Notes to the Financial Statements

As at As at As at As at
31st March, 2016 31st March, 2016 31st March, 2015 31st March, 2015
(No. of Shares) (` in Crores) (No. of Shares) (` in Crores)

1. Share capital

Authorised
Ordinary Shares of ` 1.00 each 10,00,00,00,000 1000.00 10,00,00,00,000 1000.00
Issued and Subscribed
Ordinary Shares of ` 1.00 each, fully paid 8,04,72,06,991 804.72 8,01,55,19,541 801.55
A) Reconciliation of number of
Ordinary Shares outstanding
As at beginning of the year 8,01,55,19,541 801.55 7,95,31,82,950 795.32
Add: Issue of Shares on exercise of Options 3,16,87,450 3.17 6,22,48,830 6.22
Add: Issue of Shares pursuant to the
Scheme of Arrangement [Refer Note 31(x)(d)] – – 87,761 0.01
As at end of the year 8,04,72,06,991 804.72 8,01,55,19,541 801.55

B) Shareholders holding more than 5% of the Ordinary Shares in the Company

As at As at As at As at
31st March, 2016 31st March, 2016 31st March, 2015 31st March, 2015
(No. of Shares) % (No. of Shares) %

Tobacco Manufacturers (India) Limited 1,98,55,64,880 24.68 1,98,55,64,880 24.77

Life Insurance Corporation of India 1,15,50,35,797 14.35 1,15,50,35,797 14.41
Specified Undertaking of the
Unit Trust of India 89,67,42,540 11.14 89,67,24,540 11.19
C) Ordinary Shares allotted as fully paid pursuant to contract(s) without payment being received in cash during the period
of five years immediately preceding 31st March
2016 2015
(No. of Shares) (No. of Shares)

Shares issued in 2014-15 pursuant to the Scheme of Arrangement [Refer Note 31(x)(d)] 87,761 87,761

D) Ordinary Shares allotted as fully paid up Bonus Shares for the period of five years immediately preceding 31st March
2016 2015
(No. of Shares) (No. of Shares)

Bonus Shares issued in 2010-11 3,82,67,01,530 3,82,67,01,530

E) Rights, preferences and restrictions attached to the Ordinary Shares

The Ordinary Shares of the Company, having par value of ` 1.00 per share, rank pari passu in all respects including voting rights
and entitlement to dividend.
F) Shares reserved for issue under Options
As at As at
31st March, 2016 31st March, 2015
(No. of Shares) (No. of Shares)

Ordinary Shares of ` 1.00 each 30,12,99,270 26,93,51,410

Terms and Conditions of Options Granted
Each Option entitles the holder thereof to apply for and be allotted ten Ordinary Shares of the Company of ` 1.00 each upon payment of the exercise price
during the exercise period. The exercise period commences from the date of vesting of the Options and expires at the end of five years from (i) the date of
grant in respect of Options granted under the ITC Employee Stock Option Scheme (introduced in 2001) and (ii) the date of vesting in respect of Options granted
under the ITC Employee Stock Option Scheme -2006 & the ITC Employee Stock Option Scheme -2010.
The vesting period for conversion of Options is as follows:
On completion of 12 months from the date of grant of the Options: 30% vests
On completion of 24 months from the date of grant of the Options: 30% vests
On completion of 36 months from the date of grant of the Options: 40% vests
The Options have been granted at the ‘market price’ as defined from time to time under the erstwhile Securities and Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Securities and Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014.

120 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

2. Reserves and surplus

Capital Reserve
At the beginning and at the end of the year 2.48 2.48
Capital Redemption Reserve
At the beginning and at the end of the year 0.30 0.30
Securities Premium Account
At the beginning of the year 5134.75 4162.18
Add: On issue of Shares 528.53 972.57
At the end of the year 5663.28 5134.75
Revaluation Reserve
At the beginning and at the end of the year 52.41 52.41
Contingency Reserve
At the beginning and at the end of the year 363.05 363.05
General Reserve
At the beginning of the year 15565.31 14686.31
Less: Pursuant to the Scheme of Arrangement [Note 31(x)(a)] – 91.00
Add: Transfer from Surplus in Statement of Profit and Loss 990.00 970.00
At the end of the year 16555.31 15565.31
Foreign Currency Translation Reserve
At the beginning and at the end of the year 40.55 40.55
Hedging Reserve
At the beginning of the year 7.94 20.33
Add/(Less): Net movement on hedging instruments, designated
and effective as hedges and transfers to statement of profit and
loss on occurrence of forecasted hedge transactions (2.32) (18.66)
(Less)/Add: Deferred Tax 0.80 6.27
At the end of the year 6.42 7.94
Surplus in Statement of Profit and Loss
At the beginning of the year 8767.35 6139.09
Less: Loss for the period from 1st April, 2013 to 31st March, 2014
adjusted pursuant to the Scheme of Arrangement [Refer Note 31(x)] – 8.01
Add: Unrecognised Net Deferred Tax assets as on 1st April, 2013
adjusted pursuant to the Scheme of Arrangement [Refer Note 31(x)] – 45.84
Less: Depreciation on transition to Schedule II of the Companies Act, 2013
on Tangible Fixed Assets [Net of Deferred Tax - Nil
(2015 - ` 24.88 Crores)] [Refer Note 31(xi)] – 48.32
Add: Profit for the year 9844.71 9607.73
Less: Transfer to General Reserve 990.00 970.00
Proposed Dividend
– Ordinary Dividend [ ` 6.50 (2015 - ` 6.25) per share] 5230.68 5009.70
– Special Dividend [ ` 2.00 (2015 - Nil) per share] 1609.44 –
Income Tax on Proposed Dividend
– Current year 1392.48 1019.86
– Earlier year’s provision no longer required (51.02) (30.58)
At the end of the year 9440.48 8767.35
TOTAL 32124.28 29934.14

ITC Limited REPORT AND ACCOUNTS 2016 121

Notes to the Financial Statements
As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

3. Long-term borrowings
Unsecured
Deferred payment liabilities
Sales tax deferment loans 25.83 38.69
TOTAL 25.83 38.69

Sales tax deferment loans

Repayable after a period of 10 to 14 years from the end of the month of respective loans. These are repayable by 2025-26 and are
interest free.
The scheduled maturity of the Long-term borrowings are summarised as under:

Term Loans Deferred Term Loans Deferred

Payment Payment
Liabilities Liabilities
Borrowings repayable
In the first year (Note 8) – 12.86 2.00* 12.31
Current maturities of long-term debt – 12.86 2.00 12.31
In the second year – 7.84 – 12.86
In the third to fifth year – 12.36 – 17.94
After five years – 5.63 – 7.89
Long-term borrowings – 25.83 – 38.69

* Represents Interest Free Loan from a subsidiary company taken over during the financial year 2014-15 pursuant to the Scheme
of Arrangement - ` 2.00 Crores, repaid in March, 2016 [Refer Note 31(x)].

4. Deferred tax liabilities (Net)

Deferred tax liabilities
On fiscal allowances on fixed assets 1733.33 1570.30
On excise duty on closing stock 600.92 513.00
Other timing differences 35.89 16.04
2370.14 2099.34
Deferred tax assets
On employees’ separation and retirement etc. 80.10 83.01
On provision for doubtful debts /advances 26.05 23.40
On State and Central taxes etc. 322.60 312.54
Other timing differences 92.97 48.79
521.72 467.74
TOTAL 1848.42 1631.60

5. Other Long term liabilities

Sundry deposits 0.05 0.02
Others 15.08 7.03
(Includes retention monies payable towards fixed assets)
TOTAL 15.13 7.05

122 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

6. Long-term provisions
Provision for employee benefits
Retirement benefits 74.36 64.04
Other benefits 37.83 36.68
TOTAL 112.19 100.72

7. Short-term borrowings
Secured
Loans from Banks
Cash credit facilities 3.60 0.02
TOTAL 3.60 0.02

Cash credit facilities are secured by hypothecation of inventories of the Company, both present and future.

8. Other current liabilities

Current maturities of long-term debt (Note 3) 12.86 14.31
Interest accrued but not due on borrowings – 0.02
Unpaid dividend* 153.56 134.50
Unpaid matured deposits and interest accrued thereon ... ...
Unpaid matured debentures /bonds and interest accrued thereon** 0.32 0.32
Sundry deposits 46.65 44.91
Other payables 3786.69 3477.12
TOTAL 4000.08 3671.18

* Represents dividend amounts either not claimed or kept in abeyance in terms of Section 126 of the Companies Act, 2013/
Section 206A of the Companies Act, 1956, or such amounts in respect of which Prohibitory /Attachment Orders are on record with
the Company.
** Represents amounts which are subject matter of pending legal disputes, details in respect of which are on record with the Company,
including an amount of ` 0.30 Crore (2015 - ` 0.30 Crore) maintained with a bank for which the Company has filed a suit.

Other payables comprise:

Payables for fixed assets 212.02 253.19
Statutory liabilities 2422.60 2334.58
Advances received from customers 908.16 639.75
Others 243.91 249.60
TOTAL 3786.69 3477.12

9. Short-term provisions
Current portion of long-term employee benefits
Retirement benefits 37.33 51.65
Other benefits 20.27 23.33
Current taxation (net of advance payment) 28.39 –
Fringe benefit tax (net of advance payment) – 1.55
Proposed dividend 6840.12 5009.70
Income tax on proposed dividend 1392.48 1019.86
TOTAL 8318.59 6106.09

ITC Limited REPORT AND ACCOUNTS 2016 123

Notes to the Financial Statements
(` in Crores)
10. Fixed assets Gross Block

Pursuant
As at to the Withdrawals As at Withdrawals As at
31st March, Scheme of and 31st March, and 31st March,
Particulars 20141 Arrangement8 Additions adjustments 20151 Additions adjustments 20161

Tangible assets
Land
Freehold2 1089.18 69.46 148.73 – 1307.37 163.90 0.01 1471.26
Leasehold3 241.35 2.47 49.11 3.71 289.22 22.96 – 312.18
Buildings
Freehold4 3872.96 40.22 527.58 9.63 4431.13 157.26 9.97 4578.42
Licensed Properties -
Building Improvement 58.80 – 5.35 4.27 59.88 2.92 3.14 59.66
Plant and Equipment 12094.75 56.64 1927.12 79.07 13999.44 642.52 140.14 14501.82
Furniture and Fixtures 683.52 3.88 84.61 14.97 757.04 41.75 12.91 785.88
Vehicles 105.67 1.31 17.78 10.21 114.55 23.65 12.32 125.88
Office Equipment 27.40 0.88 5.11 3.22 30.17 3.08 1.97 31.28
Railway Sidings etc. 1.97 – – – 1.97 – – 1.97
18175.60 174.86 2765.39 125.08 20990.77 1058.04 180.46 21868.35
Capital work-in-progress 7 2272.94 – 2506.23 2693.68 2085.49 1958.56 1573.97 2470.08
TOTAL 20448.54 174.86 5271.62 2818.76 23076.26 3016.60 1754.43 24338.43
Intangible assets (acquired)
Goodwill 4.90 – – – 4.90 – – 4.90
Trademarks5 6.04 – 337.98 – 344.02 0.04 – 344.06
Computer Software 285.34 2.89 27.65 11.34 304.54 32.68 0.09 337.13
Know-how, Business and
Commercial Rights6 72.99 – 9.75 – 82.74 10.59 – 93.33
369.27 2.89 375.38 11.34 736.20 43.31 0.09 779.42
Intangible assets under
development 22.79 – 371.76 365.90 28.65 44.54 42.44 30.75
TOTAL 392.06 2.89 747.14 377.24 764.85 87.85 42.53 810.17

The above includes following assets given on operating lease:

As at 31st March, 2016 2016 As at 31st March, 2015 2015

Depreciation Depreciation
Accumulated Charge Accumulated Charge
Particulars Gross Block Depreciation Net Block for the year Gross Block Depreciation Net Block for the year
Buildings 8.08 5.31 2.77 0.22 9.12 5.98 3.14 0.77
Plant and Equipment 488.53 322.41 166.12 18.35 371.49 242.24 129.25 14.54
TOTAL 496.61 327.72 168.89 18.57 380.61 248.22 132.39 15.31

124 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
(` in Crores)
10. Fixed assets (Contd.) Depreciation and Amortisation Net Book Value

Transition Adjustment
Pursuant recorded against On On
Upto to the surplus balance Withdrawals Upto Withdrawals Upto As at As at As at
31st March, Scheme of in Statement of and 31st March, and 31st March, 31st March, 31st March, 31st March,
Particulars 2014 Arrangement8 Profit and Loss For the year adjustments 2015 For the year adjustments 2016 2016 2015 2014

Tangible assets
Land
Freehold 2 – – – – – – – – – 1471.26 1307.37 1089.18
Leasehold 3 13.24 2.47 – 2.21 0.17 17.75 2.52 – 20.27 291.91 271.47 228.11
Buildings
Freehold4 569.94 36.18 30.26 104.98 3.53 737.83 110.16 4.41 843.58 3734.84 3693.30 3303.02
Licensed Properties -
Building Improvement 32.76 – – 6.70 3.62 35.84 6.07 2.48 39.43 20.23 24.04 26.04
Plant and Equipment 5236.08 40.57 32.95 720.81 67.97 5962.44 772.58 110.53 6624.49 7877.33 8037.00 6858.67
Furniture and Fixtures 336.69 3.03 7.10 68.90 10.85 404.87 66.44 11.10 460.21 325.67 352.17 346.83
Vehicles 31.20 0.80 0.50 14.50 5.96 41.04 15.06 11.06 45.04 80.84 73.51 74.47
Office Equipment 6.89 0.58 2.39 5.31 1.55 13.62 4.64 0.07 18.19 13.09 16.55 20.51
Railway Sidings etc. 0.11 – – 0.13 – 0.24 0.13 – 0.37 1.60 1.73 1.86
6226.91 83.63 73.20 923.54 93.65 7213.63 977.60 139.65 8051.58 13816.77 13777.14 11948.69
Capital work-in-progress 7 – – – – – – – – – 2470.08 2085.49 2272.94
TOTAL 6226.91 83.63 73.20 923.54 93.65 7213.63 977.60 139.65 8051.58 16286.85 15862.63 14221.63
Intangible assets (acquired)
Goodwill 4.90 – – – – 4.90 – – 4.90 – – –
Trademarks 5 6.02 – – 4.78 – 10.80 33.70 – 44.50 299.56 333.22 0.02
Computer Software 230.35 2.74 – 31.40 11.31 253.18 20.53 0.04 273.67 63.46 51.36 54.99
Know-how, Business and
Commercial Rights 6 63.95 – – 2.02 – 65.97 2.62 – 68.59 24.74 16.77 9.04
305.22 2.74 – 38.20 11.31 334.85 56.85 0.04 391.66 387.76 401.35 64.05
Intangible assets under
development – – – – – – – – – 30.75 28.65 22.79
TOTAL 305.22 2.74 – 38.20 11.31 334.85 56.85 0.04 391.66 418.51 430.00 86.84

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

2. Land Freehold includes certain lands at Munger with Gross Block - ` 1.16 Crores (2015 - ` 1.16 Crores) which stood vested with the State of Bihar under the Bihar
Land Reforms Act,1950 for which compensation has not yet been determined.
3. Litigation relating to the ITC Windsor land is pending. In the opinion of the management based upon legal advice, the Company’s title to the property is tenable.
4. Buildings Freehold include ` 1165.66 Crores (2015 - ` 1055.24 Crores), aggregate cost of building on leasehold land situated at various locations.
5. Trademarks are being amortised over 10 years.
6. Out of the total amount of “Know-how, Business and Commercial Rights” aggregating ` 93.33 Crores (2015 - ` 82.74 Crores):-
– ` 80.31 Crores (2015 - ` 69.72 Crores) acquired during the year and in earlier years are being amortised over 10 years.
– ` 8.05 Crores (2015 - ` 8.05 Crores) acquired in earlier years and have been amortised over 5 years.
– ` 4.97 Crores (2015 - ` 4.97 Crores) acquired in earlier years and have been amortised over 4 years.
7. On being the successful bidder under the SARFAESI Act, the Company paid an amount of ` 515.44 Crores in 2014-15 to IFCI Limited as consideration for the
purchase of a 5 star hotel resort in Goa operating under the name Park Hyatt Goa Resort & Spa and IFCI Limited Issued requisite 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 judgment. 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. In the absence of a stay on the order of the High Court, the amount of ` 515.44 Crores and the stamp duty paid in
2015-16 amounting to ` 25.77 Crores, has been adjusted in 2015-16 from Capital Work In Progress and reflected in Capital Advances (Refer Note 12).
8. Taken over pursuant to the Scheme of Arrangement between Wimco Limited with the Company [Refer Note 31(x)]. These represent the Gross Block and Depreciation
and Amortisation on Tangible and Intangible Assets acquired as at 1st April, 2013 and movements during the year 2013-14.

ITC Limited REPORT AND ACCOUNTS 2016 125

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

11. Non-current investments (at cost unless stated otherwise)

Long Term
A. TRADE INVESTMENTS
INVESTMENT IN EQUITY INSTRUMENTS
In Subsidiaries
Gold Flake Corporation Limited
1,59,98,385 Equity Shares of ` 10.00 each, fully paid 16.00 16.00
Wills Corporation Limited
Nil (2015 - 48,85,626) Equity Shares of ` 10.00 each, fully paid – 4.88
Russell Credit Limited
59,74,54,177 Equity Shares of ` 10.00 each, fully paid 619.29 619.29
7,54,22,400 Equity Shares of ` 10.00 each, ` 6.50 per share paid 39.22 39.22
ITC Infotech India Limited
8,52,00,000 Equity Shares of ` 10.00 each, fully paid 85.14 85.14
Landbase India Limited
31,70,00,000 (2015 - 12,00,00,000) Equity Shares of ` 10.00 each, fully paid 325.57 128.57
ITC Global Holdings Pte. Limited (in liquidation)
89,99,645 Ordinary Shares of US $ 1.00 each, fully paid
(cost ` 25.58 Crores, fully provided) – –
BFIL Finance Limited
Nil (2015 - 2,00,00,000) Equity Shares of ` 10.00 each, fully paid
[cost Nil (2015 - ` 20.00 Crores, fully provided)] – –
Surya Nepal Private Limited
1,18,94,400 Ordinary Shares of Nepalese Rupees 100.00 each, fully paid 10.15 10.15
Srinivasa Resorts Limited
1,63,20,477 Equity Shares of ` 10.00 each, fully paid 18.53 18.53
Fortune Park Hotels Limited
4,50,008 Equity Shares of ` 10.00 each, fully paid 0.45 0.45
Bay Islands Hotels Limited
11,875 Equity Shares of ` 100.00 each, fully paid 0.12 0.12
WelcomHotels Lanka (Private) Limited
12,19,09,150 (2015 - 10,63,08,150) Shares with no par value 560.60 486.97
King Maker Marketing, Inc.
204 Shares of Common Stock with no par value 10.23 10.23
Wimco Limited
18,50,81,193 Equity Shares of ` 1.00 each, fully paid 2.83 2.83
Technico Pty Limited
2,26,06,065 Ordinary Shares with no par value 108.72 108.72
Technico Agri Sciences Limited
3,79,62,800 (2015 - Nil) Equity Shares of ` 10.00 each, fully paid 121.00 –
ITC Investments & Holdings Limited
45,00,000 Equity Shares of ` 10.00 each, fully paid 4.50 4.50
North East Nutrients Private Limited
5,54,80,000 (2015 - 4,81,33,333) Equity Shares of ` 10.00 each, fully paid 55.48 48.13
Pavan Poplar Limited
55,10,004 Equity Shares of ` 10.00 each, fully paid
(cost ` 5.99 Crores, fully provided) – –
Prag Agro Farm Limited
1,28,00,020 (2015 - 38,00,020) Equity Shares of ` 10.00 each, fully paid
[cost ` 12.82 Crores (2015 - ` 3.82 Crores), fully provided] – –

Carried over – 1977.83 – 1583.73

126 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

11. Non-current investments (at cost unless stated otherwise) (Contd.)

Brought forward – 1977.83 – 1583.73
TRADE INVESTMENTS (Contd.)
In Associates
International Travel House Limited
2,87,600 Equity Shares of ` 10.00 each, fully paid 0.65 0.65
Gujarat Hotels Limited
17,33,907 Equity Shares of ` 10.00 each, fully paid 1.94 1.94
In Joint Ventures
Espirit Hotels Private Limited
4,65,09,200 Equity Shares of ` 10.00 each, fully paid 46.51 46.51
Maharaja Heritage Resorts Limited
90,000 Equity Shares of ` 100.00 each, fully paid 0.90 0.90
Logix Developers Private Limited
77,66,913 Equity Shares of ` 10.00 each, fully paid 41.95 41.95
In Others
VST Industries Limited
476 Equity Shares of ` 10.00 each, fully paid 0.01 0.01
Hotel Leelaventure Limited
4,99,53,055 Equity Shares of ` 2.00 each, fully paid 184.23 184.23
EIH Limited
8,56,21,473 Equity Shares of ` 2.00 each, fully paid 392.29 392.29
Punjab Anand Batteries Limited (in liquidation)
11,86,157 Equity Shares of ` 10.00 each, fully paid - under Board for
Industrial and Financial Reconstruction’s Order of 20.04.1989
(cost ` 1.19 Crores, fully provided) – –
Bihar Hotels Limited
8,00,000 Equity Shares of ` 2.00 each, fully paid 0.04 0.04
INVESTMENT IN PREFERENCE SHARES
In Subsidiaries
Landbase India Limited
Nil (2015 - 1,87,00,000) Redeemable Preference Shares
of ` 100.00 each, fully paid – 187.00
INVESTMENT IN DEBENTURES
In Subsidiaries
BFIL Finance Limited
Nil (2015 - 15,00,000) - 18.5% Non - Convertible Debentures of
` 100.00 each, (renewed at 9% in 2015) [cost Nil (2015 - ` 15.00 Crores,
fully provided)] – –
B. OTHER INVESTMENTS
INVESTMENT IN EQUITY INSTRUMENTS
Tourism Finance Corporation of India Limited
25,000 Equity Shares of ` 10.00 each, fully paid 0.05 0.05
Andhra Pradesh Gas Power Corporation Limited
8,04,000 Equity Shares of ` 10.00 each, fully paid 2.32 2.32
Woodlands Multispeciality Hospital Limited
13,072 Equity Shares of ` 10.00 each, fully paid 0.01 0.01

Carried over 579.17 2069.56 579.17 1862.46

ITC Limited REPORT AND ACCOUNTS 2016 127

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

11. Non-current investments (at cost unless stated otherwise) (Contd.)

Brought forward 579.17 2069.56 579.17 1862.46
OTHER INVESTMENTS (Contd.)
Mirage Advertising and Marketing Limited
12,488 Equity Shares of ` 10.00 each, fully paid
(cost ` 0.01 Crore, fully provided) – –
Bilaspur Cane Development Corporation Limited
100 Equity Shares of ` 10.00 each fully paid (cost ` 1000.00) ... ...

INVESTMENT IN GOVERNMENT OR TRUST SECURITIES

Government Securities (cost ` 74000.00) 0.01 0.01
National savings certificates (Pledged with various Mandi Samitis)
(cost ` 6000.00) ... ...

INVESTMENT IN BONDS/DEBENTURES
Housing and Urban Development Corporation Limited
2,000 (2015 - Nil) 7.07% Secured Redeemable Non-Convertible
Tax Free Bonds in the nature of Debentures Series B
(01 October 2025) of ` 1000000.00 each, fully paid 200.00 –
7,00,696 (2015 - Nil) 7.39% (For category I, II & III) Secured
Redeemable Non-Convertible Tax Free Bonds Tranche I
Series 2A (08 February 2031) of ` 1000.00 each, fully paid 70.07 –
IDFC Bank Limited
3,000 (2015 - Nil) Zero Coupon Unsecured Redeemable Non-Convertible
Debentures Series IDFC Bank OBB 20/2015 (27 November 2017)
of ` 1000000.00 each, fully paid 325.74 –
India Infrastructure Finance Company Limited
1,000 (2015 - Nil) 8.26% Tax Free Secured Redeemable Non-Convertible
Bonds in the nature of Debentures Series V B (23 August 2028) of
` 1000000.00 each, fully paid 106.82 –
800 (2015 - Nil) 8.46% Tax Free Secured Redeemable Non-Convertible
Bonds in the nature of Debentures Series VI B (30 August 2028) of
` 1000000.00 each, fully paid 86.88 –
1,630 (2015 - Nil) 8.48% Tax Free Secured Redeemable Non-Convertible
Bonds in the nature of Debentures Series VII B (05 September 2028) of
` 1000000.00 each, fully paid 177.23 –
Indian Railway Finance Corporation Limited
2,000 (2015 - Nil) 7.19% Tax Free Secured Redeemable Non-Convertible
Bonds in the nature of Debentures Series 99 (31 July 2025) of
` 1000000.00 each, fully paid 200.00 –
1,250 (2015 - Nil) 8.48% Tax Free Secured Non-Cumulative
Non-Convertible Redeemable Bonds 89th A Series (21 November 2028)
of ` 1000000.00 each, fully paid 135.85 –
130 (2015 - Nil) 8.55% Tax Free Secured Non-Convertible Redeemable
Bonds Series 94th A (12 February 2029) of ` 1000000.00 each, fully paid 14.21 –
LIC Housing Finance Limited
250 (2015 - Nil) 8.49% Secured Redeemable Non-Convertible Debentures
Tranche 249 (28 April 2020) of ` 1000000.00 each, fully paid 24.81 –
30 (2015 - Nil) 8.50% Secured Redeemable Non-Convertible Debentures
Tranche 187 (13 April 2017) of ` 1000000.00 each, fully paid 3.00 –
3000 (2015 - Nil) 8.69% Secured Redeemable Non-Convertible Debentures
Tranche 257 (26 June 2019) of ` 1000000.00 each, fully paid 300.00 –

Carried over 1300.16 2993.19 579.17 1862.47

128 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

11. Non-current investments (at cost unless stated otherwise) (Contd.)

Brought forward 1300.16 2993.19 579.17 1862.47
OTHER INVESTMENTS (Contd.)
239 (2015 - Nil) 8.95% Unsecured Non-Convertible Redeemable Tier II
Subordinated Bonds Series III (15 September 2020)
of ` 1000000.00 each, fully paid 24.04 –
1000 (2015 - Nil) 9.18% Secured Redeemable Non-Convertible
Debentures Tranche 219 (03 July 2017) of ` 1000000.00 each, fully paid 100.60 –
300 (2015 - Nil) 9.29% Secured Redeemable Non-Convertible
Debentures Tranche 230 Option 1 (16 October 2017) of ` 1000000.00
each, fully paid 30.29 –
170 (2015 - Nil) 9.80% Secured Redeemable Non-Convertible Debentures
Tranche XXVI (22 October 2017) of ` 1000000.00 each, fully paid 17.28 –
National Highways Authority of India
2,500 (2015 - Nil) 7.11% Secured Redeemable Tax Free Non-Convertible
Bonds in the nature of Debentures Series NHAI-IIA (18 September 2025)
of ` 1000000.00 each, fully paid 249.99 –
2,500 (2015 - Nil) 7.28% Secured Redeemable Tax Free Non-Convertible
Bonds in the nature of Debentures Series NHAI-IIB (18 September 2030)
of ` 1000000.00 each, fully paid 250.00 –
4,28,547 (2015 - Nil) 7.14% Secured Redeemable Tax Free
Non-Convertible Bonds in the nature of Debentures Series IA
(11 January 2026) of ` 1000.00 each, fully paid 42.85 –
9,99,943 (2015 - Nil) 7.35% Secured Redeemable Tax Free
Non-Convertible Bonds in the nature of Debentures Series IIA
(11 January 2031) of `1000.00 each, fully paid 99.99 –
National Housing Bank
800 (2015 - Nil) 8.46% NHB Tax Free Bonds 2028, Series V
(30 August 2028) of ` 1000000.00 each, fully paid 86.73 –
Power Finance Corporation Limited
1,000 (2015 - Nil) 8.12% Unsecured Redeemable Non-Convertible Taxable
Bonds in the nature of Debentures Series 139-B (22 May 2017)
of ` 1000000.00 each, fully paid 99.88 –
170 (2015 - Nil) 8.29% Unsecured Redeemable Non-Convertible Taxable
Bonds in the nature of Debentures Series 129-B (13 June 2018)
of ` 1000000.00 each, fully paid 17.04 –
500 (2015 - Nil) 8.38% Unsecured Redeemable Non-Convertible Taxable
Bonds in the nature of Debentures Series 131-B (27 April 2020)
of ` 1000000.00 each, fully paid 50.11 –
1,500 (2015 - Nil) 9.11% Unsecured Redeemable Non-Convertible Taxable
Bonds in the nature of Debentures Series 115 I (07 July 2017)
of ` 1000000.00 each, fully paid 151.04 –
379 (2015 - Nil) 9.27% Unsecured Redeemable Non-Convertible Non-
Cumulative Taxable Bonds Series-92-B (21 August 2017)
of ` 1000000.00 each, fully paid 38.37 –
150 (2015 - Nil) 9.32% Unsecured Redeemable Non-Convertible Taxable
Bonds in the nature of Debentures Series 117 A (19 August 2017)
of ` 1000000.00 each, fully paid 15.19 –
500 (2015 - Nil) 8.46% Secured Redeemable Non-Convertible
Non-Cumulative Tax Free Bonds in the nature of Debentures Series
107-B (30 August 2028) of ` 1000000.00 each, fully paid 54.21 –

Carried over 2276.25 3344.71 579.17 1862.47

ITC Limited REPORT AND ACCOUNTS 2016 129

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

11. Non-current investments (at cost unless stated otherwise) (Contd.)

Brought forward 2276.25 3344.71 579.17 1862.47
OTHER INVESTMENTS (Contd.)
PNB Housing Finance Limited
500 (2015 - Nil) 8.36% Secured Redeemable Non-Convertible Bonds in the
nature of Promissory Note Series XXIV (12 July 2019)
of ` 1000000.00 each, fully paid 49.99 –
Rural Electrification Corporation Limited
800 (2015 - Nil) 8.46% Secured Redeemable Non-Convertible Tax Free
Bonds in the nature of Debentures Series 3B (29 August 2028)
of ` 1000000.00 each, fully paid 86.73 –
50 (2015 - Nil) 8.54% Secured Redeemable Non-Convertible
Non-Cumulative Tax Free Bonds in the nature of Debentures Series 4B
(11 October 2028) of ` 1000000.00 each, fully paid 5.45 –
250 (2015 - Nil) 8.87% Unsecured 7 Year Non-Convertible Non-Cumulative
Redeemable Taxable Bonds - 2020 113th Series (08 March 2020)
of ` 1000000.00 each, fully paid 25.44 –
1,000 (2015 - Nil) 9.40% Unsecured Non-Convertible Non-Cumulative
Redeemable Taxable Bonds-2017 Series- 108 (Option I) (20 July 2017)
of ` 1000000.00 each, fully paid 101.33 –
Small Industries Development Bank of India
1,000 (2015 - Nil) 8.28% Unsecured Redeemable Non-Convertible Bonds
in the nature of Promissory Notes Series 7 of 2015-16 (26 February 2019
with Put Option on 27 February 2017) of ` 1000000.00 each, fully paid 100.00 –
INVESTMENT IN MUTUAL FUNDS
HDFC Fixed Maturity Plan 1114D March 2016 (1) - Series-35
12,80,00,000 (2015 - Nil) Units of ` 10.00 each 128.00 –
HDFC Fixed Maturity Plan 1132D February 2016 (1) - Series-35
4,30,00,000 (2015 - Nil) Units of ` 10.00 each 43.00 –
HDFC Fixed Maturity Plan 1107D March 2016 (1) - Series-36
4,00,00,000 (2015 - Nil) Units of ` 10.00 each 40.00 –
ICICI Prudential Fixed Maturity Plan - Series 78 - Plan I - 1170 Days
1,50,00,000 (2015 - Nil) Units of ` 10.00 each 15.00 –
ICICI Prudential Fixed Maturity Plan - Series 78 - Plan J - 1168 Days
1,00,00,000 (2015 - Nil) Units of ` 10.00 each 10.00 –
ICICI Prudential Fixed Maturity Plan - Series 78 - Plan N - 1150 Days
1,50,00,000 (2015 - Nil) Units of ` 10.00 each 15.00 –
ICICI Prudential Fixed Maturity Plan - Series 78 - Plan T - 1130 Days
1,00,00,000 (2015 - Nil) Units of ` 10.00 each 10.00 –
ICICI Prudential Fixed Maturity Plan - Series 78 - Plan W - 1135 Days
1,20,00,000 (2015 - Nil) Units of ` 10.00 each 12.00 –
Kotak Fixed Maturity Plan - Series 190
50,00,000 (2015 - Nil) Units of ` 10.00 each 5.00 –
Kotak Fixed Maturity Plan - Series 191
1,50,00,000 (2015 - Nil) Units of ` 10.00 each 15.00 –
Reliance Fixed Horizon Fund - XXX - Series 5
1,50,00,000 (2015 - Nil) Units of ` 10.00 each 15.00 –
Reliance Fixed Horizon Fund - XXX - Series 12
1,00,00,000 (2015 - Nil) Units of ` 10.00 each 10.00 –

Carried over 2711.87 3596.03 579.17 1862.47

130 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

11. Non-current investments (at cost unless stated otherwise) (Contd.)

Brought forward 2711.87 3596.03 579.17 1862.47
OTHER INVESTMENTS (Contd.)
Reliance Fixed Horizon Fund - XXX - Series 13
2,00,00,000 (2015 - Nil) Units of ` 10.00 each 20.00 –
Reliance Fixed Horizon Fund - XXX - Series 17
3,50,00,000 (2015 - Nil) Units of ` 10.00 each 35.00 –
Reliance Fixed Horizon Fund - XXX - Series 6
1,00,00,000 (2015 - Nil) Units of ` 10.00 each 10.00 –
UTI Fixed Term Income Fund Series XXIV - VI - 1181 Days
1,20,00,000 (2015 - Nil) Units of ` 10.00 each 12.00 –
UTI Fixed Term Income Fund Series XXIV - VIII - 1184 Days
80,00,000 (2015 - Nil) Units of ` 10.00 each 8.00 –
Aggregate amount of quoted and unquoted Investments 2796.87 3596.03 579.17 1862.47
TOTAL 6392.90 2441.64

Aggregate market value of quoted investments ` 3253.11 Crores (2015 - ` 1045.15 Crores)
Aggregate provision for diminution in value ` 45.59 Crores (2015 - ` 71.59 Crores)

As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

12. Long-term loans and advances

Capital advances
Unsecured, considered good [Refer Note 10(7)] 1042.84 391.46
Security deposits
Unsecured, considered good 887.13 729.50
Doubtful 2.96 2.96
890.09 732.46
Less: Provision for doubtful deposits 2.96 887.13 2.96 729.50
Loans and advances to Related Parties
Security deposits - unsecured, considered good 0.37 2.90
Loans and advances - doubtful – 40.95
0.37 43.85
Less: Provision for doubtful loans and advances – 0.37 40.95 2.90
Other loans and advances
(Comprise loans to employees, prepaid expenses, advances
with statutory authorities etc.)
Unsecured, considered good* 355.09 341.00
Doubtful 17.30 17.56
372.39 358.56
Less: Provision for doubtful loans and advances 17.30 355.09 17.56 341.00
Advance Tax (net of provisions) – 41.50

TOTAL 2285.43 1506.36

Loans and advances to Related Parties include deposit with Director - ` 0.07 Crore (2015 - Nil) [Refer Note 33].
* Includes interest bearing loan to a supplier, M/s MD Fresh Vegetable Private Limited ` 2.00 Crore (2015 - Nil) carrying interest
@ 12% p.a. for upgrading its infrastructure and enhancement of its factory capacity. Current portion of the loan included in Short - term
loans and advances ` 0.50 Crore (2015 - Nil) in Note 17.

ITC Limited REPORT AND ACCOUNTS 2016 131

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

13. Current investments (at lower of cost and fair value)

INVESTMENT IN PREFERENCE SHARES
ICICI Bank Limited
310 Non-Cumulative Redeemable Non-Convertible Non-Participative
Preference Shares (20 April 2018) of ` 10000000.00 each, fully paid 248.76 214.85
INVESTMENT IN BONDS/DEBENTURES
Export Import Bank of India
300 9.15% Unsecured Non-Convertible Bonds Series P-16
(05 September 2022) of ` 1000000.00 each, fully paid 31.12 31.43
Indian Railway Finance Corporation Limited
10,000 6.30% Secured Non-Convertible Tax Free Bonds in the form
of Promissory Notes 68th 'A' Series (08 March 2017) of ` 100000.00 each,
fully paid 98.91 95.54
10,00,000 7.18% Tax Free Non-Cumulative Non-Convertible Redeemable
Bonds in the nature of Debentures 86th Series (19 February 2023)
of ` 1000.00 each, fully paid 100.00 93.72
20,00,000 8.23% Tax Free Secured Non-Convertible Redeemable Bonds
Series 91st (18 February 2024) of ` 1000.00 each, fully paid 200.00 199.19
4,35,012 8.00% Tax Free Non-Cumulative Non-Convertible Redeemable
Bonds 80th Series (23 February 2022) of ` 1000.00 each, fully paid 43.50 42.84
LIC Housing Finance Limited
2,000 (2015 - Nil) Zero Coupon Secured Redeemable Non-Convertible
Debentures Tranche 242 Option 2 (24 February 2017) of
` 1000000.00 each, fully paid 219.06 –
National Bank for Agriculture and Rural Development
4,100 Zero Coupon Unsecured Non-Convertible Bonds in the form of
Promissory Notes Series BNB (01 August 2017) 2D of ` 20000.00 each,
fully paid 7.35 6.54
1,41,270 Zero Coupon Unsecured Non-Convertible Bonds in the form of
Promissory Notes Series BNB (01 January 2019) of ` 20000.00 each,
fully paid 226.26 197.03
National Highways Authority of India
4,94,476 8.20% Tax Free Secured Redeemable Non-Convertible Bonds
(25 January 2022) of ` 1000.00 each, fully paid 49.45 49.20
National Housing Bank
1,03,785 Zero Coupon Unsecured Non-Convertible Taxable Bonds
in the form of Promissory Notes (24 December 2018) of ` 10000.00 each,
fully paid 83.30 72.53
Power Finance Corporation Limited
Nil (2015 - 450) 9.69% Secured Non-Convertible Non-Cumulative Taxable
Bonds Series 113 (02 March 2019) of ` 1000000.00 each, fully paid – 46.85
1,500 8.09% Secured Non-Convertible Non-Cumulative Tax Free Bonds
in the nature of Debentures Series-80-A (25 November 2021) of
` 100000.00 each, fully paid 15.49 14.84
1,000 8.01% Secured Redeemable Non-Convertible Non-Cumulative
Tax Free Bonds in the nature of Debentures Series 107-A (30 August 2023)
of ` 1000000.00 each, fully paid 99.95 98.27
450 9.32% Unsecured Redeemable Non-Convertible Taxable
Bonds in the nature of Debentures Series 119 B (17 September 2019)
of ` 1000000.00 each, fully paid 46.18 46.52
Nil (2015 - 500) 8.36% Unsecured Redeemable Non-Convertible Taxable
Bonds in the nature of Debentures Series 127 (26 February 2020) of
` 1000000.00 each, fully paid – 49.98

Carried over 538.04 931.29 576.99 682.34

132 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

13. Current investments (at lower of cost and fair value) (Contd.)
Brought forward 538.04 931.29 576.99 682.34
INVESTMENT IN BONDS/DEBENTURES (Contd.)
1,00,000 8.20% Secured Non-Convertible Tax Free Bonds Series-I
(01 February 2022) of ` 1000.00 each, fully paid 10.39 9.95
12,95,560 8.18% Secured Tax Free Redeemable Non-Convertible
Bonds Series 1A (16 November 2023) of ` 1000.00 each, fully paid 129.56 128.60
Rural Electrification Corporation Limited
Nil (2015 - 750) 9.38% Secured Redeemable Non-Convertible
Non-Cumulative Taxable Bonds Series 117th (06 November 2018)
of ` 1000000.00 each, fully paid – 77.35
Nil (2015 - 400) 8.44% Unsecured Redeemable Non-Convertible
Non-Cumulative Taxable Bonds in the nature of Debentures Series
127th (04 December 2021) of ` 1000000.00 each, fully paid – 40.24
30,00,000 7.22% Secured Tax Free Redeemable Non-Convertible Bonds
Tranche 1 Series 1(19 December 2022) of ` 1000.00 each, fully paid 299.99 282.01
1,000 8.01% Secured Redeemable Non-Convertible Tax Free Bonds in the
nature of Debentures Series 3A (29 August 2023) of ` 1000000.00 each,
fully paid 99.96 98.27
INVESTMENT IN CERTIFICATE OF DEPOSITS
15,000 (2015 - Nil) 8.17% Export Import Bank of India Certificate of
Deposit (10 February 2017) of ` 100000.00 each, fully paid 140.12 –
INVESTMENT IN MUTUAL FUNDS
Axis Liquid Fund
Nil (2015 - 32,301) Units of ` 1000.00 each – 5.00
Birla Sun Life Cash Manager
Nil (2015 - 1,19,30,256) Units of ` 100.00 each – 400.00
Birla Sun Life Floating Rate Fund - Long Term
Nil (2015 - 53,43,351) Units of ` 100.00 each – 85.83
Birla Sun Life Short Term Fund
94,07,656 (2015 - 5,05,02,285) Units of ` 10.00 each 53.69 50.50
Birla Sun Life Treasury Optimizer Plan
15,45,665 (2015 - 15,45,666) Units of ` 100.00 each 29.37 25.39
Birla Sun Life Savings Fund
23,45,049 (2015 - 23,45,048) Units of ` 100.00 each 68.68 55.30
DSP BlackRock Liquidity Fund - Institutional Plan
Nil (2015 - 1,00,106) Units of ` 1000.00 each – 20.00
DWS Fixed Maturity Plan - Series 31
Nil (2015 - 1,00,00,000) Units of ` 10.00 each – 10.00
DWS Treasury Fund
Nil (2015 - 8,24,18,752) Units of ` 10.00 each – 86.77
DHFL Pramerica Ultra Short Term Fund
(Formerly known as DWS Ultra Short Term Fund)
5,09,80,716 Units of ` 10.00 each 49.74 49.74
HDFC Cash Management Fund - Treasury Advantage Plan
Nil (2015 - 2,34,21,163) Units of ` 10.00 each – 67.38
HDFC Floating Rate Income Fund - Short Term Plan
10,23,22,267 (2015 - Nil) Units of ` 10.00 each 267.06 –
HDFC High Interest Fund - Short Term Plan
Nil (2015 - 5,54,65,988) Units of ` 10.00 each – 150.00

Carried over 1077.94 1539.95 1223.41 1678.25

ITC Limited REPORT AND ACCOUNTS 2016 133

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

13. Current investments (at lower of cost and fair value) (Contd.)
Brought forward 1077.94 1539.95 1223.41 1678.25
INVESTMENT IN MUTUAL FUNDS (Contd.)
HDFC High Interest Fund - Dynamic Plan
1,06,18,432 (2015 - 1,06,18,417) Units of ` 10.00 each 55.64 50.00
HDFC Medium Term Opportunities Fund
13,70,31,285 (2015 - 13,70,33,144) Units of ` 10.00 each 226.61 201.11
HDFC Short Term Opportunities Fund
14,47,53,251 (2015 - 14,47,53,230) Units of ` 10.00 each 239.13 211.05
ICICI Prudential Banking & PSU Debt Fund
4,92,90,221 Units of ` 10.00 each 50.00 50.00
ICICI Prudential - Flexible Income Plan
53,44,324 (2015 - Nil) Units of ` 100.00 each 153.38 –
ICICI Prudential Blended Plan B
Nil (2015 - 3,86,97,174) Units of ` 10.00 each – 40.30
ICICI Prudential Dynamic Bond Fund
Nil (2015 - 3,59,60,193) Units of ` 10.00 each – 53.08
ICICI Prudential Income Opportunities Fund
7,98,55,052 (2015 - 7,98,54,771) Units of ` 10.00 each 168.21 150.00
ICICI Prudential Savings Fund
Nil (2015 - 50,35,980) Units of ` 100.00 each – 103.20
ICICI Prudential Short Term
7,64,50,849 (2015 - 7,64,51,068) Units of ` 10.00 each 241.15 213.10
ICICI Prudential Ultra Short Term
22,03,55,476 (2015 - 15,36,33,761) Units of ` 10.00 each 318.99 200.20
IDFC Dynamic Bond Fund
4,64,29,475 Units of ` 10.00 each 50.06 50.06
IDFC Money Manager Fund - Investment Plan
1,22,42,641 (2015 - 1,12,84,393) Units of ` 10.00 each 12.30 11.34
IDFC Money Manager Fund - Treasury Plan
4,22,87,680 (2015 - Nil) Units of ` 10.00 each 102.19 –
JPMorgan India Active Bond Fund
Nil (2015 - 9,68,66,060) Units of ` 10.00 each – 150.00
JPMorgan India Liquid Fund
Nil (2015 - 20,35,37,192) Units of ` 10.00 each – 208.74
JPMorgan India Treasury Fund
Nil (2015 - 5,78,55,112) Units of ` 10.00 each – 102.28
Kotak Bond Short Term
2,49,65,867 Units of ` 10.00 each 24.98 24.98
Kotak Liquid Scheme Plan A
Nil (2015 - 17,641) Units of ` 1000.00 each – 5.00
Kotak Treasury Advantage Fund
13,17,66,857 (2015 - 4,76,54,096) Units of ` 10.00 each 320.94 102.24
L&T Short Term Opportunities Fund
Nil (2015 - 3,00,07,277) Units of ` 10.00 each – 40.00
L&T Triple Ace Bond Fund
Nil (2015 - 1,62,81,386) Units of ` 10.00 each – 60.00
Reliance Floating Rate Fund - Short Term Plan
38,18,89,185 (2015 - 19,74,70,372) Units of ` 10.00 each 410.75 252.57
Reliance Liquid Fund - Treasury Plan
54,317 (2015 - Nil) Units of ` 1000.00 each 20.00 –

Carried over 1077.94 3934.28 1223.41 3957.50

134 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at 31st March, 2016 As at 31st March, 2015
(` in Crores) (` in Crores)
Quoted Unquoted Quoted Unquoted

13. Current investments (at lower of cost and fair value) (Contd.)
Brought forward 1077.94 3934.28 1223.41 3957.50
INVESTMENT IN MUTUAL FUNDS (Contd.)
Reliance Medium Term Fund
10,42,77,348 (2015 - 12,56,20,295) Units of ` 10.00 each 209.61 255.81
Reliance Short Term Fund
2,07,06,236 (2015 - 20,42,82,694) Units of ` 10.00 each 59.68 451.45
SBI Premier Liquid Fund
Nil (2015 - 1,13,914) Units of ` 1000.00 each – 25.00
UTI - Short Term Income Fund - Institutional Option
Nil (2015 - 5,06,50,712) Units of ` 10.00 each – 50.65
Current Portion of Non Current Investments (at cost)
INVESTMENT IN BONDS/DEBENTURES
Export Import Bank of India
450 (2015 - Nil) 8.20% Unsecured Redeemable Non-Convertible
Bonds 2015-16 Series S-10-2019 (18 February 2019 with Call/Put
Option on 18 February 2017) of ` 1000000.00 each, fully paid 45.00 –
1,000 (2015 - Nil) 8.33% Unsecured Redeemable Non-Convertible
Bonds 2015-16 Series S-12-2019 (20 March 2019 with Call/Put Option
on 20 March 2017) of ` 1000000.00 each, fully paid 100.00 –
500 (2015 - Nil) 7.825% Unsecured Redeemable Non-Convertible
Bonds 2015-16 Series S-07-2018 (30 November 2018 with Call/Put
Option on 15 March 2017) of ` 1000000.00 each, fully paid 49.83 –
500 (2015 - Nil) 8.20% Unsecured Redeemable Non-Convertible Bonds
2015-16 Series S-14-2019 (15 March 2019 with Call/Put Option on
16 March 2017) of ` 1000000.00 each, fully paid 50.00 –
National Bank for Agriculture and Rural Development
4,000 (2015 - Nil) 8.05% Unsecured Redeemable Non-Convertible
Taxable Bonds Series 16 H (04 January 2019 with Call/Put Option on
14 March 2017) of ` 1000000.00 each, fully paid 400.00 –
Rural Electrification Corporation Limited
2,850 (2015 - Nil) 8.28% Unsecured Redeemable Non-Convertible
Non-Cumulative Taxable Bond Series 138 (04 March 2017)
of ` 1000000.00 each, fully paid 285.00 –
Small Industries Development Bank of India
2,500 (2015 - Nil) 8.05% Unsecured Redeemable Non-Convertible
Bonds in the nature of Promissory Notes Series 1 of 2015-16
(28 January 2019 with Call/Put Option on 14 March 2017)
of ` 1000000.00 each, fully paid 250.00 –
Aggregate amount of quoted and unquoted Investments 1362.94 5098.40 1223.41 4740.41
TOTAL 6461.34 5963.82

Aggregate market value of quoted investments ` 1363.44 Crores (2015 - ` 1224.09 Crores)
Aggregate excess of cost over fair value ` 63.65 Crores (2015 - ` 148.43 Crores)

ITC Limited REPORT AND ACCOUNTS 2016 135

Notes to the Financial Statements
As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

14. Inventories
(At lower of cost and net realisable value)
Raw materials (including packing materials) 4888.81 4404.52
Work-in-progress 180.51 180.82
Finished goods (manufactured) 2744.79 2541.48
Stock-in-Trade (goods purchased for resale) 346.40 352.60
Stores and Spares 292.32 290.10
Intermediates - Tissue paper and Paperboards 66.99 67.24
TOTAL 8519.82 7836.76

The above includes goods in transit as under:

Raw materials (including packing materials) 110.82 84.05

Stock-in-Trade (goods purchased for resale) 5.76 0.53
Stores and Spares 3.44 1.76
TOTAL 120.02 86.34

15. Trade receivables

Outstanding for a period exceeding six months from the
date they are due for payment
Secured, considered good 1.16 0.59
Unsecured, considered good 41.94 30.05
Doubtful 70.74 52.91
113.84 83.55
Less: Provision for doubtful receivables 70.74 43.10 52.91 30.64
Others
Secured, considered good 26.07 24.47
Unsecured, considered good 1617.18 1667.29
Doubtful 1.86 0.88
1645.11 1692.64
Less: Provision for doubtful receivables 1.86 1643.25 0.88 1691.76
TOTAL 1686.35 1722.40

136 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

16. Cash and bank balances

Cash and cash equivalents@
Balances with Banks
Current accounts 67.73 27.65
Cheques, drafts on hand 5.14 5.60
Cash on hand 2.92 75.79 3.04 36.29
Other bank balances
Earmarked balances 153.99 134.89
In deposit accounts* 6334.17 6488.16 7417.43 7552.32

TOTAL 6563.95 7588.61

@ Cash and cash equivalents include cash on hand, cheques, drafts on hand, cash at bank and deposits with banks with original
maturity of 3 months or less.
* Represents deposits with original maturity of more than 3 months and includes deposits with remaining maturity of more than
12 months from the balance sheet date ` 900.00 Crores (2015 - ` 1300.00 Crores).

17. Short-term loans and advances

Unsecured, considered good unless otherwise stated
Loans and advances to Related Parties
Security deposits 0.70 0.17
Loans and advances
Secured, considered good – 35.07
Unsecured, considered good 13.49 14.19 48.48 83.72
Others
With Statutory authorities 229.24 213.47
Commercial advances and deposits
Secured, considered good 4.50 4.50
Unsecured, considered good (Refer Note 12) 149.51 154.01 166.13 170.63
Other Loans and Advances (Employees, unexpired expenses etc.) 104.40 82.07
TOTAL 501.84 549.89

Loans and advances to Related Parties include deposit with Director - Nil (2015 - ` 0.05 Crore) [Refer Note 33].

18. Other current assets

Interest accrued on loans, deposits etc. 58.34 83.56
Interest accrued on investments 192.09 55.45
Others*
Unsecured, considered good 151.01 154.54
Doubtful 4.11 3.60
155.12 158.14
Less: Provision for doubtful assets 4.11 151.01 3.60 154.54

TOTAL 401.44 293.55

* Others comprise receivables on account of export incentives, claims, interest, rentals, other receivables etc.

ITC Limited REPORT AND ACCOUNTS 2016 137

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

19. Gross income

Gross Revenue from sale of products and services* 51582.45 49964.82
Other operating revenue 362.12 424.19
Other income 1803.74 1543.13
TOTAL 53748.31 51932.14

* Net of sales returns and damaged stocks.

20. Gross Revenue from sale of products and services*

FMCG
– Cigarettes etc. 32348.29 30452.38
– Branded Packaged Food Products 7097.49 6411.27
– Others (Apparel, Education and Stationery Products,
Personal Care Products, Safety Matches, Agarbattis etc.) 2622.13 2617.00
Hotels
– Hotels Sales/Income from Hotel Services 1273.51 1173.55
Agri Business
– Unmanufactured Tobacco 1694.19 1574.46
– Other Agri Products and Commodities (Wheat, Soya, Spices, Coffee,
Aqua etc.) 2695.15 4097.61
Paperboards, Paper and Packaging
– Paperboards and Paper 3275.67 3149.11
– Printed Materials 576.02 489.44
TOTAL 51582.45 49964.82

* Net of sales returns and damaged stocks.

21. Revenue from operations

Sale of products 50308.94 48791.27
Sale of services 1273.51 1173.55
Gross Revenue from sale of products and services* 51582.45 49964.82
Other operating revenue 362.12 424.19
51944.57 50389.01
Less:
Excise duty attributable to products sold 15107.18 13881.61
TOTAL 36837.39 36507.40

* Net of sales returns and damaged stocks.

138 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

22. Other income

Interest income 851.63 611.22
Dividend income
– Long-term investments
– Subsidiary companies 319.33 347.37
– Other long-term investments 19.59 10.18
338.92 357.55
– Current investments 37.98 376.90 219.37 576.92
Net gain on sale of current investments 553.67 334.44
Other non-operating income 21.54 20.55
TOTAL 1803.74 1543.13

Interest income comprises interest from:

a) Deposits with Banks/Financial Institutions 557.90 456.67
b) Current investments 135.18 114.20
c) Long-term investments 123.26 –
d) Others (from customers, statutory authorities etc.) 35.29 40.35
TOTAL 851.63 611.22

23. Cost of materials consumed

Unmanufactured Tobacco 1764.47 1802.39
Board, Film and Laminates 631.34 650.57
Filter Rods 340.62 364.47
Wheat 1860.65 1392.81
Edible Oils 404.06 406.49
Sugar 243.64 255.15
Wheat Flour (Maida) 370.68 355.09
Waste Paper and Pulp 804.29 878.26
Chemicals and Fragrances 584.92 609.56
Hardwood and Bamboo 796.29 799.40
Coffee 367.09 451.09
Others (Hotel Consumables, Inks and Solvents, Skimmed
Milk Powder, Packing Materials etc.) 2886.70 3022.55
TOTAL 11054.75 10987.83

24. Purchases of Stock-in-Trade

Soya Seeds 191.97 432.10
Wheat 856.20 1885.01
Safety Matches 204.33 227.22
Coffee 361.07 528.85
Others (Spices, Apparel, Agarbattis, Education and Stationery Products etc.) 976.51 825.48
TOTAL 2590.08 3898.66

ITC Limited REPORT AND ACCOUNTS 2016 139

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

25. Changes in inventories of finished goods,

Work-in-progress, Stock-in-Trade and Intermediates
Finished goods (manufactured)
Opening stock 2541.48 2000.28
Acquired pursuant to the Scheme of Arrangement
[Refer Note 31(x)] – 0.40
Closing stock 2744.79 (203.31) 2541.48 (540.80)
Work-in-progress
Opening stock 180.82 142.29
Acquired pursuant to the Scheme of Arrangement
[Refer Note 31(x)] – 3.03
Closing stock 180.51 0.31 180.82 (35.50)
Stock-in-Trade (goods purchased for resale)
Opening stock 352.60 297.73
Closing stock 346.40 6.20 352.60 (54.87)
Intermediates - Tissue paper and Paperboards
Opening stock 67.24 75.29
Closing stock 66.99 0.25 (196.55) 67.24 8.05 (623.12)
Excise duties on increase/(decrease) of finished goods 254.72 408.59
TOTAL 58.17 (214.53)

26. Employee benefits expense

Salaries and wages 1558.62 1534.33
Contribution to Provident and other funds 171.32 108.25
Staff welfare expenses 178.95 167.28
1908.89 1809.86
Less: Recoveries made /reimbursements received 25.38 29.82
TOTAL 1883.51 1780.04

27. Finance costs

Interest expense 49.13 35.41
Applicable net loss on foreign currency transactions and
translations – 22.01
TOTAL 49.13 57.42

140 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

28. Other expenses

Power and fuel 541.57 581.65
Consumption of stores and spare parts 248.45 231.33
Contract processing charges 801.44 818.47
Rent [Refer Note 31(vii)] 296.18 272.76
Rates and taxes 628.88 484.21
Insurance 56.31 58.02
Repairs
– Buildings 56.72 54.71
– Machinery 185.33 169.97
– Others 50.60 48.72
Maintenance and upkeep 160.94 144.99
Outward freight and handling charges 836.86 890.46
Warehousing charges 129.49 111.18
Advertising/Sales promotion 871.27 713.06
Market research 93.05 96.26
Design and product development 46.41 37.45
Hotel reservation/ Marketing expenses 31.62 28.96
Retail accessories 190.41 185.16
Brokerage and discount - sales 8.60 17.44
Commission to selling agents 46.16 37.22
Doubtful and bad debts 22.40 19.79
Doubtful and bad advances, loans and deposits - Net (9.50) 0.54
Bank and credit card charges 22.80 21.03
Information technology services 224.47 191.92
Travelling and conveyance 235.97 225.56
Training and development 19.78 20.06
Legal expenses 33.20 22.38
Consultancy/Professional fees 81.65 95.66
Postage, telephone etc. 26.85 26.03
Printing and stationery 16.78 17.77
Provision for investment in subsidiary companies, reversed - Net (26.00) –
Loss on sale of long-term investment in subsidiary company 34.48 –
Net loss /(gain) on foreign currency transactions and translations 5.02 (40.79)
Excess of cost of current investments over fair value, reversed - Net (84.78) (29.53)
Loss on sale of fixed assets - Net 45.21 24.89
Loss on sale of stores and spare parts - Net 2.32 2.38
Miscellaneous expenses 1081.71 1002.14
TOTAL 7012.65 6581.85
Miscellaneous expenses include:
(1) Auditors’ remuneration and expenses*
Audit fees 2.65 1.95
Tax audit fees 0.55 0.48
Fees for limited review 0.93 0.84
Fees for other services # 1.83 1.52
Reimbursement of expenses 0.52 0.37
(2) Cost auditors’ fees 0.09 0.01

* Excluding taxes.
# Includes remuneration for professional services rendered by firms of auditors in which some of the partners of the statutory auditors
firm are partners ` 0.53 Crore (2015 - ` 0.11 Crore).

ITC Limited REPORT AND ACCOUNTS 2016 141

Notes to the Financial Statements
For the year ended For the year ended
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

29. Current tax

Income tax for the year
Current Tax 4948.76 4043.28
Adjustments/(credits) related to previous years - Net
Current Tax (51.15) (22.29)
Fringe Benefit Tax (1.55) –
TOTAL 4896.06 4020.99

30. Deferred tax

Deferred tax for the year 166.47 353.15
Adjustments / (credits) related to previous years - Net 51.15 15.65
TOTAL 217.62 368.80

31. Additional Notes to the Financial Statements

(i) Earnings per share 2016 2015

Earnings per share has been computed as under:

(a) Profit for the year (` in Crores) 9844.71 9607.73
(b) Weighted average number of Ordinary shares outstanding 8,02,69,56,418 7,97,62,97,104
(c) Effect of potential Ordinary shares on Employee Stock Options
outstanding 4,51,49,611 7,54,08,227
(d) Weighted average number of Ordinary shares in computing
diluted earnings per share [(b)+ (c)] 8,07,21,06,029 8,05,17,05,331
(e) Earnings per share on profit for the year
(Face Value ` 1.00 per share)
– Basic [(a)/(b)] ` 12.26 ` 12.05
– Diluted [(a)/(d)] ` 12.20 ` 11.93

(ii) Expenditure incurred under Section 135 of the Companies Act, 2013 on Corporate Social Responsibility (CSR) activities -` 247.50
Crores (2015 - ` 214.06 Crores) comprising employee benefits expense of ` 7.01 Crores (2015 - ` 7.61 Crores) and other expenses
of ` 240.49 Crores (2015 - ` 206.45 Crores) of which ` 17.04 Crores (2015 - ` 12.67 Crores) is accrued for payment as on 31st
March, 2016. Such CSR expenditure of ` 247.50 Crores (2015 - ` 214.06 Crores) excludes ` 11.43 Crores (2015 - ` 4.97 Crores)
being the excess of expenditure of salaries of CSR personnel and administrative expenses over the limit imposed of 5% of total
CSR expenditure laid down under Rule 4(6) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 for such
expenses.
(iii) Research and Development expenses for the year amount to ` 121.91 Crores (2015 - ` 105.79 Crores).
(iv) Contingent liabilities and commitments:
(a) Contingent liabilities
(i) Claims against the Company not acknowledged as debts ` 581.25 Crores (2015 - ` 558.25 Crores), including interest on
claims, where applicable, estimated to be ` 178.47 Crores (2015 - ` 153.37 Crores). These comprise:
Excise duty, VAT / sales taxes and other indirect taxes claims disputed by the Company relating to issues of applicability
and classification aggregating ` 471.42 Crores (2015 - ` 450.01 Crores), including interest on claims, where applicable,
estimated to be ` 159.98 Crores (2015 - ` 135.58 Crores).
Local Authority taxes/cess/royalty on property, utilities, etc. claims disputed by the Company relating to issues of
applicability and determination aggregating ` 73.36 Crores (2015 - ` 68.79 Crores), including interest on claims, where
applicable, estimated to be ` 14.46 Crores (2015 - ` 13.47 Crores).
Third party claims arising from disputes relating to contracts aggregating ` 29.10 Crores (2015 - ` 29.19 Crores),
including interest on claims, where applicable, estimated to be ` 0.25 Crore (2015 - ` 0.14 Crore).

142 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

Other matters ` 7.37 Crores (2015 - ` 10.26 Crores), including interest on other matters, where applicable, estimated
to be ` 3.78 Crores (2015 - ` 4.18 Crores).
It is not practicable for the Company to estimate the closure of these issues and the consequential timings of cash
flows, if any, in respect of the above.
(ii) Corporate Guarantee given to Yes Bank Limited for credit facility availed by Broadcast Audience Research Council (BARC)
outstanding - ` 1.30 Crores (2015 - ` 1.30 Crores).
(b) Commitments
Estimated amount of contracts remaining to be executed on capital accounts and not provided for ` 2039.83 Crores
(2015 - ` 1432.41 Crores).
Uncalled liability on shares partly paid is ` 26.40 Crores (2015 - ` 26.40 Crores).
(v) (a) Defined Benefit Plans/Long Term Compensated Absences - As per Actuarial Valuations as on March 31, 2016 and recognised
in the financial statements in respect of Employee Benefit Schemes:

For the year ended For the year ended

31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)
Pension Gratuity Leave Pension Gratuity Leave
Encashment Encashment
Funded Unfunded Funded Unfunded
I Components of Employer Expense
1 Current Service Cost 44.34 19.65 4.87 43.17 25.39 4.49
2 Interest Cost 42.38 19.44 6.54 42.66 18.12 6.18
3 Expected Return on Plan Assets (50.53) (20.18) – (48.33) (18.39) –
4 Curtailment Cost /(Credit) – – – – – –
5 Settlement Cost /(Credit) – – – – – –
6 Past Service Cost – – – – – –
7 Actuarial Losses /(Gains) 27.01 16.91 11.59 (38.67) 12.01 1.26
8 Total expense recognised in the
Statement of Profit and Loss 63.20 35.82 23.00 (1.17) 37.13 11.93
The Pension and Gratuity expenses have been recognised in “Contribution to Provident and other funds” and Leave
Encashment in “Salaries and wages” under Note 26.
Pension Gratuity Leave Pension Gratuity Leave
Encashment Encashment
II Actual Returns 49.12 22.21 – 87.23 27.65 –
III Net Asset / (Liability) recognised in
Balance Sheet
1 Present Value of Defined Benefit
Obligation 627.53 293.99 90.82 615.05 282.51 80.75
2 Fair Value of Plan Assets 640.50 273.12 – 663.53 247.57 –
3 Status [Surplus/(Deficit)] 12.97 (20.87) (90.82) 48.48 (34.94) (80.75)
4 Unrecognised Past Service Cost – – – – – –
5 Net Asset / (Liability) recognised in
Balance Sheet 12.97 (20.87) (90.82) 48.48 (34.94) (80.75)
– Current 12.97 (20.87) (16.46) 48.48 (34.94) (16.71)
– Non-current – – (74.36) – – (64.04)

ITC Limited REPORT AND ACCOUNTS 2016 143

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

For the year ended For the year ended

31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave

Encashment Encashment
IV Change in Defined Benefit
Obligation (DBO)
1 Present Value of DBO at the
beginning of the year 615.05 282.51 80.75 571.88 249.86 76.09
2 Current Service Cost 44.34 19.65 4.87 43.17 25.39 4.49
3 Interest Cost 42.38 19.44 6.54 42.66 18.12 6.18
4 Curtailment Cost /(Credit) – – – – – –
5 Settlement Cost /(Credit) – – – – – –
6 Plan Amendments – – – – – –
7 Acquisitions – – – – – –
8 Actuarial (Gains)/Losses 25.60 18.94 11.59 0.23 21.27 1.26
9 Benefits Paid (99.84) (46.55) (12.93) (42.89) (32.13) (7.27)
10 Present Value of DBO at the
end of the year 627.53 293.99 90.82 615.05 282.51 80.75
V Best Estimate of Employers’ Expected
Contribution for the next year 56.73 19.04 – 73.52 38.29 –
VI Change in Fair Value of Assets
1 Plan Assets at the beginning of the year 663.53 247.57 – 583.78 226.99 –
2 Acquisition Adjustment – – – – – –
3 Expected Return on Plan Assets 50.53 20.18 – 48.33 18.39 –
4 Actuarial Gains/(Losses) (1.41) 2.03 – 38.90 9.26 –
5 Actual Company Contributions 27.69 49.89 – 35.41 25.06 –
6 Benefits Paid (99.84) (46.55) – (42.89) (32.13) –
7 Plan Assets at the end of the year 640.50 273.12 – 663.53 247.57 –
VII Actuarial Assumptions
1 Discount Rate (%) 7.50 7.50 7.50 7.75 7.75 7.75
2 Expected Return on Plan Assets (%) 7.75 7.75 – 7.75 7.75 –
The estimates of future salary increases, considered in actuarial valuations take account of inflation, seniority, promotion
and other relevant factors such as supply and demand factors in the employment market.
VIII Major Category of Plan Assets
as a % of the Total Plan Assets As at 31st March, 2016 As at 31st March, 2015

1 Government Securities/Special
Deposit with RBI 33.68% 34.57%
2 High Quality Corporate Bonds 25.28% 28.05%
3 Insurer Managed Funds* 31.88% 26.96%
4 Mutual Funds 2.24% 2.72%
5 Cash and Cash Equivalents 3.73% 4.49%
6 Term Deposits 3.19% 3.21%
* In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of
each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not
been disclosed.

144 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

IX Basis used to determine the Expected Rate of Return on Plan Assets

The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario.
In order to protect the capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.
For the year ended For the year ended For the year ended For the year ended For the year ended
31st March, 2016 31st March, 2015 31st March, 2014 31st March, 2013 31st March, 2012
(` in Crores) (` in Crores) (` in Crores) (` in Crores) (` in Crores)

Pension Gratuity Leave Pension Gratuity Leave Pension Gratuity Leave Pension Gratuity Leave Pension Gratuity Leave
Encashment Encashment Encashment Encashment Encashment
X Net Asset/(Liability) recognised
in Balance Sheet (including
experience adjustment impact)
1 Present Value of Defined
Benefit Obligation 627.53 293.99 90.82 615.05 282.51 80.75 571.88 249.86 76.09 612.41 237.87 69.86 533.19 211.49 58.62
2 Fair Value of Plan Assets 640.50 273.12 – 663.53 247.57 – 583.78 226.99 – 600.65 225.13 – 520.47 220.29 –
3 Status [Surplus/(Deficit)] 12.97 (20.87) (90.82) 48.48 (34.94) (80.75) 11.90 (22.87) (76.09) (11.76) (12.74) (69.86) (12.72) 8.80 (58.62)
4 Experience Adjustment of
Plan Assets [Gain/(Loss)] (1.41) 2.03 – 19.65 6.29 – (4.22) (0.09) – 13.52 3.54 – (4.14) (0.43) –
5 Experience Adjustment of
obligation [(Gain)/Loss] 34.40 21.23 14.49 (54.42) 11.99 (6.06) (20.35) 4.85 3.24 (34.52) 1.45 2.31 (18.06) 6.48 0.59
(b) Amounts towards Defined Contribution Plans have been recognised under “Contribution to Provident and other funds” in
Note 26: ` 72.30 Crores (2015 - ` 72.29 Crores).
(vi) Micro, Small and Medium scale business entities:
A sum of ` 34.13 Crores is payable to Micro and Small Enterprises as at 31st March, 2016 (2015 - ` 24.56 Crores). The above
amount comprise ` 32.92 Crores (2015 - ` 21.91 Crores) on account of trade payable and ` 1.21 Crores (2015 - ` 2.65 Crores)
on account of other current liabilities. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues,
which are outstanding for more than 45 days during the year and also as at 31st March, 2016. This information as required to be
disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties
have been identified on the basis of information available with the Company.
(vii) 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 payable
are charged as ‘Rent’ under Note 28.
With regard to certain other non-cancellable operating leases for premises, the future minimum rentals are as follows:

As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

Not later than one year 12.74 18.31

Later than one year and not later than five years 15.13 6.74
Later than five years 0.35 0.92

(viii) Interests in Joint Ventures:

a. The Company’s interest, as a venturer, in jointly controlled entities (Incorporated Joint Ventures) is:
Name Country of Percentage of Percentage of
Incorporation ownership ownership
interests as at interests as at
31st March, 2016 31st March, 2015

Maharaja Heritage Resorts Limited India 25% 25%

Espirit Hotels Private Limited India 26% 26%
Logix Developers Private Limited (LDPL) India 27.90% 27.90%

ITC Limited REPORT AND ACCOUNTS 2016 145

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

b. The Company’s interest in these Joint Ventures is reported as Long Term investments (Note 11) and stated at cost. However,
the Company’s share of each of the assets, liabilities, income and expenses, etc. (each without elimination of the effect of
transactions between the Company and the Joint Venture) related to its interests in these Joint Ventures are:

As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

I ASSETS
Non-current assets
1 Fixed assets 98.67 98.66
a) Tangible assets 44.92 44.92
b) Intangible assets ... ...
c) Capital work-in-progress - Tangible assets 53.75 53.74
2 Deferred tax assets (Net) 0.27 0.29
3 Long-term loans and advances 0.20 0.22
Current assets
4 Current investments 0.19 0.19
5 Trade receivables 0.16 0.24
6 Cash and cash equivalents 1.31 1.24
7 Short-term loans and advances 0.01 0.01
II LIABILITIES
Non-current liabilities
1 Long-term borrowings 16.15 20.91
2 Long-term provisions 0.01 0.01
Current liabilities
3 Trade payables 0.71 0.83
4 Other current liabilities 24.66 14.77
5 Short-term Provisions ... ...
For the year ended For the year ended
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)
III INCOME
1 Net Revenue from sale of products and services 0.87 0.81
2 Other operating revenue 0.05 0.12
3 Other income 0.03 0.03
IV EXPENSES
1 Employee benefits expense 0.59 0.59
2 Finance Costs 4.71 –
3 Depreciation and amortisation expense 0.01 0.01
4 Other expenses 0.65 0.28
5 Tax expense 0.02 0.06

As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

V OTHER MATTERS
1 Capital Commitments 9.49 9.30

146 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

c. Under the terms of the Joint Venture Agreement (JVA), Logix Developers Private Limited (LDPL) was to develop a luxury hotel-
cum-service apartment complex. However, Logix Estates Private Ltd., Noida, the JV partner communicated its intention to
explore alternative development plans and did not contribute its share of the cash call made by LDPL in June 2014. The
resultant deadlock has stalled the project. The Company’s petition, filed during the year, praying for a direction to the JV partner
to act in accordance with the Articles of Association of LDPL and complete the project or for appropriate directions for the
company to exit from the JV in terms of the JVA, is pending before the Company Law Board. Further, the financial statements
of LDPL for the year ended 31st March 2016 are yet to be approved by its Board of Directors. Accordingly, the share of assets,
liabilities, income and expenses etc., pertaining to LDPL included above are based on financial statements certified by the
management of LDPL.

(ix) Derivative Instruments:

The Company uses forward exchange contracts and currency options to hedge its exposures in foreign currency related to firm
commitments and highly probable forecasted transactions. The information on derivative instruments is as follows:
a) Forward exchange contracts outstanding as at year end:
(in Million)
As at 31st March, 2016 As at 31st March, 2015

Currency Cross Currency Buy Sell Buy Sell

US Dollar Indian Rupee 65.75 173.65 18.94 149.80
Euro US Dollar 53.26 – 14.95 –
AUD US Dollar 1.20 – 0.08 –
CAD US Dollar – 0.20 – 1.07
CHF US Dollar 2.70 – 3.41 –
GBP US Dollar – 0.90 0.25 0.90
SGD US Dollar 1.78 – – –
SEK US Dollar 6.93 – 1.21 –
KWD US Dollar 0.04 – – –
JPY US Dollar 699.90 – 172.33 –

b) Foreign currency exposures that have not been hedged by a derivative instrument or otherwise as at year end:
(in Million)
As at 31st March, 2016 As at 31st March, 2015

Currency Cross Currency Buy Sell Net* Buy Sell Net*

US Dollar Indian Rupee 41.13 36.18 4.95 44.10 48.83 (4.73)
Euro US Dollar 0.89 1.02 (0.13) 0.80 0.84 (0.04)
GBP US Dollar 0.97 0.86 0.11 0.75 0.81 (0.06)
JPY US Dollar 3.65 – 3.65 3.50 – 3.50
SEK US Dollar 0.54 – 0.54 0.24 – 0.24
KWD US Dollar ... ... ... – – –
CHF US Dollar 0.08 – 0.08 0.02 – 0.02
SGD US Dollar 0.34 – 0.34 0.18 – 0.18
CAD US Dollar 0.01 0.02 (0.01) – 0.06 (0.06)
HKD US Dollar 0.10 – 0.10 – – –
AED US Dollar 0.01 – 0.01 – – –
AUD US Dollar 0.05 – 0.05 0.06 ... 0.06

* Figures in brackets indicate open exports. Figures without brackets indicate open imports.

ITC Limited REPORT AND ACCOUNTS 2016 147

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

(x) Pursuant to the Scheme of Arrangement for demerger of the Non-Engineering Business of Wimco Limited (‘Wimco’) into ITC
Limited (the Scheme), as approved by the shareholders of the Company and subsequently sanctioned by the Honourable High
Courts at Bombay and Calcutta vide their Orders dated 10th April, 2014 and 14th May, 2014 respectively, the entire assets and
liabilities, as at 1st April 2013, of the Non-Engineering Business of Wimco were transferred to and vested in the Company on a
going concern basis with effect from 1st April, 2013. The Scheme had been given effect to in the financial statements of the
Company for the year ended 31st March, 2015.
As a result, in the financial statements as at, and for the year ended 31st March, 2015:
a) the excess of value of the net assets of the Non-Engineering business of Wimco over the sum of face value of the shares
allotted and cancellation of the Company’s investment in Wimco, amounting to ` 91.00 Crores was debited to General Reserve.
b) the loss of ` 8.01 Crores for the year from 1st April, 2013 to 31st March, 2014 has been recognised as an adjustment to the
revenue reserves.
c) earlier unrecognised net deferred tax assets of ` 45.84 Crores on carry forward of business losses and other net timing
differences of Wimco have also been recognised as an adjustment to revenue reserves.
d) in consideration of the above, the Company had issued and allotted 87,761 Ordinary Shares of ` 1.00 each.

(xi) Pursuant to the notification of Schedule II of the Companies Act 2013, with effect from 1st April 2014, the Company had reviewed
and revised the estimated useful lives of its fixed assets. In respect of assets, whose useful life was exhausted as at 1st April,
2014, the related carrying amount aggregating to ` 48.32 Crores (net of deferred tax of ` 24.88 Crores) had been adjusted against
opening balance of Surplus in the Statement of Profit and Loss during 2014-15.
(xii) (a) Details of Opening and Closing Stock of Finished Goods (manufactured) and Stock-in-Trade (goods purchased for resale)

As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)
Opening Stock
Cigarettes 1731.54 1309.87
Branded Packaged Food Products 229.99 212.14
Agri Products/Commodities (Soya, Spices, Coffee,
Aqua, Agri Inputs etc.) 259.44 251.99
Paperboards and Paper 114.11 90.06
Printed Materials 5.02 6.94
Others (Apparel, Education and Stationery Products,
Personal Care Products, Safety Matches, Agarbattis etc.) 553.98 2894.08 427.01 2298.01
Acquired pursuant to the Scheme of Arrangement
[Refer Note 31(x)]
Others (Safety Matches) – – 0.40 0.40
Closing Stock
Cigarettes 2047.68 1731.54
Branded Packaged Food Products 275.60 229.99
Agri Products /Commodities (Soya, Spices, Coffee,
Aqua, Agri Inputs etc.) 184.11 259.44
Paperboards and Paper 83.92 114.11
Printed Materials 7.27 5.02
Others (Apparel, Education and Stationery Products,
Personal Care Products, Safety Matches, Agarbattis etc.) 492.61 3091.19 553.98 2894.08

148 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

(b) Details of Opening and Closing Stock of Work-in-progress

As at As at
31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)
Opening Stock
Branded Packaged Food Products 17.94 15.69
Paperboards and Paper 136.84 103.55
Printed Materials 20.78 15.83
Others (Apparel, Personal Care Products, etc.) 5.26 180.82 7.22 142.29
Acquired pursuant to the Scheme of Arrangement
[Refer Note 31(x)]
Paperboards and Paper – 2.28
Others (Safety Matches) – – 0.75 3.03
Closing Stock
Branded Packaged Food Products 34.45 17.94
Paperboards and Paper 119.41 136.84
Printed Materials 21.36 20.78
Others (Apparel, Personal Care Products, etc.) 5.29 180.51 5.26 180.82

For the year ended For the year ended

31st March, 2016 31st March, 2015
(xiii) Value of Imports during the year (C.I.F. Basis) (` in Crores) (` in Crores)

Raw materials 1247.18 1429.00

Components and spare parts (including stores) 61.55 68.92
Purchase of Trademarks – 43.65
Capital goods 211.25 292.56
Other goods* 15.36 17.98

TOTAL 1535.34 1852.11

* Includes Goods purchased for resale, Packing Materials, Hotel Consumables and sundry items.

(xiv) Expenditure in Foreign Currency during the year

Professional fees 30.76 24.68

Hotel reservation/Marketing expenses 31.48 30.45
Export promotion expenses 4.38 5.66
Agency commission 12.38 10.13
Interest – 2.39
Licence fees 5.69 5.04
Miscellaneous expenditure* 51.66 38.29

TOTAL 136.35 116.64

* Includes Advertisements/Sales promotion, Training, Subscription fees etc.

ITC Limited REPORT AND ACCOUNTS 2016 149

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

(xv) Value of Raw materials, Spare parts and Components consumed during the year

(Percentage) For the year ended For the year ended

31st March, 2016 31st March, 2015
2016 2015 (` in Crores) (` in Crores)
Raw materials (including packing material)
Imported 12.17 13.86 1345.56 1523.07

Indigenous 87.83 86.14 9709.19 9464.76

TOTAL 100.00 100.00 11054.75 10987.83
Spare parts and Components
Imported 28.15 28.59 69.93 66.13
Indigenous 71.85 71.41 178.52 165.20
TOTAL 100.00 100.00 248.45 231.33

(xvi) Dividend remittance in foreign currency

Year On Account of No. of No. of (` in Crores)

of Remittance Financial Year Non-Resident Shares
Shareholders held
2015/2016 2014/2015 53 2,43,40,08,262 1521.26
2014/2015 2013/2014 53 2,43,48,32,720 1460.90

(xvii) Earnings in foreign exchange during the year

For the year ended For the year ended

31st March, 2016 31st March, 2015
(` in Crores) (` in Crores)

Export of Goods (F.O.B.) 3057.85 4253.18

Hotel earnings 533.76 779.01

Freight and Insurance recoveries 33.36 42.46
Dividend 9.96 12.37
Other earnings* 8.81 8.97

TOTAL 3643.74 5095.99

* Consist of finance and storage charges and sundry recoveries.

150 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

(xviii) Information in respect of Options granted under the Company’s Employee Stock Option Schemes (‘Schemes’):

Sl. ITC Employee Stock Option ITC Employee Stock Option ITC Employee Stock Option
No. Scheme (introduced in 2001) Scheme - 2006 Scheme - 2010

1. Date of Shareholders’ approval : 17-01-2001 22-01-2007 23-07-2010

2. Total number of Options : Options equivalent to Options equivalent to Options equivalent to

approved under the Schemes 12,27,07,450 Ordinary 36,22,61,893 Ordinary 38,26,70,153 Ordinary
Shares of ` 1/- each Shares of ` 1/- each Shares of ` 1/- each

Note: Adjusted for Bonus Shares issued in terms of Shareholders approval.

3. Vesting Schedule : The vesting period for conversion of Options is as follows:

On completion of 12 months from the date of grant of the Options : 30% vests
On completion of 24 months from the date of grant of the Options : 30% vests
On completion of 36 months from the date of grant of the Options : 40% vests

4. Pricing Formula : The Pricing Formula, as approved by the Shareholders of the Company, is such price, as
determined by the Nomination & Compensation Committee, which is no lower than the closing
price of the Company’s Share on the National Stock Exchange of India Limited (‘the NSE’) on
the date of grant, or the average price of the Company’s Share in the six months preceding the
date of grant based on the daily closing price on the NSE, or the ‘Market Price’ as defined from
time to time under the erstwhile Securities and Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, and the Securities
and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
The Options have been granted at ‘market price’ as defined from time to time under the
aforesaid Guidelines/Regulations.

5. Maximum term of Options granted : 5 years from the date of grant 5 years from the date of vesting

6. Source of Shares : Primary

7. Variation in terms of Options : None

8. Method used for accounting of : The employee compensation cost has been calculated using the intrinsic value method of accounting
share-based payment plans for Options issued under the Company’s Employee Stock Option Schemes. The employee
compensation cost as per the intrinsic value method for the financial year 2015-16 is Nil.

9. Nature and extent of employee : Each Option entitles the holder thereof to apply for and be allotted ten Ordinary Shares of the
share based payment plans Company of ` 1/- each upon payment of the exercise price during the exercise period.
that existed during the period The exercise period commences from the date of vesting of the Options and expires at the end
including the general terms and of five years from (i) the date of grant in respect of Options granted under the ITC Employee Stock
conditions of each plan. Option Scheme (introduced in 2001) and (ii) the date of vesting in respect of Options granted under
the ITC Employee Stock Option Scheme - 2006 & the ITC Employee Stock Option Scheme - 2010.
The above is in addition to the other terms and conditions provided in the table under Serial Nos.
(3) to (5) hereinbefore.

ITC Limited REPORT AND ACCOUNTS 2016 151

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

10. Weighted average exercise : Weighted average exercise price per Option : ` 3200.41
prices and weighted average Weighted average fair value per Option : ` 755.90
fair values of Options whose
exercise price either equals or
exceeds or is less than the
market price of the stock.

11. Option movements during the year : ITC Employee Stock Option ITC Employee Stock Option ITC Employee Stock Option
Scheme (introduced in 2001) Scheme - 2006 Scheme - 2010

a) Options outstanding at the : 4,22,036 54,26,488 2,10,86,617

beginning of the year

b) Options granted during the year : - 63,840 68,45,760

c) Options cancelled and lapsed : - 64,840 4,81,229

during the year

d) Options vested and exercisable : - 1,06,505 57,00,166

during the year (net of Options
lapsed and exercised)

e) Options exercised during the year : 2,40,976 18,85,864 10,41,905

f) Number of Ordinary Shares of : 24,09,760 1,88,58,640 1,04,19,050

` 1/- each arising as a result of
exercise of Options during
the year

g) Options outstanding at the end : 1,81,060 35,39,624 2,64,09,243

of the year

h) Options exercisable at the end : 1,81,060 34,39,619 1,25,84,442

of the year

i) Money realised by exercise : 48.76 242.18 240.76

of the Options during the
year (` in Crores)

12. Summary of the status of Options :

Particulars As at 31st March, 2016 As at 31st March, 2015
No. of Options Weighted Average No. of Options Weighted Average
Exercise Prices (`) Exercise Prices (`)
Outstanding at the beginning : 2,69,35,141 2609.34 2,65,81,347 2120.63
of the year
Add: granted during the year : 69,09,600 3200.41 68,26,355 3572.00
Less: Lapsed during the year : 5,46,069 3012.09 2,47,678 2753.48
Less: Exercised during the year : 31,68,745 1677.95 62,24,883 1572.39
Outstanding at the end of the year : 3,01,29,927 2835.55 2,69,35,141 2609.34
Options exercisable at the end of : 1,62,05,121 2452.64 1,30,61,292 2003.27
the year

152 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

13. Weighted average share price : The Options were exercised during the periods permitted under the Schemes, and weighted
of Shares arising upon exercise average share price of Shares arising upon exercise of Options, based on the closing market
of Options price on NSE on the date of exercise of Options (i.e. the date of allotment of shares
by the Securityholders Relationship Committee) for the year ended 31st March, 2016 was
` 322.18 (31st March, 2015 - ` 357.59).

14. Summary of Options outstanding, scheme-wise:

Particulars As at 31st March, 2016 As at 31st March, 2015

No. of Options Range of Weighted Average No. of Options Range of Weighted Average
Outstanding Exercise Prices (`) remaining Outstanding Exercise Prices (`) remaining
contractual life contractual life

ITC Employee Stock Option : 1,81,060 2023.50 0.40 4,22,036 2023.50 1.41
Scheme (introduced in 2001)

ITC Employee Stock Option : 35,39,624 948.00 - 3572.00 1.79 54,26,488 830.50 - 3572.00 2.38
Scheme - 2006

ITC Employee Stock Option : 2,64,09,243 2023.50 - 3572.00 4.91 2,10,86,617 2023.50 - 3572.00 5.32
Scheme - 2010

15. A description of the method used : The fair value of each Option is estimated using the Black Scholes Option Pricing model.
during the year to estimate the fair
Weighted average exercise price per Option : ` 3200.41
values of Options, the weighted
average exercise prices and Weighted average fair value per Option : ` 755.90
weighted average fair values of
Options granted.

The significant assumptions used : The fair value of each Option is estimated using the Black Scholes Option Pricing model after applying the
to ascertain the above. following key assumptions on a weighted average basis:
(i) Risk-free interest rate 7.70%
(ii) Expected life 3.21years
(iii) Expected volatility 24.56%
(iv) Expected dividends 1.76%
(v) The price of the underlying shares in market at the time of Option grant ` 3167.15
(One Option = 10 Ordinary Shares)

16. Methodology for determination of : The volatility used in the Black Scholes Option Pricing model is the annualized standard deviation of the
expected volatility. continuously compounded rates of return on the stock over a period of time. The period considered for the
working is commensurate with the expected life of the Options and is based on the daily volatility of the
Company’s stock price on NSE. The Company has incorporated the early exercise of Options by calculating
expected life on past exercise behaviour. There are no market conditions attached to the grant and vest.

ITC Limited REPORT AND ACCOUNTS 2016 153

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

17. Difference between the employee : ` 510.08 crores

compensation cost so computed
at (8) above and the employee
compensation cost that shall have
been recognised if it had used the
fair value of the Options.

18. The impact of this difference on : The effect on the profits and earnings per share, had the fair value method been adopted, is presented below:
profits and on Earnings Per Share Profit After Tax ` in Crores
of the Company. As reported 9844.71
Add: Intrinsic Value Compensation Cost Nil
Less: Fair Value Compensation Cost 510.08
(Black Scholes model)
Adjusted Profit 9334.63
Earnings Per Share Basic (`) Diluted (`)
As reported 12.26 12.20
As adjusted 11.63 11.56

19. Options granted to

(a) Senior managerial personnel : As provided below:-

Name Designation No. of Options granted

during the financial year
2015-16
1 Y. C. Deveshwar Executive Chairman 2,70,000
2 N. Anand Executive Director 1,35,000
3 S. Puri Executive Director 56,250
4 R. Tandon Executive Director and
Chief Financial Officer 56,250
5 K. Vaidyanath Non-Executive Director 10,000
6 S. M. Ahmad On deputation 25,300
7 A. Ambasta Executive V. P. and
Head - Social Investments 17,600
8 G. Anand Executive V. P.,
Pre-Opening Services (HD) 15,000
9 N. Arif Executive V.P. and
Head - Corporate Communications 32,000
10 R. Batra On deputation 25,300
11 S. K. Bezbaroa Executive V.P. - Corporate EHS 17,600
12 R. Bhandari Chief Operating Officer - ITC Hotels /
WelcomHotels (HD) 15,000
13 A. Chand Divisional Chief Executive (LRBD) 23,000
14 L. C. Chandrasekharan Chief Scientist - Research & Technology
Innovation (LS & T) 28,800
15 B. B. Chatterjee Executive V.P. and Company Secretary 40,000
16 C. Dar Group Head - LS & T, Projects, EHS and
Quality Assurance 40,000
17 Saradindu Dutta Head - Corporate Accounts 21,280
18 Supratim Dutta Executive V.P. - Corporate Finance 30,600
19 M. Ganesan Executive V.P. - Finance,
Procurement & IT (FD) 30,600
20 S. Ganesh Kumar Chief Operating Officer - Staples,
Snacks & Meals (FD) 25,300

154 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

31. Additional Notes to the Financial Statements (Contd.)

(a) Senior managerial personnel : Name Designation No. of Options granted

(contd.) during the financial year
2015-16
21 S. Guha Executive V.P. - Technical (ITD) 25,300
22 P. Gupta Head - Corporate Taxation 23,000
23 D. Haksar Chief Executive - ITC Hotels /
WelcomHotels (HD) 21,500
24 S. Kaul SBU Chief Executive (PCPB) 30,600
25 S. Kumar On deputation 21,500
26 H. Malik Divisional Chief Executive (ITD) 35,000
27 A. K. Mukerji Corporate Financial Controller 40,000
28 A. R. Noronha Executive V.P. - Projects (HD) 21,500
29 R. Parasuram Head - Corporate Internal Audit 35,000
30 A. Pathak On deputation 30,600
31 R. Rai Chief Operating Officer (ABD) 25,300
32 V. M. Rajasekharan SBU Chief Executive - Agarbatti & Matches 23,000
33 V. L. Rajesh Divisional Chief Executive (FD) 30,600
34 A. K. Rajput Senior V.P. - Corporate Affairs 40,000
35 S. Rangrass Divisional Chief Executive (ABD-ILTD) 35,000
36 A. V. Rao Executive V.P. - Manufacturing &
Projects (PSPD) 30,600
37 C. V. Sarma Executive V.P. - Finance & MIS (PSPD) 25,300
38 R. Senguttuvan SBU Chief Executive (PPB) 35,000
39 S. Satpathy Chief Operating Officer (PCPB) 30,000
40 A. Seth Executive V.P. - Finance & MIS (ITD) 25,300
41 A. Sharma Executive V.P. - Human Resources (HD) 15,000
42 S. K. Singh Divisional Chief Executive (PSPD) 40,000
43 S. Sivakumar Group Head - Agri Business 56,250
44 R. Sridhar Head - Corporate Human Resources 23,000
45 S. A. Sule Executive V.P. - Sales Operations &
Development (TM&D) 30,600
46 B. Sumant President - FMCG 40,000
47 K. S. Suresh General Counsel 40,000
48 S. Tyagi SBU Chief Executive (ESPB) 30,600
49 K. I. Viswanathan Executive V.P. - Marketing (PSPD) 30,600
50 S. Wanchoo Executive V.P. - Marketing (ITD) 25,300
51 A. Zachariah Executive V.P. and
Head - Central Projects Organisation 23,000

The Optionees were granted Options on 12th August, 2015 at the exercise price of ` 3201/- per Option, other than Mr. S. Satpathy (Sl. No. 39) who was granted Options on
22nd January, 2016 at the exercise price of ` 3064/- per Option.
(b) Any other employee who received : None
a grant on any one year of Options
amounting to 5% or more of the
Options granted during the year.
(c) Identified employees who were : None
granted Options, during any one
year, equal to or exceeding 1% of
the issued capital (excluding
outstanding warrants and
conversions) of the Company at the
time of grant.
Abbreviations denote :
ITD India Tobacco Division HD Hotels Division
PSPD Paperboards & Specialty Papers Division ESPB Education & Stationery Products Business
LRBD Lifestyle Retailing Business Division PCPB Personal Care Products Business
ABD Agri Business Division PPB Printing & Packaging Business
ABD - ILTD Agri Business, India Leaf Tobacco Division LS&T Life Sciences & Technology
FD Foods Division TM&D Trade Marketing & Distribution
(xix) Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current
year’s classification/disclosure.

ITC Limited REPORT AND ACCOUNTS 2016 155

Notes to the Financial Statements

32. Segment Reporting

PRIMARY SEGMENT INFORMATION (BUSINESS SEGMENTS)

(` in Crores)

2016 2015
External Inter Segment Total External Inter Segment Total
1. Segment Revenue - Gross
FMCG - Cigarettes 32348.29 – 32348.29 30452.38 – 30452.38
FMCG - Others 9719.62 11.55 9731.17 9028.27 9.73 9038.00
FMCG - Total 42067.91 11.55 42079.46 39480.65 9.73 39490.38
Hotels 1273.51 12.66 1286.17 1173.55 13.46 1187.01
Agri Business 4389.34 3067.54 7456.88 5672.07 2708.41 8380.48
Paperboards, Paper and Packaging 3851.69 1476.01 5327.70 3638.55 1643.02 5281.57
Segment Total 51582.45 4567.76 56150.21 49964.82 4374.62 54339.44
Eliminations (4567.76) (4374.62)
Gross Revenue from sale of products and services 51582.45 49964.82
Segment Revenue - Net
FMCG - Cigarettes 17485.82 – 17485.82 16804.56 – 16804.56
FMCG - Others 9692.85 11.55 9704.40 9001.52 9.73 9011.25
FMCG - Total 27178.67 11.55 27190.22 25806.08 9.73 25815.81
Hotels 1273.45 12.66 1286.11 1173.50 13.46 1186.96
Agri Business 4389.34 3067.54 7456.88 5672.07 2708.41 8380.48
Paperboards, Paper and Packaging 3633.81 1383.58 5017.39 3431.56 1542.34 4973.90
Segment Total 36475.27 4475.33 40950.60 36083.21 4273.94 40357.15
Eliminations (4475.33) (4273.94)
Net Revenue from sale of products and services 36475.27 36083.21

2. Segment Results
FMCG - Cigarettes 11752.43 11196.27
FMCG - Others 70.51 34.08
FMCG - Total 11822.94 11230.35
Hotels 55.69 49.08
Agri Business 933.72 903.97
Paperboards, Paper and Packaging 907.62 921.48
Segment Total 13719.97 13104.88
Eliminations (51.13) (60.12)
Consolidated Total 13668.84 13044.76
Unallocated corporate expenses net of unallocated income 443.52 512.40
Profit before interest etc. and taxation 13225.32 12532.36
Finance costs 49.13 57.42
Interest earned on loans and deposits, income from current and
long-term investments, profit and loss on sale of investments etc. - Net 1782.20 1522.58
Profit before tax 14958.39 13997.52
Tax expense 5113.68 4389.79
Profit for the year 9844.71 9607.73

3. Other Information
Segment Assets Segment Liabilities* Segment Assets Segment Liabilities*
FMCG - Cigarettes 7893.49 2644.39 8004.99 2186.41
FMCG - Others 6031.77 1179.77 4849.14 861.29
FMCG - Total 13925.26 3824.16 12854.13 3047.70
Hotels [Refer Note 10(7)] 4820.29 345.39 4654.05 353.09
Agri Business 2970.11 611.38 2650.59 691.75
Paperboards, Paper and Packaging 6031.00 510.68 5921.98 496.07
Segment Total 27746.66 5291.61 26080.75 4588.61
Unallocated Corporate Assets/Liabilities 22293.49 11819.54 18582.65 9339.10
Total 50040.15 17111.15 44663.40 13927.71
* Segment Liabilities of FMCG - Cigarettes is before considering ` 651.54 Crores (2015 - ` 629.98 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’.

156 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

32. Segment Reporting (Contd.)

(` in Crores)
2016 2015

Capital Depreciation Non Cash Capital Depreciation Non Cash

expenditure and expenditure expenditure and expenditure
amortisation other than amortisation other than
depreciation depreciation
FMCG - Cigarettes 218.25 245.82 6.73 533.49 247.51 3.21
FMCG - Others 757.15 236.17 25.19 671.53 177.61 20.15
FMCG - Total 975.40 481.99 31.92 1205.02 425.12 23.36
Hotels [Refer Note 10(7)] 291.50 187.59 2.21 956.93 190.30 3.27
Agri Business 128.46 50.63 1.98 214.42 48.75 2.82
Paperboards, Paper and Packaging 349.76 242.52 23.54 154.14 231.95 6.87
Segment Total 1745.12 962.73 59.65 2530.51 896.12 36.32

SECONDARY SEGMENT INFORMATION (GEOGRAPHICAL SEGMENTS)

(` in Crores)
2016 2015
1. Segment Revenue
– Within India 48302.97 45454.05
– Outside India 3279.48 4510.77
Total 51582.45 49964.82
2. Segment Assets
– Within India 27746.65 26080.75
– Outside India 0.01 –
Total 27746.66 26080.75
3. Capital Expenditure
– Within India 1745.12 2530.51
– Outside India – –
Total 1745.12 2530.51
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 and 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, 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 and Packaging – Paperboards, Paper including Specialty Paper and Packaging including Flexibles.
Agri Business – Agri commodities such as soya, spices, coffee and leaf tobacco.
(3) The geographical segments considered for disclosure are:
– Sales within India.
– Sales outside India.
(4) Segment results of ‘FMCG: Others’ are after considering significant business development, brand building and gestation costs of
the Branded Packaged Foods businesses and Personal Care Products business.
(5) 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.

ITC Limited REPORT AND ACCOUNTS 2016 157

Notes to the Financial Statements

33. Related Party Disclosures

1. ENTERPRISES WHERE CONTROL EXISTS:

i) Subsidiaries:
a) Srinivasa Resorts Limited
b) Fortune Park Hotels Limited
c) Bay Islands Hotels Limited
d) WelcomHotels Lanka (Private) Limited, Sri Lanka
e) Landbase India Limited
f) Russell Credit Limited and its subsidiary
Greenacre Holdings Limited
g) Technico Pty Limited, Australia and its subsidiaries
Technico Agri Sciences Limited (upto 21.03.2016)
Technico Technologies Inc., Canada
Technico Asia Holdings Pty Limited, Australia and its subsidiary
Technico Horticultural (Kunming) Co. Limited, China
h) Technico Agri Sciences Limited (w.e.f. 22.03.2016)
i) Wimco Limited
j) Pavan Poplar Limited
k) Prag Agro Farm Limited
l) ITC Infotech India Limited and its subsidiaries
ITC Infotech Limited, UK
ITC Infotech (USA), Inc. and its subsidiary
Pyxis Solutions, LLC, USA
m) Gold Flake Corporation Limited
n) ITC Investments & Holdings Limited and its subsidiary
MRR Trading & Investment Company Limited
o) Surya Nepal Private Limited
p) King Maker Marketing, Inc., USA
q) North East Nutrients Private Limited
The above list does not include ITC Global Holdings Pte. Limited, Singapore (in liquidation)
ii) Other entities under control of the Company:
a) ITC Sangeet Research Academy
b) ITC Education Trust
c) ITC Rural Development Trust
2. OTHER RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS
i) Associates & Joint Ventures:
Associates
a) Gujarat Hotels Limited
b) International Travel House Limited
- being associates of the Company, and
c) Tobacco Manufacturers (India) Limited, UK
- of which the Company is an associate
Associates of the Company’s subsidiaries
a) Russell Investments Limited
b) Classic Infrastructure & Development Limited
c) Divya Management Limited
d) Antrang Finance Limited
- being associates of Russell Credit Limited, and
e) ATC Limited
- being associate of Gold Flake Corporation Limited
Note: (a) During the year, Russell Credit Limited, a wholly owned subsidiary of the Company, acquired the entire equity share capital of
BFIL Finance Limited and Wills Corporation Limited from the Company on 18.06.2015 and 07.09.2015 respectively; both companies
have amalgamated with Russell Credit Limited w.e.f. 01.04.2015, with the effective date of the amalgamation being 16.05.2016
and 22.03.2016 respectively.
(b) Classic Infrastructure & Development Limited, an associate of the Company’s subsidiary, during the year became a wholly owned
subsidiary of Greenacre Holdings Limited, a wholly owned step down subsidiary of the Company, w.e.f. 07.12.2015; the company
amalgamated with Greenacre Holdings Limited w.e.f. 01.10.2015, with the effective date of the amalgamation being 05.04.2016.

158 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

33. Related Party Disclosures (Contd.)

Joint Ventures
a) Maharaja Heritage Resorts Limited
b) Espirit Hotels Private Limited
c) Logix Developers Private Limited
Joint Venture of the Company’s subsidiary
a) ITC Essentra Limited
- being joint venture of Gold Flake Corporation Limited
ii) a) Key Management Personnel:
Y. C. Deveshwar Executive Chairman
N. Anand Executive Director
P. V. Dhobale Executive Director (ceased w.e.f. 07.12.2015)
K. N. Grant Executive Director (ceased w.e.f. 23.01.2016)
R. Tandon Executive Director (w.e.f. 22.01.2016)
S. Puri Executive Director (w.e.f. 06.12.2015)
A. Baijal* Non-Executive Director
S. Banerjee* Non-Executive Director
A. Duggal* Non-Executive Director
S. H. Khan* Non-Executive Director (expired on 12.01.2016)
A. V. Girija Kumar# Non-Executive Director
R. E. Lerwill Non-Executive Director
S. B. Mainak Non-Executive Director
S. B. Mathur* Non-Executive Director
P. B. Ramanujam* Non-Executive Director
S. S. H. Rehman* Non-Executive Director
M. Shankar* Non-Executive Director
K. Vaidyanath Non-Executive Director
* Independent Directors
# Ceased to be Non-Executive Director from 23.07.2015. Appointed Additional Non-Executive Director w.e.f. 31.07.2015

Members - Corporate Management Committee

Y. C. Deveshwar
N. Anand
P. V. Dhobale (ceased w.e.f. 07.12. 2015)
K. N. Grant (ceased w.e.f. 23.01.2016)
R. Tandon
S. Puri
B. B. Chatterjee
A. Nayak (ceased w.e.f. 01.01.2016)
T. V. Ramaswamy (ceased w.e.f. 07.06.2015)
S. Sivakumar
K. S. Suresh
C. Dar (w.e.f. 07.06.2015)
b) Relatives of Key Management Personnel:
Mrs. B. Deveshwar (wife of Mr. Y. C. Deveshwar)
Mrs. R. Tandon (wife of Mr. R. Tandon)
iii) Employee Trusts where there is significant influence:
a) IATC Provident Fund
b) ITC Defined Contribution Pension Fund
c) ITC Management Staff Gratuity Fund
d) ITC Employees Gratuity Fund
e) ITC Gratuity Fund ‘C’
f) ITC Pension Fund
g) ILTD Seasonal Employees Pension Fund
h) ITC Platinum Jubilee Pension Fund
i) Tribeni Tissues Limited Gratuity Fund
j) ITC Bhadrachalam Paperboards Limited Management Staff Pension Fund
k) ITC Bhadrachalam Paperboards Limited Gratuity Fund ‘A’
l) ITC Bhadrachalam Paperboards Limited Gratuity Fund ‘C’
m) ITC Hotels Limited Employees Superannuation Scheme

ITC Limited REPORT AND ACCOUNTS 2016 159

 Financial Statements

160
Notes to the
33. Related Party Disclosures (Contd.)

3. DISCLOSURE OF TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCES AS AT 31.03.2016 (` in Crores)
Enterprises where control exists Key Management Relatives of Key Employee
Associates Joint Ventures Management Total
RELATED PARTY TRANSACTIONS SUMMARY Subsidiaries Others Personnel Personnel Trusts

ITC Limited
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
1. Sale of Goods/Services 307.18 259.46 – 0.01 0.47 0.32 9.40 9.84 317.05 269.63
2. Purchase of Goods/Services 173.56 135.88 80.57 85.69 291.55 302.99 545.68 524.56
3. Acquisition cost of Fixed Assets 29.06 2.11 0.37 – 29.43 2.11
4. Sale of Fixed Assets/Scraps 0.27 0.53 ... – 0.27 0.53
5. Investments Purchased from Subsidiary 1 121.00 – 121.00 –
6. Investment in Subsidiaries/Joint Ventures 286.98 88.79 – 3.87 286.98 92.66
7. Redemption of Preference Shares 187.00 – 187.00 –
8. Sale of Investment 2 5.40 – 5.40 –
9. Interest Income 0.58 11.62 0.58 11.62
10. Remuneration to Key Management Personnel
- Directors 3 26.17 24.64 26.17 24.64

REPORT AND ACCOUNTS 2016

- Others 11.43 9.83 11.43 9.83
11. Rent Received 20.08 19.47 1.04 1.29 21.12 20.76
12. Rent Paid 8.50 5.08 3.49 3.20 0.14 0.14 0.66 0.66 12.79 9.08
13. Remuneration of Managers on Deputation reimbursed 3.73 5.42 0.55 0.19 4.17 3.66 8.45 9.27
14. Remuneration of Managers on Deputation recovered 15.11 13.21 3.85 4.56 1.38 1.30 20.34 19.07
15. Expenditure towards Corporate Social Responsibility 4.83 21.00 4.83 21.00
16. Contribution to Employees’ Benefit Plans 109.04 96.10 109.04 96.10
17. Dividend Income 319.33 347.37 0.73 0.73 320.06 348.10
18. Dividend Payments 1240.98 1191.34 3.33 4.19 1244.31 1195.53
19. Expenses Recovered 12.01 13.54 0.02 0.02 0.19 0.74 0.39 0.43 12.61 14.73
20. Expenses Reimbursed 10.85 8.01 – 0.06 0.60 0.51 0.03 0.12 11.48 8.70
21. Loans Given 0.20 8.40# 0.20 8.40
22. Receipt towards Loan Repayment 43.67 62.90 43.67 62.90
23. Assignment of Loan to Subsidiary at fair value 1.13 – 1.13 –
24. Loans Taken – 2.00# – 2.00
25. Adjustment/Payment towards Loan Repayment 2.00 – 2.00 –
26. Advances Given during the year 0.93 – 0.93 –
27. Adjustment/Receipt towards Refund of Advances – 1.95 0.41 – – 0.02 0.41 1.97
28. Advance Received during the year 119.62 128.28 119.62 128.28
29. Adjustment/Payment towards Refund of Advance 131.97 105.86 131.97 105.86
30. Deposits Given during the year – 0.02 – 0.02
31. Adjustment/Receipt towards Refund of Deposit 2.00 50.35 2.00 50.35
32. Deposits Received during the year ... – ... –
33. Balances as at 31st March
i) Receivables 48.47 31.46 0.30 0.87 2.86 3.62 51.63 35.95
ii) Advances Given 0.52 – 12.97 48.48 13.49 48.48
iii) Loans Given – 76.02# – 76.02
iv) Deposits Given 4 0.70 2.60 – 0.10 0.07 0.07 0.30 0.30 1.07 3.07
v) Loans Taken – 2.00# – 2.00
vi) Advance Taken 134.02 146.37 134.02 146.37
vii) Deposits Taken 0.10 0.10 0.10 0.10
viii) Payables 5.30 3.04 6.13 8.41 5.92 4.73 20.87 34.94 38.22 51.12
ix) Investment in Non-Convertible Debentures – 15.00 – 15.00
34. Provision for Subsidiary as at 31st March 9.00 55.95 9.00 55.95
1 denotes purchase of unquoted investment from subsidiary at net book value as at 31st March, 2015 of the acquired company;
2 includes sale of unquoted investment, at cost, for ` 4.88 Crores (2015 - Nil) to Subsidiary;
3 includes `1.22 Crores (2015 - Nil) attributable to remuneration of Directors which is subject to approval by the Company in General Meeting;
4 includes transfer of deposit of ` 0.10 Crore, with an Associate in 2015, to a subsidiary during the year pursuant to amalgamation of the Associate with the subsidiary.
# pursuant to the Scheme of Arrangement [Refer Note 31(x)].
 Notes to the Financial Statements
33. Related Party Disclosures (Contd.)

4. INFORMATION REGARDING SIGNIFICANT TRANSACTIONS / BALANCES

(Generally in excess of 10% of the total transaction value of the same type) (` in Crores)
RELATED PARTY TRANSACTIONS SUMMARY 2016 2015 RELATED
RELATEDPARTY
PARTYTRANSACTIONS SUMMARY
TRANSACTION SUMMARY 2016
2010 2015
2009 RELATED PARTY TRANSACTIONS SUMMARY 2016 2015
1. Sale of Goods/ Services 15. Expenditure towards Corporate Social 31. Adjustments/ Receipt towards Refund of Deposits
Surya Nepal Private Limited 273.35 225.22 Responsibility Greenacre Holdings Limited 2.00 –
King Maker Marketing, Inc. 27.59 28.65 ITC Sangeet Research Academy 0.41 21.00 Wimco Limited7 – 50.35
2. Purchase of Goods / Services ITC Rural Development Trust 4.42 – 32. Deposit Received during the year
ITC Infotech India Limited 138.45 129.36 16. Contribution to Employees’ Benefit Plans International Travel House Limited 0.01 –
ITC Essentra Limited 291.20 302.73 IATC Provident Fund 22.95 23.95
International Travel House Limited 57.99 61.67 33. Balances as at 31st March
ITC Defined Contribution Pension Fund 16.16 15.27
3. Acquisition cost of Fixed Assets i) Receivables
ITC Management Staff Gratuity Fund 13.67 13.45 Surya Nepal Private Limited 39.32 20.07
Greenacre Holdings Limited 28.22 – ITC Pension Fund 19.87 31.64 King Maker Marketing, Inc. 6.65 7.05
Wimco Limited 0.02 2.08 ITC Employees Gratuity Fund 21.00 3.30
ii) Advances Given
4. Sale of Fixed Assets /Scraps 17. Dividend Income Employee Trust - Pension Funds 12.97 48.48
ATC Limited 0.27 0.53 Russell Credit Limited 45.25 90.51 iii) Loans Given
5. Investments Purchased from Subsidiary ITC Infotech India Limited 76.68 76.68 BFIL Finance Limited2 and 3 – 32.55
Technico Pty Limited 121.00 – Surya Nepal Private Limited 176.76 148.54 Prag Agro Farm Limited4 – 8.40
6. Investment in Subsidiaries /Joint Ventures 18. Dividend Payments Surya Nepal Private Limited1 – 35.07
WelcomHotels Lanka (Private) Limited 73.63 24.06 Tobacco Manufacturers (India) Limited, UK 1240.98 1191.34 iv) Deposits Given
Landbase India Limited 197.00 28.00 19. Expenses Recovered Russell Credit Limited5 0.36 0.12
North East Nutrients Private Limited 7.35 36.73 Greenacre Holdings Limited6 0.34 2.24
Srinivasa Resorts Limited 1.50 1.71
7. Redemption of Preference Shares Wills Corporation Limited5 – 0.24
ITC Infotech India Limited 7.95 7.49
Landbase India Limited 187.00 – Classic Infrastructure and Development Limited6 – 0.10
Surya Nepal Private Limited 0.34 2.55
Mrs. B. Deveshwar 0.30 0.30
8. Sale of Investment 20. Expenses Reimbursed v) Loan Taken
Russell Credit Limited 5.40 – Srinivasa Resorts Limited 1.00 1.08 Pavan Poplar Limited – 2.00
9. Interest Income Landbase India Limited 7.31 4.87 vi) Advance Taken
BFIL Finance Limited – 4.28 Wimco Limited 1.63 1.09 Surya Nepal Private Limited 134.02 146.37
Surya Nepal Private Limited 0.57 7.34 21. Loan Given vii) Deposit Taken
10. Remuneration to Key Management Prag Agro Farm Limited 0.20 8.40 International Travel House Limited 0.10 0.10
Personnel – Directors & Others 22. Receipt towards Loan Repayments viii) Payables
Mr. Y. C. Deveshwar 13.73 13.85 ITC Essentra Limited 5.78 4.53
Prag Agro Farm Limited 8.60 –
11. Rent Received Surya Nepal Private Limited1 35.07 62.90 International Travel House Limited 3.39 5.22
ITC Infotech India Limited 15.63 15.41 Employee Trust - Gratuity Fund 20.87 34.94
23. Assignment of Loan to Subsidiary
Surya Nepal Private Limited 4.19 3.81 ix) Investment in Non-Convertible Debentures

ITC Limited
12. Rent Paid Russell Credit Limited 1.13 – BFIL Finance Limited – 15.00
Bay Islands Hotels Limited 1.46 1.29 24. Loan Taken 34. Provision for Subsidiary as at 31st March
Landbase India Limited 5.12 1.97 Pavan Poplar Limited – 2.00 BFIL Finance Limited - Debentures and Loan – 47.55
Technico Agri Sciences Limited 1.16 1.05 25. Adjustment/ Payment towards Refund of Loan Prag Agro Farm Limited - Loan – 8.40
Gujarat Hotels Limited 3.49 3.20 Prag Agro Farm Limited - Equity Shares 9.00 –
Pavan Poplar Limited 2.00 –
13. Remuneration of Managers
on Deputation reimbursed 26. Advances Given during the year 1 Interest @12% p.a. for funding its capital expenditure requirements and for general business purposes.
ITC Sangeet Research Academy 0.93 – Repayable by 31.03.2016 with a prepayment option. The maximum indebtedness during the year was
Fortune Park Hotels Limited 1.35 1.34 ` 35.07 Crores (2015 - ` 97.97 Crores).
Bay Islands Hotels Limited 1.09 0.97 27. Adjustment /Receipt towards Refund of Advances 2 Interest @ 9% p.a. (w.e.f. 01.04.2014) for meeting working capital requirements ` 47.55 Crores
Landbase India Limited 0.32 1.23 repayable by 31.03.2016.
Wimco Limited – 1.95
Technico Agri Sciences Limited 0.97 0.95 3 The maximum indebtedness during the year was ` 32.55 Crores (2015 - ` 32.55 Crores).
ITC Sangeet Research Academy 0.41 –
ITC Infotech India Limited – 0.94 4 Interest free loan for business purposes ` 8.40 Crores (2015 - ` 8.40 Crores) taken over pursuant to
Gujarat Hotels Limited 3.93 3.44 28. Advances Received during the year Scheme of Arrangement [Refer Note 31(x)] and interest @ 9% p.a. for meeting working capital
14. Remuneration of Managers Surya Nepal Private Limited 119.62 128.28 requirement ` 0.20 Crore (2015 - Nil). The maximum indebtedness during the year was ` 8.60 Crores
on Deputation recovered (2015 - ` 8.40 Crores).
29. Adjustment/ Payment towards Refund of Advances

REPORT AND ACCOUNTS 2016

Srinivasa Resorts Limited 5.52 5.73 5 The maximum indebtedness during the year was ` 0.36 Crore (2015 - ` 0.12 Crore). Includes ` 0.24
Surya Nepal Private Limited 131.97 105.86 Crore taken over from Wills Corporation Limited.
Fortune Park Hotels Limited 3.11 2.95
30. Deposit Given during the year 6 The maximum indebtedness during the year was ` 2.24 Crores (2015 - ` 2.24 Crores). Includes
ITC Infotech India Limited 2.80 2.39 ` 0.10 Crore taken over from Classic Infrastructure & Development Limited.
ATC Limited 1.88 3.12 Mr. R. Tandon – 0.02

161
7 The maximum indebtedness during the year Nil (2015 - ` 50.35 Crores).
Notes to the Financial Statements

34. Significant Accounting Policies

IT IS CORPORATE POLICY
Convention Impairment of Assets
To prepare financial statements in accordance with To provide for impairment loss, if any, to the extent, the
applicable Accounting Standards in India. A summary of carrying amount of assets exceed their recoverable amount.
important accounting policies is set out below. The financial Recoverable amount is higher of an asset’s net selling price
statements have also been prepared in accordance with and its value in use. Value in use is the present value of
relevant presentational requirements of the Companies estimated future cash flows expected to arise from the
Act, 2013. continuing use of an asset and from its disposal at the end
Basis of Accounting of its useful life.
To prepare financial statements in accordance with the Impairment losses recognised in prior years are reversed
historical cost convention modified by revaluation of certain when there is an indication that the impairment losses
Fixed Assets as and when undertaken. recognised no longer exist or have decreased. Such
reversals are recognised as an increase in carrying amounts
All assets and liabilities have been classified as current or of assets to the extent that it does not exceed the carrying
non-current as per the Company’s normal operating cycle amounts that would have been determined (net of
and other criteria set out in the Schedule III to the Companies amortisation or depreciation) had no impairment loss been
Act, 2013 based on the nature of products and the time recognised in previous years.
between the acquisition of assets for processing and their
realisation in cash and cash equivalents. Investments
To state Current Investments at lower of cost and fair value;
Fixed Assets and Long Term Investments, including in Joint Ventures
To state Fixed Assets at cost of acquisition inclusive of and Associates, at cost. Where applicable, provision
inward freight, duties and taxes and incidental expenses is made to recognise a decline, other than temporary,
related to acquisition. In respect of major projects involving in valuation of Long Term Investments.
construction, related pre-operational expenses form part
Inventories
of the value of assets capitalised. Expenses capitalised
also include applicable borrowing costs, if any. To state inventories including work-in-progress at lower of
cost and net realisable value. The cost is calculated on
To capitalise software where it is expected to provide future weighted average method. Cost comprises expenditure
enduring economic benefits. Capitalisation costs include incurred in the normal course of business in bringing such
licence fees and costs of implementation/system integration inventories to its location and includes, where applicable,
services. The costs are capitalised in the year in which the appropriate overheads based on normal level of activity.
relevant software is implemented for use. Obsolete, slow moving and defective inventories are
To charge off as a revenue expenditure all upgradation / identified at the time of physical verification of inventories
enhancements unless they bring similar significant and, where necessary, provision is made for such
additional benefits. inventories.
Depreciation Revenue from sale of products and services
To calculate depreciation on Fixed Assets, Tangible and To recognise Revenue at the time of delivery of goods and
Intangible, in a manner that amortises the cost of the assets rendering of services net of trade discounts to customers
after commissioning (or other amount substituted for cost), and Sales tax/Value added tax recovered from customers
less its residual value, over their useful lives as specified but including excise duty on goods payable by the Company.
in Schedule II of the Companies Act, 2013 other than Net revenue is stated after deducting such excise duty.
Intangible (Know how, Business and Commercial Rights, Investment Income
Trademarks), which are amortised over the estimated period To account for Income from Investments on an accrual
of benefit or contractual terms, as applicable. Leasehold basis, inclusive of related tax deducted at source. To account
properties are amortised over the period of the lease. for Income from Dividends when the right to receive such
To amortise capitalised software costs over a period of dividends is established.
five years. Proposed Dividend
Revaluation of Assets To provide for Dividends (including income tax thereon) in
As and when Fixed Assets are revalued, to transfer to the books of account as proposed by the Directors, pending
Revaluation Reserve the increase in the net book value of approval at the Annual General Meeting.
such Fixed Assets arising on revaluation. To account for Employee Benefits
the depreciation on such revalued Fixed Assets over the To make regular monthly contributions to various Provident
unexpired useful life of such Fixed Assets; to transfer to Funds which are in the nature of defined contribution
General Reserve the amount standing to the credit of schemes and such paid/payable amounts are charged
Revaluation Reserve on account of a revalued asset that against revenue including any shortfall in interest between
is retired/derecognised. the amount of interest realised by the investment and the

162 ITC Limited REPORT AND ACCOUNTS 2016

Notes to the Financial Statements

34. Significant Accounting Policies (Contd.)

interest payable to members at the rate declared by the To account for gains/losses arising on cancellation or
Government of India. To administer such Funds through renewal of forward exchange contracts (other than those
duly constituted and approved independent trusts with designated as cash flow hedges) as income/expense for
the exception of Provident Fund and Family Pension the period.
contributions in respect of Unionised Staff which are To apply the principles of hedge accounting as set out in
statutorily deposited with the Government. Accounting Standard-30 “Financial Instruments: Recognition
To administer through duly constituted and approved and Measurement” to those forward exchange contracts
independent trusts, various Gratuity and Pension Funds and currency options that are designated as cash flow
which are in the nature of defined benefit / contribution hedges and, accordingly, to account for the changes in the
schemes. To determine the liabilities towards such schemes, fair value of such contracts, to the extent that they are
as applicable, and towards employee leave encashment effective, directly in the Hedging Reserve Account, and to
by an independent actuarial valuation as per the take the ineffective portion to the Statement of Profit and
requirements of Accounting Standard – 15 on “Employee Loss. To recognize in the Statement of Profit and Loss the
Benefits”. To determine actuarial gains or losses and to balance in the Hedging Reserve Account when the hedged
recognise such gains or losses immediately in Statement item affects the profit or loss.
of Profit and Loss as income or expense. To recognise the net mark to market losses in the Statement
To charge against revenue, actual disbursements made, of Profit and Loss on the outstanding portfolio of forward
when due, under the Workers’ Voluntary Retirement exchange contracts and currency options, other than those
Scheme. designated as cash flow hedges, as at the Balance Sheet
Lease Rentals date, and to ignore the net gain, if any.
To charge Rentals in respect of leased premises and To accumulate exchange differences arising on monetary
equipment to the Statement of Profit and Loss. items that, in substance, form part of the Company’s net
To recognise rental income on assets given on operating investment in a non-integral foreign operation in a foreign
lease on an accrual basis over the lease term in the currency translation reserve. To recognise such balances
Statement of Profit and Loss. in the Statement of Profit and Loss on disposal of the net
investment.
Research and Development
To write off all expenditure other than capital expenditure Claims
on Research and Development in the year it is incurred. To disclose claims against the Company not acknowledged
as debts after a careful evaluation of the facts and legal
Capital expenditure on Research and Development is aspects of the matter involved.
included under Tangible Assets.
Segment Reporting
Taxes on Income
To identify segments based on the dominant source and
To provide Current tax as the amount of tax payable in nature of risks and returns and the internal organisation
respect of taxable income for the period, measured using and management structure.
the applicable tax rates and tax laws.
To account for inter-segment revenue on the basis of
To provide Deferred tax on timing differences between transactions which are primarily market led.
taxable income and accounting income subject to
consideration of prudence, measured using the tax rates To include under “Unallocated Corporate Expenses” revenue
and tax laws that have been enacted or substantively and expenses which relate to initiatives/costs attributable
enacted by the balance sheet date. to the enterprise as a whole and are not attributable to
segments.
Not to recognise Deferred tax assets on unabsorbed
depreciation and carry forward of losses unless there is Financial and Management Information Systems
virtual certainty that there will be sufficient future taxable To practice an Accounting System which unifies Financial
income available to realise such assets. and Cost Records and is designed to comply with the
relevant provisions of the Companies Act, 2013 provide
Foreign Currency Transactions financial and cost information appropriate to the businesses
To account for transactions in foreign currency at the and facilitate Internal Control.
exchange rate prevailing on the date of transactions.
Gains/Losses arising on settlement of such transactions On behalf of the Board
as also the translation of monetary items at period ends
due to fluctuations in the exchange rates are recognised
in the Statement of Profit and Loss. Y. C. DEVESHWAR Chairman
To account for differences between the forward exchange R. TANDON Director & Chief Financial Officer
rates and the exchange rates at the inception of forward B. B. CHATTERJEE Company Secretary
exchange contracts (other than those designated as cash
flow hedges), as income or expense over the life of the Kolkata
contracts. 20th May, 2016

ITC Limited REPORT AND ACCOUNTS 2016 163