Annexures

 Management Approach

Policy - As a large Indian enterprise, ITC is uniquely positioned to contribute to public policy, which it does through active participation in a number of fora. Its size also enables it to influence the process of development and contribute to sustainable growth in the areas in which it operates, thereby helping to transform the lives of a large number of people and communities. ITC’s objective of making a positive contribution to the society where it operates is served by aligning its own operations with interventions and initiatives aimed at creating sustainable livelihoods through farm and non-farm based activities.

Striding a wider canvas in the interest of the nation, ITC is committed to ensuring the preservation of India’s unique cultural heritage through various initiatives to promote, encourage and keep cultural traditions alive.

With such a diverse and critical social agenda, all ITC employees have the obligation to display high levels of integrity and ethical behavior.

Responsibility - It is the overall responsibility of the Corporate Management Committee to ensure that its investments in the social sector are an integral part of the Company’s corporate strategy. Division-level initiatives respond to local needs and are monitored by the Divisional Management Committees and implemented through their local units in conjunction with the Corporate Human Resources Department.

The Corporate Management Committee and the Divisional Management Committees are responsible for reviewing and updating Corporate Standards on social and cultural development, and updating standards and guidelines for work in these areas as well as for providing guidance and support to all concerned.

Management - The Corporate Management Committee is the primary custodian of ITC’s social initiatives. Implementation is reviewed periodically at the Unit, Divisional and the CMC levels. A dedicated team in the Corporate Human Resources Department provides specialist services to assist in implementation and monitoring of projects. The Units are responsible for responding to specific needs spelt out by local communities and implementation is monitored by the Divisional Management Committees. In discharging social responsibility projects, all applicable rules and regulations are complied with.

Training & Awareness - Employees engaged in social development initiatives are given regular training both to enhance their domain knowledge and improve management skills. Society is made aware of these projects and programmes through the circulation of a brochure called ‘Transforming Lives and Landscapes’.

Monitoring & Follow-up - Regular monitoring and followup is undertaken by Corporate Human Resources. External accounting firms undertake quarterly financial audits. External audit firms and the Internal Audit function of the Company carry out system audits regularly.

Objective - The primary focus of ITC’s Social Development Initiatives is to create sustainable sources of farm and off-farm livelihoods and to improve the social infrastructure especially in areas where it impacts women and children.

In pursuit of these objectives, the following goals have been set for the next five years -

	Bring at least 2,25,000 hectares under soil and moisture conservation practices.
	Transform at least 2,00,000 hectares of wastelands into productive and revenue-generating assets for the poor.
	Create at least 50,000 women entrepreneurs with a sustainable source of supplementary incomes.
	Improve the genetic stock of at least 12,00,000 cattle through artificial insemination practices.
	Provide supplementary education support services to at least 3,00,000 children.

In its endeavour to preserve India’s cultural and artistic heritage, ITC will also continue to ensure that its initiatives in the areas of preservation and promotion of Indian music, art and theatre are strengthened.

Context - A high level of community involvement creates long term enduring partnerships that contribute to creating a stable environment for its operations. ITC’s commitment that extends beyond the market enhances the Company’s credibility in the minds of stakeholders and policy makers. ITC’s focus on Social Development and on preserving India’s heritage is also a key element of its employee value proposition which helps in the attraction and retention of quality talent.

Management Approach – ITC ensures that all products and services offered to the consumer are in full compliance with all applicable national standards and aspires to achieve best in class international standards on environmental impacts, health and safety. Measures such as migration from solvent based inks to water based inks in the Packaging and Printing Business and replacing chlorine bleaching process with ozone bleaching in the Paperboards & Specialty Papers Business allows us, for example, to offer complete food grade packaging solutions, while having hotels, factories and offices comply with Green Building Standards and the International Safety Standards allows us to offer a green and safe environment for all our customers and employees. ITC continues its efforts on these aspects to achieve continual improvements in standards.

Product and Service Labeling – All ITC products and services are in complete compliance with relevant statutory requirements addressing these issues. An elaborate system of checks and measures are in place to ensure that no violations occur.

Compliance – All ITC businesses have well-established systems and procedures to ensure compliance with statutory and internal requirements, concerning issues such as Customer Health & Safety, Product & Service labeling, marketing communications and Customer privacy. International Quality Rating System (IQRS) for Business Excellence, which rates key processes against international benchmarks, has already been introduced in a number of businesses. In addition, various other quality improvement tools such as ‘Six Sigma’ initiatives have been integrated with the Quality Management Systems, to further strengthen compliance. In addition, there is a rigorous system of internal audits to ensure compliance.

Goals & Performance - ITC continuously endeavours to provide its consumers products and services that are benchmarked to international quality standards. Individual business performance on ‘Product Responsibility’ is described elsewhere in the Report.

Context – All ITC products and services aspire to be best in class for their respective categories. These aspirations are backed by extensive R&D efforts spearheaded by the in-house R&D resources. Aspects influencing Health & Safety are factored in at the product / service design stage. ITC anticipates that social pressures towards responsible use of tobacco will increase and ITC remains fully committed to support this concern. The growing trend towards voluntary disclosures points to an era of increasingly well informed consumers, which we think will create additional opportunities for products & services with authenticated sustainability attributes.