lTC Limited

Virginia House
37 J. L. Nehru Road
Kolkata 700 071 , India
Tel. : 91 33 2288 9371
Enduring Value Fax : 91 33 2288 4016 I 1256 I 2259 I 2260

22nd June, 2022

The Manager The General Manager The Secretary

Listing Department Dept. of Corporate Services The Calcutta Stock
National Stock Exchange of BSE Ltd. Exchange Ltd.
India Ltd. P. J. Towers 7, Lyons Range
Exchange Plaza Dalal Street Kolkata 700 001
Plot No. C-1, G Block Mumbai 400 001
Bandra-Kurla Complex
Sandra (East)
Mumbai 400 051

Dear Sirs,

Report and Accounts for the financial year ended 31 51 March, 2022

We enclose, in terms of Regulations 30 and 34 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a copy of the Report and Accounts of the Company for the
financial year ended 31st March, 2022 together with the Notice dated 181h May, 2022 convening
the 111 th Annual General Meeting (AGM) of the Company on 201h July, 2022.

The aforesaid Report and Accounts and AGM Notice are also being uploaded on the
Company's corporate website www.itcportal.com .

Yours faithfully,
IT Limited

Executive Vice President &

Company Secretary

Encl. as above.

FMCG • HOTELS • PAPERBOARDS & PACKAGING • AGRI-BUSINESS • INFORMATION TECHNOLOGY

Visit us at www .itcportal.com • Corporate Identity Number: Ll600SWB1910PLC001985 • e-mail : enduringvalue@itc .in
 Enduring Value

cc: Securities Exchange Commission

Division of Corporate Finance
Office of International Corporate Finance
Mail Stop 3-9
450 Fifth Street
Washington DC 20549
U.S.A.

cc: Societe de Ia Bourse de Luxembourg

35A Boulevard Joseph II
L-1840 Luxem bourg
Nation First: Sab Saath Badhein

REPORT AND ACCOUNTS 2022

REPORT AND ACCOUNTS 2022

Contents Contents are hyper-linked to the relevant pages of the report

Click 'ITC Limited' on the Header/Footer of each page to return to Contents
ITC: Winning the Future
Consumer Centricity, Innovation, Digital Transformation and Sustainability

Board of Directors and Committees 01

Report on Corporate Governance (including Shareholder Information) 12

Report of the Board of Directors & Management Discussion and Analysis 38

Secretarial Auditor’s Report 133

CEO and CFO Compliance Certificate 145

Standalone Financial Statements

Balance Sheet 146

Statement of Profit and Loss 147

Statement of Changes in Equity 148

Cash Flow Statement 150

Notes to the Financial Statements 152

Independent Auditor’s Report 214

Guide to Subsidiaries, Joint Ventures & Associates 226

Salient Features of the Financial Statements of
Subsidiaries, Joint Ventures & Associates (AOC-1) 229

Consolidated Financial Statements 233

Ten Years at a Glance 318

Financial Highlights

Business Responsibility and Sustainability Report I-XLI

Awards & Accolades

ITC Infotech: Business Friendly Solutions

Creating Enduring Institutions

The mnemonic represents ITC’s vibrant businesses that are future-ready, with a focus on
consumer centricity, agility and resilience. The flower symbolises ITC’s inherent focus on
sustainability, while the petals stand for the Company’s 12 future-ready businesses. At the
centre, the power button reflects the digital transformation that is at the core of every
business, while the human figures circling the mnemonic represent our universe of
stakeholders, including shareholders, consumers, communities, farmers and employees,
and depict ITC’s philosophy of inclusive growth.
 REPORT AND ACCOUNTS 2022

ITC: Winning the Future

Consumer Centricity, Innovation,
Digital Transformation and Sustainability

As we step into the third year of the pandemic, it is to navigate through the dynamic environment with
abundantly clear that we are at the crossroads of a consumer-centricity, demonstrating speed in seizing
redefined future. While economies started rebounding, market opportunities, relentless focus on execution
new challenges emerged including geopolitical tensions, excellence and pro-active strategic interventions.
inflationary headwinds as well as extended supply chain
disruptions. Our journey into the future will be shaped by An extensive strategy reset across all businesses to
our ability to adapt to the new normal and address define the contours of ‘ITC Next’ helped putting in place
emerging challenges with agility, innovative capabilities, structural drivers to ensure that the enterprise would
inclusivity and resilience. While the COVID-19 crisis has remain future-ready, nimble and inclusive.
caused unprecedented disruptions to human life and As a core element of the ITC Next strategy, ITC has been
economic activity, it has also provided multi-dimensional exploring opportunities to craft disruptive business
learnings which will power transformational change
models anchored at the intersection of Digital and
going forward. We witnessed the constant breakthroughs
Sustainability, the two defining trends that are
in science, technology and innovation, the extraordinary
redefining the ‘new normal’, while leveraging the
fortitude displayed by humanity in serving people in
Company’s institutional strengths.
distress, the unprecedented scale of collaboration and
rapid forging of partnerships, all of which tell a story of ITC has always believed that when enterprises make
hope and resilience and of humankind’s ability to rise as societal value creation an integral part of their
one and overcome every adversity. The Black Swan event corporate strategy, powerful drivers of innovation
also accentuated the undercurrents of Digital and emerge that make growth more enduring for all
Sustainability as predominant megatrends and these will stakeholders. This paradigm of ‘Responsible
continue to be the two most defining trends of the future. Capitalism’ focuses on extreme competitiveness but in
Recognising the need to scale new horizons of a manner that builds environmental capital and
competitiveness, ITC pivoted with agility and resilience supports sustainable livelihoods.
REPORT AND ACCOUNTS 2022

climate change, bringing sustainability back on centrestage.

Accelerated Digital Adoption The pandemic has also accelerated the need for livelihood
creation. Given such imperatives, the need of the hour is to
look at completely new models of economic growth which
integrate environmental stewardship and livelihood
generation into business models.
Anchored on the innovative and inclusive business
models that the Company has implemented over the last
two decades, ITC has now embarked on an even more
ambitious Sustainability 2.0 agenda to strengthen and
scale up its large gamut of interventions to enable the
transition to a net zero economy, work towards ensuring
water security for all, restore biodiversity, create an
effective circular economy for post-consumer packaging
waste and scale up programmes that support sustainable
livelihoods. ITC is setting the bar higher, while retaining
its status as a sustainability exemplar. Further details are
provided in the ‘Sustainability 2.0 - Promoting
Responsible Capitalism’ section of this feature.

Focus on Consumer Centricity

The pandemic has accelerated adoption of digital across

every sphere of economic activity from supply chains
to production to consumer engagement and commerce
to remote working. It has opened up new opportunities,
enabling huge productivity gains in processes and
systems, besides creating new ‘digital-first’ business
models. As the ecosystem evolves rapidly, technologies
like Artificial Intelligence, Machine and Reinforcement
Learning, IoT, Robotics, are redefining the way business
is conducted.
It is clear that enterprises need to develop deep
and distinctive digital capabilities to win the future.
At ITC, our aspiration is to create a ‘FutureTech’
enterprise by powering cutting-edge digital
technologies, investing in processes, systems and
people to enable competitive business transformation.
While the Company had already created a large
enterprise-wide digital footprint, the pandemic paved
the way for accelerated digital transformation across
every node of the value chain.
The ‘Digital at ITC: Building a FutureTech Enterprise’ The pandemic has also led to a marked shift
section of this feature provides a snapshot of ITC’s in consumer behaviour, increasing the demand for
digital interventions across businesses and operations. products focusing on health, wellness, safety
and hygiene. Preference for trusted brands is on the
Reimagining Sustainability rise. There is a significant demand for convenience,
natural and organic.
It is therefore critical for organisations to not only deal
with the immediate context, but also speedily spot
evolving trends and leverage their institutional strengths
to design, develop and deliver products and services to
consumers ahead of time. The ITC Next strategy aims to
achieve the next horizon of growth by revitalising its
offerings to address the fast evolving trends and
consumer preferences.
The pages that follow provide a glimpse into ITC’s
multi-dimensional growth drivers, which will power
the Company to a new horizon of competitive and
Extreme and frequent weather events have emerged as sustainable progress, creating even larger value for all
existential threats necessitating enhanced action on its stakeholders.
 REPORT AND ACCOUNTS 2022

ITC’s Triple Bottom Line Contribution

Economic

Amongst
`59,101 cr Top 3 75% Free Cash Flow
Corporates in the Generation of
Gross Revenue* Private Sector in of Value-added
terms of Contribution Accrues to `13,000 cr
to Exchequer the Exchequer
over the years

12
Future-ready Businesses
spanning all 3 Sectors
of the Economy-
200+ 113
Manufacturing Hotel Properties
Agriculture, Units
Manufacturing,
Services

25+ Over 900

Nearly

World-class Patents Filed

7 Million
Indian Brands Retail Outlets Serviced

*for the year ended 31st March, 2022

REPORT AND ACCOUNTS 2022

Social

6 Million e-Choupal: Livestock Development:

Sustainable
Livelihoods Supported
4 Million Over 20,00,000
Farmers Empowered Milch Animals Covered

Women Empowerment: Primary Education: Skilling and Vocational Training:

Over 86,000 Over 8,64,000 Over 1,00,000

Poor Women Benefitted Children Benefitted Youth Enrolled

Environmental

Watershed Development: Afforestation: Biodiversity Conservation:

Over 13,30,000 Over 9,50,000 Over 1,30,000

Acres Covered Acres Greened Acres Covered

Climate Smart Agriculture: Collecting and Well Being Out of Waste

4,50,000 Sustainably Managing Covers Over

Farmers Benefitted 54,000 tonnes 1.8 Crore

of Plastic Waste Citizens

38 Around 42%
Platinum-rated of ITC's Energy from
Green Buildings Renewable Sources
 REPORT AND ACCOUNTS 2022

Recognition for ITC’s Sustainability Initiatives

First Prize in CSR Excellence Award Achieved goal of

‘Best Industry for CSR in the ‘Large’ category becoming plastic neutral,
Activities’ category by the by the Institute of collecting and sustainably
Ministry of Jal Shakti, Company Secretaries managing 54000+ MT
Government of India of India (ICSI) of plastic waste

Sustained ‘AA’ rating by Achieved ‘A-’ Leadership ITC included in the

MSCI for the 4th score under CDP ratings - Dow Jones Sustainability
consecutive year ahead of Asia & Global Emerging Markets Index
average in Climate Change
(B-) & Water Security (B)
REPORT AND ACCOUNTS 2022

ITC’s Winning Businesses

FMCG Businesses Agri Business Paperboards

o India’s Leading FMCG o Powering NextGen & Packaging
marketer Agriculture through value
addition, digital adoption and
Businesses
o 25+ Mother Brands in Foods,
Personal Care Products, climate smart agriculture o One of India's largest,
Education & Stationery greenest and most
o Extensive engagement with
Products, Agarbattis & technologically advanced
Matches farmers for over 100 years
o Clear leader in the
o Annual consumer spend of o ITCMAARS*- bringing the
Value-added Paperboards
over ₹24,000 crores power of digital technologies
segment
to farmers
o Exporting to over 60 o Leading provider of superior
countries o ITC e-Choupal has
value-added packaging
o Products reach over 200 empowered 4 million farmers
solutions
million households in India o Sourcing over 4 mn tonnes of
o Anchoring local forestry value
o Products available in nearly agri produce from 22 states chains, empowering farmers,
7 million retail outlets o Supporting over 20 value enhancing green cover
in India
chain clusters o First in India to obtain Forest
o ITC e-Store: 45+ categories,
o Largest procurer of wheat Stewardship Council-Forest
over 700 products
after the Government’s FCI Management (FSC-FM)
o Extensive digital adoption
across manufacturing, o One of India's largest o Extensive use of Industry
distribution, consumer exporters of agri 4.0 technologies
insighting commodities o Pioneer in sustainable
packaging

*Metamarket for Advanced Agriculture & Rural Services

 REPORT AND ACCOUNTS 2022

ITC Hotels ITC Infotech

o Trailblazer in 'Responsible Luxury' & o Wholly owned subsidiary of ITC Limited
Sustainability o Leading global technology services and solutions
o One of India's pre-eminent hospitality chains provider with presence in 29 countries
o 113 hotel properties in over 70 locations o Partner of choice for customers in their Digital
Transformation and Software as a Service (SaaS)
o Iconic Cuisine Brands
adoption journey
o All luxury collection hotels are LEED®
o One of industry’s largest organizations of Product
Platinum certified
Lifecycle Management services expertise
o ITC Hotels and Welcomhotels have achieved o Focus on sharpening domain-led offerings in
the global 2030 Carbon emissions targets well Digital Manufacturing Solutions, Digital
ahead of time Workplace Solutions, Core Hospitality
o ITC Windsor, ITC Grand Chola and ITC Gardenia - Automation and Customer Experience
first three LEED® Zero Carbon Hotels in the world o Business-friendly solutions leveraging strategic
pillars of Customer Centricity, Employee
Centricity and Operational Excellence

Brand Leadership

No. 1 No. 1 No. 1

in Bridges segment of Snack Foods
in Branded Atta in the Cream Biscuits segment (No. 2 overall in Snacks & Potato Chips)

No. 1
in Dhoop segment
No. 1
in Notebooks
No. 2
in Noodles
REPORT AND ACCOUNTS 2022

Creating a Future-ready ITC:

Consumer Centricity, Agility
and Innovation
To power the next horizon of growth, ITC has articulated investments in Digital and Sustainability. ITC will also be
an extensive strategy reset titled ITC Next, putting in place exploring additional opportunities for growth through
structural drivers that will ensure that the enterprise value accretive M&As as well as enhanced investments
remains future-ready, consumer-centric and agile. to drive exports.
The key tenets of ‘ITC Next’ include leveraging ITC’s ITC Next focuses on exploring opportunities to craft
institutional synergies and power brands, a future-ready disruptive business models anchored at the intersection
portfolio to create strong growth platforms, purposeful of Digital and Sustainability, the two megatrends in the
and agile science-based innovation, accelerated ‘new normal’, leveraging its institutional strengths.

Strategy Pillars - ITC Next

Multiple Growth Drivers Innovation and R&D Strategic Cost

 12 Businesses of the Future  Agile & purposeful Management
innovation  Import Substitution

Sustainability 2.0 Digital World-class Talent

 Bolder ambition for  Creating a ‘FutureTech’  ‘Proneural’ culture, akin
creating Environmental enterprise to a Startup
Capital & Inclusive Growth
 REPORT AND ACCOUNTS 2022

ITC’s Institutional Strengths

A synergy of ITC's institutional strengths provides unique manufacturing facilities, cutting-edge packaging knowhow,
sources of competitive advantage to the Company's deep & wide multi-channel distribution network and robust
businesses. ITC's extensive capabilities in superior R&D platforms nurtured by ITC’s Life Sciences and
consumer insighting, agile innovation, strong sourcing Technology Centre (LSTC) and a pool of world-class talent
capabilities through ITC’s Agri Business, cuisine enable the Company to rapidly scale up its businesses and
knowledge resident in Hotels Business, state-of-the-art launch innovative first-to-market products.

Synergising Institutional Strengths

Powering FMCG Competitiveness

Brand
Building
Capability
R&D
Manufacturing
Capablities
Excellence

ITC
ITC
Deep Multi-channel
Consumer Distribution
Insights Network

Cuisine Sourcing
Expertise Expertise
Packaging
Knowhow
REPORT AND ACCOUNTS 2022

ITC Life Sciences & Technology Centre – Delivering Cutting-edge R&D

A core part of the ‘ITC Next’ strategy is building innovative capacity to strengthen competitiveness. ITC’s Life Sciences
& Technology Centre (LSTC) is at the centre of driving science-led innovation to support and build ITC’s portfolio of
world-class products and brands. The centre has made strategic investments in key science based platforms in areas
that the Company believes are important for the future, based on certain emerging opportunities.

Aided Launch of Over

110+
Innovative Products
350
Highly Qualified
900
Patent
in the Year Scientists Applications Filed

State-of-the-art Ranked

Analytics Top
Labs Innovator
in India*

*amongst Indian Pharma & Health Care Pvt. Cos. (Sagacious IP Report Aug’21)

Integrated Consumer Goods Manufacturing

and Logistics Facilities
ITC’s distributed manufacturing footprint, anchored on its state-of-the-art Integrated Consumer Goods Manufacturing
and Logistics (ICML) facilities located strategically proximal to large demand centres, provides structural advantages
to ITC’s Businesses.

Shorter
Distance-to-market, Quality, Hygiene Responsive Co-hosted Automated 10 ICMLs
Reduced Emissions & Freshness Supply Chain Warehouses Operational
 REPORT AND ACCOUNTS 2022

ITC Next - Building New Vectors of Growth

FMCG Businesses
ITC’s FMCG Businesses are well poised for rapid scale up. The product portfolio has been strengthened in alignment
with new opportunities and enterprise strengths with sharper focus on fortifying the core, addressing adjacencies
through world-class mother brands and building categories of the future to power growth.

ITC’s World-class Indian Brands

REPORT AND ACCOUNTS 2022

Hygiene++, Protection & Care

Savlon - Antiseptic Liquid, Handwash & Hand Sanitizer, Soaps, Surface & Laundry Portfolio, Mask

Naturals

Nimyle - Floor Cleaner - Power of Neem

 REPORT AND ACCOUNTS 2022

Health & Immunity

Aashirvaad Nature’s Super Foods - for Organic and Rising Gluten Intolerance

Aashirvaad Iodized Salt - Proactive B Natural | Sunfeast Nutrilite B Natural - Immunity Focus
Better Heart Health Health Range

Aashirvaad Svasti YiPPee! Power Up Noodles -

Select Milk and Goodness of Whole Wheat Atta
Easy Digest Milk (Lactose Free)

Sunfeast Farmlite & Veda Marie - Jelimals Immunoz -

Traditional Knowledge of Health With Vitamin C + Zinc
REPORT AND ACCOUNTS 2022

Interactive Education Devotion

Classmate Interaktiv - Origami Books Mangaldeep - Agarbatti

Convenience

ITC Master Chef - Frozen Foods ITC Master Chef - Pastes & Gravies

Aashirvaad - Instant Meals

Engage On - Nimyle - Engage L’amante -

Chhota Pocket I Convenient Packs Floor Cleaner Sachet Click & Brush Eau De Parfum
 REPORT AND ACCOUNTS 2022

Indulgence

Sunfeast Dark Fantasy - Sunfeast Bounce -

A unique decadent filled cookie experience A fun-filled flavourful experience

Candyman Fantastik - Sunbean - Gourmet coffee

Bingo! Snacks - More chocolate in every
Extravaganza of flavour and texture experience

Fabelle - Luxury chocolates

REPORT AND ACCOUNTS 2022

Acquisitions
ITC will continue to evaluate value accretive and synergistic inorganic opportunities as an additional pillar of growth.
Acquisitions are guided by considerations such as strategic fit, valuation, financial viability and ease of integration.

Investment in D2C Startups

To scale up presence in the fast-growing D2C channel, ITC has acquired a minority stake in ‘Mother Sparsh’,
a premium ayurvedic and natural personal care startup, as well as in ‘Mylo’, a full stack community ecosystem
which addresses the parenting needs of consumers.
 REPORT AND ACCOUNTS 2022

ITC Next - Building New Vectors of Growth

Hotels Business
The 'Asset-Right' strategy of ITC Hotels is an important vector of the ITC Next strategy. It focuses on sweating existing
assets, increasing footprint of management contracts and creating additional revenue streams to engender the next
horizon of growth and value creation and provide best-in-class consumer experience.

Vibrant Existing Brands

ITC Grand Chola, Chennai Welcomhotel Amritsar

WelcomHeritage Jukaso Ganges, Varanasi Fortune Select Exotica, Navi Mumbai

New Brands Launched

Mementos Storii

Collection of unique luxury hotels, across varied Collection of intimate sized handpicked properties
destinations ranging from modern marvels, hidden in the premium segment
retreats to historic treasures
REPORT AND ACCOUNTS 2022

Expanding the Welcomhotel Footprint

Welcomhotel Bhubaneswar Welcomhotel Katra

Welcomhotel Chail Welcomhotel Guntur

Innovations at ITC Hotels

ITC’s Hotels Business continues to offer a host of innovative, curated propositions across accommodation, dining and
banqueting to delight customers.

Special Packages Revamped Packages ‘Gourmet Couch’ Signature ‘WeAssure’ Programme

for Staycations for MICE & Weddings Food Delivery Services ‘Sleeep’ Boutiques for Health & Hygiene
 REPORT AND ACCOUNTS 2022

ITC Next - Building New Vectors of Growth

Agri Business
ITC’s Agri Business is ushering in NextGen Agriculture by enhancing its Value-added Agri Products (VAAP) portfolio,
creating a full-stack Agri-tech Platform for Indian farmers and promoting Climate Smart Agriculture.
The Business is scaling up its VAAP portfolio comprising Spices, Coffee, Frozen Marine Products and Processed Fruits
amongst others for domestic and exports markets.

Moving Up the Value Chain - Value-added Agri Products

Spices, a value-added agri product ITC's Medicinal and Aromatic Plant project field

ITC’s Agri Business also provides strategic support to ITC’s Foods Business, enabling the Company to offer differentiated
food products to discerning consumers.

Climate Smart Agriculture ITCMAARS

ITC’s Climate Smart Agriculture programme aims to Bringing the benefits of the Digital Revolution to farmers,
de-risk farmers from erratic weather events through the ITC is launching a Super App called the ITCMAARS
promotion of Climate Smart Agriculture practices (Metamarket for Advanced Agriculture & Rural Services)
focusing on high yielding & climate resilient varieties, which will provide the full array of new age solutions such
adoption of appropriate mechanisation, reduction in as AI-powered personalised advisories, e-marketplaces
stubble burning, and provision of institutional services. and digital services. It will also harness the innovations by
Water use efficient practices are promoted as part of successful startups in the Agri-tech space to
demand management interventions. The programme plug-and-scale their solutions across India.
covers over 15 lakh acres, benefitting 4.5 lakh farmers. In
a pilot project, GHG emission was reduced upto 66% and
net incomes of farmers rose upto 93% in select crops.
REPORT AND ACCOUNTS 2022

ITC Next - Building New Vectors of Growth

Paperboards and Packaging Businesses
ITC’s Paperboards and Packaging Businesses are moving to the ITC Next horizon by scaling up the Value-added
Products portfolio, enabling pulp import substitution for superior products, and pioneering innovative fibre-based
solutions, leveraging its existing proprietary R&D platforms and global collaborations. The Paperboards and Specialty
Papers Business offers next generation sustainable packaging solutions, including recyclable paperboards and
papers with barrier properties, under the ‘Filo’ and ‘Omega’ series to substitute single use plastics.

Value-added Growth | Innovation & Import Substitution

Scaling Up Value-added Product Portfolio Pulp Import Substitution for Specialty Grades

Bhadrachalam Mill

Specialty Paper - Décor Papers

Tribeni Plant BCTMP^ Mill – Bhadrachalam

(First-of-its-kind in India)
^Bleached Chemical Thermo Mechanical Pulp
 REPORT AND ACCOUNTS 2022

Digital at ITC: Building

a FutureTech Enterprise
In line with its aspiration to be a ‘FutureTech’ enterprise, ITC continues to deploy cutting-edge digital technologies
across its systems, processes and operations to strengthen business competitiveness.

ITC’s Smart Ecosystem

Digital@ITC: Building a Dynamic ‘FutureTech’ Enterprise

Smart Consumer Smart Experience Smart Trade Smart Supply

• Real-time New-age • Digital Campaigns • Digitised Demand Chain & Mfg.
Insight • Engagement with Capture • Integrated &
• Bespoke Brand Social Influencers • AI Assisted Selling, Synchronised Planning
Campaigns & • Purpose Driven Supervision, Dynamic • NextGen Agile
Engagement Brand Campaigns Routing Supply Chain
• Hyper-personalisation • D2C Web Platforms • Data Driven Last • Digital Factory
Mile Delivery • Smart Sourcing
• Omnichannel
Fulfilment

State-of-the-art Digital Technologies, Infrastructure and Security

Smart Consumer
ITC leverages digital technologies and platforms to deliver delightful and personalised brand experiences. ITC’s
‘Sixth Sense’ Marketing Command Centre and Consumer Data Hub, an AI powered hyper-personalised platform, gains
insights on market trends and consumer behaviour and synthesises the same to craft hyper-personalised brand
communication and product development.

‘Sixth Sense’, Marketing Command Centre - Moment Marketing -

o AI-powered hyper-personalised Contextual Communication
platform & Consumer Promotion
o Strong partner ecosystem for o 3000+ Content Assets
content & data created

• Consumer Data Hub - Harvesting Insights & New Product Development

• ‘ITC e-store’
o Direct-to-consumer channel operational in 15 cities
o 45+ categories, over 700 products
REPORT AND ACCOUNTS 2022

Smart Engagement
ITC seeks to embrace digitalisation to explore innovative ways to interact with consumers.

Driving Digital Engagement

Driving Value through Digitalisation

Brand/Guest Experience Classmateshop.com Mangaldeep App

Enhancing devotional journey
Enhancing of consumers

consumer Garnered
engagement over 1 million
downloads

One stop shop for all guest needs

ITC’s Digi-culture

Building a ‘digital first’ culture - DigiNext, Young Digital Leaders’ Forum

Smart Trade
ITC’s Trade Marketing and Distribution function leverages cutting-edge digital technologies to drive productivity,
improve market servicing, draw actionable insights for sharp-focused interventions, augment sales force capability and
deepen connect with retailers.

Next Generation
Agile FMCG
Supply Chain

eB2B: UNNATI VIRU: Virtual Salesman VISTAAR: Rural App Project Zen
 REPORT AND ACCOUNTS 2022

Smart Supply Chain and Manufacturing

Pioneering adoption of Industry 4.0 in the Indian Paper & Paperboard industry, ITC has embedded digital technologies
encompassing Industrial IoT for Smart Operations, Integrated Data Infra/Platform, AI/ML Algorithms in the
manufacturing process, AI/ML based Image Analytics and IoT Based Crop Monitoring & Advisory, in the operations of its
Paperboards and Specialty Papers Business.

Adoption of Cutting-edge Industry 4.0 Technologies

Industrial IoT IoT Based Crop

AI/ML Algos in
for Smart Manufacturing Monitoring
Operations & Advisory

Integrated Data AI/ML based

Infra Platform Image Analytics

Smart Agri Sourcing

Project Astra
An AI/ML and advanced analytics-based digital platform for ITC's Agri Business,
Project Astra supports smart & optimal buying decisions, leading to efficient price
discovery and enhanced operational efficiency, while facilitating seamless execution.
REPORT AND ACCOUNTS 2022

Digitally Empowering Farmers

ITCMAARS, a robust 'phygital' ecosystem, brings the power of cutting-edge digital technologies to India's small
farmers through seamless customised solutions. The AI-powered technology platform provides personalised,
hyperlocal solutions for the farmers, while the physical layer enables last-leg delivery of products and services.

Physical Digital

Sanchalaks/FPOs Tech-based Crop Advisory

Provide physical staging point for Contextual & personalised
inputs and outputs supply chains recommendations, output-linked
in villages. Leverage ITC’s trust input advisory to enhance farmer RoI
and presence in village
communities
Field Team E-nabled Rural Services
Provides assistance to farmers Avail of credit for input purchases,
through trainings and facility to rent mechanisation &
information on various aspects of drone services
crop management
Metamarket for
Demonstration Plots
Advanced Agriculture E-Platform for Agri Inputs
& Rural Services
Package of Good Agri Practices On-demand service marketplace
for high quality inputs at competitive
prices at villages, coupled with
advisory & credit linkages

Engagement Centre E-Marketplace for Outputs

Discussing problems An online marketplace for
with agri experts buyer-seller interaction for
agri-commodity procurement
 REPORT AND ACCOUNTS 2022

Sustainability 2.0 –
Promoting Responsible Capitalism
ITC has been a global exemplar in sustainability, achieving many a milestone over the years in its efforts to serve the
planet and its people. ITC’s focus has been two-fold – supporting livelihood generation particularly among rural
communities and nourishing and restoring the environment.
Taking a step forward, ITC has now articulated a bold Sustainability 2.0 agenda that raises the bar with ambitious
targets to combat the urgent challenges of climate change and livelihood generation, a critical need post the
pandemic. The aspiration is to scale up our multi-dimensional interventions that can enable the transition to a net zero
economy, ensure water security for all, create an effective circular economy for post-consumer packaging waste,
protect and restore biodiversity and ecosystem services through the adoption of nature-based solutions.

Targets 2030

Strategic Interventions to Renewable Specific GHG

Combat Climate Change Energy Emissions

Building Green
50% 50%
De-carbonisation
Infrastructure

Reusable, Recyclable or Compostable/

Biodegradable Plastic Packaging

Nature Based
Circularity
Solutions
*
100%
*By 2028

Water Security for all Biodiversity & Agriculture

Adaptation and Inclusive 5X of ITC’s Net Over 1 million acres

Resilience Value Chains Consumption Biodiversity Conservation
AWS Certification for
High Water Stressed 3 million acres
Sites Climate Smart Village

Supporting Sustainable Livelihoods: From 6 million to 10 million

REPORT AND ACCOUNTS 2022

ITC is crafting NextGen business models to integrate sustainability as a key value proposition for its customers.
This includes ITCMAARS in the agri-ecosystem and sustainable packaging solutions to substitute single use plastic.

Scaling up Sustainable Packaging Solutions

ITC LSTC | External Collaborations

ITC Product Replaces Environmental Impact

100% Recyclable
Paperboards
designed for hot
& cold beverages Disposable Plastic Cups
(Polypropylene
/HIPS/Styrofoam)

Compostable
Paperboards
designed for hot
& cold beverages
LDPE Coated Paper Cups

ELIMINATES
SINGLE
USE PLASTIC
Ice cream Cartons made
from LDPE coated boards

100% Recyclable
Paperboards
designed for frozen
food & takeaway
Plastic Sweet Boxes
(HIPS/PE)

CYBER
ANTIFUNGAL
Anti-fungal
paperboards for
soap packaging PET/PE Flow LDPE Coated
Wrap for Soaps Cartons

SIGNIFICANTLY
LDPE coated
Paperboards REDUCES PLASTIC
designed for
replacing single use Plastic Bowls for Ready-to-eat WASTE GENERATION
(Polypropylene/Polystyrene)
plastic bowls
 REPORT AND ACCOUNTS 2022

Moving towards Demand-responsive Value

Chains to Empower Farmers
Recognising that FPOs have tremendous potential to serve as major enablers in augmenting farm livelihoods by
facilitating a crucial link between markets and farmers, ITC aims to support 4,000 FPOs.

Key Interventions Linking Farmers to Markets

ITC’s world-class Indian brands

Support over 20 crop To support 4,000 FPOs, ITC’s ICMLs - Investing in state-of-the-art
value chain clusters benefitting 10 million farmers food processing facilities

ITC’s world-class brands anchor sustainable agri value chains.

Wheat Potato Fruit Pulp Spices Milk

Securing identity Security of supply Developing supply Sourcing Food Safe Sourcing of high
preserved, Yield improvement chain & sourcing products, quality milk through
superior wheat superior quality developing new farmer network,
with logistics cost Proximal to Indian fruit pulp at products deployment of milk
optimisation manufacturing competitive price chillers

Straddling Multiple Agri Value Chains

REPORT AND ACCOUNTS 2022

Building Climate Resilience

Climate Smart Agriculture

Scale:
• Over 15 lakh acres covered
• Covered over 4,50,000 farmers
• To cover 3 million acres by 2030 under
the Climate Smart Village programme

Techniques:
Zero Tillage, Direct Seeding, Broad Bed Furrow,
Mulching & Drip

Outcomes:
Pilot at scale in Climate Smart Villages has
demonstrated
• GHG emission reduced upto 66%
• Increase in Net Incomes upto 93%

Over 20 years of
ITC e-Choupal
Empowering 4 million
farmers

Partnership with NITI Aayog

across 27 Aspirational
Districts
Over 5.9 lakh farmers from
approx. 19,000 villages
trained through WhatsApp
Groups in 2021-22

Baareh Mahine Hariyali

Doubling Farmers’ Income
Pilot at scale: Over 2,00,000
Farmers Covered
 REPORT AND ACCOUNTS 2022

ITC Hotels –Trailblazer in Responsible Luxury

First 3 hotels in the world to achieve LEED Zero Carbon Certification*

®

ITC Windsor, Bengaluru World’s 1st Hotel with LEED® Zero Carbon Certification

ITC Grand Chola, Chennai World’s Largest Hotel with LEED® Zero Carbon Certification

ITC Gardenia, Bengaluru World’s 3rd Hotel with LEED® Zero Carbon Certification

*Awarded by U.S.Green Building Council, LEED® (Leadership in Energy and Environmental Design) Zero Carbon recognises buildings
operating with Net Zero Carbon Emissions.
REPORT AND ACCOUNTS 2022

Transforming Lives and Landscapes

ITC’s sustainability initiatives over the years have focused on addressing the twin objectives of supporting sustainable
livelihoods and combating climate change.

Social and Farm Forestry Initiative Water Stewardship Mission

• Over 9.5 lakh acres greened • Watershed development in over 1.3 million
• Carbon sequestration, top soil retention, acres in 16 States
water recharge • Over 25,000 water harvesting structures built;
• Supporting about 173 million net water storage of over 45 million CuM
person-days of employment for rural • Benefitted nearly 3.9 lakh farmers
households, including poor tribal and • 7.6 million person-days of employment supported
marginal farmers • Demand side management interventions cover
• Agro-forestry covers over 1.78 lakh acres about 7.3 lakh acres in 11 States

about 7.3 lakh

Biodiversity Conservation Medicinal and Aromatic Plants Project

• Cumulatively covered over 1.3 lakh acres in • 100-acre demo farm for Medicinal & Aromatic
more than 29 districts across 10 States Plants in Madhya Pradesh
• Crop development through cluster formation
approach
• Farmers in 950 villages educated on medicinal
plant cultivation, covering over 7,000 acres
 REPORT AND ACCOUNTS 2022

Waste Management Health & Sanitation

• Well Being Out of Waste (WOW), covers over 1.8 Cr • Over 39,000 Individual Household Toilets
citizens; livelihoods for over 17,000 waste collectors constructed in 12 States
• Solid Waste Management Programme operational • Over 4.88 lakh beneficiaries covered under
in 17 districts of 10 States covering 14.6 lakh Mother and Child Health Initiative
households • 1.1 lakh women and adolescent girls
• A circular economy pilot programme for covered under Swasthya Choupal Initiative
multi-layered plastic collection and recycling
in Pune
• Achieved almost total recycling of waste generated
in operations
• Green Temple Initiative processing waste from
temples to provide biogas for kitchen and compost
for gardens expanded to 500 places of worship

Women’s Empowerment
• Income diversification
• Over 86,000 women empowered economically
• Over 13 lakh women members of 1.3 lakh SHGs
covered under Financial Literacy programme

Livestock Development
• Income diversification
• Over 3.69 lakh farmers benefitted

Primary Education Skilling & Vocational Training

• Over 8.6 lakh rural children covered • Over 1 lakh youth enrolled
REPORT AND ACCOUNTS 2022

ITC’s World-class Talent Pool

ITC’s diverse talent pool of empowered professional entrepreneurs, ‘proneurs’, work in an environment akin to a
startup and get the opportunity to create categories, products and brands from the ground up, with the support of
ITC’s unique enterprise strengths.

ITC’s ICMLs – Exemplars of Diversity & Inclusion in the Company & Industry
ITC’s food manufacturing units have been engaging an increasing number of women on the shopfloor. The factories
at Pudukkottai and Medak have a women representation of 79% and 100% of the on-roll labour force, and are
beacons of diversity.
Board of Directors
Chairman & Managing Director Non-Executive Directors
Sanjiv Puri Shilabhadra Banerjee Anand Nayak
Hemant Bhargava Sunil Panray
Executive Directors Navneet Doda Nirupama Rao
Nakul Anand Arun Duggal Ajit Kumar Seth
Sumant Bhargavan Mukesh Gupta Meera Shankar
Rajiv Tandon Shyamal Mukherjee David Robert Simpson

Board Committees
Audit Committee CSR and Sustainability Nomination &
A Duggal Chairman Committee Compensation Committee
S Banerjee Member S Puri Chairman S Banerjee Chairman
H Bhargava Member N Doda Member A Nayak Member
S Mukherjee Member M Gupta Member S Puri Member
R Tandon Invitee S Panray Member M Shankar Member
S Dutta Invitee N Rao Member R K Singhi Secretary
M Ganesan Invitee A K Seth Member
(Head of Internal Audit) M Shankar Member
Representative of Invitee D R Simpson Member
the Statutory Auditors
R K Singhi Secretary
R K Singhi Secretary
Securityholders Independent Directors
Relationship Committee Committee
A Nayak Chairman S Banerjee Member
N Doda Member H Bhargava Member
B Sumant Member A Duggal Member
R Tandon Member S Mukherjee Member
R K Singhi Secretary A Nayak Member
N Rao Member
A K Seth Member
M Shankar Member

Corporate Management Chief Financial Officer

Supratim Dutta
Committee Executive Vice President & Company Secretary
S Puri Chairman Rajendra Kumar Singhi
N Anand Member General Counsel
Angamuthu Shanmuga Sundaram
B Sumant Member
Investor Service Centre
R Tandon Member 37 Jawaharlal Nehru Road, Kolkata 700 071, India
S Dutta Member Telephone nos. : 1800-345-8152 (toll free)
S Kaul Member 033 2288 6426 / 0034
Facsimile no. : 033 2288 2358
H Malik Member
e-mail : [email protected]
A K Rajput Member Statutory Auditors
S Rangrass Member S R B C & CO LLP
S K Singh Member Chartered Accountants, Mumbai
S Sivakumar Member Registered Office
Virginia House
R K Singhi Secretary
37 Jawaharlal Nehru Road, Kolkata 700 071, India
Telephone no. : 033 2288 9371
CIN : L16005WB1910PLC001985
ITC Corporate Website : www.itcportal.com

ITC Limited REPORT AND ACCOUNTS 2022 1

Your Directors
S. Puri resources to enhance competitiveness of existing
businesses and also identify tech-enabled growth
Sanjiv Puri (59), DIN: 00280529, is the Chairman & opportunities. Lending new wings to ITC’s credo of
Managing Director of ITC Limited. ‘Nation First: Sab Saath Badhein’, he has articulated
Puri was appointed as a Wholetime Director on the an ambitious Sustainability 2.0 vision that will enlarge
Board of ITC with effect from December 6, 2015, ITC’s contributions to a net-zero economy and
Chief Executive Officer in February 2017 and meaningfully support national priorities.
re-designated as the Managing Director in Puri has served as the Chairman of the Expert Group
May 2018. He was appointed as the Chairman constituted by the Fifteenth Finance Commission of the
effective May 13, 2019. An alumnus of the Government of India to promote agri-exports, and was
Indian Institute of Technology, Kanpur, and a Member of the technology discussion group
Wharton School of Business, USA, he has recently ‘Farm to Table - driving India’s agriculture sector
been conferred an Honorary Doctorate by the digitally’ constituted by the NITI Aayog.
XIM University, Bhubaneshwar. Puri serves on the National Executive Committees
Puri joined ITC in January 1986. During his career of of CII and FICCI as well as on the Steering Committee of
over three decades at ITC and its subsidiaries, he has FICCI. He is the Chairman of the Advisory Council
held several business leadership positions and of the CII-ITC Centre of Excellence for Sustainable
also handled a wide range of responsibilities in Development. He is also the Chairman of the
manufacturing, operations and information & CII National Council on Agriculture and Member
digital technology. Puri served as the Chief Operating of the CII Economic Affairs Council as well as the
CII Policy Council. He is also a Director on the Board of
Officer of ITC between July 2016 and January 2017,
US-India Strategic Partnership Forum, Co-Chair of the
and prior to that as President - FMCG Businesses
‘Business Commission to Tackle Inequality’ set up by the
since December 2014. Earlier, he was the
World Business Council for Sustainable Development,
Divisional Chief Executive of the Tobacco Division
and a Member of the BRICS Business Council.
since 2009, with additional responsibility for the
Company’s Trade Marketing & Distribution Vertical. Puri was conferred the ‘Distinguished Alumnus Award
He led ITC Infotech India Limited, a wholly owned of the year 2018’ by the Indian Institute of Technology,
subsidiary of ITC, as its Managing Director from Kanpur. During the year, he was honoured with the
May 2006 to August 2009. Puri served between ‘IMPACT Person of the Year, 2020’ Award by
October 2001 and April 2006 as the Managing Director exchange4media, a leading online news platform.
of Surya Nepal Private Limited, a joint venture Other Directorships
subsidiary company of ITC in Nepal. Name of the company Position
Spearheading the ‘ITC Next’ vision, Puri has driven an ITC Infotech India Limited Chairman &
extensive strategy reset to define new vectors of Non-Executive Director
growth for each business with greater focus on
ITC Infotech Limited, UK * Chairman &
consumer-centricity, agility and innovation to build an
Non-Executive Director
even more competitive, future-ready and inclusive
enterprise. Puri’s emphasis on purposeful and ITC Infotech (USA), Inc. * Chairman &
cutting-edge innovation has led to the creation of sharp Non-Executive Director
focused R&D platforms in areas aligned to market Surya Nepal Private Limited * Chairman &
opportunities, that has led to the launch of several Non-Executive Director
first-to-market products addressing dynamic and evolving Indian School of Business Member, Governing
consumer preferences. Given his deep conviction that Board and Executive
mega trends like Digital and Sustainability will reshape Board
the future, Puri has passionately rallied the organisation
to develop capabilities, channelise investment and Committee Membership of other companies: Nil

2 ITC Limited REPORT AND ACCOUNTS 2022

 Your Directors

N. Anand Anand was recognised as the ‘Corporate Hotelier

of the World 2019’ by Hotels Magazine USA.
Nakul Anand (65), DIN: 00022279, was appointed as
During the year, he was conferred with the
a Wholetime Director on the Board of ITC effective
January 3, 2011. He oversees the Hospitality, Lifetime Achievement Award at the Hotel Investment

Travel and Tourism Businesses of ITC. Conference - South Asia (HICSA) 2022 for his
long, illustrious and invaluable contribution to the
An Economics Honours Graduate from Delhi University
with an AMP Degree from the Bond University, Australia, hospitality sector.

Anand joined erstwhile ITC Hotels Limited as a Other Directorships

Management Trainee in 1978. He has also served as the
Name of the company Position
Managing Director of that company from 2003 to 2005.
International Travel Chairman &
In a career that spans more than four decades, House Limited # Non-Executive Director
Anand has been acknowledged for his vision,
Gujarat Hotels Limited # Chairman &
commitment and for his role as a thought leader to the
Non-Executive Director
tourism and hospitality industry. Building on ITC’s ethos
Landbase India Limited Chairman &
as an exemplar in sustainability, he has passionately
Non-Executive Director
advocated the imperative for a sustainable business
model of hoteliering. Leveraging the significant Fortune Park Hotels Limited Chairman &
learnings of sustainable excellence within ITC, Non-Executive Director

he has led the team at ITC Hotels to pioneer the WelcomHotels Lanka Chairman &
concept of ‘Responsible Luxury’ in the hospitality (Private) Limited * Non-Executive Director
industry. This commitment has won global recognition Srinivasa Resorts Limited Vice-Chairman &
for ITC Hotels as the largest chain of hotels in the Non-Executive Director
world having the maximum number of LEED® Platinum
Bay Islands Hotels Limited Non-Executive Director
certified properties as per the stringent norms of the
Maharaja Heritage Resorts Non-Executive Director
U.S. Green Building Council.
Limited
Anand has been a past President of the Hotel
Association of India and past Chairman of the Committee Membership of other companies
CII National Tourism Committee. He was also a Name of the company Committee Position
Member of the India-Sri Lanka CEOs Forum, and
International Travel Nominations & Member
Council Member & Executive Committee Member
House Limited Remuneration
of the National Culture Fund, Ministry of Culture, Committee
Government of India. He is presently a Member of the
Gujarat Hotels Limited Nominations and Member
National Tourism Advisory Council constituted by the
Remuneration
Ministry of Tourism, Government of India, Chairman Committee
of the Federation of Associations in Indian Tourism &
Landbase India Limited Audit Committee Member
Hospitality, and a Member of the Executive Committee
of the Hotel Association of India. He is also a Member Fortune Park Hotels Corporate Social Chairman
of the Senior Advisory Council of the Sustainability Limited Responsibility
Committee
Hospitality Alliance.

ITC Limited REPORT AND ACCOUNTS 2022 3

Your Directors

B. Sumant R. Tandon

Sumant Bhargavan (58), DIN: 01732482, was appointed Rajiv Tandon (68), DIN: 00042227, was appointed
as a Wholetime Director on the Board of ITC effective as a Wholetime Director on the Board of ITC effective
November 16, 2018. He oversees the Paperboards, January 22, 2016. He is responsible for Finance,
Paper and Packaging as well as the Personal Care
Accounting, Internal Audit & IT Functions and also
and Education & Stationery Products Businesses of
for the Investment Subsidiaries of the Company.
the Company, and also the Trade Marketing &
He was also the Chief Financial Officer of the Company
Distribution (‘TM&D’) Vertical. Sumant, an alumnus
for a period of over 11 years till September 4, 2020.
of the National Institute of Technology, Durgapur,
A Fellow Member of the Institute of Chartered
joined ITC in January 1986, and has handled a wide
Accountants of India with over four decades of
range of responsibilities across several businesses.
experience, Tandon has held various positions in
Prior to his appointment as a Director on the
ITC including Executive Vice President - Finance & MIS
Board of ITC, he was President - FMCG Businesses
of the Tobacco Division, Executive Vice President -
since April 2016. Earlier, he was the
Corporate Finance, Finance Advisor and Member of the
Divisional Chief Executive of the Tobacco Division.
Management Committee of Agri Business and Tobacco
He also held additional responsibility of the TM&D Vertical
as its Chief Executive for a period of one year from Divisions. He joined ITC in January 1987.

October 2016. He spent his first 19 years with ITC Tandon was named the ‘Best CFO in India’ by Business
in Manufacturing operations of the Tobacco Division
Today in 2013. He has held several important positions
and has worked in four production units as well as
in various industry bodies including Member - Managing
at the Head Office. In October 2004, he moved to the
Committee, The Bengal Chamber of Commerce &
Foods Business and set up the Snack Food category
Industry, Chairman of the Expert Committee on
under the brand name ‘Bingo!’. He has led
Banking and Finance, Indian Chamber of Commerce,
ITC Infotech India Limited, a wholly owned subsidiary
of ITC, as its Managing Director from September 2009 Member, Taxation and Company Law Committee, CII,

to October 2014. He has also been on the and Member of the Capital Markets Committee of

Boards of ITC Infotech’s wholly owned subsidiaries FICCI. He is currently a Member of the CII National
in the UK and the USA. Committee for CFOs and CII National Committee on
Financial Reporting.
Sumant has also been a Director on the Board of
The Tobacco Institute of India. Presently, he serves Other Directorships
as a Member of the CII Eastern Region Council.
Name of the company Position
Other Directorships Russell Credit Limited Chairman &
Name of the company Position Non-Executive Director
Surya Nepal Private Limited * Non-Executive Director Greenacre Holdings Limited Chairman &
The Tollygunge Club Limited Member, Non-Executive Director
General Committee Gold Flake Corporation Limited Chairman &
Non-Executive Director
Committee Membership of other companies: Nil

4 ITC Limited REPORT AND ACCOUNTS 2022

 Your Directors

Other Directorships (Contd.) the Indian Administrative Service in 1971. In a career

Name of the company Position spanning over 37 years, he has held several eminent

ITC Investments & Holdings Chairman & positions in the Government of India including that of
Limited Non-Executive Director Joint Secretary in the Ministry of Petroleum and
Wimco Limited Chairman & Natural Gas and the then Ministry of Urban Development.
Non-Executive Director
Banerjee was Director General (Acquisition) in the
Landbase India Limited Non-Executive Director
Ministry of Defence and retired as Secretary,
ITC Infotech India Limited Non-Executive Director
Ministry of Tourism in October 2008. He has been
ITC Infotech Limited, UK * Non-Executive Director a Visiting Fellow at the Queen Elizabeth House,
ITC Infotech (USA), Inc. * Non-Executive Director University of Oxford, UK. Banerjee also served on

Committee Membership of other companies the Board of the Company from February 2010 to

Name of the company Committee Position March 2014.

Russell Credit Limited Audit Committee Chairman Banerjee does not hold directorship of any other company.
CSR Committee Chairman

Nomination and Member

Remuneration
Committee H. Bhargava
Landbase India Limited Audit Committee Chairman
Hemant Bhargava (62), DIN: 01922717, joined the
ITC Infotech India Audit Committee Chairman
ITC Board as a Non-Executive Independent Director
Limited
Nomination and Member
effective December 20, 2021.
Remuneration
Committee Bhargava is a Masters in Economics and has
studied Masters in Financial Management from the
Jamnalal Bajaj Institute of Management Studies.
He joined the Life Insurance Corporation of India (‘LIC’)
S. Banerjee
as a Direct Recruit Officer in 1981 and retired as its
Shilabhadra Banerjee (73), DIN: 02922331, joined Managing Director in July 2019. During his long tenure
the ITC Board as a Non-Executive Director effective of 38 years, he worked across diverse set of roles
July 24, 2014 and was appointed as an Independent both in India and abroad, building multi-dimensional
Director effective July 30, 2014. experience in different capacities, especially in

Banerjee, a Masters in History from St. Stephen’s Marketing, International Operations and new ventures.

College, Delhi, Post Graduate Diploma holder in He was the first chief of LIC International Operations

Public Administration from the Indian Institute of SBU, besides being instrumental in setting up

Public Administration, New Delhi, and an M. Phil in LIC Cards Services Limited. His tenure as

Social Sciences from the University of Panjab, joined Managing Director, and as Chairman in-charge,

ITC Limited REPORT AND ACCOUNTS 2022 5

Your Directors

of LIC was marked by his creative leadership with Insurance, Accounts, Finance & Taxation, Investments,
new ideas enriched by the extensive experience gained Anti-money Laundering, Solvency Margin &
in overseeing several functions including Marketing, Credit Ratings, Actuarial Relations, Funds Management,
Finance, Personnel, Investments, Alternate channels etc. Board & Secretarial matters, Advertisement,
He also served on the Board of the Company Publicity and Corporate Social Responsibility related
from July 2018 to August 2021. portfolios in NICL. Prior to joining NICL in January 2021,
he was the General Manager of The Oriental Insurance
Other Directorships
Company Limited.
Name of the company Position

The Tata Power Company Nominee Director Doda does not hold directorship of any other company.
Limited #

Larsen & Toubro Limited # Nominee Director

UGRO Capital Limited # Independent Director

A. Duggal
Committee Membership of other companies
Arun Duggal (75), DIN: 00024262, joined the ITC Board
Name of the company Committee Position
as a Non-Executive Independent Director effective
The Tata Power Stakeholders Member
September 15, 2014.
Company Limited Relationship
Committee Duggal, a Mechanical Engineer from the Indian Institute
Larsen & Toubro Limited Stakeholders Member of Technology, Delhi (‘IIT Delhi’), and an MBA from the
Relationship Indian Institute of Management, Ahmedabad
Committee
(‘IIM Ahmedabad’), is an international banker with
global experience in financial strategy, M&A and capital
raising. His professional career includes 26 years with
Bank of America (‘BoA’), primarily in the USA,
N. Doda
Hong Kong and Japan, with his last assignment as
Navneet Doda (59), DIN: 09033035, was appointed
Chief Executive of BoA, India, from 1998 to 2001.
as a Non-Executive Director on the Board of ITC
He was the Chief Financial Officer of HCL Technologies
effective August 11, 2021, as a representative of the
Limited, India, from 2001 to 2003. He has also been
General Insurers’ (Public Sector) Association of India.
the Chairman of the American Chamber of Commerce,

Doda holds Bachelor Degrees in Commerce and Law, India, and on the Board of Governors of the

besides being an MBA, a Chartered Accountant and National Institute of Bank Management.

a Fellow Member of the Insurance Institute of India.

Duggal is involved in several initiatives in social &

Presently, Doda is the General Manager of National educational sectors and is founder of FICCI’s

Insurance Company Limited (‘NICL’), and looks after ‘Women on Corporate Boards’ Programme, the
Reinsurance (underwriting), Marine Cargo & Hull ‘Centre of Excellence for Research on Clean Air’

6 ITC Limited REPORT AND ACCOUNTS 2022

 Your Directors

at IIT Delhi, and the ‘ESG Centre for Research and Executive Director (Bancassurance) at Corporate Office,
Innovation’ at IIM Ahmedabad. He is recipient of Marketing Manager of Bikaner Division, Senior Divisional
Distinguished Alumnus Awards from IIT Delhi and Manager of two Divisions viz., Amritsar and Hyderabad,
IIM Ahmedabad. Regional Manager (Bancassurance & Alternate Channels)

Other Directorships of LIC’s South Central Zone, Regional Manager

Name of the company Position (Marketing) of Western Zone, and Zonal Manager

ICRA Limited # Chairman & of the Central Zone.

Independent Director
Other Directorships
IIT Delhi Endowment Non-Executive Director
Name of the company Position
Management Foundation
IDBI Bank Limited # Nominee Director
Jubilant Pharma Limited, Independent Director
Singapore *
Committee Membership of other companies
Committee Membership of other companies Name of the company Committee Position
Name of the company Committee Position IDBI Bank Limited Audit Committee Member
ICRA Limited Audit Committee Member Nomination & Member
Stakeholders Member Remuneration
Relationship Committee
Committee

S. Mukherjee
M. Gupta
Shyamal Mukherjee (62), DIN: 03024803, joined the
Mukesh Gupta (60), DIN: 06638754, joined the ITC Board as a Non-Executive Independent Director
ITC Board as a Non-Executive Director effective effective August 11, 2021.
October 27, 2021, representing the LIC.
Mukherjee is a Chartered Accountant and also
Gupta holds Degrees of Bachelor in Science and holds Degrees of Bachelor in Commerce and Law from
Masters in Business Administration (Human Resources). Delhi University. He is the former Chairman and
He joined LIC as a Direct Recruit Officer in 1984 and Senior Partner of PricewaterhouseCoopers (‘PwC’)
retired as its Managing Director on September 30, 2021. in India. With more than 37 years of experience,
During his long tenure of 37 years, he worked across Mukherjee started his professional journey with PwC
diverse set of roles, building multi-dimensional experience in 1984 and became a Partner in 1993. Along the way,
in different capacities, especially in Insurance and he assumed several leadership roles, including
Marketing. Gupta held prominent positions in the PwC India’s Brand & Strategy Leader and Leader of
Corporate Office and three major zones of LIC, PwC India’s Tax practice. As PwC’s Chairman,
including Executive Director (Personnel) and he was at the forefront of making it a more

ITC Limited REPORT AND ACCOUNTS 2022 7

Your Directors

future-ready firm, investing in and strengthening the from 1996 to 2015. He also served on the Corporate
firm’s key capabilities across its people, go-to-market Management Committee of ITC for over 18 years
initiatives and internal transformation. He has been from 1997 to 2015. He was also responsible for overall
known for building a culture that is value-driven and management of Social Sector initiatives under the
encourages innovation & robust governance. He is CSR agenda of ITC and mentored the Mission Sunehra
currently a Trustee of the Phanindranath Education Kal team in crafting enduring sustainability solutions
Trust, Howrah, and also a Member of the for rural India.
Bar Council of Delhi.
Nayak does not hold directorship of any other company.
Other Directorships
Name of the company Position

UrbanClap Technologies India Independent Director

Private Limited
S. Panray
Committee Membership of other companies
Sunil Panray (64), DIN: 09251023, was appointed
Name of the company Committee Position
as a Non-Executive Director on the Board of ITC
UrbanClap Technologies Audit Committee Chairman
effective August 11, 2021, as a representative of
India Private Limited
Nomination & Member
Tobacco Manufacturers (India) Limited (‘TMI’),
Remuneration
Committee a subsidiary of British American Tobacco p.l.c. (‘BAT’).

Panray holds Degrees of Bachelor in Commerce

and Masters in Business Administration from

Concordia University in Montreal, Canada. He is a

A. Nayak
retired senior executive. Panray started his
Anand Nayak (70), DIN: 00973758, joined the professional journey as a Senior Auditor and
ITC Board as a Non-Executive Independent Director Financial Consultant with Raymond Chabot Grant
effective July 13, 2019. Thornton, Canada, and has held senior leadership

Nayak is a Post Graduate in Personnel Management positions at Imasco Limited, Imperial Tobacco,

and Industrial Relations from XLRI, Jamshedpur, Canada, and BAT. He has also served as the

from where he graduated in 1973. He joined ITC the Vice-President Finance and Treasurer of Canadian

same year and served for more than 42 years until National Railway Company, the largest transcontinental

his retirement in December 2015. public railway transportation company in Canada,

from 2012 to 2016. During his professional career,

During his long tenure with the Company, Nayak
he has played key leadership roles in complex business
held various portfolios and worked across several
and regulatory environments.
businesses as well as at Corporate Headquarters
where he headed the Human Resources Function Panray does not hold directorship of any other company.

8 ITC Limited REPORT AND ACCOUNTS 2022

 Your Directors

N. Rao the first woman spokesperson of the Ministry of External

Affairs. After her retirement, she was appointed

Nirupama Rao (71), DIN: 06954879, was appointed
Ambassador of India to the United States for a period of
as a Non-Executive Independent Director on the
two years from 2011 to 2013. She is the author of
Board of ITC effective April 8, 2016.
‘The Fractured Himalaya: India Tibet China, 1949 to 1962’,
A Post Graduate in English Literature, she is also a published in 2021.
Fellow - Harvard University (1992-93), Fellow - Brown
Other Directorships
University (2014-16), Jawaharlal Nehru Fellow, and
Name of the company Position
a recipient of the Degree of Doctor of Letters
KEC International Limited # Independent Director
(Honoris Causa) from the Pondicherry University.
JSW Steel Limited # Independent Director
She was conferred with the Vanitha Ratna by the
Adani Ports and Special Independent Director
Government of Kerala in 2016. She is currently a
Economic Zone Limited #
Global Fellow of The Wilson Center in Washington,
D.C., Council Member of the World Refugee & Committee Membership of other companies

Migration Council and of the Indian Institute of Science, Name of the company Committee Position

Bengaluru, and a Member on the KEC International Nomination and Member

Limited Remuneration
Board of US-India Business Council. She is also a
Committee
Member of the Board of Governors of the
Sustainability Member
Indian Institute of Management, Bangalore, a Trustee
and Corporate
of the Museum of Art & Photography and of the Social
Indian Music Experience, both in Bengaluru, Responsibility
Committee
and Chairperson of the India Trustee Board of the
JSW Steel Limited CSR Committee Chairperson
American India Foundation, besides being a Member
Stakeholders Member
of the Board of Governors of the Indian Council for
Relationship
Research on International Economic Relations, Committee
and a Founder Trustee of The South Asian Symphony
Nomination & Member
Foundation, Bengaluru. Remuneration
Committee
A career diplomat from the Indian Foreign Service
Adani Ports and Special Corporate Social Chairperson
from 1973 to 2011, she served the Government in
Economic Zone Limited Responsibility
several important positions including that of the Foreign Committee
Secretary of India. She has represented India in several Audit Committee Member
countries during her distinguished career and was the Nomination and Member
first Indian woman to be appointed High Commissioner Remuneration
Committee
to Sri Lanka and Ambassador to China. She was also

ITC Limited REPORT AND ACCOUNTS 2022 9

Your Directors

A. K. Seth Prime Minister’s Office for six years from 1985 to 1991
working on foreign policy and security matters.
Ajit Kumar Seth (70), DIN: 08504093, joined the
Thereafter, she led the Commercial Wing in the Indian
ITC Board as a Non-Executive Independent Director
Embassy in Washington as Minister (Commerce) till
effective July 13, 2019.
1995. She returned as Director General of the Indian
An alumnus of St. Stephen’s College, Delhi, from Council of Cultural Relations overseeing India’s cultural
where he did his post-graduation in Chemistry, Seth diplomacy. She has had extensive experience in
obtained an M. Phil in Life Sciences from the Jawaharlal
South Asia having worked on Bangladesh, Sri Lanka and
Nehru University and a Masters in Development
Maldives as Under Secretary and Deputy Secretary in
Finance from the University of Birmingham, UK.
the Ministry of External Affairs. Later, as Joint Secretary
In 2015, the University of Birmingham conferred upon
she headed divisions dealing with neighbours, Nepal
him a Doctorate Honoris Causa.
and Bhutan, and the South Asian Association for
Seth is a retired IAS Officer with administrative Regional Cooperation (‘SAARC’). As Additional
experience of more than 41 years. He retired in Secretary, she handled the UN and international
June 2015 after serving for four years as the Cabinet security issues. She served as Ambassador of India
Secretary of the Government of India, the highest to Germany from 2005 to 2009 and then to the
position in civil services. Thereafter, he was appointed United States from 2009 to 2011.
Chairman of the Public Enterprises Selection Board.
Other Directorships
In a varied and distinguished career, his past
Name of the company Position
assignments include postings in the Ministry of
Pidilite Industries Limited # Independent Director
Commerce, the Permanent Mission of India to the
Adani Transmission Limited # Independent Director
United Nations at Geneva (dealing with GATT /
UNCTAD) and the Ministry of Textiles. Earlier, in JK Tyre & Industries Limited # Independent Director

Uttar Pradesh, he served as Principal Secretary - Rural Committee Membership of other companies
Development, Special Secretary - Industries, Divisional
Name of the company Committee Position
Commissioner of Kumaon Division (Nainital), and
Pidilite Industries Limited Corporate Social Member
District Magistrate, Lucknow. Responsibility
Seth does not hold directorship of any other company. Committee

Adani Transmission Audit Committee Member

Limited
Nomination and Member
M. Shankar Remuneration
Committee
Meera Shankar (71), DIN: 06374957, was appointed
Corporate Social Member
as a Non-Executive Independent Director on the
Responsibility
Board of ITC effective September 6, 2012. Committee

A Post Graduate in English Literature, she joined JK Tyre & Industries Corporate Social Member
the Indian Foreign Service in 1973 and had an Limited Responsibility
Committee
illustrious career spanning 38 years. She served in the

10 ITC Limited REPORT AND ACCOUNTS 2022

 Your Directors

D. R. Simpson of diverse sectors spanning Investment Banking

and Private Equity, Infrastructure, Energy,
David Robert Simpson (65), DIN: 07717430, was
Transport, Healthcare, Education, Investment Risk
appointed as a Non-Executive Director on the
Assessment etc.
Board of ITC effective January 27, 2017, as a
Other Directorships
representative of TMI.
Name of the company Position
In addition to holding a Masters Degree from the
Ecofin Global Utilities and Chairman &
University of Cambridge, Simpson is a qualified Infrastructure Trust plc, UK * Non-Executive Director
lawyer from the Guildford College of Law. He started M&G Credit Income Investment Chairman &
his career in 1979 and has held various leadership Trust plc, UK * Non-Executive Director

positions with major corporates including the Aberdeen New India Non-Executive Director
investment banking arm of Barclays PLC and as Investment Trust PLC, UK *

Global Head of M&A at KPMG LLP. Simpson is European Transport Non-Executive Director
Investments (UK) Limited *
currently a Director of the British Geological Survey.
He has a wide range of expertise and understanding Committee Membership of other companies: Nil

* Denotes foreign company

# Denotes listed Indian company whose securities are listed on a recognised stock exchange

Notes:
1. Other Directorships and Committee Memberships of Directors are as on 18th May, 2022.
2. Committee Memberships cover Committees under the Companies Act, 2013 viz., Audit Committee, Stakeholders Relationship Committee,
Nomination and Remuneration Committee and CSR Committee of Indian companies.

ITC Limited REPORT AND ACCOUNTS 2022 11

Report on
Corporate Governance
The Directors present the Company’s Report on ITC’s Corporate Governance structure, systems and
Corporate Governance pursuant to the Securities and processes are based on two core principles:
Exchange Board of India (Listing Obligations
(i) Management must have the executive freedom
and Disclosure Requirements) Regulations, 2015
to drive the enterprise forward without undue
(‘Listing Regulations’).
restraints, and
ITC Limited has been one of the frontrunners in India
(ii) This freedom of management should be
to have put in place a formalised system of Corporate
exercised within a framework of effective
Governance. Its governance framework enjoins the
accountability.
highest standards of ethical and responsible conduct
of business to create value for all stakeholders. ITC believes that any meaningful policy on
Corporate Governance must empower the
THE COMPANY’S GOVERNANCE executive management of the Company. At the
PHILOSOPHY same time, Governance should create a
mechanism of checks and balances to ensure that
ITC defines Corporate Governance as a systemic
the decision-making powers vested in the executive
process by which companies are directed and
management are used with care and responsibility
controlled to enhance their wealth-generating
to meet stakeholders’ aspirations and societal
capacity. Since large corporations employ a vast
expectations.
quantum of societal resources, ITC believes
that the governance process should ensure that From this definition and core principles of Corporate
these resources are utilised in a manner that Governance emerge the cornerstones of ITC’s
meets stakeholders’ aspirations and societal governance philosophy, namely trusteeship,
expectations. This belief is reflected in the transparency, ethical corporate citizenship,
Company’s deep commitment to contribute to empowerment & accountability and control.
the “triple bottom line”, namely conservation and ITC believes that the practice of each of these creates
development of the nation’s economic, social and the right corporate culture that fulfils the true purpose
environmental capital. of Corporate Governance.

The cornerstones of ITC’s governance philosophy are

trusteeship, transparency, ethical corporate citizenship,
empowerment & accountability and control.

12 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

Trusteeship recognises that large corporations, which represent a coalition of interests, namely
those of the shareholders, other providers of capital, business associates and employees,
have both an economic and a social purpose, thereby casting the responsibility on the
Trusteeship Board of Directors to protect and enhance shareholder value, as well as fulfil obligations to
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 means explaining the Company’s policies and actions to those to whom it has
responsibilities. Externally, this means maximum appropriate disclosures without jeopardising
Transparency the Company’s strategic interests and internally, this means openness in the Company’s
relationship with its employees and in the conduct of its business. ITC believes transparency
enhances accountability.

Ethical Corporate Citizenship means setting exemplary standards of ethical behaviour,

Ethical both internally within the organisation, as well as in external relationships. ITC believes
Corporate that unethical behaviour corrupts organisational culture and undermines stakeholder value.
Citizenship Governance processes in ITC continuously reinforce and help realise the Company’s belief
in ethical corporate citizenship.

Empowerment is a process of unleashing creativity and innovation throughout the organisation

by truly vesting decision-making powers at the most appropriate levels and as close to the scene
of action as feasible, thereby helping actualise the potential of its employees. Empowerment
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 combined
with accountability provides an impetus to performance and improves effectiveness, thereby
enhancing shareholder value.

Control ensures that freedom of management is exercised within a framework of checks and
balances and is designed to prevent misuse of power, facilitate timely management of change
Control and ensure effective management of risks. ITC believes that control is a necessary concomitant
of its second core principle of governance that freedom of management should be exercised
within a framework of appropriate checks and balances.

THE GOVERNANCE STRUCTURE (b) Strategic management of the Company,

The practice of Corporate Governance in ITC takes uncluttered by the day-to-day tasks of executive
place at three interlinked levels: management, remains focused and energised; and
Strategic supervision by the Board of Directors (c) Executive management of the divisional business
Strategic management by the Corporate Management free from collective strategic responsibilities for
Committee
ITC as a whole, remains focused on enhancing the
Executive management by the Divisional Chief Executive
assisted by the Divisional quality, efficiency and effectiveness of the business
Management Committee to achieve best-in-class performance.
The three-tier governance structure ensures that:
The core roles of the key entities flow from this
(a) Strategic supervision (on behalf of the Shareholders), structure. These roles, in turn, determine the core
being free from involvement in the task of strategic
responsibilities of each entity. In order to discharge
management of the Company, can be conducted
by the Board with objectivity, thereby sharpening such responsibilities, each entity is empowered
accountability of management; formally with requisite powers.

ITC Limited REPORT AND ACCOUNTS 2022 13

Report on Corporate Governance

The structure, processes and practices of governance Chairman: The Chairman is the Chief Executive of
are designed to support effective management of the Company. He is the Chairman of the Board and
multiple businesses while retaining focus on each the CMC, and also presides over General Meetings of
one of them. Shareholders. His primary role is to provide leadership
to the Board and the CMC for realising Company
The Governance Document that sets out the structure, goals in accordance with the charter approved by the
policies and practices of governance is available on the Board. He is responsible, inter alia, for the working
Company’s corporate website www.itcportal.com . of the Board and the CMC, for ensuring that all
relevant issues are on the agenda and for ensuring
ROLES OF VARIOUS ENTITIES that all Directors and CMC Members are enabled and
Board of Directors (‘Board’): The primary role of the encouraged to play a full part in the activities of the
Board is that of trusteeship to protect and enhance Board and the CMC, respectively. He keeps the Board
shareholder value through strategic supervision of informed on all matters of importance. He is also
ITC and its wholly owned subsidiaries. As trustees, responsible for balance of membership of the Board,
subject to Board and Shareholder approvals.
the Board ensures that the Company has clear goals
aligned to shareholder value and its growth. The Board Non-Executive Director: Non-Executive Directors,
sets strategic goals and seeks accountability for including Independent Directors, play a critical role
their fulfilment. The Board also provides direction in imparting balance to the Board processes by
and exercises appropriate control to ensure that bringing independent judgement on issues of strategy,
performance, resources, standards of Company
the Company is managed in a manner that fulfils
conduct etc.
stakeholders’ aspirations and societal expectations.
The Board, as part and parcel of its functioning, Executive Director: The Executive Director assists
annually reviews its role, evaluates its performance the Board in realising its role of strategic supervision
and also that of the Board Committees and the Directors. of the Company in pursuit of its purpose and goals.
As a member of the CMC, the Executive Director
Board Committees: The roles of the Board Committees contributes to the strategic management of the
are determined by the Board from time to time, Company’s businesses within Board approved
details of which are provided below under the direction / framework. An Executive Director
heading ‘Committees of the Board’. accountable to the Board for a business, assumes
overall responsibility for its strategic management,
Corporate Management Committee (‘CMC’): The
including governance processes and top management
primary role of the CMC is strategic management of
effectiveness. Similarly, as Director accountable to
the Company’s businesses within Board approved the Board for a corporate function, the overall strategic
direction / framework and realisation of Company goals. responsibility for its performance forms part of the
The CMC also assesses the performance of the Executive Director’s role. In the context of the
businesses and allocates resources, and operates under multi-business character of the Company, an Executive
the strategic supervision and control of the Board. Director is in the nature of a Managing Director for
those businesses and functions reporting to him.
Divisional Management Committee (‘DMC’): The
primary role of the DMC is executive management of CMC Member: The CMC Member contributes to the
the business to realise tactical and strategic objectives strategic management of the Company’s businesses
in accordance with the Board approved Business Plan. within Board approved direction / framework.
A CMC Member accountable for a business, assumes
The Executive Committee for Business Vertical within responsibility for its strategic management, including
the Division is responsible to deliver comprehensive governance processes and top management
business results under the overall direction and effectiveness. Similarly, where accountable for a
supervision of the Divisional Chief Executive corporate function, the overall strategic responsibility for
supported by the DMC. its performance forms part of the CMC Member’s role.

14 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

Divisional Chief Executive: The Divisional

Director Category No. of No. of Membership(s) /
Chief Executive for a business has the executive other Chairmanship(s) of
responsibility for its day-to-day operations and Directorship(s) * Audit Committee /
provides leadership to the DMC in its task of executive Stakeholders
management of the business and the Verticals within Relationship
Committee of other
the Division. Indian public limited
The Chief Operating Officer of a Business Vertical is companies
responsible for providing leadership to the Vertical
S. Puri Chairman & 5 Nil
and realising the tactical & strategic objectives of the Managing Director
respective business area.
N. Anand Executive Director 8 1
BOARD OF DIRECTORS
B. Sumant Executive Director 2 Nil
Composition
The ITC Board is a balanced Board, comprising R. Tandon Executive Director 9 3
[also as Chairman]
Executive and Non-Executive Directors.
The Non-Executive Directors include independent S. Banerjee Independent Director Nil Nil
professionals. At least half of the total strength of the
H. Bhargava Independent Director 3 2
Board is required to comprise Independent Directors.
The Governance Policy of the Company, inter alia, A. Duggal Independent Director 3 2
requires that Non-Executive Directors be drawn from S. Mukherjee Independent Director 1 Nil
amongst eminent professionals, with experience
in business / finance / law / public administration A. Nayak Independent Director Nil Nil
and enterprises. The present composition of the N. Rao Independent Director 3 2
Board represents an optimal mix of professionalism,
knowledge and experience. The Board Diversity A. K. Seth Independent Director Nil Nil
Policy requires the Board to have balance of skills, M. Shankar Independent Director 3 1
experience and diversity of perspectives appropriate
to the Company. The Directors of the Company N. Doda Non-Executive Director Nil Nil
possess the skills, expertise and competencies, Representative of the
as identified by the Board and provided in the General Insurers’ (Public
Sector) Association of India
Annexure forming part of this Report.
as Investor
In terms of the applicable regulatory requirements
read with the Articles of Association of the Company, M. Gupta Non-Executive Director 1 1
the strength of the Board shall not be fewer than six Representative of the
Life Insurance Corporation
nor more than eighteen. The present strength of the
of India as Investor
Board is sixteen, comprising the Chairman & three other
Executive Directors, eight Non-Executive Independent S. Panray Non-Executive Director Nil Nil
Directors, of which two are Women Directors, and Representative of Tobacco
four other Non-Executive Directors. Manufacturers (India)
Limited (‘TMI’),
Composition of the Board as on 31st March, 2022: a subsidiary of British
Category No. of Percentage to American Tobacco p.l.c.,
Directors total no. of Directors as Investor

Executive Directors 4 25 D. R. Simpson Non-Executive Director 4 Nil

Non-Executive Independent Directors 8 50 Representative of TMI
as Investor
Other Non-Executive Directors 4 25
* Details with respect to other Directorships are provided under the section ‘Your Directors’
Total 16 100 in the Report and Accounts.

ITC Limited REPORT AND ACCOUNTS 2022 15

Report on Corporate Governance

Meetings and Attendance S

 ignificant court judgement or order passing
The Company’s Governance Policy requires the strictures, if any, on the conduct of the Company or a
subsidiary of the Company or any employee, which
Board to meet at least five times a year.
could negatively impact the Company’s image.
The tentative annual calendar of meetings is
broadly determined at the beginning of each year. Product liability claims of a substantial nature, if any.
The intervening period between two Board Meetings Default, if any, in payment of dues to any major creditor.
was well within the maximum gap of 120 days W
 rite-offs / disposals of fixed assets, inventories,
prescribed under the Listing Regulations. receivables, advances etc.
Board Agenda S
 ignificant development in Human Resources /
Industrial Relations.
Meetings are governed by a structured agenda.
N
 on-compliance of any regulatory or listing requirements
The Board members, in consultation with
and in relation to shareholders’ services.
the Chairman, may bring up any matter for the
consideration of the Board. All major agenda items are Post-meeting follow-up system
backed by comprehensive background information to The Governance processes in the Company include
enable the Board to take informed decisions. Agenda an effective post-meeting follow-up, review and
papers are generally circulated seven to fourteen days reporting process for action taken / pending on
prior to the Board Meeting. decisions of the Board, the Board Committees, the
CMC and the DMCs.
Information placed before the Board
Details of Board Meetings during the financial year
In terms of the Company’s Governance Policy, all
During the financial year ended 31st March, 2022,
statutory and other significant & material information
six meetings of the Board were held, as follows:
are placed before the Board to enable it to discharge
its responsibility of strategic supervision of the Sl. Date Board Strength No. of
Company as trustees of Shareholders. No. Directors
present
In addition to the above, the following are also
1 15th April, 2021 14 13
tabled for the Board’s approval / periodic review or
information: 2 1st June, 2021 13 13
3 24th July, 2021 13 13
A
 nnual operating plans & budgets and periodic
review of the Company’s businesses. 4 11th August, 2021 13 13
5 27th October, 2021 14 14
Q
 uarterly performance including business-wise
6 3rd February, 2022 16 16
financials.
E
 xternal Audit Management Reports (through the Attendance at Board Meetings and at Annual General
Audit Committee). Meeting (‘AGM’) during the financial year

Status of safety and legal compliance. Director No. of Board Attendance at

Meetings attended last AGM
S
 tatus and effectiveness of risk management
S. Puri 6 Yes
plans.
N. Anand 6 Yes
S
 uccession to senior management (through the
B. Sumant 6 Yes
Nomination & Compensation Committee).
R. Tandon 6 Yes
S
 tatutory compliance reports from business
S. Banerjee 6 Yes
units / corporate functions.
H. Bhargava 1 5 Yes
S
 how cause / demand / prosecution / adjudication
N. Doda 2 2 N.A.
notices, if any, from revenue authorities which are
A. Duggal 6 Yes
considered materially important, including any
M. Gupta 3 1 N.A.
exposure that exceeds 1% of the Company’s
net worth, and their outcome. S. Mukherjee 4 2 N.A.

16 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

Attendance at Board Meetings and at AGM during the The role of the Committee includes the following:
financial year (Contd.) (a) To oversee the Company’s financial reporting
Director No. of Board Attendance at process and the disclosure of its financial
Meetings attended last AGM information to ensure that the financial statements
A. Nayak 6 Yes are correct, sufficient and credible;
S. Panray 2 2 N.A. (b) To recommend the appointment, remuneration
N. Rao 6 Yes and removal of Statutory and Cost Auditors;
A. K. Seth 6 Yes (c) To recommend the appointment of the
M. Shankar 6 Yes Chief Financial Officer of the Company;
D. R. Simpson 6 Yes (d) To approve transactions with related parties,
A. Jerath 5 0 N.A.
including modifications thereto;
S. B. Mathur 6 4 Yes (e) To evaluate the Company’s internal financial
controls and risk management systems;
1. Resigned as Non-Executive Director w.e.f. 23rd August, 2021; Appointed Independent Director
w.e.f. 20th December, 2021. (f) To review with the management the following:
2. Appointed Non-Executive Director w.e.f. 11th August, 2021.
3. Appointed Non-Executive Director w.e.f. 27th October, 2021.
(i) Annual financial statements and
4. Appointed Independent Director w.e.f. 11th August, 2021. Auditor’s Report thereon before submission
5. Resigned as Non-Executive Director w.e.f. 1st May, 2021. to the Board for approval;
6. Ceased to be Independent Director w.e.f. 15th September, 2021 upon completion of term.
(ii) Quarterly financial statements before
COMMITTEES OF THE BOARD submission to the Board for approval;
Currently, there are five Board Committees – (g) To review the following:
the Audit Committee, the Nomination & Compensation (i) Management discussion and analysis of
Committee, the Securityholders Relationship Committee, financial condition & results of operations,
the CSR and Sustainability Committee and and matters required to be included in the
the Independent Directors Committee. The terms of Directors’ Responsibility Statement;
reference of the Committees are determined by
the Board from time to time, other than the Independent (ii) Adequacy of internal control systems and the
Directors Committee the terms of reference of which Company’s statement on the same prior to
have been adopted as prescribed under law. endorsement by the Board, such review to be
Meetings of Board Committees are normally convened done in consultation with the management,
by the respective Committee Chairman. Matters requiring Statutory and Internal Auditors;
the Board’s attention / approval, as emanating (iii) Adequacy and effectiveness of internal
from the Board Committee Meetings, are placed before control systems laid down in the Company for
the Board with clearance of the Committee Chairman. compliance with the provisions of the
All the recommendations made by Board Committees Securities and Exchange Board of India
during the year were accepted by the Board. (Prohibition of Insider Trading) Regulations, 2015;
Minutes of Board Committee Meetings are placed before (iv) Internal Audit Reports and discussion with
the Board for its information. The role and composition Internal Auditors on any significant findings
of these Committees, including the number of meetings and follow-up thereon;
held during the financial year and the related attendance,
(v) Statutory Auditors’ independence and
are provided below.
performance, and effectiveness of the
I. AUDIT COMMITTEE audit process;
The Audit Committee of the Board provides (vi) System for storage, retrieval, security etc.
reassurance to the Board on the existence of an of books of accounts maintained in the
effective internal control environment that ensures: electronic form;
e fficiency and effectiveness of operations, both (vii) Functioning of Whistleblower mechanism in
domestic and overseas. the Company;
safeguarding of assets and adequacy of provisions (viii) Financial statements, including investments,
for all liabilities. of subsidiary companies;
reliability of financial and other management (ix) Utilisation of loans and / or advances and
information and adequacy of disclosures. investments by the Company to / in the
compliance with all relevant statutes. subsidiary companies.

ITC Limited REPORT AND ACCOUNTS 2022 17

Report on Corporate Governance

Composition II. NOMINATION & COMPENSATION COMMITTEE

The Audit Committee presently comprises four The Nomination and Remuneration Committee
Independent Directors. The Chairman of the Committee of the Board, under the nomenclature ‘Nomination &
is also an Independent Director. The Executive Director
Compensation Committee’, inter alia, identifies persons
representing the Finance function, the Chief Financial
Officer, the Head of Internal Audit and the representative qualified to become Directors, and recommends to the
of the Statutory Auditors are Invitees to the meetings Board the appointment, remuneration and removal of
of the Audit Committee. The Head of Internal Audit the Directors and senior management. The Committee’s
is the Coordinator and the Company Secretary is role also includes formulation of criteria for evaluation
the Secretary to the Committee. The representatives
of performance of the Directors & the Board as a
of the Cost Auditors are invited to meetings of the
Audit Committee whenever matters relating to whole, and administration of the Employee Stock
cost audit are considered. All members of the Committee Option Schemes of the Company.
are financially literate; three members, including the Composition
Chairman of the Committee, have accounting and
financial management expertise. The Nomination & Compensation Committee
The names of the members of the Audit Committee, presently comprises three Independent Directors and
including its Chairman, are provided under the section the Chairman of the Company. The Chairman of the
‘Board of Directors and Committees’ in the Committee is an Independent Director. The Company
Report and Accounts. Secretary is the Secretary to the Committee.
Meetings and Attendance The names of the members of the Nomination &
Details of Audit Committee Meetings during the Compensation Committee, including its Chairman, are
financial year provided under the section ‘Board of Directors and
During the financial year ended 31st March, 2022, Committees’ in the Report and Accounts.
ten meetings of the Audit Committee were held,
as follows: Meetings and Attendance

Sl. Date Committee No. of Details of Nomination & Compensation Committee

No. Strength Members Meetings during the financial year
present During the financial year ended 31st March, 2022,
1 6th April, 2021 4 4 five meetings of the Nomination & Compensation
2 13th May, 2021 4 4 Committee were held, as follows:
3 1st June, 2021 4 4
4 24th July, 2021 4 4 Sl. Date Committee No. of
5 27th August, 2021 4 4 No. Strength Members
6 27th October, 2021 3 3 present
7 17th December, 2021 3 3 1 14th April, 2021 4 4
8 25th January, 2022 3 3 2 31st May, 2021 4 4
9 3rd February, 2022 3 3
3 2nd August, 2021 4 4
10 30th March, 2022 4 4
4 26th October, 2021 4 4
Attendance at Audit Committee Meetings during
5 3rd February, 2022 4 4
the financial year
Member No. of Meetings attended Attendance at Nomination & Compensation
A. Duggal 10 Committee Meetings during the financial year
S. Banerjee 10
Member No. of Meetings attended
H. Bhargava 1 5
S. Mukherjee 2 6 S. Banerjee 5
S. B. Mathur 3 5 A. Nayak 5
1. Ceased to be Member w.e.f. 23rd August, 2021; Appointed Member w.e.f. 3rd February, 2022. S. Puri 5
2. Appointed Member w.e.f. 11th August, 2021.
M. Shankar 5
3. Ceased to be Member w.e.f. 15th September, 2021.

18 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

Remuneration Policy ` 70,00,000/- and ` 1,00,00,000/- individually, as

ITC’s Remuneration strategy is performance based, approved by the Shareholders. Non-Executive
competitive and values led. It is designed to reward Directors’ commission is determined by the
holistic performance that is in congruence with the Board, based inter alia on Company performance
Company’s “triple bottom line” approach to business, to and regulatory provisions, and is payable on a
attract and retain high quality talent and is anchored on uniform basis to reinforce the principle of collective
ITC’s values, all of which are integral in pursuit of the responsibility. Non-Executive Directors are also
Company’s vision and mission of enhancing the wealth entitled to sitting fees for attending the meetings of
generating capability of the enterprise in a globalised the Board and its Committees. The sitting fees as
environment, while delivering superior and sustainable determined by the Board are ` 1,00,000/- for each
stakeholder value. The Remuneration Policy of the meeting of the Board, ` 50,000/- for each meeting of
Company is market-led and factors in the competitive the Audit Committee, Nomination & Compensation
context of each business. The Company has adopted Committee, CSR and Sustainability Committee, and
a comprehensive ‘Total Rewards’ approach to
Independent Directors Committee, and ` 10,000/- for
remuneration that, inter alia, promotes superior quality
each meeting of the Securityholders Relationship
of personal and work life by combining both cash and
Committee. Non-Executive Directors are also entitled
non-cash components / benefits.
to coverage under Personal Accident Insurance.
The Company’s Policy on remuneration of Directors,
Key Managerial Personnel and other employees was Details of Remuneration paid to the Directors
amended by the Board during the year, inter alia, to during the financial year ended 31st March, 2022
ensure contemporariness of the Policy. The amended  (` in Lakhs)
Policy may be accessed on the Company’s corporate Director Basic / Perquisites / Performance Sitting Total
website at https://www.itcportal.com/remuneration- Consolidated Other Bonus / Fees
policy . Salary Benefits Commission
Remuneration of Directors S. Puri 264.00 49.63 752.40 - 1,066.03

Remuneration of the Chairman and the other N. Anand 156.00 84.43 296.40 - 536.83
Executive Directors is determined by the Board on the B. Sumant 156.00 31.99 296.40 - 484.39
recommendation of the Nomination & Compensation R. Tandon 156.00 31.66 296.40 - 484.06
Committee, subject to the approval of the Shareholders. S. Banerjee - - 76.00 14.00 90.00
The Chairman and the other Executive Directors are
entitled to performance bonus for each financial year H. Bhargava 1 - - 76.00 * 9.00 85.00
up to a maximum of 300% and 200% of their N. Doda 2 - - - 3.30 * 3.30
basic / consolidated salary, respectively, as may be A. Duggal - - 76.00 13.00 # 89.00
determined by the Board on the recommendation of the
M. Gupta 3 - - - 1.00 1.00
Nomination & Compensation Committee; such 4
remuneration is linked to the performance of the Company S. Mukherjee - - - 5.00 5.00
inasmuch as the performance bonus is based on A. Nayak - - 76.00 10.20 86.20
various qualitative and quantitative performance criteria. S. Panray 2 - - - 2.50 2.50
Apart from fixed elements of remuneration and
N. Rao - - 76.00 8.50 84.50
benefits / perquisites, the Chairman and the other
Executive Directors are also eligible for long term A. K. Seth - - 76.00 8.50 84.50
incentives, including Stock Options, as may be M. Shankar - - 76.00 11.00 87.00
determined by the Nomination & Compensation D. R. Simpson - - 76.00 8.00 84.00
Committee or the Board; such incentives are linked to
A. Jerath 5 - - 76.00 * - 76.00
individual performance and the overall performance of
6
the Company, including Sustainability goals. S. B. Mathur - - 76.00 7.00 83.00
The maximum annual value of such long term * Paid to the Public Financial Institution the Director represents / represented.
# Includes ` 1.50 Lakhs towards sitting fees for attending the meetings of the Risk Management
incentives is 0.10% and 0.05% for the Chairman and Committee.
each of the other Executive Directors, respectively, 1. Resigned as Non-Executive Director w.e.f. 23rd August, 2021; Appointed Independent Director
of the net profits of the Company for the immediately w.e.f. 20th December, 2021.
2. Appointed Non-Executive Director w.e.f. 11th August, 2021.
preceding financial year. 3. Appointed Non-Executive Director w.e.f. 27th October, 2021.
Non-Executive Directors, including Independent 4. Appointed Independent Director w.e.f. 11th August, 2021.
5. Resigned as Non-Executive Director w.e.f. 1st May, 2021.
Directors, are entitled to remuneration by way of 6. Ceased to be Independent Director w.e.f. 15th September, 2021 upon completion of term.
commission for each financial year, ranging between Note: Disclosure with respect to Non-Executive Directors - Pecuniary relationship or transaction: None.

ITC Limited REPORT AND ACCOUNTS 2022 19

Report on Corporate Governance

Employee Stock Option Schemes Service Contract, Severance Fee and Notice Period
The Company granted 12,21,600 Options during The appointment of the Chairman and the other
the financial year to certain eligible employees and Executive Directors is governed by resolutions
Directors of the Company at ‘market price’ as defined passed by the Board and the Shareholders of the
under the Securities and Exchange Board of India Company, which cover the terms and conditions of
(Share Based Employee Benefits and Sweat Equity) such appointment read with the service rules of the
Regulations, 2021. Company. A separate Service Contract is not entered
into by the Company with those elevated to the Board
Each Option entitles the holder thereof to apply for and
from the management cadre, since they already have a
be allotted ten Ordinary Shares of the Company of
Service Contract with the Company. Letters of
` 1/- each upon payment of the exercise price during appointment have been issued by the Company to
the exercise period. The exercise period commences the Independent Directors, detailing their roles, duties,
from the date of vesting of the Options and expires responsibilities etc., which have been accepted by them.
at the end of five years from the date of such vesting.
There is no separate provision for payment of
Options vest as per the following schedule: severance fee under the resolutions governing the
appointment of Executive Directors who have all been
From the date of grant of the Options % of Options vest
drawn from the management cadre. The statutory
On completion of 12 months 30%
provisions will however apply. With respect to notice
On completion of 24 months 30% period of Directors, the service rules of the Company
On completion of 36 months 40% read with the statutory provisions will apply.
Shares and Options of Directors Performance Evaluation
Performance evaluation of the Board, the Board
Director No. of Ordinary Shares No. of Options granted
of ` 1/- each held during the Committees and the individual Directors was carried
(singly / jointly) financial year out by the Board in accordance with the Policy
as on 31st March, 2022 approved by the Nomination & Compensation
S. Puri 2,95,800 1,34,500 Committee in this regard; brief details of the same
are provided in the ‘Report of the Board of Directors &
N. Anand Nil 67,250
Management Discussion and Analysis’, forming part
B. Sumant 2,10,657 67,250
of the Report and Accounts.
R. Tandon 2,62,250 67,250
S. Banerjee Nil Nil
III. SECURITYHOLDERS RELATIONSHIP COMMITTEE
H. Bhargava Nil Nil The Stakeholders Relationship Committee of the
N. Doda Nil Nil
Board, under the nomenclature ‘Securityholders
Relationship Committee’, primarily oversees redressal
A. Duggal Nil Nil
of shareholder and investor grievances, approves
M. Gupta Nil Nil transmission of shares, sub-division / consolidation /
S. Mukherjee 13,500 Nil renewal of share certificates, issue of duplicate
A. Nayak 10,94,325 Nil share certificates, and allots shares upon exercise of
S. Panray Nil Nil Options under the Company’s Employee Stock Option
N. Rao Nil Nil Schemes. The Committee also reviews adherence
A. K. Seth 1,32,480 Nil to the service standards adopted by the Company in
respect of its in-house share registration and related
M. Shankar 45,000 Nil
activities, and the measures taken for effective
D. R. Simpson Nil Nil
exercise of voting rights by Shareholders.

Inherent in the concept of trusteeship is the responsibility

to ensure equity, namely, that the rights of all shareholders,
large or small, are protected.

20 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

Composition to guide the Company in crafting unique models to

The Securityholders Relationship Committee presently support creation of sustainable livelihoods together
comprises four Directors. The Chairman of the with environmental re-generation. Formulation and
Committee is an Independent Director. The Company monitoring of the CSR Policy and recommendation of
Secretary is the Secretary to the Committee. the annual CSR Action Plan to the Board forms part of
the role of the Committee.
The names of the members of the Securityholders
Relationship Committee, including its Chairman, are Composition
provided under the section ‘Board of Directors and
The CSR and Sustainability Committee presently
Committees’ in the Report and Accounts.
comprises the Chairman of the Company and
Meetings and Attendance seven Non-Executive Directors, three of whom are
Independent Directors. The Chairman of the Company
Details of Securityholders Relationship Committee
is the Chairman of the Committee. The Company
Meetings during the financial year
Secretary is the Secretary to the Committee.
During the financial year ended 31st March, 2022,
twelve meetings of the Securityholders Relationship The names of the members of the CSR and
Committee were held, as follows: Sustainability Committee, including its Chairman, are
provided under the section ‘Board of Directors and
Sl. Date Committee No. of Committees’ in the Report and Accounts.
No. Strength Members
present Meetings and Attendance
1 1st April, 2021 3 3 Details of CSR and Sustainability Committee
2 30th June, 2021 3 3 Meetings during the financial year
3 30th July, 2021 3 3 During the financial year ended 31st March, 2022,
4 25th August, 2021 4 4 four meetings of the CSR and Sustainability Committee
5 6th September, 2021 4 4 were held, as follows:
6 22nd October, 2021 4 4 Sl. Date Committee No. of Members
7 16th November, 2021 4 3 No. Strength present
8 17th December, 2021 4 4 1 14th April, 2021 7 6
9 17th January, 2022 4 4 2 31st May, 2021 6 6
10 3rd March, 2022 4 3 3 23rd July, 2021 6 6
11 17th March, 2022 4 4 4 25th October, 2021 7 7
12 29th March, 2022 4 3
Attendance at CSR and Sustainability Committee
Attendance at Securityholders Relationship Meetings during the financial year
Committee Meetings during the financial year
Member No. of Meetings attended
Member No. of Meetings attended S. Puri 4
A. Nayak 12 1
N. Doda 1
N. Doda 1 8 M. Gupta 2 N.A.
B. Sumant 12 S. Panray 1 1
R. Tandon 10 N. Rao 4
1. Appointed Member w.e.f. 11th August, 2021. A. K. Seth 4
M. Shankar 4
IV. CSR AND SUSTAINABILITY COMMITTEE
D. R. Simpson 4
The role of the CSR Committee of the Board,
H. Bhargava 3 3
under the nomenclature ‘CSR and Sustainability 4
A. Jerath 0
Committee’, is inter alia, to review, monitor and
provide strategic direction to the Company’s CSR 1. Appointed Member w.e.f. 11th August, 2021.
2. Appointed Member w.e.f. 27th October, 2021.
and sustainability practices towards fulfilling its
3. Ceased to be Member w.e.f. 23rd August, 2021.
triple bottom line objectives. The Committee seeks 4. Ceased to be Member w.e.f. 1st May, 2021.

ITC Limited REPORT AND ACCOUNTS 2022 21

Report on Corporate Governance

V. INDEPENDENT DIRECTORS COMMITTEE RISK MANAGEMENT COMMITTEE

The statutory role of the Independent Directors The role of the Risk Management Committee is
Committee of the Board is to review the performance of inter alia, to approve the strategic risk management
the non-Independent Directors, including the Chairman framework of the Company, and review the risk
of the Company, and the Board, and also to assess the
mitigation strategies and results of risk identification,
quality, quantity and timeliness of flow of information
prioritisation & mitigation plans for all business
between the Company management and the Board.
units / corporate functions, as also the measures
Composition taken for cyber security. The Committee also
The Independent Directors Committee comprises formulates the Risk Management Policy, and reviews
all the Independent Directors of the Company. implementation, effectiveness and adequacy of the
The names of the members of the Independent risk management systems, processes & plans of
Directors Committee are provided under the the Company.
section ‘Board of Directors and Committees’ in the
Report and Accounts. Composition
The Risk Management Committee presently
Meetings and Attendance
comprises all the Executive Directors, one
Details of Independent Directors Committee Independent Director and some senior members of
Meeting during the financial year
management. The Chairman of the Company is the
During the financial year ended 31st March, 2022, Chairman of the Committee. The Head of Internal Audit
one meeting of the Independent Directors Committee and the Chief Financial Officer are Invitees to
was held, as follows: the meetings of the Committee. The Chief Risk Officer
Sl. Date Committee No. of Members is the Secretary to the Committee.
No. Strength present
The names of the members of the Risk Management
1 11th May, 2021 7 7 Committee, including its Chairman, are provided
Attendance at Independent Directors Committee below.
Meeting during the financial year
Meetings and Attendance
Member Attendance at the Meeting Details of Risk Management Committee Meetings
S. Banerjee Yes during the financial year
H. Bhargava 1 N.A.
During the financial year ended 31st March, 2022,
A. Duggal Yes three meetings of the Risk Management Committee
S. Mukherjee 2 N.A. were held, as follows:
A. Nayak Yes
Sl. Date Committee Strength No. of Members
N. Rao Yes
No. (including Invitees) & Invitees
A. K. Seth Yes present
M. Shankar Yes
1 21st July, 2021 9 9
S. B. Mathur 3 Yes
2 16th December, 2021 9 9
1. Appointed Member w.e.f. 20th December, 2021.
2. Appointed Member w.e.f. 11th August, 2021. 3 25th March, 2022 9 9
3. Ceased to be Member w.e.f. 15th September, 2021.

The CSR and Sustainability Committee provides strategic

direction to the Company’s CSR and Sustainability practices
towards fulfilling its Triple Bottom Line objectives.

22 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

Attendance at Risk Management Committee SUBSIDIARY COMPANIES

Meetings during the financial year All subsidiaries of the Company are managed by their
Member No. of Meetings attended respective Board of Directors in the best interest of

S. Puri (Chairman) 3
those companies and their shareholders. The Minutes
of Board Meetings of the subsidiary companies and
N. Anand 3
details of significant transactions & arrangements
A. Duggal 1 3
entered into by them are placed before the Board
B. Sumant 3 of Directors of the Company. The annual financial
R. Tandon 3 statements of the subsidiary companies are reviewed
S. Sivakumar 3 by the Audit Committee of the Company. Performance
S. K. Singh 3 review reports of the subsidiary companies are also
Invitee No. of Meetings attended placed before the Board of Directors of the Company
on a half-yearly basis.
S. Dutta 3
M. Ganesan 3 The Company does not have any material subsidiary.
The Company’s Policy for determination of a material
1. Appointed Member w.e.f. 1st June, 2021.
subsidiary, as approved by the Board, may be
CORPORATE MANAGEMENT COMMITTEE accessed on its corporate website at
The primary role of the CMC is strategic management https://www.itcportal.com/material-subsidiary-policy .
of the Company’s businesses within Board approved
direction / framework and realisation of Company FAMILIARISATION PROGRAMME FOR
goals. The CMC, inter alia, formulates the Company’s DIRECTORS
business plans and organisational policies, systems
& processes, reviews business performance against ITC believes that a Board, which is well
approved plans, allocates resources, and operates informed / familiarised with the Company and its
under the strategic supervision and control of the Board. affairs, can contribute significantly to effectively
Composition discharge its role of trusteeship in a manner that fulfils
The CMC presently comprises all the Executive stakeholders’ aspirations and societal expectations.
Directors and seven senior members of management. In pursuit of this, the Directors of the Company are
The Chairman of the Company is the Chairman updated on changes / developments in the
of the Committee. The composition of the CMC is domestic / global corporate and industry scenario
determined by the Board on the recommendation of
including those pertaining to statutes / legislation &
the Nomination & Compensation Committee.
The Company Secretary is the Secretary to the CMC. economic environment, and on matters significantly
The names of the members of the CMC, including affecting the Company, to enable them to take well
its Chairman, are provided under the section informed and timely decisions. The Directors are
‘Board of Directors and Committees’ in the Report also kept abreast on all business related matters
and Accounts. including risk assessment & mitigation processes,
Meetings CSR & sustainability interventions, and new initiatives
The CMC normally meets once a month. Matters proposed by the Company. Visits to Company
requiring the Board’s attention / approval, as facilities are also organised for the Directors from
emanating from the CMC Meetings, are placed in the time to time. Further details may be accessed on
form of notes from the relevant Executive Director,
the Company’s corporate website at
backed by comprehensive background information.
Minutes of CMC Meetings are placed before the https://www.itcportal.com/directors-
Board for its information. familiarisation-programme .

ITC Limited REPORT AND ACCOUNTS 2022 23

Report on Corporate Governance

MEANS OF COMMUNICATION Stock Exchanges where the Company’s shares are

Timely disclosure of consistent, comparable, relevant listed and also made available on the Company’s
and reliable information on corporate financial corporate website. During the year, the Company
performance is at the core of good governance. organised an ‘Institutional Investors and Financial
Towards this end, the Company has taken the Analysts Day’ to provide deeper insights into the
following initiatives: Company’s Corporate Strategy and operating
segments including, inter alia, their competitive
W
 ebsite: The Company’s corporate website
strengths, unique value propositions and key drivers
www.itcportal.com provides comprehensive
of growth & profitability.
information on ITC’s portfolio of businesses,
CSR & sustainability initiatives, EHS performance, O
 ther disclosures / filings: A copy of the
shareholding pattern, key Company Policies, Chairman’s speech made at the Annual
and contact details of the Company’s employees General Meeting of the Company is sent to all
responsible for assisting Investors & handling the Shareholders and also made available on
investor grievances. The website has entire sections the Company’s corporate website. In addition,
dedicated to ITC’s profile, history and evolution, its shareholding pattern, report on corporate
core values, corporate governance and leadership. governance, and other important information
An exclusive section on ‘Investor Relations’ serves & material events relating to the Company are
to inform and service Shareholders, enabling them submitted to the Stock Exchanges and also made
to access information at their convenience. available on the Company’s corporate website.
The entire Report and Accounts as well as the
quarterly, half-yearly and annual financial results, ITC CODE OF CONDUCT
along with the Media Statements, presentations The ITC Code of Conduct, as adopted by the Board,
and FAQs on such results, are available in is applicable to the Directors, senior management and
downloadable formats under the said section employees of the Company. The Code is derived from
as a measure of added convenience to the three interlinked fundamental principles viz., good
Investors. The ‘Media Centre’ section includes corporate governance, good corporate citizenship
all major media releases from the Company and and exemplary personal conduct in relation to the
relevant media reports. Company’s business and reputation. The Code
F
 inancial Results and Annual Report: The covers ITC’s commitment to CSR and sustainable
financial results, along with the Media Statements development, concern for occupational health, safety
and presentations on such results, are sent to the and environment, a gender friendly workplace,
Shareholders of the Company. Extracts of these transparency and auditability, legal compliance,
results are published on an all India basis in major avoidance of conflict of interest, and the philosophy of
newspapers and also in ‘Luxemburger Wort’, leading by personal example. The Code is available
Luxembourg. Annual financial results are also sent on the Company’s corporate website.
to the GDR holders at their registered addresses.
Further, the Report and Accounts of the Declaration as required under the Listing
Company, inter alia, including the Standalone and Regulations
Consolidated Financial Statements, the Report of
the Board of Directors and the Auditors’ Reports All Directors and senior management of the Company
are sent to the Shareholders of the Company. have affirmed compliance with the ITC Code of Conduct
The Report of the Board of Directors includes all for the financial year ended 31st March, 2022.
aspects of Management Discussion and Analysis
as required under the Listing Regulations.
S. Puri
P
 resentations to the investing community: Chairman &
Detailed presentations on the quarterly results Kolkata, 18th May, 2022. Managing Director
for the investing community are sent to the

24 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

WHISTLEBLOWER POLICY D
 uring the year, the Company was not required to
obtain credit rating for any debt instrument, fixed
Synopsis of the Whistleblower Policy of the Company
deposit programme or any other scheme involving
is provided in the ‘Report of the Board of Directors
mobilisation of funds.
& Management Discussion and Analysis’, forming
part of the Report and Accounts. The Whistleblower T
 he Company has not raised any funds through
Policy may be accessed on the Company’s corporate preferential allotment or qualified institutions
website at https://www.itcportal.com/whistleblower- placement.
policy . N
 one of the Directors of the Company has been
debarred or disqualified from being appointed
POLICY ON RELATED PARTY TRANSACTIONS or continuing as a Director by SEBI / Ministry of
The Policy, as approved by the Board, may be Corporate Affairs / Statutory Authorities; this has
accessed on the Company’s corporate website at also been confirmed by the Company’s Secretarial
https://www.itcportal.com/rpt-policy . Auditors, Messrs. Vinod Kothari & Company.
D
 etails of ‘loans and advances (being in the nature
ITC CODE OF CONDUCT FOR PREVENTION
of loans) provided by the Company to firms /
OF INSIDER TRADING - 2019 companies in which its Directors are interested’ are
The ITC Code of Conduct for Prevention of Insider given in the ‘Notes to the Financial Statements’,
Trading - 2019, as approved by the Board, inter alia, forming part of the Report and Accounts.
prohibits trading in securities of the Company by D
 etails with respect to secretarial audit of
the Directors and employees while in possession of the Company, and confirmation by the Board
unpublished price sensitive information in relation to with respect to the Independent Directors, are
the Company. provided in the ‘Report of the Board of Directors
& Management Discussion and Analysis’, forming
OTHER DISCLOSURES part of the Report and Accounts.
D
 uring the last three years, there was neither any D
 isclosures in relation to the Sexual Harassment of
instance of non-compliance by the Company nor Women at Workplace (Prevention, Prohibition and
penalty / stricture imposed on the Company by the Redressal) Act, 2013 are provided in the
Stock Exchanges / SEBI / Statutory Authorities on ‘Business Responsibility and Sustainability Report’,
any matter related to the capital markets. forming part of the Report and Accounts.
T
 here are no inter-se relationships between the Information with respect to ‘Commodity Price Risk
Directors and Key Managerial Personnel of the or Foreign Exchange Risk and Hedging Activities’
Company. is provided in the ‘Report of the Board of Directors
& Management Discussion and Analysis’ and in
D
 uring the year, the Company has not entered into
the ‘Notes to the Financial Statements’, forming
any materially significant related party transaction
part of the Report and Accounts.
which may have potential conflict with the interest
of the Company at large. The details of related In view of the diversified business portfolio of the
party transactions entered into by the Company Company, its exposure in none of the individual
during the year are provided in the ‘Notes to the commodities which are sourced either for use as
inputs in its businesses or for agri-commodity trading,
Financial Statements’, forming part of the Report
is material in the context of its overall operations,
and Accounts.
and also in terms of the ‘Policy for determination of
D
 uring the year, the senior management of the materiality of events and information for disclosure
Company did not enter into any material financial to the Stock Exchanges’, as approved by the Board.
and commercial transaction in which they had Accordingly, the disclosure requirements prescribed
personal interest that may have had potential under the SEBI Circular dated 15th November, 2018
conflict with the interest of the Company at large. are not applicable for the Company.

ITC Limited REPORT AND ACCOUNTS 2022 25

Report on Corporate Governance

T
 he total fees paid during the year extracts of these results in the prescribed format
by the Company and its subsidiaries to are published in the newspapers on an all India
Messrs. S R B C & CO LLP, Statutory Auditors, basis. Significant events are also posted on the
and all entities in the network firm / network Company’s website under the ‘Media Centre’
entities which are part of the network of which section. The complete Annual Report and the
the Statutory Auditors are a member firm, financial results, along with the Media Statements
aggregate ` 7.73 Crores. and presentations on such results, are sent to the
M
 r. R. K. Singhi, Executive Vice President & Shareholders of the Company.
Company Secretary, is the Compliance Officer Audit Opinion: It has always been the Company’s
4. 
under the Listing Regulations. endeavour to present Financial Statements
with unmodified audit opinion, i.e. without any
DISCRETIONARY REQUIREMENTS UNDER
qualification. The Statutory Auditors have issued
THE LISTING REGULATIONS
an unmodified audit opinion on the Company’s
The status of compliance with the discretionary Financial Statements for the year ended
requirements under the Listing Regulations is 31st March, 2022.
provided below:
Internal Audit: The Head of Internal Audit reports
5. 
Separate posts of Chairman and Managing
1. 
to the Audit Committee of the Board.
Director: The Chairman of the Company is
an Executive Chairman. The Company has a GENERAL SHAREHOLDER INFORMATION
diversified business portfolio, which demands that
Provided in the ‘Shareholder Information’ section of
the senior leadership has in-depth knowledge and
the Report and Accounts.
understanding of the functioning of the Company,
so as to enhance the value-generating capacity CONFIRMATION OF COMPLIANCE
of the organisation and contribute significantly
It is confirmed that the Company has complied with the
to stakeholders’ aspirations and societal
requirements prescribed under Regulations 17 to 27
expectations. The Chief Executive is therefore
and clauses (b) to (i) of sub-regulation (2)
generally chosen from amongst the executive
of Regulation 46 of the Listing Regulations.
management of the Company.
The Statutory Auditors’ Certificate that the Company has
Non-Executive Chairman’s Office: Not applicable.
2.  complied with the conditions of Corporate Governance
Shareholder Rights: The quarterly, half-yearly
3.  is annexed to the ‘Report of the Board of Directors &
and annual financial results of the Company are Management Discussion and Analysis’, forming part
posted on the Company’s corporate website and of the Report and Accounts.

Notes:
1. Reference to Division / Divisional Business includes Strategic Business Unit (SBU), Business Vertical and Shared Services.
2. Reference to Divisional Management Committee includes SBU Management Committee, Shared Services Management Committee and Executive Committee for
Business Vertical.
3. Reference to Divisional Chief Executive includes Heads of SBU, Business Vertical and Shared Services.

The ITC Code of Conduct is derived from three interlinked

fundamental principles - good corporate governance,
good corporate citizenship and exemplary personal conduct.

26 ITC Limited REPORT AND ACCOUNTS 2022

 Report on Corporate Governance

ANNEXURE TO THE REPORT ON CORPORATE GOVERNANCE Ability to appreciate and critique the need for in-depth
specialisation across business critical areas such as
SKILLS, EXPERTISE AND COMPETENCIES OF DIRECTORS manufacturing, marketing, legal, information technology,
public advocacy etc., as well as the breadth of general
ITC believes that it is the collective effectiveness of the
management capabilities.
Board that impacts Company performance and therefore
members of the Board amongst themselves should have 4. Stakeholder Value Creation
a balance of skills, experience and diversity of perspectives Ability to understand processes for shareholder value
appropriate to the Company. creation and its contributory elements and critique
Given the Company’s size, scale and diversified nature of interventions towards value creation for the other
its businesses, the Directors should possess one or more stakeholders.
of the following skills, expertise and competencies: 5. Commercial Acumen
1. Organisational Purpose Commercial acumen to critique the Company’s financial
Ability to comprehend the socio-economic, political, performance and evaluate the Company’s strategies and
action plans in the context of their financial outcomes.
regulatory and competitive environment, both domestic
and global, in which the Company is operating and 6. Risk Management and Compliance
insight to identify opportunities and threats for the Ability to appreciate key risks impacting the Company’s
Company’s businesses. businesses and contribute towards development of
Ability to contribute towards creating an inspiring Vision systems and controls for risk mitigation & compliance
for the Company with superordinate societal goals and management and review and refine the same
appreciate the Company’s triple bottom line philosophy periodically.
of building synergy between serving the society and 7. Policy Evaluation
creating economic value for the Company.
Ability to comprehend the Company’s governance
2. Strategic Insight philosophy and contribute towards its refinement
Ability to evaluate competitive corporate and business periodically.
strategies and, based thereon, contribute towards Ability to evaluate policies, systems and processes
progressive refinement of the Company’s strategies in the context of the Company’s businesses, and review
for fulfilment of its goals. the same periodically.
Ability to comprehend strategy of organisation of a 8. Culture Building
diversified company like ITC, in the context of its Ability to contribute to the Board’s role towards promoting
unique sources of competitive advantage and assess an ethical organisational culture, eliminating conflict of
its strengths and weaknesses. interest, and setting & upholding the highest standards of
3. Organisational Capacity Building ethics, integrity and organisational conduct.
Acumen to evaluate organisational capacity and 9. Board Cohesion
readiness across relevant parameters and provide Ability to comprehend the statutory roles and
guidance on bridging gaps in capacity building. responsibilities of a Director and of the Board as a whole.
Ability to understand the talent market and the Ability to encourage and sustain a cohesive working
Company’s talent quotient so as to help finetune environment and to listen to multiple views and
strategies to attract, retain and nurture competitively thought processes and synergise a range of ideas for
superior talent. organisational benefit.

*******************

ITC Limited REPORT AND ACCOUNTS 2022 27

Shareholder Information
Details of Annual General Meeting (‘AGM’) as also on 31st March, 2022; the same position was
also reflected on SCORES, the web based complaint
Date Wednesday, 20th July, 2022
redressal system of SEBI.
Venue The AGM will be held on
The e-mail ID earmarked by the Company for investor
electronic platform
complaints is [email protected] .
Time 10.30 a.m.
Share Transfer System
Record Date Saturday, 28th May, 2022 During the financial year, no share transfers were

Dividend Payment Date Between Friday, 22nd July, 2022 effected by the Company. The Company has a
and Tuesday, 26th July, 2022 Share and Debenture Transfer Committee comprising
Messrs. R. Tandon, Executive Director, and R. K. Singhi,
Executive Vice President & Company Secretary.
Share Transfer Agent (in-house)
Mr. T. K. Ghosal, Deputy Secretary and Head of ISC,
The Investor Service Centre of the Company (‘ISC’),
is the Secretary to the Committee. He is also the
accredited with ISO 9001:2015 certification, is registered
Compliance Officer under the SEBI (Registrars to an
with the Securities and Exchange Board of India (‘SEBI’)
Issue and Share Transfer Agents) Regulations, 1993.
as Category II Share Transfer Agent for providing
in-house share registration and related services to the Dematerialisation of Shares and Liquidity
Shareholders and Investors. ISC continues to focus on The shares of the Company are available for trading
maintaining exemplary standards of investor servicing in the dematerialised form under both the Depository
and providing best-in-class services to the Shareholders
Systems in India - NSDL and CDSL. The International
and Investors of the Company, while ensuring
Securities Identification Number (‘ISIN’) allotted to the
compliance with the applicable statutory requirements.
Company’s shares under the Depository System is

Shareholder / Investor complaints INE154A01025.

The Company attends to Shareholder / Investor During the financial year, 199,26,12,121 shares of the
complaints within five working days, except where Company, covered in 1,169 requests and constituting
constrained by disputes or legal impediments. 16.17% of the Issued and Subscribed Share Capital

During the financial year, one complaint relating to of the Company, were dematerialised. The processing

delay in recording of Permanent Account Number activities with respect to requests received for

of a Shareholder was received and promptly resolved, dematerialisation were generally completed within

in terms of the Complaint Identification Policy of the five working days.

Company approved by the Securityholders Relationship The Company’s shares are amongst the most liquid and
Committee. actively traded shares on the Indian Stock Exchanges
National Stock Exchange of India Limited, BSE Limited and consistently rank among the top frequently traded
and The Calcutta Stock Exchange Limited have shares. The Company’s market capitalisation stood
confirmed that there were no investor complaints at ` 3,08,882 Crores (US$ 40.75 Billion) as on
pending against the Company at the end of each quarter 31st March, 2022.

28 ITC Limited REPORT AND ACCOUNTS 2022

 Shareholder Information

Distribution of Shareholding as on 31st March, 2022

No. of Shares No. of Shareholders No. of Shares
Slab
Physical Demat Total % Physical Demat Total %

1 – 5000 23,883 27,62,329 27,86,212 98.07 1,51,42,565 57,83,59,680 59,35,02,245 4.82

5001 – 10000 1,601 23,233 24,834 0.87 1,19,72,260 17,02,15,962 18,21,88,222 1.48

10001 – 20000 1,009 13,369 14,378 0.51 1,36,36,455 18,91,47,133 20,27,83,588 1.65

20001 – 30000 441 5,407 5,848 0.21 1,08,89,814 13,37,12,266 14,46,02,080 1.17

30001 – 40000 142 2,328 2,470 0.09 48,57,555 8,08,15,024 8,56,72,579 0.69

40001 – 50000 99 1,619 1,718 0.06 44,31,225 7,33,24,711 7,77,55,936 0.63

50001 – 100000 175 2,828 3,003 0.10 1,22,92,755 19,88,13,079 21,11,05,834 1.71

100001 and above 77 2,424 2,501 0.09 1,64,93,08,880 9,17,63,36,567 10,82,56,45,447 87.85

Total 27,427 28,13,537 28,40,964 100.00 1,72,25,31,509 10,60,07,24,422 12,32,32,55,931 100.00

Categories of Shareholders as on 31st March, 2022

0.86%
1.22% 0.12%

Financial Institutions, Insurance Companies, Mutual

Funds, Banks and Others - 5,26,47,23,797 shares

11.98% Foreign Companies - 3,61,99,44,662 shares

Public and Others - 1,69,24,98,721 shares

13.73% Foreign Portfolio Investors and Foreign Institutional

42.72%
Investors - 1,47,58,89,827 shares

Bodies Corporate - 15,02,27,387 shares

NRIs and Foreign Nationals - 10,54,79,512 shares

29.37%
Shares underlying Global Depository Receipts -
1,44,92,025 shares

Global Depository Receipts

Pursuant to the offer of Global Depository Receipts (‘GDRs’) made in 1993 by the Company, 1,44,92,025 GDRs,
representing 1,44,92,025 underlying shares i.e. 0.12% of the Issued and Subscribed Share Capital of the Company, were
outstanding as on 31st March, 2022.

The Company’s GDRs are listed on the Luxembourg Stock Exchange (Code: 004660919), 35A Boulevard Joseph II,
L-1840, Luxembourg.

ITC Limited REPORT AND ACCOUNTS 2022 29

Shareholder Information

Listing of Shares on Stock Exchanges with Stock Code

Stock Exchange Stock Code
National Stock Exchange of India Limited (‘NSE’) ITC
Exchange Plaza, Plot No. C/1, Block G
Bandra Kurla Complex, Bandra (E)
Mumbai 400 051
Telephone nos. : 022-2659 8100 / 14
Facsimile no. : 022-2659 8120
e-mail : [email protected]
Website : www.nseindia.com
BSE Limited (‘BSE’) 500875
Phiroze Jeejeebhoy Towers, Dalal Street
Mumbai 400 001
Telephone nos. : 022-2272 1233 / 34
Facsimile no. : 022-2272 1919
e-mail : [email protected]
Website : www.bseindia.com
The Calcutta Stock Exchange Limited (‘CSE’) 10000018
7, Lyons Range
Kolkata 700 001
Telephone no. : 033-4025 3000
Facsimile no. : 033-4025 3030
e-mail : [email protected]
Website : www.cse-india.com

Stock Exchange Reuters Code Bloomberg

NSE ITC.NS ITC IS
BSE ITC.BO ITC IB

The Listing Fees for the financial year 2022-23 have been paid to NSE, BSE and CSE. The Listing Fee for the
calendar year 2022 has also been paid to the Luxembourg Stock Exchange (‘LSE’).

Monthly High and Low Quotes and Volume of Shares traded on NSE & BSE and GDRs on LSE
NSE BSE LSE

Year & Month High Low Volume High Low Volume High Low Volume
in 000’s in 000’s in 000’s
(`) (`) (Nos.) (`) (`) (Nos.) (US$) (US$) (Nos.)
2021 APRIL 220.60 200.55 3,70,957 220.55 200.75 17,693 N.A. N.A. Nil
MAY 217.90 199.10 5,49,123 217.95 199.10 29,928 N.A. N.A. Nil
JUNE 219.40 202.40 5,69,502 219.35 202.45 34,933 2.96 2.72 6
JULY 215.35 200.90 4,17,075 215.80 200.85 41,736 2.86 2.70 9
AUGUST 217.15 204.35 3,55,801 217.15 204.50 21,574 N.A. N.A. Nil
SEPTEMBER 245.80 209.00 7,06,565 245.80 209.00 42,193 3.30 2.70 6
OCTOBER 265.30 222.30 6,24,792 265.30 222.25 40,926 N.A. N.A. Nil
NOVEMBER 245.25 220.00 3,94,693 245.25 220.05 24,250 N.A. N.A. Nil
DECEMBER 238.95 209.80 4,57,398 239.65 209.85 31,047 N.A. N.A. Nil
2022 JANUARY 227.30 209.55 2,66,190 227.30 209.60 16,530 N.A. N.A. Nil
FEBRUARY 238.50 207.00 4,66,266 238.50 207.00 20,680 N.A. N.A. Nil
MARCH 258.00 212.45 6,99,287 258.00 212.75 36,970 N.A. N.A. Nil

There was no trading in the Company’s shares on CSE during the financial year 2021-22.

30 ITC Limited REPORT AND ACCOUNTS 2022

 Shareholder Information

ITC Share Price vis-à-vis Nifty 50

275 18000

250 17000
ITC Share Price (`)

Nifty 50
225 16000

200 15000

175 14000
Apr-21

May-21

Jun-21

Jul-21

Aug-21

Sep-21

Oct-21

Nov-21

Dec-21

Jan-22

Feb-22

Mar-22
ITC Share Price Nifty 50

Note: Indicates monthly closing positions.

ITC Share Price and Volume traded on NSE

275 800000

Volume Traded (’000 Shares)

250 650000
ITC Share Price (`)

225 500000

200 350000

175 200000
Apr-21

May-21

Jun-21

Jul-21

Aug-21

Sep-21

Oct-21

Nov-21

Dec-21

Jan-22

Feb-22

Mar-22

Highest Lowest Volume Traded

Note: Indicates monthly high & low share price and volume.

ITC Limited REPORT AND ACCOUNTS 2022 31

Shareholder Information

Dividend History (Last 10 years)

As one of India’s foremost private sector companies, the Company has performed consistently for over a century and has
rewarded Shareholders since inception with uninterrupted dividends.

Financial Year Dividend per Share Dividend Dividend Total Dividend

(`) (` in Crores) Distribution Tax including Dividend
(` in Crores) Distribution Tax,
where applicable
(` in Crores)
2021-22 11.50 * 14,171.55 N.A. 14,171.55
2020-21 @
10.75 13,230.31 N.A. 13,230.31
2019-20 10.15 12,476.63 N.A. 12,476.63
2018-19 5.75 7,048.71 1,448.88 8,497.59
2017-18 5.15 6,285.21 1,291.94 7,577.15
2016-17 #
4.75 5,770.01 1,174.64 6,944.65
2015-16 8.50 ^ 6,840.13 1,392.48 8,232.61
2014-15 6.25 5,009.71 1,019.86 6,029.57
2013-14 6.00 4,771.91 810.99 5,582.90
2012-13 5.25 4,148.46 705.03 4,853.49

* Includes (i) Final Dividend of ` 6.25 per share (aggregating ` 7,702.07 Crores) which is subject to the approval of the Shareholders, and
(ii) Interim Dividend of ` 5.25 per share (aggregating ` 6,469.48 Crores) declared by the Board of Directors of the Company on 3rd February, 2022.
@ Includes Interim Dividend of ` 5.00 per share.
# On expanded Share Capital arising out of Bonus Shares issued in the ratio of 1:2.
^ Includes Special Dividend of ` 2.00 per share.

Financial Calendar
Financial Year 2022-23
(1st April - 31st March)
1 First Quarter Results July / August 2022
2 Second Quarter and Half-Year Results October / November 2022
3 Third Quarter Results January / February 2023
4 Fourth Quarter and Annual Results May 2023

Particulars of past three AGMs

AGM Financial Year Venue Date Time Special Resolution passed

110th 2020-21 11/08/2021 –

The AGM was
held on 10.30 a.m. • Re-appointment of Ms. N. Rao as
109th 2019-20 electronic platform 04/09/2020 Independent Director with effect from
8th April, 2021.

Science City • Re-appointment of Mr. A. Duggal,

JBS Haldane Avenue Mr. S. B. Mathur and Ms. M. Shankar as
108th 2018-19 12/07/2019 10.00 a.m.
Kolkata 700 046 Independent Directors with effect from
15th September, 2019.

32 ITC Limited REPORT AND ACCOUNTS 2022

 Shareholder Information

Postal Ballot through E-voting

During the financial year, the resolutions for appointment of Messrs. Mukesh Gupta, Sunil Panray and Navneet Doda
as Non-Executive Directors, and Mr. Hemant Bhargava as an Independent Director of the Company were passed
by the Shareholders by requisite majority by way of postal ballot through e-voting. Brief details pertaining to the said
postal ballot are provided below:
• The Board of Directors of the Company appointed Mr. R. L. Auddy, Senior Solicitor and Partner, Messrs. Sandersons
& Morgans, Advocates & Solicitors, as the Scrutinizer for scrutinizing the postal ballot through e-voting;
• Despatch of the Postal Ballot Notice dated 27th October, 2021, along with the Explanatory Statement, to the
Shareholders of the Company was completed on 15th November, 2021;
• E-voting commenced on 16th November, 2021 and ended on 15th December, 2021;
• Based on the Scrutinizer’s Report, the results of the postal ballot through e-voting were declared on
16th December, 2021, as follows:

Votes in favour of the Resolution Votes against the Resolution

Ordinary Resolution No. of Shares % of votes to total No. of Shares % of votes to total
for which valid number of valid for which valid number of valid
votes cast votes cast votes cast votes cast
Appointment of Mr. Mukesh Gupta as a 959,15,10,553 95.71 42,98,78,709 4.29
Non-Executive Director of the Company
for a period of three years with effect from
20th December, 2021
Appointment of Mr. Sunil Panray as a 960,86,47,635 95.88 41,26,49,009 4.12
Non-Executive Director of the Company
for a period of three years with effect from
20th December, 2021
Appointment of Mr. Navneet Doda as a 957,00,52,979 95.50 45,12,14,652 4.50
Non-Executive Director of the Company
for a period of three years with effect from
20th December,
Plant Locations 2021
Appointment of Mr. Hemant Bhargava as an 978,79,14,924 97.37 26,48,83,891 2.63
Independent Director of the Company for
a period of five years with effect from
20th December, 2021
No special resolution is proposed to be passed by postal ballot.

Plant Locations
Saharanpur
CIGARETTE FACTORIES PACKAGING & PRINTING FACTORIES
5. Sardar Patel Marg
Bengaluru Saharanpur Chennai
1. Meenakunte Village Uttar Pradesh 247 001 1. Tiruvottiyur
Jala Hobli Chennai
Bengaluru North Taluk Tamil Nadu 600 019
GREEN LEAF THRESHING PLANTS
Karnataka 562 157 Haridwar
Anaparti 2. Plot No. 1, Sector - 11
Kolkata 1. Anaparti Integrated Industrial Estate, Haridwar
2. 93/1, Karl Marx Sarani District East Godavari Uttarakhand 249 403
Kolkata Andhra Pradesh 533 342
West Bengal 700 043 Munger
Chirala 3. Basdeopur P.O.
Munger 2. Chirala District Munger
3. Basdeopur P.O. District Bapatla Bihar 811 202
District Munger Andhra Pradesh 523 157
Bihar 811 202 PAPER & PAPERBOARD MILLS
Nanjangud
Pune 3. Thandya Industrial Area Bollaram
4. Plot No. B - 27, MIDC Immavu & Adakanahalli Villages 1. Anrich Industrial Estate
Ranjangaon, Taluka Shirur Nanjangud Taluk Bollaram Municipality, Jinnaram Mandal
District Pune District Mysuru District Sangareddy
Maharashtra 412 220 Karnataka 571 302 Telangana 502 325

ITC Limited REPORT AND ACCOUNTS 2022 33

Shareholder Information

Sarapaka Pune 5. Welcomhotel Bengaluru

2. Sarapaka Village 13. Plot No. D - 1, MIDC 46, Richmond Road, Bengaluru
Burgampahad Mandal Ranjangaon, Taluka Shirur Karnataka 560 025
District Bhadradri Kothagudem District Pune
Bhubaneswar
Telangana 507 128 Maharashtra 412 220
6. Welcomhotel Bhubaneswar
Thekkampatty Reengus D/1, Mz. Dumuduma, District Khordha
3. Thekkampatty Village 14. F-122 & F-126 Bhubaneswar
Vivekanandapuram Post Shree Khatu Shyam Industrial Area Odisha 751 019
Mettupalayam Taluk, District Coimbatore Reengus, District Sikar
Rajasthan 332 404 Chennai
Tamil Nadu 641 113
7. ITC Grand Chola
Tribeni Sankrail 63, Mount Road, Guindy
4. Village & Post Chandrahati 15. F-21, Sudharas Food Park Chennai
District Hooghly Kandua Gram Panchayat Tamil Nadu 600 032
West Bengal 712 504 P.S. Sankrail, Howrah
West Bengal 711 302 8. Welcomhotel Chennai
Cathedral Road, Chennai
FOODS FACTORIES Uluberia Tamil Nadu 600 086
16. Mouza Amraberia, J. L. No. 8
Agra P.S. Uluberia, District Howrah Coimbatore
1. 13.2 Km. Stone, Shamshabad Road West Bengal 711 303 9. Welcomhotel Coimbatore
Village - Naufri 1266/14, West Club Road
Post Shyamo, Agra Race Course Area, Coimbatore
Uttar Pradesh 283 125 PERSONAL CARE PRODUCTS FACTORIES
Tamil Nadu 641 018
Haridwar
Bikaner Goa
1. Plot No. 1, Sector - 11
2. Plot No. F-16 10. ITC Grand Goa Resort & Spa
Integrated Industrial Estate, Haridwar
Bichhawal Industrial Area Arossim Beach Road, Cansaulim
Uttarakhand 249 403
Phase II, Bikaner Goa 403 712
Rajasthan 334 006 Kamrup
2. NH - 37, Bortejpur Guntur
Haridwar 11. Welcomhotel Guntur
Mouza Rampur, Kukurmara, District Kamrup
3. Plot No. 1, Sector - 11 4-5-10 Vidyanagar Ring Road, Guntur
Assam 781 134
Integrated Industrial Estate Andhra Pradesh 522 007
Haridwar Manpura
Uttarakhand 249 403 3. Village Manpura Hyderabad
Tehsil Baddi, District Solan 12. ITC Kohenur
Jaitpura Himachal Pradesh 174 101 Plot No. 5, Hyderabad Knowledge City
4. Plot Nos. F-170-171 & G-172-173 Madhapur, Hyderabad
Jaitpura Industrial Area, Jaipur Telangana 500 081
PLANTS UNDER CONSTRUCTION
Rajasthan 303 704
Guntur Jaipur
Kamrup 13. ITC Rajputana
1. Spices Processing Facility
5. NH - 37, Bortejpur Palace Road, Jaipur
Plot Nos. 1, 2 & 2A, Spices Park
Mouza Rampur Rajasthan 302 006
Mydavolu Village, Edlapadu Mandal
Kukurmara, District Kamrup
District Guntur Kolkata
Assam 781 134
Andhra Pradesh 522 233 14. ITC Sonar
Kapurthala Khordha 1, JBS Haldane Avenue
6. Plot Nos. A-1-A & A-1-B 2. Integrated Consumer Goods Kolkata
Integrated Mixed Use Industrial Park Manufacturing and Logistics Facility West Bengal 700 046
Village Jhalthikriwal, District Kapurthala IDCO Plot No. 4, Kholadwara Industrial Area
Punjab 144 601 15. ITC Royal Bengal
District Khordha 1, JBS Haldane Avenue
Malur Odisha 752 050 Kolkata
7. Survey Nos. 15/1 & 15/2 Nadiad West Bengal 700 046
Madivala Gram Panchayat 3. Printing and Packaging Facility
Yeshwanthpura Village, District Kolar Mumbai
Survey Nos. 121, 122, 123, 123P1, 124, 16. ITC Maratha
Karnataka 563 130 130, 131, 132P, 146, 147, 155 & 157P Sahar, Mumbai
Medak Village Silod, Taluka Nadiad Maharashtra 400 099
8. 395-412, 416, 417, 447, 449-451 Memdabad - Nadiad Road, District Kheda
Gujarat 387 320 17. ITC Grand Central
Next to TSTransco Sub-station
287, Dr. B. Ambedkar Road
Manoharabad, Medak
HOTELS Parel, Mumbai
Telangana 502 336
Maharashtra 400 012
Munger Owned Hotels
New Delhi
9. Sitakund Industrial Area Agra 18. ITC Maurya
Village Nandlalpur, District Munger 1. ITC Mughal Sardar Patel Marg, Diplomatic Enclave
Bihar 811 202 Taj Ganj, Agra New Delhi 110 021
Nanjangud Uttar Pradesh 282 001
19. Sheraton New Delhi
10. Survey No. 77/3 Amritsar District Centre, Saket
Thandya Industrial Area 2. Welcomhotel Amritsar New Delhi 110 017
Immavu & Adakanahalli Villages Raja Sansi, Ajnala Road
Nanjangud Taluk, District Mysuru Amritsar Licenced Hotels
Karnataka 571 302 Punjab 143 101
Ahmedabad
Panchla Bengaluru 20. Fortune Park, Ahmedabad
11. Mouza Kulai, J. L. No. 26 3. ITC Gardenia Ellis Bridge, Ahmedabad
P.S. Panchla, District Howrah 1, Residency Road, Bengaluru Gujarat 380 006
West Bengal 711 322 Karnataka 560 025
Gurugram
Pudukkottai 4. ITC Windsor 21. ITC Grand Bharat
12. Vadugapatti & Velur Villages 25, Windsor Square P.O. Hasanpur, Tauru
Taluk Illupur, District Pudukkottai Golf Course Road, Bengaluru District Mewat, Gurugram
Tamil Nadu 621 316 Karnataka 560 052 Haryana 122 105

34 ITC Limited REPORT AND ACCOUNTS 2022

 Shareholder Information

Kota Pahalgam Itarsi

22. WelcomHeritage Umed Bhawan Palace 37. Welcomhotel Pine-n-Peak 11. Survey Nos. 309/1, 310/2 & 310/3
Palace Road, Kota Aru Road, Near Amusement Park Patwari Halka No. 11, Village Raisalpur
Rajasthan 324 001 Pahalgam Tehsil Itarsi, District Hoshangabad
Jammu & Kashmir 192 126 Madhya Pradesh 461 111
Port Blair
23. Welcomhotel Bay Island Panchkula Jagdishpur
Marine Hill, Port Blair 38. Welcomhotel Bella Vista 12. Khasra Nos. 2377-2380
Andaman & Nicobar Islands 744 101 SM - 8, City Center, Sector - 5, Panchkula Village Kathura, Pargana Jagdishpur
Haryana 134 109 Tehsil Musafirkhana, District Amethi
Vadodara
Visakhapatnam Uttar Pradesh 227 817
24. Welcomhotel Vadodara
R. C. Dutt Road, Alkapuri 39. Welcomhotel Devee Grand Bay Mandsaur
Vadodara Beach Road, Visakhapatnam 13. Survey Nos. 30-33
Gujarat 390 007 Andhra Pradesh 530 002 Patwari Halka No. 14, Village Azizkhedi
Tehsil & District Mandsaur
Hotels under Operating Services HOTEL UNDER CONSTRUCTION Madhya Pradesh 458 001
Ahmedabad Ahmedabad Mhow
25. Welcomhotel Ahmedabad ITC Narmada 14. Survey Nos. 188/2, 189/1, 189/2, 189/4,
15 Ashram Road, Dandi Kuch Circle 902, Shivalik High Street Building 190/1,191 & 192/2
Ahmedabad Vastrapur, Ahmedabad Patwari Halka No. 20
Gujarat 380 013 Gujarat 380 015 Village Gawli Palasia, Vikaskhand Mhow
Aurangabad Tehsil Mhow, District Indore
26. Welcomhotel Rama International CHOUPAL SAAGARS – Madhya Pradesh 453 441
R - 3, Chikalthana, Jalna Road RURAL SERVICES CENTRES
Nagda
Aurangabad Amravati 15. Khasra Nos. 1393 (Part), 1394 (Part),
Maharashtra 431 003 1. Patwari Halka No. 48 1396/1 & 1397/1
Mouza Devlgaon, Pargane Nandgaon Peth Patwari Halka No. 18, Village Padliya Kala
Chail
Taluka & District Amravati Tehsil Nagda, District Ujjain
27. Welcomhotel By ITC Hotels
Maharashtra 444 602 Madhya Pradesh 456 335
Tavleen Chail, Bhalawag Forest
Kandaghat-Chail-Kufri Road Badaun
Parbhani
Near Janedghat, Shimla 2. Arazi Nos. 10 & 12/3 (Part)
16. Gate No. 803
Himachal Pradesh 173 217 Village Khunak, Tehsil & District Badaun
Near Water Filter Plant, Village Assola
Uttar Pradesh 243 601
Chennai Vasmat Road, Taluka & District Parbhani
28. Welcomhotel GST Road Chennai Bahraich Maharashtra 431 401
1, GST Road, SP Koil 3. Khasra Nos. 475-476, 477 (Part),
496-kha (Part), 497, 498 (Part), Pilibhit
Maraimalai Nagar
500-Mi, 501-505, 507 & 509 17. Khasra No. 261
Tamil Nadu 603 204
Village Mohammad Nagar Village Sandiya Mustakil
Hyderabad Tehsil, Pargana & District Bahraich Tehsil, Pargana & District Pilibhit
29. ITC Kakatiya Uttar Pradesh 271 801 Uttar Pradesh 262 001
6-3-1187, Begumpet
Chandouli Ratlam
Hyderabad
4. Khasra Nos. 57-62 & 641 18. Survey Nos. 107/1-107/3
Telangana 500 016
Village Muhabatpur, Ganj Khwaja R. I. Circle No. 5, Moondri
Jodhpur Pargana Dhoos, Tehsil Mughal Sarai Patwari Halka No. 31
30. Welcomhotel Jodhpur District Chandouli Village Kharakhedi, Tehsil & District Ratlam
Khasra No. 53, Uchiyarda Village, Jodhpur Uttar Pradesh 232 104 Madhya Pradesh 457 001
Rajasthan 342 027
Chindwara Sehore
Katra 5. Survey Nos. 16/1-16/2 & 16/4-16/7 19. Khasra Nos. 208-209
31. Welcomhotel By ITC Hotels Settlement No. 7 Patwari Halka No. 36
9 Shrine View, SMVD Chowk Patwari Halka No. 34, R. I. Circle Village Rafiqganj, Tehsil & District Sehore
Katra, Reasi Village Imaliya Bohata, Chindwara - I Madhya Pradesh 466 001
Jammu & Kashmir 182 301 Tehsil & District Chindwara
Madhya Pradesh 480 001 Ujjain
Khimsar 20. Survey Nos. 433/3, 456 & 458
32. Welcomhotel Khimsar Fort & Dunes Dewas R. I. Circle No. 2, Patwari Halka No. 19
P.O. Khimsar, District Nagaur 6. Survey Nos. 294/2 & 295 Village Kamed, Tehsil Ghattia, District Ujjain
Rajasthan 341 025 Patwari Halka No. 26 Madhya Pradesh 456 001
Village Lohar Pipliya, Tehsil & District Dewas
Mamallapuram Madhya Pradesh 455 001 Vidisha
33. Welcomhotel Kences Palm Beach 21. New Revenue Survey Nos. 18 & 18/2
Dhar
No. 53, Devaneri Village, East Coast Road Patwari Halka Nos. 35 & 45
7. Survey No. 438, Patwari Halka No. 13
District Kanchipuram, Mamallapuram Village Bais, Tehsil & District Vidisha
Village Jaitpura, Tehsil & District Dhar
Tamil Nadu 603 104 Madhya Pradesh 464 001
Madhya Pradesh 454 001
Mashobra Gonda Wardha
34. Welcomhotel Shimla 8. Arazi Nos. 420 (Part), 421-424, 427-428, 22. Survey Nos. 151/1 & 151/4
Village Patengali (Tarapur) 431, 433-434, 442-446, 447 (Part), Wardha - Hinghaghat Road, Inzapur
P.O. Mashobra, Shimla 448 (Part), 450-456, 456 (kha) & 457 (Part) Taluka & District Wardha
Himachal Pradesh 171 007 Village Haripur, Tehsil & District Gonda Maharashtra 442 001
Mussoorie Uttar Pradesh 271 001 Washim
35. Welcomhotel The Savoy Hardoi 23. Survey No. 104
Library Bazar, Gandhi Chowk 9. Arazi Nos. 658 & 659 Patwari Halka No. 10
P.O. Savoy, Mussoorie Village Korriyan, Pargana Gopamau Mouza Zakalwadi, Taluka & District Washim
Uttarakhand 248 179 Tehsil & District Hardoi Maharashtra 444 505
New Delhi Uttar Pradesh 241 001 Yavatmal
36. Welcomhotel Dwarka Hathras 24. Bhumapan # 15/2A
Plot No. 3, Sector - 10 10. Khasra No. 21, Village Srinagar Village Parwa, Pandharkoda Road
District Centre, Dwarka Tehsil Sasni, District Hathras Taluka & District Yavatmal
New Delhi 110 075 Uttar Pradesh 204 216 Maharashtra 445 001

ITC Limited REPORT AND ACCOUNTS 2022 35

Shareholder Referencer
Service of Documents
The Company sends Notices, Report and Accounts and other communications in electronic mode to those Shareholders
who have registered their e-mail addresses with the Company or with the Depositories, and in physical mode to the other
Shareholders.
However, in conformity with the applicable regulatory requirements, the Notice of the 111th Annual General Meeting of the
Company and the Report and Accounts 2022 are being sent this year only through electronic mode to those Shareholders
who have registered their e-mail addresses with the Company or with the Depositories.
Shareholders who wish to register their e-mail addresses with the Company are requested to register the same at
https://eform.itcportal.com . Alternatively, Shareholders may send a letter requesting for registration of their
e-mail addresses, mentioning their name and DP ID & Client ID / folio number, through e-mail to [email protected] or
by post to the Investor Service Centre of the Company (‘ISC’) at 37 Jawaharlal Nehru Road, Kolkata 700 071.
KYC details of Shareholders holding shares in the certificate form
Shareholders holding shares in the certificate form are required to mandatorily furnish their Permanent Account Number (PAN),
specimen signature, and details of their bank account, nomination, complete postal address including pin code,
mobile number & e-mail address to the Company. Shareholders are also required to link their PAN with the Aadhaar Number
by 31st March, 2023, failing which their PAN will be made inoperative by the Income-tax authorities.
Shareholders who are yet to provide any of the aforesaid information to the Company or who would like to advise any
change in such information may use the prescribed forms for this purpose, which may be accessed on the Company’s
corporate website at https://www.itcportal.com/mandatory-furnishing , or can be furnished by ISC on request.
In the absence of the aforesaid information, any service request from the Shareholders such as sub-division / consolidation /
renewal of share certificates, issue of duplicate share certificates, change of address or bank particulars etc., will not be
processed.
Dividend
The Company provides the facility for remittance of dividend to Shareholders through RTGS (‘Real Time Gross Settlement’) /
NACH (‘National Automated Clearing House’) / NEFT (‘National Electronic Funds Transfer’).
Shareholders who have not opted for remittance of dividend through electronic mode and wish to avail the same, are
required to provide their bank details, including IFSC (‘Indian Financial System Code’) and MICR (‘Magnetic Ink Character
Recognition’), to their respective Depository Participants (‘DPs’), in case shares are held in the dematerialised form, or to the
ISC, where shares are held in the certificate form. Shareholders holding shares in the certificate form may use the prescribed
form for this purpose, which may be accessed on the Company’s corporate website at https://www.itcportal.com/form ,
or can be furnished by ISC on request.
Pursuant to the Income-tax Act, 1961, dividend income is taxable in the hands of the Shareholders and the Company is
required to deduct tax at source from such dividend at the prescribed rates. A communication providing detailed
information & instructions with respect to tax on the Final Dividend for the financial year ended 31st March, 2022 is being
sent separately to the Shareholders.
Transfer of unclaimed dividend and shares to the Investor Education and Protection Fund
During the financial year 2021-22, unclaimed dividend for the financial year 2013-14 aggregating ` 16,89,96,246/- and
11,66,491 shares in respect of which dividend entitlements remained unclaimed for seven consecutive years, were
transferred by the Company to the Investor Education and Protection Fund established by the Central Government (‘IEPF’),
pursuant to the provisions of Section 124 of the Companies Act, 2013 read with the Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
Shareholders may claim their unclaimed dividend for the years prior to and including the financial year 2013-14 and the
shares from the IEPF Authority by applying in the prescribed Form No. IEPF-5. This Form can be downloaded from the
website of the IEPF Authority at https://www.iepf.gov.in/IEPF/corporates.html .
The due dates for transfer of unclaimed dividend and the shares to the IEPF for the subsequent financial years are given in
the table below. Attention in particular is drawn that the unclaimed dividend for the financial year 2014-15 and the shares
in respect of which dividend entitlements remain unclaimed for seven consecutive years will be due for transfer to the IEPF
on 5th September, 2022, for which purpose communication has been sent to the concerned Shareholders advising them
to write to ISC to claim their dividend. Notices in this regard have also been published in the newspapers. Details of such
unclaimed dividend and shares are available on the Company’s corporate website at http://info-dividend-shares.itcportal.com/
popup_new.aspx and http://info-dividend-shares.itcportal.com/popupiepf.aspx , respectively.

36 ITC Limited REPORT AND ACCOUNTS 2022

 Shareholder Referencer

Transfer of unclaimed dividend and shares to the Investor Education and Protection Fund (Contd.)
Financial Dividend Date of Total Dividend Unclaimed Dividend Due date for
Year Identification declaration (`) as on 31/03/2022 transfer of dividend and
No. of Dividend shares to IEPF
(`) %
2014-15 85th 31st July, 2015 50,09,70,66,528 18,04,16,645 0.36 5th September, 2022 *
2015-16 86th 22nd July, 2016 68,40,13,10,170 28,55,50,050 0.42 27th August, 2023
2016-17 87th 28th July, 2017 57,70,01,46,310 26,31,36,413 0.46 2nd September, 2024
2017-18 88th 27th July, 2018 62,85,22,11,487 26,94,31,950 0.43 27th August, 2025
2018-19 89th 12th July, 2019 70,48,72,63,716 23,76,91,028 0.34 12th August, 2026
2019-20 90th 4th September, 2020 1,24,76,63,21,288 37,05,22,349 0.30 5th October, 2027
Interim Dividend 11th February, 2021 61,52,68,08,755 19,68,06,732 0.32 15th March, 2028
2020-21 91st 11th August, 2021 70,77,62,73,691 22,75,40,337 0.32 13th September, 2028
(Final Dividend)
2021-22 Interim Dividend 3rd February, 2022 64,69,47,59,808 18,80,78,093 0.29 7th March, 2029
* ISC will not be able to entertain any claim received after 2nd September, 2022.
Unclaimed Shares
The status of unclaimed shares of the Company transferred to the demat account, ‘ITC Limited - Unclaimed Suspense
Account’, in accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is as follows:
Particulars No. of No. of
Shareholders Shares
Aggregate number of Shareholders and outstanding shares held in the Unclaimed Suspense Account as 6,657 66,82,680
on 1st April, 2021
Number of Shareholders who approached the Company during the year for transfer of shares from the 72 2,25,017
Unclaimed Suspense Account
Number of Shareholders to whom shares were transferred from the Unclaimed Suspense Account upon 51 2,55,300
receipt and verification of necessary documents
Number of shares in respect of which dividend entitlements remained unclaimed for seven consecutive 47 81,195
years and transferred from the Unclaimed Suspense Account to the IEPF
Aggregate number of Shareholders and outstanding shares held in the Unclaimed Suspense Account as 6,606 63,46,185 *
on 31st March, 2022
* Voting rights in respect of these shares will remain frozen till the time such shares are transferred from the Unclaimed Suspense Account to the
concerned Shareholders.
Depository Services
Shareholders may write to the respective Depository or to ISC for guidance on depository services. The contact details of the
Depositories are given below:
National Securities Depository Limited Central Depository Services (India) Limited
Trade World, ‘A’ Wing, 4th Floor Marathon Futurex, ‘A’ Wing, 25th Floor
Kamala Mills Compound Mafatlal Mills Compound
Senapati Bapat Marg, Lower Parel N. M. Joshi Marg, Lower Parel
Mumbai 400 013 Mumbai 400 013
Telephone no. : 022-2499 4200 Telephone no. : 022-2302 3333
Facsimile no. : 022-2497 6351 Facsimile no. : 022-2300 2035
e-mail : [email protected] e-mail : [email protected]
Website : www.nsdl.co.in Website : www.cdslindia.com
Address for Correspondence with ISC
Investor Service Centre
ITC Limited
37 Jawaharlal Nehru Road
Kolkata 700 071
Telephone nos. : 1800-345-8152 (toll free), 033-2288 6426 / 0034
Facsimile no. : 033-2288 2358
e-mail : [email protected]
Website : www.itcportal.com
Shareholders holding shares in the dematerialised form should address their correspondence to the respective DPs, other
than for dividend and Report and Accounts, which should be addressed to ISC.
Shareholders are requested to provide their DP ID & Client ID / folio numbers, e-mail addresses and contact numbers to
facilitate prompt and efficient investor servicing.
*****************
ITC Limited REPORT AND ACCOUNTS 2022 37
Report of the Board of Directors
&
Management Discussion and Analysis
For the Financial Year Ended 31st March, 2022

SOCIO-ECONOMIC ENVIRONMENT Economies, including the United States and certain

European countries, inflation has reached
After a tumultuous 2020, which witnessed
multi-decadal highs. In Emerging Markets & Developing
unprecedented disruption to human life and
Economies, rise in food and fuel prices poses
economic activity across the globe, the world
significant risk to growth prospects. Consequently,
economy witnessed a sharp recovery on the back
central banks, the world over, are increasingly pivoting
of enhanced vaccination coverage and continued
from supporting growth to combating inflation.
fiscal and monetary stimuli across countries. As per
IMF estimates, global growth in 2021 stood at 6.1% According to the latest IMF estimates, aggregate
(Vs. 3.1% decline in 2020); Advanced Economies global economic growth is estimated at 3.6% in 2022,
grew by 5.2% (Vs. 4.5% decline in 2020) while representing a downward adjustment of 80 bps to
Emerging Markets & Developing Economies clocked earlier estimates. Advanced Economies are projected
to grow by 3.3% with growth in major economies
a faster pace of 6.8% (Vs. 2.0% decline in 2020).
such as the United States and Euro Area estimated
The recovery momentum was, however, weakened
at 3.7% and 2.8% respectively. Emerging Market &
in course of the year by new strains of the virus and
Developing Economies are estimated to grow by
an unprecedented spike in commodity prices due to
3.8%, impacted by muted growth in China and sharp
global supply chain disruptions, container shortages
decline in Russia. The amalgam of recent events,
and congestion in ports.
including the latest surge in COVID cases in certain
Even prior to the ongoing Russia-Ukraine conflict, regions, continued geopolitical tensions, inflationary
inflation had started surging in many economies due headwinds on the back of commodity super cycles &
to soaring commodity prices and pandemic-induced ‘greenflation’, and extended supply chain disruptions,
supply-demand imbalances. This led central banks pose significant downside risks to global economic
such as the US Federal Reserve, European Central prospects in the year ahead.
Bank and the Bank of England to bring forward the FY 2021-22 turned out to be another challenging
timing of tightening monetary conditions in their year for the Indian economy, marked by heightened
respective countries. The situation was exacerbated uncertainty and volatility due to the COVID pandemic.
with the ongoing Russia-Ukraine conflict that caused The year began with the second wave of the pandemic
sharp escalation and volatility in agri, fuel and having a devastating socio-economic impact in the
crude-linked commodity prices. Persistently elevated country followed by a sharp drop in its intensity, which
and sticky inflation has emerged as a key concern aided smart recovery in economic activity that reached
globally. As per IMF, global inflation in 2022 is projected pre-pandemic levels towards the end of the second
at 7.4% - the highest in 26 years. In some Advanced quarter. Even as economic prospects started looking

FY 2021-22 turned out to be another challenging year for the Indian economy,
marked by heightened uncertainty and volatility due to the COVID pandemic.
The Government of India continued to make concerted efforts, through several
path-breaking initiatives across the areas of healthcare, infrastructure, social welfare
and digital, to support various sections of the economy during these turbulent times
which helped accelerate the pace of resumption of economic activities over the year.

38 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

up, the country was hit hard by the third wave with improvement although signs of an incipient revival
new cases rising exponentially across major cities emerged in certain sectors. Unprecedented rise in
and halting the recovery momentum. Just as the third commodity and crude oil prices led to persistently
wave had abated in India, geopolitical tensions in sticky and elevated inflation with March 2022 CPI
Europe sparked off a fresh round of uncertainty in the hitting a 17-month high of 6.95%, resetting inflation
operating environment. expectations and the interest rate trajectory going
forward.
Amidst such a challenging backdrop, the Indian
economy rebounded during the year growing by Up until January 2022, near-term prospects for the
8.9%, albeit on a low base. The Government of Indian economy seemed extremely promising – with
India continued to make concerted efforts, through all sectors of the economy, including the contact-
several path-breaking initiatives across the areas of intensive service sector, having made steady
healthcare, infrastructure, social welfare and digital, recovery. However, sustained inflationary headwinds
and outbreak of the Russia-Ukraine conflict leading
to support various sections of the economy during
to extended global disruptions and spiraling of
these turbulent times which helped accelerate the
commodity prices have led to downward revisions to
pace of resumption of economic activities over
the growth forecast for 2022. The Indian economy is
the year. These include an effective and focused
now estimated to grow by 7.2% in FY 2022-23, driven
vaccination programme, targeted localised restrictions
by Government capital expenditure and anticipated
during peak caseloads, support to economically weak
pick-up in the private capex cycle. A favourable
sections of society and assistance to sectors most
monsoon coupled with disruptions in global supply
impacted by the pandemic.
chains are expected to provide opportunities to
The recovery was, however, uneven with different service overseas markets and aid the agri sector.
sectors of the economy and income classes The Services sector is expected to grow at a higher
experiencing varying degrees of impact. The external pace aided by full re-opening of the economy and
sector was a bright spot in the economy with India’s release of pent-up demand for contact-intensive
merchandise exports surging 43% to a record high services, including resumption of business and
of US$ 418 billion during the year. Foreign currency international travel. Continued geopolitical tensions,
reserves also remained robust, despite increase in extended global supply chain disruptions and elevated
imports with rising levels of activity. Tax collections inflation pose key downside risks for the year ahead.
remained buoyant during the year with record GST Even as the Indian economy faces multi-dimensional
collections on the back of pick-up in economic activity, challenges in the short term, it remains one of
enhanced compliance and efficient administration. the most dynamic major economies in the world
On the other hand, private consumption remained with immense headroom for growth. A favourable
subdued and below its pre-pandemic growth path, demographic profile, rapid urbanisation and increasing
rural demand witnessed a marked slowdown and affluence represent some of the key structural drivers
private capital expenditure did not see any material of growth of the Indian economy. The Government of

Even as the Indian economy faces multi-dimensional challenges in the short term,
it remains one of the most dynamic major economies in the world with immense
headroom for growth. A favourable demographic profile, rapid urbanisation and
increasing affluence represent some of the key structural drivers of
growth of the Indian economy.

ITC Limited REPORT AND ACCOUNTS 2022 39

Report of the Board of Directors

India’s multi-dimensional reforms framework has the healthcare and social security benefits to the
potential to unleash a quantum leap in the country’s vulnerable, thrust on rural and agri sector, measures
growth agenda. Several transformative economic to raise farm incomes and focus on public capital
reforms have been undertaken in recent years to expenditure to crowd in private investments are
enhance competitiveness and foster inclusive growth. expected to bolster the growth momentum and also
These include the implementation of Goods and enhance competitiveness of the Indian economy.
Services Tax (GST), Insolvency and Bankruptcy Code Structural support would also need to be provided to
(IBC), Real Estate (Regulation and Development) sectors that have large multiplier effects on employment
Act, direct tax reforms and revision in Micro, Small and the economy. These include agri-based industries
& Medium Enterprises (MSME) norms. The National such as food processing, tourism, travel & hospitality
Infrastructure Pipeline, PM Gati Shakti, National and domestic agri and wood-based industries,
Industrial Corridors, Smart Cities Mission and PM amongst others. Development of robust value chains
Awas Yojana are some of the key interventions to support and strengthen these sectors remains
that are transforming the country’s infrastructure critical to achieving such multiplier effects and realising
landscape. The new Labour Code which has done India’s goal of becoming a US$ 5 trillion economy.
away with a number of archaic legislations and
As reported in earlier years, enhancing agricultural
investment boosting measures like sector-focused
productivity and value addition to international
Production Linked Incentive (PLI) Schemes are
standards, while simultaneously improving
expected to catalyse the manufacturing sector
market linkages, remain critical to enhance
and enhance its competitiveness. A robust digital
the competitiveness of the agricultural sector and drive
infrastructure has been put in place, with Unified
significant increase in farmers’ income. India is the
Payments Interface (UPI), Jan Dhan-Aadhaar-Mobile
leading producer worldwide of several commodities,
trinity and several other initiatives under Digital India
including pulses, spices, fruits such as mangoes,
paving the way for democratising technology and
bananas, etc.; it is also the second largest producer
connectivity to bring about the next phase of financial
of rice and has the largest population of buffaloes
inclusion in the country. Focused initiatives in the rural
globally. However, India’s agri exports aggregating
and agri sector such as PM KISAN, Pradhan Mantri
appx. US$ 50 billion represent a global market share
Garib Kalyan Anna Yojana (PMGKAY), central scheme
of less than 3%.
for Farmer Producer Organisations (FPOs) and
rural electrification programme amongst others, are Expert studies indicate the potential to double India’s
expected to engender inclusive growth. agri exports by strengthening the competitiveness
of agri-value chains in areas that are aligned to
As the economy faces the immediate challenges of
global demand and where the country has inherent
muted consumption, persistently high inflationary
advantages. This calls for a transformational shift
headwinds and supply chain disruptions, policy
of the agri ecosystem from the conventional
interventions would need to be sharply focused on
production-centric supply chains to demand-responsive
supporting sustainable livelihoods and fostering
value chains anchored by market players.
inclusive growth. The growth oriented initiatives
announced by the Government in the visionary It is pertinent to note that food and dietary patterns
Union Budget 2022 including provision of food, are fast evolving across the globe with sustainable

The growth oriented initiatives announced by the Government in the

visionary Union Budget 2022 including provision of food, healthcare and
social security benefits to the vulnerable, thrust on rural and agri sector, measures
to raise farm incomes and focus on public capital expenditure to crowd in
private investments are expected to bolster the growth momentum and
also enhance competitiveness of the Indian economy.

40 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

sourcing becoming increasingly mainstream. As reported in earlier years, it is pertinent to note that
Such shifts accentuate the need to enhance the a substantial quantum of food is wasted along the
competitiveness of agri-value chains in order to cater chain in India, depending on the inherent perishability
to the dynamic market requirements of the future. of the crop and the season. Higher levels of food
Achieving scale and productivity have also become processing in the economy can create a much larger
pre-requisites for the success of the agri sector. pull for quality agri-commodities, thereby reducing
As per estimates, over the next four decades, global farm wastages and raising farm incomes. This would
food production would need to equal the total food require focused investments in developing
production achieved over the past eight millennia, product-specific climate-controlled infrastructure as
in order to meet the burgeoning global demand over well as in branded products that benefit large
such time. The Government’s initiatives to promote agri-value chains. Corporate participation is essential
FPOs in order to enhance market access for farmers not only to invest in requisite infrastructure, but also
and leverage economies of scale are expected to reap to provide assured market linkages to farmers.
rich dividends for the agri sector in the medium term. A big thrust on India’s Food Processing sector can
FPOs have a tremendous potential to serve as major play a pivotal role and have a multiplier effect which
enablers in augmenting farm livelihoods, by facilitating will lead to significant job creation, enhance rural
a crucial link between markets and individual farmers, incomes and help manage food inflation. In this
context, the recently announced PLI Scheme for the
especially those with small and marginal land
Food Processing sector, with an estimated outlay of
holdings. In this context, your Company has adopted
` 10900 crores, is expected to play a pivotal role in
targeted collaborative models to multiply the scale
boosting investments, agri exports, farmer incomes,
and impact of its agri and rural interventions.
employment generation and building Indian brands
This collaborative approach, as opposed to a traditional
for the global market. Your Company has been
transactional approach, can contribute meaningfully
included under the Scheme for several of its Branded
towards building next generation agriculture that is
Packaged Foods Businesses, details of which are
climate resilient and capable of supporting gainful
provided in the relevant section.
livelihoods. Digitalisation of agriculture also offers the
potential to increase productivity and foster structural Similarly, the Agro-forestry sector, as a source of
changes across the value chain thereby enabling raw material for wood-based industry, is woefully
efficient use of resources. In line with its commitment constrained by policies that not only impede job
to bring the power of cutting-edge digital technologies creation in India but also promote avoidable imports.
and unlock the potential of India’s farmers, your Recent initiatives announced in the Union Budget
Company has launched ITCMAARS (Metamarket for 2022 to provide financial assistance to members of
Advanced Agriculture and Rural Services). marginalised communities taking up Agro-forestry is a
This digitally powered platform will empower good starting point to reverse this situation. Supportive
the farming community by delivering customised policies in this area would go a long way in enhancing
solutions to stakeholders by synergistically integrating sustainable livelihoods while simultaneously
augmenting the Nation’s environmental capital.
NextGen agri-technologies. Further details on this
transformative initiative are provided in the The integrated nature of your Company’s business
Agri Business section of this report. models along with strategic investments to enhance

The Government’s initiatives to promote FPOs in order to enhance market access

for farmers and leverage economies of scale are expected to reap rich dividends
for the agri sector in the medium term. In this context, your Company has
adopted targeted collaborative models to multiply the scale and
impact of its agri and rural interventions.

ITC Limited REPORT AND ACCOUNTS 2022 41

Report of the Board of Directors

efficiencies across its operating segments - including collaborative initiative with NITI Aayog. These
agri-commodity sourcing expertise for the Branded interventions have led to improvement in yields and
Packaged Foods Businesses and cost-competitive fibre reduction in cultivation costs, thereby augmenting
supply chain along with in-house pulp manufacturing farmer incomes by up to 60%.
capability of the Paperboards & Specialty Papers
Your Company has also partnered with the
Business – is a key source of competitive advantage,
State Government of Andhra Pradesh towards
especially against the backdrop of severe inflationary
improving the quality of chilli produced in the country
headwinds. Your Company’s interventions across
to meet global standards. A Public Private Partnership
operating segments are aligned to the national
priorities of enhancing competitiveness of Indian programme - ‘Integrated Agri-Extension Platform for
agriculture and industry, generating large-scale Chilli Farm Value Chain Development’ - has been
employment opportunities and supporting sustainable conceptualised under which 40,000 farmers covering
livelihoods, driving import substitution by enhancing about 100,000 acres are expected to be benefited by
the competitiveness of domestic agri-value chains 2025. In FY 2021-22, the programme covered over
and industry, creating national brands to maximise 16,400 farmers and 52,500 acres across 107 villages.
value capture in India, increasing Indian agri exports Improved quality, farm productivity and higher share
and promoting sustainable business practices. of farm gate sales enabled farmers covered under the
Investments made by your Company continue to be project to generate additional income.
guided by the national objectives of ‘Make in India’ Your Company is also working towards developing
and ‘Doubling Farmers’ Income’ and the overarching
village level institutions and fostering micro
theme of ‘AatmaNirbhar Bharat’ that seeks to make
entrepreneurship by promoting custom hiring centres for
the country stronger, resilient and more competitive.
farm mechanisation, post-harvest product management
The collaboration with NITI Aayog, aimed at boosting infrastructure and community managed seed banks for
agricultural and allied activities in 27 backward self-reliance in quality seed material. Environmentally
districts of eight states under the Aspirational Districts sustainable farm practices including zero-till sowing
programme, was successfully completed during of wheat, direct seeding of rice, micro-irrigation and
the year and plans are on the anvil to extend the watershed development continue to be promoted.
same. Under the programme, around 34 lakh farmer
The farm sector faces enormous threats arising
interactions have taken place, with training being
imparted on package of practices appropriate for out of climate change as evident from the growing
the dominant crops of the region as well as towards number of extreme weather events such as droughts
livestock rearing. Your Company recognises the and floods. Given the vulnerabilities, it is critical to
critical role of technology and the digital revolution strengthen climate resilience and adaptability of the
towards fostering inclusive and sustainable growth agri-food sector. In this context, your Company’s
to reduce social inequity. Towards this end, digital interventions in collaboration with CGIAR’s
training platforms were leveraged during the year ‘Climate Change and Food Security Programme’
through customised apps together with the formation to build climate smart villages was expanded to
of more than 6,200 WhatsApp groups in around over 2,500 villages across 11 states and supported
18,900 villages, building capacity of 5.9 lakh farmers farmers in the management of risks arising from
to achieve the objectives of your Company’s erratic and extreme weather events. Your Company,

Investments made by your Company continue to be guided by the

national objectives of ‘Make in India’ and ‘Doubling Farmers’ Income’ and
the overarching theme of ‘AatmaNirbhar Bharat’ that seeks to make
the country stronger, resilient and more competitive.

42 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

through stakeholder consultations and extensive Although India has appx. 18% of the world population,
research has prepared state level agriculture its share of natural resources is disproportionately low
climate change adaptation plans for three states with only 2% of global land mass, 4% of freshwater
i.e. Rajasthan, Maharashtra and Madhya Pradesh and resources and 2% of forest resources. It is more
continues to engage with the respective governments critical than ever before to redouble efforts, both at
for adoption of the same. Further, your Company’s the national and corporate level, to fashion
Climate Smart Village intervention in Madhya Pradesh strategies that foster sustainable, equitable and
demonstrated an average increase in yield of 38% inclusive growth.
and 15% in soyabean and wheat respectively, over the It is your Company’s belief that businesses can bring
baseline. Along with reduction in cost of cultivation, about transformational change by pursuing innovative
this has led to an average increase in net income by business models that synergise the creation of
93% in soyabean and 46% in wheat over the baseline. sustainable livelihoods and the preservation of natural
According to CGIAR estimates, average Green House capital while enhancing shareholder value.
Gas emissions reduced by 66% for soyabean This ‘Triple Bottom Line’ approach to creating larger
and 13% for wheat as compared to the baseline. ‘stakeholder value’, as opposed to merely focusing on
Your Company continues to be a carbon, water and uni-dimensional ‘shareholder value’ creation, is the
solid waste re-cycling positive organisation and is a driving force that defines your Company’s sustainability
global exemplar in sustainability. vision and its growth path into the future.
Demand side management is another critical Your Company is a global exemplar in
component of your Company’s Water Stewardship ‘Triple Bottom Line’ performance. The focus on
programme. Recognising the critical imperative of creating unique business models that generate
reducing water use, especially in agriculture, your substantial livelihoods across the value chains has
Company continues to work with farmers to achieve led to your Company’s Businesses supporting over
‘more crop per drop’ and improve farmer incomes. six million sustainable livelihoods, many of whom
Around 7.3 lakh acres have been covered till date belong to the weaker sections of society.
across 11 states. Various studies indicate potential
Your Company sustained its ‘AA’ rating by MSCI-ESG
water savings to the tune of 497 million cubic metres
for the 4th successive year - the highest amongst
per annum through micro irrigation technologies and
global tobacco companies. Your Company has
crop-specific agronomical practices.
also been included in the Dow Jones Sustainability
In Kapurthala District, Punjab, your Company under Emerging Markets Index - a reflection of being a
its flagship programme of ‘ITC Mission Sunehra Kal’ sustainability leader in the industry and a recognition
has, over the last four years, implemented solutions of its continued commitment to people and planet.
that have effectively substituted the burning of paddy Your Company has also been rated at the
stubble by farmers. During the year, the programme ‘Leadership Level’ score of ‘A-’ for both Climate
covered 1.8 lakh acres with appx. 87% of the area Change and Water Security (Asia and Global average
witnessing total stoppage of stubble burning, at ‘B-’ for climate change and ‘B’ for water security)
thereby avoiding appx. 1.3 lakh tonnes of carbon by CDP, a reputed independent global platform for
release into the atmosphere. disclosures on environmental impacts.

Your Company sustained its ‘AA’ rating by MSCI-ESG for the 4th successive year -
the highest amongst global tobacco companies. Your Company has also been
included in the Dow Jones Sustainability Emerging Markets Index – a reflection
of being a sustainability leader in the industry and a recognition
of its continued commitment to people and planet.

ITC Limited REPORT AND ACCOUNTS 2022 43

Report of the Board of Directors

As a testament to your Company’s ‘Triple Bottom Overall for FY 2021-22, Gross Revenue at
Line’ philosophy and Responsible Luxury ethos, ITC ` 59101.09 crores increased by 22.7%, while
Windsor, Bengaluru achieved the distinction of being EBITDA increased by 22.0% to ` 18933.66 crores.
the first hotel in the world to achieve LEED® Zero Profit Before Tax at ` 19829.53 crores grew by
Carbon Certification. ITC Grand Chola, Chennai (the 15.5% over previous year and Profit After Tax stood
largest hotel in the world to receive such certification), at ` 15057.83 crores (previous year ` 13031.68 crores).
and ITC Gardenia, Bengaluru also received the Total Comprehensive Income for the year stood at
LEED® Zero Carbon Certification during the year. ` 15631.68 crores (previous year ` 13277.93 crores).
These properties are the first three hotels in the world Earnings Per Share for the year stood at ` 12.22
to receive the LEED® Zero Carbon Certification. (previous year ` 10.59).
Your Company recognises the urgent need to combat – The FMCG-Others Segment turned in a resilient
climate change for building a more secure future and
performance with Segment Revenue growing
the role it can play in enabling a net-zero economy.
by 8.6% amidst subdued demand conditions.
To this end, your Company is pursuing a low carbon
After a relatively muted first half, revenue in
growth strategy through extensive decarbonisation
the second half of the year witnessed double-
programmes across its value chain. With its bold
digit growth. Staples and Convenience Foods
Sustainability 2.0 agenda, your Company is setting
remained resilient even as the pace of revenue
the bar higher, and remains committed to making a
growth moderated on a relatively high base.
meaningful contribution to the Nation’s future while
Discretionary/Out-of-Home categories recorded
retaining its status as a sustainability exemplar.
Further details on this subject are available in the strong growth surpassing pre-pandemic levels
Sustainability section of this Report. driven by progressive improvement in mobility.
The Health & Hygiene portfolio witnessed demand
FINANCIAL PERFORMANCE volatility in line with COVID caseload intensity
while remaining significantly above pre-pandemic
The operating environment during the year
levels. Progressive resumption of physical classes
remained extremely challenging and was marked
at educational institutions led to gradual recovery
by heightened uncertainty and volatility due to the
COVID pandemic and unprecedented inflationary in the Education & Stationery Products Business;
headwinds; geopolitical tensions towards the end of however, sales remained below pre-pandemic
the year exacerbated the situation. Your Company levels. Segment EBITDA for the year grew by
demonstrated tremendous resilience and navigated 10.0% to ` 1448.97 crores with margins being
the dynamic environment with speed and agility sustained at 9.1% in spite of unprecedented
leveraging the experiences from prior waves of the inflationary headwinds. The unprecedented
pandemic. In spite of significant disruptions during increase in prices of key inputs was mitigated
the year, your Company’s consumer-centricity, agility through focused cost management interventions
in seizing market opportunities, focus on execution across the value chain, premiumisation, product
excellence and proactive strategic interventions mix enrichment, judicious pricing actions and fiscal
enabled it to post robust growth in Revenues and incentives. Inflation continues to remain a key
Profits, surpassing pre-pandemic levels. monitorable for the Segment in the near term.

Overall for FY 2021-22, Gross Revenue at ` 59101.09 crores increased by 22.7%,

while EBITDA increased by 22.0% to ` 18933.66 crores.
Profit After Tax stood at ` 15057.83 crores.

44 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

– The FMCG-Cigarettes Segment rebounded Share of ` 1/- each for the financial year ended
during the year on the back of progressive 31st March, 2022. Together with the Interim Dividend
normalisation of economic activity and concerted of ` 5.25 per share paid on 4th March, 2022, the total
actions to reinforce market standing through Dividend for the financial year ended 31st March,
strategic portfolio interventions and enhancing 2022, amounts to ` 11.50 per share (previous year
product availability backed by superior on-ground ` 10.75 per share). Total cash outflow on account of
execution. Volumes surpassed pre-pandemic Dividends (including Interim Dividend of ` 6469.48
levels in the latter half of the year. crores paid in March 2022) will be ` 14171.51 crores.

– After an extremely challenging FY 2020-21, VALUE-ADDED AND CONTRIBUTION TO

the Hotels Segment witnessed smart recovery driven EXCHEQUER
by the domestic leisure and wedding segments; Over the last five years, the Value-Added by
business travel also saw progressive improvement, your Company, i.e. the value created by the economic
albeit remaining well below pre-pandemic levels. activities of your Company and its employees,
Pick-up in revenues together with relentless focus aggregated over ` 250000 crores, of which over
on cost management resulted in a positive swing ` 172000 crores accrued to the Exchequer.
of ` 346.63 crores in Segment EBITDA, despite
Including the share of dividends paid and retained
considerable disruptions caused by the two waves
earnings attributable to government owned
of the pandemic during the year.
institutions, your Company’s contribution to the
– The Agri Business Segment delivered stellar Central and State Governments represented over
performance with Segment Revenue and Results 75% of its Value-Added during the year.
growing by 28.7% and 25.6% respectively. Your Company has, over the years, ranked amongst
This was driven by strong growth in wheat, rice, the Top 3 Indian corporates in the private sector in
spices and leaf tobacco exports on the back of terms of Contribution to Exchequer.
strong customer relationships, robust sourcing
network and agile execution. FOREIGN EXCHANGE EARNINGS

– The Paperboards, Paper & Packaging Segment Your Company continues to view foreign exchange
recorded strong growth of 36.0% in Segment earnings as a priority. All Businesses in your
Revenue and 54.7% in Segment Results. Company’s portfolio are mandated to engage
This was aided by demand revival across most with overseas markets with a view to testing and
end-user segments, higher realisations, product demonstrating international competitiveness and
seeking profitable opportunities for growth. Foreign
mix enrichment and exports. Robust margin
exchange earnings of the ITC Group over the last
expansion of appx. 270 bps was achieved
ten years aggregated nearly US$ 8.2 billion,
leveraging the integrated nature of the business
of which agri exports constituted 59%. Earnings
model, Industry 4.0 and other digital interventions.
from agri exports, which effectively link small farmers
The Directors of your Company are pleased to with international markets, are an indicator of
recommend a Final Dividend of ` 6.25 per Ordinary your Company’s contribution to the rural economy.

Over the last five years, the Value-Added by your Company, i.e. the value created
by the economic activities of your Company and its employees, aggregated over
` 250000 crores, of which over ` 172000 crores accrued to the Exchequer.

ITC Limited REPORT AND ACCOUNTS 2022 45

Report of the Board of Directors

During the financial year 2021-22, your Company FMCG CIGARETTES

and its subsidiaries earned ` 11472 crores in foreign
After facing significant challenges in FY 2020-21,
exchange. The direct foreign exchange earned by the Business navigated through two disruptive
your Company more than doubled to ` 9779 crores, waves of the pandemic during the year under review.
mainly on account of exports of agri-commodities. Despite such disruptions, the Business progressively
Your Company’s expenditure in foreign currency recovered in course of the year, surpassing
amounted to ` 2756 crores, comprising purchase of raw pre-pandemic levels in the latter half. The Business
materials, spares and other expenses of ` 2456 crores effectively leveraged institutional strengths,
and import of capital goods of ` 300 crores. digital technologies and learnings from prior waves
PROFITS, DIVIDENDS AND RETAINED EARNINGS to respond with agility across all nodes of operations.
This included, inter alia, re-configuring and
(` in crores) re-aligning supply chain operations to service market
PROFITS 2021 - 22 2020 - 21 requirements through dynamic planning, strengthening
direct reach in target markets across all traditional
a) Profit Before Tax 19829.53 17164.19
trade channels and augmenting the stockist network
b) Tax Expense
to service rural and semi-urban markets efficiently.
– Current Tax 4833.88 4035.36
Your Company sustained its leadership position in
– Deferred Tax (62.18) 97.15
the cigarette industry through its unwavering focus on
c) Profit for the year 15057.83 13031.68 nurturing a portfolio of world-class products anchored
d) Other Comprehensive Income 573.85 246.25 on superior consumer insights, robust innovation
e) Total Comprehensive Income 15631.68 13277.93 pipeline and world-class product development
capabilities. Your Company continues to counter illicit
STATEMENT OF RETAINED EARNINGS
trade and reinforce market standing by fortifying the
a) At the beginning of the year 28210.63 33596.14 product portfolio through innovation, democratising
b) Add: Profit for the year 15057.83 13031.68 premiumisation across segments and enhancing
c) Add: O
 ther Comprehensive Income 23.66 (29.66) product availability backed by superior on-ground
(net of tax) execution. Several differentiated variants were
d) Add: Transfer from share option 315.34 222.96 introduced to cater to continuously evolving consumer
on exercise and lapse preferences and ensure future-readiness of the product
e) Less: Dividends portfolio. These include innovative launches such as
– Final Dividend of ` 5.75 7077.59 12476.61 ‘Classic Connect’, ‘Gold Flake Indie Mint’, ‘Gold Flake
(2021: ` 10.15) per share Neo SMART Filter’, ‘Wills Protech’, ‘Capstan Excel’,
– Interim Dividend of ` 5.25 6469.48 6152.68 ‘American Club Smash’, ‘Gold Flake Kings Mixpod’,
(2021: ` 5.00 ) per share ‘Wave Boss’ and ‘Flake Nova’. The Business also
– Income Tax on Dividend paid – (13.98) expanded its presence in focus markets with the
launch of differentiated offerings across segments.
f) 
Transfer from Equity Instruments through – 4.82
Other Comprehensive Income reserve on Globally, cigarette smoking is the dominant form
renunciation of rights entitlements (net of tax)
of tobacco use. In the Indian context, tobacco use
g) At the end of the year 30060.39 28210.63
comprises a diverse range of chewing and smoking

Your Company and its subsidiaries earned

` 11472 crores in foreign exchange.

46 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

formats that are available at different price points, Taxes on cigarettes in India are multiple times higher
consequent to significant divergence in tax rates across than in developed countries viz. 17x of USA, 10x of
different formats of tobacco. While India is the world’s Japan, 7x of Germany and so on. Further, the same
second largest consumer of tobacco, legal cigarettes is also substantially higher than that in neighbouring
constitute only 8% of overall tobacco consumption in countries.
India, as against a global average of 90%. It is pertinent
to note that India accounts for less than 2% of global It is pertinent to note that India’s per capita cigarette
cigarette consumption despite comprising 18% of the consumption is amongst the lowest in the world and is
world’s population, making India’s per capita cigarette significantly lower compared to that of China, Japan,
consumption amongst the lowest in the world. USA, UK and even neighbouring countries such as
Over the years, discriminatory and punitive taxation Bangladesh and Pakistan.
on cigarettes has led to progressive migration
from consumption of duty-paid cigarettes to other Per Capita Consumption of Cigarettes
lightly taxed/tax-evaded forms of tobacco products,
No. of Cigarettes per annum
comprising illicit cigarettes and bidi, chewing tobacco, 2043
gutkha, zarda, snuff, etc. Consequently, while the share
1583
of legal cigarettes in total tobacco consumption has
declined from 21% in 1981-82 to a mere 8%, aggregate 1017
828 744
tobacco consumption in the country has increased
over the same period. As a result, despite accounting 363
89
for less than 1/10th of the tobacco consumed in the "

China Japan USA UK Bangladesh Pakistan India

country, duty-paid cigarettes contribute more than 4/5th
of the revenue generated from the tobacco sector.
Source: The Tobacco Atlas – 6th Edition, 2018
Taxes on cigarettes are one of the highest in India
as depicted in the chart.
During the period 2012-13 to 2016-17, excise duty
Tax per 2000 Cigarettes as a percentage of Per Capita GDP on cigarettes increased sharply at a CAGR of 15.7%;
USA 0.46% however, tax revenue from cigarettes grew by
Japan 0.75% a mere 4.7% CAGR during the same period.
China 1.14%
Germany 1.14% In 2017-18, the legal cigarette industry was further
Russia 1.19% impacted by a sharp rise of 20% in tax incidence
Canada 1.37%
Malaysia 2.03% as a result of increase in excise duty and transition
Thailand 2.10% to the GST regime. Thereafter, relative stability in
Pakistan 2.44%
UK 2.66% taxation until January 2020 helped the legal industry
Australia 3.01% partially claw back volumes lost to the illicit trade
India 7.70%
in earlier years; consequently, revenue collections
Source: Tax data – WHO Report on Global Tobacco Epidemic, 2021 witnessed a marked buoyancy growing by 10.2%
Per capita GDP – World Bank (Data for the year 2020)
during this period.

Despite accounting for less than 1/10th of the tobacco consumed in the country,
duty-paid cigarettes contribute more than 4/5th of the revenue generated
from the tobacco sector.

ITC Limited REPORT AND ACCOUNTS 2022 47

Report of the Board of Directors

other tobacco products as well, the revenue losses

Period Increase in Growth in
are significant since about 68%2 of the total tobacco
Tax Rate Revenue
consumed in the country remains outside the tax net.
Collections
2012-13 to 2016-17 (CAGR) 15.7% 4.7% Tobacco control measures in India have ranked
amongst the most stringent in the world from the
Apr ’18-Jan ’20 over Jul ’17-Mar ’18 – 10.2%
time of enactment of the Cigarettes (Regulation of
After a steep hike in taxation in February 2020, Production, Supply and Distribution) Act, 1975 to the
the respite from further increases in the subsequent present. India is also one of the few countries where
period has provided an opportunity for the legal tobacco products are regulated across the value
industry to partially recover volumes lost to illicit trade chain – from their manufacture to sale to consumers.
in earlier years. The Cigarettes and Other Tobacco Products
(Prohibition of Advertisement and Regulation of Trade
Punitive taxes on the legal cigarette industry have
and Commerce, Production, Supply and Distribution)
resulted in rapid growth in illicit cigarette trade, making
Act, 2003 (COTPA) requires cigarette packages to
India the 4th largest illicit cigarette market globally
bear the statutorily mandated pictorial and textual
according to Euromonitor estimates. Over the years
warnings covering 85% of the surface area of the
this has created extremely attractive tax arbitrage
packet - one of the largest in the world.
opportunities for unscrupulous players indulging
in illicit cigarette trade. While legitimate cigarette It may be observed that smuggled international brands
industry volumes have declined consistently over of cigarettes do not bear any of the pictorial or textual
the last decade, illicit cigarette trade volumes, in warnings mandated by Indian laws or, bear much
contrast, have grown rapidly during the same period, smaller pictorial warnings as per the tobacco laws of
accounting for about 1/4th of the domestic industry. the countries from where these cigarettes originate.
As reported in prior years, findings from research
During the year, the media reported several cases of
conducted by IMRB International, an independent
evasion of taxes/duties by dealers in illicit cigarettes
market research organisation, show that the lack of
which came to light because of raids conducted by
pictorial warnings on packets of smuggled international
Directorate General of GST Intelligence (DGGI).
brands of cigarettes or their diminutive size creates
Several interventions in this area continue to be made
a perception in the consumers’ mind that these illicit
by the respective authorities. As per the reply given by
cigarettes are ‘safer’ than domestic duty-paid cigarettes
the Union Minister of State for Commerce & Industry
that carry the 85% pictorial warnings. The combination
in the Lok Sabha on 17th March, 2021, the seizure
of low prices to consumers consequent to tax evasion
of illicit cigarettes has seen a quantum jump over
and the misleading perception created by the absence
previous years. It is estimated that on account of illicit
of statutory pictorial warnings provides significant
cigarettes alone, revenue loss to the Government is
buoyancy to illicit cigarette volumes.
appx. ` 170001 crores per annum. In respect of the
2R
 eport on the impact of current tax framework on the tobacco sector in India
1 As per industry estimates and suggestions for its improvement - 2014, by ASSOCHAM and KPMG.

After a steep hike in taxation in February 2020, the respite from further increases
in the subsequent period has provided an opportunity for the legal industry to
partially recover volumes lost to illicit trade in earlier years.

48 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

India is among the top three tobacco growing the past, stability in taxes on cigarettes enables the
countries in the world. Tobacco occupies a pre- legal cigarette industry to claw back volumes lost to
eminent position in the Indian economy on account illicit trade, thereby engendering domestic demand
of its considerable contribution to the agricultural, for Indian tobaccos, while also mitigating loss of tax
industrial and export sectors3. The large and rapidly revenue to the Exchequer due to illicit trade.
growing illicit cigarette trade also has a deleterious As reported in earlier years, your Company and
impact on farmers and farm workers engaged in several other stakeholders had challenged the validity
the tobacco value chain. In India, cigarettes are of the pictorial and textual warning covering 85%
manufactured largely using Flue Cured Virginia (FCV) of the surface area of the packet prescribed under
tobacco grown in the states of Andhra Pradesh, COTPA. The Honourable Karnataka High Court, by its
Telangana and Karnataka. As smuggled international judgement in December, 2017, held the 85% pictorial
brands of cigarettes do not use Indian tobaccos, warnings to be factually incorrect and unconstitutional.
in addition to revenue losses, the growth of Upon Special Leave Petitions filed by the Government
illicit cigarette trade has also resulted in a sharp and others, the Honourable Supreme Court has
drop in demand for Indian FCV tobaccos in the stayed the judgment of the High Court. The cases are
domestic market. pending before the Honourable Supreme Court.
It is pertinent to note that several other major The extremely stringent regulations along with the
tobacco producing countries, including the USA, discriminatory and steep taxation on cigarettes
have established regulatory frameworks taking into have had numerous negative, albeit unintended
consideration the economic interests of their tobacco repercussions. These include:
farmers. The punitive and discriminatory taxation &
– rapid growth in illicit cigarette volumes, which
regulatory regime on cigarettes in India continues
resulted in sub-optimisation of the revenue
to adversely affect the livelihood of Indian tobacco
potential of the tobacco sector and significant loss
farmers with corresponding gains to those countries
to the Exchequer. It is estimated that on account
that have opted for moderate and equitable tobacco
of illicit cigarettes alone, revenue loss to the
regulations. These developments, coupled with lower
Government is appx. ` 17000 crores per annum.
availability of Indian crop, lower export incentives in
India and relative weakness of currencies in certain – widespread availability of illicit cigarettes and other
competing geographies have had a debilitating tobacco products of dubious quality and hygiene
impact on 46 million livelihoods comprising tobacco to consumers at extremely affordable prices.
farmers, farm workers, etc. who are dependent on the As a result, despite accounting for less than
tobacco value chain. It is estimated that since 2014, 1/10th of the tobacco consumed in the country,
Indian tobacco farmers have suffered a cumulative duty-paid cigarettes contribute more than 4/5th of
drop in earnings of over ` 7000 crores. As seen in the revenue generated from the tobacco sector.
– a large component of tobacco consumption in
3  eport on Tobacco Control in India, Ministry of Health & Family Welfare,
R
GoI, 2004 (Jointly supported by Centers for Disease Control and Prevention,
the country, aggregating around 68%, remaining
USA and the World Health Organisation). outside the tax net.

As seen in the past, stability in taxes on cigarettes enables the legal cigarette
industry to claw back volumes lost to illicit trade, thereby engendering
domestic demand for Indian tobaccos, while also mitigating loss of
tax revenue to the Exchequer due to illicit trade.

ITC Limited REPORT AND ACCOUNTS 2022 49

Report of the Board of Directors

– persistent negative impact on the livelihood of It is extremely satisfying to report that your Company
tobacco farmers and others dependent on tobacco. continued to be recognised for its commitment
Studies by the Central Tobacco Research Institute towards operational excellence. The Bengaluru and
(CTRI) indicate that on account of agro-climatic Ranjangaon units were adjudged ‘Winner’ in Frost
conditions, there is no equally remunerative and Sullivan 2021 Project Evaluation & Recognition
alternate crop that can be grown in the FCV Program (PERP) in Robotics & Automation, Quality
tobacco growing regions of the country. Excellence, and Artificial Intelligence categories in the
Your Company continues to engage with policy Manufacturing Sector.
makers for a framework of pragmatic, equitable,
In line with your Company’s commitment to the
non-discriminatory, evidence-based regulations
‘Triple Bottom Line’, the Business has put in
and taxation policies that balance the economic
focused efforts through innovative interventions for
imperatives of the country and tobacco control
resource conservation and adoption of best-in-class
objectives, cognising for the unique tobacco
technologies and processes. More than 50% of the
consumption pattern in India. Stability in taxes
is critical for addressing the interests of all the total energy used by the Business is generated from
stakeholders of this industry, including the tobacco renewable sources. Various interventions over the
farmers, the Exchequer and the consumers. years like investments in renewable energy sources,
continued wheeling of wind energy through interstate
As in the past, the research and development
open access and purchase of renewable energy
initiatives of your Company continue to add to the
from Indian Energy Exchange (IEX) have enabled
country’s bank of Intellectual Property Rights (IPR).
the same. Sustainability initiatives of the Business
In addition to grant of several patents in earlier years,
continued to be recognised with Saharanpur,
it is deeply satisfying to report that your Company has
been granted six more patents during the year. Kidderpore and Bengaluru units receiving the
‘National Energy Leader Award’, ‘Excellent Energy
Manufacturing facilities continue to be modernised
Efficient Unit Award’ and ‘Energy Efficient Unit Award’
by inducting contemporary technologies to drive
respectively at the CII National Award for Excellence in
innovation and secure higher levels of productivity
Energy Management 2021. The Munger unit received
and product excellence. New benchmarks were
‘Most Innovative Project Award’ at the CII National
set in areas of quality, sustainability, supply chain
Award for Environmental Best Practices 2021.
responsiveness and productivity. Cutting-edge
technologies such as Industry 4.0 and Data Sciences The 21 MW wind farm in Karnataka also received
were leveraged to build a smart manufacturing ‘Best Performing Wind Farm Award’ in Karnataka,
environment of connected systems. These initiatives, Andhra Pradesh & Telangana by Indian Wind Power
coupled with innovative capabilities, in-house design Association for FY 2020-21. The Kidderpore unit
and development expertise, have further improved the won the EFI CII National Award for ‘Significant
speed-to-market of new launches and augmented Achievement in Employee Relations 2021’ for
the innovation pipeline of the Business. excellence in Employee Relations practices.

Manufacturing facilities continue to be modernised by

inducting contemporary technologies to drive innovation and
secure higher levels of productivity and product excellence.

50 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

While respite from further increase in taxes has Notwithstanding the challenging conditions prevailing
provided the legal cigarette industry an opportunity to during the year, your Company’s FMCG businesses
claw back volumes lost to illicit trade, the operating recorded Segment Revenue of ` 15994.49 crores
environment remains challenging due to elevated representing an increase of 8.6% over the previous
levels of taxation, high share of illicit trade and year. Segment EBITDA for the year grew by 10.0% to
disproportionate regulatory pressures. Notwithstanding ` 1448.97 crores with margins being sustained at 9.1%
these challenges, your Company remains confident in spite of unprecedented inflation in input costs
of responding with agility to the dynamic environment as aforestated.
and fortifying its market standing in the legal cigarette
A consumer-centric approach, backed by speed and
industry leveraging its superior strategies, future-ready
agility in execution, was at the core of your Company’s
portfolio, robust innovation pipeline, cutting-edge
response in navigating the heightened uncertainty
manufacturing & digital technologies and best-in-class
and volatility in the operating environment. Digital
execution capabilities.
technologies and platforms continue to be leveraged
FMCG – OTHERS to effectively service emergent consumer demand
across channels.
During the year, the FMCG industry witnessed
moderation in growth mainly due to subdued demand Your Company remains focused on building purpose-
conditions especially in rural markets, high inflation led brands powered by agile innovation and anchored
eating into household budgets and high base effect on larger consumer needs. The Businesses continue
in certain categories such as Staples & Convenience to leverage digital technologies and platforms
Foods. Health & Hygiene personal care products towards enhancing consumer experience. Strategic
witnessed demand volatility in line with varying interventions in this area are aimed at delivering
intensity of the pandemic, while remaining significantly delightful brand experiences seamlessly across
above pre-pandemic levels. Discretionary/Out-of-Home touchpoints through personalised journeys mapped
categories witnessed strong growth on a favourable to individual’s needs, preferences and context.
base and surpassed pre-Covid levels driven The Businesses continue to increasingly leverage
by improved mobility and progressive return to ‘Sixth Sense’, the Marketing Command Centre
normalcy. The year saw an unprecedented increase and Consumer Data Hub – an AI-powered
in prices of key inputs such as edible oils, packaging hyper-personalised platform backed by a robust
materials, soap noodles, fuel, logistics, etc. which partner ecosystem for content and data - to gain
exerted considerable pressure on margins. This was insights on market trends and consumer behaviour,
mitigated by adopting a comprehensive approach and synthesise the same to craft contextual and
across the value chain entailing sharp focus on cost hyper-personalised brand communication and product
management, portfolio premiumisation, competitive development. Over 3,000 content assets have been
trade and marketing investments, fiscal incentives, deployed leveraging this capability within a relatively
supply chain agility and judicious pricing actions. short span of time at significantly lower cost.

Your Company remains focused on building purpose-led brands powered by

agile innovation and anchored on larger consumer needs. Your Company
continues to increasingly leverage ‘Sixth Sense’, the Marketing Command Centre
and Consumer Data Hub – an AI powered hyper-personalised platform backed by a
robust partner ecosystem for content and data - to gain insights on market trends
and consumer behaviour, and synthesise the same to craft contextual and
hyper-personalised brand communication and product development.

ITC Limited REPORT AND ACCOUNTS 2022 51

Report of the Board of Directors

Your Company continues to leverage deep consumer

FMCG - Others
insights and cutting-edge R&D capability to fuel
15994
growth by addressing present and emergent Revenue (` Crores) 14728
consumer need spaces. Over 110 new products 1250512844
were launched across target markets during the 10512
11329
9731
year, leveraging the robust innovation platforms 9038
8122
of your Company’s Life Sciences and Technology 7012
Centre (LSTC). 5545
4482
3642
Cutting-edge digital technologies including Industry 2511 3014
1704
1013
4.0, Advanced Analytics, Big Data and industrial 109 304 563
Internet of Things (IoT) continue to be deployed

FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
towards strengthening your Company’s real time
operations and execution platform. Several digitally
powered interventions are underway towards
Your Company’s vibrant portfolio of over
enhancing productivity, driving efficiency and 25 world-class Indian brands, largely built through an
reducing costs. These initiatives are anchored on the organic growth strategy in a relatively short period of
key pillars of synchronised planning and forecasting, time, represents an annual consumer spend of over
next generation agile supply chain, smart ` 24000 crores and reach over 200 million households
manufacturing and sourcing, and smart demand in India. These home-grown, purpose-led Indian
capture and fulfilment. Strategic investments are brands support the competitiveness of domestic value
also being made towards enhancing value creation chains, especially in the agri space, thereby ensuring
leveraging data and analytics. Key interventions creation and retention of value within the country.

include augmenting your Company’s NextGen Your Company’s FMCG brands have achieved
data architecture powered by Artificial Intelligence/ impressive market standing4 in a relatively short span
Machine Learning (AI/ML), identifying and prioritising of time in their respective categories viz. Aashirvaad
use cases for impactful outcomes and setting up a is No. 1 in Branded Atta, Bingo! is No. 1 in the Bridges
segment of Snack Foods (No. 2 overall in Snacks &
Data Science academy comprising data scientists
Potato Chips), Sunfeast is No. 1 in the Cream Biscuits
and engineers to strengthen data and analytics
segment, Classmate is No. 1 in Notebooks,
programmes.
Engage is No. 1 in women’s Deo, Savlon is No. 1 in
The FMCG Businesses comprising Branded Surface Disinfectant spray, Mangaldeep is No. 2 in
Packaged Foods, Personal Care Products, Education Agarbattis (No. 1 in Dhoop segment), Nimyle is
and Stationery Products, Incense Sticks (Agarbattis) No. 2 in Floor Cleaners (No. 1 in Herbal Floor
and Safety Matches have grown at an impressive Cleaners) and YiPPee! is No. 2 in Noodles.

pace over the past several years. 4 Source: Nielsen, Kantar Household Panel

Your Company’s vibrant portfolio of over 25 world-class Indian brands,

largely built through an organic growth strategy in a relatively short
period of time, represents an annual consumer spend of
over ` 24000 crores and reach over 200 million households in India.

52 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

Your Company remains focused on rapidly scaling The FMCG Businesses continue to create structural
up the FMCG businesses anchored on strong growth competitive advantages and enhance profitability
platforms and a future-ready portfolio. It is pertinent by leveraging world-class distributed infrastructure,
to note that these categories, which are largely multi-channel distribution network, delayered
characterised by low household penetration levels operations, smart buying & value engineering and
and/or low per capita consumption, offer significant smart manufacturing anchored on the twin pillars of
headroom for long-term growth. This is borne out by digital and sustainability. Investments over the years
several reports which highlight that your Company’s in several state-of-the-art Integrated Consumer Goods
total addressable market expansion potential is Manufacturing and Logistics facilities (ICMLs) have
amongst the highest in the Indian FMCG space. In this laid a strong foundation to drive structural advantages
context, it is pertinent to note that your Company is such as ensuring product freshness, enhancing agility
well poised to address adjacent growth opportunities and responsiveness of the supply chain, reducing
by leveraging the 25+ powerful mother brands it has cost of servicing proximal markets through lower
established over the years. Recent examples of such distance-to-market etc. Capacity utilisation at the
brand extensions include Aashirvaad to Dairy,
10 operational ICMLs continues to be ramped up
Ready-to-Eat, Vermicelli, Salt and Spices; Sunfeast to
along with focused smart manufacturing interventions
Dairy Beverages and Cakes; Bingo to Namkeens;
leveraging automation and Industry 4.0 technologies
ITC Master Chef to Frozen Snacks and cooking
to drive operational efficiencies, yield and energy
pastes; Savlon to surface and clothes disinfectant
management and further enhance safety and quality.
sprays, sanitizers, masks, etc. Simultaneously,
With increasing scale, supply chain operations are
the FMCG Businesses continue to make strategic
being increasingly delayered through direct-to-market
investments in building categories of the future
shipments thereby reducing freight costs and
and establishing your Company’s ‘right to win’ by
eliminating multiple handling. Your Company is
progressively scaling up those nascent categories
confident that these strategic interventions which are
where beachheads have been created. Your Company
is also proactively pursuing value accretive acquisition, already delivering substantial benefits will realise their
joint venture and collaboration opportunities in strategic full potential over the medium term and continue to
areas towards accelerating growth and value creation. create long-term value.

The FMCG Businesses continue to expand their The unprecedented inflationary headwinds pose
export footprint leveraging the equity of their significant challenges in the near term and remain
world-class brands – with a reach now spanning a key monitorable for the FMCG industry. Your
over 60 countries. The recently announced Company continues to take proactive measures to
PLI Scheme is expected to provide further fillip to counter the impact of such headwinds across
exports of your Company’s products across all nodes of operations and deliver competitively
Biscuits & Cakes, Snacks, Dairy and Ready-to-Eat superior performance leveraging its institutional
categories. Your Company also continues to explore strengths and harnessing advantages of scale,
opportunities in proximal markets as a potential smart buying initiatives and world-class talent in a
vector of growth going forward. consumer-centric, agile and innovative manner.

Capacity utilisation at the 10 operational Integrated Consumer Goods

Manufacturing and Logistics facilities continue to be ramped up along with
focused smart manufacturing interventions leveraging automation and
Industry 4.0 technologies to drive operational efficiencies,
yield and energy management and further enhance safety and quality.

ITC Limited REPORT AND ACCOUNTS 2022 53

Report of the Board of Directors

Notwithstanding the short-term challenges, preferences, supported by an efficient supply chain

the structural drivers of long-term growth such as and distribution network.
rising disposable incomes and consumer awareness,
The Branded Packaged Foods Businesses remain
low levels of penetration of consumer goods, focused on addressing emerging consumer needs
favourable demographics, increasing urbanisation and with innovations anchored on the vectors of health,
growing preference for trusted brands remain firmly wellness, immunity, naturals, indulgence and
in place in India. Your Company remains confident of convenience. The Businesses launched several
rapidly scaling up its FMCG Businesses on the back innovative and first-to-market products leveraging
of a strong future-ready portfolio powered by world- superior consumer insights, capabilities of
class quality, superior consumer insights and your Company’s Life Sciences and Technology Centre
product quality, cutting-edge innovation, agile and (LSTC) and the cuisine expertise resident in
efficient supply chain and purpose-led brands. your Company’s Hotels Business. While strengthening
The Businesses will continue to leverage their its core portfolio, the Businesses continue to explore
institutional strengths viz. strong backward linkages opportunities in value-added adjacencies leveraging
with the Agri Business, a deep and wide multi-channel powerful mother brands and build categories
distribution network, cuisine knowledge resident of the future.
in the Hotels Business, packaging knowhow and
The Businesses continued to make sharp targeted
access to robust R&D platforms nurtured by LSTC.
brand building investments and scaling up their
Investments in innovation, smart & agile value chains,
nascent categories. Clutter-breaking advertising
state-of-the-art distributed manufacturing footprint
campaigns and consumer engagement both in
and digital technologies will continue to be pursued
conventional and digital media along with focused
to strengthen market standing and seize growth
market development efforts resulted in reinforcement
opportunities going forward.
of brand positioning for your Company’s bouquet of
Branded Packaged Foods world-class brands in the Branded Packaged Foods
space. Digital campaigns launched during the year
The recurring waves of the pandemic, continued
received wide recognition and won prestigious awards
supply chain disruptions, volatility in demand
across leading platforms. Some of the key awards
along with unprecedented inflationary headwinds,
received during the year include ‘A Lot Can Happen
particularly in edible oil and packaging material,
Inside’ Gold for Best Brand Influencer Collaboration by
posed severe challenges to the Branded Packaged
IAMAI for Sunfeast Dark Fantasy, ‘Augmented Reality
Foods industry during the year.
Snapchat Lens’ Gold for Augmented Reality
Against the backdrop of an extremely challenging by Digital Crest Awards for Sunfeast YiPPee!,
operating environment as aforestated, your Company ‘Leveraging a community to be the voice of the brand’
sustained its position as one of the fastest growing Gold for Most Organic Campaign by Impact Digital
branded packaged foods businesses in the country, Influencer Awards for Aashirvaad Atta and Best use
leveraging a robust portfolio of brands, a slew of Digital Media by Digixx 2022 for ITC e-Store.
of first-to-market offers, a range of distinctive Your Company also collaborated with several social
products customised to address regional tastes and influencers to deepen consumer engagement.

The Branded Packaged Foods Businesses remain focused on addressing emerging

consumer needs with innovations anchored on the vectors of health, wellness,
immunity, naturals, indulgence and convenience. The Businesses launched several
innovative and first-to-market products addressing emerging consumer needs.

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The Businesses continue to increasingly leverage robust growth driven by higher salience in Modern
‘Sixth Sense’, the Marketing Command Centre Trade and e-Commerce channels. ‘Aashirvaad
and Consumer Data Hub. Focused consumer Nature’s Super Foods’, a differentiated range of
conversations and sharp cohort-based insights have products comprising Gluten Free Flour, Ragi Flour,
enabled your Company’s world-class brands to create Multi-Millet Mix, Organic Atta and Organic Dals
innovative marketing campaigns in both Web 2.0 & continued their robust growth trajectory. These
3.0 (Gaming and Metaverse), with interventions using products are available across select General
Augmented/Virtual Reality and Artificial Intelligence and Modern Trade outlets as well as leading
providing a unique opportunity to interact with next e-Commerce platforms. The range of value-added
generation consumers. The rise of social commerce products was further augmented with the launch
has created unique opportunities for brands to engage of ‘Aashirvaad Vermicelli’ during the year.
with their target audience using social media. The Business also forayed into Frozen Indian Flat
During the year, your Company launched its first Breads (Paratha, Naan and Chapati) to service
social commerce event – ITC Store Jugalbandi – export markets. Focused and purposeful marketing
a fusion of food and music, with the event being inputs, consumer activations and region-specific
virtually hosted by ITC Store in association with interventions supported by sharply directed media
ITC Master Chef Frozen Snacks. investments, especially in digital platforms, enabled
further improvement in Aashirvaad’s brand health
Relentless focus on delivering superior quality metrics. Powered by the trust reposed by
products to consumers continues to be a key source nearly 74 million households, your Company is
of sustainable competitive advantage for the Branded confident of sustaining Aashirvaad’s position as
Packaged Foods Businesses. In this context, India’s No. 1 Atta brand going forward.
the Businesses continue to leverage the agri-commodity
As highlighted in prior years, the Business
sourcing expertise resident in your Company’s
continues to contend with increased competitive
Agri Business to procure high quality raw materials
intensity post the implementation of 5% GST on
thereby ensuring the highest levels of quality,
branded atta. While it has been the Government’s
consistency and safety of its products. In addition, each
intention to provide relief of nil rate of GST only to
of your Company’s branded packaged food products
small and local manufacturers thereby benefiting
is manufactured in HACCP/ISO-certified manufacturing
consumers with lower priced staple products, many
locations ensuring compliance with all applicable laws
unscrupulous players have used this distinction
and adherence to the highest quality norms.
in rates as an attractive tax-evasion/avoidance
– In the Staples Business, ‘Aashirvaad’ posted a opportunity, by classifying their products as
resilient performance on a high base and fortified unbranded or with a declaration that all actionable
its market standing across geographies, while claims or rights associated with brand identity have
addressing emerging consumer preferences for been foregone, while continuing to market the
healthy products and catering to regional tastes. product with brand names and distinct trademarks.
The value-added portfolio, consisting of Multigrain, This inequitable GST differential between branded
Select and Sugar Release Control Atta, posted and unbranded players has resulted in market

The Businesses continue to leverage the agri-commodity sourcing expertise

resident in your Company’s Agri Business to procure high quality raw materials
thereby ensuring the highest levels of quality, consistency and safety of its products.

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distortion, widening the price gap between national in emerging channels. Unique capabilities in ‘Fills’
registered brands and local unregistered brands technology were leveraged to launch innovative
and acts as a disincentive to invest in value variants, both under ‘Sunfeast Dark Fantasy’
creation for the Food Processing sector. and ‘Sunfeast Bounce Fills’ and create new
benchmarks in the premium indulgence space.
Supported by its new positioning, ‘Created by Sun
Product portfolio was augmented with the launch
and Sea - pure just like nature intended it to be’,
of ‘Sunfeast Bounce Fills’ in several exciting
Aashirvaad Salt strengthened leadership in key
flavours - Orange Vanilla, Strawberry Vanilla and
focus geographies and posted healthy growth
Choco Crème. The ‘Sunfeast Dark Fantasy’ range
during the year. The two recently launched
of differentiated cookies sustained its leadership
variants – Crystal salt in Southern markets and
position in the premium segment. The range was
Proactive salt (15% Lesser Sodium) – were scaled
augmented with the launch of innovative variants –
up during the year.
‘Sunfeast Dark Fantasy Vanilla Fills’ and ‘Sunfeast
In the Spices category, integration of Dark Fantasy Desserts’. The Cakes portfolio was
M/s. Sunrise Foods Private Limited with your also strengthened with the launch of Sliced Cakes.
Company was successfully completed. The Sunrise
– Despite being impacted by multiple waves of the
brand delivered robust growth during the year pandemic, the Snacks Business sustained its
and further strengthened its market standing robust growth trajectory during the year,
as the leader in its core market of West Bengal primarily driven by its core portfolio comprising
on the back of increased market penetration and ‘Bingo! Tedhe Medhe’, ‘Bingo! Potato Chips’ and
heightened consumer engagement initiatives. the ‘Bingo! Mad Angles’ range. ‘Bingo!’ continues
The brand was extended to other markets in the to be the market leader in the Bridges segment,
East/North East and is amongst the top spices and in the potato chips segment in South India.
brands in the region. The Business deployed Several innovative variants were launched during
region-specific communication strategy to enhance the year including Cream & Onion flavour under
consumer engagement. ‘Aashirvaad Spices’ Bingo! Potato Chips, ‘Chatar Matar’ under Bingo!
continues to enhance its presence in blended Tedhe Medhe and Tomato flavour under
spices in emerging channels and core markets to ‘Bingo! No Rulz Curlz’. The ‘Tedhe Medhe’ range of
enable full portfolio play. Together, the two brands Namkeens was augmented with the launch of
are well positioned to leverage your Company’s four new variants – Punjabi Tadka, Moong Dal,
institutional strengths to progressively enhance Navrattan Mix and Khatta Meetha.
their market standing further. The Business enhanced consumer engagement
– After witnessing sharp growth in the previous year, through innovative and exciting communication
the Biscuits category strengthened its portfolio initiatives leveraging the brand’s association
leveraging superior capability across innovative with Ranveer Singh.
product/technology platforms. The Business – The Instant Noodles category witnessed
continued to focus on the premium segment to normalisation of demand during the year after a
enhance brand affinity and increase penetration sharp surge in previous year. Product portfolio was

Sunrise brand delivered robust growth during the year

and further strengthened its market standing as the
leader in its core market of West Bengal.

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augmented with the launch of Max Masala in target continued to gain strong consumer traction on
markets. Innovative media campaigns, focused the back of best-in-class quality standards and
digital interventions and celebrity endorsements superior taste profile. These products are
with MS Dhoni continued to create buzz around currently available in Bihar and West Bengal.
the brand, resulting in sustained traction with During the year, value-added fresh dairy segment
consumers. The ‘YiPPee!’ brand continued was augmented with the launch of a new mango
to strengthen its consumer franchise flavoured lassi. The Business also introduced a
and consolidated its market standing as a bucket curd offering for its institutional customers.
strong No. 2 brand. In order to further broaden its portfolio,
the Business launched ‘Mishti Doi’, a traditional
– The Ready-To-Eat (RTE) category grew
delicacy of West Bengal, in cup format under
significantly in the institutional and domestic
the Aashirvaad Svasti brand. The Business also
segments led by Modern Trade and e-Commerce
launched Aashirvaad Svasti Easy Digest
channels. In order to enhance consumer
Milk – West Bengal’s first lactose-free milk in
convenience, innovative microwavable pouches
pouch format, to fulfil dairy needs for those
of products under the ‘Kitchens of India’ brand
seeking solutions to milk indigestion issues
were introduced in the US and are receiving
without compromising on nutrition and taste.
encouraging consumer response.
Aashirvaad Svasti Ghee continued to receive
In the Frozen Snacks category, the range of excellent product feedback and garner increasing
‘ITC Master Chef’ products comprising several consumer franchise. The Sunfeast range of
differentiated variants continues to garner milk shakes was augmented with the launch of
increasing consumer franchise. During the year, Protein Shake and Mango Smoothie and are
the Business expanded the portfolio by foraying being extended to target markets.
into the ‘plant based meat’ space under the
The ‘B Natural’ range of juices faced severe
‘ITC Master Chef’ brand. With rapidly evolving
disruptions during the peak summer season in
consumer tastes and preferences, this area is
FY 2021-22 due to the second wave of the
expected to offer substantial headroom for growth
pandemic. Amidst extremely challenging
over the medium term. In addition, four new
circumstances, B Natural continued to
products were launched in the retail segment.
deepen consumer connect by leveraging its
In a short span of time, the Business has expanded
‘goodness of fruit and fibre’ proposition. The product
availability to 100+ markets. Accessibility of the
portfolio was augmented with launch of
range is being further scaled up via e-Commerce
differentiated variants of ‘B Natural-Nutrilite’;
and direct-to-home models, with product
these ‘No added sugar’ products were developed
assortments being crafted for specific channels
leveraging LSTC’s expertise in nutrition and
in line with consumer demand.
Nutrilite’s ingredients. In recent years, the Business
– In the Dairy & Beverages Business, the has strengthened presence in the rapidly emerging
‘Aashirvaad Svasti’ fresh dairy portfolio comprising Direct to Consumer (D2C), Travel and QSR
pouch milk, pouch curd, lassi and paneer, segments. Partnerships with alternate delivery

In the Frozen Snacks category, the range of ‘ITC Master Chef’ products comprising
several differentiated variants continues to garner increasing consumer franchise.
During the year, the Business expanded the portfolio by foraying into the
‘plant based meat’ space under ‘ITC Master Chef’ brand.

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channels enhanced product availability in spite of – Acute shortage in container availability and steep
disruptions in traditional trade channels. increase in ocean freight rates adversely impacted
These strategic alliances along the vectors exports in the first half of the year. However,
of portfolio, product and positioning have laid a the business bounced back strongly in the second
strong foundation to enhance the market standing half, powered by the growing franchise of
of the B Natural range going forward. your Company’s brands amongst the Indian
diaspora. The Branded Packaged Foods
– In the Chocolates, Coffee & Confectionery
Businesses currently export to nearly 60 countries
Business, the Confectionery category witnessed
across the globe. Going forward, the Businesses
progressive recovery and continued to focus on propose to rapidly scale up exports across
building its premium portfolio leveraging categories by leveraging the brand equity of
‘Fantastik Choco Sticks’ and ‘Jelimals’. The Fantastik core brands such as Aashirvaad, Sunfeast and
range was augmented with the launch of a vanilla Kitchens of India and investment-led incentives
variant while the Jelimals range was enhanced with under the Government of India’s PLI Scheme.
the launch of ‘Jelimals Nutrition+’ (vitamin
– New launches across categories continue to garner
fortified jellies), ‘Jelimals Yummy Space Jellies’ –
excellent consumer response and are being scaled
an exciting format with space themed jellies
up in the target markets.
and ‘Jelimals Tasty Sparkles’.
Over the years, your Company has invested in setting
‘Fabelle’ chocolates continue to perform well in the
up state-of-the-art Integrated Consumer Goods
luxury segment and received encouraging product
Manufacturing and Logistics facilities (ICMLs) proximal
and market feedback. During the year, availability
to large demand centres. These facilities are at the
of Fabelle was enhanced through Quick Commerce
heart of your Company’s strategy to create structural
in Delhi and Bengaluru; alternate platforms
advantage by enhancing product freshness, improving
including the ITC e-Store, e-Commerce channels, market responsiveness, reducing the cost of servicing
food delivery aggregators and the takeaway menus proximal markets and ensuring the highest standards
of ITC Hotels continue to be leveraged to enhance of product hygiene, safety and quality. The ICMLs also
product accessibility. Fantastik Chocobar XL, enable scalability, besides setting new benchmarks in
launched last year in the popular segment at quality, safety, productivity and process excellence.
convenient price points, continued to garner
Your Company commissioned a new ICML at Medak,
positive consumer traction; availability of the
Telangana in March 2022. With this, ten ICMLs are
product was further scaled up during the year.
operational in locations proximal to large demand
– ‘Sunbean Beaten Caffe’, a unique ready-to-use centres enabling delivery of fresher products,
beaten coffee paste that produces a rich, creamy reduction in distance to market and higher cost agility.
and frothy cup of coffee, continues to receive Capacity utilisation at existing ICMLs continued
favourable response from discerning consumers. to be ramped up. Several of these manufacturing
The Business has also introduced a premium facilities represent industry leading gender diversity
‘Strong’ variant for consumers demanding a in the labour force. With every successive ICML
stronger cup of coffee. coming on-stream, the representation of women

The Branded Packaged Foods Businesses currently export to nearly 60 countries

across the globe. Going forward, the Businesses propose to rapidly scale up
exports across categories by leveraging the brand equity of core brands
such as Aashirvaad, Sunfeast and Kitchens of India and investment-led
incentives under the Government of India’s PLI scheme.

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has progressively increased, with the recent Vegetables and Marine categories respectively,
ICMLs at Pudukkottai and Medak having women as well as for incentives towards expenditure incurred
representation at 79% and 100% of the on-roll for branding and marketing in export markets.
labour force, respectively. The ICML units received
Your Company is well poised to strengthen its position
several prestigious awards and accolades during
as one of the fastest growing food companies
the year from leading industry bodies such as the
and the ‘most trusted provider of food products’
Confederation of Indian Industry (CII), Union Ministry
in the Indian market in line with its purpose to
of Labour & Employment, Food and Agriculture Centre
‘Help India Eat Better’. Your Company remains
of Excellence, etc. for their high standards of safety,
confident of rapidly scaling up the Branded
quality, operational excellence and benchmarks in
Packaged Foods Businesses leveraging the strong
green and sustainable manufacturing.
growth platforms nurtured over the years in chosen
The Business implemented several strategic cost categories which offer immense headroom for growth
management initiatives in areas such as supply chain and powerful purpose-led mother brands that have the
optimisation, smart procurement and productivity potential to be extended to address opportunities in
improvement through automation, leveraging new-age adjacent spaces. In addition, your Company’s deep &
technologies such as Industry 4.0 and smart utilities. wide multi-channel distribution network, with growing
These interventions aided in partially mitigating the presence in emerging channels such as e-Commerce,
steep escalation in input costs, absorbing start-up Modern Trade, on-the-go and institutional sales,
costs of new facilities and strategic investments in continues to deliver competitive advantage through
brand building for new categories viz. Dairy, Juices, superior product availability, visibility and freshness.
Chocolates and Coffee. Recent investments in establishing a world-class
A big thrust on India’s Food Processing sector, distributed manufacturing footprint have created a
which lies at the intersection of value-added solid foundation to secure structural advantage over
agriculture and manufacturing, can lead to significant time. Cutting-edge R&D platforms of your Company’s
job creation. The sector also holds immense potential LSTC are driving agile innovation and faster
to enhance rural incomes and help manage food turnaround times for introduction of differentiated &
inflation. Recognising this potential and headroom first-to-market products catering to constantly evolving
for growth in the Indian market, your Company has consumer needs. Investments in leading-edge digital
made significant investments in food processing and technologies and platforms continue to be stepped up
remains focused on establishing itself as the leading across the value chain to drive competitive advantage.
player in the branded packaged foods industry.
Personal Care Products
The PLI Scheme for the food processing industry,
with an estimated outlay of ` 10900 crores, is The operating environment during the year under
expected to not only boost farmer incomes but also review was rendered extremely challenging with
infuse fresh investments, build Indian brands for the the twin effects of recurrent pandemic waves and
global market and promote exports. Your Company persistently high levels of commodity inflation.
has been included under the PLI Scheme towards Industry volumes remained under pressure due to
sales-based incentives in the Ready to Eat, Fruits & sharp increase in inflation constraining household

Your Company is well poised to strengthen its position as one of the

fastest growing food companies and the ‘most trusted provider of food products’
in the Indian market in line with its purpose to ‘Help India Eat Better’.

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budgets, especially in the latter half of the year. your Company’s Packaging and Printing Business
Rural markets also remained subdued, with the and Life Sciences and Technology Centre (LSTC) and
second wave of the pandemic causing significant are a testament to your Company’s philosophy of
disruptions. Further, the Health & Hygiene segment, embedding sustainability into its business value chains.
which had grown significantly last year, witnessed
‘Savlon’ reinforced its position as one of the most
marked volatility in demand in line with the varying
preferred brands for expert germ protection. In spite of
intensity of the pandemic, albeit remaining above
demand volatility in line with COVID caseload
pre-pandemic levels.
intensity, sales of Health and Hygiene portfolio
Your Company’s Personal Care Products Business remains significantly above pre-pandemic levels.
continued to demonstrate agility and responsiveness Leveraging the brand’s strong ‘germ-protection’
to the dynamic market conditions leveraging its core equity, the portfolio was augmented with the launch of
strategic levers of building brands with purpose, ‘Savlon Powder Handwash’ in consumer-friendly
first-in-category innovations, focus on categories of low unit packs to democratise the category by
the future and accelerating presence in emerging generating trials and driving penetration. The brand
channels. Improved product availability and agile continues to be the clear market leader in Surface
response to demand volatility enabled the Business Disinfectant spray category. As per IQVIA survey,
to navigate the challenging operating environment Savlon has emerged as the ‘Doctors’ Most Trusted’
during the year. brand in Antiseptic Liquid, Handwash and
In the Personal Wash segment, ‘Fiama’ continued Surface Disinfectant Spray categories.
to strengthen its brand equity of ‘joyful bathing and The Business leveraged the ‘Nimyle’ brand and the
mood upliftment’, registering healthy growth over the equity associated with ‘Nim’ to expand presence
previous year. This was driven by increase in direct in the Home Hygiene segment. During the year,
distribution and household penetration and growth Nimyle recorded strong growth and strengthened its
in e-Commerce channel. Catering to the emerging leadership position in West Bengal and Odisha.
consumer preference for Naturals, the Business
The brand was rolled-out nationally and continued
launched innovative offerings in the gel bar format viz.
to garner increasing consumer franchise backed by
‘Fiama Amyris & Cedarwood Oil’ and ‘Fiama Green
clutter-breaking communication anchored on Naturals
Apple & Brazilian Orange Oil’. The Vivel range of
proposition coupled with product’s efficacy against
soaps continued to be well received by consumers.
virus strains. ‘Nimeasy’ - an enzyme-based
Both Fiama and Vivel have been frontrunners in
eco-friendly Dishwash Gel launched recently
adopting sustainable packaging. The carton soap
continued to gain encouraging response premised
portfolio for both brands has fully migrated to recyclable
on its differentiated positioning.
paperboard cartons; Vivel wrapped soap portfolio
has also been transitioned to recyclable packaging. The Fragrance industry continued to be impacted
Further, Fiama Shower Gel bottles are now made with on account of the pandemic as mobility restrictions
30% Post-Consumer Recycled (PCR) material. reduced occasions of product use. As a result,
These innovative packaging solutions have been category penetration levels have witnessed a decline
developed leveraging the synergistic capabilities of over the last two years. Notwithstanding these

Your Company’s Personal Care Products Business continued to demonstrate agility

and responsiveness to the dynamic market conditions leveraging its core strategic
levers of building brands with purpose, first-in-category innovations, focus on
categories of the future and accelerating presence in emerging channels.

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challenges, the Business registered strong growth as well as in the fast-growing D2C channel, during
on a relatively soft base and is expected to pick-up to the year, your Company acquired a minority stake in
pre-pandemic levels in the near term. The Business ‘Mother Sparsh’, a premium ayurvedic and natural
continued to introduce innovative products during personal care startup, with focus on mother and baby
the year; the range was augmented with the launch care segments. Further, in April 2022, your Company
of L’amante Click & Brush Perfume Pen, a unique acquired a minority stake in ‘Mylo’, a full stack
gel-based perfume in the premium segment as well community eco-system which addresses the parenting
as four new variants of deodorants - Floral Zest, needs of consumers. The investments will enable
Garden Mystique, Ocean Zest, Spice Mystique. The your Company to progressively enhance presence
Business also launched ‘Engage ON Chhota pocket’ in this area which has enormous growth potential,
as a value-for-money offering and a new ‘Moderna’ besides leveraging its early mover advantage in the
range designed especially for Modern Trade and rapidly evolving D2C space.
e-Commerce channels. Leveraging the capabilities of
The Business continued to leverage creative
your Company’s Life Sciences and Technology Centre,
brand campaigns and social media platforms
the Business launched ‘Engage Fragrance Finder’,
towards deepening consumer engagement through
an AI-powered, technology-enabled experience
purpose driven brands across its portfolio.
that aids the selection of fragrances based on the
Vivel’s #RespectWorkForHome campaign, which
consumer’s preferences and occasion of usage.
subtly spotlights the chores enabling smooth
The ‘Engage L’amante’ and ‘EDW Essenza’ range of
functioning of a household as being no different
fragrances continues to receive encouraging response
from managing work at a professional workplace,
from discerning consumers and is well positioned to
resonated well with the target consumers. In order
address the increasing trend of premiumisation
to promote mental wellness, Fiama launched
witnessed particularly in the e-Commerce channel.
‘Virtual Therapy’ sessions in association with
The Business continued to strengthen its presence ‘MINDS Foundation’ to encourage proactive
in the premium skincare space through its digital-first conversations and awareness on mental well-being.
brand, ‘Dermafique’ and in the popular space through
Your Company is setting up a state-of-the-art
‘Charmis’. Growth in the skincare category was driven
Personal Care and Home Care products
by sharply focused marketing initiatives, product and
manufacturing unit in Uluberia, West Bengal, in line
brand refresh and vibrant communication campaigns.
with its strategy of building in-house manufacturing
In keeping with its strategy of winning in emerging capabilities for products with unique formulations,
channels, the Business bolstered its presence in the enhancing supply chain agility and responsiveness,
rapidly growing e-Commerce channel and continues to and reducing distance to market.
widen its assortment of offerings tailored to consumer
Manufacturing excellence continues to be accorded
needs. During the year, salience of the e-Commerce
the highest priority, with all three Company-owned
channel stood at double digits for the Business.
units at Haridwar, Manpura and Guwahati continuing
In furtherance of your Company’s strategy to scale up to be Five-S certified by the Quality Circle Forum
presence in the naturals and ayurvedic space of India. The Haridwar unit won the HR Excellence

In furtherance of your Company’s strategy to scale up presence in the naturals and

ayurvedic space as well as in the fast-growing D2C channel, during the year,
your Company acquired a minority stake in ‘Mother Sparsh’, a premium
ayurvedic and natural personal care startup, with focus on mother and
baby care segments and in ‘Mylo’, a full stack community eco-system
which addresses the parenting needs of consumers.

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‘Platinum’ category award for large-scale organisations Life Sciences and Technology Centre to launch
from the Professional Network Group of India for differentiated products of superior quality.
‘Excellence in COVID Management’. The unit was The Notebook portfolio was augmented with the
also conferred Best Environmental Practices Award launch of ‘A5’ notebooks under the ‘Classmate Pulse’
by CII in May 2021. range catering to the youth segment. The recently
Your Company’s strategic focus in recent years launched ‘Classmate Interaktiv’ series was also
has been to invest behind emerging need spaces scaled up during the year and continues to receive
spanning health & hygiene, fragrances, naturals and encouraging consumer response. During the year,
liquids. This has been supported by superior consumer the Business strengthened its reach in the youth and
insight discovery processes, agile innovations, economy segments of the notebook industry through
purpose-led brands and impactful communication in ‘Classmate Pulse’ and ‘Saathi’ brands respectively.
digital and conventional media. Access to institutional The Institutional channel was also leveraged by
strengths such as robust R&D platforms resident in increasing the reach to educational institutions.
LSTC, state-of-the-art in-house packaging knowhow The Writing Instruments portfolio was bolstered
and your Company’s multi-channel distribution with the launch of ‘Classmate UVO’ pens for
network continue to be leveraged to rapidly scale up school students.
the Business. Your Company, with its future-ready The multi-channel capability of your Company’s
portfolio and purpose-led brands, is well positioned strong distribution network was leveraged to enhance
to seize the opportunities and emerge as a significant availability and drive sales. Proactive management
player in this space. of inventory and receivables helped reduce working
capital intensity and manage risks associated with a
Education and Stationery Products
highly uncertain operating environment. The Business
The Education and Stationery products industry, sustained its leadership position on e-Commerce
which was severely impacted in FY 2020-21 due to platforms through consistent availability of customised
the pandemic, witnessed gradual recovery towards product assortments backed by focused interventions
the end of the year under review driven by progressive to enhance consumer traction. Consumer engagement
resumption of physical classes at educational was further enhanced through Classmateshop.com,
institutions; however, sales remained below a D2C platform, which facilitates brand affinity
pre-pandemic levels. Inflationary headwinds in through creative product personalisations.
commodity prices also exerted pressure on margins. During the year, Classmateshop.com was awarded
The Business reinforced its market leadership position ‘Silver’ in the ET Brand Equity Disruption Awards
in the industry, delivering a competitively superior under the Education category.
performance driven by portfolio premiumisation, The Business continues to ramp up capacity
judicious pricing actions, enhanced presence in utilisation of its dedicated notebook manufacturing
alternate channels and continued focus on cost and facility at Vijayawada. Equipped with state-of-the-art
working capital management.
technology, the facility enables the Business to
The Business continued to leverage its innovation develop highly differentiated notebook formats,
platform in collaboration with your Company’s drive cost reduction and address opportunities in

The Education and Stationery Products Business reinforced its market leadership
position in the industry, delivering a competitively superior performance driven by
portfolio premiumisation, judicious pricing actions, enhanced presence in alternate
channels and continued focus on cost and working capital management.

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overseas markets. During the year, the Business enrichment and cost optimisation. The Business
expanded its exports footprint to newer markets and mitigated inflationary headwinds during the year
successfully onboarded large global retailers by leveraging economies of scale, driving sourcing
leveraging capabilities at the aforestated facility. efficiencies and ensuring smart procurement.
The Classmate and Paperkraft range of notebooks In line with its vision to enable the pursuit of devotion
leverage your Company’s world-class fibre line at for every consumer, Mangaldeep focused its brand
Bhadrachalam - India’s first ozone treated elemental interventions on digital media to reach out to devotees
chlorine free facility - and embody the environmental who were unable to visit places of worship during
capital built by your Company in its paper business. the pandemic. Interventions such as ‘Live Pujas’
The Business continued to scale up the premium initiated during the first wave of the pandemic were
Paperkraft range of world-class notebooks using further scaled up during the year, thereby deepening
Forest Stewardship Council (FSC®) certified paper, engagement with devotees. The Mangaldeep App,
made at your Company’s paper mill. which has garnered over 1 million downloads,
With over 250 million school going students, India has continues to play a key role in the devotional journey
one of the largest education systems in the world. The of consumers.
Indian Education and Stationery Products industry The Business continues to strengthen its core portfolio
holds immense potential driven by growing literacy,
through focused media investments, consumer-centric
increasing enrolment ratios, the Government’s
portfolio extensions and enhanced accessibility.
continued thrust on the education sector and a
Innovative product offerings such as the Upaveda
favourable demographic profile of the country’s
range of ‘Naturals’ agarbattis drawing inspiration from
population. Your Company, with its strong brands,
ancient scriptures were launched during the year
robust product portfolio, collaborative linkages with
under the Mangaldeep brand.
small & medium enterprises and superior distribution
network is well poised to further strengthen its Over the years, the Business has implemented
leadership position in the industry. several measures to enhance the competitiveness
of the agarbatti value chain in India. These include
Incense Sticks (Agarbattis) and Safety Matches import substitution and backward integration of
After the disruptions witnessed in the previous year, sourcing raw materials and manufacturing raw battis
the Agarbatti industry surpassed pre-pandemic levels using indigenous inputs. The Business has been
during the year, driven by gradual opening of markets a pioneer in developing domestic manufacturing
and places of worship across the country. capabilities for raw battis and is also working
closely with the Government under the aegis of the
‘Mangaldeep’ Agarbattis and Dhoop enhanced
National Bamboo Mission and other nodal agencies
household penetration leveraging its robust
of state governments for cultivating bamboo
product portfolio. The Business continued to drive
plantations in the country.
brand salience through sharply focused marketing
interventions, and a differentiated and superior product The proactive measures implemented by
experience with a deep connect to devotion. Proactive your Company, as highlighted above, sub-serve the
steps were also taken towards driving product mix national priorities of employment generation and

The Agarbattis Business continues to strengthen its core portfolio through focused
media investments, consumer-centric portfolio extensions and enhanced accessibility.
The Mangaldeep App, which has garnered over 1 million downloads, continues to
play a key role in the devotional journey of consumers.

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provide a source of competitive advantage to the demographic profiles, vast geographical landscape
Business while contributing towards enhancing along with multifaceted socio-economic factors pose
income of bamboo farmers in the agarbatti stick and a high degree of complexity for distribution of FMCG
raw batti manufacturing value chain. products in India. Given the varied set of needs and
challenges associated with each channel, TM&D
Amidst sluggish demand conditions in the Safety
continues to sharpen channel-specific strategies
Matches industry, the Business strengthened its
to efficiently service consumer demand across the
market leadership position by leveraging its robust
country. Critical insights into consumer behaviour
product portfolio and strong distribution network
and channel-specific trends gained over the years
backed by an agile and highly responsive supply
are being continuously leveraged to deliver superior
chain. The Business continues to focus on scaling
performance in terms of availability, visibility and
up the share of value-added products in its portfolio
freshness. The rapid growth of Modern Trade &
and enhancing supply chain efficiency by sourcing
e-Commerce channels and the emergence of several
products manufactured closer to markets.
new players in recent years, have also warranted
TRADE MARKETING & DISTRIBUTION crafting of differentiated market/outlet specific
strategies to seize the emergent opportunities.
Your Company’s Trade Marketing & Distribution
(TM&D) vertical demonstrated a high degree of Your Company’s multi-channel distribution network,
agility and responsiveness to mitigate the heightened which facilitates availability of its products in nearly
uncertainty and market disruptions caused by the seven million retail outlets, was further strengthened
pandemic during the year. Concerted actions were during the year with the addition of new markets and
taken across all nodes of operations to ensure outlets to its direct servicing base. Market and outlet
efficient market servicing and availability of your coverage were stepped up to appx. 1.4x and 1.1x
Company’s products. These include realignment of respectively over the previous year. In rural markets,
distribution infrastructure, deployment of innovative your Company continued to roll out market-specific
delivery models, strategic partnerships, enhanced interventions to enhance direct coverage on the basis
usage of digital technologies and focused approach to of socio-economic indicators and market potential to
accelerate growth in emerging channels. achieve growth rates higher than industry and support
enhanced scale of operations going forward. Direct
Against the backdrop of significant variability in
reach enhancement in rural markets was supported
demand, TM&D continued to focus on shorter
through a hub and spoke distribution model with the
demand planning cycles, sharper demand forecasting
expansion of rural stockists network to 1.4x over
leveraging data analytics, optimised nodes of
previous year and collaborations with rural-focused
distribution and direct-to-customer/market deliveries to
eB2B players. Your Company’s extensive e-Choupal
ensure timely access to your Company’s wide range
network and deep connect with rural entrepreneurs
of products.
were also leveraged in key geographies to build
The dynamic interplay of varied and evolving local connect and carry out extensive consumer
consumer preferences, multiplicity of channels engagement activities. These initiatives helped
including emergence of new channels, diverse in substantially mitigating the impact of disruptions

Your Company’s multi-channel distribution network, which facilitates availability

of its products in nearly seven million retail outlets, was further strengthened
during the year. Market and outlet coverage were stepped up to
appx. 1.4x and 1.1x respectively over the previous year.

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in the traditional wholesale channel and enhancing especially during times of limited mobility or
distribution reach in rural markets. The Food Service absence of salesforce, using Machine Learning
and Institutional channels also registered robust for hyper-personalisation.
growth during the year leveraging existing
During the year, TM&D continued to focus on
partnerships and enhancement of product range.
enhancing availability in markets proximal to its
Further, new routes-to-market were unlocked
ICMLs through increased awareness levels, product
during the year through several strategic partnerships
to deepen capabilities catering to specialised trial generations, expansion of distribution reach
segments including ‘on-the-go’ consumption, and consumer promotions.
direct marketing and QSRs. The Modern Trade channel witnessed robust growth
Urban markets continue to witness increasing channel on the back of improved mobility and store footfalls.
shift with proliferation of emerging channels/eB2B In addition, reach expansion in Tier 2 and Tier 3 cities
players impinging on the performance of traditional coupled with omni channel presence also aided
wholesale/retail channels. In line with its growth. Cash and Carry format, which operates
multi-channel strategy, your Company continued to in the B2B space, continued to grow rapidly. Your
invest in strengthening traditional trade by leveraging Company’s business with Modern Trade continued
digital technology. Continuing its focus on automation, to grow on the back of a format-based assortment
data-led insighting and machine-learning enabled approach catering to the needs of a diverse set of
solutions, your Company has implemented a shoppers with category specific sell-out
slew of innovations to drive field-force productivity strategies. Agile supply chain initiatives including
and performance in urban markets. Customised collaborations with eco-system partners led to
servicing basis outlet potential and retail engagement enhanced operational and execution efficiencies.
programmes were deployed to stimulate demand
for your Company’s products with enhanced focus Significant increase in internet penetration led by
on premium grocery outlets. smartphones, growing adoption of digital payments,
attractive loyalty programmes, wide assortment
As reported earlier, your Company was amongst the
of products and faster deliveries continue to drive
frontrunners in the industry to launch an app-based
the rising salience of e-Commerce channel. Your
anytime ordering system for retailers – UNNATI.
Company collaborated with leading e-Commerce
The digitally powered eB2B platform was rapidly scaled
platforms on all aspects of operations i.e. category
up during the year covering nearly 3 lakh outlets
within a short span of time since national launch development, marketing, supply chain and customer
facilitating sharp and direct engagement with retailers, acquisition. This was augmented by development
superior analytics, personalised recommendations of exclusive and relevant pack assortments,
of hyperlocal baskets based on consumer purchase driving ‘Digital First’ brands and enabling platform
insights, and deeper brand engagement. Your discoverability through jointly curated campaigns.
Company also scaled up VIRU (Virtual Salesman), Joint Business Plans, built and executed in close
a technology solution to enable contactless ordering co-ordination with e-Commerce platforms, further
by retailers and direct communication with trade, consolidated the market standing of your Company.

Your Company was amongst the frontrunners in the industry to launch an app-based
anytime ordering system for retailers – UNNATI. The digitally powered eB2B platform
was rapidly scaled up during the year covering nearly 3 lakh outlets
within a short span of time since national launch.

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Further, the presence of your Company’s brands visualisation tools and predictive analysis is being
in Health and Hygiene space was strengthened increasingly leveraged to enable speedy and accurate
on e-Commerce channel with the addition of new data capture, enable real-time informed decisions and
partners. Sales through the e-Commerce channel aid in scientific design of trade inputs to drive sales.
stood at 3x over FY 2019-20 levels, taking the Several interventions were undertaken by TM&D
channel salience to 7%. during the year to enhance operational efficiency and
‘ITC e-Store’, your Company’s exclusive D2C platform, productivity in order to drive structural competitive
is now operational in 15 cities and continues to advantage. These include delayering of operations
receive excellent consumer response. Powered by through direct shipments to customers, smart buying
state-of-the-art digital technology and robust fulfilment including efficient freight procurement and supply
infrastructure, the platform offers consumers chain & network optimisation.
on-demand access to a wide range of your Company’s During the year, your Company completed setting
FMCG products across 45+ categories and over up of two state-of-the-art Ancillary Manufacturing
700 products under one roof. Your Company continues cum Logistics Facilities (AMLF) - at Pudukkottai and
to scale up its presence in the rapidly growing emerging Kapurthala. These state-of-the-art automated facilities
channels and has further expanded availability of its are co-located with the respective ICMLs and are
products with new trade partners on Quick Commerce in line with the strategy of minimising total delivered
and Social Commerce platforms. cost and enhancing market responsiveness, besides
The scale and diversity of your Company’s distribution reducing complexity in operations and
network continues to be a critical lever to enhance cost of servicing.
market presence, gain valuable insights into consumer Your Company continues to invest in augmenting
& trade behaviour and provide speed and scale of the depth and width of its distribution network while
execution for launches across geographies. In order adopting a differentiated approach to address the
to effectively leverage new routes-to-markets and unique needs of its diverse FMCG product portfolio,
meet the assortment needs of emerging channels, market segments and trade channels. Cutting-edge
your Company also executed over 110 new product digital technologies are being scaled up towards
launches across target markets besides extending strengthening TM&D’s real time operations and
distribution reach of several existing products execution platform spanning synchronised planning
in the portfolio. and forecasting, NextGen agile supply chain,
TM&D continues to leverage cutting-edge digital and smart demand capture and fulfilment.
technologies to drive productivity, improve market With its best-in-class systems and processes,
servicing, draw actionable insights for sharp-focused an agile and responsive supply chain, and a
interventions, augment sales force capability synergistic relationship with its channel partners,
and deepen connect with retailers. Technology TM&D’s distribution highway is a source of sustainable
enablement in the form of customised mobility and competitive advantage for your Company’s FMCG
routing solutions, machine learning algorithms, data Businesses and is well poised to support the rapid
science models, data analytics comprising insightful scale up of operations in the ensuing years.

‘ITC e-Store’, your Company’s exclusive D2C platform, is now operational in 15 cities
and continues to receive excellent consumer response. Powered by state-of-the-art
digital technology and robust fulfilment infrastructure, the platform offers consumers
on-demand access to a wide range of your Company’s FMCG products
across 45+ categories and over 700 products under one roof.

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HOTELS responded with agility focusing on alternate

customer segments and revenue streams, such as
The global Travel & Tourism industry has been
domestic leisure, staycations, long weekend stays
severely impacted by the COVID pandemic over
and weddings. Receding intensity of the second
the last two years. The industry’s contribution to
wave of the pandemic coupled with pickup in the
global GDP, which had contracted to 5.3% in 2020
pace of vaccination gradually improved consumer
from 10.3% in 2019, recovered to 6.1% in 2021.
confidence for travel; events such as weddings &
As per estimates of the World Travel and Tourism
social gatherings also enabled the Business to garner
Council, the Travel & Tourism sector, which had
revenues. In the second half of the year, green shoots
suffered 62 million job losses in 2020, could recover
of recovery in business travel became visible, leading
only 18 million jobs in 2021. According to United
to improved occupancy levels in business hubs.
Nations World Tourism Organisation (UNWTO), while
While the third wave in January 2022 briefly halted
international tourist arrivals witnessed a 4% increase
the recovery momentum, the industry bounced back
in 2021 on a soft base, the same remains below
towards the end of the year with exit occupancies
pre-pandemic levels by 72%.
surpassing pre-pandemic levels and business travel
The Travel & Tourism sector holds prime importance sentiments improving. While Average Room Rate
for the Indian economy as well, with its direct and improved over the previous year, it remained below
indirect economic impact estimated at appx. 10% of pre-pandemic levels.
GDP (at pre-pandemic levels). The extensive tourism The Business continued to focus on its strategy
value chain spanning hotels, travel agents, airlines, of offering a host of curated propositions across
tour operators, restaurants, tourist transporters and accommodation, dining and banqueting to augment
guides, etc. results in a huge economic multiplier revenues across properties. This included
impact, ranking it amongst the highest across introduction of special packages offering value
industries on this count. India’s Travel & Tourism and flexibility targeting short getaways/staycations,
sector has also been severely impacted by the revamped packages for the MICE (Meeting,
pandemic since early 2020. Domestic Air Passenger Incentives, Conferencing, Exhibition) & wedding
traffic declined by over 40% and international segments and extension of additional benefits to
tourist arrivals degrew by 87% during 2021 over members of the Club ITC Loyalty programme.
pre-pandemic levels, leading to cascading effect The Business also catered to the growing need of
across the entire hospitality industry. food delivery and take away with ‘Gourmet Couch by
After a severely disrupted FY 2020-21, India’s ITC Hotels’, offering signature cuisines and specially
Travel & Tourism sector witnessed a smart recovery designed menus based on occasions and festivities.
even as recurrent waves of the pandemic caused The Business continued to reinforce its commitment
severe disruptions on an intermittent basis. Periodic towards health & hygiene with ‘WeAssure’ – a
restrictions on travel, public gatherings and restaurant/ programme designed in collaboration with medical
banquet operations induced by the second wave professionals & disinfection experts to reassure guests
of the pandemic severely impacted the industry’s and to provide best-in-class experience in hygiene
performance in the first half of the year. The Business and safety at your Company’s iconic Hotels.

The Hotels Business continued to focus on its strategy of offering

a host of curated propositions across accommodation, dining and
banqueting to augment revenues across properties.

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The programme incorporates cutting-edge technologies – Welcomhotel Katra in Jammu & Kashmir and
to provide a pathogen-free environment across all Welcomhotel Chail in Himachal Pradesh (managed
ITC owned properties and has received a Platinum properties) offering a distinct repertoire of premium
Level certification from M/s. DNV (one of the world’s accommodation and signature dining.
leading certification bodies). The Business continues
These properties have received excellent
to invest in creating contactless technologies and
response from guests within a short span of time.
ensuring social distancing protocols.
The Welcomhotel brand now consists of 23 hotels and
Against the backdrop of a challenging operating over 2,600 keys. With a strong pipeline of properties
environment, Segment Revenue for the year stood to be onboarded under the management contract
at ` 1285.00 crores representing a growth of 104.8% route, the brand is well poised for rapid scale up in line
while Segment EBITDA stood at ` 78.03 crores with the ‘asset-right’ growth strategy of the Business.
against a loss of ` 268.60 crores in the previous
The ‘Fortune’ brand continues to maintain its
year. Segment PBIT for the second half of the year
pre-eminent position in the Mid-market to
turned positive against a loss of ` 107.43 crores in the
Upscale segment, with the positioning of
corresponding period of the previous year.
‘First class, full service hotels – an affordable
Your Company’s Hotels Business remains amongst alternative’, comprising 39 properties and nearly
the fastest growing hospitality chains in the country 3,000 rooms. The ‘WelcomHeritage’ brand continues
with 113 properties and over 10,700 rooms under to create best-in-class authentic experiences with
four distinct brands – ‘ITC Hotels’ in the Luxury an operational inventory of 37 hotels comprising
segment, ‘Welcomhotel’ in the premium segment, over 900 rooms.
‘Fortune’ in the Mid-market to Upscale segment and
Two new brands were introduced during the year –
‘WelcomHeritage’ in the Leisure & Heritage segment.
‘Mementos’ in the luxury segment & ‘Storii’ in the
ITC Hotels was recognised as the best Luxury Hotel
premium segment. ‘Mementos by ITC hotels’
Chain for the 3rd consecutive year at Travel + Leisure
brings together a collection of unique hotels across
India’s Best Awards 2021. In the premium segment,
varied destinations ranging from modern marvels,
the ‘Welcomhotel’ brand continues to strengthen its
hidden retreats to historic treasures, leaving guests
equity with refreshed and distinctive positioning of
with experiences and memories which become prized
‘Enriching Experiences’. During the year, nine new
mementos long after their visit. ‘Storii by ITC Hotels’
properties were added to the Group portfolio, including
is positioned as a collection of handpicked properties
four under the Welcomhotel brand –
offering unique bespoke experience-led stays,
– Welcomhotel Bhubaneswar located in Odisha in harmony with the environment and the local
offering 107 guest rooms and suites, which draws community. Several agreements/memoranda of
inspiration from the magnificence of 500+ temples understanding have already been signed under
that adorn the city; these brands; properties are expected to be launched
in a phased manner over the next few quarters.
– Welcomhotel Guntur located in Andhra Pradesh
offering 104 guest rooms inspired by the cultural Leveraging its expertise and experience in the domain
ethos of the region; of sleep, the Business launched its signature ‘Sleeep’

Two new brands were introduced during the year – ‘Mementos’ in the
luxury segment & ‘Storii’ in the premium segment. ‘Mementos by ITC hotels’ brings
together a collection of unique hotels leaving guests with experiences and memories
which become prized mementos long after their visit. ‘Storii by ITC Hotels’ is
positioned as a collection of handpicked properties offering unique bespoke
experience-led stays, in harmony with the environment and the local community.

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Boutiques across the country, offering a wide range increase the number of LEED® Zero carbon
of premium home bedding products with both online certifications, and reduce carbon emission levels.
and offline retail options. These boutiques, present
Digital investments continue to be leveraged
across seven ITC Hotels, have received encouraging towards facilitating guest acquisition, enhancing
response and plans are on the anvil to scale up guest experience, augmenting revenue generation
operations going forward. and driving operational efficiency. During the year,
The world-class ambience of your Company’s luxury the managed properties portfolio was seamlessly
hotels continues to be leveraged for gourmet luxury integrated with the contemporary cloud based central
chocolates under the Fabelle brand with exclusive reservation and distribution system of the Business.
boutiques across eight ITC Hotels and kiosks The ITC Hotels website was also refreshed with
at four Welcomhotels. additional functionalities to cater to segment specific
customer requirements and leverage advanced
During the year, ITC Grand Goa was recognised as
analytics to provide a single window platform for
the ‘Best Wedding Destination’ and ITC Royal Bengal
brands across your Company’s Hotels Business.
as the ‘Best Bleisure Hotel’ by Travel + Leisure India’s
During the year, the Business also launched its full
Best Awards 2021. ITC Maurya was also recognised stack ITC Hotels Mobile App with cutting-edge user
as the ‘Favourite Indian hotel’ for food and drinks experience enabling swift and easy access to Room
at the Conde Nast Traveller Readers’ awards. and F&B Reservations, Food delivery, loyalty benefits
‘Responsible Luxury’ continues to guide business and a host of exclusive offers. The App continues to
best practices in line with the ‘Triple Bottom Line’ receive good response within a short span of time and
philosophy of your Company. ITC Hotels and is being leveraged effectively to enhance customer
Welcomhotels have achieved 2030 Carbon emissions engagement and enable revenue growth.
targets basis COP 21 Paris agreement (as per the Over the years, your Company has expanded its
Hotel Decarbonisation report issued by International footprint in the Luxury and Upper Upscale segments
Tourism Partnership). Furthering your Company’s of the Indian hospitality industry and has created 15
Responsible Luxury ethos, ITC Grand Chola at iconic properties comprising around 3,600 rooms
Chennai and ITC Gardenia at Bengaluru have across the country. Construction of ITC Narmada
received LEED® Zero Carbon Certification, in addition in Ahmedabad is progressing well and the hotel
to ITC Windsor at Bengaluru which achieved the is expected to be commissioned shortly.
prestigious accreditation last year. Together, these Your Company’s ‘asset-right’ strategy envisages a
properties are the first three hotels in the world to substantial part of incremental room additions,
receive the LEED® Zero Carbon Certification. Further, going forward, to accrue through management
Welcomhotel Guntur, Welcomhotel Bhubaneswar contracts. The Business is witnessing growing
and Welcomhotel Chennai received the prestigious interest amongst property owners to partner with its
LEED® Platinum Certification by USGBC (U.S. Green iconic brands resulting in healthy generation of leads
Building Council)/IGBC (Indian Green Building Council). and pipeline for management contracts. The Business
Going forward, the Business will continue to further is confident of rapidly scaling up revenues through
enhance the renewable electrical energy portfolio, this route going forward.

As a testament to your Company’s ‘Triple Bottom Line’ philosophy and Responsible

Luxury ethos, ITC Windsor, Bengaluru achieved the distinction of being the first hotel
in the world to achieve LEED® Zero Carbon Certification. ITC Grand Chola, Chennai
(largest hotel in the world to receive this Certification), and ITC Gardenia, Bengaluru
also received the LEED® Zero Carbon Certification during the year.

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As reported earlier, your Company remains committed augmenting value added paperboard & in-house
to aggressively implement its ‘asset-right’ strategy, pulp manufacturing capacity and creating superior
focus on sweating existing assets, create additional distribution infrastructure, product & process
revenue streams and pursue alternate structures innovation, digital interventions including Industry 4.0
in line with industry recovery dynamics towards continue to provide the Business sustainable
engendering the next horizon of growth as also competitive advantage. The Business fortified its
enhancing value creation. clear leadership in the Value Added Paperboard
With its highest standards of hygiene and safety, (VAP) segment through the introduction of innovative
portfolio of world-class properties, iconic cuisine new products customised for end-use industries
brands and best-in-class service levels anchored on and maintaining best-in-class service levels for key
‘Responsible Luxury’ ethos, your Company is well customers. The Business is also a leading player
placed to sustain its pre-eminent position in the in the eco-labelled products segment as well as the
Indian Hospitality industry. premium recycled paperboards space.
The Business demonstrated agility amidst supply
PAPERBOARDS, PAPER AND PACKAGING
chain disruptions and achieved robust growth in
Paperboards & Specialty Papers domestic and export markets while reinforcing
its position as a reliable supply chain partner.
After a sharp decline in FY 2020-21, global demand
for Paper & Paperboards witnessed a growth of This was enabled through strategic partnerships,
about 10% in FY 2021-22. Paperboards segment is proactive supply chain management and agility in
estimated to have grown faster at about 11-13% on execution. The Business expanded its footprint in key
the back of robust demand from end-user industry geographies such as UK, West Europe, Middle East
segments. Higher global demand for virgin grades and the Mediterranean region, enhancing its share of
and continued supply chain disruptions led to business with leading paper merchants.
international fibre prices remaining elevated Your Company is actively engaged in developing
throughout the year. Writing & Printing Paper, and promoting suitable paper and paperboard
which had degrown significantly in FY 2020-21, substrates to replace single-use plastics. ‘FiloPack’
grew at a moderate pace of 5-7% with educational and ‘FiloServe’ under the ‘Filo’ series are certified
institutions and offices continuing to remain partially as ‘100% Recyclable’ by Central Pulp & Paper
closed in the course of the year. The Indian industry Research Institute (CPPRI), while ‘OmegaBev’ and
witnessed broad based uptick in demand across ‘OmegaBarr’ under the ‘Omega’ series are certified
most end-user segments driven by Consumer Goods, as ‘Bio-degradable under compostable environment’
Pharmaceuticals, Food Service and e-Commerce. by Central Institute of Petrochemicals Engineering &
Despite significant operational challenges due to the Technology (CIPET). These products, which serve as
pandemic and continued global supply chain alternatives to plastic coated containers, cups and
disruptions, the Business achieved record volumes other deep freeze applications, registered robust
and higher realisations during FY 2021-22. growth during the year and continue to gain popularity
Structural interventions across the value chain with increasing awareness levels amongst customers.
including, inter alia, developing high yielding clones, The portfolio was also augmented with the launch of

The Paperboards & Specialty Papers Business fortified its clear leadership in the
Value Added Paperboard (VAP) segment through the introduction of innovative new
products customised for end-use industries and maintaining best-in-class service
levels for key customers. The Business is also a leading player in the eco-labelled
products segment as well as the premium recycled paperboards space.

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a new range of Specialty Papers for e-Commerce/ The Business continues to make structural
courier envelopes and paper tapes. The Business is interventions to reduce dependence on imported pulp,
stepping up investments in this fast-evolving space enabling substantial reduction in operating costs.
which holds immense growth potential supported by Significant increase in in-house pulp production was
the R&D capabilities of your Company’s Life Sciences achieved through strategic interventions, Industry
and Technology Centre and through external 4.0 initiatives and improved wood mix. Capacity
collaborations with global specialists. To rapidly scale utilisation of Bleached Chemical Thermo Mechanical
up its future-ready product portfolio through Pulp mill (BCTMP) at the Bhadrachalam unit touched
cutting-edge innovation, the Business has also set up a record high during the year. Initiatives such as
a dedicated ‘Nextgen Cell’ which is actively engaged bund plantation and scaling up plantations in new
in building a robust innovation pipeline. catchment areas in Odisha and Chhattisgarh have
During the year, the Business delivered robust enabled procurement of more than 10,000 MT of wood
performance in the Specialty Papers segment. from these areas, with further potential for increasing
Market standing stood enhanced during the year cost-effective access to fibre in the future.
driven by product mix enrichment, diversification of the
The Business has been practising the principles
customer base and launch of innovative products such
of Total Productive Maintenance (TPM), Lean and
as anti-viral and anti-bacterial Specialty Paper -
Six Sigma for over a decade now and continues
‘NPP Pro’ for use in pharmaceutical leaflets and
to reap substantial benefits through its Business
packaging applications. The domestic industry
Excellence initiatives. In recent years, the Business
continues to remain under pressure on account of
has embarked upon a comprehensive Digital
cheap imports from China. The recent introduction
Transformation Programme across the vectors of
of anti-dumping duty on Décor paper is expected to
manufacturing, supply chain and support services to
increase ‘Make in India’ opportunities and enable
achieve operational excellence and drive improvement
import substitution.
in profitability.
Cost of key inputs remained elevated throughout
the year. Besides a sharp increase in pulpwood Your Company is a pioneer in the adoption of Industry
prices, recycled fibre prices also ruled high due to 4.0 in the Indian Paper & Paperboard industry. Digital
lower collections/supplies as a result of pandemic and emergent technologies remain deeply embedded
led disruptions and high shipping costs. While the in the operations of your Company’s Paperboards &
prices of key chemicals increased significantly due to Specialty Papers Business, and continue to be
strong global demand coupled with increase in crude leveraged towards enhancing operational efficiency,
prices & energy costs, coal supplies were adversely reducing wastages and enabling cost optimisation
impacted by supply chain disruptions and prioritisation across the value chain. The multi-dimensional digital
of domestic supplies to thermal power plants. interventions encompass Industrial IoT for Smart
Geopolitical tensions in Europe exacerbated the Operations, Integrated Data Infra/Platform, AI/ML
pressure on supplies of major inputs during the last algorithms for optimisation in the manufacturing
quarter of FY 2021-22. In spite of these challenges, process, AI/ML based image analytics and IoT based
the Business responded to market requirements with crop monitoring & advisory. The Business is also
agility to ensure uninterrupted supplies to customers. collaborating with partners from the start-up

Your Company is a pioneer in the adoption of Industry 4.0 in the Indian Paper &
Paperboard industry. Digital and emergent technologies remain deeply embedded
in the operations of your Company’s Paperboards & Specialty Papers Business,
and continue to be leveraged towards enhancing operational efficiency, reducing
wastages and enabling cost optimisation across the value chain.

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ecosystem, as well as established solution providers, All manufacturing units of the Business continue to
in building scalable solutions that are custom-fit recycle nearly 100% of the solid waste generated
to business requirements. Over 50 use cases during operations by converting the same into lime,
have already been developed and implemented fly ash bricks, grey boards, egg trays etc. In addition,
across multiple spheres of the Business, aiding in the Business recycled around 1.1 lakh tonnes of
margin expansion. waste paper during the year, thereby sustaining your
During the year, the Business received global Company’s positive solid waste recycling footprint.
recognition and was adjudged winner at the Pulp &
The manufacturing facilities at Bhadrachalam, Kovai,
Paper International (PPI) Awards by Fastmarkets
Tribeni and Bollaram continue to receive industry
RISI in the category of ‘The Internet of Things &
recognition for their green credentials and safety
Digitalisation’. Your Company became the first Asian
standards in line with your Company’s focus on
company to receive this global award, demonstrating
its ‘best-in-class’ credentials amongst the leading sustainable business practices. The Bhadrachalam Unit
players of the international pulp and paper industry. is the first pulp & paper plant and the second in the
country overall, to be rated GreenCo Platinum+ by CII,
Your Company continues to procure its wood
as part of the Green Company rating system.
requirements from sustainable sources. Research on
The Kovai unit is the first site in India and the
clonal development has resulted in introduction
first paper mill in the world to achieve the highest
of high-yielding and disease-resistant clones that
platinum rating under the Alliance for Water
are adaptable to a wide variety of agro-climatic
Stewardship Standards. Bhadrachalam and
conditions which aid in securing greater consistency
in farmer earnings. In this context, your Company’s Kovai mills won awards for Excellence in Energy
Life Sciences and Technology Centre is engaged in Management at the 22nd National Awards for
developing higher yielding second generation clones ‘Excellence in Energy Management’ in the Pulp &
with enhanced pest and disease resistant attributes. Paper sector. The Bhadrachalam unit was rated as
the Winner in ‘Within the Fence’ category under
Your Company has the distinction of being the first
CII-National awards for Water management.
in India to have obtained the Forest Stewardship
Council-Forest Management (FSC®-FM) certification, The Business continues to strengthen its safety
which confirms compliance with the highest management processes, adopt globally recognised
international benchmarks of plantation management best practices and ensure that facilities are designed,
across the dimensions of environmental responsibility, constructed, operated and maintained in an inherently
social benefit and economic viability. Till date, safe manner.
your Company has received FSC®-FM certification for
close to 1.3 lakh acres of plantations involving over In line with the objective of enhancing the share of
30,000 farmers. During the year, over 3 lakh tonnes of renewable energy in its operations, the Business has
FSC®-certified wood were procured from these implemented several initiatives including investments
certified plantations. Your Company sustained its in a green boiler, high pressure & efficiency circulating
position as the leading supplier of FSC®-certified fluidised bed boiler, solar & wind energy and increased
paper and paperboards in India. usage of bio-fuel. With these initiatives, renewable

Your Company is actively engaged in developing and promoting suitable paper

and paperboard substrates to replace single-use plastics. ‘FiloPack’ and ‘FiloServe’
under the ‘Filo’ series are certified as ‘100% Recyclable’ by Central Pulp & Paper
Research Institute (CPPRI), while ‘OmegaBev’ and ‘OmegaBarr’ under the
‘Omega’ series are certified as ‘Bio-degradable under compostable environment’ by
Central Institute of Petrochemicals Engineering & Technology (CIPET).

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sources presently account for appx. 44% of total products and cutting-edge digital technologies to set
energy consumed at the four manufacturing units. new benchmarks of competitiveness, efficiencies
and productivity.
The year marked the commissioning of the
state-of-the-art and future-ready High Pressure
Packaging and Printing
Recovery Boiler at the Bhadrachalam mill, replacing
conventional soda recovery boilers, ahead of project Your Company’s Packaging and Printing Business
schedule despite the disruptions caused by recurrent is a leading provider of superior value-added
waves of COVID. The boiler is one of the largest to packaging solutions leveraging its comprehensive
be commissioned in the country and is a testament capability-set spanning multiple technology platforms
to your Company’s commitment towards embedding coupled with in-house cylinder making and blown
sustainability in its operations. By enhancing energy film manufacturing lines. The Business caters to the
efficiency, this intervention will reduce the carbon packaging requirements of leading players across
footprint of the unit’s operations through significantly several industry segments viz. Food & Beverage,
lower coal consumption. Personal Care, Home Care, Footwear, Consumer
Electronics, QSR, Pharma, Liquor and Tobacco.
Going forward, paperboard demand is expected to
It also provides strategic support to your Company’s
be driven by end-user segments such as household
FMCG and Cigarettes Businesses by facilitating faster
appliances, consumer goods, ready-made garments,
turnaround for new launches, providing innovative
e-Commerce, pharmaceuticals, etc. Writing & Printing
packaging solutions, ensuring security of supplies
paper demand is also expected to bounce back in the
and delivering benchmarked international quality
short-term on the back of demand from the publishing
at competitive cost.
and notebooks industry following re-opening of
educational institutions. The year under review remained challenging for
the Business due to disruptions caused by the
The integrated nature of your Company’s business
pandemic, along with steep increase in commodity
model - comprising access to high-quality, cost
prices. Notwithstanding the challenging operating
competitive and renewable fibre supply chain,
environment, the Business demonstrated resilience
in-house pulp manufacturing capability, import pulp
with an uptick in demand across most end-use
substitution, world-class product quality,
segments, leading to robust growth in domestic
state-of-the-art manufacturing facilities leveraging
as well as exports businesses.
data analytics and Industry 4.0 along with robust
forward linkages with the Education and Stationery The Business continued to service the critical
Products Business and the Printing and Packaging packaging requirements of several industry segments,
Business - is a key source of competitive advantage including your Company’s Branded Packaged
for your Company’s Paperboards & Specialty Papers Foods, Personal Care Products and Cigarettes
Business. Your Company is confident of sustaining Businesses. Leveraging its supply chain network and
and further consolidating its clear leadership position superior customer relationships, the Business also
in the Indian Paper and Paperboards industry responded with agility to seize opportunities in export
leveraging recent investments in innovation platforms markets, reinforcing its position as a reliable supply
anchored on the development of sustainable chain partner.

The year marked the commissioning of the state-of-the-art and future-ready

High Pressure Recovery Boiler at the Bhadrachalam mill, replacing conventional
soda recovery boilers, ahead of project schedule despite the disruptions caused by
recurrent waves of COVID. The boiler is one of the largest to be commissioned
in the country and is a testament to your Company’s commitment towards
embedding sustainability in its operations.

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The Business continues to craft innovative packaging the highest standards in Quality and Environment,
solutions leveraging its deep understanding of Health & Safety (EHS). All three units are certified
end-user needs and the capabilities of your Company’s as per the Integrated Management System,
Life Sciences and Technology Centre. Recognising consisting of ISO 9001:2015, ISO 14001:2015,
the need for sustainable packaging and the ISO 45001:2018 and have also received Social
resultant emerging demand for plastic substitutes, Accountability Certification (SA 8000:2014).
the Business launched its flagship ‘InnovPack’ The cartons packaging lines in both the Tiruvottiyur
campaign and identified certain end-use segments and Haridwar units received the ‘Grade AA’ Brand
with potential for rapid adoption of sustainable Reputation Compliance Global Standards (BRCGS)
packaging and plastic substitution solutions. Further, certification, for global standards in packaging and
a steady pipeline of pioneering solutions anchored packaging materials - a key enabler for supplies to
on molecular science research is also in place the packaged foods industry. The Tiruvottiyur unit
such as ‘Bioseal’ (compostable packaging solution received the Silver Award for Excellence in
for Quick Service Restaurants, personal care and EHS from CII. The Haridwar unit received the
packaged foods industries), ‘Oxyblock’ (a recyclable Gold trophy from the National Safety Council for
coating solution with enhanced barrier properties Excellence in EHS systems.
for packaged foods, edible oils, etc.) and
‘Germ free coating’ (solution for microbial free To cater to its growing customer base across the
packaging surface addressing the consumer country and to further improve customer service
consciousness towards hygiene and safety). These levels, the Business has initiated investments to
products continue to receive encouraging response; expand its manufacturing footprint in the Western
the portfolio is being augmented progressively region. The facility, equipped with state-of-the-art
with a range of solutions that are in various stages technologies, is expected to be commissioned in
of commercialisation. Investments are being stepped FY 2022-23 and provide significant opportunities to
up in this fast-evolving space which holds immense tap the growing demand in the region.
growth potential. With world-class manufacturing technology across a
The Business has been consistently recognised diverse range of platforms and best-in-class quality
amongst the top ranked global packaging companies management systems, the Packaging and Printing
on productivity parameters as per the latest Business has established itself as a one-stop
International Packaging Group and International packaging solutions provider to several segments
Flexibles Packaging Network rankings. During the and is recognised as a ‘first choice packaging partner’
year, the Business won several prestigious awards, across the consumer goods industry. The Business
viz., the WorldStar award for Getkrrackin Bottle is confident of sustaining its pre-eminent position
Profiled Pouch, the IFCA Star award and SIES in the Packaging and Printing industry through
SOP Star Award for its excellence in packaging focused investments towards expanding its range of
under various categories including sustainability sustainable packaging solutions and by diversifying
and eco-friendliness. The manufacturing facilities at its manufacturing base in the western region, a large
Tiruvottiyur, Haridwar and Munger maintained potential market for the Business.

Recognising the need for sustainable packaging and the resultant emerging demand
for plastic substitutes, the Business launched its flagship ‘InnovPack’ campaign
and identified certain end-use segments with potential for rapid adoption of
sustainable packaging and plastic substitution solutions.

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AGRI BUSINESS Indian exporter of unmanufactured tobacco and aided

in improving its market share by about 600 bps.
Leaf Tobacco
Strategic cost management across the value chain
A punitive and discriminatory taxation and regulatory
continues to be a key focus area for the Business.
regime on cigarettes, apart from providing a fillip
The AI/ML powered smart buying platform continues
to illicit trade and severely impacting the domestic
to be scaled up to facilitate efficient leaf tobacco
legal cigarette industry, has also exerted significant
buying across auction platforms. Several initiatives
pressure on the leaf tobacco crop grown in India.
implemented in recent years have led to improved
Excess supply from certain competing geographies
operating efficiencies across manufacturing and
coupled with weakness in their currencies has resulted
supply chain.
in reduced demand for Indian tobacco in international
markets, causing lower realisations for Indian farmers. The Business continues to make focused investments
Lower export incentives in India have adversely across the tobacco value chain anchored on the key
affected the competitiveness of Indian tobacco in vectors of Quality, Consistency, Compliance and
global markets and impacted farmer earnings. Sustainability. Crop and region-specific agronomic
In addition to the above, the recent pandemic- practices continue to be deployed to cater to the
induced disruptions in major consumption markets emerging preferences of customers. Synergistic
overseas have also impacted regional manufacturers R&D initiatives with focus on varietal development,
in such markets, thereby reducing their leaf tobacco climate smart farming techniques and usage of water
purchases from India. Consequently, Indian leaf efficient technologies are being scaled up towards
tobacco exports have declined by around 20% improving productivity, product quality and reduction
over the last eight years from 236 million kgs in in cultivation costs. The Business has successfully
FY 2013-14 to 188 million kgs in FY 2021-22. implemented integrated energy management
However, during the year, global supply chain initiatives spanning energy conservation, promotion
disruptions led to global manufacturers scouting for of alternative fuel usage and energy plantations,
alternate sourcing origins like India to ensure continuity towards achieving fuel self-sufficiency in the curing
of supplies. Consequently, exports of leaf tobacco process of Flue Cured Virginia tobacco. In addition to
from India have grown by 8% over the previous year. these initiatives, your Company is taking up integrated
watershed management programmes to ensure
The Business continued to leverage its crop
availability of water for irrigation during critical phases
development expertise, sustainable value chain and
of the crop cycle.
sustainability credentials, superior product quality
and world-class processing facilities to strengthen The Business continues to set benchmarks in leaf
its position as a reliable supply chain partner. threshing operations through focused initiatives
Superior customer engagement, operational agility and innovative technological solutions. Investments
and supply chain efficiency enabled the Business to continue to be made in your Company’s Green Leaf
deliver enhanced value to existing customers and Threshing plants (GLT) at Anaparti, Chirala and
increase new business development. The Business Mysuru towards delivering world-class quality and
consolidated its pre-eminent position as the largest upgrading processing technology. The energy needs

The Leaf Tobacco Business consolidated its pre-eminent position as the

largest Indian exporter of unmanufactured tobacco. The Business continued to
leverage its crop development expertise, sustainable value chain and
sustainability credentials, superior product quality and world-class processing
facilities to strengthen its position as a reliable supply chain partner.

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of all three GLTs are substantially met from renewable tobacco consumption pattern prevalent in India and
sources in line with your Company’s philosophy the economic realities of the country is the need of
of adopting a low-carbon growth path. Continuity the hour to support the Indian tobacco farmer and the
of operations was ensured during the second and 46 million livelihoods dependent on tobacco. Lower
third wave of the pandemic through systematic and export incentives in India and unfavourable import
proactive engagement with all stakeholders. duty levied in several markets, including the USA
and Europe, have weighed on the competitiveness
The Business remains committed to the highest
of Indian leaf tobacco exports. Restoring export
standards of EHS (Environment, Health, Safety)
incentives to earlier levels and necessary policy
and Quality and continues to win recognition in
support to alleviate trade barriers would go a long way
these areas. During the year, the Business received
the CII awards for “National Excellence” in Energy in enhancing the competitiveness of unmanufactured
management and “Most Innovative Best Practices” tobacco exports from India and contribute to
as well as the “Prashansa Patra” award from increasing farmer earnings. Your Company continues
National Safety Council. In addition, the Business to engage with policy makers on these matters.
received various awards at events organised by the The Business will continue to provide strategic
Quality Circle Forum of India & CII for technological sourcing support to your Company’s Cigarettes
improvements and quality control. Business even as it consolidates its leadership
With increasing focus on sustainability and human position as a major exporter of quality Indian tobacco
rights compliance driven by regulations in EU and US, thereby catalysing the multiplier impact of increased
your Company is well poised to meet the current and farmer incomes to benefit the rural economy. With its
emerging requirements of global customers with its strong R&D capability, modern processing facilities,
best-in-class sustainability policies, programmes and crop development & extension expertise and deep
systems across the value chain. understanding of customer and farmer needs, your
Company is well poised to sustain its position as a
Over the years, a sharp fall in domestic crop output, world-class leaf tobacco organisation.
sustained pressure on domestic legal cigarette
volumes and decline in leaf tobacco exports, as Other Agri Commodities
aforestated, have led to severe stress on farmer
The operating environment remained challenging
earnings which have declined by over ` 7000 crores in
during the year due to disruptions in operations
the last seven years since FY 2014-15. Illicit cigarettes
caused by the second and third waves of the
as well as smuggled New Generation Products
pandemic. Severe shortages in container availability,
(NGPs) and Electronic Nicotine Delivery Systems
congestion in ports and steep increase in freight rates
(ENDS) in the country also impact leaf tobacco trade
exacerbated the situation. In spite of such challenges,
as these products do not use Indian tobacco. As seen
India emerged as a resilient and dependable source of
in the past, stability in tax incidence and regulations
agri-commodities to meet global demand.
lead to stable demand for leaf tobacco with the legal
cigarette industry being able to recover volumes lost Notwithstanding the challenging operating
to illicit trade. Accordingly, a more balanced regulatory environment, the Business leveraged market
and taxation regime that cognises for the unique opportunities and delivered robust growth in revenues

The scope and scale of operations of your Company’s Agri Business have grown
manifold over the years and currently encompass over 4 million tonnes in 22 states
and over 20 agri-value chains. The strategic focus of the Business in recent years
has been to accelerate growth by rapidly developing and scaling up its Value-Added
Agri Products (VAAP) straddling multiple value chains comprising Spices, Coffee,
Frozen Marine Products and Processed Fruits amongst others.

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driven by wheat and rice exports. This was achieved large format retailers. The Business scaled up its
on the back of your Company’s strong farm linkages Integrated Crop Management (ICM) programme,
and sourcing networks, multi modal transport thereby enhancing its ability to produce
capability, agile supply chain operations and deep food safe spices in a sustainable manner.
customer relationships. The Business continues to partner with the various
State Governments for production of food safe
The scope and scale of operations of your Company’s
spices and has maintained an unblemished track
Agri Business have grown manifold over the years
record over the years in terms of compliance with
and currently encompass over 4 million tonnes in
stringent food safety parameters.
22 states and over 20 agri-value chains. The strategic
focus of the Business in recent years has been to – The Business also leveraged its strong backward
accelerate growth by rapidly developing and scaling integration linkages to enhance presence in the
up its Value-Added Agri Products (VAAP) straddling organic spices segment, with the entire value chain
multiple value chains comprising Spices, Coffee, being certified by globally renowned agencies,
Frozen Marine Products and Processed Fruits providing assurance on product authenticity and
compliance with stringent norms in the EU, US
amongst others. The portfolio continues to be rapidly
and Indian markets. The Business continues to
scaled up, leveraging your Company’s deep rural
pursue sustainable farm management practices
linkages and extensive sourcing expertise towards
anchored on Rainforest Alliance and Global GAP
strengthening and customising supply chains for
accreditation. The Spices Business received the
traceable and identity-preserved sourcing of agri-
‘Outstanding Performance in Food Safety’ award
commodities. Rapid adoption of analytics led smart
from CII under the Large Food Business category
procurement tools continue to enhance competitively
for its backward integration programme.
superior sourcing capabilities.
– During the year, domestic coffee trade remained
– Your Company is a leading player in whole spices
muted in anticipation of higher realisations on
such as Chilli, Turmeric, Coriander and Cumin. account of lower crop size in Brazil coupled with
In line with its strategy of enhancing value addition, container shortages and elevated ocean freight
the Business has, in recent years, expanded rates. Notwithstanding these challenges,
into ‘food safe’ markets viz. USA, EU and Japan, the Business recorded robust growth in exports
leveraging its key strengths such as identity- driven by European and Middle East markets.
preserved sourcing expertise, strong backward This was enabled through strategic presence in key
integration, superior processes, custody of supply coffee producing regions in India, deep knowledge
chain and customer focused strategies. During of estate and region-specific characteristics and
the year, the Business consolidated its position focus on premium grades of Arabica, Certified
as a preferred supplier for discerning customers Coffees, Specialty and Monsooned Coffee. Apart
in the food safe segment, private labels, steam from servicing the needs of leading coffee houses
sterilised and organic products. Strong growth in in the value-added space, the Business continues
exports was driven by new customers and richer to source high quality coffee grades customised
product mix. The domestic business also posted to the needs of your Company’s gourmet
robust growth on the back of higher offtake from coffee brand, ‘Sunbean’.

Towards enhancing the competitiveness of domestic agri-value chains, fostering

new business models and further augmenting value creation opportunities,
your Company has successfully launched ITCMAARS (Metamarket for Advanced
Agriculture and Rural Services) – a crop-agnostic ‘phygital’ full stack
AgriTech platform in six states, with over 200 FPOs encompassing more than
40,000 farmers already added to your Company’s network.

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– Your Company is one of the leading exporters of necessary inputs, advisory and on-field support.
value-added frozen marine products from India The Business is also focusing on developing unique
with expertise in processing individually value-added products by leveraging the research
quick-frozen (IQF), raw and cooked products, platforms of your Company’s Life Sciences and
which adhere to the highest standards of safety Technology Centre.
and hygiene prevalent in developed markets More than two decades ago, your Company
such as the US, EU and Japan. During the year, conceptualised and rolled out the e-Choupal network
the Business touched record levels of sales driven as a unique model towards enhancing agricultural
by expansion into new markets in North America growth and productivity, and fostering sustainable
and Middle East. Leveraging its strong domain rural development. Leveraging this robust platform,
knowledge and sourcing expertise, the Business your Company continues to focus on providing a
also sources shrimps and supports the range of value-added services in rural areas towards
‘ITC Master Chef’ range of ‘Super Safe’ enhancing the competitiveness of Indian agriculture
frozen prawns in the domestic market and and playing a critical enabling role in integrating
supplies high-quality shrimps to your Company’s farmers, input vendors and government agencies
Hotels business. besides facilitating necessary market linkages.
– In the Processed Fruits & Vegetables segment, Integrated rural service hubs, ‘Choupal Saagar’,
the Business continues to expand its footprint continue to serve farmers through their procurement
in categories of fruit pulp and tomato paste across and storage infrastructure, and front-end retail stores.
conventional and certified segments through a The Choupal Saagars facilitate efficient sourcing
robust collaborative network comprising a large of a wide range of agri-commodities while making
available assorted brands and merchandise spanning
number of small and marginal farmers across
categories such as apparel, footwear, consumer
four states.
durables, electronics and fuel, tailored to farmers’
The Business remains focused on enlarging its scope needs. The Choupal Saagars also serve as an ideal
of operations to include fresh and processed products platform for your Company’s FMCG brands to deepen
in identified agri-commodities such as staples for their engagement with rural markets. Interventions
the Food Service segment, fresh and frozen fruits such as Choupal Pradarshan Khet, Choupal
& vegetables. As these businesses develop critical Mahotsav, etc. continue to enhance the vitality of
mass, the Business is also scaling up end-to-end your Company’s e-Choupal network.
presence across the value chain, supported by the
Towards enhancing the competitiveness of domestic
R&D capabilities of your Company’s Life Sciences and
agri-value chains, fostering new business models
Technology Centre and external collaborations.
and further augmenting value creation opportunities,
Towards building deeper expertise in Medicinal and your Company has successfully launched ITCMAARS
Aromatic Plant Extracts (MAPE), the Business scaled (Metamarket for Advanced Agriculture and Rural
up its customised crop development programme in Services) – a crop-agnostic ‘phygital’ full stack
Madhya Pradesh during the year. Collaborations with AgriTech platform in six states, with over 200 FPOs
farmers are underway with the Business providing encompassing more than 40,000 farmers already

Your Company is a leading player in whole spices such as Chilli, Turmeric, Coriander
and Cumin. In line with its strategy of enhancing value addition, the Business has,
in recent years, expanded into ‘food safe’ markets viz. USA, EU and Japan,
leveraging its key strengths such as identity-preserved sourcing expertise,
strong backward integration, superior processes, custody of supply chain
and customer focused strategies.

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added to your Company’s network. This initiative, provide consumers best-in-class product quality
powered by cutting-edge digital technologies, and experience, use of multi-modal transportation
will create a robust eco system to deliver seamless comprising rail, road & coastal routes and enabling
customised solutions to farmers, whilst creating new supply of attribute based/identity preserved crop.
revenue streams, strengthening sourcing efficiencies The Business also ramped up direct buying
and powering your Company’s world-class Indian at various atta factories. For instance, at the
brands. This digitally powered platform seeks to Kapurthala ICML plant, direct buying of wheat
empower the farming community by delivering offers substantial benefits to farmers including
customised solutions through synergistically transparency in grading, weighment and pricing,
integrating NextGen agri-technologies. These include besides reducing transaction costs due to
an e-Marketplace for agri inputs and farm outputs, minimisation of handling and transportation. This
wide range of advisory services covering weather initiative is being scaled up through focused crop
forecasts, agronomy, best practices for improved development in the area to upgrade crop quality.
productivity, quality assurance, etc. Value propositions
In recognition of the various initiatives undertaken
across each of these opportunity spaces are expected
by the Business, including keeping the entire
to create new and scalable revenue streams for
supply chain fully functional during the multiple
your Company over time. The Business expects
waves of the pandemic, your Company
to rapidly scale up the initiative to create a unique
was awarded the ‘Best Practice in Digital
platform providing significant competitive advantage
Transformation of Supply Chain’ in Most Innovative
to your Company’s Agri Business.
Category at the CII Digital Transformation
Over the years, your Company has invested DX Awards, 2021.
significantly in building competitively superior
The Business continues to collaborate with
agri-commodity sourcing expertise comprising multiple
reputed research organisations such as the Indian
business models, wide geographical spread and
Agricultural Research Institute, Indian Institute of
customised infrastructure. These capabilities and
Wheat & Barley Research, Indian Institute of Rice
infrastructure have created structural advantages
Research, Indian Institute of Soybean Research,
facilitating competitive sourcing of agri raw materials
Indian Institute of Vegetable Research, Punjab
for your Company’s Branded Packaged Foods
Agricultural University and Agharkar Research
Businesses.
Institute towards building an efficient and cost
– The Business continues to leverage its strong competitive agri-value chain. During the year,
farm linkages and wide sourcing network across the Business further scaled up its wheat crop
geographies to secure supplies of critical grades development programme and introduced
of wheat of benchmark quality towards meeting location-specific new and superior seed varieties
the growing requirements of Aashirvaad atta. along with appropriate package of practices across
During the year, the Business further scaled up its Rajasthan, Uttar Pradesh, Bihar, West Bengal,
strategic sourcing and supply chain interventions. Punjab, Madhya Pradesh and Maharashtra. Sharp
These include focused crop development towards focus on deepening capabilities in proprietary crop
securing the right varieties for Aashirvaad atta to intelligence, scaling up the sourcing & delivery

Your Company has invested significantly in building competitively superior

agri-commodity sourcing expertise comprising multiple business models,
wide geographical spread and customised infrastructure. These capabilities and
infrastructure have created structural advantages facilitating competitive sourcing of
agri raw materials for your Company’s Branded Packaged Foods Businesses.

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network and developing customised blends will NOTES ON SUBSIDIARIES

support your Company’s Branded Packaged Foods The following may be read in conjunction with the
Businesses in the years to come. Consolidated Financial Statements of your Company
– The Business continues to leverage its strong prepared in accordance with Indian Accounting
backward linkages and wide sourcing network Standard 110. Shareholders desirous of obtaining the
across geographies to source high-quality fruit pulp Report and Accounts of your Company’s subsidiaries
and frozen vegetables for your Company’s may obtain the same upon request. Further, the
Report and Accounts of the subsidiary companies is
‘B Natural’ and ‘Farmland’ brands.
also available under the ‘Investor Relations’ section
– Milk procurement network in Bihar and West of your Company’s website, www.itcportal.com, in
Bengal was strengthened during the year towards a downloadable format. Your Company’s Policy for
meeting the growing requirements of your determination of a material subsidiary, as adopted
Company’s Fresh Dairy portfolio under the by your Board, in conformity with Regulation 16 of
‘Aashirvaad Svasti’ brand, and in Punjab for the Securities and Exchange Board of India (Listing
‘Sunfeast’ Dairy Beverages. The Business Obligations and Disclosure Requirements)
continues to empower farmers by providing Regulations 2015, can be accessed on your Company’s
infrastructure such as automated milk collection corporate website at https://www.itcportal.com/material-
units & chillers and imparting package of best subsidiary-policy . Presently, your Company does not
practices to improve operational efficiency, have any material subsidiary.
maintain high quality and ensure identity
Surya Nepal Private Limited
preservation and traceability. The capability to
source superior quality milk has enabled the launch The year under review continued to be extremely
of ‘Aashirvaad Svasti Easy Digest Milk’ – West challenging for Nepal. Economic activities remained
Bengal’s first lactose free milk in pouch format and impacted due to lockdowns and other restrictions for
more than four months from April 2021 in order to
‘Sunfeast Protein Shake’ in the Fresh Dairy and
curb the spread of the second wave of the pandemic.
Beverages categories respectively.
Consequently, the GDP growth of Nepal remained
– The Business continues to scale up sourcing muted at 4.3% for the year ended 15th July 2021,
of spices to meet the growing requirements of significantly below the Government of Nepal’s target
Sunrise and Aashirvaad brands. growth rate of 7%.

In line with the national goal of doubling farmers’ Progressive economic recovery was witnessed from
income, your Company remains committed to catalyse September 2021 on the back of increased vaccination
a transformational shift of the agri ecosystem from the coverage and other initiatives taken by the
conventional production-centric to demand-responsive Government of Nepal.
value chains. Towards this, the Business continues On the external front, higher imports and lower
to focus on developing NextGen Indian agriculture, remittances contributed to the widening of the country’s
anchored on digitally enabled and climate smart Current Account deficit. Due to drawdowns to finance
agri-value chains with strong market linkages. such deficit, foreign exchange reserves fell to
The focus of these interventions is to reduce US$ 9.58 billion as at mid-March 2022, from
vulnerability and increase the resilience of farmers, US$ 11.8 billion in mid-July 2021, which represents
while lowering greenhouse gas emissions and less than 7 months of imports.
promoting food security. Your Company is confident The Central Bank of Nepal has announced several
of effectively participating in the emerging market initiatives to curb the sharp increase in imports and
opportunities arising out of these interventions to create bolster the foreign exchange reserves of the country.
and capture enhanced value for its stakeholders. While these initiatives are expected to promote

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external sector stability in the near term, initiatives The company continues to adopt all measures
towards encouraging Foreign Direct Investment (FDI) towards ensuring the safety and well-being of all its
in the country, incentivising domestic manufacturing stakeholders. The company also places immense
to substitute imports and promoting the hospitality emphasis on making significant contributions towards
sector, which has significant potential to generate building the societal and economic capital of Nepal.
foreign exchange earnings, remain key for long-term In this regard, the company continues to:
sustainable growth of the economy. − assist farmers in areas proximate to the company’s
The legal cigarette industry occupies an important operating locations to enhance productivity and
place in Nepal’s economy and is a major contributor to enable upliftment of agri-infrastructure.
the manufacturing sector of the country. However, − support the animal husbandry sector by providing
the industry continues to face challenges from a extension services covering animal breeding,
stringent taxation and regulatory regime. The company health and nutrition to drive yield improvement and
continues to engage with policy makers for equitable, higher returns for farmers.
non-discriminatory, pragmatic, evidence-based
− contribute towards improvement in quality of
regulations and taxation policies.
education in public schools in the economic vicinity
The pandemic-induced disruptions rendered the of its operating locations.
operating environment extremely challenging,
− support development of local public infrastructure
particularly during the first half of the year under review.
in the catchment areas of operating locations.
Notwithstanding the same, the company reinforced
its market standing by leveraging its robust portfolio, In addition, the company also provided support
superior product quality and wide distribution network. to government/community hospitals involved in
Differentiated and innovative portfolio interventions treatment of COVID patients by providing critical care
under the Surya and Shikhar trademarks registered equipment, oxygen plant, ambulances and other
encouraging growth. Supply chain agility coupled medical supplies.
with proactive scenario planning ensured continuity During the year, the company recorded Revenue
of manufacturing operations amidst the disturbances from Operations of NRs. 4382 crores (previous year
caused by the second wave of the pandemic. NRs. 3612 crores) and Net Profit of NRs. 1005 crores
During the year, the company strengthened its (previous year NRs. 867 crores) representing a growth
market standing in the Agarbatti industry leveraging of 21% and 16% respectively.
its differentiated product portfolio, sharply focused The company declared a dividend of NRs. 467 per
marketing investments and best-in-class product equity share of NRs. 100 each for the year ended
availability across target markets on the back of its 15th July, 2021 (31st Asadh, 2078), amounting to
robust trade marketing and distribution infrastructure. NRs. 941.47 crores (previous year NRs. 488 per
New offers of ‘Mangaldeep Treya’ and ‘Mangaldeep equity share amounting to NRs. 983.81 crores).
Jasmine 100’ strengthened portfolio presence in the
The company continues to be the largest contributor
Popular segment.
to the exchequer in Nepal. The company is well
The Confectionery industry was adversely positioned to consolidate its leadership position by
impacted in the first half of the year due to pandemic leveraging its robust portfolio of products, deep and
led disruptions. With progressive opening of wide distribution network, best-in-class manufacturing
markets, the company launched two new offers, facilities and execution excellence. The company
‘Toffichoo Cofitino’ and ‘Toffichoo Crème Lacto’, in the continues to explore opportunities to rapidly scale up
category and continues to make focused investments the newer FMCG businesses and evaluate emerging
towards strengthening its market standing. opportunities in this space.

ITC Limited REPORT AND ACCOUNTS 2022 81

Report of the Board of Directors

ITC Infotech India Limited and its subsidiaries work from anywhere with sustained focus on client
priorities and data security. The growing demand
The Information Technology industry witnessed
continued acceleration in mainstream adoption for high-skilled talent was met through prioritisation
of digital technologies such as Cloud, Intelligent of investments in training & skill development and
Automation, Digital Workplace and Cybersecurity building a robust learning & development platform.
in the enterprise technology landscape. As per Business-friendly solutions and new-age capabilities
NASSCOM estimates, the Technology Market grew offered by the company continue to earn global
by 15.5% in FY 2021-22, significantly ahead of the recognition. The company’s Automation capabilities
pre-pandemic growth trajectory. Going forward, were positioned in the ‘Leadership Zone’ in the Zinnov
Digital and capability-led opportunities based on Zones Hyper Intelligent Automation Services 2021
new paradigms of technology consumption, such for Robotic Process Automation (Small & Medium
as ‘Everything as a Service’ model, are expected to Service Providers), IT Automation and CPG-Retail.
drive industry growth. Hybrid operations, sustainable
The company’s Digital Workplace capabilities
business models, customer centricity, personalised
were considered a ‘Disruptor’ in Avasant’s Digital
employee engagement and digital skilling will continue
Workplace Services 2021 RadarView™ (from being
to accelerate and drive strategic decisions for the
placed under the ‘Challengers’ category in the
Technology industry in 2022. Hiring and training the
previous year). The company’s Digital Manufacturing
right talent with a focus on up-skilling and re-skilling
capabilities were also profiled in an exclusive
remains a key imperative for the industry, with
‘Briefing Note’ by Information Services Group, Inc.,
employee well-being and engagement continuing to
titled ‘ITC Infotech: Business-friendly Approach
remain critical to empower the distributed workforce.
Strategically Placing Manufacturers, a Step Ahead
The company continues to sharpen its focus on the of Competitors’.
strategic pillars of Customer Centricity, Employee
Centricity and Operational Excellence, while building During the year, the company’s consolidated
differentiated offerings around the strategic areas of Total Income grew by 16.8% to ` 2884.30 crores
Cloud Technologies, Digital Workplace Solutions, (previous year ` 2469.29 crores). Profit Before Tax
Digital Manufacturing, Customer Experience and Data stood at ` 719.64 crores (previous year
Analytics. During the year, the company recorded ` 604.13 crores) and Net Profit stood at ` 541.04 crores
robust growth in revenue on the back of strong traction (previous year ` 451.30 crores).
in the Americas, India and Rest of World markets. For the year under review:
Industry 4.0 solutions, Global In-house Centre services
a. ITC Infotech India Limited recorded Revenue from
and Digital Experience using data analytics and
Infrastructure services were the key drivers of growth. Operations of ` 2288.57 crores (previous year
The company also continued to forge new alliances ` 1834.98 crores) and Net Profit of ` 517.81 crores
and strengthen existing relationships with Independent (previous year ` 447.79 crores). The company
Software Vendors (ISVs) in focus areas such as paid a total dividend of ` 53.00 per Equity Share of
Digital Workplace Solutions, Digital Manufacturing ` 10/- each aggregating ` 451.56 crores
and Data analytics. These partnerships are aligned (previous year ` 32.50 per Equity Share of
to the company’s vision of taking a leadership role in ` 10/- each aggregating ` 276.90 crores).
enabling the Digital Transformation and Software as a b. ITC Infotech Limited, UK, a wholly-owned
Service (SaaS) adoption journey of its clients. subsidiary of the company, recorded Revenue of
The company also launched an industry-defining GBP 40.02 million (previous year GBP 48.80 million)
‘ITC Infotech Work From Anywhere’ (IWFA) productivity and Net Profit of GBP 0.79 million (previous year
framework to provide its employees the flexibility to GBP 0.90 million).

82 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

c. ITC Infotech (USA), Inc., a wholly-owned During the year under review, potato production in
subsidiary of the company, together with its India touched a record high of about 53 million MT,
wholly-owned subsidiary Indivate Inc., recorded increasing by 12% over the previous year due to
Revenue of US$ 133.76 million (previous year favourable weather conditions. Consequently,
US$ 108.36 million) and Net Profit of potato prices reduced considerably on account of
US$ 2.53 million (previous year US$ 2.59 million). high supplies, coupled with demand volatility arising
A key element of the company’s strategy going out of the disruptions caused by the second wave
forward is to pursue inorganic opportunities to of the pandemic.
accelerate growth and profitability for which it has
Despite the challenging environment, the company
identified priority areas including Digital Experience –
delivered a resilient performance leveraging its
Data Analytics and AI, Salesforce and BPM Tools;
strong brand equity, superior product quality,
Infrastructure Services – Service Management and
better on-field performance and strong trade &
Cloud Service Providers and Product 4.0 – Digital
Factory and Digital Thread. Building on the successful customer relationships. The company’s Revenue
20-year alliance with PTC Inc., a 10-year Strategic from Operations stood at ` 256.67 crores (previous
Partner Agreement has recently been announced to year ` 287.09 crores) with a Net Profit and Total
accelerate customer digital transformation initiatives Comprehensive Income of ` 43.04 crores (previous
through jointly developed offerings and Go-to-Market year ` 72.92 crores). During the year, the company
strategies focused on facilitating conversion of paid a total dividend of ` 8.00 per Equity Share
customers’ Product Lifecycle Management (PLM) of ` 10 each, aggregating ` 30.37 crores
implementations to SaaS. Under the terms of this (previous year ` 16.00 per Equity Share aggregating
agreement, the company will acquire a substantial ` 60.74 crores).
portion of PTC’s PLM implementation services
The company continues to build a strong foundation
business and create a new business unit, called
for the future and remains confident of effectively
DxP Services, which will include PLM professional
leveraging its deep domain expertise to fortify its
services experts from both companies. The company
will continue to explore value accretive inorganic market standing in the seed potato industry.
opportunities in identified priority areas as
Technico Pty Limited and its subsidiaries
stated above.
The company continues to focus on upgradation
The company will continue to focus on interventions
around areas of strategic interest, including creating and commercialisation of its TECHNITUBER® Seed
and winning large transformation opportunities, Technology and customising its application across
expanding presence in strategic accounts, building various geographies. Further, the company is also
and sharpening domain-specific digital solutions, engaged in the marketing of TECHNITUBER® seed
strengthening distributed delivery framework, and produced at the facilities of its subsidiaries in China
re-skilling/up-skilling employees in future-focused and Canada and Technico Agri Sciences Limited,
capabilities. India, a wholly-owned subsidiary of your Company,
to global customers. For the year under review:
Technico Agri Sciences Limited
a. Technico Pty Limited, Australia registered a
The company’s leadership in production of early turnover of Australian Dollar (A$) 1.86 million
generation seed potatoes and strength in agronomy
(previous year A$ 2.09 million) and a Net Profit of
continue to support the Bingo! range of potato chips
A$ 0.91 million (previous year A$ 0.79 million).
of your Company and in servicing the seed potato
requirements of the farmer base of your Company’s b. Technico Asia Holdings Pty Limited, Australia,
Agri Business. Technico Technologies Inc., Canada and Technico

ITC Limited REPORT AND ACCOUNTS 2022 83

Report of the Board of Directors

Horticultural (Kunming) Co. Limited, China – there Landbase India Limited

were no significant events to report with respect
The company owns and operates the Classic Golf &
to the above companies.
Country Club, a 27-hole Jack Nicklaus Signature Golf
Course – which continues to enjoy strong brand equity
WelcomHotels Lanka (Private) Limited
with its members, guests and the golfing fraternity.
WelcomHotels Lanka (Private) Limited (WLPL), Operations at the Club remained impacted by the
a wholly-owned subsidiary of your Company, was disruptions caused by the pandemic, particularly in
incorporated in Sri Lanka in April 2012 with the the first half of the year. The Club continued to ensure
objective of developing and operating a mixed-use the highest safety and hygiene standards and social
development project (‘Project’) comprising a luxury distancing norms leading to progressive improvement
hotel and a super-premium residential apartment in member footfalls in course of the year. The Club
complex situated on 5.86 acres of prime sea-facing continues to remain an ‘Asian Tour Destinations
land in Colombo. Member’, the only one in the country, and hosted the
The Project has been accorded the status of a prestigious Asian Tour Golf Tournament that was held
‘Strategic Development Project’ entitling the company in India after a period of three years.
to various fiscal benefits in Sri Lanka. Further, the The company also owns ‘ITC Grand Bharat’ – a 104-
Project is also exempt from Sri Lankan foreign key all-suite luxury retreat at Gurugram, which has
exchange regulations. been licensed to your Company. The retreat, an oasis
Project construction activity, which was running on of unhurried luxury, is co-located with the company’s
schedule till Q3 FY 2018-19, was adversely impacted prestigious Classic Golf & Country Club.
due to disruptions in the aftermath of the terror ITC Grand Bharat has received several accolades,
incidents in 2019 and thereafter by recurrent waves establishing itself amongst the top luxury resort
of the COVID pandemic. The recent deterioration destination hotels in the world. Travel + Leisure, one
of the macro-economic scenario in the country has of the world’s leading magazines in the travel and
exacerbated the situation. The Government of Sri hospitality sector, had declared ITC Grand Bharat
Lanka is taking several measures to mitigate the as the ‘Best Wellness Retreat’ in the domestic
crisis; these include securing financial assistance category as part of India’s Best Awards, 2020.
from multi-lateral agencies/other countries, increasing The retreat has also been recognised as the ’Best
interest rates to curb inflation and restricting imports to Destination Wedding Venue in India, Hotels (North)’
conserve foreign exchange. The company continues by WeddingSutra Influencer Awards, 2021.
to closely monitor the evolving situation.
During the year ended 31st March, 2022,
In spite of the aforementioned challenges and the company recorded Total Income of
operational constraints, the company remains focused ` 29.45 crores (previous year ` 25.03 crores) and Net
on completing the Project in an expeditious manner. Profit of ` 2.85 crores (previous year ` 3.80 crores).
The macro-economic challenges faced by the country Total Comprehensive Income for the year stood at
have impacted, inter alia, the sales velocity of ` 2.88 crores (previous year ` 3.85 crores).
‘The Sapphire Residences’ luxury apartments.
Given its unique positioning in the market and superior Srinivasa Resorts Limited
value proposition, the company expects apartment
The company owns ‘ITC Kakatiya’ – a 188-key luxury
sales to gain traction as the project nears completion
hotel located in Hyderabad city, which is operated
and normalisation of the situation in the country.
and marketed by your Company. The property has
Your Company’s investment in WLPL stood at received several accolades, establishing itself as one
` 2169 crores as at 31st March, 2022. of the finest luxury hotels and F&B destinations in

84 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

the city. During the year, the property received LEED® with 16 properties receiving ISO 9001:2015
Platinum certification from United States Green certifications for implementing quality management
Building Council as well as the Gold Award under systems for safe practices.
‘Energy Conservation’ category by Telangana State
During the year ended 31st March, 2022, the company
Renewable Energy Development Corporation Limited.
recorded Total Income of ` 25.39 crores
‘Dakshin’ was adjudged the ‘Best South Indian Fine
(previous year ` 17.71 crores) and Net Profit of
Dining Restaurant’ at the Times Food Guide Nightlife
` 0.19 crore (previous year Net Loss ` 6.28 crores).
Awards 2022 for the 12th consecutive year and
Total Comprehensive Income for the year stood at
‘Gourmet Couch’ was adjudged the ‘Best Takeaway’
` 0.28 crore (previous year Net Loss ` 6.28 crores).
at the Times Food Guide Nightlife Awards 2022,
for the 2nd consecutive year. Bay Islands Hotels Limited
The company witnessed progressive recovery driven The company’s hotel in Port Blair, licensed to your
by resumption of business and international travel. Company, continues to offer a unique gateway to
The hotel continued to follow the highest standards of the Andamans with its strategic location, excellent
safety and hygiene for all stakeholders. architectural design and, superior product and service
During the year ended 31st March, 2022, the company quality. Consequent to its upgradation, the hotel
recorded Total Income of ` 44.86 crores was rebranded as ‘Welcomhotel’ last year and has
(previous year ` 26.74 crores) with Net Loss of received favourable guest response.
` 1.63 crores (previous year Net Loss ` 8.42 crores). Tourism in the Andamans remained severely
Total Comprehensive Income for the year stood at restricted on account of the pandemic during the
(-) ` 1.59 crores (previous year (-) ` 8.34 crores). year. In addition, partial closure of airport operations
at Port Blair due to ongoing renovation activities also
Fortune Park Hotels Limited impacted tourist arrivals to the island. In spite of such
The company, which caters to the ‘Mid-market to challenges, the hotel has demonstrated progressive
Upscale’ Business Hotels segment under the brand improvement across the year and appropriate
‘Fortune’, remains a front-runner in its operating measures relating to safety, health and hygiene
segment and is well positioned to sustain its protocols continue to be in place.
leadership position in the industry. During the year ended 31st March, 2022, the company
While the ‘Fortune’ brand is already established as a recorded Total Income of ` 1.61 crores
premier business hotel brand in the country, it is also (previous year ` 1.11 crores) and Net Profit and
rapidly expanding its footprint in the leisure segment Total Comprehensive Income of ` 1.14 crores
in line with evolving market demand. During the year, (previous year ` 0.77 crore).
two hotels were added to the portfolio at Hubbali and The Board of Directors of the company has
Goa, taking the aggregate operating inventory to recommended a dividend of ` 70.00 per Equity Share
nearly 3,000 rooms across 39 properties. The brand of ` 100 each for the year ended 31st March, 2022
also has a healthy pipeline of leads in place, with a (previous year ` 70.00 per Equity Share).
number of properties slated to be commissioned over
the short to medium term. Wimco Limited
The ‘Mid-market to Upscale’ segment witnessed The company’s business activities comprise
progressive recovery in course of the year, especially fabrication and assembly of machinery for tube filling,
in the leisure segment. The company strengthened cartoning, wrapping, material handling including
its ‘Safe Stays’ programme across hotels with conveyor solutions and engineering services for the
enhanced focus on safety, health and hygiene, FMCG and Pharmaceutical industries.

ITC Limited REPORT AND ACCOUNTS 2022 85

Report of the Board of Directors

In view of the uncertainties arising out of the strengthened safety standards. During the year,
pandemic, the operating environment remained the company received the Platinum Award in the
subdued during the year. However, the company CII National Poka Yoke Competition.
leveraged its strong customer relationships to improve
The company’s Revenue from Operations for the year
its order book during the year. The company’s
stood at ` 163.90 crores (previous year ` 172.52 crores),
Revenue from Operations for the year stood at
while Net Profit for the year increased to ` 14.43 crores
` 11.62 crores (previous year ` 6.29 crores) with a
(previous year ` 9.06 crores). Total Comprehensive
Net Loss of ` 0.42 crore (previous year Net Loss of
Income for the year stood at ` 14.37 crores
` 2.42 crores). Total Comprehensive Income for the
(previous year ` 9.08 crores).
year stood at (-) ` 0.44 crore (previous year
(-) ` 2.42 crores). The company continues to focus ITC IndiVision Limited
on developing superior solutions towards addressing
customer requirements. ITC IndiVision Limited (IIVL) was incorporated as
a wholly-owned subsidiary of your Company on
The Honourable National Company Law Tribunal, 9th July, 2020.
Mumbai Bench (‘NCLT’), vide Order dated
9th April, 2021, had confirmed the reduction of The company made steady progress during the year
Issued, Subscribed and Paid-up Equity Share Capital towards construction of the manufacturing facility
of the company from ` 18,84,60,000/- comprising near Mysuru, Karnataka, primarily for the manufacture
18,84,60,000 Equity Shares of ` 1/- each to and export of nicotine and nicotine derivative
` 18,50,81,193/- comprising 18,50,81,193 Equity Shares products; the project is progressing as per schedule.
of ` 1/- each by way of cancelling and extinguishing, The facility is being geared to manufacture
in aggregate, 33,78,807 Equity Shares of ` 1/- each purest nicotine derivatives conforming to US and
held by shareholders other than your Company EU pharmacopoeia standards.
in lieu of payment not exceeding ` 1/- per Equity Share Your Company’s investment in IIVL stood at
to such shareholders. ` 150 crores as at 31st March, 2022.
During the year, the said reduction of Equity Share
Russell Credit Limited
Capital of the company became effective, and the
company became a wholly owned subsidiary of The company recorded Total Income of ` 41.56 crores
your Company with effect from 29th July, 2021 (previous year ` 64.37 crores) and Net Profit of
upon completion of necessary formalities under ` 33.46 crores (previous year ` 49.47 crores),
Section 66 of the Companies Act, 2013. reflecting the lower market interest rates that prevailed
during the year on account of accommodative policies
North East Nutrients Private Limited pursued by the Reserve Bank of India.
Your Company holds 76% equity stake in North East Total Comprehensive Income for the year stood
Nutrients Private Limited, which has set up a food at ` 120.79 crores (previous year ` 86.38 crores),
processing facility in Mangaldoi, Assam, to cater to reflecting the recovery in the market value of certain
the fast-growing biscuits market in Assam and other long-term strategic investments, which had been
north-eastern states. impacted due to the pandemic. The company continues
to closely monitor its investments in line with market
During the year, the company faced challenging
interest rate movements and explore opportunities to
operating environment which resulted in subdued
make strategic investments for the ITC Group.
demand. The company continued to drive margins
through its strategic cost management measures. Temporary surplus liquidity of the company is mainly
Over the years, the company has consistently deployed in bonds, debt mutual funds, bank fixed
improved operational efficiency, productivity and deposits, etc. For the financial year 2021-22,

86 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

the company declared interim dividend of ` 0.19 per Pavan Poplar Limited
Equity Share of ` 10 each and a final dividend of
The operations of the company continue to be
` 0.06 per Equity Share of ` 10 each, aggregating
adversely impacted pursuant to the Order of the
` 16.16 crores (previous year ` 0.20 per Equity Share Honourable High Court of Uttarakhand at Nainital in
of ` 10 each aggregating ` 12.93 crores). February 2014 dismissing the Writ Petition filed by the
company against the Order of the District Magistrate
Gold Flake Corporation Limited
authorising the State authorities to take possession
The company holds 50% equity stake in ITC Essentra of the land leased to the company. The appeal filed
Limited – a joint venture with Essentra Group, UK. by the company against the aforestated Order was
During the year, the company recorded Total Income admitted in April 2014 and the matter is pending
of ` 17.29 crores (previous year ` 8.41 crores) and before the Honourable High Court.
Net Profit of ` 16.08 crores (previous year ` 7.30
During the year, the company recorded Total Income
crores). The company declared interim dividend of
of ` 0.05 crore (previous year ` 0.22 crore) and
` 10.00 per Equity Share of ` 10 each, aggregating Net Loss of ` 0.04 crore (previous year Net Profit of
` 16.00 crores (previous year ` 6.25 per Equity Share ` 0.09 crore).
of ` 10 each, aggregating ` 10.00 crores).
Prag Agro Farm Limited
Greenacre Holdings Limited
The operations of the company continue to be
The company continues to provide maintenance adversely impacted pursuant to the Order of the
services for commercial office buildings; engineering, Honourable High Court of Uttarakhand at Nainital in
procurement and construction management services February 2014 dismissing the writ petition filed by the
as well as project management consultancy services. company against the Order of the District Magistrate
During the year, the company recorded Total Income authorising the State authorities to take possession
of ` 8.09 crores (previous year ` 5.65 crores) and Net of the land leased to the company. The appeal filed
Profit of ` 1.79 crores (previous year ` 3.71 crores, by the company against the aforestated Order was
which included a one-off reversal of deferred tax admitted in April 2014 and the matter is pending
liabilities aggregating ` 1.44 crores). before the Honourable High Court.
During the year, the company recorded Total Income
ITC Investments & Holdings Limited of ` 0.09 crore (previous year ` 0.10 crore) and
The company, an unregistered Core Investment Net Loss of ` 0.05 crore (previous year Net Loss of
company within the meaning of the Core Investment ` 0.03 crore).
Companies (Reserve Bank) Directions, 2016 and
NOTES ON JOINT VENTURES
related guidelines, recorded Total Income of ` 0.05
crore during the year (previous year ` 0.06 crore) and
ITC Essentra Limited
Net Profit of ` 0.01 crore (previous year ` 0.01 crore).
The Business registered strong recovery in course
MRR Trading & Investment Company Limited of the year in spite of pandemic led disruptions.
Operational agility and effective customer service
The company, a wholly-owned subsidiary of ITC
enabled the company to ensure seamless
Investments & Holdings Limited, holds tenancy rights
performance delivery during the year. The company
in a commercial building located in Mumbai and also
retained its leadership position of being the preferred
provides estate maintenance services.
supply chain partner for several well-known national
During the year, the company recorded Total Income and international brands leveraging its core strengths
of ` 7.25 lakhs (previous year ` 7.26 lakhs) and Net of strong customer relationships, focused innovation,
Profit of ` 0.13 lakh (previous year ` 0.33 lakh). best-in-class quality and consistent delivery.

ITC Limited REPORT AND ACCOUNTS 2022 87

Report of the Board of Directors

The company continues to partner with its customers Hyderabad, for developing a luxury hotel complex at
and make investments in innovation, technology Begumpet, Hyderabad. Under the terms of the Joint
upgradation and capability building towards sustaining Venture Agreement, your Company acquired 26%
its position as the ‘innovation and quality benchmark’ equity stake in EHPL and will, inter alia, provide hotel
in the Indian cigarette filter industry. During the year, operating services upon commissioning of the hotel.
the company expanded its capacity for manufacture of
As reported in prior years, the Ambience Group
Specialty Filters, in line with its strategy of offering a
has expressed its desire to review the timing of
wide range of innovative products to its customers.
further investments in EHPL, citing concerns about
During the year ended 31st March, 2022, the the viability of the project in view of the challenging
company’s Revenue from Operations stood at economic environment and the sluggish demand
` 385.62 crores (previous year ` 337.87 crores). Net conditions currently prevailing in the relevant market.
Profit during the year stood at ` 41.09 crores (previous Your Company continues to explore its options in
year Net Profit of ` 36.23 crores). this regard.

The Board of Directors has recommended a dividend Your Company’s investment in EHPL stood at
of ` 80.00 per Equity Share of ` 10 each for the year ` 46.51 crores as at 31st March, 2022.
ended 31st March, 2022 (previous year ` 70.00 per
Equity Share, including special dividend of ` 30.00 per Logix Developers Private Limited
equity share). Logix Developers Private Limited (LDPL) is a
joint venture between your Company and
Maharaja Heritage Resorts Limited Logix Estates Private Limited for developing a
Maharaja Heritage Resorts Limited (MHRL), luxury hotel-cum-service apartment complex at the
a joint venture of your Company with company’s leasehold site located at Sector 105 in
Jodhana Heritage Resorts Private Limited, currently New Okhla Industrial Development Authority (NOIDA).
operates 37 heritage properties across 15 States in Under the terms of the Joint Venture Agreement,
India under the ‘WelcomHeritage’ brand. The portfolio your Company holds 27.9% equity stake in LDPL and
of properties, comprising ‘Legend Hotels’, ‘Heritage will, inter alia, provide hotel operating services,
Hotels’ and ‘Nature Resorts’, provides uniquely upon commissioning of the hotel.
differentiated offerings to guests in the cultural, As reported in prior years, your Company reiterated
heritage, nature, wildlife and adventure tourism its position with the JV partner that it was committed
segments respectively. Operations across properties to developing a luxury hotel-cum-service apartment
were impacted by the pandemic and demonstrated complex as envisaged under the JV Agreement and
progressive recovery in course of the year. During that it was not interested in progressing with any
the year, MHRL expanded its footprint in southern alternative project plans proposed by the JV partner.
markets with the signing of new properties in Kochi However, the JV partner refused to progress the
and Ootacamund. project and instead expressed its intent to exit from
During the year ended 31st March, 2022, the the JV by selling its stake to your Company.
company recorded Total Income of ` 4.70 crores Subsequently, the JV partner proposed that both
(previous year ` 2.30 crores) and Net Profit of parties should find a third party to sell the entire
` 0.28 crores (previous year Net Loss of ` 0.68 crores). shareholding in LDPL. In view of these developments,
Total Comprehensive Income for the year stood at your Company had filed a petition before the erstwhile
` 0.29 crores (previous year Net Loss ` 0.68 crores). Company Law Board submitting that the affairs of the
JV entity were being conducted in a manner that was
Espirit Hotels Private Limited
prejudicial to the interest of your Company and the
Espirit Hotels Private Limited (EHPL) is a joint venture JV entity. The matter is currently before the National
between your Company and the Ambience Group, Company Law Tribunal (NCLT). The JV partner had

88 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

also filed a petition before the Honourable Delhi High To reinforce the concerns of safety, the company
Court for winding up the JV company, which was continued to leverage its program of ‘The SAFE Car
transferred to the NCLT by the Honourable Delhi Promise’, reassuring its customers on the highest
High Court. The matter was heard before the NCLT standards of reliability, safety and hygiene. During the
on several occasions in the past but could not be year, the company expanded its leisure offerings and
concluded. On 21st January, 2020, the matter continued to make focused initiatives towards further
was assigned to a new bench; the matter is being strengthening its customer service model.
heard and the date of next hearing is slated for
30th May, 2022. During the year ended 31st March, 2022, the
company recorded a Total Income of ` 96.51 crores
During the year, the company received notices (previous year ` 62.16 crores) and Net Loss for the
from NOIDA demanding payments in respect of the
year of ` 10.70 crores (previous year Net Loss of
aforesaid lease. The company has submitted its
` 45.07 crores). Total Comprehensive Income for
responses in this regard.
the year stood at (-) ` 10.18 crores (previous year (-)
During the year ended 31st March, 2022, the company ` 45.01 crores).
recorded a Net Loss of ` 47.58 crores (previous
Gujarat Hotels Limited
year ` 40.28 crores). The Net Worth of the company
stood at (-) ` 195.20 crores as at 31st March, 2022 The company’s hotel, ‘Welcomhotel Vadodara’, at
(previous year (-) ` 147.62 crores). Your Company’s Vadodara is operated by your Company under an
total investment in LDPL was ` 41.95 crores. Operating License Agreement.
Your Company had made provisions aggregating
Pandemic-induced restrictions during the first half of
` 33.45 crores towards diminution in the carrying value
the year adversely impacted the revenue from License
of investment in LDPL in the previous years, bringing
Agreement.
the carrying value of your Company’s investment
in LDPL as at 31st March, 2022, to ` 8.50 crores. During the financial year ended 31st March, 2022,
The financial statements of LDPL for the year ended the company recorded Total Income of ` 3.57 crores
31st March, 2022, are yet to be approved by its (previous year ` 3.06 crores) with Net Profit and Total
Board of Directors. In the absence of audited financial Comprehensive Income of ` 2.72 crores (previous
statements of LDPL, the Consolidated Financial year ` 2.27 crores). The Board of Directors of the
Statements of your Company for the year ended company has recommended a dividend of ` 2.00 per
31st March, 2022, have been prepared based on the Equity Share of ` 10/- each, for the year ended 31st
financial statements prepared by the management March, 2022 (previous year ` 1.80 per Equity Share).
of LDPL.
ATC Limited (an associate of Gold Flake
NOTES ON ASSOCIATES Corporation Limited)

International Travel House Limited The company is a contract manufacturer of cigarettes.

The company’s operations during the first quarter of
The company is engaged in the business of providing
travel related services to corporate travellers in the year were impacted by supply chain disruptions
India and abroad. The services include car rentals, due to the pandemic. The company continued to
business travel, leisure, meetings, incentives, maintain high levels of operational responsiveness
conferencing, exhibitions, foreign exchange and hotel and benchmark quality in its manufacturing operations
travel services. During the year, the industry was to service its customers. During the year, the company
severely impacted by the second and third waves was conferred with the EHS Excellence Gold Award
of the pandemic. In spite of a challenging operating by Federation of Indian Chambers of Commerce &
environment, the company witnessed a healthy Industry (FICCI) and Energy Efficient Unit Award by
recovery with gradual pick-up in mobility. Confederation of Indian Industry (CII).

ITC Limited REPORT AND ACCOUNTS 2022 89

Report of the Board of Directors

During the year, the company recorded Total Income Antrang Finance Limited
of ` 27.11 crores (previous year ` 25.47 crores) and
During the year, the company recorded Total Income
Net Profit of ` 0.35 crore (previous year ` 0.24 crore). of ` 0.22 crore (previous year ` 0.28 crore) and Net
Profit of ` 0.05 crore (previous year ` 0.10 crore).
Delectable Technologies Private Limited
The company continues to explore opportunities for
During the year, your Company invested ` 1.87 crores strategic investments.
towards the third tranche of Compulsorily Convertible
Preference Shares in Delectable Technologies Private INTERNAL FINANCIAL CONTROLS
Limited (Delectable). Your Company’s effective The Corporate Governance Policy guides the conduct
shareholding in Delectable increased to 27.34% of affairs of your Company and clearly delineates
(previous year 20.06%) on a fully diluted basis. the roles, responsibilities and authorities at each
level of its three-tiered governance structure and
The company is, inter alia, engaged in sale of FMCG
key functionaries involved in governance. The ITC
products leveraging app-based technology through
Code of Conduct commits management to financial
vending machines, primarily installed across office
and accounting policies, systems and processes.
locations. Operations of the company were impacted
The Corporate Governance Policy and the ITC Code
in the first half, with most offices remaining shut or
of Conduct stand widely communicated across the
operating with limited employees on account of the
enterprise at all times and together with the ‘Strategy
pandemic. The business witnessed gradual recovery of Organisation’, Planning & Review Processes
in the second half on the back of improved mobility and the Risk Management Framework provide
and easing of restrictions. the foundation for Internal Financial Controls with
During the year, the company recorded Total Income reference to your Company’s Financial Statements.
of ` 1.14 crores (previous year ` 0.90 crore) and Such Financial Statements are prepared on the
Net Loss of ` 1.30 crores (previous year Net Loss of basis of the Significant Accounting Policies that are
` 1.87 crores). carefully selected by management and approved by
the Audit Committee and the Board. These Policies
Associates of Russell Credit Limited are supported by the Corporate Accounting and
Russell Investments Limited Systems Policies that apply to the entity as a whole to
implement the tenets of Corporate Governance and
During the year, the company recorded Total Income the Significant Accounting Policies uniformly across
of ` 2.83 crores (previous year ` 3.50 crores) and Net your Company. The Accounting Policies are reviewed
Profit of ` 3.38 crores (previous year ` 2.27 crores). and updated from time to time. These, in turn, are
Total Comprehensive Income for the year stood at supported by a set of Divisional policies and Standard
` 15.51 crores (previous year ` 8.88 crores) reflecting Operating Procedures (SOPs) that have been
the recovery in market value of certain investments established for individual businesses.
which had been impacted due to the pandemic in the
Your Company uses Enterprise Resource Planning
previous year. The company continues to explore
(ERP) systems as a business enabler and also
opportunities for strategic investments.
to maintain its books of accounts. The SOPs, in
tandem with transactional controls built into the ERP
Divya Management Limited
systems, ensure appropriate segregation of duties,
During the year, the company recorded Total Income tiered approval mechanisms and maintenance of
of ` 0.40 crore (previous year ` 0.52 crore) and Net supporting records. The Information Management
Profit of ` 0.28 crore (previous year ` 0.17 crore). Policy reinforces the control environment. The
The company continues to explore opportunities systems, SOPs and controls are reviewed by
for strategic investments. Divisional management and audited by Internal Audit

90 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

whose findings and recommendations are reviewed relation to risk management covering a range of
by the Audit Committee and tracked through till responsibilities, from strategic to the operational.
implementation. These role definitions, inter alia, provide the
foundation for appropriate risk management
Your Company has in place adequate internal
procedures, their effective implementation across
financial controls with reference to the Financial
your Company and independent monitoring and
Statements. These have been designed to provide
reporting by Internal Audit.
reasonable assurance with regard to recording and
providing reliable financial information; complying – The Risk Management Committee, constituted by
with applicable statutes; safeguarding assets from the Board, monitors and reviews the strategic risk
unauthorised use; ensuring that transactions are management plans of your Company as a whole
carried out with proper authorisation and complying and provides necessary directions on the same.
with Corporate Policies and Processes. Such controls
– The Corporate Risk Management Cell, through
have been assessed during the year, after taking into
focused interactions with businesses, facilitates
consideration the essential components of internal
the identification and prioritisation of strategic and
controls stated in the Guidance Note on Audit of
operational risks, development of appropriate
Internal Financial Controls over Financial Reporting
mitigation strategies and conducts periodic
issued by The Institute of Chartered Accountants
reviews of the progress on the management of
of India. Based on the results of such assessment
identified risks.
carried out by management, no reportable material
weakness or significant deficiency in the design or – A combination of centrally issued policies and
operation of internal financial controls was observed. Divisionally-evolved procedures brings robustness
Nonetheless, your Company recognises that any to the process of ensuring that business risks are
internal control framework, no matter how well effectively addressed.
designed, has inherent limitations and accordingly, – Appropriate structures are in place to proactively
regular audit and review processes ensure that such monitor and manage the inherent risks in
systems are reinforced on an ongoing basis. businesses with unique/relatively high risk profiles.

RISK MANAGEMENT – Foreign currency exposures continue to be

managed within the framework of the Forex
As a diversified enterprise, your Company continues
Manual.
to focus on a system-based approach to business
risk management. The management of risk is – A strong and independent Internal Audit function at
embedded in the corporate strategies of developing the Corporate level carries out risk focused audits
a portfolio of world-class businesses that best match across all businesses, enabling identification of
organisational capability with opportunities in domestic areas where risk management processes may
and international markets, developing capabilities need to be strengthened. The Audit Committee
and competencies for the future in order to enhance of the Board reviews Internal Audit findings and
competitiveness and win in the markets of tomorrow. provides strategic guidance on internal controls.
Accordingly, management of risk has always been The Audit Compliance Review Committee closely
an integral part of your Company’s ‘Strategy of monitors the internal control environment within
Organisation’ and straddles its planning, execution your Company including implementation of the
and reporting processes & systems. Backed by strong action plans emerging out of internal audit findings.
internal control systems, the current Risk Management
– At the Business level, Divisional Auditors
Framework consists of the following key elements:
continuously verify compliance with laid down
– The Corporate Governance Policy, approved policies and procedures and help plug control
by the Board, clearly lays down the roles gaps by assisting operating management in the
and responsibilities of the various entities in formulation of control procedures.

ITC Limited REPORT AND ACCOUNTS 2022 91

Report of the Board of Directors

– A robust and comprehensive framework of aforementioned risks. With the amendment, added
strategic planning and performance management emphasis is being given to these areas across
ensures realisation of business objectives based your Company.
on effective strategy implementation. The annual
The Risk Management Committee met thrice
planning exercise requires all Businesses to clearly
during the year and was updated on the status and
identify their top risks and set out a mitigation
effectiveness of the risk management plans. The Audit
plan with agreed timelines and accountabilities.
Committee was also updated on the effectiveness
Businesses are required to confirm periodically that
of your Company’s Risk Management systems
all relevant risks have been identified, assessed,
and policies.
evaluated and that appropriate mitigation systems
have been implemented. A Cyber Security Committee, chaired by the
Chief Information Officer, is in place to provide specific
Your Company endeavours to continuously sharpen
focus on cyber security related risks, with the primary
its Risk Management systems and processes in line responsibility of tracking emerging practices and
with a rapidly changing business environment. technologies and providing suitable recommendations
In this regard, it is pertinent to note that some of the for enhancing security of the IT systems and
key Businesses of your Company have adopted infrastructure. The Chief Information Officer, an invitee
the ISO 31000 Risk Management Standard and to the Risk Management Committee, is responsible
accordingly, the Risk Management systems and for ensuring that the Cyber Security systems of
processes prevalent in these Businesses have been your Company remain effective and contemporary.
independently assessed to be compliant with the said
global Standard on Risk Management. This year, Cyber security controls are embedded in your
Agri SBU, Personal Care Products Business and the Company’s Information Technology (IT) environment
Life Sciences and Technology Centre were assessed to ensure protection from risks of unauthorised
for compliance with ISO 31000 Risk Management access, unauthorised changes or unavailability of
Standard. This is in addition to the six Businesses the systems. Key cyber security controls include
which were previously assessed for such compliance. secure configuration of enterprise assets and
The centrally anchored initiative of conducting external software, malware defences, periodic vulnerability
independent reviews of key business processes with and penetration testing, controlled access to critical
high ‘value at risk’ continued during the year. These business applications, appropriate segregation
interventions provide further assurance on the robust of duties and ongoing cyber security awareness
nature of risk management practices prevalent in programs for users.
your Company. The cyber security framework of your Company
During the year, the Risk Management Policy & includes specific checks and controls for your
Framework of your Company was revised in line Company’s digital marketing initiatives and public
with the Securities and Exchange Board of India facing websites. The framework further encompasses
(Listing Obligations and Disclosure Requirements) secure management of Mobile Applications and
Industrial Control Systems (ICS).
(Second Amendment) Regulations 2021, inter alia,
to incorporate (i) framework for identification of An independent agency has confirmed that
Environmental, Social, Governance (ESG) related the practices in the area of Information Technology-
risks as well as sustainability risks, information Operational Technology (IT-OT) integration across
risks and cyber security risks, (ii) measures for risk major Businesses of your Company are adequate
mitigation including systems and processes for and benchmarked to Industry. However, since this is
internal control of identified risks, and (iii) Business a fast-evolving area, ongoing attention will be
Continuity Plan(s). Your Company already has accorded to ensure contemporariness and
systems and processes to monitor and mitigate the best-in-class capabilities.

92 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

Your Company sources several commodities for mustard and chana through hedging on commodity
use as inputs in its Businesses and also engages in exchanges (mainly NCDEX). Correlation between
agri-commodity trading as part of its Agri Business. prices prevailing in the physical market and those
In respect of commodities sourced for use as inputs on the commodity exchange is analysed regularly
in its Businesses, your Company has well laid out to ensure effectiveness of hedging;
policies to manage risks arising out of the inherent
– robust monitoring and review mechanisms of net
price volatility associated with such commodities.
This includes robust mechanisms for monitoring open positions and ‘value at risk’.
market dynamics towards making informed sourcing The combination of policies and processes as outlined
decisions; well defined inventory holding norms above adequately addresses the various risks
based on considerations such as seasonality and associated with sourcing of commodities for
the strategic nature of the commodity concerned; your Company’s Businesses.
long-term contracts with suppliers to secure supply
of critical items at competitive costs and continuous During the year, systems and processes to handle
diversification of supplier base. Multiple sourcing pandemic related threats and risks were further
models, wide geographical spread, extensive strengthened against the backdrop of the second
sourcing and supply chain network and associated and third waves of the pandemic. This has enabled
infrastructure in key growing areas coupled with seamless transition to ‘Work from Home’, safety
deep-rooted farmer linkages ensure sourcing of high of employees and service providers, continued
quality agri-commodities at competitive costs. availability of raw materials, rapid resumption of
operations at units and agile response to the dynamic
Your Company’s strategy of backward integration in
requirements of the distribution network. Recent
sourcing of agri-commodities such as wheat, potato,
fruit pulp, spices, milk and leaf tobacco; in-house learnings in dealing with the pandemic have been
manufacturing of paperboards, paper and packaging seamlessly incorporated in the day-to-day procedures
(including pulp production and print cylinder making of your Company and will continue to be leveraged
facilities); wood procurement from the economic going forward.
vicinity of the Bhadrachalam unit, facilitates access to In response to the pandemic and escalation of
critical inputs at benchmark quality and competitive geopolitical tensions, various measures have been
cost besides ensuring security of supplies. Further, taken to ensure continuity in operations and servicing
each of your Company’s Businesses continuously
your Company’s customers. This includes increasing
focuses on product mix enrichment and yield
safety stock levels, leveraging alternate channels of
improvement towards protecting margins and
distribution, broad basing manufacturing partners and
insulating operations from spikes in input price.
activating alternate suppliers of key materials thereby
In respect of Agri-commodity trading, your Company increasing the resilience of supply chain.
has a well laid out policy to manage risks associated
The risk management practices of your Company,
with sourcing of such commodities. This includes:
as reviewed through the Risk Management Cell
– segregation of duties and robust internal controls and Internal Audit processes, have been found to
through a system of checks and balances be relevant and commensurate with the size and
embedded in the organisation and governance complexity of your Company’s operations.
structure;
– clearly defined limits for trading position (long and AUDIT AND SYSTEMS
short) and net cash loss for specific commodities/ Your Company believes that strong internal control
commodity groups; systems that are commensurate with the scale, scope
– mitigation of price, liquidity and counter party and complexity of its operations are concomitant to the
risks in respect of commodities such as soya, principle of governance that freedom of management

ITC Limited REPORT AND ACCOUNTS 2022 93

Report of the Board of Directors

should be exercised within a framework of appropriate pre-implementation audit before being deployed in the
checks and balances. operating environment, thereby delivering assurance
with respect to the rigour of implementation.
Your Company remains committed to ensuring a
mature and effective internal control environment that, Your Company’s Internal Audit continues to leverage
inter alia, provides assurance on orderly and efficient digital and automation tools benchmarked to global
conduct of operations, security of assets, prevention technology standards to ensure focused Information
and detection of frauds/errors, accuracy and Technology control assessment for various areas
completeness of accounting records and Management of automation including robotics and IT applications
Information Systems, timely preparation of reliable across Businesses.
financial information, adherence with relevant statutes
Qualified engineers in the Internal Audit function
and compliance with related party transactions.
review the quality of design, planning and execution of
Your Company’s internal control systems include all ongoing projects involving significant expenditure
documented policies and procedures, segregation to ensure that project management controls are
of duties and careful selection and development adequate and yield ‘value for money’. Internal Audit
of employees. continues to use state-of-the-art tools and software for
Your Company’s independent and robust Internal conducting project audits.
Audit processes, both at the Business and Corporate Processes in the Internal Audit function are
level, provide assurance on the adequacy and continuously strengthened for enhanced effectiveness
effectiveness of internal controls, compliance with and productivity including the deployment of
operating systems, internal policies and regulatory contemporary best-in-class tools for audit analytics.
requirements.
Your Company’s Internal Audit processes are certified
The Internal Audit function, consisting of professionally as complying with ISO 9001:2015 Quality Standards.
qualified accountants, engineers and Information The Audit methodology is also designed to validate
Technology (IT) specialists, is adequately skilled effectiveness of critical IT controls that are embedded
and resourced to deliver audit assurances at in business systems deployed across your Company,
highest levels. Targeted Learning and Development enabling a high degree of assurance on efficacy of
programmes on contemporary topics are periodically business process controls. The scope of Internal
organised to enhance knowledge and skill sets. Audit coverage also includes assessment of emerging
Independent consultants have confirmed compliance risks in the social media ecosystem and adoption of
of Internal Audit systems and processes with the digital technologies.
Standards on Internal Audit (SIA) issued by the Restrictions on mobility caused by recurrent waves
Institute of Chartered Accountants of India. Although of the pandemic during the year continued to impact
the Standards continue to be recommendatory the physical audit process. Under such challenging
in nature, such external validation evidences the circumstances and considering the safety & well-being
contemporariness of the Internal Audit function. of employees, the team continued its audits under
In the context of your Company’s IT environment, the ‘remote audit’ approach leveraging technology to
systems and policies relating to Information ensure continuity in audit and assurance processes.
Management are periodically reviewed and A comprehensive Standard Operating Procedure
benchmarked for contemporariness. Compliance with comprising, inter alia, data security controls and
the Information Management policies receives focused communication protocols facilitated seamless and
attention of the Internal Audit team. Business-led effective conduct of remote internal audits during
Information Technology systems undergo the year.

94 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

With a view to further enhancing productivity, institutional strengths of your Company and harvesting
improving the efficacy of audit processes and internal synergies.
optimising costs, Internal Audit is progressively
Your Company’s Human Resources development
moving towards adopting a ‘hybrid’ approach involving approach spans four key organisational dimensions
a combination of onsite and offsite audits. of Agility, Alignment, Ability and Architecture; which
The Audit Committee of your Board met ten times are supported through strategies crafted in areas
during the year. The Committee approves the of impact such as talent acquisition, engagement,
Internal Audit programme for the year so as to ensure diversity & inclusion, capability building, employee
adequacy of coverage. The Terms of Reference of relations, performance & rewards and employee
the Audit Committee, inter alia, include reviewing well-being.
the effectiveness of the internal control environment, The year under review witnessed significant upheaval
evaluation of your Company’s internal financial in the talent market. While the pandemic led to a
controls, and risk management systems, monitoring short-term demand-supply disequilibrium in the
implementation of the action plans emerging out of workforce, the rapid digitalisation of the ecosystem
review of significant Internal Audit findings including and entry of several technology-driven and privately
those relating to strengthening of your Company’s funded enterprises have heightened competition for
risk management systems and discharging of certain critical talent pools. Your Company’s unique
statutory mandates. employer equity as an exemplary Indian enterprise
creating world-class brands, building business leaders
HUMAN RESOURCE DEVELOPMENT and generating economic, social and environmental
The talent management strategy of your Company capital for the Indian economy, continues to play a
focuses on sustaining ITC’s position as one of India’s vital role in the attraction and retention of high-quality
most valuable corporations, remaining customer- talent. The management trainee programme,
focused, competitively superior, performance-driven augmented with recruitment of experienced talent
and future-ready. The initiatives and processes of from the market, is an integral part of the leadership
your Company strive to deliver the unique talent pipeline development process. Your Company
promise of Building Winning Businesses, Building continues to draw the finest management, technical
Business Leaders, and Creating Value for India. The and commercial talent from premier institutions in the
talent development practices help create, foster and country and is ranked amongst the leading companies
strengthen the capability of human capital to deliver in these institutions. Intensive engagement with the
critical outcomes on the vectors of strategic impact, country’s premier academic institutions over the years
to communicate your Company’s talent proposition
operational efficiency and capital productivity.
through case-study competitions, knowledge-sharing
Your Company’s ‘Strategy of Organisation’ is programmes by senior managers and the annual
designed to promote agility through a culture and internship programmes have all contributed to creating
practice of distributed leadership enabled by a three- a compelling proposition for the best candidates to
tier governance structure. This is manifested in market aspire for a career with your Company. Your Company
and consumer facing Businesses, which are driven continues to enthuse talent with high-impact roles,
by empowered, cluster-based teams and supported competitive and performance driven remuneration,
by shared assets and capabilities, enabling strategic with an emphasis on long-term incentives relative
relevance, speed, responsiveness, and operational to industry, diversity in learning opportunities, a
excellence. This approach allows Businesses, through commitment to enhancing diversity & inclusion,
their Management Committees, to focus, develop an employee-centric climate, well-being focused
and execute Business Plans relevant to their infrastructure and support that promotes fellowship
product-market spaces while leveraging the and commitment amongst employees.

ITC Limited REPORT AND ACCOUNTS 2022 95

Report of the Board of Directors

Your Company’s approach to management Your Company continues to strengthen its

development is founded on the belief that learning performance management system and its culture
initiatives must remain synergistic and aligned to of accountability through the widespread adoption
business outcomes. Towards this end, your Company of the system of Management-by-Objectives.
has built a culture of continuous learning, innovation Performance planning through clearly defined goals,
and collaboration by providing contemporary and outcome-based assessment, and alignment of
relevant learning and development support to rewards to achievement of results have all contributed
to a robust culture of ownership and accountability.
managers through a combination of platforms –
‘Career Conversations’ and succession planning
classroom, on-the-job, self-paced e-learning modules
processes have contributed to helping employees
and application projects. The emphasis is on providing
realise their potential, craft their careers while
experiential learning while remaining current with
recognising their strengths and areas of development
the curriculum and providing access to nationally
and ensuring a sound workforce planning system.
and globally recognised high-quality faculty. Deep
functional expertise is fostered early in one’s career In the spirit of continuous improvement, your Company
maintains a practice of periodically assessing
through immersion in complex problem-solving
employee engagement through a Company-wide
assignments requiring the application of domain
survey. The impact was visible in the survey in 2020
expertise. Managers are assessed on your Company’s
wherein Engagement, Performance Enablement,
behavioural competency framework and provided with
and Managerial Effectiveness measures improved
learning and development support to address areas
significantly over the previous survey. The recent
identified for improvement. Key talent is provided survey in 2022 affirms high levels of employee
critical experiences in high impact roles and mentored engagement and reflects significant consolidation of
by senior managers. This promotes the development gains achieved over recent years. During the year,
of a pool of high-quality talent through mentorship, a range of engagement programmes were designed
coaching and learning opportunities. and implemented, including initiatives such as
Your Company has identified three capability leadership outreach through extensive communication,
recognition programmes acknowledging exceptional
platforms relevant to making Businesses future-
contributions of employees and teams, career
ready – Business Critical Strategic Competencies,
conversations and development planning for
Leadership Development and Organisation Identity &
robust positioning and progression decisions and
Pride. Capability needs are identified for talent cohorts
investments in employee wellbeing. The year also
across domains covering dimensions which are of
witnessed the Cigarettes Business winning the ‘Silver’
vital significance to competitive performance. These in the prestigious ‘Economic Times Human Capital
include Brand Marketing, Data Science and Analytics, Awards 2021’ for ‘Excellence in Reward & Recognition
Marketing in a Digital world, Business Strategy programs’ where your Company was appreciated for
and Commercial Acumen. Globally benchmarked its employee recognition framework. The Cigarettes
curriculums are designed in these domains, delivered Business also secured the ‘Gold’ award in the
through internationally recognised faculty and ‘Excellence in Health & Wellness initiatives’
supplemented with business-critical application category where your Company showcased its
projects. This approach ensures that the application ‘Living Well’ programme.
of learning fructifies in a manner which benefits Your Company’s efforts to enhance Diversity, Equity
your Company’s business results. Similarly, as a part and Inclusion are founded on the conviction that
of leadership development initiatives, the Reflections a diverse workforce contributes to rich discourse,
360 programme comprising feedback and coaching promotes holistic perspectives, fosters creative
was conducted during the year to enable personal solutions and is integral to serving customers
development of employees. better while creating value for all stakeholders.

96 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

Your Company is committed to enhancing gender The ‘Young Digital Innovators Lab’ constituted in
diversity and participation of the differently-abled in 2021, identified innovative opportunities deploying
the workforce, and where needed, will undertake contemporary digital tools across your Company’s
supportive actions in the spirit of equity at the value chains. Various ‘proofs of concept’ were tested
workplace. Such concerted actions span three which have the potential to be scaled up to create
vectors, namely: further business value. ‘DigiNext’, the Digital Council,
– Representation participated in ideation and evaluating the adoption
of various suggestions to enhance your Company’s
– Inclusion & Enablement digital quotient and competitiveness.
– Commitment and Assurance Your Company believes that alignment of all
Measures to enhance diversity include ensuring employees to a shared vision and purpose is vital
sufficient representation of women in selection pools for winning in the marketplace. It also recognises the
and deployment of the differently-abled across suitable mutuality of interests with key stakeholders and is
opportunities in the value chain. Through policies committed to continue building harmonious employee
offering flexible work arrangements, extended child relations. Your Company remains dedicated to an
care leave, travel support for infants and care-givers, Employee Relations climate of partnership and
secure transport, paternity leave, same gender partner mutuality while ensuring operations are competitive,
medical benefits, infrastructure support coupled flexible and responsive. The Employee Relations
with various sensitisation programmes, formation of philosophy of your Company, anchored in the tenets
Employee Resource Groups and the commitment of Scientific Management, Industrial Democracy,
and sponsorship of leaders, your Company provides Human Relations and Employee Well-being, has
an enabling environment to further its Diversity, contributed towards building a robust platform which
Equity and Inclusion goals. Amongst several positive has aided the conclusion of collective bargaining
outcomes, your Company’s recruitment of talent from agreements at several of its manufacturing units and
premier campuses reflects diversity ratios superior to hotel properties, ensuring smooth commencement of
the prevailing norm in such institutions. operations at greenfield locations and the execution of
Your Company continued its practice of active productivity improvement practices. Several initiatives
leadership outreach to employees. Periodic have been taken to foster a culture of commitment
communication with the ITC community through amongst the demographically diverse workforce in
‘StudioOne Townhalls’ led by the Chairman, provided these new facilities. Your Company’s Foods Business
employees avenues to hear from and engage with was recognised with the ‘Significant Achievement
leaders about your Company’s vision, strategy and in Employee Relations’ Award by Employers’
milestones. This was supplemented by a more Federation of India. The award recognises your
personalised engagement through the ‘StudioOne Company’s consistent commitment to excellence in
Xchange’ initiative. The Chairman and other members Employee Relations, engage, involve and develop
of the Corporate Management Committee interacted employees - particularly factory personnel - through a
with managers across Businesses in small groups, series of targeted actions contributing to a culture of
sharing your Company’s vision and strategies while collaboration, mutuality and trust.
also inviting suggestions and feedback. The pandemic has cast unprecedented challenges
While your Company has covered significant ground and your Company has taken a host of measures to
and scaled up its digital investments exponentially ensure employee wellbeing and business continuity.
in recent years, it seeks to embrace digitalisation Your Company partnered with various internal
as a foundation capability, vital to accelerating as well as external stakeholders to support employees
value creation, offering novel ways of interacting and their family members in the face of widespread
with consumers and reconfiguring value chains and infections, especially during the second wave of
transforming business models. the pandemic. The provision of medical equipment

ITC Limited REPORT AND ACCOUNTS 2022 97

Report of the Board of Directors

across locations, COVID Care Centres for employees WHISTLEBLOWER POLICY

and their families, assistance with hospitalisation
Your Company’s Whistleblower Policy encourages
and treatment, paid leave for those infected or in
Directors and employees to bring to your Company’s
quarantine, vaccination facilitation through camps
attention, instances of illegal or unethical conduct,
for employees and their family members, service
actual or suspected incidents of fraud, actions that
provider personnel and supply chain partners, medical
affect the financial integrity of your Company,
advice through a network of Company doctors,
or actual or suspected instances of leak of
webinars on preventive measures, counselling
unpublished price sensitive information that could
services and stringent risk mitigation protocols such
adversely impact your Company’s operations,
as zoning in factories, restrictions on travel and office
business performance and/or reputation.
presence, masking, precautionary random testing,
The Policy requires your Company to investigate
temperature checks and social distancing measures
such incidents, when reported, in an impartial
in all locations, have been instrumental in reassuring
manner and take appropriate action to ensure that
employees, mitigating risks and ensuring medical
the requisite standards of professional and ethical
care in the event of infection. Your Company also
conduct are always upheld. Anonymous complaints
extended financial assistance for medical treatment
are also entertained if the complaint sets out specific
of employees’ parents and assistance to families of
allegations & verifiable facts, and is accompanied
deceased employees.
with supporting evidence. It is your Company’s
Your Company‘s thought, strategy and action are Policy to ensure that no complainant is victimised or
inspired by a larger purpose – a purpose to be an harassed for bringing such incidents to the
exemplary Indian enterprise that not only pursues attention of your Company, and to keep the
agile innovation to be extremely competitive, but also information disclosed during the course of the
one that embeds sustainability and inclusiveness at investigation as confidential. The practice of the
the core of its Businesses. This approach has enabled Whistleblower Policy is overseen by the Audit
it to create enduring value for the Indian economy, and Committee and no employee was denied access to the
the larger community of stakeholders, as also delight Committee during the year. The Whistleblower Policy
consumers with a vibrant portfolio of best-in-class is available on your Company’s corporate website
products and services. Each one of your Company’s at https://www.itcportal.com/whistleblower-policy .
employees will relentlessly strive to meet the bold
growth agenda, deliver world-class performance, SUSTAINABILITY 2.0
innovate newer and better ways of doing things, Your Company believes that when enterprises
uphold human dignity, foster team spirit and discharge make societal value creation an integral part of their
their role as ‘trustees’ of all stakeholders with corporate strategy, powerful drivers of innovation
true faith and allegiance. emerge that make growth more enduring for all
Your Company is committed to perpetuating this stakeholders. This paradigm is called ‘Responsible
vitality – its growth as a value generating engine and Capitalism’ - an abiding strategy that focuses
also as an exemplary institution – so that it continues on extreme competitiveness but in a manner
to succeed in its relentless pursuit of creating that replenishes the environment and supports
enduring value. sustainable livelihoods.

Details of the constitution of the Internal Complaints Your Company’s innovative business models
Committee under the Sexual Harassment of Women synergise the building of economic, environmental
at Workplace (Prevention, Prohibition and Redressal) and social capital, thus embedding sustainability
Act, 2013 are provided in the ‘Business Responsibility at the core of its corporate strategy. Today, this
Report’, forming part of the Report and Accounts. strategy has not only contributed to building strong

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businesses of the future as well as a portfolio of – Reducing specific energy consumption by 30%
winning world-class brands, but also in making and specific GHG emissions by 50% by 2030 as
your Company a global exemplar in ‘Triple Bottom Line’ compared to the FY 2018-19 baseline.
performance. Your Company is the only enterprise – Sustain and enhance carbon sequestration by
in the world of comparable dimensions to have expanding forestry projects on wastelands through
achieved and sustained the three key global indices of your Company’s Social and Farm Forestry
environmental sustainability of being programme and other such initiatives.
‘water positive’ (for 20 years), ‘carbon positive’
Water Stewardship
(for 17 years), and ‘solid waste recycling positive’
(for 15 years). This approach has enabled your – Achieving 40% reduction in specific water
Company and its businesses to support sustainable consumption by 2030 as compared to the
FY 2018-19 baseline.
livelihoods for more than six million people.
– Creation of rainwater harvesting potential
As the world prepares for a post-pandemic future, your
equivalent to over 5 times the net water
Company is actively working towards Sustainability
consumption by 2030.
2.0, an agenda which reimagines sustainability
under the pressing challenges of climate change and – Certification of all sites in high water stressed
social inequity. Sustainability 2.0 calls for inclusive areas as per the international water stewardship
strategies that can support sustainable livelihoods, standard by Alliance for Water Stewardship (AWS)
by 2035.
pursue newer ways to fight climate change, enable
the transition to a net zero economy, work towards – Improve crop water use efficiency in agri-value
ensuring water security for all and create an effective chains through demand side management
circular economy for post-consumer packaging waste. interventions and enable savings of 2,000 million
It also entails protecting and restoring biodiversity kilolitres of water by 2030.
and ecosystem services through adoption of nature- Plastic Waste and Circular Economy
based solutions. Your Company believes that agility in
– 100% of your Company’s Packaging to be
thought and action, meaningful public-private-people
Reusable, Recyclable or Compostable/
partnerships and Responsible Capitalism will act as Biodegradable by 2028.
core enablers of this new agenda. Your Company
has the potential to make a large-scale impact not Sustainable Agriculture
only from an economic standpoint, but also from an – Promote climate smart village approach in core
employment generation and social enablement lens Agri Business catchments covering over 3 million
because of its presence across several critical sectors acres by 2030.
of the economy. With its bold Sustainability 2.0 Biodiversity Conservation
agenda, your Company is setting the bar higher, and
– Revive & sustain ecosystem services and products
remains committed to making meaningful contribution
provided by nature, through adoption of nature-
to the Nation’s future while retaining its status as
based solutions and biodiversity conservation
a sustainability exemplar. The Sustainability 2.0
covering over 1 million acres by 2030.
ambitions include:
Sustainable Livelihoods
Climate Change
– Supporting sustainable livelihoods for 10 million
– Enhancing the share of renewable energy usage to people by 2030.
50% of total energy consumption by 2030.
Your Company’s Businesses are actively working
– Meeting 100% of purchased grid electricity towards achieving your Company’s Sustainability 2.0
requirements from renewable sources by 2030. vision. During the year, around 42% of

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your Company’s total energy requirements were met GRI Standards, is also aligned with the requirements
from renewable sources. Commendable progress of the International <IR> Framework developed by the
has been made in line with 2030 targets relating to International Integrated Reporting Council.
specific energy, specific GHG emissions and The Sustainability & Integrated Report 2022 is
specific water consumption across Businesses. available on your Company’s corporate website at
In line with its commitment, your Company has also https://www.itcportal.com/sustainability/sustainability-
achieved its goal of becoming plastic neutral during integrated-report-2022/ITC-Sustainability-Integrated-
FY 2021-22. During the year, your Company’s Report-2022.pdf .
large-scale programmes on Sustainable Agriculture
In addition, the Business Responsibility &
were expanded to cover 1.5 million acres. A
Sustainability Report (BRSR), as mandated by the
detailed performance dashboard against the 2030
Securities and Exchange Board of India (SEBI)
commitments is available in your Company’s
for the year under review is annexed to the Report
Sustainability & Integrated Report, 2022.
and Accounts. The BRSR maps the sustainability
To achieve its Sustainability 2.0 vision, your performance of your Company against the nine
Company continues to strengthen its management principles forming part of the National Guidelines on
approach which is guided by a comprehensive set Responsible Business Conduct issued by the Ministry
of sustainability policies and is being implemented of Corporate Affairs, Government of India.
across the organisation. Your Company is also
strengthening the mechanisms of engagement During the year, your Company sustained its
with key stakeholders, identification of material ‘AA’ rating by MSCI-ESG - the highest amongst
sustainability issues and progressively monitoring global tobacco companies, and has also been
and mitigating the impacts along the value chain of included in the Dow Jones Sustainability Emerging
each Business. Your Company will continue to update Markets Index. Additionally, your Company was
these systems and processes in line with evolving rated ‘A -’ at the Leadership Level for both Climate
disclosure standards and Environmental, Social and Change and Water Security by CDP, which is above
Governance (ESG) requirements. the Asia and Global average of ‘B-’ for climate change
and ‘B’ for water security.
Your Company’s 18th Sustainability Report, published
during the year detailed the progress made across Contribution to the United Nations Sustainable
all dimensions of the ‘Triple Bottom Line’ for Development Goals (UN SDGs)
FY 2020-21. This report is in conformance with the
Your Company’s Sustainability strategies and
Global Reporting Initiative (GRI) standards under
Social Investment Programmes & interventions,
‘In Accordance – Comprehensive’ category and is
in addition to their alignment with national priorities,
third-party assured at the ‘Reasonable Level’ as per
are also well positioned to contribute to the
International Standard on Assurance Engagements
achievement of India’s commitment under the
(ISAE) 3000.
UN SDGs. For instance, your Company’s programme
In addition, your Company’s 4th Integrated Report on Climate Smart Agriculture is aligned to the
was also published during the year which Government’s National Mission for Sustainable
conforms with the requirements of the Agriculture and also contributes to the achievement
International <IR> Framework published by the of multiple SDGs, including SDG 13 (Climate Action),
Value Reporting Foundation. The report presents SDG 15 (Life on Land), SDG 1 (No Poverty) and
a range of financial and non-financial disclosures SDG 2 (Zero Hunger). A comprehensive statement
to illustrate how different ‘capitals’ are deployed to linking your Company’s interventions to the SDGs,
enable creation of enduring value. including corresponding targets, is available in
Your Company’s Sustainability & Integrated Report your Company’s Sustainability & Integrated Report
for FY 2021-22, in addition to conforming with for FY 2021-22.

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Building Climate Resilience appropriate green features and premium luxury hotels
and office complexes continue to be certified at the
Your Company recognises the urgent need to combat
climate change for building a more secure future and highest level by either the US Green Building Council
the role it can play in enabling a net-zero economy. or Indian Green Building Council. During the year,
To this end, your Company is pursuing a low carbon around 42% (previous year 41%) of your Company’s
growth strategy through extensive decarbonisation total energy requirements were met from renewable
programmes across its value chain. These include sources such as biomass, wind and solar. During the
increasing the share of renewable energy, continuous year, your Company commissioned its first offsite
reduction of specific energy, construction of green solar plant in Dindigul, Tamil Nadu, in line with its
buildings, greening logistics and optimising Sustainability 2.0 vision. The 14.9 MW solar plant
‘distance-to-market’, and promoting regenerative will help reduce CO2 emissions significantly and
agriculture practices in agri-value chains. has already enabled your Company to meet 90% of its
Additionally, in order to identify long-term risks, your electricity requirement in the state of Tamil Nadu from
Company has worked with climate experts to conduct renewable sources. Additionally, your Company’s
a comprehensive climate change risk and vulnerability Paperboards & Specialty Papers Business
assessment using climate models across its operating commissioned a state-of-the-art and future-ready
locations (factories, hotels, warehouses etc.). High Pressure Recovery Boiler at the Bhadrachalam
The assessment considered the impact of climate mill, replacing conventional soda recovery boilers,
variables like temperature, precipitation, sea level rise, which will contribute towards reducing carbon footprint
river/coast proximity and extreme weather events over through lower coal consumption.
long-term time frames (2040-2060 and 2060-2080)
Your Company is well positioned to benefit from
under two Representative Concentration Pathway
energy conservation and renewable energy promotion
(RCP) scenarios - RCP 4.5 and RCP 8.5. In line with
schemes such as Perform, Achieve and Trade (PAT)
the findings of the assessment, detailed site-specific
and Renewable Energy Certificates (RECs) promoted
assessments are being undertaken for risk mitigation
by the Government of India. Your Company continues
and adaptation.
its efforts towards meeting 100% of purchased grid
Similarly, factors such as rise in extreme weather electricity requirements from renewable sources,
events, varying climatic parameters and dependence and achieving 50% renewable energy share in
on rainwater for irrigation make agriculture in India its total energy consumption by 2030 based on a
quite vulnerable to climate change. For major crops
mix of energy conservation and renewable energy
like wheat, pulp-wood and leaf tobacco among others,
investments, despite significant enhancement in its
there is significant and sustained work being done on
scale of operations going forward.
the development of climate-tolerant varieties as well
as dissemination of climate-resilient and regenerative Greenhouse Gases and Carbon Sequestration
agronomic practices in the growing areas.
The GHG inventory of your Company for
Detailed farm-level studies are also being conducted
FY 2021-22 compiled according to the ISO 14064
to understand the potential adverse impacts of climate
Standard has been assured, as in the earlier years,
change on your Company’s key agri-value chains.
at the ‘Reasonable Level’ by an independent third party.
These risk assessments will help calibrate the climate
The GHG inventory covers emissions from your
resilience measures that are being implemented
Company’s operations and GHG removals from
across your Company’s value chains.
your Company’s large-scale forestry programmes.
Energy Conservation and Renewable Energy In order to continuously reduce your Company’s
As a responsible corporate citizen, your Company has energy footprint, green features are being integrated
made a commitment to reduce dependence on energy in all new and old constructions including hotels,
from fossil fuels. Accordingly, all factories incorporate manufacturing units, warehouses and office

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complexes. Your Company is a pioneer in the green Towards Water Security for All
building movement, with 38 buildings having received
Your Company continues to focus on an integrated
Platinum certification by USGBC (U.S. Green Building water management approach that includes water
Council)/IGBC (Indian Green Building Council). conservation and harvesting initiatives at its Units –
Several of your Company’s factories and office while at the same time working towards meeting the
complexes have received the Green Building water security needs of all stakeholders at the local
certification from IGBC and the Leadership in Energy & watershed level. Interventions have been rolled out
Environmental Design (LEED®) certification from to improve water-use efficiencies by adopting latest
USGBC. In 2004, the ITC Green Centre at Gurugram technologies and increasing reuse and recycling
received LEED® Platinum certification by USGBC, practices within the fence while also working with
making it the largest Platinum rated building in farmers and other community members towards
the world at that point in time. The data centre at improving their water-use efficiencies.
Bengaluru, ITC Sankhya, is the first data centre in The demand side measures are followed by
the world to receive the LEED® Platinum certification augmenting supply at the sub-catchment level through
by USGBC. Large infrastructure investments such as various interventions focused on harvesting rainwater
the ITC Green Centre at Guntur and the ITC Green based on the recommendations of hydro-geological
Centre at Bengaluru (both LEED® Platinum certified) studies. The supply side interventions include
continue to demonstrate your Company’s commitment enhancing capture and storage of rainwater (in soil
to green buildings. Virginia House, Kolkata and and storage ponds) and recharging aquifers. Your
ITC Centre, Kolkata – the headquarters of your Company, Company also conducts efficacy studies to assess
is also certified at the highest ‘LEED® Platinum’ rated the impact of the watershed work carried out, and to
Green Building by USGBC. ensure that maximum benefits accrue in the long-term.
As on 31st March, 2022, your Company’s integrated
Reaffirming your Company’s commitment to the
watershed development projects covering over
ethos of ‘Responsible Luxury’, all luxury collection
1.3 million acres of land have created a total rainwater
hotels of your Company are LEED® Platinum harvesting potential (RWH) of over 46 million kl,
certified, making your Company a trailblazer in green which is nearly 4 times the net water consumed by
hoteliering globally. ITC Grand Chola, the 600-key your Company’s operations in FY 2021-22.
super-premium luxury hotel complex in Chennai, is
Your Company’s Paperboards & Specialty Papers
amongst the world’s largest LEED® Platinum certified
unit at Kovai was only the second facility in the world
green hotels. In 2020, ITC Windsor’s best practices
and first in India to be awarded the AWS Platinum
on carbon management distinguished it as the first
level certification in FY 2019-20 – the highest
hotel in the world to be LEED® Zero Carbon certified.
recognition for water stewardship in the world.
Additionally, in FY 2021-22, ITC Grand Chola and
Your Company is in the process of implementing the
ITC Gardenia were also certified as LEED®
AWS Standards at other Units in high water stress
Zero Carbon with ITC Grand Chola being the largest
areas, and will progressively obtain AWS certification
and ITC Gardenia being the third hotel with LEED®
for these sites in the coming years.
Zero Carbon certification in the world.

Your Company’s Social and Farm Forestry initiatives, Building a Circular Economy for
besides mitigating the impact of increasing levels of Post-Consumer Packaging
GHG emissions in the atmosphere, help greening of Your Company continues to make significant progress
degraded wasteland, prevent soil erosion, enhance in reducing specific waste generation through constant
organic matter content in soil and increase ground monitoring and improvement of efficiencies in material
water recharge. utilisation and also in achieving almost total recycling

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of waste generated in operations. In this way, Your Company’s waste recycling programme,
your Company has prevented waste reaching landfills ‘WOW – Well Being Out of Waste’, enables the
and the associated problems of soil and groundwater creation of a clean & green environment and
contamination and GHG emissions, all of which promotes sustainable livelihoods for waste collectors.
can adversely impact public health. In the current During the year, the programme continued to
year, your Company has achieved over 99% waste be executed in Bengaluru, Mysuru, Hyderabad,
recycling. In addition, your Company’s Paperboards & Coimbatore, Chennai, Muzaffarpur, Delhi, major towns
Specialty Papers Business recycled over of Telangana and several districts of Andhra Pradesh.
85,000 tonnes of externally sourced post-consumer The quantum of dry waste collected during the year
waste paper, thereby creating yet another positive was about 60,000 MT from over 1,000 wards.
environmental footprint. The programme has covered over 1.8 crore citizens in
over 46 lakh households, 52 lakh school children and
Your Company aims to go beyond the requirements
around 2,040 corporates since its inception.
of Plastic Waste Management Rules, 2016 to ensure
It has promoted sustainable livelihood for over
that, over the next decade, 100% of packaging is
17,000 waste collectors by facilitating an effective
reusable, recyclable or compostable/biodegradable.
collection system in collaboration with municipal
Your Company is working towards optimising
corporations. The intervention has also created
packaging in a way that reduces the environmental
over 140 social entrepreneurs who are involved in
impact arising out of post-consumer packaging waste
maximising value capture from dry waste collected.
without affecting product integrity. This is being
In Pune, your Company is spearheading a circular
done in a structured manner by optimising design,
economy based on first-of-its-kind Multi-Layer Plastic
identifying alternative packaging material with lower
(MLP) collection and recycling programme.
environmental impact and suitable end-of-life solutions
for packaging waste. Your Company has successfully In addition to WOW, a separate community-driven
implemented multiple large-scale models of municipal programme on decentralised Solid Waste
solid waste management across the country. Management (SWM), in collaboration with
These models, based on principles of circular Swachh Bharat Mission, is operational in 17 districts
economy, are scalable, replicable and sustainable, of 10 states covering 14.6 lakh households.
and have enabled your Company to become plastic This programme deals with both wet and dry waste
neutral in FY 2021-22. The approach is centred and focuses on minimising waste to landfill by
around treating waste as a resource and ensuring that managing waste at source. Under the programme,
zero waste goes to landfill, which can be achieved more than 99,700 MT of waste was collected during
only when waste is segregated at source. The FY 2021-22 out of which around 63,700 MT of wet
initiatives focus on educating citizens on segregating waste was composted, 19,000 MT of dry waste was
waste at source into dry and wet streams and recycled, and only 17% of the total waste was sent
ensuring that value is derived from these resources to landfills. Further, home composting was practiced
and in the process support sustainable livelihood for by over 3.2 lakh households.
waste collectors and rag-pickers. These models
In Uttar Pradesh, your Company partnered with the
operate on a public-private partnership basis with
Urban Development Department, leading to over
active involvement of urban local bodies, civil society
1,400 Government officials from 31 municipalities
and the informal sector of waste collectors.
being trained on decentralised SWM till date.
Your Company has exceeded its commitment on During the year, your Company also signed an MoU
plastic neutrality made in the previous year, collecting with Lohiya Swachh Bihar Abhiyan (LSBA),
and sustainably managing more than 54,000 tonnes of Rural Development Department, Government of Bihar,
plastic waste across 35 States/Union Territories. to train officials on implementation of decentralised

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SWM in nearly 500 villages of Ganga region 2030 on Climate Change and Sustainability,
(‘Ganga Gram’) across 12 districts of Bihar. establishment of the CII Climate Action Charter,
The ‘Green Temple’ initiative, powered by MSME toolkit for climate risk management, and
your Company’s Social Investments programme interlinking climate related policy advocacy in
‘Mission Sunehra Kal’, is a closed loop waste CII Councils and Committees.
management model involving processing of waste – A roundtable of industry members and GIZ
generated in temples to provide biogas to the kitchen (a German development agency that provides
and compost for its gardens. During the year, services in the field of international development
the initiative was expanded to 500 temples across cooperation and international education work) held
Andhra Pradesh, Bihar, Uttar Pradesh, Uttarakhand, in December 2021 documented the challenges and
Tamil Nadu, Karnataka and Maharashtra. opportunities in implementing Voluntary Climate
Action (VCA) through Voluntary Carbon Market
Promoting Thought Leadership in Sustainability
(VCM) and Internal Carbon Prizing (ICP)
Your Company’s pursuit of the ‘Triple Bottom Line’ to address climate risks and achieve net zero
approach has allowed it to develop unique, emissions. An industry-led ‘Task Force on
sustainable and industry-leading solutions to some Afforestation’ created modalities to partner with the
of the most pressing sustainable development Government of India and also developed
challenges faced by our country. Combining comprehensive afforestation-based methodologies
deep-rooted insights, perspectives and on-ground towards the mission of developing carbon
managerial expertise with meaningful collaborations sinks of appx. 3 billion tonnes and restoring
and partnerships, your Company has created 26 million hectares by 2030.
sustainable, scalable and replicable business models
in response to these challenges. – A pre-COP26 Conclave in October 2021 brought
together different stakeholders on the vital issue of
To ensure wider adoption of the ‘Triple Bottom Line’
combating climate change. The virtual Conclave
philosophy across the Industry, your Company
had two sessions – (a) Adopting Clean Energy for
established the ‘CII–ITC Centre of Excellence for
Climate Change and (b) Information Technology
Sustainable Development’ in 2006 in collaboration
Sector: Tackling Climate Crisis. In the run up to
with the Confederation of Indian Industry (CII).
COP26 and as part of a global campaign,
The Centre continues to focus on its endeavour to
the Centre also organised a series of six webinars
promote sustainable business practices amongst
during the period June to August 2021 on
Indian enterprises. The major highlights during the
‘Race to Zero’ with emphasis on topics including
year include the following:
RE100, SME Climate Hub, RE100, EV 100,
Climate Change and technology transfer.

– A CEO’s working group on ‘Driving Accelerated – At COP26, the delegation members held high-level
Climate Action’ was set up with the objective of discussions with the Minister of Environment,
developing and driving a compelling strategy Forest and Climate Change, Government of India,
and action plan to enable Indian businesses Chair of the Energy Transitions Commission, UK
adopt sustainability for building a climate-resilient and the US Special Presidential Envoy for Climate
future. The working group is led by the Chairman on business’ perspectives to mainstream climate
and Managing Director of your Company, and action. The Centre, in collaboration with
comprises 11 CEOs from leading businesses. World Business Council for Sustainable
Rapid progress is being made by the working Development (WBCSD), also organised a session
group on the agenda of creation of CII Vision on ‘Greening India’s Power Grids’.

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Circular Economy Air Pollution

– The India Plastics Pact, a collaboration between – Signatories to the Clean Air Better Life forum
Centre and the WWF, became part of a network has grown to 72 companies, and members have
of 13 Plastic Pacts across the globe at its launch agreed to work on a common framework for
at the 16th Sustainability Summit. The Pact has inter-corporate collaboration and sharing of best
set four major targets: eliminate unnecessary or practices. The Industry Platform on Sustainable
problematic plastic packaging and items, reuse or Transportation has 85 members, and as an
recycle 100% of plastic packaging, recycle 50% outcome of two platform meetings and bilateral
of plastic packaging and ensure 25% average consultations with members held in 2021, a draft
recycled content across all plastic packaging. map of on ground barriers and potential solutions
has been developed.
– The Centre continued working on the inventory
of plastics in India and created a material flow of – A report on the Economic Impacts of Air Pollution
major plastic resins in India. Along with the in India, prepared by Dalberg with support from the
CII-Sohrabji Godrej Green Business Centre, Centre and Clean Air Fund, was launched at the
6th CEOs meeting of India CEO Forum under the
the Centre also began a study to identify
Cleaner Air-Better Life (CABL).
greenhouse gas mitigation strategies through
resource efficiency and circular economy across – The Crop Residue Management programme was
the cement value chain. expanded to 44 new villages in 3 new clusters.
The project also became a case study by IIM
– The Plastics-use Protocol, developed in 2020 to
Bangalore, which was published in the Harvard
help companies record, certify and verify plastic
Business Review (HBR).
use reduction in packaging and product lines,
enabled 60 sites of 6 companies to be certified – The Multi Agency Collaborative Project on
Single Use Plastics (SuP) free by 2021. Air Pollution, with support of the Madhya Pradesh
Pollution Control Board (MPPCB), was initiated
Biodiversity in Indore Metropolitan Region (IMR), offering a
common platform to stakeholders to contribute
– India Business & Biodiversity Initiative (IBBI), in
to cleaner air. Air quality modelling is being
collaboration with the World Spice Organisation
conducted by IIT Delhi and is being downscaled
(WSO), interacted with companies in the Spices
for the Indore Metropolitan region with inputs
sector operating in Western Ghats to integrate
from experts of California Air Resources Board.
biodiversity practices in their business plans. 
Additionally, CII CABL team is working with
– The Centre, WWF India and GIZ jointly Smart City Indore to integrate 20 sensors
organised a virtual business consultation on installed by John Snow India into a network of
the first draft of Post 2020 Global Biodiversity 50 sensors.
Framework, released by the Secretariat of the
UN Convention on Biological Diversity (CBD) Excellence in Sustainability
in August 2021. The key recommendations, – The Centre organised the 16th Sustainability
submitted to Ministry of Environment, Forest and Summit virtually on the theme of ‘Building a
Climate Change (MoEFCC) and CBD, include Resilient Future: Leveraging Science, Technology
guidance on goals & targets of post 2020 Global and Finance’ in September 2021 in partnership
Biodiversity Framework, development of modules with 23 multi-sectoral organisations. The emphasis
& mechanisms for biodiversity conservation, of the Summit was on interactions and
and building partnerships and collaborations for interconnectedness between elements of physical,
effective management of biodiversity. social, natural and human capital. A total of

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21 sessions were held on diverse topics. installation of 22 oxygen generation units and
There were 107 speakers with 25% global and distribution of 1,200 oxygen concentrators to different
27% female speakers with a total audience of hospitals; (b) providing essential medical infrastructure
800 participants. support through a wide range of interventions like
– At the 16th CII-ITC Sustainability Awards in setting up of COVID isolation centres, setting-up
January 2022, 21 companies were recognised for of 600 hospital beds in three states, supply of
Corporate Excellence, Environment Management, ventilators, oxygen cylinders, modular ICU units, and
and Biodiversity. Shri Rao Inderjit Singh, MP, ambulances; (c) distribution of food and personal
Union Minister of State (Independent Charge) hygiene products; and (d) large-scale vaccination
of the Ministry of Statistics and Programme drives in multiple states.
Implementation; Union Minister of State Your Company’s overarching commitment to
(Independent Charge) of the Ministry of Planning create significant and sustainable societal value is
and Union Minister of State in the Ministry of manifest in its CSR initiatives that embrace the most
Corporate Affairs, and Mr. Sanjiv Puri, Chairman disadvantaged sections of society, especially in
and Managing Director, ITC Limited, recognised rural India, through economic empowerment based
the winners for Excellence in Sustainable Business. on grassroots capacity building. Towards this end,
your Company has a comprehensive CSR Policy
Capacity Building on various topics
outlining programmes, projects and activities that
– Nearly 1,400 participants were covered through your Company undertakes to create a significant
50 capacity building programmes conducted positive impact on identified stakeholders. All these
during the year. Topics of discussions included programmes fall within the purview of Section 135
Climate Change, Energy and Energy Management read with Schedule VII of the Companies Act, 2013
Systems, Health and Safety, Value Innovation, and the Companies (Corporate Social Responsibility
CSR Rules and Impact Measurement, Policy) Rules, 2014.
Sustainability Reporting, Integrated Reporting,
Human Rights, Circular Economy and Biodiversity, The key elements of your Company’s CSR
Waste Management Rules, Plastic use Protocol, interventions are to:
Sustainable Procurement, Corporate Risk – deepen engagement in identified core operational
Management among others. geographies to promote holistic development and
design interventions in order to respond to the
CORPORATE SOCIAL RESPONSIBILITY (CSR) most significant development challenges of
The two waves of the pandemic during the year your Company’s stakeholder groups.
severely impacted health and livelihoods across the
– strengthen capabilities of Non-Government
country, especially those of the poor and vulnerable
Organisations (NGOs)/Community Based
sections of society. Your Company rose to the
Organisations (CBOs) in all project catchments
challenge and took proactive initiatives to provide
for participatory planning, ownership and
relief to vulnerable sections of society and also
sustainability of interventions.
facilitated their economic rehabilitation in the
medium term. – drive the development agenda in a manner that
empowers women and benefits the poor and
Your Company not only aided the Government’s
marginalised communities in our factory and
efforts but also proactively took a host of actions to
agri-catchments, thereby significantly improving
provide relief to the poor and vulnerable sections
Human Development Indices (HDI).
of society including (a) providing support to ensure
regular oxygen supply in hospitals by being amongst – ensure behavioural change through focus on
the first to import cryogenic ISO containers (24 nos.), demand generation for all interventions, thereby

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enabling participation, contribution and asset ensures food, fodder and wood security. Further,
creation for the community. fast growing, high yielding and disease resistant
hybrid clones and saplings of eucalyptus pulpwood
– strive for scale with impact by leveraging
developed by your Company deliver significantly
government partnerships and accessing the most
contemporary knowledge/technical know-how. higher productivity vis-a-vis earlier clones.
The clones have been developed to grow under
Your Company’s stakeholders are confronted with varying ecological conditions, thereby building
multi-dimensional and inter-related concerns, at the resilience and contributing towards increasing
core of which is the challenge of securing sustainable income for the farming community. Data from wood
livelihoods. Accordingly, interventions under supplied by Mutually Aided Co-operative Society
your Company’s Social Investments programme (MACS) shows improvement in yield by over 12%,
are appropriately designed to build capacities and
primarily enabled through improved focus on
promote sustainable livelihoods.
promoting inter-crop practices in agro-forestry and
The footprint of your Company’s CSR projects is farmer training on productivity improvement.
spread across 25 States/Union Territories covering
Besides enhancing farm level employment, generating
over 200 districts.
incomes and increasing green cover, this large-scale
Your Company’s CSR interventions were conferred initiative also contributes meaningfully to the nation’s
with two prestigious awards during FY 2021-22: endeavour to create additional carbon sinks for
– First prize in the ‘Best Industry for CSR Activities’ tackling climate change.
category at the third National Water Awards by In addition to the above, the Social and Farm Forestry
Ministry of Jal Shakti, which was presented by initiative of your Company, through a multiplier
Shri Ram Nath Kovind, Hon’ble President of India. effect, has led to improvement in pulpwood and
– Institute of Company Secretaries of India (ICSI) fuelwood availability in Andhra Pradesh, Telangana,
CSR Excellence Award in the ‘Large’ category, Karnataka and Odisha.
for consistently demonstrating innovation and
Soil and Moisture Conservation
sustainability in managing CSR. The Award was
presented by Shri Amit Shah, Union Minister for The Soil and Moisture Conservation programme
Home Affairs and Cooperation. aims to ensure water security for all dependents
in the factory catchments and to drought-proof the
Social Forestry agri-catchments to minimise risks to agricultural
Your Company’s pioneering afforestation initiative livelihoods arising from drought and moisture stress.
through the Social Forestry programme greened The programme promotes the development and
over 30,700 acres during the year. It is currently management of local water resources in
spread across 19 districts in 9 States covering over moisture-stressed areas by facilitating community
4.25 lakh acres in nearly 7,000 villages, impacting participation in planning and implementing such
over 1.4 lakh poor households. Together with measures, as well as building, reviving and
your Company’s Farm Forestry programme, maintaining water-harvesting structures. The coverage
this initiative has greened over 9.5 lakh acres till date, of this programme currently extends to 40 districts of
and generated over 173 million person days of 16 states. During the year, the area under watershed
employment for rural households, including women, increased by over 1 lakh acres, taking the
poor tribal and marginal farmers. Integral to the cumulative coverage area to over 13.3 lakh acres.
Social Forestry programme is the Agro-Forestry Over 3,100 water-harvesting structures including
initiative including plantations on bunds, which ground water recharge structures were built during
cumulatively extends to about 1.8 lakh acres and the year, creating nearly 3.5 million cubic metres of

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rainwater harvesting potential. This took the total plots through soil moisture retention, carbon
number of water harvesting structures to over sequestration and by acting as hosts to insects and
25,000 and the net water storage to over 45 million birds beneficial to agriculture.
cubic meters. In addition, your Company continues to
To increase the coverage for pastureland
work with farmers to achieve ‘more crop per drop’
development and biodiversity conservation,
by promoting agronomic practices and micro
your Company partnered with Forest Departments of
irrigation techniques targeted towards saving water in
Maharashtra and Telangana, and Wasteland &
cultivation and improving farmer incomes. Around
Pastureland Development Board (WPDB) of
7.3 lakh acres have been covered across 11 states
Rajasthan. The partnership with WPDB is targeted to
during the year; more than twice over previous year.
cover 2.5 lakh acres across 8 districts. Further,
Studies have been conducted by Vasantdada Sugar
during the year, 475 Government staff were trained
Institute and Tamil Nadu Agricultural University
for implementing the programme across 2,800 villages
to estimate water savings in sugarcane, coconut
encompassing 34,000 acres.
and banana in your Company’s programme
locations. According to these studies, demand
Sustainable Agriculture
management practices promoted by your Company
have led to potential water savings to the tune of The Sustainable Agriculture programme attempts to
497 million cubic metres during the year. de-risk farmers from erratic weather events through
the promotion of climate-smart agriculture premised
Additionally, your Company is continuing partnerships
on dissemination of relevant package of practices,
with multiple state government departments for
adoption of appropriate mechanisation and provision
Soil and Moisture Conservation. Under the partnership
of institutional services. Currently, 15.2 lakh acres
with Watershed Development Department,
and over 4.5 lakh farmers are covered under the
Government of Karnataka, signed in the previous
programme, representing an increase of 71% and
year, capacities are being built using your Company’s
77% respectively over the previous year. This has
Water Stewardship approach to drought proof
a significant multiplier effect in terms of adoption of
100 watersheds across 29 districts covering
sustainable practices by the farming community.
over 1.1 million acres. During the year, Government
During the year, knowledge was disseminated
officials responsible for all 100 watersheds were
through more than 7,100 Farmer Field Schools and
trained to incorporate your Company’s drought
over 3,000 Choupal Pradarshan Khets. More than
proofing and positive water balance based planning.
610 Agri Business Centres delivered extension
Biodiversity services, arranged agri-credit linkages, established
collective input procurement and provided agricultural
The focus of the programme is on reviving ecosystem
equipment for hire. In pursuit of your Company’s
services provided to agriculture such as natural
long-term sustainability objective of increasing soil
regulation of pests, pollination, nutrient cycling,
organic carbon, more than 2,500 compost units were
soil health retention and genetic diversity, which have
constructed during the year, taking the total number
witnessed considerable erosion over the past
till date to over 51,300 units.
few decades. During the year, your Company’s
biodiversity conservation initiative covered Your Company, with its presence across multiple
over 89,000 acres, taking the cumulative area under commodities and geographies including e-Choupal
biodiversity conservation to over 1.3 lakh acres in network and agri extension programmes network,
more than 29 districts across 10 states. While the undertook an initiative to facilitate formation of
conservation work is being carried out in select plots new FPOs and/or strengthening existing FPOs,
of village commons, this intervention significantly thus, enhancing farm incomes, rural livelihood
benefits agricultural activity in the vicinity of these and partnering in other relevant rural development

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initiatives. During FY 2021-22, your Company livestock development, women empowerment and
supported around 200 FPOs across 6 states. agro-forestry are also included. Over 2 lakh farmers
have already benefited from the interventions under
The ‘Village Adoption Programme’ pioneered by
this programme – over 35,000 farmers who have
your Company’s Agri Business presently covers
245 model villages in the states of Andhra Pradesh adopted the package of practices reported doubling
and Karnataka. This initiative is aligned to the Prime of income and those who have implemented the
Minister’s Sansad Adarsh Gram Yojana (SAGY), programme partially reported increase in their
an initiative to promote holistic rural development. incomes by 30% to 75%.
Under this programme, your Company is addressing
Livestock Development
the human rights and farm safety challenges in
Indian farming by educating the farmers, labour and The programme provides an opportunity for
community and providing access to tools and Personal households to improve their livestock-based
Protective Equipment (PPE) kits for use on the field. livelihoods by improving productivity of the progeny
through breed improvement and dissemination
Your Company had entered into a partnership with
of improved animal husbandry practices.
NITI Aayog in April, 2018, to improve agriculture and
The programme provided extension services,
other allied services in 27 aspirational districts of
including breeding, fodder propagation and training
8 states (Assam, Bihar, Jharkhand, Rajasthan,
to farmers owning cows and buffaloes in 5 states and
Madhya Pradesh, Maharashtra, Odisha and Uttar
18 districts. During the year, over 1.1 lakh artificial
Pradesh) by training government officers who, in turn,
would cascade the methodology to farmers. During inseminations (AIs) were carried out which led to the
the year, 5.9 lakh farmers from appx. 18,900 villages birth of 0.5 lakh high yielding progeny. Cumulatively,
were trained digitally through WhatsApp groups, while the figures for AIs and calving stand at over 27 lakh
over 6.1 lakh farmers were trained through physical and 9.5 lakh, respectively. In addition, the livestock
sessions, taking the cumulative reach to around programme also covered families engaged in goat and
34 lakh farmer interactions. Estimates indicate yield sheep rearing, enhancing their productivity through
improvement of up to 30% for cotton, maize, paddy promotion of improved management practices.
and soyabean in locations covered by the programme; Under the programme, 164 women trained as
similarly cost of cultivation is estimated to have ‘Pashu Sakhis’ provided extension services to over
reduced by nearly 15%, resulting in expansion of 16,000 households till date, thus enabling them to earn
farmer incomes by up to 60%. supplementary income of up to ` 5000 per month.

The ‘Baareh Mahine Hariyali’ programme in select Your Company is also working with dairy farmers in
districts of Uttar Pradesh (Chandauli, Ghazipur, Bihar and West Bengal to improve productivity through
Prayagraj and Varanasi) is a pioneering initiative to several extension services and to facilitate higher milk
facilitate farmers to enhance their incomes. production. Qualified teams comprising veterinarians
This programme is founded on a 360-degree, and para-veterinarians have been deployed to
multipronged approach with interventions such as facilitate animal breeding, animal nutrition and animal
increased cropping intensity with a third crop during health services towards improving productivity and
summer, enhancement of productivity through promoting commercial dairy farming among farmers.
context-specific agronomic practices demonstrated During the year, about 84,400 cattle of over 48,000 dairy
through Choupal Pradarshan Khets (on-farm farmers across 507 villages in 8 districts of Bihar and
demonstrations) and provision of market linkages with 2 districts of West Bengal were supported through
transparency in assessment of quality, price and training programmes on clean milk production,
weighment. In some regions, taking a holistic mastitis control and animal husbandry services like
approach to income diversification as an adjacency, deworming, ectoparasite control, etc.

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Women Empowerment Cabinets and Water and Sanitation (WATSAN)

Committees were operational in various schools
During the year, this initiative provided a range of
during the year with active involvement of students
gainful employment opportunities to around
and teachers.
6,200 poor women, taking the cumulative coverage to
over 86,000 women, supported with capacity building Skilling & Vocational Training
and provided financial assistance by way of loans and
grants. This includes more than 30,500 ultra-poor This programme provides training in market linked
skills to youth to enable them to compete in the job
women in your Company’s core catchments who
market. More than 13,300 youth were enrolled under
now have access to sustainable sources of income
different courses during the year of which 46% were
through various livelihood opportunities. The financial
female and 32% belonged to the SC/ST communities.
literacy and inclusion project, in partnership with
Cumulatively, over 1 lakh youth have been enrolled
Madhya Pradesh State Rural Livelihood Mission
under this programme. The programme is operational
(MPSRLM) and CRISIL Foundation, was operational
in 33 districts of 17 states. Further, the pandemic led
in 43 districts during the year. 568 Super Trainers
to increased enrolment in bedside assistance courses
were trained directly who in turn trained 678 Master
with over 1,700 youth trained during the year.
Trainers; the training was thereafter cascaded to over
Overall, nearly 76% of the trained youth have found
56,000 self-help-groups (SHGs) covering more than
job placements during the year.
5.4 lakh women during the year. The programme has
cumulatively covered over 1.3 lakh SHGs benefiting Sanitation
over 13 lakh women across 15,600 villages. Over
Your Company continues to adopt a multi-pronged
4 lakh trained women have been provided access
approach towards improving public health and hygiene
to bank accounts and government social security
across 26 districts and 12 states. To promote
schemes. As a result, enrolments of women witnessed
a hygienic environment through prevention of
significant increase against the project baseline.
open defecation and reduced incidence of
Education water-borne diseases, 1,200 Individual Household
Toilets (IHHTs) were constructed in Bihar and
The Primary Education programme aims to provide Tamil Nadu in collaboration with the respective
children from weaker sections of society in your State Governments/District sanitation departments,
Company’s factory catchments access to education taking the total to over 39,400 IHHTs constructed
with focus on learning outcomes and retention. so far in your Company’s catchment areas. In addition,
Operational in 28 districts of 13 states, the programme 18 community toilets were constructed/renovated
covered over 55,000 children during the year, taking in West Bengal and Tamil Nadu in the year for
the cumulative coverage to over 8.6 lakh children. households without land, taking the cumulative to 122.
Over 400 government primary schools and Cumulatively, IHHTs and community toilets are
anganwadis were provided infrastructure support estimated to be benefiting over 1 lakh community
comprising boundary walls, additional classrooms, members. Along with sanitation infrastructure
sanitation units and furniture, taking the total number development, special focus was also given to
of government primary schools and anganwadis awareness campaigns to create demand and drive
covered till date to around 2,500. Infrastructure behavioural change.
support to government schools has helped in
increasing enrolment, particularly of girls, in schools. Health & Nutrition
To ensure sustainable operations and maintenance Your Company continued to enhance awareness on
of infrastructure provided, more than 1,290 School various health related issues through a network of
Management Committees and around 750 Child 430 women Village Health Champions (VHCs) who

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covered nearly 1.1 lakh women and adolescent established in FY 2021-22 taking the total operational
girls during the year. The programme is operational RO plants to 151, thus providing safe drinking water
in seven districts of Uttar Pradesh and three districts to over 2 lakh rural people.
of Madhya Pradesh. As the group activities remained Your Company’s ‘Swasth India Mission’ programme
restricted due to the pandemic, the VHCs conducted has been a front runner in driving behavioural change
door-to-door visits in the villages focusing on aspects towards good hand hygiene habits since its inception
like sanitation, menstrual and personal hygiene, in 2016. The ‘Swasth India Mission’ drove a range
family planning, diarrhoea prevention and nutrition. of initiatives to aid and enable the country in its fight
Over 4.8 lakh beneficiaries were covered under the against COVID:
Mother and Child Health initiative aimed at improving – The Doctor’s Connect Program (DCP) reached a
the health-nutrition status of women, adolescents and total of 1.1 lakh doctors across nearly 3,000 hospitals.
children in the catchments of a few of your Company’s
– To encourage and instil mask etiquette and
factories with high maternal and infant mortality indices.
compliance and spread awareness on choosing
As per internal estimates, the proportion of underweight
the right type of mask, your Company launched
children between 0-5 years of age in select project
a print campaign as well as vignettes with news
locations of two districts stood at 2.6% and 5.0%
anchors.
in 2021-22, significantly lower than district averages5
of 19.7% and 33.1% respectively. – Your Company also launched a print campaign
‘Do it for Kids’, to spread awareness on power of
To bridge gaps in primary and secondary healthcare
simple hygiene habits and encouraging children
delivery and to address the challenges of awareness,
to follow the same. To spread awareness on how
availability, accessibility and affordability, your
to take precautions in day-to-day situations,
Company has undertaken several Rural Healthcare
your Company launched ‘Beat the Second Wave’
interventions, which will be implemented in a
series in pictorial format in both English and
phased manner. After launching the Mother and
regional languages.
Child Health initiative in FY 2016-17, your Company
is now adopting a holistic approach focusing on – To seed positive attitude towards hygiene, your
two major components - preventive health care and Company launched the ‘Hygiene Sahi toh Health
curative services. The objective of the initiative is Sahi’ series in partnership with Times Network.
to improve health and nutrition by strengthening – Your Company also commissioned a nationwide
institutional capacity, supplementing existing study on current hygiene trends in collaboration
infrastructure, promoting greater convergence with with ‘YouGov’, one of the world’s leading
existing government schemes, leveraging technology full-service market research companies, which
and increasing access to basic primary and secondary assessed usage, perception and behavior towards
healthcare services. As part of this project, mobile hygiene practices focusing on hand hygiene,
medical units are in the process of being deployed surface disinfection and mask etiquettes.
at Saharanpur and Munger. Simultaneously, plans This study aims to provide a roadmap to improve
have been initiated to set up a 50-bed hospital for the understanding of health & hygiene practices
secondary care at Munger. and simultaneously work towards building a
healthier society and nation.
To make potable water available to local communities
in Andhra Pradesh, Reverse Osmosis (RO) water Solid Waste Management
purification plants were set up in villages where the
water quality was poor. 24 new RO plants were Your Company’s initiatives focus on creating
replicable, scalable and sustainable models of
5 as per NFHS-5 data of 2019-20 municipal solid waste management that can be

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implemented across the country to ensure that zero solutions to some of India’s most challenging
waste goes to landfills. Details of these models are problems of development in the years to come.
provided in the ’Building a Circular Economy for
Post-Consumer Packaging’ section above. CSR Expenditure
The annual report on Corporate Social Responsibility
ITC Sangeet Research Academy activities, as required under Sections 134 and 135
The ITC Sangeet Research Academy (ITC SRA), of the Companies Act, 2013 read with Rule 8 of the
established in 1977, is an embodiment of Companies (Corporate Social Responsibility Policy)
your Company’s sustained commitment to a priceless Rules, 2014 and Rule 9 of the Companies (Accounts)
national heritage. Your Company’s pledge towards Rules, 2014, is provided in the Annexure forming part
ensuring enduring excellence in Classical Music of this Report.
education continues to drive ITC SRA in furthering
Environment, Health & Safety
its objective of preserving and propagating
Hindustani Classical Music based on the age-old Your Company’s Environment, Health & Safety (EHS)
principle of ‘Guru-Shishya Parampara’. The eminent strategies are directed towards achieving the greenest
Gurus of the Academy impart intensive training and and safest operations across all your Company’s units
quality education in Hindustani classical music to by optimising natural resource usage and providing a
the scholars. The present Gurus of the Academy safe and healthy workplace. Systemic efforts continue
are Padma Bhushan Pt. Ajoy Chakrabarty, to be made towards natural resource conservation by
Padma Shri Pt. Ulhas Kashalkar, Pt. Partha Chatterjee, continuously improving resource-use efficiencies.
Pt. Uday Bhawalkar, Vidushi Subhra Guha and Your Company believes that a safe and healthy
Shri Omkar Dadarkar. The Academy’s focus continues work environment is a pre-requisite for ensuring
to be on nurturing exceptionally gifted students employee well-being, and adopting best practices in
selected from across the country through a system occupational health & safety bears a direct impact on
of multi-level audition. Full scholarship is provided overall performance. With an aim to percolate safety
to them to reside and pursue music education in the deeper into ITC’s operational practices and achieve
Academy’s campus and in other designated the ‘Zero Accident’ goal, your Company has adopted
locations under the tutelage of the country’s most a comprehensive EHS strategy founded on two pillars:
distinguished musicians. Creation of the next ‘Safety by Design’ and ‘Safety by Culture’.
generation of masters of Hindustani classical music
for the propagation of a precious legacy continues Safety
to be the Academy’s objective. Your Company follows ‘Safety by Design’
by continuously striving to improve on safety
Forging Partnerships with NGOs performance by incorporating best-in-class
The meaningful contribution made by your Company’s engineering standards for all investments in the built
Social Investments Programme to address some environment. During the year, following the principle
of the country’s key development challenges, of continuous improvement, technical guidelines were
has been possible in significant measure, due to contemporised in line with the recent technological
your Company’s partnerships with globally renowned advances and changes in code. In addition, periodic
NGOs such as BAIF, DSC, FES, DHAN Foundation, Environment, Health & Safety audits were carried out
MYRADA, Pratham, SEWA Bharat, WASH Institute to verify compliance with standards.
and Water for People, Youth Invest, amongst others. Additionally, your Company is implementing
These partnerships, which bring together the digitisation of the EHS management system at
best-in-class management practices of your Company an enterprise level. This upgradation will enable
and the development experience and mobilisation skills seamless integration of Safety with operations,
of NGOs, will continue to provide innovative grassroots optimising overall efforts.

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To drive a culture of safety, your Company is making quality of insights and long-term competitiveness for
use of tools such as a structured conversation each Business.
with workers on ‘Safe and Unsafe’ Acts which was
LSTC is equipped with world-class scientific
supplemented by adoption of keystone behaviours
infrastructure and state-of-the-art facilities to create
that inculcates individual ownership for safe behaviour. deep knowledge base and build intellectual property
Your Company has also pioneered the usage of for your Company through research, rapid prototyping
Design Thinking principles for seamless integration of and process development. Over 900 patents have
safety in business operations. This initiative is bringing been filed till date, bearing testimony to LSTC’s
in positive behavioural changes. innovation capabilities. Your Company was ranked
Several national awards and certifications received by ‘Top Innovator’ in India amongst Indian Pharma and
various units reaffirm your Company’s commitment to Healthcare Private Companies (Source: Sagacious
provide safe and healthy workplace to all. IP Report August 2021). Centres of Excellence in
Biosciences, Agri-sciences & Materials sciences, and
COVID Response: Health & Safety future-ready platforms such as Beauty & Hygiene,
Heath & Wellness, Agro-forestry, Crop Sciences,
During the year, disruptions caused by the pandemic
Consumer & Sensory Sciences and Sustainable
were effectively managed through collective and
Materials & Packaging continue to drive world-class
concerted efforts, leveraging the learnings from the
innovation. Rigorous systems, processes and industry
first wave. To control workplace COVID transmission,
best practices have enabled securing global quality
your Company followed best practices on air
certifications - a key enabler in delivering products
management in indoor spaces while also complying
that follow the highest standards in quality, safety and
with masking and sanitation protocols. Periodic
efficacy to the Indian consumers.
inspections across business locations were conducted
to ensure compliance with laid down protocols, In line with your Company’s relentless focus on
thereby ensuring business continuity. operational excellence and quality, each Business
is mandated to continuously innovate on materials,
R&D, QUALITY AND PRODUCT DEVELOPMENT training, processes and systems to enhance their
Your Company’s state-of-the-art ITC Life Sciences competitiveness. LSTC actively collaborates with
and Technology Centre (LSTC) in Bengaluru is at and supports the Businesses to drive their innovation
agenda and accelerate growth. Your Company
the core of driving science-led product innovation
has been a forerunner in introducing first-to-market
to support and build your Company’s portfolio of
innovative products for Indian consumers. In the
world-class products and brands. The LSTC team
context of recurrent COVID waves, LSTC researchers
comprising over 350 highly qualified scientists has a
and product development teams continue to enable
mandate to work on future-ready science platforms,
the Branded Packaged Foods and Personal Care
design differentiated products to address unique
Businesses to deliver a range of differentiated and
consumer needs and deliver superior benefits.
superior quality products. Innovative science-based
LSTC harnesses contemporary advances in relevant programmes continue to be leveraged to drive
core areas of science and technology to continuously systematic reduction in salt, sugar and fat from
translate ‘proofs of concept’ to novel product packaged food products recipes without compromising
opportunities. R&D teams seamlessly integrate on sensory attributes. Leading edge technology
classical concepts of product development backed platforms in Hygiene, Health & Wellness continue to
by purposeful innovation to bring exciting offerings power innovation and develop next generation product
to consumers with speed and agility. LSTC is at the offerings to serve emergent consumer needs. LSTC’s
forefront of executing robust R&D strategies and unique competencies in Materials and Packaging
plans that embed sustainability and digitalisation have enabled innovative recyclable flexible packaging
to enable rapid go-to-market timelines, enhanced and bio-compostable coating solutions in line with

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your Company’s environmental sustainability agenda. the dynamic business environment and strengthening
New synergistic value chains in health, nutrition and the service excellence framework have been the
sensory sciences have been created to propel growth key strategies of the Hotels Business amidst
going forward. pandemic-induced disruptions.
In Agro Forestry and Crop Science Platforms, LSTC All branded packaged foods manufacturing
has an ambitious R&D programme on improving units of your Company not only have ISO quality
yield and quality, given the shrinking plantation certification but also follow the stringent standards
acreage in the country. Ongoing research on climate under the integrated food quality management
resilient crops and pulp wood seeks to address system-FSSC 22000; these systems ensure
the security of raw material supplies across your adherence to internationally accepted quality
Company’s value chains. Research on wheat and standards in producing safe and high-quality food.
potato varietal securitisation are at advanced stages All manufacturing units of the Branded Packaged
of development to achieve flexibility in sourcing
Foods Businesses (including contract manufacturing
of raw material, create region-specific blends and
units) and Hotels operate in compliance with stringent
ensure robust agro-climatic adaptability. Future-ready,
food safety and quality standards. Your Company’s
alternate value chains that mitigate risks arising
food quality assurance laboratories are also
out of disruptions to existing models continue to be
accredited under ISO 17025, a global standard for
explored. LSTC, in collaboration with the Agri and
testing and calibrating labs, which guarantees quality
Branded Packaged Foods Businesses, endeavours
of every analysis. Additionally, the quality of all FMCG
to ensure that contemporary science-based outcomes
ingredients and finished products of your Company
are fully integrated across the value chain from
is monitored through best-in-class customer-centric
farm to fork. Scientific platforms in Agro forestry
‘Quality Control and Quality Assurance Processes’
have led to pioneering work in development of new
clones in tandem with Paperboards & Specialty and ‘Product Quality Ratings Systems’ (PQRS)
Papers Business to enhance wood productivity enhancing competitive superiority of your Company’s
and pulp quality for sustainable raw materials and product offerings.
farmer profitability. As a future-ready innovation engine, LSTC is
The Paperboards, Paper and Packaging Businesses developing and deploying advanced tools for quality
continue to pursue ‘Total Productive Maintenance’ (TPM) performance analytics and competition benchmarking
programmes with focus on customer delivered quality. leveraging Artificial Intelligence and Machine Learning
The Paperboards & Specialty Papers Business has technologies. Robust risk management practices are
also set up a state-of-the-art Next Generation Smart in place to ensure that your Company’s intellectual
and Hyperscale Digital and Data Infrastructure at its properties remain adequately protected at all times.
plants, to enable real time operations control, process Going forward, your Company will continue to
optimisation and quality improvements. Consistent identify opportunities to address emerging trends
quality enables customers of your Company in by leveraging R&D insights based on contemporary
improving their operating efficiencies through reduced sciences and your Company’s diverse core
wastages and lower machine down-times. competencies.
During the year, your Company’s Hotels Business
PROCEEDINGS INITIATED BY THE
leveraged technology to enhance business process
ENFORCEMENT DIRECTORATE
efficiencies and outcomes. The Hotels Business
continues to heighten its commitment towards In the proceedings initiated by the Enforcement
prioritising the safety and security of guests Directorate in 1997, the appropriate authority after
through the award winning ‘WeAssure’ programme. hearing arguments on behalf of your Company
Building agile operating systems that adapt quickly to has passed orders in favour of your Company and

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dropped some of the show cause notices issued by credit worthiness, including engagement with market
the Directorate. In respect of some of the remaining participants, ensured that the investment portfolio
notices, your Company filed writ petitions challenging was not exposed to undue credit risks.
their validity. The Honourable Calcutta High Court, As in earlier years, commensurate with the size of
by its orders, allowed these writ petitions, and the the temporary surplus liquidity under management,
proceedings in respect of these notices were quashed. treasury operations continue to be supported
The remaining notices are pending. by appropriate control mechanisms, including
Meanwhile, some of the prosecutions launched by independent check of 100% of transactions by
the Enforcement Directorate have been quashed your Company’s Internal Audit Department.
by the Honourable Calcutta High Court while others In the currency market, the Indian Rupee (INR)
are pending. depreciated against the US Dollar (USD) during the
year. The weakness was attributed to strength of the
TREASURY OPERATIONS USD relative to all major currencies during the year.
Your Company’s treasury operations continued While the USD initially gained on the back of the US
Federal Reserve tightening monetary conditions, rise in
to focus on deployment of surplus liquidity and
geo-political tensions in Europe towards the end of
management of foreign exchange exposures within a
the financial year triggered risk-off sentiment amongst
well-defined risk management framework.
global investors, aiding safe haven currencies such as
Market interest rates witnessed an upward trajectory the USD. Lower capital inflows and a higher than
during the year as the Reserve Bank of India anticipated Current Account Deficit also weighed
(RBI) commenced the process of Monetary Policy on the INR. On the other hand, comfortable foreign
normalisation by way of gradual withdrawal of liquidity exchange reserves and judicious interventions in the
infused into the Banking system during the pandemic. forex market by RBI provided support to the INR.
Globally, inflation remained persistently high during To effectively navigate the high volatility in currency
the year due to elevated commodity prices and supply markets, your Company adopted a proactive
chain disruptions, forcing central banks across most risk management strategy and actively managed
countries to pivot from supporting growth to combating foreign currency exposures through appropriate
inflation. While the RBI continued to advocate hedging strategies and market instruments to protect
continuation of accommodative Monetary Policy business margins.
stance to support the incipient recovery in domestic
economic activity, markets started to cognise for a DEPOSITS
faster pace of normalisation by the RBI, in line with Your Company’s erstwhile Public Deposit Scheme
global peers. In addition, higher than expected market closed in the year 2000. As at 31st March, 2022,
borrowings budgeted by the Central Government for there were no deposits due for repayment except
FY 2022-23 and spiraling commodity prices due to in respect of two deposit holders aggregating
geo-political tensions in Europe towards the end of the ` 20000 which have been withheld on the basis of
year dented market sentiments and pushed market directives received from the government agencies.
interest rates higher. There was no failure to make repayments of
Investment decisions relating to deployment of Fixed Deposits on maturity and the interest due
surplus liquidity continued to be guided by the tenets thereon in terms of the conditions of your Company’s
of Safety, Liquidity and Return. Treasury operations erstwhile Schemes.
focused on proactive rebalancing of portfolio Your Company has not accepted any deposit
duration and mix in line with the evolving interest from the public/members under Section 73 of the
rate environment. Further, your Company’s ongoing Companies Act, 2013 read with the Companies
practice of continuous review and monitoring of (Acceptance of Deposits) Rules, 2014 during the year.

ITC Limited REPORT AND ACCOUNTS 2022 115

Report of the Board of Directors

DIRECTORS Articles 94 and 95 of the Articles of Association of

your Company, Messrs. David Robert Simpson and
Changes in Directors
Nakul Anand will retire by rotation at the ensuing AGM
During the year, Mr. Shyamal Mukherjee and and being eligible, offer themselves for re-election.
Mr. Hemant Bhargava, who have the required The Board has recommended their re-election.
integrity, expertise and experience, were appointed,
with your approval, as Directors and also as Number of Board Meetings
Independent Directors of your Company for a period
Six meetings of the Board were held during the year
of five years with effect from 11th August, 2021 and
ended 31st March, 2022.
20th December, 2021, respectively.
Messrs. Mukesh Gupta, representing the Life Attributes, Qualifications & Independence of
Insurance Corporation of India (‘LIC’), Navneet Doda, Directors and their Appointment
representing the General Insurers’ (Public Sector) The Corporate Governance Policy of your Company,
Association of India (‘GIPSA’), and Sunil Panray, inter alia, requires that the Non-Executive Directors
representing the Tobacco Manufacturers (India) Limited be drawn from amongst eminent professionals,
(a subsidiary of British American Tobacco p.l.c.), with experience in business/finance/law/public
were also appointed, with your approval, administration and enterprises. The Nomination &
as Non-Executive Directors of your Company for a Compensation Committee has laid down the criteria
period of three years with effect from 20th December, for determining qualifications, positive attributes and
2021. Mr. Sumant Bhargavan was re-appointed, independence of Directors (including Independent
with your approval, as a Director and also as a Directors). The Board Diversity Policy of your Company
Wholetime Director of your Company for a period of requires the Board to have balance of skills,
three years with effect from 12th July, 2022. experience and diversity of perspectives appropriate
The Board of Directors of your Company (‘the Board’) to your Company. The skills, expertise and
has recommended for the approval of the Members, competencies of the Directors as identified by the
appointment of Mr. Supratim Dutta as a Director, liable Board, along with those available in the present mix
to retire by rotation, and also as a Wholetime Director of the Directors of your Company, are provided in the
of your Company, for a period of three years with ‘Report on Corporate Governance’ forming part of the
effect from 22nd July, 2022. Appropriate resolution Report and Accounts.
seeking your approval to the above is appearing in the In terms of the applicable regulatory requirements
Notice convening the 111th Annual General Meeting read with the Articles of Association of your Company,
(‘AGM’) of your Company. the strength of the Board shall not be fewer
Mr. Atul Jerath, representing GIPSA, and than six nor more than eighteen. Directors are
Mr. Hemant Bhargava, representing LIC, stepped down appointed/re-appointed with the approval of the
from the Board with effect from 1st May, 2021 and Members for a period of three to five years or a shorter
23rd August, 2021, respectively. Mr. Sunil Behari Mathur duration, in accordance with retirement guidelines
ceased to be a Director of your Company with effect and as may be determined by the Board from time to
from 15th September, 2021, on completion of his term time. All Directors, other than Independent Directors,
as an Independent Director. Your Directors place on are liable to retire by rotation, unless otherwise
record their appreciation for the services rendered by approved by the Members. One-third of the Directors
Messrs. Jerath, Bhargava and Mathur. who are liable to retire by rotation, retire every year
and are eligible for re-election.
Retirement by Rotation
The Independent Directors of your Company
In accordance with the provisions of Section 152 of have confirmed that (a) they meet the criteria of
the Companies Act, 2013 (‘the Act’) read with independence prescribed under Section 149 of the Act

116 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

and Regulation 16 of the Securities and Exchange meet challenges arising from the operating & policy
Board of India (Listing Obligations and Disclosure environment in the country. Evaluation of functioning
Requirements) Regulations, 2015 (‘Listing Regulations’), of Board Committees is based on discussions
(b) they are independent from the management of amongst Committee members and shared by the
your Company, and (c) they are not aware of any respective Committee Chairmen with the Board.
circumstance or situation which could impair or impact Individual Directors are evaluated in the context of
their ability to discharge duties with an objective the role played by each Director as a member of
independent judgement and without any external the Board at its meetings, in assisting the Board
influence. In the opinion of the Board, the Independent in realising its role of strategic supervision of the
Directors fulfil the conditions prescribed under the Act functioning of your Company in pursuit of its purpose
and the Listing Regulations, and are independent of and goals. The peer group ratings of the individual
the management of your Company. Directors are collated by the Chairman of the
Nomination & Compensation Committee and made
Remuneration Policy available to the Chairman of your Company.
Details of your Company’s Policy on remuneration While the Board evaluated its performance against
of Directors, Key Managerial Personnel and other the parameters laid down by the Nomination &
employees are provided in the ‘Report on Corporate Compensation Committee, the evaluation of
Governance’ forming part of the Report and Accounts. individual Directors was carried out against the
laid down parameters anonymously in order to
Board Evaluation
ensure objectivity. Reports on functioning of
The Nomination & Compensation Committee, as Committees were placed before the Board.
reported in earlier years, formulated the Policy on The Independent Directors Committee of the
Board evaluation, evaluation of Board Committees’ Board also reviewed the performance of the
functioning and individual Director evaluation, Chairman, other non-Independent Directors and
and also specified that such evaluation will be done the Board, pursuant to Schedule IV to the Act
by the Board. and Regulation 25 of the Listing Regulations.

In keeping with ITC’s belief that it is the collective KEY MANAGERIAL PERSONNEL
effectiveness of the Board that impacts Company’s
performance, the primary evaluation platform is There were no changes in the Key Managerial
that of collective performance of the Board Personnel of your Company.
as a whole. Board performance is assessed, inter alia,
AUDIT COMMITTEE & AUDITORS
against the roles and responsibilities of the Board as
provided in the Act, the Listing Regulations and The composition of the Audit Committee is provided
your Company’s Governance Policy. The parameters under the section ‘Board of Directors and Committees’
for Board performance evaluation have been derived in the Report and Accounts.
from the Board’s core role of trusteeship to protect
Statutory Auditors
and enhance shareholder value as well as to fulfil
expectations of other stakeholders through strategic Messrs. S R B C & CO LLP, Chartered Accountants
supervision of your Company; such parameters (‘SRBC’), were appointed with your approval as the
include securing alignment of your Company’s goals Auditors of your Company for a period of five years
with the nation’s economic, ecological and social till the conclusion of the 113th AGM. The Board,
priorities, ensuring that your Company has a clearly on the recommendation of the Audit Committee,
defined strategic direction for realisation of its vision, has recommended for the approval of the
and supporting your Company’s management to Members, the remuneration of SRBC for the

ITC Limited REPORT AND ACCOUNTS 2022 117

Report of the Board of Directors

financial year 2022-23. Appropriate resolution CHANGES IN SHARE CAPITAL

seeking your approval to the remuneration of
During the year, 1,44,11,700 Ordinary Shares of
SRBC is appearing in the Notice convening the
` 1/- each, fully paid-up, were issued and allotted upon
111th AGM of your Company.
exercise of 14,41,170 Options under your Company’s
Employee Stock Option Schemes. Consequently,
Cost Auditors
the Issued and Subscribed Share Capital of
Your Board, as recommended by the Audit your Company, as on 31st March, 2022, stands
Committee, appointed the following Cost Auditors for increased to ` 1232,32,55,931/- divided into
the financial year 2022-23: 1232,32,55,931 Ordinary Shares of ` 1/- each.
(i) Messrs. ABK & Associates, Cost Accountants, The Ordinary Shares issued during the year rank
for audit of Cost Records maintained by pari passu with the existing Ordinary Shares
your Company in respect of ‘Wood Pulp’ and of your Company.
‘Paper and Paperboard’ products.
EMPLOYEE STOCK OPTION SCHEMES
(ii) Messrs. S. Mahadevan & Co., Cost Accountants,
for audit of Cost Records maintained in respect of Disclosures with respect to Stock Options, as required
all applicable products of your Company, under Regulation 14 of the Securities and Exchange
other than ‘Wood Pulp’ and ‘Paper and Board of India (Share Based Employee Benefits and
Paperboard’ products. Sweat Equity) Regulations, 2021 (‘the Regulations’),
are available in the Notes to the Financial Statements
Pursuant to Section 148 of the Act read with of the Company. The said disclosures forming part of the
the Companies (Audit and Auditors) Rules, 2014, Financial Statements can also be accessed on your
appropriate resolutions seeking your ratification to
Company’s corporate website http://www.itcportal.com
the remuneration of the aforesaid Cost Auditors are
under the section ‘Investor Relations’. During the year,
appearing in the Notice convening the 111th AGM
there has not been any material change in your
of your Company.
Company’s Employee Stock Option Schemes.
Your Company maintains necessary cost records
Your Company’s Secretarial Auditors,
as specified by the Central Government under
Messrs. Vinod Kothari & Company, Practising
Section 148(1) of the Act read with the Companies
Company Secretaries, have certified that the
(Cost Records and Audit) Rules, 2014.
Employee Stock Option Schemes of your Company
have been implemented in accordance with
Secretarial Auditors
the Regulations and the resolutions passed by the
Messrs. Vinod Kothari & Company, Practising Members in this regard.
Company Secretaries, were appointed by the Board
as the Secretarial Auditors of your Company INVESTOR SERVICE CENTRE
for the financial year ended 31st March, 2022.
The Investor Service Centre of your Company
The Secretarial Auditors have confirmed that
(‘ISC’), accredited with ISO 9001:2015 certification,
your Company has complied with the applicable laws
is registered with the Securities and Exchange Board
and that there are adequate systems and processes
of India as Category II Share Transfer Agent for
in your Company commensurate with its size and
providing in-house share registration and related
scale of operations to monitor and ensure compliance
services. ISC continues to focus on maintaining
with the applicable laws.
exemplary standards of investor servicing and
The Report of the Secretarial Auditors pursuant to providing best-in-class services to the shareholders
Section 204 of the Act, is provided in the Annexure and investors, while ensuring compliance with the
forming part of this Report. applicable statutory requirements.

118 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

The ‘Investor Relations’ section on your Company’s controls were adequate and were operating
corporate website http://www.itcportal.com serves effectively; and
as a user-friendly reference for the shareholders and
f) devised proper systems to ensure compliance with
investors in respect of share related matters.
the provisions of all applicable laws and that such
systems were adequate and operating effectively.
RELATED PARTY TRANSACTIONS

All contracts or arrangements entered into by CONSOLIDATED FINANCIAL STATEMENTS

your Company with its related parties during the Your Company’s Board of Directors is responsible
financial year were in accordance with the provisions of for the preparation of the consolidated financial
the Companies Act, 2013 and the Listing Regulations. statements of your Company and its Subsidiaries
All such contracts or arrangements, which were (‘the Group’), Associates and Joint Venture entities,
approved by the Audit Committee, were in the in terms of the requirements of the Companies Act,
ordinary course of business and on arm’s length basis. 2013 (the Act) and in accordance with the accounting
No material contracts or arrangements with principles generally accepted in India, including the
related parties were entered into during the year Indian Accounting Standards specified under Section
under review. Accordingly, the disclosure of 133 of the Act.
Related Party Transactions as required in terms of
The respective Boards of Directors of the companies
Section 134 of the Act read with Rule 8 of the
included in the Group and of its associates and joint
Companies (Accounts) Rules, 2014 in Form AOC -2
venture entities are responsible for maintenance of
is not applicable for this year.
adequate accounting records in accordance with the
DIRECTORS’ RESPONSIBILITY STATEMENT provisions of the Act for safeguarding the assets of
each company and for preventing and detecting
As required under Section 134 of the Companies Act, frauds and other irregularities; the selection and
2013, your Directors confirm having: application of appropriate accounting policies;
a) followed in the preparation of the Annual Accounts, making judgements and estimates that are reasonable
the applicable accounting standards with proper and prudent; and the design, implementation and
explanation relating to material departures, if any; maintenance of adequate internal financial controls,
that were operating effectively for ensuring the
b) selected such accounting policies and applied
accuracy and completeness of the accounting records,
them consistently and made judgements and
relevant to the preparation and presentation of the
estimates that are reasonable and prudent so as
financial statements that give a true and fair view
to give a true and fair view of the state of affairs of
and are free from material misstatement, whether
your Company at the end of the financial year and
due to fraud or error. Such financial statements have
of the profit of your Company for that period;
been used for the purpose of preparation of the
c) taken proper and sufficient care for the consolidated financial statements by the Directors of
maintenance of adequate accounting records your Company, as aforestated.
in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets OTHER INFORMATION
of your Company and for preventing and detecting
Compliance with the conditions of
fraud and other irregularities;
Corporate Governance
d) prepared the Annual Accounts on a going
The certificate from your Company’s Statutory Auditors,
concern basis;
Messrs. S R B C & CO LLP, confirming compliance
e) laid down internal financial controls to be followed with the conditions of Corporate Governance as
by your Company and that such internal financial stipulated under the Listing Regulations, is annexed.

ITC Limited REPORT AND ACCOUNTS 2022 119

Report of the Board of Directors

Going Concern status Dividend Distribution Policy

There is no significant or material order passed Your Company’s Dividend Distribution Policy,
during the year by any regulator, court or tribunal approved by the Board on 18th March, 2020,
impacting the going concern status of your Company may be accessed on its corporate website
or its future operations. at https://www.itcportal.com/about-itc/policies/dividend-
distribution-policy.pdf .
Annual Return
The Annual Return of your Company is Key Financial Ratios
available on its corporate website at Key Financial Ratios for the financial year ended
https://www.itcportal.com/investor/disclosures-under- 31st March, 2022, are provided in the Annexure
SEBI.aspx . forming part of this Report.

Particulars of loans, guarantees or investments FORWARD-LOOKING STATEMENTS

Details of Loans, Guarantees or Investments covered This Report contains forward-looking statements that
under the provisions of Section 186 of the Companies involve risks and uncertainties. When used in this
Act, 2013 are provided in Notes 4, 5 and 9 to the Report, the words ‘anticipate’, ‘believe’, ‘estimate’,
Financial Statements, as applicable. ‘expect’, ‘intend’, ‘will’ and other similar expressions as
they relate to your Company and/or its Businesses are
Particulars relating to Conservation of Energy and
intended to identify such forward-looking statements.
Technology Absorption
Your Company undertakes no obligation to publicly
Particulars as required under Section 134 of the update or revise any forward-looking statements,
Companies Act, 2013 relating to Conservation of whether as a result of new information, future
Energy and Technology Absorption are also provided events, or otherwise. Actual results, performances
in the Annexure to this Report. or achievements could differ materially from those
expressed or implied in such forward-looking
Compliance with Secretarial Standards
statements. Readers are cautioned not to place
Your Company is in compliance with the applicable undue reliance on these forward-looking statements
Secretarial Standards issued by the Institute of that speak only as of their dates. This Report should
Company Secretaries of India and approved by the be read in conjunction with the financial statements
Central Government under Section 118(10) of the Act. included herein and the notes thereto.

Employees CONCLUSION
The total number of employees as on 31st March, 2022, Your Company’s ‘Triple Bottom Line’ philosophy has
stood at 23,829. over the years spurred the creation of innovative
There were 220 employees, who were employed business models that synergise the building of
throughout the year and were in receipt of economic, environmental and social capital. It is
remuneration aggregating ` 102 lakhs or more or now universally evident that enterprises of the future
were employed for part of the year and were in receipt will not only have to be agile, consumer-centric,
of remuneration aggregating ` 8.5 lakhs per month innovative and digital-first but also purpose-driven
or more during the financial year ended 31st March, and responsibly competitive. With Digital and
2022. The information required under Section 197(12) Sustainability as the bedrock of your Company’s
of the Companies Act, 2013 and the Companies corporate strategy, the superordinate goal of serving
(Appointment and Remuneration of Managerial larger national priorities and creating value for all
Personnel) Rules, 2014 is provided in the Annexure stakeholders has evolved into a new paradigm -
forming part of this Report. ‘Responsible Capitalism’ - an abiding strategy that

120 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

focuses on extreme competitiveness but in a manner business portfolio a few years ago, your Company
that replenishes the environment and supports has restructured the Lifestyle Retailing Business
sustainable livelihoods. during the year. At the same time, the product
portfolio has been strengthened in alignment with
The strategic Vision of creating multiple drivers of
new opportunities and enterprise strengths with
growth through the pursuit of market opportunities
sharper focus on fortifying the core, addressing
that best match institutional strengths, has resulted
adjacencies through world-class mother brands
in the development of strong Businesses of the
and building categories of the future to power growth.
future as well as a portfolio of winning world-class
To accentuate consumer-centricity, agility and enable
brands and future-ready products. Today, your
sharper focus in the context of the growing scale and
Company is the leading FMCG marketer in India, a
complexity of operations, the Branded Packaged
pre-eminent hotel chain and a globally acclaimed
Foods Businesses have been reorganised into market
icon in green hoteliering, the clear market leader
centric clusters with integrated and empowered teams.
in the Indian Paperboards and Packaging industry,
Focused interventions made in the recent past have
a pioneering trailblazer in farmer and rural
also augmented your Company’s multi-channel
empowerment through its Agri Business and a global
go-to-market capability, resulting in manifold
exemplar in sustainable business practices. In the
expansion in the reach and availability of its products.
last two decades, your Company’s non-cigarettes
Over the last five years, market and outlet coverage
businesses have grown over 27-fold and presently
have grown 4x and 1.6x respectively while the network
constitute over two-thirds of Net Segment Revenue.
of stockists has expanded to 6.4x during the same
At the heart of this transformation lies the power of
period. Sharp-focused investments have augmented
synergy, with seamless access for your Company’s
capability in emerging channels such as e-Commerce
new Businesses/initiatives to the deep and varied
and Modern Trade, resulting in strong growth in sales
capabilities resident across different parts of the
and enhanced market standing; a new vertical has
enterprise, and its world-class talent pool.
also been developed to address the fast-growing
An extensive strategy reset has been undertaken in Food Service segment. In addition, investments
recent years to architect the structural drivers that will towards accelerating agile and purposeful innovation
power ITC’s next horizon of growth and ensure that with platform centricity, optimising supply chain
the enterprise remains future-ready, consumer-centric efficiencies, digitisation and strategic partnerships
and nimble. Each of your Company’s businesses has have significantly enhanced competitiveness.
pivoted to create new frontiers for the future, with The impact of these multi-dimensional interventions
enhanced competitiveness as well as sharper focus is evident in the substantial margin expansion of
on cost management to strengthen leadership or 650 bps in Segment EBITDA over the last five years
rapidly enhance market standing in the case of newer even in the face of significant inflationary headwinds
segments. As a core element of the ITC Next strategy, witnessed during the year.
your Company will continue to explore opportunities
The Businesses will continue to leverage your
to craft disruptive business models anchored at the
Company’s institutional strengths as a key source
intersection of Digital and Sustainability, the two
of sustainable competitive advantage viz. strong
defining trends in the ‘new normal’, leveraging its
backward linkages with the Agri Business, a deep &
institutional strengths.
wide multi-channel distribution network, cuisine
In recent years, the FMCG Businesses have delivered knowledge resident in the Hotels Business, packaging
strong revenue growth along with significant margin knowhow and the robust R&D platforms nurtured by
expansion, and are well poised to be rapidly scaled LSTC. Structural advantages arising out of distributed
up. Multi-dimensional interventions have been made manufacturing footprint, anchored on state-of-the-art
to strengthen the FMCG Businesses for sustained ICMLs strategically located proximal to large demand
profitable growth. Following a strategic review of the centres, will be increasingly leveraged to drive rapid

ITC Limited REPORT AND ACCOUNTS 2022 121

Report of the Board of Directors

growth of the FMCG Businesses. With enhanced proactive capacity augmentation in Value Added
scale and margin expansion, the FMCG Businesses Paperboards segment, decarbonisation of operations,
are expected to make increasingly higher contributions application of Industry 4.0 and towards nurturing
to your Company’s profit pool, thereby setting the robust innovation platforms. The focus going forward
stage for further value enhancement opportunities. is on driving cutting-edge innovation to rapidly scale
up single use plastic substitutes as a new vector of
The Agri Business has been a strong backbone
growth, building structural advantage through product
and a key source of competitive advantage for
mix enrichment and scaling up the use of emergent
your Company’s FMCG and Cigarettes Businesses.
technologies such as Industry 4.0 to enhance
The scope and scale of operations have grown
operational efficiency, reduce wastage and costs.
manifold over the years and currently encompass over
4 million tonnes in 22 states and over 20 agri-value The Hotels Business has established a strong footprint
chains. In recent years, the Business has pivoted its of iconic properties and F&B brands on the back of
strategic focus towards rapidly scaling up its an investment-led growth strategy. In recent years,
Value-Added Agri Products portfolio to accelerate the strategy has been reset to pursue an ‘asset-right’
growth. With policy enablers in place, your Company growth path and augment revenue streams while
is developing NextGen agriculture value chains simultaneously leveraging your Company’s world-
that are digitally enabled and climate smart, and class properties to drive growth. As reported earlier,
re-structuring the back-end into a robust network your Company will continue to pursue alternate
of Farmer Producer Organisations. This will further structures in line with industry recovery dynamics
strengthen the sourcing network and facilitate towards engendering the next horizon of growth as
the development of customised supply chains also enhancing value creation.
for traceable and identity-preserved sourcing of Your Company’s powerful innovation engine
agri-commodities and in augmenting the product across the portfolio of Businesses based on sharp
portfolio with the addition of value-added products consumer insights, superior vectors of differentiation
such as staples for the Food Service segment, and agile execution capabilities remains a strong
fresh and frozen fruits & vegetables, medicinal and source of sustainable competitive advantage.
aromatic plant extracts etc. Towards enhancing The state-of-the-art Life Sciences & Technology
the competitiveness of domestic agri-value Centre at Bengaluru, with its multi-dimensional
chains, fostering new business models and further science-based research platforms and centres of
augmenting value creation opportunities, your excellence, anchors the innovation engine across
Company is piloting ITCMAARS (Metamarket for your Company, and is effectively complemented
Advanced Agriculture and Rural Services) – a through collaborations and partnerships with several
crop-agnostic ‘phygital’ full stack AgriTech platform prestigious institutions in India and across the world.
integrating NextGen agri-technologies and solutions –
Your Company continues to build a dynamic
to seamlessly deliver hyperlocal and personalised
‘Future-Tech’ enterprise powered by state-of-the-art
solutions to the farming community whilst creating
digital technologies and infrastructure across the
new and scalable revenue streams and strengthening
value chain adding significant impetus to digital
sourcing efficiencies. The agility and depth of your
marketing, digital commerce, digital products and
Company’s institutional capabilities was demonstrated
digital operations. Your Company today, is a pioneer
by leveraging opportunities in the global markets to
in adoption of cutting-edge digital technologies across
enhance share of India’s exports in agri-commodities.
strategic impact areas spanning Intelligent new-age
The Paperboards, Paper and Packaging Businesses insights that reimagine Consumer Experience,
have made significant progress in recent years Business Model Transformation, Smart Operations
in terms of enhanced scale and profitability and Employee Experience. Initiatives such as
improvement. Strategic investments have been ‘DigiNext’ and ‘Young Digital Leaders Forum’ are
stepped up in areas such as pulp import substitution, accelerating your Company’s digital journey and

122 ITC Limited REPORT AND ACCOUNTS 2022

 Report of the Board of Directors

inculcating a data driven and ‘digital first’ culture Inflation continues to remain a key monitorable for
across the organisation. your Company in the near term.
As the world prepares for a post-pandemic future, In the face of such challenges, the resilience,
your Company is actively working towards its agility and adaptive capacity demonstrated by your
Sustainability 2.0 agenda which calls for inclusive Company is a testament to the talent, determination
strategies that can support sustainable livelihoods, and untiring efforts of its pool of dedicated
pursue newer ways to fight climate change, enable professionals, associates and partners. Lessons from
the transition to a net zero economy, work towards the prior waves of the pandemic were leveraged to
ensuring water security for all and create an effective navigate the dynamic environment in a competitively
circular economy. With its bold Sustainability 2.0 superior manner. Your Company’s diverse talent
ambitions, your Company is setting the bar higher pool of professional entrepreneurs, ‘proneurs’, have
with a multi-dimensional contribution to societal the unique opportunity to create categories, products
value creation, and remains committed to making a and brands from the ground up. This talent pool is
meaningful contribution to the Nation’s future while being nurtured not only to create winning products
retaining its status as a sustainability exemplar. and services for today, but also to seize larger
opportunities as they emerge from the expanding
Disruptive business models and value propositions
horizons of your Company’s businesses. The strategic
anchored at the intersection of Digitalisation and
interventions and sustainable competitive advantages
Sustainability form an integral part of your Company’s
of your Company have set the stage for leveraging
strategic roadmap going forward. NextGen business
emergent market opportunities and engendering
models such as ITCMAARS in the agri-ecosystem,
further value enhancement for stakeholders.
tech-enabled cloud kitchens in the food service space,
sustainable paperboards and packaging solutions Your Company’s Board and employees are inspired
customised for end-use with focus on single use by the Vision of sustaining ITC’s position as one
plastic substitutes, are being piloted/progressed of India’s most admired and valuable companies,
to actualise these opportunities. Value-accretive creating enduring value for all stakeholders, including
acquisitions, joint venture and collaborations continue the shareholders and the Indian society. The vision
to be proactively pursued towards accelerating growth of enlarging your Company’s contribution to the
and value creation. Indian economy is driven by its ‘Nation First: Sab
Saath Badhein’ credo anchored on the core values
The operating environment during the year continued
of Trusteeship, Transparency, Empowerment,
to remain challenging and was marked by heightened
Accountability and Ethical Citizenship, which are
uncertainty and volatility due to the COVID pandemic,
the cornerstones of your Company’s Corporate
continued geopolitical tension, inflationary headwinds
Governance philosophy.
on the back of commodity super cycles, and extended
supply chain disruptions. The post-pandemic recovery Inspired by this Vision, driven by Values and powered
momentum was weakened in course of the year by by internal Vitality, your Directors and employees
new strains of COVID and an unprecedented spike look forward to the future with confidence and stand
in commodity prices due to global supply chain committed to creating an even brighter future for all
disruptions, container shortages and port congestion. stakeholders.

On behalf of the Board

S. PURI Chairman & Managing Director

Kolkata
18th May, 2022 R. TANDON Director

ITC Limited REPORT AND ACCOUNTS 2022 123

Annexure to the Report of the Board of Directors
For the Financial Year Ended 31st March, 2022
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES OF THE COMPANY
1. CSR Policy - Brief outline and Overview
Brief outline of CSR Policy:
a.
It is ITC’s Policy to direct its CSR Programmes, inter alia, towards achieving one or more of the following – poverty
alleviation; promoting education and skill development; promoting healthcare including preventive healthcare;
providing sanitation and drinking water; ensuring environmental sustainability; enabling climate resilience; rural
development projects; creating livelihoods for people, especially those from disadvantaged sections of society;
protection of national heritage, art and culture; preserving and promoting music and sports; and providing relief and
assistance to victims of disasters and calamities.
In pursuit of the above, ITC has identified the following focus areas for its CSR Programmes based on comprehensive
need assessment surveys of its stakeholders:
Create sustainable livelihoods and alleviate poverty through promotion of afforestation, water stewardship,
(i) 
sustainable agriculture and climate smart practices, livestock development and women empowerment;
Build capabilities for tomorrow through interventions in education, vocational training, sanitation, school WASH
(ii) 
(Water, Sanitation & Hygiene), safe drinking water and solid waste management;
Promote healthcare, including preventive healthcare, and improve critical nutritional & health status of at-risk
(iii) 
population through interventions to strengthen mother & child health, nutritional content, delivery, outreach and
outcomes;
Protect national heritage, art & culture, and preserve & promote music and sports; and
(iv) 
(v) Provide relief and assistance to victims of disasters and calamities.
The CSR Policy of the Company may be accessed on its corporate website at https://www.itcportal.com/about-
itc/policies/corporate-social-responsibility-policy.aspx
Role of the CSR and Sustainability Committee:
b.
The role of the CSR and Sustainability Committee is inter alia, to review, monitor and provide strategic direction to
the Company’s CSR and sustainability practices towards fulfilling its triple bottom line objectives. The Committee
seeks to guide the Company in crafting unique models to support creation of sustainable livelihoods together with
environmental regeneration. Formulation and monitoring of the CSR Policy and recommendation of the annual
CSR Action Plan to the Board forms part of the role of the Committee.
CSR Programmes / Projects:
c.
The two most important stakeholders for ITC’s CSR programmes / projects are:
Rural communities primarily in the Company’s Agri Business areas.
The communities residing in close proximity to the Company’s production units.
The Company’s stakeholder representation is varied, calling for an integrated approach to development comprising
several layers of interventions which are summarised below, in line with Schedule VII to the Companies Act, 2013:
i. Promoting Preventive Healthcare, Sanitation & Poverty Alleviation (Schedule VII – i):
Sanitation: Promote a hygienic environment through prevention of open defecation and reduce incidence of
waterborne diseases. The focus of the interventions is on enhancing awareness and impacting behaviour
change on Water, Sanitation & Hygiene (WASH).
Health and Nutrition: Focus on preventive aspects through emphasis on maternal and child care (MCH)
& nutrition through awareness and counselling by leveraging institutions like Anganwadis, Asha workers
and network of women Village Health Champions (VHC). Also strengthen healthcare related services by
supplementing primary & secondary infrastructure, provide access through mobile services & technologies,
and encourage adoption of effective nutritional practices. Facilitate health impacting social and civic
infrastructure initiatives like improved sanitation and hygiene, potable drinking water etc. in the neighbourhood
of our catchments.

124 ITC Limited REPORT AND ACCOUNTS 2022

 Waste Management: Create a clean, healthy and green environment through awareness & behaviour change
for inculcating individual & community responsibility, facilitate source segregation & recycling of dry & wet
waste, and enable sustainable livelihoods for rag pickers & waste collectors.
Poverty Alleviation: Target the needy and poor through interventions that enable income generation, and also
provide access to basic needs like clothing, food, etc., as needed.
ii. Livelihood Enhancement (Schedule VII – ii):
Integrated Animal Husbandry Programme: Enhance incomes of farmers and their families by increasing
productivity of large and small ruminants through a comprehensive package of extension services and
capability building.

Education: Provide children from weaker sections access to education with focus on enrolment, retention and
improved pedagogy.
Vocational Training: Build and upgrade skills of youth with the emerging needs of the job market across
sectors.
iii. Economic Empowerment of Women (Schedule VII – iii):
Provide a range of gainful employment and entrepreneurial opportunities to women supported with access to
financial assistance by way of loans & grants and also provide for access to insurance & social security.
iv. Ensuring Environmental Sustainability (Schedule VII – iv):
Social Forestry: Provide food, fuel & fodder security to farmers through social & agro-forestry interventions.
Water Stewardship: Promote local management of water resources by facilitating community-based
participation in planning & executing watershed projects, and also identify & enable extensive use of water
efficient agri practices.
CII-ITC Centre of Excellence for Sustainable Development: Enable other businesses / organisations in India
to create enduring value on a sustainable basis by embedding the imperatives of sustainable development in
their strategies & processes.
v. Protection of National Heritage, Art & Culture (Schedule VII – v):
Revive and restore vanishing musical sub-genres by enlisting the goodwill of some of the greatest musicians
through the ITC Sangeet Research Academy (ITC SRA), which was established in 1977 as an embodiment of
the Company’s sustained commitment to a priceless national heritage.
vi. Research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals
(Schedule VII – ix-b):
Leverage the technical expertise of premier institutions through partnerships and support R&D activities in the
area of science, technology, engineering, environment, agriculture and health aimed at promoting Sustainable
Development Goals (SDGs).
vii. Rural Development (Schedule VII – x):
Sustainable Agriculture: Introduce advanced knowledge & technologies through package of practices,
increase awareness of farmers on optimum use of natural resources in order to increase farm incomes,
minimise cost of cultivation, and make agriculture resilient to extreme weather events.

Knowledge Empowerment: Enable farmers and farmer collectives to make informed choices by providing
relevant and real-time information on commodity prices, local weather reports, customised knowledge & best
practices on farm management, risk management and scientific farming.
Agri-extension / services: Encourage sustainable agricultural practices through various extension platforms
to enable access to relevant farm mechanisation technologies & implements, as also institutional support
mechanisms, especially for small farm holdings, to enhance farm productivity and farm-based incomes.
viii. Disaster Assistance (Schedule VII – xii):
Provide relief to the poor and vulnerable sections of society who face severe disruption to their livelihoods in the
event of disasters and calamities, directly or through government bodies.

ITC Limited REPORT AND ACCOUNTS 2022 125

2. Composition of the CSR and Sustainability Committee as on 31st March, 2022 :

Sl. Name of Director Designation / Nature Number of Number of

No. of Directorship meetings of CSR meetings of CSR
and Sustainability and Sustainability
Committee held Committee attended
during the year during the year

1. S. Puri Chairman & Managing Director 4

(Chairman of the Committee)

2. N. Doda 1 Non-Executive Director 1

3. M. Gupta 2 Non-Executive Director N.A.

4. S. Panray 1 Non-Executive Director 4 1

5. N. Rao Independent Director 4

6. A. K. Seth Independent Director 4

7. M. Shankar Independent Director 4

8. D. R. Simpson Non-Executive Director 4

1
Appointed Member w.e.f. 11th August, 2021.
2
Appointed Member w.e.f. 27th October, 2021.

3. Provide the web-link where composition of CSR and Sustainability Committee, CSR Policy and CSR projects approved
by the Board are disclosed on the website of the Company: https://www.itcportal.com/sustainability/corporate-
social-responsibility.aspx 
4. Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of Rule 8 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable (attach the report):
None. There are no Programmes completed after 22nd January, 2021 for which impact assessment is applicable
during the current year.
The Company, in line with Rule 8(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, will
initiate steps to conduct impact assessment of its CSR Programmes from the financial year 2022-23.
5. Details of the amount available for set off in pursuance of sub-rule (3) of Rule 7 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any:

Sl. Amount available for set-off from Amount required to be set-off for
Financial Year
No. preceding financial years (in `) the financial year, if any (in `)

1 2020-21 0.62 crore 0.62 crore

6. Average net profits of the Company as per Section 135(5) : ` 17,744.39 crores

7. (a) Two percent of the average net profits of the Company as per Section 135(5) : ` 354.89 crores

(b) Surplus arising out of the CSR projects or programmes or activities of the previous
financial years : Nil

(c) Amount required to be set off for the financial year, if any : ` 0.62 crore

(d) Total CSR obligation for the financial year (7a+7b-7c) : ` 354.27 crores

126 ITC Limited REPORT AND ACCOUNTS 2022

8. (a) CSR amount spent or unspent for the financial year:

Total Amount Amount Unspent (in `)

spent for the
Total Amount transferred to Unspent Amount transferred to any fund specified under
Financial
CSR Account as per Section 135(6) Schedule VII as per second proviso to Section 135(5)
Year (in `)
Amount Date of transfer Name of the Amount Date of transfer
Fund

` 351.13 crores ` 3.90 crores 28th April, 2022 Not Applicable

(b) Details of CSR amount spent against ongoing projects for the financial year:

1 2 3 4 5 6 7 8 9 10 11

Sl. Name Item from the Local Location of Project Amount Amount Amount Mode of Mode of
No. of the list of area the project duration allocated spent in transferred to Implementation - Implementation -
Project activities (Yes/No) for the the current Unspent CSR Direct Through Implementing
in Schedule project financial Account for (Yes/No) Agency
VII to the Act (in `) Year (in `) the project
State District as per Name CSR
Section Registration
135(6) (in `) No.

1. Rural Clause I- Yes Uttar Saharanpur 2 years 5.46 crores 1.56 crores 3.90 crores No ITC CSR00002775
Health Promoting Pradesh and Education
Care healthcare and Munger and Health
Project including preven- Bihar Care Trust
tive healthcare

(c) Details of CSR amount spent against other than ongoing projects for the financial year:

(1) (2) (3) (4) (5) (6) (7) (8)

Sl. Name Item from the Local Location of Amount Spent Mode of Mode of Implementation - Through
No. of the list of activities Area the Project for the Project Implementation - Implementing Agency (Yes/No)
Project in Schedule VII to (Yes/No) (In `) Direct (Yes/No)
the Act State District Name CSR Registration No.

Details provided under Annexure 1

(d) Amount spent in Administrative Overheads : ` 17.75 crores

(e) Amount spent on Impact Assessment, if applicable : Nil (refer to Sl. No. 4)
(f) Total amount spent for the Financial Year (8b+8c+8d+8e) : ` 355.03 crores
(g) Excess amount for set off, if any : ` 0.76 crore

Sl. Particulars Amount (in `)

No.

(i) Two percent of average net profit of the Company as per Section 135(5) ` 354.27 crores

(ii) Total amount spent for the Financial Year ` 355.03 crores

(iii) Excess amount spent for the financial year [(ii)-(i)] ` 0.76 crore

(iv) Surplus arising out of the CSR projects or programmes or activities of the previous Nil
financial years, if any

(v) Amount available for set off in succeeding financial years [(iii)-(iv)] ` 0.76 crore

ITC Limited REPORT AND ACCOUNTS 2022 127

9. (a) Details of Unspent CSR amount for the preceding three financial years:

Sl. Preceding Amount Amount spent Amount transferred to any fund specified Amount
No. Financial transferred to in the under Schedule VII as per Section 135(6), if any remaining to
Year Unspent CSR reporting be spent in
Account under Financial Year succeeding
Section 135(6) (in `) Name of the Amount Date of financial
(in `) Fund (in `) transfer years (in `)

Nil

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):

(1) (2) (3) (4) (5) (6) (7) (8) (9)

Sl. Project ID Name of Financial Project Total Amount Cumulative Status of

No. the Year in duration amount spent on the amount the
Project which the allocated project in spent at the project -
project was for the the reporting end Completed/
commenced project Financial Year of reporting Ongoing
(in `) (in `) Financial
Year
(in `)

Nil   

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through
CSR spent in the financial year (asset-wise details).

(a) Date of creation or acquisition of the capital asset(s) : Nil

(b) Amount of CSR spent for creation or acquisition of capital asset : Nil
(c) Details of the entity or public authority or beneficiary under whose name such capital asset is : Nil
registered, their address etc.
(d) Provide details of the capital asset(s) created or acquired (including complete address and location : Nil
of the capital asset).
11. Specify the reason(s), if the Company has failed to spend two per cent of the average net profit as per Section 135(5):
Not applicable

On behalf of the Board

S. PURI Chairman – CSR and Sustainability Committee

18th May, 2022
Kolkata, India R. TANDON Director

128 ITC Limited REPORT AND ACCOUNTS 2022

 Annexure 1
Details of CSR amount spent against other than ongoing projects for the financial year
1 2 3 4 5 6 7 8
Sl. Name of Item from the list of Local Area Location of the Project Amount Mode of Mode of Implementation
No. the Project activities in Schedule VII (Yes/No) Spent for the Implementation - - Through Implementing
to the Act Project Direct (Yes/No) Agency (Yes/No)
State District (In ` Lakhs) Name CSR
Registration No.
1 Health & Clause I - Promoting health Local Area & Andhra Pradesh, Assam, Bihar, East Godavari, Guntur, Prakasam, Kurnool, West Godavari, Darrang, Kamrup, Munger, East Champaran, 2,386 No Annexure 2
Sanitation care including preventive Others Delhi, Himachal Pradesh, Jharkhand, Lakhisarai, Patna, Rohtas, New Delhi, Solan, Koderma, Ramgarh, Ranchi, Bengaluru Rural, Bengaluru
health care Karnataka, Madhya Pradesh, Urban, Hassan, Kolar, Mysuru, Indore, Sehore, Vidisha, Jalna, Pune, Imphal, East Kashi Hills,
Maharashtra, Odisha, Punjab, Tamil Jagatsinghapur, Ganjam, Khordha, Malkangiri, Kapurthala, Coimbatore, Krishnagiri, Pudukkottai,
Nadu, Telangana, Uttar Pradesh, Virudhunagar, Bhadradri Kothagudem, Khammam, Medak, Hyderabad, Budaun, Bahraich, Chandauli,
Uttarakhand, West Bengal Gonda, Hardoi, Hathras, Pilibhit, Saharanpur, Haridwar, Hooghly, Howrah, Kolkata, Jalpaiguri,
Purba Medinipur 2,715 Yes N.A.
2 Solid Waste Clause I - Sanitation Local Area & Andhra Pradesh, Bihar, Delhi, Guntur, Prakasam, Tirupati, Munger, Muzaffarpur, New Delhi, Bengaluru Rural, Bengaluru Urban, 1,547 No Annexure 2
Management Others Karnataka, Maharashtra, Odisha, Mysuru, Pune, Puri, Khordha, Kapurthala, Chennai, Coimbatore, Madurai, Pudukkottai, Tiruchirappalli,
Punjab, Tamil Nadu, Telangana, Uttar Bhadradri Kothagudem, Hyderabad, Karimnagar, Mahabubnagar, Siddipet, Warangal, Ayodhya,
Pradesh, Uttarakhand, Lucknow, Saharanpur, Haridwar, Hooghly
West Bengal 40 Yes N.A.
3 Vocational Clause II - Employment Local Area & Andaman and Nicobar Island, South Andaman, Guntur, East Godavari, Prakasam, Darrang, Kamrup, Munger, Sukma, South Delhi, 1,229 No Annexure 2
Training enhancing vocation skills Others Andhra Pradesh, Assam, Bihar, South Goa, Vadodara, Faridabad, Nuh, Solan, Jammu, Srinagar, Dhanbad, Benguluru Urban, Bengaluru
Chhattisgarh, Delhi, Goa, Gujarat, Rural, Kolar, Bhopal, Chhindwara, Damoh, Gwalior, Indore, Sehore, Vidisha, Mumbai City, Mumbai
Harayana, Himachal Pradesh, Jammu Suburban, Nanded, Pune, Thane, Khordha, Malkangiri, Amritsar, Kapurthala, Jhalawar, Jaipur, Jodhpur,
& Kashmir, Jahrkhand, Karnataka, Chennai, Coimbatore, Krishnagiri, Pudukkottai, Tiruchirappalli, Virudhunagar,Bhadradri Kothagudem,
Madhya Pradesh, Maharashtra, Hyderabad, Medak, Warangal,Agra, Ghaziabad, Gorakhpur, Kaushambi, Lucknow, Pratapgarh,
Odisha, Punjab, Rajasthan, Tamil Prayagraj, Saharanpur, Varanasi, Haridwar, Hooghly, Howrah, Kolkata, South 24 Parganas
Nadu, Telangana, Uttar Pradesh,
Uttarakhand, West Bengal 337 Yes N.A.
4 Intergrated Clause II - Livelihood Local Area & Andhra Pradesh, Karnataka, Madhya Guntur, Nellore, Prakasam, West Godavari, Hassan, Mysuru, Amravati, Bhopal, Guna, Indore, Mandsaur, 135 No Annexure 2
Animal enhancement projects Others Pradesh, Maharashtra, Telangana Sehore, Shivpuri, Ujjain, Vidisha, Khammam
Husbandry
5 Livelihood Clause II - Livelihood Local Area & Bihar, West Bengal Begusarai, Bhagalpur, Khagaria, Lakhisarai, Munger, Samastipur, Vaishali, Hooghly, 231 No Annexure 2
Promotion enhancement projects Others Purba Bardhaman
6 Education Clause II - Promoting Local Area & Andhra Pradesh, Assam, Bihar, East Godavari, Guntur, Hyderabad, Kurnool, Nellore, Prakasam, Sirkakulam, Vizianagaram, 1,629 No Annexure 2
education, including special Others Delhi, Gujarat, Himachal Pradesh, Vishakapatnam, West Godavari, Darrang, Kamrup, Munger, East Champaran, Lakhisarai, Patna, Rohtas,
education Karnataka, Maharashtra, Odisha, New Delhi, North Delhi, South Delhi, South West Delhi, West Delhi, Ahmedabad, Solan, Bengaluru Rural,
Punjab, Tamil Nadu, Telangana, Uttar Bengaluru Urban, Hassan, Kolar, Mysuru, Amravati, Buldana, Dhule, Jalgaon, Jalna, Kolhapur, Pune,
Pradesh, Uttarakhand, Jagatsinghpur, Kapurthala, Chennai, Chengalpattu, Pondicherry, Coimbatore, Krishnagiri, Pudukkottai,
West Bengal Virudhunagar, Thiruvallur, Bhadradri Kothagudem, Khammam , Medak, Saharanpur, Lucknow, Haridwar,
Hooghly, Kolkata, Purba Medinipur, Jalpaiguri 812 Yes N.A.
7 Women Clause III - Promoting gender Local Area & Assam, Bihar, Delhi, Himachal Kamrup, Munger, East Delhi, North Delhi, West Delhi, Solan, Hassan, Mysuru, Agar Malwa, Alirajpur, 783 No Annexure 2
Empowerment equality, empowering women Others Pradesh, Karnataka, Madhya Anuppur, Ashok Nagar, Balaghat, Barwani, Betul, Bhind, Bhopal, Chhindwara, Chhatarpur, Damoh, Datia,

ITC Limited
Pradesh, Rajasthan, Tamil Dewas, Dhar, Dindori, Guna, Gwalior, Harda, Hoshangabad, Jabalpur, Jhabua, Katni, Mandla, Morena,
Nadu, Telangana, Uttar Pradesh, Narsinghpur, Panna, Raisen, Rajgarh, Rewa, Sagar, Satna, Sehore, Seoni, Shahdol, Shajapur, Sheopur,
Uttarakhand, West Bengal Shivpuri, Sidhi, Singrauli, Tikamgarh, Umaria, Vidisha, Baran, Bikaner, Bundi, Kota, Coimbatore,
Krishnagiri, Pudukkottai, Bhadradri Kothagudem, Khammam, Chandauli, Saharanpur, Haridwar, Howrah
8 Soil & Moisture Clause IV - Conservation Local Area & Andhra Pradesh, Assam, Bihar, East Godavari, Guntur, Nellore, Prakasam, West Godavari, Darrang, Kamrup, Sukma, Munger, New 4,215 No Annexure 2
Conservation of natural resources and Others Chhattisgarh, Delhi, Haryana, Delhi, South West Delhi, Nuh, Solan, Belagavi, Bengaluru Rural, Bengaluru Urban, Hassan, Kolar,
maintaing quality of soil, air Himachal Pradesh, Karnataka, Mysuru, Yadgir, Chhindwara, Dewas, Indore, Sehore, Ujjain, Vidisha, Ahmednagar, Pune, Ganjam,
and water Madhya Pradesh, Maharashtra, Malkangiri, Kapurthala, Baran, Barmer, Bikaner, Bundi, Jaisalmer, Jhalawar, Jodhpur, Kota, Pali,
Odisha, Punjab, Rajasthan, Tamil Coimbatore, Pudukkottai, Theni, Bhadradri Kothagudem, Medak, Nalgonda, Gorakhpur, Saharanpur,
Nadu, Telangana, Uttar Pradesh, Haridwar
Uttarakhand 1,347 Yes N.A.
9 Social Forestry Clause IV - Ensuring Local Area & Andhra Pradesh, Assam, East Godavari, Guntur, Krishna, Nellore, Prakasam, West Godavari, Darrang, Sukma, Hassan, Mysuru, 255 No Annexure 2
environmental sustainibility, Others Chhattisgarh, Karnataka, Chandrapur, Malkangiri, Bhadradri Kothagudem, Khammam, Mahabubabad, Mulugu, Nalgonda,
ecological balance, protection Maharashtra, Odisha, Telangana, Sepahijala, West Tripura, Haridwar
of flora and fauna, animal Tripura, Uttarakhand

REPORT AND ACCOUNTS 2022

welfare, agroforestry 6 Yes N.A.
10 Protection of Clause V - Protection of Local Area & West Bengal Kolkata 230 No Annexure 2
national heritage, national heritage, art and Others

129
art and culture culture
 1 2 3 4 5 6 7 8

130
Sl. Name of Item from the list of Local Area Location of the Project Amount Mode of Mode of Implementation
No. the Project activities in Schedule VII (Yes/No) Spent for the Implementation - - Through Implementing
to the Act Project Direct (Yes/No) Agency (Yes/No)
State District (In ` Lakhs) Name CSR
Registration No.
11 Research Clause IX (b) - Contributions Local Area & N.A. N.A. 377 Yes N.A.
in science, to public funded Universities; Others

ITC Limited
technology, Indian Institute of Technology
engineering and (IITs); National Laboratories
medicine and autonomous bodies
established under Department
of Atomic Energy (DAE);
Department of Biotechnology
(DBT); Department of
Science and Technology
(DST); Department of
Pharmaceuticals; Ministry
of Ayurveda, Yoga and
Naturopathy, Unani, Siddha
and Homoeopathy (AYUSH);
Ministry of Electronics and
Information Technology
and other bodies, namely
Defense Research and

REPORT AND ACCOUNTS 2022

Development Organization
(DRDO); Indian Council
of Agricultural Research
(ICAR); Indian Council of
Medical Research (ICMR)
and Council of Scientific and
Industrial Research (CSIR),
engaged in conducting
research in science,
technology, engineering and
medicine aimed at promoting
Sustainable Development
Goals (SDGs)
12 Improved Clause X - Rural Development Local Area & Andhra Pradesh, Assam, Bihar, East Godavari, Guntur, Krishna, Kurnool, Nellore, Prakasam, Srikakulam, West Godavari, Baksa, 2,278 No Annexure 2
Agriculture projects Others Chhattisgarh, Gujarat, Haryana, Berpata, Darrang, Dhubri, Goalpara, Kamrup, Araria, Begusarai, Bhojpur, Buxar, East Champaran,
Practises Himachal Pradesh, Jharkhand, Kaimur (Bhabua), Katihar, Lakhisarai, Munger, Patna, Rohtas, Sheikhpura, Sitamarhi, Sukma,
Karnataka, Kerala, Madhya Pradesh, Junagadh, Navsari, Rajkot, Bhiwani, Fatehabad, Hisar, Nuh, Rewari, Sirsa, Solan, Pakur, Sahibganj,
Maharashtra, Odisha, Punjab, Bagalkot, Belagavi (Belgaum), Ballari ( Bellary), Bengaluru Rural, Bengaluru Urban, Chikkamagaluru
Rajasthan, Tamil Nadu, Telangana, (Chikmagalur), Hassan, Kodagu, Kolar, Mysuru, Raichur, Yadgir, Wayanad, Agar Malwa, Ashok Nagar,
Uttar Pradesh, Uttarakhand, Barwani, Betul, Bhopal, Chhatarpur, Chhindwara, Damoh, Dewas, Dhar, Guna, Harda, Hoshangabad,
West Bengal Indore, Khandwa, Khargaon, Mandsaur, Narsinghpur, Neemuch, Raisen, Rajgarh, Ratlam, Sagar,
Sehore, Seoni, Shajapur, Shivpuri, Singrauli, Tikamgarh, Ujjain, Vidisha, Ahmednagar, Akola, Amravati,
Beed, Bhandara, Buldhana, Chandrapur, Hingoli, Jalna, Latur, Nagpur, Nanded, Nashik, Nandurbar,
Osmanabad, Parbhani, Pune, Ratnagiri, Sangli, Solapur, Wardha, Washim, Yavatmal, Ganjam,
Kalahandi, Khordha, Malkangiri, Rayagada, Amritsar, Kapurthala, Ajmer, Alwar, Banswara, Baran,
Barmer, Bharatpur, Bhilwara, Bikaner, Bundi, Chittorgarh, Dausa, Dholpur, Dungarpur, Hanumannagar,
Jaipur, Jaisalmer, Jalore, Jhalawar, Karauli, Kota, Nagaur, Pali, Pratapgarh, Rajsamand, Sawai
Madhopur, Shri Ganganagar, Sikar, Tonk, Udaipur, Coimbatore, Pudukkottai, Sivaganga, Theni,
Adilabad, Bhadradri Kothagudem, Jayashankar Bhupalpally, Jangaon, Jogulamba Gadwal, Khammam,
Mahabubabad, Mahbubnagar, Medak, Mulugu, Nalgonda, Nizamabad, Warangal, Agra, Aligarh,
Ambedkar Nagar, Auraiya, Ayodhya, Azamgarh, Baghpat, Bahraich, Barabanki, Bareilly, Basti, Budaun,
Bulandshahr, Chandauli, Deoria, Etah, Etawah, Gonda, Gorakhpur, Ghazipur, Hardoi, Hathras, Jalaun,
Jaunpur, Kanpur Dehat, Kanshiram Nagar (Kasganj), Kushinagar, Lakhimpur-Kheri, Lalitpur, Lucknow,
Maharajganj, Mainpuri, Mathura, Meerut, Mirzapur, Moradabad, Prayagraj, Pilibhit, RaeBareli, Rampur,
Saharanpur, Sant Kabir Nagar, Shahjahanpur, Shravasti, Siddharthnagar, Sitapur, Sultanpur, Unnao,
Varanasi, Haridwar, Udham Singh Nagar, Hooghly, Howrah, Murshidabad 3,309 Yes N.A.
13 Disaster Relief Clause XII - Disaster Local Area & Pan India Ahmedabad, Bengaluru Urban, Bhopal, Cachar, Chennai, Coimbaore, Cuttack, Darjeeling, Dehradun, 1,552 No Annexure 2
Management , including Others Dharwad, Ernakulam, Gautam Budh Nagar, Guntur, Hyderabad, Haridwar, Jaipur, Jodhpur, Kamrup,
relief , rehabilitation and Kanpur, Kolkata, Kozhikode, Lucknow, Mumbai Suburban, North Goa, Patna, Pune, Raipur, Ranchi,
reconstruction activities Sambalpur, Tiruchirappalli, Varanasi, Vishakhapatnam
Pan India 7,769 Yes N.A.
TOTAL PROJECT COST 33,182
Annexure 2
List of Implementing Agencies

NGO Name CSR1 Registration No. Schedule VII Clause

Academy of Gandhian Studies CSR00005230 Clause - ( i )

Action For Agricultural Renewal In Maharashtra-AFARM CSR00000092 Clause - ( iv and x )
Action For Social Advancement (ASA) CSR00001213 Clause - ( iv and x )
Arunodaya Information Management Society CSR00028261 Clause - ( x )
Adarsh Yuva Samiti CSR00000390 Clause - ( i, ii and iii )
Adarsha Rural Health and Economic Development Society CSR00000385 Clause - ( iv and x )
Anudip Foundation For Social Welfare CSR00000060 Clause - ( ii )
ASSIST CSR00000031 Clause - ( i and ii )
Assocham Foundation For Corporate Social Responsibility CSR00001076 Clause - ( i )
Avvai Village Welfare Society CSR00002508 Clause - ( I and ii )
Azad Foundation CSR00001157 Clause - ( iii )
BAIF Development Research Foundation CSR00000308 Clause - ( ii, iii, iv and x )
Bandhan - Konnagar CSR00001463 Clause - ( iii )
Biome Environmental Trust CSR00001605 Clause - ( iv )
Bitan Institute For Training, Awareness and Networking CSR00004091 Clause - ( i )
Bright Light Society CSR00001369 Clause - ( ii )
Chaitanya Jyothi Welfare Society CSR00003746 Clause - ( iv and x )
Collective Good Foundation CSR00001648 Clause - ( ii )
Community Organisation For Oppressed and Depressed Upliftment (COODU) CSR00001346 Clause - ( iv and x )
Daya Society CSR00007699 Clause - ( ii )
Deepam Rural Development Charitable Trust CSR00001942 Clause - ( i, ii, iii, iv and x )
Development Research Communication & Services Center CSR00002927 Clause - ( x )
Development Support Centre CSR00000674 Clause - ( iii, iv and x )
DHAN (Development of Humane Action) Foundation CSR00000273 Clause - ( iv and x )
Don Bosco Tech Society CSR00001747 Clause - ( ii )
Dr. Hedgewar Seva Samiti Nandurbar CSR00001781 Clause - ( x )
Dr.Ambedkar Society For Youth & Rural Development CSR00005008 Clause - ( iv and x )
E Sree Foundation CSR00000452 Clause - ( i )
EFFORT (Eco Foundation for Research & Training ) CSR00002557 Clause - ( iv and x )
Environmentalist Foundation of India CSR00002310 Clause - ( ii )
Exnora International Foundation CSR00002245 Clause - ( i )
Financial Inclusion Improves Sanitation and Health Society CSR00001053 Clause - ( i and ii )
Food Security Foundation India CSR00001178 Clause - ( xii )
Forum For Organized Resource Conservation and Enhancement CSR00000037 Clause - ( i, iv and x )
Foundation for Ecological Security CSR00000637 Clause - ( iv )
FXB India Suraksha CSR00000076 Clause - ( I & ii )
Gandhi Golden Trust CSR00013621 Clause - ( x )
Gramasiri CSR00002041 Clause - ( iv & x )
Grameen Development Services CSR00000639 Clause - ( x )
Green Cross CSR00001062 Clause - ( iv and x )
Guide Foundation For Development CSR00000886 Clause - ( iv and x )
Harsha Trust CSR00001106 Clause - ( iv and x )
Healthy You Foundation CSR00017775 Clause - ( ii )
Institute For Development of Youth,Women and Child CSR00001582 Clause - ( iii, iv and x )
Institute of Spatial Planning and Environmental Research CSR00006782 Clause - ( iv and x )
ITC Education and Health Care Trust CSR00002775 Clause - ( i )
ITC Sangeet Research Academy CSR00003561 Clause - ( v )
Learning Links Foundation CSR00000640 Clause - ( ii )
Lokmitra CSR00000814 Clause - ( ii )
Mamta Health Institute For Mother and Child CSR00001978 Clause - ( i )

ITC Limited REPORT AND ACCOUNTS 2022 131

 NGO Name CSR1 Registration No. Schedule VII Clause

Manav Vikas Sansthan CSR00001537 Clause - ( iv and x )

Modern Architects For Rural India CSR00000168 Clause - ( i )
Myrada Kaveri Pradeshika Samsthe CSR00001643 Clause - ( i, ii, iii, iv and x )
Mysore Resettlement and Development Agency CSR00001099 Clause - ( iv and x )
National Centre for Human Settlements and Environment CSR00000776 Clause - ( iii, iv and x )
National Institute for Rural Development, Education, Social Upliftment and Health CSR00008272 Clause - ( i )
(NIRDESH)
Nehru Foundation For Development CSR00001034 Clause - ( x )
Network For Enterprise Enhancement and Development Support NEEDS CSR00002858 Clause - ( i )
New Concept Centre For Development Communication CSR00000240 Clause - ( i )
Outreach Association of Volunteers for Rural Development CSR00002003 Clause - ( i, ii, iv and x )
Peoples Action for National Integration CSR00000125 Clause - ( iv and x )
Pratham Education Foundation CSR00000258 Clause - ( ii )
Pravah CSR00002347 Clause - ( x )
Rashtriya Gramin Vikas Nidhi CSR00002390 Clause - ( iv and x )
Rotary Bangalore Peenya Trust CSR00018967 Clause - ( i )
Round Table India Trust CSR00000895 Clause - ( ii )
Rural Communes CSR00010212 Clause - ( x )
Rural Development Organisation CSR00001586 Clause - ( i, ii and iii )
SAAHAS CSR00000097 Clause - ( i )
Sachidanand Shikshan Sansthan CSR00017100 Clause - ( iii and x )
Samarth In Participatory Action Society CSR00002296 Clause - ( iv and x )
Samarthanam Trust For The Disabled CSR00000063 Clause - ( i )
Sambhav Foundation CSR00028598 Clause - ( x )
Sarv Mangal Gramin Vikas Sansthan CSR00000154 Clause - ( iii, iv and x )
Sarva Seva Samity Sanstha CSR00000224 Clause - ( x )
SEARCH-Socio Economic Alternatives Research and Resource Community for Humanity CSR00000587 Clause - ( i, ii, iv and x )
Seven Sisters Development Assistance (SeSTA) CSR00000087 Clause - ( iv and x )
SEWA Bharat CSR00001733 Clause - ( iii )
Shramjivi Janata Sahayyak Mandal CSR00001794 Clause - ( x )
Shri Bhuvneshwari Mahila Ashram CSR00001595 Clause - ( i )
Skills Art and Beyond Social Welfare Society CSR00019962 Clause - ( x )
Social Awareness Through Human Involvement CSR00003798 Clause - ( i, ii and iii )
Society For Sampurna Grama Swaraj CSR00000669 Clause - ( iv and x )
Society of Indian Institute for Rural Development CSR00000199 Clause - ( iv and x )
Support For Network and Extension Help Agency (SNEHA) CSR00000103 Clause - ( i and ii )
Umang Sunehra Kal Sewa Samiti CSR00000658 Clause - ( i, iv and x )
Velugu Association CSR00001765 Clause - ( x )
Vijay Integrated Devlopment Society (VIDS ) CSR00000055 Clause - ( i )
Vikramshila Education Resource Society CSR00001182 Clause - ( ii )
Water For People India Trust CSR00000892 Clause - ( i )
Water Sanitation and Hygiene Institution (WASH Institute) CSR00000170 Clause - ( i, ii and x )
Youth For Development of People CSR00002588 Clause - ( iv and x )
Youthinvest Foundation CSR00001288 Clause - ( i )

132 ITC Limited REPORT AND ACCOUNTS 2022

Annexure to the Report of the Board of Directors
Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2022
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To
The Members
ITC Limited
Virginia House
37, J. L. Nehru Road
Kolkata 700 071
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by
ITC Limited (hereinafter called the ‘Company’). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the
corporate conduct / statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also
the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, we hereby report
that in our opinion, the Company has, during the period covered by our audit, that is to say, from April 01, 2021 to March 31, 2022 (hereinafter referred
to as ‘Audit Period’ or ‘Period under Review’), complied with the statutory provisions listed hereunder and also that the Company has proper
Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company till March 31, 2022,
according to the provisions of:
1. The Companies Act, 2013 (the ‘Act’) and the Rules made thereunder;
2. The Securities Contracts (Regulation) Act, 1956 and the Rules made thereunder;
3. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
4. The Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment,
Overseas Direct Investment and External Commercial Borrowings;
5. The following Regulations prescribed under the Securities and Exchange Board of India Act, 1992:
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
d. The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021;
e. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; and
f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 - The in-house
Investor Service Centre of the Company, registered with SEBI as a Category II Share Transfer Agent, provides share registration and
related services.
6. Specific laws applicable as mentioned hereunder:
a. The Tobacco Board Act, 1975 and the Rules made thereunder;
b. The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and
Distribution) Act, 2003 and the Rules made thereunder and other laws relating to manufacture and sale of Tobacco;
c. The Food Safety and Standards Act, 2006 and the Rules made thereunder;
d. The Drugs and Cosmetics Act, 1940 and the Rules made thereunder.
We have also examined compliance with the applicable clauses of the Secretarial Standards 1 and 2 issued by the Institute of Company Secretaries of
India.
We report that during the Period under Review, the Company has complied with the provisions of the Laws, Rules, Regulations, Guidelines,
Standards etc. mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent
Directors. The changes made in the composition of the Board of Directors during the Period under Review were carried out in compliance with the
applicable laws.
Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven to
fourteen days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting
and for meaningful participation at the meeting.
Dissenting members’ views were not required to be captured and recorded as part of the minutes as there was no such instance.
We further report that there are adequate systems and processes in the Company, commensurate with the size and operations of the Company, to
monitor and ensure compliance with the applicable Laws, Rules, Regulations and Guidelines.
We further report that during the Audit Period, the Company has not undertaken any specific event / action that can have a bearing on the
Company’s compliance responsibility in pursuance of the above referred Laws, Rules, Regulations, Guidelines, Standards, etc., except as follows:
1. Issue and allotment of 1,44,11,700 Ordinary Shares of ` 1/- each, fully paid-up, upon exercise of Stock Options under the Employee Stock Option
Schemes of the Company, from time to time.

ITC Limited REPORT AND ACCOUNTS 2022 133

2. The Scheme for amalgamation of Hobbits International Foods Private Limited and Sunrise Sheetgrah Private Limited, wholly owned
subsidiaries, with the Company was sanctioned by the Hon’ble National Company Law Tribunal, Allahabad Bench, which became effective from
12th August, 2021.
3. Acquisition of additional preference shares in Delectable Technologies Private Limited (Delectable), an associate company, consequent to which the
Company’s shareholding in Delectable aggregated 27.34% of its share capital (on a fully diluted basis).
4. Acquisition of shares in Mother Sparsh Baby Care Private Limited (Mother Sparsh), in two tranches, pursuant to the Share Subscription Agreement
and Shareholders’ Agreement dated 26th November, 2021 entered into by the Company, consequent to which the Company’s shareholding in
Mother Sparsh aggregated 16% of its share capital (on a fully diluted basis).
5. Wimco Limited became a wholly owned subsidiary of the Company with effect from 29th July, 2021 (the Company’s shareholding during the
financial year 2020-21 was 98.21%), consequent to reduction of equity share capital of that company becoming effective upon receipt of
necessary approvals.
For Vinod Kothari & Company
Practising Company Secretaries
Unique Code: P1996WB042300
Vinod Kothari
Managing Partner
Membership No.: F10564
Kolkata C P No.: 1391
09-05-2022 UDIN: F010564D000289832
Encl: Annexure ‘A’ forming an integral part of this Report Peer Review Certificate No.: 781/2020

Annexure ‘A’
Annexure to Secretarial Audit Report (Non-Qualified)
To
The Members
ITC Limited
Virginia House
37, J. L. Nehru Road
Kolkata 700 071
Our Report of even date is to be read along with this letter.
i. Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these
secretarial records based on our audit.
ii. We have followed the audit practices and the processes as were appropriate to obtain reasonable assurance about the correctness of the contents
of the secretarial records. The verification was done on a test basis to ensure that correct facts are reflected in secretarial records. We believe that
the processes and practices, we followed provide a reasonable basis for our opinion.
iii. Our Audit was based on examination of books and records maintained by the Company.
iv. Our Audit examination was restricted to legal compliances of the applicable laws to be done by the Company; we have not checked the operational
and business aspects relating to the same.
v. Given the challenges and limitations posed by Covid-19, as well as considering the effectiveness of information technology tools in the audit
processes, we have conducted only online verification and examination of records, as facilitated by the Company, for the purpose of issuing this
Report. In doing so, we have followed the guidance as issued by the Institute.
vi. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company as well as correctness of the
values and figures reported in various disclosures and returns as required to be submitted by the Company under the specified laws, though we have
relied to a certain extent on the information furnished in such returns.
vii. Wherever required, we have obtained the Management Representation about the compliance of Laws, Rules and Regulations and happening of
events etc.
viii. The compliance of the provisions of corporate and other applicable Laws, Rules, Regulations, Standards is the responsibility of the management.
Our examination was limited to the verification of procedure on test and sample basis.
ix. Due to the inherent limitations of an audit including internal, financial, and operating controls, there is an unavoidable risk that some misstatements
or material non-compliances may not be detected, even though the audit is properly planned and performed in accordance with audit practices.
x. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the
management has conducted the affairs of the Company.
For Vinod Kothari & Company
Practising Company Secretaries
Unique Code: P1996WB042300
Vinod Kothari
Managing Partner
Membership No.: F10564
C P No.: 1391
Kolkata UDIN: F010564D000289832
09-05-2022 Peer Review Certificate No.: 781/2020

134 ITC Limited REPORT AND ACCOUNTS 2022

Annexure to the Report of the Board of Directors
INFORMATION UNDER SECTION 134 (3) (m) OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ACCOUNTS) RULES,
2014 AND FORMING PART OF THE REPORT OF THE BOARD OF DIRECTORS

CONSERVATION OF ENERGY: c) Capital investment on energy conservation equipment:

All business units continued their efforts to improve energy ` 1222.26 lakhs
usage efficiencies and increase the share of renewable energy TECHNOLOGY ABSORPTION:
in line with ITC’s 2030 Goals. These goals include reduction in a) Efforts made towards technology absorption:
specific energy by 30% and specific GHG by 50% along with
I. As a part of Industry 4.0 initiative, various technological
increasing renewable energy share to 50% and sourcing 100%
innovations are being implemented across the Businesses.
of purchased electricity from renewables. The Company regularly
Key highlights are presented below:
tracks its performance against these key performance indicators.
The Company invests in energy conservation and renewable a. Implemented IIoT (Industrial Internet of Things) sensors
to monitor equipment condition and plan for predictive
energy projects along with exploring innovative technologies to
maintenance and reduce downtime.
bring about the alignment with the goals. These investments are
done in phases by taking into account future expansion plans, b. Installed advanced data management system to capture
evolving regulatory frameworks, techno-commercial feasibility real-time operations data across businesses that helps
in building machine learning tools. This is to improve
and socio-political aspects.
quality; increase throughput and energy performance;
a) Steps taken or impact on conservation of energy: and reduce material consumption.
Some of the energy conservation measures adopted across the c. Adopted Intelligent power management tool to track
Company are outlined below: various performance metrics such as power quality,
I. Installation of new energy efficient electric boilers. idle power etc. for each individual equipment to help
II. Installation of Vapour Absorption Machine (VAM). optimise overall performance.
III. Optimisation of compressed air management through d. Built machine learning models to help maintain
measures such as installation of intelligent flow controller consistent quality of the product such as maintaining
to remove pressure surges, installation of additional adequate moisture, varying ingredients etc.
compressor, installation of pressure booster etc. II. Robotics system for waterless cleaning of rooftop solar
modules.
IV. Automation in tube cleaning systems in Heating, Ventilation
and Air Conditioning (HVAC) chillers resulting in higher III. Printing on Biscuits using caramel based edible ink.
efficiency. IV. New process and product technologies on personal
V. Utilisation of waste heat such as pre-heating boiler hygiene, skin care and fragrances developed through
feedwater from exhaust steam and pre-heating fresh air in-house Research & Development in the Personal Care
Products Business.
in oven.
V. Induction of contemporary technologies and continuous
VI. Installation of Variable Frequency Drives (VFDs) for
improvement across businesses, towards reducing process
various motors, chillers, blowers and fans.
variability, cycle time and wastages while enhancing
VII. Replacement of cooling tower, AHUs, chillers, air manufacturing flexibility, productivity and capability across
conditioners, motors, fans, pumps and agitators with higher Businesses.
efficiency ones.
b) Benefits derived:
VIII. Improvement in energy usage efficiency in lighting systems
by changing over to efficient lighting solutions such as I. Cycle time reduction and productivity enhancement
Light Emitting Diodes (LEDs). II. World-class quality and differentiated products
IX. Process improvements to enhance productivity and reduce III. Addressing market specific end-use applications
specific energy consumption across Businesses. IV. Conservation of resources and improved efficiencies
b) Steps taken for utilising alternate sources of energy: c) The expenditure incurred on Research and
Some of the renewable energy initiatives undertaken during the Development:
year are as follows: For the year ended
I. Commissioning of 14.9MW offsite solar photovoltaic power 31st March, 2022
plant in Tamil Nadu. Expenditure on R&D: (` in Lakhs)
II. Commissioning of additional rooftop solar photovoltaic
i) Capital 2,016.68
power plants.
ii) Revenue 14,358.55
III. Continued use of biomass-based fuels in existing
biomass boilers for thermal energy generation to reduce Total 16,375.23
dependency on fossil fuels across Businesses. Total R&D Expenditure (as a % of Gross Revenue) 0.28%
In addition, the Company also commissioned a state-of-the-art
and future-ready High Pressure Recovery Boiler at the
Bhadrachalam mill, replacing conventional soda recovery boilers. On behalf of the Board
This intervention will reduce the carbon footprint of the unit’s
operations through significantly lower coal consumption.
S. PURI Chairman & Managing Director
R. TANDON Director
These investments have helped achieve renewable energy share
of 42%. 18th May, 2022 Kolkata, India

ITC Limited REPORT AND ACCOUNTS 2022 135

Annexure to the Report of the Board of Directors
For the Financial Year Ended 31st March, 2022
A. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Name of Directors & Designation Ratio of Remuneration to Increase in Remuneration
Key Managerial Personnel Median Remuneration over Last Year (%)
of all Employees

Based on remuneration paid

S Puri Chairman & Managing Director 224 : 1 5

N Anand Executive Director 100 : 1 (2)

B Sumant Executive Director 103 : 1 0

R Tandon Executive Director 103 : 1 0

S Banerjee Independent Director 16 : 1 13

1
H Bhargava Independent Director 15 : 1 9
2
N Doda Non-Executive Director 1 : 1 –

A Duggal Independent Director 16 : 1 16

3
M Gupta Non-Executive Director – –
4
S Mukherjee Independent Director 1 : 1 –

A Nayak Independent Director 15 : 1 49*

S Panray 2 Non-Executive Director – –

N Rao Independent Director 15 : 1 13

A K Seth Independent Director 15 : 1 51*

M Shankar Independent Director 15 : 1 13

D R Simpson Non-Executive Director 15 : 1 14

5
A Jerath Non-Executive Director 14 : 1 358*
6
S B Mathur Independent Director 15 : 1 8
7
S Dutta Chief Financial Officer 52 : 1 195*

R K Singhi Executive Vice President & Company Secretary 36 : 1 3

* Not comparable as remuneration has been computed on paid basis.

1
Resigned as Non-Executive Director w.e.f. 23rd August, 2021; Appointed Independent Director w.e.f. 20th December, 2021
2
Appointed as Non-Executive Director w.e.f. 11th August, 2021
3
Appointed as Non-Executive Director w.e.f. 27th October, 2021
4
Appointed as Independent Director w.e.f. 11th August, 2021
5
Appointed as Non-Executive Director w.e.f. 31st January, 2020 and resigned w.e.f. 1st May, 2021
6
Ceased to be Independent Director w.e.f. 15th September, 2021 upon completion of term
7
Appointed as Chief Financial Officer w.e.f. 5th September, 2020

Notes
1) The number of permanent employees as on 31st March, 2022 was 23,829
2) Compared to the financial year 2020-21, the figures for the financial year 2021-22 reflect that:
(i) Median remuneration of employees - Increased by 4%
(ii) Average remuneration of employees - Increased by 7%
(iii) Average remuneration of employees excluding Key Managerial Personnel (KMPs) - Increased by 7%
(iv) Remuneration of KMPs - Increased by 8% due to impact of increase in number of KMPs during the previous year
3) Remuneration of Directors, KMPs and other employees is in accordance with the Company’s Remuneration Policy

136 ITC Limited REPORT AND ACCOUNTS 2022

B. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Name Age Designation Gross Net Qualifications Expe- Date of Previous Employment and
Remuneration Remuneration rience Commence- Position Held
(`) (`) (Years) ment of
Employment
1 2 3 4 5 6 7 8 9
Top ten employees in terms of remuneration drawn            
Puri S 59 Chairman & Managing Director 12,59,37,328 4,54,67,265 B.Tech. 37 20.01.1986 TELCO Ltd., Trainee
Sumant B 58 Executive Director 5,76,46,724 1,96,09,497 B.E. 36 20.01.1986 Nil
Tandon R 68 Executive Director 5,76,01,394 1,95,39,396 B.Sc., F.C.A. 44 01.01.1987 Triveni Handlooms Ltd.,
Finance Mgr. & Secy.
Anand N 65 Executive Director 5,60,90,920 2,01,94,068 B.A. (Hons.) 42 01.12.1979 @
Sivakumar S 61 Group Head - Agri Business 3,83,79,860 1,85,55,833 B.Sc., P.G. Dip. in Rural Mgmt. 39 18.09.1989 Gujarat Co-op Oil Seeds Growers’
Fed. Ltd., Mgr. Mktg.
Rajput A K 66 Senior V.P. - Corporate Affairs 3,76,98,449 1,49,46,402 B.Com., M.B.A. 45 10.04.1976 Nil
Satpathy S 49 Divisional Chief Executive (PCPBD) 3,54,52,519 1,52,76,929 B.Com., P.G.D.M. 26 01.12.2015 Marico Ltd., Chief Marketing Officer
Malik H 56 Divisional Chief Executive (FBD) 3,36,25,691 1,34,54,228 B.A., M.B.A. 32 01.06.1989 Nil
Lahiri D 49 Chief Operating Officer (ITD) 3,29,79,538 1,48,10,530 B.Com. (Hons.), M.B.A. 25 10.12.2020 VST Industries, M.D.
Singh S K 65 Group Head - Paper & Packaging 3,19,33,647 1,52,65,597 B.Tech. (Chem.) 45 21.06.1977 #
Other employees employed throughout the year and in receipt of remuneration aggregating ` 1,02,00,000/- or more per annum
Abraham C 58 Chief Executive - Healthcare 2,48,73,313 1,31,66,521 M.B.B.S., Adv. Dip. in Healthcare 28 02.05.2018 Health City Cayman Islands, CEO
Administration & Head of Medical Services
Aggarwal A 41 Corporate HR Manager 1,28,91,217 64,48,091 B.Tech., P.G.Dip. in P.M. & I.R. 18 15.03.2017 HCL Healthcare, G.M. - HR
Aiyer K 48 Head of Finance (Operations) (ITD) 1,45,60,407 75,48,320 B.Com. (Hons.), A.C.A. 24 01.09.1998 Modi Telstra Pvt. Ltd.,
Mgmt. Trainee
Amancharla VG 40 Marketing Manager (ESPB - SBU) 1,07,43,387 53,80,441 B.E., P.G.D.M. 18 07.06.2007 ABB Ltd., Marketing Engineer

Anandan M 51 National Sales & Category Development 1,85,46,063 88,02,514 P.G.D.M. 29 01.02.1994 Threads India Limited,
Manager - Personal Care, Matches & Sales Representative
Agarbatti (TM & D)
Arif N 60 Executive V.P. & Head - Corporate 2,93,81,702 1,15,63,741 B.A. (Hons.), M.A. 36 01.09.2006 Indian Chamber of Commerce,
Communications Secretary General
Arora B 48 V.P. - Finance (FBD) 1,55,01,970 71,93,085 B.Com. (Hons.), A.C.A. 28 06.09.1999 Maruti Udyog Ltd., Finance
Executive
Ashok D 58 Head - Corporate Taxation 2,10,04,008 78,50,704 B.Com., A.C.S., F.C.M.A. 37 01.08.1992 UB Petro Products Ltd.,
Dy. Manager, Accounts
Awasthi J 55 General Manager - Special Projects 1,21,24,658 56,88,189 B.E. (Hons.), P.G.D.M. 33 01.03.1993 Network Ltd., Field Manager
Bagla M K 43 District Manager - West (TM & D) 1,06,51,042 50,61,366 B.Com. (Hons.), M.B.A. 23 11.02.2008 Bunge India Pvt. Ltd.,
Brands Manager
Bajaj K 49 Executive V.P. - Marketing (ITD) 2,25,61,382 99,25,309 B.A. (Hons.), M.B.A. 27 16.03.2011 Bharti Retail Ltd., Head - Brands
Balaji L N 60 Executive V.P. - Shared Services 1,69,42,491 71,79,495 B.Com., F.C.A. 37 17.06.1985 Nil
Balakrishnan S 55 Head - Manufacturing & Supply Chain (PCPBD) 1,77,65,203 81,41,727 B.E. 34 01.09.1987 Nil
Balar S 47 V.P. - Marketing (PCPBD) 1,95,50,312 88,69,430 B.Tech., P.G.D.M. 21 01.06.2000 Nil
Bandyopadhyay S S 52 Executive V.P. - HR & CSR (PSPD) 1,75,08,456 95,75,827 B.Com., P.G.D.P.M., I.R. & L.W., M.B.A., 26 12.12.2006 Pepsico India Holdings Pvt. Ltd.,
Dip. in T&D Asst. Manager - HR
Banerjee S 45 Chief Digital Marketing Officer (FBD) 1,85,89,021 1,11,76,845 B.E., M.B.A. 22 01.06.2009 IMRB International,
Insights Director
Bansal A 37 Divisional Manager - Sales & Category 1,13,92,245 56,45,803 M.B.A. 15 10.06.2008 TATA Consultancy Services,
Development, Foods (TM & D) Systems Consultant
Bansal R 44 Manager - Internal Audit 1,36,51,794 74,50,664 B.Com., A.C.A., I.C.S.I. 23 22.01.2007 Bharat Oman Refineries Ltd.,
Asst. Mgr. Finance
Bansal R K 49 Executive V.P. - Finance (TM & D) 1,81,42,555 86,03,521 B.Com. (Hons.), C.W.A., A.C.A. 26 01.11.1995 Nil
Barhanpurkar M P 57 Head - Technical (PSPD) 1,30,27,019 71,57,742 B.E. 28 01.01.2004 Abhishek Industries Ltd.,
Manager Engineering
Barve M M 51 Head - Product Development, Chocolates (FBD) 1,62,63,266 93,32,661 B.Sc., M.Sc. (Food Tech.), E.M.B.A. 26 27.07.2015 Pepsico India Holdings Pvt. Ltd.,
Associate Director
Basu N 52 Sr. Manager - Corporate Communications 1,36,32,013 79,05,511 B.A., M.A. 17 01.01.2008 United Credit Belani Group, V.P.
Bezbaroa S K 59 Executive V.P. - Corporate EHS 1,82,80,297 93,71,533 B.E. (Elec.), P.G.D. (Safety Engg.), 39 02.06.1997 Tata Consulting Engineers Ltd.,
P.G.D. (Environmental Mgmt., Univ. Engineer
of London)
Bhalla A 54 A. M. West & G. M. - ITC Maratha (HD) 1,08,19,142 45,87,117 B.A., Dip. in Hotel Mgmt., Catering & 31 09.02.1998 Holiday Inn, Restaurant Manager
Nutrition
Bhalla R 38 V.P. - New Business Development 1,32,49,324 64,28,527 B.Tech., M.Tech. 16 08.06.2006 Nil
Bhaskar James P (Dr.) 55 Senior Principal Scientist (PCPBD) 1,10,56,406 51,90,166 M.Sc., Ph.D. 27 27.08.2008 Hindustan Unilever Ltd.,
Senior Research Scientist
Bhatt S 53 Divisional Manager - Exports (FBD) 1,28,09,792 62,69,594 B.Sc., P.G. Dip. in Marketing 33 01.10.1997 Pertech Computers Ltd.,
Regional Sales Mgr.
Bhattacharjee A 58 V.P. - Information Systems (HD) 1,22,81,050 54,96,460 B.E. (Industrial & Production) 33 09.07.2001 @
Bhaumick D 42 Marketing Manager - Vivel & Superia (PCPBD) 1,02,42,012 51,88,269 B.Sc., P.G.D. 19 22.06.2009 Parle Agro Pvt. Ltd.,
Group Product Manager
Bisht S 44 Business Head - Spices & 1,08,81,585 57,68,080 B.Sc. (Ag.), P.G. Prog. in Agr. Business 21 01.06.2001 Nil
Aqua - Agri SBU (ABD) Mgmt.
Bose S 53 Executive V.P. - HR & Learning & 2,04,58,002 1,08,68,784 B.A., P.G. Dip. in P.M. 27 28.09.2017 Indian Hotels Co. Ltd.,
Development (HD) V.P. HR Operations

ITC Limited REPORT AND ACCOUNTS 2022 137

B. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Name Age Designation Gross Net Qualifications Expe- Date of Previous Employment and
Remuneration Remuneration rience Commence- Position Held
(`) (`) (Years) ment of
Employment
1 2 3 4 5 6 7 8 9
Bothra S 37 Trade Marketing Development Manager (TM & D) 1,03,31,975 61,05,044 B.B.A., P.G.D.M. 14 10.06.2008 Nil
Chadha A 52 Chief Executive (HD) 1,73,12,770 87,00,377 Dip. In Hotel Mgmt., Catering & Nutrition 32 01.05.2001 @
Chakrabarty B 46 Divisional Manager - Packaging Development (FBD) 1,06,64,076 67,43,025 B.Sc., P.G. Dip. 22 12.07.2005 Bharat Shell Ltd.,
Executive - Packaging
Chand S 38 Divisional Manager - Sales & Category 1,21,68,814 65,83,133 B.E., M.B.A. 16 21.04.2008 Marico Ltd., Area Sales Manager
Development, Cigarettes (TM & D)
Chatterjee K 61 Head - Packaging Development (FBD) 1,45,15,151 68,28,111 Dip. in Mech. Engg. 36 15.10.2001 Agrotech Foods Ltd., Manager -
Packaging & Development
Chatterjee S 53 V.P. & Head of Procurement (FBD) 1,92,97,985 1,09,15,287 B.A. 34 05.06.2006 Nestle India Ltd., Purchase
Manager
Chaturvedi K 44 Chief Operating Officer - Snacks (FBD) 2,20,56,565 94,76,080 B.A. (Hons.), P.G. Dip. in 20 19.05.2003 Mindshare Fulcrum, Planning
Communication Executive
Cheruvathur N 50 Divisional Manager - Supply Chain (PCPBD) 1,02,80,019 51,09,499 B.Sc. (Technology) 26 18.06.2007 Marico Ltd., Operations Manager
Chhaproo J T 48 Head of Media (PCPBD) 1,37,39,736 67,74,953 B.Tech., P.G.D.M. 13 08.08.2016 Snapdeal, Head - Media
Choudhury S 46 Head - Finance - Agri SBU (ABD) 1,16,07,237 62,03,943 B.Com. (Hons.), A.C.A. 23 27.09.1999 Nil
Das S K (Dr.) 55 Principal Scientist (PCPBD) 1,04,55,922 63,11,095 M.Sc., Ph.D. 23 20.11.2008 Hindustan Unilever Ltd.,
Senior Research Scientist
Dasgupta K 45 Head of Marketing - Dairy & Juices (FBD) 2,15,66,187 1,01,20,951 B.Sc. (Hons.), P.G.D.C., P.G.D.M. 20 03.01.2020 Hindustan Unilever Ltd.,
G.M. Foods
Datta S 59 Head - Marketing Research (ITD) 1,08,16,141 51,03,451 B.Tech., P.G.D.M. 34 01.11.1994 Smithkline Beecham,
Marketing Services Manager
David M I 57 V.P. - Exports - Tobacco SBU (ABD) 1,37,65,975 71,20,669 M.Sc. (Agriculture) 33 16.12.1988 Nil
Dharmendra V B (Dr.) 46 Head - Food Sciences (FBD) 2,64,59,924 1,52,47,372 B.Tech., M.Tech., M.S., Ph.D. 24 05.03.2020 E & J Gallo Winery,
Applied Technology Director
Dixit P K 61 V.P. - T & RA (ITD) 2,11,01,021 90,20,861 B.Sc. (Hons.) 38 17.10.1983 Nil
Dogra M 47 Head - Strategic Planning 1,39,46,735 67,81,191 B.Com., A.C.A., M.B.A. 22 01.11.2004 Export Import Bank of India,
Management Trainee
Dogra R 47 Head - Alternate Channels (TM & D) 1,91,85,959 91,64,348 B.Tech., M.I.B. 22 01.06.2001 J.C.T. Electronics Ltd.,
Engg. Executive
Dutta Supratim 55 Chief Financial Officer 2,92,81,813 1,05,79,094 B.Com. (Hons.), C.W.A., A.C.A. 31 01.11.1990 Nil
Ganesan M 59 Head - Corporate Internal Audit 2,81,89,753 1,17,36,191 B.Com., A.C.A., A.C.S. 36 01.03.1986 Nil
Ganesh Kumar S 54 SBU Chief Executive – Staples, Snacks & 2,97,61,445 1,27,12,902 B.E. 31 14.12.1991 Mather and Platt (I) Limited,
Meals (FBD) Engg. Trainee
Garg A S 53 V.P. - Finance & MIS (PPB - SBU) 1,43,70,634 69,06,070 B.Com., I.C.W.A., A.C.A., Fellowship in 30 01.06.1992 Larsen & Toubro,
Management Chartered Accountant
Ghosal N 47 General Manager - Operations (ITD) 1,46,13,560 70,29,057 B.Tech., P.G.D.M. 23 01.06.1999 Nil
Ghosh A 44 Divisional Manager - Digital Media (FBD) 1,12,72,629 70,00,082 B.Sc., M.B.A. 13 26.07.2017 PHD Media, Digital Strategic Lead
Gohil M 42 Head Supply Chain & Operations (ESPB - SBU) 1,23,34,571 60,37,425 B.Tech., P.G.D.I.E. 18 08.06.2006 Reliance Industries Ltd.,
Asst. Manager
Gouraha R 41 V.P. - New Business Development (ABD) 1,69,52,699 1,00,05,950 B.Tech. 18 04.06.2004 Nil
Gupta J 39 Head of Manufacturing - Staples (FBD) 1,63,52,369 77,98,013 B.Tech. 17 01.09.2016 Hindustan Unilever Ltd.,
Factory Manager
Gupta V 57 SBU Chief Executive (ESPB - SBU) 2,23,36,996 1,16,63,443 B.E., P.G.D.M. 31 09.01.2017 Cello (Writing) Group of
Companies, C.E.O.
Handa M 43 V.P. - Marketing (PCPBD) 1,94,80,809 1,21,16,941 B.E., P.G.D. 17 22.07.2019 Marico Ltd., Head of Marketing
Janardanan Anand P 56 Executive V.P. - HR (FBD) 2,09,87,467 98,11,926 B.Com. (Hons.), P.G. Dip. in P.M. & I.R. 31 01.06.1990 Nil
Jasper N K 52 Executive V.P. - Finance & IT (FBD) 2,11,30,771 99,32,092 B.Com. (Hons.), A.C.M.A., A.C.A. 29 25.06.1993 A.F. Ferguson, Asst. Consultant
Jhingran R 44 Head - HR (PCPBD) 1,56,80,013 88,57,528 B.Sc. (Pharmacy), P.G.D.M. 18 04.06.2004 Nil
John R 53 Executive V.P. - Technical (ITD) 1,83,66,767 85,60,921 B.Tech. 30 03.03.2006 Wings Corporation (Indonesia),
Operations Director - Nigerian
Operations
Joshi K K 51 Head - Regulatory Affairs (FBD) 1,18,43,326 58,01,159 B.Sc., M.Sc. 27 25.05.2012 Nestle India Ltd., Food Regulatory
Affairs Mgr.
Kalsi G (Dr.) 57 Senior Principal Scientist - Health & 1,34,86,425 49,40,134 B.Sc., M.Sc., Ph.D. 28 03.03.2008 University of California,
Wellbeing (LS & T) Resch. Associate & Lab. Mgr.
Kanisetti V K 45 Financial Accountant (ABD) 1,02,97,193 57,39,070 B.Com., A.C.A. 23 23.05.2005 TATA Coffee Ltd., Asst. Manager
Kar B 57 Head - Projects Audit 1,07,02,185 63,05,675 B.E. (Civil) 32 05.02.2007 PD Hinduja National Hospital,
Asst. Director (Project & Engg.)
Kar S 49 V.P. - Finance (PSPD) 1,38,86,688 71,00,196 B.Com., C.W.A., A.C.A., A.C.S. 26 06.09.1999 Deloitte Haskins & Sells,
Asst. Mgr.
Karthik B 49 V.P. - Corporate Finance 1,75,48,875 79,10,198 B.Com. (Hons.), C.W.A., Advanced Dip. 26 07.05.2007 Tionale Pte Ltd., G.M. - Business
in Systems Mgmt., A.C.S., A.C.A., C.P.A. Development
Kathuria S 36 Marketing Manager, Biscuits (FBD) 1,14,74,039 56,60,301 B.Com., M.B.A. 14 10.06.2008 Nil
Kaul S 55 Divisional Chief Executive (ITD) 3,13,32,892 1,25,50,662 B.E., P.G.D.M. 31 01.06.1990 Nil
Kaushik N 39 Marketing Manager Development (ITD) 1,13,75,330 56,35,315 B.Tech., M.B.A. 16 07.01.2008 Satyam Computer Services Ltd.,
Software Engineer
Khan K H 40 Head - Bulk Commodities - Agri SBU (ABD) 1,06,85,696 58,54,678 B.Tech. (Hons.), M.B.A. 16 08.06.2006 Nil

138 ITC Limited REPORT AND ACCOUNTS 2022

B. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Name Age Designation Gross Net Qualifications Expe- Date of Previous Employment and
Remuneration Remuneration rience Commence- Position Held
(`) (`) (Years) ment of
Employment
1 2 3 4 5 6 7 8 9
Khosla V 55 District Manager - South (TM & D) 1,62,40,882 78,28,478 B.A. (Hons.), M.B.A. 31 01.07.2001 Indian Army, Captain
Kishore A 47 Head, COE - Digital & Analytics (TM & D) 1,58,87,463 76,11,002 B.Tech., P.G.D.M. 26 15.05.2006 Gillete India Ltd., Regional Value
Chain Manager
Kookkal V 40 Head of Marketing - Staples & Meals (FBD) 1,31,76,950 81,39,048 B.Tech., P.G. Dip. in Marketing 16 08.06.2006 Nil
Kulkarni V 47 Divisional Chief Executive (PSPD) 2,37,25,730 1,18,81,196 B.Tech. 25 23.07.2001 Agrotech Foods Ltd., Unit
In-charge
Kumar Amit 43 Divisional Manager - Supply Chain (TM & D) 1,14,05,817 56,84,244 B.Tech., P.G.D.M. 17 04.03.2020 Pepsico India, Associate Director
Kumar Ashit 56 Executive V.P. - Finance & MIS (ABD) 1,85,11,324 98,94,190 B.Com., A.C.A. 33 01.12.1988 Nil
Kumar Ashwani 58 Chief Technologist - Packaging & Graphics 1,54,95,891 70,51,113 B.Sc., M.B.A. 36 01.07.1990 Uptron India Ltd., Planning &
Design (ITD) Advertising Manager
Kumar Atul 58 V.P. - Finance (HD) 1,15,92,024 57,25,384 B.Com. (Hons.), A.C.A. 34 01.06.1988 @
Kumar G K 56 V.P. - Leaf Operations, Tobacco SBU (ABD) 1,67,90,449 84,64,731 B.Sc. (Agriculture) 34 01.08.1987 Nil
Kumar K 50 Sr. Principal Technologist (PCPBD) 1,39,54,409 67,11,942 B.Com., A.C.A. 25 22.10.2008 Ruchi Soya Industries Ltd., Deputy
G.M., Commercial
Kumar T S 51 National Sales & Category Development 1,75,37,802 84,71,220 B.Sc. 29 01.04.1995 E.I.D. Parry (I) Ltd., Sales
Manager - Foods (TM & D) Representative
Kunchey J K 47 Executive V.P. - Supply Chain & Logistics 2,14,14,925 95,61,797 B.Tech., P.G. Dip. in I.E. 24 24.08.2007 Reliance Retail Co., Head -
(TM & D) Planning & Logistics
Lamba M 41 Head of Marketing - Confectionery, Chocolates, 1,30,87,955 65,32,337 B.Com., P.G.P.C.M. 18 15.03.2017 Perfetti Van Melle India Pvt. Ltd.,
Coffee & Gums (FBD) Associate Category Director
Makhal S 46 Divisional Manager - Product Development, 1,03,27,022 52,13,406 B.Tech., M.Tech., P.G.D., Ph.D. 17 10.12.2012 Cavincare Pvt. Ltd., Principal
Dairy (FBD) Scientist
Manian V 40 Head of Accounts - Central Projects Organisation 1,03,99,082 51,50,479 B.Com. (Hons.), F.C.A. 18 11.12.2006 B.S.R. & Co., Executive
Manimaran G U 45 Divisional Manager - Product Development (FBD) 1,09,93,882 67,39,922 B.Tech. 23 26.09.2005 Perfetti Van Melle India Pvt. Ltd.,
QA Executive
Mathew T 47 V.P. - Talent Development, Corporate HR 1,50,98,681 74,11,614 Dip. in H.M.C.T. & A.N., B.B.A., M.A. 24 25.06.2001 Marico Industries Ltd., Mgmt.
Trainee
Mathur A 40 Head of Manufacturing - Biscuits & Cakes (FBD) 1,26,71,396 61,54,005 B.Tech. 17 08.06.2005 Nil
Mehrotra A 42 Divisional Manager - Sales & Category 1,35,62,656 66,67,562 B.Tech., M.B.A. 17 08.06.2006 Seaarland Management Services
Development, Foods (TM & D) (I) Pvt. Ltd., Junior Engineer
Mehta R R 61 Senior Associate General Counsel 1,25,17,900 59,67,274 B.Com. (Hons.), LL.B., LL.M., LL.M. 37 10.06.1994 Legal Practitioner
(Criminal Law), M.S. (Wis.), Ph.D.
Menon V P 56 V.P. - Projects (HD) 1,19,86,591 61,24,815 B.Tech. (Civil) 33 10.01.1993 @
Mishra P 40 Business Head - Sunrise (FBD) 1,30,83,646 71,93,292 M.B.A. 17 08.06.2005 Pepsico India, Customer Executive
Moodliar A 56 V.P. - Marketing (HD) 1,21,29,740 60,84,571 B.Com., M.B.A. 32 15.10.1993 @
Moza N 41 Divisional Manager - HR (FBD) 1,08,93,476 53,95,743 B.Com., Dip. in I.H.M., M.A. in P.M. 17 06.08.2013 Peel Works Outsourcing Pvt. Ltd.,
& I.R. GM - Accounts & Delivery
Mukherjee S (Dr.) 56 Chief Scientist and Head R&D (ITD) 1,87,79,817 1,11,06,566 B.Sc., M.Sc., Ph.D., Post Doctorate 26 16.03.1998 ICI India Ltd., Manager Q.A.
Mukherji A 49 Head - Corporate Human Resources 2,73,72,580 1,18,70,522 B.A., P.G. Dip. in P.M. & I.R., M.I.L.R. 26 01.08.1995 ANZ Grindlays Bank,
Mgmt. Trainee
Muralidharan M 52 Works Manager (PPB - SBU) 1,04,10,121 57,33,562 B.E. 29 07.03.1997 Contemporary Packaging
Technologies Ltd., Engineering
Executive
Naik P V (Dr.) 47 Principal Scientist - Ingredients & Submission 1,14,78,014 56,53,906 B.Sc., M.Sc., Doctorate 21 22.12.2010 E I D Parry (India) Ltd., Head of
(ITD) Parry Life Sciences
Nair J 50 Divisional Manager - Engineering (ITD) 1,10,85,076 53,40,867 B.Tech., M.S. 29 14.11.2005 Cadbury India Ltd., Factory Asset
Manager & EHS Manager
Narayanan R R 56 Head - Sales & Marketing (ESPB - SBU) 1,67,82,994 78,06,622 B.A., P.G.D.M. 35 01.01.1990 Godrej & Boyce Mfg. Co. Ltd.,
Sales Representative
Nengminthang J 37 Divisional Manager - Manufacturing Operations 1,22,00,039 66,57,014 B.Tech. 15 10.10.2019 Pepsico India Holdings Pvt. Ltd.,
(PCPBD) Productivity, Continuous
Improvement & LSS Head /
Factory Manager
Ohri R 55 V.P. - Corporate Affairs 1,54,63,054 81,95,400 B.Com. (Hons.), A.C.A. 31 01.09.1991 Nil
Pal Singh S 60 Chief Scientist - Technico - Agri SBU (ABD) 1,14,27,898 66,03,304 M.Sc. (Agronomy) 10 01.04.2012 Russel Credit Ltd., G.M. Agronomy
Panda Swarup 55 Executive V.P.- HR (ITD) 1,89,69,581 1,10,51,558 B.Sc. (Hons.), M.A. 32 01.09.2003 J K Papers Ltd., Mgmt. Trainee
Pandey S K 55 V.P. (PSPD) 1,29,75,831 72,78,601 B.Tech., M.Tech., I.F.S. Diploma in 31 20.02.2014 Ballarpur Industries Ltd., V. P.
Bamboo Tech.
Patni V 38 Head Procurement (PCPBD) 1,26,01,696 73,35,654 B.Tech., P.G.D.I.E. 16 19.05.2008 Glenmark Pharmaceuticals Ltd.,
Asst. Manager - Supply Chain
Paul A E 57 Asst. V.P. - Corporate Affairs 1,21,89,024 54,78,074 B.Com. 36 01.08.1986 Nil
Phakey A 52 V.P. - Frozen Snacks and Fresh F & V (FBD) 1,94,95,635 1,13,66,750 B.Com., M.B.A. 29 25.03.2019 H.T. Media Ltd., C.O.O.
Ponnuru R K 38 Category Manager - Juices & Dairy (FBD) 1,77,24,883 84,01,557 B.Tech. 18 04.06.2004 Nil
Prabhakar L 56 Executive V.P. & Head - Social Investments 1,83,19,130 1,01,38,518 B.E. (Mech.), P.G. Dip. in P.M. & I.R. 34 01.05.2006 ITC Infotech India Ltd., G.M. - HR
Puri Sudhir 45 Head - New Generation Products (ITD) 1,71,34,127 81,55,545 B.Tech. 23 01.06.1998 Nil
Rai R K 59 Divisional Chief Executive & 2,66,82,659 1,38,94,598 B.A. (Mktg.), P.G.D. in Exports & 39 16.08.1990 Britannia Industries Ltd.,
SBU Chief Executive - Agri Business SBU (ABD) Imports Commercial Officer

ITC Limited REPORT AND ACCOUNTS 2022 139

B. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Name Age Designation Gross Net Qualifications Expe- Date of Previous Employment and
Remuneration Remuneration rience Commence- Position Held
(`) (`) (Years) ment of
Employment
1 2 3 4 5 6 7 8 9
Ralhan R 42 District Manager - North (TM & D) 1,43,77,641 77,00,377 B.E., M.M.S. 19 04.06.2004 Kirloskar Oil Engines Ltd.,
Graduate Engr. Trainee
Rama Prasad H N 56 SBU Chief Executive - Tobacco SBU (ABD) 1,95,89,229 91,48,164 B.Sc. (Agriculture), M.Sc. (Agriculture) 33 26.09.1988 Nil
Ramamurthi S (Dr.) 57 Chief Scientist & Head of Corporate 1,62,09,085 94,15,239 B.Sc., M.Sc. (Tech.), Ph.D. 28 27.08.2007 Hindustan Unilever Ltd.,
R&D (LS & T) Sr. Research Scientist
Ramesh V 56 Category Manufacturing Manager - Biscuits (FBD) 1,13,20,790 56,48,478 B.Sc., M.Sc. 34 11.09.2017 Britannia Industries Ltd., Regional
Manufacturing Head, South
Ramkumar P 51 Head - Finance (ESPB) 1,41,39,668 68,11,084 B.Com., I.C.W.A., A.C.A. 28 06.09.1999 Zuari Industries Ltd.,
Dy. Mgr. - Finance
Ranganathan S 47 V.P. - Finance (FBD) 1,52,48,536 75,25,249 B.Com. (Hons.), A.C.A. 24 01.09.1998 Phillips India Ltd.,
Accounts Officer
Rangrass S 61 Group Head - LS & T, Central Projects, EHS & 2,79,36,331 1,23,00,517 B.Tech. 39 01.07.1982 Nil
Quality Assurance
Rao K N 54 V.P. - Processing & Technology, Supply Chain (ABD) 1,08,04,788 55,92,347 B.Tech. (E.E.E.) 33 24.10.1988 Nil
Rao Renati V 52 Divisional Manager - Exports (ITD) 1,24,13,579 62,67,784 B.Sc. (Hons.), P.G.D.M. 28 01.04.1995 Wipro Ltd., Marketing Asst.
Rasquinha P C 57 Executive V.P. - Finance & MIS (PSPD) 1,50,70,636 85,68,489 B.Com. (Hons.), A.C.A., C.W.A. 34 15.07.1991 A.F. Ferguson & Co.,
Asst. Consultant
Ray Chaudhuri B 42 Head - Corporate Planning 1,56,38,713 73,79,524 B.Com. (Hons.), A.C.A. 20 01.03.2002 Nil
Ray M 43 District Manager - East (TM & D) 1,10,51,972 67,22,807 B.Tech. 21 01.06.2001 Nil
Ray P 47 Divisional Manager - Supply Chain (TM & D) 1,16,26,732 68,31,331 B.Com., M.Com., P.G.D.M. 22 16.02.2001 Hindustan Lever Ltd., T.S.I.
Reddy K V 56 V.P. - Product Development - Atta, Spices & 1,90,92,198 1,05,96,088 B.Tech. 32 01.08.2001 Cargill India Pvt. Ltd.,
Noodles (FBD) Production Manager
Roy A 56 Executive V.P. - Corporate Finance 1,87,96,713 82,17,254 B.Com. (Hons.), A.C.A. 33 04.06.1990 E.L.M. (I) Ltd., Accounts Officer
Rustagi A K 47 Chief Operating Officer - Chocolates, Coffee, 2,78,02,998 1,21,88,267 B.Tech., P.G.P.M. 25 01.10.2017 Unilever Inc. (London),
Confectionery & New Category Development Global Brand Director
(FBD)
Sahay S 51 Head of Sales Operations & Development 1,97,44,729 95,18,515 B.A., P.G.D.B.A. 27 05.09.2002 Luxor Writing Instruments Ltd.,
(TM & D) Brand Manager
Salunkhe D J 48 Chief Executive (PPB - SBU) 1,68,15,223 75,02,609 B.E., M.B.A. 17 21.03.2019 3M India Ltd., Sr. G.M., Ops &
Cont. Imp.
Sandeep C 51 Executive V.P. & Head - Central Projects 1,61,20,197 98,79,190 B.E. 30 24.05.1999 Kar Mobiles Ltd.,
Organisation Production Engineer
Sanganeria G 45 Corporate Accountant 1,48,11,907 82,81,253 B.Com. (Hons.), A.C.S., A.C.A. 21 11.12.2000 Nil
Sangli D K A 47 Senior Principal Technologist - Tobacco Flavours 1,08,15,585 68,78,666 B.Sc., M.Sc. 26 06.08.1996 Nil
(ITD)
Sarda S 48 Divisional Manager - Finance & Planning (ITD) 1,09,24,734 59,40,461 B.Com., A.C.A. 22 01.03.2007 Videocon Industries Ltd., Manager
Sawant S J 50 Business Development Manager - Frozen Snacks 1,19,54,866 71,59,162 B.Com., P.G.D.M. 22 01.10.2018 OSI Vista Foods Ltd.,
(FBD) Director Commercial
Seksaria S 49 Group Manager - Taxation 1,08,34,588 64,30,448 Dip. In Business Finance, A.C.S., 24 01.09.1998 CESC Ltd., Mgmt. Trainee
I.C.W.A., A.C.A.
Senthil Kumaran S J 47 Group Category Finance Manager - Biscuits & 1,25,01,358 61,16,931 B.Com. (Hons.), C.W.A., A.C.A. 23 09.07.1999 L.M.W. Ltd., Audit Officer
Cakes (FBD)
Sequeira S 48 Head - Finance & IT (PCPBD) 1,45,23,503 70,01,213 B.Com. (Hons.), A.C.A. 24 01.09.1998 Berger Paints, Asst. Manager
Shankar K 41 Marketing Manager (ITD) 1,04,55,360 60,63,751 B.Tech., P.G.D.M. 17 25.09.2018 Godfrey Philips India Ltd.,
Group Brand Manager
Shanmuga Sundaram A 55 General Counsel and Head of Corporate Legal 2,68,93,476 1,20,40,771 B.L., M.L. 33 20.10.1997 Maxworth Home Ltd.,
Manager, Legal
Shenoy T S M 54 Executive V.P. & Head - Corporate Accounts 2,02,91,291 97,75,758 B.Com. (Hons.), A.C.A. 34 03.08.1992 A.F. Ferguson & Co.,
Mgmt. Consultant
Shere A H 45 Chief Operating Officer - Biscuits & Cakes (FBD) 2,94,31,255 1,71,10,861 B.A., M.B.A. 24 21.08.2019 Britannia Industries Ltd.,
Director Marketing
Shukla M 50 Branch Manager (ITD) 1,05,30,631 59,11,714 B.Tech. 30 01.08.2000 Pepsico Holdings Ltd.,
Shift Engineer
Singal S 51 Chief Operating Officer - Dairy & Beverages (FBD) 2,08,53,439 97,70,736 B.Sc., P.G.D.M. 26 01.07.2016 Dabur India Ltd.,
Head of Marketing
Singh A P 39 Head of Marketing - Snacks, Noodles & Pasta 1,16,09,541 57,19,989 B.Tech., P.G.D.M. 14 05.05.2008 Nil
(FBD)
Singh J 56 Corporate Financial Controller 2,07,47,931 99,23,164 B.Com. (Hons.), A.C.A. 34 01.04.1990 Lovelock & Lewes, Jr. Asst.

Singh V P 41 Divisional Manager, Employee Relations (FBD) 1,14,14,243 57,10,748 B.A. (Hons.), P.G.D.M. 18 18.07.2007 TATA Motors Ltd., HR Manager

Singhi R K 57 Executive V.P. and Company Secretary 2,03,76,591 1,05,34,462 B.Com. (Hons.), LL.B., F.C.S. 37 01.08.1988 Chemcrown (I) Ltd.,
Asst. Secretary
Sipani S K 55 Head of Finance, Matches & Agarbatti SBU 1,20,04,536 57,40,643 B.Com., A.C.A., A.C.S., P.G.D.B.M. 33 01.10.1997 All India Tobacco Co. Ltd.,
Company Secretary
Sood A 38 Head of Manufacturing, Chocolates, Coffee & 1,08,40,261 55,02,506 B.Tech. 16 17.06.2013 Asian Paints Ltd.,
Confectionery (FBD) Manager - Production

140 ITC Limited REPORT AND ACCOUNTS 2022

B. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Name Age Designation Gross Net Qualifications Expe- Date of Previous Employment and
Remuneration Remuneration rience Commence- Position Held
(`) (`) (Years) ment of
Employment
1 2 3 4 5 6 7 8 9
Srinivas K 57 Chief Technologist - Blending & Cigarette 1,59,34,981 76,37,947 B.Sc., M.Sc. 34 22.08.1988 Nil
Design (ITD)
Srinivas S 48 V.P. - Marketing (PCPBD) 1,89,45,590 89,27,068 B.E., P.G.D.M. 24 01.06.2000 Computational Structural
Mechanics Pvt. Ltd.,
Marketing Executive
Srinivasan V P 49 Sr. Principal Technologist - PMD Process 1,37,89,578 67,19,818 Diploma in Mech. Engg., B.S. (Engg. 29 23.02.1999 Union Carbide, Officer
Development (ITD) Technology)
Stephanos K G 57 Executive V.P. - Finance, MIS & T&RA (ITD) 1,99,63,434 92,02,848 B.Com. (Hons.), A.C.A. 34 01.07.1988 PricewaterhouseCoopers Pvt. Ltd.,
Jr. Officer
Subramanian V 50 Divisional Manager - Projects, EHS & 1,14,05,278 55,20,397 B.E. 28 06.10.2006 Asian Paints Ltd., Manager
OCM (PCPBD)
Sule S 56 Divisional Chief Executive (TM & D) 2,95,38,977 1,25,95,280 B.Com., M.I.B. 32 16.07.1990 Bayer India Ltd., Management
Trainee
Suryavanshi R 44 Head - Competency Development & HR (TM & D) 1,30,73,589 64,51,978 B.M.S., P.G.D.M. 20 16.07.2003 Gabriel India Ltd., Mgmt Trainee
Tandan S 62 On deputation 2,02,09,398 89,50,230 B.A. (Hons.), A.C.A. 36 01.10.1985 Nil

Tayal G 41 SBU Chief Executive - Matches & Agarbatti SBU 1,93,65,607 92,43,930 B.Tech. 19 09.06.2003 Nil
Thakar A 55 Executive V.P. - Finance, IT & Procurement (HD) 1,83,01,292 81,89,461 B.Com. (Hons.), A.C.A., M.B.A. 29 30.06.1992 Nil
Thakur N N 58 National Sales & Category Development 1,51,58,898 73,23,230 B.Sc., P.G.D.M. 35 01.09.1987 Nil
Manager - Cigarettes (TM & D)
Tunuguntla M R 41 Divisional Manager Finance (FBD) 1,08,45,929 51,77,529 B.Com., M.Com., A.C.A., D.I.R.M. 20 04.05.2005 Chemplast Sanmar Ltd.,
Asst. Executive Manager
Umesh K S 63 Chief Manager - Corporate Affairs 1,04,91,082 63,05,918 B.A., M.S.W. 23 16.04.2001 Hotel Leelaventure Ltd.,
Manager HRD
Vashistha S 36 Marketing Manager, Snacks (FBD) 1,10,10,270 54,45,751 B.Tech., P.G.D. 14 10.06.2008 Nil
Veeraswamy P 49 Head - HR (ABD) 1,19,43,701 63,66,451 B.Com., M.A. 24 19.12.2013 Creamline Dairy Products Ltd.,
General Manager - HR
Veerubhotla V P 42 Divisional Manager - Market Research (FBD) 1,21,11,045 58,49,692 B.Sc., M.Sc. (Statistics) 19 31.05.2012 Nielsen Bases, Manager
Venkataraman S N 58 Divisional Head - Marketing (PSPD) 1,79,85,250 1,02,26,785 B.Sc., M.B.A. 37 29.06.1985 Nil
Venneti S P Rao 55 Divisional Head - Marketing (PSPD) 1,24,31,152 68,27,652 B.E., P.G.D. 23 20.06.2011 Century Pulp & Paper, President
Verma A 39 ICML Head (FBD) 1,03,42,555 58,85,506 B.Tech. 17 23.08.2010 Nestle India Ltd., Project Manager
Vijayakrishnan V (Dr.) 55 Chief Scientist & Head - Product Development 2,15,74,637 90,24,531 B.Sc., M.Sc., Ph.D. 26 02.05.2017 Unilever Inc., Global R & D -
and R&D (PCPBD) Design Director
Vikram R 51 Sr. Associate General Counsel 1,10,39,172 69,25,668 B.A., LL.B. 27 18.07.2005 M/s. Janardana &
Janardana, Partner
Vinayaka H C 58 V.P. - Technical Services & EHS (HD) 1,22,83,146 59,32,449 B.E. (Mech.) 34 23.05.2001 @
Wali P 52 Executive V.P. - New Business Development 1,48,68,556 69,79,015 B.Tech., Ph.D. Fellowship in 31 16.08.1991 Nil
Management
Wariah D S 55 Head - Product Development - Snacks (FBD) 1,65,05,676 91,42,761 B.E. 32 05.04.2005 Pepsico India Holdings Pvt.
Ltd., G.M.
Yadav S M 52 V.P. - Technology & Manufacturing (FBD) 2,11,56,316 96,84,720 B.E., Dip. in International Business 31 24.08.2016 Mondelez International,
Associate Director - Asia Pacific
(Engineering)
Other employees employed for a part of the year and in receipt of remuneration aggregating ` 8,50,000/- or more per month
Agrawal A 38 Divisional Manager - E-Commerce (TM & D) 84,35,389 55,03,260 B.Tech., P.G.D. 16 08.06.2006 Nil
Ambasta A (Dr.) 63 Executive V.P. & Head - Social Investments 2,03,04,856 1,07,42,368 M.A., M.Phil., Ph.D. (I.S.S., The Hague) 35 01.04.2002 Action Aid (India),
Sr. Programme Analyst
Annadurai R S (Dr.) 60 Principal Scientist - Biology (LS & T) 31,29,034 22,39,538 B.Sc., M.Sc., Ph.D. 14 02.07.2012 Genotypic Technology Pvt. Ltd.,
Sr. Research Director
Banerjee A K 59 Security Manager (ITD) 18,68,416 9,30,841 B.Com. 37 25.01.2008 Allahabad Bank, Sr. Manager
Dutta Saradindu 62 Head - Corporate Accounts 2,00,82,726 69,23,610 B.Com. (Hons.), M.Com., A.C.A. 40 01.12.1982 Organon (I) Ltd.,
Trainee, Accounts
Ghosh B 60 Divisional Manager - Finance - Central Projects 91,69,253 49,88,109 B.Com. (Hons.), M.Com., I.C.W.A., 37 01.07.1985 Nil
Organisation M.B.A.
Guha S 60 Executive V.P. - Technical (ITD) 1,39,05,349 65,78,527 B.Tech. 38 03.08.1992 Tata Consulting Engineers,
Sr. Asst. Engineer
Iyengar K 50 Divisional Manager Audit (FBD) 47,96,499 24,52,022 B.Com., A.C.A. 27 28.11.2005 Nil
Kannan S 48 V.P. - Agri Business Division (ABD) 85,86,377 49,49,890 B.E., P.G.D.M. 17 13.09.2021 V.V.F. India Ltd., Senior V.P.
Keerthana W 23 Asst. Manager - Projects - Agri SBU (ABD) 18,21,068 12,96,123 B.Tech. (Mech.), M.Tech. (Data 2 17.08.2020 Nil
Sciences)
Kumar S S 46 Head - Corporate Treasury 34,12,451 13,90,046 B.Com. (Hons.), C.W.A., A.C.A. 21 20.11.2000 %
Marodia A 39 On deputation 85,63,822 45,71,174 B.Com. (Hons.), A.C.A. 17 01.12.2005 Wipro Technologies,
Executive Finance

ITC Limited REPORT AND ACCOUNTS 2022 141

B. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Name Age Designation Gross Net Qualifications Expe- Date of Previous Employment and
Remuneration Remuneration rience Commence- Position Held
(`) (`) (Years) ment of
Employment
1 2 3 4 5 6 7 8 9
Mukherjee P 60 V.P. - Finance & MIS (PPB - SBU) 90,38,427 52,28,718 B.Com. (Hons.), A.C.S., A.C.A. 36 01.09.1987 Khanna & Annadhanam, Chartered
Accountants, Asst. Audit
Mukhopadhyay M 64 Head - Product Development, Biscuits (FBD) 89,91,434 58,91,790 B.Sc., B.Tech., M.Tech. 35 21.04.2006 Britannia Industries Ltd.,
R & D Manager
Narasimhan V 51 Manager - Tobacco, FBD & Exports (PPB - SBU) 58,60,337 38,79,906 B.E. (Elec.), M.B.A. (International 27 01.09.1996 K.E.C. International,
Business) Exec. Asst. to V.P.
Panda Shatanshu 49 Deputy General Counsel 1,37,70,723 83,07,783 B.A., LL.B. (Hons.) 26 15.07.1996 Nil
Pathak A 62 Managing Director - WelcomHotel Lanka Pvt. 51,22,006 36,41,719 B.Com., A.C.A. 39 20.06.1983 Nil
Ltd. (HD)
Raghuraman R 54 Head of Supply Chain Strategy (FMCG) 84,65,806 46,46,684 B.E. 33 13.01.2020 Hindustan Unilever Ltd.,
V.P. Logistics
Rajiv Mohan D V R 56 V.P. - Value Added Agri Products, Agri Business 1,37,67,593 77,84,940 B.Com. (Hons.), M.B.A. 33 22.08.1988 Nil
SBU (ABD)
Rao S V R 60 Divisional Manager - Audit & Systems - Agri 37,14,953 24,92,148 B.Com., A.C.A. 37 04.03.1993 Eicher Goodearth Ltd.,
SBU (ABD) Factory Accountant
Rao U S 62 Associate General Counsel 48,41,327 35,37,890 B.Com., B.Law 39 11.11.1999 A. P. Paper Mills, Dy. Mgr., Legal
Rastogi M 54 V.P. - Social Investments 60,49,159 37,65,623 B.A., M.A. 33 01.06.1989 Nil
Ravi M R 45 National Sales Manager (PPB - SBU) 69,48,556 38,06,723 B.Sc., M.B.A. 24 21.09.1998 Nil
Ravindranath D 56 Divisional Manager Procurement - P.M. (FBD) 1,15,29,532 59,87,047 B.Tech., P.G. Dip. in Materials Mgmt. 35 01.11.2002 AgroTech Foods Ltd.,
Dy. Mgr., Purchase
Rayavaram R K 49 SBU Chief Executive - Matches & Agarbatti SBU 1,09,53,570 42,59,251 B.E., P.G.P.M. 26 01.06.2003 3M India Ltd., Marketing Analyst
Sarma C V 60 Executive V.P. - Finance & MIS (PSPD) 1,53,31,796 90,54,100 B.Com., C.W.A., A.C.A., A.C.S., P.G.D.M. 35 03.05.1993 J. Loyalka & Co., Sr. Asst.
Senguttuvan R 60 Chief Executive (PPB - SBU) 1,54,79,374 93,13,351 B.E., P.G.D.M. 36 27.05.1991 Asian Paints, Purchase Executive
Singh A 41 Divisional Manager - Procurement (RM) (FBD) 1,26,72,465 65,13,236 B.Sc., P.G.D.M. 17 25.05.2006 Dabur India Ltd.,
Management Trainee
Sridharan M (Dr.) 53 Senior Principal Scientist - IAD & R (ITD) 73,08,671 46,19,119 B.Sc., M.Sc., Doctorate 24 04.01.2011 Syngene International Ltd.,
Chief Scientific Manager
Subbiah R G 60 Divisional Manager - FMCG Infrastructure 45,14,822 27,93,517 B.E., Dip. in Business Admin. 37 01.05.1989 Lucas India Services Ltd.,
Development (ITD) Branch Sales Mgr.
Venkateswaran K (Dr.) 62 Chief Scientist - Research & Technology 1,56,82,655 92,86,161 B.Sc., M.Sc., Ph.D. 37 05.05.2005 Hindustan Lever Ltd.,
Innovation (LS & T) Head - Skin, Cleansing & Care

Abbreviations denote :
ITD : India Tobacco Division ESPB : Education & Stationery Products Business
PSPD : Paperboards & Specialty Papers Division PPB : Printing & Packaging Business
ABD : Agri Business Division LS & T : Life Sciences & Technology
HD : Hotels Division TM & D : Trade Marketing & Distribution
FBD : Foods Business Division SBU : Strategic Business Unit
PCPBD : Personal Care Products Business Division
@ Previously employed with ITC Hotels Ltd which was merged with the Company on March 23, 2005.
# Previously employed with ITC Bhadrachalam Paperboards Ltd which was merged with the Company on March 13, 2002.
% Was on deputation to the Company’s Subsidiary and reverted to Company on January 1, 2022.

Notes :
1. Remuneration includes salary, performance bonus, allowances, contribution to the approved Provident Fund & Pension Funds & other benefits / applicable perquisites borne by the Company, except the contribution to
approved Gratuity Funds and provisions for leave encashment which are actuarially determined on an overall Company basis. The term ‘remuneration’ has the meaning assigned to it under the Companies Act, 2013.
2. The Company grants Stock Options to the Directors, KMP and other employees under its Employee Stock Option Schemes at ‘market price’ [within the meaning of the Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021]. Since such Stock Options are not tradeable, no perquisite or benefit is immediately conferred upon the employee by grant of such Options and
accordingly the said grant has not been considered as remuneration.
3. Net remuneration comprises cash income less: a) income tax, surcharge (as applicable) & education cess deducted at source
b) employees’ own contribution to Provident Fund
4. All appointments are / were contractual in accordance with terms and conditions as per Company rules.
5. None of the above employees is a relative of any Director of the Company.
6. The above list does not include employees who are on deputation and whose cost is not borne by the Company.

On behalf of the Board

S. PURI Chairman & Managing Director

Kolkata
18th May, 2022 R. TANDON Director

142 ITC Limited REPORT AND ACCOUNTS 2022

Annexure to the Report of the Board of Directors
For the Financial Year Ended 31st March, 2022

KEY FINANCIAL RATIOS

[Pursuant to Schedule V(B) to the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015]

Key Financial Ratios for the Company:

FY22 FY21

(i) Operating Profit Margin (%) 33.6 35.7

(ii) Net Profit Margin (%) 25.5 27.1

(iii) Debtors Turnover 29.2 23.0

(iv) Inventory Turnover 6.1 5.5

(v) Current Ratio 2.7 3.1

(vi) Return on Net Worth 25.0 21.2

Notes:

1. The relatively lower Profit Margins is largely attributable to change in business mix.
2. Improvement in Debtors Turnover ratio is attributable to robust growth in revenue, faster collections and impact of
Covid-19 pandemic in the base year.
3. Interest Coverage Ratio and Debt-Equity ratio are not relevant for the Company as it has negligible debt.

On behalf of the Board

S. PURI Chairman & Managing Director

Kolkata
18th May, 2022 R. TANDON Director

ITC Limited REPORT AND ACCOUNTS 2022 143

Annexure to the Report of the Board of Directors
Independent Auditor’s Report on compliance with the conditions of Corporate Governance as per provisions
of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended
The Members of ITC Limited
1. The Corporate Governance Report prepared by ITC Limited (hereinafter the “Company”), contains details as specified in regulations 17 to 27, clauses (b) to
(i) and (t) of sub – regulation (2) of regulation 46 and para C, D, and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended (“the Listing Regulations”) (‘Applicable criteria’) for the year ended March 31, 2022, and the said
Report will be submitted by the Company to the Stock Exchanges as part of the Annual Report.
Management’s Responsibility
2. The preparation of the Corporate Governance Report is the responsibility of the Management of the Company including the preparation and maintenance of
all relevant supporting records and documents. This responsibility also includes the design, implementation and maintenance of internal control relevant to the
preparation and presentation of the Corporate Governance Report.
3. The Management along with the Board of Directors are also responsible for ensuring that the Company complies with the conditions of Corporate Governance
as stipulated in the Listing Regulations, issued by the Securities and Exchange Board of India.
Auditor’s Responsibility
4. Pursuant to the requirements of the Listing Regulations, our responsibility is to provide a reasonable assurance in the form of an opinion whether, the Company
has complied with the conditions of Corporate Governance as specified in the Listing Regulations.
5. We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on Reports or Certificates for Special Purposes
and the Guidance Note on Certification of Corporate Governance, both issued by the Institute of Chartered Accountants of India (“ICAI”). The Guidance Note
on Reports or Certificates for Special Purposes requires that we comply with the ethical requirements of the Code of Ethics issued by ICAI.
6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and
Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.
7. The procedures selected depend on the auditor’s judgement, including the assessment of the risks associated in compliance of the Corporate Governance
Report with the applicable criteria. Summary of procedures performed include:
i. Read and understood the information prepared by the Company and included in its Corporate Governance Report;
ii. Obtained and verified that the composition of the Board of Directors with respect to executive and non-executive directors has been met throughout the
reporting period;
iii. Obtained and read the Register of Directors as on March 31, 2022 and verified that atleast one independent woman director was on the Board of Directors
throughout the year;
iv. Obtained and read the minutes of the following committee meetings / other meetings held from April 01, 2021 to March 31, 2022:
(a) Board of Directors;
(b) Audit Committee;
(c) Annual General Meeting (AGM);
(d) Nomination and Remuneration Committee;
(e) Stakeholders Relationship Committee;
(f) Risk Management Committee
v. Obtained necessary declarations from the directors of the Company.
vi. Obtained and read the policy adopted by the Company for related party transactions.
vii. Obtained the schedule of related party transactions during the year and balances at the year-end.
viii. Obtained and read the minutes of the audit committee meeting wherein such related party transactions have been pre-approved by the audit committee.
ix. Performed necessary inquiries with the management and also obtained necessary specific representations from management.
8. The above-mentioned procedures include examining evidence supporting the particulars in the Corporate Governance Report on a test basis. Further, our
scope of work under this report did not involve us performing audit tests for the purposes of expressing an opinion on the fairness or accuracy of any of the
financial information or the financial statements of the Company taken as a whole.
Opinion
9. Based on the procedures performed by us, as referred in paragraph 7 above, and according to the information and explanations given to us, we are of the
opinion that the Company has complied with the conditions of Corporate Governance as specified in the Listing Regulations, as applicable for the year ended
March 31, 2022, referred to in paragraph 4 above.
Other matters and Restriction on Use
10. This report is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the
affairs of the Company.
11. This report is addressed to and provided to the members of the Company solely for the purpose of enabling it to comply with its obligations under the
Listing Regulations with reference to compliance with the relevant regulations of Corporate Governance and should not be used by any other person or for
any other purpose. Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any other party to whom it is shown
or into whose hands it may come without our prior consent in writing. We have no responsibility to update this report for events and circumstances occurring
after the date of this report.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Sudhir Soni
Partner
Place of Signature: Mumbai Membership Number: 41870
Date: May 18, 2022 UDIN: 22041870AJEMNA4342

144 ITC Limited REPORT AND ACCOUNTS 2022

 CEO and CFO Compliance Certificate

We, S. Puri, Chairman & Managing Director, R. Tandon, Director and S. Dutta, Chief Financial
Officer certify that :
a) We have reviewed the Financial Statements including the Cash Flow Statement for the
year ended 31st March, 2022 and to the best of our knowledge and belief :
i) these Statements do not contain any materially untrue statement or omit any material
fact or contain statements that might be misleading;
ii) these Statements together present a true and fair view of the Company’s affairs
and are in compliance with the Indian Accounting Standards, applicable laws and
regulations.
b) To the best of our knowledge and belief, no transactions entered into by the Company
during the year ended 31st March, 2022 are fraudulent, illegal or violative of the
ITC Code of Conduct.
c) We accept responsibility for establishing and maintaining internal controls for financial
reporting and we have evaluated the effectiveness of internal control systems of the
Company pertaining to financial reporting. Deficiencies in the design or operation of
such internal controls, if any, of which we are aware have been disclosed to the Auditors
and the Audit Committee and steps have been taken to rectify these deficiencies.
d) i) There has not been any significant change in the internal controls over financial
reporting during the year under reference;
ii) There has not been any significant change in the accounting policies during the year
requiring disclosure in the notes to the Financial Statements; and
iii) We are not aware of any instance during the year of significant fraud with
involvement therein of the management or any employee having a significant role in
the Company’s internal control systems over financial reporting.

S. DUTTA Chief Financial Officer

Kolkata, India R. TANDON Director

May 16, 2022 S. PURI Chairman & Managing Director

ITC Limited REPORT AND ACCOUNTS 2022 145

Balance Sheet as at 31st March, 2022
As at As at
Note 31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
ASSETS
Non-current assets
(a) Property, Plant and Equipment 3A 19559.15 18502.87
(b) Capital work-in-progress 3B 2442.34 3329.97
(c) Investment Property 3C 364.20 376.56
(d) Goodwill 3D 577.20 577.20
(e) Other Intangible assets 3E 2007.22 2004.32
(f) Other Intangible assets under development 3F 23.84 3.50
(g) Right of use assets 3G 712.84 726.84
(h) Financial Assets
(i) Investments 4 15657.32 12937.42
(ii) Loans 5 5.06 2.37
(iii) Others 6 1572.40 17234.78 72.45 13012.24
(i) Other non-current assets 7 1228.92 44150.49 1231.62 39765.12
Current assets
(a) Inventories 8 9997.77 9470.87
(b) Financial Assets
(i) Investments 9 11624.95 14046.71
(ii) Trade receivables 10 1952.50 2090.29
(iii) Cash and cash equivalents 11 184.97 231.28
(iv) Other Bank Balances 12 3692.97 3770.25
(v) Loans 5 5.73 2.77
(vi) Others 6 2287.97 19749.09 1197.00 21338.30
(c) Other current assets 7 1195.15 30942.01 1006.07 31815.24
TOTAL ASSETS 75092.50 71580.36
EQUITY AND LIABILITIES
Equity
(a) Equity Share capital 13 1232.33 1230.88
(b) Other Equity 60167.24 61399.57 57773.74 59004.62
Liabilities
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings 14 4.54 5.28
(ii) Lease Liabilities 15 259.79 272.36
(iii) Other financial liabilities 16 96.50 360.83 239.35 516.99
(b) Provisions 17 186.87 157.07
(c) Deferred tax liabilities (Net) 18 1667.14 2214.84 1727.73 2401.79
Current liabilities
(a) Financial Liabilities
(i) Borrowings 14 0.74 0.35
(ii) Trade payables
Total outstanding dues of micro enterprises
and small enterprises 100.96 59.34
Total outstanding dues of creditors other than
micro enterprises and small enterprises 4122.44 4059.97
(iii) Lease Liabilities 15 46.09 51.36
(iv) Other financial liabilities 16 1503.59 5773.82 1247.82 5418.84
(b) Other current liabilities 19 5097.28 4369.00
(c) Provisions 17 55.60 169.05
(d) Current Tax Liabilities (Net) 20 551.39 11478.09 217.06 10173.95
TOTAL EQUITY AND LIABILITIES 75092.50 71580.36

The accompanying notes 1 to 30 are an integral part of the Financial Statements.

On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants R. TANDON Director
Firm Registration Number: 324982E / E300003
Sudhir Soni S. DUTTA Chief Financial Officer
Partner R. K. SINGHI Company Secretary
Mumbai, May 18, 2022 Kolkata, May 18, 2022

146 ITC Limited REPORT AND ACCOUNTS 2022

Statement of Profit and Loss for the year ended 31st March, 2022
Note For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
I Revenue From Operations 21A, 21B 59745.56 48524.56
II Other Income 22 2589.97 3250.99
III Total Income (I + II) 62335.53 51775.55
IV EXPENSES
Cost of materials consumed 16064.50 13605.07
Purchases of Stock-in-Trade 10734.48 6896.41
Changes in inventories of finished goods, Stock-in-Trade,
work-in-progress and intermediates (566.46) (526.86)
Excise duty 3404.29 3039.43
Employee benefits expense 23 3061.99 2820.95
Finance costs 24 41.95 47.47
Depreciation and amortization expense 1652.15 1561.83
Other expenses 25 8113.10 7167.06
Total expenses (IV) 42506.00 34611.36
V Profit before exceptional items and tax (III - IV) 19829.53 17164.19
VI Exceptional Items – –
VII Profit before tax (V + VI) 19829.53 17164.19
VIII Tax expense:
Current Tax 26 4833.88 4035.36
Deferred Tax 26 (62.18) 97.15
IX Profit for the year (VII - VIII) 15057.83 13031.68
Other Comprehensive Income
A (i) Items that will not be reclassified to profit or loss:
– Remeasurements of the defined benefit plans 27(v) 31.62 (30.10)
– Equity instruments through other comprehensive
income 545.25 252.00
– Effective portion of gains / (losses) on designated
portion of hedging instruments in a cash flow hedge (11.90) (6.64)
(ii) Income tax relating to items that will not be reclassified
to profit or loss 26 (4.96) 0.49
B (i) Items that will be reclassified to profit or loss:
– Debt instruments through other comprehensive
income 3.71 –
– Effective portion of gains / (losses) on designated
portion of hedging instruments in a cash flow hedge 14.78 40.76
(ii) Income tax relating to items that will be reclassified
to profit or loss 26 (4.65) (10.26)
X Other Comprehensive Income [A (i - ii) + B (i - ii)] 573.85 246.25
XI Total Comprehensive Income for the year (IX + X) 15631.68 13277.93
XII Earnings per equity share (Face Value ` 1.00 each): 27(i)
(1) Basic (in `) 12.22 10.59
(2) Diluted (in `) 12.22 10.59

The accompanying notes 1 to 30 are an integral part of the Financial Statements.

On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants R. TANDON Director
Firm Registration Number: 324982E / E300003
Sudhir Soni S. DUTTA Chief Financial Officer
Partner R. K. SINGHI Company Secretary
Mumbai, May 18, 2022 Kolkata, May 18, 2022

ITC Limited REPORT AND ACCOUNTS 2022 147

148
Statement of changes in equity for the year ended 31st March, 2022
A. Equity Share Capital (` in Crores)

Balance at the beginning Changes in equity share Balance at the end of the
of the reporting year capital during the year reporting year

ITC Limited
For the year ended 31st March, 2022 1230.88 1.44 1232.33

For the year ended 31st March, 2021 1229.22 1.66 1230.88

B. Other Equity  (` in Crores)

Reserves and Surplus Items of other comprehensive income

Debt Equity
Share Instruments Instruments Effective Foreign Total
Options Capital through Other through Other portion of Currency
Capital Securities Outstanding Redemption Contingency General Retained Comprehensive Comprehensive Cash Flow Translation
Reserve Premium Account Reserve Reserve Reserve Earnings Income Income Hedges Reserve

REPORT AND ACCOUNTS 2022

Balance as at 1st April, 2021 2.48 9611.64 1706.52 0.30 363.05 17585.31 28210.63 – 248.33 4.93 40.55 57773.74
Profit for the year – – – – – – 15057.83 – – – – 15057.83
Other Comprehensive Income (net of tax) – – – – – – 23.66 2.78 545.25 2.16 – 573.85
Total Comprehensive Income for the year – – – – – – 15081.49 2.78 545.25 2.16 – 15631.68
Issue of equity shares under ITC Employee
Stock Option Schemes – 290.38 – – – – – – – – – 290.38
Dividends
– Final Dividend (2020-21 - ` 5.75 per share) – – – – – – (7077.59) – – – – (7077.59)
– Interim Dividend (2021-22 - ` 5.25 per share) – – – – – – (6469.48) – – – – (6469.48)
Transfer from Share Options Outstanding
Account on exercise and lapse – 86.12 (423.70) – – – 315.34 – – – – (22.24)
Transferred to initial carrying amount of hedged
items (net of tax) – – – – – – – – – 7.24 – 7.24
Recognition of share based payment – – 33.51 – – – – – – – – 33.51
Balance as at 31st March, 2022 2.48 9988.14 1316.33 0.30 363.05 17585.31 30060.39 2.78 793.58 14.33 40.55 60167.24
Balance as at 1st April, 2020 2.48 9211.49 2022.18 0.30 363.05 17585.31 33596.14 – 2.77 (24.33) 40.55 62799.94
Profit for the year – – – – – – 13031.68 – – – – 13031.68
Other Comprehensive Income (net of tax) – – – – – – (29.66) – 250.38 25.53 – 246.25
Total Comprehensive Income for the year – – – – – – 13002.02 – 250.38 25.53 – 13277.93
Issue of equity shares under ITC Employee
Stock Option Schemes – 288.99 – – – – – – – – – 288.99
 Statement of changes in equity for the year ended 31st March, 2022
B. Other Equity (Contd.)  (` in Crores)

Reserves and Surplus Items of other comprehensive income

Debt Equity
Share Instruments Instruments Effective Foreign Total
Options Capital through Other through Other portion of Currency
Capital Securities Outstanding Redemption Contingency General Retained Comprehensive Comprehensive Cash Flow Translation
Reserve Premium Account Reserve Reserve Reserve Earnings Income Income Hedges Reserve

Dividend
– Final Dividend (2019-20 - ` 10.15 per share) – – – – – – (12476.61) – – – – (12476.61)
– Interim Dividend (2020-21 - ` 5.00 per share) – – – – – – (6152.68) – – – – (6152.68)
Dividend distribution tax refund received – – – – – – 13.98 – – – – 13.98
Transfer from Share Options Outstanding
Account on exercise and lapse – 111.16 (342.32) – – – 222.96 – – – – (8.20)
Transfer from Equity Instruments through Other
Comprehensive Income reserve on renunciation
of rights entitlements (net of tax) – – – – – – 4.82 – (4.82) – – –
Transferred to initial carrying amount of hedged
items (net of tax) – – – – – – – – – 3.73 – 3.73
Recognition of share based payment – – 26.66 – – – – – – – – 26.66
Balance as at 31st March, 2021 2.48 9611.64 1706.52 0.30 363.05 17585.31 28210.63 – 248.33 4.93 40.55 57773.74

The Board of Directors of the Company has recommended Final Dividend of ` 6.25 per Ordinary Share for the financial year ended 31st March, 2022 (for the year ended 31st March, 2021- ` 5.75 per Ordinary Share) to be paid on fully
paid Equity Shares amounting to ` 7702.03 Crores. The Final Dividend is subject to the approval of shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Including the Interim
Dividend of ` 5.25 per Ordinary Share (for the year ended 31st March, 2021 - ` 5.00 per Ordinary Share) declared by the Board of Directors, the total Equity Dividend for the year ended 31st March, 2022 is ` 11.50 per Ordinary Share
(total Equity Dividend for the year ended 31st March, 2021 - ` 10.75 per Ordinary Share).
Capital Reserve: This Reserve represents the difference between value of the net assets transferred to the Company in the course of business combinations and the consideration paid for such combinations.
Securities Premium: This Reserve represents the premium on issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.
Share Options Outstanding Account: This Reserve relates to stock options granted by the Company to employees under ITC Employee Stock Option Schemes. This Reserve is transferred to Securities Premium or Retained Earnings on
exercise or lapse of vested options.
Capital Redemption Reserve: This Reserve has been transferred to the Company in the course of business combinations and can be utilized in accordance with the provisions of the Companies Act, 2013.
Contingency Reserve: This Reserve has been created out of Retained Earnings, as a matter of prudence, to take care of any unforeseen adverse developments in pending legal disputes.
General Reserve: This Reserve is created by an appropriation from one component of equity (generally Retained Earnings) to another, not being an item of Other Comprehensive Income. The same can be utilized in accordance with the
provisions of the Companies Act, 2013.
Retained Earnings: This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilized in accordance with the provisions of the Companies Act, 2013.

ITC Limited
Debt Instruments through Other Comprehensive Income: This Reserve represents the cumulative gains (net of losses) arising on revaluation of Debt Instruments measured at Fair Value through Other Comprehensive Income, net of
amounts reclassified, if any, to profit or loss when those instruments are disposed of.
Equity Instruments through Other Comprehensive Income: This Reserve represents the cumulative gains (net of losses) arising on revaluation of Equity Instruments measured at Fair Value through Other Comprehensive Income, net of
amounts reclassified, if any, to Retained Earnings when those instruments are disposed of.
Effective portion of Cash Flow Hedges: This Reserve represents the cumulative effective portion of changes in Fair Value of derivatives that are designated as Cash Flow Hedges. It will be reclassified to profit or loss or included in the
carrying amount of the non-financial asset in accordance with the Company’s accounting policy.
Foreign Currency Translation Reserve: This Reserve contains the accumulated balance of foreign exchange differences arising on monetary items that, in substance, form part of the Company’s net investment in a foreign operation whose
functional currency is other than Indian Rupee. Exchange differences previously accumulated in this Reserve are reclassified to profit or loss on disposal of the foreign operation.

The accompanying notes 1 to 30 are an integral part of the Financial Statements.

On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants R. TANDON Director
Firm Registration Number: 324982E / E300003

REPORT AND ACCOUNTS 2022

Sudhir Soni S. DUTTA Chief Financial Officer
Partner R. K. SINGHI Company Secretary

149
Mumbai, May 18, 2022 Kolkata, May 18, 2022
Cash Flow Statement for the year ended 31st March, 2022
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
A. Cash Flow from Operating Activities
PROFIT BEFORE TAX 19829.53 17164.19
ADJUSTMENTS FOR:
Depreciation and amortization expense 1652.15 1561.83
Share based payments to employees 32.51 27.15
Finance costs 41.95 47.47
Interest Income (1004.59) (1224.82)
Dividend Income (857.46) (723.94)
(Gain) / Loss on sale of property, plant and equipment,
lease termination - Net (59.05) 55.04
Doubtful and bad debts 10.64 25.98
Doubtful and bad advances, loans and deposits 1.15 33.04
Net (gain) / loss arising on financial instruments mandatorily measured
at fair value through profit or loss (524.19) (1107.53)
Foreign currency translations and transactions - Net 11.07 (695.82) (13.00) (1318.78)
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 19133.71 15845.41
ADJUSTMENTS FOR:
Trade receivables, advances and other assets (235.39) (99.11)
Inventories (526.90) (1350.89)
Trade payables, other liabilities and provisions 946.39 184.10 1055.07 (394.93)
CASH GENERATED FROM OPERATIONS 19317.81 15450.48
Income tax paid (4510.02) (3956.62)
NET CASH FROM OPERATING ACTIVITIES 14807.79 11493.86
B. Cash Flow from Investing Activities
Purchase of property, plant and equipment, Intangibles, ROU asset etc. (1812.03) (1582.09)
Sale of property, plant and equipment 137.22 2.66
Purchase of current investments (60325.53) (51625.18)
Sale / redemption of current investments 63554.78 56785.92
Payment towards business combination / contingent purchase
consideration (71.25) (2189.22)
Investment in subsidiaries (427.24) (361.57)
Investment in associate (1.87) (1.87)
Purchase of non-current investments (4777.02) (1488.71)
Redemption proceeds of non-current investments 2731.24 1712.05
Dividend Income 857.46 723.94
Interest received 962.97 1199.36
Investment in bank deposits
(original maturity more than 3 months) (3525.01) (3706.02)
Redemption / maturity of bank deposits
(original maturity more than 3 months) 3617.42 6259.37
Investment in deposit with housing finance company (3011.37) (78.38)
Redemption / maturity of deposit with housing finance companies 578.82 844.43
Loans given (12.51) (2.12)
Loans realised 6.86 5.32
NET CASH FROM / (USED IN) INVESTING ACTIVITIES (1517.06) 6497.89

150 ITC Limited REPORT AND ACCOUNTS 2022

Cash Flow Statement for the year ended 31st March, 2022
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
C. Cash Flow from Financing Activities
Proceeds from issue of share capital 291.82 290.65
Repayment of non-current borrowings (0.35) (2.26)
Payment of lease liabilities (54.42) (49.67)
Interest paid (42.14) (43.47)
Net increase in statutory restricted accounts balances 15.13 41.17
Dividend paid (13547.07) (18629.29)
Dividend distribution tax refund received – 13.98
NET CASH USED IN FINANCING ACTIVITIES (13337.03) (18378.89)
NET DECREASE IN CASH AND CASH EQUIVALENTS (46.30) (387.14)
OPENING CASH AND CASH EQUIVALENTS 231.28 561.35
CASH AND CASH EQUIVALENTS ACQUIRED ON BUSINESS
COMBINATION [See Note 3 below] – 57.07
CLOSING CASH AND CASH EQUIVALENTS 184.98 231.28

Notes:
1. The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in Ind AS - 7 “Statement of Cash Flows”
2. CASH AND CASH EQUIVALENTS:
Cash and cash equivalents as above 184.98 231.28
Unrealised gain / (loss) on foreign currency cash and cash equivalents (0.01) …
Cash and cash equivalents (Note 11) 184.97 231.28
3. Cash and Cash Equivalents include ` Nil (2021 - ` 57.07 Crores) on acquisition of erstwhile Sunrise Foods Private Limited and its
two wholly owned subsidiaries.
4. Net Cash Flow from Operating Activities includes an amount of ` 340.96 Crores (2021- ` 368.18 Crores) spent towards Corporate
Social Responsibility.

The accompanying notes 1 to 30 are an integral part of the Financial Statements.

On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants R. TANDON Director
Firm Registration Number: 324982E / E300003
Sudhir Soni S. DUTTA Chief Financial Officer
Partner R. K. SINGHI Company Secretary
Mumbai, May 18, 2022 Kolkata, May 18, 2022

ITC Limited REPORT AND ACCOUNTS 2022 151

Notes to the Financial Statements

1. Significant Accounting Policies

Statement of Compliance cycle and other criteria set out in the Schedule III to the
These financial statements have been prepared in Companies Act, 2013 and Ind AS 1 – Presentation of
accordance with Indian Accounting Standards (Ind AS) Financial Statements based on the nature of products and
notified under Section 133 of the Companies Act, 2013. the time between the acquisition of assets for processing
The financial statements have also been prepared in and their realisation in cash and cash equivalents.
accordance with the relevant presentation requirements of Property, Plant and Equipment – Tangible Assets
the Companies Act, 2013. The Company adopted Ind AS
Property, plant and equipment are stated at cost of
from 1st April, 2016.
acquisition or construction less accumulated depreciation
Basis of Preparation and impairment, if any. For this purpose, cost includes
The financial statements are prepared in accordance with deemed cost which represents the carrying value
the historical cost convention, except for certain items that of property, plant and equipment recognised as at
are measured at fair values, as explained in the accounting 1st April, 2015 measured as per the previous Generally
policies. Accepted Accounting Principles (GAAP).
Fair Value is the price that would be received to sell an asset Cost is inclusive of inward freight, duties and taxes
or paid to transfer a liability in an orderly transaction between and incidental expenses related to acquisition.
market participants at the measurement date, regardless of In respect of major projects involving construction, related
whether that price is directly observable or estimated using pre-operational expenses form part of the value of assets
another valuation technique. In estimating the fair value of capitalised. Expenses capitalised also include applicable
an asset or a liability, the Company takes into account the borrowing costs for qualifying assets, if any. All upgradation /
characteristics of the asset or liability if market participants enhancements are charged off as revenue expenditure
would take those characteristics into account when pricing unless they bring similar significant additional benefits.
the asset or liability at the measurement date. Fair value An item of property, plant and equipment is derecognised
for measurement and/or disclosure purposes in these upon disposal or when no future economic benefits
financial statements is determined on such a basis, are expected to arise from the continued use of asset.
except for share-based payment transactions that are within Any gain or loss arising on the disposal or retirement of an
the scope of Ind AS 102 – Share-based Payment, leasing item of property, plant and equipment is determined as the
transactions that are within the scope of Ind AS 116 – Leases, difference between the sales proceeds and the carrying
and measurements that have some similarities to amount of the asset and is recognised in Statement of
fair value but are not fair value, such as net realisable Profit and Loss.
value in Ind AS 2 – Inventories or value in use in Depreciation of these assets commences when the assets
Ind AS 36 – Impairment of Assets. are ready for their intended use which is generally on
The preparation of financial statements in conformity commissioning. Items of property, plant and equipment
with Ind AS requires management to make judgements, are depreciated in a manner that amortizes the cost (or
estimates and assumptions that affect the application of the other amount substituted for cost) of the assets after
accounting policies and the reported amounts of assets and commissioning, less its residual value, over their useful
liabilities, the disclosure of contingent assets and liabilities lives as specified in Schedule II of the Companies Act, 2013
at the date of the financial statements, and the reported on a straight line basis. Land is not depreciated.
amounts of revenues and expenses during the year. Actual The estimated useful lives of property, plant and equipment
results could differ from those estimates. The estimates of the Company are as follows:
and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised Buildings 30 - 60 Years
in the period in which the estimate is revised if the revision Leasehold Improvements Shorter of lease period or
affects only that period; they are recognised in the period estimated useful lives
of the revision and future periods if the revision affects both
Plant and Equipment 7 - 25 Years
current and future periods.
Furniture and Fixtures 8 - 10 Years
Operating Cycle
Vehicles 8 - 10 Years
All assets and liabilities have been classified as current
or non-current as per the Company’s normal operating Office Equipment 5 Years

152 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

1. Significant Accounting Policies (Contd.)

Assets held under finance leases are depreciated over their carried at its cost less accumulated amortization and / or
expected useful lives on the same basis as owned assets impairment losses.
or, where shorter, the term of the relevant lease. The useful lives of intangible assets are reviewed annually to
Property, plant and equipment’s residual values and useful determine if a reset of such useful life is required for assets
lives are reviewed at each Balance Sheet date and changes, with finite lives and to confirm that business circumstances
if any, are treated as changes in accounting estimate. continue to support an indefinite useful life assessment for
assets so classified. Based on such review, the useful life
Intangible Assets
may change or the useful life assessment may change from
Intangible Assets that the Company controls and from indefinite to finite. The impact of such changes is accounted
which it expects future economic benefits are capitalised for as a change in accounting estimate.
upon acquisition and measured initially:
Investment Property
a. for assets acquired in a business combination, at fair
value on the date of acquisition. Properties that are held for long-term rental yields and / or
for capital appreciation are classified as investment
b. for separately acquired assets, at cost comprising
properties. Investment properties are stated at cost of
the purchase price (including import duties and
acquisition or construction less accumulated depreciation
non-refundable taxes) and directly attributable costs to
and impairment, if any. Depreciation is recognised using
prepare the asset for its intended use.
the straight line method so as to amortise the cost of
Internally generated assets for which the cost is clearly investment properties over their useful lives as specified in
identifiable are capitalised at cost. Research expenditure is Schedule II of the Companies Act, 2013. Freehold land and
recognised as an expense when it is incurred. Development properties under construction are not depreciated.
costs are capitalised only after the technical and commercial
Transfers to, or from, investment properties are made at
feasibility of the asset for sale or use has been established.
the carrying amount when and only when there is a change
Thereafter, all directly attributable expenditure incurred to
in use.
prepare the asset for its intended use are recognised as the
cost of such assets. Internally generated brands, websites An item of investment property is derecognised upon
and customer lists are not recognised as intangible assets. disposal or when no future economic benefits are expected
to arise from the continued use of asset. Any gain or loss
The carrying value of intangible assets includes deemed
arising on the disposal or retirement of an item of investment
cost which represents the carrying value of intangible
property is determined as the difference between the sales
assets recognised as at 1st April, 2015 measured as per
proceeds and the carrying amount of the property and is
the previous GAAP.
recognised in the Statement of Profit and Loss.
The useful life of an intangible asset is considered finite
Income received from investment property is recognised
where the rights to such assets are limited to a specified
in the Statement of Profit and Loss on a straight line basis
period of time by contract or law (e.g. patents, licences,
over the term of the lease.
trademarks, franchise and servicing rights) or the likelihood
of technical, technological obsolescence (e.g. computer Impairment of Assets
software, design, prototypes) or commercial obsolescence Impairment loss, if any, is provided to the extent, the
(e.g. lesser known brands are those to which adequate carrying amount of assets or cash generating units exceed
marketing support may not be provided). If, there are no their recoverable amount.
such limitations, the useful life is taken to be indefinite. Recoverable amount is higher of an asset’s net selling
Intangible assets that have finite lives are amortized over price and its value in use. Value in use is the present value
their estimated useful lives by the straight line method of estimated future cash flows expected to arise from the
unless it is practical to reliably determine the pattern of continuing use of an asset or cash generating unit and from
benefits arising from the asset. An intangible asset with an its disposal at the end of its useful life.
indefinite useful life is not amortized. Impairment losses recognised in prior years are reversed
All intangible assets are tested for impairment. Amortization when there is an indication that the impairment losses
expenses and impairment losses and reversal of impairment recognised no longer exist or have decreased. Such
losses are taken to the Statement of Profit and Loss. reversals are recognised as an increase in carrying
Thus, after initial recognition, an intangible asset is amounts of assets to the extent that it does not exceed the

ITC Limited REPORT AND ACCOUNTS 2022 153

Notes to the Financial Statements

1. Significant Accounting Policies (Contd.)

carrying amounts that would have been determined (net of (i) Fair value hedges
amortization or depreciation) had no impairment loss been Changes in fair value of the designated portion of
recognised in previous years. derivatives that qualify as fair value hedges are
Inventories recognised in profit or loss immediately, together with
Inventories are stated at lower of cost and net realisable any changes in the fair value of the hedged asset or
value. The cost is calculated on weighted average method. liability that are attributable to the hedged risk. The
Cost comprises expenditure incurred in the normal course change in the fair value of the designated portion of
of business in bringing such inventories to their present hedging instrument and the change in fair value of
location and condition and includes, where applicable, the hedged item attributable to the hedged risk are
appropriate overheads based on normal level of activity. recognised in Statement of Profit and Loss in the line
Net realisable value is the estimated selling price less item relating to the hedged item.
estimated costs for completion and sale. Hedge accounting is discontinued when the hedging
Obsolete, slow moving and defective inventories are instrument expires or is sold, terminated, or exercised,
identified from time to time and, where necessary, or when it no longer qualifies for hedge accounting.
a provision is made for such inventories. The fair value adjustment to the carrying amount of the
hedged item arising from the hedged risk is amortised to
Foreign Currency Transactions
profit or loss from that date.
The functional and presentation currency of the Company
(ii) Cash flow hedges
is Indian Rupee.
The effective portion of changes in the fair value of
Transactions in foreign currency are accounted for at
derivatives that are designated and qualify as cash
the exchange rate prevailing on the transaction date.
flow hedges is recognised in the other comprehensive
Gains / losses arising on settlement as also on translation
income and accumulated as ‘Cash Flow Hedging
of monetary items are recognised in the Statement of Profit
Reserve’. The gains / losses relating to the ineffective
and Loss.
portion are recognised in the Statement of Profit
Exchange differences arising on monetary items that, and Loss.
in substance, form part of the Company’s net investment
Amounts previously recognised and accumulated in
in a foreign operation (having a functional currency other
other comprehensive income are reclassified to profit
than Indian Rupee) are accumulated in Foreign Currency
Translation Reserve. or loss when the hedged item affects the Statement
of Profit and Loss. However, when the hedged item
Derivatives and Hedge Accounting results in the recognition of a non - financial asset, such
Derivatives are initially recognised at fair value and are gains / losses are transferred from equity (but not as
subsequently remeasured to their fair value at the end reclassification adjustment) and included in the initial
of each reporting period. The resulting gains / losses are measurement cost of the non - financial asset.
recognised in Statement of Profit and Loss immediately Hedge accounting is discontinued when the hedging
unless the derivative is designated and effective as instrument expires or is sold, terminated, or exercised,
a hedging instrument, in which event the timing of or when it no longer qualifies for hedge accounting. Any
recognition in profit or loss / inclusion in the initial cost of gains / losses recognised in other comprehensive income
non-financial asset depends on the nature of the hedging
and accumulated in equity at that time remain in equity
relationship and the nature of the hedged item.
and is reclassified when the underlying transaction is
The Company complies with the principles of hedge ultimately recognised. When an underlying transaction
accounting where derivative contracts are designated is no longer expected to occur, the gains / losses
as hedge instruments. At the inception of the hedge accumulated in equity are recognised immediately in
relationship, the Company documents the relationship the Statement of Profit and Loss.
between the hedge instrument and the hedged item, along
with the risk management objectives and its strategy for Investment in Subsidiaries, Associates and Joint Ventures
undertaking hedge transaction, which can be a fair value Investment in subsidiaries, associates and joint ventures
hedge or a cash flow hedge. are carried at cost less accumulated impairment, if any.

154 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

1. Significant Accounting Policies (Contd.)

Financial instruments, Financial assets, Financial Trade Receivables, Advances, Security Deposits, Cash
liabilities and Equity Instruments and Cash equivalents etc. are classified for measurement
Financial assets and financial liabilities are recognised when at amortised cost while investments may fall under any of
the Company becomes a party to the contractual provisions the aforesaid classes. However, in respect of particular
of the relevant instrument and are initially measured at investments in equity instruments that would otherwise
fair value. Transaction costs that are directly attributable be measured at fair value through profit or loss, an
to the acquisition or issue of financial assets and financial irrevocable election at initial recognition may be made to
liabilities (other than financial assets and financial liabilities present subsequent changes in fair value through other
measured at fair value through profit or loss) are added comprehensive income.
to or deducted from the fair value on initial recognition of
Impairment: The Company assesses at each reporting
financial assets or financial liabilities. Purchase or sale of
financial assets that require delivery of assets within a time date whether a financial asset (or a group of financial
frame established by regulation or convention in the market assets) such as investments, trade receivables, advances
place (regular way trades) are recognised on the trade and security deposits held at amortised cost and financial
date, i.e., the date when the Company commits to purchase assets that are measured at fair value through other
or sell the asset. comprehensive income are tested for impairment based
on evidence or information that is available without undue
Financial Assets
cost or effort. Expected credit losses are assessed and loss
Recognition: Financial assets include Investments, allowances recognised if the credit quality of the financial
Trade Receivables, Advances, Security Deposits, Cash
asset has deteriorated significantly since initial recognition.
and Cash equivalents. Such assets are initially recognised
at transaction price when the Company becomes party Reclassification: When and only when the business
to contractual obligations. The transaction price includes model is changed, the Company shall reclassify all affected
transaction costs unless the asset is being fair valued financial assets prospectively from the reclassification date
through the Statement of Profit and Loss. as subsequently measured at amortised cost, fair value
Classification: Management determines the classification through other comprehensive income or fair value through
of an asset at initial recognition depending on the purpose profit or loss without restating the previously recognised
for which the assets were acquired. The subsequent gains, losses or interest and in terms of the reclassification
measurement of financial assets depends on such principles laid down in the Ind AS relating to Financial
classification. Instruments.
Financial assets are classified as those measured at: Derecognition: Financial assets are derecognised when
(a) amortised cost, where the financial assets are held the right to receive cash flows from the assets has expired,
solely for collection of cash flows arising from payments or has been transferred, and the Company has transferred
of principal and / or interest. substantially all of the risks and rewards of ownership.
Concomitantly, if the asset is one that is measured at:
(b) fair value through other comprehensive income
(FVTOCI), where the financial assets are held not only (a) amortised cost, the gain or loss is recognised in the
for collection of cash flows arising from payments of Statement of Profit and Loss;
principal and interest but also from the sale of such (b) fair value through other comprehensive income, the
assets. Such assets are subsequently measured at fair cumulative fair value adjustments previously taken to
value, with unrealised gains and losses arising from
reserves are reclassified to the Statement of Profit and
changes in the fair value being recognised in other
Loss unless the asset represents an equity investment,
comprehensive income.
in which case the cumulative fair value adjustments
(c) fair value through profit or loss (FVTPL), where the previously taken to reserves are reclassified within
assets are managed in accordance with an approved
equity.
investment strategy that triggers purchase and sale
decisions based on the fair value of such assets. Income Recognition: Interest income is recognised in the
Such assets are subsequently measured at fair value, Statement of Profit and Loss using the effective interest
with unrealised gains and losses arising from changes method. Dividend income is recognised in the Statement
in the fair value being recognised in the Statement of of Profit and Loss when the right to receive dividend
Profit and Loss in the period in which they arise. is established.

ITC Limited REPORT AND ACCOUNTS 2022 155

Notes to the Financial Statements

1. Significant Accounting Policies (Contd.)

Financial Liabilities Accordingly, government grants:

Borrowings, trade payables and other financial liabilities are (a) related to or used for assets, are deducted from the
initially recognised at the value of the respective contractual carrying amount of the asset.
obligations. They are subsequently measured at amortised (b) related to incurring specific expenditures are taken to
cost. Any discount or premium on redemption / settlement is the Statement of Profit and Loss on the same basis and
recognised in the Statement of Profit and Loss as finance in the same periods as the expenditures incurred.
cost over the life of the liability using the effective interest
(c) by way of financial assistance on the basis of certain
method and adjusted to the liability figure disclosed in the
qualifying criteria are recognised as they become
Balance Sheet.
receivable.
Financial liabilities are derecognised when the liability is In the unlikely event that a grant previously recognised is
extinguished, that is, when the contractual obligation ultimately not received, it is treated as a change in estimate
is discharged, cancelled or on expiry. and the amount cumulatively recognised is expensed in the
Offsetting Financial Instruments Statement of Profit and Loss.
Financial assets and liabilities are offset and the net amount Dividend Distribution
is included in the Balance Sheet where there is a legally Dividends paid (including income tax thereon) are
enforceable right to offset the recognised amounts and recognised in the period in which the interim dividends are
there is an intention to settle on a net basis or realise the approved by the Board of Directors, or in respect of the final
asset and settle the liability simultaneously. dividend when approved by shareholders.
Equity Instruments Employee Benefits
Equity instruments are recognised at the value of the The Company makes contributions to both defined benefit
proceeds, net of direct costs of the capital issue. and defined contribution schemes which are mainly
Revenue administered through duly constituted and approved Trusts.
Revenue is measured at the fair value of the consideration Provident Fund contributions are in the nature of defined
received or receivable for goods supplied and services contribution scheme. In respect of employees who
rendered, net of returns and discounts to customers. are members of constituted and approved trusts, the
Revenue from the sale of goods is shown to include Excise Company recognises contribution payable to such trusts
Duties and National Calamity Contingent Duty which are as an expense including any shortfall in interest between
payable on manufacture of goods but excludes taxes such the amount of interest realised by the investment and
as VAT and Goods and Services Tax which are payable in the interest payable to members at the rate declared by
respect of sale of goods and services. the Government of India. In respect of other employees,
provident funds are deposited with the Government and
Revenue from the sale of goods and services is recognised
recognised as expense.
when the Company performs its obligations to its customers
and the amount of revenue can be measured reliably and The Company makes contribution to defined contribution
recovery of the consideration is probable. The timing of such pension plan. The contribution payable is recognised as an
recognition in case of sale of goods is when the control over expense, when an employee renders the related service.
the same is transferred to the customer, which is mainly The Company also makes contribution to defined benefit
upon delivery and in case of services, in the period in which pension and gratuity plan. The cost of providing benefits
such services are rendered. under the defined benefit obligation is calculated by
independent actuary using the projected unit credit method.
Government Grant Service costs and net interest expense or income is
The Company may receive government grants that require reflected in the Statement of Profit and Loss. Gain or Loss
compliance with certain conditions related to the Company’s on account of remeasurements are recognised immediately
operating activities or are provided to the Company by way through other comprehensive income in the period in which
of financial assistance on the basis of certain qualifying they occur.
criteria. The employees of the Company are entitled to compensated
Government grants are recognised when there is reasonable leave for which the Company records the liability based on
assurance that the grant will be received upon the Company actuarial valuation computed using projected unit credit
complying with the conditions attached to the grant. method. These benefits are unfunded.

156 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

1. Significant Accounting Policies (Contd.)

Actual disbursements made under the Workers’ Voluntary For cash settled SAR units granted to eligible employees,
Retirement Scheme are accounted as revenue expenses. a liability is initially measured at fair value at the grant date
and is subsequently remeasured at each reporting
Employee Share Based Compensation
period, until settled. The fair value of ESAR units granted
Stock Options is recognised in the Statement of Profit and Loss for
Stock Options are granted to eligible employees under employees of the Company. In case of employees on
the ITC Employee Stock Option Schemes (“ITC ESOS”), deputation to group companies, the Company generally
as may be decided by the Nomination & Compensation seeks reimbursements from the concerned group company.
Committee / Board. Eligible employees for this purpose The value of such payments, net of reimbursements,
include employees of the Company including Directors is considered as capital contribution / investment.
and those on deputation and employees of the Company’s
Leases
subsidiary companies including Managing Director / 
Wholetime Director of a subsidiary. The Company assesses at contract inception whether a
Under Ind AS, the cost of ITC Stock Options (Stock Options) contract is, or contains, a lease. A contract is, or contains,
is recognised based on the fair value of Stock Options as a lease if it conveys the right to control the use of an identified
on the grant date. asset for a period of time in exchange for consideration.
While the fair value of Stock Options granted is recognised Company as a Lessee
in the Statement of Profit and Loss for employees of the Right-of-Use (ROU) assets are recognised at inception of
Company (other than those out on deputation), the value a contract or arrangement for significant lease components
of Stock Options, net of reimbursements, granted to at cost less lease incentives, if any. ROU assets are
employees on deputation and to employees of the wholly subsequently measured at cost less accumulated
owned and other subsidiary companies is considered as
depreciation and impairment losses, if any. The cost of ROU
capital contribution / investment.
assets includes the amount of lease liabilities recognised,
The Company generally seeks reimbursement of the value initial direct cost incurred and lease payments made at
of Stock Options from such companies, as applicable. or before the lease commencement date. ROU assets
It may, if so recommended by the Corporate Management are generally depreciated over the shorter of the lease
Committee and approved by the Audit Committee, decide term and estimated useful lives of the underlying assets
not to seek such reimbursements from: on a straight line basis. Lease term is determined based
(a) Wholly owned subsidiaries who need to conserve on consideration of facts and circumstances that create
financial capacity to sustain their business and growth an economic incentive to exercise an extension option,
plans and to address contingencies that may arise, or not to exercise a termination option. Lease payments
taking into account the economic and market conditions associated with short-term leases and low value leases are
then prevailing and opportunities and threats in the charged to the Statement of Profit and Loss on a straight
competitive context. line basis over the term of the relevant lease.
(b) Other companies not covered under (a) above, who The Company recognises lease liabilities measured at the
need to conserve financial capacity to sustain their present value of lease payments to be made on the date
business and growth plans and where the quantum of
of recognition of the lease. Such lease liabilities do not
reimbursement is not material - the materiality threshold
include variable lease payments (that do not depend on
being ` 5 Crores for each entity for a financial year.
an index or a rate), which are recognised as expense in
Cash Settled Stock Appreciation Linked Reward (SAR) the periods in which they are incurred. Interest on lease
Plan liability is recognised using the effective interest method.
Cash Settled SAR units are granted to eligible employees Lease liabilities are subsequently increased to reflect the
under the ITC Employee Cash Settled Stock Appreciation accretion of interest and reduced for the lease payments
Linked Reward Plan (“ITC ESARP”). The eligible employees made. The carrying amount of lease liabilities is also
for this purpose are such present and future permanent remeasured upon modification of lease arrangement
employees of the Company, including a Director of the or upon change in the assessment of the lease term.
Company, as may be decided by the CMC / Nomination & The effect of such remeasurements is adjusted to the value
Compensation Committee / Board. of the ROU assets.

ITC Limited REPORT AND ACCOUNTS 2022 157

Notes to the Financial Statements

1. Significant Accounting Policies (Contd.)

Company as a Lessor Provisions

Leases in which the Company does not transfer substantially Provisions are recognised when, as a result of a past
all the risks and rewards of ownership of an asset are event, the Company has a legal or constructive obligation;
classified as operating leases. Where the Company is a it is probable that an outflow of resources will be required
lessor under an operating lease, the asset is capitalised to settle the obligation; and the amount can be reliably
within property, plant and equipment or investment property estimated. The amount so recognised is a best estimate
and depreciated over its useful economic life. Payments of the consideration required to settle the obligation at the
received under operating leases are recognised in the reporting date, taking into account the risks and uncertainties
Statement of Profit and Loss on a straight line basis over
surrounding the obligation.
the term of the lease.
In an event when the time value of money is material, the
Taxes on Income provision is carried at the present value of the cash flows
Taxes on income comprise current taxes and deferred estimated to settle the obligation.
taxes. Current tax in the Statement of Profit and Loss is
Operating Segments
provided as the amount of tax payable in respect of taxable
income for the period using tax rates and tax laws enacted Operating segments are reported in a manner consistent
during the period, together with any adjustment to tax with the internal reporting provided to the chief operating
payable in respect of previous years. decision-maker (CODM). The CODM, who is responsible
Deferred tax is recognised on temporary differences for allocating resources and assessing performance
between the carrying amounts of assets and liabilities and of the operating segments, has been identified as the
the amounts used for taxation purposes (tax base), at the Corporate Management Committee.
tax rates and tax laws enacted or substantively enacted by Segments are organised based on businesses which
the end of the reporting period. have similar economic characteristics as well as exhibit
Deferred tax assets are recognised for the future tax similarities in nature of products and services offered,
consequences to the extent it is probable that future the nature of production processes, the type and class of
taxable profits will be available against which the deductible customer and distribution methods.
temporary differences can be utilised.
Segment revenue arising from third party customers is
Income tax, insofar as it relates to items disclosed under reported on the same basis as revenue in the financial
other comprehensive income or equity, is disclosed statements. Inter-segment revenue is reported on the basis
separately under other comprehensive income or equity,
of transactions which are primarily market led. Segment
as applicable.
results represent profits before finance charges, unallocated
Deferred tax assets and liabilities are offset when there is corporate expenses and taxes.
legally enforceable right to offset current tax assets and
“Unallocated Corporate Expenses” include revenue and
liabilities and when the deferred tax balances relate to the
expenses that relate to initiatives / costs attributable to the
same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to enterprise as a whole.
offset and intends either to settle on net basis, or to realize Financial and Management Information Systems
the asset and settle the liability simultaneously.
The Company’s Accounting System is designed to unify
Claims the Financial and Cost Records and also to comply with the
Claims against the Company not acknowledged as debts relevant provisions of the Companies Act, 2013, to provide
are disclosed after a careful evaluation of the facts and financial and cost information appropriate to the businesses
legal aspects of the matter involved. and facilitate Internal Control.

158 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

2. Use of estimates and judgements

The preparation of financial statements in conformity liability, the Company uses market-observable data
with generally accepted accounting principles requires to the extent it is available. Where Level 1 inputs
management to make estimates and assumptions that are not available, the Company engages third party
affect the reported amounts of assets and liabilities and valuers, where required, to perform the valuation.
disclosure of contingent liabilities at the date of the financial Information about the valuation techniques and
statements and the results of operations during the inputs used in determining the fair value of various
reporting period end. Although these estimates are based assets, liabilities and share based payments are
upon management’s best knowledge of current events and disclosed in the notes to the financial statements.
actions, actual results could differ from these estimates. 3. Actuarial Valuation:
The estimates and underlying assumptions are reviewed on The determination of Company’s liability towards
an ongoing basis. Revisions to accounting estimates are defined benefit obligation to employees is made
recognised in the period in which the estimate is revised through independent actuarial valuation including
if the revision affects only that period, or in the period of determination of amounts to be recognised in
the revision and future periods if the revision affects both the Statement of Profit and Loss and in other
current and future periods. comprehensive income. Such valuation depends
A. Judgements in applying accounting policies upon assumptions determined after taking into
account inflation, seniority, promotion and other
The judgements, apart from those involving estimations relevant factors such as supply and demand factors
(see note B below), that the Company has made in the in the employment market. Information about
process of applying its accounting policies and that have such valuation is provided in notes to the financial
a significant effect on the amounts recognised in these statements.
financial statements pertain to useful life of intangible
assets. The Company is required to determine whether 4. Claims, Provisions and Contingent Liabilities:
its intangible assets have indefinite or finite life which is The Company has ongoing litigations with various
a subject matter of judgement. Certain trademarks have regulatory authorities and third parties. Where an
been considered of having an indefinite useful life taking outflow of funds is believed to be probable and a
into account that there are no technical, technological or reliable estimate of the outcome of the dispute can
commercial risks of obsolescence or limitations under be made based on management’s assessment of
contract or law. Other trademarks have been amortised specific circumstances of each dispute and relevant
over their useful economic life. Refer notes to the financial external advice, management provides for its best
statements. estimate of the liability. Such accruals are by nature
complex and can take number of years to resolve
B. Key sources of estimation uncertainty and can involve estimation uncertainty. Information
The following are the key assumptions concerning the about such litigations is provided in notes to the
future, and other key sources of estimation uncertainty at the financial statements.
end of the reporting period that may have a significant risk
5. COVID-19:
of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year. The Company has considered the possible effects
that may arise out of COVID-19 pandemic on the
1. U
 seful lives of property, plant and equipment, carrying amounts of property, plant & equipment,
investment property and intangible assets: intangible assets, investments, inventories, trade
As described in the significant accounting policies, receivables, etc. For this purpose, the Company
the Company reviews the estimated useful lives of has considered internal and external sources of
property, plant and equipment, investment property information up to the date of approval of these
and intangible assets at the end of each reporting financial statements, including credit reports and
period. related information, economic forecasts, market
value of certain investments etc. Based on the
2. F
 air value measurements and valuation current estimates, the Company does not expect
processes: any significant impact on such carrying values. The
Some of the Company’s assets and liabilities impact of COVID-19 pandemic on the Company’s
are measured at fair value for financial reporting financial statements may differ from that estimated as
purposes. In estimating the fair value of an asset or a at the date of approval of these financial statements.

ITC Limited REPORT AND ACCOUNTS 2022 159

Notes to the Financial Statements
(` in Crores)
Gross Block

As at Acquired Withdrawals As at Withdrawals As at

31st March, through business and 31st March, and 31st March,
Particulars 2020 Additions combinations adjustments 2021 Additions adjustments 2022

3A. Property, Plant and Equipment *

Land 1 1933.90 46.21 19.53 3.88 1995.76 56.23 35.26 2016.73
Buildings 7549.49 169.54 30.77 9.15 7740.65 745.03 57.03 8428.65
Leasehold Improvements 12.47 0.28 – 0.85 11.90 1.40 0.02 13.28
Plant and Equipment 14023.76 756.69 28.38 114.88 14693.95 1772.87 210.41 16256.41
Furniture and Fixtures 788.08 23.02 1.36 2.44 810.02 79.51 4.75 884.78
Vehicles 162.67 12.64 0.71 17.31 158.71 15.18 18.28 155.61
Office Equipment 25.76 1.92 0.87 1.99 26.56 2.87 0.86 28.57
Railway Sidings 1.73 – – – 1.73 – – 1.73
Total 24497.86 1010.30 81.62 150.50 25439.28 2673.09 326.61 27785.76
3B. Capital work-in-progress 2776.31 1557.78 1.06 1005.18 3329.97 1761.73 2649.36 2442.34
3C. Investment Property 5 406.71 3.40 – – 410.11 – – 410.11
3D. Goodwill 2 – – 577.20 – 577.20 – – 577.20
3E. Other Intangible assets (acquired) 2
Trademarks 447.30 – 1473.05 – 1920.35 – – 1920.35
Computer Software 213.96 10.12 0.35 0.38 224.05 35.84 22.49 237.40
Know How, Business and Commercial Rights 33.85 – – – 33.85 9.53 – 43.38
Customer Relationships – – 35.21 – 35.21 – – 35.21
Total 695.11 10.12 1508.61 0.38 2213.46 45.37 22.49 2236.34
3F. Other Intangible assets under development 3.89 6.41 – 6.80 3.50 64.48 44.14 23.84
3G. Right of Use Assets ^
Land 440.49 54.98 4.27 – 499.74 16.89 – 516.63
Buildings 252.58 53.42 5.72 22.32 289.40 40.52 32.87 297.05
Plant and Equipment 48.63 – – – 48.63 – – 48.63
Total 741.70 108.40 9.99 22.32 837.77 57.41 32.87 862.31

^ Also refer Note 27(vi).

(` in Crores)
* The above includes following assets given on As at 31st March, 2021 As at 31st March, 2022
Depreciation Depreciation
operating lease:
Charge Charge
Accumulated for the year Accumulated for the year
Particulars Gross Block Depreciation Net Block 2020-21 Gross Block Depreciation Net Block 2021-22

Land 1.48 – 1.48 – 1.48 – 1.48 –

Buildings 4.88 1.24 3.64 0.08 4.98 1.40 3.58 0.16
Plant and Equipment 216.21 124.30 91.91 20.43 229.25 144.79 84.46 20.49
TOTAL 222.57 125.54 97.03 20.51 235.71 146.19 89.52 20.65

160 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
(` in Crores)
Depreciation and Amortization Net Book Value

Upto On withdrawals Upto On withdrawals Upto As at As at

31st March, For and 31st March, For and 31st March, 31st March, 31st March,
Particulars 2020 the year adjustments 2021 the year adjustments 2022 2022 2021

3A. Property, Plant and Equipment *

Land 1 – – – – – – – 2016.73 1995.76
Buildings 717.32 207.18 0.19 924.31 220.10 15.17 1129.24 7299.41 6816.34
Leasehold Improvements 5.36 1.36 0.73 5.99 1.40 0.02 7.37 5.91 5.91
Plant and Equipment 4448.93 1139.48 64.92 5523.49 1213.29 208.96 6527.82 9728.59 9170.46
Furniture and Fixtures 320.24 79.86 2.36 397.74 73.25 3.45 467.54 417.24 412.28
Vehicles 57.82 19.22 9.50 67.54 18.15 11.10 74.59 81.02 91.17
Office Equipment 14.97 3.03 1.44 16.56 3.44 0.86 19.14 9.43 10.00
Railway Sidings 0.65 0.13 – 0.78 0.13 – 0.91 0.82 0.95
Total 5565.29 1450.26 79.14 6936.41 1529.76 239.56 8226.61 19559.15 18502.87
3B. Capital work-in-progress – – – – – – – 2442.34 3329.97
3C. Investment Property 5 21.35 12.20 – 33.55 12.36 – 45.91 364.20 376.56
3D. Goodwill 2 – – – – – – – 577.20 577.20
3E. Other Intangible assets (acquired) 2
Trademarks 14.16 3.14 – 17.30 3.14 – 20.44 1899.91 1903.05
Computer Software 146.27 24.23 0.38 170.12 31.36 22.44 179.04 58.36 53.93
Know How, Business and Commercial Rights 15.23 3.50 – 18.73 3.52 – 22.25 21.13 15.12
Customer Relationships – 2.99 – 2.99 4.40 – 7.39 27.82 32.22
Total 175.66 33.86 0.38 209.14 42.42 22.44 229.12 2007.22 2004.32
3F. Other Intangible assets under development – – – – – – – 23.84 3.50
3G. Right of Use Assets ^
Land 6.73 7.00 – 13.73 7.67 – 21.40 495.23 486.01
Buildings 49.27 53.18 16.30 86.15 54.57 29.21 111.51 185.54 203.25
Plant and Equipment 5.53 5.52 – 11.05 5.51 – 16.56 32.07 37.58
Total 61.53 65.70 16.30 110.93 67.75 29.21 149.47 712.84 726.84

Notes:
1. Land includes certain lands at Munger with Gross Block - ` 1.16 Crores (2021 - ` 1.16 Crores) which stood vested with the State of Bihar under the Bihar Land Reforms Act, 1950 for which
compensation has not yet been determined.
2. a) Goodwill arising on Business Combination is carried at cost and annually tested for impairment in line with applicable Accounting Standards. The Company has also considered certain acquired
Trademarks aggregating ` 1889.78 Crores (2021 - ` 1889.78 Crores) as having indefinite useful lives. The indefinite useful life for such trademarks has been assessed considering no technical,
technological or commercial risks of obsolescence or any limitations under contract or law. Such assets are also annually tested for impairment. These assets pertain to the ‘FMCG - Others’ Segment
and are related to the Branded Packaged Foods and Personal Care Products businesses of the Company. Impairment testing for goodwill and intangible assets with indefinite useful lives has been
carried out considering their recoverable amounts which, inter-alia, includes estimation of their value-in-use based on management projections. These projections have been made for a period of
five years, or longer, as applicable and consider various factors, such as market scenario, growth trends, growth and margin projections, and terminal growth rates specific to the business. For such
projections, discount rate of 10% (2021 - 10%) and long-term growth rates ranging between 5% to 6% (2021 - 5% to 6%) have been considered. Discount rate has been determined considering the
Weighted Average Cost of Capital (WACC) of market benchmarks. Based on the above assessment, no impairment has been recognised during the year.
2. b) Computer software and Customer Relationships are amortized over a period of 5 years and 8 years respectively. Other Intangibles with finite useful life are amortized over a period of 10 years unless
shorter useful life is required based on contractual or legal terms.
3. The amortization expense of intangible assets has been included under ‘Depreciation and amortization expense’ in the Statement of Profit and Loss.
4. The amount of expenditure recognised in the carrying amount of property, plant and equipment in the course of construction is ` 147.39 Crores (2021 - ` 26.65 Crores).
5. The fair value of the investment property is ` 870.11 Crores (2021 - ` 861.00 Crores). The fair value has been determined on the basis of valuation carried out at the reporting date by registered
valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 and the same has been categorised as Level 2 based on the valuation techniques used and inputs
applied. The main inputs considered by the valuer are government rates, property location, market research & trends, contracted rentals, terminal yields, discount rates and comparable values, as
appropriate.
Amounts recognised in the Statement of Profit and Loss in respect of the investment property is as under:
(` in Crores)
Particulars For the year ended For the year ended
31st March, 2022 31st March, 2021
Rental Income etc. from investment property 111.94 110.05
Direct Operating Expenses arising from investment property that
generated rental income during the year$ 9.94 9.65
Direct Operating Expenses arising from investment property that
did not generate rental income during the year – –
$As per the contractual arrangements, the Company is responsible for the maintenance of common area at its own cost. The expenses arising out of such arrangements are not material.

ITC Limited REPORT AND ACCOUNTS 2022 161

Notes to the Financial Statements
Capital work-in-progress ageing schedule (` in Crores)
As at 31st March, 2021 As at 31st March, 2022

Less than 1-2 2-3 More than Less than 1-2 2-3 More than
Particulars 1 year years years 3 years Total 1 year years years 3 years Total

Projects in Progress 1100.10 956.63 475.73 797.51 3329.97 651.71 685.43 444.17 661.03 2442.34
Projects temporarily suspended – – – – – – – – – –
Total 1100.10 956.63 475.73 797.51 3329.97 651.71 685.43 444.17 661.03 2442.34

Completion schedule for Projects in Capital work-in-progress, which are overdue or has exceeded its cost compared to its original plan
As at 31st March, 2021 As at 31st March, 2022

Less than More than Less than More than

Particulars 1 year 1 - 2 years 2 - 3 years 3 years 1 year 1 - 2 years 2 - 3 years 3 years

MXD - KOL – – 500.47 – – 542.00 – –

H - AHM – 372.08 – – 440.31 – – –
F - KHO – – 157.01 – – 164.42 – –
F - GNT – – – – 69.46 – – –
ME - MED – 61.22 – – 62.47 – – –
ME - PUN – 19.90 – – 20.01 – – –
F - MED 270.15 – – – – – – –
W - PUD 250.58 – – – – – – –
W - KPT 216.01 – – – – – – –
H - GNT 120.94 – – – – – – –
F - ABT 115.57 – – – – – – –
H - BSR 109.19 – – – – – – –
F - MYS 47.79 – – – – – – –
R - BCM 27.45 – – – – – – –
F - UBR 21.26 – – – – – – –
ME - BLR 16.41 – – – – – – –

Other Intangible assets under development ageing schedule (` in Crores)

As at 31st March, 2021 As at 31st March, 2022

Less than 1-2 2-3 More than Less than 1-2 2-3 More than
Particulars 1 year years years 3 years Total 1 year years years 3 years Total

Projects in Progress 0.31 – 1.77 1.42 3.50 23.84 – – – 23.84

Projects temporarily suspended – – – – – – – – – –
Total 0.31 – 1.77 1.42 3.50 23.84 – – – 23.84

Note: There are no projects in Other Intangible assets under development, which are overdue or has exceeded its cost compared to its original plan as at 31st March, 2022 and 31st March, 2021.

162 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
otherwise) Number Crores) Number Crores)

4. Non-current investments (Contd.)

INVESTMENT IN EQUITY INSTRUMENTS

In Subsidiaries (at cost unless stated otherwise)

Unquoted
Gold Flake Corporation Limited 10 1,59,98,385 16.00 1,59,98,385 16.00
Russell Credit Limited
Fully paid 10 59,74,54,177 619.29 59,74,54,177 619.29
` 6.50 per share paid 10 7,54,22,400 39.22 7,54,22,400 39.22
ITC Infotech India Limited 10 8,52,00,000 173.10 8,52,00,000 195.06
Landbase India Limited 10 31,70,00,000 325.57 31,70,00,000 325.57
Surya Nepal Private Limited (Ordinary Shares) Nepalese
Rupee
100 1,18,94,400 10.15 1,18,94,400 10.15
Srinivasa Resorts Limited 10 1,63,20,477 18.53 1,63,20,477 18.53
Fortune Park Hotels Limited 10 4,50,008 0.45 4,50,008 0.45
Bay Islands Hotels Limited 100 11,875 0.12 11,875 0.12
WelcomHotels Lanka (Private) Limited No par value 13,96,42,260 641.85 13,96,42,260 641.85
Wimco Limited 1 18,50,81,193 3.50 18,50,81,193 3.60
Technico Pty Limited (Ordinary Shares)
( ` 16.29 Crores impaired) No par value 1,00,15,502 31.88 1,00,15,502 31.88
Technico Agri Sciences Limited 10 3,79,62,800 121.00 3,79,62,800 121.00
ITC Investments & Holdings Limited 10 45,00,000 4.50 45,00,000 4.50
ITC IndiVision Limited 10 12,00,00,000 120.00 5,00,00,000 50.00
North East Nutrients Private Limited 10 5,54,80,000 55.48 5,54,80,000 55.48
Pavan Poplar Limited
(cost ` 5.99 Crores, fully impaired) 10 55,10,004 – 55,10,004 –
Prag Agro Farm Limited
(cost ` 12.82 Crores, fully impaired) 1 1,28,00,020 – 1,28,00,020 –
In Associates (at cost unless stated otherwise)
Quoted
International Travel House Limited 10 2,87,600 0.65 2,87,600 0.65
Gujarat Hotels Limited 10 17,33,907 1.94 17,33,907 1.94
Unquoted
Delectable Technologies Private Limited 10 100 0.10 100 0.10
In Joint Ventures (at cost unless stated otherwise)
Unquoted
Espirit Hotels Private Limited 10 4,65,09,200 46.51 4,65,09,200 46.51
Maharaja Heritage Resorts Limited 100 90,000 0.90 90,000 0.90
Logix Developers Private Limited
( ` 33.45 Crores impaired) 10 77,66,913 8.50 77,66,913 8.50

Carried over 2239.24 2191.30

ITC Limited REPORT AND ACCOUNTS 2022 163

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
otherwise) Number Crores) Number Crores)

4. Non-current investments (Contd.)

Brought forward 2239.24 2191.30

INVESTMENT IN EQUITY INSTRUMENTS (Contd.)

In Others (at fair value through other comprehensive

income unless stated otherwise)
Quoted
VST Industries Limited 10 476 0.15 476 0.16
HLV Limited 2 4,99,53,055 45.71 4,99,53,055 28.72
EIH Limited 2 8,56,21,473 1324.14 8,56,21,473 795.85
Tourism Finance Corporation of India Limited 10 25,000 0.15 25,000 0.15
Unquoted
Bihar Hotels Limited 2 8,00,000 0.04 8,00,000 0.04
Andhra Pradesh Gas Power Corporation Limited 10 8,04,000 2.32 8,04,000 2.32
Woodlands Multispeciality Hospital Limited 10 13,605 0.01 13,605 0.01
Mirage Advertising and Marketing Limited 10 12,488 – 12,488 –
Mother Sparsh Baby Care Private Limited
(at fair value through profit or loss) 10 100 0.96 – –
INVESTMENT IN PREFERENCE SHARES
In Subsidiaries (at amortised cost unless
stated otherwise)
Unquoted
North East Nutrients Private Limited
(Cumulative Redeemable Preference Shares) 100 – – 18,00,000 18.00
WelcomHotels Lanka (Private) Limited (at cost) Sri Lankan
(Cumulative Redeemable Preference Shares) Rupee 100 38,33,73,340 1527.42 29,61,27,340 1200.18
Wimco Limited
(Cumulative Redeemable Preference Shares) 100 5,00,000 5.00 5,00,000 5.00
ITC IndiVision Limited
(Cumulative Non-Convertible Redeemable
Preference Shares) 100 30,00,000 30.00 – –
In Associates (at cost)
Unquoted
Delectable Technologies Private Limited
(Compulsorily Convertible Cumulative
Preference Shares) 10 5,792 5.52 3,828 3.65
In Others (at fair value through profit or loss)
Unquoted
Mother Sparsh Baby Care Private Limited
(Compulsorily Convertible Cumulative Preference
Shares) 10 1,980 19.04 – –

Carried over 5199.70 4245.38

164 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
otherwise) Number Crores) Number Crores)

4. Non-current investments (Contd.)

Brought forward 5199.70 4245.38

INVESTMENT IN GOVERNMENT OR TRUST SECURITIES
(at amortised cost)
Quoted
State Development Loans
7.20% Tamil Nadu - 25-Jan-2027 100 20,85,500 21.81 – –
7.41% Uttar Pradesh - 09-Nov-2026 100 20,00,000 21.08 – –
7.51% Maharashtra - 24-May-2027 100 65,00,000 68.49 – –
7.59% Gujarat - 15-Feb-2027 100 1,25,00,000 132.61 – –
7.62% Uttar Pradesh - 15-Feb-2027 100 30,00,000 31.81 – –
7.84% Maharashtra - 13-Jul-2026 100 2,00,00,000 212.59 – –
7.86% Karnataka - 15-Mar-2027 100 50,00,000 53.24 – –
7.96% Maharashtra - 29-Jun-2026 100 25,00,000 26.73 – –
8.03% Uttar Pradesh - 11-May-2026 100 70,00,000 74.77 – –
8.08% Maharashtra - 15-Jun-2026 100 5,00,000 5.36 – –
8.36% Maharashtra - 27-Jan-2026 100 35,00,000 37.76 – –
8.72% Tamil Nadu - 19-Sep-2026 100 10,00,000 10.99 – –
Government of India Zero Coupon Government Stock
Zero Coupon Government Stock - 22-Feb-2025 100 34,00,000 28.97 – –
Zero Coupon Government Stock - 15-Jun-2025 100 10,20,000 8.46 – –
Zero Coupon Government Stock - 22-Aug-2025 100 25,35,000 20.66 – –
Zero Coupon Government Stock - 15-Dec-2025 100 36,34,800 29.14 – –
Zero Coupon Government Stock - 17-Dec-2025 100 6,02,300 4.80 – –
Zero Coupon Government Stock - 22-Feb-2026 100 25,35,000 19.89 – –
Zero Coupon Government Stock - 15-Jun-2026 100 10,20,000 7.85 – –
Zero Coupon Government Stock - 22-Aug-2026 100 40,56,000 30.65 – –
Zero Coupon Government Stock - 15-Dec-2026 100 10,20,000 7.56 – –
Zero Coupon Government Stock - 22-Feb-2027 100 33,35,000 24.22 – –
Zero Coupon Government Stock - 15-Jun-2027 100 31,17,000 22.24 – –
Zero Coupon Government Stock - 22-Aug-2027 100 40,56,000 28.30 – –
Unquoted
Government Securities - cost ` 70000.00
(2021 - ` 74000.00) – 0.01 – 0.01
National Savings Certificates (pledged with various
Mandi Samitis) (cost ` 6000.00) … …

Carried over 6129.69 4245.39

ITC Limited REPORT AND ACCOUNTS 2022 165

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
otherwise) Number Crores) Number Crores)

4. Non-current investments (Contd.)

Brought forward 6129.69 4245.39

INVESTMENT IN BONDS IN THE NATURE OF
DEBENTURES (at amortised cost)
Quoted
Tax Free Bonds - Secured, Redeemable &
Non-Convertible
Housing and Urban Development Corporation Limited
7.07% - Series B - 01-Oct-2025 10,00,000 4,300 435.09 4,300 436.49
7.19% - Series A - 31-Jul-2025 10,00,000 150 15.43 150 15.55
7.34% - Series 1 - 16-Feb-2023 1,000 – – 3,29,870 33.58
7.39% - Series 2A - 08-Feb-2031 1,000 7,00,696 70.07 7,00,696 70.07
8.20% - Series 2 - 05-Mar-2027 1,000 5,00,000 54.16 5,00,000 54.87
India Infrastructure Finance Company Limited
7.19% - Series I - 22-Jan-2023 1,000 – – 5,00,000 50.76
7.36% - Series II - 22-Jan-2028 1,000 3,00,000 31.99 3,00,000 32.28
8.01% - Series 1A - 12-Nov-2023 1,000 50,000 5.13 50,000 5.21
8.26% - Series V B - 23-Aug-2028 10,00,000 1,175 123.63 1,175 124.37
8.46% - Series VI B - 30-Aug-2028 10,00,000 1,300 139.96 1,300 141.17
8.48% - Series VII B - 05-Sep-2028 10,00,000 1,780 188.71 1,780 189.99
Indian Railway Finance Corporation Limited
7.07% - Series 102 - 21-Dec-2025 1,000 70,498 7.22 70,498 7.26
7.15% - Series 100 - 21-Aug-2025 10,00,000 250 25.64 250 25.79
7.18% - Series 86 - 19-Feb-2023 1,000 – – 5,00,000 50.78
7.19% - Series 99 - 31-Jul-2025 10,00,000 2,250 225.52 2,250 225.66
7.34% - Series 86A - 19-Feb-2028 1,000 1,00,000 10.74 1,00,000 10.84
8.23% - Series 91 - 18-Feb-2024 1,000 8,00,000 82.81 8,00,000 84.14
8.35% - Series 89 - 21-Nov-2023 10,00,000 100 10.31 100 10.47
8.48% - Series 89A - 21-Nov-2028 10,00,000 1,250 131.94 1,250 132.68
8.55% - Series 94A - 12-Feb-2029 10,00,000 130 13.79 130 13.87
National Bank for Agriculture and Rural
Development
7.07% - Series 1A - 25-Feb-2026 10,00,000 2,000 206.19 2,000 207.62
National Highways Authority of India
7.11% - Series NHAI - II A - 18-Sep-2025 10,00,000 2,600 260.33 2,600 260.31
7.14% - Series I A - 11-Jan-2026 1,000 8,06,381 81.70 8,06,381 81.91
7.28% - Series NHAI - II B - 18-Sep-2030 10,00,000 2,500 250.00 2,500 250.00
7.35% - Series II A - 11-Jan-2031 1,000 17,49,943 182.78 17,49,943 183.39
8.50% - Series II A - 05-Feb-2029 1,000 5,00,000 56.33 5,00,000 57.04
8.75% - Series II B - 05-Feb-2029 1,000 2,50,000 28.71 2,50,000 29.14
National Housing Bank
8.46% - Series V - 30-Aug-2028 10,00,000 800 84.20 800 84.70

Carried over 8852.07 7115.33

166 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
otherwise) Number Crores) Number Crores)

4. Non-current investments (Contd.)

Brought forward 8852.07 7115.33

INVESTMENT IN BONDS IN THE NATURE OF
DEBENTURES (Contd.)
Power Finance Corporation Limited
7.16% - Series 136 - 17-Jul-2025 10,00,000 600 61.57 600 61.98
8.46% - Series 107B - 30-Aug-2028 10,00,000 500 52.63 500 52.94
8.54% - Series 2A - 16-Nov-2028 1,000 3,50,000 40.07 3,50,000 40.69
REC Limited
7.17% - Series 5A - 23-Jul-2025 10,00,000 850 87.12 850 87.69
8.46% - Series 3B - 29-Aug-2028 10,00,000 1,190 128.55 1,190 129.72
8.46% - Series 2A - 24-Sep-2028 1,000 3,50,000 39.84 3,50,000 40.44
8.54% - Series 4B - 11-Oct-2028 10,00,000 50 5.28 50 5.32
Taxable Bonds - Secured, Redeemable &
Non-Convertible
Indian Railway Finance Corporation Limited
7.83% - Series 118 - 21-Mar-2027 10,00,000 1,750 187.83 – –
Taxable Bonds - Unsecured, Redeemable &
Non-Convertible
Export Import Bank of India
5.20% - Series X 01 - 04-Mar-2025
(with Put and Call option 04-Mar-2024) 10,00,000 2,000 200.00 – –
Housing and Urban Development
Corporation Limited
6.99% - Series E - 11-Nov-2022 10,00,000 – – 700 70.18
7.61% - Series A - 22-Jun-2022 10,00,000 – – 250 25.14
8.40% - Series C 2018 - 11-Apr-2022 10,00,000 – – 850 85.00
National Bank for Agriculture and Rural
Development
4.60% - Series 21 E - 29-Jul-2024 (with Put and Call
option 29-Jul-2022) 10,00,000 – – 5,000 499.98
5.70% - Series 22 D - 31-Jul-2025 10,00,000 1,000 99.15 – –
6.70% - Series 20 H - 11-Nov-2022 10,00,000 – – 250 25.00
6.98% - Series 20 G - 19-Sep-2022 10,00,000 – – 2,000 200.00
7.69% - Series 20 C - 29-May-2024 10,00,000 4,300 451.74 4,300 461.01
7.70% - Series 20 D - 13-Jun-2022 10,00,000 – – 500 50.59
7.85% - Series 20 B - 23-May-2022 10,00,000 – – 900 91.13
7.90% - Series 20 A - 18-Apr-2022 10,00,000 – – 600 60.73
Power Finance Corporation Limited
5.47% - Series 206 -19-Aug-2023 10,00,000 100 10.05 100 10.09
6.09% - Series BS-212 A - 27-Aug-2026 10,00,000 300 30.09 – –
6.50% - Series 208 - 17-Sep-2025 10,00,000 1,150 116.68 1,150 117.13
6.72% - Series 203 A - 09-Jun-2023 10,00,000 900 91.74 900 93.11

Carried over 10454.41 9323.20

ITC Limited REPORT AND ACCOUNTS 2022 167

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
otherwise) Number Crores) Number Crores)

4. Non-current investments (Contd.)

Brought forward 10454.41 9323.20

INVESTMENT IN BONDS IN THE NATURE OF
DEBENTURES (Contd.)
6.75% - Series 202 A - 22-May-2023 10,00,000 1,200 122.26 1,200 124.12
7.10% - Series 169 A - 08-Aug-2022 10,00,000 – – 700 70.12
7.35% - Series 191 - 15-Oct-2022 10,00,000 – – 4,500 450.00
8.03% - Series 147 - 02-May-2026 10,00,000 600 64.04 – –
8.20% - Series 128 - 10-Mar-2025 10,00,000 450 47.59 450 48.36
8.39% - Series 130 C - 19-Apr-2025 10,00,000 200 21.29 200 21.66
8.45% - Series 181 - 11-Aug-2022 10,00,000 – – 250 25.50
REC Limited
5.85% - Series 203 B - 20-Dec-2025 10,00,000 1,100 109.37 1,100 109.26
7.09% - Series 152 - 17-Oct-2022 10,00,000 – – 300 29.88
7.09% - Series 185 - 13-Dec-2022 10,00,000 – – 2,000 200.00
Perpetual Bonds - Unsecured, Subordinated &
Non-Convertible#
ICICI Bank
9.15% - Series DMR 18AT (with first Call option on
20-Jun-2023) 10,00,000 2,647 264.70 2,647 264.70
9.90% - Series DDE 18AT (with first Call option on
28-Dec-2023) 10,00,000 3,000 300.00 3,000 300.00
State Bank of India
7.72% - Series I (with first Call option 03-Sep-2026) 1,00,00,000 313 313.00 – –
7.72% - Series II (with first Call option 18-Oct-2026) 1,00,00,000 400 400.00 – –
9.37% - Series II (with first Call option 21-Dec-2023) 10,00,000 2,350 235.00 2,350 235.00
9.56% - Series I (with first Call option 04-Dec-2023) 10,00,000 7,000 700.00 7,000 700.00
Zero Coupon Bonds - Secured, Redeemable &
Non-Convertible
LIC Housing Finance Limited
Tranche 378 - 04-May-2022 10,00,000 – – 500 59.59
Tranche 416 - 25-Apr-2025 10,00,000 10,000 1021.27 – –
INVESTMENT IN DEBT MUTUAL FUNDS
Quoted
Fixed Maturity Plans (at amortised cost)*
Aditya Birla Sun Life Mutual Fund 10 2,19,98,900 22.03 – –
Nippon India Mutual Fund 10 1,49,99,250 15.08 – –
SBI Mutual Fund 10 23,69,88,150 241.25 – –
Fixed Maturity Plans (at fair value through
profit or loss)
Aditya Birla Sun Life Mutual Fund 10 – – 11,70,00,000 144.16

Carried over 14331.29 12105.55

168 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
otherwise) Number Crores) Number Crores)

4. Non-current investments (Contd.)

Brought forward 14331.29 12105.55

INVESTMENT IN DEBT MUTUAL FUNDS (Contd.)
HDFC Mutual Fund 10 – – 4,00,00,000 50.10
ICICI Prudential Mutual Fund 10 – – 10,20,00,000 125.63
IDFC Mutual Fund 10 – – 2,20,00,000 26.81
Kotak Mahindra Mutual Fund 10 – – 19,70,00,000 244.26
Nippon India Mutual Fund 10 – – 8,50,00,000 108.93
SBI Mutual Fund 10 – – 19,70,00,000 241.10
Exchange Traded Funds (at fair value through
other comprehensive income) **
Axis Mutual Fund 1 5,50,00,000 58.00 – –
Nippon India Mutual Fund 10 3,60,00,000 389.05 – –
Unquoted
Target Maturity Index Funds (at fair value through
other comprehensive income) **
Aditya Birla Sun Life Mutual Fund 10 35,48,47,210 360.79 – –
Axis Mutual Fund 10 1,98,53,868 20.02 – –
ICICI Prudential Mutual Fund 10 17,74,37,385 180.27 – –
Kotak Mahindra Mutual Fund 10 2,99,36,233 30.06 – –
SBI Mutual Fund 10 19,80,19,704 200.51 – –
INVESTMENT IN ALTERNATIVE INVESTMENT FUNDS
(at fair value through profit or loss)
Unquoted
Chiratae Ventures India Fund IV 1,00,000 923 13.98 600 5.91
Fireside Ventures Investments Fund I 1,00,000 1,324 51.27 1,307 25.49
Fireside Ventures Investments Fund II 1,000 1,00,000 8.67 50,000 3.64
India Foundation Fund Series I 100 1,63,740 2.15 – –
Roots Ventures I 100 8,13,113 11.26 – –
Aggregate amount of quoted Investments 10951.37 9484.46
Aggregate amount of unquoted Investments 4705.95 3452.96
Total 15657.32 12937.42

Aggregate market value of quoted investments ` 11205.72 Crores (2021 - ` 9984.03 Crores).
Aggregate amount of impairment in value of investments ` 68.55 Crores (2021 - ` 68.55 Crores).
* Investments in Fixed Maturity Plans (FMPs) that are intended to be held by the Company till maturity are classified as amortised
cost. The underlying instruments in the portfolio of these FMPs have minimal churn and are held to receive contractual cashflows.
** Exchange Traded / Target Maturity Index Funds follow a passive buy and hold investment strategy to receive contractual cashflows
except for meeting redemption and rebalancing requirements. Investment in such funds are classified as FVTOCI as cash flows
from these investments are realised on maturity or upon sale.
# Additional Tier 1 bonds, which are perpetual in nature, are issued by commercial banks under Reserve Bank of India guidelines.
These have been classified as debt instruments by the Company based on the substantive characteristics of the contract.

ITC Limited REPORT AND ACCOUNTS 2022 169

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

5. Loans

Others Loans - Employees

– Unsecured, considered good 5.73 5.06 2.77 2.37

TOTAL 5.73 5.06 2.77 2.37

6. Other Financial assets

Security Deposits * 26.66 71.99 24.72 72.11

Deposits other than Security Deposits 1510.27 1500.41 574.58 0.34
Interest accrued on Loans, Deposits, Investments, etc. 496.10 – 448.37 –
Other Receivables ** 254.94 – 149.33 –

TOTAL 2287.97 1572.40 1197.00 72.45

* Include deposits to Directors and Key Management Personnel ` 0.08 Crore (2021 - ` 0.08 Crore) (Refer Note 29).
** Comprise receivables on account of Government grants, claims, interest, rentals, derivatives designated as hedging instrument,
etc.

170 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

7. Other Assets

Capital Advances – 187.21 – 232.62

Advances other than capital advances
Security Deposits
– With Statutory Authorities 0.28 787.46 0.18 782.05
– Others 0.66 134.22 0.66 115.71
Advances to related parties (Refer Note 29) – – … –
Other Advances (including advances with statutory
authorities, prepaid expenses, employees, etc.) 1048.69 120.03 897.00 101.24
Other Receivables* 145.52 – 108.23 –

TOTAL 1195.15 1228.92 1006.07 1231.62

* Includes receivables on account of Government grants.

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

8. Inventories*

(At lower of cost and net realisable value)

Raw materials (including packing materials) 6442.11 6544.03
Work-in-progress 232.70 213.07
Finished goods (manufactured) 1638.93 1445.49
Stock-in-trade (goods purchased for resale) 1150.95 832.87
Stores and spares 453.19 390.81
Intermediates - Tissue paper and Paperboards 79.89 44.60

TOTAL 9997.77 9470.87

The above includes goods in transit as under:

Raw materials (including packing materials) 301.74 135.09
Stock-in-trade (goods purchased for resale) 2.58 1.60
Stores and spares 4.12 1.35

TOTAL 308.44 138.04

The cost of inventories recognised as an expense includes ` 17.58 Crores (2021 - ` 10.45 Crores) in respect of write-downs of
inventory to net realisable value. During the year, reversal of previous write-downs of ` 0.91 Crore (2021 - ` 1.67 Crores) have been
made owing to subsequent increase in realisable value.
Inventories of ` 574.71 Crores (2021 - ` 669.75 Crores) are expected to be recovered after more than twelve months. The operating
cycle of the Company is twelve months.
* Cash credit facilities are secured by hypothecation of inventories of the Company, both present and future. The quarterly returns /
statements filed by the Company with the bank(s) in respect of such facilities are in agreement with the books of accounts.

ITC Limited REPORT AND ACCOUNTS 2022 171

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

9. 
Current Investments (at fair value through profit or loss, unless
stated otherwise) (Contd.)

INVESTMENT IN BONDS IN THE NATURE OF

DEBENTURES

Quoted

Tax Free Bonds - Secured, Redeemable &

Non-Convertible

Indian Railway Finance Corporation Limited

7.18% - Series 86 - 19-Feb-2023 1,000 10,00,000 101.82 10,00,000 104.74

8.00% - Series 80 - 23-Feb-2022 1,000 – – 4,35,012 45.00

8.23% - Series 91 - 18-Feb-2024 1,000 20,00,000 211.32 20,00,000 219.75

National Highways Authority of India

8.20% - 25-Jan-2022 1,000 – – 4,94,476 51.08

Power Finance Corporation Limited

8.01% - Series 107 A - 30-Aug-2023 10,00,000 1,000 103.98 1,000 107.83

8.09% - Series 80 A - 25-Nov-2021 1,00,000 – – 1,500 15.38

8.18% - Series 1 A - 16-Nov-2023 1,000 12,95,560 135.79 12,95,560 141.08

8.20% - Series I - 01-Feb-2022 1,000 – – 1,00,000 10.34

REC Limited

7.22% - Series 1 - 19-Dec-2022 1,000 30,00,000 304.51 30,00,000 313.23

8.01% - Series 3 A - 29-Aug-2023 10,00,000 1,000 103.96 1,000 107.82

Taxable Bonds - Unsecured, Redeemable &

Non-Convertible

Export Import Bank of India

9.15% - Series P16 - 05-Sep-2022 10,00,000 300 30.59 300 31.90

INVESTMENT IN DEBT MUTUAL FUNDS

Quoted

Bharat Bond ETF - April 2023 1,000 30,00,000 351.13 30,00,000 335.10

Nippon India ETF Nifty CPSE Bond Plus

SDL - 2024 Maturity 10 58,69,560 63.61 58,69,560 60.46

Unquoted

Liquid / Overnight Funds

Axis Mutual Fund 1,000 – – 11,33,416 148.69

Carried over 1406.71 1692.40

172 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

9. 
Current Investments (at fair value through profit or loss, unless
stated otherwise) (Contd.)

Brought forward 1406.71 1692.40

INVESTMENT IN DEBT MUTUAL FUNDS (Contd.)

DSP Mutual Fund 1,000 – – 33,41,890 975.72

ICICI Prudential Mutual Fund 100 – – 5,07,333 15.46

LIC Mutual Fund 1,000 – – 1,63,399 60.50

Nippon India Mutual Fund 100 87,91,983 100.01 – –

Nippon India Mutual Fund 1,000 – – 92,869 46.74

SBI Mutual Fund 1,000 – – 25,773 8.26

UTI Mutual Fund 1,000 – – 16,91,359 567.38

Ultra Short Term Funds

Aditya Birla Sun Life Mutual Fund 100 1,86,63,673 828.81 1,86,63,673 794.72

Kotak Mahindra Mutual Fund 10 23,75,47,122 850.55 23,75,47,122 819.42

SBI Mutual Fund 1,000 2,47,159 121.04 2,47,159 116.63

Low Duration Funds

Axis Mutual Fund 1,000 14,17,525 367.15 14,17,525 351.91

DSP Mutual Fund 10 17,22,63,805 277.37 17,22,63,805 267.44

ICICI Prudential Mutual Fund 100 53,44,324 233.93 53,44,324 224.30

IDFC Mutual Fund 10 7,34,11,386 233.89 7,34,11,386 225.06

SBI Mutual Fund 1,000 8,30,697 241.68 8,30,697 232.24

Money Market Funds

Aditya Birla Sun Life Mutual Fund 100 40,95,539 122.42 40,95,539 117.61

HDFC Mutual Fund 1,000 2,39,118 111.30 2,39,118 106.98

IDFC Mutual Fund 10 4,22,87,680 147.67 4,22,87,680 142.29

Nippon India Mutual Fund 1,000 6,60,345 221.25 6,60,345 212.68

SBI Mutual Fund 10 6,33,58,708 225.31 6,33,58,708 216.66

Floating Rate Funds

Aditya Birla Sun Life Mutual Fund 100 1,94,01,569 550.13 1,94,01,569 525.17

HDFC Mutual Fund 10 10,07,90,662 404.13 10,07,90,662 385.94

Nippon India Mutual Fund 10 6,22,64,756 235.01 6,22,64,756 224.08

Carried over 6678.36 8329.59

ITC Limited REPORT AND ACCOUNTS 2022 173

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

9. 
Current Investments (at fair value through profit or loss, unless
stated otherwise) (Contd.)

Brought forward 6678.36 8329.59

INVESTMENT IN DEBT MUTUAL FUNDS (Contd.)

Short Term Funds

Axis Mutual Fund 10 – – 4,31,15,900 109.52

DSP Mutual Fund 10 3,12,12,253 126.54 6,67,71,463 259.37

IDFC Mutual Fund 10 6,58,03,493 322.42 6,58,03,493 308.37

Nippon India Mutual Fund 10 3,86,19,184 175.83 8,93,74,937 384.78

SBI Mutual Fund 10 5,40,50,081 147.17 9,72,90,145 253.24

Banking & PSU Debt Funds

Axis Mutual Fund 1,000 31,86,227 689.41 31,86,227 662.25

IDFC Mutual Fund 10 14,17,61,931 283.77 14,17,61,931 272.68

Nippon India Mutual Fund 10 – – 10,41,55,094 167.84

Corporate Bond Funds

Aditya Birla Sun Life Mutual Fund 10 70,15,575 63.27 70,15,575 60.27

ICICI Prudential Mutual Fund 10 2,42,40,779 59.60 13,34,45,209 313.69

Kotak Mahindra Mutual Fund 1,000 – – 6,68,442 196.74

Current Portion of Non-current Investment

INVESTMENT IN PREFERENCE SHARES

(at amortised cost)

In Subsidiaries

Unquoted

North East Nutrients Private Limited

(Cumulative Redeemable Preference Shares) 100 18,00,000 18.00 – –

INVESTMENT IN BONDS IN THE NATURE OF

DEBENTURES (at amortised cost)

Quoted

Tax Free Bonds - Secured, Redeemable &

Non-Convertible

Housing and Urban Development

Corporation Limited

7.34% - Series 1 - 16-Feb-2023 1,000 3,29,870 33.27 – –

8.10% - Series 1 - 05-Mar-2022 1,000 – – 3,50,000 35.52

Carried over 8597.64 11353.86

174 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

9. 
Current Investments (at fair value through profit or loss, unless
stated otherwise) (Contd.)
Brought forward 8597.64 11353.86

INVESTMENT IN BONDS IN THE NATURE OF

DEBENTURES (Contd.)

India Infrastructure Finance Company Limited

7.19% - Series I - 22-Jan-2023 1,000 5,00,000 50.34 – –

Indian Railway Finance Corporation Limited

7.18% - Series 86 - 19-Feb-2023 1,000 5,00,000 50.37 – –

8.00% - Series 80 - 23-Feb-2022 1,000 – – 3,31,819 33.68

Taxable Bonds - Unsecured, Redeemable &

Non-Convertible

Housing and Urban Development

Corporation Limited

6.99% - Series E - 11-Nov-2022 10,00,000 700 70.05 – –

7.61% - Series A - 22-Jun-2022 10,00,000 250 25.02 – –

8.40% - Series C - 11-Apr-2022 10,00,000 850 85.00 – –

National Bank for Agriculture and Rural

Development

4.60% - Series 21 E - 29-Jul-2024 (with Put and Call

10,00,000 5,000 499.95 – –
option on 29-Jul-2022)

6.70% - Series 20 H - 11-Nov-2022 10,00,000 250 25.00 – –

6.98% - Series 20 G - 19-Sep-2022 10,00,000 2,000 200.00 – –

7.70% - Series 20 D - 13-Jun-2022 10,00,000 500 50.09 – –

7.85% - Series 20 B - 23-May-2022 10,00,000 900 90.13 – –

7.90% - Series 20 A - 18-Apr-2022 10,00,000 600 60.02 – –

8.60% - Series 19 B - 31-Jan-2022 10,00,000 – – 1,000 101.22

Power Finance Corporation Limited

7.10% - Series 169 A - 08-Aug-2022 10,00,000 700 70.02 – –

7.35% - Series 191 - 15-Oct-2022 10,00,000 4,500 450.00 – –

7.47% - Series 151 A - 16-Sep-2021 10,00,000 – – 150 15.01

8.45% - Series 181 - 11-Aug-2022 10,00,000 250 25.14 – –

8.66% - Series 123 C - 27-Nov-2021 10,00,000 – – 150 15.12

Carried over 10348.77 11518.89

ITC Limited REPORT AND ACCOUNTS 2022 175

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

9. 
Current Investments (at fair value through profit or loss, unless
stated otherwise) (Contd.)
Brought forward 10348.77 11518.89

INVESTMENT IN BONDS IN THE NATURE OF

DEBENTURES (Contd.)

REC Limited

7.09% - Series 152 - 17-Oct-2022 10,00,000 300 29.95 – –

7.09% - Series 185 - 13-Dec-2022 10,00,000 2,000 200.00 – –

8.45% - Series 167 - 22-Mar-2022 10,00,000 – – 1,700 170.27

8.50% - Series 177 - 20-Dec-2021 10,00,000 – – 2,880 288.00

Small Industries Development Bank of India

7.89% - Series III - 15-Nov-2022 (with Put and Call

option on 14-May-2021) 10,00,000 – – 2,500 250.05

Taxable Bonds - Secured, Redeemable &

Non-Convertible

LIC Housing Finance Limited

7.67% - Tranche 339 - 29-Jul-2021 10,00,000 – – 400 40.04

8.30% - Tranche 304 - 15-Jul-2021 10,00,000 – – 100 10.02

8.37% - Tranche 294 - 10-May-2021 10,00,000 – – 550 55.06

Zero Coupon Bonds - Secured, Redeemable &

Non-Convertible

LIC Housing Finance Limited

Tranche 378 - 04-May-2022 10,00,000 500 64.78 – –

Perpetual Bonds - Unsecured, Subordinated &

Non-Convertible#

ICICI Bank Limited

9.20% - Series DMR 17AT (with first Call option on

10,00,000 – – 2,000 200.07
17-Mar-2022)

State Bank of India

8.39% - Series III (with first Call option on

10,00,000 – – 1,550 154.64
25-Oct-2021)

9.00% - Series I (with first Call option on

06-Sep-2021) 10,00,000 – – 3,250 325.12

Carried over 10643.50 13012.16

176 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

9. 
Current Investments (at fair value through profit or loss, unless
stated otherwise) (Contd.)

Brought forward 10643.50 13012.16

INVESTMENT IN DEBT MUTUAL FUNDS

Quoted
Fixed Maturity Plans

Aditya Birla Sun Life Mutual Fund 10 11,70,00,000 150.27 8,50,00,000 107.61

DSP Mutual Fund 10 – – 4,90,00,000 61.78

Franklin India Mutual Fund 10 – – 1,40,00,000 17.66

HDFC Mutual Fund 10 4,00,00,000 52.17 6,50,00,000 81.86

ICICI Prudential Mutual Fund 10 10,20,00,000 131.07 31,10,00,000 393.39

IDFC Mutual Fund 10 2,20,00,000 27.97 – –

Kotak Mahindra Mutual Fund 10 19,70,00,000 254.79 7,20,00,000 90.69

Nippon India Mutual Fund 10 8,50,00,000 113.61 9,90,00,000 125.19

SBI Mutual Fund 10 19,70,00,000 251.57 5,50,00,000 69.26

UTI Mutual Fund 10 – – 6,90,00,000 87.11

Aggregate amount of quoted Investments 4467.29 4272.08

Aggregate amount of unquoted Investments 7157.66 9774.63

Total 11624.95 14046.71

Aggregate market value of quoted investments ` 4483.77 Crores (2021 - ` 4302.03 Crores).
# Additional
Tier 1 bonds, which are perpetual in nature, are issued by commercial banks under Reserve Bank of India guidelines.
These have been classified as debt instruments by the Company based on the substantive characteristics of the contract.

ITC Limited REPORT AND ACCOUNTS 2022 177

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

10. Trade receivables (Current)

Secured, considered good 55.09 45.32

Unsecured, considered good 1897.41 2044.97
Which have significant increase in credit risk – –
Credit impaired 170.65 161.69
Less: Allowance for Credit impairment 170.65 161.69

TOTAL 1952.50 2090.29

Trade receivables ageing schedule (` in Crores)

Outstanding for following periods from due date of payment as at 31st March, 2022

Less than 6 months- More than

Not Due 6 months 1 year 1-2 years 2-3 years 3 years Total

Undisputed Trade Receivables – considered

good 1230.08 705.49 11.16 5.31 0.32 0.14 1952.50
Undisputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Undisputed Trade Receivables – credit impaired – 1.33 4.80 25.85 5.16 19.67 56.81
Disputed Trade Receivables – considered good – – – – – – –
Disputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Disputed Trade Receivables – credit impaired – – 0.02 2.41 5.92 105.49 113.84
SUB-TOTAL 1230.08 706.82 15.98 33.57 11.40 125.30 2123.15
Less: Allowance for Credit Impairment 170.65
TOTAL 1952.50

(` in Crores)
Outstanding for following periods from due date of payment as at 31st March, 2021

Less than 6 months- More than

Not Due 6 months 1 year 1-2 years 2-3 years 3 years Total

Undisputed Trade Receivables – considered

good 1429.56 601.21 43.06 10.46 2.61 3.39 2090.29
Undisputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Undisputed Trade Receivables – credit impaired – 15.90 2.44 9.16 7.74 13.69 48.93
Disputed Trade Receivables – considered good – – – – – – –
Disputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Disputed Trade Receivables – credit impaired – 0.02 0.27 5.46 10.11 96.90 112.76
SUB-TOTAL 1429.56 617.13 45.77 25.08 20.46 113.98 2251.98
Less: Allowance for Credit Impairment 161.69
TOTAL 2090.29

178 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

11. Cash and cash equivalents@

Balances with Banks

Current accounts 181.46 227.64
Cheques, drafts on hand 0.89 1.27
Cash on hand 2.62 2.37

TOTAL 184.97 231.28

@ Cashand cash equivalents include cash on hand, cheques, drafts on hand, cash at bank and deposits with banks with original
maturity of 3 months or less.

12. Other bank balances

Earmarked balances 224.36 209.23

In deposit accounts* 3468.61 3561.02

TOTAL 3692.97 3770.25

* Represents deposits with original maturity of more than 3 months having remaining maturity of less than 12 months from the
Balance Sheet date.

ITC Limited REPORT AND ACCOUNTS 2022 179

Notes to the Financial Statements
As at As at As at As at
31st March, 2022 31st March, 2022 31st March, 2021 31st March, 2021
(No. of Shares) (` in Crores) (No. of Shares) (` in Crores)

13. Equity Share capital

Authorised
Ordinary Shares of ` 1.00 each 20,00,00,00,000 2000.00 20,00,00,00,000 2000.00
Issued and Subscribed
Ordinary Shares of ` 1.00 each, fully paid 12,32,32,55,931 1232.33 12,30,88,44,231 1230.88

A) Reconciliation of number of
Ordinary Shares outstanding
As at beginning of the year 12,30,88,44,231 1230.88 12,29,22,31,241 1229.22
Add: Issue of Shares on exercise
of Options 1,44,11,700 1.44 1,66,12,990 1.66
As at end of the year 12,32,32,55,931 1232.33 12,30,88,44,231 1230.88

B) Shareholders holding more than 5% of the Ordinary Shares in the Company

As at As at As at As at
31st March, 2022 31st March, 2022 31st March, 2021 31st March, 2021
(No. of Shares) % (No. of Shares) %

Tobacco Manufacturers (India) Limited 2,97,83,47,320 24.17 2,97,83,47,320 24.20

Life Insurance Corporation of India 1,95,02,36,958 15.83 1,99,75,66,067 16.23
Specified Undertaking of the
Unit Trust of India 97,45,31,427 7.91 97,45,31,427 7.92

C) Shareholding of Promoters: Nil

D) Ordinary Shares allotted as fully paid pursuant to contract(s) without payment being received in cash during the period of
five years immediately preceding 31st March: Nil

E) Ordinary Shares allotted as fully paid up Bonus Shares for the period of five years immediately preceding 31st March
2022 2021
(No. of Shares) (No. of Shares)

Bonus Shares issued in 2016-17 4,02,66,57,100 4,02,66,57,100

F) Rights, preferences and restrictions attached to the Ordinary Shares

The Ordinary Shares of the Company, having par value of ` 1.00 per share, rank pari passu in all respects including voting rights and
entitlement to dividend.

G) Shares reserved for issue under Options

As at As at
31st March, 2022 31st March, 2021
(No. of Shares) (No. of Shares)

Ordinary Shares of ` 1.00 each 22,76,87,310 29,18,12,920

Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be allotted ten Ordinary Shares of the Company of ` 1.00 each upon payment of the exercise
price during the exercise period. The exercise period commences from the date of vesting of the Options and expires at the end of five years from
the date of vesting in respect of Options.
The vesting period for conversion of Options is as follows:
On completion of 12 months from the date of grant of the Options : 30% vests
On completion of 24 months from the date of grant of the Options : 30% vests
On completion of 36 months from the date of grant of the Options : 40% vests
The Options have been granted at the ‘market price’ as defined under the Securities and Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021.
Further details of ITC Employee Stock Option Schemes are provided in Note 27(ix).

180 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

14. Borrowings

Unsecured
Deferred payment liabilities
Sales tax deferment loans* 0.74 4.54 0.35 5.28

TOTAL 0.74 4.54 0.35 5.28

*Interest free deferral period of 14 years and repayable by 2025-26.

The repayment schedule is summarised as under:

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

In the first year 0.74 0.35

In the second year 1.26 0.74
In the third to fifth year 3.28 4.54

TOTAL 5.28 5.63

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

15. Lease Liabilities *

Lease Liabilities 46.09 259.79 51.36 272.36

TOTAL 46.09 259.79 51.36 272.36

* Refer Note 27(vi)

Movement of Lease Liabilities during the year

Particulars 31st March, 2022 31st March, 2021

Opening Lease Liabilities 323.72 324.12

New Leases recognised 40.52 55.90
Remeasurements and withdrawals (3.94) (6.63)
Interest expense on Lease Liabilities 26.96 28.02
Payment of Lease Liabilities (81.38) (77.69)

Closing Lease Liabilities 305.88 323.72

ITC Limited REPORT AND ACCOUNTS 2022 181

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

16. Other financial liabilities

Non-current
Others
(Includes liability in respect of cash-settled share based payments,
retention money payable towards property, plant and equipment,
contingent consideration on business combination etc.) 96.50 239.35

TOTAL 96.50 239.35

Current
Interest accrued 1.71 1.90
Unpaid dividend * 224.13 209.00
Unpaid matured deposits and interest accrued thereon … …
Unpaid matured debentures / bonds and interest accrued thereon ** 0.30 0.30
Others (Includes liability in respect of cash-settled share based payments,
payable towards property, plant and equipment, derivatives designated as
hedging instruments, contingent consideration on business combination etc.) 1277.45 1036.62

TOTAL 1503.59 1247.82

* Represents dividend amounts either not claimed or kept in abeyance in accordance with Section 126 of the Companies Act, 2013
or such amounts in respect of which Prohibitory / Attachment Orders are on record with the Company.
** Represents amounts which are subject matter of a pending legal dispute with a bank for which the Company has filed a suit.

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

17. Provisions

Provision for employee benefits [Refer Note 27(v)]

Retirement benefits 47.11 126.57 156.53 107.91
Other benefits 8.49 60.30 12.52 49.16

TOTAL 55.60 186.87 169.05 157.07

182 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

18. Deferred tax liabilities (Net)

Deferred tax liabilities 2004.26 2014.01

Less: Deferred tax assets 337.12 286.28
TOTAL 1667.14 1727.73

(` in Crores)
Acquired in Recognised Recognised Reclassified
 ovement in deferred tax liabilities / assets
M Opening Business in profit or Recognised directly in to Profit or Closing
balances Balance Combination loss in OCI Equity loss Balance
2021-22
Deferred Tax liabilities / assets in relation to:
On fiscal allowances on property, plant and
equipment, investment property etc. 1627.98 – 14.08 – – – 1642.06
On Excise Duty / National Calamity Contingent
Duty on closing stock 72.25 – 6.96 – – – 79.21
On cash flow hedges 1.66 – – 9.05 2.44 (8.33) 4.82
Other timing differences 312.12 – (34.88) 0.93 – – 278.17
Total deferred tax liabilities 2014.01 – (13.84) 9.98 2.44 (8.33) 2004.26
On employees’ separation and retirement etc. 59.00 – 1.09 2.50 – – 62.59
On provision for doubtful debts / advances 50.73 – 2.38 – – – 53.11
On State and Central taxes etc. 64.36 – 5.26 – – – 69.62
Other timing differences 112.19 – 39.61 – – – 151.80
Total deferred tax assets 286.28 – 48.34 2.50 – – 337.12
Deferred tax liabilities (Net) 1727.73 – (62.18) 7.48 2.44 (8.33) 1667.14

2020-21
Deferred Tax liabilities / assets in relation to:
On fiscal allowances on property, plant and
equipment, investment property etc. 1617.33 3.79 6.86 – – – 1627.98
On Excise Duty / National Calamity Contingent
Duty on closing stock 46.09 – 26.16 – – – 72.25
On cash flow hedges (8.19) – – 10.44 1.26 (1.85) 1.66
Other timing differences 258.86 0.12 53.14 – – – 312.12
Total deferred tax liabilities 1914.09 3.91 86.16 10.44 1.26 (1.85) 2014.01
On employees’ separation and retirement etc. 53.32 0.33 4.91 0.44 – – 59.00
On provision for doubtful debts / advances 36.64 – 14.09 – – – 50.73
On State and Central taxes etc. 103.42 – (39.06) – – – 64.36
Other timing differences 103.06 0.06 9.07 – – – 112.19
Total deferred tax assets 296.44 0.39 (10.99) 0.44 – – 286.28
Deferred tax liabilities (Net) 1617.65 3.52 97.15 10.00 1.26 (1.85) 1727.73

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

19. Other liabilities (Current)

Statutory Liabilities 3599.11 3263.04

Advances received from customers 1382.17 994.80
Others (includes deferred revenue, accruals, customer deposits etc.) 116.00 111.16
TOTAL 5097.28 4369.00

ITC Limited REPORT AND ACCOUNTS 2022 183

Notes to the Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

20. Current Tax Liabilities (Net)

Current taxation (net of advance payment) 551.39 217.06

TOTAL 551.39 217.06

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

21A. Revenue from operations

Sale of Products 57817.10 47523.65

Sale of Services 1283.99 627.61
Gross Revenue from sale of products and services* [including Excise
Duty / National Calamity Contingent Duty of ` 3376.63 Crores
(2021 - ` 2935.48 Crores)] 59101.09 48151.26
Other Operating Revenues # 644.47 373.30

TOTAL 59745.56 48524.56

* Net of sales returns and damaged stocks.

# Includes Government grants of ` 258.92 Crores (2021 - ` 42.57 Crores) on account of Fiscal and Export Incentives etc.

21B. Gross Revenue from sale of products and services*

FMCG
– Cigarettes etc. 23451.39 20333.12
– Branded Packaged Food Products 13195.84 12241.16
– Others (Education and Stationery Products, Personal Care Products,
Safety Matches, Agarbattis, Apparel etc.) 2768.91 2467.48

Hotels
– Income from Sale of Services 1279.33 623.59

Agri Business
– Unmanufactured Tobacco 1797.44 1420.51
– Other Agri Products and Commodities (Wheat, Rice, Soya, Spices,
Coffee, Aqua etc.) 10328.61 6445.55

Paperboards, Paper and Packaging

– Paperboards and Paper 5586.19 4019.53
– Printed Materials 693.38 600.32

TOTAL 59101.09 48151.26

* Net of sales returns and damaged stocks.

184 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

22. Other income

Interest income 1004.59 1224.82

Dividend income 857.46 723.94
Other non-operating income 141.19 141.36
Other gains and losses 586.73 1160.87
TOTAL 2589.97 3250.99

Interest income:
a) Deposits with banks etc. - carried at amortised cost 177.50 310.82
b) Financial assets:
– mandatorily measured at FVTPL 87.96 119.04
– measured at amortised cost 735.32 698.27
– measured at FVTOCI 3.79 –
c) Others (from statutory authorities etc.) 0.02 96.69
TOTAL 1004.59 1224.82

Dividend income:
a) Equity instruments measured at FVTOCI held at the end of
reporting period 0.01 0.02
b) Other investments 857.45 723.92
TOTAL 857.46 723.94

Other gains and losses:

Net foreign exchange gain / (loss) 31.94 (1.27)
 et gain / (loss) arising on financial instruments mandatorily
N
measured at FVTPL* 554.79 1162.14
TOTAL 586.73 1160.87

* Includes ` 186.06 Crores (2021 - ` 353.96 Crores) being net gain / (loss) on sale of investments.

23. Employee benefits expense

Salaries and wages 2634.04 2423.33

Contribution to Provident and other funds 169.85 182.14
Share based payments to employees {Includes cash-settled
share based payments ` 28.68 Crores [2021 - ` 29.54 Crores]} 61.19 56.69
Staff welfare expenses 238.37 197.49
3103.45 2859.65
Less: Recoveries made / reimbursements received 41.46 38.70
TOTAL 3061.99 2820.95

24. Finance costs

Interest expense:
– On Lease Liabilities 26.87 27.93
– On other financial liabilities measured at amortised cost 2.18 2.04
– Others 12.90 17.50
TOTAL 41.95 47.47

ITC Limited REPORT AND ACCOUNTS 2022 185

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

25. Other Expenses

Power and fuel 864.05 672.11

Consumption of stores and spare parts 353.48 266.68
Contract processing charges 814.41 671.80
Rent 196.00 211.59
Rates and taxes 114.59 81.64
Insurance 122.39 125.33
Repairs
– Buildings 61.11 48.30
– Machinery 263.29 224.09
– Others 55.05 41.02
Maintenance and upkeep 251.89 225.72
Outward freight and handling charges 1624.97 1312.09
Warehousing charges 200.35 160.45
Advertising / Sales promotion 980.63 1083.51
Market research 161.59 122.02
Design and product development 36.17 44.96
Hotel reservation / Marketing expenses 27.14 14.58
Retail accessories 206.54 134.35
Brokerage and discount - sales 23.55 15.33
Commission to selling agents 18.30 14.62
Doubtful and bad debts 10.64 25.98
Doubtful and bad advances, loans and deposits 1.15 33.04
Bank and credit card charges 18.58 11.47
Information technology services 274.48 247.41
Travelling and conveyance 182.18 139.07
Training and development 13.64 11.02
Legal expenses 30.42 21.25
Consultancy / Professional fees 153.08 135.01
Postage, telephone etc. 18.33 17.39
Printing and stationery 11.80 9.74
(Gain) / Loss on sale of property, plant and equipment – Net (58.77) 56.04
Loss on sale of stores and spare parts – Net 4.71 5.03
Miscellaneous expenses 1077.36 984.42
TOTAL 8113.10 7167.06
Miscellaneous expenses include:
(1) Auditors’ remuneration and expenses*
Audit fees 3.40 2.95
Tax audit fees 0.70 0.60
Fees for limited review 1.40 1.17
Fees for other services # 0.58 0.40
Reimbursement of expenses 0.01 0.15
(2) Cost auditors’ fees 0.11 0.11

* Excluding taxes.
# Auditors’ remuneration for current year excludes remuneration for services amounting to ` 1.88 Crores (2021 - ` 2.01 Crores)
rendered by network firm / entity which is a part of the network of which auditor is a member firm.

186 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

26. Income tax expenses

A. Amount recognised in profit or loss

Current tax
Income tax for the year 4803.32 3960.45
Adjustments / (credits) related to previous years - Net 30.56 74.91
Total current tax 4833.88 4035.36
Deferred tax
Deferred tax for the year (31.62) 172.06
Adjustments / (credits) related to previous years - Net (30.56) (74.91)
Total deferred tax (62.18) 97.15
TOTAL 4771.70 4132.51

B. Amount recognised in other comprehensive income

The tax (charge) / credit arising on income and expenses recognised in other comprehensive income is as follows:
On items that will not be reclassified to profit or loss
Remeasurements gains / (losses) on defined benefit plans (7.96) 0.44
Equity instruments through other comprehensive income – (1.62)
Related to designated portion of hedging instruments in cash flow hedges 3.00 1.67
(4.96) 0.49
On items that will be reclassified to profit or loss
Related to designated portion of hedging instruments in cash flow hedges (3.72) (10.26)
Debt instruments through other comprehensive income (0.93) –
TOTAL (9.61) (9.77)

C. Amount recognised directly in equity

The income tax (charged) / credited directly to equity during the year is as follows:
Deferred tax
 rising on gains / (losses) of hedging instruments in cash flow hedges
A
transferred to the initial carrying amounts of hedged items 2.44 1.26
TOTAL 2.44 1.26

D. Reconciliation of effective tax rate

The income tax expense for the year can be reconciled to the accounting profit as follows:
Profit before tax 19829.53 17164.19
Income Tax expense calculated @ 25.168% (2021- 25.168%) 4990.70 4319.87
Effect of tax relating to uncertain tax positions 26.73 25.59
Effect of different tax rate on certain items (79.46) (80.21)
Effect of Income not taxable (81.95) (82.39)
Other differences (84.32) (50.35)
Income Tax recognised in profit or loss 4771.70 4132.51

The tax rate of 25.168% (22% + surcharge @10% and cess @4%) used for the year 2021-22 and 2020-21 is the corporate tax rate applicable on
taxable profits under the Income-tax Act, 1961.

ITC Limited REPORT AND ACCOUNTS 2022 187

Notes to the Financial Statements

27. Additional Notes to the Financial Statements

(i) Earnings per share: 2022 2021

Earnings per share has been computed as under:    

(a) Profit for the year (` in Crores) 15057.83 13031.68
(b) Weighted average number of Ordinary shares outstanding for
the purpose of basic earnings per share 12,31,65,71,748 12,30,12,07,984
(c) Effect of potential Ordinary shares on Employee Stock Options
outstanding 54,47,370 12,73,424
(d) Weighted average number of Ordinary shares in computing
diluted earnings per share [(b) + (c)] 12,32,20,19,118 12,30,24,81,408
(e) Earnings per share on profit for the year
(Face Value ` 1.00 per share)
  – Basic [(a) / (b)] 12.22 10.59
  – Diluted [(a) / (d)] 12.22 10.59

(ii) Amount required to be spent by the Company during the year as per Section 135 read with Section 198 of the Companies
Act, 2013 - ` 354.27 Crores (2021 - ` 352.84 Crores) being 2% of the average Net Profit of the Company amounting to
` 354.89 Crores less set-off of excess CSR spend of ` 0.62 Crore pertaining to FY 2020-21.
Expenditure incurred during the year is ` 355.03 Crores (2021 - ` 353.46 Crores) comprising employee benefits expense of
` 15.92 Crores (2021 - ` 14.96 Crores) and other expenses of ` 339.11 Crores (2021 - ` 338.50 Crores), of which ` 26.01 Crores
(2021 - ` 11.94 Crores) is accrued for payment as on 31st March, 2022. The above includes an amount of ` 3.90 Crores with
regard to ongoing project of FY 2021-22, which has been deposited in the Unspent CSR Account in April, 2022.
Such CSR expenditure of ` 355.03 Crores (2021 - ` 353.46 Crores) excludes ` 5.85 Crores (2021 - ` 5.72 Crores) being the
excess of expenditure of salaries of CSR personnel and administrative expenses over the limit of 5% of total CSR expenditure
laid down under Rule 7(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 for such expenses.
CSR activities undertaken during the year pertain to: poverty alleviation; promoting education and skill development; promoting
healthcare including preventive healthcare; providing sanitation and drinking water; ensuring environmental sustainability;
enabling climate resilience; rural development projects; creating livelihoods for people (especially those from disadvantaged
sections of society); protection of national heritage, art and culture; preserving and promoting music; and providing relief and
assistance to victims of disasters and calamities.
(iii) Research and Development expenses for the year amount to ` 143.59 Crores (2021- ` 131.22 Crores).
(iv) Contingent liabilities and commitments:
(a) Contingent liabilities
Claims against the Company not acknowledged as debts ` 880.58 Crores (2021 - ` 884.97 Crores), including interest on
claims, where applicable, estimated to be ` 285.07 Crores (2021 - ` 257.55 Crores). These comprise:
Excise duty, VAT / sales taxes, GST and other indirect taxes claims disputed by the Company relating to issues of
applicability and classification aggregating ` 593.95 Crores (2021 - ` 608.26 Crores), including interest on claims, where
applicable, estimated to be ` 267.18 Crores (2021 - ` 245.88 Crores).
Local Authority taxes / cess / royalty on property, utilities, etc. claims disputed by the Company relating to issues of
applicability and determination aggregating ` 236.63 Crores (2021 - ` 231.50 Crores), including interest on claims,
where applicable, estimated to be ` 11.22 Crores (2021 - ` 5.40 Crores).
Third party claims arising from disputes relating to contracts aggregating ` 29.22 Crores (2021 - ` 32.41 Crores),
including interest on claims, where applicable, estimated to be ` 0.10 Crore (2021 - ` 0.88 Crore).
Other matters ` 20.78 Crores (2021 - ` 12.80 Crores), including interest on other matters, where applicable, estimated
to be ` 6.57 Crores (2021 - ` 5.39 Crores).
It is not practicable for the Company to estimate the closure of these issues and the consequential timings of cash flows,
if any, in respect of the above.

188 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

(b) Commitments

Estimated amount of contracts remaining to be executed on capital accounts and not provided for ` 984.51 Crores
(2021 - ` 1398.30 Crores).

Uncalled liability on investments partly paid is ` 54.89 Crores (2021 - ` 55.88 Crores).

Defined Benefit Plans / Long Term Compensated Absences: -

(v) (a)

Description of Plans

The Company makes contributions to both Defined Benefit and Defined Contribution Plans for qualifying employees. These
Plans are administered through approved Trusts, which operate in accordance with the Trust Deeds, Rules and applicable
Statutes. The concerned Trusts are managed by Trustees who provide strategic guidance with regard to the management
of their investments and liabilities and also periodically review their performance.

Provident Fund, Pension and Gratuity Benefits are funded and Leave Encashment Benefits are unfunded in nature.
The Defined Benefit Pension Plans are based on employees’ pensionable remuneration and length of service. Under the
Provident Fund, Gratuity and Leave Encashment Schemes, employees are entitled to receive lump sum benefits.

The liabilities arising in the Defined Benefit Schemes are determined in accordance with the advice of independent,
professionally qualified actuaries, using the projected unit credit method. The Company makes regular contributions to
these Defined Benefit Plans. Additional contributions are made to these plans as and when required based on actuarial
valuation. Some Group companies also participate in these Plans. These participating Group companies make contributions
to the Plans for their respective employees on a uniform basis and each entity ascertains their obligation through actuarial
valuation. The net Defined Benefit cost is recognised by these companies in their respective Financial Statements.

Risk Management

The Defined Benefit Plans expose the Company to risk of actuarial deficit arising out of investment risk, interest rate risk and
salary cost inflation risk.

Investment Risk: This may arise from volatility in asset values due to market fluctuations and impairment of assets due to
credit losses. These Plans primarily invest in debt instruments such as Government securities and highly rated corporate
bonds – the valuation of which is inversely proportional to the interest rate movements.

Interest Rate Risk: The present value of Defined Benefit Plans liability is determined using the discount rate based on the
market yields prevailing at the end of reporting period on Government securities. A decrease in yields will increase the fund
liabilities and vice-versa.

Salary Cost Inflation Risk: The present value of the Defined Benefit Plan liability is calculated with reference to the future
salaries of participants under the Plan. Increase in salary might lead to higher liabilities.

These Plans have a relatively balanced mix of investments in order to manage the above risks. The investment strategy is
designed based on the interest rate scenario, liquidity needs of the Plans and pattern of investment as prescribed under
various statutes.

The Trustees regularly monitor the funding and investments of these Plans. Risk mitigation systems are in place to ensure
that the health of the portfolio is regularly reviewed and investments do not pose any significant risk of impairment. Periodic
audits are conducted to ensure adequacy of internal controls. Pension obligation of the employees is secured by purchasing
annuities thereby de-risking the Plans from future payment obligation.

ITC Limited REPORT AND ACCOUNTS 2022 189

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
Funded Unfunded Funded Unfunded
I Components of Employer Expense
– Recognised in the Statement of
Profit and Loss
  1 Current Service Cost 44.87 32.93 10.74 49.90 31.59 9.21
  2 Past Service Cost – – – – – –
  3 Net Interest Cost 1.88 (0.95) 7.88 (0.13) (0.18) 7.33
  4 Total expense recognised in the
Statement of Profit and Loss 46.75 31.98 18.62 49.77 31.41 16.54
– Re-measurements recognised in
Other Comprehensive Income
5 Return on plan assets (excluding amounts
included in Net interest cost) (7.07) (5.65) – (40.28) (4.33) –
6 Effect of changes in demographic
assumptions 4.44 (1.83) 0.12 – – –
7 Effect of changes in financial assumptions (3.43) (7.77) 0.07 – – –
8 Changes in asset ceiling (excluding
interest income) – – – – – –
9 Effect of experience adjustments (35.49) 17.99 7.00 68.63 0.84 5.24
10 Total re-measurements included in
Other Comprehensive Income (41.55) 2.74 7.19 28.35 (3.49) 5.24
11 Total defined benefit cost
recognised in the Statement of
Profit and Loss and Other
Comprehensive Income (4+10) 5.20 34.72 25.81 78.12 27.92 21.78
  The current service cost, past service cost and net interest cost for the year, as applicable, pertaining to Pension and
Gratuity expenses have been recognised in “Contribution to Provident and other funds” and Leave Encashment in
“Salaries and wages” under Note 23. The remeasurements of the net defined benefit liability are included in Other
Comprehensive Income.
(` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
II Actual Returns 60.36 29.97 – 90.51 27.01 –
III Net Asset / (Liability) recognised
in Balance Sheet
1 Present Value of Defined Benefit
Obligation 897.75 416.05 144.48 933.22 396.43 133.52
2 Fair Value of Plan Assets 882.68 401.92 – 822.53 376.20 –
3 Status [Surplus / (Deficit)] (15.07) (14.13) (144.48) (110.69) (20.23) (133.52)
4 Restrictions on Asset Recognised – – – – – –

190 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
27. Additional Notes to the Financial Statements (Contd.)

(` in Crores)
5 Net Asset / (Liability) recognised in
As at 31st March, 2022 As at 31st March, 2021
Balance Sheet

Current Non-current Current Non-current

– Pension (15.07) – (110.69) –
– Gratuity (14.13) – (20.23) –
– Leave Encashment (17.91) (126.57) (25.61) (107.91)

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
IV Change in Defined Benefit
Obligation (DBO)

  1 Present Value of DBO at the beginning

of the year 933.22 396.43 133.52 838.37 377.93 122.67
  2 Current Service Cost 44.87 32.93 10.74 49.90 31.59 9.21
3 Past Service Cost – – – – – –
  4 Interest Cost 55.17 23.37 7.88 50.10 22.50 7.33
5 Remeasurement gains / (losses):
a. Effect of changes in
demographic assumptions 4.44 (1.83) 0.12 – – –
b. Effect of changes in financial
assumptions (3.43) (7.77) 0.07 – – –
c. Changes in asset ceiling (excluding
interest income) – – – – – –
d. Effect of experience adjustments (35.49) 17.99 7.00 68.63 0.84 5.24
6 Curtailment Cost / (Credits) – – – – – –
7 Settlement Cost / (Credits) – – – – – –
8 Liabilities assumed in business
combination – – – – 2.59 –
9 Effects of transfer In / (Out) (0.07) – – (0.06) – –
  10 Benefits Paid (100.96) (45.07) (14.85) (73.72) (39.02) (10.93)
  11 Present Value of DBO at the
end of the year 897.75 416.05 144.48 933.22 396.43 133.52
(` in Crores)
V Best Estimate of Employers’ Expected
As at 31st March, 2022 As at 31st March, 2021
Contribution for the next year

– Pension 70.95 164.33

– Gratuity 58.88 60.35

ITC Limited REPORT AND ACCOUNTS 2022 191

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
VI Change in Fair Value of Assets
1 Plan Assets at the beginning
of the year 822.53 376.20 – 784.83 349.57 –
Asset acquired in Business
2
Combination – – – – 1.88 –
3 Interest Income 53.29 24.32 – 50.23 22.68 –
4 Remeasurement Gains / (Losses)
on plan assets 7.07 5.65 – 40.28 4.33 –
5 Actual Company Contributions 100.82 40.82 – 20.97 36.76 –
6 Benefits Paid (100.96) (45.07) – (73.72) (39.02) –
7 Effects of transfer In / (Out) (0.07) – – (0.06) – –
8 Plan Assets at the end of the year 882.68 401.92 – 822.53 376.20 –

VII Actuarial Assumptions As at 31st March, 2022 As at 31st March, 2021

Discount Rate (%) Discount Rate (%)

1 Pension 6.75 6.25
2 Gratuity 6.75 6.25
3 Leave Encashment 6.75 6.25
The estimates of future salary increases, generally between 4% to 5.5%, considered in actuarial valuations take account
of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

VIII Major Category of Plan Assets as a %

As at 31st March, 2022 As at 31st March, 2021
of the Total Plan Assets

1 Government Securities / Special
Deposit with RBI 17.96% 24.25%
2 High Quality Corporate Bonds 11.15% 11.50%
3 Insurer Managed Funds* 62.34% 53.19%
4 Mutual Funds 4.39% 3.51%
5 Cash and Cash Equivalents 4.16% 5.74%
6 Term Deposits – 1.81%
* In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition
of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has
not been disclosed.

The fair value of Government securities, corporate bonds and mutual funds are determined based on quoted market prices
in active markets. The employee benefit plans do not hold any securities issued by the Company.

192 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

IX Basis used to determine the Expected Rate of Return on Plan Assets

The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market
scenario. In order to protect the capital and optimize returns within acceptable risk parameters, the plan assets are well
diversified.

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
X Net Asset / (Liability) recognised
in Balance Sheet (including experience
adjustment impact)
1 Present Value of Defined
Benefit Obligation 897.75 416.05 144.48 933.22 396.43 133.52
2 Fair Value of Plan Assets 882.68 401.92 – 822.53 376.20 –
3 Status [Surplus / (Deficit)] (15.07) (14.13) (144.48) (110.69) (20.23) (133.52)
4 Experience Adjustment of
Plan Assets [Gain / (Loss)] 7.07 5.65 – 40.28 4.33 –
5 Experience Adjustment of
obligation [(Gain) / Loss ] (35.49) 17.99 7.00 68.63 0.84 5.24

XI Sensitivity Analysis
The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring
at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact
of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant,
in practice such assumptions rarely change in isolation and the asset value changes may partially offset this impact. For presenting
the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at
the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above.
There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.
(` in Crores)
DBO as at 31st March, 2022 DBO as at 31st March, 2021

1 Discount Rate + 100 basis points 1375.72 1378.32

2 Discount Rate - 100 basis points 1552.14 1559.76
3 Salary Increase Rate + 1% 1543.65 1549.04
4 Salary Increase Rate – 1% 1377.35 1386.12

(` in Crores)
Maturity Analysis of the Benefit Payments As at 31st March, 2022 As at 31st March, 2021

1 Year 1 236.75 238.72

2 Year 2 155.17 179.18
3 Year 3 176.96 114.90
4 Year 4 180.08 122.60
5 Year 5 154.62 142.90
6 Next 5 Years 437.59 441.21

ITC Limited REPORT AND ACCOUNTS 2022 193

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

(b) Amounts towards Defined Contribution Plans have been recognised under “Contribution to Provident and other funds” in
Note 23: ` 91.12 Crores (2021 - ` 100.96 Crores).

(vi) Leases:

As a Lessee

The Company’s significant leasing arrangements are in respect of operating leases for land, buildings, (comprising licensed
properties, residential premises, office premises, stores, warehouses etc.) and plant & equipment. These arrangements
generally range between 2 years and 10 years, except for certain land and building leases where the lease term ranges up
to 99 years. The lease arrangements have extension / termination options exercisable by either parties which may make the
assessment of lease term uncertain. While determining the lease term, all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option are considered.

The amount of ROU Assets and Lease Liabilities recognised in the Balance Sheet are disclosed in Note 3G and Note 15
respectively. The total cash outflow for leases for the year is ` 359.73 Crores (2021 - ` 373.38 Crores) [including payments
of ` 275.66 Crores (2021 - ` 295.00 Crores) in respect of short-term / low-value leases and variable lease payments of
` 2.69 Crores (2021 - ` 0.69 Crore)].

The sensitivity of variable lease payments and effect of extension / termination options not included in measurement of lease
liabilities is not material.

The undiscounted maturities of lease liabilities over the remaining lease term is as follows:

(` in Crores)
Term As at 31st March, 2022 As at 31st March, 2021

Not later than three years 166.77 177.64

Later than three years and not later than ten years 158.02 169.20
Later than ten years and not later than twenty five years 212.58 219.49
Later than twenty five years and not later than fifty years 210.91 216.76
Later than fifty years 198.24 203.64

As a Lessor

The Company has leased out its investment properties etc. under operating lease for periods ranging upto 30 years. Lease
payments are structured with periodic escalations consistent with the prevailing market conditions. There are no variable lease
payments. The details of income from such leases are disclosed under Note 3C and Note 22. The Company does not have any
risk relating to recovery of residual value of investment property at the end of leases considering the business requirements and
other alternatives.

The undiscounted minimum lease payments to be received over the remaining non-cancellable term on an annual basis are as
follows:

(` in Crores)
Term As at 31st March, 2022 As at 31st March, 2021

1st year 17.18 91.40

2nd year 1.10 17.18
3rd year 0.56 1.10
4th year 0.58 0.56
5th year 0.61 0.58
Beyond 5 years 26.95 27.57

194 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

Under the terms of the Joint Venture Agreement (JVA), Logix Developers Private Limited (LDPL) (CIN: U70101DL2010PTC207640)
(vii) 
was to develop a luxury hotel-cum-service apartment complex. However, Logix Estates Private Limited, Noida, the JV partner
communicated its intention to explore alternative development plans to which the Company reiterated that it was committed
only to the project as envisaged in the JVA. The JV partner refused to progress the project and instead expressed its intent to
exit the JV by selling its stake to the Company and subsequently proposed that both parties should find a third party to sell the
entire shareholding in LDPL. The resultant deadlock has stalled the project. The Company’s petition that the affairs of the JV are
being conducted in a manner that is prejudicial to the interest of the Company and the JV entity, as also a petition for winding
up of LDPL filed by Logix Estates, are currently before the Hon’ble National Company Law Tribunal. The financial statements of
LDPL for the year ended 31st March, 2022 are yet to be approved by its Board of Directors.

(viii) During the year, the Scheme for Amalgamation of Hobbits International Foods Private Limited (Hobbits) and Sunrise Sheetgrah
Private Limited (Sheetgrah) with the Company was sanctioned by the Hon’ble National Company Law Tribunal, Allahabad
Bench, which became effective from 12th August, 2021. The fair value of assets and liabilities of Hobbits and Sheetgrah have
been recorded in accordance with Ind AS 103 - ‘Business Combinations’. The financial statements, therefore, reflect the effect of
the Scheme from 27th July, 2020 (being the appointed date) and figures for the previous periods have been restated, wherever
necessary. The consequential effect of the above is not material.

(ix) Information in respect of Options granted under the Company’s Employee Stock Option Schemes (‘Schemes’):

Sl. ITC Employee Stock Option ITC Employee Stock Option

No. Scheme - 2006 Scheme - 2010

1. Date of Shareholders’ : 22-01-2007 23-07-2010

approval

2. Total number of Options : Options equivalent to 37,89,18,503 Options equivalent to 55,60,44,823

approved under the Schemes Ordinary Shares of ` 1.00 each Ordinary Shares of ` 1.00 each
(Adjusted for Bonus Shares
issued in terms of
Shareholders’ approval)

3. Vesting Schedule : The vesting period for conversion of Options is as follows:

On completion of 12 months from the date of grant of the Options : 30% vests
On completion of 24 months from the date of grant of the Options : 30% vests
On completion of 36 months from the date of grant of the Options : 40% vests

4. Pricing Formula : The Pricing Formula, as approved by the Shareholders of the Company, is such price,
as determined by the Nomination & Compensation Committee, which is no lower
than the closing price of the Company’s Share on the National Stock Exchange of
India Limited (‘the NSE’) on the date of grant, or the average price of the Company’s
Share in the six months preceding the date of grant based on the daily closing
price on the NSE, or the ‘market price’ as defined from time to time under the
Securities and Exchange Board of India (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021.
The Options have been granted at ‘market price’ as defined under the aforesaid Regulations.

5. Maximum term of Options : Five years - the exercise period commences from the date of vesting of the Options
granted granted and expires at the end of five years from the date of vesting.

6. Source of Shares : Primary

7. Variation in terms of Options : None

ITC Limited REPORT AND ACCOUNTS 2022 195

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

Sl. ITC Employee Stock Option ITC Employee Stock Option

No. Scheme - 2006 Scheme - 2010

8. Method used for accounting of : The employee compensation cost has been calculated using the fair value method of
share-based payment plans accounting for Options issued under the Company’s Employee Stock Option Schemes.
The employee compensation cost as per fair value method for the financial year 2021-22
is ` 32.51 Crores [2021 - ` 27.15 Crores]; for the group entities, such compensation cost is
` 1.00 Crore [2021 - ` (0.49) Crore].

9. Nature and extent of employee : In addition to the terms and conditions provided in the table under Serial Nos. (3) to
share based payment plans (5) hereinbefore, each Option entitles the holder thereof to apply for and be allotted
that existed during the period ten Ordinary Shares of the Company of ` 1.00 each upon payment of the exercise price
including the general terms during the exercise period.
and conditions of each plan

10. Weighted average exercise : Weighted average exercise price per Option : ` 2,333.96
prices and weighted average Weighted average fair value per Option : ` 429.36
fair values of Options whose
exercise price either equals
or exceeds or is less than the
market price of the stock

11. Option movements during : ITC Employee Stock Option ITC Employee Stock Option
the year Scheme - 2006 Scheme - 2010

a) Options outstanding at the : 4,12,588 2,87,68,704

beginning of the year

b) Options granted during : 55,950 11,65,650

the year

c) Options cancelled and : 60,146 61,32,845

lapsed during the year

d) Options vested and : 31,710 5,90,511

exercisable during the year
(net of Options lapsed and
exercised)

e) Options exercised during : 28,416 14,12,754

the year

f) Number of Ordinary : 2,84,160 1,41,27,540

Shares of ` 1.00 each
arising as a result of
exercise of Options during
the year

g) Options outstanding at the : 3,79,976 2,23,88,755

end of the year (a+b-c-e)

h) Options exercisable at the : 2,46,416 2,06,07,350

end of the year

i) Money realised by exercise : 5.61 286.21

of the Options during the
year (` in Crores)

196 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

12. Summary of the status of

Options:

Particulars As at 31st March, 2022 As at 31st March, 2021

No. of Options Weighted Average No. of Options Weighted Average

Exercise Prices (`) Exercise Prices (`)

Outstanding at the beginning : 2,91,81,292 2402.40 3,45,80,543 2364.54

of the year

Add: Granted during the year : 12,21,600 2333.96 7,37,900 1699.20

Less: Lapsed during the year : 61,92,991 2230.80 44,75,852 2236.28

Less: Exercised during the year : 14,41,170 2024.88 16,61,299 1749.52

Outstanding at the end : 2,27,68,731 2469.30 2,91,81,292 2402.40

of the year

Options exercisable at the end : 2,08,53,766 2495.72 2,78,49,356 2416.25

of the year

13. Weighted average share : The weighted average share price of Shares, arising upon exercise of Options during the
price of Shares arising upon year ended 31st March, 2022 was ` 212.94 (2021 - ` 198.13). This was based on the
exercise of Options closing market price on NSE on the date of exercise of Options (i.e. the date of allotment
of shares by the Securityholders Relationship Committee).

14. Summary of Options outstanding, scheme-wise:

Particulars As at 31st March, 2022 As at 31st March, 2021

No. of Range of Exercise Weighted No. of Range of Exercise Weighted

Options Prices (`) average Options Prices (`) average
Outstanding remaining Outstanding remaining
contractual life contractual life

ITC Employee Stock Option : 3,79,976 1698.00 – 2885.50 3.61 4,12,588 1698.00 – 2885.50 3.45
Scheme - 2006

ITC Employee Stock Option : 2,23,88,755 1698.00 – 2885.50 1.93 2,87,68,704 1698.00 – 2885.50 2.12
Scheme - 2010

15. A description of the method : The fair value of each Option is estimated using the Black Scholes Option Pricing model.
used during the year to estimate
Weighted average exercise price per Option : ` 2,333.96
the fair values of Options, the
weighted average exercise Weighted average fair value per Option :` 429.36
prices and weighted average
fair values of Options granted

The significant assumptions : The fair value of each Option is estimated using the Black Scholes Option Pricing model
used to ascertain the above after applying the following key assumptions on a weighted average basis:

(i) Risk-free interest rate 5.59%

(ii) Expected life 4.61 years

(iii) Expected volatility 24.86%

(iv) Expected dividends 4.61%

(v) The price of the underlying shares in market at the time of Option grant ` 2,333.96
(One Option = 10 Ordinary Shares)

ITC Limited REPORT AND ACCOUNTS 2022 197

Notes to the Financial Statements

27. Additional Notes to the Financial Statements (Contd.)

16. Methodology for determination : The volatility used in the Black Scholes Option Pricing model is the annualised standard
of expected volatility deviation of the continuously compounded rates of return on the stock over a period of
time. The period considered for the working is commensurate with the expected life of
the Options and is based on the daily volatility of the Company’s stock price on NSE.
The Company has incorporated the early exercise of Options by calculating expected life
on past exercise behaviour. There are no market conditions attached to the grant and vest.
17. Options granted to : As provided below:-
(a) Directors and Name Designation No. of Options granted during the
Senior managerial personnel financial year 2021-22

1 S. Puri Chairman & Managing Director 1,34,500

2 N. Anand Executive Director 67,250
3 B. Sumant Executive Director 67,250
4 R. Tandon Executive Director 67,250
5 Supratim Dutta Chief Financial Officer 17,750
6 H. Malik Divisional Chief Executive - 17,750
Foods Business Division
7 A. K. Rajput Senior Vice President - 17,750
Corporate Affairs
8 S. Rangrass Group Head - LS&T, Central 17,750
Projects, EHS & Quality Assurance
9 S. K. Singh Group Head - Paper & Packaging 17,750
10 S. Sivakumar Group Head - Agri Business & IT 17,750
11 R. K. Singhi Executive Vice President & 8,800
Company Secretary
The aforesaid Options were granted at the exercise price of ` 2,334.00 per Option, being the ‘market price’ as defined under
the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
(b) Any other employee who received a grant on any : None
one year of Options amounting to 5% or more of the
Options granted during the year.
(c) Identified employees who were granted Options, : None
during any one year, equal to or exceeding 1% of the
issued capital (excluding outstanding warrants and
conversions) of the Company at the time of grant.

(x) Information in respect of Stock Appreciation Linked Reward Plan:

Sl.
No.
Particulars Details

1. Nature and extent of Stock : ITC Employee Cash Settled Stock Appreciation Linked Reward Plan
Appreciation Linked Reward Plan (ITC ESAR Plan).
that existed during the year along Under the ITC ESAR Plan, the eligible employees receive cash on vesting
with general terms and conditions of SAR units, equivalent to the difference between the grant price and the
market price of the share on vesting of SAR units subject to the terms and
conditions specified in the Plan.
2. Settlement Method : Cash - Settled
3. Vesting period and maximum term : Over a period of five years from the date of grant in accordance with the Plan.
of SAR granted

198 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements
27. Additional Notes to the Financial Statements (Contd.)

Sl.
No.
Particulars Details

4. Method used to estimate the fair : Black Scholes Option Pricing model. The said model considers inputs such as
value of SAR granted Risk-free interest rate, Expected life, Expected volatility, Expected dividend,
Market Price etc. The number of SAR units outstanding as at 31st March,
2022 is 39,46,719 (2021 - 52,96,190) and the weighted average fair value at
measurement date is ` 217.98 (2021 - ` 162.39) per SAR unit.
5. Total cost recognised in the : The cost has been calculated using the fair value method of accounting for SAR
profit or loss units issued under the ITC ESAR Plan. The employee benefits expense / (reversal)
as per fair value method for the financial year 2021-22 is ` 28.68 Crores
[2021 - ` 29.54 Crores] and ` 1.33 Crores [2021 - ` 1.31 Crores] for group entities
(Refer Note 23). The amount carried in the Balance Sheet as a non – current
financial liability is ` 47.34 Crores (2021- ` 33.13 Crores) and as current financial
liability is ` 18.47 Crores (2021 - ` 4.08 Crores) (Refer Note 16).

(xi) Trade Payables ageing schedule: (` in Crores)

Outstanding for following periods from due date of

payment as at 31st March, 2022
Less than 1–2 years 2–3 years More than Total
Not Due
1 year     3 years
MSME 32.80 – – – – 32.80
Others 818.93 69.68 0.02 0.01 – 888.64
Disputed Dues – MSME – – – – – –
Disputed Dues – Others – – – – 0.50 0.50
SUB-TOTAL 851.73 69.68 0.02 0.01 0.50 921.94
Accrued Payables (not due)
– MSME 68.16
– Others 3233.30
TOTAL 4223.40
(` in Crores)
Outstanding for following periods from due date of
payment as at 31st March, 2021
 
Less than 1-2 years 2-3 years More than Total
Not Due
1 year 3 years
MSME 32.82 – – – – 32.82
Others 640.37 120.23 8.18 0.32 1.89 770.99
Disputed Dues – MSME – – – – – –
Disputed Dues – Others – – – – 0.77 0.77
SUB-TOTAL 673.19 120.23 8.18 0.32 2.66 804.58
Accrued Payables (not due)
– MSME 26.52
– Others 3288.21
TOTAL 4119.31

ITC Limited REPORT AND ACCOUNTS 2022 199

Notes to the Financial Statements
27. Additional Notes to the Financial Statements (Contd.)

(xii) Micro, Small and Medium scale business entities:

A sum of ` 129.99 Crores is payable to Micro and Small Enterprises as at 31st March, 2022 (2021 - ` 76.92 Crores).
The above amount comprises ` 100.96 Crores (2021 - ` 59.34 Crores) on account of trade payables and ` 29.03 Crores
(2021 - ` 17.58 Crores) on account of liabilities other than trade payables. There are no Micro, Small and Medium Enterprises to
whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2022.
This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis of information available with the Company.

(xiii) Financial Ratios:

Ratio Numerator Denominator 31st March, 2022 31st March, 2021

Current Ratio (in times) Current assets Current liabilities 2.70 3.13
Return on Equity Ratio Average
Profit for the year 25.01 21.18
(in %) Shareholder’s Equity
Inventory turnover Ratio Gross Revenue from sale
Average Inventories 6.07 5.50
(in times) of products and services
Trade Receivables Gross Revenue from sale Average
29.24 23.03
turnover ratio (in times)* of products and services Trade receivables
Trade Payables turnover COGS + Other
Average
ratio (in times) Expenses - Non Cash 8.24 7.14
Trade payables
Expenditure
Net Capital turnover ratio Gross Revenue from sale Working Capital (Current
3.04 2.22
(in times)** of products and services assets-Current liabilities)
Net Profit ratio (in %) Gross Revenue from sale
Profit for the year 25.48 27.06
of products and services
Return on Capital Profit before interest and Average
32.10 27.24
employed (in %) taxes Capital employed
Return on investment Time weighted average
Income from Investments 7.61 8.76
(in %) Investments

Debt-Equity Ratio and Debt Service Coverage Ratio are not relevant for the Company as it has negligible debt.
*improvement due to robust revenue growth, faster collections; impact of Covid - 19 pandemic in base year.
**improvement due to robust revenue growth and enhanced working capital efficiency.

(xiv) The financial statements were approved for issue by the Board of Directors on 18th May, 2022.

200 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

28. Segment Reporting

(` in Crores)
2022 2021
External Inter Segment Total External Inter Segment Total
1. Segment Revenue - Gross
FMCG - Cigarettes 23451.39 – 23451.39 20333.12 – 20333.12
FMCG - Others 15964.75 29.74 15994.49 14708.64 19.59 14728.23
FMCG - Total 39416.14 29.74 39445.88 35041.76 19.59 35061.35
Hotels 1279.33 5.67 1285.00 623.59 3.92 627.51
Agri Business 12126.05 4070.02 16196.07 7866.06 4716.18 12582.24
Paperboards, Paper and Packaging 6279.57 1362.05 7641.62 4619.85 998.70 5618.55
Segment Total 59101.09 5467.48 64568.57 48151.26 5738.39 53889.65
Eliminations (5467.48) (5738.39)
Gross Revenue from sale of products and services 59101.09 48151.26
2. Segment Results
FMCG - Cigarettes 14869.07 12720.41
FMCG - Others 923.22 832.73
FMCG - Total 15792.29 13553.14
Hotels (183.09) (534.91)
Agri Business 1031.15 820.74
Paperboards, Paper and Packaging 1700.00 1098.68
Segment Total 18340.35 14937.65
Eliminations 14.01 44.76
Total 18354.36 14982.41
Unallocated corporate expenses net of unallocated income 874.28 829.53
Profit before interest etc. and taxation 17480.08 14152.88
Finance Costs 41.95 47.47
Interest earned on loans and deposits, income from current and
non-current investments, profit and loss on sale of investments etc. - Net 2391.40 3058.78
Profit before tax 19829.53 17164.19
Tax expense 4771.70 4132.51
Profit for the year 15057.83 13031.68

3. Other Information 2022 2021

Segment Segment Segment Segment
Assets Liabilities Assets Liabilities
FMCG - Cigarettes 6654.58 4684.28 6737.04 4469.56
FMCG - Others 11444.16 2273.87 11405.18 2534.32
FMCG - Total 18098.74 6958.15 18142.22 7003.88
Hotels 6538.40 835.94 6525.59 769.31
Agri Business 4699.08 1746.29 5004.19 1158.87
Paperboards, Paper and Packaging 8486.49 1326.06 7244.53 1080.26
Segment Total 37822.71 10866.44 36916.53 10012.32
Unallocated Corporate Assets / Liabilities 37269.79 2826.49 34663.83 2563.42
Total 75092.50 13692.93 71580.36 12575.74

ITC Limited REPORT AND ACCOUNTS 2022 201

 Notes to the Financial Statements

28. Segment Reporting (Contd.)

(` in Crores)
2022 2021

Capital Depreciation Capital Depreciation

expenditure and amortization expenditure and amortization
FMCG - Cigarettes 137.25 263.19 79.95 263.74
FMCG - Others 336.27 525.75 475.07 484.13
FMCG - Total 473.52 788.94 555.02 747.87
Hotels 257.90 261.12 201.08 266.31
Agri Business 113.36 80.63 38.57 75.36
Paperboards, Paper and Packaging 896.72 410.97 775.40 359.81
Segment Total 1741.50 1541.66 1570.07 1449.35
Unallocated 126.94 110.49 71.96 112.48
Total 1868.44 1652.15 1642.03 1561.83
Non Cash expenditure Non Cash expenditure
other than depreciation other than depreciation
FMCG - Cigarettes 6.25 21.87
FMCG - Others 6.66 60.46
FMCG - Total 12.91 82.33
Hotels – 4.71
Agri Business 3.20 0.07
Paperboards, Paper and Packaging 27.59 38.25
Segment Total 43.70 125.36

GEOGRAPHICAL INFORMATION
2022 2021
1. Revenue from external customers
– Within India 49782.80 42974.37
– Outside India 9318.29 5176.89
Total 59101.09 48151.26
2. Non-current assets
– Within India 26915.71 26752.87
– Outside India … 0.01
Total 26915.71 26752.88

NOTES:
(1) The Company’s corporate strategy aims at creating multiple drivers of growth anchored on its core competencies. The Company is currently focused on
four business groups : FMCG, Hotels, Paperboards, Paper and Packaging and Agri Business. The Company’s organisational structure and governance
processes are designed to support effective management of multiple businesses while retaining focus on each one of them.
The Operating Segments have been reported in a manner consistent with the internal reporting provided to the Corporate Management Committee, which
is the Chief Operating Decision Maker.
(2) The business groups comprise the following :
FMCG : Cigarettes – Cigarettes, Cigars, etc.
: Others – Branded Packaged Foods Businesses (Staples & Meals; Snacks; Dairy & Beverages; Biscuits &
Cakes; Chocolates, Coffee & Confectionery); Education and Stationery Products; Personal Care
Products; Safety Matches and Agarbattis; Apparel.
Hotels – Hoteliering.
Paperboards, Paper and Packaging – Paperboards, Paper including Specialty Paper and Packaging including Flexibles.
Agri Business – Agri commodities such as wheat, rice, spices, coffee, soya and leaf tobacco.
(3) The geographical information considered
for disclosure are: – Revenue within India.
– Revenue outside India.
(4) Segment results of ‘FMCG : Others’ are after considering significant business development, brand building and gestation costs of the Branded Packaged
Foods businesses and Personal Care Products business.
(5) As stock options and stock appreciation linked reward units are granted under the ITC ESOS and ITC ESARP respectively to align the interests of
employees with those of shareholders and also to attract and retain talent for the enterprise as a whole, the charge thereof do not form part of the segment
performance reviewed by the Corporate Management Committee.
(6) The Company is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from
transactions with any single external customer.

202 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

29. Related Party Disclosures

1. ENTERPRISES WHERE CONTROL EXISTS:

Subsidiaries:
a) Srinivasa Resorts Limited
b) Fortune Park Hotels Limited
c) Bay Islands Hotels Limited
d) WelcomHotels Lanka (Private) Limited, Sri Lanka
e) Landbase India Limited
f) Russell Credit Limited and its subsidiary
Greenacre Holdings Limited
g) Technico Pty Limited, Australia and its subsidiaries
Technico Technologies Inc., Canada
Technico Asia Holdings Pty Limited, Australia and its subsidiary
Technico Horticultural (Kunming) Co. Limited, China
h) Technico Agri Sciences Limited
i) Wimco Limited
j) Pavan Poplar Limited
k) Prag Agro Farm Limited
l) ITC Infotech India Limited and its subsidiaries
ITC Infotech Limited, UK
ITC Infotech (USA), Inc. and its subsidiary
Indivate Inc., USA
m) Gold Flake Corporation Limited
n) ITC Investments & Holdings Limited and its subsidiary
MRR Trading & Investment Company Limited
o) Surya Nepal Private Limited
p) North East Nutrients Private Limited
q) ITC IndiVision Limited

2. OTHER RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS

i) Associates & Joint Ventures:
Associates
a) Gujarat Hotels Limited
b) International Travel House Limited
c) Delectable Technologies Private Limited
– being associates of the Company, and
d) Tobacco Manufacturers (India) Limited (of which the Company is an associate)
and the subsidiaries of its ultimate parent company (British American Tobacco p.l.c.)
Associates of the Company’s subsidiaries
a) ATC Limited
– being associate of Gold Flake Corporation Limited
b) Divya Management Limited, and
c) Antrang Finance Limited
– being associates of Russell Credit Limited
Joint Ventures
Maharaja Heritage Resorts Limited
Joint Venture of the Company’s subsidiary
ITC Essentra Limited
– being joint venture of Gold Flake Corporation Limited

ITC Limited REPORT AND ACCOUNTS 2022 203

Notes to the Financial Statements

29. Related Party Disclosures (Contd.)

ii) a) Key Management Personnel:

S. Puri Chairman & Managing Director
N. Anand Executive Director
B. Sumant Executive Director
R. Tandon Executive Director
S. Banerjee# Non-Executive Director
H. Bhargava# Non-Executive Director @
N. Doda Non-Executive Director (w.e.f. 11.08.2021)
A. Duggal# Non-Executive Director
M. Gupta Non-Executive Director (w.e.f. 27.10.2021)
S. Mukherjee# Non-Executive Director (w.e.f. 11.08.2021)
A. Nayak# Non-Executive Director
S. Panray Non-Executive Director (w.e.f. 11.08.2021)
N. Rao# Non-Executive Director
A. K. Seth# Non-Executive Director
M. Shankar# Non-Executive Director
D. R. Simpson Non-Executive Director
A. Jerath Non-Executive Director (up to 30.04.2021)
S. B. Mathur# Non-Executive Director (up to 14.09.2021)
@ Non-Executive Director up to 22.08.2021. Appointed as Independent Director w.e.f. 20.12.2021.
# Independent Directors

Chief Financial Officer

S. Dutta
Company Secretary
R. K. Singhi
Members - Corporate Management Committee
S. Puri
N. Anand
B. Sumant
R. Tandon
S. Dutta
H. Malik
A. Rajput
S. Rangrass
S. K. Singh
S. Sivakumar
b) Relatives of Key Management Personnel:
T. Anand (wife of N. Anand)
R. Tandon (wife of R. Tandon)
N. Singhi (wife of R. K. Singhi)
iii) Employee Trusts:
a) IATC Provident Fund
b) ITC Defined Contribution Pension Fund
c) ITC Management Staff Gratuity Fund
d) ITC Employees Gratuity Fund
e) ITC Gratuity Fund ‘C’
f) ITC Pension Fund
g) ILTD Seasonal Employees Pension Fund
h) ITC Platinum Jubilee Pension Fund
i) ITC Bhadrachalam Paperboards Limited Management Staff Pension Fund
j) ITC Bhadrachalam Paperboards Limited Gratuity Fund ‘A’
k) ITC Bhadrachalam Paperboards Limited Gratuity Fund ‘C’
l) ITC Hotels Limited Employees Superannuation Scheme
m) Sunrise Spices Limited Employees Gratuity Fund

204 ITC Limited REPORT AND ACCOUNTS 2022

 Notes to the Financial Statements
29. Related Party Disclosures (Contd.)
3. DISCLOSURE OF TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCES AS AT 31.03.2022 (` in Crores)
Enterprises where Relatives of Key
control exists Key Management Employee
RELATED PARTY TRANSACTIONS SUMMARY Associates Joint Ventures Management Total
Personnel Trusts
Subsidiaries Personnel
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
1. Sale of Goods / Services 322.83 255.72 1080.07 773.43 54.19 34.04 1457.09 1063.19
2. Purchase of Goods / Services 394.12 422.08 66.18 60.37 280.30 229.79 740.60 712.24
3. Acquisition cost of Property, Plant and Equipment 10.58 2.07 10.58 2.07
4. Sale of Property, Plant and Equipment – 12.62 – 12.62
5. Investment in Subsidiaries / Associate 427.24 360.57 1.87 – 429.11 360.57
6. Renunciation of Rights Issue entitlement – 6.45 – 6.45
7. Value of Share Based Payment
7A. Capital Contribution for Share Based Payments (22.06) (9.80) (22.06) (9.80)
7B. Reimbursement for Share Based Payments 1.66 1.94 0.41 0.39 0.08 0.09 2.15 2.42
8. Rent Received 25.60 25.86 0.72 0.63 26.32 26.49
9. Rent Paid* 9.89 8.05 2.51 1.17 1.05 0.58 0.32 0.32 13.77 10.12
10. Remuneration of Managers on Deputation reimbursed 2.41 2.50 5.36 6.00 7.77 8.50
11. Remuneration of Managers on Deputation recovered 36.32 30.65 6.83 6.23 1.43 1.29 44.58 38.17
12. Contribution to Employees’ Benefit Plans 178.43 112.98 178.43 112.98
13. Dividend Income 857.14 723.43 0.31 0.43 857.45 723.86
14. Dividend Payments 3981.58 5483.72 5.70 5.51 3987.28 5489.23
15. Interest Income 2.42 2.70 2.42 2.70
16. Expenses Recovered 10.01 10.75 21.59 4.98 0.11 0.20 31.71 15.93
17. Expenses Reimbursed 2.81 3.08 0.26 0.23 0.05 0.02 3.12 3.33
18. Advances Given during the year 0.45 – – 0.06 0.45 0.06
19. Adjustment / Receipt towards Refund of Advances 0.45 – … 0.11 0.45 0.11
20. Advances Received during the year 85.32 127.76 1496.60 598.34 1581.92 726.10
21. Adjustment / Payment towards Refund of Advances 152.01 108.61 972.02 659.70 1124.03 768.31
22. Deposits Given during the year … – … –
23. Deposits Refunded during the year – 0.02 – 0.02
24. Remuneration to Key Management Personnel (KMP)1
24A. – Short term benefits 69.33 49.64 69.33 49.64
24B. – Other remuneration 10.51 8.96 10.51 8.96

ITC Limited
24C. – Stock options granted 2
25. Outstanding Balances#
i) Receivables 68.76 50.40 78.17 59.16 14.66 11.13 161.59 120.69
ii) Advances Given – … – …
iii) Deposits Given 0.60 0.60 0.08 0.08 0.07 0.07 0.75 0.75
iv) Advance Taken 147.83 214.52 692.41 167.83 840.24 382.35
v) Deposits Taken 0.04 0.04 0.04 0.04
vi) Payables 12.17 10.58 5.91 5.72 13.83 20.98 29.20 130.53 61.11 167.81
26. Commitments 1.51 0.07 1.51 0.07
* Includes rent pertaining to leases classified as Right of Use Assets.
#
The amounts outstanding are unsecured and will be settled in cash.
1 Post employment benefits are actuarially determined on overall basis and hence not separately provided.

REPORT AND ACCOUNTS 2022

2 During the year, the Company granted Stock Options to eligible employees, including Executive Directors and KMPs, under its Employee Stock Option Schemes at ‘market price’ [within the meaning of the Securities and Exchange Board of India (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021]. The Company has also granted Employee Stock Appreciation Linked Reward Units (ESAR Units) to the aforesaid persons in the previous years under the ‘ITC Employee Cash Settled Stock Appreciation Linked Reward Plan’. Since such Stock Options and
ESAR Units are not tradeable, no perquisite or benefit is immediately conferred upon the employee by grant of such Stock Options / ESAR Units, and accordingly the said grants have not been considered as remuneration. However, in accordance with Ind AS -102, the Company has recorded

205
employee benefits expense by way of share based payments to employees at ` 61.20 Crores for the year ended 31st March, 2022 (2021 - ` 56.69 Crores), of which ` 23.14 Crores (2021 - ` 27.71 Crores) is attributable to Executive Directors and KMPs.
206
Notes to the Financial Statements
29. Related Party Disclosures (Contd.)

4. INFORMATION REGARDING SIGNIFICANT TRANSACTIONS / BALANCES

(Generally in excess of 10% of the total transaction value of the same type)

RELATED PARTY TRANSACTIONS SUMMARY 2022 2021 RELATED PARTY TRANSACTIONS SUMMARY 2022 2021 RELATED PARTY TRANSACTIONS SUMMARY 2022 2021

ITC Limited
1. Sale of Goods / Services 12. Contribution to Employees’ Benefit Plans 24B. Other Remuneration
British American Tobacco (GLP) Limited 985.49 671.15 ITC Pension Fund 96.02 21.00
S. Banerjee 1.04 0.93
Surya Nepal Private Limited 308.47 250.30 IATC Provident Fund 37.07 51.66
A. Duggal 1.03 0.91
2. Purchase of Goods / Services ITC Management Staff Gratuity Fund 20.19 17.61
ITC Employees Gratuity Fund 10.90 12.56 A. Nayak 1.01 0.91
ITC Essentra Limited 280.19 229.73
13. Dividend Income M. Shankar 1.01 0.91
North East Nutrients Private Limited 167.68 192.43
ITC Infotech India Limited 451.56 276.90
ITC Infotech India Limited 166.90 165.12 H. Bhargava 0.70 0.92
Surya Nepal Private Limited 346.84 362.78
3. Acquisition cost of Property, Plant and Equipment S. B. Mathur (related party up to 14.09.2021) 0.48 0.91
14. Dividend Payments
ITC Infotech India Limited 9.96 2.07 25. Outstanding Balances
Tobacco Manufacturers (India) Limited 3276.18 4512.20
4. Sale of Property, Plant and Equipment
Myddleton Investment Company Limited 534.94 736.76 (i) Receivables
ITC IndiVision Limited – 12.62
15. Interest Income British American Tobacco (GLP) Limited 59.75 37.90

REPORT AND ACCOUNTS 2022

5. Investment in Subsidiaries / Associate North East Nutrients Private Limited 1.80 2.25
WelcomHotels Lanka (Private) Limited 327.24 311.57 Surya Nepal Private Limited 59.60 45.05
Wimco Limited 0.45 0.45
ITC IndiVision Limited 100.00 49.00 16. Expenses Recovered (ii) Advances Given
6. Renunciation of Rights Issue entitlement British American Tobacco (GLP) Limited 14.26 – International Travel House Limited – …
Russell Credit Limited – 6.45 B.A.T (U.K. and Export) Limited 4.95 2.28 (iii) Deposits Given
7. Value of share based payment ITC Infotech India Limited 3.54 4.54
Russell Credit Limited 1 0.36 0.36
7A. Capital Contribution for Share Based Payments Surya Nepal Private Limited 2.73 2.60
17. Expenses Reimbursed Greenacre Holdings Limited 2 0.24 0.24
ITC Infotech India Limited (21.96) (9.79)
7B. Reimbursement for Share Based Payments Wimco Limited 2.11 2.13 (iv) Advance Taken

ITC Infotech India Limited 0.38 0.33 Srinivasa Resorts Limited 0.46 0.35 British American Tobacco (GLP) Limited 692.33 166.04
ITC Infotech India Limited 0.17 0.35
WelcomHotels Lanka (Private) Limited 0.37 0.25 Surya Nepal Private Limited 147.83 214.52
18. Advances Given during the year
Fortune Park Hotels Limited 0.34 0.26 (v) Deposits Taken
Wimco Limited 0.45 –
International Travel House Limited 0.32 0.30
International Travel House Limited – 0.06 International Travel House Limited 0.04 0.04
Surya Nepal Private Limited 0.28 0.31
19. Adjustment / Receipt towards Refund of Advances (vi) Payables
Technico Agri Sciences Limited 0.17 0.53
Wimco Limited 0.45 –
8. Rent Received Employee Trust - Pension Funds 15.07 110.69
International Travel House Limited … 0.11
ITC Infotech India Limited 20.97 20.97 Employee Trust - Gratuity Funds 14.13 19.83
20. Advances Received during the year
9. Rent Paid British American Tobacco (GLP) Limited 1494.26 596.87 ITC Essentra Limited 13.83 20.98
Landbase India Limited 6.35 5.31 21. Adjustment / Payment towards Refund of Advances North East Nutrients Private Limited 6.47 6.02
Gujarat Hotels Limited 2.51 1.17 British American Tobacco (GLP) Limited 967.97 659.58
26. Commitments
Technico Agri Sciences Limited 1.46 1.34 Surya Nepal Private Limited 152.01 108.60
ITC Infotech India Limited 1.51 0.07
10. Remuneration of Managers on Deputation reimbursed 22. Deposits Given during the year
Gujarat Hotels Limited 5.36 6.00 R. Tandon … –
# In accordance with Ind AS - 102, the Company has recognised employee benefits expense by way
Bay Islands Hotels Limited 1.30 1.27 23. Deposits Refunded during the year of share based payments [refer Note 29.3], of which ` 23.14 Crores (2021 - ` 27.71 Crores) is
International Travel House Limited – 0.02 attributable to Executive Directors & KMPs:
Fortune Park Hotels Limited 1.10 1.18
24. Remuneration to Key Management Personnel # S. Puri ` 6.41 Crores (2021 - ` 10.21 Crores), N. Anand ` 4.15 Crores (2021 - ` 3.57 Crores),
11. Remuneration of Managers on Deputation recovered
24A. Short term benefits R. Tandon ` 5.04 Crores (2021 - ` 4.62 Crores), B. Sumant ` 2.15 Crores (2021 - ` 4.13 Crores),
ITC Infotech India Limited 9.17 7.99
S. Puri 17.18 13.12 S. Dutta ` 0.53 Crore (2021 - ` 0.22 Crore) and R. K. Singhi ` 0.57 Crore (2021 - ` 0.86 Crore).
Srinivasa Resorts Limited 5.77 4.50 N. Anand 8.63 6.58 1 The maximum indebtedness during the year was ` 0.36 Crore (2021 - ` 0.36 Crore).
Fortune Park Hotels Limited 5.35 5.17 R. Tandon 8.10 6.05 2 The maximum indebtedness during the year was ` 0.24 Crore (2021 - ` 0.24 Crore)
Technico Agri Sciences Limited 4.56 5.07 B. Sumant 8.10 6.06
Notes to the Financial Statements

30. Financial Instruments and Related Disclosures

1. Capital Management
 he Company’s financial strategy aims to support its strategic priorities and provide adequate capital to its businesses for growth
T
and creation of sustainable stakeholder value. The Company funds its operations through internal accruals and aims at maintaining
a strong capital base to support the future growth of its businesses.
 uring the year, the Company issued 1,44,11,700 Ordinary Shares of ` 1.00 each amounting to ` 1.44 Crores (2021 - ` 1.66 Crores)
D
towards its employee stock options. The securities premium stood at ` 9988.14 Crores as at 31st March, 2022
(2021 - ` 9611.64 Crores).
2. Categories of Financial Instruments
 (` in Crores)
As at 31st March, 2022 As at 31st March, 2021
Particulars Note Carrying Fair Carrying Fair
Value Value Value Value
A. Financial assets
a) Measured at amortised cost
i) Cash and cash equivalents 11 184.97 184.97 231.28 231.28
ii) Other Bank Balances 12 3692.97 3692.97 3770.25 3770.25
iii) Investment in Bonds / 
Debentures, Preference
Shares & Government or
Trust Securities 4, 9 10985.36 11232.53 9432.82 9945.03
iv) Investment in Mutual Funds 4 278.36 277.12 – –
v) Loans 5 10.79 9.75 5.14 4.75
vi) Trade receivables 10 1952.50 1952.50 2090.29 2090.29
vii) Other financial assets 6 3829.83 3784.58 1247.64 1199.34
Sub-total 20934.78 21134.42 16777.42 17240.94
b) Measured at Fair value
through OCI
i) Equity shares 4 1372.52 1372.52 827.25 827.25
ii) Investment in Mutual Funds 4 1238.69 1238.69 – –
  Sub-total 2611.21 2611.21 827.25 827.25
c) Measured at Fair value through
Profit or Loss
i) Investment in Mutual Funds 4, 9 8535.85 8535.85 12145.73 12145.73
ii) Investment in Bonds / Debentures 9 991.97 991.97 1148.15 1148.15
iii) Investment in Venture
Capital Fund 4 87.33 87.33 35.04 35.04
iv) Investment in Equity &
Preference Shares 4 20.00 20.00 – –
Sub-total 9635.15 9635.15 13328.92 13328.92
d) Derivatives measured
at fair value
i) Derivative instruments not
designated as hedging instruments 6 3.27 3.27 8.93 8.93
ii) Derivative instruments designated
as hedging instruments 6 27.27 27.27 12.88 12.88
Sub-total 30.54 30.54 21.81 21.81
  Total financial assets 33211.68 33411.32 30955.40 31418.92

ITC Limited REPORT AND ACCOUNTS 2022 207

Notes to the Financial Statements

30. Financial Instruments and Related Disclosures (Contd.)

(` in Crores)
As at 31st March, 2022 As at 31st March, 2021
Particulars Note Carrying Fair Carrying Fair
Value Value Value Value
B. Financial liabilities    
a) Measured at amortised cost    
i) Sales tax deferment loans 14 5.28 3.86 5.63 3.69
ii) Trade payables 4223.40 4223.40 4119.31 4119.31
iii) Lease Liabilities 15 305.88 305.88 323.72 323.72
iv) Other financial liabilities 16 1513.68 1502.05 1327.11 1306.40
  Sub-total 6048.24 6035.19 5775.77 5753.12
b) Measured at fair value
i) Derivative instruments not designated 16 0.45 0.45 1.54 1.54
as hedging instruments
ii) Derivative instruments designated as 16 9.56 9.56 19.01 19.01
hedging instruments
iii) Contingent Consideration 16 76.40 76.40 139.51 139.51

Sub-total 86.41 86.41 160.06 160.06

  Total financial liabilities 6134.65 6121.60 5935.83 5913.18
3. Financial risk management objectives
 he Company has a system-based approach to risk management, anchored to policies and procedures and internal financial
T
controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market risk, credit risk
and liquidity risk) that may arise as a consequence of its business operations as well as its investing and financing activities.
Accordingly, the Company’s risk management framework has the objective of ensuring that such risks are managed within
acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with the applicable regulations.
It also seeks to drive accountability in this regard.
Liquidity Risk
 he Company’s Current assets aggregate ` 30942.01 Crores (2021 - ` 31815.24 Crores) including Current Investments, Cash
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and cash equivalents and Other Bank Balances of ` 15502.89 Crores (2021 - ` 18048.24 Crores) against an aggregate Current
liability of ` 11478.09 Crores (2021 - ` 10173.95 Crores). Other Non-current liabilities other than lease liabilities due between
one year to three years amounted to ` 94.99 Crores (2021 - ` 162.10 Crores) and Other Non-current liabilities due after three
years amounted to ` 6.05 Crores (2021 - ` 82.53 Crores) on the reporting date. The maturity analysis of undiscounted lease
liabilities are disclosed under Note 27(vi).
 urther, while the Company’s total equity stands at ` 61399.57 Crores (2021 - ` 59004.62 Crores), it has non-current borrowings
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of ` 4.54 Crores (2021 - ` 5.28 Crores). In such circumstances, liquidity risk or the risk that the Company may not be able to settle
or meet its obligations as they become due does not exist.

Market Risk

The Company is not an active investor in equity markets; it holds certain investments in equity for long term value accretion
which are accordingly measured at fair value through Other Comprehensive Income. The value of investments in such equity
instruments as at 31st March, 2022 is ` 1372.52 Crores (2021 - ` 827.25 Crores). Accordingly, fair value fluctuations arising from
market volatility is recognised in Other Comprehensive Income.
As the Company is virtually debt-free and its deferred payment liabilities do not carry interest, the exposure to interest rate risk
from the perspective of financial liabilities is negligible. Further, treasury activities, focused on managing investments in debt
instruments, are centralised and administered under a set of approved policies and procedures guided by the tenets of safety,
liquidity and returns. This ensures that investments are made within acceptable risk parameters after due evaluation.
The Company’s investments are predominantly held in bonds / debentures, fixed deposits and debt mutual funds. Mark to
market movements in respect of the Company’s investments in bonds / debentures that are held at amortised cost are temporary

208 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

30. Financial Instruments and Related Disclosures (Contd.)

and get recouped through coupon accruals. Other investments in bonds / debentures are fair valued through the Statement of
Profit and Loss to recognise market volatility, which is not considered to be significant. Fixed deposits are held with highly rated
banks and companies and have a short tenure and are not subject to interest rate volatility.
The Company also invests in mutual fund schemes of leading fund houses. Such investments are susceptible to market price
risks that arise mainly from changes in interest rate which may impact the return and value of such investments. However, given
the relatively short tenure of underlying portfolio of the mutual fund schemes in which the Company has invested, such price risk
is not significant.
For select agricultural commodities primarily held for trading, futures contracts are used to hedge price risks till positions in
the physical market are matched. Such activities are managed by the business team within an approved policy framework.
The carrying value of inventories is adjusted to the extent of fair value movement of the risk being hedged. Such hedges are
generally for short time horizons and recognised in profit or loss within the crop cycle. Accordingly, the Company’s net exposure
to commodity price risk is considered to be insignificant.
Foreign currency risk
The Company undertakes transactions denominated in foreign currency (mainly US Dollar, Pound Sterling, Euro and Japanese
Yen) which are subject to the risk of exchange rate fluctuations. Financial assets and liabilities denominated in foreign currency,
including the Company’s net investments in foreign operations (with a functional currency other than Indian Rupee), are also
subject to reinstatement risks.
The carrying amounts of foreign currency denominated financial assets and liabilities including derivative contracts, are as follows:
 (` in Crores)

As at 31st March, 2022 USD Euro GBP JPY Others Total

Financial Assets 565.80 75.16 40.00 0.01 0.98 681.95

Financial Liabilities 71.69 51.34 2.16 18.26 4.00 147.45

As at 31st March, 2021 USD Euro GBP JPY Others Total

Financial Assets 886.99 37.91 24.69 – 14.06 963.65

Financial Liabilities 76.41 36.92 1.44 40.55 7.49 162.81

 he Company uses foreign exchange forward, futures and options contracts to hedge its exposures in foreign currency arising
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from firm commitments and highly probable forecast transactions.

a. Forward exchange contracts that were outstanding on respective reporting dates:
 (In Million)

Designated under Hedge

As at 31st March, 2022 As at 31st March, 2021
Accounting

Currency Cross Currency Buy Sell Buy Sell

US Dollar Indian Rupee 22.38 586.94 45.61 66.01

Euro US Dollar 14.09 – 29.27 –
AUD US Dollar – – 0.08 –
CHF US Dollar 1.16 – 0.02 –
GBP US Dollar 0.01 – 0.01 –
SEK US Dollar 1.36 – 4.09 –
SGD US Dollar 0.04 – 0.04 –
JPY US Dollar 324.36 – 829.68 –

The aforesaid hedges have a maturity of less than 1 year from the year end.

ITC Limited REPORT AND ACCOUNTS 2022 209

Notes to the Financial Statements

30. Financial Instruments and Related Disclosures (Contd.)

(In Million)

Not designated under Hedge

As at 31st March, 2022 As at 31st March, 2021
Accounting

Currency Cross Currency Buy Sell Buy Sell

US Dollar Indian Rupee 5.00 39.54 – 177.72

Euro US Dollar – 9.15 – 9.42
AUD US Dollar 0.04 – 0.03 –
CHF US Dollar 0.34 – 0.22 –
GBP US Dollar – 8.59 – 3.60
SEK US Dollar – – 0.40 –
SGD US Dollar – – 0.32 –
KWD US Dollar 0.19 – 0.13 0.41
JPY US Dollar 53.90 – 58.40 –

b. Currency options that were outstanding on respective reporting dates (Designated under Hedge Accounting):

(In Million)

Currency Cross Currency Buy Sell Buy Sell

US Dollar Indian Rupee – 17.00 – –

Hedges of foreign currency risk and derivative financial instruments

 he Company has established risk management policies to hedge the volatility in cashflows arising from exchange rate fluctuations
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in respect of firm commitments and highly probable forecast transactions, through foreign exchange forward, futures and options
contracts. The proportion of forecast transactions that are to be hedged is decided based on the size of the forecast transaction
and market conditions. As the counterparty for such transactions are highly rated banks, the risk of their non-performance is
considered to be insignificant.

The Company uses derivatives to hedge its exposure to foreign exchange rate fluctuations. Where such derivatives are not
designated under hedge accounting, changes in the fair value of such hedges are recognised in the Statement of Profit and Loss.

The Company may also designate certain hedges which are entered to manage the volatility in cashflows as a cash flow hedge
under hedge accounting. The currency, amount and tenure of such hedges are generally matched to the underlying transaction(s).
Changes in the fair value of the effective portion of cash flow hedges are recognised as cash flow hedging reserve in Other
Comprehensive Income. While the probability of such hedges becoming ineffective is very low, the ineffective portion, if any, is
immediately recognised in the Statement of Profit and Loss.

210 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

30. Financial Instruments and Related Disclosures (Contd.)

The movement in the cash flow hedging reserve in respect of designated cash flow hedges is summarised below:
(` in Crores)

Particulars 2022 2021

At the beginning of the year 4.93 (24.33)

Add: Changes in the fair value of effective portion of matured
cash flow hedges during the year 16.71 34.47
Add: Changes in fair value of effective portion of outstanding
cash flow hedges 19.27 7.02
Less: Amounts transferred to the Statement of Profit and Loss on
occurrence of forecast hedge transactions during the year 30.07 6.51
Less: Amounts transferred to the Statement of Profit and Loss
due to cash flows no longer expected to occur 3.03 0.86
Less: Amounts transferred to initial cost of non-financial assets (9.68) (4.99)
Less: Net gain / (loss) transferred to the Statement of Profit and Loss
on Ineffectiveness – –
(Less) / Add: Deferred tax (3.16) (9.85)
At the end of the year 14.33 4.93
Of the above, balances remaining in cash flow hedge reserve
for matured hedging relationships 2.46 2.53
 nce the hedged transaction materialises, the amount accumulated in the cash flow hedging reserve will be included in the initial
O

cost of the non-financial hedged item on its initial recognition or reclassified to profit or loss, as applicable, in the anticipated
timeframes given below:
(` in Crores)
Outstanding balance in Cash Flow Hedge As at As at
Reserve to be subsequently recycled from OCI 31st March, 2022 31st March, 2021

Within one year 10.80 3.86

Between one and three years 3.53 1.07
Total 14.33 4.93
Foreign Currency Sensitivity
 or every percentage point increase / decrease in the underlying exchange rate of the outstanding foreign currency denominated
F
assets and liabilities, including derivative contracts, holding all other variables constant, the profit before tax for the year ended
31st March, 2022 would decrease / increase by ` 2.22 Crores (2021 - ` 6.16 Crores) and other equity as at 31st March, 2022 would
decrease / increase by ` 42.87 Crores (2021 - ` 5.76 Crores) on a pre-tax basis.
Credit Risk

Company’s deployment in debt instruments are primarily in Government securities, fixed deposits with highly rated banks and
companies, bonds issued by government institutions, public sector undertakings, mutual fund schemes of leading fund houses and
certificate of deposits issued by highly rated banks and financial institutions. Of this, investments that are held at amortised cost
stood at ` 17732.33 Crores (2021 - ` 13561.33 Crores). With respect to the Company’s investing activities, mutual fund schemes
and counter parties are shortlisted and exposure limits determined on the basis of their credit rating (by independent agencies),
financial statements and other relevant information. As these counter parties are Central / State Government, Government
institutions / public sector undertakings with investment grade / sovereign credit ratings and taking into account the experience of
the Company over time, the counter party risk attached to such assets is considered to be insignificant.
 he Company’s customer base is large and diverse limiting the risk arising out of credit concentration. Further, credit is extended
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in business interest in accordance with guidelines issued centrally and business-specific credit policies that are consistent with
such guidelines. Exceptions are managed and approved by appropriate authorities, after due consideration of the counterparty’s
credentials and financial capacity, trade practices and prevailing business and economic conditions. The Company’s exposure to
trade receivables on the reporting date, net of expected loss provisions, stood at ` 1952.50 Crores (2021 - ` 2090.29 Crores).

ITC Limited REPORT AND ACCOUNTS 2022 211

Notes to the Financial Statements

30. Financial Instruments and Related Disclosures (Contd.)

The Company’s historical experience of collecting receivables and the level of default indicate that credit risk is low and generally
uniform across markets; consequently, trade receivables are considered to be a single class of financial assets. All overdue
customer balances are evaluated taking into account the age of the dues, specific credit circumstances, the track record of the
counterparty etc. Loss allowances and impairment is recognized, where considered appropriate by responsible management.

 he movement of the expected loss provision (allowance for bad and doubtful loans, advances and receivables etc.) made by the
T
Company are as under:
(` in Crores)
Expected Loss Provision
Particulars
As at 31st March, 2022 As at 31st March, 2021
Opening Balance 205.11 149.08
Add: Provisions made (net) 11.71 57.49
Less: Utilisation for impairment / de-recognition 2.77 1.46
Effects of foreign exchange fluctuation – –
Closing Balance 214.05 205.11

4. Fair value measurement

The following table presents the fair value hierarchy of financial assets and liabilities measured at fair value on a recurring basis:
(` in Crores)
Fair Value
As at As at
Particulars Hierarchy
31st March, 2022 31st March, 2021
(Level)
A. Financial assets
a) Measured at amortised cost
i) Investment in Bonds / Debentures,
Preference Shares & Government or
Trust Securities 2 11232.53 9945.03
ii) Investment in Mutual Funds 1 277.12 –
  iii) Loans* 3 4.02 1.98
iv) Other Financial assets* 3 1527.15 24.15
Sub - total 13040.82 9971.16
b) Measured at Fair value through OCI
  i) Equity shares – Quoted 1 1370.15 824.88
ii) Investment in Mutual Funds 1 1238.69 –
Sub - total 2608.84 824.88
c) Measured at Fair value
through Profit or Loss
  i) Investment in Mutual Funds 1 8535.85 12145.73
  ii) Investment in Bonds / Debentures 2 991.97 1148.15
iii) Investment in Venture Capital Fund 2 87.33 35.04
iv) Investment in Equity & Preference
Shares 3 20.00 –
  Sub - total 9635.15 13328.92
d) Derivatives measured at fair value
i) Derivative instruments not
designated as hedging instruments 2 3.27 8.93
ii) Derivative instruments designated
as hedging instruments 2 27.27 12.88
Sub - total 30.54 21.81
  Total financial assets 25315.35 24146.77

212 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Financial Statements

30. Financial Instruments and Related Disclosures (Contd.)

(` in Crores)
Fair Value
As at As at
Particulars Hierarchy
31st March, 2022 31st March, 2021
(Level)

B. Financial Liabilities
a) Measured at amortised cost
  i) Sales tax deferment loans* 3 3.12 3.34
ii) Lease liabilities* 3 259.79 272.36
  iii) Other Financial liabilities* 3 84.87 151.81
  Sub - total 347.78 427.51
b) Measured at fair value
Derivative instruments not designated
i)
as hedging instruments 2 0.45 1.54
Derivative instruments designated as
ii)
  hedging instruments 2 9.56 19.01
iii) Contingent Consideration 3 76.40 139.51
Sub - total 86.41 160.06
Total financial liabilities 434.19 587.57

* Represents Fair value of Non-current Financial Instruments.

Fair value hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
 he fair value of financial instruments that are not traded in an active market is determined using market approach and valuation
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techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant
inputs required to fair value an instrument are observable, the instrument is included in Level 2.
 erivatives are valued using valuation techniques with market observable inputs such as foreign exchange spot rates and forward
D
rates at the end of the reporting period, yield curves, risk free rate of returns, volatility etc., as applicable.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally
accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that
reflects the credit risk of counterparty.
 he fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be equal to the
T
carrying amounts of these items due to their short – term nature. Where such items are non-current in nature, the same has been
classified as Level 3 and fair value determined using discounted cash flow basis. Similarly, unquoted equity instruments where
most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost
has been considered as best estimate of fair value and has been excluded in the fair value measurement disclosed above.
There has been no change in the valuation methodology for Level 3 inputs during the year. The Company has not classified any
material financial instruments under Level 3 of the fair value hierarchy. There were no transfers between Level 1 and Level 2
during the year.

On behalf of Board

S. PURI Chairman & Managing Director

R. TANDON Director
S. DUTTA Chief Financial Officer
R. K. SINGHI Company Secretary

ITC Limited REPORT AND ACCOUNTS 2022 213

Independent Auditor’s Report
to the Members of ITC Limited
Report on the Audit of the Standalone Ind AS Financial Institute of Chartered Accountants of India together with
Statements the ethical requirements that are relevant to our audit
Opinion of the financial statements under the provisions of the
Act and the Rules thereunder, and we have fulfilled our
We have audited the accompanying standalone Ind AS other ethical responsibilities in accordance with these
financial statements of ITC Limited (“the Company”), which requirements and the Code of Ethics. We believe that
comprise the Balance Sheet as at March 31, 2022, the the audit evidence we have obtained is sufficient and
Statement of Profit and Loss, including the statement of appropriate to provide a basis for our audit opinion on the
Other Comprehensive Income, the Cash Flow Statement standalone Ind AS financial statements.
and the Statement of Changes in Equity for the year
then ended, and notes to the standalone Ind AS financial Key Audit Matters
statements, including a summary of significant accounting Key audit matters are those matters that, in our professional
policies and other explanatory information. judgment, were of most significance in our audit of the
In our opinion and to the best of our information and standalone Ind AS financial statements for the financial year
according to the explanations given to us, the aforesaid ended March 31, 2022. These matters were addressed in
standalone Ind AS financial statements give the the context of our audit of the standalone Ind AS financial
information required by the Companies Act, 2013, as statements as a whole, and in forming our opinion thereon,
amended (“the Act”) in the manner so required and give and we do not provide a separate opinion on these matters.
a true and fair view in conformity with the accounting For each matter below, our description of how our audit
principles generally accepted in India, of the state of addressed the matter is provided in that context.
affairs of the Company as at March 31, 2022, its profit We have determined the matters described below to be
including other comprehensive income, its cash flows and the key audit matters to be communicated in our report.
the changes in equity for the year ended on that date. We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the standalone Ind
Basis for Opinion AS financial statements section of our report, including in
We conducted our audit of the standalone Ind AS financial relation to these matters. Accordingly, our audit included
statements in accordance with the Standards on Auditing the performance of procedures designed to respond to
(SAs), as specified under Section 143(10) of the Act. our assessment of the risks of material misstatement of
Our responsibilities under those Standards are further the standalone Ind AS financial statements. The results of
described in the ‘Auditor’s Responsibilities for the Audit our audit procedures, including the procedures performed
of the Standalone Ind AS Financial Statements’ section to address the matters below, provide the basis for our
of our report. We are independent of the Company audit opinion on the accompanying standalone Ind AS
in accordance with the ‘Code of Ethics’ issued by the financial statements.

Key audit matters How our audit addressed the key audit matter

Revenue recognition

Revenue from the sale of goods (hereinafter referred Our audit procedures included the following:
to as “Revenue”) is recognised when the Company  Assessed the Company’s revenue recognition
performs its obligation to its customers and the amount accounting policies in line with Ind AS 115 (“Revenue
of revenue can be measured reliably and recovery of the from Contracts with Customers”) and tested thereof.
consideration is probable. The timing of such revenue
 Evaluated the integrity of the general information
recognition in case of sale of goods is when the control and technology control environment and testing the
over the same is transferred to the customer, which is operating effectiveness of key IT application controls
mainly upon delivery. over recognition of revenue.
The timing of revenue recognition is relevant to  Evaluated the design, implementation and operating
the reported performance of the Company. The effectiveness of Company’s controls in respect of
management considers revenue as a key measure for revenue recognition.

214 ITC Limited REPORT AND ACCOUNTS 2022

 Independent Auditor’s Report

Key audit matters How our audit addressed the key audit matter

evaluation of performance. There is a risk of revenue  Tested the effectiveness of such controls over
being recorded before control is transferred. revenue cut off at year-end.
Refer Note 1 to the Standalone Ind AS Financial  On a sample basis, tested supporting documentation
Statements - Significant Accounting Policies and Note for sales transactions recorded during the year which
21A / 21B. included sales invoices, customer contracts and
shipping documents.
 Performed an increased level of substantive testing
in respect of sales transactions recorded during the
period closer to the year end and subsequent to the
year end.
 Compared revenue with historical trends and where
appropriate, conducted further enquiries and testing.
 Assessed disclosures in financial statements in
respect of revenue, as specified in Ind AS 115.

Litigations – Contingencies

The Company has ongoing litigations with various Our audit procedures included the following:
authorities and third parties which could have a significant  Obtained and read the Company’s accounting policies
impact on the results, if the potential exposures were to in respect of claims, provisions and contingent liabilities
materialise. to assess compliance with accounting standards.
The amounts involved are significant, and the application  Assessed the design and implementation of the
of accounting standards to determine the amount, if any, Company’s controls over the assessment of litigations
to be provided as a liability or disclosed as a contingent and completeness of disclosures. Supporting
liability, is inherently subjective. documentation were tested for the positions taken by
Claims against the Company not acknowledged as the management, meetings conducted with in-house
debts are disclosed in the Financial Statements by the legal counsel and / or legal team and minutes of Board
Company after a careful evaluation of the facts and and sub-committee meetings were reviewed, to test
legal aspects of the matters involved. The outcome the operating effectiveness of these controls.
of such litigation is uncertain and the position taken  Involved our tax specialists to assess relevant historical
by management involves significant judgment and and recent judgements passed by the appropriate
estimation to determine the likelihood and / or timing of authorities in order to challenge the basis used for the
cash outflows and the interpretation of preliminary and accounting treatment and resulting disclosures.
pending court rulings.
 Additionally, considered the effect of new information
Refer Note 27(iv)(a) to the Standalone Ind AS Financial in respect of contingencies as at April 1, 2021 to
Statements. evaluate whether any change was required in the
management’s position on these contingencies as at
March 31, 2022.
 Assessed in accordance with accounting standards,
the provisions in respect of litigations and assessed
disclosures relating thereto, including those for
contingencies.

ITC Limited REPORT AND ACCOUNTS 2022 215

Independent Auditor’s Report

Key audit matters How our audit addressed the key audit matter

Impairment assessment of investment in WelcomHotels Lanka (Private) Limited (‘WLPL’), a wholly owned subsidiary

WLPL is developing a mixed-use project in Colombo, Our audit procedures included the following:
Sri Lanka which includes a hotel and a residential  Evaluated the key judgements / assumptions
apartment complex. At March 31, 2022, the carrying underlying management’s assessment of potential
value of Company’s investment in WLPL is ` 2,169.27 indicators of impairment.
Crores. The Company’s investments in subsidiaries
 Obtained and read the projections / estimated selling
are assessed annually by management for potential
price / future cashflows along with sensitivity analysis
indicators of impairment.
thereof of the underlying PPE and inventory at WLPL.
In view of the recent deterioration in the macro-economic  Discussed and obtained assessment of recoverable
scenario in Sri Lanka, the Company has assessed the value of PPE and inventory from component auditor
carrying value of investments basis evaluation of the of WLPL.
recoverable value of the capital work in progress of the
hotel (PPE) and inventory of the residential apartments  Evaluated management’s methodology, assumptions
being developed by WLPL. The said determination is and estimates used in these calculations.
based on assumptions, that by their nature imply the  Involved valuation specialist to review the
use of the management’s judgment, in particular with appropriateness of methodology and key assumptions
reference to forecast of future cash flows, selling price, considered by management to determine discounted
balance cost to complete the project, selling costs, future cash flows.
terminal value, long-term growth rates and discount  Performed sensitivity analysis around impact on
rates applied to such forecasted cash flows. Considering future cash flows due to changes in key assumptions
the judgment required for estimating the cash flows considered by management.
and the assumptions used, this is considered as a key  Verified the arithmetical accuracy of the future cash
audit matter. flow model including comparison with approved
Refer Note 1 – Significant Accounting Policies and Note budgets.
2 – Use of estimates and judgements to the Standalone  Assessed the recoverability of investment with regard
Ind AS Financial Statements. to underlying value in use of PPE and net realisable
value of inventory in WLPL.

We have determined that there are no other key audit Responsibilities of Management for the Standalone Ind
matters to communicate in our report. AS Financial Statements
Information Other than the Financial Statements and The Company’s Board of Directors is responsible for the
Auditor’s Report Thereon matters stated in Section 134(5) of the Act with respect to the
preparation of these standalone Ind AS financial statements
The Company’s Board of Directors is responsible for the
that give a true and fair view of the financial position, financial
other information. The other information comprises the
performance including other comprehensive income, cash
information included in the Annual report, but does not
flows and changes in equity of the Company in accordance
include the standalone Ind AS financial statements and our
with the accounting principles generally accepted in India,
auditor’s report thereon.
including the Indian Accounting Standards (Ind AS) specified
Our opinion on the standalone Ind AS financial statements under Section 133 of the Act read with the Companies
does not cover the other information and we do not express (Indian Accounting Standards) Rules, 2015, as amended.
any form of assurance conclusion thereon. This responsibility also includes maintenance of adequate
In connection with our audit of the standalone Ind AS accounting records in accordance with the provisions of
financial statements, our responsibility is to read the other the Act for safeguarding of the assets of the Company and
information and, in doing so, consider whether such other for preventing and detecting frauds and other irregularities;
information is materially inconsistent with the financial selection and application of appropriate accounting policies;
statements or our knowledge obtained in the audit or making judgments and estimates that are reasonable and
otherwise appears to be materially misstated. If, based prudent; and the design, implementation and maintenance
on the work we have performed, we conclude that there is of adequate internal financial controls, that were operating
a material misstatement of this other information, we are effectively for ensuring the accuracy and completeness of
required to report that fact. We have nothing to report in the accounting records, relevant to the preparation and
this regard. presentation of the standalone Ind AS financial statements

216 ITC Limited REPORT AND ACCOUNTS 2022

 Independent Auditor’s Report

that give a true and fair view and are free from material material uncertainty exists, we are required to draw
misstatement, whether due to fraud or error. attention in our auditor’s report to the related disclosures
In preparing the standalone Ind AS financial statements, in the financial statements or, if such disclosures are
management is responsible for assessing the Company’s inadequate, to modify our opinion. Our conclusions
ability to continue as a going concern, disclosing, as are based on the audit evidence obtained up to the
applicable, matters related to going concern and using the date of our auditor’s report. However, future events
going concern basis of accounting unless management or conditions may cause the Company to cease to
either intends to liquidate the Company or to cease continue as a going concern.
operations, or has no realistic alternative but to do so. • Evaluate the overall presentation, structure and
Those Board of Directors are also responsible for content of the standalone Ind AS financial statements,
overseeing the Company’s financial reporting process. including the disclosures, and whether the standalone
Ind AS financial statements represent the underlying
Auditor’s Responsibilities for the Audit of the transactions and events in a manner that achieves fair
Standalone Ind AS Financial Statements presentation.
Our objectives are to obtain reasonable assurance about We communicate with those charged with governance
whether the standalone Ind AS financial statements as a regarding, among other matters, the planned scope and
whole are free from material misstatement, whether due to timing of the audit and significant audit findings, including
fraud or error, and to issue an auditor’s report that includes any significant deficiencies in internal control that we
our opinion. Reasonable assurance is a high level of identify during our audit.
assurance, but is not a guarantee that an audit conducted We also provide those charged with governance with a
in accordance with SAs will always detect a material statement that we have complied with relevant ethical
misstatement when it exists. Misstatements can arise from requirements regarding independence, and to communicate
fraud or error and are considered material if, individually with them all relationships and other matters that may
or in the aggregate, they could reasonably be expected reasonably be thought to bear on our independence, and
to influence the economic decisions of users taken on the where applicable, related safeguards.
basis of these standalone Ind AS financial statements.
From the matters communicated with those charged with
As part of an audit in accordance with SAs, we exercise governance, we determine those matters that were of most
professional judgment and maintain professional skepticism significance in the audit of the standalone Ind AS financial
throughout the audit. We also: statements for the financial year ended March 31, 2022
• 
Identify and assess the risks of material misstatement and are therefore the key audit matters. We describe these
of the standalone Ind AS financial statements, whether matters in our auditor’s report unless law or regulation
due to fraud or error, design and perform audit precludes public disclosure about the matter or when, in
procedures responsive to those risks, and obtain audit extremely rare circumstances, we determine that a matter
evidence that is sufficient and appropriate to provide a should not be communicated in our report because the
basis for our opinion. The risk of not detecting a material adverse consequences of doing so would reasonably be
misstatement resulting from fraud is higher than for one expected to outweigh the public interest benefits of such
resulting from error, as fraud may involve collusion, communication.
forgery, intentional omissions, misrepresentations, or
Report on Other Legal and Regulatory Requirements
the override of internal control.
1. As required by the Companies (Auditor’s Report) Order,
• O
 btain an understanding of internal control relevant
2020 (“the Order”), issued by the Central Government
to the audit in order to design audit procedures
of India in terms of sub-section (11) of Section 143 of
that are appropriate in the circumstances. Under
the Act, we give in the “Annexure 1” a statement on the
Section 143(3)(i) of the Act, we are also responsible
matters specified in paragraphs 3 and 4 of the Order.
for expressing our opinion on whether the Company
has adequate internal financial controls with reference 2. As required by Section 143(3) of the Act, we report that:
to financial statements in place and the operating (a) We have sought and obtained all the information and
effectiveness of such controls. explanations which to the best of our knowledge and
• E
 valuate the appropriateness of accounting policies belief were necessary for the purposes of our audit;
used and the reasonableness of accounting estimates (b) In our opinion, proper books of account as required
and related disclosures made by management. by law have been kept by the Company so far as it
• C
 onclude on the appropriateness of management’s use appears from our examination of those books;
of the going concern basis of accounting and, based (c) The Balance Sheet, the Statement of Profit and Loss
on the audit evidence obtained, whether a material including the Statement of Other Comprehensive
uncertainty exists related to events or conditions that Income, the Cash Flow Statement and Statement
may cast significant doubt on the Company’s ability of Changes in Equity dealt with by this Report are in
to continue as a going concern. If we conclude that a agreement with the books of account;

ITC Limited REPORT AND ACCOUNTS 2022 217

Independent Auditor’s Report

(d) In our opinion, the aforesaid standalone Ind AS with the understanding, whether recorded
financial statements comply with the Accounting in writing or otherwise, that the Intermediary
Standards specified under Section 133 of the Act, shall, whether, directly or indirectly lend or
read with Companies (Indian Accounting Standards) invest in other persons or entities identified
Rules, 2015, as amended; in any manner whatsoever by or on behalf
(e) On the basis of the written representations received of the Company (“Ultimate Beneficiaries”) or
from the directors as on March 31, 2022 taken provide any guarantee, security or the like on
on record by the Board of Directors, none of the behalf of the Ultimate Beneficiaries;
directors is disqualified as on March 31, 2022 b) The management has represented that, to
from being appointed as a director in terms of the best of its knowledge and belief, no funds
Section 164 (2) of the Act; have been received by the Company from
(f) With respect to the adequacy of the internal financial any person or entity, including foreign entities
controls with reference to these standalone Ind AS (“Funding Parties”), with the understanding,
financial statements and the operating effectiveness whether recorded in writing or otherwise,
of such controls, refer to our separate Report in that the Company shall, whether, directly or
“Annexure 2” to this report; indirectly, lend or invest in other persons or
entities identified in any manner whatsoever
(g) In our opinion, the managerial remuneration for the
by or on behalf of the Funding Party (“Ultimate
year ended March 31, 2022 has been paid / provided
Beneficiaries”) or provide any guarantee,
by the Company to its directors in accordance with
security or the like on behalf of the Ultimate
the provisions of Section 197 read with Schedule V
Beneficiaries; and
to the Act;
c) Based on such audit procedures performed
(h) With respect to the other matters to be included in
that have been considered reasonable and
the Auditor’s Report in accordance with Rule 11 of
appropriate in the circumstances, nothing
the Companies (Audit and Auditors) Rules, 2014,
has come to our notice that has caused us
as amended in our opinion and to the best of our
to believe that the representations under
information and according to the explanations given
sub-clause (a) and (b) contain any material
to us:
misstatement.
i. The Company has disclosed the impact of
v. The final dividend paid by the Company during
pending litigations on its financial position in its
the year in respect of the same declared for the
standalone financial statements – Refer Note
previous year is in accordance with Section 123
27(iv)(a) to the standalone Ind AS financial
of the Act to the extent it applies to payment of
statements;
dividend.
ii. The Company did not have any long-term
The interim dividend declared and paid by the
contracts including derivative contracts for which
Company during the year and until the date of
there were any material foreseeable losses;
this audit report is in accordance with Section
iii. There has been no delay in transferring amounts, 123 of the Act.
required to be transferred, to the Investor
As stated in Note B of Statement of changes
Education and Protection Fund by the Company
in equity to the standalone Ind AS financial
iv. a) The management has represented that, to statements, the Board of Directors of the
the best of its knowledge and belief, no funds Company have proposed final dividend for
have been advanced or loaned or invested the year which is subject to the approval of
(either from borrowed funds or share premium the members at the ensuing Annual General
or any other sources or kind of funds) by the Meeting. The dividend declared is in accordance
Company to or in any other person or entity, with Section 123 of the Act to the extent it applies
including foreign entities (“Intermediaries”), to declaration of dividend.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003

per Sudhir Soni

Partner
Place of Signature: Mumbai Membership Number: 41870
Date: May 18, 2022 UDIN: 22041870AJEIXG8741

218 ITC Limited REPORT AND ACCOUNTS 2022

Annexure 1 referred to in paragraph 1 under the heading “Report
   

on Other legal and Regulatory Requirements” of our report of even date

Re: ITC Limited (the “Company”)
In terms of the information and explanations sought by us and given by the Company and the books of account and records
examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:
(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation
of property, plant and equipment.
(B) The Company has maintained proper records showing full particulars of intangibles assets.
(b) The property, plant and equipment were physically verified during the year by the management in accordance with
a regular programme of verification which, in our opinion, provides for physical verification of all the property, plant
and equipment at reasonable intervals. According to the information and explanations given to us, no material
discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of all the immovable
properties (other than properties where the Company is the lessee and the lease agreements are duly executed in
favour of the lessee) are held in the name of the Company.
(d) The Company has not revalued its Property, Plant and Equipment (including Right of use assets) or intangible
assets during the year ended March 31, 2022.
(e) There are no proceedings initiated or are pending against the Company for holding any benami property under the
Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of
verification by the management is reasonable and the coverage and procedure for such verification is appropriate.
Inventories lying with third parties have substantially been confirmed by them as at year end. No discrepancies of
10% or more in aggregate for each class of inventory (including inventories lying with third parties) were noticed.
(b) As disclosed in note 8 to the financial statements, the Company has been sanctioned working capital limits in excess
of ` 5 Crores in aggregate from banks during the year on the basis of security of inventories of the Company. Based
on the records examined by us in the normal course of audit of the financial statements, the quarterly returns /
statements filed by the Company with such banks are in agreement with the books of accounts of the Company.
(iii) (a) During the year the Company has not provided loans, advances in the nature of loans, stood guarantee or provided
security to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirement to
report on clause 3(iii)(a) of the Order is not applicable to the Company.
(b) During the year the investments made by the Company is not prejudicial to the Company’s interest. The Company
has not provided guarantees or security and has not granted loans and advances in the nature of loans to companies,
firms, Limited Liability Partnerships or any other parties and hence not commented upon.
(c) The Company has not granted loans and advances in the nature of loans to companies, firms, Limited Liability
Partnerships or any other parties. Accordingly, the requirement to report on clause 3(iii)(c) to 3(iii)(f) of the Order is
not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of Section 185 and 186 of the
Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of
loans and advances given, investments made and, guarantees, and securities given have been complied with by the
Company.
(v) According to the information and explanations given to us, the Company has not accepted any deposit from the public
nor accepted any amounts which are deemed to be deposits during the year within the meaning of Sections 73 and 76 of
the Companies Act, 2013. In respect of unclaimed deposits, the Company has complied with the provisions of Sections
74 and 75 or any other relevant provisions of the Companies Act, 2013. We are informed by the management that no
order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013, related to the

ITC Limited REPORT AND ACCOUNTS 2022 219

 manufacture of specified products of the Company and are of the opinion that prima facie, the specified accounts and
records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Goods and
Services Tax, provident fund, employees’ state insurance, income-tax, duty of custom, duty of excise, cess and
other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Goods
and Services Tax, provident fund, employees’ state insurance, income-tax, duty of custom, duty of excise, cess
and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they
became payable.
(c) The dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other
statutory dues have not been deposited on account of any dispute, are as follows:

Name of Nature of Amount Period to which Forums where the dispute

the statute the dues (` in Crores)* the amount relates is pending
(Financial Year)

Sales Tax and Sales Tax 58.08 1987-2018 Appellate Authority–

Value Added and VAT upto commissioners’/
Tax Laws Revisional Authorities Level
29.27 2000-2018 Appellate Authority–
Tribunal Level
219.25 1994-2017 High Court

Customs Act, Customs 0.75 2012-2016 Appellate Authority –

1962 Duty upto commissioners’/
Revisional Authorities Level
7.90 2011-2022 Appellate Authority–
Tribunal Level

Central Excise Excise Duty 0.44 1996-2018 Appellate Authority –

Act, 1944 upto commissioners’/
Revisional Authorities Level
91.28 1973-2017 Appellate Authority–
Tribunal Level
4.35 2004-2012 High Court

Finance Act, Service Tax 4.82 2006-2017 Appellate Authority –

1994 upto commissioners’/
Revisional Authorities Level
74.69 2003-2017 Appellate Authority–
Tribunal Level
4.93 2005-2007 High Court

Entry Tax Laws Entry Tax 0.04 2005-2014 Appellate Authority –

upto commissioners’/
Revisional Authorities Level
32.40 2010-2018 Appellate Authority –
Tribunal Level
50.06 1999-2018 High Court

220 ITC Limited REPORT AND ACCOUNTS 2022

 Name of Nature of Amount Period to which Forums where the dispute
the statute the dues (` in Crores)* the amount relates is pending
(Financial Year)

Luxury Tax Laws Luxury Tax 55.22 1999-2010 High Court

Mandi Laws Mandi Fees 2.54 2010-2022 Mandi Board

& Cess
2.27 2001-2011 High Court

Municipal, Local Municipal, 3.44 2014-2021 Appellate Authority –

Bodies and Local upto commissioners’/
Property Tax Bodies and Revisional Authorities Level/
Laws Property Municipal Council
Taxes &
2.40 2004 Appellate Authority –
Charges
Tribunal Level

32.31 2001-2018 High Court

Stamp Duty Stamp Duty 4.22 2004-2016 Registrar/

Laws Appellate Authority

0.04 1987-2008 High Court

The Employees’ Provident 0.14 2012-2016 Appellate Authority –

Provident Fund Tribunal Level
Funds and
Miscellaneous
Provisions Act,
1952
1.49 1982-1990 High Court

Employees’ Employees’ 0.08 2007-2014 Principal Labour Court

State Insurance State
Act, 1948 Insurance

0.95 1995-2012 High Court

Out of the total disputed dues aggregating ` 683.36 Crores as above, ` 549.91 Crores pertain to matters which
have been stayed for recovery by the relevant authorities.
*Net of amount paid under protest.

(viii) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the
tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report
on clause 3(viii) of the Order is not applicable to the Company.
(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to
any lender.
(b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.

ITC Limited REPORT AND ACCOUNTS 2022 221

 (c) The Company did not have any term loans outstanding during the year hence, the requirement to report on clause
(ix)(c) of the Order is not applicable to the Company.
(d) The Company did not raise any funds during the year hence, the requirement to report on clause (ix)(d) of the Order
is not applicable to the Company.
(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from
any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Hence,
the requirement to report on clause (ix)(e) of the Order is not applicable to the Company.
(f) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures
or associate companies. Hence, the requirement to report on clause (ix)(f) of the Order is not applicable to the
Company.
(x) (a) According to the information and explanations given by the management, the Company has not raised any money
during the year by way of initial public offer / further public offer (including debt instruments) hence, reporting under
clause 3(x)(a) is not applicable to the Company and hence not commented upon.
(b) The Company has not made any preferential allotment or private placement of shares / fully or partially or optionally
convertible debentures during the year under audit and hence, the requirement to report on clause 3(x)(b) of the
Order is not applicable to the Company.
(xi) (a) No fraud by the Company or no material fraud on the Company has been noticed or reported during the year.
(b) During the year, no report under sub-section (12) of Section 143 of the Companies Act, 2013 has been filed by
cost auditor / secretarial auditor or by us in Form ADT – 4 as prescribed under Rule 13 of Companies (Audit and
Auditors) Rules, 2014 with the Central Government.
(c) We have taken into consideration the whistle blower complaints received by the Company during the year while
determining the nature, timing and extent of audit procedures.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) (a) to (c) of the order are
not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in
compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed
in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) (a) The Company has an internal audit system commensurate with the size and nature of its business.
(b) The internal audit reports of the Company issued till the date of the audit report, for the period under audit have
been considered by us.
(xv) According to the information and explanations given by the management, the Company has not entered into any
non-cash transactions with directors or persons connected with him as referred to in Section 192 of Companies Act, 2013.
(xvi) (a) According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of
India Act, 1934 are not applicable to the Company.
(b) The Company is not engaged in any Non-Banking Financial or Housing Finance activities. Accordingly, the
requirement to report on clause (xvi)(b) of the Order is not applicable to the Company.
(c) The Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India.
Accordingly, the requirement to report on clause 3(xvi) of the Order is not applicable to the Company.
(d) The Group does not have more than one CIC as part of the Group, hence, the requirement to report on clause
3(xvi)(d) of the Order is not applicable to the Company.

222 ITC Limited REPORT AND ACCOUNTS 2022

(xvii) The Company has not incurred cash losses in the current year and in the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors during the year and accordingly requirement to report on
Clause 3(xviii) of the Order is not applicable to the Company.
(xix) On the basis of the financial ratios disclosed in note 27 (xiii) to the financial statements, ageing and expected dates
of realization of financial assets and payment of financial liabilities, other information accompanying the financial
statements, our knowledge of the Board of Directors and management plans and based on our examination of the
evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material
uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the
date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however,
state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based
on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities
falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when
they fall due.
(xx) (a) In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a
fund specified in Schedule VII of the Companies Act (the Act), in compliance with second proviso to sub-section 5
of Section 135 of the Act. This matter has been disclosed in note 27 (ii) to the financial statements.
(b) All amounts that are unspent under sub-section (5) of Section 135 of Companies Act, pursuant to any ongoing
project, has been transferred to special account in compliance of with provisions of sub-section (6) of Section 135
of the said Act. This matter has been disclosed in note 27 (ii) to the financial statements.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E / E300003

per Sudhir Soni

Partner
Membership Number: 41870
Place of Signature: Mumbai
Date: May 18, 2022 UDIN: 22041870AJEIXG8741

ITC Limited REPORT AND ACCOUNTS 2022 223

Annexure 2 to the Independent Auditor’s Report of even date on
   

the Standalone Financial Statements of ITC Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)

We have audited the internal financial controls with reference to standalone financial statements of ITC Limited (“the
Company”) as of March 31, 2022 in conjunction with our audit of the standalone financial statements of the Company for
the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of
adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its
business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls with reference to these standalone
financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, as specified
under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by ICAI.
Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether adequate internal financial controls with reference to these standalone
financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial
controls with reference to standalone financial statements included obtaining an understanding of internal financial controls
with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
on the Company’s internal financial controls with reference to these standalone financial statements.

Meaning of Internal Financial Controls With Reference to these Standalone Financial Statements

A company’s internal financial controls with reference to standalone financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference

224 ITC Limited REPORT AND ACCOUNTS 2022

to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets
that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including
the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone
financial statements to future periods are subject to the risk that the internal financial control with reference to standalone
financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone
financial statements and such internal financial controls with reference to standalone financial statements were operating
effectively as at March 31, 2022, based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E / E300003

per Sudhir Soni

Partner
Membership Number: 41870
Place of Signature: Mumbai
Date: May 18, 2022 UDIN: 22041870AJEIXG8741

ITC Limited REPORT AND ACCOUNTS 2022 225

Guide to Subsidiaries / Joint Ventures / Associates
Subsidiaries of ITC Limited ITC Infotech India Limited (I3L)

Russell Credit Limited Shareholding

Shareholding 100% held by ITC Limited.

100% held by ITC Limited. Nature of Business
Nature of Business Information technology services and solutions.
Investment company. Its activities are primarily confined to Subsidiaries
making long term investments in strategic thrust areas for I3L owns 100% of the shareholding of:
ITC, namely FMCG, Hotels & Tourism, Paper, Paperboards
& Packaging, Agri Business and Information Technology. ITC Infotech Limited, UK (I2B) and
ITC Infotech (USA), Inc. (I2A)
Subsidiary
I2A owns 100% of the shareholding of Indivate Inc.
Greenacre Holdings Limited, a wholly owned subsidiary, is
engaged in property infrastructure maintenance, providing incorporated as a New Jersey Corporation.
engineering, procurement & construction management I3L, I2A and I2B are engaged in the information technology
services and project management consultancy services. services business. Indivate Inc. is principally engaged in
providing business consulting services and opportunity
Gold Flake Corporation Limited (GFCL) based trading of fast moving consumer goods.
Shareholding
Surya Nepal Private Limited, Nepal
100% held by ITC Limited.
Nature of Business Shareholding
General trading. 59% held by ITC Limited.

Joint Venture Nature of Business

ITC Essentra Limited, India, is a 50% joint venture Manufacture and sale of cigarettes & branded packaged
of GFCL with Essentra Filter Products International food products and in the business of matches and
Limited, UK. agarbatti.
Nature of Business
Srinivasa Resorts Limited
Manufacture and sale of cigarette filter rods.
Shareholding
ITC Investments & Holdings Limited (IIHL) 68% held by ITC Limited.
Shareholding Nature of Business
100% held by ITC Limited. The Company owns the hotel “ITC Kakatiya” at Hyderabad,
Nature of Business for which operating services are rendered by ITC Limited.
Investment company.
Fortune Park Hotels Limited
Subsidiary
Shareholding
IIHL owns 100% of the shareholding of MRR Trading
& Investment Company Limited, which provides estate 100% held by ITC Limited.
maintenance services. Nature of Business
Landbase India Limited The Company is in the business of operating hotels in
the mid-market to upscale segment under its hospitality
Shareholding
brands for the same. It currently operates 39 properties.
100% held by ITC Limited.
Nature of Business Bay Islands Hotels Limited
Hospitality, management and operation of golf course and Shareholding
real estate development. 100% held by ITC Limited.
The Company owns the Classic Golf & Country Club, a
27-hole Jack Nicklaus Signature Golf Course. It also owns Nature of Business
a 104 key all suite luxury retreat “ITC Grand Bharat” which The Company owns the hotel “Welcomhotel Bay Island” at
is licensed to and operated by ITC Limited. Port Blair, which is licensed to ITC Limited.

226 ITC Limited REPORT AND ACCOUNTS 2022

WelcomHotels Lanka (Private) Limited, Sri Lanka Pavan Poplar Limited & Prag Agro Farm Limited
Shareholding Shareholding
100% held by ITC Limited. 100% held by ITC Limited.
Nature of Business Nature of Business
The Company is developing a plot of land in Colombo for The Companies are engaged in the business of agro-forestry
a mixed use development project including a luxury hotel. and other related activities.
Wimco Limited ITC IndiVision Limited
Shareholding Shareholding
100% held by ITC Limited. 100% held by ITC Limited.
Nature of Business Nature of Business
Wimco Limited is engaged in fabrication and assembly of The company is in the process of setting up a greenfield
machinery for tube filling, cartoning, wrapping, conveyor
manufacturing facility for the manufacture and export of
solutions and engineering services.
nicotine and nicotine derivative products.
Technico Pty Limited, Australia (Technico)
Joint Ventures of ITC Limited
Shareholding
100% held by ITC Limited. Maharaja Heritage Resorts Limited
Maharaja Heritage Resorts Limited, where ITC Limited
Nature of Business
has an ownership interest of 50% (25% held through
An agri-biotechnology company primarily engaged in
Russell Credit Limited, a 100% subsidiary of the Company),
commercialisation of seed potatoes with TECHNITUBER ®
is a joint venture with Jodhana Heritage Resorts Private
technology.
Limited.
Subsidiaries
Nature of Business
Technico has two wholly owned subsidiaries, namely
Technico Technologies Inc., Canada and Technico Asia The joint venture company currently provides Franchise
Holdings Pty Limited, Australia. & Marketing Services to 37 operational hotel properties
spread across 15 states with its WelcomHeritage brand
Technico Asia Holdings Pty Limited, Australia, has a
portfolio comprising of “Legend Hotels”, “Heritage Hotels”
wholly owned subsidiary, Technico Horticultural (Kunming)
and “Nature Resorts” which provide uniquely differentiated
Company Limited, China.
offerings to guests in the cultural, heritage and adventure
These companies support Technico in the production and
tourism segments respectively.
commercialisation of seed potato technology in different
geographies. Espirit Hotels Private Limited
Technico Agri Sciences Limited ITC Limited holds 26% in Espirit Hotels Private Limited.

Shareholding Nature of Business

100% held by ITC Limited. The joint venture company is in the process of developing
a luxury hotel complex at Begumpet, Hyderabad.
Nature of Business
An agri-biotechnology company primarily engaged in rapid Logix Developers Private Limited
multiplication and commercialisation of seed potatoes ITC Limited holds 27.90% in Logix Developers Private
with TECHNITUBER® technology & sourcing / supply of Limited.
fruits and vegetables.
Nature of Business
North East Nutrients Private Limited The joint venture company is intended for the purpose
Shareholding of developing a luxury hotel-cum-serviced apartment
76% held by ITC Limited. complex at Noida, Uttar Pradesh.

Nature of Business Major Associates of the Group

The Company is in the business of manufacture and sale
of packaged food products from its food processing facility Gujarat Hotels Limited
based in Assam. ITC Limited holds 45.78% in Gujarat Hotels Limited.

ITC Limited REPORT AND ACCOUNTS 2022 227

Nature of Business (residual interest in the assets of the subsidiaries after
The Company owns the “Welcomhotel Vadodara” at deducting all its liabilities) of the subsidiaries at the
Vadodara which is operated by ITC Limited under an date of investment in the subsidiaries are treated as
Operating Licence Agreement. goodwill / capital reserve in the CFS. The goodwill is
disclosed as an asset and capital reserve as a reserve
International Travel House Limited in the Consolidated Balance Sheet.
ITC Limited holds 3.60% and Russell Credit Limited, a Profit or loss and each component of other comprehensive
100% subsidiary of ITC Limited, holds 45.36%. income are attributed to the Group as owners and to
Nature of Business the non-controlling interest; likewise the non-controlling
Air ticketing, car rentals, inbound outbound tourism, interests in the net assets of the consolidated subsidiaries
domestic holidays, conferences, events & exhibition is identified and presented separately within Equity in the
management and foreign exchange services for travellers. Consolidated Balance Sheet.

Note: The full list of the Group’s Associates appears on Inter-Company transactions within the Group (both Profit
page 282. & Loss and Balance Sheet items) are eliminated for
arriving at the Group CFS.
Principles of Consolidation CFS is prepared applying uniform accounting policies of
The Group’s interests in its subsidiaries, associates and ITC Limited to the Group companies.
joint ventures are reflected in the Consolidated Financial
Statements (CFS) in accordance with the relevant Indian Associates and Joint Ventures (Ind AS 28)
Accounting Standards (Ind AS) specified under Section An investment in associate and joint venture is initially
133 of the Companies Act, 2013. recognised at cost on the date of the investment, and is
inclusive of any goodwill / capital reserve embedded in
Subsidiaries (Ind AS 110) the cost.
Line by line consolidation of the Statement of Profit and Only share of net profits / losses of associates / joint
Loss and Balance Sheet is done by aggregating like items ventures is considered in Consolidated Statement of
of assets, liabilities, income and expenses. Profit and Loss. The carrying amount of the investment in
The excess / deficit of the cost to ITC Limited of its associates / joint ventures is adjusted by the share of net
investments in its subsidiaries over its share of net worth profits / losses in the Consolidated Balance Sheet.

228 ITC Limited REPORT AND ACCOUNTS 2022

 Form AOC-1
(Pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of Subsidiaries / Associate companies / Joint Ventures
Part A : Subsidiaries
(` in Crores)

Name of the Subsidiary ITC Infotech ITC Infotech ITC Infotech Indivate Inc. Surya Nepal Technico Pty Technico Agri Technico Technico Asia
India Limited (USA), Inc. Limited Private Limited Sciences Technologies Holdings Pty
Limited Limited Inc. Limited

1. The date since when

subsidiary was acquired 21-Aug-2000 17-Jun-1993 26-Jan-1993 18-Nov-2016 20-Aug-2002 17-Aug-2007 17-Aug-2007 17-Aug-2007 17-Aug-2007
2. Financial Year ending on 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 14-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022
Reporting Currency Indian Rupee US Dollar British Pound US Dollar Nepalese Australian Indian Rupee Canadian Australian
Rupee Dollar Dollar Dollar
3.
Exchange Rate on the last day
of the financial year – 75.7925 99.4550 75.7925 0.6250 56.7425 – 60.4900 56.7425
4. Share Capital 85.20 137.94 6.82 0.76 126.00 110.59 37.96 6.89 20.91
5. Reserves & Surplus (including
Other Comprehensive Income) 691.80 58.75 66.40 0.21 641.14 (55.69) 64.57 (4.91) (15.41)
6. Total Assets 1059.21 341.24 134.18 1.58 1420.55 61.03 229.32 2.16 5.50

7. Total Liabilities (excluding Total Equity) 282.21 144.55 60.96 0.61 653.41 6.13 126.79 0.18 –
8. Investments (excluding Investments
made in subsidiaries) 69.04 – – – – – 36.21 – –

ITC Limited
9. Turnover 2316.36 1010.64 399.20 3.19 2773.29 11.31 261.03 0.73 –
10. Profit / (Loss) before tax 689.30 25.19 8.90 0.10 902.52 5.45 50.82 (0.18) –
11. Provision for tax (171.49) (6.13) (1.07) – (274.44) (0.34) (7.78) – –
12. Profit / (Loss) after tax 517.81 19.06 7.83 0.10 628.08 5.11 43.04 (0.18) –
13. Proposed Dividend@ 451.56 – – – 588.42 – 30.37 – –
14. % of shareholding 100.00 100.00 100.00 100.00 59.00 100.00 100.00 100.00 100.00

REPORT AND ACCOUNTS 2022

@ includes dividend paid during the year
Note: Turnover includes Other Income and Other Operating Revenue. Profit / (Loss) figures do not include Other Comprehensive Income.

229
230
Part A: Subsidiaries (Contd.) (` in Crores)

Name of the Subsidiary Technico Srinivasa Fortune Park Landbase Bay Islands WelcomHotels Russell Greenacre

ITC Limited
Horticultural Resorts Hotels India Hotels Lanka Credit Holdings
(Kunming) Co. Limited Limited Limited Limited (Private) Limited Limited
Limited Limited

1. The date since when subsidiary was

acquired 17-Aug-2007 06-Feb-1995 06-Mar-1996 09-Sept-2000 08-Mar-1999 04-May-2012 26-Sept-1997 09-Nov-1994
2. Financial Year ending on 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022
Reporting Currency Chinese Yuan Indian Rupee Indian Rupee Indian Rupee Indian Rupee Sri Lankan Indian Rupee Indian Rupee
Renminbi Rupee
3.

REPORT AND ACCOUNTS 2022

Exchange Rate on the last
day of the financial year 11.9490 – – – – 0.2535 – –
4. Share Capital 22.72 24.00 0.45 317.00 0.12 1324.37 646.48 42.06
5. Reserves & Surplus (including Other
Comprehensive Income) 1.62 64.24 18.78 (73.54) 19.85 (1.34) 328.04 10.63
6. Total Assets 24.83 103.80 26.40 285.92 20.42 1368.68 982.98 55.19
7. Total Liabilities (excluding Total Equity) 0.49 15.56 7.17 42.46 0.45 45.65 8.46 2.50
8. Investments (excluding Investments
made in subsidiaries) – 38.40 4.87 6.93 3.94 – 925.15 33.61
9. Turnover 6.80 44.86 25.39 29.46 1.61 12.81 41.56 8.09
10. Profit / (Loss) before tax 2.60 (2.15) 0.46 2.85 1.53 11.77 36.86 1.95
11. Provision for tax – 0.52 (0.28) – (0.38) – (3.40) (0.16)
12. Profit / (Loss) after tax 2.60 (1.63) 0.18 2.85 1.15 11.77 33.46 1.79
13. Proposed Dividend@ – – – – 0.08 – 16.16 –
14. % of shareholding 100.00 68.00 100.00 100.00 100.00 100.00 100.00 100.00

@ includes dividend paid during the year

Note: Turnover includes Other Income and Other Operating Revenue. Profit / (Loss) figures do not include Other Comprehensive Income.
 Part A: Subsidiaries (Contd.) (` in Crores)

Name of the Subsidiary Wimco Gold Flake ITC MRR Trading North East Prag Agro Pavan Poplar ITC
Limited Corporation Investments & Investment Nutrients Farm Limited Limited IndiVision
Limited & Holdings Company Private Limited
Limited Limited Limited

1. The date since when subsidiary was

acquired 01-Jul-2005 29-Jan-1982 17-May-2012 23-Dec-1998 06-Feb-2014 01-Jul-2005 01-Jul-2005 29-Jul-2020
2. Financial Year ending on 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022
Reporting Currency Indian Rupee Indian Rupee Indian Rupee Indian Rupee Indian Rupee Indian Rupee Indian Rupee Indian Rupee
3. Exchange Rate on the last day
of the financial year – – – – – – – –
4. Share Capital 18.51 16.00 4.50 0.05 73.00 1.28 5.51 120.00
5. Reserves & Surplus (including Other
Comprehensive Income) (21.84) 14.19 0.98 (0.03) 25.08 (0.30) (5.18) (2.55)
6. Total Assets 6.24 31.84 5.48 0.07 125.84 1.03 0.36 182.24

7. Total Liabilities
(excluding Total Equity) 9.57 1.65 ... 0.05 27.76 0.05 0.03 64.79
8. Investments (excluding Investments
made in subsidiaries) 2.00 8.19 – – 21.02 – – 9.05
9. Turnover 11.81 17.29 0.05 0.07 164.59 0.09 0.05 0.43
10. Profit / (Loss) before tax (0.42) 16.16 0.01 … 15.13 (0.04) (0.04) (1.29)
11. Provision for tax – (0.08) … … (0.70) (0.01) – …
12. Profit / (Loss) after tax (0.42) 16.08 0.01 … 14.43 (0.05) (0.04) (1.29)

ITC Limited
13. Proposed Dividend@ – 16.00 – – 1.80 – – –
14. % of shareholding 100.00 100.00 100.00 100.00 76.00 100.00 100.00 100.00

@ includes dividend paid during the year

Notes:
i) WelcomHotels Lanka (Private) Limited and ITC IndiVision Limited are yet to commence commercial operations.
ii) During the year, pursuant to the Order of the Hon’ble National Company Law Tribunal, Allahabad Bench, Hobbits International Foods Private Limited (Hobbits) and Sunrise Sheetgrah Private
Limited (Sheetgrah), wholly owned subsidiaries, were amalgamated with the Company and hence, were dissolved without winding up with effect from 12th August, 2021 [Refer Note 28(vii) to
the Consolidated Financial Statements].

REPORT AND ACCOUNTS 2022

iii) No other subsidiary was liquidated or sold during the year.
iv) Turnover includes Other Income and Other Operating Revenue. Profit / (Loss) figures do not include Other Comprehensive Income.

231
 Part B : Associates and Joint Ventures

232
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate companies and Joint Ventures

Name of Associates / Joint Ventures Espirit Logix ITC Maharaja International Russell Gujarat Divya ATC Limited Antrang Delectable
Hotels Developers Essentra Heritage Travel Investments Hotels Management Finance Technologies
Private Private Limited Resorts House Limited Limited Limited Limited Private
Limited Limited# Limited Limited Limited

ITC Limited
1. Latest audited Balance Sheet Date 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022
2. Date on which the Associate or Joint
Venture was associated or acquired 24-Sept-2010 27-Sept-2011 30-Jun-1994 02-Jul-1997 21-Mar-1982 14-May-1988 12-Sept-1986 23-Nov-2007 18-Jan-1995 21-Jan-2008 17-Sep-2020
3. Shares of Associate / Joint Venture
held by the Company on the year end
Number 4,65,09,200 77,66,913 22,50,000 1,80,000 39,14,233 42,75,435 17,33,907 41,82,915 1,94,775* 43,24,634 5,892 ^
Amount of Investment in Associate /
Joint Venture (` in Crores) 46.17 – 94.57 … 59.20 26.56 17.95 7.57 7.12 4.94 5.16 ^
Extent of Holding % 26.00 27.90 50.00 50.00 48.96 25.43 45.78 33.33 47.50 33.33 27.34 @

REPORT AND ACCOUNTS 2022

4. Description of how there is
Joint Venture Joint Venture Joint Venture Joint Venture Associate Associate Associate Associate Associate Associate Associate
significant influence
5. Reason why the Associate / Joint
Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated
Venture is not consolidated
6. Net worth attributable to Shareholding
as per latest audited Balance Sheet
(` in Crores) 46.17 –$ 94.16 –$ 46.62 27.18 16.79 6.49 6.92 4.85 0.69
7. Profit / (Loss) for the year
(` in Crores) … (47.58) 41.08 0.28 (10.70) 3.69 2.72 0.28 0.35 0.05 (1.30)
i. Considered in Consolidation
(` in Crores) … –$ 20.54 –$ (5.24) 0.94 1.24 0.09 0.17 0.02 (0.28)
ii. Not considered in Consolidation
(` in Crores) … (47.58) 20.54 0.28 (5.46) 2.75 1.48 0.19 0.18 0.03 (1.02)

* Comprises 55,650 shares fully paid up and 1,39,125 shares partly paid up [Refer Note 4 to the Consolidated Financial Statements].
^ Comprises 100 equity shares fully paid up (investment ` 0.10 Crore) and 5,792 Compulsorily Convertible Cumulative Preference Shares fully paid up (investment ` 5.06 Crores)
[Refer Note 4 to the Consolidated Financial Statements].
@ on a fully diluted basis.
# Financial Statements are as certified by the management of Logix Developers Private Limited [Refer Note 28 (ii) (d) to the Consolidated Financial Statements].
$ Net worth attributable to Shareholding and Share of profit / (loss) has not been considered in accordance with Ind AS 28 - Investments in Associates and Joint Ventures.

Notes:
i) Espirit Hotels Private Limited and Logix Developers Private Limited are yet to commence commercial operations.
ii) No Associate or Joint Venture was liquidated or sold during the year.

On behalf of the Board

R. K. SINGHI S. DUTTA R. TANDON S. PURI
Kolkata, May 18, 2022 Company Secretary Chief Financial Officer Director Chairman & Managing Director
Consolidated
Financial Statements
Balance Sheet 234

Statement of Profit and Loss 235

Statement of Changes in Equity 236

Cash Flow Statement 238

Notes to the Consolidated

Financial Statements 240

Independent Auditor’s Report 309

ITC Limited REPORT AND ACCOUNTS 2022 233

Consolidated Balance Sheet as at 31st March, 2022
As at As at
Note 31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
ASSETS
Non-current assets
(a) Property, Plant and Equipment 3A 20207.43 19153.94
(b) Capital work-in-progress 3B 3198.45 4004.45
(c) Investment Property 3C 364.20 376.56
(d) Goodwill 3D 779.73 779.73
(e) Other Intangible assets 3E 2013.10 2011.06
(f) Intangible assets under development 3F 27.09 6.84
(g) Right of Use Assets 3G 867.13 977.19
(h) Investment accounted for using the equity method 4 269.24 262.55
27726.37 27572.32
(i) Financial Assets
(i) Investments 4 12307.49 9761.99
(ii) Loans 5 6.61 4.07
(iii) Others 6 1589.58 13903.68 101.87 9867.93
(j) Deferred tax assets (Net) 7 63.53 58.54
(k) Income Tax Assets (Net) 21A 42.30 33.04
(l) Other non-current assets 8 1291.22 43027.10 1295.48 38827.31
Current assets
(a) Inventories 9 10864.15 10397.16
(b) Biological assets other than bearer plants 10 109.44 110.06
(c) Financial Assets
(i) Investments 11 12264.28 14846.33
(ii) Trade receivables 12 2461.90 2501.70
(iii) Cash and cash equivalents 13 271.37 290.42
(iv) Other Bank Balances 14 4383.05 4368.60
(v) Loans 5 6.77 3.47
(vi) Others 6 2565.41 21952.78 1379.02 23389.54
(d) Other current assets 8 1306.08 34232.45 1095.23 34991.99
TOTAL ASSETS 77259.55 73819.30
EQUITY AND LIABILITIES
Equity
(a) Equity Share capital 15 1232.33 1230.88
(b) Other Equity 61223.24 59116.46
Attributable to owners of the parent 62455.57 60347.34
Non-controlling interests 366.30 62821.87 346.81 60694.15
Liabilities
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings 16 4.85 5.58
(ii) Lease liabilities 17A 193.67 206.96
(iii) Other financial liabilities 17B 144.50 343.02 283.50 496.04
(b) Provisions 18 221.05 187.50
(c) Deferred tax liabilities (Net) 7 1673.47 1736.39
(d) Other non-current liabilities 19 36.43 2273.97 15.54 2435.47
Current liabilities
(a) Financial Liabilities
(i) Borrowings 20 0.74 4.23
(ii) Trade payables
Total outstanding dues of micro enterprises and
small enterprises 101.42 61.15
Total outstanding dues of creditors other than
micro enterprises and small enterprises 4315.84 4417.26 4257.58 4318.73
(iii) Lease liabilities 17A 50.18 54.06
(iv) Other financial liabilities 17B 1812.85 1491.50
(b) Other current liabilities 19 5116.03 4294.40
(c) Provisions 18 79.56 194.01
(d) Current Tax Liabilities (Net) 21B 687.09 12163.71 332.75 10689.68
TOTAL EQUITY AND LIABILITIES 77259.55 73819.30

The accompanying notes 1 to 31 are an integral part of the Financial Statements.

In terms of our report attached On behalf of the Board
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants
Firm Registration Number: 324982E / E300003 R. TANDON Director
Sudhir Soni S. DUTTA Chief Financial Officer
Partner R. K. SINGHI Company Secretary
Mumbai, May 18, 2022 Kolkata, May 18, 2022

234 ITC Limited REPORT AND ACCOUNTS 2022

Consolidated Statement of Profit and Loss for the year ended 31st March, 2022
For the year ended For the year ended
Note 31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
I Revenue From Operations 22A, 22B 65204.96 53155.12
II Other Income 23 1836.35 2632.56
III Total Income (I + II) 67041.31 55787.68
IV EXPENSES
Cost of materials consumed 16399.94 13939.84
Purchases of Stock-in-Trade 10671.13 6836.87
Changes in inventories of finished goods, Stock-in-Trade,
work-in-progress and intermediates (686.00) (645.27)
Excise duty 4536.87 3882.34
Employee benefits expense 24 4890.55 4463.33
Finance costs 25 39.36 44.58
Depreciation and amortization expense 1732.41 1645.59
Other expenses 26 8734.06 7675.31
Total expenses (IV) 46318.32 37842.59
V Share of profit / (loss) of Associates and Joint Ventures 17.48 (6.92)
VI Profit before exceptional items and tax (III - IV + V) 20740.47 17938.17
VII Exceptional Items – –
VIII Profit before tax (VI + VII) 20740.47 17938.17
IX Tax expense:
Current Tax 27 5306.58 4463.74
Deferred Tax 27 (69.24) 91.55
X Profit for the year (VIII - IX) 15503.13 13382.88
Other Comprehensive Income
A (i) Items that will not be reclassified to profit or loss:
– Remeasurements of the defined benefit plans 28(vi) 32.06 (22.44)
– Equity instruments through other comprehensive income 632.57 288.90
– Effective portion of gains / (losses) on designated portion of
hedging instruments in a cash flow hedge (11.90) (6.64)
– Share of OCI in Associates and Joint Ventures 3.40 1.69
(ii) Income tax relating to items that will not be reclassified to
profit or loss 27 (5.12) (1.38)
B (i) Items that will be reclassified to profit or loss:
– Exchange differences in translating the financial statements
of foreign operations (584.18) (83.72)
– Debt instruments through other comprehensive income 3.71 –
– Effective portion of gains / (losses) on designated portion of
hedging instruments in a cash flow hedge 14.78 40.76
(ii) Income tax relating to items that will be reclassified to profit
or loss 27 (4.65) (10.26)
XI Other Comprehensive Income [A (i + ii) + B (i + ii)] 80.67 206.91
XII Total Comprehensive Income for the year (X + XI) 15583.80 13589.79
Profit for the year
Attributable to:
Owners of the parent 15242.66 13161.19
Non-controlling interests 260.47 221.69
Total Comprehensive Income for the year
Attributable to:
Owners of the parent 15323.11 13368.35
Non-controlling interests 260.69 221.44
XIII Earnings per equity share (Face Value ` 1.00 each): 28(i)
(1) Basic (in `) 12.37 10.70
(2) Diluted (in `) 12.37 10.70

The accompanying notes 1 to 31 are an integral part of the Financial Statements.

In terms of our report attached On behalf of the Board
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants
Firm Registration Number: 324982E / E300003 R. TANDON Director
Sudhir Soni S. DUTTA Chief Financial Officer
Partner R. K. SINGHI Company Secretary
Mumbai, May 18, 2022 Kolkata, May 18, 2022

ITC Limited REPORT AND ACCOUNTS 2022 235

236
Consolidated Statement of changes in equity for the year ended 31st March, 2022
A. Equity Share Capital (` in Crores)

Balance at the beginning Changes in equity share Balance at the end of the
of the reporting year capital during the year reporting year

For the year ended 31st March, 2022 1230.88 1.44 1232.33

ITC Limited
For the year ended 31st March, 2021 1229.22 1.66 1230.88

B. Other Equity  (` in Crores)

Reserves and Surplus Items of other comprehensive income Attributable Non-

to owners controlling
Special Exchange of the interests
Reserve differences parent
under Employees Debt Equity on translating Total
Section Housing Share Instruments Instruments Effective the financial
Capital 45-IC of the Reserve Options Capital through Other through Other portion of statements
Capital Securities Reserve on RBI Act, under Nepal Subsidy Outstanding Redemption Contingency General Retained Comprehensive Comprehensive Cash Flow of foreign
Reserve Premium Consolidation 1934 labour laws Reserve Account Reserve Reserve Reserve Earnings Income Income Hedges operations

REPORT AND ACCOUNTS 2022

Balance as at 1st April, 2021 5.46 9582.81 72.67 153.49 94.26 0.23 1706.52 0.22 363.05 17672.57 29229.31 – 256.06 4.93 (25.12) 59116.46 346.81 59463.27
Profit for the year – – – – – – – – – – 15242.66 – – – – 15242.66 260.47 15503.13
Other Comprehensive Income (net of tax) – – – – – – – – – – 24.03 2.78 635.66 2.16 (584.18) 80.45 0.22 80.67
Total Comprehensive Income for the year – – – – – – – – – – 15266.69 2.78 635.66 2.16 (584.18) 15323.11 260.69 15583.80
Issue of equity shares under ITC Employee Stock
Option Schemes – 290.38 – – – – – – – – – – – – – 290.38 – 290.38
Dividend
– Final Dividend (2020-21 - ` 5.75 per share) – – – – – – – – – – (7077.59) – – – – (7077.59) (241.25) (7318.84)
– Interim Dividend (2021-22 - ` 5.25 per share) – – – – – – – – – – (6469.48) – – – – (6469.48) – (6469.48)
Transfer from Employee Housing Reserve – – – – (12.60) – – – – – 12.60 – – – – – – –
Transfer from retained earnings – – – 6.69 – – – – – – (6.69) – – – – – – –
Recognition of share based payment – – – – – – 33.51 – – – – – – – – 33.51 – 33.51
Transfer from Share Option Outstanding account
on exercise and lapse – 86.12 – – – – (423.70) – – – 337.58 – – – – – – –
Effect of capital reduction of subsidiary – – – – – … – – – – (0.39) – – – – (0.39) 0.05 (0.34)
Transferred to initial carrying amount of hedged
items (net of tax) – – – – – – – – – – – – – 7.24 – 7.24 – 7.24
Balance as at 31st March, 2022 5.46 9959.31 72.67 160.18 81.66 0.23 1316.33 0.22 363.05 17672.57 31292.03 2.78 891.72 14.33 (609.30) 61223.24 366.30 61589.54
Balance as at 1st April, 2020 5.46 9182.66 72.67 143.60 94.26 0.23 2022.18 0.22 363.05 17672.57 34480.95 – (28.08) (24.33) 58.60 64044.04 377.47 64421.51
Profit for the year – – – – – – – – – – 13161.19 – – – – 13161.19 221.69 13382.88
Other Comprehensive Income (net of tax) – – – – – – – – – – (23.61) – 288.96 25.53 (83.72) 207.16 (0.25) 206.91
Total Comprehensive Income for the year – – – – – – – – – – 13137.58 – 288.96 25.53 (83.72) 13368.35 221.44 13589.79
 Consolidated Statement of changes in equity for the year ended 31st March, 2022
B. Other Equity (Contd.) (` in Crores)
Reserves and Surplus Items of other comprehensive income Attributable Non-
to owners controlling
Special Exchange of the interests
Reserve differences parent
under Employees Debt Equity on translating Total
Section Housing Share Instruments Instruments Effective the financial
Capital 45-IC of the Reserve Options Capital through Other through Other portion of statements
Capital Securities Reserve on RBI Act, under Nepal Subsidy Outstanding Redemption Contingency General Retained Comprehensive Comprehensive Cash Flow of foreign
Reserve Premium Consolidation 1934 labour laws Reserve Account Reserve Reserve Reserve Earnings Income Income Hedges operations
Issue of equity shares under ITC Employee Stock
Option Schemes – 288.99 – – – – – – – – – – – – – 288.99 – 288.99
Dividend
– Final Dividend (2019-20 - ` 10.15 per share) – – – – – – – – – – (12476.61) – – – – (12476.61) (252.10) (12728.71)
– Interim Dividend (2020-21 - ` 5.00 per share) – – – – – – – – – – (6152.68) – – – – (6152.68) – (6152.68)
Dividend distribution tax refund received – – – – – – – – – – 13.98 – – – – 13.98 – 13.98
Transfer from retained earnings – – – 9.89 – – – – – – (9.89) – – – – – – –
Recognition of share based payment – – – – – – 26.66 – – – – – – – – 26.66 – 26.66
Transfer from Share Option Outsanding account
on exercise and lapse – 111.16 – – – – (342.32) – – – 231.16 – – – – – – –
Transferred to initial carrying amount of hedged
items (net of tax) – – – – – – – – – – – – – 3.73 – 3.73 – 3.73
Transfer from Equity Instruments through Other
Comprehensive Income reserve on renunciation of
rights entitlements (net of tax) – – – – – – – – – – 4.82 – (4.82) – – – – –
Balance as at 31st March, 2021 5.46 9582.81 72.67 153.49 94.26 0.23 1706.52 0.22 363.05 17672.57 29229.31 – 256.06 4.93 (25.12) 59116.46 346.81 59463.27

The Board of Directors of the Company has recommended Final Dividend of ` 6.25 per Ordinary Share for the financial year ended 31st March, 2022 (for the year ended 31st March, 2021- ` 5.75 per Ordinary Share) to be paid on fully paid Equity Shares amounting to ` 7702.03 Crores. The Final Dividend
is subject to the approval of shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Including the Interim Dividend of ` 5.25 per Ordinary Share (for the year ended 31st March, 2021 - ` 5.00 per Ordinary Share) declared by the Board of Directors,
the total Equity Dividend for the year ended 31st March, 2022 is ` 11.50 per Ordinary Share (total Equity Dividend for the year ended 31st March, 2021 - ` 10.75 per Ordinary Share).
Capital Reserve and Capital Reserve on Consolidation: This Reserve represents the difference between value of the net assets transferred to General Reserve: This Reserve is created by an appropriation from one component of equity (generally retained earnings) to another, not being
the Group in the course of business combinations and the consideration paid for such combinations. an item of Other Comprehensive Income. The same can be utilized in accordance with the provisions of the Companies Act, 2013.
Securities Premium: This Reserve represents the premium on issue of shares and can be utilised in accordance with the provisions of the Retained Earnings: This Reserve represents the cumulative profits of the Group and effects of remeasurement of defined benefit obligations.
Companies Act, 2013. This Reserve can be utilized in accordance with the provisions of the Companies Act, 2013.
Special Reserve under Section 45-IC of the RBI Act, 1934: This Reserve represents profits transferred before declaration of dividend by Debt Instruments through Other Comprehensive Income: This Reserve represents the cumulative gains (net of losses) arising on revaluation
companies of the Group which are registered as NBFCs with the Reserve Bank of India (RBI). of Debt Instruments measured at Fair Value through Other Comprehensive Income, net of amounts reclassified, if any, to profit or loss when those
Employees Housing Reserve under Nepal labour laws: This Reserve represents the amounts set aside for providing employees’ housing as instruments are disposed of.
per the provisions of the Nepal Labour Act, 2048. The said Act has since been repealed with effect from 4th September, 2017, consequent to the Equity Instruments through Other Comprehensive Income: This Reserve represents the cumulative gains (net of losses) arising on revaluation
of Equity Instruments measured at Fair Value through Other Comprehensive Income, net of amounts reclassified, if any, to Retained Earnings

ITC Limited
introduction of the new Labour Act, 2074, which does not require creation of similar Reserve.
when those instruments are disposed of.
Subsidy Reserve: This Reserve represents subsidies received from government authorities for capital investment and amounts taken over by
Effective portion of Cash Flow Hedges: This Reserve represents the cumulative effective portion of changes in Fair Value of derivatives that are
the Group consequent to business combinations.
designated as Cash Flow Hedges. It will be reclassified to profit or loss or included in the carrying amount of the non-financial asset in accordance
Share Options Outstanding Account: This Reserve relates to stock options granted by the Company to employees under ITC Employee Stock with the Group’s accounting policy.
Option Schemes. This Reserve is transferred to Securities Premium or Retained Earnings on exercise or lapse of vested options.
Exchange differences on translating the financial statements of foreign operations: This Reserve contains (a) accumulated balance of
Capital Redemption Reserve: This Reserve has been transferred to the Group in the course of business combinations and can be utilized in foreign exchange differences from translation of the financial statements of the Group’s foreign operations arising at the time of consolidation
accordance with the provisions of the Companies Act, 2013. of such entities and (b) accumulated foreign exchange differences arising on monetary items that, in substance, form part of the Group’s net
Contingency Reserve: This Reserve has been created out of Retained Earnings, as a matter of prudence, to take care of any unforseen adverse investment in a foreign operation. Such foreign exchange differences are recognised in Other Comprehensive Income. Exchange differences
developments in pending legal disputes. previously accumulated in this Reserve are reclassified to profit or loss on disposal of the foreign operation.

The accompanying notes 1 to 31 are an integral part of the Financial Statements.

In terms of our report attached On behalf of the Board
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants
Firm Registration Number: 324982E / E300003 R. TANDON Director

REPORT AND ACCOUNTS 2022

Sudhir Soni S. DUTTA Chief Financial Officer
Partner R. K. SINGHI Company Secretary

237
Mumbai, May 18, 2022 Kolkata, May 18, 2022
Consolidated Cash Flow Statement for the year ended 31st March, 2022
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
A. Cash Flow from Operating Activities
PROFIT BEFORE TAX 20740.47 17938.17
ADJUSTMENTS FOR:
Depreciation and amortization expense 1732.41 1645.59
Share based payments to employees 33.17 26.27
Finance costs 39.36 44.58
Interest Income (1082.63) (1297.91)
Dividend Income (0.01) (0.07)
(Gain) / Loss on sale of property, plant and equipment,
lease termination - Net (56.22) 54.61
Doubtful and bad debts 14.98 29.93
Doubtful and bad advances, loans and deposits 0.93 33.42
Share of (profit) / loss of associates and joint ventures (17.48) 6.92
Net (gain) / loss arising on financial instruments mandatorily
measured at fair value through profit or loss (538.99) (1144.02)
Foreign currency translations and transactions - Net (8.98) (6.42)
Impairment of investment in joint venture – 116.54 (4.67) (611.77)
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 20857.01 17326.40
ADJUSTMENTS FOR:
Trade receivables, advances and other assets (732.29) (65.58)
Inventories and biological assets other than bearer plants (466.37) (1459.78)
Trade payables, other liabilities and provisions 1099.11 (99.55) 1112.46 (412.90)
CASH GENERATED FROM OPERATIONS 20757.46 16913.50
Income tax paid (4981.95) (4386.53)
NET CASH FROM OPERATING ACTIVITIES 15775.51 12526.97

B. Cash Flow from Investing Activities

Purchase of property, plant and equipment, Intangibles, ROU asset, etc. (2141.64) (1836.64)
Sale of property, plant and equipment 133.10 2.53
Purchase of current investments (64874.32) (55913.52)
Sale / redemption of current investments 68260.67 61084.47
Investment in associate (1.87) (1.87)
Purchase of non-current investments (4902.02) (1639.74)
Redemption proceeds of non-current investments 2731.24 1712.05
Payment towards business combination / contingent purchase
consideration (71.25) (2189.22)
Dividend from associate and joint venture 16.06 7.18
Dividend from others 0.01 0.07
Interest received 1034.55 1274.92
Investment in bank deposits (original maturity more than 3 months) (4531.12) (4691.92)
Redemption / maturity of bank deposits (original maturity more than
3 months) 4546.49 6977.33
Investment in deposit with housing finance company (3011.37) (78.38)
Redemption / maturity of deposit with housing finance companies 578.82 971.43
Loans given (13.16) (2.44)
Loans realised 7.32 6.66
NET CASH FROM / (USED IN) INVESTING ACTIVITIES (2238.49) 5682.91

238 ITC Limited REPORT AND ACCOUNTS 2022

Consolidated Cash Flow Statement for the year ended 31st March, 2022
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
C. Cash Flow from Financing Activities
Proceeds from issue of share capital 291.82 290.65
Repayment of non-current borrowings (0.35) (2.28)
Payment towards reduction of capital by a subsidiary (0.34) –
Payment of lease liabilities (59.02) (54.73)
Interest paid (39.55) (41.23)
Net increase in statutory restricted accounts balances 15.26 41.17
Dividend paid (13788.32) (18881.39)
Dividend distribution tax refund received – 13.98
NET CASH USED IN FINANCING ACTIVITIES (13580.50) (18633.83)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (43.48) (423.95)
OPENING CASH AND CASH EQUIVALENTS 310.16 677.04
CASH AND CASH EQUIVALENTS ACQUIRED ON BUSINESS
COMBINATION [See Note 3 below] – 57.07
CLOSING CASH AND CASH EQUIVALENTS 266.68 310.16

Notes:
1. The above Cash Flow Statement has been prepared under the
“Indirect Method” as set out in Ind AS - 7 “Statement of Cash Flows”.
2. CASH AND CASH EQUIVALENTS:
Cash and cash equivalents as above 266.68 310.16
Unrealised gain / (loss) on foreign currency cash and cash equivalents 4.69 (23.62)
Cash credit facilities (Note 20) – 3.88
Cash and cash equivalents (Note 13) 271.37 290.42
3. Cash and Cash Equivalents include ` Nil (2021 - ` 57.07 Crores) on
acquisition of erstwhile Sunrise Foods Private Limited and its two
wholly owned subsidiaries.
 et Cash Flow from Operating Activities includes an amount
4. N
of ` 349.30 Crores (2021- ` 372.52 Crores) spent towards
Corporate Social Responsibility.

The accompanying notes 1 to 31 are an integral part of the Financial Statements.

In terms of our report attached On behalf of the Board
For S R B C & CO LLP S. PURI  Chairman & Managing Director
Chartered Accountants
R. TANDON Director
Firm Registration Number: 324982E / E300003
S. DUTTA Chief Financial Officer
Sudhir Soni
Partner R. K. SINGHI Company Secretary
Mumbai, May 18, 2022 Kolkata, May 18, 2022

ITC Limited REPORT AND ACCOUNTS 2022 239

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies

Statement of Compliance together with the share of the total comprehensive income
These financial statements have been prepared in of joint ventures and associates.
accordance with Indian Accounting Standards (Ind AS) Subsidiaries are entities controlled by the Group. Associates
notified under Section 133 of the Companies Act, 2013. are entities over which the Group exercise significant
The financial statements have also been prepared in influence but does not control. An entity / arrangement in
accordance with the relevant presentation requirements of which the Group has the ability to exercise control jointly
the Companies Act, 2013. The Group adopted Ind AS from with one or more uncontrolled entities may be a joint venture
1st April, 2016. (“JV”) or a joint operation (“JO”). Unlike in a JV where parties
have proportionate interests in the assets and liabilities of
Basis of Preparation
the JV entity, parties have rights to and obligations towards
The financial statements are prepared in accordance with specified assets and liabilities in a JO.
the historical cost convention, except for certain items that
are measured at fair values, as explained in the accounting Control, significant influence and joint control is assessed
policies. annually with reference to the voting power (usually arising
from equity shareholdings and potential voting rights) and
Fair Value is the price that would be received to sell an
other rights (usually contractual) enjoyed by the Group in
asset or paid to transfer a liability in an orderly transaction
its capacity as an investor that provides it the power and
between market participants at the measurement date,
consequential ability to direct the investee’s activities and
regardless of whether that price is directly observable or
significantly affect the Group’s returns from its investment.
estimated using another valuation technique. In estimating
Such assessment requires the exercise of judgement and
the fair value of an asset or a liability, the Group takes into
is disclosed by way of a note to the Financial Statements.
account the characteristics of the asset or liability if market
The Group is considered not to be in control of entities
participants would take those characteristics into account
where it is unclear as to whether it enjoys such power over
when pricing the asset or liability at the measurement date.
the investee.
Fair value for measurement and / or disclosure purposes in
these consolidated financial statements is determined on The assets, liabilities, income and expenses of subsidiaries
such a basis, except for share-based payment transactions are aggregated and consolidated, line by line, from the date
that are within the scope of Ind AS 102 – Share-based control is acquired by any Group entity to the date it ceases.
Payment, leasing transactions that are within the scope of Profit or loss and each component of other comprehensive
Ind AS 116 – Leases, and measurements that have some income are attributed to the Group as owners and to the
similarities to fair value but are not fair value, such as net non-controlling interests. The Group presents the non-
realisable value in Ind AS 2 – Inventories or value in use in controlling interests in the Balance Sheet within equity,
Ind AS 36 – Impairment of Assets. separately from the equity of the Group as owners. The
excess of the Group’s investment in a subsidiary over
The preparation of financial statements in conformity its share in the net worth of such subsidiary on the date
with Ind AS requires management to make judgements, control is acquired is treated as goodwill while a deficit is
estimates and assumptions that affect the application of the considered as a capital reserve in the CFS. In case of JO,
accounting policies and the reported amounts of assets and Group’s share of assets, liabilities, income and expenses
liabilities, the disclosure of contingent assets and liabilities are consolidated. On disposal of the subsidiary, attributable
at the date of the financial statements, and the reported amount on goodwill is included in the determination of the
amounts of revenues and expenses during the year. Actual profit or loss and recognised in the Statement of Profit and
results could differ from those estimates. The estimates
Loss. Impairment loss, if any, to the extent the carrying
and underlying assumptions are reviewed on an ongoing
amount exceeds the recoverable amount is charged off
basis. Revisions to accounting estimates are recognised
to the Statement of Profit and Loss as it arises and is not
in the period in which the estimate is revised if the revision
reversed. For impairment testing, goodwill is allocated to
affects only that period; they are recognised in the period
Cash Generating Unit (CGU) or a group of CGUs to which it
of the revision and future periods if the revision affects both
relates, which is not larger than an operating segment, and
current and future periods.
is monitored for internal management purposes.
Basis of Consolidation An investment in an associate or a JV is initially recognised
The Consolidated Financial Statements (CFS) include the at cost on the date of the investment, and inclusive of
financial statements of the Company and its subsidiaries any goodwill / capital reserve embedded in the cost, in the

240 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies (Contd.)

Balance Sheet. The proportionate share of the Group in The estimated useful lives of property, plant and equipment
the net profits / losses as also in the other comprehensive of the Group are as follows:
income is recognised in the Statement of Profit and Loss
Buildings 30-60 Years
and the carrying value of the investment is adjusted by a
like amount (referred as ‘equity method’). Leasehold Improvement Shorter of lease period or
estimated useful lives
All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members Plant and Equipment 7-25 Years
of the Group are eliminated in full on consolidation. Furniture and Fixtures 8-10 Years
Operating Cycle Vehicles 8-10 Years
All assets and liabilities have been classified as current or Office Equipment 5 Years
non-current as per the Group’s normal operating cycle and
other criteria set out in the Schedule III to the Companies Assets held under finance leases are depreciated over their
Act, 2013 and Ind AS 1 – Presentation of Financial expected useful lives on the same basis as owned assets
Statements based on the nature of products and the time or, where shorter, the term of the relevant lease.
between the acquisition of assets for processing and their Property, plant and equipment’s residual values and useful
realisation in cash and cash equivalents. lives are reviewed at each Balance Sheet date and changes,
if any, are treated as changes in accounting estimate.
Property, Plant and Equipment – Tangible Assets
Goodwill on Consolidation
Property, plant and equipment are stated at cost of
acquisition or construction less accumulated depreciation Goodwill arising on consolidation is stated at cost less
and impairment, if any. For this purpose, cost includes impairment losses, where applicable. On disposal of a
deemed cost which represents the carrying value of subsidiary, attributable amount of goodwill is included in
property, plant and equipment recognised as at 1st April, the determination of the profit or loss recognised in the
2015 measured as per the previous Generally Accepted Statement of Profit and Loss. On acquisition of an associate
Accounting Principles (GAAP). or joint venture, the goodwill / capital reserve arising from
such acquisition is included in the carrying amount of the
Cost is inclusive of inward freight, duties and taxes and investment and also disclosed separately.
incidental expenses related to acquisition. In respect
Impairment loss, if any, to the extent the carrying amount
of major projects involving construction, related
exceed the recoverable amount is charged off to the
pre-operational expenses form part of the value of assets
Statement of Profit and Loss as it arises and is not
capitalised. Expenses capitalised also include applicable
reversed. For impairment testing, goodwill is allocated to
borrowing costs for qualifying assets, if any. All upgradation / 
Cash Generating Unit (CGU) or group of CGUs to which it
enhancements are charged off as revenue expenditure
relates, which is not larger than an operating segment, and
unless they bring similar significant additional benefits.
is monitored for internal management purposes.
An item of property, plant and equipment is derecognised
Intangible Assets
upon disposal or when no future economic benefits are
expected to arise from the continued use of asset. Any Intangible Assets that the Group controls and from which
gain or loss arising on the disposal or retirement of an it expects future economic benefits, are capitalised upon
item of property, plant and equipment is determined as the acquisition and measured initially:
difference between the sales proceeds and the carrying a. for assets acquired in a business combination, at fair
amount of the asset and is recognised in the Statement of value on the date of acquisition;
Profit and Loss. b. for separately acquired assets, at cost comprising
Depreciation of these assets commences when the assets the purchase price (including import duties and
are ready for their intended use which is generally on non-refundable taxes) and directly attributable costs to
commissioning. Items of property, plant and equipment prepare the asset for its intended use.
are depreciated in a manner that amortizes the cost Internally generated assets for which the cost is clearly
(or other amount substituted for cost) of the assets after identifiable are capitalised at cost. Research expenditure is
commissioning, less its residual value, over their useful recognised as an expense when it is incurred. Development
lives as specified in Schedule II of the Companies Act, 2013 costs are capitalised only after the technical and commercial
on a straight line basis. Land is not depreciated. feasibility of the asset for sale or use has been established.

ITC Limited REPORT AND ACCOUNTS 2022 241

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies (Contd.)

Thereafter, all directly attributable expenditure incurred to Such reversals are recognised as an increase in carrying
prepare the asset for its intended use are recognised as the amounts of assets to the extent that it does not exceed the
cost of such assets. Internally generated brands, websites carrying amounts that would have been determined (net of
and customer lists are not recognised as intangible assets. amortization or depreciation) had no impairment loss been
The carrying value of intangible assets includes deemed recognised in previous years.
cost which represents the carrying value of intangible Investment Property
assets recognised as at 1st April, 2015 measured as per
Properties that are held for long-term rental yields and / or
the previous GAAP.
for capital appreciation are classified as investment
The useful life of an intangible asset is considered finite properties. Investment properties are stated at cost of
where the rights to such assets are limited to a specified acquisition or construction less accumulated depreciation
period of time by contract or law (e.g. patents, licences, and impairment, if any. Depreciation is recognised using
trademarks, franchise and servicing rights) or the likelihood the straight line method so as to amortize the cost of
of technical, technological obsolescence (e.g. computer investment properties over their useful lives as specified in
software, design, prototypes) or commercial obsolescence Schedule II of the Companies Act, 2013. Freehold land and
(e.g. lesser known brands are those to which adequate properties under construction are not depreciated.
marketing support may not be provided). If, there are no
Transfers to, or from, investment properties are made at
such limitations, the useful life is taken to be indefinite.
the carrying amount when and only when there is a change
Intangible assets that have finite lives are amortized over in use.
their estimated useful lives by the straight line method
An item of investment property is derecognised upon
unless it is practical to reliably determine the pattern of
disposal or when no future economic benefits are expected
benefits arising from the asset. An intangible asset with an
to arise from the continued use of asset. Any gain or loss
indefinite useful life is not amortized.
arising on the disposal or retirement of an item of investment
All intangible assets are tested for impairment. Amortization property is determined as the difference between the sales
expenses and impairment losses and reversal of impairment proceeds and the carrying amount of the property and is
losses are taken to the Statement of Profit and Loss. Thus, recognised in the Statement of Profit and Loss.
after initial recognition, an intangible asset is carried at its
Income received from investment property is recognised
cost less accumulated amortization and / or impairment
in the Statement of Profit and Loss on a straight line basis
losses.
over the term of the lease.
The useful lives of intangible assets are reviewed annually to
determine if a reset of such useful life is required for assets Inventories
with finite lives and to confirm that business circumstances Inventories are stated at lower of cost and net realisable
continue to support an indefinite useful life assessment for value. The cost is calculated on weighted average method.
assets so classified. Based on such review, the useful life Cost comprises expenditure incurred in the normal course
may change or the useful life assessment may change from of business in bringing such inventories to their present
indefinite to finite. The impact of such changes is accounted location and condition and includes, where applicable,
for as a change in accounting estimate. appropriate overheads based on normal level of activity.
Impairment of Assets Net realisable value is the estimated selling price less
estimated costs for completion and sale.
Impairment loss, if any, is provided to the extent, the
carrying amount of assets or cash generating units exceed Obsolete, slow moving and defective inventories are
their recoverable amount. identified from time to time and, where necessary, a
provision is made for such inventories.
Recoverable amount is higher of an asset’s net selling
price and its value in use. Value in use is the present value Foreign Currency Transactions
of estimated future cash flows expected to arise from the The presentation currency of the Group is Indian Rupee.
continuing use of an asset or cash generating unit and from Transactions in foreign currency are accounted for at
its disposal at the end of its useful life. the exchange rate prevailing on the transaction date.
Impairment losses recognised in prior years are Gains / losses arising on settlement as also on translation
reversed when there is an indication that the impairment of monetary items are recognised in the Statement of Profit
losses recognised no longer exist or have decreased. and Loss.

242 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies (Contd.)

Exchange differences arising on monetary items that, or liability that are attributable to the hedged risk.
in substance, form part of the Group’s net investment in The change in the fair value of the designated portion
a foreign operation (having a functional currency other of hedging instrument and the change in fair value of
than Indian Rupee) are accumulated in foreign currency the hedged item attributable to the hedged risk are
translation reserve. recognised in the Statement of Profit and Loss in the
For the preparation of the consolidated financial statements: line item relating to the hedged item.
(a) assets and liabilities of foreign operations, together Hedge accounting is discontinued when the hedging
with goodwill and fair value adjustments assumed on instrument expires or is sold, terminated, or exercised,
acquisition thereof, are translated to Indian Rupees at or when it no longer qualifies for hedge accounting.
exchange rates prevailing at the reporting period end; The fair value adjustment to the carrying amount of the
hedged item arising from the hedged risk is amortised to
(b) income and expense items are translated at the
profit or loss from that date.
average exchange rates prevailing during the period;
when exchange rates fluctuate significantly the rates (ii) Cash flow hedges
prevailing on the transaction date are used instead. The effective portion of changes in the fair value
Differences arising on such translation are accumulated of derivatives that are designated and qualify as
in foreign currency translation reserve and attributed to cash flow hedges is recognised in the other
non-controlling interests proportionately. comprehensive income and accumulated as ‘Cash Flow
Hedging Reserve’. The gains / losses relating to the
On the disposal of a foreign operation, all of the exchange
ineffective portion are recognised in the Statement of
differences accumulated in equity in respect of that operation
Profit and Loss.
attributable to the owners of the Group is reclassified to the
Statement of Profit and Loss. In relation to a partial disposal, Amounts previously recognised and accumulated in
that does not result in losing control over the subsidiary, the other comprehensive income are reclassified to profit
proportionate exchange differences accumulated in equity or loss when the hedged item affects the Statement
is reclassified to the Statement of Profit and Loss. of Profit and Loss. However, when the hedged item
results in the recognition of a non-financial asset, such
Derivatives and Hedge Accounting gains / losses are transferred from equity (but not as
Derivatives are initially recognised at fair value and are reclassification adjustment) and included in the initial
subsequently remeasured to their fair value at the end measurement cost of the non-financial asset.
of each reporting period. The resulting gains / losses are Hedge accounting is discontinued when the hedging
recognised in the Statement of Profit and Loss immediately instrument expires or is sold, terminated, or exercised,
unless the derivative is designated and effective as a or when it no longer qualifies for hedge accounting.
hedging instrument, in which event the timing of recognition Any gains / losses recognised in other comprehensive
in profit or loss / inclusion in the initial cost of non-financial income and accumulated in equity at that time remain
asset depends on the nature of the hedging relationship in equity and is reclassified when the underlying
and the nature of the hedged item. transaction is ultimately recognised. When an
The Group complies with the principles of hedge accounting underlying transaction is no longer expected to occur,
where derivative contracts are designated as hedge the gains / losses accumulated in equity are recognised
instruments. At the inception of the hedge relationship, immediately in the Statement of Profit and Loss.
the Group documents the relationship between the hedge
Investment in Associate and Joint Venture
instrument and the hedged item, along with the risk
management objectives and its strategy for undertaking Investment in associate and joint venture is accounted for
hedge transaction, which can be a fair value hedge or a using the ‘equity method’ less accumulated impairment,
cash flow hedge. if any.
(i) Fair value hedges Financial Instrument, Financial Assets, Financial
Changes in fair value of the designated portion of Liabilities and Equity Instruments
derivatives that qualify as fair value hedges are Financial assets and financial liabilities are recognised when
recognised in profit or loss immediately, together with the Group becomes a party to the contractual provisions
any changes in the fair value of the hedged asset of the relevant instrument and are initially measured

ITC Limited REPORT AND ACCOUNTS 2022 243

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies (Contd.)

at fair value. Transaction costs that are directly attributable investments in equity instruments that would otherwise
to the acquisition or issue of financial assets and financial be measured at fair value through profit or loss, an
liabilities (other than financial assets and financial liabilities irrevocable election at initial recognition may be made to
measured at fair value through profit or loss) are added present subsequent changes in fair value through other
to or deducted from the fair value on initial recognition of comprehensive income.
financial assets or financial liabilities. Purchase or sale of Impairment: The Group assesses at each reporting date
financial assets that require delivery of assets within a time whether a financial asset (or a group of financial assets)
frame established by regulation or convention in the market such as Investments, Trade receivables, Advances and
place (regular way trades) are recognised on the trade Security deposits held at amortised cost and financial
date, i.e., the date when the Group commits to purchase or assets that are measured at fair value through other
sell the asset. comprehensive income are tested for impairment based
Financial Assets on evidence or information that is available without undue
cost or effort. Expected credit losses are assessed and loss
Recognition: Financial assets include Investments,
allowances recognised if the credit quality of the financial
Trade receivables, Advances, Security deposits, Cash
asset has deteriorated significantly since initial recognition.
and cash equivalents. Such assets are initially recognised
at transaction price when the Group becomes party to Reclassification: When and only when the business
contractual obligations. The transaction price includes model is changed, the Group shall reclassify all affected
transaction costs unless the asset is being fair valued financial assets prospectively from the reclassification date
through the Statement of Profit and Loss. as subsequently measured at amortised cost, fair value
through other comprehensive income or fair value through
Classification: Management determines the classification
profit or loss without restating the previously recognised
of an asset at initial recognition depending on the purpose
gains, losses or interest and in terms of the reclassification
for which the assets were acquired. The subsequent
principles laid down in the Ind AS relating to Financial
measurement of financial assets depends on such
Instruments.
classification.
Derecognition: Financial assets are derecognised when
Financial assets are classified as those measured at:
the right to receive cash flows from the assets has expired,
(a) amortised cost, where the financial assets are held or has been transferred, and the Group has transferred
solely for collection of cash flows arising from payments substantially all of the risks and rewards of ownership.
of principal and / or interest. Concomitantly, if the asset is one that is measured at:
(b) fair value through other comprehensive income (a) amortised cost, the gain or loss is recognised in the
(FVTOCI), where the financial assets are held not only Statement of Profit and Loss;
for collection of cash flows arising from payments of
(b) fair value through other comprehensive income, the
principal and interest but also from the sale of such
cumulative fair value adjustments previously taken to
assets. Such assets are subsequently measured at fair
reserves are reclassified to the Statement of Profit and
value, with unrealised gains and losses arising from
Loss unless the asset represents an equity investment,
changes in the fair value being recognised in other
in which case the cumulative fair value adjustments
comprehensive income.
previously taken to reserves are reclassified
(c) fair value through profit or loss (FVTPL), where the within equity.
assets are managed in accordance with an approved
Income Recognition: Interest income is recognised in the
investment strategy that triggers purchase and sale
Statement of Profit and Loss using the effective interest
decisions based on the fair value of such assets. Such
method. Dividend income is recognised in the Statement
assets are subsequently measured at fair value, with
of Profit and Loss when the right to receive dividend is
unrealised gains and losses arising from changes in the
established.
fair value being recognised in the Statement of Profit
and Loss in the period in which they arise. Financial Liabilities
Trade receivables, Advances, Security deposits, Cash Borrowings, trade payables and other financial liabilities are
and cash equivalents etc. are classified for measurement initially recognised at the value of the respective contractual
at amortised cost while investments may fall under any of obligations. They are subsequently measured at amortised
the aforesaid classes. However, in respect of particular cost. Any discount or premium on redemption / settlement is

244 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies (Contd.)

recognised in the Statement of Profit and Loss as finance (b) related to incurring specific expenditures are taken to
cost over the life of the liability using the effective interest the Statement of Profit and Loss on the same basis and
method and adjusted to the liability figure disclosed in the in the same periods as the expenditures incurred.
Balance Sheet. (c) by way of financial assistance on the basis of certain
Financial liabilities are derecognised when the liability is qualifying criteria are recognised as they become
extinguished, that is, when the contractual obligation receivable.
is discharged, cancelled or on expiry. In the unlikely event that a grant previously recognised is
ultimately not received, it is treated as a change in estimate
Offsetting Financial Instruments
and the amount cumulatively recognised is expensed in the
Financial assets and liabilities are offset and the net amount Statement of Profit and Loss.
is included in the Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and Dividend Distribution
there is an intention to settle on a net basis or realise the Dividends paid (including income tax thereon) are
asset and settle the liability simultaneously. recognised in the period in which the interim dividends are
approved by the Board of Directors, or in respect of the final
Equity Instruments dividend when approved by shareholders.
Equity instruments are recognised at the value of the
Employee Benefits
proceeds, net of direct costs of the capital issue.
The Group makes contributions to both defined benefit
Revenue and defined contribution schemes which are mainly
Revenue is measured at the fair value of the consideration administered through duly constituted and approved Trusts.
received or receivable for goods supplied and services Provident Fund contributions are in the nature of defined
rendered, net of returns and discounts to customers. contribution scheme. In respect of employees who are
Revenue from the sale of goods is shown to include excise members of constituted and approved trusts, the Group
duties and National Calamity Contingent Duty which are recognises contribution payable to such trusts as an
payable on manufacture of goods but excludes taxes such expense including any shortfall in interest between the
as VAT and Goods and Services Tax which are payable in amount of interest realised by the investment and the
respect of sale of goods and services. interest payable to members at the rate declared by the
Revenue from the sale of goods and services is recognised Government of India. In respect of other employees,
when the Group performs its obligations to its customers provident funds are deposited with the Government and
and the amount of revenue can be measured reliably recognised as expense.
and recovery of the consideration is probable. The timing The Group makes contribution to defined contribution
of such recognition in case of sale of goods is when the pension plan. The contribution payable is recognised as an
control over the same is transferred to the customer, which expense, when an employee renders the related service.
is mainly upon delivery and in case of services, in the period The Group also makes contribution to defined benefit
in which such services are rendered. pension and gratuity plan. The cost of providing benefits
under the defined benefit obligation is calculated by
Government Grant
independent actuary using the projected unit credit method.
Group entities may receive government grants that Service costs and net interest expense or income is
require compliance with certain conditions related to the reflected in the Statement of Profit and Loss. Gain or Loss
entity’s operating activities or are provided to the entity on account of remeasurements are recognised immediately
by way of financial assistance on the basis of certain through other comprehensive income in the period in which
qualifying criteria. they occur.
Government grants are recognised when there is The employees of the Group are entitled to compensated
reasonable assurance that the grant will be received upon leave for which the Group records the liability based on
the Group entity complying with the conditions attached to actuarial valuation computed using projected unit credit
the grant. Accordingly, government grants: method. These benefits are unfunded.
(a) related to or used for assets, are deducted from the Actual disbursements made under the Workers’ Voluntary
carrying amount of the asset. Retirement Scheme are accounted as revenue expenses.

ITC Limited REPORT AND ACCOUNTS 2022 245

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies (Contd.)

Employee Share Based Compensation Leases

Stock Options The Group assesses at contract inception whether a
contract is, or contains, a lease. A contract is, or contains,
Stock Options are granted to eligible employees under
a lease if it conveys the right to control the use of an identified
the ITC Employee Stock Option Schemes (“ITC ESOS”),
asset for a period of time in exchange for consideration.
as may be decided by the Nomination & Compensation
Committee / Board. Eligible employees for this purpose Group as a Lessee
include employees of the Group entities, their Directors and Right-of-Use (ROU) assets are recognised at inception of
those on deputation to joint ventures and associates. a contract or arrangement for significant lease components
Under Ind AS, the cost of ITC Stock Options (Stock Options) at cost less lease incentives, if any. ROU assets are
is recognised based on the fair value of Stock Options as subsequently measured at cost less accumulated
on the grant date. depreciation and impairment losses, if any. The cost of ROU
assets includes the amount of lease liabilities recognised,
While the fair values of Stock Options granted is recognised
initial direct cost incurred and lease payments made at
in the Statement of Profit and Loss for employees of the
or before the lease commencement date. ROU assets
Group (other than those out on deputation), the value of Stock
are generally depreciated over the shorter of the lease
Options, net of reimbursements, granted to employees on
term and estimated useful lives of the underlying assets
deputation is considered as capital contribution / investment.
on a straight line basis. Lease term is determined based
The Group generally seeks reimbursement of the value on consideration of facts and circumstances that create
of Stock Options from such companies, as applicable. It an economic incentive to exercise an extension option,
may, if so recommended by the Corporate Management or not to exercise a termination option. Lease payments
Committee and approved by the Audit Committee, decide associated with short-term leases and low value leases are
not to seek such reimbursements in respect of value charged to the Statement of Profit and Loss on a straight
of Stock Options from such companies, who need to line basis over the term of the relevant lease.
conserve financial capacity to sustain their business and
The Group recognises lease liabilities measured at the
growth plans and where the quantum of reimbursement is
present value of lease payments to be made on the date
not material - the materiality threshold being ` 5 Crores for
of recognition of the lease. Such lease liabilities do not
each entity for a financial year.
include variable lease payments (that do not depend on an
Cash Settled Stock Appreciation Linked Reward index or a rate), which are recognised as expense in the
(SAR) Plan periods in which they are incurred. Interest on lease liability
Cash Settled SAR units are granted to eligible employees is recognised using the effective interest method. Lease
under the ITC Employee Cash Settled Stock Appreciation liabilities are subsequently increased to reflect the accretion
Linked Reward Plan (“ITC ESARP”). The eligible employees of interest and reduced for the lease payments made. The
for this purpose are such present and future permanent carrying amount of lease liabilities is also remeasured
employees of the Company, including a Director of the upon modification of lease arrangement or upon change
in the assessment of the lease term. The effect of such
Company, as may be decided by the CMC / Nomination &
remeasurements is adjusted to the value of the ROU assets.
Compensation Committee / Board.
For cash settled SAR units granted to eligible employees, a Group as a Lessor
liability is initially measured at fair value at the grant date and Leases in which the Group does not transfer substantially
is subsequently remeasured at each reporting period, until all the risks and rewards of ownership of an asset are
settled. The fair value of ESAR units granted is recognised classified as operating leases. Where the Group is a lessor
in the Statement of Profit and Loss for employees of the under an operating lease, the asset is capitalised within
Group. In case of employees on deputation to group property, plant and equipment or investment property
companies, the Company generally seeks reimbursements and depreciated over its useful economic life. Payments
from the concerned group company. The value of such received under operating leases are recognised in the
payments, net of reimbursements, is considered as capital Statement of Profit and Loss on a straight line basis over
contribution / investment. the term of the lease.

246 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

1. Significant Accounting Policies (Contd.)

Taxes on Income to settle the obligation; and the amount can be reliably
Taxes on income comprise current taxes and deferred estimated. The amount so recognised is a best estimate
taxes. Current tax in the Statement of Profit and Loss is of the consideration required to settle the obligation at the
provided as the amount of tax payable in respect of taxable reporting date, taking into account the risks and uncertainties
income for the period using tax rates and tax laws enacted surrounding the obligation.
during the period, together with any adjustment to tax In an event when the time value of money is material, the
payable in respect of previous years. provision is carried at the present value of the cash flows
Deferred tax is recognised on temporary differences estimated to settle the obligation.
between the carrying amounts of assets and liabilities and Operating Segments
the amounts used for taxation purposes (tax base), at the
Operating segments are reported in a manner consistent
tax rates and tax laws enacted or substantively enacted by
with the internal reporting provided to the chief operating
the end of the reporting period.
decision-maker (CODM). The CODM, who is responsible
Deferred tax assets are recognised for the future tax for allocating resources and assessing performance of the
consequences to the extent it is probable that future operating segments, has been identified as the Corporate
taxable profits will be available against which the deductible Management Committee.
temporary differences can be utilised.
Segments are organised based on businesses which
Income tax, insofar as it relates to items disclosed under have similar economic characteristics as well as exhibit
other comprehensive income or equity, is disclosed similarities in nature of products and services offered,
separately under other comprehensive income or equity, the nature of production processes, the type and class of
as applicable. customer and distribution methods.
Deferred tax assets and liabilities are offset when there is Segment revenue arising from third party customers is
legally enforceable right to offset current tax assets and reported on the same basis as revenue in the financial
liabilities and when the deferred tax balances relate to the
statements. Inter-segment revenue is reported on the basis
same taxation authority. Current tax assets and tax liabilities
of transactions which are primarily market led. Segment
are offset where the entity has a legally enforceable right to
results represent profits before finance charges, unallocated
offset and intends either to settle on net basis, or to realise
corporate expenses and taxes.
the asset and settle the liability simultaneously.
“Unallocated Corporate Expenses” include revenue and
Claims expenses that relate to initiatives / costs attributable to the
Claims against the Group not acknowledged as debts are enterprise as a whole.
disclosed after a careful evaluation of the facts and legal
Financial and Management Information Systems
aspects of the matter involved.
The Group’s Accounting System is designed to unify the
Provisions Financial and Cost Records and also to comply with the
Provisions are recognised when, as a result of a past relevant provisions of the Companies Act, 2013, to provide
event, the Group has a legal or constructive obligation; it financial and cost information appropriate to the businesses
is probable that an outflow of resources will be required and facilitate Internal Control.

ITC Limited REPORT AND ACCOUNTS 2022 247

Notes to the Consolidated Financial Statements

2. Use of estimates and judgements

The preparation of financial statements in conformity notes to the financial statements are the only entities
with generally accepted accounting principles requires over which the Group has significant influence, and
management to make estimates and assumptions that accordingly associates.
affect the reported amounts of assets and liabilities and
3. Joint Control:
disclosure of contingent liabilities at the date of the financial
statements and the results of operations during the (i) The Group holds 50% of the equity share capital
reporting period end. Although these estimates are based of Maharaja Heritage Resorts Limited, a company
upon management’s best knowledge of current events and involved in operation of hotel properties. The Group
actions, actual results could differ from these estimates. do not consider that it is able to exercise control
over the company as the decisions about relevant
The estimates and underlying assumptions are reviewed on activities of the company are made jointly between
an ongoing basis. Revisions to accounting estimates are the Group and the co-venturer (who holds 50% of
recognised in the period in which the estimate is revised the equity share capital) and both the parties have
if the revision affects only that period, or in the period of rights to the net assets of such arrangement.
the revision and future periods if the revision affects both
(ii) The Group holds 26% of the equity share capital of
current and future periods.
Espirit Hotels Private Limited, a company involved in
A. Judgements in applying accounting policies development of a luxury hotel complex. The Group
The following are the judgements, apart from those involving has considered that in view of the shareholder
estimations (see note B below), that the Group have made agreement, key decisions about relevant activities of
in the process of applying the accounting policies and that such company are made jointly between the Group
have a significant effect on the amounts recognised in the and the co-venturer (who holds 74% of the equity
consolidated financial statements: share capital) and both the parties have rights to the
net assets of such arrangement.
1. Control:
(iii) The Group holds 27.90% of the equity share capital
The Group assessed whether or not it has control on its of Logix Developers Private Limited, a company
investees based on whether, as an investor, it has the intended for the purpose of developing a luxury
power / rights and consequently the practical ability to hotel-cum-service apartment complex. The Group
direct the relevant activities of its investees unilaterally. has concluded that the key decisions about relevant
In making this judgement, the Group considered the activities of such company are made jointly between
absolute size of its holding, the relative size of and the Group and the co-venturer (who holds 72.10% of
dispersion of other shareholders, and whether any the equity share capital) and both the parties have
contractual arrangements exist between the Company rights to the net assets of such arrangement.
(and its subsidiaries) and other shareholders of the (iv) The Group holds 50% of the equity share capital
investees. Based on this, and in accordance with its of ITC Essentra Limited, a company involved in
Accounting Policy, the Group has determined that the manufacture and sale of filter rods. The Group has
entities listed in the notes to the financial statements are concluded that the key decisions about relevant
the only entities over which Group has control. activities of such company are made jointly between
The Company is a settlor for certain trusts, i.e., ITC the Group and the co-venturer (who holds 50% of
Sangeet Research Academy, ITC Education Trust the equity share capital) and both the parties have
and ITC Rural Development Trust. The Group while rights to the net assets of such arrangement.
considering the nature and insignificant variability of
4. Useful life of Intangible Assets:
its return has concluded that it does not ‘control’ these
trusts. The Group is required to determine whether its
intangible assets have indefinite or finite life which is a
2. Significant influence: subject matter of judgement. Certain trademarks have
The Group assessed whether or not it has significant been considered of having an indefinite useful life taking
influence on its investees based on its practical ability to into account that there are no technical, technological or
participate in the financial and operating policy decisions commercial risks of obsolescence or limitations under
of the investee, though it is not in control or in joint contract or law. Other trademarks have been amortized
control of these policies. Based on such assessment, over their useful economic life. Refer notes to the
the Group determined that the entities listed in the financial statements.

248 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

2. Use of estimates and judgements (Contd.)

B. Key sources of estimation uncertainty taking into account inflation, seniority, promotion and
The following are the key assumptions concerning the other relevant factors such as supply and demand
future, and other key sources of estimation uncertainty factors in the employment market. Information about
at the end of the reporting period that may have a such valuation is provided in notes to the financial
significant risk of causing a material adjustment to the statements.
carrying amounts of assets and liabilities within the next 4. Claims, Provisions and Contingent Liabilities:
financial year.
The Group has ongoing litigations with various regulatory
1. Useful lives of property, plant and equipment, authorities and third parties. Where an outflow of funds
investment property and intangible assets: is believed to be probable and a reliable estimate of
As described in the significant accounting policies, the the outcome of the dispute can be made based on
Group reviews the estimated useful lives of property, management’s assessment of specific circumstances of
plant and equipment, investment property and intangible each dispute and relevant external advice, management
assets at the end of each reporting period. provides for its best estimate of the liability. Such
accruals are by nature complex and can take number of
2. Fair value measurements and valuation processes: years to resolve and can involve estimation uncertainty.
Some of the Group’s assets and liabilities are measured Information about such litigations is provided in notes to
at fair value for financial reporting purposes. In the financial statements.
estimating the fair value of an asset or a liability, the
5. COVID-19:
Group uses market-observable data to the extent it is
available. Where Level 1 inputs are not available, the The Group has considered the possible effects that
Group engages third party valuers, where required, to may arise out of COVID-19 pandemic on the carrying
perform the valuation. Information about the valuation amounts of property, plant & equipment, intangible
techniques and inputs used in determining the fair value assets, investments, inventories, trade receivables, etc.
of various assets, liabilities and share based payments For this purpose, the Group has considered internal
are disclosed in the notes to the financial statements. and external sources of information up to the date of
approval of these financial statements, including credit
3. Actuarial Valuation: reports and related information, economic forecasts,
The determination of Group’s liability towards defined market value of certain investments etc. Based on
benefit obligation to employees is made through the current estimates, the Group does not expect
independent actuarial valuation including determination any significant impact on such carrying values. The
of amounts to be recognised in the Statement of Profit impact of COVID-19 pandemic on the Group’s financial
and Loss and in other comprehensive income. Such statements may differ from that estimated as at the date
valuation depends upon assumptions determined after of approval of these financial statements.

ITC Limited REPORT AND ACCOUNTS 2022 249

Notes to the Consolidated Financial Statements
(` in Crores)
Gross Block
Foreign Foreign
Acquired Currency Currency
As at through Withdrawals Translation As at Withdrawals Translation As at
31st March, business and Reserve 31st March, and Reserve 31st March,
Particulars 2020 Additions combinations adjustments adjustments 2021 Additions adjustments adjustments 2022
3A. Property, Plant and
Equipment *
Land1 2024.32 46.21 19.53 3.88 0.02 2086.20 56.23 35.28 0.01 2107.16
Buildings 7922.46 170.36 30.77 9.16 0.01 8114.44 764.41 57.29 0.01 8821.57
Leasehold Improvements 23.40 0.28 – 2.04 0.10 21.74 1.40 0.02 (0.01) 23.11
Plant and Equipment 14576.24 780.62 28.38 127.06 (0.08) 15258.10 1820.43 215.46 (0.04) 16863.03
Furniture and Fixtures 810.37 23.77 1.36 2.59 – 832.91 79.87 5.42 (0.02) 907.34
Vehicles 183.56 15.29 0.71 19.00 (0.15) 180.41 20.45 20.91 (0.57) 179.38
Office Equipment 39.70 2.68 0.87 2.58 0.04 40.71 4.05 1.06 – 43.70
Railway Sidings 1.73 – – – – 1.73 – – – 1.73
TOTAL 25581.78 1039.21 81.62 166.31 (0.06) 26536.24 2746.84 335.44 (0.62) 28947.02
3B. Capital work-in-progress 3251.61 1804.51 1.06 1004.18 (48.55) 4004.45 2128.20 2692.74 (241.46) 3198.45
5
3C. Investment Property  406.71 3.40 – – – 410.11 – – – 410.11
3D. Goodwill 2
Goodwill on Consolidation 202.53 – – – – 202.53 – – – 202.53
Goodwill acquired through
business combinations – – 577.20 – – 577.20 – – – 577.20
TOTAL 202.53 – 577.20 – – 779.73 – – – 779.73
3E. Other Intangible assets
(acquired) 2
Trademarks 447.48 0.05 1473.05 – 0.03 1920.61 – – – 1920.61
Computer Software 256.72 13.81 0.35 0.38 0.01 270.51 37.62 34.48 (0.01) 273.64
Know How, Business and
Commercial Rights 33.82 – – – – 33.82 9.53 – – 43.35
Customer Relationships – – 35.21 – – 35.21 – – – (` in Crores)
35.21
TOTAL 738.02 13.86 1508.61 0.38 0.04 2260.15 47.15 34.48 (0.01) 2272.81
3F. Other Intangible assets
under development 4.85 10.26 – 8.27 – 6.84 64.83 44.58 – 27.09
3G. Right of Use Assets ^
Land 772.24 54.96 4.27 – (28.42) 803.05 16.89 – (97.96) 721.98
Buildings 215.05 53.35 5.72 23.76 0.16 250.52 46.29 41.77 0.03 255.07
Plant and Equipment 48.63 – – – – 48.63 – – – 48.63
TOTAL 1035.92 108.31 9.99 23.76 (28.26) 1102.20 63.18 41.77 (97.93) 1025.68

^ Also refer Note 28(viii)

(` in Crores)
* The above includes following assets given on As at 31st March, 2021 Depreciation As at 31st March, 2022 Depreciation
operating lease: Charge Charge
Accumulated for the year Accumulated for the year
Particulars Gross Block Depreciation Net Block 2020-21 Gross Block Depreciation Net Block 2021-22

Buildings 1.03 0.09 0.94 0.06 1.12 0.20 0.92 0.11

Plant and Equipment 211.35 122.21 89.14 20.09 224.35 142.33 82.02 20.12
TOTAL 212.38 122.30 90.08 20.15 225.47 142.53 82.94 20.23

250 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
(` in Crores)
Depreciation and Amortization Net Book Value
Foreign Foreign
On Currency On Currency
Upto withdrawals Translation Upto withdrawals Translation Upto As at As at
31st March, and Reserve 31st March, and Reserve 31st March, 31st March, 31st March,
Particulars 2020 For the year adjustments adjustments 2021 For the year adjustments adjustments 2022 2022 2021
3A. Property, Plant and
Equipment *
Land1 – – – – – – – – – 2107.16 2086.20
Buildings 783.92 216.39 0.19 – 1000.12 229.48 15.20 0.01 1214.41 7607.16 7114.32
Leasehold Improvements 13.41 1.73 1.92 0.01 13.23 2.44 0.02 (0.01) 15.64 7.47 8.51
Plant and Equipment 4728.88 1197.46 76.17 (0.06) 5850.11 1271.48 213.25 (0.01) 6908.33 9954.70 9407.99
Furniture and Fixtures 330.84 84.30 2.54 (0.02) 412.58 75.07 4.10 0.02 483.57 423.77 420.33
Vehicles 67.51 21.86 11.05 (0.03) 78.29 20.93 13.09 (0.22) 85.91 93.47 102.12
Office Equipment 23.65 5.55 2.03 0.02 27.19 4.65 1.03 0.01 30.82 12.88 13.52
Railway Sidings 0.65 0.13 – – 0.78 0.13 – – 0.91 0.82 0.95
TOTAL 5948.86 1527.42 93.90 (0.08) 7382.30 1604.18 246.69 (0.20) 8739.59 20207.43 19153.94
3B. Capital work-in-progress – – – – – – – – – 3198.45 4004.45
5
3C. Investment Property  21.35 12.20 – – 33.55 12.36 – – 45.91 364.20 376.56
3D. Goodwill 2
Goodwill on Consolidation – – – – – – – – – 202.53 202.53
Goodwill acquired through
business combinations – – – – – – – – – 577.20 577.20
TOTAL – – – – – – – – – 779.73 779.73
3E. Other Intangible assets
(acquired) 2
Trademarks 14.25 3.16 – 0.02 17.43 3.16 – – 20.59 1900.02 1903.18
Computer Software 183.17 27.14 0.37 – 209.94 33.99 34.44 (0.01) 209.48 64.16 60.57
Know How, Business and
Commercial Rights 15.23 3.50 – – 18.73 3.52 – – 22.25 21.10 15.09
Customer Relationships – 2.99 – – 2.99 4.40 – – 7.39 27.82 32.22
TOTAL 212.65 36.79 0.37 0.02 249.09 45.07 34.44 (0.01) 259.71 2013.10 2011.06
3F. Other Intangible assets
under development – – – – – – – – – 27.09 6.84
3G. Right of Use Assets ^
Land 9.99 10.24 0.15 (0.46) 19.62 13.08 0.27 (2.67) 29.76 692.22 783.43
Buildings 53.24 57.36 16.31 0.05 94.34 55.55 37.67 0.01 112.23 142.84 156.18
Plant and Equipment 5.53 5.52 – – 11.05 5.51 – – 16.56 32.07 37.58
TOTAL 68.76 73.12 16.46 (0.41) 125.01 74.14 37.94 (2.66) 158.55 867.13 977.19

Notes:
1. Land includes certain lands at Munger with Gross Block - ` 1.16 Crores (2021 - ` 1.16 Crores) which stood vested with the State of Bihar under the Bihar Land Reforms Act, 1950 for which compensation has not yet been determined.
2. a) Goodwill arising on Business Combination is carried at cost and periodically tested for impairment in line with applicable Accounting Standards. The Company has also considered certain acquired Trademarks aggregating ` 1889.78 Crores
(2021 - ` 1889.78 Crores) as having indefinite useful lives. The indefinite useful life for such trademarks has been assessed considering no technical, technological or commercial risks of obsolescence or any limitations under contract or
law. Such assets are also annually tested for impairment. These assets pertain to the ‘FMCG - Others’ Segment and are related to the Branded Packaged Foods and Personal Care Products businesses of the Company. Impairment testing
for goodwill and intangible assets with indefinite useful lives has been carried out considering their recoverable amounts which, inter-alia, includes estimation of their value-in-use based on management projections. These projections have
been made for a period of five years, or longer, as applicable and consider various factors, such as market scenario, growth trends, growth and margin projections, and terminal growth rates specific to the business. For such projections,
discount rate of 10% (2021 - 10%) and long-term growth rates ranging between 5% to 6% (2021 - 5% to 6%) have been considered. Discount rate has been determined considering the Weighted Average Cost of Capital (WACC) of market
benchmarks. Based on the above assessment, no impairment has been recognised during the year.
2. b) Computer software and Customer Relationships are amortized over a period of 5 years and 8 years respectively. Other Intangibles with finite useful life are amortized over a period of 10 years unless shorter useful life is required based
on contractual or legal terms.
3. The amortization expense of intangible assets has been included under ‘Depreciation and amortization expense’ in the Statement of Profit and Loss.
4. The amount of expenditure recognised in the carrying amount of property, plant and equipment in the course of construction is ` 148.81 Crores (2021 - ` 26.67 Crores).
5. The fair value of the investment property is ` 870.11 Crores (2021 - ` 861.00 Crores). The fair value has been determined on the basis of valuation carried out at the reporting date by registered valuer as defined under rule 2 of Companies
(Registered Valuers and Valuation) Rules, 2017 and the same has been categorised as Level 2 based on the valuation techniques used and inputs applied. The main inputs considered by the valuer are government rates, property location,
market research & trends, contracted rentals, terminal yields, discount rates and comparable values, as appropriate.
Amounts recognised in the Statement of Profit and Loss in respect of the investment property is as under:
(` in Crores)
For the year ended For the year ended
Particulars 31st March, 2022 31st March, 2021
Rental Income etc. from investment property 111.94 110.05
Direct Operating Expenses arising from investment property that generated
rental income during the year $ 9.94 9.65
Direct Operating Expenses arising from investment property that did not
generate rental income during the year – –
$As per the contractual arrangements, the Company is responsible for the maintenance of common area  at its own cost. The expenses arising out of such arrangements are not material.

ITC Limited REPORT AND ACCOUNTS 2022 251

Notes to the Consolidated Financial Statements
Capital work-in-progress ageing schedule (` in Crores)
As at 31st March, 2021 As at 31st March, 2022
Particulars Less than 1-2 2-3 More than Less than 1-2 2-3 More than
1 year years years 3 years Total 1 year years years 3 years Total

Projects in Progress 1317.90 1072.87 615.30 998.38 4004.45 933.53 849.85 521.07 894.00 3198.45
Projects temporarily suspended – – – – – – – – – –
Total 1317.90 1072.87 615.30 998.38 4004.45 933.53 849.85 521.07 894.00 3198.45

Completion schedule for Projects in Capital work-in-progress, which are overdue or has exceeded its cost compared to its original plan
As at 31st March, 2021 As at 31st March, 2022
Particulars Less than More than Less than More than
1 year 1 - 2 years 2 - 3 years 3 years 1 year 1 - 2 years 2 - 3 years 3 years

MXD - COL – – 641.57 – – 639.44 – –

MXD - KOL – – 500.47 – – 542.00 – –
H - AHM – 372.08 – – 440.31 – – –
F - KHO – – 157.01 – – 164.42 – –
F - GNT – – – – 69.46 – – –
ME - MED – 61.22 – – 62.47 – – –
ME - PUN – 19.90 – – 20.01 – – –
F - MED 270.15 – – – – – – –
W - PUD 250.58 – – – – – – –
W - KPT 216.01 – – – – – – –
H - GNT 120.94 – – – – – – –
F - ABT 115.57 – – – – – – –
H - BSR 109.19 – – – – – – –
F - MYS 47.79 – – – – – – –
R - BCM 27.45 – – – – – – –
F - UBR 21.26 – – – – – – –
ME - BLR 16.41 – – – – – – –

Other Intangible assets under development ageing schedule (` in Crores)

As at 31st March, 2021 As at 31st March, 2022
Particulars Less than 1-2 2-3 More than Less than 1-2 2-3 More than
1 year years years 3 years Total 1 year years years 3 years Total

Projects in Progress 0.31 – 5.11 1.42 6.84 23.84 3.25 – – 27.09

Projects temporarily suspended – – – – – – – – – –
Total 0.31 – 5.11 1.42 6.84 23.84 3.25 – – 27.09

Note: There are no project in Other Intangible assets under development, which are overdue or has exceeded its cost compared to its original plan as at 31st March, 2022
and 31st March, 2021.

252 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

  INVESTMENT IN EQUITY INSTRUMENTS

In Associates (carrying amount determined using

 
the equity method of accounting)

  Quoted

International Travel House Limited 10 39,14,233 39,14,233

Cost of acquisition (including goodwill of
 
` 11.89 Crores) 21.87 21.87
Add / (Less) : Group Share of Profits / (Losses) 37.33 59.20 42.32 64.19

Gujarat Hotels Limited 10 17,33,907 17,33,907

Cost of acquisition (including goodwill of
 
` 1.16 Crores) 1.94 1.94
Add / (Less) : Group Share of Profits / (Losses) 16.01 17.95 15.08 17.02

  Unquoted

Delectable Technologies Private Limited 10 100 100

Cost of acquisition (including goodwill of
 
` 0.09 Crore) 0.10 0.10
Add / (Less) : Group Share of Profits / (Losses) … 0.10 … 0.10

  ATC Limited

Fully paid 100 55,650 55,650

Cost of acquisition (net of capital reserve of
 
` 0.16 Crore) 0.83 0.83
Add / (Less) : Group Share of Profits / (Losses) 1.61 2.44 1.54 2.37

  ` 70.00 per share paid 100 1,39,125 1,39,125

Cost of acquisition (including goodwill of
` 0.30 Crore) 2.92 2.92
Add / (Less) : Group Share of Profits / (Losses) 1.76 4.68 1.63 4.55

Russell Investments Limited 10 42,75,435 42,75,435

Cost of acquisition (net of capital reserve of
 
` 0.30 Crore) 4.27 4.27
Add / (Less) : Group Share of Profits / (Losses) 22.29 26.56 18.26 22.53

Divya Management Limited 10 41,82,915 41,82,915

Cost of acquisition (including goodwill of
 
` 1.09 Crores) 6.93 6.93
Add / (Less) : Group Share of Profits / (Losses) 0.64 7.57 0.55 7.48

Antrang Finance Limited 10 43,24,634 43,24,634

Cost of acquisition (including goodwill of
 
` 0.10 Crore) 4.40 4.40
Add / (Less) : Group Share of Profits / (Losses) 0.54 4.94 0.52 4.92

Carried over 123.44 123.16

ITC Limited REPORT AND ACCOUNTS 2022 253

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

Brought forward 123.44 123.16

INVESTMENT IN EQUITY INSTRUMENTS (Contd.)

In Joint Ventures (carrying amount determined

 
using the equity method of accounting)

  Unquoted

Espirit Hotels Private Limited 10 4,65,09,200 4,65,09,200

  Cost of acquisition 46.17 46.17
Add / (Less) : Group Share of Profits / (Losses) … 46.17 … 46.17

Maharaja Heritage Resorts Limited 100 1,80,000 1,80,000

Cost of acquisition (including goodwill of
 
` 0.13 Crore) … …
Add / (Less) : Group Share of Profits / (Losses) – … – …

Logix Developers Private Limited 10 77,66,913 77,66,913

Cost of acquisition (including goodwill of
 
` 23.84 Crores)  42.07 42.07
Add / (Less) : Group Share of Profits / (Losses) (42.07) – (42.07) –

ITC Essentra Limited 10 22,50,000 22,50,000

  Cost of acquisition 38.85 38.85
Add / (Less) : Group Share of Profits / (Losses) 55.72 94.57 50.91 89.76

In Others (at fair value through other

 
comprehensive income unless stated otherwise)

  Quoted

  VST Industries Limited 10 476 0.15 476 0.16

  HLV Limited 2 5,49,80,620 50.32 5,49,80,620 31.61

  EIH Limited 2 10,08,53,602 1559.71 10,08,53,602 937.43

  Tourism Finance Corporation of India Limited 10 25,000 0.15 25,000 0.15

  Unquoted

  Adyar Property Holding Company Private Limited 100 311 0.03 311 8.40

  Andhra Pradesh Gas Power Corporation Limited 10 8,04,000 2.32 8,04,000 2.32

  Bihar Hotels Limited 2 8,00,000 0.04 8,00,000 0.04

  Jupiter Township Limited 1 150 … 150 …

  Lotus Court Limited (Class G Shares) 48,000 2 2.34 2 2.34

  Mirage Advertising and Marketing Limited 10 12,488 – 12,488 –

Mother Sparsh Baby Care Private Limited

 
(at fair value through profit or loss) 10 100 0.96 – –

  Woodlands Multispeciality Hospital Limited 10 13,605 0.01 13,605 0.01

Carried over 1880.21 1241.55

254 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

Brought forward 1880.21 1241.55

  INVESTMENT IN PREFERENCE SHARES
In Associates (carrying amount determined using
 
the equity method of accounting)
  Unquoted
Delectable Technologies Private Limited
(Compulsorily Convertible Cumulative
Preference Shares) 10 5,792 3,828
 
Cost of acquisition [(including goodwill of
` 5.10 Crores) (2021 - ` 3.43 Crores)] 5.52 3.65
Add / (Less) : Group Share of Profits / (Losses)  (0.46)  5.06 (0.19)  3.46
  In Others (at fair value through profit or loss)
  Unquoted
Mother Sparsh Baby Care Private Limited
  (Compulsorily Convertible Cumulative
Preference Shares) 10 1,980 19.04 – –
INVESTMENT IN GOVERNMENT OR TRUST
 
SECURITIES (at amortised cost)
  Quoted
  State Development Loans
  7.20% Tamil Nadu - 25-Jan-2027 100 20,85,500 21.81 – –
  7.41% Uttar Pradesh - 09-Nov-2026 100 20,00,000 21.08 – –
  7.51% Maharashtra - 24-May-2027 100 65,00,000 68.49 – –
  7.59% Gujarat - 15-Feb-2027 100 1,25,00,000 132.61 – –
  7.62% Uttar Pradesh - 15-Feb-2027 100 30,00,000 31.81 – –
  7.84% Maharashtra - 13-Jul-2026 100 2,00,00,000 212.59 – –
  7.86% Karnataka - 15-Mar-2027 100 50,00,000 53.24 – –
  7.96% Maharashtra - 29-Jun-2026 100 25,00,000 26.73 – –
  8.03% Uttar Pradesh - 11-May-2026 100 70,00,000 74.77 – –
  8.08% Maharashtra - 15-Jun-2026 100 5,00,000 5.36 – –
  8.36% Maharashtra - 27-Jan-2026 100 35,00,000 37.76 – –
  8.72% Tamil Nadu - 19-Sep-2026 100 10,00,000 10.99 – –
  Government of India Zero Coupon Government Stock
  Zero Coupon Government Stock - 22-Feb-2025 100 34,00,000 28.97 – –
  Zero Coupon Government Stock - 15-Jun-2025 100 10,20,000 8.46 – –
  Zero Coupon Government Stock - 22-Aug-2025 100 25,35,000 20.66 – –
  Zero Coupon Government Stock - 15-Dec-2025 100 36,34,800 29.14 – –
  Zero Coupon Government Stock - 17-Dec-2025 100 6,02,300 4.80 – –
  Zero Coupon Government Stock - 22-Feb-2026 100 25,35,000 19.89 – –

Carried over 2713.47 1245.01

ITC Limited REPORT AND ACCOUNTS 2022 255

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

Brought forward 2713.47 1245.01

INVESTMENT IN GOVERNMENT OR TRUST
 
SECURITIES (Contd.)
  Zero Coupon Government Stock - 15-Jun-2026 100 10,20,000 7.85 – –
  Zero Coupon Government Stock - 22-Aug-2026 100 40,56,000 30.65 – –
  Zero Coupon Government Stock - 15-Dec-2026 100 10,20,000 7.56 – –
  Zero Coupon Government Stock - 22-Feb-2027 100 33,35,000 24.22 – –
  Zero Coupon Government Stock - 15-Jun-2027 100 31,17,000 22.24 – –
  Zero Coupon Government Stock - 22-Aug-2027 100 40,56,000 28.30 – –
  Unquoted
Government Securities - cost ` 70000.00
 
(2021 - ` 74000.00) – 0.01 – 0.01
Kisan Vikas Patra (Deposited with
  Government Authorities) (cost ` 5000.00,
fully impaired) – – – –
National Savings Certificates (pledged with
 
various Mandi Samitis) (cost ` 6000.00) … …
INVESTMENT IN BONDS IN THE NATURE OF
 
DEBENTURES (at amortised cost)
  Quoted
Tax Free Bonds - Secured, Redeemable &
 
Non-Convertible
  Housing and Urban Development Corporation Limited
  7.07% - Series B - 01-Oct-2025 10,00,000 4,300 435.09 4,300 436.49
  7.19% - Series A - 31-Jul-2025 10,00,000 150 15.43 150 15.55
  7.34% - Series 1 - 16-Feb-2023 1,000 – – 3,29,870 33.58
  7.39% - Series 2A - 08-Feb-2031 1,000 7,00,696 70.07 7,00,696 70.07
  8.20% - Series 2 - 05-Mar-2027 1,000 5,00,000 54.16 5,00,000 54.87
  India Infrastructure Finance Company Limited
  7.19% - Series I - 22-Jan-2023 1,000 – – 5,00,000 50.76
  7.36% - Series II - 22-Jan-2028 1,000 3,00,000 31.99 3,00,000 32.28
  8.01% - Series 1A - 12-Nov-2023 1,000 50,000 5.13 50,000 5.21
  8.26% - Series V B - 23-Aug-2028 10,00,000 1,175 123.63 1,175 124.37
  8.46% - Series VI B - 30-Aug-2028 10,00,000 1,300 139.96 1,300 141.17
  8.48% - Series VII B - 05-Sep-2028 10,00,000 1,780 188.71 1,780 189.99
  Indian Railway Finance Corporation Limited
  7.07% - Series 102 - 21-Dec-2025 1,000 70,498 7.22 70,498 7.26
  7.15% - Series 100 - 21-Aug-2025 10,00,000 250 25.64 250 25.79
  7.18% - Series 86 - 19-Feb-2023 1,000 – – 5,00,000 50.78

Carried over 3931.33 2483.19

256 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

Brought forward 3931.33 2483.19

INVESTMENT IN BONDS IN THE NATURE OF
 
DEBENTURES (Contd.)
  7.19% - Series 99 - 31-Jul-2025 10,00,000 2,250 225.52 2,250 225.66
  7.34% - Series 86A - 19-Feb-2028 1,000 1,00,000 10.74 1,00,000 10.84
  8.23% - Series 91 - 18-Feb-2024 1,000 8,00,000 82.81 8,00,000 84.14
  8.35% - Series 89 - 21-Nov-2023 10,00,000 100 10.31 100 10.47
  8.48% - Series 89A - 21-Nov-2028 10,00,000 1,250 131.94 1,250 132.68
  8.55% - Series 94A - 12-Feb-2029 10,00,000 130 13.79 130 13.87
National Bank for Agriculture and Rural
 
Development
  7.07% - Series 1A - 25-Feb-2026 10,00,000 2,000 206.19 2,000 207.62
  National Highways Authority of India
  7.11% - Series NHAI - II A - 18-Sep-2025 10,00,000 2,600 260.33 2,600 260.31
  7.14% - Series I A - 11-Jan-2026 1,000 8,06,381 81.70 8,06,381 81.91
  7.28% - Series NHAI - II B - 18-Sep-2030 10,00,000 2,500 250.00 2,500 250.00
  7.35% - Series II A - 11-Jan-2031 1,000 17,49,943 182.78 17,49,943 183.39
  8.50% - Series II A - 05-Feb-2029 1,000 5,00,000 56.33 5,00,000 57.04
  8.75% - Series II B - 05-Feb-2029 1,000 2,50,000 28.71 2,50,000 29.14
  National Housing Bank
  8.46% - Series V - 30-Aug-2028 10,00,000 800 84.20 800 84.70
  Power Finance Corporation Limited
  7.16% - Series 136 - 17-Jul-2025 10,00,000 600 61.57 600 61.98
  8.46% - Series 107B - 30-Aug-2028 10,00,000 500 52.63 500 52.94
  8.54% - Series 2A - 16-Nov-2028 1,000 3,50,000 40.07 3,50,000 40.69
  REC Limited
  7.17% - Series 5A - 23-Jul-2025 10,00,000 850 87.12 850 87.69
  8.46% - Series 3B - 29-Aug-2028 10,00,000 1,190 128.55 1,190 129.72
  8.46% - Series 2A - 24-Sep-2028 1,000 3,50,000 39.84 3,50,000 40.44
  8.54% - Series 4B - 11-Oct-2028 10,00,000 50 5.28 50 5.32
Taxable Bonds - Secured, Redeemable &
 
Non-Convertible
  Indian Railway Finance Corporation Limited
  7.83% - Series 118 - 21-Mar-2027 10,00,000 1,750 187.83 – –

Carried over 6159.57 4533.74

ITC Limited REPORT AND ACCOUNTS 2022 257

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

Brought forward 6159.57 4533.74

INVESTMENT IN BONDS IN THE NATURE OF
 
DEBENTURES (Contd.)
Taxable Bonds - Unsecured, Redeemable &
 
Non-Convertible
  Export Import Bank of India
5.20% - Series X 01 - 04-Mar-2025
 
(with Put and Call Option 04-Mar-2024) 10,00,000 2,000 200.00 – –
Housing and Urban Development
 
Corporation Limited
  6.99% - Series E - 11-Nov-2022 10,00,000 – – 700 70.18
  7.61% - Series A - 22-Jun-2022 10,00,000 – – 250 25.14
  8.40% - Series C 2018 - 11-Apr-2022 10,00,000 – – 850 85.00
National Bank for Agriculture and Rural
 
Development
4.60% - Series 21 E - 29-Jul-2024 (with Put and
 
Call option 29-Jul-2022) 10,00,000 – – 5,000 499.98
  5.70% - Series 22 D - 31-Jul-2025 10,00,000 1,000 99.15 – –
  6.70% - Series 20 H - 11-Nov-2022 10,00,000 – – 250 25.00
  6.98% - Series 20 G - 19-Sep-2022 10,00,000 – – 2,000 200.00
  7.69% - Series 20 C - 29-May-2024 10,00,000 4,300 451.74 4,300 461.01
  7.70% - Series 20 D - 13-Jun-2022 10,00,000 – – 500 50.59
  7.85% - Series 20 B - 23-May-2022 10,00,000 – – 900 91.13
  7.90% - Series 20 A - 18-Apr-2022 10,00,000 – – 600 60.73
  Power Finance Corporation Limited
  5.47% - Series 206 -19-Aug-2023 10,00,000 100 10.05 100 10.09
  6.09% - Series BS-212 A - 27-Aug-2026 10,00,000 300 30.09 – –
  6.50% - Series 208 - 17-Sep-2025 10,00,000 1,150 116.68 1,150 117.13

  6.72% - Series 203 A - 09-Jun-2023 10,00,000 900 91.74 900 93.11

  6.75% - Series 202 A - 22-May-2023 10,00,000 2,050 208.61 2,050 211.61

  7.10% - Series 169 A - 08-Aug-2022 10,00,000 – – 700 70.12
  7.35% - Series 191 - 15-Oct-2022 10,00,000 – – 4,500 450.00
  8.03% - Series 147 - 02-May-2026 10,00,000 600 64.04 – –
  8.20% - Series 128 - 10-Mar-2025 10,00,000 450 47.59 450 48.36
  8.39% - Series 130 C - 19-Apr-2025 10,00,000 200 21.29 200 21.66
  8.45% - Series 181 - 11-Aug-2022 10,00,000 – – 250 25.50

Carried over 7500.55 7150.08

258 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

Brought forward 7500.55 7150.08

INVESTMENT IN BONDS IN THE NATURE OF
 
DEBENTURES (Contd.)
  REC Limited
  5.85% - Series 203 B - 20-Dec-2025 10,00,000 1,100 109.37 1,100 109.26
  7.09% - Series 152 - 17-Oct-2022 10,00,000 – – 300 29.88
  7.09% - Series 185 - 13-Dec-2022 10,00,000 – – 2,000 200.00
Perpetual Bonds - Unsecured, Subordinated
 
& Non-Convertible#
  ICICI Bank
9.15% - Series DMR 18AT (with first Call option
 
on 20-Jun-2023) 10,00,000 2,647 264.70 2,647 264.70
9.90% - Series DDE 18AT (with first Call option
 
on 28-Dec-2023) 10,00,000 3,000 300.00 3,000 300.00
  State Bank of India
  7.72% - Series I (with first Call option 03-Sep-2026) 1,00,00,000 313 313.00 – –
  7.72% - Series II (with first Call option 18-Oct-2026) 1,00,00,000 400 400.00 – –
  9.37% - Series II (with first Call option 21-Dec-2023) 10,00,000 2,350 235.00 2,350 235.00
  9.56% - Series I (with first Call option 04-Dec-2023) 10,00,000 7,000 700.00 7,000 700.00
Zero Coupon Bonds - Secured, Redeemable &
 
Non-Convertible
  LIC Housing Finance Limited
  Tranche 378 - 04-May-2022 10,00,000 – – 500 59.59
  Tranche 416 - 25-Apr-2025 10,00,000 11,250 1149.72 – –
  INVESTMENT IN DEBT MUTUAL FUNDS
  Quoted
  Fixed Maturity Plans (at amortised cost)*
  Aditya Birla Sun Life Mutual Fund 10 2,19,98,900 22.03 – –
  Nippon India Mutual Fund 10 1,49,99,250 15.08 – –
  SBI Mutual Fund 10 23,69,88,150 241.25 – –
Fixed Maturity Plans (at fair value through
 
profit or loss)
  Aditya Birla Sun Life Mutual Fund 10 – – 11,70,00,000 144.16
  HDFC Mutual Fund 10 – – 4,00,00,000 50.10
  ICICI Prudential Mutual Fund 10 – – 10,20,00,000 125.63
  IDFC Mutual Fund 10 – – 2,20,00,000 26.81
  Kotak Mahindra Mutual Fund 10 – – 19,70,00,000 244.26
  Nippon India Mutual Fund 10 – – 8,50,00,000 108.93
  SBI Mutual Fund 10 – – 19,70,00,000 241.10

Carried over 11250.70 9989.50

ITC Limited REPORT AND ACCOUNTS 2022 259

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless
(` in (` in
stated Number Number
Crores) Crores)
otherwise)

4. Non-current investments (Contd.)

Brought forward 11250.70 9989.50

  INVESTMENT IN DEBT MUTUAL FUNDS (Contd.)

Exchange Traded Funds (at fair value through

 
other comprehensive income) **
  Axis Mutual Fund 1 5,50,00,000 58.00 – –
  Nippon India Mutual Fund 10 3,60,00,000 389.05 – –
  Unquoted
Target Maturity Index Funds (at fair value through
 
other comprehensive income) **
  Aditya Birla Sun Life Mutual Fund 10 35,48,47,210 360.79 – –
  Axis Mutual Fund 10 1,98,53,868 20.02 – –
  ICICI Prudential Mutual Fund 10 17,74,37,385 180.27 – –
  Kotak Mahindra Mutual Fund 10 2,99,36,233 30.06 – –
  SBI Mutual Fund 10 19,80,19,704 200.51 – –
INVESTMENT IN ALTERNATIVE INVESTMENT FUNDS
 
(at fair value through profit or loss)
  Unquoted
  Chiratae Ventures India Fund IV 1,00,000 923 13.98 600 5.91
  Fireside Ventures Investments Fund I 1,00,000 1,324 51.27 1,307 25.49
  Fireside Ventures Investments Fund II 1,000 1,00,000 8.67 50,000 3.64
  India Foundation Fund Series I 100 1,63,740 2.15 – –
  Roots Ventures I 100 8,13,113 11.26 – –
  Aggregate amount of quoted Investments 11480.91 9795.04
  Aggregate amount of unquoted Investments 1095.82 229.50
  Total 12576.73 10024.54

Aggregate market value of quoted investments ` 11701.81 Crores (2021 - ` 10237.47 Crores).
* Investments in Fixed Maturity Plans (FMPs) that are intended to be held by the Company till maturity are classified as
amortised cost. The underlying instruments in the portfolio of these FMPs have minimal churn and are held to receive
contractual cashflows.
** Exchange Traded / Target Maturity Index Funds follow a passive buy and hold investment strategy to receive contractual cashflows
except for meeting redemption and rebalancing requirements. Investment in such funds are classified as FVTOCI as cash flows from
these investments are realised on maturity or upon sale.
# Additional Tier 1 bonds, which are perpetual in nature, are issued by commercial banks under Reserve Bank of India guidelines.
These have been classified as debt instruments by the Company based on the substantive characteristics of the contract.

260 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

5. Loans

Others Loans - Employees

– Unsecured, considered good 6.77 6.61 3.47 4.07

TOTAL 6.77 6.61 3.47 4.07

6. Other financial assets

Bank deposits with more than 12 months maturity – 14.90 – 28.48

Other financial assets
Advances 1.32 – 1.02 –
Security Deposits* 27.76 73.47 27.23 72.38
Deposits other than Security Deposits 1510.27 1501.05 574.58 0.84
Interest accrued on Loans, Deposits, Investments, etc. 522.12 0.16 469.47 0.17
Other Receivables** 503.94 – 306.72 –

TOTAL 2565.41 1589.58 1379.02 101.87

* Include deposits to Directors and Key Management Personnel ` 0.08 Crore (2021 - ` 0.08 Crore) (Refer Note 30).
** Comprise receivables on account of Government grants, claims, interest, rentals, derivatives designated as hedging
instruments, unbilled revenue, etc.

ITC Limited REPORT AND ACCOUNTS 2022 261

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

7. Deferred tax

Deferred tax liabilities (Net) 1673.47 1736.39

Less: Deferred tax assets (Net) 63.53 58.54

TOTAL 1609.94 1677.85

Movement in deferred tax liabilities / assets balances (` in Crores)

Acquisitions
Recognised Recognised Reclassified through Effect of
2021-22
Opening in profit or Recognised directly in to Profit or business foreign Closing
Balance loss in OCI Equity loss combination exchange Balance

Deferred tax liabilities / assets in

relation to:
On fiscal allowances on property, plant and
equipment, investment property etc. 1626.22 13.53 – – – – – 1639.75
On excise duty / National Calamity
Contingent Duty on closing stock 72.25 6.96 – – – – – 79.21
On cash flow hedges 1.66 – 9.05 2.44 (8.33) – – 4.82
Other timing differences 326.07 (35.21) 0.93 – – – – 291.79
Total deferred tax liabilities 2026.20 (14.72) 9.98 2.44 (8.33) – – 2015.57
On fiscal allowances on property, plant
and equipment etc. 7.44 0.84 – – – – 0.42 8.70
On employees’ separation
and retirement etc. 76.52 7.42 2.34 – – – – 86.28
On provision for doubtful
debts / advances 60.22 0.10 – – – – – 60.32
On State and Central taxes etc. 64.36 5.26 – – – – – 69.62
On unabsorbed tax losses
and depreciation 6.13 0.34 – – – – – 6.47
Other timing differences 128.55 37.80 – – – – – 166.35
Total deferred tax assets before
MAT credit entitlement 343.22 51.76 2.34 – – – 0.42 397.74
Total deferred tax liabilities before
MAT credit entitlement (Net) 1682.98 (66.48) 7.64 2.44 (8.33) – (0.42) 1617.83
Less: MAT credit entitlement 5.13 2.76 – – – – – 7.89
Total deferred tax liabilities (Net) 1677.85 (69.24) 7.64 2.44 (8.33) – (0.42) 1609.94

262 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements (` in Crores)
7. Deferred tax (Contd.) Acquisitions
Recognised Recognised Reclassified through Effect of
2020-21 Opening in profit or Recognised directly in to Profit or business foreign Closing
Balance loss in OCI Equity loss combination exchange Balance

Deferred tax liabilities / assets in

relation to:
On fiscal allowances on property, plant and
equipment, investment property etc. 1617.07 5.36 – – – 3.79 – 1626.22
On excise duty / National Calamity
Contingent Duty on closing stock 46.09 26.16 – – – – – 72.25
On cash flow hedges (8.19) – 10.44 1.26 (1.85) – – 1.66
Other timing differences 266.97 58.96 – – – 0.12 0.02 326.07
Total deferred tax liabilities 1921.94 90.48 10.44 1.26 (1.85) 3.91 0.02 2026.20
On fiscal allowances on property, plant
and equipment etc. 6.35 1.09 – – – – – 7.44
On employees’ separation
and retirement etc. 67.39 10.33 (1.43) – – 0.33 (0.10) 76.52
On provision for doubtful
debts / advances 46.61 13.73 – – – – (0.12) 60.22
On State and Central taxes etc. 103.42 (39.06) – – – – – 64.36
On unabsorbed tax losses
and depreciation 5.30 0.83 – – – – – 6.13
Other timing differences 119.41 9.43 – – – 0.06 (0.35) 128.55
Total deferred tax assets before
MAT credit entitlement 348.48 (3.65) (1.43) – – 0.39 (0.57) 343.22
Total deferred tax liabilities before
MAT credit entitlement (Net) 1573.46 94.13 11.87 1.26 (1.85) 3.52 0.59 1682.98
Less: MAT Credit Entitlement 2.55 2.58 – – – – – 5.13
Total deferred tax liabilities (Net) 1570.91 91.55 11.87 1.26 (1.85) 3.52 0.59 1677.85

The Group has losses of ` 160.09 Crores (2021 - ` 162.68 Crores) for which no deferred tax assets have been recognised. A part of these losses will expire between
financial year 2022-23 to 2041-42.

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

8. Other assets

Capital Advances – 203.62 – 278.46

Advances other than capital advances
Security Deposits
– With Statutory Authorities 0.29 809.91 0.19 788.21
– Others 0.66 135.52 0.66 117.07
Advances to related parties (Refer Note 30) 4.50 – 3.85 –
Other Advances (including advances with statutory
authorities, prepaid expenses, employees, etc.) 1118.60 137.43 951.06 107.20
Other Receivables* 182.03 4.74 139.47 4.54
TOTAL 1306.08 1291.22 1095.23 1295.48

* Includes receivables on account of Government grants.

ITC Limited REPORT AND ACCOUNTS 2022 263

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

9. Inventories*

(At lower of cost and net realisable value)

Raw materials (including packing materials) 6602.44 6683.80
Work-in-progress 732.41 808.95
Finished goods (manufactured) 1794.86 1582.59
Stock-in-trade (goods purchased for resale) 1181.11 866.31
Stores and spares 473.44 410.91
Intermediates - Tissue paper and Paperboards 79.89 44.60

TOTAL 10864.15 10397.16

The above includes goods in transit as under:

Raw materials (including packing materials) 302.02 135.74
Stock-in-trade (goods purchased for resale) 2.58 1.60
Stores and spares 4.38 1.59

TOTAL 308.98 138.93

The cost of inventories recognised as an expense includes ` 17.90 Crores (2021 - ` 10.67 Crores) in respect of write-downs of
inventory to net realisable value. During the year reversal of previous write-downs of ` 0.91 Crore (2021 - ` 1.67 Crores) have been
made owing to subsequent increase in realisable value.
Inventories of ` 1067.80 Crores (2021 - ` 1259.26 Crores) are expected to be recovered after more than twelve months. The operating
cycle of the Group is twelve months.
* Also Refer Note 20.

10. Biological assets other than bearer plants

Balance at the beginning of the year 110.05 86.20

Biological assets acquired during the year 3.11 5.48
Cost incurred during the year 113.15 114.55
Changes in fair value* 69.02 110.06
Transfer of Biological assets to Inventories (4.98) (9.71)
Biological assets sold during the year (181.06) (196.65)
Effect of foreign exchange translation 0.15 0.13

Balance at the end of the year 109.44 110.06

* Represents aggregate gain / (loss) arising on account of change in fair value less costs to sell during the year.
The Group had 1,26,56,494 numbers of TECHNITUBER® seed potatoes (2021 - 1,36,80,289 numbers).
There were 77968 MT of field generated seed potatoes (2021 - 84802 MT). During the year, output of agricultural produce (potatoes)
is 7470 MT (2021 - 10748 MT).
In October 2021 - 17168 MT (October 2020 - 14464 MT) of seed potatoes were planted and in February / March 2022 - 85093 MT
(February / March 2021 - 92766 MT) of seed potatoes were harvested as a result of quantitative biological transformation.
Estimated amount of contracts remaining to be executed for acquisition / development of biological assets are
` 1.92 Crore (2021 - ` 0.16 Crores).

264 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

11. Current investments (at fair value through

profit or loss, unless stated otherwise) (Contd.)
INVESTMENT IN BONDS IN THE NATURE OF
DEBENTURES
Quoted
Tax Free Bonds - Secured, Redeemable &
Non-Convertible
India Infrastructure Finance Company Limited
7.19% - Series I - 22-Jan-2023 1,000 1,50,000 15.25 1,50,000 15.68
Indian Railway Finance Corporation Limited
7.18% - Series 86 - 19-Feb-2023 1,000 25,00,000 254.56 25,00,000 261.85
8.00% - Series 80 - 23-Feb-2022 1,000 – – 5,25,012 54.31
8.23% - Series 91 - 18-Feb-2024 1,000 20,00,000 211.32 20,00,000 219.75
National Highways Authority of India
8.20% - 25-Jan-2022 1,000 – – 4,94,476 51.08
8.50% - Series II A - 05-Feb-2029 1,000 1,04,000 12.47 1,04,000 13.02
National Housing Bank
6.82% - 26-Mar-2023 10,000 5,000 5.08 5,000 5.21
Power Finance Corporation Limited
8.01% - Series 107 A - 30-Aug-2023 10,00,000 1,000 103.98 1,000 107.83
8.09% - Series 80 A - 25-Nov-2021 1,00,000 – – 1,500 15.38
8.18% - Series 1 A - 16-Nov-2023 1,000 12,95,560 135.79 12,95,560 141.08
8.20% - Series I - 01-Feb-2022 1,000 – – 1,00,000 10.34
REC Limited
7.22% - Series 1 - 19-Dec-2022 1,000 30,00,000 304.51 30,00,000 313.23
8.01% - Series 3 A - 29-Aug-2023 10,00,000 1,000 103.96 1,000 107.82
8.12% - 27-Mar-2027 1,000 60,000 6.81 60,000 7.08
Taxable Bonds - Unsecured, Redeemable &
Non-Convertible
Export Import Bank of India
9.15% - Series P16 - 05-Sep-2022 10,00,000 300 30.59 300 31.90
Perpetual Bonds - Unsecured, Subordinated
& Non-Convertible#
ICICI Bank Limited
9.15% - Series DMR 18AT - (with first Call option on
20-Jun-2023) 10,00,000 350 35.20 350 35.48
INVESTMENT IN GOVERNMENT OR TRUST
SECURITIES (at amortised cost)
Unquoted
National Savings Certificates (pledged with
Mandi Samiti) (cost ` 2000.00) … …
National Savings Certificate (cost ` 10000.00) … …

Carried over 1219.52 1391.04

ITC Limited REPORT AND ACCOUNTS 2022 265

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

11. Current investments (at fair value through

profit or loss, unless stated otherwise) (Contd.)

Brought forward 1219.52 1391.04

INVESTMENT IN DEBT MUTUAL FUNDS
Quoted
Bharat Bond ETF - April 2023 1,000 30,00,000 351.13 30,00,000 335.10
Nippon India ETF Nifty CPSE Bond Plus SDL - 2024 Maturity 10 58,69,560 63.61 58,69,560 60.46
Unquoted
Liquid / Overnight Funds
Aditya Birla Sun Life Mutual Fund 100 1,93,410 6.61 3,38,958 11.16
Axis Mutual Fund 1,000 4,67,509 110.04 11,34,704 148.98
DSP Mutual Fund 1,000 5,773 1.74 33,53,567 979.08
ICICI Prudential Mutual Fund 100 61,112 1.93 6,35,621 19.36
Kotak Mahindra Mutual Fund 1,000 9,785 4.21 2,87,577 119.08
LIC Mutual Fund 1,000 – – 1,63,399 60.50
Nippon India Mutual Fund 100 87,91,983 100.01 – –
Nippon India Mutual Fund 1,000 49,780 25.90 4,84,438 175.74
SBI Mutual Fund 1,000 1,009 0.33 69,582 22.36
UTI Mutual Fund 1,000 84,494 29.30 18,00,098 603.86
Ultra Short Term Funds
Aditya Birla Sun Life Mutual Fund 100 2,07,70,310 922.62 2,07,43,268 883.48
Kotak Mahindra Mutual Fund 10 26,38,12,322 945.20 26,38,12,322 910.52
SBI Mutual Fund 1,000 2,47,159 121.04 2,47,159 116.63
Low Duration Funds
Axis Mutual Fund 1,000 14,61,916 378.65 14,61,916 362.93
DSP Mutual Fund 10 17,22,63,805 277.37 17,22,63,805 267.44
ICICI Prudential Mutual Fund 100 60,49,828 264.70 60,49,828 253.82
IDFC Mutual Fund 10 7,34,11,386 233.89 7,34,11,386 225.06
SBI Mutual Fund 1,000 8,30,697 241.68 8,30,697 232.24
Money Market Funds
Aditya Birla Sun Life Mutual Fund 100 40,95,539 122.42 40,95,539 117.61
HDFC Mutual Fund 1,000 2,39,118 111.30 2,39,118 106.98
IDFC Mutual Fund 10 4,22,87,680 147.67 4,22,87,680 142.29
Nippon India Mutual Fund 1,000 6,60,345 221.25 6,60,345 212.68
SBI Mutual Fund 10 6,65,47,323 236.65 6,65,47,323 227.56
Floating Rate Funds
Aditya Birla Sun Life Mutual Fund 100 1,96,03,366 555.74 1,96,03,366 530.53
HDFC Mutual Fund 10 10,07,90,662 404.13 10,07,90,662 385.94
Nippon India Mutual Fund 10 6,22,64,756 235.01 6,22,64,756 224.08

Carried over 7333.65 9126.51

266 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

11. Current investments (at fair value through

profit or loss, unless stated otherwise) (Contd.)

Brought forward 7333.65 9126.51

INVESTMENT IN DEBT MUTUAL FUNDS (Contd.)
Short Term Funds
Axis Mutual Fund 10 – – 4,31,15,900 109.52
DSP Mutual Fund 10 3,12,12,253 126.54 6,67,71,463 259.37
IDFC Mutual Fund 10 6,58,03,493 322.42 6,58,03,493 308.37
Nippon India Mutual Fund 10 3,86,19,184 175.83 8,93,74,937 384.78
SBI Mutual Fund 10 5,40,50,081 147.17 9,72,90,145 253.24
Banking & PSU Debt Funds
Axis Mutual Fund 1,000 31,86,227 689.41 31,86,227 662.25
IDFC Mutual Fund 10 14,17,61,931 283.77 14,17,61,931 272.68
Nippon India Mutual Fund 10 – – 10,41,55,094 167.84
Corporate Bond Funds
Aditya Birla Sun Life Mutual Fund 10 70,15,575 63.27 70,15,575 60.27
ICICI Prudential Mutual Fund 10 2,49,28,836 61.29 13,41,33,266 315.31
Kotak Mahindra Mutual Fund 1,000 1,111 0.35 6,72,051 197.82
Current Portion of Non-Current Investment
INVESTMENT IN BONDS IN THE NATURE OF
DEBENTURES (at amortised cost)
Quoted
Tax Free Bonds - Secured, Redeemable &
Non-Convertible
Housing and Urban Development
Corporation Limited
7.34% - Series 1 - 16-Feb-2023 1,000 3,29,870 33.27 – –
8.10% - Series 1 - 05-Mar-2022 1,000 – – 3,50,000 35.52
India Infrastructure Finance Company Limited
7.19% - Series I - 22-Jan-2023 1,000 5,00,000 50.34 – –
Indian Railway Finance Corporation Limited
7.18% - Series 86 - 19-Feb-2023 1,000 5,00,000 50.37 – –
8.00% - Series 80 - 23-Feb-2022 1,000 – – 3,31,819 33.68
Taxable Bonds - Unsecured, Redeemable &
Non-Convertible
Housing and Urban Development Corporation Limited
6.99% - Series E - 11-Nov-2022 10,00,000 700 70.05 – –
7.61% - Series A - 22-Jun-2022 10,00,000 250 25.02 – –
8.40% - Series C - 11-Apr-2022 10,00,000 850 85.00 – –

Carried over 9517.75 12187.16

ITC Limited REPORT AND ACCOUNTS 2022 267

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

11. Current investments (at fair value through

profit or loss, unless stated otherwise) (Contd.)

Brought forward 9517.75 12187.16

INVESTMENT IN BONDS IN THE NATURE OF
DEBENTURES (Contd.)
National Bank for Agriculture and Rural Development
4.60% - Series 21 E - 29-Jul-2024 (with Put and Call
option on 29-Jul-2022) 10,00,000 5,000 499.95 – –
6.70% - Series 20 H - 11-Nov-2022 10,00,000 250 25.00 – –
6.98% - Series 20 G - 19-Sep-2022 10,00,000 2,000 200.00 – –
7.70% - Series 20 D - 13-Jun-2022 10,00,000 500 50.09 – –
7.85% - Series 20 B - 23-May-2022 10,00,000 900 90.13 – –
7.90% - Series 20 A - 18-Apr-2022 10,00,000 600 60.02 – –
8.60% - Series 19 B - 31-Jan-2022 10,00,000 – – 1,000 101.22
Power Finance Corporation Limited
7.10% - Series 169 A - 08-Aug-2022 10,00,000 700 70.02 – –
7.35% - Series 191 - 15-Oct-2022 10,00,000 4,500 450.00 – –
7.47% - Series 151 A - 16-Sep-2021 10,00,000 – – 150 15.01
8.45% - Series 181 - 11-Aug-2022 10,00,000 250 25.14 – –
8.66% - Series 123 C - 27-Nov-2021 10,00,000 – – 150 15.12
REC Limited
7.09% - Series 152 - 17-Oct-2022 10,00,000 300 29.95 – –
7.09% - Series 185 - 13-Dec-2022 10,00,000 2,000 200.00 – –
8.45% - Series 167 - 22-Mar-2022 10,00,000 – – 1,700 170.27
8.50% - Series 177 - 20-Dec-2021 10,00,000 – – 2,880 288.00
Small Industries Development Bank of India
7.89% - Series III - 15-Nov-2022 (with Put and Call
option on 14-May-2021) 10,00,000 – – 2,500 250.05
Taxable Bonds - Secured, Redeemable &
Non-Convertible
LIC Housing Finance Limited
7.67% - Tranche 339 - 29-Jul-2021 10,00,000 – – 400 40.04
8.30% - Tranche 304 - 15-Jul-2021 10,00,000 – – 100 10.02
8.37% - Tranche 294 - 10-May-2021 10,00,000 – – 550 55.06
Zero Coupon Bonds - Secured, Redeemable &
Non-Convertible
LIC Housing Finance Limited
Tranche 378 - 04-May-2022 10,00,000 500 64.78 – –

Carried over 11282.83 13131.95

268 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
Face Value ` As at 31st March, 2022 As at 31st March, 2021
(Fully Paid
unless stated (` in (` in
Number Number
otherwise) Crores) Crores)

11. Current investments (at fair value through

profit or loss, unless stated otherwise) (Contd.)

Brought forward 11282.83 13131.95

INVESTMENT IN BONDS IN THE NATURE OF
DEBENTURES (Contd.)
Perpetual Bonds - Unsecured, Subordinated
& Non-Convertible#
State Bank of India
8.39% - Series III (with first Call option on
25-Oct-2021) 10,00,000 – – 1,550 154.64
9.00% - Series I (with first Call option on
06-Sep-2021) 10,00,000 – – 3,250 325.12
ICICI Bank Limited
9.20% - Series DMR 17AT (with first Call option on
17-Mar-2022) 10,00,000 – – 2,000 200.07
INVESTMENT IN DEBT MUTUAL FUNDS
Quoted
Fixed Maturity Plans
Aditya Birla Sun Life Mutual Fund 10 11,70,00,000 150.27 8,50,00,000 107.61
DSP Mutual Fund 10 – – 4,90,00,000 61.78
Franklin India Mutual Fund 10 – – 1,40,00,000 17.66
HDFC Mutual Fund 10 4,00,00,000 52.17 6,50,00,000 81.86
ICICI Prudential Mutual Fund 10 10,20,00,000 131.07 31,10,00,000 393.39
IDFC Mutual Fund 10 2,20,00,000 27.97 – –
Kotak Mahindra Mutual Fund 10 19,70,00,000 254.79 7,20,00,000 90.69
Nippon India Mutual Fund 10 8,50,00,000 113.61 9,90,00,000 125.19
SBI Mutual Fund 10 19,70,00,000 251.57 5,50,00,000 69.26
UTI Mutual Fund 10 – – 6,90,00,000 87.11
Aggregate amount of quoted Investments 4694.84 4514.97
Aggregate amount of unquoted Investments 7569.44 10331.36
Total 12264.28 14846.33

Aggregate market value of quoted investments ` 4711.32 Crores (2021 - ` 4544.92 Crores).
# Additional Tier 1 bonds, which are perpetual in nature, are issued by commercial banks under Reserve Bank of India guidelines.
These have been classified as debt instruments by the Company based on the substantive characteristics of the contract.

ITC Limited REPORT AND ACCOUNTS 2022 269

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

12. Trade receivables (Current)

Secured, considered good 52.45 45.05

Unsecured, considered good 2409.45 2456.65
Which have significant increase in credit risk – –
Credit impaired 196.87 194.74
Less: Allowance for Credit impairment 196.87 194.74

TOTAL 2461.90 2501.70

Trade receivables ageing schedule (` in Crores)

Outstanding for following periods from due date of payment as at

31st March, 2022
Total
Less than 6 months- More than
Not Due 6 months 1 year 1-2 years 2-3 years 3 years

Undisputed Trade Receivables – considered

good 1564.12 883.51 11.75 5.35 (0.61) (2.22) 2461.90
Undisputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Undisputed Trade Receivables – credit impaired – 1.70 11.66 36.73 12.29 16.59 78.97
Disputed Trade Receivables – considered good – – – – – – –
Disputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Disputed Trade Receivables – credit impaired – – 0.02 2.41 5.94 109.53 117.90
SUB-TOTAL 1564.12 885.21 23.43 44.49 17.62 123.90 2658.77
Less: Allowance for Credit Impairment 196.87
TOTAL 2461.90

Outstanding for following periods from due date of payment as at

31st March, 2021
Total
Less than 6 months- More than
Not Due 6 months 1 year 1-2 years 2-3 years 3 years

Undisputed Trade Receivables – considered

good 1713.35 729.42 45.70 12.59 1.70 (1.06) 2501.70
Undisputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Undisputed Trade Receivables – credit impaired – 17.06 12.34 19.30 8.79 20.36 77.85
Disputed Trade Receivables – considered good – – – – – – –
Disputed Trade Receivables – which have
significant increase in credit risk – – – – – – –
Disputed Trade Receivables – credit impaired – 0.02 0.27 5.46 10.72 100.42 116.89
SUB-TOTAL 1713.35 746.50 58.31 37.35 21.21 119.72 2696.44
Less: Allowance for Credit Impairment 194.74
TOTAL 2501.70

270 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

13. Cash and cash equivalents@

Balances with Banks

Current accounts 261.20 259.02
Deposit accounts 3.12 27.47
Cheques, drafts on hand 0.89 1.38
Cash on hand 6.16 2.55

TOTAL 271.37 290.42

@ Cash and cash equivalents include cash on hand, cheques, drafts on hand, cash at bank and deposits with banks with original
maturity of 3 months or less.

14. Other bank balances

Earmarked balances 224.49 209.23

In deposit accounts* 4158.56 4159.37

TOTAL 4383.05 4368.60

* Represents deposits with original maturity of more than 3 months having remaining maturity of less than 12 months from the
Balance Sheet date.

ITC Limited REPORT AND ACCOUNTS 2022 271

Notes to the Consolidated Financial Statements
As at As at As at As at
31st March, 2022 31st March, 2022 31st March, 2021 31st March, 2021
(No. of Shares) (` in Crores) (No. of Shares) (` in Crores)

15. Equity Share capital

Authorised
Ordinary Shares of ` 1.00 each 20,00,00,00,000 2000.00 20,00,00,00,000 2000.00
Issued and Subscribed
Ordinary Shares of ` 1.00 each, fully paid 12,32,32,55,931 1232.33 12,30,88,44,231 1230.88

A) Reconciliation of number of
Ordinary Shares outstanding
As at beginning of the year 12,30,88,44,231 1230.88 12,29,22,31,241 1229.22
Add: Issue of Shares on exercise
of Options 1,44,11,700 1.44 1,66,12,990 1.66
As at end of the year 12,32,32,55,931 1232.33 12,30,88,44,231 1230.88

B) Shareholders holding more than 5% of the Ordinary Shares in the Company

As at As at As at As at
31st March, 2022 31st March, 2022 31st March, 2021 31st March, 2021
(No. of Shares) % (No. of Shares) %

Tobacco Manufacturers (India) Limited 2,97,83,47,320 24.17 2,97,83,47,320 24.20

Life Insurance Corporation of India 1,95,02,36,958 15.83 1,99,75,66,067 16.23
Specified Undertaking of the
Unit Trust of India 97,45,31,427 7.91 97,45,31,427 7.92

C) Shareholding of Promoters : Nil

D) Ordinary Shares allotted as fully paid pursuant to contract(s) without payment being received in cash during the period of
five years immediately preceding 31st March : Nil

E) Ordinary Shares allotted as fully paid up Bonus Shares for the period of five years immediately preceding 31st March
2022 2021
(No. of Shares) (No. of Shares)

Bonus Shares issued in 2016-17 4,02,66,57,100 4,02,66,57,100

F) Rights, preferences and restrictions attached to the Ordinary Shares

The Ordinary Shares of the Company, having par value of ` 1.00 per share, rank pari passu in all respects including voting rights and
entitlement to dividend.

G) Shares reserved for issue under Options

As at As at
31st March, 2022 31st March, 2021
(No. of Shares) (No. of Shares)

Ordinary Shares of ` 1.00 each 22,76,87,310 29,18,12,920

Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be allotted ten Ordinary Shares of the Company of ` 1.00 each upon payment of the
exercise price during the exercise period. The exercise period commences from the date of vesting of the Options and expires at the end of five
years from the date of vesting in respect of Options.
The vesting period for conversion of Options is as follows:
On completion of 12 months from the date of grant of the Options : 30% vests
On completion of 24 months from the date of grant of the Options : 30% vests
On completion of 36 months from the date of grant of the Options : 40% vests
The Options have been granted at the ‘market price’ as defined under the Securities and Exchange Board of India (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021.
Further details of ITC Employee Stock Option Schemes are provided in Note 28(ix).

272 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021(` in
(` in Crores) Crores)

16. Non-current borrowings

Unsecured
Term loans
– From Others 0.31 0.30
Deferred payment liabilities
– Sales tax deferment loans 4.54 5.28
TOTAL 4.85 5.58

Terms of borrowings are as under:

Term Loans from Others:
Interest free loan repayable on the basis of 33% (2021 - 33%) of the net profits earned by a subsidiary or the residual balance,
whichever is less. 
Sales tax deferment loans:
Interest free deferral period of 14 years and repayable by 2025-26.
The repayment schdule is summarised as under:

Term Loans Deferred Term Loans Deferred

Payment Payment
Liabilities Liabilities

In the first year (Refer Note 17B) – 0.74 ... 0.35

Current maturities of long-term debt – 0.74 ... 0.35
In the second year – 1.26 – 0.74
In the third to fifth year – 3.28 – 4.54
After five years 0.31 – 0.30 –
Non-current borrowings 0.31 4.54 0.30 5.28

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

17A. Lease liabilities*

Lease liabilities 50.18 193.67 54.06 206.96

TOTAL 50.18 193.67 54.06 206.96

* Refer Note 28(viii)

Movement of Lease Liabilities during the year
Particulars 31st March, 2022 31st March, 2021
Opening Lease Liabilities 261.02 267.87
New Leases recognised 46.28 55.91
Remeasurements and withdrawals (4.44) (8.19)
Interest expense on Lease Liabilities 21.21 22.37
Payment of Lease Liabilities made (80.23) (77.10)
Foreign Currency Translation Reserve adjustment 0.01 0.16
Closing balance of Lease Liabilities 243.85 261.02

ITC Limited REPORT AND ACCOUNTS 2022 273

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

17B. Other financial liabilities

Non-current
Others
(Includes liability in respect of cash-settled share based payments,
retention money payable towards property, plant and equipment, deposits,
contingent consideration on business combination etc.) 144.50 283.50

TOTAL 144.50 283.50

Current
Interest accrued 1.73 1.93
Unpaid dividend * 224.13 209.00
Unpaid matured deposits and interest accrued thereon … …
Unpaid matured debentures / bonds and interest accrued thereon ** 0.30 0.30
Others
(Includes liability in respect of cash-settled share based payments,
payable for property, plant and equipment, derivatives designated
as hedging instruments, contingent consideration on business
combination etc.) 1586.69 1280.27
TOTAL 1812.85 1491.50

* Represents dividend amounts either not claimed or kept in abeyance in accordance with Section 126 of the Companies Act, 2013
or such amounts in respect of which Prohibitory / Attachment Orders are on record with the Company.
** Represents amounts which are subject matter of a pending legal dispute with a bank for which the Company has filed a suit.

As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Current Non-Current Current Non-Current

18. Provisions

Provision for employee benefits [Refer Note 28(v)]

Retirement benefits 58.18 151.14 167.23 129.05
Other benefits 21.38 69.62 26.78 58.16
Provision for standard assets – 0.29 – 0.29

TOTAL 79.56 221.05 194.01 187.50

274 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
As at As at
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

19. Other liabilities

Non-current
Advances received from customers* 36.43 15.54

TOTAL 36.43 15.54

Current
Statutory liabilities 3718.24 3368.46
Advances received from customers* 1278.17 811.03
Others (includes deferred revenue, accruals, customer deposits etc.) 119.62 114.91

TOTAL 5116.03 4294.40

* Includes revenue received in advance.

20. Current borrowings

Secured
Loans from Banks
Cash credit facilities* – 3.88

Unsecured
Current maturities of long-term debt (Refer Note 16) 0.74 0.35

TOTAL 0.74 4.23

* Cash credit facilities are secured by hypothecation of certain property, plant and equipment and current assets, both present
and future.

21A. Income Tax Assets (Net)

Income Tax Assets (net of provisions) 42.30 33.04

TOTAL 42.30 33.04

21B. Current Tax liabilities (Net)

Current taxation (net of advance payment) 687.09 332.75

TOTAL 687.09 332.75

ITC Limited REPORT AND ACCOUNTS 2022 275

Notes to the Consolidated Financial Statements
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

22A. Revenue from operations

Sale of Products 60566.82 49863.29

Sale of Services 4051.41 2971.86
Gross Revenue from sale of products and services*
[including Excise Duty / National Calamity Contingent Duty / Health Risk Tax
of ` 4489.67 Crores (2021 - ` 3767.70 Crores)] 64618.23 52835.15
Other Operating Revenues# 586.73 319.97

TOTAL 65204.96 53155.12

* Net of sales returns and damaged stocks.

# Includes Government grants of ` 275.87 Crores (2021 - ` 51.94 Crores) on account of Fiscal and Exports incentives, etc.

22B. Gross revenue from sale of products and services*

FMCG
– Cigarettes etc. 26158.31 22557.32
– Branded Packaged Food Products 13199.59 12244.28
– Others (Education and Stationery Products,
Personal Care Products, Safety Matches, Agarbattis, Apparel etc.) 2793.53 2492.78
Hotels
– Income from Sale of Services 1341.02 659.76
Agri Business
– Unmanufactured Tobacco 1647.25 1313.74
– Other Agri Products and Commodities
(Wheat, Rice, Soya, Spices, Coffee, Aqua etc.) 10544.76 6688.13
Paperboards, Paper and Packaging
– Paperboards and Paper 5576.31 4011.25
– Printed Materials 627.48 538.58
Others
– Others 2729.98 2329.31

TOTAL 64618.23 52835.15

* Net of sales returns and damaged stocks.

276 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

23. Other income

Interest income 1082.63 1297.91

Dividend income 0.01 0.07
Other non-operating income 131.16 130.93
Other gains and losses 622.55 1203.65

TOTAL 1836.35 2632.56

Interest income:
a) Deposits with banks etc. - carried at amortised cost 227.67 362.04
b) Financial assets:
– mandatorily measured at FVTPL 105.37 136.61
– measured at amortised cost 741.72 701.80
– measured at FVTOCI 3.79 –
c) Others (from statutory authorities etc.) 4.08 97.46

TOTAL 1082.63 1297.91

Dividend income:
a) Equity instruments measured at FVTOCI held at the end of
reporting period 0.01 0.02
b) Other investments – 0.05

TOTAL 0.01 0.07

Other gains and losses:

Net foreign exchange gain / (loss) 52.21 (1.16)
Net gain / (loss) arising on financial instruments mandatorily
measured at FVTPL* 570.34 1200.14
Impairment of investment in joint venture – 4.67

TOTAL 622.55 1203.65

* Includes ` 195.72 Crores (2021 - ` 365.29 Crores) being net gain / (loss) on sale of investments.

24. Employee benefits expense

Salaries and wages 4327.05 3931.11

Contribution to Provident and other funds 253.11 273.42
Share based payments to employees [Includes cash-settled
share based payments ` 29.46 Crores (2021 - ` 30.50 Crores)] 62.63 56.77
Staff welfare expenses 258.86 214.10
4901.65 4475.40
Less: Recoveries made / reimbursements received 11.10 12.07

TOTAL 4890.55 4463.33

ITC Limited REPORT AND ACCOUNTS 2022 277

Notes to the Consolidated Financial Statements
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

25. Finance costs

Interest expense:
– On lease liabilities 21.12 22.28
– On financial liabilities measured at amortised cost 4.21 2.94
– Others 14.03 19.36

TOTAL 39.36 44.58

26. Other expenses

Power and fuel 889.77 699.56

Consumption of stores and spare parts 361.37 273.71
Contract processing charges 859.17 736.18
Rent 213.77 232.85
Rates and taxes 130.80 94.00
Insurance 158.42 160.31
Repairs
– Buildings 63.34 50.86
– Machinery 274.81 237.53
– Others 58.89 44.63
Maintenance and upkeep 265.38 239.24
Outward freight and handling charges 1652.01 1337.98
Warehousing charges 229.52 184.11
Advertising / Sales promotion 995.62 1089.64
Market research 162.75 122.44
Design and product development 36.49 46.03
Hotel reservation / Marketing expenses 28.10 15.10
Retail accessories 207.57 135.03
Brokerage and discount - sales 23.55 15.33
Commission to selling agents 20.43 16.55
Doubtful and bad debts 14.98 29.93
Doubtful and bad advances, loans and deposits 0.93 33.42
Bank and credit card charges 20.63 13.39
Information technology services 192.83 163.49
Travelling and conveyance 235.29 187.27
Training and development 18.42 15.75
Legal expenses 31.36 22.32
Consultancy / Professional fees 480.53 360.25
Postage, telephone etc. 28.01 27.79
Printing and stationery 12.91 10.53
(Gain) / Loss on sale of property, plant and equipment - Net (55.89) 55.61
Loss on sale of stores and spare parts - Net 4.71 5.03
Miscellaneous expenses 1117.59 1019.45
TOTAL 8734.06 7675.31

278 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements
For the year ended For the year ended
31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

27. Income tax expenses

A. Amount recognised in profit or loss

Current tax
Income tax for the year 5280.88 4387.06
Adjustments / (credits) related to previous years - Net 25.70 76.68
Total current tax 5306.58 4463.74
Deferred tax
Deferred tax for the year (33.72) 172.10
Adjustments / (credits) related to previous years - Net (32.76) (77.97)
MAT credit entitlement (2.76) (2.58)
Total deferred tax (69.24) 91.55
TOTAL 5237.34 4555.29

B. Amount recognised in other comprehensive income

The tax (charge) / credit arising on income and expenses recognised in other comprehensive income is as follows:
On items that will not be reclassified to profit or loss
Remeasurement gains / (losses) on defined benefit plans (8.12) (1.43)
Related to designated portion of hedging instruments in cash flow hedges 3.00 1.67
Equity instruments through other comprehensive income – (1.62)
(5.12) (1.38)
On items that will be reclassified to profit or loss
Related to designated portion of hedging instruments in cash flow hedges (3.72) (10.26)
Debt instruments through other comprehensive income (0.93) –
(4.65) (10.26)
TOTAL (9.77) (11.64)

C. Amount recognised directly in equity

The income tax (charged) / credited directly to equity during the year is as follows:
Deferred tax
Arising on gains / (losses) of hedging instruments in cash flow hedges
transferred to the initial carrying amounts of hedged items 2.44 1.26
TOTAL 2.44 1.26

D. Reconciliation of effective tax rate

The income tax expense for the year can be reconciled to the accounting profit as follows:
Profit before tax 20740.47 17938.17
Income tax expense calculated @ 25.168% (2021: 25.168%) 5219.97 4514.66
Effect of tax relating to uncertain tax positions 27.58 26.37
Effect of different tax rate on certain items (82.89) (81.21)
Difference in tax rates of subsidiary companies 43.30 38.75
Effect of income not taxable (90.77) (89.01)
Other differences 123.83 147.02
TOTAL 5241.02 4556.58
Adjustments recognised in the current year in relation to the
current tax of prior years (3.68) (1.29)
Income tax recognised in profit or loss 5237.34 4555.29

The tax rate of 25.168% (22% + surcharge @ 10% and cess @ 4%) used for the year 2021-22 and 2020-21 is the corporate tax rate applicable on
taxable profits under the Income-tax Act, 1961.

ITC Limited REPORT AND ACCOUNTS 2022 279

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements

(i) Earnings per share: 2022 2021

Earnings per share has been computed as under:  

(a) Profit for the year (` in Crores) 15242.66 13161.19

(b) Weighted average number of Ordinary shares outstanding

for the purpose of basic earnings per share 12,31,65,71,748 12,30,12,07,984

(c) Effect of potential Ordinary shares on Employee

Stock Options outstanding 54,47,370 12,73,424

(d) Weighted average number of Ordinary shares in computing diluted earnings

per share [(b) + (c)] 12,32,20,19,118 12,30,24,81,408

(e) Earnings per share on profit for the year

(Face Value ` 1.00 per share)

– Basic [(a) / (b)] ` 12.37 ` 10.70

– Diluted [(a) / (d)] ` 12.37 ` 10.70

(ii) (a) The subsidiaries (which along with ITC Limited, the parent, constitute the Group) considered in the preparation of these
Consolidated Financial Statements are:

Name Country of Percentage of Percentage

Incorporation ownership interest of ownership
as at interest as at
31st March, 2022 31st March, 2021

ITC Infotech India Limited India 100 100

ITC Infotech Limited

UK 100 100
(a 100% subsidiary of ITC Infotech India Limited)

ITC Infotech (USA), Inc.

USA 100 100
(a 100% subsidiary of ITC Infotech India Limited)

Indivate Inc.
USA 100 100
[a 100% subsidiary of ITC Infotech (USA), Inc.]

Surya Nepal Private Limited Nepal 59 59

Technico Agri Sciences Limited India 100 100

Technico Pty Limited Australia 100 100

Technico Technologies Inc.

Canada 100 100
(a 100% subsidiary of Technico Pty Limited)

Technico Asia Holdings Pty Limited

Australia 100 100
(a 100% subsidiary of Technico Pty Limited)

Technico Horticultural (Kunming) Co. Limited

China 100 100
(a 100% subsidiary of Technico Asia Holdings Pty Limited)

Srinivasa Resorts Limited India 68 68

Fortune Park Hotels Limited India 100 100

280 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

Name Country of Percentage of Percentage

Incorporation ownership interest of ownership
as at interest as at
31st March, 2022 31st March, 2021

Landbase India Limited India 100 100

Bay Islands Hotels Limited India 100 100

WelcomHotels Lanka (Private) Limited Sri Lanka 100 100

Russell Credit Limited India 100 100

Greenacre Holdings Limited

(a 100% subsidiary of Russell Credit Limited) India 100 100

Wimco Limited* India 100 98.21

Gold Flake Corporation Limited India 100 100

ITC Investments & Holdings Limited India 100 100

MRR Trading & Investment Company Limited

(a 100% subsidiary of ITC Investments & Holdings Limited) India 100 100

North East Nutrients Private Limited India 76 76

Prag Agro Farm Limited India 100 100

Pavan Poplar Limited India 100 100

ITC IndiVision Limited India 100 100

* Wimco Limited became a wholly owned subsidiary of the Company with effect from 29th July, 2021, consequent to reduction of
equity share capital of that company becoming effective upon receipt of necessary approvals.
 The financial statements of all subsidiaries, considered in the Consolidated Accounts, are drawn upto 31st March other than for
Surya Nepal Private Limited where it is upto 14th March, based on the local laws of Nepal where the company is incorporated.
(b) Interests in Joint Ventures:
The Group’s interests in jointly controlled entities (incorporated Joint Ventures) are:

Name Country of Percentage Percentage of

Incorporation of ownership ownership
interest as at interest as at
31st March, 2022 31st March, 2021
Espirit Hotels Private Limited India 26 26
Logix Developers Private Limited India 27.90 27.90
ITC Essentra Limited
India 50 50
(a joint venture of Gold Flake Corporation Limited)
Maharaja Heritage Resorts Limited India 50 50

The financial statements of all the Joint Ventures, considered in the Consolidated Accounts, are drawn upto 31st March.

ITC Limited REPORT AND ACCOUNTS 2022 281

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

(c) Investments in Associates:

The Group’s Associates are:

Name Country of Percentage of Percentage

Incorporation ownership of ownership
interest as at interest as at
31st March, 2022 31st March, 2021

Gujarat Hotels Limited India 45.78 45.78

International Travel House Limited India 48.96 48.96

Russell Investments Limited* India 25.43 25.43

Divya Management Limited* India 33.33 33.33

Antrang Finance Limited* India 33.33 33.33

ATC Limited
India 47.50 47.50
(an associate of Gold Flake Corporation Limited)

Delectable Technologies Private Limited India 27.34# 20.06#

*associates of Russell Credit Limited

# on a fully diluted basis

The financial statements of all Associates, considered in the Consolidated Accounts, are drawn upto 31st March.

(d) These Consolidated Financial Statements are based, in so far as they relate to amounts included in respect of
subsidiaries, associates and joint ventures on the audited financial statements prepared for consolidation in accordance
with the requirements of Indian Accounting Standard - 110 (Ind AS 110) on “Consolidated Financial Statements” and
Indian Accounting Standard - 28 (Ind AS 28) on “Investments in Associates and Joint Ventures” by each of the included
entities other than in respect of a joint venture Logix Developers Private Limited which has been considered on the
basis of financial statements as certified by Logix Developers Private Limited’s management and provided to the
Company.

(iii) Contingent liabilities and commitments:

Contingent liabilities:
(a)

Claims against the Group not acknowledged as debts ` 946.98 Crores (2021 - ` 920.32 Crores), including interest
on claims, where applicable, estimated to be ` 295.25 Crores (2021 - ` 266.80 Crores), including share of associates
` 0.15 Crore (2021 - ` 0.15 Crore). These comprise:

E
 xcise duty, VAT / sales taxes, GST and other indirect taxes claims disputed by the Group relating to issues of
applicability and classification aggregating ` 616.65 Crores (2021 - ` 627.95 Crores), including interest on claims,
where applicable, estimated to be ` 272.19 Crores (2021 - ` 250.34 Crores), including share of associates
` 0.12 Crore (2021 - ` 0.12 Crore).

L
 ocal Authority taxes / cess / royalty on property, utilities etc. claims disputed by the Group relating to issues of applicability
and determination aggregating ` 238.39 Crores (2021 - ` 233.27 Crores), including interest on claims, where applicable,
estimated to be ` 11.22 Crores (2021- ` 5.40 Crores) including share of associates ` 0.03 Crore (2021 - ` 0.03 Crore).

T
 hird party claims arising from disputes relating to contracts aggregating ` 29.37 Crores (2021 - ` 32.55 Crores), including
interest on claims, where applicable, estimated to be ` 0.10 Crore (2021 - ` 0.88 Crore).

282 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

O
 ther matters aggregating ` 62.57 Crores (2021 - ` 26.55 Crores), including interest on other matters, where
applicable, estimated to be ` 11.74 Crores (2021 - ` 10.18 Crores).
In respect of Surya Nepal Private Limited (SNPL), Excise, Income Tax and VAT authorities issued Show Cause
Notices (SCNs) and raised demands to recover taxes for different years on theoretical production of cigarettes. In
all these proceedings, the authorities applied an input-output ratio allegedly submitted by SNPL in the year 1990-91
and arrived at a theoretical production and demanded tax / duty on the differential production / turnover. This, despite
the fact that SNPL’s cigarette factory was under ‘physical control’ of the Excise authorities and cigarettes produced
were duly accounted for and certified as such by the Excise authorities.
The Revenue Authorities for the first time raised excise demands for the financial years 1993-94 and 1994-95,
claiming that SNPL could have produced more cigarettes according to the input-output ratio submitted in the year
1990-91. SNPL challenged these excise demands before the Hon’ble Supreme Court of Nepal through a writ
petition. A division bench of the Hon’ble Supreme Court of Nepal decided the matter in favour of SNPL (the “Division
Bench Judgement”) and rejected the above basis of theoretical production. The Ministry of Finance of Nepal filed
a review petition before the Full Bench of Hon’ble Supreme Court of Nepal seeking review of the judgement of
Division Bench. The Full Bench after hearing both the sides at length upheld the judgement of Division Bench by its
order dated October 29, 2009.
Similar demands had been raised for other financial years viz., Excise Demands for FY 1998-99 to FY 2002-03 and
Income Tax Demand for FY 2001-02, which were also challenged by SNPL before the Hon’ble Supreme Court of
Nepal by way of writ petitions and the Court was pleased to allow all the writ petitions setting aside the demands.
Further, the Inland Revenue Department had decided administrative review petitions in favour of SNPL setting
aside Value Added Tax demands for the financial years 2001-02 and 2007-08 and Income Tax demand for the
FY 2005-06 following the aforesaid decisions of the Hon’ble Supreme Court of Nepal.
During the pendency of the aforementioned review petition before the Hon’ble Supreme Court of Nepal and
thereafter, the Revenue Authorities raised demands and issued a SCN, in the same subject matter of theoretical
production for different years (as listed below), which were also challenged by SNPL by way of writ petitions before
Hon’ble Supreme Court of Nepal between the years 2007 to 2010:
1. Excise demand letters for ` 17.38 Crores [Nepalese Rupee (NRs.) 27.80 Crores] relating to the financial years
2003-04 to 2006-07.
2. Excise Show Cause Notice for ` 12.28 Crores (NRs. 19.65 Crores) relating to the financial year 2007-08.
3. Value Added Tax (VAT) demand letters for ` 10.93 Crores (NRs. 17.49 Crores) relating to financial years
2002-03 to 2006-07.
4. Income Tax demand letters for ` 13.45 Crores (NRs. 21.52 Crores) relating to financial years 2002-03 and 2003-04.
SNPL’s writ petitions with regard to various tax demands and a SCN mentioned hereinabove were disposed of by
the Hon’ble Supreme Court of Nepal on 15th April, 2021 holding that SNPL should avail the alternate remedy by
way of appeal to the Inland Revenue Department (IRD). SNPL is currently pursuing legal remedy in line with the
observations / directions provided in the judgement of the Hon’ble Supreme Court of Nepal.
The Management considers that all the demands listed above have no legal or factual basis; accordingly, the
Management is of the view that there is no liability that is likely to arise, particularly in light of the fact that the issue
underlying these demands has already been settled by the Hon’ble Supreme Court of Nepal in favour of SNPL.
No legal recourse is required to be pursued in respect of a Show Cause Notice relating to the financial year
2007-08, since no demand has been issued.
It is not practicable for the Group to estimate the closure of these issues and the consequential timings of cash flows,
if any, in respect of the above.

ITC Limited REPORT AND ACCOUNTS 2022 283

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

(b) Uncalled liability on investments partly paid is ` 29.74 Crores (2020 - ` 30.73 Crores).
(c) Commitments: Estimated amount of contracts remaining to be executed on capital accounts and not provided for,
including share of joint ventures ` 13.38 Crores (2021 - ` 10.26 Crores), are ` 2228.44 Crores (2021 - ` 2576.59
Crores).
(iv) Research and Development expenses for the year amount to ` 143.65 Crores (2021 - ` 131.35 Crores).
(v) The Group has adopted Indian Accounting Standard-19 (Ind AS 19) on ‘Employee Benefits’. These Consolidated Financial
Statements include the obligations as per requirement of this standard except for those subsidiaries which are incorporated
outside India who have determined the valuation / provision for employee benefits as per requirements of their respective
countries. In the opinion of the management, the impact of this deviation is not considered material.
(a) Defined Benefit Plans / Long Term Compensated Absences - As per Actuarial Valuations as on 31st March, 2022 and
recognised in the financial statements in respect of Employee Benefit Schemes:
Description of Plans
The Group makes contributions to both Defined Benefit and Defined Contribution Plans for qualifying employees. These
Plans are administered through approved Trusts, which operate in accordance with the Trust Deeds, Rules and applicable
Statutes. The concerned Trusts are managed by Trustees who provide strategic guidance with regard to the management
of their investments and liabilities and also periodically review their performance.
Provident Fund and Pension Benefits are funded, Gratuity Benefits are both funded as well unfunded; and Leave
Encashment Benefits are unfunded in nature. The Defined Benefit Pension Plans are based on employees’ pensionable
remuneration and length of service. Under the Provident Fund, Gratuity and Leave Encashment Schemes, employees are
entitled to receive lump sum benefits.
The liabilities arising in the Defined Benefit Schemes are determined in accordance with the advice of independent,
professionally qualified actuaries, using the projected unit credit method as at year end. The Group makes regular
contributions to these Defined Benefit Plans. Additional contributions are made to these plans as and when required based
on actuarial valuation.

Risk Management
The Defined Benefit Plans expose the Group to risk of actuarial deficit arising out of investment risk, interest rate risk and
salary cost inflation risk.
Investment Risk: This may arise from volatility in asset values due to market fluctuations and impairment of assets due to
credit losses. These Plans primarily invest in debt instruments such as Government securities and highly rated corporate
bonds – the valuation of which is inversely proportional to the interest rate movements.
Interest Rate Risk: The present value of Defined Benefit Plans liability is determined using the discount rate based on the
market yields prevailing at the end of reporting period on Government securities. A decrease in yields will increase the fund
liabilities and vice-versa.
Salary Cost Inflation Risk: The present value of the Defined Benefit Plan liability is calculated with reference to the future
salaries of participants under the Plan. Increase in salary might lead to higher liabilities.
These Plans have a relatively balanced mix of investments in order to manage the above risks. The investment strategy is
designed based on the interest rate scenario, liquidity needs of the Plans and pattern of investment as prescribed under
various statutes.
The Trustees regularly monitor the funding and investments of these Plans. Risk mitigation systems are in place to ensure
that the health of the portfolio is regularly reviewed and investments do not pose any significant risk of impairment. Periodic
audits are conducted to ensure adequacy of internal controls. Pension obligation of the employees is secured by purchasing
annuities thereby de-risking the Plans from future payment obligation.

284 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)
Pension Gratuity Leave Pension Gratuity Leave
Encashment Encashment
Funded Funded Unfunded Unfunded Funded Funded Unfunded Unfunded
I Components of Employer Expense
– Recognised in the Statement of
Profit and Loss
  1 Current Service Cost 45.70 38.95 0.57 14.17 50.97 42.01 0.63 14.56
  2 Past Service Cost – – – – – 0.01 0.16 –
  3 Net Interest Cost 1.87 (0.86) 0.39 8.89 0.14 (0.44) 0.49 8.33
4 Total expense recognised in the
 
Statement of Profit and Loss 47.57 38.09 0.96 23.06 51.11 41.58 1.28 22.89
– Remeasurements recognised in
 
Other Comprehensive Income
5 Return on plan assets (excluding
amounts included in net interest cost) (7.16) (6.64) – – (42.53) (4.68) – –
6 Effect of changes in demographic
assumptions 4.46 (1.57) (0.08) 0.09 – (0.15) (0.04) –
7 Effect of changes in financial
assumptions (4.24) (8.35) (0.24) (0.23) – – – –
8 Changes in asset ceiling (excluding
interest income) – – – – – – – –
9 Effect of experience adjustments (37.64) 19.32 0.04 10.18 66.69 (0.53) (0.59) 4.27
10 Total re-measurements included in
Other Comprehensive Income (44.58) 2.76 (0.28) 10.04 24.16 (5.36) (0.63) 4.27
11 Total defined benefit cost
recognised in the Statement of Profit
and Loss and Other Comprehensive
Income (4+10) 2.99 40.85 0.68 33.10 75.27 36.22 0.65 27.16
The current service cost and net interest cost for the year pertaining to Pension and Gratuity expenses have been
recognised in “Contribution to Provident and other funds” and Leave Encashment in “Salaries and wages” under Note 24.
The remeasurements of the net defined benefit liability are included in Other Comprehensive Income.

II Actual Returns 62.68 34.38 – – 94.98 31.08 – –

III Net Asset / (Liability) recognised
in Balance Sheet
  1 Present Value of Defined Benefit
Obligation 929.62 478.30 6.60 164.55 972.33 458.12 6.87 153.11
  2 Fair Value of Plan Assets 916.94 457.31 – – 861.78 436.23 – –
3 Status [Surplus / (Deficit)] (12.68) (20.99) (6.60) (164.55) (110.55) (21.89) (6.87) (153.11)
4 Restrictions on Asset Recognised – – – – – – – –
5 Net (Liability) recognised in Balance
Sheet (17.18) (20.99) (6.60) (164.55) (113.32) (22.98) (6.87) (153.11)
a. Current (15.08) (17.15) (0.60) (25.35) (110.70) (21.18) (0.32) (35.03)
b. Non-Current (2.10) (3.84) (6.00) (139.20) (2.62) (1.80) (6.55) (118.08)
6. Net Asset recognised in Balance Sheet 4.50 – – – 2.77 1.09 – –
a. Current 4.50 – – – 2.77 1.09 – –
b. Non-Current – – – – – – – –

ITC Limited REPORT AND ACCOUNTS 2022 285

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment

Funded Funded Unfunded Unfunded Funded Funded Unfunded Unfunded

IV Change in Defined Benefit

Obligation (DBO)
  1 Present Value of DBO at the
beginning of the year 972.33 458.12 6.87 153.11 880.50 432.79 6.56 140.56
  2 Current Service Cost 45.70 38.95 0.57 14.17 50.97 42.01 0.63 14.56
  3 Past Service Cost – – – – – 0.01 0.16 –
4 Interest Cost 57.39 26.88 0.39 8.89 52.59 25.96 0.49 8.33
5 Re-measurement Gains / (Losses):
a. Effect of changes in demographic
assumptions 4.46 (1.57) (0.08) 0.09 – (0.15) (0.04) –
b. Effect of changes in financial
assumptions (4.24) (8.35) (0.24) (0.23) – – – –
c. Changes in asset ceiling (excluding
interest income) – – – – – – – –
d. Effect of experience adjustments (37.64) 19.32 0.04 10.18 66.69 (0.53) (0.59) 4.27
6 Curtailment Cost / (Credits) – – – – – – – –
7 Settlement Cost / (Credits) – – – – – – – –
8 Liabilities assumed in business
combination – – – – – 2.59 – –
9 Effects of transfer In / (Out) (0.07) – – – (0.06) – – –
  10 Benefits Paid (108.31) (55.05) (0.95) (21.66) (78.36) (44.56) (0.34) (14.61)
  11 Present Value of DBO at the end of
the year 929.62 478.30 6.60 164.55 972.33 458.12 6.87 153.11

As at 31st March, 2022 As at 31st March, 2021

(` in Crores) (` in Crores)

V Best Estimate of Employers’ Expected

Contribution for the next year
– Pension 72.02 170.07
– Gratuity 66.02 76.60

286 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
Funded Funded Unfunded Unfunded Funded Funded Unfunded Unfunded

VI Change in Fair Value of Assets

1 Plan Assets at the
beginning of the year 861.78 436.23 – – 816.49 400.49 – –
2 Assets acquired in Business
Combination – – – – – 1.88 – –
3 Interest Income 55.52 27.74 – – 52.45 26.40 – –
4 Re-measurement Gains / (Losses) on
plan assets 7.16 6.64 – – 42.53 4.68 – –
5 Actual Group Contributions 100.86 41.75 – – 28.73 47.34 – –
6 Benefits Paid (108.31) (55.05) – – (78.36) (44.56) – –
7 Effects of transfer in / (out) (0.07) – – – (0.06) – – –
8 Plan Assets at the end of the year 916.94 457.31 – – 861.78 436.23 – –

As at 31st March, 2022 As at 31st March, 2021

Discount Rate Discount Rate

(%) (%)

VII Actuarial Assumptions

1 Pension 6.75 6.25
2 Gratuity 6.75 6.25
3 Leave Encashment 6.75 6.25
The estimates of future salary increases, generally between 4% to 5.5% for the Company (being the largest component of
the Group), considered in actuarial valuations take account of inflation, seniority, promotion and other relevant factors such
as supply and demand factors in the employment market.

As at 31st March, 2022 As at 31st March, 2021

VIII Major Category of Plan Assets as a %
of the Total Plan Assets
1 Government Securities / Special Deposit with RBI 17.67% 23.83%
2 High Quality Corporate Bonds 10.94% 11.31%
3 Insurer / Citizen Investment Trust Managed Funds* 62.88% 53.90%
4 Mutual Funds 4.36% 3.49%
5 Cash and Cash Equivalents 4.15% 5.67%
6 Term Deposits – 1.80%

* In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of each
major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed.

The fair value of Government Securities, Corporate Bonds and Mutual Funds are determined based on quoted market prices in
active markets. The employee benefit plans do not hold any securities issued by the participating companies.

ITC Limited REPORT AND ACCOUNTS 2022 287

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

IX Basis used to determine the Expected Rate of Return on Plan Assets

The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario.
In order to protect the capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.

For the year ended For the year ended

31st March, 2022 31st March, 2021
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
Funded Funded Unfunded Unfunded Funded Funded Unfunded Unfunded
X Net Asset / (Liability) recognised in
Balance Sheet (including experience
adjustment impact)
1 Present Value of Defined Benefit
929.62 478.30 6.60 164.55 972.33 458.12 6.87 153.11
Obligation
2 Fair Value of Plan Assets 916.94 457.31 – – 861.78 436.23 – –
3 Status [Surplus / (Deficit)] (12.68) (20.99) (6.60) (164.55) (110.55) (21.89) (6.87) (153.11)
4 Experience Adjustment of Plan Assets
7.16 6.64 – – 42.53 4.68 – –
[Gain / (Loss)]
5 Experience Adjustment of obligation
(37.64) 19.32 0.04 10.18 66.69 (0.53) (0.59) 4.27
[(Gain) / Loss]

XI Sensitivity Analysis
The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the
hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other
assumptions constant, in practice such assumptions rarely change in isolation and the asset value changes may offset the
impact to some extent. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated
using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the
Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of
the Sensitivity Analysis from previous year.

 (` in Crores)
DBO as at 31st March, 2022 DBO as at 31st March, 2021
1 Discount Rate + 100 basis points 1491.38 1499.80
2 Discount Rate - 100 basis points 1678.51 1693.18
3 Salary Increase Rate + 1% 1669.68 1681.41
4 Salary Increase Rate – 1% 1493.21 1508.45

Maturity Analysis of the Benefit Payments

1 Year 1 259.19 260.86

2 Year 2 179.57 195.32
3 Year 3 196.14 128.97
4 Year 4 199.15 132.06
5 Year 5 179.46 153.69
6 Next 5 Years 528.13 485.30

(b) Amounts towards Defined Contribution Plans have been recognised under “Contribution to Provident and other funds”
in Note 24: - ` 167.45 Crores (2021 - ` 180.73 Crores).

288 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

(vi) Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Statements
to Schedule III to the Companies Act, 2013:

Net Assets Share in Profit or (Loss) Share in Other Share in Total

Comprehensive Income Comprehensive Income

Name of the Entity As % of Amount As % of Amount As % of Amount As % of Amount

Consolidated (` in Crores) Consolidated (` in Crores) Consolidated (` in Crores) Consolidated (` in Crores)
Net Assets Profit or Other Total
(Loss) Comprehensive Comprehensive
Income Income

Parent

ITC Limited 91.99% 57786.02 91.60% 14202.64 711.36% 573.86 94.81% 14776.50

Subsidiaries

Indian

1 Russell Credit
Limited 1.43% 896.63 0.22% 33.46 108.26% 87.33 0.78% 120.79

2 Greenacre
Holdings Limited 0.10% 63.01 0.01% 1.79 (0.01%) (0.01) 0.01% 1.78

3 Wimco Limited ... 2.65 ... (0.43) (0.02%) (0.02) ... (0.45)

4 Prag Agro Farm

Limited ... 0.98 ... (0.05) – – ... (0.05)

5 Pavan Poplar
Limited ... 0.33 ... (0.04) ... … ... (0.04)

6 Technico Agri
Sciences Limited 0.16% 99.56 0.28% 43.04 ... … 0.28% 43.04

7 Srinivasa Resorts
Limited 0.10% 61.29 (0.01%) (1.11) 0.02% 0.02 (0.01%) (1.09)

8 Fortune Park
Hotels Limited 0.03% 20.21 ... 0.18 0.12% 0.10 ... 0.28

9 Bay Islands
Hotels Limited 0.03% 19.50 0.01% 1.15 – – 0.01% 1.15

10 ITC Infotech
India Limited 0.94% 587.60 3.32% 514.24 10.59% 8.54 3.35% 522.78

11 Gold Flake
Corporation
Limited 0.04% 24.21 ... 0.33 – – ... 0.33

12 ITC Investments
& Holdings
Limited 0.01% 5.21 ... 0.01 – – ... 0.01

13 MRR Trading
& Investment
Company Limited ... 0.02 ... … – – ... …

ITC Limited REPORT AND ACCOUNTS 2022 289

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

Net Assets Share in Profit or (Loss) Share in Other Share in Total

Comprehensive Income Comprehensive Income

Name of the Entity As % of Amount As % of Amount As % of Amount As % of Amount

Consolidated (` in Crores) Consolidated (` in Crores) Consolidated (` in Crores) Consolidated (` in Crores)
Net Assets Profit or Other Total
(Loss) Comprehensive Comprehensive
Income Income

Indian

14 Landbase India
Limited 0.39% 242.71 0.02% 2.85 0.04% 0.03 0.02% 2.88

15 North East
Nutrients Private
Limited 0.14% 87.87 0.07% 10.97 (0.06%) (0.05) 0.07% 10.92

16 ITC IndiVision
Limited 0.24% 149.83 (0.01%) (0.78) – – (0.01%) (0.78)

Foreign

1 Technico Pty
Limited 0.08% 49.39 0.03% 5.07 2.57% 2.07 0.05% 7.14

2 Technico
Technologies Inc. ... 1.67 ... (0.20) – – ... (0.20)

3 Technico Asia
Holdings Pty
Limited – – – – – – – –

4 Technico
Horticultural
(Kunming) Co.
Limited 0.03% 20.55 0.02% 2.92 – – 0.02% 2.92

5 WelcomHotels
Lanka (Private)
Limited 2.11% 1323.29 0.08% 11.77 (737.76%) (595.15) (3.74%) (583.38)

6 ITC Infotech
Limited 0.17% 106.81 0.05% 7.99 – – 0.05% 7.99

7 ITC Infotech
(USA), Inc. 0.43% 270.16 0.12% 18.71 – – 0.12% 18.71

8 Indivate Inc. ... 0.96 ... 0.10 – – ... 0.10

9 Surya Nepal
Private Limited 0.58% 365.87 2.39% 370.57 0.41% 0.33 2.38% 370.90

Non-Controlling
Interest in all
subsidiaries 0.58% 366.30 1.68% 260.47 0.27% 0.22 1.67% 260.69

290 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

Net Assets Share in Profit or (Loss) Share in Other Share in Total

Comprehensive Income Comprehensive Income

Name of the Entity As % of Amount As % of Amount As % of Amount As % of Amount

Consolidated (` in Crores) Consolidated (` in Crores) Consolidated (` in Crores) Consolidated (` in Crores)
Net Assets Profit or Other Total
(Loss) Comprehensive Comprehensive
Income Income
Associates
Indian
1 International
Travel House
Limited 0.09% 59.20 (0.03%) (5.24) 0.31% 0.25 (0.03%) (4.99)
2 Gujarat Hotels
Limited 0.03% 17.95 0.01% 1.24 – – 0.01% 1.24
3 Russell
Investments
Limited 0.04% 26.56 0.01% 0.94 3.83% 3.09 0.03% 4.03
4 Divya
Management
Limited 0.01% 7.57 ... 0.09 ... … ... 0.09
5 Antrang Finance
Limited 0.01% 4.94 ... 0.02 ... … ... 0.02
6 ATC Limited 0.01% 7.12 ... 0.17 0.04% 0.03 ... 0.20
7 Delectable
Technologies
Private Limited 0.01% 5.16 ... (0.28) 0.01% 0.01 ... (0.27)
Joint Ventures
Indian
ITC Essentra
1
Limited 0.15% 94.57 0.13% 20.54 0.02% 0.02 0.13% 20.56
Maharaja
2 Heritage Resorts
Limited ... … – – – – – –
Espirit Hotels
3
Private Limited 0.07% 46.17 ... … – – ... …
Logix Developers
4
Private Limited – – – – – – – –
Total 100.00% 62821.87 100.00% 15503.13 100.00% 80.67 100.00% 15583.80

(vii) During the year, the Scheme for Amalgamation of Hobbits International Foods Private Limited (Hobbits) and Sunrise
Sheetgrah Private Limited (Sheetgrah) with the Company was sanctioned by the Hon’ble National Company Law Tribunal,
Allahabad Bench, which became effective from 12th August, 2021. The fair value of assets and liabilities of Hobbits and
Sheetgrah have been recorded in accordance with Ind AS 103 - ‘Business Combinations’. The financial statements,
therefore, reflect the effect of the Scheme from 27th July, 2020 (being the appointed date) and figures for the previous
periods have been restated, wherever necessary.

ITC Limited REPORT AND ACCOUNTS 2022 291

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

(viii) Leases:

As a Lessee

The Group’s significant leasing arrangements are in respect of operating leases for land, buildings (comprising licensed
properties, residential premises, office premises, stores, warehouses etc.) and plant & equipment. These arrangements
generally range between 2 years and 10 years, except for certain land and building leases where the lease term ranges
up to 99 years. The lease arrangements have extension / termination options exercisable by either parties which may
make the assessment of lease term uncertain. While determining the lease term, all facts and circumstances that create
an economic incentive to exercise an extension option, or not exercise a termination option are considered.

The amount of Right of Use Assets and Lease Liabilities recognised in the Balance Sheet are disclosed in Note 3G and
Note 17A respectively. The total cash outflow for leases for the year is ` 376.34 Crores (2021 - ` 394.05 Crores) [including
payments of ` 295.32 Crores (2021 - ` 316.55 Crores) in respect of short-term / low-value leases and variable lease
payments of ` 0.79 Crore (2021 - ` 0.40 Crore)].

The sensitivity of variable lease payments and effect of extension / termination options not included in measurement of
lease liabilities is not material.

The undiscounted maturities of lease liabilities over the remaining lease term is as follows:

 (` in Crores)

Term As at 31st March, 2022 As at 31st March, 2021

Not later than three years 154.66 164.57

Later than three years and not later than ten years 115.37 127.19

Later than ten years and not later than twenty-five years 118.03 123.06

Later than twenty-five years and not later than fifty years 98.43 104.28

Later than fifty years 27.27 28.18

As a Lessor

The Group has leased out its investment properties etc. under operating lease for periods ranging upto 5 years. Lease
payments are structured with periodic escalations consistent with the prevailing market conditions. There are no variable
lease payments. The details of income from such leases are disclosed under Note 3C and Note 23. The Group does
not have any risk relating to recovery of residual value of investment properties etc. at the end of leases considering the
business requirements and other alternatives.

The undiscounted minimum lease payments to be received over the remaining non-cancellable term on an annual basis
are as follows:
 (` in Crores)

Term As at 31st March, 2022 As at 31st March, 2021

1st year 16.67 90.92

2nd year 0.57 16.67

3 year
rd
Nil 0.57

4th year Nil Nil

5th year Nil Nil

Beyond 5 years Nil Nil

292 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

(ix) Information in respect of Options granted under the Company’s Employee Stock Option Schemes (‘Schemes’):

Sl. ITC Employee Stock Option ITC Employee Stock Option

No. Scheme - 2006 Scheme - 2010

1. Date of Shareholders’ approval : 22-01-2007 23-07-2010

2. Total number of Options : Options equivalent to Options equivalent to

approved under the Schemes 37,89,18,503 Ordinary 55,60,44,823 Ordinary
(Adjusted for Bonus Shares of ` 1.00 each Shares of ` 1.00 each
Shares issued in terms of
Shareholders’ approval)

3. Vesting Schedule : The vesting period for conversion of Options is as follows:

On completion of 12 months from the date of grant of the Options : 30% vests
On completion of 24 months from the date of grant of the Options : 30% vests
On completion of 36 months from the date of grant of the Options : 40% vests

4. Pricing Formula : The Pricing Formula, as approved by the Shareholders of the Company, is such price,
as determined by the Nomination & Compensation Committee, which is no lower than
the closing price of the Company’s Share on the National Stock Exchange of India
Limited (‘the NSE’) on the date of grant, or the average price of the Company’s Share in
the six months preceding the date of grant based on the daily closing price on the NSE,
or the ‘market price’ as defined from time to time under the Securities and Exchange
Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Options have been granted at ‘market price’ as defined under the aforesaid
Regulations.

5. Maximum term of Options : Five years - the exercise period commences from the date of vesting of the Options
granted granted and expires at the end of five years from the date of vesting.

6. Source of Shares : Primary

7. Variation in terms of Options : None

8. Method used for accounting : The employee compensation cost has been calculated using the fair value method
of share-based payment of accounting for Options issued under the Company’s Employee Stock Option
plans Schemes. The employee compensation cost as per fair value method for the
financial year 2021-22 is ` 33.51 Crores (2021 - ` 26.66 Crores), out of which ` 33.17
Crores (2021 - ` 26.27 Crores) relate to employee benefits expense, ` 0.23 Crore
(2021 - ` 0.20 Crore) to property, plant and equipment and ` 0.11 Crore (2021 - ` 0.19
Crore) for group entities.

9. Nature and extent of : In addition to the terms and conditions provided in the table under Serial Nos. (3) to (5)
employee share based hereinbefore, each Option entitles the holder thereof to apply for and be allotted ten
payment plans that existed Ordinary Shares of the Company of ` 1.00 each upon payment of the exercise price
during the period including during the exercise period.
the general terms and
conditions of each plan

10. Weighted average exercise : Weighted average exercise price per Option : ` 2,333.96
prices and weighted average Weighted average fair value per Option : ` 429.36
fair values of Options whose
exercise price either equals
or exceeds or is less than the
market price of the stock

ITC Limited REPORT AND ACCOUNTS 2022 293

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

Sl. ITC Employee Stock Option ITC Employee Stock Option

No. Scheme - 2006 Scheme - 2010
11. Option movements during the year :
a) Options outstanding at the : 4,12,588 2,87,68,704
beginning of the year
b) Options granted during the year : 55,950 11,65,650
c) Options cancelled and lapsed : 60,146 61,32,845
during the year
d) Options vested and : 31,710 5,90,511
exercisable during the year
(net of Options lapsed and
exercised)
e) Options exercised during : 28,416 14,12,754
the year
f) Number of Ordinary Shares of : 2,84,160 1,41,27,540
` 1.00 each arising as a result
of exercise of Options during
the year
g) Options outstanding at the end : 3,79,976 2,23,88,755
of the year (a+b-c-e)
h) Options exercisable at the end : 2,46,416 2,06,07,350
of the year
i) Money realised by exercise of : 5.61 286.21
the Options during the year
(` in Crores)
12. Summary of the status of
Options:
Particulars As at 31st March, 2022 As at 31st March, 2021
No. of Options Weighted Average No. of Options Weighted Average
Exercise Prices (`) Exercise Prices (`)
Outstanding at the beginning of : 2,91,81,292 2402.40 3,45,80,543 2364.54
the year
Add: Granted during the year : 12,21,600 2333.96 7,37,900 1699.20
Less: Lapsed during the year : 61,92,991 2230.80 44,75,852 2236.28
Less: Exercised during the year : 14,41,170 2024.88 16,61,299 1749.52
Outstanding at the end of the year : 2,27,68,731 2469.30 2,91,81,292 2402.40
Options exercisable at the end : 2,08,53,766 2495.72 2,78,49,356 2416.25
of the year
13. Weighted average share price of : The weighted average share price of Shares, arising upon exercise of Options during the
Shares arising upon exercise of year ended 31st March, 2022 was ` 212.94 (2021 - ` 198.13). This was based on the
Options closing market price on NSE on the date of exercise of Options (i.e. the date of allotment
of shares by the Securityholders Relationship Committee).
14. Summary of Options outstanding, scheme-wise:
Particulars As at 31st March, 2022 As at 31st March, 2021
No. of Options Range of Weighted No. of Options Range of Weighted
Outstanding Exercise Prices (`) average Outstanding Exercise Prices (`) average
remaining remaining
contractual life contractual life
ITC Employee Stock Option : 3,79,976 1698.00 – 2885.50 3.61 4,12,588 1698.00 – 2885.50 3.45
Scheme - 2006
ITC Employee Stock Option : 2,23,88,755 1698.00 – 2885.50 1.93 2,87,68,704 1698.00 – 2885.50 2.12
Scheme - 2010

294 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

Sl. ITC Employee Stock Option ITC Employee Stock Option

No. Scheme - 2006 Scheme – 2010
15. A description of the method : The fair value of each Option is estimated using the Black Scholes Option Pricing model.
used during the year to estimate Weighted average exercise price per Option : ` 2,333.96
the fair values of Options, the
Weighted average fair value per Option : ` 429.36
weighted average exercise prices
and weighted average fair values
of Options granted
The significant assumptions used : The fair value of each Option is estimated using the Black Scholes Option Pricing model
to ascertain the above after applying the following key assumptions on a weighted average basis:
(i) Risk-free interest rate 5.59%
(ii) Expected life 4.61 years
(iii) Expected volatility 24.86%
(iv) Expected dividends 4.61%
(v) The price of the underlying shares in market at the time of Option grant ` 2,333.96
(One Option = 10 Ordinary Shares)
16. Methodology for determination of : The volatility used in the Black Scholes Option Pricing model is the annualised standard
expected volatility deviation of the continuously compounded rates of return on the stock over a period of
time. The period considered for the working is commensurate with the expected life of
the Options and is based on the daily volatility of the Company’s stock price on NSE. The
Company has incorporated the early exercise of Options by calculating expected life on
past exercise behaviour. There are no market conditions attached to the grant and vest.

(x) Information in respect of Stock Appreciation Linked Reward Plan:

Sl. Particulars Details

No.
1 Nature and extent of Stock : ITC Employee Cash Settled Stock Appreciation Linked Reward Plan (ITC ESAR Plan).
Appreciation Linked Reward Plan Under the ITC ESAR Plan, the eligible employees receive cash on vesting of SAR units,
that existed during the year along equivalent to the difference between the grant price and the market price of the share on
with general terms and conditions vesting of SAR units subject to the terms and conditions specified in the Plan.
2 Settlement Method : Cash – Settled
3 Vesting period and maximum : Over a period of five years from the date of grant in accordance with the Plan.
term of SAR granted
4 Method used to estimate the fair : Black Scholes Option Pricing model. The said model considers inputs such as Risk-free
value of SAR granted interest rate, Expected life, Expected volatility, Expected dividend, Market Price etc. The
number of SAR units outstanding as at 31st March, 2022 is 39,46,719 (2021- 52,96,190)
and the weighted average fair value at measurement date is ` 217.98 (2021 - ` 162.39)
per SAR unit.
5 Total cost recognised in the profit : The cost has been calculated using the fair value method of accounting for SAR units
or loss issued under the ITC ESAR Plan. The employee compensation cost / (reversal) as per
fair value method for the financial year 2021-22 is ` 30.01 Crores [2021 - ` 30.85 Crores];
out of which, ` 29.46 Crores [2021 - ` 30.50 Crores] relate to employee benefits expense
(Refer Note 24), ` 0.17 Crore (2021 - ` 0.07 Crore) to property, plant and equipment and
` 0.38 Crore [2021 - ` 0.29 Crore] for group entities. The amount carried in the Balance
Sheet as a non – current financial liability is ` 48.99 Crores (2021 - ` 34.33 Crores) and
as current financial liability is ` 19.10 Crores (2021 – 4.25 Crores) (Refer Note 17B).

(xi) Amount required to be spent by the Group during the year as per Section 135 read with Section 198 of the Companies Act,
2013 - ` 362.56 Crores (2021 - ` 357.17 Crores) being 2% of the average Net Profit of the Company amounting to ` 363.19 Crores less
set-off of excess CSR spend of ` 0.63 Crore pertaining to FY 2020-21.
Expenditure incurred during the year is ` 363.37 Crores (2021 - ` 357.80 Crores) comprising employee benefits expense of ` 15.92
Crores (2021 - ` 14.96 Crores) and other expenses of ` 347.45 Crores (2021 - ` 342.84 Crores), of which ` 26.01 Crores (2021 - ` 11.94
Crores) is accrued for payment as on 31st March, 2022. The above includes an amount of ` 3.90 Crores with regard to ongoing project
of FY 2021-22, which has been deposited in the Unspent CSR Account in April, 2022.

ITC Limited REPORT AND ACCOUNTS 2022 295

Notes to the Consolidated Financial Statements

28. Additional Notes to the Consolidated Financial Statements (Contd.)

Such CSR expenditure of ` 363.37 Crores (2021 - ` 357.80 Crores) excludes ` 5.85 Crores (2021 - ` 5.72 Crores) being the excess of
expenditure of salaries of CSR personnel and administrative expenses over the limit of 5% of total CSR expenditure laid down under
Rule 7(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 as applicable to individual entities.
CSR activities undertaken during the year pertains to: poverty alleviation; promoting education and skill development; promoting
healthcare including preventive healthcare; providing sanitation and drinking water; ensuring environmental sustainability; enabling
climate resilience; rural development projects; creating livelihoods for people, especially those from disadvantaged sections of society;
protection of national heritage, art and culture; preserving and promoting music; and providing relief and assistance to victims of
disasters and calamities.
(xii) Trade Payables ageing schedule:
(` in Crores)

Outstanding for following periods from due date of

payment as at 31st March, 2022
Not Due Less than 1 - 2 years 2 - 3 years More than Total
1 year 3 years

MSME 33.26 – – – – 33.26

Others 867.10 101.18 0.57 0.52 0.31 969.68
Disputed Dues MSME – – – – – –
Disputed Dues Others – – – – 0.50 0.50
TOTAL 900.36 101.18 0.57 0.52 0.81 1003.44
Accrued Payables (not due)
– MSME 68.16
– Others 3345.66
TOTAL 4417.26

(` in Crores)
Outstanding for following periods from due date of
payment as at 31st March, 2021
Not Due Less than 1 - 2 years 2 - 3 years More than Total
1 year 3 years

MSME 34.63 – – – – 34.63

Others 688.80 158.72 10.06 1.46 2.97 862.01
Disputed Dues MSME – – – – – –
Disputed Dues Others – – – – 0.77 0.77
TOTAL 723.43 158.72 10.06 1.46 3.74 897.41
Accrued Payables (not due)
– MSME 26.52
– Others 3394.80
TOTAL 4318.73

(xiii) Consequent to the devaluation in the value of the Sri Lankan Rupee, the foreign currency translation impact on
consolidating the financial statements of WelcomHotels Lanka (Private) Limited, aggregating ` 595.15 crores for the year ended
31st March, 2022, has been recognised under ‘Other Comprehensive Income’.

(xiv) The financial statements were approved for issue by the Board of Directors on 18th May, 2022.

(xv) Figures for the previous year have been re-arranged, wherever necessary, to conform to the figures of the current year.

296 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

29. Segment reporting

(` in Crores)
2022 2021
External Inter Segment Total External Inter Segment Total
1. Segment Revenue - Gross
FMCG - Cigarettes 26158.31 – 26158.31 22557.32 – 22557.32
FMCG - Others 15993.12 30.20 16023.32 14737.06 19.82 14756.88
FMCG - Total 42151.43 30.20 42181.63 37294.38 19.82 37314.20
Hotels 1341.02 6.64 1347.66 659.76 4.11 663.87
Agri Business 12192.01 4273.66 16465.67 8001.87 4880.81 12882.68
Paperboards, Paper and Packaging 6203.79 1437.83 7641.62 4549.83 1068.72 5618.55
Others 2729.98 69.23 2799.21 2329.31 64.59 2393.90
Segment Total 64618.23 5817.56 70435.79 52835.15 6038.05 58873.20
Eliminations (5817.56) (6038.05)
Gross Revenue from sale of products and services 64618.23 52835.15

2 . Segment Results
FMCG - Cigarettes 15768.45 13498.36
FMCG - Others 934.93 837.99
FMCG - Total 16703.38 14336.35
Hotels (185.23) (563.87)
Agri Business 1086.22 918.24
Paperboards, Paper and Packaging 1700.00 1098.68
Others 723.73 558.69
Segment Total 20028.10 16348.09
Eliminations 14.01 44.76
Consolidated Total 20042.11 16392.85
Unallocated corporate expenses net of unallocated income 906.84 852.32
Profit before interest etc. and taxation 19135.27 15540.53
Finance Costs 39.36 44.58
Interest earned on loans and deposits, income from current and non current
investments, profit and loss on sale of investments etc. - Net 1627.08 2449.14
Share of net profit of associates & joint ventures 17.48 (6.92)
Profit before tax 20740.47 17938.17
Tax expense 5237.34 4555.29
Profit for the year 15503.13 13382.88

3. Other Information 2022 2021

Segment Assets Segment Liabilities Segment Assets Segment Liabilities
FMCG - Cigarettes 7193.11 4855.07 7257.60 4624.33
FMCG - Others 11546.19 2258.59 11517.32 2523.00
FMCG - Total 18739.30 7113.66 18774.92 7147.33
Hotels 7470.93 807.44 7544.39 731.34
Agri Business 5202.93 1724.46 5375.51 1053.09
Paperboards, Paper and Packaging 8482.37 1326.05 7237.93 1080.24
Others 1713.01 463.17 1629.47 395.40
Segment Total 41608.54 11434.78 40562.22 10407.40
Unallocated Corporate Assets / Liabilities 35651.01 3002.90 33257.08 2717.75
Total 77259.55 14437.68 73819.30 13125.15

ITC Limited REPORT AND ACCOUNTS 2022 297

Notes to the Consolidated Financial Statements

29. Segment reporting (Contd.)

(` in Crores)
2022 2021
Capital Depreciation and Capital Depreciation and
expenditure amortization expenditure amortization
FMCG - Cigarettes 151.46 297.05 98.90 299.09
FMCG - Others 339.00 534.01 478.42 491.95
FMCG - Total 490.46 831.06 577.32 791.04
Hotels 499.56 265.77 409.54 271.03
Agri Business 215.26 82.92 58.18 77.10
Paperboards, Paper and Packaging 896.72 410.97 775.40 359.81
Others 25.45 28.45 14.84 32.04
Segment Total 2127.45 1619.17 1835.28 1531.02
Unallocated 130.83 113.24 78.01 114.57
Total 2258.28 1732.41 1913.29 1645.59

Non Cash expenditure Non Cash expenditure

other than depreciation other than depreciation
FMCG - Cigarettes 6.48 21.87
FMCG - Others 6.56 57.26
FMCG - Total 13.04 79.13
Hotels 1.42 6.94
Agri Business 3.38 0.06
Paperboards, Paper and Packaging 27.59 38.25
Others 7.35 2.33
Segment Total 52.78 126.71

GEOGRAPHICAL INFORMATION

2022 2021

1. Revenue from external customers

– Within India 50533.64 43650.26
– Outside India 14084.59 9184.89
Total 64618.23 52835.15

2. Non current assets

– Within India 27624.06 27343.35
– Outside India 1166.59 1294.94
Total 28790.65 28638.29
NOTES :
(1) The Group’s corporate strategy aims at creating multiple drivers of growth anchored on its core competencies. The Group is currently focused on four business groups : FMCG, Hotels,
Paperboards, Paper and Packaging and Agri Business. The Group’s organisational structure and governance processes are designed to support effective management of multiple businesses
while retaining focus on each one of them.
The Operating Segments have been reported in a manner consistent with the internal reporting provided to the Corporate Management Committee, which is the Chief Operating Decision Maker.
(2) The business groups comprise the following :
FMCG : Cigarettes – Cigarettes, Cigars etc.
: Others – Branded Packaged Foods Businesses (Staples & Meals; Snacks; Dairy & Beverages; Biscuits & Cakes; Chocolates, Coffee & Confectionery);
Education and Stationery Products; Personal Care Products; Safety Matches and Agarbattis; Apparel.
Hotels – Hoteliering.
Paperboards, Paper and Packaging – Paperboards, Paper including Specialty Paper and Packaging including Flexibles.
Agri Business – Agri commodities such as wheat, rice, spices, coffee, soya and leaf tobacco.
Others – Information Technology services, Branded Residences etc.
(3) The Group companies have been included in segment classification as follows:
FMCG : Cigarettes – Surya Nepal Private Limited.
: Others – Surya Nepal Private Limited and North East Nutrients Private Limited.
Hotels – Srinivasa Resorts Limited, Fortune Park Hotels Limited, Bay Islands Hotels Limited, WelcomHotels Lanka (Private) Limited and Landbase India
Limited.
Agri Business – Technico Agri Sciences Limited, Technico Pty Limited and its subsidiaries Technico Technologies Inc., Technico Asia Holdings Pty Limited,
Technico Horticultural (Kunming) Co. Limited and ITC IndiVision Limited.
Others – ITC Infotech India Limited and its subsidiaries ITC Infotech Limited, ITC Infotech (USA), Inc. and Indivate Inc., Russell Credit Limited and its
subsidiary Greenacre Holdings Limited, Wimco Limited, Pavan Poplar Limited, Prag Agro Farm Limited, ITC Investments & Holdings Limited and
its subsidiary MRR Trading & Investment Company Limited, Landbase India Limited, Gold Flake Corporation Limited and WelcomHotels Lanka
(Private) Limited.
(4) The geographical information considered for disclosure are :
– Revenue within India.
– Revenue outside India.
(5) Segment results of ‘FMCG : Others’ are after considering significant business development, brand building and gestation costs of the Branded Packaged Foods businesses and Personal Care
Products business.
(6) As stock options and stock appreciation linked reward units are granted under ITC ESOS and ITC ESARP respectively to align the interests of employees with those of shareholders and also to
attract and retain talent for the Group as a whole, the charge thereof do not form part of the segment performance reviewed by the Corporate Management Committee.
(7) The Group is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.

298
002 ITC Limited REPORT AND ACCOUNTS 2022
2021
Notes to the Consolidated Financial Statements

30. Related Party Disclosures

1. OTHER RELATED PARTIES WITH WHOM THE COMPANY Chief Financial Officer
AND ITS SUBSIDIARIES HAD TRANSACTIONS: S. Dutta
i) Associates & Joint Ventures:
Associates Company Secretary

a) Gujarat Hotels Limited R. K. Singhi

b) International Travel House Limited
Members - Corporate Management Committee
c) Divya Management Limited
S. Puri
d)
Antrang Finance Limited
N. Anand
e)
ATC Limited
f) Delectable Technologies Private Limited B. Sumant
– being associates of the Group, and R. Tandon
g) Tobacco Manufacturers (India) Limited (of which S. Dutta
the Company is an associate) H. Malik
and the subsidiaries of its ultimate parent
A. Rajput
company (British American Tobacco p.l.c.)
S. Rangrass
Joint Ventures
S. K. Singh
a) Maharaja Heritage Resorts Limited
b)
ITC Essentra Limited S. Sivakumar

ii) a) Key Management Personnel: b) Relatives of Key Management Personnel:

Chairman & Managing Director
S. Puri  T. Anand (wife of N. Anand)
N. Anand Executive Director R. Tandon (wife of R. Tandon)
B. Sumant Executive Director
N. Singhi (wife of R. K. Singhi)
R. Tandon Executive Director
S. Banerjee# Non-Executive Director iii) Employee Trusts:
H. Bhargava# Non-Executive Director@ a) IATC Provident Fund
N. Doda Non-Executive Director
b) ITC Defined Contribution Pension Fund
(w.e.f. 11.08.2021)
c) ITC Management Staff Gratuity Fund
A. Duggal# Non-Executive Director
M. Gupta Non-Executive Director d) ITC Employees Gratuity Fund
(w.e.f. 27.10.2021) e) ITC Gratuity Fund ‘C’
S. Mukherjee# Non-Executive Director f) ITC Pension Fund
(w.e.f. 11.08.2021)
g) ILTD Seasonal Employees Pension Fund
A. Nayak# Non-Executive Director
h) ITC Platinum Jubilee Pension Fund
S. Panray Non-Executive Director
(w.e.f. 11.08.2021) i) ITC Bhadrachalam Paperboards Limited Management
N. Rao# Non-Executive Director Staff Pension Fund
A. K. Seth# Non-Executive Director j) ITC Bhadrachalam Paperboards Limited Gratuity
M. Shankar# Non-Executive Director Fund ‘A’
D. R. Simpson Non-Executive Director k) ITC Bhadrachalam Paperboards Limited Gratuity
A. Jerath Non-Executive Director Fund ‘C’
(up to 30.04.2021) l) ITC Hotels Limited Employees Superannuation
S. B. Mathur# Non-Executive Director Scheme
(up to 14.09.2021) m) Sunrise Spices Limited Employees Gratuity Fund
@ Non-Executive Director up to 22.08.2021. Appointed as
n) Greenacre Holdings Limited Provident Fund
Independent Director w.e.f. 20.12.2021.
# Independent Directors o) Greenacre Holdings Limited Gratuity Fund

ITC Limited REPORT AND ACCOUNTS 2022

2021 299
003
300
Notes to the Consolidated Financial Statements
30. Related Party Disclosures (Contd.)

2. DISCLOSURE OF TRANSACTIONS BETWEEN THE GROUP AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCES AS AT 31.03.2022 (` in Crores)
Relatives of Key
Key Management

ITC Limited
Associates Joint Ventures Management Employee Trusts Total
RELATED PARTY TRANSACTIONS SUMMARY Personnel
Personnel
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
1. Sale of Goods / Services 1316.61 945.16 54.19 34.04 1370.80 979.20
2. Purchase of Goods / Services 73.37 73.16 280.54 229.81 353.91 302.97
3. Investment in Associate 1.87 – 1.87 –
4. Value of Share Based Payment
Reimbursement for Share Based Payments 0.41 0.39 0.08 0.09 0.49 0.48
5. Rent Received 0.88 0.79 0.88 0.79
6. Rent Paid* 2.51 1.17 1.05 0.58 0.32 0.32 3.88 2.07
7. Remuneration of Managers on Deputation reimbursed 5.36 6.00 5.36 6.00
8. Remuneration of Managers on Deputation recovered 6.83 6.23 1.43 1.29 8.26 7.52

REPORT AND ACCOUNTS 2022

9. Contribution to Employees’ Benefit Plans 178.55 128.67 178.55 128.67
10. Dividend Income 0.31 0.43 15.75 6.75 16.06 7.18
11. Dividend Payments 3993.34 5496.01 5.70 5.51 3999.04 5501.52
12. Expenses Recovered 21.59 4.98 0.11 0.20 21.70 5.18
13. Expenses Reimbursed 0.26 0.23 0.05 0.02 0.31 0.25
14. Advances Given during the year – 0.06 – 0.06
15. Adjustment / Receipt towards Refund of Advances ... 0.11 ... 0.11
16. Advances Received during the year 1496.60 598.34 1496.60 598.34
17. Adjustment / Payment towards Refund of Advances 972.02 659.70 972.02 659.70
18. Deposits Given during the year … – … –
19. Deposits Refunded during the year – 0.02 – 0.02
20. Remuneration to Key Management Personnel (KMP) 1
20A. – Short term benefits 69.33 49.64 69.33 49.64
20B. – Other remuneration 10.51 8.96 10.51 8.96
20C. – Share based payment granted 2
21. Outstanding Balances#
  i) Receivables 127.10 118.17 14.66 11.13 141.76 129.30
  ii) Advances Given – … 4.50 3.85 4.50 3.85
  iii) Deposits Given 0.08 0.08 0.07 0.07 0.15 0.15
  iv) Advances Taken 692.41 167.83 692.41 167.83
  v) Deposits Taken 0.61 0.61 0.61 0.61
  vi) Payables 6.00 6.37 13.83 20.98 32.05 130.53 51.88 157.88

* Includes rent pertaining to leases classified as Right of Use Assets.

# The amounts outstanding are unsecured and will be settled in cash.

1 Post employment benefits are actuarially determined on overall basis and hence not separately provided.

2 During the year, the Company granted Stock Options to eligible employees, including Executive Directors and KMPs, under its Employee Stock Option Schemes at ‘market price’ [within the meaning of the Securities and Exchange Board

of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021]. The Company has also granted Employee Stock Appreciation Linked Reward Units (ESAR Units) to the aforesaid persons in the previous years under the ‘ITC
Employee Cash Settled Stock Appreciation Linked Reward Plan’. Since such Stock Options and ESAR Units are not tradeable, no perquisite or benefit is immediately conferred upon the employee by grant of such Stock Options / ESAR Units,
and accordingly the said grants have not been considered as remuneration. However, in accordance with Ind AS -102, the Company has recorded employee benefits expense by way of share based payments to employees at ` 62.63 Crores
for the year ended 31st March, 2022 (2021 - ` 56.77 Crores), of which ` 23.14 Crores (2021 - ` 27.71 Crores) is attributable to Executive Directors and KMPs.
 Notes to the Consolidated Financial Statements
30. Related Party Disclosures (Contd.)

3. INFORMATION REGARDING SIGNIFICANT TRANSACTIONS / BALANCES

(Generally in excess of 10% of the total transaction value of the same type)
RELATED PARTY TRANSACTIONS SUMMARY 2022 2021 RELATED PARTY TRANSACTIONS SUMMARY 2022 2021 RELATED PARTY TRANSACTIONS SUMMARY 2022 2021
1. Sale of Goods / Services     11. Dividend Payments     20B. Other Remuneration    
  British American Tobacco (GLP) Limited 985.49 671.15   Tobacco Manufacturers (India) Limited 3276.18 4512.20   S. Banerjee 1.04 0.93
  British American Tobacco (Holdings) Limited 121.86 110.05   Myddleton Investment Company Limited 534.94 736.76   A. Duggal 1.03 0.91
2. Purchase of Goods / Services     12. Expenses Recovered       A. Nayak 1.01 0.91
  ITC Essentra Limited 280.43 229.76   British American Tobacco (GLP) Limited 14.26 –   M. Shankar 1.01 0.91
  International Travel House Limited 32.92 37.66   H. Bhargava 0.70 0.92
  B.A.T (U.K. and Export) Limited 4.95 2.28
3. Investment in Associate       S. B. Mathur (related party up to 14.09.2021) 0.48 0.91
  British American Tobacco Kenya plc 2.22 1.77
  Delectable Technologies Private Limited 1.87 – 21. Outstanding Balances    
  British American Tobacco (Algerie) S.P.A. – 0.72
4. Value of share based payment     i) Receivables    
13. Expenses Reimbursed    
  Reimbursement for Share Based Payments       British American Tobacco (GLP) Limited 59.75 37.90
  International Travel House Limited 0.32 0.30   Gujarat Hotels Limited 0.23 0.23
  British American Shared Services (GSD) Limited 35.75 19.09
  ATC Limited 0.09 0.09   International Travel House Limited 0.03 …
  British American Tobacco (Holdings) Limited 9.19 38.86
  ITC Essentra Limited 0.05 0.05 14. Advances Given during the year    
ii) Advances Given    
5. Rent Received       International Travel House Limited – 0.06
  Employee Trust - Pension Funds 4.50 2.75
  International Travel House Limited 0.87 0.78 15. Adjustment / Receipt towards Refund of   Employee Trust - Gratuity Funds – 1.10
   
6. Rent Paid     Advances
iii) Deposits Given    
  Gujarat Hotels 2.51 1.17   International Travel House Limited ... 0.11
  N. Anand 0.05 0.05
  A. Rajput 0.43 0.09 16. Advances Received during the year    
  T. Anand 0.05 0.05
  T. Anand 0.27 0.27   British American Tobacco (GLP) Limited 1494.26 596.87
  R. Tandon 0.03 0.03
  N. Anand 0.27 0.27 17. Adjustment / Payment towards Refund of   N. Singhi 0.03 0.03
   
7. Remuneration of Managers on Deputation     Advances
iv) Advances Taken    
reimbursed   British American Tobacco (GLP) Limited 967.97 659.58
  British American Tobacco (GLP) Limited 692.33 166.04
  Gujarat Hotels Limited 5.36 6.00 18. Deposits Given during the year    
v) Deposits Taken    

ITC Limited
8. Remuneration of Managers on Deputation     R. Tandon … –
    International Travel House Limited 0.61 0.61
recovered
19. Deposits Refunded during the year    
  International Travel House Limited 3.27 2.99 vi) Payables    
  International Travel House Limited – 0.02
  ATC Limited 2.86 2.54   Employee Trust - Gratuity Fund 16.98 19.83
  ITC Essentra Limited 0.89 0.78 20. Remuneration to Key Management
      Employee Trust - Pension Fund 15.07 110.69
Personnel (KMP) #
9. Contribution to Employees’ Benefit Plans       ITC Essentra Limited 13.83 20.98
20A. Short term benefits    
  ITC Pension Fund 96.02 28.77 # In accordance with Ind AS - 102, the Group has recognised employee benefits
  IATC Provident Fund 37.07 51.66   S. Puri 17.18 13.12 expense by way of share based payments [refer Note 30.2], of which ` 23.14 Crores
  N. Anand 8.63 6.58 (2021 - ` 27.71 Crores) is attributable to Executive Directors & KMPs: S. Puri
  ITC Management Staff Gratuity Fund 20.19 25.42 ` 6.41 Crores (2021 - ` 10.21 Crores), N. Anand ` 4.15 Crores (2021 - ` 3.57 Crores),
10. Dividend Income       R. Tandon 8.10 6.05 R. Tandon ` 5.04 Crores (2021 - ` 4.62 Crores), B. Sumant ` 2.15 Crores
(2021 - ` 4.13 Crores), S. Dutta ` 0.53 Crore (2021 - ` 0.22 Crore) and R. K. Singhi
  ITC Essentra Limited 15.75 6.75   B. Sumant 8.10 6.06

REPORT AND ACCOUNTS 2022

` 0.57 Crore (2021 - ` 0.86 Crore).

301
Notes to the Consolidated Financial Statements

31. Financial Instruments and Related Disclosures

A. Capital Management

The Group’s financial strategy aims to support its strategic priorities and provide adequate capital to its businesses for growth
and creation of sustainable stakeholder value. The Group funds its operations through internal accrual and aims at maintaining a
strong capital base to support the future growth of its businesses.
During the year, the Group issued 1,44,11,700 Ordinary Shares of ` 1.00 each amounting to ` 1.44 Crores (2021 – ` 1.66 Crores) towards
its employee stock options. The securities premium stood at ` 9959.31 Crores as at 31st March, 2022 (2021 – ` 9582.81 Crores).

B. Categories of Financial Instruments (` in Crores)

As at As at
31st March, 2022 31st March, 2021
Particulars Note
Carrying Fair Carrying Fair
Value Value Value Value
A. Financial assets
a) Measured at amortised cost
  i) Cash and cash equivalents 13 271.37 271.37 290.42 290.42
ii) Other Bank Balances 14 4383.05 4383.05 4368.60 4368.60
iii) Investment in Bonds / 
Debentures & Government
or Trust Securities 4, 11 11147.17 11392.85 9497.32 10009.75
iv) Investment in Mutual Funds 4 278.36 277.12 – –
  v) Loans 5 13.38 11.64 7.54 6.51
vi) Trade receivables 12 2461.90 2461.90 2501.70 2501.70
  vii) Other financial assets 6 4122.27 4077.03 1458.38 1410.06
  Sub-total 22677.50 22874.96 18123.96 18587.04
b) Measured at Fair value through OCI
i) Equity shares 4 1615.07 1615.07 982.46 982.46
ii) Investment in Mutual Funds 4 1238.69 1238.69 – –
  Sub-total 2853.76 2853.76 982.46 982.46
c) Measured at Fair value through
Profit or Loss
  i) Investment in Mutual Funds 4, 11 8965.63 8965.63 12702.46 12702.46
ii) Investment in Bonds /
  11 1219.52 1219.52 1391.04 1391.04
Debentures
iii) Investments in Venture Capital
4 87.33 87.33 35.04 35.04
Fund
iv) Investments in Equity &
4 20.00 20.00 – –
Preference Shares
Sub-total 10292.48 10292.48 14128.54 14128.54
d) Derivatives measured at fair value
i) Derivative instruments not
designated as hedging
instruments 6 5.45 5.45 9.63 9.63
ii) Derivative instruments designated
as hedging instruments 6 27.27 27.27 12.88 12.88
Sub-total 32.72 32.72 22.51 22.51
  Total financial assets 35856.46 36053.92 33257.47 33720.55

302 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

31. Financial Instruments and Related Disclosures (Contd.)

(` in Crores)
As at As at
31st March, 2022 31st March, 2021
Particulars Note
Carrying Fair Carrying Fair
Value Value Value Value
B. Financial liabilities
a) Measured at amortised cost
  i) Cash credit facilities & loans 16, 20 0.31 0.26 4.18 4.13
  ii) Sales tax deferment loans 16, 20 5.28 3.86 5.63 3.69
  iii) Trade payables 4417.26 4417.26 4318.73 4318.73
iv) Lease liabilities 17A 243.85 243.85 261.02 261.02
  v) Other financial liabilities 17B 1870.01 1855.46 1614.05 1590.80
  Sub-total 6536.71 6520.69 6203.61 6178.37
b) Derivatives measured at fair value
i) Derivative instruments not
designated as hedging instruments 17B 1.38 1.38 2.43 2.43
ii) Derivative instruments designated
as hedging instruments 17B 9.56 9.56 19.01 19.01
iii) Contingent Consideration 17B 76.40 76.40 139.51 139.51
Sub-total 87.34 87.34 160.95 160.95
  Total financial liabilities 6624.05 6608.03 6364.56 6339.32

C. Financial risk management objectives

Entities comprising the Group have put in place risk management systems as applicable to the respective operations. The
following explains the objectives and processes of the Company, being the largest component of the Group: The Company
has a system-based approach to risk management, anchored to policies and procedures and internal financial controls aimed
at ensuring early identification, evaluation and management of key financial risks (such as market risk, credit risk and liquidity
risk) that may arise as a consequence of its business operations as well as its investing and financing activities. Accordingly,
the Company’s risk management framework has the objective of ensuring that such risks are managed within acceptable and
approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation. It also seeks to
drive accountability in this regard.

Liquidity Risk

The Group’s Current assets aggregate ` 34232.45 Crores (2021 - ` 34991.99 Crores) including Current Investments,
Cash and cash equivalents and Other Bank Balances of ` 16918.70 Crores (2021 - ` 19505.35 Crores) against an aggregate
Current liabilities of ` 12163.71 Crores (2021 - ` 10689.68 Crores). Other Non-current liabilities other than lease liabilities
due between one year to three years amounted to ` 112.94 Crores (2021 - ` 176.03 Crores) and Other Non-current liabilities due
after three years amounted to ` 36.41 Crores (2021 - ` 113.05 Crores) on the reporting date. The maturity analysis of undiscounted
lease liabilities are disclosed under Note 28 (viii).

Further, while the Group’s total equity stands at ` 62821.87 Crores (2021 - ` 60694.15 Crores), it has non-current borrowings
of ` 4.85 Crores (2021 - ` 5.58 Crores). In such circumstances, liquidity risk or the risk that the Group may not be able to settle
or meet its obligations as they become due does not exist.

Market Risk

The Group is not an active investor in equity markets; it holds certain investments in equity for long term value accretion which are
accordingly measured at fair value through Other Comprehensive Income. The value of investments in such equity instruments
as at 31st March, 2022 is ` 1615.07 Crores (2021- ` 982.46 Crores). Accordingly, fair value fluctuations arising from market
volatility is recognised in Other Comprehensive Income.

ITC Limited REPORT AND ACCOUNTS 2022 303

Notes to the Consolidated Financial Statements

31. Financial Instruments and Related Disclosures (Contd.)

As the Group is virtually debt-free and its deferred payment liabilities do not carry interest, the exposure to interest rate risk from
the perspective of financial liabilities is negligible.
The Group’s investments are predominantly held in bonds / debentures, fixed deposits and debt mutual funds. Mark to market
movements in respect of the Group’s investments in bonds / debentures that are held at amortised cost are temporary and get
recouped through coupon accruals. Other investments in bonds / debentures are fair valued through the Statement of Profit and
Loss to recognise market volatility, which is not considered to be significant. Fixed deposits are held with highly rated banks and
companies and have a short tenure and are not subject to interest rate volatility.
The Group also invests in mutual fund schemes of leading fund houses. Such investments are susceptible to market price risk
that arise mainly from changes in interest rate which may impact the return and value of such investments. However, given the
relatively short tenure of underlying portfolio of the mutual fund schemes in which the Group has invested, such price risk is not
significant.
For select agricultural commodities primarily held for trading, futures contracts are used to hedge price risks till positions in
the physical market are matched. The carrying value of inventories is adjusted to the extent of fair value movement of the risk
being hedged. Such hedges are generally for short time horizons and recognised in profit or loss within the crop cycle and are
managed by the business within the approved policy framework. Accordingly, the Group’s net exposure to commodity price risk is
considered to be insignificant.
Foreign currency risk
The Group undertakes transactions denominated in foreign currency (mainly US Dollar, Pound Sterling, Euro and Japanese
Yen) which are subject to the risk of exchange rate fluctuations. Financial assets and liabilities denominated in foreign currency,
including the Group’s net investments in foreign operations (with a functional currency other than Indian Rupee), are also subject
to reinstatement risks.
The carrying amounts of foreign currency denominated financial assets and liabilities including derivative contracts, are as follows:
(` in Crores)
As at 31st March, 2022 USD Euro GBP JPY Others Total

Financial Assets 1035.99 181.07 155.30 0.01 92.67 1465.04

Financial Liabilities 151.30 57.42 26.84 18.26 18.78 272.60

As at 31st March, 2021 USD Euro GBP JPY Others Total

Financial Assets 1269.81 87.67 135.20 – 95.54 1588.22

Financial Liabilities 139.58 42.94 29.05 40.55 16.79 268.91

The Group uses foreign exchange forward, futures and options contracts to hedge its exposures in foreign currency arising
from firm commitments and highly probable forecast transactions.
a. Forward exchange contracts that were outstanding on respective reporting dates:
 (In Million)
Designated under Hedge Accounting As at 31st March, 2022 As at 31st March, 2021

Currency Cross Currency Buy Sell Buy Sell

US Dollar Indian Rupee 22.38 586.94 45.61 66.01

Euro US Dollar 14.09 – 29.27 –
AUD US Dollar – – 0.08 –
CHF US Dollar 1.16 – 0.02 –
GBP US Dollar 0.01 – 0.01 –
SEK US Dollar 1.36 – 4.09 –
SGD US Dollar 0.04 – 0.04 –
JPY US Dollar 324.36 – 829.68 –

The aforesaid hedges have a maturity of less than 1 year from the year end.

304 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

31. Financial Instruments and Related Disclosures (Contd.)

 (In Million)

Not designated under Hedge Accounting As at 31st March, 2022 As at 31st March, 2021

Currency Cross Currency Buy Sell Buy Sell

US Dollar Indian Rupee 5.00 72.94 – 200.02

Euro US Dollar – 13.55 – 10.72

AUD US Dollar 0.04 – 0.03 0.50

SGD US Dollar – – 0.32 –

CHF US Dollar 0.34 – 0.22 –

GBP US Dollar – 12.99 – 6.00

SEK US Dollar – – 0.40 –

KWD US Dollar 0.19 – 0.13 0.41

JPY US Dollar 53.90 – 58.40 –

ZAR US Dollar 3.50 – – –

US Dollar Nepalese Rupee 3.83 – 3.75 0.12

Euro Nepalese Rupee 0.39 – 0.34 –

GBP Nepalese Rupee … – 0.02 –

b. Currency options that were outstanding on respective reporting dates (Designated under Hedge Accounting):

(In Million)

Currency Cross Currency Buy Sell Buy Sell

US Dollar Indian Rupee – 17.00 – –

Hedges of foreign currency risk and derivative financial instruments

Each entity comprising the Group manages its own currency risk. Within the Group, derivative instruments are largely entered
into by the Company. The Company has established risk management policies to hedge the volatility in cashflows arising from
exchange rate fluctuations in respect of firm commitments and highly probable forecast transactions, through foreign exchange
forward, futures and options contracts. The proportion of forecast transactions that are to be hedged is decided based on the size
of the forecast transaction and market conditions. As the counterparty for such transactions are highly rated banks, the risk of their
non-performance is considered to be insignificant. The Company uses derivatives to hedge its exposure to foreign exchange rate
fluctuations. Where such derivatives are not designated under hedge accounting, changes in the fair value of such hedges are
recognised in the Statement of Profit and Loss.

The Company may also designate certain hedges which are entered to manage the volatility in cashflows as a cash flow hedge
under hedge accounting. The currency, amount and tenure of such hedges are generally matched to the underlying transaction(s).
Changes in the fair value of the effective portion of cash flow hedges are recognised as cash flow hedging reserve in Other
Comprehensive Income. While the probability of such hedges becoming ineffective is very low, the ineffective portion, if any, is
immediately recognised in the Statement of Profit and Loss.

ITC Limited REPORT AND ACCOUNTS 2022 305

Notes to the Consolidated Financial Statements

31. Financial Instruments and Related Disclosures (Contd.)

The movement in the cash flow hedging reserve in respect of designated cash flow hedges is summarised below:
(` in Crores)
Particulars 2022 2021

At the beginning of the year 4.93 (24.33)

Add: Changes in the fair value of effective portion of matured
cash flow hedges during the year 16.71 34.47
Add: Changes in fair value of effective portion of
outstanding cash flow hedges 19.27 7.02
Less: Amounts transferred to the Statement of Profit and Loss
on occurrence of forecast hedge transactions during the year 30.07 6.51
Less: Amounts transferred to the Statement of Profit and Loss
due to cash flows no longer expected to occur 3.03 0.86
Less: Amounts transferred to initial cost of non-financial assets (9.68) (4.99)
Less: Net gain / (loss) transferred to the Statement of Profit and
Loss on ineffectiveness – –
(Less) / Add: Deferred tax (3.16) (9.85)
At the end of the year 14.33 4.93
Of the above, balances remaining in cash flow hedge reserve
for matured hedging relationships 2.46 2.53
Once the hedged transaction materialises, the amount accumulated in the cash flow hedging reserve will be included in the initial
cost of the non-financial hedged item on its initial recognition or reclassified to profit or loss, as applicable, in the anticipated
timeframes given below:
(` in Crores)
Outstanding balance in Cash Flow Hedge Reserve to be As at As at
subsequently recycled from OCI 31st March, 2022 31st March, 2021

Within one year 10.80 3.86

Between one and three years 3.53 1.07
Total 14.33 4.93
Foreign Currency Sensitivity
For every percentage point increase / decrease in the underlying exchange rate of the outstanding foreign currency denominated
assets and liabilities, including derivative contracts, holding all other variables constant, the profit before tax for the year ended
31st March, 2022 would decrease / increase by ` (2.53) Crores (2021 - ` 10.69 Crores) and other equity as at 31st March, 2022
would decrease / increase by ` 38.12 Crores (2021 - ` 10.29 Crores) on a pre-tax basis.
Credit Risk

Each entity comprising the Group manages its own credit risk. The following explains the processes followed by the Company,
being the largest component of the Group, to manage its credit risk: Company’s deployment in debt instruments are primarily in
Government securities, fixed deposits with highly rated banks and companies; bonds issued by government institutions, public
sector undertakings, mutual fund schemes of leading fund houses and certificate of deposits issued by highly rated banks and
financial institutions. As these counter parties are Central / State Government, Government institutions / public sector undertakings
with investment grade / sovereign credit ratings and taking into account the experience of the Company over time, the counter
party risk attached to such assets is considered to be insignificant.
The Group’s investments that are held at amortised cost stood at ` 18598.99 Crores (2021 - ` 14252.66 Crores).
The Company’s customer base is large and diverse limiting the risk arising out of credit concentration. Further, credit is extended
in business interest in accordance with guidelines issued centrally and business-specific credit policies that are consistent with
such guidelines. Exceptions are managed and approved by appropriate authorities, after due consideration of the counterparty’s
credentials and financial capacity, trade practices and prevailing business and economic conditions. The Company’s historical
experience of collecting receivables and the level of default indicate that credit risk is low and generally uniform across markets;
consequently, trade receivables are considered to be a single class of financial assets. All overdue customer balances are
evaluated taking into account the age of the dues, specific credit circumstances, the track record of the counterparty etc. Loss
allowances and impairment is recognized, where considered appropriate by responsible management.

306 ITC Limited REPORT AND ACCOUNTS 2022

Notes to the Consolidated Financial Statements

31. Financial Instruments and Related Disclosures (Contd.)

The Group’s exposure to trade receivables on the reporting date, net of expected loss provisions, stood at ` 2461.90 Crores
(2021 - ` 2501.70 Crores).
The movement of the expected loss provision (allowance for bad and doubtful loans, advances and receivables etc.) made by the
Group are as under:
(` in Crores)
Expected Loss Provision

Particulars As at 31st March, 2022 As at 31st March, 2021

Opening Balance 239.05 187.77
Add: Provisions made (net) 16.89 61.14
Less: Utilisation for impairment / de-recognition 14.82 9.75
Effects of foreign exchange fluctuation (0.21) (0.11)
Closing Balance 240.91 239.05

D. Fair value measurement

The following table presents the fair value hierarchy of financial assets and liabilities measured at fair value on a recurring basis:
(` in Crores)
Fair Value
As at 31st March, 2022 As at 31st March, 2021
Particulars Hierarchy (Level)
A. Financial assets
a) Measured at amortised cost
i) Investment in Bonds / Debentures
& Government or Trust Securities 2 11392.85 10009.75
ii) Investment in Mutual Funds 1 277.12 –
  iii) Loans* 3 4.87 3.04
  iv) Other Financial assets* 3 1544.34 53.55
  Sub-total 13219.18 10066.34
b) Measured at Fair value through OCI
  i) Equity shares – Quoted 1 1610.33 969.35
ii) Investment in Mutual Funds 1 1238.69 –
  Sub-total 2849.02 969.35
c) Measured at Fair value
through Profit or Loss
  i) Investment in Mutual Funds 1 8965.63 12702.46
ii) Investment in Bonds /
 
Debentures 2 1219.52 1391.04
iii) Investments in Venture
Capital Fund 2 87.33 35.04
iv) Investments in Equity &
Preference Shares 3 20.00 –
  Sub-total 10292.48 14128.54
d) Derivatives measured at fair value
i) 
Derivative instruments not
designated as hedging instruments 2 5.45 9.63
ii) 
Derivative instruments designated
as hedging instruments 2 27.27 12.88
Sub-total 32.72 22.51
  Total financial assets 26393.40 25186.74

ITC Limited REPORT AND ACCOUNTS 2022 307

Notes to the Consolidated Financial Statements

31. Financial Instruments and Related Disclosures (Contd.)

Fair Value
As at 31st March, 2022 As at 31st March, 2021
Particulars Hierarchy (Level)
B. Financial liabilities
a) Measured at amortised cost
i) Sales tax deferment loans* 3 3.12 3.34
ii) Other Financial liabilities* 3 129.95 193.41
iii) Lease Liabilities* 3 193.67 206.96
iv) Loans* 3 0.26 0.25
  Sub-total 327.00 403.96
b) Derivatives measured at fair value
i) Derivative instruments not
designated as hedging instruments 2 1.38 2.43
ii) Derivative instruments designated
  as hedging instruments 2 9.56 19.01
iii) Contingent Consideration 3 76.40 139.51
Sub-total 87.34 160.95
  Total financial liabilities 414.34 564.91

*Represents Fair value of Non-current Financial Instruments

Fair value hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation
techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant
inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Derivatives are valued using valuation techniques with market observable inputs such as foreign exchange spot rates and forward
rates at the end of the reporting period, yield curves, risk free rate of returns, volatility etc., as applicable.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally
accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that
reflects the credit risk of counterparty.
The fair value of trade receivables, trade payables and other Current financial assets and liabilities is considered to be equal to the
carrying amounts of these items due to their short – term nature. Where such items are Non-current in nature, the same has been
classified as Level 3 and fair value determined using discounted cash flow basis. Similarly, unquoted equity instruments where
most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost
has been considered as best estimate of fair value and has been excluded in the fair value measurement disclosed above.
There has been no change in the valuation methodology for Level 3 inputs during the year. The Group has not classified any
material financial instruments under Level 3 of the fair value hierarchy. There were no transfers between Level 1 and Level 2
during the year.

On behalf of the Board

S. PURI Chairman & Managing Director
R. TANDON Director
S. DUTTA Chief Financial Officer
R. K. SINGHI Company Secretary

308 ITC Limited REPORT AND ACCOUNTS 2022

Independent Auditor’s Report
to the Members of ITC Limited
Report on the Audit of the Consolidated Ind AS Financial described in the ‘Auditor’s Responsibilities for the Audit of
Statements the Consolidated Ind AS Financial Statements’ section of
our report. We are independent of the Group, associates,
Opinion joint ventures in accordance with the ‘Code of Ethics’
We have audited the accompanying consolidated Ind AS issued by the Institute of Chartered Accountants of India
financial statements of ITC Limited (hereinafter referred to together with the ethical requirements that are relevant to
as “the Holding Company”), its subsidiaries (the Holding our audit of the financial statements under the provisions
Company and its subsidiaries together referred to as “the of the Act and the Rules thereunder, and we have fulfilled
Group”) its associates and joint ventures comprising of our other ethical responsibilities in accordance with these
the consolidated Balance Sheet as at March 31, 2022, requirements and the Code of Ethics. We believe that
the consolidated Statement of Profit and Loss, including the audit evidence we have obtained is sufficient and
other comprehensive income, the consolidated Cash appropriate to provide a basis for our audit opinion on the
Flow Statement and the consolidated Statement of consolidated Ind AS financial statements.
Changes in Equity for the year then ended, and notes to
Key Audit Matters
the consolidated Ind AS financial statements, including
a summary of significant accounting policies and other Key audit matters are those matters that, in our professional
explanatory information (hereinafter referred to as “the judgment, were of most significance in our audit of the
consolidated Ind AS financial statements”). consolidated Ind AS financial statements for the financial
year ended March 31, 2022. These matters were addressed
In our opinion and to the best of our information and
in the context of our audit of the consolidated Ind AS
according to the explanations given to us and based on
financial statements as a whole, and in forming our opinion
the consideration of reports of other auditors on separate
thereon, and we do not provide a separate opinion on these
financial statements and on the other financial information
matters. For each matter below, our description of how our
of the subsidiaries, associates and joint ventures, the
audit addressed the matter is provided in that context.
aforesaid consolidated Ind AS financial statements give
the information required by the Companies Act, 2013, as We have determined the matters described below to be the
amended (“the Act”) in the manner so required and give key audit matters to be communicated in our report. We
a true and fair view in conformity with the accounting have fulfilled the responsibilities described in the Auditor’s
principles generally accepted in India, of the consolidated responsibilities for the audit of the consolidated Ind AS
state of affairs of the Group, its associates and joint financial statements section of our report, including in
ventures as at March 31, 2022, their consolidated profit relation to these matters. Accordingly, our audit included
including other comprehensive income, their consolidated the performance of procedures designed to respond to our
cash flows and the consolidated statement of changes in assessment of the risks of material misstatement of the
equity for the year ended on that date. consolidated Ind AS financial statements. The results of
audit procedures performed by us and by other auditors of
Basis for Opinion components not audited by us, as reported by them in their
We conducted our audit of the consolidated Ind AS audit reports furnished to us by the management, including
financial statements in accordance with the Standards on those procedures performed to address the matters below,
Auditing (SAs), as specified under Section 143(10) of the provide the basis for our audit opinion on the accompanying
Act. Our responsibilities under those Standards are further consolidated Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter

Revenue recognition

Revenue from the sale of goods (hereinafter referred to Our audit procedures included the following:
as “Revenue”) is recognised when the Group performs  Assessed the Group’s revenue recognition accounting
its obligation to its customers and the amount of policies in line with Ind AS 115 (“Revenue from
revenue can be measured reliably and recovery of the Contracts with Customers”) and tested thereof.
consideration is probable. The timing of such revenue
recognition in case of sale of goods is when the control  Evaluated the integrity of the general information
over the same is transferred to the customer, which is and technology control environment and testing the
mainly upon delivery. operating effectiveness of key IT application controls
over recognition of revenue.

ITC Limited REPORT AND ACCOUNTS 2022 309

Independent Auditor’s Report

Key audit matters How our audit addressed the key audit matter

The timing of revenue recognition is relevant to the  Evaluated the design, implementation and operating
reported performance of the Group. The management effectiveness of Group’s controls in respect of revenue
considers revenue as a key measure for evaluation of recognition.
performance. There is a risk of revenue being recorded  Tested the effectiveness of such controls over
before control is transferred. revenue cut off at year-end.
Refer Note 1 to the Consolidated Ind AS Financial  On a sample basis, tested supporting documentation
Statements - Significant Accounting Policies and Note for sales transactions recorded during the year which
22A / 22B. included sales invoices, customer contracts and
shipping documents.
 Performed an increased level of substantive testing
in respect of sales transactions recorded during the
period closer to the year end and subsequent to the
year end.
 Compared revenue with historical trends and where
appropriate, conducted further enquiries and testing.
 Assessed disclosures in financial statements in
respect of revenue, as specified in Ind AS 115.

Litigations – Contingencies

The Group has ongoing litigations with various authorities Our audit procedures included the following:
and third parties which could have a significant impact  Obtained and read the Group’s accounting policies in
on the results, if the potential exposures were to respect of claims, provisions and contingent liabilities
materialise. to assess compliance with accounting standards.
The amounts involved are significant, and the application  Assessed the design and implementation of the
of accounting standards to determine the amount, if any, Group’s controls over the assessment of litigations
to be provided as a liability or disclosed as a contingent and completeness of disclosures. Supporting
liability, is inherently subjective. documentation were tested for the positions taken by
the management, meetings conducted with in-house
Claims against the Group not acknowledged as debts legal counsel and / or legal team and minutes of Board
are disclosed in the Financial Statements by the Group and sub-committee meetings were reviewed, to test
after a careful evaluation of the facts and legal aspects the operating effectiveness of these controls.
of the matters involved. The outcome of such litigation
 Involved our tax specialists to assess relevant
is uncertain and the position taken by management historical and recent judgements passed by the
involves significant judgment and estimation to appropriate authorities in order to challenge the
determine the likelihood and/or timing of cash outflows basis used for the accounting treatment and resulting
and the interpretation of preliminary and pending disclosures.
court rulings.  Additionally, considered the effect of new information
Refer Note 28 (iii)(a) to the Consolidated Ind AS in respect of contingencies as at April 1, 2021 to
Financial Statements. evaluate whether any change was required in the
management’s position on these contingencies as at
March 31, 2022.
 Assessed in accordance with accounting standards,
the provisions in respect of litigations and assessed
disclosures relating thereto, including those for
contingencies.

310 ITC Limited REPORT AND ACCOUNTS 2022

 Independent Auditor’s Report

Key audit matters How our audit addressed the key audit matter

Impairment assessment of Capital Work in Progress (Hotel) and valuation of Inventories (Residential
Apartments) of WelcomHotels Lanka (Private) Limited (‘WLPL’), a wholly owned subsidiary
WLPL is developing a mixed-use project in Colombo, Our audit procedures included the following:
Sri Lanka which includes a hotel and a residential
 Obtained understanding of the Company’s policy on
apartment complex. At March 31, 2022, the carrying value assessment of impairment of PPE and determination
of Capital Work in Progress (‘CWIP’) and inventories of net realisable value for inventory and assumptions
(excluding leasehold land value of ` 212.56 Crores) used by the management including design and
is ` 639.44 Crores and ` 493.09 Crores respectively. implementation of controls.
In view of the recent deterioration in the macro –  Obtained and read the projections / estimated selling
economic scenario in Sri Lanka, the management of price / future cashflows along with sensitivity analysis
WLPL has performed impairment assessment for its thereof.
capital work in progress of the Hotel (PPE) and net
 Discussed and obtained assessment of recoverable
realisable value assessment for the inventory of the value of PPE and inventory from component auditor.
residential apartments.
 Evaluated management’s methodology, assumptions
The processes and methodologies for assessing and and estimates used in the calculations.
determining the recoverable value of the project are based
 Involved valuation specialist to review the
on assumptions, that by their nature imply the use of the appropriateness of methodology and key assumptions
management’s judgment, in particular with reference to considered by management to determine discounted
forecast of future cash flows, selling price, balance cost future cash flows.
to complete the project, selling costs, terminal value,
 Performed sensitivity analysis around impact on
long-term growth rates and discount rates applied to such
future cash flows due to changes in key assumptions
forecasted cash flows. Considering the judgment required considered by management.
for estimating the cash flows and the assumptions used,
 Verified the arithmetical accuracy of the future cash flow
this is considered as a key audit matter.
model including comparison with approved budgets.
Refer Note 1 – Significant Accounting Policies and
 Assessed the recoverability of PPE with regard
Note 2 – Use of estimates and judgements to the to the value in use and net realisable value
Consolidated Ind AS Financial Statements. of inventory.

Information Other than the Financial Statements and there is a material misstatement of this other information,
Auditor’s Report Thereon we are required to report that fact. We have nothing to
The Holding Company’s Board of Directors is responsible report in this regard.
for the other information. The other information comprises Responsibilities of Management for the Consolidated
the information included in the Annual Report, but does Ind AS Financial Statements
not include the consolidated Ind AS financial statements
The Holding Company’s Board of Directors is responsible
and our auditor’s report thereon.
for the preparation and presentation of these consolidated
Our opinion on the consolidated Ind AS financial Ind AS financial statements in terms of the requirements
statements does not cover the other information and we of the Act that give a true and fair view of the consolidated
do not express any form of assurance conclusion thereon. financial position, consolidated financial performance
In connection with our audit of the consolidated Ind AS including other comprehensive income, consolidated cash
financial statements, our responsibility is to read the other flows and consolidated statement of changes in equity
information and, in doing so, consider whether such other of the Group including its associates and joint ventures
information is materially inconsistent with the consolidated in accordance with the accounting principles generally
Ind AS financial statements or our knowledge obtained in accepted in India, including the Indian Accounting
the audit or otherwise appears to be materially misstated. Standards (Ind AS) specified under Section 133 of
If, based on the work we have performed, we conclude that the Act read with the Companies (Indian  Accounting

ITC Limited REPORT AND ACCOUNTS 2022 311

Independent Auditor’s Report

Standards) Rules, 2015, as amended. The respective taken on the basis of these consolidated Ind AS financial
Board of Directors of the companies included in the statements.
Group and of its associates and joint ventures are
As part of an audit in accordance with SAs, we exercise
responsible for maintenance of adequate accounting
professional judgment and maintain professional
records in accordance with the provisions of the Act
skepticism throughout the audit. We also:
for safeguarding of the assets of the Group and of its
associates and joint ventures and for preventing and  Identify and assess the risks of material misstatement
detecting frauds and other irregularities; selection and of the consolidated Ind AS financial statements,
application of appropriate accounting policies; making whether due to fraud or error, design and perform audit
judgments and estimates that are reasonable and prudent; procedures responsive to those risks, and obtain audit
and the design, implementation and maintenance of evidence that is sufficient and appropriate to provide a
adequate internal financial controls, that were operating basis for our opinion. The risk of not detecting a material
effectively for ensuring the accuracy and completeness misstatement resulting from fraud is higher than for one
of the accounting records, relevant to the preparation resulting from error, as fraud may involve collusion,
and presentation of the consolidated Ind AS financial forgery, intentional omissions, misrepresentations, or
statements that give a true and fair view and are free the override of internal control.
from material misstatement, whether due to fraud or error,  Obtain an understanding of internal control relevant to
which have been used for the purpose of preparation the audit in order to design audit procedures that are
of the consolidated Ind AS financial statements by the
appropriate in the circumstances. Under Section 143(3)(i)
Directors of the Holding Company, as aforesaid.
of the Act, we are also responsible for expressing our
In preparing the consolidated Ind AS financial statements, opinion on whether the Holding Company has adequate
the respective Board of Directors of the companies internal financial controls with reference to financial
included in the Group and of its associates and joint statements in place and the operating effectiveness of
ventures are responsible for assessing the ability of the such controls.
Group and of its associates and joint ventures to continue
 Evaluate the appropriateness of accounting policies
as a going concern, disclosing, as applicable, matters
used and the reasonableness of accounting estimates
related to going concern and using the going concern
and related disclosures made by management.
basis of accounting unless management either intends
to liquidate the Group or to cease operations, or has no  Conclude on the appropriateness of management’s use
realistic alternative but to do so. of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
Those respective Board of Directors of the companies
uncertainty exists related to events or conditions that
included in the Group and of its associates and joint
may cast significant doubt on the ability of the Group
ventures are also responsible for overseeing the financial
and its associates and joint ventures to continue as a
reporting process of the Group and of its associates and
going concern. If we conclude that a material uncertainty
joint ventures.
exists, we are required to draw attention in our auditor’s
Auditor’s Responsibilities for the Audit of the report to the related disclosures in the consolidated
Consolidated Ind AS Financial Statements Ind AS financial statements or, if such disclosures are
Our objectives are to obtain reasonable assurance about inadequate, to modify our opinion. Our conclusions
whether the consolidated Ind AS financial statements as are based on the audit evidence obtained up to the
a whole are free from material misstatement, whether date of our auditor’s report. However, future events or
due to fraud or error, and to issue an auditor’s report that conditions may cause the Group and its associates and
includes our opinion. Reasonable assurance is a high joint ventures to cease to continue as a going concern.
level of assurance, but is not a guarantee that an audit  Evaluate the overall presentation, structure and content
conducted in accordance with SAs will always detect a of the consolidated Ind AS financial statements,
material misstatement when it exists. Misstatements can including the disclosures, and whether the consolidated
arise from fraud or error and are considered material if, Ind AS financial statements represent the underlying
individually or in the aggregate, they could reasonably be transactions and events in a manner that achieves fair
expected to influence the economic decisions of users presentation.

312 ITC Limited REPORT AND ACCOUNTS 2022

 Independent Auditor’s Report

 
Obtain sufficient appropriate audit evidence regarding and net cash outflows of ` 2.42 Crores for the year
the financial information of the entities or business ended on that date included in these consolidated
activities within the Group and its associates and joint Ind AS financial statements. These Ind AS financial
ventures of which we are the independent auditors statement and other financial information have been
and whose financial information we have audited, to audited by other auditors, which financial statements,
express an opinion on the consolidated Ind AS financial other financial information and auditor’s reports
statements. We are responsible for the direction, have been furnished to us by the management. The
supervision and performance of the audit of the financial consolidated Ind AS financial statements also include
statements of such entities included in the consolidated the Group’s share of net profit of ` 17.48 Crores for
Ind AS financial statements of which we are the the year ended March 31, 2022, as considered in the
independent auditors. For the other entities included consolidated Ind AS financial statements, in respect
in the consolidated Ind AS financial statements, which of seven associates and four joint ventures, whose
have been audited by other auditors, such other auditors financial statements, other financial information have
remain responsible for the direction, supervision and been audited by other auditors and whose reports
performance of the audits carried out by them. We have been furnished to us by the Management.
remain solely responsible for our audit opinion. Our opinion on the consolidated Ind AS financial
We communicate with those charged with governance of statements, in so far as it relates to the amounts and
the Holding Company and such other entities included disclosures included in respect of these subsidiaries,
in the consolidated Ind AS financial statements of which joint ventures and associates, and our report in
we are the independent auditors regarding, among terms of sub-sections (3) of Section 143 of the Act,
other matters, the planned scope and timing of the audit in so far as it relates to the aforesaid subsidiaries,
and significant audit findings, including any significant joint ventures and associates, is based solely on the
deficiencies in internal control that we identify during reports of such other auditors.
our audit.
Certain of these subsidiaries are located outside
We also provide those charged with governance India whose financial statements and other financial
with a statement that we have complied with relevant information have been prepared in accordance with
ethical requirements regarding independence, and accounting principles generally accepted in their
to communicate with them all relationships and other
respective countries and which have been audited
matters that may reasonably be thought to bear on our
by other auditors under generally accepted auditing
independence, and where applicable, related safeguards.
standards applicable in their respective countries.
From the matters communicated with those charged with The Holding Company’s management has converted
governance, we determine those matters that were of the financial statements of such subsidiaries located
most significance in the audit of the consolidated Ind AS outside India from accounting principles generally
financial statements for the financial year ended March accepted in their respective countries to accounting
31, 2022 and are therefore the key audit matters. We principles generally accepted in India. We have
describe these matters in our auditor’s report unless law audited these conversion adjustments made by
or regulation precludes public disclosure about the matter the Holding Company’s management. Our opinion
or when, in extremely rare circumstances, we determine
in so far as it relates to the balances and affairs of
that a matter should not be communicated in our report
such subsidiaries located outside India is based
because the adverse consequences of doing so would
on the report of other auditors and the conversion
reasonably be expected to outweigh the public interest
adjustments prepared by the management of the
benefits of such communication.
Holding Company and audited by us.
Other Matter Our opinion above on the consolidated Ind AS
(a) We did not audit the financial statements and financial statements, and our report on Other Legal
other financial information, in respect of eighteen and Regulatory Requirements below, is not modified
subsidiaries, whose Ind AS financial statements in respect of the above matters with respect to our
include total assets of ` 4,385.97 Crores as at reliance on the work done and the reports of the
March 31, 2022, and total revenues of ` 2,809.79 Crores other auditors.

ITC Limited REPORT AND ACCOUNTS 2022 313

Independent Auditor’s Report

Report on Other Legal and Regulatory Requirements associate companies and joint ventures, none
1. As required by the Companies (Auditor’s Report) Order, of the directors of the Group’s companies, its
associates and joint ventures, incorporated in
2020 (“the Order”), issued by the Central Government
India, is disqualified as on March  31,  2022 from
of India in terms of sub-section (11) of Section 143 of
being appointed as a director in terms of Section
the Act, based on our audit and on the consideration
164 (2) of the Act;
of report of the other auditors on separate financial
statements and the other financial information of the (f) 
With respect to the adequacy of the internal
subsidiary companies, associate companies and joint financial controls with reference to consolidated Ind
ventures companies, incorporated in India, as noted in AS financial statements of the Holding Company
the ‘Other Matter’ paragraph we give in the “Annexure 1” and its subsidiary companies, associate companies
a statement on the matters specified in paragraph and joint ventures, incorporated in India, and the
3(xxi) of the Order. operating effectiveness of such controls, refer to
our separate Report in “Annexure 2” to this report;
2. As required by Section 143(3) of the Act, based on our
audit and on the consideration of report of the other (g) In our opinion and based on the consideration of
auditors on separate financial statements and the other reports of other statutory auditors of the subsidiaries,
financial information of subsidiaries, associates and associates and joint ventures incorporated in India,
joint ventures, as noted in the ‘other matter’ paragraph the managerial remuneration for the year ended
we report, to the extent applicable, that: March 31, 2022 has been paid / provided by the
Holding Company, its subsidiaries, associates and
(a) We / the other auditors whose report we have relied
joint ventures incorporated in India to their directors
upon have sought and obtained all the information
in accordance with the provisions of Section 197
and explanations which to the best of our knowledge
read with Schedule V to the Act;
and belief were necessary for the purposes of our
audit of the aforesaid consolidated Ind AS financial (h) With respect to the other matters to be included in
statements; the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
(b) In our opinion, proper books of account as required as amended, in our opinion and to the best of our
by law relating to preparation of the aforesaid information and according to the explanations
consolidation of the financial statements have been given to us and based on the consideration of the
kept so far as it appears from our examination of report of the other auditors on separate financial
those books and reports of the other auditors; statements as also the other financial information
(c) The Consolidated Balance Sheet, the Consolidated of the subsidiaries, associates and joint ventures,
Statement of Profit and Loss including the Statement as noted in the ‘Other matter’ paragraph:
of Other Comprehensive Income, the Consolidated i. The consolidated Ind AS financial statements
Cash Flow Statement and Consolidated Statement disclose the impact of pending litigations
of Changes in Equity dealt with by this Report are on its consolidated financial position of the
in agreement with the books of account maintained Group, its associates and joint ventures in its
for the purpose of preparation of the consolidated consolidated Ind AS financial statements –
Ind AS financial statements; Refer Note 28 (iii)(a) to the consolidated Ind AS
(d) In our opinion, the aforesaid consolidated Ind AS financial statements;
financial statements comply with the Accounting ii. The Group, its associates and joint ventures
Standards specified under Section 133 of the did not have any material foreseeable losses in
Act, read with Companies (Indian Accounting long-term contracts including derivative
Standards) Rules, 2015, as amended; contracts during the year ended March 31, 2022;
(e) On the basis of the written representations received iii. There has been no delay in transferring
from the directors of the Holding Company as on amounts, required to be transferred, to the
March 31, 2022 taken on record by the Board of Investor Education and Protection Fund by the
Directors of the Holding Company and the reports Holding Company, its subsidiaries, associates
of the statutory auditors who are appointed under and joint ventures, incorporated in India during
Section 139 of the Act, of its subsidiary companies, the year ended March 31, 2022.

314 ITC Limited REPORT AND ACCOUNTS 2022

 Independent Auditor’s Report

iv. a) The respective managements of the Holding c) Based on the audit procedures that
Company and its subsidiaries, associate have been considered reasonable and
and joint ventures which are companies appropriate in the circumstances performed
incorporated in India whose financial by us and that performed by the auditors of
statements have been audited under the the subsidiaries, associate and joint ventures
Act have represented to us and the other which are companies incorporated in India
auditors of such subsidiaries, associate and whose financial statements have been
joint ventures respectively that, to the best audited under the Act, nothing has come to
of its knowledge and belief, no funds have our or other auditor’s notice that has caused
been advanced or loaned or invested (either us or the other auditors to believe that the
from borrowed funds or share premium representations under sub-clause (a) and
or any other sources or kind of funds) (b) contain any material mis-statement.
by the Holding Company or any of such
v. The final dividend paid by the Holding Company,
subsidiaries, associate and joint ventures
its subsidiary, an associate and a joint venture
to or in any other person or entity, including
company incorporated in India during the year
foreign entities (“Intermediaries”), with the
in respect of the same declared for the previous
understanding, whether recorded in writing
year is in accordance with Section 123 of the Act
or otherwise, that the Intermediary shall,
to the extent it applies to payment of dividend.
whether, directly or indirectly lend or invest
in other persons or entities identified in any The interim dividend declared and paid during
manner whatsoever by or on behalf of the the year by the Holding Company and, its
respective Holding Company or any of such subsidiaries, incorporated in India and until
subsidiaries, associate and joint ventures the date of the respective audit reports of
(“Ultimate Beneficiaries”) or provide any such Holding Company and, subsidiaries, is in
guarantee, security or the like on behalf of accordance with Section 123 of the Act.
the Ultimate Beneficiaries; As stated in Note B of Statement of changes
b) The respective managements of the Holding in equity to the consolidated Ind AS financial
Company and its subsidiaries, associate statements, the respective Board of Directors
and joint ventures which are companies of the Holding Company, its subsidiaries,
incorporated in India whose financial an associate and a joint venture company,
statements have been audited under the incorporated in India have proposed final
Act have represented to us and the other dividend for the year which is subject to the
auditors of such subsidiaries, associate and approval of the members of the respective
joint ventures respectively that, to the best companies at the respective ensuing Annual
of its knowledge and belief, no funds have General Meeting. The dividend declared is in
been received by the respective Holding accordance with Section 123 of the Act to the
Company or any of such subsidiaries, extent it applies to declaration of dividend.
associate and joint ventures from any
person or entity, including foreign entities
(“Funding Parties”), with the understanding,
whether recorded in writing or otherwise,
For S R B C & CO LLP
that the Holding Company or any of such
subsidiaries, associate and joint ventures Chartered Accountants
shall, whether, directly or indirectly, lend or ICAI Firm Registration Number: 324982E / E300003
invest in other persons or entities identified per Sudhir Soni
in any manner whatsoever by or on behalf of
Partner
the Funding Party (“Ultimate Beneficiaries”)
Membership Number: 41870
or provide any guarantee, security or the like Place of Signature: Mumbai
on behalf of the Ultimate Beneficiaries; and Date: May 18, 2022 UDIN: 22041870AJEHPW9262

ITC Limited REPORT AND ACCOUNTS 2022 315

Annexure 1  referred to in paragraph 1 under the heading “Report
on Other legal and Regulatory Requirements” of our report of even date
Re: ITC Limited (the “Holding Company”)
In terms of the information and explanations sought by us and given by the Holding Company and the books of account
and records examined by us in the normal course of audit and to the best of our knowledge and belief and based on the
consideration of report of respective auditors of the subsidiary companies, associates and joint ventures incorporated in
India, we state that:
(xxi) There are no qualifications or adverse remarks by the respective auditors in their report on Companies
(Auditors Report) Order, 2020 of the companies included in the consolidated financial statements. As indicated in
Note 28 (ii)(d) of the Ind AS Consolidated financial statements, in respect of a joint venture, consolidated based on
management accounts, the audit report under Companies (Auditors Report) Order, 2020 of the company has not
been issued till the date of our auditor’s report.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E / E300003
per Sudhir Soni
Partner
Membership Number: 41870
Place of Signature: Mumbai
Date: May 18, 2022 UDIN: 22041870AJEHPW9262

Annexure 2  to the Independent Auditor’s Report of even date on

the Consolidated Financial Statements of ITC Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of ITC Limited (hereinafter referred to as the “Holding
Company”) as of and for the year ended March 31, 2022, we have audited the internal financial controls with reference to
consolidated financial statements of the Holding Company and its subsidiaries (the Holding Company and its subsidiaries
together referred to as “the Group”), its associates and joint ventures, which are companies incorporated in India, as of
that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the companies included in the Group, its associates and joint ventures, which are
companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the
internal control over financial reporting criteria established by the Holding Company considering the essential components
of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued
by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Holding Company’s internal financial controls with reference to consolidated
financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, specified under
Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both, issued by ICAI. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether adequate internal financial controls with reference to consolidated financial
statements was established and maintained and if such controls operated effectively in all material respects.

316 ITC Limited REPORT AND ACCOUNTS 2022

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
with reference to consolidated financial statements and their operating effectiveness. Our audit of internal financial controls
with reference to consolidated financial statements included obtaining an understanding of internal financial controls with
reference to consolidated financial statements, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on
the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of
their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit
opinion on the internal financial controls with reference to consolidated financial statements.

Meaning of Internal Financial Controls With Reference to Consolidated Financial Statements

A company’s internal financial control with reference to consolidated financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal financial control with reference
to consolidated financial statements includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets
that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to Consolidated Financial Statements
Because of the inherent limitations of internal financial controls with reference to consolidated financial statements,
including the possibility of collusion or improper management override of controls, material misstatements due to error or
fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to
consolidated financial statements to future periods are subject to the risk that the internal financial controls with reference
to consolidated financial statements may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

Opinion
In our opinion, the Group, its associates and joint ventures, which are companies incorporated in India, have, maintained
in all material respects, adequate internal financial controls with reference to consolidated financial statements and
such internal financial controls with reference to consolidated financial statements were operating effectively as at
March 31, 2022, based on the internal control over financial reporting criteria established by the Holding Company
considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

Other Matters
Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls
with reference to consolidated financial statements of the Holding Company, in so far as it relates to these ten subsidiaries,
six associates and two joint ventures, which are companies incorporated in India, is based on the corresponding reports of
the auditors of such subsidiaries, associates and joint ventures incorporated in India.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E / E300003
per Sudhir Soni
Partner
Membership Number: 41870
Place of Signature: Mumbai
Date: May 18, 2022 UDIN: 22041870AJEHPW9262

ITC Limited REPORT AND ACCOUNTS 2022 317

Ten Years at a Glance
Standalone Operating Results FY13 - FY22 (` in Crores)
Year ended 31st March FY13 FY14 FY15 FY16$ FY17$ FY18$ FY19$ FY20$ FY21$ FY22$
Gross Sales Value (net of rebates & discounts) # 47755 53889 57799 60196 64174 67082 75309 76097 74979 90104
Gross Revenue from sale of products &
services # 41810 46713 49965 51582 55002 43957 45221 46324 48151 59101
Total Income # 43044 48176 51932 53714 57434 46460 48269 49821 51776 62336
EBITDA 10628 12455 13474 13715 14578 15541 17306 17904 15523 18934
PBT 10684 12659 13998 14434 15503 16439 18444 19299 17164 19830
Exceptional items 413 (132)
PBT after Exceptional Items 10684 12659 13998 14434 15503 16852 18444 19167 17164 19830
Tax 3266 3874 4390 5106 5302 5628 5980 4031 4133 4772
PAT 7418 8785 9608 9328 10201 11223 12464 15136 13032 15058
Interim + Proposed Dividends * 4853 5583 6030 8233 6945 7577 8498 12477 13230 14172
- Ordinary Dividend 4853 5583 6030 6296 6945 7577 8498 12477 13230 14172
- Special Dividend 1937
Earnings Per Share **
Actual (`) 9.39 11.05 11.99 11.59 8.40 9.20 10.17 12.31 10.59 12.22
Adjusted (`) @ 6.26 7.36 7.99 7.73 8.40 9.20 10.17 12.31 10.59 12.22
Dividend Per Share **
Actual - Ordinary (`) 5.25 6.00 6.25 6.50 4.75 5.15 5.75 10.15 10.75 11.50
Actual - Special (`) 2.00
Adjusted - Ordinary (`) @ 3.50 4.00 4.17 4.33 4.75 5.15 5.75 10.15 10.75 11.50
Adjusted - Special (`) @ 1.33
$ FY16 to FY22 as per Indian Accounting Standards (Ind AS); previous GAAP for earlier years.
# Gross Sales Value (net of rebates & discounts) has been provided to facilitate comparison as the figures of Gross Revenue from sale of products & services and Total Income are not
comparable consequent to the introduction of Goods & Services Tax with effect from 1st July 2017, which replaced Central Excise (other than National Calamity Contingent Duty on
cigarettes), Value Added Tax etc.
* Including Dividend Distribution Tax, where applicable.
** Based on number of shares outstanding at the year end; reflects the impact of Corporate Actions.
@ To facilitate like-to-like comparison, adjusted for 1:2 Bonus Issue in FY17.

Note : Financials for FY21 & FY22 are to be viewed in the context of unprecedented disruptions in certain operating segments of the Company due to the COVID-19 pandemic (Please refer
to Report of the Board of Directors & Management Discussion and Analysis for details).

Standalone Equity, Liabilities and Assets FY13 - FY22

(` in Crores)
As at 31st March FY13 FY14 FY15 FY16$ FY17$ FY18$ FY19$ FY20$ FY21$ FY22$
Equity
Share capital 790 795 802 805 1215 1220 1226 1229 1231 1232
Other equity 21498 25467 29934 40851 44126 50180 56724 62800 57774 60168
Shareholders’ funds (Net Worth) 22288 26262 30736 41656 45341 51400 57950 64029 59005 61400
Non-current liabilities
Borrowings 66 51 39 26 18 11 8 6 5 5
Deferred tax liabilities (Net) 1204 1297 1632 1867 1872 1918 2044 1618 1728 1667
Non-current liabilities (others) ^ 129 115 108 127 155 195 174 493 669 543
Current liabilities
Borrowings @@ 11 15 14 16 8 7 3 2 … 1
Proposed dividend (including tax) 4853 5583 6030
Current liabilities (others) ^ 5466 5906 5637 6339 6822 8850 9619 9087 10173 11477
Total Equity and Liabilities 34017 39229 44196 50031 54216 62381 69798 75235 71580 75093
Non-current assets
Property, plant and equipment, intangible
assets (including capital work-in-progress,
intangible assets under development),
investment property and right of use assets ^ 12697 14309 16293 16430 18417 20592 21888 23298 25521 25688
Non-current investments 2001 2512 2442 6853 8486 13494 14071 13456 12937 15657
Non-current assets (others) 1728 1480 1506 3515 2776 3792 4269 1974 1306 2806
Current assets
Current investments 5059 6311 5964 6471 10100 9903 12507 17175 14047 11625
Cash and cash equivalents and Other bank
balances 3615 3289 7589 5639 2747 2595 3769 6843 4002 3878
Current assets (others) 8917 11328 10402 11123 11690 12005 13294 12489 13767 15439
Total Assets 34017 39229 44196 50031 54216 62381 69798 75235 71580 75093
Net Worth Per Share (`) * 18.80 22.01 25.56 34.51 37.33 42.12 47.27 52.09 47.94 49.82
$ FY16 to FY22 as per Ind AS; previous GAAP for earlier years.
* To facilitate like-to-like comparison, adjusted for 1:2 Bonus Issue in FY17.
Equity includes impact of :
FY17 - 1:2 Bonus Issue (` 403 Crores).
FY15 - 87,761 Ordinary Shares of ` 1.00 each issued pursuant to Scheme of Amalgamation of Non-Engineering Business of WIMCO Limited with the Company.
^ Includes right of use assets and lease liabilities from FY20 upon transition to Ind AS-116, “Leases”.
@@ To facilitate like-to-like comparison, figures for earlier years have been regrouped in line with amendment to Schedule III to the Companies Act, 2013.

318 ITC Limited REPORT AND ACCOUNTS 2022

 REPORT AND ACCOUNTS 2022

Financial Highlights

Gross Sales Value# ` Crores EBITDA ` Crores

18934
90104

17904
17306
15541

15523
76097
75309

74979

14578
13715
67082

13474
64174

12455
60196
57799
47755

53889

10628
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
# Refer Note to
Ten Years at a Glance

Segment Revenue - FMCG - Others ` Crores Segment EBITDA - FMCG - Others ` Crores
15994

1449
14728

1317
12844
12505
11329
10512
9731

914
9038
8122

688
7012

456
306

265
212
44

165

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

Dividend ` Crores Earnings Per Share and Dividend Per Share ` Per Share
Earnings Per Share
Ordinary Dividend Dividend Per Share
1 6 0 0 0
Special Dividend Special Dividend Per Share

1 4 0 0 0

1 2 0 0 0

1 0 0 0 0
12.31

12.22
14172

8 0 0 0
11.50
1937

13230

10.75
10.59
12477

10.15
1.60

10.17

6 0 0 0
9.20
8498

8.40
7577

7.99

7.73
7.36
6945

6.93

4 0 0 0
6296
6030

6.26
5583

6.21
5.72
4853

5.22
4.68

5.01
4.10

2 0 0 0

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Includes Dividend Distribu�on Tax, where applicable Includes Dividend Distribu�on Tax, where applicable

These graphs depict the standalone financial position

Notes:
• Financials for FY21 & FY22 are to be viewed in the context of unprecedented disruptions in certain operating segments of the Company
due to the COVID-19 pandemic (Please refer to Report of the Board of Directors & Management Discussion and Analysis for details).
• EPS and DPS have been adjusted for impact of corporate action to facilitate like-to-like comparison.
• FY16 to FY22 as per Ind AS; previous GAAP for earlier years.
 Business Responsibility
REPORT AND ACCOUNTS 2022 and Sustainability Report

Business Responsibility
and Sustainability Report

Section A General Disclosures II

Section B Management and Process Disclosures VIII

Section C Principle wise Performance Disclosure XII

Businesses should conduct and govern themselves with integrity, and in

Principle 1 XII
a manner that is Ethical, Transparent and Accountable

Businesses should provide goods and services in a manner that is

Principle 2 XIII
sustainable and safe

Businesses should respect and promote the well-being of all employees,

Principle 3 XVI
including those in their value chains

Businesses should respect the interests of and be responsive to all its

Principle 4 XXI
stakeholders

Principle 5 Businesses should respect and promote human rights XXIV

Businesses should respect and make efforts to protect and restore the
Principle 6 XXVIII
environment

Businesses, when engaging in influencing public and regulatory policy,

Principle 7 XXXIV
should do so in a manner that is responsible and transparent

Principle 8 Businesses should promote inclusive growth and equitable development XXXVI

Businesses should engage with and provide value to their consumers in

Principle 9 XL
a responsible manner

I
Business Responsibility
and Sustainability Report REPORT AND ACCOUNTS 2022

Section A: General Disclosures

I. Details of the listed entity
1. Corporate Identity Number L16005WB1910PLC001985
(CIN) of the Company

2. Name of the Company ITC Limited

3. Year of Incorporation 1910

4. Registered office address

Virginia House, 37 Jawaharlal Nehru Road, Kolkata 700 071
5. Corporate office address
6. E-mail id [email protected]
7. Telephone +91 33 2288 9371
8. Website www.itcportal.com
9. Financial year for which 2021-22
reporting is being done
10. Name of the Stock National Stock Exchange of India Limited (‘NSE’), BSE Limited (‘BSE’),
Exchange(s) where shares The Calcutta Stock Exchange Limited (‘CSE’)
are listed

11. Paid-up capital `1232.33 crores (As on 31.03.2022)

Name and contact details of Ms. Madhulika Sharma
12. the person who may be con- Chief Sustainability Officer
tacted in case of any queries [email protected]
on the BRSR report +91 33 2288 9371
13. Reporting boundary The financial disclosures made in this report are on a standalone basis, and
are excerpted from the Company’s Report and Accounts 2022. The data related
to social performance is on a standalone basis.
The environmental disclosures are based on performance of Company’s
Businesses, certain subsidiaries and associates, and key Third-Party
Manufacturers (TPMs). The details are available in ‘About this Report’ section
of ITC’s Sustainability & Integrated Report 2022.

II. Products/services
14. Details of business activities:

S. Description of % of Turnover
Description of Business Activity
No. Main Activity of the Entity
1. FMCG Cigarettes: Cigarettes, Cigars etc. 39.68%

Others: Branded Packaged Foods Businesses (Staples & Meals;

Snacks; Dairy & Beverages; Biscuits & Cakes; Chocolates, Coffee & 27.01%
Confectionery); Personal Care Products; Education and Stationery
Products; Safety Matches and Agarbattis; Apparel.
2. Hotels Hoteliering. 2.16%
3. Agri Business Agri-commodities such as wheat, rice, spices, coffee, soya and leaf 20.52%
tobacco.
4. Paperboards, Paperboards, Paper including Specialty Paper & Packaging including 10.63%
Paper & Packaging flexibles.

II
 Business Responsibility
REPORT AND ACCOUNTS 2022 and Sustainability Report

15. Products/Services sold by the entity:

S. NIC Code % of Total Turnover

Product/Service
No. Contributed

1 Cigarettes: Cigarettes, Cigars etc. 12003, 21002, 46307 39.68%

2 Others: Branded Packaged Foods 10202, 10304, 10308, 10402,

Businesses (Staples & Meals; Snacks; 10501, 10502, 10504, 10509,
Dairy & Beverages; Biscuits & Cakes; 10611, 10612, 10712, 10732, 27.01%

Chocolates, Coffee & Confectionery); 10733, 10735, 10740, 10750,

Education and Stationery Products; 10792, 10795, 10796, 10798,
Personal Care Products; Safety 20231, 20233, 20234, 20236,
Matches and Agarbattis; Apparel. 20237, 20239, 20293, 46491
46496, 46497, 46909, 47711

3 Hoteliering 55101, 56101, 56301, 74909, 2.16%

47110, 47190, 68200, 77400,
79900, 96010, 96020, 96905

4 Agri-commodities such as wheat, rice, 12001, 10202, 10209, 10302, 20.52%

spices, coffee, soya and leaf tobacco. 10304, 10406, 10611, 10795,
20213, 46201, 46207, 46301,
46305, 46306, 47300

5 Paperboards, Paper including Specialty 17015, 17016, 17093, 17022, 10.63%

Paper & Packaging including flexibles. 17029, 22203

III. Operations

16. Number of locations where plants and/or operations/offices of the entity are situated.

The Company’s Businesses and operations are spread across the country. Details of plant locations, including hotels
owned/operated by the Company, are provided under sections ‘Shareholder Information’ in Company’s Report and
Accounts 2022, and ‘About this Report’ section of the Company’s Sustainability & Integrated Report 2022.

17. Markets served by the entity

a. Number of locations

Location Number

National (No. of States) Pan-India

International (No. of Countries) ITC exports to over 100 countries

b. What is the contribution of exports as a percentage of the total turnover of the entity?

FY 2021-22 15.77%

FY 2020-21 10.75%

c. A brief on types of customers

ITC is one of India’s foremost private sector companies and a diversified conglomerate with 13 businesses spanning
FMCG, Hotels, Paperboards, Paper & Packaging and Agri Businesses, and operates across both B2C and B2B
segments.

III
Business Responsibility
and Sustainability Report REPORT AND ACCOUNTS 2022

IV. Employees
18. Details as at the end of Financial Year:
a. Employees and workers (including differently abled):
During FY 2021-22, the Company employed 49,342 employees, out of which 5,543 were female employees.

S. Male Female
Particulars Total (A)
No. No. (B) % (B/A) No. (C) % (C/A)
EMPLOYEES
1. Permanent (D) 23,829 21,568 91% 2,261 9%
2. Other than Permanent (E) 25,513 22,231 87% 3,282 13%
3. Total employees (D + E) 49,342 43,799 89% 5,543 11%
WORKERS
4. Permanent (F) 12,734 12,102 95% 632 5%
5. Other than Permanent (G) 25,317 22,068 87% 3,249 13%
6. Total workers (F + G) 38,051 34,170 90% 3,881 10%
Note: Definition of employee clustering is as under:
• Permanent Employees include Management, Non-Management and Workers • Other than Permanent Employees include Service
Provider Personnel (SPP), Fixed Term Contract (FTC)/Fixed Term Retainer (FTR) (Management/Non-management, worker) • Permanent
Workers include only Workers • Other than Permanent Workers include SPP, FTC (Worker) • Trainees and Apprentices not included in the
Workforce
b. Differently abled Employees and workers:
During FY 2021-22, the Company employed 123 differently abled employees.

S. Total
Particulars Male Female
No. (A)

No. (B) % (B/A) No. (C) % (C/A)

DIFFERENTLY ABLED EMPLOYEES
1. Permanent (D) 25 21 84% 4 16%
2. Other than Permanent (E) 98 69 70% 29 30%
3. Total differently abled employees (D + E) 123 90 73% 33 27%
DIFFERENTLY ABLED WORKERS
4. Permanent (F) 17 15 88% 2 12%
5. Other than Permanent (G) 32 31 97% 1 3%
6. Total differently abled workers (F + G) 49 46 94% 3 6%

19. Participation/Inclusion/Representation of women

Total (A) No. and percentage of Females
No. (B) % (B/A)
Board of Directors 16 2 12.50%
Key Managerial Personnel* 6 0 0
* Comprising Chairman & Managing Director, Wholetime Directors, Chief Financial Officer and Company Secretary

20. Turnover rate for permanent employees and workers

In FY 2021-22, the overall attrition (voluntary separation, retirement, termination and abandonment of services)
across employees was 10%. Gender-wise attrition stood at 9% for male employees and 18% for female employees.
FY 2021-22 FY 2020-21 FY 2019-20
Male Female Total Male Female Total Male Female Total
Permanent Employees 9% 18% 10% 7% 15% 8% 10% 19% 11%
Permanent Workers 6% 25% 7% 6% 22% 7% 7% 33% 8%
Note: The attrition amongst female workforce is higher due to personal and contextual reasons such as marriage, re-location, etc.

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V. Holding, Subsidiary and Associate Companies (including joint ventures)

21. (a) Names of holding/subsidiary/associate companies/joint ventures
S. Name of the Holding/Subsidiary/ Indicate Whether % of Shares Does the Entity Indicated
No. Associate Companies/ Holding/ Held by at Column A, Participate in
Joint Ventures (A) Subsidiary/ Listed Entity* the Business Responsibility
Associate/ (Refer Note) Initiatives of the Listed Entity?
Joint Venture (Yes/No)**
1 ITC Infotech India Limited Subsidiary 100.00 Yes
2 ITC Infotech Limited Subsidiary 100.00 No
3 ITC Infotech (USA), Inc. Subsidiary 100.00 No
4 Indivate Inc. Subsidiary 100.00 No
5 Surya Nepal Private Limited Subsidiary 59.00 Yes
6 Technico Agri Sciences Limited Subsidiary 100.00 Yes
7 Technico Pty Limited Subsidiary 100.00 No
8 Technico Technologies Inc. Subsidiary 100.00 No
9 Technico Asia Holdings Pty Limited Subsidiary 100.00 No
10 Technico Horticultural Subsidiary 100.00 No
(Kunming) Co. Limited
11 Srinivasa Resorts Limited Subsidiary 68.00 Yes
12 Fortune Park Hotels Limited Subsidiary 100.00 No
13 Landbase India Limited Subsidiary 100.00 Yes
14 Bay Islands Hotels Limited Subsidiary 100.00 Yes
15 WelcomHotels Lanka (Private) Limited Subsidiary 100.00 No
16 Russell Credit Limited Subsidiary 100.00 No
17 Greenacre Holdings Limited Subsidiary 100.00 No
18 Wimco Limited Subsidiary 100.00 No
19 Gold Flake Corporation Limited Subsidiary 100.00 No
20 ITC Investments & Holdings Limited Subsidiary 100.00 No
21 MRR Trading & Investment Subsidiary 100.00 No
Company Limited
22 North East Nutrients Private Limited Subsidiary 76.00 Yes
23 Prag Agro Farm Limited Subsidiary 100.00 No
24 Pavan Poplar Limited Subsidiary 100.00 No
25 ITC IndiVision Limited Subsidiary 100.00 No
26 Espirit Hotels Private Limited Joint Venture 26.00 No
27 Logix Developers Private Limited Joint Venture 27.90 No
28 ITC Essentra Limited Joint Venture 50.00 No
29 Maharaja Heritage Resorts Limited Joint Venture 50.00 No
30 Gujarat Hotels Limited Associate 45.78 Yes
31 International Travel House Limited Associate 48.96 No
32 Russell Investments Limited Associate 25.43 No
33 Divya Management Limited Associate 33.33 No
34 Antrang Finance Limited Associate 33.33 No
35 ATC Limited Associate 47.50 Yes
36 Delectable Technologies Private Associate 27.34# No
Limited
* held directly or through subsidiary companies.
#
on a fully diluted basis.
Note: Refer Note 28(ii) of Consolidated Financial Statements forming part of Report and Accounts 2022, for further details on subsidiaries,
associates and joint ventures.
** For details, refer to ‘About this Report’ section of the Company’s Sustainability & Integrated Report 2022.

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VI. CSR Details

22 (i) Whether CSR is applicable as per section 135 of Companies Act, 2013: (Yes/No).
Yes, CSR is applicable as per Section 135 of Companies Act, 2013.
(ii) Turnover of the Company for the year ended 31st March, 2022 - ` 59,101.09 crores
(iii) Net worth of the Company as at 31st March, 2022 - ` 60,545.55 crores (computed as per the Companies Act, 2013)
VII. Transparency and Disclosures Compliances
23. Complaints/grievances on any of the principles (Principles 1 to 9) under the National Guidelines on
Responsible Business Conduct (NGRBC).

Stakeholder Grievance
group from whom Redressal FY  2021-22
complaint is Mechanisms in
received Place (Yes/No)
Number of complaints Number of complaints
filed during the year pending resolution at close Remarks
of the year

Communities Yes. ITC’s Social Investments Programme (SIP) has a structured process of engaging with the
communities to get feedback on the interventions and also understand if they have any views,
issues, complaints and grievances related to these interventions. During FY 2021-22,
no grievances were raised by the communities during such interactions.

Shareholders and Yes. The Company has an Investor Service Centre (‘ISC’) which is registered with the SEBI as
Investors Category II Share Transfer Agent for providing in-house share registration and related services to
the Shareholders and Investors. ISC has effective systems and processes in place to ensure prompt
redressal of investor grievances, as follows:

(a) The Head of Investor Service Centre of the Company is responsible for redressal of investor
grievances.

(b) The Company has a specific e-mail address earmarked for receiving investor complaints which
is [email protected].

(c) The ‘Investor Charter’ of the Company and the status of investor complaints received by the
Company are available on its website.

(d) A Board Level Committee viz., the Security Holders Relationship Committee, has been
mandated to oversee redressal of investor grievances, and review adherence to the service
standards adopted by the Company in respect of its in-house share registration activities.

(e) ISC has a ‘Complaint Identification Policy’ for identification of investor complaints. Further, ISC
attends to shareholder/investor complaints within five working days, except where constrained
by disputes or legal impediments.

(f) Details of investor complaints received by the Company are filed on a quarterly basis with
the Stock Exchanges where the Company’s shares are listed, and with the SEBI on a
half-yearly basis.

During FY 2021-22, one complaint relating to delay in recording of Permanent Account Number of a
Shareholder was received and promptly resolved.

There were no shareholder/investor complaints pending for resolution at the end of the year.

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Employees and Yes. To address employee concerns and complaints pertaining to human rights and labour
workers practices, a Grievance Redressal Procedure with appropriate systems and mechanisms
has been instituted across ITC units. It aims to facilitate open and structured discussions
on grievances raised on labour practices and human rights. The implementation is ensured
by Divisional/SBU Chief Executives, through members of the respective Management
Committees.

During FY 2021-22, there were 212 complaints received across the Businesses, and 206 such
complaints were resolved. 6 are pending resolution at the close of the year.

Consumers, Yes. Robust systems have been put in place across ITC Businesses to continuously engage
Shoppers & with consumers for gathering feedback and address their concerns, if any, in a timely manner.
Retailers A dedicated customer interactions team is in place to address any product related query/
complaint. Several communication channels like email, telephone number and feedback
forms are provided to the consumers. In addition, the Company has an online reputation
management team which interacts with consumers via social media channels, and responds
to their queries in a real time manner. A Customer Relationship Management (CRM) platform
has been implemented for capturing customer complaints, queries, feedback and suggestions
received across channels. The CRM platform also provides consumer insights for bringing
about process related changes, and system enhancements for improving the CSAT (Customer
Satisfaction) scores.

During FY 2021-22, around 10,000 complaints were received across Businesses, and more
than 97% of these were resolved as on 31st March, 2022.

Value Chain Yes. As per the Company’s Code of Conduct for Suppliers and Service Providers, they are
Partners expected to bring to the notice of the manager concerned at ITC, any actual or suspected breach
of the Code. Suppliers and Service Providers are encouraged to report any known or suspected
improper behaviour of ITC employees. Such reports are treated in a confidential manner.

The Company policies are hosted on the website at https://www.itcportal.com/about-itc/policies/index.aspx

24. Overview of the entity’s material responsible business conduct issues

In order to identify the material issues including environmental and social ones, and understand the relative
importance of these issues to its stakeholders and ITC Businesses, the Company conducts materiality assessments,
and accordingly devise specific action plans for addressing each material issue at regular intervals. Such
assessments help in identifying key drivers for value creation over a period of time. In FY 2019-20, ITC engaged with
a diverse set of internal and external stakeholders in order to update its materiality matrix. Going forward, ITC will
continue to engage with its key internal and external stakeholders on an ongoing basis to ensure a more dynamic
materiality assessment.

As a diversified enterprise, ITC continues to focus on a system-based approach to Business Risk Management. The
management of risk is embedded in the corporate strategies of developing a portfolio of world-class Businesses
that best match organisational capability with market opportunities, focusing on building distributed leadership
and succession planning processes, nurturing talent and enhancing organisational capabilities through timely
developmental inputs.

For more information on Risk Management Framework and ITC’s materiality matrix, refer to the ‘Risk Management
Section’ of the Report of the Board of Directors forming part of ITC’s Report and Accounts 2022, and ‘Strategic Risk
Management’ and ‘Material Issues’ sections of ITC Sustainability & Integrated Report 2022.

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Section B: Management and Process Disclosures

The National Guidelines for Responsible Business Conduct (NGRBC) as brought out by the Ministry of Corporate
Affairs advocates nine principles referred as P1-P9 as given below:
P1 Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical,
Transparent and Accountable
P2 Businesses should provide goods and services in a manner that is sustainable and safe
P3 Businesses should respect and promote the well-being of all employees, including those in their value chains
P4 Businesses should respect the interests of and be responsive to all its stakeholders
P5 Businesses should respect and promote human rights
P6 Businesses should respect and make efforts to protect and restore the environment
P7 Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is
responsible and transparent
P8 Businesses should promote inclusive growth and equitable development
P9 Businesses should engage with and provide value to their consumers in a responsible manner

Disclosure Questions P1 P2 P3 P4 P5 P6 P7 P8 P9

Policy and management processes

1. a. Whether your entity’s policy/ Yes, ITC is guided by a comprehensive set of Board-approved Policies that
policies cover each principle and its cover NGRBC principles (P1 to P9) and the underlying core elements.
core elements of the NGRBCs. (Yes/No) To achieve its Sustainability 2.0 vision, the Company continues to strengthen
b. Has the policy been approved by the its management approach which is guided by a comprehensive set of
Board? (Yes/No) Sustainability Policies that are being implemented across the organisation.
The Company is also strengthening the mechanisms of engagement
c. Web Link of the Policies, if available with key stakeholders, identification of material sustainability issues and
2. Whether the entity has translated the progressively monitoring and mitigating the impacts along the value chain
policy into procedures. (Yes/No) of each Business. The Company will continue to update these systems and
processes in line with evolving disclosure standards and Environmental,
3. Do the enlisted policies extend to Social and Governance (ESG) requirements.
your value chain partners?
The overall responsibility for ensuring the implementation of Sustainability
(Yes/No)
Policies resides with the Divisional/Strategic Business Unit (SBU) Chief
Executives and the Heads of Corporate Functions who work with their
respective management teams. Various committees designated with
specific responsibilities have also been constituted for operationalising
these Policies. The Sustainability Compliance Review Committee has
the overall responsibility to monitor and evaluate compliance with these
Policies. The overall responsibility for implementation of ITC’s CSR Policy
rests with the Corporate Social Investments Programme (SIP) Team.
The Policies covering these principles are available on the Company’s
corporate website www.itcportal.com under ‘Our Policies’ section.

4. Name of the national and • ITC’s manufacturing facilities have well-defined Environment, Health
international codes/certifications/ and Safety (EHS) and quality management systems in place, and are
labels/standards (e.g. Forest aligned with International Standards like ISO 14001: Environment
Stewardship Council, Fairtrade, Management System, OHSAS 18001/ISO 45001: Occupational Health
Rainforest Alliance, Trustea) standards and Safety Management Systems, SA 8000: Social Accountability, and
(e.g. SA 8000, OHSAS, ISO, BIS) adopted FSSC 22000/ISO 22000/HACCP: Food Safety Management System.
by your entity and mapped to each • ITC, with its commitment of procuring sustainable raw materials,
principle. endeavours to integrate sustainability in the supply chains of
its products and services. ITC collaborates with national and
international sustainability certification bodies on responsible
sourcing certification of key agri raw materials. For instance,
Agri Business continues to increase the scale and scope of crops
covered under various sustainable farm certifications like Rainforest
Alliance, Global G.A.P Certification, Fairtrade and USDA Organic.

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• ITC’s commitment to environmental stewardship is reflected

in its role of pioneering the Green Building movement in
India. 38 buildings of the Company have achieved Platinum
certification USGBC (U.S. Green Building Council)/IGBC
(Indian Green Building Council). As a testament to the
Company’s ‘Triple Bottom Line’ philosophy and ‘Responsible
Luxury’ ethos, ITC Windsor, Bengaluru achieved the
distinction of being the first hotel in the world to achieve
LEED® Zero Carbon Certification. ITC Grand Chola, Chennai
(largest hotel in the world to receive this) and ITC Gardenia,
Bengaluru also received the LEED® Zero Carbon certification
during the year. These properties are the first three hotels
in the world to receive the LEED® Zero Carbon Certification.
The Company’s Hotels Business has also demonstrated high
levels of resource efficiency by achieving the LEED® Platinum
certification for its luxury collection hotels.
• The Hotels Business continued to reinforce its commitment
towards health & hygiene with ‘WeAssure’ – a programme
designed in collaboration with medical professionals &
disinfection experts to reassure guests and to provide best-
in-class experience in hygiene and safety at the Company’s
iconic Hotels. The programme has received a Platinum Level
certification from M/s. DNV.
• ITC is also committed to getting all its sites in High
Water Stressed Areas certified as per the International
Water Stewardship Standard by AWS (Alliance for Water
Stewardship) by 2035. ITC’s Paperboards & Specialty Papers
Business unit at Kovai was only the second facility in the
world and the first in India to be awarded the AWS Platinum-
level certification in FY 2019-20, the highest recognition for
water stewardship in the world.
For more information on Environment, Social, Occupational
Health and Safety, Food Safety Certifications and Sustainable
Farming Certifications, refer to ‘Certifications’ section of ITC
Sustainability & Integrated Report 2022.

5. Specific commitments, goals and targets set In line with its Sustainability 2.0 agenda, ITC has set short-to-
by the entity with defined timelines, if any. medium targets for key priority areas like climate change, water
6. Performance of the entity against the stewardship, plastic waste and circular economy, sustainable
specific commitments, goals and targets along agriculture, biodiversity conservation and sustainable livelihoods.
with reasons in case the same are In line with the above, ITC’s Businesses have targets for key
not met. performance indicators (KPIs) like specific energy consumption,
specific greenhouse gas emissions, specific water intake and
specific waste generation. In order to achieve these targets, all
ITC Units have established management systems which entail
regular monitoring of environmental KPIs, development of an
environmental management plan, and reviewing progress on
a regular basis to ensure that Businesses are on track with
respect to the agreed roadmap.
For more information on annual performance against the
Sustainability 2.0 targets, refer to ‘Sustainability 2.0 Ambitions: 2030
Targets’ section of ITC Sustainability & Integrated Report 2022.

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Governance, leadership and oversight

7. Statement by director responsible for the business responsibility report, highlighting ESG related challenges,
targets and achievements (listed entity has flexibility regarding the placement of this disclosure).

Please refer to the ‘Chairman’s Statement’ section in ITC Sustainability & Integrated Report 2022.
8. Details of the highest authority responsible At the highest level, the Board of Directors of the Company, led
for implementation and oversight of the by the Chairman & Managing Director, has the primary role of
Business Responsibility policy (ies). trusteeship to protect and enhance shareholder value through
strategic supervision of ITC. As trustees, the Board ensures that
the Company has clear goals aligned to shareholder value and
its growth, and also in line with its Sustainability agenda.
The CSR and Sustainability Committee of the Board, chaired
by the Chairman & Managing Director, reviews and oversees
implementation of the Sustainability Policies of the Company on
an annual basis. In addition, the Committee and the Board also
review the progress of implementation of the Company’s CSR
Programmes, on a half-yearly basis.
The Corporate Management Committee (CMC) of the Company
is the management body responsible for compliance with the
Sustainability Policies of the Company.
The CMC has constituted the Sustainability Compliance Review
Committee (SCRC), which monitors and evaluates compliance
with these Policies and places a quarterly report thereon for
review by the CMC.
The Chief Executives of Divisions / Strategic Business Units
(SBU), through members of the respective Management
Committees, and Heads of Corporate Functions, are responsible
for ensuring implementation of the Sustainability Policies of
the Company within their respective Division / SBU / Corporate
Function, and communication of these Policies to the employees.

9. Does the entity have a specified Committee Yes, as mentioned above, the CSR and Sustainability Committee
of the Board/ Director responsible for decision of the Board, inter alia, reviews, monitors and provides
making on sustainability related issues? strategic direction to the Company’s CSR and sustainability
(Yes/No). If yes, provide details. practices towards fulfilling its Triple Bottom Line objectives.
The Committee seeks to guide the Company in crafting unique
models to support creation of sustainable livelihoods together
with environmental regeneration.
The Committee also reviews the Business Responsibility and
Sustainability Report of the Company, and recommends the
same to the Board for adoption, and approves the Sustainability
& Integrated Report of the Company.
In addition, the Company has appointed a Chief Sustainability
Officer (CSO) who is, inter alia, responsible for periodic review of
material issues, scanning the external environment for evolving
sustainability trends and regulations, monitor the progress on
sustainability targets and facilitate the Businesses & Corporate
Functions in implementing sustainability initiatives. The CSO
reports to the Group Head of Sustainability who is also a CMC
Member and the Chairman of the SCRC. The CSO provides
progress report backs on the Company’s sustainability initiatives
to the senior leadership of the Company.

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10. Details of Review of NGRBCs by the Company:

Subject for Review Review of Principles undertaken by Director/

Committee of the Board/any other Committee and its
frequency.
Performance against above policies and follow up action As stated above, the SCRC is responsible for
monitoring and evaluating compliance with the
Sustainability Policies of the Company and placing
a quarterly report thereon for review by the CMC.
The CSR and Sustainability Committee also reviews
implementation of these Policies on an annual basis.

The Chief Executives of Divisions/Strategic Business

Units (SBU) and Heads of Corporate Functions are
responsible for ensuring implementation of the
Sustainability Policies of the Company within their
respective Division/SBU/Corporate Function. During the
year, most of the Sustainability Policies of the Company
were comprehensively reviewed and updated to reflect
the current practices followed by the Company and also
taking into account the evolving industry practices &
standards.
Compliance with statutory requirements of relevance to The Company is in compliance with applicable laws and
the principles, and, rectification of any non-compliances regulations.

11. Has the entity carried out independent assessment/ • ITC has been obtaining independent third-party
evaluation of the working of its policies by an external assurance for its Sustainability Reports since
agency? (Yes/No). If yes, provide name of the agency. 2004. In the reporting year, authenticity of the
data and systems disclosed in the Sustainability &
Integrated Report 2022 has been assured by M/s
Deloitte Haskins & Sells LLP, an independent third
party assurance provider. M/s Deloitte Haskins &
Sells LLP have provided the assurance as per the
International Standard for Assurance Engagements
(ISAE) 3000 at the ‘Reasonable Level’.

• ITC has computed its greenhouse gas (GHG)

inventory, including GHG emissions, biogenic
emissions and GHG removals, in accordance with
ISO 14064:2006. The GHG inventory of FY 2021-22
has been verified by M/s Deloitte Haskins & Sells
LLP at the ‘Reasonable Assurance’ level.

• In addition to above, relevant third-party

assessments and certifications are conducted
across Business units periodically.

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Section C: Principle wise Performance Disclosure

Principle 1
Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and
Accountable.
Essential Indicator
1. Percentage coverage by training and awareness programmes on any of the principles during the financial year

Total Number of Topics/Principles Covered % of Persons in Respective

Segment Training and Awareness Under the Training and Category Covered by the Awareness
Programmes held its Impact Programmes
Board of The Directors of the Company are briefed on the sustainability initiatives of the Company from time
Directors to time. The Directors are also updated on changes/developments in the domestic/global corporate
and industry scenario including those pertaining to statutes/legislation & economic environment
and on matters affecting the Company, to enable them to take well informed and timely decisions.

Key The Company periodically updates and familiarises employees on the following:
Managerial
1. ITC’s Code of Conduct which covers aspects such as Corporate Governance & Good Corporate
Personnel
Citizenship
Employees
2. Whistleblower Policy of the Company
other than
BoD and 3. Sustainability Policies of the Company
KMPs

Workers

2. Details of fines/penalties/punishment/award/ 4. Does the entity have an anti-corruption or anti-

compounding fees/settlement amount paid in bribery policy? If yes, provide details in brief and if
proceedings (by the entity or by directors/KMPs) available, provide a web-link to the policy.
with regulators/law enforcement agencies/judicial The Company’s Code of Conduct covers aspects relating
institutions, in the financial year, in the following to anti-corruption or anti-bribery. In terms of the said
format (Note: the entity shall make disclosures on the Code, the Company believes in conducting its business
basis of materiality as specified in Regulation 30 of in a transparent manner and does not indulge in bribery
SEBI (Listing Obligations and Disclosure Obligations) or corruption.
Regulations, 2015 and as disclosed on the entity’s The ITC Code of Conduct can be accessed on the
website): Company’s corporate website at
https://www.itcportal.com/about-itc/values/index.
Nil
aspx#sectionb5
3. Of the instances disclosed in Question 2 above, 5. Number of Directors/KMPs/employees/workers
details of the Appeal/Revision preferred in cases against whom disciplinary action was taken by any
where monetary or non-monetary action has been law enforcement agency for the charges of bribery/
appealed. corruption:
Not applicable Nil
6. Details of complaints with regard to conflict of interest:
FY 2021-22 FY 2020-21
Number Remarks Number Remarks
Number of complaints received in relation to issues of Nil - Nil -
conflict of interest of the Directors
Number of complaints received in relation to issues of Nil - Nil -
conflict of interest of the KMPs

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7. Provide details of any corrective action taken or in which their personal interests could conflict with the
underway on issues related to fines/penalties/action interests of the Company. The Code, inter alia, clarifies
taken by regulators/law enforcement agencies/ that conflict of interest may arise when (a) an employee
judicial institutions, on cases of corruption and or a family member (family member includes spouse,
conflicts of interest. children, siblings and parents) has a material interest
Not Applicable in an entity that has a business relationship with the
Company or is being evaluated for a commercial
Leadership Indicators transaction, or (b) an employee is in a position to benefit
1. Awareness programmes conducted for value chain someone with whom he / she has a close relationship,
partners on any of the Principles during the financial year: in relation to the Company’s business. However,
this is an area in which it is impossible to provide
ITC facilitates capacity building workshops for its key comprehensive guidance but the guiding principle is
value chain partners to educate, and create shared
that conflict, if any, or any potential conflict must be
awareness on key areas like human rights, labour
disclosed to higher management for guidance and
practices and sustainability.
action as appropriate.
2. Does the entity have processes in place to avoid/
Further, the Directors of the Company are required to
manage conflict of interests involving members of the
disclose to the Board, on an annual basis, whether they,
Board? (Yes/No) If Yes, provide details of the same.
directly or indirectly or on behalf of third parties, have
Yes, the ITC Code of Conduct requires the Directors, material interest in any transaction or matter directly
senior management and employees to avoid situations affecting the Company.

Principle 2
Businesses should provide goods and services in a manner that is sustainable and safe.

Essential Indicators sources of energy, technology absorption and the

expenditure incurred on Research and Development,
1. Percentage of R&D and capital expenditure (capex) refer to the ‘Disclosure on Conservation of Energy and
investments in specific technologies to improve the Technology Absorption’ forming part of the Report of
environmental and social impacts of product and the Board of Directors in the Company’s Report and
processes to total R&D and capex investments made Accounts 2022.
by the entity, respectively. `in Crores

The Company’s state-of-the-art ITC Life Sciences and FY 2021-22 FY 2020-21

Technology Centre (LSTC) in Bengaluru is at the core of Expenditure on R&D - Capital 20.17 12.12
driving science-led product innovation to support and Expenditure on R&D - 143.59 131.22
build ITC’s portfolio of world-class brands. The LSTC Revenue
team comprising over 350 highly qualified scientists, Total R&D Expenditure 163.76 143.34
with over 900 patents applications filed, have a mandate Capital Investment on 12.22 20.22
to work on future-ready science platforms, design Energy Conservation
differentiated products to address unique needs and Equipment
deliver superior benefits to Indian consumers.
2. a. Does the entity have procedures in place for
Centres of Excellence in Biosciences, Agrisciences sustainable sourcing?
and Materials, and robust research platforms such as
Yes, there are procedures in place for sustainable
Beauty & Hygiene, Heath & Wellness, Agro-forestry
sourcing. ITC has a Board approved Policy on
& Crop Sciences, Sustainable Packaging materials
‘Sustainable Supply Chain and Responsible Sourcing’
continue to drive world-class innovation.
and a ‘Code of Conduct for Suppliers and Service
In pursuit of environmental excellence, all Business Providers’. The Code reflects ITC’s commitment to
units continued their efforts to improve energy usage respect human rights across the supply chain. It
efficiencies and increase the share of renewable energy. upholds the spirit outlined in the International Labour
For more details on steps taken and efforts made Organisation Guidelines and United Nations Guiding
towards conservation of energy, utilising alternate Principles on Business and Human Rights. ITC, with

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its diverse and expanding portfolio of businesses, the end of life, for (a) Plastics (including packaging) (b)
prioritises embedding sustainability and building E-waste (c) Hazardous waste and (d) other waste.
resilience in the supply chain as part of its Sustainability ITC has achieved Plastic Neutrality in FY 2021-
2.0 vision. 22 by implementing an integrated solid waste
Farmers constitute a vital part of ITC’s supply chain, and management programme that incorporates unique and
the close linkages between ITC’s Businesses and Indian multidimensional initiatives. The Company collected
agriculture provides a unique opportunity to engage and sustainably managed more than 54,000 tonnes of
plastic waste across 35 States and Union Territories.
with farmers across the country and help address
The amount of plastic waste managed exceeded the
some of the sustainability challenges confronting them,
amount of plastic packaging utilised by ITC during the
and at the same time create sustainable and resilient
year, enabling the Company to achieve the milestone of
Agri-value chains for ITC’s Agri, FMCG and Paper
Plastic Neutrality.
Businesses.
For more than a decade, the Company has been running
Leveraging the Company’s enterprise strengths and its
a holistic 360° solid waste management programme
large presence in rural communities, ITC has, over the that is based on the principles of a circular economy and
years designed and implemented large scale programmes encompasses the entire waste value chain.
on sustainable agriculture. The focus of these interventions
ITC has adopted a multipronged approach to reduce
has been largely around improving farmer livelihoods,
plastic in the Company’s operations spanning FMCG,
increasing agricultural productivity, strengthening regional
Hotels, Paperboards and Packaging. This includes
water security and addressing the challenge of climate
creating robust next generation environment friendly
change and enhancing Agri-resilience.
packaging solutions, mega-scale waste collection
Note: For more details on ITC’s sustainable sourcing programmes under its flagship waste management
practices pertaining to key Agri value chains and key initiative ‘ITC WOW – Well Being Out of Waste’ as well
value chain partners like third party manufacturers, as focused interventions in rural areas; a culture of
refer to ‘Next-Generation Agriculture’ and ‘Inclusive plastic-free operations - in line with its philosophy
Value Chains’ sections of ITC Sustainability & Integrated of ‘Responsible Luxury’ to eliminate single use
Report 2022. plastic usage in ITC Hotels; and innovative models
for sustainability which have plastic reduction and
b. If yes, what percentage of inputs were sourced management at their core. Within its operations, ITC
sustainably? has been recycling more than 99% of the solid waste for
The supply chains of most ITC’s Businesses are more than a decade.
vertically integrated, which facilitate optimum For further details, refer to the ‘Sustainably Managing
utilisation of raw materials, recycling of waste as well Waste’ and ‘Mission Sunehra Kal for Sustainable &
as efficient logistics operations. Farmers constitute Inclusive Growth’ sections of ITC Sustainability &
a vital part of ITC’s supply chain. Accordingly, the Integrated Report 2022.
Company focuses extensively on enhancing the 4. Whether Extended Producer Responsibility (EPR)
sustainability of its Agri-based supply chain. During FY is applicable to the entity’s activities (Yes/No). If
2021-22, ITC processed around 2,500 kilo tonnes of raw yes, whether the waste collection plan is in line with
materials, out of which nearly 97% were sourced from the Extended Producer Responsibility (EPR) plan
Agro/Forestry based renewable sources. submitted to Pollution Control Boards? If not, provide
steps taken to address the same.
ITC’s leading Agri value chains are also certified as per
renowned global standards like Rainforest Alliance ITC is in compliance with the requirements of Plastic
(RFA), Global G.A.P Certification, Fairtrade, USDA Waste Management Rules, 2016 and subsequent
Organic and India Organic. amendments.

Note: For more details on ITC’s sustainable sourcing Leadership Indicators

practices, refer to the ‘Next-Generation Agriculture’, 1. Has the entity conducted Life Cycle Perspective/
‘Inclusive Value Chains’ and ‘Certifications’ sections of Assessments (LCA) for any of its products (for manufacturing
ITC Sustainability & Integrated Report 2022. industry) or for its services (for service industry)?
3. Describe the processes in place to safely reclaim The Company has initiated Life Cycle Assessments
your products for reusing, recycling and disposing at (LCA) of its products and services since 2010 with an

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objective to evaluate the impacts and identify areas designs, loading efficiencies in transportation. Studies
for improvement in the value chain. So far, LCAs have conducted on the selected products also provided
been carried out for key product categories from valuable insights which are duly considered for new
Paperboards and Specialty Papers Business (Carte product development and design. Several sustainable
Lumina, Safire Graphik, Liquid Packaging Board etc.), products were developed during the year. For example,
Personal Care Products Business (Superia Soap) and Savlon Pichkiao (easy-squeeze pack), an innovative
Branded Packaged Foods Businesses (Bingo! Potato pump-free format that is completely reusable, refillable
chips). LCA studies will continue to be used as a tool for and easy to carry, and made with 22% less plastic
assessing environmental footprint of products/services compared to ordinary pump pack was launched last
going forward. year. The pack also bagged the prestigious ‘Diamond
2. If there are any significant social or environmental Finalist Award’ at the Dow Packaging Innovation Awards
concerns and/or risks arising from production or 2021, demonstrating excellence across all the three
disposal of your products/services, as identified in the criteria of the award – Sustainability, Technological
Life Cycle Perspective/Assessments (LCA) or through Advancement and Enhanced User Experience.
any other means, briefly describe the same along with
3. Percentage of recycled or reused input material
action taken to mitigate the same.
to total material (by value) used in production (for
The Company has put in place robust guidelines and manufacturing industry) or providing services (for
standards, that are benchmarked against international service industry).
best practices, with defined Standard Operating
Nearly 97% of ITC’s input material is sourced from
Procedures (SOPs) for identifying and mitigating both
renewable sources consisting primarily of pulpwood
social and environmental risks. LCA studies have
also been carried out for some of the Company’s key and other Agri products. During FY 2021-22, the Kovai
products for identifying additional opportunities to Unit of ITC’s Paperboards & Specialty Papers Business
reduce environmental impact across the value chain. sourced over 85,000 tonnes of waste paper from
These assessments have enabled identification of external sources, which constituted over 75% of the
concrete solutions towards more efficient packaging Unit’s total input materials.

4. Of the products and packaging reclaimed at end of life of products, amount (in metric tonnes) reused, recycled,
and safely disposed.

During FY 2021-22, ITC expanded its plastic waste management programme across the country covering all plastic
waste categories including rigids, flexibles and Tetra Pak packaging waste. The Company collected and sustainably
managed more than 54,000 tonnes of plastic waste across 35 States and Union Territories. The amount of plastic
waste managed exceeded the amount of plastic packaging utilised by ITC during the year, enabling the Company to
achieve the milestone of Plastic Neutrality. In FY 2020-21, more than 31,000 tonnes of post-consumer plastic waste
from 24 States and Union Territories was collected and sustainably managed, which was equivalent to more than 80%
of plastic packaging films (flexibles) utilised by ITC during FY 2020-21.

The Company also has mechanisms to recover expired, damaged and discarded products from the market. Depending
on the product, both the product and the packaging material waste are sustainably recycled/safely disposed.

FY 2021-22 FY 2020-21
Reused Recycled Safely Disposed Reused Recycled Safely Disposed

Plastics Approx. Approx. Approx. Approx.

(including - -
5,400 MT 48,600 MT 2000 MT 29,000 MT
packaging)

5. Reclaimed products and their packaging materials (as percentage of products sold) for each product category.

Please refer to responses to Question 3 and 4 above.

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Principle 3
Businesses should respect and promote the well-being of all employees, including those in their value chains.

Essential Indicators
1. a. Details of measures for the well-being of employees:
Category % of Employees Covered by

Total Health Insurance Accident Maternity Paternity Day Care

(A) Insurance Benefits Benefits Facilities
Num- % (B/A) Num- % (C/A) Num- % (D/A) Num- % (E/A) Num- % (F/A)
ber (B) ber (C) ber (D) ber (E) ber (F)
Permanent Employees
Male 21,568 21,568 100% 21,568 100% - - 9,466 44% - -

Female 2,261 2,261 100% 2,261 100% 2,261 100% - - 2,261 100%

Total 23,829 23,829 100% 23,829 100% 2,261 100% - - 2,261 100%

b. Details of measures for the well-being of workers:

Category % of Workers Covered by
Total Health Accident Maternity Paternity Day Care
(A) Insurance Insurance Benefits Benefits Facilities
Num- % (B/A) Num- % (C/A) Num- % (D/A) Num- % (E/A) Num- % (F/A)
ber (B) ber (C) ber (D) ber (E) ber (F)
Permanent Workers
Male 12,102 12,102 100% 12,102 100% - - - - - -

Female 632 632 100% 632 100% 632 100% - - 632 100%

Total 12,734 12,734 100% 12,734 100% 632 100% - - 632 100%

2. Details of retirement benefits, for Current FY and Previous Financial Year.

Benefits FY 2021-22 FY 2020-21

No. of No. of Deducted and No. of No. of Deducted and
Employees Workers Deposited Employees Workers Deposited with the
Covered as Covered as with the Covered as Covered as Authority (Y/N/N.A.)
a % of Total a % of Total Authority a % of Total a % of Total
Employees Workers (Y/N/N.A.) Employees Workers

PF 100% 100% Y 100% 100% Y

Gratuity 100% 100% Y 100% 100% Y
ESI 11% 19% Y - - Y

3. Accessibility of workplaces improving infrastructure for eliminating barriers to

accessibility.
Are the premises/offices of the entity accessible to
differently abled employees and workers, as per the 4. Does the entity have an equal opportunity policy as
per the Rights of Persons with Disabilities Act, 2016? If
requirements of the Rights of Persons with Disabilities
so, provide a web-link to the policy.
Act, 2016? If not, whether any steps are being taken by
Yes, the Company has Policy on Diversity, Equity
the entity in this regard.
and Inclusion, which is available at https://www.
Our establishments are accessible to the differently itcportal.com/about-itc/policies/sustainability-policy.
abled, and we are continuously working towards aspx#EqualOpportunity

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5. Return to work and retention rates of permanent employees and workers that took parental leave.
Permanent Employees Permanent Workers
Gender Return to Work Rate Retention Rate Return to Work Rate Retention Rate
Male - - - -
Female 100% 98% 100% 100%

Total 100% 98% 100% 100%

6. Is there a mechanism available to receive and redress grievances for the following categories of employees and
worker? If yes, give details of the mechanism in brief.

Yes, ITC’s Grievance Redressal Procedure is available to employees and workers. The objective of the policy is to
facilitate open and structured discussion on employees’ work-related grievances with the intent of ensuring that the
grievance is dealt with in a fair and just manner whilst being in compliance with the Company’s policies. ITC’s open-
door practices encourage an amicable and fair resolution of grievances. Employees are encouraged to first discuss
the grievance with their immediate reporting authority, and attempt to arrive at a resolution before invoking a formal
grievance redressal mechanism.

Yes/No
(If yes, then give details of the mechanism in brief)
Permanent Workers As mentioned above
Permanent Employees As mentioned above

7. Membership of employees and worker in association(s) or Unions recognised by the listed entity:

FY 2021-22 FY 2020-21
Total No. of Employees/ % (B/A) Total No. of Employees/ %
Category Employees/ Workers in Respective Employees/ Workers in Respective (D/C)
Workers in Category, who are part of Workers in Category, who are part
Respective Association(s) or Union Respective of Association(s) or
Category (A) (B) Category (C) Union (D)
Total
23,829 10,670 45% 24,070
Permanent
10,490 44%
Employees

- Male 21,568 10,550 49% 21,883

- Female 2,261 120 5% 2,187

Total
12,734 10,670 84% 13,035
Permanent
10,490 80%
Workers
- Male 12,102 10,550 87% 12,461

- Female 632 120 19% 574

ITC believes that all employees are important stakeholders in the enterprise, and it is imperative to build a culture
of mutual trust and respect, interdependence, and meaningful engagement. This approach helps in building,
strengthening and sustaining harmonious employee relations across the organisation. It is ITC’s policy:

• To respect the dignity of the individual and the freedom of employees to lawfully organise themselves into interest
groups, independent of supervision by the management.

• To ensure that employees are not discriminated against for exercising this freedom in a lawful manner and
consistent with ITC’s core values.

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8. Details of training given to employees and workers:

*EHS Training all permanent employees for FY 2021-22 is 153,913 person-days training.
Category FY 2021-22
Total (A) On Health and Safety Measures On Skill Upgradation
No. (B) % (B/A) No. (C) % (C/A)
Employees & Workers Total of 25,586 person days training were imparted on EHS to employees &
workers. 4,422 unique employees & workers attended skill upgradation training.
437 unique employees & workers attended mental wellbeing training.

9. Details of performance and career development reviews of employees and workers.

FY 2021-22
Category
Total (A) No. (B) % (B/A)
Employees
Male 21,568 16,418 76%

Female 2,261 2,051 91%

Total 23,829 18,469 78%

Workers
Male 12,102 6,952 57%
Female 632 422 67%
Total 12,734 7,374 58%

10. Health and safety management system: providers’ employees, while continually investing in
state-of-the-art technology and in developing
a. Whether an occupational health and safety
human capital.
management system has been implemented by the
entity? (Yes/No). If yes, the coverage such system? EHS requirements are integrated at the design stage for
all new investments. Compliance with EHS standards
Yes, ITC has implemented occupational health and during the construction phase as well as in operation
safety management system. phase of ITC units, Hotels, Warehouses and Offices is
The Company believes that a safe and healthy work ensured by implementing project EHS management
environment is a pre-requisite for employee well-being, systems and through established EHS management
and the adoption of best practices in occupational systems with designated roles and responsibilities for
health and safety have a direct impact on its overall competent resources respectively.
performance. It helps in attracting and retaining quality b. What are the processes used to identify work-
talent, besides being the duty of the Company as a related hazards and assess risks on a routine and
responsible corporate citizen.
non-routine basis by the entity?
ITC endeavours that Environment, Health & Safety
ITC has identified the EHS Risk Management framework
(EHS) standards at all its units are ahead of applicable
as one of the integral steps towards building a robust
legislation and regulations, and Standards and Codes,
safety management system. This framework entails
and are benchmarked against international best
a set of processes for continual risk identification,
practices across sectors in which it operates. ITC’s
approach to occupational health & safety standards assessment and mitigation, with active participation
is articulated in the Board approved Environment, of the workforce in each of its facilities. Shop floor
Health and Safety Policy. It is based on an EHS processes in this regard include hazard spotting tours,
management system that emphasises on enhancing suggestion schemes, daily briefings and periodic EHS
EHS performance by setting objectives and targets and committee meetings in which employees participate. In
continually monitoring key performance indicators. addition, all ITC Units undergo periodic Environment,
Further, it promotes a culture of safety through Health & Safety audits at the Business as well as
behaviour change programmes and by providing Corporate level to verify compliance with standards.
appropriate training to employees as well as service Several national awards and certifications acknowledge

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ITC’s commitment and efforts towards providing a safe create an open and transparent safety culture across
and healthy workplace to all. ITC Units, employees are encouraged to participate and
discuss safety related issues in forums like periodic
c. Whether you have processes for workers to report
EHS Committee meetings and Departmental Open
the work-related hazards and to remove themselves
Forums.
from such risks. (Y/N)
d. Do the employees/worker of the entity have access
Yes. A system is in place across ITC factories, hotels
to non-occupational medical and healthcare services?
and offices for workers to spot and report work-related
(Yes/No)
hazards, and offer suggestions for improvements.
Necessary training is given to all employees in Yes, permanent employees and their family members
recognising hazards and issues. Joint inspections by have access to the Company provided or Company
management representatives and employees on the supported medical benefits. Workers have access to
shop floor are also carried out at regular intervals, medical benefits through Company provided group
and respective corrective and preventive measures are insurance policies, Company funded medical support
undertaken to mitigate the identified risks. In order to and where applicable, statutory benefits under ESIC.

11. Details of safety related incidents.

ITC reports its safety performance on two fronts – ‘on-site’ - referring to the place of work i.e. factory, hotel, office,
etc. which is under direct operational control of ITC and ‘off-site’ - defined as places other than on-site while on
official duty, which includes to and fro commute between residence and place of work. In FY 2021-22, the total on-site
Lost Time Accidents (LTA) was 14 as compared to 12 in FY 2020-21. For details on ’off-site’ LTAs, please refer to ITC
Sustainability & Integrated Report 2022.
Detailed investigations are carried out for all accidents to identify the root causes and to understand the measures
to prevent recurrence. The learnings from all accidents are disseminated across the organisation, and a formal
compliance is also obtained.
Safety Incident/Number Category FY 2021-22 FY 2020-21
Lost Time Injury Frequency Rate (LTIFR) (per one million-person-hours Employees
0.09 0.11
worked)*
Workers
Total recordable work-related injuries** Employees
11 12
Workers
No. of fatalities# Employees
2 1
Workers
High consequence work-related injury or ill-health (excluding fatalities) Employees
9 11
Workers
*# The data on LTIFR and no. of fatalities is for the combined workforce i.e. ITC employees and service providers’ employees.
** ITC discloses total recordable work-related injuries as Lost Time Accident (LTA) - an accident due to which the injured is not able to come
back to work in the next scheduled shift. Total recordable work-related injuries data shown above is for the combined workforce i.e. ITC
employees and service providers’ employees. (Trainees/Apprentices not included).

12. Describe the measures taken by the entity to adopting globally recognised best practices, ensuring
ensure a safe and healthy work place. that facilities are designed, constructed, operated and
In line with the Company’s Environment, Health and maintained in an inherently safe manner.
Safety Policy, safety as a value-led concept has been ITC will continue to undertake efforts for creating a safe
institutionalised by inculcating a sense of ownership at working environment and a strong safety culture by:
all levels and driving behavioural change, leading to the
• Integrating safety at the design stage itself
creation of a cohesive safety culture. ITC has put in place
comprehensive health and safety protocols for the safety and ensuring it through design reviews, stage
and well-being of its stakeholders. ITC endeavours that inspections and pre-commissioning audits, thereby
EHS standards at all its units are ahead of applicable strengthening the engineering control measures
legislations, regulations, and Standards and Codes, and are through ‘design for safety’ principles.
benchmarked against international best practices across • Conducting pre-commissioning and periodic
the diverse sectors in which it operates. operational audits during construction and
ITC continues to strengthen its safety processes, operational stages respectively.

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• Implementing behaviour-based safety initiatives 15. Provide details of any corrective action taken
to facilitate engagement for collaborative work on or underway to address safety-related incidents
improving safety performances. (if any) and on significant risks / concerns arising
• Studies to assess the safety culture and efficacy from assessments of health & safety practices and
of behaviour-based safety interventions will be working conditions.
conducted periodically.
Internal audits of ITC units at Divisional as well as
• Adoption of keystone behaviours by individual units
Corporate level are being conducted on a periodic
to demonstrate collective commitment and create a
shared vision of safety and discipline. basis. Corrective and preventive measures are
taken based on the findings. Detailed investigations
• Embracing and leveraging the digital landscape for
safety management system. are carried out for all accidents to identify the root
causes and to understand the measures required to
ITC will continue to identify solutions for strengthening the
safety culture aligned with the goal of ‘Zero Accidents’. prevent recurrence. Accident investigation findings
with corrective and preventive measures form part of
13. Number of complaints on the following made by
the report presented to the Corporate Management
employees and workers.
Committee (monthly) and the Board (quarterly). The
Employees are encouraged to report work area related safety
learnings from all accidents are disseminated across
issues through various programmes like Hazard identification
the organisation at periodic intervals and a formal
processes, Suggestion schemes and EHS Committees.
compliance obtained.
14. Assessments for the year:

Most of ITC’s manufacturing locations are covered

Leadership Indicators
under the OHSAS 18001/ ISO 45001: Occupational 1. Does the entity extend any life insurance or any
Health and Safety Management Systems. Compliance compensatory package in the event of death of (A)
to safe working conditions is an essential aspect of EHS Employees (Y/N) (B) Workers (Y/N).
management systems. In addition, all ITC Units undergo
periodic Environment, Health & Safety audits at the Yes. In the unfortunate event of the death of an
Business/Division level as well as Corporate, to verify employee including workers, the Company extends
compliance with Standards and Corporate Guidelines. financial support to family members of the employee.
% of your Plants and Offices 2. Provide the measures undertaken by the entity to
that were Assessed (by entity
or Statutory Authorities or ensure that statutory dues have been deducted and
Third Parties) deposited by the value chain partners.
Health and safety
100% The Company ensures that statutory dues as payable by
practices
service providers for their employees are deposited on time
Working Conditions 100%
and in full through a process of periodic audits and controls.

3. Provide the number of employees/workers having suffered high consequence work-related injury/ill-
health/ fatalities (as reported in Q11 of Essential Indicators above), who are rehabilitated and placed in suitable
employment or whose family members have been placed in suitable employment.

Total no. of Affected Employees/Workers No. of Employees/Workers that are Rehabilitated

and Placed in Suitable Employment or whose Family
Members have been Placed in Suitable Employment*

FY 2021-22 FY 2020-21 FY 2021-22 FY 2020-21

Employees 5 4 5 4

Workers 3 4 3 4

*On site Accidents

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4. Does the entity provide transition assistance Guiding Principles on Business and Human Rights, and
programmes to facilitate continued employability and is shared and accepted by all supply chain partners and
the management of career endings resulting from service providers.
retirement or termination of employment? (Yes/No)
ITC has a robust process of evaluating its Suppliers
ITC continually invests in human capital development and Service Providers before engaging with them,
which includes building skills and capabilities proactively making them aware of its expectations/
that are contemporary while providing employees requirements, and seeking commitment for compliance
with a diversity of experiences. These enhance the through contractual agreements. ITC reserves the right
employability of the workforce and enable a smooth to verify compliance with this Code at any time through
transition to alternate opportunities where sought. The appropriate audit and assessment mechanisms,
Company has in place a programme called ‘Making including self-certification. ITC is also committed
New Choices’ for retiring staff. In addition, the Company to reinforcing awareness of this Code amongst the
provides the pension benefits and post retiral medical Suppliers and Service Providers and to support them in
benefits for those members of staff who qualify. this endeavour.
Workers are provided pension benefits covered under
the relevant statute. 6. Provide details of any corrective actions taken
or underway to address significant risks/concerns
5. Details on assessment of value chain partners on
arising from assessments of health and safety
Health and safety practices and Working Conditions
practices and working conditions of value chain
ITC is committed to continuously raise awareness of partners.
supply chain members to comply with applicable laws
ITC’s Sectoral EHS Guidelines are shared with the value
and regulations related to labour and employment,
chain partners, and periodic training is given to their
including gender diversity, human rights, child
concerned personnel.
labour, wages, working hours, bribery & corruption,
occupational health, safety and environment. Periodic audits by ITC are conducted for its key value
chain partners against the sectoral EHS guidelines.
ITC’s Code of Conduct for Suppliers and Service
Corrective and preventive measures are recommended
Providers enshrines the Company’s unwavering focus
based on the audit findings.
on fair treatment, human rights, good labour practices,
environmental conservation, health and safety. The Detailed investigations are carried out for accidents
Code upholds the spirit outlined in the International to identify the root causes, and to understand the
Labour Organisation Guidelines and United Nations measures required to prevent recurrence.

Principle 4
Businesses should respect the interests of and be responsive to all its stakeholders.

Essential Indicators stakeholder engagements, help validate the Company’s

performance and shape new perspectives.
1. Describe the processes for identifying key
stakeholder groups of the entity. For details on ITC’s Process of Stakeholder
Engagement, refer to ‘Stakeholder Engagement’
In line with the Board approved policy on stakeholder
section of ITC Sustainability & Integrated Report 2022.
engagement, ITC has evolved structured framework for
engaging with its stakeholders and fostering enduring 2. List stakeholder groups identified as key for your
relationships with each one of them. ITC’s engagement entity and the frequency of engagement with each
approach is anchored on the principles of materiality, stakeholder group.
completeness and responsiveness. The Board approved Policy on Stakeholder Engagement
The engagement approach takes into cognisance the provides the approach for identifying and engaging with
fact that each stakeholder group is unique and has stakeholders that include shareholders, consumers,
a distinctive set of priorities. Insights gathered from farmers, employees, local communities, suppliers,

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Central and State Governments, regulatory bodies and b) Completeness – Understanding key concerns of
the media. stakeholders and their expectations.

For more details on consultation mechanisms and key c) Responsiveness – Responding coherently and
issues discussed with the stakeholder groups, refer to transparently to such issues and concerns.
‘Stakeholder Engagement’ section of ITC Sustainability
The Company has put in place systems and procedures
& Integrated Report 2022.
to identify, prioritise and address the needs and
concerns of its stakeholders across businesses and
Leadership Indicators
units in a continuous, consistent and systematic
1. Provide the processes for consultation manner. It has implemented mechanisms to facilitate
between stakeholders and the Board on economic, effective dialogue with all stakeholders across
environmental, and social topics or if consultation is businesses, identify material concerns and their
delegated, how is feedback from such consultations resolution in an equitable and transparent manner.
provided to the Board. These measures have helped the Company develop
ITC believes that an effective stakeholder engagement strong relationships, which have stood the test of
process is necessary for achieving its sustainability goal time. Select examples of how stakeholder inputs have
of inclusive growth. In this context, the Company has been incorporated into ITC policies and activities are
laid down a four layered mechanism to deal with the presented below:
aspect of stakeholder engagement. 1. Investors: In addition to its ongoing interactions
The Board, through the CSR and Sustainability with analysts representing institutional equity
Committee, inter alia, reviews, monitors and provides investors on a regular basis post-results, the Company
strategic direction to the Company’s CSR and has, over the last two years, been supplementing
sustainability practices towards fulfilling its Triple its quarterly earnings press releases with detailed
Bottom Line objectives. Half-yearly reports on the investor presentations. This is but one example of how
progress made by the Company in this regard are the Company has refined its processes emanating
placed by the CMC before the CSR and Sustainability from interactions with them. This year, the Company
Committee. The CMC in turn has constituted the organised its first-ever ‘Institutional Investors and
Sustainability Compliance Review Committee (SCRC), Financial Analysts Day’ for institutional investors, a
comprising senior members of management, which well attended programme that drew participation from
evaluates and monitors compliance with the Policy domestic as well as global investors, to provide deeper
formulated in this connection. The SCRC places a insights into ITC’s Corporate Strategy and operating
quarterly report on the subject before the CMC. segments including, inter alia, their competitive
strengths, unique value propositions and key drivers
2. Whether stakeholder consultation is used
of growth and profitability. These initiatives have been
to support the identification and management of
much appreciated by the investor community. The
environmental, and social topics (Yes/No). If so,
Company is well-recognised for its ESG credentials,
provide details of instances as to how the inputs
and is acknowledged as one of the pioneers of adopting
received from stakeholders on these topics were
the Triple Bottom Line philosophy in India. Recognising
incorporated into policies and activities of the entity.
the growing investor interest in this area and factoring
The Company believes that an effective stakeholder in feedback from investor interactions, the Company
engagement process is necessary for achieving its also periodically reviews, refines and updates its ESG
sustainability goal of inclusive growth. Accordingly, policies on the Company’s portal, as it progresses
it anchors stakeholder engagement on the following towards its clearly-defined 2030 goals.
principles:
2. Customers & Value Chain Partners: Customers,
a) Materiality – Prioritised consideration of the Consumers and Value Chain Partners are some of ITC’s
economic, environmental and social impacts core stakeholders. Various tech-enabled avenues have
identified to be important to the stakeholders as been constructed to constantly receive feedback and
well as the organisation. ideas from these stakeholders.

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A portal called Aikyam, captures ideas and feedback by the communities were related to lack of sustainable
provided by our partners, which are evaluated and taken livelihoods today and tomorrow. Based on this, Core
forward by the business. This has enabled both product Area Perspective Plan (CAPP) was conceptualised and
enhancements and process efficiencies. Two Horizons approach to address the needs of the
community was developed and adopted.
Rapidly evolving consumer needs are constantly
being monitored through social listening, in-depth During FY 2021-22, changes in emerging needs and
immersions and are being carefully synthesised to priorities of communities was revisited through CAPP
transform into relevant solutions. Some examples are 2.0 by carrying out an exploratory exercise across
mentioned below: 3,718 villages in 21 factory and 7 agri-catchments
with following objectives:
• Launching of products like ITC Masterchef’s
• To revisit coverage and community needs in the
‘IncrEdible’ Plant-based range, a sustainable
changed context;
alternative to meat. This range supports consumers
with vegan preferences, and also helps in reducing • To assess reasons for not achieving the earlier
carbon footprint. planned outcomes (if any); and

• Providing choices to consumers with specific needs • To re-strategise ITC’S Social Investments
like – Programme (SIP) themes and approach based on
the findings.
- Aashirvaad Svasti Milk for lactose intolerant
consumers. The CAPP 2.0 exercise was carried out by involving
third party organisations and NGO partners under close
- Aashirvaad’s Organic Range and Nature’s Super supervision of SIP’s state teams who were present
Foods Range for consumers looking for healthier during the data collection exercise. The assessment
options. involved primary and secondary data collection using
• YiPPee! A Better World programme for children that quantitative and qualitative tools through
entails a series of workshops for creating awareness 6,771 Household Surveys, 169 Key Informant
on segregation at source, and arts and crafts Interviews, 656 Focus Group Discussions and
sessions for teaching them how to make useful 168 Participatory Rural Appraisal Exercises.
objects out of waste materials available at home. The above process ensures that stakeholder
inputs, suggestions and needs are appropriately
3. Employees: ITC is committed to creating an
incorporated in SIP’s interventions. For example,
inclusive, equitable and diverse workplace where
SIP’s water stewardship programme initially focused
every employee feels valued and included. This
on supply side augmentation through watershed
requires continuous engagement with employees and
development. However, it emerged during the
understand their experiences. This understanding
interactions with stakeholders and through studies
enables ITC to refresh its policies, and ensures that the
that a more comprehensive approach is required
important enablers of inclusion, such as for drought proofing agriculture and achieving
work-life balance, flexibility in work and benefits are positive water balance. To address the issue, river
addressed in a relevant, timely and effective fashion. basin level interventions were planned and demand
A series of focused group discussions were conducted side management of water use in agriculture was
to understand the employee experiences whilst incorporated in the programme. Similarly, in SIP’s
framing the policies on Gender Diversity, Equity and Vocational Training programme, the trades are decided
Inclusion. More than 150 employees (around 10% of based on regular community feedback and market
the target population) were part of the discussions. demand in specific geographical regions. For instance,
The discussions gave rich insight about the priority demand for bedside nursing increased during the
issues such as flexible work arrangements and pandemic, hence training on bedside nursing trade
employee benefits across various life stages such as was amplified. Similarly, based on the feedback
maternity. Such nuanced insights enabled the policies received from students placed in various organisations,
to effectively address the requirements of employees. post-placement assistance was incorporated in the
Vocational Training programme.
4. Community: A comprehensive stakeholder
engagement exercise was first undertaken in 2015- 3. Provide details of instances of engagement
16, wherein core areas were defined and needs of the with, and actions taken to, address the concerns of
communities residing in these areas, that is, factory vulnerable/marginalised stakeholder groups.
and agri-catchments were identified and prioritised. It ITC’s SIP adopts a bottom-up approach to identify and
emerged that one of the overarching problems faced address the emerging needs of the community. Presented

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hereunder are a few instances wherein changing with children after the first wave of COVID 19
community needs in unprecedented pandemic situation pandemic that continued this year too. “Catch
were addressed through modifications in ongoing Up Campaign” was initiated where mohalla level
programme components as well as through introducing learning camps were organised to build/rebuild
entirely new activities under the programmes. foundational reading and math skills. Subsequently,
• Digitalisation Activities: The unprecedented situation when schools started re-opening, “Readiness
created by the pandemic posed several challenges for campaign” was initiated to help children of grade
SIP operations and necessitated a rethink and redesign 1 and 2, to get ready for school by leveraging
of some interventions. The SIP team proactively community support of mothers. For this, mothers’
addressed these challenges through contextual groups were formed who were trained on Activity
solutions and actions planned in consultation with Based Learning method. Since the mothers
key stakeholders. Currently, there are several tools in required support for continuing Activity Based
practice for Learning Management and for enablement Learning at home, active women from these groups
of programme implementation. were selected as “Smart Moms” and were trained
a. Learning Management Systems have been on the pedagogy to help other group members
developed in the form of web portal for training conduct learning activities for their children. This
of teachers in West Bengal, vocational training of helped in continuing learning activities for children
students in Assam, Karnataka and West Bengal, under Read India Programme despite disturbances
and training of Urban Local Bodies on Solid Waste of frequent lockdowns and school closures.
Management in Uttar Pradesh. • Small Ruminants Programme: Diversification
b. Digital Platforms for Enabling Programme of livelihoods to build resilience as well as to
Implementation: Application (App) based training of support family income emerged as one of the
Anganwadi workers on Mother & Child Healthcare prominent needs during engagement with rural
in Assam and West Bengal, App for command women. Hence, a programme was initiated to
area in Maharashtra, App for crop survey in Tamil build capacity of rural poor women for providing
Nadu, App for Soil and Moisture Conservation, and health assistance to small ruminants like goats.
Swachh Mitra App for collection and reporting of The programme not only provided a sustainable
daily waste data in Uttarakhand. livelihood option to participating women, but also
• Smart Mom Intervention: ITC’s education provided opportunities for living a dignified life, and
programme adopted remote engagement activities contribute towards household income.

Principle 5
Businesses should respect and promote human rights.

Essential Indicators
1. Employees and workers who have been provided training on human rights issues and policy(ies) of the entity,
in the following format:

Category FY 2021-22
Total (A) No. of Employees’ Workers Covered (B) % (B/A)

Employees

Permanent 23,829 23,829 100%

Other than Permanent 25,513 23,513 100%
Total Employees 49,342 49,342 100%
Workers
Permanent 12,734 12,734 100%
Other than Permanent 25,317 25,317 100%
Total Workers 38,051 38,051 100%

The awareness pertains to the ITC Code of Conduct.

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2. Details of minimum wages paid to employees and workers, in the following format:
Category FY 2021-22
Total (A) Equal to Minimum Wage More than Minimum Wage
No. (B) % (B/A) No. (C) % (C/A)
Employees
Permanent 23,829 23,829 100%
Male 21,568 21,568 100%
Female 2,261 2,261 100%
Other than Permanent 25,513 74% of other than permanent employees are paid more than the minimum
Male 22,231 wage, and the remaining 26% are paid equal to the minimum wage.
Female 3,282
Workers
Permanent 12,734 12,734 100%
Male 12,102 12,102 100%
Female 632 632 100%
Other than Permanent 25,317 74% of other than permanent workers are paid more than minimum wage,
Male 22,068 and the remaining 26% are paid equal to minimum wage.
Female 3,249

3. Details of remuneration/salary/wages, in the following format:

Male Female
Number Median Remuneration/Salary/ Number Median Remuneration/Salary/
Wages of Respective Category Wages of Respective Category
Board of Directors 14 ` 76 Lakhs 2 ` 76 Lakhs
(BoD)
Key Managerial 6 ` 568 Lakhs - -
Personnel*
Employees other 21,562 ` 6.7 Lakhs 2,261 ` 6.6 Lakhs
than BoD and KMP
Workers# 12,102 ` 4.4 Lakhs 632 ` 1.9 Lakhs
* Comprising Chairman & Managing Director, Wholetime Directors, Chief Financial Officer and Company Secretary
#
Female workers are primarily in newer units or have just commenced their careers.

4. Do you have a focal point (Individual/Committee) (ILO). The Company continues to work towards
responsible for addressing human rights impacts or strengthening and introducing systems to ensure sound
issues caused or contributed to by the business? (Yes/ implementation of ITC’s Sustainability Policies specially
No). with respect to human rights and labour practices.

Yes. The Company has in place a ‘Code of Conduct for

Suppliers and Service Providers’ across Businesses.
5. Describe the internal mechanisms in place to
The Suppliers and Service Providers have voluntarily
redress grievances related to human rights issues.
accepted and adopted the Company’s Code, which
The Company has Policies on Human Rights which are requires compliance with applicable laws relating to,
applicable to all its employees and suppliers & service inter alia, human rights, environmental conservation,
providers. The said Policies and their implementation and quality of products and services. A Grievance
are directed towards adherence to applicable laws and Redressal System to facilitate open and structured
upholding the spirit of human rights, as enshrined in discussions is available at all units and locations to
existing international standards such as the Universal ensure that grievances related to labour practices and
Declaration and the Fundamental human rights human rights are addressed and resolved in a fair and
Conventions of the International Labour Organisation just manner.

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6. Number of Complaints on the following made by employees and workers:

FY 2021-22 FY 2020-21
Filed during Pending Resolution Remarks Filed Pending Remarks
the Year at the End of Year during the Resolution
Year at the End of
Year
Sexual Harassment 2 0 All 2 1 Pending 1
Resolved was
Resolved
Discrimination at
Workplace
Nil
Child Labour

Forced Labour/
Involuntary Labour
Wages - - - - - -
Other Human
Rights Related Issues
Note: As mentioned above in the Section VII. Transparency and Disclosures Compliances Point 23-Complaints/Grievances, a total of 212
grievances pertaining primarily to clarification on incentive calculations were received.

7. Mechanisms to prevent adverse consequences to the the employees are fully aware of the aspects of sexual
complainant in discrimination and harassment cases. harassment and of the redressal mechanism.

ITC is committed to a workplace free of harassment, 8. Do human rights requirements form part of your
including sexual harassment at the workplace, and has business agreements and contracts? (Yes/No)
zero tolerance for such unacceptable conduct.
Yes, contract manufacturing agreements provide for
ITC encourages reporting of any harassment concerns
compliance with accepted standards on issues related to EHS,
and is responsive to complaints about harassment or
other unwelcome or offensive conduct. Committees human rights and labour practices. Additionally, ITC has a
have been constituted across locations to enquire into ‘Code of Conduct for Suppliers and Service Providers’. This
complaints of sexual harassment and to recommend requires suppliers to comply with applicable laws, labour
appropriate action, wherever required. Necessary standards, environmental regulations, and uphold human
disclosures in relation to the sexual harassment rights and principles of ethics and integrity in their operations.
complaints received and redressal thereof are provided All Suppliers are expected to meet the requirements of this
in ITC Report and Accounts 2022. Regular awareness Code. ITC also expects its Suppliers to hold their business
and training sessions are conducted to ensure that associates to the same standards as enshrined in this Code.

9. Assessments for the year:

% of your Plants and Offices that were Assessed
(by Entity or Statutory Authorities or Third Parties)
Child Labour 100%.
Forced/Involuntary Labour The Company has Policies on Human Rights which are applicable to
Sexual Harassment all its employees and value chain partners. The said Policies and their
Discrimination at Workplace implementation are directed towards adherence to applicable laws and
Wages upholding the spirit of human rights, as enshrined in existing international
standards such as the Universal Declaration and the Fundamental Human
Rights Conventions of the International Labour Organisation (ILO).
10. Provide details of any corrective actions taken or underway to address significant risks/concerns arising from
the assessments at Question 9 above.

Please refer to response to Question 9 of Principle 5 under essential indicators.

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Leadership Indicators Farm Safety: ITC undertakes a holistic approach

that addresses the farm safety challenges in Indian
1. Details of a business process being modified/
farming. Close to 5,000 farmers have been provided
introduced as a result of addressing human rights
with Personal Protective Equipment (PPE) kits for safe
grievances/complaints.
spraying of chemicals and secured storage box for safe
The ITC Code of Conduct, as adopted by the Board, storage of chemicals. In addition, 75,000 harvesting
is applicable to Directors, senior management and gloves were provided to labourers to shelter their hands
employees of the Company. The Code covers ITC’s while harvesting. Technology like drones were scaled
commitment to human rights aspects like self- up covering 3,550 acres minimising human interference
respect and human dignity, child labour, gender while chemical spraying besides increasing the efficacy
friendly workplace, ethical dealings with suppliers and of operation and water saving.
customers, health & safety, environment, transparency,
anti-bribery and corruption, and exemplary personal For more information, refer to ‘Inclusive Value Chain’
conduct. Any violation of the Code by an employee section of ITC Sustainability & Integrated Report 2022.
renders the person liable for disciplinary action. ITC 2. Details of the scope and coverage of any human
has mechanisms to address human rights grievances/ rights due diligence conducted.
complaints of all internal stakeholders. For details,
refer to responses to Questions 5 and 7 under essential The scope and coverage of human rights due diligence
indicators (Principle 5). extends to own operations including manufacturing
locations, Hotels, offices and value chain partners.
For value chain partners, ITC has a ‘Code of Conduct
for Suppliers and Service Providers’ covering relevant 3. Is the premise/office of the entity accessible to
human rights aspects. All suppliers are expected to differently abled visitors, as per the requirements of
meet the requirements of this Code. ITC also expects its the Rights of Persons with Disabilities Act, 2016?
suppliers to hold their business associates to the same Our establishments are accessible to the differently
standards as enshrined in this Code. ITC constantly abled, and we are continuously working towards
engages with the rightholders and stakeholders across improving infrastructure for eliminating barriers to
the supply chain for devising programmes that support
accessibility.
Human Rights and Social Development in an integrated
manner. An illustrative example for ITC’s leaf tobacco 4. Details on assessment of value chain partners for
value chain is presented below. Human Rights.

ITC coordinated a Human Rights impact assessment ITC is committed to continuously raise awareness of
with an independent party, covering the entire leaf supply chain members to comply with applicable laws
tobacco farm supply chain covering farmers from and regulations related to labour and employment,
Andhra Pradesh and Karnataka region. The Human including gender diversity, human rights, child
Rights Due Diligence process was aligned to UN Guiding labour, wages, working hours, bribery & corruption,
Principles of Business and Human Rights, and focused occupational health, safety and environment.
on identifying human rights risks and impacts covering
Contracts with the service providers include clauses
farmers, labourers and communities.
that conformed to ITC’s Human Rights Policies and EHS
Following actions have been implemented by ITC based guidelines. ITC reserves the right to verify compliance
on the outcome of the assessment: with the Code of Conduct for Suppliers and Service
Training and Awareness on Human Rights: 184 Village Providers at any time through appropriate audit and
level training programmes were conducted covering assessment mechanisms, including self-certification.
subjects such as Farm Safety, Child Labour, Wages, Fair ITC coordinated a Human Rights impact assessment
Treatment, Freedom of Association, Water, Sanitation covering the entire tobacco farm supply chain. For more
And Hygiene (WASH), No Discrimination and other
details, refer to response to Question 1 (Principle 5)
areas pertaining to human rights.
under leadership indicators.
Human Rights Manual in Vernacular Language:
5. Provide details of any corrective actions taken
Released the industry’s first Human Rights Do’s and
or underway to address significant risks/concerns
Don’ts in farm supply chain. The manual assists as
arising from the assessments at Question 4 above.
a ready reckoner for ITC employees working in farm,
the farmers with whom we partner and the labourers Please refer to responses to Questions 1 and 4 of
engaged by the farmers. Principle 5 under Leadership Indicators.

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Principle 6
Businesses should respect and make efforts to protect and restore the environment.
Essential Indicators
1. Details of total energy consumption (in Joules or multiples) and energy intensity.
In FY 2021-22, ITC units consumed 24,394 Terra Joules (TJ) of energy.
Parameter* FY 2021-22 FY 2020-21
Total electricity consumption (A) 1,808 1,527
Total fuel consumption (B) 22,407 20,660
Energy consumption through other sources (C) 179 182
Total energy consumption (A+B+C) 24,394 22,369
Energy intensity per rupee of turnover (Total energy consumption/turnover in rupees) 413 465
(GJ/Crore INR)

*In Terra Joule (TJ)

During FY 2021-22, ITC’s total energy consumption saw an increase of 9%, despite a 24% increase in production at ITC’s
Paperboards & Specialty Papers Business that accounts for around 87% of ITC’s total energy consumption.
The energy intensity (on per production basis) for all major Businesses is available in ‘Building Climate Resilience’ section of ITC
Sustainability & Integrated Report 2022.
ITC’s energy consumption data has been assured at the ‘Reasonable Level’ by M/s Deloitte Haskins and Sells LLP. For more details,
refer to ‘Building Climate Resilience’ section of ITC Sustainability & Integrated Report 2022.
2. Does the entity have any sites / facilities and, accordingly, the performance of the Company’s
identified as Designated Consumers (DCs) under the units covered exceeds the energy efficiency targets
Performance, Achieve and Trade (PAT) Scheme of the fixed under the PAT scheme. The Bhadrachalam Unit is
Government of India? (Y/N) If yes, disclose whether the first pulp and paper mill and the second unit in the
targets set under the PAT scheme have been achieved. country overall, to be rated GreenCo Platinum+ by CII,
In case targets have not been achieved, provide the as part of Green Company rating system.
remedial action taken, if any.
Details of the energy efficiency initiatives measures
Three Units of ITC’s Paperboards and Specialty implemented during the year are included in
Papers Business and eleven Hotels of Hotels Business ‘Disclosure on Conservation of Energy and Technology
are covered under the PAT scheme. ITC has made Absorption’ forming part of the Report of the Board of
significant investments in reducing energy consumption Directors in ITC Report and Accounts 2022.
3. Provide details of the following disclosures related to water.
In FY 2021-22, ITC’s total water intake was 33.7 million kilolitres (kl).
Parameter FY 2021-22 FY 2020-21

Water withdrawal by source (in Million kilolitres)

(i) Surface water 26.9 25.1

(ii) Groundwater 5.4 5.4

(iii) Third party water 1.4 1.2

(iv) Seawater/desalinated water - -

(v) Others 0.1 0.1

Total volume of water withdrawal (in Million kilolitres) (i + ii + iii + iv + v) 33.7 31.8

Total volume of water consumption (in Million kilolitres) 11.7 9.9

Water intensity per rupee of turnover (Water withdrawal/turnover) (kilolitre/Crore INR) 569 660

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During FY 2021-22, ITC’s total water intake saw an increase of 6%, despite a 24% increase in production at ITC’s paper
business that accounts for around 89% of ITC’s total water intake.
The water intensity (on per production basis) for all major Businesses is available in ‘Water Security for All’ section of
ITC Sustainability & Integrated Report 2022.
Over the years, ITC has created rainwater harvesting potential through extensive investments in its Integrated
Watershed Development Projects. The programme promotes the development and management of local water
resources in water stressed areas by facilitating community participation in planning and implementing such
measures, whilst building, reviving and maintaining water harvesting structures. The coverage of this programme
currently extends to 40 districts of 16 States in India. During the year, ITC’s watershed development projects covering
over 1.3 million acres of land created a total Rainwater Harvesting potential (RWH) of over 46 million kl (cumulative),
which is nearly four times the net water consumed by ITC’s operations.
ITC’s water withdrawal and consumption data has been assured at the ‘Reasonable Level’ by M/s Deloitte Haskins and
Sells LLP. For more details, refer to ‘Water Security for All’ section of ITC Sustainability & Integrated Report 2022.
4. Has the entity implemented a mechanism for Zero Liquid Discharge? If yes, provide details of its coverage and
implementation.
ITC’s approach to water stewardship focuses on reducing water intake by utilising treated wastewater within the
process, thereby reducing demand for fresh water. ITC units operate in line with the Consent to Operate (CTO)
conditions.
5. Please provide details of air emissions (other than GHG emissions) by the entity.
Parameter Please Specify Unit FY 2021-22 FY 2020-21
NOx Tonnes 1,799 1,693
SOx Tonnes 3,203 2,600
Particulate Matter (PM) Tonnes 637 655
Persistent Organic Pollutants (POP) - Not applicable Not applicable
Volatile Organic Compounds (VOC) - Not applicable Not applicable
Hazardous Air Pollutants (HAP)* Tonnes 7 5
*The data is for Paperboards & Specialty Papers Business’s Bhadrachalam Unit’s Hydrogen Sulphide emissions (H2S)
ITC’s air emissions data has been assured at the ‘Reasonable Level’ by M/s Deloitte Haskins and Sells LLP. For more details, refer to ‘Air Emissions
Management’ section of ITC Sustainability & Integrated Report 2022.

6. Provide details of greenhouse gas emissions (Scope 1 and Scope 2 emissions) & its intensity.
Parameter Please Specify Unit FY 2021-22 FY 2020-21
Total Scope 1 emissions (Break-up of the GHG into CO2, kilo tonnes of CO2 1,258 1,172
CH4, N2O, HFCs, PFCs, SF6, NF3 if available) equivalent
Total Scope 2 emissions kilo tonnes of CO2 193 168
(Break-up of the GHG into CO2, CH4, N2O, HFCs, PFCs, SF6, equivalent
NF3 if available)

Total Scope 1 and Scope 2 emissions per rupee of turnover tonnes of CO2 /Crore 25 28
INR

During FY 2021-22, ITC’s GHG emissions (Scope 1+Scope 2) saw an increase of 8%, despite a 24% increase in production at
ITC’s Paperboards & Specialty Papers Business that accounts for around 80% of ITC’s total GHG emissions (Scope 1+Scope 2).
The GHG emissions (Scope 1+Scope 2) intensity (on per production basis) for all major Businesses is available in ‘Building
Climate Resilience’ section of ITC Sustainability & Integrated Report 2022.
ITC’s Paperboards & Specialty Papers Business has large scale forestry programmes promoting sustainable forests
management with primary aim of securing pulpwood requirement for Business continuity. In addition to sequestering carbon,
this programme benefits the stakeholders by improving productivity of wasteland, de-risking poor rural households by
diversifying farm portfolios through promotion of tree-based farming. During FY 2021-22, this programme has sequestered
6,182 kilo tonnes of CO2, which is more than 2 times the amount of CO2 from ITC’s operations.
ITC’s GHG emissions (Scope 1 and Scope 2) data has been assured at the ‘Reasonable Level’ by M/s Deloitte Haskins and Sells
LLP. For more details, refer to ‘Building Climate Resilience’ section of ITC Sustainability & Integrated Report 2022.

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7. Does the entity have any project related to technologies across key business areas, to enhance
reducing Green House Gas emission? If Yes, then productivity, reduce carbon footprint, achieve strategic
provide details. cost efficiencies and superior product performance.
ITC has undertaken a target of 50% reduction in Specific Some of the major projects undertaken by ITC’s
GHG Emissions (% Reduction in GHG Emissions (Scope Paperboards and Specialty Papers Business as part of
1, 2) per Unit of Production) by 2030 as part of its its Digital Transformation Programme include process
Sustainability 2.0 ambitions. Accordingly, actions are debottlenecking and throughput improvement for
being undertaken to reduce greenhouse gas emissions productivity and Overall Equipment Effectiveness (OEE),
by investing in energy efficiency and increasing share of process capability improvement leading to reduction in
renewable energy. defects and resource optimisation.

Energy efficiency: Renewable energy:

ITC has invested in renewable energy projects such as
ITC Units are focusing on energy efficiency through process
rooftop and offsite solar power, wind energy, and biomass
improvements and investing in new technologies. Over
power for meeting its energy requirements. These
the years, ITC has implemented measures like installation
investments have helped ITC to achieve around 42% of its
of Vapour Absorption Machines (VAM), Automation in
energy requirements from renewable sources.
tube cleaning system of Heating, Ventilation and Air
Conditioning (HVAC), and installation of energy efficient In FY 2021-22, ITC commissioned 14.9 MW offsite solar
equipment such as chillers, AHUs, motors, fans, pumps, project in Tamil Nadu that will cater to the electricity
agitators. In FY 2021-22, the investments in energy requirements for ITC’s Hotels and manufacturing Units
conservation equipment has resulted in energy savings of of Branded Packaged Foods Businesses, Paperboards
& Specialty Papers Business and Packaging and
about 87 TJ, which is equivalent to around 10,900 tonnes of
Printing Business. This project will supply about 22
GHG emissions.
Million kWh and help ITC Units in Tamil Nadu to reach
In line with ITC’s focus on accelerating digitalisation about 90% of its grid electricity requirements from
across Businesses, ITC’s Paperboards and renewables. Apart from supplying green electricity,
Specialty Papers Business is implementing several it also includes a rainwater harvesting system that
transformative projects leveraging Industry 4.0 recharges about 2 million litres of water annually.
8. Provide details related to waste management by the entity.
Parameter (in kilo tonnes) FY 2021-22 FY 2020-21
Plastic waste (A)* - -
E-waste (B) 0.071 0.051
Bio-medical waste (C) 0.018 0.017
Construction and demolition waste (D) 6.5 1.4
Battery waste (E) 0.3 0.3
Radioactive waste (F) 0 0
Other Hazardous waste. Please specify, if any. (G) 20 18
Other Non-hazardous waste generated (H). Please specify, if any. 699 664
(Break-up by composition i.e. by materials relevant to the sector)

Total (A+B + C + D + E + F + G + H) 726 684

Total waste recovered through recycling, reusing or other recovery operations

(i) Recycled 715 672

(ii) Reused** - -
(iii) Other recovery operations 10 11
Total 725 683
Total waste disposed by nature of disposal method

(i) Incineration 0.6 0.5

(ii) Landfilling 0.3 1
(iii) Other disposal operations 0 0
Total^ 0.9 1.5
* Plastic waste is reported under Non-hazardous waste.
** Waste reused is reported under waste recycled.
^ The difference between total waste generated and total waste disposal is the change in onsite storage.

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In FY 2021-22, the Company continued to recycle over 99% of solid waste from its operations. In addition to this,
the Company’s Paperboards & Specialty Papers Business recycled over 85,000 tonnes of externally sourced post-
consumer waste paper, thereby creating a positive environmental footprint. The Company also collected and
sustainably managed 100% of its post-consumer plastic packaging waste.
ITC’s waste data has been assured at the ‘Reasonable Level’ by M/s Deloitte Haskins and Sells LLP. For more details,
refer to ‘Sustainably Managing Waste’ section of ITC Sustainability & Integrated Report 2022
9. Briefly describe the waste management 10. If the entity has operations/offices in/around
practices adopted in your establishments. Describe ecologically sensitive areas (such as national parks,
the strategy adopted by your company to reduce wildlife sanctuaries, biosphere reserves, wetlands,
usage of hazardous and toxic chemicals in your biodiversity hotspots, forests, coastal regulation
products and processes and the practices adopted zones etc.) where environmental approvals/
to manage such waste. clearances are required.

The Company has initiated measures across units ITC’s existing operations/offices comply with applicable
to ensure waste minimisation, segregation of waste environmental regulations of the Country, and operate
at source and recycling. For the past 15 years, the as per Consent to Operate (CTO) conditions from the
Company has been consistently recycling over 98% of Central and State Pollution Control Boards in line with
solid waste generated at its units, and during the year, guidelines issued by Ministry of Environment, Forest
the recycling level reached 99.8%. In addition, over and Climate Change, Government of India.
85,000 MT of externally sourced post-consumer waste 11. Details of environmental impact assessments of
paper was used as raw material during the year. projects undertaken by the entity based on applicable
laws, in the current financial year.
ITC follows a proactive approach to manage
hazardous chemicals by actively looking for Not applicable
alternatives, which not only helps keep its operations
12. Is the entity compliant with the applicable
safe but also ensures safest products for customers. environmental law/regulations/guidelines in
This approach is demonstrated in pioneering India; such as the Water (Prevention and Control
practices implemented by ITC like elemental of Pollution) Act, Air (Prevention and Control of
chlorine free (ECF) bleaching, and ozone bleaching Pollution) Act, Environment protection act and rules
technology in India in its Paper Business, and thereunder (Y/N). If not, provide details of all such
switching from solvent based inks to water-based non-compliances.
ones in its Packaging and Printing Business.
ITC’s existing operations/offices comply with applicable
For more details, refer to ‘Chemical Safety environmental regulations of the Country, and operate
Management’ section of ITC Sustainability & as per CTO conditions from the Central and State
Integrated Report 2022. Pollution Control Boards.

Leadership Indicators
1. Provide break-up of the total energy consumed (in Joules or multiples) from renewable and non-renewable sources
Parameter** FY 2021-22 FY 2020-21
From renewable sources
Total electricity consumption (A)@ 910 785
Total fuel consumption (B) #
9,099 8,280
Energy consumption through other sources (C)$ 179 182
Total energy consumed from renewable sources (A+B+C) 10,188 9,247
From non-renewable sources
Total electricity consumption (D)@ 898 742
Total fuel consumption (E) #
13,308 12,380
Energy consumption through other sources (F) $
0 0
Total energy consumed from non-renewable sources (D+E+F) 14,206 13,122
@
This includes electricity from own wind or solar power plants, and purchased electricity.
#
This includes all fuels used within the premises including for onsite electricity generation.
$
This includes purchased steam.
**
In Terra Joules (TJ).

ITC’s Energy performance has been assured at the ‘Reasonable Level’ by M/s Deloitte Haskins and Sells LLP. For
more details, refer to ‘Building Climate Resilience’ section of ITC Sustainability & Integrated Report 2022.

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2. Provide the following details related to water discharged:

Parameter FY 2021-22 FY 2020-21
Water discharge by destination and level of treatment (in Million kilolitres)
(i) To Surface water 12.2 10.9
No treatment - -
With treatment – please specify level of treatment Secondary Secondary
(ii) To Groundwater - -
No treatment - -
With treatment – please specify level of treatment NA NA
(iii) To Seawater - -
- No treatment NA NA
- With treatment – please specify level of treatment NA NA
(iv) Sent to third parties 9.8 10.9
- No treatment - -
- With treatment – please specify level of treatment Tertiary Tertiary
Total water discharged (in Million kilolitres) 22 21.8
ITC’s water discharge data has been assured at the ‘Reasonable Level’ by M/s Deloitte Haskins and Sells LLP. For
more details, refer to ‘Water Security for All’ section of ITC Sustainability & Integrated Report 2022.
3. Water withdrawal, consumption and discharge in areas of water stress (in kilolitres).
ITC has developed the water risk assessment methodology for identifying water stressed areas based on WRI
Aqueduct’s Baseline Water Stress and Central Ground Water Board’s (India) groundwater block classification.
Additionally, insights from stakeholder engagement were also considered. This holistic methodology allows ITC to
cognise water risks in a comprehensive manner, and design mitigation strategy to address the identified risks. ITC’s
water stewardship goals are available in the section ‘Sustainability 2.0 ambitions’ of ITC Sustainability & Integrated
Report 2022. The aggregated water withdrawal, consumption and discharge in areas of water stress is given below:

Parameter FY 2021-22 FY 2020-21

Water withdrawal by source (in Million kilolitres)
(i) Surface water 26.9 25.0
(ii) Groundwater 0.2 0.2
(iii) Third party water 0.2 0.2
(iv) Seawater/desalinated water 0 0
(v) Others 0.05 0.04
Total volume of water withdrawal (in Million kilolitres) 27.3 25.5
Total volume of water consumption (in Million kilolitres) 6.6 4.9
Water discharge by destination and level of treatment (in Million kilolitres)
(i) Into Surface water 11.5 10.4
No treatment - -
With treatment – please specify level of treatment Secondary Secondary
(ii) Into Groundwater - -
No treatment NA NA
With treatment – please specify level of treatment NA NA
(iii) Into Seawater - -
No treatment NA NA
With treatment – please specify level of treatment NA NA
(iv) Sent to third parties 9.2 10.2
No treatment - -
With treatment – please specify level of treatment Tertiary Tertiary
Total water discharged (in Million kilolitres) 20.7 20.6

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4. Please provide details of total Scope 3 emissions & its intensity

Parameter Unit FY 2021-22 FY 2020-21
Total Scope 3 emissions Kilo tonnes of CO2 318 237
(Break-up of the GHG into CO2, CH4, N2O, HFCs, equivalent
PFCs, SF6, NF3, if available)

The company has been progressively increasing the coverage of its Scope 3 emissions by including more Supply
Chain partners in its reporting boundary. The scope of coverage for Scope 3 emission is mentioned in ‘Building
Climate Resilience’ section of ITC Sustainability & Integrated Report 2022.

While working towards reducing its emissions and greening its energy portfolio, ITC seeks to increase
carbon sequestration by expanding forestry projects on wastelands. The Farm Forestry programme by ITC’s
Paperboards & Specialty Papers Business was started for promoting sustainable forests management
practices in the value chain, and securing the supply of pulpwood for its paper mills. ITC’s Social and Farm
Forestry initiative has greened over 950,000 acres till date, with 76,608 acres of plantation added in
FY 2021-22 resulting in 6,182 kilo tonnes of CO2 getting sequestered during the year, which is equivalent to
more than 2 times the amount of CO2 emissions from ITC’s operations.

ITC’s Greenhouse Gas emissions (Scope 3) have been assured at the ‘Reasonable level’ by M/s Deloitte Haskins
and Sells LLP. For more details, refer to ‘Building Climate Resilience’ section of ITC Sustainability & Integrated
Report 2022.

5. With respect to the ecologically sensitive areas of disruptions to business activities or processes.
reported at Question 10 of Essential Indicators above, Business Continuity Planning validates the adequacy
provide details of significant direct & indirect impact of the existing systems and processes to prevent and
of the entity on biodiversity in such areas along with recover from potential threats. It ensures continuity
prevention and remediation activities. (Refer response of delivery of products or services at pre-defined
in above Essential Indicator 10) acceptable levels following a disruptive incident.
Nil Comprehensive Business Continuity Plans have been
6. If the entity has undertaken any specific initiatives made covering all facets of operations, and are being
or used innovative technology or solutions to tested at pre-determined intervals. These Plans have
improve resource efficiency, or reduce impact due to been duly approved by the Management Committees of
emissions/effluent discharge/waste generated, please the Businesses.
provide details of the same as well as outcome of such 8. Disclose any significant adverse impact to the
initiatives. environment, arising from the value chain of the
The Company has undertaken a number of initiatives, entity. What mitigation or adaptation measures have
and also deployed innovative technologies across been taken by the entity in this regard.
its operations for improving resource efficiency and ITC has a Board approved Policy on ‘Sustainable
minimising environmental impact. For details, refer to Supply Chain and Responsible Sourcing’ and a ‘Code
‘Disclosure on Conservation of Energy and Technology of Conduct for Suppliers and Service Providers’. ITC,
Absorption’ forming part of the Report of the Board with its diverse and expanding portfolio of businesses,
of Directors in ITC Report and Accounts 2022, and prioritises embedding sustainability and building
‘Building Climate Resilience’, ‘Towards Water Security resilience in the supply chain as part of its Sustainability
for All’, ‘Sustainably Managing Waste’, ‘Chemical Safety 2.0 vision.
Management’, ‘Air Emissions Management’ sections of
ITC Sustainability & Integrated Report 2022. ITC’s Code of Conduct for Suppliers and Service
Providers enshrines the Company’s unwavering focus
7. Does the entity have a business continuity and
on fair treatment, human rights, good labour practices,
disaster management plan?
environmental conservation, health and safety. The
Yes, ITC has a Business Continuity and Disaster Code is shared and accepted by all supply chain
Management Plan designed to address the threat partners and service providers.

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ITC has a robust process of evaluating its Suppliers environment and provide the necessary framework to
and Service Providers before engaging with them, address the direct environmental impacts of Company’s
proactively making them aware of its expectations/ own operations as well as progressively extend the
requirements, and seeking commitment for compliance efforts to its supply chain.
through contractual agreements. ITC reserves the right
Key value chain partners like third party manufacturers
to verify compliance with this Code at any time through
are encouraged to adopt management practices
appropriate audit and assessment mechanisms,
detailed under International Standards such as ISO
including self-certification. ITC is also committed
9001, ISO 14001, OHSAS 18001 and ITC’s Environment,
to reinforcing awareness of this Code amongst the
Health and Safety (EHS) Guidelines. Contract
Suppliers and Service Providers and to support them in
manufacturing agreements provide for compliance
this endeavour.
with accepted standards on issues related to EHS,
ITC has identified material environmental impacts human rights and labour practices, and third party
across its value chain, and has deployed various manufacturers are periodically assessed to ensure
mitigation and adaptation strategies. compliance.

For example, managing hazardous chemicals is not only Farmers constitute a major portion of ITC’s value
important within ITC factories but also in the supply chain, and accordingly the Company has deployed large
chain. Within the supply chain, farmers working with scale programmes to both assess and address the
hazardous pesticides is an area of special attention. environmental impacts across its key agri value chains.
ITC’s approach is to eliminate or reduce the use of For example, ITC’s leaf tobacco value chain is assessed
hazardous pesticides. Intensive training is conducted as part of the global Sustainable Tobacco Programme
on Integrated Pest Management (IPM), which helps (STP 2.0) which focuses on Water, Human Rights, Crop,
adopt a holistic approach in reducing pesticide usage Soil, Climate Change, Natural Habitats, Livelihoods
as well as substituting such pesticides with nature- and Governance. For more details, refer to the ‘Next-
based solutions. The training programmes also cover Generation Agriculture’ section of ITC Sustainability &
the safe handling of pesticides used and the responsible Integrated Report 2022.
management of wastes generated. As a part of reporting for supply chain, ITC has
For more details, refer to ‘Next-Generation Agriculture’ instituted systems to report environmental data for
section of ITC Sustainability & Integrated Report 2022. key Third Party Manufacturing (TPM) units and plans
to progressively expand its reporting boundary. ITC
9. Percentage of value chain partners (by value of
also supports its TPM units by providing knowledge
business done with such partners) that were assessed
support in specific areas like energy, water and waste
for environmental impacts.
management. Through monitoring and reporting of
ITC is guided by a comprehensive set of Board environmental related data, and through sharing of
approved Sustainability Policies. The Policies outline good practices, ITC aims to positively influence the
the Company’s commitment to high standards on performance of its supply chain partners.

Principle 7
Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is
responsible and transparent.
Essential Indicators
1 a. Number of affiliations with trade and industry chambers/associations.
ITC’s Policy on Responsible Advocacy (https://www.itcportal.com/about-itc/policies/sustainability-policy.aspx)
provides the framework for necessary interface with Government/Regulatory Authorities on matters concerning
various sectors in which the Company operates. The Company’s engagement with the relevant authorities is guided
by the values of commitment, integrity, transparency and the need to balance the interests of diverse stakeholders.
The Company works with apex industry institutions that are engaged in policy advocacy as well as various other
forums. During the year, the Company had active affiliations with 89 such trade and industry chambers/associations.

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b. List the top 10 trade and industry chambers/associations (determined based on the total members of such body)
the entity is a member of/affiliated to.

S. No. Name of the trade and industry chambers/ Reach of trade and industry chambers/associations
associations (State/National)
1 ASSOCHAM National
2 All India Management Association National
3 Confederation of Indian Industry National
4 Madras Management Association State
5 Indian Merchants Chamber of Commerce National
6 Mahratta Chamber of Commerce, Industries State
& Agriculture
7 PHD Chamber of Commerce & Industry National
8 Bombay Management Association State
9 Federation of Indian Chambers of Commerce National
& Industry
10 Retailers Association of India National

2. Provide details of corrective action taken or underway on any issues related to anti-competitive conduct by the
entity, based on adverse orders from regulatory authorities.
The Company has not engaged in any anti-competitive conduct.

Leadership Indicators
1. Details of public policy positions advocated by the entity.

S. Public Policy Method resorted for Whether informa- Frequency of review Web Link, if
No. advocated such advocacy tion available in by Board (Annually available
public domain? /Half yearly/
(Yes/No) Quarterly/Others –
please specify)

The Company’s Policy The Company works with For more details, - -
on Responsible apex industry institutions refer to ‘Report
Advocacy approved that are engaged in of the Board
by the Board provides policy advocacy, like the of Directors &
the framework for Confederation of Indian Management
necessary interface Industry, Federation Discussion and
with Government/ of Indian Chambers of Analysis’ section
Regulatory Authorities Commerce & Industry, forming part of
on matters concerning Associated Chambers ITC’s Report and
various sectors in of Commerce and Accounts 2022.
which the Company Industry of India, and
operates. various other forums
including regional
Sector-wise matters
Chambers of Commerce.
taken up are in line
The Company’s
with national priorities
engagement with the
to strengthen
relevant authorities is
domestic industry,
guided by the values of
promoting sustainable
commitment, integrity,
agriculture and
transparency and taking
business practices.
into consideration
interests of all
stakeholders.

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Principle 8
Businesses should promote inclusive growth and equitable development.

Essential Indicators in line with the new SEBI guidelines on Business

Responsibility and Sustainability Reporting.
1. Details of Social Impact Assessments (SIA) of
projects undertaken by the entity based on applicable Such discussions not only focus on complaints and
laws, in the current financial year. grievances, but also on providing resolution in a time
None of the projects undertaken by ITC in FY 2021-22 bound manner. During FY 2021-22, 20 stakeholder
required Social Impact Assessments (SIA). engagement meetings were held across Karnataka,
Tamil Nadu, Maharashtra, Uttar Pradesh, Uttarakhand
2. Provide information on project(s) for which
and Bihar. Several suggestions were made by the
ongoing Rehabilitation and Resettlement (R&R) is
being undertaken by your entity. community and discussions were held to provide
possible solutions to relevant ones. However, no
Not applicable
grievances were raised by the community pertaining to
3. Describe the mechanisms to receive and redress Corporate Social Responsibility related activities.
grievances of the community.
4. Percentage of input material (inputs to total inputs
ITC’s Social Investments Programme (SIP) adopts a by value) sourced from suppliers.
bottom-up approach by keeping community needs
and priorities at the centre of all its interventions. FY 2021-22 FY 2020-21
Detailed and structured community engagements Directly sourced from 15.76% 19.39%
are planned periodically to revisit the changing needs MSMEs/small producers
of the community and the emerging priorities feed
Sourced directly from 45.73% 58.14%
into designing and re-designing of ongoing and new
within the district and
programmes. neighbouring districts
Further, regular community interactions are undertaken
by the internal state level programme teams and Leadership Indicators
the implementing partners to discuss, identify and
1. Provide details of actions taken to mitigate any
address any issues, complaints and grievances of the
community members pertaining to the operations of negative social impacts identified in the Social Impact
Social Investments Programme. Assessments (Reference: Question 1 of Essential
Indicators above):
SIP has also formalised and internalised the process of
undertaking and recording such community interactions Not applicable

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2. Provide the following information on CSR projects undertaken by your entity in designated aspirational
districts as identified by government bodies:
State Aspirational District Amount spent (In INR)
Andhra Pradesh Visakhapatnam 8,34,199
Assam Baksa 27,98,809
Assam Barpeta 27,99,339
Assam Darrang 2,55,46,103
Assam Dhubri 29,67,661
Assam Goalpara 28,86,712
Bihar Khagaria 6,25,000
Bihar Muzaffarpur 12,61,759
Bihar Araria 33,42,848
Bihar Begusarai 83,07,671
Bihar Katihar 37,82,457
Bihar Sheikhpura 32,19,846
Bihar Sitamarhi 32,30,309
Chhattisgarh Sukma 48,94,704
Haryana Nuh 61,64,624
Jharkhand Pakur 32,28,506
Jharkhand Sahibganj 2,96,313
Karnataka Yadgir 49,24,663
Madhya Pradesh Barwani 27,48,747
Madhya Pradesh Chhatarpur 3,03,435
Madhya Pradesh Damoh 2,41,89,169
Madhya Pradesh Guna 12,48,252
Madhya Pradesh Khandwa 25,23,607
Madhya Pradesh Rajgarh 3,72,748
Madhya Pradesh Singrauli 27,55,075
Madhya Pradesh Vidisha 1,48,65,730
Maharashtra Nandurbar 30,94,731
Odisha Kalahandi 32,43,681
Odisha Malkangiri 1,56,50,318
Odisha Rayagada 32,43,643
Rajasthan Baran 1,97,41,197
Rajasthan Barmer 61,29,105
Rajasthan Jaisalmer 88,16,420
Tamil Nadu Virudhunagar 48,70,538
Telangana Bhadradi Kothagudem 8,99,02,354
Telangana Warangal 3,06,800
Uttar Pradesh Bahraich 63,42,979
Uttar Pradesh Balrampur 23,37,957
Uttar Pradesh Chitrakoot 23,07,946
Uttar Pradesh Sonbhadra 23,16,204
Uttarakhand Haridwar 3,93,22,243
TOTAL 33,77,44,401

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3. a. Do you have a preferential procurement policy 1.25 lakh acres of plantations involving over 30,000
where you give preference to purchase from suppliers farmers. During FY 2021-22, over 320,000 tonnes of
comprising marginalised/vulnerable groups? (Yes/No): FSC® certified wood were procured from these certified
plantations.
The Board approved Policy on Sustainable Supply Chain
and Responsible Sourcing defines the supply chain ITC encourages competency development among
local vendors and its vendor base includes medium
which includes farmers. ITC is committed to collaborate
and small-scale enterprises that are proximate to its
with farmers to make them more sustainable and help
manufacturing locations. These initiatives are aligned
build their adaptive capacity and resilience to emerging
to national priorities of ‘Make in India’, ‘Atmanirbhar
risks like climate change and water stress and other
Bharat’ as well. ITC also works in close partnership
extreme weather events. It is also working towards
with small-scale units in businesses such as Safety
raising awareness and work with farmers on crop Matches, and Education and Stationery Products.
quality, safety, protection, integrity and traceability, as These partnerships have significantly enhanced
applicable. capabilities and competitiveness of a number of units
b. From which marginalised/vulnerable groups do in these sectors.

you procure? For more details on the profile of the suppliers and
key procurement by volume and value, refer to ‘Next-
Please refer to response given in c.
Generation Agriculture’ and ‘Inclusive Value Chains’ of
c. What percentage of total procurement (by value) ITC Sustainability & Integrated Report 2022.
does it constitute?
4. Details of the benefits derived and shared from
The Social Forestry programme focuses on creating the intellectual properties owned or acquired by
commercially viable land use options for small landholder your entity (in the current financial year), based on
farmers through tree-based farming to diversify income traditional knowledge.
from land while ensuring food, fodder and fuelwood Not applicable
security. Till date, ITC’s Social and Farm Forestry
5. Details of corrective actions taken or underway,
programme has together greened over 950,000 acres,
based on any adverse order in intellectual property
generating about 173 million-person-days of employment. related disputes wherein usage of traditional
Till date, ITC has received Forest Stewardship Council® knowledge is involved.
- Forest Management (FSC®-FM) certification for over Not applicable

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6. Details of beneficiaries of CSR Projects:

Objective Initiatives UoM Target Achieved Achieved Balance to
2030 in FY till FY achieve
2021-22 2021-2022
Horizon I - Sustainable Livelihoods Today
De-risk poor rural households Social Acres 6,30,000 30,700 4,25,000 2,05,000
by diversifying farm portfolios Forestry#
through the promotion of
tree-based farming
Integrate diverse elements of Climate Smart Acres 30,00,000 8,20,000 8,20,000 21,80,000
the rural portfolio of initiatives Village1#
into a Climate Smart Village
approach

Ensure water security for all Watershed Acres 22,00,000 1,01,000 13,30,000 8,70,000
stakeholders through watershed Development
development & demand
management Water Nos. 50,000 3,100 25,100 24,900
harvesting
structures
Storage Million KL 60 3.47 45.27 14.73
Potential#
Crop Million KL 2,000 496.5 496.5 1,503.5
Water Use
Efficiency#
Bio-Diversity Acres 10,00,000 89,000 1,33,000 8,67,000
Conservation#

Actively promote non-farm Women Eco- Nos. 1,50,000 6,200 86,000 64,000
livelihood opportunities to nomic Em-
diversify income portfolios of poor powerment
households
Horizon II - Creating Capabilities for Tomorrow
Ensure that every child is in Improvement No. of 13,00,000 55,000 8,64,000 4,36,000
school and learning well through in learning children
improvement in pedagogy and outcomes
the learning environment
Infrastructure Nos. 4,000 400 2,500 1,500
support to
Government
Schools and
Anganwadi

Align skills training to Vocational No. of 2,82,000 13,300 1,07,000 1,75,000

market demand to maximise Training youths
employment of youth from our Enrolled
core areas

Reduce morbidity, especially Toilets Nos. 40,000 1,251 39,400 600

amongst women and children, constructed
by promoting a clean and
healthy environment
Solid Waste No. of 45,00,000 14,62,000 14,62,000 30,38,000
Management Households
(SWM) & establish-
ments

Note:
1 hectare = 2.47105 acres
#
These indicators contribute to five of Company’s sustainability 2030 (S 2.0) commitments.
Please note that the area covered under Climate Smart Village Approach, Water Savings in Crop Water Use efficiency and Households
covered under SWM report same numbers for annual and cumulative achievement.

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In the social sector, the two most important stakeholders of ITC are:
• Rural communities with whom the Company’s agri-businesses have forged long and enduring partnerships
through crop development and procurement activities; and
• Communities residing in close proximity to our manufacturing units, situated in urban and semi-rural locations.
The beneficiaries of ITC’s CSR programmes from the stakeholder communities belong to the under privileged
sections of the society, and are primarily small & marginal farmers who face the challenge of securing sustainable
livelihoods. The challenge of securing sustainable livelihoods is addressed through the Two Horizon approach of
making today’s dominant source(s) of livelihoods sustainable; and creating capabilities for wealth generation and
employment for tomorrow.
The Two Horizon strategy has necessitated an integrated approach to development involving several interventions.
Presented below are the number of beneficiaries for key interventions and proportion of beneficiaries belonging to
vulnerable and marginalised groups.
CSR Projects No. of Persons Benefitted from % of Beneficiaries from Vulnerable
CSR Projects (approximately) and Marginalised Groups
1 2 3
Climate Smart Agriculture+ 4,50,000 #
SC/ST – 24%; Female – 18%
Water Stewardship+ 21,000 SC/ST – 30%; Female – 17%
Social Forestry+ 15,000 SC/ST – 17%; Female – 21%
Improved Animal Husbandry Practices+ 31,000 SC/ST – 16%; Female – 5%
Support to Education 55,000 Children – 100%
Skilling of Youth 13,000 SC/ST – 32%; Female – 46%
Sanitation 23,000 SC/ST – 2%
Solid Waste Management 1.46 million SC/ST – 18%
Mother and Child Health 5,90,000 89% - women, adolescents and
children
Women Empowerment 5,50,000 100% women
+ Climate Smart Agriculture, Water Stewardship, Social Forestry and Improved Animal Husbandry Practices primarily focus on small and
marginal farmers. Hence, almost entire coverage numbers qualify to be included under ‘beneficiaries from vulnerable and marginalised
groups’
#
excludes farmers covered under NITI Aayog partnership programme

Principle 9
Businesses should engage with and provide value to their consumers in a responsible manner.

Essential Indicators 3. Number of consumer complaints in respect of the

following:
1. Describe the mechanisms in place to receive and
Robust systems have been put in place across ITC
respond to consumer complaints and feedback.
Businesses to continuously engage with consumers for
A well-established system is in place for dealing with gathering feedback and address their concerns, if any,
consumer feedback. Consumers are provided multiple in a timely manner. A dedicated consumer interactions
options to connect with the Company through email, team is in place to address any product related query/
telephone, website, social media, feedback forms, etc. complaint. Several communication channels like
In addition, the Company’s Businesses have a dedicated email, telephone number and feedback forms are
consumer response cell to respond to their queries provided to the consumer. In addition, the Company
and receive feedback on products so as to be able to has an online reputation management team which
continuously improve upon its products and services. interacts with consumers via social media channels,
and responds to their queries in a real time manner. A
2. Turnover of products and/services as a percentage
Customer Relationship Management (CRM) platform
of turnover from all products/service that carry
has been implemented for capturing complaints,
information about:
queries, feedback and suggestions received across
Products of the Company contain all relevant information channels. The CRM platform also provides consumer
as required under applicable laws. insights for bringing about process related changes and

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system enhancements for improving the CSAT (Customer Officer is responsible for ensuring that the Cyber Security
Satisfaction) scores. systems remain effective and contemporary. He also
participates in the meetings of the Risk Management
During FY 2021-22, around 10,000 complaints were
Committee of the Company, whenever matters related to
received across Businesses, and more than 97% of these
cyber security are considered.
were resolved as on 31st March, 2022.
ITC’s Information Management Policy defines the
4. Details of instances of product recalls on account of
framework/policy on cyber security and risks related to
safety issues:
data privacy. ITC’s Privacy Policy is part of Information
Nil Management Policy and is published on ITC Portal (please
5. Does the entity have a framework/policy on cyber refer to https://www.itcportal.com/about-itc/policies/
security and risks related to data privacy? (Yes/No) If privacy-policy.aspx).
available, provide a web-link of the policy. 6. Provide details of any corrective actions taken or
A Cyber Security Committee, chaired by the Chief underway on issues relating to advertising, and delivery
Information Officer, is in place to provide specific focus on of essential services; cyber security and data privacy of
cyber security related risks, with the primary responsibility customers; re-occurrence of instances of product recalls;
of tracking emerging practices and technologies and penalty/action taken by regulatory authorities on safety
of products/services.
provide suitable recommendations for enhancing security
of the IT systems and infrastructure. The Chief Information Please refer to response given in Question 3 (Principle 9).

Leadership Indicators
1. Channels / platforms where information on products and services of the entity can be accessed (provide web
link, if available).
Products/Initiative Link
ITC Corporate Website https://www.itcportal.com/
ITC’s Businesses https://www.itcportal.com/businesses/index.aspx
ITCstore.in https://itcstore.in
ITC Brandworld https://www.itcportal.com/brands-microsite/default.aspx
“WeAssure” programme https://www.itchotels.com/content/dam/itchotels/in/umbrella/documents/WeAs-
sure-itc-hotels.pdf

2. Steps taken to inform and educate consumers about and consumer engagement by the Businesses. For
safe and responsible usage of products and/or services. example, ‘Appropriate Portion Guidance’ based on
All Businesses of the Company comply with the Serve Size and Recommended Daily Amount (RDAs)
regulations and relevant voluntary codes concerning has been initiated on front of the pack for enabling
marketing communications, including advertising, the consumers to know the nutritional attributes
promotion and sponsorship. The Company’s of the product, and thereby enabling them to make
communications are aimed at enabling consumers to
meaningful food choices. Also, claims which highlight
make informed purchase decisions. The Company also
the product’s ingredient and nutritional attributes
makes efforts to educate consumers on responsible
usage of its products and services. are being made on pack, in line with the applicable
regulatory & legal guardrails.
For more information, refer to ‘Product Sustainability’
section of ITC Sustainability & Integrated Report 2022. For more information on Product Information, Labelling
3. Mechanisms in place to inform consumers of any and Consumer Feedback Management, refer to
risk of disruption/discontinuation of essential services. ‘Product Sustainability’ section of ITC Sustainability &
Integrated Report 2022.
The Company has necessary mechanisms in place to
inform consumers if any major discontinuation happens. 5. Provide the following information relating to data
4. Does the entity display product information on the breaches:
product over and above what is mandated as per local
a. Number of instances of data breaches along-with
laws? (Yes/No/Not Applicable) If yes, provide details in
brief. Did your entity carry out any survey with regard impact
to consumer satisfaction relating to the major products Nil
/services of the entity, significant locations of operation
of the entity or the entity as a whole? (Yes/No) b. Percentage of data breaches involving personally
identifiable information of customers
As an integral part of ITC’s consumer satisfaction focus,
attention is paid to product information and labelling Nil

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Awards & Accolades Report REPORT AND ACCOUNTS 2022

Major Awards & Certifications 2021-2022

• ITC was awarded the First Prize in the ‘Best Industry • ITC’s Life Sciences and Technology Centre was
for CSR Activities’ category by the Ministry of ranked ‘Top Innovator’ in India amongst Indian
Jal Shakti, Government of India, at the 3rd National Pharma and Healthcare private companies.
Water Awards 2020. • ITC’s Foods Division bagged several gold awards at
• ITC was conferred the ‘CSR Excellence Award’ in the Maddies Mobile Marketing Awards 2021. Also
the Large category by the Institute of Company won the ‘Mobile Marketer of the Year’ Award at
Secretaries of India (ICSI) at the 6th ICSI CSR Maddies.
Excellence Awards. • ITC’s Savlon brand was awarded the ‘Best Campaign
• Mr Sanjiv Puri, Chairman & Managing Director, was in FMCG – Personal Care Category’ at the ET Brand
conferred ‘The IMPACT Person of the Year, 2020’ Equity - Brand Disruption Award 2021.
Award by exchange4media, a leading online news • ITC’s Paperboards & Specialty Papers Business
platform. received the ‘Platinum’ recognition from the
• Mr Sanjiv Puri, Chairman & Managing Director, was Confederation of Indian Industry for the Division’s
conferred an Honorary Doctorate by the best-in-class initiatives towards Industry 4.0 adoption.
XIM University, Bhubaneswar. • ITC’s Agri Business won the ‘Outstanding
• Mr Nakul Anand, Executive Director, was conferred Procurement Project of the Year’ Award for ‘Project
the HICSA (Hotel Investment Conference - South ASTRA’ at the Inflection Awards 2021.
Asia) Lifetime Achievement Award. • ITC was presented ‘Best In-house Legal Team of the
• ITC received ‘Leadership Level’ scores for both Year Award’ by the Legal Era Magazine at the Indian
‘Climate Change’ and ‘Water Security’ for the year Legal Awards 2020-21.
2021 by CDP. Sustained ‘AA’ rating by MSCI-ESG for • ITC won the First Prize in seven categories at the
the 4th successive year. Public Relations Society of India (PRSI) National
• ITC Windsor, ITC Grand Chola and ITC Gardenia Awards 2021.
became the first three hotels in the world to achieve • ITC’s Ranjangaon Unit was conferred the
the ‘LEED® Zero Carbon’ certification from the ‘Sarvashreshtha Suraksha Puraskar’ by National
U.S. Green Building Council (USGBC). Safety Council of India.

Major Awards & Certifications over the Years

• ITC was conferred the ‘Best Governed Company’ • ITC won the ‘Best Practices Award’ from United
Award in the Listed Segment: Large category by the Nations Global Compact Network India for two
ICSI at the 20th ICSI National Awards for Excellence major game-changing initiatives of the Company
in Corporate Governance (2020) – Integrated Watershed Development and Social &
• Mr Sanjiv Puri, Chairman & Managing Director, Farm Forestry (2017)
was honoured with the Distinguished Alumnus • ITC Limited became the 1st company to win the India
Award of the Year 2018’ conferred by IIT, Kanpur in Today Safaigiri Corporate Trailblazer Award 2016
recognition of his achievements of exceptional
merit (2018) • ITC’s Sankhya Data Centre, Bengaluru became
the first data centre in the world to get LEED®
• Mr Sanjiv Puri, Chairman & Managing Director, Platinum Certification from the U.S. Green Building
was ranked one of India’s Most Valuable CEOs by
Council (2016)
BW Businessworld (2019)
• ITC’s Paperboards and Specialty Papers units at
• ITC’s Kovai unit received the Platinum-level
Bhadrachalam, Bollaram, Kovai and Tribeni are
certification, the highest recognition for water
stewardship in the world, based on international FSC Chain of Custody certified (2015)
benchmarks, from the Alliance for Water • ITC was presented the World Business and
Stewardship, Scotland (2019) Development Award at the Rio+20 UN Summit for its
• ITC has won the prestigious Porter Prize 2017 Social and Farm Forestry Initiative (2012)
for ‘Excellence in Corporate Governance and • ITC was the 1st Indian Company and 2nd in the
Integration’ and for its exemplary contribution in world to win the Development Gateway Award for its
‘Creating Shared Value’ (2017) trailblazing e-Choupal initiative (2005)
For other awards and accolades, please refer to www.itcportal.com
 Business Responsibility
REPORT AND ACCOUNTS 2022 and Sustainability Report

ITC Infotech

2021: Leading the way into the hybrid,

agile and secure workplace of the future.
This was a year in which ITC Infotech took definitive In this context, ITC Infotech sharpened its focus on
measures to further strengthen its foundations for long- its strategic pillars of Customer Centricity, Employee
term, sustainable growth, built at the intersection of Centricity and Operational Excellence. The Company’s
domain and technology. During the COVID-19 pandemic, strategic pillars continue to build its resilience as an
the Indian Technology Market demonstrated immense organisation and enable it to help clients succeed
resilience. In 2021, it witnessed a phase of resurgence, and adapt to the changing business and technology
even as it continued to battle the ongoing war for talent. landscape.

Customer Centricity
ITC Infotech remained committed to its vision of work environments are increasingly becoming the
providing business-friendly solutions to its clients, norm. This calls for the need to find a balance between
leveraging industry-focused and differentiated employee flexibility and customer priorities, including
capabilities. The Company’s investments in client security. The Company launched an industry-defining
and future-focused capabilities including Digital ‘ITC Infotech Work From Anywhere’ (IWFA) productivity
Manufacturing, Digital Workplace Solutions and framework. IWFA redefines the future of work, allowing
Automation, continued to gain global Analyst employees the flexibility to work in a digital, distributed,
recognition. As organisations across the world and secure work environment, without compromising on
continue to adapt to a distributed workforce, hybrid client commitments, employee productivity or security.
Business Responsibility
and Sustainability Report REPORT AND ACCOUNTS 2022

Employee Centricity
Employee well-being and personalised engagement of continuous learning in a ‘Learn From Anywhere’
continue to play a pivotal role towards engaging model. ITC Infotech launched ‘Learning Hub’, an online
effectively with a distributed workforce. Keeping and mobile-friendly learning platform which gives
employee experience at the center, ITC Infotech personalised, bite-sized, and AI-enabled learning
reimagined ways to attract, train and retain high quality recommendations. Learning Hub provides curated
talent in the distributed and hybrid environment. learning pathways based on personal preferences and
To complement the IWFA initiative, the Company specified roles. In addition to the focus on continuous
expanded its focus on a ‘Hire From Anywhere’ learning, the Company strengthened its commitment
model, expanding its access to talent across Tier 2 to holistic development of its employees, through
and 3 cities. Building on IWFA, the Company also dedicated teams and programmes catering to personal
made dedicated investments in enabling a culture and professional development of the employee.

Operational Excellence
To keep pace with the evolving demands of the dedicated investments to take a leadership position
hybrid, distributed and agile work environment, the in enabling its clients to succeed in their Digital
Company further streamlined and strengthened its Transformation and SaaS adoption journey. ITC Infotech
core organisational processes, including Information made dedicated investments and undertook focused
Security, which is a critical enabler of success for ITC strategic initiatives in 2021. These investments and
Infotech as well as its clients. initiatives position the Company well to leverage the
Across all areas of business, Digital Transformation opportunities of the evolving business and technology
and Software as a Service (SaaS) adoption continue to landscape as well as meet its growth aspirations in
become mainstream. ITC Infotech will continue to make 2022 and beyond.

Global Analyst Recognitions

Information Services Zinnov: Avasant:

Group (ISG): Positioned in the Positioned as
Digital Manufacturing ‘Leadership Zone’ ‘Disruptor’
Capabilities profiled in an in the ‘Zinnov Zones Hyper in Avasant’s ‘Digital
exclusive Briefing Note Intelligent Automation Workplace Services
titled ‘ITC Infotech: Services 2021’ for 2021 RadarView™’
Business-friendly (1) Robotic Process
Approach Strategically Automation (Small &
Placing Manufacturers, Medium Service
a Step Ahead of Providers)
Competitors’ (2) IT Automation
(3) CPG-Retail
 Business Responsibility
REPORT AND ACCOUNTS 2022 and Enduring
Creating Sustainability Report
Institutions

CII-ITC Centre of Excellence

for Sustainable Development
The ‘CII–ITC Centre of Excellence for Sustainable An industry-led “Task Force on Afforestation” created
Development’, established by ITC in 2006 in collaboration with modalities for partnering with the Government of India on
the Confederation of Indian Industry (CII), continues to focus its mission of developing carbon sinks of 2.5-3 billion tonnes
on promoting sustainable business practices amongst Indian and restore 26 million hectares by 2030. It has developed
enterprises. An Advisory Council, which includes members methodologies for afforestation, covering aspects like carbon
from the industry, civil society and institutions, provides sequestration, biodiversity conservation, improved biomass
strategic direction to the Centre. availability and use by industry, Non Timber Forest Produce
The 16th Sustainability Summit - ‘Building a Resilient Future: (NTFP) sourcing, landscape restoration and building resilience. 
Leveraging Science, Technology and Finance’ was held The India Plastics Pact, a collaboration between the Centre
in September 2021 in partnership with 23 multi-sectoral and WWF, became part of a network of 13 Plastic Pacts
organisations. Dignitaries, like Shri Narendra Singh Tomar, across the globe, when it was formally launched at the 16th
Minister of Agriculture & Farmers Welfare, Government of Sustainability Summit. The Pact has set four major targets:
India; Ms Lea Wermelin, Minister of Environment, Government Eliminate unnecessary or problematic plastic packaging and
of Denmark; Shri Suresh Prabhu, Member of Parliament; items, reuse or recycle 100% of plastic packaging, recycle 50%
Mr Nigel Topping, High Level Champion for Climate Action, of plastic packaging and ensure 25% average recycled content
COP26; H.E. Mr Alexander Ellis, British High Commissioner across all plastic packaging.
to India; H.E. Mr Ugo Astuto, Ambassador, European Union The Centre, WWF India and GIZ jointly organised a virtual
to India and Mr Sanjiv Puri, CMD, ITC Limited gave keynote business consultation on the first draft of Post 2020 Global
addresses. There were 107 speakers with 25% global and 27% Biodiversity Framework, released by the Secretariat of the UN
female speakers and 800 participants. Convention on Biological Diversity on 17 August 2021. The key
The 16th CII-ITC Sustainability Awards were presented to recommendations submitted to MoEFCC included guidance on
21 companies in January 2022 for Corporate Excellence, goals & targets of Post 2020 Global Biodiversity Framework,
Environment Management, and Biodiversity. Shri Rao Inderjit development of modules & mechanisms for biodiversity
Singh, MP, Union Minister of State (Independent Charge) of conservation, and building partnerships and collaborations for
the Ministry of Statistics and Programme Implementation; effective management of biodiversity.
Union Minister of State (Independent Charge) of the Ministry Signatories to the Clean Air Better Life Forum has increased
of Planning and Union Minister of State in the Ministry of to 72 companies, who have agreed to work on a common
Corporate Affairs, and Mr. Sanjiv Puri, Chairman and MD, ITC framework for inter-corporate collaboration and sharing
Ltd recognised the winners. of best practices. The Industry Platform on Sustainable
A CEO level Working Group on Driving Accelerated Climate Transportation has 85 members, and as an outcome of
Action by Indian Businesses was established with the objective consultations held through 2021, a draft map of barriers on
of developing and driving a compelling strategy and action plan ground and potential solutions has been developed.
to enable Indian businesses to adopt aggressive sustainability A multi-agency project on air pollution was initiated in the
commitments for building a climate-resilient future. Work Indore Metropolitan Region (IMR). Air quality modelling is
is progressing rapidly on the action agenda developed by being conducted by IIT Delhi and is being downscaled for the
the working group comprising the creation of CII Vision 2030 IMR with inputs from experts at the California Air Resources
on Climate Change and Sustainability, establishment of the Board. The Project is also working with Smart City Indore
CII Climate Action Charter, MSME toolkit for climate risk to create a network of 50 sensors and drawing up a citizen
management, and interlinking climate related policy advocacy engagement plan with Smart City Indore and city doctors for
in CII Councils and Committees. promoting mass awareness on air pollution.

ITC Sangeet Research Academy

ITC Sangeet Research Academy (ITC-SRA), created in 1977 as Bhushan Pandit Ajoy Chakrabarty, Padma Shri Pandit Ulhas
an independent Public Charitable Trust, is an embodiment of Kashalkar, Pandit Partha Chatterjee, Pandit Uday Bhawalkar,
ITC’s sustained commitment to a priceless national heritage. Vidushi Subhra Guha and Shri Omkar Dadarkar. The focus
The Company’s pledge towards ensuring enduring excellence of the Academy remains nurturing of exceptionally gifted
in Classical Music education continues to drive ITC-SRA students, carefully hand-picked from across India. ITC-
in furthering its objective of preserving and propagating SRA provides its scholars with a stipend, along with free
Hindustani Classical Music through this modern Gurukul- tuition, boarding and lodging within its campus and in other
based on the traditional ‘Guru-Shishya Parampara’. designated locations under the tutelage of the country’s most
The Academy, through its eminent Gurus, imparts intensive distinguished musicians. The objective of ITC-SRA is to create
training and quality education in Hindustani classical music the next generation of masters of Hindustani Classical Music
to its scholars. The present Gurus of the Academy are Padma for the continued propagation of a precious legacy.
Business Responsibility
and Sustainability Report REPORT AND ACCOUNTS 2022
 ITC: Transforming Lives
and Landscapes

ITC e-Choupal Afforestation Watershed Climate Smart

 Empowering 4 million  Over 9,50,000 acres Development Agriculture
farmers greened  Watershed  4,50,000 farmers
 Increasing productivity  Supporting about development in over benefitted
and farmers’ income, 1.3 million acres
promoting sustainable 173 million person-days
agriculture, creating of employment in 16 States
market linkages

Women’s Empowerment Primary Education Skilling and Health & Sanitation

 Over 86,000 women  Over 8,60,000 rural
Vocational Training  Over 39,000 Individual
empowered children covered  Over 1,00,000 youth Household Toilets
economically enrolled constructed in
12 States

Pioneer of Green Building Movement in India Renewable Energy Solid Waste

 38 Platinum-rated Green Buildings  Around 42% of ITC's Management
 ITC Windsor, ITC Grand Chola and ITC Gardenia Energy is met from  Well Being Out of
are the first 3 hotels in the world to achieve Renewable Sources Waste (WOW) covers
LEED® Zero Carbon Certification over 1.8 crore citizens

ITC is the only enterprise in the world of comparable dimensions to be Carbon Positive,
Water Positive and Solid Waste Recycling Positive.
ITC’s businesses and value chains support over 6 million sustainable livelihoods.
 ITC Limited
CIN : L16005WB1910PLC001985
Registered Office : Virginia House, 37 Jawaharlal Nehru Road, Kolkata 700 071
Tel : +91 33 2288 9371 Fax : +91 33 2288 2358 E-mail : [email protected] Website : www.itcportal.com

NOTICE OF 111TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Hundred and Eleventh Annual General Meeting of the Members of ITC Limited
will be held on Wednesday, 20th July, 2022, at 10.30 a.m. (IST) for the transaction of the following businesses,
through Video Conferencing / Other Audio Visual Means in conformity with the regulatory provisions and the
Circulars issued by the Ministry of Corporate Affairs, Government of India:-

ORDINARY BUSINESS

1. To consider and adopt the Financial Statements of the Company for the financial year ended
31st March, 2022, the Consolidated Financial Statements for the said financial year and the Reports of the
Board of Directors and the Auditors thereon.

2. To confirm Interim Dividend of ` 5.25 per Ordinary Share of ` 1/- each and declare Final Dividend of
` 6.25 per Ordinary Share of ` 1/- each for the financial year ended 31st March, 2022.

3. To appoint a Director in place of Mr. David Robert Simpson (DIN: 07717430) who retires by rotation and,
being eligible, offers himself for re-election.

4. To appoint a Director in place of Mr. Nakul Anand (DIN: 00022279) who retires by rotation and, being eligible,
offers himself for re-election.

5. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:-

“Resolved that, in accordance with the provisions of Section 142 of the Companies Act, 2013, the
remuneration of ` 3,40,00,000/- (Rupees Three Crores and Forty Lakhs only) to Messrs. S R B C & CO LLP,
Chartered Accountants (Registration No. 324982E/E300003), Statutory Auditors of the Company, for conduct
of audit for the financial year 2022-23, payable in one or more instalments plus goods and services tax as
applicable, and reimbursement of out-of-pocket expenses incurred, be and is hereby approved.”

1
SPECIAL BUSINESS

6. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:-

“Resolved that, in accordance with the provisions of Sections 196 and 197 of the Companies Act, 2013,
Mr. Supratim Dutta (DIN: 01804345) be and is hereby appointed a Director, liable to retire by rotation, and
also a Wholetime Director of the Company for a period of three years with effect from 22nd July, 2022,
or till such earlier date to conform with the policy on retirement and as may be determined by the
Board of Directors of the Company and / or by any applicable statutes, rules, regulations or guidelines, on
such remuneration as set out in the Explanatory Statement annexed to the Notice convening this Meeting.”

7. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:-

“Resolved that, in accordance with the provisions of Section 197 of the Companies Act, 2013,
consent be and is hereby accorded to variation in the terms of remuneration payable to Mr. Sanjiv Puri,
Chairman & Managing Director, and Messrs. Nakul Anand and Sumant Bhargavan, Wholetime Directors,
with effect from 1st October, 2022, as set out in the Explanatory Statement annexed to the Notice convening
this Meeting.”

8. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:-

“Resolved that, in accordance with the provisions of Regulation 23 of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’),
consent be and is hereby accorded to the Company for entering into and / or continuing to enter into
transactions with British American Tobacco (GLP) Limited, United Kingdom (‘BAT GLP’), a related party
under Regulation 2(1)(zb) of the Listing Regulations, for sale of unmanufactured tobacco of Indian origin,
purchase of unmanufactured tobacco of international origins, storage / holding charges etc., as set out in
the Explanatory Statement annexed to the Notice convening this Meeting and on such terms and conditions
as may be mutually agreed between the parties, such that the maximum value of the transactions with
BAT GLP, in the aggregate, does not exceed ` 2,000 crores (Rupees Two Thousand Crores only) during
the financial year 2022-23.

Resolved further that the Board of Directors of the Company (‘the Board’, which term shall be deemed
to include the Audit Committee) be and is hereby authorised to perform and execute all such acts,
deeds, matters and things, including delegation of all or any of the powers conferred herein, as may be
deemed necessary, proper or expedient to give effect to this resolution and for the matters connected
therewith or incidental thereto, and also to settle any issue, question, difficulty or doubt that may arise in this
regard as the Board in its absolute discretion may deem fit or desirable, subject to compliance with the
applicable laws and regulations, without the Board being required to seek any further consent / approval
of the Members.”

2
9. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:-

“Resolved that, in accordance with the provisions of Section 148 of the Companies Act, 2013, the remuneration
of Messrs. ABK & Associates, Cost Accountants, appointed by the Board of Directors of the Company as
the Cost Auditors to conduct audit of cost records maintained by the Company in respect of ‘Wood Pulp’ and
‘Paper and Paperboard’ products for the financial year 2022-23, at ` 4,50,000/- (Rupees Four Lakhs and
Fifty Thousand only) plus goods and services tax as applicable, and reimbursement of out-of-pocket
expenses incurred, be and is hereby ratified.”

10. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:-

“Resolved that, in accordance with the provisions of Section 148 of the Companies Act, 2013, the remuneration
of Messrs. S. Mahadevan & Co., Cost Accountants, appointed by the Board of Directors of the Company as
the Cost Auditors to conduct audit of cost records maintained in respect of all applicable products of the
Company, other than ‘Wood Pulp’ and ‘Paper and Paperboard’ products, for the financial year 2022-23,
at ` 6,50,000/- (Rupees Six Lakhs and Fifty Thousand only) plus goods and services tax as applicable, and
reimbursement of out-of-pocket expenses incurred, be and is hereby ratified.”

The Record Date fixed for the purpose of determining entitlement of the Members to the Final Dividend for the
financial year ended 31st March, 2022 is Saturday, 28th May, 2022, and such Dividend, if declared, will be paid
between Friday, 22nd July, 2022 and Tuesday, 26th July, 2022 to those Members entitled thereto.

By Order of the Board

ITC Limited
R. K. Singhi
Executive Vice President &
Dated : 18th May, 2022. Company Secretary

3
NOTES:

(i) Explanatory Statement, pursuant to Section 102 of the Companies Act, 2013 (‘the Act’), relating to the
Special Business to be transacted at this Annual General Meeting (‘AGM’) is annexed.

(ii) Since this AGM will be held through Video Conferencing (‘VC’) / Other Audio Visual Means (‘OAVM’),
(a) Members will not be able to appoint proxies for the meeting, and (b) Attendance Slip & Route Map are not
annexed to this Notice.

(iii) Corporate Members are requested to send a certified copy of the Board Resolution authorising their
representative to attend this AGM, pursuant to Section 113 of the Act, through e-mail at [email protected], or by
post to the Investor Service Centre of the Company (‘ISC’) at 37 Jawaharlal Nehru Road, Kolkata 700 071.

(iv) In terms of Section 108 of the Act read with Rule 20 of the Companies (Management and Administration)
Rules, 2014, the Resolutions for consideration at this AGM will be transacted through remote e-voting (i.e. facility to
cast vote prior to the AGM) and also e-voting during the AGM, for which purpose the Board of Directors of
the Company (‘the Board’) have engaged the services of National Securities Depository Limited (‘NSDL’).
The Board has appointed Mr. R. L. Auddy, Senior Solicitor and Partner, Messrs. Sandersons & Morgans,
Advocates & Solicitors, as the Scrutinizer to scrutinize the process of e-voting.

Remote e-voting will commence at 10.00 a.m. on Friday, 15th July, 2022 and will end at 5.00 p.m. on
(v) 
Tuesday, 19th July, 2022, when remote e-voting will be blocked by NSDL.

(vi) Voting rights will be reckoned on the paid-up value of shares registered in the name of the Members on
Wednesday, 13th July, 2022 (cut-off date). Only those Members whose names are recorded in the
Register of Members of the Company or in the Register of Beneficial Owners maintained by the Depositories
as on the cut-off date will be entitled to cast their votes by remote e-voting or e-voting during the AGM.
Those who are not Members on the cut-off date should accordingly treat this Notice as for information
purposes only.

(vii) Pursuant to the Income-tax Act, 1961, dividend income is taxable in the hands of the Members and the
Company is required to deduct tax at source from such dividend at the prescribed rates. A communication
providing detailed information & instructions with respect to tax on the Final Dividend for the financial year
ended 31st March, 2022 is being sent separately to the Members.

(viii) Unclaimed dividend for the financial year ended 31st March, 2015 and the shares in respect of which
dividend entitlements remain unclaimed for seven consecutive years will be due for transfer to the
Investor Education and Protection Fund of the Central Government on 5th September, 2022, pursuant to
Section 124 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016. Members are requested to claim the said dividend, details of which are
available on the Company’s corporate website at http://info-dividend-shares.itcportal.com/popup_new.aspx .
ISC will not be able to entertain any claim received after 2nd September, 2022 in respect of the same.

4
(ix) In conformity with the applicable regulatory requirements, the Notice of this AGM and the Report and Accounts 2022
are being sent only through electronic mode to those Members who have registered their e-mail addresses
with the Company or with the Depositories.

(x) Members who hold shares in the certificate form or who have not registered their e-mail addresses with the
Company or with the Depositories and wish to receive the AGM Notice and the Report and Accounts 2022,
or participate in the AGM, or cast their votes through remote e-voting or e-voting during the meeting,
are required to register their e-mail addresses with the Company at https://eform.itcportal.com . Alternatively,
Members may send a letter requesting for registration of their e-mail addresses, mentioning their name
and DP ID & Client ID / folio number, through e-mail at [email protected] or by post to ISC. Detailed instructions
for participating in the AGM and for voting are provided hereunder.

(xi) Members who would like to express their views or ask questions with respect to the agenda items of the
meeting will be required to register themselves as speaker by sending e-mail to the Executive Vice President &
Company Secretary at [email protected] from their registered e-mail address, mentioning their name,
DP ID & Client ID / folio number and mobile number. Only those Members who have registered themselves
as speaker by 10.30 a.m. on Saturday, 16th July, 2022 will be able to speak at the meeting. The Company
reserves the right to restrict the number of questions and number of speakers, depending upon availability
of time, for smooth conduct of the AGM.

Further, Members who would like to have their questions / queries responded to during the AGM are requested
to send such questions / queries in advance within the aforesaid time period.

(xii) The Register of Directors and Key Managerial Personnel and their shareholding under Section 170
of the Act, the Register of contracts with related party, and contracts and bodies etc. in which Directors
are interested under Section 189 of the Act, and the Certificate from the Secretarial Auditors in respect
of the Company’s Employee Stock Option Schemes will remain available for inspection through
electronic mode during the AGM, for which purpose Members are required to send an e-mail to the
Executive Vice President & Company Secretary at [email protected] .

(xiii) The Company, in compliance with the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, will be webcasting the proceedings of the AGM on its
corporate website www.itcportal.com .

5
I. Instructions for attending the AGM through VC / OAVM
(a) 
Members who wish to attend this AGM through VC / OAVM are requested to follow the steps enumerated
under (II) below for login to the NSDL e-voting system.
After login, click on the ‘VC / OAVM’ link appearing under ‘Join Meeting’ against the Electronic Voting Event Number
(‘EVEN’) of ITC Limited.
(b) The facility for the Members to join this AGM through VC / OAVM will be available from 30 minutes before the time
scheduled for the meeting and may close not earlier than 30 minutes after the commencement of the meeting.
Members are requested to login to the NSDL e-voting system using their laptops / desktops / tablets with
(c) 
stable Wi-Fi or LAN connection for better experience. Members logging in from mobile devices or through
laptops / desktops / tablets connecting via mobile hotspot or with low bandwidth, may experience audio / video loss
due to fluctuation in their respective network.

II. Instructions for remote e-voting

Step 1: Access to NSDL e-voting website

(A) For Individual Members holding shares in dematerialised form:
For Members holding shares in demat account with NSDL
If you are registered for NSDL ‘IDeAS’ facility, you are required to follow the below-mentioned steps:
(a) Launch internet browser by typing the URL: https://eservices.nsdl.com and click on ‘Beneficial Owner’
tab under the ‘IDeAS’ section.
(b) Insert your existing user ID, password and the verification code as shown on the screen.
(c) After login, click on ‘Access to e-voting’ under value added services and you will be able to see the
e-voting page.
(d) Click on ‘evote’ link available against ITC Limited or ‘e-voting service provider - NSDL’ and proceed to
Step 2 to cast your vote.
If you are not registered for ‘IDeAS’, you are required to follow the below-mentioned steps:
Launch internet browser by typing the URL: https://evoting.nsdl.com and click on ‘Shareholder / Member - Login’.
(a) 
(b) Insert your existing user ID, password / OTP and the verification code as shown on the screen, and agree
to the terms and conditions by clicking the box.
(c) After authentication, you will be re-directed to NSDL e-services website wherein you will be able to see the
e-voting page.
(d) Click on ‘evote’ link available against ITC Limited or ‘e-voting service provider - NSDL’ and proceed to
Step 2 to cast your vote.
For Members holding shares in demat account with Central Depository Services (India) Limited (‘CDSL’)
If you are registered for CDSL ‘Easi / Easiest’ facility, you are required to follow the below-mentioned steps:
Login at www.cdslindia.com and click on ‘New System Myeasi’, or launch internet browser by typing the
(a) 
URL: https://web.cdslindia.com/myeasi/home/login .
(b) Insert your existing user ID and password.
(c) After login, you will be able to view the e-voting menu.
(d) Click on ‘evote’ link available against ITC Limited or ‘e-voting service provider - NSDL’ and proceed to
Step 2 to cast your vote.
You can also directly access the e-voting page by clicking on ‘E Voting’ on the home page of www.cdslindia.com
with your demat account number and PAN.
After OTP based authentication, you will be provided link for ‘evoting’ against ITC Limited or ‘e-voting service
provider - NSDL’. Click on the link and proceed to Step 2 to cast your vote.

6
 For Members logging in through the websites of their Depository Participants
(a) 
Login to your demat account, using the login credentials, through the concerned Depository Participant
registered with NSDL / CDSL for e-voting.
(b) Click on the option available for e-voting. You will be re-directed to NSDL e-services website wherein you will
be able to see the e-voting page.
(c) Click on ‘evote’ link available against ITC Limited or ‘e-voting service provider - NSDL’ and proceed to
Step 2 to cast your vote.
Members who are unable to retrieve their user ID or password are advised to use ‘Forgot User ID’ / ‘Forgot Password’
option(s) available on the websites of the respective Depositories / Depository Participants.
(B) For Non-Individual Members holding shares in dematerialised form and Members holding shares in
certificate form:
If you are holding shares in dematerialised form and are registered for NSDL ‘IDeAS’ facility, you can login at
https://eservices.nsdl.com with your existing IDeAS login and click on ‘Access to e-voting’ to proceed to Step 2
to cast your vote.
Other Members are required to follow the below-mentioned steps:
(a) Launch internet browser by typing the URL: https://evoting.nsdl.com and click on ‘Shareholder / Member - Login’.
(b) Insert your existing user ID, password and the verification code as shown on the screen.
User ID:

For Members holding shares in 8 character DP ID followed by 8 digit Client ID.

demat account with NSDL. For example, if your DP ID is IN300*** and Client ID is 12******,
then your user ID is IN300***12******.

For Members holding shares in 16 digit Beneficiary ID.

demat account with CDSL. For example, if your Beneficiary ID is 12**************, then your
user ID is 12**************.

For Members holding shares in EVEN followed by your folio number registered with the
certificate form. Company.
For example, if the EVEN is 101456 and your folio number is
01/12***, then your user ID is 1014560112***.

Password:
If you are already registered with NSDL for remote e-voting, you should use your existing
(i) 
password for login.
Members may also use OTP based login.
(ii) If you are using NSDL e-voting system for the first time, you would need to use your ‘initial password’
for login, which has been communicated to you by the Company.
(iii) If you are unable to retrieve the ‘initial password’, or have forgotten your password:
Click on ‘Forgot User Details / Password?’, if holding shares in dematerialised form, or
Click on ‘Physical User Reset Password?’, if holding shares in certificate form.
You may also send an e-mail requesting for password at [email protected], mentioning your
name, PAN, registered address and your DP ID & Client ID / folio number.
(c) Agree to the terms and conditions by clicking the box.
(d) Click on ‘Login’. Home page of remote e-voting opens.

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Step 2: Cast your vote on NSDL e-voting website

(a) Select the EVEN of ITC Limited.

(b) Now you are ready for remote e-voting as ‘Cast Vote’ page opens.
(c) Cast your vote by selecting appropriate option and click on ‘Submit’. Thereafter click on ‘Confirm’ when prompted;
upon confirmation, your vote is cast and the message ‘Vote cast successfully’ will be displayed.
Other Instructions
(a) Corporate and Institutional Members (companies, trusts, societies etc.) are required to send a scanned copy
(in PDF / JPG format) of the relevant Board Resolution / appropriate authorisation to the Scrutinizer through
e-mail at [email protected] with a copy marked to NSDL’s e-mail ID [email protected] .
Those who become Members of the Company after sending the Notice but on or before 13th July, 2022
(b) 
(cut-off date) may write to NSDL at [email protected] or to the Company at [email protected] requesting for user ID and
password. On receipt of user ID and password, the steps under ‘Step 2: Cast your vote on NSDL e-voting website’
should be followed for casting of vote.
(c) 
In case of any query / grievance, you may refer to the Frequently Asked Questions for Shareholders and
e-voting User Manual for Shareholders available under the Downloads section of NSDL’s e-voting website
www.evoting.nsdl.com or contact:
(i) Mr. Amit Vishal, Assistant Vice President, National Securities Depository Limited, Trade World, ‘A’ Wing, 4th Floor,
Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400 013 at telephone nos. 1800-1020-990
or 1800-224-430 (toll free) or at e-mail ID [email protected] ;
(ii) Mr. T. K. Ghosal, Head of ISC, at telephone nos. 1800-345-8152 (toll free) or 033-2288 6426 / 0034 or at
e-mail ID [email protected] . You may also send your queries to the e-mail ID [email protected] .

III. Instructions for e-voting during the AGM

(a) The procedure for e-voting during the AGM is same as mentioned under (II) above for remote e-voting.
(b) The aforesaid facility will be available only to those Members who participate in the AGM and who do not cast their
votes by remote e-voting prior to the AGM. Members who cast their votes by remote e-voting will not be entitled to
cast their votes again.

General Information
(a) There will be one vote for every Client ID / folio number irrespective of the number of joint holders.
(b) In case the Members require any technical assistance with respect to attending the meeting or voting during the
meeting, they may contact the helpline numbers mentioned above under Clause (c) of ‘Other Instructions’ for
remote e-voting.
Individual Members holding shares in dematerialised form may also reach out for any technical issue related to login
through their respective Depositories, i.e. NSDL and CDSL, as follows:
NSDL - e-mail at [email protected] or call at telephone nos. 1800-1020-990 or 1800-224-430 (toll free).
CDSL - e-mail at [email protected] or call at telephone nos. 022-2305 8738 or 022-2305 8542 / 43.
(c) The Results of voting will be declared within two working days from the conclusion of the AGM and the
Resolutions will be deemed to be passed on the date of the AGM, subject to receipt of requisite number
of votes. The declared Results, along with the Scrutinizer’s Report, will be available forthwith on the
Company’s corporate website www.itcportal.com under the section ‘Investor Relations’ and on the website of NSDL;
such Results will also be forwarded to the National Stock Exchange of India Limited, BSE Limited and
The Calcutta Stock Exchange Limited, where the Company’s shares are listed.

8
EXPLANATORY STATEMENT

Annexed to the Notice convening the Hundred and Eleventh Annual General Meeting to be held on Wednesday,
20th July, 2022.

Item No. 6

The Board of Directors of the Company (‘the Board’) at the meeting held on 18th May, 2022, on the recommendation
of the Nomination & Compensation Committee, recommended for the approval of the Members, the appointment of
Mr. Supratim Dutta as a Director and also as a Wholetime Director of the Company with effect from 22nd July, 2022,
as set out in the Resolution relating to his appointment, on the following remuneration:

(I) Basic / Consolidated Salary - ` 13,00,000/- per month.

(II) Performance Bonus - Not exceeding 200% of Basic / Consolidated Salary, payable annually for each
financial year, as may be determined by the Board.

(III) Long Term Incentives - Annual value not exceeding 0.05% of the net profits of the Company for the immediately
preceding financial year [computed in accordance with Section 198 of the Companies Act, 2013 (‘the Act’)],
as may be determined by the Board.

(IV) Perquisites - In addition to the aforesaid Basic / Consolidated Salary, Performance Bonus and Long Term
Incentives, Mr. Dutta shall be entitled to perquisites like gas, electricity, water, furnishings, leave travel
concession for self and family, club fees, personal accident insurance, sampling of the Company’s products
and services etc. in accordance with the rules of the Company, the monetary value of such perquisites
being limited to ` 10,00,000/- per annum, for the purposes of which limit perquisites shall be valued as per
the provisions of the Income-tax Act, 1961 (‘IT Act’) and the Rules thereunder, wherever applicable, and in
absence of any such provision, perquisites shall be valued at actual cost. However, the following shall not be
included in the aforesaid perquisite limit:

(a) Rent free accommodation owned / leased / rented by the Company, or Housing Allowance in lieu thereof,
as per the rules of the Company.

(b) Contributions to Provident Fund and Superannuation Fund up to 27% of salary and contribution to
Gratuity Fund up to 8.33% of salary, as defined in the rules of the respective Funds, or up to such other
limit as may be prescribed under the IT Act and the Rules thereunder for this purpose.

(c) Perquisite value in terms of the IT Act and the Rules thereunder upon exercise of Options and / or
Stock Appreciation Rights granted under the Company’s Employee Stock Option Schemes and / or
Employee Stock Appreciation Rights Scheme.

9
 (d) Medical expenses for self and family as per the rules of the Company.

(e) Use of chauffeur driven Company car and telecommunication facilities at residence (including payment for
local calls and long distance official calls).

(f) Encashment of unavailed leave as per the rules of the Company at the time of retirement / cessation of
service.

(g) Long service award as per the rules of the Company.

(h) Costs and expenses incurred by the Company in connection with joining / transfer / retirement as per the
rules of the Company.

The aggregate of the remuneration and perquisites / benefits, including contributions towards Provident Fund,
Superannuation Fund and Gratuity Fund, payable to Mr. Dutta along with the Chairman & Managing Director and
the other Wholetime Directors of the Company taken together, shall be within the limit prescribed under the Act.

Mr. Dutta, pursuant to Section 152 of the Act, has given his consent to act as a Director of the Company, and has also
given requisite Notice, pursuant to Section 160 of the Act, proposing his appointment as a Director of the Company.

Additional information in respect of Mr. Dutta, including his brief resume, pursuant to the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standard on
General Meetings, is provided below:

Mr. Supratim Dutta (55) is the Chief Financial Officer (‘CFO’) and a Member of the Corporate Management Committee
of the Company.

A qualified Chartered Accountant and Cost Accountant, Mr. Dutta joined the Company in November 1990. In a
career spanning over three decades at ITC, he has held various senior roles in the finance function, both at the
business and corporate level. Before becoming the CFO, he held the position of Corporate Financial Controller
of the Company responsible for Accounts, Taxation and Finance operations, and prior to that, he was
Executive Vice President - Corporate Finance in charge of the Corporate Treasury, Strategic Planning and
Corporate Planning functions of the Company. He has handled various aspects of finance including Planning,
Treasury, M&A, Accounting, Taxation, IT, Investor Relations and business strategy.

Mr. Dutta is presently a Non-Executive Director on the Boards of some of the subsidiaries of the
Company viz., Surya Nepal Private Limited, WelcomHotels Lanka (Private) Limited, Russell Credit Limited (‘RCL’),
ITC Investments & Holdings Limited and Indivate Inc., USA. He is a Member of the CII National Committee on
Financial Reporting and of the World Business Council for Sustainable Development CFO Network. He is also a
Member of the Nomination and Remuneration Committee of RCL. He has not been a Director of any listed company.

10
Mr. Dutta possesses appropriate skills, expertise and competencies in the context of the Company’s businesses,
particularly in the areas of finance, accounts and management. He presently holds 4,51,180 Ordinary Shares in the
Company; he does not hold any share in the Company on a beneficial basis for any other person.

Mr. Dutta, and his relatives, are interested in this Resolution. None of the Directors and Key Managerial Personnel
of the Company, or their relatives, is interested in this Resolution. Mr. Dutta is not related to any of the Directors or
Key Managerial Personnel of the Company.

The Board recommends this Resolution for your approval.

Item No. 7

The Board of Directors of the Company (‘the Board’) at the meeting held on 18th May, 2022, on the recommendation
of the Nomination & Compensation Committee, recommended for the approval of the Members, variation in the
terms of remuneration payable to Mr. S. Puri, Chairman & Managing Director, and Messrs. N. Anand and B. Sumant,
Wholetime Directors, with effect from 1st October, 2022, as detailed hereunder.

The proposed variation in remuneration is based on the Company’s remuneration strategy of being market competitive,
performance driven and long-term oriented, while recognising the enduring impact of leadership on business
performance and the need to reward talent. The said variation in remuneration also cognises for market benchmarks,
compensation trends and the Company’s context.

Name of the Director Period Basic / Consolidated

Salary per month
Mr. S. Puri
` 26,00,000/-
(Chairman & Managing Director)
From 1st October, 2022 till the
Mr. N. Anand
respective date of their
(Wholetime Director)
term of appointment ` 15,00,000/- per Director
Mr. B. Sumant
(Wholetime Director)
Mr. R. Tandon, Wholetime Director, will be retiring from the services of the Company on 21st July, 2022.

All other terms of remuneration of Messrs. Puri, Anand and Sumant, as approved by the Members, will remain
unchanged.

The aggregate of the remuneration and perquisites / benefits, including contributions towards Provident Fund,
Superannuation Fund and Gratuity Fund, payable to the Chairman & Managing Director and the Wholetime Directors
of the Company taken together, shall be within the limit prescribed under the Companies Act, 2013.

11
Additional information in respect of Messrs. Puri, Anand and Sumant, pursuant to the Secretarial Standard on
General Meetings, is appearing in the Report and Accounts under the sections ‘Your Directors’ and ‘Report on
Corporate Governance’.

Messrs. Puri, Anand and Sumant, and their relatives, are interested in this Resolution insofar as the same relates to
variation in their respective remuneration. None of the other Directors and Key Managerial Personnel of the Company,
or their relatives, is interested in this Resolution.

The Board recommends this Resolution for your approval.

Item No. 8

Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (‘Listing Regulations’) read with the Company’s Policy on Related Party Transactions, effective
1st April, 2022, provides that entering into material related party transactions which, either individually or taken
together with previous transaction(s) during a financial year, exceed ` 1,000 crores or 10% of the annual consolidated
turnover of the Company as per the last audited financial statements, whichever is lower, requires approval of the
Members of the Company.

The Company, in order to further its business interests, enters into various transactions with its related parties.
Amongst these transactions, the estimated value of transactions with British American Tobacco (GLP) Limited,
United Kingdom (‘BAT GLP’), a related party under Regulation 2(1)(zb) of the Listing Regulations, during the
financial year 2022-23 is expected to exceed the materiality threshold as stated above.

Accordingly, the Board of Directors of the Company (‘the Board’) at the meeting held on 18th May, 2022, on
the recommendation of the Audit Committee, recommended for the approval of the Members, entering into
material related party transactions with BAT GLP during the financial year 2022-23, as set out in the Resolution.
These transactions will be entered in the ordinary course of business and on arm’s length basis.

Other details of the transactions, pursuant to the SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated
22nd November, 2021, are given hereunder:

Sl. Particulars Details of transactions

No.
(i) Name of the related party British American Tobacco (GLP) Limited, United Kingdom
(‘BAT GLP’), a subsidiary of British American Tobacco p.l.c.
(BAT PLC).
(ii) Nature of relationship The Company is an associate of Tobacco Manufacturers (India)
Limited, which is a subsidiary of BAT PLC. By virtue of the same,
BAT PLC and its subsidiaries are related parties of the Company.

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 Sl. Particulars Details of transactions
No.
(iii) Nature and material terms of the
Nature of the proposed transaction Estimated value for
transaction
the financial year
2022-23
Sale of unmanufactured tobacco of ` 1,990 crores
Indian origin (including storage / holding
charges etc.)
Purchase of unmanufactured tobacco of ` 10 crores
international origins

Pricing will be benchmarked to similar transactions with

unrelated parties with adjustments for commercial terms, as necessary.
(iv) Tenure of the transaction Financial year 2022-23
(v) Nature of concern or interest Financial
(vi) Value of the transaction Up to ` 2,000 crores
(vii) Percentage of the Company’s 3.10%
annual consolidated turnover
for the immediately preceding
financial year, that is represented
by the value of the proposed
transaction
(viii) Justification as to why the related The Company has been engaged in development, procurement
party transaction is in the interest and supply of unmanufactured tobacco over the last several
of the Company decades. The Company’s vast experience and strategic capabilities
that it has developed in this area have enabled it to become the
largest exporter of unmanufactured tobacco from India.
The Company has been exporting unmanufactured tobacco to
BAT GLP for the past several years.
The proposed transactions will aid the growth of the
Company’s business.
(ix) Details of valuation or other Not applicable
external party report, if such
report has been relied upon
(x) Any other information that may Nil
be relevant

None of the Directors and Key Managerial Personnel of the Company, or their relatives, is interested in this Resolution.

Members may note that pursuant to the provisions of the Listing Regulations, all related parties of the Company
(whether such related party is a party to the above-mentioned transaction or not) shall not vote to approve
this Resolution.

The Board recommends this Resolution for your approval.

13
Item Nos. 9 & 10

The Board of Directors of the Company (‘the Board’) at the meeting held on 18th April, 2022, on the recommendation
of the Audit Committee, approved the appointment and remuneration of Messrs. ABK & Associates, Cost Accountants,
to conduct audit of cost records maintained by the Company in respect of ‘Wood Pulp’ and ‘Paper and Paperboard’
products, and Messrs. S. Mahadevan & Co., Cost Accountants, to conduct audit of cost records maintained
in respect of the other applicable products of the Company, including Flexibles, Soyabean Oil, Mustard Oil,
Facewash, Handwash, Vegetable and Fruit wash, Hand Sanitizer, Floor Cleaner, Coffee and Antiseptic Liquid, for the
financial year 2022-23.

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014,
remuneration of the Cost Auditors is required to be ratified by the Members of the Company.

None of the Directors and Key Managerial Personnel of the Company, or their relatives, is interested in these
Resolutions.

The Board recommends these Resolutions for your approval.

By Order of the Board

ITC Limited
R. K. Singhi
Executive Vice President &
Dated : 18th May, 2022. Company Secretary

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