PESTEL ANALYSIS OF ITC LIMITED

HISTORY AND EVOLUTION  

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
India Limited. As the Company's ownership progressively Indianised, the name of the
Company was changed from Imperial Tobacco Company of India Limited to India Tobacco
Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's
multi-business portfolio encompassing a wide range of businesses - Fast Moving Consumer
Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and
Stationery Products, Incense Sticks and Safety Matches, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business and Information Technology - the full stops in the Company's name
were removed effective September 18, 2001. The Company now stands rechristened 'ITC
Limited,'where ‘ITC’ is today no longer an acronym or an initialised form.

ITC is one of India's foremost multi-business enterprises with a market capitalisation of US $ 50

billion and Gross Sales Value^ of US $ 10 billion. ITC is rated among the World's Best Big
Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine and
as 'India's Most Admired Company' in a survey conducted by Fortune India magazine and Hay
Group. ITC also features as one of world's largest sustainable value creator in the consumer
goods industry in a study by the Boston Consulting Group. ITC has been listed among India's
Most Valuable Companies by Business Today magazine. The Company is among India's '10
Most Valuable (Company) Brands', according to a study conducted by Brand Finance and
published by the Economic Times. ITC also ranks among Asia's 50 best performing companies
compiled by Business Week.

MULTIPLE DRIVERS OF GROWTH

ITC’s aspiration to create enduring value for the nation and its stakeholders is manifest in its
robust portfolio of traditional and greenfield businesses encompassing Fast Moving Consumer
Goods (FMCG), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and
Information Technology. This diversified presence in the businesses of tomorrow is powered
by a strategy to pursue multiple drivers of growth based on its proven competencies, enterprise
strengths and strong synergies between its businesses. The competitiveness of ITC’s diverse
businesses rest on the strong foundations of institutional strengths derived from its deep
consumer insights, cutting-edge Research & Development, differentiated product
development capacity, brand-building capability, world-class manufacturing
infrastructure, extensive rural linkages, efficient trade marketing and distribution network
and dedicated human resources. ITC’s ability to leverage internal synergies residing across its
diverse businesses lends a unique source of competitive advantage to its products and services.

Within a relatively short span of time, ITC has established vital brands like Aashirvaad,
Sunfeast, Fabelle, Sunbean, Dark Fantasy, Mom's Magic Bingo!, Yippee!, Candyman, mint-o,
Kitchens of India, Farmland, B Natural, ITC MasterChef in the Branded Foods space; Essenza
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Di Wills, Fiama, Vivel, Engage, Savlon, Charmis, Shower to Shower and Superia in the Personal
Care products segment; Classmate and Paperkraft in Education & Stationery products; Wills
Lifestyle and John Players in the Lifestyle Apparel business; Mangaldeep in Agarbattis and Aim
in the Safety Matches segment. This growth has been rated by a Nielsen Report to be the fastest
among the consumer goods companies operating in India.

CREATING ENDURING VALUE

Today, ITC is India's leading Fast Moving Consumer Goods company, the clear market leader in
the Indian Paperboard and Packaging industry, a globally acknowledged pioneer in farmer
empowerment through its wide-reaching Agri Business and a trailblazer in green hoteliering.
ITC Infotech, a wholly-owned subsidiary, is one of India's fast-growing IT companies in the
mid-tier segment. This portfolio of rapidly growing businesses considerably enhances ITC's
capacity to generate growing value for the Indian economy. ITC's Agri-Business is one of India's
largest exporters of agricultural products. The ITC Group’s contribution to foreign exchange
earnings over the last ten years amounted to nearly US$ 6.8 billion, of which agri exports
constituted 57%. The Company's 'e-Choupal' initiative has enabled Indian agriculture
significantly enhance its competitiveness by empowering Indian farmers through the power of
the Internet. This transformational strategy has already become the subject matter of a case study
at Harvard Business School apart from receiving widespread global acclaim.

As one of India's most valuable and respected corporations, ITC is widely perceived to be

dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a
commitment beyond the market". In his own words: "ITC believes that its aspiration to create
enduring value for the nation provides the motive force to sustain growing shareholder
value. ITC practices this philosophy by not only driving each of its businesses towards
international competitiveness but by also consciously contributing to enhancing the
competitiveness of the larger value chain of which it is a part."  ITC group directly employs
more than 32,000 people and the Company's Businesses and value-chains generate around 6
million sustainable livelihoods many of whom live at the margin in rural India.

GLOBAL EXEMPLAR IN SUSTAINABILITY

Acknowledged as a global exemplar in sustainability, ITC is the only enterprise in the world,

of comparable dimensions to be carbon-positive, water-positive, and solid waste recycling
positive. A testimony to its commitment to a low carbon growth path - over 43% of the total
energy requirements of ITC is met from renewable sources. All ITC's premium luxury hotels are
LEED (Leadership in Energy and Environmental Design) Platinum certified making it the
"greenest luxury hotel chain" in the world. ITC's Paperboards and Paper business is an icon of
environmental stewardship.

ITC's production facilities and hotels have won numerous national and international awards for
quality, productivity, safety and environment management systems. ITC was the first company
in India to voluntarily seek a corporate governance rating. The Company continuously
endeavours to enhance its wealth generating capabilities in a globalising environment to
consistently reward more than 8,30,000 shareholders, fulfill the aspirations of its stakeholders
and meet societal expectations.
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THE ITC 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

THE ITC MISSION

To enhance the wealth generating capability of the enterprise in a globalising environment,

delivering superior and sustainable stakeholder value

CORE VALUES

 Trusteeship
 Customer Focus
 Respect for People
 Excellence
 Innovation
 Nation Orientation

A MODEST BEGINNING

The Company's 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, (now renamed J.L. Nehru
Road) 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.

 1925: Packaging and Printing: Backward Integration

 1975: Entry into the Hospitality Sector - A 'Welcom' Move
 1979: Paperboards & Specialty Papers - Development of a Backward Area
 1985: Nepal Subsidiary - First Steps beyond National Borders
 1990: Paperboards & Specialty Papers - Consolidation and Expansion
 1990: Agri Business - Strengthening Farmer Linkages
 2002: Education & Stationery Products - Offering the Greenest products
 2000: Lifestyle Retailing - Premium Offerings
 2000: Information Technology - Business Friendly Solutions
 2001: Branded Packaged Foods - Delighting Millions of Households
 2002: Agarbattis & Safety Matches - Supporting the Small and Cottage Sector
 2005: Personal Care Products - Expert Solutions for Discerning Consumers
 2010: Expanding the Tobacco Portfolio

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PESTEL ANALSIS

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 POLITICAL FACTORS:

The political arena has a huge influence upon the regulation of businesses, and the spending
power of consumers and other businesses. The Indian polity is increasingly seen by political
observers as the problem. When populist political appeals stir the passions of the masses,
government institutions appear less capable than ever before of accommodating conflicts in a
society mobilized along competing ethnic and religious lines. Budget impact - Among the
FMCG stocks, ITC is one of the biggest gainers. Due to Govt. new conditions, ITC Maurya won
the 'Best eco-friendly hotel –Special Prize' award by the Ministry of Tourism, Government of
India. Some recent Political Factors ITC had to face in some previous years are mentioned as
below:

 Huge burden of VAT – increase in prices may affect the sales.

 Excise duty raised by union budget by 5 %.
 Ban on communication.
 Luxury tax in 10 states – making it difficult for ITC to maintain the consistency level in
prices for different places.
 Smuggling - regarding Tobacco products.
 100% FDI allowed - as it will allow several Foreign Brands to enter the Indian Markets,
and thus, may affect the share of ITC in the Indian Markets.

Most of the packed food items have been exempted from licensing. Food processing industries
were prioritized (bank lending). Developmental assistance is provided under various schemes by
the Government and R&D is encouraged.

 ECONOMIC FACTORS:

Marketers need to consider the state of a trading economy in the short and long-terms. This is
especially true when planning for international marketing. India has been one of the best
performers in the world economy in recent years, but rapidly rising inflation and the
complexities of running the world’s biggest democracy are proving challenging. India’s
economy has been one of the stars of global economics in recent years, growing consistently
over the past decade. Growth had been supported by markets reforms, huge inflows of FDI,
rising foreign exchange reserves, both an IT and real estate boom, and a flourishing capital
market. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's
Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by
Business World and among India's Most Valuable Companies by Business Today. ITC ranks
among India's 10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and
published by the Economic Times. ITC also ranks among Asia's 50 best performing companies
compiled by Business Week. ITC employs over 25,000 people at more than 60 locations across
India. Some Economic Factors ITC had to face in some previous years are mentioned as below:
 Bidee : cigarette ratio = 10:1 – which means they are the producers of a very less level of
tobacco products as compared to overall consumed.
 Profit margin is high – and thus, it will yield higher level of returns over comparatively
lesser inputs.

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  Other forms of cheap tobacco intake – the economy of India is not as strong which leads
to people consuming cheap tobacco products. This means they can have higher returns as
production of cheap tobacco products is comparatively cheaper.
 India’s top producer of cigarettes. – and it can be concluded that since ITC is the leading
producer of tobacco products in India, they earn a higher proportion of their income by
selling these tobacco products.
 10 year Value addition ~ Rs. 3.1 lakh crore (US$ 55 billion)
 Among the top tax payers in the country
 Over the last five years, the Value-Added by the Company, i.e. the value created by the
economic activities of the Company and its employees, aggregated over ` 200000 crores
of which nearly ` 150000 crores accrued to the Exchequer.
 Foreign exchange earnings in the last 10 years: US$ 7.1 bln – Of which agri exports
constituted ~56%

 SOCIAL FACTORS:

The social influences on business vary from country to country. It is very important that such
factors are considered Envisioning a larger societal purpose has always been a hallmark of ITC.
As a corporate citizen with enduring relationships in rural India, ITC has a history of
collaboration with communities and government institutions to enhance farm productivity and
the rural resource base. Some Social Factors ITC had to face in some previous years are
mentioned as below:

 Becoming status symbol – for many, intake of tobacco is a status symbol. They feel that
the usage of Cigars and high-branded Cigarettes gives an increase to their status in the
society. ITC banks on it and makes highly-prices tobacco products as well in addition to
the cheaper ones.
 Companions mounted by W.H.O.
 Changing attitudes towards tobacco – Many people are becoming aware about the ill-
effects of intake of Tobacco. This may lead to the industry suffering some amount of loss
in the years to come.
 Restrictions by government – Several restrictions on tobacco and it advertising has made
the promotion of tobacco brands almost impossible, thus leading to a decline in their
sales.
 Festivals increases the sales of packed food items. Western culture is responsible for and
increase in consumption of packed food items. Perception of people is changing (believe
that packed food items offer better quality)
 Direct employment ITC Group : over 32,000 Supported creation of around 6 million
sustainable livelihoods.
 e-Choupal: world’s largest rural digital infrastructure serving more than 4 million
farmers.
 Social and Farm forestry initiative has greened nearly 683,000 acres and generated nearly
125 million person days of employment for rural households, including poor tribal and
marginal farmers.
 Significant thrust on social sector investments under ‘Mission Sunehra Kal’ initiatives –
Natural resource management – Sustainable livelihoods – Community development
programmes in the economic vicinity of operating locations
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 TECHNOLOGICAL FACTORS:

Technology is vital for competitive advantage, and is a major driver of globalization.

Technology in India accounts for a substantial part of the country's GDP and export earnings
while providing employment to a significant number of its tertiary sector workforce. ITC's
development of its Integrated Quality Management System (IQMS) is based on its strong
foundation of implementing ISO 9001:2000, ISO 14001, OHSAS 18001, SA 8000, HACCP (for
Foods) and IQRS (performance rating and benchmarking of the quality management system).
Likewise, ITC's strategic initiatives for developing its people have been based on participative
management concepts like QC (Quality Control), TQM (Total Quality Management), KSS
(Kaizen Suggestion Scheme), 5S, Six Sigma etc. All ITC manufacturing units have ISO quality
certification. Almost all contract manufacturing units in the Foods Business and all large hotels
have food safety and quality systems certified by accredited 'third party' in accordance with
'Hazard Analysis Critical Control Points' (HACCP) standards. Additionally, the quality of all
FMCG products of the Company is regularly monitored through 'Product Quality Rating System'
(PQRS). The Leaf Tobacco and Printing & Packaging businesses have achieved world-class
ratings in the 'International Quality Rating System' (IQRS) for business excellence in which key
processes are rated against international benchmarks and certified by accredited 'third party'
independent assurance providers. IT also plays a very critical role in driving the ITC business
strategies. IT is an enabler of the business process to ensure business growth through efficient
management of operations in the value chain. IT creates new business process or restructures the
current business process to enhance customer service availability, efficient manufacturing /
supply chain operations etc. Some Technological Factors affecting ITC in some previous years
are listed as below:
 State-of-the-art factories.
 Cheap labour supply – It has often been noticed that labour is very cheap and in
abundance in India. Thus, ITC gets large number of labour supplies from underdeveloped
areas for a comparatively cheaper cost and thus, their margin on the product increases
significantly.
 Development of IQMS i.e. Innovative Quality Products and Systems. The basic principle
of ITC is to produce quality products and thus, systems are set-up in order to obtain them.
 Adapting other concepts like QC and TQM – Various techniques such as QC (Quality
Control) and TQM (Total Quality Management have regularly been adopted by ITC so as
to ensure the Quality is maintained and managed regularly.
 Hardware investment – High amount of investment is done in hardware such as large
Storehouses, high shelves, etc.
 Software investment – such as GPS monitoring circuits, long-distance clients landing
enquiries, GIS circuit optimization, and online method of electronic clearing, etc.
 Miscellaneous – along with good Hardware and Software investment, ITC also possesses
a great Logistic as well as Inventory support

 ENVIRONMENTAL FACTORS:

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ITC's impact on the environment as a result of its operations mainly concerns three areas: (a)
release of greenhouse gases contributing to global warming; (b) consumption of water, both from
surface and sub-surface sources, adding to the depletion of freshwater availability; and (c)
generation of solid wastes, adding to the non-degradable waste being generated by industry.ITC
has been at the vanguard of Indian industry's attempts to minimise its environmental footprints
through strategic initiatives in each of these areas of global concern.

 Global Warming: In order to mitigate the effects of global warming, the Company is
following a two-fold strategy: (a) reduce specific energy consumption in its operations
through improved technology and processes; and (b) sequester greenhouse gases,
especially carbon dioxide, through a large-scale forestry programme. These efforts have
resulted in greening 41,000 hectares of land, helping ITC sequester more carbon dioxide
than its operations emit. The total CO2 released by ITC's operations in 2005-06 was
1,202 kilo tonnes while CO2 sequestered was 1,244 kilo tonnes, or 104% of emissions.
This positions ITC uniquely as a 'carbon positive' corporation. By 2010, the Company
plans to green 100,000 hectares, significantly more than it would require for its
expanding paperboards operations.

 Solid Waste Management: Non-degradable waste is a growing menace adversely

affecting the environment. Three plans are in place to reduce solid waste within the
Company and make it a 'zero solid waste' company in the next two years: the major
emphasis is on reduction of waste per unit of output so that the total generation of waste
comes down significantly; the second step is to ensure recycling of all the wastes
generated by the Company's operations; and the third step is to maximise reuse of the
wastes as raw material. As a result of the first two steps during 2005-06, 78.7% of all
wastes generated was recycled. ITC hopes to become a 'zero solid waste' company in the
next two years through 100% recycling/reuse.

 Water Conservation: ITC is mindful of the fact that freshwater in the country is

increasingly becoming a valuable resource given that India accounts for 18% of the
world's population but has only 4% of global freshwater resources. In order to mitigate
the negative impact on freshwater depletion due to its operations, ITC has adopted a
three-fold strategy: (a) minimise the consumption of fresh water per unit of output in all
its businesses; (b) minimise/eliminate discharge of treated effluents to prevent damage to
the environment in any way; and (c) create rainwater harvesting potential within the
Company's units. Rainwater harvesting within the units has seen a significant increase
between 2002-03 and 2005-06 - from 0.24 MKL to 0.61 MKL.

ITC's endeavours towards sustainability go beyond the corporate boundary. The Company has
been systematically and strategically investing in creating additional rainwater harvesting
capacity through external watershed development projects in water stressed areas. This was
prompted by the fact that even though 70% of India's population lives in the countryside and
agriculture accounts for 19% of the country's GDP, nearly 67% of the cultivated area faces
severe moisture stress for 5 to 10 months a year. From 3 projects covering 60 villages during
2001-02, ITC's watershed development projects now cover 325 villages in 16 districts, benefiting
15,506 farmers. A total of 1,011 water harvesting structures have been created. These structures

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provide critical irrigation to 10,277 hectares of farmland and have led to an additional storage
potential of 18.99 MKL.

As a result of these measures, ITC has been a 'water positive' Company for the past four
consecutive years. Compared to the net freshwater consumption of 4.62 MKL in 2005-06, the
Company has created potential storage of 19.60 MKL through its water harvesting efforts both
within its units and in moisture-stressed districts of the country.

The Company is keen not only to maintain its status as a 'water positive' corporation but to
continue to address one of India's foremost problems - the threat of more and more areas in the
country becoming moisture deficit. In the next five years therefore, the Company has planned to
bring a total of 50,000 hectares under soil and moisture conservation through the creation of
1,500 additional water-harvesting structures leading to an additional potential storage of about 28
MKL.

 LEGAL FACTORS:

ITC “Legal Aspects for International Trade” are the services provided by the institutions and
legal experts from the several countries. These are managed through Geneva offices of ITC. Its
main objective is to access international trade law with better understanding and resolve disputes.
In April, 2003 anti-tobacco law was emerged to review control on tobacco in India affected to
the sales of the company. Because of the smoke and tobacco law, the company production was
affected. To combat this problem, the company started putting more emphasis on the packaging.
It emphasized on the statutory warning and directed all the sellers not to sell the product below
18 year

SWOT ANALYSIS

STRENGTH

 Exisiting distribution channels are robust.

 Ability to vertically integrate, owns farming lands and raw material sources (E-choupal)
 Diverse product portfolio, serving to different segments (rural, urban, region wise products)

WEAKNESS

 Low switching costs, and ability to differentiate is limited

 ITC has been majorly associated with Tobacco, people are not able to associate ITC with
other products

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OPPORTUNITY

 Changing consumer tastes, ITC has a potential to new products (Health food and energy
drinks), ITC already has the capability
 Consumer spending is increasing (Rs 2630 in urban and Rs 1430 in rural)

THREAT

 FDI approval, can lead to foreign giants entering India (Walmart has in house food brands)
 Majority of the segment goes for local and economical brands, and it is difficult to shift those
players

IT E-WASTE POLICY

The lifecycle of all IT assets spanning from acquisition to disposal shall be managed in a
manner which conforms to sound environmental norms as detailed in the IT E-Waste
guidelines. This includes:
 Preferential dealing with IT vendors having sound E-Waste management processes
 Extending the useful life of IT assets to postpone/minimize generation of E-Waste
 Responsible disposal processes conforming to regulatory requirements and best practices

IT E-WASTE MANAGEMENT GUIDELINES

REGULATORY ENVIRONMENT

 Different government bodies have published regulatory framework for handling E-waste.
Similarly, different trade and industry bodies are also evolving the best practices to deal
with IT E-Waste. CIO Office will scan the evolving code of practice and keep updating
this policy document (supported by Corporate EHS) in line with the best practices for
disposal of IT E-Waste. This will be done once a year, or more frequently if deemed
necessary.

 The appropriate government bodies, e.g., Ministry of Environments &Forests /Central or

State pollution control boards in India, etc. have initiated the process of approving and
authorizing E-Waste Recyclers. CIO Office shall identify authorized Recyclers, publish a
list of such E-Waste Recyclers and enter into appropriate agreements covering all aspects
of the E-Waste disposal. The list of authorized Recyclers and the agreed terms and
conditions will be circulated to the DMMs.

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IT E-WASTE MINIMIZATION PROCESS

 It shall be the endeavor of every user to maximize utilization of all IT assets to their full
productive life. Apart from internal re-use, option to extend use outside ITC through
donation to bonafide philanthropic institutions will also extend the useful life of IT assets.

 Only such IT assets which are non-operational and can not be reused for any other
alternate purpose should be considered as IT E-waste for disposal. The DMM will certify
this position.

COMPLIANCE REPORTING

As part of Quarterly IT Policy Compliance, the DMM shall report the Division's compliance to
E-Waste Policy to the CIO, who in turn will present Companywide consolidated status to the
Corporate IT Steering Committee.

CORPORATE SOCIAL RESPONSIBILITY POLICY

Philosophy

 Recognizing that business enterprises are economic organs of society and draw on
societal resources, it is ITC's belief that a company's performance must be measured by
its Triple Bottom Line contribution to building economic, social and environmental
capital towards enhancing societal sustainability. ITC believes that in the strategic
context of business, enterprises possess, beyond mere financial resources, the
transformational capacity to create game-changing development models by unleashing
their power of entrepreneurial vitality, innovation and creativity. In line with this belief,
ITC will continue crafting unique models to generate livelihoods and environmental
capital. Such Corporate Social Responsibility ("CSR") projects are far more replicable,
scalable and sustainable, with a significant multiplier impact on sustainable livelihood
creation and environmental replenishment. These initiatives are independent of the
normal conduct of ITC's business. Programmes, projects and activities (collectively "CSR
Programmes")carried out in this regard are the subject matter of this Policy.

CSR Policy of ITC Ltd.

 To direct ITC's CSR Programmes, inter alia, towards achieving one or more of the
following-enhancing environmental and natural capital; supporting rural development,
promoting education, providing preventive healthcare, providing sanitation and drinking
water, creating livelihoods for people, especially those from disadvantaged sections of
society, in rural and urban India, preserving and promoting sports,

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  To develop the required capability and self-reliance of beneficiaries at the grass roots,
especially of women, in the belief that these are prerequisites for social and economic
development;
 To engage in affirmative action interventions such as skill building and vocational
training, to enhance employability and generate livelihoods for persons from
disadvantaged sections of society;
 To pursue CSR Programmes primarily in areas that fall within the economic vicinity of
the Company's operations to enable close supervision and ensure maximum development
impact;
 To carry out CSR Programmes in relevant local areas to fulfill commitments arising from
requests by government/regulatory authorities and to earmark amounts of monies towards
"Enterprise Social Responsibility (ESR)" activities and to spend such monies through
ESR/CSR Cells of such administrative bodies of the government and/or directly by way
of developmental works in the local areas around which the Company operates;
 To provide equal opportunities to beneficiaries of the Company's CSR Programmes as
vendors or employees on merit;
 To promote sustainability in partnership with industry associations, like the
Confederation of Indian Industry (CII) through the Cll-ITC Centre of Excellence for
Sustainable Development, in order to have a multiplier impact.

Implementation

 To implement the Company's CSR Programmes through Company personnel or through

external implementing agencies or through ITC Education Trust. ITC Rural Development
Trust, ITC Sangeet Research Academy, ITC Bhadrachalam Education Trust, Tribeni
Tissues Education Society (and other Trusts, Foundations and Section 8 companies that
may be established by the Company from time to time). In such cases, the Company will
specify the CSR Programmes which may be undertaken by those Trusts in accordance
with their Objects and administrative and accounting processes laid down in the
respective Trust Deeds/Memoranda and Articles of Association.

Governance

 Every year, the CSR and Sustainability Committee will place for the Board's approval, a
CSR Plan delineating the CSR Programmes to be carried out during the financial year
and the specified budgets thereof. The Board will consider and approve the CSR Plan
with any modification that may be deemed necessary.
 The Corporate Management Committee (CMC) will assign the task of implementation of
the CSR Plan within specified budgets and timeframes to such persons or bodies as it
may deem fit.
 The persons/bodies to which the implementation is assigned will carry out such CSR
Programmes as determined by the CMC within the specified budgets and timeframes and
report back to the CMC on the progress thereon at such frequency as the CMC may
direct.

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  The CMG shall review the implementation of the CSR Procrammes once a quarter and
issue necessary directions from time to time to ensure orderly and efficient execution of
the CSR Programmes in accordance with this Policy.
 Once every six months the CMC will provide a status update to the CSR and
Sustainability Committee on the progress of implementation of the approved CSR
Programmes carried out during the six month period. It shall be the responsibility of the
CSR and Sustainability Committee to review such reports and keep the Board apprised of
the status of implementation of the same.
 At the end of every financial year, the CSR and Sustainability Committee will submit its
report to the Board.

CSR Expenditure

 CSR expenditure will include all expenditure, direct and indirect, incurred by the
Company on CSR Programmes undertaken in accordance with the approved CSR Plan.
Moreover, any surplus arising from any CSR Programmes shall be used for CSR.
Accordingly, any income arising from CSR Programmes will be netted off from the CSR
expenditure and such net amount will be reported as CSR expenditure.

CONCLUSION

ITC’s vision to sustain its position as one of India's most valuable corporations through
worldclass performance, creating value for the Indian economy and the Company's stakeholders
has been standing proof of its enduring commitment to delivering superior and sustainable
stakeholder value, over the last twenty-two years of its operations. The Company's existence
was at the initial phase primarily devoted to the growth and consolidation of the Cigarettes and
Leaf Tobacco businesses; its Packaging and Printing business contributed to strategic
backward integration for the cigarettes business. The business diversification strategy it has
adopted at different times of its long journey has invariably targeted at creating value for the
nation. It also has remained for long among the top three contributors to the Exchequer. Over
the last five years, contribution to the Exchequer has increased to nearly 1.50 Lakh Crores.
Over the last twenty two years, the net revenue and post-tax profit have recorded compound
annual growth rate of 13.3% and 18.6% respectively. ITC has leveraged its enterprise
strengths to create the businesses of tomorrow which have a growing presence across all
three sectors of the economy – agriculture, manufacturing and services. The aspiration is to
be India’s no 1 FMCG company and achieve a turnover of Rs 1,00,000 crores from the new
Consumer Goods Businesses by 2030.

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