To, The Members of Colgate-Palmolive (India) Limited
The Directors have pleasure in presenting their Report and Audited
Accounts of the Company for the year ended March 31, 2014.
Total Revenue (a b c) 3,629.13 3,213.73
Sales (Excluding Excise Duty) (a) 3,544.88 3,084.11
Other Operating Revenue (b) 33.93 79.70
Other Income (c) 50.32 49.92
Profit before Tax from ordinary activites 663.58 663.03
Exceptional item 64.38 -
Profit before Taxation (including
exceptional item) 727.96 663.03
Provision for Taxation 188.09 166.28
Profit after Taxation 539.87 496.75
Balance brought forward 119.21 114.68
Profit available for appropriation 659.08 611.43
Dividend 367.18 380.78
Dividend Tax 62.40 61.77
General Reserve 53.99 49.67
Balance carried forward 175.51 119.21
Our Country witnessed unprecedented challenges during Financial Year
2013-14. These challenges were high inflation, including food
inflation, which rose to 13.2 per cent in the month of October 2013 and
low GDP growth at 4.4 per cent along with unprecedented volatility in
currency. The Reserve Bank of India kept a tight monetary policy in the
Financial Year 2013- 14 and interest rates at elevated level to bring
down the inflation. As a result of these factors and weak sentiments,
consumer confidence declined resulting in slowing down of consumption
in most categories of FMCG sector.
According to Neilson, market researcher, FMCG arowth in Urban Market
was 8 Der cent, while in Rural Market, the growth was 12 per cent.
Overall, FMCG growth, as per the report, slowed down to 9 per cent in
2013, half of the previous year as the consumers cut down on the
discretionary spend or down traded to cheaper products.
Despite such a challenging environment and increased competitive
intensity, your Company delivered strong results.
Your Company''s business continues to grow strongly in double digits.
Sales for the year increased by 15 per cent at Rs. 3,544.88 crore as
against Rs. 3,084.11 crore during the previous year. The toothpaste
business registered a very strong volume growth of 9 per cent during
The profit before tax (including exceptional item) during the year was
Rs. 727.96 crore, an increase of 10 per cent over the previous year.
The profit after tax (including exceptional item) also increased,
standing at Rs. 539.87 crore an increase of 9 per cent over the
previous year. Your Company also invested in building new plants at
Sanand (Gujarat) and Sricity (Andhra Pradesh).
Your Company strengthened its leadership position in the toothpaste
category to 57.1 per cent from 55.4 per cent. Similarly, market share
in toothbrush category was strengthened to 42.3 per cent from 41.3 per
During the year, your Company also focused on bringing in consumer
appealing innovation as well as adopting various innovative strategies
to increase the distribution and penetration in rural markets.
The Company''s strong cash generation and positive growth momentum led
your Board to declare three interim dividends each of Rs. 9/- per share
aggregating Rs. 27/- per share for the financial year 2013-14. These
dividends were paid on November 20, 2013, December 20, 2013 and April
16, 2014. Having declared three interim dividends, your Board has not
recommended a final dividend for the financial year 2013-14.
Colgate - the #1 Most Trusted Brand once again in 2013
For the third consecutive year, ''Colgate'' has been ranked as the
#1 Most Trusted Brand by Brand Equity''s Annual Survey. The Most
Trusted Brand identifies the most special attribute - ''Consumer''s
Trust''. This survey was conducted by Economic Times Brand Equity and
market research agency, Neilsen. The survey covered design samples of
7,200 across socio- economic classifications such as gender, income,
age, work status and geography. Your Company is grateful to its
consumers for their loyalty and trust reposed in the brand
''Colgate''. It is noteworthy that Colgate is the only Brand to be
ranked in the top 3 from the inception of the survey in the year 2001.
Focus on Innovation
In the current year, your Company launched a breakthrough technology
under the brand name, Colgate® Maximum Cavity Protection plus Sugar
Acid Neutralizer™, its first and only family toothpaste that directly
fights sugar acids, the leading cause of cavities.
While fluoride alone reverses the damage caused by the sugar acids on
the tooth enamel, the patented technology in Colgate® Maximum Cavity
Protection plus Sugar Acid Neutralizer™ , is clinically proven to
reduce early tooth decay, helps neutralize sugar acids before they can
Your Company has been staying ahead of trends by identifying
opportunities based on insights into consumer behavior and leveraging
technology, in collaboration with the parent company, to deliver
innovative products. Our success in delivering meaningful innovation is
evident in our launches as listed below :
i) Colgate Active Salt Healthy White toothpaste which offers the
benefit of ''Yellowness removal'' from teeth. This product has the
combination of salt and lemon that delivers yellowness removal.
ii) Colgate Maxfresh Fresh Tea toothpaste which offers consumers a
unique and exciting Tea flavor experience.
In toothbrush category, the Company introduced innovative products
i) Colgate® Slim Soft, a toothbrush with super slim and ultra-soft
tapered bristles - 17X slimmer than ordinary end-rounded bristles;
ii) Colgate Wave Gum Comfort Toothbrush with soft curved bristles for
gum comfort and effective cleaning of teeth; and
iii) Relaunch of Colgate Super Flexi Toothbrush with a new premium
handle and flexi bands to reach hard-to-reach places in the mouth.
Your Company will continue to remain focused on driving consumer
relevant innovation in the future.
Sale and transfer of Company''s division viz. Global Shared Services
As stated in the Annual Report for the year 2012-13, your Company after
obtaining necessary approvals from the Board of Directors and
Shareholders, sold and transferred the Company''s Global Shared
Services Organization (GSSO Division) as and by way of a slump sale
to Colgate Global Business Services Private Limited (CGBSPL), a 100 per
cent subsidiary of the Ultimate Holding Company, Colgate-Palmolive
Company (CP-USA) with effect from June 1, 2013, on a going concern
basis for a total consideration of Rs. 5,989 Lacs after adjustment of
relevant assets and liabilities of GSSO Division as shown under
Exceptional Item of financial results of the report. CGBSPL now,
provides the best in class service to CP-USA''s subsidiaries,
including CP-lndia with greater efficiency.
As stated in the Annual Report for the year 2012-13, to cater to the
increasing demand for the Company''s products, your Company has set up
a state of the art toothpaste manufacturing facility at Sanand in
Gujarat which was commissioned in March 2014.
Similarly, your Company has invested in setting up a new Toothbrush
manufacturing facility at Sricity in Chittoor District in Andhra
Pradesh. Your Company is in an advanced stage of construction of the
factory. This facility is expected to commence commercial production
in the fourth quarter of 2014.
Your Company is committed to sustainability with focused and
measureable goals. YourCompany values sustainability through a
commitment to environment quality and extends to the long term
well-being of the people and communities it serves.
Considering this, your Company developed a plan that guides its
sustainability initiative with key goals in the following three areas
viz. People, Performance and Planet.
The broad aspects covered in these goals are as under:
- People - Promoting healthier lives, Contributing to the Communities
where we live and work.
- Performance - Delivering Products that delight consumers and
respect our Planet.
- Planet - Making every drop of water count, Reducing our impact on
climate and the environment.
Your Company believes that integrating sustainability into its everyday
operations will help in making better business decisions and improve
people''s lives. The sustainability strategy will also continue to
increase consumer loyalty, provide a competitive advantage and help to
ensure long-term shareholder value. Amongst the sustainability
initiatives in the areas of People, Planet and Performance, a few are
Blood Donation Camp at the head office;
Free Health Check-up for all the employees;
Initiatives on clean technology, energy efficiency, renewable energy
Sourcing of packaging material locally to reduce the fuel emission; and
Usage of reused and recycled materials for packaging.
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Management, confirm :
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
b) that they have, in selection of the accounting policies, consulted
the statutory auditors and have applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the end of
the financial year and of the profit of the Company for that period;
c) that to the best of their knowledge and information, they have taken
proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
d) that they have prepared the annual accounts on a going concern
Corporate Social Responsibility:
Your Company, in partnership with the Indian Dental Association (IDA),
successfully concluded the 10th edition of a two-month long Oral Health
Month (OHM) Program. During OHM, a wide spectrum of activities were
designed and conducted to spread oral health awareness and good oral
OHM 2013 conveyed the message of holistic oral health through the
''Colgate Healthy Mouth Pledge'' with 29,000 IDA dentists
participating in the program. The two-month long oral care awareness
drive included in-clinic free dental check-ups, free dental check-ups
in mobile vans and at underprivileged schools as well as modern trade
outlets. Approximately 4.9 million consumers were covered under these
Education has been the primary focus of your Company''s Corporate
Social Responsibility. Since 1976, your Company has been conducting a
school initiative program viz. Colgate Bright Smiles, Bright FuturesTM
wherein your Company partners with IDA, to spread oral health awareness
among school-going children in primary schools in urban and rural
India. Till date, 114 million school children in urban and rural areas
have been benefited from this Program. In addition, your Company also
conducts, jointly with IDA, a Teachers'' Training Program to enable
teachers to instill good oral care habits among school-going children
on an on-going basis.
Your Company has been associated with one of the largest
non-governmental organisations, Pratham, working to provide quality
education to the underprivileged children of India. Pratham,
established in 1994, provides education to the children in the slums of
Mumbai city. Since then, the organisation has grown both in scope and
geographical coverage. Today, Pratham reaches out to millions of
children living both in rural and urban areas through a range of
interventions. Its flagship program, Read India, helps to improve the
reading, writing and basic arithmetic skills of the children in the age
group of 6-14 years.
Your Company has been supporting Pratham initiatives in Mumbai since
2000. The support has been crucial for ensuring a perceptible change in
the educational levels of approximately 3000 children in the age group
of 3 to 14 years. The partnership over the years has enabled students
of class one to seven to reach proficiency levels in reading and
mathematics and children between the age group of 3 to 6 years to get
Since 2008, your Company has been supporting a program called ''A
Positive Step'' with the NGO, Network in Thane of People Living with
HIV. Through this program, your Company supports children affected and
infected by HIV with nutritional needs and school fees. The program has
infused the children with hope leading to a definitive improvement in
their academic performance and they now live with more confidence
despite their HIV condition.
Colgate-Palmolive supports ''Water for People'' to provide access to
substainable drinking water, sanitation facilities and hygiene
education programs in Sheohar, Bihar. By fostering community ownership
and rehabilitation of hand pumps in 10 communities, approximately 1,500
people are being served.
Moreover, with school level engagement, over 5,660 students and
teachers are benefitting from access to drinking water and improved
Your Company has constituted a Corporate Social Responsibilty (CSR)
Committee to review and monitor the CSR policy and its activities
undertaken by the Company. Your Company will continue to take such
measures to make a positive and significant contribution to the
A separate report on Corporate Governance along with the Auditors''
Certificate on its compliance is attached as Annexure 1 to this Report.
The employee relations in the Company continued to be positive.
Information as per Section 217(2A) of the Companies Act, 1956 (the
''Act'') read with the Companies (Particulars of Employees) Rules,
1975 forms part of this Report. As per the provisions of Section 219(1
)(b)(iv) of the Act, the Report and Accounts are being sent to the
shareholders of the Company excluding the statement on particulars of
employees under Section 217(2A) of the Act. Any shareholder interested
in obtaining a copy of the said statement may write to the Secretarial
Department at the Registered Office of the Company.
A long term Memorandum of Settlement was signed on February 11, 2014
with the workmen at the Company''s Goa facility for a period of thirty
seven months effective March 1, 2013 to March 31, 2016.
Your Company also has a Policy on Prevention of Sexual Harassment which
is reviewed by the Internal Complaints Committee at regular intervals.
Your Company recognizes its responsibility and continues to provide a
safe working environment for women, free from sexual harassment and
discrimination and to boost their confidence, morale and performance.
Your Directors wish to record appreciation of the continued unstinted
support and co-operation from its retailers, stockists, suppliers of
goods/services, clearing and forwarding agents and all others
associated with it. Your Company will continue to build and maintain
strong association with its business partners.
Energy, Technology Absorption and Foreign Exchange
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of the Directors) Rules, 1988 with respect to conservation of energy,
technology absorption and foreign exchange earnings/ outgo is appended
hereto as Annexure 2 and it forms part of this Report.
Pursuant to Section 152 of the Companies Act, 2013 (the ''Act'') and
under Article 124 of the Company''s Articles of Association, Mr. Niket
Ghate retires by rotation at the ensuing 73rd Annual General Meeting
and, being eligible, offers himself for re-appointment.
Pursuant to Sections 149, 150 and 152 of the Act, read with Companies
(Appointment and qualification of Directors) Rules, 2014 alongwith
Schedule IV of the Act (including any statutory modification(s) or
re-enactment thereof for the time being in force), the Independent
Directors can hold office for a term of five consecutive years on the
Board of Directors of your Company. Accordingly, it is proposed to
appoint the following existing Independent Directors as Non-executive
Independent Directors for five (5) consecutive years with effect from
July 25, 2014, subject to approval of members at the ensuing 73rd
Annual General Meeting (AGM) of the Company.
1. Mr. R. A. Shah;
2. Mr. P. K. Ghosh;
3. Mr. J. K. Setna;
4. Mr. V. S. Mehta; and
5. Dr. (Ms.) Indu Shahani.
These Independent Directors shall not be liable to retire by rotation.
All the above mentioned Independent Directors have given the
declaration of independence as per Section 149 (6) of the Act.
M/s. Price Waterhouse, Chartered Accountants, retire and are eligible
for re-appointment as Auditors from the conclusion of this Annual
General Meeting until the conclusion of the next Annual General
The Board of Directors at their Meeting held on March 27, 2014
appointed M/s. N. I. Mehta & Co., a firm of Cost Accountants, as the
Cost Auditors of the Company to conduct the audit of the cost accounts
maintained by the Company in respect of Cosmetics and Toiletries for
the financial year 2014-15.
Your Directors sincerely appreciate the high degree of professionalism,
commitment and dedication displayed by employees at all levels. Your
Directors also wish to place on record their gratitude to the
shareholders for their continued support and confidence.
On behalf of the Board
M. V. Deoras R. A. Shah
May 23, 2014