FINANCIAL REPORTING

COMPANY REPORT

2017-2020
MOHAMMAD AZEEM
ENROLL- A90904617030
 ACKNOWLEDGEMENT

With a sense of gratitude and respect, I would like to extend our heartiest thanks to
all of those who provided help and guidance to make this project a big success. No
project is ever the outcomes of single individual’s talent or effort. This work is no
exception. This project would not have been possible without the whole hearted
encouragement, support and co=operation of our guide, friends and well-wishers.
Although it is not possible for me to name and thank them all individually, I must
make special mention of some of the personalities and acknowledge our sincere
indebtness to them.
The successful completion of this project rests on the shoulders of many persons
who have helped us directly or indirectly. I wish to take this opportunity to express to
all those, without whose help, completion of this project would have been difficult. I
am indebted and thankful to all the individuals who have guided, advised, inspired
and supported me in making this project a success.

My gratitude to our honourable guide Dr Sulagna Das for giving me the

opportunity for developing the project and her able guidance, inestimable motivation
and constant encouragement throughout our project, without her help this project
would never been realized in its entirety.

I am especially thankful to our Head of Department for his valuable

support in providing us the facilities and his valuable guidance for the development
of this project.
 CONTENT
CHAPTERS PARTICULARS PAGE NO.

ACKNOWLEDGEMENT

PREFACE

1 INTRODUCTION:

a. Introduction to ITC
b. history
c. Business profile
d. Directors

2 FINANCIAL ANALYSIS

a. Introduction of the topics

b. Balance sheet of ITC
c. Profit and Loss Account of
ITC
d. Cash Flow Of ITC
e. Ratio analysis

3 Findings, Suggestions and

Conclusion

4 Bibliography
 CHAPTER-1
INTRODUCTION

 Introduction to ITC
 history
 Business profile
 Directors
 1.INTRODUCTION
Introduction of company
ITC is an Indian cigarette company which is headquartered in [1]Kolkata. Its five
diversified businesses are Fast-Moving Consumer Goods (comprising Foods,
Personal Care, Cigarettes choo and Cigars, Apparel, Education and Stationery
Products, Incense Sticks and Safety Matches), Hotels, Paperboards & Specialty
Papers, Packaging, Agri-Business and Information Technology. Although the
cigarette business contributes more than 80% of the profits of the company, 80% of
the capital is invested in the non-tobacco businesses.

Established in 1910 as the 'Imperial Tobacco Company of India Limited', the

company was renamed as the 'India Tobacco Company Limited' in 1970 and later to
'I.T.C. Limited' in 1974. The dots in the name were removed in September 2001 for
the company to be renamed as 'ITC Limited' where 'ITC' would no longer be an
acronym. The company completed 100 years in 2010 and as of 2012-13, had an
annual turnover of US$8.31 billion and a market capitalization of US$50 billion. It
employs over 30,000 people at more than 60 locations across India and is part of
Forbes 2000 list.
ITC Ltd is one of India's foremost private sector companies. ITC has a diversified
presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-
Business, Packaged Foods & Confectionery, Information Technology, Branded
Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.
While ITC is an outstanding market leader in its traditional businesses of Cigarettes,
Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share
even in its nascent businesses of Packaged Foods & Confectionery, Branded
Apparel, Personal Care and Stationery.

ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd,
provides IT services and solutions to leading global customers. ITC Infotech has
carved a niche for itself by addressing customer challenges through innovative IT
solutions. ITC's production facilities and hotels have won numerous national and
international awards for quality, productivity, safety and environment management
systems. ITC was the first company in India to voluntarily seek a corporate
governance rating.

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco
Company of India Ltd. As the company's ownership progressively Indianised, the
name of the company was changed from Imperial Tobacco Company of India Ltd to
India Tobacco Company Ltd in the year 1970 and then to I.T.C. Ltd in the year 1974.
In recognition of the company's multi-business portfolio encompassing a wide range
of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging,
Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing,
Education & Stationery and Personal Care - the full stops in the company's name
were removed effective September 18, 2001. The company now stands rechristened
ITC Ltd.

During the year first six decades of the company's existence were primarily devoted
to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the
seventies witnessed the beginnings of a corporate transformation that would usher in
momentous changes in the life of the company. In the year 1925, the company set
up Packaging & Printing business as a strategic backward integration for ITC's
Cigarettes business. It is today India's most sophisticated packaging house.

HISTORY
Tobacco business and early years
"ITC Limited" was incorporated under the name 'Imperial Tobacco' which was later renamed
as 'Imperial Tobacco Company of India Limited', succeeding W.D. & H.O. Wills on 24 August
1910 as a British-owned company registered in Calcutta.[2] Since the company was largely
based on agricultural resource, it ventured into partnerships in 1911 with farmers of southern
part of India for sourcing leaf tobacco. Under the company's umbrella, the 'Indian Leaf
Tobacco Development Company Limited' was formed in Guntur district of Andhra Pradesh in
1912. The first cigarette factory of the company was set up in 1913 at Bangalore. In 1918,
leaf-buying points were created in southern India. ITC's cigarette factory at Munger was
equipped with printing facility in 1925, paving way for its first non-tobacco business.

Though the first six decades of the Company's existence were primarily devoted to the
growth and consolidation of the cigarettes and leaf-tobacco businesses, ITC's packaging &
printing business was set up in 1925 as a strategic backward integration for ITC's cigarettes
business. It is today India's most sophisticated packaging house.[3] More factories were set
up in the following years for cigarette manufacturing across India.

In 1928, construction began for the company's headquarters, the 'Virginia House' at
Calcutta. ITC acquired Carreras Tobacco Company's factory at Kidderpore in 1935 to further
strengthen its presence. ITC helped to set up indigenous cigarette tissue-paper-making plant
in 1946 to significantly reduce the import costs and a factory for printing and packaging was
set up at Madras in 1949. The Company acquired the manufacturing business of Tobacco
Manufacturers (India) Limited and the complementary lithographic printing business of
Printers (India) Limited in 1953.

Towards Indianization and business diversification

The company was converted into a Public Limited Company on 27 October 1954. The first
step towards Indianization was taken in the same year with 6% of Indian shareholding of the
company. ITC also became the first Indian company to foray into consumer research during
this time. During 1960's, technology was given more focus with setting up of cigarette
machinery and filter-rod manufacturing facilities aimed at achieving self-sufficiency in
cigarette-making.

Ajit Narain Haskar became the company's first Indian chairman in 1969 and this was crucial
in building up the Indian management for the company. As the company's ownership
progressively Indianised, under Haskar's leadership, the name of the company was changed
from 'Imperial Tobacco Company of India Limited' to 'India Tobacco Company Limited' in
1970. ITC also became the first company in India to start phased Indianisation of capital and
the Indian shareholding of ITC grew from 6% to 25%. ITC entered into brand sponsorship for
various sporting events, starting from the 1971 Scissor's Cup. Innovative market campaigns
and electronic data processing were started in the 1970s.

In 1973, ITC set up its integrated research center in Bangalore, aimed at diversification and
venturing into newer businesses with research and development. With the unfolding
diversification plans, the name of the company was changed to 'I.T.C. Limted' in 1974. The
Indian shareholding grew further to 40% during this time. ITC entered into the hospitality
sector with hotel business in 1975 with the acquisition renaming of ITC Welcomgroup Hotel
Chola in Madras. ITC chose the hospitality sector for its potential to earn high levels of
foreign exchange, create tourism infrastructure and generate large scale direct and indirect
employment.

The shareholding went over 60% in 1976 and more hotels were started by the company in
the following years. ITC Sangeet Research Academy was set up at Calcutta in 1977. In
1979, ITC entered the paperboards business by promoting ITC Bhadrachalam Paperboards
Limited. J N Sapru took over as the company's chairman in 1983 and the international
expansion started with the acquisition of Surya Nepal Private Limited in 1985. The year 1986
saw vigorous moves from the company with opening of an Indian restaurant was in the city
of New York, acquisition and renaming of Vishvarama Hotels to ITC Hotels Limited, setting
up of two new ventures - the ITC Classic Finance Limited and ITC Agro Tech Limited under
its umbrella. ITC also entered into the edible oils industry with the launch of 'Sundrop' brand
of cooking oils in 1988. Tribeni Tissues Limited was acquired in 1990. K L Chugh assumed
the role of chairman in 1991 and ITC Global Holding Private limited was started as an
international trading company in Singapore in 1992. In 1994, all the hotels under the
company were transferred into the listed subsidiary company ITC Hotels Limited. ITC,
through the brand 'Wills', sponsored the 1996 Cricket World Cup.

Y C Deveshwar took over as the company's chairman in 1996 and the corporate governance
structure was re-crafted to support effective management of multiple businesses. ITC exited
from edible oils business and financial services; sold the ITC Classic Finance Limited to
ICICI Limited and handled the 'Sundrop' business to ConAgra Foods Limited in 1998. In the
year 2000, an innovative initiative for farmers called 'e-Choupal' was started in Madhya
Pradesh in 2000. The same year witnessed the launch of ITC's 'Wills Sport' range of casual
wear with first retail outlet in New Delhi and ITC's entry into stationery products and gifting
business introducing the 'Expressions' range of greeting cards and 'Classmate' notebooks. A
wholly owned information technology subsidiary, ITC Infotech India Limited was also started
in 2000 and the ITC Bhadrachalam Paperboards Limited was merged into ITC Limited. The
name of the company was changed to 'ITC Limited' omitting the dots and adapting the
strategy 'No stops for ITC' in 2001. Employee stock option scheme was introduced for the
first time and a web portal for the company was launched. Subsidiaries for ITC Infotech were
set up at United Kingdom and USA.

BUSINESS PROFILE
ITC is one of India's foremost multi-business enterprises with a market capitalisation of US $
50 billion and Gross Sales Value^ of US $ 10 billion. ITC is rated among the World's Best
Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes
magazine and as 'India's Most Admired Company' in a survey conducted by Fortune India
magazine and Hay Group. ITC also features as one of world's largest sustainable value
creator in the consumer goods industry in a study by the Boston Consulting Group. ITC has
been listed among India's Most Valuable Companies by Business Today magazine. The
Company is among India's '10 Most Valuable (Company) Brands', according to a study
conducted by Brand Finance and published by the Economic Times. ITC also ranks among
Asia's 50 best performing companies compiled by Business Week.

Multiple Drivers of Growth

ITC's aspiration to create enduring value for the nation and its stakeholders is manifest in its
robust portfolio of traditional and greenfield businesses encompassing Fast Moving
Consumer Goods (FMCG), Hotels, Paperboards & Specialty Papers, Packaging, Agri-
Business, and Information Technology. This diversified presence in the businesses of
tomorrow is powered by a strategy to pursue multiple drivers of growth based on its proven
competencies, enterprise strengths and strong synergies between its businesses.

The competitiveness of ITC's diverse businesses rest on the strong foundations of

institutional strengths derived from its deep consumer insights, cutting-edge Research &
Development, differentiated product development capacity, brand-building capability, world-
class manufacturing infrastructure, extensive rural linkages, efficient trade marketing and
distribution network and dedicated human resources. ITC's ability to leverage internal
synergies residing across its diverse businesses lends a unique source of competitive
advantage to its products and services.

Within a relatively short span of time, ITC has established vital brands like Aashirvaad,
Sunfeast, Fabelle, Sunbean, Dark Fantasy, Mom's Magic Bingo!, Yippee!, Candyman, mint-
o, Kitchens of India, Farmland, B Natural, ITC MasterChef in the Branded Foods space;
Essenza Di Wills, Fiama, Vivel, Engage, Savlon, Charmis, Shower to Shower and Superia in
the Personal Care products segment; Classmate and Paperkraft in Education & Stationery
products; Wills Lifestyle and John Players in the Lifestyle Apparel business; Mangaldeep in
Agarbattis and Aim in the Safety Matches segment. This growth has been rated by a Nielsen
Report to be the fastest among the consumer goods companies operating in India.
ITC’S BUSINESSES
ITC’S world class Indian brand
 Board of Directors

 Yogesh chander Deveshwar Chairman & Non-Executive Director

 Sanjiv Puri Managing Director
 Nakul Anand Executive Director
 Rajiv Tandon Chief Financial Officer
 Rajendra Kumar Singhi Executive vice president

Former chairman of ITC LIMITED

Yogesh chander
Deveshwar
 Introduction of the topics
 Balance sheet of ITC
 Profit and Loss Account of ITC
 Cash Flow Of ITC
 Ratio analysis
Introduction of the topics
What is Financial Analysis
Financial analysis is the process of evaluating businesses, projects, budgets and
other finance-related entities to determine their performance and suitability.
Typically, financial analysis is used to analyze whether an entity is stable, solvent,
liquid or profitable enough to warrant a monetary investment. When looking at a
specific company, a financial analyst conducts analysis by focusing on the income
statement, balance sheet, and cash flow statement.
BREAKING DOWN Financial Analysis
Financial analysis is used to evaluate economic trends, set financial policy, build
long-term plans for business activity, and identify projects or companies for
investment. This is done through the synthesis of financial numbers and data.

One of the most common ways to analyze financial data is to calculate ratios from
the data to compare against those of other companies or against the company's own
historical performance. For example, return on assets (ROA) is a common ratio used
to determine how efficient a company is at using its assets and as a measure of
profitability. This ratio could be calculated for several similar companies and
compared as part of a larger analysis.

Corporate Finance and Investment Finance

Financial analysis can be conducted in both corporate finance and investment
finance settings. In corporate finance, the analysis is conducted internally, using
such ratios as net present value (NPV) and internal rate of return (IRR) to find
projects worth executing. A key area of corporate financial analysis involves
extrapolating a company's past performance, such as gross revenue or profit margin,
into an estimate of the company's future performance. This allows the business to
forecast budgets and make decisions based on past trends, such as inventory levels.

In investment finance, an outside financial analyst conducts a financial analysis for

investment purposes. Analysts can either conduct a top-down or bottom-up
investment approach. A top-down approach first looks for macroeconomic
opportunities, such as high-performing sectors, and then drills down to find the best
companies within that sector. A bottom-up approach, on the other hand, looks at a
specific company and conducts similar ratio analysis to corporate financial analysis,
looking at past performance and expected future performance as investment
indicators.
 Balance sheet of ITC of last
five year

Particulars Mar'18 Mar'17 Mar'16 Mar'15 Mar'14

Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months

Share Capital 1220.43 1214.74 804.72 801.55 795.32

Reserves & Surplus 50179.64 44126.22 32071.87 29881.73 25414.29

Net Worth 51400.07 45340.96 32929.00 30735.69 26262.02

Secured Loan .00 .01 3.60 .02 .14

Unsecured Loan 11.13 17.99 25.83 38.69 51.00

TOTAL LIABILITIES 51411.20 45358.96 32958.43 30774.40 26313.16

Assets

Gross Block 18595.00 16843.67 22256.11 21392.12 18239.65

(-) Acc. Depreciation 3029.01 1963.43 8051.58 7213.63 6226.91

Net Block 15565.99 14880.24 14204.53 14126.08 11960.33

Capital Work in Progress 5025.58 3537.02 2500.83 2114.14 2295.73

Investments 23397.22 18585.29 12854.24 8405.46 8823.43

Inventories 7237.15 7863.99 8519.82 7836.76 7359.54

Sundry Debtors 2357.01 2207.50 1686.35 1722.40 2165.36

Cash and Bank 2594.88 2747.27 6563.95 7588.61 3289.37

Loans and Advances 6203.48 4394.64 3188.71 2349.80 3283.22

Total Current Assets 18392.52 17213.40 19958.83 19497.57 16097.49

Current Liabilities 10808.96 8683.79 8129.22 7214.45 6921.52

Provisions 161.15 173.20 8430.78 6206.81 5994.71

Total Current Liabilities 10970.11 8856.99 16560.00 13421.26 12916.23

NET CURRENT ASSETS 7422.41 8356.41 3398.83 6076.31 3181.26

Misc. Expenses .00 .00 .00 .00 .00

TOTAL ASSETS(A+B+C+D+E) 51411.20 45358.96 33010.84 30774.40 26313.16

Rs (in Crores)
 Profit and Loss Account of ITC
Mar'18 Mar'17 Mar'16 Mar'15 Mar'14

12Months 12Months 12Months 12Months 12Months

INCOME:

Sales Turnover 44329.77 55448.46 51944.57 50389.01 47068.66

Excise Duty 3702.23 15359.78 15107.18 13881.61 13830.06

NET SALES 40627.54 40088.68 36837.39 36507.40 33238.60

Other Income 0 0 0 0 0

TOTAL INCOME 42757.38 42074.59 38641.13 38050.53 34345.74

EXPENDITURE:

Manufacturing Expenses 620.92 550.32 541.57 581.65 613.19

Material Consumed 16050.73 16238.53 13951.45 14903.29 13393.63

Personal Expenses 2487.46 2444.31 1883.51 1780.04 1608.37

Selling Expenses 886.23 792.44 871.27 .00 .00

Administrative Expenses 5041.22 5485.04 5351.36 5768.87 5168.57

Expenses Capitalised .00 .00 .00 .00 .00

Provisions Made .00 .00 .00 .00 .00

TOTAL EXPENDITURE 25086.56 25510.64 22599.16 23033.85 20783.76

Operating Profit 15540.98 14578.04 14238.23 13473.55 12454.84

EBITDA 17670.82 16563.95 16041.97 15016.68 13561.98

Depreciation 1145.37 1038.04 1034.45 961.74 899.92

Other Write-offs .00 .00 .00 .00 .00

EBIT 16525.45 15525.91 15007.52 14054.94 12662.06

Interest 86.65 22.95 49.13 57.42 2.95

EBT 16438.80 15502.96 14958.39 13997.52 12659.11

Taxes 5628.45 5302.06 5113.68 4389.79 3873.90

Profit and Loss for the Year 10810.35 10200.90 9844.71 9607.73 8785.21

Non Recurring Items 465.68 -24.92 .00 .00 .00

Other Non Cash Adjustments .00 .00 .00 .00 .00

Other Adjustments -52.78 24.92 .00 .00 .00

REPORTED PAT 11223.25 10200.90 9844.71 9607.73 8785.21

KEY ITEMS

Preference Dividend .00 .00 .00 .00 .00

Equity Dividend 4659.77 5506.60 5447.64 3989.84 3960.92

Equity Dividend (%) 381.81 453.31 676.96 497.76 498.02

Shares in Issue (Lakhs) 122042.95 121473.83 80472.07 80155.20 79531.83

EPS - Annualised (Rs) 9.20 8.40 12.23 11.99 11.05

Rs (in Crores)
 Cash Flow Of ITC
Particulars Mar'18 Mar'17 Mar'16 Mar'15 Mar'14

Profit Before Tax 16851.70 15502.96 14958.39 13997.52 12659.11

Net Cash Flow from Operating Activity 12650.85 10002.02 .00 9308.87 6962.30

Net Cash Used in Investing Activity -6691.24 -2780.33 .00 -4822.57 -2823.29

Net Cash Used in Financing Activity -6019.85 -7137.62 .00 -4573.61 -4173.85

Net Inc/Dec In Cash and Cash Equivalent -60.24 84.07 39.50 -87.31 -34.84

Cash and Cash Equivalent - Beginning of the Year 156.26 72.19 36.29 123.60 155.90

Cash and Cash Equivalent - End of the Year 96.02 156.26 75.79 36.29 121.06
Rs (in Crores)
 Ratio analysis
INTRODUCTION OF THE RATIO ANALYSIS

Ratio analysis involves establishing a comparative relationship between the

components of financial statement. It presents the financial statements into various
functional areas, which highlight various aspects of the business like liquidity,
profitability and assets turnover, financial structure. It is a powerful tool of financial
analysis, which recognizes a company’s strengths as well as its potential trouble
spots.