Sustainability Report 2010

Economic Performance

•  ITC's Triple Bottom Line

ITC delivered yet another year of impressive performance with a healthy topline growth and high quality earnings, reflecting the robustness of its corporate strategy of creating multiple drivers of growth.

This performance is stellar when viewed against the backdrop of the extremely challenging business context in which this was achieved, namely the unprecedented increase in excise duties on non-filter cigarettes in the preceding year, the arbitrary increases in VAT on cigarettes, the steep decline in hotel revenues as a consequence of the Mumbai terrorist attack and the global economic slowdown, the incubation costs incurred by the new FMCG businesses, the impact of the significant investments made in augmenting distribution infrastructure and the gestation costs of the large investments in the hotels business.

Gross Turnover for the year grew by 13.5% to Rs.26260 crores. Net Turnover at Rs. 18153 crores grew by 16.3% primarily driven by a 20.9% growth in the non-cigarette FMCG businesses, a 19.8% growth in the Cigarettes business and a 17.4% growth in the Paperboards, Paper & Packaging segment. Pre-tax profits increased by 24.7% to Rs.6015 crores while Post-tax profits at Rs.4061 crores registered a growth of 24.4%. Earnings Per Share for the year stands at Rs.10.73 (previous year Rs.8.66). Cash flows from Operations stood at Rs.6620 crores during the year, compared to Rs.4682 crores in the previous year.

ITC has completed 100 years in August 2010. It is a matter of great pride to reflect on the enormous progress made by the organisation over the years. Today, we are the leading FMCG marketer in India, the second largest Hotel chain, the clear market leader in the Indian Paperboard and Packaging industry, and the country’s foremost Agri-business player. Additionally, our wholly owned subsidiary is one of India’s fastest growing Information Technology companies in the mid-tier segment.

Over the last fifteen years, ITC has created multiple drivers of growth by developing a portfolio of world-class businesses. During this period, the Company’s Gross Turnover and Post-tax profits recorded an impressive compound growth of 12.4% and 21.7% per annum respectively. Profitability, as measured by Return on Capital Employed improved substantially from 28.4% to 41% during this period.

Total Shareholder Returns, measured in terms of increase in market capitalisation and dividends, grew at a compound rate of 24.3% during this period, placing ITC amongst the foremost in the country in terms of efficiency of servicing financial capital.

ITC, today is one of India’s most admired and valuable corporations with a market capitalisation in excess of Rs.100000 crores.

Direct economic impact

* Detailed Financial performance available at www.itcportal.com