Corporate Information

Corporate Management Committee(CMC) Directors

* Y.C. Deveshwar * S S H Rehman * A Singh * K Vaidyanath

Registered Office
ITC LTD. 37,J.L.NEHRU ROAD, KOLKATA 700071

Audit Committee
*P B Ramanujan *Y P Gupta *B Vaidyanath (Director Responsible The finance function) *S Basu (Head of internal Audit)

Executive Directors
*K S Valdyanathan *A Nayak *R Srinivasan *R G Jacob *B B Chatterjee

Company
ITC Limited Saharanpur-247001 (Uttar Pradesh)

BANKERS
AXIS Bank State Bank Of India Punjab National Bank ICICI Bank

INTRODUCTION
ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 19 billion and a turnover of over US $ 5 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. 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 FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "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's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective

supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging

high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 26,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3,73,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."

ITC FAMILY
ITC PAPERBOARD LIMITED:
Indias largest manufacture of paper & paperboard. It also an Indias largest exporter of paper & paperboard industry.

ITC CLASSIC FINANCE LIMITED:

It is Rs. 315Cr Company, which is established to offer preferred financial services & products.

ITC AGRO-TECH LIMITED:

Business processes edible oil & also moving towards consolidating other aspects of edible oil procurement, marketing & trading.

ITC FILTRONA LIMITED:

A joint venture with filtrona international limited. UK is making available in India the latest Cigarette filter technology including technology advance multiple filters.

ITC ZENECA LIMITED:

A unique partnership of two major players in agro-business, ITC with ZENECA limited UK. It develops high quality seeds for the Indian agriculture sector.

INTERNATIONAL TRAVEL HOUSE LIMITED:

One of the Indias leading travel & tour agency offering services for business & leisure travelers throughout India, in the business of rent a car under the Eurocar brand& in the process of setting of golf resets of International standards.

SURYA TOBACCO COMPANY LIMITED:

ITCs joint venture project in Nepal is the companys largest private sector corporation with brands leader in every segment. ITC has achieved the Super star trading house status. It contributes over 4% of the revenue, provides 9% of the Indian Agri-export & about 2% of the companys total export centers total tax.

INDIAN TOBACCO DIVISION:

It is Indias largest manufacture & exporter of cigarette. It has the market share of 67% of the total cigarette market in India.

INDIAN LEAF TOBACCO DEVELOPMENT DIVISION:

Its the largest producer & exporter of tobacco in India.

ITC HOTELS LIMITED:

ITC hotels limited are a premier hotel chain catering to the International travelers. Its the market & operates 16 leading hotel properties under the Welcome group banner. It has the collaboration with ITC Sheraton USA for the International marketing of the ITC hotels.

ITC STRUCTURE
As stated earlier, ITC is a well-diversified company with the interests in various businesses. To facilitate efficient running of the business, the company has spit up in to several division, which enjoys great deal of functional autonomy. Divisional Board or the Divisional Executive Committee depending up on its size heads each division. Although management is vested in the Board of Directors consisting of the both Executives and non-executive directors, most of the authorities and responsibilities have been delegated to committee of directors which comprises of executive directors only. All of the Divisional boards and divisional executive Committees report to Committee of directors.

The various divisions with their head quarters are as follows:

NAME 1- Corporation Headquarters (CHQ) 2- Indian Leaf Tobacco Development Division (ILTD) 3- Indian Tobacco Division (ITD) 4- Packaging and Printing Division (PPD) 5-ITC Bhadrachalam Paper Board Ltd. PLACE Calcutta Guntur Calcutta Tiruvottiyur Secundrabad

6- Trebeni Tissue Division 7- Hotels Division (HD) 8- Agri-business Division (ABD) 9- International Business Division (IBD) 10- Information Systems Functions (IFS) 11- Integrated Research Center (IRC)

Calcutta New Delhi Hyderabad Mumbai Calcutta Bangalore

Divisions are further broken up into component unit and branches such as etc., for examplethe hotel division holds around Marketing branches, Cigarettes factories, and Hotel properties 17 hotels under the name of Welcome Group.

The ITC Vision

Sustain ITCs position as one of Indias most valuable corporations through world class performance, creating growing value for the Indian economy and the Companys stakeholders.

The ITC Mission

To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable value

COMPANY OVERVIEW

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively indianite, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-

Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. ITC chose the hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 70 owned and managed properties spread across India. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market

leader in India. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. ITC's paperboards' technology, productivity, quality and manufacturing processes are comparable to the best in the world. It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve customer service with reduced lead time and a wider product range. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since inception, its shares have been held by ITC, British American Tobacco and various independent shareholders in Nepal. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To harness strategic and operational synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002. Also in 1990, leveraging its Agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 9 states covering over 3.5 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 21 'Choupal Saagars' are now operational in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh. In 2000, ITC launched a line of high quality greeting cards under the brand name 'Expressions'. In 2002, the product range was enlarged with the introduction of Gift wrappers, Autograph books and Slam books. In the same year, ITC also launched 'Expressions Matrubhasha', a vernacular range of greeting cards in eight languages and 'Expressions Paperkraft', a range of premium stationery products. In 2003, the company rolled out 'Classmate', a range of notebooks in the school stationery

segment.ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Club life evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event Wills Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry. To mark the occasion, ITC launched a special 'Celebration Series', taking the event forward to consumers. In 2007, the Company introduced 'Miss Players'- a fashion brand in the popular segment for the young woman In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC InfoTech India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC InfoTech is one of Indias fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers across key focus verticals Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail) and THT (Travel, Hospitality and Transportation). ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad aata (wheat flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast growing branded snacks category with Bingo! In 2007. In just six years, the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands, with an enviable distribution reach, a rapidly growing market share and a solid market standing. In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro.

ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Inizio, the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme). Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De WIlls & Vivel range of soaps in February 2008.

Tobacco Division of ITC Products

ITC has brought modern farm practices and continuous improved to Virginia and Burley Tobacco cultivation. The companys green leaf threshing at Anarporti and Chirala are thelargest in Asia. They are the first tobaccos threshing plants in the world to get ISO 9002 accreditation for matching International norms.ITCs ILTD (Indian Leaf Tobacco development Division) is Indias largest buyer, processor and exporter of leaf tobacco. Through its emphasis on quality and services, ILTD, is striving to make tobacco the Golden Crop Of India. ITC owns the brand leadership in every segment The Company has launched several new brands such as Capstan Menthol, Filter, Capstan standard, Gold Flake Kings, and Berkley Filter. Gold Flake Premium Filter has since been rolled out of market and Gold Flake Light King size has been introduced ITCs strong brand portfolio has is demonstrated by the fact that scissors is the brand leader in volume, Wills remain as the largest free standing consumer

product in India and Wills Gold Flake family has grown to be come the largest single trademark in the consumer product. ITCs factories at Calcutta, Saharanpur, Bangalore and Munger have the 9002-quality accreditation The Company has signed an agreement with the British American Tobacco Company Limited (BAT) of which it is already an associate. As per this agreement ITC Ltd. launched BATs global brand such as State Express 555 and Benson and Hedges. The production branches better known as cigarette factories are situated in four factories, viz. I. Calcutta II. Bangalore III Saharanpur IV Munger (Bihar) Following are the subsidiaries fall under ITD: * Surya tobacco company * All India tobacco company limited * lan enterprises Ltd. * Fortune tobacco company * ITC filtrona Ltd.

Marketing overview: ITC has got 17 trade marketing branches in the following regions:
NORTH: 1. New Delhi 2. Saharanpur 3. Jammu 4. Lucknow 5. Jaipur SOUTH: 1. Bangalore (H.Q.) 2. Coimbatore 3. Ernakulam 4. Secundrabad. 5. Madras Apart of the above, a major constituent of ITD is tobacco technology Centre, situated at Bangalore. WEST: 1. Mumbai (H.Q) 2. Ahmadabad 3. Bhopal 4. Nagpur EAST: 1. Calcutta (H.Q) 2. Vishakapatnam 3. Guwahati 4. Patna

(TOBACCO PRODUCTS)

There are many ITC Tobacco Products which are as follows:

CLASSIC FTK 20 RC:

GOLD FLAKE FTK 20RC:

GOLD FLAKE FTK 10HL MD:

CAPISTAN FT 10HL:

NAVY CUT FT 10HL PP:

NAVY CUT FT 20HLND:

GOLD FLAKE PREMIUM FT 10HL:

BRISTOL FT 10HL:

FLAKR FT 10HL MD:

SCISSORS FK 10:

Non Tobacco division of ITC products

ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the brand. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery, Staples and Snack Foods segments. The packaged foods business is an ideal avenue to everage ITC's proven strengths in the areas of hospitality and branded cuisine, contemporary packaging and sourcing of agricultural commodities. ITC's world famous restaurants like the Bukhara and the Dum Pukht, nurtured by the Company's Hotels business, demonstrate that ITC has a deep understanding of the ndian palate and the expertise required to translate this knowledge into delightful dining experiences for the consumer. ITC has stood for quality products for over 96 years to the Indian consumer and several of its brands are today internationally benchmarked for quality. The Foods business carries forward this proud tradition to deliver quality food products to the consumer. All products of ITC's Foods business available in the market today have been crafted based on consumer insights developed through extensive market research. Apart from the current portfolio of products, several new and innovative products are under development in ITC's state-of-the-art Product Development facility located at Bangalore. Leadership in the Foods business requires a keen understanding of the supply chain for agricultural produce. ITC has over the last 96 years established a very close business relationship with the farming community in India and is currently in the process of enhancing the Indian farmer's ability to link to global markets, through the e-chopal initiative, and produce the quality demanded by its customers. This long-standing relationship is being leveraged in sourcing best quality agricultural produce for ITC's Foods business.

The Foods business is today represented in 4 categories in the market. These are: Ready To Eat Foods Staples Confectionery Snack Foods

In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6 brands: Kitchens of India Aashirvaad Sunfeast Bingo!

(NON TOBACOO PRODUCTS)

Sunfeast
In 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and Cream Biscuits.

Sunfeasts brand essence, "Spread the Smile" connotes happiness, contentment, satisfaction and pleasure. The emotional aspects of the brand. Sunfeast

mascot Sunny reinforces the

immediately established itself as a provider of innovative and distinctive products Sunfeast Marie was launched in an innovative orange flavour and the 'Sunfeast Dream Cream' range includes new flavours as well as flavour enhancers. The Sunfeast Dream Cream range is currently available in 8 variants. The Company has also introduced 'Sunfeast Dark Fantasy', a dark chocolate and vanilla cream offering for the premium segment in select markets. Riding on the success of its initial offerings, ITC also entered the milk biscuit category with Sunfeast Milky Magic biscuits in the general milk and milk cream categories. Apart from milk which helps mental growth, these biscuits also contain the finest quality wheat aiding physical growth. Both cream and milk biscuits have received enthusiastic response from consumers.

In the last few years the Sunfeast biscuits portfolio has been enhanced to include salted crackers and cookies. The 'Sunfeast Snacky' salted crackers are available in 2 unique variants viz., Chilli Flakes and Classic Salted. Sunfeast's cookie offering, 'Sunfeast Special' biscuits are also available in select markets. The Sunfeast Special range currently includes cookies in three variants Butter, Cashew and crunchy Coconut, as well as cream biscuits in two variants Choco and Orange. The recently launched Sunfeast Golden Bakery offers the freshly baked taste of cookies in 3 variants - Choco-nut, Butter-nut and Butter scotch. The brand has also launched Sunfeast Nice, a tasty and delightful offering of crispy, sugar sprinkled biscuits.The Sunfeast product portfolio has been further expanded to include healthy snacking options as well. 'Sunfeast Pasta Treat', a whole wheat based instant pasta was introduced as a healthy snacking option for children. After the tremendous success of the 4 initial flavours the instant Pasta range has been extended with two new exciting flavours Pizza and Chicken. The pasta segment was further expanded with the launch of 'Sunfeast Benne Vita' in 4 innovative variants. This range has been enhanced recently with the launch of Sunfeast Benne Vita Flax Seed biscuits that reflect the brand essence of Benne Vita, which in Italian stands for Good Life. The flax seed content in these protein and mineral enriched biscuits is a rich vegetarian source of Omega III acids.

With continued focus on health and nutrition, Sunfeast extended the biscuits portfolio to the nutritional segment with the launch Sunfeast Sachin's Fit Kit a range of healthy products cocreated with Sachin Tendulkar. It is for the first time in India that an icon of the stature of

Sachin Tendulkar has been actively involved in the product development process as co-creator of the Sunfeast Sachin's Fit Kit range. It is the shared vision of Sunfeast as well as Sachin Tendulkar that products under the Sachin's Fit Kit range will enable create "Champions of Tomorrow". The launch range comprises two offerings - Sunfeast Sachin's Vitamin and Protein enriched biscuits and Sunfeast Sachin's Multigrain biscuits.

Bingo!

The launch of Bingo! in March 2007 marked ITC's foray into the fast growing branded snack foods segment. Bingos portfolio includes an array of products in both Potato Chips & Finger Snacks segment.

Bingo! is positioned as a youthful and innovative snack, offering the consumers with choice in terms of both formats and flavors.The Potato Chips offerings comprise the ever-popular Salted, Masala and Tomato flavours, as well as some innovative variants inspired by the snacking habits of different parts of the country like Chatkila Nimbu Achaar and Tandoori Paneer Tikka. The offerings under the Finger Snacks segment are equally unique presentations with innovative products like Tedhe Medhe, the pakoda inspired Live Wires and the khakra inspired Mad Angles. Mad Angle's, which has become an instant hit among consumers is available in 3 flavours - Tomato Mischief, Chilli Dhamaka and Achaari Masti.

Confectionary
ITC currently has two brands in the confectionery segment - 'mint-o' and 'Candyman'.'mint-o' was acquired by ITC from Candico in March 2002. ITC re-launched the compressed mint offering, across all major markets in India, with new and improved product and packaging. Available in the regular mint flavour with added blue specks to enhance consumer experience, mint-o is also offered in innovative 'Orange mint' and 'Lemon mint' flavours. mint-o Cool Blue a single mint in a pillow-pack was launched In November 2007. 'mint-o' is available in 3 sizes rolls of 20 and 6 and singles, capturing the international essence of youthful cool.ITC launched 'mint-o Fresh' in October 2004. An active mint deposited candy, mint-o Fresh is available in two refreshing mint flavours mint-o Fresh Eucalyptus and mint-o fresh Cool Green. Its launch extended the footprint of the 'mint-o' brand in line with the strategy of adding excitement and contributing to the growth of the confectionery category. 'mint-o Fresh' is especially targeted at the adult consumer creating a basket of mint-based products across price points.

ITC launched the 'Candyman' range of confectioneries in August 2002. Led by the 'Candyman Fruitee Fun' range of assorted fruit flavours ('Wild Banana', 'Pineapple Punch', 'Orange Josh' and 'Mango Delite'), the 'Candyman' portfolio now includes deposited candy products like 'Candyman Butterscotch Licks' and Candyman clairs' (Choco flavoured as well as Vanilla Cream centre inside a Butterscotch outer shell). The coffee toffee segment also saw the successful launch of 'Candyman Cofitino' in November 2005. The brand was further strengthened with the launch of 'Candyman Natkhat Mango' and 'Candyman Maha Mango'. In line with the strategy to provide innovative flavours to the consumers, Candyman Mango Licks was launched in June 2007 and Candyman Natkhat Gowawa in October 2007. The 'Candyman' range of confectionery is targeted at fun-filled, naughty kids who seek a delightful candy experience through a range of candy types and flavours.

Soaps and Shampoos

ITC launched an exclusive line of prestige fine fragrances under the Essenza Di Wills brand in mid 2005. The Essenza Di Wills range of perfumes reinforces ITCs tradition of bringing world-class products to Indian consumers to enrich the quality of their lives.Essenza Di Wills embodies a fine balance between the classic and the contemporary. The brand personifies exclusivity, innate style, sophistication and magnetism. The Essenza Di Wills line has been developed with the assistance of French perfumery experts to give it the mystique and premium luxury quality that go with the best of international brands.

Inizio, the signature range under Essenza Di Wills captures the very essence of attraction between a man and a woman with its two distinct lines - Inizio Femme (for women) and Inizio

Homme (for men). The women's fine fragrance revolves around 'Floral Fruity Musky' notes while the men's fine fragrance is centered on 'Oriental Woody Fruity' notes. The bath and body care products share the same olfactory signature of the fine fragrances, to offer a harmonized grooming experience. Essenza Di Wills has significantly enhanced its brand salience in the lifestyle space by being the associate sponsors of the Wills Lifestyle India Fashion Week, the country's most premier fashion event that brings together the leading designers of the country. The Essenza Di Wills fashion line, specially designed for the brand by one of Indias leading designers, Varun Bahl, received high appreciation at the Spring-Summer show in September 2007. Essenza Di Wills is available at Wills Lifestyle stores, select John Players stores and select premium outlets.

In September 2007, ITC launched Fiama Di Wills, a premium range of personal care products comprising shampoos, conditioner, shower gels and soap. This premium range is a unique blend of nature and science that promises gentle effective care. It is an outcome of 4 years of extensive research and development by experts at ITC R&D Centre. The packaging for all Fiama Di Wills products has been developed by a leading European design firm and the fragrances have been developed by an international fragrance house in France.Fiama Di Wills Shampoos developed in collaboration with Cosmetech Labs Inc., USA, offers a range of four variants. Each of these is designed to deliver a specific hair benefit to the consumer :Everyday Mild (with extracts of Thyme & Juniper) is a gentle caring shampoo suitable for daily use. Aqua Balance (with extracts of Magnolia Blossom Watercress)

is a gentle moisturizing shampoo ideal for dry, dull hair.Volume Boost (with extracts of

Rosemary & Sage) is a gentle volumizing shampoo ideal for thin, limp hair.Silky Strong (with oils of Macadamia Nut and Babassu) helps make hair smooth, silky and strong and is ideal for weak, damaged hair. Each of these shampoos can be complemented with Fiama Di Wills Polishing Drops conditioner. This gentle conditioner enriched with Avocado Oil and Burdock extract promises to make hair shiny, soft and smooth. It also gives the additional benefits of UV protection as it contains Sunflower Seed extract, which is a natural UV absorber.

Ministerial Portfolio Statement

Ministerial Portfolio Statements are the primary source of information for the hearings of the Parliamentary Estimates Committees. These hearings examine the funding provided in the state budget to each ministerial portfolio, and take place following the presentation of the BUDGET. Ministerial Portfolio Statements are also used by Members of Parliament, the media, the public and other interested parties for obtaining information on key strategies and prospective outcomes, and financial performance, of individual Queensland government agencies. Ministerial Portfolio Statements are forward-looking in their focus and provide predominantly budgeted financial and non-financial performance information for a new financial year. In this way, they complement agency annual reports, which document actual performance (including audited financial statements) for the financial year just completed.

2010-11 Ministerial Portfolio Statement

The 2010-11 Ministerial Portfolio Statement was released on 6 June 2010 and covers the key outputs being delivered by the Queensland Department of Employment and Training in the 2010-11 financial year. The PDF version includes the following Queensland departments and agencies:

Department of Employment and Training Department of Industrial Relations Sport and Recreation Queensland

GROWTH AND DEVELOPMENT OF ITC LIMITED IN YEAR 2011

Net Turnover up 26.3%

Non-Cigarette businesses now constitute 52.3% of Net Turnover Q4 Underlying Post-tax Profits up 18.6%

ITC Ltd. completed yet another year of strong performance with Gross Turnover for the year growing by 20.2% to Rs.19505 crores. Net Turnover at Rs.12369 crores grew by 26.3% driven by the non-cigarette FMCG businesses, higher agri-business revenues and the continuing strong performance by the Hotels business. The non-cigarette portfolio grew by 37.6% during the year and now accounts for 52.3% of the Companys Net Turnover. Pre-tax profit increased by 20.1% to Rs.3927 crores, while Post-tax profit at Rs.2700 crores registered a growth of 20.8%. Earnings Per Share for the year stands at Rs. 7.19. The Companys performance for the fourth quarter was equally impressive with Net Turnover recording a growth of 24.5% over the previous year to touch Rs. 3466 crores. Pre-tax profit at Rs.940 crores grew by 20.4%. Post-tax profit at Rs. 651 crores represents an underlying growth of 18.6% after adjusting for income tax refunds. The Board of Directors recommended a dividend of Rs. 3.10 per Ordinary share of Re.1/- each (Previous year: Rs.2.65 per share). This will entail a total cash outflow of Rs.1364.49 crores, comprising proposed dividend of Rs. 1166.28 crores and income tax on the proposed dividend of Rs. 198.21 crores.

Branded Packaged Foods:

The Branded Packaged Foods business continued to expand rapidly with sales recording an impressive growth of 51% over the previous year. The range of offerings now comprises more than 150 distinct food products under 6 brands. In terms of consumer spend Aashirvaad and Sunfeast have both become five hundred crore rupee brands within a short span of time. The year marked the Companys foray into the fast growing organized Salty Snacks market with the launch of the Bingo! range of potato chips and finger snacks. The launch, initially comprising 16 highly innovative and differentiated flavors, is backed by extensive market research leading to crafting of products/variants customized for the Indian palate. Initial consumer response has been very encouraging. Sales in the Biscuit category grew by 55% over the previous year. The Sunfeast range stood further expanded with the launch of Sunfeast Special biscuits in select markets in the fast growing mid-price creams segment and the extension of mid-price cookies to target markets. The year also saw the launch of 3 exciting variants in the premium creams segment and the FIT KIT range of products endorsed by Sachin Tendulkar in two unique variants. On the manufacturing front, the business expanded its production capacity by adding facilities in two more locations. Product mix continued to improve on the back of enhanced sales of value added products like Creams, Cookies etc. In the Staples category, Aashirvaad Atta grew from strength to strength with impressive gains across each region. The brand now commands a 52% market share amongst national branded players and is the clear market leader in most major markets. Aashirvaad Select, the Companys premium atta offering, which was extended to target markets during the year met with very good consumer response. The business also scaled up the branded spices volumes under the Aashirvaad brand, leveraging the brands strong association with superior quality and consistency.

In the Confectionery category, the Candyman and Mint-o brands registered strong growth with sales growing by nearly 51% over the pervious year driven by Eclairs, Cofitino and the new variants launched during the year viz. Natkhat Mango and Maha Mango. The business added incremental capacity during the year to meet the enhanced business volumes. Product portfolio was further expanded in the Ready-to-Eat segment with the introduction of 12 new products in the domestic market under the Kitchens of India (KOI) banner. Exports of KOI products were scaled up during the year. The brand is now available in USA, UK, Switzerland, Canada, Australia and Germany. The availability of KOI products stood significantly enhanced in leading US retail chains providing a strong platform for future growth. Product range in the Pasta segment was also augmented with the launch of Sunfeast Benne Vita in four innovative variants.

Lifestyle Retailing:
The market standing of the Companys Lifestyle Retailing business stood significantly enhanced on the back of an impressive 52% growth during the year under review in both the premium and popular segments. The export segment also registered strong growth during the year. In the premium segment, the business continued to expand consumer franchise with strong sales growth across its portfolio, viz. the Classic range of formal wear, Wills Sport relaxed wear and Wills Clublife evening wear. The brands association with high fashion and premium imagery stood reinforced with the resounding success of the Wills Lifestyle India Fashion Week (WIFW) the countries most prestigious lifestyle event. As part of the Ramp to Racks initiative, the business in collaboration with some of the leading designers of the country successfully introduced the Wills Signature range of designer wear in select Wills Lifestyle Stores. These product offerings have met with excellent response from discerning consumers. The Wills Lifestyle range was further augmented during the year with the extension of Essenza Di Wills, an exclusive line of prestige fragrance, bath and body care

products, to select Wills Lifestyle stores. The products have met with very encouraging response from quality conscious consumers. The business continued to post significant improvements in several operating indices such as average realizations, footfalls/conversion and sell through rates. The Wills Lifestyle range is currently available in over 200 locations through exclusive brand outlets (EBOs) and shop-in shops. In a clear recognition of its enhanced market standing, Wills Lifestyle was named a Super brand by the Super brand Council of India and honored with the Retailer of the Year award at the Idea Zee Fashion Awards. In the popular Youth segment, John Players delivered a strong performance leveraging its youthful and fashionable product range and a significantly enhanced presence across target outlets. The celebrity association with style icon Hrithik Roshan created high buzz for the brand among its youthful target audience, mobilizing high degree of trials and garnering enhanced consumer mind share. The brand continued to earn industry recognition winning the The Most Admired Fashion Campaign of the Year at the Images Fashion Awards 2007.John Players has now established a strong pan-India presence with availability at over 170 Flagship Stores and 1700 Multi Brand Outlets. The number of exclusive brand outlets in which the brand is available doubled during the year with a trebling of the associated retail space.

The business continued to actively pursue opportunities in the Exports arena consolidating the existing customer base and establishing long-term partnerships with high potential customers. During the year under review, the business established an exclusive manufacturing arrangement with a state-of-the-art unit which, coupled with an expanded product portfolio, enabled a threefold increase in export turnover.

Greeting, Gifting & Stationery Business:

Stationery sales doubled during the year driven by the flagship brand Classmate. Classmate has become Indias leading and most widely distributed notebook brand in a relatively short span of time, garnering a share of 16% in the branded segment of the market. Classmate offers school and college students a memorable writing experience with the superior Alfa Plus paper used in these notebooks, custom manufactured at the Companys Bhadrachalam Unit. Alfa Plus is Indias first Elemental Chlorine Free (ECF) paper with superior whiteness, brightness and smoothness characteristics compared to other writing and printing papers in the market. During the year, the business enlarged the scale and scope of its Classmate Connect school contact programmed. The Classmate Young Author Contest 2006 covered5000 schools across 34 cities and reached out to 200,000 students, making it the largest literary event in the national school calendar. Associated events like the Classmate Young Artist Contest 2006 and panel discussions with eminent educationists were held in selected cities. In line with its Citizen First philosophy the Company contributes Re. 1 towards its rural development initiatives for every notebook sold. During the year, the premium stationery brand Paper raft unveiled its new designer range. Paperkraft is targeted at discerning executives and college students and is available at all leading modern format stationery stores.

Safety Matches & Incense Sticks:

ITCs philosophy of creating shareholder value through serving society finds expression in the marketing of Safety matches and Incense sticks sourced from small scale and cottage sector units. The Safety Matches business recorded robust growth during the year through continued focus on new product development, product quality and enhanced product availability. The business gained significantly during the year from synergy benefits accruing from the recent acquisition of Wimco Ltd. by Russell Credit Ltd., a wholly owned subsidiary of the Company.

Synergies in the form of a stronger combined brand portfolio, rationalisation of sales & distribution, supply chain efficiencies, improved servicing of proximal markets; freight optimization, greater access to better quality critical raw materials etc. have resulted in significantly enhanced market standing. The business continues to support the small-scale sector through technical and management inputs to improve their product quality and processes. Progress was made on the export front with initial shipments to certain African markets.Market standing of the Companys Mangaldeep brand of incense sticks (agarbattis) stood further strengthened with sales recording robust growth during the year driven by improved distribution reach and the launch of 11 new products (7 at regional level and 4 at national level). During the year, the Mangaldeep brand was also exported to 11 countries including USA & South Africa. The business also commenced exports of incense sticks sourced from units in the small-scale and cottage sector leveraging the marketing services and large overseas presence of the Exim Bank of India.In pursuance of its abiding social commitment, the Company continues to partner with small and medium enterprises to help them raise their quality and process standards. Sixagarbatti manufacturing units have received ISO 9001-2000 certification till date, aided by the Companys process and technical inputs, a pioneering effort in the incense sticks industry. The business continued its collaboration with various NGOs in Bihar, Karnataka, Pondicherry and Tamil Nadu to provide vocational opportunities to rural youth and economically disadvantaged women in keeping with the Companys commitment to the Triple Bottom Line. Sourcing from Khadi & Village Industries Commission (KVIC) approved units continued during the year.

FMCG-Cigarettes:

The Companys uncompromising commitment to providing superior value to consumers through world-class products helped in sustaining its leadership position in the cigarette industry. The strategy of value addition yielded an impressive performance during the year with cigarette sales volumes posting a growth of over 7% during the year. In line with the Companys mantra of continuous and consistent offering of value added worldclass products to the Indian consumer, a unique IT-enabled Six Sigma based product development process was implemented during the year. This strategic intervention enabled the launch of several key initiatives across the brand portfolio in terms of pack modernisation, limited edition offerings in different flavours and the introduction of Silk Cut in the King Size and Regular Filter formats. The success of these initiatives is evidenced by the significant enhancement of the Companys market standing in the Premium categories and higher market shares in all segments in key competitive markets across the country. In keeping with the policy of maintaining global standards across the value chain, the business continued to induct state-of-the-art and cutting-edge technology in its manufacturing facilities such as high speed cigarette making and packing machines, round corner beveled edge packers and automatic filter feed systems. The cause for concern, however, remains the severe taxation and regulatory milieu for cigarettes in India. Cigarettes continue to be discriminated against cheaper and revenue inefficient tobacco products like bidis and chewing tobaccos. Excise duty rates on cigarettes were increased for the second successive year. However, while duty rates on cigarettes went up in excess of 6% in the Union Budget 2007,the same were left unchanged in respect of most of the other tobacco products. Moreover, with effect from 1st April 2007, cigarettes have been brought under the ambit of Value Added Tax by the States at a rate of 12.5% on invoice price, without a reduction/set off in excise duties collected in lieu of State level sales tax.

Hotels:
The Companys hotels business posted yet another impressive performance during the year with segment revenues growing by 26% to touch Rs. 986 crores driven by better room rates, improved occupancies and food & beverage sales. Gross Operating Profit (PBDIT) grew 28.2% over the previous year to touch Rs. 418 crores during 2006/07, while segment results (PBIT) at Rs. 351 crores grew 36% over the previous year. These impressive results make the Companys hotels business the fastest growing among the major hotel chains in the country both in terms of revenues and profits. Additionally, the Companys hotels business is a clear leader in terms of operating efficiency as measured by the ratio of PBDIT to Net income. The year marked a significant development for the Companys hotels business with ITCWelcomgroup entering a new phase in its collaboration with Starwood Hotels & Resorts through a new franchise agreement. As per the agreement, ITC-Welcomgroup will have an exclusive partnership with Starwood to bring in its premium brand, The Luxury Collection, to India. Seven ITC-Welcomgroup hotels will join the list of exclusive properties world-wide that are part of Starwoods Luxury Collection. Globally recognized as a unique brand, the Luxury Collection consists of 60 premium properties spread across the globe. The Luxury Collection brand philosophy of offering unique experiences indigenous to their destination complements ITC-Welcomgroups own ethos of being rooted in the Indian tradition of warm, personalised hospitality. The arrangement includes rebranding WelcomHotel New Delhi as a Sheraton property.In line with the strategy of maintaining the contemporariness of its properties, the business completed several renovation/product upgradation programmes during the year. Key initiatives included renovation of guest rooms and suites in ITC Maurya, ITC Kakatiya and a new health Spa at ITC Mughal. The business also extended the coverage of the Six Sigma Quality initiatives across a larger number of properties, people and processes with a view to further enhancing the service edge.Construction activity in respect of the new super-

deluxe luxury hotel at Bengaluru is progressing as per plans. Substantial progress has also been made in developing project plans and obtaining requisite approvals for a new property at Chennai.

Paperboards, Specialty Paper & Packaging:

The Paperboards, Specialty Paper and Packaging segment recorded strong growth during the year both in terms of sales and operating profits. Segment revenue grew by 11% to touch Rs. 2100 crores while segment results improved by 19% to Rs.417 crores. The segment generated strong operating cash flow of Rs.539 crores.Production during the year touched 390,458 MT as compared to 365,819 MT in 2005-06. Sales of value added paperboards (VAP) grew by 15% over last year to touch 139155 MT in line with the Companys strategy of enriching the product mix. Growth in sales of Specialty Papers was driven mainly by the Decors segment. Apart from making further progress in reducing water and energy consumption, the business took rapid strides towards achieving zero solid waste status. The business continued to focus on the critical areas of pulp and energy, which are the two main components of product cost. The Companys state-of-the-art ECF pulp mill, the only one of its kind in the country, is a source of sustainable competitive advantage to the business. The superior quality of the ECF pulp has enabled expansion of the market for value added paperboards. With increasing awareness of hygiene and safety among Indian consumers, industries like foods and pharmaceuticals are progressively switching to ECF pulp-based paperboards. During the year, the business made substantial progress in respect of the pulp capacity expansion project. The business also made good progress in respect of the 2 major capacity augmentation projects comprising (a) a 90,000 TPA paperboard machine and

(b) a 100,000 TPA paper machine for manufacturing uncoated (c) Paper including branded copier grades. The Companys Packaging & Printing business is the leading provider of value added paperboard packaging in the country. The business supports the competitiveness of the Companys cigarette and other FMCG businesses through discerningly superior and innovative packaging solutions. The business made significant progress in its capacity expansion projects. The new facility at Haridwar was completed during the year, adding manufacturing capacity both in the paperboard cartons and flexibles segments. This state-of-the-art facility would enable the business to service the growing needs of the Companys Foods business and also facilitate cost-effective and efficient servicing of external customers. Investments in the Chennai unit towards enhanced packaging capabilities and superior technology were also completed. These investments would support the growing requirements of the

CompanysCigarettes and other FMCG businesses and also provide high quality packaging to external customers.

Agri business :
Overall Agribusiness revenues during the year grew by an impressive 38% driven by soya and rice exports and leaf tobacco.The e-choupal network was further scaled up during the year while simultaneously focusing on enhancing its reach and productivity. The network currently comprises 6400 choupals reaching out to over 3.5 million farmers in 38,500 villages in the states of Madhya Pradesh, Uttar Pradesh, Haryana, Uttaranchal, Rajasthan, Maharashtra, Karnataka, Andhra Pradesh and Kerala. It is a matter of pride and deep satisfaction that the pioneering e-choupal initiative found special mention in the Economic Survey 2006/07 for its transformational impact on rural lives - a rare honour and perhaps the first for any private

company in the country.On the sourcing front, the business continued to leverage the e-choupal network for procuring high quality agri commodities at competitive prices. The rural distribution initiative made good progress, nearly doubling the channel throughput. On the rural retail front, 18 Choupal Saagars are now operational in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh. These Choupal Saagars, in synergistic combination with the e-Choupal network, would serve as the core infrastructure to support ITCs rural distribution strategy. Leaf tobacco exports during the year grew by an impressive 21% by value to touch an all-time high. This sterling performance was achieved through a combination of focused business development efforts and customized product and service offerings to both existing and new customers. The business continued to provide strategic sourcing support to the Companys cigarette business.

Contribution to Sustainable Development:

In pursuit of its abiding commitment to create stakeholder value through service to society, the Company made significant progress during the year in its social and environmental initiatives.The Company continued to intensify its footprint in the social sector by expanding to newerdistricts during the year. It continued to focus on the three main areas of interventions under Mission Sunehra Kal: (a) natural resource management, which includes wasteland, watershed and agriculture development; (b) sustainable livelihoods, comprising genetic improvement in livestock and womens economic empowerment; and (c) community development, with focus on primary education and health and sanitation. The Company currently runs 54 social development projects in 43 districts spread over the states of Kerala, Andhra Pradesh, Karnataka, Tamil Nadu, Madhya Pradesh, Uttar Pradesh, Rajasthan, Orissa, West Bengal and Bihar. The Companys pioneering initiative of wasteland development through its Farm and SocialForestry Programmes was scaled up further with the addition of 23,800 hectares during the year, taking the total area under coverage to nearly 65,000 hectares providing over 28 million person days of employment among the disadvantaged. This includes

the Companys Social Forestry Programme which has so far promoted plantations covering 9,069 hectares in 380 villages reaching out to 10,510 poor households. The collaboration between ITC and the Government of AP for wasteland development under Indira Kranti Patham was sustained during the year 830 hectares of plantations were promoted through this public-private partnership. The households covered under the Social Forestry Programme continue to reap the benefits derived from plantations. Not only have their earnings per acre improved significantly, thanks to the sale of plantations, but also most beneficiaries have ensured that the contribution to the Village Development Fund continues apace. Their own incomes have been invested wisely into productive assets to ensure a long-term virtuous cycle of development. The soil & moisture conservation programme, designed to assist farmers in identified moistures-stressed districts, witnessed a sharp increase in its coverage during the year. To date, 1,531 water-harvesting structures provide critical irrigation to about 14,287 hectares. In all, the watershed development programme today covers 26,700 hectares. The year also saw another significant milestone with the signing of an agreement with the Government of Rajasthan for watershed development in the Bhilwara District of Rajasthan under a public-private partnership programme. The project will undertake soil and moisture conservation work on 5,000 hectares in five years. In continuation of its policy of providing an integrated solution for promoting a sustainable watermanagement regime, the Company lays equal emphasis on ensuring efficient usage of water through interventions aimed at improving farm productivity, promoting group irrigation projects and demonstrating the use of sprinkler sets. Sustainable agricultural practices received a major boost with the promotion of more than 4,500 organic fertilisers units through vermicomposting and NADEP technologies during the year. The sustainable livelihoods initiative of the Company strives to create alternative employment for surplus labour and decrease pressure on arable land by promoting non-farm incomes. Among many such activities, the programme for genetic improvements of cattle through artificial insemination to produce high-yielding cross-bred progenies has been given special emphasis because it reaches out to the most impoverished and has the potential to pull them out

of poverty. 77 cattle development centres already cover more than 1,500 villages, providing integrated animal husbandry services to nearly 55,000 milch animals during the year. The initiative for the economic empowerment of women also continued apace: to date, 10,232 women have been organised under 801 self-help groups (SHG) with total savings of Rs 53 lakhs. Nearly 6,000 women have been gainfully employed either through micro-enterprises or as self-employed though income generation loans. Inhe area of environment, health and safety, ITC continues to raise the bar for its operating units. The Company further improved its water positive and carbon positive status, and also made significant improvements towards achieving zero solid waste status through recycling of all solid wastes. Total recycling of waste in the Companys businesses/units improved to 93% in 2006/07 from 78.7% in the previous year, with several business units achieving 100% recycling of all solid wastes. The Companys third Sustainability Report, unveiled in December 2006, details its achievements across them three dimensions of the Triple Bottom Line. This report, independently assure by PricewaterhouseCoopers, is the first Indian and one of the first 10

reports world-wide to be presented in accordance with the latest G3 revision of Global Reporting Initiative (GRI) guidelines. The Company has followed the highest level A+ for reporting the Triple Bottom Line performance.

Incentivizing Corporate Social Responsibility (CSR): Mobilizing Consumer Support:

In an emerging economy like India's, with the large challenges of inclusiveness and ecological fragility threatening to undermine the sustainability of economic growth, no single organ of society possesses the resources to address these serious issues. The most crucial resource required to address the various developmental issues is not so much financial as organizational. Although such resources rest in abundance with the corporate sector, in the absence of incentives, the organizational capability of the corporate sector tends to be deployed almost

exclusively towards addressing the needs of shareholders through financial performance. Financial reward arising from the exercise of preference by civil society in favour of responsible corporate can trigger substantial corporate participation in CSR activities. There is already evidence of such a trend emerging in developed markets. As Indian businesses progressively integrate with the global market, the need for responsible business conduct will become an imperative for global competitiveness. In line with this thought, ITC Ltd. is engaged in taking the lead to involve its consumers as partners in progress by bundling CSR as part of its unique value proposition as well as the value proposition of brands such as Sunfeast and Aashirvaad which leverage the agricultural value chain and the rural economy for success in the domestic market. By mobilizing support of consumers, CSR can serve as an additional differentiator for the Company's products and services, thereby simultaneously serving the cause of shareholders as well as society at large.It is hoped that the Company's example will serve to encourage others in the corporate sector to contribute more readily with impactful CSR initiatives. In this context, the Company's support for the setting up of the CII-ITC Centre of Excellence for Sustainable Development is asterling example of incentivising CSR through recognition of excellence in sustainability practices. The Centre seeks to address the institutional void in developing the requisite capability among Indian industry. The Centre will endeavour to transform Indian businesses by providing thought leadership, promoting awareness and building capacity amongst Indian enterprises in their quest for sustainable development

SWOT ANALYSIS Strengths:

ITC leveraged it traditional business to develop new brands for new segments. For example, Its experience of transporting and distributing tobacco products to remote and distant parts of India to the advantage of its FMCG products.ITC master chefs from its hotel chain are often asked to develop new food concepts for its FMCG business.ITC is a diversified company trading in a number of business sectors including cigarettes, hotels, paper Agriculture, packaged foods and

confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery.

Weakness:
The companys original business was traded in tobacco.ITC stands for Imperial Tobacoo Company of India Limited. It is interesting that a business that is now so involved in brandig continues to use its original Name, despite the negative connection tobacco with poor health and premature death.To fund its cash guzzling FMCG start-up, the company is still dependent upon its tobacoo revenues.Cigarettes account for 47% of the companys turnover,and that in itself is responsible for 80% of its profits.So there is an argument that ITCs move into FMCG is being subsidied by its tobacoo operations,Its Gold Flake tobacoo brand is the largest brand in India and this single brand alone hold 70% of the tobacco market.

Opportunities:
Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can be developed usin strategies of market development, product development and marketing penetration.ITC is moving into new and emerging sectors including Information Technology, supporting business solutions.e-Choupal is a community of practice that links rural Indian farmers using the

Internet. This is an original and well thought of initiative that could be used in other sectors in many other parts of the world. It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages. Take a look at eChoupal here

http://www.itcportal.com/agri_exports/e-choupal_new.htm ITC leverages e-Choupal in a novel way. The company researched the tastes of consumers in the North, West and East of India of atta (a popular type of wheat flour), then used the network to source and create the raw materials from farmers and then blend them for consumers under purposeful brand names such

as Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market. This concept is tremendously difficult for competitors to emulate.Chairman Yogi Deveshwar's strategic vision is to turn his India conglomerate into the country's premier FMCG business.Per capita consumption of personal care products in India is the lowest in the world offering an opportunity for ITC's soaps, shampoos and fragrances under their Wills brand.

Threats:
The obvious threat is from competition, both domestic and international. The laws of economics dictate that if competitors see that there is a solid profit to be made in an emerging consumer society that ultimately new products and services will be made available. Western companies will see India as an exciting opportunity for themselves to find new market segments for their own offerings ITC's opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of competition will alter in the medium term. Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a secure future.

Data Analysis and Interpretation

KEY FINANCIAL RATIO . In Rs. Cr ..

Mar '07 Investment Valuation Ratios Face Value Mar '08 Mar '09 Mar '10 Mar '11

10.00

1.00

1.00

1.00

1.00

Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Return on Assets Including Revaluations Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio

31.00 111.55 306.40 290.89 81.63 36.40 31.39 37.56 32.00 25.67 28.00 21.67 33.09 27.97 21.64 18.65 18.75 33.80 0.97 0.43 0.03 0.01 56.01 0.03 58.80 50.30 3.91 20.07 6.99 2.01 0.95 1.33

2.65 8.97 26.09 22.00 87.29 34.36 30.13 35.98 25.49 25.73 22.19 22.43 36.26 24.83 25.09 16.80 16.87 36.36 1.25 0.57 0.01 0.01 209.63 0.01 172.52 122.69 3.82 18.22 6.43 2.31 1.08 1.59

3.10 10.64 32.73 25.62 87.12 32.51 28.86 34.05 24.28 23.98 21.40 21.10 37.24 26.01 25.64 17.74 17.80 37.51 1.33 0.58 0.02 0.01 456.67 0.02 268.33 191.95 3.76 20.79 6.05 2.42 1.17 1.75

3.50 11.76 37.23 29.88 86.98 31.57 27.50 28.44 23.45 23.45 21.50 21.50 36.60 25.99 24.71 17.79 17.85 36.88 1.36 0.56 0.02 0.01 258.92 0.02 199.51 145.60 5.51 20.43 5.51 1.59 1.16 1.59

3.70 13.04 39.70 34.27 86.84 32.85 28.38 29.18 24.22

21.18 21.18 34.61 23.85 23.27 16.50 16.55 34.76 1.42 0.61 0.01 0.01 169.01 0.01 112.19 81.02 5.26 21.32 5.26 1.44 1.09 1.44

Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios

212.57 53.53 6.12

223.31 48.89 40.51

213.12 52.68 49.56

220.61 43.88 52.39

185.08 64.07 62.19

Material Cost Composition 38.95 Imported Composition of Raw Materials 18.66 Consumed Selling Distribution Cost Composition 7.00 Expenses as Composition of Total Sales 16.68 Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit 40.29 Dividend Payout Ratio Cash Profit 35.25 Earning Retention Ratio 47.94 Cash Earning Retention Ratio 56.05 AdjustedCash Flow Times 0.12

43.53 16.35 6.39 18.30 50.76 44.19 49.78 56.22 0.05

47.16 16.92 6.52 18.54 50.53 44.54 48.75 54.90 0.07

44.95 12.78 7.44 15.45 49.45 43.36 47.98 54.68 0.06

45.80 12.98 6.83 14.85 50.06 42.84 48.68 56.24 0.05

Ratio Analysis of the Company

A Year
1 II.3: II.4:

LIQUIDITY RATIO 2011

Current ratio = Current assets/Current Liabilities Current assets, Loans and advances 8161.11 Current liabilities and provisions 4705.01

(I1.3/II.4)

1.734557

The current ratio of 1.73 times says that the company is in relatively good short-term financial standings. The ratio is an indication of a company's ability to meet shortterm debt obligations; the higher the ratio, the more liquid the company is.

Quick ratio or acid test ratio: (Current assets-inventories)/ Current Liabilities

ll.3: Less:ll.3a

(Current assets, Loans and advances) Inventories

8161.11 4599.72 3561.39

ll.4 (II.3-II.3a)/(II.4)

Current liabilities and provisions

4705.01 .7569357

The small Quick ratio, i.e. 0.76 times says that the company's financial strength is not so strong. In general, a quick ratio of 1or more is accepted by most creditors; however, quick ratios vary greatly from industry to industry and ITC does not have as such any worries in getting creditors. ITC has strong financial positions in many other aspects.

Cash ratio or Absolute liquidity ratio= (Cash+Marketable securities)/Current liabilities

II.3c: Add:

Cash and bank Balances Marketable securities

1032.39 0

1032.39

ll.4

Current liabilities and provisions

7405.01

(II.3c)/(II.4)

.1394178

The cash ratio of 0.13 times says that the company is not in the position to very quickly liquidate its assets and cover short-term liabilities. But there is no such liquidity need for the company and so the small value of the ratio has no such important implications. (The ratio is of interest to short-term creditors)

B Year

Solvency Ratio 2011

1
I.2: I.1:

Debt equity ratio: Long term debt/ equity (net worth)

Loan Fund Shareholders funds 177.55 13735.08

(I.2)/(I.1)

0.0129268

The ratio of 0.01 times, which means that the company has not been aggressive in financing its growth with debt. Thus its earnings are stable. The company has better support from the shareholders.

Debt ratio: debt (long term)/ (debt (long term) + equity) or debt/capital employed

I.2: I.1:

Loan Fund Shareholders funds

177.55 13735.08

(I.2+I.1)

13912.63

(I.2)/(I.2+I.1)

0.0127618

The ratio of 0.01 signifies that the company has employed more capitals over its debts. Thus the Company is efficiently utilizing its loan funds.

Interest Coverage ratio =(earnings before interest and tax) / interest

P/L:III:

profit before taxation exceptional items

3926.7

II.4a -13:

Interest accrued but not due on loans

0.55

(P.III)/(II.4a-13)

7139.454545

The ratio of 7139.4 times is magnificently very high and hence the company has very sound financial position. It has no tension of paying interests over its loans.

C YEAR
1

TURNOVER RATIOS 2011

Inventory turnover=Cost of goods sold or net sales/Average (or closing) inventory

P/L:IB

Net sales

7755.42

II.3a:

Inventories

4599.72

(P/L:IB)/(II.3a:)

1.6860635

The ratio of 1.68 times signifies that the company is efficient in selling its stock

Days of Inventory holding= Number of days

in the year

(say 360)/ Inventory turnover ratio.

Number of days in a year

360

Inventories turnover ratios 1.6860

(P/L:IB)/(II.3a:)

1.6860635

The ratio of 1.68 times signifies that the company is efficient in selling its stock

Debtors turnover ratio= Credit sales or net sales/Average (or closing) debtor (or accounts receivable (total debtors +bills receivable)

P/L:IB:

Net sales

7755.42

II.3b: (P/L:IB)/(ll.3b)

Sundry debtors

668.67 11.598277

The ratio of 11.6 times signifies that the company is getting good returns and has no visible risk but benefits out of its debtors.

Collection period= Number of days in the year(say 360)/ Debtors turnover

Number of days in the year

360

Debtors turnover

11.6

360)/(DTR)

31.0345

The debt collection period of 32 days is quiet good and the company is efficient in getting back its dues.

Current assets turnover= Net sales/ Current assets

P/L:IB:

Net sales

7755.42

8161.11 II.3: (P/L:IB)/ (II.3) .950289 Current assets, loans and advances

The ratio of .95 times signifies that, in spite of the current liabilities, the company is efficient in making sales revenue.

Net current assets turnover = Net sales/ Net current assets

P/L:IB:

Net sales

7755.42

Net Current Assets (P/L:IB)/(NCA)

3456.10 2.243980

The ratio of 2.24 times signifies that the company is highly efficient in utilizing its net current assets and generating sales revenue

Fixed assets turnover= Net sales/ Net fixed assets

P/L:IB:

Net sales

7755.42

II.1:

Net Fixed Assets

8485.97

(P/L:IB)/(II.1)

.9139108

The ratio of .92 times signifies that the company is very efficiently utilizing its fixed assets for generating sales revenue

Net assets turnover= Net sales/ Net assets or capital employed = (Net assets =all assets- accumulated depreciation)

P/L:IB:

Net sales

7755.42

II.1:

Net Fixed Assets

8485.97

II.2:

Investments

2837.75

Net Current assets Net assets

3456.10 14779.82

(P/L:IB)/(NA) The ratio of 0.53 times signifies that the company has still to be more efficient in utilizing its net assets in generating sales revenue

.5247303

D Year

Profitability Ratios 2011

Margin: (Profit before interest and tax (PBIT)/ Net sales)100

P/L:III:

Profit before taxation and Exceptional items

4825.74

P/L:IB:

Net Sales

7755.42

(P/L:III)/(P/L:IB)100 (P/L:IB)/(NA)

62.2241 .5247303

The Profit margin of 62.22% is quiet impressive and the company is making good profits.

Net margin= Profit after tax (PAT) 100 / Net sales

P/L:III:

Profit after taxation

3263.59

P/L:IB:

Net Sales

7755.42

(P/L:III)/(P/L:IB)100

42.081409

The net margin of 42.08% is quiet impressive, and the company is performing well.

Before tax return on investment:=(PBIT/Net assets) 100

P/L:III:

Profit before taxation and Exceptional 4825.74 items

II.1: II.2:

Net Fixed Assets Investments

8485.97 2837.75

Net Current assets 3456.10 Net assets (P/L:III)/(NA)100 32.65087 14779.82

The Return of 32.65% is quiet good and company is performing well.

Return on equity= (PAT/Equity (net worth)) 100

P/L:III:

Profit after taxation

3263.59

1.1:

Shareholders funds

13735.08

(P/L:III)/(P/L:IB)100

23.760983

The ratio of 23.76% is quiet good and the company is utilizing the shareholders funds in a better way.

E Year

Equity-related Ratios 2011

Earning per share (EPS)= PAT/Number of ordinary share

P/L:III: P/L:IV-19(iv):

Profit after taxation

3263.59

Weighted average Number of ordinary shares 3757636907 outstanding

(P/L:III)/(P/L:IV)(10^7: to convert in per rupee)

8.68521914

In comparison to the face value of Re.1/share the EPS of Rs.8.69 is very good.

Dividends per share (DPS)= Dividends/ Number of ordinary shares

P/L:IV: P/L:IV-19(iv):

Proposed Dividend

1396.53

Weighted average Number of ordinary shares 3757636907 outstanding

(P/L:III)/(P/L:IV)10^7(to convert into unit rupees)

3.71651129

Dividend per share (DPS) is a simple and intuitive number. It is the amount of the dividend that shareholders have (or will) receive, over a year, for each share they own. In compared to the face value of the share Re.1.00/share. DPS of Rs.3.71 is quiet good.

Pay out ratios=DPS/EPS or Dividends/PAT

DPS EPS

3.71 8.69

DPS)/(EPS)

.4269275

a very low payout ratio indicates that a company is primarily focused on retaining its earnings rather than paying out dividends. The payout ratio also indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are easier to pay out than larger dividends. So the value of 0.43 times is quiet good.

Dividend Yield: DPS/Market value per share

We have to get the Market value per share of the relevant period

Market Price Per Share

The closing price of the common or preferred stock as reported on the applicable stock exchange consolidated tape as of the date indicated

Price/Earning ratio: Market value per share/ EPS

We have to get the Market value per share of the relevant period.

Earning Yield: EPS/ Market value per share

We have to get the Market value per share of the relevant period.

Book value per share: Net worth/ Number of ordinary shares

I.1 P/L:IV-19(iv):

Shareholders funds

13735.08

Weighted average Number of ordinary shares 3757636907 outstanding

(I.1)/(P/L:IV)10^7(to convert into unit rupees)

36.55244064

BV is considered to be the accounting values of each share, drastically different than what the market is valuing the stock at. The book, i.e. Rs. 36.55is far higher than the face value of each share, i.e.Rs.100. Here diluted value is considering numbers of share is not considering

F YEAR
1

Investment-related Ratios 2011

Return on assets or earning power (ROA)= (PAT/ Average total assets (of the given year here 2008&09)) 100 or ((PAT+ Interest)/Average fixed assets) 100

P/L:III:

Profit after taxation Fixed Assets 2010

3263.59

Investments 2010 Current assets 2010 Fixed assets 2009 Investments 2009 Current assets 2009 Average total assets (PAT/ATA) )100

2837.75 8161.11 7295.65 2934.55 7019.27 18367.15 17.768625

Earning power of the company, i.e. 17.69% is quiet good and the company is doing well.

Return on capital employed (ROCE)=(EBIT(PBIT)/ Capital employed) 100

P/L:III:

Profit before taxation and Exceptional 4825.74 items

I:

Sources of Funds

14779.82

((P/L:III)/I)100

32.65087126

The ROCE of 32.65% signifies that the company is getting good return out of its investment Decisions.

G Year

Return on Equity (ROE) 2011

1 ROTSE (return on total shareholders equity)=(PAT/ Total Shareholder equity) 100

P/L:III:

Profit after taxation

3263.59

1.I:

Shareholders funds

13735.08

(P/L:III)/(P/L:IB)100

23.760983

The ratio (23.76 times) is same as that of Return on equity, since there are no preference shares.

G Year

Return on Equity (ROE) 2011

ROOSE (return on ordinary shareholders equity) /RONW (return on net worth)= (PAT- prefenctial dividends)/Net worth) 100

P/L:III:

Profit after taxation

3263.59

1.I:

Shareholders funds

13735.08

(P/L:III)/(P/L:IB)100

23.760983

. The ratio (25.87 times) is same as that of Return on equity, and return on total shareholders equity since there are no preference shares

Du Pont Analysis for the year 2011

Interest charges Corporate Income test Cost of goods sold Operating expenses Net sales+/-non operating surplus/deficit Total cost Net profit after tax Net sales Net profit margin Inventories Other Current assets Cash bank and marketable securities Receivables Current assets Fixed assets Total assets Net sales Total assets turnover Return on total assets

3263.59 7755.42 42.08%

8161.11 8485.97 16647.08 7755.42 .46587269 times 19.60392%

Du Pont Analysis for the year 2011

Interest charges Corporate Income test Cost of goods sold Operating expenses Net sales+/-non operating surplus/deficit Total cost Net profit after tax Net sales Net profit margin

3120.10 21355.94 14.60999%

Inventories Other Current assets Cash bank and marketable securities Receivables Current assets Fixed assets Total assets Net sales Total assets turnover Return on total assets

7019.27 7295.65 14314.92 7408.41 .51753066 times 7.5611178%

CONCLUSION

After going through the long study of ITC financial Report I find out that the ITC company growths their business day by day not only in tobacco products but also in non tobacco products, ITC entered in the fast moving sector with strong marketing strategies, they provide stiff competition to their competitors like parle, Cadbury etc. They also got huge success in the non tobacco products like bingoo, confectionaries, paperboards etc. They have planned a sound supply chain and distribution system. ITC is focusing on the quality of the product. If ITC is growing like this than the day is not away that it became the market leader in fast moving sector same as ITC Tobacco product sector.

BIBLIOGRAPHY

http://www.investopedia.com/terms/d/debtequityratio.

http://www.icmrindia.org/casestudies/icmr_case_studies.

http://www.econ.uconn.edu/

http://www.morningstar.com

Annexure

Cash Flow Statement for the year ended 31st March 2011

Consolidated Profit & Loss Account for the year 31st March 2011

Consolidated Balance sheet for the year 31st March 2011

Thank You!