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29 per cent growth in Q2 Net Profit
19 Oct 2001

Unaudited Financial Results (Provisional) For the Quarter and Half Year Ended 30th September, 2001

ITC recorded yet another quarter of impressive growth. Post Tax Profit for the quarter ended 30th September 2001, at Rs.334 crores grew by 29 per cent over the corresponding quarter of the previous year. Earnings per share for Q2 stood at Rs.13.6. Post tax Profit for half year ending 30th September, 2001 recorded a growth of 25 per cent. Provision for Taxation includes the impact of deferred taxation. Segment-wise revenues, results and capital employed are annexed.

Domestic cigarette volumes continue to remain under pressure due to the impact of the steep increase in excise duties imposed in the last Union Budget. The rate of de-growth however, is showing signs of deceleration. Apart from continuing to invest in brands, the Company's FMCG business is engaged in strengthening its distribution reach to support its planned entry into Packaged Foods.

Other Income of Rs.65 crores for quarter ended 30th September, 2001 includes one-time interest receipt of Rs.32 crores on income tax refunds. Interest cost for the 2nd quarter was lower by Rs.9 crores, reflecting the continuing favourable impact of the debt reduction effected last year. Other expenditure for the quarter is higher by 13 per cent over the corresponding period last year largely on account of start-up costs of the Lifestyle Retailing and Greeting Cards businesses. The Company continues to focus on effective cost management, including productivity improvements.

The Lifestyle Retailing Business continues to rapidly scale up operations, with 22 stores operational currently, apart from 9 pro shops. The 'Wills Sport' world-class product range is gaining increasing acceptance with consumers. Some of the metro city stores are already among the top revenue grossers per square foot in their respective locations. The Greeting Cards SBU has further expanded its presence, with the 'Expressions' range of cards now being available across the country.

The Hotels and Tourism industry in India, as in most parts of the world, has been significantly set back in the wake of the recent tragic events in the U.S. Although the market is expected to remain depressed in the near term, the Company believes that the inherent long term potential of this industry in India remains exciting. The 'ITC Grand Maratha' now offers 386 luxury rooms for the discerning upmarket traveller. The projects at Kolkata and Upper Worli, Mumbai are progressing satisfactorily.

The Agri-Business segment of the Company sustained an export growth of 11 per cent in agri-commodities despite difficult global trading conditions. The crop holiday declared by the Tobacco Board in Andhra Pradesh significantly affected the Company's leaf tobacco operations during the quarter, with threshing volumes down by over 80 per cent.

The Packaging business registered a smart recovery from the strike-led disruption in operations during the first quarter this year. The SBU continues to maintain its status as the preferred supplier of international quality printed paperboard packaging, the export of which grew by 33 per cent during the quarter.

The financial results for the quarter ended 30th September 2001, approved by the Board of Directors at its meeting in Kolkata on 19th October, 2001 are enclosed.

Unaudited Financial Results (Provisional)
For the Quarter and Half Year Ended
30th September, 2001
   (Rs. Crores)
    Quarter Ended 30.09.2001 Quarter Ended 30.09.2000 Half Year Ended 30.09.2001 Half Year Ended 30.09.2000 Twelve Months Ended 31.03.2001
Gross Income   2348.04 2161.67 4600.46 4305.37 8816.11
Net Sales Turnover [1] 1102.42 1004.39 2150.31 2010.38 4208.12
Other income [2] 64.85 37.08 91.27 54.81 144.47
Net Income (1+2)   1167.27 1041.47 2241.58 2065.19 4352.59
Total Expenditure [3] 628.83 575.11 1180.38 1142.29 2516.44
a) (Increase)/Decrease in stock-in-trade   (53.37) 0.89 (70.68) (13.46) (20.31)
b) Consumption of raw material etc.   420.46 324.72 769.58 695.36 1512.68
c) Staff cost   59.94 70.69 121.41 133.97 274.43
d) Other expenditure   201.80 178.81 360.07 326.42 749.64
Interest (Net) [4] 15.14 24.15 33.76 47.16 95.91
Gross Profit (1+2-3-4)   523.30 442.21 1027.44 875.74 1740.24
Depreciation [5] 37.48 29.08 75.51 66.89 139.94
Profit Before Tax
[6] 485.82 413.13 951.93 808.85 1600.30
Provision for Current Taxation [7] 170.93 161.48 343.93 315.02 594.04
Profit After Current Tax (6-7) [8] 314.89 251.65 608.00 493.83 1006.26
Provision for Deferred Tax [9] -18.72 -6.97 -26.28 -13.76  
Net Profit (8-9) [10] 333.61 258.62 634.28 507.59 1006.26
Paid up Equity Share Capital (Ordinary shares of Rs. 10/- each) [11] 245.41 245.41 245.41 245.41 245.41
Reserves excluding Revaluation Reserve [12]         3225.65
Earnings per Share (Basic & Diluted) (Rs.) [13] 13.59 10.54 25.85 20.68 41.00
Aggregate of non Promoter Shareholding [14]
- Number of Shares       245414904 245414904 245414904
- Percentage of 
      100 100 100


  1. The above results were approved at the meeting of the Board of Directors of the Company held on 19th October, 2001.
  2. Figures for the previous year have been re-arranged wherever necessary.
  3. Gross Income comprises of Segment Revenue and Other Income.
  4. Consequent to the receipt of approvals of the members and of the Central Government,
    the name of the Company stands changed from 'I.T.C. Limited' to 'ITC Limited' effective 18th September, 2001.
  5. The Board of Directors of the Company at its meeting held on September 21, 2001 approved a Scheme for the amalgamation of ITC Bhadrachalam Paperboards Ltd. ("ITC Bhadrachalam") with the Company, with effect from April 1, 2001, subject to the approvals of the members of the Company and the Hon'ble High Courts at Kolkata and Hyderabad. The Scheme of Amalgamation, inter alia, provides that on such amalgamation becoming effective, the members of ITC Bhadrachalam will receive 1 (one) Ordinary Share of Rs. 10/- each of the Company for every 16 (sixteen) Equity Shares of Rs. 10/- each held by them in ITC Bhadrachalam on such date as the Board of Directors of the Company may determine. The Hon'ble High Court at Kolkata has directed convening of a meeting of the members of the Company on 7th December, 2001 for this purpose.
  6. 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 adjustment has not been reflected in the above shown "Twelve months ended 31.3.2001" column which remains as per the audited accounts. However, corresponding figures for the second quarter and half year of the previous year are being shown to enable comparison.
  7. The above is as per Stock Exchange Regulations and does not take into account the excise issues disputed by the Company.
Segment wise Revenue, Results and Capital Employed,
under Clause 41 of the Listing  Agreement
For The Quarter and Half Year Ended 30th September, 2001

(Rs. Crores)


3 months ended

Half Year ended


1. Segment Revenue


a) FMCG - Cigarettes

2013.27 4015.00

              - Others

5.20 7.48

              Total FMCG

2018.47 4022.48

b) Hotels

36.49 73.58
c) Agri Business 203.13 391.44
d) Paper & Packaging 139.43 254.29
              Total 2397.52 4741.79

Less : Inter segment revenue

114.33 232.60

Gross sales / income from operations

2283.19 4509.19

2. Segment Results


a) FMCG - Cigarettes

447.36 918.24

              - Others

-15.07 -30.62

              Total FMCG

432.29 887.62

b) Hotels

-3.45 -2.75
c) Agri Business 1.66 5.81
d) Paper & Packaging 27.56 44.97
              Total 458.06 935.65

Less: i) Interest (Net)

15.14 33.76

         ii) Other un-allocable expenditure
             net of un-allocable income

-42.90 -50.04

Total Profit Before Tax

485.82 951.93

3. Capital Employed


a) FMCG - Cigarettes *

1395.46 1395.46
              - Others 27.38 27.38
              - Total 1422.84 1422.84

b) Hotels

709.91 709.91

c) Agri Business

354.75 354.75

d) Paper & Packaging

312.20 312.20

Total Segment Capital Employed

2799.70 2799.70

* Before considering provision of Rs 523 Crores in respect of disputed State taxes, the levy/collection of which has been stayed.


  1. The Company's corporate strategy aims at creating multiple drivers of growth anchored on its core competencies.The Company is currently focussed on four business groups: FMCG, Hotels, Paper & Packaging, and Agri business. The Company's organisational structure and governance processes have been 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 and Packaged Foods .                    
    Hotels - Hoteliering .                    
    Paper & Packaging - Speciality Paper & Packaging.                     
    Agri Business - Leaf Tobacco & Agri commodities.
  3. Details shown against "FMCG - Others " pertain to the Company's new businesses namely, Branded Garments, Greeting Cards and Packaged Foods. Since these businesses are presently engaged in product development and scaling up operations, segment results largely reflect start up 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 710 Crores includes Rs 611 Crores relating to the recently opened properties, namely ITC One in New Delhi and ITC Grand Maratha in Mumbai, as well as capital work in progress in respect of properties under construction.                    
    First half of the financial year is generally the lean period for the hotels business.
    The segment results reflect the gestation cost of the newly opened properties, the impact of the global slump in international travel and the holding cost in respect of Searock Sheraton which has been the subject matter of a prolonged legal dispute. Depressed market conditions are expected to continue in the near term.
  5. The Company's Paperboards business, currently residing in its subsidiary, ITC Bhadrachalam Paperboards Ltd., will form part of the Paper & Packaging business group upon merger with the Company in accordance with the amalgamation plan detailed under Note(v) above.
  6. The Company's Agri Business is engaged in exports, supply of agri commodities to the planned Foods business and leaf tobacco to the Cigarettes business. The segment results have been impacted by difficult global trading conditions and the tobacco crop holiday.
  7. Segment capital employed shown above does not include unallocated corporate net assets including investments, of approximately Rs. 1680 Crores, largely deployed as follows:                    
    (a) Investments in ITC Bhadrachalam Paperboards:               (Rs. Crs.)
    Equity and Preference Capital                                                 342
    Loans                                                                                    258
    Total                                                                                     600
    (b) Exposures in assets consequent to exiting the                     
    Financial Services & Edible Oils businesses                            884


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 six months ended 30th September, 2001 in aggregate, which need to be explained.

Registered Office: For and on behalf of the Board
Virginia House, 37 J.L. Nehru Rd.
Kolkata - 700 071
Dated : 19th October, 2001 K.Vaidyanath
Place : Kolkata Director