2. Company Profile
A n in sig ht into ITC
• Foremost private sector company in India
• Annual turnover of US$ 3 billion and market
capitalization of over US$ 10 billion.
• Have grown from single product
manufacturers to multi-business corporation.
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3. Company Profile
A n in sig ht into ITC
• Employees over 20,000 individuals over 60
locations.
• Diversified in cigarettes, hotels, papers, apparel,
agriculture, FMCG, packaged foods,
confectionary, greeting cards, etc.
• 1.5 lakh shareholders invested in one of the top
five value creators in India.
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4. Mission and Vision
Mission
• “To enhance the wealth generating
capability of the enterprise in a
globalizing environment delivering
superior and sustainable stakeholder
value.”
Vision
• “Sustain ITC’s position as one of India’s
most valuable corporations growing
value for the Indian economy and the
company’s shareholders.”
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5. Core Values at ITC
• Trusteeship
• Customer Focus
• Respect for people
• Excellence
• Innovation
• Ethical corporate citizenship
6. Governance structure at ITC
• Strategic supervision by the board of directors that sharpens accountability of the
management.
• Strategic management by the corporate management committee, uncluttered by
the day-to-day tasks of executive management, remains focused and energized.
• Executive management by the Divisional Chief Executive assisted by the Divisional
Management Committee gets focused on enhancing thte quality, efficiency and
effectiveness of its business.
7. • Leading ITC to adopt and follow corporate governance standards.
• Trusteeship to protect and enhance Shareholders value through strategic
supervision.
• Ensuring companies goals relating the shareholders.
• Responsible to set strategic goals and seek accountability for their fulfilment
• Provide direction and exercise appropriate control to ensure that the company is
operating as per shareholder’s aspiration and societal expectation.
• Periodic review of its functioning.
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Board of Directors:
9. ITC Board structure
• Executive Directors includes executive chairman, do not generally exceed
1/3rd of the total strength of the board.
• Non-executive Directors comprise eminent professionals with experience
in business, finance, marketing, law and public enterprises
10.
11. Face-to-face Interaction
with Shareholders:
• A general meeting of the shareholders of the
company are held once in a year to consider and
approve the report of the directors, the annual
financial statements, declaration of dividends
and any other returns involved for distribution.
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12. The Governance Philosophy at ITC is based on the following concerns:
1. TRUSTEESHIP
2. TRANSPARENCY
3. EMPOWERMENT & ACCOUNTABILITY
4. CONTROL
5. ETHICAL CORPORATE CITIZENSHIP.
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Corporate Social Responsibility Policy
• Recognizing that business enterprises are economic organs of society and draw on
societal resources, it is ITC's belief that a company's performance must be
measured by its Triple Bottom Line contribution to building economic, social and
environmental capital towards enhancing societal sustainability. ITC believes that
in the strategic context of business, enterprises possess, beyond mere financial
resources, the transformational capacity to create game-changing development
models by unleashing their power of entrepreneurial vitality, innovation and
creativity. In line with this belief, ITC will continue crafting unique models to
generate livelihoods and environmental capital. Such Corporate Social
Responsibility ("CSR") projects are far more replicable, scalable and sustainable,
with a significant multiplier impact on sustainable livelihood creation and
environmental replenishment. These initiatives are independent of the normal
conduct of ITC's business. Programmes, projects and activities (collectively "CSR
Programmes") carried out in this regard are the subject matter of this Policy.
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ITC E-Choupal Movement
• e-Choupal is a Hindi word which means “village meeting place”. Market is
meeting place where sellers/ customers come together to do the
transactions. The v is a virtual market place where farmers can do the
transaction, facilitated by an internet linked computer, directly with a
purchaser and can realize better price for their produce.
• The e-Choupal is a unique web-based initiative of ITC Limited [a large multi
business conglomerate in India] offering farmers required information,
products and services they need to enhance farm productivity, improve
farm-gate price realizations and cut transaction costs.
• Farmers can access latest local and global information on weather, scientific
farming practices as well as market price at the village itself. The serviced
are provided through this web portal in different languages.
• It also facilities supply of high quality farm inputs as well as purchase
doorstep thereby saving them time and transportation costs. Basically, an e-
Choupal is a desktop computer with internet access, housed in a small room,
costing under three lakhs to set up and about Rs 10,000 annually to
maintain. The e-Choupal also providers daily need items manufactured by
ITC.
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BENEFITS OF E-CHOUPAL
• The e-Choupal system gives farmers more control over their choices a
higher profit margin on their crops and access to information that
improves their productivity.
• By providing a more transparent process and empowering local
people as key nodes in the system. ITC increases trust and fairness.
The increase efficiencies and potential for improving crop quality
contributing to making Indian agriculture more competitive.
• Despite difficulties from undependable phone and electric power
infrastructure and sometimes limited hours of use, the system also
links farmers and their families to the world.
• Some sanchalaks track future prices on the Chicago Boards of Trade as
well as local mandi prices for advising the farmers about current
trends in market. Village children have used the computers for school
work, games and to obtain and print of their academic test results.
The result is a significant step towards rural development
16. Result on Rural India
• Wide reach
• Convince to farmer
• Employment of villager
• Transparent process
17. Benefit for ITC
• Market access
• Low cost
• Rising rural prosperity
• Huge consumer base
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ITC EHS Commitment
• Sustainable Development: through the
establishment & practice of environmental
standards set as per laws, regulations & codes of
practice.
• Planning & Decision Making: Involving and
considering occupational health, safety &
environment.
• Educating for & training employees: to be
responsible and considerate about environmental,
safety and health.
• Employee Safety among & within: Instilling a
sense and priority for safety within the working
environment and for oneself.
• Maintaining safe and sound facilities, equipment's
and operations: Providing safe working conditions for
employees and visitors, proper maintenance of
equipment & facilities.
• Practicing safe handling, storage & disposal of
materials and substances that are termed hazardous to
health & environment.
• Reduction & Conservation: Reduce wastage,
conserve energy and recycle whatever is possible.
• Compliance & Benchmarking: To institute &
implement EHS Audit to assure compliance with
benchmarked standards.
• Sharing of information among business partners:
Proactive sharing of regular functional information
with business partners among the inculcating EHS
standards.
19. BAT-ITC Tussle History
• 1905 - BAT set up The Peninsular Tobacco
Company (Peninsular) in India, involved in
cigarette manufacturing, tobacco procurement and
processing.
• 1910 - It set up a full-fledged sales organization
named the Imperial Tobacco Company of India
Limited (Imperial).
• 1912 - To cope with the growing demand, BAT set
up another cigarette manufacturing unit in
Bangalore, called Indian Leaf Tobacco
Company(ILTC).
• South India Leaf Area( SILA) - Due to the poor
quality of tobacco procured from Bihar, ILTC
established SILA in Andhra Pradesh.
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• 1919 - BAT had transferred its holdings in Peninsular
& ILTC to Imperial, hence Imperial replaced
Peninsular as the main subsidiary in India.
• 1920 - Imperial appointed distributors & agents in
various parts of the India.
• 1924 - Due to increasing sales in North India,
Imperial set its 3rd factory at Saharanpur, UP.
• 1925 - Imperial set up its printing factory at Munger
to cater to the printing & packaging needs of the
company.
• 1928 - Imperial’s Head Office inaugurated in
Calcutta.
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ITC-FERA Violation
FERA
Enacted in September 1973 and it came in force
from January 1, 1974. It was amended by the
Foreign Exchange Regulation (Amendment) Act
1993.
• FERA applied to all citizens of India, all over
India. The idea was to regulate the foreign
payments, regulate the dealings in Foreign
Exchange & securities and conservation of
Foreign exchange for the nation.
• After receiving many global honors for
adherence to corporate governance practices
and its social responsibility, ITC caught red-
handed by Customs & Revenue Regulations of
India for FERA violations.
• A majority of ITC's legal troubles could be
traced back to its association with the US
based Suresh Chitalia and Devang Chitalia
(Chitalias), the international trading partners
and directors of international branches.
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• ITC started the 'Bukhara' chain of restaurants in the US, jointly with its subsidiary ITC International and
some Non-Resident Indian (NRI) doctors. The venture ran into huge losses, ITC decided to make good the
losses and honor its commitment of providing a 25% return on the investments to the NRI doctors.
• According to the deal, the Chitalias later bought the Bukhara venture in 1990 for around $1 million.
Investors were paid off through the Chitalias New-Jersey based company, ETS Fibers.
• ED found out that around $ 83 million was transferred into India as per ITC's instructions on the basis of
the accounts maintained by the Chitalia group of companies. The ITC was accused for cooking the books &
indulged in accounting frauds.
• A sum of $ 6.5 million was transferred from ITC Global to the Chitalias' companies and the same was
remitted to ITC at a later date.
• Another instance cited of money laundering by ITC was regarding the over-invoicing of machinery
imported by ITC Bhadrachalam Paperboards Ltd., from Italy.
22. Unfolding of the SPAT
• 1995- UK- based parent company of ITC, British
American Tobacco(BAT), shocked lack of
confidence in the Indian Chairman, which later
lead to his resignation due to allegations &
accusations on BAT about trying to increase its
stake in ITC.
• After a lot on conflicts and press releases, the
inside stories of ITC-BAT became of public
knowledge.
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23. The Aftermath - Setting Things Right
• Alarmed by the mayhem caused, ITC took some drastic steps in its board meeting held
on November 15, 1996.
• ITC inducted three independent, non-executive directors on the Board and repealed
the executive powers of Saurabh Misra, ITC deputy chairman, Feroze Vevaina, finance
chief and R.K. Kutty, director.ITC also suspended the powers of the Committee of
Directors and appointed an interim management committee....
