Sebi seeks granular details of royalty payments from listed cos

The Securities and Exchange Board of India (Sebi) has introduced new standards mandating more detailed disclosures on royalty payments to related parties by listed companies.

- KHUSHBOO TIWARI

These disclosures aim to provide sufficient information to audit committees and shareholders before they make decisions. While experts have welcomed the increased transparency, many have called for greater clarity.

Previously, Sebi highlighted findings from a study showing that one in four companies paid more than 20 per cent of their net profits to related parties as royalties.

"For companies with a composite license agreement that includes a bundle of intellectual property rights such as brands, patents, technology, and knowhow, state the key components of such agreements and the reasons why the royalty attributable to those key components could not be furnished separately," the standards said.