I T C

H U L

ITC Limited
One of Indias Most Valuable Corporations

Roll No : 1 to 30

One of Indias most valuable corporations

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

ITC

Featuring 400 of the Worlds best big companies with M-cap. > USD 5 bln. & are rated as the most attractive companies for investors

Only Indian FMCG Company to feature in Forbes 2000 List

A comprehensive ranking of worlds biggest companies measured by a composite of sales, profits, assets & market value

Among top in :

Sustained value creation (BT-Stern Stewart survey)

Operating profits Cash Profits

Ranks No. 10 among Indian listed Private Sector Companies by market cap.
(@27/07/07)

No. 1 in FMCG Sector

Rated as one of Indias Most Respected Companies (IMRB-Businessworld Survey 2006)

BRIEF HISTORY

Vision
Sustain ITCs position as one of Indias most valuable

corporation through world class performance,

Creating growing value fro the Indian economy and the company's stakeholder

Mission

To enhance the wealth generating capability of the

enterprise globalising environment, delivering

superior and sustainable Stakeholder value

ITC's Core Values

Trusteeship Customer Focus Respect For People Excellence Innovation Nation Orientation

Organization Structure
ITC LTD.

Chairman-1 B.O.D. Executive-4

Non Exe-11
Directors-4 Executive-4

C.M.C.

D.M.C.

Cigarettes and Other FMCG

Hotels

Agri business

Paper Board

Corporate Strategies
Sustain multiple drivers of growth, matching internal capabilities with emerging market opportunities Pursue World class competitiveness in all businesses and across the entire value chain Best-in-class in terms of: Internal Vitality

Market Standing
Profitability Strategy of Organisation and Governance processes geared to manage multiple businesses Blend core competencies and leverage ITC umbrella strengths to create new avenues of growth

Corporate Governance-Core Principles

Trusteeship Transparency Empowerment and Accountability Control Ethical corporate citizenship

ITC strives to be Citizen First

Contribute to the 'Triple Bottom Line', Economic, Environmental and Social 1ST Indian company to come out with Sustainability Report, in 2005, certified by PwC. Preservation and enrichment of precious environmental resources Safe and healthy workplace for its employees. ITC's social development initiatives

Responsibility Towards Economy

Management Approach
Policy:

The Company's commitment in the area of economic performance is encapsulated in its Vision statement, which is 'to sustain ITC's position as one of India's most valuable corporations through world-class performance, creating growing value for the Indian economy and the Company's stakeholders'.

Goals and Performance

Sustaining ITC's position as one of India's most valuable corporations Achieving leadership in each of the business segments within a reasonable time frame Achieving a Return on Capital Employed (ROCE) in excess of the Company's cost of capital, at all times

Climate Change & its Financial Implications

ITC Strategy and Action Plans : Constituted a Carbon Committee Committee proactively participates in global forums; studies emerging trends to identify various risks / threats and opportunities from climate change; formulates strategy and supports businesses in evaluation and mitigation measures.

Pension Obligations
Employee Retirement Benefit Scheme Provident Fund & Family Pension
Local Hiring & Social Management
Inducts quality talent from premium campus Range of Selection tools used: Assessment Centers In-Depth Personal interviews

Responsibility Towards Environment

Management Approach
Policy
ITC endeavours not only to minimise its environmental footprint but wherever possible create a positive environmental footprint. The Corporate Management Committee of the Company has issued an Environment, Health & Safety Policy .

Goals & Performance

Performance Beyond Compliance Carbon Positive Footprint Water Positive Footprint Zero Solid Waste (reduction, reuse and 100% recycling of all solid wastes)

ITC is Committed to Energy Sustainability

ITC's Strategy on Energy sustainability & commitment towards reducing GHG emissions Ensuring availability & sustainability of energy supply Benchmarking specific energy consumption to progressively achieve reduction Using renewable resources

Water Positive Corporation

Total Water Intake at all units 25.6mkl(mn kilo ltr) Conservation,Audits & benchmarking {to achieve the lowest specific water consumption (water per unit of production)} Zero Waste Water Discharge- Treating & recycling all waste water,thereby not only reducing fresh water intake but also preventing pollution of fresh water resources. Creating Positive Footprint Through rain water harvesting both at the co. premises and watershed projects

Towards Zero Solid Waste

Facts: Urban India alone generates an estimated 48 mn of solid waste each year. More than 25% of municipal solid waste is never collected for clearance 70% cities lack transport facilities for garbage disposal

Recycling
In 2005-06 total solid waste generated 3,14,585 tonnes. 2,47,428 tonnes in 2005-06

Corporate Social Responsibility

Human Rights Policy

ITC is committed to conducting business in a manner that reflects its high ethical and moral standards. It expects its employees and business partners to subscribe and adhere to this philosophy, which honours all local laws and upholds the spirit of human rights as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the ILO.

Prevention of discrimination at Workplace Freedom of Association Prohibition of Child and Forced Labor Risk control programmes: HIV/AIDS e- Choupal

Corporate Social Responsibility

No success or achievement in material terms is worthwhile unless it serves the needs or interests of the country and its people. - J.R.D. Tata

CSR undertaken by HUL

Greening Barrens Lifebuoy Swasthya Chetana The Fair and Lovely Foundation

Happy Homes
Yashodham Shakti

The fair and lovely foundation

Empowerment of women

Education
Project Saraswati High school Graduate - Post Graduates

Career Guidance
Project Disha

The begining Objective of shakti Rural development Shakti Vani

Vision of Shakti
HLL envisions the creation of 1,00,000 Shakti Entrepreneurs covering 5,00,000 villages, and touching

the lives of 600 million rural people by the year 2010.

Greening Barrens
Water Conservation and Harvesting Project has two major ojectives :To reduce water consumption in its own operations Regenerate sub-soil water tables at its own sites through the principles of 5R - Reduce, Reuse, Recycle, Recover and Renew.

Programs for water management

Water shade management on a 5 hectare plot to prevent soil degradation and conserve water In villageParkhed in association TERI and the Bharatiya Agro industries foundation Karchond village, near the Silvassa site has built 42 bunds since 2003 Extended to factories The Hosur Coffee Factory Yavatmal Personal Products Factory

Marketing Perspective

Problem faced
Inertia of Success : Ignores the danger of competition IBM, General Motors and Maruti which were undisputed leaders have also faced this problem

Lesson learned
Lesson 1 : Top management from CEO onwards has to keep in touch with ground realities Lesson 2: CEO should have the courage of convection to stand upto pressure from head office Lesson 3: Company should be innovative and there should not be resistance to change

Lesson learned
Lesson 4: Company has its own history and culture on which its management can draw upon

(%)

ITC - Business Portfolio

ITC

FMCG: Cigarettes Other FMCG

Hotels

Agri Business Leaf Tobacco Agri Commodities

Paperboard Paper & Packaging

76

Cigarettes & otherFMCG

FMCG

FMCG

80

Information Technology

82

3 D Model

Financial Perspective

Segment wise Sales

By Segement % of Sales
100% 80% 60% % of Sales 40% 20% 0% 2001 2002 2003 2004 2005 2006 Year Soap, Detergent & Household care Chemical, Agriculture, Fertilizer & Animal Foods Food Personal Products

Otehrs

SEGMENTAL REVENUE FOR Yr 2006

11% 15% Cigarettes Fmcg Hotels 4% 6% 64% Agri business Paper

CIGARETTES

BY 4% FMCG

BY 2%
SEGMENTAL REVENUE FOR Yr 2007

HOTELS

10% 17% Cigarettes Fmcg Hotels Agri business 5% 8% 60% Paper

BY 1% AGRI BUSS

BY 2%

ROSE (%)

ROSE (%)
90 80 70 60 50 40 30 20 10 0

82.84 68.13 61.07 57.21 46.10 50.13

ROSE(%)

2006

2005

2004 Year

2003

2002

2001

ROSE
29 28

ROSE (%)

27 26 25 24 23 22 2007 2006 2005 2004 2003 2002 2001

Year

ROCE (%)
ROCE (%) 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2006 2005 2004 2003 2002 2001 42.2 ROCE (%) 66.6 66.6 67.9 58.4 56.2 57.9

ROCE
45 40 35

ROCE(%)

30 25 20 1 5 1 0 5 0 2007 2006 2005 2004 2003 2002 2001

Year

Shareholders' Equity
1 2000 1 0000

Rs.Crores

8000 6000 4000 2000 0 2007 2006 2005 2004 2003 2002 2001

Year

Current Ratio Vs Quick Ratio

Current ratio vs Quick ratio
1.20 1.00
times

0.80 0.60 0.40 0.20 0.00

0.89 0.70 0.36 0.67 0.49 0.35

0.90 0.54

0.92 0.56

0.96 0.60 Curr. ratio Quick ratio

2006

2005

2004 year

2003

2002

2001

Current Ratio & Quick Ratio

2 1 .8 1 .6 1 .4 1 .2 1 0.8 0.6 0.4 0.2 0 2007 2006 2005 2004 2003 2002 2001

Ratio

Year

Current Assets Vs Inventory

CA vs Inventory
400000 350000 300000 250000 200000 150000 100000 50000 0 2006 2005 2004 Year 2003 2002 2001

Rs. in lacs

CA Inventory

Current Assets Vs Current Liabilities

CA vs CL
500000 400000
Rs. Lacs

300000 200000 100000 0 2006 2005 2004 Year 2003 2002 2001

Curr.Asset Curr.Liab

Current Assets Vs Current Liabilities

7000 6000 5000

Rs.Crs

4000 3000 2000 1 000 0 2007 2006 2005 2004 2003 2002 2001

Year

Profit After Tax

PAT
200000 150000 100000 50000 0 2006 2005 2004 Year 2003 2002 2001

185537.34 140810.44 119734.37

177179.4

170145.69

157635.55

RS in lacs

PAT
3000 2500 2000 1 500 1 000 500 0 2007 2006 2005 2004 2003 2002 2001

Rs.Crores

Year

PBIT
4500 4000 3500

Rs.Crores

3000 2500 2000 1 500 1 000 500 0 2007 2006 2005 2004 2003 2002 2001

Year

EPS
EPS
9 8 7 6 5 4 3 2 1 0

7.16

7.73

8.05 6.4 5.44

8.41

Rs

2001

2002

2003 Year

2004

2005

2006

EPS
1 00 90 80

Rs. Per Share

70 60 50 40 30 20 1 0 0 2007 2006 2005 2004 2003 2002 2001

Year

P/E Ratio
P/E Ratio 35 30 25
Rs

31.23 23.57 25.43 26.38

30.84 25.76

20 15 10 5 0 2001 2002 2003 Year 2004 2005 2006

P/E Ratio
3.5 3

Ratio (Times)

2.5 2 1.5 1 0.5 0 2007 2006 2005 2004 2003 2002 2001

Year

Dividend Per Equity Share

Dividend Per Equity Share 7 6 5
Rs

6.01 4.5 4.98 3 5 5

4 3 2 1 0

2001

2002

2003 Year

2004

2005

2006

Yield (%)
Yield (%) 4 3.5 3 2.5 2 1.5 1 0.5 0

3.48 2.74 2.01 1.47 2.74 2.01

In %

2001

2002

2003 Year

2004

2005

2006

Dividend Yield
40 35 30

Yield (%)

25 20 1 5 1 0 5 0 2007 2006 2005 2004 2003 2002 2001

Year

DPS
35 30

Rs.Per Share

25 20 1 5 1 0 5 0 2007 2006 2005 2004 2003 2002 2001

Year

Payout And Plough back (%)

Payout (%) and Ploughback (%)

100 80 60 in % 40 62.82 20 0 2001 2002

64.4 37.27 37.18 35.6 62.73

8.08

21.84

28.56

91.92

78.16

71.44

Ploughback (%) Payout (%)

2003 Year

2004

2005

2006

Ploughback Ratio
80 70 60

Percent

50 40 30 20 1 0 0 2007 2006 2005 2004 2003 2002 2001

Year

Payout Ratio
45 40 35 30

Percent

25 20 15 10 5 0 2007 2006 2005 2004 2003 2002 2001

Year

Other Parameters

Economic Value Added (EVA)

EVA (In Rs Crore) 1600 1400 1200 1000 800 600 400 200 0 2001 2002 2003 Year 2004 2005 2006

Rs Crore

Proprietary Ratio
Proprietary Ratio 1.2 1 0.8
Ratio

0.97

0.98

0.98

0.97

0.6 0.4 0.2 0 2001 2002

0.56

0.59

2003 Year

2004

2005

2006

Cash Position Ratio

Cash Position Ratio 0.3 0.25 0.2
Ratio

0.25 0.19 0.21

0.26

0.15 0.1 0.05 0 2001 2002 2003 Year 2004 2005 2006 0.09 0.09

ITC Vs BSE FMCG Index

250 2500

2137.42
200

194.95 1934.17 1647.47

2000

150.4
150 1500

Rs.

1109.8
100

1058.97 89.58 69.43

1000

50

41.97

500

0
0 Year 2003 2004 2005 2006 0 2007

Year

Performance Track Record- Snapshot

Rs. Crs 1995-96 Actuals 5115 2536 584 536 452 261 0.7 1121 1886 28.4 2006-07 Actuals 19505 12369 4293 3930 3927 2700 7.2 10425 11125 35.3 Cagr % 12.9 15.5 19.9 19.9 21.7 23.7 23.4 22.5 17.5

GROSS TURNOVER NET TURNOVER PBDIT PBIT PBT PAT (before exceptional items) Earnings Per Share (Rs) NETWORTH CAPITAL EMPLOYED ROCE %

Total Shareholder Returns: 25%

Rs. 1 crore= Rs. 10 million

Key Financials:2006/07
Rs. Crs.

GTO NTO PBT PAT PAT (after Exceptional Items) Balance Sheet Size Non Cigarettes Business

19505 12369 3927 2700 2700 11125

20.2 26.3 20.1 18.4 20.8 17.0

52% of NTO (48% LY)

Segment Results: FY 06/07

Rs. Crores FY 2006-07 2. Segment Results a) FMCG - Cigarettes - Others Total FMCG Hotels Agri Business Paperboards, Paper & Packaging Total Less i): ii) Interest (Net) Other un-allocable expenditure net of un-allocable income 3172 (202) 2970 351 123 417 3861 3 (69) 2709 (172) 2537 258 91 351 3237 12 (44) 17.1 (17.6) 17.1 35.9 35.4 18.6 19.3 (72.5) FY 2005-06 Goly (%)

b) c) d)

Profit Before Tax

3927

3269

20.1

Segment Capital Employed: FY 06/07

Rs. Crores FY 2006-07 FY 2005-06 Goly (%)

3. Capital Employed a) FMCG - Cigarettes* - Others Total FMCG Hotels Agri Business Paperboards, Paper & Packaging 2019 940 2959 1467 1480 2559 8465 1464 489 1953 1374 1060 1908 6295 37.9 92.2 51.5 6.8 39.7 34.1 34.5

b) c) d)

Total Segment Capital Employed