ITC Ltd.

India’s one of the best managed company.

June 03, 2007
Ashwin Lahurikar
Maitreya Nalawade
Ruchi Rathi
Sandeep Rithe
Vikin Jain
Vikrant Paranjape

ITC Ltd. The name says it all. It is India’s FMCG giant having spread its business to various fields like
paper manufacturing, perfume and clothes distribution, manufacturing of eatables like biscuits and ready to
eat food and hospitality. ITC Ltd always follows best ethical practices in its business helping it to create
goodwill and grow at a good pace. We have scaled the company on different parameters to check its success
which are as follows.

Customer Perspective-

The company gives top priority to its consumers. The foods business carries forward ITC’s proud
tradition of delivering world class products to the consumer. All its products are crafted on the
basis of deep consumer insights developed through extensive research. ITC’s understanding of
the Indian consumer is reflected in the increasing confidence respond in its products. Learning
from consumer research help identify existing and emerging consumer needs. The continuous
flow of research backed information helps ITC create products that provide newer and superior
benefits.

ITC’s farmer linkages provide an unbeatable quality and cost advantage to the consumer. This
value proposition is further enhanced by ITC’s vast experience in manufacturing. Its international
benchmarked processes ensure best in class quality. The ITC R&D centre provides product
development and analytical laboratory support.

Taking consumer insights and the company’s inherent culinary strengths to the next level of
consumer engagement of ITC’s cutting edge Product Development Centre. The centre has been
the driving force behind the business right from its inception.

Investor Perspective-

Investors are always happy to in vest in ITC Ltd, as a steady and risk free growth is assured all
the time. The company is giving good returns to its investors in form of dividend and bonus
shares. ITC's Investor Service Centre (ISC) provides share registration and other related services
from its office located at the Company's headquarters in Kolkata. Such services are provided by a
dedicated and trained team of professionals backed by state-of-the-art infrastructure. ITC is
registered with SEBI as Category II Share Transfer Agent.
The ISC is accredited with the coveted Quality Management System certification ISO 9001: 2000
for its investor servicing and other related activities.
ITC is one of the very few companies to get such certification in respect of activities relating to
investor servicing. This certification demonstrates that ISC has a very high degree of control in
respect of compliance with statutory and regulatory requirements and a very effective and
efficient complaint redressal mechanism.
Global perspective-

ITC Sonar Bangla, Kolkata has become the first hotel in the world to obtain Certified Emission
Reductions (CERs) issued under the aegis of the United Nations Framework on Climate Change
Convention. These CERs, also known as Carbon Credits, are issued under the Clean
Development Mechanism (CDM) of the Kyoto Protocol. The CERs have been issued after an
exhaustive evaluation process. Carbon Dioxide emission reduction has been achieved through
energy conservation initiatives such as waste heat recovery, improved pumping systems and
better efficiencies in the air conditioning system.

Not only have the energy conservation initiatives helped reduce the environmental footprint of
ITC Sonar Bangla and earned tremendous goodwill from all stakeholders, the hotel will save Rs
83 lakhs per year, nearly 19% of the hotel's total annual energy bill. This achievement opens the
door for the entire services sector to invest in clean development mechanisms and support global
effort in mitigating adverse effects of climate change caused by global warming.

ITC Sonar Bangla's unique achievement reflects ITC's commitment to contributing to the `triple
bottom line' of economic, social and environmental capital of the country. This approach has
already made ITC a Carbon and Water positive corporation and will make it a `zero solid waste'
company in the next two years.

Innovations-

e-choupal

ITC’s International Business Division, one of India’s largest exporters of

agricultural commodities, has conceived e-Choupal as a more efficient supply chain
aimed at delivering value to its customers around the world on a sustainable basis. The e-
Choupal model has been specifically designed to tackle the challenges posed by the unique
features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the
involvement of numerous intermediaries, among others.
‘e-Choupal’ also unshackles the potential of Indian farmer who has been trapped in a
vicious cycle of low risk taking ability, low investment, low productivity, weak market
orientation, low value addition, low margin, low risk taking ability. This made him and
Indian agribusiness sector globally uncompetitive, despite rich & abundant natural
resources.
The ITC e-Choupal and Choupal Saagar infrastructure - a combination of digital, human
and physical assets - already serves over 3.5 million farmers and is potentially an efficient
delivery channel for rural development.

ITC InfoTech

The company offers a powerful customer value proposition by combining the experience it has
accrued by providing a wide range of outsourcing services to global customers with the core
practitioner’s expertise it inherits from the ITC group in select key industry verticals where ITC
enjoys leadership status.

Profiled by Forrester Research as a Leading Tier 2 vendor, ITC Infotech combines its
industry vertical expertise with world-class technology capabilities to deliver ‘business-
friendly solutions’ in four global verticals: Consumer Packaged Goods (CPG) & Retail,
Travel & Hospitality (T&H), Manufacturing and Banking, Financial Services & Insurance
(BFSI).

Vege-mobiles

ITC is all set to change the rules of the door to door sales game. Your traditional
vegetable vendor may soon sport a brand new branded push cart and will follow uniform
standards set by ITC on customer service and pricing. ITC intends to start this initiative
with a pilot of hundred carts between Hyderabad and Pune. The company has aggressive
plans for their retail chain, Choupal Fresh as well.

Strategic Alliances-

ITC has entered into a strategic alliance with Marubeni, Japanese trading house, for food business
including exports of Indian beans. The two companies will jointly consider exporting Indian-
made soybean cake and maize grains for livestock feed. The companies will also consider jointly
building silos and other grain-related facilities and launching a soybean protein business.

The company is also having a tie up with PARFUM D’IMAGE a well known French company
engaged in manufacturing of perfumes for the brand ESSENZA DI WILLS and with some Indian
companies for manufacturing of clothes under the brand name WILLS LIFESTYLE & JOHN
PLAYERS. The company is also having a strategic alliance with Indian food companies for
manufacturing of biscuits and ready to eat food.

Human capital-

ITC is one of the most valuable corporations in India and provides direct employment
opportunities to over 20,000 employees. ITC encourages full time direct employment. It also
provides indirect employment across the value chain to nearly 5 million people, whose livelihoods
are substantially linked to their association with ITC. Indirect employment covers the supply and
distribution network, agri-sourcing, social and farm forestry, e-Choupals, women's empowerment
and micro-enterprises, and livestock development.
ITC Ltd on February 19, 2007 has issued and allotted 4,53,110 Ordinary Shares of Re l/- each, upon
exercise of 45,311 Options by Optionees under the ITC Employee Stock Option Scheme (ESOS).
The company always employs best practices to encourage its employees and keep happy and satisfied.
The newer businesses, and the growth of the traditional businesses, have facilitated a significant
increase in net employment, reflecting the sustainable nature of ITC's businesses and its contribution to
social and economic capital. It should also be noted that manpower costs have increased from Rs. 377
crores in 2003-04 to Rs. 546 crores in 2005-06, an increase of over 45% over a period of 2 years, showing
ITC’s commitment to attracting and retaining talent and paying its people a competitive remuneration. All
employees are paid salaries which are significantly higher than the statutory minimum wages.
 2004-05 2005-06

Total number of employees 15692 20362

Total number of unionized employees 10605 13657

Conclusion-

Considering all these parameters the company is professionally managed and takes utmost care to keep their
customers, employees, suppliers, investors and partners happy and satisfied. By following the best ethical
practices the company has created a good brand name and goodwill. Investors will never hesitate to invest
in ITC Ltd.In years to come.