FMCG firm Nestle India Ltd on Wednesday (June 12) said it approved the continuation of payment of general licence fees, also known as royalty, to Société des Produits Nestlé S.A. at the existing rate of 4.5%.
The company said its board has approved the continuation of payment of general licence fees (royalty) at the existing rate of 4.5% to Société des Produits Nestlé S.A. (licensor) and recommended to the members of the company for their approval, Nestle India said in a regulatory filing.
"The board...on the recommendation of the audit committee...approved the continuation of payment of general licence fees (royalty) by the company to Société des Produits Nestlé SA .. at the current rate of 4.5 per cent, net of taxes, of net sales of the products sold by the company as per the terms and conditions of the existing general licence agreements with the licensor…,” Nestle India said.
Also Read: Bharti Airtel adds $30 billion to its market cap to become the biggest wealth creator
"Following high standards of corporate governance, including shareholder rights, the aforesaid approval of members shall be sought by the company every five years in compliance with the applicable laws and regulations,” the company added.
In April this year, Nestle India's board approved increasing royalty payment to its parent firm by 0.15% per year for the next five years, thereby enhancing it to 5.25% of net sales. It had proposed to implement the increase from July 1, 2024.
Subsequently, it sought approval from its shareholders as an ordinary resolution through a postal ballot. However, the shareholders rejected the proposal last month, with 57.18% of the total votes against the ordinary resolution and 42.82% in favour.
Also Read: Apple overtakes Microsoft to return as world's most valuable company
Shares of Nestle India ended at ₹2,530.50, down by ₹12.65, or 0.50% on the BSE.
The company said its board has approved the continuation of payment of general licence fees (royalty) at the existing rate of 4.5% to Société des Produits Nestlé S.A. (licensor) and recommended to the members of the company for their approval, Nestle India said in a regulatory filing.
"The board...on the recommendation of the audit committee...approved the continuation of payment of general licence fees (royalty) by the company to Société des Produits Nestlé SA .. at the current rate of 4.5 per cent, net of taxes, of net sales of the products sold by the company as per the terms and conditions of the existing general licence agreements with the licensor…,” Nestle India said.
Also Read: Bharti Airtel adds $30 billion to its market cap to become the biggest wealth creator
"Following high standards of corporate governance, including shareholder rights, the aforesaid approval of members shall be sought by the company every five years in compliance with the applicable laws and regulations,” the company added.
In April this year, Nestle India's board approved increasing royalty payment to its parent firm by 0.15% per year for the next five years, thereby enhancing it to 5.25% of net sales. It had proposed to implement the increase from July 1, 2024.
Subsequently, it sought approval from its shareholders as an ordinary resolution through a postal ballot. However, the shareholders rejected the proposal last month, with 57.18% of the total votes against the ordinary resolution and 42.82% in favour.
Also Read: Apple overtakes Microsoft to return as world's most valuable company
Shares of Nestle India ended at ₹2,530.50, down by ₹12.65, or 0.50% on the BSE.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
