Nestle India shareholders approve continuation of payment of royalty at existing rate to parent

Earlier in May this year, the shareholders of the company had rejected a proposal to increase payment of royalty to parent Société des Produits Nestlé S.A (licensor) by 0.15% per year for the next five years thereby enhancing it to 5.25% of net sales.

Subsequently, last month the board of directors of the company at its meeting approved continuation of payment of general licence fees (royalty) at the existing rate of 4.5% to Société des Produits Nestlé S.A. and recommended to the members of the company for their approval.

The members of the company at its AGM (annual general meeting) held on July 8, 2024 have approved the ordinary resolution to continue the payment of general licence fees (royalty) at the existing rate of 4.5% with 99.54% of valid votes in favour and 0.46% against it, Nestle India said in a regulatory filing.

The company had sought approval from the shareholders for continuation of payment of general licence fees (royalty) at the rate of 4.5%, net of taxes, of the net sales of the products sold by it to the licensor as per the terms and conditions of the existing General Licence Agreements (GLAs) with effect from July 8, 2024, the filing added.