Report of the Directors

To,

The Members

Colgate-Palmolive (India) Limited

1.Your Directors have pleasure in presenting their Report and Audited Accounts of the Company for the year ended March 31, 2016.

2. Business Performance

India’s economic growth rate as measured through GDP showed signs of steady recovery in F.Y. 2015-16 at around 7.6% as compared to 7.2% in 2014-15. Much of that improvement is attributed to increase in urban consumption and infrastructure investments by the Government. However, the rural consumption in 2015 has remained subdued due to two consecutive weak monsoons and drought conditions in some of the states in India.

India’s Wholesale Price Index fell for the 17th consecutive month until March 2016 because of cheaper fuel and manufactured goods, indicating weak demand and lack of pricing power for the producers. Inflation in 2015-16 continued to moderate steadily as the Consumer Price inflation index has declined to 5% from 5.9% in 2014-15. The Central Bank, which primarily looks at retail inflation data, had in the month of February 2016, cut the policy rate by 0.25% and projected retail inflation at about 5%, this fiscal year. The Indian Meteorological Department has forecasted an above normal monsoon this year which will help in improving rural economy and drive the consumption.

While the economic environment for the year looks positive, a revival in private investment, increase in rural consumption and good monsoon will remain as critical economic drivers of growth in F.Y. 2016-17. While the fiscal policies of the government are being focused around growing rural economy and improving public infrastructure, passing of reforms like GST could give further impetus to India’s economic agenda.

Notwithstanding increased competitive intensity and low consumer demand in previous financial year, your Company delivered good results.

Your Company’s Net Sales for the F.Y. 2015-16 stood at Rs. 41,32.16 Crore as compared to Rs. 39,54.78 Crore for the previous financial year. The Organic growth of the Company stands at 10% offset by phasing out of fiscal benefits in the State of Himachal Pradesh to give a reported growth of 4% over the same period of the previous year.

Your Company’s Net Profit after Tax for the F.Y. 2015-16 is up at 32% which excludes the impact of phasing out of fiscal benefits in the State of Himachal Pradesh and restructuring cost related to toothpowder manufacturing facility at Aurangabad, in the State of Maharashtra. Including the aforesaid impact, the Net Profit after Tax of your Company for the F.Y. 2015-16 is Rs. 5,76.51 Crore as compared to Rs. 5,58.98 Crore for the previous financial year.

Your Company has made outstanding market share progress with Toothpaste at 55.7% and Toothbrushes at 46.2% during the period of January to April 2016. This is a result of ongoing innovation supported by impeccable execution in all retail environments by your Company. Your Company’s efforts in the area of efficiency continue to pay-off with its ‘Funding the Growth’ initiatives, which deliver savings, allowing us to improve our investment levels while also delivering improved profitability.

3. Bonus Issue

The Board of Directors of your Company, with a view to encourage the participation of retail investors, recommended a bonus issue of one equity share for every equity share held at their meeting held on July 30, 2015. The said recommendation for issue of Bonus equity shares was approved by the shareholders through postal ballot and e-Voting on September 10, 2015.

4. Dividend

Your Board declared three interim dividends, aggregating Rs. 10/- per share on the expanded capital base, for the F.Y. 2015-16. These dividends were paid on November 26, 2015, December 23, 2015 and April 21, 2016. Having declared three interim dividends, your Board has not recommended a final dividend for the F.Y. 2015-16.

5. Colgate – the # 1 Most Trusted Brand in India

Colgate was once again voted as the #1 ‘Most Trusted Brand’ in India in the Economic Times – Brand Equity Survey, across categories in 2015.

This is the fifth consecutive year that Colgate has been voted as the #1 ‘Most Trusted Brand’. It is pertinent to note that Colgate is the only brand to feature in the top three from 2001-2015 since the inception of the survey.

6. Focus on Innovation and New Launches

Your Company strongly believes that introducing new innovative products by leveraging technology from the Parent Company is a key driver of profitable growth. Your Company is focused on innovation that provides value-added new products across all price points. Beyond new products, innovation is embedded in your Company’s culture that encourages new ideas and process improvements in every aspect of the organization.

Your Company’s continued commitment to grow the oral care category by adopting advanced products has resulted in several new product launches that are mentioned as below :

In the toothpaste category, the Company introduced innovative products like :

• Colgate Total Charcoal Deep Clean

Toothpaste, a product which combines the science of Colgate Total with micro charcoal particles. The result is a clinically proven, unique and superior anti-germ technology with ultra-micro charcoal particles that prevents germ build-up on all mouth surfaces viz. teeth, gums, cheeks and tongue.

• Colgate Active Salt Neem Toothpaste, addresses the inflammatory gum problem of pyorrhea. Its unique formula, containing Salt & Neem, helps strengthen the weakening gums and keep Pyorrhea away.

• Colgate Sensitive Pro-Relief (CSPR) Enamel Repair Toothpaste, a scientifically advanced technology that provides long-term relief from the problem of tooth sensitivity. In the toothbrush category, the Company introduced innovative products like :

• Colgate 360o Toothbrush range :

? 360o Charcoal Gold, a never-seenbefore gold coloured toothbrush that provides superior whole mouth cleaning. It has Charcoal infused spiral bristles which gently polish teeth and give a deep & gentle clean.

? 360o Whole Mouth Clean, provides 151% more germ removal than any ordinary toothbrush.

? 360o Visible White with its spiral bristles and whitening cups effectively removes surface stains.

? 360o Floss-Tip reaches 4X deeper with its FlossTip technology that is designed to clean along the gumline.

• Colgate ZigZag Black Toothbrush, a line extension of one of India’s most popular toothbrush brand ‘Colgate ZigZag’. As the market leader, Colgate has introduced many ‘firsts’ in the toothbrush category and Colgate ZigZag Black is the first black toothbrush in the Mass Segment.

Colgate Pain Out - Your Company has recently introduced a completely new segment of "express Relief from Tooth Pain” with the launch of innovative Proprietary Ayurvedic Medicine "Pain Out". Colgate Pain Out is a revolutionary new product which provides express symptomatic relief from tooth pain with just one drop. This first-of-its-kind product has been conceptualized and introduced by your Company in India. Adopting innovations like these help reaffirm your Company’s position as a thought leader in the Oral Care category and as a Company which strives to understand and address the needs of the consumers.

In the Personal Care category your Company has introduced for the first time, Palmolive’s Foaming Hand Wash range in two variants – one with delicate notes of ‘Raspberry’ and one with a fresh bouquet of ‘Lime & Mint’. The rich foam from these hand washes gently clean and hydrate hands to make them feel soft & smooth. Your Company has also introduced two new variants of liquid Hand Wash – ‘The Palmolive Black Orchid & Milk’, with milk proteins & a sensual scent of exotic flowers and ‘The Palmolive Sea Minerals’, with 100% natural origin sea salt.

Innovations like these will help your Company maintain its position of India’s most trusted Brand today, and hopefully for many years to come.

7. New projects and expansions

As stated in the previous Annual Reports, your Company had set up the state-of-the-art Toothpaste manufacturing facility at Sanand in Gujarat in the year 2014 and a new stateof- the-art Toothbrush manufacturing facility at Sricity in Chittoor District in Andhra Pradesh in the year 2015. The above facilities have already commenced commercial production and are catering to the domestic and the export markets (for Sanand Toothpaste facility).

Your Company, with a long term vision of sustaining profitable growth, has made additional capital investments during the year for expanding the existing manufacturing capacities at its above Toothpaste and Toothbrush manufacturing facilities. Your Board strongly believes that such additional investments on capacity expansions have been made to grow the business and deliver a profitable growth over the long term.

8. Expiry of Fiscal Incentives at Baddi Facility

As stated in the Annual Report for the F.Y. 2014-15, the income tax and excise benefits to the Company’s manufacturing facility at Baddi expired in the year 2015, and post its expiry, the Company has been paying applicable Excise duty on the production and Income tax on the Profits from the said facility.

9. Sustainability

Your Company is committed to sustainability with focused and measurable goals. Your Company values sustainability through a commitment to the quality of the environment and extends it to the long term well-being of the people and communities, it serves. Through our sustainability efforts, we are ensuring that the business grows responsibly, while promoting the well-being of future generations.

Considering this, your Company developed a plan that guides its sustainability initiative with key goals in the following three areas viz. People, Performance and Planet.

The broad aspects covered in these goals are as under :

• People - Promoting healthier lives, Contributing to the Communities where we live and work.

• Performance - Delivering Products that delight consumers and respect our Planet.

• Planet - Making every drop of water count, Reducing our impact on the climate and the environment.

Your Company believes that integrating sustainability into its everyday operations will help in making better business decisions and improve peoples’ lives. The sustainability strategy will also continue to increase consumer loyalty, provide a competitive advantage and help to ensure longterm shareholder value. Amongst the sustainability initiatives in the area of People, Performance and Planet, listed are a few initiatives undertaken during the year :

- Free Health Check-up for all the employees;

- Initiatives on clean technology, energy efficiency, renewable energy etc.;

- Sourcing of packaging material locally to reduce the fuel emission;

- Usage of reused and recycled materials for packaging;

- LEED certification for our new facilities;

- Reducing consumption of water and energy per ton of product produced; and

- Nil material to landfill

More details on energy conservation measures undertaken by your Company are mentioned in Annexure - 3 to this Report.

10. Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors, based on the representations received from the Management, confirm :

a) 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;

b) 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;

c) 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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that they have prepared the annual accounts on a going concern basis;

e) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

11. Corporate Governance

A separate report on Corporate Governance along with the Auditors’ Certificate on its compliancetogether with the Management Discussion and Analysis Report is attached as Annexure - 1 to this Report.

The details of number of meetings of the Board and its Committees are given in the Corporate Governance Report.

12. Corporate Social Responsibility

Your Company’s success is linked to the Company’s values of Caring, Global Teamwork and Continuous Improvement. Your Company cares about people : Colgate people, customers, shareholders, business partners and the community at large. Your Company works towards protecting the environment, improving and enhancing the quality of life of individuals and communities through several partnerships and associations.

Your Company and its employees are committed to bring in a positive change in the lives of many underserved communities. Your Company undertakes its Corporate Social Responsibility (CSR) activities through diverse effective programs. Some of the key CSR activities which your Company has undertaken during the year are in the areas of Promoting preventive health care, Promoting education, Addressing inequalities and Conservation of natural resources. These activities are broadly in accordance with the Schedule VII of the Companies Act, 2013.

Your Board of Directors and the CSR Committee review and monitor, from time to time, all CSR initiatives being undertaken by the Company.

Following are the key CSR programs undertaken by your Company during the Financial Year 2015-16 :

• Bright Smiles, Bright FuturesTM

• Oral Health Month

• A Positive Step – A Program in collaboration with ‘Network in Thane by People Living with HIV’, a Non-Governmental Organization (NGO), for addressing inequalities and promoting education for HIV infected and affected children. Under this initiative, 79 children are supported by your Company during the year.

• Supporting ‘Pratham’ – An NGO, in the areas of providing quality education to the underprivileged children of India. Under their motto of ‘Every child in school and learning well’, your Company supports the NGO in their initiatives like ‘Laakhon Mein Ek’ and ‘Read India’ that are aimed at promoting continuous education.

• Supporting ‘Seva Mandir’ – A nonprofit organization, working in the areas of conservation of natural resources, improving health and education of the people. Under the ‘Colgate Seva Mandir Scholarship Fund’ the corpus amount donated by the Company, is being used to support school education of children of class 8 to 12, especially for those who are from underserved families or those living in the tribal areas.

• Skill development program for rural youth

– Under a program named ‘SAKSHAM’, your Company has partnered with SEEDS, for economic & social upliftment of rural youth through skill development programs that make them employable. The implementation partner is affiliated by National Skill Development Corporation (NSDC) and has necessary expertise including pan- India presence to promote this high impact initiative.

• Donation to Chennai flood victims – During the year, the State of Tamil Nadu, especially Chennai and surrounding areas had come to a standstill because of major floods. In this time of adversity, your Company had partnered with an emergency group, ‘Action Aid’, a Non-Governmental Organization, which works towards helping communities in disaster management and contributed to support women with disabilities to help them regain livelihood.

The details of the above programs/activities are elaborated in ‘the Annual Report on CSR activities’ which is attached as Annexure - 2 to this Report. The contents of the CSR Policy as well as the CSR programs undertaken by the Company are available on the Company’s website.

13. Employee Relations

The employee relations in the Company continued to be healthy, cordial and progressive.

Your Company’s culture is one that reflects its values of Caring, Global Teamwork and Continuous Improvement, as well as, its unwavering commitment to integrity in everything we do. Our employees are our greatest asset, and your Company is committed to maintain an environment that respect their differences, value their contributions and provide opportunities for their personal and professional growth.

Your Company recognizes its responsibility and continues to provide a safe working environment for its employees, free from sexual harassment and discrimination. Your Company also has a Policy on Prevention of Sexual Harassment which is reviewed by the Internal Complaints Committee (ICC) at regular intervals.

"Managing With Respect" is the way Colgate people put Company Values into action. Each and every employee is expected to work with all stakeholders (other employees, customers, consumers, suppliers, etc.) in a respectful manner. Each employee is also expected to strictly follow the Company’s Code of Conduct and any violation is treated with zero tolerance. By fully including ethics and integrity in the ongoing business relationships and decision-making, your Company demonstrates a commitment to a culture that promotes the highest ethical standards. During the year, 5 complaints were received, investigated and resolved by the ICC. There are no pending complaints at the end of the year 2015-16.

14. 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 a strong association with its business partners.

15. Particulars of Employees

Information as per Section 197 of the Companies Act, 2013 (the ‘Act’) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report as Annexure - 6.

Details of employee remuneration in accordance with the Act and Rules mentioned above are available at the Registered Office of the Company during business hours on any working day of the Company up to the date of 75th Annual General Meeting. Any shareholder interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of the Company. Such details are also available on your Company’s website.

16. Energy Conservation, Technology Absorption and Foreign Exchange

The information required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is appended hereto as Annexure - 3 and it forms part of this Report.

17. Directors and Key Managerial Personnel

Consequent to the elevation of role of the previous Chairman Mr. Mukul Deoras as the Chief Marketing Officer of Colgate-Palmolive Company, USA, the Board of Directors of your Company after considering the recommendation of the Nomination & Remuneration Committee, have appointed Mr. Vinod Nambiar as the ‘Nonretiring Director and the Chairman of the Board’ of the Company effective September 28, 2015. The Board of Directors of your Company have also appointed Mr. Nambiar as a member of the Nomination & Remuneration Committee effective September 28, 2015. Your Board strongly believes that appointment of Mr. Nambiar would add significant value and strength to the Board. The details of Mr. Nambiar are available on the Company website.

Your Board places on record its appreciation for the outstanding contributions made by Mr. Mukul Deoras during his tenure as the Chairman of the Board of the Company.

Following are the ‘Non-executive & Independent Directors’ of your Company, who were appointed by the shareholders at their 73rd Annual General Meeting for a term of five consecutive years effective July 25, 2014.

1. Mr. R. A. Shah;

2. Mr. P. K. Ghosh;

3. Mr. J. K. Setna;

4. Mr. V. S. Mehta; and

5. Dr. (Ms.) Indu Shahani

6. Ms. Shyamala Gopinath was appointed by the shareholders at their 74th Annual General Meeting for a term of five consecutive years effective July 30, 2015.

The Independent Directors of the Company have furnished the declarations as required under Section 149(6) of the Act regarding their independence.

Mr. Issam Bachaalani, Managing Director, Mr. Godfrey Nthunzi, Whole-time Director & CFO and Mr. Niket Ghate, Whole-time Director & Company Secretary are the Key Managerial Personnel of the Company.

Pursuant to the provisions of Section 152 of the Act and under Article 124 of the Company’s Articles of Association, Mr. Niket Ghate retires by rotation at the ensuing 75th Annual General Meeting and, being eligible, offers himself for re-appointment.

A detailed profile of all the directors of your Company is available on the company website www.colgatepalmolive.co.in

18. Familiarization Programme

Your Company, for many years now, has been familiarizing the Independent Directors on its Board with detailed presentations by its business functional heads on the Company operations, strategic business plans, new products and technologies, including significant aspects of the Industry and its future outlook. The details of familiarization programmes extended to the Non-executive & Independent Directors during the year are available on the Company website at http://www.colgate.co.in/Colgate/IN/Corp_ v2/RelatedInformation/Familarization- Programme.pdf

19. Policies

The Board of Directors of your Company from time to time has framed and approved various Policies for better governance and administration of your Company. Some of the important Policies that were framed by your Board include the following :

i. Nomination & Remuneration Policy : This policy sets the objective, terms of reference, functions and scope of the Nomination & Remuneration Committee for determining qualifications, experience, independence etc. relating to the appointment and remuneration for the Directors, Key Managerial Personnel and Senior Management employees of the Company.

ii. Corporate Social Responsibility Policy : This policy sets the scope for identification of the areas where the CSR activities will be performed, evaluation of CSR activities, review the CSR spending vis-a-vis the activities implemented and monitoring the process of CSR projects/programs of the Company.

iii. Risk Management Policy : This policy provides the framework for identification of risks of the Company, risk assessment and prioritization, loss prevention measures and other risk management measures for the Company.

iv. Policy on Related Party Transactions : This policy intends to regulate the transactions between the Company and its related parties based on the laws and regulations applicable to the Company from time to time.

Apart from the above, your Company during the year has framed and approved certain additional Policies which include Policy on determination of Materiality of Event or Information, Record Management Policy and Code of Conduct for Dealing in Company’s Securities.

Brief information about the aforesaid policies is stated in the Corporate Governance Report annexed to this Report.

20. Committees

The Board of Directors of your Company has constituted various committees of the Board to assist in discharging its duties. These include Audit Committee, Nomination & Remuneration Committee, Risk Management Committee, Stakeholders’ Relationship Committee and Corporate Social Responsibility Committee. The Board has approved the terms of reference for each of these committees. All these Committees of the Board hold their meetings at regular intervals and make their recommendations to the Board from time to time.

The broad terms of reference of the said Committees are stated in the Corporate Governance Report annexed to this Report.

21. Annual Performance Evaluation by the Board

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, the Board has carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of the Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report annexed to this Report.

22. Vigil Mechanism

Your Company has an effective Vigil Mechanism system which is embedded in its Code of Conduct. The Code of Conduct of your Company serves as a guide for daily business interactions, reflecting your Company’s standard for appropriate behaviour and living corporate values. The Code of Conduct applies to all Colgate people, including Directors, Officers, and all employees of the Company. Even your Company vendors and suppliers are also subject to these requirements as adherence to the Code is a prerequisite for conducting business with your Company.

The Colgate-Palmolive EthicsLine phone number and e-mail id are available on the Company website to report any genuine concerns about unethical behaviour, any actual or suspected fraud or violation of Company’s Code of Conduct.

23. Loan, Guarantees and Investment

Particulars of loans, guarantees and investment made by the Company pursuant to Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Accounts.

24. Related Party Contracts & Arrangements

All related party transactions done by the Company during the financial year were at arm’s length and in ordinary course of business. All related party transactions were placed in the meetings of Audit Committee and the Board of Directors for their necessary review and approval. During the financial year, your Company has not entered into any material transaction as per the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 with any of its related parties which may have potential conflict with the interest of the Company at large. Disclosures pursuant to Accounting Standards on related party transactions have been made in the notes to the Financial Statements. To identify and monitor significant related party transactions, the Company has framed a policy on the related party transactions and the same is available on the Company’s website.

25. Auditors

M/s. Price Waterhouse, Chartered Accountants, retire and are eligible for re-appointment as Auditors from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting. The Auditors’ Report for the financial year 2015-16 does not contain any qualification, reservation or adverse remarks.

26. Secretarial Auditor & Secretarial Audit Report

The Board had appointed M/s. S.N. Ananthasubramanian & Co., Company Secretaries in Whole-time Practice, to conduct Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013. The report of the Secretarial Auditor in Form MR-3 is annexed to this report as Annexure - 4. The Secretarial Auditors’ Report for the Financial Year 2015-16 does not contain any qualification, reservation or adverse remarks.

27. Extract of Annual Return

Pursuant to the Section 92(3) of the Companies Act, 2013 extract of the annual return in Form MGT-9 is annexed to this Report as Annexure - 5.

28. Business Responsibility Report

The Business Responsibility Report for the Financial Year 2015-16, as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report as Annexure - 7.

29. Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company in future. Additionally, there are no material changes and commitments which will affect the financial position of the Company.

30. Acknowledgements

Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels.

Your Directors also wish to place on record their gratitude towards the shareholders for their continued support and confidence.

On behalf of the Board

Issam Bachaalani Managing Director (DIN : 06975320)

R. A. Shah Vice-Chairman (DIN : 00009851)

Niket Ghate Whole-time Director & Company Secretary (DIN : 00001925)

Godfrey Nthunzi Whole-time Director & CFO (DIN : 06450693)

May 24, 2016