Indian Trading Company of India Limited (ITC).

PRESENTED BY;

MEHAK GUPTA

ANNUAL REPORT ANALYSIS ON

EXTERNAL SUPPORT:- PRINCIPLE Asst. ProfessorDR. P UMA Ms. ASIYA SULTANA

contents OF PRESENTATION HISTORY OF ITC INTRODUCTION OF ITC COMPANY PROFILE VISION & MISSION PRODUCTSCOMPETITORS RATIO ANALYSIS OF ITCSWOT ANALYSIS CONCLUSION

ITC. Touching your life. Everyday

HISTORY OT ITC• 24 Aug1910 – ITC incorporated under the name of

'Imperial Tobacco Company of India Limited'.• 1925– ITC’s Packaging & Printing Business Division was set

up as a strategic backward integration for ITC’s Cigarettes business.

• 1974 – The Company's ownership progressively Indianised, and the name of the Company was changed to ITC Limited (Indian tobacco company).

• 1975 – The Co. launched its HOTEL BUSINESS which was named ‘ITC-Welcome group Hotel Chola’.

• 1979 – ITC entered the Paperboards Business by promoting. Bhadrachalam Papaerboards Limited, which today has become the market leader in India.

• 1985 – Surya Nepal Pvt. Ltd.

• 2000-2014- ITC forayed into the Greeting, Gifting and Stationery products and FMCG products

Introduction

• ITC is one of India's foremost private sector companies• ITC has a diversified presence in FMCG (Fast Moving

Consumer Goods), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology.

• ITC is an outstanding market leader in its traditional businesses of Hotels, Paperboards, Packaging, Agri-Exports and Cigarettes, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery

ITC. Touching your life. Everyday

PROFILE OF ITC• Type: Public• Traded as: BSE: 500875 BSE SENSEX Constituent• Industry: Conglomerate• Founded: August 24, 1910[1] (as Imperial Tobacco Company of India)

Founder(s) Henry Overton Wills • Headquarters: Kolkata, West Bengal, India• Chairman: Yogesh Chandler Deveshwar• Products: Tobacco, Hotels, Paperboards & specialty papers,

packaging, agri-business, packaged foods & confectionery, IT, branded apparel, personal care, stationery, safety matches and other FMCG products

• Revenue : US$ 45 billion (2014) • Employees : 45,000 (2014)• Website/Source : www.itcportal.com

VISION & MISSION

• Vision: Sustain ITC’s position as one of India’s most valuable corporations through world class performance, creating growing value for the Indian economy and the Company’s stakeholders.

• Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

ITC. Touching your life. Everyday

Competitors of ITC Ltd.

• Golden Tobacco Limited• Godfrey Philips India Ltd.• VST Industries Ltd.(Vazir Sultan Tobacco

Company)

• RTCL Ltd. (Raghunath Tobacco Company Ltd)

• Hindustan Unilever Ltd.• Marico

• e-Choupal is an initiative of ITC Limited, a large multi business conglomerate in India, to link directly with rural farmers via the Internet for procurement of agricultural and aquaculture products like soybeans, wheat, coffee, and prawns. e-Choupal was conceived to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries. The programme involves the installation of computers with Internet access in rural areas of India to offer farmers up-to-date marketing and agricultural information.

RATIO ANALYSISPROFITABILITY RATIOS

1. GROSS PROFIT:-

FORMULA :- GROSS PROFIT/NET SALES*100

GROSS PROFIT :- NET SALES-COGS

INTERPRETATION:- THE GROSS PROFIT OF ITC IS SHOWING AN INCREASE AS THE COMPANY GROSS PROFIT HAS INCREASED DUE TO REDUCTION IN COST OF GOODS SOLD AND INCREASE IN NET SALES.

.

ITC. Touching your life. Everyday

Year 2014 2013 2012 2011

Gross profit 12454.84 10627.51 8921.81 7199.03

Net sales 33238.60 29901.27 25090.11 21120.83

Gross profit

ratio

37.47 35.54 35.55 34.08

ITC. Touching your life. Everyday

2. OPERATING PROFIT :-FORMULA :- OPERATING PROFIT /NET SALES *100OPERATING PROFIT – REVENUE – OPERATING EXPENSES

INTERPRETATION :- THERE IS AN INCREASE DUE TO INCREASE IN REVENUE AND GRADUAL DECREASE IN OPERATING EXPENSES

Years 2014 2013 2012 2011

Operating profit 12454.84 10627.51 8921.81 7199.03

Sales 33238.60 29901.27 25090.11 21120.83

Operating profit

ratio

37.47 35.54 35.55 34.08

3.) NET PROFIT RATIO :-FORMULA :- NET PROFIT/NET SALES*100

NET PROFIT-GROSS PROFIT(NET SALES-COGS)-INDIRECT EXPENSES

INTERPRETATION:-

THE NET PROFIT HAS INCREASED DUE TO REDUCTION IN INDIRECT EXPENSES AND INCREASE IN GROSS PROFIT RESULTING AN INCREASE.

ITC. Touching your life. Everyday

 Year 2014 2013 20122011

net profit 8785.21 7418.39 6162.374987.61

Sales 33238.60 29901.27 25090.1121120.83

net profit ratio 26.43 24.80 25.5623.61

ITC. Touching your life. Everyday

4.) RETURN ON INVESTMENT:-FORMULA :- NET PROFIT/TOTAL ASSETS*100

INTERPRETATION:-THERE IS AN INCREASE IN RETURN DUE TO THE EFFICIENT USE OF ASSETS;AS THERE IS AN INCREASE IN PROFIT MARGIN IN BALANCE SHEET COMPARED TO LAST YEAR.

 Year 2014 2013 2012

2011

net profit 8785.21 7418.39 6162.37

4987.61

total assets 39229.73 34017.43 28966.40

25433.82

return on

investment 22.39 21.08 21.2719.61

5.) RETURN ON EQUITY CAPITALFORMULA:- PROFIT AFTER TAX-PREFERNCE DIVIDEND/EQUITY

SHAREHOLDER FUNDS

INTERPRETATION:-

THERE IS AN INCREASE DUE TO INCREASE IN EQUITY SHARE HOLDER FUNDS & PAT . THE INCREASE IN PAT HAD INDIRCTLY LED TO INCREASE IN RETURN.

ITC. Touching your life. Everyday

 Year 2014 2013 2012 2011

Profit after

tax 8785.21 7418.39 6162.37

4987.61

Preference

dividend 0 0 0

0

Equity

shareholder

funds 26262.02 22287.85 18791.89

15953.27

Return on

equity capital 0.33 0.33 0.320.31

ITC. Touching your life. Everyday

6.) EARNING PER SHARE :-FORMULA :- PROFIT AFTER TAX-PREFERENCE DIVIDEND/NO. OF EQUITY SHARES

INTERPRETATION :-THE EPS HAS INCREASED DUE TO INCREASE IN NO. OF EQUITY SHARE & PAT(INDIRECTLY).

 Year 2014 2013 2012

2011

Profit after tax 8785.21 7418.39 6162.37

4987.61

Preference

dividend 0 0 0

0

No of equity

share 79531.83 79018.33 78184.24

77381.44

Earning per

share 11.05 0.09 0.070.06

7.) RETURN ON NETWORTH :-FORMULA :-PROFIT AFTER TAX/NET WORTH

NET WORTH-TOTAL ASSETS-TOTAL LIABILITIES

INTERPRETATION :-

THERE IS AN INCREASE DUE TO INCREASE IN NETWORTH(INCREASE IN ASSET & DECREASE IN LIABILITIES) & PAT.

ITC. Touching your life. Everyday

 Year 2014 2013 20122011

Profit after

tax 8785.21 7418.39 6162.37

4987.61

Networth 26262.02 22287.85 18791.8915953.27

Return on

Networth

ratio 0.33 0.33 0.32

0.31

ITC. Touching your life. Everyday

STRUCTURAL RATIO8.) PROPRIETORY RATIO :-FORMULA:-SHAREHOLDER FUNDS/TOTAL TANGIBLE ASSETS*100

INTERPRETATION:-THERE IS INCREASE DUE TO INCREASE IN SHAREHOLDER FUND AND REDUCTION IN TOTAL TANGIBLE ASSETS.

 Year 2014 2013 2012

2011

Shareholder

funds 26262.02 22287.85 18791.89

15953.27

Total tangible

assets 9675.75 12591.35 11252.92

9529.83

Proprietory

ratio 2.11 1.77 1.66

1.67

9.) DEBT – EQUITY RATIO :-FORMULA :-LONG TERM LIABILITY/SHAREHOLDER FUNDS

INTERPRETATION:-

THERE IS AN INCREASE DUE TO REDUCTION IN LONG TERM LIABILITIES & INCRESE IN SHAREHOLDER FUNDS.

ITC. Touching your life. Everyday

 Year 2014 2013 20122011

Long term

liabilities 1463.05 1398.85 1072.68

1003.07

Shareholder

funds 26262.02 22287.85 18791.89

15953.27

Proprietory

ratio 0.055 0.062 0.057

0.0628

ITC. Touching your life. Everyday

10.) ASSET TURNOVER RATIO :-FORMULA :- COGS/TOTAL ASSETS

INTERPRETATION :-THERE IS AN INCREASE IN ASSET TURNOVER RATIO DUE TO INCRESE IN COGS AND TOTAL ASSETS.

 Year 2014 2013 20122011

cost of goods

sold 20783.76 19273.76 26325.44

23434.54

total assets 39229.73 34017.43 28966.4025433.82

assets

turnover

ratio 0.52 0.56 0.90

0.92

ITC. Touching your life. Everyday

SWOT ANALYSISStrength•Cigarette market is 22,000 cr and ITC has lion’s share in it•Strong brand recognition and product portfolio •Distribution network•Management

Weakness•Dependence on tobacco revenues• Negative Connection of Tobacco

Opportunity•Consumption Of personal care products•Rural Market •E- Choupal• Filter cigarette segment of less than 60mm size

Threat•Competition both Domestic & International•Increasing Tax on cigarettes•Excise duty on unfiltered cigarettes less than 60mm in length was increased 387% last year •Hike was 142% for those between 61mm and 70mm long. •Regulatory restrictions on cigarettes•Ban on smoking

CONCLUSION

• ITC promoting their brands through advertisement campaign as well as door to door promotion.

• ITC is also focusing on Retailers and Wholesalers to promote their brand.

• The demand of their product in very low, because people don’t know about their brands very well.

• ITC knows their strength and weakness in the personal care market, so they are applying new concept to overcome their weaknesses.

• ITC now offering more margins, exiting offers and long credit period to retailers and wholesalers.

ITC. WORKING FOR YOU. WORKING FOR INDIA.

THINK BEFORE SMOKING…….

THANK YOU