Qualifications and Expertise of the Members of the Board

ITC's Governance Policy states that the Non-Executive Directors (including Independent Directors) be drawn from amongst eminent professionals with experience in business/finance/ law/public enterprises. Directors are appointed/re-appointed with the approval of the shareholders for a period of three to five years or a shorter duration in accordance with retirement guidelines as determined by the Board from time to time.

The selection of Directors is done by the Nominations Committee, which comprises all the Non-Executive Directors and the Chairman.

Although not spelt out in writing, the Nominations Committee is also guided by the following parameters, while considering induction of Directors:

Board members are expected to possess the expertise, skills and experience required to manage and guide a high-growth, large, diversified company. Expertise in strategy, finance, management and human resources is essential. Board members are expected to rigorously prepare for, attend, and participate in all Board and relevant committee meetings.

Board members are not expected to be relatives of an Executive Director or of an Independent Director. They are generally not expected to serve in any executive or independent position in any company that is in direct competition with the Company. Each Board member is expected to ensure that their other current and planned future commitments do not materially interfere with the member's responsibility as the Company's Director.

Avoidance of Conflicts of Interest

In terms of the ITC Code of Conduct, as adopted by the Board of Directors, 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.

Contracts in which Directors are interested, if any, are required to be placed before the Board for approval. Further, senior management is also required to confirm on an annual basis that no material transaction has been entered into by them which could have potential conflict with the interest of the Company; such confirmations are placed before the Board.

The Company has a Code of Conduct for Prevention of Insider Trading ('ITC Code') in the shares and securities of the Company. The ITC Code, inter alia, prohibits purchase/sale of shares of the Company by employees while in possession of unpublished price sensitive information in relation to the Company. Designated employees, including Directors and senior management, are also required to make disclosures on shares purchased/sold by them or their dependants. Transactions by such employees in the shares and securities of the Company are also subject to various restrictions, as enumerated in the ITC Code. Instances of violation of the ITC Code, if any, are also reported to the Board.