ITC Limited

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ITC Limited
Type Public
Traded as BSE500875
NSEITC
BSE SENSEX Constituent
CNX Nifty Constituent
Industry Conglomerate
Predecessor(s) W.D. & H.O. Wills
Founded August 24, 1910[1][2]
(as Imperial Tobacco Company of India)
Headquarters Kolkata, West Bengal, India
Key people Y C Deveshwar, (Chairman)
Products Tobacco, Hotels, Paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, IT, branded apparel, personal care, stationery, safety matches and other FMCG products
Revenue Increase INR 45,102 Crores (US$ 8.31 billion) (2012-13)[3]
Operating income Increase INR 11,106 Crores (US$ 2.05 billion) (2012-13)[3]
Net income Increase INR 07,608 Crores (US$ 1.40 billion) (2012-13)[3]
Total assets Increase INR 35,353 Crores (US$ 6.51 billion) (Mar 2013)[3]
Total equity Increase INR 23,158 Crores (US$ 4.27 billion) (Mar 2013)[3]
Employees 25,959 (Mar 2013)[4]
Divisions ITC Infotech, Surya Nepal Pvt. Ltd.
Website www.itcportal.com

ITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal.[2] Its diversified business includes five segments: Fast Moving Consumer Goods (FMCG), Hotels, Paperboards, Paper & Packaging and Agri Business. [5] In 2012-13, ITC's annual turnover was US$ 8.31 billion[6] and at the end of the same year, its market capitalisation was US$ 45 billion.[4] It employs over 25,000 people[4] at more than 60 locations across India and is part of Forbes 2000 list. Company has been in scandals regarding funding of Political Parties to gain monopoly in Indian Cigarette market.

ITC claims that it is the only company in the world of comparable dimensions to be Carbon Positive, Water Positive and Solid Waste Recycling Positive.[6]
ITC Limited completed 100 years on 24 August 2010.[7][8][9][10]

History[edit]

Change in name: ITC was formed on 24 August 1910 under the name Imperial Tobacco Company of India Limited. Later the name was changed to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. Finally, the company changed its name to 'ITC Limited' on September 2001.[1]

The earlier decades of the company's activities centered around the tobacco industry. Since 1964 conclusive epidemiological evidence of the deadly effects of tobacco consumption has led to a sharp decline in official support for producers and manufacturers of tobacco, in spite of its large contribution to the agricultural, fiscal, manufacturing and exporting sectors of the economy.[11] Viewing the changes in the business dynamics in the tobacco industry, the company starting looking to other venues for earning revenue. In 1970s, it started to enter non-tobacco businesses and in the same period it started reducing the foreign equity holding in the company to 40%.[1]

In 1975, the company entered Hotel business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'.[2]
In 1979, ITC entered the Paperboard business by promoting ITC Bhadrachalam Paperboards Limited,[1] which today has become the market leader in India.[citation needed]
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepali and British joint venture. Since inception, its shares have been held by ITC, British American Tobacco and various independent shareholders in Nepal. In 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited.[1][2]
ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now operational in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh.[citation needed]
In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards. A line of premium range of notebooks under brand Paperkraft was launched in 2002. To reach a wider student population, a range of notebooks was launched under brand Classmate in 2003. “Classmate” over the years has grown to become India’s largest notebook brand. Years 2007 - 2009 saw the launch of Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the “Classmate” brand. In 2008, ITC repositioned the business as the Education and Stationery Products Business and launched India's first environment friendly premium business paper under the “Paperkraft” brand. “Paperkraft” offers a diverse portfolio in the premium executive stationery and office consumables segment.[2]
ITC also entered the Lifestyle Retailing business with the Wills Sport range of casual wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003).[2]
In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in IT and IT-enabled services area.[2]
ITC's foray into the Foods business began in August 2001 with the introduction of Kitchens of India ready-to-eat Indian gourmet dishes.[12] In 2002, ITC entered the confectionery and staples segments with the launch of the brands Mint-o and Candyman confectionery and Aashirvaad atta (wheat flour).[2][13] 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007.[2]

In 2002, ITC entered Safety Matches business with acquisition of WIMCO Limited. ITC now markets safety matches brands like iKno, Mangaldeep and Aim.[2] ITC's entered Agarbattis (incense sticks) business in 2003.[2] ITC's popular agarbattis brands include Spriha and Mangaldeep.

ITC introduced Essenza Di Wills, a range of fragrances and bath & body care products for men and women in July 2005. The company launched 'Fiama Di Wills' range of Shampoos, Shower Gels and Soaps in 2007. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment in 2007 and Vivel De Wills & Vivel range of soaps and shampoos in 2008.[citation needed]

Products and Brands[edit]

Gold Flake cigarettes

Tobacco products[edit]

Cigarettes: In 2012-13, ITC earned a revenue of Rs. 27,136 crores from the business of Cigarettes (56% of total revenue). In the same year, this segment contributed to profits of Rs. 8,694 crores (82% of total profits).[3] ITC Ltd sells 80 percent of the cigarettes in the India, where 275 million people use tobacco products.[14]
Its major cigarette brands are W.D. & H.O. Wills, Gold Flake Kings, Gold Flake Premium,Gold Flake Super Star, Navy Cut, Insignia, India Kings, Classic (Verve, Menthol, Menthol Rush, Regular,Citric Twist, Mild & Ultra Mild), 555,Silk Cut, Scissors, Capstan, Berkeley, Bristol, Lucky Strike, Players, Flake and Duke & Royal.[15][16]

Other businesses[edit]

  • Foods: ITC is India's largest seller of branded foods with sales of over Rs. 4,600 crore in 2012-13.[17] It is present in 4 categories in Foods business: Staples, Snack Foods, Ready To Eat Foods and Confectionery.[18]

Its major food brands are Kitchens of India; Aashirvaad, Mint-o, Sunfeast biscuits, Candyman, Bingo! chips, Yippee! and Sunfeast Pasta.[18]

  • Lifestyle Apparel: Wills Lifestyle and John Players brands. Wills Lifestyle was accorded the ‘Superbrand’ status and John Players was included in the top 10 ‘Most Trusted Apparel Brands 2012’ by The Economic Times.[4]
  • Personal Care: (Fiama Di Wills, Vivel, Essenza Di Wills, Superia and Engage brands in perfumes, haircare and skincare)[19][20]
  • Stationery: Classmate, PaperKraft and Colour Crew brands.[21] Launched in 2003, Classmate became the largest notebook brand in India in 2007.[22][23]
  • Safety Matches and Agarbattis: Ship,[24] i Kno and Aim brands of matches;[25] Mangaldeep Incense Sticks (agarbattis).[26]
  • Hotels: ITC's hotels (under brands including WelcomHotel) have evolved into being India's second largest hotel chain with over 90 hotels throughout India.[27] ITC is also the exclusive franchisee in India of two brands owned by Sheraton International Inc.- The Luxury Collection and Sheraton which ITC uses in association with its own brands in the luxury 5 star segment. Brands in the hospitality sector owned and operated by its subsidiaries include Fortune Park Hotels and WelcomHeritage Hotels.[27]
  • Paperboard, Specialty Paper, Graphic and other Paper;
  • Packaging and Printing for diverse international and Indian clientele.
  • Infotech (through its fully owned subsidiary ITC Infotech India Limited which is a SEI CMM Level 5 company)

Shareholding and listings[edit]

ITC's equity shares are listed on Bombay Stock Exchange, National Stock Exchange of India and Calcutta Stock Exchange.[28][29] The company's Global Depository Receipts (GDRs) are listed on the Luxembourg Stock Exchange.[30]

Shareholders (as on 31-March-2013) Shareholding[4]
Foreign companies (mainly British American Tobacco Company) 30.54%
Foreign Institutional Investors (FII) 19.68%
Banks, Financial Institutions, Insurance Companies and Mutual Funds 33.44%
Bodies Corporate 04.91%
Public and Others 11.13%
GDRs 00.30%
Total 100.00%

Employees[edit]

As per the Annual report of the company, it had 25,960 employees as on 31 March 2013,[4] out of which 3,043 were women.[6] It spent Rs. 2,145 crores on Employee benefits during the FY 2012-13.[3] During the same year, its attrition rate was 12%.[6]
Its Chairman Y C Deveshwar has won renowned awards and recognitions including Padma Bhushan from Govt. of India[4][31][32] and 7th best performing CEO in the world by Harvard Business Review.[33]
Meera Shankar, Indian ambassador to USA between 2009 and 2011, joined the board of ITC Limited as the first woman director in its history.[34] She is an additional non-executive director of the company.[35]

Initiatives[edit]

ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the India's biggest foreign exchange earners (US $5.4 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach.[36]

The company places computers with Internet access in rural farming villages; the e-Choupals serve as both a social gathering place for exchange of information (choupal means gathering place in Hindi) and an e-commerce hub. What began as an effort to re-engineer the procurement process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India has also created a highly profitable distribution and product design channel for the company—an e-commerce platform that is also a low-cost fulfillment system focused on the needs of rural India. The e-Choupal system has also catalyzed rural transformation that is helping to alleviate rural isolation, create more transparency for farmers, and improve their productivity and incomes.[citation needed]

ITC e-choupal creatively leverages information technology to set up a meta-market in favour of India's small and poor farmers, who would otherwise continue to operate and transact in 'un-evolved' markets.

As of July 2010, services through 6500 Echoupal across 10 states, reach more than 4 million farmers in about 40,000 villages. Free access to Internet is also opening windows of rural India to the world at large.

ITC e-choupal is now being regarded as a reliable delivery mechanism for resource development initiatives. Its potential is being tested through pilot projects in healthcare, educational services, water management and cattle health management with the help of several service providers including non-governmental organizations. In 2008, this initiative was recognised in the list of "Innovations to make markets more inclusive for the poor" in World Development Report Sep-2008 by World Bank.[37]

  • Philanthropy:

Classmate notebooks were launched with the initiative of contributing 1 rupee towards the education of poor children,from every four notebooks it sold.

Classmate, has launched a programme called Classmate Ideas for India challenge. The programme would be a part of the company's centenary initiative. [38] The nation-wide programme would invite ideas of the youth, who have the potential to transform India. Classmate Ideas for India challenge plans to reach out to 25 lakh students across 30 cities, 500 schools and 200 colleges across the country.[39]

  • ITC Sangeet Research Academy: It is a Hindustani classical music academy established in 1977 and located in Kolkata.[40] Some noted musicians are associated with this academy.[41]

Awards and recognitions[edit]

  • ITC features on the Forbes Global 2000 rankings for 2012 at position 841.[5] In the same rankings, the company's market value placed it as the 184th largest company in the world.[5] Forbes has also included the company in Asia's Fab 50 Companies list.[42]
  • In 2013, ITC was ranked the third most admired company in India by Fortune.[43]
  • In 2011, all of ITC’s super premium luxury hotels were accorded LEED Platinum certification, making ITC Hotels the ‘Greenest Luxury Hotel Chain in the World’.[44][45]
  • In 2010, ITC was ranked 6th amongst global consumer goods companies in sustainable value creation during 2005-09, by Boston Consulting Group.[46]
  • It received the National Award for Excellence in Corporate Governance from the Institute of Company Secretaries of India in 2007.[1][47]
  • In 2006, ITC's e-Choupal program won the Stockholm Challenge Award 2006 in the Economic Development category. This program enables over 3.5 million farmers to access crop-specific and customised information in their native village habitat and language.[48][49]

See also[edit]

References[edit]

  1. ^ a b c d e f "Company History - ITC Ltd.". Economic Times. Retrieved 15 September 2013. 
  2. ^ a b c d e f g h i j k "History and Evolution". ITC Limited. Retrieved 14 September 2013. 
  3. ^ a b c d e f g "Consolidated Financial Report 2012-13". ITC Limited. 17 May 2013. Retrieved 15 September 2013. 
  4. ^ a b c d e f g "Annual Report 2012-13". ITC Limited. 17 May 2013. Retrieved 14 September 2013. 
  5. ^ a b c "ITC on Forbes Asia's Fab 50 companies". Forbes. 31 August 2013. Retrieved 14 September 2013. 
  6. ^ a b c d "Sustainability Report 2013". ITC Limited. Retrieved 15 September 2013. 
  7. ^ "ITC: Leading Multi-business conglomerate turns 100". Economic Times. 24 August 2010. Retrieved 15 September 2013. 
  8. ^ "ITC's 100 glorious years". rediff.com. 24 August 2010. Retrieved 15 September 2013. 
  9. ^ "Imperial touch". Business Today. 10 July 2011. Retrieved 15 September 2013. 
  10. ^ "100 Inspiring Years". ITC Limited. Retrieved 15 September 2013. 
  11. ^ "Tobacco". History.com. Retrieved 22 September 2013. 
  12. ^ "ITC ready-to-eat foods on shelves". The Hindu (Chennai, India). 29 August 2001. Retrieved 22 September 2013. 
  13. ^ "ITC launches atta brand". Economic Times. 7 Jun 2002. Retrieved 22 September 2013. 
  14. ^ "ITC on a health kick post global anti-smoking regulations". First Post. 6 September 2012. Retrieved 21 September 2013. 
  15. ^ "Cigarettes". ITC Limited. Retrieved 15 September 2013. 
  16. ^ "ITC hikes prices of select cigarette brands". Indian Express. 2 September 2013. Retrieved 15 September 2013. 
  17. ^ "ITC pips Hindustan Unilever to become India's leading branded food and beverages company". Economic Times. 22 May 2013. Retrieved 15 September 2013. 
  18. ^ a b "Foods". ITC Limited. Retrieved 15 September 2013. 
  19. ^ "ITC's Vivel brand expands its skin care portfolio". Economic Times. 11 Feb 2013. Retrieved 15 September 2013. 
  20. ^ "ITC Personal Care Products". ITC Limited. Retrieved 15 September 2013. 
  21. ^ "Education and Stationery". ITC Limited. Retrieved 15 September 2013. 
  22. ^ "How ITC is working its way down in FMCG markets?". Economic Times. 30 October 2011. Retrieved 15 September 2013. 
  23. ^ "ITC increases focus on Classmate". Business Standard. 7 July 2013. Retrieved 15 September 2013. 
  24. ^ "Swedish Match divests holding in Wimco to ITC subsidiary — To make open offer for 20 pc equity". The Hindu. 2 July 2005. Retrieved 15 September 2013. 
  25. ^ "Safety Matches". ITC Limited. Retrieved 15 September 2013. 
  26. ^ "Agarbattis". ITC Limited. Retrieved 15 September 2013. 
  27. ^ a b "ITC Hotels". ITC Limited. Retrieved 15 September 2013. 
  28. ^ "General Information". ITC. Retrieved 14 September 2013. 
  29. ^ "Listing Information - ITC". Economic Times. Retrieved 15 September 2013. 
  30. ^ "ITC GDR ne". Luxembourg Stock Exchange. Retrieved 14 September 2013. 
  31. ^ "Yogesh Chander Deveshwar". Wall Street Journal. Retrieved 15 September 2013. 
  32. ^ "Padma Bhushan for ITC chairman YC Deveshwar irks anti-tobacco activists". India Today. 27 January 2011. Retrieved 15 September 2013. 
  33. ^ "ITC chairman YC Deveshwar ranked seventh best performing CEO globally: Harvard Business Review". Economic Times. 23 December 2012. Retrieved 15 September 2013. 
  34. ^ "ITC inducts Meera Shankar in its board as the first women ever". The Times Of India. 4 August 2012. Retrieved 15 September 2013. 
  35. ^ "ITC Board of Directors". Retrieved 15 September 2013. 
  36. ^ "Our Profile". ITC. Retrieved 25 September 2013. 
  37. ^ "Human Development Insights". United Nations Development Programm. 15 September 2008. Retrieved 21 September 2013. 
  38. ^ "ITC: Leading Multi-business conglomerate turns 100". The Economic Times. 2010-08-24. 
  39. ^ "ITC launches Classmate Ideas challenge". Business Line. 2010-08-23. 
  40. ^ "ITC-SRA's Origin". itcsra.org. Retrieved 21 September 2013. 
  41. ^ "Visiting Researchers". itcsra.org. Retrieved 21 September 2013. 
  42. ^ "Asia's Fab 50 Companies". Forbes. 31 August 2013. Retrieved 14 September 2013. 
  43. ^ "TCS replaces Tata Steel as India's most admired company". Times of India. 9 July 2013. Retrieved 14 September 2013. 
  44. ^ "ITC secures LEED platinum rating for all its luxury hotels". Economic Times. 19 July 2011. Retrieved 15 September 2013. 
  45. ^ "ITC Hotels rated as 'greenest luxury hotel chain in the world'". Deccan Herald. 19 July 2011. Retrieved 15 September 2013. 
  46. ^ "ITC is world’s 6th largest value creator: BCG report". Financial Express. 22 September 2010. Retrieved 15 September 2013. 
  47. ^ "Major Awards Over the Years". ITC Limited. 17 May 2013. Retrieved 14 September 2013. 
  48. ^ "ITC e-Choupal wins Stockholm Challenge Award". The Hindu. 13 May 2006. Retrieved 15 September 2013. 
  49. ^ "...And ITC’s e-Choupal gets Stockholm Award". Indian Express. 13 May 2006. Retrieved 15 September 2013. 

External links[edit]