ORGANISATIONAL BEHAVIOUR

GROUP- 6 SECTION- D

CONTENTS
Sr.No 1. 2. 3. TOPIC ITC Profile Governance structure Vision and mission Pg No. 1 2 3
1

4. 5. 6. 7. 8. 9. 10. 11. 12.

E Choupal Code of conduct

3 4

Segment wise contribution of 5 ITC Core values Personal conduct Remuneration FMCG portfolio Three tier structure Recommendations 5 6 7 8 governance 8 9

ITC PROFILE
ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 8 billion and a turnover of over US $ 4.75 billion. ITC also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 22,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3, 74,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value for the nation and for the Shareholder." ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. The Company now stands rechristened ITC LTD. ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in February 2008. ITC is a board-managed professional company, committed to creating enduring value for the shareholder and for the nation. It has a rich organizational culture rooted in its core values of respect for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong corporate governance policies and systems.

Governance Structure
Chair of the highest governance body

The Chairman of ITC, Yogesh Chander Deveshwar, is the Chief executive of the Company. He is the Chairman of the board and the CMC. His primary role is to provide leadership to the board

and the CMC for realizing Company goals in accordance with the charter approved by the board.

Board of Directors (Board)

The ITC board is a balanced board, comprising 4 executive and 9 non-executive Directors (including 7 Independent Directors) as on 31st March, 2007.

Selection of Directors
ITCs Governance policy stipulates that the nonexecutive Directors (including Directors) be drawn from amongst eminent professionals with experience in business/finance/ Law/public enterprises. Directors are appointed/ re-appointed with the approval of the shareholders for a period of three to five years or a shorter duration in accordance with retirement guidelines as determined by the board from time to time. One third of the Directors who are liable to retire by rotation, retire every year and are eligible for re-election. The selection of Directors is done by the nominations Committee, which comprises all the non-executive Directors and the Chairman.

Performance of the highest governance body

The role of the board is to provide direction and exercise control to ensure that the Company is managed in a manner that fulfils stakeholders aspirations and societal expectations. The board evaluates Directors collectively to reinforce the principle of collective responsibility.

Vision
SUSTAIN ITCS POSITION AS ONE OF INDIAS MOST VALUABLE CORPORATIONS THROUGH WORLD CLASS PERFORMANCE, CREATING GROWING VALUE FOR THE INDIAN ECONOMY AND THE COMPANYS STAKEHOLDERS.

Mission
TO ENHANCE THE WEALTH GENERATING CAPABILITY OF THE ENTERPRISE IN A GLOBALISING ENVIRONMENT, DELIVERING SUPERIOR AND SUSTAINABLE STAKEHOLDER VALUE.

E CHOUPAL
ITC has taken the role of the power of partnerships in public, private and not-for-profit sectors through e-Choupal. Farmers selected from within the community, designated as "Choupal Sanchalaks", manage these kiosks. Sanchalaks help farmers' access different agricultural crop-specific websites that ITC has created in relevant local languages.
In this process, ITC has innovated a win-win situation for the farmers and the share holders of ITC by linking the farm operations directly to their agri-export business through e-Choupal. The system has avoided the middlemen and also ensured quality product reaching the national and international markets with quality certification needed by the importing countries.

CODE OF CONDUCT
Dealing with People in the Organization

In dealing with each other, directors, senior management and employees shall uphold the values which are at the core of our HR Philosophy - trust, teamwork, mutuality and collaboration, meritocracy, objectivity, self respect and human dignity. Indeed, these values form the basis of our HR management systems and processes..ITC will focus on meritocracy, equity and upholding of Company values in all people processes including performance management systems, appraisals, remuneration and rewards.

A Gender Friendly Workplace-

As a good corporate citizen, ITC is committed to a gender friendly workplace. It seeks to enhance equal opportunities for men and women, prevent/stop/redress sexual harassment at the workplace and institute good employment practices. Sexual harassment includes unwelcome sexually determined behavior such as: unwelcome physical contact; a demand or request for sexual favors; sexually colored remarks; showing pornography and any other unwelcome physical, verbal or non-verbal conduct of a sexual nature. ITC maintains an open door for reportees; encourages employees to report any harassment concerns and is responsive to employee complaints about harassment or other unwelcome and offensive conduct. A committee has been constituted to enquire into complaints and to recommend appropriate action, wherever required.

Relationships with Suppliers and Customers All directors, senior management and employees shall ensure that in their dealings with suppliers and customers, the Companys interests are never compromised. Accepting gifts and presents of more than a nominal value, gratuity payments and other payments from suppliers or customers will be viewed as serious breach of discipline as this could lead to compromising the Companys interests.

Legal compliance It is the Companys policy to comply fully with all applicable laws and regulations. Ensuring legal and regulatory compliance is the responsibility of the Chief Executives of the Businesses and the Divisional Management Committees. The Company cannot accept practices which are unlawful or may be damaging to its reputation. Divisional Management Committees must satisfy themselves that sound and adequate arrangements exist to ensure that they comply with the legal and regulatory requirements impacting each business and identify and respond to developments in the regulatory environment in which they operate.

SEGMENT WISE CONTRIBUTION TO ITC

Segment

Dominance

Contribution % Revenue PBIT 87.7% 10.7% 3.7%

Cigarettes

70% share

77.0% 7.3% 7.0%

Paper & Packg. Packaging board No. 1 in Asia Agri business Hotels FMCG (Others) 1of the largest exporters from India ITC Group ranks No.2 20% share of greeting cards market, 'Aashirvaad' atta is No.1 in branded segment

4.3% 4.4%

5.4% -7.5%

CORE VALUES
Trusteeship
As professional managers, we are conscious that ITC has been given to us in "trust" by all our stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis.

Customer Focus
We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction

Respect For People

We are result oriented, setting high performance standards for ourselves as individuals and teams.We will simultaneously respect and value people and uphold humanness and human dignity.We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives.

Excellence
They do what is right, do it well and win. They will strive for excellence in whatever we do.

Innovation

They will constantly pursue newer and better processes, products, services and management practices.

Nation Orientation
They are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels.

Personal Conduct
All directors,

senior management and employees have the obligation to conduct themselves in an honest and ethical manner and act in the best interest of the Company at all times. They are expected to demonstrate exemplary personal conduct through adherence to the following:

Avoidance of Conflict of Interest

All directors, senior management and employees must avoid situations in which their personal interest could conflict with the interest of the Company.

Transparency and audibility All directors, senior management and employees shall ensure that their actions in the conduct of business are totally transparent except where the needs of business security dictate otherwise. Such transparency shall be brought about through appropriate policies, systems and processes, including as appropriate, segregation of duties, and involvement of more than one manager in key decisions and maintaining supporting records.

Protection of Confidential Information

No director, senior management and employee shall disclose or use any confidential information gained in the course of employment/ association with the Company for personal gain or for the advantage of any other person.

Company Facilities
No director, senior management and employee shall misuse Company facilities. In the use of Company facilities, care shall be exercised to ensure that costs are reasonable and there is no wastage.

Leading by Example
The organizations directors and senior management set the professional tone for the Company. ITCs directors, senior management and employees must constantly reinforce through their actions and behavior that ITCs stated beliefs of responsible corporate citizenship are rooted in individual conviction and personal integrity.

REMUNERATION
ITC believes that managerial remuneration is an important instrument in attracting and retaining talent and a key component of the performance management system. Three features of ITC's remuneration strategy are: Remuneration must leverage performance and therefore the need for a strong linkage between remuneration and performance when considering annual remuneration reviews as well as when periodically adjusting remuneration for market. Remuneration must be market-led. For this purpose remuneration is reviewed on an on-going basis in relation to identified benchmark companies to ensure that remuneration practices are in sync with the competitive situation. Remuneration must take into account "affordability" and the Company's capacity to pay and updation .The policy is implemented at all locations of hence cannot be
divorced from business reality.

FMCG PORTFOLIO
2000 Expressions-Gift Wrappers, autograph books, and slam books, wills sport

2001 2002

Kitchen of India- ready to eat-Indian gourmet dishes. Wills classic formal wear, John players- for mens wear, Arshirwad Atta(wheat floor), Mintos, Candy man(confectionery)

2003 2007

Wills club life evening wear, classmate note book, Sunfeast (biscuits) Miss players-for young women

3 TIER GOVERNANCE STRUCTURE

RECOMENDATIONS
ITC being a market leader in cigarettes should try and concentrate on it and should expand it to other parts of the globe presence in this industry.

 ITC should not enter any product lines or segment just for the sake of entering. However, should capture a significant market share. For e.g. Vivel soap and Fiama diwills shampoo. ITC ltd. deals in all the products starting from safety matches and aggarbattis to garments and agri-business segment. So , it should try an open a company outlet or retail mall shop like big bazaar etc. and provide goods at cheaper rates by removing the middlemen and creating brand loyalty for its products.