Nestle India, a leading FMCG company, will pay a royalty of 4.5 percent to its parent company, Société des Produits Nestlé S.A, as stated in an exchange filing on Wednesday.
The Company stated that the current rate of 4.5 percent, after accounting for taxes, applies to the net sales of products sold under the terms of the existing General License Agreements with the Licensor.
“Approval from members will be requested by the Company every five years, in adherence to the prevailing laws and regulations,” it stated.
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Shareholder Decision on Royalty Increase
Last month, the company’s shareholders declined its proposal to elevate the royalty payout to its Swiss parent from 4.5 percent to 5.25 percent, net of taxes, over a five-year period.
The company notified the exchanges that 57 percent of its shareholders had opposed the proposal.
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Appointment of Sidharth Kumar Birla as Director
Meanwhile, the company’s board has approved the appointment of Sidharth Kumar Birla as an additional director and independent non-executive director.
He will officially assume the role starting from June 12, 2024, serving for a consecutive five-year term.
Furthermore, the board has adjusted the date for the company’s annual general meeting to July 8, for the purpose of deciding on the final dividend payment. If approved, the dividend will be disbursed on August 6, 2024.