MIRA
INFORM REPORT
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Report Date : |
10.01.2011 |
IDENTIFICATION DETAILS
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Name : |
ITC LIMITED |
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Formerly Known
As : |
Imperial Tobacco
Company of India Limited |
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Registered
Office : |
Virginia House,
37, |
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Country : |
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Financials (as
on) : |
31.03.2010 |
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Date of
Incorporation : |
24.08.1910 |
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Com. Reg. No.: |
21-1985 |
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CIN No.: [Company Identification
No.] |
L16005WB1910PLC001985 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
CALI01571D |
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PAN No.: [Permanent Account No.] |
AAACI5950L |
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Legal Form : |
A Public Limited Liability
Company. The Company’s Shares are Listed on Stock Exchanges. |
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Line of Business
: |
Manufacturer of
Cigarettes and Tobacco. It is also engaged in Hotel Business. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa (81) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 562570000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
ITC is a
Diversified Group. It is a well established and a reputed company having good
track. Financial position of the company appears to be sound. Directors are
reported to be experienced and respectable businessmen. Trade relations are
reported as fair. Business is active. Payments are reported to be regular and
as per commitments. Company can be
considered good for normal business dealings at usual trade terms and
conditions. It can be
regarded as a promising business partner in medium to long run. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
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Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
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Registered Office : |
Virginia House, 37,
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Tel. No.: |
91–33–22260034/
22260029/ 22266426/ 22499371/ 9253/ 22469373/ 22889371 |
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Fax No.: |
91–33–22452251-60
/ 91-033-22882259 / 2260 / 1256 |
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E-Mail : |
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Website : |
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Headquarters : |
84 (Old No.90) |
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Tel. No.: |
91-44-42081508 |
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Fax No.: |
91-44-24340294 |
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Factory 1: |
Integrated Industrial Estate, Sidcuil, Plot No. 1, Sector 11, |
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Tel. No.: |
91-1334-322483 |
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Fax No.: |
91-1334-235383 |
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Factory 2: |
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Tel. No.: |
91-44-25733121 |
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Fax No.: |
91-44-25733852 |
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Head Office : |
ITC Hotel Kakatiya
Sheraton and Towers, 63-3-1187, Begumpet, |
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Tel. No.: |
91-40-23400132 |
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Fax No.: |
91-40-23401045 |
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Corporate Office : |
Kakatiya Sheraton
and Towers, Begumpet, |
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Plants : |
Cigarette Factories v
Kolkata v
93/1, Karl Marx Sarani, P. B.
No. 17203, Kolkata - 700 043, West Munger v
Basdeopur P. O., District
Munger - 811 202, v
Sardar Patel Marg, P. O. Box
No. 25, Green Leaf
Threshing Plants Anaparti v
East Godavari District,
Anaparti - 533 342, Chirala v
Prakasam,
P. B. No. 1, Chirala - 523 157, Packaging and
Printing Plants Chennai v
Post Box No. 2277, Tiruvottiyur, Chennai - 600 019, Tel No.: 91-44-25733121/25733171/25733181 Fax No.: 91-44-25733852 Haridwar v
Plot No. 1, Sector 11,
Integrated Industrial Estate, Haridwar – 249403, Munger
v
Basdeopur P. O., District
Munger, Munger - 811 202, Tel No.: 91-6344-220505/16/17 / 2201892/222126/142/146 Fax No.: 91-6344-222443/222839 Paper and
Paperboard Mills Bollaram v
Anrich Industrial Estate,
Village Bollarum, Medak District, Andhra Pradesh – 502 325 Sarapaka v
Sarapaka, Khammam District -
507 128, Thekkampatty v
Tribeni v
P O Chandrahati, District
Hooghly – 712 504, West Cast Coating Plant Anrich Industrial
Estate, Village Bollarum, Medak District - 502 325, Lifestyle Retailing Design and Technology Centre v
86, Industrial Estate, Phase
I, Udhyog Nagar, Gurgaon - 122 016, Foods Factories Haridwar v
Plot No. 1, Sector 11,
Integrated Industrial Estate, Haridwar – 249403, Ranjangaon v
Plot No. D – 1, MIDC, Ranjangaon, Taluka Shirur, Pune – 412220, Personal Care Products Factory Haridwar v
Plot No. 1, Sector 11, Integrated
Industrial Estate, Haridwar – 249403, Choupal Saagars –
Rural Services Centres v
Old Survey No. 12/5, 12/6,
and 12/7, Patwari Halika No. 48, Mouza Degaon, Pargana Nandgaon Peth, Tehsil,
Amravati – 444 601, Maharashtra, India Badaun v
Khasara No. 10 and 12/3
(Part), Village Khunak, Tehsil Pargana, badaun – 243 601, Chandouli v
Khasara No. 57 to 62 and 641,
Muhabatpur Village, Ganj Khwaja, Pargana Dhoos, Tehsil Sakaldeeha, Chandouli
– 232 104, Uttar Pradesh, India Chindwara v
Khasara No. 16/1, to 16/7,
Patwari Halka No. 7, Village Imaliya Bohata, Chindwara – 480 001, Dewas v
Survey No. 295 and 294/2,
Patwari Halka No. 26, Village Lohar Pipliya, Tehsil, Dewas – 455 001, Madhya
Pradesh, India Dhar v
Plot No. 438, Village
Jaitpura, Ahmedabad, Hardoi v
Khasara No. 658 and 659, Village
Korriyan, Pargana Gopamau, Shahjahanpur Road, Tehsil , Hardoi – 241 001,
Madhya Pradesh, India Hathras v
Khasara No. 21, Village Itarsi v Survey No. 309/1,
309/2 and 310/3, Village Raisalpur, Tehsil,
Itarsi, Hoshangabad - 461
111, Jagdishpur v Khasra No.
2377-2380, Village Kathura, Pargana Jagdishpur, Tehsil Musafirkhana,
Sultanpur - 227 817, Mandsaur v Patwari Halka
No. 14, Village Azizkhedi Tehsil, Mandsaur - 458 001, Mhow v Village Gawli
Palasia, Patwari Halka No. 20, Tehsil Ambedkar Nagar, Mhow, Nagda v Khasra No. 1393,
1394,1396 and 1397, Village Pandlya Kala, Nagda - 456 335, Parbhani v Ratlam v Survey No.107/1,
107/2 and 107/3, Village Kharakhedi, Tehsil Ratlam - 457 001, Sehore v Khasra No. 208
and 209, Village Rafiqganj, Tehsil Sehore - 466 001, v Survey No.
433/3, 456 and 458, Patwari Halka No.
19, Village Kamed, Tehsil Ghattia, Ujjain - 456 001, Madhya Pradesh, India 26
Vidisha v Survey No. 18,
Patwari Halka No. 45, Village Bais, Tehsil Vidisha - 464 001, Wardha v Survey No. 151/1
and151/4, Mouza No. 17, Mouza Inzapur, Tehsil Wardha - 442 001, Washim v Survey No. 104,
Patwari Halka No. 10, Mouza Zakalwadi, Akola Road, Taluka Washim - 444 505,
Maharashtra, India Yavatmal v Bhumapan No.
15/2A, Village Parwa, Yavatmal - 445 001, Wills Lifestyle Stores
Ahmedabad v
Shop No. 3, Tel No: 079-26402303 v
Shop No. 231-232, Iscon Mega
Mall, Near Iscon Temple, Sarkhej, National Highway, Ahmedabad 380 054 Tel No: 079-40026308 v
6, Tel No: 080-41123662 v
Binnamangala, First Stage, Tel No: 080-41715665 v Shop No. 39,
Ground Floor, Total Mall, Kaikondarahalli Village, Sarjapur Road, Bengaluru
560 037 Tel No:
080-41106326 Bhubaneshwar v 794, Shaheed Nagar, Janpath, Bhubaneshwar
751007 Tel No: 0674-2544386 v SCO 14, Sector
17E, Tel No:
0172-6549856 Chennai v 19, Quaiser
Tower, Tel No:
044-28332515 v Shop No. 6,
Chennai Citi Centre, 10 and 11, Dr. Radhakrishna Salai, Chennai 600 004 Tel No:
044-43536214 Dehradun v 56, Tel No:
0135-2743444 Ernakulam v 40/7182, Tel No:
0484-3918800 Gurgaon v Shop No. 17, 18,
19 and 20, The Metropolitan, Mehrauli - Tel No: 0124-4104444 v Shop No. G 64 and
65, Ambi Mall, Ambience Island, National Highway No. 8, Gurgaon 122 001 Tel No: 0124-4665492 v Shop No. G 4 and
5, G. S. Chambers, Tel No:
040-66364700 Jaipur v Gulab Niwas, Tel No:
0141-2360684 v 5 and 6
Residency Road, Tel No: 0191-2573153 v Rave 3, Tel No:
0512-3042114 Kolkata v 19B, Shakespeare
Sarani, Kolkata 700 071 Tel No:
033-22826102 v C-008 and C-010,
City Centre, Block – DC, Sector 1, Tel No: 033-23589137 v Shop No. S026,
South City Mall, 375, Tel No: 033-40072208 v B-1, First
Floor, Fun Republic Mall, Gomti Nagar,
Tel No: 0522-3914398 v Shop No. 25, Tel No: 0522-4008401 v 85/4A, The Mall,
Tel No: 0161-2441423 v Shop No. 44-45,
50-51, The Westend Mall, Tel No:
0161-4644436 Mumbai v Shop No. 2, 3
and 32, Ruki Mahal Co-operative Housing, Society Limited, Colaba, Mumbai 400
005, Tel No: 022-22818261 v Plot No. 386,
Durga Chambers, Linking Road, Khar (West), Mumbai 400 052, Maharashtra, India Tel No: 022-26465503 v F-8 and 9,
Inorbit Mall, Tel No: 022-66430498 v Unit No.10, Tel No:
022-66490407 v Unit No. 4 and
5, Skyzone Level 1, Block 2, Phoenix Mills Compound, 462 Senapati Bapat Marg,
Lower Parel, Mumbai 400 013,
Maharashtra, India Tel No:
022-40040604 v Shop No. G11,
Mega Mall, Malad Linking Road, Oshiwara, Andheri (West), Mumbai 400 104,
Maharashtra, Tel No: 022-40167330 v F-41, South
Extension-I, Tel No: 011-41645555 v 10208, Tel No:
011-28750433 v E-2, Tel No:
011-23417960 v M-12, Greater
Kailash-I, Tel No: 011-29232555 v Shop No. GF 10
and 11, TDI Mall, Plot No. 11, Shivaji Place, Rajouri Garden, New Delhi 110
027 Tel No:
011-25105150 v Select Citywalk,
G 3 and 4, Ground Floor, Plot No. A3, District Centre Saket, Tel No: 011-42658267 Noida v Shop No. G 32, Tel No:
0120-2458992 Panjim v 3293, Tel No:
0832-6641222 Pune v 1204/22, Shivaji
Nagar, Tel No:
020-66019402 v 11, Tel No:
020-26121222 v Unit No. 12,
City Mall 36, Tel No:
0711-6454545 v GEL
Church-Commercial Complex, Tel No: 0651-2330909 Siliguri v Shop No. 20 and
21, Lower Ground Floor, Cosmos Mall, Sevoke Road, Siliguri 734 001 Tel No: 0353-6453601 v UG - 2, Manav
Mandir, Athawa Lines, Tel No:
0261-2257283 v Shop No. 312 and
313, Second Floor, Iscon Prozone Mall, Tel No: 0261-6454599 Thiruvananthapuram v Shop No. 1, Tel No:
0471-3012008 Vadodara v Shop No. 42-44,
Ground Floor, Siddharth Complex, R. C. Dutt Road, Alkapuri, Vadodara 390 005 Tel No: 0265-2325764 v Shop No. 43-44,
Basement, Siddharth Complex, R. C. Dutt Road, Alkapuri, Vadodara 390 005 Tel No: 0265-2321594 v Shop No. 1,
Rednam Manor, Dwarka Nagar, Near Tel No: 0891-2702881 Club Stores v Gurgaon v Classic Golf
Resort Kolkata v Tollygunge Club v Royal John Players Stores* v 48, Tel No:
080-51185719 v G-2, Sigma Tel No:
080-41264344 v 8th Cross,
Malleswaram, Bengaluru 560 003 Tel No: 080-23561632 v Shop No. 1,
Total Mall, Tel No:
080-41400080 Chennai v Shop No. 20,
Kasi Arcade, 116, Sir Thygaraya Road, T. Nagar, Chennai 600 017 Tel No:
044-28150297 v No. 68 (Old No.
89), Tel No:
044-43502651 v Shop No. 129A, Tel No:
044-52652449 v Shop No. 145, AA
Block, Tel No:
044-42611257 v Shop No. 63, 1st
Tel No:
044-42035939 v 3-6-198,
Sreemukh Complex, Street No. 11, Himmayath Nagar, Tel No: 040-66784479 v Shop No. 16 and
17, Upper Ground Floor, Sonali Mall, Tel No: 040-66135345 v Shop No. 211,
Second Floor, City Centre, Banjara Hills, Tel No:
040-27810092 v Shop No.
16-11-740/5/A/9 and 10, Opp. Kala Niketan, Dilsukhnagar, Tel No: 040-66562102 v 6-3-882/2 to 24,
Tel No: 040-40033339 Kolkata v Tel No:
033-22288035 v 25B, Tel No: 033-32963064 v 14, The
Metropolis, Tel No:
033-24367039 v 6/1, Tel No: 033-22497887 v 200/2C, Tel No:
033-24664928 v 8, Tel No: 033-24989752 Mumbai / Thane v Gala No. 4,
First Floor, Tel No:
022-28656154 v 20 Cusrow Bagh,
Colaba, Mumbai 400 005 Tel No: 022-22876461 v Nakshatra Mall,
Unit No. 21, 22, 23 and 24, Tel No:
022-24360794 v Shop No. 2 and
2A, First Floor, Tel No:
022-25290004 v Shop No. 1, 2, 3
and 4, Nadiadwala Chawl, SV Road, Opp. Paaneri, Andheri (West), Mumbai 400
058 Tel No: 022-26203660 v Shop No.6-A, Tel No: 0251-2447787 v Shop No. F38A,
1st Floor, Eternity Mall, Near Eastern Expressway Tin Hath Naka, Thane (West)
400 601 Tel No:
022-25830838 v New Tel No: 0251-2300446 v Shop No. 1,
Martuvaibhav Naughar, Vasai West, District Thane 401 202 Tel No: 0250-2335477 v Shop No. 34/35, City
Centre Mall, Sector No. 19D, Palm Beech Road, Navi Mumbai, Vashi 400 703 Tel No:
022-27896912 v D-35, Lajpat
Nagar, Central Market – II, Tel No:
011-46573240 v Shop No. 7/2,
West Patel Nagar, Tel No:
011-25889043 v UG – 05, TDI
Mall, Plot No. 11, Shivaji Place, Rajouri Garden, New Delhi 110 027 Tel No: 011-25160440 v F-16, District
Centre, Tel No: 011-25618031 v P-15, Pandav
Nagar, Mayur Vihar, Tel No: 011-22756180 v 13/29-30, Tel No: 011-25810440 v Shop No. 188,
Sarojini Nagar Market, Tel No: 011-24676188 v F-14 / 17 Model
Town, Phase II, Tel No: 011-47062048 v B-Block, Shop
No. 2, Unitech Mall, Rohini, Sector 11, Tel No: 011-27572652 v 16 Regal
Building, Tel No: 011-43565499 v Block C, Opp.
Odeon Cinema, Tel No: 011- 43575253 v Shop No. FF 101
and 102, Plot No. 12, Laxmi Nagar, District Centre, Tel No: 011-22446327 v UB-42 / 43,
Jawahar Nagar, Kamla Nagar, Tel No: 011-41530100 v Shop No. 1257A,
Main Market, Rani Bagh, Tel No: 011-27022577 v G-8, Ground
Floor, Cross River Mall, CBD, Shahadra, Tel No:
011-22308440 v G-54, Laxmi
Nagar, Vikas Marg, Tel No: 011-22542495 v FF-33, First
Floor, MGF Mall, The Metropolitan, Mehrauli - Tel No: 0124-4085706 v Shop No. 106,
First Floor, MGF Mega City Mall, Mehrauli - Gurgaon Road, Gurgaon 122 002 Tel No: 0124-4203900 v UG-10, Omax
Mall, Tel No: 0124-4253687 v Shop No. G-53,
Ambi Mall, Ground Floor, Tel No: 0124-6451287 v Shop No. 16 and
30, 2nd Floor, Centre Stage Mall, Sector 18, Noida 201 301 Tel No: 0120-4351856 v Shop No. 225,
Ground Floor, C-134B, Shoprix Shopping Mall, Sector 61, Noida 201 301 Tel No: 0120-2582143 v 205, Second
Floor, Tel No: 0120-4232952 v Shop No. 4, 5
and 6, Tel No:
0120-2322563 v Shop No. F-6,
First Floor, Tel No: 0129-5014077 v ‘SRS BTL’, Tel No: 0129-4090100 v UGF-A103,
Manhattan Mall, Sector 20-A, Tel No: 0129-6462032 v Shop No. 55,
First Floor, Shipra Mall, Plot No.9, Vaibhav Khand, Ghaziabad 201 012 Tel No: 0120-3023085 v Shop No. 21 and
22, Pacific Mall, Plot No.1, Site-IV, Sahibabad Industrial Area, Tel No: 0120-3053322 v 24, Gyan Deep
Building, Chaudhary More, Tel No: 0120-4112356 203 Adalja Commercial Centre, 2nd Floor, Tel. : 91-265-2281180/2281732 Secunderabad ‘ Tel No.:
91-40-27804025,2293 Mumbai Tel 91-22-22830543 Fax 91-22-22832654 SBU-PPB, ITC Green Centre, 10
Institutional Area, Sector 32, Gurgaon 122 001 Tel No.: 91-124-4171417/4171000 Fax No.: 91-124-4173145 Bengaluru SBU:PPB, PO- Pulikeshinagar, Bengaluru 560
005 Tel No.: 91-80-25498580 Fax No: 91-80-25493677 |
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Hotels : |
ITC Hotel Sonar Bangla Sheraton and
Towers, 1, ITC Hotel Grand Maratha Sheraton and Towers Sahar, Mumbai -
400 099, ITC Hotel Maurya Sheraton and Towers Diplomatic
Enclave, Chola Sheraton 10, WelcomeHotel Mughal Sheraton Taj Ganj, Owned Hotels v ITC Mughal*, Taj
Ganj, v Bengaluru v ITC Chennai v Sheraton Chola
Hotel, Jaipur v Sheraton
Rajputana Hotel, Kolkata v ITC Sonar*, 1, v Kolkata
Marketing Brnach, 2nd Floor, Tel No. 91-33-22889371 Fax No.91-33-22882580 Mumbai v ITC Maratha*,
Sahar, Mumbai 400 099 v ITC Grand
Central*, 287, v ITC Maurya*, Diplomatic
Enclave, v Sheraton New
Delhi Hotel, District Centre, Saket, v Licenced
Hotels v WelcomHeritage
Umed, Port Blair v Vadodara v WelcomHotel
Vadodara, v Hotels
Under Operating Services v WelcomHotel Rama
International, R-3, Chikalthana, Chennai v v ITC Kakatiya*,
6-3-1187, Begumpet, v |
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Division
Headquarters : |
Chief Executive
Head of Finance
Vice President - HRD
Chief Information Officer
Chief Manager - Processed Fruits
Vice President - Operations
Trader - Edible Nuts and Spices
Chief Trader - Coffee and Spices
Chief Manager - Aqua Mr. S. Biswas |
DIRECTORS
AS ON 31.03.2010
|
Name : |
Mr. Yogesh
Chander Deveshwar |
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Designation : |
Chairman |
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Other
Directorship: |
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·
Surya Nepal Private
Limited ·
HT Media Limited ·
West Bengal
Industrial Development Corporation Limited |
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Name : |
Mr. Anup Singh |
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Designation : |
Executive Director |
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Other
Directorship: |
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·
ATC Limited ·
Surya Nepal Private Limited |
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Name : |
Mr.
Krishnamoorthy Vaidyanath |
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Designation : |
Executive Director |
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Other
Directorship: |
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·
Russell Credit Limited ·
Gold Flake Corporation Limited ·
Wills Corporation Limited ·
Greenacre Corporation Limited ·
ITC Infotech India Limited ·
ITC Infotech India Limited, ·
ITC Infotech ( ·
Classic Infrastructure and Development Limited |
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Name : |
Mr. Kurush Noshir Grant |
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Designation : |
Executive Director |
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Name : |
Mr. Anil Baijal |
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Designation : |
Non Executive Director |
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Other Directorship: |
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·
International Travel House Limited ·
Bangalore Metro Rail Corporation Limited ·
DLF Pramerica Life Insurance Company
Limited ·
IDFC PPP Trusteeship Company Limited ·
MMTC Limited |
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Name : |
Mr. Shilabhadra Banerjee |
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Designation : |
Non Executive Director |
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Name : |
Mr. |
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Designation : |
Non Executive Director |
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Name : |
Mr. Serajul Haq Khan |
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Designation : |
Non Executive Director |
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Other Directorship: |
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·
Infrastructure Development Finance
Company Limited ·
Apollo Health Street Limited ·
Bajaj Auto Limited ·
Bajaj Allianz General Insurance
Company Limited ·
Bajaj Allianz Life Insurance Company
Limited ·
Bajaj Holdings and Investments
Limited ·
Bajaj Finserv Limited |
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Name : |
Mr. Dinesh Kumar Mehrotra |
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Designation : |
Non-Executive Directors |
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Other Directorship: |
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·
LICHFL Care Homes Limited ·
LIC (International) B.S.C © Bahrain ·
LIC Housing Finance Limited ·
ACC Limited ·
Infrastructure Leasing and Financial Services Limited ·
LIC Cards Services Limited |
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Name : |
Mr. Sunil Behari Mathur |
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Designation : |
Non-Executive Directors |
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Other Directorship: |
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·
National Stock Exchange of India
Limited ·
IDFC Trustee Company Limited ·
Orbis Financial Corporation Limited ·
Ultra Tech Cement Limited ·
National Collateral Management
Services Limited ·
HOEC Limited ·
Havells India Limited ·
DCM Shriram Industries Limited ·
Infrastructure Leasing and Financial
Services Limited ·
Housing Development and
Infrastructure Limited ·
Universal Sompo General Insurance
Company Limited |
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Name : |
Mr. Hugo Geoffrey Powell |
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Designation : |
Non Executive Director |
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Other
Directorship: |
·
Reynolds American Inc. |
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Name : |
Mr. Pillappakkam
Bahukutumbi Ramanujam |
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Designation : |
Non-Executive Director |
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Name : |
Mr. Basudeb Sen |
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Designation : |
Non-Executive Director |
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Other
Directorship: |
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·
South Asian Petrochem Limited ·
Srei Venture Capital Limited ·
Gujarat NRE Coke Limited ·
Sumedha Fiscal Services Limited ·
Mahangar Gas Limited ·
Ispat Industries Limited |
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Name : |
Mr. Balakrishnan Vijayaraghavan |
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Designation : |
Non-Executive Director |
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Name: |
Mr. Anthony Ruys |
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Designation: |
Director |
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Other Directorship: |
|
|
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· Schiphol Group NV, NL ·
British American Tobacco ·
·
Janivo |
KEY EXECUTIVES
|
Name : |
Mr. B B Chatterjee |
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Designation : |
Secretary |
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Board Committee |
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Audit Committee : |
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Compensation
Committee : |
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Nominations
Committee : |
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Investor Services
Committee : |
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Sustainability
Committee : |
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MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.09.2010)
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A)
Shareholding of Promoter and Promoter Group |
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|
|
-- |
-- |
|
|
-- |
-- |
|
|
|
|
|
(B)
Public Shareholding |
|
|
|
|
|
|
|
|
1,096,368,201 |
14.28 |
|
|
7,181,005 |
0.09 |
|
|
1,668,517,368 |
21.73 |
|
|
1,086,254,617 |
14.15 |
|
|
3,858,321,191 |
50.26 |
|
|
|
|
|
|
|
|
|
|
434,517,320 |
5.66 |
|
|
|
|
|
|
|
|
|
|
735,149,242 |
9.58 |
|
|
154,626,623 |
2.01 |
|
|
|
|
|
|
2,467,177,242 |
32.14 |
|
|
2,414,701,854 |
31.45 |
|
|
466,296 |
0.01 |
|
|
3,504,236 |
0.05 |
|
|
6,688,435 |
0.09 |
|
|
41,816,421 |
0.54 |
|
|
3,791,470,427 |
49.39 |
|
|
|
|
|
Total
Public shareholding (B) |
7,649,791,618 |
99.64 |
|
|
|
|
|
Total
(A)+(B) |
7,649,791,618 |
99.64 |
|
|
|
|
|
(C)
Shares held by Custodians and against which Depository Receipts have been
issued |
27,573,942 |
0.36 |
|
|
|
|
|
Total
(A)+(B)+(C) |
7,677,365,560 |
100.00 |
(1)
Indian
Mutual
Funds / UTI
Individual
shareholders holding nominal share capital up to Rs.0.100 Million BUSINESS DETAILS
|
Line of Business : |
Manufacturer of
Cigarettes and Tobacco. It is also engaged in Hotel Business. |
||||||
|
|
|
||||||
|
Products : |
|
PRODUCTION STATUS (AS ON
31.03.2010)
|
Class of Goods |
Unit |
Licensed Capacity |
Installed
Capacity |
Actual
Production |
|
Cigarettes |
Million |
123547 |
134383 |
68857 |
|
Smoking Tobaccos |
Tonne |
NA |
NA |
39 |
|
Printing and
Packaging including Flexibles |
Tonne |
NA |
106148 |
73807 |
|
Unmanufactured
Tobacco |
Tonne |
NA |
NA |
141556 |
|
Pulp |
Tonne |
NA |
235000 |
251369 |
|
Paperboards and
Paper |
Tonne |
NA |
452500 |
547931 |
|
Packaged Food
Products |
Tonne |
NA |
87029 |
29948 |
|
Personal Care
Products |
Tonne |
NA |
235962 |
25398 |
NOTE
a) The “Registered/Licensed Capacity” (including as approved by “Letters of Intent”) is exclusive of additional capacities permissible under the policy of the Government of India.
b) Includes production meant for internal consumption.
c) Based on Capacity rated by equipment manufacturers / project consultants at the time of installation.
N.A. – Not Applicable
GENERAL INFORMATION
|
No. of Employees : |
5000 |
||||||||||||||
|
|
|
||||||||||||||
|
Bankers : |
v State Bank of 38,
v Standard Chartered Grindlays Bank Limited, 41,
v United Bank of 10 Netaji Subhas Road, Kolkata - 700001, West
v Citibank ,
Kolkata, West |
||||||||||||||
|
|
|
||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Deloitte Haskins and Sells Chartered Accountants |
|
Address : |
|
|
|
|
|
Joint Ventures : |
· Maharaja Heritage Resorts Limited · Sitel Operating Corporation India Limited (till 31.05.2009) |
|
|
|
|
Associates : |
· Gujarat Hotels Limited · Russell Investments Limited · ATC Limited · Classic Infrastructure and Development Limited · International Travel House Limited · Divya Management Limited · Antrang Finance Limited-being associates of the Company, and ·
Tobacco Manufacturers ( |
|
|
|
|
Subsidiaries : |
· Srinivasa Resorts Limited · Fortune Park Hotels Limited · Bay Islands Hotels Limited · Russell Credit Limited · ITC Infotech India Limited · Wills Corporation Limited · Gold Flake Corporation Limited · Landbase India Limited · BFIL Finance Limited · Surya Nepal Private Limited · King Maker Marketing, Incorporation ·
· ITC Education Trust · ITC Rural Development Trust |
CAPITAL STRUCTURE
AS ON 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
5,00,00,00,000 |
Equity Share |
Rs.1/- Each |
Rs.5000.000 millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
3,81,81,76,790 |
Equity Share |
Rs.10/- Each |
Rs.3818.200 millions |
|
|
|
|
|
NOTE
A) Of the above, following were allotted:
a) As fully paid up Bonus Shares –
3,79,00,000 in 1978-79 by Capitalisation of Capital Reserve, Share Premium Reserve and General Reserve;
4,54,80,000 in 1980-81 by Capitalisation of Capital Reserve and General Reserve;
33,16,81,100 in 1989-90 by Capitalisation of Capital Reserve, Share Premium Reserve, Export Promotion Reserve and General Reserve;
39,80,17,320 in 1991-92 by Capitalisation of General Reserve;
1,21,31,81,770 in 1994-95 by Capitalisation of General Reserve;
1,25,17,12,290 in 2005-06 by Capitalisation of General Reserve.
b) As fully paid up Shares :
10,59,50,750 in 1991-92 consequent to the amalgamation of erstwhile Tribeni Tissues Limited to the Shareholders of erstwhile Tribeni Tissues Limited.
2,09,69,820 in 2002-03 consequent to the amalgamation of erstwhile ITC Bhadrachalam Paperboards Limited to the Shareholders of erstwhile ITC Bhadrachalam Paperboards Limited.
1,21,27,470 in 2005-06 consequent to the amalgamation of erstwhile ITC Hotels Limited and Ansal Hotels Limited to the Shareholders of erstwhile ITC Hotels Limited and Ansal Hotels Limited.
B) Under Employee Stock Option Schemes the Company has granted (net of Options lapsed*) :
a) 10, 74,422 (2009 - 10, 88,158) Options in 2004-05 (including 2, 85,987 Bonus Options allocated on unvested Options), of which 10,74,422 vested Options have been exercised.
b) 13, 77,495 (2009 - 13, 77,495) Options in 2005-06 (including 4, 75,638 Bonus Options allocated on unvested Options), of which 13,60,568 vested Options have been exercised.
c) 51, 64,746 (2009 - 52, 31,345) Options in 2006-07, of which 29, 06,596 vested Options have been exercised.
d) 47, 82,423 (2009 - 48, 80,337) Options in 2007-08, of which 5, 51,282 vested Options have been exercised.
e) 53, 22,009 (2009 - 54, 96,032) Options in 2008-09, of which 1, 12,642 vested Options have been exercised.
f) 42, 94,210 Options in 2009-10, of which no Option has been exercised.
NOTE
Each Option entitles the holder thereof to apply for and be allotted 10 Ordinary Shares of the face value of Rs. 1.00 each.
* Includes Options which were not exercised during the
relevant Exercise Period.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
3818.200 |
3774.400 |
3768.610 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
136825.600 |
133576.400 |
116808.100 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
140643.800 |
137350.800 |
120576.710 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
116.300 |
55.700 |
|
|
2] Unsecured Loans |
1077.100 |
1659.200 |
2088.600 |
|
|
TOTAL BORROWING |
1077.100 |
1775.500 |
2144.300 |
|
|
DEFERRED TAX LIABILITIES |
7850.100 |
8671.900 |
5450.700 |
|
|
|
|
|
|
|
|
TOTAL |
149571.000 |
147798.200 |
128171.710 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
81424.000 |
72719.100 |
61688.300 |
|
|
Capital work-in-progress |
10089.900 |
12140.600 |
11268.200 |
|
|
|
|
|
|
|
|
INVESTMENT |
57268.700 |
28377.500 |
29345.500 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
45490.700
|
45997.200
|
40505.200
|
|
|
Sundry Debtors |
8588.000
|
6686.700
|
7369.300
|
|
|
Cash & Bank Balances |
11262.800
|
10323.900
|
5702.500
|
|
|
Other Current Assets |
2883.900
|
2153.500
|
1460.710
|
|
|
Loans & Advances |
13045.400
|
16449.800
|
15155.000
|
|
Total
Current Assets |
81270.800
|
81611.100 |
70192.710 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
34440.700
|
29237.100 |
|
|
|
Other Current Liabilities |
542.300
|
408.100
|
27869.700
|
|
|
Provisions |
45499.400
|
17404.900
|
16453.300
|
|
Total
Current Liabilities |
80482.400
|
47050.100 |
44323.000 |
|
|
Net Current Assets |
788.400
|
34561.000
|
25869.710
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
149571.000 |
147798.200 |
128171.710 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
181531.900 |
156119.200 |
139475.300 |
|
|
|
Other Income |
6033.800 |
5349.300 |
6109.000 |
|
|
|
TOTAL |
187565.700 |
161468.500 |
145584.300 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Manufacturing Expenses |
69714.000 |
59578.700 |
60167.000 |
|
|
|
Raw Material Consumed |
51611.500 |
48138.300 |
35315.000 |
|
|
|
TOTAL |
121325.500 |
107717.000 |
95482.000 |
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION |
66240.200 |
53751.500 |
49556.300 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
6087.100 |
5494.100 |
4384.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX |
60153.100 |
48257.400 |
45717.700 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
19543.100 |
15621.500 |
14516.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
|
40610.000 |
32635.900 |
31201.000 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
8581.400 |
7244.500 |
NA |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
General Reserve |
4061.000 |
15000.000 |
-- |
|
|
|
Proposed Dividend |
|
|
|
|
|
|
- Ordinary Dividend |
17181.800 |
13965.300 |
-- |
|
|
|
-Special Centenary Dividend |
21000.000 |
0.000 |
-- |
|
|
|
Income Tax on Proposed Dividend |
|
|
|
|
|
|
- Current year |
6341.500 |
2373.400 |
-- |
|
|
|
- Earlier year’s provision no longer
required |
(6.000) |
(39.700) |
-- |
|
|
BALANCE CARRIED
TO THE B/S |
613.100 |
8581.400 |
NA |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
19301.800 |
16995.400 |
15745.600 |
|
|
|
Dividends |
0.000 |
46.400 |
0.000 |
|
|
|
Hotel Earnings |
3985.100 |
4868.500 |
5152.500 |
|
|
|
Fright and Insurance Recoveries |
212.100 |
217.000 |
0.000 |
|
|
|
Other Earnings |
52.100 |
129.800 |
786.000 |
|
|
TOTAL EARNINGS |
23551.100 |
22257.100 |
21684.100 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
6039.400 |
7179.100 |
5551.300 |
|
|
|
Components & Spare Parts |
682.500 |
657.200 |
698.700 |
|
|
|
Capital Goods |
2675.000 |
3447.400 |
4824.800 |
|
|
|
Others |
111.200 |
155.600 |
117.600 |
|
|
TOTAL IMPORTS |
9508.100 |
11439.300 |
11192.400 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic |
10.73 |
8.66 |
-- |
|
|
|
Diluted |
10.62 |
8.64 |
-- |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2010 |
30.09.2010 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
48473.400 |
51471.800 |
|
Total Expenditure |
|
32102.500 |
32722.900 |
|
PBIDT (Excl
OI) |
|
16370.900 |
18748.900 |
|
Other Income |
|
984.800 |
1244.900 |
|
Operating
Profit |
|
17355.700 |
19993.800 |
|
Interest |
|
58.000 |
53.600 |
|
Exceptional
Items |
|
0.000 |
0.000 |
|
PBDT |
|
17297.700 |
19940.200 |
|
Depreciation |
|
1596.800 |
1639.900 |
|
Profit
Before Tax |
|
15700.900 |
18300.300 |
|
Tax |
|
4997.800 |
5832.900 |
|
Reported PAT |
|
10703.100 |
12467.400 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
10703.100 |
12467.400 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
21.65 |
20.21 |
21.43 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
33.14 |
30.91 |
32.78 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
36.97 |
31.27 |
34.67 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.43 |
0.35 |
0.38 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.58 |
0.36 |
0.39 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.01 |
1.73 |
1.58 |
LOCAL AGENCY FURTHER INFORMATION
History
Subject a leading FMCG Cigarette major is one of the most
valuable companies of
Subject was incorporated on August 24, 1910 under the name of `Imperial Tobacco
Company of India Limited'. Its beginnings were humble. A leased office on
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.
In 1975 the Company launched its Hotels business with the acquisition of a
hotel in Chennai which was rechristened 'subject Welcomgroup Hotel Chola'. The
objective of subject's entry into the hotels business was rooted in the concept
of creating value for the nation. Subject 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 subject's Hotels business has grown to occupy a position of leadership,
with 65 owned and managed properties spread across
In 1979, subject entered the Paperboards business by promoting ITC Bhadrachalam
Paperboards Limited, which today has become the market leader in
In 1985, subject set Surya Tobacco Company in
Recently, subject's Packaging and Printing business has launched a line of high
quality greeting cards under the brand name `Expressions'. Subject has also
entered the Lifestyle Retailing business with the Wills Sport range of
international quality relaxed wear for men and women. The company has recently
forayed into lifestyle Retailing business with its launch of 'Wills' range of
casual and formal wear products. It has also spun off its Information Technology
business into a wholly owned subsidiary to more aggressively pursue emerging
opportunities. Subject is one of the largest exporters of Indian
agri-commodities.
ITC Bhadrachalam Paper Boards, a subsidiary company was merged with subject in
the year 2002. The shareholders of ITCPBL were allotted one equity share of
subject for every sixteen held. The company has decided to amalgamate ITC
Hotels Limited and Ansal Hotels Limited with itself. As per the scheme of
amalgamation, i)the shareholders of ITCHL will receive Three Equity Shares of
Rs.10/- each of subject for every Twenty Five Equity Shares of Rs.10/- each
held, ii)the shareholders of Ansal Hotels Limited will get One Equity Share of
Rs.10/- each of subject for every One Hundred Fifty Equity Shares of Rs.10/-
each held by them. This amalgamation has come into effect from 1st April
2004.
During 2004-05, the company commissioned its second property 'ITC Grand
Central' in Mumbai. The company has proposed hotels at Chennai,
The company expanded the installed capacity of Cigarettes and Paperboards and
Paper during the year 2004-05 by 7329 Million Nos and 75000 Tonnes and with
this expansion, the total installed capacity of Cigarettes and Paperboards and
Paper increased to 94597 Million Nos and 352500 Tonnes respectively.
In 2005, the company was awarded the ISO 9001:2000 standard By M/s. Det Norske
Veritas as a recognition of its quality products and processes. The company's
units at Munger and Tiruvottiyur are certified to ISO 9000,14000 and 18000. The
company has also won three
In 2005-06, the company acquired Wimco Limited through its one of the
subsidiary company, Russell Credit Limited This acquisition is expected to
further consolidate the market standing of the company's matches business
through synergy benefits. The Installed capacity of Cigarettes and Printing and
Packaging including Flexibles expanded 4752 Million Nos. and 9928 Tonnes during
the year, with this expansion the total installed capacity of Cigarettes and
Printing and Packaging including Flexible increased to 99349 Million Nos and
47837 Tonnes.
MANAGEMENT DISCUSSION
AND ANALYSIS
SOCIO-ECONOMIC ENVIRONMENT
Following one of the deepest downturns in recent times, the
global economy staged a smart recovery during 2009/10, especially in the latter
half, driven by an extraordinary level of co-ordinated international action in
the form of policy stimulus, monetary as well as fiscal. As per the
International Monetary Fund (IMF), world output is estimated to grow by 4.2% in
2010 after a decline of 0.6% in 2009 with the emerging and developing economies
– led by China and India – set to grow by 6.3% in 2010 against a modest 2.4% in
2009 and a sharp rebound by advanced economies with a growth in output
estimated at 2.3% in 2010 against a decline of 3.2% in 2009. However, the pace
and shape of recovery remains uncertain with concerns about the recovery losing
momentum once the stimulus is withdrawn. Recent developments in Europe, with
The Indian economy entered 2009/10 against the backdrop of a significant slowdown in growth rate, with the GDP growing at just 6% during the second half of 2008/09. A delayed and severely sub-normal monsoon coupled with continued recession in the developed world for the better part of 2008/09 served to exacerbate the macroeconomic context. Yet, the economy staged a remarkable recovery to grow at 7.2% during the year, facilitated by policy stimulus and increased government spending. The enhanced allocations for social sector schemes like the National Rural Employment Guarantee Scheme (NREGS), higher spends on rural infrastructure creation, the implementation of the Sixth Pay Commission recommendations and the scheme of debt relief to farmers acted as powerful catalysts to induce a consumption-led recovery. Much of the growth was fuelled by the Industrial sector, with renewed momentum in Manufacturing – which grew by 8.9% during the year after eight consecutive quarters of decline in growth rates since 2007/08. While Agricultural output declined by 0.2%, the Services sector grew, although at a slower pace of 8.7% against 9.8% in 2008/09. The broadbased nature of the recovery, a faster pace of growth in investments after a marked decline in 2008/09, the sharp pick up in capital inflows and a resurgent stock market are some of the key positives that augur well for the economy.
The major concern during the year was the rising food inflation – especially in the second half. While the overall wholesale price index (WPI) based inflation was 9.9% on a year-on-year basis in March 2010, food inflation was as high as 16.6%, reflecting the severe adverse impact of a deficient monsoon. With persistent supply side pressures, inflation became more generalized towards the end of the year, with inflation in non-food manufactured products rising to 4.7% in March 2010 from (–) 0.4% in November 2009. While inflation is expected to moderate going forward, the trend of rising international commodity prices, particularly oil, and the revival of private consumption pose upside risks. This apprehension is reflected in RBI’s view that ‘‘the domestic balance of risks shifts from growth slowdown to inflation’’. Accordingly, a related challenge in the near to medium term would be the effective management of the burgeoning fiscal deficit.
Although consensus estimates point to a robust performance of the Indian economy in 2010/11, with the GDP growth estimated to be above 8%, it would still be well below the average of nearly 9% per annum achieved during the 4 years preceding the economic slowdown. As aforementioned, the combination of the threat of inflationary pressures and the inherent risks to global economic recovery poses a tough challenge to maintaining and stepping up the growth momentum to the desired double-digit level. With a fairly young population, skilled manpower, rising savings and investment rates, a vibrant service sector, a potentially large source of domestic demand (particularly rural) and the emergence of globally competitive firms, India has multiple growth drivers which hold out the promise of a stable and sustained future growth. The economic impact of these strengths will get further augmented by the current and planned investments in infrastructure development.
High levels of sustained economic growth is a critical
necessity for India to realize its oft quoted ‘demographic dividend’ through
the creation of employment opportunities for the nearly 15 million people
expected to enter the working age each year, the majority of whom would be from
rural India. As observed in the Economic Survey 2009-10, .growth is necessary
for eradicating poverty but is not a sufficient condition. In other words, policies
for promoting growth need to be complemented with policies to ensure that more
and more people join in the growth process and, further, that there are
mechanisms in place to redistribute some of the gains to those who are unable
to partake in the market process and, hence, get left behind . Equally, the
manner of industrial growth continues to take an immeasurable toll of finite
natural resources. Indeed, the key challenge for
A comprehensive growth strategy for rural
Similarly, the Company’s unique and path-breaking ‘Choupal
Pradarshan Khet’ (CPK) – a collaborative and paid extension service aimed at
enhancing farm productivity with emphasis on adoption of agricultural best
practices – is yet another demonstrated example of how private sector
initiatives can complement State interventions to create significant value for
the Indian farmer. During the year, the scope of the CPK initiative was
expanded to include horticultural crops such as banana, brinjal, chilli, grape,
orange, pomegranate etc. Activities under this initiative currently span six
States with a total coverage of nearly 70,000 hectares. The CPK model is
focused on building competencies at the farm gate level and will go a long way
in enhancing the competitiveness of
The growth agenda can become sustainable only if it includes in its wake strategies, both national and corporate, to enhance environmental and societal capital, thereby translating to development. In line with this philosophy, the Company is pro-actively engaged in enlarging its contribution across the three dimensions of the ‘Triple Bottom Line’ – economic, environmental and social – through a conscious strategy of investment and operations that enhances the competitiveness of entire value chains it is engaged in. Highlights of the Company’s progress in the pursuit of the ‘Triple Bottom Line’ objectives are discussed in the sections that follow.
COMPANY PERFORMANCE
The Company posted yet another year of impressive performance with a healthy topline growth and high quality earnings, reflecting the robustness of its corporate strategy of creating multiple drivers of growth. This performance is stellar when viewed against the backdrop of the extremely challenging business context in which
this was achieved, namely the unprecedented increase in excise duties on non-filter cigarettes in the preceding year, the arbitrary increases in VAT on cigarettes, steep decline in hotel revenues as a consequence of the Mumbai terrorist attack and the global economic slowdown, the incubation costs incurred by the new FMCG businesses, the impact of the significant investments made in augmenting distribution infrastructure and the gestation costs of the large investments in the hotels business.
Gross Turnover for the year grew by 13.5% to Rs. 262596.000 millions Net Turnover at Rs. 181531.900 millions grew by 16.3% primarily driven by a 20.9% growth in the non-cigarette FMCG businesses, a 19.8% growth in the Cigarettes business and a 17.4% growth in the Paperboards, Paper and Packaging segment. Pre-tax profits increased by 24.7% to Rs. 60153.100 millions while Post-tax profits at Rs. 40610 millions registered a growth of 24.4%. Earnings Per Share for the year stands at Rs. 10.73 (previous year Rs. 8.66). Cash flows from Operations stood at Rs. 66200 millions during the year, compared to Rs. 46820 millions in the previous year.
The Company will complete 100 years in August 2010. It is a matter
of great pride to reflect on the enormous progress made by the Company over the
years. The Company today is the leading FMCG marketeer in India, the second
largest Hotel chain, the clear market leader in the Indian Paperboard and
Packaging industry and the country’s foremost Agri-business player.
Additionally, its wholly owned subsidiary is one of
Over the last fifteen years, the Company has created
multiple drivers of growth by developing a portfolio of world-class businesses.
During this period, the Company’s Gross Turnover and Post-tax profits recorded
an impressive compound growth of 12.4%
and 21.7% per annum respectively. Profitability, as measured by Return on Capital
Employed improved substantially from 28.4% to 41% during this period. Total
Shareholder Returns, measured in terms of increase in market capitalisation and
dividends, grew at a compound rate of 24.3% during this period, placing the
Company amongst the foremost in the country in terms of efficiency of servicing
financial capital. The Company today is one of
In celebration of the Company completing a century, the Directors are pleased to recommend a Special Centenary Dividend of Rs. 5.50 per share in addition to a dividend of Rs. 4.50 per share (previous year: Rs. 3.70) for the year ended 31st March, 2010.
Total cash outflow in this regard will be Rs. 44523.300 millions (previous year Rs. 16338.700 millions) including Dividend Distribution Tax of Rs. 6341.500 millions (previous year Rs. 2373.400 millions). The Board further recommends a transfer to General Reserve of Rs. 4061.000 millions (previous year Rs. 15000.000 millions). Consequently, the Board recommends leaving an unappropriated balance in the Profit and Loss Account of Rs. 613.100 millions (previous year Rs. 8581.400 millions)
FOREIGN EXCHANGE EARNINGS
The Company continues to view foreign exchange earnings as a priority. All businesses in the ITC portfolio are mandated to engage with overseas markets with a view to testing and demonstrating international competitiveness and seeking profitable opportunities for growth. The ITC group’s contribution to foreign exchange
earnings over the last ten years amounted to nearly USD 4.1 billion, of which agri exports constituted 60%. Earnings from agri exports are an indicator of the Company’s contribution to the rural economy through effectively linking small farmers with international markets. During the financial year 2009/10, the Company and its subsidiaries earned Rs. 31400 millions in foreign exchange. The direct foreign exchange earned by the Company amounted to Rs. 23550 millions (Rs. 22260 millions in 2008-09), powered by exports of major agri-commodities. The Company’s expenditure in foreign currency amounted to Rs. 10420 millions, comprising purchase of raw materials, spares and other expenses of Rs. 7740 millions and import of capital goods at Rs. 2680 millions. Details of foreign exchange earnings and outgo are provided in Schedule 19 to the Accounts.
BUSINESS SEGMENTS
A. FAST MOVING CONSUMER GOODS
FMCG – Cigarettes
farmers, farm workers, retailers etc. in the country depend
upon tobacco for their livelihood. While the economic importance of tobacco has
been acknowledged in several Government studies and reports, the cigarette
industry in
Internationally, more than 90% of tobacco is consumed in the
cigarette form, and accordingly tobacco taxation and regulation, in effect,
means regulating and taxing cigarettes. However, in
On the taxation front, excise duty rates went up in excess of 6% in the Union Budget 2007 and cigarettes were brought under the ambit of Value Added Tax (VAT) at a rate of 12.5% on invoice price with effect from 1st April 2007, resulting in a total tax equivalent of a 30% increase in excise duties. Other tobacco products were either exempted from VAT or taxed at lower rates. Consequently, cigarette industry volumes came under serious pressure in FY08 as consumers migrated to alternate and lightly taxed forms of tobacco.
The Union Budget 2008 followed through with an unprecedented increase in excise duty of the order of 140% and 390% respectively on regular and micro-sized non-filter cigarettes. This exceptional hike in rates forced the organized cigarette industry to substantially vacate this category. The resultant void created the headroom for tax-evaded cigarettes to enter the market in a big way. These tax-evaded cigarettes sell in the market at prices that do not even cover the cost of taxes payable thereon. Such cigarettes, estimated to constitute more than 8% of the Indian market, not only deprive the legitimate industry of revenues and profits that it rightfully deserves but also deny the Exchequer of its fair share of taxes. It is imperative that the authorities strengthen enforcement to eliminate this fast growing illegal industry. The year saw several States departing from the consensus VAT rate of 12.5% and increase the rates of VAT on cigarettes from time to time. Certain States also levied entry tax on cigarettes in addition to VAT and some others increased the entry tax rate. Most States, like the Centre, largely targeted the cigarette sector. Consequently, tobacco consumption in the cigarette format suffered.
Further, as a result of such unilateral and arbitrary
increases, the incidence of State and other Local taxes varied from 12.5% in
some parts of
During the year, graphic statutory warnings on retail packages of tobacco and tobacco products were introduced and further restrictions on sale of tobacco products were notified. Such graphic warnings, which are more impactful on cigarettes than on other forms of tobacco by virtue of the design specifications, have placed cigarettes in a disadvantageous position.
Such regulations and others like the ban on smoking in public places together with the high incidence of tax on cigarettes encourage consumers to shift to cheaper and lightly taxed tobacco products. Consequently, whilst consumption of tobacco in the cigarette form is on the decline, the overall consumption of tobacco in the country continues to rise. Paradoxically, the social objective of control of tobacco consumption in the country gets defeated even as the revenue potential of tobacco sector as a whole is sub-optimised. It is relevant to note that every percentage point increase in the cigarette share of tobacco consumption would yield the government additional revenues of Rs. 6500 millions annually in duties alone.
Despite having only a 15% share of consumption, cigarettes
contribute more than 85% of the tax revenues from the tobacco sector. Taxes
realized from every kilogram of tobacco consumed in the cigarette format are 35
times higher than those from other forms of tobacco products. In contrast, a
country like
Notwithstanding these challenges, the Company retained its leadership position in the market and improved its standing in the consumer mind-space, attesting the salience and resilience of its brands. The stability in cigarette excise duties in 2009 resulted in the industry recovering some of the consumer franchise lost earlier.
The potential of the Indian market coupled with its economic
out performance in a year of global downturn is attracting global cigarette
majors. They are seeking a direct play in the Indian market by incorporating
majority-owned entities to carry on the business of wholesale trading
operations in
During the year, the business effectively met such competitive challenges and improved its market standing through the delivery of superior consumer value based on a combination of deep consumer insights, contemporary product development and cutting-edge technology. Market interventions during the year included the launch of new variants of ‘Gold Flake’ and ‘Navy Cut Filter Kings’ with innovative product features, limited edition packs of ‘Classic’ and launch of new brands like ‘Flake Excel Filter’ and ‘Duke Filter’. The business also launched its premium line of hand-rolled cigars in select markets under the brand name ‘Armenteros’. Manufactured exclusively for ITC by expert cigar rollers in the Dominican Republic, with the finest quality Cuban, Nicaraguan and Brazilian seed tobacco, the ‘Armenteros’ range is truly world-class and has been well received by the most discerning cigar aficionados in the country.
During the year, the business leveraged its existing
industrial licence in
In line with the Company’s commitment to building
sustainable environmental capital, the business is investing in wind farms in certain
States to reduce dependence on conventional sources of energy. The cigarette
factories continued to recycle 100% of the solid waste generated. They also
maintained the highest standards of Environment Health and Safety (EHS) and won
recognition by way of numerous awards. The
Pro-active interventions in employee-relations in all
manufacturing units ensured an enabling operating climate. Long term agreements
with unionised workforce continue to be leveraged to further improve shop floor
productivity, flexibility and responsiveness. During the year, the long term
agreement at the
The year ahead will be challenging with continued discriminatory taxation, restrictive regulation and hardening competitive pressures. Cigarette excise duty rates have yet again been increased by about 17% in Budget 2010 and several States have further increased VAT and entry tax imposts in the recent round of budgets. While this is likely to put industry volumes under pressure, the newly created excise duty slab for medium-sized filter cigarettes may provide the legitimate industry a platform to combat the menace of illegal domestic cigarettes.
The Company will continue to engage with policy makers for a balanced regulatory and fiscal framework for tobacco that addresses the genuine concerns of all stakeholders. The robustness of the Company’s strategies and its execution excellence will enable it to sustain and enhance its leadership position.
B. HOTELS
The aftermath of the terrorist attack in Mumbai in November
2008, the swine-flu pandemic and the general squeeze on corporate travel
combined to adversely affect the performance of the Indian hotel industry
during the year. The impact was particularly severe during the first half with
occupancies and average room rates witnessing steep declines. The situation,
however, improved during the second half aided by a strong showing by the
Indian economy and the beginnings of a gradual recovery in major source markets
like the
Given the adverse business environment, the Company’s hotels business posted a 9% decline in Net Revenues during the year. Though Operating Profit (PBDIT) at Rs. 2950 millions de-grew by 23% over the previous year, the business maintained its leadership position in terms of operating efficiency with a PBDIT to Net Revenues ratios of 35%. Net Revenues and PBDIT grew by 16% and 13% respectively during the last quarter of the fiscal year, reversing the declining trend witnessed in the first three quarters of the year.
Besides generating valuable foreign exchange, the tourism
industry has a large economic multiplier impact contributing to significant
employment creation, a dire need in the Indian context of achieving inclusive
growth. However, despite
However, given
In October 2009, the Company launched the ITC Royal
Gardenia, a 292 room luxury offering in Bengaluru. It is the largest LEED
(Leadership in Energy and Environmental Design) Platinum rated hotel in the
world and the first in
In view of the positive long term outlook for the Indian
hotel industry, the Company continues to sustain its aggressive investment-led
growth strategy. Construction activity of the new super luxury properties at
Chennai and Kolkata are progressing satisfactorily. In addition, several new
projects including joint ventures and management contracts are on the anvil to
rapidly scale up the business across all the four market segments. In pursuit
of the Company’s ‘Triple Bottom Line’ objectives, the business has invested in
wind energy to provide clean power to its Mumbai property, the ITC Maratha.
Additionally, solar energy is being used to produce steam at the ITC Maurya,
During the year, the ‘Fortune’ brand which caters to the mid-market to upscale segment, forged new alliances taking the total number of hotels in its fold to 59 with an aggregate room inventory of 4817. The brand now has 34 operating hotels. Four more hotels are slated to be commissioned during the course of the next financial year. The remaining 21 hotels are in various stages of development. The ‘WelcomHeritage’ brand has grown to 67 hotels, out of which 54 are operational and the remaining 13 are under development.
The ITC-Welcomgroup chain, with its globally benchmarked levels of product and service excellence and customer centricity is not only well positioned to sustain its leadership position in the industry, but is also poised to emerge as the largest hotel chain in the country over the next few years.
C. PAPERBOARDS, PAPER AND PACKAGING
The Paperboards, Specialty Paper and Packaging segment recorded robust growth in revenues and profits. Segment Revenues grew by 15% over the previous year to touch Rs. 32340 millions. Segment Results at Rs. 6840 millions reflect a growth of 35%.
Paperboards and Specialty Papers
The Global Paper and Paperboards Industry is estimated to grow at 4% in the ensuing year after two consecutive
years of slowdown. Asian markets (excluding
The domestic Paperboards market size is about 2 million tons per annum and is characterized by fragmented capacities, serviced by over 100 mills. Only a few mills have been able to deliver desired quality standards on a consistent basis. The Company is the market leader in the Paperboards segment with a wide range of products, a value market share of about 26% and a significantly higher share of the fast-growing value added paperboards segment. In order to sustain its pre-eminent position in the Paperboards segment, the business plans to invest in a state-of-the-art machine which is expected to be operational by early 2012.
The Indian Paper Industry at 9 million tons per annum
accounts for about 2% of the world’s production of paper and paperboards.
The state-of-the-art new paper machine commissioned in 2008 operated to full capacity during the year, enabling the Company to make a significant entry into the Paper segment of the industry. The copier and writing paper produced by this machine has enabled higher order value capture on the back of the strong forward linkages with the Company’s Education and Stationery Products business.
The Company is the largest manufacturer of cigarette tissue
in
Despite inflation in input costs and pricing pressures in the ‘Writing and Printing’ paper segment, the business posted a sterling performance driven by higher overall productivity, higher value capture through increased usage of in-house pulp, superior product mix and several cost management initiatives.
Over the years, the Company has pursued an aggressive clonal propagation strategy to address the twin challenges of securing long term supply of fibre and remaining cost competitive. This strategy makes available in-house developed high-yielding clones and seedlings of the desired pulp wood species together with extension services to farmers engaged in plantation of pulp wood on their marginal wastelands. The quality of these clones and seedlings, products of the Company’s bio-technology based research programme, has been tested for its effectiveness over the last 14 years in more than 100,000 hectares of plantations, including 13,000 hectares planted during the year. Enhanced R and D activity has resulted in the development of high yielding ‘Subabul’ clones. Continued focus on clonal plantations in core areas is expected to yield significant competitive advantage in the years to come. The Company’s R and D is actively collaborating with several expert agencies to further leverage bio-technology to enhance both farm and manufacturing yields.
The Company continues to represent to policy makers to introduce appropriate amendments to the Forest Conservation Act, 1980 and related Rules to permit the industry to use degraded forest land for afforestation linked to the end-use of such wood. An enabling policy framework that would inter alia promote public-private partnerships for the development of degraded forest lands would serve the multiple objectives of enhancing the competitiveness of the Indian paper and paperboards industry, creating sustainable livelihoods in rural India and enhancing the green cover.
Waste paper is a key source of fibre in the manufacture of
recycled boards. Unfortunately, mobilization of waste paper in
In line with the Company’s commitment to achieve yet another
environmental milestone of being ‘solid waste recycling positive’, the Tribeni
and Bhadrachalam units accomplished that goal during the year. The business has
been able to achieve an overall positive solid waste recycling footprint by
procuring and recycling over 125,000 tons of waste paper during the year. The
business is also working on various Clean Development Mechanism (CDM) projects
under the Kyoto Protocol to enable full realization of potential benefits in
this area. The Company’s unique social forestry project has been the first of
its kind in
During the year the Company became a member of the WWF – World
Wide Fund for Nature's
The end-to-end ERP system was successfully implemented during the year. The system will provide real-time information for faster decision making and improved operational management. Continuing inflation in the cost of domestic raw materials and imported pulp will exert pressure on industry profitability in the near term. The Company, with an expanded and fully functional pulp mill and a well differentiated product portfolio is well positioned to mitigate the impact of these cost escalations. The integrated nature of the business model-access to high-quality fibre from the economic vicinity of the Bhadrachalam mill, in-house pulp mill and state-of-the-art manufacturing facilities on the one hand and a robust forward linkage with the Education and Stationery Products business on the other – strategically positions the Company to further consolidate and enhance its leadership status in the Indian Paper and Paperboards industry.
Packaging and Printing
The Company’s Packagin g and Printing business continues to make investments in world-class technology and skills to consolidate its position as the leading provider of high quality paperboard and flexibles packaging in the country. The business provides strategic sourcing support to the Company’s cigarette and other FMCG businesses by ensuring security of supplies and sustaining international quality at competitive cost.
During the year, the business achieved substantial growth in its external trade and emerged as a leading supplier of value added packaging to the Consumer Electronics and FMCG segments. The business continued to leverage the state-of-the-art flexible manufacturing facilities at Chennai and Haridwar to provide innovative packaging solutions to the Company’s Branded Packaged Foods and Personal Care businesses. The in-house capability to deliver best-in-class packaging solutions is reducing time-to-market for new launches and is a source of competitive advantage for these businesses.
Capacities are being augmented at both the Chennai and Haridwar units to cater to the increased packaging requirements of the Company’s FMCG businesses and to service the expanding universe of external customers. The Company’s full range of capabilities, riding on multiple packaging platforms, will enable the business to consolidate its strong position in the domestic market and build a growing franchise in the export markets.
The 14.1 megawatt wind energy farm, which was commissioned in 2008, is operating at optimum levels providing clean energy to the Chennai unit. This initiative, flowing from the Company’s commitment to the ‘Triple Bottom Line’, obtained the UNFCCC registration under the Clean Development Mechanism of the Kyoto Protocol during the year, making it eligible for carbon credits.
The factories at Chennai, Munger and Haridwar maintained the
highest standards in Environment, Health and Safety (EHS) and quality
management during the year. The business won several national awards for
excellence in printing, as well as the ‘World Star’ award for excellence in
packaging. The Munger unit was certified at Level 8 of the International
Quality Rating System (IQRS) as audited by Det Norske Veritas (DNV) during the
year. This is the second such certification for the business with the Chennai
unit having achieved the distinction of being the first unit in
D. AGRI BUSINESS
Cigarette Leaf Tobacco
Triggered by increasing farm prices on the one hand and
growth in the global Cigarette markets on the other, tobacco production
continued to increase, largely driven by producers in Asia and
In 2010, the global supply-demand situation is expected to sustain growing dependence of international blends on Indian tobaccos. With demand estimated to continue exceeding supply, Indian tobaccos are expected to retain customer preference. Since flavour is not a competitive strength of Indian tobacco, focussed attention to reliability, scalability, product integrity service and competitive pricing would be imperative to sustain and grow market share.
In addition to the development of the first series of Flue
Cured Hybrids, the Company’s concerted efforts during the year on varietal
improvement resulted in the identification of two Advanced Breeding Lines for
specific regions in Andhra Pradesh and
Leveraging the growing demand for the Indian crop, the Company further cemented its position as the foremost supplier of quality Indian tobaccos in the global market, achieving a record export growth of 86% over last year. The Company is now ranked 6th among global leaf tobacco exporters.
The business continued to provide strategic sourcing support to the Company’s Cigarette business.
On the domestic front, deepening challenges are manifesting in multiple ways. As explained in an earlier section of this Report, Indian cigarette manufacturers continue to face unilateral and arbitrary increases in
excise duties, VAT and entry tax coupled with restrictive
regulations and the menace of illegal domestic cigarettes. The combination of
high taxation and harsh regulations, targeted almost exclusively at the
cigarette industry, is putting serious pressure on consumers to migrate to
alternate and lightly taxed tobacco products. Such a punitive and
discriminatory approach to cigarette taxation and regulation will adversely
impact domestic demand with severe consequences for tobacco farmers and all
others who depend on the tobacco value chain for their livelihood. An equitable
and balanced approach to cigarette taxation is imperative to de-risk the
tobacco dependants from harsh consequences to their livelihoods. The Company
continues to focus on maintaining the highest quality and safety standards in
the factories. During the year, the Anaparti unit upgraded its Quality
Management System from ISO 9001:2000 to ISO 9001:2008. Both the Chirala and
Anaparti units upgraded Social Accountability Management System from SA
8000:2001 to SA 8000: 2008. The Chirala unit also upgraded its Occupational
Health and Safety Assessment Series (OHSAS) from the 1999 standard to the 2007
standard. In order to meet the increasing requirement for processing capacity,
the business is in the process of establishing a green leaf processing plant
near
Agri Commodities
Global agricultural commodity prices were soft and benign
for most part of the year in the wake of a recessionary overhang. In
A good soya crop in the
During the year, the business introduced several new products and continued to acquire new customers in the value-added processed fruits segment. This strategy helped the business to partially mitigate the impact of recession in its key export markets. Special focus was initiated on expanding supplies of value-added products to the domestic market as well. The Company continued its initiative of developing a robust supply chain for production and marketing of organic fruits with farmers across various States in the country. Farmers are being trained to deploy organic farming techniques, ‘Good Agriculture Practices’ (Global GAP) and product traceability systems through demonstration plots and extension services designed to help them obtain international organic certification.
The business continued to source identity preserved specific
grades of high quality wheat through the e-Choupal network for the Company’s Branded
Packaged Foods business. Significant cost and quality advantages were achieved
through sourcing across geographies based on price optimisation and by
just-in-time direct procurement at the processing units. In sourcing chip stock
potato for the Company’s ‘Bingo!’ brand of potato chips, the business scaled up
sourcing of locally grown potatoes (closer to the manufacturing units) in order
to support local farmers and minimise logistics costs. Significant progress was
made on this front during the year, with over 50% of the potato requirements
for the Haridwar plant being sourced locally. The business also carried out
successful trials on new varieties of potato with longer storage life in Madhya
Pradesh and
The Company’s neem-based organic manures such as ‘Wellgro
Soil’, ‘Wellgro Grains’ and ‘Wellgro Crops’ continue to gain wide acceptance
amongst the farming community and corporate houses engaged in contract farming.
These products were endorsed by Control Union (European agency for certifying
organic status) as organic inputs under stringent quality specifications of the
National Program on Organic Production (NPOP). During the year, the business
introduced a new organic manure – ‘Wellgro Crops’ in liquid form for horticultural
crops like chillies, tomato, banana, citrus fruits and leafy vegetables – which
has been well received by the farming community in Andhra Pradesh and
Karnataka. ‘Wellgro Crops’ has been empanelled under the National Horticulture
Mission as part of the Organic Farming and Integrated Nutrient and Pest
Management programs. During the year, the business strengthened its supply
chain in Maharashtra, Karnataka, Andhra Pradesh and
With growing concerns relating to food safety and product integrity, there is an increasing demand for suppliers with ‘end-to-end’ capabilities and complete custody of the supply chain, supported by appropriate technology and quality, and augmented with traceability management systems to provide the required product assurance. The Company seeks to harness this opportunity by building the business model on the strength of customized products and services with requisite crop development, state-of-the-art infrastructure and tailor-made processes to garner an increasing share of the fast growing domestic and export markets. During the past four years, apart from providing support to the ‘Aashirvaad’ range of spices, the business has gained considerable market standing amongst large domestic and export customers as a supplier of assured quality with customized processes and infrastructure. The business continues to leverage differentiation and customization for enhanced value capture by targeting sales to large food and industrial users of spices, medicinal and aromatic plants and their derivatives.
Despite a very poor monsoon which adversely affected the
country’s farm sector credit off-take, the Company actively pursued its
initiative of marketing Kisan Credit Cards on behalf of the State Bank of
In the rural retailing initiative, several innovative activities were undertaken during the year to enhance engagement with rural consumers including a sales incentive scheme for village lead farmers (Sanchalaks), discount coupons and lucky draws for farmer-customers and re-designed store layouts for improved product visibility. These interventions have resulted in a positive consumer response with sales of FMCG, Apparel and Grocery categories increasing by 24% over the previous year.
Distribution of FMCG products in the rural markets through the e-Choupal network gained traction with throughput during the year recording an impressive increase of 44%. Plans are on the anvil to expand distribution reach of this initiative to more than 50,000 villages over the next 12 months.
Following the semi-urbanisation of some of the top-tier
villages, rural youth from these areas now prefer urban jobs to agriculture and
farm employment. Recognising the potential opportunity for the e-Choupal model
in this space, the business, in alliance with Monster India – an online career
and recruitment firm – launched a web portal christened ‘rozgarduniya.com’
during the year. This portal will enable job seekers in rural areas to apply
for jobs through e-Choupals. The launch has met with very encouraging response
and is being scaled up. The Company has been selected to be part of a consortium
by the UK Department for International Development (DFID) to work on ‘Poorest
States Inclusive Growth Programme’ (PSIG). The programme aims to enable the
poor in the rural areas of identified backward states in
NOTES ON SUBSIDIARIES
ITC Global Holdings Pte. Limited,
Surya
During the year the political environment in
Notwithstanding the challenging socio-political environment,
the company’s growth and performance continued on an upward trajectory. In the
twelve-month period ended 13th March 2010, the company’s sales grew by 30% to
Nepalese Rupees 10050 millions (net of VAT). Profit After Tax at Nepalese
Rupees 1810 millions represents an increase of 25% over the previous year. The
company’s sales (net of VAT) accounts for almost 1% of
On the manufacturing front, the company invested in new technology packing lines to sustain superior and consistent product quality, and made sustainable improvements in supply chain and inventory management. Energy conservation measures were further reinforced.
Despite the agro-climatic challenges of growing tobacco in
During the year, the garments export business was adversely
impacted by increased import taxes in
ITC Infotech India Limited
During the year, the global economic downturn continued to impact IT spends in target markets resulting in reduced budgets, cost cutting initiatives, longer decision making cycles and pricing pressures from existing customers. Overall, this meant a relatively low growth rate for the Indian IT services industry which responded by tightening cost structures, crafting new, low-cost solutions for customers and seeking new growth markets. Despite the severe challenges resulting from such adverse market conditions, the company grew total income for the year by 8% and significantly improved its profitability. New customer acquisitions and renewed thrust on scaling up existing engagements in target industry domains, solution areas and focus technologies were critical to achieving this performance.
For the year:
(a) ITC Infotech India Limited registered an Income of Rs. 3777.100 millions (previous year Rs. 3497.200 millions) and a Profit After Tax of Rs. 340.100 millions (previous year Rs. 30.400 millions);
(b) ITC Infotech Limited,
(c) ITC Infotech (USA), Inc., (I2A) a wholly owned subsidiary of the company, together with its wholly owned subsidiary Pyxis Solutions LLC, registered Total Revenues of US$ 30.99 million (previous year US$ 33.05 million) and a Net Profit of US$ 0.08 million (previous year Net Profit US$ 1.82 million).
Although, as mentioned earlier, the Industry was adversely impacted by reduced IT spending in most parts of the world as well as the threat of ‘protectionism’ in some target markets, there was an improvement in business sentiment towards the end of 2009-10, reflecting in a stronger sales pipeline for the Indian IT services industry. Most governments view the IT sector as an important engine of economic growth and many are taking measures to stimulate sector output as a means of accelerating economic recovery.
The company leveraged this opportunity to maintain its
strong pace of new customer acquisitions. The company added new marquee
customers to its portfolio across
The company continues to invest in building strong and differentiated capabilities in its target markets. Some of these capabilities include customer loyalty solutions for airlines, hospitality and retail industries, tailored solutions for the chemical, printing and packaging industries based on the SAP platform and incubating new solutions for the pharmaceutical industry. Oracle has partnered with ITC Infotech to establish an ‘Oracle Industry Solution Center of Excellence’, a strong validation of the company’s domain and technical capabilities in certain key industry verticals. The company’s strategic relationship with Parametric Technology Corporation enables it to provide highly specialized global support to organizations in managing their product lifecycle processes.
Capitalising on the emerging market for low cost solutions, the company invested in building technology solutions for its customers on a pay-per-use mode. The company has also developed significant expertise in open source solutions that enables its customers to integrate and present business information from existing disparate sources in a seamless manner, at relatively lower costs. The company’s focus on building deep and differentiated capabilities is being increasingly validated and recognized by global analyst firms. The company has been featured for the fourth year in a row in the ‘Leader’s Category’ for the 2010 Global Outsourcing 100 by the International Association of Outsourcing Professional (IAOP) and has also been recognized as being amongst the top 20 Industry leaders focused on the consumer goods and retail industry. The company continues to be featured in the Global Services 100 list for the fifth year in a row. The company continues to focus on enhancing its internal systems and processes in order to continuously improve the quality of its services to customers and has established a centre of excellence for project management. The company has been ISO 9001: 2008 certified by DNV.
The company continues to invest in building its talent pool and improving its delivery and support processes to build resource capabilities and improve efficiencies. According to a recent NASSCOM industry estimate, talent shortfall will continue over the next few years leading to increasing pressure on talent availability. The company continues to sharpen its focus on growing and nurturing talent internally through continuous employee engagement and training programs. On the basis of the company’s practice of empowering employees, being aligned to international human rights norms and national labour laws, the company was certified SA 8000: 2008 by DNV.
With strategies in place to expand to new markets, a portfolio of differentiated solutions, the ability to provide superior customer care and excellence in delivery through project management capabilities, knowledge management, solution accelerators and a robust quality system, the company is poised to achieve rapid growth.
Russell Credit Limited
During the year, the company registered an income of Rs. 518.100 millions and a Profit After Tax of Rs. 419.300 millions Investments aggregating Rs. 3873.100 millions held by the company in Agro Tech Foods Limited, VST Industries Limited, EIH Limited and Hotel Leelaventure Limited were sold to the Company at their respective book values.
As stated in earlier Reports, a petition was filed by an
individual in the High Court at Calcutta, seeking an injunction against the
company’s Counter Offer to the shareholders of VST Industries Limited, made in
accordance with the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997, as a competitive bid,
pursuant to a Public Offer made by an Acquirer, which closed on 13th June,
2001. The High Court at
Wimco Limited
The company achieved a Turnover of Rs. 2160 millions, registering a growth of 19% over the previous year on account of higher unit realization in the Matches business and an improved performance in the Engineering and Agro Forestry businesses of the company. However, in spite of the growth in sales and realizations, the company
posted a net loss for the year of Rs. 162.400 millions against a net profit of Rs. 11.200 millions in the previous year, primarily as a result of steep increases in input costs.
During the year, margins in the Matches business were under pressure due to a very sharp escalation in the prices of raw materials, primarily wood, splints, paperboard and key chemicals. A contemporary match manufacturing line was installed at the Kolkata unit during the year for improved efficiencies and better quality. This technology has been fully absorbed and is working satisfactorily. Several other measures were also taken to rationalize costs and improve margins in this highly competitive category.
The Engineering business of the company registered a growth of 25% over the previous year as the investment climate improved towards the second half of the year with customers confirming orders for packaging machines. This business is poised for further growth through new customer acquisitions, both in the domestic and overseas markets. The business plans to leverage new and improved product designs to offer superior packaging solutions to customers.
Availability of critical raw material like wood at
competitive prices is crucial for the success of this industry. The Agro
Forestry business of the company is taking steps towards this end by supplying
high quality poplar ETPs (Entire Transplant) to farmers in
Srinivasa Resorts Limited
During the financial year ended 31st March, 2010, the company recorded an income of Rs. 545.700 millions (previous year – Rs. 622.700 millions) and a Profit Before Tax of Rs. 141.100 millions (previous year – Rs. 185.300 millions). Profit After Tax stood at Rs. 96.200 millions (previous year – Rs. 126.600 millions) after providing for income tax of Rs. 44.900 millions (previous year – Rs. 58.700 millions).
The financial performance of the company’s hotel at
Despite the adverse market conditions, the company continues
to make investments in maintaining the contemporariness of its hotel property.
The hotel received the ‘Greentech Environment Excellence Award’ from the
Greentech Foundation and the ‘Golden Peacock’ Award for its outstanding
achievement in Environment Management. The hotel also received the ‘Times Food
Guide’ best restaurant award for ‘Kebabs and Kurries’ and ‘Dakshin’, and the
best pub award for ‘
The Board of Directors of the company has recommended a dividend of Rs. 2/- per equity share of Rs. 10/- each for the year ended 31st March, 2010.
During the financial year ended 31st March, 2010, the company recorded an income of Rs. 149.200 millions (previous year Rs. 129.000 millions) and earned a Profit After Tax of Rs. 21.300 millions (previous year Rs. 14.300 millions) after providing for income tax of Rs. 12.000 millions (previous year Rs. 8.900 millions). The company, which caters to the ‘mid-market to upscale’ segment, forged new alliances during the year taking the total number of properties under the Fortune brand to 59, with a total room count of 4817. Of these, 34 properties are operating hotels. Another 4 hotels are slated to be commissioned during the course of the financial year 2010-11. The remaining 21 hotel projects are under various stages of development.
The company seeks to be a dominant player in the mid market to upscale segment, providing quality products and services that would position ‘Fortune’ as the premier ‘value’ brand in the Indian hospitality sector.
The Board of Directors of the company has recommended a dividend of Rs. 6/- per equity share of Rs. 10/- each for the year ended 31st March, 2010.
Bay Islands Hotels Limited
During the year 2009-10, the company earned an income of Rs. 10.108 millions (previous year Rs. 9.675 millions) and Profit After Tax of Rs. 6.794 millions (previous year Rs. 6.385 millions) after providing for income tax of Rs. 2.669 millions (previous year Rs. 2.699 millions).
The Board of Directors of the company has recommended a dividend of Rs. 50/- per equity share of Rs. 100/- each for the year ended 31st March, 2010.
Landbase India Limited
Landbase India Limited (Landbase) owns and operates ‘The
Classic Golf Resort’, a Jack Nicklaus Signature Course, 45 Kms from
During the year, the company increased its Authorised Share Capital from Rs. 100 millions (10 millions equity shares of Rs. 10/- each) to Rs. 2000 millions comprising Equity Share Capital of Rs. 500 millions (50 millions equity shares of Rs. 10/- each) and Preference Share Capital of Rs. 1500 millions (15.000 millions preference shares of Rs. 100/- each). During the year, the company issued and allotted to ITC Limited, (i)1,01,00,000 Redeemable Preference Shares of Rs. 100/- each for cash at par, aggregating Rs. 1010 millions and (ii) 4,60,00,000 Equity Shares of Rs. 10/- each for cash at par on ‘Rights Basis’ aggregating Rs. 460 millions. The proceeds from the Preference Share and Rights issues were utilized by the company during the year to repay to the Company the outstanding loans and advances aggregating to Rs.1451.400 millions.
Technico Pty Limited
The company continued to focus on the commercialization of
its proprietary TECHNITUBER® technology and subsequent field multiplication of
seed potatoes through its wholly owned subsidiaries in different geographies.
The company is also engaged in the marketing of TECHNITUBER® seeds to global
customers from the production facilities of its subsidiaries in
During the year, Technico’s leadership in the production of early generation seed potatoes and strong agronomy skills has been leveraged by the Company’s Branded Packaged Foods business in its chip stock sourcing operations for the ‘Bingo!’ brand of potato chips as well as by the Agri Commodities business in servicing the seed potato requirements of its farmer base in key states. The resultant higher sales, together with improved pricing and margins under conducive market conditions enabled the Indian subsidiary of the company to double its revenues and grow its profits fourfold.
For the year:
a) Technico
b) Technico Asia Holdings Pty Limited,
c) Technico ISC Pty Limited,
d) Technico Technologies Incorporation,
e) Technico Agri Sciences Limited, India registered a Turnover of Rs. 543.100 millions (previous year: Rs.276.600 millions) and a Profit After Tax of Rs. 140.200 millions (previous year: Rs. 30.200 millions) driven by the growth in sales volumes of its high quality early generation seed potatoes from 26,292 tons to 35,079 tons and higher price realisations and margins.
f) For the year ended 31st December, 2009, Technico Horticultural (Kunming) Company Limited, China registered a Turnover of Chinese Yuan (CNY) 4.26 million (previous year: CNY 11.68 million) and posted a Net Loss of CNY 1.70 million (previous year: Net Loss of CNY 2.86 million). The results of the Chinese company for the period 1st April 2009 to 31st March 2010, which is incorporated in the Consolidated Financial Statements of the Company, reflect a Turnover of CNY 6.07 million (previous year: CNY 11.63 million) and a Net Profit of CNY 1.15 million (previous year: Net Loss of CNY 1.66 million). The business continues to focus on export of TECHNITUBER® seeds.
King Maker Marketing Incorporation
King Maker Marketing Inc. (KMM) is a wholly owned subsidiary
of the Company registered in the State of
During the year, KMM faced a challenging operating environment with steep Federal Tobacco Tax increases for cigarettes and Roll The Own (RYO) tobaccos taking effect from April 1, 2009 followed by tax increases in several states. Further, in June 2009, the US Congress granted jurisdiction to the Food and Drug Administration (FDA) for Tobacco products.
The sharp increase in taxes not only resulted in a rapid decline in Cigarette industry volumes but also fueled a significant rise in illicit sales and drove the majors further into the discount segment in which the company operates. Consequently, the company’s pricing power was adversely affected. The RYO segment of the Industry was decimated and rendered irrelevant. As a result, KMM’s tobacco business witnessed a muted revenue growth of 3% over the previous year.
Pressure on margins increased with trade preference for the costlier
‘Low Ignition Propensity’ (LIP) cigarettes, even where State laws did not
mandate it. This, together with the rapid shift in consumer preference to hard
packs from soft packs and the sharp decline in the RYO business, led to
inventory obsolescence. The newly introduced FDA User Fee and further
investments in infrastructure and business development for the garments
operations set up in
The operating environment of the company is likely to remain
challenging in the coming year. The various requirements of the FDA, which
trigger progressively over the next three years, will, in 2010, require the
company to make packaging changes and product ingredient disclosures. The
company will continue to the regulatory and market environment to craft its
strategies and calibrate its initiatives in the
ITC Global Holdings Pte. Limited
The Judicial Managers had been conducting the affairs of ITC
Global Holdings Pte. Limited, (“Global”) since 8th November, 1996
under the authority of the High Court of Singapore. Pursuant to the application
of the Judicial Managers, the
As stated in the previous years’ Reports, the Judicial
Managers of Global had filed a Writ against the Company in November 2002 before
the Singapore High Court claiming approximately USD 18.10 million. Based on
legal advice, the Company filed an appropriate application for setting aside
the said Writ. On 2nd March 2006 the Assistant Registrar of the Singapore High
Court set aside the service of writ of summons on the company and some
individuals. Subsequently in November 2006, the Company received a set of
papers purportedly sent by Global including what appeared to be a copy of the
earlier Writ of Summons. The Company filed a fresh Motion in the Singapore High
Court praying for setting aside the said Writ of Summons, which was upheld by
the Assistant Registrar of the
BFIL Finance Limited
The company continues to focus its efforts on recoveries through negotiated settlements including property settlements and pursuit of legal cases against various defaulters. During the year some negotiated settlements were concluded and the company effected collections aggregating Rs. 5.000 millions. The company had no external liabilities outside the ITC Group. The company will examine options for further business opportunities at the appropriate time.
Gold Flake Corporation Limited, Wills Corporation
Limited, Greenacre Holdings Limited and MRR Trading and Investment Company
Limited
The issued and paid-up capital of Greenacre Holdings Limited was increased by Rs. 90 millions, which was subscribed to by the holding company Russell Credit Limited. There were no major events to report with respect to the other companies.
NOTES ON JOINT VENTURES
ITC Filtrona Limited
ITC Filtrona Limited delivered another year of robust business growth with Gross Sales at Rs. 1350 millions growing by 19% over the previous year. However, pricing pressure, higher input costs and adverse forex rates impacted margins. Pre-tax profit for the year at Rs. 151 millions represents a growth of 3% over the previous year. The Board of Directors of the company recommended a dividend of Rs. 9 per Equity share of Rs. 10/- each for the year ended 31st December, 2009.
The company continued to pursue its quality initiatives during the year and towards this end upgraded its filter making machine, further consolidating its market leadership and technological edge over competition. The company’s continuing focus on product and process quality and innovative product development further strengthened its partnerships with Indian cigarette manufactures and reinforced its status as their preferred supplier.
Maharaja Heritage Resorts Limited
Maharaja Heritage Resorts Limited, a joint venture of the Company with Jodhana Heritage Resorts Private Limited, currently operates 54 properties under the ‘WelcomHeritage’ brand and continues to grow with another 13 properties under development.
UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE, 2010
(Rs. In millions)
|
Particulars |
Quarter
Ended 30.06.2010 |
|
Gross income |
71721.500 |
|
Net sales |
48166.300 |
|
Other operating income |
307.100 |
|
Net income (1+2) |
48473.400 |
|
Expenditure |
|
|
a) (increase) / decrease
in stock-in-trade and work in progress |
(997.800) |
|
b)consumption of raw
materials |
15685.300 |
|
c)purchase of traded
goods |
3223.800 |
|
d)employees cost |
3419.200 |
|
e)depreciation |
1596.800 |
|
f)other expenditure |
10772.000 |
|
g) total |
33699.300 |
|
Profit from operations before
other income and interest (3-4) |
14774.100 |
|
Other income |
984.800 |
|
Profit before interest
(5+6) |
15758.900 |
|
Interest (net) |
58.000 |
|
Profit after interest and
before tax (7-8) |
15700.900 |
|
Tax expense |
4997.800 |
|
Net profit after
tax (9-10) |
10703.100 |
|
Paid up equity share
capital |
3818.200 |
|
(Ordinary shares of re.
1/- each) |
|
|
Reserves excluding
revaluation reserves |
|
|
Earnings per share (Rs.) |
|
|
-Basic (Rs.) |
2.80 |
|
-Diluted (Rs.) |
2.77 |
|
Public shareholding |
|
|
-Number of shares |
3804231426 |
|
-Percentage of
shareholding |
99.63 |
|
Promoters and promoter
group shareholding |
Nil |
|
a)Pledged / encumbered |
N.A. |
|
b)Non - encumbered |
N.A. |
NOTES
(i)The above results
were reviewed by the Audit Committee and approved at the meeting of the Board
of Directors of the Company held on 22nd July, 2010.
(ii)Figures for the
previous quarter are re-arranged, wherever necessary, to conform to the figures
for the current quarter. The Company does not have any Exceptional or
Extraordinary item to report for the above periods.
(iii)Gross Income
comprises Gross sales / Income from operations, Other Operating Income and
Other Income.
(iv)Gross Income
includes Rs. 22263.300 millions for the quarter ended 30th June, 2010 being
Excise Duties, and Taxes on Sales of Services. (Corresponding previous quarter
ended 30th June 2009 - Rs. 19833.100 millions).
(v)The launch and
rollout costs of the Company's brands 'Fiama Di Wills', 'Vivel Di Wills',
'Vivel' and 'Superia' covering the range of personal care products of soaps,
shampoos, conditioners and shower gels, and the continuing significant brand
building costs of the Foods business are reflected under 'Other Expenditure'
stated above and in Segment Results under 'FMCG-Others'.
(vi)The Board of
Directors of the Company at its meeting held on 18th June, 2010 recommended for
the approval of the Members at the 99th Annual General Meeting convened on 23rd
July, 2010, issue of Bonus Shares in the proportion of 1 (One) Bonus Share of
Re. 1/- each for every existing 1 (One) fully paid-up Ordinary Share of Re 1/-
each.
(vii)During the
quarter, no investor complaint was received. There were no complaints pending at
the beginning of the quarter.
(viii)The above is
as per Clause 41 of the Listing Agreement.
SEGMENT-WISE REVENUE, RESULTS AND CAPITAL
EMPLOYED FOR THE QUARTER ENDED 30TH JUNE, 2010
|
Particulars |
Quarter
Ended 30.06.2010 |
|
1. Segment Revenue |
|
|
a) FMCG- Cigarettes - Gross |
46697.400 |
|
- Net |
24836.200 |
|
- Others - Gross |
10056.300 |
|
- Net |
10013.800 |
|
Total
FMCG -
Gross |
56753.700 |
|
- Net |
34850.000 |
|
b) Hotels
- Gross |
2251.300 |
|
- Net |
2099.200 |
|
c) Agri
Business - Gross |
13498.000 |
|
- Net |
13498.000 |
|
d) Paperboards, Paper & Packaging -
Gross |
8291.200 |
|
- Net |
7937.100 |
|
Total - Gross |
80794.200 |
|
-
Net |
58384.300 |
|
Less : Inter-segment revenue
- Gross |
10364.600 |
|
- Net |
10218.000 |
|
Gross sales / Income from operations |
70429.600
|
|
Net sales / Income from operations |
48166.300
|
|
2.Segment Results |
|
|
a)FMCG- Cigarettes |
13049.800 |
|
- Others |
(892.500) |
|
Total FMCG |
12157.300 |
|
b) Hotels |
385.200 |
|
c) Agri Business |
1231.000 |
|
d) Paperboards, Paper &
Packaging |
1884.600 |
|
Total |
15658.100
|
|
Less :i) Interest (Net) |
58.000 |
|
ii) Other un-allocable
income net of un-allocable expenditure |
(100.800) |
|
Profit Before Tax |
15700.900
|
|
Tax Expense |
4997.800 |
|
Profit After Tax |
10703.100
|
|
3.Capital Employed |
|
|
a) FMCG- Cigarettes * |
30315.500 |
|
- Others |
18880.500 |
|
Total FMCG |
49196.000
|
|
b) Hotels |
25111.400 |
|
c) Agri Business |
14405.500 |
|
d)Paperboards, Paper and
Packaging |
36358.200 |
|
Total Segment Capital Employed |
125071.100 |
* Segment Liabilities of FMCG-Cigarettes is before considering Rs.
6568.100 millions (2009 - Rs. 5538.000 millions) in respect of disputed Taxes,
the recovery of which has been stayed or where States' Special Leave Petitions
are pending before the Supreme Court. These have been included under
'Unallocated Corporate Liabilities'.
NOTES
(1) The Company's corporate strategy aims at creating multiple drivers
of growth anchored on its core competencies. The Company is currently focused
on four business groups: FMCG, Hotels, Paperboards, Paper and Packaging and
Agri Business. The Company's organisational structure and governance processes
are designed to support effective management of multiple businesses while
retaining focus on each one of them.
(2) The business groups comprise the following :
FMCG
:
Cigarettes -Cigarettes and Smoking Mixtures.
: Others -Branded Packaged Foods
(Staples, Biscuits, Confectionery, Snack Foods and Ready to Eat Foods),
Garments, Educational and other Stationery products, Matches, Agarbattis and
Personal Care products.
Hotels
- Hoteliering.
Paperboards, Paper
and Packaging
- Paperboards,
Paper including Specialty Paper and Packaging including Flexibles.
Agri Business
-Agri commodities such
as rice, soya, coffee and leaf tobacco.
(3) Segment results of 'FMCG : Others' are after considering significant
business development, brand building and gestation costs of Branded Packaged
Foods and Personal Care Products businesses.
(4) The Company's Agri Business markets agri commodities in the export
and domestic markets; supplies agri raw materials to the Branded Packaged Foods
Business and sources leaf tobacco for the Cigarettes Business. The segment
results for the quarter are after absorbing costs relating to the strategic
e-Choupal initiative.
(5) Figures for the corresponding previous quarter are re-arranged,
wherever necessary, to conform to the figures of the current quarter.
Fixed Assets
- Railway
Sidings
- Plant and
Machinery
- Computer
- Furniture and
Fixtures
- Motor
Vehicles
PRESS RELEASE
Financial Results for the Quarter ended 30th June, 2010
Highlights
Profits from Operations: +19.6%
Pre-Tax
Profits: +19.2%
Post Tax
Profits : +21.8%
•Operating Profits from Non-Cigarette businesses grow 38% (Rs.2650 millions in Jun ’10 from Rs.1920 millions in Jun ‘09).
• Robust performance by Non-Cigarette FMCG
businesses. Segment revenues up 32.2% with improved profitability.
• Agri Business delivers strong performance with
Segment revenues up 43.5% on the back of higher sales of Soya, Leaf Tobacco and
Wheat.
• Recovery continues in the Hotels segment with
revenues and profits growing by 21% and 26% respectively.
• Strong showing by Paperboards, Paper and Packaging
businesses, leveraging recent investments in Paper and Pulp capacities. Segment
revenues and profits up 13% and 48% respectively.
• ITC completes a 100 years on August 24, 2010.
The Company posted an impressive performance during the quarter with healthy topline growth and high quality earnings. Net Turnover at Rs. 48170 millions grew by 16% driven by the Foods, Personal Care, Agri and Cigarette businesses. Pre-tax profits increased by 19.2% to Rs.15700 millions while Post-tax profits at Rs.10700 millions registered a growth of 21.8%. Earnings Per Share for the quarter stood at Rs. 2.80/-
The Company’s relentless focus on providing world-class products to consumers enabled it to sustain its leadership position in the industry. Innovation and consumer centricity have enabled the business to deliver superior value through its brand portfolio of well crafted blends, contemporary packaging styles and use of state-of-the-art manufacturing technology. Several initiatives across the brand portfolio in terms of pack modernization, improvement in smoke profile and introduction of new brands and variants such as ‘Lucky Strike’, ‘Classic Menthol Rush’, ‘Gold Flake SLK’ during the quarter have bolstered the Company’s market standing in the premium categories and improved overall market share. The business is also test marketing its products in the new ‘micro filter’ segment (length not exceeding 60mm). On the manufacturing front, the business commenced operations at its new facility in Ranjangaon, Pune. Investments continued to be made towards enhancement of quality, productivity and variety.
The cause for concern, however, remains the severe taxation
and regulatory milieu for cigarettes in
The vacuum created by the exit of the popular low priced micros and plain non-filter cigarettes (in the wake of the heavy imposition of excise duties in 2008) provided the headroom for tax-evaded cigarettes to enter the market in a big way. These tax-evaded cigarettes sell in the market at prices that do not even cover the cost of taxes payable thereon. Such cigarettes, estimated to constitute more than 8% of the Indian market, not only deprive the legitimate industry of revenues and profits that it rightfully deserves but also deny the Exchequer of its fair share of taxes. It is imperative that the authorities strengthen enforcement to eliminate this fast growing illegal industry.
The cigarette industry continues to be impacted by the graphic statutory warnings on retail packages of tobacco. Such graphic warnings, which are more impactful on cigarettes than on other forms of tobacco by virtue of the design specifications, have placed cigarettes in a disadvantageous position. Such regulations and others like the ban on smoking in public places together with the high incidence of tax on cigarettes encourage consumers to shift to cheaper and lightly taxed tobacco products.
Despite the current challenging market
conditions, the Company remains confident of leveraging its internationally
benchmarked product quality, the resilience of its brands and the superiority
of its competitive strategies to retain its leadership position in the
industry.
The Branded Packaged Foods business continued to expand with sales growing by 34% during the quarter. Improved realisations, richer product mix and active cost management across the supply chain resulted in enhanced value capture.
The ‘Bingo!’ range of potato chips and finger snacks continued to gain consumer franchise with strong growth in revenues. The exciting range of variants was further augmented with the launch of ’Oye Pudina’ during the quarter. Clutter-breaking advertising and brand promotions continue to maintain buzz around the brand.
Sales of ‘Sunfeast’ biscuits grew by 43% during the quarter alongwith product mix improvement, with sales of value-added variants of cookies and creams growing significantly.
In the Staples category, ‘Aashirvaad’ atta consolidated its leadership position with sales growing by 21% on the back of improved realisations and higher volumes. Confectionery category revenues grew by 25% supported by the launch of an orange variant of ‘mint-O Gol’ and increasing consumer franchise for Eclairs and Lactos.
The business is investing in manufacturing
and distribution infrastructure to support larger scale in view of the growing
demand for its products. The business continues to focus on supply chain
improvements to enhance product freshness, market servicing and margins.
The Personal Care business continued to make significant progress in gaining consumer franchise with revenues growing by 86% during the quarter. Product offerings under the ‘Essenza Di Wills’, ‘Fiama Di Wills’, ‘Vivel Di Wills’, ‘Vivel’ and ‘Superia’ brands continue to focus on enhancing consumer benefits.
The business made a foray into the fast growing and relatively under-penetrated domestic skin care market with the launch of ‘Vivel Active Fair Cream’ in June 2010 in select markets. The product, with its unique"Fairness Lock System" seeks to deliver superior consumer benefits in the form of faster and longer-lasting fairness and higher levels of sun protection. It has a SPF 15 sun protection rating.
The business sustained its impressive growth in the Soaps category achieving a volume market share of 5%. Product portfolio was enlarged with new offerings in the freshness segment with the launch of ‘Vivel Deo Spirit’.
Currently, brands ‘Vivel’ and ‘Superia’ are each estimated to be more than Rs 2000 millions per annum in terms of consumer spend.
The business is investing in building a strong portfolio of products and brands through well-defined research and development strategies backed by the Company’s state-of-the-art R and D Centre. It is also continuously enhancing the quality of engagement with consumers through efficient deployment of media, direct contact and promotional activities across conventional and new age consumer connect avenues.
The business continues to leverage investments in tax-exempt manufacturing facilities at Haridwar (Uttarakhand) and Manpura (Himachal Pradesh). Apart from fiscal benefits that will accrue on such investments, these facilities will provide a higher degree of flexibility in manufacturing and ensure the highest standards of product quality.
Education
and Stationery Products
The Education and Stationery Products business registered a robust revenue growth of 30% during the quarter. The business continues to consolidate its market leadership position in the notebook segment while the recent additions in scholastic range are gaining traction.
The business continues to leverage its association with youth icons Yuvraj Singh and Soha Ali Khan - brand ambassadors for the ‘Classmate’ range of products. This intervention has enhanced the level of consumer awareness of Classmate’s growing product basket beyond its flagship category of notebooks, namely pens, pencils, geometry boxes, markers, highlighters, copier paper, etc.
The business continues to promote ‘Paperkraft’, its
executive and office supplies stationery brand. Working in tandem with the
Paperboards and Specialty Paper Division (PSPD), the business has positioned
‘Paperkraft’ as the finest green paper for business applications viz.
copy-scan-print-fax. Paperkraft’s green credentials are supported, among other
factors, by the Company’s membership of the prestigious
The incipient recovery of the Hotels sector witnessed in the latter part of 2009/10 showed further signs of improvement during the quarter with improved levels of foreign tourist arrivals and domestic travel. The relatively improved business conditions were manifest in the performance of the segment with revenues growing by 21% and segment profits by 26%.
The ITC Royal Gardenia, a 292 room luxury offering in
Bengaluru launched in October 2009, is the largest LEED (Leadership in Energy
and Environmental Design) Platinum rated hotel in the world and the first in
Construction activities of the new super luxury properties
at Chennai and Kolkata are progressing satisfactorily. In addition, several
renovation programmes are underway including addition of a new shopping arcade
and room renovations at the ITC Mughal in
Paperboards,
Specialty Papers and Packaging
The business posted an impressive performance during the quarter with segment revenues growing by 13%. Segment results grew at a faster pace of 48% driven by a combination of product mix enrichment, higher realisations and enhanced value capture through in-house pulp production.
The business continued to leverage its integrated business model - access to high-quality fibre from the economic vicinity of the Bhadrachalam mill, in-house pulp mill and state-of-the-art manufacturing facilities on the one hand and a robust forward linkage with the Education and Stationery Products business on the other – to further consolidate its leadership status in the Indian Paper and Paperboards industry. In order to sustain its pre-eminent position in the Paperboards segment, investment in a state-of-the-art machine is underway which is expected to be operational by early 2012.
The Packaging and Printing business continues to provide strategic sourcing support to the Cigarette, Foods and Personal Care businesses. The business also leveraged its state-of-the-art investments in flexibles and carton lines to deliver value added packaging to key customers in the consumer electronics and FMCG industries. Sales to external customers registered robust growth. Investments in a new carton line are underway to cater to the growing demand in this segment.
During the quarter, the Agri business posted a robust performance recording a revenue growth of 44% on the back of increased sales of soya, leaf tobacco and wheat. The business continues to provide strategic sourcing support to the Company’s Cigarette and Branded Packaged Foods business by ensuring high quality supplies. Construction activity of the new green leaf threshing facility in Karnataka is progressing satisfactorily.
Contribution
to Sustainable Development
The Company, foreseeing the unprecedented threat to sustainable development as a consequence of societal challenges arising out of poverty, environmental degradation and climate change, has vigorously pursued a conscious strategy to align its businesses to serve a larger societal purpose. Unique business models have been crafted to synergistically deliver economic, environmental and social value. The Company continues to sustain its unique position as the only company in the world to be ‘carbon positive’, ‘water positive’ and ‘solid waste recycling positive’.
ITC's recycling initiative - christened ‘Wealth Out of
Waste’ (WOW) - has been internationally recognised by Bureau of International
Recycling. WOW reaches out to schools, institutions and homes through awareness
building and source segregation of waste. There are over 100 corporates
supporting WOW and more than three lakh households across southern
The Company continued to enlarge its social sector footprint by expanding to
newer districts during the period. 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 women’s economic empowerment and genetic
improvement in livestock and (c) community development, with focus on primary
education and health and sanitation. ITC is currently running social
development projects in 55 districts spread over the states of Andhra Pradesh,
Kerala, Karnataka, Tamil Nadu, Orissa, West Bengal, Bihar, Uttar Pradesh,
The pioneering initiative of social development projects including watershed development, Social Forestry Programmes, Soil and Moisture conservation programmes is designed to assist farmers in identified moisture-stressed districts, preservation of precious topsoil for agriculture and group irrigation projects. The households covered under the Social Forestry Programme continue to reap the benefits derived from cut plantations during the period. Towards improving the income earning capability of the farming community, Sustainable Agricultural Practices were continued with the promotion of organic fertiliser units through vermi-composting and NADEP technologies. Several varieties of paddy, gram and wheat have been tested in 474 field demonstrations leading to participative selection of higher productive strains by farmers. Similarly, 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 improvement of cattle through artificial insemination to produce high-yielding crossbred progenies has been given special emphasis and has the potential to pull them out of poverty. Integrated animal husbandry services addressed the needs of problem breeders, vaccines, feed additives and awareness drives. The initiative for the economic empowerment of women also continued apace with gainful employment being provided either in micro-enterprises or through self-employment with the support of income generation loans.
The Company’s social sector footprint can be seen at a glance in the
following chart:
|
Intervention
Areas |
Unit
of Measurement |
Q1
2010-11 |
|
Total
Districts Covered |
Number |
55 |
|
Social
and Farm Forestry |
Hectare Persondays |
107,521 |
|
Soil
Moisture Conservation Programme
Area
Covered |
Hectare |
54,615 |
|
Sustainable
Agricultural Practices |
Number |
13,506 |
|
Sustainable
Livelihoods Initiative |
Number |
164 |
|
Economic
Employment of Women |
Persons |
14,278 |
|
Primary
Education |
Children |
228,872 |
|
Health
and Sanitation |
Number |
2,937 |
AS PER WEBSITE
PROFILE
Subject is one of India's foremost private sector companies with a
market capitalisation of nearly US $ 22 billion and a turnover of over US $ 6 billion.*
Subject 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. Subject ranks among
Subject has a diversified presence in Cigarettes, Hotels, Paperboards
and Specialty Papers, Packaging, Agri-Business, Packaged Foods and
Confectionery, Information Technology, Branded Apparel, Personal Care,
Stationery, Safety Matches and other FMCG products. While Subject 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 and Confectionery, Branded Apparel,
Personal Care and Stationery.
As one of
subject'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
Subject's Agri-Business is one of
Subject's wholly owned Information Technology subsidiary, ITC Infotech
India Limited, 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.
Subject's production facilities and hotels have won numerous national
and international awards for quality, productivity, safety and environment
management systems. Subject was the first company in
Subject employs over 26,000 people at more than 60 locations across
Milestones
1996
Flat 10 packs launched
1997
10s hinged-lid packs introduced for regular size filters
1999
New factory at
2000
Brownfield project at
Entry into Lifestyle Retailing business with first store in
2001
Regular size filters offered in 5s packs
‘Wills Lifestyle’ chain rapidly scaled upto 29 stores
Engry into the foods Business with lauch of ‘Kitchens of India’.
‘Expressions valued Customer’ programme started
2002
Beveled edge packs introduced
‘mint-o’ trademark acquired relaunched in lemon and mint flavours,
‘Candyman’ added to confectionery rang, ‘ Aashirvaad’ atta rolled out
Chain expanded to 48 stores; Master Design Facility established; ‘Wills
Classic’ formal wear launched; ‘John Players’ introduced in the mid-priced
popular segment.
Entry into Greeting Cards business
‘Expressions Paperkraft’ premium paper products launched
Entry into marketing of safety matches
2003
‘
Integrated Group Research and Development Centre established
‘Aashirvaad’ Salt introduced; ‘Candyman’ range expanded to deposited candies
and eclaris; ‘Sunfeast’ biscuits lauched; Aashirvaad Ready Meals’ offered;
‘mint-o’ in lemon mint flavour.
‘Wills Clublife’ evening wear launched.
‘Expressions Classmate’ mass market notebooks for schools and colleges
introduced.
Entry into marketing of Agarbatties
2004
Long – Size filters offered in wave packs
‘Kitchens of
‘Mangaldeep’ brand of Agarbatties added to portfolio.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON DESIGNATED
PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.45.37 |
|
|
1 |
Rs.70.04 |
|
Euro |
1 |
Rs.58.98 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
81 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.