ITC’s post-tax profit for the Quarter ended 31st
December, 2004 at Rs. 448.94 crores recorded a growth of 17.9% while pre-tax profit grew
12.7% to Rs. 638.70 crores. Earnings per share for the Quarter stood at Rs. 18.10.
The Company’s Net Turnover at Rs. 1795.19 crores
registered a robust growth of 10.6% on the back of growth in Cigarette sales, ramp up of
new FMCG businesses and improved performance of the Hotels and Paperboards, Paper &
Packaging segments.
FMCG - Cigarettes
The Cigarette industry continued to operate in a
challenging environment in the wake of the implementation of the ‘Cigarettes and
Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce,
Production, Supply and Distribution) Act, 2003’ (COTPA), imposition of 2 % education
cess on excise duties and the continuing increase in state level taxes.
The Company’s continued focus on world class quality
enabled it to sustain its leadership position in the industry. In keeping with its
strategy of providing superior value for the consumer, the Company introduced a limited
edition pack of ‘Scissors Filter’
in select markets of Kerala and festival packs of ‘Flake
Filter’, ‘Bristol Filter’, ‘Berkeley Filter’ and ‘Scissors Filter’. Market coverage of
select brands (in the Regular Filter category) in a new pack design was also extended
during the quarter.
‘Insignia’,
the Company’s super premium offering of world class quality continues to gain
increasing consumer admiration.
FMCG - Others
Branded Packaged Foods
The Branded Packaged Foods business was scaled up rapidly
during the quarter. In the Biscuits category, the ‘Sunfeast’
range continued to make impressive gains in launch markets. Product range was further
augmented with the launch of ‘Sunfeast Milky
Magic’ in select markets.The business is gearing up for the launch of
a slew of differentiated products while simultaneously establishing outsourced &
distributed manufacturing capacities to garner rapid volume growth in this category. ‘Aashirvaad Atta’ continued to gain increasing
consumer acceptance, consolidating its position as the clear market leader amongst
national branded players. In the Ready-to-Eat segment, the quarter saw the launch of 4
unique variants each of Conserves and Chutneys in the Mumbai market. Extension of this
range to target markets is underway. Market/outlet coverage of ‘Aashirvaad Multipurpose Cooking paste’ and the ‘Aashirvaad ReadyMeals’ range was further
expanded during the quarter. In the Confectionery category, the business launched ‘mint-o Fresh’ in 2 unique flavours – Clove
and Eucalyptus, and is fast gaining consumer acceptance in the breath freshner segment.
The business also launched ‘Candyman Eclairs’
in the 50 paise price point in select markets. The quarter also marked the launch
of www.mycandymanclub.com, a highly
innovative website offering a host of features for children.The site has witnessed very
impressive hits and registrations within a short span of time.
Lifestyle Retailing
The vitality of the ‘Wills
Lifestyle’ range was substantially enhanced with the introduction of
over 900 style and colour options for the Winter 2004 season. The business continued to
reformulate its retail presence in keeping with the emerging retailing landscape in the
country by establishing/relocating stores in high traffic Malls. The ‘Wills’
range is now available in 29 large format retail stores and 94 multi-brand outlets apart
from the 42 exclusive ‘Wills Lifestyle Stores’.
In the mid-market category, distribution of the ‘John Players’ brand was strengthened
especially in identified high traffic locations through improved presence in key
multi-brand outlets and exclusive franchisee stores.
Outsourced manufacturing at the ‘just in time’
facility continued to be scaled up with a view to servicing consumer preferences more
effectively and to improve inventory management.
Greeting , Gifting & Stationery
business
In the Greeting cards category, the ‘Expressions’ brand continued to make impressive
gains especially in multi-brand outlets across all the 6 metros. Specialist distributor
arrangements have also been established in several markets including Delhi and Mumbai.
Consumer response to the launch of the premium ‘Regalia’
range of greeting cards for connoisseurs who value personalised greetings has
been very encouraging. The Company’s ‘Classmate’
and ‘Expressions Paperkraft’ range
of stationery products continued to gain consumer acceptance during the quarter. The
Stationery distribution network is being rapidly expanded to meet the demands of the
ensuing season.The ‘Classmate Young Author Contest
2004/05’ was flagged off in October ‘04 covering 12 cities &
3000 schools in the country.
Safety Matches
The business continues to make impressive gains in sales
volumes and market standing with ‘AIM’ emerging
as the world’s largest selling Safety Matches brand. In line with the strategy of
growing the value-added segment and gaining a higher share thereof, the business is
focussing its efforts in key markets through a combination of building brand awareness and
introduction of customised products.
ITC continues to extend technical and management support to
manufacturers in the small & medium scale sectors to help them achieve superior
product quality and processes.
Agarbattis
ITC’s foray into the marketing of incense sticks is
yet another manifestation of its philosophy of partnering with small and medium
enterprises to help them raise their quality and process standards. The business’
products under the ‘Mangaldeep’ brand
in a unique ‘fragrance locked’ packaging format is rapidly gaining consumer
franchise across markets.
Hotels
Segment revenues grew by 36% over the same period last year
on the back of improved room realisations and occupancies across locations. The
Company’s second hotel in Mumbai, ITC Grand Central, was commercially launched in
January 2005.A renovation and product upgradation programme at the ITC Maurya Sheraton,
New Delhi was completed during the quarter, raising the already high quality standards of
this hotel.
The Company’s commitment to the pursuit of the
‘triple bottomline’ received yet another recognition in the ‘ITC Centre,
Gurgaon’ being awarded the Platinum Green Building
rating by USGBC-LEED (US Green Building Council - Leadership in Energy and Environmental
Design ), the highest rating in this category. ITC is the first corporate house in India
to have achieved this unique international distinction.
Paperboards, Specialty Paper &
Packaging
Sales of value added products grew 29% over the same period
last year, further enriching the product mix. These products now comprise over 55% of
paperboard sales. Significant progress was also made during the quarter towards capacity
expansion in the recycled segment with the scaling up of production at the Kovai unit in
Tamil Nadu. Trial runs are underway in the new 75,000 TPA line at Bhadrachalam, Andhra
Pradesh and commercial operations are slated to commence shortly.
The Company’s Elemental Chlorine Free (ECF) pulp mill
is the only one of its kind in the country meeting world-class environmental standards.
With increasing awareness of hygiene and safety among Indian consumers, industries like
foods and pharmaceuticals are progressively switching to ECF pulp-based paperboard.
Recent investments in state-of-the-art technology in the
packaging business have begun delivering substantial savings to the ITC system through
in-house manufacture of high-end packaging products.
Agri business
The e-choupal network was further ramped up to 5060
installations, reaching out to nearly 3 million farmers in the states of Madhya Pradesh,
Uttar Pradesh, Maharashtra, Rajasthan, Karnataka and Andhra Pradesh.
The Company’s first rural mall, christened ‘Choupal Sagar’, inaugurated in August
2004 at Sehore, MP continued to attract high levels of footfalls and sales. Such malls, in
synergistic combination with the e-choupal network would serve as the core infrastructure
to support ITC’s rural distribution strategy.
The Company won the Certificate of Excellence from the
Ministry of Commerce (Tobacco Board), for the ‘Best
Export Performance in Unmanufactured Tobacco’ and the ‘Best Manufacturing Performance in Cigarettes’ for
the year 2004.
Progress of Other Strategic
Initiatives
In pursuit of its abiding commitment to create stakeholder
value through service to society, ITC’s community projects made significant progress
during the quarter. The social and farm forestry programme, which leverages the
biotechnology research capability of the Company’s paperboards business, now covers
100 million saplings spread across 30,000 hectares, generating employment opportunities
for nearly 300,000 people. The livestock development programme reaches out to 15,000
farmers in 800 villages. The ITC sponsored micro credit groups have spawned over 2000
women entrepreneurs in select rural areas. The integrated watershed development programme
now extends to 550 water storages in the form of percolation tanks, check dams and farm
ponds to support soil and moisture conservation in over 8000 hectares of land.
In the area of environment, health and safety, ITC
continues to raise the bar for its operating units. Already a water-positive enterprise,
the Company aims to become carbon-positive and achieve zero solid waste over time.
The Board of Directors, at its meeting held in Kolkata on
21st January, 2005 approved the financial results for the quarter ended 31st December
2004, which are enclosed.
Notes :
(i) The above results were reviewed by the Audit Committee
and approved at the meeting of the Board of Directors of the Company held on 21st January,
2005.
(ii) Figures for the previous year have been re-arranged
wherever necessary.
(iii) Gross Income comprises Segment Revenue and Other
Income.
(iv) During the quarter, 12 Investor complaints were
received, which were promptly attended to by the Company. No complaints were pending
either at the beginning or at the end of the quarter.
(v) During the quarter, 1,72,755 Ordinary Shares of Rs.
10/- each were issued and allotted under the ITC Employee Stock Option Scheme.
Consequently, the issued and paid up share capital of the Company stands increased to Rs.
248,09,76,570/-.
(vi) The Members of the Company at their meeting held on
19th November, 2004, approved the Scheme of Amalgamation of ITC Hotels Limited and Ansal
Hotels Limited with the Company (Scheme), with effect from 1st April, 2004. The Hon'ble
High Court of Calcutta has admitted the Company's petition for sanction of the Scheme. The
results do not take into account the impact of the amalgamation, which will be
appropriately reflected upon the Scheme becoming effective.
(vii) The shareholders of the Company have approved, by
means of postal ballot, Special Resolutions for alteration of the Objects Clause of the
Memorandum of Association for commencement of new businesses at an appropriate time, as
covered in the Notice dated 29th October, 2004 to the shareholders; the results of postal
ballot were declared on 22nd December, 2004.
(viii) On 20th January, 2005, pronouncing its judgement on
the Company's petition/appeals challenging Luxury Tax on cigarettes, the Hon'ble Supreme
Court of India accepted the Company's contention and held that the States do not possess
legislative competence to impose luxury tax on goods. A copy of the judgement is awaited.
The above results do not take into account the effect of this judgement.
(ix) The above is as per Clause 41 of the Listing Agreement
and does not take into account the excise issues disputed by the Company.
Limited Review
The Limited Review, as required under Clause 41 of the
Listing Agreement has been completed and the related Report forwarded to the Stock
Exchanges. This Report does not have any impact on the above 'Results and Notes' for the
Quarter and Nine Months ended 31st December, 2004 which needs to be explained.
