A F Ferguson, the well-known chartered accountants firm, will be ITCs new auditors after replacing Lovelock & Lewes. ITC will move a special resolution at the companys forthcoming AGM for the purpose.
Auditors Lovelock & Lewes have expressed their unwillingness to be reappointed and the replacement is being seen as a move by ITC to ensure better corporate governance.
ITC also said the trend of an increasing shift to small size cigarettes from other forms of tobacco may be reversed following the 20 per cent increase in the excise in the Union Budget. This, ITC said in its annual report for 1996-97, would also imply an impediment to revenue accretion, since a shift back to other tobacco forms would mean lower revenue for the government.
It has been observed in the past that the small-size cigarettes has not only helped the industry to achieve a record volume in 1996-97, but has also expanded the tax base for the exchequer by bringing a large number of tobacco users in the tax net.
ITC has also entered into an agreement with its overseas partner BAT for licencing, manufacturing and sale in India, of certain international brands of British American Tobacco (Holdings).
It has already signed an agreement with Ardath Tobacco Company Ltd and another with the Benson & Hedges Ltd, the two subsidiaries of BAT Plc, UK, to this effect. However, the agreement will be subject to the approval of the government of India and other statutory authorities.
During the year under review, the companys leaf tobacco exports to BATs subsidiaries increased by about 30 per cent in volume and by about 65 per cent in value.
Export earnings would have been much higher but for disruptions in exports owing to government authorities enquiry into certain export transactions.
Despite the government enquiries, ITC has strengthened its position in Western Europe and CIS countries and has entered new markets.
While the companys Wills Gold Flake brand is the largest trademark in the consumer goods sector in India, its Wills Navy Cut is the largest free standing brand amongst consumer goods.
