Management Approach

Policy: The Company's commitment in the area of economic performance is encapsulated in its Vision statement, which is 'to sustain ITC's position as one of India's most valuable corporations through world-class performance, creating growing value for the Indian economy and the Company's stakeholders'. ITC's Mission is 'to enhance the wealth generating capability of the enterprise in a globalising environment delivering superior and sustainable stakeholder value'.

The Company's strategy is to ensure that each of its businesses is world-class and internationally competitive in the Indian global market in the first instance, and progressively in the offshore global markets.

ITC, as a premier 'Indian' enterprise, consciously exercises the strategic choice of contributing to and securing the competitiveness of the entire value chain of which it is a part. This philosophy has shaped the Company's approach to business into 'a commitment beyond the market'.

Goals and Performance: At the enterprise level the Company's goals include:

• Sustaining ITC's position as one of India's most valuable corporations
• Achieving leadership in each of the business segments within a reasonable time frame
• Achieving a Return on Capital Employed (ROCE) in excess of the Company's cost of capital, at all times

Amongst listed companies in the private sector, ITC ranked 4th in terms of Gross Turnover and 3rd in terms of pre-tax profits for the financial year ended 31st March 2006. The Company ranked 6th by market capitalisation amongst listed private sector companies in the country, as at 31st March 2006.

The Company has consistently achieved a ROCE well in excess of its cost of capital. Of the Rs.10,325 crores of 'value added' by the Company during the financial year ended 31st March 2006, 74% represented Contribution to the Exchequer.

Please refer to the 'Report of the Directors and Management Discussion and Analysis' section of the Report and Accounts 2006 (available on itcportal.com) for a detailed discussion on the Company's market standing in each of the business segments.

Context: Please refer to the 'Report of the Directors and Management Discussion and Analysis' section of the Report and Accounts 2006 for a detailed discussion on the business environment, opportunities, key challenges, etc. pertaining to each of the Company's businesses (available at www.itcportal.com).