ITC MANAGEMENT

Corporate Management Committee

members

Y C DeveshwarChairman

Nakul AnandExecutive Director

P V DhobaleExecutive Director

K N GrantExecutive Director

Anand NayakHuman Resources

T V RamaswamyR&D, Projects, EH&S

S SivakumarAgri & IT Businesses

K S SureshLegal

Rajiv TandonFinance

B B ChatterjeeSecretarial

 

anand nayak

Anand Nayak, Head of Human Resource Development for ITC, has been with the Company for 36 years. He has handled senior HR assignments in the Company's various Divisions and has been Head of Human Resource Development since 1996. He is also responsible for overall supervision of ITC's Social Development Initiatives. A post-graduate in Personnel Management and Industrial Relations from XLRI, Jamshedpur, Nayak has spent his entire professional career with ITC. He is also a Director on the Board of ITC Infotech.

 

t v ramaswamy

T V Ramaswamy heads Research & Development for the Company. He is also responsible for overall supervision of Environment, Health and Safety. In addition, he is in charge of the Central Projects Organisation.

Prior to this Ramaswamy was the Chief Operating Officer of the Cigarette Brands and Supply Chain of the Tobacco Division. After

completing his graduation in Engineering from the then Madras University and post graduation in Management from Jamnalal Bajaj Institute of Management Studies, Ramaswamy joined ITC as a Management Pupil in 1974 in the Technical Function. During his tenure in the Company, he has handled a wide range of responsibilities in Operations across India and has also managed the Tobacco Division's R&D from 1992 to 1996. Thereafter, he was the Managing Director of Surya Tobacco Co. Pvt Ltd (now known as Surya Nepal Pvt Ltd) till 2001.

He is the Chairman of ITC Filtrona Ltd. He is also a Trustee of ITC's Superannuation Funds.

 

 

k s suresh

K S Suresh is General Counsel of ITC. A lawyer by qualification and training, he joined the Company in 1990 after being in private

s sivakum

S Sivakumar is the Divisional Chief Executive of the Agri Business Division. He is also the Chairman of Technico Agri Sciences Limited and Vice Chairman of ITC Infotech India Limited and its subsidiaries in the UK and USA.

Topper of the Class of 1983 from the Institute of Rural Management ar

Anand, (IRMA), Sivakumar served a farmers' cooperative for six years before joining ITC in 1989.

Sivakumar has conceptualised the path-breaking ITC e-Choupal model, and is spearheading its roll out across rural India.

Sivakumar is a Director on the Board of Indo-US Knowledge Initiative in Agriculture. He is a Member of the Private Sector Committee of the Consultative Group on International Agricultural Research (CGIAR), and a Member of Research Advisory Committee of India’s National Academy of Agricultural Research Management (NAARM). He is also an active member of the management committees of various industry bodies and several taskforces of Government of India.

practice, and took charge of the Legal function in 1998. With wide ranging expertise and experience in corporate laws as well as litigation, he has guided many important legal issues to successful resolution for the Company.

 

 

b b chatterjee

B B Chatterjee, Executive Vice President & Company Secretary, joined ITC in May, 1983. He is a Chartered Accountant, Company Secretary and a Law Graduate.

Chatterjee is on the Boards of various ITC subsidiaries including ITC Infotech India Ltd. and its subsidiaries in the UK and the USA.

Chatterjee besides being on the Executive Committee of Indian Chamber of Commerce and the Chamber Committee of The Bengal Chamber of Commerce & Industry (BCCI) is also Chairman of the Company Affairs Sub Committee of BCCI. He has also served on the Central Council and is on the Secretarial Standards Board of the Institute of Company Secretaries of India.

rajiv tandon

Rajiv Tandon, Chief Financial Officer, is a Fellow Member of The Institute of Chartered Accountants of India with over 30 years of experience. He has held various positions in ITC including Executive Vice President - Finance & MIS of the Tobacco Division, Executive Vice President - Corporate Finance, Finance Advisor and member of the Management Committee of Agri Business and Tobacco Division.

He is a Director on the board of ITC Infotech India Ltd. and its subsidiaries in the UK and the USA. He is also on the Board of several other subsidiaries/group companies of ITC.

He has held several important positions in various industry bodies including Chairman of the Expert Committee on Banking and Finance (Indian Chamber of Commerce), Member -Taxation and Company Law Committee (Confederation of Indian Industry) and is currently Member - Managing Committee (Bengal Chamber of Commerce & Industry).

name of Chairman, CEO, CFO, Management Team, Board of Directors and Key Executives of ITC Ltd.

ManagementName DesignationAngara Venkata Girija Kumar Non Executive DirectorAnil Baijal Non Executive DirectorAnthony Ruys Non Executive DirectorBalakrishnan Vijayaraghavan Non Executive DirectorBasudeb Sen Non Executive Director

Biswa Behari ChatterjeeExecutive Vice President & Co. Secretary

Biswa Behari Chatterjee SecretaryDinesh Kumar Mehrotra Non Executive DirectorHugo Geoffrey Powell Non Executive DirectorKrishnamoorthy Vaidyanath Non Executive DirectorKurush Noshir Grant Executive DirectorNakul Anand Executive DirectorPillappakkam Bahukutumbi Ramanujam

Non Executive Director

Pradeep Vasant Dhobale Executive DirectorRajiv Tandon Chief Financial OfficerSerajul Haq Khan Non Executive DirectorShilabhadra Banerjee Non Executive DirectorSunil Behari Mathur Non Executive DirectorYogesh Chander Deveshwar CEOYogesh Chander Deveshwar Chairman / Chair Person

QUALITY MANAGEMENT

Quality is a prerequisite for successful market access and necessary in order to increase revenues from export, but meeting technical requirements in the international marketplace is a challenge for many exporters. According to ITC research, approximately 70% of the problems faced by exporters due to non-tariff measures are in the area of technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS).

Exporters in developing countries experience four main challenges to overcoming technical barriers to trade and in accessing new markets:

Obtaining information about the mandatory technical requirements and voluntary standards applicable in the importing country

Adapting their products to meet these requirements Demonstrating that the products meet the relevant

requirements Obtaining the necessary support at each step from the

national quality infrastructure, which in many developing countries is not adequate

ITC’s Export Quality Management (EQM) Programme has developed an integrated approach to overcoming these challenges with a strategy that includes providing training and advisory services to enterprises, conformity assessment bodies and policy-makers.

INDIAIn India, ITC works with exporters, policy makers and trade support i

STRENGTHS

ITC leveraged it traditional businesses to developnew brands for new segments.

For example-ITC used its experience of transporting and distributing tobacco products toremote and distant parts of India to the advantageof its FMCG products.

ITC master chefs from its hotel chain are oftenasked to develop new food concepts for its FMCGbusiness.

ITC is a diversified company trading in a numberof business sectors including cigarettes, hotels,paper, agriculture, packaged foods andconfectionary, branded apparel, personal care,greetings cards, Information Technology, safety matches, incense sticks and stationery.

nstitutions (TSIs) alike. On this page you will find various resources of use to all three of these, such as links to online information sources, external sources dedicated to providing you with export related printed information and details to put you in touch with Trade Support Institutions  all focusing on areas related to India

Weaknesses

The company's original business was traded intobacco. ITC stands for Imperial Tobacco Company of India Limited.

It is interesting that a business that is now so involvedin branding continues to use its original name,despite the negative connection of tobacco with poorhealth and premature death.

To fund its cash guzzling FMCG start-up, the company is still dependent upon its tobacco revenues.Cigarettes account for 47 per cent of the company'sturnover, and that in itself is responsible for 80% of itsprofits.

So there is an argument that ITC's move into FMCG(Fast Moving Consumer Goods) is being subsidized by its tobacco operations. Its Gold Flake tobacco brand isthe largest FMCG brand in India -and this singlebrand alone hold 70% of the tobacco market.

TYPES OF STRATEGIE

INTEGRATION STRATEGIES

Backward integration:In this strategy organisationseeksOwnership & increased control onCompany s suppliers.Eg

ITC'sPackaging & PrintingBusinesswas set up in 1925 as astrategic backward integrationfor ITC's Cigarettes business

IntensiveStrategies

Inthisstrategybusinesshavetoputintensiveeffortstoimproveitscompetitiveposition

Market Penetration

: The organization tries tocapture market share in the existing product and aimsat expanding its business at a rate higher than theindustry growth.

Eg: ITC has captured substantial market share incigarettes

DiversificationStrategy

In the early 70 there were trend to acqurieandmanage diversedand unrelated bunisessso has togenerate better profitability.

ConglomerateDiversification:

 W 

henanorganizationadoptsastrategywhichrequirestakingupthoseactivitieswhichareunrelatedtotheexistingbusinessdefinitionofoneormoreofitsbusiness,eitherintermsoftheirrespectivecustomergroups,customerfunctionsoralternativetechnologies

Eg:

ITC, a cigarette company diversifying into thehotel industry,biscuits,paperand packaging,edibleoil etc.

GENERIC STRATEGIES

Generic strategies were used initially in the early1980s, and seem to be even more popular today.They outline the three main strategic options open toorganization that wish to achieve a sustainablecompetitive advantage.

FOCUS STRATEGIES:

ITC¶s paperboards and packaging focuses onpackaging for industrial/commercial purpose.

ITC¶s classmate notebook¶s and stationery productsfocuses on addressing the needs of children.

ITC has a three-tier management structure.

At the top are Chairman and Board of Directors, who are responsible for the strategicsupervision of ITC, its wholly owned subsidiaries and their wholly owned subsidiaries.

The ITC board is a balanced board comprising Executive and Non-Executive Directors.The Board ensures that the Company has clear goals relating to shareholder value and itsgrowth. It sets strategic goals and seeks accountability for their fulfillment.

There are four  board committees, namely, the Audit Committee, the Nominations Committee, theCompensation Committee and the Investor Services Committee.

At the second level is the Corporate Management Committee, which is responsible for the strategic management of the company's businesses within Board-approveddirection/framework.

It comprises all the Executive Directors and three or four key senior members of management.Third level consists of divisional CEOs of each business assisted by their owndivisional management committees.

Corporate Functions of the Executive ManagementTeam includes Planning and Treasury, Accounting, Legal, Secretarial, Human Resources,Communications, Internal Audit and Information Technology.

The company’s organizational structure and governance processes are designed tosupport effective management of multiple businesses while retaining focus on each of them.

Chairmans and board of directors

Corporate management comitte

Divisional ceo’s

" This three-tier governance structure ensures that: For and on behalf of the shareholders the company believes in incorporating

strategicgovernance in its work culture so as to ensure that despite being free from involvement in

the task of strategic management of the Company, it can be conducted by the Board withobjectivity, thereby sharpening and ensuring accountability of management;With mundane tasks of everyday executive management being delegated the managementremains focused on issues of immediate importance;The Executive management of the individual businesses that are free of handling strategicmanagement responsibilities of ITC as a whole is then able to channelize their energiesand time in enhancing the effectiveness and overall growth of their individual units.Corporate Governance as defined by ITC is a systemic process by whichcompanies are directed and controlled to enhance their wealth-generating capacity.

Acompany employs vast sums of societal resources during this process of wealthgeneration. ITC is of the firm belief that the governance process being followed shouldensure that these resources are used optimally to meet the aspirations of its stakeholdersand society.

This is further reflected in the deep commitment of the company tocontribute to the ‘Triple Bottom Line’, which is the development of the nation’seconomic, ecological and social resources.

The company believes in empowering the executive management. Butcorporate governance ensures a system of checks and balances to ensure that these powers that are bestowed upon the executive management are used in a responsiblemanner so as to meet shareholder and societal expectations. The core strengths of ITC'sgovernance philosophy are trusteeship, transparency, empowerment and accountability,control and ethical corporate citizenship.

The practice of each of these creates the rightcorporate culture that fulfils the true purpose of Corporate Governance

Overall, the structure of ITC has high complexity because of horizontal differentiationwithin the organization. The most visible

evidence is that of specialization anddepartmentation. Complexity also increases because of spatial differentiation.The ITC Code of Conduct, as adopted by the Board of Directors, isapplicable to all Directors, senior management and employees of the Company. ThisCode is derived from three interlinked fundamental principles, viz. good corporategovernance, good corporate citizenship and exemplary personal conduct. The Code covers ITC's commitment to sustainable development, concern for occupational health,safety and environment, a gender friendly workplace, transparency and auditability, legalcompliance, and the philosophy of leading by personal example. Since non-adherence tothe code is brought to the attention of the immediate reporting authority, formalization isalso there in ITC. Decision-making is decentralized, as the company believes in givingexecutive freedom to the management to drive the enterprise forward without unduerestraints but this freedom of management should be exercised within a framework of effective accountability

DESIGNLooking at the structure and culture of ITC, we can say that its design is based more or less on the

Divisional Structure

ITC has a diversified presence in different industriesand each of its businesses act as an autonomous unit which are coordinated by the toplevel, i.e. the board and corporate management committee. The divisional managers areresponsible for performance and hold complete strategic and operating decision-makingauthority. The top management provides support services to the divisions. It acts as anexternal overseer, evaluating and controlling performance. Hence the top management isfree from being concerned with the day-to-day operating details so they can pay attentionto the long term.

Big picture, strategic decision making is done at the top level

ITC’S NEW CHALLENGES:This food industry is the industry with very less profit margins. So low operation cost isthe key. Also, Indian middle class is price sensitive. In this area international, nationaland also regional competition is very tough. With that wheat, petrol and labor cost isincreasing day by day. Different types of restrictions imposed by the government are also playing a vital role in reducing profit margins. For example, exporting non-vegetarianfoods out of India is restricted. To cover this up, ITC is trying to reduce cost of its biscuits by acquiring mass production of wheat directly from farmers through its E-chaupal initiatives. Also in this way ITC is able to reduce the price of its staples. As far asConfectionary market is concerned, ITC is looking to launch its brand of chocolate incollaboration with an American company. After analyzing the food sector, one can saythat it is one of the toughest market to compete in as all the market giants are alreadythere.GROWTH AND INVESTMENT PLANS:This food sector is the most promising field and has already overtaken IT andPHARMACEUTICALS Sector of India. Even Indian Government is looking to developthis sector. That’s the reason central Government has already passed several projects for

food parks. In this way FDI in this sector is possible. Also government in its 2006 budgethas reduced custom duty from 16% to 8% on packaged food and also excises duty oninstant food mixes. This will help ITC to be competitive in the market.

Recently ITC hasstarted exporting packaged food from its Bangalore plant. It is also planning to open onemore new plant in Calcutta for Indian market. They are looking to add several products intheir RTE list which will be exported as well. Also in late 2007 ITC has acquired oneAustralian Plant and seed technology industry. Through this they will provide highlyvaluable seeds and other solutions to farmers in India, which ultimately will increase the productivity and cost effectiveness for their staples and biscuits business.Its turnover in the foods business was around Rs. 8 billion in 2005-06 which further increased to Rs. 10.2 billion in year 2006-2007.ITC has decided to make an investment of 300 crores over a period of 5 years. ITC Foodshas also decided not to make heavy investments in manufacturing unless volumes pick up. As of today ITC has invested 20 crores in R & D and planning to invest further 15crores to produce new products in different categories.Thus looking at all the strategy of ITC future investment and planning. The futureinvestment plan is as follows

CONFECTIONERYConfectionary market in India is about Rs.2500 crore. It is loosely divided into sevencategories:1.Hard boi led candies2 . T o f f i e s3 . E c l a i r s4 . C h e w i n g g u m5 . B u b b l e g u m6 . M i n t s7 . l o z e n g e s ITC has currently in market with its two brands “Mint-o”and “Candyman

”. ITC’sMint-O fresh secured a 17% share of Indian cough lozenges market ahead of former leader Perfetti which only achieved 14.3% with chloromint. The Indian giant marked theconfectionary sector in 2002 and has only two brands “mint-o fresh” and “Candyman”.But in overall confectionary market they are lagging behind having just 3% market shareas compared to market leader Perfetti with more than 37% market and providing larger number of brands

AlpenliebeAlpenliebeCreamfillsAlpenliebeLollipopBig BabolCenter FreshCenter FruitCenter Shock Chatar Patar Chlor-mintChocotellaCofitosFruittellaHappydent WhiteProtex HappydentMarbelsMentosChocoliebe

CandymanMinto

. Kit Kat

. Kit Kat Lite

. Milky Bar 

. Munch

. Milk Chocolate. Fun Bar . Polo. Polo Power mint. Munch Pop Choc. Éclairs

BubbalooDairymilk Eclairs%Star GemsPerk Halls

BISCUIT

Indian biscuit market is estimated to be around 5000 crore. Biscuit industry in India in theorganized sector produces around 60% of the total production, the balance 40% beingcontributed by the unorganized bakeries. ITC with its premium product, SUNFEAST, isacquiring a big share of market. Within few years, they are able to get 12% share of themarket

BRITANIA ITC PARLE PRIYAGOLD

Tiger Nutrichoice  Good Day,50 50,TreatPure Magic,Milk BikisGood Morning.

MarieDream creamMilky MagicFit kitChoco NutButter Nu

Parle-gKrackJack MonacoKreamsHide and Seek Milk Shakti

Butter BiteClassic CreamButter LiteBig BossMarie LiteMagic Gold

SNACKS:Snacks industry overviewSnacks industry in India is worth 1800 Crores of Rs. and growing at 10% is one of thelargest markets in the world, out of which potato chips holds the major market share of around 85%.

PRODUCT PRICE(ITC LMTD.C)

PRODUCT PRICE(FRUTO LAY)

PRODUCT PRICE(HALIDRIMS)

Bingo

Rs. 5 Rs. 10 Rs. 20

LAYSRs. 5Rs. 10Rs. 20Lehar NamkeenRs. 5Rs. 20KurkureRs. 5Rs. 10Rs. 20

NAMKEENRs. 5Rs. 10Rs. 20

Corporate Strategies

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

ITC - Business Portfolio

ITC

FMCG: Cigarett

esOther FMCG

Hotels & IT

Agri Business

Leaf Tobacco

Agri Commoditi

es

Paperboard

Paper &Packagi

ng

Reasons :

• Government Pressure to reduce holdings of MNC’s.

• Regular increases in excise duty on cigarettes.

• Dependence on the single product (cigarette and tobacco business)

Diversification :

• Setting up a marine products export division in 1971 .

• Company's name was changed to ITC Ltd. (ITC) in 1974 .

• ITC reorganized itself and emerged as a new organization divided along product lines.

• In 1975, ITC set up its first hotel in Chennai .

• The company diversified into the textile industry & Paperboards in 1977.

• IBD starts e-choupal for the Indian formers:

– Over 38000 villages linked through around 6400 e-Choupals

– Servicing over 3.5 million farmers

– Formers sell their products directly to the company

– 12 ‘Choupal Saagars’ operational; 8 more to be launched

– shortly (40 nos. over the next 18 months)