ITC - Standalone Unaudited Financial Results for the Quarter ended 30th June, 2016

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Standalone Unaudited Financial Results for the Quarter ended 30th June, 2016

Sl. No.	Particulars	3 Months ended 30.06.2016	Twelve Months ended 31.03.2016	Corresponding 3 Months ended 30.06.2015
1	Total Income from Operations	13253.06	51944.57	12232.65
2	Net Profit / (Loss) for the period (before Tax, Exceptional and/or Extraordinary items)	3675.40	14406.14	3340.65
3	Net Profit / (Loss) for the period before tax (after Exceptional and/or Extraordinary items)	3675.40	14406.14	3340.65
4	Net Profit / (Loss) for the period after tax (after Exceptional and/or Extraordinary items)	2384.67	9311.26	2166.09
5	Total Comprehensive Income for the period [Comprising Profit / (Loss) for the period (after tax) and Other Comprehensive Income (after tax)]	2448.24	9244.68	2081.32
6	Equity Share Capital	805.33	804.72	801.55
7	Reserves (excluding Revaluation Reserve)		40834.60
8	Earnings Per Share (of Re 1/- each)
	1. Basic (Rs.):	1.97	7.72	1.80
	2. Diluted (Rs.):	1.96	7.68	1.79

Notes :

a)	The above is an extract of the detailed format of Statement of Standalone Unaudited Financial Results filed with the Stock Exchanges under Regulation 33 of the SEBI (Listing and Other Disclosure Requirements) Regulations, 2015. The detailed financial results and this extract were reviewed by the Audit Committee and approved at the meeting of the Board of Directors of the Company at the meeting held on 21st July 2016.The full format of the Statement of Standalone Unaudited Financial Results are available on the Company's website (www.itcportal.com) and on the websites of the National Stock Exchange of India Limited (www.nseindia.com), BSE Limited (www.bseindia.com) and the Calcutta Stock Exchange Limited (www.cse-india.com).
b)	Pursuant to the approval of the Shareholders, through postal ballot and e-voting on 27th June, 2016, the Company, on 7th July, 2016, issued and allotted 402,66,57,100 Ordinary Shares of Re. 1/- each, as fully paid-up Bonus Shares in the proportion of 1 (One) Bonus Share of Re. 1/- each for every existing 2 (Two) Ordinary Shares of Re. 1/- each held as on the Record Date i.e. 4th July, 2016. Consequent to the above, the earnings per share (Basic and Diluted) have been adjusted for all the periods presented.
c)	A Limited Review as required under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been completed on the detailed financial results for the quarter ended 30th June 2016 filed with the Stock Exchanges. This Report does not have any impact on the 'Results and Notes' for the Quarter ended 30th June, 2016 which needs to be explained.

Registered Office :
Virginia House, 37 J.L. Nehru Road,
Kolkata 700 071, India

Dated : 21st July, 2016
Place : Kolkata, India

For and on behalf of the Board


Director & Chief Financial Officer	Chairman

Standalone Unaudited Financial Results for the Quarter ended 30th June, 2016

Particulars		3 Months ended 30.06.2016	Corresponding 3 Months ended 30.06.2015	Preceding 3 Months ended 31.03.2016	Twelve Months ended 31.03.2016
(Rs. in Crores)
		(Unaudited)*	(Unaudited)*	(Unaudited)*	(Unaudited)*
INCOME FROM OPERATIONS
a) REVENUE FROM OPERATIONS	1	13156.68	12150.48	14032.43	51582.45
b) OTHER OPERATING INCOME	2	96.38	82.17	106.35	362.12
TOTAL INCOME FROM OPERATIONS (1+2)	3	13253.06	12232.65	14138.78	51944.57
EXPENSES
a) Cost of materials consumed		2880.04	2569.08	3033.84	11054.75
b) Purchases of stock-in-trade		1004.84	629.02	819.37	2591.80
c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		360.70	543.19	(286.05)	(196.55)
d) Excise duty		3199.02	3072.63	4382.08	15361.90
e) Employee benefits expense		700.31	627.46	551.39	2328.27
f) Depreciation and amortisation expense		261.25	257.61	254.25	1031.93
g) Other expenses		1581.92	1539.04	2029.78	7086.46
TOTAL EXPENSES	4	9988.08	9238.03	10784.66	39258.56
PROFIT FROM OPERATIONS BEFORE OTHER INCOME AND FINANCE COSTS (3-4)	5	3264.98	2994.62	3354.12	12686.01
OTHER INCOME	6	420.52	356.49	371.23	1769.26
PROFIT FROM ORDINARY ACTIVITIES BEFORE FINANCE COSTS (5+6)	7	3685.50	3351.11	3725.35	14455.27
FINANCE COSTS	8	10.10	10.46	12.27	49.13
PROFIT FROM ORDINARY ACTIVITIES BEFORE TAX (7-8)	9	3675.40	3340.65	3713.08	14406.14
TAX EXPENSE	10	1290.73	1174.56	1334.17	5094.88
NET PROFIT FOR THE PERIOD (9-10)	11	2384.67	2166.09	2378.91	9311.26
OTHER COMPREHENSIVE INCOME (NET OF TAX)	12	63.57	(84.77)	(249.11)	(66.58)
TOTAL COMPREHENSIVE INCOME (11+12)		2448.24	2081.32	2129.80	9244.68
PAID UP EQUITY SHARE CAPITAL		805.33	801.55	804.72	804.72
(Ordinary shares of Re. 1/- each)
RESERVES EXCLUDING REVALUATION RESERVES					40834.60
EARNINGS PER SHARE (of Re 1/- each) (not annualised):
(a) Basic (Rs.)		1.97	1.80	1.97	7.72
(b) Diluted (Rs.)		1.96	1.79	1.96	7.68

* The financial results of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016. The Company adopted Ind AS from 1st April, 2016, and accordingly, these financial results (including for all the periods presented in accordance with Ind AS 101 - First-time Adoption of Indian Accounting Standards) have been prepared in accordance with the recognition and measurement principles in Ind AS 34 - Interim Financial Reporting, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and the other accounting principles generally accepted in India. The figures for the preceding 3 months ended 31.03.2016 are the balancing figures between the figures in respect of the full financial year ended 31st March, 2016 and the year to date figures upto the third quarter of that financial year.

Notes :

The Unaudited Standalone Financial Results and Segment Results were reviewed by the Audit Committee and approved at the meeting of the Board of Directors of the Company at its meeting held on 21st July, 2016.

The launch and rollout costs of the Company's brands 'Fiama', 'Vivel', 'Superia', 'Engage', 'Savlon' and 'Shower to Shower' covering the range of personal care products of soaps, face washes, shower gels, skin care, deodorants, handwash and ayurvedic talc, and the continuing significant brand building costs of the Foods businesses are reflected under 'Other expenses' stated above and in Segment Results under 'FMCG-Others'.

Pursuant to the approval of the Shareholders, through postal ballot and e-voting, on 27th June, 2016:

i)	The Authorised Share Capital of the Company has been increased from Rs. 1000,00,00,000/- to Rs. 2000,00,00,000/-, divided into 2000,00,00,000 Ordinary Shares of Re. 1/- each.
ii)	The Company, on 7th July, 2016, issued and allotted 402,66,57,100 Ordinary Shares of Rs. 1/- each, as fully paid-up Bonus Shares in the proportion of 1 (One) Bonus Share of Re. 1/- each for every existing 2 (Two) Ordinary Shares of Rs. 1/- each held as on the Record Date i.e. 4th July, 2016.
iii)	Consequent upon the issue and allotment of the bonus shares above, the earnings per share (Basic and Diluted) have been adjusted for all the periods presented.

During the quarter, 61,07,210 Ordinary Shares of Re. 1/- each were issued and allotted under the Companyâ€™s Employee Stock Option Schemes.

A. Reconciliation of the standalone financial results to those reported under previous Generally Accepted Accounting Principles (GAAP) are summarised as follows:

Particulars	Notes	For the Quarter ended 30th June 2015	For the Quarter ended 31st March 2016	For the 12 months ended 31st March 2016
(Rs. in Crores)
Profit After Tax as reported under previous GAAP		2265.44	2495.20	9844.71
Impact of measuring investments at Fair Value through Profit or Loss (FVTPL)	(ii), (iii)	18.03	(41.12)	(115.78)
Impact of measuring derivative financial instruments, other than those designated as cash flow hedges, at fair value	(iv)	0.43	8.72	8.29
Impact of recognising the cost of the employee stock option scheme at fair value	(i) (c)	(114.04)	(112.88)	(498.60)
Reclassification of actuarial gains / losses, arising in respect of employee benefit schemes, to Other Comprehensive Income (OCI)		4.00	26.84	53.84
Tax Adjustments		(7.77)	2.15	18.80
Profit After Tax as reported under Ind AS		2166.09	2378.91	9311.26
Other Comprehensive Income (net of tax)		(84.77)	(249.11)	(66.58)
Total Comprehensive Income as reported under Ind AS		2081.32	2129.80	9244.68

B. Reconciliation of equity as reported under previous GAAP is summarised as follows:

Particulars	Notes	As at 31/3/2016 (end of last period presented under previous GAAP)
Equity as reported under previous GAAP		32929.00
Dividends (including tax thereon)	(v)	8232.60
Impact of measuring derivative financial instruments, being cash flow hedges, at fair value (net of tax)	(iv)	8.06
Impact of measuring investments at Fair Value through Profit or Loss (FVTPL) or OCI (net of tax)	(ii), (iii)	414.62
Impact of recognising the cost of the employee stock option scheme in respect of employees of group companies	(i) (c)	55.04
Equity as reported under Ind AS		41639.32
Comprising:
Paid up equity share capital		804.72
Reserves		40834.60

Exemptions applied at transition

Ind AS 101 (First-time Adoption of Indian Accounting Standards) provides a suitable starting point for accounting in accordance with Ind AS and is required to be mandatorily followed by first-time adopters. Ind AS 101 allows first-time adopters exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions in its standalone financial results:

a. Property, Plant and Equipment were carried in the statement of financial position prepared under previous GAAP as at 31st March, 2015. The Company has elected to regard such carrying amount as deemed cost at the date of transition i.e. 1st April, 2015.

b. Under previous GAAP, investment in subsidiaries, joint ventures and associates were stated at cost and provisions made to recognise the decline, other than temporary. Under Ind AS, the Company has elected to regard such carrying amount as at 31st March, 2015 as deemed cost at the date of transition.

c. As per the previous GAAP, the cost of ITC Employee Stock Option Scheme (ITC ESOS) [equity-settled] was recognised using the intrinsic value method. Under this method, no expenses were recognised in the statement of profit and loss as the fair value of shares on the date of grant equalled the exercise price. Under Ind AS, the cost of ITC ESOS is recognised based on the fair value of the options as on the grant date. In terms of the exemptions, the fair value of unvested options as at the date of transition have been accounted for as part of reserves. The fair value of options vesting after the transition date have been recognised in profit or loss.

The cost of ITC ESOS applicable to employees of group companies, net of reimbursements, have been considered as capital contribution.

ii)

Under previous GAAP, current investments were stated at lower of cost and fair value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition and fair value changes after the date of transition has been recognised in profit or loss.

iii)

Under previous GAAP, non current Investments were stated at cost. Where applicable, provision was made to recognise a decline, other than temporary, in valuation of such Investments. Under Ind AS, financial assets in equity instruments [other than those in (i) (b)] have been classified as Fair Value through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition.

iv)

Under previous GAAP, the net mark to market losses on derivative financial instruments, other than those designated as cash flow hedges, as at the Balance Sheet date, were recognized in profit or loss, and the net gains, if any, were ignored. Under Ind AS, such derivative financial instruments are to be recognised at fair value and the movement is recognised in profit or loss.

Under previous GAAP, dividend payable is recognised as a liability in the period to which it relates. Under Ind AS, dividends to shareholders are recognised when declared by the members in a general meeting.

This statement is as per Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Limited Review

The Limited Review, as required under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 Quarter ended 30th June, 2016 which needs to be explained.

Limited Review

Unaudited Segment-wise Revenue, Results, Assets and Liabilities for the Quarter ended 30th June, 2016

	STANDALONE
(Rs. in Crores)
	3 Months ended 30.06.2016	Corresponding 3 Months ended 30.06.2015	Preceding 3 Months ended 31.03.2016	Twelve Months ended 31.03.2016
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
1. Segment Revenue
a) FMCG - CigarettesÂ	8230.60	7733.43	8545.46	32348.29
- OthersÂ Â Â Â Â	2385.15	2177.50	2710.78	9731.17
Total FMCGÂ Â Â Â Â Â	10615.75	9910.93	11256.24	42079.46
b) HotelsÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â	287.36	287.83	362.99	1286.17
c) Agri BusinessÂ Â Â Â Â Â Â Â	2794.08	2325.36	1806.79	7456.88
d) Paperboards, Paper & PackagingÂ	1322.90	1344.02	1315.03	5327.70
TotalÂ	15020.09	13868.14	14741.05	56150.21
Less :Â Inter-segment revenueÂ	1863.41	1717.66	708.62	4567.76
Revenue from operations	13156.68	12150.48	14032.43	51582.45
2. Segment Results
a) FMCG - CigarettesÂ	3004.58	2781.10	3018.56	11752.43
- Others	Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (4.52)	Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (7.97)	70.83	70.51
Total FMCG	3000.06	2773.13	3089.39	11822.94
b) HotelsÂ	1.22	(7.25)	42.65	55.69
c) Agri Business	237.31	233.87	170.32	933.03
d) Paperboards, Paper & Packaging	247.69	254.44	202.95	907.62
TotalÂ	3486.28	3254.19	3505.31	13719.28
Less : i) Finance Costs	10.10	10.46	12.27	49.13
ii) Other un-allocable (income) net of un-allocable expenditure [Note (i)]	(199.22)	(96.92)	(220.04)	(735.99)
Profit Before Tax	3675.40	3340.65	3713.08	14406.14
3. Assets
a) FMCG - Cigarettes	7616.48	7507.55	7946.13	7946.13
- Others	6775.25	5765.05	6059.49	6059.49
Total FMCG	14391.73	13272.60	14005.62	14005.62
b) HotelsÂ [Note (ii)]	4868.10	4689.66	4820.29	4820.29
c) Agri Business	3182.51	2713.89	2968.39	2968.39
d) Paperboards, Paper & Packaging	6143.62	5943.21	6031.00	6031.00
TotalÂ	28585.96	26619.36	27825.30	27825.30
Unallocated Corporate Assets	25771.20	22262.91	22703.15	22703.15
Total Assets	54357.16	48882.27	50528.45	50528.45
4. Liabilities
a) FMCG - Cigarettes **	2469.98	2444.49	2644.39	2644.39
- Others	1308.06	1070.85	1179.77	1179.77
Total FMCG	3778.04	3515.34	3824.16	3824.16
b) Hotels	361.52	358.01	345.39	345.39
c) Agri Business	825.02	841.29	610.35	610.35
d) Paperboards, Paper & Packaging	545.12	518.43	510.68	510.68
TotalÂ	5509.70	5233.07	5290.58	5290.58
Unallocated Corporate Liabilities	4519.55	4152.89	3598.55	3598.55
Total Liabilities	10029.25	9385.96	8889.13	8889.13

** Segment Liabilities of FMCG-Cigarettes is before considering Rs. 656.91 Crores (30.06.2015 - Rs. 635.00 Crores ; 31.03.2016 - Rs. 651.54 Crores) in respect of disputed Taxes, the recovery of which has been stayed or where States' appeals are pending before Courts. These have been included under 'Unallocated Corporate Liabilities'.

Note (i) : As stock options are granted under ITC ESOS to align the interests of employees with those of shareholders and also to attract and retain talent for the enterprise as a whole, the option value of ITC ESOS do not form part of the segment performance reviewed by the Corporate Management Committee. Also refer note 5 (i) (c) of notes to the financial results.

Note (ii) : Includes Rs. 541.21 Crores (30.06.2015 - Rs. 541.21 Crores ; 31.03.2016 - Rs. 541.21 Crores) towards payment to IFCI Limited and applicable stamp duty for purchase of a five star hotel resort in Goa operating under the name Park Hyatt Goa Resort & Spa and IFCI Limited issued required sale certificate in favour of the Company. The erstwhile owners of the property thereafter challenged the sale. By its judgement dated 23.03.2016, the Bombay High Court set aside the sale and directed IFCI Limited to refund the sale consideration to the Company. The Company and IFCI Limited have approached the Hon'ble Supreme Court against the High Court judgement. The Hon'ble Supreme Court by its interim order dated 22.04.2016 has issued notice in the matter, ordered status quo and directed that the sale consideration shall remain with IFCI Limited. The matter is pending before the Hon'ble Supreme Court.

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.

The Operating Segments have been reported in a manner consistent with the internal reporting provided to the Corporate Management Committee, which is the Chief Operating Decision Maker.

(2)

The business groups comprise the following :

FMCG

Cigarettes

Cigarettes, Cigars etc.

Others

Branded Packaged Foods Businesses (Staples, Snacks and Meals; Dairy and Beverages; Confections); Apparel; Education and Stationery Products; Personal Care Products; Safety Matches and Agarbattis.

Hotels

Hoteliering.

Paperboards, Paper & Packaging

Paperboards, Paper including Specialty Paper & Packaging including Flexibles.

Agri Business

Agri commodities such as soya, spices, coffee and leaf tobacco.

(3)

Segment results of 'FMCG : Others' are after considering significant business development, brand building and gestation costs of Branded Packaged Foods businesses and Personal Care Products business.

(4)

The Company's Agri Business markets agri commodities in the export and domestic markets; supplies agri raw materials to the Branded Packaged Foods Businesses and sources leaf tobacco for the Cigarettes Business.

Registered Office :
Virginia House, 37 J.L. Nehru Road,
Kolkata 700 071, India

Dated : 21st July, 2016
Place : Kolkata, India

For and on behalf of the Board

Director& Chief Financial Officer

Chairman

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Quarterly Results

Standalone Unaudited Financial Results for the Quarter ended 30th June, 2016

Standalone Unaudited Financial Results for the Quarter ended 30th June, 2016

Unaudited Segment-wise Revenue, Results, Assets and Liabilities for the Quarter ended 30th June, 2016