Nestle India will keep paying royalty to its parent company at the current rate of 4.5%

Nestle India will continue to pay a royalty of 4.5 percent of net sales, minus taxes, to its parent company Nestle S.A. The board approved the proposal to maintain the general license fees at the same 4.5 percent rate to Société des Produits Nestlé S.A., as per a BSE filing on Wednesday.

Nestle India's shareholders voted against a proposal to gradually increase the royalty payment rate to 5.25% of net sales, after taxes, over five years on May 17. The motion was opposed by almost 57.18 percent of the valid votes from the shareholders.

The Board of Directors, based on the recommendation of the Audit Committee and taking into account member input and stakeholder feedback, approved the company's ongoing payment of general license fees to Société des Produits Nestlé S.A. at the existing rate of 4.5 percent of net sales, with only Independent Directors voting and Executive Directors abstaining. It also added that the board has proposed the approval of the Company's members through an Ordinary Resolution at the 65th AGM.

The Indian branch of the Swiss packaged food company announced that shareholder approval for royalty payments will be obtained every five years as per legal regulations.
The revised date of July 8 for the 65th Annual General Meeting was also approved by the company's board. The company also gave its consent to appoint Sidharth Kumar Birla as an Additional Director and Independent Non-Executive Director for five years.