(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. (2) The business groups comprise the following : FMCG : | Cigarettes | - Cigarettes & Smoking mixtures. | | Others | - Branded Garments, Greeting Cards, Stationery & Gifts, Packaged Foods (Staples, Confectionary, Snack Foods, Ready to Eat Food) - Agarbattis and Matches sourced from the small scale sector. | Hotels | | - Hoteliering. | Paperboards, Paper & Packaging | | - Paperboards, Paper including Specialty Paper and Packaging. | Agri Business | | - Agri commodities such as rice, soya, wheat, coffee and leaf tobacco. | (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. 970 Crores (31.12.2002- Rs. 917 Crores) includes Rs. 836 Crores (31.12.2002 - Rs. 810 Crores) relating to the recently opened hotels at Mumbai and Kolkata as well as capital work in progress in respect of the second hotel under construction in Mumbai The segment results for Hotels continue to reflect the depreciation charge and the gestation cost of the newly opened hotels, the impact of the global slump in international travel during the earlier part of this year, and the holding cost in respect of Hotel Searock which has been the subject matter of a prolonged legal dispute. (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. During the nine months ended 31st December, 2003, the Agri Business revenues / results witnessed a degrowth over the same period last year due to : (a) transporters' strike in April 2003; (b) significant reduction in the size of export opportunity in non basmati rice which was available last year (Rs. 76 Crores for nine months ended 31.12.2003 as against Rs. 456 Crores for nine months ended 31.12.2002); and (c) significant appreciation of the Rupee against the US Dollar. (6) As at 31st December 2003, the total capital employed of the Company of Rs. 6575 Crores (31.12.2002 - Rs. 5461 Crores) included Rs. 802 Crores (31.12.2002 - Rs. 874 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. (7) Figures for the previous year have been recast to conform to current presentation. Registered Office: | For and on behalf of the Board | Virginia House, 37 J.L. Nehru Road, | | Kolkata - 700 071, India | | Dated : 30th January, 2004 | Sd/- K.Vaidyanath | Sd/- Y C Deveshwar | | Place : Kolkata, India | Executive Director | Chairman | | |