Independent Auditors Report

to the Members of ITC Limited

Report on the Financial Statements

Opinion

1. We have audited the accompanying financial

statements of ITC LIMITED (the Company), which
comprise the Balance Sheet as at 31st March, 2014,
the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory
information.

6. In our opinion and to the best of our information and

according to the explanations given to us, the aforesaid
financial statements give the information required by
the Act in the manner so required and give a true and
fair view in conformity with the accounting principles
generally accepted in India:

Managements Responsibility for the Financial

Statements
2. The Companys Management is responsible for the
preparation of these financial statements that give a
true and fair view of the financial position, financial
performance and cash flows of the Company in
accordance with the Accounting Standards notified
under the Companies Act, 1956 (the Act) (which
continue to be applicable in respect of Section 133 of
the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry
of Corporate Affairs) and in accordance with the
accounting principles generally accepted in India. This
responsibility includes the design, implementation and
maintenance of internal control relevant to the
preparation and presentation of the financial statements
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Auditors Responsibility
3. Our responsibility is to express an opinion on these
financial statements based on our audit. We conducted
our audit in accordance with the Standards on Auditing
issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with
ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit
evidence about the amounts and the disclosures in the
financial statements. The procedures selected depend
on the auditors judgement, including the assessment
of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal
control relevant to the Companys preparation and fair
presentation of the financial statements in order to
design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Companys internal
control. An audit also includes evaluating the
appropriateness of the accounting policies used and
the reasonableness of the accounting estimates made
by the Management, as well as evaluating the overall
presentation of the financial statements.
5. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
audit opinion.

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ITC Limited

REPORT AND ACCOUNTS 2014

(a) in the case of the Balance Sheet, of the state of

affairs of the Company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of
the profit of the Company for the year ended on that
date; and
(c) in the case of the Cash Flow Statement, of the cash
flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditors Report) Order,
2003 (the Order) issued by the Central Government
in terms of Section 227(4A) of the Act, we give in the
Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
8. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement dealt with by
this Report are in agreement with the books of
account.
(d) In our opinion, the Balance Sheet, the Statement of
Profit and Loss, and the Cash Flow Statement comply
with the Accounting Standards notified under the
Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms
of General Circular 15/2013 dated 13th September,
2013 of the Ministry of Corporate Affairs).
(e) On the basis of the written representations received
from the directors as on 31st March, 2014 taken on
record by the Board of Directors, none of the directors
is disqualified as on 31st March, 2014 from being
appointed as a director in terms of Section 274(1)(g)
of the Act.

For Deloitte Haskins & Sells

Chartered Accountants
(Firms Registration No. 302009E)
New Delhi
23rd May, 2014

P. R. Ramesh
Partner
(Membership No. 70928)

Annexure to the Independent

Auditors Report

(Referred to in paragraph 7 under Report on Other Legal and Regulatory Requirements section of our report of even date)

In our opinion and according to the information and explanations given to us, the nature of the Companys business/activities
during the year are such that clauses (xii), (xiii), (xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable to the
Company. In respect of the other clauses, we report as under:
(i)

In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation
of the fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular
programme of verification which, in our opinion, provides for physical verification of all the fixed assets at
reasonable intervals. According to the information and explanations given to us, no material discrepancies were
noticed on such verification.
(c) During the year, in our opinion, a substantial part of fixed assets has not been disposed off by the Company.

(ii)

In respect of its inventory:

(a) As explained to us, the inventories other than material lying with third parties (which have substantially been
confirmed) were physically verified during the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification
of inventory followed by the Management were reasonable and adequate in relation to the size of the Company
and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained
proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii)

The Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other
parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(iv)

In our opinion and according to the information and explanations given to us, there are adequate internal control
systems commensurate with the size of the Company and the nature of its business for the purchase of inventory
and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any
major weakness in such internal control system.

(v)

To the best of our knowledge and belief and according to the information and explanations given to us, there are no
contracts or arrangements that needed to be entered in the Register maintained in the pursuance of Section 301 of
the Companies Act, 1956.

(vi)

In our opinion and according to the information and explanations given to us, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information
and explanations given to us, no Order has been passed by the Company Law Board or the National Company Law
Tribunal or the Reserve Bank of India or any Court or any other Tribunal on the Company.

(vii)

In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature
of its business.

(viii) We have broadly reviewed the cost records maintained by the Company, as prescribed by the Central Government
under Section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribed cost
records have been maintained and are being made up. We have, however, not made a detailed examination of the
cost records with a view to determine whether they are accurate or complete.
(ix)

According to the information and explanations given to us and according to the books and records as produced and
examined by us, in our opinion:
(a) The Company is regular in depositing undisputed statutory dues including provident fund, investor education and
protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, cess and other material statutory dues as applicable with the appropriate authorities.
(b) As at 31st March, 2014, the following are the particulars of dues on account of income tax, sales tax, wealth tax,
service tax, customs duty, excise duty and cess matters that have not been deposited on account of any dispute:

ITC Limited

REPORT AND ACCOUNTS 2014

135

Name of
the statute

Nature of
the dues

Amount
(` in
Crores)

Period to which
the amount
relates

Forum where pending

Various years
covering the period
Sales Tax
and VAT
Laws

Customs
Act, 1962

Central
Excise
Act, 1944

Finance Act,
1994

Income
Tax Act,
1961

Sales tax
and VAT

Customs
duty

Excise duty

Service tax

Income tax

8.28

1987-2013

8.66

1994-2014

162.34

2000-2008

0.01

2010-2011

1.50

2005-2007

10.66

1996-2014

61.82

1973-2013

1.43
0.31

2005-2010
1991-1996

3.78

2004-2012

15.26

2005-2011

93.62

1999-2006

Appellate Authority
upto Commissioners /
Revisional authorities level
Appellate Authority
Tribunal level
High Court
Appellate Authority
upto Commissioners /
Revisional authorities level
Appellate Authority
Tribunal level
Appellate Authority
upto Commissioners /
Revisional authorities level
Appellate Authority
Tribunal level
High Court
Supreme Court
Appellate Authority
upto Commissioners /
Revisional authorities level
Appellate Authority
Tribunal level
Appellate Authority
upto Commissioners /
Revisional authorities level

Out of the total disputed dues aggregating ` 367.67 Crores as above, ` 234.20 Crores has been stayed for
recovery by the relevant authorities.
(x)

The Company does not have accumulated losses at the end of the financial year and the Company has not incurred
cash losses during the financial year covered by our audit and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to
any financial institution, bank or to debenture holders during the year.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader
in securities. The Company has maintained proper records of transactions and contracts in respect of shares, securities,
debentures and other investments and timely entries have been made therein. All shares, securities, debentures and
other investments have been held by the Company in its own name.
(xiii) According to the information and explanations given to us, the Company has not given guarantees for loans taken
by others from banks and financial institutions.
(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied for
the purposes for which they were obtained.
(xv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance
Sheet, we report that funds raised on short-term basis have not been used during the year for long-term investment.
(xvi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company
and no significant fraud on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Firms Registration No. 302009E)
P. R. Ramesh
Partner
(Membership No. 70928)

New Delhi
23rd May, 2014

136

ITC Limited

REPORT AND ACCOUNTS 2014