CONTENTS

1 CONTENTSITC s Foods Business : Creating Consumer Delight Board of Directors and Committees .. 01 report on Corporate Governance .. 10 Shareholder Information .. 24 report of the Directors & Management Discussion and Analysis .. 36 Certifi cate of Compliance from Auditors .. 78 CEO and CFO Certifi cation .. 79 Balance Sheet .. 80 Statement of Profi t and Loss .. 81 Cash Flow Statement .. 82 Notes to the Financial Statements .. 83 report of the Auditors .. 124 Guide to Subsidiaries/Joint Ventures/Associates .. 127 Consolidated Financial Statements .. 129 Ten Years at a Glance .. 176 Financial Highlights Business Update : ITC InfotechSustainability Updates : For All Our TomorrowsFMCG : Select LaunchesAwards and AccoladesTo enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainablestakeholder valueMISSIONS ustain ITC s position as one of India s most valuable corporations through world class performance,creating growing value for the Indian economy and the Company s stakeholdersVISIONTC s Branded Packaged Foods business is one of the fastest growing foods businesses in India, driven by the market standing and consumer franchise of its seven popular brands - Aashirvaad, Sunfeast, Bingo!

2 , Kitchens of India, mint-o, Candyman and Yippee! Over the past 5 years, the business has grown at an impressive rate faster than that of the s Foods brands delight millions of households with a wide range of differentiated, value-added products developed by leveraging ITC s in-house R&D capabilities, relevant consumer insights, a deep understanding of the Indian palate gained from its Hotels business, its agri-sourcing & packaging strengths, exciting, innovative communication and an unmatched distribution India s rapid economic growth and rising disposable incomes, ITC s Branded Packaged Foods business is well-positioned to ride this boom to secure robust, long-term growth. The business continues to invest in every aspect of manufacturing, distribution and marketing to ensure that it can leverage emerging opportunities and fulfi ll its aspiration of being the most trusted provider of Branded Packaged Foods in the Limited - report and Accounts 2012 FOODS BUSINESS:ITC SCREATING CONSUMER DELIGHTIBEST-IN-CLASSCRAFTINGPRODUCTSTC s investments in state-of-the-art technology give it a competitive edge in terms of scale, world-class quality, product innovation and meeting exacting standards of food safety and hygiene.

3 Going beyond process control, ITC ensures that quality standards are scrupulously adhered to while choosing ingredients that go into the preparation of its food products. Automatic processes, bulk material handling systems and specifi c hazard mitigating equipment in production lines are some leading practices introduced by ITC s Foods s uncompromising commitment to the health and safety of its consumers ensures adherence to the highest levels of quality, safety and hygiene standards in manufacturing processes and in the supply chain. All ITC-owned manufacturing units are Hazard Analysis and Critical Control Point (HACCP) certifi ed. The quality performance of all manufacturing units is monitored continuously Limited - report and Accounts 2012 IINTERNALLEVERAGINGCOMPETENCIESL everaging the ITC e-Choupal networkSourcing high quality identity-preserved agri commodityTC s Foods business has successfully blended multiple internal competencies to provide an unbeatable quality advantage to the consumer.

4 ITC s sourcing skills residing in its Agri business, especially the path-breaking e-Choupal initiative, impart a signifi cant competitive advantage in procuring raw material - be it for Aashirvaad atta produced from handpicked whole wheat, quality-assured Aashirvaad spices or superior chipstock potatoes for Bingo! snack Master Chefs of ITC Hotels bring their culinary insights, recipes and creative advice to help fashion innovative products across categories. The expertise of the Master Chefs provided ITC s Foods business the opportunity to create ready-to-eat gourmet cuisines under the Kitchens of India range. ITC s position as the fi rst choice supplier of high-end value-added packaging enables the Foods business to gain a superior look-and-feel for both its carton box and fl exible recognises the importance of winning at the fi rst moment of truth - the point where the consumer shops for the product.

5 Leveraging ITC s distribution strength built over 100 years, ITC s food products are now available in more than million outlets across India. ITC s superior service to the trade ensures freshness and visibility of ITC products at all times. In view of the growing importance of modern retail in the country, ITC has forged joint business plans with most leading organised retailers in the country so that the consumer always fi nds ITC products in the right place at the right Limited - report and Accounts 2012 Culinary insightsfrom ITC sMaster ChefsIProviding world-class packaging solutionsExtensive Trade Marketing and DistributionWORLD-CLASSCREATINGBRANDShe Foods business marketing philosophy is based on the key principles of creating innovative products which are extremely relevant to addressing various consumer needs and providing a superior overall experience.

6 These principles have helped the business create world-class brands which will continue to be its engines of growth and profi the expertise of ITC s Agri-Business, the best quality wheat is sourced and carefully blended to create gold standard Aashirvaad atta, making it India s packaged atta brand. In keeping with the trends of the continuously evolving Indian market, the Aashirvaad brand has been extended to two new variants Aashirvaad with multigrains caters to the need of the health conscious consumers and Aashirvaad Select made fully from the fi nest Sharbati grains addresses the need of consumers who seek only the also spans the product categories of Ready to Eat, Instant Mixes, Salt and - Creating a brand in a commodity marketTITC Limited - report and Accounts 2012 Sunfeast straddles all segments of the market led by Dark Fantasy at the premium end.

7 High quality married with exciting innovations has helped drive this category. Dark Fantasy Choco Fills has wowed the Indian consumer with its innovative centre-fi lled format and high-quality addition, the launch of the Dream Cream range of biscuits in two exciting and innovative dual cream formats further reinforces ITC s commitment to continuously delight the - Delighting the Indian palateIn less than fi ve years of gaining an all-India presence, the Bingo! range of snacks in four formats and over 15 fl avours, has been a resounding success with Indian consumers. Today Bingo! stands for some of the tastiest products in potato chips and fi nger snacks. Innovative fi rst-to-market formats like Mad Angles and Tangles have gained signifi cant traction with !: Irresistible tastes & combinations in snackingLaunched in September, 2010, Yippee! has won the hearts of Indian families who love the innovative round block, long, slurpy and non-sticky noodles available in two Masala fl avours, making the brand immensely popular in a short period of time.

8 ITC has also pioneered the introduction of Instant Pasta in the country with six delicious fl ! and Pasta Treat: Winning HeartsITC Limited - report and Accounts 2012 Kitchens of India specialises in bringing to life age-old Indian dishes from across the country crafted by the Master Chefs of ITC s hotels, especially from the gourmet cuisines of Dum Pukht, Bukhara and Dakshin. All Kitchens of India products help consumers recreate an exclusive fi ne-dining experience in their own Mixes, an assortment of pre-made gravies, recreate the forgotten taste of authentic Indian cuisine. The Kitchens of India Chutneys serve as an ideal dip for all types of of India: Ready-to-eat gourmet cuisineCandyman and mint-o offer a wide range of mouthwatering and delicious sugar candies. Products like Choco Double clairs, which has chocolate both inside and outside, or Toffi choo, a fi rst-in-market strawberry toffee, or mint-o GOL, a chewy candy in unique fl avours, have all found widespread consumer support among young and old and mint-o: Exciting fl avours for all agesTHROUGH R&DINNOVATION he Foods business delivers world-class products to the consumer, crafted on the basis of deep consumer insights developed through extensive consumer immersions.

9 Learnings from consumer research help identify existing and emerging consumer needs. This continuous fl ow of information allows ITC s R&D and Product Development teams to create products that provide newer and superior benefi ts. These products and ideas are further tested using robust, rigorous methods to fi ne-tune the offerings and launch brands and variants which can fulfi ll consumer needs. ITC s dedicated R&D centre for its Foods business is engaged in cutting-edge research on functional foods, food quality, India-centric nutritional strategies and process innovations. From identifying a consumer need to extensive microbiological and chemical research to prototyping and product development, the R&D team covers the full cycle from an idea to a launch-ready Limited - report and Accounts 2012 TGLOBALWINNINGPALATESTC s Foods business exports its products to the key geographies of North America, Africa, Middle East and Australia.

10 Despite a continued slowdown in international markets, ITC Foods exports continue to grow robustly year after year. This has been achieved by taking the more arduous route of building a high-class Indian brand amongst mainstream American and Canadian consumers and also selling market leaders like Aashirvaad amongst the Indian diaspora. Signifi cant investments have been made in brand building in these markets as opposed to selling on the platform of price discounts. Kitchens of India currently ranks in the USA and in Canada amongst all brands in the ambient Indian Ready-to-Eat segment in traditional supermarkets. Targeted at the mainstream population and positioned at the premium end of the market, Kitchens of India is sold through leading chains like Kroger, Safeway, Walmart, Whole Foods and Loblaws, among others. Kitchens of India has also been listed in the popular COSTCO wholesale club towards the end of 2011.