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ITC

HUL

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ITC LimitedOne of Indias Most Valuable Corporations

Roll No : 1 to 30

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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

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BRIEF HISTORY

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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

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Mission

To enhance the wealth generating capability of the

enterprise globalising environment, delivering

superior and sustainable Stakeholder value

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ITC's Core Values

Trusteeship

Customer Focus

Respect For People Excellence

Innovation

Nation Orientation

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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

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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

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Corporate Governance-Core

Principles

Trusteeship

Transparency

Empowerment and Accountability Control

Ethical corporate citizenship

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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

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Responsibility Towards Economy

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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'.

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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

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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

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Responsibility Towards Environment

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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 .

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Goals & Performance

Performance Beyond Compliance

Carbon Positive Footprint

Water Positive Footprint Zero Solid Waste (reduction, reuse and100% recycling of all solid wastes)

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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

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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

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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

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In 2005-06 total solid waste generated3,14,585 tonnes.

2,47,428 tonnes in 2005-06

Recycling

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Corporate Social Responsibility

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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.

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Prevention of discrimination at Workplace

Freedom of Association

Prohibition of Child and Forced Labor

Risk control programmes: HIV/AIDS e- Choupal

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Corporate Social Responsibility

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

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CSR undertaken by HUL

Greening Barrens

Lifebuoy Swasthya Chetana

The Fair and Lovely Foundation

Happy Homes

Yashodham

Shakti

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The fair and lovely foundation

Empowerment of women

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Education

Project Saraswati -

H igh school

Graduate - Post Graduates

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Career Guidance

Project Disha

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The begining

Objective of shaktiRural development

Shakti Vani

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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.

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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.

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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

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Marketing Perspective

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Problem faced

Inertia of Success : Ignores the danger of

competition

IBM, General Motors and Maruti which

were undisputed leaders have also faced

this problem

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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

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Lesson learned

Lesson 4: Company has its own history

and culture on which its

management can draw

upon

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(%)

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ITC - Business Portfolio

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76

ITC - Business Portfolio

ITC

FMCG:CigarettesOther FMCG

Hotels Agri BusinessLeaf TobaccoAgri Commodities

PaperboardPaper &

Packaging

Cigarettes & other

FMCG

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Cigarettes & otherFMCG

FMCG

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FMCG

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FMCG

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80

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Information Technology

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82

3 D M d l

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3 D Model

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Financial Perspective

S t i S l

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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

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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 (%)

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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 (%)

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ROSE

22

23

24

25

26

27

28

29

2007 2006 2005 2004 2003 2002 2001

Year

ROSE(%)

ROCE (%)

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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 (%)

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ROCE

0

5

10

15

20

25

30

35

40

45

2007 2006 2005 2004 2003 2002 2001

Year

ROCE(%)

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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

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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

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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

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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

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Profit After Tax

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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

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PAT

0

500

1000

1500

2000

2500

3000

2007 2006 2005 2004 2003 2002 2001

Year

Rs.Cr

ores

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PBIT

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2007 2006 2005 2004 2003 2002 2001

Year

Rs.C

rores

EPS

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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

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EPS

0

10

20

30

4050

60

70

80

90

100

2007 2006 2005 2004 2003 2002 2001

Year

Rs.

PerShare

P/E Ratio

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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

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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

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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 (%)

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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%

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Dividend Yield

0

5

10

1520

25

30

35

40

2007 2006 2005 2004 2003 2002 2001

Year

Yield

(%)

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DPS

0

5

10

15

20

25

30

35

2007 2006 2005 2004 2003 2002 2001

Year

Rs.PerS

hare

Payout And Plough back (%)

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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

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Ploughback Ratio

0

10

20

30

40

50

60

70

80

2007 2006 2005 2004 2003 2002 2001

Year

P

ercent

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2007 2006 2005 2004 2003 2002 2001

0

5

10

15

20

25

30

35

40

45

Payout Ratio

Year

Percent

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Other Parameters

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Economic Value Added (EVA)

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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

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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

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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

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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

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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

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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

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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

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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