Revised apportionment of cost of acquisition of Shares of ITC & Shares of ITC Hotels

GENERAL GUIDANCE FOR THE SHAREHOLDERS

1. The Hon’ble National Company Law Tribunal, Kolkata Bench, vide Order dated
October 4, 2024, has sanctioned the Scheme of Arrangement amongst ITC Limited (‘ITC’)
and ITC Hotels Limited (‘ITCHL’) and their respective shareholders and creditors
(‘Scheme’) providing, inter alia, for demerger, transfer and vesting of the Hotels Business
(Demerged Undertaking as defined in the Scheme) from ITC into ITCHL on a
going concern basis and issue of Equity Shares by ITCHL to the shareholders of ITC in
consideration thereof, in accordance with the provisions of Section 2(19AA) of the
Income-tax Act, 1961 (‘the Act’). The Scheme became effective from 1st January, 2025.

2. In accordance with the provisions of the Scheme, ITCHL has allotted
125,11,71,040 Equity Shares of ` 1/- each to the shareholders of ITC whose names were
recorded in the Register of Members of ITC or in the Register of Beneficial Owners
maintained by the Depositories as on the Record Date (i.e., January 6, 2025) in the
ratio of 1 (One) fully paid-up Equity Share of ` 1/- (Rupee One) each for
every 10 (Ten) fully paid-up Ordinary Shares of ` 1/- (Rupee One) each held in ITC
(‘Share Entitlement Ratio’).

3. For the purpose of determining post demerger cost of acquisition of the Ordinary Shares
of ITC and the Equity Shares of ITCHL, shareholders may apportion their total cost of
acquisition of ITC shares in the following manner:

For example, if 1,000 Ordinary Shares of ITC were purchased at ` 400/- per share by a
shareholder, the total cost of acquisition would amount to ` 4,00,000/- before the
demerger. Based on the Share Entitlement Ratio, 100 shares of ITCHL would be allotted
to the said shareholder. The total cost of acquisition of ` 4,00,000/- would be apportioned
in the aforesaid ratio - ` 3,45,960/- (86.49% of ` 4,00,000/-) being the total cost of
acquisition of 1,000 ITC shares and ` 54,040/- (13.51% of ` 4,00,000/-) being the
total cost of acquisition of 100 shares of ITCHL.

4. It may be noted that as per Section 47(vid) of the Act, the aforesaid issue of Equity Shares
by ITCHL pursuant to the Scheme will not be regarded as transfer; further, in terms of
Explanation 1(i)(g) to Section 2(42A) of the Act, the date of acquisition of the Ordinary Shares of ITC will be deemed to be the date of acquisition for the Equity Shares
of ITCHL

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