www.canadean-winesandspirits.com Colgate-Palmolive (India) Ltd

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Colgate-Palmolive (India) Ltd 2 TABLE OF CONTENTS 1Colgate-Palmolive (India) Ltd ...................................................................................................................... 6 2Colgate-Palmolive (India) Ltd - Key Employees ........................................................................................ 7 3Colgate-Palmolive (India) Ltd - Key Employees Biographies ................................................................... 8 4Colgate-Palmolive (India) Ltd - Major Products and Services .................................................................. 9 5Colgate-Palmolive (India) Ltd - History .................................................................................................... 10 6Colgate-Palmolive (India) Ltd - Company Statement .............................................................................. 11 7Colgate-Palmolive (India) Ltd - Locations and Subsidiaries ................................................................... 12 7.1Colgate-Palmolive (India) Ltd - Head Office ............................................................................................................. 12 7.2Colgate-Palmolive (India) Ltd - Other Locations and Subsidiaries ........................................................................... 12 8Colgate-Palmolive (India) Ltd - Business Analysis ................................................................................. 13 8.1Colgate-Palmolive (India) Ltd - Company Overview ................................................................................................ 13 8.2Colgate-Palmolive (India) Ltd - Business Description .............................................................................................. 14 9Colgate-Palmolive (India) Ltd - SWOT Analysis ...................................................................................... 15 9.1Colgate-Palmolive (India) Ltd - SWOT Analysis - Overview .................................................................................... 15 9.2Colgate-Palmolive (India) Ltd - Strengths ................................................................................................................. 15 9.2.1Strength - Strong support from the Parent Company ....................................................................................... 15 9.2.2Strength - Comprehensive Product Portfolio .................................................................................................... 15 9.2.3Strength - Increasing Revenues ....................................................................................................................... 15 9.3Colgate-Palmolive (India) Ltd - Weaknesses ........................................................................................................... 15 9.3.1Weakness - Declining operational performance ............................................................................................... 15 9.3.2Weakness - Litigation ....................................................................................................................................... 15 9.4Colgate-Palmolive (India) Ltd - Opportunities........................................................................................................... 16 9.4.1Opportunity - Growing FMCG market in India .................................................................................................. 16 9.4.2Opportunity - Growth Initiatives ........................................................................................................................ 16 9.4.3Opportunity - Product launches ........................................................................................................................ 16 9.5Colgate-Palmolive (India) Ltd - Threats .................................................................................................................... 16 9.5.1Threat - Intense Competition ............................................................................................................................ 16 9.5.2Threat - Changing consumer preferences ........................................................................................................ 16 9.5.3Threat - Rising counterfeit goods market ......................................................................................................... 16 10Colgate-Palmolive (India) Ltd - Company Financial Analysis ................................................................. 17 10.1Colgate-Palmolive (India) Ltd - Five Year Snapshot: Overview of Financial and Operational Performance Indicators .............................................................................................................................................................................. 17 11Colgate-Palmolive (India) Ltd - Interim ratios .......................................................................................... 19 11.1.1Colgate-Palmolive (India) Ltd - Financial ratios: Capital Market Ratios ........................................................... 19 11.2Colgate-Palmolive (India) Ltd - Financial Performance and Ratio Charts ................................................................ 20 11.2.1Colgate-Palmolive (India) Ltd - Revenue and Operating margin ...................................................................... 20 11.2.2Colgate-Palmolive (India) Ltd - Asset and Liabilities ........................................................................................ 21 11.2.3Colgate-Palmolive (India) Ltd - Solvency ......................................................................................................... 22 11.2.4Colgate-Palmolive (India) Ltd - Valuation ......................................................................................................... 23 11.3Colgate-Palmolive (India) Ltd - Competitive Benchmarking ..................................................................................... 24 11.3.1Colgate-Palmolive (India) Ltd - Market Capitalization ...................................................................................... 25 11.3.2Colgate-Palmolive (India) Ltd - Efficiency ......................................................................................................... 26 11.3.3Colgate-Palmolive (India) Ltd - Valuation ......................................................................................................... 27 11.3.4Colgate-Palmolive (India) Ltd - Turnover: Inventory and Asset ........................................................................ 28

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 3 12Colgate-Palmolive (India) Ltd - Mergers & Acquisitions and Partnerships ........................................... 29 12.1Colgate-Palmolive (India) Ltd - M&A and Partnerships Strategy ............................................................................. 29 13Colgate-Palmolive (India) Ltd - Recent Developments ............................................................................ 30 14Appendix .................................................................................................................................................... 31 14.1Methodology ............................................................................................................................................................. 31 14.2Colgate-Palmolive (India) Ltd - Ratio Definitions ...................................................................................................... 31 14.3Disclaimer ................................................................................................................................................................. 36

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 4 List of Tables Table 1:Colgate-Palmolive (India) Ltd - Key Employees .......................................................................................................... 7 Table 2:Colgate-Palmolive (India) Ltd - Key Employees Biographies ...................................................................................... 8 Table 3:Colgate-Palmolive (India) Ltd - Major Products and Services ..................................................................................... 9 Table 4:Colgate-Palmolive (India) Ltd - History ...................................................................................................................... 10 Table 5:Colgate-Palmolive (India) Ltd - Subsidiaries ............................................................................................................. 12 Table 6:Colgate-Palmolive (India) Ltd - Locations ................................................................................................................. 12 Table 7:Colgate-Palmolive (India) Ltd - Annual ratios ............................................................................................................ 17 Table 8:Colgate-Palmolive (India) Ltd - Interim ratios ............................................................................................................ 19 Table 9:Colgate-Palmolive (India) Ltd - Capital Market Ratios .............................................................................................. 19

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 5 List of Figures Figure 1:Colgate-Palmolive (India) Ltd - Revenue and Operating Profit ................................................................................ 20 Figure 2:Colgate-Palmolive (India) Ltd - Financial Position ................................................................................................... 21 Figure 3:Colgate-Palmolive (India) Ltd - Solvency ................................................................................................................. 22 Figure 4:Colgate-Palmolive (India) Ltd - Valuation ................................................................................................................. 23 Figure 5:Colgate-Palmolive (India) Ltd - Market Capitalization .............................................................................................. 25 Figure 6:Colgate-Palmolive (India) Ltd - Efficiency ................................................................................................................ 26 Figure 7:Colgate-Palmolive (India) Ltd - Valuation ................................................................................................................. 27 Figure 8:Colgate-Palmolive (India) Ltd - Turnover: Inventory and Asset ............................................................................... 28

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 6 1Colgate-Palmolive (India) Ltd Fast Facts Headquarters Address Colgate Research Centre,MUMBAI,Maharashtra,400076,India Telephone+91 22 25705050 Fax+91 22 25705088 Websitewww.colgate.co.in Ticker Symbol , Exchange NameCOLPAL,National Stock Exchange of India Number of Employees1,756 Fiscal Year EndMarch Revenue (US$ million)611

SWOT Analysis StrengthsWeaknesses Comprehensive Product PortfolioDeclining operational performanceIncreasing RevenuesLitigation Strong support from the Parent Company OpportunitiesThreats Growing FMCG market in India Changing consumer preferences Growth InitiativesIntense Competition Product launchesRising counterfeit goods market Share Data Share price (US$) as on 28 Nov 201431.76 EPS (US$)0.68 Market Capitalization (US$ million)4,354 Enterprise Value (US$ million)4,308 Shares outstanding (million)136 Financial Snapshot Operating Performance ThecompanyreportedrevenueofUS$611million duringthefiscalyear2014(2014).Thecompany's revenue grew at a CAGR of 9.35% during 20102014, withanannualgrowthof13.12%over2013.In2014, the company recorded an operating margin of 18.97%, as against 19.38% in 2013. Revenue and Margins

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 7 2Colgate-Palmolive (India) Ltd - Key Employees Table 1:Colgate-Palmolive (India) Ltd - Key Employees NameJob TitleBoard LevelSince Godfrey Nthunzi Chief Financial Officer, Director, Executive Vice President - Finance Executive Board2013 Prabha Parameswaran Managing Director, Director, Executive Director Executive Board2012 Aditya SinghVice President - Human ResourcesSenior Management2008 Ajith BabuDirector - MarketingSenior Management2012 Laurence Wheeler Executive Vice President - Manufacturing and Supply Chain Senior Management M. ChandrasekarVice President - Customer DevelopmentSenior Management2012 Manu Mehrotra Vice President - Toothbrush Category Supply Chain Senior Management2011 Mustapha Yajid Vice President - Manufacturing and Supply Chain Senior Management Niket Ghate Director, Vice President - Legal, Secretary - Company Secretary Senior Management2011 Sanjoy SenVice President - Customer Development Senior Management2011 Sarala Menon Vice President - Customer Services and LogisticsSenior Management2010 Shashank PotnisDirector - Global Technology CentreSenior Management2012 Indu ShahaniDirectorNon Executive Board2012 J. K. Setna DirectorNon Executive Board1978 Mukul DeorasChairmanNon Executive Board2012 P. K. GhoshNoneNon Executive Board1988 Rajendra ShahVice-ChairmanNon Executive Board1983 Vikram Singh MehtaDirectorNon Executive Board2001 Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 8 3Colgate-Palmolive (India) Ltd - Key Employees Biographies Table 2:Colgate-Palmolive (India) Ltd - Key Employees Biographies Employee DetailsBiography Godfrey Nthunzi Job Title : Chief Financial Officer, Director, Executive Vice President - Finance Since : 2013 Mr. Godfrey Nthunzi has been the Chief Financial Officer, Executive Vice President - Finance, and a Director of the company since 2013. Prior to this, he served as the Vice-President-Finance at Colgate-Palmolive, Canada and as the Finance Director at Colgate-Palmolive South Africa since 2001. Mukul Deoras Job Title : Chairman Since : 2012 Mr. Deoras has been the Chairman of the company since February 2012. Previously, he served as the Managing Director and the Executive Director of the company since 2010. He also worked as the Vice President and the General Manager for Personal Care in Global Business Development of Colgate-Palmolive Company, the US. He joined as a Director for Asia Pacific Division of Colgate- Palmolive Company in 2004 and later became the President of Asia Division. Earlier, Mr. Deoras also held various positions in marketing and sales department in Hindustan Unilever Limited in India. Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 9 4Colgate-Palmolive (India) Ltd - Major Products and Services Colgate-Palmolive (India) Limited is a manufacturer of personal and house hold care products. The key products offered by the company include the following: Table 3:Colgate-Palmolive (India) Ltd - Major Products and Services Products: Oral Care: Toothpastes Toothbrushes Toothpowder Whitening products Mouthwash Personal Care: Body wash Liquid hand wash Shave preps Skin care Hair care Dentist Products: Gingivitis treatment Sensitivity treatment Fluoride therapy Mouth ulcer treatment Specialty cleaning Tooth whitening Household Care: Surface care Brands: Colgate Palmolive Axion Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 10 5Colgate-Palmolive (India) Ltd - History Table 4:Colgate-Palmolive (India) Ltd - History YearEvent typeDescription 2014 New Products/Services The company introduced its first line of mouthwashes for kids. 2013 New Products/Services The company launched Colgate SlimSoft , a tooth brush with 17 times slimmer tip bristles than ordinary toothbrushes. 2013 New Products/Services The company entered into gum care segment with the launch of Colgate Total Pro Gum Healthin India. 2012 New Products/Services The company announced the launch of two new Palmolive body wash variants, Thermal Spa Skin Renewal and Aroma 2011 New Products/Services The company launched Colgate Sensitive Pro-Relief Toothpaste to provide instant relief from tooth sensitivity. 2011 New Products/Services The company launched Colgate 360 surround toothbrush to provide a whole mouth clean. 2011 Contracts/Agreements The company signed an agreement with Essel Propack Limited to set up a manufacturing plant in Goa. 2010 Acquisitions/Mergers/Takeovers CPIL acquired remaining 25.00% stake in Professional Oral Care Product Pvt. Ltd. 2010 Acquisitions/Mergers/Takeovers The company acquired remaining 25.00% Stake in CC Health Care Products Pvt. Ltd. 2008 Acquisitions/Mergers/Takeovers Colgate-Palmolive India acquired 75.00% of the shares in CC Health Care Products Pvt. Ltd. 2007 Acquisitions/Mergers/Takeovers The company acquired Professional Oral Care Products Pvt. Ltd., and SS Oral Hygiene Products Pvt. Ltd. 2007 Acquisitions/Mergers/Takeovers Colgate-Palmolive India acquired Advanced Oral Care Products Pvt. Ltd. 2003 Corporate Awards The company was rated as Indias Most Trusted Brand by Brand Equitys Most Trusted Brand Survey. 2001 Corporate Awards The company was rated as the No.1 brand by A&M (MODE Annual Survey for Indias Top Brands). 1937 Incorporation/Establishment The company was incorporated. Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 11 6Colgate-Palmolive (India) Ltd - Company Statement The statement from Management Discussion and Analysis Reportis givenbelow. The statement has beentaken from the company's annual report 2013. TheCompanyisengagedinthePersonalCarebusinesswhichincludesOralCare.TheOralCarebusinesscontinuesto account for over 90 per cent of the Companys sales turnover. Almostone-thirdoftheIndianpopulationdoesnothaveaccesstomodernoralcare.Thepercapitaconsumptionof toothpaste is about 146 gms one of the lowest in the world. The national epidemiological study on the status of oral health inthecountryshowedthatdentalcaries(toothdecay)isprevalentin63%of15yearoldsandasmuchas80%amongst adults in the age group of 35-44 years and periodontal diseases (gum diseases) are prevalent in 68% of 15 year olds and as much as 90% amongst adults in the age group of35-44years. To address this situation, the Company in partnership with IndianDentalAssociationhasstartedconductingannually,anintensivetwomonth-longawarenesscampaigninOctober andNovemberunderthebannerOralHealthMonth.Theaimofthiscampaignistocreateoralhealthawarenessand motivate people to adopt preventive self-care habits to improve their oral health. This was one more step in the Companys longstanding effort to spread the message of good oral health and encourage the use of modern and efficacious Oral Care products. To help its objective of expanding the Oral Care market, the Company has designed its product portfolio in such a manner that its products are available at different price points to cater to the requirements of consumers across all segments. WhilethepredominantbusinessoftheCompanyhasbeenconfinedtotheOralCarewhereitcontinuestofaceintense competition,theoutlookforindustryispositivegiventhesizeoftheopportunity.TheCompanybelievesthatthrougha combinationofpowerfulmarketingstrategies,innovativenewproductsandmarketdevelopmentandexpansionactivities, the dentifrice market in India and the Companys business will continue to grow strongly in the next several years. TheCompanyhasgoodinternalcontrolsystems,theadequacyofwhichhasbeenreportedbyitsauditorsintheirreport. ThediscussiononfinancialperformanceoftheCompanyiscoveredintheDirectorsReport.Therehasbeennomaterial developmentonhumanresourcesandindustrialrelationscontinuetobepositiveexceptforanunauthorisedstoppageof workbyoneoftheunionsforaperiodof18daysatGoatoothpastemanufacturingfacility.TheManagement,however, successfullydealtwiththeissuebyfollowingdueprocessanddiscussionswiththeunionandoperationsresumed.The impactontheoperationsduringtheperiodwasminimalconsideringtheinventoryandbackupfromotherplantsofthe Company. The number of people employed as on March 31, 2013 was 2008. It may please be noted that the statements in the Management Discussion and Analysis Report describing the Companys objectives and predictions may be forward looking within the meaning of applicable rules and regulations. Actual resultsmay differ materially from those either expressed or implied in the statement depending on circumstances.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 12 7Colgate-Palmolive (India) Ltd - Locations and Subsidiaries 7.1Colgate-Palmolive (India) Ltd - Head Office Colgate-Palmolive (India) Ltd Colgate Research Centre MUMBAI Maharashtra Zip: 400076 India Tel: + 91 22 25705050 Fax: + 91 22 25705088 7.2Colgate-Palmolive (India) Ltd - Other Locations and Subsidiaries Table 5:Colgate-Palmolive (India) Ltd - Subsidiaries Advanced Oral Care Products Private Limited India Professional Oral Care Products Private Limited India CC Healthcare Products Private Limited Hyderabad India Source: Canadean Table 6:Colgate-Palmolive (India) Ltd - Locations Colgate-Palmolive (India) Ltd Plot No. B 14/10 MIDC Waluj Industrial Area Aurangabad India Zip: 431136 Colgate-Palmolive (India) Ltd Plot No. 78, EPIP Phase I Jharmajri, Baddi, District Solan India Zip: 174 103 Colgate-Palmolive (India) Ltd Plot Nos. 154, 158 & 160 Kundaim Industrial Estate Kundaim, Goa India Zip: 403 115 Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 13 8Colgate-Palmolive (India) Ltd - Business Analysis 8.1Colgate-Palmolive (India) Ltd - Company Overview Colgate-Palmolive (India) Limited (Colgate-Palmolive India) is a manufacturer of personal and household care products. The company primarily offers oral care, skin care, and hair care products. Its portfolio includes tooth pastes, tooth brushes, tooth powder,whitening products, bodywash, shower gels, liquid handwash, shave creams, shampoos, mouth ulcertreatment, tooth whitening, gingivitis treatment and surface care. Colgate-Palmolive India also offers surface care products and dental products. These products are marketed under the brands of Colgate, Palmolive and Axion across India and in neighboring countries.ThecompanyoperatesassubsidiaryofColgate-PalmoliveCompany,USA.Colgate-PalmoliveIndiais headquartered in Mumbai, Maharashtra, India.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 14 8.2Colgate-Palmolive (India) Ltd - Business Description

Colgate-PalmoliveIndiaisapersonalandhouseholdcareproductmanufacturingcompany.Thecompanyoperatesasa subsidiary of Colgate-Palmolive Company, USA. The company classifies its offerings into four categories: Oral Care, Personal Care, Household Care, and From The Dentist. Undertheoralcarecategory,thecompanyofferstoothpastes,toothbrushes,toothpowder,whiteningproducts,and mouthwash.ItstoothpasteportfolioincludesColgateDentalCream,ColgateTotal,ColgateVisibleWhite,Colgate Sensitive,Colgate Kids Tooth Paste, Colgate Herbal, Colgate Cibaca Family Protection, Colgate Active Salt, Colgate Maxwhite, Colgate Sensitive-Pro-Relief, Colgate Max Fresh and Colgate ActiveSalt Healthy White. Forkids, the company offers Colgate Kids and Colgate Kids 2+ tooth pastes. The company alsooffers a verity of tooth brushes for various market segmentssuchasregular,children,entirefamilypurposeandspecialcategories.Theseproductsaremarketedunder Colgate brand. The personal care category of the company offers body wash, liquid hand wash, shave creams, shower gels and shampoos. Bodywashisofferedinvariousflavorssuchasmilk, almond,lavenderandnaturals.Theseproductsaremarketedunder Palmolive brand. Under the home care category, the company offers dish washing paste and markets it under Axion brand.Under the From The Dentist category, the company offers solutions for gingivitis treatment, sensitivity treatment, and mouth ulcer treatment. It also produces tooth whitening kit and special tooth cleaning products. Thecompanysresearchanddevelopment(R&D)activitiesfocusonnewproductdevelopment,marketexpansionand increasedconsumptionofthecompanysproducts.Theseactivitiesalsofocusonmaterialcostreduction,process simplification, and qualityimprovements. It alsoimplements Enterprise Resource Planning (ERP) software to handle all its supply chain and finance functions. In FY2013, the company invested INR84 million in R&D activities. Colgate-PalmoliveIndiahasoneofthewidestdistributionnetworksinIndia.Itsproductsareofferedthroughabout 4,500,000 retail outlets in India. The company classifies its geographical operations into two segments, India and Outside India. In FY2013, India accounted 98.86% of the total revenue, whereas Outside India accounted for 1.14%.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 15 9Colgate-Palmolive (India) Ltd - SWOT Analysis 9.1Colgate-Palmolive (India) Ltd - SWOT Analysis - Overview Colgate-Palmolive (India) Limited is involved in manufacturing of oral care, personal care, home care, and professional oral care products. Strong supportfrom the parent company, increasing revenues and comprehensive product portfolio are the companyskeystrengths,whereasdecliningoperationalperformanceandlitigationsremainasconcernareas.Going forward,risksassociatedwithchangingconsumerpreferences,intensecompetitionandrisingdemandforcounterfeit productsmayaffectthecompany'soperatingresults.However,productlaunchesgrowthinitiativesandgrowingFMCG market in India may provide ample growth opportunities for the company. 9.2Colgate-Palmolive (India) Ltd - Strengths 9.2.1Strength - Strong support from the Parent Company Colgate-Palmoliveenjoysstrongsupportfromitsparentcompany,Colgate-PalmoliveCompany,USA,whichundertakes businessofpersonalcareproductsthroughvarioussubsidiaries.ItproducesandmarketsitsproductsunderColgateand Palmolivebrands.TheUSbasedColgate-PalmoliveCompanyisapersonalcareproductcompanywithpresenceacross NorthAmerica,LatinAmericaNorth,LatinAmericaSouth,WesternEurope,Central&EasternEurope,andAsia Pacific.Strongmarketpositionandbrandequityoftheparentcompanyprovidesanadvantagetoitssubsidiarieswhile attractingnewcustomersandsustainingexistingcustomerbase.TheparentcompanyalsoprovidesColgate-Palmolive (India)Limitedwiththenecessaryfinancialsupportandtheexpertisetostrengthenitsmarketpresenceandventureinto new businesses. 9.2.2Strength - Comprehensive Product Portfolio Thecompanyofferscomprehensiverangeofproductsintheoralcarecaremarket.Thecompanysproductportfolio includestoothpastes,toothbrushes,toothpowder,whiteningproducts,andmouthwash.Forkids,thecompanyoffers specialtoothpastes.Thecompanyalsooffersaverityoftoothbrushesforvariousmarketsegmentssuchasregular, children, entire familypurpose and special categories. Additionally, itoffers various solutions includinggingivitis treatment, sensitivitytreatment,andmouthulcertreatmentandtoothwhiteningkitandspecialtoothcleaningproductsfordentist. Comprehensive product portfolio enables the company to be the one stop solution for diversified customer needs therefore providing a leading position in the market. 9.2.3Strength - Increasing Revenues Thecompanysrevenuehasbeensignificantlyincreasing.DuringFY2013,thecompanysrevenuewasINR32137.29m when compared to INR 27439.12m in 2012, INR 23273.59m in 2011, INR 20609.16m in 2010 and INR 17886.67m in 2009. The companys total revenue grew at a CAGR of 15.78% over the past five years during FY2009-13. This was primarily due totheincreaseinrevenueofthecompanysOralCarebusinessasitcontinuedtoaccountforover90.00%ofitssales turnover in FY2013. Furthermore, in FY2013, the companys toothpaste and toothbrush businesses registered a very strong growth in term of volume and increased by 10.00% and 20.00% respectively. Increase in revenue may help the company to gain investor confidence. 9.3Colgate-Palmolive (India) Ltd - Weaknesses 9.3.1Weakness - Declining operational performance Theoperationalperformanceofthecompanydeclinedinthelastyear.DuringFY2013,operatingmarginofthecompany was20.63%incomparisonwithoperatingmarginof21.44%inFY2012.Additionally,thecompanysnetmargindecreased from16.27%inFY2012to15.46%inFY2013.Thisisprimarilyduetoimpropercostmanagementofthecompany.The companys operating cost as a percentage of sales also increased from 78.56% in FY2012 to 79.37% in FY2012. Improper costmanagementisanindicationofthecompanyslackoffocustowardsprofitability.Thecompanyhastoconsider necessary measures in order to focus towards achieving higher profits for future and reduce on operating costs. 9.3.2Weakness - Litigation The company has been a defendant in several lawsuits and also filed lawsuits against other parties to safeguard its market position.Forinstance,inAugust2013,Colgate-PalmoliveIndiafiledrepeatedlawsuitsagainstHindustanUnileverinthe DelhiHighCourttorestrainairingandpublishingadvertisementsofUnileversnewlylaunchedPepsodentGermicheck SuperiorPowertoothpaste,claimingtheadvertisementsweretarnishing,defamingtheworthandreputationofthe companystoothpastebrand.Inthesamemonth,thecompanystwopetitionsagainstUnileverwaredismissed.Such lawsuits not only inflate the companys expenditures but also have a derogatory effect on the brand image of the company.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 16 9.4Colgate-Palmolive (India) Ltd - Opportunities 9.4.1Opportunity - Growing FMCG market in India The company may benefit from the growing FMCG market in India.According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), due to increasing demand in rural areas, the fast moving consumer goods (FMCG)industry inIndiaisexpectedtogrowfrom2013by18.00%overthenext4to5years.Packagedfoodscategory,toiletries, beverages, detergents, edible oil, and cosmetics are expected to drive major growth. Rise in demand primarily attributed to the growing rural incomes and increasing awareness due to penetration of mass communication into rural areas, which led toconvergingruraltastesonurbanlinesthereforeincreasingthedemandformanypersonaluseproductsatthese areas..ThecompanyoffersawiderangeofFMCGproductsincludingoralcare,personalcare,andhouseholdcare. Therefore, growing FMCG market in India may increase the demand for the companys products. 9.4.2Opportunity - Growth Initiatives Thecompanypursuedseveralcapacityexpansioninitiativesinthelastfewmonths.InFY2013,thecompanyinvestedin setting up two new manufacturing facilities including a toothpaste manufacturing facility at Sanand, Gujarat and a toothbrush manufacturingfacilityatSricity,AndhraPradesh,India.Thecompany'snewfacilityinSricityisexpectedtocommence productionin2014.Suchcapacityexpansioninitiativesenablethecompanytoeffectivelyhandlethedemand-supply fluctuations in market, which in turn enhance revenue flow. 9.4.3Opportunity - Product launches The company may benefit from the recent product launches. In FY2013, the company added two new oral care products to its product portfolio. Colgate SlimSoft, a tooth brush with 17 times slimmer tip bristles than ordinary toothbrushes to remove the plaque effectively, which revolutionized the tooth brush technology and Colgate Total Pro Gum Health by entering gum care segment. With this launch, the company is positioned to tap the growing market in India. Such product launches may enable the company to cater to new customer segments which in turn broaden its revenue base. 9.5Colgate-Palmolive (India) Ltd - Threats 9.5.1Threat - Intense Competition Thecompanyfacestoughcompetitionfrombothlocalandglobaloperators.Variousexpansioninitiativestakenby competitorsmayputpressureonthecompanysmarketpositionandprofitmargins.Forinstance,inFebraury2013,the companys competitor Dabur India Limited announced the expansion of its oral care portfolio with the launch of Dabur Super Babool+SaltPowerToothpaste,India'sfirstNaturaltoothpastepackedwithtwopowerfuloralcareingredients--Saltand Babul'AcaciaArabia'extracts.Furthermore,inSeptember2013,Daburannouncedthelaunchofafirst-of-its-kind standalone oral health portal, www.daburdentalcare.com. The portal will be a one-stop shop for all oral hygiene needs, right fromprovidingnaturalsolutionsforavarietyofdentalproblemsliketoothaches,cavities,badbreath,Gingivitisetc,to providinginformationaboutnaturalkitcheningredientsfordentalcare.Suchmovesbycompetitorsputpressureonthe company to focus on innovation to stay competitive. 9.5.2Threat - Changing consumer preferences The companyis subject to the everchanging consumer preferences. The companymust constantly develop,produce and marketnewproductsinordertomaintainandenhancetherecognitionofitsbrandsandtryachievingafavorablemixof products. The consumer spending patterns and preferences that change rapidly are difficult to predict. The decrease in the market demand and change in the consumer spending demands for the companys products such as reduced demand for thecolorcosmeticsmayresultinthecarryinginventoriesthataretoohighorcannotbesoldatanticipatedpricesor increasedproductreturnsbyitscustomers.Thecompanysbusiness,financialconditionandresultsofoperationsmay adversely affected if itis unable to respond to trends in the market forbeauty and other consumerproducts and meet the changing consumer demands. 9.5.3Threat - Rising counterfeit goods market The companys performance may be affected due to growing imitated products market, especially in the emerging countries. Growing market for counterfeit goods has been on rise across industries and affecting the sales and the brand image of the branded products. With global annual sales of around US$500 billion, these counterfeit goods are expected to cross US$2 trillion in sales by 2026. The imitated goods in this industry have taken away the share of the branded products through low priceofferings.Italsocreatesconfusionamongthecustomersastheimitatedgoodscarrythesamedesignasofthe brandedproducts.However,thelowqualityofthesecounterfeitsaffectstheconsumerconfidenceandalsotarnishesthe brandimageoftheactualcompany.Hence,thecompanyispronetothesechallengesandanynegativeresultsofthe counterfeit products may affect on the companys fortunes.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 17 10 Colgate-Palmolive (India) Ltd - Company Financial Analysis 10.1Colgate-Palmolive (India) Ltd - Five Year Snapshot: Overview of Financial and Operational Performance Indicators ThecompanyreportedrevenueofUS$611millionduringthefiscalyear2014(2014).Thecompany'srevenuegrewata CAGRof9.35%during20102014,withanannualgrowthof13.12%over2013.During2014,operatingmarginofthe company was 18.97% in comparison with operating margin of 19.38% in 2013. In 2014, the company recorded a net profit margin of 15.09% compared to a net profit margin of 15.70% in 2013. Table 7:Colgate-Palmolive (India) Ltd - Annual ratios Key RatiosUnit/Currency20142013201220112010 Equity Ratios EPS (Earnings per Share)INR39.736.5332.8329.631.12 Dividend per ShareINR2728252220 Dividend CoverAbsolute1.471.31.311.351.56 Book Value per ShareINR44.113632.0228.2423.98 Cash Value per ShareINR9.059.058.067.060.92 Profitability Ratios Gross Margin%59.7159.3959.8460.6859.15 Operating Margin%18.9719.3820.0221.0119.76 Net Profit Margin%15.0915.716.5817.6121.57 Profit Markup%148.18146.25149154.33144.81 PBT Margin (Profit Before Tax)%20.3420.9621.8522.7424.7 Return on Equity%90101.46102.55104.82129.79 Return on Capital Employed%108.55116.71115.66116.62117.28 Return on Assets%36.2638.0139.5238.9347.95 Return on Fixed Assets%83.11119.34132.84146.44132.81 Return on Working Capital%5287.21894.3572.761003.18 Growth Ratios Sales Growth%13.1217.4717.8116.4915.76 Operating Income Growth%10.7413.712.2623.8451.14 EBITDA Growth%10.1812.5913.266.0938.79 Net Income Growth%8.6811.2610.9-4.8848.11 EPS Growth%-1.211.6110.83-4.2948.11 Working Capital Growth%-1751.11-80.77-28.1116.91-146.52 Cost Ratios Operating Costs (% of Sales)%81.0380.6279.9878.9980.24 Administration Costs (% of Sales)%26.1335.6235.3935.6437.46 Liquidity Ratios Current RatioAbsolute0.781.011.091.131.07 Quick RatioAbsolute0.520.780.760.890.87 Cash RatioAbsolute0.430.610.560.70.76 Leverage RatiosDebt to Equity RatioAbsolute0.01

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 18 Table 7:Colgate-Palmolive (India) Ltd - Annual ratios Key RatiosUnit/Currency20142013201220112010 Net Debt to EquityAbsolute0.05-0.2-0.25-0.24-0.02 Debt to Capital RatioAbsolute0.01 Efficiency Ratios Asset TurnoverAbsolute2.42.422.382.212.22 Fixed Asset TurnoverAbsolute5.138.278.328.687.75 Inventory TurnoverAbsolute6.396.934.975.857.25 Current Asset TurnoverAbsolute5.333.993.723.243.32 Capital Employed TurnoverAbsolute5.976.466.195.956.02 Working Capital TurnoverAbsolute272.8344.6727.2650.76 Revenue per EmployeeINR20380446 Net Income per EmployeeINR3074431 Capex to Sales%9.044.893.81.81.81 Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 19 11 Colgate-Palmolive (India) Ltd - Interim ratios Table 8:Colgate-Palmolive (India) Ltd - Interim ratios Key RatiosUnit/CurrencyJun-2014Jun-2013Mar-2004Dec-2003 Equity Ratios Interim EPS (Earnings per Share)INR9.9213.622.72.02 Profitability Ratios Gross Margin%62.6761.8259.8847.33 Operating Margin%18.5126.0822.8911.43 Net Profit Margin%14.121.5424.059.83 Profit Markup%167.87161.89149.2689.85 PBT Margin (Profit Before Tax)%19.1828.0726.4215 Cost Ratios Operating Costs (% of Sales)%81.4973.9277.1188.57 Administration Costs (% of Sales)%24.9725.3332.721.85 Liquidity Ratios Leverage RatiosSource: Canadean 11.1.1Colgate-Palmolive (India) Ltd - Financial ratios: Capital Market Ratios Table 9:Colgate-Palmolive (India) Ltd - Capital Market Ratios Key RatiosValue P/E (Price/Earnings) Ratio47.26 EV/EBITDA (Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization)32.41 Enterprise Value/Sales7.05 Enterprise Value/Operating Profit37.18 Enterprise Value/Total Assets16.95 Dividend Yield0.01 Note: Above ratios are based on share price as of 28-Nov-2014. The above ratios are absolute numbers. Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 20 11.2Colgate-Palmolive (India) Ltd - Financial Performance and Ratio Charts 11.2.1Colgate-Palmolive (India) Ltd - Revenue and Operating margin The consolidated group revenue of the company for 2014 stood at US$611 million, which corresponds to a growth rate of 13.12% overthepreviousyear.Theoperatingmarginofthecompanywas18.97%in2014,adecreaseof41.00basispointsoverthe previous year. Figure 1:Colgate-Palmolive (India) Ltd - Revenue and Operating Profit Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 21 11.2.2Colgate-Palmolive (India) Ltd - Asset and Liabilities The company's assets grew 13.93% over the previous year to US$254 million in 2014. The company's liabilities grew 8.77% over the previous year to US$152 million in 2014. The company's asset to liability ratio improved from 1.60 in 2013 to 1.67 in 2014. Figure 2:Colgate-Palmolive (India) Ltd - Financial Position Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 22 11.2.3Colgate-Palmolive (India) Ltd - Solvency In2014,thecompany'scurrentratiodeclinedto0.78fromthepreviousyear'scurrentratioof1.01.Thecompanysquickratio declined to 0.52in2014 from the previousyear's quick ratioof 0.78. In 2014,the companys debt ratio remained unchanged at 0.00. Figure 3:Colgate-Palmolive (India) Ltd - Solvency Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 23 11.2.4Colgate-Palmolive (India) Ltd - Valuation As of 28-Nov-2014, the company recorded an EV/EBIT of 37.18, EV/Total Assets of 16.95 and EV/Sales of 7.05. Figure 4:Colgate-Palmolive (India) Ltd - Valuation Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 24 11.3Colgate-Palmolive (India) Ltd - Competitive Benchmarking The following companies are the major competitors of Colgate-Palmolive (India) Ltd: Dabur India Limited (Ticker: DABUR) Godrej Consumer Products Limited (Ticker: GODREJCP) Henkel Adhesive Technologies India Private Limited Hindustan Unilever Limited (Ticker: HINDUNILVR) JHS Svendgaard Laboratories Ltd (Ticker: JHS) Reckitt Benckiser (India) Limited

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 25 For competitive benchmarking, latest financial results are considered. Following are the key performance indicators against which the companies have been benchmarked: 11.3.1Colgate-Palmolive (India) Ltd - Market Capitalization As of 28-Nov-2014, the company recorded a market capitalization of US$4,772 million, lower than its close competitors Hindustan UnileverLimited(Ticker:HINDUNILVR),DaburIndiaLimited(Ticker:DABUR)andGodrejConsumerProductsLimited(Ticker: GODREJCP)whichrecordedmarketcapitalizationsofUS$31,969million,US$7,915millionandUS$6,078millionrespectively. The company recorded earnings per share of US$0.74 in 2014, which has led to a price/earnings ratio (P/E ratio) of 47.26. This washigherthantheP/EratiosofitspeersHindustanUnileverLimited(Ticker:HINDUNILVR),DaburIndiaLimited(Ticker: DABUR)andGodrejConsumerProductsLimited(Ticker:GODREJCP),whichrecordedP/Eratioof43.33,45.93and42.77 respectively. Figure 5:Colgate-Palmolive (India) Ltd - Market Capitalization Source: CanadeanNote: Company names are represented by ticker symbols Bubble size represents Market Capitalization US$ Million For those data points with negative values, bubbles will not be displayed. Where the market cap is disproportionately smaller, a bubble may not be displayed.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 26 11.3.2Colgate-Palmolive (India) Ltd - Efficiency Thecompanyrecordedanoperatingmarginof18.97%in2014.Thiswashigherthantheoperatingmarginsofitspeers, Hindustan Unilever Limited (Ticker: HINDUNILVR), Dabur India Limited (Ticker: DABUR) and Godrej Consumer Products Limited (Ticker:GODREJCP),whichrecordedthemarginsof16.03%,14.97%and14.48%respectively.Intermsofrevenues,the company is 0.12 times of Hindustan Unilever Limited (Ticker: HINDUNILVR),0.51 times of Dabur India Limited (Ticker: DABUR), and0.47 times of Godrej Consumer Products Limited (Ticker: GODREJCP). Figure 6:Colgate-Palmolive (India) Ltd - Efficiency Source: CanadeanNote: Company names are represented by ticker symbols

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 27 11.3.3Colgate-Palmolive (India) Ltd - Valuation As of 28-Nov-2014, the companys EV/EBIT was 37.18. This was higher than that of its peers, Hindustan Unilever Limited (Ticker: HINDUNILVR) and Godrej Consumer Products Limited (Ticker: GODREJCP), which reported EV/EBIT figures of 36.31 and 31.03 respectively. Figure 7:Colgate-Palmolive (India) Ltd - Valuation Source: CanadeanNote: Company names are represented by ticker symbols

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 28 11.3.4Colgate-Palmolive (India) Ltd - Turnover: Inventory and Asset In2014,thecompanyreportedaninventoryturnoverof6.39,higherthanthatofitspeers:duringthesameperiod,Hindustan UnileverLimited(Ticker:HINDUNILVR),DaburIndiaLimited(Ticker:DABUR)andGodrejConsumerProductsLimited(Ticker: GODREJCP), recorded inventory turnovers of 5.22, 3.50 and 3.28 respectively. The companys asset turnover in 2014 was 2.40, higherthantheassetturnoversofitspeers:duringthesameperiod,HindustanUnileverLimited(Ticker:HINDUNILVR),Dabur IndiaLimited(Ticker:DABUR)andGodrejConsumerProductsLimited(Ticker:GODREJCP)recordedassetturnoversof2.12, 1.33 and 0.91 respectively. Figure 8:Colgate-Palmolive (India) Ltd - Turnover: Inventory and Asset Source: CanadeanNote: Company names are represented by ticker symbols

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 29 12 Colgate-Palmolive (India) Ltd - Mergers & Acquisitions and Partnerships 12.1Colgate-Palmolive (India) Ltd - M&A and Partnerships Strategy Essel Propack partners with Colgate Palmolive Deal TypePartnershipDeal Sub TypeOther Deal StatusAnnouncedAnnounced Date6/17/2011 12:00:00 AM Deal in Brief Essel Propack Limited, a specialty packaging company, a manufacturer and seller of laminated, and seamless or extruded plastic tubes,hassignedalong-termagreementwithColgate-Palmolive(India)Limited,amanufacturerandselleroforalcareand personal care products to set up a plant in Goa at an investment of 400 million rupees.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 30 13 Colgate-Palmolive (India) Ltd - Recent Developments Colgate & Indian Dental Association bring free dental check-ups closer to consumers Colgate-Palmolive(India)Limited,themarketleaderinOralCare,andtheIndianDentalAssociation(IDA)havebeenorganizingfreedental check-ups as part of Oral Health Month(OHM)- an annual initiative dedicated to spreading oral health and hygiene awareness throughout the country. Published Date : 11/6/2014 12:02:00 PM Colgate & IDA launched Oral Health Month, 2014 with an aim to create a cavity-free future Colgate-Palmolive(India)Limited,themarketleaderinOralCare,andtheIndianDentalAssociationannouncedthecommencementofOral Health Month (OHM) across the country. Published Date : 10/8/2014 12:00:00 AM Colgate introduces SlimSoft Charcoal, super slim tip bristle toothbrush Colgate-Palmolive (India) Limited, the market leader in Oral Care, now introduces Colgate SlimSoft Charcoal Indias first and only toothbrush with super slim tip bristles now infused with Charcoal. Published Date : 8/4/2014 12:00:00 AM Colgate introduces complete teeth whitening treatment Colgate-Palmolive(India)Limited,themarketleaderinOralCare,nowintroducesabeauty-oralcarebreakthrough-thenewColgateVisible White teeth whitening treatment. Published Date : 4/3/2014 12:00:00 AM Colgate-Palmolive Q3 net profit up 74% Colgate-Palmolive (India), a subsidiary of Colgate Palmolive in the US has announced that its Q3 net sales were INR6.69bn ($133.73m), up 20% against the same quarter last year. The firm's Reported Net Profit After Tax for the quarter was INR1.15bn ($23.08m), up 74% compared tothe same quarter of the previous year. Published Date : 1/25/2012 5:54:00 AM Source: Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 31 14 Appendix 14.1Methodology Canadean company reports are based on a core set of research techniques which ensure the best possible level of quality and accuracy of data. The key sources used include: Company Websites Company Annual Reports SEC Filings Press Releases Proprietary Databases Notes Financial information of the company is taken from the most recently published annual reports or SEC filings The financial and operational data reported for the company is as per the industry defined standards Revenue converted to US$ at average annual conversion rate as of fiscal year end 14.2Colgate-Palmolive (India) Ltd - Ratio Definitions Capital Market Ratios Capital Market Ratios measure investor response to owning a company's stock and also the cost of issuing stock. Price/Earnings Ratio (P/E) Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annual income earned per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of income, so the stock is more expensive compared to one with lower P/E ratio. A high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. Price per share is as of previous business close, and EPS is from latest annual report. Formula: Price per Share / Earnings per Share Enterprise Value/Earnings before Interest, Tax, Depreciation & Amortization (EV/EBITDA) Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used in parallel with, or as an alternative to, the P/E ratio. The main advantage of EV/EBITDA over the PE ratio is that it is unaffected by a company's capital structure. It compares the value of a business, free of debt, to earnings before interest. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report. Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / (Net Income + Interest + Tax + Depreciation + Amortization) Enterprise Value/Sales Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs to buy the company's sales. EV/Sales is seen as more accurate than Price/Sales because market capitalization does not take into account the amount of debt a company has, which needs to be paid back at some point. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report. Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Sales Enterprise Value/Operating Profit Enterprise Value/Operating Profit measures the company's enterprise value to the operating profit. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report. Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Operating Income

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 32 Enterprise Value/Total Assets Enterprise Value/Total Assets measures the company's enterprise value to the total assets. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report. Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Total Assets Dividend Yield Dividend Yield shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock. Formula: Annual Dividend per Share / Price per Share Equity Ratios These ratios are based on per share value. Earnings per Share (EPS) Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability. Formula: Net Income / Weighted Average Shares Dividend per Share Dividend is the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Dividend Cover Dividend cover is the ratio of company's earnings (net income) over the dividend paid to shareholders. Formula: Earnings per share / Dividend per share Book Value per Share Book Value per Share measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Formula: (Shareholders Equity - Preferred Equity) / Outstanding Shares Cash Value per Share Cash Value per Share is a measure of a company's cash (cash & equivalents on the balance sheet) that is determined by dividing cash & equivalents by the total shares outstanding. Formula: Cash & equivalents / Outstanding Shares Profitability Ratios Profitability Ratios are used to assess a company's ability to generate earnings, based on revenues generated or resources used. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. Gross Margin Gross margin is the amount of contribution to the business enterprise, after paying for direct-fixed and direct variable unit costs. Formula: {(Revenue-Cost of revenue) / Revenue}*100 Operating Margin Operating Margin is a ratio used to measure a company's pricing strategy and operating efficiency. Formula: (Operating Income / Revenues) *100 Net Profit Margin Net Profit Margin is the ratio of net profits to revenues for a company or business segment - that shows how much of each dollar earned by the company is translated into profits. Formula: (Net Profit / Revenues) *100

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 33 Profit Markup Profit Markup measures the company's gross profitability, as compared to the cost of revenue. Formula: Gross Income / Cost of Revenue PBIT Margin (Profit Before Interest & Tax) Profit Before Interest & Tax Margin shows the profitability of the company before interest expense & taxation. Formula: {(Net Profit + Interest + Tax) / Revenue} *100 PBT Margin (Profit Before Tax) Profit Before Tax Margin measures the pre-tax income over revenues. Formula: {Income Before Tax / Revenues} *100 Return on Equity Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. Formula: (Net Income / Shareholders Equity)*100 Return on Capital Employed Return on Capital Employed is a ratio that indicates the efficiency and profitability of a company's capital investments. ROCE should always be higher than the rate at which the company borrows; otherwise any increase in borrowing will reduce shareholders' earnings. Formula: EBIT / (Total Assets Current Liabilities)*100 Return on Assets Return on Assets is an indicator of how profitable a company is relative to its total assets, the ratio measures how efficient management is at using its assets to generate earnings. Formula: (Net Income / Total Assets)*100 Return on Fixed Assets Return on Fixed Assets measures the company's profitability to its fixed assets (property, plant & equipment). Formula: (Net Income / Fixed Assets) *100 Return on Working Capital Return on Working Capital measures the company's profitability to its working capital. Formula: (Net Income / Working Capital) *100 Cost Ratios Cost ratios help to understand the costs the company is incurring as a percentage of sales. Operating costs (% of Sales) Operating costs as percentage of total revenues measures the operating costs that a company incurs compared to the revenues. Formula: (Operating Expenses / Revenues) *100 Administration costs (% of Sales) Administration costs as percentage of total revenue measures the selling, general and administrative expenses that a company incurs compared to the revenues. Formula: (Administrative Expenses / Revenues) *100 Interest costs (% of Sales) Interest costs as percentage of total revenues measures the interest expense that a company incurs compared to the revenues. Formula: (Interest Expenses / Revenues) *100 Leverage Ratios Leverage ratios are used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity, assets and interest expenses.

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 34 Debt to Equity Ratio Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries tend to have a higher debt equity ratio. Formula: Total Liabilities / Shareholders Equity Debt to Capital Ratio Debt to capital ratio gives an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. This indicates to investors whether a company is more prone to using debt financing or equity financing. A company with high debt-to-capital ratios, compared to a general or industry average, may show weak financial strength because the cost of these debts may weigh on the company and increase its default risk. Formula: {Total Debt / (Total assets - Current Liabilities)} Interest Coverage Ratio Interest Coverage Ratio is used to determine how easily a company can pay interest on outstanding debt, calculated as earnings before interest & tax by interest expense. Formula: EBIT / Interest Expense Liquidity Ratios Liquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. A company's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern. Current Ratio Current Ratio measures a company's ability to pay its short-term obligations. The ratio gives an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. Formula: Current Assets / Current Liabilities Quick Ratio Quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. Formula: (Current Assets - Inventories) / Current Liabilities Cash Ratio Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. It only looks at the most liquid short-term assets of the company, which are those that can be most easily used to pay off current obligations. It also ignores inventory and receivables, as there are no assurances that these two accounts can be converted to cash in a timely matter to meet current liabilities. Formula: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)} Efficiency Ratios Efficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking at maximizing its use of resources. Fixed Asset Turnover Fixed Asset Turnover ratio indicates how well the business is using its fixed assets to generate sales. A higher ratio indicates the business has less money tied up in fixed assets for each currency unit of sales revenue. A declining ratio may indicate that the business is over-invested in plant, equipment, or other fixed assets. Formula: Net Sales / Fixed Assets

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 35 Asset Turnover Asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue to the company. A higher asset turnover ratio shows that the company has been more effective in using its assets to generate revenues. Formula: Net Sales / Total Assets Current Asset Turnover Current Asset Turnover indicates how efficiently the business uses its current assets to generate sales. Formula: Net Sales / Current Assets Inventory Turnover Inventory Turnover ratio shows how many times a company's inventory is sold and replaced over a period. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying. Formula: Cost of Goods Sold / Inventory Working Capital Turnover Working Capital Turnover is a measurement to compare the depletion of working capital to the generation of sales. This provides some useful information as to how effectively a company is using its working capital to generate sales. Formula: Net Sales / Working Capital Capital Employed Turnover Capital employed turnover ratio measures the efficiency of a company's use of its equity in generating sales revenue to the company. Formula: Net Sales / Shareholders Equity Capex to sales Capex to Sales ratio measures the company's expenditure (investments) on fixed and related assets' effectiveness when compared to the sales generated. Formula: (Capital Expenditure / Sales) *100 Net income per Employee Net income per Employee looks at a company's net income in relation to the number of employees they have. Ideally, a company wants a higher profit per employee possible, as it denotes higher productivity. Formula: Net Income / No. of Employees Revenue per Employee Revenue per Employee measures the average revenue generated per employee of a company. This ratio is most useful when compared against other companies in the same industry. Generally, a company seeks the highest revenue per employee. Formula: Revenue / No. of Employees Efficiency Ratio Efficiency Ratio is used to calculate a bank's efficiency. An increase means the company is losing a larger percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the bank and its shareholders. Formula: Non-interest expense / Total Interest Income Source : Canadean

Canadean. This product is licensed and is not to be photocopied. Colgate-Palmolive (India) Ltd 36 14.3Disclaimer All Rights Reserved Nopartofthispublicationmaybereproduced,storedinaretrievalsystemortransmittedinanyformbyanymeans, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Canadean. The data and analysis within this report is driven by Canadean from its own primary and secondary research of public and proprietary sources and does not necessarily represent the views of the company profiled. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Canadean delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Canadean can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. Reproduced with permission of the copyright owner. Further reproduction prohibited withoutpermission.