New Delhi: Consumer goods major Nestlé India on Thursday said a resolution seeking the continuity of royalty payments every five years to its parent company was approved by shareholders at the 60th annual general meeting.
"All resolutions, including the one for continuity of royalty payments were approved with an overwhelming majority," the company said in a filing to the stock exchange on Thursday. "I am humbled by the strong show of support from the shareholders. They have appreciated the company’s performance and shown faith in the management’s ability to deliver long-term shareholder value," Suresh Narayanan, chairman and managing director, Nestlé India, said in a statement.
Nestle currently pays 4.5% of its net sales as royalty towards its parent company.
Earlier this month, the local arm of the Swiss consumer goods company had announced that it would seek approval of its shareholders every five years for royalty payments to its parent company after receiving investor and proxy firm feedback on the issue.
Accordingly, it reviewed its royalty payout to make it more inclusive. The company added that while its General Licensing Agreements (GLAs) are reviewed periodically by the audit committee, “the resolution has been modified to provide for shareholder approval every five years in accordance with applicable laws and regulations."
The resolution seeking shareholder nod for future payments was included as part of its agenda during the company’s upcoming 60th annual general body meeting scheduled on 25 April, the company had said in a filing to the stock exchange on 14 April.