Sustainablity Report 2004 - Environmental Performance

Assurance Statement from PriceWaterhouseCoopers

Objectives of Review
A	We were asked by the Management of ITC Limited ("ITC") to provide an "Independent Assurance" to the Corporate Sustainability Report ("Report") for the period 1st April 2003 to 31st March 2004.
The Corporate Sustainability Report and its contents are the responsibility of the management of ITC, while the Independent Assurance Report is the responsibility of Pricewaterhouse- Coopers Private Limited.

Scope of the Review
The scope of the review included:
A	Review of certain statements and data relating to ITC’s operations and to provision of limited assurance in respect of these statements and data;

B	Checking of monitoring and reporting procedures to support reliable disclosure in the Sustainability Report;

C	Assessment whether the Report provides an appropriate representation of existing policies in the areas of human resources, health, safety, environment and community involvement;

D	Checking of the data stated at indicators EC10 (Donations to community etc.), EN10 (Emission from select ITC units), EN11 (Waste generation at various ITC units), EN5 (Total water use), EN3&4 (Direct and indirect energy used), EN22 (Recycle, reuse of water), LA7 (Standard Injury lost day etc.) and LA9 (average hours of training) in the Sustainability Report 2003-04 and whether they are consistent with the activities in the plant areas for the financial period and are documented and stated in accordance with the guidelines stated under their environmental and social policies.


Basis for Assurance
The Corporate Sustainability Report has been prepared "Generally in line with the GRI Guidelines of 2002", accordingly, Guidelines on Corporate Sustainability Reporting published by Global Reporting Initiative formed the basis for providing the assurance.

Parties responsible for Assurance Engagement The assurance engagement was led by Dr P Ram Babu, a Sustainability Systems expert, employed with PricewaterhouseCoopers Private Limited (PwC), with over 24 years experience in Corporate Sustainability Management and Reporting Systems. The engagement was executed by a team of sustainability specialists with PwC including Mr Surojit Bose, Dr Muna Ali and Mr Ritwik Bhaumik; all of whom are employed with Pricewaterhouse Coopers Private Limited, with 7-10 years experience in sustainability issues. Assurance procedures carried out There are no internationally accepted standards for preparation and/or assurance of Corporate Sustainability Reports. In the absence of such standards, our approach is based on emerging best practices and the underlying principles within international standards for assurance engagements. More specifically, our work was planned and conducted to obtain "moderate negative assurance" based on International Standards on Auditing-ISA 910.

Our work consisted of:
A	interviews with management responsible for environmental, safety, internal audit, legal, human resource, finance and company secretary. Meeting with the chairman to understand commitment to sustainability;

B	examination of documentation on economic, environmental and social policies, practices, performance, governance etc;

C	a desktop review of external economic, environmental and social issues facing ITC

D	an assessment of the systems for data collection, analysis, consolidation, reporting etc.

E	review and sample testing of nine of the reported indicators presented at EC10 (Donations to community etc.), EN10 (Emission from select ITC units), EN11 (Waste generation at various ITC units), EN5 (Total water use), EN3&4 (Direct and indirect energy used), EN22 (Recycle, reuse of water), LA7 (Standard Injury lost day etc.) and LA9 (average hours of training) in the Sustainability Report 2003-04 and their associated processes etc. However, the assurance process did not include the involvement of any of the major stakeholder groups. The data and graphs on financial performance, as specified in the report under Economic Indicators, are properly derived from the audited 2004 financial statements of ITC Limited.

Conclusion
A	On the basis of the work undertaken, nothing came to our attention to suggest that the information cited at indicators EC10 (Donations to community etc.), EN10 (Emission from select ITC units), EN11 (Waste generation at various ITC units), EN5 (Total water use), EN3&4 (Direct and indirect energy used), EN22 (Recycle, reuse of water), LA7 (Standard Injury lost day etc.) and LA9 (average hours of training) are materially mis-stated.

B	The Report is generally in line with Global Reporting Initiatives Guidelines of 2002 on preparation of Corporate Sustainability Report.

C	The internal control and management systems are modeled on good practices and on ISO based quality and environment management system.

D	The Corporate Management Committee reviews the sustainability aspects and performance; and sets the tasks for the executive management. The Corporate Management Committee reports directly to the Board of Directors of ITC.

E	In the area of Social Performance Indicators, the prevailing practices in ITC are in conformity with good practices. In some areas, explicitly documented policies and processes would need to be put in place in accordance with GRI Reporting Guidelines. ITC’s initiatives – e-choupal, watershed management and social/agro forestry initiatives are well integrated with its business.

F	Though the scope and boundary of the report has been clearly delineated at appropriate location in the report but the scope and boundary of the reporting entity has changed at a few indicators. The management has committed to progressively ensuring uniformity in reporting entity across all indicators in subsequent reports.

G	Though the reporting period principle has by and large been adhered to, in some instances, data, statements and achievements attributable to periods preceding the reporting period have also been reported.
Name : Dr P Ram Babu Place: Mumbai, India Date: December 22, 2004

ASSURANCE STATEMENT

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