TABLE OF CONTENT
MANAGEMENT DISCUSSION AND ANALYSIS
PROFIT AND LOSS ACCOUNT
Return on Equity (ROE)
To study the financial statement of ITC ltd.
To analyze the financial statement of company by trend analysis and ratio analysis. •
Learn new terms from the study of annual report
I.T.C. Limited (ITC). The Group's principal activities are to manufacture cigarettes and tobaccos. The Group operates through five business segments: Cigarettes, Hotels, Paperboards, Paper and Packing, Agri Business and Others. The Group is into Lifestyle retailing business, garments, greeting, gift and stationery, packaged foods and export of Indian agri-commodities. The Group provides a range of branded packaged and convenience food for its customers with its operations all over India. The brand names are India Kings, Wills, Gold Flake, Checkers, Hi-Val, Wills Sport, Expressions. ACCOUNTING POLICIES
To prepare financial statements in accordance with the historical cost convention modified by revaluation of certain Fixed Assets as and when undertaken as detailed below. Fixed Assets
To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. To capitalize software where it is expected to provide future enduring economic benefits. Capitalization costs include license fees and costs of implementation/system integration services. The costs are capitalized in the year in which the relevant software is implemented for use. To charge off as a revenue expenditure all up gradation/ enhancements unless they bring similar significant additional benefits. Depreciation
To calculate depreciation on Fixed Assets and Intangible Assets in a manner that amortizes the cost of the assets after commissioning, over their estimated useful lives or, where specified, lives based on the rates specified in Schedule XIV to the Companies Act, 1956, whichever is lower, by equal annual installments. Leasehold properties are amortized over the period of the lease. To amortize capitalized software costs over a period of five years. Revaluation of Assets
As and when Fixed Assets are revalued, to adjust the provision for depreciation on such revalued Fixed Assets, where applicable, in order to make allowance for consequent additional diminution in value on considerations of age, condition and unexpired useful life of such Fixed Assets; to transfer to Revaluation Reserve the difference between the written up value of the Fixed Assets revalued and depreciation adjustment and to charge Revaluation Reserve Account with annual depreciation on that portion of the value which is written up. Investments
To state Current Investments at lower of cost and fair value; and Long Term Investments, including in Joint Ventures and Associates, at cost. Where applicable, provision is made where there is a permanent fall in valuation of Long Term Investments. Inventories
To state inventories including work-in-progress at cost or below. The cost is calculated on weighted average method. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and, where necessary, provision is made for such inventories. Sales
To state net sales after deducting taxes and duties from invoiced...
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