REMUNERATION

ITC believes that managerial remuneration is an important instrument in attracting and retaining talent and a key component of the performance management system. Three features of ITC's remuneration strategy are :

• Remuneration must leverage performance and therefore the need for a strong linkage between remuneration and performance when considering annual remuneration reviews as well as when periodically adjusting remuneration for market.

• Remuneration must be market-led. For this purpose remuneration is reviewed on an on-going basis in relation to identified benchmark companies to ensure that remuneration practices are in sync with the competitive situation.

• Remuneration must take into account "affordability" and the Company's capacity to pay and hence cannot be divorced from business realities.