Nestle India to seek approval from its shareholders every five years over the royalty payment

April 17, 2019

Nestle India said is planning to seek approval from its shareholders every five years over the royalty payment to its Swiss parent firm Societe des Produits Nestle SA. Nestle India, which is going to convene its general meeting on April 25, had earlier proposed payment of general licence fees (royalty) of 4.5 per cent of the net sales to its licensor “during any financial year”. But resolution does not propose any revision in the royalty rate.

According to a media report, it was opposed by several minority shareholders and proxy advisory firms, contending that the move was against good corporate governance norms.

Modifying an ordinary resolution in a notice dated March 12, 2019 to its shareholders and on feedback received and the commitment of the company to high standards of corporate governance including shareholder rights, approval of members shall be sought every 5 (five) years in compliance with the applicable laws and regulations, “informed Nestle India to the bourses in an addendum notice this week.

The company which primarily operates in food and beverage space, has some powerful brands, which includes Maggi, Nescafe, Kitkat etc .

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