Rozar Finance

7/31/2019 Rozar Finance

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I am Rozar Maheshkumar Parmar studying in

S.Y.B.B.A. in Dharamsinh Desai University, Nadiad, have

prepared this Finance Report of the Colgate-Palmolive

(India) limited. As a student of such Professional course

it is quite necessary for me to have knowledge about the

practical aspects as well as theoretical too.

It is an opportunity for me to prepare the

Finance Report of one of the biggest Company of theworld, I personally thankful to them for providing the

opportunity and putting some great faith in me.

I am please to submit this Finance Report for

the purpose of evaluation by the examiner.

At last I say that Experience is the best

teacher.

Guided by : Prof. Bhavesh Pandiya Page 1 Prepared by :Parmar Rozar M.


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I am a second year B.B.A. student in to Dharamsinh

Desai University; I was given a task to prepare a Finance

Report of the Colgate-Palmolive (India) limited. It is one

of the best things ever to do so.

I am thankful to our dean sir Mr. G.S.Shah for

giving me the opportunity to make this report.I am thankful to Colgate-Palmolive (India) limited

and the members of the Company for being so co-

operative in providing the required information.

I am heartily thankful to Professor Pallavi Dave

who has guided me. Without her help I could not have

completed my report. I am kindly thankful to her for her

timely support and guidance.

At last, but not least I am extremely thankful to my

group who helped me to collect information for report

and their encouraging support.

Parmar Rozar M.

Roll no. :- 114

S.Y.B.B.A.



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Guided by : Prof. Bhavesh Pandiya

NO

NAME PageNo.

1 Company Profile 4

2 Ratio Analysis &Interpretation 7

3 Ratio Summary 48

4 Accounting Policy 49

5 Directors report 52

6 Auditors Report 59

7 Common SizeStatement

62

8 Cash Flow Statement 65

9 Annexure 69

10 Conclusion 72

Page 3 Prepared by :Parmar Rozar M.


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COLGATE-PAMOLIVE (INDIA)PRIVATE LIMITED

Board of Directors Chairman J.Skala Vice-chairman R. A. Shah Deputy Chairman P.K. Ghosh Managing Director R.D. Calmeyer Whole-time Director M.A.Elias Whole-time Director K.V. Vaidyanathan

J.K. SetnaV.S. Mehta

Management Committee Managing director K.V.

Vaidyanathan

Finance M.A.Elias Legal R.D. Calmeyer Marketing P.Parameswaram Sales S.Bharatwaj Research & Development S.Manek Manufacturing & Supply chain L. Wheeler Human Resources A.Singh

Audit Committee Chairperson R. A. Shah

P.K. GhoshJ.K. SetnaV.S. Mehta

Secretary K.V. Vaidyanathan

Shareholder/Investor`s Grievance Committee Chairperson P.K.Ghosh

R.D.CalmeyerJ.K.SetnaK.V.Vaidyanathan

Solicitors Crawford Bayley &Company



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Auditors Price Waterhouse

Chartered accountant

Register Office Colgate Research Centre,Main Street, HiranandaniGardens,Powai, Mumbai 400 076.

Factories Plot No. B 14/10 MIDC,Waluj Industrial Area,

Aurangabad 431 136.

Plot NO. 78, EPIP Phase I,Jharmajri, Baddi,District Solar, [H.P.]174

103.

Registrars & Share Transfer Agents Sharepro services (INDIA)Pvt.Ltd.



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Meaning of Ratio Analysis

The Financial Statement as prepared and presented

annually is of little use for guidance of prospective investors,creditor and even management. It relationship between variousrelated item in these financial statement are established, theycan provide useful clues to gauge accurately the financial healthand ability for business to make profit. This relation between tworelated items of financial statement is known as ration. A ratio isthus one number expressed in from of another e.g. in order toobtain the rate of return on paid up capital, the net profit of the

business is divided by the paid up share capital.

A ratio is customarily expressed in these differentways. It may be expressed as a proportion between two figures.Second method is to express it in the form of percentage e.g. Therate of return on capital employed is 30 % Third method is toexpress it as rates.

The use of ratio has become increasing popular duringlast few years only. Originally the bankers are used the currentratio to judge the capacity of the borrowing business enterprisesto repay the loan and make regular interest payment. Today ishas assumed such an importance the anybody connected withthe business turn to ratio for measuring the financial strength andearning capacity for the business.



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Importance of Ratio

Profitability

Useful information about the trend of profitability ofavailable from profitability ratio. The gross profit ratio, net profit ratio andratio of return on investment give a good idea of a profitability ofbusiness.

Effectiveness The turnover ratio are excellent guides to measure theefficiency of managers e.g. the stock turnover will indicate how efficiencythe sale is being made, the debtors turnover will indicate the efficiency

at collection department and assets turnover shares the efficiency withwhich the assets are used in business.

Helps in Budgetary controlRegular budgetary reports are prepared in a business where

the system of budgetary control is in use. If various Ratios are presentedin these reports, it will give fairly good ideas about various aspects offinancial position.

Helps in Decision Making Ratio is the management in making some of the importantdecision, suppose, the liquidity ratio shows can unsatisfactory position,the management may decide to get additional liquid funds.

Inter firm comparison The absolute ratios of a firm are not at much use, unlessthey are compared with similar ratio at other firm belonging to the same

industry. This is inter firm comparison which shares the strength andweakness of the firms as compared to other firms and will indicatecorrective measure.

LiquidityIn fact, the use of ratios, are made initially ascertain the

liquidity to ascertain the liquidity of business. The current ratio, liquidratio and acid-test ratio will tell whether the business will be able to meetits current liquidities as and when they mature.



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Gross Profit Ratio

MeaningIt is a ratio expressing relationship between gross profits

earned to net sales. It is a useful indication of the profitability of business.

ImportanceThis ratio is usually expressed as a percentage. The ratios

shows whether the mark up obtained on cost of production is sufficient.There is no standard showing reasonableness of Gross Profit.

Formula

Gross Profit Ratio = Gross Profit 100Net Sales

Calculation

2008Gross Profit Ratio = _92043.45_ 100

155321.10

=59.26%

2009

Gross Profit Ratio = 101685.14 100175815.90

= 57.84%

Guided by : Prof. Bhavesh Pandiya Page10

Prepared by :Parmar Rozar M.


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InterpretationThe ratio measures the gross earning of the

company, as compared to its net sales. In the year 2008 the gross profitratio was 59.26% and in 2009 it is decreased to 57.84%. So it is

decreased by 1.42%. Current position of the company is not good. Thisshows that for a sale of Rs.100 a margin of 57.84 Rs. in 2009 is availablefrom which operating expenses of business are to be recovered. This ratiois low; it indicates that the cost of sales is high or that the purchasing is

inefficient.




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Net Profit Ratio

Meaning The ratio is valuable for the purpose of ascertaining theover all profitability of business and shows the efficiency or otherwise ofoperating the business.

Importance

Generally, the ratio is computed on the basis of net profitearned from operation of business and non-operating expenses andincomes are excluded. The ratio indicated what portion of sales revenueis left to the proprietors after all operating expenses are not. The higherthis ratio, the better will be the profitability.

Formula

Calculation

2008

Net Profit Ratio = _ 231.71__100155321.10

= 14.92%

2009

Net Profit Ratio = __290.22_ 100175815.90


Net Profit Ratio = Net Profit 100Net Sales

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Interpretation This ratio is useful to measure the overall profitability

performance of the business and shows the efficiency of the company toearn amount of net profit earned on its net sales. This ratio indicates whatportion of sales revenue is left to the proprietors after all operatingexpenses are met. In 2008, the net profit ratio was 14.92% and in 2009 itwas 16.51%. This shows that for sale of Rs. 100 Company earned a netprofit of Rs.14.92 in 2008and Rs.16.51 in 2009 is available which isfavorable for the company.


=16.51%

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Operating Ratio

Meaning The ratio which shows the relationship between Cost ofGoods Sold, Operating Expanses and Net Sales is called Operating Ratio.

Importance By this Ratio we can find the efficiency level of the

Management. The ratio indicated what portion of sales revenue is left tothe proprietors after all operating expenses. The lower the ratio, thebetter will be the profitability.

Formula

Operating Ratio = Cost of Goods Sold + Operating Expanses 100

Net Sales

Calculation

2008

Operating Ratio = __63278+62838_ 100155321

= 81.20%

2009

Operating Ratio = _74131+67154_ 100175815




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Interpretation This ratio is useful to measure the overall Operating

Expanses of the business and shows the efficiency of the company tooccurred Operating Expanse on its net sales. This ratio indicates whatportion of sales revenue is left to the proprietors after all operatingexpenses are met. In 2008, the Operating Expanse ratio was 81.20% andin 2009 it was 80.36%. This shows that for sale of Rs. 100 Companyoccurred Operating Expanse of Rs.81.20 in 2008and Rs.80.36 in 2009 is

available which is favorable for the company.


= 80.36%

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Stock Turnover Ratio

Meaning The number of the time average stock is turned over during

the year is called Stock Turn Over. We can find this Ratio by dividing Costof Goods Sold to Average Stock.

Importance By this Ratio we can find the efficiency level of the

Production Department. The ratio indicated what portion of average stockis left to the proprietors after all expenses of Cost of Goods Sold. Thehigher the ratio, the lower the sales.

Formula

Stock Turn Over Ratio = Cost of Goods SoldAverage Stock

Calculation

2008 Stock Turn Over Ratio = _63278_

6052

= 10.46Times

2009




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Stock Turn Over Ratio = _74131_6043

Interpretation This ratio is useful to measure the overall Stock Turn Over

of the business and shows the efficiency of the Production Management.This ratio indicates what portion of average stock is being produced afterall expenses of costs of goods sold are met. In 2008, the Stock Turn Overratio was 10.46 times and in 2009 it was 12.27 times. This shows that forcost of goods sold of Rs. 100 Companys Stock Turn Over in 2008 is 10.46

times and 12.27 times in 2009.


= 12.27

Times

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Return on Capital Employed

Meaning It is an Index of profitability of business and is obtained bycomparing net profit with capital employed. The ratio is normally

expressed in the percentage. The term capital employed includes sharecapital, reserves and long term loans such as debentures.

ImportanceThe success or otherwise of the enterprise is judged with

the help of this ratio. It is perhaps the most important ratio from the viewpoint of management. It helps to know the profitability of the business.

Formula

Return On Capital Employed = Net Profit 100Capital Employed

Calculation

2008

Return on Capital Employed = 29205 10016689

= 175%

2009




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Return on Capital Employed = _34531_ 10022098

Interpretation The position of the company in the year 2008 and 2009are 175% and 156.28% respectively. This indicated that if the companysemployed capital of Rupees 100, it gets return in the form of EBIT ofRupees 175 and 156.28.The condition of the 2009 is not better than theyear 2008. So, the company is not improving it.


=156.28%

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Return on Shareholders Fund

Meaning In order to judge the efficiency with which the proprietors

funds are employed in business, the ratio is ascertained. It is of greatpractical importance to the prospective investors as it enables theprofitability of a company to be compared with that of the othercompany. It also indicates whether the return on proprietors funds isenough in relation to the risks that they under take.

ImportanceThe Ratio indicates whether the return on properties funds

is good enough in relation to the risk that they undertake.

Formula

Calculation

2008

Return on Shareholders Fund = _29205_ 10016221


Return On Shareholders Fund = Net Profit 100Shareholders Funds

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=180.04%

2009

Return on ShareholdersFund = _34531_ 10021630

Interpretation The ratio measures the return (that is net profit after tax)

that the shareholder gets as compared to their investment. This ratio


=159.64%

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shows what amount of dividend is likely to be received on shares. Theratio of return on shareholders fund in the year 2008 was 180.04% whichincreases to 159.64% in the year 2009. This ratio shows that if ashareholder invests Rs.100 in the company than the profit available to

him is Rs.180.04 and Rs.159.64 respectively for the year 2008 and 2009.This shows dissatisfactory position of the Company. This is not good forthe companys shareholders and also it decreases companys reputation.

Return on Equity Shareholders Fund

MeaningThis Ratio is obtained by dividing Net Profit after

deducting Preference Share Dividend by the amount of ordinary ShareCapital of plus free reserve. It is of great practical importance to theprospective investors as it enables the profitability of a company to be

compared with that of the other company. It also indicates whether thereturn on proprietors funds is enough in relation to the risks that theyunder take.

ImportanceThis ratio shows what amount of dividend is likely to be

received on share. We can find the earnings on capital invested by theordinary Shareholders by this Ratio.

Formula

Return On Equity Share Capital = Net Profit Pref. dividend 100

Equity Shareholders Funds

Calcula




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tion 2008

Return on Equity Shareholders Fund = _2317.10_1001359.93

=170.38%

2009

Return on Equity Shareholders Fund = _2902.19_ 1001359.93


=213.41%

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Interpretation The ratio measures the return (that is net profit after tax)that the shareholder gets as compared to their investment. This ratioshows what amount of dividend is likely to be received on shares. Theratio of return on Eq.shareholders fund in the year 2008 was 170.38%which increases to 213.41% in the year 2009. This ratio shows that if aEq.shareholder invests Rs.100 in the company than the profit available tohim is Rs.170.38 and Rs.213.41 respectively for the year 2008 and 2009.This shows satisfactory position of the Company. This is good for thecompanys shareholders and also it increases companys reputation.

Return on Equity Share Capital

Meaning This ratio is used to know the profitability from theviewpoint of equity shareholders. This ratio is useful to find theprofitability of the business. This ratio obtained by net profit after tax inwhich preference dividend is deducted and also useful to know how muchequity share capital is invested in the business.

ImportanceThis ratio shows the profitability from the view point of the

equity shareholder. By this we can get the Net Return on Net EquityCapital.

Formula




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Return on Equity Capital = PAT Pref. dividend 100

Eq. Share Capital

Calculation

2008

The Return on Equity Share Capital is 104.7%

2009

The Return on Equity Share Capital is153.4%




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InterpretationThis ratio shows the profitability from the view point of the

equity shareholder.In the year 2008 the profitability of the equity shareholder

is the 104.7and the year 2009 the profitability of the equity shareholder is153.4 it is increase in 2009 of the profitability of the company. The Returnon Equity Share Capital in 2008 is Rs.104.7 and in 2008 Rs.153.4 againstRs.100.

Earning Per Share

Meaning




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This ratio is useful to know the maximum amount onshare earned to equity share holders. This ratio useful to find profitabilityof firm by profit after tax and deducted preference divide by number ofequity share.

ImportanceThis ratio is useful to know what amount is being earned

per equity in the Financial Year. The total earning per Share can becalculated.

Formula

Earning Per Share = PAT Preference DividendNumber of Equity Shares

Calculation

2008

The Earning Per Share is Rs.17

2009

The Earning Per Share isRs.21.3




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Interpretation In a year 2009 EPS 21.3 Rs. so, it means the maximum

amount declare the equity share holders increase by Rs.21.3 in a year2009 as compare to year 2008. In 2008 EPS is 17 Rs. and in year 2009Rs.21.3 is there so, amount increase which declares to equityshareholder.




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Dividend Per Share

MeaningIt measures the dividend available to the shareholders as compare to their investment done per share the ratio showshow much they will earn as a dividend with the investment in a singleshare.

Importance This ratio is useful to know what amount is paid ordeclare to equity shareholder in a way of dividend per share.

Formula

Dividend Per Share = Dividend DeclaredNumber of Equity Shares

Calculation

2008

The Dividend Per Share is Rs.13

2009

The Dividend Per Share is Rs. 15




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Interpretation The ratio is increased in a year 2009 i.e. Rs.15 as compareto previous year i.e. Rs.13. It means that when the amount which declareto equity shareholder is Rs.100 then the DPS is Rs.13 as a dividend and Ina year 2008 amount of dividend is low which is Rs.15 which is increase in

a year 2009 It means profit of the firm may be increases in a year 2009as compare to previous year.




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Current Ratio

MeaningThis most widely used ratio shows the proportion of

current assets to current liabilities. It is also known as working capitalratio as it is a measure of working capital available at a particular time.Idle ratio is 2:1. The Tondon Committee appointed by RBI recommended acurrent ratio of 2:1. But later on the Chore Committee appointed by RBIrecommended a satisfactory current ratio of 1.33:1.

Importance It is a measure of short term financial strength of thebusiness and shows whether the business will be able to meet its currentliabilities will as and when they mature. Liability which will be nature within a period of 12 months is a current liability.

Formula

Calculation

2008

Current Ratio = __25692__34693

=0.74:1

2009

Current Ratio = __36238__


Current Ratio = __Current Assets__Current Liabilities

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Liquid Ratio

MeaningA variant of current ratio is the liquid ratio or quick ratio

which is designed to show the amount of cash available to meetimmediate payments.

Importance

It is obtained by dividing the liquid assets by liquidliabilities. If the liquid assets are equal or more than liquid liabilities, thecondition may be considered as satisfactory. Idle ratio is 1:1. It measuresthe liquid position for the company to pay off its debts within very shortperiod as compared to its liquid liabilities.

Formula

Liquid Ratio = __Liquid Assets___Liquid Liabilities

Calculation

2008

Liquid Ratio = _18128_34693

=0.52:1

2009

Liquid Ratio = _27996_39454




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InterpretationThe liquid ratio of the company for the year 2008 and

2009 are 0.52 and 0.71 respectively. So in 2008, company was able topay Rs.0.52 more against 1 Rs. liability same as in year 2009 it was 0.71.The liquid ratio is a better indication of liquid position of the company andshows whether the company will be able to meet its current obligationsfor immediate payment at a short notice. No standard nor is available forthe liquid ratio. However, it is believed that liquid assets should at leastcover the liquid liabilities. The ratio should be 1:1.

It shows that the company will not have any problem inmaking payment of its liability. So, we can say that the companys

liquidity position is good.


=0.71:1

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Acid Test Ratio

MeaningThe measure of absolute liquidity may be obtained by

comparing only cash and bank balance as well as readily marketablesecurities with liquid liabilities. This is a very exacting standard of liquidityand it is satisfactory if the ratio is 0.5:1

Importance It shows the immediate cash capability of the companyonly cash and bank balance as well as readily marketable securities withliquid liabilities.

Formula

Acid Test Ratio = __ Quick Assets__Liquid liabilities

Calculation

2008

Acid Test Ratio = _14426.28_34693.43

= 0.42:1

2009

Acid Test Ratio = _25114.33_




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39545.14

InterpretationIn Quick ratio here, in quick assets only cash, bank &marketable securities taken which can easily convertible into cash. Thisshows the liabilities & capacity of the company to meet present obligationin times not later. Here the ratio is not satisfactory. The ratio in the year2008 is 0.42:1 which means that the company has quick ratio of Rs.0.42for the every quick liability of Rs.1. The ratio decrease to 0.64 in the year2009 means that company has quick asset of Rs.0.64 for the quickliability Rs.1.


=

0.64:1

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Debt Equity Ratio

MeaningIt measures the portion of debt taken by the company as

compared to owners fund debt equity ratio established relationshipoutside long term liabilities and owner fund. It shows portion of long termexternal funds and owners fund in entire capital structure. This ratio isobtained by debt dividing by equity. This ratio is another form ofproprietary ratio and establishes relationship between the outside long-term liabilities and owners funds.

ImportanceIt shows the proportion of the long term External Equities

and Internal Equities.

Formula

Debt Equity Ratio = _ Long Term Liabilities _Eq.Shareholders Funds

Calculation

2008

Debt Equity Ratio = _468.75_16220.62

=0.03:1




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2009

Debt Equity Ratio = _468.75_

21629.57

InterpretationIt measures the portion of debt taken by the

company as compared to owners fund. In a year 2009 the ratio is lowerthan as compare to previous year. So it indicates that every Rs.1 of ownerfund our long term debts a 0.02 it establishes relation between outsidelong term liabilities and owner funds.


=0.02:1

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Proprietory Ratio

MeaningThe ratio shows the proportion of proprietors funds to the

total assets employed in the business. The proprietors funds orshareholder equity consist of share capital and reserve and surplus.Proprietors funds means the funds contributed by the owner lessmiscellaneous expenses at any.

ImportanceThe higher the ratio, the stronger financial position of the

enterprise as it signifies that the proprietors have provided funds topurchase the assets.

Formula

Proprietor's Ratio = _Proprietors fund_ 100Total assets

Calculation

2008

Proprietory Ratio = 16221 10016689

=97.20%




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2009

Proprietory Ratio = _21630 100

22098

InterpretationIt measures the portion of contribution made by the

proprietor as compared to the total asset of the business. The higher theratio, the stronger the financial position of the enterprise, as it signifiesthat the proprietors have provided larger fund to purchase the assets.This ratio cannot exceed 100 percent. If it is 100%, it means that thebusiness does not use any outside funds. In the year 2008 and 2009 theproprietary ratio are 97.20% and 97.88% respectively. So in 2009 every

100 Rs. the proportion of proprietors contribution to the total assets is97.88 Rs.


=97.88%

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Debtors Turnover Ratio

Meaning

The ratio shows the number of days taken to collectthe dues of credit sales. It shows the efficiency or of the collectionpolicy of the enterprise. This ratio suggests the number of timesthe amount of credit sale is collected during the year.

Importance In absence of information of credit sales actual sales

will be taken as credit sales. It measures the number of times theratios of debtors cycle are done during a year so.

Formula

Debtors Turnover Ratio = _ Credit Sales _Average Debtors




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Debtors Velocity Ratio

MeaningDebtors ratio indicates the number of days duringwhich the dues for credit sales are collected.

Formula

Debtors Velocity Ratio = Debtors_+_Bills_Receivable 365Credit sales

Calculation

2008

Debtors Velocity Ratio = _918.55_ 365

155321

= 2.16 2days

2009

Debtors Velocity Ratio = _113.45_ 365

175816




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= 2.31 2days

Interpretation As company makes credit sales. We can see in 2008 debtorsare able to pay credit in 2 days and in 2009it is also 2 days. This ratio

shows that in how much days company is able to collect from debtors.




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Creditor Turnover Ratio

MeaningThe creditors turnover suggests the No. of times the

amount of credit purchase is collected during the year whilecreditors ratio indicates the No. of days which the dues for creditpurchase are collected the No. of dues within which we makepayment to our creditors for credit purchase is obtained fromcreditors.

ImportanceWe can find the No. of days of the credit cycle done

during the year.

Formula

Creditors Turnover Ratio = _Credit_Purchase_Average Creditors




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Creditors Velocity Ratio

Meaning Creditors ratio indicates the number of days during

which the dues for Credit Purchase are to be paid.

Formula

Creditors Velocity Ratio = Creditors_+_Bills_Payable 365

Credit Purchase

Calculation

2008

Creditors Velocity Ratio = _30472.41_ 36535491.88

= 313days




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2009

Creditors Velocity Ratio = _34172.77_ 365

35019.02

= 356days

Interpretation




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2008

Fixed Assets Turn over Ratio = 155321

19899

=7.81:1

2009

Fixed Assets Turn over Ratio = 17581617859

=9.84:1




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InterpretationThe ratio of Fixed Assets Turnover is

comparatively increases as to the previous year. In 2008 the Fixed AssetsTurnover Ratio is 7.81:1and in 2009 it is 9.84:1. The ratio is found to behigher; we can say that Company is not making full utilization of theirFixed Assets. It indicates the lower efficiency.




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No.

Ratios 2008 2009

1 Gross Profit Ratio 59.26% 57.84%2 Net Profit Ratio 14.92% 16.51%

3 Operating Ratio 81.20% 80.36%

4 Stock Turnover Ratio 10.46Times

12.27Times

5 Return on Capital Employed 175% 156.26%

6 Return On Shareholders Fund 180.04% 159.64%

7 Return On Equity ShareholdersFund

170.38% 213.41%

8 Return On Equity Share Capital 104.7% 153.4%

9 Earning Per Share 17 Rs. 21.3 Rs.

10 Dividend per Share 13 Rs. 15 Rs.

11 Current Ratio 0.74:1 0.92:1

12 Liquid Ratio 0.52:1 0.71:113 Acid Test Ratio 0.42:1 0.64:1

14 Debt Equity Ratio 0.03:1 0.02:1

15 Proprietary Ratio 97.20% 97.88%

16 Debtors Turnover Ratio 2 Days 2 Days

17 Creditors Turnover Ratio 313 Days 356 Days

18 Fixed Assets Turnover Ratio 7.81:1 9.84:1




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Accounting Policies

I. Basis of Accounting The financial statements are prepared under historical costconvention on an accrual basis of accounting and in accordance with thegenerally accepted accounting principles in India and provisions of thecompanies Act, 1956 read with the companies (Accounting Standards)rules, 2006. The preparation of financial statements requires theManagement to make estimates and assumptions considered in thereported amounts of assets and liabilities as of the date of financial

statements and the reported income and expenses during the reportingperiod. The management believes that estimates used in preparation of




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significantly increased by 3 per cent to 52.2 per cent; toothpowder by 1.2

per cent to 48.9 per cent and maintained a high of 37.6 per cent in

toothbrush.

Looking to the future, your Board is confident that the Companys

positive business momentum will continue and enable your Company to

deliver better results.

Dividend

The Companys strong cash generation and positive growth

momentum led your Board to declare two interim dividends of Rs. 9 and

Rs. 6 per share aggregating Rs. 15 per share for the financial year 2008-

09. These dividends were paid on December 30, 2008 and April 23, 2009.

|Having declared two interim dividends, your Board has not

recommended a final dividend for the financial year 2008-09.

Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the

Directors base on the representations received from the Operating

Management, confirm:

I. 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;

II.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;




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III.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

IV.That they have prepared the annual accounts on a going concern

basis.

Oral Health Month

Your Company in partnership with the Indian Dental Association,

once again, organized a month-long program during the year covering a

wide spectrum of activities designed to spread oral health awareness and

good oral hygiene practice. The mission of this activity continued to be

Zero Tooth Decay involving 10,000 dentists spread across 200 towns

and covered 1.5 lack children from 190 schools across seven cities.

Corporate Governance

A separate report on Corporate Governance along with the Auditors

Certificate on its compliance is attached as Annexure 1 to this Report.

Employee Relations

Relations between the employees and the management continued to be cordial during

the year.

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




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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.

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 strong links 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 forms part of this Report.

Directors

Under Article, 124 of the Companys Articles of Association, Mr. R. A.

Shah and Mr. K.V Vaidyanathan retire by rotation at the 68th Annual

General Meeting and, being eligible, offer themselves for re-appointment.

Auditors

Messrs. Price Waterhouse, Chartered Accountants, retire and are

eligible for re-appointment as Auditors.




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Acknowledgements

Your Directors sincerely appreciate the high degree of

professionalism, commitment and dedication displayed by employees at

all levels. The Directors also wish to place on record their gratitude to the

Members for their continued support and confidence.




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Auditors Report

They have audited the attached Balance Sheet of Colgate-Palmolive(India) Limited (the Company) as at March 31, 2009, the related

Profit and Loss Account and Cash flow Statement for the year ended

on that date annexed there to, which they have signed under

reference to this report. These financial statements are the

responsibility of the Management of the Company. Their

responsibility is to express an opinion on these financial statements

based on their audit.

They conducted their audit in accordance with the auditing

standards generally accepted in India. Those Standard require that

they plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material

misstatements. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting

principles used and significant estimates made by the Management,

as well as evaluating the overall financial statements presentation.

They believe that their audit provides a reasonable basis for their

opinion.

As required by the Companys (Auditors Report) Order, 2003 a

amended by the Companies (Auditors Report) (Amendment) Order,

2004 (together, the Order) issued by the Central Government of

India in terms of Section 227(4A) of the Companies Act, 1956, of

India (the Act), and on the basis of such checks of the books and

records of the Company as they considered appropriate and

according to the information and explanations given to us, they set




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out in the Annexure a statement on the matters specified in

paragraphs 4 and 5 of the said Order.

Further to their comments in the Annexure referred to in

Paragraph 3 above, they report that:

They have obtained all the information and explanations,

which to the best of their knowledge and belief were necessary for

the purpose of their audit;

In their opinion, proper books of account as required by law

have been kept by the Company so far as appears from their

examination of those books;

The Balance Sheet, Profit and Loss Account and Cash flow

Statement dealt with by this report are in agreement with the books

of account;

In their opinion, the Balance Sheet, Profit and Loss Account

and the Cash Flow Statement dealt with by this report comply with

the accounting standards referred to in sub-section \(3C) of Section

211 of the Act.

On the basis of written representations received from the

Directors as on March 31, 2009 and taken on record by the Board of

Directors of the company, none of the Directors is disqualified as on

March 31, 2009 from being appointed as a Director in terms of

clause (g) of sub-section (1) of Section 274 of the Act.

In their opinion and to the best of their information and

according to the explanations given to us, the Balance Sheet, Profit

and Loss Account and the Cash Flow Statement, together with the

Notes thereon and annexed thereto give in the prescribed manner

the information required by the Act and give a true and fair view in




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conformity with the accounting principles generally accepted in

India:

In the case of the Balance sheet of the state of affairs of

the Company as the March 312, 2009;

In the case of the Profit and Loss Account, of the profit for

the year ended on that date; and

In the case of the Cash flow Statement, of the cash flows

for the year ended on that date.




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Summarized Profit and Loss Account for the YearEnded March 31, 2009




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Particular Sch.No

Rs.Lacks

Rs.Lacks

2009 IN(%)

2008IN (%)

In 2008Rs.Lacks

Income

Sales 175815

.9

155321.

17983.2

Less: Excise Duty 6334.55

10775.72

100 100 8478.12

13 180257.1

6.36 5.75 155816.02

106.36 105.75

Expenditure

Cost of sales 14 74130.76 43.74 42.94 63277.65Employee cost 15 14340.

658.46 8.03 11827.6

8

Other expenses 16 54960.12

32.43 33.61 49521.29

Depreciation\Amortization[includes impairment of Fixed

setsRs.36.73 Lacs(previous year:

Nil)]

4 1.35 1.35 145726.

485.98 85.93 126611.

11

Profit before tax 34530.65

20.38 19.82 29204.91

Current Tax 4107.5 2.42 3.95 5824.68Deferred Tax 1031.2

10.6 -0.15 -215.77

Fringe Benefit Tax 370 0.22 0.29 4255508.71 3.24 4.05 6033.89

Profit after Taxation 29021.94

17.12 15.73 33171.02

Balance Brought Forward 577.17 0.34 1.69 2486.96ofit Available for Appropriation 29599.1

117.46 17.42 25657.9

8Appropriation:

First Term Dividend 12239.35

7.22 5.44 8159.57

Second Term Dividend 8159.57 4.82---

---

Final Dividend-proposed ---

---

6.46 9519.5

Dividend Tax[ includes Rs. Nil(previous y year:2080.08

cs)on Reduction of Share Capital

3414.02 2.01 3.45 5084.64

Transfer to General Reserve 2902.19 1.71 1.58 3217.1Balance Carried Forward 2883.98 1.7 0.39 577.17

29599.11

17.46 14.42 25657.98

Page66



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Summarized Balance Sheet As on 31, March 2009.

Particular Sch.

Rs. inLacs

Rs. inLacs

Rs in %2009

Rs. In %2008

AsMarch

31,2008

Rs. Lacs

Sources of funds

Shareholders fundsShare capital 1 1359.9

31359.9

3Reserves and surplus 2 20269.

614860.

6921629.

697.88 97.1

916220.

62

Loan fundsUnsecured loans 3 468.75 2.12 2.81 468.75

Total

22098.

3100

100

16689.37

Applications of fundsFixed assets 4

Gross block 42525.6

192.44 269.39

44959.43

Less:depreciation/amortization

25132.8 113.73

154.7

25818.85

Net block 17392.8

78.71 114.69

19140.58

Capital work-in-progressand adv for cap.expenditure

466.84 2.114.55

17859.6

82.84 119.23

19899.42

Investments 5 3832.8

9

17.34 43.5 7258.7

7Deferred tax assets 6 1768.8 16.6 2782.7




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(net) 2 8 7 2106.16 179.

4

Current assets, loansand adv

Inventories 7 8242.33

37.3 45.32

7563.85

Sundry debtors 8 1113.45

5.04 5.5 918.55

Cash and bankbalance

9 25114.3

3.25 86.44

14426.28

Interest accrued oninvest

718.76 113.65 1.58 264.2

Loans and advances 10 19021.4

86.08 101.84 16995.67

54210.3 245.32 240.68 40168.55Less: Current liabilities and

ProvLiabilities 11 39454.

1 178.54 207.

8834693.

43Provisions 12 16119.

272.94 112

.218726.

6655573.

3251.48 320.08 53420.

09

Total 22098.3

100 100

16689.37




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Cash Flow Statement

Meaning

A cash flow statement shows on entitys cash receipt classifiedby major source of cash inflow and cash outflow during the last yearswhat was the actual cash balance on hand asset the end of the last year.

Importance

Efficiency Cash Management:-

If the finance mange has clear idea of cash receipts and

payments cash resources can be efficiently managed. If the cashpayments are planned at a time when enough cash inflow is likely it ispossible manage business with minimum of working capital. Excess cashfund at any time may be profitability invested for the time being andprofitability is increased.

2.Helpful For Internal Financial Management:-

The management can plan out payment of dividend repayment oflong term loans, purchase of machines our equipments etc. it has good

idea about the timing when enough cash will be on hand. This will avoidthe possibility of borrowing funds at high rate of interest.

3. Information about Receipts and Payment:-

Such a statement will give information about the tend of cashreceipts and payments. Such information is useful to the management inmeeting any future contingencies and also in seizing any profitableopportunity.

4.Helpful for Control:- This historical cash flow statement prepared term last year is

useful comparing the figures of cash budgets and point of differencesmay be located. This facilities management managerial control on the useof cash.

5.Easy in Obtaining Funds:-

By comparing the figures of cash flow statement and cashmidgets, the cash planning and control becomes more effective liabilities

are easily paid as and when they mature. This position improves and




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raises the prestige of the firm rising of addition funds easily whenneeded.




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Cash Flow StatementFor the year ended 31st March, 2009.

Particular

2008-09

Rs.Lacs

2007-08

Rs.Lacs

Cash flow from operating activities:Net Profit Before Tax 34530.65 29204.91Adjustments for:Unrealized Foreign Exchange Loss (Net) 875.44 23.19Depreciation 2294.89 1984.49Reversal for diminution in value of Investments - (750.00)Interest Expanse 110.01 143.51Profit on Sales of Fixed Assets (Net) (980.54) (83.70)

Interest Income (3136.57) (2144.87)Dividend From Subsidiaries (Net) (397.56) -Gain On Maturity of Investment (Net) (39.13) -Operating Profit Before W.C. Changes 33257.19 28377.53Adjustments for (Increase)/Decrease inW.C.Inventories (420.74) 468.78Sundry Debtors (194.90) 14.08Loans & Advances 933.82 473.23

Current Liabilities & Provisions 3186.50 3146.23Cash Generated From Operations 36761.87 32479.85

Direct Taxes Paid (Net) (4823.45) (4339.56)Net Cash From/(use in) OperatingActivities (A) 31938.42 28140.29Cash Flow From Investing ActivitiesPurchase of Fixed Assets (243.50) (2716.88)Sales of Fixed Assets 1107.27 119.45(Purchase)/Sale of Investment in Subsidiaries (165.28) -Sales of Other Investments 3071.48 5868.61Capital Repatriation by Wholly-OwnedSubsidiary - 956.25Inter Corporate Deposits (Placed)/Refunded 290.00 (3885.00)

Loans to Subsidiaries (3335.00) -Interest received 2682.08 2266.99Dividend from Subsidiaries 775.61 -Net cash from/(used in) InvestingActivities (B) 4182.66 2609.32Cash Flow From Financing Activities:

Long Term Loans Availed/(Paid) (Net) - 41.25Interest paid (110.01) (143.51)Dividend paid (21746.08) (11333.41)Repayment of Capital - (12130.53)

Dividend Tax Paid (3657.04) (3929.04)Net Cash From/(Used in) Financing (25513.13) (27495.24)




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Sales 6334.55 7983.20

Less: Excise Duty 169481.35 147337.90

13 10775.72 8478.12

Other Income 180257.07 155816.02

EXPENDITURE

Cost of Goods Sold 14 74130.76 63277.65

Employee Costs 15 14340.65 11827.68

Other Expanceses 16 54960.12 44921.29

Depreciation 2294.89 1984.49

145726.42 126611.11

PROFIT BEFORE TAXATION 34530.65 29204.91

Current Tax 4107.5 5824.66

Deferred Tax 1031.21 (215.77)

Fringe Benefit Tax 370.00 425.00

5508.71 6033.89

PROFIT AFTER TAXATOIN 29021.94 23171.02

Balance brought forward 577.17 2486.96PROFIT AVAILABLE FORAPPROPRIATION 29599.11 25657.98

APPROPRIATION :

First Interim Dividend 12239.35 8159.57

Second Interim Dividend 8159.57 -Final Dividend - Proposed - 9519.50

Dividend Tax 3414.02 5084.64

Transfer to general reserve 2902.19 2317.10

Balance carried forward 2883.98 577.17

29599.11 25657.98

EARNING PER SHARE

Basic & diluted 21.34 17.04

Balance Sheet as 31st March, 2009

Particular Schedule2008-09Rs.Lacs

2008-09Rs.Lacs

2007-08Rs.Lacs

Sources of Funds

Shareholders Funds

Share Capital 1 1359.93 1359.93Reserve and surplus 2 20269.64 14860.69




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21629.57 16220.62

Loan Funds

Unsecured Loans 3 468.73 468.75

Total 22098.32 16689.37

Application of Funds:

Fixed Assets 4

Gross Block 42525.56 44959.43

Less: Depreciation 25132.76 25818.85

Net Block 17392.80 19140.58

Capital work in progress 466.84 758.84

17859.64 19899.42

Investments 5 3832.89 7258.77

Deferred Tax Assets (Net) 6 1768.72 2782.72C.A Loan and advances

Inventories 7 8242.33 7563.85

Sundry Debtors 8 1113.45 918.55

Cash and Bank 9 25114.33 14426.28Interest Accrued onInvestments/Deposits 718.76 264.20

Loans and Advances 10 19021.42 16995.69

54210.29 40168.55

Less :

Current Liability and Provisions

Liabilities 11 39454.14 34693.43

Provisions 12 16119.18 18726.66

55573.32 53420.09

Net Current Assets (1363.03) (13251.54)

Total 22098.32 16689.37

It is an opportunity for us to prepare Financial Report ofsuch prestigious and well known Company like Colgate Palmolive (India)




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Limited. It is practical work for us to do for the purpose of clearing thefundamental aspects. After studying, observing & analyzing the data &company profile, their management seems well managed.

We have analyzed the different ratios. The profitabilityratio shows satisfactory condition. The turnover ratio shows most stabilitystage in the company. The financial ratios which shows very goodposition for the company. Gross profit & Net profit ratios sound is enoughto maintain better ratios at a satisfactory level.

The liquid ratio of the company is also good and itshows the satisfactory of the firm. In the liquid ratio company investmentmore cash. So, one can take advantage of it in future period of time. The

solvency ratio shows the dissatisfactory position of the company. It willinfluence in maintaining its standard in current position capacity of capitalsources.

The Colgate - Palmolive is famous through out the worldfor its products like tooth pastes, tooth powder, tooth brushes etc. TheColgate Palmolive (India) Limited is the top brand of its type in theIndian Market today. The company has maintained fair and healthyrelationship between their employees and the management and evenwith their customers. This is one of the reasons of company getting profitevery year.

So, at last we can conclude that all the ratios show thesatisfactory level and efficiency of the company. And it always tries to getbetter, expand & providing the best products and services to the people.

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