Britannia Industries: Shareholders Reject Britannia Investment, Loan and Guarantee Plan

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Mumbai: Public shareholders of Britannia Industries have rejected a proposal by the biscuit maker, seeking permission to make investments and grant loans and guarantees up to ₹5,000 crore, at an annual general meeting held last week.

Around 60% of institutional investors also opposed compensation for company chairman Nusli Wadia, which would exceed 50% of the total annual compensation due to all non-executive directors. However, this resolution was approved with the help of promoters and institutional investors who voted in favor.

Around 70% of institutional investors and 71% of non-institutional public investors voted against approving limits for investments and extending loans, guarantees and guarantees up to ₹5,000 crore.

Under the Companies Act, a company is permitted to invest in the securities of other companies, to make loans and to provide guarantees and security in connection with any loan, to any other company or person, up to up to 60% of his paid income. share capital and free reserves, or 100% of its free reserves, whichever is greater, with the approval of the board of directors. For a higher amount, prior shareholder approval is required by way of special resolution.

An e-mail request sent to

elicited no response before press time on Monday.

Proxy advisory firm Stakeholders Empowerment Services (SES) had in a report recommended opposing Britannia’s resolution, citing non-disclosure of details of loans or investments and said the company should seek approval of a specific loan, guarantee or investment instead of an all-inclusive approval.

“The company has not disclosed any specific goals or short or long-term plans to increase limits while seeking approval for a limit of nearly 200% of the company’s net worth,” SES said. in the report. “Furthermore, the company is neither a core investment company nor an NBFC. Therefore, granting a loan, providing a guarantee and making investments does not constitute an operational activity. essential to society.

In a separate resolution, most institutional shareholders opposed approving the remuneration of promoter and non-executive director Nusli Wadia, which exceeded 50% of the total annual remuneration payable to all non-executive directors. The board approved the ₹7.36 crore remuneration payable to Wadia for 2021-22.

According to SES, Wadia received total compensation of ₹7.36 crore in FY22, nearly 17 times the average compensation paid to other non-executive directors. “While Varun Berry, the Managing Director, receives a fee of ₹11.47 crore for FY22, Wadia earned ₹7.36 crore for his tenure as a non-executive director,” SES said in the report while advising shareholders to oppose the resolutions.

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