Colgate-Palmolive (India) Limited
Your Directors are pleased to present their Report and Audited Financial Statements ofthe Company for the year ended March 31 2018.
|1. Financial Results || ||( Crore) |
| ||F.Y. 2017-18 ||F.Y. 2016-17 |
|Total Revenue (a+b+c) ||4367.24 ||4560.01 |
|Sales (Including Excise Duty) (a) ||4299.89 ||4489.85 |
|Other Operating Revenue (b) ||28.53 ||30.35 |
|Other Income (c) ||38.82 ||39.81 |
|Profit before Tax from ordinary activities ||994.68 ||851.43 |
|Profit before Taxation ||983.03 ||851.43 |
|Tax Expense ||309.66 ||274.00 |
|Profit for the year ||673.37 ||577.43 |
|Other Comprehensive Income (net of Tax) ||(1.08) ||5.17 |
|Total Comprehensive Income ||674.45 ||572.26 |
|Balance brought forward ||843.82 ||595.27 |
|Profit available for appropriation ||674.45 ||572.26 |
|Balance transferred to Retained Earnings from Share ||1.62 ||3.65 |
|Options Outstanding Account || || |
|Appropriation : || || |
|Dividend ||(353.58) ||(271.99) |
|Dividend Distribution Tax ||(71.98) ||(55.37) |
|Balance carried forward ||1094.33 ||843.82 |
2. Business Performance
Reported Net Sales (incl. excise duty) for the F.Y. 2017-18 stood at 4299.89crores against the 4489.85 crores of previous year. Excluding the impact of implentationof GST Net Sales increased by 5.3% in comparison to the previous year. ReportedNet Profit after tax for the F.Y. 2017-18 was 673.37 crores an increase of 17% over theprevious year. Excluding the impact of tax reversals and exceptional items NetProfit after tax for the F.Y. 2017-18 increased by 15% over the previous year. YourCompany continues to maintain its leadership position in both the Toothpaste andToothbrush categories with volume market shares at 53.4% and 44.8%respectively during the F.Y. 2017-18.
Your Company's Board declared four interim dividends aggregating to 24/- pershare for the Financial Year 2017-18. The first interim dividend of 4/- per share wasdeclared in October 2017 the second interim dividend of 4/- per share was declared inDecember 2017 the third interim dividend of 5/- per share was declared in March 2018 andthe fourth interim dividend of 11/- per share was declared in May 2018. The first threeinterim dividends were paid on November 10 2017 December 29 2017 April 3 2018respectively and the fourth interim dividend will be paid on June 15 2018.Having declared four interim dividends your Company's Board has not recommendeda final dividend for the Financial Year 2017-18.
4. Colgate is # 1 Most Trusted Brand' in India (7th consecutive year)
Colgate has yet again emerged as the #1 Most Trusted Brand' in Indiaacross categories in The Economic Times Brand Equity Most Trusted Brand Survey for theyear 2017. This is the 7th consecutive year that Colgate has been voted as the #1Most Trusted Brand'. Colgate is the only brand to feature in the top three ranksfrom 2001-2017 since inception of the survey. This has been possible only due tothe trust of our consumers that helps us "Keep India Smiling!"
5. Focus on Innovation and New Launches
Your Company is focused on delivering insight- driven innovation that providesvalue-added new products across all price points. In F.Y. 2017-18 this innovationhas led to the launch of the following products:
In the Toothpaste category:
Colgate Swarna Vedshakti: This premium toothpaste in the Naturals'category was launched in select markets and is now being rolled out morebroadly across the country. Colgate Swarna Vedshakti blends the goodness ofIndian natural ingredients of Aloe Vera Clove Honey Tulsi Neem and Amla withColgate's oral care expertise and effectively delivers holistic oral care. ColgateMaxFresh with Cooling Crystals - New Xtra Fresh: In the freshness segment your Companyhas re-launched Colgate MaxFresh with Cooling Crystals with a new formula poweredwith breakthrough cooling technology that provides more intense cooling and a super freshexperience.
In the Toothbrush category:
Colgate Neo: An aesthetically designed toothbrush Colgate Neo is available in 6exciting and differentiating handle bristle colour combinations. Its ultra soft bristlesgently cleans your teeth. With 3626 high density bristles Colgate Neocomes in premium packaging which stands out from other toothbrushes.
6. Colgate's Keep India Smiling' initiatives
Your Company is continuously striving towards instilling good oral care habitssuch as brushing at least twice a day especially among the rural populationof India and children who are the future of our Country. Some of the Company's initiativesin this regard are described below: Pocket Dentist: Most people in rural India havenever visited a dentist and have no access
to reliable dental advice. As a part of our efforts to Keep India Smiling'Colgate is using a mobile missed call service to provide consumers in ruralIndia with real time access to free professional oral care advice. Pocket Dentistreceived multiple honours at the India Digital Media Awards (IDMA) in June2017. It is currently live in Uttar Pradesh and is run in partnership with IndianDental Association (IDA). It detects multiple dialects and responds to the30 most common oral health questions to address 91% of rural dwellers' oral healthproblems in areas where over 80% of rural households may only have access tobasic mobile phones. Villagers can access Pocket Dentist' with a freeof charge missed call. This program is over and above the Oral Health Month programwhich is Colgate India's flagship program to improve the oral health of people.
Asia Book of Records: Colgate in partnership with IDA Sri RamachandraUniversity (SRU) and Rotary International District 3232 made a proud entryin the Asia Book of Records for Most People Brushing their Teeth together'.Aimed at educating people about oral hygiene and the right techniques forbrushing the event witnessed a total 23615 people including schoolchildren and adults brushing their teeth in the right manner at the sametime and at the same venue (SRU grounds Chennai) using Colgate Toothpasteand Colgate Toothbrushes.
Your Company is committed to doing business with integrity and respect for allpeople and for the world around. Achieving economic social andenvironmental performance in today's business climate requires a long term sustainabilitystrategy that is executed with discipline year after year. Colgate's sustainabilitystrategy is focussed on the three areas of People Performance and Planet. I.People: Promoting healthier lives Contributing to the Communities where we liveand work:
- Your Company is committed to continuously improve employees' health andreduce their health risks and encouraging healthier living for employees andtheir families.
- Colgate employees have been provided with free health check-up facilities coupledwith various Live Better' initiatives for promoting healthy lifestyle. II.Performance: Growing the business with innovative more sustainable products thatmake the lives of consumers healthier and more enjoyable:
- Your Company endeavours to improve
the sustainability profile of new products and product updates drive sustainabilitywith breakthrough product and process innovation increase the recyclability ofour packaging and increased recycled content have a positive impact by
expanding access to affordable health and wellness products for millions of peoplein underserved communities and use the power of our brands to build awarenessand drive engagement in product sustainability.
III. Planet: Conserving Earth's finite resources addressing climate change andmaintaining the well-being of our planet for generations to come:
- Your Company is committed to address environmental issues key to the Companysuch as energy use carbon emissions water use and waste generation as wellas deforestation.
- Colgate has robust policies in place for sustainable use of and environmentallysound disposal of waste generated during our processes and making every drop ofwater count and reducing our impact on the climate and the environment. Moreinformation on conservation of energy and measures undertaken by your Companyare mentioned in Annexure-3 to this report.
8. Responsibility Statement
Pursuant to Section 134 sub-section (3)(c) read with sub-section (5) of theCompanies Act 2013 your Company's Directors based on the representationsreceived from the Management confirm that: a) in the preparation of the AnnualAccounts for the Financial Year ended March 31 2018 the applicableAccounting Standards have been followed and that no material departures havebeen made from the same; b) they have in selection of the accounting policiesconsulted the statutory auditors and have applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year and ofthe profit of the Company for that period; c) to the best of their knowledge and informationthey have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; d) they have prepared the Annual Accounts on a going concernbasis; e) they had laid down internal financial controls to be followed by the Company andthat such internal financi al controls are adequate and were operating effectively;and f) they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operatingeffectively.
9. Corporate Governance
A separate report on Corporate Governance along with the Auditors' Certificateon its compliance with the corporate governance requirements under the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") are attached as Annexure - 1 to this Report.
10. Corporate Social Responsibility
(CSR) Your Company is engaged in a variety of corporate social activities whichfocus on promoting oral health education skills building and enhancingaccess to water. These social initiatives reflect your Company's core values of caringglobal team work and continuous improvement. These initiatives are carried out througha variety of effective programs in accordance with the requirements of Schedule VIIof the Companies Act 2013 by the Company's employees in partnership with reputedNGOs. The Board of Directors and the CSR Committee closely review and monitor fromtime to time all the CSR activities undertaken by the Company. The following arethe key CSR Programs undertaken by your Company during the Financial Year 2017-18:
i) Bright Smiles Bright Futures
ii) Oral Health Month
iii) Read India program with Pratham
iv) Education & Women Empowerment program with Seva Mandir
v) A Positive Step program with NTP+
vi) "Saksham" program
vii) Water program with WFP India Trust
viii) Education Program with Action Aid A detailed description of the above programs /activities is contained in the Annual CSR Report attached as Annexure-2 to thisReport. The contents of the CSR Policy as well as the CSR programs undertaken by theCompany are available on the Company's website at https://www.colgatepalmolive.co.in/core-values/community-responsibility.
11. Employee Relations
The employee relations in the Company continued to remain healthy cordial andprogressive in F.Y. 2017-18. At Colgate we consider every employee as one ofthe most valuable resources contributing towards the long term success of theCompany. Our employees are committed to acting with compassion integrityhonesty and high ethics in all situations. As per Colgate's core values all employeesare treated with equality and fairness and provided with opportunities to developtheir career aspirations while working with the Company in India and wherepossible outside of India on assignments with group companies of Colgate.
Your Company has zero tolerance towards any kind of harassment including sexualharassment or discrimination. Your Company has constituted an Internal ComplaintsCommittee (ICC) to investigate and resolve sexual harassment complaints. Employees areencouraged to speak up and report any such incidences to the ICC. Your Company hasalso implemented a Policy on Prevention of Sexual Harassment which is reviewedby the ICC at regular intervals. Any complaint made to the ICC is treatedfairly and confidentially.
There were nil pending complaints brought forward from previous F.Y. 2016-17. Duringthe Financial Year 2017-18 no complaints were received investigated andresolved by the ICC. There were no pending complaints at the end of the F.Y.2017-18.
Your Company also recognizes and follows "Managing with RespectPrinciples" which are applicable not only within Colgate but also whileits employees are dealing with its customers suppliers vendors etc. Managing withRespect is the way Colgate people put our values into action. It is creating anenvironment where people feel free to offer suggestions contribute ideas and resourcesand help grow the business. Managing with Respect creates an environment wherepeople genuinely care about each other and work well together to reach theirfull potential.
12. Trade Relations
During the year the implementation of the Goods & Service Tax("GST") Act in India required some key transitions to the existing businesssystems invoices input tax credit requirements compliance of GST rules etc. YourDirectors wish to record their appreciation of the continued unstinted support andco- operation especially provided during this transition period of GSTimplementation by its retailers stockists suppliers clearing and forwardingagents and all other business partners which resulted into seamless business operations.Your Company will continue to build and maintain a strong bond with its businesspartners and trade associates.
13. Particulars of Employees
Information as per Section 197 of the Companies Act 2013 (the Act') readwith the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 forms part of this Report as Annexure-6. The statement containing the namesof top ten employees in terms of remuneration drawn and the particulars ofemployees as required under Section 197(12) of the Act read with Rule 5(2)of the aforementioned Rules are available for inspection at the Registered Officeof the Company during business hours on any working day of the Company up to the date of77th Annual General Meeting.
14. Energy Conservation Technology Absorption and Foreign Exchange
The information required under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 with respect to conservation of energytechnology absorption and foreign exchange earnings / outgo is appended hereto asAnnexure-3 and it forms part of this Report.
15. Directors and Key Managerial Personnel
During the year following changes took place in the Board of Directors and the KeyManagerial Personnel (in the order of their occurrence): i) Resignation of Mr. M.Karnataki as Associate Director - Legal & Company Secretary andCompliance Officer effective August 31 2017 as he decided to pursue his careeroutside Colgate; ii) Appointment of Mr. K. Randhir Singh as Company Secretary andCompliance Officer of the Company effective February 23 2018; iii) Resignation of Mr. J.K. Setna as Non- executive & Independent Director of the Company effectiveMarch 31 2018 due to personal reasons. Your Board places on record its appreciation forthe outstanding contribution and guidance provided by Mr. J. K. Setna during hislong tenure as an Independent Director of the Company and also for the valuablecontribution of Mr. M. Karnataki during his tenure as the Associate Director - Legal& Company Secretary and Compliance Officer of the Company. Pursuant to the provisionsof Section 161(1) of the Act and the Articles of Association of the Companythe Board of Directors of your Company based on the recommendation of theNomination & Remuneration Committee appointed Ms. Sukanya Kripalu as an AdditionalDirector of the Company effective June 1 2018 and she shall holds office up to thedate of the ensuing Seventy-Seventh Annual General Meeting. The Company hasreceived declarations from Ms. Kripalu confirming that she meets with the criteriaof independence as prescribed both under Section 149(6) of the Act and underRegulation 16(1)(b) of the SEBI Listing Regulations. Accordingly hercandidature for appointment as an Independent Director of the Company isincluded at Item No. 4 of the Notice of Seventy-Seventh Annual General Meeting. Anotice has been received from a member proposing Ms. Kripalu as a candidate for theoffice of Director of the Company. All the other Independent Directors (except Ms.Shyamala Gopinath) were appointed by the Members for a term of five consecutive yearseffective July 25 2014. Ms. Shyamala Gopinath was appointed by the Members for aterm of five consecutive years effective July 30 2015. None of the Independent Directorsare liable to retire by rotation. The Independent Directors of your Company havegiven a declaration that they meet the criteria of independence as prescribedunder the Companies Act 2013 and SEBI Listing Regulations. Mr. Issam BachaalaniManaging Director Mr. M. S. Jacob Whole-time Director & CFO Mr.Chandrasekar Meenakshi Sundaram Whole-time Director and Mr. K. Randhir SinghCompany Secretary & Compliance Officer are the Key Managerial Personnel of theCompany. A detailed profile of all the directors of your Company is available on thewebsite www.colgatepalmolive.co.in
16. Familiarization Program
Your Company has been regularly familiarizing the Independent Directors on itsBoard with detailed presentations by its business functional heads on theCompany operations strategic business plans new products and technologies. Adetailed description of the familiarization programs extended to the IndependentDirectors during the Financial Year are disclosed on the Company website at
The Board of Directors of your Company from time to time has framed and approvedvarious Policies as per the applicable Acts Rules Regulations and Standardsfor better governance and administration of your Company. Some of theimportant Policies that were framed by your Board include the following: i)Nomination & Remuneration Policy: This policy sets the objective terms ofreference functions and scope of the Nomination & RemunerationCommittee for determining qualifications experience independence etc. relating tothe appointment and remuneration for the Directors Key Managerial Personneland Senior Management employees of the Company.
ii) Corporate Social Responsibility (CSR') Policy: This policy sets outthe role of the CSR Committee of the Board of Directors which includesidentification of the areas where the CSR activities will be performed evaluationof CSR activities review the CSR spending vis-a-vis the activities implemented andmonitoring the process of CSR projects / programs of the Company. iii) RiskManagement Policy: This policy provides the framework for identification of risksof the Company risk assessment and prioritization loss prevention measures andother risk management measures for the Company.
iv) Related Party Transactions Policy: This policy regulates the entry intotransactions between the Company and its related parties along with therequired corporate approvals as per the laws and regulations applicable tothe Company from time to time.
v) Policy on Determination of Materiality of Event or Information: This Policylays down the criteria for determining the materiality of an event orinformation of the Company for purposes of making required disclosures tothe stock exchanges pursuant to the SEBI Listing Regulations.
vi) Records Management Policy: This policy establishes general guidelines forretaining preserving and archiving important documents and information.
vii) Code of Conduct for dealing in the Company's Securities: Pursuant to the SEBI (Prohibitionof Insider Trading) Regulations 2015 your Company has framed a Code of Conducton prohibition of insider trading.
viii) Dividend Distribution Policy: This policy describes the circumstancesunder which a Member may or may not expect a dividend and the financialparameters and internal and external factors which are considered by the Board ofDirectors for declaration of dividend.
The Board of Directors of your Company has established various Board Committeesto assist in discharging their duties. These include the Audit Committeethe Nomination & Remuneration Committee the Risk Management Committee theStakeholders' Relationship Committee and Corporate Social ResponsibilityCommittee. The Board has approved the terms of reference for each of thesecommittees. All the committees of the Board hold their meetings at regularintervals and make their recommendations to the Board from time to time.
The broad terms of reference of the said Committees are stated in the CorporateGovernance Report.
19. Annual Performance Evaluation by the Board
Pursuant to the provisions of the Act and the SEBI Listing Regulations theBoard has carried out an Annual Performance Evaluation of its ownperformance the Directors individually as well as the evaluation of the working ofthe Committees. The manner in which the evaluation has been carried out hasbeen explained in the Corporate Governance Report.
20. Vigil Mechanism
Your Company has an effective Vigil Mechanism system which is embedded in its Code ofConduct. The Code of Conduct of your Company serves as a guide for daily businessinteractions reflecting your Company's standard for appropriate behaviour and livingcorporate values. The Code of Conduct applies to all Colgate peopleincluding Directors Officers and all employees of the Company. Even your Companyvendors and suppliers are also subject to the Third Party Code of Conduct requirementsas adherence to the same to the extent applicable is a prerequisite forconducting business with your Company.
The Code of Conduct Hotline is available on the Company's website to report anyconcerns about unethical behaviour any actual or suspected fraud orviolation of Company's Code of Conduct. No adverse action will be taken against anyone forcomplaining about reporting participating or assisting in the investigationof a suspected violation of the Code of Conduct unless the allegation made or informationprovided is found to be intentionally false.
21. Loan Guarantees and Investment
Particulars of loans guarantees and investment made by the Company pursuant toSection 186 of the Act are given in the Notes to the Financial Statements.
22. Related Party Contracts & Arrangements
All related party transactions done by the Company during the Financial Yearwere at arm's length and in ordinary course of business. All related partytransactions were reviewed and approved by the Audit Committee. During theFinancial Year 2017-18 your Company has not entered into any material relatedparty transaction as per the SEBI Listing Regulations with any of itsrelated parties. Disclosures pursuant to the Accounting Standards on related partytransactions have been made in the notes to the Financial Statements. To regulaterelated party transactions the Company has also framed a policy on relatedparty transactions and the same is available on the Company's website. As therewere no related party transactions which were not in the ordinary course of the businessor not on arm's length basis and also since there were no material related partytransactions as stated above disclosure under Section 134(3)(h) in Form AOC-2of the Act is not applicable.
M/s. SRBC & Co LLP Chartered Accountants
Mumbai (ICAI Firm Registration No. 324982E/ E300003) were appointed as Statutory Auditorsof the Company at the 76th Annual General Meeting held on August 3 2017 fora period of five consecutive years from the conclusion of the 76th Annual General Meetinguntil the conclusion of the 81st Annual General Meeting ratification subjectto by Members of the Company at every Annual General Meeting to be held thereafter.However in terms of the notified amended provisions of the Act regarding ofappointment of Statutory Auditors your Company has placed an ordinary business itemNo. 3 in the Notice of the 77th Annual General ratification Meeting for their by theMembers until the conclusion of the 81st Annual General Meeting withoutratification requiring yearly thereof. The Audit report for the Financial Year 2017-18 doesnot contain any qualification reservation or adverse remarks.
24. Secretarial Auditor & Secretarial Audit Report
The Board had appointed M/s. S. N. Ananthasubramanian & Co. Company Secretariesin Whole-time Practice to carry out the Secretarial Audit under the provisions ofSection 204 of the Act 2013. The report of the Secretarial Auditor in Form MR-3 isannexed to this report as Annexure-4. The Secretarial Auditors' Report for theFinancial Year 2017-18 does not contain any qualification reservation or adverseremarks.
25. Extract of Annual Return
Pursuant to the Section 92(3) of the Act the extract of the annual return inForm MGT-9 is annexed to this report as Annexure-5.
26. Business Responsibility Report
The Business Responsibility Report for the Financial Year 2017-18 as stipulated underRegulation 34 of the SEBI Listing Regulations is annexed to this report asAnnexure-7.
27. Significant and Material Orders passed by the Regulators or Courts
During the Financial Year 2017-18 there were no significant or material orders passedby the Regulators or Courts or Tribunals impacting the going concern status andoperations of the Company in the future.
28. Compliance with Secretarial Standards
Your Company has complied with Secretarial Standards issued by the Institute ofCompany Secretaries of India on Board and General Meetings.
29. Adequacy of Internal Financial Controls
Your Company has an adequate and talented team of internal auditors that oversees theinternal financial processes policies and recommends robust internal financial controlsfrom time to time. These internal financial controls help to put in place checks on theimplementation of the internal financial controls policies & procedures that areadopted by the Company for ensuring an orderly and efficient conduct of itsbusiness. These internal financial controls help in safeguarding of assets prevention& detection of frauds and / or errors maintaining the accuracy and completenessof the accounting & financial records. These controls help in the timely preparationof transparent complete and accurate financial information and statements as perthe laid down accounting standards and principles. The Audit Committee of your Companyevaluates the internal financial controls system periodically.
Your Directors wish to convey their deepest appreciation for the unstinteddedication professionalism commitment and resilience displayed by theCompany's employees at all levels and business partners customers vendorsetc. Your Directors also wish to express their gratitude towards the Shareholdersfor their continued trust support and confidence.
|On behalf of the Board || |
|R. A. Shah ||Issam Bachaalani |
|Vice-Chairman ||Managing Director |
|(DIN: 00009851) ||(DIN: 06975320) |
|M. S. Jacob ||M. Chandrasekar |
|Whole-time Director & CFO ||Whole-time Director |
|(DIN: 07645510) ||(DIN: 07667965) |
|Place: Mumbai || |
|Date : May 21 2018 || |