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Notes to Accounts of Gillette India Ltd.

Jun 30, 2023

The Company has used a practical expedient by computing the expected credit Loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix.

The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

There are no debts due by Directors or other Officers of the Company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any Director is a Partner or a Director or a Member.

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefits obligation. This Reserve can be utilised in accordance with the provisions of the Act.

In December 2022, final dividend of '' 36 per share (total dividend '' 11 731 lakhs) for the year ended June 30, 2022 was paid to holders of fully paid equity shares. In December 2021, the final dividend paid was '' 36 per share (total dividend including tax thereon '' 11 731 lakhs) for the year ended June 30, 2021.

In February 2023, an interim dividend of '' 35 per share (total dividend '' 11 405 lakhs) was paid to holders of fully paid equity shares.

In February 2022, an interim dividend of '' 33 per share (total dividend including tax thereon '' 10 753 lakhs) was paid to holders of fully paid equity shares.

The Company had in earlier years filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing/repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order on April 24, 2008 in favour of the Company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal on October 31, 2009 with the Hon''ble Supreme Court of India against the said order of the High Court. The Company has, as a matter of prudence, created a Contingency Reserve of '' 12 900 lakhs by way of appropriation of profits to the extent of excise duty payable (net of Cenvat credit) on dispatches made from the Baddi plant. This Reserve will be reviewed as and when this litigation is finally decided. The appropriation has been made till March 9, 2017, being the last date of excise exemption.

28 Segment information28.1 Products from which reportable segments derive their revenues

Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the types of goods delivered. The directors of the Company have chosen to organise the Company around differences in products. No operating segments have been aggregated in arriving at the reportable segments of the Company.

Specifically, the Company''s reportable segments under Ind AS 108 - Operating Segments are as follows:

- The grooming segment, produces and sells shaving system and cartridges, blades, toiletries and components.

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year (2021-2022: Nil).

The accounting policies of the reportable segments are the same as the Company''s accounting policies described in note 2.3(o). Segment profit represents the profit before tax earned by each segment without allocation of unallocated corporate expenses net of unallocated income, other income as well as finance costs. This is the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

a) ALL assets are aLLocated to reportabLe segments other than Loans, other financial assets and income and deferred tax assets. Assets used jointLy by reportabLe segments are aLLocated on the basis of the revenues earned by individual reportabLe segments; and

b) ALL Liabilities are aLLocated to reportabLe segments other than other financial Liabilities and current tax Liabilities. Liabilities for which reportabLe segments are jointLy Liable are aLLocated in proportion to the segment cost ratio.

30 Employee benefit plans30.1 Defined contribution plans

The Company operates defined contribution superannuation fund and employees'' state insurance plan for all qualifying employees of the Company. Where employees leave the plan, the contributions payable by the Company is reduced by the amount of forfeited contributions.

The employees of the Company are members of a state-managed employer''s contribution to employees'' state insurance plan and superannuation fund which is administered by the Life Insurance Corporation of India. The Company is required to contribute a specific percentage of payroll costs to the contribution schemes to fund the benefit. The only obligation of the Company with respect to the contribution plan is to make the specified contributions.

The total expense recognised in the statement of profit and loss of '' 62 lakhs (for the year ended June 30, 2022: '' 62 lakhs) for superannuation fund represent contributions payable to these plans by the Company at rates specified in the rules of the plans. As at June 30, 2023, contributions of '' 5 lakhs (as at June 30, 2022: '' 5 lakhs) due in respect of 2022-2023 (2021-2022) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the reporting periods.

30.2 Defined benefit plans and other long term employee benefits plan a) Gratuity Plan (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Companyâs defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered trust, which is administered through trustees and / or Life Insurance Corporation of India, where one of the group company is also the participant. The gratuity plan is governed by the Payment of Gratuity Act, 1972 and Company Policy. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service, designation and salary at retirement age.

b) Provident Fund (Funded)

Provident Fund for all permanent employees is administered through a trust. The provident fund is administered by trustees of an independently constituted common trust recognised by the Income Tax authorities where one of the group company is also a participant. Periodic contributions to the fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

c) Post Retirement Medical Benefit (PRMB) (Unfunded)

The Company provides certain post-employment medical benefits to employees. Under the scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

d) Compensated absences for Plant technicians (Unfunded)

The Company also provides for compensated absences for plant technicians which allows for encashment of leave on termination / retirement of service or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / availment. The Company makes provision for compensated absences based on an actuarial valuation carried out at the end of the year.

In respect of the plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at June 30, 2023. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Significant actuarial assumptions in the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

Gratuity Plan (Funded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 383 lakhs (increase by '' 412 lakhs) (as at June 30, 2022: decrease by '' 329 lakhs (increase by '' 354 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 397 lakhs (decrease by '' 374 lakhs) (as at June 30, 2022: increase by '' 344 lakhs (decrease by '' 324 lakhs)).

Compensated absence plan (Unfunded)

If the discount rate is 50 basis points higher (lower), the other benefit obligation would decrease by '' 42 lakhs (increase by '' 46 lakhs) (as at June 30, 2022: decrease by '' 38 lakhs (increase by '' 42 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the other benefit obligation would increase by '' 44 lakhs (decrease by '' 41 lakhs) (as at June 30, 2022: increase by '' 41 lakhs (decrease by '' 38 lakhs)).

Post retirement medical benefit (PRMB) (Unfunded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 7 lakhs (increase by '' 8 lakhs) (as at June 30, 2022: decrease by '' 6 lakhs (increase by '' 7 lakhs)).

If the expected medical inflation rate increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 7 lakhs (decrease by '' 6 lakhs) (as at June 30, 2022: increase by '' 6 lakhs (decrease by '' 6 lakhs)).

If the expected life expectancy increases (decreases) by 1 year, the defined benefit obligation would increase by '' 3 lakhs (decrease by '' 3 lakhs) (as at June 30, 2022: increase by '' 2 lakhs (decrease by '' 2 lakhs)).

The sensitivity analysis presented above may not be representative of the actual change of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method as the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The Provident Fund assets and Liabilities are managed by "Gillette Employees Provident Fund Trust" in Line with The Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952.

The plan guarantees minimum interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of the services by the employee. In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumptions provided below, there is no shortfall as at June 30, 2023.

The Company''s contribution to Provident Fund '' 940 Lakhs (Previous Year: '' 849 Lakhs) has been recognised in the statement of profit and loss under the head employee benefits expense (refer note 24).

31 Financial instruments 31.1 Capital management

The Company manages its capital to ensure that it will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. Equity share capital and other equity are considered for the purpose of group''s capital management.

The Company is not subject to any externally imposed capital requirements.

The Company''s risk management committee manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares.

The Companyâs overall policy with respect to managing risks associated with financial instruments is to minimise potential adverse effects of financial performance of the Company. The policies for managing specific risks are summarised below.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs Length transactions.

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The Company has not recorded any impairment of receivables relating to amounts owed by related parties in the current year or prior years. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

36 Contingent liabilities
	Year ended June 30, 2023 '' in lakhs	Year ended June 30, 2022 '' in lakhs
Claims against company not acknowledged as debts:
(a) Income tax matters	78 549	72 301
(b) Sales tax matters
(i) Non submission of "C" Forms/"F" Forms	1 891	1 903
(ii) Other sales tax matters	558	565
(c) Excise duty, service tax and customs duty matters
(i) Denial of excise duty benefits at excise exempt location of which the Company has a right to claim Cenvat credit of '' 16 034 lakhs	30 368	30 320
(ii) Denial of Cenvat credit	â	29
(iii) Service tax matters	3 235	3 235
(iv) Customs valuation disputes	1 534	1 528
(v) Other excise, service tax and customs matters	â	25
(d) Good & Service tax (GST) matters
(i) Related to Tran 1, 2	674	â
(ii) ITC Mismatch	201	â
(d) Other matters
(i) Other claims - The Company is a party to various legal proceedings in the normal course of business.	78	124
(ii) Demand from delhi development authority	3 424	3 424
	1 20 512	1 13 454

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

38 (a) Reimbursement/(Recovery) of expenses cross charged to related parties include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited. (refer note 39).

38 (b) Certain expenses in the nature of employee costs, relocation costs and other expenses are cross

charged by the Company to its fellow subsidiaries at actual. Similar expenses incurred by fellow subsidiaries are cross charged to the Company at actual.

39 (a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of '' 213 lakhs (Previous year: '' 358 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited in terms of common services agreement referred to in note 38 (a) above.

39 (b) Commission to Non-Executive Directors

During the current year, an aggregate amount of '' 80 lakhs (Previous Year: '' 75 lakhs) has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable to such directors under Schedule V to the Companies Act, 2013.

Proposed Dividend:

The Board of Directors at its meeting held on August 29, 2023 have recommended a payment of final dividend of '' 50 per equity share of face value of '' 10 each for the financial year ended June 30, 2023 resulting in a dividend payout of '' 16 293 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

43 During FY 2021, National Anti Profiteeting Authority (NAA) passed an order alleging that the Company has profiteered to the tune of '' 5 799 lakhs (excluding interest) and had directed the Company to deposit the said amount along with interest @18% into the Consumer Welfare Funds. The Company filed an appeal before Honâble Delhi High Court against the said order of NAA and the Honâble High Court has passed a âstatus quoâ order in favour of the Company, effectively staying the operation of the NAA order. The matter is currently pending before the Honâble Delhi High Court.

44 As per the MCA notification dated August 5, 2022, and the Companies (Accounts) Fourth Amendment Rules, 2022, the Company is required to maintain backups of books of account on servers physically located in India on a daily basis. The Company has maintained periodic backups of its books of account and other relevant books and papers maintained in electronic mode on servers physically located in India. This is in addition to regular backups on the group''s global servers outside India. The Company has identified compliant technical solution(s) and is in process of implementing the same to perform daily backups to comply with the requirements of the above-mentioned Rules.

45 Approval of financial statements

The financial statements were approved for issue by the Board of Directors on August 29, 2023.

Jun 30, 2022

Notes:

(a) Non-current Loan to related parties includes Loan to key managerial personnel '' 324 Lakhs (June 30, 2021: '' Nil).

(b) Current loan to related parties includes loan to key managerial personnel '' 39 lakhs (June 30, 2021: '' Nil).

(c) Loans given to employees / key managerial personnel as per the Companyâs policy are not considered for the purposes of disclosure under Section 186 (4) of the Act.

(d) There are no loans or advances in the nature of loans granted to Promoters, Directors, KMPs and their related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are:

(i) repayable on demand; or

(ii) without specifying any terms or period of repayment

(a) The cost of inventories recognised as an expense during the year is disclosed in note 22, 23 and 26.

(b) The cost of inventories recognised as an expense includes '' Nil (during 2020-2021: '' Nil) in respect of write-downs of inventory to net realisable value. There has been no reversal of such write down in current and previous years.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix.

The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The Company has only one class of equity shares having par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

No shares are bought back by the Company during the period of 5 years immediately preceding the Balance Sheet date.

No shares are alloted as fully paid up by way of bonus shares during the period of 5 years immediately preceeding the Balance Sheet date.

No shares are reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment.

No shares are alloted as fully paid up pursuant to contracts without being payment received in cash during the period of 5 years immediately preceeding the Balance Sheet date.

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefits obligation. This Reserve can be utilised in accordance with the provisions of the Act.

In December 2021, final dividend of '' 36 per share (total dividend '' 11 731 lakhs) for the year ended June 30, 2021 was paid to holders of fully paid equity shares. In December 2020, the final dividend paid was '' 49 per share (total dividend including tax thereon '' 15 966 lakhs) for the year ended June 30, 2020 .

In February 2022, an interim dividend of '' 33 per share (total dividend '' 10 753 lakhs) was paid to holders of fully paid equity shares.

In February 2021, an interim dividend of '' 33 per share (total dividend including tax thereon '' 10 753 lakhs) was paid to holders of fully paid equity shares.

In May 2021, an interim dividend of '' 50 per share (total dividend including tax thereon '' 16 293 lakhs) was paid to holders of fully paid equity shares.

The Company had in earlier years filed a writ petition in the High Court of Himachal Pradesh at ShimLa challenging the premature withdrawal of Excise duty exemption for packing/repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order on April 24, 2008 in favour of the Company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal on October 31, 2009 with the Hon''ble Supreme Court of India against the said order of the High Court. The Company has, as a matter of prudence, created a Contingency Reserve of '' 12 900 lakhs by way of appropriation of profits to the extent of excise duty payable (net of Cenvat credit) on dispatches made from the Baddi plant. This Reserve will be reviewed as and when this litigation is finally decided. The appropriation has been made till March 9, 2017, being the last date of excise exemption.

28 Segment information28.1 Products from which reportable segments derive their revenues

Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the types of goods delivered. The Directors of the Company have chosen to organise the Company around differences in products. No operating segments have been aggregated in arriving at the reportable segments of the Company.

Specifically, the Company''s reportable segments under Ind AS 108 - Operating Segments are as follows:

- The grooming segment, produces and sells shaving system and cartridges, blades, toiletries and components.

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year (2020-2021: Nil).

30 Employee benefit plans30.1 Defined contribution plans

The total expense recognised in the statement of profit and loss of '' 62 lakhs (for the year ended June 30, 2021: '' 58 lakhs) for superannuation fund represent contributions payable to these plans by the Company at rates specified in the rules of the plans. As at June 30, 2022, contributions of '' 5 lakhs (as at June 30, 2021: '' 5 lakhs) due in respect of 2021-2022 (2020-2021) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the reporting periods.

30.2 Defined benefit plans

a) Gratuity Plan (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Companyâs defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered trust, which is administered through trustees and / or Life Insurance Corporation of India, where one of the group company is also the participant. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age.

b) Provident Fund (Funded)

c) Post Retirement Medical Benefit (PRMB) (Unfunded)

d) Compensated absences for Plant technicians (Unfunded)

These plans typically expose the Company to actuarial risks such as: Investment risk, interest rate risk, longevity risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality rate of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plans liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to

the future salaries of plan participants. As such, an increase on the salary of plan participants will increase the plans liability.

In respect of the plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at June 30, 2022. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Significant actuarial assumptions of the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

Gratuity Plan (Funded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 329 lakhs (increase by '' 354 lakhs) (as at June 30, 2021: decrease by '' 341 lakhs (increase by '' 368 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 344 lakhs (decrease by '' 324 lakhs) (as at June 30, 2021: increase by '' 389 lakhs (decrease by '' 327 lakhs)).

Compensated absence plan (Unfunded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 38 lakhs (increase by '' 42 lakhs) (as at June 30, 2021: decrease by '' 44 lakhs (increase by '' 49 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 41 lakhs (decrease by '' 38 lakhs) (as at June 30, 2021: increase by '' 46 lakhs (decrease by '' 43 lakhs)).

Post retirement medical benefit (PRMB) (Unfunded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 6 lakhs (increase by '' 7 lakhs) (as at June 30, 2021: decrease by '' 7 lakhs (increase by '' 7 lakhs)).

If the expected medical inflation rate increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 6 lakhs (decrease by '' 6 lakhs) (as at June 30, 2021: increase by '' 6 lakhs (decrease by '' 6 lakhs)).

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The Provident Fund assets and Liabilities are managed by "Gillette India Limited Provident Fund" in Line with The Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952.

The Company''s contribution to Provident Fund '' 849 Lakhs (Previous Year: '' 780 Lakhs) has been recognised in the statement of profit and loss under the head employee benefits expense (refer note 24).

31 Financial instruments 31.1 Capital management

The Company is not subject to any externally imposed capital requirements.

31.4.1 Foreign currency sensitivity analysis

The Company is mainly exposed to the currencies stated above.

The following table details impact to profit or loss of the Company by sensitivity analysis of a 10% increase and decrease in the respective currencies against the functional currency of the Company. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible changes in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change on foreign currency rates.

31.5 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company performs ongoing credit evaluation of the counterpartyâs financial position as a means of mitigating the risk of financial loss arising from defaults. The Company only grants credit to creditworthy counterparties.

The Company does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics as disclosed in Note 9 to the financial statements.

31.6 Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company does not have interest bearing borrowings, it is not exposed to risk of changes in market interest rates. The Company has not used any interest rate derivatives.

31.7 Other price risk management

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. The Company is not exposed to pricing risk as the Company does not have any investments in equity instruments and bonds.

31.8 Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. The Company maintains adequate highly liquid assets in the form of cash to ensure necessary liquidity.

31.9 Fair value measurements

The carrying amount of financial assets and financial Liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

32 Share-based payments

a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had a âGlobal Employee Stock Ownership Planâ (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC. Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (upto 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee''s contribution (restricted to 2.5% of gross salary). Such contribution is charged under employee benefits expense. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till September 30 2005) / The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 3305.18 shares (Previous year: 3117.14 shares) excluding dividend were purchased by employees at weighted average fair value of '' 11 238.69 (Previous year: '' 9 923.26) per share. The Company''s contribution during the year on such purchase of shares amounts to '' 104 lakhs (Previous year: '' 89 lakhs).

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005) / The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years/5 years and have a 5 years /10 years life cycle.

33 Related party disclosures

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holdings BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs Length transactions.

34 Leasing arrangements

The Company has taken on Lease certain guesthouses, office premises and warehouses with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. The cost of lease for the guesthouses, office premises and warehouses are disclosed under rent expense.

36 Contingent liabilities
	Year ended June 30, 2022 '' in lakhs	Year ended June 30, 2021 '' in lakhs
Claims against company not acknowledged as debts:
(a) Income tax matters	72 301	52 651
(b) Sales tax matters
(i) Non submission of "C" Forms/"F" Forms	1 903	1 935
(ii) Other sales tax matters	565	640
(c) Excise duty, service tax and customs duty matters
(i) Denial of excise duty benefits at excise exempt location of which the Company has a right to claim Cenvat credit of '' 16 034 lakhs	30 320	30 320
(ii) Denial of Cenvat credit	29	29
(iii) Service tax matters	3 235	3 235
(iv) Customs valuation disputes	1 528	1 528
(v) Other excise, service tax and customs matters	25	25
(d) Other matters
(i) Other claims - The Company is a party to various legal proceedings in the normal course of business.	124	126
(ii) Demand from Delhi Development Authority	3 424	3 424
	1 13 454	93 913
37 Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006
	Year ended June 30, 2022 '' in lakhs	Year ended June 30, 2021 '' in lakhs
(a) Principal amount remaining unpaid to any supplier as at the end of the accounting year	2 358	1 148
(b) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year	822	688
(c) The amount of interest paid along with the amounts of the payment made to the supplier beyond the appointed day	5 570	4 782
Principal paid beyond the appointed date	5 570	4 782
Interest paid in terms of Section 16 of the Act	â	â
(d) The amount of interest due and payable for the year	134	134
(e) The amount of interest accrued and remaining unpaid at the end of the accounting year	822	688
(f) The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid	6	9
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

38 (b) Certain expenses in the nature of employee costs, relocation costs and other expenses are cross

charged by the Company to its fellow subsidiaries at actual. Similar expenses incurred by fellow subsidiaries are cross charged to the Company at actual.

39 (a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of '' 358 lakhs (Previous year: '' 141 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited in terms of common services agreement referred to in note 38 (a) above.

39 (b) Commission to Non-Executive Directors

During the current year, an aggregate amount of '' 75 lakhs (Previous Year: '' 81 lakhs) has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable to such directors under Schedule V to the Companies Act, 2013.

Proposed Dividend:

The Board of Directors at its meeting held on August 22, 2022 have recommended a payment of final dividend of '' 36 per equity share of face value of '' 10 each for the financial year ended June 30, 2022 resulting in a dividend payout of '' 11 731 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

Jun 30, 2021

No shares are bought back by the Company during the period of 5 years immediately preceding the Balance Sheet date.

No shares are alloted as fully paid up by way of bonus shares during the period of 5 years immediately preceeding the Balance Sheet date.

No shares are reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment.

No shares are alloted as fully paid up pursuant to contracts without being payment received in cash during the period of 5 years immediately preceeding the Balance Sheet date.

27 Segment information27.1 Products from which reportable segments derive their revenues

Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the types of goods delivered. The Directors of the Company have chosen to organise the Company around differences in products. No operating segments have been aggregated in arriving at the reportable segments of the Company.

Specifically, the Company''s reportable segments under Ind AS 108 are as follows:

- The grooming segment, produces and sells shaving system and cartridges, blades, toiletries and components.

29 Employee benefit plans29.1 Defined contribution plans

The total expense recognised in the statement of profit and loss of '' 58 lakhs (for the year ended June 30, 2020: '' 55 lakhs) for superannuation fund represent contributions payable to these plans by the Company at rates specified in the rules of the plans. As at June 30, 2021, contributions of '' 5 lakhs (as at June 30, 2020: '' 5 lakhs) due in respect of 2020-2021 (2019-2020) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the reporting periods.

29.2 Defined benefit plans

a) Gratuity Plan (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Companyâs defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered trust, which is administered through trustees and / or Life Insurance Corporation of India, where one of the group company is also the participant. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age.

b) Provident Fund (Funded)

c) Post Retirement Medical Benefit (PRMB) (Unfunded)

d) Compensated absences for Plant technicians (Unfunded)

These plans typically expose the Company to actuarial risks such as: Investment risk, interest rate risk, longevity risk and salary risk.

Investment risk	The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
Interest risk	A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan investments.
Longevity risk	The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality rate of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plans liability.
Salary risk	The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase on the salary of plan participants will increase the plans liability.

In respect of the plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at June 30, 2021. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Gratuity Plan (Funded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 341 lakhs (increase by '' 368 lakhs) (as at June 30, 2020: decrease by '' 367 lakhs (increase by '' 400 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 349 lakhs (decrease by '' 327 lakhs) (as at June 30, 2020: increase by '' 384 lakhs (decrease by '' 357 lakhs)).

Compensated absence plan (Unfunded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 44 lakhs (increase by '' 49 lakhs) (as at June 30, 2020: decrease by '' 34 lakhs (increase by '' 37 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 46 lakhs (decrease by '' 43 lakhs) (as at June 30, 2020: increase by '' 36 lakhs (decrease by '' 33 lakhs)).

Post retirement medical benefit (PRMB) (Unfunded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by '' 7 lakhs (increase by '' 7 lakhs) (as at June 30, 2020: decrease by '' 6 lakhs (increase by '' 7 lakhs)).

If the expected medical inflation rate increases (decreases) by 0.5%, the defined benefit obligation would increase by '' 6 lakhs (decrease by '' 6 lakhs) (as at June 30, 2020: increase by '' 6 lakhs (decrease by '' 6 lakhs)).

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

29.3 Provident Fund

The Provident Fund assets and Liabilities are managed by "Gillette India Limited Provident Fund" in Line with The Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952.

The Company''s contribution to Provident Fund '' 780 Lakhs (Previous Year: '' 725 Lakhs) has been recognised in the statement of profit and loss under the head employee benefits expense (refer note 23).

30 Financial instruments 30.1 Capital management

The Company is not subject to any externally imposed capital requirements.

The Company is mainly exposed to the currencies stated above.

their translation at the period end for a 10% change on foreign currency rates

30.5 Credit risk management

30.6 Interest rate risk management

30.7 Other price risk management

30.9 Fair value measurements

31 Share-based payments

a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company)

The shares of TGC (till September 30 2005) / The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 3117.14 shares (Previous year: 2827.97 shares) excluding dividend were purchased by employees at weighted average fair value of '' 9 923.26 (Previous year: '' 8 666.41) per share. The Company''s contribution during the year on such purchase of shares amounts to '' 89 lakhs (Previous year: '' 73 lakhs).

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

37 (a) Reimbursement/(Recovery) of expenses cross charged to related parties include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited. (refer note 38).

37 (b) Certain expenses in the nature of employee costs, relocation costs and other expenses are cross

charged by the Company to its fellow subsidiaries at actual. Similar expenses incurred by fellow subsidiaries are cross charged to the Company at actual.

38 (a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of '' 141 lakhs (Previous year: '' 123 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited in terms of common services agreement referred to in note 37 (a) above.

38 (b) Commission to Non-Executive Directors

During the current year, an aggregate amount of '' 81 lakhs (Previous Year: '' 98 lakhs) has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable to such directors under Schedule V to the Companies Act, 2013.

The Board of Directors at its meeting held on August 24, 2021 have recommended a payment of final dividend of '' 36 per equity share of face value of '' 10 each for the financial year ended June 30, 2021 resulting in a dividend payout of '' 11 731 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

40 During the current year, National Anti Profiteering Authority (NAA) passed an order alleging that the Company

has profiteered to the tune of '' 5 799 lakhs (excluding interest) and had directed the Company to deposit the said amount along with interest @18% into the Consumer Welfare Funds. The Company filed an appeal before Honâble Delhi High Court against the said order of NAA and the Honâble High Court has passed a âstatus quoâ order in favour of the Company, effectively staying the operation of the NAA order.

41 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

42 Approval of financial statements

The financial statements were approved for issue by the Board of Directors on August 24, 2021.

Jun 30, 2018

1. Corporate information

Gillette India Limited (âthe Companyâ) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956. Its ordinary shares (Equity) are listed on two recognised stock exchanges in India. The registered office of the Company is located at P&G Plaza, Cardinal Gracias Road, Chakala, Andheri (E), Mumbai - 400099.

The Company is engaged in manufacturing and selling of branded packaged fast moving consumer goods in the grooming and oral care businesses. The Companyâs products are sold through retail operations including mass merchandisers, grocery stores, membership club stores, drug stores, department stores and high frequency stores. The Company has its manufacturing locations at Bhiwadi in Rajasthan and Baddi in Himachal Pradesh, apart from third party manufacturing locations spread across India.

2. Significant accounting policies

2.1 Statement of compliance

The financial statements of the Company have been prepared in accordance with Indian Accounting Standard (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under section 133 of the Companies Act, 2013 (âthe Actâ) and other relevant provisions of the Act.

2.2 Basis of preparation and presentation

The financial statements have been prepared on the historical cost basis except for certain items that are measured at fair values at the end of the reporting period, as explained in accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurement that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2.

In addition, for the financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

3. Critical accounting judgments and key sources of estimation uncertainty

3.1 Critical judgments in applying accounting policies

I n the application of the Companyâs accounting policies, which are described in note 2, the directors of the Company are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods of the revision affects both current and future periods.

3.2 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

a. useful lives of property, plant and equipment

As described at 2.3 (h) above, the Company reviews the estimated useful lives of property, plant and equipment at the end of each reporting period.

b. Fair value measurements and valuation processes

Some of the Companyâs assets and liabilities are measured at fair value for financial reporting purposes. The management of the Company determines appropriate valuation techniques and inputs for fair value measurements.

i n estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. The management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities is disclosed in note 30.

c. defined benefit obligation

The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 âEmployee benefitsâ over the period during which benefit is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in note 23, âEmployee benefits expenseâ.

d. Income taxes

The Companyâs tax jurisdiction is India. Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid / recovered for uncertain tax positions (refer note 26).

The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

(a) The cost of inventories recognised as an expense during the year is disclosed in note 21, 22 and 25.

(b) The cost of inventories recognised as an expense includes â Nil lakhs (during 2016-2017: Rs.542 lakhs) in respect of write-downs of inventory to net realisable value. There has been no reversal of such write down in current and previous years.

4(a). Cash and cash equivalents

For the purpose of the Statement of Cash Flows, cash and cash equivalents include cash in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting year as shown in the Statement of Cash Flows can be reconciled to the related items in the Balance Sheet as follows:

The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

No shares are bought back by the Company during the period of 5 years immediately preceding the Balance Sheet date.

No shares are alloted as fully paid up by way of bonus shares during the period of 5 years immediately preceeding the Balance Sheet date.

No shares are reserved for issue under options and contracts / commitments for the sale of shares / disinvestment.

No shares are alloted as fully paid up pursuant to contracts without being payment received in cash during the period of 5 years immediately preceeding the Balance Sheet date.

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the Statement of Profit and Loss.

The above reserve relates to share options granted by the Ultimate Holding Company to specific employees of its subsidiaries under its employee stock option plan. Further information about share-based payments to employees is set out in note 31.

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefits obligation. This Reserve can be utilised in accordance with the provisions of the Act.

In November 2017, dividend of Rs.10 per share (total dividend including tax thereon Rs.3 923 lakhs) was paid to holders of fully paid equity shares. In December 2016, the final dividend paid was Rs.20 per share (total dividend including tax thereon Rs.7 844 lakhs).

In June 2017, an interim dividend of Rs.154 per share (total dividend including tax thereon Rs.60 398 lakhs) was paid to holders of fully paid equity shares.

The above reserve represents the difference between value of the net assets transferred to the Company in the course of business combinations / amalgamations and the consideration paid for such combinations / amalgamations and capital grant received from its erstwhile parent.

The Company had in earlier years filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing / repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order on April 24, 2008 in favour of the Company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal on October 31, 2009 with the Honâble Supreme Court of India against the said order of the High Court. The Company has, as a matter of prudence, created a Contingency Reserve of Rs.12 900 lakhs (Previous Year: Rs.12 900 lakhs) by way of appropriation of profits to the extent of excise duty payable (net of Cenvat credit) on dispatches made from the Baddi plant. Accordingly, during the current year, profit of â Nil lakhs (Previous Year: Rs.2 700 lakhs) have been appropriated. This Reserve will be reviewed as and when this litigation is finally decided. The appropriation has been made till March 9, 2017, being the last date of excise exemption.

(i) The provision for employee benefits includes gratuity, post retirement medical benefits (PRMB) and compensated absences. The increase / decrease in the carrying amount of the provision for the current year results from benefits being paid in the current year. For other disclosures refer note 29.

(ii) Others provisions was in respect of probable litigation made by the Company for disputes based on its assessment of the amount it estimates to incur/meet such obligation. The same was settled during the previous year.

The tax rate used for 2017-18 is a weighted average of the corporate tax rate of 34.608% applicable till March 31, 2018 and 34.944% applicable from April 1, 2018. The tax rate used for 2016-17 is the corporate tax rate of 34.608% applicable under the Indian laws.

5. Segment information

5.1 Products from which reportable segments derive their revenues

Specifically, the Companyâs reportable segments under Ind AS 108 are as follows:

- The grooming segment, produces and sells shaving system and cartridges, blades, toiletries and components.

- The oral care segment, produces and sells tooth brushes and oral care products.

5.2 Segment revenues and results

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year (2016-2017: Nil lakhs).

The accounting policies of the reportable segments are the same as the Companyâs accounting policies described in note 2.3(o). Segment profit represents the profit before tax earned by each segment without allocation of unallocated corporate expenses net of unallocated income, other income as well as finance costs. This is the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

For the purpose of monitoring segment performance and allocating resources between segments:

a) All assets are allocated to reportable segments other than loans, other financial assets and income and deferred tax assets. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments; and

b) All liabilities are allocated to reportable segments other than other financial liabilities and current tax liabilities. Liabilities for which reportable segments are jointly liable are allocated in proportion to the segment cost ratio.

6.1 Basic and Diluted earnings per share

The earnings and weighted average number of equity shares used in the calculation of basic and diluted earnings per share are as follows:

7. Employee benefit plans

7.1 Defined contribution plans

The Company operates defined contribution superannuation fund and employeesâ state insurance plan for all qualifying employees of the Company. Where employees leave the plan, the contributions payable by the Company is reduced by the amount of forfeited contributions.

The employees of the Company are members of a state-managed employerâs contribution to employeesâ state insurance plan and superannuation fund which is administered by the Life Insurance Corporation of India. The Company is required to contribute a specific percentage of payroll costs to the contribution schemes to fund the benefit. The only obligation of the Company with respect to the contribution plan is to make the specified contributions.

The total expense recognised in the statement of profit and loss of Rs.70 lakhs (for the year ended June 30, 2017: Rs.92 lakhs) for superannuation fund represent contributions payable to these plans by the Company at rates specified in the rules of the plans. As at June 30, 2018, contributions of â Nil lakhs (as at June 30, 2017: Rs.7 lakhs) due in respect of 2017-2018 (2016-2017) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the reporting periods.

7.2 Defined benefit plans

a) Gratuity Plan (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Companyâs defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered trust, which is administered through trustees and / or Life Insurance Corporation of India, where one of the group company is also the participant. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age.

b) Provident Fund (Funded)

c) Post Retirement Medical Benefit (PRMB) (Unfunded)

d) Compensated absences for Plant technicians (Unfunded)

These plans typically expose the Company to actuarial risks such as: Investment risk, interest rate risk, longevity risk and salary risk.

In respect of the plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at June 30, 2018. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Companyâs Plan Assets in respect of Gratuity, alongwith one of the group company, is funded through the group scheme of the Life Insurance Corporation of India.

The actual return on plan assets was Rs.122 lakhs (for the year ended June 30, 2017: Rs.141 lakhs).

Gratuity Plan (Funded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs.203 lakhs (increase by Rs.220 lakhs) (as at June 30, 2017: decrease by Rs.233 lakhs (increase by Rs.253 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by Rs.217 lakhs (decrease by Rs.202 lakhs) (as at June 30, 2017: increase by Rs.247 lakhs (decrease by Rs.230 lakhs)).

Compensated absence plan (Unfunded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs.18 lakhs (increase by Rs.19 lakhs) (as at June 30, 2017: decrease by Rs.21 lakhs (increase by Rs.23 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by Rs.19 lakhs (decrease by Rs.18 lakhs) (as at June 30, 2017: increase by Rs.22 lakhs (decrease by Rs.21 lakhs)).

Post retirement medical benefit (PRMB) (Unfunded)

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs.5 lakhs (increase by Rs.6 lakhs) (as at June 30, 2017: decrease by Rs.10 lakhs (increase by Rs.11 lakhs)).

If the expected medical inflation rate increases (decreases) by 0.5%, the defined benefit obligation would increase by Rs.5 lakhs (decrease by Rs.5 lakhs) (as at June 30, 2017: increase by Rs.10 lakhs (decrease by Rs.9 lakhs)).

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

7.3 Provident Fund

The Provident Fund assets and liabilities are managed by âGillette India Limited Provident Fundâ in line with The Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952.

The Companyâs contribution to Provident Fund Rs.619 lakhs (Previous Year: Rs.602 lakhs) has been recognised in the statement of profit and loss under the head employee benefits expense (refer note 23).

The details of the âGillette India Limited Provident Fundâ and plan assets position as at June 30, 2018 is given below:

8. Financial instruments

8.1 Capital management

The Company is not subject to any externally imposed capital requirements.

The Companyâs risk management committee manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares.

8.2 Financial risk management objectives

8.3 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters.

The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

8.4.1 Foreign currency sensitivity analysis

The Company is mainly exposed to the currencies stated above.

The following table details impact to profit or loss of the Company by sensitivity analysis of a 10% increase and decrease in the respective currencies against the functional currency of the Company. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible changes in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change on foreign currency rates.

8.5 Credit risk management

The Company does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics as disclosed in Note 5 to the financial statements.

8.6 Interest rate risk management

8.7 Other price risk management

8.8 Liquidity risk management

The table below analyse financial liabilities of the Company into relevant maturity groupings based on the reporting period from the reporting date to the contractual maturity date:

8.9 Fair value measurements

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

9. Share-based payments

a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had a âGlobal Employee Stock Ownership Planâ (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC. Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (upto 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employeeâs contribution (restricted to 2.5% of gross salary). Such contribution is charged under employee benefits expense. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till September 30 2005) / The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 3132.44 shares (Previous year: 2525.04 shares) were purchased by employees at weighted average fair value of Rs.5 473.25 (Previous year: Rs.5 205.58) per share. The Companyâs contribution during the year on such purchase of shares amounting to Rs.48 lakhs (Previous year: Rs.42 lakhs) has been charged under employee benefits expense under Note 23.

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

The weighted average share price at the date of exercise of these options was $ 89.52 (June 30, 2017: $ 88.33).

The weighted average remaining contractual life for the share options outstanding as at June 30, 2018 was 5.20 (June 30, 2017: 5.69) years.

The weighted average fair value of options granted during the year was Rs.775 (June 30, 2017: Rs.1 575).

These fair values for share options granted during the year were calculated using binomial lattice-based model. The following tables list the inputs to the models used for the plans for the years ended June 30, 2018 and June 30, 2017, respectively:

10. Related party disclosures

11. Operating lease arrangements Company as a lessee

11.1 Leasing arrangements

The Company has taken on lease guesthouses for accommodation of employees and office premises and warehouses with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements.

12. (a) Reimbursement / (Recovery) of expenses cross charged to related parties include payment / recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited. (refer note 38).

12. (b) Certain expenses in the nature of employee costs, relocation costs and other expenses are cross charged by the Company to its fellow subsidiaries at actual. Similar expenses incurred by fellow subsidiaries are cross charged to the Company at actual.

13. (a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of Rs.197 lakhs (Previous year: Rs.276 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited in terms of common services agreement referred to in note 37 (a) above.

13. (b) Commission to Non-Executive Directors

During the current year, an aggregate amount of Rs.55 lakhs (Previous Year: Rs.55 lakhs) has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable to such directors under Schedule V to the Companies Act, 2013.

Proposed Dividend:

The Board of Directors at its meeting held on August 23, 2018 have recommended a payment of final dividend of Rs.23 per equity share of face value of Rs.10 each for the financial year ended June 30, 2018. The same amounts to Rs.9 035 lakhs including dividend distribution tax of Rs.1 541 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

14. Previous yearâs figures have been regrouped / reclassified wherever necessary to correspond with the current yearâs classification / disclosure.

15. Approval of financial statements

The financial statements were approved for issue by the Board of Directors on August 23, 2018.

Jun 30, 2017

1. Discontinued operations

2016. As a result of such termination, the Company had also received a sum of US $10 million (equivalent to Rs, 6 551 lakhs) [Net of tax Rs, 4 284 lakhs] as discontinuation facilitation payment from Procter & Gamble International SARL, Luxemburg in relation to the discontinuation of the Duracell India business and accounted for Rs, 182 lakhs in the quarter ended September 30, 2015 of the previous year and Rs, 6 369 lakhs in 2014-15. The Duracell batteries business was a reportable segment under Portable Power segment and is consequently treated as a discontinued operations. Being a discontinued operation, that segment is no longer presented in the segment note.

2. Segment information

3. Products from which reportable segments derive their revenues

Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the types of goods delivered. The directors of the Company have chosen to organize the Company around differences in products. No operating segments have been aggregated in arriving at the reportable segments of the Company.

Specifically, the Company''s reportable segments under Ind AS 108 are as follows:

- The grooming segment, produces and sells shaving system and cartridges, blades, toiletries and components.

- The oral care segment, produces and sells tooth brushes, toothpaste and oral care products.

The portable power segment was discontinued in the previous year. The segment information reported does not include any amounts for these discontinued operations, which are described in note 27.

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year (2015-2016: Nil lakhs).

For the purpose of monitoring segment performance and allocating resources between segments:

a) all assets are allocated to reportable segments other than loans, other financial assets and income and deferred tax assets. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments; and

b) all liabilities are allocated to reportable segments other than other financial liabilities and current tax liabilities. Liabilities for which reportable segments are jointly liable are allocated in proportion to the segment cost ratio.

4. Employee benefit plans

5. Defined contribution plans

The total expense recognized in the statement of profit and loss of Rs, 92 lakhs (for the year ended June 30, 2016: Rs, 98 lakhs) for superannuation fund represent contributions payable to these plans by the Company at rates specified in the rules of the plans. As at June 30, 2017, contributions of Rs, 7 lakhs (as at June 30, 2016: Rs, 17 lakhs) due in respect of 2016-2017 (2015-2016) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the reporting periods.

30.2 Defined benefit plans

a) Gratuity Plan (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered trust, which is administered through trustees and / or Life Insurance Corporation of India, where one of the group company is also the participant. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age.

b) Provident Fund (Funded)

Provident Fund for all permanent employees is administered through a trust. The provident fund is administered by trustees of an independently constituted common trust recognized by the Income Tax authorities where one of the group company is also a participant. Periodic contributions to the fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

c) Post Retirement Medical Benefit (PRMB) (Unfunded)

d) Compensated absences for Plant technicians (Unfunded)

The Company also provides for compensated absences for plant technicians which allows for encashment of leave on termination / retirement of service or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / a ailment. The Company makes provision for compensated absences based on an actuarial valuation carried out at the end of the year.

These plans typically expose the Company to actuarial risks such as: Investment risk, interest rate risk, longevity risk and salary risk.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best

estimate of the mortality rate of plan participants both during and after their employment.

_An increase in the life expectancy of the plan participants will increase the plans liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase on the salary of plan participants _will increase the plans liability._

In respect of the plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at June 30, 2017. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Company''s Plan Assets in respect of Gratuity, alongwith one of the group company, is funded through the group scheme of the Life Insurance Corporation of India.

The actual return on plan assets was Rs, 141 lakhs (for the year ended June 30, 2016: Rs, 194 lakhs).

Gratuity Plan (Funded)

I f the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs, 233 lakhs (increase by Rs, 253 lakhs) (as at June 30, 2016: decrease by Rs, 159 lakhs (increase by Rs, 171 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by Rs, 247 lakhs (decrease by Rs, 230 lakhs) (as at June 30, 2016: increase by Rs, 170 lakhs (decrease by Rs, 159 lakhs)).

Compensated absence plan (Unfunded)

I f the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs, 21 lakhs (increase by Rs, 23 lakhs) (as at June 30, 2016: decrease by Rs, 13 lakhs (increase by Rs, 15 lakhs)).

If the expected salary growth increases (decreases) by 0.5%, the defined benefit obligation would increase by Rs, 22 lakhs (decrease by Rs, 21 lakhs) (as at June 30, 2016: increase by Rs, 15 lakhs (decrease by Rs, 13 lakhs)).

Post retirement medical benefit (PRMB) (Unfunded)

I f the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs, 10 lakhs (increase by Rs, 11 lakhs) (as at June 30, 2016: decrease by Rs, 8 lakhs (increase by Rs, 10 lakhs)).

If the expected medical inflation rate increases (decreases) by 0.5%, the defined benefit obligation would increase by Rs, 10 lakhs (decrease by Rs, 9 lakhs) (as at June 30, 2016: increase by Rs, 8 lakhs (decrease by Rs, 7 lakhs)).

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

6. Provident Fund

The Provident Fund assets and liabilities are managed by "Gillette India Limited Provident Fund" in line with The Employees'' Provident Fund and Miscellaneous Provisions Act, 1952.

The Company''s contribution to Provident Fund Rs, 602 lakhs (Previous Year: Rs, 570 lakhs) has been recognized in the statement of profit and loss under the head employee benefits expense (refer note 23).

7. Financial instruments

8. Capital management

The Company manages its capital to ensure that it will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the equity balance.

The Company is not subject to any externally imposed capital requirements.

9. Foreign currency sensitivity analysis

The Company is mainly exposed to the currencies stated above.

10. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company performs ongoing credit evaluation of the counterparty''s financial position as a means of mitigating the risk of financial loss arising from defaults. The Company only grants credit to creditworthy counterparties.

11. Interest rate risk management

I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company does not have interest bearing borrowings, it is not exposed to risk of changes in market interest rates. The Company has not used any interest rate derivatives.

12. Other price risk management

13 Liquidity risk management

14. Fair value measurements

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

15. Share-based payments

a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had a "Global Employee Stock Ownership Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC. Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (up to 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee''s contribution (restricted to 2.5% of gross salary). Such contribution is charged under employee benefits expense. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till September 30 2005) / The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 2525.04 shares (Previous year: 2570.97 shares) were purchased by employees at weighted average fair value of Rs, 5 205.58 (Previous year: Rs, 5 211.99) per share. The Company''s contribution during the year on such purchase of shares amounting to Rs, 42 lakhs (Previous year: Rs, 37 lakhs) has been charged under employee benefits expense under Note 23.

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005) / The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years/5 years and have a 5 years / 10 years life cycle.

The weighted average share price at the date of exercise of these options was $ 88.33 (June 30, 2016: $ 82.08).

The weighted average remaining contractual life for the share options outstanding as at June 30, 2017 was 5.69 years (June 30, 2016: 5.90 years).

The weighted average fair value of options granted during the year was Rs, 1 575 (June 30, 2016: Rs, 1 517).

16.. Related party disclosures

(a) Related party where control exists:

Relationship__Name of the Company_

Ultimate Holding Company__The Procter & Gamble Company, USA_

Holding Company Procter & Gamble India Holdings B.V., Netherlands (upto March 30, 2017) __Procter & Gamble Overseas India BV, The Netherlands (w.e.f. March 31, 2017)

Procter & Gamble India Holdings B.V., Netherlands has been merged into Procter & Gamble Overseas India BV, The Netherlands with effect from March 31, 2017.

(b) Other parties with whom transactions have taken place during the year.

(i) Fellow Subsidiaries

S. No. Name of the Company__S. No. Name of the Company_

1. The Procter & Gamble Distributing LLC 19. Closed Joint Stock Company Petersburg

Products International Zao St.Petersburg

2. The Procter & Gamble US Business Services 20. Procter & Gamble Indochina Company Company Limited

3. The Gillette Company LLC (w.e.f. July 15, 21. Procter & Gamble Europe SA 2016)

4. Procter & Gamble Do Brasil S/A 22. Procter & Gamble Middle East FZE

5. Wella India Haircosmetics Pvt. Ltd 23. Procter & Gamble International Operations

Sa-Rohq

6. Procter & Gamble (China) Sales Co., Ltd. 24. Procter & Gamble Gulf FZE

7. Nexus Mercantile (India) Pvt Ltd 25. Procter & Gamble International Operations

8. Mining Consultants (India) Private Limited 26. Procter & Gamble International Operations

SA Singapore Branch

9. Gillette Products Private Limited 27. Procter & Gamble International Sarl,

Luxembourg

10. Gillette (Shanghai) Ltd 28. Gillette Diversified Operations Pvt Ltd

11. Procter & Gamble Hygiene & Health Care 29. Procter & Gamble Japan K.K.

Limited

12. Procter & Gamble Tuketim Mallari Sanayi 30. Procter & Gamble Australia Pty Ltd A.S.

13. Procter & Gamble Nigeria Limited 31. Gillette Poland International Sp. Z

14. Procter & Gamble Home Products Private 32. Procter & Gamble South African Trading Limited (Pty) Ltd

15. Pt Procter & Gamble Home Products 33. Procter & Gamble (Guangzhou) Ltd. Indonesia

16. Procter & Gamble Polska SP.Z O.O 34. The Gillette Company, USA (merged

with The Gillette Company LLC on September 1, 2016)

17. Procter & Gamble Europe SA Singapore 35. Procter & Gamble International Operations Branch S.A. Dubai Branch

18. Procter & Gamble Bangladesh Private

__Limited___

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The Company has not recorded any impairment of receivables relating to amounts owed by related parties in the current year or prior years. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

17. (a) Reimbursement/(Recovery) of expenses cross charged to related parties include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited. (refer note 39).

18. (b) Certain expenses in the nature of employee costs, relocation costs and other expenses are cross charged by the Company to its fellow subsidiaries at actual. Similar expenses incurred by fellow subsidiaries are cross charged to the Company at actual.

19. (a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of Rs, 276 lakhs (Previous year Rs, 198 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited in terms of common services agreement referred to in note 38 (a) above.

20. (b) Commission to Non-Executive Directors

During the current year, an aggregate amount of Rs, 55 lakhs (Previous Year: Rs, 55 lakhs) has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable to such directors under Schedule V to the Companies Act, 2013.

Proposed Dividend:

The Board of Directors at its meeting held on August 24, 2017 have recommended a payment of final dividend of Rs, 10 per equity share of face value of Rs, 10 each for the financial year ended June 30, 2017. The same amounts to Rs, 3 922 lakhs including dividend distribution tax of Rs, 663 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognized as a liability.

For the purpose of this clause, the term "Specified Bank Note" shall have the same meaning provided in the notification of the Government of India, in the Ministry of finance Department of Economic Affairs No. S.O. 3407 (E.), dated the November 8, 2016

21. Approval of financial statements

The financial statements were approved for issue by the Board of Directors on August 24, 2017.

22. Effect of Ind AS adoption on the Statement of Cash Flows for the year ended June 30, 2016

There are no material adjustments to the statement of Cash Flows as reported under the previous GAAP.

Notes to the reconciliations

a. Property, plant and equipment:

In the financial statements prepared under previous GAAP, Leasehold land was disclosed as a part of fixed assets and measured at the total lease payment made at the time of lease agreement and the same was amortized over the period of the lease on a yearly basis. Under Ind AS, the leasehold land is treated as prepaid expenses for lease rentals and the prepayment forms a part of other current and non-current assets. Accordingly, the prepaid expense as at July 1, 2015 is Rs, 776 lakhs, current portion is Rs, 11 lakhs and non current is Rs, 765 lakhs and as at June 30, 2016 is Rs, 765 lakhs, current portion is Rs, 11 lakhs and non current is Rs, 754 lakhs. Additionally the amortisation on leasehold land is treated as rent expense and Rs, 11 lakhs for the year ended June 30, 2016 is transferred from depreciation expense to other expenses.

b. Proposed Dividend:

I n the financial statements prepared under previous GAAP, dividend on equity shares recommended by the Board of Directors after the end of reporting period but before the financial statements were approved for issue, was recognized as a liability in the financial statements in the reporting period relating to which dividend was proposed. Under Ind AS, such dividend is recognized in the reporting period in which the same is approved by the members in a general meeting.

On the date of transition, the above change in accounting treatment of proposed dividend has resulted in increase in Equity with a corresponding decrease in Provisions by Rs, 7 844 lakhs as at June 30, 2016. The above change has also resulted in an increase in Equity with a corresponding decrease in provision by Rs, 5 883 lakhs as at July 1, 2015.

c. Revenue from operations:

I n the financial statements prepared under previous GAAP, revenue from sale of products was presented net of excise duty. However, under Ind AS, revenue from sale of products includes excise duty. Excise duty expense amounting to Rs, 1 914 lakhs is presented separately on the face of the Statement of Profit and Loss for the year ended June 30, 2016.

I n the financial statements prepared under previous GAAP, sales incentive scheme expenses were shown as a part of other expenses. However, under Ind AS, such discounts and sales promotional expenses amounting to Rs, 20 312 lakhs for the year ended June 30, 2016, are reduced from revenue from sale of products.

I n light of the above, revenue from sale of products under Ind AS has decreased by Rs, 18 398 lakhs (Rs, 20 312 lakhs less Rs, 1 914 lakhs) with an corresponding increase in excise duty by Rs, 1 914 lakhs and decrease in other expenses by Rs, 20 312 lakhs in the Statement of Profit and Loss for the year ended June 30, 2016.

The above changes do not affect equity as at date of transition to Ind AS, profit after tax for the year ended June 30, 2016 and Equity as at June 30, 2016.

d. Remeasurement benefit of defined benefit plans:

I n the financial statements prepared under previous GAAP, remeasurement benefit of defined plans, arising primarily due to change in actuarial assumptions was recognized as employee benefits expense in the Statement of Profit and Loss. Under Ind AS, such remeasurement benefits relating to defined benefit plans is recognized in OCI as per the requirements of Ind AS 19 - Employee benefits. Consequently, the related tax effect of the same has also been recognized in OCI.

For the year ended June 30, 2016, remeasurement of gratuity liability and PRMB resulted in a net benefit of Rs, 292 lakhs which has now been removed from employee benefits expense in the Statement of Profit and Loss and recognized separately in OCI.

Under Previous GAAP, the interest cost on defined benefit liability was recognized as employee benefit expenses in the Statement of Profit and Loss. Under Ind AS, the Company has recognized the net interest cost on defined benefit plans amounting to Rs, 94 lakhs for the year ended June 30, 2016 as finance cost.

This has resulted in decrease in employee benefits expense by Rs, 386 lakhs (Rs, 292 lakhs and Rs, 94 lakhs) and gain in OCI by Rs, 292 lakhs and finance cost by Rs, 94 lakhs for the year ended June 30, 2016. Consequently, tax effect of the same amounting to Rs, 101 lakhs is also recognized separately in OCI.

The above changes do not affect Equity as at date of transition to Ind AS and as at June 30, 2016. However, Profit before tax and profit for the year ended June 30, 2016 decreased by Rs, 292 lakhs and Rs, 191 lakhs respectively.

e. Employee stock option plan:

In the financial statement prepared under previous GAAP, the cost of equity-settled employee share-based payments was recognized at the time of exercise of the stock options. Under Ind AS, the cost of equity-settled employee share-based payments is recognized based on the fair value of the options as on the grant date. On transitioning to Ind AS, fair value of partially vested share-based payment plans has been recognized in equity of Rs, 83 lakhs as at July 1, 2015 and Rs, 115 lakhs for the year ended June 30, 2016.

The above change has resulted in decrease in profit after tax for the year ended June 30, 2016 by Rs, 115 lakhs increase in deferred tax asset as at June 30, 2016 by Rs, 39 lakhs and increase in equity as at June 30, 2016 by Rs, 39 lakhs.

Jun 30, 2016

Notes:

(a) Loans and advances given to employees as per the Company''s policy are not considered for the purposes of disclosure under Section 186 (4) of the Companies Act, 2013.

(b) Includes amounts deposited with Excise, Sales Tax and other authorities as demanded, pending resolution of disputes.

(b) Miscellaneous expenses includes expenditure incurred and paid on Corporate Social Responsibility (CSR) under

Section 135 of the Companies Act, 2013 Rs, 330 lakhs (Previous year: Rs, 226 lakhs).

1. (a) Contingent Liabilities:

(i) I n respect of Income Tax demands for which the company has preferred appeals with appropriate authorities

- Rs, 37 640 lakhs (Previous year: Rs, 15 162 lakhs). The contingent liability is in respect of matters related to: Income tax dispute on inventory write-off, allow ability of losses carried forward from merged entities and others.

(ii) I n respect of Sales Tax matters for which the company has preferred appeals with appropriate authorities

- Rs, 1 364 lakhs (Previous year: Rs, 3 182 lakhs). The contingent liability is in respect of matters related to: non submission of "C" Forms / "F" Forms Rs, 733 lakhs (Previous year: Rs, 2 471 lakhs) and others Rs, 631 lakhs (Previous year: Rs, 711 lakhs).

(iii) I n respect of Excise, Service Tax and Customs matters for which the company has preferred appeals with appropriate authorities - Rs, 29 192 lakhs (Previous year: Rs, 24 474 lakhs). The contingent liabilities are in respect of denial of excise duty benefits at excise exempt location Rs, 24 783 lakhs (Previous year: Rs, 20 476 lakhs) out of which the Company has a right to claim Cenvat credit of Rs, 16 034 lakhs (Previous year: Rs, 12 822 lakhs); denial of Cenvat credit Rs, 65 lakhs (Previous year: Rs, 55 lakhs); Service tax matters Rs, 2 516 lakhs (Previous year: Rs, 2 115 lakhs); Customs valuation disputes Rs, 1 528 lakhs (Previous year: Rs, 1 528 lakhs) and others Rs, 300 lakhs (Previous year: Rs, 300 lakhs).

(iv) In respect of counter guarantees given to banks against guarantees given by banks Rs, 12 189 lakhs (Previous year: Rs, 5 496 lakhs). At the request of the Company, its bankers have issued guarantees to government bodies and third parties for performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

(v) I n respect of other claims Rs, 734 lakhs (Previous year: Rs, 714 lakhs). The Company is a party to various legal proceedings in the normal course of business.

(vi) In respect of Demand raised by Delhi Development Authority towards interest on belated payment of Unearned Increase in respect of leasehold land charges Rs, 3 424 lakhs (Previous year: Rs, 3 424 lakhs).

Future Cash Flow in respect of the above, if any, is determinable only on receipt of judgments / decisions pending with the relevant authorities. The Company does not expect the outcome of matters stated in (i) to (vi) above to have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs, 392 lakhs (Previous year: Rs, 71 lakhs).

2. The Company had in earlier years filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing / repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order on April 24, 2008 in favour of the Company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal on October 31, 2009 with the Hon''ble Supreme Court of India against the said order of the High Court. The Company has, as a matter of prudence, created a Contingency Reserve of Rs, 10 200 lakhs (Previous year: Rs, 8 850 lakhs) by way of appropriation of profits to the extent of excise duty payable (net of Cenvat credit) on dispatches made from the Baddi plant. Accordingly, during the current year, profit of Rs, 1 350 lakhs (Previous year: Rs, 2 100 lakhs) have been appropriated. These Reserves will be reviewed as and when this litigation is finally decided.

3. Employee Benefits

The Company has classified the various benefits provided to employees as under:

I. Defined Contribution Plans

(a) Superannuation Fund

(b) State Defined Contribution Plans: Employer''s Contribution to Employees'' State Insurance

The above amounts are included in Contribution to Provident and other Funds under Employee Benefits Expense

(Refer Note 21)

II. Defined Benefit Plans

a. Gratuity Fund (Funded Scheme): Gratuity is payable to all eligible employees of the Company on Superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Actor Company''s scheme whichever is more beneficial. Benefits would be paid at the time of separation based on the last drawn base salary.

b. Provident Fund (Funded Scheme): Provident Fund for all permanent employees is administered through a trust. The Provident Fund is administered by trustees of an independently constituted common trust recognized by the Income Tax authorities where two other group Companies are also participants. Periodic contributions to the Fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

c. Post Retirement Medical Benefit (PRMB) (Unfunded Scheme): Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on

their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

d. Compensated absences for Plant technicians (Unfunded Scheme): The Company provides for encashment of leave on termination / retirement of service or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / a ailment. The Company makes provision for compensated absences based on an actuarial valuation carried out at the end of the year.

Gratuity included in Contribution to Provident and Other Funds under Employee Benefits Expense (Refer Note 21)

E) Category of Plan Assets

The Company''s Plan Assets in respect of Gratuity, along with two other group companies, are funded through the group scheme of the Life Insurance Corporation of India.

The Company''s Provident Fund is administered by Company''s own Trust Fund. The Company has an obligation to service the shortfall on account of interest generated by the Fund and on maturity of Fund investments and hence the same has been classified as Defined Benefit Obligation. Having regard to the assets of the fund and the return on investments, the Company does not expect any material deficiency in the foreseeable future. The Company''s contribution to Provident Fund '' 570 lakhs (Previous year: '' 411 lakhs) has been recognized in the Statement of Profit and Loss under the head Employee Benefits Expense (Refer Note 21).

4. a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company)

Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (up to 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee''s contribution (restricted to 2.5% of gross salary). Such contribution is charged to staff cost. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till September 30 2005) / The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 2570.97 shares (Previous year: 2180.22 shares) were purchased by employees at weighted average fair value of '' 5 211.99 (Previous year: Rs, 5 248.01) per share. The Company''s contribution during the year on such purchase of shares amounting to Rs, 37 lakhs (Previous year: Rs, 35 lakhs) has been charged under Employee Benefits Expense under Note 21.

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005) / The Procter & Gamble Company, USA were / are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years / 5 years and have a 5 years / 10 years life cycle.

Stock compensation expenses of Rs, 110 lakhs (Previous year: Rs, 92 lakhs) has been charged under Employee Benefits Expense under Note 21.

The above information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5. The Company has taken on lease guesthouses for accommodation of employees and godowns for storage of inventories, with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. Lease payments amounting to Rs, 982 lakhs (Previous year: Rs, 743 lakhs) have been charged to the Statement of Profit and Loss for the year.

6. (a) Reimbursement / (Recovery) of expenses cross charged to related parties include payment / recoveries on account

of finance, personnel, secretarial, administration and planning costs rendered under common cost sharing agreement of the Company with Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited. (Refer Note 36)

(b) Certain expenses in the nature of employee costs, relocation costs and other expenses are cross charged by the Company to its fellow subsidiaries at actual. Similar expenses incurred by fellow subsidiaries are cross charged to the Company at actual.

7. a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of '' 214 lakhs (Previous year: '' 305 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited in terms of common cost sharing agreement referred to in Note 35 (a) above.

b) Commission to Non-Executive Directors

During the current year, an aggregate amount of Rs, 55 lakhs (Previous year: Rs, 44 lakhs) has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable to such directors under Schedule V to the Companies Act, 2013.

8. There are no outstanding derivative instruments as at year end.

Foreign currency exposures that have not been hedged by the company by a derivative instrument or otherwise are given below:

(a) I t is not practicable for the Company to estimate the closure of these issues and the consequential timings of cash flows, if any, in respect of the above.

9. Related Party Disclosures

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holding BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

Details of Related parties:

a) Enterprises where control exists:

The Procter and Gamble Company, USA - Ultimate Holding Company The Procter & Gamble India Holdings B.V., Netherlands - Holding Company

b) Other related parties with whom the Company had transactions during the year:

i) Fellow Subsidiaries:

Procter & Gamble Bangladesh Pvt. Ltd Procter & Gamble Hygiene and Health Care Limited

Gillette Diversified Operations Private Limited Procter & Gamble Indochina Company Limited

Gillette Products Private Limited The Procter & Gamble Distributing LLC

Mining Consultants (India) Private Limited The Gillette Company, USA

Wella India Haircosmetics Private Limited P&G International Operations SA - ROHQ

The Procter & Gamble US Business Services Company Nexus Mercantile Private Limited

Gillette (Shanghai) Ltd Procter & Gamble International Operations SA

Procter & Gamble Do Brasil S/A P&G Europe S.A., Singapore Branch

Procter & Gamble International Operations SA Singapore Br Procter & Gamble Japan K.K.

PT Procter & Gamble Home Products Indonesia Procter & Gamble Gulf Fze

Procter & Gamble (China) Sales Co., Ltd. Procter & Gamble Australia Pty Ltd

Procter & Gamble Nigeria Limited Procter & Gamble International SARL, Luxemburg

Procter & Gamble Tuketim Mallari Sanayi A.S. Procter & Gamble Home Products Private Limited

Procter & Gamble India Holdings Closed Joint Stock Company Petersburg Products

Procter & Gamble Europe SA International Zao St. Petersburg

ii) Investing company in respect of which the Company is an associate:

Wella India Haircosmetics Private Limited ("Wella") #

# Also being a fellow subsidiary Company

iii) Key Management Personnel of the Company:

Mr. Al Rajwani (Managing Director) (with effect from August 29, 2015)

Note: Related parties have been identified by the management.

Notes on Segment Information:

1) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organization structure as well as the differential risks and returns of these segments. Business segments have been considered as primary segments.

2) Segment Revenue, Results and Capital Employed figures include the respective amounts identifiable to each of the segments. Unallowable income / expenses include income / expenses incurred at a corporate level which relate to the company as a whole.

3) Details of type of products included in each segment:

Grooming : Shaving system and Cartridges, Blades, Toiletries and Components Portable Power : Batteries

Oral Care : Tooth brushes, Toothpaste and Oral Care Products

4) Unallowable Corporate Assets mainly include Cash and Cash Equivalents, Loans and Advances and Other Current Assets.

5) Unallowable Corporate Liabilities mainly include Other Liabilities and Provisions.

10. Discontinued operations

Consistent with the decision of Procter & Gamble Company U.S.A. to exit the business of Portable Power (Duracell), the Company in July 2015 received intimation that Procter & Gamble International Operations S.A. has decided to terminate the distributor arrangement entered into with the Company. Such termination is effective February 29, 2016. As a result of such termination, the Company had also received a sum of US $10 million (equivalent to Rs, 6 551 lakhs) [Net of tax Rs, 4 284 lakhs] as discontinuation facilitation payment from Procter & Gamble International SARL, Luxemburg in relation to the discontinuation of the Duracell India business and accounted for the same during the year.

The Duracell batteries business was a reportable segment under Portable Power segment, and is consequently treated as a discontinued operation.

11. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

Mr. Al Rajwani was appointed as Managing Director of the Company w.e.f. August 29, 2015.

Mr. N. P Sarda was appointed as Non-Executive Independent Director w.e.f. August 29, 2015.

generally, the year refers to the period April to March. Out of the total disputed dues aggregating '' 53 721 lakhs as above, '' 23 376 lakhs has been stayed for recovery by the relevant authorities.

(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures and hence reporting under clause (viii) of the Order is not applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

Jun 30, 2015

1. CORPORATE INFORMATION

Gillette India Limited ('the Company') is a public company incorporated under the provisions of the Companies Act, 1956. The Company is engaged in manufacturing and selling of branded packaged fast moving consumer goods in the grooming, portable power and oral care businesses. The Company's products are sold through retail operations including mass merchandisers, grocery stores, membership club stores, drug stores, department stores and high frequency stores. The Company has its manufacturing locations at Bhiwadi in Rajasthan and Baddi in Himachal Pradesh, apart from third party manufacturing locations spread across India.

2. (a) Contingent Liabilities:

(i) In respect of Income Tax demands for which the company has preferred appeals with appropriate authorities - Rs. 15 162 lakhs (Previous year: Rs. 10 009 lakhs). The contingent liability is in respect of matters related to: Income tax dispute on inventory write-off, allowability of losses carried forward from merged entities and others.

(ii) In respect of Sales Tax matters for which the company has preferred appeals with appropriate authorities - Rs. 3 182 lakhs (Previous year: Rs. 1 397 lakhs). The contingent liability is in respect of matters related to: non submission of "C" Forms/"F" Forms Rs. 2 471 lakhs (Previous year: Rs. 796 lakhs) and others Rs.711 lakhs (Previous year: Rs. 601 lakhs).

(iii) In respect of Excise, Service Tax and Customs matters for which the company has preferred appeals with appropriate authorities - Rs. 24 474 lakhs (Previous year: Rs. 20 816 lakhs). The contingent liabilities are in respect of denial of excise duty benefits at excise exempt location Rs. 20 476 lakhs (Previous year: Rs. 17 337 lakhs) out of which the Company has a right to claim Cenvat credit of Rs. 12 822 lakhs (Previous year: Rs. 8 943 lakhs); denial of Cenvat credit Rs. 55 lakhs (Previous year: Rs. 55 lakhs); Service tax matters Rs. 2 115 lakhs (Previous year: Rs. 1 591 lakhs); Customs valuation disputes Rs. 1 528 lakhs (Previous year: Rs. 1 528 lakhs) and others Rs. 300 lakhs (Previous year: Rs. 305 lakhs).

(iv) In respect of counter guarantees given to banks against guarantees given by banks Rs. 5 496 lakhs (Previous year: Rs. 4 112 lakhs). At the request of the Company, its bankers have issued guarantees to government bodies and third parties for performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

(v) in respect of other claims Rs. 714 lakhs (Previous year: Rs. 5 456 lakhs). The Company is a party to various legal proceedings in the normal course of business.

(vi) In respect of Demand raised by Delhi Development Authority towards interest on belated payment of Unearned Increase in respect of leasehold land charges Rs. 3 424 lakhs (Previous year: Rs. 3 424 lakhs).

Future Cash Flow in respect of the above, if any, is determinable only on receipt of judgements/decisions pending with the relevant authorities. The Company does not expect the outcome of matters stated in (i) to (vi) above to have a material adverse effect on the Company's financial condition, results of operations or cash flows.

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 71 lakhs (Previous year: Rs. 409 lakhs).

3. The Company had in earlier years filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing/repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order on April 24, 2008 in favour of the Company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal on October 31, 2009 with the Hon'ble Supreme Court of India against the said order of the High Court. The Company has, as a matter of prudence, created a Contingency Reserve of Rs. 8 850 lakhs (Previous year: Rs. 6 750 lakhs) by way of appropriation of profits to the extent of excise duty payable (net of Cenvat credit) on dispatches made from the Baddi plant. Accordingly, during the current year, profit of Rs. 2 100 lakhs (Previous year: Rs. 1 350 lakhs) have been appropriated. These Reserves will be reviewed as and when this litigation is finally decided.

4. Employee Benefits

The Company has classified the various benefits provided to employees as under:

I. Defined Contribution Plans

(a) Superannuation Fund

(b) State Defined Contribution Plans: Employer's Contribution to Employees' State Insurance

During the year, the Company has recognised the following amounts in the Statement of Profit and Loss:

II. Defined Benefit Plans

a. Gratuity Fund (Funded Scheme): Gratuity is payable to all eligible employees of the Company on Superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Act or Company's scheme whichever is more beneficial. Benefits would be paid at the time of separation based on the last drawn base salary.

b. Provident Fund (Funded Scheme): Provident Fund for all permanent employees is administered through a trust. The Provident Fund is administered by trustees of an independently constituted common trust recognised by the Income Tax authorities where two other group Companies are also participants. Periodic contributions to the Fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

c. Post Retirement Medical Benefit (PRMB) (Unfunded Scheme): Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

d. Compensated absences for Plant technicians (Unfunded Scheme): The Company provides for encashment of leave on termination/retirement of service or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/availment. The Company makes provision for compensated absences based on an actuarial valuation carried out at the end of the year.

5. a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had a "Global Employee Stock Ownership Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC.

Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (upto 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee's contribution (restricted to 2.5% of gross salary). Such contribution is charged to staff cost.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till September 30 2005)/The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 2180.22 shares (Previous year: 2347.99 shares) were purchased by employees at weighted average fair value of Rs. 5 248.01 (Previous year: Rs. 4 908.51) per share. The Company's contribution during the year on such purchase of shares amounting to Rs. 35 lakhs (Previous year: Rs. 34 lakhs) has been charged under Employee Benefits Expense under Note 21.

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005)/The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years/5 years and have a 5 years/10 years life cycle.

Stock compensation expenses of Rs. 92 lakhs (Previous year: Rs. 185 lakhs) has been charged under Employee Benefits Expense under Note 21.

6. The Company has taken on lease guesthouses for accommodation of employees and godowns for storage of inventories, with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. Lease payments amounting to Rs. 743 lakhs (Previous year: Rs. 304 lakhs) have been charged to the Statement of Profit and Loss for the year.

7. (a) Reimbursement/(Recovery) of expenses cross charged to related parties include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter & Gamble Hygiene and Healthcare Limited and Procter & Gamble Home Products Private Limited. (Refer Note 36)

(b) Certain expenses in the nature of employee costs, relocation costs and other expenses are cross charged by the Company to its fellow subsidiaries at actual. Similar expenses incurred by fellow subsidiaries are cross charged to the Company at actual.

8. a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of Rs. 305 lakhs (Previous year: Rs. 137 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Private Limited in terms of common services agreement referred to in Note 35 (a) above.

b) Commission to Non-Executive Directors

During the current year, an aggregate amount of Rs. 44 lakhs has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable -to such directors under Schedule V to the Companies Act, 2013.

For the financial year 2013-14 the aggregate amount of Commission of Rs. 172 lakhs (including service tax of Rs. 19 lakhs) charged and since paid for the year in the Financial Statements, exceeded the maximum amount payable based on 1 % of the net profits of the Company by an amount of Rs. 24 lakhs (including service tax of Rs. 3 lakhs). The said excess amount of Rs. 24 lakhs has since been ratified by the members of the Company. The Company had made an application to the Central Government on January 6, 2014 for waiver of the excess commission; which was rejected. The Company has since recovered the excess amount of Rs. 24 lakhs from the Directors.

9. There are no outstanding derivative instruments as at year end.

Foreign currency exposures that have not been hedged by the company by a derivative instrument or otherwise are given below:

10. Related Party Disclosures

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holding BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

Details of Related parties:

a) Enterprises where control exists:

The Procter and Gamble Company, USA - Ultimate Holding Company The Procter & Gamble India Holdings B.V., Netherlands - Holding Company

11. Discontinuing operations

Consistent with the decision of Procter & Gamble Company U.S.A. to exit the business of Portable Power (Duracell), the Company in July 2015 received intimation that Procter & Gamble International Operations S.A. has decided to terminate the distributor arrangement entered into with the Company. Such termination will result in the Company not being able to act as the distributor of Duracell batteries from January 29, 2016. As a result of such termination, the Company will receive a sum of US $ 10 million (equivalent to Rs. 6 369 lakhs) [Net of tax Rs. 4 165 lakhs] as discontinuation facilitation payment from Procter & Gamble International SARL, Luxemburg in relation to the discontinuation of the Duracell India business.

The Duracell batteries business was a reportable segment under Portable Power segment, and is consequently treated as a discontinuing operation.

12. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification / disclosure.

Jun 30, 2014

1. CORPORATE INFORMATION

Gillette India Limited (''the Company'') is a public company incorporated under the provisions of the Companies Act, 1956. The Company is engaged in manufacturing and selling of branded packaged fast moving consumer goods in the grooming, portable power and oral care businesses. The Company''s products are sold through retail operations including mass merchandisers, grocery stores, membership club stores, drug stores, department stores and high frequency stores. The Company has its manufacturing locations at Bhiwadi in Rajasthan and Baddi in Himachal Pradesh, apart from third party manufacturing locations spread across India.

2. a) Contingent Liabilities:

i) In respect of Income Tax demands for which the company has preferred appeals with appropriate authorities Â Rs. 10 009 lakhs (Previous year: Rs. 4 160 lakhs). The contingent liability is in respect of matters related to: Income tax dispute on inventory write-off, allowability of losses carried forward from merged entities and others.

ii) In respect of Sales tax matters for which the company has preferred appeals with appropriate authorities Â Rs. 1 397 lakhs (Previous Year: Rs. 1 135 lakhs). The contingent liability is in respect of matters related to: non submission of "C" Forms / "F" Forms Rs. 796 lakhs (Previous Year: Rs. 585 lakhs) and others Rs. 601 lakhs (Previous Year: Rs. 550 lakhs).

iii) In respect of Excise, Service Tax and Customs matters for which the company has preferred appeals with appropriate authorities Â Rs. 20 816 lakhs (Previous Year: Rs. 16 292 lakhs). The contingent liabilities are in respect of denial of excise duty benefits at excise exempt location Rs. 17 337 lakhs (Previous Year: Rs. 9 943 lakhs) out of which the Company has a right to claim Cenvat credit of Rs. 8 943 lakhs (Previous Year: Rs. 6 017 lakhs); denial of Cenvat credit Rs. 55 lakhs (Previous Year: Rs. 3 161 lakhs); service tax matters Rs. 1 591 lakhs (Previous year: Rs. 1 361 lakhs); Customs valuation disputes Rs. 1 528 lakhs (Previous Year: Rs. 1 528 lakhs) and others Rs. 305 lakhs (Previous Year: Rs. 299 lakhs).

iv) In respect of counter guarantees given to bank against guarantees given by bank Rs. 4 112 lakhs (Previous Year: Rs. 3 291 lakhs). At the request of the Company, its bankers have issued guarantees to government bodies and third parties for performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

v) In respect of other claims Rs. 5 456 lakhs (Previous Year: Rs. 135 lakhs). The Company is a party to various legal proceedings in the normal course of business.

vi) In respect of Demand raised by Delhi Development Authority towards interest on belated payment of Unearned Increase in respect of leasehold land charges Rs. 3 424 lakhs (Previous Year: Rs. 3 424 lakhs).

Future Cash Flow in respect of the above, if any, is determinable only on receipt of judgements / decisions pending with the relevant authorities. The Company does not expect the outcome of matters stated in (i) to (vi) above to have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

b) Commitments:

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 409 lakhs (Previous year: Rs. 159 lakhs). ii) Other commitments of Rs. Nil (Previous year: Rs. 50 lakhs) (Payable to a Contract Manufacturer towards commitment charges).

3. The Company had in earlier years filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing / repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order on April 24, 2008 in favour of your Company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal on October 31, 2009 with the Hon''ble Supreme Court of India against the said order of the High Court. The Company has, as a matter of prudence, created a Contingency Reserve of Rs. 6 750 lakhs (Previous Year: Rs. 5 400 lakhs) by way of appropriation of profits to the extent of excise duty payable (net of Cenvat credit) on dispatches made from the Baddi plant. Accordingly, during the current year, profit of Rs. 1 350 lakhs (Previous Year: Rs. 1 250 lakhs) have been appropriated. These Reserves will be reviewed as and when this litigation is finally decided.

4. Employee Benefits

The company has classified the various benefits provided to employees as under:

I. Defined Contribution Plans

a) Superannuation Fund

b) State Defined Contribution Plans: Employer''s Contribution to Employees'' State Insurance

The above amounts are included in Contribution to Provident and other Funds under Employee Benefit Expenses (Refer Note 21)

II. Defined Benefit Plans

a. Gratuity Fund (Funded Scheme): Gratuity is payable to all eligible employees of the Company on Superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Act or Company''s scheme whichever is more beneficial. Benefits would be paid at the time of separation based on the last drawn base salary.

b. Provident Fund (Funded Scheme): Provident Fund for all permanent employees is administered through a trust. The Provident Fund is administered by trustees of an independently constituted common trust recognised by the Income Tax authorities where two other group Companies are also participants. Periodic contributions to the Fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

c. Post Retirement Medical Benefit (PRMB) (Unfunded Scheme): Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

d. Compensated absences for Plant technicians (Unfunded Scheme): The Company provides for encashment of leave on termination / retirement of service or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / availment. The Company makes provision for compensated absences based on an actuarial valuation carried out at the end of the year.

F) Category of Plan Assets

The Company''s Plan Assets in respect of Gratuity, alongwith two other group companies, are funded through the group scheme of the Life Insurance Corporation of India.

5. a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had a "Global Employee Stock Ownership Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC.

Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (upto 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee''s contribution (restricted to 2.5% of gross salary). Such contribution is charged to staff cost.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till September 30 2005) / The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 2347.99 shares (Previous year: 2326.78 shares) were purchased by employees at weighted average fair value of Rs. 4 908.51 (Previous year: Rs. 3 997.10) per share. The Company''s contribution during the year on such purchase of shares amounting to Rs. 34 lakhs (Previous year: Rs. 18 lakhs) has been charged under Employee Benefit Expenses under Note 21.

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005) / The Procter & Gamble Company, USA were / are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years / 5 years and have a 5 years / 10 years life cycle.

Stock compensation expenses of Rs. 185 lakhs (Previous year: Rs. 83 lakhs) has been charged under Employee Benefit Expenses under Note 21.

6. The Company has taken on lease guesthouses for accommodation of employees and with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. Lease payments amounting to Rs. 304 lakhs (Previous Year: Rs. 234 lakhs) have been charged to the Statement of Profit and Loss for the year. There are no ''Non cancellable'' leases.

7. Common service expenses paid / recovered include payment / recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter and Gamble Hygiene and Healthcare Limited and Procter and Gamble Home Products Limited.

8. a) Managerial Remuneration

The computation of managerial remuneration excludes an amount of Rs. 137 lakhs (Previous year Rs. 127 lakhs) in respect of managerial personnel cross-charged from Procter & Gamble Hygiene and Health Care Limited and Procter & Gamble Home Products Limited in terms of common services agreement referred to in Note 35 above.

b) Commission to Non-Executive Directors

During the current year, an aggregate amount of Rs. 80 lakhs has been provided as commission payable to the Non-Executive Directors which is within the overall limits of commission payable to such directors under Schedule XIII to the Companies Act, 1956.

For the financial year 2012-13 the aggregate amount of Commission of Rs. 172 lakhs (including service tax of Rs. 19 lakhs) charged and since paid for the year in the Financial Statements, exceeded the maximum amount payable based on 1% of the net profits of the Company by an amount of Rs. 24 lakhs (including service tax of Rs. 3 lakhs). The said excess amount of Rs. 24 lakhs has since been ratified by the members of the Company. The Company has made an application to the Central Government on January 6, 2014 for waiver of the excess commission; the approval of the Central Government is awaited.

For the financial year 2011-12, the Company had paid commission to Non-Executive Directors amounting to Rs. 160 lakhs, of which an amount of Rs. 38 lakhs (excluding service tax), being amount in excess of 1% of net profits for the year ended June 30, 2012, was ratified by the members of the Company. The Central Government has rejected the Company''s re-application vide letter ref. ROC / CG / Approval / 2013-14 / 230 dated January 27, 2014. The Company has, accordingly, recovered the said excess amount of Rs. 38 lakhs from the Directors during the year.

9. There are no outstanding derivative instruments as at year end.

10. Related Party Disclosures:

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holding BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

Details of Related parties:

a) Enterprises where control exists:

The Procter and Gamble Company, USA - Ultimate Holding Company The Procter & Gamble India Holdings B.V., Netherlands - Holding Company

11. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

Jun 30, 2013

1. CORPORATE INFORMATION

Gillette India Limited (''the Company'') is a public company incorporated under the provisions of the Companies Act, 1956. The company is engaged in manufacturing and selling of branded packaged fast moving consumer goods in the grooming, portable power and oral care businesses. The company''s products are sold through retail operations including mass merchandisers, grocery stores, membership club stores, drug stores, department stores and high frequency stores. The Company has its manufacturing locations at Bhiwadi in Rajasthan and Baddi in Himachal Pradesh, apart from third party manufacturing locations spread across India.

2. a) Contingent Liabilities:

i) In respect of Income Tax demands for which the company has preferred appeals with appropriate authorities - Rs. 4 160 lakhs (Previous year: Rs. 5 428 lakhs). The contingent liability is in respect of matters related to: Income tax dispute on inventory write-off allowability of losses carried forward from merged entities and others.

ii) In respect of Sales tax matters for which the company has preferred appeals with appropriate authorities Â Rs. 1 135 lakhs (Previous year: Rs. 2 237 lakhs). The contingent liability is in respect of matters related to: non submission of "C" Forms/"F" Forms Rs. 585 lakhs (Previous year: Rs. 1 609 lakhs) and others Rs. 550 lakhs (Previous year: Rs. 629 lakhs).

iii) In respect of Excise, Service Tax and Customs matters for which the company has preferred appeals with appropriate authorities Â Rs. 16 292 lakhs (Previous year: Rs. 13 303 lakhs). The contingent liabilities are in respect of denial of excise duty benefits at excise exempt location Rs. 9 943 lakhs (Previous year: Rs. 8 265 lakhs) out of which the Company has a right to claim Cenvat credit ofRs. 6 017 lakhs (Previous year: Rs. 4 993 lakhs); denial of Cenvat credit Rs. 3 161 lakhs (Previous year: Rs. 3 161 lakhs); service tax matters Rs. 1 361 lakhs (Previous year : Rs. 50 lakhs); Customs valuation disputes Rs. 1 528 lakhs (Previous year: Rs. 1 528 lakhs) and others Rs. 299 lakhs (Previous year: Rs. 299 lakhs).

iv) In respect of counter guarantees given to bank against guarantees given by bank Rs. 3 291 lakhs (Previous year: Rs. 1 652 lakhs). At the request of the Company, its bankers have issued guarantees to government bodies and third parties for performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

v) In respect of other claims Rs. 135 lakhs (Previous year: Rs. 382 lakhs). The Company is a party to various legal proceedings in the normal course of business.

vi) In respect of Demand raised by Delhi Development Authority towards interest on belated payment of Unearned Increase in respect of leasehold land charges Rs. 3 424 lakhs (Previous year: Rs. 395 lakhs).

vii) Other commitments of Rs. 50 lakhs (Previous year: Rs. 450 lakhs) (Payable to a Contract Manufacturer towards commitment charges).

Future Cash Flow in respect of the above, if any, is determinable only on receipt of judgements/decisions pending w ith the relevant authorities. The Company does not expect the outcome of matters stated in (i) to (vi) above to have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

b) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 159 lakhs (Previous year: Rs. 104 lakhs).

3. As informed in the previous Financial Statements, the Company had filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing/repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order on April 24, 2008 in favour of your company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal on October 31, 2009 with the Hon''ble Supreme Court of India against the said order of the High Court. The Company has as a matter of prudence, created a Contingency Reserve ofRs. 5 400 lakhs (Previous year: Rs. 4 150 lakhs) by way of appropriation of profits to the extent of excise duty payable (net of C''envat credit) on dispatches made from the Baddi plant. Accordingly during the current year profit ofRs. 1 250 lakhs (Previous year: Rs. 1 150 lakhs) have been appropriated. These Reserves will be reviewed as and when this litigation is finally decided.

4. Kmployee Benefits

The Company has classified the various benefits provided to employees as under:

1. Defined Contribution Plans

a) Superannuation Fund .

b) State Defined Contribution Plans: Employer''s Contribution to Employees'' State Insurance

During the year, the Company has recognized the following amounts in the Statement of Profit and Loss:

II. Defined Benefit Plans

a. Gratuity Fund (Funded Scheme): Gratuity is payable to all eligible employees of the Company on Superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Act or Company''s scheme whichever is more beneficial. Benefits would be paid at the time of separation based on the last drawn base salary.

b. Provident Fund (Funded Scheme): Provident Fund for all permanent employees is administered through a trust. The Provident Fund is administered by trustees of an independently constituted common trust recognised by the Income Tax authorities where two other group Companies are also participants. Periodic contributions to the Fund are charged to revenue. The Company has an obligation to make good the shortfall, if any. between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of sendee.

c. Post Retirement Medical Benefit (PRMB) (Non-funded Scheme): Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

5. a) Global Employee Stock Ownership Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had a "Global Employee Stock Ownership Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC.

Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (upto 15%) of his base salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee''s contribution (restricted to 2.5% of base salary). Such contribution is charged to staff cost.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till September 30 2005) / The Procter & Gamble Company, USA are listed with New York Stock

Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 2326.78 shares (Previous year: 2 478.13 shares) were purchased by employees at weighted average fair value ofRs. 3 997.10 (Previous year: Rs. 3 220.89) per share. The Company''s contribution during the year on such purchase of shares amounting to Rs. 18 lakhs (Previous year: Rs. 25 lakhs) has been charged under Employee Benefit Expenses under Note 21.

b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company. USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005) / The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years/5 years and have a 5 years /10 years life cycle.

Stock compensation expenses ofRs. 83 lakhs (Previous year: Rs. 546 lakhs) has been charged under Employee Benefit Expenses under Note 21.

6. The Company has taken on lease guesthouses for accommodation of employees and godowns for storage of inventories, with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. Lease payments amounting to Rs. 234 lakhs (Previous year: Rs. 218 lakhs) have been charged to the Statement of Profit and Loss for the year. There are no ''Non cancellable'' leases.

7. Common service expenses paid/recovered include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter and Gamble Hygiene and Health Care Limited and Procter and Gamble Home Products Limited.

8. a) Re-appointment of Managing Director

Mr. S. Khosla has been re-appointed by the Members of the Company as the Managing Director of the Company vide resolution dated December 11, 2012 and the approval from the Ministry of Corporate Affairs vide letter no. SRN B41469586/4/2012 - CL.VII dated January 10, 2013 pursuant to the provisions of Section 316 (4) of the Companies Act, 1956.

b) Commission to Non-Executive Directors

During the current year, an aggregate amount ofRs. 80 lakhs has been paid as commission to the Non-Executive Directors which is within the overall limits of commission payable to such directors under schedule XIII to the Companies Act, 1956. The said payment constitutes 53% of the aggregate amount ofRs. 153 lakhs (excluding service tax of Rs. 19 lakhs) which is payable to the Non-Executive Directors and is provided for in the financial statements.

The aggregate amount of Commission ofRs. 172 lakhs (including service tax ofRs. 19 lakhs) payable and charged for the year in the financial statements as is stated above, exceeds the maximum amount payable based on 1 % of the net profits of the Company amounting to Rs. 148 lakhs (as per the computation below) for the year ended June 30, 2013, by an amount ofRs. 24 lakhs (including service tax of Rs. 3 lakhs). The said excess amount of Rs. 24 lakhs which is provided but not paid, is subject to by approval of the Members of the Company by way of a special resolution at the ensuing 29th Annual General Meeting of the Company, and the Central Government.

During the previous year ended June 30, 2012 also, the Company had paid commission to Non-Executive Directors amounting to Rs. 160 lakhs, of which an amount ofRs. 48 lakhs (including service tax ofRs. 10 lakhs), being amount in excess of 1% of net profits for the year ended June 30, 2012. This was paid during the current year and the same was ratified by the members at the 28th Annual General Meeting of the Company. The Company has made an application to the Central Government on January 3, 2013 for waiver of the excess commission, which is as yet pending for approval by the Central Government.

9. Related Party Disclosures:

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holding BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

Details of Related parties:

a) Parties where control exists:

The Procter and Gamble Company, USA - Ultimate Holding Company -

The Procter & Gamble India Holdings B.V. - Holding Company

b) Other related parties with whom transactions have taken place during the year:

i) Fellow Subsidiaries:

Procter & Gamble Bangladesh Pvt. Ltd Procter & Gamble Hygiene & Healthcare Limited

Gillette Diversified Operations Private Limited Gillette UK Limited

Gillette Products Private Limited The Procter & Gamble Distributing LLC

Mining Consultants (India) Private Limited The Gillette Company, USA

Wella India Haircosmetics Private Limited P&G International Operations SA - ROHQ

Procter & Gamble International Operations SA, Ceemea Div. Nexus Mercantile Private Limited

Gillette (Shanghai) Ltd The Procter & Gamble US Business Services

Procter & Gamble Do Brasil S/A Company

Procter & Gamble Trading (Thailand) Ltd. Procter & Gamble (Guangzhou) Ltd.

Procter & Gamble International Operations SA, Procter & Gamble Home Products Limited

Singapore Branch P&G Europe S.A.,Singapore Branch

Gillette Poland International Sp. Z O.O. Petersburg Products International Zao.

Procter & Gamble (China) Sales Co., Ltd. Procter & Gamble Productions, Inc.

Procter & Gamble International Operations SA PT Procter & Gamble Home Products Indonesia

ii) Investing company in respect of which the Company is an associate:

Wella India Haircosmetics Private Limited ("Wella") (Formerly known as Gillette Group India Private Limited) #

# Also being a fellow subsidiary Company

iii) Key Managerial Personnel of the Company

Mr. Shantanu Khosla Managing Director

Note: Related parties have been identified by the management

10. Excise duty deducted from turnover represents amount of excise duty collected by the company on sale of goods. Excise duty shown under Note 23 - Other Expenses represents difference in amount of excise duty on closing stock and opening stock of finished goods.

11. Salaries and Wages includes Rs. Nil (Previous year: Rs. 45 lakhs) for expenditure on Voluntary Retirement Scheme.

12. No borrowing costs have been capitalised during the year.

13. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Jun 30, 2012

1. CORPORATE INFORMATION

Gillette India Limited ('the Company') is a public company incorporated under the provisions of the Companies Act, 1956. The Company is engaged in the manufacturing and selling of branded packaged fast moving consumer goods in the grooming, portable power and oral care businesses. The Company's products are sold through retail operations including mass merchandisers, grocery stores, membership club stores, drug stores, department stores and high frequency stores. The Company has its manufacturing locations at Bhiwadi in Rajasthan and Baddi in Himachal Pradesh, apart from third party manufacturing locations spread across India.

Rights attached to equity shares

The Company has only one class of equity shares having a par value ofRs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.

2. (a) Contingent Liabilities:

(i) In respect of Income Tax demands for which the company has preferred appeals with appropriate authorities - Rs. 54 27 91 889 (Previous year :Rs. 13 42 95 184). The contingent liability is in respect of matters related to: Income tax dispute on inventory write-off, allowability of losses carried forward from merged entities and others.

(ii) In respect of Sales Tax matters for which the company has preferred appeals with appropriate authorities - Rs. 22 37 29 095 (Previous year : Rs. 22 16 36 473). The contingent liability is in respect of matters related to: non submission of "C" Forms/ "F" Forms Rs. 16 08 55 701 (Previous year : Rs. 19 37 99 184) and Interest demand on VAT rate difference Rs. Nil (Previous year : Rs. 8 831) and others Rs. 6 28 73 394 (Previous year : Rs. 2 78 28 458).

(iii) In respect of Excise, Service Tax and Customs matters for which the company has preferred appeals with appropriate authorities

- Rs. 1 33 02 69 529 (Previous year :Rs. 1 04 98 83 545). The contingent liabilities are in respect of denial of excise duty benefits at excise exempt location Rs. 82 65 03 316 (Previous year : Rs. 65 70 84 390) out of which the Company has a right to claim Cenvat credit ofRs. 49 92 93 751 (Previous year : Rs. 39 38 12 373); denial of Cenvat credit Rs. 31 61 43 634 (Previous year :

Rs. 32 39 26 267); sendee tax matters Rs. 49 54 606 (Previous year : Rs. 49 54 606); Customs valuation disputes Rs. 15 28 06 226 (Previous year :Rs. 16 18 04 057) and others Rs. 2 98 61 747 (Previous year : Rs. 2 72 81 963).

(iv) In respect of counter guarantees given to bank against guarantees given by bank Rs. 16 51 57 448 (Previous year : Rs. 11 99 29 266).

At the request of the Company, its bankers have issued guarantees to government bodies and third parties for performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

(v) In respect of other claims Rs. 3 82 00 000 (Previous year : Rs. 2 00 31 519). The Company is a party to various legal proceedings in the normal course of business.

(vi) In respect of Demand raised by Delhi Development Authority towards interest on belated payment of Unearned Increase in respect of leasehold land charges Rs. 3 94 57 027 (Previous year : Rs. 3 94 57 027).

(vii) Other commitments of Rs. 4 50 22 577 (Previous year : Rs. Nil) (Payable to a Contract Manufacturer towards commitment charges).

Future Cash Flow in respect of the above, if any, is determinable only on receipt of judgements/decisions pending with the relevant authorities. The Company does not expect the outcome of matters stated in (i) to (vi) above to have a material adverse effect on the Company's financial condition, results of operations or cash flows.

(b) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 1 03 74 366 (Previous year : Rs. 61 02 977)

3. As informed in the previous Financial Statements, the Company had filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing/repacking activities at its Baddi Manufacturing Facility.

The High Court has since passed an order in favour of your company and has struck down the notification withdrawing the excise exemption.

The Excise department has preferred an appeal with the Hon'ble Supreme Court of India against the said order of the High Court. The Company has as a matter of prudence, created a Contingency Reserve of Rs. 41 50 00 000 (Previous year : Rs. 30 00 00 000) by way of appropriation of profits to the extent of excise duty payable (net of Cenvat credit) on dispatches made from the Baddi plant. Accordingly during the current year profit of Rs. 11 50 00 000 (Previous year : Rs. 9 00 00 000) have been appropriated. These Reserves will be reviewed < as and when this litigation is finally decided.

II. Defined Benefit Plans

a. Gratuity Fund (Funded Scheme): Gratuity is payable to all eligible employees of the Company on Superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Act or Company's scheme whichever is more beneficial. Benefits would be paid at the time of separation based on the last drawn base salary.

b. Provident Fund (Funded Scheme): Provident Fund for all permanent employees is administered through a trust. The Provident Fund is administered by trustees of an independently constituted common trust recognised by the Income Tax authorities where two other group Companies are also participants. Periodic contributions to the Fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

c. Post Retirement Medical Benefit (PRMB) (Non-funded Scheme): Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

(E) Category of Plan Assets

The Company's Plan Assets in respect of Gratuity, alongwith two other group companies, are funded through the group scheme of the Life Insurance Corporation of India.

The Company's Provident Fund is administered by Company's own Trust Fund. The Company has an obligation to service the shortfall on account of interest generated by the Fund and on maturity of Fund investments and hence the same has been classified as Defined Benefit Obligation.

4. (a) Global Employee Stock Ownership Plan (Stocks of the Parent Company)

The Gillette Company, USA (TGC) had a "Global Employee Stock Ownership Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC.

Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (upto 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee's contribution (restricted to 2.5% of gross salary). Such contribution is charged to staff cost.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till 30 September 2005)/The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase.

During the year 2 478.13 shares (Previous year : 2 457.29 shares) were purchased by employees at weighted average fair value ofRs. 3 220.89 (Previous year : Rs. 2 841.87) per share. The Company's contribution during the year on such purchase of shares amounting to Rs. 24 80 581 (Previous year : f 21 22 809) has been charged under Employee Benefit Expenses under Note 21.

(b) Employees Stock Options Plan (Stocks of the Parent Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005)/ The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years/5 years and have a 5 years/10 years life cycle.

5. Disclosures under the Micro. Small and Medium Enterprises Development Act, 2006:

(i) No payments were due and outstanding to suppliers covered under the Micro Small and Medium Enterprises Development Act, 2006 as at the end of the current and previous accounting year on account of Principal and Interest respectively.

(ii) No interest was paid in the current and the previous accounting year.

(iii) No interest was payable at the end of the current and previous accounting year other than interest under Micro, Small and Medium Enterprises Development Act, 2006.

( iv) No amount of interest was accrued and unpaid at the end of the current and previous accounting year.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6. The Company has taken on lease guesthouses for accommodation of employees and godowns for storage of inventories, with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. Lease payments amounting to Rs. 2 18 34 969 (Previous Year: Rs. I 48 96 204) have been charged to the Statement of Profit and Loss for the year. There are no 'Non cancellable' leases.

7. Common service expenses paid/recovered include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter and Gamble Hygiene and Health Care Limited and Procter and Gamble Home Products Limited.

8. (a) Re-appointment of Managing Director

The Managing Director of the Company Mr. Shantanu Khosla, has been re-appointed as the Managing Director of the Company on completion of his five year term for a period of five years with effect from January 29, 2012 by the Board of Directors at their meeting held on May 4, 2012. The said re-appointment is subject to the approval of the Members at the ensuing 28th Annual General Meeting of the Company and the Central Government. The said approval for re-appointment shall also include either payment of remuneration to Mr. Khosla directly and/or the same may be reimbursed/cross charged to/from any other Company of which Mr. Khosla is also the Managing Director, as enumerated in the Explanatory Statement annexed pursuant to Section 173 of the Act, provided however that the remuneration payable to Mr. Khosla or the reimbursement as aforesaid shall not exceed the maximum limits for payment of managerial remuneration specified in Schedule XIII to the Companies Act, 1956 or any amendments thereto as may be made from time to time. The Board of Directors of the Company has at the said meeting approved/ratified the payment towards the remuneration of Mr. Khosla either being made directly to Mr. Khosla or by way of re-imbursement to any other Company of which Mr. Khosla is also the Managing Director from January 29, 2012 till the date of the Annual General Meeting. Where in any Financial Year during the tenure of office of Mr. Khosla, the Company has no profits or its profits are inadequate, the Company shall pay remuneration, benefits and amenities to Mr. Khosla as specified in the said explanatory statement, subject to the approval of the Central Government, if and to the extent necessary. Mr. Shantanu Khosla is not liable to retire by rotation.

The re-appointment of Mr. Khosla as the Managing Director of the Company is notwithstanding the fact that he has been appointed as the Managing Director of Procter & Gamble Home Products Limited and Procter and Gamble Hygiene & Health Care Limited for a period of five years.

An application has been made by the Company to the Central Government seeking approval for the said re-appointment of Mr. Shantanu Khosla as the Managing Director of three legal entities as is stated above. The said application is as yet pending for approval.

(b) Commission to Non-Executive Directors

During the previous year, commission of Rs. 1 60 00 000 was paid to the Non-Executive Directors, which exceeded the maximum limit of 1% of the net profits by an amount of Rs. 21 40 965. The said excess amount of Rs. 21 40 965 was considered as an advance held under trust for the Company by the Non-Executive Directors. In order to enable the Non-Executive Directors to retain the excess amounts of commission then paid, the following approvals were obtained:

- Approval from the Members of the Company at their 27th Annual General Meeting held on 31st October 2011 by a Special Resolution; and

- Approval from the Central Govt vide their Letter No B 25883299/2/2011-CL.VII dated 1st May, 2012.

Pursuant to the above mentioned approvals, the said amount of Rs. 21 40 965 has been expensed during the current year.

In respect of the current year, an aggregate amount of Rs. 80 00 000 has been paid as commission to the Non-Executive Directors which is within the overall limits of commission payable to such directors under schedule XIII to the Companies Act, 1956. The said payment constitutes 50% of the aggregate amount of Rs. 1 60 00 000 (excluding service tax of Rs. 9 88 800) which is payable to the Non-Executive Directors and is provided for in the financial statements.

The aggregate amount of Commission of Rs. 1 69 88 800 (including service tax of Rs. 9 88 800) payable and charged for the year in the financial statements as is stated above, exceeds the maximum amount payable based on 1% of the net profits of the Company amounting to Rs. 1 21 63 895 (as per the computation below) for the year ended 30th June 2012, by an amount of Rs. 48 24 905 (including service tax of Rs. 9 88 800). The said excess amount of Rs. 48 24 905 which is provided but not paid, is subject to by approval of the Members of the Company by way of a special resolution at the ensuing 28th Annual General Meeting of the Company, and the Central Government.

9. Related Party Disclosures:

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holding BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

Details of Related parties:

(a) Parties where control exists:

- The Procter and Gamble Company, USA - Ultimate Holding Company

The Procter & Gamble India Holdings B.V. - Holding Company

Notes on Segment Information:

(1) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisation structure as well as the differential risks and returns of these segments. Business segments have been considered as primary segments.

(2) Segment Revenue, Results and Capital Employed figures include the respective amounts identifiable to each of the segments. Unallocable income/expenses include income/expenses incurred at a corporate level which relate to the company as a whole. Unallocable income/expenses mainly includes income from investment of surplus funds and exchange gain/(loss).

(3) Details of type of products included in each segment:

Grooming: Blades, Razors and Toiletries

Portable Power: Batteries

Oral Care: Tooth brushes and oral care products

(4) Unallocable Corporate Assets mainly include Trade Receivables, Cash and Cash Equivalents, Loans and Advances and Other Current Assets.

(5) Unallocable Corporate Liabilities mainly include Trade Payables, Other Liabilities and Provisions.

10. Excise duty deducted from turnover represents amount of excise duty collected by the company on sale of goods. Excise duty shown under Note 23 - Other Expenses represents difference in amount of excise duty on closing stock and opening stock of finished goods.

11. Salaries and Wages includes Rs. 44 51 709 (Previous year : Rs. Nil) for expenditure on Voluntary Retirement Scheme.

12. No borrowing costs have been capitalised during the year.

13. Legal and Professional Services in Note 23 Ã Other Expenses includes an amount off 5 61 800 (Previous year : Rs. 1 10 300) on account of fees to cost auditors.

14. The Revised Schedule VI has become effective for periods commencing on or after 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped'reclassified wherever necessary to correspond with the current year's classification/disclosure.

Jun 30, 2011

1. (a) Contingent Liabilities:

(i) In respect of Income Tax demands for which the company has preferred appeals with appropriate authorities - Rs.13 42 95 184 (Previous year : Rs.12 99 57 557). The contingent liability is in respect of matters related to: Income tax dispute on inventory write-off, allowability of losses carried forward from merged entities and others.

(ii) In respect of Sales tax matters for which the Company has preferred appeals with appropriate authorities - Rs.22 16 36 473 (Previous year : Rs.22 70 19 399). The contingent liability is in respect of matters related to: non submission of "C" Forms / "F" Forms Rs.19 37 99 184 (Previous year : Rs. 18 21 19 292) and Interest demand on VAT rate difference Rs.8 831 (Previous year : Rs.56 85 537) and others Rs.2 78 28 458 (Previous year : Rs.3 92 14 570).

(iii) In respect of Excise and Customs matters for which the company has preferred appeals with appropriate authorities - Rs. 1 04 98 83 545 (Previous year :Rs. 1 92 44 66 782). The contingent liabilities are in respect of denial of excise duty benefits at excise exempt location Rs.51 15 19 503 (Previous year : Rs.1 51 26 75 466), denial of Cenvat credit Rs.35 07 41 809 (Previous year : Rs.22 34 04 285), Customs valuation disputes Rs. 15 28 06 226 (Previous year :Rs. 15 28 06 226) and others Rs.3 48 16 007 (Previous year : Rs.3 55 80 805).

(iv) In respect of counter guarantees given to bank against guarantees given by bank - Rs. 11 99 29 266 (Previous year : Rs.6 86 85 067). At the request of the Company, its banks have issued guarantees in the event of the Company failing to fulfil its performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

(v) In respect of other claims - Rs.2 00 31 519 (Previous year : Rs. 1 53 00 000).

The Company is a party to various legal proceedings in the normal course of business. The Company does not expect the outcome of these proceedings to have a material adverse effect on the Company's financial conditions, results of operations or cash flows.

(vi) In respect of Demand raised by Delhi Development Authority towards interest on belated payment of Unearned Increase in respect of leasehold land charges Rs.3 94 57 027 (Previous year : Rs.3 94 57 027).

(b) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs.61 02 977 (Previous year : Rs.5 92 63 288).

2. As informed in the last Financial Statements, the Company had filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing / repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order in favour of your company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal with the Hon'ble Supreme Court of India against the said order of the High Court. The company has as a matter of prudence, created a Contingency Reserve of Rs.30 00 00 000 (Previous year : Rs.21 00 00 000) by way of appropriation of profits to the extent of excise duty payable on despatches made from the Baddi plant. Accordingly during the current year profit of Rs.9 00 00 000 (Previous year : Rs.6 00 00 000) have been appropriated. These Reserves will be reviewed as and when this litigation is finally decided.

3. Common service expenses paid/recovered include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter and Gamble Hygiene and Healthcare Limited and Procter and Gamble Home Products Limited.

4. The Company has taken on lease guesthouses for accommodation of employees and godowns for storage of inventories, with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. Lease payments amounting to Rs. 1 48 96 204 (Previous year :Rs. 1 90 69 601) have been charged to the Profit and Loss Account for the year. There are no 'Non-cancellable' leases.

30th June 2009. Accordingly, additional commission of Rs.20 00 000 was paid during the previous year. Further w.e.f. 1st July 2009, the commission of Mr. S. K. Poddar is Rs. 1 00 00 000 per annum.

The commission to Non-Executive Directors of Rs. 1 60 00 000 paid during the year is in excess of limits specified in Section 309 (4) of the Companies Act, 1956 by Rs.21 40 965. The said excess amount of Rs.21 40 965 is considered as an advance held under trust for the company by the respective non-executive directors (Refer note 13(b) below). The company is seeking the approval of the shareholders and of the Central Government to enable the non-executive Directors to retain the amounts in excess of the limit of 1%.

II. Defined Benefit Plans

(a) Gratuity Fund (Funded Scheme): Gratuity is payable to all eligible employees of the Company on Superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Act or Company's scheme whichever is more beneficial. Benefits would be paid at the time of separation based on the last drawn base salary.

(b) Providend Fund (Funded Scheme): Provident Fund for all permanent employees is administered through a trust. The Provident Fund is administered by trustees of an independently constituted common trust recognised by the Income Tax authorities where two other group Companies are also participants. Periodic contributions to the Fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

(c) Post Retirement Medical Benefit (PRMB) (Non-funded Scheme): Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

(d) Compensated absences for Bhiwadi Plant employees (Non-funded Scheme): Eligible employees can carry forward and encash leave as per Company policy.

(E) Category of Plan Assets

The Company's Plan Assets in respect of Gratuity, alongwith two other group companies, are funded through the group scheme of the Life Insurance Corporation of India.

9. Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:

(a) There were no amounts due and outstanding to suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006 as at the end of the current year and previous year on account of Principal and Interest.

(b) No interest was paid during the year and in the previous period.

(c) No interest is payable at the end of the current accounting year and at the end of the previous period other than interest under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the current accounting year and at the end of the previous period.

The above information and that given in Schedule 10 "Current Liabilities" regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(b) Directors Loan/Advances

Loans and advances include

- Housing Loans to the directors amounting to Rs.Nil (Previous year : Rs.12 58 132).

The maximum balance outstanding during the year amounted to Rs. 12 58 132 (Previous year : Rs.23 72 153).

- Advances to non-executive directors' amounting to Rs.21 40 965 (Previous year : Rs.Nil)

The maximum balance outstanding during the year amounted to Rs.21 40 965 (Previous year : Rs. Nil).

14. Related Party Disclosures:

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holding BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

(a) Parties where control exists:

The Procter & Gamble Company, USA - Ultimate Holding Company The Procter & Gamble India Holdings B.V. - Holding Company

(b) Other related parties with whom transactions have taken place during the year

(i) Fellow Subsidiaries:

Wella India Haircosmetics Private Limited (Formerly

known as Gillette Group India Private Limited)

Gillette Diversified Operations Private Limited

Gillette Products Private Limited

Mining Consultants (India) Private Limited

Nexus Mercantile Private Limited

Gillette UK Limited

Procter & Gamble Trading (Thailand) Ltd.

Gillette Shanghai Limited

The Procter & Gamble Distributing LLC

Procter & Gamble International Operations SA SG Branch (Formerly known as Procter & Gamble International Operations Pte. Ltd.)

Procter & Gamble Lanka Private Limited

Procter & Gamble Australia Pty Ltd.

Procter & Gamble Distributing (Philipines) Inc.

Procter & Gamble US Business Services Co.

P&G Ceemea

Procter & Gamble Home Products Limited

Procter & Gamble Hygiene & Healthcare Limited

The Gillette Company, USA

Procter & Gamble International Operations SA

Procter & Gamble DO Brasil SA

P&G Europe S.A., SG Branch (Formerly known as

Procter & Gamble Asia Pte. Ltd.)

P&G Int'L Ops SA-ROHQ (Formerly known as

Procter & Gamble Asia Pte. Ltd. (MROH))

Procter & Gamble Bangladesh Pvt. Ltd.

(ii) Investing company in respect of which the Company is an associate:

# Also being a fellow subsidiary Company

Wella India Haircosmetics Private Limited ("Wella")

(Formerly known as Gillette Group India Private Limited (GGIPL)) #

(iii) Key Management Personnel

Mr. Shantanu Khosla Managing Director

Mr. Subhash Bansal (till May 31, 2011) Whole-time Executive Director

All the employees of the Company including its Managing Director are given the right to purchase shares of the ultimate holding company - The Procter & Gamble Company, USA under its Employees Stock Option Plan.

Under the above plan, Mr. Subhash Bansal has been granted the right to purchase Nil shares (Previous year : 2600 shares) during the year.

15. Global Employee Stock Ownership Plan (Stocks of the Parent Company)

The Gillette Company, USA (TGC) had a "Global Employee Stock Ownership Plan" (employee share purchase plan) whereby all permanent employees of the Company had been given a right to purchase shares of TGC.

Every employee who opted for the scheme contributed up to a specified percentage (upto 10%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee's contribution (restricted to 1% of gross salary). Such contribution is charged to staff cost.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA.

The shares of TGC (till 30 September 2005)/The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase.

During the year 2 457.29 shares (Previous year : 2 161.60 shares) were purchased by employees at weighted average fair value of Rs.2 841.87 (Previous year : Rs.2 778.56) per share.

The Company's contribution during the year on such purchase of shares amounting to Rs.21 22 809 (Previous year : Rs. 17 93 395) has been charged under Payment to and Provisions for employees under Schedule 14.

16. Employees Stock Options Plan (Stocks of the Parent Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby employees of the Company covered by the plan were granted an option to purchase shares of the Ultimate Holding Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company.

The shares of the Gillette Company (till September 30, 2005)/The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years/5 years and have a 10 years life cycle.

Stock compensation expenses of Rs.6 63 55 981 (Previous year : Rs.66 56 778) has been charged under Payment to and Provisions for employees under Schedule 14.

18. Excise duty deducted from turnover represents amount of excise duty collected by the company on sale of goods. Excise duty shown under Schedule 15 - operating and other expenses represents difference in amount of excise duty on closing stock and opening stock of finished goods.

19. Salaries, wages and bonus under Schedule 15 includes Rs.Nil (Previous year : Rs.1 32 58 358) for expenditure on Voluntary Retirement Scheme.

20. Professional fees in Schedule 15 (Operating and other expenses) includes an amount of Rs. 1 10 300 (Previous year: Rs.1 10 300) on account of fees to Cost Auditors.

21. No borrowing costs have been capitalised during the year.

22. Previous year's figures have been rearranged/regrouped wherever necessary.

Jun 30, 2010

1. (a) Contingent Liabilities:

(i) In respect of Income Tax demands for which the company has preferred appeals with appropriate authorities - Rs. 12 99 57 557 (Previous year : Rs.11 21 29 632). The contingent liability is in respect of matters related to Income tax dispute on inventory write-off, allowability of losses carried forward from merged entities and others.

(ii) In respect of Sales tax matters for which the company has preferred appeals with appropriate authorities - Rs.22 70 19 399 (Previous year : Rs.13 50 65 417). The contingent liability is in respect of matters related to: non-submission of "C" Forms/"F" Forms Rs.18 21 19 292 (Previous year : Rs.12 85 81 880) and Interest demand on VAT rate difference Rs.56 85 537 (Previous year : Rs.56 85 537) and others Rs. 3 92 14 570 (Previous year : Rs.7 98 000).

(iii) In respect of Excise and Customs matters for which the company has preferred appeals with appropriate authorities - Rs.1 92 44 66 782 (Previous year : Rs.1 67 99 51 934). The contingent liabilities are in respect of denial of excise duty benefits at excise exempt location Rs. 1 51 26 75 466 (Previous year: Rs. 1 26 76 87 071); denial of Cenvat credit Rs.22 34 04 285 (Previous year:Rs.22 34 04 285), Customs valuation disputes Rs. 15 28 06 226 (Previous year : Rs. 15 28 06 226) and others Rs.3 55 80 805 (Previous year : Rs.3 60 54 352).

(iv) In respect of counter guarantees given to bank against guarantees given by bank - Rs.6 86 85 067 (Previous year : Rs.7 10 73 988). At the request of the Company, its banks have issued guarantees in the event of the Company failing to fulfil its performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

(v) In respect of other claims - Rs. 1 53 00 000 (Previous year : Rs. 1 53 00 000). The Company is a party to various legal proceedings in the normal course of business. The Company does not expect the outcome of these proceedings to have a material adverse effect on the Companys financial conditions, results of operations or cash flows.

(vi) In respect of Demand raised by Delhi Development Authority towards interest on belated payment of Unearned Increase in respect of leasehold land charges Rs.3 94 57 027 (Previous year : Rs.Nil).

(b) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs.5 92 63 288 (Previous year : Rs.51 72 799).

2. As informed in the last Financial Statements, the Company had filed a writ petition in the High Court of Himachal Pradesh at Shimla challenging the premature withdrawal of Excise duty exemption for packing/repacking activities at its Baddi Manufacturing Facility. The High Court has since passed an order in favour of your company and has struck down the notification withdrawing the excise exemption. The Excise department has preferred an appeal with the Honble Supreme Court of India against the said order of the High Court. The company has as a matter of prudence, created a Contingency Reserve of Rs.6 00 00 000 (Previous year : Rs.9 00 00 000) by way of appropriation of profits to the extent of excise duty payable on despatches made from the Baddi plant. These Reserves will be reviewed as and when this litigation is finally decided.

3. During the previous year the Company has changed the method of valuation of raw materials (excluding bulk raw materials), stores and spare parts and traded finished goods from First In First Out basis to Weighted Average basis. As a result of the said change, the inventory as at June 30, 2009 was higher by Rs.22 50 927 and consequently the consumption was lower by Rs.22 50 927 and profits for that year were higher by Rs.22 50 927.

4. Common service expenses paid/recovered include payment/recoveries on account of finance, personnel, secretarial, administration and planning services rendered under common services agreement of the Company with Procter and Gamble Hygiene and Health Care Limited and Procter and Gamble Home Products Limited.

5. The Company has taken on lease for guesthouses, accommodation for employees and godowns for storage of inventories, with an option of renewal at the end of the lease term and escalation clause in some of the cases. These leases can be terminated with a prior notice as per terms and conditions of the respective lease agreements. Lease payments amounting to Rs. 1 90 69 601 (Previous year : Rs. 1 25 14 117) have been charged to the Profit and Loss Account for the year. There are no Non-cancellable leases.

6. Employee Benefits

The Company has classified the various benefits provided to employees as under:

II. Defined Benefit Plans

(a) Gratuity Fund (Funded Scheme): Gratuity is payable to all eligible employees of the Company on Superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Act or Companys scheme whichever is more beneficial. Benefits would be paid at the time of separation based on the last drawn base salary.

(b) Provident Fund (Funded Scheme): Provident Fund for all permanent employees is administered through a trust. The Provident Fund is administered by trustees of an independently constituted common trust recognised by the Income Tax authorities where two other group Companies are also participants. Periodic contributions to the Fund are charged to revenue. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and notified interest rate by the Government. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.

(c) Post Retirement Medical Benefit (PRMB) (Non-funded Scheme): Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade at the time of retirement. Employees separated from the Company as part of early separation scheme are also covered under the scheme. The liability for post retirement medical scheme is based on an independent actuarial valuation.

(d) Compensated absences for Bhiwadi Plant employees (Non-funded Scheme): Eligible employees can carry forward and encash leave as per Company policy.

7. Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:

(a) There were no amounts due and outstanding to suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006 as at the end of the current year and previous year on account of Principal and Interest.

(b) No interest was paid during the year and in the previous period.

(c) No interest is payable at the end of the current accounting year and at the end of the previous period other than interest under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the current accounting year and at the end of the previous period.

The above information and that given in Schedule 10 "Current Liabilities" regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

8. Related Party Disclosures:

The Group Companies of The Procter & Gamble Company, USA include, among others, Gillette Worldwide Holding LLC; Procter & Gamble India Holding BV; Procter & Gamble Iron Horse Holding BV; Procter & Gamble Eastern Europe LLC; Procter & Gamble Nordic LLC; Procter & Gamble Global Holding Limited; Procter & Gamble Luxembourg Global SARL; Procter & Gamble International SARL; Procter & Gamble India Holdings Inc.; Procter & Gamble International Operations, SA; Gillette Group (Europe) Holdings, BV; Procter & Gamble Canada Holding BV; Procter & Gamble Overseas Canada, BV.

(a) Parties where control exists:

The Procter & Gamble India Holdings B.V. - Holding Company The Procter & Gamble Company, USA - Ultimate Holding Company

9. Global Employee Stock Ownership Plan (Stocks of the Parent Company)

The Gillette Company, USA (TGC) had a "Global Employee Stock Ownership Plan" (employee share purchase plan) whereby all permanent employees of the Company had been given a right to purchase shares of TGC.

Every employee who opted for the scheme contributed up to a specified percentage (upto 10%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employees contribution (restricted to 1% of gross salary). Such contribution is charged to staff cost.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA. The shares of TGC (till 30 September 2005)/The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year shares 2 161.60 shares (Previous year : 2 063 shares) were purchased by employees at weighted average fair value of Rs.2 778.56 (Previous year : Rs.2 799) per share.

The Companys contribution during the year on such purchase of shares amounting to Rs. 17 93 395 (Previous year : Rs.13 74 350) has been charged to the Profit and Loss Account.

10. Employees Stock Options Plan (Stocks of the Parent Company)

The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby employees of the Company covered by the plan were granted an option to purchase shares of the Ultimate Holding Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time.

Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company.

The shares of the Gillette Company (till September 30, 2005)/The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with Exercise price equal to the market price of the underlying shares on the date of the grant. Accordingly no stock compensation expenses have been incurred by the Company during the period. The Grants issued are vested after 3 years/5 years and have a 10 years life cycle.

Notes on Segment Information:

(1) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisation structure as well as the differential risks and returns of these segments. Business segments have been considered as primary segments.

(2) Segment Revenue, Results and Capital Employed figures include the respective amounts identifiable to each of the segments. Unallocable income/expenses include income/expenses incurred at a corporate level which relate to the company as a whole. Unallocable income/expenses mainly includes income from investment of surplus funds and exchange gain/(loss).

(3) Details of type of products included in each segment: Grooming Blades, Razors and Toiletries Portable Power Batteries

Oral Care Tooth brushes, and Oral Care products

(4) Unallocable Corporate assets include Cash and Bank balances, Debtors and Loans and Advances.

(5) Unallocable Corporate liabilities include Creditors and Provisions.

11. Excise duty deducted from turnover represents amount of excise duty collected by the company on sale of goods. Excise duty shown under Schedule 15 - operation and other expenses represents difference in amount of excise duty on closing stock and opening stock of finished goods.

12. Salaries, wages and bonus under Schedule 15 includes Rs.1 32 58 358 (Previous year : Rs.Nil) for expenditure on Voluntary Retirement Scheme.

13. Professional fees in Schedule 15 (Operating and other expenses) includes an amount ofRs. 1 10 300 (Previous year : Rs. 1 10 300) on account of fees to Cost Auditors.

14. No borrowing costs have been capitalised during the year.

15. Previous years figures have been rearranged/regrouped wherever necessary.

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