Global growth improved marginally from 3.3% in 2024
to 3.4% in 2025, albeit remaining appx. 30 bps below
the pre-pandemic average of 3.7% p.a. (2010-19)¹.
Growth in 2025 was supported, inter alia, by sustained
Al-led investment in technology, accommodative fiscal
and monetary policies and relatively favourable financial
conditions, largely offset by headwinds from high trade
barriers and heightened global uncertainty. Growth inched
up from 1.8% in 2024 to 1.9% in 2025 in Advanced
Economies, driven by improvement in Euro Area and
Japan, even as growth in the United States moderated
from 2.8% in 2024 to 2.1% in 2025. Emerging Markets
& Developing Economies grew at subdued rate of 4.4%
in 2025 (vs 4.5% in 2024), with stronger growth in India
and the Middle East largely offsetting slower growth in
Brazil and Russia.

In 2026, global growth is expected to moderate to 3.1%,
largely reflecting the impact of the ongoing West Asia
conflict, with the effects likely to be more pronounced
for commodity-importing Emerging Market & Developing
Economies - particularly in low-income developing
countries with pre-existing economic vulnerabilities
and limited buffers¹. Growth in Advanced Economies is
projected to moderate to 1.8% in 2026, as slower growth
in the Euro Area, Japan and the UK is expected to more
than offset relatively stronger growth in the United States.
Growth in Emerging Markets & Developing Economies
is expected to decelerate by 50 bps to 3.9% in 2026.
The duration and intensity of the West Asia conflict
will remain a key monitorable for global growth, while
renewed inflationary pressures from energy prices and
volatility in financial markets could further cloud the global
macroeconomic outlook.

India continued to be one of the fastest growing major
economies in FY 2025-26, with Real GDP growth of 7.6%
(vs 7.1% in FY 2024-25) as per RBI estimates. Domestic
economic activity remained resilient, particularly in the
second half of the year, supported by private consumption,
improving rural and urban demand conditions, income tax
rate cuts, GST rate rationalisation and monetary easing.
Headline inflation eased in the first half of the year, driven
by benign food inflation supported by higher domestic
production and favourable monsoons. However, inflation
firmed up in the second half, reaching 3.4% in March
2026, reflecting an uptick in food prices and higher global
energy prices following disruptions in West Asia. From
a supply side perspective, Manufacturing sector growth
strengthened to 11.5% from 9.3% in FY 2024-25, while
the Services sector remained robust at 8.7% against 7.8%
in FY 2024-25. Growth in Agriculture, however, moderated
to 2.4% from 4.2% in FY 2024-25, reflecting the impact
of benign food inflation in agricultural commodities and
weather disruptions.

India's macroeconomic outlook remains relatively resilient,
with Real GDP projected to grow by 6.9% in FY 2026-27
as per RBI estimates, supported by favourable agricultural
prospects, steady services activity, Government's
continued thrust on capital expenditure and supportive
monetary and financial conditions. Bilateral trade deals
negotiated recently with the US, UK, the EU, New Zealand
and Oman, augur well for India's overall growth outlook.
Rural consumption is expected to be supported by
resilient rural wages and declining unemployment.
Urban consumption is also expected to strengthen,
supported by measures aimed at boosting disposable
incomes and consumption, alongside a recovery in
consumer credit. Healthy corporate and bank balance
sheets, low interest rates and capacity utilisation of
appx. 75% provide a supportive foundation for a revival

in private sector capital expenditure. The ongoing
West Asia conflict has heightened concerns around
India's energy security and imported inflation. A prolonged
disruption, coupled with emerging El Nino conditions
that could weaken monsoons and intensify heatwaves,
poses risks to growth, inflation and the Current Account.
These factors may also have second-order impacts on
consumer sentiment and demand conditions and remain
key monitorables in the near term.

Notwithstanding the near term challenges, the Indian
economy is well-poised for rapid growth in the medium
term, supported by structural drivers such as a
favourable demographic profile, rising affluence, rapid
urbanisation, accelerated digital adoption and improved
infrastructure & connectivity. The Government of India's
sustained focus on Next-Gen physical and digital
public infrastructure, enhancing the competitiveness
of the manufacturing ecosystem, advancing taxation
and financial sector reforms, and improving ease of
doing business is expected to support sustainable
growth and strengthen India's global competitiveness.
Higher capital expenditure outlays, together with a focus
on integrated industrial ecosystems and infrastructure, are
expected to support growth in domestic manufacturing.
At the same time, agriculture-related schemes and digital
initiatives are expected to strengthen rural prosperity and
resilience, thereby fostering a broader virtuous cycle of
consumption-investment-employment.

Policy interventions aimed at supporting sustainable
livelihoods, rationalising taxation and fostering inclusive
growth will remain critical to sustain and accelerate
India's growth trajectory. In this context, the development
of agriculture and wood-based value chains assumes
particular importance in the Indian context, given
their potential to advance multiple national priorities.
Structural support directed towards these sectors will
enable significant multiplier effects for job creation and
strengthening domestic value chains.

India is among the world's leading producers of several
agricultural products, including milk, rice, wheat,

sugarcane, cotton, pulses, spices and fruits & vegetables.
India's agricultural exports have shown strong momentum
in recent years, reaching US$ 52.6 billion in FY 2025-26,
supported by a balanced mix of traditional strengths and
emerging high-value segments, alongside continued
diversification across product categories. However, India's
share of global agri-trade remains modest at around 3%,
underscoring the substantial headroom to strengthen
its global competitiveness. Enhancing agricultural
productivity and value addition to international standards,
while simultaneously improving market linkages, remain
critical to enhance competitiveness of the agri sector and
drive significant increase in farmers' income.

The increasing frequency and severity of extreme weather
events, including droughts and floods, underscore the
imperative to strengthen climate resilience and adaptability
across the agri-food sector. A significant increase in
crop production and productivity, backed by digital tools,
climate smart agriculture and crop diversification, will be
critical in meeting the growing needs of an increasing
population and ensuring economic resilience for farmers.
Evolving consumer preferences are increasingly favouring
health, functional nutrition, and traceable, sustainably
sourced food products. These developments accentuate
the need to enhance the competitiveness of agri value
chains to cater to the fast-evolving market requirements.
India, with its inherent strengths and strategic investments
in this sector, has a unique opportunity to play a
leading role in this global transition and to help shape
a stronger ecosystem for sustainable, regenerative and
climate-smart agriculture.

In this regard, the Government's sustained thrust on
strengthening and scaling Farmer Producer Organisations
(FPOs) holds immense potential to catalyse agricultural
transformation by leveraging economies of scale, enabling
sustainable agriculture, supporting market-led production
and creating larger market access. Government
interventions encouraging private and public investment
in post-harvest activities including aggregation, modern
storage, efficient supply chain, primary and secondary

processing, marketing and branding, along with measures
to harness the power of agri-tech across the agri value
chain are steps in the right direction and towards unlocking
the full potential of the agri sector.

Your Company has adopted targeted collaborative
models to multiply the scale and impact of its agri and rural
interventions. This collaborative approach, as opposed
to a traditional transactional approach, can contribute
meaningfully towards building next generation agriculture
that is climate resilient and capable of supporting gainful
livelihoods. Digitalisation of agriculture also offers the
potential to increase productivity and foster structural
changes across the value chain thereby enabling efficient
use of resources. ITCMAARS (Metamarket for Advanced
Agriculture and Rural Services), that combines the power
of cutting-edge digital technologies with NextGen agri
practices, has scaled up rapidly and currently covers
over 2.6 million farmers and over 2,184 FPOs, across
11 states and over 25,000 villages. Further details on this
transformative initiative are provided in the Agri Business
section of this Report.

It is pertinent to note that a substantial quantum of food is
wasted along the chain in India, depending on the season
and the inherent perishability of the crop. Higher levels of
food processing in the economy can create a much larger
pull for quality agri-commodities, thereby reducing farm
wastages and raising farm incomes. This would require
focused investments in developing product-specific
climate-controlled infrastructure as well as in branded
products that benefit large agri value chains. Corporate
participation is essential not only to invest in requisite
infrastructure, but also to provide assured market linkages
to farmers. A strong focus on India's food processing
sector can play a pivotal role in catalysing a large multiplier
effect, leading to significant job creation, enhanced rural
incomes and sustainable management of food inflation.
Similarly, the Agro-forestry sector, as a source of raw
material for wood-based industry, is woefully constrained
by policies that not only impede job creation in India but
also promote avoidable imports. Recent central policy
interventions to enable plantations on degraded forest

land is a commendable step towards addressing these
challenges. However, appropriate regulatory changes are
required to be effected by the state governments to realise
the full potential of agro forestry in the country.

Your Company's interventions across its operating
segments are aligned to the national priorities of
enhancing competitiveness of Indian agriculture
and industry, generating large-scale employment
opportunities and supporting sustainable livelihoods,
driving import substitution, creating national brands to
maximise value capture in India, increasing Indian agri
exports and promoting sustainable business practices.
Investments made by your Company continue to be
guided by the national objectives of 'Make in India' and
'Doubling Farmers' Income' and the overarching theme
of 'Aatma Nirbhar Bharat' that seeks to make the country
stronger, resilient and more competitive.

Your Company had earlier collaborated with CGIAR's
'Climate Change and Food Security Programme' to
create a template for Climate Smart Villages (CSVs),
under the Climate Smart Agriculture (CSA) programme.
The template has since been further strengthened by your
Company basis the field experiences and now covers
7,055 villages across 12 States covering over 25.50 lakh
acres, supporting farmers in the management of risks
arising from erratic weather events.

Including the acreage in CSVs, the CSA programme
now covers over 31.93 lakh acres in 17 states. Further,
as per the studies done by reputed ICAR - Agricultural
Technology Application Research Institute, Kanpur, the
CSA practices promoted in Rice (Direct Seeded Rice) and
Wheat (Zero Tillage) crops together have demonstrated
reduction of costs by over 20%, improvement in yields
by around 10% and consequently, increase in net returns
by over 23% as compared to conventional practices.

Your Company continues to advance sustainable
and inclusive development through strategic
Public-Private Partnerships with Government institutions,
leveraging your Company's execution capabilities and
innovation alongside the Government's scale, outreach,

and institutional strengths. Several of these partnerships
are focused on agriculture and allied sectors, including
water stewardship and biodiversity, having a direct
bearing on agricultural sustainability. One such successful
partnership was with Niti Aayog, which focused on
enhancing agriculture and allied activities across
27 Aspirational Districts in eight states. Your Company
is now extending its collaborative framework to other
impactful initiatives. Further, your Company has recently
undertaken the expansion of the CSV programme to
10,000 villages in Madhya Pradesh, in partnership with
the Rajiv Gandhi Watershed Management Mission and the
Farmer Welfare and Agriculture Development Department,
Madhya Pradesh.

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

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

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

Your Company sustained its 'AA' rating by MSCI ESG
for the eighth successive year. Further, your Company
continued to feature in the Dow Jones Best-in-Class

(DJ BIC) Emerging Markets Index - a reflection of being
a sustainability leader in the industry and a recognition of
its continued commitment to people and planet. Further
details on this subject are available in the Sustainability
2.0 section of this Report.

FINANCIAL PERFORMANCE

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

-    The FMCG-Others Segment delivered strong
performance with double-digit Revenue growth,
notwithstanding heightened competitive intensity. After
a relatively subdued first half, revenue in the second
half of the year witnessed double-digit growth. Overall,
all major categories viz. Staples, Biscuits, Noodles,
Dairy, Premium Personal Wash, Homecare and
Incense Sticks witnessed broad-based growth. Robust
growth momentum continued in NewGen channels
(viz. e-Commerce, Quick Commerce & Modern
Trade) and premium portfolio. Input prices of major
commodities (viz. edible oil, wheat, maida, cocoa, soap
noodles, etc.) remained at elevated levels, following
sharp escalations in the previous year, the impact
of which was progressively mitigated through smart
net revenue management, portfolio premiumisation
and focused cost management initiatives. Trade and
marketing investments were sustained at competitive
levels to support growth and market standing.

-    The FMCG-Cigarettes Segment witnessed sustained
growth momentum driven by strong performance
across differentiated and premium offerings. Strategic
portfolio and market interventions continued to be
made, with focus on competitive belts & to counter
illicit trade and reinforce market standing.

-    The Agri Business Segment delivered a resilient
performance despite a challenging operating
environment marked by global trade disruptions,
geopolitical uncertainty and restrictions on
agri-commodity trading. The Business continued

to sharpen its strategic focus on scaling up the
value-added agri products portfolio across multiple
value chains. The Leaf Tobacco business further
consolidated its position as the largest Indian exporter
of unmanufactured tobacco.

- The Paperboards, Paper & Packaging Segment
continued to operate in a challenging environment,
with low-priced Chinese and Indonesian supplies in
global markets including India, soft domestic demand
conditions, leading to subdued realisations. Wood
costs remained elevated during the year, weighing
on margins. There was significant improvement in
performance in the second half of the year aided
by moderation in wood prices and increase in
realisations pursuant to the imposition of Minimum
Import Price (MIP) on imports of Virgin Paperboards,
and firming up of global pulp prices. The Packaging
and Printing Business delivered resilient performance
and continues to be acknowledged as a 'first choice
packaging partner' by several reputed FMCG
companies for providing superior and cost-effective
packaging solutions.

Overall for FY    2025-26¹, Gross Revenue at

' 80867.49 crores increased by 10.1%, while EBITDA
increased by 4.9% to ' 25208.22 crores. Profit Before
Exceptional Items and Tax at ' 26951.47 crores grew
by 3.7% over previous year and Profit After Tax stood
at ' 20286.42 crores (previous year ' 20093.29 crores).
Total Comprehensive Income for the year stood at
' 19476.46 crores. Earnings Per Share for the year stood
at ' 16.20 (previous year ' 16.07).

The Directors of your Company are pleased to recommend
a Final Dividend of ' 8.00 per share for the financial
year ended 31st March, 2026. Together with the Interim
Dividend of ' 6.50 per share paid on 27th February 2026,
the total Dividend for the financial year ended 31st March,
2026 amounts to ' 14.50 per share (previous year Dividend
of ' 14.35 per share). Total cash outflow on account of

Dividend (including Interim Dividend of ' 8144.00 crores
paid in February 2026) will be ' 18167.57 crores.

VALUE-ADDED AND CONTRIBUTION TO EXCHEQUER

Over the last five years, the Value-Added by your
Company, i.e., the value created by the economic activities
of your Company and its employees, aggregated over
' 343000 crores, of which over ' 230000 crores accrued
to the Exchequer.

Including the share of dividends paid and retained
earnings attributable to government owned institutions,
your Company's contribution to the Central and state
governments represented appx. 76% of its Value-Added
during the year.

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

FOREIGN EXCHANGE EARNINGS

Your Company continues to view foreign exchange
earnings as a priority. All Businesses in your Company's
portfolio are mandated to engage with overseas markets
with a view to testing and demonstrating international
competitiveness and seeking profitable opportunities for
growth. Foreign exchange earnings of the ITC Group over
the last ten years aggregated nearly US$ 10.1 billion, of
which agri exports constituted appx. 60%. Earnings from
agri exports, which effectively link small farmers with
international markets, are an indicator of your Company's
contribution to the rural economy.

During FY 2025-26, your Company and its subsidiaries
earned ' 11204 crores in foreign exchange. The direct
foreign exchange earned by your Company amounted
to ' 8286 crores, mainly on account of exports of
agri-commodities. Your Company's expenditure
in foreign currency amounted to ' 3441 crores,
comprising purchase of raw materials, spares and other
expenses of ' 3078 crores and import of capital goods of
' 363 crores.

Your Company's leadership position in the cigarette
industry continues to be driven by its unwavering focus on
nurturing a future-ready portfolio of world-class products
anchored on its integrated seed-to-smoke value chain,
superior consumer insights, robust innovation pipeline
and world-class product development capabilities.

During the year, the Business continued to make
strategic portfolio and market interventions, with focus
on competitive belts, to counter illicit trade and reinforce
market standing.

-    The Business strengthened its presence in focus
markets with the launch of several differentiated
offerings across segments, demonstrating agility in
responding to evolving market dynamics.

-    Several innovative variants have been introduced
recently under the 'Classic', 'Gold Flake', 'American
Club' and 'Players' trademarks, amongst others,
to expand and deepen consumer franchise. These
initiatives were supported by the introduction of
limited-edition variants and targeted interventions
to enhance the reach of premium offerings across
markets.

-    Design and packaging upgrades were undertaken
to strengthen the positioning of 'Classic' and 'Gold
Flake' trademarks.

During the year, the Business delivered a resilient
performance on the back of sustained volume-led
growth momentum. Differentiated and premium offerings
continued to perform well leveraging mainstream
trademarks and innovation. Consumption of high-cost
leaf tobacco inventory weighed on margin, which was
partially mitigated through a combination of product mix
enrichment and strategic cost management interventions.

A punitive and discriminatory taxation / regulatory regime
over the years has led to significant operating challenges for
the legal cigarette industry in the country. It may be recalled
that relative stability in taxation over the past few years,

coupled with deterrent enforcement actions, checked the
growth of illicit trade and enabled the legal cigarette industry
to recover volumes lost to illicit trade during the years of high
incidence of taxation. This also resulted in the concomitant
increase in demand for Indian tobaccos, bolstering revenue
to the Exchequer from the tobacco sector.

However, increase in GST rate from 28% of transaction
value to 40% of retail sale price along with a steep hike in
excise duties w.e.f. 1st February 2026 upon phasing out of
Compensation Cess, have resulted in an unprecedented
increase in tax incidence on cigarettes.

It is pertinent to note the following points in this context:

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

-    Over the years, high and discriminatory taxes on
cigarettes, while aimed at reducing consumption,
have had unintended consequences of fuelling the
growth of smuggled and domestically manufactured
tax-evaded cigarettes, causing a shift to other lightly
taxed / tax-evaded forms of tobacco products,
comprising illicit cigarettes, bidi, chewing tobacco,
gutkha, zarda, snuff, etc. Consequently, while the
share of legal cigarettes in total tobacco consumption
has declined from 21% in 1981-82 to a mere 10%,
aggregate tobacco consumption in the country has
increased over the same period. Despite accounting
for 1/10th of the tobacco consumed in the country,
duty-paid cigarettes contribute more than 4/5th of
the revenue generated from the tobacco sector.

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

-    The recent unprecedented increase in tax incidence
would enhance the tax arbitrage providing further
impetus to illicit trade and adversely impact
millions of farmers, MSMEs, retailers and local
value chains, while sub-optimising the revenue
potential of the sector.

-    As per the Report on the Causes & Control of
Illegal Tobacco by Alvarez & Marsal based on
study conducted across 71 countries over 17 years
(2005 - 2022), illicit trade tends to get embedded in
the ecosystem, posing serious challenges to public
health and law enforcement.

'Illicit markets: A Threat to Our National Interests', a
study published by FICCI-TARI in September 2022,
noted that “ The consumption of illegal cigarettes in
India has increased, signalling a shift from legal
products to cheaper substitutes or illicit products,
which have no or little tax element in them. When
taxes are raised beyond a certain optimum level,
consumers gravitate towards cheaper alternatives
or illicit supplies, which are normally smuggled or tax
evaded goods".

-    It is estimated that illicit trade causes an annual
revenue loss of appx. ' 23000 crores to the
Exchequer. With respect to other tobacco products
as well, the revenue losses are significant since about
68%³ of the total tobacco consumed in the country
remains outside the tax net. During the year, there
were extensive media reports on the multitude of
cases of evasion of taxes / duties by dealers in illicit
cigarettes which were unearthed by raids conducted
by the Directorate of Revenue Intelligence (DRI) and
other enforcement agencies. While enforcement
measures have been strengthened, global experience
suggests that sustainable containment of illicit trade
also requires addressing demand-side factors such
as tax incidence and affordability pressures.

-    The DRI, in its report “Smuggling in India 2024-25”
acknowledges the high incidence of taxes in India
providing opportunities for illicit trade of cigarettes.
The report states: “The Illicit Cigarette Trade thrives
due to high taxes and import duties. It is driven by
organised syndicates and black markets, causing
revenue loss and undermining public health goals.
Smuggled cigarettes often originate from Southeast
Asia, entering India via the Myanmar border, Middle
Eastern Free Trade Zones, maritime containers and
passenger baggage”. Global agencies, including
bodies under the United Nations Security Council
and several national enforcement authorities,
have highlighted that illicit tobacco trade has
emerged as a significant security concern,
with proceeds increasingly linked to the financing
of organised crime and terrorism. In addition,
the World Bank has highlighted that illegal tobacco
products are disproportionately consumed by
low-income populations and are often distributed
through unregulated channels⁴. Accordingly,

a balanced approach addressing both
taxation-driven affordability and enforcement
measures is critical to contain illicit trade and
bolster revenue generation to the Exchequer.

Coordinated efforts involving all key stakeholders
including policymakers, regulators, fiscal authorities,
law enforcement agencies and legal industry, are
critical to contain the growth of illicit trade.

-    Tobacco control measures in India have ranked
amongst the most stringent in the world from the

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

It is pertinent to note that smuggled international
brands of cigarettes do not bear any of the pictorial
or textual warnings mandated by Indian laws or bear
much smaller pictorial / textual warnings as per the
tobacco laws of the countries from where these
cigarettes originate. As reported in prior years, findings
from research conducted by IMRB International, an
independent market research organisation, indicate
that the lack of pictorial warnings on packets of
smuggled international brands of cigarettes or
their diminutive size creates a perception in the
consumers' mind that these illicit cigarettes are 'safer'
than domestic duty-paid cigarettes that carry the 85%
pictorial warnings. The combination of low prices to
consumers due to tax evasion and the misleading
perception created by the absence of statutory
pictorial warnings provides significant buoyancy to
illicit cigarette volumes.

India is among the top three tobacco growing
countries in the world. Tobacco plays a significant
role in the Indian economy on account of its
considerable contribution to the agricultural, industrial
and export sectors⁵. Besides, the sector also plays
a key role in employment generation and provides
livelihood to appx. 46 million people. As such,

Report on Tobacco Control in India, Ministry of Health & Family Welfare, GoI,

2004 (Jointly supported by Centers for Disease Control and Prevention, USA

and the World Health Organisation)

Illicit cigarette trade also has a deleterious impact
on farmers and farm workers engaged in the
tobacco value chain.

-    It may be noted that several major tobacco producing
countries, including the USA, have established
regulatory frameworks taking into consideration the
economic interests of their tobacco farmers. The
punitive and discriminatory taxation & regulatory
regime on cigarettes in India over the years, has
adversely affected the livelihood of Indian tobacco
farmers with corresponding gains to those countries
that have opted for moderate and equitable tobacco
regulations. These developments coupled with lower
export incentives in India and relative weakness of
currencies in certain competing geographies have,
in the past, had a debilitating impact on millions of
livelihoods, dependent on the tobacco value chain
in India.

It is pertinent to note that studies by the Central
Tobacco Research Institute (CTRI) indicate that on
account of agro-climatic conditions, there is no equally
remunerative alternate crop that can be grown in the
FCV tobacco-growing regions of the country.

-    As reported in earlier years, your Company and
several other stakeholders had challenged the
validity of the pictorial and textual warnings covering
85% of the surface area of the packet prescribed
under COTPA. The Honourable Karnataka High
Court, by its judgment in December, 2017, held the
85% pictorial warnings to be factually incorrect and
unconstitutional. Upon Special Leave Petitions filed
by the Government and others, the Honourable
Supreme Court has stayed the judgment of the High
Court. The cases are pending before the Honourable
Supreme Court.

Your Company continues to engage with policymakers for
a framework of pragmatic, equitable, non-discriminatory,
evidence-based regulations and taxation policies that
balances the economic imperatives of the country and
tobacco control objectives, cognising for the unique
tobacco consumption pattern in India.

Your Company has adopted a strategic approach to
mitigate the impact of the unprecedented increase in tax
incidence and sustain its market standing. This includes
staggered and agile pricing actions to minimise the risk of
a significant shift of volumes to illicit trade and consequent
loss of revenue to the Exchequer, and re-architecting the
product portfolio by leveraging a diverse range of powerful
trademarks.

The state-of-the-art manufacturing facilities of the
Business continue to set new benchmarks in the areas
of quality, sustainability, supply chain responsiveness
and productivity, driven through investments in new
technology induction, digital technologies, innovation, and
by ensuring product & process excellence. Cutting-edge
technologies in the areas of Industry 4.0 and data sciences
are being leveraged to build a smart manufacturing
environment of connected systems. These initiatives,
coupled with innovative capabilities, and in-house design
and development expertise, have further improved the
speed-to-market for the launch of new and differentiated
offers of the Business. Continued focus on quality
has enabled the Business to deliver superior product
performance across segments and geographies.
These capabilities, built over the years, have also enabled
the Business to proactively respond to the taxation
changes through timely capacity realignment.

As a testament to the Business' focus on operational
excellence, the Bengaluru, Pune, and Kidderpore units
won the 'Apex Prize for Operational Excellence' at the
Integrated Manufacturing Excellence Initiative (IMExI)
Awards organised by the Kaizen Hansei Institute, a wing
of the Kaizen Institute of India.

In line with your Company's commitment to the
'Triple Bottom Line' philosophy, the Business continued to
focus its efforts on resource conservation and the adoption
of best-in-class technologies and processes. Sustainability
initiatives of the Business continued to receive industry
recognition with the Munger & Bengaluru units being
conferred with the 'Noteworthy Water Efficient Unit' Award
by the Confederation of Indian Industry (CM). Bengaluru unit
has been commended with special recognition under the
'Best Performing Wind Farm' in Zone III - above 2MW

category by the Indian Wind Power Association. As a
hallmark of excellence in safety practices, the Pune unit
secured the coveted 'Sarvashreshtha Suraksha Puraskar'
awarded by National Safety Council of India. Kidderpore
unit was recognised with the 'Five Golden Stars' and Safety
Shield Award, demonstrating its commitment to safety and
further received the 'Platinum' Award in Manufacturing
Sector at the ICC National Occupational Health & Safety
awards by the Indian Chamber of Commerce. Further,
during the year, the Saharanpur Factory was accredited
with SA8000 certification. With this accreditation, all
factories of the Business are now SA8000 certified,
reinforcing your Company's strong commitment to human
rights and ethical standards.

The year ahead presents an extremely challenging
operating environment in view of the unprecedented
increase in taxation that will undoubtedly test the
resilience and adaptability of legitimate players in
the industry. Notwithstanding such challenges, your
Company remains confident of fortifying its market
standing in the legal cigarette industry leveraging its
robust product portfolio and strong innovation pipeline,
world-class quality, integrated seed-to-smoke value chain,
cutting-edge manufacturing & digital technologies and
best-in-class in-market execution capabilities.

FMCG - OTHERS

Your Company's FMCG - Others Segment delivered
a strong performance during the year, with double-digit
revenue growth driven by broad-based scale up across
categories, notwithstanding heightened competitive
intensity. While the year commenced on a subdued note,
amidst weak demand conditions and elevated input costs
following sharp price escalations in the previous year, the
Businesses responded with agility through focused market
interventions, portfolio premiumisation, supply chain
resilience & efficiency, disciplined cost management and
judicious pricing actions. These strategic actions, together
with progressive improvement in the macroeconomic
environment and consumer sentiment during the year—
supported by measures such as income tax rate cuts,
lower interest rates, reduction in GST rates and favourable

monsoons—helped build momentum through the second
half. Trade and marketing investments were sustained at
competitive levels to support growth and market standing.

Your Company's FMCG Businesses recorded Segment
Revenue of ' 24209.75 crores during the year, representing
growth of 10.1% over the previous year. Segment Results
grew at a faster pace of 14.1% to ' 1802.63 crores
reflecting, inter alia, benefits of scale expansion, improved
portfolio mix, disciplined cost management and enhanced
supply chain efficiencies. Segment Revenue and Results
grew by 13.6% and 46.4%, respectively, in the second half
of the year.

Your Company's strategy to rapidly scale up the FMCG
Businesses remains anchored on strengthening the
core, extending trusted mother brands into value-added
adjacencies, and nurturing new vectors of growth
leveraging institutional capabilities viz. agri sourcing,
packaging, cuisine expertise, and consumer insights.
The key strategic pillars to drive long-term growth
and competitiveness comprise future-ready portfolio,
purpose-led brands, innovation, agile & resilient
supply chain, smart omni-channel distribution and
value accretive M&A.

The Businesses continue to leverage digital capabilities
to generate sharper consumer insights, deepen consumer
engagement and strengthen brand loyalty. Strategic
interventions continue to be made towards delivering
delightful brand experiences seamlessly using an 'Always
On' approach across touchpoints through personalised
journeys mapped to individual needs, preferences and
context.

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

Cutting-edge digital technologies including AI, GenAI,
Industry 4.0 and industrial Internet of Things (loT)
continue to be deployed to strengthen your Company's
real-time operating and execution platforms, enhance
productivity and drive efficiency & cost agility.
These initiatives are anchored on key pillars such as
synchronised planning and forecasting, agile and resilient
supply chains, smart buying and value engineering,
smart manufacturing and smart demand capture and
fulfilment. Strategic investments have also been stepped
up to build integrated insight platforms by harmonising
and connecting large, previously fragmented datasets,
powered by AI/ML technologies and supported by
'human-centred design' and visualisation tools, thereby
enabling sharper and more agile decision-making.

Supported by these strategic capabilities, the FMCG
Businesses comprising Branded Packaged Foods, Personal
Care Products, Education and Stationery Products, Incense
Sticks (Agarbattis) and Safety Matches have grown at an
impressive pace over the past several years.

Your Company's vibrant portfolio of over 30 world-class
Indian brands, largely built through an organic
growth strategy leveraging institutional synergies in a
relatively short period of time, represents an annual
consumer spend of over ' 37000 crores and reach

nearly 280 million households in India. These home-grown,
purpose-led Indian brands, powered by agile innovation,
support the competitiveness of domestic value chains,
especially in the agri space, thereby ensuring creation and
retention of value within the country.

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

Your Company remains focused on driving the next
phase of growth in its FMCG Businesses, anchored on
strong growth platforms and a future-ready portfolio.
It is pertinent to note that the chosen categories, which
are largely characterised by low household penetration
levels and/or low per capita consumption, offer significant
headroom for Total Addressable Market expansion and
potential long-term growth. In this context, it is noteworthy
that a key element of your Company's growth strategy is
to foray into value-added adjacencies and categories of
the future by leveraging the 30+ powerful mother brands
it has established over the years. Recent examples of
such brand extensions include Aashirvaad to Dairy,
Ready-to-Eat, Vermicelli, Rava, Besan, Indian breads,
Salt and Spices; Sunfeast to Dairy Beverages and
Cakes; Bingo! to Namkeens; ITC Master Chef to
Frozen Snacks and Cooking Pastes; Classmate to
Writing Instruments; Fiama to Body Wash and
Body Scrubs; Savlon to Sanitisers, Wipes, Fabric
Conditioners and Disinfectant Sprays; Nimyle to
Dishwash liquids and Mangaldeep to Puja essentials.
Simultaneously, the FMCG Businesses continue to
make strategic investments in building categories of the
future and establishing their 'right to win' by progressively
scaling up nascent categories where beachheads have
been created.

In line with the ITC Next Strategy of building a
future-ready portfolio, accelerating growth and enhancing
competitiveness, your Company has in recent times
undertaken several value-accretive acquisitions in the
digital-first and organic space, viz. Sresta Natural
Bioproducts⁷ (24 Mantra Organic), Sproutlife Foods
(Yoga Bar), Mother Sparsh Baby Care (Mother Sparsh)
and Ample Foods (Prasuma & Meatigo), which delivered
robust growth during the year and together are clocking
ARR⁸ of over ' 1350 crores. These interventions are
expected to further reinforce your Company's presence
and market standing in high-growth and future-facing
businesses.

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

The FMCG Businesses continue to create structural
competitive advantage and enhance profitability by
leveraging world-class distributed manufacturing and
logistics infrastructure, a deep multi-channel distribution
network, newer routes to market, smart buying & value
engineering, and smart manufacturing interventions.
With growing scale, supply chain operations are also
being increasingly delayered through direct-to-market
shipments, thereby reducing freight costs and multiple
handling. Your Company is confident that these strategic
interventions, which are already delivering substantial
benefits, will continue to realise their full potential over the
medium term and create long-term value.

The ongoing West Asia conflict has led to a sharp
escalation in key inputs and fuel costs, intensifying
inflationary pressures in the near term. Your Company
continues to take proactive measures to mitigate the
impact of such headwinds across all nodes of operations,
sustain competitiveness and growth momentum.

Your Company remains well-positioned to accelerate the
growth of its FMCG Businesses, anchored on a strong
future-ready portfolio powered by purpose-led brands,
world-class product quality, deep consumer insights, a
cutting-edge innovation pipeline, and an agile, resilient
and efficient supply chain. Your Company's institutional
strengths - including strong backward linkages with the
Agri Business, a deep and wide multi-channel distribution
network, access to culinary expertise, industry-leading
packaging know-how and access to robust R&D platforms
nurtured by LSTC - will continue to serve as distinctive
sources of competitive advantage and support sustained
value creation over the long-term.

Branded Packaged Foods

Your Company sustained its position as one of India's
largest and fastest growing branded packaged foods
businesses, underpinned by a robust portfolio of trusted
brands, a strong innovation engine supporting the
categories with several first-to-market offerings and a
vast range of differentiated products catering to diverse
tastes & preferences of consumers. Your Company's
unique combination of institutional strengths, viz. superior
consumer insights, agri sourcing, robust distributed
manufacturing & omni-channel distribution architecture,
capabilities of your Company's LSTC and cuisine expertise
resident in ITC Hotels Limited, a group entity, enabled the
Business to effectively navigate volatility in the external
environment, including geopolitical uncertainty and
elevated commodity prices.

The Branded Packaged Foods Businesses remain
focused on addressing emerging consumer needs
through innovations anchored on the vectors of health,
nutrition, wellness, immunity, naturals, indulgence
and convenience. While fortifying the core portfolio,
the Businesses continue to scale-up presence in
value-added adjacencies by leveraging powerful mother
brands and investing in categories of the future, to drive
premiumisation and expand consumption occasions.

Relentless focus on delivering superior quality
products to consumers continues to be a key source of
sustainable competitive advantage. The Businesses
continue to leverage the deep agri-commodity sourcing
expertise resident in your Company's Agri Business
to secure high quality raw materials leveraging
a wide sourcing network and direct farm linkages
including FPOs, thereby ensuring the highest level
of quality, consistency and safety in its products.
In addition, manufacturing systems and governance
frameworks are designed to meet stringent food safety
and quality standards ensuring compliance with all
applicable regulations.

- In the Staples Business, 'Aashirvaad' sustained its
strong growth momentum and enhanced market
standing across segments and geographies. The
value-added Atta portfolio, consisting of Multigrain,
Select and Sugar Release Control Atta, posted
robust growth, driven by superior value proposition.
The portfolio was further augmented with the launch of
'Aashirvaad High Protein Atta', in line with the growing
consumer preference for protein-centric offerings;
consumer response has been encouraging. The
Aashirvaad Chakki range of 'Premium MP Sehori',
'MP Sehori', 'MP Lokwan' and 'Boga Atta', catering to
regional preferences, performed well.

Value-added adjacencies, viz. 'Gluten Free Flour',
'Ragi Flour', Organic portfolio of 'Organic Atta'
and 'Organic Dals', 'Aashirvaad Vermicelli',
'Aashirvaad Rava' (Suji Rava, Bansi Rava, Samba
Rava) witnessed robust growth. 'Aashirvaad Besan'
was extended to additional markets and
continued to scale up during the year.
'Aashirvaad Soya Chunks', with its differentiated
'Juicy and Tasty' proposition, continued to gain
consumer traction. 'Ready to Cook Chapati' and
'Frozen Naans / Parathas', which address the growing
need for convenience, witnessed accelerated growth
and are being expanded to newer markets.

Overall, Aashirvaad's value-added variants and
adjacencies have grown three-fold over the last five
years, with its share in the portfolio doubling over this
period.

'Aashirvaad Salt' continued to post strong growth in
focus markets during the year. Premium offerings
such as 'Aashirvaad Himalayan Pink Salt', scaled
up in top metros, while the recently launched
'Aashirvaad Iron Shakti Salt' is witnessing
encouraging consumer traction in target markets.

In the Spices category, the Business continued to
deliver strong growth, driven by a sharply focused,
market-specific strategy aimed at delivering authentic
and regionally relevant taste experiences to
consumers. The 'Sunrise' brand further strengthened
its market leadership in the core market of West
Bengal, while making steady progress in Northeast
region, Bihar and Jharkhand. The brand strengthened
its regional credentials through the introduction of
first-to-market, differentiated offerings tailored to local
palates, including 'Sunrise Til Chicken' in Assam and
'Sunrise Champaran Mutton Masala' in Bihar, along
with products such as 'Sunrise Prawn Curry Masala'
and 'Sunrise Chicken Tikka Masala' enhancing
relevance among new-age consumers.

'Aashirvaad Spices' continued to consolidate its
presence in core markets of Andhra Pradesh and
Telangana, supported by a clear focus on quality-led
differentiation, hyper-local portfolio, and culture centric
marketing. Aashirvaad continued with Natural Star
Nani as the brand ambassador, with the campaign
'Dammu Meede, Star Meere' effectively reinforcing
the brand's promise of superior potency, purity and
consistently tasty food. The brand also scaled its
pan-India play in NewGen channels, particularly in
whole spices, leveraging ITC's institutional strengths
and digital reach.

With a focused approach towards product
development, purposeful marketing inputs, consumer

activations and region-specific interventions
supported by manufacturing excellence and sharply
targeted communication across platforms, your
Company is confident of further strengthening
Aashirvaad's market leadership position and building
categories of the future.

In line with the strategy to augment your Company's
future-ready portfolio, during the year your Company
acquired 100% of the share capital of Sresta Natural
Bioproducts Private Limited (SNBPL). SNBPL
is engaged in the business of manufacture and
sale of organic packaged food products under the
'24 Mantra Organic' brand which has strong brand
equity in the domestic as well as international markets.

SNBPL, a pioneer and leading player in the organic
packaged staples category, has over the years
built a strong network of ~27,500 farmers spread
across ~1.4 lakh acres of certified organic land in
10 states. The acquisition reinforces your Company's
commitment to build a portfolio of future-facing
winning brands that address the evolving needs of
Indian consumers and will unlock value creation
opportunities by leveraging your Company's
institutional strengths to drive synergies in areas such
as product development & innovation, agri sourcing,
manufacturing, supply chain and distribution.

- The Biscuits category delivered a strong performance
during the year on the back of powerful brand
propositions, differentiated offerings and strong
consumer connect. The 'Sunfeast Dark Fantasy'
range of differentiated cookies continued to
strengthen its leadership position in the premium
segment. 'Dark Fantasy' is also now the No. 1
overall biscuits brand in the Modern Trade channel,
registering robust growth across its portfolio,
including 'Dark Fantasy Chocofills', 'Dark Fantasy
Bourbon', 'Dark Fantasy Sandwich Creme' and
'Dark Fantasy Yumfills Pie'. The 'Mom's Magic' range
of cookies recorded healthy growth during the year.

The portfolio was further strengthened with the launch
of 'Sunfeast Mom's Magic Shines', which has elicited
strong consumer response. 'Sunfeast Supermilk'
biscuits, harnessing the goodness of 'Naatu Maatu
Paal' (biscuits enriched with native Indian cow milk),
continued to scale up successfully in the operating
market of Tamil Nadu.

The Business also launched a delectable range of super
premium cookies with globally sourced ingredients
under 'Sunfeast Baked Creations' brand. These
short shelf-life products are backed by hyperlocal &
customised supply chains and are accessible to
consumers on Quick Commerce platforms. These
products have received encouraging response from
discerning consumers and are being scaled up.

Towards deepening consumer engagement further,
the brand launched several purpose-led and
clutter-breaking campaigns during the year.
'Mom's Magic' continued its 'Dear Maa' campaign,
championing child adoption as a meaningful social
change initiative. 'Sunfeast Marie Light' established a
differentiated positioning anchored on the functional
benefit of Vitamin D. 'Sunfeast Dark Fantasy' further
strengthened consumer engagement through the
launch of its '1 Million Fantasies' campaign, aimed at
deepening brand affinity by bringing to life consumer
aspirations, including a distinctive opportunity to
celebrate with superstar Shah Rukh Khan.

- 'Bingo!' Snacks delivered resilient performance
during the year while strengthening its product
portfolio with the launch of exciting variants of snacks
and namkeens. Bingo! remains the market leader in
the Bridges segment at an All-India level, and in the
Potato Wafers segment in South India. Bingo! Mad
Angles witnessed strong growth, supported by wider
distribution, sustained marketing investments and
exciting variants such as 'Bingo! Mad Angles Mystery
Pickle'. The Potato Wafers portfolio was revitalised
through packaging refresh and the repositioning of

Bingo! Ridged Cut. The portfolio was augmented with
the introduction of two exciting flavour innovations -
'Himalayan Pink Salt' and 'Butter & Garlic'. The
Business further fortified its portfolio with the launch
of three exciting variants of Baked Puffs under 'XXX'
range - 'Chilli Cheese', 'Hot & Spicy Korean Style'
and 'Hot & Sweet'. 'Bingo! Kitchen Style' - a premium
range of South Indian snacks was introduced during
the year, bringing authentic flavours inspired by
regional snacking traditions. These new launches
have all received encouraging consumer responses.

-    'YiPPee!' sustained its position as a strong No. 2
player in the Instant Noodles segment, delivering
strong growth. The product portfolio was augmented
with premium Pan Asian range of noodles comprising
of three variants, 'Gochujang', 'Tom Yum' and
'Yaki Udon', offering international flavour experience.
The brand strengthened its regional connect with
targeted campaigns across key markets including
Odisha, Kerala, Tamil Nadu and the Hindi heartland.
Digital and new-age media continued to remain
a key area of focus, with a significant increase in
investments during the year. The brand also adopted a
content-first approach across social media platforms,
enabling deeper consumer engagement and fostering
stronger brand affinity with its target audience.

-    The Frozen Foods Business, operating under the
brands 'ITC Master Chef' and 'Farmland', delivered
strong growth during the year, powered by a range
of delicious & innovative offerings designed to
meet consumer needs across 'any-time' snacking
and meal occasions. The Business introduced a
refreshed brand positioning - 'Har Roz Kuch Special',
to enhance the everyday relevance of frozen foods
by emphasising convenience, variety and suitability
for multiple consumption moments. This positioning
addresses the growing consumer need for simplified
meal planning and variety, particularly among
homemakers and young couple households, and was

further reinforced through targeted digital campaigns
in key markets.

The introduction of 'Piri Piri French Fries',
'Chicken Malai Seekh Kebab', 'Chicken Cheese Fills'
and 'Crispy Cheese Fills' further strengthened the
Retail portfolio and reinforced the Business' focus
on contemporary and differentiated offerings.
The Business expanded its direct distribution footprint
to over 200 towns, leveraging a judicious mix of
emerging and traditional channels, supported by
data-driven digital marketing initiatives to deepen
consumer engagement and strengthen franchise.
The Frozen portfolio now comprises of over
80 products, spanning Indian and Western snacks,
frozen breads, prawns & vegetables, providing
consumers with a comprehensive and convenient
frozen foods range. Together with the wide range
of offerings from Ample Foods Private Limited
(an associate company operating under the
'Prasuma' & 'Meatigo' brands), the Frozen foods
portfolio straddles multiple cuisines, viz. North Indian,
Pan Asian, Oriental etc.

-    'Aashirvaad Svasti' fresh dairy portfolio continued
its robust growth momentum during the year, led by
the strengthening of its premium milk variant 'Select'
and significant growth in value-added products
such as Curd, Paneer, Mishti Doi and Lassi, driven
by differentiated and superior offerings. The fresh
dairy portfolio is currently available across Bihar,
West Bengal & Jharkhand markets and continues to
enhance market penetration through rapid scale-up
of its distribution network.

-    The Beverages portfolio was strengthened through
the launch of 'No Added Sugar' Juices range and
the revitalisation of the coconut water range, in line
with growing consumer preference for low sugar
and wellness beverages. Dairy Based Beverages
continued to record resilient growth on the back of
successful scale up of 'Aashirvaad Badam Milk' &

Lassi and Dark Fantasy Milkshakes in select
geographies. Business launched 'Breakfast Smoothie
with Oats', a first-to-market innovation in drinkable
breakfast segment, offering a healthy and convenient
alternative for breakfast. Further, the smoothies
range has been extended with the launch of 'Mango
Smoothie with Chunks' and 'Berry Smoothie with
Chia seeds', targeted at delivering a premium
consumer experience.

-    The Confectionery Business continued to nurture its
premium portfolio and scale up the business under the
'Fantastik Chocostick', 'Dark Fantasy Choco Rolls',
'Candyman Fruitee Fun' and 'Candyman Tadka Time'
sub-brands. The portfolio was augmented with the
launch of 'Candyman Fruitee Fun Soft Chews', a soft
chewy candy available in four exciting fruit flavours,
designed to offer a playful treat for consumers
young at heart. The Business also launched
'Ultra Mintz' in the premium confectionery space,
crafted for adult consumers. These offerings have
received excellent consumer response aided by
impactful communication. The Business witnessed
strong scale up in NewGen channels viz. Modern Trade
and e-Commerce, driven by robust performance in
'Dark Fantasy Choco Rolls' and 'Candyman Sourzzz'
homepack portfolio.

-    'Fabelle' chocolates continue to receive excellent
response from discerning consumers, setting new
benchmarks in the luxury and premium chocolate
segments. During the year, your Company opened
an exclusive Fabelle store in Forum Mall, Bengaluru,
strengthening the brand's premium retail footprint.
The 'Sunfeast Fantastik' chocolate range, comprising
Choco Almond and Fruit & Nut variants, continued
to scale up during the year. The portfolio was further
strengthened with the launch of 'Sunfeast Fantastik!
Strawberry Cheesecake' and 'Sunfeast Fantastik!
Choco Meltz', delivering unique products that offer
a premium experience at an affordable price point.

- Exports continue to remain a key focus area for the
Branded Packaged Foods Businesses. During the
year, exports recorded rapid growth across multiple
categories. Supported by a strong portfolio of winning
products and a well-established distribution network,
Aashirvaad Atta exports further consolidated its
leadership position across overseas markets.
The Business also continued to actively evaluate
and scale export opportunities within its portfolio,
including Biscuits, Noodles, Snacks, Frozen Breads
and Besan. Leveraging the strong equity of its core
Brands - 'Aashirvaad', 'Sunfeast', 'Sunfeast YiPPee!',
'Bingo!' and 'Kitchens of India', your Company is well
placed to pursue growth in exports across focus
markets and channels.

Your Company continues to fortify its portfolio through
focused acquisitions in high-growth, future facing
categories such as organic foods, nutrition and digital-first
brands. These acquisitions form a core pillar of your
Company's strategy, combining entrepreneurial brand
capabilities with your Company's scale, institutional
strengths and integrated supply chains to drive portfolio
premiumisation, accelerate growth, and create sustained
long-term value.

Nutrition plays a central role in sustaining health and
well-being across life stages. Your Company's scale, reach
and integrated capabilities uniquely position it to respond
to evolving consumer needs for healthier choices along
with superior quality, taste, convenience, affordability and
sustainability.

The Business has launched a range of nutrition dense
offerings under several brands viz. High Protein Atta
under 'Aashirvaad', High Fibre Digestive biscuits under
'Sunfeast', products under the 'Right Shift' brand to
address the nutritional needs of consumers aged over 40.
The acquisition of '24 Mantra Organic' would also further
augment the Business' portfolio of nutrition-led healthy
food products. Your Company achieved the first rank

in the Access to Nutrition Initiative (ATNI) India Index
2023 among 20 of the largest Indian food & beverage
manufacturers. Your Company was recognised for its
strong nutrition strategy, improved product healthiness
based on Nutrient Profiling System, and efforts to influence
consumers toward healthier choices. The Businesses
continue to scale up data driven, AI powered campaigns
to deliver deeply engaging communication and content,
driving effectiveness and efficiency across large and
small brands. The Business' marquee campaigns across
brands have been widely celebrated across prestigious
forums. Aashirvaad Atta's thematic multichannel campaign
secured two Silvers in the 'Integrated Advertising Category'
and another Silver in the highly coveted 'Sustained
Success Category' at the Effies. 'Sunrise Spices' Swasthya
Bengal campaign won Silver in Regional Products - Single
Market campaign at the same forum. The Bingo! 'Bhaukal
Lok Kumbh Mela' campaign won a Gold in the Integrated
Marketing Campaign Category at the Exchange for
Media. 'Candyman Sourzzz', created a 'Soury not Sorry'
campaign, which won Silver in both the Best Use
of Social Networks / Social Media and Best Mobile
Video categories at the Exchange for Media awards.
Sunfeast Dark Fantasy's Big Fantasies campaign won
Silver at BW Excel Awards.

During the year, the Business enhanced the integration of
marketing and technology through the adoption of agentic
Al-based solutions across use cases. With the increasing
use of agentic AI and LLM-enabled brand discovery
& purchase journeys, the Business has progressed
towards a more connected AI approach, which includes
the implementation of an integrated AI suite across the
consumer marketing ecosystem.

The Business continued to channelise consumers
towards higher value user journeys across its owned
value-exchange platforms, including www.letsboing.com,
www.familylikefriends.com and food content leadership
platform www.foodiesonly.in . The Business garnered

nearly 30 million user journeys culminating to the brands'
owned websites which enabled decoding consumer
intent, behaviour, category affinities, and signals from
the broader digital ecosystem. In an increasingly
ad-averse, digital-first environment, the Business'
owned value-exchange platforms successfully captured
sustained user attention, driving meaningful engagement.

The Business also built an integrated ecosystem combining
consumer data, insights, and creative capabilities through
'Studio Alchemy', delivering nearly 40,000 AI-generated
and optimised content pieces across the marketing funnel.

Over the years, your Company has made significant
investments in setting up state-of-the-art Integrated
Consumer Goods Manufacturing and Logistics facilities
(ICMLs) proximal to large demand centres. These facilities
are at the heart of your Company's strategy to create
structural advantage by enhancing product freshness and
market responsiveness, reducing the cost of servicing
proximal markets, enabling scalability, while also setting
new benchmarks in safety and product quality. 12 ICMLs are
currently operational in locations proximal to large demand
centres; capacity utilisation at these ICMLs continues to
be ramped up. Your Company continues to leverage the
benefits of the state-of-the-art Ancillary Manufacturing cum
Logistics Facilities (AMLFs) at Pudukkottai, Kapurthala
and Panchla. These automated facilities are co-located
with the ICMLs and provide several structural advantages
including inventory optimisation, delayering operations
and lowering the cost of market servicing.

Driven by an unwavering commitment to quality,
sustainability, and manufacturing excellence, your
Company has earned several prestigious external
awards and recognitions across Safety, Sustainability,
Quality & Food Safety, Manufacturing Excellence, and
Environmental, Social and Governance (ESG). Key
recognitions include the National Food Safety Trophy &
Food Safety Commendation by Confederation of
Indian Industry (CII), Gold Medal at the National
Awards for Manufacturing Competitiveness (NAMC) by

International Research Institute for Manufacturing (IRIM)
and ESG recognition by Det Norske Veritas (DNV),
Netherlands. Collectively, these accolades reinforce your
Company's commitment to delivering superior-quality
products while advancing safe, sustainable, and
future-ready manufacturing practices. To counter elevated
levels of input prices and support long-term profitability,
your Company has implemented several strategic
cost management initiatives in areas such as supply
chain optimisation, smart procurement and productivity
improvement through automation, leveraging new-age
technologies such as Industry 4.0, AI/ML, advanced visual
analytics and smart utilities.

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

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

Your Company is well-poised to strengthen its position as
one of the fastest growing food companies and the 'most
trusted provider of food products' in the Indian market.
Your Company remains confident of rapidly scaling up
the Branded Packaged Foods Businesses leveraging
its institutional strengths and strong growth platforms
nurtured over the years in chosen categories which offer
immense headroom for growth, address opportunities in
value-added adjacencies by leveraging mother brands
and nurture new vectors of growth where beachheads
have been created.

Personal Care Products

The operating environment in the Personal Care industry
was marked by heightened competitive intensity and
continued volatility in input costs. Demand trends
witnessed gradual improvement, while premiumisation,
science-backed claims & ingredient-led, benefit-driven
transparency in propositions, influenced consideration
and brand choices.

Your Company's Personal Care Products Business
delivered a resilient performance, while continuing to
strengthen its core strategic levers of building brands with
purpose, driving first-in-category innovation, investing
in categories of the future, and accelerating presence
in emerging channels. Strategic partnerships with key
accounts, along with channel-specific assortment,
targeted launches and agile execution, supported growth
momentum. The premium portfolio remained a key growth
driver, reinforcing the focus on enhancing brand equity
and delivering superior consumer experiences through
innovative and differentiated offerings.

In the Personal Wash segment, 'Fiama' sustained its
strong growth momentum, in both gel bathing bars and
shower gels. The recently launched 'Fiama Moisturising
Bars with Japanese Hokkaido Milk' scaled up rapidly,
supported by differentiated sensorial positioning and
clinically proven skin-barrier benefits. The brand
augmented its portfolio with the launch of body scrubs

and leveraged digital-first creator partnerships to drive
trial and adoption. With a focus on premiumisation and
innovation, Fiama is well-positioned to accelerate its
growth trajectory.

The 'Vivel' portfolio recorded acceleration in growth in
the soaps category, particularly in the second half of
the year. The brand continued to reinforce its core aloe
vera proposition and expanded into adjacent format,
in line with evolving consumer preferences, with the
launch of natural ingredient based Handwash liquids.
The brand also strengthened its presence in Modern Trade
and e-Commerce through the introduction of exclusive
soap and body wash offerings, enhancing visibility
and relevance across premium retail formats and
NewGen channels.

'Savlon' delivered strong performance during the year,
driven by sustained momentum across handwash and
soaps category along with value-added offerings including
disinfectant liquid, sprays and wipes. Built on its strong
equity in germ protection, the brand has continued to
evolve towards a broader proposition of 'caring protection',
aimed at expanding usage occasions and enabling
sustained growth. The brand further enhanced consumer
awareness and hygiene education through podcast-based
content in partnership with leading medical professionals,
while also expanding into specialised infection-prevention
products for the institutional segment.

During the year, 'Engage' continued to strengthen its
position in a dynamic and evolving fragrance category.
In recent years, the brand has pivoted its portfolio towards
high growth formats and premium consumer segments,
with innovation and superior fragrance experiences
at the core. The brand gained strong momentum in
premium offerings, supported by the launch of 'Engage
Brazilian Maracuja EDPs' and accelerated growth across
e-Commerce and Quick Commerce platforms. Assorted
perfume packs were scaled up to address diverse
consumer moods and occasions. During the year,
the brand also entered the growing roll-on segment

with differentiated anti-perspirant offerings featuring
Fresh-Encap technology and strengthened its
engagement with younger consumers through high-impact
digital campaigns and influencer advocacy. Leveraging
robust R&D capabilities and in-house manufacturing,
the Business continues to deliver high-quality fragrances
that resonate with discerning consumers.

In the Home Care segment, the 'Nimyle' range of products
continued to build a differentiated position in the floor
cleaner category anchored in its promise of 100% natural
action with no chemical residue, offering germ protection
that is safe for kids and pets. During the year, the brand
sustained healthy growth, with its strong natural credentials
enhancing its brand equity, reinforced through its impactful
proposition 'Gaadha Bhi, Asardar Bhi' - highlighting
its high consistency and efficacy. The brand has been
certified as GreenPro - an internationally recognised
eco-label and endorsed by the World Neem Organisation.
Anchored in its core values and a clear brand proposition,
Nimyle remains committed to deepen consumer connect
and expand availability across touchpoints.

Your    Company's    state-of-the-art, digitally enabled

manufacturing facility at Neemgarh (West Bengal)
manufactures world-class personal care products and
supports advanced neem-based research through an
on-site neem orchard that houses more than 50 neem
ecotypes sourced from across India. As the first dedicated
personal care plant in a key growth market, the Neemgarh
facility enhances supply chain agility, optimises costs
and significantly reduces lead times, strengthening
your Company's    presence across eastern and

north-eastern markets.

Your Company continues to strengthen its commitment
to sustainability through large-scale adoption of
post-consumer recycled (PCR) plastics. These initiatives
were recognised with two CII Sustainable Plastic
Packaging Awards 2025 for recycled content, integration
and recyclable packaging innovation.

Your Company continued to earn recognition across
leading global and regional advertising platforms, reflecting

the effectiveness of its purpose-led communication,
digital-first storytelling and health education initiatives
strengthening brand equity and consumer trust.
The Savlon 'Swasth India Mission - Handwash Legends'
campaign secured multiple accolades at The One Show,
D&AD, Clio Awards, AdFest and Spikes Asia. Additionally,
the Savlon 'Jab Tak Aap Haath Nahi Dhote' campaign
received multiple awards at the Kyoorius Creative Awards
for excellence in film across TV, cinema and digital
platforms. Nimyle was awarded Gold at the afaqs! Awards
for Best Influencer Campaign.

The Business, with its purpose-led brands serving
discerning consumers in a dynamically evolving
environment, is well-poised to capitalise on future
growth opportunities underpinned by its customer-centric
innovative pipeline, impactful communications, institutional
strength in R&D & formulations, state-of-the-art
manufacturing capability, packaging know-how and
an expanding omni-channel distribution footprint.

Education and Stationery Products

The Business delivered a resilient performance during
the year in the backdrop of subdued realisation amidst
deflationary conditions due to low-priced paper imports and
opportunistic play by local/regional players. Performance
in the second half of the year improved significantly driven
by focused interventions and calibrated pricing actions,
with the flagship brand 'Classmate' consolidating its
market leadership position in the Notebooks segment.

The Business continued to draw on your Company's
institutional strengths, including paper manufacturing
expertise, brand-building capabilities and omni-channel
distribution infrastructure. Supported by the capabilities
of your Company's LSTC, the Business developed
differentiated, superior-quality products, driving
premiumisation in the core notebooks category.

In keeping with its proposition of 'Enjoy Learning', the
Classmate brand continues to provide differentiated
offerings through technology via eduGAMES Infinity,
that provides students the opportunity to play and

learn new skills. Further, drawing inspiration from the
much-loved puzzles featured on the last page of Classmate
notebooks, the brand introduced 'Design Discoveries' - a
differentiated design-led engagement initiative aimed
at enhancing consumer interaction with the brand.
By blending creativity with engagement, Classmate aims to
make learning more enjoyable while supporting cognitive
development. The new range has elicited encouraging
response from the student community.

The Business also launched a 360-degree campaign,
‘Every Student Deserves a Classmate’ across target
markets, sharply reinforcing the brand's position as a
reliable, high-quality, sustainable companion in a student's
academic journey, focusing on empowering learning and
creativity.

In line with the premiumisation strategy, the Business
has been driving growth of differentiated and premium
products. The 'Classmate Pulse' range of premium
notebooks witnessed rapid growth, driven by product
innovation and execution excellence across channels.
The Paperkraft portfolio, a premium stationery offering for
professional and personal needs, was further strengthened
with the launch of a range of notebooks tailored for
Quick Commerce channel.

In the Writing Instruments portfolio, the Classmate Pens
range was augmented through differentiated design
extensions such as Octane Shine & Warrior Series.
The Mathematical Instruments portfolio was revamped
through refreshed designs and introduction of premium
range of geometry boxes, 'Explorer' and 'Spectra',
enabling clearer portfolio segmentation.

The multi-channel capability of your Company's strong
distribution network was leveraged to enhance availability
and drive sales. The Business sustained its leadership
position on e-Commerce platforms through consistent
availability of a wide assortment of products, backed by
focused interventions to enhance consumer traction.

Equipped with state-of-the-art technology and a quality
lab, the dedicated manufacturing facility at Vijayawada
enables the Business to develop differentiated notebook
formats, drive cost efficiencies and enhance capabilities
to address opportunities in overseas markets.

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

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

Incense Sticks (Agarbattis) and Safety Matches

The Incense Sticks (Agarbattis) category sustained
its robust growth momentum during the year, with
your Company's flagship brand, 'Mangaldeep', further
strengthening its market standing across formats including
agarbatti, dhoop and sambrani. Anchored in deep
consumer insights, Mangaldeep offers a differentiated
product experience that remains culturally authentic,
while also resonating with contemporary consumers.
The brand's spiritual connect continues to be reinforced
through focused marketing initiatives and sustained
activation of the brand campaign “Dil Se Karo Baat,
Bhagwan ke Saath”, which has struck a powerful chord
with consumers across the country.

During the year, the Business delivered strong
volume-led revenue growth. Inflationary pressures in input
prices were mitigated through judicious mix enhancement
and strategic cost optimisation, thereby sustaining
profitability.

The Business continues to scale up its core portfolio and
strengthen new launches to drive growth. During the
year, Mangaldeep Nature was launched in two variants—
Green Forest and Flower Valley-bringing nature-inspired
fragrances to consumers. Further, the Business continued
to augment its agarbatti portfolio with modern fragrances
through sub-brands such as 'Scent', in line with evolving
consumer preferences for contemporary and fine-fragrance
inspired offerings.

The Mangaldeep range of dhoop was augmented
with the launch of two innovative variants in Premium
Wet Dhoop— 'Kesar Kumkum' and 'Black Musk'.
Mangaldeep reinforced its positioning as an enabler
of devotion by bringing alive the Ayodhya Deepotsav
experience to lakhs of devotees across India through an
Augmented Reality (AR) powered microsite; with over
26 lakh diyas lit on a single day, the initiative received
recognition as a Guinness World Record Event.

In line with its premiumisation strategy, the Business
strengthened its presence in emerging formats such as
dry dhoop sticks, dry dhoop cones and sambrani cups.
These formats combine convenience and performance
with the authenticity of rituals, while catering to evolving
consumer aspirations.

In a pioneering step towards inclusive innovation,
Mangaldeep continues to collaborate with over
200 visually impaired fragrance evaluators under the
Sixth Sense initiative. This unique programme enables
co-creation of fragrances, helping the brand deliver
long-lasting and rich sensorial offerings while fostering
inclusive growth.

Catering to the emerging wellness segment, the Business
launched a premium aromatherapy range under the brand

'Pranah', comprising scented candles, incense sticks and
cones. The range harmonises natural inspiration with
science-backed wellness propositions. These launches
elicited encouraging response from discerning consumers.

Over the years, the Business has implemented several
measures to enhance the competitiveness of the
agarbatti value chain in India. These include import
substitution, backward integration, and the manufacture
of raw battis using indigenous inputs. The Business
has led the development of in-house manufacturing
capabilities for raw battis, including coloured batti,
bambooless incense and premium formats, while working
closely with manufacturers and nodal agencies of key
state governments for sourcing Indian bamboo sticks.

These initiatives align with national priorities on
employment generation and inclusive growth, supporting
income enhancement across the agarbatti and raw batti
ecosystem, and creating structural cost and supply
advantages for the Business.

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

Your Company remains confident of scaling up its
Agarbattis and Safety Matches portfolio and enhancing
its market standing in the segment.

TRADE MARKETING & DISTRIBUTION

Your Company's Trade Marketing & Distribution (TM&D)
vertical continues to strengthen its smart omni-channel
go-to-market capabilities to ensure efficient market
servicing and product availability. Through sharper
channel strategies and agile execution, TM&D is
proactively addressing emerging trends, including the
accelerated expansion of NewGen Channels (viz. Modern
Trade, e-Commerce & Quick Commerce) and the growing
demand for premium products.

During the year, significant changes in the GST regime
were orchestrated seamlessly through coordinated supply
chain management, ensuring continuity of operations and
uninterrupted market servicing across markets.

India's FMCG distribution landscape is characterised
by diverse consumer cohorts, multiple and fast-evolving
channels, varied socio-economic conditions and a
vast geographic footprint. Against this structurally
complex backdrop, TM&D continues to effectively deploy
differentiated channel and regional playbooks, leveraging
deep consumer and trade insights to drive superior
execution and outcomes in product availability, visibility
and freshness.

Your Company's omni-channel distribution network
enables availability across nearly seven million retail
outlets, over 40% of which are serviced directly. Direct
servicing has been further strengthened, expanding
reach across new markets and outlets. Overall market
coverage has increased to appx. 2.1x of pre-pandemic
levels. TM&D's wide and deep distribution network,
anchored by cutting-edge digital capabilities, provides the
FMCG Businesses with significant competitive strength.

In this context, the rapid growth of Modern Trade,
e-Commerce and Quick Commerce, coupled with
the emergence of new players, continues to reshape
routes-to-market. TM&D is strengthening omni-channel
capabilities and customer partnerships, supported by agile
supply chain and shopper marketing, to enhance execution
effectiveness and improve operating efficiencies.

The surge in smartphone-led internet usage, widespread
adoption of digital payments, wider assortments and
faster fulfilment continue to increase the salience of
e-Commerce and Quick Commerce channels. Your
Company's collaborations with leading platforms across
category development, integrated supply chains, consumer
offerings and customer acquisition are enabling strong
scale-up of sales in these channels, supported by exclusive
assortments, channel-specific plans and 'Digital-First'
brands. Joint Business Plans, executed in close coordination

with these platforms and complemented by agile supply
chain initiatives, are strengthening your Company's market
standing. Digitally enabled sales have grown rapidly in
recent years and, together with Modern Trade, now account
for 34%⁹ of your Company's FMCG portfolio.

Within the omni-channel architecture, the General Trade
channel continues to deliver resilient performance through
a focused market approach and a differentiated portfolio.
In response to heightened competition and accelerating
channel shifts in urban markets, TM&D is strengthening
data-led execution and technology enablement to
enhance retail engagement, last-mile productivity and
premiumisation in high-potential outlets. The digitally
powered eB2B platform of your Company, UNNATI,
continues to be scaled up, covering more than eight lakh
outlets. UNNATI enables sharper & direct engagement
with retailers, superior analytics and personalised
hyperlocal recommendations based on purchase insights,
thereby deepening brand engagement and strengthening
the trade ecosystem.

In rural markets, TM&D continues to implement
market-specific interventions to enhance direct coverage,
guided by socio-economic indicators and market potential.
This is supported through a hub-and-spoke distribution
model and extensive rural stockist network to deepen
reach across priority markets. Leveraging synergies with
the deep rural connect of your Company's Agri Business,
TM&D continues to undertake extensive consumer
activations in high-potential rural areas, supported by
market development initiatives and enhancements to
the digital ecosystem for the stockist channel, thereby
strengthening availability of your Company's product
range in rural markets.

The Food Service and Institutional channels continue
to witness growth, leveraging existing partnerships and
your Company's wide product range. Strategic partnerships
are unlocking new routes-to-market across specialised
segments, including on-the-go, direct marketing and Quick
Service Restaurants (QSRs).

Underpinning these channel strategies, TM&D continues to
leverage emerging digital technologies such as Generative
AI to further strengthen market servicing, automate
operations and enhance execution effectiveness.

Industry-leading digital solutions deployed across
the entire Order-to-Cash cycle in both traditional and
NewGen channels, have enabled business growth,
facilitating seamless transactions and faster working
capital turnaround for trade partners. To address the
digital payments and financing needs of customers and
retailers, your Company forged strategic collaborations
with banks and FinTech partners. Integrated with the
UNNATI platform, these solutions are strengthening digital
adoption across the trade ecosystem and supporting
sustainable growth.

The scale and diversity of your Company's go-to-market
footprint remain pivotal in enhancing market presence,
generating valuable consumer and trade insights and
enabling effective execution of product launches across
geographies. To leverage new routes-to-market and
meet the assortment needs of NewGen channels, your
Company executed nearly 100 new product launches
across target markets, while extending availability and
visibility of existing products.

TM&D is driving structural improvements in operational
effectiveness and productivity. Your Company continues
to leverage an integrated planning and supply chain tool,
powered by advanced algorithms, to enhance forecast
accuracy, improve inventory productivity and strengthen
supply chain agility. These initiatives support improved
servicing and availability of the premium portfolio across
priority urban and rural markets.

Alongside capability-building and in line with your
Company's commitment to the 'Triple Bottom Line', TM&D
continues to advance adoption of renewable energy
and expand Green Logistics initiatives for mid-mile and
last-mile deliveries in key cities. Collaborations with
Original Equipment Manufacturers and fleet aggregators
are supporting increased deployment of Electric Vehicles
(EVs) in TM&D operations, with EV trips rising by nearly
40% over the previous year.

TM&D's distribution highway is a source of sustainable
competitive advantage for your Company's FMCG
Businesses and is well-positioned to support rapid
scale-up in the ensuing years. This strength is enabled by
strong systems and processes, an agile and responsive
supply chain, a cutting-edge digital ecosystem and
synergistic partnerships across channels.

FRESH FOOD

The Indian food services industry continues to present
attractive long-term growth potential, underpinned by
favourable demographics, increasing urbanisation and
rising consumer purchasing power. The rapid expansion
of online food delivery is enlarging the addressable
market by enhancing consumer access and accelerating
the transition towards organised, branded food offerings.

Envisaged under the ITC Next strategy as a new vector
of growth, your Company incubated the Fresh Food
Business to participate in the fast-growing online food
services segment and to widen access to premium
food experiences for Indian consumers. The Business
leverages your Company's institutional strengths in Food
Science & Manufacturing, its trusted FMCG food brands
and deep consumer insights, and culinary expertise built
through ITC Hotels Limited, to create differentiated and
contemporary food propositions.

The Business is anchored on a portfolio of distinct
brands—'ITC Master Chef Creations', 'ITC Aashirvaad
Soul Creations', 'ITC Sunfeast Baked Creations', and
'Sansho by ITC Master Chef—which are designed to
address multiple cuisines, price points and consumption
occasions, while reinforcing your Company's proposition
of quality, authenticity and innovation.

-    'ITC Master Chef Creations' offers chef-crafted,
gourmet North Indian cuisine, leveraging
craftsmanship and consistent quality to build a
scalable premium proposition.

-    'ITC Aashirvaad Soul Creations' is a pure vegetarian
brand focused on wholesome, home-style Indian
meals inspired by regional recipes, addressing
everyday consumption needs with trust and
authenticity.

-    ' ITC Sunfeast Baked Creations' offers premium baked
products, strengthening your Company's presence
in indulgence-led occasions through innovation and
superior product experience.

-    'Sansho by ITC Master Chef', launched during the
year, is a premium Pan-Asian brand that extends the
portfolio into contemporary cuisine formats.

The brands are currently present across select metropolitan
markets and are offered to consumers through leading
online food delivery platforms. The brands received top
ratings across platforms with excellent feedback, reflecting
growing consumer franchise.

The Business has developed a differentiated capability
stack across product development, quality assurance,
customer experience, and a tech-enabled operating system,
enabling consistent delivery of premium food propositions.
The Business continues to focus on strengthening these
capabilities, deepening technology integration, and refining
execution to sustain the growth momentum.

During the year, the Business strengthened its presence
across the cuisine segments and markets in which it
operates, supported by improving consumer traction. With
sustained focus on consistent food quality and service
standards, the Business recorded rapid growth and
also expanded its operating footprint to appx. 70 cloud
kitchens.

With a focused, consumer-led approach, the Business
introduced a range of differentiated, first-to-market
offerings during the year. This included festival and
occasion-led propositions curated for key festivals and
special occasions (including Diwali, Christmas/New Year,
Eid and Mother's Day) to sustain consumer engagement
and enhance brand relevance.

Going forward, the Business will prioritise menu
and format innovation, portfolio premiumisation and
strengthening proposition architecture, while maintaining
strong governance over quality, consistency and customer
experience.

Your Company intends to scale the Fresh Food Business
rapidly across select geographies in India. Supported
by a differentiated brand portfolio and your Company's
institutional strengths in Food Science & Manufacturing,
FMCG brand-building and culinary expertise, the Business
will focus on deepening consumer relevance, building
leadership positions in chosen cuisine formats and
strengthening the pathway to profitable growth through
disciplined execution.

Following an appreciable scale-up since incubation, the
Business is being reported under the “Others” segment
for the first time in the current year, along with ITC Grand
Central Hotel, Mumbai.

PAPERBOARDS, PAPER AND PACKAGINGPaperboards & Specialty Papers

During the year, the Indian Paper and Paperboard industry
continued to operate in a challenging environment,
characterised by low-priced supplies of paperboards
and paper from China and Indonesia in global markets,
including India, as well as weak demand conditions,
resulting in subdued realisations. On the inputs front,
wood costs remained elevated during the year, reflecting
tight supply conditions. The cumulative impact of subdued
realisations and sharp surge in wood costs exerted
pressure on margins. The Business partially mitigated
these challenges by leveraging the structural strengths
of its integrated model, accelerating value-led customer
engagement, deepening digital-led productivity and quality
interventions, and scaling up the portfolio of sustainable
plastic-substitution solutions (PlaSub).

Influx of low-priced imports into the country, particularly
from China, Indonesia and Chile, has been a source of
threat to the domestic Paper and Paperboard industry in
recent years. The imposition of Minimum Import Price (MIP)
on Virgin Multi-layer Paperboard w.e.f. 22nd August 2025,
provided interim relief to the industry, with import volumes
progressively declining thereafter. However, suitable
safeguard measures are needed at a policy level to
enable the Indian industry to compete on a level playing

field. Representations are being made by the Indian
industry with the policy makers in this regard, which are
under active consideration.

Wood procurement prices also began to moderate aided
by improved availability on the back of sustained plantation
and sourcing interventions. With the moderation in wood
prices and green shoots of improvement in realisations
following the imposition of MIP, the Business witnessed a
gradual recovery in operating performance in the second
half of the year.

The Business continues to focus on strengthening
long-term fibre security through structural programmes
across plantations, catchment expansion and
productivity enhancement, which remain key enablers
of competitiveness and resilience. To address long-term
fibre security, the Business is pursuing a multi-pronged
strategy spanning catchment expansion and productivity
enhancement, alongside structured engagement with
policy stakeholders to enable collaborative plantation
models.

Wood and wood fibre-based industries in India have been
representing to the Government over the years to allow
industries to raise tree plantation on available degraded
forest land. Policy in this regard would enable domestic
industries to become self-sufficient and cost competitive
vis-a-vis wood and wood fibre-based industries in
South-East Asian countries where such provision of
industry involvement in raising plantations over degraded
forest land exists. This would also facilitate saving
precious foreign exchange through import substitution.
Further, as per the Report on Paper Industry
by the Indian Paper Manufacturers Association
(IPMA), it is estimated that harnessing an additional
2.5 million hectares of degraded land for the agroforestry
programme, could generate employment opportunities
for appx. one million persons, while supplementing
farmer incomes, enhancing green cover and ensuring
adequate availability of raw materials for domestic
wood-based industries.

The recent amendments to the Forest (Conservation) Act
Guidelines that enables private sector participation along
with state governments to raise plantations on degraded
forest land, augurs well for long-term domestic fibre
availability in the country. Your Company is engaging with
the state governments to progress this initiative.

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

During the year, the Specialty Papers segment witnessed
robust growth driven by capacity augmentation in
Decor paper completed in FY 2024-25. Market standing
in the segment continues to be driven by product mix
enrichment and diversification of the customer base.

It may be recalled that your Company entered into a
Business Transfer Agreement on 31st March, 2025 to
acquire the Century Pulp and Paper Undertaking ('CPP')
of Aditya Birla Real Estate Limited ('ABREL') at Lalkuan
(Nainital, Uttarakhand). Commissioned in 1984, CPP is a
well-established player in the Indian Paper industry with
an installed capacity of 4.8 lakh tonnes per annum.
CPP is a one-of-a-kind asset with a strong strategic fit
with your Company's Paperboards & Specialty Papers
Business. The acquisition will add meaningful scale and
economies to existing operations, provide a locational
advantage for efficient customer servicing and proximity
to key raw material sources, enhance resilience
through multi-site operations and portfolio diversification
across industry cycles. The acquisition aligns with your
Company's strategy of driving the next horizon of growth
in the Paperboards and Specialty Papers Business by
expanding capacity at a new location, considering that
the existing facilities are near saturation. The Competition
Commission of India has approved the proposed

acquisition on 16th December, 2025. Further, the
Ministry of Environment, Forest and Climate Change
has accorded approval, on 18th March, 2026, for the
transfer of leased forest land in favour of your Company.
With the receipt of key statutory approvals, the acquisition
of the CPP undertaking is expected to be completed in the
near term.

It is pertinent to note that India's per capita consumption
of paper at appx. 16 kgs per annum is significantly
lower when compared to the global average of 57 kgs,
reflecting immense headroom for long-term growth.
Further, the sustainable paperboards and packaging
space continues to offer a significant scale-up opportunity,
driven by increasing demand for bio-based alternatives,
increasing emphasis on recyclability & com postability
and evolving customer & regulatory requirements. These
trends are translating into sustained demand across
sectors, particularly in the food service, food delivery,
beauty & personal care, pharmaceuticals and consumer
goods segment.

The Business has adopted a multi-tiered strategy to
capitalise on this opportunity and build solutions that
will replace single use plastics and meet emergent
consumer needs. Within the sustainable products
portfolio - 'Platform 1’ comprises a range of recyclable,
compostable and barrier coated boards and includes the
'Filo' series - 'FiloBev' (for beverage cups), 'FiloServe'
(for QSRs, bakeries, food retail), 'FiloPack' & 'FiloTub'
(for food packaging applications), 'FiloBowl' (for select meal
and delivery formats) and 'FiloBev Mini' (an economic cup
variant for short servings). The Filo series solutions have
also been certified as compostable by the Central Institute
of Petrochemicals Engineering & Technology (CIPET).
During the year, the 'Filo' portfolio recorded double-digit
growth in the domestic market, supported by strong
consumer traction of sustainable packaging solutions.

'Platform 2’ comprises a range of first-to-market Fusion
boards that are fully recyclable and replace plastic 'foam'
board. End-use applications include indoor display

solutions involving replacement of plastic signboards
and shelves. This platform continues to witness growing
market traction, driven by increasing demand for recyclable
alternatives for display and signage applications.

‘Platform 3’ offers futuristic packaging solutions
comprising premium Moulded Fibre Products (MFP)
made from renewable natural fibres such as wood,
bamboo, bagasse, wastepaper, etc. Your Company's
wholly-owned subsidiary, ITC Fibre Innovations Limited
(IFIL), forayed into the fast-growing MFP space with the
commissioning of a state-of-the-art MFP manufacturing
facility in Badiyakhedi, Madhya Pradesh in March 2024.
During the year, IFIL carried out extensive prototyping
and sampling to support the development of Next-Gen
products. The Business faced challenges largely due
to US tariff related disruptions. Plans are on the anvil to
accelerate growth in this segment through focused market
development anchored on a differentiated MFP portfolio
leveraging innovation and agile operations.

A Packaging Board Centre of Excellence was
institutionalised last year to deepen customer
engagement, improve product performance and focus on
new-gen product development. During the year, focused
efforts were undertaken towards building new platforms,
strengthening structural capabilities, and seeding select
high-entry-barrier niches to support sustainable growth.

The Business continues to procure wood, a key raw
material, from sustainable sources. Research on
clonal development has enabled the introduction of
high-yielding and disease-resistant clones that are
adaptable to a wide variety of agro-climatic conditions.
This has not only aided in increasing farmer incomes
but also enabled greater consistency in farmer earnings.
In this context, your Company's LSTC remains actively
engaged in developing second generation clones with
enhanced yield potential and improved pest & disease
resistant attributes. The Business continues to focus on
scaling up wood sourcing from core catchment areas
and has increased plantations in these regions during

the year. In addition, initiatives such as bund plantations
and the expansion of plantations in new catchment
areas, including Odisha and Chhattisgarh, have enabled
enhanced wood procurement from such new areas, with
further potential for increasing cost-effective access
to fibre in the future. During the year, the Business
achieved its highest-ever plantation coverage of around
66,000 hectares, reinforcing long-term fibre security and
supporting sustainable livelihoods across its farm-forestry
ecosystem.

Your Company has the distinction of being the first in India
to have obtained the Forest Stewardship Council-Forest
Management (FSC®-FM) (FSC®-C102390) certification,
which confirms compliance with the highest international
benchmarks of plantation management across the
dimensions of environmental responsibility, social benefit,
and economic viability. Till date, your Company has
received FSC®-FM certification for over 1.65 lakh acres
of plantations involving over 26,000 farmers. During
the year, nearly 3.17 lakh tonnes of FSC®-certified
wood was procured from these certified plantations.
Your Company sustained its position as the leading
supplier of FSC^®-certified paper and paperboards
(FSC®-C064218) in India.

Your Company's Paperboards & Specialty Papers
Business continues to be a pioneer in the adoption and
deployment of digital and Industry 4.0 technologies.
An AI-led analytics platform supports faster,
data-driven decision-making across key processes in the
wood-to-paper value chain, strengthening operational
reliability, quality consistency and resource efficiency.
Over the last few years, the Business has been
executing a structured and outcome-oriented digital
transformation programme spanning manufacturing,
supply chain and enabling functions. As the Business
has evolved its digital operating model, transitioning from
project-based execution to a product-led approach, the
in-house Digital App Suite has scaled to over
80 applications, strengthening advanced analytics,
simulation-led decision support and root-cause

diagnostics across the value chain. Digital interventions
today span Industrial IoT-enabled smart operations,
integrated enterprise data platforms, AI/ML-based
process optimisation & decarbonisation of operations,
image & video analytics for automated quality inspection,
computer-vision driven workforce safety solutions and
digital traceability systems aligned with evolving regulatory
requirements.

The Business' leadership in digital excellence continues
to be recognised globally. During the year, the Business
was conferred with the Aegis Graham Bell Award in the
'Innovation in Manufacturing' category.

The Business has strengthened its customer-centric supply
chain capabilities through a dedicated vertical focused on
service excellence and end-to-end optimisation. These
initiatives have improved service performance (including
On-Time-In-Full delivery) and reduced order fulfilment
timelines. During the year, advanced planning capabilities
were also enhanced through the implementation of
a demand planning module, enabling better forecast
accuracy and more agile, data-driven decision-making.

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

The Business continues to advance circularity
and resource efficiency across its operations. All
manufacturing units recycle nearly 100% of solid waste
generated during operations by converting the same into
lime, fly ash bricks, cement, grey boards, egg trays, etc.
In addition, the Business recycled appx. 1.11 lakh tonnes
of wastepaper during the year, reinforcing its positive solid
waste recycling footprint.

In line with the objective of enhancing the share of
renewable energy in its operations, the Business has
implemented several initiatives including investments in
a green boiler, high efficiency circulating fluidised bed

(CFBC) boiler, solar & wind energy and increased usage
of biofuels. The commissioning of the state-of-the-art
High Pressure Recovery Boiler at the Bhadrachalam mill
is progressively enhancing renewable energy share and
reducing the carbon footprint of the unit by significantly
lowering coal consumption. These investments are a
testament to your Company's commitment towards
embedding sustainability in its operations and supporting
the 'Make in India' initiative. With these initiatives,
renewable sources presently account for more than
50% of total energy consumption across the four
manufacturing units of the Business.

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

In recognition of energy efficient initiatives, both
Bhadrachalam and Kovai units were conferred with the
'Excellent Energy Efficient Unit' Award at the 26th National
Awards for Excellence in Energy Management, 2025,
instituted by CII. The Bhadrachalam unit has additionally
been recognised as a 'Noteworthy Water Efficient Unit'
under the 'Within-the-Fence' category at the CII National
Awards for Excellence in Water Management, 2025.
The Kovai unit was honoured with the Best Kaizen for
Sustainability Award at the 11th CII National Kaizen Circle
Competition, 2025.

The Paperboards industry remains closely aligned
with national priorities of rural employment generation

and sustainable resource utilisation, while meeting the
evolving paper and packaging needs of Indian consumers.
The industry currently employs over two million persons
directly and indirectly across the value chain, supported
by substantial investments in recent years that have
strengthened domestic value chains.

With structural drivers of demand in the Indian economy
expected to remain strong over the medium and
long-term, the prospects for the paperboards industry
is poised for robust growth in the years ahead.
Key growth drivers include favourable demographic trends,
rapid urbanisation, a growing middle class, increasing
substitution of plastic with sustainable alternatives, and
supportive macroeconomic trends, reinforced by recently
concluded FTAs and India's emergence as a global
manufacturing hub.

End-user segments such as Pharmaceuticals, Apparel,
QSRs / Food Service, FMCG, consumer durables and
e-Commerce are anticipated to register strong growth.
Demand for Writing & Printing paper is also anticipated to
remain firm on the back of requirements from the publishing
and notebooks industries driven by the Government's
thrust on primary and secondary education.

The integrated nature of your Company's business
model is a key source of competitive advantage
for the Paperboards & Specialty Papers Business.
This advantage is underpinned by secure access to
high-quality, cost-competitive and renewable fibre;
continuous development of high-yielding, disease-resistant
clonal saplings; efficient and resilient manufacturing
enabled by in-house pulp capability, imported pulp
substitution and world-class facilities; and sustained
improvement through product and process innovation,
energy efficiency and digital / Industry 4.0 adoption. These
strengths are further reinforced by robust forward linkages
with the Education and Stationery Products Business and
the Packaging and Printing Business. Your Company is
confident of further consolidating its leadership position
in the Indian Paper and Paperboards industry leveraging
recent investments in innovation platforms anchored on

the development of sustainable products and cutting-edge
digital technologies to set new benchmarks in customer
satisfaction, operational excellence, and sustainability.

Packaging and Printing

Your Company's Packaging and Printing Business is a
leading provider of differentiated and innovative packaging
solutions across carton and flexible packaging platforms,
widely acknowledged for its operational excellence, quality
and reliability. Leveraging world-class infrastructure and
integrated end-to-end capabilities including distributed
manufacturing footprint, in-house cylinder making and
blown film lines, the Business delivers packaging that
meets stringent functional requirements while elevating
the branded product experience.

The Business serves leading customers across Food &
Beverage, Personal Care, Home Care, Footwear,
Consumer Electronics & Electricals, QSRs, Pharma,
Liquor, Tobacco and other end-use segments. Consistent
performance on quality, reliability and competitiveness
has strengthened its position as a preferred packaging
partner to reputed FMCG companies. The Business also
provides strategic support to your Company's FMCG
Businesses and Cigarettes Business by facilitating faster
turnaround for new launches, innovative & sustainable
packaging solutions, design changes and ensuring
security of supplies.

During the year, the operating environment was marked
by heightened uncertainty and volatility along with
increased competitive intensity. Against this backdrop,
the Business demonstrated resilience and continued to
pursue new business development opportunities across
segments while strengthening capabilities aligned to
customer priorities.

Innovation remains a key strategic pillar, anchored in
deep understanding of end-user requirements and the
capabilities of your Company's LSTC. Under the flagship
'InnovPack' range of sustainable packaging solutions,
the Business has established a robust innovative
pipeline of solutions developed through molecular
science research aligned with rising sustainability
expectations and the transition to plastic alternatives.
This includes offerings such as compostable barrier
solutions (Bioseal), recyclable coating systems to
enhance barrier performance (Oxyblock) and coatings
designed to support hygiene-sensitive applications
(Germ-free coating). Multiple initiatives aligned to the
principles of “Reducing, Reusing and Recycling” of plastic
substrates are progressing across stages of customer
validation and commercialisation.

The Business continues to strengthen its competitiveness
through systematic processes to deliver excellence in
execution and quality, productivity and waste reduction,
supported by capability building and digital enablement.
In line with its long-term roadmap, the Business continues
to scale up Industry 4.0 adoption across its units.

The Business' performance and capabilities were
recognised through prestigious international and
national awards, including the WorldStar awards in pack
premiumisation and sustainability, as well as accolades
from leading industry bodies for excellence in packaging
and customer service. These include the IFCA Star
awards, the SIES SOP Star Awards, FIPSA Awards for
excellence in packaging. The Business was also awarded
the Customer Service Company of the Year 2025
by PrintWeek.

The Business maintains robust management systems for
quality, environment, occupational health and safety, and
social and ethical compliance, supported by recognised
third-party certifications and customer audits. Certain
units are also certified to global packaging standards
and sustainability frameworks, reinforcing the Business'
ability to serve hygiene-sensitive and export-oriented
applications as well as customers with enhanced
sustainability requirements. All four units of the Business
are certified as per the Integrated Management System,
consisting of ISO 9001:2015, ISO 14001:2015 and
ISO 45001:2018. Cartons Packaging lines at Tiruvottiyur

and Haridwar units received the 'Grade AA' and the
Nadiad unit received 'Grade A’ - Brand Reputation
Compliance Global Standards (BRCGS) certification for
global standards in packaging and packaging materials -
a key enabler for supplies to the packaged foods
industry. During the year, the Tiruvottiyur unit obtained
ISCC Plus certification, strengthening the Business'
ability to validate recyclable laminate structures and
advance sustainable packaging solutions. All key units
of the Business are Sedex-certified for social and ethical
compliance; the Business also holds an EcoVadis Bronze
certification, underscoring its commitment to sustainability
performance.

The outlook for the Indian packaging industry remains
positive, supported by rising disposable incomes,
urbanisation, favourable demographics and increasing
penetration of modern trade and e-Commerce. Further,
policy and regulatory initiatives aimed at strengthening
food safety and accelerating the growth of organised
retail are expected to drive demand for high-quality,
standardised packaging solutions aligned with evolving
regulatory and quality requirements.

Growing stakeholders' focus on decarbonisation, and
an increasing regulatory emphasis on plastic reduction
and circularity, are expected to accelerate the adoption
of sustainable packaging solutions, including recyclable,
mono-material and circular alternatives. With capabilities
across diverse technology platforms, a robust pipeline
of sustainable solutions and strong quality management
systems, the Packaging and Printing Business is well
positioned to deepen customer partnerships across key
segments, viz., Food & Beverage, Personal Care, Home
Care, QSRs, Footwear, Consumer Electronics, Pharma
and Tobacco, while continuing to support your Company's
FMCG Businesses. Going forward, the Business will
sharpen its strategic focus on innovation, customer-centric
solutions, sustainability, capability building and smart
manufacturing to reinforce its leadership in integrated
packaging solutions.

AGRI BUSINESS
Leaf Tobacco

The Business continued to leverage its deep customer
relationships, crop development expertise, superior
product quality, world-class processing facilities and
strong sustainability credentials to strengthen its position
as a reliable supply chain partner for global customers.
During the year, the Business consolidated its position as
the largest Indian exporter of unmanufactured tobacco and
increased its share of business with international buyers
of Indian tobacco through focused business development,
facilitating increased crop production backed by adoption
of Weather Resilient Tobacco Production Systems and
strengthening the competitiveness of Indian FCV and
Burley tobaccos, leveraging its sustainable tobacco
programme.

The Business sharpened its strategic focus across the
tobacco value chain on five priorities: Quality, Consistency,
Compliance, Climate risk mitigation and Sustainability.
Sustained investments continue to be made in your
Company's Green Leaf Threshing (GLT) plants towards
world-class quality, processing technology & capability
upgradation, aligned with evolving customer expectations
and regulatory requirements. Crop and region-specific
agronomic practices are being scaled up to address
emerging customer needs and enhance competitiveness.

The Business continues to set benchmarks in leaf threshing
operations by leveraging technology & digital capabilities to
enhance quality assurance, process consistency, compliance,
traceability and productivity. This includes selective
deployment of advanced analytics & automation solutions
across critical process stages, strengthening operational
resilience and customer responsiveness while supporting the
Business' strategic cost management agenda.

Digital tools such as AI/ML-powered real-time price
discovery systems continue to be leveraged for facilitating
efficient leaf tobacco buying across auction platforms.
In addition, digitalisation interventions are being scaled up
in areas spanning crop development, sourcing, process

optimisation and supply chain operations, which are
expected to enhance operating efficiencies, while driving
down cost in a structural manner.

Synergistic R&D initiatives with focus on varietal
development, climate smart farming techniques, farm level
digital interventions and usage of water efficient technologies
are being scaled up towards enhancing productivity &
product quality, reducing cultivation costs, strengthening
resilience & capacity building of the farm value chain to
increase crop security and enhance farmer incomes.

The Business continues to strengthen its sustainability
agenda by scaling up integrated energy management and
decarbonisation initiatives across farms, GLT operations
and the supply chain. Key focus areas include energy
efficiency, increased use of alternative fuels and energy
plantations to improve fuel self-sufficiency in the curing
process, along with a progressive shift towards renewable
electricity in line with your Company's low-carbon growth
philosophy. Further, integrated watershed management
programmes are being advanced to strengthen water
security during critical phases of the crop cycle.

In recognition of its commitment to the highest standards
of Sustainability, EHS and Quality, the Business
received several awards during the year, including the
“Best Practice in Digital Transformation 2025” from CII;
the “SEEM National Energy Management Award” with
Platinum rating for Excellence in Energy Conservation for
Chirala GLT; “Excellent Energy Efficient Unit” for Mysuru
GLT at the CII National Award for Excellence in Energy
Management, 2025; and Gold and Silver Awards for
Chirala GLT and Anaparthi GLT, respectively, at the CII
Andhra Pradesh Industrial Safety Excellence Awards
2025, as well as various awards from the Quality Circle
Forum of India and CII for operational excellence.

Oversupply in international markets coupled with lower
domestic demand due to the unprecedented increase in
tax on cigarettes are expected to weigh on the prospects of
the key stakeholders of Indian tobacco industry including
Indian farmers and leaf tobacco processors / exporters.

In this context, addressing key structural factors
is imperative to support sustained growth and
competitiveness of leaf tobacco exports from India. Over
time, punitive taxation on the legal cigarette industry has
accelerated illicit trade, adversely impacting demand
for Indian leaf tobacco. Lower export incentives and
high import duties / tariffs in certain markets also weigh
on export competitiveness. As stated in earlier years,
a balanced regulatory and taxation regime that takes
cognisance of India's unique tobacco consumption
pattern and economic realities, along with appropriate
policy support (including restoration of export incentives),
remains important to support the tobacco farmers and the
46 million livelihoods dependent on the sector. According
to an ASSOCHAM TARI Study¹⁰, the tobacco sector in
India contributes substantial socio-economic benefits in
terms of agricultural employment, farm incomes, revenue
generation and foreign exchange earnings. Your Company
continues to engage with policymakers on these matters.

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

Other Agri Commodities

Global agri-commodity trade witnessed significant
disruption during the year, driven by sweeping tariff
measures imposed by the United States, the ongoing
West Asia conflict—which continues to remain a key

monitorable—and climate-related supply uncertainties in
key producing regions. India was among the countries
most affected, with reciprocal tariffs escalating sharply,
adversely impacting India's competitiveness in several
agri-commodities. The supply chain disruptions, including
logistical challenges following the West Asia conflict
towards the end of the year, led to deferrals of call-offs by
certain customers. On the domestic front, the Government
imposed stock limits and export restrictions on key
agri-commodities to ensure food security.

Overall, the combination of global agri-trade disruptions
and domestic policy constraints created a challenging
environment for your Company's Agri Business during
the year. Amidst such conditions, your Company
leveraged its strong farm linkages, extensive sourcing
expertise (viz. enabling traceable, attribute-based and
identity-preserved sourcing of commodities), multi-modal
logistics capability, agile supply chain operations, deep
customer relationships, and focus on scaling up the
Value-Added Agri Products (VAAP) portfolio to deliver
a resilient performance during the year. Easing of
US tariffs following bilateral trade negotiations, coupled
with the progressive relaxation of restrictions supported by
adequate food stock buffers and moderating inflationary
pressures, augur well for the year ahead.

As reported in earlier years, your Company's Agri Business
has scaled significantly, with an annual throughput of
appx. four million tonnes spanning 22 states and over
20 agri value chains, anchored in an integrated ecosystem
that strengthens its resilience and competitiveness.
The Business' strategic intent remains aligned with
national priorities of climate resilient agriculture, enhancing
agricultural productivity, improving market linkages and
driving significant increase in farmers' incomes.

The Business remains focused on its strategy
to rapidly scale up its VAAP portfolio straddling
multiple agri value chains including Spices, Coffee,
Frozen Marine Products and Horticulture products,
amongst others. Leveraging institutional strengths such
as certified sourcing, advanced processing capabilities,
customer-centric execution and digital platforms, including
ITCMAARS, the portfolio further strengthened its
competitive position, while simultaneously building new
growth vectors in high-velocity channels. Committed
to sustainable farm management practices backed
by Rainforest Alliance and Global GAP accreditation,
your Company has successfully strengthened farmer
connections, improved traceability, and driven sustainable
agricultural practices.

- Your Company's Spices Business strengthened its
position as one of India's leading spice exporters,
while maintaining its standing as the top exporter of
organic spices.

Tariff-related uncertainty in the US was partially
mitigated by diversifying to other food-safe markets
such as the EU and UK. The Business also
strengthened its presence in the Emerging Market
segment, expanding trade in geographies such as
Indonesia, Thailand, and Sri Lanka. At the same time, it
significantly accelerated domestic market expansion,
leveraging e-Commerce, Quick Commerce, and
direct-to-consumer channels.

Organic spices remained a key growth driver,
with volumes more than doubling during the year,
supported by certified cultivation programmes and
deep backward integration. The Business continues to
scale up its Organic and Integrated Crop Management
(ICM) programmes, expanding organic cultivation
across multiple states to meet the growing demand
for certified organic products. The Business remains
committed to execution excellence and continues to
maintain its unblemished track record in complying
with stringent food safety standards. The proportion
of customised products in the portfolio has increased
considerably, underscoring your Company's
strategic focus on premium offerings. The Business
has also broadened its customer base across
markets, initiating product partnerships with leading

global players and demonstrating strong customer
acquisition capabilities alongside a commitment to
building lasting relationships.

-    Global coffee markets witnessed significant volatility
during the year, largely driven by the United States,
a major consuming market, imposing 50% tariff on
imports from Brazil, the world's largest producer.
While production in major origins like Brazil and
Vietnam remained stable, India's output declined
due to adverse monsoon conditions. Consequently,
Indian green coffee export prices surged impacting
export competitiveness and volumes.

Leveraging its strategic sourcing presence in major
coffee-growing regions of India and a sharper focus on
certified, sustainably sourced coffees, the Business
reinforced its position as one of the leading exporters.
It strengthened its footprint in key international
markets, particularly Europe and the Middle East, by
capitalising on long-standing customer relationships,
strong sustainability credentials, and agile execution.

-    The frozen marine products segment was amongst
the most severely impacted by the US tariff measures
during the year, placing the country at a considerable
disadvantage vis-a-vis competing origins such as
Ecuador and Vietnam.

Despite these challenges, your Company — one
of India's leading exporters of value-added frozen
marine products with strong capabilities in processing
individually quick-frozen (IQF), raw and cooked
products — delivered robust growth during the
year, diversifying its export footprint to offset the
disadvantage arising due to high US tariffs. The
Business strengthened its position in the 'Aquaculture
Stewardship Council' ASC-certified shrimp segment,
significantly expanding certified farm acreage and
aligning with evolving customer procurement priorities.

-    As stated earlier, a significant portion of fruits and
vegetables is wasted along the agri value chain owing
to seasonal factors, inherent perishability and lack

of economically viable cold-chain solutions. At the
same time, evolving consumer preferences towards
health foods and convenience are also leading to an
increasing need for reliable, year-round availability of
quality produce.

Your Company's Fresh Fruits & Vegetables
Business is uniquely positioned to address these
challenges through a responsible and traceable
supply chain, supported by ITCMAARS, extensive
farmer linkages and FPO-anchored sourcing clusters.
To augment year-round supply capabilities and secure
premium-grade produce during lean periods, the
Business is piloting investments in Controlled
Environment Agriculture (CEA) facilities, which
are expected to complement open-field sourcing
and enhance overall supply chain resilience.
This is expected to create significant value across the
agri value chain for such produce.

- Your Company continues to enhance its capabilities
in the Medicinal and Aromatic Plant Extracts
(MAPE) business through exports of plant extracts,
backward integration and cultivation programmes.
Key ayurvedic ingredients such as ashwagandha and
turmeric were scaled up through farmer engagement,
improving traceability and quality assurance. With
a view to moving up the value chain from generic
to proprietary extracts, focused initiatives are being
piloted by LSTC, including tie-ups for technical
collaboration with reputed institutions, while medicinal
crops research farm in Madhya Pradesh continues to
support varietal development, seed production, and
standardised agronomic practices.

Your Company continued to scale its presence in the
maize value chain during the year, leveraging its sourcing
infrastructure and FPO network to significantly expand its
customer base across ethanol and starch manufacturers.
The Business has established a robust supply chain for
high-yielding, high-quality starch-grade maize varieties
catering effectively to the requirements of these end-use
segments. Your Company continues to drive agricultural

transformation at scale through ITCMAARS, a pioneering
'phygital' platform that integrates digital capabilities with
on-ground engagement. ITCMAARS is a crop-agnostic,
full-stack AgriTech platform that is enhancing procurement
efficiency, optimising supply chains and creating new
avenues for value generation, while delivering meaningful
benefits to the farming community. Built on a strong
physical layer anchored in FPOs and a digital layer through
the ITCMAARS super-app, the initiative now spans over
2,100 FPOs and more than 2.6 million connected farmers
across 11 states. The super-app, available in eight
regional languages, enables wider access to advanced
agronomy and decision support at scale through AI/ML-led
predictive advisory, satellite-sensing enabled insights and
the 'Krishi Mitra' GenAI voice assistant, while the physical
layer enables access to biological inputs, drone-based
precision farming, quality assaying, market linkages and
rural services through FPOs and partners.

Aligned to sustainability goals of the organisation, emerging
trends of consumer choices and the global regulatory
landscape, ITCMAARS is building traceable value chains
to enable 'Trust Systems at Scale'. Fully integrated,
customised digital solutions are being developed for
diverse compliance and certification requirements such
as the EU Deforestation Regulation (EUDR), production
and procurement of organic produce, and food-safe,
residue-free commodities.

By seamlessly integrating digital capabilities with on-ground
engagement through FPOs, ITCMAARS has significantly
enhanced procurement efficiency at scale across multiple
value chains, strengthened compliance readiness for
evolving global standards, and created new avenues for
value generation through adjacent businesses in agri-inputs,
credit and rural services. The platform's integrated
approach, combining advisory, input access and market
linkages, enables your Company to translate evolving
customer requirements around quality, traceability and
compliance into on-ground production outcomes, creating
value for both farmers and the Business.

During the year, your Company collaborated with the
Department of Science & Technology, Government of
India, under the 'Operation Dronagiri' initiative in Varanasi
to deploy AI/ML-powered hyperlocal crop advisory
through the ITCMAARS platform across 15 FPOs,
covering over 27,000 wheat farmers and 39,000 acres.
Independent assessments indicated appx. 15% yield
improvements and nearly 30% increase in net returns
for farmers adopting customised advisory, validating the
potential of data-led, hyperlocal interventions to enhance
farm productivity and incomes at scale. Building on these
learnings, your Company will continue to strengthen and
scale such science-backed solutions through ITCMAARS,
while sharpening competitiveness across value-accretive
agri-commodity chains.

Your Company's vast sourcing network holds enormous
potential to create value across several agri chains.
Through AI/ML models, your Company is building
expertise in data-science led decision support systems
to enhance agility and responsiveness across agri value
chains. Such systems deepen the sourcing capabilities
to dynamically respond to evolving conditions across
multiple sourcing dimensions and make optimal decisions
across temporal and spatial vectors.

These capabilities and infrastructure provide a structural
advantage by enabling assurance of quality, traceability
and competitiveness in sourcing agri raw materials,
thereby supporting the growth strategy of your Company's
Branded Packaged Foods Businesses.

- The Business continued to play a pivotal role in
assuring benchmark-quality wheat and supply
security to support the growing requirements of the
'Aashirvaad' atta portfolio. Leveraging a wide sourcing
network, direct farm linkages including FPOs, and
robust crop development initiatives, the Business
ensured timely and cost-competitive procurement of
critical grades of wheat. Digitally enabled sourcing
capabilities supported scale and speed, while crop
development efforts were intensified to improve

climate resilience, enhance yields and secure
premium varieties, thereby reinforcing product quality
and consumer experience. Direct sourcing from FPOs
through ITCMAARS has now scaled up to about
40% of the wheat sourced for 'Aashirvaad Atta' and
Agri Business, leading to significant procurement
related efficiencies and quality enhancement.

-    During the year, the farmer-driven milk procurement
network in Bihar, West Bengal and Jharkhand was
strengthened to support the growing requirements of
the Fresh Dairy portfolio under the 'Aashirvaad Svasti'
brand. The Business deepened farmer partnerships
and further enhanced transparency and efficiency
through digitally enabled collection and direct farmer
payments. Tailored dairy extension services spanning
animal nutrition, health and productivity were
scaled up, improving yields and reinforcing
farmer loyalty. These initiatives enhanced farmer
profitability while ensuring a consistent supply of
superior-quality, attribute-specific milk aligned with
brand requirements, thereby enabling continued
portfolio expansion and innovation.

-    The Business continued to scale up sourcing
across a wide range of spices to support the growth
requirements of the 'Sunrise' and 'Aashirvaad' brands,
with a sharper focus on food safety, traceability and
consistent supply.

-    Going forward, your Company's dedicated organic
sourcing capabilities—underpinned by specialised
farm linkages and end-to-end traceability—will provide
a clear competitive advantage for its organic portfolio
across FMCG Businesses, by assuring authenticity,
regulatory compliance and consistent quality.

The Business strengthened its collaborations with leading
research institutions across India to build cost-effective,
high-yielding and resilient agri value chains. By mapping
climate hotspots and advancing regenerative agriculture,
your Company introduced location-specific seed
varieties and tailored agricultural practices in key states.
This approach is aimed at enhancing crop intelligence,

reducing GHG emissions and improving soil health.
Additionally, efforts to increase farm income were
supported through the development of customised
agri-inputs, laying the foundation for sustainable,
future-ready food products.

Your Company became the first in India to receive the
global Farm Sustainability Assessment (FSA) 3.0 Silver
benchmark for wheat and paddy, independently audited
by the SAI Platform. This milestone, achieved by working
closely with over 3,500 farmers across 70+ FPOs in Uttar
Pradesh and Bihar covering 22,000 acres, reinforces your
Company's commitment to building traceable, sustainable
agri value chains and further strengthens its positioning
as a preferred partner for leading global buyers who seek
sustainability credentials in procurement decisions.

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

Your Company's ability to deliver resilient performance
across agri value chains, even amidst volatility, is
anchored in structural advantages that are difficult to
replicate. These include deep farmer linkages spanning
millions of growers across multiple states, integrated
crop development programmes, and a full-stack digital
ecosystem in ITCMAARS enabling end-to-end traceability
and comprehensive engagement with the farming
community. Built through years of sustained investment,
these differentiated capabilities make the Agri Business
well-poised to capture emerging opportunities across
value-accretive agri-commodity chains.

NOTES ON SUBSIDIARIES

The following may be read in conjunction with the
Consolidated Financial Statements of your Company
prepared in accordance with Indian Accounting Standard 110.
Shareholders desirous of obtaining the Report and Accounts

of your Company's subsidiaries may obtain the same
upon request. Further, the Report and Accounts of
the subsidiary companies is also available under the
'Investor Relations' section of your Company's corporate
website, www.itcportal.com, in downloadable format.

As stated above, your Company acquired 100%
shareholding in Sresta Natural Bioproducts Private
Limited ('Sresta') - an Indian company primarily engaged
in the business of manufacture and sale of organic
packaged food products (staples, spices, processed
foods, etc.) under the brand name '24 Mantra Organic' in
the domestic as well as international markets, directly and
through its two wholly-owned foreign subsidiaries, namely
Fyve Elements LLC in the USA and Sresta Global FZE
in the UAE.

The Board of Directors of your Company on
1st August, 2025, in order to fully realise the envisaged
synergy benefits for acquisition of Sresta and to carry on
combined operations more efficiently and economically,
approved the Scheme of Amalgamation of Sresta and
Wimco Limited ('Wimco') with your Company ('Scheme').
The Scheme was sanctioned by the Honourable National
Company Law Tribunal ('NCLT'), Kolkata and Hyderabad
Benches. Since all the requisite formalities have been
completed, the aforesaid amalgamation has been given
effect to in the Financial Statements from the respective
Appointed Dates i.e. 1st April, 2025 for Wimco and
13th June, 2025 for Sresta. Accordingly, the two
subsidiaries of Sresta viz., Sresta Global FZE, UAE
and Fyve Elements LLC, USA, have become direct
wholly-owned subsidiaries of the Company. Sresta and
Wimco will be dissolved with effect from 1st June, 2026.

Your Company's Policy for determination of a material
subsidiary, in conformity with Regulation 16 of the
Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations 2015, can
be accessed on your Company's corporate website at
www.itcportal.com/material-subsidiary-policy. Presently,
your Company does not have any material subsidiary.

Surya Nepal Private Limited

Nepal's GDP grew by 4.6% in real terms during the
fiscal year ended 16th July, 2025, up from 3.7% in the
previous year. This was primarily driven by recovery in
manufacturing, construction and trade, coupled with
expansion in the hydropower sector, even as the agriculture

sector remained subdued owing to erratic monsoons.
With consumer price inflation remaining range-bound
during the year, the Nepal Rastra Bank continued with its
accommodative monetary policy stance.

Nepal witnessed political unrest in September 2025,
causing substantial disruption in economic activity for
about six months, leading eventually to a change in the
Government in March 2026. Real GDP growth for fiscal
year 2025-26 is expected to moderate to 3.0%¹¹, largely
reflecting the impact of the disruptions during this period
and the continued weakness in agricultural performance.
During the first eight months of the fiscal year (ended 15th
March, 2026), food inflation increased by 3.6% (compared
to 3.3% previous year). However, inward remittances,
which account for appx. 28% of GDP, grew by 38% in
the first 8 months of the current financial year, providing
support to domestic demand.

The new Government has announced a wide range of
initiatives, inter alia, towards strengthening governance,
modernising public service delivery, digital transformation
and ease of doing business. A stable government, resilient
remittance inflows, and low interest rates are expected
to underpin growth in the near term. Real GDP growth
for fiscal year 2026-27 is expected to recover to 4.6%¹¹.
However, risks arising from geopolitical developments,
particularly the West Asia disruptions, may weigh on
remittance inflows, add to inflationary pressures and pose
downside risks to overall economic growth.

Structural reforms aimed at fostering domestic and foreign
investments, enabling private sector growth, strengthening
local manufacturing, and supporting sectors that create
large economic multiplier effect remain critical to achieve
sustained economic growth.

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

The company delivered a robust performance during the
year, despite the challenging operating environment.
The Cigarette business reinforced its market standing
by leveraging its robust portfolio, complemented by
new launches & superior product quality, and a wide
distribution network. Additionally, several initiatives were
undertaken to enhance product quality and efficiency.

The company's manufacturing systems continued
to be agile and set new benchmarks in quality and
productivity. Digital initiatives were undertaken across
the manufacturing chain to, inter alia, drive operational
excellence and enhance quality assurance. Relentless
focus on developing world-class products, anchored
on innovation and benchmarked to international quality
standards, remains a key source of sustainable competitive
advantage for the company.

In the Foods business, the company scaled up distribution
and availability of 'Sunfeast Dark Fantasy Choco Fills'
biscuits, which coupled with focused brand building
investments, enabled premium positioning for the brand
in the market. In the Confectionery portfolio, the company
continued to make focused investments towards enhancing
its market standing. The company has successfully scaled
up its 'Sunfeast Dark Fantasy Choco Rolls', manufactured
at its state-of-the-art manufacturing facility in Biratnagar,
by leveraging a strong distribution network. The product
has received encouraging consumer response and is
being scaled up in target markets.

To promote authentic 'Made in Nepal' products globally,
the company recently launched an ultra-premium, unifloral
Himalayan chestnut honey under the brand name 'Marani'
in the U.S. market. A dedicated direct-to-consumer portal -
www.himalayantreasures.com is also operational.

The company's wholly-owned subsidiary, Surya Nepal
Ventures Private Limited, engaged in manufacturing and
sales of Agarbatti, continued to strengthen its market
standing leveraging its differentiated product portfolio,
sharply focused marketing investments and best-in-class
product availability across target markets. The
'Mangaldeep' range of products straddles all segments
and price points, offering consumers Agarbattis in a
variety of fragrances and packaging formats, backed by
a robust trade marketing and distribution infrastructure.

The company continues to make multi-dimensional
contributions towards building the societal and economic

capital of Nepal. In line with applicable regulations and
CSR policy, the company carried out initiatives under
four distinct CSR Platforms, namely, Surya Nepal Asha,
Surya Nepal Prakriti, Surya Nepal Adharshila and
Surya Nepal Gatha during the year. Key interventions
include:

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

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

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

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

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

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

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

During the year, the company recorded Revenue
from Operations of NRs. 5669 crores (previous year
NRs. 5293 crores) and Net Profit of NRs. 1289 crores
(previous year NRs. 1172 crores) on a consolidated basis.

The company declared a dividend of NRs. 303 per equity
share of NRs. 50 each for the year ended 15th July, 2025
(32nd Asadh, 2081), amounting to NRs. 1222 crores
(previous year NRs. 273 per equity share of NRs. 50 each
amounting to NRs. 1101 crores).

The company remains one of the largest contributors to the
exchequer in Nepal and is well-positioned to consolidate
its leadership position by leveraging its robust portfolio of
products, deep & wide distribution network, best-in-class
manufacturing facilities and execution excellence.
The company continues to rapidly scale-up the newer
FMCG businesses and evaluate emerging opportunities
in this space.

During the year, the Indian IT services industry faced
headwinds due to weak discretionary client spending,
delayed project decision making and 'AI deflation' where
AI adoption compressed revenues for traditional services.
This was compounded by global macro-economic
uncertainty & geopolitical developments. Notwithstanding
such challenges, the company delivered a strong
performance during the year with revenue growth of
appx. 14%, ranking it amongst the fastest-growing
companies in the Indian IT services industry. Further,
the company achieved a lifetime high Customer
Experience Score, ranking amongst the highest in the
Indian IT services industry.

The global technology industry is at an inflection point,
transitioning towards an era of intelligent and integrated
operations, driven by the widespread adoption of
Generative Artificial Intelligence (GenAI) and cloud-native
architectures. India's technology sector is also witnessing
a pivotal shift, as AI adoption is scaling up from
experimentation to wider enterprise scale deployment.
This transition is, inter alia, driving a shift in the delivery
model from effort-based to outcome-based services.
Service providers that pair deep domain expertise with
AI deployment at scale, are best placed to win in this
fast-evolving operating landscape.

Against this backdrop, the company remains focused on
driving accelerated growth anchored in its core strategy
pillar of customer-centricity. During the year, the company
established new engineering hubs in Riyadh (Middle East
markets) and Melbourne (APAC market), and extended
its footprint within India with new centres in Hyderabad,
Pune and Mumbai. With AI-led services being central to
this expansion, the company also set up Global AI Labs
in Bengaluru, Kolkata and Pune, with each Lab being
aligned to a hyperscaler partner. Customer experience
remains a key priority for the company; Customer
Experience Centers in Bengaluru and Kolkata, which
function as digital co-creation hubs, as well as the
engineering hubs in Riyadh and Melbourne help
accelerate ideas from 'proof of concept' to enterprise-scale
deployment for customers.

In response to the significant shifts in the IT Services
industry as stated above, the company is rapidly

re-architecting its operating model to being “Led by Industry
Domain. Measured by Business outcomes. Deployed at
Scale.” Investments are being stepped up in capability
building towards addressing the emerging value pools
viz. Agentic Re-imagination of legacy service offerings
such as Application Management, Infrastructure, SAP,
Testing & Data Services; 'Agentification' of business
services; Full stack Agentic Platforms for building,
deploying and scaling autonomous agents; AI-led
Solutions for focus verticals such as Hospitality,
Manufacturing & Consumer Packaged Goods; and
Re-engineering 'Data for AI'.

Attracting, training, and retaining high-quality talent,
particularly in niche and NextGen technologies, remains
a top priority to succeed in the future. In this context,
the company scaled up structured upskilling programs
in GenAI, Automation and Modern Engineering across
the organisation, strengthening the blend of AI readiness
and domain expertise. The company advanced its
AI talent readiness through a structured, enterprise-wide
capability program anchored in the AI League framework,
spanning foundational, practitioner, builder and innovator
tracks across 10,000+ employees in sales, delivery and
enabling functions.

The company's investments in technology-led solutions
and dedicated AI & Innovation Labs received recognition
during the year from partners and analysts. K-Fabrik^TM
(a composable platform to build, deploy and govern
enterprise-scale Generative and Agentic AI) was declared
a Winner at the 16th Aegis Graham Bell Awards for
Innovation in GenAI - AI Infra, Orchestration & Platforms,
and HFS Research recognised the ITCMAARS (Metamarket
for Advanced Agriculture and Rural Services) platform
as a global benchmark for Agri-Tech transformation.

The company is making sustained progress by effectively
leveraging the momentum of its recent acquisitions -
Blazeclan Technologies, a cloud consulting firm with
capabilities across AWS, Azure and GCP, and a part of
PTC's product lifecycle management (PLM) consulting and
professional services business. Inorganic opportunities
continue to be pursued in strategic priority areas towards
strengthening and scaling the portfolio of offerings.

During the year, the company's consolidated Revenue
from Operations stood at ' 4835.00 crores (previous year
' 4244.83 crores). Profit Before Tax and Exceptional
items stood at ' 667.37 crores (previous year
' 620.76 crores) while Net Profit for the year stood at
' 407.78 crores (previous year ' 449.82 crores).

For the year under review:

a)    ITC Infotech India Limited recorded Revenue from
Operations of ' 3488.76 crores (previous year
' 3204.32 crores) and Net Profit of ' 497.08 crores
(previous year ' 466.62 crores). The company
paid a total dividend of ' 41.25 per Equity Share of
' 10/- each aggregating ' 374.76 crores (previous year
' 53.75 per Equity Share of ' 10/- each aggregating
' 488.32 crores).

b)    ITC Infotech Limited, UK, a wholly-owned subsidiary of
the company, recorded Revenue of GBP 31.53 million
(previous year GBP 28.80 million) and Net Profit of
GBP 1.60 million (previous year GBP 1.33 million).

c)    ITC Infotech (USA), Inc., a wholly-owned subsidiary
of the company, together with its wholly-owned
subsidiary Indivate Inc., recorded Revenue of
US$ 155.61 million (previous year US$ 160.71 million)
and Net Profit of US$ 7.03 million (previous year
US$ 6.53 million).

d)    In the recent past, ITC Infotech India Limited has also
set up subsidiary companies in Brazil, Mexico, France,
Germany, Italy, Malaysia and Saudi Arabia. Further, the
company acquired Blazeclan Technologies Private
Limited and its subsidiaries based in several countries
including Singapore, Australia, Malaysia, Belgium,
New Zealand, USA, Canada and Philippines.
Please refer to Form AOC-1 (Statement containing
salient features of the financial statements of
Subsidiaries / Associate companies / Joint Ventures),
forming part of the Report and Accounts, for details
on financial performance of these companies.

The company remains confident that its strong foundation
of deep domain knowledge, technological capabilities
and global talent pool will enable it to deliver top quartile
industry growth in the years ahead. It will continue to
drive scale and long-term differentiation by deepening
key client relationships and amplifying its vertical-specific

portfolio of technology offerings, while scaling its
platforms and strengthening strategic alliances with
hyperscalers across its focus areas viz. GenAI and
Agentic AI, Digital, Data & Analytics, Cloud and Infrastructure
Services. With sustained investments in building the
capabilities of the future and in attracting, training and
retaining the right talent — anchored in a customer-focused,
employee-centric and high-performance culture — the
company is well positioned to deliver enduring and
profitable growth.

Technico Agri Sciences Limited

During the year under review, potato production in India
stood at appx. 58.6 million MT, representing an increase
of 2.7% over the previous year. Higher output coupled with
improved availability of premium quality seed potatoes
resulted in subdued realisations during the year.

Amidst these market conditions, the company focused on
consolidating its relationship with the farming community.
Strategic initiatives of the company included expanding
geographic presence across India, strengthening
distribution in secondary & tertiary markets, and
leveraging emerging opportunities in key markets such as
West Bengal during peak seed sales season, supported
by its strong brand value. These interventions enabled
the company to record its highest ever revenue from seed
sales during the year.

The company continues to consolidate its leadership in
production of early generation seed potatoes, underpinned
by strong agronomy capabilities. This remains integral
to supporting the 'Bingo!' range of potato chips of
your Company, while also addressing the seed potato
requirements of the farmer base of your Company's Agri
Business.

The company's Revenue from Operations stood at
' 416.16 crores (previous year ' 383.68 crores) with Net
Profit of ' 79.89 crores (previous year ' 83.76 crores).
Total Comprehensive Income for the year stood at
' 80.01 crores (previous year ' 83.71 crores).

The company declared an interim dividend of ' 6.5 per equity
share of ' 10 each for the year ended 31st March, 2026,
amounting to ' 24.68 crores (previous year Nil).

The company continues to build on a strong foundation
for the future and remains confident of leveraging its
deep domain expertise to strengthen farmer relationships,
crucial for developing high yield and climate resilient
seed varieties and fortify its market standing in the
seed potato industry.

The company continues to focus on advancement and
commercialisation of its proprietary TECHNITUBER®
Seed Technology, alongside ongoing efforts to customise
the agronomic practices for effective deployment across
various geographies. In parallel, the company is actively
engaged in the global marketing of TECHNITUBER® seed
produced at the facilities of its subsidiaries in China and
Technico Agri Sciences Limited, India (a wholly-owned
subsidiary of your Company). For the year under review:

a.    Technico Pty Limited, Australia registered a turnover
of Australian Dollars (A$) 2.99 million (previous year
A$ 2.86 million) and a Net Profit of A$ 2.55 million
(previous year A$ 1.51 million).

b.    Technico Technologies Inc., Canada, Technico
Asia Holdings Pty Limited, Australia, and
Technico Horticultural (Kunming) Co. Limited,
China - there were no material developments to
report during the year.

The company declared a dividend of A$ 0.55 per share of
A$1 each for the year ended 31st March, 2026, amounting
to A$ 5,508,526 (previous year A$ 5,007,752).

North East Nutrients Private Limited

Your Company holds 76% equity stake in North East
Nutrients Private Limited (NENPL), which owns a food
processing facility in Mangaldoi, Assam, catering to the
biscuits market in Assam and other North-Eastern states.

The company continues to focus on consistently improving
operational efficiency and productivity. In recognition of its
high standards of manufacturing excellence and quality,
the company continues to receive industry recognition
at the national and regional levels. NENPL received four
Gold Awards at the Convention on Quality Concepts 2025,
organised by the Quality Circle Forum of India, Durgapur
Chapter. The company also received one Platinum & two
gold awards in CII Kaizen competition 2025, two gold
awards in CII National Technology Competition 2025 and
a Jury Champion Award in CII Champions Trophy 2025.

The company's Revenue from Operations for the year
stood at ' 158.44 crores (previous year ' 158.87 crores),
while Net Profit for the year was ' 11.00 crores (previous
year ' 13.63 crores). Total Comprehensive Income for the
year stood at ' 11.01 crores (previous year ' 13.60 crores).

For FY 2025-26, the Board of Directors of NENPL has
recommended a final dividend of ' 1.50 per equity share

of ' 10 each, aggregating ' 10.95 crores (previous year
final dividend of ' 2.00 per equity share of ' 10 each,
aggregating ' 14.60 crores).

ITC IndiVision Limited

The company is engaged in the manufacture and
export of nicotine and nicotine derivative products. The
company's manufacturing facility, situated near Mysuru,
has the capability to produce purest nicotine derivatives
conforming to US and EU pharmacopoeia standards.
During the year, the company undertook extensive product
development initiatives, customer trials and business
development efforts. The company made good progress
during the year, with commercial shipments scaling up in
the latter half of the year, and is well positioned to expand
the business going forward.

For the financial year ended 31st March, 2026, the company
recorded Total Income of ' 69.31 crores (previous year
' 10.51 crores) and EBITDA of ' 17.51 crores (previous year
EBITDA loss of ' 18.54 crores).

ITC Fibre Innovations Limited

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

Backed by a state-of-the-art manufacturing facility at
Badiyakhedi, Madhya Pradesh, equipped with advanced
thermoforming machines and inline high-speed trimming
systems, the company is pursuing opportunities in a
rapidly evolving sustainable packaging solutions space.
The company has the unique capability to manufacture
complex high volume Moulded Fibre Products in India.

During the year, the company carried out extensive
prototyping and sampling to support the development of
Next-Gen products; however, it faced challenges largely
due to disruptions arising from US tariff changes. Plans
are on the anvil to accelerate growth through focused
market development anchored on a differentiated MFP
portfolio leveraging innovation and agile operations.

For the financial year ended 31st March, 2026, the
company recorded Total Income of ' 5.43 crores (previous
year ' 4.61 crores) with EBITDA loss of ' 26.39 crores
(previous year loss of ' 17.57 crores) primarily on
account of product stabilisation expenses.

Russell Credit Limited

The company recorded Total Income of ' 75.10 crores
(previous year ' 71.91 crores) and Net Profit of
' 51.12 crores (previous year ' 47.49 crores). Growth in
Total Income was driven by higher surplus liquidity during
the year.

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

For FY 2025-26, the company declared final
dividend of ' 0.394 per Equity Share of ' 10 each,
aggregating ' 25.47 crores (previous year final dividend
of ' 0.36 per Equity Share of ' 10 each, aggregating
' 23.27 crores).

The Board and the shareholders of the company have
approved reduction of the Equity Share Capital of the
company from ' 646.48 crores to ' 246.48 crores, by way
of cancelling and extinguishing 40 crores fully paid-up
Equity Shares of ' 10 each and returning the amount of
' 400 crores to your Company (owning 100% stake in the
company). The said capital reduction, which is subject to
confirmation by the NCLT, Kolkata Bench, is expected
to conclude in FY 2026-27.

Gold Flake Corporation Limited

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

During the year, the company recorded Total Income of
' 30.76 crores (previous year ' 25.11 crores) and Net
Profit of ' 29.30 crores (previous year ' 23.80 crores).
The company declared interim dividend of ' 17.60 per
Equity Share of ' 10 each, aggregating ' 28.16 crores
(previous year ' 14.10 per Equity Share of ' 10 each,
aggregating ' 22.56 crores).

Greenacre Holdings Limited

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

During the year, the company recorded Total Income
of ' 16.72 crores (previous year ' 13.46 crores) and
Net Profit of ' 3.61 crores (previous year ' 7.23 crores).

ITC Integrated Business Services Limited

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

During the year, the company recorded Total Income of
' 22.08 crores (previous year ' 21.50 crores) and Net
Profit of ' 1.35 crores (previous year ' 1.41 crores).

MRR Trading & Investment Company Limited

The company, a wholly-owned subsidiary of
ITC Integrated Business Services Limited, holds tenancy
rights in a commercial building located in Mumbai and
also provides estate maintenance services. During the
year, the company recorded Total Income of ' 9.18 lakhs
(previous year ' 7.58 lakhs) and Net Profit of ' 0.73 lakh
(previous year ' 0.41 lakh).

Pavan Poplar Limited

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

Considering the time and resources involved, the
company withdrew the said appeal with the approval
of the Honourable High Court and applied for voluntary
liquidation. The company was admitted to the voluntary
liquidation process on 1st August, 2025 under the
provisions of the Insolvency and Bankruptcy Code, 2016
read with applicable rules and a liquidator was appointed
by the NCLT, Mumbai Bench.

The dissolution petition has been filed by the Liquidator
with the NCLT, Mumbai Bench, with the final order
currently pending.

Prag Agro Farm Limited

The operations of the company were adversely impacted
pursuant to the order of the Honourable High Court of
Uttarakhand at Nainital in February 2014 ('Order') dismissing
the writ petition filed by the company against the order of
the District Magistrate authorising the State authorities
to take possession of the land leased to the company.
The company had filed an appeal against the Order.

Considering the time and resources involved, the
company withdrew the said appeal with the approval
of the Honourable High Court and applied for voluntary
liquidation. The company was admitted to the voluntary
liquidation process on 1st August, 2025 under the
provisions of the Insolvency and Bankruptcy Code, and
a liquidator was appointed by the NCLT, Mumbai Bench.

The company was dissolved vide NCLT order approving
the dissolution, with effect from 10th December, 2025.

Fyve Elements LLC

Fyve Elements LLC (Fyve) was incorporated in
the state of Maryland, USA and is a wholly-owned
subsidiary of your Company, engaged in the business
of wholesale and retail distribution of a range of organic
packaged food products in the USA primarily under the
'24 Mantra Organic' brand.

During the year ended 31st March, 2026, the company's
Revenue from Operations stood at US$ 16.69 million
(previous year US$ 14.74 million). Net Profit during
the year stood at US$ 0.17 million (previous year loss
US$ 0.13 million).

Sresta Global FZE

Sresta Global FZE was incorporated in Ras Al Khaimah,
United Arab Emirates and is a wholly-owned subsidiary
of your Company, engaged in the business of
sale of organic packaged food products under the
'24 Mantra Organic' brand.

During the year ended 31st March, 2026, the company's
Revenue from Operations stood at US$ 0.76 million
(previous year US$ 0.70 million).

NOTES ON JOINT VENTURES

ITC Filtrona Limited - a joint venture of Gold Flake
Corporation Limited

The company demonstrated a resilient performance
despite a challenging operating environment during
the year, supported by agility in execution and effective
customer service.

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

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

During the year ended 31st March, 2026, the company's
Revenue from Operations stood at ' 859.20 crores
(previous year ' 761.34 crores). Net Profit during the year
stood at ' 82.77 crores (previous year ' 83.85 crores).

The Board of Directors of the company has recommended
a dividend of ' 133 per equity share of ' 10 each for the
year ended 31st March, 2026 (previous year ' 125 per
equity share).

Logix Developers Private Limited (LDPL)

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

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

In July 2022, LDPL received a communication from NOIDA
authorities intimating cancellation of the sub-lease for the
land on which the project was to be constructed on account

of non-payment of lease instalments and non-fulfilment
of the conditions of the sub-lease, including forfeiture of
the amount deposited. The company is evaluating all
options to pursue its rights in the matter. Consequently,
as a matter of prudence, the company had derecognised
the leasehold land / assets as well as adjusted / reversed
the lease liabilities towards NOIDA in accordance with the
terms of the sub-lease deed, in its financial statements for
the year ended 31st March, 2022.

During the year ended 31st March, 2026, the company
recorded a Net Profit of ' 0.23 crore (previous year
' 0.25 crore). The Net Worth of the company stood at
' 5.80 crores as at 31st March, 2026 (previous year
' 5.57 crores).

Your Company's total investment in LDPL was
' 41.95 crores. Your Company had made provision of the
entire investment amount as diminution in the carrying
value of investment in the previous years and consequently
the carrying value of your Company's investment in
LDPL as at 31st March, 2026, is Nil.

The financial statements of LDPL for the year ended
31st March, 2026, are yet to be approved by its Board of
Directors. In the absence of audited financial statements
of LDPL, the Consolidated Financial Statements of
your Company for the year ended 31st March, 2026,
have been prepared based on the financial statements
prepared by the management of LDPL.

NOTES ON ASSOCIATES
ITC Hotels Limited

ITC Hotels Limited ('ITCHL') became an associate of your
Company consequent to the demerger of your Company's
Hotels business (excluding ITC Grand Central, Mumbai)
effective from 1st January, 2025. Your Company holds
39.85% stake in ITCHL as at 31st March, 2026.

The year marked five decades since the commencement
of the Hotels business in 1975 with Welcomhotel Chennai.
Over the last 50 years, the business has evolved from
a single landmark hotel into a scaled and institutionally
strong enterprise, underpinned by strong brand equity,
robust operating capability and globally acclaimed cuisine
excellence.

ITCHL stands amongst India's fastest growing hospitality
companies with a diverse portfolio, comprising more than
150 hotels and 14,000 keys. The company operates

across multiple hotel brands, catering to different market
segments, and is recognised for its world-class properties,
iconic brand architecture, signature culinary offerings, and
superior service standards. Anchored in its 'Responsible
Luxury' ethos, the company embeds sustainability across
design, operations, and guest experience.

During the year, the Indian hospitality industry witnessed
steady growth, supported by resilient domestic demand,
amidst intermittent external disruptions through the year.
After a strong start, travel momentum softened due to a
confluence of factors, including geopolitical disruptions,
aviation incidents, adverse weather events and the West
Asia conflict.

Navigating this challenging operating environment with
operational agility and disciplined execution, ITCHL
delivered resilient performance with 16% growth in
Consolidated Revenue and 37% growth in Consolidated
Profit Before Tax¹². Robust Occupancy and Average
Daily Rate (ADR) growth, driven by sustained demand and
smart revenue management, boosted overall Revenues.
During the year, ITCHL's subsidiary, WelcomHotels Lanka
(Private) Limited, achieved a significant milestone as
ITC Ratnadipa, Colombo turned cash positive within its
first full year of operations along with the commencement
of delivery of Sapphire Residences.

In line with its 'Asset-Right' growth strategy, ITCHL continued
to scale its portfolio through strategic investments in
high-potential locations and actively partner with asset
owners to expand its presence across Tier-II and Tier-III
cities. During the year, new hotel projects were announced at
Visakhapatnam and New Delhi. The hotel at Visakhapatnam
is envisaged to address the city's growing demand from IT
and data centres, industrial and port-led business travel,
further strengthening ITCHL's presence on the eastern
coast. The hotel at Yashobhoomi Complex, New Delhi,
with contemporary banqueting infrastructure and signature
cuisine offerings is expected to leverage Yashobhoomi's
positioning as a global hub for conventions, exhibitions and
marquee events. Construction is progressing well on the
ongoing projects at Puri and Welcomhotel Bhubaneswar.
The company also unveiled a new premium brand
'Epiq Collection', focused on sustainability, culinary
innovation and design sophistication, to further strengthen
its premiumisation strategy.

ITCHL's leadership in sustainable and people-first
practices was reaffirmed during the year through global
and domestic industry recognitions, including being named
the World’s Leading Sustainable Organisation and World’s
Leading Sustainable Employer at the World Sustainable
Travel & Hospitality Awards 2025, and being ranked #5
in India and #45 in Asia among the Best Companies to
Work For 2025 by Great Place To Work.

The outlook for the Indian hospitality sector remains
positive, driven by sustained domestic demand and travel
premiumisation across leisure, business, weddings,
MICE and religious tourism. This broad-based growth has
reduced dependence on international arrivals, significantly
enhancing the sector's stability. Recent policy measures
such as GST rationalisation and monetary easing are
anticipated to further bolster discretionary consumer
spends in the near term. Leveraging strong brand equity,
sustainability leadership, institutional strengths, and
the sectoral tailwinds, ITCHL is well-poised to create
sustained value for all stakeholders.

The Board of Directors of the company has recommended
a dividend of ' 1.00 per equity share of ' 1.00 each for the
financial year ended 31st March, 2026, for approval of its
shareholders (previous year: Nil).

Ample Foods Private Limited

In February, 2025, your Company signed Definitive
Agreements for the acquisition of 100% of the share
capital of Ample Foods Private Limited (Prasuma), in
one or more tranches, over a period of about three years.
Your Company completed the first tranche of acquisition
of 43.75% stake in Prasuma on 4th April, 2025.

Prasuma is a leading player in the frozen, chilled and
ready to cook foods space in India and operates with
'Prasuma', 'Meatigo' and 'Prasuma Momo Kitchen' brands,
specialising in oriental cuisine (viz. Momos, Spring rolls,
Baos, Korean fried chicken), high-quality delicatessens &
raw meats and others. Prasuma offers a wide assortment
of 300+ products, backed by strong expertise in
developing innovative 'Good-for-You' products, and has
been a pioneer in frozen products like Baos, Korean fried
chicken, Schezwan momo meal, etc. Prasuma is a strong
strategic fit with your Company's Frozen Foods business
(under the 'ITC Master Chef' brand) and will enable your
Company to expand its portfolio in this fast growing space.

During the year, the company augmented its product
portfolio with the launch of five new variants of
Momos & Sausages, viz.    Chicken Cheese &

Onion Sausage, Chicken Pepper & Herb Sausage,
Cheese & Chicken Momos, Whole Wheat Momos Veg &
Paneer and Whole Wheat Momos Chicken.

Sproutlife Foods Private Limited

Sproutlife Foods Private Limited (Yoga Bar) operates in
the fast-growing, nutrition-led health food space with a
diversified product portfolio across multiple categories
including bars, breakfast cereals, etc. under the
'Yoga Bar' brand. As at 31st March, 2026, your Company's
stake in Sproutlife Foods Private Limited stands at 47.5%,
on a fully diluted basis with cumulative investment of
' 255 crores.

During the year, Yoga Bar sustained its strong momentum
in Bars, Muesli and Oats segments, complemented by
expansion of the protein range across the portfolio and
new launches in Plant Protein Powder segment.

With effect from 1st April, 2026, Sproutlife Foods Private
Limited has become a subsidiary of your Company.

Mother Sparsh Baby Care Private Limited

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

The Indian baby care industry continued to demonstrate
steady growth in FY 2025-26, supported by increasing
awareness among new-age parents, rising preference for
natural and safe formulations, and shift towards premium
offerings.

During the year, Mother Sparsh recorded robust growth,
driven by higher brand salience and adoption. In April 2025,
your Company entered into definitive agreements to
increase its stake in Mother Sparsh from 26.5% to 100%,
in one or more tranches, over the next two to three years.
During the year, your Company invested ' 51 crores in the
company. As at 31st March, 2026, your Company holds
39.5% stake in Mother Sparsh, on a fully diluted basis,
at a cumulative investment of ' 96 crores.

ATC Limited (an associate of Gold Flake Corporation
Limited)

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

During the year, the Company received the prestigious
'STAR AWARD' from National Safety Council, Tamil Nadu
chapter, 'Certificate of Merit' from National Safety Council
of India and 'Certificate of Recognition' in the AIOE
National Awards for Outstanding Industrial Relations from
the Employers Federation of Southern India.

Associates of Russell Credit LimitedRussell Investments Limited, Divya Management
Limited and Antrang Finance Limited

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

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

Delectable Technologies Private Limited

Delectable Technologies Private Limited (Delectable) had
significantly scaled down its operations during the previous
year. Your Company divested its entire shareholding and
consequently, Delectable ceased to be an associate
company effective 13th May, 2025.

INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policy guides the conduct
of affairs of your Company and clearly delineates the
roles, responsibilities and authorities at each level of its
three-tiered governance structure and key functionaries
involved in governance. The ITC Code of Conduct commits
management to financial and accounting policies, systems
and processes. The Corporate Governance Policy and the
ITC Code of Conduct stand widely communicated across
the enterprise at all times and together with the Strategy
of Organisation, Planning & Review Processes and the
Risk Management Framework provide the foundation
for Internal Financial Controls with reference to your
Company's Financial Statements.

Such Financial Statements are prepared on the basis
of the Material Accounting Policies that are carefully
selected by management and approved by the Audit
Committee and the Board. These Policies are supported
by the Corporate Accounting and Systems Policies that
apply to the entity as a whole to implement the tenets of

Corporate Governance and Material Accounting Policies
uniformly across your Company. The Accounting Policies
are reviewed and updated from time to time. These, in
turn, are supported by a set of Divisional policies and
Standard Operating Procedures (SOPs) that have been
established for individual Businesses.

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

Your Company has in place adequate internal financial
controls with reference to the Financial Statements.
These have been designed to provide reasonable
assurance with regard to recording and providing reliable
financial information; complying with applicable statutes;
safeguarding assets from unauthorised use; ensuring that
transactions are carried out with adequate authorisation
and complying with Corporate Policies and Processes.
Such controls have been assessed during the year, after
taking into consideration the essential components of
internal controls stated in the Guidance Note on Audit
of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of
India. Based on the results of such assessment carried
out by management, no reportable material weakness
or significant deficiency in the design or operation of
internal financial controls was observed. Nonetheless,
your Company recognises that any internal control
framework, no matter how well designed, has inherent
limitations and accordingly, regular audit and review
processes ensure that such systems are reinforced on
an ongoing basis.

RISK MANAGEMENT

As a diversified enterprise, your Company continues
to focus on a system-based approach to business risk
management. The management of risk is embedded in
your Company's corporate strategy to build a future-ready
portfolio of businesses that best match organisational

capability with opportunities in domestic and international
markets, strengthening capabilities and competencies to
enhance competitiveness and win in the rapidly evolving
operating landscape. Accordingly, management of
risk has always been an integral part of your Company's
'Strategy of Organisation' and straddles its planning,
execution and reporting systems & processes.
Backed by strong internal control systems, the current
Risk Management Framework consists of the following
key elements:

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

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

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

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

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

-    Foreign currency exposures continue to be managed
within the framework of the Forex policies and
procedures.

-    A strong and independent Internal Audit function at
the Corporate level carries out risk focused audits
across all Businesses, enabling identification of areas
where risk management processes may need to be
strengthened. The Audit Committee of the Board
reviews Internal Audit findings and provides strategic

guidance on internal controls. The Audit Compliance
Review Committee closely monitors the internal
control environment within your Company including
implementation of the action plans emerging out of
internal audit findings.

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

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

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

Geopolitical developments, including regional conflicts,
evolving energy dynamics, and tariff led trade measures,
have heightened uncertainty in the operating environment.
These developments have resulted in increased volatility
across commodity and energy markets, disruptions in
global supply chains, and sharp escalation in logistics and
ocean freight costs.

Your Company continues to proactively monitor
these developments and has undertaken a range of
measures to strengthen supply chain resilience. These
include expansion of the sourcing and vendor base,
diversification of fuel and energy sources, development
of alternate materials and formulations, augmentation of

the domestic supplier base to enable import substitution,
and dynamically adjusting safety stock levels, as required.

Other key interventions include long-term supply contracts
with key vendors, investments in technology to enhance
flexibility in the use of alternative fuels, pipeline inventory
management and structured hedging arrangements to
mitigate commodity prices volatility and ensure continuity
of operations.

As your Company's digital transformation accelerates,
its cyber security posture continues to be strengthened to
address the rapidly evolving cyber-threat landscape. The
Cyber Security Committee provides direction on strategy,
establishes enterprise-wide security standards aligned
with best-in-class practices and monitors the cyber risk
posture to ensure resilient digital operations.

Cyber risks are managed through an integrated, layered
information technology and operational technology
(IT-OT) security framework encompassing preventive,
detective, and response controls. This includes robust
security architecture, continuous monitoring of critical
assets, secure application development, governed access
mechanisms, and the adoption of Zero Trust principles
and cloud-secure networks. Controls are in place to
address IT-OT convergence through standardised
security measures, real-time operational asset visibility,
specialised OT monitoring, and periodic assessments.
In addition, a centralised Al-enabled Security Operations
Centre (SOC) provides 24x7 monitoring and response
readiness.

Independent assurance is obtained through Vulnerability
Assessment & Penetration Testing (VAPT), maturity
assessments, and external Red Team exercises.
Enterprise-wide cyber security awareness programmes
coupled with robust AI governance framework further
reinforce vigilance and institutionalise a strong security
culture.

There were no reportable cyber incidents, network
outages, or business disruptions attributable to
cyber-attacks or malware during the reporting period,
underscoring the effectiveness of your Company's cyber
security governance, controls, and oversight mechanisms.

Climate change remains an existential global challenge,
and India is among the most vulnerable geographies.
Given your Company's pan India footprint and reliance

on agricultural and forestry-based raw materials, your
Company is inherently exposed to climate-related risks.
Your Company has adopted a comprehensive strategy
addressing both transition and physical climate risks
as part of its Sustainability 2.0 vision. Your Company's
commitment to achieve 'Net Zero Operations' by 2050 will
involve decarbonisation of its Scope 1 and Scope 2
emissions, specifically addressing emissions related to
electrical and thermal energy in its own operations.

-    On transition risks, your Company is driving extensive
decarbonisation across the value chain as part of
its commitment to achieve 'Net Zero Operations'
by 2050. Your Company is also strengthening
collaboration with value chain partners to accelerate
the decarbonisation of Scope 3 emissions. These
efforts are supported by robust monitoring systems
that are aligned with emerging global standards.

-    As part of its initiative to address physical risks,
your Company continues to actively pursue climate
proofing its operations and agricultural value chains
by using latest climate risk modelling techniques and
developing site-specific risk mitigation strategies.
Your Company's approach is geared towards
addressing climate risks in the short-term such as
impact of drought and erratic precipitation levels,
while simultaneously building long-term resilience
across its key agri value chains.

-    Water stewardship is a key pillar of Sustainability 2.0.
Towards enabling water security for all stakeholders
in its catchments, your Company's water stewardship
is aligned with the Alliance for Water Stewardship
Standard (AWS) a globally recognised framework for
assessing the efficacy of water management across
water stressed sites.

Your Company also recognises the significant potential
of nature-based solutions in carbon sequestration and
ecosystem resilience and prioritises actions to minimise
environmental impacts across land, freshwater, oceans and
the atmosphere. Your Company's strategy is consistent with
the recommendations of the Taskforce on Nature-related
Financial Disclosures (TNFD), which includes the L.E.A.P.
(Locate, Evaluate, Assess and Prepare) approach. This
approach emphasises the identification and management
of significant nature-related Dependencies, Impacts, Risks
and Opportunities (DIRO).

In response to rapidly evolving Extended Producer
Responsibility (EPR) regulations for plastic packaging, a
robust system supported by SOPs and internal / external
reviews has been put in place to ensure organisational
readiness and compliance. Your Company is also pursuing
sustainable packaging initiatives, including packaging
optimisation, reduction in plastic packaging intensity,
improved recyclability and introduction of recycled content
in plastic packaging.

Your Company has institutionalised a robust sustainability
governance framework supported by well-defined
processes to ensure compliance with new and emerging
regulations. In addition, your Company actively engages
with government and regulatory authorities, through
industry bodies, to contribute to the development of
effective and pragmatic regulatory and policy frameworks.

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

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

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

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

-    mitigation of price, liquidity and counter party
risks through hedging on commodity exchanges

(mainly NCDEX) for certain commodities, as
applicable. Correlation between prices prevailing
in the physical market and those on the commodity
exchange is analysed regularly to ensure
effectiveness of hedging

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

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

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

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

During the year, the Risk Management Committee and the
Audit Committee reviewed the status and effectiveness of
the risk management framework, systems and policies,
and considered them to be adequate.

During the year, your Company received the 'Masters of Risk'
Award in the FMCG category at the India Risk Management
Awards 2025 (CNBC TV18 and ICICI Lombard), in its
maiden participation, which is a testament to the maturity of
your Company's risk management practices.

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

AUDIT AND SYSTEMS

Your Company believes that a strong internal control
framework commensurate with the scale, scope and
complexity of its operations is integral to effective
governance and sustainable value creation. Your
Company's internal control framework supports the
orderly and efficient conduct of business, reliable financial

reporting, safeguarding of assets, and compliance with
policies, while enabling empowered decision-making with
appropriate checks and balances.

Your Company remains committed to ensuring a mature
and effective internal control environment that, inter alia,
provides assurance on orderly and efficient conduct of
operations, security of assets, prevention and detection of
frauds/errors, accuracy and completeness of accounting
records and compliance with various regulatory
requirements as applicable.

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

The Internal Audit function, a multi-disciplinary team
comprising professionally qualified accountants, engineers
and information technology specialists, is adequately
resourced to deliver high-quality assurance across your
Company's operating landscape. The team's skills are
continuously strengthened through periodic learning and
development programmes on contemporary topics.

Information security and cyber security have assumed
increased significance with the accelerated adoption of
digital technologies in recent years. Accordingly, Internal
Audit has further enhanced its focus on governance,
systems and controls over key digital assets and platforms,
IT-OT integration, and protection of sensitive data and
information.

Periodical reviews are conducted focusing on assessment
of controls pertaining to confidentiality, integrity and
availability of business information and systems covering
general IT controls and security of your Company's
IT Infrastructure. All systems and policies relating to
Information Management are regularly reviewed and
benchmarked to ensure they remain contemporary.
Further, all critical IT systems undergo pre-implementation
audits prior to deployment in the operating environment,
thereby providing assurance on implementation rigour
and operational readiness.

Aligned with your Company's 'Digital First' strategy, the
Internal Audit function continues to evolve as an agile,
multi-skilled and technology-enabled function. During
the year, Internal Audit initiated the deployment of
a data driven Continuous Auditing and Continuous
Monitoring (CACM) solution, providing real-time visibility
and insights into key risks and control performance
across select processes. Digital and technology risk
assurance capabilities were further strengthened
through the deployment of AI and intelligent automation,
enhancing productivity and enabling sharper risk insights.
Complementing these initiatives, industry-standard
cyber security tools were deployed for source code
reviews, website & application security assessments
and application vulnerability testing. These initiatives
have enabled early cyber-risk detection and secure
development practices, while improving overall
effectiveness & depth of coverage.