Company Background - ITC

ITC Ltd. a leading FMCG Cigarette major is one of the most valuable companies of India. Rated among the World's Best Big Companies by Forbes magazine. Eventhough ITC is renowned for its Cigarette business it also has business interests in Hotels; Paperboards, Paper & Packaging; agri exports and some other FMCG products like branded packaged foods, safety matches, Incense Sticks and Greeting Cards etc. Being the pioneer of manufacture of cigarettes in India, ITC maintains its leadship positionsince 1910. ITC has diversified its brands across products categories. Its successful brands include Gold Flake, Wills, Classic, Bristol and Scissors. It also sells two luxury filter brands of its parent company Benson & Hedges and 555.

ITC was incorporated on August 24, 1910 under the name of `Imperial Tobacco Company of India Limited'. Its 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, 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. The Company's ownership progressivelyIndianised, and the name of the Company was changed to I.T.C. Limited in 1974.

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, 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'. 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 65 owned and managed properties spread across India. It also has a marketing and reservation arrangement with the Sheraton Corporation, the reputed international hotel chain.

In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. The Company's 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 1985, ITC set Surya Tobacco Co. in Nepal as a joint venture with the reputed Soaltee group. In 1990, ITC acquired Tribeni Tissues Limited, a speciality paper manufacturing company and a major supplier of tissue paper to the cigarette industry. Also in 1990, leveraging its agri-sourcing competency, ITC set up the International Business Division (IBD) for export of agri-commodities. The Division is today one of India's largest exporters.

Recently, ITC's Packaging & Printing business has launched a line of high quality greeting cards under the brand name `Expressions'. ITC has also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women. The company has recently forayed into lifestyle Retailing business with its launch of 'Wills' range of casual and formal wear products. It has also spun off its Information Technology business into a wholly owned subsidiary to moreaggressively pursue emerging opportunities. ITC is one of the largest exporters of Indian agri-commodities.

ITC Bhadrachalam Paper Boards, a subsidiary company was merged with ITC in the year 2002. The shareholders of ITCPBL were allotted one equity share of ITC Ltd for every sixteen held. The company has decided to amalgamate ITC Hotels Ltd & Ansal Hotels Ltd with itself.As per the scheme of amalgamation,i)the shareholders of ITCHL will receive Three Equity Shares of Rs.10/- each of ITC Ltd for every Twenty Five Equity Shares of Rs.10/- each held, ii)the shareholders of Ansal Hotels Ltd will get One Equity Share of Rs.10/- each of ITC Ltd for every One Hundred Fifty Equity Shares of Rs.10/- each held by them. This amalgamation has come into effect from 1st April 2004.

During 2004-05, the company commissioned its second property 'ITC Grand Central' in Mumbai. The company has proposed hotels at Chennai, Bangalore and Hyderabad.

The company expanded the installed capacity of Cigarettes and Paperboards & Paper during the year 2004-05 by 7329 Million Nos and 75000 Tonnes and with this expansion, the total installed capacity of Cigarettes and Paperboards & Paper increased to 94597 Million Nos & 352500 Tonnes respectively.

In 2005,the company was awarded the ISO 9001:2000 standard By M/s. Det Norske Veritas as a recognition of its quality products and processes. The company's units at Munger and Tiruvottiyur are certified to ISO 9000,14000 and 18000. The company has also won three India stars, three Asia Stars and one World star Award for innovative packaging.

In 2005-06, the company acquired Wimco Ltd through its one of the subsidiary company, Russell Credit Ltd. This acquisition is expected to further consolidate the market standing of the company's matches business through synergy benefits. The Installed capacity of Cigarettes and Printing & Packaging including Flexibles expanded 4752 Million Nos and 9928 Tonnes during the year, with this expansion the total installed capacity of Cigarettes and Printing & Packaging including Flexibles increased to 99,349 Million Nos & 47,837 Tonnes.