A PROJECT REPORT ON

A STUDY OF HR PRACTICES IN ITC

Under the guidance of

Vandana Sral (SMU)
(Faculty In charge)

Submitted By:
Nidhi Mall

Roll Number: 1308011972

In partial fulfillment of the requirement

for the award of the degree
Of
MBA
In

Human Resource Management

(MARCH 2015)

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 ACKNOWLEDGEMENT

I was unaware before about this type of excellent learning experience can be taken inside the
industry.

I am feeling completely grateful to God and the all relevant people who helped me for
completion of this project report as well as for my learning. First I am heartily thankful to the Ms
Vandana Sral [MBA Department], and from the deep feelings of my heart I present my gratitude
towards Mr Manjeet Singh [ITC,] [Project Guide] for his valuable guidance in the completion of
this project.

I am feeling also attached with the family of ITC For their members and departmental heads
strong support and special help, lastly but not lastly I present the feeling of gratitude towards my
parents, colleagues ,friends and all those who have supported me in completion of this training
and project report.

THANKS…

Nidhi Mall

Roll. No.1308011972

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 BONAFIDE CERTIFICATE

Certified that this project report titled “A Study of HR Practices in ITC .is the bonafide work

of “Nidhi Mall” who carried out the project work under my supervision.

SIGNATURE SIGNATURE

HEAD OF THE DEPARTMENT FACULTY IN CHARGE

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 DECLARATION

I Nidhi Mall declare that the this report title “A Study of HR Practices in ITC.” is the

outcome of my own research prepared by me and the same has not been submitted to any

university or institute for the award of any degree or diploma.

Nidhi Mall

Roll Number: 1308011972

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 TABLE OF CONTENTS

 Title page i
 Acknowledgement ii
 Bonafide Certificate iii
 Table of contents iv – v
 List of Tables vi
 List of Figures vii
 Executive Summary viii

Chapter -1 1
 Introduction
Chapter -2 2-10
 Project details 3
 Title of the project 4
 Aims and objectives of the study 4
 Problem statement
 Scope of the study
 Significance of the study

Chapter -3 11-14

 Literature review 11-12

 Company Profile 13-14
Chapter -4

 Research Methodology

Chapter -5

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  Data analysis and interpretation

Chapter -6

 Recommendations & Suggestion

 Conclusions
 Limitations of the Study

 Bibliography

Annexure

 Questionnaire

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LIST OF TABLE

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LIST OF FIGURE

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 EXECUTIVE SUMMARY

I have made this report as an essential part of IV semester course curriculum of MBA. The title
of project is “Effects of Technology on HR Practices” at ITC Lucknow.

In the course of my training I have had the golden opportunity of seeing the practical
application of whatever theoretical knowledge was imparted to me in a class room studies at
Learning Point Sec- 16 Lucknow I have had the good fortune in interacting with the
executive and employee of ITC Lucknow who were very warm and cordial in their conduct
toward me.

My report mainly focuses on “Effects of Technology on HR Practices”.

I hope that the finding of the project work must conform to the company’s expectation &
suggestion made on that basis must be useful for the total performance of the employees of the
“ITC Lucknow.”

Nidhi Mall

Roll Number: 1308011972

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CHAPTER-1

INTRODUCTION

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INTRODUCTION

My research report is entitled “A study of HR Practices in ITC”. Firstly I would like to discuss
about HR Practices.
What are HR Practices?

HR Practices are those practices which are been done by the organization for having optimum
utilization of human resource of the organization. These practices can be explained as follows:

 Recruitment & Selection

 Training & Development
 Performance Appraisal System
 Evaluation System
 Feed Back Mechanism
 Rewards to Employees
 Work Remuneration of the employees
 Increment practices

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 CHAPTER-2

TITLE OF THE PROJECT

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TITLE OF THE PROJECT

A Study of HR Practices in ITC

AIMS AND OBJECTIVES OF THE STUDY

The main objective of the study is as follows:

 To know the effects of technology on recruitment & selection procedures adopted in

this company.
 To improve training and development programs used in the company by use of
technology.
 To know how the performance of the employees is being appraised.
 To provide better employee welfare.
 To increase the labor productivity.

PROBLEM STATEMENT

SCOPE OF THE STUDY

This policy shall apply to all PERMANENT management position in the company including the
workmen.

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IDENTIFICATION OF VACANT POSITIONS
1. Total permanent manpower strength/budget for organization has been sanctioned by
the board of directors.
2. All the recruitment has necessarily to be made within the approved budget/strength
only.
3. Vacancies against the sanctioned budget may arise due to:
 Retirement
 Turnover
 Natural Separation

4. whenever a vacancy arise, the concerned department has to fill up the prescribed
manpower requisition form clearly indication the job description and specification, time
frame and send it to HR department.

SIGNIFICANCE OF THE STUDY

Human resource management is the part of the organization that is concerned with the “people”
dimension (DeCenzo and Robbins, 1996). It is a staff, or support, junction in the organizations.
Its role is to provide assistance in HRM matters to line employees, or those directly involved in
producing the organization’s goods and services. Every organization is comprised of people;
acquiring their services, developing their skills, motivating them to high levels of performance.
And ensuring to maintain their commitment to the organization is essential to achieve
organizational objectives. This is true, regardless of the type of organization; government,
business, education, health, recreation, or social action.

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 CHAPTER-3

LITERATURE REVIEW

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LITERATURE REVIEW

Company Profile

Certification of ITC

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Certification of ITC

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 COMPANY PROFILE

INDIAN TOBACCO COMPANY LIMITED

History

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of
India Limited'. Its 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. The Company's
ownership progressively indianised, and the name of the Company was changed to I.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-Exports, Foods, Lifestyle Retailing and Greeting Gifting
& Stationery - the full stops in the Company's name were removed effective September 18, 2001.
The Company now stands rechristened ‘ITC Limited’.

ITC is one of India's foremost private sector companies with a market capitalization of nearly
19505 cr. and a turnover of over is 12369 cr. ITC also ranks among India's top 10 `Most
Valuable (Company) Brands', in a study conducted by Brand Finance and published by the
Economic Times. ITC was the first company in India to voluntarily seek a corporate governance
rating. 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 has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging,

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Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel,
Personal Care, Greeting Cards, 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 and Greeting Cards.

ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is
aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-
enabled services and business process outsourcing.

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 21,000 people at more than 60 locations across India. The Company
continuously endeavors to enhance its wealth generating capabilities in a globalizing
environment to consistently reward more than 3, 97,000 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:

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
whole time 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.

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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.

Vision

Sustain ITC’s position as one of India’s most Valuable Corporation through world class
performance, creating growing value for the Indian economy and the company’s
stakeholders

Mission

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

delivering superior and sustainable Stakeholder value

ITC limited is one of the top three private sector companies in India. It is a market leader in India
in Cigarettes & Tobacco, hotels, packaging, specialty papers and paperboards. It has also entered
into the life style retailing business with the lunch of the “wills sports” range of relaxed wear. It
has also spin off its information technology (I.T) business into a wholly owned subsidiary to
more aggressively pursue emerging opportunities.
ITC has a market capitalization of around US $ 4 billion and a turnover of over US $ 1.8billion.
It employees 12,000 employees at over 60 locations across India, and nearly1, 50,000 shares
holders.
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

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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 liberalization process, India's economic scenario has begun
to alter radically. Globalization 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 recognizes the challenge of this new business
reality in India.

Indian leafs Tobacco Development (ILTD) division

The leaf & tobacco arm of ITC Ltd. For over 9 decades, has pioneered the cultivation and
development of cigarette tobacco in India. It is instrumental in making India succeed in the
global cigarette tobacco market. ITC-ILTD is head quartered (HQ) at Guntur, in the state of
Andhra Pradesh, the biggest agro-commercial center for tobacco. Mysore is the gateway to
cigarette tobacco in the state of Karnataka. Sustaining ILTD” leadership in the leaf business by
combining the virtues of tradition with modernity, and delivering goods and services efficiently
with a personal touch.

ITLD give one key to superior business performance, it is his ability to turn the perceptions
capabilities, and relationships of our people into the building blocks of the organization. His
track record, so far, stands testimony to this recognition and the future will be no different.

Tobacco & it’s processing

ITLD is controlling from tobacco seed to finally tobacco. ITLD give adoption of
contemporary Agro- techniques and the enterprising sprit of the tobacco farmer have led
to India being aknow-ledged as one of the most important tobacco producing countries in
the world. Topical climate Coupled with two monsoons facilitates the Indian farmer to
grow tobacco throughout the gear. Tobacco cultivation in India is spread over a large
geographical area covering a wide range of Soils, each growing area producing a unique

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 style of tobacco .The southern states of India, Andhra Pradesh and Karnataka are the
Prime cigarette type tobacco growing regions with 4,00,000 hectares land under Tobacco
cultivation. India is recognized as an ideal source for a variety of tobacco, offering
sustainable quality produce at competitive prices through out the Year.

ITLD’s green leaf threshing (GLT) plants with a total capacity to process 520 metric
Tones per day are comparable with the best in the world. They are fully automated with the latest
equipment to process and deliver 100 million Kg’s of high quality tobacco every year. It is no
surprise that they enjoy ISO9002 and ISO14001 accreditations. He have two processing lines in
the southern state of Andhra parades - chirala with 3 processing lines and antipathy with 1
processing line. Chirala unit is first unit in India who has received the “Coveted Social
Accountability Standard Certification (SA 8000). This unit” ware housing facilities are
benchmarked to international standard for hygiene and infestation control. ILTD have large wear
housing capacity to stock around 100 M.Kg of finishes produce (Tobacco).

Production process of cigarettes: -

The production of cigarettes in ILTD two major process. One is primary process which includes
So many sub processes, which we discussed later, and other is secondary process which includes
final packing of cigarettes and lots etc.

Primary process of cigarettes: -

Under this process ILTD start from the leaf cutting, which he received from his GLT unit chirala.
Chirala supply leaf all the production units of ILTD in 200kg size pack.
Production unit start from there point, First of all production unit cuts 200kg.pack in to 5-6 piece
and put in to machine which give moisture 10-11% to 21%of leaf and up to 38% of stamc.
After that he cut it into 30 cut and per inch length 140 cuts per inch length respectively through
cottoned rolled squire (CRS). After the processing of cutting leaf he possesses through drying
process and these times tobaccos have up to 15% moisturizer. When tobacco is cooled then he is
passed into secondary proem. Before passes secondary proem both type of cutting result [Leaf
and stems] is mixed up. The tobacco carmines and stems are then cooled and stacked in bins-
ready to be rolled into cigarettes.

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Production division of ILTD
India leaf tobacco development (ILTD) is a major department of ITC which have four major
production division across the country such as Bang lore, (Karnataka) munger (Bihar),
Saharanpur (U.P.)& Kolkatta (W.B). These all four-production division is producing billion
cigarettes per year.
One thing is cam man amery all production division is that all units producing will’s brand and
other brand of IRC is depended upon the regional requirement of cigarettes. Wills is most
valuable brand of ITC Ltd. And his share of total sales is % appox.
Brand, name and his length are as follows: -.

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Brand, name and his length are as follows: -.

S.No. Brand Name Filter/with out Filter Length

1 Classic Filter 82 mm
2 Gold Flake (King) Filter 82 mm
3 Gold Flake (Premiums) Filter 69 mm
4 Wills Navy Cut Filter 74 mm
5 Capstan Fl Filter 69 mm
6 Bristol Filter 69 mm
7 Wills Flake Filter 69 mm
8 Scissors Filter 69 mm
9 Scissors Filter 69 mm
10 Capstan Standard With out 58 mm
11 Bristol Standard With out 58 mm
12 India King Filter 82 mm

Marketing Division
ILTD have four marketing office for maintaining advertising and promotined activities. It
maintains supply of cigarette all over India. There office is situated are as follows-
1. Jalandar (Punjab)
2. Saharanpur (U.P)
3. Delhi (Capital Marking office)
4. Kanpur (U.P)

Secondary process of cigarette production

After making tobacco by primary process. Then begins the one rouse task of giving shape to the
cut tobacco and dressing it up in cigarette paper. The processed tobacco is spread every on

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cigarette paper from roll that is anywhere from 4000 to 6000 meters in length. Then some thing
like a long pencil is formed. This pencil of tobacco column rolled into cigarette paper is then cut
into predermined sections depending on the length of the cigarette.
After that, double length filters are inserted between every two cigarette and cut in half with a
strong blade.
The cigarettes get collected in aluminum trays which are then stored under controlled conditions
of temperature and humidity. After storage for a few hours these are taken to the packers
machine, which pack the cigarettes sticks into pack of 10’s and 20’s.

Working Area of ITC Ltd

ITC is now a day’s doing eight (8) major area of production, distribution and servicing. these are
as follows-

A. Cigarettes and Tobacco.

B. Hotels.
C. Packaging
D. Paper board & Specialty paper
E. Information Technology (IT)
F. Life style retailing
G. Agro-Exports
H. Group Companies etc

A. Cigarettes and Tobacco: - ITC buys nearly 50% of all cigarettes types tobacco grown in
India. It has been India “single largest integrated sources of quality tobacco for customer” in
37 countries over the last 6 decades. ITC’s Comprehensive and sophist6icated R&D facilities
cover all aspects of cultivation. Processing and packaging. ITC to process and deliver 100
million Kgs of high quality tobacco par Annam. ITC also co-operates with government
agencies to develop new varieties of tobacco and to develop new areas for tobacco
cultivation.

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B. Hotels: - ITC entered into hotels field in 1975. He is giving best hospitality services in some
field. ITC have 46 hotels across 42 destination all over India.

C. Packaging: - ITC also producing packaging items like-

I. Flip top boxes.
II. Car board outers.
III. Shells and slides.
IV. Soft cup and strap labels
V. Bundle wraps
VI. Flap boxes
VII. Inner frames
VIII. Coupon inserts & Variety
IX. Folding crotons
The major unit (factory) which is producing packaging items- one is munger (Bihar) and other is
Tiruvottiyar hear chennai.
D. Paper Board & Specialty paper: - ITC has now integrates sits paperboard & specialty paper
business into its newly created (PSPD), to how new strategic & operational synergies. ITC is
one of the world” most modern and contemn porary manufactures of packaging (paper
board) boards, with a manufacturing capacity of over 2,00,000 tones par year (1) packaging
board coasted folding box boards, solid bleached sulphates board, white unit chipboard,
liquid packaging board (2) cast coated papers and boards. The division also produced quality-

(a) Printing & Writing papers

(b) Eco- friendly papers
(c) Photo copier papers.

Specialty paper:- ITC is the premier manufacturer of specialty paper in India, with a diversified
product. Range ITC’s specialty paper are used in the manufacturer of cigarettes, decorative
laminates. Electrical equipment, fire works and automotive factory filters. They are also used for
fire printing, packaging and carbonizing.

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The division pioneered the manufacturer of specialty paper for Indian cigarette industry in 1949.
It currently offers a comprehensive range of cigarette Tissues; plug Wray, tipping base, printed
tipping papers and metailising base.

E. Information Technology (IT): - ITC has recently spun off its 20 year old information
system division into a wholly owned subsidiary to aggressively pursue growth opportunities
in this sector. ITC Infotech India Ltd offer a powerful customer value proposition based on
its in depth domain’s know ledge gained from the experience of servicing a range of internal
& external customers across diverse domains. -
1. FMCG
2. Hoteliering
3. Packaging
4. Paper boards
5. Specialty papers
6. International Trading Etc.

F. Life style retelling: - ITC also manufacturing ready made garments range of international
quality of relaxed wear under the brand name “wills sport”. It have 48 retail out across 38
cites in the country. Recently he also lunched another brand name “john players” offers
complete range of contemn porary men’s wear- like shirts, Trousers, t-shirts & denims. It
also lunches in Nov. 2002 under brand name “ the classes collection”.

G. Agro-Exports: - ITC international business division (IBD) is doing Exports activities of

Agriculture products and processed foods Etc. he exports following items to UK, US and
Other European countries-
1. Soya meal.
2. Rice
6. Aqua products.
7. Peanuts.
8. Coffee.

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9. Wheat.
10. Sesame Seeds.
11. Black pepper
12. Processed & frozen fruits & vegetables.

H. Group Companies: - Main group companies-

a). ITC Hotels.
b). Surya Nepal private limited.
c). International travel house
d). Land base
Associate companies -ITC filtrona.

ITC A RESPONSIBLE CITIZEN

ITC is a responsible corporate citizen: -

ITC is doing so many activities for the welfare of society and darks as a responsible corporate
leader without any gap. Some of its major societal activation for the welfare of different section
of society is as follows-

a. Environment, health & safety (EHS)

b. Reaching out to society
c. Preserving national heritage.
d. Supporting sustainable development

a. Envoirment, health & Safety (EHS): - As a responsible corporate citizen, ITC accords the
highest priority to environment, occupational health, and safety. It is committed to protecting the
environment in which it operates. It is equally committed to ensuring very high standard of
safety at the work place.
It is a relegations of ITC” high EHS standards that lit has been the recipient of several

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 National and international awards- such as-

ISO 14000
Sword of honour
Royal society of prevention of accidents awards.
National safety awards.
The corporate Environment award.
The golden peacock environment management award.
Excellence in pollution control management.
Prashanna patra award.
National Award for excellence in energy conservation.

b. Reaching out to society: - As a responsible corporate citizen, ITC promotes art, culture and
education. Besides working for the protection and enrichment of the environment and over
all social development.
Community development.
Education.
Protecting the environment.

c. Preserving National Heritage: - As a socially responsible corporate citizen, ITC

Endeavors to creates value for the Indian society in multiple ways, one of them being
Preservation of India” rich culture heritage ITC has made significant contribution to the
Promotion of Indian classical music, theatre, are and cuisine

GRADES FOR MANAGERS

 Senior Managers. (Managers)
 Middleman Managers.(Asst. Managers)
 Junior Managers. (Executives)

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GRADES FOR WORKERS
 Unskilled Workers.
 Semi Skilled Workers.
 Skilled Workers.
 Highly Skilled Workers.

ORGANISATION STRUCTURE / HIERARCHY

ITC a world leading electric company works as a Team System.

Hierarchy of this organization is as follows:

Unit Head (Managing Director)

Functional Heads (General Managers)

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 Departmental Heads (Managers)

Section In charge (Asst. Managers)

Supervisors (Executives)

Workers

ITC constantly endeavors to benchmark its products, services and processes to global standards.
The Company's pursuit of excellence has earned it national and international honors. 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 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
recognizing 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

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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 ‘CSR in Emerging Economies 2005’ and ‘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's cigarette factory in Kolkata is 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 14001 Environment
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 Chairman Y C Deveshwar has received several honors over the years. Notable among
them are:

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 Year Award

2007 SAM/SPG Sustainability Leadership Award conferred at the

International Sustainability Leadership Symposium, Zurich.

2006 Business Person of the Year from UK Trade & Investment, the UK
Government organisation that supports overseas businesses in that
country.
2006 Inducted into the `Hall of Pride' by the 93rd Indian Science Congress

2005 Honoured with the Teacher's Lifetime Achievement Award

2001 Manager Entrepreneur of the Year from Ernst & Young Retail
Visionary of the Year from Images, India's only fashion and retail trade
magazine

1998 Honorary Fellowship from the All India Management Association

1996 Distinguished Alumni Award from IIT, Delhi

1994 Marketing Man of the Year from A&M, the leading marketing
magazine

1986 Meridien Hotelier of the Year

ITC has won the 'Enterprise Business Transformation Award' for Asia Pacific (Apac),
instituted by Infosys Technologies and Wharton School of the University of Pennsylvania for
its celebrated e-Choupal initiative.

ITC is 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.

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

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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.

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

ITC’s market strategies are:

Create multiple drivers of growth by developing a portfolio of world class businesses that best
matches organizational 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.

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 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.

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.

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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.

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  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 concern.

Corporate Governance
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.

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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 fulfíls 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,

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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 :

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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.
ITC Ltd. 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:

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 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.
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 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.

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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

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.

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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
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.

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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.
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

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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

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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 communicated 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.

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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

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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
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.

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 1. 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.
2. 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.
3. 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.
i. 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.
ii. 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.
iii. HIV/AIDS test will not be part of the annual health check-ups unless specifically
requested for by an employee.
4. 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.

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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.

Management Approach
Policy: The Company's commitment in the area of economic performance is encapsulated in its
Vision statement, which is 'to 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'. ITC's Mission is 'to enhance the wealth generating capability of the
enterprise in a globalising environment delivering superior and sustainable stakeholder value'.
The Company's strategy is to ensure that each of its businesses is world-class and internationally
competitive in the Indian global market in the first instance, and progressively in the offshore
global markets.
ITC, as a premier 'Indian' enterprise, consciously exercises the strategic choice of contributing to
and securing the competitiveness of the entire value chain of which it is a part. This philosophy
has shaped the Company's approach to business into 'a commitment beyond the market'.
Goals and Performance: At the enterprise level the Company's goals include:
 Sustaining ITC's position as one of India's most valuable corporations
 Achieving leadership in each of the business segments within a reasonable time frame
 Achieving a Return on Capital Employed (ROCE) in excess of the Company's cost of
capital, at all times
Amongst listed companies in the private sector, ITC ranked 4th in terms of Gross Turnover and
3rd in terms of pre-tax profits for the financial year ended 31st March 2006. The Company
ranked 6th by market capitalisation amongst listed private sector companies in the country, as at
31st March 2006.
The Company has consistently achieved a ROCE well in excess of its cost of capital. Of the
Rs.10,325 crores of 'value added' by the Company during the financial year ended 31st March
2006, 74% represented Contribution to the Exchequer.
Please refer to the 'Report of the Directors and Management Discussion and Analysis' section of
the Report and Accounts 2006 (available on itcportal.com) for a detailed discussion on the
Company's market standing in each of the business segments.

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Context: Please refer to the 'Report of the Directors and Management Discussion and Analysis'
section of the Report and Accounts 2006 for a detailed discussion on the business environment,
opportunities, key challenges, etc. pertaining to each of the Company's businesses (available at
www.itcportal.com).

SWOT Analysis
The following point shows the internal and external factors affecting the market opportunities for
ITC. This SWOT analysis also shows ITC internal strengths such as their experienced
management team, a competitive product line, a global marketing realm, and the continuous
efforts by their research and development to research trends in the industry and to be creative in
exploiting those trends. Some possible opportunities noted in the SWOT analysis are the growing
markets for specialized ethnic foods and healthier food products. Another opportunity is that the
income of consumers is high enabling them to be less price sensitive, and convenience is
becoming ever more important not only to the United States but to many countries around the
world.
Although ITC has many strengths, a few weaknesses lie in the fact that the company is so large
and could possibly lose focus or have internal conflict problems. A few of the threats ITC must

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stay aware of are the ease of replicability of its product line, the almost pure competition in
pricing for its products, and the quickness of technological advances causing existing products to
be no longer the most advanced.

STRENGTHS
 Management
Experienced, broad base of interests and knowledge
 Product Line
Unique, tastes good, competitive price, and convenient
 Marketing
Diverse and global awareness
 Personnel
International, diverse positions
 International, diverse positions
High sales revenue, high sale growth, large capital base
 Manufacturing
Low costs and liabilities due to outsourcing of bottling
 Research & Development
Continuous efforts to research trends an reinforce creativity
 Consumer/Social
Huge market in the healthy products and growing market for specialized foods
for ethnic groups
 Competitive
Distinctive name, product and packaging in with regards to its markets
 Technological
Internet promotion such as banner ads and keywords can increase their sales,
and more computerized manufacturing and ordering processes can increase their
efficiency
 Economic
Consumer income is high, more tend to eat out, convenience is important to
U.S.

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 Weaknesses

 Management
Large size may lead to conflicting interests
 Product Line
New one calorie products have no existing customer base, generic brands
can make similar product – cheaper
 Marketing
May lose focus, may not be segmented enough
 Personnel
Possible conflicts due to so many people, possible trouble staying focused
 Finance
High expenses may have trouble balancing cash-flows of such a large operation.
 Research & Development
May concentrate too much on existing products, intrapreneuralship may not be
welcomed
 Consumer/Social
More expensive products than Hul. Such a high price may limit lower income
families from buying an ITC product
 Competitive
Not entirely patentable, constant replicability by competitors
 Technological
Computer breakdowns, viruses and hackers can reduce efficiency, and must
constantly update products or other competitors will be more advanced
 Economic
Very elastic demand, almost pure competition

Opportunities

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  Expected 30% CAGR in organized market to result in better footfall and conversion
rates.
 Entry into Tier 2 and Tier 3 cities.
 Collaboration with foreign players because of a national brand.
 An opportunity to diversify its operations in e-retailing.
 As big company of India can go globally.

Threats

 Employee shortage and attrition due to rapid growth in the holl market .
 Impact of slowdown in consumer spends to be felt in FMCG market.
 Opening up of economy for free entry of foreign players.

A SOCIAL CHARTER FOR BUSINESS

Few weeks ago, the Humble Prime Minister Dr Manmohan Singh presented a ten-point 'Social
Charter' sharing his vision on the responsibility of corporate for sustainable and inclusive
growth. He said, and I quote, "Indian industry must rise to the challenge of making our growth
processes both efficient and inclusive. This is our endeavor in Government. It will have to be
yours too and I seek your partnership in making a success of this giant national enterprise. If
those who are better off do not act in a more socially responsible manner, our growth process
may be at risk, our polity may become anarchic and our society may get further divided. I invite
corporate India to be a partner in making ours a more humane and just society." Unquote.

By the Y C Deveshwar mind, the Hon'ble Prime Minister's clarion call is not only a
responsibility that we, in Indian Business and Industry, must commit ourselves to but a crying
need that we cannot afford to neglect any longer. While we can justifiably be proud of India's

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stellar performance in GDP growth, the growing inequity in sharing the fruits of success is
indeed a millstone that impedes the nation's true potential. Business Corporations draw heavily
on societal resources. Therefore, it is in the enlightened self-interest of business to engage
constructively in enlarging its contribution to the broader social and environmental agenda.
Competitiveness of firms can be severely threatened by unsustainable environments and a
lopsided social structure that creates islands of affluence amidst a sea of poverty. A constructive
public-private partnership for socially responsible growth is imperative and must occupy a larger
space in the future business strategies of India's corporate sector.

You are indeed aware of the enormous importance of our rural engagement in the future growth
of your Company. We have constantly strived to meaningfully blend our social responsibilities
with business competitiveness, so that we can continue to create shareholder value even as we
enhance the benefits that accrue to rural communities. We recognize that this is the path we must
pursue to ensure sustainable and inclusive growth - a philosophy that is central to the vision
articulated by Prime Minister's Social Charter for Business. I take immense pride that the vision
enunciated by the Hon'ble Prime Minister echoes the core values that your Company has
enshrined in its management philosophy and governance structure. We have indeed been
'practitioners' of this vision for many years now. It gives me immense satisfaction that your
Company has executed, on a substantial scale, innovative business strategies which result in
'mainstreaming' the disadvantaged sections of rural India.

ITC Ltd. Company's pioneering e-Choupal initiative today comprises 6,400 choupals
transforming the lives of over 3.5 million farmers in 38,500 villages in 9 States of India. We
hope to reach out to 10 million farmers in 100,000 villages in the not too distant future. The
Social and Farm Forestry Programme of ITC covers 65,000 hectares providing over 28 million
person days of employment among the disadvantaged. In the process, we have also helped
sequester over 2,000 kilotons of Carbon Dioxide as a firm commitment to combating climate
change. Your Company's Integrated Watershed Development programmes in rural areas cover
nearly 27,000 hectares providing critical irrigation to water stressed areas. This year, we have
also forged a milestone partnership with the Government of Rajasthan for an integrated
watershed development project covering 5,000 hectares. ITC's initiatives to provide

55 | P a g e
opportunities for non-farm incomes through economic empowerment of women, supplementary
education and integrated animal husbandry services continue to make significant strides in rural
empowerment.

As a nation, we face today a multi-dimensional challenge to chart a growth path that will
transform the lives of almost a third of our billion populations who live at the margin. Surely, it
is not a task that any single segment of society - be it Government or Responsible Business - can
hope to accomplish in isolation. It is true that sustained high rates of GDP growth is one of the
surest ways of creating livelihoods for the disadvantaged. However, if such growth impulses do
not envision or contain conscious efforts to enhance social value, it is not necessary that high
growth rates alone will ensure social equity. In fact, there is a danger that competitive pressures
may not actually lead to development and growth in areas that need it the most.

ALIGNING FORCES OF FRANCHISE

Given the power of consumer franchise, how do we align forces amongst all the market
participants to support a new movement for innovative CSR?
To make 'consumer choice' a compelling market driver we would need to create a supportive
institutional framework to facilitate the process of making an informed choice by market
participants. Let me briefly elaborate on some of these enablers:

First, the Policy and Institutional Framework.

 Market participants would need an effective tool to make an informed choice in favour of
a Responsible Corporation. I would suggest that Government support the development of
a 'CSR Sustainability Trust mark', or a series of Trust marks defined by Industry
segments, which could be displayed on products and services to convey to the consumer
that the enterprise follows a strong commitment to building natural and social capital.
Voluntary in nature, these Trust marks, crafted on sound scientific and market principles,
will stand for the positive impact a company has made on the environment and the
society. The Trust marks could also be supplemented with Ratings, based on the extent of
the individual company's involvement in creating societal capital.

56 | P a g e
  The Trust marks need to be administered by a reputed and independent body or bodies,
much like the financial rating agencies. An institutional framework and appropriate
guidelines can be created by a Government-Industry partnership to provide organizational
support and credibility.
 A major impetus can emerge out of Government's consideration to extend fiscal and
financial concessions, priority clearance and other incentives to organizations that attain
sustained high ratings. Government and its agencies could also give purchase preferences
to suppliers with highly rated Trust marks.


Second, the role of Industry:

 In championing a sincere commitment to a Vision that embraces contribution to Society
as a key component of business strategy.
 In moving towards voluntary disclosure of Triple Bottom Line performance in the
Company's Annual Reports, verified by independent reputed third party organizations.
 In making a strong effort to attain the CSR Sustainability Trust marks, and displaying the
same on their products and services.
 In enlarging the Company's contribution by giving preference to vendors with a strong
CSR and Sustainability orientation.
 In developing a model code of responsible conduct by Industry bodies and associations
for its members.
 In encouraging Modern Retail outlets to develop special sections that display and sell
products with Trust marks.
 In providing support to the creation of Awards that recognize outstanding Sustainability
Performance. This would provide a tremendous reputation asset and incentives CSR
significantly.
 In strengthening reporting on Sustainability based on guidelines such as the Global
Reporting Initiative. I am sure that the Indian operations of multinationals, not listed on
Indian bourses, would also want to make such public disclosures and demonstrate their
contribution to the Indian Society. I envisage a future where Sustainability Reporting will
form an integral part of a firm's public disclosures, and will be valued by stakeholders in
equal measure to the established practices of financial reporting.

57 | P a g e
 

Third, the role of Investors.

 Investors play a critical role in encouraging social accountability in corporate behavior.
Globally, there are today hundreds of funds that invest in socially responsible enterprises.
These funds rely on Sustainability Indices such as Dow Jones Sustainability World Index,
FTSE4Good, Domini 400 Social Index and others to guide investment decisions. These
funds have already channeled large amount of investors' savings into companies that have
high social brand capital.
 India has witnessed some welcome developments in this direction in recent years. The
ABN Amro Bank launched a Sustainable Development Fund as India's first Socially
Responsible Investing Fund. Recently CRISIL, S&P and KLD have announced that they
would develop an Environmental, Social and Corporate Governance (ESG) Index of
Indian companies. The Institute of Chartered Accountants of India is also reported to be
working on developing a similar evaluation.
 Individual investors, while seeking to maximise returns from their portfolio holdings,
could exercise a powerful choice for companies with high Triple Bottom Line
performance.
 Banks and Financial Institutions could ask for voluntary disclosures and factor the rating
in their lending evaluations.

Fourth, the role of Civil Society organizations.

 Consumer awareness will benefit immensely if civil society organizations and consumer
bodies actively advocate the usage of Trust marks. They could also promote awareness
amongst constituents to support products and services of companies with higher
Sustainability ratings.
 Schools and educational institutions could also promote awareness on responsible
corporate behavior and its association with the Trust mark ratings on products and
services, and design elements in their curriculum to groom citizens of tomorrow as
enlightened consumers.
 And finally, the Media, as one of the most powerful forces of shaping public opinion, can
make a multi-dimensional contribution in this direction.

58 | P a g e
It is my strong belief that by aligning such powerful forces, we will see the emergence of a new
consciousness where CSR will transcend from corporate philanthropy to a competitive value
proposition.

ITC has been instrumental in setting up the CII-ITC Centre of Excellence for Sustainable
Development, which is a unique institution that seeks to address the void in developing requisite
capability on Sustainability issues among Indian industry. The Centre endeavors to bring about
transformational change in Indian businesses by providing thought leadership, promoting
awareness and building capacity. One of the major initiatives of the CII-ITC Centre is to
recognize excellence in Sustainability practices by presenting Awards to industry, based on a
rigorous process of selection. This attempt to recognize outstanding Sustainability initiatives is
designed not only to celebrate individual corporate action, but also to inspire others to follow.
ITC convinced that in today's enlightened India, more and more companies will respond to the
appeal made by the Hon'ble Prime Minister to forge partnerships for social action, and achieve
growth with efficiency and inclusively. Making markets work for CSR will indeed provide the
compelling foundation for such initiatives.

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 value.

Corporate Governance Policy

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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.

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.

60 | P a g e
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 committee 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 tocompromising 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.

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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.

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.

62 | P a g e
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.

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.

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

ITC, 10 other Indian firms among world's 50 'Local Dynamos'

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Going global is not the only trump card for an international recognition'. As 'many as 11 India
companies, including the likes of ICICI Bank and Bharti Airtel, have made it to a list of 50
'Local Dynamos' for mastering the dynamics of their domestic markets.

These 50 firms from the world's Rapidly Developing Economies (RDEs) are "domestically
focused, at least for now, and have devised formidable business models with which to master the
intense dynamics of their local markets," global consultancy firm Boston Consultancy Group
said in a report.

Other Indian companies in the list are two Tata Group entities Indian Hotels and Titan Industries
besides Amul; Apollo Hospitals, CavinKare Group, ITC Limited, NIIT, SKS Micro finance and
Subhiksha. Apart from the four BRIC countries - Brazil, Russia, India and China - the list also
Includes companies from Indonesia, Malaysia, Mexico, Poland, Slovakia, Poland and Thailand.

The study titled "The BCG 50 Local Dynamos - How Dynamic RDE based companies are
mastering their home markets - and what MNCs need to learn from them" has 15 companies
from China, including the internet search engine Baidu.com.

BCG said these companies were selected on the basis of criteria such as high growth and original
business model specifically adapted to the unique challenges posed by RDEs. According to
BCG, companies from RDEs are "staying home" and conquering their domestic markets.
Further, these firms are using innovative Business models to beat MNCs and established
domestic incumbents, many of which are state-owned entities.
BCG said ICICI Bank has an interest income of 5,196 million dollars as compared to its MNC
competitor, HSBC, which rakes in an interest income of 1,066 million dollars. "Withs more than
950 branches and 24 million customers, it offers a diverse range of financial products and
services and competes well against local and foreign rivals," it noted. Observing that the chosen
Dynamos target their offerings mainly at the middle class, the study said India has shown that
companies can serve the poor profitably provided they use "the right approach".

64 | P a g e
"In consumer goods, CavinKare entered the personal care market by selling shampoo in
affordable sachets to rural customers. Titan Industries produces more than seven million watches
a year... No-frills retailer Subhiksha has brought low prices and convenience to the lives of many
Indians by locating small supermarkets close' to its customers...," the study added.

Privacy Policy

 ITC Limited welcomes you to its website and looks forward to a meaningful interaction
with you.
 ITC Limited respects your right to privacy. Any personal information that you share with
us, like your name, date of birth, address, marital status, telephone number, credit card
particulars and the like, shall be entitled to privacy and kept confidential.
 ITC Limited assures you that your personal information shall not be used/disclosed by it,
save for the purpose of doing the intended business with you, or if required to be
disclosed under the due process of law.
 ITC Limited assures you that in the event of your personal information being shared with
its subsidiaries, business associates etc., such sharing of information shall be for the
purpose of doing the intended business with you.
 ITC Limited reserves its rights to collect, analyse and disseminate aggregate site usage
patterns of all its visitors with a view to enhancing services to its visitors. This includes
sharing the information with its subsidiaries, and business associates as a general
business practice.
 In the course of its business ITC Limited may hold on-line contests and surveys as
permitted by law and it reserves its right to use and disseminate the information so
collected to enhance its services to the visitors. This shall also include sharing the
information with its subsidiaries and business associates as a general business practice.
 If you have any questions or concerns regarding your privacy issues, please do not
hesitate to contact ITC Limited at webmaster@itc.in
 While ITC Limited assures you that it will do its best to ensure the privacy and security
of your personal information, it shall not be responsible in any manner whatsoever for

65 | P a g e
 any violation or misuse of your personal information by unauthorised persons consequent
to misuse of the internet environment.
 Cookies :- To personalise your experience on our website or to support one of our
promotions, we may assign your computer browser a unique random number called a
cookie. "Cookies" enhance website performance in important ways like personalising
your experience, or making your visit more convenient. Your privacy and security are not
compromised when you accept a "cookie" from our website. ITC Limited does not use
"cookies" to collect personal information. "Cookies" cannot read data from your
computer’s hard disk or read cookie files from other websites.
 ITC Limited reserves its rights to revise this privacy policy from time to time at its
discretion with a view to making the policy more user friendly.
In the design of our website, we have taken care to draw your attention to this privacy policy so
that you are aware of the terms under which you may decide to share your personal information
with us. Accordingly, should you choose to share your personal information with us, ITC
Limited will assume that you have no objections to the terms of this privacy policy.

A SOCIAL CHARTER FOR BUSINESS

A few weeks ago, the Hon'ble Prime Minister Dr Manmohan Singh presented a ten-point 'Social
Charter' sharing his vision on the responsibility of corporates for sustainable and inclusive
growth. He said, and I quote, "Indian industry must rise to the challenge of making our growth
processes both efficient and inclusive. This is our endeavor in Government. It will have to be
yours too and I seek your partnership in making a success of this giant national enterprise. If
those who are better off do not act in a more socially responsible manner, our growth process
may be at risk, our polity may become anarchic and our society may get further divided. I invite
corporate India to be a partner in making ours a more humane and just society." Unquote.

To my mind, the Hon'ble Prime Minister's clarion call is not only a responsibility that we, in
Indian Business and Industry, must commit ourselves to but a crying need that we cannot afford
to neglect any longer. While we can justifiably be proud of India's stellar performance in GDP
growth, the growing inequity in sharing the fruits of success is indeed a millstone that impedes
the nation's true potential. Business Corporations draw heavily on societal resources. Therefore,

66 | P a g e
it is in the enlightened self-interest of business to engage constructively in enlarging its
contribution to the broader social and environmental agenda. Competitiveness of firms can be
severely threatened by unsustainable environments and a lopsided social structure that creates
islands of affluence amidst a sea of poverty. A constructive public-private partnership for
socially responsible growth is imperative and must occupy a larger space in the future business
strategies of India's corporate sector.

You are indeed aware of the enormous importance of our rural engagement in the future growth
of your Company. We have constantly strived to meaningfully blend our social responsibilities
with business competitiveness, so that we can continue to create shareholder value even as we
enhance the benefits that accrue to rural communities. We recognise that this is the path we must
pursue to ensure sustainable and inclusive growth - a philosophy that is central to the vision
articulated by Prime Minister's Social Charter for Business.

I take immense pride that the vision enunciated by the Hon'ble Prime Minister echoes the core
values that your Company has enshrined in its management philosophy and governance
structure. We have indeed been 'practitioners' of this vision for many years now. It gives me
immense satisfaction that your Company has executed, on a substantial scale, innovative
business strategies which result in 'mainstreaming' the disadvantaged sections of rural India.
Your Company's pioneering e-Choupal initiative today comprises 6,400 choupals transforming
the lives of over 3.5 million farmers in 38,500 villages in 9 States of India. We hope to reach out
to 10 million farmers in 100,000 villages in the not too distant future. The Social and Farm
Forestry Programme of ITC covers 65,000 hectares providing over 28 million person days of
employment among the disadvantaged. In the process, we have also helped sequester over 2,000
kilotons of Carbon Dioxide as a firm commitment to combating climate change. Your
Company's Integrated Watershed Development programmes in rural areas cover nearly 27,000
hectares providing critical irrigation to water stressed areas. This year, we have also forged a
milestone partnership with the Government of Rajasthan for an integrated watershed
development project covering 5,000 hectares. Your Company's initiatives to provide
opportunities for non-farm incomes through economic empowerment of women, supplementary

67 | P a g e
education and integrated animal husbandry services continue to make significant strides in rural
empowerment.

As a nation, we face today a multi-dimensional challenge to chart a growth path that will
transform the lives of almost a third of our billion population who live at the margin. Surely, it is
not a task that any single segment of society - be it Government or Responsible Business - can
hope to accomplish in isolation. It is true that sustained high rates of GDP growth is one of the
surest ways of creating livelihoods for the disadvantaged. However, if such growth impulses do
not envision or contain conscious efforts to enhance social value, it is not necessary that high
growth rates alone will ensure social equity. In fact, there is a danger that competitive pressures
may not actually lead to development and growth in areas that need it the most.

There is also a significantly large cost involved in implementing value-chains that are socially
inclusive. While commensurate returns may flow over the longer term, there are indeed cost
barriers, over the short to medium term, that inhibit investments in such socially inclusive
initiatives. In the absence of strong fiscal or financial incentives, business enterprises would
hesitate to raise such investments and commit physical and human resources over a longer term.
Therefore, it is important to examine how market drivers can creatively facilitate such long-term
investments which have larger societal benefits. Corporates will be able to support a much larger
social involvement in their business strategies, if market forces facilitate such investments and
returns.

68 | P a g e
 CHAPTER-4

RESEARCH METHODOLOGY

Type of Research:

To study the effects of technology on hr practices, the descriptive research type is adopted.

Data Sources:

Primary Data:

The primary data was collected from the different departments of employees of Andromeda

Marketing Pvt. Ltd through structured questionnaires followed by personal interview.

Secondary Data:

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The secondary data was collected through manuals, journals and Internet. Data about the

company profile and other details collected from company records, websites and through

personal discussion with various executives and other employees of the company.

Type of sampling:

Proportionate Stratified Random Sampling: The sampling method used for the study is

proportionate stratified random sampling. If the number of sampling units drawn from each

stratum is in proportion to the relative population size of the stratum.

Sample Size:

The study was conducted by taking sample of 120 employees.

Sample Unit:

The sample unit is the different departments of employees of Andromeda Marketing Pvt. Ltd.

Types of Research:

There are four types of research:

1. Exploratory Research:

Exploratory research studies are also termed as formulated research studies. The main purpose of
such studies is that of formulating a problem for more precise investigation of developing the
working hypothesis from an operational point of view.

70 | P a g e
2. Descriptive Research:

Descriptive research studies, which are concerned with describing the characteristics of

particulars individual, or of a group. The main characteristics of this method are

researcher has no control over the variable, he can only report what has happened or what

is happening. The methods of research utilized in described research are survey methods

of all kinds, including comparative and correction method.

3. Experimental Research:

The most scientifically valid research is experimental research. The purpose of

experimental research is to capture cause-and-effective relationships by eliminating

competing explanations of the observed findings.

4. Panel Research:

Longitudinal studies are based on panel data methods. A panel is a sample of respondents

who are interviewed and then reinter viewed from time to time. Generally, panel data

relate to the repeated measurements of the same variables. Each family included in the

panel, records its purchases of a number of products at regular intervals, say, weekly, or

quarterly. Over a period of time, such data will reflect change in the buying behavior of

families.

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Research Instrument:

The data collected from questionnaire is utilized for having interaction with the respondents.

The free interaction which took 15-20 min with every respondent facilitated a better

understanding of the issues and also helps verify the responses by the respondents.

Questionnaire:

The data was collected with the help of a questionnaire which contains 20 questions. The time

given for filling the questionnaire is approximately 10-15 minutes.

Tools of Analysis:

Simple percentage method: Percentage method is used to calculate the opinions of the

respondents on recruitment and selection process.

NUMBER OF RESPONDENTS

FORMULA = __________________________ * 100

TOTAL NO. OF RESPONDENTS

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 CHAPTER-5
DATA INTERPRETATION

Q1. How long you are working in the organization?

Table no. 1
S.No. Working Period Percentage %
1 0 - .05 Year 7%
2 .05 – 2 Year 19%
3 2 – 3 Year 35 %
4 3 – More Year 39

Graph No. 1

73 | P a g e
 Working Period

7%

19% 1 0 - .05 Year

39%
2 .05 – 2 Year
3 2 – 3 Year
4 3 – More Year

35%

Q2. what are the various sources of recruitment in your Organization?

Table No. 2.
S.No. Source of Recruitment Percentage
1 News paper Advertisement 4%
2 References 8%
3 Management 86%
4 Others 2%

Graph No. 2

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 Source of Recruitment
2% 4%

8% 1 News paper
Advertisement
2 References

3 Management

4 Others
86%

Q3. Are you satisfied with the recruitment process of your company ?

Table No. 3
SNo. Satisfaction Level of recruitment process Percentage

1 Yes 68%
2 No. 32%

Graph No. 3

75 | P a g e
 Satisfaction Level of recruitment
process

32%
1 Yes
2 No.
68%

Q4. Are you satisfied with your organization salary increment Policy?

Table No. 4
S.No. Satisfied with salary Percentage
increment
1. Yes 47%

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2. No. 23%
3. Can’t Say 30%

Graph No. 4

Satisfied with salary increment

30%
1 Yes
47%
2 No.
3 Can’t Say

23%

Q5. Are you satisfied with the training procedure given in the Organization ?

Table No. 5
S.No. satisfied with the training Percentage
procedure

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1. Yes 68%
2. No. 32%

Graph No.5

Satisfied with the training procedure

32%

1 Yes
2 No.

68%

Q6. Are you getting regular training in your company ?

Table No. 6

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S.No. Regular training in company Percentage

1. Yes 68%
2. No. 32%

Graph No. 6

Regular training in company

32%

Yes
No.

68%

Q7. What methods is used for the performance appraisal system in your organization?

Table No. 7
79 | P a g e
S.No. Methods used for performance Percentage
appraisal
1. Forced distribution 17%
2. Ranking 72%
3. Others 11%

Graph No. 7

Methods used for performance

appraisal

11% 17%

Forced distribution
Ranking
Others
72%

Q8. Are you satisfied with your promotion activities in your Organization?

Table No. 8
S.No. Satisfaction level of Percentage
promotion activities
1. Yes 77%
2. No. 23%

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Graph No. 8

Satisfaction level of promotion activities

23%

1 Yes
2 No.

77%

Q9. Does the present performance appraisal system meet your Career advancement?

Table No. 9
S.No. Satisfied with present Percentage
performance appraisal in
career advancement

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1. Yes 66%
2. No. 6%
3. Can’t Say 28%

Graph No. 9

Satisfied with present performance appraisal

system in career advancement

28%

1 Yes
6% 2 No.
66%
3 Can’t Say

10.Are you comfortable with the working environment?

Table No. 10

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S.No. Satisfaction level of working Percentage
environment
1. Yes 91%
2. No. 9%

Graph No. 10

Satisfaction level of working environment

9%

1 Yes
2 No.

91%

CHAPTER-6
Recommendations and suggestions

There are the following suggestions being an HR student I would like to give the organization:

83 | P a g e
  Organization should keep the eyes on the recruitment process they should recruit the
employees from outside as well means from where they get the employees they should
recruit them.

 As the organization is growing faster they should emphasis on the training programs even
though their training programs are quite good.

 Organization should regularly give the increment on the salary so that who are not
satisfied they would become also satisfied.

 Organization should analyze the training methods and should adopt those methods which
are good for the employees and promotion activities should be good so that employees
are satisfied as we know this is the basic requirement of the success.

Conclusions

There are the following conclusions come up after the research of the project by filling the
questionnaire:

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  The working environment of the organization is excellent this is reason why employees
are doing the work their and they are stable there.

 Generally organization appointed the employees through the recommendations that is

references even though other sources are there.

 The employees are satisfied with the recruitment process of the organization.

 Most of the employees consider that the salary increment policy is good.

 Generally ranking method is used in the organization for the performance appraisal
system and with the promotion activities.

 As they accept that the working environment is really good this shows thye are satisfied
and the satisfaction of the employees of the organization is very necessary.

 And at last I would like to say that satisfied employees contribute more to the
organization this is the reason why ITC is growing faster.

Limitation Of Study

Every research has certain limitations and even this project is not free from it. Though
most of them could be avoided, some of them which inhibited this research are listed as
follows.

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 Sample Size taken was very small. It did not represent the whole sample universe.
For a very highly effective research the sample size has to be very big. 65 (25
employees of two companies and 15 employees of the other) chosen for this
research would not represent the whole sample.
 Sometimes employees did not respond truly. They might have been in a hurry or
busy with some other work and hence the feedback would have been given for the
sake of giving. Hence data collected cannot be said to be precise.
 In this survey there was a lack of statistical secondary data, which hindered some
of the comparative analysis which would have made this project more effective.
 The survey was conducted at the Lucknow office only in Marketing division.
Hence the results of this project cannot represent the Performance Appraisal of all
employees in other divisions and branches.

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 BIBLIOGRAPHY

Human resource management -by Subbarao

Human resource and Personnel management -by Aswathappa

Research Methodology -by C.R Kothari

Wikipedia-The Encyclopedia (www.wikipedia.com)

www.boundless.com

www.managementation.com

www.mgmtforbest.blogspot.in

www.itc.com

www.scribd.com

www.sevensteprpo.com

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 Questionnaire

1. Name:

2. Sex : Female Male

3. Age : 15-25 25-35 35-45 45-55 55-65

Above 65

4. Address ________________________________________________

_______________________________________________________
Q1. How long you are working in the organization?

S.No. Working Period

1 0 - .05 Year
2 .05 – 2 Year
3 2 – 3 Year
4 3 – More Year

Q2. what are the various sources of recruitment in your Organization?

S.No. Source of Recruitment

1 News paper Advertisement
2 References
3 Management
4 Others

Q3. Are you satisfied with the recruitment process of your company ?

SNo. Satisfaction Level of recruitment process

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1 Yes
2 No.

Q4. Are you satisfied with your organization salary increment Policy?

S.No. Satisfied with salary

increment
1. Yes
2. No.
3. Can’t Say

Q5. Are you satisfied with the training procedure given in the Organization ?

S.No. satisfied with the training

procedure
1. Yes
2. No.

Q6. Are you getting regular training in your company ?

S.No. Regular training in company

1. Yes
2. No.

Q7. What methods is used for the performance appraisal system in your organization?

S.No. Methods used for performance

appraisal
1. Forced distribution

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2. Ranking
3. Others
Q8. Are you satisfied with your promotion activities in your Organization?

S.No. Satisfaction level of

promotion activities
1. Yes
2. No.

Q9. Does the present performance appraisal system meet your Career advancement?

S.No. Satisfied with present

performance appraisal in
career advancement
1. Yes
2. No.
3. Can’t Say

10.Are you comfortable with the working environment?

S.No. Satisfaction level of working

environment
1. Yes
2. No.

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