ITC's post-tax profit for the Quarter ended 30th September 2005 registered a growth of 17.3% to Rs. 572.33 crores, while pre-tax profit at Rs. 815.24 crores posted a growth of 17.4%. Earnings per share (post share split & issue of bonus shares) for the Quarter stood at Rs. 1.52. Viewed in the context of the base effect (tax refund higher by Rs.21 crores in the same quarter last year), the growth in post tax profit is even more commendable.

The Company's Net Turnover at Rs. 2183 crores registered a robust growth of 22.2% driven by Cigarette sales, ramp up of the Foods business, higher agri exports and improved performance of the Hotels and Paperboards, Paper & Packaging segments. The non-cigarette topline which now accounts for 44% of the Company's Net Turnover, grew by 39% during the quarter.

FMCG

•	Branded Packaged Foods
	The Company's Branded Packaged Foods business continued to expand rapidly. In the Biscuits category, the 'Sunfeast' range made impressive gains. During the quarter, the Sunfeast range was further expanded with the launch of 'Sunfeast Golden Bakes' in 3 exciting variants viz. Butter, Cashew and Honey & Cashew. 'Sunfeast Dark Fantasy', a dark chocolate and vanilla cream offering, was extended to select markets during the quarter. It has redefined the premium segment and further strengthened the Company's quality reputation. The salted crackers from the Sunfeast stable 'Sunfeast Snacky' - launched earlier in 2 unique variants viz., Chilli Flakes and Classic Salted - continues to gain rapid consumer franchise. These product launches/extensions, alongwith the strong trend in sales of other value-added products in the Creams and Marie segment, resulted in enriching the sales mix and improving the realisations. The business is gearing up for the launch of a slew of differentiated products while simultaneously establishing outsourced and distributed manufacturing capacities to garner rapid volume growth in this category. The distribution of 'Sunfeast Pasta Treat', a whole wheat based non-fried product, was ramped up during the quarter. The product has met with encouraging response from customers. The brand's celebrity association with Shah Rukh Khan and its partnering with the landmark 'Sunfeast Open 2005' WTA Tennis tournament in Kolkata is expected to yield significant value addition by reinforcing the brand's 'energetic, cheerful & spirited' attributes and reiterating its 'spread the smile' positioning among the core target group. In the Staples category, 'Aashirvaad' Atta further consolidated its position as the clear market leader amongst national branded players with sales touching record highs during the quarter. The brand's premium offering 'Aashirvaad Select' was launched in identified North markets. Product extension to all target markets is currently underway. Plans are on the anvil to rapidly scale up presence in the branded spices market under the 'Aashirvaad' brand, leveraging the strong brand association with superior quality and consistency.
•	Lifestyle Retailing
	The 'Wills Lifestyle' range vitality was further strengthened with the introduction of a large number of style and colour options in the 'Wills Classic' and 'Wills Clublife' categories. The business is in the process of reformulating 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 39 large format retail stores and 109 multi-brand outlets apart from the 37 exclusive 'Wills Lifestyle Stores'. The distribution reach of John Players, the mid-market brand, was further strengthened during the quarter. The brand is now available in 53 Exclusive Brand Outlets and nearly 1550 Multi-brand and high traffic outlets. The stylish summer collection has significantly reinforced the brand's "comfort dressing" positioning and has led to increased value capture on account of superior product mix. The Company has signed up Hrithik Roshan as the brand ambassador for John Players. This association, is expected to make a strong statement in the fashion and lifestyle space and reinforce the brand's 'style with a playful side' positioning. During the quarter, the Company also launched an exclusive line of prestige fragrance products, 'Essenza Di Wills' reflecting ITC's philosophy of bringing to the Indian consumers world-class products that enrich quality of life. The first range under the 'Essenza Di Wills' brand comprising two sets of fragrance products - Inizio Femme (for women) and Inizio Homme (for men) - are currently available at select Wills Lifestyle stores across the country. The 16-SKU range for men and women, designed to complement the 'Wills Lifestyle' offerings, currently comprises perfumes, deodorants, body lotions, bathing bars, nourishing creams, shampoos, etc.
•	Greeting, Gifting & Stationery
	The business made impressive gains in the Stationery market with the 'Classmate' and 'Expressions Paperkrafts' range of products gaining increasing consumer franchise and growing preference among target consumers. Backed by a strong distribution network, the Company's products currently reach out to nearly 60 markets across 11500 outlets. The 'Expressions' range of Greeting cards consolidated its leadership position in multi brand outlets in key markets in the South and East.
•	Safety Matches
	The Matches SBU achieved robust volume growth through continued focus on product quality, enhanced supply chain capabilities and distribution reach, even as the margins improved on the back of higher realisations and effective cost management. The popular brand 'AIM' further consolidated its position as the single largest match brand in the country, significantly enhancing the Company's market standing. The quarter also marked exports of value-added products to discerning markets in Europe, Africa and the USA.. The recent acquisition of WIMCO by the Company's wholly owned subsidiary Russell Credit Ltd. will yield synergy advantages, apart from catalysing fresh investments in the company with attendant benefits to all stakeholders. The synergy benefits will better position ITC to continue to add value to manufacturers in the small-scale sector through technical and management support to help them achieve superior product quality and processes. Consequent to its successful de-listing offer, Russell Credit Ltd. now owns 91.7% of the paid-up equity share capital of WIMCO Ltd.
•	Agarbattis
	ITC continues to partner with small and medium enterprises to help them raise their quality and process standards. In yet another manifestation of ITC's commitment to the triple bottomline, the Company entered into an MOU with the Khadi & Village Industries Commission (KVIC) to source agarbattis from KVIC approved units, and to distribute agarbattis through the Khadi Bhavan/Khadi Bhandar outlets across the country. This collaborative venture is expected to result in employment generation, particularly in the semi-urban and rural areas. The 'Mangaldeep' brand is fast emerging as the only national brand in an industry dominated by multiple local brands.
•	Cigarettes
	The Cigarettes industry continued to operate in a challenging environment especially in view of the severe restrictions on advertisement and communication brought about with 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) with effect from 1st April 2004 and ratification of the Framework Convention for Tobacco Control, of which India was one of the first signatories. Excise duty rates were also increased by as much as 10% for cigarettes in March 2005. Cigarettes continue to be subjected to multiplicity of taxes at the Central and State levels. The constitutionality of the levy of entry taxes by the States is presently before a Constitution Bench of the Supreme Court. A judgement favourable to industry will be in consonance with the taxation philosophy underlying the concept of VAT, namely the elimination of the cascading impact of multiple taxes. The Company continues to leverage its focus on world class quality to enhance its market standing and sustain its leadership position in the industry. Several initiatives were undertaken during the quarter including roll out of Gold Flake Kings and Royal Filter in modernised packs, Gold Flake Plains in hinged lid packs and extension of Navy Cut in the new Wave pack to target markets.
Hotels
	Segment revenues at Rs. 154 crores grew by 27.1% over the same period last year on the back of improved room realisations and occupancies across properties. ITC Grand Central, the Company's second hotel in Mumbai, posted a cash profit in its first six months of operations. ITC Sonar Bangla emerged as the market leader both in terms of 'Revpar' (Revenue per available room) and Room Revenues in Kolkata. A comprehensive renovation and product upgradation programme is also underway at various hotels in keeping with the Company's strategy of maintaining the contemporariness of its properties. In keeping with the Company's strategy to maximise presence in key business locations, pre-project work in respect of the second property at Bangalore is underway.
Paperboards, paper and packaging
	Sales of value added paperboards continued to record strong growth during the quarter, further enriching the product mix. These products now constitute approx. 55% of total paperboard sales. In the recycled segment, the recently acquired Kovai unit recorded cash profits during the quarter on the back of improved capacity utilisation and savings in energy cost post commissioning of a captive power plant. In fulfillment of its commitment to a cleaner environment, the Company's Elemental Chlorine Free (ECF) pulp mill continues to meet world-class environmental standards. Plans are underway to augment pulping capacity to achieve cost competitiveness and meet future growth requirements. With increasing awareness of hygiene and safety among Indian consumers, industries like foods and pharmaceuticals are progressively switching to ECF pulp-based paperboard. The Packaging and Printing business commissioned a state-of-the art offset printing machine during the quarter which would aid scaling up sales in the domestic market and tap export opportunities. The SBU continues to leverage its recent investments in technology upgradation to expand its range of offerings to include a wider variety of contemporary packaging formats. This has enabled it to provide discernibly superior and innovative packaging solutions not only to the Company's cigarettes business but also to the FMCG and paperboards businesses. Apart from providing a source of sustainable competitive advantage to these businesses, the investments have begun delivering substantial savings to the ITC system.
Agri business
	The e-choupal network was further ramped up to 5372 installations, reaching out to over 3 million farmers in the states of Madhya Pradesh, Uttar Pradesh, Maharashtra, Rajasthan, Karnataka, Kerala 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. Two more 'Choupal Sagars' have commenced operations at MHOW and Vidisha (M.P.) while construction at 10 more sites is fast nearing completion. Such malls, in synergistic combination with the e-choupal network would serve as the core infrastructure to support ITC's rural distribution strategy. Agribusiness revenues during the period April 2005 to September 2005 grew by 41%, driven by wheat, non-basmati rice exports and leaf tobacco. However, Segment Results were impacted due to the incremental costs associated with scaling up of the choupal network, income from export incentives included last year and lower margins in leaf tobacco exports consequent to change in sales mix. The Board of Directors, at its meeting held in Kolkata on 28th October, 2005 approved the financial results for the quarter ended 30th September, 2005, which are enclosed.

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) Segment results of the new business activities namely 'FMCG : Others ' 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. 1370 Crores (30.09.2004 - Rs. 1367 Crores) includes Rs. 431 Crores (30.09.2004 - Rs. 861 Crores) relating to investments in hotels which became operational in the last three years as well as capital work in progress. The segment results are net of the depreciation charge of the newly opened hotels.

(5) The Company's Agri Business markets agri commodities in the export and domestic markets, supplies agri raw materials to the Branded Packaged Foods Business and sources leaf tobacco for the Cigarettes Business. The segment results for the quarter and half-year are after absorbing costs relating to the expansion of the strategic e-Choupal initiative.

(6) Figures for the corresponding quarter and half-year ended 30.09.2004 have been recast to conform to current presentation.