New Delhi: FMCG player Jyothy Laboratories on Thursday said it is seeking shareholders’ approval to increase the limit for making investments or providing loans to its different group firms up to Rs1,000 crore.
“The approval of the members is being sought to give powers to the board of directors for making further investments, loans and guarantees for amounts not exceeding Rs1,000 crore,” Jyothy Laboratories said in a filing to the Bombay Stock Exchange (BSE).
The company said the amount will be over and above the exposure of Rs181.51 crore as of 30 May 2011.
The firms to which the company has exposure are Jyothy Fabricare Services, Jyothy Kallol Bangladesh, Henkel India, Akash Cleaners, Diamond Fabcare and Snoways Launderers & Drycleaners.
“These investments, loans and guarantees are proposed to be made out to internal accruals/borrowed funds to achieve long-term strategic and business objectives of the company,” the firm said.
As per the Company’s Act, the board of directors can make loans, give guarantees and make investments in the securities of other bodies corporate to the extent of 60% of its paid-up share capital and free reserves or 100% of its free reserves, whichever is higher, it added.
Besides, the company also sought shareholder’s approval to enhance its borrowing limit to Rs1,000 crore from the existing Rs700 crore.
“In order to finance the growth in the business of the company and its subsidiaries, the company may have to borrow funds from time to time. It is therefore proposed to enhance the power of board of directors to borrow to a sum not exceeding Rs1,000 crore,” the filing said.
Jyothy Laboratories’ scrip was trading at Rs216.10 per share on the BSE in the Thursday afternoon, up 4.02%.