{a ee ee eee ~ HayGroup Hay Consultants Inia Private Limited Unit No. 17028, 178 Foor, Tower 3, Indiabulls Finance Centre, ‘Senapat Bapat Marg, Mumbai -400 013 tel +91 (22) 4348 088 fax +91 (22) 4348 0689 vhayaroup.conving ‘August 18, 2014 Dear Mr. Deveshwar, {tis our pleasure to congratulate you for ITC's welldeserved recognition as India’s Most Admired Company. The study for India’s Most Admired Companies, undertaken forthe third year, is conducted annually by Hay Group India in collaboration with FORTUNE Indi. The unique listing is prepared through peer ranking, wherein your respected peers have rated you on the number one spot in ‘inda’s Most ‘Admired Companies st Globally, Hay Group has collaborated with FORTUNE magazine annually since 1997, to identify and rank the World's Most Admired Companies and uncover the business practices that make these companies highly regarded and successful. Furthering this success, Hay Group India collaborates with FORTUNE India, to bring to you the ranking for India’s Most Admired Companies (IMAC). The IMAC study is conducted using a first-of-its-kind peer ranking methodology, where your own industry peers select India’s Most Admired Companies in 15 key industries. The evaluation criteria goes beyond financial soundness, to include holistic aspects such as corporate governance, endurance and social impact; adding to the uniqueness of ths initiative. We congratulate you on being identified as India’s Most Admired Company. We wish you well on this, journey of best practices, and acknowledge your organization as having attracted and retained top talent through your initiatives. Enclosed is a memento for the occasion, a token of our appreciation for the best practices your organization has instituted as one of India's Most Admired Companies. kind regards, Bethe bpm SRIDHAR GANESAN Country Head, Hay Group India Ura 4oDLz004PTe129714 Sa ELNINO REE ODIO ESTELLE SS NNRED ANIES FORTUNE INDIA'S THIRD ANNUAL RANKING OF CORPORATE INDIASPRINGS A FEW SURPRISES. AND WE TRY TO FIND IF ADMIRATION CAN INDEED BE QUANTIFIED. ByRAJIVBHUVA mustration by NILANJAN DAS “ WHAT'S A GOOD visual depiction of admiration, asks a colleague. Can we use a symbol for love, maybe? Or should wwe shaw a winner's podium? The resultant debate threw up few answers; it was easier to define what admiration is not, than to figure out what it is. Of course, this is because something like admiration cannot easily be quantified ‘The previous two India's Most Admired Companies rankings have shown that admiration often has little todo with bottom lines and P&Ls. (The classic example is that of Indian Oil, which consistently tops the Fortune India 500, but does not figure in the top 10 All Stars.) ‘This year, we've shown the correlation between value creation and admiration (see Admiration vs. Value on page 80). While there are a few value destroyers in the top 45, the overwhelming majority had either ereated value or main- tained it. That said, companies such as Hindustan Petroleum ‘and Vodafone India, which were value destroyers over a five year term, have been rated admirable by their peers. Equally, ‘companies such as Infosys, Accenture, Mondelez India Foods, (earlier Cadbury India), and Toyota Kirloskar to name but a fev, find no place in the All Star list this year. ‘They haven't done too badly; in fact, some may have performed better than the 45 on the lis. It's just that this year, their peers think that some companies lack what the French call je ne sais quoi, that certain composite of qualities that add up to admiration The list also sees the entry of 19 new companies, including. GME Infra, Idea Cellular, Abbott Pharma, Shapoorji Pallonji and BSES Rajdhani. Interestingly, none of the new entrants is, value destroyer overa 10-year periods; only GMR showed a FORTUNE INDIA 76THE TOP 10 oe 5 os 5 Se 0 oo m7 om Oo oy 0 fallnvaioe ovr vege term, ‘ae ereation apr th it eprngs some surprives in termsof the compeson ous the op fre Lat yer, two ofthe five were oT services compen: this yeas, consumer goods rms (FTC and Hindustan Unilever) rl, tnd has slipped to belo rank this was an ety portal this consumer gods bias makes sense since FMCG companies are trationally sen a defensive stocks “Look a the op 10 and there are three FMCG companies ane tvo above with he addition of Coea-Cola and ne consumer dunbls rm (Samsung Idia)and stil ony one TTeompany CFCS). leary, nds one edotsector | not as admired as it was even a year ago. At the same time, | there new kd on the lock in Cognizant debuts at 38. | "What bout the stars of Indian industry the pubic 8 ie 5 i HOW BRAGGING RIGHTS HAVE SHIFTED EVERY YEAR... ED oo 5 iE 0 oo ics] ins a go a o sector? They are prominent in the Fortune India 500, but seem alittle less visible on this list. “But,” says Ravi Jagannathan, co-director, Financial Institutions and Markets Researd Center at The Kellogg Schoo! of Management at Northwestern University; US, “within industries, those in the public sector tend to perform worse than their peers in the private sector, and that may be due to public sector enterprises having to meet, ‘other objectives” That seems to be borne out by the fact that public sector giants such as ONGC, NTPC, and SAIL, were ranked high in terms of corporate governance, endurance, and social value, and not so much on innovativeness. Clearly, there's no one easy way to define admiration, But afterall the explanations and the spreadsheets and the number-crunching, we realised one thing: that the | companies on and off our rankings are all stars FORTUNE INDIA, 738 -ADMIRATION VS. VALUE Mathematical analysis can be ruthless, especially when it clearly shows negligible correlation between admiration and wealth creation, These companies may be stars when it comes to being admired by their peers, but have they actually created value for their stakeholders? A look at how they stack up. By Rajiv Bhuva Graphic by Tanmoy Chakraborty Compu M-caP Aah) courany Beas p\|E fig mesa ” 3F | x g BY TEXT COLOR: yeas g E 3 Vue creator © SENSEX N-CAP CAGA (6) 2 4 = & = g ees ye (1609, BE a 2 | = = 5 Deore © — 5 years (10.58) pO 3B a = g: y 2. 14 Rank %\ 3 g ws 2014 Ron ION OTHER BOURSES... Technology Solutions 2 ey ae COCA-COLA INDIA PARENT: The Goca- (Cola Company EXCHANGENa. York Stock Exchange: SANSUNGINDIA. ELECTRONICS PARENT: Samsung Elsctranes Co EXCHANGE: Korea Stoo Exchange aa. BB siemens non mw GEINDIA PARENT: Gonoral Etseine Company EXCHANGE: Now York Stock Exehange ‘Source: Prowess, Thomson FeutorsDatasroar, MERCEDES-BENZ NDIA PARENT Diamler AG EXCHANGE: Frankurt Stock Bxerange 30.4 aaa _ ‘Forte inca Reser ‘VODAFONE INDIA PARENT Vodafone Group Pc EXCHANGE:London Stock Exchange 55 58 2.4AUTO COMPONENTS AUTOMOTIVE BANKING CAPITAL GOODS a 29 20 | warat : 20 | Ste Bank | 2 | ge arg Bosch Eh otinsa 7287 HE tras 82 SKF = Tata a = ici aos < Siemens aa India 83.92 EB Motors 075 BB bok = 2319 | 2 Apatio. 2 2) Mercadee 28 2! panko 2 aa Tyres 8321 EB benzindia 8018 EE Baroda 70:38 Bowe 733 9 Volkswagen pe axis a = Bhorat Heavy MAF 8319 EE india 7576 Bisa 371 GB stecticais?725 a 09 2) BMW "I 20 wee 2a on unming |e Ceat 8.80 EE ina 7653 EE bork 6370 BE india 7570 a a 2 Hero au x) pam 3 au 2 Hi tyre 7350 EB Wotocorp 7572 Bi ida” sa Eh Trermax 7421 JBM ag os Mahindra 2 = contralBank 24 liom 3 Group 7828 Mahindra 7552 BD otinaa “t839 Bias Lucas- an re Honda Motorey- = citibank as =u eoREnergy Ts 7250 Dh creindia 75.08 Eh india sass EE systems 7175, Whoots m3 24 Hyundai Motors. *! 2 Indian as 2 a India 78.44 EE intia 74898 EE bork a5 EE Finoiex 5375 pm AmaraRaja 2 2a Ashok a sr PunjabNational° oo Kioskar 2 HDD sotteres 75.2 BD tojona 2480 [oy BD brothers. 6373 oo Amtek ws po General Motor + canara za co Kitoskar ot HE ao 7208 BD ing 447 sank sz03 BO Engines saz 2 |S 09 238 Toyota Kioskar | 2° zu 22s =| Sumion 2a BD siichakra 64 BD moire 7418 BB weteank sas BB Enersy 5533 5 Ford 3 Crompton 22 BB nia ra0 BD sreaves 6220 «Baal aa HD nto east Renauitissan 2 TB Atiance 6308FORTUNE INDIA'S THIRD ANNUAL RANKING OF INDIA'S MOST ADMIRED COMPANIES ACROSS 15 SECTORS. ab CEMENT = Howe us a utraTech 2 ED cement ease = Ambuia ae EB coment 77.75 0 | Pigm Py Eh coment 7 Ramco an Cements 7572 Bite aie Corporation 73, Shree ‘an Coment 7183, fs KLakshmi 22 Cement 7118, pe Dalia ae Cement 70 2 india ar Coments 6882 Binani ao Cement 6960 aK ‘3 Cement 6828 oct an India 6822 Ohettind = Cement 62 ‘CONSUMER DURABLES eS wy Samsungindia 2 Floctronics 352 eB Sony India 80.78 nq Haves 223 India 8012 Lg Electronics India 7687 Godrojand 2 Boyco 7613 Videocon = Industries 74.94 Nokia a3 India 7455 Prhiips ae India 73.0 Blue 203 Star 7873 38 8 @ BD vores 2222 | pa m9 TD Brcticals 72 3K Whiipoo! 2 BB naa eas ENGG & CONSTRUCTION Lat 848 ‘Shapoo Palloji 81.75 2 GMR infrastruc ‘ure 80.05 = Doth Metro Rail Eh corporation 73 ey Ftgineers: Bias 2 Pun Uoyd = 7850 a = oianc na a structure 77.69 oRamky le ED strctire 7283 Escorts 77 Lanco Infratech 76.22 dani Port 70.1 Hindustan Con- struction 88.87 FORTUNE INDIA 83 Unilever 85.24 Mm 8334 Coca-Cola India 83.03 Asian Paints 82 Nosté India 6130, Colgate Palmolive 80.32 Mondelez India Foods* 7950 Pepsico India 7.59 Reckitt Benckiser 78.20 Britannia Industries 7227 bso 8 sininda 7657 Marico 7828 Dabur India 7430 GlaxoSmith- Kine 7357 Godrej Consumer Products 7087 ‘aa 9 209 i : :IRON & STEEL, METALS — Steet Authority. 2 TB ofindia ance indeloo ae EA industries 2856 | Tata on EE stoi 7574 HD taco 7578 ee Jindal steel 2 ‘Power 7563 2 | Cool Et India 7560 a | gw a Eh sei 422 2 | Essar ane BD ster 7479 jeu Rashtriya spat EE tiga 7275 | pe tindustan | an ass | Noe 7121 es Monnetispat BD eery “714 = sindal Fs Bosw aes mae) I, Mes eal a an ED Cooniznt 82 es Microsoft 2" Eh inca 785 Be nm 28 tt 2 Bh nda 75 | ciecoSyetoms. | 22 B naa Eh irosys 7550 zu 209 Wipro 7588 Genpact 7288 fi Bh ender 20 oracle aa India 7271 2: oan a |: BB vccenture 7113 TBI savient 7054 HD etindia 6927 pos HoLTechno: 2 TB iosies 8885 Finance 8519 24 | Tota EE capita: e457 Bh Sa es Bore nm a a 80.83 os 4 LT Housing 79.89 Muthoot Finance 7881 UC Housing Finance 7858 ‘Manappuram Finance 76 NABARD 7583 Sundaram TB Finance 7231 FORTUNE INDIA 84 = as OL & Gas = Bw ra a a EE onc 7759 Bien nu = ol ze BD ine sn 2 | BAL mu India 7582 a ee Ralance ED industries 7:50 = | owed on Videsh 7475 am me BPindia 7457 so indraprastha 2° Bou 7% a | Esewr ae Do aa cairn aa BB ina a3 =| petonet a Bic zn Bowe anTHe secTOR ust | EVALUATION CRITERIA ‘CORPORATE GOVERNANCE: Theertentiowfichthe comparyersuresconstent management, cohesive patie, accountabity,t, PHARMA & HEALTHCARE. POWER TELECOM DURANCE Ceseney nite company'soral pert mF iicrcessmnoaryater leanpare 2 | ppone za au aa 20 | Vodafone | 8 be TB ospitas 2487 npc 8950. Le ‘SOOIALIMPACT The Gears of impactbecompay’s | 2M | At 2 2 tata xa fan a business acheshaveon : tresncetyandenveermentt Inia 82.28 Power 7826 [2 a) tesciy ie Gsk a gy 8865 Rodhani = ie ea 2B owvesrcnrvae re Pharma 8219 Power 78 EE cetuar 7525 stergh ofacompanys ineres operate cas fos, 221 | Cada Heath Siifraeavems, 20 TataCommuni. 22 (| andoveralesetmrageret care 75 rant 8 cations 7377 none edare ‘Thevaleandquaty o sevice SunPhorma == pseSYamuna 7 anetonmse 21° ME Srupnaucscstonl te Industries 61.55 EE Power 7386 EB ications 73.20 ‘company tots customers, on ni an au an OVATVENESS. Tho com Cipla TB ecu 7268 Th Aircel 7228 saryseityouncerstrs ts ronment and outers an ter breekrough routs and (onan) an 2 pd am 204 | TataToe |B ee eri labs 8087 Power 7173 services 7007 LEADERSMPQUALTE: Tee 2 be a a ‘za au au afoompaence,marageal ss, ” mpc 7142 Mm 624 andbusressund ED reseys 7004 oe : eam 20 | rama aoe am "za 24 | pharatsancher | Eh beattncarezas EE cesc saze Nigam 8587 “TALENT DEVELOPMENT The i company sabi goom a a 2 Guerat State | 22 au a indwaas whagoontooxay BD un 03 Elect 6.5? Doms i533 leaden postorsintefim dined. eo Sanofi eB suzion ae Tulip a PLOYEEENPOWERUENT Tho TO intia 7287 Power 6? HB telecom 244 etento ich the companys employees aealoved Wake a zu 2a a ae ecionsrelaed ther alptruPone Biocon 722 roemisn Uninor B54 crane eng a Bh rememes Bh time romans my cenmerk pe Culerttia 405A. FOoTPRNE Tho oe BD Pharma 7605 BBL Vikas higam sz facompany spresoneinthe mantel at alos eres 2 | porns 29 ‘hemagntueotbusnessac- HD fama 7596 ties cvertyresmaces, and inoeasererenveard profi FORTUNE INDIA, 85 -STARS : iN FORTUNE INDIA'S THIRD ANNUAL RANKING OF THE MOST ADMIRED IN INDIA INC,, IN COLLABORATION a Va GROUP, SAYS HELLO TO. “TOPPERS—ITCANDL&I— ISWELLAS DEBUTANTS SUCH AS BSES RAJDHANI POWER AND ‘SHAPOORJI PALLONUI. a o cy 10 mene eustar Pees Fcc EE Automotve 5 sweemwormon [aad Tes es cocacoamon — fed Pros Prey FEE Asonne one oacas er Consumer Dual i vero movosorrmon wo a O8 Gas Ce o2ncn0 ome _o oc o1ces oe crn FORTUNE INDIA 86 om vos | FEET oom. | um | rue | 9B | aoe le a2 am | ir MOE Sn ONE | SG aro A Fos oo 2 7 ee me mM a a tw Engpaconsmucon soot 2 oe 4m wi nw 560, ” 6 B z 6 a coy 6 Ey 2B “a 6 3 0 o 9 6 0 " 0 6 ‘ on “ 6 6 3 7 9 " 0 0 6 wie e) sn) wl ele lal sl el mi7fs[e[7]/7[e[7/wiw|w Consumer Durables 348 6 7 6 6 » 6 “ 6 6 2 fam te felelslelelelsloles mal7fi[7{[a]elz2|s|e1|s)e)|e co 4 5 5 E 5 8 9 7 7 9 10 m|7f[efef|wolelse|wlelala “ “a 6 5 5 8 8 1 7 5 0 a wm] sfef«l[elfsalel[sls|[s]a 8 7 6 . 8 6 1 1 " a 3 miaftalels|sirisial7ia oe | 4 4 8 6 3 3 3 8 6 4 Auoratie mi 7i/s 5) si|wls tls elePharma HealthCare Pharma Heath care (GSK PHARNNA ett) Dt on See Metals a Power Vooarowewon — Aaa oun INFRASTRUCTURE STEEL AUTHORITY OF coy ron & Ste, Metals Engg & Construction awousncenent ag Dd Power FM Capt! Goods erry apt Goods ery eo Cement 18 Cepia Goods Pe TMM Consume Drebes font’ ‘Ato Components ae fo Ea xr SL Sonkina Con mes urrarecHcenet con) ‘Auto Components wercawan = Se ro eo ‘Auto Components PoE IER Eo 8 constuction Peau Le iron Steel Metals 20 1% 1% ve 2 10 m 100 aie al ieee) riatala sis 6 4 eisaf|s|a of«flales 2;2}fafa alalala Bie eee eee ee eee eae i ae les idee eevee o}afaja afafale afolafa 2f[alf2|a rielala eee eee rfolala 10 0 2 af2taulea afala]o 10 oo o 1 2 af2|o)|2 oo oe oo) ot + 0 0 8 FORTUNE INDIA 8 7 = 20 5 a fa 6 4 s | 5 fa 24 5 5 202 sia 1/2 204 ana 1 [4 rfa2 ala 23 ej 3 fe 1/2 1 fe, t[4 ele 2|o ora ofa o 2 ajaFORTUNE INDIA COLLABORATED with Hay Group for | ‘The steps followed were as below: this third edition ofthe definitive annual report card on com porate reputation. The exercise involved 15 industry sectors, | 4 Each respondent was asked to select the top 15 compa chosen on the basis of size, contribution to GDP, growth rate, | nies from the lst of 45. roar competition, aminimam number ofsetoralplay~_ They then ranked each ofthe 15 companies, ening cs, and national presence. Textiles & garments was dropped | that all unique ranks were given from the lst because of inadequate participation. “A Subsequently, they were asked to rank the top three com- Ta phase I, 523 companies—including Indian subsidiar- | panies on each ofthe 10 parameters. ies of foreign companies—were long-listed. Subsidiaries of ‘conglomerates were treated as separate entities within their ‘Three filters were used to compile the final ranking: respective sectors. This year, the survey stressed intenstyin | Number of endorsements: Endorsements indicate the the engagement withthe respondents and the respondents | numberof imes a particular company has been picked by a svho demonstrated low intensity were eliminated. We also | respondent. Only those companies that received a minimum used validator questions and statistical validation, which | 39% endorsements were considered. gave us 443 responses. (A Familiarity index: A level of nteruction/knowledge ‘Te respondent designations in phase Ivere as follows: question on four-point sale was introduced. Only those board member/chairman/managing director (7%), CEO/ex- companies that hada score of 2 and above were considered. ecutive director (10%), president/senir vee president/vice 1 Weighted average score: This was calculated across all 10 president (19%), CXO/head ofthe department (16%), and parameters, i and 2 above were met general manager (54%). Respondents evaluated every company on 10 parameters A otal score was cleulated based on: (see page 85). (A Number ofendorsements and rank given within ‘At the end of phase I, the top three companies from each _ that endorsement. sector were identified, yielding a total of 45 companies, (A Weight based on rank given by respondent, Rank 1 was | which progressed to phase II. given a weight of 15, rank 2 was given a weight of 14, and Tnphase I, these 45 companies were rated onthe same 0.0n. So, f company X was endorsed thee times—twice a 10 parameters by 84 respondents from their peer universe, rank, and once at rank 15—the total score was 2°15-+1°1. different from the respondents in phase 1. The designations included board memberchairman/managing director (4%), Phase 1 culminated in the Al Stars ranking (CkOjexecutve director (12%), president/senior vice presi- | dent/vice present (13%), CXO head ofthe department Note: (20%), and general manager (51% *Barlier Cadbury India 4 Barlier Vodafone Essar FORTUNE INDIA, 88 =