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.

ParticularsScheme approved in 2010Scheme approved in 2019Current Scheme of 2020
Applicable SectionSec. 391 of Companies Act, 1956Sec. 230 to 232 of Companies Act, 2013Sec. 230 to 232 of Companies Act, 2013
Appointed dateNot mentionedSpecific date has been mentioned i.e., Appointed Date means opening of business hours on April 1, 2018Appointed Date means Effective Date.
Effective DateMeans the Date on which certified copy of the order of the high court at Kolkata (Calcutta) approving the scheme is filed with RoC, West BengalEffective 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 DateDate 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 bonusSecured fully paid non-convertible bonus debentures of Rs. 170 eachSecured, 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 Rate8.25% per annum8% per annumShall be determined by Board of Directors after approval of scheme before allotment
SecuritySecured 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 DebenturesOut of General reserveBy utilization of Accumulated ProfitsWill be paid by utilization of General reserve
Declaration of dividendNANAA Dividend of INR 12.50/- per fully paid-up equity shares by utilization of Accumulated Profits.
Amendment in AoANAInserted Article 136ANA

The Scheme

Appointed Date:

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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