Tags:
Journalism of Courage
CALCUTTA, JULY 30: The chairman of ITC Ltd, Y C Deveshwar today said the board of the company would examine the issue of share split from time to time to make the ITC scrip accessible to small shareholders who were unable to buy the shares in bulk.
Responding to some of the shareholders8217; grievances regarding non-issue of bonus shares for long, the ITC chairman said at the 88th annual general meeting of the company here that the high market price of the scrip reflected that there was no need to issue bonus shares which only meant transfer of reserves to share capital.
He said that this would help the shareholders to increase the return on networth RONW. Bonus shares used to be issued at a time when the quot;markets were imperfect,quot; Deveshwar added.
Replying to another shareholder8217;s query that RONW of ITC shares was relatively low in spite of rising profits, the ITC chairman said that this was due to the burden of Rs 1260 crore, which was not giving any returns to the company.
The money, financed throughinternal accruals and loans, was raised to disengage the parent company from the financial business, edible oils, and to meet a host of legal expenses. Deveshwar said that had the burden not been there, the RONW would have been definitely higher.
The company earlier reported a 14.01 per cent increase in net profits to Rs 193.58 crore during the quarter ended June 30, 1999 against Rs 169.79 crore in the corresponding period of 1998-99.
Board of directors of the company after a meeting to consider unaudited financial results provisional for the quarter reported that although net sales turnover declined by about three per cent to Rs 888.27 crore from Rs 915.45 crore last year, the increase in profitability was mainly due to drastic reduction in total expenditure by 13.59 per cent to Rs 544.38 crore from Rs 629.98 crore in the same quarter last year.
Other income during the quarter also declined significantly to Rs 17.56 crore from Rs 27.65 crore last year while interest payment was lower by Rs 8.22 croreat Rs 31.50 crore during the quarter.
Gross profit at Rs 329.95 crore was higher by 20.68 per cent against Rs 273.40 crore last year.
The tobacco major8217;s provision for depreciation during the quarter, however, increased to Rs 29.98 crore from Rs 22.48 crore while provision for taxation of Rs 106.39 crore was 31.14 per cent higher compared to last year8217;s provision in the same quarter.
Gross sales turnover during the quarter was Rs 1917.85 crore, including Rs 1029.58 crore, paid as excise duties whereas the excise issues disputed by the company has not been taken into account during the quarter. In spite of better results, the share prices of ITC dropped by Rs 14.90 to Rs 992.10 on BSE.
