Nestle India investors clear royalty payments to parent co at existing rate

Earlier in May this year, the shareholders of co had rejected proposal to increase payment of royalty to parent Socit des Produits Nestl S.A by 0.15% per year for the next five years

FMCG firm Nestle India on Monday said its shareholders have approved to continue paying royalty to its parent firm at the current rate of 4.5 per cent of the net sales.

Earlier in May this year, the shareholders of the company had rejected a proposal to increase payment of royalty to parent Socit des Produits Nestl S.A (licensor) by 0.15 per cent per year for the next five years thereby enhancing it to 5.25 per cent of net sales.

Subsequently, last month the board of directors of the company at its meeting approved continuation of payment of general licence fees (royalty) at the existing rate of 4.5 per cent to Socit des Produits Nestl S.A. and recommended to the members of the company for their approval.

The members of the company at its AGM (annual general meeting) held on July 8, 2024 have approved the ordinary resolution to continue the payment of general licence fees (royalty) at the existing rate of 4.5 per cent with 99.54 per cent of valid votes in favour and 0.46 per cent against it, Nestle India said in a regulatory filing.

The company had sought approval from the shareholders for continuation of payment of general licence fees (royalty) at the rate of 4.5 per cent, net of taxes, of the net sales of the products sold by it to the licensor as per the terms and conditions of the existing General Licence Agreements (GLAs) with effect from July 8, 2024, the filing added.