ITC Ltd.

Submitted to: Prof. Rashmi Menon Submitted by: Bandana / Perpetua / Shivani / Payal / Rutika

History
Type: Industry: Founded: Founders: HQ: Key People: Public (BSE: 500875) Conglomerate 1790 (as Wills & Co.) Henry O Wills Kolkata Y C Deveshwar (Chairman), Kurush Grant (Exec. Dir.), P.Dhobale (Exec. Dir.), Nakul Anand (Exec. Dir.), Rajiv Tandon (CFO) US$ 6 Billion (2009) 26150

Revenue: Employees:

Corporate Governance ITC Ltd.

Introduction
Principles have been adopted by the Board of Directors along with the charters of the Boards committees, form the framework for the governance of the Company Principles will be reviewed by the Board from time to time, to ensure that they effectively promote the best interests of both the Company and the Companys stockholders, and that they comply with all applicable laws, regulations and stock exchange requirements

Board Responsibilities
Responsibilities:
To manage the business and affairs of the Company To provide direction and oversight. To oversee the strategic direction of the Company and the performance of the Companys business and management To present strategic plans to the Board for review and approval and for implementing the Companys strategic direction To exercise their business judgment in the best interests of the Company

Specific Functions of the Board

Taking a leadership role in shaping the Companys corporate governance Understanding and approving the Companys long-term, key strategies

Understanding the issues & risks that are central to the Companys success Overseeing the performance of the Companys independent auditors & the quality & integrity of the Companys financial statements & report Selecting, evaluating & compensating the CEO & overseeing CEOs succession planning Providing counsel & oversight with respect to the Companys compensation programs Overseeing the performance of management Reviewing, approving & monitoring fundamental financial & business strategies & major corporate actions Ensuring processes are in place for maintaining an ethical corporate culture

The Committees of the Board

To assist the Board in discharging its responsibilities: Nominating/Corporate Governance Committee Audit and Finance Committee Compensation Committee Security, Safety, Environmental, Health and Reliability Committee

Selection of Chairman & Chief Executive Officer

Policy of the Company that the positions of Chairman of the Board and Chief Executive Officer be held by the same person, except in unusual circumstances

Selection of Directors
The Board is responsible for nominating directors for election by stockholders In nominating a slate of directors, the Board, with the assistance of the Nominating/Corporate Governance Committee, shall take into account
Minimum individual qualifications, including strength of character, mature judgment, industry knowledge or experience and an ability to work collegially with the other members of the Board and all other factors it considers appropriate, which may include independence from management; age, gender and ethnic background; existing commitments to other businesses; potential conflicts of interest with other pursuits; legal considerations such as antitrust issues; corporate governance background; financial and accounting background

Director Compensation
The Compensation Committee shall periodically review the form and amounts of director compensation and make recommendations to the Board with respect thereto The Board shall set the form and amounts of director compensation, taking into account the recommendations of the Compensation Committee. The Board believes that the amount and kind of director compensation should be guided by three goals:
compensation should fairly pay directors for work required in a company of the Companys size and scope; compensation should align directors interests with the long-term interests of stockholders; and the structure of compensation should be simple, transparent and easy for stockholders to understand

Responsibility of Directors
The Board has developed a number of specific expectations of directors to promote the discharge by the directors of their responsibilities and to promote the efficient conduct of the Boards business It is understood that the non-management directors are not full-time employees of the Company Commitment and Attendance
All directors should make every effort to attend meetings of the Board and the Committees of which they are members.

Attendance at Stockholders Meetings

The Board generally schedules a board meeting in conjunction with the Companys annual stockholders meeting & expects directors, absent valid reasons, to attend the annual stockholders meeting. The Company will annually disclose how many directors attended the previous years annual stockholders meeting.

Continued
Participation in Meetings
Each director should be sufficiently familiar with the business of the Company, including its financial statements and capital structure, and the risks and the competition it faces, to ensure active and effective participation in the deliberations of the Board and of each Committee on which s/he serves.

Loyalty and Ethics

This duty of loyalty mandates that the best interests of the Company take precedence over any interest possessed by a director

Other Directorships and Significant Activities

The Company values the experience directors bring from other boards on which they serve and other activities in which they participate, but recognizes that those boards and activities may also present demands on a directors time and availability and may present conflicts or legal issues, including independence issues Directors may not serve on more than four publicly traded boards

Continued
Contact with Management and Employees
All directors shall be free to contact the Chief Executive Officer at any time to discuss any aspect of the Companys business Directors shall also have complete access to other employees of the Company

Confidentiality
The proceedings and deliberations of the Board and its Committees shall be confidential

Board and Committee Meetings

The Board shall meet as frequently as needed for directors to discharge properly their responsibilities At least four regular meetings each year and special meetings as required

Each Committee shall meet at such times as provided for in its charter
The agenda for each Board meeting shall be established by the Chairman and the CEO Any Board member may suggest the inclusion of additional subjects, which subjects will be taken up by the Board in a timely manner

Executive Sessions
Those directors of the Company who are not officers of the Company shall hold regularly scheduled executive sessions at which management, including the CEO, is not present If a director is chosen to preside at each of the executive sessions to be held in the coming year, such director shall be identified in the Companys annual proxy statement As an alternative, the Board may choose to alternate directors who will lead the executive sessions and establish a procedure by which the presiding director will be selected for each executive session The presiding director of these executive sessions is currently the Lead Director of the Board These executive sessions shall serve as the forum for
the annual evaluation of the performance of the CEO the annual review of the CEOs plan for management succession and the annual evaluation of the performance of the Board

Evaluating Board & Committee Performance

The Board, acting through the Nominating/Corporate Governance Committee, shall conduct an annual self-evaluation Each Committee shall conduct an annual self evaluation as provided for in its respective charter

Orientation & Continuing Education

Management shall provide an initial orientation process for new directors, including
background material on the Company and its business a review of corporate governance and conduct policies and procedures and meetings with the senior executive team

The orientation process shall occur after the new director becomes a Board member Each director also will be provided with & participate in an annual training session on those policies & procedures Each director shall verify that s/he understands and is compliant with the Companys corporate governance and conduct policies that apply to members of the Board of Directors On an annual basis, directors will attend an in-house education seminar and, as appropriate, management shall prepare additional educational sessions for directors on matters relevant to the Company and its business Directors are also expected to attend at least one director education seminar, conducted outside of the Company, every two years

Reliance on Management & Outside Advice

In performing its functions the Board shall be entitled to rely on the advice, reports and opinions of management, counsel, accountants, auditors and other expert advisors The Board shall have the authority to select, retain, terminate and approve the fees and other retention terms of its outside advisors

Awards
Won the Golden Peacock Award for Excellence in Corporate Governance 2005from Institute of Directors n World Council for Corporate Governance and Centre for Corpo. Governance

It has thereby attempted to strike the right balance between freedom of management and accountability to shareholders by segregating strategic supervision from strategic n executive management.

CSR Activities ITC Ltd.

Societal Value Creation - CSR

Collaboration with communities n govt. institutions to enhance farm productivity and rural resource base Agricultural R&D n knowledge sharing have spanned vital aspects of competitiveness efficient farm practices, soil n water management . e-Choupal a knowledge portal providing info n services
Empowered 4 million farmers by installing 6500 e-Choupals Generated 5198 million person days of employment Brought 69484 hecatres of land under soil n moisture conservation Includes 15744 women members 250 cattle development centres Covered 2,79,711 children thru 2715 supplementary learning centres

Societal Value Creation - CSR

Value Chain: Farm to Factory Gate

Societal Value Creation - CSR

Leveraging IT for Rural Transformation
Deliver real-time info n customized knowledge to improve farmers decision making ability, n thereby better align farm output to mkt demands n secure better quality, productivity & improved price Aggregate demand in the nature of a virtual producers cooperative n thereby access higher quality farm inputs and knowledge at lower cost Set up a direct marketing channel virtually linked to the mandi system for price discovery, yet eliminating wasteful intermediation and multiple handling, thus reducing transaction costs and making logistics efficient

Societal Value Creation - CSR

Societal Value Creation - CSR

A Carbon positive Corporation
Global warming causing poverty n environmental degradation Reduce Green House Gas emissions energy conservation, use of renewable sources of energy n identifying ways of mitigating the adverse effects of climate change Joined international efforts in delaying the impact of climate change ITCs social n farm forestry initiatives have created a green cover of over 1,00,000 hectares Has invested significantly in R&D to create clonal saplings that are disease resistant, grow faster n have higher survival rates convert private degraded wastelands into viable pulpwood plantations

Societal Value Creation - CSR

A Carbon positive Corporation
Provide sustainable raw material sources for Companys Paperboards business, n create livelihood opportunities for tribals n farmers in rurals

Energy efficient practices have helped in achieving world-class standards of energy utilization
ITC has chosen Wind Energy as a focus area packaging in Chennai

Societal Value Creation - CSR

Water Positive Corporation
Achieving lowest specific water consumption thru conservation, audit n benchmarking

Zero water discharge treating n recycling all waste water, thereby reduce fresh water intake n prevent pollution of fresh water resource
Rainwater harvesting within the units n across different watershed areas

Societal Value Creation - CSR

Solid Waste Recycling Positive
Reuse / recycle almost the entire waste generated out of operations at Cigarette Factories; Leaf Threshing units; Paperboards n Specialty paper units; ITC Green centre; ITC Hotels etc. Zero water discharge treating n recycling all waste water, thereby reduce fresh water intake n prevent pollution of fresh water resource Rainwater harvesting within the units n across different watershed areas

Awards
United Nations Industrial Development Organization (UNIDO)
Sharing innovative agribusiness solutions 2008

The Ashoka Changemakers Health for All

For Rural Health services model - 2006

The Stockhold Challenge 2006

using IT for economic development of rural communities

Innovation for India Award 2006 for ITC e-Choupal Development Gateway Award 2005 for e-Choupal

Awards
Golden Peacock Global Award for CSR in emerging economies
E-Choupal n Social n Farm Forestry; 2005 n 2004

CSR Award 2004 from The Energy n Resources Institute (TERI)

Enterprise Business Transformation Award for Asia Pacific institute by Infosys Technologies n Wharton School
NASSCOM award for Best IT user in FMCG - 2003 Seagate Intelligent Enterprise of the Year 2003 award

Thank You. ITC