CHAPTER 1 INDUSTRY PROFILE

1.1 INTRODUCTION

FMCG (Fast Moving Consumer Goods) The fast moving consumer goods (FMCG) sector is the fourth largest sector in the economy with a total market size in excess of Rs. 60,000 Crores. This industry essentially comprises Consumer Non Durable (CND) products and caters to the everyday needs of the population. 1.2 PRODUCT CHARACTERISTICS Products belonging to the FMCG segment generally have the following characteristics: They are used at least once a month They are used directly by the end-consumer They are non-durable They are sold in packaged form They are branded

1.3 INDUSTRY SEGMENTS The main segments of the FMCG sector are: Personal Care Oral care, Hair care, personal wash (soaps), cosmetics and toiletries, deodorants, perfumes, paper products (tissues, diapers, sanitary), shoe care Household care Fabric wash( laundry soaps and synthetic detergents), household cleaners ( dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellants, metal polish and furniture polish) Branded and Packaged Food and Beverages

Health beverages, soft drinks, staples/cereals, bakery products (biscuits, bread, cake), snack food, chocolates, ice cream, tea, coffee, processed fruits, vegetables and meat, dairy products, bottled water, branded flour, branded rice, branded sugar, juices etc.

CHAPTER 2 COMPANY PROFILE

2.1 ABOUT ITC ITC is one of India's foremost private sector companies with a market capitalization of over US $ 33 billion and a turnover of US $ 7 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 ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. 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 AgriExports, 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 'eChoupal' 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 Ltd, provides IT services and solutions to leading global customers. ITC InfoTech has carved a niche for itself by addressing customer challenges through innovative IT solutions. 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 globalising environment to consistently reward more than 4, 07,000 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." 2.2 HISTORY AND EVOLUTION ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianised, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's multibusiness portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods,

Lifestyle Retailing, Education & Stationery and Personal Care - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. The Companys 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. 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 100 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 10 states covering over 4 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now operational in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh. In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards. A line of premium range of notebooks under brand Paperkraft was launched in 2002. To augment its offering and to reach a wider student population, the popular range of notebooks was launched under brand Classmate in 2003. Classmate over the years has grown to become Indias largest notebook brand and has also increased its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw the launch of Children Books, Slam Books, Geometry Boxes, Pens and Pencils under

the Classmate brand. In 2008, ITC repositioned the business as the Education and Stationery Products Business and launched India's first environment friendly premium business paper under the Paperkraft Brand. Paperkraft offers a diverse portfolio in the premium executive stationery and office consumables segment. Paperkraft entered new categories in the office consumable segment with the launch of Text liners, Permanent Ink Markers and White Board Markers in 2009. 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 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), THT (Travel, Hospitality and Transportation) and Media & Entertainment. 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 minto and Candyman confectionery and Aashirvaad atta (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 eight 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 and Vivel range of shampoos in June 2008. 2.3 VISION

2.4 MISSION

2.5 LEADERSHIP
Flowing from the concept and principles of Corporate Governance adopted by the Company, leadership within ITC is exercised at three levels. The Board of Directors at the apex, as trustee of shareholders, carries the responsibility for strategic supervision of the Company. The strategic management of the Company rests with the Corporate Management Committee comprising the wholetime Directors and members drawn from senior management. The executive management of each business division is vested with the Divisional Management Committee (DMC), headed by the Chief Executive. Each DMC is responsible for and totally focused on the management of its assigned business. This three-tiered interlinked leadership process creates a wholesome balance between the need for focus and executive freedom, and the need for supervision and control.

2.6 ORGANIZATION STRUCTURE

2.7 CORE PRINCIPLES ITC's Corporate Governance initiative is based on two core principles. These are: Management must have the executive freedom to drive the enterprise forward without undue restraints; and This freedom of management should be exercised within a framework of effective accountability.

2.8 BOARD OF DIRECTORS

2.9 PRODUCTS

2.10 OBJECTIVES To build lasting relationships with customers based on trust and mutual benefit To uphold highest ethical standards in conduct of our business We create and nurture a culture that supports flexibility, learning and is proactive to change To chart a challenging career for employees with opportunities for advancement and rewards To value the opportunity and responsibility to make a difference in peoples lives

2.11 AWARDS ITC constantly endeavours to benchmark its products, services and processes to global standards. The Company's pursuit of excellence has earned it national and international honours. ITC is one of the eight Indian companies to figure in Forbes A-List for 2004, featuring 400 of "the world's best big companies". Forbes has also named ITC among Asia's'Fab 50' and the World's Most Reputable Companies. ITC has several firsts to its credit: ITC is the first from India and among the first 10 companies in the world to publish its Sustainability Report in compliance (at the highest A+ level) with the latest G3 guidelines of the Netherlands-based Global Reporting Initiative (GRI), a UN-backed, multi stakeholder international initiative to develop and disseminate globally applicable Sustainability Reporting Guidelines. ITC is the first Indian company and the second in the world to win the prestigious Development Gateway Award. It won the $100,000 Award for the year 2005 for its trailblazing ITC e-Choupal initiative which has achieved the scale of a movement in rural India. The Development Gateway Award recognizes ITC's e-Choupal as the most exemplary contribution in the field of Information and Communication Technologies (ICT) for development during the last 10 years. ITC e-Choupal won the Award for the importance of its contribution to development priorities like poverty reduction, its scale and replicability, sustainability and transparency.

ITC has won the inaugural 'World Business Award', the worldwide business award recognizing companies who have made significant efforts to create sustainable livelihood opportunities and enduring wealth in developing countries. The award has been instituted jointly by the United Nations Development Programme (UNDP), International Chamber of Commerce (ICC) and the HRH Prince of Wales International Business Leaders Forum (IBLF). ITC is the first Corporate to receive the Annual FICCI Outstanding Vision Corporate Triple Impact Award in 2007 for its invaluable contribution to the triple bottom line benchmarks of building economic, social and natural capital for the nation.

ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility (Asia)' in 2007, the Award for 'CSR in Emerging Economies 2005' and 'Excellence in Corporate Governance' in the same year. These Awards have been instituted by the Institute of Directors, New Delhi, in association with the World Council for Corporate Governance and Centre for Corporate Governance. ITC Hotel Gardenia, Bangalore is the first Indian Hotel and world's largest, to get the LEED Platinum rating - the highest green building certification globally. The Company's Green Leaf threshing plants at Chirala and Anaparti in Andhra Pradesh are the first units of their kind in the world to get ISO 14001environment management systems certification. ITC's cigarette factory in Kolkata is the first such unit in India to get ISO 9000 quality certification and the first among cigarette factories in the world to be awarded the ISO 14001 certification. ITC Maurya in New Delhi is the first hotel in India to get the coveted ISO 14001Environment Management Systems certification.

ITC Filtrona is the first cigarette filter company in the world to obtain ISO 14001. ITC Infotech finds pride of place among a select group of SEI CMM Level 5 companies in the world. ITC's Green Leaf Threshing plant in Chirala is the first in India and among the first 10 units in the world to bag the Social Accountability (SA 8000) certification. ITC's R&D Centre at Peenya, Bangalore has the distinction of being the first independent R&D centre in India to get ISO 9001 accreditation and certified with ISO 14001 for Environment Management Systems by DNV. The R&D Centre is also certified for the standard ISO/IEC17025:2005, by National Accreditation Board for Testing and Calibration Laboratories (NABL). This certification is awarded for "General requirement for the competence of Testing & Callibration Laboratories". ITC Chairman Y C Deveshwar has received several honors over the years. Notable among them are: Award The Padma Bhushan, one of the highest civilian awards in the country by the Government of India in recognition of his distinguished service of a high order to the Nation, in 2011. 2012 Business Leader of the Year Award conferred by the All India Management Association (AIMA), India's apex body of professional management.

2010 The U.S.-India Business Council (USIBC) Award for Global Leadership. 2007 2006 SAM/SPG Sustainability Leadership Award conferred at the International Sustainability Leadership Symposium, Zurich. Business Person of the Year from UK Trade & Investment, the UK Government organization that supports overseas businesses in that country.

2006 Inducted into the 'Hall of Pride' by the 93rd Indian Science Congress. 2005 Honoured with the Teacher's Lifetime Achievement Award. 2001 Manager Entrepreneur of the Year from Ernst & Young. Retail Visionary of the Year from Images, India's only fashion and retail trade magazine.

1998 Honorary Fellowship from the All India Management Association 1996 Distinguished Alumni Award from IIT, Delhi. 1994 Marketing Man of the Year from A&M, the leading marketing magazine. 1986 Meridien Hotelier of the Year. Some of the other notable recognitions are:

World Business and Development Award 2012 at Rio+20 United Nations Summit at Rio de Janeiro for the transformational rural initiatives in social and farm forestry. The Stockholm Challenge 2006 for the e-Choupal initiative. This award is for using Information Technology for the economic development of rural communities. United Nations Industrial Development Organization (UNIDO) Award at the international conference on Sharing Innovative Agribusiness Solutions 2008 at Cairo for ITC's exemplary initiatives in Agri business through the e-Choupal. 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 also received the National Award for Excellence in Water Management 2007 in the 'beyond the fence' category from the CII Sohrabji Godrej Green Business Centre for its leadership role in implementing water and watershed management practices. The watershed programme also won the Asian CSR Award 2007 for Environmental Excellence given by the Asian Institute of Management. The Award recognizes and honors Asian companies for outstanding, innovative and world-class projects. The Company also received the Ryutaro Hashimoto Incentive Prize 2007 for Environment & Development from the Asia Pacific Forum. This Award aims at promoting information dissemination of good practices towards sustainable development in the Asia-Pacific region. The Readers' Digest Pegasus Award for corporate social responsibility, recognizing outstanding work done by socially conscious companies.

The Corporate Award for Social Responsibility 2008 from The Energy and Resources Institute (TERI) in recognition of its exemplary initiatives in implementing integrated watershed development programmes across 7 states in India. The company also won the award in 2004 for its e-Choupal initiative. The Award provides impetus to sustainable development and encourages ongoing social responsibility processes within the corporate sector. The 'Enterprise Business Transformation Award' for Asia Pacific (Apac), instituted byInfosys Technologies and Wharton School of the University of Pennsylvania for its celebrated e-Choupal initiative. The Best Corporate Social Responsibility Practice Award 2008 jointly instituted by the Bombay Stock Exchange, Times Foundation and the NASSCOM Foundation.

The NASSCOM - CNBC IT User Award 2008 in the Retail & Logistics category. The Company has been recognised for its pro-active and holistic approach to IT adoption and the seamless alignment of IT with business strategy. This is the fourth time that ITC has won Nasscom's Best IT User Award since it was instituted in 2003. The Institute of Chartered Accountants of India Award for Excellence in Financial Reporting with its Annual Report and Accounts, adjudged as a commendable entry under the Category 'Manufacturing and Trading Enterprises'. The Business Today Award for the Best Managed Company in recognition of its outstanding initiatives in the consumer products segment. The only Indian FMCG company to have featured in the Forbes 2000 list. The Forbes 2000 is a comprehensive ranking of the world's biggest companies, measured by a composite of sales, profits, assets and market value. The list spans 51 countries and 27 industries. The NDTV Profit Business Leadership Award for being the Best Food Company of 2007. The Award has been instituted to recognize organizational excellence. The CNBC-TV18's International Trade Award 2008 for Outstanding Exporter of the Year in the FMCG & Food category. ITC continues its dominance of The Economic Times' Brand Equity listing of India's 100 Biggest FMCG Brands, with three brands from its stable making it to the top five. Gold Flake remains India's biggest FMCG brand in terms of sales. Navy Cut ranks at No. 4. ITC's Scissors brand ranks at No 5 and is the only new entrant into the top 10. Restaurant magazine has chosen Bukhara at the ITC Maurya, New Delhi as the best Indian restaurant in the world and the best restaurant in Asia. Bukhara has also been adjudged one of the top 50 restaurants in the world by the London based magazine 'The Good Food Guide'. Bukhara is the only South Asian restaurant to figure in the list. The "Best Supply Chain Practices Award" for time-effective and cost-efficient Logistics Management in Organized Retail to ITC's Lifestyle Retailing Business Division (LRBD). The awards were organized by Retailers Association of India (RAI) in association with ITW Signode the International leaders in packaging solutions.

CHAPTER 3 OBSERVATIONS

3.1 HR DEPARTMENT Putting human energy to productive use of what personnel management is all about. The tasks necessary to accomplish the organizations purposes must be specified, and broken down into workable units that can be performed by one individual. The efforts of each individual must be coordinated with those of other persons with the needed skills and abilities to perform must be acquired. Once they must be motivated to perform. As skills become obsolete, training in new skills must occur. Corrective actions must be taken if work does not meet prescribed standards. Measures must be instituted to retain the services of those who make a positive contribution. Personnel management exists to perform these and related activities. HIERARCHY IN HR DEPARTMENT

FUNCTIONS Human Resource being one of the greatest asset of the company the Personnel Department look after the well being of the employees. This Department is mainly divided into different sections to look after: 1) Establishment 2) Training & Development 3) Welfare & Administration 4) Industrial Relation

5) Public Relation 6) Security and Front Office Management RECRUITMENT Procedure of recruitment Internal recruitment Job postings are done within the company It is displayed on the notice boards of various departments It is only for special posts in the company

External recruitment During the month of May recruitment for E1 level jobs are advertised on. The recruitment for other levels happens as per the requirements of the company. ITC website www.itcportal.com ITC magazines- News Employment News Campus recruitment TRAINING & DEVELOPMENT The respective Head of the Departments once in two years identifies the training needs for the employees. Based on this a calendar is prepared. The training need is identified only for those whose work directly affects the productivity of the company. Training is imparted mainly in 3areas- Technical, Behavioral and Safety Aspects. The company organizes regular training programmers with the assistance of internal and external faculty members. Various programmers on functional areas conducted to keep the employees up to date with the latest development in the field. A refresher course of non-supervisory staff, short lectures, and film shown on general interest topics and safety classes are also held regularly & also send its personnel to attend various

technical and non technical courses conducted by outside agencies, institutions or organization. The company also extends its fieldwork training facilities to students from various institutions.

EMPLOYEE SERVICES It maintains the general welfare of employees on the job and assists them with problems to their security and personal well being 1. Medical Services: This include medical facilities given by the company for diseases,physical ailments and injuries incurred by the employees. 2. Recreation: This provides programmes and facilities for the enjoyment of the emplayess so that they can have a relaxation. This also makes the work environment more attractive and satisfying. 3. School: ITC has a school at ITC Park for the benefits of the kids of the employees 4. Sports and Games: In-house Competitions are conducted once in a while to enhance the skills of the employees even in the field of sports. There is also a golf ground for the senior executives of the company 5. Consumers co-operative society: This is available to meet the needs of the employees for supply of essential commodities. 6. Canteen: A pure hygiene canteen is provided to cater the needs of the employees. Tea, snacks, lunch and dinner is provided. 7. Township: The Company has well planned housing colonies at various locations with round the clock security arrangements and guest houses also. 8. Other services: Every six months the employees are given some gifts. Company sponsored Holiday packages are also given where the employees availing this service can stay in ITC Hotels located at various locations. GENERAL ADMINISTRATION Office general timings

09:00AM - 05:00PM

Shift Timings Early Shift - 06:00AM- 02:30PM Late shift - 02:30AM- 11:00PM Night shift - 11:00PM- 06:00AM 3.2 FINANCE DEPARTMENT
The finance department of a ITC takes responsibility for organizing the financial and accounting affairs including the preparation and presentation of appropriate accounts, and the provision of financial information for managers. The main areas covered by the financial department.

HIERARCHY IN FINANCE DEPARTMENT

Functions Acceptance of cash and paymemt Maintenance of books on accounts completion of balance sheet and then audit Maintenance of stationary records like wages Act, Workers compensation Act, Bonus Act etc. Financial planning for adequate flow and balance of cash Evaluation of capital project

Budgeting for the operational and capital activities Costing and pricing Working capital management for materials operating cost

Book keeping procedures. Creating a balance sheet and profit and loss account. Providing management information. Management of wages. Rising of finance.

Management accounts There is an important distinction between management accounts which involves the provision of information to managers for ongoing decision making, and financial accounting which is concerned with the preparation of financial statements outlining the financial health and performance of a company in previous time periods. Business finance comes from a range of sources: Internal finance comes from owners - shareholders in the case of private and public companies. External finance is provided by banks, and other institutional lenders, as well as creditors.

Financial analysis:
Financial analysis include Budget Creating a budget that provides cash in and out of the business. By monitoring a cash flow-budgets possible to identify points of potential crisis where liquidity will be poor. Budgets can also be

established for business income and expenses and a capital budget shows, for example, large capital investments in facilities, equipment, etc.

Profit and loss analysis Is the creation of a budget of income, which determines the expected future profits / losses for the company. This is important to evaluate the success of the business. The useful parts profitability analysis is Gross profit margins gross profit of the company as a percentage of sales.Operating profit margins- operating profit as a percentage of sales. Solvency analysis Does the calculation of net current assets of a company, as shown in balance Return on capital employed (ROCE) It is a measure of yield progress in all the capitals of the company employees in a given period. Where a business has shareholders it is useful to analyze returns to these shareholders in terms of returns for each rupee invested in share capital

STOCK DETAILS

Last 10 Years High, Low & Closing at BSE

BALANCE SHEET

PROFIT AND LOSS ACCOUNT

3.3 PRODUCTION DEPARTMENT

Production, Planning and Control (PPC) Production, planning and control are concerned with the organization and planning of the manufacturing process. The highest efficiency in production is obtained by manufacturing the required quantity of production at the required time by the best and most economical method. This is a facilitation service to achieve this target. Functions of PPC 1. PPC translates the market or sales forecast into master production plan work out of the raw materials and other input requirements and prepare the detailed departmental production schedule for different time periods (annual, quarterly, monthly, weekly and daily) 2. It establishes the basic relationship among production capacity, inventory levels and sales rate for some period in the future. The objective of such planning is to achieve optimum utilization of available resources 3. PPC also prepares alternative plans to meet emergencies 4. After planning in the second phase, operation is to be executed in accordance with the production plan 5. In the monitoring phase of production management, a phase where actual performance is observed and recorded for the purpose of recording and/or follow up. Actual performance is compared with the planned performance and when required corrective action is taken. In some cases planning may be necessary in view of the change situation and to ensure the effective utilization of man and machinery. Main units of Process Flow and Supporting Units The main units of production in ITC are Cigarette Manufacturing Factory Primary manufacturing department Secondary marketing department

Printing & packaging factory Some of the important supporting units are Engineering Slid making warehouse Logistics

Printing and Packaging Factory Objective To supply packet to secondary manufacturing department of cigarettes with the desired attributes Apart from that ITC printing factory also prepares packets for these products For all ITC products Nokia mobiles Motorola Black dog wine Mortin Hance undergarments Goodnight

3.4 ENGINEERING DEPARTMENT The main objective of Industrial Engineering is to establish and review appropriate methods, standards and programmes for improving production, operating and maintenance in the plant.

The industrial engineering department is responsible for the following activities:

Development and review of organization structure and manpower needs Methods Engineering Development of simplest work methods and process ensuring effective utilization of men, material and machinery

Development of plant layout which is most economical to operate and that is safe and satisfying to the employees

Waste reduction Application of network techniques for all major repair/ construction jobs to minimize cost and time overrun

Job evaluation, rate and norm setting

Application of value engineering and linear programming and other operation research techniques for optimizing the use of scarce resources, blending of raw materials and determining the most economical product mix etc.

3.5 MARKETING DEPARTMENT The various operations of marketing is conducted through different branches spread over various locations in India. The total branches are divided into various regions. Each branch has a branch manager and sales manager reporting to the regional manager. The marketing department is responsible to target the figure of sales coupled with the best after sales services to achieve optimum organizational goals. Every branch is supported with service departments to provide trouble shooting and preventive maintenance. They also conduct sales promotion programs like exhibitions, dealer meet etc. supported by audio visual programs. The sales department is also responsible to develop better dealership network and its harmonious relationship to reach out to the top emerging market. The general manager is the one who is responsible to monitor the entire performance of all the branches. MARKETING Marketing is the process that involves buying and selling of goods and services and an effective means for producing economic development. ITC is a company that focuses on delivering best quality goods and services to its consumers such that to achieve optimal customer satisfaction. The marketing manager heads the marketing department. All the planning and strategy formation regarding marketing activities of the company are devised, implemented and monitored by the department. The new products are designed and then is taken over by the brand team who would coordinate in branding the product using various marketing strategies like advertisements, posters, banners etc. FUNCTIONS OF MARKETING DEPARTMENT

Analysis, planning, executing and controlling of all activities concerned with distribution of goods and services for satisfying the needs of the customer

It helps to make available to the people what is required by them to the lowest possible prices

The experts study the market, customer taste and behavior and design a product which best satisfies the needs of the customer

HIERARCHY IN MARKETING DEPARTMENT

Managing Director Senior Vice president Vice President General Manager National Manager Regional Manager Marketing Manager Assistant Manager Senior Sales Executive Area Executives Salesman Office Boys

MARKETING MIX The marketing department aims at attracting more customers to buy the products. This can be attracted through sales promotion and advertisements. The marketing mix should cater the needs of all the customers. The product mix should include the goods that will suit majority of the customers. It has to be designed in such a way that it will maintain higher standards of living to earn more profits. ESPB DIVISION ITC made its entry to the education and stationery business with its Paperkraft brand in the premium segment in 2002; and later expanded into the popular segment with its Classmate brand in 2003. By 2007, Classmate became the largest Notebook brand in the country. Together, Classmate and Paperkraft offer a range of products in the Education & Stationery space to the discerning consumer, providing unrivalled value in terms of product & price. Classmate and Paperkraft have become a natural extension of the consumer. Meticulous understanding of consumer needs helped creating a relevant and comprehensive portfolio satisfying the needs of different sets of consumers. ITC is the manufacturer of India's first Ozone treated environment friendly Elemental Chlorine Free (ECF) pulp, paper and paperboard. It blends its knowledge of image processing, printing and conversion garnered from Packaging & Printing Business with its brand building and trade marketing & distribution strengths resident in its FMCG business to offer superior value products to consumers. Paperkraft Business paper and the papers used in Classmate and Paperkraft notebooks are superior in quality and environment-friendly. Other offerings available in education and Stationery range are safe and certified non-toxic. ESPB PRODUCTS Classmate Notebooks Classmate Pens Classmate Pencils

Classmate Pencils

Mechanical

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GENERAL TRADE AND MODERN TRADE General trade is a kind of trade which refers to retailing through small stores like kirana stores. Here the customers ask the retailer for a product and he gives it to the customer. Modern trade is a kind of trade which refers to retailing through large-format stores like supermarkets and hyper markets. Here the customers can have a touch and feel of the products in the outlet.

STORE CLASSIFICATION The stores are classified based on the size of the store and the number of products present in the store. Accordingly the stores are classified as follows.

1. Grocery Stores 2. Stationery Stores 3. Super Markets 4. Hyper Markets 5. Specialty Stores

DISTRIBUTION IN GENERAL AND MODERN TRADE

STORE SEGMENTATION The stores are segmented based on the following Criterias MERCHENDISING Type of format Size of business Profile of the outlet

For modern trade: End Cap Gondolas / Bays Sun Board/ Flex Stands For general trade: Stickers Posters Pen stands / Hangers Danglers 3.6 R&D DEPARTMENT ITC is committed to delivering world-class products and services. This requires a clear focus on continuously striving to create a higher value to customers by achieving excellence in all Company's operations. Business excellence calls for a passionate focus on technology, products, services, processes and an operating environment firmly anchored to an impregnable foundation of Quality. ITC firmly believes that quality is not a specifically assignable task. It needs to be firmly rooted and institutionalized in the culture and value system of the Company. ITC nurtures a culture of striving for continuous improvement in quality, be it in products, services, systems or performance. The Company is committed to the establishment of systems and processes to promote organizational creativity and innovation. ITC's development of its Integrated Quality Management System (IQMS) is based on its strong foundation of implementing ISO 9001:2000, ISO 14001, OHSAS 18001, SA 8000, HACCP (for Foods) and IQRS(performance rating and benchmarking of the quality management system). Likewise, ITC's strategic initiatives for developing its people have been based on participative management concepts like QC (Quality Control), TQM (Total Quality Management), KSS (Kaizen Suggestion Scheme), 5S, Six Sigma. All ITC manufacturing units have ISO quality certification. Almost all contract manufacturing units in the Foods Business and all large hotels have food safety and quality systems certified by accredited 'third party' in accordance with 'Hazard Analysis Critical Control Points' (HACCP) standards. Additionally, the quality of all FMCG products of the Company is

regularly monitored through 'Product Quality Rating System' (PQRS). The Leaf Tobacco and Printing & Packaging businesses have achieved world-class ratings in the 'International Quality Rating System' (IQRS) for business excellence in which key processes are rated against international benchmarks and certified by accredited 'third party' independent assurance providers. ITC'S RESEARCH & DEVELOPMENT CENTRES At ITC's Research & Development Centres at Bangalore, Bhadrachalam and Rajahmundry, the Company has assembled a pool of world-class scientists focused on providing the requisite R&D support to its established and new businesses enabling the Company to consistently attain internationally benchmarked quality standards and constantly offer product innovations. ITC R&D Centre at Bangalore provides systemized service to the entire range of ITC's businesses through Product Technology Cells, Common Service Modules, Advanced Research Initiatives and networking with national and international R&D centres. Product Technology Cells (PTCs) are product-specific. Each PTC caters to the needs of the businesses through Market Intelligence, Product Testing & PQRS services, Prototyping services through advanced pilot plants, flavor and fragrance development services, periodic audit of factory quality systems and Product Knowledge and Training Workshops. PTCs assist businesses through sensory evaluations by highly trained and specialized panelists. Common service modules like Packaging and Advanced Analytical labs offer their services across all businesses. ITC R&D Centres are manned by highly qualified and trained scientists specialised in their fields. The labs and pilot plants have ultra modern, stateof-the-art testing and prototyping facilities. The laboratory at Bangalore has obtained accreditation from NABL (National Accreditation Board for Testing & Calibration of Laboratories) for ISO 17025 for key testing protocols.

ITC Corporate R&D located in Bangalore undertakes research programs for multiple ITC businesses built on a common set of core competencies. The initial sets of core competency areas identified are: Plant Breeding and Genetics, Agronomy, Microbiology, Molecular Biology, Silviculture, Cell Biology, Proteomics, Genomics, Biochemistry and Ingredient Sciences. The facility aims to create 'Centres of Excellence' in these areas. ITC's R&D programme at Bhadrachalam is the core of the Company's fibre strategy for its Paperboards and Specialty Papers business. This state-of-theart research centre is consistently striving to improve the productivity of several tree species, in order to give attractive land-use alternatives to traditional farmers and wasteland owners. So far, more than100 high-yielding, fast-growing and disease resistant 'Bhadrachalam' clones have been produced on a commercial scale, including 23 site-specific clones adapted to problematic soils. The productivity of these saplings is 6-9 times that of normal seedlings. ITC's comprehensive R&D facilities at Rajahmundry in Andhra Pradesh cover all aspects of tobacco crop cultivation. In collaboration with the Central Tobacco Research Institute and the Tobacco Board, ITC pioneered FCV tobacco cultivation in India and introduced the Burley and HDBRG varieties. ITC's continued focus on crop development has resulted in new varieties of seeds and hybrids in Andhra Pradesh and Karnataka, which have significantly improved farm yields and helped fulfill the demands of a dynamic global market. The Company's R&D team collaborates with other centres of excellence, and leverages expertise from several leading institutes including the University of Agricultural Science, Bangalore; Indian Institute of Science, Bangalore; CSIOR, Australia and CSIR, South Africa. Catering to the need of ITC's Lifestyle Business is a contemporary master Design Facility at Gurgaon. It offers R&D facilities that have enabled the

Company to offer internationally benchmarked fashion collection every season.

CHAPTER 4 ANALYTICAL REFLECTIONS

4.1 SWOT ANALYSIS

SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities and Threats that are the strategic factors for a specific company. SWOT analysis should not only result in the identification of a company's distinctive competencies, the particular capabilities and resources that a firm possess but also in the identification of opportunities that the firm is currently able to take advantage of due to lack of appropriate resources. SWOT analysis is an analytical technique used in strategic management. STRENGTHS Unmatched distribution reach Superior brand building capabilities Acknowledged service kill in hoteliering New and standardized technology Responsiveness to change

WEAKNESS E-greeting has picked up recently and most of the people are going for SMS and MMS and also has increased the usage of telephone which resulted the greeting cards to be old fashioned. This resulted in the withdrawal of greeting card division from ITC

In case of certain product lines, branding and other strategies adopted make it successful but they are not immediately associated with the parent company. In spite of extensive diversification strategies adopted, ITC has to a great extent is still associated prominently with Tobacco and Hotels

OPPORTUNITIES Long term agreement new union formation identified investment plan launch of new segments/brands process improvements Today major players from the international market are entering India in various industries, for example the launch of Marlboro in India. ITC should utilize this opportunity to prove its capabilities and retain its status in the market THREATS

Government ban on cigarettes. ITC is still having growth in that segment but consumption rate per person has reduced and also people are becoming more health conscious

In todays world and in the future there is and anticipation that the word notebook would conjure up images of a sleek portable computer

Threat of new entrants

4.2 BCG MATRIX The Boston Consulting Group (BCG) reflects the companys portfolio of investments. Each of the companys product lines are plotted in a matrix according to its growth rate of the industry and its relative market share The BCG matrix results in four types of decisions they are Question marks, Stars, Cash Cows and Dogs.

Question Mark These are new products with the potential for success but need a lot of cash for development. If such a product is to gain enough market share to become a market leader then money must be taken from mature products. ITC brand of notebooks Classmate are classified as question mark as it was launched recently in 2003 and its revenue accounts for only 40 Crores while ITCs total revenue is 7600 Crores though it is fundamentally gaining the market share it must try to generate more revenue, this is done by means of obtaining the funds from other product lines.

Stars Stars are market leaders typically at their product life cycle and usually are able to generate enough cash to maintain their high share of the market. ITC group of hotels are placed in this category as they have a high market share in this segment. This industry also has a high growth potential in India due to

various reasons some of them being tourism development in India. Global players entering Indian market in different industries, ITC can cater to their needs to foreigners through their excellent services. Cash Cows These are business that have high market share but are low in growth rate industries. Due to high market share they generate large amount of cash. But as they operate in low growth industries reinvestment of cash is not done in the same industry. ITC tobacco which is a market leader in India is a cash cow. Dogs The businesses in this category have low market share, they are unlikely to be currently profitable and have few prospects of immediate growth. ITC FMCG businesses as in the case of Aashirvaad Atta, is a dog. ITC has very low market share in this industry and also faces stiff competition from the other existing players hindering its overall growth potential.

4.3 McKINSEY 7S MODEL

McKINSEY 7S principle was introduced by Robert Waterman, Tom Peters and Julien Philips. The model says that any organization can be best described by the seven interrelated elements - Strategy, Structure, Systems, Skills, Staff, Style, and Shared Value

STRATEGY:ITC Ltd. Is focused on a strategy of customer satisfaction and achieve exponential growth to leadership through world class product and services.

SYSTEMS:The company has several departments through which the company runs smoothly. Some of the major departments are Production, Finance, Sales and Marketing, , HR, R&D, Engineering, production etc. With the running of these departments the company is able to make necessary decisions for its running.

SKILLS:The most favored and preferred skill is the communication, ability to talk clearly and convey the right thing exactly as required.

STAFF:The total number of staff of ITC Ltd would be over 26,000.

STRUCTURE:The top most position is held by the Managing Director under which the whole company functions. Then each department has its own heads under which comes the executives and workers.

STYLE:Identify opportunities, preparation of marketing strategies and plans for guiding products and programs towards building up the opportunities and also monitor whether the sales people are implementing this program.

SHARED VALUES:The company shares various values between each of the departments. With the help of each department only the company is able to make necessary steps for its growth and sustenance in the competitive market. The company produces high quality pipes for its customers.

CHAPTER 5 CONCLUSION

5.1 SUMMARY It was a nice experience to do my internship at ITC Limited and learn the entire activities about the organization. I learned a lot by applying whatever I have learnt theoretically into the company and it was a nice experience for me to be at the hub monitoring the hub operations. This experience would be very useful to me for next year studies and the future. It has molded me with professional skills and competency that would be helpful for me. The interactions with the Head of the departments, employees and the Area Manager happened to be very informative and it has helped me to gather knowledge in various fields. Also the organization has helped me to inhibit certain values that will make a stepping stone into an organization. Making analysis with the data obtained during training has helped to enhance the analytical skills and I hope that it would be helpful for me in the near future. 5.2 BEST PRACTICES CSR ACTIVITIES Inspired by a vision to serve a larger national purpose and abide with the strong value of Trusteeship, ITC has crafted innovative business models to create larger societal capital while simultaneously delivering long term shareholder value. This overarching aspiration to create meaningful societal value is manifest in ITC's strategy to enhance the competitiveness of value chains of which it is a part. It is therefore a conscious strategy to design and implement Social Investments / CSR programmes in the context of ITC's businesses, by enriching value chains that encompass the most disadvantaged sections of society, especially those residing in rural India, through economic empowerment based on grass-roots capacity building. Recognizing that business enterprises are economic organs of society and draw on societal resources, it is ITC's belief that a company's performance must be measured by its Triple Bottom Line contribution to building

economic, social and environmental capital. ITC is therefore committed to creating larger 'stakeholder value' by aligning its performance to these Triple Bottom Line objectives. As an Indian enterprise, ITC believes that this approach can unleash strong drivers of growth to make it more inclusive and equitable for even the most marginalized sections of society, through the creation of sustainable livelihoods, and to ensure long-term business sustainability and competitiveness. Envisioning a larger societal purpose has always been a hallmark of ITC. The company sees no conflict between the twin goals of shareholder value enhancement and societal value creation. The challenge lies in fashioning a corporate strategy that enables realization of these goals in a mutually reinforcing and synergistic manner. As a corporate citizen with enduring relationships in rural India, ITC has a history of collaboration with communities and government institutions to enhance farm productivity and the rural resource base. ITCs commitments in agricultural R&D and knowledge sharing have spanned vital aspects of competitiveness efficient farm practices, soil and water management.

In 2000, harnessing the empowering force of information technology and its scalability, ITC launched e-Choupal a knowledge portal providing farmers with a range of information and services. Designed to enable them to bargain collectively and enhance their transactive power, e-Choupal became the much needed and easily adoptable tool farmers had been waiting for. Today eChoupal is a vibrant and rapidly growing zone of business and interaction for over 4 million farmers.

ITC moved rapidly to apply the economic momentum of e-Choupal to solving urgent social and environmental tasks. ITC launched Mission Sunehra Kal, a rural capacity building programme fostering local initiatives to develop water and forest resources, open up new non-farm livelihoods, empower women economically and expand primary education. The Mission now embraces a community of thousands of villages that are influential nuclei of change in rural localities spread over 12 States. A clearly focused self-help movement has gained ground in village after village in these areas, with farmers co-operating to create much needed economic, environmental and social assets out of their own resources. By linking knowledge and technology transfer to the creation of economic and social capacity, ITC has brought a new dynamic to rural development. ITC has consciously chosen the path less travelled. A path that has led it to create sustainable livelihoods for 5 million people. For ITC this is an expression of a commitment beyond the market. Of a conviction that country must come before corporation. Of a true pride in being Citizen First.

5.3 BIBLIOGRAPHY www.itcportal.com www.google.com www.businessworld.com www.moneycontrol.com Company documents