The ITC Profile

ITC is one of India's foremost private sector companies with a market capitalisation of over US $ 30
billion and a turnover of US $ 6 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, among India's Most Respected
Companies by BusinessWorld 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 has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-
Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care,
Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its
traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly
gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded
Apparel, Personal Care and Stationery.

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's diversified status originates from its corporate strategy aimed at creating multiple drivers of
growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-
building capabilities, effective supply chain management and acknowledged service skills in
hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant
share of these emerging high-growth markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the
country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-
Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by
empowering Indian farmers through the power of the Internet. This transformational strategy, which
has already become the subject matter of a case study at Harvard Business School, is expected to
progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the
Company's marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides IT services
and solutions to leading global customers. ITC Infotech has carved a niche for itself by addressing
customer challenges through innovative IT solutions.
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.

ITC employs over 26,000 people at more than 60 locations across India. The Company continuously
endeavors to enhance its wealth generating capabilities in a globalising environment to consistently
reward more than 4,08,000 shareholders, fulfill the aspirations of its stakeholders and meet societal
expectations. This over-arching vision of the company is expressively captured in its corporate
positioning statement: "Enduring Value. For the Nation. For the Shareholder."

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 toI.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio
encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology,
Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education &
Stationery and Personal Care - the full stops in the Company's name were removed effective
September 18, 2001. The Company now stands rechristened 'ITC Limited'.

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.

Though the first six decades of the Company's existence were primarily devoted to the growth and
consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the
beginnings of a corporate transformation that would usher in momentous changes in the life of the
Company.

ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for
ITC's Cigarettes business. It is today India's most sophisticated packaging house.

In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which
was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels
business was rooted in the concept of creating value for the nation. ITC chose the hotels business for
its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large
scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position
of leadership, with over 100 owned and managed properties spread across India.

In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards

Limited, which today has become the market leader in India. Bhadrachalam Paperboards
amalgamated with the Company effective March 13, 2002 and became a Division of the Company,
Bhadrachalam Paperboards Division. In November 2002, this division merged with the Company's
Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. ITC's paperboards'
technology, productivity, quality and manufacturing processes are comparable to the best in the
world. It has also made an immense contribution to the development of Sarapaka, an economically
backward area in the state of Andhra Pradesh. It is directly involved in education, environmental
protection and community development. In 2004, ITC acquired the paperboard manufacturing facility
of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC
to improve customer service with reduced lead time and a wider product range.

In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since
inception, its shares have been held by ITC, British American Tobacco and various independent
shareholders in Nepal. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its
name was changed to Surya Nepal Private Limited (Surya Nepal).

In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major
supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues
Division (TTD). To harness strategic and operational synergies, TTD was merged with the
Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in
November 2002.

Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for
export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique and
now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh.
Now it extends to 10 states covering over 4 million farmers. ITC's first rural mall, christened 'Choupal
Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are
now operational in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh.

In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of
Expressions range of greeting cards. A line of premium range of notebooks under
brand “Paperkraft”was launched in 2002. To augment its offering and to reach a wider student
population, the popular range of notebooks was launched under brand “Classmate” in
2003. “Classmate” over the years has grown to become India’s largest notebook brand and has
also increased its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw the
launch of Children Books, Slam Books, Geometry Boxes, Pens and Pencils under
the “Classmate” brand. In 2008, ITC repositioned the business as the Education and Stationery
Products Business and launched India's first environment friendly premium business
paper under the “Paperkraft” Brand. “Paperkraft” offers a diverse portfolio in the premium
executive stationery and office consumables segment. Paperkraft entered new categories in the office
consumable segment with the launch of Textliners, Permanent Ink Markers and White Board Markers
in 2009.

ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality
relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded
its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003).
ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002.
In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills
Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single
largest B-2-B platform for the Fashion Design industry. To mark the occasion, ITC launched a special
'Celebration Series', taking the event forward to consumers.

In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC
Infotech India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC
Infotech is one of India’s fastest growing global IT and IT-enabled services companies and has
established itself as a key player in offshore outsourcing, providing outsourced IT solutions and
services to leading global customers across key focus verticals - Manufacturing, BFSI (Banking,
Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality
and Transportation) and Media & Entertainment.

ITC's foray into the Foods business is an outstanding example of successfully blending multiple
internal competencies to create a new driver of business growth. It began in August 2001 with the
introduction of'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered the
confectionery and staples segments with the launch of the brands mint-
o and Candyman confectionery and Aashirvaadatta (wheat flour). 2003 witnessed the introduction
of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast growing branded
snacks category with Bingo! in 2007. In eight years, the Foods business has grown to a significant
size with over 200 differentiated products under six distinctive brands, with an enviable distribution
reach, a rapidly growing market share and a solid market standing.

In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain
found yet another expression in the Safety Matches initiative. ITC now markets popular safety
matchesbrands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro.

ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of
its partnership with the cottage sector. ITC's popular agarbattis brands
include Spriha and Mangaldeepacross a range of fragrances like Rose, Jasmine, Bouquet,
Sandalwood, Madhur, Sambrani and Nagchampa.
ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care
products for men and women in July 2005. Inizio, the signature range under Essenza Di
Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and
women (Inizio Femme). Continuing with its tradition of bringing world class products to Indian
consumers the Company launched 'Fiama Di Wills', a premium range of Shampoos, Shower Gels and
Soaps in September, October and December 2007 respectively. The Company also launched
the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in
October 2007 and Vivel De Wills & Vivelrange of soaps in February and Vivel range of shampoos in
June 2008.

The ITC Way

ITC is a board-managed professional company, committed to creating enduring value for the
shareholder and for the nation. It has a rich organisational culture rooted in its core values of respect
for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong
corporate governance policies and systems.

ITC’s corporate strategies are :

 Create multiple drivers of growth by developing a portfolio of world class businesses that best
matches organisational capability with opportunities in domestic and export markets.

 Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging,
Agri Business and Information Technology.

 Benchmark the health of each business comprehensively across the criteria of Market
Standing, Profitability and Internal Vitality.

 Ensure that each of its businesses is world class and internationally competitive.

 Enhance the competitive power of the portfolio through synergies derived by blending the
diverse skills and capabilities residing in ITC’s various businesses.

 Create distributed leadership within the organisation by nurturing talented and focused top
management teams for each of the businesses.

 Continuously strengthen and refine Corporate Governance processes and systems to catalyse
the entrepreneurial energies of management by striking the golden balance between executive
freedom and the need for effective control and accountability.
The ITC Leadership

 Flowing from the concept and principles of Corporate Governance adopted by the Company,
leadership within ITC is exercised at three levels. The Board of Directors at the apex, as
trustee of shareholders, carries the responsibility for strategic supervision of the Company.
The strategic management of the Company rests with the Corporate Management Committee
comprising the wholetime Directors and members drawn from senior management. The
executive management of each business division is vested with the Divisional Management
Committee (DMC), headed by the Chief Executive. Each DMC is responsible for and totally
focused on the management of its assigned business. This three-tiered interlinked leadership
process creates a wholesome balance between the need for focus and executive freedom, and
the need for supervision and control.
  

Board of Directors

Audit  Compensation Nominations Investor Service Sustainability 

Committee Committee Committee Committee Committee

Corporate Management 
Committee

Divisional/ Strategic Business Unit (SBU)

Corporate Functions, each headed by a HOD
Management Committees, each headed by a
Corporate Functions include: Planning and
divisional/ SBU Chief Executive
Treasury, Accounting, Taxation, Risk
Management, Legal, Secretarial, EHS,
Business includes: FMCG, Hotels,
Human Resources, Corporate
Paperboards, Specialty Papers & Packaging,
Communications, Corporate Affairs, Internal
Agri Business and 
Audit and Research & Development
Information Technology
Board of Directors

CHAIRMAN

Y C Deveshwar

EXECUTIVE DIRECTORS

Nakul Anand P V Dhobale K N Grant

NON-EXECUTIVE DIRECTORS

A Baijal S Banerjee AV Girija Kumar

S H Khan S B Mathur D K Mehrotra

H G Powell P B Ramanujam Anthony Ruys

Basudeb Sen K Vaidyanath B Vijayaraghavan

Corporate Management Committee

 MEMBERS

Y C Deveshwar Nakul Anand P V Dhobale

Chairman Executive Director Executive Director

K N Grant Anand Nayak T V Ramaswamy

Executive Director Human Resources R&D, Projects, EH&S

S Sivakumar K S Suresh Rajiv Tandon

Agri & IT Businesses Legal Finance

B B Chatterjee  
Secretarial

Divisional Management Committees

Expand all | Collapse all
 
India Tobacco Division
Foods Division
Lifestyle Retailing Business Division
Personal Care Products Strategic Business Unit
Education & Stationery Products Strategic Business Unit
Safety Matches Strategic Business Unit
Agarbattis Strategic Business Unit
Hotels Division
Paperboards & Specialty Papers Division
Packaging & Printing Strategic Business Unit
Agri Business Division
Agri Business Division - ILTD
Global Honours

ITC constantly endeavours to benchmark its products, services and processes to global standards.
The Company's pursuit of excellence has earned it national and international honours.  ITC is one of
the eight Indian companies to figure in Forbes A-List for 2004, featuring 400 of "the world's
best big companies". Forbes has also named ITC among Asia's'Fab 50' and the World's Most
Reputable Companies.

ITC has several firsts to its credit:

ITC is the first from India and among the first 10 companies in the world to publish its
Sustainability Report in compliance (at the highest A+ level) with the latest G3 guidelinesof
the Netherlands-based Global Reporting Initiative (GRI), a UN-backed, multistakeholder international
initiative to develop and disseminate globally applicable Sustainability Reporting Guidelines.

ITC is the first Indian company and the second in the world to win the prestigious
Development Gateway Award. It won the $100,000 Award for the year 2005 for its trailblazing ITC
e-Choupal initiative which has achieved the scale of a movement in rural India. The Development
Gateway Award recognizes ITC's e-Choupal as the most exemplary contribution in the field of
Information and Communication Technologies (ICT) for development during the last 10 years. ITC e-
Choupal won the Award for the importance of its contribution to development priorities like
poverty reduction, its scale and replicability, sustainability and transparency.

ITC has won the inaugural 'World Business Award', the worldwide

business award recognising companies who have made significant efforts to create sustainable
livelihood opportunities and enduring wealth in developing countries. The award has been instituted
jointly by the United Nations Development Programme (UNDP), International Chamber of
Commerce (ICC) and the HRH Prince of Wales International Business Leaders Forum
(IBLF).

ITC is the first Corporate to receive the Annual FICCI Outstanding Vision Corporate Triple
Impact Award in 2007 for its invaluable contribution to the triple bottom line benchmarks of building
economic, social and natural capital for the nation.
 ITC has won the Golden Peacock Awards for 'Corporate Social
Responsibility (Asia)' in 2007, the Award for â€˜CSR in Emerging Economies
2005’ and â€˜Excellence in Corporate Governance' in the same year. These Awards have
been instituted by the Institute of Directors, New Delhi, in association with the World Council for
Corporate Governance and Centre for Corporate Governance.

ITC Hotel Royal Gardenia, Bengaluru is the first Indian Hotel and world's largest, to get
the LEED Platinum rating - thehighest green building certification globally.

The Company's Green Leaf Threshing plants at Chirala and Anaparti in Andhra Pradesh
are the first units of their kind in the world to get ISO 14001environment management systems
certification.

ITC's cigarette factory in Kolkatais the first such unit in India to get ISO 9000 quality
certification and the first among cigarette factories in the world to be awarded the ISO 14001
certification.

ITC Maurya in New Delhi is the first hotel in India to get the coveted ISO
14001Environment Management Systems certification.

ITC Filtrona is the first cigarette filter company in the world to obtain ISO 14001.

ITC Infotech finds pride of place among a select group of SEI CMM Level 5 companies in the
world.

ITC's Green Leaf Threshing plant in Chirala is the first in India and among the first 10
units in the world to bag the Social Accountability (SA 8000) certification.

ITC's R&D Centre at Peenya, Bengaluru has the distinction of being the first independent R&D
centre in India to get ISO 9001 accreditation and certified with ISO 14001 for Environment
Management Systems by DNV. The R&D Centre is also certified for the
standard ISO/IEC17025:2005, by National Accreditation Board for Testing and Calibration
Laboratories (NABL). This certification is awarded for "General requirement for the competence of
Testing & Callibration Laboratories".
 ITC Chairman Y C Deveshwar has received several honours over the years. Notable among
them are:

Yea
Award
r

201 The Padma Bhushan, one of the highest civilian awards in the country by the Government of
1 India in recognition of his distinguished service of a high order to the Nation.

201
The U.S.-India Business Council (USIBC) Award for Global Leadership.
0

200 SAM/SPG Sustainability Leadership Award conferred at the International Sustainability

7 Leadership Symposium, Zurich.

200 Business Person of the Year from UK Trade & Investment, the UK Government organisation
6 that supports overseas businesses in that country.

200
Inducted into the `Hall of Pride' by the 93rd Indian Science Congress.
6

200
Honoured with the Teacher's Lifetime Achievement Award.
5

200 Manager Entrepreneur of the Year from Ernst & Young. 

1 Retail Visionary of the Year from Images, India's only fashion and retail trade magazine.

199
Honorary Fellowship from the All India Management Association
8

199
Distinguished Alumni Award from IIT, Delhi.
6

199
Marketing Man of the Year from A&M, the leading marketing magazine.
4

198
Meridien Hotelier of the Year.
6

Some of the other notable recognitions are:

The Stockholm Challenge 2006 for the e-Choupal initiative. This award is for

usingInformation Technology for the economic development of rural communities.

United Nations Industrial Development Organisation (UNIDO) Award at the international

conference on Sharing Innovative Agribusiness Solutions 2008 at Cairo for ITC's exemplary
initiatives in agri business through the e-Choupal.

The Corporate Social Responsibility Crown Award for Water

Practices from UNESCOand Water Digestfor its distinguished work carried out in the water sector in
India. ITC also received the National Award for Excellence in Water Management 2007 in the
'beyond the fence' category from the CII Sohrabji Godrej Green Business Centre for its leadership
role in implementing water and watershed management practices.
 The watershed programme also won the Asian CSR Award 2007 for Environmental
Excellence given by the Asian Institute of Management. The Award recognizes and honours Asian
companies for outstanding, innovative and world-class projects. The Company also received
the Ryutaro Hashimoto Incentive Prize 2007 for Environment & Development from the Asia
Pacific Forum. This Award aims at promoting information dissemination of good practices towards
sustainable development in the Asia-Pacific region.

The Readers' Digest Pegasus Award for corporate social responsibility, recognising

outstanding work done by socially conscious companies.

The Corporate Award for Social Responsibility 2008 from The

Energy and Resources Institute (TERI) in recognition of its exemplary initiatives in implementing
integrated watershed development programmes across 7 states in India. The company also won the
award in 2004 for its e-Choupal initiative. The Award provides impetus to sustainable development
and encourages ongoing social responsibility processes within the corporate sector.

The 'Enterprise Business Transformation Award' for Asia Pacific (Apac), instituted

byInfosys Technologies and Wharton School of the University of Pennsylvania for its celebrated e-
Choupal initiative.

The Best Corporate Social Responsibility Practice Award 2008 jointly instituted by the
Bombay Stock Exchange, Times Foundation and the NASSCOM Foundation.

The NASSCOM - CNBC IT User Award 2008 in the Retail & Logistics category. The Company
has been recognised for its pro-active and holistic approach to IT adoption and the seamless
alignment of IT with business strategy. This is the fourth time that ITC has won Nasscom's Best IT
User Award since it was instituted in 2003.

The Institute of Chartered Accountants of India Award for Excellence in Financial

Reporting with its Annual Report and Accounts, adjudged as a commendable entry under the
Category 'Manufacturing and Trading Enterprises'.

The Business Today Award for the Best Managed Company in recognition of its outstanding
initiatives in the consumer products segment.

The only Indian FMCG company to have featured in the Forbes 2000 list. The Forbes 2000 is
a comprehensive ranking of the world's biggest companies, measured by a composite of sales,
profits, assets and market value. The list spans 51 countries and 27 industries.
 The NDTV Profit Business Leadership Award for being the Best Food Company of
2007. The Award has been instituted to recognise organisational excellence.

The CNBC-TV18's International Trade Award 2008 for Outstanding Exporter of the

Year in the FMCG & Food category.

ITC continues its dominance of The Economic Times' Brand Equity listing of India's 100
Biggest FMCG Brands, with three brands from its stable making it to the top five. Gold
Flake remains India's biggest FMCG brand in terms of sales. Navy Cut ranks at No. 4. ITC's
Scissors brand ranks at No 5 and is the only new entrant into the top 10.

Restaurant magazine has chosen Bukhara at the ITC Maurya, New Delhi as the best Indian

restaurant in the world and the best restaurant in Asia. Bukhara has also been adjudged one of
the top 50 restaurants in the world by the London based magazine 'The Good Food
Guide'. Bukhara is the only South Asian restaurant to figure in the list.

The "Best Supply Chain Practices Award" for time-effective and cost-efficient Logistics
Management in Organized Retail to ITC's Lifestyle Retailing Business Division (LRBD). The
awards were organized by Retailers Association of India (RAI) in association with ITW Signode - the
International leaders in packaging solutions.

For a complete business-wise list of awards, click here:

 Cigarettes

 LRBD

 Hotels

 Paperboards & Specialty Papers

 Packaging

 Agri Business Division

 Agri Business Division - ILTD

 e-Choupal

The ITC Vision & Mission

 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
To enhance the wealth generating 
capability of the enterprise in a 
   
globalising environment,
delivering superior and sustainable
stakeholder value
   
Core Values

ITC's Core Values are aimed at developing a customer-focused, high-performance organisation which
creates value for all its stakeholders:

Trusteeship

As professional managers, we are conscious that ITC has been given to us in "trust" by all our
stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis.

Customer Focus

We are always customer focused and will deliver what the customer needs in terms of value, quality
and satisfaction.

Respect For People

We are result oriented, setting high performance standards for ourselves as individuals and teams.

We will simultaneously respect and value people and uphold humanness and human dignity.

We acknowledge that every individual brings different perspectives and capabilities to the team and
that a strong team is founded on a variety of perspectives.

We want individuals to dream, value differences, create and experiment in pursuit of opportunities and
achieve leadership through teamwork.

Excellence
We do what is right, do it well and win. We will strive for excellence in whatever we do.

Innovation

We will constantly pursue newer and better processes, products, services and management practices.

Nation Orientation

We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals,
we will make no compromise in complying with applicable laws and regulations at all levels.

Corporate Governance
Definition and Purpose | The Governance Structure | Roles | Board Committees

Preamble

Over the years, ITC has evolved from a single product company to a multi-business corporation. Its
businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels,
packaging, paper and paperboards and international commodities trading. Each of these businesses is
vastly different from the others in its type, the state of its evolution and the basic nature of its
activity, all of which influence the choice of the form of governance. The challenge of governance for
ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and
yet strengthens the unity of purpose of the Company as a whole.

Since the commencement of the liberalisation process, India's economic scenario has begun to alter
radically. Globalisation will not only significantly heighten business risks, but will also compel Indian
companies to adopt international norms of transparency and good governance. Equally, in the
resultant competitive context, freedom of executive management and its ability to respond to the
dynamics of a fast changing business environment will be the new success factors. ITC's governance
policy recognises the challenge of this new business reality in India.

Definition and Purpose

ITC defines Corporate Governance as a systemic process by which companies are directed and
controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum
of societal resources, we believe that the governance process should ensure that these companies are
managed in a manner that meets stakeholders aspirations and societal expectations.

Core Principles
ITC's Corporate Governance initiative is based on two core principles. These are :

i. Management must have the executive freedom to drive the enterprise forward without
undue restraints; and

ii. This freedom of management should be exercised within a framework of effective

accountability.

ITC believes that any meaningful policy on Corporate Governance must provide
empowerment to the executive management of the Company, and simultaneously
create a mechanism of checks and balances which ensures that the decision making
powers vested in the executive management is not only not misused, but is used with
care and responsibility to meet stakeholder aspirations and societal expectations.

Cornerstones

From the above definition and core principles of Corporate Governance emerge the
cornerstones of ITC's governance philosophy, namely trusteeship, transparency,
empowerment and accountability, control and ethical corporate citizenship. ITC believes
that the practice of each of these leads to the creation of the right corporate culture in
which the company is managed in a manner that fulfils the purpose of Corporate
Governance.

Trusteeship:

ITC believes that large corporations like itself have both a social and economic
purpose. They represent a coalition of interests, namely those of the
shareholders, other providers of capital, business associates and employees.
This belief therefore casts a responsibility of trusteeship on the Company's
Board of Directors. They are to act as trustees to protect and enhance
shareholder value, as well as to ensure that the Company fulfils its obligations
and responsibilities to its other stakeholders. Inherent in the concept of
trusteeship is the responsibility to ensure equity, namely, that the rights of all
shareholders, large or small, are protected.

Transparency:

ITC believes that transparency means explaining Company's policies and actions
to those to whom it has responsibilities. Therefore transparency must lead to
maximum appropriate disclosures without jeopardising the Company's strategic
interests. Internally, transparency means openness in Company's relationship
with its employees, as well as the conduct of its business in a manner that will
bear scrutiny. We believe transparency enhances accountability.
 Empowerment and Accountability:

Empowerment is an essential concomitant of ITC's first core principle of

governance that management must have the freedom to drive the enterprise
forward. ITC believes that empowerment is a process of actualising the
potential of its employees. Empowerment unleashes creativity and innovation
throughout the organisation by truly vesting decision-making powers at the
most appropriate levels in the organisational hierarchy.

ITC believes that the Board of Directors are accountable to the shareholders,
and the management is accountable to the Board of Directors. We believe that
empowerment, combined with accountability, provides an impetus to
performance and improves effectiveness, thereby enhancing shareholder value.

Control:

ITC believes that control is a necessary concomitant of its second core principle
of governance that the freedom of management should be exercised within a
framework of appropriate checks and balances. Control should prevent misuse
of power, facilitate timely management response to change, and ensure that
business risks are pre-emptively and effectively managed.

Ethical Corporate Citizenship:

ITC believes that corporations like itself have a responsibility to set exemplary
standards of ethical behaviour, both internally within the organisation, as well
as in their external relationships. We believe that unethical behaviour corrupts
organisational culture and undermines stakeholder value.

Code of Conduct

Applicable to all directors, senior management and employees of the Company

Preamble
ITC’s Code of Conduct was circulated to the employees more than five years back and is posted on the
Company’s corporate website. This Code has now been re-drafted for better presentation. This Code is
derived from three interlinked fundamental principles, viz. good corporate governance, good corporate
citizenship and exemplary personal conduct.

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Philosophy

ITC is a professionally managed organisation and the core value underlying our corporate philosophy
is "trusteeship". We believe this organisation has been handed to us by the various stakeholders in
"trust" and we as professionals are the "trustees" of these stakeholders. It is therefore our
responsibility to ensure that the organisation is managed in a manner that protects and furthers the
interests of our stakeholders. We recognise society as an important stakeholder in this enterprise and
therefore it is part of our responsibility to practise good corporate citizenship.

It is also our belief that in order to serve the interests of our stakeholders in perpetuity, we must build
ITC into an institution whose dynamism and vitality are anchored in its core values.

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Corporate Governance Policy

The Corporate Governance Policy is the apex level instrument guiding conduct of the affairs of the
Company and clearly delineates the roles, responsibilities and authorities of the key entities in the
governance structure of the Company. This Code forms an integral part of the Company’s Governance
Policy. The directors, senior management and employees must adhere to the Corporate Governance
Policy of the Company.

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Good Corporate Citizenship

In the conduct of the Company’s business, the practice of good corporate citizenship is a prerequisite
and embraces the following:

Dealing with People in the Organisation

In dealing with each other, directors, senior management and employees shall uphold the values
which are at the core of our HR Philosophy - trust, teamwork, mutuality and collaboration,
meritocracy, objectivity, self respect and human dignity. Indeed, these values form the basis of our
HR management systems and processes. In selection and recruitment, while meritocracy will be a
prime criterion, managers will scrupulously consider all factors that go towards securing the interests
of the Company. ITC will focus on meritocracy, equity and upholding of Company values in all people
processes including performance management systems, appraisals, remuneration and rewards.

A Gender Friendly Workplace

As a good corporate citizen, ITC is committed to a gender friendly workplace. It seeks to enhance
equal opportunities for men and women, prevent/stop/redress sexual harassment at the workplace
and institute good employment practices.

Sexual harassment includes unwelcome sexually determined behaviour such as: unwelcome physical
contact; a demand or request for sexual favours; sexually coloured remarks; showing pornography
and any other unwelcome physical, verbal or non-verbal conduct of a sexual nature.

ITC maintains an open door for reportees; encourages employees to report any harassment concerns
and is responsive to employee complaints about harassment or other unwelcome and offensive
conduct. A Grievance Committee on Gender Issues has been constituted to enquire into complaints
and to recommend appropriate action, wherever required.

ITC demands, demonstrates and promotes professional behaviour and respectful treatment of all
employees.

Relationships with Suppliers and Customers

All directors, senior management and employees shall ensure that in their dealings with suppliers and
customers, the Company’s interests are never compromised. Accepting gifts and presents of more
than a nominal value, gratuity payments and other payments from suppliers or customers will be
viewed as serious breach of discipline as this could lead to compromising the Company’s interests.

Legal Compliance

It is the Company’s policy to comply fully with all applicable laws and regulations. Ensuring legal and
regulatory compliance is the responsibility of the Chief Executives of the Businesses and the Divisional
Management Committees. The Company cannot accept practices which are unlawful or may be
damaging to its reputation. Divisional Management Committees must satisfy themselves that sound
and adequate arrangements exist to ensure that they comply with the legal and regulatory
requirements impacting each business and identify and respond to developments in the regulatory
environment in which they operate. In the event the implication of any law is not clear, the Company’s
Legal Department shall be consulted for advice.

Health and Safety

The Company attaches great importance to a healthy and safe work environment. ITC is committed to
provide good physical working conditions and encourages high standards of hygiene and
housekeeping. Particular attention should be paid to training of employees to increase safety
awareness and adoption of safe working methods, particularly designed to prevent serious or fatal
accidents.

Environment Policies

The Company believes that commitment to sustainable development is a key component of

responsible corporate citizenship and therefore deserves to be accorded the highest priority.
Accordingly, the Company is committed to Best Practices in environmental matters arising out of its
business activities and expects each business to fully demonstrate this commitment.

In addition to complying with applicable laws and regulations, Businesses must establish procedures
for assessing the environmental effects of their present and future activities. They should adopt Best
Practices in their environmental policies and procedures.

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Personal Conduct

All directors, senior management and employees have the obligation to conduct themselves in an
honest and ethical manner and act in the best interest of the Company at all times. They are expected
to demonstrate exemplary personal conduct through adherence to the following:

Avoidance of Conflict of Interest

All directors, senior management and employees must avoid situations in which their personal interest
could conflict with the interest of the Company. This is an area in which it is impossible to provide
comprehensive guidance but the guiding principle is that conflict, if any, or potential conflict must be
disclosed to higher management for guidance and action as appropriate.

Transparency and Auditability

All directors, senior management and employees shall ensure that their actions in the conduct of
business are totally transparent except where the needs of business security dictate otherwise. Such
transparency shall be brought about through appropriate policies, systems and processes, including as
appropriate, segregation of duties, tiered approval mechanism and involvement of more than one
manager in key decisions and maintaining supporting records. It shall be necessary to voluntarily
ensure that areas of operation are open to audit and the conduct of activities is totally auditable.

Protection of Confidential Information

No director, senior management and employee shall disclose or use any confidential information
gained in the course of employment/ association with the Company for personal gain or for the
advantage of any other person. No information either formally or informally shall be provided to the
press, other publicity media or any other external agency except within approved policies.

Company Facilities

No director, senior management and employee shall misuse Company facilities. In the use of Company
facilities, care shall be exercised to ensure that costs are reasonable and there is no wastage.

Leading by Example

The organisation’s directors and senior management set the professional tone for the Company.
Through both their words and their actions, the organisation’s leadership conveys what is acceptable
and unacceptable behaviour. ITC’s directors, senior management and employees must constantly
reinforce through their actions and behaviour that ITC’s stated beliefs of responsible corporate
citizenship are rooted in individual conviction and personal integrity.

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Waivers

Any waiver of any provision of this Code of Conduct for a director, senior management or employee
must be placed for approval before the Company’s Board of Directors/ Corporate Management
Committee, as appropriate.

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Non Adherence

Any instance of non-adherence to the Code of Conduct / any other observed unethical behaviour on
the part of those covered under this Code should be brought to the attention of the immediate
reporting authority, who shall in turn report the same to the Head of Corporate Human Resources.

* Senior management for the purpose of this Code would mean the following:
- Managers at Grade ‘A’ & its equivalent, and above
- Divisional & SBU Chief Executives
- Corporate HODs
* This Code of Conduct, as adopted by the Board of Directors of the Company on 26th March, 2005, 
   was amended on 29th March, 2006.

Policy on Human Rights

ITC believes that all its employees must live with social and economic dignity and freedom, regardless
of nationality, gender, race, economic status or religion. In the management of its businesses and
operations therefore, ITC ensures that it upholds the spirit of human rights as enshrined in existing
international standards such as the Universal Declaration and the Fundamental Human Rights
Conventions of the ILO.

Policy
ITC upholds international human rights standards, does not condone human rights abuses, and
creates and nurtures a working environment where human rights are respected without prejudice.

Implementation
The Corporate Human Resources function of ITC is responsible for the Human Rights Policy design,
implementation and updation.

The policy is implemented at all locations of ITC through a set of separate policies and procedures
covering each of the main constituents of human rights applicable at the workplaces.

Monitoring & Audit

The assessment procedures for different constituents of this policy are defined against each specific
policy.

Consideration of Human Rights Impacts Across the Supply Chain

As a large and multi-product enterprise whose products are benchmarked nationally and
internationally, ITC's main supply chains can be grouped as follows:

1. For all its operations, technology, machinery and equipment are sourced from reputed
and globally benchmarked suppliers/vendors who are expected to follow internationally
accepted norms and standards on human rights.

2. ITC's major businesses are vertically integrated across several Divisions. A substantial
part of the supply chain is therefore internal through strategic backward linkages.
Common values relating to human rights performance are shared across this supply
chain.

3. Being a major agri-based company, the agriculture sector is a major supplier of inputs
for its operations. The bulk of agricultural commodities are procured from state
controlled trading platforms and the open market.

4. A very small proportion of ITC's business consists of supply chains comprising local
vendors and suppliers. The policy framework for such entities is enunciated separately
in 'Policy to Ensure Respect for Human Rights across the Supply Chain'.

Policy to Ensure Respect for Human Rights Policy across the Supply
Chain
ITC provides products and services of superior quality and value by sourcing its technologies,
equipment and inputs from reputed international and Indian manufacturers and suppliers. Common
values, relating to human rights performance, are shared across the entire supply chain because ITC
is committed to the importance of a socially responsible and accountable supply chain.

Policy
ITC nurtures an internal working environment which respects human rights without prejudice.
Likewise, it expects its business partners to establish a human rights compliant business environment
at the workplace.

Implementation
The responsibility for implementation of this policy rests with the Divisional Chief Executive of the
concerned business and the Unit Manager. The policy is communicated internally through policy
manuals and intranet portals, and externally by the HR personnel of concerned units to
vendors/suppliers.

Monitoring & Audit

ITC has established a policy intent for mapping/monitoring progress and performance of existing and
potential vendors/suppliers on human rights performance.

Policy to Prevent Discrimination at Workplace

ITC acknowledges that every individual brings a different and unique set of perspectives and
capabilities to the team. A discrimination-free workplace for employees provides the environment in
which diverse talents can bloom and be nurtured. This is achieved by ensuring that a non-
discrimination policy and practice is embedded across the Company in line with corporate principles
and benchmarked business practices.

Policy
ITC's approach to its human resources is premised on the fundamental belief in fostering meritocracy
in the organisation which, pari passu, promotes diversity and offers equality of opportunity to all
employees. ITC does not engage in or support direct or indirect discrimination in recruitment,
compensation, access to training, promotion, termination or retirement based on caste, religion,
disability, gender, age, race, colour, ancestry, marital status or affiliation with a political, religious, or
union organization or minority group.

Implementation
The policy is communicated to all employees through induction programmes, policy manuals and
intranet portals.

The custodian of this policy is the head of each operational unit and Divisional Chief Executives of the
respective business.
ITC's complaints resolution procedure is premised on the freedom of employees to approach higher
officials beyond his/her immediate superior. For the unionised employees, compliance of the policy is
ensured through a robust grievance handling procedure and the presence of a union that brings
violations to the notice of the unit HR head.

Monitoring & Auditing

The accountability for the application of the non-discrimination employment policy rests with the Unit
Head who reviews anti-discriminatory complaints annually or on a case-by-case basis.

The Corporate Human Resources function conducts non-discrimination reviews annually on a sample
basis with unit heads and through on-site assessments.

Policy on Freedom of Association

ITC's culture is characterized by cooperative relationships and high employee involvement that relies
on building partnerships and interdependence. Adhering to these principles has helped build, sustain
and strengthen harmonious employee relations in the organisation.

Policy
ITC respects the employees' right to organize themselves into interest groups as initiatives of the
workers, independent from supervision by the management. In keeping with the spirit of this Policy,
employees are not discriminated against for exercising this right.

Implementation
The policy is comunicated to all employees through induction programmes, policy manuals and
intranet portals.

The custodian of this policy is the HR head of each operational unit who reports directly to Unit Head
on such issues.

The actualisation of this policy is evident from the joint agreements and minutes that are signed
between the union and the management.

Monitoring & Audit

Each ITC Unit has appropriate systems and checks to ensure compliance with the Policy and statutory
provisions, including means for filing of grievances, collective bargaining agreements and minutes
from worker meetings.
Compliance with the Policy is regularly monitored by Divisional and Corporate HR.

Policy Prohibiting Child Labour and Preventing Forced Labour from

Workplace
The foundation of ITC's "No Child or Forced Labour policy" is based on the Company's commitment to
find practical, meaningful and culturally appropriate responses to support the elimination of such
labour practices. It thus endorses the need for appropriate initiatives to progressively eliminate these
abuses.

Policy
ITC does not employ any person below the age of eighteen years in the workplace.

ITC prohibits the use of forced or compulsory labour at all its units. No employee is made to work
against his/her will or work as bonded/forced labour, or subject to corporal punishment or coercion of
any type related to work.

Implementation
This policy is publicly available throughout the Company and clearly communicated to all employees in
a manner in which it can be understood through induction programmes, policy manuals and intranet
portals.

The responsibility for the implementation of the policy rests with the Units HR Department and the
security staff who do not permit underage persons to enter the factory as workers.

Employment contracts and other records documenting all relevant details of the employees, including
age, are maintained at all units and are open to verification by any authorized personnel or relevant
statutory body.

Compliance with the policy is evident in the transparent system of recruitment and the policy of exit
interviews which are undertaken by a manager not directly connected with the employee. For the
unionised employees, compliance is also ensured through a robust grievance handling procedure and
the presence of a union that brings violations to the notice of the unit HR head.

Monitoring & Audit

Sample checks of the records are undertaken annually by Corporate Human Resources function.

Audit and assessment is undertaken annually by Corporate Internal Audit and the Environment,
Occupation Health and Safety function.

Policy on Information and Consultation on Changes

ITC's core values support an employee engagement process that aligns its employees with a shared
vision and purpose of the Company in the belief that every individual brings a different perspective
and capability to the team. ITC thus harnesses the creative potential of all its employees by promoting
a culture of partnerships to unleash relevant synergies between different groups of employees.
Policy
All major changes in operations involving work processes, manning norms and other productivity
linked issues are carried out after discussions with the employees and the recognized unions at each
location.

Implementation
Business plans are shared with employees at all units through a series of formal communication
meetings, and through the intranet portals. Unionised employees at the concerned units are informed
of all major changes well in advance through their representatives.

The responsibility for the implementation of the policy rests with the Unit's HR Department in the case
of unionized employees and with the concerned Divisional Management Committees for other
employees.

The employees are given enough time to consider the implications of change and an opportunity to
discuss their apprehensions, if any, with the management.

The Policy is actualised through consultative meetings with representatives of employees, culminating
in joint minutes/agreements.

Monitoring & Auditing

Compliance with the Policy is regularly monitored by the Unit Head.

HIV/AIDS: Policy Guidelines

Background
ITC is committed to providing a safe and healthy work environment to all its employees. These policy
guidelines on HIV/AIDS are an endorsement of this commitment and, in particular, of the Company's
commitment to specific programmes and actions in response to the HIV epidemic.

The Company's position is based on scientific and epidemiological evidence that people with HIV/AIDS
do not pose a risk of transmission of the virus to co-workers by casual, non-sexual contact in the
normal work setting.

Policy Guidelines

1. Compliance
The Company's policies on HIV/AIDS with regard to its employees will, at a minimum,
comply with all relevant Central and State legislation and the Company will implement
all policies and directions of the Government regarding HIV/AIDS whenever issued.
2. Prevention through Awareness
The Company will provide to all its employees sensitive, accurate and the latest
information about risk reduction strategies in their personal lives, with the objectives of
reducing the stigma of HIV/AIDS, encouraging safe behaviour and improving
understanding of treatment.

3. Safe and Healthy Workplace

The Company is committed to providing a safe and healthy workplace to all its
employees. It is the Company's objective that employees will have access to health
services to prevent and manage HIV/AIDS.

4. Non-discrimination
The Company will not discriminate against any employee infected by HIV/AIDS with
regard to promotions, training and other privileges and benefits as applicable to all
employees.

1. A HIV positive employee will be allowed to continue to work in his/her job

unless

Medical conditions interfere with the specific job being done, in which case
reasonable alternative working arrangements will be made; or

The employee is incapacitated to perform his/her duties and is declared

medically unfit by a medical doctor, in which case the employee will be assisted
to rehabilitate himself/herself outside the Company.

2. The Company will not make pre-employment HIV/AIDS screening mandatory as

part of its fitness to work assessment. Screening of this kind refers to direct
methods (HIV testing), indirect methods (assessment of risk behaviour), and
questions about HIV tests already taken.

3. HIV/AIDS test will not be part of the annual health check-ups unless specifically
requested for by an employee.
 5. Confidentiality
Voluntary testing for HIV/AIDS when requested for by the employee, will be carried out
by private or community health services and not at the workplace.

There will no obligation on the part of the employees to inform the Company about their
clinical status in relation to HIV/AIDS.

Information on clinical diagnosis of an employees' status in terms of his/her HIV/AIDS

status if advised to the Company, will be kept strictly confidential.

ITC's EHS Policy

ITC’s mission is to sustain and enhance the wealth-generating capacity of its portfolio of businesses in
a progressively globalising environment. As one of India’s premier corporations employing a vast
quantum of societal resources, ITC seeks to fulfil a larger role by enlarging its contribution to the
society of which it is a part. The trusteeship role related to social and environmental resources,
aligned to the pursuit of economic objectives, is the cornerstone of ITC’s Environment, Health and
Safety philosophy. ITC’s EHS philosophy cognises for the twin needs of conservation and creation of
productive resources.

In the multi-business context of ITC, Corporate Strategies are designed to create enduring value for
the nation and the shareholder, through leadership in each business and the attainment of world-class
competitive capabilities across the value chain. The objective of leadership extends to all facets of
business operations including Environment, Health and Safety.

ITC is, therefore, committed to conducting its operations with due regard for the environment, and
providing a safe and healthy workplace for each employee. Various international and national awards
and accreditations stand testimony to ITC’s commitment to EHS. Such external recognition further
reinforces the need to direct the collective endeavour of the Company’s employees at all levels
towards sustaining and continuously improving standards of Environment, Health and Safety in a bid
to attain and exceed benchmarked standards, whether regulatory or otherwise.

In particular, it is ITC’s EHS policy -

 To contribute to sustainable development through the establishment and

implementation of environment standards that are scientifically tested and meet the
requirement of relevant laws, regulations and codes of practice.

 To take account of environment, occupational health and safety in planning and

decision-making.
  To provide appropriate training and disseminate information to enable all employees to
accept individual responsibility for Environment, Health and Safety, implement best
practices, and work in partnership to create a culture of continuous improvement.

 To instil a sense of duty in every employee towards personal safety, as well as that of
others who may be affected by the employee’s actions.

 To provide and maintain facilities, equipment, operations and working conditions which
are safe for employees, visitors and contractors at the Company’s premises.

 To ensure safe handling, storage, use and disposal of all substances and materials that
are classified as hazardous to health and environment.

 To reduce waste, conserve energy, and promote recycling of materials wherever

possible.

 To institute and implement a system of regular EHS audit in order to assure compliance
with laid down policy, benchmarked standards, and requirements of laws, regulations
and applicable codes of practice.

 To proactively share information with business partners towards inculcating world-class

EHS standards across the value chain of which ITC is a part.

All employees of ITC are expected to adhere to and comply with the EHS Policy and Corporate
Standards on EHS.

ITC’s EHS Policy extends to all sites of the Company. It will be the overall responsibility of the
Divisional/SBU Chief Executives, through the members of their Divisional Management Committees,
General Managers and Unit Heads, to ensure implementation of this Policy and Corporate Standards
on EHS, including formation of various committees and designating individuals for specific
responsibilities in respect of their Division/SBU.

The Corporate EHS Department is responsible for reviewing and updating Corporate Standards on
EHS, and for providing guidance and support to all concerned.

Research & Development

ITC is committed to delivering world-class products and services. This requires a clear focus
on continuously striving to create a higher value to customers by achieving excellence in all
Company's operations. Business excellence calls for a passionate focus on technology,
products, services, processes and an operating environment firmly anchored to an
impregnable foundation of Quality.
 ITC firmly believes that quality is not a specifically assignable
task. It needs to be firmly rooted and institutionalized in the culture and value system of the
Company. ITC nurtures a culture of striving for continuous improvement in quality, be it in products,
services, systems or performance. The Company is committed to the establishment of systems and
processes to promote organisational creativity and innovation.

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.

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.

ITC's Research & Development Centres

At ITC's Research & Development Centres at Bengaluru,

Bhadrachalam and Rajahmundry, the Company has assembled a pool of world-class scientists
focused on providing the requisite R&D support to its established and new businesses enabling the
Company to consistently attain internationally benchmarked quality standards and constantly offer
product innovations.
ITC R&D Centre at Bengaluru provides systemized service to the entire range of ITC's businesses
through Product Technology Cells, Common Service Modules, Advanced Research
Initiatives and networking with national and international R&D centres.

Product Technology Cells (PTCs) are product-specific. Each PTC caters to the needs of the
businesses through Market Intelligence, Product Testing & PQRS services, Prototyping services
through advanced pilot plants, flavour and fragrance development services, periodic audit of factory
quality systems and Product Knowledge and Training Workshops.

PTCs assist businesses through sensory evaluations by highly trained and specialised panelists.
Common service modules like Packaging and Advanced Analytical labs offer their services across all
businesses.

ITC R&D Centres are manned by highly qualified and trained

scientists specialised in their fields. The labs and pilot plants have ultra modern, state-of-the-art
testing and prototyping facilities. The laboratory at Bengaluru has obtained accreditation from NABL
(National Accreditation Board for Testing & Calibration of Laboratories) for ISO 17025 for
key testing protocols.

ITC Corporate R&D located in Bengaluru undertakes research programs for multiple ITC businesses
built on a common set of core competencies. The initial sets of core competency areas identified
are: Plant Breeding and Genetics, Agronomy, Microbiology, Molecular Biology, Silviculture,
Cell Biology, Proteomics, Genomics, Biochemistry and Ingredient Sciences. The facility aims
to create 'Centres of Excellence' in these areas.

ITC's R&D programme at Bhadrachalam is the core of the

Company's fibre strategy for its Paperboards and Specialty Papers business. This state-of-the-art
research centre is consistently striving to improve the productivity of several tree species, in order to
give attractive land-use alternatives to traditional farmers and wasteland owners. So far, more
than100 high-yielding, fast-growing and disease resistant 'Bhadrachalam' clones have been
produced on a commercial scale, including 23 site-specific clones adapted to problematic soils. The
productivity of these saplings is 6-9 times that of normal seedlings.

ITC's comprehensive R&D facilities at Rajahmundry in Andhra

Pradesh cover all aspects of tobacco crop cultivation. In collaboration with the Central Tobacco
Research Institute and the Tobacco Board, ITC pioneered FCV tobacco cultivation in India and
introduced the Burley and HDBRG varieties. ITC's continued focus on crop development has resulted in
new varieties of seeds and hybrids in Andhra Pradesh and Karnataka, which have significantly
improved farm yields and helped fulfill the demands of a dynamic global market.

The Company's R&D team collaborates with other centres of excellence, and leverages expertise from
several leading institutes including the University of Agricultural Science, Bengaluru; Indian Institute
of Science, Bengaluru; CSIOR, Australia and CSIR, South Africa.

Catering to the need of ITC's Lifestyle Business is a contemporary master Design Facility at

Gurgaon. It offers R&D facilities that have enabled the Company to offer internationally benchmarked
fashion collection every season.