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Material For Preparation - History, Crises Overcome, CSR & Venturing Abroad
Material For Preparation - History, Crises Overcome, CSR & Venturing Abroad
A Modest Beginning
The Company's beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the
centre of the Company's existence. The Company celebrated its 16th birthday on August 24,
1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru
Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more
ways than one. It was to mark the beginning of a long and eventful journey into India's future.
The Company's headquarter building, 'Virginia House', which came up on that plot of land two
years later, would go on to become one of Kolkata's most venerated landmarks.
(Add few points from small font material below during explanation if necessary)
1925: Packaging and Printing: Backward Integration
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, ITC's Packaging & Printing Business was set up in 1925 as a strategic backward
integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house.
1975: Entry into the Hospitality Sector - A 'Welcom' Move
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
'ITC-Welcomgroup Hotel Chola' (now renamed My Fortune, Chennai). The objective of ITC's entry into the hotels business
was rooted in the concept of creating value for the nation. ITC chose the Hotels business for its potential to earn high levels of
foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels
business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India under
four brands namely, ITC Hotels - Luxury Collection, WelcomHotels, Fortune Hotels and WelcomHeritage.
ITC Hotels recently took its first step toward international expansion with an upcoming super premium luxury hotel in
Colombo, Sri Lanka. In addition, ITC Hotels also recently tied up with RP Group Hotels & Resorts to manage 5 hotels in
Dubai and India under ITC Hotels' 5-star 'WelcomHotel' brand and the mid-market to upscale 'Fortune' brand.
1979: Paperboards & Specialty Papers - Development of a Backward Area
In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited. Bhadrachalam
Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam
Paperboards Division. In November 2002, this division merged with the Company's Tribeni Tissues Division to form the
Paperboards & Specialty Papers Division. ITC's paperboards' technology, productivity, quality and manufacturing processes are
comparable to the best in the world. It has also made an immense contribution to the development of Sarapaka, an economically
backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community
development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near
Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve customer service with reduced lead time and a wider product
range.
1985: Nepal Subsidiary - First Steps beyond National Borders
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. In August 2002, Surya Tobacco
became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). In 2004, the
company diversified into manufacturing and exports of garments.
1990: Paperboards & Specialty Papers - Consolidation and Expansion
In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to
the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To harness strategic and operational
synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers
Division in November 2002.
Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division
for export of agri-commodities. The Division is today one of India's largest exporters. ITC's
unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in
Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers. Also, through the
'Choupal Pradarshan Khet' initiative, the agri services vertical has been focusing on improving
productivity of crops while deepening the relationship with the farming community.
CRISIS MET
FINANCIAL PERFORMANCE
Despite the very difficult external economic environment, your Company delivered another year of steady
performance. Gross Turnover for the year grew by 8.4% to Rs. 23143.53 crores. Net Turnover at Rs.
15388.11 crores grew by 10.3% driven by a robust 20% growth in the non-cigarette FMCG
businesses. The non-cigarette portfolio accounted for 51% of the Companys Net Turnover. EBIDTA grew
by 7.5 % to Rs. 5393.47 crores, while Post-tax profit at Rs. 3263.59 crores registered a growth of 4.6%.
Cash flows from Operations touched an all time high of Rs. 4706 crores.
Your Companys creation of national assets in agriculture, manufacturing and services has helped build a
secure future for the Company, its stakeholders and the nation. With your valued support, your Company
has invested in the businesses of the future based on strong capabilities in R&D, innovation and
technology. Strengthened by robust farmer relationships, world-class manufacturing practices, and a rich
lineage of branding, trade marketing and distribution, your Company is moving purposefully ahead to
continuously create superior value for all its stakeholders.
R&D
I am convinced that sustained competitiveness for the future requires a deeper focus on Research &
Development. In line with this belief, your Company has set up a dedicated state-of-the-art R&D Centre
in Hyderabad with a focus on agri-sciences. It will engage in several competency areas such as Plant
Breeding and Genetics, Agronomy, Microbiology, Molecular Biology and Silviculture.
New Paradigm of Competitiveness: Sustainable Agriculture & Rural Livelihoods
Indias rural sector is home to almost two-thirds of our population. The agricultural sector is the primary
source of livelihood for 52 % of Indias workforce. Yet, this sector contributes barely 17 % of the countrys
GDP. Fragmented and small sized land holdings, low productivity, inadequate infrastructure and poor last
mile connectivity create a vicious cycle of low incomes and low investments, aggravating the challenge of
rural poverty. Yields are woefully low, and despite possessing one of the largest tracts of arable land,
total agricultural output is far below potential. Even with such low productivity, wastages are rampant due
to inefficient infrastructure and weak market linkages.
It is obvious that by enhancing competitiveness of rural India, strong force multipliers can be unleashed to
significantly alter the economic landscape of the future. To my mind, the drivers of this change lie in the
following:
First, to increase productivity through sustainable agricultural practices. This will require
customised extension services to regenerate and enrich land fertility, enable better usage of
scarce water resources and adopt best practices in crop management. A new thrust in R&D for
development of agri-inputs, new varieties of seeds and climate resistant crops will secure
sustained competitiveness;
Third, to utilise surplus land, released as a result of higher productivity, for other diversified
economic activity utilising renewable raw materials. These include new opportunities for
creating sustainable livelihoods in value-chains related to Food, Fuel, Feed and Fibre as well as
in Cosmetic and Curative Lifestyle segments.
The focused efforts of the Government in building rural infrastructure and livelihoods through initiatives
such as the Bharat Nirman and NREGA hold the promise of rapid rural transformation. Improved
infrastructure and growing employment opportunities will progressively raise rural incomes and
purchasing power. Indeed, these are the new markets of tomorrow.
You will be happy to know that ITCs deep engagement in rural India, nurtured over several years
now, have built unique sources of competitive advantage for your Company. The enduring trust built
with rural communities has positioned your Company to take advantage of the opportunities inherent in
these growth markets.
CSR Policy
It is ITC's policy:
1. To direct ITC's CSR Programmes, inter alia, towards achieving one or more of the
following - enhancing environmental and natural capital; supporting rural development;
promoting education; providing preventive healthcare, providing sanitation and drinking
water; creating livelihoods for people, especially those from disadvantaged sections of
society, in rural and urban India; preserving and promoting sports;
Implementation
To implement the Company's CSR Programmes through Company personnel or through external
implementing agencies or through ITC Education Trust, ITC Rural Development Trust, ITC
Sangeet Research Academy, ITC Bhadrachalam Education Trust, Tribeni Tissues Education
Society (and other Trusts, Foundations and Section 8 companies that may be established by the
Company from time to time). In such cases, the Company will specify the CSR Programmes
which may be undertaken by those Trusts in accordance with their Objects and administrative
and accounting processes laid down in the respective Trust Deeds/ Memoranda and Articles of
Association.
Governance
1. Every year, the CSR and Sustainability Committee will place for the Board's approval, a
CSR Plan delineating the CSR Programmes to be carried out during the financial year
and the specified budgets thereof. The Board will consider and approve the CSR Plan
with any modification that may be deemed necessary.
2. The Corporate Management Committee (CMC) will assign the task of implementation of
the CSR Plan within specified budgets and timeframes to such persons or bodies as it
may deem fit.
3. The persons/bodies to which the implementation is assigned will carry out such CSR
Programmes as determined by the CMC within the specified budgets and timeframes and
report back to the CMC on the progress thereon at such frequency as the CMC may
direct.
4. The CMC shall review the implementation of the CSR Programmes once a quarter and
issue necessary directions from time to time to ensure orderly and efficient execution of
the CSR Programmes in accordance with this Policy.
5. Once every six months the CMC will provide a status update to the CSR and
Sustainability Committee on the progress of implementation of the approved CSR
Programmes carried out during the six month period. It shall be the responsibility of the
CSR and Sustainability Committee to review such reports and keep the Board apprised of
the status of implementation of the same.
6. At the end of every financial year, the CSR and Sustainability Committee will submit its
report to the Board.
CSR Expenditure
CSR expenditure will include all expenditure, direct and indirect, incurred by the Company on
CSR Programmes undertaken in accordance with the approved CSR Plan. Moreover, any surplus
arising from any CSR Programmes shall be used for CSR. Accordingly, any income arising from
CSR Programmes will be netted off from the CSR expenditure and such net amount will be
reported as CSR expenditure.
REFER SUSTAINABILITY REPORT 2014
CLIENTELE
A Customer Centric Approach
ITC's Agri Business Division continues to use innovation as its core strategy to retain its position
as the one-stop shop for sourcing agri-commodities from India. Besides setting benchmarks in
quality, reliability and value-added services, ITC is a trendsetter in customer care particularly in
commodity trading. Major customers include Cargill, Marubeni, Toepfer, among others, who
source agriculture commodities and food products from India. Customers can log onto
www.itcabd.com, and readily access information on crop production and forecast, market
updates, the latest shipment status and the prevailing foreign exchange rates.
Do basic googling of Cargill, Marubeni, Toepfer and prepare couple of sentences on each of
them.
ITC's Agri Business Division is the country's second largest exporter of agri-products. It
currently focuses on exports and domestic trading of:
Coffee
Customers
Name
Olam International
Food Grains
Singapore
COTACO
Feed Ingredients
Vietnam
Marubeni
Feed Ingredients
Japan
Bunge
Feed Ingredients
Foodgrains
Thailand
Foodgrains
Austria
Foodgrains
London
PT Jackson
Foodgrains
Indonesia
Foodgrains
Singapore
Nidera
Foodgrains
Switzerland
Feed Ingredients
UAE
Cargill International
Feed Ingredients
Feed Ingredients
Singapore
Toepfer International
Feed Ingredients
Singapore
Edible Nuts
USA
Edible Nuts
UK
Edible Nuts
Japan
Edible Nuts
Australia
Galdisa S.A
Edible Nuts
Mexico
JH Lutge Gmbh
Edible Nuts
Germany
Muffadlal Enterprises
Edible Nuts
Egypt
Nichiryo Limited
Edible Nuts
Japan
Edible Nuts
Taiwan
Edible Nuts
USA
Milan
Germany
USA
Holland Coffee BV
The Netherlands
Singapore
Russia
Fuga Ag
Switzerland
Aqua
Singapore
Mitsubishi
Feed Ingredients
Japan
Aqua
Japan
Toyo Marine
Aqua
Japan
Germany
NV Supremo SA
Italy
Germany
Lamco Spa
Italy
Louis Dreyfus
United Kingdom
Germany
Italy