The EGM was convened to transact, among other businesses, the transfer of HLL's dairy business to Nutricia (India) for around Rs 26.5 crore and the transfer of the animal feeds business to a subsidiary.

The resolution concerning the merger of Industrial Perfumes with HLL went to poll at Monday's court-convened EGM, and shareholders cast their votes to approve the merger of Industrial Perfumes with HLL. The results of the poll will be available by Tuesday.

The HLL board, in its meeting on May 3, had proposed the merger ratio of two shares of HLL for every five shares of Industrial Perfumes. The merger is with retrospective effect from January 1, 1999. With the merger, HLL's equity base will marginally rise to Rs 220.06 crore, from Rs 219.57crore.

Industrial Perfumes, which was incorporated in May 1997, came into Lever's fold after the merger of Tomco with HLL.

The merger is significant to the extent that it will pave the way for the multinational to form joint ventures in speciality chemicals, as after the merger, all speciality chemicals operations in India will come under one entity.

Joint ventures are being planned with international technology providers in speciality chemicals. The move is in line with Unilever's decision to exit from the speciality chemicals business worldover.

Industrial Perfumes is involved in the manufacture of speciality chemicals like aroma chemicals, fragrances, natural essential oils, gums, resinoids, spice oils, and oleoresins.

Business growth in speciality chemicals for HLL is supported by three new factories--for aroma chemicals at Chiplun in Maharashtra, for flavours at Daman, and a multi-product line at Daman.

On the transfer of the company's animal feeds division to a subsidiary, Dadisethclarified that the company does not intend to set up a new subsidiary. The company will transfer the business to an existing subsidiary. ``The business (animal feeds) will be transferred to an operating subsidiary,'' he said.

The Rs 278-crore animal feeds business was put on the block. However, as no bid received by the company matched the expected price level for the business, the firm has decided to transfer the business to an operational subsidiary.

``The other reason in doing so is to give greater focus to a small business (as compared to a corporate giant like HLL) like animal feeds. This would also help in increasing the operational flexibility of the business to structure a transaction which will benefit shareholders,'' Dadiseth said.

Shareholders unanimously approved the resolutions concerning the sale of the dairy business to Nutricia and the proposal to transfer the animal feeds business to a subsidiary.