SCHEDULES TO THE ACCOUNTS - ITC Limited · 31st March, 2002 31st March, 2001 (Rs. in Lakhs) (Rs. in Lakhs) 1. CAPITAL Authorised 30,00,00,000 Ordinary Shares of Rs. 10.00 each 3,00,00

52

SCHEDULES TO THE ACCOUNTS( Figures for the previous year have been rearranged to conformwith the revised presentation )

As at As at31st March, 2002 31st March, 2001

(Rs. in Lakhs) (Rs. in Lakhs)

1. CAPITAL

Authorised

30,00,00,000 Ordinary Shares of Rs. 10.00 each 3,00,00 3,00,00

Issued and Subscribed

24,54,14,904 Ordinary Shares of Rs. 10.00 each, fully paid 2,45,41 2,45,41

A) Of the above, following were allotted :

a) as fully paid up Bonus Shares –

37,90,000 in 1978-79 by Capitalisation of Capital Reserve, Share Premium Reserve and General Reserve;

45,48,000 in 1980-81 by Capitalisation of Capital Reserve and General Reserve;

3,31,68,110 in 1989-90 by Capitalisation of Capital Reserve, Share Premium Reserve, Export Promotion Reserve andGeneral Reserve;

3,98,01,732 in 1991-92 by Capitalisation of General Reserve;

12,13,18,177 in 1994-95 by Capitalisation of General Reserve.

b) as fully paid up Shares –

1,05,95,075 in 1991-92 consequent to the merger of Tribeni Tissues Limited to the Shareholders of Tribeni TissuesLimited.

B) The Company has granted 3,16,043 share options under the Employees’ Shares Option Scheme at the ruling marketprice on the date of grant of the option. Thirty percent of these options will vest on 30th May, 2002, a further thirtypercent on 30th May, 2003 and the balance on 30th May, 2004.

20,96,982 (2001-Nil) Ordinary Shares of Rs.10.00 each, fully paid, to be issued pursuant to Scheme of Amalgamation ofITC Bhadrachalam Paperboards Limited with the Company [See Schedule 19(i)].

1A. SHARE CAPITAL SUSPENSE

Share Capital Suspense 2,10 —

53

SCHEDULES TO THE ACCOUNTS

2. RESERVES AND SURPLUS

General Reserve

At commencement of the year 22,45,35 15,45,35

Less: Deferred Tax adjustment on initial adoption 51,64 —

21,93,71 15,45,35

Add: On amalgamation* 53,86 —

Add: From Profit and Loss Account 8,00,00 30,47,57 7,00,00 22,45,35

Debenture Redemption Reserve

At commencement of the year 55,50 52,50

Add: On amalgamation* 6,73 —

Add: From Profit and Loss Account 21,49 17,50

83,72 70,00

Less: To Profit and Loss Account 12,28 71,44 14,50 55,50

Share Premium


Add: On amalgamation* (including Rs. 1 Lakh receivedduring the year) 10,50 2,84,58 — 2,74,08

Capital Reserve


Add: On amalgamation* (including Rs. 9 Lakhs on forfeiture of shares during the year) 24 2,46 — 2,22

Revaluation Reserve


Less: To Profit and Loss Account

– Depreciation 94 59

– Disposal of Fixed Assets 1 62,50 4 63,45

Investment Allowance Reserve

At commencement of the year — 40

Less: To Profit and Loss Account — — 40 —

Hotel Foreign Exchange Earnings Reserve


Add: From Profit and Loss Account 3,00 6,00

9,00 60,01

Less: To Profit and Loss Account — 9,00 54,01 6,00

Contingency Reserve


Add: On amalgamation* 3,05 3,63,05 — 3,60,00

Profit and Loss Account 3,25,87 2,82,50

41,66,47 32,89,10

*Reserves (net of adjustments) taken over consequent to Scheme of Amalgamation of ITC Bhadrachalam Paperboards Limitedwith the Company [see Schedule 19 (i)].



54


3. SECURED LOANS

Debentures * ( Includes Rs. 1,21,00 Lakhs repayable within a yearconsidering exercise of call options) 1,42,87 1,21,00

Loans and Advances from BanksCash/Export Credit Facilities ** 36,37 4,09,77

Other Loans *** ( Includes Rs. 20,00 lakhs repayable within a year)

From Financial Institutions

Industrial Development Bank of India 15,00 30,00

The Industrial Finance Corporation of India 5,00 5,00

1,99,24 5,65,77

These comprise :

* (i) 1,00,00,000 (2001-1,00,00,000) 16.50% Non-Convertible Privately Placed Debentures of Rs. 100/- each, (amountoutstanding per Debenture lower and varying among debentureholders on account of repayments and prepayments),secured by equitable mortgage over certain immovable properties and charge over certain movable assetsof the Company subject to prior charges created/to be created in favour of Bankers for securing WorkingCapital requirements, redeemable at par in three equal yearly instalments, from 12th September, 2001 - Rs. 46,43Lakhs (2001 - Rs. 71,00 Lakhs).

* (ii) 5,000 14.50% Non-Convertible Privately Placed Debentures of Rs. 1,00,000/- each, secured by equitablemortgage of certain immovable properties of the Company redeemable at par on 3rd March, 2003 - Rs. 50,00 Lakhs(2001 - Rs. 50,00 Lakhs).

*(iii) 614 15% Non-Convertible Privately Placed Debentures of Rs. 5,00,000/- each, (amount outstanding per Debenture -Rs. 1,70,000/-) secured by equitable mortgage over certain immovable properties and charge over certain movableassets of the Company, ranking pari passu with the charge in respect of debentures shown under (iv), redeemable atpar in three annual instalments commencing 7th November, 2000 - Rs. 10,44 Lakhs (taken over on amalgamation).

*(iv) 1,200 11.90% Non-Convertible Privately Placed Debentures of Rs. 5,00,000/- each, (amount outstanding per Debenture- Rs. 3,00,000/-) secured by equitable mortgage over certain immovable properties and charge over certain movableassets of the Company, ranking pari passu with the charge in respect of debentures shown under (iii), redeemable atpar in five annual instalments commencing 8th December, 2000 with a call option on 8th December, 2002 and 8thDecember, 2003 - Rs. 36,00 Lakhs (taken over on amalgamation).

** Secured by charge over certain current assets of the Company, both present and future.

*** (i) Secured by equitable mortgage of certain immovable properties of the Company and charge over certain movableassets, both present and future, of the Company, subject to prior charges created/to be created in favour of Bankersfor securing Working Capital requirements - Rs. 15,00 Lakhs (2001 - Rs. 30,00 Lakhs).

*** (ii) Secured by hypothecation over certain movable fixed assets of the Company - Rs. 5,00 Lakhs (2001 - Rs. 5,00 Lakhs).

4. UNSECURED LOANS

Fixed Deposits 50,55 84,52

Short Term LoansFrom Banks

Term Loans — 46,62Promissory Notes — 1,60,00

Other LoansFrom other than Banks 34,75 2,03

85,30 2,93,17

Maximum amount of Commercial Paper outstanding at any time during the year was Rs. Nil (2001 – Rs. 50,00 Lakhs).



55


@ Original Cost/Professional Valuation as at 30th June, 1986

# Taken over on amalgamation consequent to Scheme of Amalgamation of ITC Bhadrachalam Paperboards Limited with the Company [See Schedule 19 (i)].

Land Freehold includes the provisional purchase price of Rs. 14,81 Lakhs in respect of land at Bangalore. Final purchase price is to be determinedby the Karnataka Industrial Areas Development Board, on settlement of which and on execution of a Sale Deed, title will pass to the Companyin 21 years from the date of agreement.

Land Freehold includes certain lands at Munger acquired by the Government under the Bihar Land Reforms Act, 1950 for which compensationhas not yet been determined.

Buildings Freehold include Rs. 34,83 Lakhs (2001- Rs. 33,34 Lakhs) (at original cost) of buildings at New Delhi on Government land taken onperpetual lease and Rs. 12 Lakhs (2001 - Rs. 28 Lakhs) (at original cost) of buildings at Kolkata on Port Trust land taken on lease.

Trademarks purchased Rs. 4,79 Lakhs (2001- Rs. Nil) under “ Trademarks & Goodwill “ are being amortised over 10 years.

Plant and Machinery includes Rs. 29,53 Lakhs being assets given on lease, taken over. These assets are depreciated over the balance oustandingprimary lease period, ranging between 16 months and 35 months.

Applications for exemption in respect of vacant land under the Urban Land (Ceiling and Regulation) Act, 1976 have been made.

Capital expenditure commitments are Rs. 2,11,71 Lakhs (2001 - Rs. 96,83 Lakhs).

Additions for the year include fluctuations in the rate of foreign exchange (net) of Rs. 1,88 Lakhs (2001 - Rs. 1,61 Lakhs) and borrowing costscapitalised Rs. Nil (2001- Rs. 82 Lakhs).

Depreciation for the year includes Rs. 94 Lakhs (2001 - Rs. 59 Lakhs) transferred from Revaluation Reserve.

* Includes certain properties for which deeds of conveyance are awaited.

5. FIXED ASSETS

Net Book Deprecia- Value

@As at @As at Deprecia- tion upto as atcommencement Amalgama- end of Depreciation tion on 31st March, 31st March,

of the year tion# Additions Withdrawals the year for the year Withdrawals 2002 2002(Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs)

Trademarks & Goodwill 4,90 — 4,79 — 9,69 3 — 3 9,66

Land Freehold * 2,41,79 1,69 8,50 — 2,51,98 — — — 2,51,98

Buildings Freehold * 4,88,53 96,38 37,56 47 6,22,00 14,31 45 1,03,14 5,18,86

Leasehold Properties 36,18 — — 52 35,66 16 52 1,74 33,92

Licensed Properties -Building Improvement 5,65 — 1,01 — 6,66 16 — 1,36 5,30

Railway Sidings etc. 1,17 — — — 1,17 5 — 43 74

Plant & Machinery 15,69,46 7,32,50 2,10,92 20,92 24,91,96 1,56,55 16,10 8,97,64 15,94,32

Capitalised software — — 29,53 — 29,53 5,58 — 5,58 23,95

Computers etc. 73,51 6,69 18,93 2,54 96,59 12,45 2,25 42,06 54,53

Furniture & Fixtures 85,21 11,57 38,11 86 1,34,03 9,54 57 45,05 88,98

Motor Vehicles etc. 15,53 1,32 6 1,60 15,31 56 90 4,87 10,44

25,21,93 8,50,15 3,49,41 26,91 36,94,58 1,99,39 20,79 11,01,90 25,92,68

Capital Work-in-Progress 1,46,15 29,14 3,87,54 1,75,56 3,87,27 — — — 3,87,27

Total 26,68,08 8,79,29 7,36,95 2,02,47 40,81,85 1,99,39 20,79 11,01,90 29,79,95

Previous Year 21,45,49 — 12,02,22 6,79,63 26,68,08 1,40,53 25,36 7,07,42 19,60,66

56

As at 31st March, 2002 As at 31st March, 2001(Rs. in Lakhs) (Rs. in Lakhs)

At Cost At CostQuoted Not Quoted Quoted Not Quoted

6. INVESTMENTS

Long Term

A. TRADE INVESTMENTS


Hotel Kathmandu Limited6,450 Shares of Nepalese Rs. 100.00 each, fully paid 5 5

International Travel House Limited2,87,600 Equity Shares of Rs. 10.00 each, fully paid 65 65

Surya Tobacco Company (P) Limited 2,74,400 Ordinary Shares of Nepalese Rs. 100.00 each, fully paid 89 89Gujarat Hotels Limited 17,33,907 Shares of Rs. 10.00 each, fully paid 1,94 1,94Hill Properties Limited 3 class ‘A’ Shares of Rs. 1,20,000.00 each, fully paid 4 4Modern Flats Private Limited 86 Preference Shares of Rs. 500.00 each, fully paid

(cost Rs. 43,000.00) … …Punjab Anand Batteries Limited (in liquidation)

11,86,157 Equity Shares of Rs. 10.00 each, fully paid - under Board for Industrial and Financial Reconstruction’s Order of 20.4.1989 * 1,19 1,19King Maker Marketing Inc. USA

100 Non Assessable Shares of Class B Cumulative Preferred Stockwithout par value 1 1

Andhra Pradesh Gas Power Corporation Limited 8,04,000 Equity Shares of Rs. 10.00 each, fully paid (Acquired on amalgamation) 2,32 —Cuffe Parade Sealord Co-operative Housing Society Limited 10 Shares of Rs. 50.00 each, fully paid (cost Rs. 500.00) (Acquired on amalgamation) … —Tulsiani Chambers Premises Co-operative Society Limited 5 Shares of Rs. 50.00 each, fully paid (cost Rs. 250.00) (Acquired on amalgamation) … —

B. SUBSIDIARY COMPANIESITC Bhadrachalam Paperboards LimitedNil (2001 - 3,62,36,549) Equity Shares of Rs. 10.00 each, fully paid

(1,78,61,389 shares purchased during the year; 5,40,97,938 sharesextinguished on amalgamation) — 1,88,69

Nil (2001 - 25,72,000 ) 11% Redeemable Cumulative Preference Shares of Rs. 100.00 each, fully paid (adjusted on amalgamation) — 25,72Gold Flake Corporation Limited (formerly All India Tobacco

Company Limited) 1,59,98,385 Ordinary Shares ofRs. 10.00 each, fully paid 16,00 16,00

Wills Corporation Limited (formerly Elan Enterprises Limited) 48,85,626 Ordinary Shares of Rs. 10.00 each, fully paid 4,88 4,88Russell Credit Limited 59,74,54,177 Equity Shares of Rs. 10.00 each, fully paid 6,19,29 6,19,29 7,54,22,400 Equity Shares of Rs. 10.00 each, Rs. 6.50 per share paid 39,22 39,22ITC Infotech Limited Nil (2001 - 6,85,815) Ordinary Shares of GBP 1.00 each, fully paid

(Sold during the year) — 3,15

Carried over 2,59 6,83,89 1,91,28 7,10,44

57

ITC Infotech India Limited 1,02,00,000 Equity Shares of Rs. 10.00 each, fully paid 10,14 10,14ITC Hotels Limited 2,15,24,360 Equity Shares of Rs. 10.00 each, fully paid 84,07 84,07Landbase India Limited

28,00,000 Equity Shares of Rs. 10.00 each, fully paid 9,57 9,57ITC Global Holdings Pte. Limited

89,99,645 Ordinary Shares of US$ 1.00 each, fully paid * 25,58 25,58BFIL Finance Limited

1,99,99,994 Equity Shares of Rs. 10.00 each, fully paid 20,00 —15,00,000 - 18.5% Non-Convertible Debentures of Rs. 10.00 each,renewed at 0% (Acquired on amalgamation) 15,00 —

C. DEPOSITS WITH OR FOR DEPOSIT WITH VARIOUS AUTHORITIESGovernment Securities (2002 - cost Rs. 8,500.00, 2001 - cost Rs. 40,000.00) … …

D. OTHER INVESTMENTSThe Bengal Chamber of Commerce & Industry 6 1/2% Registered Debentures, fully paid (cost Rs.17,000.00) … …Coffee Futures Exchange India Limited 1 Equity Share of Rs. 10,000.00 each, fully paid (cost Rs. 10,000.00) … …Unit Trust of India 100,000 (2001 - 50,000) Units of 1995 scheme of Rs. 100.00 each, fully paid (50,000 Units acquired on amalgamation) 1,04 52 36,14,213 (2001 - Nil) Units of US - 64 of Rs. 10.00 each, fully paid * (Acquired on amalgamation) 5,03 —Technology Development & Information Company of India LimitedVenture Capital Unit Scheme (1990) 4,480 (2001 - 3,360) Units of Rs. 100.00 each, fully paid

(1,120 Units acquired on amalgamation) 4 3APIDC - Venture Capital Fund (1990) 1,000 Units of Rs. 926.00 each, fully paid

(Acquired on amalgamation) 9 —The East India Clinic Limited 1/2% Registered Debentures, fully paid (cost Rs. 15,200.00) … … 5% Registered Debentures, fully paid 1 1Tribeni Tissues Co-op. Stores Limited 2,300 (2001 - 3,000) Class ‘B’ Shares of Rs. 10.00 each, fully paid (700 Shares redeemed during the year) (cost Rs. 23,000.00;

2001 - Rs. 30,000.00) … …Tourism Finance Corporation of India Limited 25,000 Equity Shares of Rs.10.00 each, fully paid 5 5State Bank of India

20,000 Redeemable Floating Interest Rate Bondof Rs. 1,000.00 each, fully paid (Sold during the year) — 2,00

ICICI Limited 7 1/4% Bonds in the nature of Promissory Note

(Sold during the year) — 2Total Long Term Investments (at cost) Carried over 86,66 7,70,44 2,75,35 7,58,36



6. INVESTMENTS (Contd.)


Brought forward 2,59 6,83,89 1,91,28 7,10,44

58

OTHER INVESTMENTS UTI Bond Fund - Income 5,04,20,731.423 (2001 - Nil) Units of Rs. 10.00 each

(Purchased during the year) 76,48 —Zurich India Liquidity Fund - Savings Plan - Growth 1,21,401.435 (2001 - Nil) Units of Rs. 10.00 each

(11,61,18,288.417 Units purchased and 11,59,96,886.982Units sold during the year) 14 —

Zurich India Liquidity Fund Saving Plan Weekly Dividend 10,07,176.791 (2001 - Nil) Units of Rs. 10.00 each

(49,00,55,220.634 Units purchased and 48,90,48,043.843Units sold during the year) 1,01 —

Birla Cash Plus Plan B: Growth 44,502.979 (2001 - Nil) Units of Rs. 10.00 each(4,76,76,642.763 Units purchased and 4,76,32,139.784Units sold during the year) 7 —

Pioneer ITI Treasury Management Account - Growth 1,750.686 (2001 - Nil) Units of Rs. 1000.00 each(3,58,089.235 Units purchased and 3,56,338.549Units sold during the year) 25 —

GCFG Grindlays Cash Fund - Growth Option1,415.112 (2001 - Nil) Units of Rs. 10.00 each (cost - Rs. 14,885.00)(1,79,75,300.851 Units purchased and 1,79,73,885.739Units sold during the year) … —

HDFC Liquid Fund - Growth 52,763.388 ( 2001 - Nil ) Units of Rs. 10.00 each

(37,44,196.495 Units purchased and 36,91,433.107Units sold during the year) 6 —

Total Current Investments — 78,01 — —Total of Quoted and Unquoted Investments 9,35,11 10,33,71Less : Provision for Long Term Investments * 28,18 26,77

TOTAL OF INVESTMENTS 9,06,93 10,06,94



6. INVESTMENTS (Contd.)


Current Brought forward 86,66 7,70,44 2,75,35 7,58,36

Total Market Value of Quoted Investments : 2002 - Rs. 1,07,60 Lakhs (2001 - Rs. 3,51,54 Lakhs)During the year, the following current investments were purchased and sold:(a) Treasury Bills of Face Value of Rs. 1,54,50 Lakhs(b) 65,43,09,315.699 Units of Templeton India Liquid Fund - Dividend Plan at cost of Rs. 6,54,74 Lakhs (c) 7,38,89,044.929 Units of Templeton India Liquid Fund - Growth Plan at cost of Rs. 1,03,10 Lakhs (d) 1,53,90,976.753 Units of Templeton India Government Securities Fund - Dividend Plan at cost of Rs 16,75 Lakhs (e) 22,34,23,398.753 Units of HDFC Liquid Fund - Dividend at cost of Rs. 2,23,81 Lakhs (f) 9,56,59,586.211 Units of Birla Cash Plus Plan A : Dividend - Reinvestment at cost of Rs. 1,20,23 Lakhs

(g) 5,02,798.583 Units of Alliance Cash Manager - Dividend at cost of Rs. 50,32 Lakhs (h) 3,62,368.732 Units of Alliance Cash Manager - Growth at cost of Rs. 50,00 Lakhs (i) 48,78,40,751.763 Units of GCFD Grindlays Cash Fund - Dividend Option at cost of Rs. 4,87,84 Lakhs (j) 7,14,27,271.363 Units of GSTG GSSIF - Short Term Plan - Growth Option at cost of Rs. 78,96 Lakhs (k) 4,99,65,273.27 Units of GSTD GSSIF - Short Term Plan - Dividend Option at cost of Rs. 50,30 Lakhs (l) 24,64,39,993.9744 Units of Kotak Mahindra Liquid Scheme - Dividend at cost of Rs. 2,46,76 Lakhs

(m) 4,85,04,657.677 Units of Prudential ICICI Short Term Plan - Cumulative Option at cost of Rs. 50,00 Lakhs (n) 62,76,75,077.703 Units of Prudential ICICI Liquid Plan - Dividend Option at cost of Rs. 7,42,30 Lakhs (o) 5,59,74,639.255 Units of Prudential ICICI Liquid Plan - Growth Option at cost of Rs. 77,65 Lakhs (p) 4,32,308.111 Units of Pioneer ITI Treasury Management Account - Weekly Dividend Reinvestment at cost of Rs. 50,17 Lakhs

59


(Rs. in Lakhs) (Rs. in Lakhs)7. INVENTORIES

Stores and Spare Parts 76,50 57,19Raw Materials 7,02,36 8,56,76Intermediates – Tissue Paper and Paper Board 18,42 3,64Stock in Process 11,49 5,81Finished Goods 3,71,50 2,21,23

11,80,27 11,44,63

8. SUNDRY DEBTORSOver 6 months old

Good and Secured 2,00 —Good and Unsecured – From Subsidiaries 6 —

– From Others 17,08 7,67Doubtful and Unsecured – From Subsidiaries 34,99 34,99

– From Others 58,81 55,57Other Debts

Good and Secured 8,33 2,71Good and Unsecured – From Subsidiaries 93 1,86

– From Others 1,66,23 93,30

2,88,43 1,96,10

Less : Provision for Doubtful Debts 93,80 90,56

1,94,63 1,05,54Less : Deposits from normal Trade Debtors – Contra 10,33 2,71

1,84,30 1,02,83

9. CASH AND BANK BALANCESWith Scheduled Banks

On Current Accounts etc. 29,75 31,14On Deposit Accounts (2001 – Rs. 25,000) 5,75 ...

With Other Banks* ... ...Cash and Cheques on hand 8,71 4,27

44,21 35,41

Rs. 5 Lakhs (2001 – Rs. 5 Lakhs) on deposit in Karachi-Blocked Account considered doubtful, fully provided.* Includes on Current Account Rs. 12,720/- (2001 – Rs. 12,720/-) with Post Office Savings Bank and maximum amount

outstanding at any time during the year was the same.

10. OTHER CURRENT ASSETSGood and partially secured

Deposit towards Property Options* 3,12,70 2,95,73Good and Unsecured

Deposits with Government, Public Bodies and Others@ 4,37,45 3,98,40Interest accrued on Loans, Advances etc. 5,53 2,16Interest accrued on Investments — 6

Doubtful and UnsecuredDeposits with Government, Public Bodies and Others 1,38 1,38

7,57,06 6,97,73Less : Provision for Doubtful Deposits 1,38 1,38

7,55,68 6,96,35

* Rs. 1,47,80 Lakhs (2001 – Rs. 1,47,80 Lakhs) secured against equitable mortgage of land.@ Deposit with subsidiary companies Rs. 2,52 Lakhs (2001 – Rs. 2,58 Lakhs).


60

SCHEDULES TO THE ACCOUNTSAs at As at

31st March, 2002 31st March, 2001(Rs. in Lakhs) (Rs. in Lakhs)

11. LOANS AND ADVANCES

Good and Secured

Loans to Others 1,38,50 1,04,00

Loans to Subsidiaries 15,00 2,64,00

Good and Unsecured

Loans to Subsidiaries 1,61,16 96,12

Loans to Others* 27,56 29,90

Advances recoverable in cash or in kind or for valueto be received ** 1,99,12 2,13,61

Advances with Government and Public Bodies 3,24,28 2,80,03

Advances with Subsidiaries** 47,53 60,65

Doubtful and Unsecured

Loans 7,36 7,36

Advances recoverable in cash or in kind or for valueto be received 9,10 9,39

Advances with Government and Public Bodies 55 55

9,30,16 10,65,61

Less : Provision for Doubtful Loans and Advances 17,01 17,30

9,13,15 10,48,31

* Includes Loans and Advances to Directors and to Secretary – Rs. 1,40 Lakhs (2001 – Rs. 1,44 Lakhs). The maximumindebtedness during the year was Rs. 1,44 Lakhs (2001 – Rs. 1,67 Lakhs).

** Includes Capital Advances of Rs. 1,31,74 Lakhs (2001 – Rs. 1,57,54 Lakhs).

12. LIABILITIES

Acceptances 8,29 1,58

Sundry Creditors*

Total outstanding dues of small scale industrial undertakings 1,59 1,08

Total outstanding dues of creditorsother than small scale industrial undertakings 15,73,10 12,07,94

Sundry Deposits** 43,90 33,77

Unclaimed Dividend 10,16 8,74

Interest Accrued but not due on Loans 7,67 8,02

16,44,71 12,61,13

Less : Deposits from normal Trade Debtors – Contra 10,33 2,71

16,34,38 12,58,42

* Includes amounts due to Subsidiary Companies Rs. 4,45 Lakhs (2001 – Rs. 4,23 Lakhs).

** Includes deposits from Subsidiary Company Rs. 20,25 Lakhs (2001 – Rs. 20,25 Lakhs).

61


13. PROVISIONS

Taxation (net of advance payment) 98,84 61,25

Provision for Retirement Benefits 13,15 11,56

Provision for Subsidiary 50,00 —

Proposed Dividend 3,34,14 2,45,42

Income Tax on Proposed Dividend — 25,03

4,96,13 3,43,26

14. DEFERRED TAX-NET

Deferred Tax Assets

On employees’ separation and retirement 7,68 —

On provision for doubtful debts/advances 31,83 —

On State and Central taxes etc. 2,40,27 —

Other timing differences 3,17 —

2,82,95 —

Deferred Tax Liabilities

On fiscal allowances on fixed assets 3,54,15 —

On fiscal relief realised on pre-deposit of excise duty 64,26 —

4,18,41 —

Deferred Tax-Net (1,35,46) —

For the year ended For the year ended31st March, 2002 31st March, 2001

15. OTHER INCOME (Rs. in Lakhs) (Rs. in Lakhs)

Miscellaneous Income 38,92 41,53

Licence Fees 6,00 12,00

Doubtful Debts, Claims and Advances – previous years 76 31

Gain on Exchange – Net 4,79 2,21

Income from Long Term Investments – Trade 4,08 6,00

– Subsidiary 2,15 2,15

– Others 55 6,78 44 8,59

Income from Current Investments – Others 10,73 4,76

Interest on Loans and Deposits etc. 53,16 46,62

Profit on Sale of Long Term Investments 3,72 —

Profit on Sale of Current Investments – Net 2,90 —

Liability no longer required Written Back* 14,59 28,45

1,42,35 1,44,47

The Income from Investments and Interest are stated Gross, the amount of Income Tax deducted is Rs. 4,64 Lakhs(2001 – Rs. 8,74 Lakhs).

* Includes Rs. Nil (2001 – Rs. 23,16 Lakhs) written back following fulfilment of export obligation relating to EPCG licenses.



62

16. RAW MATERIALS ETC.

(a) RAW MATERIALS CONSUMEDOpening Stock 8,88,20* 6,76,00Purchases 13,97,37 14,97,62

22,85,57 21,73,62

Less : Closing Stock 7,02,36 15,83,21 8,56,76 13,16,86

(b) PURCHASES AND CONTRACT MANUFACTURING CHARGES

Cigarettes 8,83 34,30

Agri Products 3,61,67 1,34,37

Other Goods 23,48 21,55

Packing Materials 14,77 4,08,75 10,71 2,00,93

(c) (INCREASE)/DECREASE IN FINISHED GOODS,INTERMEDIATES, STOCK IN PROCESS

Opening Stock

Cigarettes 1,65,04 1,61,88

Smoking Tobaccos 27 19

Printed Materials 2,32 2,71

Agri Products 18,25 23,13

Paper – Speciality Paper 5,03 3,90

Paperboards 29,82** —

Other Goods 29,15 1,53

Packing Materials 1,17 64

Intermediates – Tissue Paper and Paperboards 3,64 2,31

Stock in Process 11,42*** 2,40

2,66,11 1,98,69

Closing StockCigarettes 2,31,44 1,65,04Smoking Tobaccos 21 27Printed Materials 2,17 2,32Agri Products 78,07 18,25Paper – Speciality Paper 4,05 5,03Paperboards 24,29 —Other Goods 28,50 29,15Packing Materials 2,77 1,17Intermediates – Tissue Paper and Paperboards 18,42 3,64Stock in Process 11,49 5,81

4,01,41 (1,35,30) 2,30,68 (31,99)

Total 18,56,66 14,85,80

Less : Waste Material Sales 3,07 5,11

18,53,59 14,80,69

Excise Duties etc. on Increase/(Decrease) of Finished Goods 36,83 11,68

18,90,42 14,92,37

* Includes Raw Materials Rs. 31,44 Lakhs,** Includes Paperboards Rs. 29,82 Lakhs,

*** Includes Stock in Process Rs. 5,61 Lakhs,taken over consequent to Scheme of Amalgamation of ITC BhadrachalamPaperboards Limited with the Company [see Schedule 19 (i)].

SCHEDULES TO THE ACCOUNTSFor the year ended For the year ended

31st March, 2002 31st March, 2001(Rs. in Lakhs) (Rs. in Lakhs)

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SCHEDULES TO THE ACCOUNTSFor the year ended For the year ended

31st March, 2002 31st March, 2001(Rs. in Lakhs) (Rs. in Lakhs)17. MANUFACTURING, SELLING ETC. EXPENSES

Salaries/Wages and Bonus 2,10,44 1,86,05Contribution to Provident and Other Funds 41,17 29,46Workmen and Staff Welfare Expenses 31,34 32,07Reimbursement of contractual remuneration 28,10 3,11,05 26,85 2,74,43Consumption of Stores and Spare Parts 90,87 64,94Power and Fuel 1,18,96 74,23Rent 29,62 19,87Rates and Taxes 19,96 12,80Insurance 23,62 15,13Repairs

– Buildings 24,84 15,65– Machinery 28,36 17,32– Others 15,48 15,58

Outward Freight and Handling Charges 1,41,45 96,33Advertising/Sales Promotion – Net 1,80,09 1,83,32Market Research 15,87 12,69Doubtful and Bad Debts 2,01 3,81Doubtful and Bad Advances, Deposits etc. 25 3Electronic Data Processing 21,09 13,77Travelling and Conveyance 57,78 50,45Training 8,00 8,58Legal Expenses 10,29 5,29Postage, Telephone, Telex, etc. 20,17 15,26Brokerage and Discount – Sales 2,58 1,74Commission to Selling Agents 9,34 2,34Loss on Sale of Current Investments – Net — 2,45Bank Charges 6,35 4,66Interest etc. Paid – Debenture, Term Loans and Fixed Deposits 40,47 61,37

– Others 30,89 34,46– Discount on Issue of Financial Instruments — 88

Less : Interest Received on Trading Debts,Deposits with Government Bodies etc. 4,45 66,91 80 95,91

Miscellaneous Expenses 1,46,95 1,44,66Fixed Assets and Stores Discarded – Net 6,74 4,30Provision for diminution in value of Long Term Investments 1,41 —

13,60,04 11,55,54Deduct : Transfers to Fixed Assets etc. Accounts 27,59 35,56

13,32,45 11,19,98Miscellaneous Expenses include :(1) Contribution to Prime Minister’s Relief Fund — 5,00(2) Auditors’ Remuneration and Expenses :

Audit Fees 79 65Tax Audit Fees 18 18Fees for Other Services 45 40Reimbursement of Expenses 7 9

(3) Remuneration and Expenses of Auditors of erstwhile ITC-BPL :Fees for audit of the erstwhile ITC-BPL 8 —Fees for Other Services 3 —Reimbursement of Expenses (Rs. 36,350) … —

(4) Cost Auditors’ Fee (2001 - Rs. 48,300) 1 …(5) Consultancy/Professional Fees 42,00 38,00

Interest received on Trading Debts, Deposits with Govt. Bodies etc. is stated Gross, the amount of Income Tax deducted isRs. 1,42 Lakhs (2001 - Rs. 50 Lakhs).

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19. NOTES TO THE ACCOUNTS

(i) Amalgamation of ITC Bhadrachalam Paperboards Limited with the Company :

(a) In accordance with the Scheme of Amalgamation of the erstwhile ITC Bhadrachalam Paperboards Limited (ITCBhadrachalam) with the Company as approved by the members at a meeting convened by the Hon’ble High Courtat Calcutta held on 7th December, 2001, and subsequently sanctioned by the Hon’ble High Courts at Calcutta andHyderabad on 24th January, 2002 and 8th February, 2002, respectively, the assets and liabilities of ITC Bhadrachalamwere transferred to and vested in the Company with effect from 1st April, 2001. The Scheme has accordingly beengiven effect to in these accounts.

(b) The operations of ITC Bhadrachalam include the manufacture and sale (including exports) of paper and paperboards.

(c) The Amalgamation has been accounted for under the 'pooling of interests' method as prescribed by AccountingStandard 14 issued by The Institute of Chartered Accountants of India. Accordingly, the assets, liabilities and reservesof ITC Bhadrachalam as at 1st April, 2001 have been taken over at their book values subject to adjustments effectedfor differences in the accounting policies between the two companies and/or as specified in the Scheme of Amalgamation.Accordingly, Rs. 43,24 Lakhs has been debited to the General Reserve taken over.

(d) As per the Scheme of Amalgamation, 5,40,97,938 Equity Shares of Rs. 10/- each of ITC Bhadrachalam held by theCompany including 1,78,61,389 Equity Shares acquired during the year from its wholly owned subsidiary, RussellCredit Limited, stand cancelled. In terms of the Scheme of Amalgamation, the Share Premium Account of ITCBhadrachalam has been taken over after reducing the cost of investments of the Company in the Equity Shares of ITCBhadrachalam.

(e) Pursuant to the Scheme of Amalgamation, and after considering the extinguishment of shares held in ITC Bhadrachalamby the Company, 20,96,982 Ordinary Shares of Rs. 10/- each of the Company are to be issued to the shareholders ofITC Bhadrachalam in the ratio of 1(one) fully paid-up Ordinary Share of the Company for every 16 (sixteen) fully paid-up Equity Shares of Rs. 10/- each in ITC Bhadrachalam. Notices have been given to the Stock Exchanges where theCompany’s Ordinary Shares are listed fixing 17th April, 2002 as the record date for this purpose. Pending allotment,an amount of Rs. 2,10 Lakhs has been included in the Share Capital Suspense Account as at 31st March, 2002 (Schedule1A).

(f) In view of the aforesaid amalgamation with effect from 1st April, 2001, the figures for the current year are notcomparable to those of the previous year.

(ii) Exchange difference in respect of forward exchange contracts to be charged or capitalised in the subsequent accountingperiod amounts to Rs. 29 Lakhs (2001 - Rs. 19 Lakhs).

(iii) The Judicial Managers of ITC Global Holdings Pte. Ltd., Singapore (ITC Global), a wholly owned subsidiary of the Company,have indicated claims from the creditors of that Company of around US$ 50 million (apart from the debt of approximatelyUS$ 10 million owed by ITC Global to ITC) for which the Board does not accept any legal liability. Without prejudice tothe legal rights of the Company and purely for goodwill and with the intention of protecting Company's future businessinterest in the fast-globalising economy, the Company has proposed rendering financial assistance to the tune of US$26 million to the Judicial Managers subject to the Shareholders' consent and all necessary approvals from all Governmentand other authorities, both at Singapore, and in India, including the Reserve Bank of India, and also subject to concludinga comprehensive Agreement between the Company and the Judicial Managers in this regard, which is pending finalisation.



(Rs. in Lakhs) (Rs. in Lakhs)18. PROVISION FOR TAXATION

Current Tax 5,18,38 6,35,66Deferred Tax [see Schedule 19 (viii)] 83,82 —

6,02,20 6,35,66Less : Adjustments related to previous years – Net 11,66 41,62

5,90,54 5,94,04

(iv) (a) Claims against the Company not acknowledged as debts Rs. 1,21,87 Lakhs (2001 – Rs. 70,29 Lakhs).

(b) Bills of Exchange discounted Rs. 6,34 Lakhs (2001 – Rs. 8 Lakhs).

(c) Guarantees and Counter Guarantees outstanding

– Excise Rs. 3,30 Lakhs (2001 – Rs. 6,03 Lakhs).

– Others Rs. 1,23,51 Lakhs (2001 – Rs. 68,05 Lakhs).

(d) Uncalled liability on shares partly paid Rs. 26,40 Lakhs (2001 – Rs. 26,40 Lakhs).

(v) Earnings per share 2002 2001

Earnings per share has been computed as under :

(a) Profit after Taxation (Rs. Lakhs) 11,89,72 10,06,26

(b) Number of Ordinary Shares outstanding 24,54,14,904 24,54,14,904

(c) Number of shares in Share Capital Suspense 20,96,982 —

(d) Total (b) + (c) 24,75,11,886 24,54,14,904

(e) Earnings per share (Face value Rs. 10/- per share ) (a)/(d) Rs. 48.07 Rs. 41.00(Basic and diluted)

(vi) Voluntary Retirement Schemes are in existence for certain non-management employees under which compensationbecomes due and payable in instalments after voluntary retirement. The future liability in respect of such employees whohave left, on fulfilment of the stipulated conditions, not provided for, would amount to Rs. 34 Lakhs (2001 -Rs. 72 Lakhs).

(vii) The status on excise matters which is treated as an annexure to these accounts are as outlined in this year's Reportof the Directors under the Excise section. In the opinion of the Directors, the Company does not accept any furtherliability.

(viii) The Company has, during the year, adopted Accounting Standard 22 – Accounting for Taxes on Income issued by theInstitute of Chartered Accountants of India. Consequently, the Company recorded the cumulative net deferred tax liabilityas at 31st March, 2001 of Rs. 51,64 Lakhs as a reduction to General Reserve on 1st April, 2001.

(ix) Research and Development expenses for the year amount to Rs. 7,52 Lakhs (2001 - Rs. 6,07 Lakhs).

(x) Retirement Benefits in respect of Pension, Gratuity etc. are provided for based on Actuarial Valuations as at the BalanceSheet date.

(xi) The names of small scale industrial undertakings to whom the Company owes a sum exceeding Rs. 1 Lakh which isoutstanding for more than 30 days as at the Balance Sheet date are RSP Engineers, Karthik Printing Inks Co. Ltd., JaishreePackaging, APJ Printers & Packers, Studio Print Art, Autographics Digital (Pvt) Ltd. and National Poster Co.

(xii) The Company's significant leasing arrangements are in respect of operating leases for premises (residential, office, stores,godowns etc.). These leasing arrangements which are not non-cancellable range between 11 months and 9 years generally,or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payableare charged as Rent under Schedule 17.

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(xiii) DIRECTORS’ REMUNERATION

Salaries 1,56 1,71

Performance Bonus to Wholetime Directors 78 85

Other Benefits 38 66

Commission, etc. to Non-Wholetime Directors 27 29*

Directors’ Fees 9 11

3,08 3,62

The above :

a) Excludes contribution to the approved group pension and gratuity funds which are actuarially determined on anoverall basis.

b) Includes Rs. 2 Lakhs for the period 13th March, 2002 to 31st March, 2002 in respect of a director whose appointmentand remuneration are subject to the approval of the members at the forthcoming Annual General Meeting.

* Against the said provision of Rs. 29 Lakhs, actual amount paid during the current year is Rs. 27 Lakhs.

Computation of Net Profit and Directors’ Commission

Profit before Taxation 17,80,26 16,00,30

Add :

Directors’ Remuneration 3,08 3,62

Wealth Tax - Net 33 14

Depreciation 1,98,45 1,39,94

Provision for diminution in value of Long Term Investments 1,41 2,03,27 — 1,43,70

19,83,53 17,44,00

Less :

Profit on Sale of Long Term Investments 3,72 —

Depreciation under Section 350 of the Companies Act, 1956 2,00,01 2,03,73 1,34,85 1,34,85

Profit for the purpose of Directors’ Commission 17,79,80 16,09,15

Non-Wholetime Directors’ Commission @ 1% 17,80 16,09

Restricted to 27 29

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(xiv) ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3, 4C AND 4D OF PART II OFSCHEDULE VI OF THE COMPANIES ACT, 1956.

(a) Licensed and Installed Capacity and Actual Production

a) The “Registered/Licensed Capacity” is exclusive of additional capacity of 25% permissible under the policy of theGovernment of India.

b) This is in accordance with the Registration Certificate which was re-endorsed on 27th October, 1984 and 7th October,1991 by the Government of India.

c) Includes production meant for internal consumption.

d) The entire production of pulp is meant for internal consumption.

e) Installed capacities of the year include those vested in the Company pursuant to the Scheme of Amalgamation with ITCBhadrachalam Paperboards Limited [see Schedule 19 (i)].

Smoking, Redried and Unredried Tobacco are not items covered by the Industries (Development & Regulation) Act, 1951or any other regulatory provisions.

N.A. - Not Applicable

(b) Particulars in respect of Sales*


* Net of Sales Returns and Damaged Stocks etc.

Unit of Quantity CAPACITY PRODUCTION

Class of Goods Registered/Licensed (a) Installed

2002 2001 2002 2001 2002 2001

Cigarettes Million 53,797 (b) 53,797 (b) 80,286 80,286 53,551 55,879Smoking Tobaccos Tonne N.A. N.A. N.A. N.A. 70 119Printing/Packaging(Tiruvottiyur) Tonne 12,600 12,600 16,175 16,175 9,748 (c) 16,831 (c)Printing (Munger) Million 385 385 482 482 101 (c) 120 (c)

Standard SheetImpression

Redried Tobacco Tonne N.A. N.A. N.A. N.A. 26,324 (c) 72,007 (c)Pulp Tonne N.A. N.A. 52,000 (e) 11,000 61,889 (d) N.A. (d)Paperboards and Paper Tonne N.A. N.A. 2,12,500 (e) 33,000 2,29,762 (c) 19,122 (c)

Unit of QUANTITY VALUEQuantity (Rs. in Lakhs)

2002 2001 2002 2001Cigarettes Million 60,865 66,478 80,13,58 76,76,63

Smoking Tobaccos Tonne 71 118 6,90 6,82

Unmanufactured Tobaccos Tonne 20,531 24,270 1,94,04 2,08,94

Printed Materials Tonne 4,063 6,706 45,32 65,93

Agri Products Tonne 6,49,920 2,78,965 7,02,59 3,61,93

Marine Products Tonne 1,693 1,905 70,95 1,07,23

Paper-Speciality Paper Tonne 16,353 16,128 1,13,42 1,12,48

Paperboards and Paper Tonne 1,82,644 — 5,09,01 —

Hotel Sales/Income from Services 1,60,28 1,37,53

Miscellaneous (Branded Garments,Greeting Cards, etc.) 24,00 5,15

98,40,09 86,82,64

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Unit of ValueQuantity Quantity (Rs. in Lakhs)

(c) Details of Finished Goods 2002 2001 2002 2001(i) Opening Stock*

Cigarettes Million 1,961 2,066 1,65,04 1,61,88Smoking Tobaccos Tonne 3 3 27 19Printed Materials Tonne 426 416 2,32 2,71Agri Products Tonne 10,921 12,647 18,25 23,13Paper - Speciality Paper Tonne 830 667 5,03 3,90Paperboards and Paper* Tonne 9,416 — 29,82 —Other Goods 29,15 1,53Packing Materials 1,17 64

2,51,05 1,93,98(ii) Closing Stock

Cigarettes Million 2,505 1,961 2,31,44 1,65,04Smoking Tobaccos Tonne 2 3 21 27Printed Materials Tonne 287 426 2,17 2,32Agri Products Tonne 1,13,577 10,921 78,07 18,25Paper - Speciality Paper Tonne 647 830 4,05 5,03Paperboards and Paper Tonne 9,038 — 24,29 —Other Goods 28,50 29,15Packing Materials 2,77 1,17

3,71,50 2,21,23(iii) Purchases and Contract

Manufacturing ChargesCigarettes Million 7,940 10,636 8,83 34,30Agri Products Tonne 4,48,296 1,08,718 3,61,67 1,34,37Other Goods 23,48 21,55Packing Materials 14,77 10,71

4,08,75 2,00,93* 2002 includes 9,416 tonnes of Paper and Paperboard (Rs. 29,82 Lakhs) taken over consequent to Scheme of Amalgamation of ITC Bhadrachalam Paperboards Limited with the Company [see Schedule 19(i)].

(d) Details of Raw Materials Consumed during the year*Unmanufactured Tobaccos Tonne 75,968 93,109 4,46,94 4,30,97New Jute Cuttings Tonne — 537 — 56Waste Paper and Pulp Tonne 1,56,729 17,645 1,82,27 55,30Hardwood and Bamboo BDT** 1,65,428 — 43,83 —Agri Products Tonne 3,15,449 1,73,323 3,32,76 1,84,40Board Tonne 27,747 40,349 1,32,20 1,99,59Filter Rods Million 8,087 8,835 86,63 91,44Aluminium Foil/Metallised Paper Bobbin 5,23,036 5,26,952 42,21 46,64BOPP/Viscose Film Tonne 1,522 1,652 21,97 25,16Chemicals for Paperboards and Paper 1,07,18 17,92Miscellaneous 1,87,22 2,64,88

15,83,21 13,16,86* Relates to the Company’s main products and the principal raw materials.** BDT-Bone Dry Tonne

(e) Value of Raw Materials, Spare Parts and ValueComponents Consumed during the year (Percentage) (Rs. in Lakhs)

2002 2001 2002 2001Raw Materials

Imported 18.86 14.23 2,98,61 1,87,39Indigenous 81.14 85.77 12,84,60 11,29,47

100.00 100.00 15,83,21 13,16,86Spare Parts and Components

Imported 45.01 37.48 40,90 24,34Indigenous 54.99 62.52 49,97 40,60

100.00 100.00 90,87 64,94


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(f) Earnings etc. in Foreign Exchange during the year 2002 2001


Export of Goods (F.O.B. – Realisation Basis) 8,25,78 5,83,80

Interest — 1,37

Dividend 2,09 4,39

Hotel Earnings* 90,69 84,39

Other Earnings 29,01 23,09

Proportionate share of Advertisement Expenses — 9

9,47,57 6,97,13

* Includes Rs. 72,23 Lakhs (2001 – Rs. 64,89 Lakhs) being earnings during the year through International Credit Cards, TravelAgencies, Foreign Airlines etc.

(g) Value of Imports during the year (C.I.F. Basis)

Raw Materials 2,40,01 1,39,15

Components and Spare Parts 28,52 17,80

Capital Goods 1,08,24 60,19

Other Goods (including imports under eligible Export House Scheme) 35,81 88

4,12,58 2,18,02

(h) Expenditure/Loans in Foreign Currency during the year

(on payment basis)

Professional Fees 5,11 7,72

Advertising/Sales Promotion 44 8,21

Export Promotion Expenses 3,50 2,34

Training 2,43 1,77

Hotel Reservation/Marketing Expenses 4,02 4,07

Interest — 5,12

Licence Fees 65 45

Miscellaneous Expenditure 6,77 11,33

Loans — 70,04

22,92 1,11,05

(i) Remittances in Foreign Currencies on account of Dividends

Financial On Account of No. of No. of (Rs. in Lakhs)Year Shares Non-Resident

held Shareholders

2001/2002 2000/2001 9,11,75,972 90 91,18

2000/2001 1999/2000 9,12,03,360 99 68,40

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SCHEDULES TO THE ACCOUNTS20. SEGMENT REPORTING

PRIMARY SEGMENT INFORMATION (BUSINESS SEGMENTS) (Rs. in Lakhs)

Paperboards,FMCG FMCG FMCG Hotels Agri Paper and Segment Elimination Consolidated

Cigarettes Others Total Business Packaging Total Total1. Segment Revenue

— External Sales 80,20,92 21,63 80,42,55 1,60,28 9,67,75 6,69,51 98,40,09 — 98,40,09— Inter Segment Sales — 43 43 2,10 1,80,03 3,61,50 5,44,06 (5,44,06) —Total Revenue 80,20,92 22,06 80,42,98 1,62,38 11,47,78 10,31,01 1,03,84,15 (5,44,06) 98,40,09

2. Segment Result 16,93,11 (73,44) 16,19,67 (50) 10,97 1,62,17 17,92,31 17,56 18,09,87— Unallocated corporate expenses net of unallocated income 38,58Profit before interest, etc. and taxation 17,71,29— Interest etc. paid – Net 66,91— Interest on loans and deposits, income from current and long term investments, profit and loss on sale of investments etc. 75,88— Provision for Taxation 5,90,54

3. Profit after Taxation 11,89,72Other Information1. Segment Assets 23,34,56 69,62 24,04,18 8,54,91 4,80,48 13,25,41 50,64,98 50,64,98

— Unallocated corporate assets 21,82,46Total Assets 72,47,44

2. Segment Liabilities* 6,99,91 11,62 7,11,53 72,51 67,73 1,32,92 9,84,69 9,84,69 — Unallocated corporate liabilities 18,48,77

Total Liabilities 28,33,463. Capital Expenditure 1,39,00 31,53 1,70,53 1,99,90 9,31 1,72,32 5,52,064. Depreciation 91,38 1,17 92,55 18,66 12,48 65,45 1,89,145. Non Cash expenditure

other than depreciation 2,16 (12) 2,04 1,02 1,42 2,22 6,70

* Segment Liabilities of FMCG - Cigarettes is before considering provision of Rs. 5,89,00 Lakhs in respect of disputed State Taxes, the levy/collectionof which has been stayed. These have been included under ‘Unallocated corporate liabilities’.

SECONDARY SEGMENT INFORMATION (GEOGRAPHICAL SEGMENTS)

1. Segment Revenue— Within India 89,35,16— Outside India 9,04,93Total Revenue 98,40,09

2. Segment Assets— Within India 50,62,67— Outside India 2,31Total Assets 50,64,98

3. Capital Expenditure— Within India 5,52,06— Outside India —Total Capital Expenditure 5,52,06

NOTES(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, Paperboards, Paper & Packaging and Agri Business. The Company’s organisational structureand governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them.

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SCHEDULES TO THE ACCOUNTS(2) The business groups comprise the following :

FMCG : Cigarettes — Cigarettes and Smoking mixtures.: Others — Branded Garments, Greeting Cards & Gifts and Branded Packaged Foods.

Hotels — Hoteliering.Paperboards, Paper and Packaging — Paperboards, Paper including Speciality Paper & Packaging.Agri Business — Agri commodities such as rice, soya, wheat, coffee and leaf tobacco.

(3) The geographical segments considered for disclosure are :— Sales within India— Sales outside India

(4) The Branded Garments, Greeting Cards & Gifts and Branded Packaged Foods businesses are presently engaged in product development andscaling up of operations. Accordingly segment results largely reflect start up and business development costs.

(5) 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. 782 Crores includes Rs. 676 Crores relating to the recently opened hotels, namely ITC One in New Delhi and ITC GrandMaratha in Mumbai, as well as capital work-in-progress in respect of hotels under construction.The segment results reflect the gestation costs of the newly opened hotels, the impact of the global slump in international travel post the11th September / 13th December events and the holding cost in respect of Searock Sheraton which has been the subject matter of a prolongedlegal dispute. Depressed market conditions are expected to continue in the short term.

(6) The Paperboards, Paper and Packaging segment incorporates the impact of the amalgamation of the erstwhile ITC Bhadrachalam PaperboardsLimited with the Company effective 1st April, 2001.

(7) The Company’s Agri Business exports agri commodities, supplies agri raw materials to the Branded Packaged Foods business and sources leaftobacco for the Cigarettes business. The segment results were impacted by the tobacco crop holiday and difficult global trading conditions,particularly relating to exports of marine products which were adversly effected by the economic down turn in the U.S. and Japan.

(8) Unallocated corporate assets include Rs. 881 Crores of legacy assets acquired by the Company as part and parcel of the schemes facilitatingexit from the Financial Services and Edible Oils businesses in 1997.

21. RELATED PARTY DISCLOSURES

1. ENTERPRISES WHERE CONTROL EXISTS :i) Subsidiaries :

a) ITC Hotels Limited and its subsidiariesSrinivasa Resorts LimitedFortune Park Hotels LimitedBay Islands Hotels Limited

b) Russell Credit Limited and its subsidiaryGreenacre Holdings Limited

c) ITC Infotech India Limited and its subsidiariesITC Infotech LimitedITC Infotech (USA), Inc.

d) Wills Corporation Limitede) Gold Flake Corporation Limitedf) Landbase India Limitedg) BFIL Finance Limited and its subsidiary

MRR Trading & Investment Company LimitedThe above list does not include :a) ITC Global Holdings Pte. Limited, Singapore and its subsidiaries

Hup Hoon Traders Pte. Ltd., SingaporeHup Hoon Shipping Pte. Ltd., SingaporeChai Fu Trading Pte. Ltd., SingaporeAOZT “Hup Hoon”, MoscowHup Hoon Impex Srl, RomaniaFortune Tobacco Co. Ltd., CyprusFortune Tobacco Company, Inc., USAbeing under Judicial Management, and

b) BFIL Securities Limited (a subsidiary of BFIL Finance Ltd.)which is under voluntary winding up proceedings.

ii) Other entities under control of the Company :a) ITC Sangeet Research Academyb) ITC Education Trustc) ITC Rural Development Trust

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2. OTHER RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS, etc.i) Associates & Joint Ventures :

Associatesa) Ansal Hotels Limitedb) Gujarat Hotels Limitedc) Megatop Financial Services and Leasing Limitedd) Newdeal Finance and Investment Limitede) Peninsular Investments Limitedf) Russell Investments Limitedg) Asia Tobacco Company Limitedh) Maharaja Heritage Resorts Limitedi) Classic Infrastructure & Development Limitedj) International Travel House Limitedk) Tobacco Manufacturers (India) Limited, UK

Joint Venturesa) Surya Tobacco Company (P) Limitedb) ITC Filtrona Limitedc) King Maker Marketing Inc., USA

ii) Key Management Personnel :Y.C. Deveshwar Executive ChairmanA. Singh Executive DirectorK. Vaidyanath Executive DirectorS.S.H. Rehman Executive DirectorM.V. Muthu Non-Executive DirectorY.P. Gupta Non-Executive DirectorC.R. Green Non-Executive DirectorP.B. Ramanujam Non-Executive DirectorB. Sen Non-Executive DirectorRam S. Tarneja Non-Executive DirectorR. Vasudevan Non-Executive DirectorB. Vijayaraghavan Non-Executive DirectorAjeet Prasad Non-Executive DirectorJ.B. Stevens Non-Executive DirectorA.C. Ahuja Non-Executive DirectorB.G. Daga Non-Executive DirectorA.A.F. Rodrigues Non-Executive DirectorK.S. Vaidyanathan Member - Corporate Management CommitteeA. Nayak Permanent Invitee - Corporate Management CommitteeR. Srinivasan Permanent Invitee - Corporate Management Committee

iii) Employees’ Benefit Plans where there is significant influence :a) IATC Provident Fundb) IATC Staff X Provident Fundc) ITC Management Staff Gratuity Fundd) ITC Gratuity Funde) ITC Gratuity Fund ‘B’f) ITC Gratuity Fund ‘C’g) ITC Pension Fundh) ILTD Seasonal Employees Pension Fundi) ITC Platinum Jubilee Pension Fund


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3. DISCLOSURE OF TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES AND THE STATUS OF OUTSTANDINGBALANCES AS ON 31ST MARCH, 2002

(Rs. in Lakhs)Enterprises where control exists Associates & Key Management Employee

Subsidiaries Others Joint Ventures Personnel & TrustsRelatives

1. Sale of Goods / Services 3,67 65,742. Purchase of Goods / Services 25,31 87,023. Acquisition cost of Fixed Assets 4,73

(including project consultancy fees, etc.)4. Sale of Fixed Assets 605. Purchase of Investments 1,27,46

(Purchase of equity shares of ITC BhadrachalamPaperboards Limited from Russell Credit Limited)

6. Sale of Investments 6,87(Sale of equity shares of ITC Infotech Limited toITC Infotech India Limited)

7. Interest Income 4,14 14,10 58. Remuneration to Key Management Personnel

— Directors [see Schedule 19 (xiii)] 3,08— Others 99

9. Rent Paid (Rs. 40,000) ...10. Reimbursement of Contractual Remuneration 28,1011. Remuneration of managers on deputation

recovered 1812. Donations 2,5013. Contributions to Employees’ Benefit Plans 25,5114. Dividend income 2,15 4,0815. Dividend payments (for the year 2001) 66,19 116. Expenses recovered 81 3217. Expenses reimbursed 36 1418. Loans Given 1,60,30 34,5019. Receipts towards Loan Repayment 1,29,50 520. Advances Given 1,7521. Receipts towards refund of Deposits 4322. Receipts towards refund of Advances 9023. Balances as on 31st March, 2002

i) Debtors/Receivables 1,28 6,20ii) Advances Given 47,53 10,90iii) Loans Given 1,76,16 1,38,50 1,43iv) Deposits with (including Deposits towards 2,52 1,55,02 4

Property Options)v) Deposits From 20,25vi) Creditors / Payables 4,45 23,75vii) Investments in Non-Convertible Debentures 15,00

24. Provision for subsidiary (made in earlier years) 50,00as on 31st March, 2002

25. In addition, remuneration of managers ondeputation, absorbed 7 66

Note : Mr. S. S. H. Rehman, a Wholetime Director of the Company, is the Managing Director of ITC Hotels Limited and his aggregate remunerationfor the year of Rs. 57 Lakhs is borne by the Company (included in 8 above).


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22. SIGNIFICANT ACCOUNTING POLICIES

IT IS CORPORATE POLICY

ConventionTo prepare financial statements in accordance withapplicable Accounting Standards in India. Asummary of important accounting policies, whichhave been applied consistently, is set out below.The financial statements have also been preparedin accordance with relevant presentationalrequirements of the Companies Act, 1956.

Basis of AccountingTo prepare financial statements in accordance withthe historical cost convention modified byrevaluation of certain Fixed Assets as detailed below.

Fixed AssetsTo state Fixed Assets at cost of acquisition inclusiveof inward freight, duties and taxes and incidentalexpenses related to acquisition. In respect of majorprojects involving construction, related pre-operational expenses form part of the value of assetscapitalised. Expenses capitalised also includeapplicable borrowing costs. To adjust the originalcost of Fixed Assets acquired through foreigncurrency loans at the end of each financial year byany change in liability arising out of expressing theoutstanding foreign loan at the rate of exchangeprevailing at the date of Balance Sheet.

To capitalise software where it is expected to providefuture enduring economic benefits. Capitalisationcosts inc lude l icense fees and costs ofimplementation / system integration services. Thecosts are capitalised in the year in which the relevantsoftware is implemented for use.

All upgradation/enhancements are generally chargedoff as revenue expenditure unless they bring similarsignificant additional benefits.

DepreciationTo calculate depreciation on Fixed Assets andTrademarks in a manner that amortises the cost ofthe assets after commissioning, over their estimateduseful lives or lives based on the rates specified inSchedule XIV to the Companies Act, 1956,whichever is lower, by equal annual instalments.Leasehold properties are amortised over the periodof the lease.

Capitalised software costs are amortised over aperiod of five years.

Revaluation of AssetsTo review the original book value of Fixed Assets,from time to time, and revalue such of those FixedAssets as have appreciated in value significantly, inorder to relate them more closely to currentreplacement values, to adjust the provision fordepreciation on such revalued Fixed Assets, whereapplicable, in order to make allowance forconsequent additional diminution in value onconsiderations of age, condition and unexpireduseful life of such Fixed Assets; to transfer toRevaluation Reserve the difference between thewritten up value of the Fixed Assets revalued anddepreciation adjustment and to charge RevaluationReserve Account with annual depreciation on thatportion of the value which is written up.

InvestmentsTo state Current Investments at lower of cost andfair value; and Long Term Investments at cost.Where applicable, provision is made where thereis a permanent fall in valuation of Long TermInvestments.

InventoriesTo state inventories including work-in-progress atcost or below. The cost is calculated on weightedaverage method. Cost comprises expenditureincurred in the normal course of business in bringingsuch inventories to its location and includes, whereapplicable, appropriate overheads based on normallevel of activity. Obsolete, slow moving and defectiveinventories are identified at the time of physicalverification of inventories and, where necessary,provision is made for such inventories.

TurnoverTo state Turnover, which represents invoiced valueof goods sold and services rendered, net of salestax but inclusive of excise duties, luxury taxes etc.

Investment IncomeTo account for Income from Investments on anaccrual basis, inclusive of related tax deducted atsource.

Proposed DividendTo provide for Dividends as proposed by theDirectors in the books of account, pending approvalat the Annual General Meeting.


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Retirement BenefitsTo make regular monthly contributions to variousProvident Funds, Pension Funds and Gratuity Fundswhich are charged against revenue. To also chargeagainst revenue, actual disbursements made, whendue, under the Workers’ Voluntary RetirementScheme.To administer through duly constituted andapproved independent trusts, various Funds inrespect of Employees’ Retirement Benefit Schemes,with the exception of Provident Fund and FamilyPension contributions in respect of Unionised Staffwhich are statutori ly deposited with theGovernment.

Lease RentalsTo charge Rentals in respect of leased equipmentto the Profit and Loss Account.

Research and DevelopmentTo write off all expenditure other than capitalexpenditure on Research and Development in theyear it is incurred.Capital expenditure on Research and Developmentis included under Fixed Assets.

Taxes on IncomeTo provide and determine Current tax as the amountof tax payable in respect of taxable income for theperiod.To provide and recognise Deferred tax on timingdifferences between taxable income and accountingincome subject to consideration of prudence.Not to recognise Deferred tax assets on unabsorbeddepreciation and carry forward of losses unless thereis virtual certainty that there will be sufficient futuretaxable income available to realise such assets.

Foreign Currency TranslationTo account for transactions in foreign currency atthe exchange rate prevailing on the date oftransactions. Gains/losses arising out of fluctuationsin the exchange rates are recognised in Profit andLoss in the period in which they arise except inrespect of Fixed Assets where exchange variance isadjusted in the carrying amount of the respectiveFixed Asset.To account for differences between the forwardexchange rates and the exchange rates at the dateof transactions, as income or expense over the lifeof the contracts, except in respect of liabilitiesincurred for acquiring Fixed Assets, in which casesuch differences are adjusted in the carrying amountof the respective Fixed Asset.

To account for profit/loss arising on cancellationor renewal of forward exchange contracts asincome/expense for the period, except in case offorward exchange contracts relating to liabilitiesincurred for acquiring Fixed Assets, in which casesuch profit/loss are adjusted in the carrying amountof the respective Fixed Asset.

To account for gains/losses on foreign exchangerate fluctuations relating to current assets andliabilities at the year end.

To account for gains/losses on foreign exchangerate fluctuations relating to inventories at foreignbranches where valuation is at net realisable value.

To account for gains/losses on foreign exchangerate fluctuations relating to current assets andliabilities of foreign branch and foreign currencybank accounts at the year end.

ClaimsTo disclose claims against the Company notacknowledged as debts after a careful evaluationof the facts and legal aspects of the matter involved.

Segment ReportingTo identify segments having regard to the dominantsource and nature of risks and returns and theinternal organisation and management structure.

To account for inter-segment revenue on the basisof transactions which are primarily market led.

To include under “Unallocated Corporate Expenses”revenue and expenses which relate to the enterpriseas a whole and are not attributable to segments.

Financial and Management Information SystemsTo practise an Integrated Accounting System whichunifies both Financial Books and Costing Records.The books of account and other records have beendesigned to facilitate compliance of the relevantprovisions of the Companies Act on one hand, andmeet the internal requirements of information andsystems for Planning, Review and Internal Controlon the other. To ensure that the Cost Accounts aredesigned to adopt Costing Systems appropriate tothe business carried out by the Division with eachDivision incorporating into its Costing System, thebasic tenets and principles of Standard Costing,Budgetary Control and Marginal Costing asappropriate.


On behalf of the BoardA. SINGH Director

K. VAIDYANATH DirectorKolkata, 22nd May, 2002 B. B. CHATTERJEE Secretary

SCHEDULES TO THE ACCOUNTS - ITC Limited · 31st March, 2002 31st March, 2001 (Rs. in Lakhs) (Rs. in Lakhs) 1. CAPITAL Authorised 30,00,00,000 Ordinary Shares of Rs. 10.00 each 3,00,00

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