Global growth slowed down from 3.5% in 2023 to 3.3%¹
in 2024 and remained appx. 40 bps below long-term trend
rate ² Amongst Advanced Economies which grew at 1.8%
(Vs. 1.7% in 2023), uptick in EU (0.9% in 2024 Vs. 0.4%
in 2023) was offset by a relatively slower pace of growth in
US & Japan. Emerging Markets & Developing Economies
grew at a subdued rate of 4.3% (Vs. 4.7% in 2023), largely
due to structural weakness in China. Rising geopolitical
tensions, evolving global trade dynamics and extreme
weather events have rendered the global macroeconomic
environment highly uncertain and volatile.

Aggregate global economic growth, as per recent IMF
estimates, is expected to decelerate sharply by 50 bps
to 2.8% in 2025. Advanced Economies are expected
to grow at a slower pace of 1.4% with US GDP growth
projected to decelerate by 100 bps to 1.8% in 2025.
Growth in Emerging Markets and Developing Economies
is estimated to decelerate by 60 bps to 3.7% in 2025.

India continues to remain the fastest growing large
economy in the world - a relatively bright spot amidst the
challenging global operating environment. The pace of
growth, however, moderated from 9.2% in FY 2023-24
to 6.5% in FY 2024-25. While headline inflation (CPI)
remained within the RBI's target range at 4.6%, food
inflation witnessed a sharp uptick (FY 2024-25: 7.3% YoY).
The impact of inflationary pressures on household savings
weighed on consumption expenditure, particularly in urban
markets; however, demand in rural markets was relatively
resilient. The weakness in consumption was reflected,
inter alia, in the muted volume growth of the FMCG sector.

While growth in Industry witnessed deceleration
at 5.6% (Vs. 10.8% in FY 2023-24), Services sector grew
at 7.3% and the Agri sector witnessed an uptick
at 4.6% (Vs. 2.7% in FY 2023-24).

India's macro-economic variables are expected to
remain stable in the year ahead, with GDP growth for
FY 2025-26 expected to be appx. 6.5%. Consumption
expenditure is expected to pick up progressively led by
continued recovery in rural demand backed by a good
monsoon, along with improvement in urban demand
as inflation stabilises and tax cuts announced in the
Union Budget boost disposable incomes. The cumulative
impact of pick-up in capex in the second half of
FY 2024-25 and front loading of Government capex outlay
in FY 2025-26, along with interest rate cuts and liquidity
support from RBI, would also be supportive of growth.

The Indian economy is poised to grow rapidly in the
years ahead driven by structural factors such as a
favourable demographic profile, increasing affluence,
rapid urbanisation, accelerated digital adoption and
the entrepreneurial spirit of its people. Government of
India's thrust on strengthening the country's physical
and digital public infrastructure, focus on enhancing the
competitiveness of the manufacturing sector, indirect/direct
taxation and financial sector reforms, along with measures
to promote ease of doing business, are expected
to power the economy going forward. While higher
capital expenditure outlays and focus on infrastructure
are expected to drive growth and competitiveness
of domestic manufacturing, focus on agri-related
schemes is expected to boost farmers' welfare and
rural consumption demand, spurring a virtuous
consumption-investment-employment cycle.

Policy interventions focused on supporting sustainable
livelihoods and fostering inclusive growth remain critical in
sustaining and accelerating India's economic growth path.

Structural support would need to be provided to sectors
with potential for large economic-multiplier impact.
In this regard, the development of robust domestic agri
and wood-based value chains hold special importance
in the Indian context, given their enormous potential to
contribute to national objectives.

India is amongst the leading producers in the world of
several agri-commodities, including milk, rice, wheat,
sugarcane, cotton, pulses, spices and fruits & vegetables.
India's agri exports have witnessed strong performance
in recent years; touching a peak of US$ 53 billion in
FY 2022-23, moderating to US$ 50 billion in FY 2024-25
due to trading restrictions on agri-commodities amidst
concerns over food security and inflation on the back of
geopolitical tensions and climate emergencies. However,
India's share of global agri-trade remains low at only
about 3%. Enhancing agricultural productivity and value
addition to international standards, while simultaneously
improving market linkages, remain critical to enhance
competitiveness of the agri sector and drive significant
increase in farmers' income.

The increasing severity and frequency of extreme
weather events such as droughts and floods pose
enormous threats to the farm sector, making it imperative
to strengthen climate resilience and adaptability of the
agri-food sector. An exponential increase in crop
production and productivity, backed by climate smart
agriculture, will be critical in meeting the growing needs
of an increasing population as also in mitigating the
potential risks. Evolving consumer preferences are also
driving a shift towards nutritious and sustainably sourced
food products. These developments accentuate the need
to enhance the competitiveness of agri value chains to
cater to the fast-evolving market requirements. India,
with its tremendous strengths in this sector, has a unique
opportunity to play a leading role in this global transition
and in forging an eco-system of sustainable, regenerative
and climate smart agriculture.

In this regard, the Government's focus on promoting Farmer
Producer Organisations (FPOs) holds immense potential
to catalyse agricultural transformation by leveraging
economies of scale, enabling sustainable agriculture,
supporting market-led production and creating larger
market access. Government interventions encouraging
private and public investment in post-harvest activities
including aggregation, modern storage, efficient supply
chain, primary and secondary processing, marketing
and branding, along with measures to harness the power
of agri-tech across the agri value chain are steps in the
right direction and will go a long way in unlocking the full
potential of the agri sector.

Your Company has adopted targeted collaborative
models to multiply the scale and impact of its agri and rural
interventions. This collaborative approach, as opposed
to a traditional transactional approach, can contribute
meaningfully towards building next generation agriculture
that is climate resilient and capable of supporting gainful
livelihoods. Digitalisation of agriculture also offers the
potential to increase productivity and foster structural
changes across the value chain thereby enabling
efficient use of resources. Your Company had launched
ITCMAARS (Metamarket for Advanced Agriculture and
Rural Services), that combines the power of cutting-edge
digital technologies with NextGen agri practices. This
initiative continues to be scaled up rapidly and currently
covers over 2.1 million farmers and over 2,050 FPOs,
across 11 states and over 18,000 villages. This 'phygital'
ecosystem continues to empower the farming community
and FPOs by delivering personalised and dynamic
advisory services as well as hyperlocal offerings including
market linkages, agri inputs and credit enablement. Further
details on this transformative initiative are provided in the
Agri Business section of this report.

It is pertinent to note that a substantial quantum of food is
wasted along the chain in India, depending on the season
and the inherent perishability of the crop. Higher levels of

food processing in the economy can create a much larger
pull for quality agri-commodities, thereby reducing farm
wastages and raising farm incomes. This would require
focused investments in developing product-specific
climate-controlled infrastructure as well as in branded
products that benefit large agri-value chains. Corporate
participation is essential not only to invest in requisite
infrastructure, but also to provide assured market linkages
to farmers. A strong focus on India's food processing
sector can play a pivotal role in catalysing a large multiplier
effect, leading to significant job creation, enhanced rural
incomes and sustainable management of food inflation.

Similarly, the Agro-forestry sector, as a source of raw
material for wood-based industry, is woefully constrained
by policies that not only impede job creation in India
but also promote avoidable imports. There is a need for
appropriate policy interventions and regulatory changes
at national level to utilise full potential of agro forestry in
the country.

Your Company's interventions across operating segments
are aligned to the national priorities of enhancing
competitiveness of Indian agriculture and industry,
generating large-scale employment opportunities and
supporting sustainable livelihoods, driving import
substitution, creating national brands to maximise value
capture in India, increasing Indian agri exports and
promoting sustainable business practices. For instance,

' ITC Mission Millets', which leverages enterprise
strengths in agriculture, food and hospitality to implement
multi-dimensional interventions in this area, has resulted
in significant increase in awareness and demand for
millets. 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 'Aatma Nirbhar Bharat' that seeks to make the country
stronger, resilient and more competitive.

As reported in earlier years, your Company's collaboration
with NITI Aayog, aimed at boosting agricultural and allied

activities in 27 Aspirational Districts across eight states,
started in July 2022. The multi-year project covering a wide
range of activities, was successfully completed in the first
quarter of the year, with the Government taking forward
the farmer capability modules and the design elements of
model villages promoted by your Company. The farmer
training modules prepared by your Company are now
being used by district Krishi Vigyan Kendras (KVKs) in all
27 districts. During the year, the KVKs themselves trained
over 3,500 Government agricultural department officials
who in turn cascaded the training in over 9,500 villages.
Agricultural departments are promoting 1,350 hub villages
in these districts for demonstration of best practices.

Your Company is working towards developing community
institutions, promoting women agriculturists, facilitating
cadre of women service providers like Pashu Sakhis,
Yojana Sakhis, and Krishi Sakhis and fostering nano and
micro entrepreneurship through Agri-Business Centres
and Self-Help Groups. Custom hiring centres for farm
mechanisation, post-harvest product management
infrastructure and community managed seed banks
for self-reliance in quality seed material are also being
facilitated. Environmentally sustainable farm practices,
including zero-till sowing of wheat, direct seeding of rice,
micro-irrigation and watershed development, continue to
be promoted.

Your Company had earlier collaborated with CGIAR's
'Climate Change and Food Security Programme' to
create a template for Climate Smart Villages (CSVs),
under the Climate Smart Agriculture (CSA) programme.
The template has since been further strengthened by
your Company basis the field experiences and now
covers over 7,000 villages across 12 states covering over
21.80 lakh acres, supporting farmers in the management
of risks arising from erratic weather events.

Including the acreage in CSVs, the Climate Smart
Agriculture (CSA) programme now covers over
31.70 lakh acres in 19 states. Further, as per the

studies done by reputed ICAR - Agricultural Technology
Application Research Institute, Kanpur, the CSA practices
promoted in Rice and Wheat crops together have
demonstrated reduction of costs up to 21%, improvement
in yields up to 8% and consequently, increase in incomes
up to 23% as compared to conventional practices.

In Kapurthala District, Punjab, your Company under its
flagship programme of 'ITC Mission Sunehra Kal' has,
over the last seven years, implemented solutions that
have effectively substituted the burning of paddy stubble
by farmers. During the year, the programme covered
nearly 2.84 lakh acres with appx. 96% of the area
(2.73 lakh acres) witnessing total stoppage of stubble
burning, thereby avoiding appx. 2.14 lakh tonnes of
carbon release into the atmosphere.

Although India accounts for appx. 18% of the
world population, its share of natural resources is
disproportionately low with only 2% of global land mass,
4% of freshwater resources and 2% of forest resources.
It is more critical than ever before to redouble efforts, both
at the national and corporate level, to fashion strategies
that foster sustainable, equitable and inclusive growth.

It is your Company's belief that businesses can bring
about transformational change by pursuing innovative
business models that synergise the creation of sustainable
livelihoods and the preservation of natural capital while
enhancing shareholder value. This 'Triple Bottom Line'
approach to creating larger 'stakeholder value', as opposed
to merely focusing on uni-dimensional 'shareholder value'
creation, is the driving force that defines your Company's
sustainability vision and its growth path into the future.

Your Company is a global exemplar in 'Triple Bottom Line'
performance. The focus on creating unique business
models that generate substantial livelihoods across the
value chains has led to your Company's Businesses
supporting nearly nine million sustainable livelihoods,
many of whom belong to the weaker sections of society.

Your Company sustained its 'AA' rating by MSCI-ESG for
the seventh successive year - the highest amongst global
tobacco companies. Based on its ESG score as assessed
by S&P Global Corporate Sustainability Assessment (CSA),
your Company has also been included in the Dow Jones
Sustainability Emerging Markets Index for the fifth year in
a row - a reflection of being a sustainability leader in the
industry and a recognition of its continued commitment to
people and planet.

Your Company is a pioneer in the green building
movement, with 17 buildings having received Platinum
certification by USGBC (US Green Building Council)/IGBC
(Indian Green Building Council). To continuously reduce
your Company's energy footprint, green features continue
to be integrated in all new and old constructions including
manufacturing units, warehouses and office complexes.

In addition, your Company is spearheading the
implementation of Alliance for Water Stewardship
(AWS) Standard which is a credible, globally recognised
framework for ensuring sustainable water management
within the wider water catchment context. The Kovai unit
of your Company is the first site in India and the first paper
mill in the world to achieve the highest Platinum rating
under the 'Alliance for Water Stewardship Standards'.
During the year, two of your Company's units received the
AWS Platinum level certification. Till date, nine units of
your Company have achieved Platinum level certification
under the AWS Standard. Your Company is in the process
of implementing the AWS Standard at other units in high
water stress areas and will progressively obtain AWS
certification for these sites.

Your Company continues to pursue a low carbon growth
strategy through extensive decarbonisation programmes
across its value chains whilst also developing adaptation
plans across its sites. Your Company is the only
enterprise in the world of comparable dimensions to
have achieved and sustained the three key global
indices of environmental sustainability of being

'water positive' (for 23 years), 'carbon positive' (for 20 years),
and 'solid waste recycling positive' (for 18 years). With its
bold Sustainability 2.0 agenda, your Company is setting
the bar even higher and remains committed to making
a meaningful contribution across all the three sectors
of the economy - Agri, Manufacturing and Services.
Further details on this subject are available in the
Sustainability 2.0 section of this Report.

FINANCIAL PERFORMANCE

Your Company delivered a resilient performance during
the year amidst a challenging macroeconomic and
operating environment.

-    The FMCG-Others Segment delivered a resilient
performance amidst weak demand conditions and
heightened competitive intensity. Further, the impact
of sharp escalation in key input costs, viz. edible oil,
maida, potato, cocoa, packaging inputs especially
in the second half of the year, exerted pressure on
margins, which was partially offset through focused
cost management interventions, judicious pricing
actions and premiumisation. Competitive marketing
and trade investments were sustained during the year
despite heightened inflationary pressures towards
supporting growth and market standing.

-    In the FMCG-Cigarettes Segment, strategic
portfolio/market interventions continued to be made,
with focus on competitive belts and to counter illicit trade,
to drive volume-led growth and reinforce market
standing. Differentiated and premium offerings continue
to perform well. Severe cost escalation in leaf tobacco
was partially mitigated through mix enrichment.

-    The Agri Business Segment delivered robust
performance during the year. The value-added
agri portfolio recorded strong growth driven by scale up
of exports of spices and coffee. While operations
remained constrained due to continuation of trading
restrictions on certain agri-commodities, the Business

demonstrated execution agility in leveraging
opportunities in rice exports in the second half of the
year when restrictions were eased. Strong customer
relationships and focus on new business development
aided strong growth in leaf tobacco exports. Superior
grade/crop mix and strategic cost management
initiatives enabled expansion in margins, despite
steep escalation in green leaf tobacco costs.

- The Paperboards, Paper & Packaging Segment
continued to witness a challenging operating
environment, with low-priced Chinese and
Indonesian supplies in global markets including India,
soft domestic demand conditions, leading to subdued
realisations. Segment margins were impacted by the
unprecedented surge in wood costs. The Business
continued to sharpen focus on portfolio augmentation,
export customer/market development and structural
cost management to mitigate near term challenges,
while enhancing resilience for the future. The Packaging
and Printing Business continues to be acknowledged
as a 'first choice packaging partner' by several reputed
FMCG companies in the country for providing superior
and cost-effective packaging solutions. The Business
continues to aggressively pursue new business
development across various segments.

Continuing Operations: In FY 2024-25, Gross
Revenue and EBITDA stood at ' 73464.55 crores and
' 24024.83 crores respectively. Profit Before Exceptional
items and Tax at ' 26000.86 crores, grew by 1.4%
over previous year. Profit After Tax grew by 0.9% to
' 20091.85 crores (previous year ' 19910.23 crores).
Earnings Per Share for the year stood at ' 16.07
(previous year ' 15.98).

Discontinued Operations: Pursuant to the Scheme of
Arrangement ('the Scheme') amongst your Company
and ITC Hotels Limited ('ITCHL') and their respective
shareholders and creditors for demerger of the
Hotels Business of your Company into ITCHL,

which became effective from 1st January 2025,
the Hotels Business (along with all assets and liabilities
thereof, excluding ITC Grand Central, Mumbai) and the
investments held by your Company in Hospitality entities ³,
have been transferred to ITCHL on a going concern basis.
Accordingly, the operations of the Hotels Business of
your Company (excluding ITC Grand Central, Mumbai)
have been classified as 'Discontinued Operations' for the
year ended 31st March, 2025.

- The Hotels Business posted its highest ever Revenue
and operating profits on the back of strong growth
in RevPar, for the 9 months ended 31st December
2024. The Profit Before Exceptional items and Tax
for the 9 months ended 31st December 2024 stood at
' 572.52 crores (' 445.04 crores for the same period
in previous year; ' 691.22 crores for FY 2023-24).
Profit After Tax from Discontinued operations for
FY 2024-25 stood at '    15103.76 crores

(previous year ' 511.74 crores), including an
exceptional gain on demerger of ' 15163.06 crores
(FY 2023-24 - ' 7.57 crores). Refer Note 29(x) to the
financial statements.

Overall Profit After Tax for FY 2024-25 (including Profit
from Discontinued Operations) stood at ' 35195.61 crores
(previous year ' 20421.97 crores). Total Comprehensive
Income for the year stood at ' 34266.23 crores (previous
year ' 22703.03 crores).

The Directors of your Company are pleased to recommend
a Final Dividend of ' 7.85 per share for the financial
year ended 31st March, 2025. Together with the Interim
Dividend of ' 6.50 per share paid on 7th March 2025, the
total Dividend for the financial year ended 31st March, 2025
amounts to ' 14.35 per share (previous year Dividend
of ' 13.75 per share). Total cash outflow on account of
Dividend (including Interim Dividend of ' 8133.11 crores
paid in March 2025) will be ' 17956.69 crores.

VALUE-ADDED AND CONTRIBUTION TO EXCHEQUER

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
' 315000 crores, of which over ' 211000 crores accrued
to the Exchequer.

Including the share of dividends paid and retained
earnings attributable to government owned institutions,
your Company's contribution to the Central and State
Governments represented appx. 75% of its Value-Added
during the year.

Your Company has, over the years, consistently ranked
amongst the Top 3 Indian corporates in the private sector
in terms of Contribution to Exchequer.

FOREIGN EXCHANGE EARNINGS

Your Company continues to view foreign exchange
earnings as a priority. All Businesses in your Company's
portfolio are mandated to engage with overseas markets
with a view to testing and demonstrating international
competitiveness and seeking profitable opportunities for
growth. Foreign exchange earnings of the ITC Group over
the last ten years aggregated nearly US$ 9.5 billion, of
which agri exports constituted appx. 60%. Earnings from
agri exports, which effectively link small farmers with
international markets, are an indicator of your Company's
contribution to the rural economy.

During FY 2024-25, your Company and its subsidiaries
earned ' 10445 crores in foreign exchange. The direct
foreign exchange earned by your Company amounted
to ' 7708 crores, mainly on account of exports of
agri-commodities. Your Company’s expenditure in
foreign currency amounted to ' 3426 crores, comprising
purchase of raw materials, spares and other expenses
of ' 3280 crores and import of capital goods of
' 147 crores.

Your Company's leadership position in the cigarette
industry continues to be driven by its unwavering focus on
nurturing a future-ready portfolio of world-class products
anchored on its integrated seed to smoke value chain,
superior consumer insights, robust innovation pipeline
and world-class product development capabilities.
The Business continues to make strategic portfolio and
market interventions, with focus on competitive belts
and to counter illicit trade, to drive growth and reinforce
market standing. Differentiated variants and premium
segment continue to perform well leveraging mainstream
trademarks & innovation. These interventions, coupled
with the recent stability in taxes enabling some claw back
of volumes from illicit trade, resulted in volume led growth
during the year.

A punitive and discriminatory taxation / regulatory regime
over the years has led to significant operating challenges
for the legal cigarette industry in the country. The recent
stability in taxes coupled with deterrent action on illegal
and contraband cigarettes, has helped the legal industry
in partially recovering its lost volumes, leading to higher
demand for Indian tobaccos and bolstering revenue to the
exchequer from the tobacco sector.

Your Company continues to counter illicit trade and
reinforce market standing by fortifying the product portfolio
through innovation, democratising premiumisation across
segments and enhancing product availability backed by
superior on-ground execution. The recent amendment to
the Central Goods and Services Tax Act, 2017, to include
an enabling provision for implementing 'Track and Trace'
mechanism, is also expected to strengthen the efforts
of enforcement agencies towards controlling illicit
cigarette trade.

The year continued to witness steep increase in the
prices of leaf tobacco, which was partly mitigated through
a combination of product mix enrichment, strategic cost
management and judicious pricing actions. During the
current crop year, global supply chains are normalising,
leading to moderation in leaf tobacco prices after a sharp
increase over the last couple of years.

The Business also strengthened its presence in focus
markets with the launch of several differentiated offerings
across segments leveraging its institutional strengths,
demonstrating agility in responding to evolving market
dynamics. Several innovative variants have been
introduced recently under the 'Classic', 'Gold Flake',
'American Club' and 'Flake' trademarks amongst others.

Your Company has further strengthened its direct reach in
target markets across trade channels and also augmented
the stockist network to service rural and semi-urban
markets efficiently. Your Company's investments towards
building a differentiated portfolio coupled with agile and
last mile focused micro market execution capabilities
augur well for the future.

Globally, cigarettes constitute the dominant form of
tobacco use. In the Indian context, tobacco use comprises
a diverse range of chewing and smoking formats that are
available at multiple price points consequent to punitive
and discriminatory taxation on cigarettes. While India
is the world's second largest consumer of tobacco,
legal cigarettes constitute only 10% of overall tobacco
consumption in India, as against a global average of 90%.
It is pertinent to note that India accounts for less than 2%
of global cigarette consumption despite having 18% of the
world's population - making India's per capita cigarette
consumption amongst the lowest in the world.

Over the years, high and discriminatory taxes on
Cigarettes, while aimed at reducing consumption, have
had unintended consequences of fuelling the growth of
smuggled and domestically manufactured tax-evaded
cigarettes, causing a shift to other lightly taxed/tax-evaded
forms of tobacco products, comprising illicit cigarettes, bidi,
chewing tobacco, gutkha, zarda, snuff, etc. Consequently,
while the share of legal cigarettes in total tobacco
consumption has declined from 21% in 1981-82 to a
mere 10%, aggregate tobacco consumption in the country
has increased over the same period. Despite accounting
for 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.

Taxes on cigarettes in India remain one of the highest in
the world as depicted in the chart:

Taxes on cigarettes in India are multiple times higher than
in developed countries viz. 14x of USA, 7x of Japan, 6x of
Germany and so on. Further, the same is also substantially
higher than that in neighbouring countries.

It may also be noted that India's per capita cigarette
consumption is amongst the lowest in the world and is
significantly lower compared to that of China, Japan, USA,
UK and even neighbouring countries such as Bangladesh
and Pakistan.

Historically, steep increases in taxation have adversely
impacted tax collections and legal cigarette volumes, while
a stable tax regime has led to buoyancy in tax collections
as evidenced in the table below:

Punitive taxes on the legal cigarette industry in earlier
years have resulted in rapid growth of illicit cigarette
trade - making India the 4th largest illicit cigarette market
globally according to Euromonitor estimates. Over the
years, this has created attractive tax arbitrage opportunities
for unscrupulous players indulging in illicit cigarette trade
accounting for about 1/3rd of the legal industry.

During the year, there were extensive media reports
on the multitude of cases of evasion of taxes/duties
by dealers in illicit cigarettes which were unearthed by
raids conducted by Directorate of Revenue Intelligence
(DRI) and other enforcement agencies. ‘Illicit markets:
A Threat to Our National Interests’, a study published
by FICCI-TARI in September 2022, noted that
“The consumption of illegal cigarettes in India has
increased, signalling a shift from legal products to cheaper
substitutes or illicit products, which have no or little tax
element in them. When taxes are raised beyond a certain
optimum level, consumers gravitate towards cheaper
alternatives orillicitsupplies, which are normally smuggled
or tax evaded goods”. It is estimated that illicit trade
causes an annual revenue loss of appx. ' 21000 crores
to the Exchequer. With respect to other tobacco
products as well, the revenue losses are significant since

about 68% ⁴ of the total tobacco consumed in the country
remains outside the tax net.

The Directorate of Revenue Intelligence (DRI), in its
report “Smuggling in India 2023-24” acknowledges the
high incidence of taxes in India providing opportunities
for illicit trade of cigarettes. The report states: “Cigarette
smuggling in India has become a growing concern, posing
serious challenges to the public health, the economy, and
law enforcement. With high domestic taxes and import
duties on tobacco products, intended to curb tobacco
consumption and safeguard public health, smuggling
has become a profitable venture of criminal networks.
The illegal trade in cigarette not only undermines
government policies aimed at reducing tobacco use but
also results in significant revenue loss”.

Tobacco control measures in India have ranked amongst
the most stringent in the world from the time of enactment
of the Cigarettes (Regulation of Production, Supply and
Distribution) Act, 1975, to the present. India is also one of
the few countries where tobacco products are regulated
across the value chain - from their manufacture to sale to
consumers. The Cigarettes and Other Tobacco Products
(Prohibition of Advertisement and Regulation of Trade
and Commerce, Production, Supply and Distribution) Act,
2003 (COTPA) requires cigarette packages to display
the statutorily mandated pictorial and textual warnings
covering 85% of the surface area of the packet - one of
the largest in the world.

It is pertinent to note that smuggled international brands
of cigarettes do not bear any of the pictorial or textual
warnings mandated by Indian laws or, bear much smaller
pictorial/textual warnings as per the tobacco laws of the
countries from where these cigarettes originate. As reported
in prior years, findings from research conducted by
IMRB International, an independent market research
organisation, show that the lack of pictorial warnings on

⁴ Report on the impact of current tax framework on the tobacco sector in India
and suggestions for its improvement - 2014, by ASSOCHAM and KPMG.

packets of smuggled international brands of cigarettes
or their diminutive size creates a perception in the
consumers' mind that these illicit cigarettes are 'safer' than
domestic duty-paid cigarettes that carry the 85% pictorial
warnings. The combination of low prices to consumers
due to tax evasion and the misleading perception created
by the absence of statutory pictorial warnings provides
significant buoyancy to illicit cigarette volumes.

India is among the top three tobacco growing countries
in the world. Tobacco plays a significant role in the Indian
economy on account of its considerable contribution to the
agricultural, industrial and export sectors ⁵ Illicit cigarette
trade also has a deleterious impact on farmers and farm
workers engaged in the tobacco value chain.

It may be noted that several major tobacco producing
countries, including the USA, have established regulatory
frameworks taking into consideration the economic
interests of their tobacco farmers. The punitive and
discriminatory taxation & regulatory regime on cigarettes
in India over the years, has adversely affected the
livelihood of Indian tobacco farmers with corresponding
gains to those countries that have opted for moderate
and equitable tobacco regulations. These developments
coupled with lower export incentives in India and relative
weakness of currencies in certain competing geographies
have, in the past, had a debilitating impact on millions of
livelihoods, dependent on the tobacco value chain in India.
However, recent stability in taxes on cigarettes backed by
deterrent actions of enforcement agencies has enabled
the legal cigarette industry to partially combat illicit trade
and claw back volumes, thereby improving demand for
Indian tobaccos.

As reported in earlier years, your Company and several
other stakeholders had challenged the validity of the
pictorial and textual warning covering 85% of the
surface area of the packet prescribed under COTPA.

The Honourable Karnataka High Court, by its judgement
in December, 2017, held the 85% pictorial warnings to
be factually incorrect and unconstitutional. Upon Special
Leave Petitions filed by the Government and others, the
Honourable Supreme Court has stayed the judgment
of the High Court. The cases are pending before the
Honourable Supreme Court.

The extremely stringent regulations along with the
discriminatory and steep taxation on cigarettes have had
numerous negative, albeit unintended repercussions.
These include:

-    rapid growth in illicit cigarette volumes, which resulted
in sub-optimisation of the revenue potential of the
tobacco sector and significant loss to the Exchequer.
It is estimated that on account of illicit cigarettes alone,
revenue loss to the Government is appx. ' 21000 crores
per annum.

-    widespread availability of illicit cigarettes and other
tobacco products of dubious quality and hygiene
to consumers at extremely affordable prices. As a
result, despite accounting for 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.

-    a large component of tobacco consumption in the
country, aggregating around 68%, remaining outside
the tax net.

-    persistent negative impact on the livelihood of tobacco
farmers and others dependent on tobacco. Studies
by the Central Tobacco Research Institute (CTRI)
indicate that on account of agro-climatic conditions,
there is no equally remunerative alternate crop that
can be grown in the FCV tobacco growing regions of
the country.

Your Company continues to engage with policy makers for
a framework of pragmatic, equitable, non-discriminatory,
evidence-based regulations and taxation policies that
balance the economic imperatives of the country and

tobacco control objectives, cognising for the unique tobacco
consumption pattern in India. Stability in taxes is critical to
address the interests of all stakeholders of this industry,
including tobacco farmers, consumers and the Exchequer.

Manufacturing facilities of the Business continue to set
new benchmarks in the areas of quality, sustainability,
supply chain responsiveness and productivity, driven
through investments in new technology induction, digital
technologies, innovation, and ensuring product & process
excellence. Cutting-edge technologies in the areas of
Industry 4.0 and Data Sciences are being leveraged to
build a smart manufacturing environment of connected
systems. These initiatives, coupled with innovative
capabilities, in-house design and development expertise,
have further improved the speed-to-market for launch of
new and differentiated offers of the Business.

It is extremely satisfying to report that your Company
continues to be recognised for its operational excellence.
The Bengaluru, Pune and Munger units won the
'Apex Prize for Operational Excellence' at the Integrated
Manufacturing Excellence Initiative (IMExI) Awards
organised by Kaizen Hansei Institute, a wing of
Kaizen Institute of India.

In line with your Company's commitment to the
'Triple Bottom Line' philosophy, the Business continued to
focus its efforts for resource conservation and adoption of
best-in-class technologies and processes. Sustainability
initiatives of the Business continue to receive industry
recognition, with the Kidderpore unit receiving the
'National Energy Leader Award' at the CII National Award
for Excellence in Energy Management, and the Munger
Unit being awarded the 'Winner' Award under the Best
Energy Efficient Organisation (Large Sector) at the
CII National Energy Efficiency Circle Competition.
The 21 MW wind farm in Karnataka received the
'Best Performing Wind Farm Award' from Indian Wind
Power Association in its geographical zone. Additionally,
the Pune unit secured the coveted 'Sarvashreshtha
Suraksha Puraskar' awarded by National Safety Council
of India demonstrating its commitment to safety.

As a testimony to the success of digital initiatives on
HR practices, the Business was honoured with the
prestigious CII National HR Award for Excellence in
Digital Practices.

Your Company remains well positioned to fortify its
market standing in the legal cigarette industry, leveraging
its superior strategies, integrated seed to smoke value
chain, future-ready portfolio, robust innovation pipeline,
cutting-edge manufacturing & digital technologies
and best-in-class execution capabilities. A stable and
equitable taxation & regulatory regime remains critical to
enable the legal cigarette industry to claw back volumes
from illicit trade, as also borne out by recent experience.

FMCG - OTHERS

The FMCG - Others Segment delivered a resilient
performance amidst subdued demand conditions
and significant increase in competitive intensity from
local/regional players. Costs of several major inputs
such as edible oil, wheat, maida, potato and cocoa
witnessed sharp escalation, especially in the second half
of the financial year, weighing on margins. The inflationary
pressures were partially mitigated through focused cost
management, portfolio premiumisation, supply chain
agility, digital interventions and calibrated pricing actions.
Trade and marketing investments were sustained at
competitive levels during the year towards supporting
growth and market standing. Additionally, the Notebooks
portfolio was impacted by sharp deflation in paper
prices on account of cheap imports of paper, leading to
heightened competitive intensity with opportunistic play by
local/regional brands.

Your Company's FMCG Businesses recorded
Segment Revenue of ' 21981.57 crores (previous year
' 20966.83 crores), with Segment EBITDA at
' 2163.92 crores (previous year ' 2338.50 crores).

A consumer-centric approach, driven by purpose-led
brands, a future-ready portfolio including value-added
adjacencies and agility in execution backed by smart

omni-channel capability and excellence in supply chain,
remains at the core of your Company's strategy to rapidly
scale-up the FMCG Businesses.

Across your Company's FMCG Businesses, the power
of digital is being leveraged to drive superior consumer
insights & innovation, deepen consumer engagement and
enhance brand loyalty. Strategic interventions continue to
be made towards delivering delightful brand experiences
seamlessly using an 'Always On' approach across
touchpoints through personalised journeys mapped to
individual needs, preferences and context.

Your Company continues to leverage deep consumer
insights and cutting-edge R&D capabilities to address
present and emergent consumer need spaces. Over
100 new products anchored on the vectors of Health &
Nutrition, Hygiene, Protection & Care, Convenience &
On-the-Go, Indulgence etc., were launched across target
markets during the year, leveraging the R&D platforms of
your Company's Life Sciences and Technology Centre
(LSTC) and agile product development teams across
Businesses.

Cutting-edge digital technologies including Industry 4.0,
Advanced Analytics, Big Data and industrial Internet of
Things (loT) continue to be deployed towards strengthening
your Company's real time operations and execution
platform, enhancing productivity, driving efficiency and
cost agility. These initiatives are anchored on the key
pillars of synchronised planning and forecasting, agile,
resilient & efficient supply chain, smart buying & value
engineering, smart manufacturing and smart demand
capture & fulfilment. Strategic investments have been
stepped up to build platforms of insights by harmonising
and integrating large and isolated datasets powered
by AI/ML technologies and 'human-centred design' &
visualisation tools.

The FMCG Businesses comprising Branded Packaged
Foods, Personal Care Products, Education and Stationery
Products, Incense Sticks (Agarbattis) and Safety Matches

have grown at an impressive pace over the past
several years.

Your Company's vibrant portfolio of over 25 world-class
Indian brands, largely built through an organic growth
strategy leveraging institutional synergies in a relatively
short period of time, represents an annual consumer
spend of over ' 34000 crores and reach over 260 million
households in India. These home-grown, purpose-led
Indian brands, powered by agile innovation, support the
competitiveness of domestic value chains, especially in
the agri space, thereby ensuring creation and retention of
value within the country.

Your Company's FMCG brands have achieved impressive
market standing⁶ in a relatively short span of time in their
respective categories viz. Aashirvaad is No. 1 in Branded Atta,
Bingo! is No. 1 in the Bridges segment of Snack Foods,
Sunfeast is No. 1 in the Cream Biscuits segment,
Classmate is No. 1 in Notebooks, YiPPee! is No. 2 in
Noodles and Mangaldeep is No. 2 in Incense Sticks.

Your Company remains focused on rapidly scaling up the
FMCG Businesses anchored on strong growth platforms
and a future-ready portfolio. It is pertinent to note that the

chosen categories, which are largely characterised by
low household penetration levels and/or low per capita
consumption, offer significant headroom for long-term
growth. This is borne out by several reports which
highlight that your Company's total addressable market
expansion potential is amongst the highest in the Indian
FMCG space. In this context, it is noteworthy that a key
element of your Company's growth strategy is to foray
into value-added adjacencies and categories of the future
by leveraging the 25+ powerful mother brands it has
established over the years. Recent examples of such brand
extensions include Aashirvaad to Dairy, Ready-to-Eat,
Vermicelli, Rava, Besan, Indian breads, Salt and Spices;
Sunfeast to Dairy Beverages and Cakes; Bingo!
to Namkeens; ITC Master Chef to Frozen Snacks and
Cooking pastes; Classmate to Writing instruments;
Savlon to Sanitisers, Wipes and Disinfectant sprays
etc. Simultaneously, the FMCG Businesses continue to
make strategic investments in building categories of the
future and establishing your Company's 'right to win'
by progressively scaling up nascent categories where
beachheads have been created. In line with the
ITC Next Strategy of building a future-ready portfolio,
accelerating growth and enhancing competitiveness,
several value accretive acquisitions were announced
during the year viz. M/s. Sresta Natural Bioproducts
(24 Mantra Organic Foods), Mother Sparsh Baby Care
(Mother Sparsh) and Ample Foods (Prasuma & Meatigo).
These interventions are expected to augment your
Company's presence and market standing in high-growth
and future-facing businesses.

The FMCG Businesses continue to expand their export
footprint leveraging the equity of their world-class brands -
with a reach now spanning over 70 countries. Your Company
is also exploring strategic opportunities in proximal
markets as a potential vector of growth going forward.

The FMCG Businesses continue to create structural
competitive advantages and enhance profitability by
leveraging world-class distributed manufacturing and
logistics infrastructure, multi-channel distribution network

and newer routes to market, smart buying & value
engineering and smart manufacturing. Investments over
the years in several state-of-the-art Integrated Consumer
Goods Manufacturing and Logistics facilities (ICMLs) have
laid a strong foundation to drive structural advantages
such as economies of scale and scope, ensuring product
freshness, enhancing agility and responsiveness of
the supply chain, reducing cost of servicing proximal
markets through lower distance-to-market, etc. Capacity
utilisation at the 11 operational ICMLs continues 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. With growing scale, supply chain operations are
being increasingly delayered through direct-to-market
shipments, thereby reducing freight costs and eliminating
multiple handling. Your Company is confident that these
strategic interventions which are already delivering
substantial benefits will realise their full potential over the
medium term and continue to create long-term value.

Your Company continues to counter the impact of
inflationary headwinds through proactive measures across
all nodes of operations and deliver competitively superior
performance leveraging its institutional strengths and
harnessing advantages of scale, smart buying initiatives
and world-class talent in a consumer-centric, agile and
innovative manner.

Notwithstanding the short-term challenges, the
structural drivers of long-term growth such as rising
disposable incomes and consumer awareness, low
levels of penetration of consumer goods, favourable
demographics, increasing urbanisation and growing
preference for trusted brands remain firmly in place. Your
Company remains confident of rapidly scaling up its FMCG
Businesses on the back of a strong future-ready portfolio
powered by purpose-led brands, world-class quality, deep
consumer insights, cutting-edge innovation and an agile,
resilient and efficient supply chain. Your Company's
institutional strengths - strong backward linkages with the

Agri Business, deep and wide multi-channel distribution
network, cuisine knowledge resident in ITC Hotels Limited
(a group entity), industry-leading packaging knowhow and
access to robust R&D platforms nurtured by LSTC - will
continue to be leveraged to serve as unique sources of
competitive advantage for the FMCG Businesses.

Branded Packaged Foods

The Branded Packaged Foods industry witnessed severe
headwinds during the year due to subdued consumer
demand and unprecedented inflationary pressure
across several key inputs viz. edible oil, wheat, maida,
potato, cocoa, packaging inputs etc. In this backdrop,
your Company sustained its position as one of India's
largest and fastest growing branded packaged foods
businesses, leveraging a robust portfolio of brands,
a slew of first-to-market products, regionally curated
offerings, supported by an efficient supply chain and
distribution network.

The Branded Packaged Foods Businesses remain
focused on addressing emerging consumer preferences
through innovations anchored on the vectors of health,
nutrition, wellness, immunity, naturals, indulgence and
convenience. Several innovative and first-to-market
products were launched during the year, leveraging
your Company's institutional strengths including superior
consumer insights, innovation capabilities of the
Life Sciences and Technology Centre (LSTC) and cuisine
expertise resident in ITC Hotels Limited, a group entity.
While fortifying core portfolio, the Businesses continued to
scale-up presence in value-added adjacencies leveraging
powerful mother brands and invest in categories of
the future.

Relentless focus on delivering superior quality products
to consumers continues to be a key source of sustainable
competitive advantage for the Branded Packaged Foods
Businesses. In this context, 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 level of
quality, consistency and safety in its products. In addition,

each of your Company's branded packaged food products
is manufactured in HACCP/ISO-certified manufacturing
locations ensuring compliance with all applicable laws and
adherence to the highest quality norms.

- In the Staples Business, 'Aashirvaad' delivered robust
growth on an elevated base, consolidating its market
leadership position. The value-added Atta portfolio,
consisting of Multigrain, Select and Sugar Release
Control Atta posted healthy growth driven by superior
value proposition. Millet products ('Atta with Millets',
'Gluten Free Flour', 'Ragi Flour'), Organic portfolio
('Organic Atta' and 'Organic Dals'), 'Aashirvaad
Vermicelli', 'Aashirvaad Rava' (Suji Rava, Bansi Rava,
Samba Rava) and 'Ready to Cook Chapati' continued
to witness strong growth. 'Aashirvaad Besan',
with the unique proposition of smooth & lump-free
batter, was extended to more markets and continues
to scale up rapidly. With the objective of catering to
regional preferences, a differentiated range of Atta
was launched in Mumbai ('Premium MP Sehori',
'MP Sehori', 'MP Lokwan' and 'Khapli' variants).
The Vermicelli range was expanded with the
launch of 'Roasted Short Vermicelli' in Tamil Nadu.
'Aashirvaad Soya Chunks', with the proposition of
'Juicy and Tasty' as the differentiator was launched
and has seen positive consumer response. With
superior product development, purposeful marketing
inputs, consumer activations and region-specific
interventions supported by manufacturing excellence
and sharply targeted media investments, especially
across digital platforms, your Company is confident
of further fortifying Aashirvaad's position as a
preferred 'centre-of-plate' choice amongst Indian
households, catering to all future-ready 'staple' needs
of consumers.

'Aashirvaad Salt' continued to post robust growth
in focus markets during the year, supported by its
distinctive positioning of “Iodine Assured salt for a
Smarter India”.

In the Spices category, your Company continued to
deliver strong growth with its endeavour to provide

consumers unique and personalised experiences
that meet their taste preferences and reflect regional
flavours and ethos. During the year, the Business
grew on the back of distribution expansion in focus
states, sharp region-specific communication, and
an enhanced portfolio with innovative new offerings.
The 'Sunrise' brand strengthened its market
leadership position in the core market of West Bengal
and made significant gains in newer launch markets of
the Northeast region and Bihar. The brand continued
to delight consumers by introducing unique and
differentiated products catering to regional tastes and
preferences, such as 'Sunrise Soya Curry Masala',
'Sunrise Chinese Fried Rice Masala', 'Sunrise
Schezwan Masala' and augmenting the portfolio with
novel products such as 'Sunrise Peri Peri Masala' &
'Sunrise Restaurant Magic Masala' for new age
consumers. 'Aashirvaad Spices' continues to enhance
its presence in new gen channels and core markets
to enable a full portfolio play along with expansion
of the blended portfolio. The brand's range of whole
spices, launched in the previous year, also witnessed
rapid scale-up across online platforms. Aashirvaad
has appointed Natural Star Nani as the brand
ambassador to strengthen the brand's alignment with
cultural values such as the appreciation for cinema,
culinary traditions, and a profound connection to the
region's unique customs and beliefs.

On April 17, 2025, your Company signed a Share
Purchase Agreement to acquire 100% of the share
capital of Sresta Natural Bioproducts Private Limited
('SNBPL'), an Indian company primarily engaged
in the business of manufacture and sale of
organic packaged food products under the
'24 Mantra Organic' brand in the domestic as well as
in international markets. SNBPL's portfolio comprises
a wide range of 100+ organic products spanning
branded grocery staples, spices and condiments,
edible oils, beverages, etc. SNBPL has a strong
international presence with a deep connect with

the Indian diaspora. SNBPL's vertically integrated
supply chain promotes sustainable livelihoods for
its network of appx. 27,500 farmers spread across
appx. 1.4 lakh acres of certified organic land in
10 states. The strong network of farmers and
certified organic sourcing capability are key sources
of competitive advantage for the company. The
acquisition reinforces your Company's commitment
to build a portfolio of future-facing winning brands that
addresses the evolving needs of Indian consumers
and will unlock value creation opportunities by
leveraging your Company's institutional strengths to
drive synergies in areas such as product development
& innovations, sourcing, manufacturing, supply chain
and distribution.

- The Biscuits category witnessed resilient performance
amidst a challenging operating environment. The
Business continues to strengthen its core portfolio with
investments behind powerful brand ideas, superior
products, cultural marketing with local insights and
unique innovations to drive growth. The 'Sunfeast Dark
Fantasy' range of differentiated cookies sustained its
leadership position in the premium segment. 'Mom's
Magic' range of cookies witnessed healthy growth
during the year. The 'Bounce' range of cream biscuits
was augmented with scale up of 'Bounce Day & night'
- a delicious dark choco biscuit with soft vanilla cream.
'Sunfeast Supermilk' biscuit harnessing the goodness
of 'Naatu Maatu Paal' continued to be scaled up in
target markets. The portfolio mix was further enriched
with the launch of 'Sunfeast Wowzers', a 14-layered
cracker enrobed with cream (currently available
in Cheese and Lemon variants) and 'Evening
Marie' - a differentiated Marie with a savoury twist,
in select markets. The Business also introduced a
portfolio of Super Premium Cookies under
'Sunfeast Baked Creations' with globally sourced
ingredients to leverage the advent of emerging niche
spaces in the Quick-commerce channel.

Towards further deepening consumer engagement,
the brand launched several meaningful and

clutter-breaking campaigns during the year.
The Dark Fantasy brand, synonymous with
turning everyday moments into extraordinary
experiences, launched its 'Big Fantasies' campaign
leveraging cutting edge technology to deliver
fantastical experiences to consumers on ground.
Mom's Magic further strengthened its core philosophy
of 'Iss Dil Ke Aage Sabki Har Hain' with the launch
of the 'Will of Change' digital campaign which puts
a spotlight on the deep-seated societal bias that
denies daughters their inheritance rights and
advocates a shift towards equality, with mothers as
the pillars of change.

'Bingo!' Snacks delivered resilient performance during
the year and strengthened its product portfolio with
the launch of exciting variants of snacks/namkeens.
During the year, Bingo! forayed into the Popped Chips
segment with the launch of three exciting
variants - 'Sour Cream & Herbs', 'Salt n Pepper' and
'Indian Spice Mix', with 30% less fat proposition for
consumers indulging in mindful snacking. Leveraging
the 'Hot & Spicy/Korean' trend, the Bingo! Snacks
portfolio was augmented with a slew of differentiated
offerings straddling across product categories
including 'Bingo! Tedhe Medhe Xtraa Teekha',
'Bingo! Mad Angles Red Alert' and 'Bingo! Nachos
Korean Flavour'. Other launches during the year
include an innovative Pink Salt flavoured
'Bingo! Original Style Pink Salt Chips' and Millet based
offering under 'Bingo! Tedhe Medhe Pudina Twist'.
Having forayed into traditional snacks through
Bingo! Tedhe Medhe Namkeens in the recent past,
the Business continues to register robust growth in
the segment. Bingo! remains the market leader in
the Bridges segment across the country, and in the
potato chips segment in South India. With a view to
reinforce its leadership position and build consumer
engagement, 'Bingo! Tedhe Medhe' launched an

exciting on-pack consumer offer with attractive prizes;
the campaign was well received with over 13 million
entries.

YiPPee! sustained its position as a strong No. 2 brand
in the Instant Noodles segment amidst heightened
competitive intensity. The Business continued to
strengthen its portfolio through a combination of
product laddering across multiple price points, wider
assortment to cater to diverse consumer cohorts
and scale up of differentiated offerings. The portfolio
was further augmented with the launch of 2 exciting
flavours in the Korean Noodles segment. Further,
the brand also forayed into Pasta Masala segment in
2 flavours - Masala and Cheese. The brand refreshed
its communication outreach with popular Indian
cricketers Jasprit Bumrah, Surya Kumar Yadav
and Rahul Dravid as celebrity brand endorsers.
Investments in several high decibel campaigns were
stepped up to connect with regional culture codes
to generate positive consumer buzz and increase
visibility across focus markets such as South region,
UP, MP, Bihar and Odisha.

The Frozen Foods Business operating under Brands
'ITC Master Chef', 'Farmland' and 'Aashirvaad'
continued to grow at an accelerated pace, powered
by a range of delicious and innovative products
catering to 'any time' snacking and meal occasions.
The launch of no-onion-no-garlic 'ITC Master Chef
Sabudana Tikki' made from 'sendha namak', suitable
for fasting occasions and innovative products like
Chicken Kievs has helped to further strengthen the
product portfolio in Retail and Food Service channels.
The Business directly distributes to over 200+ towns
leveraging emerging and traditional channels and
smart digital marketing to expand consumer franchise.
The frozen portfolio now comprises of over 80+ Indian
and Western Snacks, Parathas, Naans, Prawns and
Vegetables.

During the year, your Company signed Definitive
Agreements for acquisition of 100% of the share
capital of Ample Foods Private Limited (AFPL) in one
or more tranches. AFPL's flagship brand, 'Prasuma',
is a leading player in the frozen, chilled and ready to
cook foods space in India and is a specialist in oriental
cuisine (viz. momos, baos, Korean fried chicken),
high-quality delicatessens and raw meats, etc.,
sells a wide assortment of 170+ products, backed
by unparalleled innovation expertise in developing
'Good-for-You' products. This acquisition will further
fortify your Company's presence in these
future-facing categories, with current annual market
size of over ' 10000 crores and poised for rapid
growth in the years ahead.

-    On April 4, 2025, your Company completed the first
tranche of acquisition in AFPL to the extent of 43.75%
of the shareholding of the company, in line with the
Definitive Agreements.

-    'Aashirvaad Svasti' - fresh dairy portfolio continued
its strong growth momentum during the year, led by
strengthening its premium milk variant 'Select' and
driving significant growth in value-added products
(Curd, Lassi, Mishti Doi & Ghee) through superior &
differentiated offerings. The fresh dairy portfolio is
currently available across Bihar, West Bengal &
Jharkhand markets and it continues to enhance market
penetration through rapid scale-up of its distribution
network. The Business rolled out a new premium
variant 'Shahi Lassi' under 'Aashirvaad' brand which
elicited excellent consumer response in the launch
markets. Ghee portfolio was further augmented with
the launch of a health-focused product proposition,
'Cow Ghee with 90% low cholesterol'.

-    The Beverages portfolio has been refreshed with
launch of innovative offerings to address the evolving
consumer needs. During the year, the Business
entered the Ethnic beverages segment, a growing
space, with the launch of region-specific offers around

product formats of badam milk, lassi and buttermilk
under the mother brand 'Aashirvaad'. The core
portfolio of Dark Fantasy milkshakes has been further
augmented with the launch of a new unique product
'Vanilla milkshake with white chocolate'.

-    The Confectionery Business continued to nurture
its range of premium portfolio by leveraging
'Fantastik Chocostick', 'Jelimals' and
'Candyman Fruitee Fun 3 in 1 chews'. The Business
strengthened its leadership in the wafer rolls
category with the launch of 'Sunfeast Dark Fantasy'
creme filled choco wafer rolls. The offerings have
received excellent consumer response while the
clutter-breaking communication has enabled strong
brand recall among target groups.

-    'Fabelle' chocolates continue to receive excellent
response from discerning consumers, setting new
benchmarks in the luxury and premium chocolate
segments. During the year, your Company opened
an exclusive Fabelle store at Bengaluru airport,
expanding the availability of the luxury range of
chocolates beyond the luxury boutiques at ITC Hotels
and Quick-Commerce channel. The 'Sunfeast Fantastik'
range of chocolates, comprising Choco Almond and
Fruit & Nut variants launched in the previous year, was
scaled up across markets after receiving excellent
feedback from consumers in launch markets. The
product range was further augmented during the year
with the launch of 'Sunfeast Fantastik! 4D', a unique
product offering four indulgent layers of crunchy
wafer, milk choco, soft caramel and nutty peanuts
in every bite. The product, endorsed by celebrities
Sreeleela & Siddhant Chaturvedi, has elicited strong
consumer traction.

-    Exports remain a key focus area for the Branded
Packaged Foods Businesses. In addition to
Aashirvaad Atta exports, which is already a clear
market leader across several markets, the Business
has been continuously sighting opportunities to

scale up exports of value added adjacencies.
The Business is also witnessing green shoots in
exports of other categories such as Biscuits, Noodles
and Snacks, leveraging the equity of its core brands
such as Aashirvaad, Sunfeast Dark Fantasy,
Sunfeast Moms Magic, Sunfeast YiPPee!, Bingo! and
Kitchens of India.

With the overarching vision to 'Help India Eat Better',
your Company's Nutrition strategy seeks to create a
sustainable ecosystem anchored on a portfolio of healthier,
affordable & accessible 'Better For You/Free From'
value-added products, supported by responsible policies
in line with national priorities on health and nutrition.
Your Company's institutional strengths, as aforestated, are
being leveraged to develop products providing consumers
wholesome and enjoyable food experiences.

In line with your Company's commitment to fostering
nutrition, health and wellness, the Business has launched
a range of nutrition dense products under the 'Right Shift'
brand to address the nutritional needs of consumers aged
over 40. The portfolio has been curated using natural and
proprietary ingredients developed at LSTC. Anchored
on the vectors of better digestion, strength and energy
building, your Company launched a range of products
such as 'Jaggery Ragi Cookies', 'Millet Oats Kheer mix',
'Millet Oats Upma mix' and 'Millet Chana Mixture' during
the year. The recent acquisition of 24 Mantra Organic
would also further augment the Business' portfolio of
nutrition-led healthy food products.

The Businesses continue to use a data driven
approach to make sharp targeted brand investments,
clutter-breaking communication and deepen consumer
engagements across all touch points, along with focused
market development efforts to reinforce market standing
across operating categories. Several campaigns
launched during the year received wide recognition
and won prestigious awards across leading platforms.
'Aashirvaad Atta' won Gold at Effie’s for its innovative
'Atta - Rap' campaign in the Food, Snacks & Desserts
category, and Bronze at E4M in the Regional Campaign

category. At the E4M IDMA Awards, the Bingo AI Meme
Gallery received a Silver for Best Use of User Generated
Content and Bronze for Leveraging Social Media to
Boost ROI and Engagement; 'Sunfeast Dark Fantasy'
won Silver for Best Digital Innovation with its 'Biting into a
Million Fantasies' campaign. 'Sunfeast YiPPee!' secured
a Bronze at Effie Awards for the 'Better World - Create Magic’
campaign, under Positive Change - Environmental
Brands category. At the E4M IMA South Awards,
ITC Mission Millets won Gold in Best Use of Integrated
Marketing - FMCG, Bingo Mad Angle Song won
Gold in Branded Content -    Food &    Beverages,

Bingo Meme Premier League won Silver in Occasion/Festive
Based or Seasonal    Marketing    - FMCG    along    with

Aashirvaad Masala    Karam    winning    Bronze    in

Best Use of TV - FMCG. From advancing nutritional
and sustainable food practices with the 'Mission Millets'
campaign to empowering farmers and consumers
alike, the Business    earned a    Gold SABRE in    the

Marketing to Consumer (New Product) category.

The year marked a major step in advancing the Business'
digital maturity journey. With the vision of having a
connected digital ecosystem, the Business has launched
Real Time Consumer Data Platform. With the objective of
consistently engaging with consumers, the Business is also
building 'always-on' brand experience digital platforms,
rooted in the respective brand philosophies. In this
context, the Business went live with www.letsboing.com
for the Bingo! portfolio - an always on comedy content and
experiences platform which takes the consumer through
a fun journey of value exchanges through a curated
selection of amusing local news, newsmakers, memes,
and horoscopes, all presented in the distinctive Bingo!
flavour. During the year, the Business also launched an
'all things food & recipe' content website - www.foodiesonly.in;
with an endeavour to become a go-to website for
recipes, tips & tricks, menu planners, masterclasses for
home-chefs etc. The platform has generated excellent
consumer traction and has been one of the largest and
fastest platforms in terms of garnering consumer traffic.

Over the years, your Company has made significant
investments in setting up state-of-the-art Integrated
Consumer Goods Manufacturing and Logistics facilities
(ICMLs) proximal to large demand centres. These facilities
are at the heart of your Company's strategy to create
structural advantage by enhancing product freshness,
elevating market agility, minimising the cost of servicing
proximal markets, enabling scalability, while also
setting new benchmarks in safety and product quality.
Your Company continues to leverage the benefits of the
state-of-the-art Ancillary Manufacturing cum Logistics
Facilities (AMLFs) at Pudukkottai, Kapurthala and Panchla.
These automated facilities are co-located with the ICMLs
and provide several structural advantages including
inventory optimisation, delayering operations and lowering
cost of market servicing.

11 ICMLs are operational in locations proximal to large
demand centres, enabling delivery of fresher products,
reduction in distance to market and delayering of
operations. The capacity utilisation at these ICMLs
continues to be ramped up while contributing to a
progressive increase in workforce diversity and inclusion
with each new investment. During the year, the Business
also commenced operations at the new confectionery
manufacturing facility at Jammu.

With its relentless focus on quality and manufacturing
excellence, your Company received over 100 prestigious
external awards & accolades in the areas of Safety,
Sustainability, Quality & Food Safety, Manufacturing
Excellence, Cost Competitiveness, Manufacturing &
Supply Chain and HR from prestigious institutions such
as the Confederation of Indian Industry (CII), Integrated
Manufacturing Excellence Initiative (IMexI), etc. These
accolades are testament to your Company's unwavering
commitment to providing products with the highest
levels of quality while reducing environmental impact of
the same.

To counter input cost volatility and support long-term
profitability, your Company has implemented several

strategic cost management initiatives in areas such
as supply chain optimisation, smart procurement and
productivity improvement through automation, leveraging
new-age technologies such as Industry 4.0, Artificial
Intelligence/Machine Learning, advanced visual analytics
and smart utilities. These measures are instrumental in
countering significant input cost volatility witnessed during
the year, as well as offsetting gestation costs of new
initiatives and strategic brand development investments
in emerging categories. Going forward, these strategic
initiatives will aid the Business in further enhancing its
competitive positioning in the industry.

The food processing industry has immense potential
to boost agriculture by improving market linkages,
resource efficiency and exports. The development of
the food processing sector is vital for addressing food
security, controlling inflation, improving nutrition, and
preventing wastage, thereby enhancing farmer incomes.
Acknowledging the large economic multiplier impact of
the food processing industry, and growth opportunities in
the Indian market, your Company has made substantial
investments in this sector and remains focused on
establishing itself as the leading player in the branded
packaged foods industry.

Your Company's strong farm linkages, procurement
efficiencies, world-class brands and deep & wide
multi-channel distribution network, with growing presence
in new gen channels such as e-Commerce, Modern
Trade, On-the-go and Institutional sales, continues to
deliver competitive advantage through superior product
availability, visibility and freshness. Recent investments
in establishing a world-class distributed manufacturing
footprint have created a solid foundation to secure structural
advantage over time. Cutting-edge R&D platforms of
your Company's LSTC are driving agile innovation and
faster turnaround times for introduction of differentiated &
first-to-market products catering to constantly evolving
consumer needs. Investments in leading-edge digital
technologies and platforms continue to be stepped up
across the value chain to drive competitive advantage.

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. Your Company remains confident of rapidly scaling
up the Branded Packaged Foods Businesses leveraging
the strong growth platforms nurtured over the years in
chosen categories which offer immense headroom for
growth, address opportunities in value added adjacencies
by leveraging mother brands and nurture new vectors of
growth where beachheads have been created.

Personal Care Products

The Personal Care industry witnessed a challenging
year, marked by muted demand conditions, heightened
competition and unprecedented volatility in commodity
prices which intensified margin pressures. The premium
segment, however, continued to grow faster, reflecting an
ongoing shift towards value-added offerings, brand-driven
differentiation and increased demand for high-quality,
ingredient-led & sustainable products.

Despite headwinds in the operating environment,
your Company's Personal Care Business achieved robust
volume growth led by rapid scale-up in new gen channels
(E-commerce/Q-commerce & Modern Trade). Strategic
partnership with key accounts, channel specific packs &
launches and agile execution continue to drive growth.
The premium portfolio remains a significant growth driver,
reinforcing your Company's focus on delivering superior
consumer experiences through innovative offerings and
differentiated value propositions.

In the Personal Wash segment, 'Fiama' continued its
robust growth trajectory, in both gel bars and shower
gels. The Business augmented its product portfolio with
the launch of 'Fiama Moisturising Bars with Japanese
Hokkaido Milk' in 3 variants, offering moisture rich
indulgence, non-sticky nourished skin and mood uplifting
fragrances. Beyond product innovation, Fiama expanded
its Virtual Therapy platform with the MINDS Foundation.
During the year, the brand also collaborated with Filmfare

for an exclusive 'Fiama presents Best Portrayal of Mental
Health in Cinema' Award which was a first in the industry.
With a focus on premiumisation and innovation, Fiama is
well-positioned to drive continued growth.

The 'Vivel' portfolio continued to strengthen its core
association with aloe vera and natural ingredients, with
the launch of Sandal Soap, Aloe Vera based Bodywash &
a new range of naturals based Handwash liquids. Vivel's
repositioning of 'Magic of Soft Touch', is anchored on the
benefit of soft skin and highlights heartfelt emotions that
can be sparked by a gentle touch, creating cherished
memories and stories. The brand continued to strengthen
its association with Women Empowerment with its
collaboration with Azad Foundation, through 'Parvaz',
a year-long leadership training programme that fosters
women's empowerment and enables young women
leaders to be catalysts of change in their communities.

'Savlon' delivered strong growth leveraging initiatives
such as 'Savlon Lao Shaan Badhao'. As a testament to
the Business' focus on innovation, Savlon was recognised
with the NIQ BASES Breakthrough innovation award by
Nielsen, making it one of 15 winners out of 40000 new
launches across the country. Post pandemic, the brand
has been successfully transitioning its proposition from
'protection' to 'caring protection', strengthening its
differentiation and creating a base for sustained growth
momentum.

In the Home Care segment, the 'Nimyle' range of products
continued to expand rapidly across geographies and
channels. The brand provides a markedly differentiated
proposition to consumers with a 100% natural action
which is safe for kids and pets. To further enhance shelf
presence and consumer affinity, the product packaging
was revamped during the year. The brand also launched
'Nimyle Clean Equal Mission' - a first-of-its kind educative
module for children across schools, designed to foster
cleaning at homes as a shared responsibility, by raising
awareness and inspiring action among the next generation.
Anchored in its core values and a clear brand proposition,

Nimyle remains committed to deepen consumer connect
and expand availability across touchpoints.

During the year, 'Engage' continued to strengthen its
position in a dynamic and evolving fragrance market.
In recent years, the brand has pivoted based on the
emerging consumer preference for perfumes & gifting,
with both premium and mass perfume offerings growing
well. Innovation and superior fragrance profiles remain
central to the brand's strategy for scaling up consumer
traction. During the year, the 'Spirit' range of deos,
with olfactive profiles of Oudh, Musk, fruity & floral was
launched. The premium L'amante range was extended
with differentiated variants such as Oudh, Fern,
Soie and Fluer. During the year, a new range of gift
packs known as Vibes was introduced, providing a
premium gifting experience. The brand stepped up
consumer engagement to drive fragrance education with
'Engage Scents & Senses' with influencers & perfume
experts and amplified its digital content. Leveraging
robust R&D capabilities and in-house manufacturing,
the Business continues to deliver high-quality fragrances
that resonate with discerning consumers.

In the Skincare portfolio, the 'Digital-first' brand
'Dermafique' continued to leverage an Al-powered smart
skin advisor to provide personalised skin health analysis,
empowering individuals to know their skin better and
adopt solutions suited to the unique skincare needs of
Indian consumers. During the year, offline expansion
gained momentum with entry into new large-format
stores, eliciting promising consumer response. Sustained
consumer education on customised skin health remains
a core focus as Dermafique seeks to build for the future
with data, science, and differentiated storytelling.

The Business achieved a major milestone this year with
the commissioning of the state-of-the-art Neemgarh
plant, situated in Uluberia, West Bengal. This modern,
digitally-enabled facility marks the first Personal Care
Products plant in one of its most salient markets.
This site also houses the largest varieties of Neem plants

in the world, with 50 neem ecotypes sourced from
across India; your Company has tied up with a renowned
university for conducting primary research on these,
to help deepen knowledge on Neem with a view to facilitate
development of new products. This facility also enhances
the Business' ability to serve high-potential eastern and
north-eastern markets with greater agility, optimised costs
and reduced lead time.

Your Company continues to strengthen its commitment to
sustainability with meaningful progress across packaging
and consumer engagement. Fiama has expanded its use
of 50% recycled plastic across all PET bottle SKUs of
shower gels and hand wash, with clear on-pack callouts
to build consumer awareness. To further promote refill
adoption, refill pouches made with recyclable plastic have
also been introduced and are proposed to be scaled
across variants.

Your Company continued to earn widespread recognition
across national and international forums for its innovative
product design, impactful communication, and purpose-led
brand initiatives. Fiama's Mental Wellbeing Survey was
honoured with the SABRE South Asia Diamond for
excellence in PR, while the recyclable Fiama Handwash
pouch won the prestigious Global DOW Innovation Award.
Savlon Swasth India Mission received a Silver at the
London International Awards for its impactful use of
social media in Health and Wellness and secured multiple
accolades at the Effie Awards and ET Brand Equity
Brand Disruption Awards, including Golds for Influencer
Marketing and Viral Content. Vivel was awarded a Bronze
at the APAC EFFIES and a Gold at the ET Sharks Awards
for its tech-enabled campaign. Engage, Dermafique,
and Nimyle were also celebrated across forums like
ET Digi+, Fulcrum, and Entrepreneur India Awards.
These awards are a testament to the brands' growing
consumer franchise across target segments.

The Business received 14 INDIASTAR 2024 awards for
excellence in packaging and its commitment to inclusivity
was recognised with the FICCI Women Empowerment

Award. Further, the Haridwar Unit was also felicitated with
the CII Quality Circle Competition Winner Award in the
Northern Region.

The Business, with its purpose-led brands serving
discerning consumers in a dynamically evolving
environment, is well poised to seize future opportunities
on the back of innovations, impactful communications,
institutional R&D strength & formulations, state-of-the-art
manufacturing, packaging know-how and multi-channel
distribution.

Education and Stationery Products

The Education and Stationery Products industry witnessed
heightened competitive intensity with the widespread
resurgence of regional players on the back of sharp
moderation in input prices, accentuated by cheap imports
of paper. Against this challenging operating environment,
the Business delivered a resilient performance with the
flagship brand 'Classmate' sustaining its market leadership
position in the Notebooks segment. The Business
continues to leverage your Company's institutional
strengths which provide unique sources of competitive
advantage such as paper manufacturing expertise
including the capabilities of your Company's Life Sciences
and Technology Centre to enhance product superiority &
differentiation in the core notebooks category and drive
premiumisation, multi-channel distribution infrastructure
and brand building expertise.

In keeping with its proposition of 'Enjoy Learning',
the Classmate brand continues to provide differentiated
offerings through technology via eduGAMES Infinity,
that provides students the opportunity to play and learn
new skills. During the year, the Business accelerated
the adoption of 'Classmate Pulse' through targeted
activations focused on new consumer cohorts and also
strengthened the 'Paperkraft' portfolio with the launch of
a new range of notebooks with discrete design themes.
The 'Classmate Interaktiv' Notebook portfolio continues to

witness encouraging consumer response driven by wide
range of offerings that enable 'Do It Yourself' activities,
immersive technologies such as augmented reality and
playful covers.

The Writing Instruments portfolio is being further
strengthened through superior writing systems and
product designs, enhancing differentiation through
strategic tie-ups and by expanding the portfolio with
innovative launches, bringing playfulness around the
brand proposition of 'Enjoy Learning'. To further strengthen
the premium portfolio, the Business introduced a set of
revamped designs elevated by premium finishes and
aesthetics under its range of Mathematical Instruments.

'Classmate All Rounder', an inter-school initiative to
promote holistic learning in line with the National Education
Policy 2020, continued to gain strong momentum in
its third edition, with participation from top schools
across the country. The initiative has engaged nearly
one million students across 33 cities since inception.

The multi-channel capability of your Company's strong
distribution network was leveraged to enhance availability
and drive sales. The Business sustained its leadership
position on e-Commerce platforms through consistent
availability of a wide assortment of products, backed by
focused interventions to enhance consumer traction.
Consumer engagement was further augmented through
Classmateshop.com, a D2C platform that provides
consumers the opportunity to 'Personalise & Capture'
memories on Classmate notebooks. The myClassmate app,
a gamified app focused on developing co-curricular skills
and make learning engaging and enjoyable, has garnered
nearly 2.5 million downloads.

Equipped with state-of-the-art technology and a newly
installed quality lab, the dedicated manufacturing
facility at Vijayawada is enabling the Business develop
differentiated notebook formats, drive cost reduction
and enhance capabilities to exploit opportunities in
overseas markets.

The Classmate and Paperkraft range of notebooks
leverage your Company's world-class fibre line at
Bhadrachalam - India's first ozone treated elemental
chlorine free facility - and embody the environmental
capital built by your Company in its paper business.
The Business also continues to scale-up the
Paperkraft range (FSC®-C181115) of notebooks using
Forest Stewardship Council® (FSC®) certified paper
(FSC®-C064218), made at your Company's paper mill
at Bhadrachalam.

With over 300 million students, India has one of the largest
education systems in the world. The Indian Education
and Stationery Products industry holds immense potential
driven by growing literacy, increasing enrolment ratios,
the Government's continued thrust on the education
sector and a favourable demographic profile of the
country's population. Your Company's Education and
Stationery Products Business, with its strong brands,
robust product portfolio, collaborative linkages with
small & medium enterprises and superior distribution
network, is well poised to sustain its leadership position
in the industry.

Incense Sticks (Agarbattis) and Safety Matches

The Incense Sticks (Agarbattis) category witnessed
robust growth during the year with your Company's
flagship brand 'Mangaldeep' further strengthening its
market standing across formats including Agarbattis,
Dhoop and Sambrani. Anchored in deep consumer
insights and spiritual relevance, Mangaldeep offers a
unique product experience that combines traditional
devotional appeal with modern sensibilities. The Business
successfully navigated an inflationary cost environment
through judicious mix enhancement and strategic
cost optimisation, thereby sustaining profitability and
volume growth.

The Brands visibility and engagement were enhanced
through a high impact thematic campaign -
“Dil Se Karo Baat, Bhagwan Ke Sath” - which struck
a powerful chord with consumers across the country.
The campaign was completed by targeted marketing
interventions across channels, further deepening
Mangaldeep's spiritual connect.

Responding to evolving consumer preferences, the
Business expanded its product portfolio through several
impactful launches. Notably, the new sub-brand 'Fusion'
was introduced with contemporary fragrances such as
Sambrani & Oud, Sandal & Vetiver and Lavender & Sage
each blending traditional aroma with a modern twist.
The 'Scent' sub-brand was also extended with new
offerings in premium dry dhoop sticks and cones, delivering
'perfume like' experiences true to its positioning.

Catering to the emerging wellness segment, the Business
launched 'Pranah', a premium range inspired by
earth-sourced aromatherapy. This included scented
candles, incense sticks, and cones, harmonising natural
inspiration with scientific wellness benefits.

To further strengthen consumer engagement, the brand
undertook large-scale on-ground activations during
the Maha Kumbh Mela in Prayagraj. These included
immersive spiritual experiences, participation in sacred
rituals, and bhajan evenings. The Jalbatti initiative — a
symbolic and sustainable ceremonial offering — added
a powerful dimension to consumer connection and
received extensive media coverage. On the digital front,
augmented reality-based experiences brought the sanctity
of Kumbh into homes, further enhancing brand resonance.

The Mangaldeep mobile app was also relaunched with a
modernised, intuitive user interface. Redesigned with
Watch, Read & Listen content streams, gamified elements
and improved navigation, the app reinforces Mangaldeep's
ambition of being a holistic spiritual companion.

In a pioneering step towards inclusive innovation,
Mangaldeep continues to collaborate with over
150 visually impaired fragrance evaluators under the
Sixth Sense initiative. This unique programme empowers
differently-abled individuals to co-create fragrances,

helping the brand deliver long-lasting and sensorially rich
offerings while fostering inclusive growth.

Over the years, the Business has implemented several
measures to enhance the competitiveness of the
agarbatti value chain in India. This includes scaling up
bamboo procurement through local sources, working
closely with manufacturers and state nodal agencies to
promote bamboo plantation and indigenous bamboo
stick manufacturing. Mangaldeep remains at the
forefront of driving bamboo stick manufacturing, enabling
import substitution while advancing national priorities of
employment generation, rural livelihood enhancement,
and inclusive economic growth.

In the Safety Matches industry, the Business strengthened
its market leadership position by leveraging the brand
'Homelites' - built on differentiated positioning of stronger,
longer and karborised sticks. The Business continues to
focus on scaling up the share of value-added products
in its portfolio and enhancing supply chain efficiency by
sourcing products manufactured closer to markets.

Leveraging its world-class brands and innovative &
superior product offerings, your Company remains
confident of scaling up its Agarbattis & Safety Matches
portfolio, and strengthen its position in the segment.

TRADE MARKETING & DISTRIBUTION

Your Company's Trade Marketing & Distribution (TM&D)
vertical continues to strengthen its multi-channel
go-to-market capabilities towards ensuring effective market
servicing and product availability. Proactive interventions
continue to be made towards addressing emerging
trends such as the rapid growth of new gen channels
(Modern Trade, e-Commerce, Quick-Commerce) and
increasing demand for premium products.

The dynamic interplay of varied and evolving consumer
preferences, multiplicity of channels including rapid
acceleration in new gen channels, diverse demographic
profiles & socio-economic factors, and a vast geographical
landscape pose a high degree of complexity for distribution
of FMCG products in India. Recognising the multifaceted
nature of these challenges, TM&D continues to sharpen
channel-specific strategies to efficiently service consumer
demand across the country. Valuable insights of consumer
behaviour and channel/region specific trends gained over
the years continue to be leveraged to deliver superior
performance in terms of product availability, visibility and
freshness.

The rapid growth of Modern Trade, e-Commerce and
Quick-Commerce channels, coupled with the emergence
of several new players, has necessitated the deployment
of tailored market/outlet specific strategies to seize the
emerging opportunities. Omni-channel presence in urban
markets enabled accelerated growth while shopper
marketing insights and agile supply chain capabilities
were leveraged to enhance operational and execution
efficiencies.

The surge in internet usage, particularly through
smartphones, amongst convenience-seeking consumers,
widespread adoption of digital payments, wide assortment
of products and faster deliveries continue to drive the
rising salience of e-Commerce and Quick Commerce
channels. Your Company's collaborations with leading
e-Commerce and Quick Commerce platforms on all
aspects of operations viz. category development, supply
chain, consumer offerings and customer acquisition
has enabled it to significantly scale-up sales in these
channels. This was augmented by development of
exclusive pack assortments, channel-specific business
plans and 'Digital First' brands. Joint Business Plans
executed in coordination with these platforms coupled
with agile supply chain initiatives have further fortified your
Company's market standing in e-Commerce and Quick
Commerce channels. Growth in the premium portfolio
was accelerated through increased visibility, focus on
target cohorts and jointly curated campaigning, including
collaborating on topical events across accounts. Digitally
enabled sales have grown rapidly in recent years and,
together with Modern Trade, now account for 31% of your
Company's FMCG ⁷ portfolio (Vs. 17% in FY 2019-20).

Your Company's multi-channel distribution network, which
facilitates availability of its products in nearly seven million
retail outlets of which more than one-third are serviced
directly, was further strengthened during the year with the
addition of new markets and outlets to its direct servicing
base. Market coverage was stepped up by more than 2x of
pre-pandemic levels. TM&D's wide and deep distribution
network and cutting-edge digital capabilities render the
FMCG Businesses with significant competitive strength.

In the General Trade channel, your Company continued
to demonstrate resilient performance through focused
market approach and differentiated product assortment.
During the year, urban markets witnessed heightened
competitive intensity from regional/local players and
accelerated channel shift with the increasing salience
of Modern Trade, e-Commerce and Quick Commerce.
Automation, data-led insighting and machine-learning
enabled solutions continue to be increasingly leveraged
to drive last mile productivity and performance across
markets. Further, emerging technologies like Generative
AI are being increasingly leveraged to automate operations
and enhance efficiency. Customised servicing based on
outlet potential and retail engagement programmes have
been deployed to stimulate demand for your Company's
products with enhanced focus on premium grocery
outlets. Specific interventions were undertaken to drive
premiumisation in General Trade outlets with store level
missions led by sharper data analytics.

In rural markets, your Company continued to deploy
market-specific interventions to enhance direct coverage
on the basis of socio-economic indicators and market
potential. This has been supported through a hub and
spoke distribution model with the continued expansion of
rural stockists network to 1.4x over the last three years.
Leveraging the synergies arising out of the deep rural
connect of your Company's Agri Business, extensive
consumer activations were undertaken in high potential
rural areas during the year aided by concerted market

development activities and further enhancements to
the digital ecosystem for the stockist channel. These
initiatives have substantially enhanced the availability of
your Company's range of products in rural markets.

The Food Service and Institutional channels continued to
witness robust growth during the year leveraging existing
partnerships and your Company's wide product range.
Strategic partnerships unlocked new routes-to-market,
catering to specialised segments including 'on-the-go'
consumption, direct marketing and QSRs. Customised
product portfolios continue to be deployed for identified
high potential segments of railways, airports and airlines
to strengthen presence in this channel.

TM&D remains at the forefront of leveraging cutting-edge
digital technologies and building a digital ecosystem to
draw actionable insights for sharp-focused interventions,
augment sales force capability, drive productivity, improve
market servicing and deepen connect with retailers.
Technology enablement in the form of customised mobility
and routing solutions, machine learning algorithms,
data science models, data analytics comprising insightful
visualisation tools and predictive analytics are being
increasingly leveraged to enable speedy and accurate
data capture, enable real-time informed decision making
and aid in optimisation of trade & marketing inputs to
enhance visibility and sales. The machine learning
models have been augmented to sharpen outlet level SKU
recommendations. Use cases for self-service analytics
tools have increased to analyse data and present insights
which are digitally integrated into business decisions,
resulting in intelligent digitalisation of business processes.

The digitally powered eB2B platform of your Company,
UNNATI, has been rapidly scaled up during the year,
covering nearly eight lakh outlets. UNNATI facilitates
sharp and direct engagement with retailers, superior
analytics, personalised recommendations of hyperlocal
baskets based on consumer purchase insights, and
deeper brand engagement.

To cater to the digital payments and financing needs of
customers and retailers, your Company has entered into
strategic collaborations with banks and Fintech partners.
These solutions have been seamlessly integrated with
the UNNATI platform to digitally empower and unlock
business growth for your Company's trade partners.

The scale and diversity of your Company's distribution
network remains pivotal in enhancing market presence,
gaining valuable insights into consumer & trade behaviour
and facilitating the execution of product launches
across geographies. In order to effectively leverage new
routes-to-markets and meet the assortment needs of
new gen channels, your Company executed over
100 new product launches across target markets besides
extending the availability of several existing products
in the portfolio.

Several interventions were undertaken by TM&D during
the year to drive structural improvement in operational
effectiveness and productivity. During the year, your
Company continued to leverage the integrated planning
and supply chain tool, powered by best-in-class algorithms
for inventory optimisation and productivity enhancement
to significantly improve supply chain agility and market
servicing through enhanced forecast accuracy. The
supply chain network was redesigned to enhance the
premium portfolio availability both in existing and target
markets across urban and rural markets. TM&D continues
to augment warehousing infrastructure leveraging
cutting-edge technologies to cater to the growing scale of
your Company's FMCG Businesses.

In line with your Company's commitment to the
'Triple Bottom Line', TM&D continued to focus its efforts
for adoption of renewable energy sources in its operations.
As part of your Company's Sustainability 2.0 agenda,
TM&D is rapidly expanding its Green Logistics efforts for
mid mile and last mile deliveries in key cities across the
country. Collaborations with multiple Original Equipment

Manufacturers (OEMs) and fleet aggregators facilitated
adoption of Electrical Vehicles (EV) in TM&D operations.
The number of EV trips increased by 3x over the
previous year.

TM&D's distribution highway is a source of sustainable
competitive advantage for your Company's FMCG
Businesses and is well-positioned to support the rapid
scale-up of operations in the ensuing years leveraging
its best-in-class systems and processes, an agile and
responsive supply chain, and a synergistic relationship
with its channel partners.

PAPERBOARDS, PAPER AND PACKAGING

Paperboards & Specialty Papers

After achieving record highs in FY 2022-23, the domestic
industry has faced significant challenges over the past two
years. The industry contended with a difficult operating
environment, characterised by low-priced supplies of
paperboards and paper from China and Indonesia in
global markets, including India, as well as weak demand
conditions, resulting in subdued realisations.

On the inputs front, wood prices witnessed sharp
escalation during the year, with wood availability and
quality being significantly sub-optimal on account of
lower plantations during the pandemic period and higher
demand from competing Wood Based Industries (WBI).

The cumulative impact of subdued realisations, excess
supply in domestic markets led by unprecedented
increase in low-priced imports into India from China,
Indonesia etc., sharp surge in wood costs, and
currency-led volatility exerted pressure on margins during
the year. The Business was able to partially mitigate
the impact of these challenges by leveraging structural
advantages of the integrated business model, stepped-up
end-user engagements, Digital interventions and
increase in salience of exports and Plastic substitution
(PlaSub) products.

The Business has also undertaken several initiatives to
address the challenges of wood availability and surge in
costs, including inter alia, opportunity based wood imports,
evaluation of leased plantation models, and acceleration
in plantations in collaboration with industry stakeholders.
Your Company is pioneering a first ever initiative in
Indian Wood Based Industry using satellite imaging for
plantation monitoring and wood assessment to monitor
pulpwood plantations and assess future harvestable
wood quantity available in various catchments.

The Business sustained its leadership position in the
Value-Added Paperboard (VAP) segment through focused
innovations and development of customised solutions
for end-use industries. The Business also consolidated
its leadership position in the eco-labelled products and
premium recycled paperboards segments.

During the year, the Specialty Papers segment witnessed
robust growth driven by capacity augmentation in
Decor paper. Market standing in the segment continues
to be driven by product mix enrichment and diversification
of the customer base. The domestic industry remained
under pressure due to cheap supplies from China.
The levy of Anti-dumping duty on Decor paper has
partially provided a level playing field for domestic industry,
which is critical towards fostering domestic value chains
and enabling import substitution.

During the year, your Company signed a Business Transfer
Agreement to acquire the Pulp and Paper Undertaking
('CPP') of Aditya Birla Real Estate Limited ('ABREL') at
Lalkuan (Nainital, Uttarakhand). Commissioned in 1984,
CPP is a well-established player in the Indian Paper
industry with an installed capacity of 4.8 Lakh tonnes
per annum. CPP is a one-of-a-kind asset with a strong
strategic fit with your Company's Paperboards & Specialty
Papers Business. The acquisition (which is expected to
be completed in about six months) will immediately add
significant scale and economies to existing operations
with potential for further capacity expansion, provide
locational advantage for efficient customer servicing and

proximity to key raw material sources, mitigate operational
risks through multi-site operations and enhance resilience
across industry cycles through portfolio diversification.
The Business expects to drive structural improvement
in profitability of CPP through several value unlock
interventions such as capacity debottlenecking, product
quality upgrade, efficiency improvement leveraging
TPM/Digital initiatives, supply chain optimisation, costs
and procurement efficiencies. The acquisition is also
expected to strengthen the market standing of your
Company's Paperboards and Specialty Papers Business
and engender new opportunities in the domestic and
international markets. The acquisition aligns with your
Company's strategy of driving the next horizon of growth
in the Paperboards and Specialty Papers Business by
expanding capacity at a new location considering that
the existing facilities are already saturated. The strong
linkages to afforestation and livelihood creation pursued
by both the entities will also contribute meaningfully to
national priorities.

The paperboards and packaging industry is poised
for transformative change in the medium term.
Customers are increasingly seeking solutions that are
bio-degradable, substitute single use plastic and meet
stakeholder & regulatory expectations across industries
including food serving & delivery, pharmaceutical, beauty
and electronics.

The Business has adopted a multi-tiered strategy to
build solutions that will replace single use plastics and
meet emergent consumer needs. Within the sustainable
products portfolio - 'Platform 1’ comprises a range of
recyclable, compostable and barrier coated boards and
includes the 'Filo' series - 'FiloBev' (for beverage cups),
'FiloServe' (for QSR, bakeries, food retail) & 'FiloPack'
(packaging for sweets and deep freeze applications).
'FiloBev Mini' (for economic cup variant for short servings)
was developed during the year and has quickly gained
market share in focus markets. The Filo series has
been certified compostable by the Central Institute of
Petrochemicals Engineering & Technology (CIPET) and the
manufacturing unit at Bollaram has been registered as a

compostable products manufacturer. The state-of-the-art
Coater machine set up during the year has enabled the
business to quickly penetrate this fast-evolving space
which holds immense growth potential, supported by
the R&D capabilities of your Company's Life Sciences &
Technology Centre, and through external collaborations
with global specialists. The range of products in this
segment is witnessing strong growth momentum both
in domestic and international markets. 'Platform 2’
comprises a range of first-to-market Fusion boards that
are fully recyclable and replace plastic 'foam' board.
End-use applications include indoor display solutions
involving replacement of plastic signboards and shelves.

‘Platform 3’ offers futuristic packaging solutions
comprising premium Moulded Fibre Products (MFP) made
from renewable natural fibres such as wood, bamboo,
bagasse, waste paper etc. Your Company's wholly-owned
subsidiary, ITC Fibre Innovations Limited (IFIL), forayed
into the fast-growing MFP space with the commissioning
of a state-of-the-art MFP manufacturing facility in
Badiyakhedi, Madhya Pradesh in March 2024. During
the year, IFIL has substantially stabilised operations
and scaled up commercial shipments. Going forward,
IFIL will leverage the expertise of the Business in
fibre value chain, manufacturing excellence and strong
sustainability credentials to rapidly scale-up business
with continued focus on developing innovative plastic
substitution solutions.

Your Company's Packaging Board Centre of Excellence
was institutionalised during the year to further drive
customer engagement on technical aspects, improve
product performance and focus on new-gen product
development.

The Business continues to procure wood, a key raw
material, from sustainable sources. Research on clonal
development has resulted in introduction of high-yielding
and disease-resistant clones that are adaptable to a
wide variety of agro-climatic conditions. This has not only
aided in increasing farmer incomes but has also enabled

greater consistency in farmer earnings. In this context,
your Company's Life Sciences & Technology Centre is
engaged in developing higher yielding second generation
clones with enhanced pest and disease resistant attributes.
The Business continues to focus on scaling up wood
sourcing from core areas and has increased plantations
in core area during the year. In addition, initiatives such
as bund plantations and scaling up plantations in new
catchment areas in Odisha and Chhattisgarh have enabled
procurement of nearly 10% of total wood requirement of
the Business from such new areas, with further potential
for increasing cost-effective access to fibre in the future.
Business has achieved highest ever plantation area of
~65000 ha (growth of appx. 30%) during the year.

Your Company has the distinction of being the first in India
to have obtained the Forest Stewardship Council-Forest
Management (FSC®-FM) certification (FSC®-C102390),
which confirms compliance with the highest international
benchmarks of plantation management across the
dimensions of environmental responsibility, social benefit,
and economic viability. Till date, your Company has received
FSC®-FM certification for over 1.49 lakh acres of
plantations involving over 25000 farmers. During the year,
nearly 4.85 lakh tonnes of FSC®-certified wood was
procured from these certified plantations. Your Company
sustained its position as the leading supplier of
FSC®-certified paper and paperboards (FSC®-C064218)
in India.

Your Company's Paperboards & Specialty Papers
Business is a pioneer in the adoption of Digital
technologies. In recent years, the Business has embarked
upon a comprehensive Digital Transformation Programme
across the vectors of manufacturing, supply chain and
support services to achieve operational excellence,
enable decarbonisation of operations, drive improvement
in profitability and improve safety across the value chain.
The multi-dimensional digital interventions encompass
Industrial IoT for Smart Operations, Integrated Data
Platform, AI/ML algorithms for manufacturing process
optimisation, AI/ML based image analytics and IoT based

crop monitoring & advisory, and computer vision-based
solutions to improve workforce safety. The Business
continues to collaborate with partners from the start-up
ecosystem, as well as established solution providers,
in building scalable solutions that are custom fit to business
requirements. The Business' Digital App Suite has more
than forty applications across themes of automated data
reporting, image and video analytics, intelligent root
cause analysis, smart simulation, numerical optimisation,
advanced AI models, low-code/no-code applications,
process digital twins, etc. The Business was the Global
winner at the BRICS Industrial Innovation Contest under
the theme of 'Intelligent Manufacturing using AI/ML' and
the Asia-Pacific Regional winner at the Gartner's Eye for
Innovation Awards under the categories of 'Advanced
Manufacturing', and 'Energy, Power and Utilities'.

The Business also embarked upon a Supply Chain
Transformation Project 'OJAS', establishing a dedicated
supply chain vertical to enhance customer service and realise
value from supply chain optimisation. This initiative has
led to significant improvements in On-Time-In-Full (OTIF),
reductions in Order to Delivery Time (ODLT), and other
customer service delivery metrics.

The Business has adopted the principles of
Total Productive Maintenance (TPM), Lean and
Six Sigma for over a decade and continues to reap
substantial benefits through several Business Excellence
initiatives.

All manufacturing units of the Business continue to
recycle nearly 100% of the solid waste generated during
operations by converting the same into lime, fly ash
bricks, cement, grey boards, egg trays etc. In addition,
the Business recycled around 1.1 lakh tonnes of waste
paper during the year, thereby sustaining positive solid
waste recycling footprint of the Business.

In line with the objective of enhancing the share of
renewable energy in its operations, the Business has
implemented several initiatives including investments in a
green boiler, high efficiency circulating fluidised bed boiler,
solar & wind energy and increased usage of bio-fuel.
The recently commissioned state-of-the-art and
future-ready High Pressure Recovery Boiler at the
Bhadrachalam mill is progressively enhancing energy
efficiency and reducing the carbon footprint of the unit's
operations by significantly lowering coal consumption
by appx. 25%. These investments are a testament
to your Company's commitment towards embedding
sustainability in its operations and supporting the
'Make in India' initiative. With these initiatives, renewable
sources presently account for more than 50% of
total energy consumed at the four manufacturing units
of the Business.

The Business continues to strengthen its safety
management processes, adopt globally recognised
best practices and ensure that facilities are designed,
constructed, operated and maintained in an inherently safe
manner. Business continues to deploy various measures
including the use of Data Analytics Tools to identify risk
prone areas for proactive mitigation of incidents, video
analytics, digitally enabled systems such as Mobile based
app, 'Gensuite', etc.

The manufacturing facilities at Bhadrachalam, Kovai,
Tribeni and Bollaram continue to receive industry
recognition for their green credentials and safety
standards in line with the focus on sustainable business
practices. The Bhadrachalam unit is the first pulp & paper
plant and the second in the country overall, to be rated
'GreenCo Platinum+' by CII, as part of the Green Company
rating system. The Kovai unit has also been rated
GreenCo Platinum+ by CII. The Kovai unit is the
first site in India and the first paper mill in the world to
achieve the highest platinum rating under the 'Alliance
for Water Stewardship Standards'. Bhadrachalam unit

also received Alliance for Water Stewardship Platinum
certification. Bhadrachalam mill was also awarded the
'Excellent Energy Efficient unit' at National Awards for
Energy Management, 2024. The Kovai Unit was awarded
for Excellence in water Management, 2024, under the
'Beyond the Fence' category.

With structural drivers of demand in the Indian economy
remaining strong over the medium term, paperboards
demand is expected to remain robust. Enabling
factors include India's emerging demographic trends,
urbanisation, rising middle class, continued substitution
of plastic with greener alternatives and India emerging as
the Global manufacturing hub. End-user segments such
as Pharmaceuticals, Apparel, QSR, FMCG, consumer
durables and e-Commerce are projected to register strong
growth. Writing & Printing paper demand is also expected
to remain firm on the back of demand from the publishing
and notebooks industries driven by the Government's
thrust on primary and secondary education.

While cheap imports from China as well as from ASEAN
countries remain a potential threat in the short run, the
Business remains confident of leveraging its competitive
strengths to mitigate the impact thereof. Representations
continue to be made at appropriate forums for suitable
measures to safeguard domestic industry. Directorate
General of Trade Remedies (DGTR), Ministry of
Commerce and Industry, India has also initiated an
Anti-Dumping investigation on Virgin Paperboard
originating from China and Chile. Indian Paper
Manufacturers Association (IPMA), National Industry
body has also approached Ministry of Commerce for
considering imposition of Minimum Import Price (MIP) on
import of paperboards into India.

Your Company continues to engage with policy makers
to address key industry challenges including increasing
wood availability through collaborative public-private
plantation models to strengthen the competitiveness of
domestic industry and arrest the rapid increase of low
priced imports of paper & paperboard into the country.

Over the years, your Company has continued to lay
thrust on structural interventions to provide sustainable
competitive advantage across the value chain with
significant structural cost savings and enhanced
productivity across all key operating nodes to enhance the
margin profile of its portfolio.

The integrated nature of your Company's business
model - comprising access to high-quality, cost competitive
and renewable fibre supply chain, continued development
of high yielding and disease-resistant clonal saplings,
enhancing energy efficiency, continuous improvement
through product & process innovation, in-house pulp
manufacturing capability, imported pulp substitution,
world-class product quality, state-of-the-art manufacturing
facilities, increasing usage of data analytics and
Industry 4.0 technologies along with robust forward
linkages with the Education and Stationery Products
Business and the Packaging and Printing Business - is a
key source of competitive advantage for your Company's
Paperboards & Specialty Papers Business. Your Company
is confident of further consolidating its leadership position
in the Indian Paper and Paperboards industry leveraging
recent investments in innovation platforms anchored on
the development of sustainable products and cutting-edge
digital technologies to set new benchmarks in customer
satisfaction, operational excellence, and sustainability.

Packaging and Printing

Your Company’s Packaging and Printing Business
is a leading provider of value-added, differentiated
and innovative packaging solutions leveraging its
comprehensive capability-set spanning multiple
technology platforms for cartons and laminates,
supported by in-house cylinder making and blown film
manufacturing lines. The recent capacity addition at
Nadiad, Gujarat, with state-of-the-art equipment to cater
to markets in the Western region, has further augmented
the Business’ capabilities in Cartons packaging. Capacity

utilisation at the facility was progressively ramped up
during the year.

The Business caters to the packaging requirements of
leading players across several industry segments viz.
Food & Beverage, Personal Care, Home Care, Footwear,
Consumer Electronics & Electricals, QSR, Pharma,
Liquor and Tobacco. The Business continues to be
acknowledged as a 'first choice packaging partner' by
several reputed FMCG companies in the country for
providing superior and cost-effective packaging solutions.
The Business also provides strategic support to your
Company's FMCG Businesses and Cigarettes Business
by facilitating faster turnaround for new launches,
innovative & sustainable packaging solutions, design
changes and ensuring security of supplies.

Amidst sluggish consumer demand and heightened
competitive intensity in the packaging and printing industry,
the Business continues to aggressively pursue new
business development across various segments. During
the year, the Business acquired several key accounts,
creating a sound base for robust growth going forward.

The Business continues to craft innovative packaging
solutions leveraging its deep understanding of
end-user needs and the capabilities of your Company's
Life Sciences and Technology Centre. The Business
further scaled up the flagship 'InnovPack' campaign
targeting specific end-use segments with potential for
rapid adoption of sustainable packaging and plastic
substitution solutions. Along with a pipeline of solutions
developed through molecular science research, such as
'Bioseal' (compostable coating to replace plastics),
'Oxyblock' (recyclable coating solution to enhance barrier
properties in packaging) and 'Germ free coating' (solution
for microbial free packaging surface addressing the
consumer consciousness towards hygiene and safety),
the Business continued to focus on developing several
innovative solutions towards 'Reducing, Reusing and
Recycling' of plastic substrates; these are under various
stages of commercialisation.

The Business has consistently demonstrated execution
excellence vis-a-vis key operational parameters by
implementing various operational excellence tools and
projects. These initiatives focus on improving efficiency,
reducing waste, and enhancing quality, supported by
employee skill development. The Business amplified
and sustained these benefits through deployment of
new-age Industry 4.0 technologies and digital facilitation
by establishing a core foundation of IT-OT integration
across all units.

During the year, the Business received the prestigious
WorldStar and AsiaStar awards in the categories of
pack premiumisation and sustainability. The Business
also received several national level awards such as the
IFCA Star Award and SIES SOP Star Award for
its excellence in Packaging. The Business was
also recognised as the Packaging Company of the
Year 2024 - Folding Cartons (Large Volumes) & Packaging
Convertor of the Year 2024 (Foods & Beverages)
by PrintWeek.

All four units of the Business are certified under
the Integrated Management System, consisting of
ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018.
Cartons Packaging lines at Tiruvottiyur and Haridwar
units received the 'Grade A' and the Nadiad unit received
'Grade AA' - Brand Reputation Compliance Global
Standards (BRCGS) certifications for global standards in
packaging materials, a key accreditation for supplies to
the packaged foods industry. All key units of the Business
have Sedex certifications for social ethical compliances;
with the Business also receiving the Ecovadis Bronze
certification for sustainability performance.

Notwithstanding the recent headwinds in the sector, the
Indian packaging industry is positioned for significant
growth in the near term, considering the low per capita
packaging consumption of appx. 10 kgs per annum
in India as against per capita consumption of
60 to 100 kgs per annum in Advanced Economies.
Demand for consumer linked packaging in India is
expected to be further benefited by rising affluence,

favourable demographics and growing share of
Modern Trade and e-Commerce. Growing awareness
of decarbonisation and heightened regulatory attention
on plastic packaging are expected to drive growth
in sustainable packaging, including recyclable and
circular solutions.

With world-class technology across a diverse range of
platforms, leadership in sustainable packaging solutions
and best-in-class quality management systems, the
Packaging and Printing Business has established itself
as a one-stop packaging solutions provider to several
industry segments viz. Food & Beverage, Personal Care,
Home Care, QSR, Footwear, Consumer Electronics,
Pharma and Tobacco. With focused investments in
skill development and a distributed manufacturing
footprint, the Business is well positioned to grow its
marquee customer base while continuing to service the
requirements of your Company's FMCG Businesses.

AGRI BUSINESS
Leaf Tobacco

Global demand for leaf tobacco exceeded supply during the
year, due to supply disruptions in major sourcing regions
caused by adverse weather events and international
manufacturers rebuilding depleted inventory levels from
previous years' crop shortages. Despite growth in Indian
Flue Cured Virginia (FCV) tobacco crop production during
the year, the surge in global demand caused heightened
competitive intensity amongst leaf exporters resulting
in sharp rise in FCV procurement prices for the third
consecutive year.

The Business continued to leverage its deep customer
relationships, crop development expertise, superior
product quality, world-class processing facilities and strong
sustainability credentials to strengthen its position as a
reliable supply chain partner for global customers besides
accessing new customers/markets. During the year, the
Business continued to increase its share of business

with international buyers of Indian Burley tobacco by
facilitating increased crop production, adopting Weather
Resilient Tobacco Production Systems and strengthening
crop competitiveness leveraging its sustainable tobacco
programme. Deeper farmer & customer engagement,
operational agility and supply chain efficiency enabled
the Business to deliver enhanced value to customers and
consolidate its pre-eminent position as the largest Indian
exporter of unmanufactured tobacco.

The Business has enhanced focus across the tobacco
value chain on the key vectors of Quality, Consistency,
Compliance, Climate risk mitigation and Sustainability.
To deliver on these parameters, sustained investments
are being made in your Company's Green Leaf Threshing
plants (GLT) at Anaparthi, Chirala and Mysuru towards
capacity enhancement, delivering world-class quality and
upgrading processing technology. Crop & region-specific
agronomic practices are being implemented at scale to
meet new and emerging customer needs.

The Business continues to set benchmarks in leaf
threshing operations through focused initiatives and
innovative technological & digital solutions such as real
time chemistry measurement & analysis (chemosensory
evaluation) for finished goods, Historian AI/ML engine for
advanced data analytics, AI based NTRM (Non-Tobacco
Related Matter) removal system, automation of material
handling, etc.

Strategic cost management remains a key focus area
for the Business. Digital tools such as AI/ML powered
real-time price discovery system continue to be scaled
up facilitating efficient leaf tobacco buying across auction
platforms. Several other digital initiatives, implemented
across the value chain in recent years, have led to improved
operating efficiencies in areas of crop development,
leaf procurement and supply chain.

Synergistic R&D initiatives with focus on varietal
development, climate smart farming techniques, farm
level digital interventions and usage of water efficient

technologies are being scaled up towards enhancing
productivity & product quality, reducing cultivation costs,
strengthening resilience and capacity building of the farm
value chain to increase crop security and enhance farmer
incomes.

The Business has stepped up its engagement with farmers
to implement integrated energy management initiatives
spanning energy conservation, increasing alternative
fuel usage and energy plantations towards achieving fuel
self-sufficiency in the curing process of FCV tobacco.
The Business implemented several decarbonisation
measures for farms, GLTs, and supply chain operations
throughout the year. The electrical energy needs of all
three GLTs are substantially met from renewable sources
in line with your Company's philosophy of adopting a
low-carbon growth path. In addition to these initiatives,
your Company is taking up integrated watershed
management programmes to ensure availability of water
for irrigation during critical phases of the crop cycle.

In recognition of its commitment to the highest
standards of Sustainability, EHS & Quality, the Business
received several awards during the year including the
'SEEM National Energy Management award' with
Platinum rating for Excellence in Energy Conservation
for Chirala GLT, 'Silver Category in Industrial Safety
Leadership Award' from Confederation of Indian Industry
(CII) for Anaparthi GLT, 'Excellence Energy Efficient Unit'
for Mysuru GLT from CII, as well as various awards from
the Quality Circle Forum of India and CII for operational
excellence, etc.

While the recent stability in taxes on cigarettes and supply
shortages in global markets has led to an increase in
the demand for Indian leaf tobacco during the year, it is
imperative to address certain structural factors to facilitate
sustained growth and competitiveness of leaf tobacco
exports from India. Punitive taxation on the legal cigarette
industry has over the years resulted in rapid increase in
illicit cigarette trade which has in turn adversely impacted
demand for Indian leaf tobacco as illicit products do not
use leaf tobacco grown in India. Lower export incentives in

India and high import duty/tariffs levied in several markets,
including the USA and Europe, also continue to weigh on
the competitiveness of Indian leaf tobacco exports.

As stated in earlier years, a more balanced regulatory
and taxation regime that cognises for the unique tobacco
consumption pattern prevalent in India and the economic
realities of the country remains critical to support the
Indian tobacco farmer and the 46 million livelihoods
dependent on tobacco. It is also imperative that the Indian
leaf tobacco sector receives necessary policy support,
including restoring export incentives to earlier levels, to
enhance the competitiveness of unmanufactured tobacco
exports from India and contribute to increase in farmer
incomes. According to an ASSOCHAM TARI ⁸ Study,
the tobacco sector in India contributes substantial
socio-economic benefits in terms of agricultural
employment, farm incomes, revenue generation and
foreign exchange earnings. Your Company continues to
engage with policy makers on these matters.

The Business will continue to provide strategic sourcing
support to your Company's Cigarettes Business and
fortify its leadership position as a major exporter of quality
Indian tobacco, thereby catalysing the multiplier impact
of increased farmer incomes on the rural economy.
With its strong R&D capability, unique crop development
& extension expertise, sustainability leadership,
digital expertise, state-of-the-art processing facilities
and deep understanding of customer & farmer needs,
your Company is well positioned to meet the current and
emerging requirements of global customers and sustain
its position as a world-class leaf tobacco organisation.

Other Agri Commodities

Amidst persistent geopolitical tensions, climate
uncertainties and macroeconomic challenges, concerns
over global food security and inflation have intensified.
Various policy measures implemented by the Government
of India, including stock limits and export restrictions,

continued to pose myriad challenges to your Company's
Agri Business during the year.

The Business continued to map risks and opportunities
arising out of the unfolding global trade dynamics and
build adaptive capacity to enhance resilience of its
business models. In spite of the challenging operating
environment, your Company leveraged its strong
farm linkages, extensive sourcing expertise, enabling
traceable, attribute-based and identity-preserved sourcing
of commodities, multi-modal logistics capability, agile
supply chain operations, deep customer relationships,
and focus on scaling up the Value-Added Agri Products
(VAAP) portfolio, to drive robust growth during the year.
Easing food inflationary pressures and higher inventories
of food grains have enabled partial lifting of certain trade
restrictions towards the end of the year, which augurs well
for the year ahead.

As reported in earlier years, the scope and scale of
operations of your Company's Agri Business have grown
manifold over the years and currently encompasses
over 3.5 million tonnes of annual throughput in 22 states
and over 20 agri-value chains. The strategic focus of
the Business continues to be on accelerating growth by
rapidly scaling up its Value-Added Agri Products (VAAP)
portfolio, straddling multiple value chains comprising
Spices, Coffee, Frozen Marine Products and Processed
Fruits, amongst others.

- Your Company further consolidated its position as
a preferred supply chain partner to buyers in spices
such as Chilli, Cumin, Turmeric, and Coriander.
The Business enhanced its presence in 'food safe'
markets, viz., the USA, EU, and UK, by leveraging
its institutional strengths, such as identity-preserved
sourcing expertise, strong backward integration,
supply chain control, and customer-centric strategies.

The Business continues to scale up its Organic and
Integrated Crop Management (ICM) programmes,
expanding organic cultivation across multiple
states to meet the growing demand for certified

organic products. Committed to sustainable farm
management practices backed by Rainforest Alliance
and Global GAP accreditation, your Company has
successfully leveraged ITCMAARS to strengthen
farmer connections, improve traceability, and drive
sustainable agricultural practices. During the year,
the Business significantly expanded its value-added
portfolio, achieving substantial growth in organic,
steam-sterilised, and processed powder segments.
The Business remains committed to execution
excellence - capacity utilisation at the state-of-the-art
spices processing facility in Andhra Pradesh has been
further scaled up; the Business continues to maintain
its unblemished track record in terms of complying
with stringent food safety parameters. The proportion
of custom-made products in the overall portfolio has
increased considerably, underscoring your Company's
strategic focus on premium offerings. The Business
has successfully broadened its customer base
across various markets, showcasing strong customer
acquisition capabilities and a commitment to building
lasting relationships. Additionally, the Business has
gained market share in the export market, reinforcing
its position as the leading Indian exporter of whole
and value-added spices.

- During the year, international coffee prices surged
primarily due to lower supply in global markets by
leading coffee producers viz. Brazil and Vietnam.
Driven by strong demand, Indian coffee exports
witnessed robust growth.

Your Company leveraged its strategic sourcing
presence in major coffee-growing regions of India
and deepened its focus on certified and sustainably
sourced coffees to expand its market share in exports.
The Business strengthened its footprint across key
international markets, particularly in Europe and the
Middle East, by leveraging its long-standing customer
relationships, strong sustainability credentials and
agile execution. Continued expansion of certified

acreage and investments in traceable and sustainable
supply chains demonstrate the Business' commitment
to responsible sourcing and future-readiness.

Your Company continues to be one of India's leading
exporters of value-added frozen marine products,
with strong capabilities in processing individually
quick-frozen (IQF), raw, and cooked products,
adhering to the highest safety and hygiene standards
demanded by discerning markets such as the US, EU,
and Japan. The Business strengthened its position
in the 'Aquaculture Stewardship Council (ASC)
certified shrimp' segment, reinforcing its leadership
in sustainable seafood and aligning with customers'
responsible procurement goals.

During the year, the Indian shrimp industry faced a
challenging environment marked by volatile farm
gate prices and supply chain headwinds. Despite
these challenges, your Company expanded its reach
through market development in countries such as
Greece, Israel, and Malaysia, and by launching
strategic product extensions, in line with its portfolio
diversification goals.

- Your Company continues to enhance its capabilities
in the Medicinal and Aromatic Plant Extracts (MAPE)
segment by strengthening backward integration,
cultivation programmes, and its portfolio of plant-based
extracts. Focusing on Ayurvedic ingredients like
ashwagandha, turmeric, and marigold, the Business
deepened farmer engagement to ensure traceability
and quality compliance. Your Company's MAPE farm
in Madhya Pradesh continues to play a pivotal role
in varietal selection trials, seed production, and
establishing standardised package of practices,
enhancing the Business' technical capabilities.
The Business also initiated organic cultivation to meet
the growing demand for certified organic extracts in
premium export markets and is developing unique
value-added products leveraging the research
platforms of the Life Sciences and Technology Centre
of your Company.

Your Company continues    to drive    agricultural

transformation at scale    through    ITCMAARS

(Metamarket for Advanced Agriculture and Rural Services),
a pioneering 'Phygital' platform that integrates digital
capabilities with on-ground engagement. ITCMAARS is a
crop-agnostic full-stack AgriTech platform, that has been
steadily enhancing procurement efficiency, optimising
supply chains, and creating new avenues for value
generation while delivering meaningful benefits to the
farming community. Using Farmer Producer Organisations
(FPOs) for physical engagement and a super app for
digital services, ITCMAARS is catalysing farmer impact
at scale.

The ITCMAARS super app, which farmers can download
on their phones, acts as a single point resource for farmers,
providing personalised agricultural services through a plug
and play model. This digital platform provides AI/ML driven
personalised climate-smart crop advisories, intelligent
nudges, customised soil nutrition, vernacular and voice
enabled Generative AI, satellite sensing and real-time
image recognition tools for the farming community.
The physical layer enables access to cutting edge
agricultural techniques such as biological agri inputs,
nano fertilizers, drones, precision farming technologies,
scientific quality assaying, market linkages and
seamless access to formal credit at villages through
FPOs and partners.

This initiative now spans across more than 2,050 FPOs
encompassing over 2.1 million connected farmers
across 11 states. Operating across more than
10 crop value chains, the platform partners with
over 100 leading institutions, including banks, agri-input
companies, Indian Council of Agricultural Research (ICAR),
and agri-tech startups. The ITCMAARS super app,
available in 8 regional languages, has emerged as
India's highest-rated agriTech app. The 'KrishiMitra'
voice assistant, the world's first Gen AI-based chatbot for
farmers, has significantly boosted digital adoption through
vernacular and voice-based interactions.

As India's regulatory and consumer landscape increasingly
demands traceability and sustainability, ITCMAARS is
laying the foundation for 'Trust Systems at Scale', enabling
the farming community to meet evolving standards
such as the EU Deforestation Regulation (EUDR) and
sustainably produced certification requirements. With a
vision to empower millions of farmers and unlock new
value pools across the agri-inputs, outputs, and services
domains, your Company remains deeply committed to
leveraging ITCMAARS to deliver enhanced productivity,
improved market access, and resilient incomes for India's
farming communities.

Over the years, your Company has invested significantly
in building competitively superior agri-commodity
sourcing expertise comprising multiple business models,
wide geographical spread and customised infrastructure.
Your company is rapidly building expertise in data-science
led decision support systems to deepen its sourcing
capability. AI/ML models dynamically respond to evolving
conditions across multiple sourcing dimensions and
support the sourcing experts in making optimal decisions
around temporal and spatial vectors. These capabilities
and infrastructure have created structural advantages by
facilitating competitive sourcing of agri raw materials for
your Company’s Branded Packaged Foods Businesses.

- The Business continued to play a pivotal role in
securing benchmark-quality wheat to support the
growing requirements of the 'Aashirvaad' atta portfolio.
Leveraging a wide sourcing network, robust crop
development initiatives, and digital tools, the Business
ensured timely and cost-efficient procurement of
critical grades of wheat. During the year, procurement
was scaled through direct farm linkages and FPOs,
with a significant share of wheat sourced via digitally
enabled platforms. Crop development efforts were
intensified to improve climate resilience, enhance
yields, and secure premium varieties to provide
consumers with best-in-class product quality and
experience.

-    During the year, farmer-driven milk procurement
network in Bihar, West Bengal, and Jharkhand
was strengthened to meet the growing demands
of your Company's Fresh Dairy portfolio under the
'Aashirvaad Svasti’ brand and the 'Sunfeast'
Dairy Beverages in Punjab. The Business expanded
the use of digital tools, including automated collection
systems, GPS-enabled logistics, and direct farmer
payments, to bring greater transparency across the
value chain. Tailored dairy extension services covering
animal nutrition, health, and productivity enhancement
were scaled up, improving yields and reinforcing
farmer loyalty. These efforts have enhanced farmer
profitability while ensuring sustained delivery of
superior-quality milk aligned with brand requirements.
The capability to source superior attribute-specific
milk has enabled your Company to expand its
Fresh Dairy portfolio with several innovative offerings.

-    The Business continues to scale-up sourcing
of spices to meet the growing requirements of
Sunrise and Aashirvaad brands.

-    Going forward, the organic sourcing capabilities, farm
linkages and traceability would also become a source
of competitive advantage for the organic portfolio of
your Company's FMCG Businesses.

The Business strengthened its collaborations with
leading research institutions across India to build
cost-effective, high-yielding, and resilient Agri-value
chains. By mapping climate hotspots and focusing on
regenerative agriculture, your Company introduced
location-specific seed varieties and tailored agricultural
practices in key states. This approach is aimed at
enhancing crop intelligence, reducing GHG emissions,
and improving soil health. Additionally, efforts to increase
farm income were supported through the development
of customised Agri-inputs, laying the foundation for
sustainable, future-ready food products. Your Company
continued developing the millets value chain, promoting
climate-resilient, nutrient-dense crops through public-private

partnerships in Maharashtra and Andhra Pradesh with
Indian Institute of Millets Research (IIMR).

Driving the transformation towards NextGen Agriculture,
your Company has significantly accelerated digital
adoption across the Agri landscape, empowering farmers
with advanced, tech-enabled solutions. At the forefront is
your Company's 'phygital' innovation ITCMAARS which
delivers hyperlocal, personalised recommendations at
scale through predictive advisory models powered by
IoT and data analytics. This integrated ecosystem has the
potential to unlock several evolving opportunities that can
help reimagine the future of the agri sector and propel the
Business to create new and scalable revenue streams,
whilst also benefitting farmers.

To further enhance rural livelihoods, your Company's
focus on Value-Added Agri Products (VAAP) and crop
diversification is catalysing a shift from conventional
production-centric models to demand-driven, value-rich
agri-value chains. Strategic investments in state-of-the-art
export infrastructure are linking Indian farmers to global
markets, driving growth and inclusivity.

Through a wide spectrum of initiatives including
climate-resilient farming, natural resource management,
competitive value chain development, cutting-edge
digital interventions and robust market linkages,
your Company is enabling Indian agriculture to scale new
horizons while advancing national priorities and delivering
sustainable impact.

NOTES ON SUBSIDIARIES

The following may be read in conjunction with the
Consolidated Financial Statements of your Company
prepared in accordance with Indian Accounting Standard 110.
Shareholders desirous of obtaining the Report and
Accounts of your Company's subsidiaries may obtain the
same upon request. Further, the Report and Accounts
of the subsidiary companies is also available under the
'Investor Relations' section of your Company's website,
www.itcportal.com, in a downloadable format. Your
Company's Policy for determination of a material subsidiary,
as adopted by your Board, in conformity with Regulation 16
of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations 2015,
can be accessed on your Company's corporate website at

https://www.itcportal.com/material-subsidiary-policy.

Presently, your Company does not have any material
subsidiary.

Surya Nepal Private Limited

Nepal's GDP grew by 3.7% during the fiscal year ended
July 2024, on a low base of 2% in the previous year, led
mainly by uptick in agriculture, hydro power and tourism
sectors. However, growth in the Nepalese economy
continues to be challenging amidst subdued economic
activities resulting from weak consumer demand and
sluggish private and public sector investments.

The economy saw a modest recovery this fiscal year with
an accommodative monetary policy and consumer price
inflation moderating to 4.6% for the first 9 months of the
fiscal year as compared to 5.9% in the previous year.
Inward remittances, which significantly contribute to
economic growth, stand at appx. 25% of the national GDP,
grew by 10.0% in the first 9 months, albeit at a slower
pace than the previous year. Strong inward remittances,
low interest rates and moderate inflation are expected
to lead to gradual recovery in private consumption and
consumer demand.

The Government of Nepal has recently introduced several
reforms to enhance investments, strengthen governance,
public service delivery, ease of doing business etc.,
which are steps in the right direction. Further measures
aimed at encouraging domestic and foreign investments,
incentivising the manufacturing sector to enable import
substitution and job creation, supporting the hospitality
sector with its large economic multiplier effect, on-ground
implementation of reforms and promulgation of
industry-friendly policies remain key imperatives for
achieving sustained economic growth.

The legal cigarette industry provides livelihoods to over
five lakh individuals involved in tobacco cultivation,
manufacturing & trade and makes a significant contribution
to the revenue collection of the Government of Nepal.
Despite its far-reaching economic impact, the legal
cigarette industry continues to face significant challenges
from an increasingly punitive and discriminatory taxation
and regulatory regime. The company continues to
engage with policy makers for equitable, pragmatic,
evidence-based regulations and taxation policies that
balance the economic imperatives of the country and
tobacco control objectives.

The company demonstrated resilient performance
during the year despite subdued consumer demand.
The Cigarettes business reinforced its market standing by
leveraging its robust portfolio, superior product quality and
wide distribution network. A differentiated and innovative
offering under 'Surya Fusion' brand was launched
during the year, which further fortified the company's
product portfolio.

The company's manufacturing systems continued to
set new benchmarks in responsiveness, quality and
productivity. Various initiatives, such as the manufacture
of new product formats, and process automation were
implemented during the year. Relentless focus on
developing world-class products anchored on innovation
and benchmarked to international quality standards
remain the key sources of sustainable competitive
advantage for the company.

During the year, the company leveraged its distribution
reach to scale up availability of 'Sunfeast Dark Fantasy
Choco Fills' biscuits, which had been launched in the
previous year. Focused investments towards brand
building supplemented the distribution scale up and
enabled the brand to achieve premium positioning in the
market. 'Sunfeast Dark Fantasy Mocha Fills', launched
during the year, also elicited positive consumer response.

In the Confectionery business, the company augmented
its product range through new launches such as
'Sunfeast Dark Fantasy Choco Rolls', Toffichoo Coffee Delite'
and 'Minto Honey Lemon Ginger'. Focused investments
continue to be made towards enhancing market
standing. Capacity utilisation at the company's
state-of-the-art manufacturing facility in Biratnagar is also
being progressively ramped up.

The company's wholly owned subsidiary,
Surya Nepal Ventures Private Limited, engaged in
manufacturing and sales of agarbattis, continued to
strengthen its market standing leveraging its differentiated
product portfolio, sharply focused marketing investments
and best-in-class product availability across target
markets. The company entered the dhoop segment under
the 'Mangaldeep' brand during the year. The product
range has received encouraging consumer response.

The company continues to make multi-dimensional
contributions towards building the societal and economic
capital of Nepal. In line with applicable regulations and

CSR policy, the company carried out initiatives under
four distinct CSR Platforms, namely, Surya Nepal Asha,
Surya Nepal Prakriti, Surya Nepal Adharshila and
Surya Nepal Gatha during the year. Key interventions
include:

-    providing assistance to farmers in areas proximal to
the company's operations,

-    creation of agri-infrastructure such as vermicompost
pits, harvesting sheds etc.,

-    providing training to improve productivity and
enhance income generation for farmers through
animal husbandry,

-    improvement in the quality of education in public
schools in the vicinity of the company's operating
locations,

-    development of public infrastructure in the catchment
areas of operating locations,

-    assistance in various environment preservation
measures like urban plantation and preservation of
biodiversity,

-    support in organising the largest Nepali literature
festival and assistance in promotion and revival of
the local Nepali folk musical instrument - 'Sarangi'
through various training programs and workshops.

During the year, the company recorded Revenue
from Operations of NRs. 5293 crores (previous year
NRs. 4979 crores) and Net Profit of NRs. 1172 crores
(previous year NRs. 1118 crores) on a consolidated basis.

The company declared a dividend of NRs. 273 per equity
share of NRs. 50 ⁹ each for the year ended 15th July, 2024
(31st Asadh, 2081), amounting to NRs. 1101 crores
(previous year NRs. 563 per equity share of NRs. 100 each
amounting to NRs. 1135 crores).

The company continues to be one of the largest contributors
to the exchequer in Nepal and is well-positioned
to consolidate its leadership position by leveraging its
robust portfolio of products, deep & wide distribution
network, best-in-class manufacturing facilities and

execution excellence. The company continues to explore
opportunities to rapidly scale-up the newer FMCG
businesses and evaluate emerging opportunities in
this space.

ITC Infotech India Limited and its subsidiaries

The global IT industry continued to be impacted
by heightened uncertainty and volatility in the
macro-economic environment, exacerbated by
geo-political dynamics. As per NASSCOM estimates, the
Indian IT Services industry grew by 4.3% in FY 2024-25
led by A I, cloud-native technologies and cybersecurity
services.

Against the backdrop of subdued industry growth,
the company delivered robust performance with
consolidated revenues growing by 13.8% over the
previous year. The company remained aligned with the
changing business priorities of its customers and achieved
strong growth in key customer accounts by collaborating
in their development and transformation initiatives.
Clients are increasingly seeking strategic partners to
streamline their portfolio of services and enhance cost
efficiencies. The company continues to effectively address
such requirements by leveraging its integrated global
service delivery structure and strengthening operational
efficiencies through a structured delivery excellence
framework, employing a metrics-driven approach.

The company continues to invest in institutionalising
delivery excellence and building future-ready capabilities
in key focus areas. During the year, the company formed
a Technology Center of Excellence (CoE) in Bengaluru to
serve as an incubation centre to build capabilities in next
generation technologies, and a state-of-the-art Global AI
Centre of Excellence in Kolkata to develop cutting-edge
solutions. The company has also invested in building its
AI capabilities and created GenAI powered platforms &
accelerators, offering unique proposition to clients.

In recent years the company has focused on building
offerings and creating assets around capabilities like
'CIO 360 - Run the Business' platform, Hotels-in-a-Box
and Digital Manufacturing, S4/HANA, Digital Workplace,
Hyper Automation, Adobe D2C, ServiceNow and
Cybersecurity.

Towards enhancing its Cloud service capabilities,
the company acquired Blazeclan Technologies Private
Limited (Blazeclan), a leading Cloud consulting firm,
during the year. Blazeclan has well-established
capabilities in Cloud transformation, with expertise
in Cloud Migration, Digital Services, Digital Cloud
Consulting and Data Analytics & Insights across AWS,
Azure and GCP platforms. The company has created a
new 'Cloud services' line combining cloud professionals
from both companies to provide high quality, scalable and
secure cloud solutions and assist clients in their digital
modernisation and transformation journeys.

The company's investments in building technology-led
solutions and offerings in future-focused areas were
acknowledged in global benchmarking reports by leading
analyst firms. During the year, the company was recognised
as 'Disruptor' across several Avasant RadarView™
service provider benchmarking reports, including
'Digital CX Services', 'Data Management and Advanced
Analytics', 'End-user Computing', 'Digital Workplace',
'Intelligent Automation' and 'Travel, Transportation &
Hospitality Digital Services'. The company was
recognised as 'Rising Star' in the 'Data Modernisation
Services-Midsize' and 'Advanced BI & Reporting
Modernisation-Midsize' quadrant in ISG provider lens™
research report on Advanced Analytics and AI services.

Attracting, training and retaining high-quality talent,
particularly in niche and future-focused technologies
remain a key priority for the company to succeed in the
global IT Services industry. The company continues to
foster an employee-centric and high-performance work
culture driving holistic well-being and growth as part of its
comprehensive employee value proposition. Leadership
strength continues to be built through curated leadership
development programs and strengthen employee
competencies through domain & technology-led training
and career development programs. The company has
initiated an extensive AI training programme covering over
9,000 employees to create an AI-proficient workforce.

During the year, the company's consolidated Revenue
from Operations stood at ' 4244.83 crores (previous
year ' 3730.23 crores). Net Profit for the year was
' 449.82 crores (previous year ' 463.13 crores) after
considering costs related to the Blazeclan acquisition,
and investments towards business growth and
capability building.

For the year under review:

a.    ITC Infotech India Limited recorded Revenue from
Operations of ' 3204.32 crores (previous year
' 2869.29 crores) and Net Profit of ' 466.62 crores
(previous year ' 382.21 crores). The company
paid a total dividend of ' 53.75 per Equity Share of
' 10/- each aggregating ' 488.32 crores (previous year
' 55.50 per Equity Share of ' 10/- each aggregating
' 488.40 crores).

b.    ITC Infotech Limited, UK, a wholly-owned subsidiary of
the company, recorded Revenue of GBP 28.80 million
(previous year GBP 34.11 million) and Net Profit of
GBP 1.33 million (previous year GBP 1.49 million).

c.    ITC Infotech (USA), Inc., a wholly-owned subsidiary
of the company, together with its wholly-owned
subsidiary Indivate Inc., recorded Revenue of
US$ 160.71 million (previous year US$ 158.58 million)
and Net Profit of US$ 6.53 million (previous year
US$ 6.69 million).

d.    In the recent past, ITC Infotech India Limited has
also set up subsidiary companies in Brazil, Mexico,
France, Germany, Italy, Malaysia and Saudi Arabia.
Please refer to Form AOC-1 (Statement containing
salient features of the financial statements of
Subsidiaries / Associate companies / Joint Ventures),
forming part of the Report and Accounts, for details
on financial performance of these companies.

e.    The consolidated results of the company include
Revenue of ' 98.43 crores and Net Loss of
' 3.38 crores recorded by Blazeclan Technologies
Private Limited and its wholly owned subsidiaries
post 1st October, 2024, i.e. the date of acquisition.
Consequent to the acquisition, 10 wholly owned
subsidiaries of Blazeclan across several countries
including Singapore, Australia, Malaysia, Belgium,
New Zealand, USA, Canada and Philippines have
become step down subsidiaries of the company.

Going forward, ITC Infotech seeks to augment its portfolio
of technology offerings across select industry verticals,
develop new platforms & accelerators and strengthen its
alliance ecosystem through partnerships with hyperscalers
and platform providers in identified capability areas such
as GenAI, Digital, Data & Analytics, Cloud, Infrastructure
Services and ERP Systems. Strategic interventions

are planned towards building a robust talent supply
chain with focus on employee-centricity and fostering a
high-performance culture.

The company is well poised to craft the next horizon of
growth in the years ahead driven by focused strategies
to identify go to market opportunities, building capabilities
through platforms and offerings and capacity building to
drive scale.

Technico Agri Sciences Limited

During the year under review, potato production in India
stood at 57 million MT, representing a decline of 5% over
the previous year. Lower potato production resulted in a
significant rise in potato prices during the year.

Leveraging its institutional strengths and strong brand
value, the company continued to enhance its market
standing by entering new potato growing markets and
expanding presence in existing ones. The company's
second greenhouse facility, located at Panchkula, was
commissioned during the year to augment capacity and
service the growing demand from institutional customers.

The company's leadership in production of early generation
seed potatoes and strength in agronomy continue
to support the 'Bingo!' range of potato chips of your
Company and in servicing the seed potato requirements
of the farmer base of your Company's Agri Business.

The company's Revenue from Operations stood at
' 383.68 crores (previous year ' 323.95 crores) with
Net Profit of ' 83.76 crores (previous year ' 37.81 crores).
Total Comprehensive Income for the year stood at
' 83.71 crores (previous year ' 37.82 crores).

The company continues to leverage its deep domain
expertise, strengthen relationships with global seed
breeders and farmers to introduce high yield and climate
resilient seed varieties to fortify its leadership position in
the seed potato industry.

Technico Pty Limited and its subsidiaries

The company continues to focus on upgradation
and commercialisation of its TECHNITUBER® Seed
Technology and customising the agronomy practices
for deployment across various geographies. Further,
the company is also engaged in the marketing of
TECHNITUBER® seed produced at the facilities of its

subsidiary in China and Technico Agri Sciences Limited,
India, a wholly-owned subsidiary of your Company, to
global customers. For the year under review:

a.    Technico Pty Limited, Australia registered a turnover
of Australian Dollars (A$) 2.86 million (previous year
A$ 1.69 million) and a Net Profit of A$ 1.51 million
(previous year A$ 0.81 million).

b.    Technico Technologies Inc., Canada has wound
down its seed business operations and is exploring
other business opportunities in Canada.

c.    Technico Asia Holdings Pty Limited, Australia, and
Technico Horticultural (Kunming) Co. Limited, China -
there were no significant events to report with respect
to the above companies.

Wimco Limited

The company's business activities comprise fabrication
and assembly of machinery for tube filling, cartoning,
wrapping, material handling including conveyor
solutions and engineering services for the FMCG and
Pharmaceutical industries.

During the year, the company monetised the value
of certain identified assets relating to the engineering
business thereby strengthening its Balance Sheet.

The company's Revenue from Operations for the year
stood at ' 2.60 crores (previous year: ' 3.47 crores)
with a Net Profit of ' 1.45 crores (previous year loss of
' 1.88 crores). Total Comprehensive Income for the year
stood at ' 1.45 crores (previous year (-) '1.93 crores).

North East Nutrients Private Limited

Your Company holds 76% equity stake in North East
Nutrients Private Limited, which has set up a food
processing facility in Mangaldoi, Assam, to cater to the
biscuits market in Assam and other north-eastern states.

The company continues to focus on consistently improving
operational efficiency and productivity. In recognition of
its high standards of quality, the company received three
Gold Awards at the Convention on Quality Concepts 2024,
organised by the Quality Circle Forum of India,
Durgapur Chapter. The company also received one
Gold and one Silver Award at the National POKA-YOKE
competition and a Silver Award in the FACE Food Safety
& Quality Kaizen Competition, 2024 organised by CII.

The company's Revenue from Operations for the year
stood at ' 158.87 crores (previous year ' 154.07 crores),
while Net Profit for the year was ' 13.63 crores (previous
year ' 14.90 crores). Total Comprehensive Income
for the year stood at ' 13.60 crores (previous year
' 14.89 crores).

For FY 2024-25, the Board of Directors of the company
has recommended a final dividend of ' 2.00 per
equity share of ' 10 each, aggregating ' 14.60 crores
(previous year final dividend of ' 2.00 per equity share of
' 10 each, aggregating ' 14.60 crores).

ITC IndiVision Limited

The company is engaged in manufacture and export
of nicotine and nicotine derivative products. The
company's manufacturing facility, situated near Mysuru
has the capability to produce purest nicotine derivatives
conforming to US and EU pharmacopoeia standards.
The company undertook extensive product development
initiatives, customer trials and business development
efforts and is well poised to rapidly scale up business
going forward.

During the year, the company recorded Total Income of
' 10.51 crores (previous year ' 1.19 crores) and Net Loss
of ' 55.56 crores (previous year loss of ' 31.12 crores),
primarily on account of gestation costs and depreciation.

ITC Fibre Innovations Limited (IFIL)

The company manufactures Moulded Fibre Products
made from renewable natural fibres such as wood and
offers sustainable solutions across industries including
food service & delivery, FMCG and electronics.

Commercial production at the company's state-of-the-art
manufacturing facility at Badiyakhedi, Madhya Pradesh
commenced in March 2024.

During the year, the company obtained multiple
certifications affirming that its products are food contact
safe and environment friendly and conform with the
requirements under US Food and Drug Administration,
German Federal Institute for Risk Assessment and Indian
FSSAI regulations. These certifications enable IFIL
to differentiate its offerings with both domestic and
international customers. The commercial sales were
scaled up during the year post extensive product

development efforts and customer trials. Going forward,
IFIL will leverage the expertise of the Business in fibre
value chain, manufacturing excellence and strong
sustainability credentials to rapidly scale-up business
with continued focus on developing innovative plastic
substitution solutions. During the year ended
31st March 2025, the company recorded Total Income
of ' 4.61 crores (previous year ' 1.26 crores) with
Net Loss of ' 21.41 crores (previous year loss of
' 3.56 crores), primarily on account of gestation costs
and depreciation.

Russell Credit Limited

The company recorded Total Income of ' 71.91 crores
(previous year ' 60.91 crores) and Net Profit of
' 47.49 crores (previous year ' 39.39 crores). Growth in
Total Income was driven by higher surplus liquidity and
increase in yield of the funds deployed on account of
higher market interest rates.

During the year, the company transferred its investments
in EIH Limited and HLV Limited to your Company at their
respective cost of acquisition which led to reversal of
the mark-to-market gain on the said investments. As a
result, Total Comprehensive Income for the year stood at
(-) ' 484.29 crores (previous year ' 442.67 crores).

Temporary surplus liquidity of the company is mainly
deployed in bonds, debt mutual funds, bank fixed
deposits, certificate of deposits, etc. The company
continues to closely monitor its investments in line with
market interest rate movements and explore opportunities
to make strategic investments for the ITC Group.

For FY 2024-25, the company declared final dividend
of ' 0.36 per Equity Share of ' 10 each, aggregating
' 23.27 crores (previous year final dividend of
' 0.30 per Equity Share of ' 10 each, aggregating
' 19.39 crores).

Gold Flake Corporation Limited

The company holds 50% equity stake in ITC Filtrona Limited.

During the year, the company recorded Total Income of
' 25.11 crores (previous year ' 24.82 crores) and Net Profit of
' 23.80 crores (previous year ' 23.12 crores). The company
declared interim dividend of ' 14.10 per Equity Share of

' 10 each, aggregating ' 22.56 crores (previous year
' 14.10 per Equity Share of ' 10 each, aggregating
' 22.56 crores).

Greenacre Holdings Limited

The company provides maintenance services for
commercial office buildings, EPC (engineering,
procurement, construction) management services as well
as project management consultancy services.

During the year, the company recorded Total Income of
' 13.46 crores (previous year ' 11.61 crores) and
Net Profit of ' 7.23 crores (previous year ' 2.82 crores).

ITC Integrated Business Services Limited

The company is in the business of providing support to the
Business Shared Services operations of your Company
and its related entities.

During the year, the company recorded Total Income
of ' 21.50 crores (previous year ' 12.78 crores) and
Net Profit of ' 1.41 crores (previous year ' 0.60 crore).

MRR Trading & Investment Company Limited

The company, a wholly-owned subsidiary of
ITC Integrated Business Services Limited, holds
tenancy rights in a commercial building located in
Mumbai and also provides estate maintenance services.
During the year, the company recorded Total Income of
' 7.58 lakh (previous year ' 7.38 lakh) and Net Profit of
' 0.41 lakh (previous year ' 0.66 lakh).

Pavan Poplar Limited

The operations of the company continue to be adversely
impacted pursuant to the Order of the Honourable High Court
of Uttarakhand at Nainital in February 2014 dismissing
the Writ Petition filed by the company against the
Order of the District Magistrate authorising the
State authorities to take possession of the land leased to
the company. The company had filed an appeal against
the aforementioned order of the Honourable High Court
in 2014, which has been pending adjudication.

Considering the time and resources involved, the company
has since withdrawn the said appeal with the approval of the
Honourable High Court on 7th March 2025. During the year,
the company recorded Total Income of ' 0.18 crore

(previous year ' 0.14 crore) and Net loss of ' 0.03 crore
(previous year loss of ' 0.03 crore).

Prag Agro Farm Limited

The operations of the company continue to be adversely
impacted pursuant to the Order of the Honourable
High Court of Uttarakhand at Nainital in February 2014
dismissing the writ petition filed by the company against
the Order of the District Magistrate authorising the
State authorities to take possession of the land leased to
the company. The company had filed an appeal against
the aforementioned order of the Honourable High Court
in 2014, which has been pending adjudication.

Considering the time and resources involved, the company
has since withdrawn the said appeal with the approval of
the Honourable High Court on 7th March 2025. During the
year, the company recorded Total Income of ' 0.10 crore
(previous year ' 0.10 crore) and Net loss of ' 0.09 crore
(previous year loss of ' 0.02 crore).

NOTES ON JOINT VENTURES

ITC Filtrona Limited (formerly known as ITC Essentra
Limited) - a joint venture of Gold Flake Corporation
Limited

The company delivered resilient performance during the
year amidst continued volatility in the supply chain for
certain input materials.

The company sustained its leadership position in the
industry consolidating its status as the preferred supply
chain partner for several well-known national brands.
The company continues to leverage its core strengths
of focused innovation, best-in-class quality, consistent
delivery and strong customer relationships.

The company continues to partner with its customers and
invest in technology upgradation and capability building
towards sustaining its position as the 'innovation and
quality benchmark' in the Indian cigarette filter industry.

During the year ended 31st March, 2025, the company's
Revenue from Operations stood at ' 761.34 crores
(previous year ' 743.45 crores). Net Profit during the year
stood at ' 83.85 crores (previous year ' 80.80 crores).

The Board of Directors of the company has recommended
a dividend of ' 125 per equity share of ' 10 each
for the year ended 31st March, 2025 (previous year
' 100 per equity share).

Logix Developers Private Limited is a joint venture
between your Company and Logix Estates Private Limited
for developing a luxury hotel-cum-service apartment
complex at the company's leasehold site located at
Sector 105 in New Okhla Industrial Development Authority
(NOIDA).

Your Company presently holds 27.9% equity stake in
LDPL. As reported in prior years, your Company reiterated
its position with the JV partner that it was committed
to developing a luxury hotel-cum-service apartment
complex as envisaged under the JV Agreement and that
it was not interested in progressing with any alternative
project plans proposed by the JV partner. However, the
JV partner refused to progress the project and instead
expressed its intent to exit from the JV by selling its
stake to your Company. Subsequently, the JV partner
proposed that both parties should find a third party to
sell the entire shareholding in LDPL. In view of these
developments, your Company had filed a petition before
the erstwhile Company Law Board submitting that the
affairs of the JV entity were being conducted in a manner
that was prejudicial to the interest of your Company and
the JV entity. The matter is currently before the National
Company Law Tribunal (NCLT). The JV partner had also
filed a petition before the Honourable Delhi High Court for
winding up the JV company, which was transferred to the
NCLT by the Honourable Delhi High Court. The matter
was heard before the NCLT on several occasions in the
past but could not be concluded. On 21st January, 2020,
the matter was assigned to a new bench, post which
hearings on the matter are being held.

In July 2022, LDPL received a communication from NOIDA
authorities intimating cancellation of the sub-lease for the
land on which the project was to be constructed on account
of non-payment of lease instalments and non-fulfilment
of the conditions of the sub-lease, including forfeiture
of the amount deposited. The company is evaluating all
options to pursue its rights in the matter. Consequently,
as a matter of prudence, the company had derecognised
the leasehold land/assets as well as adjusted/reversed
the lease liabilities towards NOIDA in accordance with the
terms of the sub-lease deed, in its financial statements for
the year ended 31st March 2022.

During the year ended 31st March, 2025, the company
recorded a Net Profit of ' 0.25 crore (previous year
' 0.22 crore). The Net Worth of the company stood at
' 5.57 crores as at 31st March, 2025 (previous year
' 5.32 crores).

Your Company's total investment in LDPL was
' 41.95 crores. Your Company had made provision of the
entire investment amount as diminution in the carrying
value of investment in the previous years and consequently
the carrying value of your Company's investment in LDPL
as at 31st March, 2025, is Nil.

The financial statements of LDPL for the year ended
31st March, 2025, are yet to be approved by its
Board of Directors. In the absence of audited financial
statements of LDPL, the Consolidated Financial
Statements of your Company for the year ended
31st March, 2025, have been prepared based on the
financial statements prepared by the management
of LDPL.

NOTES ON ASSOCIATES
ITC Hotels Limited

ITC Hotels Ltd. (ITCHL) was incorporated as a
wholly-owned subsidiary of your Company in July,
2023. The Board of Directors of your Company and
ITC Hotels Limited, had on 14th August, 2023
approved, subject to necessary statutory and regulatory
approvals, the Scheme of Arrangement amongst your
Company and ITC Hotels Limited and their respective
shareholders and creditors ('Scheme') for demerger
of the Hotels Business (as defined in the Scheme)
of your Company on a going concern basis.
The Scheme was approved by the Honourable National
Company Law Tribunal, Kolkata Bench vide its
order dated 4th October, 2024.

Pursuant to the Scheme, the Hotels Business of
your Company (along with all assets and liabilities
thereof, excluding    ITC Grand Central,    Mumbai)

and the investments held in hospitality entities i.e.
Fortune Park Hotels Limited, Bay Islands Hotels Limited,
Landbase India    Limited, WelcomHotels Lanka

(Private) Limited,    Srinivasa Resorts    Limited,

International Travel House Limited, Gujarat Hotels Limited

and Maharaja Heritage Resorts Limited have been
transferred to ITCHL on a going concern basis from the
Effective Date i.e., 1st January 2025. ITCHL issued and
allotted equity shares to the shareholders of your Company
as per the share entitlement ratio provided in the Scheme
and consequently your Company holds 39.88% stake in
ITCHL as at 31st March 2025. Consequently, ITCHL has
become an Associate of your Company.

ITCHL is amongst the fastest growing hospitality
chains in the country with over 140 properties and
13,300 rooms under multiple brands catering to different
market segments. ITCHL is recognised for its portfolio of
world-class properties, iconic bouquet of brands, cuisine
expertise and service excellence. Anchored on the ethos
of 'Responsible Luxury', ITCHL is a global exemplar in
sustainable hospitality.

The company delivered robust performance during
the year clocking record high revenue and profits.
Room revenues recorded strong growth driven by
broad-based performance across segments. Occupancy
and Average Daily rate (ADR) witnessed robust growth
on the back of sustained demand across key markets and
smart revenue management.

ITCHL continues to pursue an 'asset-right' growth strategy
to drive growth while reducing capital intensity of operations
by focusing on strong partnerships with asset owners,
leveraging brand credentials and providing operational
expertise. A substantial part of incremental room
additions is expected to accrue through management and
franchising contracts going forward. The company is also
progressing investments towards scaling up its portfolio
of owned hotel rooms. A greenfield project is underway
at Puri, Odisha and a new block is under construction at
the existing Welcomhotel in Bhubaneshwar. ITCHL also
seeks to leverage its strategic land bank to enhance the
portfolio of owned hotels.

The hospitality sector in India is poised to grow rapidly
in the years ahead driven by growing per capita income,
rapid urbanisation, increasing societal aspirations and
low room supply penetration. ITCHL is well placed to
craft its next horizon of growth as a pure-play hospitality
entity leveraging your Company's institutional strengths,
strong brand equity and goodwill.

Delectable Technologies Private Limited (Delectable)
is, inter alia, engaged in the sale of FMCG products
leveraging app-based technology through vending
machines, primarily installed across office locations.

The total investment of the Company in Delectable stands at
' 11 crores for a 39.3% stake, on a fully diluted basis.

Delectable has significantly scaled down its operations
during the year. Your Company has divested its holding in
Delectable in May 2025.

Sproutlife Foods Private Limited

Sproutlife Foods Private Limited (Sproutlife) operates
in the fast growing, nutrition-led health food space with
a diversified product portfolio across multiple categories
including protein bars, breakfast cereals, nutraceuticals
etc. under the 'Yogabar' brand.

During the year, your Company invested ' 30 crores in
Sproutlife, consequent to which your Company's stake
now stands at 47.50% (previous year 44.74%) on a fully
diluted basis. Cumulative investment in Sproutlife stands
at ' 255 crores as at 31st March, 2025.

Sproutlife continues to register robust growth across its
target markets in its core categories of Bars, Muesli and
Oats; product portfolio was augmented during the year
with the launch of protein drinks and whey protein.

Mother Sparsh Baby Care Private Limited

Mother Sparsh Baby Care Private Limited (Mother Sparsh)
is a premium ayurvedic and natural baby care brand,
which is focused on baby personal care, health & hygiene
and expert baby care. With high quality products, Mother
Sparsh aims to serve the needs of informed new-age
mothers who are making conscious decisions to switch to
superior products for their babies.

The company recorded robust growth during the year
on the back of increasing consumer franchise for its
differentiated product range and entry into the quick
commerce channel.

As at 31st March 2025, your Company held 26.5% stake
in Mother Sparsh on a fully diluted basis at a cumulative
investment value of ' 45 crores.

In April 2025, your Company executed Definitive
Agreements to acquire the balance 73.5% stake in one
or more tranches over a time period of about two to
three years subject to fulfilment of prescribed terms and
conditions.

ATC Limited (an associate of Gold Flake Corporation
Limited)

The company is a contract manufacturer of cigarettes.
The company continues to deliver superior quality
products to its customers while maintaining high levels of
flexibility and agility in its manufacturing operations.

During the year, the company received the 'National
Award for Outstanding Industrial Relations 2023-24' from
All India Organisation of Employers in the MSME category
and the 'Silver Prize in Manufacturing Small Sector'
at the Federation of Indian Chambers of Commerce
and Industry (FICCI) Awards for Excellence in Quality
Systems 2024. The company was also recognised as an
'Energy Efficient Unit' by Confederation of Indian
Industry (CII) and accredited with Social Accountability
Management System Standard SA 8000:2014 by DNV.

Associates of Russell Credit Limited

Russell Investments Limited, Divya Management
Limited and Antrang Finance Limited

The above companies are associates of Russell Credit
Limited. These companies are NBFCs registered with
the Reserve Bank of India and continue to explore
opportunities for strategic investments.

For further details on performance of the above-mentioned
associate companies, please refer to Form AOC-1
(Statement containing salient features of the financial
statements of Subsidiaries / Associate companies /
Joint Ventures), forming part of the Report and Accounts.

INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policy guides the conduct
of affairs of your Company and clearly delineates the
roles, responsibilities and authorities at each level of its
three-tiered governance structure and key functionaries
involved in governance. The ITC Code of Conduct commits
management to financial and accounting policies, systems
and processes. The Corporate Governance Policy and the
ITC Code of Conduct stand widely communicated across

the enterprise at all times and together with the Strategy
of Organisation, Planning & Review Processes and the
Risk Management Framework provide the foundation
for Internal Financial Controls with reference to your
Company's Financial Statements.

Such Financial Statements are prepared on the basis
of the Material Accounting Policies that are carefully
selected by management and approved by the
Audit Committee and the Board. These Policies are
supported by the Corporate Accounting and Systems
Policies that apply to the entity as a whole to implement
the tenets of Corporate Governance and Material
Accounting Policies uniformly across your Company.
The Accounting Policies are reviewed and updated from
time to time. These, in turn, are supported by a set of
Divisional policies and Standard Operating Procedures
(SOPs) that have been established for individual
Businesses.

Your Company uses Enterprise Resource Planning
(ERP) systems as a business enabler and also to
maintain its books of accounts. The SOPs, in tandem
with transactional controls built into the ERP systems,
ensure appropriate segregation of duties, tiered approval
mechanisms and maintenance of supporting records.
The Information Management Policy reinforces the
control environment. The systems, SOPs and controls
are reviewed by Divisional management and audited by
Internal Audit, whose findings and recommendations are
reviewed by the Audit Committee and tracked through till
implementation.

Your Company has in place adequate internal financial
controls with reference to the Financial Statements.
These have been designed to provide reasonable
assurance with regard to recording and providing reliable
financial information; complying with applicable statutes;
safeguarding assets from unauthorised use; ensuring that
transactions are carried out with adequate authorisation
and complying with Corporate Policies and Processes.
Such controls have been assessed during the year, after
taking into consideration the essential components of
internal controls stated in the Guidance Note on Audit
of Internal Financial Controls over Financial Reporting
issued by The Institute of Chartered Accountants of
India. Based on the results of such assessment carried
out by management, no reportable material weakness or
significant deficiency in the design or operation of internal

financial controls was observed. Nonetheless, your
Company recognises that any internal control framework,
no matter how well designed, has inherent limitations and
accordingly, regular audit and review processes ensure
that such systems are reinforced on an ongoing basis.

RISK MANAGEMENT

As a diversified enterprise, your Company 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 opportunities in domestic and international
markets, developing capabilities and competencies for
the future in order to enhance competitiveness and win
in the markets of tomorrow. Accordingly, management of
risk has always been an integral part of your Company's
'Strategy of Organisation' and straddles its planning,
execution and reporting systems & processes.
Backed by strong internal control systems, the current
Risk Management Framework consists of the following
key elements:

-    The Corporate Governance Policy, approved
by the Board, clearly lays down the roles and
responsibilities of the various entities in relation to
risk management covering a range of responsibilities,
from the strategic to the operational. These role
definitions, inter alia, provide the foundation for
appropriate risk management procedures, their
effective implementation across your Company
and independent monitoring and reporting by
Internal Audit.

-    The Risk Management Committee, constituted
by the Board, monitors and reviews the strategic
risk management plans of your Company as a whole
and provides necessary directions on the same.

-    The Corporate Risk Management Cell, through
focused interactions with Businesses, facilitates
the identification and prioritisation of strategic and
operational risks, development of appropriate
mitigation strategies and conducts periodic reviews of
the progress on the management of identified risks.

-    A combination of centrally issued policies and
Business-specific procedures bring robustness to the
process of ensuring that business risks are effectively
addressed.

-    Appropriate structures are in place to proactively
monitor and manage the inherent risks in businesses
with unique or relatively high risk profiles.

-    Foreign currency exposures continue to be managed
within the framework of the Forex Manual.

-    A strong and independent Internal Audit function at
the Corporate level carries out risk focused audits
across all Businesses, enabling identification of areas
where risk management processes may need to be
strengthened. The Audit Committee of the Board
reviews Internal Audit findings and provides strategic
guidance on internal controls. The Audit Compliance
Review Committee closely monitors the internal
control environment within your Company including
implementation of the action plans emerging out of
internal audit findings.

-    At the Business level, Divisional Auditors continuously
verify compliance with laid down policies and
procedures and help plug control gaps by assisting
operating management in the formulation of control
procedures.

-    A robust and comprehensive framework of strategic
planning and performance management ensures
realisation of business objectives based on effective
strategy implementation. The annual planning
exercise requires all Businesses to clearly identify
their top risks and set out a mitigation plan with
agreed timelines and accountabilities. Businesses
are required to confirm periodically that all relevant
risks have been identified, assessed, evaluated and
that appropriate mitigation measures have been
implemented.

Your Company endeavours to continuously sharpen
its Risk Management systems and processes in
line with a rapidly changing business environment.
All Businesses of your Company have adopted the
ISO 31000 Risk Management Standard; risk management
systems and processes prevalent in the Businesses have
been independently assessed to be compliant with the
same. The centrally anchored initiative of conducting
independent external reviews of key business processes
with high 'value at risk' continued during the year.
These interventions continue to provide further assurance
on the robustness of risk management practices prevalent
in your Company.

Recognising Digital as a megatrend shaping the future,
your Company remains focused on building a dynamic
'Future-Tech' enterprise powered by advanced digital
technologies and infrastructure across the value chain.
Your Company's digital transformation journey is also
resulting in changes in its risk profile marked by a
heightened cyber threat environment. The cybersecurity
landscape is constantly evolving, characterised by
a diverse array of threats that target individuals,
organisations, and critical infrastructure. Cybercriminals
are employing increasingly sophisticated tactics, such as
ransomware, phishing and advanced persistent threats,
to exploit vulnerabilities and gain unauthorised access to
sensitive data.

Your Company has a multi-tiered cybersecurity defence
strategy that includes firewalls, antivirus and anti-malware
systems to prevent, detect and respond to cyber incidents.
These defence mechanisms are implemented at various
access and data processing points, including endpoints,
data centres, network perimeters and cloud instances.
To further enhance user awareness, your Company has
established a comprehensive digital cybersecurity training
program for all employees.

The Cyber Security Committee of your Company, chaired
by the Chief Digital and Information Officer (CDIO),
establishes best practices, monitors the cybersecurity
posture, and defines strategic priorities to ensure secure
and reliable services in a rapidly evolving digital landscape.
Your Company's cybersecurity practices are guided by
several international frameworks and standards, such as
NIST and ISO 27001.

During the year, your Company operationalised the
Advanced Cyber Security Operations Centre (SOC)
equipped with state-of-the-art capabilities including
AI-driven threat intelligence from multiple sources.
Tabletop exercises have been conducted to improve
incident response capabilities for the Cyber Security
Incident Response team, under the leadership of the Chief
Information Security Officer (CISO). Further, the SOC
is being augmented with behavioural anomaly detection
capabilities to enhance threat detection.

In response to the progressive migration of workloads
to the Cloud, your Company has adopted a zero trust
architecture and has established a digital-ready, cloud-
secure wide area network - ITC Digibahn. This network

ensures that all authorised users can access fast, reliable,
and secure connections from any location, on any device,
at any time. Your Company is also upgrading both endpoint
and email security by adopting best-in-class technologies
to enhance protection against external threats.

The growing integration and convergence of Information
Technology (IT) and Operational Technology (OT) within
Industrial Control Systems significantly increases the risk of
cyber-attacks. Accordingly, a comprehensive OT Security
policy has been established across all Businesses and an
assessment of IT and OT security maturity is conducted at
least once in two years.

The use of Artificial Intelligence (AI) is becoming
increasingly prevalent in various business domains. In this
regard, your Company has adopted a range of security
best practices, including an approved list of generative
AI tools and platforms, a data management framework,
mandatory proof of concept (POC) requirements, data
privacy controls, ethical AI usage guidelines, and user
awareness training.

India ranks among the most vulnerable countries in the
world in terms of climate change impact. As part of its
Sustainability 2.0 vision, your Company is pursuing a
m ulti -pronged cl i m ate strategy that entai l s extensi ve
decarbonisation and building resilience against climate
risk across the value chain.

Your Company's low carbon growth approach focuses
on increasing the share of renewable energy, improving
energy productivity, construction of green buildings,
greening logistics, optimising 'distance-to-market' and
promoting regenerative agriculture practices in agri-value
chains, thus enabling transition to a net zero economy.
Simultaneously, your Company is actively working
towards climate-proofing its operations and agricultural
value chains by using state-of-the-art climate risk
modelling techniques and developing site-specific risk
mitigation strategies. Your Company's approach towards
water stewardship is aligned with the Alliance for Water
Stewardship Standard, a globally recognised framework
for assessing the efficacy of water management across
water stressed sites. Further, your Company recognises
that the preservation and nurturing of biodiversity is

crucial for long-term sustainability of its business and is
committed to conducting its operations in a manner that
protects, conserves and enriches biodiversity in line with
the Board-approved Policies on Biodiversity Conservation
and Deforestation.

Your Company sources several commodities for use as
inputs in its Businesses and engages in agri-commodity
trading as part of its Agri Business. In respect of
commodities sourced for use as inputs in its Businesses,
your Company has well laid out strategies to manage
risks arising out of the inherent price volatility associated
with such commodities. This includes robust mechanisms
for monitoring market dynamics towards making informed
sourcing decisions, well defined inventory holding norms
based on considerations such as seasonality and the
strategic nature of the commodity concerned, long-term
contracts with suppliers and continuous diversification
of the supplier base to secure supply of critical items
at competitive costs. Multiple sourcing models, wide
geographical spread, extensive sourcing and supply
chain network and associated infrastructure in key
growing areas coupled with deep-rooted farmer linkages
and use of digital technologies ensure sourcing of high
quality agri-commodities at competitive costs.

In respect of agri-commodity trading, your Company has
a well-defined policy to manage risks associated with
sourcing of such commodities. This includes:

-    segregation of duties and robust internal controls
through a system of checks and balances embedded
in the organisation and governance structure

-    clearly defined limits for trading positions (long and
short) and net cash loss for specific commodities/
commodity groups

-    mitigation of price, liquidity and counter party risks
through hedging on commodity exchanges (mainly
NCDEX) for certain commodities, as applicable.
Correlation between prices prevailing in the physical
market and those on the commodity exchange is
analysed regularly to ensure effectiveness of hedging

-    robust monitoring and review mechanisms of net
open positions and 'value at risk'

- ECGC cover for exports (covering commercial &
political risks) and credit insurance for large domestic
customers.

The combination of policies and processes as outlined
above adequately addresses the various risks associated
with sourcing of commodities for your Company's
Businesses.

Your Company's strategy of backward integration in
sourcing of agri-commodities such as wheat, potato,
fruit pulp, spices, milk and leaf tobacco; in-house
manufacturing of paperboards, paper and packaging
(including pulp production and print cylinder making
facilities); wood procurement from the economic vicinity
of the Bhadrachalam unit, facilitates access to critical
inputs at benchmark quality and competitive cost
besides ensuring security of supplies. Further, each of
your Company's Businesses continuously focuses on
product mix enrichment and yield improvement towards
protecting margins and insulating operations from spikes
in input prices.

The Risk Management Committee met thrice during the
year and was updated on the status and effectiveness of
the risk management plans. The Audit Committee was
also updated on the effectiveness of your Company's Risk
Management systems and policies.

The risk management practices of your Company,
as reviewed through the Risk Management Cell and
Internal Audit processes, have been found to be relevant
and commensurate with the size and complexity of
its operations.

AUDIT AND SYSTEMS

Your Company believes that strong internal control
systems that are commensurate with the scale, scope
and complexity of its operations are concomitant to the
principle of governance that freedom of management
should be exercised within a framework of appropriate
checks and balances.

Your Company remains committed to ensuring a mature
and effective internal control environment that, inter alia,
provides assurance on orderly and efficient conduct of

operations, security of assets, prevention and detection of
frauds/errors, accuracy and completeness of accounting
records and compliance with various regulatory
requirements as applicable.

Your Company's independent and robust Internal Audit
processes, both at the Business and Corporate levels,
provide assurance on the adequacy and effectiveness
of internal controls, compliance with business processes
and procedures, internal policies and regulatory
requirements. The role of Internal Audit is to enhance
and protect organisational value by providing risk-based
assurance, advice and insight, while enabling continuous
improvement of your Company's internal control systems.

The Internal Audit function, comprising professionally
qualified accountants, engineers, and Information
Technology (IT) specialists, is well-equipped and
resourced to provide audit assurances at the highest
levels. Targeted learning and development programmes
on contemporary topics are periodically organised to
enhance knowledge and skill set of the audit team.

The scope and coverage of Internal Audit remains
contemporary and cognises, inter alia, for the rapid
digitalisation of your Company's business operations.
In recent years, Internal Audit has enhanced focus on
systems and controls pertaining to your Company's digital
assets including brand websites, social media handles,
mobile and cloud applications, IT-OT integration, and
protection of sensitive personal data and information.

Information security and cybersecurity have assumed
critical significance with the accelerated adoption of
digital technologies. In this context, periodical reviews
are conducted focusing on assessment of controls
pertaining to confidentiality, integrity and availability of
business information and systems covering general IT
controls and security of your Company's IT Infrastructure.
All systems and policies relating to Information
Management are regularly reviewed and benchmarked to
ensure they remain contemporary. Furthermore, all critical
IT systems undergo pre-implementation audit before being
deployed in the operating environment, thereby providing
assurance regarding the rigour of implementation and
operational readiness.

Aligned with your Company's 'Digital First' strategy,
the Internal Audit function has evolved into an agile,
multi-skilled and technology-enabled function. Processes
within Internal Audit function are continuously enhanced
for greater effectiveness and productivity by utilising
best-in-class tools for audit analytics, intelligent
automation, adoption of new open-source tools and
AI-enabled BOTs. Utilisation of the recently implemented
Digital Audit Management System, a tool for end-to-end
digitisation of audit life cycle, was scaled up during the
year; key enhancements such as 'Agile Audit' module were
introduced to improve efficiency and monitoring across
the assurance process lifecycle. An integrated advanced
data analytics tool has been adopted to enhance auditors'
capabilities with low-code/no-code scripting, automated
data extraction, and analysis of both structured and
unstructured data. In addition, several off-the-shelf tools
were introduced for IT security checks, code reviews and
vulnerability assessments of your Company's websites,
apps, and social media handles.

Qualified engineers within the Internal Audit function
review the design, planning and execution of all ongoing
projects that involve significant expenditure. This
ensures that project management controls are robust
and yield 'value for money'. The Internal Audit function
also leverages state-of-the-art industry-specific tools and
technology to conduct comprehensive project audits.

Your Company's Internal Audit processes are certified
as complying with ISO 9001:2015 Quality Standards.
Further, systems and processes are in accordance with
the Standards on Internal Audit (SIA) issued by The
Institute of Chartered Accountants of India.

The Audit Committee of your Board met twelve times
during the year. The Terms of Reference of the
Audit Committee, inter alia, include reviewing the
effectiveness of the internal control environment,
evaluating your Company's internal financial controls &
risk management systems, and monitoring the
implementation of action plans arising from significant
Internal Audit findings. Material observations, as defined
in the Terms of Reference, are reviewed at the highest
level by the Audit Compliance and Review Committee
(ACRC) and the Audit Committee.

HUMAN RESOURCE DEVELOPMENT

Your Company's thought, strategy and action are inspired
by a larger purpose of being an exemplary Indian enterprise
that not only delivers superior competitive performance,
but also embeds sustainability and inclusiveness at the
core of its Businesses. This approach enables your
Company to delight consumers and customers with a
vibrant portfolio of industry leading products and services
while generating enduring value for the Indian economy
and the larger community of stakeholders. The talent
management strategy of your Company is designed to
attract, retain and develop human capital that enables
your Company to sustain its position as one of India's
most valuable corporations, whilst continuing with its
mission of building a responsible 'Future-Tech' enterprise.
Your Company's employees relentlessly strive to deliver
world-class performance, collaborating with each other
and discharging their role as 'trustees' of all stakeholders.
Your Company is committed to perpetuating vitality -
its growth as a value generating engine and also as an
exemplary institution - so that it continues to succeed in
its relentless pursuit of creating enduring value.

Your Company's Human Resources development
approach spans four key organisational dimensions of
Architecture, Alignment, Agility and Ability which are
supported through strategies crafted in areas such as talent
acquisition, engagement, diversity & inclusion, capability
building, employee relations, performance & rewards and
employee well-being. Through its various talent initiatives
and processes, your Company strives to deliver the value
proposition of 'Building Winning Businesses, Building
Business Leaders and Creating Value for India'. The talent
development practices help create, foster and strengthen
the capability of human capital to deliver critical outcomes
on the vectors of strategic impact, operational efficiency
and capital productivity while reimagining consumer
experience, driving business model transformation and
enhancing employee experience.

Your Company's 'Strategy of Organisation' is designed
to promote agility through a culture and practice of
distributed leadership enabled by a three-tier governance
structure. This is manifested in market and consumer
facing Businesses, which are driven by empowered,
cluster-based teams and supported by shared assets

and capabilities, enabling strategic relevance, speed,
responsiveness, and operational excellence. This
approach allows Businesses, through their Management
Committees, to focus, develop and execute Business
Plans relevant to their product-market spaces while
leveraging the institutional strengths of your Company
and harvesting internal synergies.

The year under review witnessed some softening of the
employment market, reflected in lower attrition and a more
measured approach to remuneration decisions in several
industry sectors. While flexible work arrangements
are now prevalent across industry, there has been a
moderation in application, reflecting a gradual shift
towards an equilibrium. Several global organisations,
with presence in India, have also chosen to review
their Diversity agenda. The adoption and integration of
digitisation and automation tools to enhance productivity
continues. Companies remain committed to prioritising
employee well-being & mental health support.

Your Company's unique employer equity as an exemplary
Indian enterprise creating world-class brands, building
business leaders and generating economic, social and
environmental capital for the Indian economy, continues
to play a pivotal role in the attraction and retention of
high-quality talent. The management trainee programme,
augmented with recruitment of experienced talent from
the market, is an integral part of building a deep pipeline.
Your Company continues to draw the finest management,
technical and commercial talent from premier institutions
in the country and is ranked amongst the leading
companies in these institutions. Intensive engagement
with the country's premier academic institutions over the
years to communicate your Company's talent proposition
through case-study competitions, knowledge-sharing
programmes by senior managers, on-ground exposure
and factory visits for students and the annual internship
programmes have all contributed to creating a compelling
proposition for the best candidates to aspire for a
career with your Company. Your Company continues to
enthuse talent with high-impact roles, competitive and
performance driven remuneration with an emphasis on
long-term incentives, a wealth of learning opportunities,
a commitment to enhancing diversity, equity & inclusion,
an employee-centric climate, well-being focused
infrastructure and support that promotes fellowship and
commitment amongst employees.

Your Company's talent development approach is
founded on the belief that learning initiatives must remain
synergistic and aligned to business outcomes. Your
Company provides managers with contemporary and
relevant learning and development support through a
combination of self-paced e-learning modules, classroom
programmes and application projects with emphasis
on experiential learning, on-the-job assignments and
exposure to nationally and globally renowned faculty.
Deep functional expertise is fostered at early stages of
an employee's career through immersion in complex
problem-solving assignments requiring the application
of domain expertise. These interventions have
helped your Company build and sustain a culture of
application-focused continuous learning, innovation and
collaboration. Managers are assessed on your Company's
behavioural competency framework and provided with
learning and development support to address areas
identified for improvement. Key talent is provided critical
experiences in high-impact roles and mentored by senior
managers, promoting the development of a steady pool of
high-quality talent.

Your Company has identified three capability vectors
for making Businesses future-ready - Leadership
Development, Business Critical Functional Competencies,
and Organisation Identity & Pride. As a part of leadership
development initiatives, the Reflections 360 programme
provides leaders with feedback from team members,
peers and managers, enabling self-driven personal
development. This is supplemented by immersive
workshops and personalised one-on-one coaching being
made available for senior managers.

This approach ensures relevance and impact, thereby
enhancing the capability index of your Company's human
capital. Globally benchmarked curriculum are tailored
to your Company's context, especially in the domains
of Digital Fluency, Data Science, Industrial Analytics,
Brand Marketing and Manufacturing strategy. All these
interventions are delivered through subject matter experts,
domestic and international, and supplemented with
business-critical application projects. Periodic induction
programmes, anchored by senior leaders, enable new
entrants to appreciate your Company's Vision, Mission,
Culture, Values and Strategies while fostering pride in
affiliation with your Company.

Your Company continues to strengthen its performance
management system and its culture of accountability
through widespread adoption of the system of
Management-by-Objectives. Performance planning
through clearly defined goals, outcome-based assessment,
and alignment of rewards for achievement of results
have all contributed to a robust culture of ownership and
accountability. 'Career Conversations' and succession
planning processes have contributed to helping employees
realise their potential, craft their careers while recognising
their strengths and areas of development and ensuring a
sound workforce planning system.

In the spirit of continuous improvement, your Company
maintains a practice of periodically assessing employee
engagement through an entity-wide survey. The recent
survey results of 2024 continue to indicate an improving
trend, on a strong base, with scores increasing in the
range of 10 to 16 percentage points on key dimensions.
96% of employees reported a deep sense of pride and
association with your Company, 94% reported a belief
in your Company's overarching goals & leadership and
94% are optimistic of the future. These engagement
levels reflect in your Company's superior standing
on employee turnover. During the year, a range of
engagement programmes were sustained including
initiatives such as leadership outreach through extensive
communication, recognition programmes acknowledging
exceptional contributions of employees and teams, career
conversations and investments in employee wellbeing.

The year witnessed the Cigarettes Business receiving the
Platinum Award for 'Best Practices in Digitisation in HR'
among Large Manufacturing Sector Companies at the
8th CII National HR Competition 2024. The Personal
Care Business and Foods Business were conferred
FICCI's Women Empowerment Award 2024, under the
category - 'Impactful Care Ecosystem for Employees'.
The Life Sciences and Technology Centre (LSTC) won
the CII Award on 'Excellence for Women in STEM 2024'.
LSTC was the only organisation in the Life Sciences
Sector to be recognised in top 25 companies by CII in
this category.

Your Company's efforts to enhance Diversity, Equity and
Inclusion are founded on the conviction that a diverse
workforce contributes to rich discourse, promotes holistic

perspectives, fosters creative solutions and is integral
to serving customers better while creating value for
all stakeholders. Your Company's policy on Diversity,
Equity and Inclusion articulates and institutionalises
this conviction through concerted actions spanning
three vectors, i.e., Representation, Inclusion & Enablement
and Commitment & Assurance. Your Company is
committed to enhancing gender diversity and participation
of the differently abled in the workforce.

Measures to enhance diversity include ensuring
sufficient representation of women in selection pools
and deployment of the differently abled across suitable
opportunities in the value chain. Through progressive
policies offering flexible work arrangements, extended
child-care leave, travel support for infants and care-givers,
secure transport, paternity leave, same gender partner
medical benefits, infrastructure support coupled with
various sensitisation programmes, Employee Resource
Groups, development interventions tailored for women
talent, and the commitment and sponsorship of leaders;
your Company provides an enabling environment to
further its Diversity, Equity and Inclusion goals. To ensure
a safe and progressive work environment, Internal
Committees have been institutionalised as per provisions
of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
The focused efforts across these dimensions have
resulted in a 72% increase in women managers in your
Company since FY 2021-22.

Your Company continued its practice of active leadership
outreach to employees. Periodic communication with
the ITC community through 'StudioOne Townhalls' led
by the Chairman, provided employees avenues to hear
from and engage with leaders about your Company's
vision, strategy and milestones. This was supplemented
by a more personalised engagement through the
'StudioOne Xchange' initiative. The Chairman and other
members of the Corporate Management Committee
interacted with managers across Businesses in small
groups, sharing your Company's vision and strategies
while also inviting suggestions and feedback. Your
Company believes that alignment of all employees to
a shared vision and purpose is vital for winning in the
marketplace. It also recognises the mutuality of interests

with key stakeholders and is committed to continue
building harmonious employee relations. Your Company
remains dedicated to an Employee Relations climate
of partnership and mutuality while ensuring operations
are competitive, flexible and responsive. The Employee
Relations philosophy of your Company, anchored in the
tenets of Scientific Management, Industrial Democracy,
Human Relations and Employee well-being, has
contributed towards building a robust platform which has
aided the conclusion of collective bargaining agreements
at several of its manufacturing units, ensuring smooth
commencement of operations at greenfield locations and
the execution of productivity improvement practices.

In its relentless pursuit of excellence and value creation,
your Company offers an abundance of opportunities for
employees to grow and thrive in an environment of trust,
empowerment and continuous learning. The access to
best-in-class resources, technology and infrastructure, the
prospect of building businesses rooted in value chains in
India, the deployment of deep consumer insights to create
and shape Indian brands are the defining hallmarks of
'The ITC Way'. This unique blend of a high-performance
culture coupled with care and respect for people remain
vital to realising your Company's vision of sustaining its
position as one of India's most valuable and admired
corporations.

WHISTLEBLOWER POLICY

Your Company's Whistleblower Policy, approved by
the Board, encourages Directors and employees to
promptly bring to the Company's attention, instances of
illegal or unethical conduct, actual or suspected incidents
of fraud, actions that affect the financial integrity of
the Company, or actual or suspected instances of leak
of unpublished price sensitive information, that could
adversely impact the Company's operations, business
performance and/or reputation. The Policy requires
the Company to investigate such incidents, when reported,
in an impartial manner and take appropriate action
to ensure that the requisite standards of professional
and ethical conduct are always upheld. Anonymous
complaints are also entertained if the same is backed by
specific allegations & verifiable facts, and is accompanied
with supporting evidence. It is your Company's Policy to

ensure that no complainant is victimised or harassed for
bringing such incidents to the attention of the Company,
and to keep the information disclosed during the
course of the investigation as confidential. The
practice of the Whistleblower Policy is overseen by the
Audit Committee and no employee was denied access to
the Committee during the year. The Whistleblower Policy
is available on the Company's corporate website at
https://www.itcportal.com/whistleblower-policy .

During the year, your Company received 24 complaints in
terms of the Whistleblower Policy, of which investigation
in respect of 15 complaints was completed; in most of the
cases, no evidence was found in support of the allegations
made. Appropriate action, where necessary, was taken.

SUSTAINABILITY 2.0

Your Company believes that when enterprises make
societal value creation an integral part of their corporate
strategy, powerful drivers of innovation emerge that make
growth more enduring for all stakeholders. This paradigm
is called ‘Responsible Competitiveness’ - an abiding
strategy that focuses on extreme competitiveness but in
a manner that replenishes the environment and supports
sustainable livelihoods.

Your Company's innovative business models synergise
the building of economic, environmental and social capital,
thus embedding sustainability at the core of its corporate
strategy. Today, this strategy has not only contributed
to building strong businesses of the future as well as a
portfolio of winning world-class brands, but also in making
your Company a global exemplar in 'Triple Bottom Line'
performance. Your Company is the only enterprise in the
world of comparable dimensions to have achieved and
sustained the three key global indices of environmental
sustainability of being 'water positive' (for 23 years),
'carbon positive' (for 20 years), and 'solid waste recycling
positive' (for 18 years).

Your Company is actively working towards Sustainability 2.0,
an agenda which reimagines sustainability under the
pressing challenges of climate change and social inequity.
Sustainability 2.0 calls for inclusive strategies that can
support sustainable livelihoods, pursue newer ways
to fight climate change, enable the transition to a net
zero economy, work towards ensuring water security
for all and create an effective circular economy for
post-consumer packaging waste. It also entails protecting
and restoring biodiversity and ecosystem services through
adoption of nature-based solutions. Your Company
believes that agility in thought and action, meaningful
public-private-people partnerships and Responsible
Competitiveness will act as core enablers of this new
agenda. Your Company has the potential to make a
large-scale impact not only from an economic standpoint,
but also from the perspective of supporting livelihoods
and social enablement because of its presence across
several critical sectors of the economy. With its bold
Sustainability 2.0 agenda, your Company is setting the
bar higher and remains committed to making meaningful
contribution to the Nation's future while retaining its status
as a sustainability exemplar. The 2030 Sustainability 2.0
ambitions include:

Climate Change

-    Enhancing the share of renewable energy usage to
50% of total energy consumption by 2030.

-    Meeting 100% of purchased grid electricity
requirements from renewable sources by 2030.

-    Reducing specific energy consumption by 30% and
specific Greenhouse Gases (GHG) emissions by 50%
by 2030 as compared to the FY 2018-19 baseline.

-    Sustain and enhance carbon sequestration by
expanding forestry projects through your Company's
Social and Farm Forestry programme and other such
initiatives covering over 1.5 million acres by 2030.

Water Stewardship

-    Achieving 40% reduction in specific water consumption
by 2030 as compared to the FY 2018-19 baseline.

-    Creation of rainwater harvesting potential equivalent
to over five times the net water consumption by 2030.

-    Certification of all sites in high water stressed areas
as per the international water stewardship standard
by Alliance for Water Stewardship (AWS) by 2035
and eight sites by 2024.

-    Improve crop water-use efficiency in agri-value chains
through demand side management interventions and
enable savings of 2,000 million kl of water by 2030.

Plastic Waste and Circular Economy

-    100% of your Company's Packaging to be Reusable,
Recyclable or Compostable/Biodegradable by 2028.

-    Sustain plastic neutrality (attained in FY 2021-22) by
enabling sustainable management of waste in excess
of the amount of packaging utilised.

Sustainable Agriculture

-    Promote climate smart agriculture approach in core
Agri Business catchments across four million acres
by 2030.

Biodiversity Conservation

-    Revive & sustain ecosystem services and products
provided by nature, through adoption of nature-based
solutions and biodiversity conservation covering over
one million acres by 2030.

Sustainable Livelihoods

-    Supporting sustainable livelihoods for 10 million
people by 2030.

Your Company's Businesses are actively working towards
achieving your Company's Sustainability 2.0 vision.
During FY 2024-25, your Company enhanced the share
of its renewable energy to nearly 52%. Commendable
progress has been made in line with 2030 targets relating
to specific energy, specific GHG emissions and specific
water consumption across Businesses as well. In line
with its commitment, your Company continued to remain
plastic neutral during FY 2024-25 by sustainably managing
more plastic packaging waste than the amount of plastic
packaging utilised. During the year, your Company's
large-scale programmes on Sustainable Agriculture were
augmented to cover 3.17 million acres. Through its deep
engagement in agriculture, manufacturing and services,
as well as its extensive distribution infrastructure and
large-scale programmes under ITC Mission Sunehra
Kal, your Company supports nearly nine million
sustainable livelihoods across its operations and
value chains. A detailed performance dashboard against
2030 commitments is included in your Company's
annual Sustainability Report, 2025 and will be available
in due course.

In addition to the 2030 targets, your Company is enhancing
its long-term climate-related goals by committing to
achieve 'Net Zero Operations' by 2050 which will entail

decarbonisation of its scope 1 and scope 2 emissions
i.e., electrical and thermal energy-related emissions in
own operations. Additionally, your Company will continue
to collaborate with its extended ecosystem for facilitating
decarbonisation of emissions across the value chain
(scope 3 emissions) as well as setting up systems for
monitoring scope 3 emissions in line with emerging
standards.

To achieve its Sustainability 2.0 vision, your Company
continues to strengthen its management approach which
is guided by a comprehensive set of sustainability policies
and is being implemented across the organisation.
Your Company has put in place robust mechanisms for
engaging with key stakeholders, identification of material
sustainability issues and progressively monitoring and
mitigating the impacts along the value chain of each
Business. Your Company will continue to update these
systems and processes in line with evolving disclosure
standards and Environmental, Social and Governance
(ESG) requirements.

Your Company's 21st Sustainability Report published
during the year detailed the progress made across all
dimensions of the 'Triple Bottom Line' for FY 2023-24.
This report was prepared in conformance with
'In Accordance - Comprehensive' criteria of the
Global Reporting Initiative (GRI) standards and is
third-party assured to 'Reasonable Level' as per
International Standard on Assurance Engagements
(ISAE) 3000. The report continues to be aligned to the
requirements of the Integrated Reporting Framework
as well. In addition to the Sustainability Report, your
Company published its first Nature Report in line with
the recommendations of Taskforce on Nature-related
Financial Disclosures (TNFD).

Your Company's Sustainability Report for FY 2024-25
is being prepared and will be made available on your
Company's corporate website in due course. In addition, the
Business Responsibility & Sustainability Report (BRSR),
as mandated by the Securities and Exchange Board of
India (SEBI) for the year under review is annexed to the
Report and Accounts. The BRSR maps the sustainability
performance of your Company against the nine principles
forming part of the National Guidelines on Responsible

Business Conduct (NGRBC) issued by the Ministry of
Corporate Affairs, Government of India.

During the year, your Company sustained its 'AA' rating
by MSCI-ESG for the seventh consecutive year, the
highest rating among global tobacco majors. Based on
its ESG score as assessed by S&P Global Corporate
Sustainability Assessment (CSA), your Company has also
been included in the Dow Jones Sustainability Emerging
Markets Index for the fifth year in a row. In FY 2023-24,
your Company entered the prestigious A List' for
CDP Water with a Leadership Level' score of A', which
is higher than the Asia and Global average of 'C'. For CDP
Climate, your Company had achieved 'Leadership Level'
score of 'A -' in FY 2023-24, which is higher than the
Asia and Global average of 'C'. Your Company's CDP
scores for FY 2024-25 are still awaited.

Contribution to the United Nations Sustainable
Development Goals (UN SDGs)

Your Company's Sustainability strategies and Social
Investment Programmes & interventions, in addition
to their alignment with national priorities, are also well
positioned to contribute to the achievement of India's
commitment under the UN SDGs. For instance, your
Company's programme on Climate Smart Agriculture
is aligned to the Government's National Mission for
Sustainable Agriculture, and also contributes to the
achievement of multiple SDGs, including SDG 13
(Climate Action), SDG 15 (Life on Land), SDG 1
(No Poverty), SDG 2 (Zero Hunger) and SDG
12 (Responsible Consumption and Production).
Your Company's multi-dimensional environmental and
social interventions which have been scaled up over
the years contribute favourably to all 17 UN SDGs.
A comprehensive statement linking your Company's
interventions to the SDGs including corresponding targets
will be available in your Company's Sustainability Report
for FY 2024-25.

Building Climate Resilience

Your Company recognises the urgent need to combat
climate change for building a more secure future and
the role it can play in enabling a net-zero economy.
To address the risks of climate change, your Company's

climate strategy places equal emphasis on transitioning to
a low carbon economy and adapting to the worst impacts
of climate change.

Your Company is pursuing a low carbon growth strategy
through extensive decarbonisation programmes across
its value chain. These include increasing the share of
renewable energy, continuous reduction of specific
energy, construction of green buildings, greening
logistics & optimising distance-to-market, and promoting
regenerative agriculture practices in agri-value chains.
Your Company is also conducting Life-Cycle Analysis (LCA)
studies for developing a portfolio of innovative and
sustainable products in line with growing consumer
preference for climate friendly products.

Additionally, in order to address short-medium term as
well as long-term physical risks of climate change, your
Company is working with climate experts to conduct
comprehensive climate risk and vulnerability assessments
using climate models across its key agri value chains and
operating locations (factories and warehouses). These
assessments utilise latest AI-enabled climate modelling
tools for projecting the extent of risk from climate hazards
related to changes in temperature, precipitation, sea
level rise, flooding and other extreme weather events
over decadal time frames covering the period till 2100
under various Shared Socioeconomic Pathways (SSPs)
scenarios (SSP1-2.6, SSP2-4.5 and SSP5-8.5). Detailed
farm-level studies have been conducted to understand
the potential adverse impacts of climate change on your
Company's key agri-value chains. These risk assessments
help further calibrate the climate resilience measures that
are being implemented across your Company's value
chains. For major crops like wheat, pulpwood and leaf
tobacco among others, there is significant and sustained
work being done by your Company on the development
of climate-tolerant varieties as well as dissemination of
climate-resilient and regenerative agronomic practices
in the growing areas. Around 140 locations across your
Company's own operations and the extended value chain
have been assessed for climate risk. Based on the
findings of these assessments, detailed site-specific
studies are being undertaken for developing contextual
location-specific adaptation plans and strategies.

Energy Conservation and Renewable Energy

As a responsible corporate citizen, your Company has
made a commitment to reduce dependence on energy
from fossil fuels. Accordingly, appropriate green features
are being incorporated in all factories, warehouses and
office complexes with many of them certified at the highest
level by either the US Green Building Council (USGBC)
or Indian Green Building Council (IGBC). During the
year, despite significant increase in scale of operations,
your Company sourced nearly 52% of its total energy
requirements from renewable sources such as biomass,
wind and solar. Your Company has been investing in
expanding renewable footprint across both thermal
and electrical energy. The recently commissioned
state-of-the-art and future-ready High Pressure
Recovery Boiler at the Bhadrachalam mill of your
Company's Paperboards & Specialty Papers Business
replaced conventional soda recovery boilers thereby
reducing carbon footprint through    lower coal

consumption. In addition to this, your Company
installed capacity of over 174 MW ¹⁰ of solar and
wind power across the country to meet its electrical
energy requirements.

Your Company continues its efforts towards meeting 100%
of purchased grid electricity requirements from renewable
sources by 2030 and sustaining 50% renewable energy
share in its total energy consumption based on a
mix of energy conservation and renewable energy
investments, despite significant enhancement in its scale
of operations going forward.

GHG and Carbon Sequestration

The GHG inventory of your Company for FY 2024-25
compiled according to the ISO 14064 Standard has been
assured by an independent third party. The GHG inventory
covers emissions from your Company's operations and
GHG removals from your Company's large-scale forestry
programmes. Your Company's Social and Farm Forestry
initiatives, besides sequestering carbon from the
atmosphere, help towards utilisation of degraded
wasteland, prevent soil erosion, enhance organic matter
content in soil and increase ground water recharge.

Towards Water Security for All

With water scarcity increasingly becoming an area of
global and national concern, your Company continues
to focus on an integrated water management approach
that includes water conservation and harvesting initiatives
at its units - while at the same time working towards
meeting the water security needs of all stakeholders at
the local watershed level. Several interventions have
been rolled out to improve water-use efficiencies such
as adopting latest technologies and increasing reuse and
recycling practices within the fence while also working
with farmers and other community members towards
improving water-use efficiencies.

Demand side management is a critical component
of your Company's Water Stewardship programme.
Recognising the critical imperative of reducing water
use, especially in agriculture, your Company continues
to work with farmers to achieve 'more crop per drop' and
improve farmer incomes. Over 18 lakh acres have been
covered during the year across 12 states through micro
irrigation technologies and crop-specific agronomical
practices. Basis parameters established earlier, there
has been potential water savings of over 1,400 million kl
during the year. These interventions are spread across
15 crops including four key agri value chains - wheat,
tobacco, pulpwood and spices, and result in water savings
up to 50% as compared to conventional practices.
The water-use efficient practices promoted also help in
reducing GHG emissions as compared to the conventional
practices followed.

The demand side measures are implemented along with
augmenting supply at the sub-catchment level through
various interventions of rainwater harvesting based on the
recommendations of hydro-geological studies. The supply
side interventions include enhancing capture and storage
of rainwater (within soil surface and storage structures)
and recharging aquifers. In the process, traditional
water bodies are restored and wetland eco-systems are
conserved. To have a long-lasting impact and balance
out the competing demands on water resources, your
Company has also extended work to river basin level
in water stressed catchments. Based on the work done
by your Company in four river basins viz. Maharashtra
(Ghod basin), Madhya Pradesh (Kolans basin),

Tamil Nadu (Upper Bhawani basin) and Telangana
(Murreru basin), water positive status was achieved in all
the basins by end of the year as against water deficit
estimated in the baseline studies. In South Pennar river
basin of Karnataka, work has been initiated in the field,
basis the recommendations from the river basin study
done by Indian Institute of Science (IlSc), Bengaluru.
This is being pursued through a Public Private Partnership
with Karnataka Government and Vyakti Vikas Kendra for
restoring the water bodies in the river basin.

Considering the increasing water stress in urban
catchments, your Company is implementing water security
programmes in Bengaluru and Chennai catchments.
These programmes focus on restoring urban water
bodies as well as tanks and their connectors, groundwater
recharge and promotion of roof water harvesting and
usage of water efficient taps. These measures are aimed
at addressing challenges of groundwater depletion
and also mitigating risks arising out of flooding during
heavy rains.

Your Company also conducts efficacy studies to assess
the impact of the watershed work carried out, and to
ensure that maximum benefits accrue in the long-term.
As on 31st March, 2025, your Company's integrated
watershed development projects covering over 1.8 million
acres of land have created a total rainwater harvesting
potential of over 59.90 million kl. In total, over
60 million kl of rainwater has been harvested, including
within the fence, which is over five times the net
water consumed by your Company's operations in
FY 2024-25. With this, your Company has achieved
its 2030 Sustainability 2.0 target of creating rainwater
harvesting potential equivalent to over five times the net
water consumption.

In addition, your Company is spearheading the
implementation of Alliance for Water Stewardship (AWS)
Standard which is a credible, globally applicable and
recognised framework for ensuring sustainable water
management within the wider water catchment context.

During the year, two units of your Company i.e., Paper
unit at Bhadrachalam and Branded Packaged Foods
unit at Kapurthala, received the AWS Platinum level
certification, the highest recognition for water stewardship

awarded by AWS. Till date, nine units of your Company
have achieved Platinum level certification under the
AWS Standard, thereby exceeding the commitment of
getting eight sites certified by 2024.

Pioneering the Green Building Movement in India

In order to continuously reduce your Company's energy
footprint, green features are being integrated in all new
and old constructions including manufacturing units,
warehouses and office complexes. Your Company is a
pioneer in the green building movement, with 17 buildings
having received Platinum certification by USGBC
(US Green Building Council)/IGBC (Indian Green
Building Council).

Several of your Company's factories and office complexes
have received the Green Building certification from IGBC
and the Leadership in Energy & Environmental Design
(LEED®) certification from USGBC. The data centre at
Bengaluru, ITC Sankhya, is the first data centre in the
world to receive the LEED Platinum® certification by
USGBC. Large infrastructure investments such as the
ITC Green Centre at Guntur and the ITC Green Centre
at Bengaluru (both LEED Platinum^® certified) continue
to demonstrate your Company's commitment to green
buildings. Virginia House, Kolkata and ITC Centre,
Kolkata - the headquarters of your Company, are
also certified at the highest 'LEED Platinum®' rated
Green Building by USGBC.

Enabling a Circular Economy

Your Company continues to make significant progress in
improving the circularity of waste generated in operations.
The focus is on reducing waste through constant monitoring,
improvement of efficiencies in material utilisation and
adequate waste segregation thereby improving recycling
rates. During the year, your Company achieved over 99%
recycling of waste generated in course of its operations.
This has prevented waste from reaching landfills, with the
associated problems of soil & groundwater contamination
and GHG emissions, all of which can adversely impact
public health. In addition, your Company's Paperboards &
Specialty Papers Business recycled nearly 85,000 tonnes
of externally sourced post-consumer waste paper, thereby
creating yet another positive environmental footprint.

Your Company aims to go beyond the requirements of
Plastic Waste Management Rules, 2022 to ensure that
over the next decade, 100% of packaging is reusable,
recyclable or compostable/biodegradable. Your Company
is working towards optimising packaging in a way
that reduces the environmental impact arising out of
post-consumer packaging waste without affecting product
integrity. This is being addressed in a comprehensive
manner by optimising packaging design, introducing
recycled content in packaging, identifying alternative
packaging material with lower environmental impact and
supporting development of suitable end-of-life solutions
for packaging waste.

Your Company has successfully implemented multiple
large-scale models of solid waste management across
the country. These models, based on principles of circular
economy, are scalable, replicable and sustainable, and
have enabled your Company to sustain its plastic neutral
status since FY 2021-22. The approach is centred around
treating waste as a resource and ensuring that minimal
waste goes to landfill, which can be achieved only when
waste is segregated at source. The initiatives focus on
educating citizens on segregating waste at source into
dry & wet streams and ensuring that value is derived from
these resources and in the process, support sustainable
livelihood for waste collectors. These models operate on a
public-private partnership basis, with active involvement of
Urban Local Bodies (ULBs), civil society and the informal
sector of waste collectors.

Your Company has exceeded its commitment on plastic
neutrality for the third consecutive year by collecting
and sustainably managing 76,000 tonnes of plastic
waste, which is more than the plastic packaging utilised
by your Company. Your Company has been obtaining
independent third-party assurance of its plastic neutrality
status since FY 2022-23.

Your Company's waste recycling programme,
‘WOW - Well-Being Out of Waste', enables the creation
of a clean & green environment and promotes sustainable
livelihoods for waste collectors. During the year, the
programme continued to be executed in Bengaluru,
Mysuru, Hyderabad, Coimbatore, Chennai, Delhi,

Dindigul, major towns of Telangana and several districts of
Andhra Pradesh. The quantum of dry waste collected during
the year was about 67,100 MT from over 1,760 wards.
The programme has covered over 2.9 crore citizens in over
72 lakh households, 71 lakh school children and around
2,240 corporates since its inception. It has promoted
sustainable livelihood for over 17,900 waste collectors by
facilitating an effective collection system in collaboration
with Municipal Corporations. The intervention has
also created over 150 social entrepreneurs who are
involved in optimising value capture from the collected
dry waste.

Your Company, in partnership with Kashtakari Panchayat
and SWaCH Pune, runs an inclusive and decentralised
waste management model in Pune to specifically focus on
collection and recycling of low value Multi-Layered Plastic
(MLP) packaging. Through a mobile collection system
operating across 12 city wards and the Pune Cantonment
Board, over 750 waste pickers collect MLP waste daily,
receiving direct payments. The initiative processes
over 130 MT of flexible plastics monthly, and has
cumulatively recycled nearly 4,100 MT since 2019.
The program not only boosts incomes for informal workers
(contributing to ~12—15% of their earnings) but also
provides formal employment to 43 individuals, showcasing
a replicable model that combines environmental
stewardship with social equity.

Further, a separate community-driven programme on
decentralised Solid Waste Management (SWM), including
closed loop Green Temple programme in collaboration
with Swachh Bharat Mission, is operational in 34 districts
across 12 states covering about 24.62 lakh additional
households during the year, taking the cumulative
coverage to nearly 75.21 lakh households. This programme
deals with both wet and dry waste and focuses on
minimising waste to landfill by managing waste at source.
Under the programme, more than 6.7 lakh MT of waste
was collected during FY 2024-25, out of which around
4.2 lakh MT of wet waste was composted, and
1.8 lakh MT of dry waste recycled, and thus 87% of the
total waste was avoided from being sent to landfills.
Further, home composting was practiced by over
1.93 lakh households (8.3 lakh households till date).

As liquid waste is emerging as a growing challenge
especially in rural areas, during the year, your Company
has also initiated pilots of different decentralised solutions
like soak pits, in line treatment, waste stabilisation ponds
and vertical filters in nine States.

Your Company's partnership with Uttar Pradesh
Urban Development Department (UDD) is enabling
implementation of SWM programme in 85 ULBs
across 75 districts of the State, reaching out to over
49 lakh households till date. Your Company's
partnership with Lohiya Swachh Bihar Abhiyan (LSBA),
Rural Development Department, Government of Bihar
continued to promote decentralised SWM in 456 villages
of Ganga region ('Ganga Gram') across 12 districts of
Bihar. During the year, refresher training and handholding
support was provided to 3,100 Panchayat officials of these
456 Ganga Gram villages through a cascade approach,
who then initiated focused waste management activities
in their villages and covered over 4.6 lakh households.

Your Company had also collaborated with Department
of Drinking Water and Sanitation (DDWS), Government
of India, and India Sanitation Coalition (ISC), FICCI, to
develop 36 Gram Panchayats (GPs) across 10 states as
Lighthouses, demonstrating best practices in sanitation
and waste management, which will be adopted by other
GPs gradually. The partnership is part of the DDWS's plan
of creating 75 Lighthouse Gram Panchayats across India.
Till March 2025, of the 36 GPs, 28 GPs were declared
Model by Government, with the balance 8 GPs on track to
become Model in the coming months.

Your Company's approach of involving Self Help Groups
(SHGs) as service providers for Gram Panchayats in
SWM and the use of Swachhata Mitra App for monitoring
waste management in partnership with Bihar Government
has got high appreciation as best practices.

Your Company's 'YiPPee! Better World programme' is
aimed at creating awareness about plastic waste and
ways to reduce, recycle and reuse it among students.
During the year, the intervention reached out to 14 lakh
children across 4,175 schools. This programme along
with Company's Social Investments Programme has
provided schools with over 1,850 benches and tables and
350 sports kits made from recycled plastic.

Preserving and Nurturing Biodiversity

Given the linkages between agriculture and the essential
ecosystem services that nature provides, your Company
recognises that the preservation and nurturing of
biodiversity is crucial for long-term sustainability of its
businesses. It is therefore committed to conducting its
operations in a manner that protects, conserves and
enriches biodiversity in line with the Board-approved
Policies on Biodiversity Conservation and Deforestation.

For both greenfield and brownfield operations, processes
are in place for assessing any actual or potential biodiversity
related risk or impact including conducting environmental
impact assessments wherever required by environmental
regulations. Moreover, location-specific exposure
including proximity to Key Biodiversity Areas is assessed
periodically. Basis these assessments, key nature-related
risks that are material to your Company's businesses/
locations are identified, and mitigation plans are developed
and implemented. Location specific risks covered in these
assessments include water stress, climate risks including
extreme weather events like droughts and floods,
land-use changes, soil quality and productivity, among
others. Your Company also recognises the potential
of nature-based solutions for carbon sequestration
and building climate resilience, and prioritises actions
to minimise impacts across ecosystems and manage
dependencies in a sustainable manner. Your Company
also has large scale programmes in place for ensuring
deforestation-free leaf tobacco and wood value chains.
For more information, refer to the Corporate Social
Responsibility section.

Sustainable Supply Chain and Responsible Sourcing

Your Company, with its diverse and expanding portfolio of
businesses, is working towards scaling up its sustainable
supply chain initiatives as part of its Sustainability 2.0
Vision. Your Company has a Board-approved Policy on
'Sustainable Supply Chain and Responsible Sourcing' and
a 'Code of Conduct for Suppliers and Service Providers'
that together lay down the foundation for your Company's
engagement with its suppliers. In line with this policy,
your Company engages with its supply chain members
for building their capacity, assessing sustainability risks,
and supporting them in building resilience against such

risks. The policy also encourages suppliers to work
towards resource-use efficiency, including sustainable
natural resource management, GHG emission reduction
and sustainable waste management. For focused
engagement with key suppliers, your Company has
created a framework for identifying its critical suppliers.
Till FY 2024-25, more than 800 Tier-1 suppliers have been
trained on ESG including 100% critical Tier-1 suppliers.
Additionally, appx. 70% critical Tier-1 suppliers have been
assessed on ESG aspects by a third party.

For key agri value chains, your Company has implemented
large scale sustainable and Climate Smart Agriculture
programmes. Till date, 31.7 lakh acres and over 12 lakh
farmers including 1.87 lakh women farmers have been
covered under your Company's Climate Smart Agriculture
programme. Your Company also supports farmers with
adoption of sustainable farm certifications like Rainforest
alliance (RFA), Forest Stewardship Council® (FSC®),
Global Agricultural Practices (G.A.P) for identifying and
addressing environmental risks and human rights related
issues. For more information, refer to the Corporate Social
Responsibility section.

ITC’s Nutrition Strategy - ‘Help India Eat Better’

In the context of India's Triple burden of malnutrition, there
is an urgent need to pivot towards healthier lifestyles which
requires access to safe, sustainable and nutritious food.

Your Company's Branded Packaged Foods Businesses
have developed a 4-pillar model that uniquely combines
the strategic commitments to deliver on its nutrition
strategy - 'Help India Eat Better'. The strategy has
been developed to create an ecosystem and guide the
organisation towards supporting the dream of a healthier
nation via value-added products, sustainable food system
initiatives, empowered people and healthy communities.
This also includes focus on diet diversity, food fortification,
leveraging traditional systems of knowledge and use
of millets. The strategy is also in line with Government
of India initiatives such as Mission Poshan 2.0,
Anemia Mukt Bharat, Kuposhan Mukt Bharat, Surakshit
Matritva Abhiyan and the    Aspirational Districts

Programme. Robust science-based nutrition targets
have also been developed and are continuously tracked
and communicated to your Company's stakeholders.

The meticulous implementation of evolving scientific
principles and technological advancements by your
Company's research and development teams enables
development of 'better for you' portfolio. Your Company
also achieved the first rank in ATNI India Index 2023
amongst 20 of the largest Indian food & beverage
manufacturers as assessed by the globally recognised
Access to Nutrition Initiative (ATNI). The index is published
every 2-3 years and evaluates companies on their
governance and management, production and distribution
of healthy products, influence on consumer choices,
and policies and actions targeting priority populations at
high risk of malnutrition.

Promoting Thought Leadership in Sustainability

To ensure wider adoption of the 'Triple Bottom Line'
philosophy across the Industry, your Company established
the 'CII - ITC Centre of Excellence for Sustainable
Development' (CESD) in 2006 in collaboration with the
Confederation of Indian Industry (CII). With a vision to
drive transformation towards sustainable development,
the Centre plays a focal role in Government Industry
dialogues on national regulations, articulate stakeholder
discourses on global policies, put forth Indian industry's
stand on macro-economic issues and accentuate the
need for sustainable and inclusive transformation. Major
highlights from the year include:

Building Climate Resilience and Low Carbon Economy

•    The CII Climate Action Charter (CCAC) provides a
platform for Indian businesses to map Climate Change
as a material risk across value chains and develop
long-term actions to build resilience. The Charter
has been designed to provide impetus for collective
action by Indian businesses to drive solutions
for a just, equitable and resilient transition, and
currently, has close to 500 signatories across
industry sectors.

•    CII-led delegation participated in the 29th Conference
of the Parties (COP29), held in Baku, Azerbaijan, from
November 11-22, 2024. The report, 'CII at COP29
Negotiations: Indian Industry Expectations', launched
at the Conference, emphasises a balanced approach
that incorporates both mitigation and adaptation,
acknowledging the need for a more equitable and

effective climate finance framework to close the
climate finance gap and facilitate climate-resilient
growth.

•    The Centre in collaboration with CEEW (Council for
Energy, Environment and Water) launched the report
on 'Building Climate Resilience for Indian Industry'
at the 19th Sustainability Summit. The report has
developed a Physical Climate Risk Assessment
Framework (PCRAF) to assess and quantify climate
risks for Indian businesses and their value chains.

•    In collaboration with Ministry of Environment, Forest
and Climate Change (MoEFCC), the Centre is
actively contributing to the formulation of the National
Inventory of Greenhouse Gases related to the
Industrial Processes and Product Use (IPPU) sector
as part of India's fourth National Communications
(NATCOM) to the United Nations Framework
Convention on Climate Change (UNFCCC) and the
1st Biennial Transparency Report under the NATCOM
project, guided by the Ministry of Environment, Forest
and Climate Change.

Advancing Creation of a Circular Economy

•    The India Plastics Pact (IPP), launched in September
2021, is uniting businesses, NGOs, and citizens
behind four ambitious time-bound targets to
help realise a vision of a world where plastic is valued
and doesn't pollute the environment. The Pact is the
first in Asia and joins a global network of 13 Plastics
Pacts. 53 organisations are signatories to the Pact
and have committed to the Pact's 2030 Targets for
a circular plastics economy. Some of the key reports
launched by IPP during the year include:

-    Roadmap for managing films and flexible
packaging in India

-    Design for recycling guidance for films and
flexible packaging and Landscape assessment:
Reuse models in India.

•    The Centre partnered with the Ministry of Environment,
Forest and Climate Change (MoEFCC) for streamlining
implementation of environmental reforms, thereby
fostering circular economy, transparency and
enhancing natural resource management. During the

year the Centre partnered with Bureau of Indian
Standards (BIS) to develop standards related to
waste management, sustainability, environmental
management and ecological priorities. The Centre
also worked with the Central Pollution Control Board
to resolve challenges related to Extended Producer
Responsibility (EPR) obligations under the rules
for plastics, e-waste, battery and hazardous waste
management.

•    During the year, CII signed an MoU with the All-India
Plastics Manufacturing Association to encourage
action, knowledge sharing, and awareness between
larger businesses and MSMEs.

•    Since 2020, CII has been working across various
sectors and has successfully supported over
260 sites in achieving SuP-free (single-use
plastic-free) certification.

•    During the year, the Centre hosted the first edition of
the CII Circular Economy Conference and launched
the CII Sustainable Plastic Packaging Awards for
recognising upstream innovations and changes
in design of plastic packaging by businesses,
driving the transition towards a circular plastics
economy in India.

Nature Positive Actions

•    The India Business and Biodiversity Initiative
(IBBI) participated in consultation meetings for
updating the National Biodiversity Strategy and
Action Plan (NBSAP), and for adoption of National
Biodiversity Targets (NBTs) in alignment with the
Global Biodiversity Framework (GBF). At COP16
to the Convention on Biological Diversity (CBD) in
Cali, Colombia, India launched its updated National
Biodiversity Strategy and Action Plan (NBSAP).

•    IBBI was designated by the MoEFCC as the
responsible agency for Target 15 of India's updated
NBSAP. Target 15 focuses on sustainable production,
supply chains, and disclosure of risks, aiming to ensure
businesses manage biodiversity risks effectively.

Enhancing solutions for Clean Air

•    'India CEO Forum for Clean Air' is a dedicated
platform aiming to galvanise Indian businesses to
take forward clean air agenda in India and promote
focused actions through collective leadership of
Industry sub-sectors. The Forum led by 123 business
leaders, contribute towards making the air quality in
India better through the Crop Residue Management
(CRM) and through city-level awareness activities. In
the last six years the programme has led to saving of
12 million kg fine Particulate Matter (PM2.5).

•    To enhance the ecosystem for Electric Vehicle (EV),
CII facilitated industry inputs for 3 key Working Groups
under the newly formed National EV Task Force of
the Ministry of Heavy Industries (MHI).

Facilitating an Enabling Ecosystem for ESG Reporting

•    As part of SEBI's Industry Standards Forum (ISF),
CII formed a Core Group and held consultations
to develop Standards for Reporting on Business
Responsibility and Sustainability Reporting (BRSR)
Core. The recommendations made by CII on the
SEBI Consultation Paper - 'Recommendations of
the Expert Committee for Facilitating Ease of Doing
Business with respect to BRSR' were accepted by the
regulatory body.

•    To help Indian organisations navigate ESG
compliances and go beyond compliance, CESD
launched SaaS based ESG Subscription Service at
the 19th Sustainability Summit.

•    The Eco Edge initiative of the Centre aims at integrating
sustainability in the value chains of companies.
The focus areas include Decarbonisation, Circularity,
Health & Safety, and Human Rights. The programme
evaluates the performance of sourcing companies and
their value chain partners. During the year, more than
200 suppliers' sustainability performance was assessed
through the Eco Edge programme for the automotive
and energy sectors. For further adoption the Eco Edge
Online Assessment Tool was also launched.

Knowledge Exchange and Excellence in Sustainability

•    The 19th Sustainability Summit, Centre's flagship
annual event, was organised with the theme of
Driving Change for a Sustainability Conscious World.
The Summit deliberated on tangible actions in
driving sustainable change and highlighted inspiring

actions that exemplify the power of innovation,
development, and cooperation in shaping a prosperous
future for all.

•    Through the CII-ITC Sustainability Awards,
35 organisations were recognised for excellence
in sustainable business practices. The Awards
are a part of the continued efforts of the Centre to
create awareness on sustainability practices and to
create capacities in business.

•    To help industry manage climate risk, leverage
market opportunities and become climate resilient,
CII instituted a CAP 2.0° (Climate Action Programme)
to build capacity of industry and recognise best
practices and innovation on climate action.
The CAP 2.0° awards are the first one in India
to recognise industry's efforts on climate change
mitigation and adaptation. The awards in its 3rd edition
recognised 21 organisations for their pioneering work
in managing climate change.

•    The Centre trained nearly 400 professionals from
300+ organisations on sustainable business practices
through 25 sessions conducted during the year.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company's overarching commitment towards
creating significant and sustainable societal value is
manifest in its CSR initiatives that embrace the most
disadvantaged sections of society, especially in rural
India, through economic and social empowerment based
on grassroots capacity building. Your Company has a
comprehensive CSR Policy outlining programmes, projects
and activities that your Company undertakes to create a
significant positive impact on identified stakeholders. All
these programmes fall within the purview of Section 135
read with Schedule VII of the Companies Act, 2013 and
the Companies (Corporate Social Responsibility Policy)
Rules, 2014.

The key tenets of your Company's CSR interventions are:

- deep engagement in identified core operational
geographies to promote holistic development and
interventions designed in order to respond to the
most significant development challenges of your
Company's stakeholder groups.

-    strengthening capabilities of Implementation
Partners / Community Based Organisations (CBOs)
in all project catchments for participatory planning,
ownership and sustenance of interventions.

-    facilitating the development agenda in a manner that
is inclusive and empowers women, the poor and
marginalised communities including persons with
disability in the vicinity of your Company's factories
and agri-catchments, thereby significantly improving
Human Development Indices (HDI).

-    ensuring    behavioural change through focus on

demand    generation for all interventions, thereby

enabling participation, contribution and asset creation
for the community.

-    pursuing    the Prototype-Pilot-Scale-Amplification

approach to incorporate innovative and differentiated
design elements in a structured manner, whilst also
striving for amplification of successful interventions by
partnering with Government and Collaboratives.

Your Company's stakeholders are confronted with
multi-dimensional and inter-related concerns, at the
core of which is the challenge of securing sustainable
livelihoods. Your Company undertakes periodic
stakeholder engagements in the form of community
need assessments, impact assessments and other
evaluations. During the year, your Company undertook
48 such community engagements across 14 states
where your Company's Social Investments Programme
is being implemented, for the purpose of understanding
grievances if any, of the community members. Further,
over 3,000 household surveys were also conducted
during the year. Accordingly, interventions under
your Company's Social Investments Programme have
been appropriately designed to build capacities and
promote sustainable livelihoods.

Your Company's Social Investments Programme follows
the Two Horizon approach that focuses on inclusive
growth and holistic development of households; with
women and poor & vulnerable communities at the core.
In addition to being beneficiaries of several programmes,
women are also influencers and active participants in
grassroot institutions. Several such women also act as
change makers in the society.

The Two Horizon approach provides an integrated and
affirmative response to development by transforming
lives and landscapes. Whilst Horizon-I focuses on
strengthening and sustaining livelihoods of communities
(primarily agriculture and allied sector livelihoods);
Horizon-II focuses on building capabilities and capacities
to empower communities for a better life for the future.

The footprint of your Company's CSR projects is
spread across 24 states/Union Territories covering over
300 districts.

Your Company's CSR interventions were conferred
with three prestigious awards and recognitions during
FY 2024-25:

-    First Prize in FICCI Sustainable Agriculture Awards
2024 in the 'Natural Resource Management and
Climate Resilient Agriculture' category for the Climate
Smart Village Programme

-    I IT Madras CSR Awards 2024 under the theme
'Technology-Driven Inclusive Social Impact' for
deployment of technology in Climate Smart Agriculture

-    'Gold' Prize in Financial Express Green Sarathi Award
2024, in the Water Stewardship category

Natural Resources Management - Water Stewardship
Programme

The Water Stewardship programme aims to facilitate water
security for all dependents in the factory catchments and
to drought-proof the agri-catchments to minimise risks to
agricultural livelihoods arising from drought and moisture
stress. The programme is aligned to Jal Shakti Abhiyan,
the flagship initiative of Government of India for water
conservation. The programme promotes the development
and management of local water resources in
moisture-stressed areas by facilitating community
participation in planning and implementing such
measures, as well as building, reviving and maintaining
water-harvesting structures and thus conserving the
wetland ecosystems. In addition to rural and agri
focus, two urban water programmes are also being
implemented in Bengaluru and Chennai aimed at
addressing the challenges associated with urban water.
These programmes facilitate revival of urban water bodies,
targeted recharge of shallow aquifers and promotion
of practices like roof water harvesting and water
efficient taps.

To address the magnitude of water stress, your Company
has also extended water stewardship work to river basin
level interventions so that the competing demands from
neighbouring areas of our catchments are addressed
and a more holistic and sustainable impact created.
Work done in four river basins till date in Maharashtra
(Ghod basin), Madhya Pradesh (Kolans basin), Tamil Nadu
(Upper Bhawani basin) and Telangana (Murreru basin)
have resulted in the basins achieving water positive status,
as against the water deficit estimated in baseline
studies. Work has started in the fifth basin in Karnataka
(South Pennar basin), based on the recommendations
from the river basin study done through Indian Institute of
Science (IISc).

The coverage of water stewardship programme currently
extends to 59 districts of 17 states. During the year,
the area under watershed increased by over 1.78 lakh
acres, taking the cumulative coverage area to 18.16 lakh
acres. Over 3,500 water-harvesting structures including
ground water recharge structures were built during the
year, creating 5.83 million kl of rainwater harvesting
potential. The total number of water-harvesting structures
reached to over 35,900 and the net water storage potential
to over 59.90 million kl. In addition, as part of demand
management intervention, your Company continues
to work with farmers to achieve 'more crop per drop'
by promoting agronomic practices and micro irrigation
techniques targeted towards saving water in cultivation
and improving farmer incomes. Over 18 lakh acres across
more than 1 5 crops in 1 2 states have been covered
during the year as part of demand management. Studies
have been conducted by ICAR's Agricultural Technology
Application Research Institute, Kanpur, Indian Institute of
Rice Research, Tamil Nadu Agricultural University and
Vasantdada Sugar Institute to estimate water savings
in rice, wheat, sugarcane, coconut and banana in
your Company's programme locations. Basis these
studies and other research documents, it is estimated
that the demand management practices promoted
by your Company have led to potential water savings
to the tune of over 1,400 million kl during the year.
To improve water use efficiency, prototypes and pilots
also have been initiated to test efficacy of technologies
like organic hydrogel, mobile drip system and smart
irrigation switches.

Additionally, your Company is continuing existing
partnerships and forging new ones with multiple state
Government departments for Water Stewardship.
Your Company has signed three new partnerships
during the year with:

•    Water Resource Department, Government of
Maharashtra for Securing Godavari, Krishna and
Tapi river basins flowing in Maharashtra by promoting
Water Literacy among the Water User Associations
in 60 irrigation projects across 20 districts in these
basins which will improve water resources.

•    Department of Rural Development & Panchayat
Raj (RDPR), Government of Karnataka and
Vyakti Vikas Kendra India, for Water Resources
Development in South Pennar river basin to work
on water stewardship programme in 12 Taluks and
238 Gram Panchayats in Bengaluru Urban,
Bengaluru Rural, Kolar & Chikkaballapur districts
of Karnataka.

•    Watershed Development and Soil Conservation
Department, Government of Rajasthan, to promote
sustainable livelihoods based on a watershed
development project in 22 Gram Panchayats of
Bundi and Jhalawar districts covering an area of

44,000 acres.

Driven by your Company's Water Stewardship
programme, three Cigarette units at Pune, Bengaluru &
Saharanpur, three Branded Packaged Foods units at
Mysuru, Pune & Kapurthala, two Paperboards units at
Kovai & Bhadrachalam and GLT unit at Mysuru have
received AWS certifications in Platinum category till date.

Natural Resources Management - Biodiversity

The focus of the programme is on reviving ecosystem
services provided to agriculture such as natural regulation
of pests, pollination, nutrient cycling, soil health retention
and genetic diversity, which have witnessed considerable
erosion over the past few decades. The said programme
is also aligned to Government of India's flagship initiatives
such as National Mission for Sustainable Habitat and
Mangrove Initiative for Shoreline Habitats & Tangible
Incomes (MISHTI). Biodiversity conservation is done
through restoration of degraded village commons and

native species tree planting in the catchments. During the
year, your Company's biodiversity conservation initiative
covered over 1.76 lakh acres in 40 districts across
10 states, taking the cumulative area under biodiversity
conservation to over 6.47 lakh acres. While the
conservation work is being carried out in village commons,
this intervention significantly benefits the agricultural
activity in the vicinity of these plots through soil moisture
retention, carbon sequestration and by acting as host to
insects and birds beneficial to agriculture. Two technical
studies done earlier by 'The Energy and Resources
Institute' (TERI) & 'IORA Ecological Solutions' have
recorded improvement in carbon stocks, i.e., carbon
sequestered by trees, as well as floral and faunal
biodiversity compared to control areas. The project on
mangroves conservation, which are important biodiversity
reservoirs in coastal areas has been further strengthened.
Initiated in Andhra Pradesh in FY 2023-24, another

1,000 acres was conserved during the year, thus taking
the cumulative area to 1,500 acres. Alongside mangroves
conservation, olive ridley turtle conservation was also
taken up, wherein the eggs laid by turtles are protected
from natural predators by moving them to hatcheries
established along the coast and then releasing the
hatchlings into sea. During the year, 9,200 turtle eggs
were successfully hatched and released into the sea.

To increase the coverage for pastureland development
and biodiversity conservation, your Company has a
partnership with AP Panchayat Raj and Rural Development
Department to improve livelihoods and conserve village
commons in nine districts. Your Company also has a
partnership with Wasteland & Pastureland Development
Board (WPDB), Rajasthan targeting coverage of
2.5 lakh acres across eight districts. Till date,
1.75 lakh acres have been covered across 6,200 villages
leveraging Government resources. In the partnership with
Forest Department of Maharashtra, efforts towards soil
and moisture conservation in the forest and fringe areas
of Pune district was progressed with Department staff
trained by your Company in planning and implementing
the watershed work. Post training, Forest Department
took up soil and moisture conservation works and
tree plantation covering over 11,000 acres.

Climate Smart Agriculture

The Climate Smart Agriculture programme attempts to
de-risk farmers from erratic weather events through the
promotion and adaptation of a climate resilient approach
premised on dissemination of relevant package of
practices, adoption of appropriate mechanisation and
provision of institutional services. The said programme
is also aligned to Government of India's flagship
initiative of The National Innovations in Climate Resilient
Agriculture (NICRA) and other schemes for the welfare
of farmers including Pradhan Mantri Kisan Samman Nidhi
(PM-KISAN) Yojana. Currently, 31.70 lakh acres spread
over 100 districts across 19 states and 12 lakh farmers
including over 1.87 lakh women farmers are covered
under the programme. As per the studies done by reputed
ICAR - Agricultural Technology Application Research
Institute, Kanpur, the CSA practices promoted in rice
and wheat crops together has demonstrated reduction of
upto 21% in costs and upto 8% and 23% improvement
in yields and incomes respectively as compared to
conventional practices followed.

In pursuit of your Company's long-term sustainability
objective of increasing Soil Organic Carbon (SOC), more
than 6,300 compost units were constructed during the
year, taking the total number till date to over 67,300 units.
In addition to promotion of Climate Smart Agri practices at
scale, in core agricultural catchments, your Company also
has a Climate Smart Village (CSV) programme, wherein
support is provided to majority of the village population
to enable adaptation to climate risks, and mitigating the
same through knowledge dissemination, natural resources
management, livelihood diversification and institutional
support. 7,000 CSVs covering major crop value chains
are currently part of the programme. To provide additional
support to farmers in dealing with climate risks, during the
year, 17.65 lakh linkages were facilitated for farmers with
six major Government schemes, taking the cumulative to
over 42 lakhs.

Details of Climate Smart Agriculture interventions are also
provided in the section on 'Socio-Economic Environment'.

Your Company continued work on two partnerships, one
with Rajiv Gandhi Mission for Watershed Management
covering 35 districts of Madhya Pradesh for Climate

Smart Watersheds, and the other with Farmer Welfare
and Agriculture Development,    Department of

Madhya Pradesh covering 6 districts. During the year,
training was conducted by ITC for the officials, post which
they have initiated work in 8,200 villages.

During the year, knowledge was disseminated
through 13,500 Farmer Field Schools and over
17,600 Choupal Pradarshan    Khets (CPKs).

1,850 Agri Business Centres    (ABC) including

620 exclusive women ABCs delivered extension services,
arranged agri-credit linkages, established collective
input procurement and provided agricultural equipment
for hire.

Your Company, with its presence across multiple
commodities and geographies including the e-Choupal
network and agri extension programmes network,
undertook an initiative to facilitate formation of new Farmer
Producer Organisations (FPOs) and/or strengthening
existing FPOs, thus enhancing farm incomes, rural
livelihood and partnering in other relevant rural
development initiatives. During the year, your Company
supported additional 390 FPOs taking the cumulative
number to 2,050 FPOs.

The 'Adarsh Gram Programme' pioneered by your
Company's Agri Business presently covers 484 model
villages in the states of Andhra Pradesh and Karnataka.
Under this initiative, your Company supports villages
to become economically, ecologically and socially
sustainable. Your Company is also addressing the human
rights and farm safety challenges in these villages by
educating the farmers, labour & community, providing
access to Personal Protective Equipment (PPE) kits and
adopting smart technologies like drones for spraying
activities on the farms.

Off-farm Livelihood Diversification - Livestock
Development

The purpose of the programme is to improve income and
de-risk livelihoods of rural households by strengthening
animal dependant livelihood options. Capability building
on improved package of practices, breed improvement,
provision of extension services and creation of rural
entrepreneurs to provide doorstep services are the key

components. Programme is aligned to Government of
India's National Livestock Mission (NLM). The programme
covered l ivel i hoods l i n ked to l arge rum i nants (cow & buffalo),
small ruminants (goat & sheep), piggery, fishery, poultry
and apiary in 16 states and 42 districts. During the
year, about 1.34 lakh artificial inseminations (Als) were
carried out which led to the birth of over 0.47 lakh high
yielding progeny and indigenous breeds. Cumulatively,
the figures for AIs and calving stand at over 30.90 lakhs
and 10.90 lakhs respectively. Under the programme,
1,870 women trained as 'Pashu Sakhis' have provided
extension services to animal owners of the villages.

Your Company is also working with dairy farmers in Bihar,
Jharkhand and West Bengal to improve productivity of
animals through several extension services and to facilitate
higher milk production. Qualified teams comprising
veterinarians and para-veterinarians have been deployed
to facilitate animal nutrition, animal health services, training
and capacity building towards improving productivity,
clean milk production and promoting commercial
dairy farming among farmers. During the year, about

38,000 animals of over 19,000 dairy farmers across
416 villages in nine districts of Bihar, three districts of
West Bengal and two districts in Jharkhand were supported
through cattle feed distribution, training programmes on
clean milk production, mastitis control and animal husbandry
services like deworming, ectoparasite control, etc.

On-farm Livelihood Diversification - Tree plantations

Your Company's pioneering initiative through the
Social Forestry programme covered over 37,300 acres
during the year. The said programme is also aligned
to Government of India's    National Afforestation

Programme objectives. It is currently spread across
16 districts in six states cumulatively covering
5.28 lakh acres in over 7,400 villages and 1.90 lakh poor
households. Integral to the Social Forestry programme
are the Agro-Forestry and Bund plantation models
that help small and marginal farmers to cultivate field
crops and trees together in the same field and realise
benefits of both annual income from crops and lumpsum
income from trees once in four years. These two models
cumulatively extended to over 2.68 lakh acres (part of
total Social Forestry area) and enabled food, fodder and

wood security. To create an additional income source
and improve resilience towards climate change, fruit
and other commercial species tree plantations have also
been initiated with farmers, which have covered over

40,000 acres till date.

Together with your Company's Farm Forestry programme,
this initiative has covered around 13.2 lakh acres till date
and generated over 240 million-person days of livelihood
for rural households, including women, poor tribal and
marginal farmers. Further, fast growing, high yielding
and disease resistant hybrid clones and saplings of
eucalyptus pulpwood developed by your Company
deliver significantly higher productivity vis-a-vis earlier
clones. The clones have been developed to grow under
varying ecological conditions, thereby building resilience
and contributing towards increasing income for the
farming community.

Besides enhancing farm level employment, generating
incomes and increasing green cover, these large-scale
initiatives also contribute meaningfully to the nation's
endeavour to create additional carbon sinks for tackling
climate change.

In addition to the above, the Social and Farm Forestry
initiative of your Company, through a multiplier effect, has
led to improvement in pulpwood and fuelwood availability
in Andhra Pradesh, Telangana, Karnataka and Odisha.

Women Empowerment

During the year, this initiative in catchment geographies
provided a range of gainful livelihood opportunities to
over 2.67 lakh poor women, taking the cumulative coverage
to over 4.51 lakhs through livelihood interventions for
Self Help Groups (SHGs), women in agriculture and allied
services, cadre of service providers in the community
and ultra-poor women. This initiative is also aligned to
National Rural Livelihoods Mission's objective of
empowering and creating Lakhpati Didis.

Targeting Hardcore Poor programme focusing on
empowering ultra-poor women through mentoring,
skilling to run enterprises and asset support for the same
has covered about 40,680 women in your Company's
core catchments through a two-year graduation
intervention. Studies have shown that the income of these

ultra-poor women has increased by more than five-fold.
Aided by the programme, there is also a substantial
improvement in Human Development Indicators.
Currently, the programme is operational in 10 districts in
eight states.

As an amplification strategy, the financial literacy and
inclusion project, in partnership with Madhya Pradesh
State Rural Livelihood Mission (MPSRLM) and
CRISIL Foundation continued in its second phase of
partnership covering all 52 districts of Madhya Pradesh.
Basis the learnings in MP, the programme continued
to expand to other states also, now covering over
98,900 existing SHGs with 10 lakh members.
The Financial Literacy programme has cumulatively covered
over 3.9 lakh SHGs benefiting over 38.50 lakh women
spread across 80 districts in 15 states. Over 31 lakh scheme
linkages for trained women have also been facilitated with
access to bank accounts and Government social security
schemes till date with the support of self-sustaining cadre of
Yojana Sakhis, who also earn by charging fees from women
for creating these linkages.

Your Company's 'Aashirvaad Raho 4 Kadam Aage'
programme is encouraging women empowerment by
providing skills related to food processing sector as
well as on other livelihood opportunities. Spread across
four states, the programme has covered over
30,700 women beneficiaries.

Education

The Primary Education programme aligned with National
Education Policy 2020, aims to provide children from
weaker sections of society access to education with
focus on learning outcomes and retention. Operational
in 50 districts of 15 states, the programme covered
over 6.57 lakh children during the year, taking the
cumulative coverage to over 21.80 lakh children. Further,
125 Supplementary Learning Centres (SLCs) has
remained operational during the year, mainstreaming
more than 4,000 out-of-school children into the formal
education system, taking the cumulative number to
over 16,800.

Considering importance of Early Childhood Care and
Education (ECCE) as per National Education Policy 2020,

building capabilities of Anganwadi Sevikas on ECCE has
also been one of the focus areas. Your Company has
partnered with Women Development and Child Welfare
Department in Andhra Pradesh to strengthen capacity of
over 55,600 Anganwadi Sevikas across all the 26 districts.
Through a cascade approach, the Sevikas have reached
out to 4.16 lakh children during the year. Your Company
is also having a similar partnership in Saharanpur,
Uttar Pradesh, for improving ECCE (Poshan Bhi,
Padhai Bhi) of children by combining nutrition and
education interventions and has covered 50,000 children
in the district.

Over 640 Government primary schools and Anganwadis
were provided infrastructure support comprising
boundary walls, additional classrooms including
operationalising smart classrooms, solarisation,
sanitation units and furniture, taking the total number
of Government primary schools and Anganwadis
covered till date to over 4,100. Infrastructure support to
Government schools has helped in increasing enrolment,
particularly of girls, in schools. To ensure sustainable
operations and maintenance of infrastructure provided,
more than 1,480 School Management Committees and
1,370 Child Cabinets & Water and Sanitation (WATSAN)
Committees were operational in various schools
during the year with active involvement of students
and teachers.

To address the issue of drop out, especially of girls in
secondary and senior secondary level, a pilot intervention
continued in Pudukkottai, Munger and Kolkata covering
2,500 girl students. Mentoring for career intentionality,
building 21st century skilling and mainstreaming out of
school girls through National Open Schooling System
are the major aspects of this intervention.

Your Company's 'Bounce of Joy' programme is aimed to
foster holistic development and create a positive impact on
children's lives through physical fitness including sports.
Execution of the programme is done by collaborating with
schools for training of Physical Education (PE) teachers to
help them foster holistic development amongst students
through sports like football. Through the trained teachers,
the programme has reached out to 43,450 students across
140 schools in two states.

Your Company's 'Sunfeast Bigger Fantasies' programme
has covered 55,970 children from 60 schools across two
states encouraging and nurturing their innate curiosity
and ability to think laterally. 1,500 Young instructors
were trained, who in turn engaged with these children
to encourage creative thinking & expression, and peer
learning & collaboration. 60 creativity fairs were also
conducted with active participation from students.

Skilling & Vocational Training

This programme, aligned to Pradhan Mantri Kaushal
Vikas Yojana provides training in market linked skills to
youth from marginalised sections including differently
abled, to enable them to engage in decent livelihoods.
15,600 youth across 34 districts in 16 states were trained
under different courses during the year, of which nearly
52% were female. Cumulatively, around 1.27 lakh youth
have been trained under the skilling programme. To scale
up the skilling programme, your Company has also initiated
pilots for potential pathways of skilling in the community
itself (1,700 trained in the year) and leveraging other skill
training partners in the ecosystem (893 in the year).

Further, the programme for skilling differently abled youth
running in Karnataka and West Bengal last year, was
expanded to Maharashtra, Uttar Pradesh and Odisha by
establishing new centres and also leveraging the existing
centres of implementing partners. During the year,
850 youth (cumulatively over 1,000) were trained and over
530 have already been placed. Further, your Company's
Sixth Sense programme, focused on making an impact
on the lives of visually challenged, covered 150 such
individuals across five cities.

Sanitation

Your Company continues to adopt a multi-pronged
approach towards improving public health and hygiene
across 30 districts and 13 states. The programme focuses
on ensuring sustainability of Open Defecation Free (ODF)
habitations and then making them ODF+ through improved
hygiene, sanitation and waste management practices
which is aligned with Swachh Bharat Mission 2.0.

Water, Sanitation and Hygiene (WASH) programme
was implemented in schools that included construction
of sanitation units in schools, separate for girls and

boys, and also focused on driving behaviour change
among over 1.13 lakh school students through
2,300 WASH campaigns.

Your Company's 'Savlon Swasth India Mission'
programme has been a front runner in driving behavioural
change in hand hygiene through innovative experiential
training in primary schools. The Mission rooted in the
belief of 'Swasth Bacche, Mazboot Desh' drove a range of
initiatives to aid and enable the country in its fight against
preventable infections that create huge economic burden
on the country.

The programme, focused on spreading awareness for
habit building of hand hygiene through interactive sessions
across India, covered 16,770 schools and reached out to
about 32 lakh children during the year.

Waste Management

Your Company's initiatives focus on creating replicable,
scalable and sustainable models of municipal and rural
waste management that can be implemented across the
country to ensure that minimal waste goes to landfills.
Details of these models are provided in the section
on 'Building a Circular Economy for Post-Consumer
Packaging' above.

Health & Nutrition

Your Company is adopting a holistic approach towards
Community Healthcare, focusing on two major components
- preventive health care and curative services. Community
healthcare is initiated to address the challenges of
awareness, availability, accessibility and affordability. The
objective of the initiative is to improve health and nutrition
by strengthening institutional capacity, supplementing
existing infrastructure, promoting greater convergence
with existing Government schemes like National Health
Mission, leveraging technology and increasing access to
basic primary and secondary healthcare services.

A two-pronged approach aligned to Government's
POSHAN Abhiyan was adopted under Maternal and Child
Health and Nutrition (MCHN) programme:

• Focusing on first '1,000 days of life' in high malnutrition
catchments covering mothers and children, and

• Addressing anaemia at scale among all age groups
through screening under Anaemia Mukt Bharat
(AMB), Rashtriya Bal Suraksha Karyakaram (RBSK)
and thereafter, loop closure through awareness
creation and linkages with Government schemes.

Capacity building of frontline resources like Anganwadi
Sevikas and ASHA workers is an integral part of the
intervention and 16,000 were trained during the year
on engagement with community, making effective
'six home visits' and localised nutrition promotion.

Screening of over two lakh women and children for anaemia
was done in partnership with Government for baselining
and identifying priority areas for interventions. A 4E
approach of identifying hotspots (Exploration); awareness
on dietary diversity and hygiene (Education); promoting
nutrition gardens and consumption of locally grown
'5 Food Groups' through nutri-groups (Encouraging); and
building capabilities of ASHA and Anganwadi Sevikas on
identification and management of anaemia (Empower)
was adopted to address the issue.

Around 15.24 lakh people spread across 21 districts
in nine states were covered during the year, under
your Company's MCHN initiative aimed at improving the
health-nutrition status of women, adolescents and children.
This included the partnerships with the Directorate of
Women and Child Development, Assam for eight districts
including seven aspirational districts, and another with
the Child Development Services and Nutrition Department
Saharanpur, Uttar Pradesh.

Project Samposhan was undertaken during the year to
sensitise the community on nutritional value of fruits and
vegetables, leveraging their existing agriculture expertise to
cultivate sustainable and healthy food. 40 youth trained as
Poshan Sathis engaged with over 1,000 rural households
and trained them on farming system for nutrition and setting
up nutrition gardens. SHGs and farmer collectives were
also strengthened to create local ecosystem for nutrition
products. Iodine deficiency is considered as one of the
most common causes of preventable mental impairment
and constitutes a significant public health problem.
Under the 'Aashirvaad Smart India' intervention, over
seven lakh people were reached out through awareness
on iodine deficiency disorders and healthy eating.

As part of the community healthcare programme
'ITC Swaasth Kiran' initiative was launched during
FY 2021-22 in Saharanpur and Munger districts. Under
the initiative, during the year, thirteen Mobile Medical
Units (MMU) were functional (seven in Saharanpur &
six in Munger). These MMUs have provided free medical
consultation and medicines to the rural community at their
doorstep. During the year, nearly 2.22 lakh individual
engagements were done with community members
across 796 villages, 58% of which were with women.
Further, 43,400 diagnostic tests were conducted and
1,130 referrals made during the year. With the
involvement of the Rogi Kalyan Samitis, upgradation of
23 Primary Health Centres (PHCs) based on Indian Public
Health Standard was also done, taking the cumulative to
37 in five states. This has helped in increased footfall of
patients, including higher number of institutional deliveries.

Understanding the need for high-quality doorstep
eye care for the community, your Company also
continued its innovative layered eyecare intervention
in Saharanpur in Uttar Pradesh, as part of which
four Mobile Vision Units (MVU) were operational in
services in rural Saharanpur. These MVUs equipped with
high end ophthalmic equipment can screen and diagnose
eye ailments such as Cataract, Diabetic Retinopathy,
Glaucoma and other diseases. During the year, more
than 1.76 lakh community members have been screened,
of which 16,589 cases were referred to the MVUs,
and thereafter 1,082 cataract surgeries done at
Dr. Shroff's Charity Eye Hospital in Saharanpur, who are
the partner for this intervention.

Your Company continued to enhance awareness on
various health related issues like menstrual & personal
hygiene, reproductive health and diarrhoea through a
network of 366 women Village Health Champions (VHCs).
These VHCs engaged with the community for promoting
behaviour change and selling relevant health products
to the community, thereby also earning a livelihood. The
programme was operational in two districts of Madhya
Pradesh and six districts of Uttar Pradesh, covering nearly
1.45 lakh women during the year.

To make potable water available to local communities in
Andhra Pradesh and Karnataka, Reverse Osmosis (RO)
water purification plants were set up in villages where

the water quality was poor. With the establishment of
36 new RO plants during the year, a total of 205 RO plants
are operational providing safe drinking water to over
2.5 lakh rural population.

ITC Sangeet Research Academy

The ITC Sangeet Research Academy (ITC SRA),
established in 1977, is an embodiment of your Company's
sustained commitment to a priceless national heritage.
Your Company's pledge towards ensuring enduring
excellence in Classical music education continues to
drive ITC SRA in furthering its objective of preserving
and propagating Hindustani Classical Music based on the
age-old principle of 'Guru Shishya Parampara'.

The Academy is modelled as a professionally run institution
that epitomises the teaching of Hindustani Raga Music.
Through its eminent Gurus, it imparts intensive training
and quality education in Hindustani Classical music
to its scholars. The present Gurus of the Academy are
Padma Bhushan Pandit Ajoy Chakrabarty,
Padmashri    Pandit    Ulhas    Kashalkar,

Pandit Partha Chatterjee, Vidushi Subhra Guha,
Pandit Uday Bhawalkar, Shri Omkar Dadarkar,
Shri Abir Hossain and Shri Brajeswar Mukherjee.
Pandit Uday Bhawalkar was conferred the
Rashtriya Kalidas Samman by Government of
Madhya Pradesh in November 2024 for the year 2022-23.

The Academy's focus continues to be on nurturing
exceptionally gifted students selected from across
the country through a system of multi-level auditions.
Several scholars of the Academy have performed at
various music festivals and have also been recipient
of prestigious awards and accolades. Additionally,
the Academy has presented its scholars and young
musicians in ITC Mini Sangeet Sammelans, concerts
and Baithaks in locations such as Jabalpur, Hubli,
Dharwad, Sirsi, Lucknow, Jodhpur, Dehradun, Goa, Pune
and Bangalore enabling the Academy to fulfil its
avowed objective of preserving and propagating
Hindustani Classical Music.

On the occasion of India's 78th Independence Day,
ITC SRA composed a special piece of music as a tribute
to the nation, which was presented on 15th August.

The video 'Desh Ek Raag' was based on Raag Desh
and featured scholars of the Academy. The year also
marked its first Thumb Festival in March 2025 featuring
renowned artists of the genre as well as scholars of the
Academy. Creation of the next generation of masters of
Hindustani Classical music for the propagation of a
precious legacy continues to be the Academy's objective.

Forging Multi-Stakeholder Partnerships

Your Company's Social Investments Programme lays
continuous emphasis on building partnerships of value
for driving innovation & gaining contemporary knowledge
while effectively amplifying and executing programmes.

Your Company has over the years formed Knowledge
Partnerships with several national & international
organisations/agencies to maintain contemporariness
and leverage latest knowledge/technical know-how to
continuously improve the quality of programmes.

Public-Private Partnerships (PPP), aimed at pooling
resources, and partnership with Governments are
effectively leveraged to scale-up and amplify programmes
implemented in your Company's catchment areas.
During the year, three new PPPs were signed.

The meaningful contribution made by your Company's
Social Investments Programme to address some of
the country's key development challenges, has been
possible in significant measure, due to your Company's
partnerships with implementation partners such as
AFPRO, Anudip Foundation, Bandhan Konnagar,
Cheshire Disability Trust, DHAN Foundation,
Don Bosco Tech Society, DSC, Dr. Reddy's Foundation,
Educate Girls, FES, FINISH, IGD, KHPT, MYKAPS,
MYRADA, Makkala Jagriti, Manav Vikas Sansthan,
NCHSE, Pratham, SEWA Bharat, SMGVS, Umang,
WASH Institute, Water for People, Youth4Jobs and
Youth Invest amongst others. These partnerships, which
bring together the best-in-class management practices
of your Company and the development experience
and mobilisation skills of implementation partners, will
continue to provide innovative grassroot solutions to some
of India's most challenging problems of development
in the years to come.

CSR Expenditure

The annual report on Corporate Social Responsibility
activities, as required under Sections 134 and 135 of the
Companies Act, 2013 read with Rule 8 of the Companies
(Corporate Social Responsibility Policy) Rules, 2014
and Rule 9 of the Companies (Accounts) Rules, 2014, is
provided in the Annexure forming part of this Report.

Environment, Health & Safety

Your Company's Environment, Health & Safety (EHS)
strategies are directed towards achieving the greenest
and safest operations across all your Company's units
by optimising natural resource usage and providing a
safe and healthy workplace. Systemic efforts continue
to be made towards natural resource conservation by
continuously improving resource-use efficiencies.

Your Company believes that a safe and healthy work
environment is a pre-requisite for ensuring employee
well-being and adopting best practices in occupational
health & safety bears a direct impact on overall
performance. With an aim to percolate safety deeper
into your Company's operational practices and achieve
the 'Zero Accident' goal, your Company has adopted a
comprehensive EHS strategy founded on two pillars:
'Safety by Design' and 'Safety by Culture'.

Safety

Your Company sustained focus on 'Safety by Design'
by continuously striving to improve safety performance
and incorporating best-in-class engineering standards
for all investments in the built environment. Designs for
all new greenfield & brownfield project investments are
scrutinised to ensure compliance with relevant standards
and codes on safety. Periodic Environment, Health &
Safety audits continue to be carried out in operational
units to verify compliance with relevant standards.

To drive a culture of safety, your Company, in addition
to comprehensive focus on training, continues to hold
structured conversations with workers on 'Safe and
Unsafe' Acts. These are supplemented by adoption of
keystone behaviours that inculcates individual ownership
for safe behaviour. Your Company has also made use
of Design Thinking principles for seamless integration

of safety in business operations. These initiatives are
bringing in positive behavioural changes.

Several national awards and certifications received by
various units reaffirm your Company's commitment to
provide safe and healthy workplace to all.

R&D, QUALITY AND PRODUCT DEVELOPMENT

Your Company's state-of-the-art Life Sciences and
Technology Centre (LSTC) in Bengaluru is at the core
of driving science-led product innovation to build and
support your Company's portfolio of world-class products
and brands. Over the years, LSTC has emerged as
a robust innovation engine that is a key enabler of the
'ITC Next' growth strategy. Reinforced with world-class
infrastructure, resourced with a diverse team of over
400 highly qualified scientists, LSTC continues to drive
various initiatives to provide differentiation and competitive
edge to your Company's brands and products.

Driving purposeful innovations that fulfil the needs of the
Indian consumer through superior offerings remains the
key objective of LSTC. Centres of Excellence across
domains viz. Biosciences, Agri-sciences & Materials
sciences enabled building capabilities over the years
to cater to the constantly evolving needs of consumers.
Focused research across identified domains viz. Health
& Wellness, Formulation Design, Sustainable Materials &
Packaging, Agro-forestry and Crop Science has enabled
the teams to harness contemporary advances in relevant
core areas to translate 'proofs of concept' to novel product
opportunities. Bearing testimony to LSTC's innovation
capabilities while building the intellectual assets for your
Company, over 800 patent applications have been filed
till date. Robust risk management practices are in place
to ensure that your Company's intellectual properties
remain adequately protected and to ensure mitigation of
information and infrastructure risk.

Research programmes and projects are structured
through close alignment with the various Businesses of
your Company resulting in a robust innovation pipeline.
Additionally, in line with your Company's relentless focus
on operational excellence and quality, each Business
is mandated to continuously innovate on materials,
processes and systems to enhance their competitiveness.

Your Company has been a forerunner in introducing
first-to-market innovative products for Indian consumers.
In today's operating scenario of geopolitical tensions
and inflationary pressures, LSTC scientists and
product development teams continue to enable various
ITC businesses to deliver a range of differentiated,
superior quality products at competitive costs. Innovative
science-based Platform projects have been developed
to solve a range of consumer and technical product
challenges. Novel technologies are continuously being
leveraged to drive creation of healthier foods through
systematic reduction in salt, sugar and fat without
compromising on sensory attributes. Leading edge
technology platforms in Personal Health & Hygiene,
Health & Wellness continue to power innovation and
develop next generation product offerings to serve
emerging consumer needs. LSTC's unique competencies
in Sustainable Materials and Packaging have enabled
development of packaging options with high degree
of recycled plastics content and novel barrier coating
solutions to create next generation environmentally
friendly packaging solutions.

In Agro-Forestry and Crop Science, your Company's
scientists have established different cutting-edge tools &
technology platforms for improving tree & crop species of
your Company's interests (like yield, quality, abiotic & biotic
stress) for securing the raw material. Ongoing research
has major emphasis on developing climate resilient crops
and pulp wood species in order to address the security
of raw material supplies across your Company's value
chains and also ensuring enhanced farmer profitability.
Research on wheat and potato varietal securitisation are
at advanced stages of deployment to achieve flexibility
in sourcing of raw material, create region-specific blends
and ensure robust agro-climatic adaptability for growing
and sourcing raw materials closer to the factories at
competitive costs, in addition to reducing the carbon
footprint. Future-ready, alternate value chains that
mitigate risks arising out of disruptions to existing sourcing
models continue to be explored. LSTC has deployed
various digital transformation tools at farm level to
bring in predictive capability with agility. LSTC, in
collaboration with the Agri and Branded Packaged Foods
Businesses, endeavours to ensure that science-based

ideas are fully integrated across the value chain from
farm to fork.

Infrastructure and capabilities are strengthened
continuously keeping in pace with the global developments
in science and technology. Expanding capabilities include
spreading the acreage of new tree clones with superior
properties, developing modern instrumentation for testing
very low levels of actives or contaminants, measuring
barrier properties (air and water permeability) of coated
paper substrate, etc.

Rigorous systems, processes and industry best practices
are continuously upgraded to secure quality certifications
of the highest levels - a key enabler in delivering products
that follow the highest standards in quality, safety and
efficacy to the Indian consumer. All branded packaged
foods manufacturing units of your Company not only
have ISO quality certification but also follow the highest
standards under the integrated food quality management
system-FSSC 22000; these systems ensure adherence
to internationally accepted quality standards in producing
safe and high-quality food. All manufacturing units of
the Branded Packaged Foods Businesses (including
contract manufacturing units) operate in compliance
with stringent food safety and quality standards.
Your Company's food quality assurance laboratories
are accredited by the National Accreditation Board for
Testing and Calibration Laboratories (NABL) under ISO
17025, a global standard for testing and calibrating labs,
which guarantees quality. Additionally, the quality of all
FMCG products of your Company is monitored through
best-in-class customer-centric 'Quality Control and
Quality Assurance Processes' and 'Product Quality
Ratings Systems' (PQRS) enhancing competitive
superiority of your Company's product offerings.

In its quest to continuously enhance efficiency and
be future-ready, LSTC is developing and deploying
cutting-edge digital tools for quality performance analytics,
benchmarking and strengthen quality management
systems. Going forward, LSTC will continue to identify
growth opportunities leveraging your Company's
diverse core competencies and R&D insights emerging
from close consumer interactions and contemporary
science & technology.

PROCEEDINGS INITIATED BY THE ENFORCEMENT
DIRECTORATE

In the proceedings initiated by the Enforcement Directorate
in 1997, the appropriate authority after hearing arguments
on behalf of your Company has passed several orders
in favour of your Company and dropped some of the
show cause notices issued by the Directorate. In respect
of some of the remaining notices, your Company filed
writ petitions challenging their validity. The Honourable
Calcutta High Court heard some of these writ petitions
to completion, and the proceedings in respect of these
notices were quashed. The remaining writ petitions and
notices are pending adjudication/hearing.

Meanwhile, some of the prosecutions launched by the
Enforcement Directorate have been quashed by the
Honourable Calcutta High Court; while the remaining have
been challenged before the High Court and are pending.

TREASURY OPERATIONS

Your Company's treasury operations continued to focus
on deployment of surplus liquidity and management of
foreign exchange exposures within a well-defined risk
management framework.

During the year market interest rates declined sharply
across both short and long term maturities. The Reserve
Bank of India (RBI) adopted an accommodative monetary
policy stance, cutting the repo rate by a cumulative
50 basis points since April 2024 on the back of easing
inflation and to boost economic activity. In addition,
the RBI deployed several liquidity management tools,
which pushed the banking system liquidity from a deficit
position between November 2024 and February 2025 to
a surplus by the end of the financial year. The decline in
interest rates for longer maturities was further aided by
robust demand from Foreign Portfolio Investors following
the inclusion of Indian Government Securities in the
JP Morgan Emerging Markets Bond Index and an
improving fiscal position.

Investment decisions relating to deployment of surplus
liquidity continued to be guided by the tenets of Safety,
Liquidity and Return. Treasury operations focused on
proactive rebalancing of portfolio duration and mix, in
line with the evolving interest rate environment. Further,
continuous review and monitoring of credit worthiness,

including engagement with market participants, ensured
that the investment portfolio was not exposed to undue
credit risks.

In the currency market, the Indian Rupee (INR) witnessed
significant volatility during the year. While the INR
remained relatively stable during the first half of the
year supported by strong domestic fundamentals and
healthy capital inflows, the second half saw considerable
two-way movements. The weakness in the INR was
primarily attributed to the strengthening of the USD
relative to all major currencies, driven by concerns over
potential tariff hikes by the US Government. Additionally,
higher capital outflows during this period weighed on the
INR. However, the INR witnessed a rebound towards the
end of the year on the back of a narrowing trade deficit
and a weakening USD amidst heightened global trade
uncertainties. Robust foreign exchange reserves and
strategic interventions in the currency markets by the RBI
also provided support to the INR.

As in earlier years, commensurate with the size of the
temporary surplus liquidity under management, treasury
operations continue to be supported by appropriate
internal control systems, and independent check of
100% of transactions by your Company's Internal
Audit Department.

Your Company adopted proactive risk management
approach and actively managed foreign currency
exposures through appropriate hedging strategies and
market instruments to protect business margins.

DEPOSITS

Your Company's erstwhile Public Deposit Scheme closed
in the year 2000. As at 31st March, 2025, there were
no deposits due for repayment except in respect of two
deposit holders aggregating ' 20000 which have been
withheld on the basis of directives received from the
government agencies.

There was no failure to make repayments of Fixed
Deposits on maturity and the interest due thereon in terms
of the conditions of your Company's erstwhile Schemes.

Your Company has not accepted any deposit from the
public/members under Section 73 of the Companies Act,
2013 read with the Companies (Acceptance of Deposits)
Rules, 2014 during the year.

DIRECTORS
Changes in Directors

During the year, Ms. Pushpa Subrahmanyam and
Mr. Chandra Kishore Mishra were appointed, with your
approval, as Independent Directors of the Company for
a period of five years with effect from 2nd April, 2024 and
14th September, 2024, respectively. In the opinion of
the Board, Ms. Subrahmanyam and Mr. Mishra possess
the required integrity, expertise and experience for
appointment as Independent Directors of your Company.

Mr. Atul Singh representing Tobacco Manufacturers (India)
Limited ('TMI'), a subsidiary of British America Tobacco
p.l.c., Dr. Alok Pande representing the Specified
Undertaking of the Unit Trust of India ('SUUTI') and
Mr. Siddhartha Mohanty representing the Life Insurance
Corporation of India ('LIC') were appointed, with your
approval, as Non-Executive Directors of your Company
for a period of three years with effect from 2nd April, 2024,
27th July, 2024 and 1st January, 2025, respectively.

Mr. Sunil Panray, who is representing TMI, was
re-appointed, with your approval, as a Non-Executive
Director for a period of five years with effect from
20th December, 2024. Further, Messrs. Sumant
Bhargavan and Supratim Dutta were re-appointed, with
your approval, as Wholetime Directors of the Company
for a period of two years from 12th July, 2025 and
three years from 22nd July, 2025, respectively.

Mr. Shyamal Mukherjee will complete his present
term as an Independent Director of your Company on
10th August, 2026. The Board of Directors of your Company
('the Board'), on the recommendation of the Nomination
& Compensation Committee, has recommended for
the approval of the Members, the re-appointment of
Mr. Mukherjee as an Independent Director of your
Company for a period of five years with effect from
11th August, 2026. Appropriate resolution seeking
your approval to the above is appearing in the Notice
convening the 114th Annual General Meeting ('AGM')
of your Company.