Final Annual ITC Report

8/3/2019 Final Annual ITC Report

1/31

LOGO

Annual Reportof

ITC Ltd.www.itc.com


2/31

ITC LimitedOne of Indias Most Admired Companies

PRESENTED BY,

MR. ASIF DHALAITMR. SUDHIR MOREMR. MAHESH DESHMUKH

MR. RAMESH KHATUAMR. IMRAN SHAIKH

ITC Annual Report 2010


3/31

Board of Directors

Chairman

Yogesh Chander Deveshwar

Executive Directors

Anup Singh

Krishnamoorthy Vaidyanath

Kurush Noshir Grant

Board Committees

Audit Committee:-

S B Mathur Chairman

A Baijal Member

A V Girija Kumar Member

(Director responsible for the Finance Function)

S Basu Invitee

(Head of Internal Audit)

Representative of the Invitee Statutory Auditors

B B Chatterjee Secretary

ITC Annual Report

2010


4/31

Corporate Management CommitteeDirectors:-

Y C Deveshwar Chairman

A Singh Member

K Vaidyanath Member

K N Grant Member

Executives:-

N Anand Member

A Nayak Member

T V Ramaswamy Member

S Sivakumar Member

K S Suresh Member

R Tandon Member

B B Chatterjee Member & Secretary

Non-Executive Directors

Anil Baijal

Shilabhadra Banerjee

Angara Venkata Girija Kumar



5/31

Serajul Haq Khan Sunil Behari Mathur

Dinesh Kumar Mehrotra

Hugo Geoffrey Powell

Pillappakkam Bahukutumbi Ramanujam

Anthony Ruys

Basudeb Sen

Balakrishnan Vijayaraghavan

Compensation Committee

S H Khan Chairman

A Baijal Member S B Mathur Member

H G Powell Member

B Sen Member



6/31

Investor Services Committee:- A V Girija Kumar Chairman

P B Ramanujam Member

B Sen Member

K Vaidyanath Member

B Vijayaraghavan Member

B B Chatterjee Secretary

Nominations Committee:-

Y C Deveshwar Chairman

A Baijal Member

S Banerjee Member

A V Girija Kumar Member S H Khan Member

S B Mathur Member

D K Mehrotra Member

P B Ramanujam Member



7/31

Sustainability Committee:- Y C Deveshwar Chairman

S Banerjee Member

H G Powell Member

A Ruys Member

B Sen Member

B Vijayaraghavan Member B B Chatterjee Secretary

Executive Vice President & Company Secretary:-

Biswa Behari Chatterjee

General Counsel:- Kannadiputhur Sundararaman Suresh

Investor Service Centre:-

37 Jawaharlal Nehru Road, Kolkata 700 071, India

Phone : 033-2288 6426/2288 0034

Fax : 033-2288 2358

e-mail : [email protected]



8/31

Auditors Deloitte Haskins & Sells

Chartered Accountants, Kolkata

Registered Office

Virginia House

37 Jawaharlal Nehru Road, Kolkata 700 071, India Phone : 033-2288 9371

ITC corporate website : www.itcportal.com



9/31

History:-

ITC Limited is an Indian conglomerate with a turnover of US $ 6 billion and amarket capitalization of over US $ 22 Billion. The company has its registered officein Kolkata.

The company is currently headed by Yogesh Chander Deveshwar. It employs over

26,000 people at more than 60 locations across India and is listed on Forbes 2000.ITC Limited completes 100 years on 24th August, 2010.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCGproducts. While ITC is an outstanding market leader in its traditional businesses of

Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gainingmarket share even in its nascent businesses of Packaged Foods & Confectionery,Branded Apparel, Personal Care and Stationery.



10/31

One ofIndias most valuable and admired companies

One of the 8 Indian Companies to feature in Forbes A-listfor 2004

Featuring 400 of the Worlds best big companieswith M-cap. > USD 5 bln. &

are rated as the most attractive companies for investors

Only Indian FMCG Company to feature in Forbes 2000 List

A comprehensive ranking ofworlds biggest companies measured by a composite

of sales, profits, assets & market value

One of the foremost in the private sector in terms of:

Sustained value creation (BT-Stern Stewart survey)

Operating profits

Cash Profits

Ranks No. 4 among Indian listed Private Sector Companies by market cap.

No. 1 in FMCG Sector

Rated as one ofIndias Most Respected Companies (IMRB-Business world Survey

2006)



11/31

ITC received the FICCI Outstanding Vision Corporate Triple Impact Award 2007 for invaluable

contribution to the triple bottom line benchmarks of building economic, social and naturalcapital for the nation.

Global Leadership Award conferred on Chairman Y C Deveshwar by the US India Business Council

of the US Chamber of Commerce

Sustainability Leadership Award 2007 conferred on Chairman Y C Deveshwar by the

Sustainability Forum, Zurich and SAM/SPG at the International Sustainability Leadership

Symposium

Business Today Award for the Best Managed Company Retail and Consumer Products, has

been conferred on ITC in recognition of its outstanding initiatives in the consumer productssegment.

Ryutaro Hashimoto Incentive Prize 2007 for Environment & Development from the Asia Pacific

Forum

In the first of its kind S&P Environmental, Social and Corporate Governance (ESG) ratings

released recently, ITC ranked second among top Indian companies.

The Company has won the Corporate Social Responsibility Crown Award for Water Practices

from UNESCO and Water Digest for its distinguished work carried out in the water sector in India. ITC Limited won the top UNIDO award at the International Conference on Sharing Innovative

Agribusiness Solutions 2008 at Cairo in recognition for its initiatives in agri business.

ITC has been conferred the ICAI Award for Excellence in Financial Reporting with its Annual

Report and Accounts, adjudged as a commendable entry under the Manufacturing and Trading

Enterprises category.

The Best Corporate Social Responsibility Practice Award 2008 jointly instituted by the Bombay

Stock Exchange, Times Foundation and the NASSCOM Foundation.



12/31

e-Choupal initiative wins global recognition: Stockholm Challenge Award 2006 in the Economic Development category which

recognizes initiatives that leverage Information Technology to improve living

conditions and foster economic growth in all parts of the world.

First Indian Company to win the Development Gateway Award 2005 for the most

exemplary contribution in the field of Information & Communication Technologies

(ICT) for development during the last 10 years

World Business Award 2004: International Chamber of Commerce & the HRH

Prince of Wales & International Business forum

Harvard University case study

Recognized in World Development Report 2008 published by World Bank

Applauded by President of India Dr APJ Kalam in his special address during

the national symposium to commemorate 60th year ofindependence



13/31

Report of the Directors & Management Discussion and Analysis For the FinancialYear Ended 31st March, 2010

SOCIO-ECONOMIC ENVIRONMENT: -

The Indian economy staged a remarkable recovery to grow at 7.2% during the year,facilitated by policy stimulus and increased government spending. A faster pace of

growth in investments, the sharp pick up in capital inflows and a resurgent stockmarket are some of the key positives that augur well for the economy.

ITCs path-breaking Choupal Pradarshan Khet (CPK) aims to enhance farmproductivity by emphasizing agricultural best practices, and is an example of howprivate sector initiatives can complement State interventions to create significantvalue for the Indian farmer.

COMPANY PERFORMANCE (FOREIGN EXCHANGE EARNINGS):-

Net Turnover grew by 16.3% primarily driven by a 20.9% growth in the non-cigaretteFMCG businesses, a 19.8% growth in the Cigarettes business and a 17.4% growth inthe Paperboards, Paper & Packaging segment.



14/31


Paper &PackagingHotels

Agri

Business InformationTechnology

Education & Stationery

Matches Incense Sticks

Cigarettes Foods Personal Care Lifestyle Retailing

Hotels AgriBusiness

Education & Stationery Matches Incense Sticks


15/31

ITC Products

FMCG Cigarettes:-

A punitive and discriminatory approach has resulted in the share of cigarettes intotal tobacco consumption in India progressively declining from 23% in 1971/72 toabout 15% currently.

Despite having only a 15% share of consumption, cigarettes contribute more than85% of the tax revenues from the tobacco sector. Taxes realized from every kilogramof tobacco consumed in the cigarette format are 35 times higher than those from

other forms of tobacco products.

Fast Moving Consumer Goods Others:-

Company has rapidly scaled up presence in its newer FMCG businesses. Segmentrevenues in FMCG (Others) clocked a Compound Annual Growth Rate of 38% in thelast 5 years.

Branded Packaged Foods:-

The Branded Packaged Foods Business will continue to leverage Research &Development to launch innovative and differentiated products across variousplatforms of taste, energy, health and wellness.

Lifestyle Retailing:-

Wills Lifestyle is now available at 56 exclusive stores in 30 cities and in more than150 shop-in-shops in leading departmental stores.



16/31

Education & Stationery Products:-

The Education & Stationery Products business has enlarged its distribution footprint to cover 2,800markets, over 1,000 wholesale dealers and 72,000 stationery retail outlets.

Incense sticks (Agarbattis):-

In line with the Companys commitment to the Triple Bottom Line, the Agarbatti business provideslivelihood opportunities to more than 8000 under-privileged women across India.

Personal Care Products:-

The Personal Care Products business continued to roll out its product portfolio under the Essenza

Di Wills, Fiama Di Wills, Vivel Di Wills, Vivel and Superia brands across new geographies.Fiama Di Wills Gel Bathing Bar was voted Product of the Year in the soaps category based on asurvey of over 30,000 households by AC Nielsen.

HOTELS:-

ITC Royal Gardenia, Bengaluru achieved the distinction of being the worlds largest hotel and thefirst in Asia to receive the LEED Platinum Rating for green buildingsyet another expression ofResponsible Luxury.

PAPERBOARDS, PAPER AND PACKAGING:-

The state-of-the-art paper machine commissioned in 2008 operated to full capacity during the year,enabling your Company to make a significant entry into the Paper segment. ITC is the marketleader in the Paperboards segment with a value market share of around 26%.

Your Company became a member of the WWF Global Forest and Trade Network, the first IndianCompany to have been so invited. ITC has also won the Forest Stewardship Councils Chain of

Custody certification, a global industry benchmark for sustainable development, for its units at

Bhadrachalam and Kovai.



17/31


Packaging and Printing:-

ITCs Packaging and Printing business won several national awards for excellence in

printing, as well as the World Star award for excellence in packaging. The Munger unithas been certified at Level 8 of the International Quality Rating System.

Cigarette Leaf Tobacco:-

Your Company strengthened its position as the foremost supplier of quality Indiantobaccos in the global market, achieving a record export growth of 86% over last year.

Agri Commodities:-

ITC continues to train farmers to deploy organic farming techniques, Good Agriculture

Practices and product traceability systems through demonstration plots and extension

services designed to help them obtain international organic certification.

Your Companys neem-based organic manures such as Wellgro Soil, Wellgro Grains andWellgro Crops continue to gain wide acceptance. These products were endorsed by theEuropean Agency Control Union as organic inputs under stringent quality specifications ofthe National Program on Organic Production.


18/31

ITC Subsidiaries. Surya Nepal Pvt. Ltd:- Notwithstanding the challenging socio-political environment, the

companys growth and performance continued on an upward trajectory. In the twelve-monthperiod

ended 13th March 2010, the companys sales grew by 30%.

ITC Infotech India Limited:- Despite the severe challenges resulting from such adversemarket conditions, the company grew total income for the year by 8% and significantly improved itsprofitability. New customer acquisitions and renewed.

Russell Credit Ltd:-During the year, the company registered an income ofRs. 51.81 crores anda Profit After Tax of Rs. 41.93 crores.

Wimco Limited:- Inspite of the growth in sales and realizations, the company posted a net lossfor the year of Rs. 16.24 crores against a net profit of Rs. 1.12 crores in the previous year, primarilyas a result of steep increases in input costs.

Srinivasa Resorts Limited:-The financial performance of the companys hotel at Hyderabad,ITC Kakatiya, was adversely impacted by the continuing economic slowdown and the political

instability in the State. Fortune Park Hotels Ltd:- During the financial year ended 31st March, 2010, the company

recorded an income of Rs. 1492 lakhs.

Bay Islands Hotels Limited:-During the year 2009-10, the company earned an income of Rs.101.08 lakhs.

Landbase India Limited:



19/31


Technico Pty Limited:

King Maker Marketing Inc:

ITC Global Holdings Pte. Ltd:

BFIL Finance Limited:

Joint Ventures of ITC

ITC Filtrona Limited

ITC Filtrona Limited delivered another year of robust business growth withGross Sales at Rs. 135 crores growing by 19% over the previous year. However,pricing.Maharaja Heritage Resorts Limited: Welcom Heritage brand and continues togrow with another 13 properties under development.Risk ManagementGovernment Policies, Sustainability Contribution to the Triplebottom Line,R&D, Quality and Product Development, Luxury Tax, Recovery of dues from theChitalias and Directorate, Treasury Operations.

CONCLUSION

Companys Board and employees are inspired by their Vision of sustaining

ITCspositionas one of Indias most admired and valuable companies

throughworld-class performance, creating enduring value for all stakeholders,including the shareholders and the Indian society.


20/31



21/31



22/31


NotesCapital:- Issued & Subscribed 3,81,81,76,790 Ordinary Shares of Re.1.00 each, fully paid(2009 - 3,77,43,99,560 Ordinary Shares of Re.1.00 each, fully paid).

Loans to Subsidiaries comprise of : ITC Infotech India Limited Rs.110.88 Crores (2009 -Rs.162.04 Crores)BFIL Finance Limited Rs. 32.55 Crores (2009 - Rs. 32.99 Crores) LandbaseIndia Limited Rs. Nil (2009 - Rs. 40.00 Crores) Russell Credit Limited Rs. Nil (2009 - Rs. 4.10

Crores).

Liabilities :- There is no amount due and outstanding to be credited to Investor Education andProtection Fund. For this purpose an amount of Rs. 0.30 Crore (2009 - Rs. 0.30 Crore)maintained with a bank has not been considered on account of a pending legal dispute for whichthe Company has filed a suit. Includes amounts due to Subsidiary Companies Rs. 54.63 Crores(2009 - Rs. 22.16 Crores). (The maximum outstanding during the year was Rs. 396.90 Crores;2009 - Rs. 31.04 Crores). Includes Loans to Directors and to Company Secretary - Rs. 0.39 Crore(2009 - Rs. 0.46 Crore). (The maximum indebtedness during the year was Rs. 0.46 Crore; 2009 -Rs.0.87 Crore). Includes Capital Advances of Rs. 264.69 Crores (2009 - Rs. 439.89 Crores).

Other Incomes:- The Income from Investments and Interest are stated Gross, the amount ofIncome Tax deducted is Rs. 16.80 Crores (2009 - Rs. 14.

Depreciation :- for 2010= For 2010=3825.46 and for 2009=3286.74.

Provision for Taxation:- for 2010=For 2010=4549.94 and For 2009=1729.51.


23/31



24/31



25/31



26/31



27/31



28/31



29/31



30/31



31/31

LOGO

www.itc.com

Documents

Final Annual ITC Report