Cigarette-to-FMCG major ITC Ltd on Tuesday said it would seek shareholders’ approval to re-appoint its non-executive chairman Y C Deveshwar for another two years from 2020 to 2022, given the increasing size and complexity of the diversified conglomerate.
“…given the increasing size and complexity of the organisation, the Committee and the Board are of the view that it would be in the best interest of the Company for Y.C. Deveshwar to continue in his capacity as Chairman for some more time,” said notice for its 107th Annual General Meeting to be held here next month.
The notice, further, said the board at the meeting on May 16 recommended, for approval of the members, “the re-appointment of Deveshwar as Chairman and Non-Executive Director of the Company for the period from February 5, 2020 to February 3, 2022, as set out in the Resolution relating to his re-appointment”.
The members at the 105th Annual General Meeting in 2016 had approved the appointment of Deveshwar as Chairman and Non-Executive Director of the company for a period of three years with effect from February 5, 2017.
The conglomerate would also seek shareholders’ nod during its upcoming annual general meeting for re-appointment of Sanjiv Puri as the Managing Director of the company for a period of five years with effect from July 22, 2019, according to the notice.
Puri is the MD of ITC effective from May 16. He was appointed as CEO from February 5, 2017, taking independent charge of the executive leadership of the company.
In its latest annual report, the company said it had “delivered a resilient performance during the year which was a particularly challenging one due to a sharp slowdown in the economy, steep escalation in tax incidence on cigarettes under the GST regime, subdued demand conditions in the FMCG industry and supply chain disruptions caused during the transition to GST”.
“Contrary to indications from the Government that the transition to GST would be based on the principle of maintaining revenue neutrality, tax incidence on cigarettes rose sharply by 13 percent with an even steeper increase of 19 percent for the king-size filter segment under the GST regime,” it said.
Coupled with the increase in excise duty rates announced in the Union Budget 2017, this resulted in an incremental tax burden of over 20 percent on the company’s cigarette business post implementation of GST.