Itc Ltd. Report

MIT- WPU, Faculty of Management
Enterprise Analysis and Desk Research Report on
Submitted By
18MBAOPE044 Rupam W. Rathod

18MBAOPE045 Siddharth H. Sanghani
18MBAOPE046 Gajanad Rahul Rao Sangoji
18MBAOPE048 Gaurav V. Suryawanshi
18MBAOPE049 Taha K. Saifee
18MBAOPE064 Amay S. Dambhare
(AY: 2018-19)
IN PARTIAL FULFILLMENT OF
Course Code and Name: MBA1007: Enterprise Analysis and Desk Research
Name of Programme: MBA Operations Management
As prescribed by MIT-World Peace University
MIT-World Peace University’s

Faculty of Management
Pune
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CERTIFICATE
This is to certify that Ms. Rupam W. Rathod, Mr. Siddharth H. Sanghani, Mr. Gajanad
Rahul Rao Sangoji, Mr. Gaurav V. Suryawanshi, Mr. Taha K. Saifee, Mr. Amay S.
Dambhare of MBA Operation Mangement have successfully completed the desk research
work titled ITC Limited in partial fulfilment of requirement for the Course MBA1007:
Enterprise Analysis and Desk Research as prescribed by the MIT-World Peace
University – Faculty of Management.
This Report is the record of authentic work carried out during the academic year
2018-19.
Prof. Dr. Chetan Chaudhari Prof. Meenal Pendse

Name of Guide Name of Guide
Prof. Dr. Sayalee Gankar

Dean, Management PG-Programmes,
MIT-WPU
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DECLARATION
We, the undersigned students hereby declare that this Research Report is the record of
authentic work carried out by us during the academic year 2018-19 and has not been
submitted to any other University or Institute towards the award of any degree.
3
ACKNOWLEDGEMENT
At the outset, we express our deepest sense of gratitude to our guide Prof. Meenal Pendse,
Faculty of Management- PG, MITWPU, Pune, for giving us an opportunity to work on a
project that was challenging and interesting for us. We remember with great emotion, the
constant encouragement and help extended to us by her that went beyond the realm of
academics.
We express our profound gratitude to Prof. Dr. Chetan Chaudhari, Dy. Director
(Academics), Faculty of Management- PG, MITWPU, Pune.
I owe my immense thanks to the Dean Prof. Dr. Sayalee Gankar, and the Management of
MITWPU, Pune for providing us the best amenities to enable us to complete our project in
the stipulated time.
Our sincere thanks go to all the faculty members of the department and our friends for
voluntary help, direct and indirect, extended to us during the course of the project work.
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CONTENTS
Chapter Page
Particulars
No. No.
Executive Summary 1
1 Enterprise Background: 1
1.1. Enterprise History- Year of Establishment, Type of Enterprise,
Significant milestones since establishment, Corporate/umbrella
group it belongs to with brief information about the group, Initial
promoters and Current Promoters with Ownership pattern. 1-13
1.2. Vision, Mission, Philosophy of the Enterprise, Long term and
Short-term objectives. Names of Chairperson, CEO and Board of
Directors 13-15
2 Organization Structure & Geographic Presence: 16

2.1 Organization Structure and its relevance to the type of business
the enterprise runs 16-20
2.2 Geographic presence - National and International Presence,
Locations (countries) of wholly owned global
subsidiaries/Domestic spread, location of manufacturing
facilities, development centers, service centers etc. 20-25
3 Marketing: 26
3.1. Target Market and Positioning Strategies 26-30
3.2. Close Competitors 30
3.3. Marketing Mix – 4Ps / 7 Ps 31-32
3.4. Comparative Marketing Analysis 32-33
4 Financials: 34
4.1. Performance based on Major financial indicators for past 5 years
like Revenue, Profit, Profitability, EPS etc. 35-36
4.2. Reading balance sheet for the recently concluded financial year.
Comparing Major financial indicators with competitors. 37-39
4.3. Listing on national/global stock markets, share price, 52 week
high and P/E ratio 40-45
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Chapter Page
Particulars
No. No.
Executive Summary 1
4.4. Comparative Financial Analysis 46
5 Governance, CSR and Future Plans: 47
5.1. Corporate Governance 48-49
5.2. Corporate Social Responsibility (CSR) initiatives taken 50-58
5.3. Rating by agencies like S&P, CRISIL, ICRA etc. 59-61
5.4. Significant achievements/awards and future plans 61-63
6 Findings and Conclusions 64

Bibliography 66
Annexure
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List of Table
Table No. Name of Table Page No.

1 Marketing Positioning Strategy 29
2 Profit and Loss statement as on March 31st 2018 36
3 Representing current P/E ratio and Market Capital 36
4 Consolidated Balance Sheet as on 31st March 2018 39
5 Comparison between cigarette Industry Competitors 39
6 Key Ratio comparative analysis 42
7 Comparative Financial Analysis for 1 decade 46
8 CRISIL Rating 60
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List of Charts
Chart No. Name of Chart Page No.

1 Pie Chart representing Market hold in Cigarette 32
2 Pie Chart representing Revenue generated by ITC 33
3 Graph chart represents Gross Sales Value of ITC 43
4 Graph Chart representing PBDIT of ITC 43
5 Graph Chart representing PAT of ITC 44
Graph Chart representing Contribution to
6 44
Exchequer of ITC
7 Graph Chart representing Net Worth of ITC 45
8 Graph Chart representing EPS and DPS of ITC 45
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LIST OF IMAGES
Figure No. Name of Image Page No.

1 ITC Subsidies 12
2 Yogesh Chander Deveshwar Chairman 14
3 Sanjiv Puri Managing Director 14
4 Images of Board of Directors 15
5 Board of Directors Hierarchy 16
6 ITC Limited Factories and Godowns 23
7 Locations of ITC in Indian 23
8 ITC Agri-Business operation in India 24
9 ITC Global Partners 25
10 Marketing Strategy Segment 27
11 Target Marketing Strategy 28
12 Competitors of ITC Company 30
13 MoneyControl Stock Market Survey 40
14 CSR Activities 50
15 CSR Environment wellbeing Activities 50
16 ITC CSR Activities to improve nature. 57
17 ITC CSR Activities for the improvement of people 58
18 ITC CSR Activates for the health and energy conservation. 58
19 Independence Day Special 72Kg Bar. 58
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Chapter 1: Enterprise Background
Executive Summary
ITC is India's leading Fast Moving Consumer Goods Company, the clear market leader in the
Indian Paperboard and Packaging industry, a globally acknowledged pioneer in farmer
empowerment through its wide-reaching Agri-Business and a trailblazer in green hoteliering.
ITC InfoTech, a wholly-owned subsidiary, is one of India's fast-growing IT companies in the
mid-tier segment. This portfolio of rapidly growing businesses considerably enhances ITC's
capacity to generate growing value for the Indian economy.
ITC's Agri-Business is one of India's largest exporters of agricultural products. The ITC
Group’s contribution to foreign exchange earnings over the last ten years amounted to nearly
US$ 6.8 billion, of which agri exports constituted 57%. The Company's 'e-Choupal' initiative
has enabled Indian agriculture significantly enhance its competitiveness by empowering
Indian farmers through the power of the Internet.
"ITC believes that its aspiration to create enduring value for the nation provides the motive
force to sustain growing shareholder value. ITC practices this philosophy by not only driving
each of its businesses towards international competitiveness but by also consciously
contributing to enhancing the competitiveness of the larger value chain of which it is a part."
ITC group directly employs more than 32,000 people and the Company's Businesses and
value-chains generate around 6 million sustainable livelihoods many of whom live at the
margin in rural India.
1.1 Enterprise Background
1.1.1 History
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
India Limited. As the Company's ownership progressively Indianised, the name of the
Company was changed from Imperial Tobacco Company of India Limited to India
Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of
the Company's multi-business portfolio encompassing a wide range of businesses - Fast
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Moving Consumer Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded
Apparel, Education and Stationery Products, Incense Sticks and Safety Matches, Hotels,
Paperboards & Specialty Papers, Packaging, Agri-Business and Information
Technology - the full stops in the Company's name were removed effective September 18,
2001. The Company now stands rechristened 'ITC Limited,' where ‘ITC’ is today no
longer an acronym or an initialized form.
EPS and OPS was formed on 24 August 1910 under the name of Imperial Tobacco Company
of India Limited, and the company went public on 27 October 1954. The earlier decades of
the company's activities centred mainly around tobacco products. In the 1970s, it diversified
into non-tobacco businesses. In 1975, the company acquired a hotel in Chennai, which was
renamed the ITC-Welcom group Hotel Chola' (now renamed to Welcom Hotel Chennai).In
1985, ITC set up Surya Nepal Tobacco Co. in Nepal as an Indo-Nepali and British joint
venture, with the shares divided between ITC, British American Tobacco and various
independent domestic shareholders in Nepal. In 2002, Surya Tobacco became a subsidiary of
ITC and its name was changed to Surya Nepal Private Limited. In 2000, ITC launched the
Expressions range of greeting cards, the Wills Sport range of casual wear, and a wholly
owned information technology subsidiary, ITC InfoTech India Limited. In 2001, ITC
introduced the Kitchens of India brand of ready-to-eat Indian recipes, which are produced and
sold internationally, at first in cans and later in retort packages, and more recently online and
at festivals. In 2002, ITC entered the confectionery and staples segments and acquired
the Bhadrachalam Paperboards Division and the safety matches company WIMCO Limited.
ITC diversified into body care products in 2005.In 2010, ITC launched its hand rolled cigar -
Armentieres - in the Indian market. The company began online sales in 2014.
1.1.2 Company Profile
 ITC is a Public sector company and the type of industry ITC belong to is
Conglomerate
 Headquarters in Kolkata, West Bengal, India
 ITC is broadly diversified its business into Consumer goods, tobacco, hotels and
resorts, Agribusiness, paperboard, packing, information technology,
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 The ITC has 32000+ employees
 And the turnover of the company is around Rs. 60,493 crore (US $ 9 Billion)
according to 2018
1.1.3 ITC Subsidies
Image 1: ITC Subsidies.
 Foods: ITC's major food brands include Kitchens of India; Aashirvaad, B natural,
Sunfeast, Candyman, Bingo! and Yippee!. ITC is India's largest seller of branded
foods with of over Rs. 4,600 crore in 2012-13. It is present across 6 categories in the
food business including, snack foods, ready-to-eat meals, fruit juices, dairy products
and confectionary.
 Personal care products include perfumes, haircare and skincare categories. Major
brands are Fiama Di Wills, Vivel, Essenza Di Wills, Superia and Engage.
 Stationery: Brands include Classmate, PaperKraft and Colour Crew. Launched in
2003, Classmate went on to become India's largest notebook brand in 2007.
 Safety Matches and Agarbattis: Ship, i Kno and Aim brands of safety matches and the
Mangaldeep brand of agarbattis (Incense Sticks).
 Hotels: ITC's Hotels division (under brands including WelcomHotel) is India's second
largest hotel chain with over 90 hotels throughout India. ITC is also the
exclusive franchiseein India of two brands owned by Sheraton International Inc.
Brands in the hospitality sector owned and operated by its subsidiaries include
Fortune Park Hotels and WelcomHeritage Hotels.
 Paperboard: Products such as specialty paper, graphic and other paper are sold under
the ITC brand by the ITC Paperboards and Specialty Papers Division like Classmate
product of ITC well known for their quality .
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 Packaging and Printing: ITC's Packaging and Printing division operates

manufacturing facilities at Haridwar and Chennai and services domestic and export
markets.
 Information Technology: ITC operates through its fully owned subsidiary ITC
Infotech India Limited,.
1.1.4 Significant Milestones
1925: Packaging and Printing: Backward Integration
1975: Entry into the Hospitality Sector - A 'Welcom' Move
1979: Paperboards & Specialty Papers - Development of a Backward Area
1985: Nepal Subsidiary - First Steps beyond National Borders
1990: Paperboards & Specialty Papers - Consolidation and Expansion
1990: Agri Business - Strengthening Farmer Linkages
2000: Lifestyle Retailing - Premium Offerings
2000: Information Technology - Business Friendly Solutions
2001: Branded Packaged Foods - Delighting Millions of Households
2002: Education & Stationery Products - Offering the Greenest products
2002: Agarbattis & Safety Matches - Supporting the Small and Cottage Sector
2005: Personal Care Products - Expert Solutions for Discerning Consumers
2010: Expanding the Tobacco Portfolio.
1.2 ITC Company
1.2.1 Vision: -
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 stakeholder.
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1.2.2 Mission: -
To enhance the wealth generating capability of the enterprise in a globalizing environment,
delivering superior and sustainable stakeholder value.
1.2.3 Philosophy: -
 Enduring Values
 Trusteeship
 Customer Focus
 Nation Orientation
 Innovation
1.2.4 Board Of Directors
Image 2 Sir Yogesh Chander Deveshwar (Chairman)
SIR YOGESH CHANDER DEVESHWAR (CHAIRMAN)
Yogesh Chander Deveshwar (71), is the Chairman of ITC. He was appointed as a Director on
the Board of the Company on April 11, 1984 and became the Chief Executive and Chairman
of the Board on January 1, 1996. Deveshwar joined ITC in 1968 and is an alumnus of the
Indian Institute of Technology, Delhi, and Harvard Business School. Between 1991 and
1994, he led Air India as Chairman and Managing Director.
Image 3: Sanjiv Puri (Managing Director)
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SANJIV PURI (MANAGING DIRECTOR)

Sanjiv Puri (56), is the Managing Director of ITC effective May 16, 2018. He was appointed
as a Director on the Board of ITC with effect from December 6, 2015 and Chief Executive
Officer from February 5, 2017 taking independent charge of the executive leadership of the
Company. He is also the Chairman of the Corporate Management Committee.
Rajiv Tandon Shilabhadra Banerjee Hemant Bhargava
Arun Duggal Sunil Behari Mathur Nirupama Rao
Meera Shankar
Image 4: Images of Board of Directors
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Chapter 2: Organization Structure
2.1 Organization Structure
Image 5: Board of Directors Hierarchy
The 3-tier governance structure thus ensures that:

 Strategic supervision (on behalf of the shareholders), being free from involvement in
the task of strategic management of the Company, can be conducted by the Board
with objectivity, thereby sharpening accountability of management.
 Strategic management of the Company, uncluttered by the day-to-day tasks of
executive management, remains focused and energized; and
 Executive management of the divisional business and shared services free from
collective strategic responsibilities for ITC as a whole, gets focused on enhancing the
quality, efficiency and effectiveness of its business / shared services.
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Roles
The core roles of the various entities at the three levels of Corporate Governance will be as
follows:
Board of Directors (Board) :
The primary role of the Board of Directors is that of trusteeship to protect and enhance
shareholder value through strategic supervision of ITC, its wholly owned subsidiaries and
their wholly owned subsidiaries. As trustees they will ensure that the Company has clear
goals relating to shareholder value and its growth. They should set strategic goals and seek
accountability for their fulfillment. They will provide direction, and exercise appropriate
control to ensure that the Company is managed in a manner that fulfills stakeholder
aspirations and societal expectations. The Board must periodically review its own functioning
to ensure that it is fulfilling its role. The Board will also evaluate the performance of the
CEO, the other Directors and Board Committees.
The Board shall have the following Committees whose terms of reference shall be
determined by the Board from time to time:
Audit Committee: To provide reassurance to the Board on the adequacy of internal control
systems and financial disclosures. The Company Secretary shall be the Secretary to the Audit
Committee. The Head of Internal Audit shall be Co-ordinator of the Committee and shall be
Permanent Invitee to the meetings of the Committee.
Nomination & Compensation Committee: To identify persons qualified to become

Directors and to formulate criteria for evaluation of performance of the CEO, other Directors
and the Board. The Committee's role also includes recommending to the Board the
appointment, remuneration and removal of Directors, CMC Members and managers one level
below Director. The Committee also has the responsibility for administering the Employee
Stock Option Schemes of the Company.
Security holders Relationship Committee: To oversee redressal of shareholder and investor

grievances and, inter alia, approve transmission of shares, sub-division / consolidation /
renewal / issue of duplicate share certificates etc. and allotment of shares upon exercise of
Options under the Company's Employee Stock Option Schemes.
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CSR and Sustainability Committee: To review, monitor and provide strategic direction to
the Company's CSR and sustainability practices towards fulfilling its triple bottom line
objectives. The Committee shall guide the Company in integrating its social and
environmental objectives with its business strategies and assist in crafting unique models to
support creation of sustainable livelihoods. The Committee shall also formulate & monitor
the CSR Policy and recommend to the Board the annual CSR Plan of the Company.
Independent Directors Committee: The role of the Committee would be such as may be
prescribed under law.
Terms of Reference of the Board Committees shall include:
 Objectives, Roles & Responsibilities
 Authority / Powers
 Membership & Quorum
 Chairmanship
 Tenure
 Frequency of Meetings
Corporate Management Committee (CMC): The primary role of the CMC is strategic
management of the Company's businesses within Board approved direction / framework and
realization of Company goals. The CMC will assess the performance of the businesses and
allocate resources, and will operate under the superintendence and control of the Board. The
composition of the CMC will be determined by the Board (based on the recommendation of
the Nomination & Compensation Committee), and will consist of the Chief Executive Officer
, all the other Executive Directors and some key senior members of management.
Membership of the CMC shall be reviewed by the Nomination & Compensation Committee
as and when necessary. Meetings of the CMC shall be convened and chaired by the CEO.
The Company Secretary or such other person as may be decided by the Nomination &
Compensation Committee / Board shall be the Secretary to the CMC.
Chairman: The primary role of the Chairman of ITC is to provide leadership to the Board,
support management of critical external relationships including shareholder issues and
mentor the executive management of the Company led by the CEO. As the Chairman of the
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Board, he will preside over its meetings and will lead and assist the Board in setting and
realising the Company’s strategic Vision and related short and long term goals.
Chief Executive Officer: The Chief Executive Officer will carry total responsibility for the
strategic management of the Company and accordingly will head the Corporate Management
Committee (CMC). His primary role is to provide leadership to the CMC for realizing
Company goals in accordance with the charter approved by the Board. He will be responsible
for the working of the CMC, ensuring that all relevant issues are on the agenda, that all CMC
members are enabled and encouraged to play a full part in its activities.
Executive Director: As a member of the CMC, contribute to the strategic management of the
Company's businesses within Board approved direction / framework.
As Director accountable to the Board for a business or shared services (Line Director),
assume overall responsibility for its strategic management, including governance processes
and top management effectiveness.
Divisional Management Committee (DMC) : Executive management of the divisional

business/ shared services to realize tactical and strategic objectives in accordance with CMC /
Board approved plan. Composition of the DMC shall be determined by the Line Director
with the approval of the CMC. The Divisional Chief Executive shall convene and chair the
DMC meetings.
Executive Committee for Business Vertical (EC) : The CMC, in order to drive sharper
focus, greater agility and responsiveness, may form Business Verticals within the Division /
Business / Shared Services from time to time. Each of these Verticals will have its own EC
led by the COO - Business Vertical with responsibility for delivering comprehensive business
results under the overall direction and supervision of the DCE supported by the DMC. Each
such Vertical will be represented on the DMC.
Divisional / SBU Chief Executive: The Divisional / SBU CEO will have executive
responsibility of the business and shall provide leadership to the Divisional Management
Committee in its task of executive management of the divisional business and of the Verticals
within the Division.
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Chief Operating Officer - Business Vertical (COO - BV):

COO-BV shall be responsible for providing leadership to the Vertical and realizing the
tactical and strategic objectives of their business area.
2.2 Geographic presence

Cigarette Factories in India
ITC's cigarettes are manufactured in state-of-the-art factories at Bengaluru, Munger,
Saharanpur, Kolkata and Pune, with cutting-edge technology & excellent work practices
benchmarked to the best globally. An efficient supply chain & distribution network reaches
India's popular brands across the length & breadth of the country.
In overseas markets, ITC's cigarette business continues to maintain high standards of

international quality and competitiveness. West Asia is a key export region for ITC and we
offer a wide portfolio of high quality cigarettes in this region. With a Portfolio of brands
under the Classic, Wills and Scissors Umbrella, ITC has cemented its international standing
being the 3rd largest player in the countries of Bahrain & Qatar. ITC was also the first
company to introduce a flavor on demand (capsule) product in the economy industry segment
in West Asia region.
ITC Green Leaf Threshing Plants

ITC is the largest buyer, processor and exporter of leaf tobaccos in India - creating a global
benchmark as the single largest integrated source of quality tobaccos. Serving customers in
50 countries across more than 70 destinations, ITC co-creates and delivers value at every
stage of the leaf tobacco value chain.
ITC buys nearly 50 per cent of all cigarette tobacco types grown in India. It has a team of
experienced, highly skilled and professional buyers and classifiers who source and segregate
tobaccos to exacting customer specifications. A large inventory base of quality tobaccos
provides an edge in serving customers through product customization, portfolio
rationalization, product bundling and value added services. This strategic direction insulates
customers from crop fluctuations, a key 'winning proposition' acknowledged worldwide.
ITC's Green Leaf processing plants at Chirala and Anaparti in Andhra Pradesh and new state-
of-the-art Green field GLT in Mysore, Karnataka are benchmarked with the best in the world.
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Contemporary technology, shared product knowledge base, sophisticated process and quality
controls enable ITC to process and deliver over 160 million Kg. of high quality tobaccos
annually. These factories have integrated warehousing complexes that match international
standards in hygiene, infestation control and monitoring.
ITC Packaging and Printing

ITC's Packaging & Printing Business is the largest value added converter of paperboard
packaging in South Asia. It converts over 70,000 tonnes of paper, paperboard and laminates
per annum into a variety of value-added packaging solutions for the food & beverage,
personal products, cigarette, liquor and consumer goods industries.
The Division, which was set up in 1925 as a strategic backward integration for ITC's
Cigarettes business, is today India's most sophisticated packaging house. State-of-the-art
technology, world-class quality and a highly skilled and dedicated team have combined to
position ITC as the first-choice supplier of high value added packaging.
The Division supplies value-added packaging to ITC's various FMCG businesses. Its client
list includes several well-known national and international companies like Nokia, Colgate
Palmolive, Pernod Ricard, Diageo, British American Tobacco, Philip Morris International,
Agio Cigars, UB Group, Tata Tetley, Tata Tea, Reckitt Benckiser, Radico Khaitan, Akbar
Brothers, Surya Nepal, VST Industries, etc.
With three packaging factories at Tiruvottiyur near Chennai (in the South), Munger in Bihar
(in the East), and Haridwar (in the North of India), the Company offers a comprehensive
product range in packaging backed by its packaging expertise over the decades and cutting
edge technology making it truly a "One stop shop for Packaging".
ITC Paper and Paperboard

The unit in Bhadrachalam is India's largest integrated pulping and paperboard manufacturing
unit. It boasts of equipment supplied by internationally renowned suppliers for pulping
processes, paper machines, web detection & inspection systems, and finishing & packing
lines. Currently the unit produces high-end virgin and recycled boards for packaging and
graphic applications, and fine printing papers. The Bhadrachalam unit manufactures and uses
pulp made from ozone bleaching process known as light ECF process. The use of ozone
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technology significantly reduces the load of toxins in the effluent discharged, and helps
customers get a brighter, stronger product that is also environmentally responsible with the
BOD (Biochemical oxygen on demand) and COD (Chemical oxygen on demand) level way
below the National Standards Limits. PM 4 & PM 5 of Unit Bhadrachalam is BRC Global
Standard certified for food grade boards.
The Kovai unit currently focuses entirely on recycled boards, servicing requirements for both
greyback and whiteback recycled boards, The Kovai unit is a benchmark in environmental
performance - helping ITC turn solid waste recycling positive by consuming more paper
waste generated than is generated internally. This is done by collecting waste from
households and institutions and recycling it at this facility.
The Tribeni unit specializes in fine papers and tissues and the product range from this unit
comprises opaque papers for fine printing like the Bible, dictionaries, cigarette tissues,
medical grade papers, anti-rust papers, electrical insulation papers, decor surface, printing
and barrier papers. The Bollaram unit manufactures poly extrusion coated barrier boards.
This unit is BRC certified for food grade boards.
ITC Food Factories

ITC's Branded Packaged Foods business is one of the fastest growing foods businesses in
India, driven by the market standing and consumer franchise of its popular brands -
Aashirvaad, Bingo! Sunfeast, Fabelle, Sunbean, Yippee! Kitchens of India, B Natural, ITC
Master Chef, Farmland, mint-o, Candyman and GumOn. The Foods business is today
represented in multiple categories in the market - Staples, Spices, Biscuits, Confectionery &
Gums, Snacks, Noodles & Pasta, Beverages, Dairy, Ready to Eat Meals, Chocolate, Coffee
and Frozen Foods. ITC’s food industry being the centre of the business it is situated in more
than 20 places.
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Image 6 ITC Limited Factories and Godowns
Image 7: Locations of ITC in India
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ITC's Agri Business

ITC's Agri Business is the country's second largest exporter of agri-products. It currently
focuses on exports and domestic trading of:
 Feed Ingredients - Soyameal
 Food Grains - Wheat & Wheat Flour, Rice, Pulses, Barley & Maize
 Marine Products - Shrimps and Prawns
 Processed Fruits - Fruit Purees/Concentrates, IQF/Frozen Fruits, Organic Fruit
Products
 Coffee
Image 8: ITC Agri-Business operation in India
ITC Information Technology

ITC Infotech is a specialized global full service technology solutions provider, led by
Business and Technology Consulting. ITC Infotech's Digitaligence@work infuses
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technology with domain, data, design, and differentiated delivery to significantly enhance
experience and efficiency, enabling our clients differentiate and disrupt the business.
The company caters to enterprises in Supply Chain based industries (CPG, Retail,
Manufacturing, Hi-Tech) and Services (Banking, Financial Services and Insurance,
Healthcare, Airline, Hospitality) through a combination of traditional and newer business
models, as a long-term sustainable partner.
Image 9: ITC Global Partners
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Chapter 3: Marketing.
ITC Limited is adiversified Indian conglomerate headquartered in Kolkata that has a

meaningful presence in all the three sectors of the national economy -agriculture, services and
manufacturing. With significant interests in the Fast-Moving Consumer Goods (FMCG),
Hotels, Paperboards & Packaging, Agri Business & Information Technology sectors, the
company presently employs over 31,000 people across India. During FY 2016, ITC clocked
annual revenues of US$ 8.31 billion and enjoyed a market capitalization of US$45 billion.
3.1. Target market and positioning strategies
ITC can provide with the keys to assuring that a product sells with greater ease. We work on
all aspects of strategic and operative marketing to enhance the value of your product, service
or brand. ITC’s brand positioning service will advise you on the redesign of a product, and
to create the image, packaging, price structures and target markets with the aim of effectively
communicating what your company represents and/or its activities coherently, tenacity and
integrity .You will often ask yourself how your firm is going to make money. ITC will help
you to create a Marketing Strategy which will help you to define business lines, establish
fairer pricing policies using examples from the market as a benchmark. We provide vital, key
information on your target markets by integrating all aspects of this intelligence, such as
market research, creation of data bases, phone calls, delivering catalogues, customer
management, making appointments, etc., we foster your commercial relations.
 How to choose a market? Which markets should you be concentrating on based on
your profile and requirements?
 In a few days, we will present you a number of alternatives and provide you with
all the arguments that led us to our conclusions and the information, statistics and
numbers that we used in our decision making process.
 Screened contact information: potential distributors, importers or agents and
suppliers in accordance with the previously defined profiles.
 Bespoke market studies and research designed to meet your requirements.
 Standard market studies: define your target countries and industries and we can
provide you with published statistics. Very often this information can be obtained free
of charge.
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 What do you want to know about your competition? ITC will furnish all those
details you have always wanted to know about your competitors: prices, dealers, end
customers, etc.
Marketing Strategy of ITC
ITC as a brand caters to the needs of a diverse range of consumer segments which is done by
segmenting the population based on similar sorts of characteristics. ITC uses a mix
of geographic demographic and psychographic segmentation variables such as profession,
income class, gender, age, region, behaviour etc. ITC uses selective and
differentiated targeting strategy is used by the company for offerings of the different group of
companies.
Segmentation Marketing Strategy
Image 10: Marketing Strategy Segment
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Target Marketing Strategy
Image 11: Target Marketing Strategy
Competitive advantage in the Marketing strategy of ITC–
1. Big Conglomerate:
Over the years ITC has become a large conglomerate offering the diverse range of products
and services ranging from Agri-Products to food products in FMCG Segment to IT Solutions.
Experience in such a diverse array of products and services has helped the company to
emerge as a prominent player in the market especially in FMCG- Cigarettes, Hotels and
Paperboards & Packaging sectors.
2. Vast experience:
With 108 years of experience in Indian, Market ITC has developed a robust distribution
framework which is parallel to none of its competitors present. This has helped the company
to understand the need and wants of the consumers making it financially strong and
competitively ahead of its peers.
28
3. The X-Factor:
ITC’s E-Chaupal initiative aimed at making internet available to Indian farmers has touched
the lives of millions of farmers and their families in the rural part of the country thus
increasing brand presence through this social initiative and in turn leveraging some Brand
essence points to the firm.
Positioning Marketing - Market stand of ITC Ltd.

Segment Dominance Revenue % PBIT
Cigarettes 70% share 77 87
Paperboard & Packaging board – No. 1 7 10
Packaging in Asia
Agri- Business One of the largest exporters 7 4
from India
Hotels ITC Group ranks 4 5
No. 2
FMCG (Others) 20% share of food 4 7
products,‘Aashrivaad’ atta
is No.1 in branded Segment
Table 1: Marketing Positioning Strategy.
SWOT Analysis of ITC
A. Strengths
1. ITC has a strong and experienced management.
2. Strong brand presence, excellent products advertising
3. Diversified product and services portfolio which includes FMCG, Hotel chains, paper
& packaging.
4. Over 6500 E-Choupal CSR activities and sustainability initiatives enhance ITC’s
brand
5. ITC limited employees over 25,000 people
6. Excellent research and development facilities
29
B. Weaknesses
1. ITC is still dependant on its tobacco revenues and people have cheaper substitutes and
other brands
2. Hotel industry has not been able to create a huge market share
C. Opportunities
1. Tap rural markets and increase penetration in urban areas
2. Mergers and acquisitions to strengthen the brand
3. Increasing purchasing power of people thereby increasing demand
4. More publicity of hotel chains to increase market share
D. Threats
1. Strict govt regulations and policies regarding cigarettes
2. Intense and increasing competition amongst other FMCG companies and hotel chains
3. FDI in retail thereby allowing international brands
3.2. Close Competitors

Below are the competitors of ITC Limited:
1. Marico
2. L'Oréal
3. Nirma Ltd
4. HUL
5. Colgate-Palmolive
6. Procter and Gamble
7. Dabur
Image 12: Competitors of ITC Company
30
3.3. Marketing Mix – 4 p’s / 7 p’s.
Product:
 ITC is a leading FMCG company in India.
 ITC comprises of packaged food, Lifestyle retailing, Education and stationery
products, safety matches and incense sticks, personal care products, lifestyle clothing
and cigarette.
 ITC has a premium range of luxury hotels in over 70 destinations.
Price:
 Pricing of the product depends on several things like pricing objective, the market one
is operating in, the purchasing power of the consumers, the market condition,
product’s market position etc.
 ITC follows different pricing for different products and hike in premium products due
to hike in excise duty.
Place:
 ITC has an unmatched distribution network, available in 4.3 million retail stores in
India.
 ITC is constantly trying to reduce the lead time and to reach the retailers as quickly as
possible.
 E-choupals ensure timely supply of high quality raw materials.
 ITC has well integrated manufacturing and Logistics facilities with a wide and deep
distribution network.
 ITC has over 100 hotels are present in 70 destinations.
Promotion:
 It promotes its product through Print, television and radio as a part of its marketing
mix.
 ITC’s different brands have different brand ambassadors.
 Classmate: Yuvraj Singh and Soha Ali Khan;
 Salvon: Saina Nehwal
 Sunfeast: Shahrukh Khan
31
 John Players: Ranbir Kapoor

 Wills Lifestyle: Hrithik Roshan
 Fiama Di Wills: Deepika Padukone
3.4. Comparators
 System offers actual measurements of dimensional characteristics for quicker machine

adjustments during thread production
 Reduces gaging time over thread plug and ring gages
 One single gage can be used for pre-plate, after-plate, class 2, 2B, 3, 3B eliminating the
need for multiple fixed limit thread plug ring gages
 Ideal for use with Statistical Process Control - SPC
 Rigid construction and constant measuring pressure provides consistent and accurate
readings
 Quick setting with the use of a master setting ring
Comparative Market analysis
Market hold in comparison with competitors.

The given pie chart below represent the market comparative competition between the ITC
and other tobacco companies
Chart 1 Pie Chart Representing Market hold in Cigarette sector
32
Revenues (in million dollar) Marico,

890, 5%
HUL, 5400,
ITC, 9000, 29%
49%
Britania,
Patanjali, 1400, 7%
1600, 9%
Vajir sultan
(VST), 117,
Marico HUL Vajir sultan (VST) Britania Patanjali ITC1%
Chart 2 Pie Chart Representing Revenue generated by ITC.
33
Chapter 4: Financials
ITC Ltd., incorporated in the year 1910, is a Large Cap company (having a market cap of Rs
379660.86 Crore) operating in Tobacco sector.
ITC Ltd. key Products/Revenue Segments include Cigarettes which contributed Rs 22894.01
Crore to Sales Value (51.64 % of Total Sales), Packaged Food Item which contributed Rs
8668.72 Crore to Sales Value (19.55 % of Total Sales), Paper & Paper Boards which
contributed Rs 3221.11 Crore to Sales Value (7.26 % of Total Sales), Agricultural Products
which contributed Rs 2855.85 Crore to Sales Value (6.44 % of Total Sales), Others which
contributed Rs 2645.66 Crore to Sales Value (5.96 % of Total Sales), Tobacco
Unmanufactured which contributed Rs 1696.13 Crore to Sales Value (3.82 % of Total Sales),
Service (Hotel) which contributed Rs 1404.10 Crore to Sales Value (3.16 % of Total Sales),
Printed Materials which contributed Rs 571.32 Crore to Sales Value (1.28 % of Total Sales),
Other Operating Revenue which contributed Rs 372.87 Crore to Sales Value (0.84 % of Total
Sales)for the year ending 31-Mar-2018.
For the quarter ended 30-06-2018, the company has reported a Standalone sales of Rs
10554.66 Crore, up .72 % from last quarter Sales of Rs 10479.24 Crore and up 6.87 % from
last year same quarter Sales of Rs 9876.45 Crore Company has reported net profit after tax of
Rs 2818.68 Crore in latest quarter.
The company’s top management includes Mr.Arun Duggal, Mr.David Robert Simpson,
Mr.Hemant Bhargava, Mr.John Pulinthanam, Mr.Nakul Anand, Mr.Rajiv Tandon,
Mr.Sahibzada Syed Habib-ur-Rehman, Mr.Sanjiv Puri, Mr.Shilabhadra Banerjee, Mr.Sunil
Behari Mathur, Mr.Yogesh Chander Deveshwar, Ms.Meera Shankar, Ms.Nirupama Rao.
Company has Deloitte Haskins & Sells as its auditoRs As on 30-06-2018, the company has a
total of 12,207,412,321 shares outstanding.
34
4.1 Performance based on Major financial indicators for past 5 years like Revenue,
Profit, Profitability, EPS etc.
Profit and Loss statements:
Consolidated Profit & Loss account ------------------- in Rs. Cr. -------------------

Mar 18 Mar-17 Mar-16 Mar-15
INCOME
Revenue From Operations [Gross] 47,362.51 58,287.95 54,673.17 52,759.08
Less: Excise/Sevice Tax/Other Levies 4,239.61 15,927.91 15,868.98 14,325.77
Revenue From Operations [Net] 43,122.90 42,360.04 38,804.19 38,433.31

Other Operating Revenues 326.04 416.57 387.91 401.5
Total Operating Revenues 43,448.94 42,776.61 39,192.10 38,834.81
Other Income 1,831.86 1,761.53 1,530.80 1,256.51
Total Revenue 45,280.80 44,538.14 40,722.90 40,091.32
EXPENSES
Cost Of Materials Consumed 11,943.75 11,979.03 11,168.68 11,089.10
Purchase Of Stock-In Trade 2,883.97 3,477.56 2,595.20 3,918.80
Changes In Inventories Of FG,WIP And
1,027.76 592.57 -195.38 -235.72
Stock-In Trade
Employee Benefit Expenses 3,760.90 3,631.73 3,440.97 2,772.28
Finance Costs 89.91 24.3 53.6 68.12
Depreciation And Amortisation Expenses 1,236.28 1,152.79 1,077.40 1,027.96
Other Expenses 7,349.60 7,659.81 7,731.78 7,088.73
Total Expenses 28,292.17 28,517.79 25,872.25 25,729.27
Profit/Loss Before Exceptional,
16,988.63 16,020.35 14,850.65 14,362.05
ExtraOrdinary Items And Tax
Exceptional Items 412.9 0 0 0
Profit/Loss Before Tax 17,401.53 16,020.35 14,850.65 14,362.05
Tax Expenses-Continued Operations
Current Tax 5,893.19 5,546.16 5,150.37 4,228.21
Deferred Tax 23.24 2.93 207.84 368.21
Tax For Earlier Years 0 0 0 0
Total Tax Expenses 5,916.43 5,549.09 5,358.21 4,596.42
35
Profit/Loss After Tax And Before

11,485.10 10,471.26 9,492.44 9,765.63
ExtraOrdinary Items
Profit/Loss From Continuing Operations 11,485.10 10,471.26 9,492.44 9,765.63

Profit/Loss For The Period 11,485.10 10,471.26 9,492.44 9,765.63
Minority Interest -221.48 -187.79 -156.41 -115.35
Share Of Profit/Loss Of Associates 7.58 5.97 8.42 12.89
Consolidated Profit/Loss After MI And

11,271.20 10,289.44 9,344.45 9,663.17
Associates
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 9 9 8 12
Diluted EPS (Rs.) 9 8 8 12
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 5,770.01 6,840.12 5,009.70 5,009.70
Tax On Dividend 1,136.83 1,338.95 992.74 1,051.76
st
Table 2: Profit and Loss statement as on March 31 2018
MARKET CAP
(RS CR) 3,79,660.86 EPS (TTM) 9.39
P/E 33.06 P/C 30.08
BOOK VALUE
(RS) 42.03 PRICE/BOOK 7.39
DIV (%) 515.00% DIC YIELD (%) 1.66%
MARKET LOT 1 FACE VALUE (RS) 1
INDUSTRY P/E 33.7 DELIVERABLES (%) 62.65

Table 3: Representing current P/E ratios and Market capital
36
4.2 Reading balance sheet for the recently concluded financial year. Comparing Major
financial indicators with competitors.
Consolidated Balance Sheet of

Mar 18 Mar-17 Mar-16 Mar-15
ITC
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 1,220.43 1,214.74 804.72 801.55
Total Share Capital 1,220.43 1,214.74 804.72 801.55
Revaluation Reserves 0 0 0 56.93
Reserves and Surplus 51,289.69 45,198.19 41,874.80 30,877.01
Total Reserves and Surplus 51,289.69 45,198.19 41,874.80 30,933.94
Total Shareholders Funds 52,510.12 46,412.93 42,679.52 31,735.49
Minority Interest 334.47 294.74 260.9 225.11
Group Share In Joint Ventures 0 0 0 0
NON-CURRENT LIABILITIES
Long Term Borrowings 11.5 18.4 26.66 60.68
Deferred Tax Liabilities [Net] 1,923.02 1,878.77 1,880.00 1,642.77
Other Long Term Liabilities 109.98 59 50.92 42.67
Long Term Provisions 149.63 158.42 135.42 124.16
Total Non-Current Liabilities 2,194.13 2,114.59 2,093.00 1,870.28
CURRENT LIABILITIES
Short Term Borrowings 17.35 19.11 43.95 195.39
Trade Payables 3,496.18 2,659.33 2,339.29 2,020.47
Other Current Liabilities 5,672.81 4,381.41 4,203.82 3,782.04
Short Term Provisions 63.8 61.16 71.4 6,162.01
Total Current Liabilities 9,250.14 7,121.01 6,658.46 12,159.91
Total Capital And Liabilities 64,288.86 55,943.27 51,691.88 45,990.79
ASSETS
NON-CURRENT ASSETS
Tangible Assets 15,863.68 15,262.27 14,459.36 14,648.38
37
Intangible Assets 457.75 428.68 444.74 423.98

Capital Work-In-Progress 5,499.60 3,684.20 2,528.97 2,671.55
Intangible Assets Under
8.73 45.69 30.75 28.65
Development
Other Assets 0 0 0 -1.05
Fixed Assets 21,829.76 19,420.84 17,463.82 17,771.51
Non-Current Investments 11,483.79 6,693.99 5,125.81 807.68
Deferred Tax Assets [Net] 47.98 44.95 40.54 38.57
Long Term Loans And
9.69 8.54 12.96 1,565.47
Advances
Other Non-Current Assets 4,321.49 3,303.32 3,983.72 1.24
Total Non-Current Assets 37,895.24 29,674.17 26,829.38 20,416.44
Group Share In Joint Ventures 0 0 0 0
CURRENT ASSETS
Current Investments 10,569.07 10,887.39 6,621.78 6,135.09
Inventories 7,584.53 8,186.15 9,062.10 8,586.87
Trade Receivables 2,682.29 2,474.29 1,917.18 1,982.07
Cash And Cash Equivalents 2,899.60 2,967.40 6,063.30 7,896.22
Short Term Loans And
5.84 6.78 8.07 568.67
Advances
Other Current Assets 2,652.29 1,747.09 1,190.07 405.43
Total Current Assets 26,393.62 26,269.10 24,862.50 25,574.35
Total Assets 64,288.86 55,943.27 51,691.88 45,990.79
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 3,196.46 3,815.01 2,888.85 1,272.77
BONUS DETAILS
Bonus Equity Share Capital 1,113.13 1,113.13 710.47 710.47
NON-CURRENT INVESTMENTS
Non-Current Investments
11,276.13 6,502.72 4,929.80 1,215.76
Quoted Market Value
38
Non-Current Investments
205.45 210.27 5,125.81 70.26
Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted
2,394.82 2,743.52 2,942.01 1,230.72
Market Value
Current Investments Unquoted
8,351.52 8,148.08 3,680.28 4,905.49
Book Value
Table 4: Consolidated Balance sheet as on 31st March 2018
Name Market Cap. Sales

Last Price Net Profit Total Assets
(Rs. cr.) Turnover
ITC 310.45 379,722.02 40,627.54 11,223.25 51,411.20
VST 3,399.15 5,248.94 947.58 181.89 582.08
Godfrey Phillip 951.45 4,946.96 2,312.08 160.76 1,734.00
Kothari Product 116.05 346.34 4,228.56 44.14 1,196.12
Golden Tobacco 34.05 59.96 79.63 -8.05 -152.20
Table 5: showing comparison between cigarette industries competitor.
39
4.3 Listing on national/global stock markets, share price, 52 week high and P/E ratio:
Image 13: MoneyControl Stock Market Survey.
Key Financial Ratios ------------------- in Rs. Cr. -------------------

Mar Mar Mar Mar Mar
'18 '17 '16 '15 '14
Investment Valuation Ratios
Face Value 1 1 1 1 1
Dividend Per Share 5.15 4.75 8.5 6.25 6
Operating Profit Per Share (Rs) 12.73 12 17.69 16.81 15.66
40
Net Operating Profit Per Share (Rs) 33.29 33 45.78 45.55 41.79
Free Reserves Per Share (Rs) -- -- -- -- --

Bonus in Equity Capital 91.2 91.63 88.28 88.63 89.33
Profitability Ratios
Operating Profit Margin(%) 38.25 36.36 38.65 36.9 37.47
Profit Before Interest And Tax Margin(%) 33.66 32.18 34.17 32.88 33.64
Gross Profit Margin(%) 35.43 33.77 35.84 34.27 34.76
Cash Profit Margin(%) 27.96 26.71 28.15 27.77 28.19
Adjusted Cash Margin(%) 27.96 26.71 28.15 27.77 28.19
Net Profit Margin(%) 27.62 25.44 26.72 26.31 26.43
Adjusted Net Profit Margin(%) 26.24 24.24 25.47 25.24 25.57
Return On Capital Employed(%) 32.14 34.22 45.6 45.74 48.21
Return On Net Worth(%) 21.83 22.49 29.94 31.31 33.51
Adjusted Return on Net Worth(%) 21.03 22.49 29.94 31.31 33.51
Return on Assets Excluding Revaluations 42.12 37.33 40.85 38.28 32.95
Return on Assets Including Revaluations 42.12 37.33 40.92 38.35 33.02
Return on Long Term Funds(%) 32.14 34.22 45.61 45.74 48.21
Liquidity And Solvency Ratios

Current Ratio 1.68 1.94 1.2 1.45 1.25
Quick Ratio 1.02 1.06 0.69 0.87 0.68
Debt Equity Ratio -- -- -- -- --
Long Term Debt Equity Ratio -- -- -- -- --
Debt Coverage Ratios

676.5 305.4 4,292
Interest Cover 190.71 244.77
1 7 .22
41
721.7 326.5 4,597

Financial Charges Coverage Ratio 203.93 261.52
4 2 .28
490.7 222.4 3,284

Financial Charges Coverage Ratio Post Tax 143.74 185.07
1 4 .09
Management Efficiency Ratios

Inventory Turnover Ratio 6.13 7.05 6.1 6.43 6.4
Debtors Turnover Ratio 17.8 20.59 21.61 18.78 19.97
Investments Turnover Ratio 6.13 7.05 6.1 6.43 6.4
Fixed Assets Turnover Ratio 2.24 2.44 1.68 1.74 1.83
Total Assets Turnover Ratio 0.8 0.89 1.23 1.2 1.27

Asset Turnover Ratio 0.84 1.02 1.16 1.28 1.37
Average Raw Material Holding -- -- -- -- --
Average Finished Goods Held -- -- -- -- --
Number of Days In Working Capital 28.25 53.18 48 74.1 37.96

Profit & Loss Account Ratios
Material Cost Composition 36.94 38.89 37.71 41.41 40.68
Imported Composition of Raw Materials

-- -- 12.17 13.86 12.17
Consumed
Selling Distribution Cost Composition 2.18 1.97 2.36 -- --
Expenses as Composition of Total Sales 8.56 -- 9.89 13.95 12.9

Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 51.41 67.05 69.48 52.14 54.31
Dividend Payout Ratio Cash Profit 46.65 60.86 62.87 47.39 49.27
Earning Retention Ratio 46.63 32.95 30.52 47.86 45.69

Cash Earning Retention Ratio 51.74 39.14 37.13 52.61 50.73
AdjustedCash Flow Times 0 0 0 0 0.01

Table 6: Key ratios comparative analysis
42
Financial Highlights of ITC Limited.
Chart 3: Gross Sales Value of ITC.
Chart 4: PBDIT of ITC.

43
Chart 5: PAT of ITC.
Chart 6: Contribution to Exchequer of ITC.
44
Chart 7: Net Worth of ITC.
Chart 8: EPS and DPS of ITC.
45
4.4 Comparative Financial Analysis
Table 7: Comparative Financial Analysis for 1 decade.
46
Chapter 5: Governance, CSR and Future Plans
ITC is inspired by its Vision to serve larger national priorities. A Vision that is manifest in its
credo of
“Country before Corporation and Institution before Individual”
A commitment that drives extreme business competitiveness, whilst making societal value
creation a core purpose of business. At ITC, we call this ‘Responsible Competitiveness’. That
is why we measure ourselves by our contribution to the
Triple Bottom Line.
Creating larger economic value through multiple drivers of growth, enriching environmental
resources and generating millions of livelihoods.
 Achieving global distinction as the only Company in the world to be Carbon Positive, Water
Positive and Solid Waste Recycling Positive.
 Generating 6 million livelihoods for many who represent the weakest in society.
 Spearheading environmental stewardship by addressing climate change challenges with over

48% of its energy generated from renewable sources; by pioneering the concept of
responsible Luxury in ITC Hotels; by providing leadership to the green building movement in
India; and by large scale afforestation and watershed development.
 Investing in India’s future through globally benchmarked R&D; by building national assets in
manufacturing and hospitality and by creating competitive value chains that benefit millions
in rural India.
 Powered by the creation of world-class Indian brands that create, capture and retain more
value in the country to enable sustainable and inclusive growth.
47
5.1 Corporate Governance:

ITC defines Corporate Governance as a systemic process by which companies are directed
and controlled to enhance their wealth generating capacity. Since large corporations employ
vast quantum of societal resources, ITC believes that the governance process should ensure
that these companies are managed in a manner that meets stakeholders aspirations and
societal expectations.
Core Principles
ITC's Corporate Governance initiative is based on two core principles. These are :
 Management must have the executive freedom to drive the enterprise forward without
undue restraints; and
 This freedom of management should be exercised within a framework of effective
accountability.
ITC believes that any meaningful policy on Corporate Governance must provide
empowerment to the executive management of the Company, and simultaneously create a
mechanism of checks and balances which ensures that the decision making powers vested in
the executive management is not only not misused, but is used with care and responsibility to
meet stakeholder aspirations and societal expectations.
Cornerstones
From the above definition and core principles of Corporate Governance emerge the
cornerstones of ITC's governance philosophy, namely trusteeship, transparency,
empowerment and accountability, control and ethical corporate citizenship. ITC believes that
the practice of each of these leads to the creation of the right corporate culture in which the
company is managed in a manner that fulfils the purpose of Corporate Governance.
Trusteeship:
ITC believes that large corporations like itself have both a social and economic purpose.
They represent a coalition of interests, namely those of the shareholders, other providers of
capital, business associates and employees. This belief therefore casts a responsibility of
trusteeship on the Company's Board of Directors. They are to act as trustees to protect and
enhance shareholder value, as well as to ensure that the Company fulfils its obligations and
responsibilities to its other stakeholders. Inherent in the concept of trusteeship is the
48
responsibility to ensure equity, namely, that the rights of all shareholders, large or small, are
protected.
Transparency:
ITC believes that transparency means explaining Company’s policies and actions to those to
whom it has responsibilities. Therefore transparency must lead to maximum appropriate
disclosures without compromising the Company's strategic interests. Internally, transparency
means openness in Company's relationship with its employees, as well as the conduct of its
business in a manner that will bear scrutiny. ITC believes transparency enhances
accountability.
Empowerment and Accountability:

Empowerment is an essential concomitant of ITC's first core principle of governance that
management must have the freedom to drive the enterprise forward. ITC believes that
empowerment is a process of actualising the potential of its employees. Empowerment
unleashes creativity and innovation throughout the organisation by truly vesting decision-
making powers at the most appropriate levels in the organisational hierarchy.
ITC believes that the Board of Directors are accountable to the shareholders, and the
management is accountable to the Board of Directors. The Company believes that
empowerment, combined with accountability, provides an impetus to performance and
improves effectiveness, thereby enhancing shareholder value.
Control:
ITC believes that control is a necessary concomitant of its second core principle of
governance that the freedom of management should be exercised within a framework of
appropriate checks and balances. Control should prevent misuse of power, facilitate timely
management response to change, and ensure that business risks are pre-emptively and
effectively managed.
Ethical Corporate Citizenship:

ITC believes that corporations like itself have a responsibility to set exemplary standards of
ethical behaviour, both internally within the organisation, as well as in their external
relationships. The Company believes that unethical behaviour corrupts organisational culture
and undermines stakeholder value.
49
5.2 ITC CSR Initiatives:
 ITC’s Exemplary Sustainability Initiatives
Image 14: CSR Activities
 ITC’s Environmental Stewardship
Image 15: CSR Environment wellbeing Activities.
50
5.2.1 ITC e-Choupal initiative:

The ITC e-Choupal initiative is a powerful illustration of a unique and innovative model that
delivers significant societal value by co-creating markets with rural communities. A network
of village internet kiosks – e-Choupals – enable even small and marginal farmers in rural
India, who are de-linked from the formal market, to access real-time weather and price
information, and relevant knowledge and services to enhance farm productivity, quality and
command better prices – improving their competitiveness and capacity to manage risk.
Complementing this digital infrastructure is Choupal Pradarshan Khet- customised agri-
extension services, demonstration plots and training programmes that promote best practices
and assist farmers to diversify crop portfolios. The ITC e-Choupal initiative has emerged as
an efficient two way channel for a variety of goods and services, raising farm incomes and
making farming more profitable. In line with ITC’s commitment to the triple bottom line
philosophy, the Company is leveraging the e-Choupal platform to support holistic
development of rural communities in and around e-Choupal catchments through a number of
initiatives- agarbatti manufacturing, dairy management and skills development – aimed at
stimulating non-farm incomes and creating sustainable livelihood opportunities. This
endeavour also includes the Swasthya Choupal initiative that focuses on enhancing awareness
on maternal and child care through a network of Village Health Champions.
5.2.2 Afforestation:
A key plank in ITC’s natural resource management strategy and a pioneering venture in
wasteland development, ITC’s Social & Farm Forestry Programme brings multiple social and
environmental benefits. It enables farmers who own wastelands and lands with low levels of
productivity to grow commercially viable pulpwood plantations, thereby turning an
unproductive asset into a profitable one. To ensure the commercial viability of these
plantations, ITC invested in extensive R&D to develop fast-growing clonal saplings that are
disease-resistant and have a higher rate of survival in harsh conditions. Under the Social
Forestry component of the Programme, tribals and marginal farmers are assisted with loans,
subsidised clonal stock and extension services. Farm Forestry targets farmers with investible
incomes. On harvest, farmers are free to transact at will and sell to whoever they choose. ITC
could have chosen the easier route of importing pulp, rather than the more difficult option of
mobilising tribal and marginal farmers which required long gestation and substantial
investment exposure. However, adopting the more challenging route has not only created a
51
source of sustainable livelihoods for a large number of poor families, but has generated large-
scale green cover that contributes significantly to groundwater recharge, soil conservation
and carbon sequestration. Adopting the agro-forestry model that combines tree growing with
crop production, the Programme ensures both food and wood security as well as helps in the
conservation of precious natural resources. ITC has been conferred the Forest Management
certification from the Forest Stewardship Council, which confirms compliance with the
highest international benchmarks of plantation management in terms of being
environmentally responsible, socially beneficial and economically viable.
5.2.3 Soil & Moisture Conservation

Recognising the vital role played by water and irrigation in the rural economy, ITC’s Soil &
Moisture Conservation Programme supports watershed development projects in water-
stressed areas, providing precious water resources for agriculture, rural communities and
livestock. The focus is on building, reviving and maintaining water harvesting structures as
well as implementing other measures which help to reverse land degradation, provide critical
irrigation and increase agricultural productivity. Adopting a participatory approach, ITC
works with NGOs to mobilise local communities to form water user groups. These groups are
trained to carry out the entire spectrum of activities from planning to execution, including
monitoring of work and future maintenance of structures. The groups are also trained to
formulate regulations and fix water user charges which go towards creating a fund used to
maintain existing structures and build new ones. ITC has also entered into public-private-
people partnerships with several state governments and NABARD, bringing together
government and corporate resources to undertake watershed development projects with
considerably greater scale and impact. Currently, these projects are targeting to cover over
3,90,000 acres in some of India’s most drought prone regions.
5.2.4 Livestock Development

Animal husbandry plays an important role in the economy of rural India with over 70% of
households owning milch animals. Adopting an integrated animal husbandry services
approach, ITC’s Programme aims to assist cattle-owners to increase the productivity of their
animals and improve milk quality. Targeting marginal households, comprehensive services,
including artificial insemination, animal feed and healthcare management, are provided right
at the doorstep through village Cattle Development Centres managed by trained local
community members. Milk yields from cross-bred progeny are significantly higher,
52
generating substantial supplementary incomes from surplus milk sales, paving the way for
dairying to emerge as a viable livelihood option. This income also acts as a cushion in times
of crop failure.
5.2.5 Women Empowerment

Specifically designed for women from economically weaker sections of rural communities,
ITC’s Women Empowerment Programme aims to provide them with sustainable economic
livelihood opportunities through financial assistance as well as skills training. Women are
motivated to form micro-credit self-help groups so that they can build up small savings,
finance self-employment and micro-enterprises.
ITC is also working towards making agriculture more inclusive by enabling marginal women
farmers to enhance their knowledge and skills in modern agricultural practices. Farmer field
schools exclusively for women agriculturalists cover a wide range of best practices, such as
improved seeds and balanced fertilisers, as well as techniques for scientific land use and
water conservation. Assisted by ITC, women’s self-help groups have recently started farm
mechanisation equipment hire centres and tree sapling nurseries. Acting collectively, women
have also formed solid waste management groups that undertake door-to-door garbage
collection, segregation of waste as well as making and selling organic manure. These small
ventures have the potential to grow into successful and profitable independent enterprises in
the future.
One of ITC’s interventions targets Ultra Poor women with the objective of mainstreaming
them socio-economically over a period of time. ITC assists these women with productive
income generating assets, supported with intensive handholding, counselling, on-job
assistance, training and local level facilitation with the aim of bringing them into the financial
mainstream.
Enabling women to earn independent incomes has a positive impact on their families and
communities as it is spent largely on their children’s education, health and nutrition and is a
powerful catalyst for gendering development and supporting social inclusion.
5.2.6 Primary Education
ITC’s Primary Education Programme addresses the lack of quality primary education in rural
communities. Aiming to strengthen the government primary schools’ vast network by
stemming drop-outs, increasing enrolments and improving learning outcomes, the
53
Programme puts in place mutually reinforcing interventions that are coordinated to support a
move towards child friendly schools. Infrastructural assistance is provided to government
schools, ranging from books, teaching aids and furniture to classrooms, separate toilets for
boys and girls, libraries, cooking/kitchen facilities and playground /sports equipment.
Focusing particularly on sanitation and health, students and teachers are trained on WASH
(Water, Sanitation, Hygiene) principles, and students are motivated to form WATSAN
(Water and Sanitation) Committees and Child Cabinets to take ownership of WASH areas in
schools, helping to promote behavioural change among children in their formative years. The
Read India Plus initiative, in partnership with the NGO, Pratham, was introduced in 2013.
Utilising an innovative pedagogy, it is geared towards helping children between the ages of
6-14 to achieve all five competencies – Listening, Speaking, Reading, Writing and Doing.
The Programme also works to strengthen school management committees and build capacity
among teachers to ensure that infrastructure can be sustainably maintained in the long run.
Active engagement with parents is encouraged, towards developing collaborative
partnerships in building the community’s stake in ensuring that more and more children are
able to complete their schooling.
5.2.7 Skilling & Vocational Training

ITC’s skilling initiative for boys and girls focuses on employability and employment linkages
with the larger purpose of empowering rural communities and creating sustainable livelihood
opportunities. The initiative aims to build market relevant skills so as to make potential job
seekers industry-ready and employable in the manufacturing and service sectors. It focuses
on the most marginalised sections of communities, including women. As part of ITC’s
affirmative action plan, it also targets Scheduled Castes and Scheduled Tribes – among the
most socially and economically disadvantaged. The initiative offers training in market-linked
skills for the hospitality, automotive, electrical, retail, computers and construction sectors as
well as in a range of trades and services – tailoring, beautician, bedside nursing and security.
Courses run for 4 to 12 weeks, depending on the skill. On completion, placement camps are
organised to facilitate employment opportunities.
5.2.8 Health & Sanitation

Open defecation remains a persistent and pervasive problem across the country. It is
particularly acute in rural areas where there is a lack of awareness regarding the causality
between open defecation and health related issues, especially of diarrhoeal diseases which are
54
a major cause of child mortality in India. ITC’s Health & Sanitation initiative seeks to
address this serious issue by supporting the building and usage of low-cost family-owned
toilets in the catchments of its manufacturing units, the majority of which are located in rural
areas. ITC’s strategy is centred on galvanising a people’s movement and mobilising
empowered grassroots institutions that take the lead in building family-owned toilets.
Intensive awareness generation programmes customised to target men, women and children
combined with a mandatory financial contribution from participating families help to ensure
high and sustained usage levels of the constructed toilets. Wherever possible, the initiative
works in active collaboration with government sanitation schemes.
5.2.9 ITC – Pioneering the Green Building Movement in India:

Reflecting its commitment to a green growth strategy, ITC has been in the vanguard of the
green building movement in India. Green buildings are a vital plank in ITC’s agenda for
positive environmental action. All its premium luxury hotels are LEED®* Platinum certified.
Over the years, several ITC properties — including factories and employee residences —
have also been LEED® certified. Some properties have also received 5 star ratings from
GRIHA, the highest Indian rating for green buildings, and the Bureau of Energy Efficiency
(BEE). The ITC Green Centre in Gurgaon, headquarters of ITC’s Hotels Division, is the
highest rated green building in the world. In 2004, the centre was one of the first and largest
commercial buildings in the world to receive Platinum LEED® certification from the US
Green Building Council (USGBC). ITC Grand Chola in Chennai is the world’s largest
LEED® Platinum hotel. Recently, ITC Sankhya, the ITC Group’s data centre in Bengaluru,
received the LEED® Platinum certification, becoming the world’s first data centre to receive
the US Green Building Council’s (USGBC’s) highest certification.
5.2.10 ITC Hotels- Trailblazer in Responsible Luxury

ITC has redefined the fine art of hospitality in myriad ways through its hotel chain that spans
a network of around 100 hotels. The group’s super-premium luxury hotels – the iconic ‘ITC
Hotels’ – not only offer unmatched hospitality but have also set new standards of excellence
in cuisine, guest experiences and environmental performance.
The world’s first and largest green hotel chain, ITC Hotels’ signature properties have created
new benchmarks in responsible hoteliering by delivering a unique value proposition,
‘Responsible Luxury’ that integrates international green best practices with contemporary
55
design, harnessing every element of nature in an inspired setting to create a footprint that
contributes to being planet positive. Every hotel in the ITC Hotels luxury chain is LEED® *
Platinum certified Today, all 11 of ITC’s super-premium luxury hotels are certified ‘green
buildings’, having received the prestigious LEED® Platinum certification from either the US
Green Building Council (USGBC) or the Indian Green Building Council (IGBC), further
reinforcing the chain’s commitment to perform to the highest standards of energy, water and
waste efficiency. ITC Grand Chola in Chennai is the world’s largest LEED® Platinum
certified Green Hotel in the New Construction category.
The ‘Responsible Luxury’ commitment of ITC Hotels is manifested in its own carbon, water
and waste sensitive operations and by its contributions to ITC’s larger social investments in
afforestation, water harvesting and waste recycling, providing sustainable livelihoods to
many.
Supporting the Differently Abled ITC’s Hotels Business is proactively engaged in creating
opportunities for differently abled people and generating awareness among potential
employers. It has also prepared two handbooks, ITC Hotels Disability Handbook for
Industry’ and ‘A Guide to Universal Design in Built Environments: A Guide for Creating
Accessible Building Infrastructure for Persons with Disability’, to guide industry action in
this endeavour.
5.2.11 Renewable Energy at ITC

In line with its conscious strategy to lower its carbon footprint, ITC has steadily enlarged its
clean energy portfolio. Currently, renewable sources and carbon neutral fuels provide over
48% of the Company’s total energy consumption. ITC aims to progressively raise this to 50%
by 2020.
Several of the Company’s factories, facilities and premium luxury hotels, including its iconic
property in Chennai, ITC Grand Chola, as well as the ITC InfoTech Park are powered by
wind energy.
Renewable energy sources in ITC comprise the following:

 Black liquor waste from the pulping process and waste wood biomass from chipping
operations in the Bhadrachalam Unit of ITC’s Paperboards & Specialty Papers
Business.
56
 Locally sourced chip/sawdust and deoiled bran as boiler fuel in the Kovai Unit.
 Wind Energy farms for Packaging & Printing, FMCG, Hotels and Paperboards &
Specialty Papers Businesses.
Improved utilisation of carbon neutral biofuels in the Paperboards & Specialty Papers
Business and the year round year operations of wind power projects in Maharashtra and
Tamil Nadu contribute to increased utilisation of renewable energy.
5.2.12 WOW (Well-being Out of Waste)

In line with its commitment to creating larger environmental and societal value through
collaborative action, ITC launched its Well-being Out of Waste (WOW) initiative a few years
ago to promote resource conservation and recycling. WOW creates awareness about the
importance of “Reduce-Reuse-Recycle” in protecting and restoring the environment among
the general public, school children, corporates and people from every walk of life. It also
inculcates the habit of source segregation and provides recyclables for a number of industries,
eg. Paper, glass, plastic, etc. Implemented in collaboration with municipal corporations, today
WOW is operational in 417 municipal wards of Hyderabad, Chennai, Bengaluru,
Coimbatore, Delhi, Tirupati and Muzaffarpur. Over 64 lakh citizens, 25 lakh school children
and 2,000 corporates are supporting WOW, which helps augment green cover, conserves
scarce natural resources, and makes surroundings clean and healthy. The initiative has also
created livelihood opportunities for 13,500 rag pickers and waste collectors. Similar
programmes are also operational in several districts in Saharanpur, Hooghly, Kolkata,
Munger, Guntur, Madurai, Pune, Thiruvallur, Chennai and Haridwar.
Image 16: ITC CSR Acitvites to improve nature.
57
Image 17: ITC CSR Activites for the improvement of people
Image 18: ITC CSR Activates for the health and energy conservation.
Image 19: Independence Day Special 72Kg Bar.
58
5.3 Rating by agencies like S&P, CRISIL, ICRA etc.

 ICRA:
ICRA has assigned a CGR2 rating to the Corporate Governance practices of ITC Limited.
This is on a rating scale of CGR1 to CGR6 where CGR1 denotes the highest rating. The
CGR2 rating implies that in ICRA’s current opinion, the rated Company has adopted and
follows such practices, conventions and codes as would provide its financial stakeholders a
high level of assurance on the quality of corporate governance. ICRA’s opinion, however, is
not a certificate of statutory compliance or a comment on the rated Company’s future
financial performance, credit rating or stock price. This is the first Corporate Governance
rating of its kind in the country.
ICRA’s Corporate Governance Rating (CGR) is meant to indicate the relative level to which
an organisation accepts and follows the codes and guidelines of corporate governance
practices. Corporate Governance practices prevalent in a company reflect the distribution of
rights and responsibilities among different participants in the organisation such as the Board,
management, shareholders and other financial stakeholders and the policies and systems laid
down and followed for making business decisions. The emphasis of ICRA rating is on a
corporate’s business practices and quality of disclosure standards that address the
requirements of the regulators and is fair and transparent to its financial stakeholders.
The variables, which have been analysed for arriving at the rating, are the shareholding
structure, governance structure and management processes, board structure and processes,
stakeholder relationship, transparency/disclosures and financial discipline including
transactions with subsidiaries and associates. Each of these variables have been evaluated
with respect to a set of attributes and a composite score is computed using a proprietary
model developed by ICRA.
The `High level of Corporate Governance’ rating reflects ITC’s transparent shareholding
structure, well-structured management decision making processes with adequate delegation
of powers and sound Board structure and process. Further, in ICRA’s opinion, the
composition of the Board as well as the Board Committees, frequency of meetings, quality of
agenda papers and the Board’s involvement in the decision making process satisfy the
requirements of good corporate governance. The rating also reflects conformity with the
provisions of Clause 49 of the Listing Agreement, even though the rating is not to be
59
interpreted as an indicator for statutory compliance. The rating also factors in the level of
disclosure in the Annual Report and the Company’s decision to balance the extent of
disclosures in the Annual Report with the need to protect shareholder interest in a competitive
environment.
The Company’s corporate strategy aims at creating multiple drivers of growth anchored on its
core competencies. The Company is currently focussed on four business groups : FMCG,
Hotels, Paperboards, Paper & Packaging and Agri Business. Despite the gestation cost of
some of its recent investments and the restructuring costs on account of exit from edible oils
and financial services business, the Company has been consistently earning a high level of
Return on Capital Employed and has a sound track record in terms of investor servicing as
well as dividend payout.
 CRISIL:
CRISIL has reaffirmed its ratings on the bank facilities of ITC Ltd (ITC) at
'CRISIL AAA/Stable/CRISILA1+'.
The ratings continue to reflect ITC's excellent business risk profile with a presence in diverse
businesses, dominant position in the Indian cigarette market, and strong sustainable
profitability. The ratings also factor in the company's exceptionally strong financial position.
These rating strengths are partially offset by ITC's exposure to risks inherent in its various
businesses.
Long Term Rating CRISIL AAA/Stable (Reaffirmed)
Short Term Rating CRISIL A1+ (Reaffirmed)
Table 8: CRISIL Rating.
Key Rating Drivers & Detailed Description

Strengths:
* Dominant position in the Indian cigarette industry
ITC is the leader in the Indian cigarettes market. Strong brand, wide product portfolio,
established distribution network, and strong research and development capability, have
enabled the company to consolidate its position as the market leader. The company benefits
from the strong brand loyalty of cigarette smokers, as reflected in its sustained market share
60
over the years. ITC's cigarette business revenue grew at around 10% CAGR over the past
three years and profitability maintained, notwithstanding the increase in duties. The company
also exports cigarettes to the US and the Middle East.
* Healthy revenue diversity

ITC over the years has evolved from a pure tobacco company into a well-diversified business
conglomerate, with a strong presence in paperboards, printing and packaging, agricultural
commodities, hotels, branded packaged foods, personal care products, branded apparel,
stationery, safety matches, agarbatti (incise sticks) and other fast-moving consumer goods
(FMCGs). The company has also added luxury chocolates and ghee business to its branded
packaged foods segment.
Weakness:
* Exposure to regulatory risk in the cigarette business, and vulnerability of other business
segments to economic cycles
ITC, however, remains exposed to risks inherent in the individual business segments in which
it operates. These include regulatory risks in the cigarette business such as increase in taxes,
and competitive pressures in the FMCG segment. These risks are partially offset by focus on
building cost efficiencies, and strong backward integration in the cigarette business through
its leaf tobacco and packaging businesses, and also in the agricultural commodity and
packaged food business through its e-choupal initiative.
5.4 Recognitions for ITC’s Sustainability Initiatives
ITC constantly endeavours to benchmark its products, services and processes to global
standards. The Company's pursuit of excellence has earned it national and international
honours. ITC is one of the eight Indian companies to figure in Forbes A-List for 2004,
featuring 400 of "the world's best big companies". Forbes has also named ITC among Asia's
'Fab 50' and the World's Most Reputable Companies.
 Porter Prize 2017 in two categories – ‘Excellence in Corporate Governance and
Integration’ and exemplary contribution in ‘Creating Shared Value’
61
 Ranked ‘India’s Most Admired Companies’ in a survey conducted by Fortune India

magazine and Hay Group
 United Nations Global Compact Network India’s (UN-GCNI) ‘1st Best Practices Awards
– Sustainable Development Goals (SDGs)’ 2017 in the category SDG 15: Life on Land
for ITC’s Integrated Natural Resource Management Programme covering its initiatives in
Watershed Development and Afforestation
 ASSOCHAM Waste Management Excellence Awards 2017 in two categories – ‘Best
Corporate Initiative in Swachh Bharat Abhiyan’ and ‘Best Outreach Strategy in Waste
Management’
 India Today Safaigiri Award 2016 in the category ‘Corporate Trailblazer’
 ITC Chairman, Mr Y C Deveshwar, conferred the ‘Economic Times Smart Green Leader
Lifetime Achievement Award’
 Best in Supply Chain Sustainability at the Asian Corporate Sustainability Summit 2016
FICCI Water Awards 2016 in the category ‘Community Initiatives by Industry’
 FICCI CSR Awards 2016 in two categories – ‘Environmental Sustainability’ and ‘Health,
Water & Sanitation’
 World Business and Development Award 2012 for ITC’s Social and Farm Forestry
Programmes, presented at the Rio +20 United Nations Summit
 Inaugural World Business Award instituted by UNDP for the ITC e-Choupal initiative
 Development Gateway Award for ITC e-Choupal’s contribution to Information &
Communication Technologies for Development
 Stockholm Challenge Award for the ITC e-Choupal initiative
 UNESCO - Water Digest Corporate Social Responsibility Crown Award for Water
Practices
 UNIDO Award at the International Conference on Sharing Innovative Agribusiness
Solutions
 Intel AIM Corporate Responsibility Award 2016, accorded by the Asian Institute of
Management - RVR CSR Center and the Asia Inc Forum
 SAM / SPG Sustainability Leadership Award conferred on Mr Y C Deveshwar,
Chairman, ITC Limited
 Karnataka State Environment and Ecology Awards
 FICCI Outstanding Vision Triple Impact Corporate Award
 FICCI Award for Outstanding Achievement in Rural & Community Development
62
 12th Business world FICCI Corporate Social Responsibility Award in the Large
Enterprise category for ITC’s Social Investment initiatives
 CII Water Excellence Award for ITC’s Integrated Watershed Development Programme
 CII Best Environmental Practices Award for ‘ITC’s WOW’ initiative
 TERI Corporate Social Responsibility Award for the ITC e-Choupal initiative
 AIM Asian CSR Award for ITC’s contribution in creating sustainable livelihoods and
fostering economic growth for rural communities
 Asian CSR Award for Environmental Excellence
 ITC is the first Indian company to gain membership to the World Wildlife Fund Global
Forestry & Trade Network ( WWF - GFTN ) for its responsible forestry initiatives
 NCPEDP ( National Centre for Promotion of Employment for Disabled People ) Shell-
Helen Keller Award for the ITC-Welcomgroup chain
 NGO Box CSR Impact Awards – CSR Impacts in Livelihoods
 Agriculture Today’s 7th Agriculture Leadership Awards – Environment Leadership
Awards
 Subir Raha Centre for Corporate Governance – Corporate Social Responsibility Awards
 Project Management Institute Award – Project of the Year – Contribution to the
Community
63
Conclusion
ITC, India’s fourth largest company by market capitalisation. After all, ITC itself is also a
study in contrasts- trying to emerge as a modern diversified fast moving consumer goods
(FMCG) player, while trying to shed its cigarette and tobacco legacy.
ITC tries to tap the synergies between its older and newer businesses. But these days, its top
brass rarely talks about cigarettes, its bottom line mainstay. Most of ITC’s communication
and investments are around FMCG- its growth engine. But the market still values the
company on the basis of the cigarette business.
In 2016-17, cigarettes had accounted for 58 per cent of its revenue, and 85 per cent of its net
profit. The stock tanks on the bourses if taxes on cigarettes go up. It has remained subdued
for almost a year because of fear of impact due to the goods and services tax (GST).
Over the past two decades, ITC has tried hard to shed its cigarette-maker tag. The question is,
has ITC done enough to set itself on course to emerge as a company that does not depend on
cigarettes, and will it complete the journey anytime soon? The FMCG growth engine would
continue to expand and that finding synergy between the older businesses (not just tobacco,
but also hotels, paper and information technology) was key to ITC’s success. The journey to
diversify the company started a long time ago, it only got traction in the past 10 years. The
first decade was focused on preparing the company for the transition. ITC now has the ability
to innovate products, create brands and allow “pro-neurs” or professional entrepreneurs to
build businesses in FMCG.
The company wants to achieve FMCG turnover of Rs 1 lakh crore by 2030. In 2016-17,
ITC’s FMCG arm had clocked a turnover of Rs 10,000 crore, and in the nine months ended
December 31, 2017, it crossed Rs 8,000 crore. To compare, FMCG major Hindustan Unilever
reported a revenue of Rs 34,487 crore in 2016-17. ITC already has 25 “mother brands”
(Sunfeast, Ashirvaad, etc) in its FMCG portfolio targeted at market segments, and expansion
plans will involve filling in the sub-segments covered by these brands with sub-brands and
product variations.
It has been our resolve to build an exemplary Indian enterprise that would create enduring
value for our country. An organisation that would adopt the credo of putting ‘India First’ –
64
keeping Country before Corporation and the Institution before the Individual. Over the years,
the patriotic sense of ‘India First’ has grown into a full-blown aspiration to be a National
Champion subserving the country’s larger priorities. This is not only manifest in the creation
of world class. Indian brands, but also in the Triple Bottom Line goals of the Company to
nurture larger societal value. The need to sustain global competitiveness in economic value
creation, whilst simultaneously creating larger societal value, has led to innovation in
business models that seek to synergise the building of economic, ecological and social capital
as a unified strategy. A new paradigm of growth is today called for – an integrated Triple
Bottom Line approach that builds competitiveness whilst at the same time ensuring that the
environment is nourished and large-scale sustainable livelihoods are created. This can be
called as paradigm ‘Responsible Competitiveness’, which to the sense is a pre-requisite to
creating a more sustainable future.
‘Enterprises of Tomorrow’ can bring in transformational change by making societal value

creation a conscious strategic decision and not one that banks on corporate conscience alone.
ITC has always believed that businesses possess unique strengths to make a larger
contribution to society. If the creative and innovative energies that businesses employ to
create world-class
products and brands are leveraged to deliver social initiatives that serve a larger national
objective, it can have a transformative impact on society. It is this belief that has spurred ITC
to craft innovative strategies that orchestrate a symphony of efforts aimed at enriching the
environment, creating sustainable livelihoods, empowering local communities and addressing
the challenge of climate change.
65
Bibliography
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MIT- WPU, Faculty of Management

Enterprise Analysis and Desk Research Report on

18MBAOPE044 Rupam W. Rathod

MIT-World Peace University’s

Prof. Dr. Chetan Chaudhari Prof. Meenal Pendse

Prof. Dr. Sayalee Gankar

18MBAOPE044 Rupam W. Rathod

18MBAOPE045 Siddharth H. Sanghani

18MBAOPE046 Gajanad Rahul Rao Sangoji

18MBAOPE048 Gaurav V. Suryawanshi

18MBAOPE049 Taha K. Saifee

18MBAOPE064 Amay S. Dambhare

Faculty of Management- PG, MITWPU, Pune, for giving us an opportunity to work on a

(Academics), Faculty of Management- PG, MITWPU, Pune.

the stipulated time.

18MBAOPE044 Rupam W. Rathod

18MBAOPE045 Siddharth H. Sanghani

18MBAOPE046 Gajanad Rahul Rao Sangoji

18MBAOPE048 Gaurav V. Suryawanshi

18MBAOPE049 Taha K. Saifee

18MBAOPE064 Amay S. Dambhare

2 Organization Structure & Geographic Presence: 16

6 Findings and Conclusions 64

Table No. Name of Table Page No.

Chart No. Name of Chart Page No.

Figure No. Name of Image Page No.

Chapter 1: Enterprise Background

1.1 Enterprise Background

1.1.2 Company Profile

 Headquarters in Kolkata, West Bengal, India

 The ITC has 32000+ employees

1.1.3 ITC Subsidies

Image 1: ITC Subsidies.

 Packaging and Printing: ITC's Packaging and Printing division operates

1.1.4 Significant Milestones

1925: Packaging and Printing: Backward Integration

1975: Entry into the Hospitality Sector - A 'Welcom' Move

1979: Paperboards & Specialty Papers - Development of a Backward Area

1985: Nepal Subsidiary - First Steps beyond National Borders

1990: Paperboards & Specialty Papers - Consolidation and Expansion

1990: Agri Business - Strengthening Farmer Linkages

2000: Lifestyle Retailing - Premium Offerings

2000: Information Technology - Business Friendly Solutions

2001: Branded Packaged Foods - Delighting Millions of Households

2002: Education & Stationery Products - Offering the Greenest products

2005: Personal Care Products - Expert Solutions for Discerning Consumers

2010: Expanding the Tobacco Portfolio.

1.2 ITC Company

1.2.4 Board Of Directors

Image 2 Sir Yogesh Chander Deveshwar (Chairman)

SIR YOGESH CHANDER DEVESHWAR (CHAIRMAN)

Image 3: Sanjiv Puri (Managing Director)

SANJIV PURI (MANAGING DIRECTOR)

Rajiv Tandon Shilabhadra Banerjee Hemant Bhargava

Arun Duggal Sunil Behari Mathur Nirupama Rao

Image 4: Images of Board of Directors

Chapter 2: Organization Structure

2.1 Organization Structure

Image 5: Board of Directors Hierarchy

The 3-tier governance structure thus ensures that:

Nomination & Compensation Committee: To identify persons qualified to become

Security holders Relationship Committee: To oversee redressal of shareholder and investor

Divisional Management Committee (DMC) : Executive management of the divisional

Chief Operating Officer - Business Vertical (COO - BV):