Shareholders of FMCG firm Nestle India Ltd have rejected a proposal by the company to increase royalty payment to its parent firm, according to a regulatory filing by the company.
Nestle India's board had last month approved increasing royalty payment to its parent firm Societe des Produits Nestle S.A (licensor) by 0.15 per cent per year for the next five years thereby enhancing it to 5.25 per cent of net sales.
It had proposed to start the 0.15 per cent per annum increase over the current royalty fee of 4.5 per annum from July 1, 2024. Subsequently, it had sought approval from its shareholders of the same as an ordinary resolution through a postal ballot.
In a regulatory filing, Nestle India said 57.18 per cent of the total votes were against the ordinary resolution and 42.82 per cent of the votes were in favour. The ordinary resolution, has not been passed due to lack of requisite majority of votes in favour of the resolution, said the scrutiniser's report.
In 2013, Nestle India's board had approved an increase in royalty payment by 0.20 per cent per year over a period of five years to its parent firm, thereby enhancing it to 4.5 per cent of the sales.
On the other hand, the shareholders of Nestle India approved the special resolution for the appointment of Suneeta Reddy, Managing Director of Apollo Hospitals Enterprise Ltd, as an Additional Independent non-executive Director with effect from April 5, 2024, for a term of five consecutive years up to April 4, 2029, with requisite majority.
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