Nestle India to seek shareholders’ nod every five years on royalty to parent firm

Our Bureau New Delhi | Updated on April 16, 2019 Published on April 16, 2019

A Nestle logo pictured on a coffee factory in Orbe, Switzerland.   -  REUTERS

Currently it pays royalty at the rate of 4.5 per cent of the net sales to Societe des Produits Nestle SA


Nestle India has decided to seek shareholders approval every five years on the issue of payment of royalty to its parent company after receiving feedback from investors and proxy advisory firms.

The FMCG major, currently pays royalty at the rate of 4.5 per cent of the net sales to Societe des Produits Nestle SA.

In a statement, a Nestle India spokesperson said, “We received feedback from our shareholders and other stakeholders on the resolution pertaining to royalty payment and as a responsible corporate citizen with high standards of corporate governance modified the resolution.”

“Though the General Licensing Agreements (GLA’s) are reviewed periodically by the Audit Committee, the resolution has been modified to provide for shareholder approval every five years in accordance with applicable laws and regulations,” the statement added. The resolution does not propose any revision in rates of royalty payment, the company said.

The company’s earlier resolution had proposed payment of general license fees also known as royalty “during any financial year.” However, in a BSE filing on April 14, the company said it is modifying agenda item number 6 of the notice of annual general meeting, which pertains to royalty payments.

The company’s annual general meeting is scheduled to be held on April 25, where it will seek shareholder approval on various issues including the resolution on royalty payment.

Published on April 16, 2019
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