Nestle India to pay royalty fee to Swiss parent at current rate of 4.5%

FMCG major Nestle India will pay royalty to its parent company, Société des Produits Nestlé S.A, at the current rate of 4.5 per cent, it said in an exchange filing on Wednesday.

“The current rate of 4.5 per cent, net of taxes, of the net sales of the products sold by the Company as per the terms and conditions of the existing General Licence Agreements with the Licensor,” the filing said.

“Approval of members shall be sought by the Company every five years in compliance with the applicable laws and regulations,” it said.

Last month, shareholders of the company turned down its proposal to raise the royalty payout to its Swiss parent from 4.5 per cent to 5.25 per cent net of taxes over five years.

As many as 57 per cent of the company’s shareholders had rejected the proposal, the company had informed the exchanges.

Meanwhile, the company’s board also approved the appointment of Sidharth Kumar Birla, as an additional director and independent non-executive director.

His appointment will be effective from June 12, 2024, for five consecutive years.

Additionally, the board has rescheduled the date of the company’s annual general meeting to July 8, to determine the payment of the final dividend, which, if declared, will be paid on August 6, 2024.