7/27/2019 HLL VS ITC SEM III
1/122
ITC
HUL
7/27/2019 HLL VS ITC SEM III
2/122
7/27/2019 HLL VS ITC SEM III
3/122
7/27/2019 HLL VS ITC SEM III
4/122
7/27/2019 HLL VS ITC SEM III
5/122
7/27/2019 HLL VS ITC SEM III
6/122
7/27/2019 HLL VS ITC SEM III
7/122
7/27/2019 HLL VS ITC SEM III
8/122
7/27/2019 HLL VS ITC SEM III
9/122
ITC LimitedOne of Indias Most Valuable Corporations
Roll No : 1 to 30
7/27/2019 HLL VS ITC SEM III
10/122
One of the 8 Indian Companies to feature in Forbes A-listfor 2004
Featuring 400 of the Worldsbest big companies with M-cap. > USD 5 bln. &
are rated as the most attractive companies forinvestors
Only Indian FMCG Company to feature in Forbes 2000 List
A comprehensive ranking of worlds biggest companies measured by a
composite of sales, profits, assets & market value Among top in :
Sustained value creation (BT-Stern Stewart survey)
Operating profits
Cash Profits
Ranks No. 10 among Indian listed Private Sector Companies by market cap.
(@27/07/07)
No. 1 in FMCG Sector
Rated as one of Indias Most Respected Companies (IMRB-Businessworld
Survey 2006)
ITCOne of Indias most valuable corporations
7/27/2019 HLL VS ITC SEM III
11/122
BRIEF HISTORY
7/27/2019 HLL VS ITC SEM III
12/122
VisionSustain ITCs position as one of Indias most valuable
corporation through world class performance,
Creating growing value fro the Indian economy and the
company's stakeholder
7/27/2019 HLL VS ITC SEM III
13/122
Mission
To enhance the wealth generating capability of the
enterprise globalising environment, delivering
superior and sustainable Stakeholder value
7/27/2019 HLL VS ITC SEM III
14/122
ITC's Core Values
Trusteeship
Customer Focus
Respect For People Excellence
Innovation
Nation Orientation
7/27/2019 HLL VS ITC SEM III
15/122
Organization Structure
ITC LTD.
B.O.D.
Chairman-1Executive-4
Non Exe-11
C.M.C.Directors-4
Executive-4
D.M.C.
Cigarettes and
Other FMCGHotels
Agri
businessPaper
Board
7/27/2019 HLL VS ITC SEM III
16/122
Sustain multiple drivers of growth, matching internal
capabilities with emerging market opportunities
Pursue World class competitiveness in all businesses and
across the entire value chain
Best-in-class in terms of:
Internal Vitality
Market Standing
Profitability
Strategy of Organisation and Governance processes
geared to manage multiple businesses
Blend core competencies and leverage ITC umbrella
strengths to create new avenues of growth
Corporate Strategies
7/27/2019 HLL VS ITC SEM III
17/122
Corporate Governance-Core
Principles
Trusteeship
Transparency
Empowerment and Accountability Control
Ethical corporate citizenship
7/27/2019 HLL VS ITC SEM III
18/122
ITC strives to be Citizen First
Contribute to the 'Triple Bottom Line',
Economic, Environmental and Social
1ST
Indian company to come out withSustainability Report, in 2005, certifiedby PwC.
Preservation and enrichment of precious
environmentalresources
Safe and healthy workplace for its employees.
ITC's social development initiatives
7/27/2019 HLL VS ITC SEM III
19/122
Responsibility Towards Economy
7/27/2019 HLL VS ITC SEM III
20/122
Management Approach
Policy:
The Company's commitment in the area ofeconomic performance is encapsulated in
its Vision statement, which is 'to sustainITC's position as one of India's mostvaluable corporations through world-class
performance, creating growing value forthe Indian economy and the Company'sstakeholders'.
7/27/2019 HLL VS ITC SEM III
21/122
Goals and Performance
Sustaining ITC's position as one of India'smost valuable corporations
Achieving leadership in each of thebusiness segments within a reasonabletime frame
Achieving a Return on Capital Employed
(ROCE) in excess of the Company's costof capital, at all times
7/27/2019 HLL VS ITC SEM III
22/122
7/27/2019 HLL VS ITC SEM III
23/122
Pension Obligations
Employee Retirement Benefit Scheme
Provident Fund & Family Pension
Local Hiring & Social Management
Inducts quality talent from premium campus
Range of Selection tools used:
Assessment Centers In-Depth Personal interviews
7/27/2019 HLL VS ITC SEM III
24/122
Responsibility Towards Environment
7/27/2019 HLL VS ITC SEM III
25/122
Management Approach
Policy
ITC endeavours not only to minimise its
environmental footprint but wherever possiblecreate a positive environmental footprint. TheCorporate Management Committee of theCompany has issued an Environment, Health &
Safety Policy .
7/27/2019 HLL VS ITC SEM III
26/122
Goals & Performance
Performance Beyond Compliance
Carbon Positive Footprint
Water Positive Footprint Zero Solid Waste (reduction, reuse and100% recycling of all solid wastes)
7/27/2019 HLL VS ITC SEM III
27/122
ITC is Committed to Energy
Sustainability
ITC's Strategy on Energy sustainability& commitment towards reducing GHGemissions
Ensuring availability & sustainability ofenergy supply
Benchmarking specific energy
consumption to progressively achievereduction
Using renewable resources
7/27/2019 HLL VS ITC SEM III
28/122
Water Positive Corporation
Total Water Intake at all units 25.6mkl(mn kilo ltr)
Conservation,Audits & benchmarking {to achievethe lowest specific water consumption (water perunit of production)}
Zero Waste Water Discharge- Treating &recycling all waste water,thereby not onlyreducing fresh water intake but also preventingpollution of fresh water resources.
Creating Positive Footprint Through rain waterharvesting both at the co. premises andwatershed projects
7/27/2019 HLL VS ITC SEM III
29/122
Towards Zero Solid Waste
Facts: Urban India alone generates an estimated
48 mn of solid waste each year.
More than 25% of municipal solid waste isnever collected for clearance
70% cities lack transport facilities forgarbage disposal
7/27/2019 HLL VS ITC SEM III
30/122
In 2005-06 total solid waste generated3,14,585 tonnes.
2,47,428 tonnes in 2005-06
Recycling
7/27/2019 HLL VS ITC SEM III
31/122
Corporate Social Responsibility
7/27/2019 HLL VS ITC SEM III
32/122
Human Rights
Policy
ITC is committed to conducting business in a
manner that reflects its high ethical and moralstandards. It expects its employees andbusiness partners to subscribe and adhere tothis philosophy, which honours all local laws
and upholds the spirit of human rights asenshrined in existing international standardssuch as the Universal Declaration and theFundamental Human Rights Conventions of
the ILO.
7/27/2019 HLL VS ITC SEM III
33/122
Prevention of discrimination at Workplace
Freedom of Association
Prohibition of Child and Forced Labor
Risk control programmes: HIV/AIDS e- Choupal
7/27/2019 HLL VS ITC SEM III
34/122
Corporate Social Responsibility
7/27/2019 HLL VS ITC SEM III
35/122
No success or achievement in material terms isworthwhile unless it serves the needs or interests of thecountry and its people. - J.R.D. Tata
7/27/2019 HLL VS ITC SEM III
36/122
CSR undertaken by HUL
Greening Barrens
Lifebuoy Swasthya Chetana
The Fair and Lovely Foundation
Happy Homes
Yashodham
Shakti
7/27/2019 HLL VS ITC SEM III
37/122
The fair and lovely foundation
Empowerment of women
7/27/2019 HLL VS ITC SEM III
38/122
Education
Project Saraswati -
H igh school
Graduate - Post Graduates
7/27/2019 HLL VS ITC SEM III
39/122
Career Guidance
Project Disha
7/27/2019 HLL VS ITC SEM III
40/122
7/27/2019 HLL VS ITC SEM III
41/122
The begining
Objective of shaktiRural development
Shakti Vani
7/27/2019 HLL VS ITC SEM III
42/122
Vision of Shakti
HLL envisions the creation of 1,00,000 Shakti
Entrepreneurs covering 5,00,000 villages, and touching
the lives of 600 million rural people by the year 2010.
7/27/2019 HLL VS ITC SEM III
43/122
Greening Barrens
Water Conservation and Harvesting
Project has two major ojectives :-
To reduce water consumption in its own operations
Regenerate sub-soil water tables at its own sites through
the principles of 5R - Reduce, Reuse, Recycle, Recoverand Renew.
7/27/2019 HLL VS ITC SEM III
44/122
Programs for water management
Water shade management on a 5 hectare plot to prevent soildegradation and conserve water
In villageParkhed in association TERI and the Bharatiya Agro
industries foundationKarchond village, near the Silvassa site has built 42 bunds
since 2003
Extended to factories -
The Hosur Coffee Factory
Yavatmal Personal Products Factory
7/27/2019 HLL VS ITC SEM III
45/122
Marketing Perspective
7/27/2019 HLL VS ITC SEM III
46/122
Problem faced
Inertia of Success : Ignores the danger of
competition
IBM, General Motors and Maruti which
were undisputed leaders have also faced
this problem
7/27/2019 HLL VS ITC SEM III
47/122
Lesson learned
Lesson 1 : Top management from CEO
onwards has to keep in touch
with ground realities
Lesson 2: CEO should have the courage of
convection to stand upto
pressure from head office
Lesson 3: Company should be innovativeand there should not be
resistance to change
7/27/2019 HLL VS ITC SEM III
48/122
Lesson learned
Lesson 4: Company has its own history
and culture on which its
management can draw
upon
7/27/2019 HLL VS ITC SEM III
49/122
7/27/2019 HLL VS ITC SEM III
50/122
7/27/2019 HLL VS ITC SEM III
51/122
7/27/2019 HLL VS ITC SEM III
52/122
7/27/2019 HLL VS ITC SEM III
53/122
(%)
7/27/2019 HLL VS ITC SEM III
54/122
7/27/2019 HLL VS ITC SEM III
55/122
7/27/2019 HLL VS ITC SEM III
56/122
7/27/2019 HLL VS ITC SEM III
57/122
7/27/2019 HLL VS ITC SEM III
58/122
7/27/2019 HLL VS ITC SEM III
59/122
7/27/2019 HLL VS ITC SEM III
60/122
7/27/2019 HLL VS ITC SEM III
61/122
7/27/2019 HLL VS ITC SEM III
62/122
7/27/2019 HLL VS ITC SEM III
63/122
7/27/2019 HLL VS ITC SEM III
64/122
7/27/2019 HLL VS ITC SEM III
65/122
7/27/2019 HLL VS ITC SEM III
66/122
7/27/2019 HLL VS ITC SEM III
67/122
7/27/2019 HLL VS ITC SEM III
68/122
7/27/2019 HLL VS ITC SEM III
69/122
7/27/2019 HLL VS ITC SEM III
70/122
7/27/2019 HLL VS ITC SEM III
71/122
7/27/2019 HLL VS ITC SEM III
72/122
7/27/2019 HLL VS ITC SEM III
73/122
7/27/2019 HLL VS ITC SEM III
74/122
7/27/2019 HLL VS ITC SEM III
75/122
ITC - Business Portfolio
7/27/2019 HLL VS ITC SEM III
76/122
76
ITC - Business Portfolio
ITC
FMCG:CigarettesOther FMCG
Hotels Agri BusinessLeaf TobaccoAgri Commodities
PaperboardPaper &
Packaging
Cigarettes & other
FMCG
7/27/2019 HLL VS ITC SEM III
77/122
Cigarettes & otherFMCG
FMCG
7/27/2019 HLL VS ITC SEM III
78/122
FMCG
7/27/2019 HLL VS ITC SEM III
79/122
FMCG
7/27/2019 HLL VS ITC SEM III
80/122
80
7/27/2019 HLL VS ITC SEM III
81/122
Information Technology
7/27/2019 HLL VS ITC SEM III
82/122
82
3 D M d l
7/27/2019 HLL VS ITC SEM III
83/122
3 D Model
7/27/2019 HLL VS ITC SEM III
84/122
Financial Perspective
S t i S l
7/27/2019 HLL VS ITC SEM III
85/122
0%
20%
40%
60%
80%
100%
% of Sales
2001 2002 2003 2004 2005 2006
Year
By Segement % of Sales
Otehrs
Chemical, Agriculture, Fertilizer
& Animal Foods
Food
Personal Products
Soap, Detergent & Household
care
Segment wise Sales
SEGMENTAL REVENUE FOR Yr 2006
7/27/2019 HLL VS ITC SEM III
86/122
64%6%
4%
15%
11%
Cigarettes
Fmcg
Hotels
Agri business
Paper
SEGMENTAL REVENUE FOR Yr 2007
60%
8%
5%
17%
10%
Cigarettes
FmcgHotels
Agri bus ines s
Paper
CIGARETTES
BY 4%
FMCG
BY 2%
HOTELS
BY 1%
AGRI BUSS
BY 2%
ROSE (%)
7/27/2019 HLL VS ITC SEM III
87/122
ROSE (%)
68.1361.07
57.21
82.84
46.1050.13
0
1020
30
40
50
60
7080
90
2006 2005 2004 2003 2002 2001
Year
ROSE(%
ROSE (%)
7/27/2019 HLL VS ITC SEM III
88/122
ROSE
22
23
24
25
26
27
28
29
2007 2006 2005 2004 2003 2002 2001
Year
ROSE(%)
ROCE (%)
7/27/2019 HLL VS ITC SEM III
89/122
ROCE (%)
66.6 66.6 67.9
42.2
58.4 56.2 57.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
2006 2005 2004 2003 2002 2001
ROCE (%)
ROCE (%)
7/27/2019 HLL VS ITC SEM III
90/122
ROCE
0
5
10
15
20
25
30
35
40
45
2007 2006 2005 2004 2003 2002 2001
Year
ROCE(%)
7/27/2019 HLL VS ITC SEM III
91/122
Shareholders' Equity
0
2000
4000
6000
8000
10000
12000
2007 2006 2005 2004 2003 2002 2001
Year
Rs.C
rores
C t R ti V Q i k
7/27/2019 HLL VS ITC SEM III
92/122
Current Ratio Vs Quick
Ratio
Current ratio vs Quick ratio
0.70 0.67
0.89 0.90 0.92 0.96
0.36 0.35
0.49 0.540.56 0.60
0.000.20
0.40
0.60
0.801.00
1.20
2006 2005 2004 2003 2002 2001
year
times Curr. ratio
Quick ratio
7/27/2019 HLL VS ITC SEM III
93/122
Current Ratio & Quick Ratio
0
0.2
0.4
0.6
0.81
1.2
1.4
1.6
1.8
2
2007 2006 2005 2004 2003 2002 2001
Year
Ra
tio
Current Assets Vs
7/27/2019 HLL VS ITC SEM III
94/122
Current Assets Vs
Inventory
CA vs Inventory
0
50000
100000
150000
200000
250000
300000
350000
400000
2006 2005 2004 2003 2002 2001
Year
Rs.
inlacs
CA
Inventory
7/27/2019 HLL VS ITC SEM III
95/122
7/27/2019 HLL VS ITC SEM III
96/122
7/27/2019 HLL VS ITC SEM III
97/122
Profit After Tax
7/27/2019 HLL VS ITC SEM III
98/122
Profit After Tax
PAT
185537.34
140810.44
119734.37
177179.4 170145.69
157635.55
0
50000
100000
150000
200000
2006 2005 2004 2003 2002 2001
Year
RSinlacs
7/27/2019 HLL VS ITC SEM III
99/122
PAT
0
500
1000
1500
2000
2500
3000
2007 2006 2005 2004 2003 2002 2001
Year
Rs.Cr
ores
7/27/2019 HLL VS ITC SEM III
100/122
PBIT
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2007 2006 2005 2004 2003 2002 2001
Year
Rs.C
rores
EPS
7/27/2019 HLL VS ITC SEM III
101/122
EPS
EPS
7.167.73 8.05
5.446.4
8.41
01
2
3
4
5
6
7
8
9
2001 2002 2003 2004 2005 2006
Year
Rs
7/27/2019 HLL VS ITC SEM III
102/122
EPS
0
10
20
30
4050
60
70
80
90
100
2007 2006 2005 2004 2003 2002 2001
Year
Rs.
PerShare
P/E Ratio
7/27/2019 HLL VS ITC SEM III
103/122
P/E Ratio
P/E Ratio
31.23
23.57 25.4326.38
30.84
25.76
0
5
10
15
2025
30
35
2001 2002 2003 2004 2005 2006
Year
Rs
7/27/2019 HLL VS ITC SEM III
104/122
P/E Ratio
0
0.5
1
1.5
2
2.5
3
3.5
2007 2006 2005 2004 2003 2002 2001
Year
Ratio(Times)
Dividend Per Equity
7/27/2019 HLL VS ITC SEM III
105/122
Share
Dividend Per Equity Share
4.5 4.98
3
5 5
6.01
0
1
2
3
45
6
7
2001 2002 2003 2004 2005 2006
Year
Rs
Yield (%)
7/27/2019 HLL VS ITC SEM III
106/122
Yield (%)
Yield (%)
2.01
2.74
3.48
1.47
2.74
2.01
00.5
1
1.5
2
2.5
3
3.5
4
2001 2002 2003 2004 2005 2006
Year
In%
7/27/2019 HLL VS ITC SEM III
107/122
Dividend Yield
0
5
10
1520
25
30
35
40
2007 2006 2005 2004 2003 2002 2001
Year
Yield
(%)
7/27/2019 HLL VS ITC SEM III
108/122
DPS
0
5
10
15
20
25
30
35
2007 2006 2005 2004 2003 2002 2001
Year
Rs.PerS
hare
Payout And Plough back (%)
7/27/2019 HLL VS ITC SEM III
109/122
Payout And Plough back (%)
62.82
37.18
64.4
35.6
37.27
62.73
91.92
8.08
78.16
21.84
71.44
28.56
0
20
40
60
80
100
in %
2001 2002 2003 2004 2005 2006
Year
Payout (%) and Ploughback (%)
Ploughback (%)
Payout (%)
Pl hb k R ti
7/27/2019 HLL VS ITC SEM III
110/122
Ploughback Ratio
0
10
20
30
40
50
60
70
80
2007 2006 2005 2004 2003 2002 2001
Year
P
ercent
7/27/2019 HLL VS ITC SEM III
111/122
2007 2006 2005 2004 2003 2002 2001
0
5
10
15
20
25
30
35
40
45
Payout Ratio
Year
Percent
7/27/2019 HLL VS ITC SEM III
112/122
Other Parameters
7/27/2019 HLL VS ITC SEM III
113/122
7/27/2019 HLL VS ITC SEM III
114/122
Economic Value Added (EVA)
7/27/2019 HLL VS ITC SEM III
115/122
EVA (In Rs Crore)
0200
400
600
800
1000
1200
1400
1600
2001 2002 2003 2004 2005 2006
Year
RsCrore
Economic Value Added (EVA)
Proprietary Ratio
7/27/2019 HLL VS ITC SEM III
116/122
Proprietary Ratio
Proprietary Ratio
0.97 0.98
0.56 0.59
0.98 0.97
0
0.2
0.4
0.6
0.8
1
1.2
2001 2002 2003 2004 2005 2006
Year
Ratio
Cash Position Ratio
7/27/2019 HLL VS ITC SEM III
117/122
Cash Position Ratio
Cash Position Ratio
0.09 0.09
0.19 0.21
0.25 0.26
0
0.05
0.1
0.15
0.2
0.25
0.3
2001 2002 2003 2004 2005 2006
Year
Ratio
7/27/2019 HLL VS ITC SEM III
118/122
ITCVsBSE FMCG Index
41.97
69.43
89.58
194.95
150.4
00
1109.8 1058.97
1647.47
1934.17
2137.42
0
50
100
150
200
250
Year 2003 2004 2005 2006 2007
Year
Rs
.
0
500
1000
1500
2000
2500
Performance Track Record- Snapshot
7/27/2019 HLL VS ITC SEM III
119/122
Rs. Crs1995-96 2006-07
Actuals Actuals
GROSS TURNOVER 5115 19505 12.9
NET TURNOVER 2536 12369 15.5
PBDIT 584 4293 19.9
PBIT 536 3930 19.9
PBT 452 3927 21.7
PAT (before exceptional items) 261 2700 23.7
Earnings Per Share (Rs) 0.7 7.2 23.4
NETWORTH 1121 10425 22.5
CAPITAL EMPLOYED 1886 11125 17.5
ROCE % 28.4 35.3
Cagr %
Total Shareholder Returns: 25%
Rs. 1 crore= Rs. 10 million
Key Financials:2006/07
7/27/2019 HLL VS ITC SEM III
120/122
y
Rs. Crs.
GTO 19505 20.2NTO 12369 26.3PBT 3927 20.1PAT 2700 18.4
PAT (after Exceptional Items) 2700 20.8Balance Sheet Size 11125 17.0
Non Cigarettes Business 52% of NTO
(48% LY)
Segment Results: FY 06/07Rs. Crores
7/27/2019 HLL VS ITC SEM III
121/122
FY FY
2006-07 2005-06
2. Segment Results
a) FMCG - Cigarettes 3172 2709 17.1
- Others (202) (172) (17.6)
Total FMCG 2970 2537 17.1
b) Hotels 351 258 35.9
c) Agri Business 123 91 35.4
d) Paperboards, Paper & Packaging 417 351 18.6
3861 3237 19.3
Les i) Interest (Net) 3 12 (72.5)
ii) (69) (44) -
Profit Before Tax 3927 3269 20.1
Goly (%)
Other un-allocable expenditure net
of un-allocable income
Total
Segment Capital Employed: FY 06/07
7/27/2019 HLL VS ITC SEM III
122/122
Rs. Cror es
FY FY
2006-07 2005-06
3. Capital Employed
a) FMCG - Cigarettes* 2019 1464 37.9
- Others 940 489 92.2
Total FMCG 2959 1953 51.5
b) Hotels 1467 1374 6.8
c) Agri Business 1480 1060 39.7
d) Paperboards, Paper & Packaging 2559 1908 34.1
8465 6295 34.5
Goly (%)
Total Segment Capital Employed