CORE VALUES

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.

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.

CORPORATE STRATEGIES

ITC is a board-managed professional company, committed to creating enduring value for the nation and the shareholder. It has a rich organisational culture rooted in its core values of respect for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong corporate governance policies and systems.

ITC's corporate strategies are:

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

CORPORATE GOVERNANCE

DEFINITION AND PURPOSE

PREAMBLE

Over the years, ITC has evolved from a single product company to a multi-business corporation. Its diverse businesses include fast moving consumer goods, hotels, paperboards, paper & packaging and agri business.

The Company's investments in its different businesses are structured in the nature of in-house divisions, subsidiaries, joint ventures, associate companies and trade investments.

The task of governing a corporation of ITC's size and diversity was rendered more complex in post liberalisation India, which began experiencing the intense impact of globalisation. In order to address its own unique organisational context and prepare itself for the global Indian market, ITC, as early as in 1999, fashioned an unique corporate governance model that would enable it to 'focus' on its multiple businesses, while maximising shareholder value.

This governance policy has not only stood the test of time, but also supported ITC's rapid growth in the last two decades since its formulation. In the intervening years, ITC has not only widened its diversity with the launch of several new businesses in its chosen strategic arena, but has also responded to the growth challenge by creating new internal structures like shared services and business verticals, designing broad-band roles like Line CMC Members, Chief Operating Officers of Business / Vertical, and enabling operating decision making powers at empowered levels.

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, ITC believes 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 :

  • Management must have the executive freedom to drive the enterprise forward without undue restraints; and
  • 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 fulfils 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, 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 compromising 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. ITC believes 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. The Company believes 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

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. The Company believes that unethical behaviour corrupts organisational culture and undermines stakeholder value.

THE GOVERNANCE STRUCTURE

THE GOVERNANCE STRUCTURE

Flowing from the philosophy and core principles of governance, Corporate Governance in ITC shall take place at three interlinked levels, namely -

  • Strategic supervision by the Board of Directors.
  • Strategic management by the Corporate Management Committee.
  • Executive management by the Chief Executives / Chief Operating Officers of Divisions, SBUs, Business Verticals and Shared Services, assisted by their respective Management / Executive Committees.

It is ITC's belief that the right balance between freedom of management and accountability to shareholders can be achieved by segregating strategic supervision from strategic and executive management. The Board of Directors (Board) as trustees of the shareholders will exercise strategic supervision through strategic direction and control, and seek accountability for effective strategic management from the Corporate Management Committee (CMC). The CMC will have the freedom, within Board approved direction and framework, to focus its attention and energies on the strategic management of the Company. The Chief Executives / Chief Operating Officers of Divisions, SBUs, Business Verticals and Shared Services, assisted by their respective Management / Executive Committees will have the freedom to focus on the executive management of their respective business/ shared services.

THE 3-TIER GOVERNANCE STRUCTURE THUS ENSURES THAT

  • Strategic supervision (on behalf of the shareholders), being free from involvement in the task of strategic management of the Company, can be conducted by the Board with objectivity, thereby sharpening accountability of management.
  • Strategic management of the Company, uncluttered by the day-to-day tasks of executive management, remains focused and energised; and
  • Executive management of businesses assisted by respective Management / Executive Committee, free from collective strategic responsibilities for ITC as a whole, remains focused on enhancing the quality, efficiency and effectiveness of the business to achieve best in class performance.

ROLES

The core roles of the various entities at the three levels of Corporate Governance will be as follows:

BOARD OF DIRECTORS (BOARD)

The primary role of the Board of Directors is that of trusteeship to protect and enhance shareholder value through strategic supervision of ITC, its wholly owned subsidiaries and their wholly owned subsidiaries. As trustees they will ensure that the Company has clear goals relating to shareholder value and its growth. They should set strategic goals and seek accountability for their fulfillment. They will provide direction, and exercise appropriate control to ensure that the Company is managed in a manner that fulfills stakeholder aspirations and societal expectations. The Board must periodically review its own functioning to ensure that it is fulfilling its role. The Board will also evaluate the performance of the individual Directors and Board Committees.

The ITC Board will be a balanced Board, consisting of Executive and Non-Executive Directors including Independent Directors. The Board will have a balance of skills, experience and diversity of perspectives appropriate to the Company. The Non-Executive Directors shall be drawn from amongst eminent professionals, with experience in business / finance / law / public administration & enterprises. Directors shall be appointed / re-appointed for a period of three to five years or a shorter duration, in accordance with the retirement guidelines as may be determined by the Board from time to time or by any applicable statutes, rules, regulations or guidelines, and in the case of Executive Directors up to the date of their retirement, whichever is earlier. The Board shall determine from time to time the retirement age for both Executive and Non-Executive Directors. The Board shall specify the maximum number of company Directorships which can be held by members of the ITC Board.

Non-Executive Directors, including Independent Directors, are expected to play a critical role in imparting balance to the Board processes by bringing an independent judgement to bear on issues of strategy, performance, resources, standards of Company conduct etc.

The Board shall meet at least five times a year. The tentative annual calendar of meetings shall be agreed upon at the beginning of each year. As laid down in the Articles of Association of the Company, the quorum for meetings shall be one third of members and decisions shall be taken by simple majority, unless statutorily required otherwise. Meetings shall be governed by a structured agenda. All major issues included in the agenda shall be backed by comprehensive background information to enable the Board to take informed decisions. Agenda papers, as far as practicable, shall be circulated at least seven days prior to the meeting. Normally items for the Board Agenda, except those emanating from Board Committees, shall have been examined by the CMC. Draft Minutes of Board Meeting shall be circulated within 15 days of the meeting and noted / confirmed at the next meeting. Board decisions shall record the related logic as far as practicable.

The Board shall have the following Committees whose terms of reference shall be determined by the Board from time to time:

Audit Committee: To provide reassurance to the Board on the adequacy of internal control systems and financial disclosures. The Company Secretary shall be the Secretary to the Audit Committee. The Head of Internal Audit shall be Co-ordinator of the Committee and shall be Permanent Invitee to the meetings of the Committee.

Nomination & Compensation Committee: To identify persons qualified to become Directors and to formulate criteria for evaluation of performance of the individual Directors and the Board as a whole. The Committee's role inter alia includes recommending to the Board the appointment, remuneration and removal of the Directors and senior management. The Committee also has the responsibility for administering the Employee Stock Option Schemes of the Company.

Securityholders Relationship Committee: To oversee redressal of shareholder and investor grievances and, inter alia, approve transmission of shares, sub-division / consolidation / renewal / issue of duplicate share certificates etc. and allotment of shares upon exercise of Options under the Company's Employee Stock Option Schemes.

CSR and Sustainability Committee: To review, monitor and provide strategic direction to the Company's CSR and sustainability practices towards fulfilling its triple bottom line objectives. The Committee shall guide the Company in integrating its social and environmental objectives with its business strategies and assist in crafting unique models to support creation of sustainable livelihoods. The Committee shall also formulate & monitor the CSR Policy and recommend to the Board the annual CSR Plan of the Company.

Independent Directors Committee: The role of the Committee would be such as may be prescribed under law.

Terms of Reference of the Board Committees shall include :

  • Objectives, Roles & Responsibilities
  • Authority / Powers
  • Membership & Quorum
  • Chairmanship
  • Tenure
  • Frequency of Meetings

The composition of the Board Committees will be as follows or as may be prescribed by law from time to time :-

Committee Members Chairman
Audit Committee Three or more Directors of the Company, as may be decided by the Board with at least two-third of the members being Independent Directors. The Executive Director representing the Finance function, the Chief Financial Officer, the Head of Internal Audit and the representative of the Statutory Auditors shall be Invitees to the meetings of the Committee. The Company Secretary shall act as the Secretary. One of the Independent Directors, to be appointed by the Board.
Nomination & Compensation Committee Three or more Non-Executive Directors of the Company, as may be decided by the Board with at least one-half of the members being Independent Directors. The Chairman of the Company shall be a Member. The Company Secretary shall act as the Secretary. One of the Independent Directors, to be appointed by the Board.
Securityholders Relationship Committee Three or more Directors of the Company, as may be decided by the Board with at least one member being a Non-Executive Director. The Company Secretary shall act as the Secretary. One of the Non-Executive Directors, to be appointed by the Board.
CSR and Sustainability Committee Three or more Directors of the Company, as may be decided by the Board with at least one member being an Independent Director. The Company Secretary shall act as the Secretary. Chairman of the Board.
Independent Directors Committee All the Independent Directors of the Company. One of the Independent Directors.

 Normally meetings of the Board Committees shall be convened by their respective Chairmen. However, any member of the Committee may, with the consent of the concerned Chairman, convene a meeting of the Committee.

Signed minutes of Board Committee meetings shall be tabled for the Board's information. However, issues requiring Board's attention / approval should be tabled in the form of note(s) to the Board from the Committee Chairman.

RISK MANAGEMENT COMMITTEE

The Risk Management Committee constituted by the Board comprises all the Executive Directors and some senior managers. The role of the Committee includes approval of the strategic risk management framework of the Company, review of the risk mitigation strategies and results of risk identification, prioritisation and mitigation plans for all businesses / functions, as also the measures taken for cyber security. The Chief Risk Officer of the Company shall act as the Secretary to the Committee.

CORPORATE MANAGEMENT COMMITTEE (CMC)

The primary role of the CMC is strategic management of the Company's businesses within Board approved direction / framework and realisation of Company goals. The CMC will assess the performance of the businesses and allocate resources, and will operate under the superintendence and control of the Board. The composition of the CMC will be determined by the Board (based on the recommendation of the Nomination & Compensation Committee), and will consist of all the Executive Directors and some key senior members of management. Membership of the CMC shall be reviewed by the Nomination & Compensation Committee as and when necessary. Meetings of the CMC shall be convened and chaired by the Chairman & MD. The Company Secretary or such other person as may be decided by the Nomination & Compensation Committee / Board shall be the Secretary to the CMC.

CHAIRMAN & MANAGING DIRECTOR

The Chairman is also the MD of the Company. He is the Chairman of the Board and the CMC. His primary role will be to provide leadership to the Board and the CMC for realising Company goals in accordance with the charter approved by the Board. He will be responsible, inter alia, for the working of the Board and the CMC, for ensuring that all relevant issues are on the agenda and for ensuring that all Directors and CMC members are enabled and encouraged to play a full part in the activities of the Board and the CMC, respectively. He will keep the Board informed on all matters of importance. He will also be responsible for the balance of membership of the Board, subject to Board and Shareholder approvals. He will preside over General Meetings of Shareholders.

In respect of the Businesses and Corporate Functions which directly report to the MD, he will have the responsibility of Line Director.

EXECUTIVE DIRECTOR

  • As a member of the CMC, contribute to the strategic management of the Company's businesses within Board approved direction / framework.
  • As Director accountable to the Board for a business or shared services (Line Director), assume overall responsibility for its strategic management, including governance processes and top management effectiveness.

    In the context of the multi-business character of the Company, an Executive Director is in the nature of a Managing Director for those businesses and functions reporting to him.
  • As Director accountable to the Board for a wholly owned subsidiary, or its wholly owned subsidiary (Line Director), at all times exercise independent judgement and application of mind in the interest of the company and its shareholder.
  • As Director accountable to the Board for a corporate function (Line Director), assume overall strategic responsibility for its performance including governance processes and senior management effectiveness.

CMC MEMBER

  • As a member of the CMC, contribute to the strategic management of the Company's businesses within Board approved direction / framework.
  • As CMC Member accountable for a business or shared services (Line CMC Member), assume responsibility for its strategic management, including governance processes and top management effectiveness.
  • As CMC Member accountable for a wholly owned subsidiary, or its wholly owned subsidiary (Line CMC Member), at all times exercise independent judgement and application of mind in the interest of the company and its shareholder.
  • As CMC Member accountable for a corporate function (Line CMC Member), assume overall strategic responsibility for its performance including governance processes and senior management effectiveness.

DIVISIONAL MANAGEMENT COMMITTEE (DMC)

Executive management of the Divisional business/ shared services to realise tactical and strategic objectives in accordance with CMC / Board approved plan. Composition of the DMC shall be determined by the Line Director with the approval of the CMC. The Divisional Chief Executive shall convene and chair the DMC meetings.

EXECUTIVE COMMITTEE FOR BUSINESS VERTICAL (EC)

The CMC, in order to drive sharper focus, greater agility and responsiveness, may form Business Verticals within the Division / Business / Shared Services from time to time. Each of these Verticals will have its own EC led by the COO - Business Vertical with responsibility for delivering comprehensive business results under the overall direction and supervision of the Divisional Chief Executive supported by the DMC. Each such Vertical will be represented on the DMC.

Composition of EC for Business Vertical shall be determined by the Line Director with the approval of the CMC.

DIVISIONAL CHIEF EXECUTIVE (DCE)

The DCE will have executive responsibility of the business and shall provide leadership to the Divisional Management Committee in its task of executive management of the Divisional business and of the Verticals within the Division.

CHIEF OPERATING OFFICER - BUSINESS VERTICAL (COO - BV)

COO-BV shall be responsible for providing leadership to the Vertical and realising the tactical and strategic objectives of their business area.

BOARD COMMITTEES

AUDIT COMMITTEE

Mr. A. Duggal Chairman
Mr. S. Banerjee Member
Mr. S. Mukherjee Member
Mr. R. Tandon Invitee
Mr. Supratim Dutta Invitee
Mr. M. Ganesan Invitee
Representative of Statutory Auditors Invitee
Mr. R. K. Singhi Secretary to the Committee

CSR AND SUSTAINABILITY COMMITTEE

Mr. S. Puri Chairman
Mr. N. Doda Member
Mr. S. Panray Member
Ms. Nirupama Rao Member
Mr. A. K. Seth Member
Ms. M. Shankar Member
Mr. David Simpson Member
Mr. R. K. Singhi Secretary to the Committee

NOMINATION & COMPENSATION COMMITTEE

Mr. S. Banerjee Chairman
Mr. A. Nayak Member
Mr. S. Puri Member
Ms. M. Shankar Member
Mr. R. K. Singhi Secretary to the Committee

SECURITYHOLDERS RELATIONSHIP COMMITTEE

Mr. A. Nayak Chairman
Mr. N. Doda Member
Mr. B. Sumant Member
Mr. R. Tandon Member
Mr. R. K. Singhi Secretary to the Committee

INDEPENDENT DIRECTORS COMMITTEE

Mr. S. Banerjee Member
Mr. A. Duggal Member
Mr. S. Mukherjee Member
Mr. A. Nayak Member
Ms. N. Rao Member
Mr. A.K. Seth Member
Ms. M. Shankar Member

CODE OF CONDUCT

APPLICABLE TO ALL DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES OF THE COMPANY

PREAMBLE

ITC's Code of Conduct is derived from three interlinked fundamental principles, viz. good corporate governance, good corporate citizenship and exemplary personal conduct in relation to the Company's business and reputation.

PHILOSOPHY

ITC is a professionally managed organisation and the core value underlying its Corporate Philosophy is "Trusteeship". Employees of the organisation believe that as professionals, they manage the organisation in "trust" for its various stakeholders. It is therefore expected that each employee shall act responsibly to ensure that the organisation is managed in a manner that protects and furthers the interests of its stakeholders. ITC recognises society as an important stakeholder in this enterprise and therefore it is part of its responsibility to practice good corporate citizenship.

The Company also believes that in order to serve the interests of stakeholders in perpetuity, ITC must operate with dynamism and vitality.

ITC's Code of Conduct is based on such expectations of agility and trust and is founded on the Company's core values which promotes a customer-focused, high-performance culture, creating value for all its stakeholders.

CORPORATE GOVERNANCE POLICY

The Corporate Governance Policy is the apex level document 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.

['Senior management' shall mean (i) Key Managerial Personnel, (ii) Managers at Grade 'A' and above, (iii) Chief Executives / Heads of Divisions, Strategic Business Units (SBU), Business Verticals and Shared Services, and (iv) Corporate Heads of Departments. Employees shall mean managerial as well as non-managerial staff.]

GOOD CORPORATE CITIZENSHIP

In the conduct of the Company's business, the practice of good corporate citizenship is a pre-requisite 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 ITC's 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 areas such as selection and recruitment, meritocracy will be the only criterion and all managers will scrupulously avoid any consideration other than merit and suitability. Performance management systems including appraisals, remuneration and rewards will focus on meritocracy, equity and upholding of Company values.

ITC believes that all employees are important stakeholders in the enterprise and it is imperative to build a culture of mutual trust & respect, interdependence and meaningful engagement. This approach helps in building, strengthening and sustaining harmonious employee relations across the organisation. (For further details, please refer to the 'Policy on Freedom of Association' under 'Sustainability - Sustainability Policies' at www.itcportal.com)

ITC also believes in a "No Child Labour and No Forced Labour" policy. (Please refer to the 'Policy on Prohibition of Child Labour and Prevention of Forced Labour at the Workplace' under 'Sustainability - Sustainability Policies' at www.itcportal.com)

A Gender Friendly Workplace

As a good corporate citizen, ITC is committed to a gender friendly workplace. It seeks to enhance equal opportunities for all genders, prevent / stop / redress sexual harassment at the workplace and institute good employment practices. (For further details, please refer to the 'Policy on Diversity and Equal Opportunity' under 'Sustainability - Sustainability Policies' at www.itcportal.com)

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.

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 or offensive conduct. Committees have been constituted across locations to enquire into complaints and to recommend appropriate action, wherever required. Necessary disclosures in relation to the sexual harassment complaints received and redressal thereof are provided in the Report and Accounts of the Company.

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 and giving gifts & presents of more than a nominal value, gratuity payments, bribes and other payments from and to suppliers and customers will be viewed as a serious breach of discipline as this could lead to compromising the Company's interests.

Transactions with suppliers and customers shall be strictly within the prevailing Governance framework. All agreements entered into by the Company shall have an appropriate clause in this regard.

Legal Compliance

It is the Company's policy to fully comply with all the applicable laws and regulations. All Directors, senior management and employees shall comply with the applicable laws. The Company cannot accept practices that are unlawful or may be damaging to its reputation. Ensuring legal and regulatory compliance is the responsibility of the Chief Executives of the respective Businesses and their Divisional Management Committees (DMCs) in case of Divisions, and the respective Heads in case of Corporate Departments. The DMCs of the respective Businesses and Heads of Corporate Departments must satisfy themselves that sound and adequate arrangements exist to ensure compliance with the statutory and regulatory requirements impacting the Business / Department, and identify & respond to developments in the regulatory environment relevant to the Business / Department. In the event the implication of any law is not clear, the Company's Legal Department shall be consulted for advice.

Monthly statutory compliance reports from the Businesses and Corporate Departments shall be placed before the CMC and the Board of Directors of the Company (the Board), highlighting the non-compliances, if any, along with related action plan.

[Reference to Chief Executives of Businesses shall include Heads of SBUs, Business Verticals and Shared Services. Further, reference to DMCs shall include SBU Management Committees and Executive Committees for Business Verticals, Shared Services and such other similar committee(s) as may be constituted by the CMC / Board.]

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 that high standards of hygiene and housekeeping are maintained. Particular attention should be paid to training of employees to increase safety awareness and adoption of safe working methods, including use of personal protective equipment, designed to prevent serious or fatal accidents. Employees shall diligently comply and practice the health and safety policies and practices of the Company.

Periodic as well as episodic internal and external health and safety audits shall be conducted. Findings of such audits with action plans, if any, as well as reports on accidents, shall be presented to the respective DMCs and where necessary to the CMC and the Board.

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 the applicable laws and regulations, Businesses must establish procedures for assessing the environmental impact of their present and future activities. They should adopt Best Practices in their environmental policies and procedures, and employees shall follow such policies and procedures diligently.

(For further details, please refer to the 'Policy on Environment, Health and Safety' under Sustainability - Sustainability Policies at www.itcportal.com)

PERSONAL CONDUCT

All Directors, senior management and employees have the obligation to conduct themselves in an honest & ethical manner and with integrity, and act in the best interest of the Company at all times. They are expected to demonstrate exemplary personal conduct in relation to the Company's business and reputation 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. Conflict of interest may arise when (a) an employee or a family member (family member includes spouse, children, siblings and parents) has a material interest in an entity that has a business relationship with the Company or is being evaluated for a commercial transaction, or (b) an employee is in a position to benefit someone with whom he / she has a close relationship, in relation to the Company's business. However, this is an area in which it is not possible to provide comprehensive guidance but the guiding principle is that conflict, if any, or any potential conflict must be disclosed to higher management for guidance and action as appropriate.

Where situations of conflict of interest arise, the same should immediately be brought to the notice of the Head of Finance and the Head of Human Resources of the respective Business, and in case of Corporate Departments, to the Chief Financial Officer and the Head of Corporate Human Resources.

In scenarios of conflict of interest, apart from informing the relevant managers, the employee must maintain objectivity in his / her decision making, carry out rigorous due diligence, and always maintain the primacy of the Company's interests.

Recruitment of spouse / children of any existing employee in the Company shall require prior approval of the CMC. Disclosure of such relationship is provided for in the application form which is required to be completed at the time of recruitment. In all such cases, it shall be ensured that the new entrant is not positioned in roles that may create potential conflicts of interest between his / her personal and professional matters, in view of his / her relationship with the existing employee.

(For conflict of interest in respect of Suppliers and Service Providers, please refer to 'Code of Conduct for Suppliers and Service Providers' under Sustainability Policies at www.itcportal.com)

Anti-Bribery and Corruption

ITC believes in conducting its business in a transparent manner and does not indulge in bribery or corruption.

Hospitality and Gifts

Hospitality and gifts are sometimes exchanged during the course of business as social and customary gestures. These are infrequent, nominal in nature and not excessive.

However, considering that exchange of gifts and hospitality could become a source of conflict of interest, due care must be taken to ensure that it is done sparingly and with reasonableness.

In the event employees require any clarification about the reasonableness of a gift or hospitality, they must consult the Head of Human Resources of the Unit / Department / Business.

In this context, please also refer to the Company's Code of Conduct for Suppliers and Service Providers.

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. Where relevant, it is encouraged to voluntarily ensure that all areas are open to audit and the conduct of activities is totally auditable.

Protection of Confidential Information

No Director, senior management and employee shall disclose or use any confidential information, including unpublished price sensitive information, gained in the course of employment / association with the Company for their 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.

Dealing in Securities of the Company

  • Employees and their Immediate Relatives shall not enter into any derivative transactions with respect to the shares of the Company.
  • Employees, who have been granted Stock Options under the Company's Employee Stock Option Schemes (ITC ESOS) and have outstanding Options, shall not buy and / or sell any shares of the Company, other than exercise of Options under ITC ESOS and sale of shares acquired upon such exercise of Options.
  • The following category of persons shall not buy and / or sell shares of the Company in excess of 10,000 shares in aggregate in a calendar quarter:
    • - Employees who do not have any outstanding Stock Options granted under ITC ESOS;
    • - Immediate Relatives of Employees.

['Immediate Relative' means spouse, and includes parent, sibling, and child of the employee or of the spouse, if any of them is financially dependent on the employee or consults the employee in taking decisions relating to trading in securities of the Company.]

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.

Leading by Example

The organisation's Directors and senior management set the professional tone for the Company. Through both their words and their actions, the organisation's leadership conveys what is acceptable and unacceptable behaviour. ITC's Directors, senior management and employees must constantly reinforce, through their actions and behaviour, that ITC's stated beliefs of responsible corporate citizenship are rooted in individual conviction and personal integrity.

WAIVERS

Waiver of any provision of this Code must be placed for approval before the Board / CMC, as appropriate.

DUTIES OF INDEPENDENT DIRECTORS

In addition to the above, Independent Directors of the Company are also required to comply with their duties laid down under Schedule IV to the Companies Act, 2013, as detailed in the Annexure.

NON-ADHERENCE

Instances of non-adherence to the requirements relating to this Code shall be dealt with by the Company through an appropriate internal mechanism. Employees may bring to the notice of the Whistleblower Complaints Committee any illegal or unethical conduct, actual or suspected incidents of fraud, actions that affect the financial integrity of the Company, or actual or suspected instances of leak of unpublished price sensitive information, that could adversely impact the Company's operations, business performance and / or reputation.

AWARENESS OF CODE OF CONDUCT

This Code will be shared with all new employees at the time of joining the Company and a copy will be signed by them affirming compliance with the same. In addition, all Directors and senior management shall affirm compliance with the Code on an annual basis. Further, the Code will also be shared with the existing employees periodically and their affirmation will be taken to reinforce the Code and ensure its Company-wide implementation.

The Head of Human Resources of the respective Business / Head of Corporate Human Resources, as applicable, will address any queries from employees pertaining to this Code. All employees are expected to keep themselves abreast of the updates, if any, made to this Code.

GENERAL

In the event of any inconsistency between this Code and the applicable laws, the applicable laws will prevail.

This Code will be reviewed by the Board as and when deemed necessary.

WHISTLEBLOWER POLICY

1. Philosophy

ITC Limited ('the Company') believes that every employee and Director of the Company is a trustee of its stakeholders and must conduct himself or herself at all times in a professional, responsible and ethical manner.

2. Purpose and Scope

This Policy ('the Policy') encourages Directors and employees of the Company to promptly bring to the Company's attention, instances of illegal or unethical conduct, actual or suspected incidents of fraud, actions that affect the financial integrity of the Company, or actual or suspected instances of leak of unpublished price sensitive information ('UPSI'), that could adversely impact the Company's operations, business performance and / or reputation. The Company will investigate such reported incidents in an impartial manner and take appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld.

3. Objective

The Company endeavours to:

  1. Provide an environment where every Director and employee of the Company feels free to report instances within the purview of this Policy;
  2. Investigate such reported incidents in a fair manner;
  3. Take appropriate disciplinary action against the delinquent employee(s);
  4. Ensure that no complainant is victimised or harassed for bringing such incidents to the attention of the Company.

The practice of this Policy will be overseen by the Audit Committee.

4. Reporting Mechanism

a. Complainants are encouraged to bring to the attention of the Company incidents pertaining, inter alia, to:

  1. Illegal or unethical conduct including that which adversely affects investors, shareholders, customers, suppliers, other employees, or the business performance or image or reputation of the Company;
  2. Actual or suspected incidents of fraud;
  3. Actions that affect the financial integrity of the Company;
  4. Conflict of interest with the Company;
  5. Leaking of confidential or proprietary information of the Company; and
  6. Actual or suspected instances of leak of UPSI pertaining to the Company.

b. The complainant may send the complaint to the Whistleblower Complaints Committee [as stated under Paragraph 5(a) below] in writing, either by (i) sending an e-mail to whistleblowing@itc.in or by (ii) sending a letter sealed in an envelope (which is distinctly marked "Confidential"), to either of the following addresses:

ITC Limited
P. O. Box Number 9275
Kolkata - 700071
ITC Limited
37, Jawaharlal Nehru Road
Kolkata - 700071

Complaint for any actual or suspected instance of leak of UPSI should also be copied to the Company Secretary and the Chief Financial Officer.

c. Complaints by or against Directors, senior management (as defined in the ITC Code of Conduct) and members of the Whistleblower Complaints Committee [as stated under Paragraph 5(a) below] shall be sent directly to the Chairman of the Audit Committee, with a copy to the Chairman and Managing Director of the Company.

d. Anonymous complaints are not encouraged. However, such complaints may be entertained if the complaint sets out specific allegations and verifiable facts and is accompanied with supporting evidence.

e. Complaints that are mischievous, mala fide, made with oblique or ulterior motive and / or sans evidence shall not be covered under the purview of this Policy.

f. In order to facilitate effective investigation, the complaint should be supported with documents evidencing the complaint and should include all relevant information about the incident as the complainant is aware of, including the following:

  1. Nature, period and other details of the incident including the location and business unit where such incident has occurred; and
  2. Identity(ies) of the person(s) suspected to be involved in the incident.

g. To facilitate investigation, complainants are encouraged to report incidents promptly upon becoming aware of the same, preferably within 30 days.

5. Investigation

a. Complaints submitted via e-mail to the designated email address shall automatically be received by the Whistleblower Complaints Committee comprising the Head of Corporate Human Resources, the General Counsel and the Head of Internal Audit of the Company.

b. Upon receipt of a complaint within the scope of this Policy, the Whistleblower Complaints Committee shall review the same and if the complaint is found to be serious and credible, the Committee shall investigate such complaint.

For the purpose of conducting an investigation, the Whistleblower Complaints Committee is authorised to:

  1. seek any information it requires from any employee, who shall cooperate with any such request made by the Committee;
  2. seek assistance from any employee for conduct of investigation, as may be considered appropriate;
  3. obtain external legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, if it considers necessary;
  4. call for such documents and representations, as may be deemed fit.

c. Report of the investigation, along with recommendations of the Whistleblower Complaints Committee in relation to further actions to be taken in connection with the complaint, shall be placed before the Corporate Management Committee of the Company ('CMC').

d. Upon receipt of the investigation report and the recommendations of the Whistleblower Complaints Committee, the CMC shall give directions for necessary actions to be taken and submit a report in this connection to the Audit Committee.

e. The information disclosed during the course of an investigation, including the identity of the complainant, shall be kept confidential, except as necessary or appropriate to be disclosed for the purpose of the investigation or where required by law.

f. Investigation of complaint by or against Directors, senior management and members of the Whistleblower Complaints Committee shall be carried out as directed by the Audit Committee.

g. Complaint for any actual or suspected instance of leak of UPSI shall be dealt with in accordance with the Company's Policy for inquiry in case of leak of UPSI.

h. Any person against whom a complaint has been made shall recuse himself / herself from any investigating or reporting responsibility in connection with such complaint.

6. No Retaliation

  1. This Policy is intended to encourage, facilitate and enable raising of genuine concerns. No complainant who reports an incident under this Policy shall suffer any harassment, retaliation or adverse employment condition as a consequence of such reporting.
  2. Any employee who retaliates against a person reporting a violation will be subject to disciplinary proceedings, which may extend to termination of employment.
  3. If any complainant is victimised or harassed for reporting any genuine concern, he / she may file an application before the Whistleblower Complaints Committee seeking redressal of the matter. The Whistleblower Complaints Committee shall take appropriate action to attend to the complainant's concern. However, if the complainant feels that his / her concern has not been addressed, he / she may approach the Line Director / Line CMC Member, as applicable, failing which the Chairman and Managing Director of the Company. In exceptional cases, direct access to the Chairman of the Audit Committee shall be provided.

7. Complaints to be made in good faith

  1. A complainant must act in good faith and have reasonable grounds for forming a belief that his or her complaint constitutes an incident within the purview of this Policy.
  2. This Policy should not be used as a tool for making false or mala fide allegations.
  3. Any person who is found to be making baseless, reckless, malicious or deliberately false allegation, shall be subject to disciplinary proceedings, which may extend to termination of employment.

8. Applicability

This Policy will be effective from 1st July, 2020 and will be reviewed as and when deemed necessary.