourcing for exports/domestic external business Rural Distribution • ‘last mile connectivity’: 100 partnering companies • diverse range of goods/services: FMCG, consumer durables, agri-inputs, paid extension services etc. Financial Services • insurance (focus: weather) • credit (focus: Kisan Credit Card scheme) Rural retail • 24 Choupal Saagars operational 35
  • Future Growth & Value Capture New FMCG Initiatives 36
  • Strategic Rationale Blend multiple competencies residing within the ITC Group to create new avenues of growth Best fit between internal capabilities and emerging market opportunities Each segment enhances the depth and width of ITC’s FMCG distribution capability Business model retains critical elements of value chains within ITC with other elements outsourced • Contributing to the competitiveness of SMEs 37
  • Branded Packaged Foods Leverages: • Unique Agri sourcing skills • ITC Welcomgroup’s specialist cuisine & bakery knowledge • FMCG distribution synergies • ITC R&D Centre, Bangalore 5 chosen categories: • Staples – Aashirvaad Atta, Salt, Spices • Biscuits – Sunfeast • Salty Snacks – Potato chips, Bridge products : Bingo! • Confectionery – Candyman, mint-o • Ready to Eat – Kitchens of India (Ready to Eat, Conserves & Chutneys and Frozen Foods), Aashirvaad (Instant Mixes & Cooking Pastes), Sunfeast Pasta 38
  • Branded Packaged Foods• Aashirvaad Atta: – Current market leader amongst national branded players; leverages the e- choupal network for cost-quality optimisation and region specific offerings• Sunfeast Biscuits: – Differentiated & innovative products; continues to build consumer franchise; distributed & outsourced supply chain being ramped up – Targeted cost management actions shore up margins• Number of innovative products in the pipeline leveraging the capabilities of the ITC R&D Centre 39
  • Lifestyle Retailing Leverages trade mark and services expertise of hotels Relaxed wear market growth > 20% p.a Upmarket product range available in exclusive Wills Lifestyle stores (56) and multi-branded outlets/ large format retail stores across the country • Premium segment comprising the ‘Classic’ range of formal wear, ‘Wills Sport’ relaxed wear and ‘Wills Clublife’ evening wear • Designer association with leading Indian designers – ‘Wills Signature’ line• Strong distribution network in place for the mid-market brand ‘John Players’• availability in 225 Exclusive Branded outlets, 200 multi branded outlets and departmental stores• Wills Lifestyle rated amongst the top 5 Luxury brands in the country (Global Luxury Survey conducted by TIME Magazine) 40
  • Education & Stationery Products Business Leverages print and paper know-how. Forward linkages with new paper capacity (already commissioned). An emerging (currently Rs 9000 cr stationery) market in India - growth driven by increasing cross-cultural exposure, govt. spending on education • Mostly commoditized. Offers opportunity for branding Robust distribution network in place to scale up the Stationery business significantly • ‘Classmate’ brand already the most widely distributed brand in India. Scholastic products launched • Branded Copier Paper ‘Paperkraft’ footprint being enhanced. Enthusiastic customer response based on green credentials. Comprehensive portfolio approach with new variant/category launches 41
  • Safety Matches Current industry consumer spend estimated at Rs. 1250 crores p.a. for 24 billion match boxes Fragmented supply base arising from policy of reservation for small scale industry Mass market moving from 0.50 p price point to Re 1.00. ITC markets its brands with value added products across each price point • Support SMEs with complementary marketing strengths ‘AIM’ – India’s largest selling Safety Matches brand Successful acquisition of WIMCO Ltd. by Russell Credit • Key brands: Homelites, Ship, Cheetah Fight etc. 42
  • Incense sticks (Agarbattis) Current industry consumer spend estimated at over Rs. 900 crores p.a. Fragmented supply base arising from policy of reservation for small scale industry ITC markets its brands with value added products across each price point • ‘Mangaldeep’ : second largest national brand in the country • Support cottage sector with complementary marketing strengths • Provides livelihood opportunities to more than 8000 under privileged women 43
  • Personal Care Products Current market size estimated at over Rs. 29000 crores (growing at 12% p.a.) ITC presence established in Body Wash (Soaps, shower gels), Hair Care (Shampoos, conditioner). Product portfolio enlarged with the launch of Fairness cream. Portfolio approach straddling all consumer segments with 4 umbrella brands • Essenza Di Wills (Prestige) • Fiama Di Wills (Premium) • Vivel Di Wills and Vivel (Mid) • Superia (Popular) Products well received in the market, gaining customer acceptance Supported by investments in brands – celebrity endorsements Investments being made in Research & Development and strategic tax incentivised manufacturing sites 44
  • Forward-looking Statements Statements in this presentation describing the Company’s objectives, future prospects, estimates, expectations etc. may be “forward looking statements” within the meaning of applicable securities laws and regulations. Investors are cautioned that “forward looking statements” are based on certain assumptions of future events over which the Company exercises no control. Therefore there can be no guarantee as to their accuracy. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differmaterially from those that may be projected or implied by these forward lookingstatements. Such risks and uncertainties include, but are not limited to: growth, competition, acquisitions, domestic and international economic conditions affecting demand, supply and price conditions in the various businesses in theCompany’s portfolio, changes in Government regulations, tax regimes and other statutes, and the ability to attract and retain high quality human resource. 45