Scheme of arrangement with High Court approvals

Nestle India Ltd. — (31-12-2008)

From Notes to Accounts :

During the calendar year 2007, the Company had sought
approval of the Delhi High Court under Sections 391 to 394 of the Companies
Act, 1956 for a Scheme of Arrangement (‘Scheme’) between the Company and its
shareholders and creditors. The Scheme envisaged utilisation of following
amounts for payment to the shareholders, subject to applicable taxes :

(i) An amount of Rs.432,363 thousands as lying in the
Share Premium Account of the Company; and

(ii) An amount of Rs.430,857 thousands from the General
Reserve Account of the Company, which was voluntarily transferred by the
Company in excess of the prescribed 10% of the profits of the Company in
accordance with the provisions of the Companies (Transfer of Profit to
Reserves) Rules, 1975 during the financial years 1981 to 1996.

 

The equity shareholders supported the Scheme at a meeting
held on May 3, 2007 as per directions of the Delhi High Court. Subsequently,
the Delhi High Court vide its Order dated September 30, 2008 sanctioned the
aforesaid Scheme and the Scheme became effective from October 31, 2008 after
filing of the certified copy of the aforesaid Order with the Registrar of
Companies NCT of Delhi and Haryana. Thereafter as per the Scheme, after
deducting applicable corporate dividend tax for the aggregate amount of
Rs.863,220 thousands credited to the Profit and Loss Account, a Special
Dividend of Rs.7.50 (Rupees seven and paise fifty only) per share calculated
by dividing the net amount by the outstanding 96,415,716 equity shares of face
value of Rs.10 each and rounding it off to the nearest half Rupee, was paid on
November 26, 2008 to those shareholders whose name appeared in the Register of
Members/Beneficial Owners on November 17, 2008.