5th September 2014, 06:41
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| | Maruti to pay royalties in rupees for future models to Suzuki
Maruti Suzuki India Ltd (MRTI.NS), the nation's top carmaker, said on Thursday it would make royalty payments due to parent Suzuki Motor Corp (7269.T) for all future models in rupees to limit risks from foreign exchange fluctuations. |
"On all future models the royalty will be expressed in rupees...and not (in) the yen so that we are not exposed to the variation in the exchange rate which has been happening in the past," Maruti Chairman R.C. Bhargava told shareholders at the company's annual general meeting in the Indian capital.
Maruti, over 56 percent-owned by Suzuki, currently pays royalties in yen for use of technical know-how and its Japanese parent brand name. The company paid 24.86 billion rupees ($412 million), or nearly 6 percent of its net sales, in royalties for the year to March, according to its annual report for the year.
A good decision taken in time indeed, will certainly make investors happy.