Independent Auditors’ Report

to the Members of ITC Limited

Report on the Standalone Financial Statements require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable
1. We have audited the accompanying standalone
financial statements of ITC LIMITED (“the Company”), assurance about whether the financial statements
which comprise the Balance Sheet as at are free from material misstatement.
31st March, 2015, the Statement of Profit and Loss 4. An audit involves performing procedures to obtain
and the Cash Flow Statement for the year then audit evidence about the amounts and the disclosures
ended, and a summary of the significant accounting in the financial statements. The procedures selected
policies and other explanatory information. depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of
Management’s Responsibility for the Standalone
the financial statements, whether due to fraud or
Financial Statements error. In making those risk assessments, the auditor
2. The Company’s Board of Directors is responsible considers internal financial control relevant to the
for matters stated in Section 134(5) of the Companies Company’s preparation of the financial statements
Act, 2013 ("the Act") with respect to the preparation that give a true and fair view in order to design audit
of these standalone financial statements that give a procedures that are appropriate in the circumstances,
true and fair view of the financial position, financial but not for the purpose of expressing an opinion on
performance and cash flows of the Company in whether the Company has in place an adequate
accordance with the accounting principles generally internal financial controls system over financial
accepted in India, including the Accounting Standards reporting and the operating effectiveness of such
specified under Section 133 of the Act, read controls. An audit also includes evaluating the
with Rule 7 of the Companies (Accounts) appropriateness of the accounting policies used and
Rules, 2014. This responsibility also includes the reasonableness of the accounting estimates
maintenance of adequate accounting records in made by the Company’s Directors, as well as
accordance with the provisions of the Act for evaluating the overall presentation of the financial
safeguarding the assets of the Company and for statements.
preventing and detecting frauds and other
5. We believe that the audit evidence we have obtained
irregularities; selection and application of appropriate
is sufficient and appropriate to provide a basis for
accounting policies; making judgments and estimates
our audit opinion on the standalone financial
that are reasonable and prudent; and design,
statements.
implementation and maintenance of adequate internal
financial controls, that were operating effectively for Opinion
ensuring the accuracy and completeness of the
6. In our opinion and to the best of our information and
accounting records, relevant to the preparation and
according to the explanations given to us, the
presentation of the financial statements that give a
aforesaid standalone financial statements give the
true and fair view and are free from material
information required by the Act in the manner so
misstatement, whether due to fraud or error.
required and give a true and fair view in conformity
Auditors’ Responsibility with the accounting principles generally accepted in
3. Our responsibility is to express an opinion on these India, of the state of affairs of the Company as at
standalone financial statements based on our audit. 31st March, 2015, and its profit and its cash flows
We have taken into account the provisions of the for the year ended on that date.
Act, the accounting and auditing standards and
Report on Other Legal and Regulatory
matters which are required to be included in the audit
Requirements
report under the provisions of the Act and the Rules
made thereunder. We conducted our audit in 7. As required by the Companies (Auditor’s Report)
accordance with the Standards on Auditing specified Order, 2015 (“the Order”) issued by the Central
under Section143 (10) of the Act. Those Standards Government in terms of Section 143(11) of the Act,

156 ITC Limited REPORT AND ACCOUNTS 2015

 Independent Auditors’ Report

we give in the Annexure a statement on the matters with Rule 11 of the Companies (Audit and
specified in paragraphs 3 and 4 of the Order. Auditors) Rules, 2014, in our opinion and to the
8. As required by Section 143(3) of the Act, we report best of our information and according to the
that: explanations given to us:

(a) We have sought and obtained all the information i. The Company has disclosed the impact of
and explanations which to the best of our pending litigations on its financial position
knowledge and belief were necessary for the in its financial statements in accordance
purposes of our audit. with the generally accepted accounting
practice – also refer Note 31(iv)(a)(i) to the
(b) In our opinion, proper books of account as
financial statements.
required by law have been kept by the Company
so far as it appears from our examination of ii. The Company did not have any long-term
those books. contracts including derivative contracts for
which there were any material foreseeable
(c) The Balance Sheet, the Statement of Profit and
losses.
Loss, and the Cash Flow Statement dealt with
by this Report are in agreement with the books iii. There has been no delay in transferring
of account. amounts, required to be transferred, to the
Investor Education and Protection Fund by
(d) In our opinion, the aforesaid standalone financial
the Company.
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 For Deloitte Haskins & Sells
disqualified as on 31st March, 2015 from being Chartered Accountants
appointed as a director in terms of Section 164(2) (Firm’s Registration No. 302009E)
of the Act. Shyamak R Tata
(f) With respect to the other matters to be Kolkata, Partner
included in the Auditor’s Report in accordance 22nd May, 2015 (Membership No. 38320)

ITC Limited REPORT AND ACCOUNTS 2015 157

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:

158 ITC Limited REPORT AND ACCOUNTS 2015

 Name of Nature of Amount Period to which Forum where pending
the statute the dues (` in Crores) the amount relates
Various years
covering the period

Sales Tax Sales tax 37.58 1987-2015 Appellate Authority –

and Value and VAT upto Commissioners’ /
Added Tax Revisional authorities level
Laws 18.36 1994-2014 Appellate Authority –
Tribunal level
221.83 2000-2011 High Court
Customs Customs 0.09 2010-2014 Appellate Authority –
Act, 1962 duty upto Commissioners’ /
Revisional authorities level
1.74 2005-2007 Appellate Authority –
Tribunal level
Central Excise duty 29.85 1996-2014 Appellate Authority –
Excise upto Commissioners’ /
Act, 1944 Revisional authorities level
88.23 1973-2014 Appellate Authority –
Tribunal level
4.10 2005-2010 High Court
Finance Act, Service tax 1.32 2006-2012 Appellate Authority –
1994 upto Commissioners’ /
Revisional authorities level
46.88 2004-2011 Appellate Authority –
Tribunal level
Income-tax Income-tax 89.61 2005-2011 Appellate Authority –
Act, 1961 upto Commissioners’ /
Revisional authorities level
26.61 1999-2007 Appellate Authority –
Tribunal level

Out of the total disputed dues aggregating ` 566.20 Crores as above, ` 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)

ITC Limited REPORT AND ACCOUNTS 2015 159