Company Profile

ITC Limited

Overview

- Founded: 1910 by Savitri Jindal

- Headquarters: Kolkata, West Bengal, India

- Industry: Conglomerate (FMCG, Hotels, Paperboards, Packaging, Agri-business,

Information Technology)

- Revenue: Over ₹70,000 Crores

- Market Capitalization: Over ₹5,00,000 Crores

- Global Reach: Presence in over 60 countries

- Distribution Network: 6 million retail outlets across India (urban & rural penetration)

Leadership

- Founder: Savitri Jindal

- Chairman: Mr. Yogesh Chander Deveshwar (Former)

- CEO: Mr. Sanjiv Puri

- MD: Mr. Sanjiv Puri

Vision and Mission

- Vision: To be the most admired and sustainable company, delivering superior value
to all stakeholders.

- Mission: To serve the needs of society through the development of world-class

products, innovation, and a commitment to sustainability.
Leading Conglomerate

- Business Segments: FMCG, Hotels, Agri-business, Paperboards, Packaging,

Information Technology

- Power Brands:

- FMCG: Aashirvaad, Sunfeast, Bingo!, Classmate, Fiama, and Vivel

- Hotels: ITC Hotels

- Agri-business: Aashirvaad, Farmlite

- Packaging: ITC Paperboards & Packaging

- Information Technology: ITC Infotech

Global Leadership

- Significant Presence: North America, Europe, Africa, and Asia-Pacific

- Revenue from Exports: Contributes significantly to total turnover, particularly

through brands like Aashirvaad and Sunfeast.

Key Consumer Categories

- FMCG: Food & Beverages, Personal Care, Home Care, Tobacco

- Hotels: Luxury Hotels, Resorts, and Dining

- Agri-business: Commodities, Spices, and Grains

- Paperboards & Packaging: Sustainable packaging solutions

- Information Technology: IT Services and Software Solutions

ITC continues to be a leading player in India, delivering high-quality products

across multiple sectors, blending over 100 years of experience with innovation,
sustainability, and a commitment to customer satisfaction globally.
 Product Portfolio

Stick 5-6 photos of popular product of ITC in

atleast 3 page single side.
Ratio Analysis

Meaning:
Ratio Analysis is a financial tool used to evaluate the performance, efficiency, and financial health
of a business. It involves calculating and interpreting various financial ratios derived from a
company’s financial statements, such as the Balance Sheet and Profit & Loss Statement. These
ratios help stakeholders make informed decisions.

Objectives of Ratio Analysis

1. Assess Financial Health: To evaluate the financial position and stability of the business.
2. Measure Performance: To determine profitability, liquidity, and operational efficiency.
3. Assist Decision-Making: To provide insights for managers, investors, and creditors.
4. Trend Analysis: To identify growth patterns and compare past and present performance.
5. Compare with Industry Standards: To benchmark against competitors or industry norms.

Advantages of Ratio Analysis

1. Simplifies Financial Data: Presents complex financial information in an understandable

form.
2. Performance Evaluation: Helps assess the operational efficiency and profitability of the
business.
3. Trend Analysis: Tracks financial trends over time.
4. Comparative Analysis: Enables comparison with competitors and industry standards.
5. Decision Support: Assists in making strategic and financial decisions.

Limitations of Ratio Analysis

1. Depends on Historical Data: Relies on past performance, which may not reflect future
trends.
2. Ignores Qualitative Factors: Does not consider non-financial elements like market
conditions or management quality.
3. Inconsistent Accounting Practices: Differences in accounting methods may affect
comparability.
4. Static Analysis: Ratios provide a snapshot but may not account for dynamic business
changes.
5. Lack of Standards: No universal benchmarks, making interpretation subjective.
Classification of Ratios

1. Liquidity Ratios

 Purpose: Measure a company's ability to meet short-term obligations.

 Examples:
o Current Ratio = Current Assets / Current Liabilities
o Quick Ratio (Acid-Test Ratio) = (Current Assets - Inventory) / Current Liabilities

2. Solvency Ratios

 Purpose: Evaluate long-term financial stability and the ability to meet long-term debts.
 Examples:
o Debt-to-Equity Ratio = Total Debt / Shareholders' Equity
o Interest Coverage Ratio = EBIT / Interest Expense

3. Activity Ratios (Efficiency Ratios)

 Purpose: Measure how efficiently a company utilizes its resources.

 Examples:
o Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
o Debtor Turnover Ratio = Net Credit Sales / Average Accounts Receivable

4. Profitability Ratios

 Purpose: Assess the ability to generate profits relative to revenue, assets, or equity.
 Examples:
o Gross Profit Ratio = (Gross Profit / Net Sales) × 100
o Net Profit Ratio = (Net Profit / Net Sales) × 100
o Return on Equity (ROE) = Net Income / Shareholders' Equity
Standalone Balance Sheet as at 31st March, 2024
As at As at
Note 31st March, 2024 31st March, 2023
(` in Crores) (` in Crores)
ASSETS
Non-current assets
(a) Property, Plant and Equipment 3A 22015.50 20491.32
(b) Capital work-in-progress 3B 1077.97 1681.47
(c) Investment Property 3C 373.09 352.26
(d) Goodwill 3D 577.20 577.20
(e) Other Intangible assets 3E 2055.74 2037.42
(f) Intangible assets under development 3F 9.07 15.13
(g) Right-of-use assets 3G 721.69 715.91
(h) Financial Assets
(i) Investments 4 22821.94 16363.55
(ii) Loans 5 2.63 4.07
(iii) Others 6 372.88 23197.45 3608.23 19975.85
(i) Other non-current assets 7 1229.22 51256.93 1211.74 47058.30
Current assets
(a) Inventories 8 12631.51 10593.90
(b) Financial Assets
(i) Investments 9 11916.88 16357.07
(ii) Trade receivables 10 3311.45 2321.33
(iii) Cash and cash equivalents 11 197.63 206.88
(iv) Other Bank Balances 12 6020.06 3624.38
(v) Loans 5 9.10 5.95
(vi) Others 6 849.86 22304.98 705.84 23221.45
(c) Other current assets 7 1134.18 36070.67 1388.09 35203.44
TOTAL ASSETS 87327.60 82261.74
EQUITY AND LIABILITIES
Equity
(a) Equity Share capital 13 1248.47 1242.80
(b) Other Equity 70984.83 72233.30 66351.00 67593.80
Liabilities
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings 14 1.76 3.28
(ii) Lease liabilities 15 261.95 273.59
(iii) Other financial liabilities 16 109.87 373.58 152.49 429.36
(b) Provisions 17 221.45 201.83
(c) Deferred tax liabilities (Net) 18 2083.66 2678.69 1621.13 2252.32
Current liabilities
(a) Financial Liabilities
(i) Borrowings 14 1.52 1.26
(ii) Lease liabilities 15 46.74 46.54
(iii) Trade payables
Total outstanding dues of micro enterprises
and small enterprises 206.85 137.50
Total outstanding dues of creditors other than
micro enterprises and small enterprises 4282.70 4213.76
(iv) Other financial liabilities 16 1659.33 6197.14 1730.68 6129.74
(b) Other current liabilities 19 5389.75 5446.16
(c) Provisions 17 68.72 63.59
(d) Current Tax Liabilities (Net) 20 760.00 12415.61 776.13 12415.62
TOTAL EQUITY AND LIABILITIES 87327.60 82261.74

The accompanying notes 1 to 31 are an integral part of the Standalone Financial Statements.
On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI Chairman & Managing Director
Chartered Accountants (DIN : 00280529)
Firm Registration Number: 324982E / E300003 S. DUTTA Director & Chief Financial Officer
Arvind Sethi (DIN : 01804345)
Partner R. K. SINGHI Company Secretary
(Membership No.: 89802) (Membership No.: FCS 3770)
Kolkata, May 23, 2024

164 ITC Limited REPORT AND ACCOUNTS 2024

Standalone Statement of Profit and Loss for the year ended 31st March, 2024
For the year ended For the year ended
Note 31st March, 2024 31st March, 2023
(` in Crores) (` in Crores)

I Revenue From Operations 21A, 21B 70105.29 70251.28

II Other Income 22 3538.28 2437.61
III Total Income (I+II) 73643.57 72688.89
IV EXPENSES
Cost of materials consumed 21309.84 19809.83
Purchases of Stock-in-Trade 6042.97 9109.85
Changes in inventories of finished goods, Stock-in-Trade,
work-in-progress and intermediates 23 (370.71) (39.50)
Excise duty 4664.48 4208.01
Employee benefits expense 24 3732.23 3569.46
Finance costs 25 45.73 41.81
Depreciation and amortization expense 1647.82 1662.73
Other expenses 26 10247.87 9649.16
Total expenses (IV) 47320.23 48011.35
V Profit before exceptional items and tax (III-IV) 26323.34 24677.54
VI Exceptional Items 28(i) (7.57) 72.87
VII Profit before tax (V+VI) 26315.77 24750.41
VIII Tax expense:
Current Tax 27 5661.21 6025.32
Deferred Tax 27 232.59 (28.22)
IX Profit for the year (VII-VIII) 20421.97 18753.31
Other Comprehensive Income
A (i) Items that will not be reclassified to profit or loss:
– Remeasurements of the defined benefit plans 28(vi) (22.97) (21.81)
– Equity instruments through other comprehensive
income 2515.06 91.90
– Effective portion of gains / (losses) on designated
portion of hedging instruments in a cash flow hedge (10.46) 21.22
(ii) Income tax relating to items that will not be reclassified
to profit or loss 27 (228.72) (0.34)
B (i) Items that will be reclassified to profit or loss:
– Debt instruments through other comprehensive
income 17.91 (35.01)
– Effective portion of gains / (losses) on designated
portion of hedging instruments in a cash flow hedge 19.71 (47.45)
(ii) Income tax relating to items that will be reclassified to
profit or loss 27 (9.47) 20.75
X Other Comprehensive Income [A (i+ii) + B (i+ii)] 2281.06 29.26
XI Total Comprehensive Income for the year (IX+X) 22703.03 18782.57
XII Earnings per equity share (Face Value ` 1.00 each): 28(ii)
(1) Basic (in `) 16.39 15.15
(2) Diluted (in `) 16.35 15.11

The accompanying notes 1 to 31 are an integral part of the Standalone Financial Statements.
On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI Chairman & Managing Director
Chartered Accountants (DIN : 00280529)
Firm Registration Number: 324982E / E300003 S. DUTTA Director & Chief Financial Officer
Arvind Sethi (DIN : 01804345)
Partner R. K. SINGHI Company Secretary
(Membership No.: 89802) (Membership No.: FCS 3770)
Kolkata, May 23, 2024

ITC Limited REPORT AND ACCOUNTS 2024 165

 Current Ratio

Meaning: Measures a company's ability to meet short-term obligations using current assets.

Formula:
Current Ratio = Current Assets / Current Liabilities (Ideal Ratio 2:1)

Calculation:

Current Current Current

Year
Assets (₹ Cr) Liabilities (₹ Cr) Ratio

31/03/2024 36070.67 12415.61 2.91

31/03/2023 35203.44 12415.62 2.84

Comment: Improved from 2.84 to 2.91, indicating better liquidity. It indicates a significant
enhancement in ITC's ability to meet its short-term obligations. A ratio of 2.91 means the company
has ₹2.91 in current assets for every ₹1 of current liabilities, which is considered financially stable.

Liquid Ratio/Quick Ratio /Acid Test Ratio

Meaning: Measures a company's ability to meet short-term obligations using its most liquid assets,
excluding inventory, which may not be easily converted into cash.

Formula:
Liquid Ratio = Liquid Assets / Current Liabilities (Ideal Ratio =1:1)

Liquid or Quick Assets = Current Assets (-) Prepaid Expenses (-) Inventory

Calculation:

Quick Current Quick

Year
Assets (₹ Cr) Liabilities (₹ Cr) Ratio

31/03/2024 23439.16 12415.61 1.88

31/03/2023 24609.54 12415.62 1.98

Comment: ITC's Quick Ratio has decreased from 1.98 in 2023 to 1.88 in 2024, indicating a slight
decline in liquidity. While the ratio is still above 1, meaning ITC has sufficient liquid assets to
cover its short-term liabilities, the drop suggests a marginal reduction in the company's ability to
meet immediate obligations without selling inventory. However, the ratio remains healthy,
suggesting the company still maintains a strong financial position.
 Debt-Equity Ratio

Meaning: The Debt-Equity Ratio measures the relative proportion of debt and equity used to
finance a company's assets. It indicates the level of financial leverage and the risk associated with
the company’s capital structure.
low debt equity ratio reflects more security.

Ideal Ratio
Normally, 2:1 is considered as an appropriate ratio. However, it may vary from industry to industry.

Formula:
Debt to Equity Ratio = Long-term Debts (or NCL) / Shareholders’ Funds (or Equity)

 Long-term Debts
 Long-term Borrowings (+) Long-term Provisions; or
 Total Debts (-) Current Liabilities; or
 Capital Employed (-) Equity; or

 Shareholders’ Funds (or Equity) =

 Share Capital (+) Reserves & Surplus
 Total Assets (-) Total Debts; or
 Non-current Assets (+) Working Capital (-) Non-Current Liabilities; or
 Capital Employed (-) Long-term Debts

Calculation:

Debt (₹ Equity (₹ Debt-Equity

Year
Cr) Cr) Ratio
31/03/2024 595.03 72233.30 0.008
31/03/2023 631.19 67593.80 0.009

Comment: ITC's Debt-Equity Ratio has slightly decreased from 0.009 in 2023 to 0.008 in 2024,
indicating a small reduction in the company's reliance on debt for financing. This decrease is a
positive sign, reflecting a further strengthening of the company's financial position and lower
financial risk. With such a low ratio, ITC remains in a strong position to meet its financial
obligations and is conservatively managing its debt, ensuring financial stability and flexibility for
future growth
 Total Assets to Debt Ratio

This ratio measures the extent of the coverage of long-term debts by assets. Thus, it measures
“safety margin” for long-term lenders.

A higher ratio indicates that assets have been mainly financed by owners’ funds and the long-term
loans is adequately covered by assets.

Formula
Total Assets to Debt Ratio = [Total Assets / Long-Term Debts]

 Total Assets
 Non-Current Assets (+) Current Assets; or
 Shareholders’ Funds (+) Total Debt (i.e. NCL + CL)

 Long-term Debts
 Long-term Borrowings (+) Long-term Provisions; or
 Total Debts (-) Current Liabilities; or
 Capital Employed (-) Equity; or

 It is expressed as pure ratio.

Calculations

Year Total Assets (₹ Cr) Debt (₹ Cr) Total Assets to Debt Ratio

31/03/2024 87327.60 595.03 146.76

31/03/2023 82261.74 631.19 130.25

Comment:

ITC's Total Assets to Debt Ratio increased from 130.25 in 2023 to 146.76 in 2024, indicating a
stronger financial position. The company has very little debt relative to its assets, suggesting a low
level of financial leverage. This demonstrates that ITC is maintaining a conservative approach
towards borrowing and is in a strong position to manage its obligations, with ample assets to
cover any liabilities. This is a sign of financial strength and stability.
 Proprietary Ratio

It measures the proportion of total assets financed by owners’ (shareholders’) funds, and is useful
for unsecured lenders & creditors. Higher proportion of shareholders’ funds in financing the assets
is a positive feature as it provides security to creditors.

Formula

Proprietary Ratio = [Shareholders’ Funds / Total Assets]

 Shareholders’ Funds (or Equity) =

 Share Capital (+) Reserves & Surplus
 Total Assets (-) Total Debts; or
 Non-current Assets (+) Working Capital (-) Non-Current Liabilities; or
 Capital Employed (-) Long-term Debts

 Total Assets
 Non-Current Assets (+) Current Assets; or
 Shareholders’ Funds (+) Total Debt (i.e. NCL + CL)

It may be expressed as pure ratio or as percentage.

Calculation for Dabur

Equity (₹ Total Assets Proprietary

Year
Cr) (₹ Cr) Ratio

31/03/2024 72233.30 87327.60 82.81%

31/03/2023 67593.80 82261.74 82.16%

Comment

ITC's Proprietary Ratio increased slightly from 82.16% in 2023 to 82.81% in 2024. This
improvement indicates that a slightly higher proportion of the company’s assets is financed by
shareholders' equity, further strengthening its financial position. With a high proprietary ratio, ITC
continues to demonstrate a strong equity base, lower financial risk, and a conservative approach to
debt, ensuring long-term financial stability.
 Interest Coverage Ratio

It shows the availability of profits to cover interest on long-term debts, and is useful for debenture
holders & long-term lenders.
It reveals the number of times interest on long-term debts is covered by the profits available for
interest. A higher ratio ensures safety of interest on debts.

Formula
Interest Coverage Ratio = [Profit before Interest & Tax / Interest on LT Debts]

 Profit Before Interest & Tax

 Profit After Tax (+) Tax (+) Interest on LT Debts; or

 Profit Before Tax (+) Interest on LT Debts
 Profit Before Tax = [Profit after tax / (100 – Tax Rate)]

It is expressed as “Number of Times”.

Calculations for Dabur

Profit Profit before Interest

Year before Finance Cost interest and Coverage
Tax tax Ratio

31/03/2024 26315.77 45.73 26361.5 576.45 times

31/03/2023 24750.41 41.81 24792.22 592.97 times

Comment
ITC's Interest Coverage Ratio decreased slightly from 592.97 times in 2023 to 576.45 times in
2024. Despite the slight decline, the ratio remains exceptionally high, indicating that ITC continues
to have a very strong ability to meet its interest payments. Such a high interest coverage ratio
reflects low financial risk and suggests that the company generates far more than enough earnings
to cover its interest obligations. This highlights ITC's robust profitability and solid financial stability.
 Activity or Turnover Ratios

Inventory Turnover Ratio

It determines the number of times inventory (finished goods or stock-in-trade) is converted into
revenue from operations during the accounting period under consideration. It shows whether
investment in inventory is proper or not i.e. it shows efficiency of inventory management.

Formula
Inventory Turnover Ratio = [Cost of Revenue from Operations / Avg. Inventory]

 Cost of Revenue from Operations (or Cost of RFO)

 Revenue from Operations (RFO) (-) Gross Profit or (+) Gross Loss; or
 Opening Inventory (+) Net Purchase (+) Direct Expense (-) Closing Inventory; or
 Cost of Raw Material Consumed (+) Purchase of Stock-in-Trade (+) Change in Inventory of
WIP, Finished Goods & Stock-in-Trade (+) Direct Expenses;
[to be used in case of manufacturing company]
 Cost of Raw Material Consumed = Op. stock of Raw Material (+) Purchase of Raw Material
(-) Cl. Stock of Raw Material

 Change in Inventory = Opening Inventory (-) Closing Inventory

 Avg. Inventory = [Opening Inventory* (+) Closing Inventory*] / 2

* of Finished Goods

 If no information about Cost of RFO is given, we may use RFO for calculating the ratio.

 It is expressed as “no. of times”.

Calculations for Dabur

Inventory
Cost of Average
Year Turnover
Revenue Inventory
Ratio

31/03/2024 37229.97 11612.70 3.21

31/03/2023 38529.34 10295.83 3.74

Calculations of Cost of Revenue

Expenses 31/03/2024 31/03/2023

Cost of materials consumed 21309.84 19809.83

Purchases of stock-in-trade 6042.97 9109.85

Changes in inventories (370.71) (39.50)

Others
10247.87 9649.16
(Assumed as direct expenses)

Cost of Revenue 37229.97 38529.34

Calculations of Average Inventory

Particulars 31/03/2024 31/03/2023

Closing Inventory 12631.51 10593.90

Opening Inventory 10593.90 9997.77

Average Inventory 11612.70 10295.83

Comment:
ITC's Inventory Turnover Ratio decreased from 3.74 in 2023 to 3.21 in 2024. This decline suggests
that the company is taking slightly longer to sell its inventory or is holding more inventory on
hand. While the ratio is still within a reasonable range, the decrease could indicate slower
inventory movement or increased stock levels. ITC may need to focus on improving inventory
management or aligning production and sales more closely to maintain optimal efficiency.
 Working Capital Turnover Ratio

It helps in ascertaining whether working capital has been efficiently utilised in generating
revenue. High ratio indicates effective use of working capital.

Working Capital Turnover Ratio = [Revenue from Operations / Working Capital]

Revenue from operations = Net Sales or Sales (-) Sales Return

Working Capital = Current Assets (-) Current Liabilities

It is expressed in “no. of times”.

Calculations for Dabur

Working
Revenue Working
Capital
Year from Capital
Turnover
Operations (CA-CL)
Ratio

31/03/2024 70105.29 23655.06 2.96

31/03/2023 70251.28 22787.82 3.08

Comment
ITC's Working Capital Turnover Ratio decreased slightly from 3.08 in 2023 to 2.96 in 2024. This
indicates a marginal decline in the efficiency of utilizing working capital to generate revenue.
While the change is minor and the ratio remains healthy, ITC may need to monitor its working
capital management closely to ensure sustained efficiency in operations and revenue generation.
 Profitability Ratios

Gross Profit Ratio

It shows relationship between gross profit & sales, and indicates gross margin on products sold. It
also indicates the margin available to cover operating expenses, non-operating expenses, etc.
Higher gross profit ratio is always a good sign.

Formula
GP Ratio = [Gross Profit / Sales] x 100

Gross Profit = Revenue from Operations (-) Cost of Revenue from Operations

Revenue from Cost of GP Ratio

Year Gross Profit
Operations Revenue (GP/Revenue X 100)

31/03/2024 70105.29 37229.97 32875.32 46.89%

31/03/2023 70251.28 38529.34 31721.94 45.15%

Comment

ITC's Gross Profit Ratio increased from 45.15% in 2023 to 46.89% in 2024. This improvement
indicates better cost management or higher pricing efficiency, allowing the company to retain a
greater portion of its revenue as gross profit. The rising GP Ratio highlights ITC's enhanced
operational efficiency and ability to generate stronger profitability from its core business activities.
 Operating Ratio

This ratio shows the operational efficiency of the business, by establishing a relationship between
operating cost & revenue from operations.

Lower the ratio, better it is.

Formula
Operating Ratio (%) = [Operating Cost / RFO] x 100
Operating Cost = Cost of RFO (+) Operating Expenses

Operating Expenses = Employee Benefit Expenses (+) Depreciation & Amortisation (+) Other
Operating Expenses

Calculations

Revenue from Operating Operating Ratio

Year
Operations Cost (Operating cost/Revenue X 100)

31/03/2024 70105.29 42610.02 60.78%

31/03/2023 70251.28 43761.53 62.29%

Operating Cost

Expenses 31/03/2024 31/03/2023

Cost of Revenue 37229.97 38529.34

Depreciation 1647.82 1662.73

Employee Benefit Expenses 3732.23 3569.46

Operating Cost 42610.02 43761.53

Comment:
ITC's Operating Ratio improved from 62.29% in 2023 to 60.78% in 2024. This decrease reflects
enhanced operational efficiency, with a smaller portion of revenue being spent on operating costs.
The improvement suggests better cost control or increased revenue efficiency, contributing to
stronger profitability.
 Operating Profit Ratio

It shows the operational efficiency of the business, by establishing a relationship between operating
profits & revenue from operations.

Operating Profit Ratio (%) = [Operating Profit / RFO] x 100

Operating Profit Ratio (%) = 100 – Operating Ratio(%)

Calculations

Operating Operating Profit Ratio

Year
Ratio (100-Operating Ratio)

31/03/2024 60.78% 39.22%

31/03/2023 62.29% 37.71%

Comment:

The Operating Profit Ratio increased from 37.71% in 2023 to 39.22% in 2024, indicating that
ITC has become slightly more efficient in generating operating profit from its revenue. This
improvement suggests that the company is better at controlling its operating costs or improving its
sales, leading to a higher proportion of revenue being retained as operating profit. The increase is a
positive trend, signaling improved operational performance and a stronger capacity to generate
profits from its core business activities.
 Net Profit Ratio

It is a measure of net profit margin in relation to revenue from operations. It shows overall
efficiency & profitability by establishing a relationship between net profit & revenue from
operations.

Formula
Net Profit Ratio (%) = [NPAT / RFO] x 100

NPAT = RFO (-) Cost of RFO (-) Operating & Non-Operating Expenses (+) Non-Operating
Income (-) Tax Expense

It is expressed in percentage.

Revenue from Net Profit Ratio

Year Net Profit
Operations (Net Profit/Revenue X 100)

31/03/2024 70105.29 20421.97 29.13%

31/03/2023 70251.28 18753.31 26.69%

Comment:

The Net Profit Ratio increased from 26.69% in 2023 to 29.13% in 2024, indicating a good
improvement in ITC's overall profitability. This increase suggests that the company has managed to
either increase its revenue or reduce its non-operating costs, resulting in a higher proportion of sales
being converted into net profit. The improvement is a positive sign, reflecting better financial
performance and efficiency in managing both operational and non-operational expenses.
 Cash Flow Statements
Meaning
A cash flow statement is a financial statement which shows the inflows and outflows of cash and
cash equivalents from various activities (operating activities, investing activities and financing
activities) of an enterprise during an accounting period.
Cash and Cash Equivalents
As per AS-3, ‘Cash’ comprises cash in hand and demand deposits with banks.
‘Cash equivalents’ means short-term highly liquid investments that are readily convertible into
known amounts
of cash and which are subject to an insignificant risk of changes in value.
An investment normally qualifies as cash equivalents only when it has a short maturity, of say, 3
months/90 days or less from the date of acquisition.

Objectives of Cash Flow Statement

1. The primary objective of cash flow statement is to provide useful information about cash flows
(inflows and outflows) of an enterprise during a particular period under various heads, i.e.,
operating activities, investing activities and financing activities.
2. This information is useful in providing users of financial statements with a basis to assess the
ability of the enterprise to generate cash and cash equivalents and the needs of the enterprise to
utilise those cash flows.
Benefits/Advantages of Cash Flow Statement

1. Provides insights into changes in net assets, financial structure (liquidity and solvency), and
the ability to manage cash flows, helping adapt to changing circumstances.
2. Assists in evaluating an enterprise's ability to generate cash, enabling comparisons of future
cash flow values across companies.
3. Enhances comparability of operating performance by eliminating the effects of different
accounting treatments.
4. Helps balance cash inflows and outflows, ensures accuracy of past cash flow forecasts, and
examines the relationship between profitability and cash flow, considering price changes.
Classifications

I. Cash flows from Operating Activities

Operating activities are the principal revenue generating activities (or the primary or main
activities) of the enterprise and these activities are not investing or financing activities. For
example, for a company manufacturing garments, operating activities are procurement of raw
material, manufacturing expenses incurred, sale of garments, etc.

Examples of Cash Inflows & Outflows from Operating Activities

• Cash receipts from sale of goods and the rendering of services to customers
• Cash receipts from royalties, fees, commissions and other revenues
Examples of Cash Outflows from Operating Activities
• Cash payments to suppliers for goods and services purchased
• Cash payments to and on behalf of the employees (i.e. payment of employees benefits expenses)
• Cash payments of operating expenses e.g. office and administrative expenses, selling and
distribution
expenses, etc.
• Cash payments to an insurance enterprise for premiums and claims, annuities, and other policy
benefits

• Cash payments of income taxes (unless they can be specifically identified with financing and
investing activities).

II. Cash Flows from Investing Activities

Investing activities are the acquisition and disposal of long-term assets and long-term
investments.
In other words, investing activities relate to purchase and sale of fixed assets such as machinery,
furniture, land and building, etc and long-term investments.

Examples of Cash Outflows from Investing Activities

• Cash payments to acquire fixed assets (both tangible and intangible fixed assets) and capitalised
research and development
• Cash payments to acquire shares, warrants or debt instruments of other enterprises (other than
the instruments those heldfor trading purposes)
• Cash advances and loans made to third party by non-financial enterprises (since advances and
loans made by a financial enterprise is classified as operating activities)
Examples of Cash Inflows from Investing Activities
• Cash receipts from sale of fixed assets (both tangible and intangible fixed assets)
• Cash receipt from the repayment of advances or loans made to third parties (except in case of
financial enterprise)
• Cash receipts from sale of shares, warrants or debt instruments of other enterprises (except those
held for trading purposes)
• Interest received in cash from loans and advances made to third parties
• Dividend received from investments in other enterprises

III. Cash Flows from Financing Activities

As per AS-3, financing activities are activities that result in changes in the size and composition
of the owners’ capital (including preference share capital in case of a company) and borrowings
of the enterprise. In simple words, financing activities relate to long-term funds or capital of
an enterprise, e.g., cash proceeds from issue of equity shares, debentures, raising long-term
bank loans, repayment of bank loan, etc.

Examples of Cash Inflows from Financing Activities

• Cash proceeds from issuing shares (equity or/and preference)

• Cash proceeds from issuing debentures, loans, bonds and other short-term borrowings/long-term
borrowings
Examples of Cash Outflows from Financing Activities

• Cash repayments of amounts borrowed, e.g. redemption of debentures or preference shares, buy
back of equity shares, repayment of long-term debts, etc.
• Interest paid on debentures and long-term debts Dividends paid (both final dividend and interim
dividend)

1. A transaction may include cash flows that are classified differently. For example, when the
instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest
and loan, the interest element is classified under financing activities and the loan element is
classified under investing activities.

2. Same activity may be classified differently for different enterprises. For example, purchase of
shares is an operating l activity for a share brokerage firm (an investment company) while it is
investing activity in case of other enterprises.
 Format of CFS

To be noted from Book- Complete Format

Standalone Balance Sheet as at 31st March, 2024
As at As at
Note 31st March, 2024 31st March, 2023
(` in Crores) (` in Crores)
ASSETS
Non-current assets
(a) Property, Plant and Equipment 3A 22015.50 20491.32
(b) Capital work-in-progress 3B 1077.97 1681.47
(c) Investment Property 3C 373.09 352.26
(d) Goodwill 3D 577.20 577.20
(e) Other Intangible assets 3E 2055.74 2037.42
(f) Intangible assets under development 3F 9.07 15.13
(g) Right-of-use assets 3G 721.69 715.91
(h) Financial Assets
(i) Investments 4 22821.94 16363.55
(ii) Loans 5 2.63 4.07
(iii) Others 6 372.88 23197.45 3608.23 19975.85
(i) Other non-current assets 7 1229.22 51256.93 1211.74 47058.30
Current assets
(a) Inventories 8 12631.51 10593.90
(b) Financial Assets
(i) Investments 9 11916.88 16357.07
(ii) Trade receivables 10 3311.45 2321.33
(iii) Cash and cash equivalents 11 197.63 206.88
(iv) Other Bank Balances 12 6020.06 3624.38
(v) Loans 5 9.10 5.95
(vi) Others 6 849.86 22304.98 705.84 23221.45
(c) Other current assets 7 1134.18 36070.67 1388.09 35203.44
TOTAL ASSETS 87327.60 82261.74
EQUITY AND LIABILITIES
Equity
(a) Equity Share capital 13 1248.47 1242.80
(b) Other Equity 70984.83 72233.30 66351.00 67593.80
Liabilities
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings 14 1.76 3.28
(ii) Lease liabilities 15 261.95 273.59
(iii) Other financial liabilities 16 109.87 373.58 152.49 429.36
(b) Provisions 17 221.45 201.83
(c) Deferred tax liabilities (Net) 18 2083.66 2678.69 1621.13 2252.32
Current liabilities
(a) Financial Liabilities
(i) Borrowings 14 1.52 1.26
(ii) Lease liabilities 15 46.74 46.54
(iii) Trade payables
Total outstanding dues of micro enterprises
and small enterprises 206.85 137.50
Total outstanding dues of creditors other than
micro enterprises and small enterprises 4282.70 4213.76
(iv) Other financial liabilities 16 1659.33 6197.14 1730.68 6129.74
(b) Other current liabilities 19 5389.75 5446.16
(c) Provisions 17 68.72 63.59
(d) Current Tax Liabilities (Net) 20 760.00 12415.61 776.13 12415.62
TOTAL EQUITY AND LIABILITIES 87327.60 82261.74

The accompanying notes 1 to 31 are an integral part of the Standalone Financial Statements.
On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI Chairman & Managing Director
Chartered Accountants (DIN : 00280529)
Firm Registration Number: 324982E / E300003 S. DUTTA Director & Chief Financial Officer
Arvind Sethi (DIN : 01804345)
Partner R. K. SINGHI Company Secretary
(Membership No.: 89802) (Membership No.: FCS 3770)
Kolkata, May 23, 2024

164 ITC Limited REPORT AND ACCOUNTS 2024

Standalone Statement of Profit and Loss for the year ended 31st March, 2024
For the year ended For the year ended
Note 31st March, 2024 31st March, 2023
(` in Crores) (` in Crores)

I Revenue From Operations 21A, 21B 70105.29 70251.28

II Other Income 22 3538.28 2437.61
III Total Income (I+II) 73643.57 72688.89
IV EXPENSES
Cost of materials consumed 21309.84 19809.83
Purchases of Stock-in-Trade 6042.97 9109.85
Changes in inventories of finished goods, Stock-in-Trade,
work-in-progress and intermediates 23 (370.71) (39.50)
Excise duty 4664.48 4208.01
Employee benefits expense 24 3732.23 3569.46
Finance costs 25 45.73 41.81
Depreciation and amortization expense 1647.82 1662.73
Other expenses 26 10247.87 9649.16
Total expenses (IV) 47320.23 48011.35
V Profit before exceptional items and tax (III-IV) 26323.34 24677.54
VI Exceptional Items 28(i) (7.57) 72.87
VII Profit before tax (V+VI) 26315.77 24750.41
VIII Tax expense:
Current Tax 27 5661.21 6025.32
Deferred Tax 27 232.59 (28.22)
IX Profit for the year (VII-VIII) 20421.97 18753.31
Other Comprehensive Income
A (i) Items that will not be reclassified to profit or loss:
– Remeasurements of the defined benefit plans 28(vi) (22.97) (21.81)
– Equity instruments through other comprehensive
income 2515.06 91.90
– Effective portion of gains / (losses) on designated
portion of hedging instruments in a cash flow hedge (10.46) 21.22
(ii) Income tax relating to items that will not be reclassified
to profit or loss 27 (228.72) (0.34)
B (i) Items that will be reclassified to profit or loss:
– Debt instruments through other comprehensive
income 17.91 (35.01)
– Effective portion of gains / (losses) on designated
portion of hedging instruments in a cash flow hedge 19.71 (47.45)
(ii) Income tax relating to items that will be reclassified to
profit or loss 27 (9.47) 20.75
X Other Comprehensive Income [A (i+ii) + B (i+ii)] 2281.06 29.26
XI Total Comprehensive Income for the year (IX+X) 22703.03 18782.57
XII Earnings per equity share (Face Value ` 1.00 each): 28(ii)
(1) Basic (in `) 16.39 15.15
(2) Diluted (in `) 16.35 15.11

The accompanying notes 1 to 31 are an integral part of the Standalone Financial Statements.
On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI Chairman & Managing Director
Chartered Accountants (DIN : 00280529)
Firm Registration Number: 324982E / E300003 S. DUTTA Director & Chief Financial Officer
Arvind Sethi (DIN : 01804345)
Partner R. K. SINGHI Company Secretary
(Membership No.: 89802) (Membership No.: FCS 3770)
Kolkata, May 23, 2024

ITC Limited REPORT AND ACCOUNTS 2024 165

Standalone Statement of Cash Flows for the year ended 31st March, 2024
For the year ended For the year ended
31st March, 2024 31st March, 2023
(` in Crores) (` in Crores)
A. Cash Flow from Operating Activities
PROFIT BEFORE TAX 26315.77 24750.41
ADJUSTMENTS FOR:
Depreciation and amortization expense 1647.82 1662.73
Share based payments to employees 103.10 58.50
Finance costs 45.73 41.81
Interest Income (1592.41) (1434.53)
Dividend Income (990.35) (556.90)
(Gain) / Loss on sale of property, plant and equipment,
lease termination - Net (54.07) 4.53
Inventory write-offs / write-downs (net of reversals) 149.62 155.46
Doubtful and bad debts 9.23 (0.93)
Doubtful and bad advances, loans and deposits 25.03 1.16
Impairment of investment in joint venture – 8.50
Gain recognised on divestment of shares held in joint venture (9.49) –
Net gain arising on financial instruments measured at amortised
cost / mandatorily measured at fair value through profit or loss (784.82) (416.74)
Foreign currency translations and transactions - Net (6.28) (1456.89) 37.89 (438.52)
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 24858.88 24311.89
ADJUSTMENTS FOR:
Trade receivables, advances and other assets (887.87) (603.25)
Inventories (2187.23) (751.59)
Trade payables, other liabilities and provisions 17.30 (3057.80) 755.24 (599.60)
CASH GENERATED FROM OPERATIONS 21801.08 23712.29
Income tax paid (net of refunds) (5682.85) (5800.59)
NET CASH FROM OPERATING ACTIVITIES 16118.23 17911.70
B. Cash Flow from Investing Activities
Purchase of property, plant and equipment, intangibles,
ROU asset etc. (2647.23) (1858.32)
Sale of property, plant and equipment 100.85 48.86
Purchase of current investments (64931.45) (72925.91)
Sale / redemption of current investments 67992.14 67720.51
Payment towards contingent purchase consideration – (63.75)
Investment in subsidiaries (1050.35) (1184.14)
Investment in associates* (86.26) (1.88)
Investment in joint venture (0.90) –
Purchase of non-current investments* (2745.51) (2349.41)
Sale / redemption of non-current investments 2622.86 4057.60
Redemption of investment in subsidiary – 18.00
Advance received towards divestment of shares held in joint venture
[Refer Note 28 (x)] – 56.00
Dividend received 990.35 556.90
Interest received 1016.53 1216.27
Investment in bank deposits
(original maturity more than 3 months) (3578.11) (7427.20)
Redemption / maturity of bank deposits
(original maturity more than 3 months) 4446.34 5476.33
Investment in deposit with housing finance company – (3500.00)
Redemption / maturity of deposit with housing finance company – 5000.00
Loans given (12.22) (8.21)
Loans realised 10.51 8.98
NET CASH FROM / (USED IN) INVESTING ACTIVITIES 2127.55 (5159.37)

168 ITC Limited REPORT AND ACCOUNTS 2024

Standalone Statement of Cash Flows for the year ended 31st March, 2024
For the year ended For the year ended
31st March, 2024 31st March, 2023
(` in Crores) (` in Crores)
C. Cash Flow from Financing Activities
Proceeds from issue of share capital 1442.83 2477.39
Repayment of non-current borrowings (1.26) (0.74)
Principal payment of lease liabilities (56.64) (51.97)
Interest paid (46.02) (40.04)
Net increase in statutory restricted accounts balances 12.12 14.94
Dividend paid (19606.06) (15150.44)
Dividend distribution tax refund received – 20.43
NET CASH USED IN FINANCING ACTIVITIES (18255.03) (12730.43)
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (9.25) 21.90
OPENING CASH AND CASH EQUIVALENTS 206.88 184.98
CLOSING CASH AND CASH EQUIVALENTS 197.63 206.88

* Also refer Note 28(ix)

Notes:
1. The above Statement of Cash Flows has been prepared under the “Indirect Method” as set out in Ind AS - 7 “Statement of Cash Flows”

As at As at
2. CASH AND CASH EQUIVALENTS: 31st March, 2024 31st March, 2023
Cash and cash equivalents as above 197.63 206.88
Unrealised gain / (loss) on foreign currency cash and cash equivalents … …
Cash and cash equivalents (Note 11) 197.63 206.88
3. Net Cash Flow from Operating Activities includes an amount of ` 436.16 Crores (2023 - ` 328.80 Crores) spent towards Corporate
Social Responsibility.
4. Disclosure of change arising from financing activities in respect of lease liabilities - Refer Note 15

The accompanying notes 1 to 31 are an integral part of the Standalone Financial Statements.
On behalf of the Board
In terms of our report attached
For S R B C & CO LLP S. PURI Chairman & Managing Director
Chartered Accountants (DIN : 00280529)
Firm Registration Number: 324982E / E300003 S. DUTTA Director & Chief Financial Officer
Arvind Sethi (DIN : 01804345)
Partner R. K. SINGHI Company Secretary
(Membership No.: 89802) (Membership No.: FCS 3770)
Kolkata, May 23, 2024

ITC Limited REPORT AND ACCOUNTS 2024 169