ITC Corporate Presentation

ITC LimitedOne of Indias Most Admired and Valuable Companies

2A Profile

Indias most Admired and Valuable company

- Market Capitalisation: over US$ 45 Billion

A USD 8 Billion enterprise by Revenue

- ~54% of Net Revenue from non-Cigarette segments

Leading Fast Moving Consumer Goods (FMCG) marketer in India

- Established several world-class brands in the last 10 years

10 year Value addition ~ Rs. 1.9 lakh crore (US$ 39 billion) with ~75% accruing to theExchequer

- Among the top tax payers in the nation (Private sector)

- Excise payments represent ~7% of Indias total Excise collection

Employs over 30,000 people directly; supports livelihoods of ~6 million people

An global exemplar in sustainable business practices

- Only Company in the world of comparable dimensions to have achieved the globalenvironmental distinction of being Carbon positive (9th Year), Water positive (12th Year) andSolid waste recycling positive (7th Year)

3ITC Performance Track Record

Sensex (CAGR 95-96 to 13-14) : 11.1%

Rs. cr.

1995-96 2013-1418-yr Cagr

95-96 to 13-14

Net Revenue 2,536 32,883 15.3%

PBDIT 584 13,562 19.1%

PBIT 536 12,662 19.2%

PBT 452 12,659 20.3%

PAT 261 8,785 21.6%

Capital Employed 1,886 27,626 16.1%

ROCE % 28.4 45.8

Market Capitalisation 5,571 280708 24.3%

Total Shareholder Returns % 25.9

Market Cap and TSR based on FY-end prices

4 Consistent performance over 18 year, 10 year, 5 year and 3 year horizons

In terms of Revenue, Profits, TSR Vs. Sensex

Consistency of Performance

95-96 to

13-14

03-04 to

13-14

08-09 to

13-14

10-11 to

13-14

18 years 10 years 5 years 3 years

NTO 15.3% 17.7% 16.1% 15.8%

PAT 21.6% 18.6% 21.9% 20.8%

TSR 25.9% 28.7% 33.7% 26.4%

Sensex 11.1% 14.9% 18.2% 4.8%

CAGR

TSR and Sensex returns based on Mar-end of each FY

5ITCs rankingAmongst all listed private sector cos.

PBT: No. 6

PAT: No. 7

Market Capitalisation: No. 3

Note: Based on Published Results for Q1 FY15, Market Capitalisation based on 30th Sep 2014

6ITC is the only Indian Company to be ranked

amongst the Top 10 global FMCG companies in

value creation during the period 2009-13

(Boston Consulting)

Also ranked amongst the Top 10 global FMCG companies by Boston Consulting Group in terms of value creation in the years 2009, 2010, 2011 and 2012.

The only Indian company to feature consistently amongst the Top 10 global FMCG companies

7 ITC ranked as the most admired company in India in 2014 (Fortune-Hay Groupsurvey)

One of the foremost in the private sector in terms of :

Sustained value creation (BT-Stern Stewart survey)

Operating profits

Cash Profits

ITC was ranked 3rd among 40 leading companies in the Nielsen CorporateImage Monitor 2013-14, and amongst the top 5 most admired companies inIndia. Also a Company most active in CSR for the third year in a row.

Only Indian FMCG Company to feature in Forbes 2000 List A comprehensive ranking of worlds biggest companies measured by a

composite of sales, profits, assets & market value

One of Indias most valuable and admired companies

8Awards & Accolades (1)

Harvard Business Review rankedITC Chairman Y C Deveshwar asthe 7th Best Performing CEO inthe World

ITC conferredthe prestigiousWorldBusiness andDevelopmentAward 2012at the Rio+20UN Summit forits Social andFarm ForestryInitiatives

Chairman Y CDeveshwar wasconferred thePadma Bhushan bythe Government ofIndia (2011)

ITC Grand Chola,the worlds largestLEED Platinumrated hotel in theNew Constructioncategory, launchedin September 2012

9Awards & Accolades (2)

Businessworld FICCI CSR award in Large Enterprise category

Best Overall CorporateSocial ResponsibilityPerformance : Instituteof Public Enterprise

AIM Asian CSR Award by the Asian Forum on Corporate Social Responsibility

Rainforest Allianceawarded ITC'sBhadrachalam Unit,the ForestStewardshipCouncil ForestManagementcertification

ITC Hotelsawarded theMost TrustedHotel brand inthe PublicChoice Honourscategory at theTimes TravelHonours

10

Accolades & Awards (3)

e-Choupal initiative wins global recognition: World Development Report 2008 published by World

Bank

Stockholm Challenge Award 2006 in the EconomicDevelopment category which recognises initiatives thatleverage Information Technology to improve livingconditions and foster economic growth in all parts of theworld.

First Indian Company and second in the world to win theDevelopment Gateway Award 2005 for its trail-blazing e-Choupal initiative

Corporate Social Responsibility Award from The Energyand Resources Institute (TERI)

World Business Award 2004: International Chamber ofCommerce & the HRH Prince of Wales & InternationalBusiness forum

Harvard University case study

Applauded by the then President of India Dr APJ Kalam inhis special address during the national symposium tocommemorate 60th year of Independence

11

ITCs Vision Statement

12

ITCs Vision

Make a significant and growing contribution towards :

mitigating societal challenges

enhancing shareholder rewards

By

creating multiple drivers of growth while sustaining leadership in

tobacco, and

focusing on Triple Bottom Line Performance

Enlarge contribution to the Nations

- Financial capital

- Environmental capital

- Social capital

13

Key Corporate Strategies

Focus on the chosen business portfolio

FMCG; Hotels; Paperboards, Paper & Packaging; Agri Business, Information

Technology

Blend diverse core competencies residing in various businesses to enhance

the competitive power of the portfolio

Position each business to attain leadership on the strength of world class

standards in quality and costs

Craft appropriate strategy of organisation and governance process to :

Enable focus on each business and

Harness diversity of portfolio to create unique sources of competitive advantage

14

Strategy of Organisation

Strategic Supervision

Board of Directors

Corporate Management Committee

Strategic Management

Divisional Management Committees

Executive Management

Enabling Focus

Harnessing Diversity

15

ITC Business Portfolio

FMCG

Paperboards, Paper & Packaging

Hotels Agri BusinessInformation Technology

Cigarettes Personal CareFoods Lifestyle Retailing

Education & Stationery Safety Matches & Incense Sticks

16

ITCs Cigarettes Business

Market leadership

Leadership across all segments - geographic & price

Extensive FMCG distribution network

Direct servicing of 1,00,000 markets & 2 million retail

outlets

State-of-the-art technology and world class products

17

Cigarette Industry in India

Legal cigarettes account for less than 12% of tobacco consumed in India due

to prolonged punitive taxation

48% of adult Indian males consume tobacco. Only 10% of adult Indian males

smoke cigarettes as compared to 16% who smoke biris and 33% who use

smokeless tobacco (Source: Global Adult Tobacco Survey India 2010)

Annual per capita adult cigarette consumption in India is appx. one ninth of

world average

18

Cigarette Industry in India

Cigarettes are taxed over 47 times as compared to other tobacco products

Legal Cigarettes

12%

Other Tobacco Products

88%

Cigarettes87%

Other Tobacco Products

13%

Consumption Share Tax Revenue Share

19

Per Capita Consumption of Tobacco in India (gms per year)

Source:World Cigarettes ERC Statistics, Tob Board & Industry Estimates gms/Yr

Per Capita consumption is ~60% of World Average

China USA Pakistan Nepal India World

11451256

438 461 468

743

Per Capita Cigarette Consumption per annum

Source: The Tobacco Atlas - 4th Edition (American Cancer Society), 2012

Russian Federation Japan China USA Pakistan Nepal Bangladesh India

2786

18411711

1028

468 420

154 96

No. of cigarettes per capita per annum

Although India accounts for 17% of world population, its share of world cigarette consumption is just 1.8%

Per Capita consumption in India ~11% of World average

21

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

5631013

1704

25113014

3642

4482

5545

7012

8122

Rs. crs

Rapid scale up of FMCG businesses

22

Creating world-class brands for Indian Consumers

23

Branded Packaged Foods Portfolio

Biscuits, Staples, Snacks, Noodles & Pasta, Confectionery & Ready to Eat

24

Branded Packaged Foods: Some recent launches

Branded Packaged Foods records further improvement in market standing during the quarter

25

Personal Care Products

Portfolio approach straddling all consumer segments with 4 umbrella brands

Essenza Di Wills

Fiama Di Wills

Vivel

Superia

Complemented by Engage brand in the deodorants

segment

Products continue to receive encouraging consumer response; Engage deos well

received by its target consumers

Laboratoire Naturel A state-of-the-art consumer and product interaction

centre leveraged to launch unique and differentiated products

26

Personal Care: Some recent launches

27

Education & Stationery Products Business

Leverages print and paper know-how to address suitable opportunities in

the stationery market.

Industry growth driven by increasing literacy and enhanced scale of

government and public-private initiatives in education

The Business continues to consolidate its market standing

Classmate : Market leader in Notebooks segment

28

Lifestyle Retailing

Slowdown in discretionary consumption expenditure continues to impact the

branded apparel industry

Upmarket product range available in exclusive Wills Lifestyle stores (98) across 40

cities and more than 700 shop-in-shops in leading departmental stores and multi-

brand outlets.

Strong distribution network in place for the mid-market brand John Players

availability in more than 400 Exclusive Branded outlets, 1600 multi branded

outlets and departmental stores

29

ITC Hotels

No. 2 in Size

No. 1 in Profitability

30

Hotels & Tourism industry

Foreign Tourist Arrivals improves in Q2 @ 13% Vs. 10% in Q1 and 5% in FY14

Foreign Tourist Arrivals into India @ ~6.8 million remains far behind China (~55.7

million) [Source: UNWTO Tourism Highlights 2014 edition]

Going forward, as economic condition and infrastructure improve, leisure tourismand business related travel is also projected to grow faster

o Foreign Tourist Arrivals into India is projected at ~11 million by 2021

Current Room inventory ~210,000 rooms of which 52,000 rooms are in theLuxury and Upper Upscale segment

India needs an additional ~60,000 rooms in Luxury and Upscale Segments inthe next 5 years to service projected tourist arrivals

31

The Chain: 98 properties across 70 locations

4 Brands ITC Hotels, WelcomHotel, Fortune & WelcomHeritage

20 Five-Star Deluxe/ Five-Star Properties with over 4500 rooms

42 Fortune Hotels with over 3500 rooms

36 WelcomHeritage Properties with over 850 rooms

Industry impacted by weak pricing scenario due to the excessive room inventory and

sluggish economic conditions

Asset-right growth strategy total number of rooms under management contract at1150.

ITC Grand Bharat, Manesar, a 104 all suite resort opened on 14th November 2014

Projects underway at Kolkata and Hyderabad.

ITC Hotels

Responsible Luxury ethos weaved into the Brand Identity

ITC Hotels: Worlds Greenest Luxury Hotel Chain

All ITC Luxury Hotels LEED Platinum certified

33

Paperboards & Packaging Business

No. 1 in Size

No. 1 in Profitability

No. 1 in Environmental Performance

34

Indian Paperboard market

Annual paperboard demand over 2 million tonnes

Low per capita usage of paper at around 9 kgs p.a. (world average over 55 kgs p.a.)

Indian paperboard market growing at 6% p.a.

Value-added Paperboards- the fastest growing segment (12% p.a.)in India driven by :

Increasing demand for branded packaged products

Rising Income table and growing consumer base

Increasing proliferation of organised retail

35

Market leader in growth segment Value-Added Paperboards

World-class contemporary technology Ozone bleached Pulp Mill fully operational one of its kind in Asia meeting world-class

environmental standards Fully integrated with in-house pulping capacity at ~3 lakh MT

Internationally competitive quality and cost

Social farm forestry in mill command area to improve access to cost effective fibre &to attain self-sufficiency Biotech research based high yielding clones effectiveness tested in approx. 181,800

hectares

Newly commissioned 1 lakh MT per annum Paperboard machine running well

ITCs packaging SBU - Indias largest converter of Paperboard into high quality printedpackaging Provides superior packaging solutions to the cigarettes and new FMCG businesses Leading supplier to Indian FMCG industry Fully integrated packaging unit at Haridwar operationalised and running well

ITCs Paperboards, Paper & Packaging businesses

36

Agri Business

No. 1 in Leaf Tobacco

No. 2 in Agri commodities

Pioneer in rural transformation

37

Indian Leaf Tobacco industry

India the second largest producer of tobacco

However, Indias share is only at 8% of world tobacco trade

ITC Indias largest buyer, processor, consumer & exporter of cigarettetobaccos 5th largest leaf tobacco exporter in the world

Pioneering cultivation of flavourful Flue-cured and superior Burleytobaccos in India

Robust growth in exports in recent years with improvement in realizations

38

ITCs Agri Commodity Business

Distinctive sourcing capability for ITCs Foods businesses

Farm linkages in 17 States covering Wheat, Soya, Potato, Coffee etc.

Unique Customer Relationship Management programme for commodity customersin both domestic and international markets

Leveraging Information Technology for the transformational e-Choupal initiative

Rural Indias largest Internet-based intervention

Over 35000 villages linked through around 6100 e-Choupals servicing around 4million farmers

e-Choupal: Strategic Thrust Procurement: cost & quality optimisation

strategic sourcing support to the Foods business

cost-effective sourcing for exports/domestic external business

Rural retail

24 Choupal Saagars operational

39

ITC - Key Financials 2013/14

Rs. Cr.

2013-14 2012-13 Goly %

Gross Turnover 46713 41810 11.7

Net Turnover 32883 29606 11.1

PBDIT 13562 11566 17.3

PBIT 12662 10771 17.6

PBT 12659 10684 18.5

PAT 8785 7418 18.4

40

Segment Revenue - 2013/14

Rs. Cr.

2013-14 2012-13 %

Segment Revenue (Net)

a) FMCG - Cigarettes 15456 13970 10.6

- Others 8099 6983 16.0

Total FMCG 23555 20953 12.4

b) Hotels 1133 1074 5.5

c) Agri Business 7752 7201 7.7

d) Paperboards, Paper & Packaging 4861 4237 14.7

Total 37301 33464 11.5

Less : Inter segment revenue 4418 3859 14.5

Net sales / income from operations 32883 29606 11.1

Full YearGOLY(%)

41

Segment Results - 2013/14

Rs. Cr.

2013-14 2012-13

Segment Results


- Liab. no longer reqd. written 158 0

FMCG - Cigarettes 10016 8326 20.3

- Others 22 (81)

Total FMCG 10038 8245 21.7

b) Hotels 140 138 1.5


d) Paperboards, Paper & Packaging 892 964 (7.4)

Total 11905 10078 18.1

Less: i) Finance Costs 38 86 (56.4)

Liab. no longer reqd. written back (35) 0

Finance Costs 3 86 (96.6)

ii) Other Unallocable Exp/(Inc.) - Net (757) (693) 9.3

Profit Before Tax 12659 10684 18.5

Full YearGOLY(%)

42

Segment Capital Employed - 2013/14

Rs. Cr.

2013-14 2012-13

Capital Employed


- Others 3384 2532 33.6

Total FMCG 9089 7485 21.4

b) Hotels 3625 3460 4.8



Total Segment Capital Employed 20086 17160 17.1

Full YearGOLY(%)

43

PBT Growth (Underlying) +17.8%

PAT Growth (Underlying) +15.6%

ITC - Key Financials Q2 2014/15

Rs. Cr.

Q2 14/15

Actual

Q2 13/14

ActualGoly %

Net Revenue 8930 7776 14.8

PBDIT 3845 3422 12.4

PBIT 3602 3201 12.5

PBT 3583 3234 10.8

PAT 2425 2231 8.7

Note: Underlying profits are calculated after eliminating the favourable impact of 193 cr. a/c reversal of provision relating to Karnataka VAT in Q2 FY14.

44

Segment Revenue Q2 2014/15

` Crs.

Q12014-15 2014-15 2013-14


4201 a) FMCG - Cigarettes 4251 3724 14.2

1935 - Others 2196 1962 11.9

6136 Total FMCG 6447 5686 13.4

249 b) Hotels 262 247 5.9

3296 c) Agri Business 2059 1772 16.1

1288 d) Paperboards, Paper & Packaging 1284 1179 8.9

10969 Total 10051 8884 13.1

1804 Less : Inter segment revenue 1121 1108 1.1

9164 Net sales / income from operations 8930 7776 14.8

GOLY(%)Q2

Rs. Cr.

45

Segment Results Q2 2014/15

` Crs.

Q1

2014-15 2014-15 2013-14

Segment Results


0 - Liab. no longer reqd. written back 0 158

2722 FMCG - Cigarettes 2882 2570 12.2

(16) - Others (10) (13) 18.8

2706 Total FMCG 2872 2557 12.3

(12) b) Hotels (10) 9

202 c) Agri Business 298 285 4.8


3171 Total 3403 3071 10.8

15 Less: i) Finance Costs 18 2

0 Liab. no longer reqd. written back 0 (35)

15 Finance Costs 18 (33)

(109) ii) Other Unallocable Exp/(Inc.) - Net (199) (130)

3266 Profit Before Tax 3583 3234 10.8

GOLY(%)Q2

Rs. Cr.

46

Segment Revenue H1 2014/15

` Crs.

2014-15 2013-14



- Others 4131 3707 11.4

Total FMCG 12583 10968 14.7

b) Hotels 510 497 2.7



Total 21020 17768 18.3

Less : Inter segment revenue 2925 2654 10.2

Net sales / income from operations 18095 15114 19.7

H1GOLY(%)

Rs. Cr.

47

Segment Results H1 2014/15

` Crs.

2014-15 2013-14

Segment Results


- Liab. no longer reqd. written back 0 158


- Others (26) (32) 18.1

Total FMCG 5578 4780 16.7

b) Hotels (22) 18



Total 6574 5754 14.3

Less: i) Finance Costs 34 19

Liab. no longer reqd. written back 0 (35)

Less: i) Finance Costs 34 (16)

ii) Other Unallocable Exp/(Inc.) - Net (308) (227)

Profit Before Tax 6849 5996 14.2

H1GOLY(%)

Rs. Cr.

On a Underlying basis: Segment Profits Growth +17.5%, PBT Growth +18.0%

48

Segment Capital Employed Q2 2014/15

` Crs.

Q1

2014-15 2014-15 2013-14

Capital Employed


3942 - Others 3963 3162 25.3

9029 Total FMCG 9625 7826 23.0

3648 b) Hotels 3706 3514 5.5

2299 c) Agri Business 1678 1120 49.8


20431 Total Segment Capital Employed 20531 17529 17.1

Q2GOLY(%)

Rs. Cr.

49

ITCs Economic Contribution to the Nation

10 year Value addition ~ Rs. 1.9 lakh crore (US$ 39 billion)

~75% of value addition accrued to the Exchequer

Among the top tax payers in the nation (Private sector)

Excise payments represent ~ 7% of Indias total Excise collection

Foreign exchange earnings in the last 10 years: US$ 6 bln

Of which agri exports constituted ~60%

50

Social Performance

Direct employment ITC Group : 30,000

Supported creation of 6 million sustainable livelihoods

e-choupal: worlds largest rural digital infrastructure serving around 4million farmers

Social and Farm forestry initiative has greened nearly 181,800hectares & provided over 73 million person-days of employmentamong tribals & marginal farmers

Significant thrust on social sector investments Natural resource management Sustainable livelihoods Community development programmes in the economic vicinity of

operating locations

51

Environmental Performance

Carbon positive enterprise 9 years in a row Sequestering nearly twice the amount of CO2 that the

Company emits

Water positive - 12 years in a row Creating twice the rainwater harvesting potential than

ITCs net water consumption

Solid waste recycling positive 7 years in a row

Over 38% of total energy consumed is fromrenewable sources

Only Company in the world of comparable dimensions to have achieved the global environmental distinction of being Carbon positive, Water positive and Solid

waste recycling positive

52

Forward-looking Statements

Statements in this presentation describing the Companys objectives, future prospects, estimates, expectations etc. may be forward looking statements within the meaning

of applicable securities laws and regulations. Investors are cautioned that forward looking statements are based on certain assumptions of future events over which the

Company exercises no control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new

information, future events, or otherwise. Therefore there can be no guarantee as to their accuracy. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that may be

projected or implied by these forward looking statements. Such risks and uncertainties include, but are not limited to: growth, competition, acquisitions, domestic and

international economic conditions affecting demand, supply and price conditions in the various businesses in the Companys portfolio, changes in Government

regulations, tax regimes and other statutes, and the ability to attract and retain high quality human resource.

ITC Corporate Presentation

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