Post-tax profits for the Quarter ended 30^th June, 2001 grew by 21% to Rs. 301 crores. Pre-tax profits grew by 18% to Rs. 466 crores. Earnings Per Share stood at Rs. 12.25 for the Quarter. The Company has adjusted the Provision for Taxation to include the impact of deferred taxation as disclosed in the quarterly results.

Domestic trading conditions remain depressed. The steep increase in excise duties on cigarettes imposed in the last Union Budget caused cigarette volumes to decline during the quarter. However, continuous investments in brands, coupled with effective cost management, including interest cost, have enabled growth in profits.

As a result of the crop holiday declared by the Tobacco Board in Andhra Pradesh, there was no auction of FCV tobaccos in the State in the current season. ITC, as a measure of support to the farmers, had purchased tobaccos well in excess of its requirements last year, and is now well stocked to cater to the requirements of the current year.

The two-month strike by the workmen at the Tiruvottiyur factory of the Packaging and Printing Division ended in the middle of May. The immediate actioning of contingency plans ensured uninterrupted sourcing of the Company’s packaging needs. The Greeting Cards SBU increased its reach to 368 locations. "EXPRESSIONS" cards are now available in around 9500 outlets across the country.

Investment plans relating to the Hotels business are progressing satisfactorily. Construction of the ‘ITC Sonar Bangla’ at Kolkata and the ‘ITC Grand Towers’ at Mumbai is on schedule.

The Lifestyle Retailing Business is steadily scaling up its operations. Currently, 12 stores in 10 cities are operational, including two in New Delhi, two in Chennai, and one each in Hyderabad, Chandigarh, Pune, Coimbatore, Trichy, Ambala, Aurangabad and Belgaum. The world-class ‘Wills Sport’ product range and the international quality shopping experience have been well received by discerning customers.

Despite the prevalent low international prices for agri commodities, ITC continued its endeavour to maximise exports on the back of its strengths in the agri sector. The e-Choupal initiative of the company in three chosen commodities, namely soya, coffee and aqua, is being further scaled up in Madhya Pradesh, Karnataka and Andhra Pradesh.

The Board of Directors at its meeting held on 20^th July, 2001 approved the unaudited financial results for the quarter ended 30^th June, 2001 which are annexed.

Notes:

 
1. The above results were taken on record at the meeting of the Board of Directors of the Company held on 20th July, 2001.
 
2.     Figures for the previous year have been rearranged wherever necessary.
    
 
3. During the period, the Company, after obtaining requisite approvals, sold its entire shareholding in ITC Infotech Limited, UK (Infotech-UK), a wholly owned subsidiary of the Company to ITC Infotech India Limited (Infotech-India), another wholly owned subsidiary of the Company consequent to the restructuring of the Information Technology business of the Company as approved by the shareholders at the Annual General Meeting held on 28th July, 2000. Infotech - India also acquired the entire share capital of ITC Infotech (USA) Inc.(Infotech-USA), hitherto a wholly owned subsidiary of Infotech-UK. Consequently, Infotech-UK and Infotech-USA have become wholly owned subsidiaries of Infotech-India with effect from 19th June, 2001 and 24th May, 2001, respectively, and accordingly, continue to be subsidiaries of the Company.    
 
4. Pursuant to the Standard on 'Accounting for Taxes on Income', the Company has recorded a cumulative net deferred tax liability of Rs.57.32 crores upto 31st March, 2001 as a reduction from General Reserves. This figure is net of an amount of Rs.21.24 crores being the deferred tax asset pertaining to the year ended 31st March, 2001. These adjustments have not been reflected in the above shown" Twelve months ended 31.3.2001 " column which remains as per the audited accounts. Further, the favourable impact of the deferred tax asset of Rs.7.56 crores for the quarter ended 30th June, 2001, and Rs.6.79 crores for the quarter ended 30th June, 2000 have been adjusted in the Provision for Taxation shown above.  
 
5. The above is as per Stock Exchange Regulations and does not take into account the excise issues disputed by the Company.