Refer to the extracts from the Annual Report 2001–2002 of Colgate-Palmolive (India) Limited regarding its investments as illustrated in this chapter. Analyse the case and attempt the following requirements:
1. Examine the investment valuation policy of the company. Is it in accordance with the requirements of AS-13? Why or why not?
2. What are the virtues of investing in the Government of India securities? Explain.
3. Investments in wholly owned subsidiaries have been disclosed at cost. How would you know how these subsidiaries are doing and how would you assess the impact of their working on the financials of Colgate Palmolive?
4. The company has long-term ‘listed but unquoted’ investments. What do you understand by ‘listed but unquoted’? Does it mean that they were never quoted or not quoted in the recent past and that is why the company could not work out their market value?
How will you find out this information?
5. Has the company made the disclosures in accordance with AS-13? Why or why not?