FMCG major Nestle India said Thursday its shareholders have cleared a proposal for the continuation of royalty payments to its Swiss parent firm Societe des Produits Nestle SA.
Shareholders also approved the proposal to seek their mandatory approval every five years for the fixation of royalty payment.
All resolutions, including the "one for continuity of royalty payments" were approved with an overwhelming majority at the 60th Annual General Meeting (AGM) in New Delhi, a company statement said.
Commenting on the outcome of the AGM, Suresh Narayanan, Chairman and Managing Director, Nestle India said: "I am humbled by the strong show of support from the shareholders. They have appreciated the Company's performance and shown faith in management's ability to deliver long term shareholder value.
"The shareholders also appreciated the efforts towards societal initiatives, be it in the area of rural development, nutrition, water or steps taken towards managing plastic waste." The company had proposed for the continuation of payment of royalty to Societe des Produits Nestle S.A and also the approval of members every 5(five) years for that.
Earlier, Nestle India had to amend the resolution in its notice dated March 12, 2019, to its shareholders, following suggestions from the group of its shareholders.
Nestle India had then said that it would seek approval from its shareholders every five years over the royalty payment.
"Respecting the 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," Nestle India informed the bourses in an addendum notice this week.
Nestle India, had earlier proposed the payment of general licence fees (royalty) of 4.5 per cent of the net sales to its licensor "during any financial year".
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.
In a separate filing, Nestle India said its board in a meeting held Thursday declared an interim dividend of Rs 23 per equity share for the year 2019.
It has also approved re-appointment of Shobinder Duggal as Whole-time Director, designated as Executive Director - Finance & Control and CFO with effect from May 10, 2019, till December 31, 2019.
Nestle India, which follows January-December fiscal year, had reported a revenue of Rs 11,292.27 crore in 2018.
The company which primarily operates in the food and beverage space, has some powerful brands like Maggi, Nescafe, KitKat etc.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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