Diversified conglomerate ITC Ltd now has an equally spread out Board of directors, even beyond the limit set by the newly amended Companies Act.
The hotels-to-tobacco behemoth has expanded and has taken the strength of its board to 18 members as against the maximum from 15 allowed by the Companies Act. The company is seeking approval of the shareholders at its annual general meeting to be held on July 30.
A company is allowed to breach the limit only if it is allowed by shareholders. Incidentally, 18 is the limit approved by the company's Articles of Association.
"Section 149 of the Companies Act 2013 provides that the number of directors of a company shall not exceed 15, unless approved by the shareholders by way of special resolution. The board in its meeting on May 23, keeping in view the diversified nature of the company's portfolio and commensurate with its size of operations, was of the view that the board's strength be retained at 18, the limit stipulated in Articles of Association," ITC said in a notice to shareholders.
The directors inducted are Silabhadra Banerjee, Suryakant Balkrishna Mainak and Robert Earl Lerwill, all as additional non-executive directors.
ITC is bringing back Banerjee, who had resigned in March 26 from the Board as representative of the Specified Undertaking of the Unit Trust of India.
"Banerjee also served on the Board of the company from February 2010 to March 2014. In order to draw upon Banerjee's rich experience, the Board on the recommendation of the nomination and compensation committee appointed him as additional non-executive director effective July 24, 2014," the notice said.
Mainak is managing director of Life Insurance Corporation of India, who joined the Board in April to represent the state-owned insurer, which owns 13.87% stake in ITC.
Lerwill, representative of British American Tobacco plc, ITC's ultimate holding company, was inducted earlier in November.
As on March-end ITC had a Board of 14 members, headed by chairman YC Deveshwar, executive directors Nakul Anand, P V Dhobale and K N Grant, seven non-executive independent directors and three other non-executive directors.
ITC's board has hit the maximum size possible -- till it amends its Article of Association - at a time when it is aggressively looking beyond its traditional business of cigarettes and tobacco.
It now aims to be country's largest player in the non-cigarette FMCG business as well.
"'Over the last few years, ITC strove relentlessly to create world-class Indian brands that are born out of deep consumer insights and are gaining growing consumer franchise. It is ITC's aspiration to be the No.1 player in the FMCG sector and progressively lead the Indian global market," ITC said in its annual report issued on Tuesday.
"ITC has established a vibrant portfolio of brands which have attained considerable size in a relatively short period of 10 years and in aggregate currently represent over Rs 10,000 crore in terms of annualised consumer spend a feat perhaps unrivalled in the Indian FMCG industry," it claimed.