MUMBAI, June 25: The Rs 535 crore Nicholas Piramal is seeking shareholder approval to permit allotment of shares under the employee stock option scheme, in accordance with the revised Sebi guidelines, at its forthcoming annual general meeting.Under the proposed scheme, the board can "create, offer, issue and allot to and for the benefit of such person and persons, either by creating a Trust or otherwise (including working directors) as are in the employment of the company at any time, such number of equity shares of the company not exceeding five per of the issued equity shares of the company."
The scheme also envisages giving financial assistance for the purpose of purchasing/subscribing such securities. The aforesaid issue of equity shares may be in the form of fully or partly convertible debentures, bonds, equity warrants or other securities as may be permitted in law.
Stock option schemes are well accepted incentives designed to foster a sense of ownership and belonging amongst employees of thecompany. Meanwhile, Global Home Products Company, the 100 per cent over the counter (OTC) products subsidiary of Nicholas Piramal, will transfer the Lacto-Calamine brand to the latter to facilitate its promotion via the newly formed joint venture with Reckitt & Colman.
Top Piramal managment officials said that the "internal transfer" was necessiated as Lacto-Calamine was originally purchased in the name of Global Home Products in June 1996 from Duphar Interfran. Officials said that since the marketing and selling of this brand is to be carried out by Reckitt Piramal, the 60:40 joint venture between Reckitt & Colman and Nicholas Piramal, the ownership of the brand would need to lie with Nicholas Piramal.Lacto-Calamine, a popular skin-care brand, was acquired at a consideration of Rs 1.70 crore has been successfully turned around since.
Nicholas Piramal, officials added, had loaned around Rs 1 crore to Global Home Products to buy out the brand and this would be duly adjusted once the internal transfer wascomplete.
Besides, since revenue was generated during the current year from the marketing and selling of the product, the original cost of the brand is amortised to the extent of one-twentieth and the balance amount representing non-competition fees (of Rs 40 lakhs and forming part of the total cost of the brand) is written off to the extent of one-tenth as in the past.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
