Introduction:

It is mandatory for companies to report the progress of each segment as per

AS-17 issued by the Council of The Institute of Chartered Accountants of India

since April 1, 2001. It ensures full disclosure about the revenue from each
segment, the profit from each segment and the amount of capital allocated to each
segment. These reports are on quarterly, half yearly and annual basis.

Thus, every segment gets full attention of the management and the

shareholders also come to know the financial position of each segment. It is,

required for true and fair disclosure as well

Objectives:

To Analysis the performance of each segment of ITC Ltd

To study whether the contribution of various segments of ITC Limited

with respect to Revenue, Profit and Capital Employed

To know as to which operation segment is performing best in terms of

Return on Investment.

Tools of Analysis:

1. Common Size Statement

2. Ratios

Source Material:

Audited Financial Results of ITC Limited the Website of the

Company as on www.itcportal.com
ITC limited:

ITC Limited is an Indian company headquartered in Kolkata, West Bengal. ITC has a

diversified presence across industries such
as cigarettes, FMCG, hotels, packaging, paperboards and specialty papers
and agribusiness. The company has a total of 13 businesses in 5 segments. Also there
are 90 countries where ITC exports its products. Its products are available in 6 million
retail outlets.

Established in 1910 as the Imperial Tobacco Company of India Limited, the company

was renamed as the India Tobacco Company Limited in 1970 and later to I.T.C.
Limited in 1974. The company now stands renamed to ITC Limited, where "ITC" today
is no longer an acronym or an initialised form. The company completed 100 years in
2010 and as of 2019–20, had an annual turnover of US$10.74 billion and a market
capitalisation of US$35 billion.
About the company:

Type Public

BSE: 500875
Traded as
NSE: ITC

BSE SENSEX constituent

NSE NIFTY 50 constituent

ISIN INE154A01025

Industry Conglomerate

Predecessor W.D. & H.O. Wills

Founded 24 August 1910; 111 years ago[1][2]

Headquarters Virginia House, Kolkata,

West Bengal, India[3]

Area served Indian subcontinent

Gulf countries

Key people Sanjiv Puri

(Chairman & MD)

Products Consumer goods

Cigarettes

Apparel

Education

Hotels and Resorts

Paperboards & Specialty papers

Packaging

Agribusiness

Information technology

₹74,979 crore (US$11 billion) (2020)[4]

Revenue

Operating income ₹20,081 crore (US$2.8 billion) (2020)[4]

Net income ₹13,032 crore (US$1.8 billion) (2020)[4]

 ₹77,367 crore (US$11 billion) (2020)[4]
Total assets

₹62,021 crore (US$8.7 billion) (2020)[4]

Total equity

Number of employees 36,500 (2021)[4]

Subsidiaries ITC Hotels

ITC Paperboards and Specialty Papers Division

ITC Infotech

Sunrise Foods

Website www.itcportal.com

About the segment:

It ensures full disclosure about the revenue from each segment, the profit From each
segment and the amount of capital allocated to each segment. Some reports are prepared after the
analysis of each segment from the collected data. The segment taken under study is taken as of
quarterly ended 31.12.2020

Analysis of the Segment Performance of ITC Company:

 Paperboard , Paper &
Segment FMCG Hotel Agribusiness Packaging Total revenue

Revenue 8,96.25 81.96 2,985.26 1,458.67 13,522.14

Profit 3,497.46 184.9 256.06 330.28 4,268.70

Assets 17,614.31 6,537.10 3,656.28 7,259.93 35,067.62

Liabilities 6,636.79 772.35 980.07 968.49 9,357.70

Capital
Employed 10,977.52 5,764.75 2,676.21 6,291.44 25,709.92

Comparison of Revenue of Each Sectors:

Comparison of Revenue from operation of each segment of ITC Company

with Total Revenue for the year ended 31st March 2020

Percentage of Revenue = Segment Revenue x 100

Total revenue

FMCG = 8,996.25 x 100

13,442.14

= 66.53 %

Hotel = 81.96 x 100

13,442.14

= 0.60%

Agribusiness = 2,985.26 x 100

13,442.14

= 22.08%

Paperboard , Paper & Packaging = 1,458.67 x 100

13,442.14

= 10.79 %

Calculation of Degree of Each Segment:

Degree of Revenue = Segment Revenue x 360

Total revenue

FMCG = 8,996.25 x 360

13,442.14

= 239.51

Hotel = 81.96 x 360

13,442.14

= 2.18

Agribusiness = 2,985.26 x 360

13,442.14

= 79.48

Paperboard , Paper & Packaging = 1,458.67 x 360

13,442.14

= 38.83

Common Size Statement showing Inter segment

Comparison of Revenue:
 Paperboard ,
Paper &
Segment FMCG Hotel Agribusiness Packaging

Revenue 8,996.25 81.96 2,985.26 1,458.67

% 66.53 % 0.60% 22.08% 10.79 %

Degree 239.51 2.18 79.48 38.83

Segment Revenue

FMCG
Hotel
Agribusiness
Paperboard , Paper & Packaging
Comparison of Profit of Each Sectors:

Comparison of Revenue from operation of each segment of ITC Company:

with Total Revenue for the year ended 31st March 2020

Percentage of Revenue = Segment Profit x 100

Total Profit

FMCG = 3,497.46 x 360

4,268.70

= 81.93 %

Hotel = 184.9 x 360

4,268.70

= 4.33 %

Agribusiness = 256.06 x 360

4,268.70

= 5.99 %

Paperboard , Paper & Packaging = 330.25 x 360

4,268.70

= 7.73 %

Calculation of Degree of Each Segment:

Degree of Revenue = Segment Ptofit x 360

Total Profit

FMCG = 3,497.46 x 100

4,268.70

= 294.96

Hotel = 184.9 x 100

4,268.70

= 15.59

Agribusiness = 256.06 x 100

4,268.70

= 21.59

Paperboard , Paper & Packaging = 330.25 x 100

4,268.70

= 27.85

Calculation of Degree of Each Segment:

Degree of Revenue = Segment Ptofit x 360

Total Profit
FMCG = 3,497.46 x 100

4,268.70

= 294.96

Hotel = 184.9 x 100

4,268.70

= 15.59

Agribusiness = 256.06 x 100

4,268.70

= 21.59

Paperboard , Paper & Packaging = 330.25 x 100

4,268.70

= 27.85
Segment Profit

FMCG
Hotel
Agribusiness
Paperboard , Paper & Packaging
Comparison of Capital Employed of Each Sectors

Comparison of Revenue from operation of each segment of ITC Company:

with Total Revenue for the year ended 31st March 2020

Percentage of Revenue = Segment Capital Employed x 100

Total Capital Employed

FMCG = 10,977.52 x 100

25,709.92

= 42.69 %

Hotel = 5,764.75 x 100

25,709.92

= 22.42 %

Agribusiness = 2,676.21 x 100

25,709.92

= 10.41 %

Paperboard , Paper & Packaging = 6,291.44 x 100

25,709.92

= 24.47 %

Calculation of Degree of Each Segment:

Degree of Revenue = Segment Revenue x 360

Total revenue

FMCG = 10,977.52 x 360

25,709.92

= 153.71

Hotel = 5,764.75 x 360

25,709.92

= 80.72

Agribusiness = 2,676.21 x 360

25,709.92

= 37.47

Paperboard , Paper & Packaging = 6,291.44 x 360

25,709.92

= 88.09

Common Size Statement showing Inter

segment Comparison of Capital Employed:

 Paperboard , Paper
Segment FMCG Hotel Agribusiness & Packaging

Capital
Employed 10,977.52 5,764.75 2,676.21 6,291.44

% 42.69 % 22.42 % 10.41 % 24.47 %

Degree 153.71 80.72 37.47 88.09

 Segment Capital Employed

FMCG
Hotel
Agribusiness
Paperboard , Paper & Packaging

Comparison of Return on Investment of Each

 Sector:

Paperboard , Paper
Segment FMCG Hotel Agribusiness & Packaging

Profit 3,497.46 184.9 256.06 330.28

Capital
Employed 10,977.52 5,764.75 2,676.21 6,291.44

Return on Investment = Profit before interest tax and Dividend x 100

Capital Employed

Return on Investment:

FMCG = 3,497.46 x 100

 10,977.52

= 31.86 %

Hotel = 184.9 x 100

5,764.75

= 3.21 %

Agribusiness = 256.06 x 100

2,676.21

= 9.57 %

Paperboard , Paper & Packaging = 330.28 x 100

6,291.44

= 5.25 %

Paperboard , Paper &

Segment FMCG Hotel Agribusiness Packaging

Profit 3,497.46 184.9 256.06 330.28

Capital
Employed 10,977.52 5,764.75 2,676.21 6,291.44

% 31.86 % 3.21 % 9.57 % 5.25 %

 Return on Investment
35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
FMCG Hotel Agribusiness Paperboard , Paper &
Packaging