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Notes to Accounts of ITC Ltd.

Mar 31, 2015

1. Additional Notes to the Financial Statements

(i) Expenditure incurred under Section 135 of the Companies Act, 2013 applicable for the first time in 2014-15 on Corporate Social Responsibility (CSR) activities - Rs. 214.06 Crores comprising employee benefits expense of Rs. 7.61 Crores and other expenses of Rs. 206.45 Crores of which Rs. 12.67 Crores is accrued for payment as on 31st March, 2015. Such CSR expenditure of Rs. 214.06 Crores excludes 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 expenses.

(ii) Research and Development expenses for the year amount to Rs. 105.79 Crores (2014 - Rs. 117.18 Crores).

(iii) Contingent liabilities and commitments:

(a) Contingent liabilities

(i) Claims against the Company not acknowledged as debts Rs. 404.88 Crores (2014 - Rs. 361.50 Crores). Interest on claims, where applicable, is estimated to be Rs. 153.37 Crores (2014 - Rs. 121.34 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. 314.43 Crores (2014 - Rs. 254.99 Crores). Interest on claims, where applicable, is estimated to be Rs. 135.58 Crores (2014 - Rs. 103.89 Crores).

- Local Authority taxes/cess/royalty on property, utilities etc. claims disputed by the Company relating to issues of applicability and determination aggregating Rs. 55.32 Crores (2014 - Rs. 63.62 Crores). Interest on claims, where applicable, is estimated to be Rs. 13.47 Crores (2014 - Rs. 12.36 Crores).

- Third party claims arising from disputes relating to contracts aggregating Rs. 29.05 Crores (2014 - Rs. 37.36 Crores). Interest on claims, where applicable, is estimated to be Rs.0.14 Crore (2014 - Rs. 1.12 Crores).

- Other matters Rs. 6.08 Crores (2014 - Rs. 5.53 Crores). Interest on other matters, where applicable, is estimated to be Rs. 4.18 Crores (2014 - Rs. 3.97 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 (2014 - Nil).

(b) Commitments

- Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 1432.41 Crores (2014 - Rs. 1528.10 Crores).

- Uncalled liability on shares partly paid Rs. 26.40 Crores (2014 - Rs. 26.40 Crores).

(iv) Micro, Small and Medium scale business entities:

A sum of Rs. 24.56 Crores is payable to Micro and Small Enterprises as at 31st March, 2015 (2014 - Rs. 23.25 Crores). 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, 2015. 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.

(v) 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.

(vi) 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:

(vii) The Members of the Company had approved the Scheme of Arrangement on 24th March, 2014 between its subsidiary Wimco Limited ('Wimco') and the Company and their respective shareholders under Sections 391 and 394 read with Sections 78, 80, 100 and other applicable provisions of the Companies Act, 1956 for demerger of the Non-Engineering Business including Safety Matches and Agri (Forestry) Business of Wimco to the Company on a going concern basis with effect from 1st April, 2013.

The Hon'ble High Courts at Bombay and Calcutta had sanctioned the Scheme on 10th April, 2014 and 14th May, 2014, respectively. The Scheme became effective on 27th June, 2014 on filing of the Order of the Hon'ble High Court with the respective Registrars of Companies. Consequent to such filing, Scheme has been given effect to, in the financial statements during the financial year ended 31st March, 2015.

Pavan Poplar Limited and Prag Agro Farm Limited engaged in the business of agro-forestry and other related activities, have become direct subsidiaries of the Company with effect from 27th June, 2014, consequent upon the Scheme becoming effective.

The accounting of this Arrangement was done as per the Scheme and the same has been given effect to in the financial statements as under:

a) the assets and liabilities of the Non-Engineering business of Wimco as at 1st April, 2013 have been taken over at their book values subject to adjustments as specified in the Scheme.

b) cancellation of the carrying amount of the Company's investment in Equity amounting to Rs. 113.19 Crores and Preference Shares amounting to Rs. 50.00 Crores of Wimco to the extent attributable to the Non-Engineering business of Wimco.

c) in consideration of the above, the Company issued and allotted 87,761 Ordinary Shares of Rs. 1.00 each as fully paid-up to the shareholders of Wimco in the ratio of 2 Ordinary Shares of Rs. 1.00 each of the Company for every 77 Equity Shares of Rs. 1.00 each of Wimco.

d) the excess of the 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. Further, 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 been recognised as an adjustment to revenue reserves.

Further, the loss of Rs. 8.01 Crores for the year from 1st April, 2013 (the appointed date) to 31st March, 2014 has been recognised as an adjustment to the revenue reserves.

The results for the financial year ended 31st March, 2015 reflect the effect of the Scheme. Consequently, the figures for the current year are not strictly comparable.

(viii) Pursuant to the enactment of the Companies Act 2013, (the 'Act'), the Company has, effective 1st April 2014, reviewed and revised the estimated useful lives of its fixed assets, in accordance with the provisions of Schedule II of the Act. In respect of assets, whose useful life is 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) has been adjusted against opening balance of Surplus in the Statement of Profit and Loss. The consequential impact on the depreciation charged to the Statement of Profit and Loss during the year on account of the aforesaid change in useful lives is not material.

(ix) a) Details of Opening and Closing Stock of Finished Goods (manufactured) and Stock-in-Trade (goods purchased for resale)

(x) Liability for earlier years towards Rates and Taxes and Interest thereon of Rs. 157.91 Crores and Rs. 34.77 Crores respectively have been written back as no longer required during the financial year ended 31st March, 2014, based on a favourable High Court Order (Refer Notes 27 and 28). Segment Results of FMCG-Cigarettes and Finance Costs include the effects of such write back (Refer Note 32) during the financial year ended 31st March, 2014.

(xi) Information regarding Employee Stock Option Scheme :

1) Method used to account for share-based payment plans :

The employee compensation cost has been calculated using the intrinsic value method of accounting 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 2014-15 is Nil.

2) Nature and extent of employee share based payment plans that existed during the period including the general terms and conditions of each plan :

Each Option entitles the holder thereof to apply for and be allotted ten Ordinary Shares of the Company of Rs. 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 Company granted 68,26,355 Options during 2014-15 (2014 - 67,90,925) to the eligible employees of the Company and some of its subsidiary companies.

The Pricing Formula, as approved by the Shareholders of the Company, is such price 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, as determined by the Nomination & Compensation Committee.

The Options have been granted at 'market price' as defined from time to time under the aforesaid Guidelines.

In the financial year 2014-15, Options were granted at Rs. 3572.00 per Option.

4) The Options were exercised throughout the year and weighted average share price of Shares arising upon exercise of Options, based on the closing market 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, 2015 was Rs. 357.59 (31st March, 2014 - Rs. 333.70).

7) The volatility used in the Black Scholes Option Pricing model is the annualised standard deviation of the 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.

8) Difference between the employee compensation cost so computed at (1) above and the employee compensation cost that shall have been recognised if it had used the fair value of the Options.

Rs. 529.44 crores

(xii) Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/ disclosure.

2. 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

Technico Technologies Inc., Canada

Technico Asia Holdings Pty Limited, Australia and its subsidiary Technico Horticultural (Kunming) Co. Limited, China h) Wimco Limited i) Pavan Poplar Limited 1 j) Prag Agro Farm Limited 1 k) ITC Infotech India Limited and its subsidiaries

ITC Infotech Limited, UK

ITC Infotech (USA), Inc. and its subsidiary Pyxis Solutions, LLC, USA l) Wills Corporation Limited m) Gold Flake Corporation Limited n) ITC Investments & Holdings Limited and its subsidiary

MRR Trading & Investment Company Limited (w.e.f. 30.03.2015) o) Surya Nepal Private Limited p) King Maker Marketing, Inc., USA q) BFIL Finance Limited and its subsidiary

MRR Trading & Investment Company Limited (upto 29.03.2015) r) North East Nutrients Private Limited The above list does not include ITC Global Holdings Pte. Limited, Singapore (in liquidation)

1 Pursuant to the Scheme of Arrangement [Refer Note 31(x)]

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

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

K. N. Grant Executive Director

A. Baijal2 Non-Executive Director

S. Banerjee1 Non-Executive Director (w.e.f. 24.07.2014)

A. Duggal2 Non-Executive Director (w.e.f. 15.09.2014)

S. H. Khan2 Non-Executive Director

A. V. Girija Kumar Non-Executive Director

R. Lerwill Non-Executive Director

S. B. Mainak Non-Executive Director (w.e.f. 25.04.2014)

S. B. Mathur2 Non-Executive Director

P. B. Ramanujam2 Non-Executive Director

S. S. H. Rehman2 Non-Executive Director

A. Ruys Non-Executive Director (ceased w.e.f. 24.07.2014) M. Shankar2 Non-Executive Director

K. Vaidyanath Non-Executive Director

1 Appointed as Independent Director w.e.f. 30.07.2014

2 Appointed as Independent Director w.e.f. 15.09.2014

Members - Corporate Management Committee

B. B. Chatterjee A. Nayak

S. Puri (w.e.f. 01.11.2014) T. V. Ramaswamy S. Sivakumar K. S. Suresh R. Tandon

b) Relatives of Key Management Personnel:

Mrs. B. Deveshwar (wife of Mr. Y. C. Deveshwar) Mrs. S. Chatterjee (wife of Mr. B. B. Chatterjee) Mrs. S. Rehman (wife of Mr. S. S. H. Rehman)

iii) Employee Trusts where there is significant influence:

a) IATC Provident Fund

b) IATC Staff X Provident Fund (merged with IATC Provident Fund w.e.f. 01.08.2014)

c) ITC Defined Contribution Pension Fund

d) ITC Management Staff Gratuity Fund

e) ITC Employees Gratuity Fund

f) ITC Gratuity Fund 'C'

g) ITC Pension Fund

h) ILTD Seasonal Employees Pension Fund

i) ITC Platinum Jubilee Pension Fund

j) Tribeni Tissues Limited Gratuity Fund

k) ITC Bhadrachalam Paperboards Limited Management Staff Pension Fund

l) ITC Bhadrachalam Paperboards Limited Gratuity Fund 'A'

m) ITC Bhadrachalam Paperboards Limited Gratuity Fund 'C'

n) ITC Hotels Limited Employees Superannuation Scheme


Mar 31, 2014

(i) Contingent liabilities and commitments:

(a)Contingent liabilities

Claims against the Company not acknowledged as debts Rs. 361.50 Crores (2013 - Rs. 466.54 Crores). These comprise:

- Excise duty, sales taxes and other indirect taxes claims disputed by the Company relating to issues of applicability and classification aggregating Rs. 254.99 Crores (2013 - Rs. 377.74 Crores).

- Local Authority taxes/cess/royalty on property, utilities etc. claims disputed by the Company relating to issues of applicability and determination aggregating Rs. 63.62 Crores (2013 - Rs. 45.16 Crores).

- Third party claims arising from disputes relating to contracts aggregating Rs. 37.36 Crores (2013 - Rs. 39.07 Crores).

- Other matters Rs. 5.53 Crores (2013 - Rs. 4.57 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.

(b)Commitments

- Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 1528.10 Crores (2013 - Rs. 1656.29 Crores).

- Uncalled liability on shares partly paid Rs. 26.40 Crores (2013 - Rs. 26.40 Crores).

(iii) Research and Development expenses for the year amount to Rs. 117.18 Crores (2013 - Rs. 109.22 Crores).

(v) Micro, Small and Medium scale business entities:

A sum of Rs. 23.25 Crores is payable to Micro and Small Enterprises as at 31st March, 2014 (2013 - Rs. 15.12 Crores). 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, 2014. 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.

(vi) 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) The Employee Stock Option Scheme section in the Report on Corporate Governance and the disclosure in respect of Employees Stock Options which are outlined in this year''s Annexure to the Report of the Directors are treated as an annexure to these accounts.

(x) The Board of Directors of the Company, at its meeting held on 28th August, 2013, proposed a Scheme of Arrangement under Sections 391 and 394 read with Sections 78, 80, 100 and other applicable provisions of the Companies Act, 1956, between its subsidiary, Wimco Limited (''Wimco'') and the Company and their respective shareholders (''the Scheme'') for demerger of the Non-Engineering business of Wimco to the Company on a going concern basis with effect from 1st April, 2013. The Members of the Company approved the Scheme on 24th March, 2014. The Hon''ble High Courts at Bombay and Calcutta have also sanctioned the Scheme on 10th April, 2014 and 14th May, 2014, respectively. Certified copies of the Orders from the Courts are awaited. The Scheme would become effective upon filing of such certified copies of the Orders with the respective Registrar of Companies. Pending this, the Scheme has not been given effect to in these financial statements.

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

(xvii) Liability for earlier years towards Rates and Taxes and Interest thereon of Rs. 157.91 Crores and Rs. 34.77 Crores respectively have been written back as no longer required, based on a favourable High Court Order (Refer Notes 27 and 28). Segment Results of FMCG-Cigarettes and Finance Costs include the effects of such write back (Refer Note 32).

(xviii) Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

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

Technico Technologies Inc., Canada

Technico Asia Holdings Pty Limited, Australia and its subsidiary Technico Horticultural (Kunming) Co. Limited, China h) Wimco Limited and its subsidiaries Pavan Poplar Limited Prag Agro Farm Limited i) ITC Infotech India Limited and its subsidiaries

ITC Infotech Limited, UK

ITC Infotech (USA), Inc. and its subsidiary Pyxis Solutions, LLC, USA j) Wills Corporation Limited k) Gold Flake Corporation Limited l) ITC Investments & Holdings Limited m) Surya Nepal Private Limited n) King Maker Marketing, Inc., USA o) BFIL Finance Limited and its subsidiary

MRR Trading & Investment Company Limited p) North East Nutrients Private Limited (w.e.f. 06.02.2014) 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

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 (formerly known as ITC Filtrona 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

K. N. Grant Executive Director

A. Baijal Non-Executive Director

S. Banerjee Non-Executive Director (upto 26.03.2014)

S. H. Khan Non-Executive Director

A. V. Girija Kumar Non-Executive Director

R. Lerwill Non-Executive Director (w.e.f. 18.11.2013)

S. B. Mathur Non-Executive Director

D. K. Mehrotra Non-Executive Director (upto 27.10.2013)

H. G. Powell Non-Executive Director (upto 30.07.2013)

P. B. Ramanujam Non-Executive Director

S. S. H. Rehman Non-Executive Director

A. Ruys Non-Executive Director

B. Sen Non-Executive Director (upto 27.08.2013)

M. Shankar Non-Executive Director

K. Vaidyanath Non-Executive Director

B. Vijayaraghavan Non-Executive Director (upto 27.08.2013)

Members - Corporate Management Committee

B. B. Chatterjee

A. Nayak

T. V. Ramaswamy

S. Sivakumar

K. S. Suresh

R. Tandon

b) Relatives of Key Management Personnel:

Mrs. B. Deveshwar (wife of Mr. Y. C. Deveshwar) Mrs. S. Chatterjee (wife of Mr. B. B. Chatterjee)

iii) Employee Trusts where there is significant influence:

a) IATC Provident Fund

b) IATC Staff X Provident Fund

c) ITC Defined Contribution Pension Fund

d) ITC Management Staff Gratuity Fund

e) ITC Employees Gratuity Fund

f) ITC Gratuity Fund ''C''

g) ITC Pension Fund

h) ILTD Seasonal Employees Pension Fund

i) ITC Platinum Jubilee Pension Fund

j) Tribeni Tissues Limited Gratuity Fund

k) ITC Bhadrachalam Paperboards Limited Management Staff Pension Fund

l) ITC Bhadrachalam Paperboards Limited Gratuity Fund ''A''

m) ITC Bhadrachalam Paperboards Limited Gratuity Fund ''C''

n) ITC Hotels Limited Employees Superannuation Scheme


Mar 31, 2013

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 Rs. 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.

Term loans from Banks

Repayable in equated periodic instalments upto a 5 year period from the date of respective loan. These are repayable by 2014-15 and carry an interest of 11.25% p.a.

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.

* Represents dividend amounts either not claimed or kept in abeyance in accordance with 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 Rs. 0.30 Crore (2012 - Rs. 0.30 Crore) maintained with a bank for which the Company has filed a suit.

(i) Exchange difference in respect of forward exchange contracts to be recognised in the Statement of Profit and Loss in the subsequent accounting period amounts to Rs. 0.88 Crore (2012 - Rs. 0.78 Crore).

(ii) Contingent liabilities and commitments:

(a)Contingent liabilities

Claims against the Company not acknowledged as debts Rs. 466.54 Crores (2012 - Rs. 287.08 Crores). These comprise:

- Excise duty, sales taxes and other indirect taxes claims disputed by the Company relating to issues of applicability and classification aggregating Rs. 377.74 Crores (2012 - Rs. 199.23 Crores).

- Local Authority taxes/cess/royalty on property, utilities etc. claims disputed by the Company relating to issues of applicability and determination aggregating Rs. 45.16 Crores (2012 - Rs. 47.35 Crores).

- Third party claims arising from disputes relating to contracts aggregating Rs. 39.07 Crores (2012 - Rs. 37.26 Crores).

- Other matters Rs. 4.57 Crores (2012 - Rs. 3.24 Crores).

It is not practicable for the Company to estimate the timings of cash flows, if any, in respect of the above.

(b) Commitments

- Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 1656.29 Crores (2012 - Rs. 2246.53 Crores).

- Uncalled liability on shares partly paid Rs. 26.40 Crores (2012 - Rs. 26.40 Crores).

(iii) The status on excise matters which is treated as an annexure to these accounts are as outlined in this years Report of the Directors & Management Discussion and Analysis under the Excise section. In the opinion of the Directors, the Company does not accept any further liability.

(iv) Research and Development expenses for the year amount to Rs. 109.22 Crores (2012 - Rs. 87.84 Crores).

(v) Micro, Small and Medium scale business entities:

A sum of Rs. 15.12 Crores is payable to Micro and Small Enterprises as at 31st March, 2013 (2012 - Rs. 12.42 Crores). 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, 2013. 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.

(vi) The Companys 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.

(vii) The Employee Stock Option Scheme section in the Report on Corporate Governance and the disclosure in respect of Employees Stock Options which are outlined in this years Annexure to the Report of the Directors are treated as an annexure to these accounts.

(viii) Previous years figures have been regrouped / reclassified wherever necessary to correspond with the current years classification/ disclosure.

1. 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

Technico Technologies Inc., Canada

Technico Asia Holdings Pty Limited, Australia and its subsidiary

Technico Horticultural (Kunming) Co. Limited, China

h) Wimco Limited and its subsidiaries

Pavan Poplar Limited

Prag Agro Farm Limited

i) ITC Infotech India Limited and its subsidiaries

ITC Infotech Limited, UK

ITC Infotech (USA), Inc. and its subsidiary

Pyxis Solutions, LLC, USA

j) Wills Corporation Limited

k) Gold Flake Corporation Limited

l) ITC Investments & Holdings Limited

m) Surya Nepal Private Limited

n) King Maker Marketing, Inc., USA

o) BFIL Finance Limited and its subsidiary

MRR Trading & Investment Company 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 Companys 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

Joint Ventures

a) Maharaja Heritage Resorts Limited

b) Espirit Hotels Private Limited

c) Logix Developers Private Limited

Joint Venture of the Companys subsidiary

a) ITC Filtrona 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

K. N. Grant Executive Director

A. Baijal Non-Executive Director

S. Banerjee Non-Executive Director

S. H. Khan Non-Executive Director

A. V. Girija Kumar Non-Executive Director

S. B. Mathur Non-Executive Director

D. K. Mehrotra Non-Executive Director

H. G. Powell Non-Executive Director

P. B. Ramanujam Non-Executive Director

S. S. H. Rehman (w.e.f. 27.07.2012) Non-Executive Director

A. Ruys Non-Executive Director

B. Sen Non-Executive Director

M. Shankar (w.e.f. 06.09.2012) Non-Executive Director

K. Vaidyanath Non-Executive Director

B. Vijayaraghavan Non-Executive Director

Members - Corporate Management Committee

B. B. Chatterjee

A. Nayak

T. V. Ramaswamy

S. Sivakumar

K. S. Suresh

R. Tandon

b) Relatives of Key Management Personnel:

Mrs. B. Deveshwar (wife of Mr. Y. C. Deveshwar)

Mrs. S. Chatterjee (wife of Mr. B. B. Chatterjee)

iii) Employee Trusts where there is significant influence:

a) IATC Provident Fund

b) IATC Staff X Provident Fund

c) ITC Defined Contribution Pension Fund

d) ITC Management Staff Gratuity Fund

e) ITC Employees Gratuity Fund

f) ITC Gratuity Fund C

g) ITC Pension Fund

h) ILTD Seasonal Employees Pension Fund

i) ITC Platinum Jubilee Pension Fund

j) Tribeni Tissues Limited Provident Fund

k) Tribeni Tissues Limited Gratuity Fund

l) ITC Bhadrachalam Paperboards Limited Management Staff Pension Fund

m) ITC Bhadrachalam Paperboards Limited Gratuity Fund A

n) ITC Bhadrachalam Paperboards Limited Gratuity Fund C

o) ITC Bhadrachalam Paperboards Limited Staff Provident Fund

p) ITC Hotels Limited Employees Superannuation Scheme

q) ITC Hotels Limited Employees Gratuity Fund

 
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