A study of hr practices in ITC Document Transcript

1. A PROJECT REPORT On A Study of HR Practices in ITC Submitted in partial fulfillment of the requirement for the award of degree Of Master of Business Administration OF ITC Ghaziabad SESSION 2009 Submitted by: Raibahadur Singh Parihar Under the guidance of: MR. Ravi karan singh

2. Contents 1. Declaration 2. Acknowledgement 3. Preamble 4. Objective 5. Certification of ITC 6. Policies of ITC 7. Company profile 8. Growth history 9. SWOT Analysis 10.ITC Philosophy 11.HR Management 12.HR Practices at ITC 13.Action Plan 14.Graphical representation of data 15.Research Methodology 16.Questionnaire 17.Results & Conclusion 18.Suggestion

3. DECLARATION This project report on a study of HR practices in ITC in ITC Ghaziabad is submitted by me for the partial fulfillment of the course of M.B.A from Sikkim Manipal University. This is an original work done by me expected the guidance received which has been properly acknowledgement in the report. This is not the copy of any other report or any part of it hasnt been submitted for the award of any degree or diploma. Raibahadur Singh Parihar Sikkim Manipal University

4. ACKNOWLEDGEMENT I would like to express my gratitude towards Mr. Ravi Karan Singh for the valuable guidance, supervision and keen interest in study, progress and completion of this project. I would like to acknowledge the precious contribution General Manager H.R. who had been in continuous support through out the training period. I am also graceful to our faculty member Mr. Vishal whose precious guidance throughout the session has been of undaunted help to us in grooming our self and without which this work wasn't possible. I am also thankful to my friend Mr. Nitin Shukla (Senior HR Executive) whose help has given this shape to the report. Submitted by Raibahadur Singh Parihar Sikkim Manipal University

5. Preamble I have made this report as an essential part of IV semester course curriculum of MBA. The title of project is a study of HR practices in ITC at ITC Ghaziabad. In the course of my training I have had the golden opportunity of seeing the practical application of what ever theoretical knowledge was imparted to me in a class room studies at Learning Point Sec- 16 Noida I have had the good fortune in interacting with the executive and employee of ITC Ghaziabad who were very warm and cordial in their conduct toward me. My report mainly focuses on study of HR practices in ITC. I hope that the finding of the project work must conform with the companies expectation & suggestion made on that basis must be useful for the total performance of the employees of the ITC Ghaziabad. Raibahadur Singh Parihar Sikkim Manipal University

6. OBJECTIVE The main objective of the study is as follows: To know the recruitment & selection procedures adopted in this company. To improve training and development programs used in the company. To know how the performance of the employees is being appraised. To provide better employee welfare. To increase the labor productivity.

7. Certification of ITC ITC constantly endeavors to benchmark its products, services and processes to global standards. The Company's pursuit of excellence has earned it national and international honors. ITC is one of the eight Indian companies to figure in Forbes A-List for 2004, featuring 400 of "the world's best big companies". Forbes has also named ITC among Asia's'Fab 50' and the World's Most Reputable Companies ITC is the first Indian company and the second in the world to win the prestigious Development Gateway Award. It won the $100,000 Award for the year 2005 for its trailblazing ITC e-Choupal initiative which has achieved the scale of a movement in rural India. The Development Gateway Award recognizes ITC's e-Choupal as the most exemplary contribution in the field of Information and Communication Technologies (ICT) for development during the last 10 years. ITC e-Choupal won the Award for the importance of its contribution to development priorities like poverty reduction, its scale and replicability, sustainability and transparency. ITC has won the inaugural 'World Business Award', the worldwide business award recognizing companies who have made significant efforts to create sustainable livelihood opportunities and enduring wealth in developing countries. The award has been instituted jointly by the United Nations Development Programme (UNDP), International Chamber of Commerce (ICC) and the HRH Prince of Wales International Business Leaders Forum (IBLF). ITC is the first Corporate to receive the Annual FICCI Outstanding Vision Corporate Triple Impact Award in 2007 for its invaluable contribution to the triple bottom line benchmarks of building economic, social and natural capital for the nation.

8. ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility (Asia)' in 2007, the Award for CSR in Emerging Economies 2005 and Excellence in Corporate Governance' in the same year. These Awards have been instituted by the Institute of Directors, New Delhi, in association with the World Council for Corporate Governance and Centre for Corporate Governance ITC's cigarette factory in Kolkata is the first such unit in India to get ISO 9000 quality certification and the first among cigarette factories in the world to be awarded the ISO 14001 certification ITC Maurya in New Delhi is the first hotel in India to get the coveted ISO 14001 Environment Management Systems certification. ITC Filtrona is the first cigarette filter company in the world to obtain ISO 14001 ITC Infotech finds pride of place among a select group of SEI CMM Level 5 companies in the world. ITC's Green Leaf Threshing plant in Chirala is the first in India and among the first 10 units in the world to bag the Social Accountability (SA 8000) certification ITC Chairman Y C Deveshwar has received several honors over the years. Notable among them are: Year Award 2007 SAM/SPG Sustainability Leadership Award conferred at the International Sustainability Leadership Symposium, Zurich. 2006 Business Person of the Year from UK Trade & Investment, the UK Government organisation that supports overseas businesses in that country. 2006 Inducted into the `Hall of Pride' by the 93rd Indian Science Congress 2005 Honoured with the Teacher's Lifetime Achievement Award 2001 Manager Entrepreneur of the Year from Ernst & Young Retail Visionary of the Year from Images, India's only fashion and retail trade magazine 1998 Honorary Fellowship from the All India Management Association 1996 Distinguished Alumni Award from IIT, Delhi 1994 Marketing Man of the Year from A&M, the leading marketing magazine 1986 Meridien Hotelier of the Year ITC has won the 'Enterprise Business Transformation Award' for Asia Pacific (Apac), instituted by Infosys Technologies and Wharton School of the University of Pennsylvania for its celebrated e-Choupal initiative.

9. ITC is the only Indian FMCG Company to have featured in the Forbes 2000 list. The Forbes 2000 is a comprehensive ranking of the world's biggest companies, measured by a composite of

sales, profits, assets and market value. The list spans 51 countries and 27 industries. ITC continues its dominance of The Economic Times' Brand Equity listing of India's 100 Biggest FMCG Brands, with three brands from its stable making it to the top five. Gold Flake remains India's biggest FMCG brand in terms of sales. Navy Cut ranks at No. 4. ITC's Scissors brand ranks at No 5 and is the only new entrant into the top 10. Restaurant magazine has chosen Bukhara at the ITC Maurya, New Delhi as the best Indian restaurant in the world and the best restaurant in Asia. Bukhara has also been adjudged one of the top 50 restaurants in the world by the London based magazine 'The Good Food Guide'. Bukhara is the only South Asian restaurant to figure in the list. ITC's Lifestyle Retailing Business Division (LRBD) has won the "Best Supply Chain Practices Award" for time-effective and cost-efficient Logistics Management in Organized Retail. The awards were organized by Retailers Association of India (rai) in association with ITW Signode - the International leaders in packaging solutions. ITCs market strategies are: Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organizational capability with opportunities in domestic and export markets. Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology. Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality. Ensure that each of its businesses is world class and internationally competitive. Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITCs various businesses. Create distributed leadership within the organisation by nurturing talented and focused top management teams for each of the businesses. Continuously strengthen and refine Corporate Governance processes and systems to catalyse the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.

10. Sustain ITC's position as one of India's most valuable corporations through world class performance, creating growing value for the Indian economy and the Companys stakeholders To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value ITC's EHS Policy ITCs mission is to sustain and enhance the wealth-generating capacity of its portfolio of businesses in a progressively globalising environment. As one of Indias premier corporations employing a vast quantum of societal resources, ITC seeks to fulfil a larger role by enlarging its contribution to the society of which it is a part. The trusteeship role related to social and environmental resources, aligned to the pursuit of economic objectives, is the cornerstone of ITCs Environment, Health and Safety philosophy. ITCs EHS philosophy cognises for the twin needs of conservation and creation of productive resources. In the multi-business context of ITC, Corporate Strategies are designed to create enduring value for the nation and the shareholder, through leadership in each business and the attainment of world-class competitive capabilities across the value chain. The objective of leadership extends to all facets of business operations including Environment, Health and Safety. ITC is, therefore, committed to conducting its operations with due regard for the environment, and providing a safe and healthy workplace for each employee. Various

11. international and national awards and accreditations stand testimony to ITCs commitment to EHS. Such external recognition further reinforces the need to direct the collective endeavour of the Companys employees at all levels towards sustaining and continuously improving standards of Environment, Health and Safety in a bid to attain and exceed benchmarked standards, whether regulatory or otherwise. In particular, it is ITCs EHS policy - To contribute to sustainable development through the establishment and implementation of environment standards that are

scientifically tested and meet the requirement of relevant laws, regulations and codes of practice. To take account of environment, occupational health and safety in planning and decisionmaking. To provide appropriate training and disseminate information to enable all employees to accept individual responsibility for Environment, Health and Safety, implement best practices, and work in partnership to create a culture of continuous improvement. To instil a sense of duty in every employee towards personal safety, as well as that of others who may be affected by the employees actions. To provide and maintain facilities, equipment, operations and working conditions which are safe for employees, visitors and contractors at the Companys premises. To ensure safe handling, storage, use and disposal of all substances and materials that are classified as hazardous to health and environment. To reduce waste, conserve energy, and promote recycling of materials wherever possible. To institute and implement a system of regular EHS audit in order to assure compliance with laid down policy, benchmarked standards, and requirements of laws, regulations and applicable codes of practice. To proactively share information with business partners towards inculcating world-class EHS standards across the value chain of which ITC is a part. All employees of ITC are expected to adhere to and comply with the EHS Policy and Corporate Standards on EHS. ITCs EHS Policy extends to all sites of the Company. It will be the overall responsibility of the Divisional/SBU Chief Executives, through the members of their Divisional Management Committees, General Managers and Unit Heads, to ensure implementation of this Policy and Corporate Standards on EHS, including formation of various committees and designating individuals for specific responsibilities in respect of their Division/SBU.

12. The Corporate EHS Department is responsible for reviewing and updating Corporate Standards on EHS, and for providing guidance and support to all concern. Corporate Governance Preamble Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. Since the commencement of the liberalisation process, India's economic scenario has begun to alter radically. Globalisation will not only significantly heighten business risks, but will also compel Indian companies to adopt international norms of transparency and good governance. Equally, in the resultant competitive context, freedom of executive management and its ability to respond to the dynamics of a fast changing business environment will be the new success factors. ITC's governance policy recognises the challenge of this new business reality in India. DEFINITION AND PURPOSE ITC defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal resources, we believe that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations. CORE PRINCIPLES ITC's Corporate Governance initiative is based on two core principles. These are : i. Management must have the executive freedom to drive the enterprise forward without undue restraints; and

13. ii. This freedom of management should be exercised within a framework of effective accountability. ITC believes that any meaningful policy on Corporate Governance must provide empowerment to the executive management of the Company, and simultaneously create a

mechanism of checks and balances which ensures that the decision making powers vested in the executive management is not only not misused, but is used with care and responsibility to meet stakeholder aspirations and societal expectations. Cornerstones From the above definition and core principles of Corporate Governance emerge the cornerstones of ITC's governance philosophy, namely trusteeship, transparency, empowerment and accountability, control and ethical corporate citizenship. ITC believes that the practice of each of these leads to the creation of the right corporate culture in which the company is managed in a manner that fulfls the purpose of Corporate Governance. Trusteeship : ITC believes that large corporations like itself have both a social and economic purpose. They represent a coalition of interests, namely those of the shareholders, other providers of capital, business associates and employees. This belief therefore casts a responsibility of trusteeship on the Company's Board of Directors. They are to act as trustees to protect and enhance shareholder value, as well as to ensure that the Company fulfils its obligations and responsibilities to its other stakeholders. Inherent in the concept of trusteeship is the responsibility to ensure equity, namely, that the rights of all shareholders, large or small, are protected. Transparency : ITC believes that transparency means explaining Company's policies and actions to those to whom it has responsibilities. Therefore transparency must lead to maximum appropriate disclosures without jeopardising the Company's strategic interests. Internally, transparency means openness in Company's relationship with its employees, as well as the conduct of its business in a manner that will bear scrutiny. We believe transparency enhances accountability. Empowerment and Accountability : Empowerment is an essential concomitant of ITC's first core principle of governance that management must have the freedom to drive the enterprise forward. ITC believes that empowerment is a process of actualising the potential of its employees. Empowerment

14. unleashes creativity and innovation throughout the organisation by truly vesting decisionmaking powers at the most appropriate levels in the organisational hierarchy. ITC believes that the Board of Directors are accountable to the shareholders, and the management is accountable to the Board of Directors. We believe that empowerment, combined with accountability, provides an impetus to performance and improves effectiveness, thereby enhancing shareholder value. Control : ITC believes that control is a necessary concomitant of its second core principle of governance that the freedom of management should be exercised within a framework of appropriate checks and balances. Control should prevent misuse of power, facilitate timely management response to change, and ensure that business risks are pre-emptively and effectively managed. Ethical Corporate Citizenship : ITC believes that corporations like itself have a responsibility to set exemplary standards of ethical behaviour, both internally within the organisation, as well as in their external relationships. We believe that unethical behaviour corrupts organisational culture and undermines stakeholder value. ITC Ltd. Policy on Human Rights ITC believes that all its employees must live with social and economic dignity and freedom, regardless of nationality, gender, race, economic status or religion. In the management of its businesses and operations therefore, ITC ensures that it upholds the spirit of human rights as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the ILO. Policy ITC upholds international human rights standards, does not condone human rights abuses, and creates and nurtures a working environment where human rights are respected without prejudice. Implementation The Corporate Human Resources function of ITC is responsible for the Human Rights Policy design, implementation and updation.The policy is implemented at all locations of ITC through a set of separate policies and procedures covering each of the main constituents of human rights applicable at the workplaces.

15. Monitoring&Audit The assessment procedures for different constituents of this policy are defined against each specific policy. Consideration of Human Rights Impacts Across the Supply Chain As a large and multi-product enterprise whose products are benchmarked nationally and internationally, ITC's main supply chains can be grouped as follows: 1. For all its operations, technology, machinery and equipment are sourced from reputed and globally benchmarked suppliers/vendors who are expected to follow internationally accepted norms and standards on human rights. 2. ITC's major businesses are vertically integrated across several Divisions. A substantial part of the supply chain is therefore internal through strategic backward linkages. Common values relating to human rights performance are shared across this supply chain. 3. Being a major agri-based company, the agriculture sector is a major supplier of inputs for its operations. The bulk of agricultural commodities are procured from state controlled trading platforms and the open market. A very small proportion of ITC's business consists of supply chains comprising local vendors and suppliers. The policy framework for such entities is enunciated separately in 'Policy to Ensure Respect for Human Rights across the Supply Chain'. Policy to Prevent Discrimination at Workplace ITC acknowledges that every individual brings a different and unique set of perspectives and capabilities to the team. A discrimination-free workplace for employees provides the environment in which diverse talents can bloom and be nurtured. This is achieved by ensuring that a non-discrimination policy and practice is embedded across the Company in line with corporate principles and benchmarked business practices. Policy ITC's approach to its human resources is premised on the fundamental belief in fostering meritocracy in the organisation which, pari passu, promotes diversity and offers equality of opportunity to all employees. ITC does not engage in or support direct or indirect discrimination in recruitment, compensation, access to training, promotion, termination or retirement based on caste, religion, disability, gender, age, race, colour, ancestry, marital status or affiliation with a political, religious, or union organization or minority group.

16. Implementation The policy is communicated to all employees through induction programmes, policy manuals and intranet portals. The custodian of this policy is the head of each operational unit and Divisional Chief Executives of the respective business. ITC's complaints resolution procedure is premised on the freedom of employees to approach higher officials beyond his/her immediate superior. For the unionised employees, compliance of the policy is ensured through a robust grievance handling procedure and the presence of a union that brings violations to the notice of the unit HR head. Monitoring&Auditing The accountability for the application of the non-discrimination employment policy rests with the Unit Head who reviews anti-discriminatory complaints annually or on a case-by- case basis. The Corporate Human Resources function conducts non-discrimination reviews annually on a sample basis with unit heads and through onsite assessments ITC's Core Values are aimed at developing a customer-focused, highperformance organisation which creates value for all its stakeholders: Trusteeship As professional managers, we are conscious that ITC has been given to us in "trust" by all our stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis. Customer Focus We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction. Respect For People

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

leadership through teamwork. Excellence We do what is right, do it well and win. We will strive for excellence in whatever we do. Innovation We will constantly pursue newer and better processes, products, services and management practices. Nation Orientation We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels ITC believes that all its employees must live with social and economic dignity and freedom, regardless of nationality, gender, race, economic status or religion. In the management of its businesses and operations therefore, ITC ensures that it upholds the spirit of human rights as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the ILO. Policy ITC upholds international human rights standards, does not condone human rights abuses, and creates and nurtures a working environment where human rights are respected without prejudice. Implementation

18. The Corporate Human Resources function of ITC is responsible for the Human Rights Policy design, implementation and updation. The policy is implemented at all locations of ITC through a set of separate policies and procedures covering each of the main constituents of human rights applicable at the workplaces. Monitoring & Audit The assessment procedures for different constituents of this policy are defined against each specific policy. Consideration of Human Rights Impacts Across the Supply Chain As a large and multi-product enterprise whose products are benchmarked nationally and internationally, ITC's main supply chains can be grouped as follows: 1. For all its operations, technology, machinery and equipment are sourced from reputed and globally benchmarked suppliers/vendors who are expected to follow internationally accepted norms and standards on human rights. 2. ITC's major businesses are vertically integrated across several Divisions. A substantial part of the supply chain is therefore internal through strategic backward linkages. Common values relating to human rights performance are shared across this supply chain. 3. Being a major agri-based company, the agriculture sector is a major supplier of inputs for its operations. The bulk of agricultural commodities are procured from state controlled trading platforms and the open market. A very small proportion of ITC's business consists of supply chains comprising local vendors and suppliers. The policy framework for such entities is enunciated separately in 'Policy to Ensure Respect for Human Rights across the Supply Chain' Policy to Ensure Respect for Human Rights Policy across the Supply Chain

19. ITC provides products and services of superior quality and value by sourcing its technologies, equipment and inputs from reputed international and Indian manufacturers and suppliers. Common values, relating to human rights performance, are shared across the entire supply chain because ITC is committed to the importance of a socially responsible and accountable supply chain. Policy ITC nurtures an internal working environment which respects human rights without prejudice. Likewise, it expects its business partners to establish a human rights compliant business environment at the workplace. Implementation The responsibility for implementation of this policy rests with the Divisional Chief Executive of the concerned business and the Unit Manager. The policy is communicated internally through policy manuals and intranet portals, and externally by the HR personnel of concerned units to vendors/suppliers. Monitoring & Audit ITC has established a policy intent for mapping/monitoring progress and performance of existing and potential vendors/suppliers on human rights performance. Policy to Prevent Discrimination at Workplace ITC acknowledges that every individual brings a different and unique set of perspectives and capabilities to the team. A discrimination-free workplace for employees provides the environment in which diverse talents can bloom and be nurtured. This is achieved by ensuring that a non-discrimination policy and practice is embedded across the Company in line

with corporate principles and benchmarked business practices. Policy ITC's approach to its human resources is premised on the fundamental belief in fostering meritocracy in the organisation which, pari passu, promotes diversity and offers equality of opportunity to all employees. ITC does not engage in or support direct or indirect

20. discrimination in recruitment, compensation, access to training, promotion, termination or retirement based on caste, religion, disability, gender, age, race, colour, ancestry, marital status or affiliation with a political, religious, or union organization or minority group. Implementation The policy is communicated to all employees through induction programmes, policy manuals and intranet portals. The custodian of this policy is the head of each operational unit and Divisional Chief Executives of the respective business. ITC's complaints resolution procedure is premised on the freedom of employees to approach higher officials beyond his/her immediate superior. For the unionised employees, compliance of the policy is ensured through a robust grievance handling procedure and the presence of a union that brings violations to the notice of the unit HR head. Monitoring & Auditing The accountability for the application of the non-discrimination employment policy rests with the Unit Head who reviews anti-discriminatory complaints annually or on a case-by- case basis. The Corporate Human Resources function conducts nondiscrimination reviews annually on a sample basis with unit heads and through on-site assessments. Policy on Freedom of Association ITC's culture is characterized by cooperative relationships and high employee involvement that relies on building partnerships and interdependence. Adhering to these

21. principles has helped build, sustain and strengthen harmonious employee relations in the organisation. Policy ITC respects the employees' right to organize themselves into interest groups as initiatives of the workers, independent from supervision by the management. In keeping with the spirit of this Policy, employees are not discriminated against for exercising this right. Implementation The policy is communicated to all employees through induction programmes, policy manuals and intranet portals. The custodian of this policy is the HR head of each operational unit who reports directly to Unit Head on such issues. The actualisation of this policy is evident from the joint agreements and minutes that are signed between the union and the management. Monitoring & Audit Each ITC Unit has appropriate systems and checks to ensure compliance with the Policy and statutory provisions, including means for filing of grievances, collective bargaining agreements and minutes from worker meetings. Compliance with the Policy is regularly monitored by Divisional and Corporate HR. Policy Prohibiting Child Labour and Preventing Forced Labour from Workplace

22. The foundation of ITC's "No Child or Forced Labour policy" is based on the Company's commitment to find practical, meaningful and culturally appropriate responses to support the elimination of such labour practices. It thus endorses the need for appropriate initiatives to progressively eliminate these abuses. Policy ITC does not employ any person below the age of eighteen years in the workplace. ITC prohibits the use of forced or compulsory labour at all its units. No employee is made to work against his/her will or work as bonded/forced labour, or subject to corporal punishment or coercion of any type related to work. Implementation This policy is publicly available throughout the Company and clearly communicated to all employees in a manner in which it can be understood through induction programmes, policy manuals and intranet portals. The responsibility for the implementation of the policy rests with the Units HR Department and the security staff who do not permit underage persons to enter the factory as workers. Employment contracts and other records documenting all relevant details of the

employees, including age, are maintained at all units and are open to verification by any authorized personnel or relevant statutory body. Compliance with the policy is evident in the transparent system of recruitment and the policy of exit interviews which are undertaken by a manager not directly connected with the employee. For the unionised employees, compliance is also ensured through a robust grievance handling procedure and the presence of a union that brings violations to the notice of the unit HR head. Monitoring & Audit Sample checks of the records are undertaken annually by Corporate Human Resources function. Audit and assessment is undertaken annually by Corporate Internal Audit and the Environment, Occupation Health and Safety function. Policy on Information and Consultation on Changes

23. ITC's core values support an employee engagement process that aligns its employees with a shared vision and purpose of the Company in the belief that every individual brings a different perspective and capability to the team. ITC thus harnesses the creative potential of all its employees by promoting a culture of partnerships to unleash relevant synergies between different groups of employees. Policy All major changes in operations involving work processes, manning norms and other productivity linked issues are carried out after discussions with the employees and the recognized unions at each location. Implementation Business plans are shared with employees at all units through a series of formal communication meetings, and through the intranet portals. Unionised employees at the concerned units are informed of all major changes well in advance through their representatives. The responsibility for the implementation of the policy rests with the Unit's HR Department in the case of unionized employees and with the concerned Divisional Management Committees for other employees. The employees are given enough time to consider the implications of change and an opportunity to discuss their apprehensions, if any, with the management. The Policy is actualised through consultative meetings with representatives of employees, culminating in joint minutes/agreements. Monitoring & Auditing Compliance with the Policy is regularly monitored by the Unit Head.

24. HIV/AIDS: Policy Guidelines Background ITC is committed to providing a safe and healthy work environment to all its employees. These policy guidelines on HIV/AIDS are an endorsement of this commitment and, in particular, of the Company's commitment to specific programmes and actions in response to the HIV epidemic. The Company's position is based on scientific and epidemiological evidence that people with HIV/AIDS do not pose a risk of transmission of the virus to co-workers by casual, non-sexual contact in the normal work setting. Policy Guidelines Compliance The Company's policies on HIV/AIDS with regard to its employees will, at a minimum, comply with all relevant Central and State legislation and the Company will implement all policies and directions of the Government regarding HIV/AIDS whenever issued. 1. Prevention through Awareness The Company will provide to all its employees sensitive, accurate and the latest information about risk reduction strategies in their personal lives, with the objectives of reducing the stigma of HIV/AIDS, encouraging safe behaviour and improving understanding of treatment. 2. Safe and Healthy Workplace The Company is committed to providing a safe and healthy workplace to all its employees. It is the Company's objective that employees will have access to health services to prevent and manage HIV/AIDS. 3. Non-discrimination The Company will not discriminate against any employee infected by HIV/AIDS with regard to promotions, training and other privileges and benefits as applicable to all employees. i. A HIV positive employee will be allowed to continue to work in his/her job unless Medical conditions interfere with the specific job being done, in which case reasonable alternative working arrangements will be made; or

25. The employee is incapacitated to perform his/her duties and is declared medically unfit by a medical doctor, in which case the employee will be assisted to rehabilitate himself/herself outside the Company. ii.The Company will not make pre-employment HIV/AIDS screening mandatory as part of its fitness to work assessment. Screening of this kind refers to direct methods (HIV testing), indirect methods (assessment of risk behaviour), and questions about HIV tests already taken. iii. HIV/AIDS test will not be part of the annual health check-ups unless specifically requested for by an employee. 2. Confidentiality Voluntary testing for HIV/AIDS when requested for by the employee, will be carried out by private or community health services and not at the workplace. There will no obligation on the part of the employees to inform the Company about their clinical status in relation to HIV/AIDS. Information on clinical diagnosis of an employees' status in terms of his/her HIV/AIDS status if advised to the Company, will be kept strictly confidential. Management Approach Policy: The Company's commitment in the area of economic performance is encapsulated in its Vision statement, which is 'to sustain 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 stakeholders'. ITC's Mission is 'to enhance the wealth generating capability of the enterprise in a globalising environment delivering superior and sustainable stakeholder value'. The Company's strategy is to ensure that each of its businesses is world-class and internationally competitive in the Indian global market in the first instance, and progressively in the offshore global markets. ITC, as a premier 'Indian' enterprise, consciously exercises the strategic choice of contributing to and securing the competitiveness of the entire value chain of which it is a

26. part. This philosophy has shaped the Company's approach to business into 'a commitment beyond the market'. Goals and Performance: At the enterprise level the Company's goals include: Sustaining ITC's position as one of India's most valuable corporations Achieving leadership in each of the business segments within a reasonable time frame Achieving a Return on Capital Employed (ROCE) in excess of the Company's cost of capital, at all times Amongst listed companies in the private sector, ITC ranked 4th in terms of Gross Turnover and 3rd in terms of pre-tax profits for the financial year ended 31st March 2006. The Company ranked 6th by market capitalisation amongst listed private sector companies in the country, as at 31st March 2006. The Company has consistently achieved a ROCE well in excess of its cost of capital. Of the Rs.10,325 crores of 'value added' by the Company during the financial year ended 31st March 2006, 74% represented Contribution to the Exchequer. Please refer to the 'Report of the Directors and Management Discussion and Analysis' section of the Report and Accounts 2006 (available on itcportal.com) for a detailed discussion on the Company's market standing in each of the business segments. Context: Please refer to the 'Report of the Directors and Management Discussion and Analysis' section of the Report and Accounts 2006 for a detailed discussion on the business environment, opportunities, key challenges, etc. pertaining to each of the Company's businesses (available at www.itcportal.com).

27. ITC Ltd. GHAZIABAD UTTAR PRADESH INDIA 28. ITC limited is one of the top three private sector companies in India. It is a market leader in India in Cigarettes & Tobacco, hotels, packaging, specialty papers and paperboards. It has also entered into the life style retailing business with the lunch of the wills sports range of relaxed wear. It has also spin off its information technology (I.T) business into a wholly owned subsidiary to more aggressively pursue emerging opportunities. ITC has a market capitalization of around US $ 4 billion and a turnover of over US $ 1.8billion. It employees 12,000 employees

at over 60 locations across India, and nearly1,50,000 shares holders. Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its Evolution and the basic nature of its activity, all of which influence the choice of the form of Governance. The challenge of governance for ITC therefore lies in fashioning a model that Addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. Since the commencement of the liberalization process, India's economic scenario has begun to alter radically. Globalization will not only significantly heighten business risks, but will Also compel Indian companies to adopt international norms of transparency and good Governance. Equally, in the resultant competitive context, freedom of executive management and its ability to respond to the dynamics of a fast changing business environment will be the new success factors. ITC's governance policy recognizes the challenge of this new business reality in India. Indian leafs Tobacco Development (ILTD) division The leaf & tobacco arm of ITC Ltd. For over 9 decades, has pioneered the cultivation and development of cigarette tobacco in India. It is instrumental in making India succeed in the global cigarette tobacco market. ITC-ILTD is head quartered (HQ) at Guntur, in the state of Andhra Pradesh, the biggest agro-commercial center for tobacco. Mysore is the gateway to cigarette tobacco in the state of Karnataka. Sustaining ILTD leadership in the leaf business by combining the virtues of tradition with modernity, and delivering goods and services efficiently with a personal touch. ITLD give one key to superior business performance, it is his ability to turn the perceptions capabilities, and relationships of our people into the building blocks of the organization. His track record, so far, stands testimony to this recognition and the future will be no different. Tobacco & its processing ITLD is controlling from tobacco seed to finally tobacco. ITLD give adoption of contemporary Agro- techniques and the enterprising sprit of the

29. tobacco farmer have led to India being aknow-ledged as one of the most important tobacco producing countries in the world. Topical climate Coupled with two monsoons facilitates the Indian farmer to grow tobacco throughout the gear. Tobacco cultivation in India is spread over a large geographical area covering a wide range of Soils, each growing area producing a unique style of tobacco .The southern states of India, Andhra Pradesh and Karnataka are the Prime cigarette type tobacco growing regions with 4,00,000 hectares land under Tobacco cultivation. India is recognized as an ideal source for a variety of tobacco, offering sustainable quality produce at competitive prices through out the Year. ITLDs green leaf threshing (GLT) plants with a total capacity to process 520 metric Tones per day are comparable with the best in the world. They are fully automated with the latest equipment to process and deliver 100 million Kgs of high quality tobacco every year. It is no surprise that they enjoy ISO9002 and ISO14001 accreditations. He have two processing lines in the southern state of Andhra parades - chirala with 3 processing lines and antipathy with 1 processing line. Chirala unit is first unit in India who has received the Coveted Social Accountability Standard Certification (SA 8000). This unit ware housing facilities are benchmarked to international standard for hygiene and infestation control. ILTD have large wear housing capacity to stock around 100 M.Kg of finishes produce (Tobacco). Production process of cigarettes: - The production of cigarettes in ILTD two major process. One is primary process which includes So many sub processes, which we discussed later, and other is secondary process which includes final packing of cigarettes and lots etc. Primary process of cigarettes: - Under this process ILTD start from the leaf cutting, which he received from his GLT unit chirala. Chirala supply leaf all the production units of ILTD in 200kg

size pack. Production unit start from there point, First of all production unit cuts 200kg.pack in to 5-6 piece and put in to machine which give moisture 10-11% to 21%of leaf and up to 38% of stamc. After that he cut it into 30 cut and per inch length 140 cuts per inch length respectively through cottoned rolled squire (CRS). After the processing of cutting leaf he possesses through drying process and these times tobaccos have up to 15% moisturizer. When tobacco is cooled then he is passed into secondary proem. Before passes secondary proem both type of cutting result [Leaf and stems] is mixed up. The tobacco carmines and stems are then cooled and stacked in bins-ready to be rolled into cigarettes. Production division of ILTD

30. India leaf tobacco development (ILTD) is a major department of ITC which have four major production division across the country such as Bang lore, (Karnataka) munger (Bihar), Saharanpur (U.P.)& Kolkatta (W.B). These all four-production division is producing billion cigarettes per year. One thing is cam man amery all production division is that all units producing wills brand and other brand of IRC is depended upon the regional requirement of cigarettes. Wills is most valuable brand of ITC Ltd. And his share of total sales is % appox. Brand, name and his length are as follows: -. Brand, name and his length are as follows: -. S.No. Brand Name Filter/with out Filter Length 1 Classic Filter 82 mm 2 Gold Flake (King) Filter 82 mm 3 Gold Flake (Premiums) Filter 69 mm 4 Wills Navy Cut Filter 74 mm 5 Capstan Fl Filter 69 mm 6 Bristol Filter 69 mm 7 Wills Flake Filter 69 mm 8 Scissors Filter 69 mm 9 Scissors Filter 69 mm 10 Capstan Standard With out 58 mm 11 Bristol Standard With out 58 mm 12 India King Filter 82 mm Marketing Division ILTD have four marketing office for maintaining advertising and promotined activities. It maintains supply of cigarette all over India. There office is situated are as follows- 1. Jalandar (Punjab) 2. Saharanpur (U.P) 3. Delhi (Capital Marking office) 4. Kanpur (U.P)

31. Secondary process of cigarette production After making tobacco by primary process. Then begins the one rouse task of giving shape to the cut tobacco and dressing it up in cigarette paper. The processed tobacco is spread every on cigarette paper from roll that is anywhere from 4000 to 6000 meters in length. Then some thing like a long pencil is formed. This pencil of tobacco column rolled into cigarette paper is then cut into predermined sections depending on the length of the cigarette. After that, double length filters are inserted between every two cigarette and cut in half with a strong blade. The cigarettes get collected in aluminum trays which are then stored under controlled conditions of temperature and humidity. After storage for a few hours these are taken to the packers machine, which pack the cigarettes sticks into pack of 10s and 20s. Working Area of ITC Ltd ITC is now a days doing eight (8) major area of production, distribution and servicing. these are as follows- A. Cigarettes and Tobacco. B. Hotels. C. Packaging D. Paper board & Specialty paper E. Information Technology (IT) F. Life style retailing G. Agro-Exports H. Group Companies etc A. Cigarettes and Tobacco: - ITC buys nearly 50% of all cigarettes types tobacco grown in India. It has been India single largest integrated sources of quality tobacco for customer in 37 countries over the last 6 decades. ITCs Comprehensive and sophist6icated R&D facilities cover all aspects of cultivation. Processing and

32. packaging. ITC to process and deliver 100 million Kgs of high quality tobacco par Annam. ITC also co-operates with government agencies to develop new varieties of tobacco and to develop new areas for tobacco cultivation. B. Hotels: - ITC entered into hotels field in 1975. He is giving best hospitality services in some field. ITC have 46 hotels across 42 destination all over India. C. Packaging: - ITC also producing packaging items like- I. Flip top boxes. II. Car board outers. III. Shells and slides. IV. Soft cup and strap labels V. Bundle wraps VI. Flap boxes VII.

Inner frames VIII. Coupon inserts & Variety IX. Folding crotons The major unit (factory) which is producing packaging items- one is munger (Bihar) and other is Tiruvottiyar hear chennai. D. Paper Board & Specialty paper: - ITC has now integrates sits paperboard & specialty paper business into its newly created (PSPD), to how new strategic & operational synergies. ITC is one of the world most modern and contemn porary manufactures of packaging (paper board) boards, with a manufacturing capacity of over 2,00,000 tones par year (1) packaging board coasted folding box boards, solid bleached sulphates board, white unit chipboard, liquid packaging board (2) cast coated papers and boards. The division also produced quality- (a). Printing & Writing papers (b). Eco- friendly papers (c). Photo copier papers.

33. Specialty paper:- ITC is the premier manufacturer of specialty paper in India, with a diversified product. Range ITCs specialty paper are used in the manufacturer of cigarettes, decorative laminates. Electrical equipment, fire works and automotive factory filters. They are also used for fire printing, packaging and carbonizing. The division pioneered the manufacturer of specialty paper for Indian cigarette industry in 1949. It currently offers a comprehensive range of cigarette Tissues; plug Wray, tipping base, printed tipping papers and metailising base. E. Information Technology (IT): - ITC has recently spun off its 20 year old information system division into a wholly owned subsidiary to aggressively pursue growth opportunities in this sector. ITC Infotech India Ltd offer a powerful customer value proposition based on its in depth domains know ledge gained from the experience of servicing a range of internal & external customers across diverse domains. - 1. FMCG 2. Hoteliering 3. Packaging 4. Paper boards 5. Specialty papers 6. International Trading Etc. F. Life style retelling: - ITC also manufacturing ready made garments range of international quality of relaxed wear under the brand name wills sport. It have 48 retail out across 38 cites in the country. Recently he also lunched another brand name john players offers complete range of contemn porary mens wear- like shirts, Trousers, t-shirts & denims. It also lunches in Nov. 2002 under brand name the classes collection.

34. G. Agro-Exports: - ITC international business division (IBD) is doing Exports activities of Agriculture products and processed foods Etc. he exports following items to UK, US and Another European countries- 1. Soya meal. 2. Rice 6. Aqua products. 7. Peanuts. 8. Coffee. 9. Wheat. 10. Sesame Seeds. 11. Black pepper 12. Processed & frozen fruits & vegetables. H. Group Companies: - Main group companies- a). ITC Hotels. b). Surya Nepal private limited. c). International travel house d). Land base Associate companies -ITC filtrona. ITC A RESPONSIBLE CITIZEN ITC is a responsible corporate citizen: - ITC is doing so many activities for the welfare of society and darks as a responsible corporate leader without any gap. Some of its major societal activation for the welfare of different section of society is as followsa. Environment, health & safety (EHS)

35. b. Reaching out to society c. Preserving national heritage. d. Supporting sustainable development a. Envoirment, health & Safety (EHS): - As a responsible corporate citizen, ITC accords the highest priority to environment, occupational health, and safety. It is committed to protecting the environment in which it operates. It is equally committed to ensuring very high standard of safety at the work place. It is a relegations of ITC high EHS standards that lit has been the recipient of several National and international awards- such as- ISO 14000 Sword of honour Royal society of prevention of accidents awards. National safety awards. The corporate Environment award. The golden peacock environment management award. Excellence in pollution control management. Prashanna patra award. National Award for excellence in energy conservation. b. Reaching out to society: - As a responsible corporate citizen, ITC promotes art,

culture and education. Besides working for the protection and enrichment of the environment and over all social development. Community development. Education. Protecting the environment. c. Preserving National Heritage: - As a socially responsible corporate citizen, ITC

36. Endeavors to creates value for the Indian society in multiple ways, one of them being Preservation of India rich culture heritage ITC has made significant contribution to the Promotion of Indian classical music, theatre, are and cuisine GRADES FOR MANAGERS Senior Managers. (Managers) Middleman Managers.(Asst. Managers) Junior Managers. (Executives) GRADES FOR WORKERS Unskilled Workers. Semi Skilled Workers. Skilled Workers. Highly Skilled Workers. ORGANISATION STRUCTURE / HIERARCHY ITC a world leading electric company works as a Team System. Hierarchy of this organization is as follows: Unit Head (Managing Director)

37. Functional Heads (General Managers) Departmental Heads (Managers) Section In charge (Asst. Managers) Supervisors (Executives) Workers History ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging,

38. Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened ITC Limited. ITC is one of India's foremost private sector companies with a market capitalization of nearly 19505 cr. and a turnover of over is 12369 cr. ITC also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Greeting Cards, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including eenabled services and business process outsourcing. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 21,000 people at more than 60 locations across

India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3,97,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: ITC Leadership Flowing from the concept and principles of Corporate Governance adopted by the Company, leadership within ITC is exercised at three levels. The Board of Directors at the apex, as trustee of shareholders, carries the responsibility for strategic supervision of the Company. The strategic management of the Company rests with the Corporate Management Committee comprising the whole time Directors and members drawn from senior management. The executive management of each business division is vested with

39. the Divisional Management Committee (DMC), headed by the Chief Executive. Each DMC is responsible for and totally focused on the management of its assigned business. This threetiered interlinked leadership process creates a wholesome balance between the need for focus and executive freedom, and the need for supervision and control. Vision Sustain ITCs position as one of Indias most valuable Corporation through world class performance, Creating growing value for the Indian economy and the companys stakeholders Mission To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable Stakeholder value SWOT Analysis The following point shows the internal and external factors affecting the market opportunities for ITC. This SWOT analysis also shows ITC internal strengths such as their experienced management team, a competitive product line, a global marketing realm, and the continuous efforts by their research and development to research trends in the industry and to be creative in exploiting those trends. Some possible opportunities noted in the SWOT analysis are the growing markets for specialized ethnic foods and healthier food products. Another opportunity is that the income of consumers is high enabling them to be less price sensitive, and convenience is becoming evermore important not only to the United States but to many countries around the world.

40. Although ITC has many strengths, a few weaknesses lie in the fact that the company is so large and could possibly lose focus or have internal conflict problems. A few of the threats ITC must stay aware of are the ease of replicability of its product line, the almost pure competition in pricing for its products, and the quickness of technological advances causing existing products to be no longer the most advanced. STRENGTHS Management Experienced, broad base of interests and knowledge Product Line Unique, tastes good, competitive price, and convenient Marketing Diverse and global awareness Personnel International, diverse positions International, diverse positions High sales revenue, high sale growth, large capital base Manufacturing Low costs and liabilities due to outsourcing of bottling Research & Development Continuous efforts to research trends an reinforce creativity Consumer/Social Huge market in the healthy products and growing market for specialized foods for ethnic groups Competitive Distinctive name, product and packaging in with regards to its markets Technological Internet promotion such as banner ads and keywords can increase their sales, and more computerized manufacturing and ordering processes can increase their efficiency Economic Consumer income is high, more tend to eat out, convenience is important to U.S. Weaknesses Management Large size may lead to conflicting interests Product Line New one calorie products have no existing customer base, generic brands can make similar product cheaper Marketing

41. May lose focus, may not be segmented enough Personnel Possible conflicts due to so many people, possible trouble staying focused Finance High expenses may have trouble balancing cash-flows of such a large operation. Research & Development May concentrate too much on existing products, intrapreneuralship may not be welcomed Consumer/Social More expensive products than Hul. Such a high price may limit lower income families from buying an ITC product Competitive Not entirely patentable, constant replicability by competitors Technological Computer breakdowns, viruses and hackers can reduce efficiency, and must constantly update products or other competitors will be more advanced Economic Very elastic demand, almost pure competition Opportunities Expected 30% CAGR in organized market to result in better footfall and conversion rates.

42. Entry into Tier 2 and Tier 3 cities. Collaboration with foreign players because of a national brand. An opportunity to diversify its operations in e-retailing. As big company of India can go globally. Threats Employee shortage and attrition due to rapid growth in the holl market . Impact of slowdown in consumer spends to be felt in FMCG market. Opening up of economy for free entry of foreign players.

43. A SOCIAL CHARTER FOR BUSINESS Few weeks ago, the Humble Prime Minister Dr Manmohan Singh presented a ten-point 'Social Charter' sharing his vision on the responsibility of corporate for sustainable and inclusive growth. He said, and I quote, "Indian industry must rise to the challenge of making our growth processes both efficient and inclusive. This is our endeavor in Government. It will have to be yours too and I seek your partnership in making a success of this giant national enterprise. If those who are better off do not act in a more socially responsible manner, our growth process may be at risk, our polity may become anarchic and our society may get further divided. I invite corporate India to be a partner in making ours a more humane and just society." Unquote. By the Y C Deveshwar mind, the Hon'ble Prime Minister's clarion call is not only a responsibility that we, in Indian Business and Industry, must commit ourselves to but a crying need that we cannot afford to neglect any longer. While we can justifiably be proud of India's stellar performance in GDP growth, the growing inequity in sharing the fruits of success is indeed a millstone that impedes the nation's true potential. Business Corporations draw heavily on societal resources. Therefore, it is in the enlightened self- interest of business to engage constructively in enlarging its contribution to the broader social and environmental agenda. Competitiveness of firms can be severely threatened by unsustainable environments and a lopsided social structure that creates islands of affluence amidst a sea of poverty. A constructive public-private partnership for socially responsible growth is imperative and must occupy a larger space in the future business strategies of India's corporate sector. You are indeed aware of the enormous importance of our rural engagement in the future growth of your Company. We have constantly strived to meaningfully blend our social responsibilities with business competitiveness, so that we can continue to create shareholder value even as we enhance the benefits that accrue to rural communities. We recognize that this is the path we must pursue to ensure sustainable and inclusive growth - a philosophy that is central to the vision articulated by Prime Minister's Social Charter for Business. I take immense pride that the vision enunciated by the Hon'ble Prime

44. Minister echoes the core values that your Company has enshrined in its management philosophy and governance structure. We have indeed been 'practitioners' of this vision for many years now. It gives me immense satisfaction that your Company has executed, on a substantial scale, innovative business strategies which result in 'mainstreaming' the disadvantaged sections of

rural India. ITC Ltd. Company's pioneering e-Choupal initiative today comprises 6,400 choupals transforming the lives of over 3.5 million farmers in 38,500 villages in 9 States of India. We hope to reach out to 10 million farmers in 100,000 villages in the not too distant future. The Social and Farm Forestry Programme of ITC covers 65,000 hectares providing over 28 million person days of employment among the disadvantaged. In the process, we have also helped sequester over 2,000 kilotons of Carbon Dioxide as a firm commitment to combating climate change. Your Company's Integrated Watershed Development programmes in rural areas cover nearly 27,000 hectares providing critical irrigation to water stressed areas. This year, we have also forged a milestone partnership with the Government of Rajasthan for an integrated watershed development project covering 5,000 hectares. ITC's initiatives to provide opportunities for nonfarm incomes through economic empowerment of women, supplementary education and integrated animal husbandry services continue to make significant strides in rural empowerment. As a nation, we face today a multi-dimensional challenge to chart a growth path that will transform the lives of almost a third of our billion populations who live at the margin. Surely, it is not a task that any single segment of society - be it Government or Responsible Business - can hope to accomplish in isolation. It is true that sustained high rates of GDP growth is one of the surest ways of creating livelihoods for the disadvantaged. However, if such growth impulses do not envision or contain conscious efforts to enhance social value, it is not necessary that high growth rates alone will ensure social equity. In fact, there is a danger that competitive pressures may not actually lead to development and growth in areas that need it the most. ALIGNING FORCES OF FRANCHISE Given the power of consumer franchise, how do we align forces amongst all the market participants to support a new movement for innovative CSR? To make 'consumer choice' a compelling market driver we would need to create a supportive institutional framework to facilitate the process of making an informed choice by market participants. Let me briefly elaborate on some of these enablers: First, the Policy and Institutional Framework. Market participants would need an effective tool to make an informed choice in favour of a Responsible Corporation. I would suggest that Government support the development of a 'CSR Sustainability Trust mark', or a series of Trust marks defined by Industry segments, which could be displayed on products and services to convey to the consumer that the enterprise follows a strong commitment to

45. building natural and social capital. Voluntary in nature, these Trust marks, crafted on sound scientific and market principles, will stand for the positive impact a company has made on the environment and the society. The Trust marks could also be supplemented with Ratings, based on the extent of the individual company's involvement in creating societal capital. The Trust marks need to be administered by a reputed and independent body or bodies, much like the financial rating agencies. An institutional framework and appropriate guidelines can be created by a Government-Industry partnership to provide organizational support and credibility. A major impetus can emerge out of Government's consideration to extend fiscal and financial concessions, priority clearance and other incentives to organizations that attain sustained high ratings. Government and its agencies could also give purchase preferences to suppliers with highly rated Trust marks. Second, the role of Industry: In championing a sincere commitment to a Vision that embraces contribution to Society as a key component of business strategy. In moving towards voluntary disclosure of Triple Bottom Line performance in the Company's Annual Reports, verified by independent reputed third party organizations. In making a strong effort to attain the CSR Sustainability Trust marks, and displaying the same on their products and services. In enlarging the Company's contribution by giving preference to vendors with a strong CSR and Sustainability orientation. In developing a model code of responsible conduct

by Industry bodies and associations for its members. In encouraging Modern Retail outlets to develop special sections that display and sell products with Trust marks. In providing support to the creation of Awards that recognize outstanding Sustainability Performance. This would provide a tremendous reputation asset and incentives CSR significantly. In strengthening reporting on Sustainability based on guidelines such as the Global Reporting Initiative. I am sure that the Indian operations of multinationals, not listed on Indian bourses, would also want to make such public disclosures and demonstrate their contribution to the Indian Society. I envisage a future where Sustainability Reporting will form an integral part of a firm's public disclosures, and will be valued by stakeholders in equal measure to the established practices of financial reporting. Third, the role of Investors. Investors play a critical role in encouraging social accountability in corporate behavior. Globally, there are today hundreds of funds that invest in socially responsible enterprises. These funds rely on Sustainability Indices such as Dow Jones Sustainability World Index, FTSE4Good, Domini 400 Social Index and

46. others to guide investment decisions. These funds have already channeled large amount of investors' savings into companies that have high social brand capital. India has witnessed some welcome developments in this direction in recent years. The ABN Amro Bank launched a Sustainable Development Fund as India's first Socially Responsible Investing Fund. Recently CRISIL, S&P and KLD have announced that they would develop an Environmental, Social and Corporate Governance (ESG) Index of Indian companies. The Institute of Chartered Accountants of India is also reported to be working on developing a similar evaluation. Individual investors, while seeking to maximise returns from their portfolio holdings, could exercise a powerful choice for companies with high Triple Bottom Line performance. Banks and Financial Institutions could ask for voluntary disclosures and factor the rating in their lending evaluations. Fourth, the role of Civil Society organizations. Consumer awareness will benefit immensely if civil society organizations and consumer bodies actively advocate the usage of Trust marks. They could also promote awareness amongst constituents to support products and services of companies with higher Sustainability ratings. Schools and educational institutions could also promote awareness on responsible corporate behavior and its association with the Trust mark ratings on products and services, and design elements in their curriculum to groom citizens of tomorrow as enlightened consumers. And finally, the Media, as one of the most powerful forces of shaping public opinion, can make a multi-dimensional contribution in this direction. It is my strong belief that by aligning such powerful forces, we will see the emergence of a new consciousness where CSR will transcend from corporate philanthropy to a competitive value proposition. ITC has been instrumental in setting up the CII-ITC Centre of Excellence for Sustainable Development, which is a unique institution that seeks to address the void in developing requisite capability on Sustainability issues among Indian industry. The Centre endeavors to bring about transformational change in Indian businesses by providing thought leadership, promoting awareness and building capacity. One of the major initiatives of the CIIITC Centre is to recognize excellence in Sustainability practices by presenting Awards to industry, based on a rigorous process of selection. This attempt to recognize outstanding Sustainability initiatives is designed not only to celebrate individual corporate action, but also to inspire others to follow. ITC convinced that in today's enlightened India, more and more companies will respond to the appeal made by the Hon'ble Prime Minister to forge partnerships for social action, and achieve growth with efficiency and inclusively. Making markets work for CSR will indeed provide the compelling foundation for such initiatives.

47. Philosophy ITC is a professionally managed organisation and the core value underlying our corporate philosophy is "trusteeship". We believe this organisation has been handed to us by the various stakeholders in "trust" and we as professionals are the "trustees" of these stakeholders. It is therefore our responsibility to ensure that the organisation is managed in a manner that protects and furthers the interests of our stakeholders. We recognise society as an important stakeholder in this enterprise and therefore it is part of our responsibility to practise good corporate citizenship. It is also our belief that in order to serve the interests of our stakeholders in perpetuity, we must build ITC into an institution whose dynamism and vitality are anchored in its core value. Corporate Governance Policy The Corporate Governance Policy is the apex level instrument guiding conduct of the affairs of the Company and clearly delineates the roles, responsibilities and authorities of the key entities in the governance structure of the Company. This Code forms an integral part of the Companys Governance Policy. The directors, senior management and employees must adhere to the Corporate Governance Policy of the Company. Good Corporate Citizenship In the conduct of the Companys business, the practice of good corporate citizenship is a prerequisite and embraces the following: Dealing with People in the Organisation In dealing with each other, directors, senior management and employees shall uphold the values which are at the core of our HR Philosophy - trust, teamwork, mutuality and collaboration, meritocracy, objectivity, self respect and human dignity. Indeed, these values form the basis of our HR management systems and processes. In selection and

48. recruitment, while meritocracy will be a prime criterion, managers will scrupulously consider all factors that go towards securing the interests of the Company. ITC will focus on meritocracy, equity and upholding of Company values in all people processes including performance management systems, appraisals, remuneration and rewards. A Gender Friendly Workplace As a good corporate citizen, ITC is committed to a gender friendly workplace. It seeks to enhance equal opportunities for men and women, prevent/stop/redress sexual harassment at the workplace and institute good employment practices. Sexual harassment includes unwelcome sexually determined behaviour such as: unwelcome physical contact; a demand or request for sexual favours; sexually coloured remarks; showing pornography and any other unwelcome physical, verbal or non-verbal conduct of a sexual nature. ITC maintains an open door for reportees; encourages employees to report any harassment concerns and is responsive to employee complaints about harassment or other unwelcome and offensive conduct. A committee has been constituted to enquire into complaints and to recommend appropriate action, wherever required. ITC demands, demonstrates and promotes professional behaviour and respectful treatment of all employees. Relationships with Suppliers and Customers All directors, senior management and employees shall ensure that in their dealings with suppliers and customers, the Companys interests are never compromised. Accepting gifts and presents of more than a nominal value, gratuity payments and other payments from suppliers or customers will be viewed as serious breach of discipline as this could lead tocompromising the Companys interests. Legal Compliance It is the Companys policy to comply fully with all applicable laws and regulations. Ensuring legal and regulatory compliance is the responsibility of the Chief Executives of the Businesses and the Divisional Management Committees. The Company cannot accept practices which are unlawful or may be damaging to its reputation. Divisional Management Committees must satisfy themselves that sound and adequate arrangements exist to ensure that they comply with the legal and regulatory requirements impacting each business and identify and respond to developments in the regulatory environment in

49. which they operate. In the event the implication of any law is not clear, the Companys Legal Department shall be consulted for advice. Health and Safety The Company attaches great importance to a healthy and safe work environment. ITC is committed to provide good physical working conditions and encourages high standards of hygiene and housekeeping. Particular attention should be paid to training of employees to increase safety awareness and adoption of safe working methods, particularly designed to prevent serious or fatal accidents. Environment Policies The Company believes that commitment to sustainable development is a key component of responsible corporate citizenship and therefore deserves to be accorded the highest priority. Accordingly, the Company is committed to Best Practices in environmental matters arising out of its business activities and expects each business to fully demonstrate this commitment. In addition to complying with applicable laws and regulations, Businesses must establish procedures for assessing the environmental effects of their present and future activities. They should adopt Best Practices in their environmental policies and procedures. Personal Conduct All directors, senior management and employees have the obligation to conduct themselves in an honest and ethical manner and act in the best interest of the Company at all times. They are expected to demonstrate exemplary personal conduct through adherence to the following: Avoidance of Conflict of Interest All directors, senior management and employees must avoid situations in which their personal interest could conflict with the interest of the Company. This is an area in which it is impossible to provide comprehensive guidance but the guiding principle is that conflict, if any, or potential conflict must be disclosed to higher management for guidance and action as appropriate. Transparency and Auditability All directors, senior management and employees shall ensure that their actions in the conduct of business are totally transparent except where the needs of business security dictate otherwise. Such transparency shall be brought about through appropriate policies, systems and processes, including as appropriate, segregation of duties, tiered approval mechanism and involvement of more than one manager in key decisions and maintaining supporting records. It shall be necessary to voluntarily ensure that areas of operation are open to audit and the conduct of activities is totally auditable.

50. Protection of Confidential Information No director, senior management and employee shall disclose or use any confidential information gained in the course of employment/ association with the Company for personal gain or for the advantage of any other person. No information either formally or informally shall be provided to the press, other publicity media or any other external agency except within approved policies. Company Facilities No director, senior management and employee shall misuse Company facilities. In the use of Company facilities, care shall be exercised to ensure that costs are reasonable and there is no wastage. Waivers Any waiver of any provision of this Code of Conduct for a director, senior management or employee must be placed for approval before the Companys Board of Directors/ Corporate Management Committee, as appropriate. Non Adherence Any instance of non-adherence to the Code of Conduct / any other observed unethical behaviour on the part of those covered under this Code should be brought to the attention of the immediate reporting authority, who shall in turn report the same to the Head of Corporate Human Resources Senior management for the purpose of this Code would mean the following: - Managers at Grade A & its equivalent, and above Divisional & SBU Chief Executives - Corporate HODs * This Code of Conduct, as adopted by the Board of Directors of the Company on 26th March, 2005, was amended on 29th March, 2006 ITC, 10 other Indian firms among world's 50 'Local Dynamos' Going global is not the only trump card for an international recognition'. As 'many as 11 India companies, including the likes of ICICI Bank and Bharti Airtel, have made it to a list of 50 'Local Dynamos' for mastering the dynamics of their domestic markets. These 50 firms from the world's Rapidly Developing

Economies (RDEs) are "domestically focused, at least for now, and have devised formidable business models

51. with which to master the intense dynamics of their local markets," global consultancy firm Boston Consultancy Group said in a report. Other Indian companies in the list are two Tata Group entities Indian Hotels and Titan Industries besides Amul; Apollo Hospitals, CavinKare Group, ITC Limited, NIIT, SKS Micro finance and Subhiksha. Apart from the four BRIC countries - Brazil, Russia, India and China - the list also Includes companies from Indonesia, Malaysia, Mexico, Poland, Slovakia, Poland and Thailand. The study titled "The BCG 50 Local Dynamos - How Dynamic RDE based companies are mastering their home markets - and what MNCs need to learn from them" has 15 companies from China, including the internet search engine Baidu.com. BCG said these companies were selected on the basis of criteria such as high growth and original business model specifically adapted to the unique challenges posed by RDEs. According to BCG, companies from RDEs are "staying home" and conquering their domestic markets. Further, these firms are using innovative Business models to beat MNCs and established domestic incumbents, many of which are state-owned entities. BCG said ICICI Bank has an interest income of 5,196 million dollars as compared to its MNC competitor, HSBC, which rakes in an interest income of 1,066 million dollars. "Withs more than 950 branches and 24 million customers, it offers a diverse range of financial products and services and competes well against local and foreign rivals," it noted. Observing that the chosen Dynamos target their offerings mainly at the middle class, the study said India has shown that companies can serve the poor profitably provided they use "the right approach". "In consumer goods, CavinKare entered the personal care market by selling shampoo in affordable sachets to rural customers. Titan Industries produces more than seven million watches a year... No-frills retailer Subhiksha has brought low prices and convenience to the lives of many Indians by locating small supermarkets close' to its customers...," the study added. Privacy Policy ITC Limited welcomes you to its website and looks forward to a meaningful interaction with you. ITC Limited respects your right to privacy. Any personal information that you share with us, like your name, date of birth, address, marital status, telephone

52. number, credit card particulars and the like, shall be entitled to privacy and kept confidential. ITC Limited assures you that your personal information shall not be used/disclosed by it, save for the purpose of doing the intended business with you, or if required to be disclosed under the due process of law. ITC Limited assures you that in the event of your personal information being shared with its subsidiaries, business associates etc., such sharing of information shall be for the purpose of doing the intended business with you. ITC Limited reserves its rights to collect, analyse and disseminate aggregate site usage patterns of all its visitors with a view to enhancing services to its visitors. This includes sharing the information with its subsidiaries, and business associates as a general business practice. In the course of its business ITC Limited may hold on-line contests and surveys as permitted by law and it reserves its right to use and disseminate the information so collected to enhance its services to the visitors. This shall also include sharing the information with its subsidiaries and business associates as a general business practice. If you have any questions or concerns regarding your privacy issues, please do not hesitate to contact ITC Limited at [email protected] While ITC Limited assures you that it will do its best to ensure the privacy and security of your personal information, it shall not be responsible in any manner whatsoever for any violation or misuse of your personal information by unauthorised persons consequent to misuse of the internet environment. Cookies :- To personalise your experience on our website or to support one of our promotions, we may assign

your computer browser a unique random number called a cookie. "Cookies" enhance website performance in important ways like personalising your experience, or making your visit more convenient. Your privacy and security are not compromised when you accept a "cookie" from our website. ITC Limited does not use "cookies" to collect personal information. "Cookies" cannot read data from your computers hard disk or read cookie files from other websites. ITC Limited reserves its rights to revise this privacy policy from time to time at its discretion with a view to making the policy more user friendly. In the design of our website, we have taken care to draw your attention to this privacy policy so that you are aware of the terms under which you may decide to share your personal information with us. Accordingly, should you choose to share your personal

53. information with us, ITC Limited will assume that you have no objections to the terms of this privacy policy. A SOCIAL CHARTER FOR BUSINESS A few weeks ago, the Hon'ble Prime Minister Dr Manmohan Singh presented a ten-point 'Social Charter' sharing his vision on the responsibility of corporates for sustainable and inclusive growth. He said, and I quote, "Indian industry must rise to the challenge of making our growth processes both efficient and inclusive. This is our endeavor in Government. It will have to be yours too and I seek your partnership in making a success of this giant national enterprise. If those who are better off do not act in a more socially responsible manner, our growth process may be at risk, our polity may become anarchic and our society may get further divided. I invite corporate India to be a partner in making ours a more humane and just society." Unquote. To my mind, the Hon'ble Prime Minister's clarion call is not only a responsibility that we, in Indian Business and Industry, must commit ourselves to but a crying need that we cannot afford to neglect any longer. While we can justifiably be proud of India's stellar performance in GDP growth, the growing inequity in sharing the fruits of success is indeed a millstone that impedes the nation's true potential. Business Corporations draw heavily on societal resources. Therefore, it is in the enlightened self-interest of business to engage constructively in enlarging its contribution to the broader social and environmental agenda. Competitiveness of firms can be severely threatened by unsustainable environments and a lopsided social structure that creates islands of affluence amidst a sea of poverty. A constructive public-private partnership for socially responsible growth is imperative and must occupy a larger space in the future business strategies of India's corporate sector. You are indeed aware of the enormous importance of our rural engagement in the future growth of your Company. We have constantly strived to meaningfully blend our social responsibilities with business competitiveness, so that we can continue to create shareholder value even as we enhance the benefits that accrue to rural communities. We recognise that this is the path we must pursue to ensure sustainable and inclusive growth - a philosophy that is central to the vision articulated by Prime Minister's Social Charter for Business. I take immense pride that the vision enunciated by the Hon'ble Prime Minister echoes the core values that your Company has enshrined in its management philosophy and governance structure. We have indeed been 'practitioners' of this vision for many years now. It gives me immense satisfaction that your Company has executed, on a substantial scale, innovative business strategies which result in 'mainstreaming' the disadvantaged sections of rural India. Your Company's pioneering e-Choupal initiative today comprises 6,400 choupals transforming the lives of over 3.5 million farmers in 38,500 villages in 9 States of India.

54. We hope to reach out to 10 million farmers in 100,000 villages in the not too distant future. The Social and Farm Forestry Programme of ITC covers 65,000 hectares providing over 28 million person days of employment among the disadvantaged. In the process, we have also

helped sequester over 2,000 kilotons of Carbon Dioxide as a firm commitment to combating climate change. Your Company's Integrated Watershed Development programmes in rural areas cover nearly 27,000 hectares providing critical irrigation to water stressed areas. This year, we have also forged a milestone partnership with the Government of Rajasthan for an integrated watershed development project covering 5,000 hectares. Your Company's initiatives to provide opportunities for non- farm incomes through economic empowerment of women, supplementary education and integrated animal husbandry services continue to make significant strides in rural empowerment. As a nation, we face today a multi-dimensional challenge to chart a growth path that will transform the lives of almost a third of our billion population who live at the margin. Surely, it is not a task that any single segment of society - be it Government or Responsible Business - can hope to accomplish in isolation. It is true that sustained high rates of GDP growth is one of the surest ways of creating livelihoods for the disadvantaged. However, if such growth impulses do not envision or contain conscious efforts to enhance social value, it is not necessary that high growth rates alone will ensure social equity. In fact, there is a danger that competitive pressures may not actually lead to development and growth in areas that need it the most. There is also a significantly large cost involved in implementing value-chains that are socially inclusive. While commensurate returns may flow over the longer term, there are indeed cost barriers, over the short to medium term, that inhibit investments in such socially inclusive initiatives. In the absence of strong fiscal or financial incentives, business enterprises would hesitate to raise such investments and commit physical and human resources over a longer term. Therefore, it is important to examine how market drivers can creatively facilitate such long-term investments which have larger societal benefits. Corporates will be able to support a much larger social involvement in their business strategies, if market forces facilitate such investments and returns.

55. INTRODUCTION My research report is entitled A study of HR Practices in ITC. Firstly I would like to discuss about HR Practices. What are HR Practices? HR Practices are those practices which are been done by the organization for having optimum utilization of human resource of the organization. These practices can be explained as follows: Recruitment & Selection Training & Development Performance Appraisal System Evaluation System Feed Back Mechanism Rewards to Employees Work Remuneration of the employees Increment practices

56. INTRODUCTION OF HRM Human resource management is the planning , organizing, directing, and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational, and social objective are accomplished. FEATURES OF HRM Increased competition Emphasis on quality in staff, goods/services Flexibility in operations Willingness to adopt to changing market needs Global Market OBJECTIVES OF HRM Integration of HRM policy with business goals/objectives Attainment of organizational objectives through human capital Creation of flexible work hours/function

57. Creation of a flexible environment to be responsive to market ambience, as per the need of the dizzily fast packed and changing environment. Integration of people related issues with business issues, while bringing people related issues to the fore and advocating primacy of business needs. MEANING & DEFINITION HRM is a management function that helps managers recruit, select, train and develops members for an organization obviously HRM is concerned with peoples dimension in organizations HRM: - It is also a management function concerned with hiring motivating and maintaining people in an organization. It is a series of

integrated decision that from the employment relationship; their quality contributes to the ability of the organization and the employees to achieve their objective. Human resource management is concerned with the people dimension in management. since every organization is make up of people, acquiring their services, developing their skill, motivating them to higher level of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives.

58. INTRODUCTION OF RECRUITMENT The human resources are the most important assets of organization. The success or failure of an organization is largely dependent on the caliber of the people working therein. Without positive and creative contribution from people, organization cant progress and prosper. In order to achieve the goals and perform the activities of an organization, therefore we need to recruit people with requisite, skills, qualification and experience. While doing so we have to keep the present as well as future requirements of the organization in mind. OBJECTIVE To effectively manage the manpower recruitment in coherence with long term and short term manpower planning of the organization through a standard recruitment and selection policy. To proactively and systematically identify the recruitment needs in time. To ensure that all the recruitment are within the manpower budget and as per the laid down policy. The recruited people with required level of skilled and aptitude for learning and growth.

59. SCOPE: This policy shall apply to all PERMANENT management position in the company including the workmen. IDENTIFICATION OF VACANT POSITIONS 1. Total permanent manpower strength/budget for organization has been sanctioned by the board of directors. 2. All the recruitment has necessarily to be made within the approved budget/strength only. 3. Vacancies against the sanctioned budget may arise due to: Retirement Turnover Natural Separation 4. whenever a vacancy arise, the concerned department has to fill up the prescribed manpower requisition form clearly indication the job description and specification, time frame and send it to HR department.

60. HR PLANNING HRP is the process of forecasting an organizations future demand for and supply of, the right type of people in the right number. It is only after this that the HRM department can initiate the recruitment and selection process. HRP is the sub-system in the total organizational planning. Organizational planning includes managerial activities that set the companys objective. HRP facilitates the realization of the companys objectives by providing the right type and right number of personnel. HRP then is like materials planning that estimate the type and quality of the materials and supplies needed to facilitate the manufacturing activities of the organization. HRP is variously called manpower planning, personnel planning or employment planning. RECRUITMENT SOURCES The sources of recruitment may be broadly divided into two categories: internal sources and external sources. On receipt of the Manpower Requisition (MPR) form HR department will initiate action of sourcing the candidates as under:

61. 1. INTERNAL SOURCES: As a matter of policy, the organization will encourage to fill up the vacancies from within the existing people if they are fulfilling the criteria and found suitable. In order to invite application from internal sources, notice/circular for all such vacancies will be put up on the notice board. In case any permanent employee dies in harness due to accident or any other reason, one depend son of deceased employee may be given preference in employment with the company subject to his fulfilling the eligibility criteria based on qualification and experience as well as suitable vacancy in the company at that time. The conditions fulfilling the

requirement may apply against internal notification to HR department through their department. 2. other sources : Other sources can be tapped for recruitment only when suitable candidates are mot available internally. Other sources may include the following: internal data bank local employment exchange advertisement through newspaper Placement agencies.

62. Methods Of Recruitment The following are the most commonly used method of recruiting people. 1. Internal Method 2. Direct Method 3. Indirect Method 1. INTERNAL METHOD: PROMOTION AND TRANSFERS: ITC Prefer to fill vacancies through promotion or transfers from within wherever possible. Promotion involves movement of an employee from a lower level position to higher level position accompanied by changes in duties, responsibilities, status and value and value. It may lead to changes in duties and responsibility, working conditions, etc., but not necessarily salary. Internal promotions and transfers certainly allow people greater scope to experiment with their career, kindling ambitions and motivating them to take a shot at something they might otherwise never have considered. The system, of course, works best for young executives who are willing to take risks. JOB POSITION Job position is another way of hiring people from within. In this method, the organization publicizes job openings on bulletin boards, electronic media and similar outlets. Hindustan lever introduced its version open job position in early 2002 and over 40 positions have since been filed through the process. HLL even allows its employee to under take career shifts, for example from technical position system. EMPLOYEE REFERRALS

63. Employee referral means using personal contacts to locate job opportunities. It is a recommendation from a current employee regarding a job applicant. The logic behind employee referral is that it takes one to know one employee working in the organization in this case, are encouraged to recommend the name of their friends working in other organization for a possible vacancy in the near future. In fact, this has become a popular way of recruiting people in the highly competitive information technology industry now a day. Companies offer rich rewards also to employees whose recommendation are accepted after the routine screening and examining process is over- and job offers extended to the suggested candidates. Direct Method Campus Recruitment It is a method of recruiting by visiting and participating in college campuses and their placement centers. Here the recruiters visits reputed educational institutions such as IITs, IIMs colleges and universities with a view to pickup job aspirants having a requisite technical of professional skills. Job seekers are provided information about the jobs and the recruiters inturen get a snap shot of job seekers through constant interchange of information with respective institutions. A preliminary screening is done within the campus and the short listed students are then subjected to the reminder of the selection process. In view of the growing demand for young managers, most reputed organizations visit regularly and even sponsor certain popular activities with a view to earn goodwill in the job market. Advantage of this method include: the placement centre helps locate applicants and provides resumes to organization; applicants can be prescreened; applicants will not have to be lured away from a current job and lower salary expectation.

64. Indirect Method Advertisement This includes advertisement in news papers; trade, professionals and technical journals; radio and TV etc. In recent time this medium became just as colorful lively and imaginative as consumer advertising. The ad generally gives a brief outline of the job responsibilities, compensation package, prospects in the organization etc. This method is appropriate when (a) the organization intends to reach a large target group and (b) the organization wants a fairly good no. of talented people who are geographically spread out. Head

Hunters There is an influx of executive search agencies also known as head hunters who specialize in selection of professionals for very senior or top posts, where applicants are in short supply and employers have no time to go round in search of the best talents. Such vacancies are fewer and far between and organizations prefer hiring a head hunter who maintains confidentiality of the employer and are specialize in recruiting the best talent strictly as per the job specification. But, these specialists bodies charges hefty professional fees. However, the high cost is outweighed by the benefit of recruiting the best talent without going through the cumbersome and time consuming process of internal recruitment syste

65. SELECTION PROCEDURE 1. Screening of Application : All application received from various sources will be screened by the concerned department and HR based on the job description and specification and the applicant profile. Shorting of prima facile suitable candidates who should be called for test/interview shall be prepared. The ratio between the number of vacancy and the number of candidate to be called for test/interview should normally be 1:5. 2. TEST: Depending on the requirement of the job if required, management may conduct written/aptitude/psychometric/physical or any other test as deem fit. Short listed application will be send formal letter for appearing test at least 15 days in advance. Qualifying criteria for the test will be determined by the management depending on the nature and requirement of the job. 3. INTERVIEW:

66. All the candidates short listed for interview will be informed through a formal call letter for attending interview at least 15 days in advance. The candidate will be interview by the interview panel. 4. FINAL SELECTIOM AND APPOINTMENT: Recommendation of the interview panel will be put up before the MD by the HR Department for his approval. Candidates for the officer and above after interviewed by the panel will be finally interview by the MD. Selection of candidates will be strictly on the basis of merit. Other things being equal local candidate from state of Bihar will be given preference. Appointment letter will be issued to the finally selected candidates after duly approved by MD. However, in case appointment letter can initially be issued to the candidates and the detailed formal appointment letter can be issued at the time of joining. Before letter of appointment is issued to candidates HR department will ensure the following: 1. Check and verify all the personal details furnished by the candidates. 2. Verify the certificates and other credentials. 3. Make necessary reference/antecedents verifications whenever required. 5. Joining Formalities: (a) Employees joining shall first report in the HR department will facilitate in completing the joining

67. formalities such as filling of joining report and other necessary forms. (b) HR department will ensure that the candidates will be allowed to join subject to their being found medically. Data Interpretation Q1. How long you are working in the organization ? 0-0.5 year 7% 0.5-2 years 19% 3 - more years 39% 2--3 years 35%

68. Q2. what are the various sources of recruitment in your Organization? others 2% news paper advertisement 4% references 8% management 86%

69. Q3. Are you satisfied with the recruitment process of your company ? no 32% yes 68% 70. Q4. Are you satisfied with your organization salary increment Policy ? can't say 30% yes 47% no 23%

71. Q5. Are you satisfied with the training procedure given in the Organization ? no 32% yes 68%

72. Q6. Are you getting regular training in your company ? no 32% yes 68% 73. Q7. What methods is used for the performance appraisal system in your organization? others 11% forced distribution 17% ranking 72%

74. Q8. Are you satisfied with your promotion activities in your Organization? . no 23% yes 77% 75. Q9. Does the present performance appraisal system meet your Career advancement? can't say 28% no 6% yes 66%

76. 10.Are you comfortable with the working environment? 77. no 9% yes 91% Conclusions and results There are the following conclusions come up after the research of the project by filling the questionnaire: The working environment of the organization is excellent this is reason why employees are doing the work their and they are stable there.

78. Generally organization appointed the employees through the recommendations that is references even though other sources are there. The employees are satisfied with the recruitment process of the organization. Most of the employees consider that the salary increment policy is good. Generally ranking method is used in the organization for the performance appraisal system and with the promotion activities. As they accept that the working environment is really good this shows thye are satisfied and the satisfaction of the employees of the organization is very necessary. And at last I would like to say that satisfied employees contribute more to the organization this is the reason why ITC is growing faster. Recommendations and suggestions There are the following suggestions being an HR student I would like to give the organization:

79. Organization should keep the eyes on the recruitment process they should recruit the employees from outside as well means from where they get the employees they should recruit them. As the organization is growing faster they should emphasis on the training programs even though their training programs are quite good. Organization should regularly give the increment on the salary so that who are not satisfied they would become also satisfied. Organization should analyze the training methods and should adopt those methods which are good for the employees and promotion activities should be good so that employees are satisfied as we know this is the basic requirement of the success.