everyday use Leading FMCG manufacturer Nestle India will continue to pay royalty to its parent company at the current rate of 4.5 per cent of net sales. The company’s shareholders have rejected the proposal to hike the royalty. The board of directors of the company, in its meeting, has approved continuation of payment of common licence fee (royalty) to Societe des Produits Nestlé SA (licensor) at the current rate of 4.5 per cent and recommended it to the members of the company for their approval, Nestle India said in a statement.
The board had approved the increase in royalty
In April this year, the board of Nestle India had approved raising royalty payments to its parent company by 0.15 per cent per annum for the next five years. It had proposed to implement the hike from July 1, 2024. Subsequently, it had sought approval from its shareholders in the form of an ordinary resolution through postal ballot. However, shareholders rejected the proposal last month, with 57.18 per cent of the total votes against the ordinary proposal and 42.82 per cent in favour.
Only independent directors voted
The ordinary resolution was not passed due to lack of the required majority in favour of the proposal. Only independent directors voted and the executive directors recused themselves. Further, the board approved the appointment of Siddharth Kumar Birla as independent non-executive director in the company. Birla’s appointment is effective for a period of five years from June 12, 2024.
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