JK Lakshmi Cement shareholders reject proposal to increase inter corporate transaction limit to Rs 10,000 crore

Shareholders of JK Lakshmi Cement Ltd (JKLC) have rejected a special resolution for increasing inter corporate transaction limit to Rs 10,000 crore.

The special resolution, which sought shareholders' approval for increasing the limit under section 186 of the Companies Act 2013 for making investments, giving loans, providing guarantees, etc - could get only 71.10 per cent of the total votes polled at the AGM held on August 24, 2023, said the scrutinizer's report uploaded by JKLC on stock exchanges.

Although 28.90 per cent of the votes were polled against the proposal through video conferencing, the Companies Act mandates that a special resolution has to be passed by a super majority, which refers to at least 75 per cent of the members voting in favour of it.

As the special resolution received less than the required votes of the total votes polled, it was rejected.

The said proposal was opposed by proxy advisory firm IiAS who had recommended voting against the proposal.

"The maximum limit available to the company as per automatic limit is Rs 2,650 crore, of which the company has utilised 91.7 per cent, and Rs 280 crore is available for use. The proposed limit at Rs 10,000 crore is 277 per cent higher," it had said.

IiAS further said:" We note that amidst the almost full utilization of current limits, there is a need for an increase in limit, however for an almost 3x increase, the company should have provided specific disclosures." The proxy advisory firm had also advised the shareholders to vote against another special resolution for "approval for payment of Remuneration to B Bharat Hari Singhania, Chairman or FY 2022-23".

However, this special resolution was passed by JKLC's shareholders with 85.29 per cent of the polled votes.

JKLC had sought shareholders' approval for payment of a commission aggregating to Rs 2.50 crore to Bharat Hari Singhania for FY23. As it was in excess of 50 per cent of the total annual remuneration payable to all non-executive directors, it required approval.

SEBI LODR regulations require shareholders' approval when the remuneration to a non-executive director exceeds 50 per cent of the total annual remuneration payable to all non-executive directors.

JKLC is a part of JK Organisation group and its revenue was at Rs 6,071.05 crore in financial year ended March 31, 2023.

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