New Delhi, Apr 5 (PTI) FMCG firm Nestle India Ltd on Friday said its board has approved increasing royalty payment to its parent firm by 0.15 per cent annually for the next five years, thereby enhancing it to 5.25 per cent of net sales.

The board of directors, on the recommendation of the Audit Committee, approved the payment of general licence fees (royalty) by the company to Societe des Produits Nestle SA (licensor), at the rate not exceeding 5.25 per cent, net of taxes, of the net sales of the products sold by it, Nestle India Ltd said in a regulatory filing.

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The increase will be as per the terms and conditions of the existing general licence agreements, "payable in a staggered manner over the period of five years by making an increase of 0.15 per cent per annum over the current license fees of 4.5 per cent per annum effective from July 1, 2024", it added.

The board has recommended the same for approval by the shareholders of the company through a postal ballot, it said.

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Earlier, Nestle India, which followed the January-December financial year, had approved the change of the financial year commencing on April 1 and ending on March 31 of the next year.

Nestle India's revenue from sales of products in 2023 was Rs 19,021.05 crore, up 13.3 per cent from the previous year.

In 2013, Nestle India's board approved an increase in royalty payment by 0.20 per cent per year over five years to its parent firm, thereby enhancing it to 4.5 per cent of the sales.

In another decision, Nestle India said its board has also approved 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, subject to shareholders approval.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)