We have audited the accompanying standalone Ind ASfinancial statements of ITC Limited (“the Company”),which comprise the Balance Sheet as at March 31, 2025,the Statement of Profit and Loss, including OtherComprehensive Income, the Statement of Cash Flowsand the Statement of Changes in Equity for the yearthen ended, and notes to the standalone Ind AS financialstatements, including a summary of material accountingpolicies and other explanatory information.
In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandalone Ind AS financial statements give the informationrequired by the Companies Act, 2013, as amended(“the Act”) in the manner so required and give a trueand fair view in conformity with the accounting principlesgenerally accepted in India, of the state of affairs of theCompany as at March 31, 2025, its profit including othercomprehensive income, its cash flows and the changes inequity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financialstatements in accordance with the Standards on Auditing(SAs), as specified under section 143(10) of the Act.Our responsibilities under those Standards are furtherdescribed in the 'Auditor's Responsibilities for the Auditof the Standalone Ind AS Financial Statements' sectionof our report. We are independent of the Companyin accordance with the 'Code of Ethics' issued by the
Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our auditof the financial statements under the provisions of theAct and the Rules thereunder, and we have fulfilled ourother ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe thatthe audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on thestandalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professionaljudgement, were of most significance in our audit of thestandalone Ind AS financial statements for the financial yearended March 31, 2025. These matters were addressed inthe context of our audit of the standalone Ind AS financialstatements 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 auditaddressed the matter is provided in that context.
We have determined the matters described below to bethe key audit matters to be communicated in our report.We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone IndAS financial statements section of our report, including inrelation to these matters. Accordingly, our audit includedthe performance of procedures designed to respond toour assessment of the risks of material misstatement ofthe standalone Ind AS financial statements. The results ofour audit procedures, including the procedures performedto address the matters below, provide the basis for ouraudit opinion on the accompanying standalone Ind ASfinancial statements.
Key audit matters
How our audit addressed the key audit matter
Revenue recognition
Revenue from the sale of goods (hereinafter referredto as “Revenue”) is recognised when the Companyperforms its obligations to its customers and the amountof revenue can be measured reliably and recoveryof the consideration is probable. The timing of suchrecognition in case of sale of goods is when the controlover the same is transferred to the customer, which ismainly upon delivery.
The timing of revenue recognition is relevant tothe reported performance of the Company. Themanagement considers revenue as a key measure for
Our audit procedures included the following:
1 Assessed the Company's revenue recognitionaccounting policies in line with Ind AS 115 (“Revenuefrom Contracts with Customers”) and tested thereof.
1 Evaluated the integrity of the general informationand technology control environment and testing theoperating effectiveness of key IT application controlsover recognition of revenue.
1 Evaluated the design, implementation and operatingeffectiveness of Company's controls in respect ofrevenue recognition.
evaluation of performance. There is a risk of revenuebeing recorded before control is transferred.
Refer Note 1 to the Standalone Ind AS FinancialStatements - Material Accounting Policies and Note22A / 22B.
1 Tested the effectiveness of such controls overrevenue cut off at year-end.
1 On sample basis, tested supporting documentationfor sales transactions recorded during the year whichincluded sales invoices, customer contracts andshipping documents.
1 Performed an increased level of substantive testingin respect of sales transactions recorded during theperiod closer to the year end and subsequent to theyear end.
1 Compared revenue with historical trends and whereappropriate, conducted further enquiries and testing.
1 Assessed disclosures in financial statements inrespect of revenue, as specified in Ind AS 115.
Accounting for demerger of Hotels business
The Company, in the current year, has given effect tothe scheme of demerger of Hotels business (demergedundertaking) into ITC Hotels Limited (ITCHL) pursuantto the Scheme of Arrangement ('Scheme'). The Schemewas approved by the Hon'ble National CompanyLaw Tribunal, Kolkata bench vide its order datedOctober 04, 2024 and the appointed date and theeffective date of the Scheme is January 01, 2025.
By virtue of this scheme being effective in the currentyear, the said demerged undertaking has been disclosedas discontinued operations till the effective date of thedemerger.
At the appointed and effective date, the Hotels businessof the Company (along with all assets and liabilitiesthereof, excluding ITC Grand Central, Mumbai) and theinvestments held by the Company in Hospitality entitiesas defined in the Scheme were transferred to ITCHL ona going concern basis in accordance with the approvedScheme.
Demerger is a significant non-routine transactionand requires determination of fair value of demergedundertaking for the purposes of accounting asper Ind AS which involves significant judgementsand estimates which are sensitive to underlyingassumptions (forecast of future cash flows, growth rate,weighted average cost of capital, discount rates etc).These judgements / estimates could have an impacton the recognition of the amount of liability for assetsto be distributed to shareholders at fair value and theconsequential gain as recognised in the standalone IndAS financial statements.
1 Obtained and read the Scheme and final order passedby the Hon'ble National Company Law Tribunal tounderstand its key terms and conditions.
1 Evaluated the design and tested the operatingeffectiveness of the internal financial controls(including management review controls) relevantfor recording the impact of the Scheme and relateddisclosures.
1 Tested the Management's working for identificationof specific assets and liabilities of the demergedundertaking and relevant impact in the reserves asper the Scheme.
1 Assessed the appropriateness of accountingtreatment of this demerger and compared withapplicable Indian Accounting Standards (Ind AS) andthe approved accounting treatment in the Scheme.
1 Obtained the report of the management's expert fordetermination of fair value of demerged undertaking.Evaluated the competence and objectivity of themanagement's expert.
1 Involved our valuation specialist to review theappropriateness of methodology and key assumptionsconsidered by management to determine fair value ofthe demerged undertaking.
i Assessed the adequacy and appropriateness of thedisclosures made with respect to the accounting ofthe transaction as required by the applicable Ind AS.
Due to the magnitude and complexity of the transaction,and considering the assumptions and estimatesrequired to be made by the management for thepurpose of accounting and presentation / disclosuresin the standalone Ind AS financial statements, this isconsidered as a key audit matter.
Refer Note 29(x) to the standalone Ind AS financialstatements.
We have determined that there are no other key auditmatters to communicate in our report.
The Company's Board of Directors is responsible for theother information. The other information comprises theinformation included in the Annual Report, but does notinclude the standalone Ind AS financial statements andour auditor's report thereon.
Our opinion on the standalone Ind AS financial statementsdoes not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind ASfinancial statements, our responsibility is to read the otherinformation and, in doing so, consider whether such otherinformation is materially inconsistent with the standaloneInd AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated.If, based on the work we have performed, we conclude thatthere is a material misstatement of this other information,we are required to report that fact. We have nothing toreport in this regard.
Responsibilities of Management for the StandaloneInd AS Financial Statements
The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect to thepreparation of these standalone Ind AS financial statementsthat give a true and fair view of the financial position, financialperformance including other comprehensive income, cashflows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India,including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act read with the Companies(Indian Accounting Standards) Rules, 2015, as amended.This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company andfor preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies;
making judgements and estimates that are reasonable andprudent; and the design, implementation and maintenanceof adequate internal financial controls, that were operatingeffectively for ensuring the accuracy and completeness ofthe accounting records, relevant to the preparation andpresentation of the standalone Ind AS financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements,management is responsible for assessing the Company'sability to continue as a going concern, disclosing, asapplicable, matters related to going concern and using thegoing concern basis of accounting unless managementeither intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance aboutwhether the standalone Ind AS financial statements asa whole are free from material misstatement, whetherdue to fraud or error, and to issue an auditor's report thatincludes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an auditconducted in accordance with SAs will always detect amaterial misstatement when it exists. Misstatements canarise from fraud or error and are considered material if,individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financialstatements.
As part of an audit in accordance with SAs, we exerciseprofessional judgement and maintain professionalskepticism throughout the audit. We also:
• Identify and assess the risks of material misstatementof the standalone Ind AS financial statements,whether due to fraud or error, design and performaudit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriateto provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraudis higher than for one resulting from error, as fraudmay involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant tothe audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i)of the Act, we are also responsible for expressingour opinion on whether the Company has adequateinternal financial controls with reference to financialstatements in place and the operating effectiveness ofsuch controls.
• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management's useof the going concern basis of accounting and, basedon the audit evidence obtained, whether a materialuncertainty exists related to events or conditions thatmay cast significant doubt on the Company's abilityto continue as a going concern. If we conclude thata material uncertainty exists, we are required todraw attention in our auditor's report to the relateddisclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtainedup to the date of our auditor's report. However, futureevents or conditions may cause the Company to ceaseto continue as a going concern.
• Evaluate the overall presentation, structure andcontent of the standalone Ind AS financial statements,including the disclosures, and whether the standaloneInd AS financial statements represent the underlyingtransactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governancewith a statement that we have complied with relevantethical requirements regarding independence, andto communicate with them all relationships and othermatters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those chargedwith governance, we determine those matters thatwere of most significance in the audit of the standalone
Ind AS financial statements for the financial year endedMarch 31, 2025 and are therefore the key audit matters.We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated inour report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest 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 Governmentof India in terms of sub-section (11) of section 143 ofthe Act, we give in the “Annexure 1” a statement on thematters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report, tothe extent applicable, that:
(a) We have sought and obtained all the informationand explanations which to the best of our knowledgeand belief were necessary for the purposes of ouraudit;
(b) In our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books;
(c) The Balance Sheet, the Statement of Profitand Loss including the Statement of OtherComprehensive Income, the Statement of CashFlows and Statement of Changes in Equity dealtwith by this Report are in agreement with the booksof account;
(d) In our opinion, the aforesaid standalone Ind ASfinancial statements comply with the AccountingStandards specified under Section 133 of theAct, read with Companies (Indian AccountingStandards) Rules, 2015, as amended;
(e) On the basis of the written representations receivedfrom the directors as on March 31, 2025 takenon record by the Board of Directors, none of thedirectors is disqualified as on March 31, 2025 frombeing appointed as a director in terms of Section164 (2) of the Act;
(f) With respect to the adequacy of the internalfinancial controls with reference to these standaloneInd AS financial statements and the operatingeffectiveness of such controls, refer to our separateReport in “Annexure 2” to this report;
(g) In our opinion, the managerial remuneration for theyear ended March 31,2025 has been paid / providedby the Company to its directors in accordance withthe provisions of section 197 read with Schedule Vto the Act;
(h) With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014,as amended in our opinion and to the best of ourinformation and according to the explanationsgiven to us:
i. The Company has disclosed the impact ofpending litigations on its financial position in itsstandalone Ind AS financial statements - ReferNote 29(vi)(a) to the standalone Ind AS financialstatements;
ii. The Company did not have any long-termcontracts including derivative contracts forwhich there were any material foreseeablelosses;
iii. There has been no delay in transferringamounts, required to be transferred, to theInvestor Education and Protection Fund by theCompany;
iv. a) The management has represented that,
to the best of its knowledge and belief, nofunds have been advanced or loaned orinvested (either from borrowed funds orshare premium or any other sources or kindof funds) by the Company to or in any otherperson or entity, including foreign entities(“Intermediaries”), with the understanding,whether recorded in writing or otherwise,that the Intermediary shall, whether, directlyor indirectly lend or invest in other persons orentities identified in any manner whatsoeverby or on behalf of the Company (“UltimateBeneficiaries”) or provide any guarantee,security or the like on behalf of the UltimateBeneficiaries;
b) The management has represented that,to the best of its knowledge and belief, nofunds have been received by the Companyfrom any person or entity, including foreignentities (“Funding Parties”), with theunderstanding, whether recorded in writingor otherwise, that the Company shall,
whether, directly or indirectly, lend or investin other persons or entities identified in anymanner whatsoever by or on behalf of theFunding Party (“Ultimate Beneficiaries”) orprovide any guarantee, security or the likeon behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performedthat have been considered reasonable andappropriate in the circumstances, nothinghas come to our notice that has caused usto believe that the representations undersub-clause (a) and (b) contain any materialmisstatement.
v. The final dividend paid by the Company duringthe year in respect of the same declared for theprevious year is in accordance with section 123of the Act to the extent it applies to payment ofdividend.
The interim dividend declared and paid by theCompany during the year and until the date ofthis audit report is in accordance with section123 of the Act.
As stated in Note B of Statement of Changesin Equity to the standalone Ind AS financialstatements, the Board of Directors of theCompany have proposed final dividend forthe year which is subject to the approval ofthe members at the ensuing Annual GeneralMeeting. The dividend declared is in accordancewith section 123 of the Act to the extent it appliesto declaration of dividend.
vi. Based on our examination which included testchecks, the Company has used accountingsoftwares for maintaining its books of accountwhich has a feature of recording audit trail(edit log) facility and the same has operatedthroughout the year for all relevant transactionsrecorded in the softwares. Further, during thecourse of our audit we did not come across anyinstance of audit trail feature being tamperedwith. Additionally, the audit trail has beenpreserved by the Company as per the statutoryrequirements for record retention.
For S R B C & CO LLPChartered AccountantsICAI Firm Registration Number: 324982E / E300003
per Arvind SethiPartner
Membership Number: 89802
Place of Signature: Kolkata ^
Date: May 22, 2025 UDIN: 25089802BMNPUK4099