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.