How to Read an Annual Report

An annual report brings together a company's business review, governance reports and audited financial statements for one year. It tells you what the business did, what it owns and owes, how cash moved, and what is still uncertain.

Get it from an official source. ITC filed its Report and Accounts 2026 with NSE and BSE on 26 June 2026, together with the notice of its 115th AGM. The NSE copy is a 14.00 MB PDF, sent under Regulations 30 and 34 of SEBI's listing rules (LODR) with a covering letter from R. K. Singhi, Executive Vice President and Company Secretary. ITC's own investor page, itcportal.com, also has the report split into section PDFs.

Check that you have the right document. The legal entity is ITC Limited, ISIN INE154A01025, NSE code ITC, BSE code 500875. The year is the one ended 31 March 2026, also called FY2025-26. The NSE list also shows the FY2024-25 report, filed on 27 June 2025. That is an older report, not a correction. A news story or forwarded extract can help you find a number, but check it against the full filed report.

Indian companies usually report from April to March, but read the dates rather than assume them; companies elsewhere use other years. An annual report is not the same as the "annual return", which is a separate legal filing. In the US, the regulatory annual filing is Form 10-K, which can differ from the glossy report sent to shareholders.

You do not have to read a long report from the first page to the last. Start with a question, such as "what does this business sell, and does it collect its money?", then use the contents page to jump to the parts that answer it.

ITC's contents show the usual parts. The Board's Report and Management Discussion and Analysis (MD&A) starts on printed p.38. The standalone Balance Sheet is on p.130, the Statement of Profit and Loss on p.131, the Statement of Changes in Equity on pp.132-133 and the Statement of Cash Flows on pp.134-135. The notes start on p.136 and run from note 1 to note 32. The Independent Auditor's Report on the standalone accounts starts on p.204. The consolidated statements start on p.225, and Ten Years at a Glance is on p.320.

Printed page numbers are not PDF page numbers. In ITC's main body, the PDF page is the printed page plus 28, because a 24-page front section (pp. i-xxiv) and other pages come first. The Business Responsibility and Sustainability Report (BRSR) has its own numbering, I to LIV. When you note a figure, record the heading as well as the page. There is no chairman's letter inside this report: it opens with a front section titled "ITC: Building a Future-Forward Enterprise for a Viksit Bharat". Chairman and Managing Director Sanjiv Puri's address, "ITC: Partnering India in its Defining Decade", was given at the 115th AGM on 23 July 2026 and filed with NSE as a separate document. Treat it as management's view, not as audited fact.

A good first route through the report is: MD&A for the story, the auditor's report for the opinion, then the balance sheet, profit and loss and cash flow, and then the notes behind any line that matters. Read a line, follow its note number, go back to management's explanation, and write down what is still unanswered. This is a suggested method, not a fixed order.

Standalone statements describe the listed company on its own. Consolidated statements describe the parent and its subsidiaries, the companies it controls, as one group. Control means power over the other company and the ability to use that power to affect its returns. It is not simply owning more than a set percentage.

ITC shows both. Standalone revenue from operations is ₹81,640.11 crore; consolidated is ₹89,913.33 crore. Standalone profit for the year is ₹20,286.42 crore; consolidated profit is ₹21,018.15 crore, of which ₹328.68 crore belongs to non-controlling interests, the outside owners of subsidiaries. Total assets are ₹88,915.86 crore standalone and ₹93,792.38 crore consolidated. Basic EPS is ₹16.20 standalone and ₹16.52 consolidated.

A group also removes sales made inside the family, so they are not counted as outside business. ITC's segment note (Note 30, pp.191-192) shows the same idea inside one company: its five segments add up to ₹90,713.20 crore, less ₹9,845.71 crore of sales between segments, which gives gross revenue of ₹80,867.49 crore. Associates (where the investor has significant influence) and joint ventures (shared control) are accounted for differently again, so do not add their revenue line by line.

Stay inside one scope when you combine revenue, profit, debt and cash. Read the unit at the top of each page: ITC reports in ₹ crore, and one crore is ten million. Match the dates too. This lesson uses ITC's standalone statements unless it says consolidated.

A number means more once you know the business behind it. Find out what is sold, who pays, what the main costs are, and which assets are needed to make it. The MD&A and the segment note are the places to look.

A segment is a part of the business that is reported separately. ITC reports five (Note 30, pp.191-192). Segment revenue before removing sales between segments: FMCG-Cigarettes ₹37,099.65 crore, FMCG-Others ₹24,209.75 crore, Agri Business ₹20,296.40 crore (of which ₹7,999.92 crore was sold to other ITC segments), Paperboards, Paper & Packaging ₹8,765.61 crore and Others ₹341.79 crore.

A revenue share is not a profit share. Cigarettes are 40.9% of that ₹90,713.20 crore segment revenue (derived), but ₹21,051.12 crore of the ₹25,138.86 crore segment results, or 83.7% (derived). FMCG-Others earns 26.7% of segment revenue but 7.2% of segment results (derived). Segment results are a measure the company defines; they are not the same as profit after tax, and some costs are not allocated to any segment.

Use the MD&A to find management's reason for each change, then look for evidence in the statements. ITC's MD&A reports gross revenue of ₹80,867.49 crore, up 10.1%, and EBITDA of ₹25,208.22 crore, up 4.9%. It explains a big change in tax: from 1 February 2026, GST on cigarettes went from 28% of the transaction value to 40% of the retail sale price, and excise duty was raised (p.44). You can see it in the accounts: excise duty was ₹9,656.33 crore, against ₹4,912.55 crore the year before. Plans and outlooks in the MD&A are expectations, not promised results.

The profit and loss statement shows what was earned over the year. The balance sheet shows what the company owns and owes on one date. The cash flow statement shows how cash came in and went out over the year. The statement of changes in equity explains how the owners' book value moved from one balance sheet to the next.

Assets are resources the business controls. Liabilities are amounts it owes. Equity is what is left for the owners after liabilities are taken from assets. Profit is income less expenses under the accounting rules. None of these is the same as money in the bank.

ITC's three statements tie together exactly. Profit for the year was ₹20,286.42 crore. After other comprehensive income of minus ₹809.96 crore, total comprehensive income was ₹19,476.46 crore. Opening equity of ₹67,893.71 crore, plus that ₹19,476.46 crore, plus ₹403.31 crore of share premium and ₹1.54 crore of share capital from employee stock options, plus ₹135.33 crore of share-based payments, less ₹17,967.58 crore of dividends and two small items of ₹0.44 crore and ₹13.72 crore, gives ₹69,928.61 crore (derived). That is exactly the total equity on the balance sheet.

Cash ties too. Operating cash of ₹17,094.97 crore, less ₹1,538.38 crore used in investing and ₹15,694.23 crore used in financing, is a fall of ₹137.64 crore. Opening cash of ₹222.41 crore less ₹137.64 crore gives closing cash of ₹84.77 crore. And the dividends in the equity statement, ₹9,823.58 crore (final for 2024-25, ₹7.85 a share) plus ₹8,144.00 crore (interim for 2025-26, ₹6.50 a share), add up to ₹17,967.58 crore, the same as "Dividend paid" in the cash flow (derived). Other comprehensive income is a set of gains and losses kept outside profit; it still changes equity.

Revenue is income from the normal business, recorded under the accounting rules. Expenses are the costs that belong to the year. Net profit is what is left after all expenses, finance costs and tax. It is not the cash left after customers pay.

ITC's Statement of Profit and Loss (p.131) starts with Revenue From Operations of ₹81,640.11 crore and Other Income of ₹3,287.18 crore, for Total Income of ₹84,927.29 crore. Total expenses are ₹57,975.82 crore: cost of materials consumed ₹25,939.49 crore, purchases of stock-in-trade ₹8,791.91 crore, a ₹2,482.79 crore credit for changes in inventories (stock built up, so the year's cost is lower), excise duty ₹9,656.33 crore, employee benefits ₹3,629.28 crore, finance costs ₹69.94 crore, depreciation and amortisation ₹1,473.99 crore and other expenses ₹10,897.67 crore.

That leaves profit before exceptional items and tax of ₹26,951.47 crore. Exceptional items of minus ₹183.87 crore give profit before tax of ₹26,767.60 crore. Current tax of ₹5,822.16 crore and deferred tax of ₹659.02 crore give profit for the year of ₹20,286.42 crore. Depreciation spreads the cost of a long-lived asset over its useful life; it lowers profit without being a cash payment this year. Amortisation does the same for some intangible assets.

Read the comparison column with care. Last year's profit was ₹35,197.05 crore, but ₹15,103.76 crore of it came from the hotels business, which was demerged into ITC Hotels Ltd. Continuing profit was ₹20,093.29 crore, so this year's ₹20,286.42 crore is up about 1.0% (derived), not down. EBITDA means earnings before interest, tax, depreciation and amortisation: ₹26,951.47 + ₹69.94 + ₹1,473.99 − ₹3,287.18 other income = ₹25,208.22 crore (derived), which matches the MD&A. EBITDA is not cash flow, and each company defines it, so read the definition.

Revenue recognition means deciding when a sale belongs in the accounts. A company records revenue when it meets its promise to the customer and control of the goods passes, not simply when money arrives. So the steps are: goods delivered, revenue recorded, the unpaid amount held as a trade receivable, then cash collected.

When the customer pays later, cash goes up and the receivable goes down. That is not a second sale. Cash received before delivery works the other way: it is held as an advance until the goods are delivered.

ITC's trade receivables were ₹2,925.60 crore on 31 March 2026, against ₹3,910.79 crore a year earlier (Balance Sheet p.130, Note 10 p.163). Note 10 shows their age: ₹1,511.50 crore not yet due and ₹1,369.14 crore overdue by less than six months. A further ₹150.96 crore is credit-impaired and fully provided for, so it adds nothing to the total. On average receivables, ITC waits about 15 days to collect (₹3,418.20 crore ÷ ₹81,640.11 crore × 365, derived). The steps above are the general rule; the amounts are ITC's year-end balances.

This is the exact risk ITC's auditor chose as its one Key Audit Matter: that revenue could be recorded before control passes to the customer (Auditor's Report p.204; Notes 1, 22A and 22B). Some contracts are recognised over time and others at a point in time, so read the company's own policy in Note 1, and check credit terms, returns and allowances for bad debts.

A balance sheet always balances: assets = liabilities + equity. It shows book values under the accounting rules on one date. It is not the market value of the business or a guide to the share price.

ITC's Balance Sheet as at 31 March 2026 (p.130) shows total assets of ₹88,915.86 crore, up from ₹84,004.71 crore. The biggest lines are Property, Plant and Equipment (Note 3A) ₹16,501.73 crore, Capital work-in-progress (3B) ₹1,472.56 crore, Non-current Investments (4) ₹19,409.05 crore, Inventories (8) ₹17,931.90 crore, Current Investments (9) ₹19,701.54 crore, Trade receivables (10) ₹2,925.60 crore, Cash and cash equivalents (11) ₹110.02 crore and other bank balances (12) ₹2,025.50 crore. Non-current assets total ₹42,772.47 crore and current assets ₹46,143.39 crore.

On the other side, total equity is ₹69,928.61 crore: equity share capital of ₹1,252.95 crore and other equity of ₹68,675.66 crore. Current liabilities are ₹15,191.92 crore, including current borrowings of ₹2,026.22 crore (Note 18) and trade payables of ₹5,271.90 crore (₹345.97 crore to micro and small enterprises and ₹4,925.93 crore to others). The remaining ₹3,795.33 crore is non-current liabilities, including deferred tax of ₹3,065.25 crore. Together: ₹69,928.61 + ₹15,191.92 + ₹3,795.33 = ₹88,915.86 crore. The balance sheet was signed in Kolkata on 21 May 2026.

Current items are tied to the normal operating cycle or are due within about a year; non-current items are longer term. Check limits on cash, whether receivables will be collected, how inventory is valued, and whether any asset has been written down. Book equity of ₹69,928.61 crore is not ITC's market value: its market capitalisation on 31 March 2026 was ₹3,60,473 crore (Shareholder Information p.30). A balanced sheet on its own says nothing about whether the shares are a good buy.

The cash flow statement groups cash into three kinds. Operating cash comes from running the business. Investing cash is spent on, or received from, long-term assets and investments. Financing cash is raised from, or returned to, lenders and owners.

ITC's Statement of Cash Flows (pp.134-135) uses the indirect method: it starts from profit and adjusts it. Net cash from operating activities was ₹17,094.97 crore. Investing used ₹1,538.38 crore; its lines include purchase of property, plant and equipment and intangibles of ₹2,069.30 crore, sale of such assets ₹49.26 crore, dividends received ₹972.16 crore and interest received ₹856.51 crore. Financing used ₹15,694.23 crore; its lines include dividends paid of ₹17,967.58 crore, new current borrowing of ₹2,000.00 crore and interest paid of ₹49.94 crore.

The three add up to a net fall of ₹137.64 crore, taking cash from ₹222.41 crore to ₹84.77 crore. Why is closing cash ₹84.77 crore when the balance sheet shows ₹110.02 crore? Note 2 to the cash flow (p.135) explains: ₹110.02 crore of cash and cash equivalents, less ₹25.22 crore of cash credit (an overdraft-like loan shown in Note 18), less ₹0.03 crore of unrealised currency gains, gives ₹84.77 crore.

Where items go is partly a choice within the rules. ITC shows interest paid under financing, and interest and dividends received under investing. Another company, or one using different accounting rules, may place them elsewhere, so read each company's own statement before comparing. Cash equivalents are short-term, very liquid investments counted with cash; check the reconciliation note.

Profit and operating cash flow answer different questions. A gap between them needs an explanation, not an instant verdict. Compare several years on the same basis and use the reconciliation to find the cause.

ITC's standalone profit after tax, excluding the demerged hotels business, was ₹19,910 crore in FY24, ₹20,093 crore in FY25 and ₹20,286 crore in FY26 (Ten Years at a Glance, p.320). FY26 operating cash flow was ₹17,094.97 crore, about 84.3% of profit (derived). The FY25 operating cash figure of ₹16,753.90 crore still includes the hotels business, so it is not a like-for-like comparison.

The cash flow statement shows the steps from profit to cash. Profit before tax of ₹26,767.60 crore, plus depreciation ₹1,473.99 crore and finance costs ₹69.94 crore, less interest income ₹1,401.07 crore and dividend income ₹972.16 crore (they are shown under investing), and less ₹326.46 crore of other adjustments (derived), gives operating profit before working capital changes of ₹25,611.84 crore. Lower receivables and other assets added ₹662.41 crore; more inventory took ₹3,157.86 crore; payables, other liabilities and provisions took ₹226.08 crore. Cash generated from operations was ₹22,890.31 crore; income tax paid of ₹5,795.34 crore leaves ₹17,094.97 crore. ITC's CSR spend of ₹489.57 crore is inside this operating cash.

Weak cash flow can come from growth, credit sales, stock building or tax payments. Strong cash flow can come from collections or from paying suppliers more slowly. Neither proves on its own that a business is healthy or in trouble. Free cash flow is often described as operating cash less capital spending, but definitions vary, so check how it is calculated before you compare companies.

Working capital can mean current assets less current liabilities. For a closer look at operations, people often use a narrower measure: trade receivables plus inventory, less trade payables. Always say which one you use.

Money moves round a cycle: cash buys materials, materials become stock, stock is sold on credit, and credit is collected as cash. Supplier credit delays part of the cash going out, but it is still money owed.

ITC's balances on 31 March 2026 against a year earlier: inventories ₹17,931.90 crore against ₹15,061.01 crore, up ₹2,870.89 crore (derived); trade receivables ₹2,925.60 crore against ₹3,910.79 crore, down ₹985.19 crore; trade payables ₹5,271.90 crore against ₹4,489.93 crore, up ₹781.97 crore (derived). On the narrower measure, operating working capital was ₹2,925.60 + ₹17,931.90 − ₹5,271.90 = ₹15,585.60 crore (derived). The inventory note shows finished goods rose from ₹2,363.72 crore to ₹4,930.52 crore.

The cash flow line for inventories is ₹3,157.86 crore, not ₹2,870.89 crore. The cash flow statement adjusts the balances for other items, so the two need not match exactly; the notes explain the difference. Receivable days are an estimate, not the delay for every customer, and using total revenue when credit sales are not given is an approximation you should label. More stock can mean growth, a season, or goods that are not selling; read the inventory and ageing notes before choosing a reason.

Debt analysis asks four things: how much is owed, when it is due, what it costs, and what could pay it. One ratio does not replace a repayment schedule or a look at cash.

ITC's borrowings on 31 March 2026 were ₹2,026.22 crore, shown under current liabilities (Note 18), against just ₹1.76 crore a year earlier. The cash flow shows ₹2,000.00 crore of new current borrowing during the year, and Note 18 includes ₹25.22 crore of cash credit. These borrowings are about 2.9% of total equity (derived). Read the borrowing note for security, conditions agreed with lenders (covenants) and repayment terms.

Finance costs were ₹69.94 crore, up from ₹36.35 crore. Interest coverage compares earnings with interest. Using profit before exceptional items and tax plus finance costs, ₹27,021.41 crore ÷ ₹69.94 crore is about 386 times (derived). That is far above what most companies show. It still compares earnings with interest only; it does not prove there is cash to repay the loan itself.

There is no single coverage number that makes every industry safe. Net debt, borrowings less cash, depends on how each company treats leases, deposits and short-term investments, so read the definition. Guarantees given for others can add exposure; look for them in the notes.

Notes explain what a line contains, how it was measured and what judgement went into it. The number in brackets beside a line on the statement is its note. Use it to find the breakdown instead of relying on the headline.

Take Inventories, ₹17,931.90 crore, Note 8 (p.155). It splits into raw materials ₹10,644.31 crore, work-in-progress ₹411.26 crore, finished goods ₹4,930.52 crore, stock-in-trade ₹1,216.47 crore, stores and spares ₹617.97 crore and intermediates ₹111.37 crore. Inventory is valued at the lower of cost and net realisable value; write-downs to that value were ₹351.44 crore, and ₹1,315.29 crore of stock is expected to be used after more than twelve months. Note 13 (p.165) shows 12,52,94,68,231 equity shares in issue, after 1,53,48,450 new shares were issued when employees exercised stock options.

Accounting policies, in Note 1, describe the methods used. Estimates apply those methods to uncertain facts, such as how long a machine will last, whether customers will pay, or whether an investment can be recovered. Impairment means cutting an asset's book value when it is no longer expected to recover that amount. Property, Plant and Equipment (Note 3A, ₹16,501.73 crore) depends on useful-life estimates, so read the policy before you read the trend.

Compare policies and estimates with last year, and look for restatements. A restatement changes figures already reported; a reclassification moves items between headings. Neither proves wrongdoing, but both can change a trend. Use the restated comparative figures and read the reason given.

An audit gives reasonable assurance that the financial statements are free of material misstatement under the accounting rules. Material means big enough to change a reader's decision. Reasonable assurance is high assurance, but it is not a guarantee, and it is not an opinion on the shares.

There are four kinds of opinion. An unmodified opinion means the statements are fairly presented in all material respects. A qualified opinion means there is a material, but not widespread, misstatement or a gap in evidence. An adverse opinion means the misstatement is material and widespread. A disclaimer means the auditor could not get enough evidence to form an opinion at all.

ITC's standalone accounts were audited by S R B C & CO LLP (firm registration 324982E/E300003), signed by partner Arvind Sethi in Kolkata on 21 May 2026, the same day the Board approved the results (p.204). The opinion is unmodified: the statements give a "true and fair view". There is one Key Audit Matter, revenue recognition, and the auditor states there are no others. There is no Emphasis of Matter paragraph and no going-concern section. On the other information in the report, the auditor has "nothing to report".

Read the basis for the opinion, not just the label. Key Audit Matters are the areas that needed most attention in this audit; they are not separate opinions or findings of wrongdoing. An Emphasis of Matter points to something already disclosed without changing the opinion. A serious doubt about whether the company can keep operating (going concern) gets its own section. The auditor's opinion covers the financial statements, not every claim in the narrative. SRBC was re-appointed for five years, to the end of the 118th AGM, covering FY2028-29 (p.110).

A provision is a liability already recorded in the balance sheet for an obligation whose timing or amount is uncertain. A contingent liability is not recorded: it is a possible obligation, or a present one that does not meet the rules for recording. It is disclosed in the notes unless the chance of paying is remote.

ITC's Note 29(v) (p.177) lists claims against the company not acknowledged as debts of ₹1,008.67 crore, up from ₹917.25 crore. That includes ₹316.00 crore of interest. By type: indirect taxes ₹647.83 crore, local authority taxes and cess ₹306.89 crore, third-party contract claims ₹40.50 crore and others ₹13.45 crore. The company says it is "not practicable" to estimate when they will be settled.

For scale, ₹1,008.67 crore is about 1.4% of ITC's ₹69,928.61 crore total equity (derived). That shows size only. It says nothing about whether, when or how much will be paid. Read the nature of each claim, its legal stage, and how it changed from last year.

Do not add every disputed amount as certain debt, and do not ignore a claim because the percentage is small. Commitments are different again: ITC's capital commitments, money it has agreed to spend on assets, were ₹1,480.38 crore against ₹912.50 crore. That is a plan to spend, not a debt. Guarantees may already be recorded under other rules, so follow the notes rather than assume.

A related party is a person or company with a relationship covered by the disclosure rules: for example a parent, a subsidiary, a director or key manager, or companies linked to them. Use the report's own list of relationships rather than guessing from familiar names.

ITC's Note 31 (pp.193-196) says ITC is an associate of British American Tobacco p.l.c. Among the year's transactions: sales of goods to British American Tobacco (GLP) Ltd of ₹1,587.03 crore; purchases from ITC Filtrona Ltd of ₹716.67 crore; dividends paid to Tobacco Manufacturers (India) Ltd of ₹3,197.89 crore and to Myddleton Investment Co. of ₹697.86 crore; and dividends received from Surya Nepal of ₹462.77 crore and ITC Infotech of ₹374.76 crore.

Many related-party deals are ordinary business. A relationship does not make a deal improper, and disclosure does not prove its terms are fair. ITC's note states all transactions were in the ordinary course of business and at arm's length. Ask who benefits, what was exchanged, who set the price, what is still owed at year-end, and what approvals are disclosed.

Read amounts for the year separately from balances at year-end: a purchase during the year is not the same as an unpaid balance on 31 March. Check the scope again. Deals between ITC and its subsidiaries appear in the standalone accounts but are removed in the consolidated accounts; deals with companies outside the group stay in both.

A ratio relates one number to another. It sums up a question, but it does not answer it without the definitions, the business and comparable years. Banks and insurers need different ratios from a consumer goods company like ITC.

On ITC's standalone FY26 accounts: net profit margin is ₹20,286.42 crore ÷ ₹81,640.11 crore revenue from operations = 24.8% (derived). Return on equity (ROE) uses average equity: (₹67,893.71 + ₹69,928.61) ÷ 2 = ₹68,911.16 crore, so ROE is ₹20,286.42 ÷ ₹68,911.16 = 29.4% (derived). A high payout of dividends keeps equity smaller, which lifts ROE.

Dividends paid of ₹17,967.58 crore were 88.6% of profit and 105.1% of operating cash flow (derived): ITC paid out slightly more than its operating cash for the year. Basic earnings per share (EPS), as reported, is ₹16.20 on a face value of ₹1; diluted EPS is ₹16.19. EPS uses the weighted average number of shares in issue during the year, not always the closing count. Diluted EPS also counts shares that could be issued, such as employee stock options.

Keep inputs on one scope. Consolidated basic EPS is ₹16.52, worked out on the profit that belongs to ITC's own shareholders: ₹20,689.47 crore, which is group profit of ₹21,018.15 crore less ₹328.68 crore for non-controlling interests (p.227). Dividing consolidated profit by a standalone figure, or the other way round, gives a wrong number. EPS is not a dividend, not money paid to each holder and not a share price, and no ratio is a pass-or-fail test on its own.

Corporate governance is how a company is directed, watched and held to account. Read who owns the shares, how the board and its committees work, how pay is set and what controls are in place, alongside the accounts.

ITC has no promoter group: "Shareholding of Promoters" is nil (Note 13, p.165). On 31 March 2026 it had 42,44,257 shareholders (Shareholder Information p.31). Financial institutions, insurers, mutual funds and banks held 49.14%; foreign companies 22.91%; public and others 14.04%; foreign portfolio investors 11.92%; bodies corporate 1.01%; non-resident Indians 0.96%; and shares behind GDRs 0.02%. Holders above 5% were Tobacco Manufacturers (India) Ltd with 17.79% (20.31% a year earlier), LIC with 15.83% and SUUTI (the Specified Undertaking of the Unit Trust of India) with 7.78%. 99.72% of shares are held in demat form. Holders of up to 5,000 shares are 98.75% of all holders but own 5.59% of the shares.

Capital allocation means how management uses the money: reinvesting, buying businesses, repaying debt, paying dividends or buying back shares. In FY26, ITC paid ₹2,069.30 crore for new property, plant, equipment and intangibles, paid ₹17,967.58 crore in dividends and took ₹2,000.00 crore of new current borrowing. Dividends for FY26 total ₹14.50 a share (₹6.50 interim plus ₹8.00 final), against ₹14.35 for FY25 (p.32). The ₹8.00 final dividend (₹10,023.57 crore in total) is not booked as a liability in these accounts, because shareholders approve it only at the AGM; the report sets its payment for 24 to 29 July 2026 (p.30).

Where a company has promoters, check whether they have pledged shares as security for loans, using the latest exchange filings rather than an old report. Read the dates and reasons for auditor appointments, rotation and resignations: a required rotation is not the same as an unexplained early exit. None of these on its own settles whether a share is worth buying.

An annual report is history with a date on it. ITC's balance sheet is dated 31 March 2026; the Board approved the accounts and the auditor signed on 21 May 2026; the report was filed on 26 June 2026; and the 115th AGM on 23 July 2026 passed all eight resolutions, including adopting the accounts and the dividends. Today, 21 October 2026, that balance sheet is about seven months old.

Things that happen after the balance sheet date can need disclosure, and later news appears in quarterly results and exchange announcements, not in the old report. The share price also moves on: ITC's year low in FY26 was ₹287.00 on 30 March 2026, its past-year low was ₹253.15 on 8 October 2026, and it closed at ₹260.80 on 19 October 2026 (20 October was an NSE holiday). The report cannot tell you about any of that.

Sustainability information covers environmental, social and governance measures. India's Business Responsibility and Sustainability Report (BRSR) has its own format and rules on which companies must file it. ITC's BRSR for FY2025-26 is prepared on a standalone basis, and KPMG Assurance and Consulting Services LLP gave reasonable assurance on its BRSR Core indicators. Read each measure's boundary, definition and assurance scope. A target says what a company intends; it does not prove it was achieved.

Finally, accounts are not a valuation. Even clean, well-audited statements cannot tell you on their own whether today's share price is attractive, whether a share suits you, or what future results will be. Pair the report with current information and your own research.

Turn your reading into a short evidence record. For each question, note the report year, the scope, the unit, the statement line and page, the note and page, the comparison figure, what management says, what you infer, and what is still missing. Keep facts, management's view and your own inference apart.

Here is one row for ITC. Question: do customers pay? Trade receivables ₹2,925.60 crore on p.130, against ₹3,910.79 crore; Note 10 on p.163 shows most are not yet due or under six months old; the auditor's one Key Audit Matter is revenue recognition (p.204). Inference: about 15 days to collect (derived). Gap: credit terms by segment are not given.

Two more rows. How much does it owe? Borrowings ₹2,026.22 crore (Note 18) against ₹1.76 crore, with finance costs of ₹69.94 crore. Did profit turn into cash? Operating cash ₹17,094.97 crore against profit of ₹20,286.42 crore (pp.131, 134-135); ₹3,157.86 crore went into inventories and ₹5,795.34 crore was paid in income tax. Gap: FY25 operating cash includes the hotels business, so the year-on-year cash trend is not like-for-like. If you cannot reconcile a figure, write down the gap instead of guessing.

Then try the same method on another report, for example Tata Consultancy Services' FY2025-26 annual report: find the consolidated balance sheet, locate trade receivables, follow its note and compare the column dates. The goal is a clear picture of how a business earns, what supports those earnings, where its obligations sit and what is still uncertain.