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Colgate-Palmolive (India) Ltd.

BSE: 500830 Sector: Consumer
NSE: COLPAL ISIN Code: INE259A01022
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OPEN 1458.00
PREVIOUS CLOSE 1457.25
VOLUME 30716
52-Week high 1823.00
52-Week low 1446.00
P/E 37.27
Mkt Cap.(Rs cr) 39,704
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1458.00
CLOSE 1457.25
VOLUME 30716
52-Week high 1823.00
52-Week low 1446.00
P/E 37.27
Mkt Cap.(Rs cr) 39,704
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Colgate-Palmolive (India) Ltd. (COLPAL) - Auditors Report

Company auditors report

To the Members of Colgate-Palmolive (India) Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of Colgate-Palmolive(India) Limited ("the Company") which comprise the Balance sheet as at March 312021 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the Ind AS financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of ayairs of the Company as at March 31 2021 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements' section of our report.We are independent of the Company in accordance with the ‘Code of Ethics' issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedMarch 31 2021. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
(a) Revenue recognition (as described in Note 26 of the Ind AS financial statements)
We have performed the following audit procedures:
Revenue from the sale of goods is measured net oy discounts and rebates that are given to the customers (i.e. to the Wholesale traders and Retail traders) as a part of sales promotion comprising of primary and secondary schemes. • Our audit procedures included amongst others assessing the appropriateness of the Company's revenue recognition accounting policies including those relating to discounts and rebates for primary and secondary sales.
Of the total discounts and rebates passed on to the customers certain discounts and rebates are passed on to the customers only on secondary sale made by wholesale trader to retail trader i.e. secondary schemes. • Obtained an understanding assessed and tested the operating eyectiveness of internal control relating to the identification recognition and measurement of discounts and rebates for secondary schemes.
Significant judgement is required in estimating accruals relating to secondary schemes recognized based on sales made during the year. • Tested on sample basis the underlying documentation and assumptions for discount and rebate provisions accrued during the year in relation to secondary sales.
• Tested on sample basis the subsequent claims accounted by the company to assess the adequacy of accruals outstanding as at year end.
• Performed an analysis between historical accrual and actual expenses incurred for the previous periods.
• Obtained reasons from management to ascertain reasonableness in relation to ageing of outstanding accruals and verified subsequent settlement of provisions.
• We assessed the adequacy of the disclosures in respect of revenue to be disclosed as per Ind AS 115.

(b) Contingent liabilities / provisions in relation to tax Litigations (as described inNote 33 of the Ind AS financial statements)

The Company has received various demand orders and notices under various tax laws. The Company is contesting these demands and has made provision where the outflow of resources embodying economic benefits is probable. We have performed the following audit procedures:
• Obtained an understanding assessed and tested the internal control environment relating to the identification recognition and measurement of provisions for disputes and disclosures of contingent liabilities in relation to tax litigations.
Significant judgements and estimates are required to assess impact of these litigations on the financial position results of operations and cash flows. • Obtained details of completed tax assessments and demands issued by tax authorities from the management.
• Read the orders/notices received from tax authorities and held discussion with management to understand management's assessment of the quantification and likelihood of significant exposures and the provision required for specific cases. We engaged tax specialists to evaluate the current status of tax assessments and management's position in relation to on-going disputes with regard to likelihood assessment of exposure done by the management.
• Analysed the management's estimates related to the recognized provisions for disputes and disclosures of contingent liabilities in relation to tax litigations and uncertain tax positions in the financial statements.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe Ind AS financial statements and our auditor's report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether such other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating eyectively for ensuring the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the Ind AS financial statements that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating eyectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the Ind AS financial statements for the financial year ended March 312021 and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure I" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; (b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; (c) The Balance Sheet the Statement of Profit and Lossincluding the Statement of Other Comprehensive Income the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account; (d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 and Companies (Indian Accounting Standards) AmendmentRules 2018 as amended; (e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164 (2) of the Act; (f) With respect to the adequacy of the internal financialcontrols with reference to these Ind AS financial statements and the operatingeffectiveness of such controls refer to our separate Report in "Annexure II" tothis report; (g) In our opinion the managerial remuneration for the year ended March 312021 has been paid / provided by the Company to its directors in accordance with theprovisions of section 197 read with Schedule V to the Act; (h) With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 as amended in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Company has disclosedthe impact of pending litigations on its financial position in its Ind AS financialstatements – Refer Note 33 to the Ind AS financial statements; ii. The Company didnot have any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses; iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Jayesh Gandhi

Partner

Membership Number: 037924

UDIN: 21037924AAAAEB4593

Place of Signature: Mumbai

Date: May 17 2021

ANNEXURE I TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF COLGATE – PALMOLIVE (INDIA) LIMITED

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) The property plant and equipment are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of threeyears which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. Pursuant to the programme a portion of the fixed assets hasbeen physically verified by the Management during the year and no material discrepancieshave been noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. (iii) According to the information and explanationsgiven to us and audit procedures performed by us the Company has not granted any loanssecured or unsecured to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under section 189 of the Companies Act 2013.Accordingly the provisions of clause 3(iii) (a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 of the Companies Act 2013 are applicable and hence notcommented upon.

In respect of loans and advances given provisions of section 186 of the Companies Act2013 have been complied with by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable and hence notcommented upon.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Section 148(1) of the Companies Act 2013for the products/services of the Company.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance duty of custom goods and service tax cess and other statutory dues havegenerally been regularly deposited with the appropriate authorities though there has beena slight delay in few cases in payment of provident fund and employees' state insurance.

(b) According to the information and explanations given to us and audit proceduresperformed by us no undisputed amounts payable in respect of provident fund employees'state insurance income-tax duty of custom goods and service tax cess and otherstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(c) According to the records of the Company the dues of income-tax sales-tax servicetax duty of excise value added tax and cess on account of any dispute are as follows:

Income Tax
Sr. No. Name of the Statute Period to which the amount relates Forum where dispute is pending Amount (Rs In lakhs)
1 Income Tax Act 1961 AY 2011-12 to AY 2016-17 Income Tax Appellate tribunal 56725.68
AY 2006-07 to AY 2007-08 First Appellate Authority 42.75
AY 1996-97 to AY 2000-01 High Court 1100.21
Total 57868.64

Sales tax

Sr. No. Name of the Statute Forum where dispute is pending Year Amount (Rs In lakhs)
1 Statute applicable in Maharashtra UP and Kerala High court 1993-94 2004-05 and 2016-17 431.97
2 Statute applicable in Maharashtra Uttar Pradesh Madhya Pradesh Andhra Pradesh Kerala Rajasthan Uttaranchal Delhi Tripura West Bengal Bihar Odisha Assam Gujarat Karnataka Jharkhand Goa Chandigarh Haryana Assessing authorities and First Appellate Authorities of various states 1988-89 1995-96 1996-97 1998-99 2000-01 to 2017-18 and 2019-20 1114.39
3 Statute applicable in Maharashtra Uttar Pradesh Andhra Pradesh Kerala Bihar Odisha and Karnataka Sales Tax Appellate Tribunal of various States 1987-88 1990-91 1995-96 to 1997-98 1999-00 to 2001-02 2003-04 and 2013-14 240.92
Total 1787.28
Service tax
Sr. No. Name of the Statute Period to which the amount relates Forum where dispute is pending Amount (Rs In lakhs)
1 Service Tax (Finance Act 1994) July 2007 to October 2008 Customs Excise and Service Tax 15.20
2003-2010 Appellate Tribunal First appellate authorities 7.51
Total 22.71

Excise related matters

Sr. No. Name of the Statute Period to which the amount relates Forum where dispute is pending Amount (Rs In lakhs)
1 The Central Excise Act 1944 Excise duty liability 1994-95 2005-06 to 2010-11 and Jun'14 - Jun'17 1998-1999 to 2004-05 and 2006-07 to 2016-17 Customs Excise and Service Tax Appellate Tribunal 1990.00
First appellate authorities 1182.04
2000-01 to 2003-04 High Court 280.88
Total 3452.91

(viii) The Company did not have any outstanding loans or borrowing dues in respect of afinancial institution or bank or to government or dues to debenture holders during theyear. Thus reporting under clause (viii) is not applicable to the Company and hence notcommented upon.

(ix) According to the information and explanations given by the management and auditprocedures performed by us the Company has not raised any money by way of further publicoyer / debt instruments and term loans hence reporting under clause

(ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud on the companyby the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management and auditprocedures performed by us the managerial remuneration has been paid / provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi Company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management and auditprocedures performed by us transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the notes to the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence the reporting requirements under clause 3(xiv) are not applicableto the Company and hence not commented upon.

(xv) According to the information and explanations given by the management and auditprocedures performed by us the Company has not entered into any non-cash transactionswith directors or persons connected with him as referred to in Section 192 of theCompanies Act 2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company andhence not commented upon.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Jayesh Gandhi

Partner

Membership Number: 037924

UDIN: 21037924AAAAEB4593

Place of Signature: Mumbai

Date: May 17 2021

ANNEXURE II TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE IND AS FINANCIALSTATEMENTS OF COLGATE-PALMOLIVE (INDIA) LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to Ind AS financialstatements of Colgate-Palmolive (India) Limited ("the Company") as of March 312021 in conjunction with our audit of the Ind AS financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating eyectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these Ind AS financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing as specified under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to these Ind AS financial statements was established and maintained and ifsuch controls operated eyectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to these Ind AS financial statements andtheir operating eyectiveness. Our audit of internal financial controls with reference toInd AS financial statements included obtaining an understanding of internal financialcontrols with reference to these Ind AS financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operating eyectivenessof internal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to these Ind AS financial statements.

Meaning of Internal Financial Controls with Reference to these Ind AS FinancialStatements

A company's internal financial controls with reference to Ind AS financial statementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrols with reference to Ind AS financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material eyecton the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Ind AS FinancialStatements

Because of the inherent limitations of internal financial controls with reference toInd AS financial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to Ind AS financial statements to future periods are subject to the risk thatthe internal financial control with reference to Ind AS financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to Ind AS financial statements and such internal financialcontrols with reference to Ind AS financial statements were operating eyectively as atMarch 31 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Jayesh Gandhi

Partner

Membership Number: 037924

UDIN: 21037924AAAAEB4593

Place of Signature: Mumbai

Date: May 17 2021

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