Mar 31, 2023
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of ITC Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the
Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
evaluation of performance. There is a risk of revenue being recorded before control is transferred. Refer Note 1 to the Standalone Ind AS Financial Statements - Significant Accounting Policies and Note 21A / 21B. |
1 Tested the effectiveness of such controls over revenue cut off at year-end. 1 On a sample basis, tested supporting documentation for sales transactions recorded during the year which included sales invoices, customer contracts and shipping documents. 1 Performed an increased level of substantive testing in respect of sales transactions recorded during the period closer to the year end and subsequent to the year end. 1 Compared revenue with historical trends and where appropriate, conducted further enquiries and testing. 1 Assessed disclosures in financial statements in respect of revenue, as specified in Ind AS 115. |
Impairment assessment of investment in WelcomHotels Lanka (Private) Limited (âWLPLâ), a wholly owned subsidiary |
|
WLPL is developing a mixed-use project in Colombo, Sri Lanka which includes a hotel and a residential apartment complex. At March 31, 2023, the carrying value of Company''s investment in WLPL is INR 2,775.41 crores. The Company''s investments in subsidiaries are assessed annually by management for potential indicators of impairment. In view of the deterioration in the macro-economic scenario in Sri Lanka, the Company has assessed the carrying value of investments basis evaluation of the recoverable value of the capital work in progress of the hotel (PPE) and inventory of the residential apartments being developed by WLPL. The said determination is based on assumptions, that by their nature imply the use of the management''s judgement, in particular with reference to forecast of future cash flows, selling price, balance cost to complete the project, selling costs, terminal value, long-term growth rates and discount rates applied to such forecasted cash flows. Considering the judgement required for estimating the cash flows and the assumptions used, this is considered as a key audit matter. Refer Note 1 - Significant Accounting Policies and Note 2 - Use of estimates and judgements to the Standalone Ind AS Financial Statements |
Our audit procedures included the following: 1 Evaluated the key judgements / assumptions underlying management''s assessment of potential indicators of impairment. 1 Obtained and read the projections / estimated selling price / future cashflows along with sensitivity analysis thereof of the underlying PPE and inventory at WLPL. 1 Discussed and obtained assessment of recoverable value of PPE and inventory from component auditor of WLPL. 1 Evaluated management''s methodology, assumptions and estimates used in these calculations. 1 Involved valuation specialist to review the appropriateness of methodology and key assumptions considered by management to determine discounted future cash flows. 1 Performed sensitivity analysis around impact on future cash flows due to changes in key assumptions considered by management. 1 Verified the arithmetical accuracy of the future cash flow model including comparison with approved budgets. 1 Assessed the recoverability of investment with regard to underlying value in use of PPE and net realisable value of inventory in WLPL. |
We have determined that there are no other key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31,2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 27(v)(a) to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. a) The management has represented that,
to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ)
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Act.
As stated in Note B of Statement of changes in equity to the standalone Ind AS financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.
Mar 31, 2022
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of ITC Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the
Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Revenue recognition |
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Revenue from the sale of goods (hereinafter referred to as âRevenueâ) is recognised when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such revenue recognition in case of sale of goods is when the control over the same is transferred to the customer, which is mainly upon delivery. The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for |
Our audit procedures included the following: 1 Assessed the Company''s revenue recognition accounting policies in line with Ind AS 115 (âRevenue from Contracts with Customersâ) and tested thereof. Evaluated the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls over recognition of revenue. Evaluated the design, implementation and operating effectiveness of Company''s controls in respect of revenue recognition. |
Key audit matters |
How our audit addressed the key audit matter |
evaluation of performance. There is a risk of revenue being recorded before control is transferred. Refer Note 1 to the Standalone Ind AS Financial Statements - Significant Accounting Policies and Note 21A / 21B. |
'' Tested the effectiveness of such controls over revenue cut off at year-end. '' On a sample basis, tested supporting documentation for sales transactions recorded during the year which included sales invoices, customer contracts and shipping documents. '' Performed an increased level of substantive testing in respect of sales transactions recorded during the period closer to the year end and subsequent to the year end. '' Compared revenue with historical trends and where appropriate, conducted further enquiries and testing. '' Assessed disclosures in financial statements in respect of revenue, as specified in Ind AS 115. |
Litigations - Contingencies |
|
The Company has ongoing litigations with various authorities and third parties which could have a significant impact on the results, if the potential exposures were to materialise. The amounts involved are significant, and the application of accounting standards to determine the amount, if any, to be provided as a liability or disclosed as a contingent liability, is inherently subjective. Claims against the Company not acknowledged as debts are disclosed in the Financial Statements by the Company after a careful evaluation of the facts and legal aspects of the matters involved. The outcome of such litigation is uncertain and the position taken by management involves significant judgment and estimation to determine the likelihood and / or timing of cash outflows and the interpretation of preliminary and pending court rulings. Refer Note 27(iv)(a) to the Standalone Ind AS Financial Statements. |
Our audit procedures included the following: '' Obtained and read the Company''s accounting policies in respect of claims, provisions and contingent liabilities to assess compliance with accounting standards. '' Assessed the design and implementation of the Company''s controls over the assessment of litigations and completeness of disclosures. Supporting documentation were tested for the positions taken by the management, meetings conducted with in-house legal counsel and / or legal team and minutes of Board and sub-committee meetings were reviewed, to test the operating effectiveness of these controls. 1 Involved our tax specialists to assess relevant historical and recent judgements passed by the appropriate authorities in order to challenge the basis used for the accounting treatment and resulting disclosures. '' Additionally, considered the effect of new information in respect of contingencies as at April 1, 2021 to evaluate whether any change was required in the management''s position on these contingencies as at March 31, 2022. '' Assessed in accordance with accounting standards, the provisions in respect of litigations and assessed disclosures relating thereto, including those for contingencies. |
Key audit matters |
How our audit addressed the key audit matter |
Impairment assessment of investment in WelcomHotels Lanka (Private) Limited (âWLPLâ), a wholly owned subsidiary |
|
WLPL is developing a mixed-use project in Colombo, Sri Lanka which includes a hotel and a residential apartment complex. At March 31, 2022, the carrying value of Company''s investment in WLPL is '' 2,169.27 Crores. The Company''s investments in subsidiaries are assessed annually by management for potential indicators of impairment. In view of the recent deterioration in the macro-economic scenario in Sri Lanka, the Company has assessed the carrying value of investments basis evaluation of the recoverable value of the capital work in progress of the hotel (PPE) and inventory of the residential apartments being developed by WLPL. The said determination is based on assumptions, that by their nature imply the use of the management''s judgment, in particular with reference to forecast of future cash flows, selling price, balance cost to complete the project, selling costs, terminal value, long-term growth rates and discount rates applied to such forecasted cash flows. Considering the judgment required for estimating the cash flows and the assumptions used, this is considered as a key audit matter. Refer Note 1 - Significant Accounting Policies and Note 2 - Use of estimates and judgements to the Standalone Ind AS Financial Statements. |
Our audit procedures included the following: 1 Evaluated the key judgements / assumptions underlying management''s assessment of potential indicators of impairment. 1 Obtained and read the projections / estimated selling price / future cashflows along with sensitivity analysis thereof of the underlying PPE and inventory at WLPL. 1 Discussed and obtained assessment of recoverable value of PPE and inventory from component auditor of WLPL. 1 Evaluated management''s methodology, assumptions and estimates used in these calculations. 1 Involved valuation specialist to review the appropriateness of methodology and key assumptions considered by management to determine discounted future cash flows. 1 Performed sensitivity analysis around impact on future cash flows due to changes in key assumptions considered by management. 1 Verified the arithmetical accuracy of the future cash flow model including comparison with approved budgets. 1 Assessed the recoverability of investment with regard to underlying value in use of PPE and net realisable value of inventory in WLPL. |
We have determined that there are no other key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements
that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31,2022 has been paid / provided by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 27(iv)(a) to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. a) The management has represented that, to
the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities (âIntermediariesâ),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Act.
As stated in Note B of Statement of changes in equity to the standalone Ind AS financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
Mar 31, 2021
Opinion
We have audited the accompanying standalone Ind AS financial statements of ITC Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss, including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the
Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2021. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
Auditorâs Response |
Revenue recognition |
|
Revenue from the sale of goods (hereinafter referred to as âRevenueâ) is recognised when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such revenue recognition incaseof saleof goodsiswhenthe control over the same is transferred to the customer, which is mainly upon delivery. The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of |
Our audit procedures included the following: 1 Assessed the Company''s revenue recognition accounting policies in line with Ind AS 115 (âRevenue from Contracts with Customersâ) and tested thereof. Evaluated the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls over recognition of revenue. Evaluated the design, implementation and operating effectiveness of Company''s controls in respect of revenue recognition. |
Key audit matters |
Auditorâs Response |
performance. There is a risk of revenue being recorded before control is transferred. Refer Note 1 to the Standalone Ind AS Financial Statements - Significant Accounting Policies and Note 21A / 21B. |
1 Tested the effectiveness of such controls over revenue cut off at year-end. 1 On a sample basis, tested supporting documentation for sales transactions recorded during the year which included sales invoices, customer contracts and shipping documents. 1 Performed an increased level of substantive testing in respect of sales transactions recorded during the period closer to the year end and subsequent to the year end. 1 Compared revenue with historical trends and where appropriate, conducted further enquiries and testing. 1 Assessed disclosures in financial statements in respect of revenue, as specified in Ind AS 115. |
Litigations - Contingencies |
|
The Company has ongoing litigations with various authorities and third parties which could have a significant impact on the results, if the potential exposures were to materialise. The amounts involved are significant, and the application of accounting standards to determine the amount, if any, to be provided as a liability or disclosed as a contingent liability, is inherently subjective. Claims against the Company not acknowledged as debts are disclosed in the Financial Statements by the Company after a careful evaluation of the facts and legal aspects of the matters involved. The outcome of such litigation is uncertain and the position taken by management involves significant judgment and estimation to determine the likelihood and / or timing of cash outflows and the interpretation of preliminary and pending court rulings. Refer Note 27(iv)(a) to the Standalone Ind AS Financial Statements. |
Our audit procedures included the following: '' Obtained and read the Company''s accounting policies in respect of claims, provisions and contingent liabilities to assess compliance with accounting standards. '' Assessed the design and implementation of the Company''s controls over the assessment of litigations and completeness of disclosures. Supporting documentation were tested for the positions taken by the management, meetings conducted with in-house legal counsel and / or legal team and minutes of Board and sub-committee meetings were reviewed, to test the operating effectiveness of these controls. 1 Involved our tax specialists to assess relevant historical and recent judgements passed by the appropriate authorities in order to challenge the basis used for the accounting treatment and resulting disclosures. '' Additionally, considered the effect of new information in respect of contingencies as at April 1, 2020 to evaluate whether any change was required in the management''s position on these contingencies as at March 31, 2021. 1 Assessed in accordance with accounting standards, the provisions in respect of litigations and assessed disclosures relating thereto, including those for contingencies. |
Key audit matters |
Auditorâs Response |
Acquisition of Sunrise Foods Private Limited and its two wholly owned subsidiaries |
|
The Company acquired 100% of the equity share capital of Sunrise Foods Private Limited (''SFPL'') and its two wholly owned subsidiaries, Hobbits International Foods Private Limited and Sunrise Sheetgrah Private Limited on July 27, 2020 for a purchase consideration of Rs. 2,340 Crores. Subsequently, SFPL merged with the Company during the year w.e.f. July 27, 2020. The purchase consideration was allocated to the fair value of identifiable assets acquired and liabilities assumed, resulting in the recognition of goodwill of Rs. 577 Crores as on the date of acquisition. Considering the involvement of significant judgements and assumptions in fair value measurements and purchase price allocations including the magnitude of the acquisition made, this is considered as a key audit matter. Refer Note 27(ix) to the Standalone Ind AS Financial Statements. |
Our audit procedures included the following: 1 Read the share purchase agreement, the scheme approved by the National Company Law Tribunal and other related documents to obtain an understanding of the transactions and the key terms and conditions. 1 Assessed whether the accounting treatment is in accordance with Ind AS 103. 1 Obtained and read the valuation reports for Purchase price allocation from independent valuer. Engaged our specialist and evaluated the appropriateness of methodology, key assumptions such as discount and long-term growth rate, risk free rate of return and weighted average cost of capital considered in determining the valuation of intangible assets, including resultant Goodwill. 1 Tested the valuation for arithmetical accuracy. 1 Assessed the competence, capabilities and relevant experience of the experts engaged by the management to determine fair valuation of assets and liabilities acquired. 1 Assessed disclosures in financial statements in respect to acquisition in accordance with the accounting standards. |
We have determined that there are no other key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
1 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
1 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
i Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
i Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone
(Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
Ind AS financial statements for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements -Refer Note 27 (iv)(a) to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
per Sudhir Soni Partner
Annexure 1 referred to in paragraph 1 under the heading âReport on Other legal and Regulatory Requirementsâ of our report of even date
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of
property, plant and equipment.
(b) The property, plant and equipment 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 property, plant and equipment at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management and audit procedures performed by us, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification. Inventories lying with third parties have substantially been confirmed by them as at year end and no material discrepancies were noticed in respect of such confirmations.
(iii) According to the information and explanations given to us and audit procedures performed by us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year within the meaning of Sections 73 and 76 of the Companies Act, 2013. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 74 and 75 or any other relevant provisions of the Companies Act, 2013. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of specified products of the Company and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident
fund, employees'' state insurance, income-tax, duty of custom, duty of excise, goods and services tax, cess and other statutory dues applicable to it. The Goods and Services Tax of Rs. 550.22 crores payable for the month of April 2020 has been paid subsequent to due date without any interest in accordance with Notification Nos. 31/ 2020 and 32 / 2020 dated 03.04.2020 issued by the Government of India, Ministry of Revenue (Department of Revenue), Central Board of Indirect Taxes and Customs.
(b) According to the information and explanations given to us and audit procedures performed by us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, duty of custom, duty of excise, goods and services tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount C in crores)* |
Period to which the amount relates (Financial Year) |
Forum where dispute is pending |
Sales Tax and Value Added Tax |
Sales tax & VAT |
64.22 |
1987-2019 |
Appellate Authority-upto Commissioners''/ Revisional authorities level |
Laws |
19.81 |
1994-2017 |
Appellate Authority -Tribunal level |
|
190.69 |
1997-2016 |
High Court |
||
Customs Act, 1962 |
Customs Duty |
0.70 |
2011-2016 |
Appellate Authority -upto Commissioners''/ Revisional authorities level |
47.88 |
2005-2019 |
Appellate Authority -Tribunal level |
||
Central Excise Act, 1944 |
Excise duty |
0.47 |
1996-2017 |
Appellate Authority -upto Commissioners''/ Revisional authorities level |
95.89 |
1973-2017 |
Appellate Authority -Tribunal level |
||
8.88 |
2005-2009 |
High Court |
||
Finance Act,1994 |
Service tax |
10.60 |
2006-2017 |
Appellate Authority -upto Commissioners''/ Revisional authorities level |
67.87 |
2003-2016 |
Appellate Authority -Tribunal level |
Out of the total disputed dues aggregating '' 507.01 Crores as above, '' 390.06 Crores pertain to matters which have been stayed for recovery by the relevant authorities.
* Net of amount paid under protest
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to a financial institution, bank or government or dues to debenture holders.
(ix) According to the information and explanations given by the management and audit procedures performed by us, the Company has not raised any money by way of initial public offer / further public offer / debt instruments and term loans. Therefore, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management and audit procedures performed by us,
the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management and audit procedures performed by us,
transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where
applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management and audit procedures performed by us, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
per Sudhir Soni Partner
We have audited the internal financial controls with reference to standalone financial statements of ITC Limited (âthe Companyâ) as of March 31,2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls with reference to these standalone financial statements.
A company''s internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls with reference
to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2021, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
per Sudhir Soni Partner
Place of Signature: Mumbai Membership Number: 41870
Date: June 01, 2021 UDIN: 21041870AAAAAY6504
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of ITC LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2019, and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditorâs Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditorâs Response |
1. |
Revenue Recognition Revenue from the sale of goods (hereinafter referred to as âRevenueâ) is recognised when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer, which is mainly upon delivery. The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred. Refer Note 1 to the Standalone Financial Statements - Significant Accounting Policies |
Principal Audit Procedures Our audit approach was a combination of test of internal controls and substantive procedures including: - Assessing the appropriateness of the Companyâs revenue recognition accounting policies in line with Ind AS 115 (âRevenue from Contracts with Customersâ) and testing thereof. - Evaluating the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls. - Evaluating the design and implementation of Companyâs controls in respect of revenue recognition. - Testing the effectiveness of such controls over revenue cut off at year-end. - Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end, including |
examination of credit notes issued after the year end to determine whether revenue was recognised in the correct period. |
||
- Performing analytical procedures on current year revenue based on monthly trends and where appropriate, conducting further enquiries and testing. |
||
2. |
Litigations - Contingencies |
Principal Audit Procedures |
The Company has ongoing litigations with various authorities and third parties which could have a significant impact on the results, if the potential exposures were to materialise. The amounts involved are significant, and the application of accounting standards to determine the amount, if any, to be provided as a liability or disclosed as a contingent liability, is inherently subjective. Claims against the Company not acknowledged as debts are disclosed in the Financial Statements by the Company after a careful evaluation of the facts and legal aspects of the matters involved. The outcome of such litigation is uncertain and the position taken by management involves significant judgment and estimation to determine the likelihood and/or timing of cash outflows and the interpretation of preliminary and pending court rulings. Refer Note 27 (v) (a) to the Standalone Financial Statements |
Our audit approach was a combination of test of internal controls and substantive procedures including: - Assessing the appropriateness of the design and implementation of the Companyâs controls over the assessment of litigations and completeness of disclosures. Supporting documentation are tested for the positions taken by the management, meetings are conducted with in-house legal counsel and/or legal team and minutes of Board and sub-committee meetings are reviewed, to confirm the operating effectiveness of these controls. - Involving our direct and indirect tax specialists to assess relevant historical and recent judgements passed by the appropriate authorities in order to challenge the basis used for the accounting treatment and resulting disclosures. - Additionally, considering the effect of new information in respect of contingencies as at 1st April, 2018 to evaluate whether any change was required in the managementâs position on these contingencies as at 31st March, 2019. |
Information Other than the Financial Statements and Auditorâs Report Thereon
- The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Report on Corporate Governance, Shareholder information and Report of the Board of Directors & Management Discussion and Analysis, but does not include the consolidated financial statements, standalone financial statements and our auditorâs report thereon.
- Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
- In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
- We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Financial Statements
- The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by section 143(3) of the Act, based on our audit we report that:
(a) we have sought and 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 including Other Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
(e) on the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164(2) of the Act.
(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. In respect of one director, aggregate remuneration of Rs. 1.17 Crores paid/provided during the year, is subject to the approval of the Members at the forthcoming Annual General Meeting.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements in accordance with the generally accepted accounting practice - also refer Note 27 (v) (a) to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Annexure - A to the Independent Auditorâs Report
(Referred to in paragraph 1 (f) under âReport on Other Legal and Regulatory Requirementsâ section of our report to the Members of ITC Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of ITC Limited (âthe Companyâ) as of 31st March, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2019, based on the criteria for internal control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Annexure - B to the Independent Auditorâs Report
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
(b) The property, plant and equipment 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 property, plant and equipment at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) With respect to immovable properties of acquired land and buildings that are freehold, according to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed/transfer deed/conveyance deed/court orders approving schemes of arrangements/amalgamations and other documents provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date.
(ii) 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 and no material discrepancies were noticed on such physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and accordingly the question of complying with Sections 73 and 76 of the Companies Act, 2013 does not arise. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 74 and 75 or any other relevant provisions of the Companies Act, 2013. 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.
(vi) The maintenance of cost records has been prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 in respect of specified products of the Company. For such products, we have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income-tax, Goods and Services Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31st March, 2019 on account of disputes are given below:
Name of statute |
Nature of dues |
Amount (Rs. in Crores) |
Period to which the amount relates |
Forum where dispute is pending |
Various years covering the period |
||||
Sales Tax and Value Added Tax |
Sales tax and VAT |
23.44 |
1987-2017 |
Appellate Authority -upto Commissionersâ/ Revisional authorities level |
Laws |
19.88 |
1994-2015 |
Appellate Authority -Tribunal level |
|
252.47 |
2005-2015 |
High Court |
||
Customs Act, 1962 |
Customs duty |
3.60 |
2011-2017 |
Appellate Authority -upto Commissionersâ/ Revisional authorities level |
0.36 |
2016 |
Appellate Authority -Tribunal level |
||
40.70 |
2011-2012 |
High Court |
||
Central Excise Act, 1944 |
Excise duty |
8.74 |
1996-2017 |
Appellate Authority -upto Commissionersâ/ Revisional authorities level |
95.63 |
1973-2017 |
Appellate Authority -Tribunal level |
||
4.34 |
2005-2010 |
High Court |
||
Finance Act, 1994 |
Service tax |
6.05 |
2006-2017 |
Appellate Authority -upto Commissionersâ/ Revisional authorities level |
63.11 |
2003-2015 |
Appellate Authority -Tribunal level |
Out of the total disputed dues aggregating Rs. 518.32 Crores as above, Rs. 374.86 Crores pertain to matters which have been stayed for recovery by the relevant authorities.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013. In respect of one director, aggregate remuneration of Rs. 1.17 Crores paid/provided during the year, is subject to the approval of the Members at the forthcoming Annual General Meeting.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements etc. as required by the applicable Indian accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Deloitte Haskins & Sells
Chartered Accountants
(Firmâs Registration No. 302009E)
P. R. Ramesh
Gurugram Partner
13th May, 2019 (Membership No. 70928)
Mar 31, 2018
1. We have audited the accompanying standalone financial statements of ITC LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone
Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order issued under section 143(11) of the Act.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone 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 standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
5. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
7. As required by section 143(3) of the Act, based on our audit we report that:
(a) we have sought and 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 including Other Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
(e) on the basis of the written representations received from the directors of the Company as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements in accordance with the generally accepted accounting practice - also refer Note 27 (vi)
(a) (i) to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
8. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 7 (f) under âReport on Other Legal and Regulatory Requirementsâ section of our report to the Members of ITC Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of ITC Limited (âthe Companyâ) as of 31st March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018, based on the criteria for internal control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
(b) The property, plant and equipment 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 property, plant and equipment at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) With respect to immovable properties of acquired land and buildings that are freehold, according to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed / court orders approving schemes of arrangements/amalgamations and other documents provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date.
(ii) 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 and no material discrepancies were noticed on such physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and accordingly the question of complying with Sections 73 and 76 of the Companies Act, 2013 does not arise. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 74 and 75 or any other relevant provisions of the Companies Act, 2013. 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.
(vi) The maintenance of cost records has been prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 in respect of specified products of the Company. For such products, we have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income-tax, Goods and Service Tax, Sales tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31st March, 2018 on account of disputes are given below:
Name of statute |
Nature of dues |
Amount (Rs, in Crores) |
Period to which the amount relates |
Forum where dispute is pending |
Various years covering the period |
||||
Sales Tax and Value Added Tax |
Sales tax and VAT |
71.97 |
1987-2017 |
Appellate Authority -upto Commissionersâ/ Revisional authorities level |
Laws |
13.14 |
1994-2015 |
Appellate Authority -Tribunal level |
|
259.99 |
2005-2015 |
High Court |
||
Customs Act, 1962 |
Customs duty |
0.15 |
2010-2016 |
Appellate Authority -upto Commissionersâ/ Revisional authorities level |
0.56 |
2005-2007 |
Appellate Authority -Tribunal level |
||
Central Excise Act, 1944 |
Excise duty |
9.49 |
1996-2016 |
Appellate Authority -upto Commissionersâ/ Revisional authorities level |
101.22 |
1973-2016 |
Appellate Authority -Tribunal level |
||
4.14 |
2005-2010 |
High Court |
||
Finance Act, 1994 |
Service tax |
6.43 |
2010-2016 |
Appellate Authority -up to Commissionersâ/ Provisional authorities level |
60.95 |
2003-2015 |
Appellate Authority -Tribunal level |
Out of the total disputed dues aggregating Rs, 528.04 Crores as above, Rs, 406.83 Crores pertain to matters which have been stayed for recovery by the relevant authorities.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements etc. as required by the applicable Indian accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Deloitte Haskins & Sells
Chartered Accountants
(Firmâs Registration No. 302009E)
P. R. Ramesh
Gurugram Partner
16th May, 2018 (Membership No. 70928)
Mar 31, 2017
Report on the Standalone Financial Statements
Independent Auditorâs Report to the Members of ITC Limited
1. We have audited the accompanying standalone Ind AS financial statements of ITC LIMITED ("the Companyâ), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS 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 standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
5. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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, of the state of affairs of the Company as at 31st March, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by Section 143(3) of the Act, based on our audit we report, to the extent applicable that:
(a) We have sought and 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 including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements in accordance with the generally accepted accounting practice - also refer Note 27 (v)
(a) (i) to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. Also refer Note - 27 (viii) to the standalone Ind AS financial statements.
8. As required by the Companies (Auditorâs Report) Order, 2016 ("the Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of ITC Limited ("the Companyâ) as of 31st March, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
(b) The property, plant and equipment 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 property, plant and equipment at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) With respect to immovable properties of acquired land and buildings that are freehold, according to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed / court orders approving schemes of arrangements/amalgamations provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date.
(ii) 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 and no material discrepancies were noticed on such physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and accordingly the question of complying with Sections 73 and 76 of the Companies Act, 2013 does not arise. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 74 and 75 or any other relevant provisions of the Companies Act, 2013. 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.
(vi) The maintenance of cost records has been prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 in respect of specified products of the Company. For such products, we have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income-tax, Sales tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31st March, 2017 on account of disputes are given below:
Name of statute |
Nature of dues |
Amount (Rs, in Crores) |
Period to which the amount relates |
Forum where dispute is pending |
Various years covering the period |
||||
Sales Tax and Value Added Tax |
Sales tax and VAT |
78.96 |
1987-2017 |
Appellate Authority -up to Commissionersâ/ Provisional authorities level |
Laws |
26.30 |
1994-2015 |
Appellate Authority -Tribunal level |
|
231.25 |
2005-2015 |
High Court |
||
Customs Act, 1962 |
Customs duty |
0.12 |
2010-2016 |
Appellate Authority -up to Commissionersâ/ Provisional authorities level |
0.55 |
2005-2007 |
Appellate Authority -Tribunal level |
||
Central Excise Act, 1944 |
Excise duty |
45.56 |
1996-2015 |
Appellate Authority -up to Commissionersâ/ Provisional authorities level |
55.44 |
1973-2015 |
Appellate Authority -Tribunal level |
||
3.94 |
2005-2010 |
High Court |
||
Finance Act, 1994 |
Service tax |
5.96 |
2010-2016 |
Appellate Authority -up to Commissionersâ/ Provisional authorities level |
56.70 |
2003-2014 |
Appellate Authority -Tribunal level |
Out of the total disputed dues aggregating '' 504.78 Crores as above, '' 406.79 Crores pertain to matters which have been stayed for recovery by the relevant authorities.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013. In respect of two directors, aggregate remuneration of '' 4.10 Crores paid/provided during the year, is subject to the approval of the Members at the forthcoming Annual General Meeting.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the Standalone Ind AS financial statements etc. as required by the applicable Indian accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or person connected with them and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Deloitte Haskins & Sells
Chartered Accountants
(Firmâs Registration No. 302009E)
P. R. Ramesh
Kolkata Partner
26th May, 2017 (Membership No. 70928)
Mar 31, 2015
1. We have audited the accompanying standalone financial statements of
ITC LIMITED ("the Company"), which comprise the Balance Sheet as at
31st March, 2015, 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.
Management's Responsibility for the Standalone Financial Statements
2. The Company's Board of Directors is responsible for matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone 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 principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, 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 standalone
financial statements based on our audit. We have taken into account
the provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
Section143 (10) of the Act. 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 auditor's judgment, 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 financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, 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 on the
standalone financial statements.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone 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, of the state of
affairs of the Company as at 31st March, 2015, and its profit and its
cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act,
we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order.
8. As required by Section 143(3) of the Act, we report that:
(a) We have sought and 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 aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements in accordance with the
generally accepted accounting practice  also refer Note 31(iv)(a)(i)
to the financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
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)
(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.
(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 not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the Register maintained
under Section 189 of the Companies Act, 2013.
(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) According to the information and explanations given to us, the
Company has not accepted any deposit during the year and accordingly
the question of complying with section 73 and 76 of the Companies Act
2013 does not arise. In respect of unclaimed deposits, the Company has
complied with the provisions of Sections 74 and 75 or any other
relevant provisions of the Companies Act. 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.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended and prescribed by the Central Government under sub-section
(1) of Section 148 of the Companies Act, 2013, and are of the opinion
that, prima facie, the prescribed cost records have been made and
maintained. We have, however, not made a detailed examination of the
cost records with a view to determine whether they are accurate or
complete.
(vii) 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, Employees' State Insurance, Income-tax, Sales
tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added
Tax, Cess and other material statutory dues as applicable with the
appropriate authorities.
(b) As at 31st March, 2015, the following are the particulars of dues
on account of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Value Added Tax and Cess matters that have not been
deposited on account of any dispute:
Name of Nature of Amount
the statute the dues (Rs. in Crores)
Sales Tax Sales tax 37.58
and Value and VAT
Added Tax
Laws 18.36
221.83
Customs Customs 0.09
Act, 1962 duty
1.74
Central Excise duty 29.85
Excise
Act, 1944
88.23
4.10
Finance Act, Service tax 1.32
1994
46.88
Income-tax Income-tax 89.61
Act, 1961
26.61
Name of
the statute Period to which Forum where pending
the amount relates
Various years
covering the period
Sales Tax
and Value
Added Tax
Laws 1987-2015 Appellate Authority -
upto Commissioners'/
Revisional
authorities level
1994-2014 Appellate Authority -
Tribunal level
2000-2011 High Court
Customs
Act, 1962 2010-2014 Appellate Authority -
upto Commissioners'/
Revisional
authorities level
2005-2007 Appellate Authority -
Tribunal level
1996-2014 Appellate Authority -
Central
Excise
Act, 1944 upto Commissioners'/
Revisional authorities
level
1973-2014 Appellate Authority -
Tribunal level
2005-2010 High Court
Finance Act,
1994 2006-2012 Appellate Authority -
upto Commissioners'/
Revisional authorities
level
2004-2011 Appellate Authority -
Tribunal level
Income-tax
Act, 1961 2005-2011 Appellate Authority -
upto Commissioners'/
Revisional authori
-ties level
1999-2007 Appellate Authority -
Tribunal level
Out of the total disputed dues aggregating Rs. 566.20 Crores as above, Rs.
355.67 Crores has been stayed for recovery by the relevant authorities.
(c) The Company has been regular in transferring amounts to the
Investor Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and Rules made
thereunder within time.
(viii) 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.
(ix) 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.
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks and financial institutions
are not, prima facie, prejudicial to the interests of the Company.
(xi) 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.
(xii) 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
(Firm's Registration No. 302009E)
Shyamak R Tata
Kolkata Partner
22nd May, 2015 (Membership No. 38320)
Mar 31, 2014
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.
Management''s Responsibility for the Financial Statements
2. The Company''s 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 auditor''s 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
Company''s 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 Company''s 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.
Opinion
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:
(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 (Auditor''s 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.
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 Company''s 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:
Name of Nature of Amount Period to which
the statute the dues (Rs.in the amount
Crores) relates
Various years
covering the period
Sales Tax Sales tax 8.28 1987-2013
and VAT and VAT
Laws
8.66 1994-2014
162.34 2000-2008
Customs Customs 0.01 2010-2011
Act, 1962 duty
1.50 2005-2007
Central Excise duty 10.66 1996-2014
Excise
Act, 1944
61.82 1973-2013
1.43 2005-2010
0.31 1991-1996
Finance Act, Service tax 3.78 2004-2012
1994
15.26 2005-2011
Income Income tax 93.62 1999-2006
Tax Act,
1961
Name of the Statue Forum where pending
Sales Tax
and VAT
Laws Appellate Authority -
upto Commissioners''/
Revisional authorities level
Appellate Authority -
Tribunal level
High Court
Customs
Act, 1962 Appellate Authority -
upto Commissioners''/
Revisional authorities level
Appellate Authority -
Tribunal level
Central
Excise
Act, 1944 Appellate Authority -
upto Commissioners''/
Revisional authorities level
Appellate Authority -
Tribunal level
High Court
Supreme Court
Finance Act,
1994 Appellate Authority -
upto Commissioners''/
Revisional authorities level
Appellate Authority -
Tribunal level
Income
Tax Act,
1961 Appellate Authority -
upto Commissioners''/
Revisional authorities level
Out of the total disputed dues aggregating Rs. 367.67 Crores as above, Rs.
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
(Firm''s Registration No. 302009E)
P. R. Ramesh
New Delhi Partner
23rd May, 2014 (Membership No. 70928)
Mar 31, 2013
1. We have audited the accompanying financial statements of ITC
LIMITED ("the Company"), which comprise the Balance Sheet as at 31st
March, 2013, 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.
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 referred to in Section
211(3C) of the Companies Act, 1956 ("the Act") 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. 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.
Opinion
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
(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
referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31st March, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2013
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
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 (v), (x), (xii), (xiii), (xv), (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) 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.
(vi) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
(vii) 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.
(viii) 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, 2013, 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:
Name of Nature of Amount Period to
which Forum where pending
the
statute the dues (Rs. in the amount
Crores) relates
Various
years
covering
the period
Sales Tax Sales tax 104.02 1987-2013 Appellate Authority-
and VAT and VAT upto Commissioners/
Laws Revisional authorities
level
5.29 1994-2007 Appellate Authority-
Tribunal level
165.83 1994-2008 High Court
Customs Customs 0.05 2008-2010 Appellate Authority-
Act, 1962 duty upto Commissioners/
Revisional authorities
level
1.50 2005-2007 Appellate Authority-
Tribunal level
Central Excise duty 9.70 1996-2012 Appellate Authority-
Excise upto Commissioners/
Act, 1944 Revisional authorities
level
86.00 1973-2012 Appellate Authority-
Tribunal level
1.43 2005-2010 High Court
0.31 1991-1996 Supreme Court
Finance
Act, Service tax 3.28 2004-2012 Appellate Authority-
1994 upto Commissioners/
Revisional authorities
level
24.54 2005-2011 Appellate Authority-
Tribunal level
Income Income tax 1.34 1990-2006 Appellate Authority-
Tax Act, upto Commissioners/
1961 Revisional authorities
level
Out of the total disputed dues aggregating Rs. 403.29 Crores as above,
Rs. 306.82 Crores has been stayed for recovery by the relevant
authorities.
(ix) 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.
(x) 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.
(xi) 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.
(xii) 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.
(xiii) 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
(Firm Registration No. 302009E)
P. R. Ramesh
Kolkata Partner
17th May, 2013 (Membership No. 70928)
Mar 31, 2012
1. We have audited the attached Balance Sheet of ITC Limited ("the
Company") as at 31st March, 2012, and also the Statement of Profit
and Loss and the Cash Flow Statement of the Company for the year ended
on that date, both annexed thereto. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003
(CARO) issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956, we give in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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 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 dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
In our opinion and according to the information and explanations given
to us, the nature of the Company's business/activities during the
year are such that clauses (iii), (v), (x), (xii), (xiii), (xv),
(xviii), (xix) and (xx) of Companies (Auditor's Report) Order, 2003,
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 excepting 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) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material in relation to the
operations of the Company.
(iii) 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, fixed assets and for the sale of goods and
services. Further, on the basis of our examination and according to the
information and explanations given to us, we have neither come across
nor have we been informed of any instance of major weaknesses in the
aforesaid internal control systems.
(iv) 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.
(v) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
(vi) We have broadly reviewed the cost records maintained by the
Company, including pursuant to the Companies (Cost Accounting Records)
Rules, 2011 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.
(vii) (a) 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, 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, 2012, according to the records of the Company and
the information and explanations given to us, 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 :
Name of Nature of Amount Period to which Forum where pending
the statute the dues (Rs in the amount
Crores) relates
Various years
covering the
period
Sales Tax Sales tax 5.50 1987-2011 Appellate Authority
and VAT and VAT upto
Commissioners'/
Laws Revisional
authorities level
5.25 1994-2007 Appellate
Authority -
Tribunal level
171.67 1994-2008 High Court
Customs Customs 0.22 2005-2007 Appellate
Authority -
Act, 1962 duty upto
Commissioners'/
Revisional
authorities level
1.28 2005-2006 Appellate
Authority -
Tribunal level
Central Excise duty 0.48 2001-2010 Appellate
Authority -
Excise upto
Commissioners'/
Act, 1944 Revisional
authorities level
37.84 1973-2011 Appellate
Authority -
Tribunal level
0.31 1991-1996 Supreme Court
Finance
Act, Service tax 1.99 2003-2011 Appellate
Authority -
1994 upto
Commissioners'/
Revisional
authorities level
8.35 2005-2011 Appellate
Authority -
Tribunal level
1.43 2005-2008 High Court
Out of the total disputed dues aggregating Rs 234.32 Crores as above, Rs
193.67 Crores has been stayed for recovery by the relevant authorities.
(viii) 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.
(ix) 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.
(x) 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.
(xi) 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.
(xii) 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
(Registration No. 302009E)
P. R. Ramesh
Kolkata Partner
25th May, 2012 (Membership No. 70928)
Mar 31, 2011
1. We have audited the attached Balance Sheet of ITC Limited ("the
Company") as at 31st March, 2011, and also the Profit and Loss Account
and the Cash Flow Statement of the Company for the year ended on that
date, both annexed thereto. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (CARO)
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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 appears from our examination of
those books;
(c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in compliance with the
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st March, 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2011 from being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
Annexure to the Auditors Report to the Members of ITC Limited
[Referred to in paragraph (3) thereof]
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 (iii), (v), (x), (xii), (xiii), (xv), (xviii),
(xix) and (xx) of Companies (Auditors Report) Order 2003, 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
explanation 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 excepting 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) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material in relation to the
operations of the Company.
(iii) 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, fixed assets and for the sale of goods and
services. Further, on the basis of our examination and according to the
information and explanations given to us, we have neither come across
nor have we been informed of any instance of major weaknesses in the
aforesaid internal control systems.
(iv) 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.
(v) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
(vi) To the best of our knowledge, the Central Government has not
prescribed the maintenance of cost records under Section 209 (1) (d) of
the Companies Act, 1956, for any of the products of the Company
excepting paper,
soaps & detergents, cosmetics & toiletries, for which, in our opinion,
prima facie, the prescribed accounts and records have been maintained
and are being made up. We are not required to and accordingly, have not
made a detailed examination of the records.
(vii) (a) 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, 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, 2011, according to the records of the Company and
the information and explanations given to us, 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 :
Name of Nature of Amount Period to which
the statute the dues (Rs. in the amount
Crores) relates
Various years
covering the period
Sales Tax Sales tax 7.52 1987-2010
and VAT and VAT
Laws
5.68 1994-2010
174.50 1997-2008
Customs Customs 0.22 2005-2006
Act, 1962 duty
1.27 2005-2007
Central Excise duty 13.68 1980-2010
Excise
Act, 1944
25.65 1973-2010
0.47 1991-1996
Finance Act, Service tax 2.65 2002-2010
1994
172.96 2003-2009
0.08 2007-2008
Income Tax Income 2.85 1999-2006
Act, 1961 tax
Name of the statute Forum where pending
Sales Tax and VAT Laws Appellate Authority upto
commisioners/ Revisional
authorities level
Appellate Authority Tribunal
level High Court
Customs Act, 1962 Appellate Authority - upto
Commissioners/ Revisional
authorities level
Appellate Authority Tribunal
Level
Central Excise Act, 1944 Appellate Authority upto
Commissioners/ Revisional
authorities level
Appellate Authority - Tribunal
level
Supreme Court
Finance Act, 1994 Appellate Authority - upto
Commissioners/ Revisional
authorities level
Appellate Authority - Tribunal level
High Court
Income Tax Act, 1961 Appellate Authoity - upto
Commissioners/ Revisional authorities
level
Out of the total disputed dues aggregating Rs. 407.53 Crores as above,
Rs. 374.07 Crores has been stayed for recovery by the relevant
authorities.
(viii) 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.
(ix) 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.
(x) 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.
(xi) 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.
(xii) 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
(Registration No. 302009E)
P. R. Ramesh
Partner
(Membership No. 70928)
Kolkata
May 20, 2011
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