ITC Limited is an Indian conglomerate company headquartered in Kolkata, West Bengal, India. Some key points: - ITC was incorporated in 1910 as Imperial Tobacco Company of India. It has since diversified into several businesses including hotels, paper, packaging, agri-business and information technology. - The company has various subsidiary companies across its different business divisions such as ITC Infotech, ITC Welcomegroup Hotels, Classmate stationery and Bingo snacks. - Y.C. Deveshwar was the long-serving Chairman of ITC until 2017. The board of directors includes both executive and non-executive members. - ITC utilizes

2. INTRODUCTION OF COMPANY
• ITC was incorporated on August 24, 1910 under the name
Imperial Tobacco Company of India Limited.
• In recognition of the Company's multi-business portfolio
encompassing a wide range of businesses - Cigarettes &
Tobacco, Hotels, Information
Technology, Packaging, Paperboards & Specialty Papers, Agri-
business, Foods, Lifestyle Retailing, Education & Stationery
and Personal Care - the full stops in the Company's name
were removed effective September 18, 2001.
• The Company now stands rechristened 'ITC Limited'.

3. India Tobacco Company Limited Subsidiary companies:
in was established on 1910 • Packaging and printing business
• Itc-welcomed group of hotel
Plant location • Papercraft business
• The Company's headquarter • Classmate,papercraft
building, 'Virginia House' • Itc setup Agree business
Kolkatta devision
• Itc infotech ltd.
Registered office: • Sunfeast
• M/S India Tobacco Company • Wills classic
Limited • Mint-o
Kolkatta • Candymen
• Bingo! Etc..

4. CHAIRMAN NON-EXECUTIVE DIRECTORS
• Y C Deveshwar
• A Baijal
EXECUTIVE DIRECTORS • S Banerjee
• AV Girija Kumar
• Nakul Anand • D K Mehrotra
• P V Dhobale • S B Mathur
• K N Grant • S H Khan
• H G Powell
• Basudeb Sen
• P B Ramanujam
• K Vaidyanath
• Anthony Ruys
• B Vijayaraghavan

5. VERTICAL ANALYSIS

6. INTRODUCTION
• Vertical analysis is the proportional expression
of each item on a financial statement to the
statement total.
• The results of vertical analysis are presented
in the form of common-size-statements in
which all the elements within each statement
are expressed in percentage of some common
number and always add up to 100 percent

7. VERTICAL ANALYSIS OF BALANCE
SHEET FROM 2007 TO 2011
SOURCE OF FUNDS
PARTICULARS CONTRIBUTION (%) WITH RESPECTED YEAR
2007 2008 2009 2010 2011
1. Shareholders’ Funds
a) Capital 3.39 2.95 2.55 2.55 4.59
b) Reserves & Surplus 90.54 91.13 90.38 91.48 90.06
TOTAL 93.93 94.08 92.93 94.03 94.65
2. Loan Funds
a) Secured Loans 0.55 0.05 0.08 ----- 0.01
b) Unsecured Loans 1.26 1.62 1.12 0.73 0.58
TOTAL 1.81 1.67 1.20 0.73 0.59
3. Deferred Tax-Net 4.26 4.25 5.87 5.24 4.75
SUB TOTAL 100 100 100 100 100

8. INTERPRETATION
• In 2007 If we consider total Source of Fund as
100%, from this 90.54% was by Reserve and
Surplus. This contribution of the reserve and
surplus remain almost same for the rest of year.
And the less contribution by secured loan in all
year which contributed less than 0.1%.
• We can say that the contribution in source of
fund was mainly by Shareholder’s fund.
Contribution of deferred tax was b/w 4 to 6% for
all years.

9. APPLICATION OF FUNDS
PARTICULARS CONTRIBUTION (%) WITH REAPECTED YEAR
2007 2008 2009 2010 2011
1. Fixed Assets
a) Net Block 42.70 48.13 49.20 54.44 49.79
b) Capital Work-In Progress 07.80 08.79 08.21 6.74 07.95
TOTAL 50.50 56.92 57.41 61.18 57.74
2. Investments 27.62 22.89 19.20 38.29 32.95
3. Current Assets, Loans and Advances
a) Inventories 30.17 31.61 31.11 30.00 31.22
b) Sundry Debtors 05.73 5.75 04.52 05.67 05.38
c) Cash and Bank Balances 08.10 4.45 6.98 07.43 13.30
d) Other Current Assets 01.64 1.19 1.45 01.90 2.06
e) Loans and Advances 10.94 11.83 11.23 08.60 8.40
TOTAL 56.58 54.78** 55.21 53.60 60.37
4. Current Liabilities and Provisions*
a) Liabilities 21.46 21.75 20.05 23.08 26.43
b) Provisions 13.24 12.84 11.77 30.00 24.33
TOTAL 34.70 34.59** 31.82 53.08 50.76
Net Current Assets 21.88 20.19 23.39 0.52 09.61
FINAL TOTAL 100 100 100 100 100

10. INTERPRETATION
• if we consider application of fund as 100%, contribution
of fixed assets, investment and net current assets was
50.50%, 27.62% and 21.88% in 2007. It was
56.92%, 22.89% and 20.19% in 2008. And for rest of the
year it was b/w 57 to 62%, 19 to 33% and 09 to 24%
respectively except 2010. In 2010 contribution of net
current assets was only 0.52% and for that year
investment contribution increased up to 39%.
• So for 2011 business year company must be increased its
net current assets. It was increased up to 10%.

11. VERTICAL ANALYSIS OF PROFIT AND
LOSS ACCOUNT FROM 2007-2011
1.NET INCOME
PERTICULERS CONTRIBUTION (%) WITH REAPECTED YEAR
2007 2008 2009 2010 2011
NET SALES 97.31 95.81 99.67 96.79 96.28
OTHER INCOME 02.69 04.19 0.33 03.21 03.72
TOTAL 100 100 100 100 100

12. INTERPRETATION
• If we consider net Income as 100%,
contribution of net sales is more than 95% for
all 5 years. And about less than 5%
contribution of other income. For any
company net sale is much important than
other income. If expense remain same for
every year and net income will increase your
net profit will increase.

13. 2.EXPENDITURE
PERTICULERS CONTRIBUTION (%) WITH REAPECTED YEAR
2007 2008 2009 2010 2011
RAW MATERIALS 41.56 41.33 40.48 37.16 36.96
ETC.
MANUFACTURING, 24.13 24.25 25.75 27.51 27.00
SELLING ETC.
EXPENSES
DEPRECIATION 02.90 03.01 03.46 03.25 02.98
TOTAL 69.59 68.59 69.69 67.92 66.94

14. INTERPRETATION
• The contribution of total expenditure was b/w 66 to
70% which was almost remain same the all 5 years,
from this we can say that the expenses made by the
company was stable for every year and this is good sign
for the company .
• For analysis we took the data of 2007, in 2007 the
contribution of the raw material, manufacturing
expenses and depreciation was 41.56%, 24.13% and
2.90%. from this we can say that the depreciation on
the machinery is less compare to others.
• The good thing for this company is the all expenses
remain nearly same for the all 5 year.

15. 3.NET PROFIT
PARTICULERS CONTRIBUTION (%) WITH REAPECTED YEAR
2007 2008 2009 2010 2011
PROFIT BEFORE 31.41 31.40 30.31 32.08 33.06
TAXATION
PROVISION FOR 09.81 09.97 09.81 10.42 10.37
TAXATION
PROFIT AFTER 21.60 21.43 20.50 21.66 22.69
TAXATION

16. INTERPRETATION
• Net profit comes from deducting expenses
from the net income. From all income net
profit is by 21.6% for 2007. Net profit for all
the year remains almost same for the
company. So we can say that the stability of
the company is very good.

17. HORIZONTAL ANALYSIS

18. INTRODUCTION
• Financial statements present comparative information for the
current year and the previous year. A simple approach to
financial statement analysis, known as Horizontal analysis, is
to calculate amount changes and percentage changes from the
previous year to the current year.
• While an amount change in itself may mean
something, converting amount changes to percentages is
more useful in appreciating the order of magnitude of the
change.

19. ANALYSIS OF BALANCE SHEET OF
YEAR 2007-2008
1.SOURCE OF FUNDS
PARTICULERS CHANGE IN VALUE (IN CHANGE IN %
CR.)
1. Shareholders’ Funds
a) Capital 0.64 0.17
b) Reserves & Surplus 1619.94 16.10
TOTAL 1620.59 15.52
2. Loan Funds
a) Secured Loans (55.21) (90.83)
b) Unsecured Loans 68.76 49,08
TOTAL 13.55 06.74
3. Deferred Tax-Net 72.22 15.27
TOTAL 1706.36 15.35

20. INTERPRETATION
• From the above analysis of balance sheet we came to know that source of
fund increased to 15.35% compare to the last year (2007).
• Let’s first talk about the shareholder’s fund.
• SHAREHOLDER’S FUND
Shareholder’s fund increased to 15.52% in 2008 due to increase of Capital
(0.17%) and Reserve and Surplus (16.10%). From the data we can easily
understand that increase in Shareholder’s Fund is mainly due to increase in
Reserve and Surplus.
• LOAN FUNDS
Here, Loan Fund increased to only 06.74% because secured loan decreased to
90.83% and unsecured loan increased only to 49.08%. Decreased in to secured
loan is mainly responsible for the less increase in to Loan Fund.
• DEFERRED TAX-NET
As compared to 2007, in 2008 deferred tax net increased to 15.27%

21. 2.APPLICATION OF FUNDS
PERTICULERS CHANGE IN VALUE (IN CHANGE IN %
CR.)
1. Fixed Assets
a) Gross Block 1825.39 25.58
b) Depreciation 401.33 16.8
c) Net Block 1424.06 30.0
d) Capital Work-In Progress 260.68 30.1
TOTAL 1684.74 30.0
2. Investments (133.22) (04.32)
3. Current Assets, Loans and Advances
a) Inventories 696.44 20.76
b) Sundry Debtors 100.24 15.74
c) Cash and Bank Balances (329.91) (36.65)
d) Other Current Assets (36.97) (20.19)
e) Loans and Advances 299.7 24.65
TOTAL 729.55 11.6
4. Current Liabilities and Provisions
a) Liabilities 402.22 16.86
b) Provisions 172.49 11.71
TOTAL 574.71 14.90
Net Current Assets 154.84 06.36
TOTAL 1706.36 15.35

22. INTERPRETATION
• Balance sheet of company is prepared as per the
Matching Concept. So, as per this concept the source
of the fund and application of the fund must be come
same.
• Here, application of fund increased to 15.35%. And net
current assets increased to 06.36%.
• FIXED ASSETS
Increased to 30% due to increase in capital and gross
block. Another thing is depreciation it is increased to
16.80%. Net block and capital increased in almost same
proportion.

23. CONTINUOUS
• CURRENT ASSETS, LOANS AND ADVANCES
Inventory increased to 20.76%, Sundry debtors increased
to 15.74% and Loan advances increased to 24.65% while
cash and other current assets decreased to 36.65% and
20.19% respectively. From this data we can say that most
affected change was in cash. So, at the end total these were
increased to 11.60%.
• CURRENT LIABILITIES
Current liabilities increased to 14.9% this is due to
increase in liability and provision increased to 16.86% and
11.71% respectively.

24. ANALYSIS OF BALANCE SHEET OF YEAR
2008-2009
1.SOURCE OF FUNDS
PARTICULERS CHANGE IN VALUE (IN CHANGE IN %
CR.)
1. Shareholders’ Funds
a) Capital 0.58 0.15
b) Reserves & Surplus 1676.83 14.31
TOTAL 1677.41 13.91
2. Loan Funds
a) Secured Loans 6.06 108.79
b) Unsecured Loans (42.94) (20.55)
TOTAL (36.88) (17.20)
3. Deferred Tax-Net 322.12 59.10
TOTAL 1962.65 15.31

25. INTERPRETATION
• From the above analysis of balance sheet we came to know that source of
fund increased to 15.31% compare to the last year (2008). This was 15.35%
increase in 2008 as compare to 2007.
• Let’s first talk about the shareholder’s fund.
• SHAREHOLDER’S FUND
Shareholder’s fund increased to 14.31% in 2009 due to increase of Capital
(0.15%) and Reserve and Surplus (13.91%). From the data we can easily
understand that increase in Shareholder’s Fund is mainly due to increase in
Reserve and Surplus.
• LOAN FUNDS
Here, Loan Fund increased to only 17.20% because unsecured loan decreased
to 20.55% and secured loan increased only to 108.79%. Decreased in to
unsecured loan is mainly responsible for the less increase in to Loan Fund because
amount increase in to secured loan is very small as compare to unsecured loan.
• DEFERRED TAX-NET
As compared to 2008, in 2009 deferred tax net increased to 59.10%

26. 2.APPLICATION OF FUNDS
PERTICULERS CHANGE IN VALUE (IN CHANGE IN %
CR.)
1. Fixed Assets
a) Gross Block 1598.95 17.84
b) Depreciation 495.87 17.76
c) Net Block 1103.08 17.88
d) Capital Work-In Progress 87.24 7.74
TOTAL 1190.32 16.31
2. Investments (96.80) (3.30)
3. Current Assets, Loans and Advances
a) Inventories 549.2 13.55
b) Sundry Debtors (68.26) (09.26)
c) Cash and Bank Balances 462.14 81.04
d) Other Current Assets 69.28 47.42
e) Loans and Advances 129.48 08.54
TOTAL 1141.84 16.26
4. Current Liabilities and Provisions
a) Liabilities 177.55 06.37
b) Provisions 95.16 05.78
TOTAL 272.71 06.15
Net Current Assets 869.13 33.60

27. INTERPRETATION
• Balance sheet of company is prepared as per the Matching
Concept. So, as per this concept the source of the fund and
application of the fund must be come same.
• Here, application of fund increased to 15.31%. And net current
assets increased to 33.60%.
• FIXED ASSETS
Increased to 16.31% due to increase in capital and gross block.
Another thing is depreciation it is increased to 17.76%. Net block
increased to 17.88% and capital increased to 07.74%.
• INVESTMENT
In 2008 investment decreased to 3.30%. Value of investment
decreased to Rs. 96.8 cr.

28. Continuous
• CURRENT ASSETS, LOANS AND ADVANCES
Inventory increased to 13.55%, Sundry debtors decreased to 09.26% and
Loan advances increased to 08.54% while cash and other current assets
increased to 81.04% and 47.42% respectively. From this data we can say that
most affected change was in cash. So, at the end
total these were increased to 16.26%. here, increased in total is mainly due to
increase in cash.
• CURRENT LIABILITIES
Current liabilities increased to 06.15% this is due to increase in liability and
provision increased to 06.37% and 05.78% respectively.

29. ANALYSIS OF BALANCE SHEET OF YEAR
2009-2010
1.SOURCE OF FUNDS
PARTICULERS CHANGE IN VALUE (IN CHANGE IN %
CR.)
1. Shareholders’ Funds
a) Capital 0.58 0.15
b) Reserves & Surplus 1676.83 14.31
TOTAL 1677.41 13.91
2. Loan Funds
a) Secured Loans 6.06 108.79
b) Unsecured Loans (42.94) (20.55)
TOTAL (36.88) (17.20)
3. Deferred Tax-Net 322.12 59.10
TOTAL 1962.65 15.31

30. INTERPRETATION
• From the above analysis of balance sheet we came to know that source of
fund increased to 15.31% compare to the last year (2008). This was 15.35%
increase in 2008 as compare to 2007.
• Let’s first talk about the shareholder’s fund.
• SHAREHOLDER’S FUND
Shareholder’s fund increased to 14.31% in 2009 due to increase of Capital
(0.15%) and Reserve and Surplus (13.91%). From the data we can easily
understand that increase in Shareholder’s Fund is mainly due to increase in
Reserve and Surplus.
• LOAN FUNDS
Here, Loan Fund increased to only 17.20% because unsecured loan decreased
to 20.55% and secured loan increased only to 108.79%. Decreased in to
unsecured loan is mainly responsible for the less increase in to Loan Fund because
amount increase in to secured loan is very small as compare to unsecured loan.
• DEFERRED TAX-NET
As compared to 2008, in 2009 deferred tax net increased to 59.10%

31. 2.APPLICATION OF FUNDS
PERTICULERS CHANGE IN VALUE (IN CR.) CHANGE IN %
1. Fixed Assets
a) Gross Block 1598.95 17.84
b) Depreciation 495.87 17.76
c) Net Block 1103.08 17.88
d) Capital Work-In Progress 87.24 7.74
TOTAL 1190.32 16.31
2. Investments (96.80) (3.30)
3. Current Assets, Loans and Advances
a) Inventories 549.2 13.55
b) Sundry Debtors (68.26) (09.26)
c) Cash and Bank Balances 462.14 81.04
d) Other Current Assets 69.28 47.42
e) Loans and Advances 129.48 08.54
TOTAL 1141.84 16.26
4. Current Liabilities and Provisions
a) Liabilities 177.55 06.37
b) Provisions 95.16 05.78
TOTAL 272.71 06.15
Net Current Assets 869.13 33.60
TOTAL 1962.65 15.31

32. INTERPRETATION
• Balance sheet of company is prepared as per the Matching
Concept. So, as per this concept the source of the fund and
application of the fund must be come same.
• Here, application of fund increased to 15.31%. And net
current assets increased to 33.60%.
• FIXED ASSETS
Increased to 16.31% due to increase in capital and gross block.
Another thing is depreciation it is increased to 17.76%. Net block
increased to 17.88% and capital increased to 07.74%.
• INVESTMENT
In 2008 investment decreased to 3.30%. Value of investment
decreased to Rs. 96.8 cr.

33. Continuous
• CURRENT ASSETS, LOANS AND ADVANCES
Inventory increased to 13.55%, Sundry debtors decreased to
09.26% and Loan advances increased to 08.54% while cash and
other current assets increased to 81.04% and 47.42%
respectively. From this data we can say that most affected
change was in cash. So, at the end total these were increased to
16.26%. here, increased in total is mainly due to increase in cash.
• CURRENT LIABILITIES
Current liabilities increased to 06.15% this is due to increase
in liability and provision increased to 06.37% and 05.78%
respectively.

34. ANALYSIS OF BALANCE SHEET OF YEAR
2010-2011
1.SOURCE OF FUNDS
PARTICULERS CHANGE IN VALUE (IN CHANGE IN %
CR.)
1. Shareholders’ Funds
a) Capital 391.33 102.66
b) Reserves & Surplus 1496.9 10.94
TOTAL 1888.89 13.43
2. Loan Funds
a) Secured Loans 1.94 -----
b) Unsecured Loans (10.45) (9.70)
TOTAL (8.51) (7.90)
3. Deferred Tax-Net 10.84 2.14
TOTAL 1897.22 12.48

35. INTERPRETATION
• From the above analysis of balance sheet we came to know that source of fund
increased to 12.48% compare to the last year (2011). This was 1.20% increase in
2010 as compare to 2009.
• Let’s first talk about the shareholder’s fund.
• SHAREHOLDER’S FUND
Shareholder’s fund increased to 13.43% in 2011 due to increase of Capital
(102.66%) and Reserve and Surplus (10.94%). From the data we can easily understand
that increase in Shareholder’s Fund is mainly due to increase in capital.
• LOAN FUNDS
Here, Loan Fund decreased to only 7.90% because unsecured loan decreased to
9.70% and secured loan was increase by Rs.1.20 Cr.
• DEFERRED TAX-NET
As compared to 2010, in 2011 deferred tax net decreased to 2.14% this was good
for company.

36. 2.APPLICATION OF FUNDS
PERTICULERS CHANGE IN VALUE (IN CR.) CHANGE IN %
1. Fixed Assets
a) Gross Block 797.96 6.66
b) Depreciation 595.29 15.56
c) Net Block 202.67 20.49
d) Capital Work-In Progress 324.41 32.15
TOTAL 527.08 9.20
2. Investments (172.21) (30.07)
3. Current Assets, Loans and Advances
a) Inventories 718.46 15.79
b) Sundry Debtors 49.55 5.77
c) Cash and Bank Balances 1116.96 99.17
d) Other Current Assets 59.05 20.47
e) Loans and Advances 112.03 8.57
TOTAL 2056.05 25.29
4. Current Liabilities and Provisions
a) Liabilities 958.8 27.40
b) Provisions (445.1) (8.57)
TOTAL 513.7 6.38
Net Current Assets 1542.35 ----
TOTAL 1897.22 12.48

37. INTERPRETATION
• Balance sheet of company is prepared as per the Matching Concept. So, as
per this concept the source of the fund and application of the fund must
be come same.
• Here, application of fund increased to 12.48%. And net current assets
decreased by Rs.1542.35 Cr. this was good for company
• FIXED ASSETS
Increased to 6.66% due to increase in gross block. Another thing is
depreciation it is increased to 15.56%. Net block increased to 20.49% and
capital in progress increased to 32.15%.
• INVESTMENT
In 2011 investment decreased to 30.07%. Value of investment increased to
Rs.172.21 cr.
• This was not good for the company. So, may be production will be in
control.
.

38. Continuous
• CURRENT ASSETS, LOANS AND ADVANCES
Inventory increased to 15.79%, Sundry debtors increased to
5.77% and Loan advances increased to 8.57% while cash and
other current assets increased to 99.17% and 20.47%
respectively. This means company is in way of progress
• CURRENT LIABILITIES
Current liabilities increased to 6.38% this is due to increase in
liability and decreased provision increased to 20.40% and 9.78%
respectively. Net Current Assets increased to Rs.1542.35 Cr.
mainly due to decrease in provision.

39. ANALYSIS OF PROFIT AND LOSS
ACCOUNT 2007-08
• GROSS INCOME
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
GROSS INCOME 2330.31 11.66
Gross profit of the company increased by 11.66% as compared to previous
year. Only from gross profit we cannot say anything about the progress of
company. For this we have to analyze other following particulars for the
company. Let’s go for this.

40. • NET INCOME
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
NET SALES 1783.24 14.66
OTHER INCOME 274.41 81.55
TOTAL 2057.65 16.46
Net income is increased by 16.46% due to increase in net sales and other
income. Here, other income is increased by 81.55% but in small amount while
Net sales are increased by 14.66% but in big amount. So, for this we can say
that increase in to net income is mainly due to the increase in Net sales.

41. • EXPENDITURE
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
RAW MATERIALS ETC. 821.92 15.82
MANUFACTURING, SELLING 515.12 17.07
ETC. EXPENSES
DEPRECIATION 75.54 20.81
TOTAL 1412.58 16.47
Expenditure is increased by 16.47% as compared to previous year. This was
happened due to increase in Raw material expense, Manufacturing and selling
expense and depreciation by 15.82%, 17.07% and 20.81% respectively.

42. • PROFIT
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
PROFIT BEFORE TAXATION 645.07 16.42
PROVISION FOR TAXATION 224.94 18.33
PROFIT AFTER TAXATION 420.13 15.56
Profit after taxation is increased by 15.56%. at present year company is
increased provision for taxation by 18.33% from profit before tax. At present
year profit before taxation is also increased by 16.42%. we can say easily from
this data that company is running in path of success.

43. • APPROPRIATIONS
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
GENERAL RESERVE 250 20
PROPOSED DIVIDEND 152.72 13.10
INCOME TAX ON PROPOSED 25.96 13.10
DIVIDEND
After adding the profit brought forward in to profit after taxation, the
upcoming figure will get available for the appropriation. From data we can say
that company increased the general reserve by 20% and proposed dividend is
also increased by 13.1% so, obviously income tax on dividend is increased by
13.1%. These all reserve will help the company in
future.

44. ANALYSIS OF PROFIT AND LOSS
ACCOUNT 2008-09
• GROSS INCOME
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
GROSS INCOME 1711.62 7.8
Gross profit of the company increased by 7.8% as compared to previous
year. Only from gross profit we cannot say anything about the progress of
company. For this we have to analyze other following particulars for the
company. Let’s go for this.

45. • NET INCOME
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
NET SALES 1407.68 10.1
OTHER INCOME (75.97) (12.43)
TOTAL 1364.61 9.37
Net income is increased by 9.37% due to increase in net sales and other
income. Here, other income is decreased by 12.43% but in small amount while
Net sales are increased by 10.1% but in big amount. So, for this we can say that
increase in to net income is mainly due to the increase in Net sales.

46. • EXPENDITURE
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
RAW MATERIALS ETC. 430.08 7.14
MANUFACTURING, SELLING 569.61 16.13
ETC. EXPENSES
DEPRECIATION 110.95 25.30
TOTAL 1110.64 11.12
Expenditure is increased by 11.12% as compared to previous year. This was
happened due to increase in Raw material expense, Manufacturing and
selling expense and depreciation by 9.37%, 7.14% and 25.30% respectively.

47. • PROFIT
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
PROFIT BEFORE TAXATION 253.97 5.55
PROVISION FOR TAXATION 110.48 7.61
PROFIT AFTER TAXATION 143.49 4.56
Profit after taxation is increased by 4.56%. at present year company is
increased provision for taxation by 7.61% from profit before tax. At
present year profit before taxation is also increased by 5.55%. we can say
easily from this data that company is running in path of success.

48. • APPROPRIATIONS
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
GENERAL RESERVE ----- -----
PROPOSED DIVIDEND 77.52 5.87
INCOME TAX ON 13.17 5.87
PROPOSED DIVIDEND
After adding the profit brought forward in to profit after taxation, the
upcoming figure will get available for the appropriation. From data we
can say company was not interested in change general reserve and
proposed dividend is also increased by 5.87% so, obviously income tax
on dividend is increased by 5.87%. these all reserve will help the
company in future.

49. ANALYSIS OF PROFIT AND LOSS
ACCOUNT 2009-10
• GROSS INCOME
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
GROSS INCOME 3184.52 13.44
Gross profit of the company increased by 13.44% as compared to
previous year. Only from gross profit we cannot say anything about the
progress of company. For this we have to analyze other following
particulars for the company. Let’s go for this.

50. • NET INCOME
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
NET SALES 2541.27 16.27
OTHER INCOME 68.45 12.8
TOTAL 2609.72 16.16
Net income is increased by 16.16% due to increase in net sales and other
income. Here, other income is increased by 12.80% but in small amount
while Net sales are increased by 16.27% but in big amount. So, for this
we can say that increase in to net income is mainly due to the increase in
Net sales.

51. • EXPENDITURE
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
RAW MATERIALS ETC. 1013.53 17.01
MANUFACTURING, SELLING 347.32 7.21
ETC. EXPENSES
DEPRECIATION 59.3 10.79
TOTAL 1420.15 12.54
Expenditure is increased by 12.54% as compared to previous year. This
was happened due to increase in Raw material expense, Manufacturing
and selling expense and depreciation by 17.01%, 7.21% and 10.79%
respectively.

52. • PROFIT
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
PROFIT BEFORE TAXATION 1189.57 24.65
PROVISION FOR TAXATION 392.16 25.10
PROFIT AFTER TAXATION 797.41 24.43
Profit after taxation is increased by 24.43%. at present year company is
increased provision for taxation by 18.33% from profit before tax. At
present year profit before taxation is also increased by 16.42%. we can
say easily from this data that company is running in path of success. And
as compare to the last year company was earn more.

53. • APPROPRIATIONS
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
GENERAL RESERVE (1093.9) (72.92)
PROPOSED DIVIDEND 321.65 23.03
After adding the profit brought forward in to profit after taxation, the
upcoming figure will get available for the appropriation. From data we can
say that company decreased the general reserve by 72.92% and proposed
dividend is also increased by 23.03% so, income tax on dividend is
increased by 16.71%. these all reserve will help the company in future.

54. ANALYSIS OF PROFIT AND LOSS
ACCOUNT 2010-11
• GROSS INCOME
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
GROSS INCOME 4548.89 16.92
Gross profit of the company increased by 16.92% as compared to
previous year. Only from gross profit we cannot say anything about the
progress of company. For this we have to analyze other following
particulars for the company. Let’s go for this.

55. • NET PROFIT
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
NET SALES 3014.89 16.60
OTHER INCOME 204.1 33.20
TOTAL 3218.44 17.14
Net income is increased by 17.14% due to increase in net sales and
other income. Here, other income is increased by 33.20% but in small
amount while Net sales are increased by 16.60% but in big amount. So,
for this we can say that increase in to net income is mainly due to the
increase in Net sales.

56. • EXPENDITURE
PARTICULERS CHANGE IN CHANGE IN %
VALUE (IN CR.)
RAW MATERIALS ETC. 1119.24 15.47
MANUFACTURING, 799.12 15.55
SELLING ETC. EXPENSES
DEPRECIATION 47.28 7.76
TOTAL 1965.64 15.41
Expenditure is increased by 15.91% as compared to previous year. This
was happened due to increase in Raw material expense, Manufacturing
and selling expense and depreciation by 15.47%, 15.55% and 7.76%
respectively.

57. • PROFIT
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
PROFIT BEFORE TAXATION 1252.85 20.82
PROVISION FOR TAXATION 326.24 16.09
PROFIT AFTER TAXATION 926.61 22.81
Profit after taxation is increased by 22.81%. at present year company is
increased provision for taxation by 16.09% from profit before tax. At
present year profit before taxation is also increased by 20.82%. we can
say easily from this data that company is running in path of success.

58. • APPROPRIATION
PARTICULERS CHANGE IN VALUE CHANGE IN %
(IN CR.)
GENERAL RESERVE 92.66 22.81
PROPOSED DIVIDEND 448.5 26.10
After adding the profit brought forward in to profit after taxation, the
upcoming figure will get available for the appropriation. From data we
can say that company increased the general reserve by 22.81% and
proposed dividend is also increased by 126.10%.

59. RATIO ANALYSIS

60. • A financial ratio (or accounting ratio) is a relative magnitude of two
selected numerical values taken from an enterprise's financial statementS.
• Financial ratios may be used by managers within a firm, by current and
potential shareholders (owners) of a firm, and by a firm's creditors.
• Financial ratios allow for comparisons
 between companies
 between industries
 between different time periods for one company
 between a single company and its industry average

61. TYPES OF RATIOS
• Return on investment ratios
 Return on net worth (RONW)
 Earning per share (EPS)
 Cash earning per share (CEPS).
• Solvency ratios
 Net asset value-NAV
 Debt equity ratio-D/E
 Interest cover
 Debt service covering ratio
• Liquidity ratios
 Current ratio
 Quick ratio
 Collection period allowed to customers
 Suppliers credit
 Inventory holding period

62. • Resource efficiency or turn over ratios
 Fix asset turn over ratio
 Net worth turn over ratio
• Profitability ratios
 Multi step Profit margin to sales ratio
• Valuation or capital market ratios
 P/E ratio
 Market price to NAV ratio
 Market capitalisation

63. RETURN ON INVESTMENT RATIO
• Return on net worth (RONW)
 It measures the net profit earned on the equity share holders funds.
Return on net worth = (PAT – Preference dividend)*100/net worth
March 2011 March 2010 March 2009 March 2008 March 2007
4987.61 4061 3263.59 3120.10 2774.34
PAT
0.0 0.0 0.00 0.0 0.0
Pref.dividend
15204.82 13901.92 13273.77 11247.695 10310.24
Net worth
RONW(%) 32.80 29.21 24.58 27.73 26.90

64. RONW(%)
35
30
25
20
15 RONW(%)
10
5
0
2007 2008 2009 2010 2011
Interpretation : There has been a gradual improvement in the RONW ratio from
2007,though it went down a bit in 2009 but it has managed to shoot up in 2011 as
seen in the graph above.These are good signs for the company as a high ratio means
high dividend,better growth prospects,high valuation in capital market etc.Variety of
factors like growth in sales or efficient tax planning may have played a vital role.

65. EARNING PER SHARE (EPS)
• This ratio measures the overall profitability in terms of per equity share
capital contributed by the owners.
EPS = PAT/Weighted average number of equity shares.
March 2011 March 2010 March 2009 March 2008 March 2007
PAT 4987.61 4061 3263.59 3120.10 2774.34
Equity shares 773.81 381.82 377.74 376.86 376.22
EPS 6.44 10.63 8.64 8.27 7.37

66. EPS
12
10
8
6
EPS
4
2
0
2007 2008 2009 2010 2011
Interpretation
Fall in EPS as compared to 2010.Owing to the good reputation of the
company,the equity was good.But somehow the EPS is not high as expected.

67. CASH EARNING PER SHARE (CEPS)
• This ratio measures the overall cash profitability in terms of per equity
shares of capital contributed by the owners
CEPS = PAT + Non-cash charges(Depreciation)/Weighted no of equity shares
March 2011 March 2010 March 2009 March 2008 March 2007
PAT 4987.61 4061 3263.59 3120.10 2774.34
Equity shares 773.81 381.82 377.74 376.86 376.22
Depreciation 655.99 608.71 549.41 438.46 362.92
CEPS 7.29 12.23 10.10 9.44 8.42
.

68. CEPS
14
12
10
8
CEPS
6
4
2
0
2007 2008 2009 2010 2011
Interpretation
Fall in CEPS ratio as compared to 2010.

69. NET ASSET VALUE
• Net asset value –NAV value:This ratio measures the net worth or net asset value
per equity share.It thus seeks to assess as to what extent the value of equity share
of a company contributed at par or at a premium has grown or the value/wealth
has been created for the share holders.
NAV = NW (Equity shareholders fund) / No .of equity shares o/s
March 2011 March 2010 March 2009 March 2008 March 2007
Net worth 15953.27 14064.38 13735.08 12057.67 10646.58
Equity shares 773.81 381.82 377.74 376.86 376.22
NAV 20.61 36.83 36.39 31.99 28.29

70. NAV (Rs.crores)
40
35
30
25
20
NAV (Rs.crores)
15
10
5
0
2007 2008 2009 2010 2011
Interpretation : The company witnessed a rise in NAV ratio from 2007 to 2010.Due to
which the company was successful in raising more capital from the share holders in
the current year.But 2011 saw a decrease in the Net asset value.The reasons for the
same may be in efficientness of the company to create a back up of reserves and
surplus,may be some flaws in its dividend policy.Speculations at peak.

71. DEBT EQUITY RATIO
This ratio measures the proportion of debt and capital-both equity and in
preference in the capital structure of the company.It measures the extents of
assets financed
Debt equity ratio = Long term debt / Total NW
March 2011 March 2010 March 2009 March 2008 March 2007
NW 15953.27 14064.38 13735.08 12057.67 10646.58
Long term debt 420.5 110.8 186.7 224.9 200.9
D/E 0.01 0.01 0.013 0.0186 0.018

72. D/E (Rs.crores)
0.02
0.018
0.016
0.014
0.012
0.01
0.008 D/E (Rs.crores)
0.006
0.004
0.002
0
2007 2008 2009 2010 2011
Interpretation: The D/E ratio has been very low as compared to the standard
ratio of 1.5:1.These are very good signs for the company as company has to pay
very less debt from its profit margins and it can further raise its resources
because of it.Leveraging capacity also increases due to this.

73. INTEREST COVER RATIO
• This ratio measures the capacity of a company to pat yhe
interest liability it has incurredon its long term borrowings out
of its cash profits.It is also known as Times –Interest covered.
Interest cover = EBIT/Interest
EBIT = Earnings before interest and taxation
March 2011 March 2010 March 2009 March 2008 March 2007
Interest 98.11 90.28 47.65 24.62 16.04
EBIT 7316 6080 4844 4576 3930
Interest cover 93.6 67.34 101.65 125.9 245.01

74. Interest cover
300
250
200
150
Interest cover
100
50
0
2011 2010 2009 2008 2007
Interpretation: Interest cover ratio is extremely high.Though it did decrese in
2010 but it has managed to pull up in 2011.This high ratio indicates that
company is well placed to meet its interst obligations from the revenue it is
generating.

75. CURRENT RATIO
• This ratio measures the abitlity of company to discharge its day to day
bills,or current liabilities as and when they fall sue,out of the cash or near
cash or current assets that it posses.
Current ratio = Current assets,loans and advances + Short term Investment
/ Current liabilities and provisions + short term debts
March 2011 March 2010 March 2009 March 2008 March 2007
Current 10183.97 8127.08 8161.11 7019.27 6934.55
assets,loans and
advances
S.term investment 0.0 0.0 0.0 0.0 0.0
Current liabilities 8562.7 8048.24 4705.01 4432.30 3990.64
and provisions
S.term debts 0.0 0.0 0.0 0.0 0.0
Current ratio 1.18 1.00 1.73 1.58 1.73

76. CURRENT RATIO
2
1.8
1.6
1.4
1.2
1 CURRENT RATIO
0.8
0.6
0.4
0.2
0
2011 2010 2009 2008 2007
Interpretation: The ratio is comfortably placed at 1.18,though 1.33 is
desirable.This ratio calculated is without the numbers of short term
investment.The figures of the same may have an impact on the over all ratio
and it may further rise.But this ratio can be considered good.

77. QUICK RATIO
• This ratio measures as to how quick is the ability of a company to discharge its
current liabilities net of working capital limits as and when they fall due out of cash
or current assets net of inventories they posses.It is also called as Acid test ratio
• Quick ratio = Currents assets,Loans and advances – Inventories + Short term
investment/Current liabilities+Provisions
March 2011 March 2010 March 2009 March 2008 March 2007
Current assets,loans 10183.97 8127.08 8161.11 7019.27 6934.55
and advances
Inventories 5267.53 4549.07 4599.73 4050.53 3934.67
Current liabilities 8562.7 8048.24 4705.01 4432.30 3990.64
and provisions
Quick ratio 0.574 0.44 0.756 0.668 0.75

78. QUICK RATIO
0.8
0.7
0.6
0.5
0.4
0.3 QUICK RATIO
0.2
0.1
0
2011 2010 2009 2008 2007
Interpretation : Generally desired and standard ratio is 1:1.But as the
graph suggests they have been slightly below 1.This may be due to
absence of information regarding short term investments.Needless to
say but the ratio have declined from 2009 irrespective of the
information of short term investment

79. COLLECTION PERIOD ALLOWED TO
CUSTOMERS
• The ratio measures credit period allowed to the customers on credit sales
or how fast a company realizes its outstanding dues.It is also known as
days sales in receivables ratio
Collection period allowed to customers(Days) = Receivables * 365/Credit
sales
March 2011 March 2010 March 2009 March 2008 March 2007
Recievables 907.62 858.07 668.67 736.93 733.04
Credit sales 30604.39 26259.6 23143.53 21355.93 20208.77
Collection 11 12 11 13 13
period(days)

80. Collection period allowed to customers (Days)
13.5
13
12.5
12
11.5 Collection period allowed to customers (Days)
11
10.5
10
2007 2008 2009 2010 2011
Interpretation: The scenario is very conducive to the company as it has a very short
collection or credit giving period to its customers in comparision to a staggering 176
days period it enjoys from its suppliers.

81. SUPPLIERS CREDIT RATIO
• This ratio measures the average credit period availed by a company from its
suppliers on credit purchases or how much leverage it posses to settle its
outstanding payables.Also known as Days purchases in payables ratio.
• Suppliers credit ratio (Days) = Payables * 365/Credit purchases
March March March March March
2011 2010 2009 2008 2007
Payables 4457.94 3499.14 2786.97 2384.75 2548.65
Credit 8126.5 7007.26 6446.78 6016.7 5276.53
purchase
Suppliers 200 182 157 144 176
credit
(days)

82. SUPPLIERS CREDIT (DAYS)
250
200
150
SUPPLIERS CREDIT (DAYS)
100
50
0
2011 2010 2009 2008 2007
Interpretation : A marked increase from 2010.Just shows the reputation
of the company in attracting new suppliers from the market and the
existing suppliers extending the credit period they are allocating to the
company.If compared to customer collect period,it scores very high in that
too.Very favourable.

83. INVENTORY HOLDING PERIOD
• This ratio measures the period of inventory build up or the number of days that is
cash is blocked in inventory or how fast a company is able t convert its inventory
into cash or near cash
• Inventory holding period (days) = Inventory * 365 / Cost of goods sold (COGS)
March 2011 March 2010 March 2009 March 2008 March 2007
Inventory 5267.53 4549.07 4599.73 4050.53 3934.67
Raw materials 8126.5 7007.26 6446.78 6016.7 5276.53
Mfg.expense 5935.77 5136.65 4101.11 3531.5 3515.12
Inventory holding 138 137 159 155 135
period (days)

84. Inventory holding period(days)
165
160
155
150
145
140 Inventory holding period(days)
135
130
125
120
2011 2010 2009 2008 2007
• Interpretation : High ratio.It gives a measure is to how fast a company is able to
convert its inventory into cash..Though went up in 2008-09 it managed to come
down which indicates good sign for the company

85. FIXED ASSET TURN OVER RATIO
• This ratio measures the extent of turnover or volume of gross income
generated by the fixed assets of the company in other words the efficiency
in utilization.
FATR = Netsales/Net block or fixed assets
March 2011 March 2010 March 2009 March 2008 March 2007
Net sales 21167.58 18153.19 15611.92 13947.53 12169.29
N.B of F.A 8345.07 8142.40 7271.91 6168.83 4744.77
FATR 2.5365 2.2294 2.1469 2.2609 2.564

86. FATR
2.6
2.5
2.4
2.3
2.2 FATR
2.1
2
1.9
2011 2010 2009 2008 2007
Interpretation: It is a capital intensive industry.Growth in the efficiency of
fixed asset utilization.

87. NET WORTH TURNOVER
• This ratio measures the extent of turn over or volume of gross income
generated by the net worth of a company.It is the efficiency in the
resource utilization from the angle of residual interest i.e equity share
holders
• NWTO = Net sales/Net worth
March 2011 March 2010 March 2009 March 2008 March 2007
Net sales 21167.58 18153.19 15611.92 13947.53 12169.29
Net worth 15953.27 14064.38 13735.08 12057.67 10646.58
NWTO 1.32 1.29 1.13 1.15 1.14

88. NWTO
1.35
1.3
1.25
1.2
1.15 NWTO
1.1
1.05
1
2011 2010 2009 2008 2007
Interpretation : There is an increase in the net worth turn over the years and
due to this it will play a very important role in improving the over all
profitability and financial position of the company.

89. GROSS PROFIT MARGIN
• Gross profit margin (GP %) = Gross profit * 100/ Net sales
March 2011 March 2010 March 2009 March 2008 March 2007
Gross profit 7105.31 6009.43 4840.22 4599.33 3953.13
Net sales 21167.58 18153.19 15611.92 13947.53 12169.29
GP margin 33.56 33.10 31.00 32.97 32.48

90. GP MARGIN
34
33.5
33
32.5
32
31.5 GP MARGIN
31
30.5
30
29.5
2011 2010 2009 2008 2007
Interpretation : The gross profit margin of the company has rised from 2007 but it is
less if in comparison with the rise in net sales.These may be due to various reasons.

91. RATIO OF INDIVIDUAL COST AND
EXPENSES TO SALES
• Raw materials consumed (%) = raw materials consumed * 100/ Net sales
March March March March March
2011 2010 2009 2008 2007
Net sales 21167.58 18153.19 15611.92 13947.53 12169.29
Raw 8126.50 7007.26 6446.78 6016.70 5276.53
material
Raw 38.39 38.6 41.29 43.13 43.35
material
consumed

92. Raw material consumed
44
43
42
41
40
39 Raw material consumed
38
37
36
35
2011 2010 2009 2008 2007
Interpretation : There is a decline in the ratio as compared to 2007 which
suggest that the consumption of raw material has decreased over a period of
time.

93. OTHER INCOME TO PBT
• Other income to PBT (%) = Other income*100/PBT
March 2011 March 2010 March 2009 March 2008 March 2007
Other income 818.84 614.74 534.93 610.90 360.76
PBT 7268.16 6015.31 4825.74 4571.77 4049.06
Ratio 11.26 10.21 11.1 13.36 8.90

94. other income to pbt
16
14
12
10
8
other income to pbt
6
4
2
0
2011 2010 2009 2008 2007
Interpretation : The ratio of other income to PBT has rised in the current year.The
analysis helps in knowing that what is the quality of income.

95. P/E RATIO
• It measures as to how many times an equity share is priced in the stock market in
relation to its EPS.
P/E = market price of equity share/EPS
March 2011 March 2010 March 2009 March 2008 March 2007
Mkt price of 181.45 131.58 92.4 103.18 75.20
equity shares
EPS 6.44 10.63 8.64 8.27 7.37
P/E 28.17 13.15 10.69 12.4 10.9

96. P/E
30
25
20
15
P/E
10
5
0
2011 2010 2009 2008 2007
Interpretation : Drastic rise in the P/E ratio as compared to previous years.This is
mainly due to rise in the closing price of 3/2011 in the BSE

97. MARKET PRICE TO NAV
• Market price to NAV = market price of equity share/NAV
March 2011 March 2010 March 2009 March 2008 March 2007
Closing mkt 181.45 131.58 92.4 103.18 75.20
price
NAV 20.61 36.83 36.39 31.99 28.29
Ratio 8.8 3.57 2.53 3.22 2.65

98. Mkt price to NAV
10
9
8
7
6
5 Mkt price to NAV
4
3
2
1
0
2011 2010 2009 2008 2007
Interpretation : This ratio gives company the opportunity to the company to buy back its
own shares.There is a huge rise as compared to previous years in 2011.This are good signs for
the company.

99. MARKET CAPITALIZATION
• It measures the total market value of the number of equity shares of a company
outstanding.
• Market capitalization = No of equity shares O/S * Market price
March 2011 March 2010 March 2009 March 2008 March 2007
Closing mkt 181.45 131.58 92.4 103.18 75.20
price
Equity shares 773.81 381.82 377.74 376.86 376.22
Market cap 140407.82 50239.87 34903.1 38884.4 28291.7

100. market cap
160000
140000
120000
100000
80000
market cap
60000
40000
20000
0
2011 2010 2009 2008 2007

101. CASH FLOW STATEMENT
ANALYSIS

102. Cash Flow From Operating Activity
• Cash outflow of ITC Ltd during 2007-2008 had been
contributed by operating activities.
• As comparison of 2007-08 cash is inflow in 2009-10.
• Here in 2008 depreciation is less as compared to 2009 means
company production is less than 2009 because depreciation is
more means more machine used. Here in 2009 depreciation is
more as compared to 2008 means company produce more
goods in 2009 as compared to 2008.
• In 2009 highest depreciation means machine is used for the
production and highest production is done.

103. CONT…
• Here interest and finance charges is more as compared to
2008 in 2009 means more cash outflow in 2008 as compared
2009. In 2008 financing charges and interest is more than the
2009 means more cash inflow in 2008.
• Profit on sale of current investment is lower in 2008 than
2009. Inventories are raw material and finished good for the
company. In 2008 it is more as compared to 2009.
• Sundry debtors increase in 2008 compared to all years, its
good sign of company in 2008, means company has more
credit.
• Overall operating activities in 2009 is bad and in 2008, it is
favorable cash position so company has to improve its
condition for future growth after 2009.

104. Cash Flow From Investing Activity
• This indicates ITC is purchasing more fixed asset in 2008 It is
an indication of not expanding business. Fixed assets
are income producing assets, which are expected to produce
higher future revenues. It try to be stable
• In 2009 company sold fixed asset it shows company is in
decline position.
• Purchase of long term investment is higer in 2009 as
compared to 2009 and current investment also hiher than
2008.

105. Cash Flow From Financial Activity
• Here in 2008 and 2009 issued share capital means higher
valuation in capital market and purchase its own share so if
market increase they get profit from that.
• Repayment long term borrowing loans is less in 2008 as
compared to 2009 means less payment done in 2009 as
compared to 2008.
• Here interest paid on loans is less in 2008 as compared to
2009 means company paid less money in 2009 as compared
2008.
• In these years company financial position is not good but
compare to 2008 it increase. In 2009 cash inflow is good and it
is in favorable position.

106. CONCLUSION
• From analysis of profit and loss and balance sheet
of the company it is evident that the company
has gained profit and its growth is increasing and
net profit remains stable for 5 year.
• We can observe that company is in stable
position as its liabilities decreases, and against it
sales turnover and profit increases. So if company
continues with the same position in near future it
may not go for insolvency.

107. •