Nestle India to continue paying royalty to parent at 4.5% rate

13 Jun 2024 , 11:15 AM

Nestle India Ltd announced on Wednesday (June 12) that it has approved the continuance of payment of general license fees, often known as royalties, to Société des Produits Nestlé S.A. at the current rate of 4.5%.

Nestle India stated in a regulatory filing that its board has approved the continuation of payment of general license fees (royalty) to Société des Produits Nestlé S.A. (licensor) at the current rate of 4.5% and has recommended this to the company’s members for approval.

Following high requirements of corporate governance, including shareholder rights, the approval described above of members is required by the company every five years in compliance with the applicable laws and regulations,” the business stated.

Nestle India’s board recommended increasing the royalty payment to its parent company by 0.15% per year for the next five years, bringing it to 5.25% of net sales. It recommended implementing the increase on July 1, 2024.

Later, it sought approval from its shareholders as an ordinary resolution via a postal ballot. However, shareholders rejected the idea last month, with 57.18% voting against the ordinary resolution and 42.82% voting in favour.

NESTLÉ India is a subsidiary of NESTLÉ S.A. in Switzerland. Nestlé India, with eight plants and a significant number of co-packers, is a lively company that provides global-standard products to Indian consumers while being committed to long-term sustainable growth and shareholder pleasure.

It boasts over 2000 brands, ranging from global landmarks to local favourites, and operates in 191 countries worldwide.

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