Colgate to disburse Rs122cr dividend by capital redn

Colgate-Palmolive (India) Limited (the "Company") today announced a proposal for Reduction of Capital to return Rs.122.40 crore (excluding dividend distribution tax) to shareholders. This amount will be paid as a "Deemed Dividend" at Rs.9 per share uniformly to all shareholders, and will not be liable to tax in the hands of the shareholders.

The Reduction of Capital, which is in excess of the wants of the Company, is proposed under Section 100 of the Companies Act and will be achieved by reducing the face value of the existing shares from Rs.10/share to Re.1/ share. The number of shares issued, paid-up and outstanding and the pattern of shareholding will remain unchanged. The proposal is subject to approval by shareholders at the ensuing Annual General Meeting and confirmation by the Bombay High Court.

Through this Capital Reduction exercise, the Company will achieve the objective of paying off excess capital. Consistent with the Company's policy of rewarding its shareholders, this proposal will result in the return of Rs.122.40 Crore to the shareholders from surplus cash. This Reduction of Capital will significantly improve the return on shareholders' equity.

Post-reduction of capital, the Company will continue to have strong cash reserves and a healthy Balance Sheet which will support the Company's ongoing growth and investment programs.

Financial Advisors to the transaction: JM Morgan Stanley Private Limited.