ITC is driven by its inspiration to be an exemplary Indian enterprise serving larger national priorities. Spanning all the three sectors of the economy - agriculture, manufacturing and services - ITC's businesses make a unique contribution to the economy. The Company's relentless efforts to pursue extreme competitiveness, make societal value creation the core of its business strategy, invest in game-changing R&D and science-led innovation as well as state-of-the-art infrastructure will contribute to making the future even more sustainable and profitable.
At ITC, the credo of Country before Corporation defines the Company's nation-orientation, and its aspiration to contribute to a future of rapid progress and prosperity.
ITC is inspired by the clarion call to Make in India, given the enormous promise it holds to transform the Indian economy. Make in India can ensure a significantly higher order value capture in the Indian economy, fuelling jobs, maximising revenue and enabling sustainable development.
The Company has transformed itself into a multi-business enterprise with a diversified business portfolio of FMCG, Paperboards & Packaging, Agri-Business, Hotels and Information Technology. This provides ITC a substantial opportunity to contribute meaningfully to the growth and development of the country by creating vibrant businesses of tomorrow. Over 6 million sustainable livelihoods have been created by ITC's businesses and through the empowerment of associated value chains.
ITC has created world-class Indian brands that create, capture and retain larger value within the country. Some of ITC's popular FMCG brands have built significant market standing over a short period of time. These include Aashirvaad, Sunfeast and its sub-brands Dark Fantasy, Delishus, Farmlite, Yumfills, Mom's Magic and Bounce; Bingo!, YiPPee!, B Natural, Candyman, mint-o, GumOn, Kitchens of India and Aashirvaad Svasti in the Branded Packaged Foods space; Classmate and Paperkraft in Education & Stationery products; Essenza Di Wills, Fiama Di Wills, Vivel, Engage, Savlon, Shower to Shower and Superia in the Personal Care Products segment; Wills Lifestyle and John Players in the Lifestyle Retailing Business; Mangaldeep in Agarbattis and Aim in Matches.
It is ITC's aspiration to become India's no 1 FMCG player. The Company aims at achieving a revenue of Rs 1,00,000 crores from the new FMCG businesses by 2030.
The Company has established state-of-the-art brick and mortar assets that add to the nation's industrial prowess. Currently, 65 projects with an investment of Rs 25,000 crores are under implementation or in an advanced stage of planning. These include factories, warehouses, luxury hotels, R&D facilities, office and residential complexes.
ITC has invested in cutting edge R&D to foster breakthrough innovation and create powerful sources of sustainable competitive advantage for the country. With a team of nearly 350 world-class scientists, the state-of-the-art ITC Life Sciences & Technology Centre in Bengaluru is engaged in building future readiness by harnessing contemporary advances in science and technology, applying them in product development and leveraging cross-business synergies. ITC's R&D capabilities are utilised to develop future products in nutrition, health and well-being. In agri-sciences, its efforts are aimed at developing new crop varieties with higher yields and better quality. In a short span of time, ITC has applied for over 480 patents. The intellectual property residing in these filings belongs to India as the country of origin, creating enduring value for the nation.
ITC's multipronged social investment programmes help build the capacity of the weakest in society while its pursuit of a low carbon growth strategy contributes to combatting climate change. ITC's wide spectrum of sustainability initiatives and social investments is manifest in several large-scale programmes covering 166 districts in 26 states.
The celebrated ITC e-Choupal initiative has empowered 4 million Indian farmers. Integrated Watershed Development programmes bring soil and moisture conservation to nearly 2,60,000 hectares. Afforestation initiatives have greened over 2,25,000 hectares, providing more than 100 million person-days of employment. The Women Empowerment programme provides livelihood opportunities to over 50,000 women, which includes a holistic intervention currently supporting over 10,000 ultra-poor and marginalised women towards their socio-economic mainstreaming. The Primary Education programme has reached out to over 4,60,000 children. The Livestock Development programme has covered over 13,00,000 milch animals. ITC's Skilling & Vocational Training Programme has, so far, trained over 31,000 youths and plans to cover 10,000 youths annually. Under ITC's Health & Sanitation programme, over 15,400 individual household toilets have been constructed across the country. In addition, the Company's Wellbeing Out of Waste (WOW) initiative inculcates the habit of sources segregation and waste paper recycling among communities.
ITC is the only enterprise in the world of comparable dimensions to be carbon positive (11 years in a row), sequestering more than twice the amount of carbon it emits; water positive (14 consecutive years), creating water harvesting potential that is thrice the water it consumes; and solid waste recycling positive (for the last 9 years). Over 47% of the total energy requirement of the Company is met from renewable sources, a testimony to its commitment to a low carbon growth path. All ITC's premium luxury hotels have the unique distinction of being LEED® Platinum certified.
Over the past two decades, ITC has built a robust portfolio of businesses spanning FMCG, Paperboards & Packaging, Agri Business, Hotels and Information Technology, leveraging synergies from the Company's enterprise strengths. These encompass deep consumer insight, cutting-edge Research & Development, strong rural linkages, superior agri-sourcing, world-class manufacturing, brand-building skills, culinary expertise, innovative consumer packaging, digital technology and an effective trade marketing, distribution and logistics network.
Today, ITC has an impressive presence in all the three sectors of the economy, namely, agriculture, industry and services, providing unique sources of competitive advantage by harnessing the diversity resident in different businesses. All this has enlarged the Company's capacity to contribute to national priorities and create sustainable livelihoods on a much larger scale.
It is mission critical today to create world-class Indian brands through ownership of intellectual property. It is only then that a virtuous cycle of innovation and investment will create new opportunities for growth and lead to the generation of higher order sustainable livelihoods.
Creation of a new generation of world-class brands demands tremendous staying power with substantial investment commitments over the long haul.
ITC has tirelessly endeavoured to build world-class Indian brands. In a relatively short span of time, a vibrant architecture of popular brands has been crafted organically. Some of them are already clear market leaders in their segments. In aggregate, these new consumer brands currently represent an annualised consumer spend of over Rs. 12,000 crores.
Such world-class Indian brands help create, capture and retain larger value for the Indian economy. In addition to spurring investments and growth, such brands can become a force multiplier for inclusive and sustainable development. By serving as market anchors, these brands can lend relative stability to drive the competitiveness of the entire value chain of which they are a part. This in turn can further empower the weakest in the economic value chain and generate considerable sustainable livelihood opportunities so critical for our country.
ITC's vision to contribute to a sustainable, secure and inclusive future has brought about transformational change, particularly in areas of its engagement in rural India. Apart from ITC's e-Choupal that has helped raise farm productivity and incomes, the Company's social investment programmes have created large-scale sustainable livelihoods along with environmental replenishment that promotes climate change resilience.
These widely acknowledged initiatives include Afforestation, Watershed Development, Livestock Development, Women Empowerment, Primary Education, Vocational Training and Health & Sanitation.
ITC is investing in India's future by building world-class assets that will contribute to the country's competitive capacity. This ambitious investment plan, underpinning ITC's support to the Make in India vision, envisages an outlay of Rs. 25,000 crores in 65 projects across the country.
These include state-of-the-art Integrated Consumer Goods Manufacturing and Logistics facilities, luxury hotels, R&D facilities, office and residential complexes that are being set up across regions, contributing to balanced economic development. These investments will not only add substantially to ITC's competitive ability but also spur livelihood creation along the entire value chain.
At ITC, creating intellectual capital is being driven by a nearly 350-strong diverse pool of highly qualified world-class scientists at the state-of-the-art Life Sciences & Technology Centre in Bengaluru.
In a short period of time, ITC has filed more than 480 patent applications. The distinction does not lie as much in the number of patents filed, as in the fact that the intellectual property resident in these filings belongs also to the country of origin, that is India.
The Directors present the Business Responsibility Report of the Company for the financial year ended on 31st March, 2016, pursuant to Regulation 34 (2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company also publishes annually, a comprehensive Sustainability Report, based on the Global Reporting Initiative (GRI) guidelines.
The details on the aspects discussed in this Report are available in the Company's Sustainability Report. The Company's Board approved Sustainability Policies, ITC Code of Conduct and the Sustainability Report are available on the Company's Website - www.itcportal.com.
| 1 | Corporate Identity Number (CIN) of the Company: | L16005WB1910PLC001985 |
| 2 | Name of the Company: | ITC Limited |
| 3 | Address of the Registered Office: | Virginia House, 37 Jawahar Lal Nehru Road, Kolkata 700 071 |
| 4 | Website: | www.itcportal.com |
| 5 | E-mail id: | enduringvalue@itc.in |
| 6 | Financial Year reported: | 2015-16 |
| 7 | Key products / services: | |
| Businesses | Products / Services | |
| FMCG: | Branded Packaged Foods Businesses (Staples, Snacks and Meals; Dairy and Beverages; Confections); Apparel; Education and Stationery Products; Personal Care Products; Safety Matches and Agarbattis; Cigarettes, Cigars, etc. | |
| Hotels: | Hoteliering. | |
| Paperboards, Paper & Packaging: | Paperboards, Paper including Specialty Paper & Packaging. | |
| Agri Business: | Agri-commodities such as soya, spices, coffee and leaf tobacco. | |
| 8 | Locations where business activities are undertaken by the Company: | The Company's businesses and operations are spread across the country. Details of plant locations, hotels owned / operated by the Company, are provided in the section, 'Shareholder Information', in the Report and Accounts. |
| 9 | Markets served by the Company: | ITC's products and services have a national presence and several products are exported. |
| 10 | Subsidiary companies and their BR initiatives: | The Company has 25 subsidiaries, including 10 subsidiaries outside India as on 31st March 2016. The subsidiary companies define their own initiatives based on their specific context whilst having access to information and expertise residing with the parent company. |
| 1 | Paid up Capital (As on 31.03.2016): | H 804.72 crores |
| 2 | Total Turnover: | H 51,582.45 crores |
| 3 | Total Profit after taxes: | H 9,844.71 crores |
| 4 | Total Spending on Corporate Social Responsibility (CSR): | H 247.50 crores |
| 5 | As percentage of Profit after taxes: | 2.51% |
| Areas listed under Schedule - VII to the Companies Act, 2013 | ITC's interventions (including through Trusts established by the Company) | |
|---|---|---|
| (i) | Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation including contribution to the Swachh Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water. | Health & Sanitation, Drinking Water and Eradicating Poverty |
| (ii) | Promoting education, including special education and employment enhancing vocation skills specially among children, women, elderly, and the differently abled and livelihood enhancement projects. | Education, Vocational Training, Livestock Development and generation of Livelihoods |
| (iii) | Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups. | Women Empowerment |
| (iv) | Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining the quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of River Ganga. | Environmental Sustainability, Soil & Moisture Conservation and Wasteland Development |
| (v) | Protection of national heritage, art and culture, including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts. | Protection of national heritage, art and culture |
| (vi) | Rural Development Projects. | Agri Development |
ITC's sustainability initiatives are inspired by the opportunity to serve larger national priorities through a Triple Bottom Line contribution to the economy. It is the Company's deep conviction that businesses possess the transformative capacity to create far larger societal value by leveraging their entrepreneurial vitality, creativity and innovative capacity. This Vision is manifest in the unique models fashioned by the Company to enable the creation of large scale sustainable livelihoods and the augmentation of natural resources.
The Company has aligned its policies and guidelines with the principles enunciated under the Business Responsibility Reporting framework on social, environmental and economic responsibilities of business. The context of the BR principles is embodied in the Sustainability Policies and Code of Conduct adopted by the Company, implementation of which is ensured through well-established systems and processes across all its businesses.
For the past 12 years, the Company has published Sustainability Reports encapsulating its performance across the three dimensions of the Triple Bottom Line. ITC Sustainability Report 2015 meeting the latest G4 guidelines of the GRI, 'In Accordance - Comprehensive' category was also third party assured at the highest criteria of 'reasonable assurance' as per the International Standard on Assurance Engagements (ISAE) 3000. The 13th Sustainability Report covering the sustainability performance for the financial year ended on 31st March 2016 and prepared in accordance with the GRI G4 Guidelines, will be available shortly. In addition, the Report and Accounts 2016 of the Company provides a review of the Company's Triple Bottom Line performance.
| ITC Code of Conduct | Freedom of Association |
| Life-cycle Sustainability | Diversity and Equal Opportunity |
| Stakeholder Engagement | Prohibition of Child Labour and Prevention of Forced Labour at the Workplace |
| Responsible Advocacy | Human Rights consideration of Stakeholders beyond the Workplace |
| Product Responsibility | Environment, Health & Safety |
| Responsible Sourcing | Corporate Social Responsibility |
| Sl.No. | BRR Principle | Section in BR Report | Page | Details in ITC Sustainability Report |
|---|---|---|---|---|
| 1 | Businesses should conduct and govern themselves with Ethics, Transparency and Accountability | Corporate Governance for Ethics, Transparency and Accountability | v |  |
| 2 | Businesses should provide goods and services that are safe and contribute to sustainability throughout their life-cycle | Sustainability of Products & Services across Life-cycle | VI | |
| 3 | Businesses should promote the well-being of all employees | Employee Well-being | VIII | |
| 4 | Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised | Stakeholder Engagement | X | |
| 5 | Businesses should respect and promote human rights | Human Rights | XI | |
| 6 | Businesses should respect, protect, and make efforts to restore the environment | Protection and Restoration of the Environment | XI | |
| 7 | Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner | Responsible Advocacy | XIII | |
| 8 | Businesses should support inclusive growth and equitable development | Supporting Inclusive Growth and Equitable Development | XIV | |
| 9 | Businesses should engage with and provide value to their customers and consumers in a responsible manner | Providing Value to Customers and Consumers | XVI | |
A Board approved policy provides the framework for ITC's corporate governance philosophy, which is anchored on the values of trusteeship, transparency, ethical corporate citizenship, empowerment, control and accountability. ITC believes that since large corporations employ societal and environmental resources, governance processes must ensure that they are utilised in a manner that meets stakeholders' aspirations and societal expectations. ITC embeds sustainability principles in its business strategies, and coupled with corporate governance processes, seeks to ensure superior Triple Bottom Line performance.
The role of the CSR and Sustainability Committee is, inter alia, to review, monitor and provide strategic direction to the Company's CSR and sustainability practices towards fulfilling its Triple Bottom Line objectives. The Committee seeks to guide the Company in integrating its social and environmental objectives with its business strategies and assists in crafting unique models to support the creation of sustainable livelihoods. The Committee formulates and monitors the CSR Policy and recommends to the Board the annual CSR Plan of the Company in terms of the Companies Act, 2013.
The Company's strategic intent to create enduring value by investing in new engines of growth is powered by its strong and competitive capabilities in R&D, innovation & technology and an array of institutional strengths including deep consumer insights, brand building capability, trade marketing and distribution infrastructure, focus on quality and world-class manufacturing practices, strong rural linkages and outstanding human resources.
The Company endeavours to embed the principles of sustainability, as far as practicable, into the various stages of product or service life-cycle, including procurement of raw material/service, manufacturing of product or delivery of service, transportation of raw materials and finished goods, and disposal by consumers. Policies on 'Life-cycle Sustainability' and 'Responsible Sourcing' detail the Company's approach in this respect.
A climate of creativity and innovation coupled with a culture of care and concern enables 25,564 employees - including 2,244 female employees - of the Company to enhance value creation for all its stakeholders and address the challenges of tomorrow with conviction and confidence. The superior capability of the Company's talent pool is premised on a work culture that nurtures quality talent and promotes a conducive work environment that combines the need to focus on performance and results with a caring and compassionate work ethos. Policies on 'Diversity and Equal Opportunity', 'Freedom of Association' and 'Environment, Health and Safety', among others, guide the management approach on specific elements of the Company's work practices.
The Policy on Stakeholder Engagement provides the approach for identifying and engaging with stakeholders that include shareholders, customers, employees, farmers, suppliers, communities, civil society, media and the government.
The Company believes that an effective stakeholder engagement process is necessary for achieving its sustainability goal of inclusive growth. Accordingly, it anchors its stakeholder engagement on the following principles:
The Company has put in place systems and procedures to identify, prioritise and address the needs and concerns of its stakeholders across businesses and units in a continuous, consistent and systematic manner. It has implemented mechanisms to facilitate effective dialogues with all stakeholders across businesses, identify material concerns and their resolution in an equitable and transparent manner. These measures have helped the Company develop strong relationships, which have withstood the test of time.
The Company's collaborative partnerships with communities are manifest in its programmes such as watershed development, social forestry, animal husbandry services and women empowerment. These initiatives augment the natural resource base of the nation and create sustainable rural livelihoods.
The Company has Policies on Human Rights applicable to its employees and its value chains. The Policies and their implementation are directed towards adherence to applicable laws and to uphold the spirit of human rights, as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the International Labour Organisation (ILO). During the year, the Company introduced systems to ensure sound implementation of ITC's Sustainability Policies specifically with respect to the Human Rights and a decent work place.
The Company has in place a Code of Conduct for vendors and service providers which have been signed-off by identified Vendors/Service Providers across Businesses, and a Grievance Redressal Procedure to address concerns, if any, pertaining to Human Rights and decent labour practices for its employees.
A system for employees to read and sign-off the Sustainability Policies including Policies on Human Rights and ITC's Code of Conduct was rolled out across Divisions. During the year, 8,587 employees across the Company have been covered, amounting to 94% of the managerial workforce.
The Company is a global exemplar in environmental sustainability and takes pride in being carbon positive, water positive and solid waste recycling positive for many years. The Company has contributed to environmental stewardship by not only ensuring efficient use of resources but also by augmenting precious natural resources.
The Policies on 'Life-cycle Sustainability', 'Environment, Health and Safety' and 'Responsible Sourcing' provide the necessary direction towards climate change mitigation and adaptation efforts as well as natural resource replenishment initiatives. Such efforts include implementation of a low carbon growth strategy across its businesses, integrated soil and water conservation programmes and the creation of large-scale sustainable livelihoods amongst the marginalised sections of society.
The Company has sought to align with the NAPCC (National Action Plan on Climate Change) of the Government of India to respond to the challenges emerging from the threat of climate change. Some of the measures implemented include continual improvement in specific energy consumption (energy consumed per unit of product or service), enhanced use of renewable energy and expansion of forestry projects to improve the Company's positive carbon footprint.
The Company has also computed its Greenhouse Gas inventory in line with the ISO 14064 standard, which has been assured at the highest 'Reasonable Level' as per the ISAE 3410 standard, by a third-party assurance provider.
The Policy on Responsible Advocacy provides the framework for the necessary interface with Government/Regulatory Authorities on matters concerning the various sectors in which the Company operates. The Company works with apex industry institutions that are engaged in policy advocacy, like the Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry, Associated Chambers of Commerce and Industry of India and various other forums including regional Chambers of Commerce. The Company's engagement with the relevant authorities is guided by the values of commitment, integrity, transparency and the need to balance interests of diverse stakeholders.
The Company, for its social development projects, organises meetings with the local administration and state governments to seek their participation and involvement. Their expert advice and counsel are also sought and approvals obtained, where required, for the planned interventions. The Company also engages in public-private-partnerships (PPP) with the state governments for such projects.
In social sector, the two most important stakeholders of ITC are:
The stakeholder communities face the challenge of securing sustainable livelihoods, which is addressed through the Company's two-pronged approach: Horizon 1: Making today's dominant source(s) of livelihoods sustainable; and Horizon 2: Creating capabilities for wealth generation and employment for tomorrow.
The two horizon strategy has necessitated an integrated approach to development involving several interventions which are summarised below. All programmes are implemented through a mix of national and grass-root level Programme Implementation Agencies (PIAs).
The projects promoted under the Social Investments Programme were spread over 166 districts of 26 states.
The Company has also been collaborating with local municipal agencies to work on sustainable management of community waste. The Programme's aim is to promote a clean and green environment and provide a sustainable source of livelihood for rag pickers and waste collectors.
The Well-being out of Waste (WOW) movement today extends to 400 municipal wards of Hyderabad, Chennai, Bengaluru, Coimbatore and some towns of Telangana covering over 5 million citizens. The Programme creates a sustainable livelihood for 10,000 rag pickers and waste collectors by propagating source segregation at each of the households. Similar programmes are operational in 9 districts of Saharanpur, Hooghly, Kolkata, Munger, Guntur, Madurai, Pune, Thiruvallur and Haridwar also.
The primary focus is on the door-to-door collection of household waste and segregation at the site in order to re-cycle so as to minimise the load at municipal landfills.
As an organisation which upholds and makes significant efforts to ensure good governance, the Company complies with all relevant laws of the land. The Company's uncompromising commitment to providing world-class products and services to customers is supported by its concern for the safety of its customers/consumers. The Company's overall approach on this vital aspect is guided by its Policy on 'Product Responsibility'.
The IT services industry is at a historic inflection point - with traditional IT services and products model getting disrupted. Innovative technologies, new buyers of technology and newer ways of deploying them are beginning to have an impact on the way the industry operates. This disruption has unearthed massive growth opportunities and created a level playing field for nimble technology innovators.
In this context, ITC Infotech has embarked on a transformational journey to become a Specialized, Global scale, Full service provider, led by Business and Technology consulting, and creating enduring value for its stakeholders through excellence across:
As part of the transformation efforts, ITC Infotech, during the year, has aligned the organization to identified Go-to-market (GTM) industry verticals and Lines of Business (LoB) that can be offered to these target verticals. During the year, Testing as a Service (TaaS) and Supply Chain Management (SCM) were seeded as new LoBs. In addition, the company has also instituted an “Innoruption†lab to focus on R&D and innovation in areas like Digital Supply Chain, Mobility, Internet of Things (IoT), Cognitive Automation and to build an ecosystem of startups.
The CII-ITC Centre of Excellence for Sustainable Development, established by ITC in collaboration with the Confederation of Indian Industry (CII) in 2006, continues its endeavours to promote sustainable business practices among Indian enterprises. The centre is steered by its Advisory Council, headed by Mr Y C Deveshwar, Chairman, ITC Limited, and comprises members from industry, civil society and academia. The Council provides strategic direction to the organisation.
The ITC Sangeet Research Academy (ITC SRA), which was established in 1977, continues to be a true embodiment of ITC's sustained commitment to a priceless national heritage. The Company's pledge towards ensuring enduring excellence in Classical Music education has helped ITC SRA adhere to the age-old 'Guru-Shishya Parampara'. The Academy has eminent musicians imparting quality Hindustani classical music to its scholars. Its list of Gurus includes living legends like Padma Vibhushan Vidushi Girija Devi, Padma Bhushan Buddhadev Dasgupta, Padma Shri Ulhas Kashalkar and Padma Shri Ajoy Chakrabarty. The focus of the Academy is on nurturing exceptionally gifted students, carefully hand-picked across India, who receive full scholarships to reside and pursue music education in the Academy's campus. This has provided opportunities to young talent to train under the tutelage of the country's most distinguished stalwarts and has helped create the next generation of musical masters.
ITC is the only enterprise in the world of comparable dimensions to be Carbon Positive, Water Positive and Solid Waste Recycling Positive.
ITC's businesses and value chains support around 6 million sustainable livelihoods
