ITC second quarter net profit rises 12% to Rs 3,805 million

Mumbai: ITC has posted a 12-per cent increase in its net profit at Rs 3,805 million for the quarter ended 30 September 2002 as compared to Rs 3,392.8 million in the quarter ended 30 September 2001. The total income has increased from Rs 12,671.3 million in the quarter ended 30 September 2001 to Rs 15,196.1 million in the quarter ended 30 September 2002.

The company recently announced that it has acquired further 56,000 ordinary shares of Surya Nepal, earlier known as Surya Tobacco Company, a company incorporated under the laws of Nepal. With this acquisition, the total shareholding of the company in Surya Nepal has gone up from 49 per cent to 59 per cent. Through this acquisition, Surya Nepal has become a subsidiary of the company with effect from 20 August 2002.

ICRA has assigned a CGR2 rating to the corporate governance practices of ITC. This is on a rating scale of CGR1 to CGR6 where CGR1 denotes the highest rating. The CGR2 rating implies that in ICRA's current opinion, the rated company has adopted and follows such practices, conventions and codes as would provide its financial stakeholders a high level of assurance on the quality of corporate governance.

ICRA's opinion, however, is not a certificate of statutory compliance or a comment on the rated company's future financial performance, credit rating or stock price. This is the first corporate governance rating of its kind in the country.

ICRA's corporate governance rating (CGR) is meant to indicate the relative level to which an organisation accepts and follows the codes and guidelines of corporate governance practices. Corporate governance practices prevalent in a company reflect the distribution of rights and responsibilities among different participants in the organisation such as the board, management, shareholders and other financial stakeholders and the policies and systems laid down and followed for making business decisions.

The emphasis of ICRA rating is on a corporate's business practices and quality of disclosure standards that address the requirements of the regulators and is fair and transparent to its financial stakeholders. The 'high level of corporate governance' rating reflects ITC's transparent shareholding structure, well structured management decision making processes with adequate delegation of powers and sound board structure and process.