The Directors have pleasure in presenting their Report and Audited
Accounts of the Company for the year ended March 31, 2016.
1. Financial Results
F. Y. 2015-16 F. Y. 2014-15
Total Revenue (a b c) 4,201.89 4,015.12
Sales (Excluding Excise Duty) (a) 4,132.16 3,954.78
Other Operating Revenue (b) 30.12 27.17
Other Income (c) 39.611 33.17
Profit before Tax from ordinary
activities 859.49 780.39
Exceptional Item 31.34 __
Profit before Taxation 828.15 780.39
Tax Expense 251.64 221.41
Profit for the year 576.51 558.98
Balance brought forward 345.95 175.51
Adjustment of Depreciation as per
of the Companies Act, 2013 __ (0.17)
Profit available for appropriation 922.461 734.32
Dividend 271.99 326.38
Dividend Distribution Tax 55.37 61.99
General Reserve - -
Balance carried forward 595.10 345.95
2. Business Performance
India''s economic growth rate as measured through GDP showed signs of
steady recovery in F.Y. 2015-16 at around 7.6% as compared to 7.2% in
2014-15. Much of that improvement is attributed to increase in urban
consumption and infrastructure investments by the Government. However,
the rural consumption in 2015 has remained subdued due to two
consecutive weak monsoons and drought conditions in some of the states
India''s Wholesale Price Index fell for the 17th consecutive month until
March 2016 because of cheaper fuel and manufactured goods, indicating
weak demand and lack of pricing power for the producers. Inflation in
2015-16 continued to moderate steadily as the Consumer Price inflation
index has declined to 5% from 5.9% in 2014-15. The Central Bank, which
primarily looks at retail inflation data, had in the month of February
2016, cut the policy rate by 0.25% and projected retail inflation at
about 5%, this fiscal year. The Indian Meteorological Department has
forecasted an above normal monsoon this year which will help in
improving rural economy and drive the consumption.
While the economic environment for the year looks positive, a revival
in private investment, increase in rural consumption and good monsoon
will remain as critical economic drivers of growth in F.Y. 2016-17.
While the fiscal policies of the government are being focused around
growing rural economy and improving public infrastructure, passing of
reforms like GST could give further impetus to India''s economic agenda.
Notwithstanding increased competitive intensity and low consumer demand
in previous financial year, your Company delivered good results.
Your Company''s Net Sales for the F.Y. 2015-16 stood at Rs. 41,32.16 Crore
as compared to Rs. 39,54.78 Crore for the previous financial year. The
Organic growth of the Company stands at 10% offset by phasing out of
fiscal benefits in the State of Himachal Pradesh to give a reported
growth of 4% over the same period of the previous year.
Your Company''s Net Profit after Tax for the F.Y. 2015-16 is up at 32%
which excludes the impact of phasing out of fiscal benefits in the State
of Himachal Pradesh and restructuring cost related to toothpowder
manufacturing facility at Aurangabad, in the State of Maharashtra.
Including the aforesaid impact, the Net Profit after Tax of your Company
for the F.Y. 2015-16 is Rs. 5,76.51 Crore as compared to Rs. 5,58.98
Crore for the previous financial year.
Your Company has made outstanding market share progress with Toothpaste
at 55.7% and Toothbrushes at 46.2% during the period of January to
April 2016. This is a result of ongoing innovation supported by
impeccable execution in all retail environments by your Company. Your
Company''s efforts in the area of efficiency continue to pay-off with its
''Funding the Growth''initiatives, which deliver savings, allowing us to
improve our investment levels while also delivering improved
3. Bonus Issue
The Board of Directors of your Company, with a view to encourage the
participation of retail investors, recommended a bonus issue of one
equity share for every equity share held at their meeting held on July
30, 2015. The said recommendation for issue of Bonus equity shares was
approved by the shareholders through postal ballot and e-Voting on
September 10, 2015.
Your Board declared three interim dividends, aggregating Rs. 10/- per
share on the expanded capital base, for the F.Y. 2015-16. These
dividends were paid on November 26, 2015, December 23, 2015 and April
21, 2016. Having declared three interim dividends, your Board has not
recommended a final dividend for the F.Y. 2015-16.
5. Colgate - the # 1 Most Trusted Brand in India
Colgate was once again voted as the #1 ''Most Trusted Brand''in India in
the Economic Times – Brand Equity Survey, across categories in 2015.
This is the fifth consecutive year that Colgate has been voted as the #1
''Most Trusted Brand''. It is pertinent to note that Colgate is the only
brand to feature in the top three from 2001-2015 since the inception of
6. Focus on Innovation and New Launches
Your Company strongly believes that introducing new innovative products
by leveraging technology from the Parent Company is a key driver of
profitable growth. Your Company is focused on innovation that provides
value-added new products across all price points. Beyond new products,
innovation is embedded in your Company''s culture that encourages new
ideas and process improvements in every aspect of the organization.
Your Company''s continued commitment to grow the oral care category by
adopting advanced products has resulted in several new product launches
that are mentioned as below :
In the toothpaste category, the Company introduced innovative products
- Colgate Total Charcoal Deep Clean Toothpaste, a product which
combines the science of Colgate Total with micro charcoal particles.
The result is a clinically proven, unique and superior anti-germ
technology with ultra-micro charcoal particles that prevents germ
build-up on all mouth surfaces viz. teeth, gums, cheeks and tongue.
- Colgate Active Salt Neem Toothpaste, addresses the inflammatory gum
problem of pyorrhea. Its unique formula, containing Salt & Neem, helps
strengthen the weakening gums and keep Pyorrhea away.
- Colgate Sensitive Pro-Relief (CSPR) Enamel Repair Toothpaste, a
scientifically advanced technology that provides long-term relief from
the problem of tooth sensitivity.
In the toothbrush category, the Company introduced innovative products
- Colgate 360o Toothbrush range :
360o Charcoal Gold, a never-seen- before gold coloured toothbrush that
provides superior whole mouth cleaning. It has Charcoal infused spiral
bristles which gently polish teeth and give a deep & gentle clean.
360o Whole Mouth Clean, provides 151% more germ removal than any
360o Visible White with its spiral bristles and whitening cups
effectively removes surface stains.
360o Floss-Tip reaches 4X deeper with its Floss Tip technology that is
designed to clean along the gumline.
- Colgate ZigZag Black Toothbrush, a line extension of one of India''s
most popular toothbrush brand ''Colgate ZigZag''. As the market leader,
Colgate has introduced many ''firsts'' in the toothbrush category and
Colgate ZigZag Black is the first black toothbrush in the Mass Segment.
Colgate Pain Out - Your Company has recently introduced a completely
new segment of express Relief from Tooth Pain with the launch of
innovative Proprietary Ayurvedic Medicine Pain Out. Colgate Pain Out
is a revolutionary new product which provides express symptomatic
relief from tooth pain with just one drop. This first-of-its-kind
product has been conceptualized and introduced by your Company in
India. Adopting innovations like these help reaffirm your Company''s
position as a thought leader in the Oral Care category and as a Company
which strives to understand and address the needs of the consumers.
In the Personal Care category your Company has introduced for the first
time, Palmolive''s Foaming Hand Wash range in two variants - one with
delicate notes of ''Raspberry''and one with a fresh bouquet of ''Lime &
Mint''. The rich foam from these hand washes gently clean and hydrate
hands to make them feel soft & smooth. Your
Company has also introduced two new variants of liquid Hand Wash – The
Palmolive Black Orchid & Milk'', with milk proteins & a sensual scent of
exotic flowers and The Palmolive Sea Minerals'', with 100% natural origin
Innovations like these will help your Company maintain its position of
India''s most trusted Brand today, and hopefully for many years to come.
7. New projects and expansions
As stated in the previous Annual Reports, your Company had set up the
state-of-the-art Toothpaste manufacturing facility at Sanand in Gujarat
in the year 2014 and a new state- of-the-art Toothbrush manufacturing
facility at Sricity in Chittoor District in Andhra Pradesh in the year
2015. The above facilities have already commenced commercial production
and are catering to the domestic and the export markets (for Sanand
Your Company, with a long term vision of sustaining profitable growth,
has made additional capital investments during the year for expanding
the existing manufacturing capacities at its above Toothpaste and
Toothbrush manufacturing facilities. Your Board strongly believes that
such additional investments on capacity expansions have been made to
grow the business and deliver a profitable growth over the long term.
8. Expiry of Fiscal Incentives at Baddi Facility
As stated in the Annual Report for the F.Y. 2014-15, the income tax and
excise benefits to the Company''s manufacturing facility at Baddi expired
in the year 2015, and post its expiry, the Company has been paying
applicable Excise duty on the production and Income tax on the Profits
from the said facility.
Your Company is committed to sustainability with focused and measurable
goals. Your Company values sustainability through a commitment to the
quality of the environment and extends it to the long term well-being
of the people and communities, it serves. Through our sustainability
efforts, we are ensuring that the business grows responsibly, while
promoting the well-being of future generations.
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
- Performance - Delivering Products that
delight consumers and respect
- Planet - Making every drop of water
count, Reducing our impact
on the climate and the
Your Company believes that integrating sustainability into its everyday
operations will help in making better business decisions and improve
peoples''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 area of People, Performance and Planet, listed are a
few initiatives undertaken during the year :
- 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;
- Usage of reused and recycled materials for packaging;
- LEED certification for our new facilities;
- Reducing consumption of water and energy per ton of product produced;
- Nil material to landfill
More details on energy conservation measures undertaken by your Company
are mentioned in Annexure - 3 to this Report.
10. Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your
Directors, based on the representations received from the Management,
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, 2013
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) that they have prepared the annual accounts on a going concern
e) that they have laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate
and were operating effectively; and
f) that they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
11. Corporate Governance
A separate report on Corporate Governance along with the Auditors''
Certificate on its compliance together with the Management Discussion
and Analysis Report is attached as Annexure - 1 to this Report.
The details of number of meetings of the Board and its Committees are
given in the Corporate Governance Report.
12. Corporate Social Responsibility
Your Company''s success is linked to the Company''s values of Caring,
Global Teamwork and Continuous Improvement. Your Company cares about
people : Colgate people, customers, shareholders, business partners and
the community at large. Your Company works towards protecting the
environment, improving and enhancing the quality of life of individuals
and communities through several partnerships and associations.
Your Company and its employees are committed to bring in a positive
change in the lives of many underserved communities. Your Company
undertakes its Corporate Social Responsibility (CSR) activities through
diverse effective programs. Some of the key CSR activities which your
Company has undertaken during the year are in the areas of Promoting
preventive health care, Promoting education, Addressing inequalities
and Conservation of natural resources. These activities are broadly in
accordance with the Schedule VII of the Companies Act, 2013.
Your Board of Directors and the CSR Committee review and monitor, from
time to time, all CSR initiatives being undertaken by the Company.
Following are the key CSR programs undertaken by your Company during
the Financial Year 2015-16 :
- Bright Smiles, Bright FuturesTM
- Oral Health Month
- A Positive Step - A Program in collaboration with ''Network in Thane
by People Living with HIV'', a Non-Governmental Organization (NGO), for
addressing inequalities and promoting education for HIV infected and
affected children. Under this initiative, 79 children are supported by
your Company during the year.
- Supporting ''Pratham''- An NGO, in the areas of providing quality
education to the underprivileged children of India. Under their motto
of ''Every child in school and learning well'', your Company supports the
NGO in their initiatives like ''Laakhon Mein Ek''and ''Read India''that
are aimed at promoting continuous education.
- Supporting ''Seva Mandir''- A non- profit organization, working in the
areas of conservation of natural resources, improving health and
education of the people. Under the ''Colgate Seva Mandir Scholarship
Fund''the corpus amount donated by the Company, is being used to
support school education of children of class 8 to 12, especially for
those who are from underserved families or those living in the tribal
- Skill development program for rural youth
- Under a program named ''SAKSHAM'', your Company has partnered with
SEEDS, for economic & social upliftment of rural youth through skill
development programs that make them employable. The implementation
partner is affiliated by National Skill Development Corporation (NSDC)
and has necessary expertise including pan- India presence to promote
this high impact initiative.
- Donation to Chennai food victims - During the year, the State of
Tamil Nadu, especially Chennai and surrounding areas had come to a
standstill because of major foods. In this time of adversity, your
Company had partnered with an emergency group, ''Action Aid'', a
Non-Governmental Organization, which works towards helping communities
in disaster management and contributed to support women with
disabilities to help them regain livelihood.
The details of the above programs/activities are elaborated in ''the
Annual Report on CSR activities''which is attached as Annexure - 2 to
The contents of the CSR Policy as well as the CSR programs undertaken
by the Company are available on the Company''s website.
13. Employee Relations
The employee relations in the Company continued to be healthy, cordial
Your Company''s culture is one that reflects its values of Caring, Global
Teamwork and Continuous Improvement, as well as, its unwavering
commitment to integrity in everything we do. Our employees are our
greatest asset, and your Company is committed to maintain an
environment that respect their differences, value their contributions
and provide opportunities for their personal and professional growth.
Your Company recognizes its responsibility and continues to provide a
safe working environment for its employees, free from sexual harassment
and discrimination. Your Company also has a Policy on Prevention of
Sexual Harassment which is reviewed by the Internal Complaints
Committee (ICC) at regular intervals.
Managing With Respect is the way Colgate people put Company Values
into action. Each and every employee is expected to work with all
stakeholders (other employees, customers, consumers, suppliers, etc.)
in a respectful manner. Each employee is also expected to strictly
follow the Company''s Code of Conduct and any violation is treated with
zero tolerance. By fully including ethics and integrity in the ongoing
business relationships and decision-making, your Company demonstrates a
commitment to a culture that promotes the highest ethical standards.
During the year, 5 complaints were received, investigated and resolved
by the ICC. There are no pending complaints at the end of the year
14. Trade Relations
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 a
strong association with its business partners.
15. Particulars of Employees
Information as per Section 197 of the Companies Act, 2013 (the ''Act'')
read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 forms part of this Report as Annexure - 6.
Details of employee remuneration in accordance with the Act and Rules
mentioned above are available at the Registered Office of the Company
during business hours on any working day of the Company up to the date
of 75th Annual General Meeting. Any shareholder interested in obtaining
a copy of the said statement may write to the Secretarial Department at
the Registered Office of the Company. Such details are also available on
your Company''s website.
16. Energy Conservation, Technology Absorption and Foreign Exchange
The information required under Section 134(3)(m) of the Companies Act,
2013 read with the Companies (Accounts) Rules, 2014 with respect to
conservation of energy, technology absorption and foreign exchange
earnings/outgo is appended hereto as Annexure - 3 and it forms part of
17. Directors and Key Managerial Personnel
Consequent to the elevation of role of the previous Chairman Mr. Mukul
Deoras as the Chief Marketing Officer of Colgate-Palmolive Company, USA,
the Board of Directors of your Company after considering the
recommendation of the Nomination & Remuneration Committee, have
appointed Mr. Vinod Nambiar as the ''Non- retiring Director and the
Chairman of the Board''of the Company effective September 28, 2015.
The Board of Directors of your Company have also appointed Mr. Nambiar
as a member of the Nomination & Remuneration Committee effective
September 28, 2015. Your Board strongly believes that appointment of
Mr. Nambiar would add significant value and strength to the Board. The
details of Mr. Nambiar are available on the Company website.
Your Board places on record its appreciation for the outstanding
contributions made by Mr. Mukul Deoras during his tenure as the
Chairman of the Board of the Company.
Following are the ''Non-executive & Independent Directors''of your
Company, who were appointed by the shareholders at their 73rd Annual
General Meeting for a term of five consecutive years effective July 25,
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
6. Ms. Shyamala Gopinath was appointed by the shareholders at their
74th Annual General Meeting for a term of five consecutive years
effective July 30, 2015.
The Independent Directors of the Company have furnished the
declarations as required under Section 149(6) of the Act regarding
Mr. Issam Bachaalani, Managing Director, Mr. Godfrey Nthunzi,
Whole-time Director & CFO and Mr. Niket Ghate, Whole-time Director &
Company Secretary are the Key Managerial Personnel of the Company.
Pursuant to the provisions of Section 152 of the Act and under Article
124 of the Company''s Articles of Association, Mr. Niket Ghate retires
by rotation at the ensuing 75th Annual General Meeting and, being
eligible, offers himself for re-appointment.
A detailed profile of all the directors of your Company is available on
the company website www.colgatepalmolive.co.in
18. Familiarization Programme
Your Company, for many years now, has been familiarizing the
Independent Directors on its Board with detailed presentations by its
business functional heads on the Company operations, strategic business
plans, new products and technologies, including significant aspects of
the Industry and its future outlook. The details of familiarization
programmes extended to the Non-executive & Independent Directors during
the year are available on the Company website at
The Board of Directors of your Company from time to time has framed and
approved various Policies for better governance and administration of
your Company. Some of the important Policies that were framed by your
Board include the following :
i. Nomination & Remuneration Policy : This policy sets the objective,
terms of reference, functions and scope of the Nomination &
Remuneration Committee for determining qualifications, experience,
independence etc. relating to the appointment and remuneration for the
Directors, Key Managerial Personnel and Senior Management employees of
ii. Corporate Social Responsibility Policy : This policy sets the scope
for identification of the areas where the CSR activities will be
performed, evaluation of CSR activities, review the CSR spending
vis-a-vis the activities implemented and monitoring the process of CSR
projects/programs of the Company.
iii. Risk Management Policy : This policy provides the framework for
identification of risks of the Company, risk assessment and
prioritization, loss prevention measures and other risk management
measures for the Company.
iv. Policy on Related Party Transactions : This policy intends to
regulate the transactions between the Company and its related parties
based on the laws and regulations applicable to the Company from time
Apart from the above, your Company during the year has framed and
approved certain additional Policies which include Policy on
determination of Materiality of Event or Information, Record Management
Policy and Code of Conduct for Dealing in Company''s Securities.
Brief information about the aforesaid policies is stated in the
Corporate Governance Report annexed to this Report.
The Board of Directors of your Company has constituted various
committees of the Board to assist in discharging its duties. These
include Audit Committee, Nomination & Remuneration Committee, Risk
Management Committee, Stakeholders''Relationship Committee and
Corporate Social Responsibility Committee. The Board has approved the
terms of reference for each of these committees. All these Committees
of the Board hold their meetings at regular intervals and make their
recommendations to the Board from time to time.
The broad terms of reference of the said Committees are stated in the
Corporate Governance Report annexed to this Report.
21. Annual Performance Evaluation by the Board
Pursuant to the provisions of the Companies Act, 2013 and the SEBI
(Listing Obligations & Disclosure Requirements) Regulations 2015, the
Board has carried out an Annual Performance Evaluation of its own
performance, the Directors individually as well as the evaluation of
the working of the Committees. The manner in which the evaluation has
been carried out has been explained in the Corporate Governance Report
annexed to this Report.
22. Vigil Mechanism
Your Company has an effective Vigil Mechanism system which is embedded
in its Code of Conduct. The Code of Conduct of your Company serves as
a guide for daily business interactions, reflecting your Company''s
standard for appropriate behaviour and living corporate values. The
Code of Conduct applies to all Colgate people, including Directors,
Officers, and all employees of the Company. Even your Company vendors
and suppliers are also subject to these requirements as adherence to
the Code is a prerequisite for conducting business with your Company.
The Colgate-Palmolive EthicsLine phone number and e-mail id are
available on the Company website to report any genuine concerns about
unethical behaviour, any actual or suspected fraud or violation of
Company''s Code of Conduct.
23. Loan, Guarantees and Investment
Particulars of loans, guarantees and investment made by the Company
pursuant to Section 186 of the Companies Act, 2013 are given in the
Notes to the Financial Accounts.
24. Related Party Contracts & Arrangements
All related party transactions done by the Company during the financial
year were at arm''s length and in ordinary course of business. All
related party transactions were placed in the meetings of Audit
Committee and the Board of Directors for their necessary review and
approval. During the financial year, your Company has not entered into
any material transaction as per the SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015 with any of its related
parties which may have potential conflict with the interest of the
Company at large. Disclosures pursuant to Accounting Standards on
related party transactions have been made in the notes to the Financial
Statements. To identify and monitor significant related party
transactions, the Company has framed a policy on the related party
transactions and the same is available on the Company''s website.
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
Meeting. The Auditors''Report for the financial year 2015-16 does not
contain any qualification, reservation or adverse remarks.
26. Secretarial Auditor & Secretarial Audit Report
The Board had appointed M/s. S.N. Ananthasubramanian & Co., Company
Secretaries in Whole-time Practice, to conduct Secretarial Audit under
the provisions of Section 204 of the Companies Act, 2013. The report of
the Secretarial Auditor in Form MR-3 is annexed to this report as
Annexure - 4. The Secretarial Auditors''Report for the Financial Year
2015-16 does not contain any qualification, reservation or adverse
27. Extract of Annual Return
Pursuant to the Section 92(3) of the Companies Act, 2013 extract of the
annual return in Form MGT-9 is annexed to this Report as Annexure - 5.
28. Business Responsibility Report
The Business Responsibility Report for the Financial Year 2015-16, as
stipulated under Regulation 34 of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations,
2015 is annexed to this Report as Annexure - 7.
29. Significant and Material Orders passed by the Regulators or Courts
There are no significant and material orders passed by the Regulators or
Courts or Tribunals impacting the going concern status and operations
of the Company in future. Additionally, there are no material changes
and commitments which will affect the financial position of the Company.
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 towards the
shareholders for their continued support and confidence.
On behalf of the Board
Issam Bachaalani R. A. Shah
Managing Director Vice-Chairman
(DIN : 06975320) (DIN : 00009851)
Niket Ghate Godfrey Nthunzi
Whole-time Director & Whole-time Director &
Company Secretary CFO
(DIN : 00001925) (DIN : 06450693)
May 24, 2016