Also to shell out a percentage of net sales towards shared costs

Britannia Industries, Bombay Dyeing and Manufacturing Ltd, and Go Airlines (India) will now have to pay royalty to the parent for using the ‘Wadia Group’ brand name and for sharing common services.

Both the royalty and shared service costs will be paid to the group holding company Nowrosjee Wadia and Sons Ltd (NWS).

Shared services

Addressing the 93rd annual general meeting of Britannia Industries Ltd, group chairman Nusli Wadia said, “The royalty will be charged from all group outfits — listed and unlisted. As per the agreement, we can charge up to 0.25 per cent towards royalty, but we plan to cap it at 0.1 per cent.”

According to Ms Vinita Bali, Managing Director, Britannia, apart from the royalty, which will be paid out of the food major’s net sales, the group outfits will also shell out up to 0.25 per cent of their net sales as costs for sharing common services offered by the promoter group.

“Being Wadia Group companies, there are several services, including legal, taxation and treasury, which are being shared. This gives us a lot of tangible benefits,” Bali said at a press meet here on Monday.

Paring expenses

Sharing of services, Bali said, helps bring down costs.

“We do not have to employ as many people in our legal and treasury teams as we can pool resources from the centralised system. The expense would have been significantly higher if we had to do it on our own,” she explained.

(This article was published on August 6, 2012)
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