ITC's Post-tax profit for the Quarter ended 30th June 2002 grew by 15.2% to Rs.343.92 crores while Pre-tax profit registered a growth of 15.6% to Rs.532.54 crores. Net Sales Turnover grew by a handsome 21.4%. Earnings Per Share for the Quarter was Rs.13.90. Significant growth in the operating profits of the Agri Business and Paperboard segments have additionally bolstered the earnings for the quarter. These earnings were achieved despite difficult trading conditions, and after accounting for the ongoing start up and business development costs relating to the Company's new FMCG businesses. Continuing debt retirement reduced interest cost by 60% during the quarter.

The financial results for the quarter ended 30th June 2002 include that of the erstwhile ITC Bhadrachalam Paperboards Ltd. which was amalgamated with the Company effective 1st April 2001. Accordingly, figures for the previous year have been restated to incorporate the impact of the amalgamation.

FMCG
The cigarette industry continued to be under pressure in the wake of fresh State level taxes and the growing menace of contraband. During the quarter, Tamil Nadu and New Delhi imposed taxes on cigarettes of 10% and 20% respectively. While these levies were stayed by the respective High Courts, the Company continues to provide for such taxes. However, the Company's internationally benchmarked superior product quality and consumer focus led to a 10% growth in revenues. During the quarter, the Lights version of the prestigious India Kings brand in the ultra premium bevelled edge packaging format was rolled out in select markets.

The Lifestyle Retailing business further scaled up operations by adding 7 more exclusive Wills Lifestyle stores during the quarter. Consequently, the international quality Wills Sport range is now available in 45 stores across 37 cities in India.

The Greeting cards business continued to capture market share, gaining 3 percentage points during the quarter. Leveraging synergies with the Paperboards & Paper business segments of the Company, paper-based products were launched under the "Expressions Paperkraft" brand in June 2002.

The Foods business made an entry into the branded packaged atta market with the launch of its 'Aashirvaad' brand in Jaipur and Chandigarh. The business also launched 'Mint-o' in the confectionery segment. Two more ethnic signature recipes of ITC Welcomgroup, Dal Dakshin and Baingan Mirch ka Salan, were added to the 'Kitchens of India' range of gourmet foods. The market response has been encouraging.

Hotels
The incipient recovery seen in the first two months of the current financial year was neutralised in the wake of negative travel advisories issued by most Western countries. Construction of the hotels in Kolkata and Upper Worli, Mumbai is progressing on schedule.

Paperboards, Paper and Packaging
Segment results of Rs.47 crores for the quarter represents a growth of 50%. Action plans are underway to realise synergies envisaged in the amalgamation of the paperboards business. Sales of value added products grew by 46% during the quarter. Consequently, the share of value added products in total sales increased to 19% during the quarter from 13% in the previous year. The pulp mill modernisation project is well on course and is expected to significantly enhance cost competitiveness of the business, apart from achieving international standards in environmental compliance.

Agri Business
The Agri business turned in a sterling performance, with exports growing 109% to Rs.269 crores by leveraging the opportunity in non-basmati rice. The e-choupal model was further ramped up to 1020 installations covering 6000 villages. This initiative now extends beyond soya to wheat, coffee and marine products. In a strategic collaboration with the Tobacco Board, the Company launched the "Tobacco Farmers' Portal" aimed at providing on-line information to farmers on best farm practices, integrated pest management, curing and grading techniques etc.

The Board of Directors approved the results for the quarter ended 30th June, 2002 at the meeting held on 26th July, 2002.
  

Notes :

1. The above results were taken on record at the meeting of the Board of Directors of the Company held on 26th July, 2002.
    
2. Figures for the previous year have been restated wherever necessary to incorporate the impact of the amalgamation of the erstwhile ITC Bhadrachalam Paperboards Limited with the Company effective 01.04.2001.
    
3. The number of shares indicated against (12) above includes 20,96,982 shares issued to the shareholders of the erstwhile ITC Bhadrachalam Paperboards Limited in accordance with the 'Scheme of Amalgamation' effective 01.04.2001.
    
4. The above is as per Stock Exchange Regulations and does not take into account the excise issues disputed by the Company.
    

Notes :

(1) The Company's corporate strategy aims at creating multiple drivers of growth anchored on its core competencies.The Company is currently focused on four business groups : FMCG, Hotels, Paperboards, Paper & Packaging, and Agri Business. The Company's organisational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them.

(3) Branded Garments, Greeting Cards & Gifts and Branded Packaged Foods businesses are new activities. Accordingly segment results largely reflect start up and business development costs.

(4) In its Hotels business, the Company has been engaged in implementing its strategic investment plans to complete the ITC Welcomgroup chain. Capital employed of Rs. 819 Crores (30.06.2001 - Rs. 690 Crores) includes Rs. 715 Crores (30.06.2001 - Rs. 590 Crores) relating to the recently opened hotels, namely ITC One in New Delhi and ITC Grand Maratha in Mumbai, as well as capital work in progress in respect of hotels under construction.

The segment results reflect the gestation cost of the newly opened hotels, the impact of the global slump in international travel, the adverse effect of travel advisories and the holding cost in respect of Searock Sheraton which has been the subject matter of a prolonged legal dispute.

(5) The Company's Agri business exports agri commodities, supplies agri raw materials to the Branded Packaged Foods business and sources leaf tobacco for the Cigarettes business.

(6) Total capital employed of Rs. 4758 Crores include Rs. 881 Crores being legacy assets acquired by the Company as part and parcel of the schemes facilitating exit from the Financial Services and Edible Oil businesses in 1997.
 

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