SENSEX NIFTY India | Notes to Account > Cigarettes > Notes to Account from ITC - BSE: 500875, NSE: ITC


BSE: 500875|NSE: ITC|ISIN: INE154A01025|SECTOR: Cigarettes
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Mar 15
Notes to Accounts Year End : Mar '16
1. Additional Notes to the Financial Statements
 (i) Earnings per share
 (ii) Expenditure incurred under Section 135 of the Companies Act, 2013
 on Corporate Social Responsibility (CSR) activities -Rs. 247.50 Crores
 (2015 - Rs. 214.06 Crores) comprising employee benefits expense of Rs.
 7.01 Crores (2015 - Rs. 7.61 Crores) and other expenses of Rs. 240.49
 Crores (2015 - Rs. 206.45 Crores) of which Rs. 17.04 Crores (2015 - Rs.
 12.67 Crores) is accrued for payment as on 31st March, 2016. Such CSR
 expenditure of Rs. 247.50 Crores (2015 - Rs. 214.06 Crores) excludesRs.
 11.43 Crores (2015 - Rs.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
 (iii) Research and Development expenses for the year amount to Rs.
 121.91 Crores (2015 - Rs. 105.79 Crores).
 (iv) Contingent liabilities and commitments:
 (a) Contingent liabilities
 (i) Claims against the Company not acknowledged as debts Rs. 581.25
 Crores (2015 - Rs. 558.25 Crores), including interest on claims, where
 applicable, estimated to be Rs. 178.47 Crores (2015 - Rs. 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 Rs. 471.42 Crores (2015 - Rs. 450.01
 Crores), including interest on claims, where applicable, estimated to
 be Rs. 159.98 Crores (2015 - Rs. 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 Rs. 73.36 Crores (2015 - Rs. 68.79 Crores),
 including interest on claims, where applicable, estimated to be Rs.
 14.46 Crores (2015 - Rs. 13.47 Crores).
 - Third party claims arising from disputes relating to contracts
 aggregating Rs. 29.10 Crores (2015 - Rs. 29.19 Crores), including
 interest on claims, where applicable, estimated to be Rs. 0.25 Crore
 (2015 - Rs. 0.14 Crore).
 - Other matters Rs. 7.37 Crores (2015 - Rs. 10.26 Crores), including
 interest on other matters, where applicable, estimated to be Rs. 3.78
 Crores (2015 - Rs. 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 - Rs.
 1.30 Crores (2015 - Rs. 1.30 Crores).
 (b) Commitments
 - Estimated amount of contracts remaining to be executed on capital
 accounts and not provided for Rs. 2039.83 Crores (2015 - Rs. 1432.41
 - Uncalled liability on shares partly paid is Rs. 26.40 Crores (2015 -
 Rs. 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:
 (vi) Micro, Small and Medium scale business entities:
 A sum of Rs. 34.13 Crores is payable to Micro and Small Enterprises as
 at 31st March, 2016 (2015 - Rs. 24.56 Crores). The above amount
 comprise Rs. 32.92 Crores (2015 - Rs. 21.91 Crores) on account of trade
 payable and Rs. 1.21 Crores (2015 - Rs. 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.
 (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:
 (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 Rs.
 91.00 Crores was debited to General Reserve.
 b) the loss of Rs. 8.01 Crores for the year from 1st April, 2013 to
 31st March, 2014 has been recognised as an adjustment to the revenue
 c) earlier unrecognised net deferred tax assets of Rs. 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 Rs. 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 Rs. 48.32 Crores (net of
 deferred tax of Rs. 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)
 (xix)Previous year''s figures have been regrouped/ reclassified wherever
 necessary to correspond with the current year''s
 2. Related Party Disclosures
 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
 i) Associates & Joint Ventures:
 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.
 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
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