Mumbai: Colgate Palmolive (India) will reduce its capital by returning Rs122.40 crore to shareholders, and will reduce the face value of its shares from Rs10 to Re1.

The company said that the amount will be paid as a 'deemed dividend' at Rs9 per share uniformly to all shareholders, and will not be taxed in the hands of the shareholders. In addition to the payout of Rs122.4 crore, the company will pay an addition Rs20.8 crore as dividend distribution tax at 17 per cent.

The company said that after averaging 100 per cent dividend for the past three years, capital expenditure of Rs168.8 crore and rationalisation of supply chain at Rs60.4 crore in the same time period, the company still had a large treasury portfolio.

Colgate Palmolive, which has a 51 per cent stake in Colgate Palmolive (India), would earn Rs62.42 crore as its Indian subsidiary undertakes the capital reduction exercise.

The proposal is subject to approval by shareholders at the Annual General Meeting on July 27, 2007 and the Bombay High Court.

Colgate Palmolive India has reported a 5.72 per cent increase in consolidated net profit at Rs148.39 crore for the year ended March 31, 2007 (FY07) when compared with Rs140.04 crore for the year ended March 31, 2006 (FY06).

The total revenue increased to Rs1361.55 crore for FY07 from Rs1173.66 crore for FY06.

For the quarter ended March 31, 2007 (Q4FY07), the company posted a net profit of Rs50.59 crore as compared to Rs37.01 crore for Q4FY06.

Total revenue increased to Rs360.60 crore for Q4FY07 from Rs313.58 crore for Q4FY06.