ITC LimitedITC Limited

ITC - Financial SnapshotRs. Crores

GROSS INCOME 5188 13585 11.3

MARKET CAPITALISATION 5571 33348 * 22.0PBDIT 584 3028 20.1PBIT 536 2716 19.8PBT 452 2673 21.8PAT 261 1837 24.2EPS - Diluted - Rs. 10.6 73.5 24.0NETWORTH 1121 7896 24.2CAPITAL EMPLOYED 1886 8517 18.2ROCE (%) 28 32Book Value / Share 46 317 24.0Total Shareholder Returns % 23.4* Market Capitalisation as on 31/3/05

DESCRIPTIONCAGR (%) 1995-96 to

2004-051995-96 2004-05

Market capitalisation @ 31/10/2005: Rs. 45200 crs. (US$ 10 bln.)

2004-05 Financials

(Rs. 1 crore = Rs. 10 million)

Rs. Crs.

Gross Turnover 13350 11815 13.0Net Turnover 7639 6471 18.1Exports 1316 1104 19.1PBDIT 3028 2586 17.1PBIT 2716 2344 15.8PBT (Before Exceptional items) 2673 2319 15.3PAT (Before Exceptional Items) 1837 1593 15.3PAT (After Exceptional Items) 2191 1593 37.6Capital Employed 8517 6619 28.7Segment Capital Employed 5388 4708 14.4EPS - Diluted (Rs.) 73.52 64.22 14.5

2004/05 2003/04 Goly (%)

Segment Revenues 2004/05

(Rs. 1 crore = Rs. 10 million)

Rs. croresActuals Actuals

2003-04 2004-05 Goly (%)

Segment Revenue a) FMCG - Cigarettes 9230 10003 8.4 - Others 304 563 85.2 Total FMCG 9534 10566 10.8 b) Hotels 258 577 124.1 c) Agri Business 1709 1780 4.2 d) Paperboards, Paper & Packaging 1253 1565 24.9

Total 12754 14489 13.6

Less : Inter segment revenue 939 1139 21.3

Gross sales / income from operations 11815 13350 13.0

Segment Results 2004/05

(Rs. 1 crore = Rs. 10 million)

Rs. croresActuals Actuals

2003-04 2004-05 Goly (%)

Segment Results

a) FMCG - Cigarettes 2033 2289 12.6 - Others (174) (195) (12.0) Total FMCG 1859 2094 12.6 b) Hotels 33 141 333.5 c) Agri Business 90 96 7.4 d) Paperboards, Paper & Packaging 230 280 21.8

Total 2211 2611 18.1

Less : i) Interest (Net) 25 42 71.2 ii) Other un-allocable expenditure (133) (105) 21.2 net of un-allocable income

PBT (Before Exceptional Items) 2319 2673 15.3

Segment Capital Employed

(Rs. 1 crore = Rs. 10 million)

Rs. croresActuals Actuals

2003-04 2004-05 Goly (%)

Capital Employed

a) FMCG - Cigarettes 1573 1240 (21.1) - Others 212 262 23.7 Total FMCG 1785 1502 (15.8) b) Hotels 978 1401 43.3 c) Agri Business 477 740 55.1 d) Paperboards, Paper & Packaging 1469 1745 18.8

Total Segment Capital Employed 4709 5388 14.4

ITC Q2 05/06 - Key Financials

Rs. Crs.Q2

ActualsQ2 Last

YearGoly (%)

Gross Turnover External 3738 3271 14.3

Net Turnover External 2183 1786 22.2

Total Forex Earnings 361 280 29.1

PBDIT 898 780 15.1

PBIT 815 705 15.7

PBT 815 695 17.4

PAT 572 488 17.3

Capital Employed 9609 7675 25.2

Segment Capital Employed 5178 4919 5.2

ITC H1 05/06 - Key Financials

Rs. Crs.H1

ActualsH1 Last

YearGoly (%)

Gross Turnover External 7614 6553 16.2

Net Turnover External 4450 3603 23.5

Total Forex Earnings 762 614 24.0

PBDIT 1809 1547 16.9

PBIT 1646 1399 17.7

PBT 1645 1376 19.6

PAT 1131 953 18.6

Capital Employed 9609 7675 25.2

Segment Capital Employed 5178 4919 5.2

Segment Revenue: Q2/H1 2005/06

Rs. CroresQ2 05/06 Q2 04/05 Goly H1 05/06 H1 04/05 Goly

1. Segment Revenue

a) FMCG - Cigarettes 2723 2541 7.2 5566 5079 9.6 - Others 247 132 87.1 447 237 88.6 Total FMCG 2970 2673 11.1 6013 5317 13.1

b) Hotels 154 121 27.1 301 229 31.1 c) Agri Business 466 403 15.5 1220 862 41.4 d) Paperboards, Paper & Packaging 470 385 21.9 931 763 22.0

Total 4060 3583 13.3 8464 7171 18.0

Less : Inter-segment revenue 321 311 3.2 850 618 37.6

Gross sales / Income from operations 3738 3271 14.3 7614 6553 16.2

Segment Results: Q2/H1 2005/06

Rs. CroresQ2 05/06 Q2 04/05 Goly H1 05/06 H1 04/05 Goly

2. Segment Results

a) FMCG - Cigarettes 683 582 17.4 1378 1167 18.0 - Others -35 -47 24.7 -90 -86 -4.7 Total FMCG 648 535 21.1 1288 1081 19.1

b) Hotels 28 18 49.3 84 31 168.8 c) Agri Business 31 48 -35.1 67 73 -8.1 d) Paperboards, Paper & Packaging 92 69 33.6 181 150 21.0

Total 798 670 19.2 1620 1335 21.3

Less : i) Interest (Net) 0 10 -103.2 1 23 -96.7 ii) Other un-allocable expenditure net of un-allocable income -17 -35 51.3 -26 -64 58.9

Total Profit Before Tax 815 695 17.4 1645 1376 19.6

Agri Business: H1 degrowth primarily a/c mix in leaf tobacco and strategic initiatives cost & export incentives in LY

Segment Capital Employed:H1 2005/06

Rs. CroresH1 05/06 H1 04/05 Goly

3. Capital Employed

a) FMCG - Cigarettes * 841 1240 -32.2 - Others 476 238 99.8 Total FMCG 1318 1478 -10.9

b) Hotels 1370 1367 0.2 c) Agri Business 718 495 45.1 d) Paperboards, Paper & Packaging 1772 1579 12.2

Total Segment Capital Employed 5178 4919 5.2

* Before considering provision of 383 crs (30.09.04 - Rs. 1572 crs) in respect of disputed State Taxes

* LY includes Pre-deposit of Rs. 350 crs. with Excise Authorities in respect of Excise litigation which since stands resolved

One of the 8 Indian Companies to feature in ‘Forbes A-list’ for

2004 Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 5 bln. & are

rated as the ‘most attractive companies for investors’

Only Indian FMCG Company to feature in Forbes 2000 List A comprehensive ranking of world’s biggest companies measured by a composite of

sales, profits, assets & market value Among top in :

Sustained value creation (BT-Stern Stewart survey) Operating profits Cash Profits

Ranks No. 9 among Indian listed Companies by market cap.(@31/10/05)

No. 1 in FMCG Sector; 6th amongst Private Sector

High rating for Corporate Governance First company in India to be CG rated

ITC One of India’s most valuable corporations

External recognition (1)• Golden Peacock Global Award for Corporate Social Responsibility in

emerging economies for 2005 by World Council for Corporate Governance

for the e-choupal and social & farm forestry initiatives

• e-choupal initiative continues to win global recognition:

– First Indian Company to win the Development Gateway Award

(2005) for the most exemplary contribution in the field of Information

& Communication Technologies (ICT) for development during the last

10 years

– World Business Award: International Chamber of Commerce & the

HRH Prince of Wales International Business forum

– Harvard University case study

– Thought leaders in business strategy

• C K Prahalad, University of Michigan Business School,

• Mohanbir Sawhney, Kellog School of Management

External recognition (2)• ITC Centre,Gurgaon awarded Platinum Green building rating by US

Green Building Council -Leadership in Energy and Environmental Design– largest Platinum rated building in the world; 7th such building in the world

• ITC Welcomgroup – ‘Environment champion of the Year’ 2004 (FHRAI)

• Bhadrachalam paperboard unit :

– adjudged ‘Greenest paper mill in India’ by The Centre for Science & Environment; won the Greentech Environment Excellence Gold Award

• John Players won the ‘Rising Star of the year brand’- Images Fashion Award 2004

ITC - Business Portfolio

ITC

FMCG: Cigarettes

* Other FMCG

Hotels

Agri BusinessLeaf Tobacco

Agri Commodities

Paperboard

Paper &Packaging

* Focus area for future growth

Strategy of Organisation to manage diversity of Portfolio

Formal 3-tiered governance structure:

Board of Directors : Comprising executive (4) and non-executive directors (8) Strategic supervision

Corporate Management Committee : Comprising executive directors and senior managers Strategic management

CEO & Divisional Management Committee : Executive management

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

Corporate Strategies

FMCG - Cigarettes

ITC’s Cigarettes BusinessITC’s Cigarettes Business

Market leadership Powerful brands across segments Leadership in all segments - geographic & price Extensive distribution network

Over 900 wholesale dealers serving more than 1 million retail outlets

World-class state-of-the-art technology and products Investment - Rs.11 billion in six years

Exciting long term growth potential

Cigarettes: Growth potential Cigarettes account for only 14% of tobacco consumed in

India unlike world pattern of 85% due to prolonged punitive taxation Cigarettes (14% of tobacco consumption) contribute nearly

85% of Revenue to the Exchequer from tobacco sector Of the 58% of adult Indian males who consume tobacco,

barely 15% can afford cigarettes Biri : Cigarettes ratio = 10 : 1 Annual per capita adult cigarette consumption in India is

appx. one tenth world average : 141 Future growth depends on relative rates of growth of per

capita income and moderation in taxes

Source : Based on Cigarette consumption data(2003) from “World Cigarettes”,ERC Group plc.

Per Capita Adult C igarette Consumption (Sticks)

16621753

561 488

141

1190

USA China Pakistan Nepal India W orld Avg.

Hotels & TourismHotels & Tourism

Hotels & Tourism industryHotels & Tourism industry

Foreign arrivals into India - 3.4 million appx. vs 31 million in China The two nations were on par 2 decades ago at

750,000 arrivals

Today, Beijing alone has as many hotel rooms as the whole of India

India’s luxury rooms availability lower than even smaller East Asian countries

Luxury hotel rooms - East AsiaLuxury hotel rooms - East Asia

01000020000300004000050000600007000080000

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ng

Ko

ng

Ban

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k

Sin

gap

ore

Mal

aysi

a

Ind

ia

Source: Compendium of Tourism statistics, WTO

Indian hotel industryIndian hotel industry

Current supply - 80,000 rooms of which 5 Star category accounts for less than 30%

To support GDP growth of 6% p.a., Indian room capacity needs to double in five years

Present mismatch between supply and demand expected to persist over the short term

As infrastructure for trade & commerce improves - growing potential for leisure tourism

ITC’s hotel businessITC’s hotel business

One of three chains in IndiaStrategy to establish presence in key business locations to

complete the chain achieved in end 2004 Over 5200 rooms under 4 distinct brands

Revenue leadership in most locations Leverage unique service proposition and

international alliance with Sheraton Large tax advantages on investments on ITC

Balance Sheet Attractive medium / long term prospects

Amalgamation

• Merger of ITC Hotels Ltd. and Ansal Hotels Ltd. effective from 1st April 2004– Merger ratios:

• 3 shares of ITC for 25 shares of ITC Hotels• 1 share of ITC for every 150 shares of Ansal Hotels

• Post-Merger, ITC’s hotel business :– Leading hotel chain in terms of pre-tax profits– Highest EBITDA margin

ITC’s Hotel Properties & Projects

• ITC Ltd

• ITC Hotels Ltd

(merged w.e.f 1/4/04)

• Maurya Sheraton, New Delhi• ITC One, New Delhi• Grand Maratha, Mumbai• Sonar Bangla, Kolkata• Grand Central, Mumbai

(Commissioned in Jan ‘05)• Ansal Hotels Ltd (merged

w.e.f. 1/4/04)

• Windsor Manor, Bangalore• Rajputana Palace, Jaipur• Mughal, Agra • Chola, Chennai • Park, Chennai (Managed)• Vadodara

Other Hotel Properties

• Srinivasa Resorts– (68% shareholding)

• Bay Island Hotels– (100% shareholding)

• Fortune Park Hotels– (99.99% shareholding)

• Marudhar Hotels– (50% shareholding)

• Kakatiya, Hyderabad

• Bay Island, Port Blair

• Manages mid-segment hotels

• Manages Heritage hotels

Paperboards, PaperPaperboards, Paper&&

PackagingPackaging

Indian paperboard marketIndian paperboard market

Annual paperboard demand - 0.90 million tonnes

Fragmented capacity & obsolete technology Low per capita usage at 0.75 kg - 1/7th global

average Indian paperboard market growing at 6 -7%

p.a. Value Added Coated board - the fastest growing

segment (20% p.a.) in India driven by the growing sophistication of the consumer

Paperboard Demand Projections - Asia

Asian region demand (excluding Japan) growing by 0.5 million tonnes per annum

This region expected to be a net importer by 2005 Significant export opportunities for high quality

Indian manufacturers

ITC paperboards exports - Rs. 1.6 billion

ITC’s Paperboards Business

Market leader in growth segment - value added coated boards World-class contemporary technology

Elemental Chlorine Free (ECF) Pulp Mill fully operational – only one of its kind in India meeting world-class environmental standards

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 about 30,000 hectares Pulping capacity enhanced by 100,000 MT to strengthen

competitiveness

ITC’s Paperboards & Packaging businessesITC’s Paperboards & Packaging businesses

Capacity expansion in recycled segment Acquisition of Kovai Unit in March 2004: +65000 TPA

Another 75000 TPA commissioned in Jan. ‘05

ITC’s packaging SBU -India’s largest converter of

paperboard into high quality printed packaging Leading supplier to Indian FMCG segment

Agri BusinessesAgri Businesses- - Leaf TobaccoLeaf Tobacco

- Agri Commodities- Agri Commodities

Indian Leaf Tobacco industryIndian Leaf Tobacco industry

India - the second largest producer of tobacco

But, Indian exports constitutes mere 0.7% of the value of world trade in tobacco

Upgradation of tobacco consumption from other formats to cigarettes will enable:

growing domestic base

larger opportunities for value added exports

ITC - India’s largest buyer, processor, consumer & exporter of cigarette tobaccos

ITC’s Agri Commodity Exports

Farm linkages in 14 states covering Soya, Wheat, Rice, Marine products, Edible nuts, Coffee

Unique CRM programme in commodity exports Leveraging IT for the transformational ‘e-Choupal’

initiative Rural India’s largest Internet-based intervention Over 30000 villages linked through 5200 e-Choupals

servicing over 3 million farmers 2 rural malls (‘Choupal Sagar’) operational at Sehore &

MHOW, M.P; construction of 10 more underway

Distinctive sourcing capability for ITC’s Foods business

e-Choupal - Recognition

• World Business Award – ICC-UNDP

• Enterprise Business Transformation Award -Wharton Infosys

• Harvard Business School – case study

• Showcased at ICT4D, Geneva – UN

ITC’s strategic thrustITC’s strategic thrust

Cost-effective extension services to enhance farm productivity and quality, and better align farm produce with requirements of the market, both domestic and international Enhances competitiveness of ITC agri-sourcing

Create e-infrastructure to serve as transaction backbone Provides ITC two-way fulfilment capability in and out of rural

markets for a range of goods and services

Rural marketing initiatives being scaled up progressively

Future Growth & Value Capture

New FMCG Initiatives

Strategic Rationale

Blend multiple competencies residing within the ITC Group to create new avenues of growth

Best fit between internal capabilities and emerging market opportunities

Each segment enhances the depth and width of ITC’s FMCG distribution capability

Business model retains critical elements of value chains within ITC with other elements outsourcedContributing to the competitiveness of SMEs

FMCG Business InitiativesBranded Packaged Foods

Leverages: Unique Agri sourcing skills ITC Welcomgroup’s specialist cuisine & bakery knowledge FMCG distribution synergies ITC Group R&D Centre,Bangalore

4 chosen categories: Staples

Aashirvaad Atta, Salt, Spices Snack Foods

Sunfeast Biscuits Confectionery

Candyman, mint-o Ready to Eat

Kitchens of India, Aashirvaad ReadyMeals, Sunfeast Pasta

FMCG Business InitiativesBranded Packaged Foods

• Aashirvaad Atta:

– current market leader amongst national branded players; leverages

the e-choupal network for cost-quality optimisation and region

specific offerings

• Sunfeast Biscuits:

– Differentiated & innovative products; very encouraging response in

launch markets; distributed & outsourced supply chain being

ramped up

• Number of innovative products in the pipeline leveraging the

capabilities of the ITC Group R&D centre

FMCG Business InitiativesLifestyle Retailing

Leverages trade mark and services expertise of hotels Relaxed wear market growth > 25% p.a

Upmarket product range available in exclusive Wills Lifestyle stores and multi-branded outlets/ large format retail stores across the country

State-of-the-art Master Facility aids speed of execution Outsourced JIT plant for ‘quick response’ manufacturing Product and brand range being expanded

‘Wills’ range expanded to Formals and Social evening wear segments

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

FMCG Business InitiativesGreetings, Gifting & Stationery

Leverages print and paper know-how

An emerging market in India - growth driven by increasing

cross-cultural exposure

ITC’s ‘Expressions’ range commenced with greeting cards;

now widened to include stationery & gift wraps

Distribution network being strengthened to scale up the

Stationery business significantly

Serves to expand the width of ITC’s FMCG distribution

capability with negligible incremental investment

FMCG Business InitiativesSafety Matches

Current industry consumer spend estimated at Rs.1250

crores p.a. for 24 billion match boxes

Fragmented supply base arising from policy of reservation

for small scale industry

ITC markets its brands with value added products across

each price point Support SMEs with complementary marketing strengths

‘AIM’ – India’s largest selling Safety Matches brand

74% shareholding acquired in WIMCO Ltd. through Russell

Credit Key brands: Homelites, Ship, Cheetah Fight etc.

FMCG Business InitiativesIncense sticks (Agarbattis)

Current industry consumer spend estimated at over Rs. 900 crores p.a.

Fragmented supply base arising from policy of reservation for small scale industry

ITC markets its brands with value added products across each price pointSupport cottage sector with complementary marketing

strengths ‘Mangaldeep’ : the only National brand in the country

FMCG business initiatives…….

Concurrently, ITC’s IT subsidiary assists in web-enabling business processes CRM initiatives ERP transaction processing systems SCM including the e-choupal capability

… hosted on ITC’s Virtual Private Network ITC awarded the best IT user in FMCG category

by Nasscom

Future Positioning of ITC A leading FMCG player in India

FARMERS

MARKETS

Cigarette Trade Marketing capability

Branded

Foods

Expanded FMCG distribution capability

e-choupal rural two-way fulfillment capability

A basis for strategic partnerships with other FMCG brand owners

VPN providing SCM, ERP & CRM capability

Lifestyle

retailing

Greeting

cards/statione

ry

Matches &

Agarbattis

Forward-looking Statements

Statements in this presentation describing the Company’s 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. 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 Company’s

portfolio, changes in Government regulations, tax regimes and other statutes, and the ability to attract and retain high

quality human resource.