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Organization

Structure

ByAparna S

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Introduction

ITC Limited is one of India's premier private

sector companies

ITC's annual turnover stands at $7 billion and

market capitalization of over $45 billion.

It employs over 29,000 people at more than 60

locations across India.

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Growth and Diversification

1910- Started with cigarette and leaf businesses

1925- Backward integration of Packaging andPrinting Business

1975- Launched Hotel Business

1979- Entered paperboard business

1985- set up Surya Nepal Private Limited which

diversified into garment manufacturing and export.

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Growth and diversification contd

1990- set up Agri Business Division

2000- started the e-Choupal initiative

2000- Entered Lifestyle Retailing Business

2000- Started ITC Infotech India Limited

2001- Entered into Food Business

2002- Launched Paperkraft

2003- Launched Classmate

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Growth and diversification contd

2002- Started Safety Matches Business

2003- Launched Mangaldeep Agarbattis

2005- Entered the Personal Care Business

2010- Launched hand rolled cigar Armenteros

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Organization Structure

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Organizational Structure

Multidivisional Structure

Each division is given its own set of support functions

Each division is its own profit center

Advantages:

Increased Organizational Effectiveness

Clear definition of roles and responsibilities.

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Board Committees

Audit Committee

Compensation Committee

Investor Services Committee

Nominations Committee Sustainability Committee

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Divisions/SBUs

Indian Tobacco Division

Foods Division

Lifestyle Retailing Business Division

Personal Care Products SBU

Education and Stationery Products SBU

Matches and Agarbatti SBU

Hotels Division

Paperboards and Specialty Papers Division

Packaging and Printing SBU

Agri Business Division

Agri Business Division- ILTD

Information Technology Division

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ITC Corporate Governance

Framework

Board of

directors

Corporate management

committee

Divisional / SBU managementcommittee

Executive chairman,Executive directors,Non-executivedirectors,Independent directors

Composition

Executivedirectors,Senior managers

Divisional / SBUhead,Div. sr. manager

Roles

Strategicsupervision

Strategic management

Executivemanagement

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Core Competencies

Unmatched Distribution Reach

Superior Brand Building Capabilities

Effective Supply Chain Management

Acknowledged service skills in hoteliering

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1950 1954 1970 1974 1976 1985 1993 2001 2005 2010 2011

ITC SHARE HOLDING STRUCTURE

Foreign company holding Indian Institutional holding

Foreign Institutional holding

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Bottom Line Performance 2003-2012

0

1000

2000

3000

4000

5000

6000

7000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Profit After Tax

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ITC-Valuation

Segment Segment valuation (in Rs. Cr)

Cigarettes 103,704

Hotels 2679

Agri business 7271

Paper & packaging 11480

Other FMCG - 1913

Cash 3444

Holding discount 5%

Total valuation 120,541

Source: Morgan Stanley, February 2010

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Sustainability

E-Choupal

- serve 40,000 villages and 4 million farmers

-worlds largest rural digital infrastructure created by a private

enterprise.

Social and farm forestry

- covered 100,000 hectares of land

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Other Social Initiatives Integrated watershed development program

- covered 50,000 hectares of land

Micro credit program

- 20,000 women employed through micro enterprises and self

employment

Primary education initiatives in rural areas

-benefited over 200,000 children

Livestock up gradation initiatives

- covered 400,000 animals resulted in improved milk yields

Ecology oriented initiatives

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ITC is the only company in the world ofcomparable dimensions to be carbon positive,water positive and solid waste recycling positive.

Exemplar of triple bottom line performance.

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Segment 2012

Revenue

2011

Revenue

Increase in

Sales

revenue (%)

2012

Profit

2011

Profit

Increase

in Profit

(%)

FMCG-Cigarettes 23232.32 20721.27 12.12 7191.24 6000.92 19.84

FMCG-Others 5563.72 4504.03 23.53 (215.08) (331.52) -35.12

Hotels 1074.78 1066.47 .78 294.29 283.30 3.53

Agri Business 5695.31 4747.99 19.95 643.15 566.29 13.57

Paperboards, Paper

and Packaging

4129.79 3666.88 12.62 936.78 819.24 14.35

Others 1020.87 777.71 31.27 93.64 57.65 62.42

Total 40716.79 35484.35 14.75 8944.02 7395.88 20.93

Revenue and profits of different

segments

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Analysis

80.4% of the total segment profit is contributed by

FMCG-cigarettes. FMCG- others has not reached break-even yet.

But losses have come down by 35.12%

23.53% increase in sales revenue from FMCG-

others.

20.93% increase in total segment profit.

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0

5000

10000

15000

20000

25000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Segment Revenue FMCG-Cigarettes

Segment Revenue

CAGR=10.15%

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THANK YOU.