COLGATE -PALMOTIVE

“FINANCIAL STATEMENT ANALYSIS OF COLGATE

PALMOLIVE”

Name – Mohit Sony

Roll No. – N20222029
FINANCIAL STATEMENT ANALYSIS OF COLGATE PALMOLIVE
(INDIA)LIMITED.

1.The date / year of formation of the company.

The Colgate Palmolive (India) was formed in the year 1937. (Website of
company)

2. The main business (products and services) of the company

- the different kind of products and business segments.
Oral care products:
Toothpaste: Colgate toothpaste for kids(0-2 years),Colgate motu patlu
anticavity, Colgate toothpaste for kids, Colgate toothpaste for kids batman,
Colgate active salt toothpaste -toothpaste in, Colgate kids strawberry toothpaste,
Colgate maxfresh charcoal toothpaste in, Colgate total advanced health
toothpaste in, Colgate strong teeth ,etc.
Mouthwashes and Rinses: Colgate maxfresh cool clove mouthwash, Colgate
Plax sensitive mouthwash , Colgate maxfresh saunf mint mouthwash, Colgate
maxfresh elaichi mouthwash, Colgate maxfresh peppermint fresh mouthwash
in, Colgate maxfresh tea mouthwash in,etc
Toothbrushes: Colgate slimsoft turmeric toothbrush, Colgate slim soft
Himalayan salt, Colgate preclinical 150 sonic brush refill, Colgate kids magik
kids toothbrushes in, Colgate wonder woman toothbrush, etc.
Palmolive Face Care range:
The Palmolive Hydrating product range: Combines the power of Multani
Miti (Fuller’s earth) with the soothing effect of lavender essential oil.
The Brightening product range: Conveys the benefits of antioxidants in
saffron blended with Roman chamomile essential oil that possesses anti-germ
properties.
The Anti-acne range: Cleanses the skin with tulsi leaf extracts combined with
lemongrass essential oil known for its role in helping to reduce acne scars.
3. Locations and where the business is situated
Sanand (Gujarat): Spread over 1,53,781 square meters, this is an ultra-modern
high-technology facility with end-to-end automation as well as quality control
systems. The facility is a Net Zero Water and zero discharge facility and is
LEED GOLD certified by Indian Green Building Council (IGBC), True Zero
Waste -PLATINUM certified by Green Business Certification Inc (GBCI). It
also features a 0.99 MW solar power plant.
Goa: Spread over 33,614 square meters, this is the oldest toothpaste
manufacturing site in India. Here is where we manufacture our ayurvedic
toothpaste. It is net water positive since 2021 and has also completed 6 years
i.e., more than a 7 million man-hours with zerolost time accidents (LTA).
Baddi, Himachal Pradesh: This 36,000 square meter manufacturing facility
has the capability to produce all toothpaste variants under a cosmetic license
apart from manufacturing mouthwash.
Sri City, Andhra Pradesh: Situated in the Smart Integrated Business City in
Andhra Pradesh, this ISO 9001:2015 certified plant is spread over 141,800
square meter area. It is a True Zero Waste facility, PLATINUM certified by
Green Business Certification Inc (GBCI) as well as LEED, GOLD certified by
the Indian Green Building Council (IGBC). It is a Net ZERO Water site along
with an onsite solar power plant.
Headquarters in India: Powai, Mumbai.

4. The promoters and their track record of business.

The promoters holding was 51% at the end of December 2022.The number of
shares for promoters is 138712672.The promoters are 3 and origin of foreign.
The promoters and their holding percentage are following
A) Colgate Palmolive Company- 40.06%
B) Colgate Palmolive (Asia)Pte Ltd.- 10.94%
C) Norwood International Incorporated -0%

5. The shareholding pattern as on the last annual report date.

The shareholding pattern is as following
A) Promoters-51%
 Colgate Palmolive Company- 40.06%
Colgate Palmolive (Asia)Pte Ltd.- 10.94%
Norwood International Incorporated -0%
B) Institutional Holding -28.94%
Mutual fund-1.77%
Foreign portfolio investors-21.11%
Banks -0.43%
Other financial institute-0%
Insurance Companies-4.99%
Life insurance corporation of India-3.71%
C) Public Holding-20.25%
Individual share capital up to 2 lacs-18.14%
Any other -0.55%
Huf-0.39%
Clearing members-0.08%
Trusts-0.04%
Lip-0.03%
Bodies corporate-0.57%
Non-Resident Indians (NRIs)-0.64%
Investor Education and Protection fund (IEPF)-0.15%

6. The composition of the Board Of Directors.

Mukul Deoras(Chairman): Mukul is a global business leader with rich
experience across multiple geographies. He is the President of the Asia Pacific
Division of Colgate-Palmolive. Mukul holds a postgraduate degree in
Management from IIM, Ahmedabad. He joined the Company in 2004 and has
since served as Managing Director in Thailand and India, Chairman in India,
President of the Asia Division, and Global Chief Marketing Officer. He was
appointed as the Chairman of Colgate-Palmolive (India) Limited in September
2018.
Ram Raghavan (Managing Director): Ram is a versatile global business
executive with a unique balance of strategic and operational experience. He
joined the Company as a Management Trainee, and over the years, has
progressed through a series of leadership roles across Asia Pacific, Latin
America and North America. Ram completed his MBA from Jamnalal Bajaj
Institute of Management Studies. He was appointed as Managing Director on
the Company’s Board in August 2019.
Shyamala Gopinath (Non-executive &Independent Director): A senior
financial sector expert, Shyamala has guided and influenced diverse national
policies. She was the Deputy Governor of the RBI for seven years, and was on
the RBI Board. She is an Independent Director on the Boards of a few
companies, including not-for-profit entities. She is also the Chairperson of the
Board of Governors of IIM, Raipur. She was appointed as a Director on the
Company’s Board in May 2015.
Indu Shahani (Non-executive &Independent Director): Indu is a passionate
educationist who continues to redefine education. She is the President and
Chairperson at the Indian School of Design and Innovation, and the Founding
Dean of Indian School of Management and Entrepreneurship. She has been the
Principal of H.R.College of Commerce and Economics in Mumbai. She has an
Honorary ‘Doctor of Letters’ degree awarded by the University of Westminster
in London. A former Sheriff of Mumbai, Indu was appointed as a Director on
the Company’s Board in 2012.
Gopika Pant (Non-executive &Independent Director): Gopika is an expert in
the field of law and is dual-qualified in India and the USA. She is a keen
environmentalist and an enthusiastic public speaker. She is a member of the Bar
Council of Delhi, the NewYork State Bar, the ABA and the Supreme Court Bar
Association. She holds a Diploma in Environmental Law with the World-Wide
Fund for Nature. She was appointed on the Company’s Board in May 2020.
Sukanya Kripalu (Non-executive &Independent Director)- Sukanya is a
consultant in the fields of marketing, strategy, advertising, and market research.
An alumnus of IIM, Kolkata, she has rich work experience with Nestle India
Limited, Cadbury India Limited and Kellogg’s India. She was appointed as a
Director on the Company’s Board in June 2018.
Sekhar Natarajan (Non-executive &Independent Director): Sekhar has rich
experience in the Agriculture and Rural sector, and has contributed significantly
towards the growth and development of this sector. A qualified Chartered
Accountant and Cost Accountant, he possesses extensive knowledge of strategic
thinking, business development and mergers and acquisitions. He was appointed
as a Director on the Company’s Board in May 2020.
Vikram Singh Mehta (Non-executive &Independent Director): Vikram is a
policy thought-leader with in-depth experience in the field. He began his career
as a Member of the Indian Administrative Service, and was Advisor to the
Public Sector ‘Oil India’. Awarded Asia House’s “Businessmen of the year”
award in 2010 and Best Independent Director’ award by Asian Centre for
Corporate Governance & Sustainability in 2016, Vikram is on several boards.
He was appointed as a Director on the Company’s Board in 2001.
M. Chandrasekar (Whole-time Director &Executive Vice-President -
Customer Development): Chandrasekar has strengthened Colgate’s
distribution network, enhanced customer engagement and pioneered several
future-technology-enabled improvements to drive business. He joined the
Company in 1989 as a part of the Sales function. Over 30 years, he progressed
through increasing levels of responsibility in the Customer Development and
Sales functions across different regional roles. He graduated as a Bachelor of
Science in Mathematics from American College, Madurai. He was appointed as
a Whole-time Director on the Company’s Board in January 2017.
M.S. Jacob (Whole-time Director &Chief Financial Officer): Jacob provides
overall financial leadership, including on Investor Relations at Colgate-
Palmolive (India) Limited. He joined the Company in 1995 in the Continuous
Improvement Group. Over the course of 27 years, he has served at leadership
roles in Finance at Colgate-Palmolive subsidiaries in Thailand, Vietnam,
Malaysia and Hong Kong. He is a Commerce graduate from Mumbai University
and Chartered Accountant from the Institute of Chartered Accountants of India.
He was appointed on the Company’s Board in October 2016.
Surender Sharma (Whole-time Director-Legal &Company Secretary):
Surender leads the Legal and Secretarial Team in advising the business on
issues of Legal Compliance, devising and implementing litigation strategy as
well as issues of Ethics and Corporate Governance in a dynamic regulatory
environment. Surender joined the company in October, 2017 and has experience
of over 22 years across leading companies in the areas of Legal, Secretarial and
Corporate Affairs. He holds a Bachelor of Laws degree from the University of
Delhi and is a fellow member of the Institute of Company Secretaries of India.
He was appointed on the Company’s Board in May 2020 and as a Company
Secretary in February 2022.
7.Industry and economic overview.
The FMCG is the fourth largest sector in the India economy. It provides
employment to around 3 million people accounting for approximately 5% of the
total factory employment in India. It is an important contributor to India’s GDP
growth. Growth in the country’s FMCG sector is being fueled by improving
scenarios in both demand as well as supply side. As per reports by CRISIL, the
FMCG sector is set for double -digit growth in coming year at 10-12 %. India’s
retail inflation breaches RBI’S tolerance level first time since October. India’s
annual retail inflation rate rose to 6.52% in January from 5.72% in December,
government Aupper targeted limit of 6% for the first time since October and
much higher than the 5.9% estimate, according to a Reuters poll of 44 analysts.
a. The political situation and the influence on the industry and the
business.
As the political situation in the India is stable so there will not be much
influence on the FMCG industry and the business. As government
approved investment approval of up to 100% foreign equity in single
brand retail and 51% in multi-brand retail. The union government’s
production linked incentives (PLI) scheme gives companies a major
opportunity to boost exports with an outlay of US $1.42 billion.

b. Global environment and its influence in the business.

As we continue to watch the devastating war in Ukraine, For Colgate
people in the region, they offered support, benefits and temporary
accommodations. Their employees in neighboring countries have opened
their homes to those who must flee to safety. In addition, they have so far
committed $1 million in hygiene and pet nutrition products and financial
contributions to the Red Cross and other humanitarian relief and animal
welfare organizations in Eastern Europe. They also have launched a
matching gifts program for Colgate employees to help support relief
efforts to more local community-based organizations. they have asked
about their operations in Russia. They have suspended the importation
and sales of all products other than essential health and hygiene products
for everyday use. They also have ceased all capital investments, media,
advertising and promotional activities. Going forward, they will continue
to assess the situation to take actions in a way that aligns with their values
and reflects their commitment to Colgate people and the communities
where they live and work.
c. The Key Macro economic factors influencing growth
Due to Ukraine war the crude oil prices were high and due to that the
country is facing inflation. To reduce this inflation the RBI had increased
repo rate by the high margin . The impact of this will reduce the demand
in the market. As money supply in the market is low. The demand in the
market will be low hence it will influence growth of Colgate. It may
impact the profits of the company.

d. GDP growth and impact to the business

The Union Budget FY 2023-24 ,didn’t announce anything specific to the
FMCG business ,but an increased focus on improving the technology and
 agricultural infrastructure will serve as a boon for the industry .While
keeping macro -economics stability in mind ,the huge push on
infrastructure with a capex allocation of RS 10 lakh crore including the
food grain segment and the provision for decentralized storage capacity
for farmers would not only spur the rural economy but also the broader
economy. The Real GDP growth for 2023-24 is projected at 6.4 percent
with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% & Q4 at 5.8%: RBI Governor
Shaktikanta Das.

e. Specific economic indicators likely to have influence in the business

and the growth prospects.
As Fuel prices is important factor in the any country’s development as
India import all our fuels from different countries. The prices of crude oil
will influence the business and the growth prospect as we seen in due to
Ukraine war fuel prices goes up and it impact the overall prices of all the
other product ,it impact the inflation in the country.
Due to pandemic currency of India got volatile and its decreasing that’s is
problem for the economic growth of the India it directly affects the
business and growth prospect.

8.Detailed explanation based on company key financials(excel) Overview of

the last 10 years key financial (reproduce the comparative trend figures for
understanding the trend; all relevant indicators relevant from investors'
perspective)
The key financial overview of last 10years provided in the annual report of the
company represents following:
In terms of sales grew from 324451 to 506646 from 2013 to 2022 it means it
has showed annual CAGR of 5%. It is not good sign for the company in terms
of revenue of the company. This is because the industry growth expected is
14.7%. This is the area of concern for the company.
 Chart Title
600000

506646
481048
448985

448757
443244
431898

429989
421120
500000

375738
400000 324451

300000

200000

100000

0
1 2 3 4 5 6 7 8 9 10

Fig Sales from 2013 to 2022

The earnings after tax has grown at CAGR 8% from 2013 to 2022.It shows that
it is good in the case of Colgate company. They gave the good earning after tax
in the last 10 years. It shows the stability and belief of customers in the brand.

Chart Title
120000
107832
103539
100000

80000 81647
77557
67337
60000 58117 57743
53987 55898
49675
40000

20000

0
1 2 3 4 5 6 7 8 9 10

Fig shows Earning after tax of Colgate from 2013 to 2022.

Earning per share has CAGR of 1% from 2013 to 2022.It is not good sign for
the company because it should increase more than it is now. In 2013 to 2015 it
has grew from the 36.53 to 41.1.But during 2016 to 2020 it has drastically
decreased but after 2020 it has grew well.

Fig shows earning per share from 2013 to 2022

9. Dive deeper into the analysis and the reasons for variations in trend (Use
the help of trends worked out in common size analysis - vertical and
horizontal analysis)
As per the vertical analysis Colgate India has increased cash and cash
equivalent in vertical analysis to 25% which was earlier about 15%. This is not
a good sign for the company because company has no plans for the cash and
cash equivalent. They are not spending their income. The total liabilities in 2021
was 60% and due to covid-19 pandemic which was around 40-45% during the
normal years, in the vertical analysis.
Total non-current asset has decreased from the 2018 to 2022 by 6% and
increased the current asset in 2018 to 2022 by 40%. The total current asset
CAGR is 7%. During 2019-20 it was lower but then in 2021 and 2022 it
increased again in horizontal analysis.
The total non-current liabilities are increased by 128% in 2019 from 2018 and
again increased in 2020 this is because provisions in 2020 in much higher and in
2019 along with provision the deferred tax liabilities was also too much. But in
2022 both provisions and total non-current asset has also decreased. It is good
sign for the company.
Total outstanding dues of micro enterprises and small enterprises has increased
drastically in 2022 has increased by 310%. It is concern for the company.
Total income is increasing from 2018 to 2022 with CAGR of 3%. While the
total expenses are increasing with CAGR of 2%.
Profit is increasing with CAGR of 10%. It is good for the company in the
horizontal analysis.

10.Explanation of the financing, investing, and operating activities (use

vertical and horizontal analysis; here you should explain with reference to
the sources of finance, deployment, & Operating results).
Total equity is increasing at CAGR of 3%. Equity share capital is balanced
throughout the years but others equity was changing. In 2021 the others equity
was 40% in vertical analysis it was lower in the past 5 years. Borrowing was
done in 2019 of 7,771.09 lakhs after that there is no borrowings in 2020,2021,
2022.Revenue from operation and other income are increased from 2018-2022
by 3%.
Investment was 1% of total asset in vertical analysis for 2018 to 2021 but in
2022 there is no investment made. Net Cash Generated from Operating
Activities changed from 57933.17 to 1,62,573.48 lakhs from 2018 to 2022.
Net Cash (used in)/ Cash flow from Investing has decreased 20733.81 to
10764.25 in last 5 years. Net Cash used in Financing Activities had increased
37976.84 to 109059.88 from 2018-2022.
11.Explanation based on ratio Analysis (choose the relevant ratios in each
category from the investors' perspective).
The current ratio is 1.37 for 2022 and it is around near 1 for last 5 years. It
means current asset are always more than the current liabilities. During 2021 it
has come below 1 due to covid-19 but after that it has recovered from it.

current ratio
1.600

1.400

1.200

1.000

0.800

0.600

0.400

0.200

0.000
1 2 3 4 5
Gross profit margin in 2021 has increased drastically but after that gross profit
margin has not increased much in fact it has decreased from 2021 to 2022. It has
to increase in future to achieve the future growth of the company.

Gross profit margin

75

74

73

72

71

70

69

68
1 2 3 4 5

The return on equity has increased in 2021 this is due to due covid situation it
was done in 2019 and 2020 but after that it got revival .In 2022 it has decreased
a little bit. It should Increase in upcoming year.

Return on equity
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
1 2 3 4 5
Total asset turnover ratio is continuously increased from 2018 to 2020 and in
2021 it decreased because revenue did not grow as previously it was growing.
But after that in 2022 it increased and continue the growth of the trend.

Total asset turnover

1.78

1.76

1.74

1.72

1.7

1.68

1.66

1.64

1.62
1 2 3 4 5

Earning per share of company is continuously increasing from 2018 to 2022,

from 24.76 to 39.64. This has shown a growth in every year. In the year 2019
and 2020 it was not great but in picked up more in 2021 and 2022.

Earning per share

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

-
1 2 3 4 5

12.Compilation and identifying Information relevant for prospective

analysis.
The Managing Director of Colgate -Palmolive (India)Limited, Ram Raghavan
mention in the message to shareholders that they are truly proud to have the
distinction of being our nation’s #1 most penetration brand (yet again). The
independent Auditor’s Report also conclude on the appropriateness of
management’s use of the going concern basis of accounting and based on the
audit evidence obtained. It means the company is stable and it has no problem
of shutdown of business. Debt to asset ratio is decreasing from last 5 years as
debt is decreasing year by year and assets are increasing. It is good sign for the
company future. When its debt will reduce its final profit will definitely
increase in the future. Earning per share is also increasing from last 5 years
continuously so it is good sign for the company as well as from the perspective
of investor also it is good thing.