Britannia a leading food company in India, most trusted food brands and manufacturer of numerous biscuits, a public limited company having its equity shares listed on BSE Limited and National Stock Exchange of India Limited.
The Board of Directors of the company on 5th October 2020 has approved Scheme of Arrangement between members and the company for issuance of debentures by way of bonus and declaration of dividend. After the approval of the scheme, the shareholders will receive 1 fully paid-up debentures of face value of INR 29/- by way of bonus and dividend of INR 12.50/- per fully paid-up equity share.
Though HUL was the first to come out with similar scheme as early as in 2001, Britannia is issuing bonus debentures third time. Salient features of Earlier two schemes i.e., one approved on February 11, 2010 and second on August 5, 2019 along with current scheme are:
Table 1: Issuance of Bonus Debentures Comparison.
|Particulars||Scheme approved in 2010||Scheme approved in 2019||Current Scheme of 2020|
|Applicable Section||Sec. 391 of Companies Act, 1956||Sec. 230 to 232 of Companies Act, 2013||Sec. 230 to 232 of Companies Act, 2013|
|Appointed date||Not mentioned||Specific date has been mentioned i.e., Appointed Date means opening of business hours on April 1, 2018||Appointed Date means Effective Date.|
|Effective Date||Means the Date on which certified copy of the order of the high court at Kolkata (Calcutta) approving the scheme is filed with RoC, West Bengal||Effective Date means the date on which the Debentures are allotted to the members of the Company as on the Record Date.||“Effective Date” means the day on which last of the conditions specified in Clause 11|
(Conditions Precedent) of this Scheme are complied with or otherwise duly waived.
|Record Date||Date fixed by the BoD after Effective Date by reference to which eligibility of members for issue & allotment of debentures will be decided by the Co.||Means the date to be fixed by the Board of Directors of the Company upon sanction of the scheme.||Means such date as may be fixed by the Board of Directors of the Company after approval of the Scheme.|
|Issue of Debentures as bonus||Secured fully paid non-convertible bonus debentures of Rs. 170 each||Secured, non-convertible, redeemable, fully paid-up debentures of face value of INR 30/-||Unsecured, Non-Convertible, Redeemable, fully paid-up debentures of face value of INR 29/-|
|Coupon Rate||8.25% per annum||8% per annum||Shall be determined by Board of Directors after approval of scheme before allotment|
|Security||Secured by way of first mortgage created on identified immovable|
property and first charge on Company’s movable assets restricted to
inventories and plant & machinery
|Secured by first charge or charge paripassu with any first charge on moveable or immovable assets of the Company.||No-Security, as Debentures are unsecured in nature|
|Utilization of amount for payment of Debentures||Out of General reserve||By utilization of Accumulated Profits||Will be paid by utilization of General reserve|
|Declaration of dividend||NA||NA||A Dividend of INR 12.50/- per fully paid-up equity shares by utilization of Accumulated Profits.|
|Amendment in AoA||NA||Inserted Article 136A||NA|
After MCA Circular dated August 21, 2019, it is not mandatory to provide any specific calendar date in a Scheme of Arrangement as Appointed Date. Here in current scheme of Arrangement, there is no undertaking which is getting transferred but for determining Accumulated Profits for the purpose of issuing debentures and declaration of dividend the Appointed Date needs to be fixed.
Secured / Unsecured Debentures
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