Mumbai, March 28: Proxy advisory firm Institutional Investor Advisory Services (IiAS) today expressed concern over rising royalty payments by multinational companies (MNCs) without commensurate improvement in their revenues and profits. In comparison, the pre-royalty pre-tax profits have grown at a CAGR of 9.6 per cent and net sales have grown 8.7 per cent. A total of five companies - Maruti Suzuki India, Hindustan Unilever, ABB, Nestle India and Bosch - paid royalty of Rs 5,540 crore in 2015-16, which is 78 per cent of the royalty paid by the 32 MNCs. This share of their royalty was higher than their share of profits as these five companies accounted for 61.6 per cent of the aggregate pre-royalty pre-tax profits. This was because ABB paid out 52 per cent of its pre-royalty pre-tax profits as royalty, which was 6.3 per cent of its 2015-16 net sales.

Source: The Telegraph March 28, 2017 19:42 UTC