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Directors Report of Procter & Gamble Hygiene & Healthcare Ltd.

Jun 30, 2015

The Directors have the pleasure of presenting the 51st Annual Report and the Audited Accounts of the Company for the Financial Year ended June 30, 2015.

FINANCIAL RESULTS

(Figures in Rs. crores)

2014-15 2013-14

Sales including Excise 2358 2064

Net Sales (less excise duty) 2332 2047

Profit before tax 501 460

Profit after tax 346 302

Proposed Dividend plus tax thereon 118 104

Transfer to General Reserve 35 30

Balance carried forward 854 663

DIVIDEND

The Directors are pleased to recommend a dividend of Rs. 30.25 per Equity Share of Rs. 10 each for the Financial Year ended June 30, 2015.

BUSINESS PERFORMANCE

Your Company delivered another year of strong performance in the Financial Year 2014-15, with double digit growth on both top and bottom line in a competitive market environment. This was achieved behind superior value propositions and strength of product portfolio.

Sales for the Financial Year increased by 14% to Rs. 2,332 crores as against Rs. 2,047 crores during the previous Financial Year. Earnings after tax increased by 15% to Rs. 346 crores as against Rs. 302 crores during the previous Financial Year behind continued focus on productivity and cost efficiency.

Feminine Hygiene Business

Feminine Hygiene business recorded the 12th consecutive year of double-digit growth. This business has been a growth engine for your Company, with all the variants of Whisper sanitary napkins posting strong growth. Whisper continues to be the market leader despite stiff competition from other category players.

During the Financial Year under review, a number of strategic initiatives were designed to meet the consumers' needs across segments. The top-tier consumers were delighted by our Whisper Ultra Clean product, with the promise of superior benefits like dual protection (wetness and odour) and long-lasting protection. Continuing our strong focus on offering products serving the needs of our consumers, your Company also drove the Whisper Ultra Nights line-up providing protection that lasts all night. On Whisper Choice, your Company continues to drive increased usage of sanitary napkins particularly among non-users and increased availability. Your Company also drove the innovative "thin" product form within the existing mid-tier consumers and non-users in the form of Whisper Choice Ultra.

Your Company also continued its disproportionate focus on the 'Point of Market' Entry consumer. The Whisper school program reached nearly 4 million menstruating girls across private and government schools, educating them about sanitary hygiene and its importance. Not only did the program reach out to more potential consumers, but it also increased its depth by reaching out to smaller towns.

Health Care Business

The Company's Health Care sales posted double digit growth again this Financial Year behind the strength of its strong portfolio, which includes Vicks VapoRub, Vicks Cough Drops, Vicks Action 500 and Vicks Inhaler. The growth was driven by combination of product initiatives and increased investment behind proven equity advertising. Vicks VapoRub had a record year posting the highest ever market share. Vicks Action 500 business was the fastest growing in the Vicks franchise. Vicks will continue to innovate to ensure it stays the most trusted cough and cold care solution in India.

Overall, the Company continued to focus on driving consumer meaningful innovations backed by distribution expansion and strong advertising support thereby delivering consistent growth. Earnings have also benefited from focus on mix, pricing and productivity.

Cash generation continued to be strong, arising from significant improvements in the business performance, efficiencies cost savings across the organization and an efficient collection system. Your Company managed investments prudently by deployment of the surplus funds after ensuring that such investments satisfy the Company's criteria of safety and security.

Financial Year 2014-15 on Old Spice was a year of consolidating the gains made in Financial Year 2013-14. Old Spice continues to grow value sales behind investments on core business drivers, namely, product upgrades and new premium fragrance launches, advertising to build consumer awareness, scaling up distribution and presence in stores.

CORPORATE SOCIAL RESPONSIBILITY ('CSR')

The only way to build a sustainable business is to improve lives

At P&G, sustainability means, making every day better for people through how we innovate and how we act. As one of the world's largest consumer products company, we have both a responsibility and an opportunity to do the right thing and lead change. P&G's sustainability objective is to create long-term value for our consumers and shareholders by growing our brands and operations responsibly to conserve resources and improve life in the communities we impact across the world. This strategy has inspired an enduring CSR strategy supported by two pillars - P&G Shiksha and Timely Disaster Relief. While P&G Shiksha provides children from underprivileged backgrounds with an access to a holistic education, P&G's disaster relief activities aim to rehabilitate and empower the victims of natural disasters by providing them with daily essential commodities and safe drinking water. P&G's signature corporate sustainability program P&G Shiksha has till date built and supported over 450 ( 120 since last year) schools across the country that will impact the lives of over 800,000 ( 200,000 since last year) children over a period of time, in partnership with a number of NGOs like - Round Table India, Save the Children, Pratham, Army Wives Welfare Association, Navy Wives Welfare Association, Air Force Wives Welfare Association amongst others. These partners serve as specialists, lending their expertise to particular aspects of the education system. The NGO Round Table India is dedicated towards constructing educational infrastructure and supporting schools across India. The NGO Save the Children focuses on girl child's education by aiding government funded programs like the Kasturba Gandhi Balika Vidhyalayas. Pratham has special expertise in remedial learning to help bring children up to speed with the learning levels in their curriculum. Similarly, the NGOs Army Wives Welfare Association and Navy Wives Welfare Association are experts in serving the educational needs of disabled children.

Since its commencement in 2005, P&G Shiksha has also empowered consumers to contribute towards the education of underprivileged children by making conscious brand choices, which has enabled P&G to share a part of the sales towards this movement. P&G Shiksha has till date made a cumulative donation of over Rs. 40 crores towards building new schools, providing critical infrastructural amenities at existing schools or reviving non-operational government schools.

During the Financial Year, Save the Children in partnership with P&G Shiksha has continued to empower girls through improving learning effectiveness and has also expanded its impact. Thirteen Kasturba Gandhi Balika Vidyalayas (KGBV) and eighteen primary and middle schools were supported through the provision of sports kits and laboratory equipment. Initiatives to bring a positive change in overall teaching environment have led to teachers practicing pedagogical methods (such as promoting an effective use of the library facility, project work, story building as well as an overall better planning and execution of multi-level teaching).

In partnership with Save The Children, we work on education of girl children in KGBV schools in Rajasthan and Jharkhand

P&G continued to impact the communities around its plants in a holistic manner throughout the Financial Year. At Goa, in association with Matruchhaya, a local public charitable trust, P&G is providing educational and infrastructural support to a school for the orphaned, destitute and abandoned children. The P&G Baddi plant continued its association with Himachal Pradesh Voluntary Health Association with Lodhimajra Village School in order to make infrastructure additions to school while organizing health check-ups for the students. In Mandideep, the Company also built on its association with Arushi, a local NGO, to provide infrastructure, nutrition and hygiene support to the Satlapur Government School. P&G Shiksha in the last year enabled the school with nutrition supplement by providing fruits along with mid-day meals, health and eye checkup for students, construction of toilets, construction of a boundary wall and refurbishment of the roof.

P&G partnered with Pratham Education Foundation, a leading NGO in India in the educational space to foray into remedial learning and early childhood education thereby increasing our focus on learning outcomes via improving learning effectiveness. P&G Shiksha is partnering with Pratham's Read India initiative that aims to bridge the existing gap between current and existing learning levels on scale. The methodology combines reading, speaking, practical application and writing, in a variety of ways, to enhance learning.

P&G has also identified a need for early childhood education to set children up for success when they begin primary school. For this, P&G is partnering with Pratham's interventions to ensure that children receive support to facilitate holistic social and cognitive development. Through Pratham's partnership with the Government (ICDS), P&G Shiksha will impact early childhood learning in Anganwadi centers and Pratham's Balwadi centers.

P&G continued its efforts to provide timely aid and relief to families affected by natural disasters. P&G sent out relief aid to over 5,000 families affected by the J&K floods comprising of P&G products. During the Nepal Earthquake, P&G also collaborated with the Indian Government and addressed the dire need for sanitary napkins by sending out 20,000 Whisper packs to Nepal through National Disaster Relief Authority (NDMA) to the affected families. At P&G, Corporate Social Responsibility has and will remain an important component of our ability to improve consumers' lives and to create value for our Members.

Your Company has constituted a Corporate Social Responsibility Committee. The composition and terms of reference of the Corporate Social Responsibility Committee are provided in the Corporate Governance Report annexed to this report.

Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure I to this Report.

ENVIRONMENTAL SUSTAINABILITY AND CONSERVATION OF ENERGY

Environmental sustainability is embedded in our Purpose, Values, Principles, and our business. In order to improve lives, now and for generations to come, we ensure that our products, packaging and operations are safe for employees, consumers and the environment. Your Company ensures this with a focus on technologies, processes and improvements that matter for the environment.

At P&G, sustainability inspires and guides everything we do. Moreover, we ensure environmental friendly practices at our sites. These include reduction in power consumption, optimal water consumption and eliminating excess use of paper.

Your Company's head office at Mumbai reduced its annual energy consumption by over 39.2% over the last 11 years, saving over 2214 gigajoules of energy.

During the Financial Year, your Company's plant in Goa has reduced diesel generation utilization by 5% versus last year for plant operations, resulting in reduction of diesel consumption and reduced carbon footprint by 90% versus year ago.

Goa plant has introduced LED Lights to almost 50% of the operations floor, variable frequency drives to high power consumption blowers and all air handling units in utilities and pumps. Analysis of air leakages across operations and timely corrections, LED Lighting to 60% of street lightings, cool light energy savers to plant lighting help to stable voltage control and reduction of failures and energy consumptions.

We have undertaken capital investment of approx. Rs. 1.5 crores towards installation of LED lights and variable frequency drives at our plants which will help in energy conservation.

TECHNOLOGY ABSORPTION

i. Efforts made towards technology absorption:

Continued implementation of quality control/quality assurance procedures of products and processes were successfully adapted on commercial scale to utilize local raw materials and machinery; technical services for reliability, quality, cost savings and technology transfer from overseas.

ii. Benefits derived like product improvement, cost reduction, product development or import substitution:

All the above efforts resulted in improving process efficiencies, consistent quality of our products, introduction of new products and import substitution and successful absorption of technology.

iii. Imported technology (Imported during the last three years reckoned from the beginning of the Financial Year):-

The Company has the advantage of availing advanced technology and continuous upgradation thereof from The Procter & Gamble Company, USA and its subsidiaries.

This is an unmatched competitive advantage that helps the Company deliver strong business results.

In the Financial Year 2013-14, the Company had imported new converting machine & packing machine. The new converting machine introduction helped to get higher capacity & also a new topsheet introduction for better performance. The introduction of online packing machine has improved the packaging quality & has led to reduction in packing cost.

iv. Expenditure incurred on Research and Development:

Rs. Lakhs

2014-15 2013-14

a Capital - -

b Recurring 5.43 160.26

c Total 5.43 160.26

FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of foreign exchange earned/ utilized during the Financial Year are given in Note No. 30 & 31 respectively forming part of the Financial Statements.

RELATED PARTY TRANSACTIONS

Your Company has formulated a policy on related party transactions which is also available on Company's website at http://www.pg.com/ enJN/invest/pghh/corporate_governance/ policies.shtml/. This policy deals with the review and approval of related party transactions. All related party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at arm's length. All related party transactions are subjected to independent review by external chartered accountancy firm to confirm compliance with the requirements under the Companies Act, 2013 and the Listing Agreement.

All related party transactions entered during the Financial Year were in ordinary course of the business and on arm's length basis. No material related party transactions were entered during the Financial Year by your Company. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company.

PUBLIC DEPOSITS

Your Company has not accepted any Public Deposits under Chapter V of Companies Act, 2013, during this Financial Year.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

In line with P&G's Worldwide Business Conduct Manual, your Company treats all its employees and business partners with dignity and respect. Your Company is committed to provide a harassment-free environment, in which all have an opportunity to contribute at their highest potential. As a part of our commitment to providing a safe work environment, we never engage in or tolerate any form of harassment

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made thereunder, your Company has constituted Internal Complaints Committees (ICC). During the Financial Year, no complaints with allegations of sexual harassment were filed with the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Sections 134 (3) (c) of the Companies Act, 2013, with respect to the Directors' Responsibilities Statement, it is hereby confirmed:

i. that in the preparation of the Annual Accounts for the Financial Year ended June 30, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for the Financial Year under review;

iii. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the Directors had prepared the accounts for the Financial Year ended June 30, 2015, on a "going concern" basis;

v. that the Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and

vi. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with the Auditors' Certificate on its compliance is annexed to this report.

LOANS GIVEN DURING THE FINANCIAL YEAR 2014-15

Details of loans given by your Company under Section 186 of the Companies Act, 2013 during the Financial Year 2014-15 are as follows:

Name of Borrowing Company Relation Amount Particulars (Rs. In Crores) of Loan

Prior to October 1, 2014

Wella India Haircosmetics Private Ltd 120.49 Interest rate of 12%

Procter & Gamble Home Products Pvt Ltd 438.20 Interest rate of 12%

Post October 1, 2014 c Fellow

Gillette Diversified Operations Pvt Ltd Subsidiary 13.00 Interest rate of 9.33%

Procter & Gamble Home Products Pvt Ltd 200.00 Interest rate of 9.33%

Wella India Haircosmetics Private Ltd 200.00 Interest rate of 9.33%

Name of Borrowing Company Purpose for which the loans are proposed to be utilized

Prior to October 1, 2004

Wella India Haircosmetics Private Ltd General business purpose

Procter & Gamble Home Products Pvt Ltd General business purpose

Post October 1, 2014

Gillette Diversified Operations Pvt Ltd General business purpose

Procter & Gamble Home Products Pvt Ltd General business purpose

Wella India Haircosmetic Private Ltd General business purpose

MANAGEMENT & PERSONNEL

The strong growth over the past few years demonstrates the core strengths of our employees to stay reality-based and proactively influence the course of business. In a diverse organization & competitive environment, the efforts of our organization, strong capability plans and HR innovation accelerated our growth. Our productivity continues to be best-in-class with major progress in Leadership and Talent Development.

The statement of Disclosure of Remuneration under Section 197 of Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure III to the Report.

The information as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. As per the provisions of first proviso to Section 136(1) of the Act, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS

Mr. Karthik Natarajan has been appointed as an Additional Director of the Company with effect from October 1, 2014 and holds office upto the date of the ensuing 51st Annual General Meeting of the Company. Notice under Section 160 of the Companies Act, 2013 has been received from him proposing his candidature as Director of the Company, liable to retire by rotation.

During the Financial Year, Mr. Pramod Agarwal ceased to be a Director effective from March 31, 2015. Subsequently, he was appointed as an Additional Director of the Company with effect from May 8, 2015 and holds office upto the date of the ensuing 51st Annual General Meeting of the Company. Notice under Section 160 of the Companies Act, 2013 has been received from him proposing his candidature as Director of the Company, liable to retire by rotation.

Mr. Shantanu Khosla ceased to be the Managing Director and Director of the Company effective from June 30, 2015. The Board of Directors place on record its appreciation for his long service and contribution to the Company.

Mr. Al Rajwani was appointed as an Additional Director and Managing Director of the Company effective August 28, 2015, subject to the approval of the Members and the Central Government if applicable. Notice under Section 160 of the Companies Act, 2013 has been received from him proposing his candidature as Director of the Company.

Mr. Shailyamanyu Singh, Director, retires by rotation and, being eligible, offers himself for re-appointment.

The Independent Directors of your Company have given certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

The details of training and familiarization programmes and Annual Board Evaluation process for Directors have been provided under the Corporate Governance Report.

The policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director, and also remuneration for Key Managerial Personnel and other employees forms part of Corporate Governance Report of this Annual Report.

The brief resumes of Directors proposed to be appointed/reappointed at the ensuing 51st Annual General Meeting and the details of the Directorships held by them in other companies are given in the "Corporate Governance" section of the Annual Report.

Appropriate resolutions for the appointment/re- appointment of the aforesaid Directors are being moved at the ensuing 51st Annual General Meeting, which the Board recommends for your approval.

AUDITORS

M/s. Deloitte Haskins & Sells LLP were appointed as Statutory Auditors of your Company at the previous 50th Annual General Meeting held on September 24, 2014, for a term of three consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. Resolution for the said ratification is being moved at the ensuing 51st Annual General Meeting.

The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation or adverse remark given by the Auditors in their Report.

COST AUDITORS

M/s. Ashwin Solanki & Associates, Cost Accountants carried out the cost audit for applicable business during the Financial Year. The Board of Directors has appointed M/s. Ashwin Solanki & Associates, Cost Accountants as Cost Auditors for the Financial Year 2015-16.

SECRETARIAL AUDIT

Secretarial Audit was carried out by M/s. Dholakia & Associates LLP, Company Secretaries for the Financial Year 2014-15. There were no qualifications, reservation or adverse remarks given by Secretarial Auditors of the Company. The Secretarial Audit report is annexed to this report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure II to this Report.

POLICIES

During the Financial Year, your Company has adopted the policies on related party transactions, corporate social responsibility and vigil mechanism, which are available on the website of the Company at http://www.pg.com/enJN/invest/ pghh/corporate_governance/policies.shtml/.

The details of all the policies adopted by the Company are provided in the Corporate Governance Report annexed to this Report.

TRADE RELATIONS

The Directors wish to thank the retailers, wholesalers, distributors, suppliers of goods & services, clearing and forwarding agents and all other business associates and acknowledge their efficiency and continued support in promoting such healthy growth in the Company's business.

ACKNOWLEDGEMENT

We are grateful to the Procter & Gamble Company USA and its subsidiaries for their invaluable support in terms of access to the latest information/knowledge in the field of research & development for products, ingredients and technologies; timely inputs to exceptional marketing strategies; and the goodwill of its world-renowned trademarks and superior brands. We are proud to acknowledge this unstinted association that has vastly benefited the Company.

On behalf of the Board of Directors

Mumbai R. A. Shah

August 28, 2015 Chairman


Jun 30, 2014

Dear Members,

The Directors have the pleasure of presenting the 50th Annual Report and the Audited Accounts of the Company for the Financial Year ended June 30, 2014.

FINANCIAL RESULTS

(Figures in Rs. crores)

2013/14 2012/13 Sales including Excise 2063 1697

Net Sales (less excise duty) 2047 1685

Profit before tax 460 286

Profit after tax 302 203

Proposed Dividend plus tax thereon 104 95

Transfer to General Reserve 30 20

Balance carried forward 663 495

DIVIDEND

The Directors are pleased to recommend a dividend of Rs. 27.5 for each Equity Share of Rs. 10 each for the Financial Year ended June 30, 2014.

BUSINESS PERFORMANCE

Your Company delivered another year of strong performance in the Financial Year 2013-14, despite challenging economic conditions - particularly volatility in the Rupee and inflationary market conditions. By balancing the needs of the consumer, the customer and the Members, we are delighted to report very strong financial results for your Company. Your Company achieved a strong double-digit sales growth during the Financial Year 2013-14. Sales for the Financial Year increased by 22 per cent to Rs. 2,047 crores as against Rs. 1,685 crores during the previous year. Earnings after tax increased by 49 per cent to Rs. 302 crores as against Rs. 203 crores during the previous year.

Feminine Hygiene Business

Feminine Hygiene business recorded the 11th consecutive year of strong double-digit growth. This business has been a growth engine for your Company, with all the variants of Whisper sanitary napkins posting strong growth. Whisper further fortified its market leadership position by achieving it''s highest-ever value share.

During the Financial Year under review, a number of strategic initiatives were designed to meet the consumers'' needs across segments. The top-tier consumers were delighted by our longer length Whisper Ultra product, with the promise of all day long protection. On Whisper Choice, your Company continued its focus on driving increased usage of sanitary napkins particularly among non-users and increased availability. Continuing our relentless focus on superior products for our consumers, your Company also drove the "thin" product form within the existing mid-tier consumers and non-users in the form of Whisper Choice Ultra.

Your Company also continued its disproportionate focus on the Point of Market Entry consumer. The Whisper School program reached nearly 4 million menstruating girls across private and government schools, educating them about sanitary hygiene and its importance. Not only did the program reach out to more potential consumers, but it also increased its depth by reaching out to small towns.

Health Care Business

The Company''s Health Care sales posted a double digit growth again this Financial Year behind the strength of its strong portfolio, which includes Vicks VapoRub, Vicks Cough Drops, Vicks Action 500 and Vicks Inhaler. The growth was driven by combination of product initiatives and increased investment behind proven equity advertising. Vicks VapoRub had a record year posting the highest ever market share. Vicks Inhaler business was the fastest growing in the Vicks franchise. Vicks will continue to innovate to ensure it stays the most trusted cough and cold care solution in India.

Overall, the Company continued to focus on driving consumer meaningful innovations backed by distribution expansion and strong advertising support thereby delivering consistent growth. Earnings have also benefited from focus on mix, pricing and productivity.

Cash generation continued to be strong arising from significant improvements in the business performance, efficiencies and cost savings across the organization and a continued efficient collection system. Your Company managed investments prudently by deployment of the surplus funds after ensuring that such investments satisfy the Company''s criteria of safety and security.

Following the successful integration of Old Spice into your Company, Financial Year 2013-14 was a strong year for the brand, with business results exceeding management expectations. This was behind our strong marketing efforts and investments in advertising and distribution expansion. The marketing campaign has been successful in restaging the brand and has been recognized with multiple external awards over the past year.

We continue with our efforts to grow this brand behind strong innovation, including significant packaging upgrades as well as the launch of new outstanding fragrances.

CORPORATE SOCIAL RESPONSIBILITY

Building business by improving lives

P&G''s continued focus on purpose-inspired growth, drives us to not only serve our consumers with unique and superior product propositions, but also to touch and improve their lives by contributing towards the communities we operate in. This dedicated commitment is the driving force behind our Corporate Social Responsibility initiatives like ''P&G Shiksha'' and ''Project Parivartan''.

Over the past decade, P&G''s sustainability mantra ''to touch and improve the lives of consumers, now and for generations to come'' has inspired an enduring CSR strategy supported by three pillars - P&G Shiksha, The WhisperSchool program (Education) & Project Parivartan (Transformation) and Timely Disaster Relief. While P&G Shiksha and Project Parivartan provide children from underprivileged backgrounds with access to basics like health and education, P&G''s disaster relief activities aim to rehabilitate and empower the victims of natural disasters by providing them with daily essential commodities and safe drinking water.

P&G''s Project Parivartan continued its efforts in providing essential menstrual health and hygiene education to girl children across the country. Over the past year alone, the program reached out to over 3.5 million girls in schools across the country.

P&G''s signature corporate sustainability program P&G Shiksha has till date built and supported over 330 ( 110 since last year) schools across the country that will impact the lives of over 600,000 ( 180,000 since last year) children, in partnership with a number of NGOs like - Army Wives Welfare Association, Navy Wives Welfare Association, Round Table India, Save the Children, amongst others. These partners serve as specialists, lending their expertise to particular aspects of the education system. The NGO Round Table India for example is dedicated towards constructing educational infrastructure and supporting schools across India. The NGO Save the Children focuses on girl child''s education by aiding government funded programs like the Kasturba Gandhi Balika Vidhyalayas. Similarly, the NGOs Army Wives Welfare Association and Navy Wives Welfare Association are experts in serving the educational needs of disabled children.

Since its commencement in 2005, P&G Shiksha has empowered consumers to contribute towards the education of underprivileged children by exercising conscious brand choices, which has enabled P&G to share a part of thesales towards this movement. P&G Shiksha has till date made a cumulative donation of over Rs. 32 crores towards building new schools, providing critical infrastructural amenities at existing schools or reviving non-operational government schools.

In the course of the past year, Save the Children in partnership with P&G Shiksha has expanded its impact. Six Kasturba Gandhi Balika Vidyalayas (KGBV) and fourteen primary and middle schools were supported through the provision of sports kits and laboratory equipment, which has enhanced the self-confidence and the learning abilities of the girl children. Additionally through this partnership, Baal Sansads and School Management Committees (SMCs) have also been strengthened through capacity building of its members, to monitor the activities of schools for ensuring quality education. These initiatives have thus resulted in a positive change in the overall environment of KGBVs, for example, teachers have started taking initiatives in practicing innovative pedagogical methods (such as promoting an effective use of the library facility, project work, story building as well as an overall better planning and execution of multi-level teaching).

P&G continues its association with a local school (adopted under the P&G Shiksha program) to promote the education of girl children in Mewat. The students are provided holistic support in the form of uniforms, library, meals, infrastructure, recreational activities & study tours. This year, the initiative received a prestigious recognition with the Bhamashah award by the Rajasthan Government for outstanding contribution in promoting education and creating a transformational change in the lives of young girl children. Similarly, at Goa, in association with Matruchhaya, a local public charitable trust, P&G is providing educational and infrastructural support to a school for the orphaned, destitute and abandoned children. Going beyond the tangible, P&G has also lent assistance in organizing a Fun Day for the children with volunteers (employees and family members) which saw the donation of important amenities and equipment to the school. These activities under the P&G Shiksha program have exemplified its motto and have further strengthened our resolve of touching and improving lives.

The Baddi plant organized the ''World Environment Day'' event in Lodhimajra Village School in order to create awareness amongst school children on merits of a clean and healthy environment for the overall community.

Under the theme and "Best Out of Waste", the event brought together school children, who participated in poster design, slogan writing competitions and making of useful items from Waste Material which was meant to create awareness on the importance of a safe and healthy environment.

The Baddi plant additionally organized a "Blood Donation Camp" at the site in collaborationwith the Rotary & Blood Bank Society Resource Centre, Chandigarh. This first time event was a huge success with 83 volunteers donating blood during the camp. The plant also organized a "Health Check-up Camp" at the Government High School Lodhimajra in order to create awareness and improve the personal health of the school students.

P&G, over the past year, continued its efforts to provide timely aid and relief to families affected by natural disasters. Over 15,800 families affected by the Uttarakhand Floods and the Odisha Cyclone, received relief aid in the form of hygiene kits comprising of P&G products including: Whisper, Tide, Pantene and Oral-B toothbrushes as well as Children''s Safe Drinking Water sachets.

P&G''s conscious commitment towards the pursuit of sustainable development programs has empowered us to truly make a substantial impact on the lives of the communities around us while simultaneously providing them with superior product propositions. This unequivocal principle has fueled our social responsibility programs aimed at improving lives and also lends inspiration to our efforts on environmental sustainability and economic accountability. At P&G, Corporate Social Responsibility has and will remain an important component of our ability to improve consumers'' lives and to create value for our shareholders.

ENVIRONMENTAL SUSTAINABILITY

Environmental sustainability is embedded in our Purpose, Values, Principles, and our business. In order to improve lives, now and for generations to come, we ensure that our products, packaging and operations are safe for employees, consumers and the environment. We ensure this with a focus on technologies, processes and improvements that matter for the environment.

Our Company''s Head Office at Mumbai reduced its annual energy consumption by over 37.9% over the last 10 years, saving over 2159 gigajoules of energy. In the last one year, our plant in Goa has reduced Diesel Generation Utilization by 19% for Plant Operations, resulting is reduction of Diesel consumption and reduced Carbon footprint by 40%.

At P&G, sustainability inspires and guides everything we do. Moreover, we ensure environmental friendly practices at our sites. These include reduction in power consumption, optimal water consumption and eliminating excess use of paper.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibilities Statement, it is hereby confirmed:

i. that in the preparation of the Annual Accounts for the Financial Year ended June 30, 2014, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for the Financial Year under review;

iii. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the Directors had prepared the accounts for the Financial Year ended June 30, 2014, on a "going concern" basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with the Auditors'' Certificate on its compliance is annexed to this Report.

MANAGEMENT & PERSONNEL

The Company operates in a highly competitive environment vis-a-vis attracting the best talent for its operations and therefore the human resources management function has assumed vital importance in the Company. The Company focuses on attracting, motivating and retaining the best talent. Its people systems like recruiting, training, performance management and talent development are robust and competitive. As we have been growing we are putting in place new HR programs to ensure that the organization is geared up to deliver the future.

The information as per Section 217(2A) of the Companies Act, 1956 (''Act''), read with the Companies (Particulars of Employees) Rules 1975 forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Members of the Company excluding the statement of particulars of employees under Section 217(2A) of the Act. Any Member interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of the Company.

DIRECTORS

Ms. Sonali Dhawan and Mr. Shailyamanyu Singh have been appointed as Additional Directors of the Company with effect from May 7, 2014 and March 15, 2014 respectively and hold office upto the date of the ensuing 50th Annual General Meeting of the Company. Notices under Section 160 of the Companies Act, 2013 have been received from them proposing their respective candidatures as Directors of the Company, liable to retire by rotation.

Mr. Pramod Agarwal, Director, retires by rotation and, being eligible, offers himself for re- appointment.

In terms of Section 149 of the Companies Act, 2013, an Independent Director is required to be appointed for a tenure of five years at a time and shall not be liable to retire by rotation. Accordingly, Mr. R. A. Shah, Mr. B. S. Mehta and Mr. A. K. Gupta meet the criteria of independence and your Board recommends their appointment as Non-Executive Independent Directors for a period of five years with effect from September 24, 2014, not being liable to retire by rotation. Resolutions in this regard forms part of the Notice of the ensuing 50th Annual General Meeting.

The brief resumes of Directors proposed to be appointed/reappointed at the ensuing 50th Annual General Meeting and the details of the Directorships held by them in other companies are given in the "Corporate Governance" section of the Annual Report.

Appropriate resolutions for the appointment/ re-appointment of the aforesaid Directors are being moved at the ensuing 50th Annual General Meeting, which the Board recommends for your approval.

AUDITORS

The Auditors, M/s. Deloitte Haskins & Sells LLP, Mumbai, Chartered Accountants (Firm Registration No. 117366W/W-100018) retire at the ensuing 50th Annual General Meeting. In terms of the Companies Act, 2013, they are eligible for appointment for three Financial Years and hence they offer themselves for re-appointment upto the conclusion of 53rd Annual General Meeting.

COST AUDITORS

Your Company has re-appointed M/s. Ashwin Solanki & Associates, Cost Accountants, to conduct the cost audit for the Financial Year 2014-15.

CONSERVATION OF ENERGY ETC. INFORMATION

The information, in accordance with the provisions of Section 217(i)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgoings, are attached as Annexure to this Report.

TRADE RELATIONS

The Directors wish to thank the Retailers, Wholesalers, Distributors, Suppliers of Goods & Services, Clearing and Forwarding Agents and all other business associates and acknowledge their efficiency and continued support in promoting such healthy growth in the Company''s business.

ACKNOWLEDGEMENT

We are grateful to The Procter & Gamble Company USA and Procter & Gamble Asia Pte Limited Singapore for their invaluable support in terms of access to the latest information/knowledge in the field of Research & Development for products, ingredients and technologies; timely inputs to exceptional marketing strategies; and the goodwill of its world-renowned Trademarks and superior brands. We are proud to acknowledge this unstinted association that has vastly benefited the Company.

On behalf of the Board of Directors

Mumbai R. A. Shah August 12, 2014 Chairman


Jun 30, 2013

The Directors have the pleasure of presenting the 49th Annual Report and the Audited Accounts of the Company for the Financial Year ended June 30, 2013.

FINANCIAL RESULTS

(Figures in Rs. crores)

2012/13 2011/12

Sales including Excise 1697 1301

Net Sales (less excise duty) 1685 1295

Profit before tax 286 223

Profit after tax 203 181

Proposed Dividend plus tax thereon 95 85

Transfer to General Reserve 20 18

Balance carried forward 495 407



DIVIDEND

The Directors are pleased to recommend a dividend ofRs. 25 for each Equity Share of Rs. 10 each for the Financial Year ended June 30, 2013.

BUSINESS PERFORMANCE

Your Company''s strong performance continued in the Financial Year 2012-13, despite difficult economic conditions, and inflationary market conditions. With a focus on balancing needs of the consumer, the customer and the members, we are delighted to report very strong financial results for your Company. Your Company achieved a strong double-digit sales growth during the Financial Year 2012-13. Sales for the year increased by 30 per cent at Rs. 1,697 crore as against Rs. 1,301 crore during the previous year. Earnings after tax increased at 12 per cent at Rs. 203 crore as against Rs. 181 crore during the previous year.

Feminine Hygiene Business

Feminine Hygiene business recorded the 10th consecutive year of strong double-digit growth. This business has been a growth engine for your Company, with all the variants of Whisper sanitary napkins posting strong growth. Whisper further fortified its market leadership position by achieving value share leadership in the overall mid tier segment for the first time since the launch of Whisper Choice; along with market leadership in the top tier segment that Whisper Ultra already has.

During the Financial Year under review, a number of strategic initiatives were designed to meet the consumers'' needs across segments. Whisper Ultra launch a new revolutionary product with "50% larger holes" for the top tier consumers. At the same time, Whisper launched new innovations in the benefit segments of "Soft" and "Overnight protection" to keep pace with the evolving needs of our top tier consumers. On Whisper Choice, your Company continued its focus on driving increased usage of sanitary napkins, particularly among non-users, and increased availability. As a result of these initiatives, Whisper reached an all-time high national share of 57.9 behind share growth across brand forms.

Your Company also continued its disproportionate focus on the Point of Market Entry consumer. The Whisper School program reached nearly 4 million menstruating girls across private and government schools. Not only did the program reach out to more potential consumers, but it also increased its depth by reaching out to lower class towns.

Health Care Business

The Company''s Health Care sales posted a double digit growth this year across Vicks VapoRub, Vicks Cough Drops, Vicks Action 500 and Vicks Inhaler. The growth was driven by combination of product initiatives and increased investment behind proven equity advertising. Vicks will continue to innovate to ensure it stays the most trusted cough and cold care solution in India.

Overall, the Company continued to focus on driving consumer meaningful innovations backed by distribution expansion and strong advertising support thereby recording a consistent growth across all areas of business. Earnings have also benefited from focus on mix, pricing and cost control.

Cash generation continued to be strong arising from significant improvements in the business performance, efficiencies and cost savings across the organization and a continued efficient collection system. Your Company managed investments prudently by deployment of the surplus funds after ensuring that such investments satisfy the Company''s criteria of safety and security.

Strong results have been possible due to several key initiatives which focused on consumers, retail customers with a stronger focus on innovation, greater effectiveness and efficiency across all costs, while strengthening organizational leadership.

Re-launch of Old Spice brand

Your Company re-launched ''OldSpice'' this Financial Year, after taking back the Personal Grooming brand from erstwhile Licensee and started marketing Old Spice under its own umbrella this year.

The sale of Old Spice products, viz., deodorants, after shave lotions and shaving creams which begun in March, 2013 were encouraging and exceeded management expectations. Growth in market share was due to the Company''s investment in advertising and distribution expansion.

CORPORATE SOCIAL RESPONSIBILITY

Building business by improving lives

P&G''s focus on purpose-inspired growth, drives us to not only serve our consumers with superior product propositions, but also to touch and improve their lives by contributing towards the communities we operate in. This dedicated commitment is the driving force behind our Corporate Social Responsibility initiatives like ''P&G Shiksha'' and ''Project Parivartan'' that improve the lives of children from lesser privileged backgrounds, through health and education.

Over the past decade, P&G''s sustainability mantra ''to touch and improve the lives of consumers, now and for generations to come'' has inspired an enduring CSR strategy supported by three pillars - P&G Shiksha, The Whisper School program (Education) & Project Parivartan (Transformation) and Timely Disaster Relief. While P&G Shiksha and Project Parivartan provide children from underprivileged backgrounds with access to basics like health and education, P&G''s disaster relief activities aim to rehabilitate and aid the victims of natural disasters by reinstating crucial infrastructure.

P&G''s signature corporate social responsibility program P&G Shiksha has till date assisted over 420,000 children to access education by building/ supporting over 220 schools across India, in partnership with a number of NGOs like; Army Wives Welfare Association, Navy Wives Welfare Association, Round Table India, Save the Children, amongst others. These partners serve as specialists, lending their expertise to particular aspects of the education system. The NGO Round Table India for example is dedicated towards constructing educational infrastructure and supporting schools across India. The NGO Save the Children emphasizes on the girl child''s education by aiding government funded programs like the Kasturba Gandhi Balika Vidhyalayas. Similarly, the NGOs Army Wives Welfare Association and Navy Wives Welfare Association are experts in serving the educational needs of disabled children.

P&G Shiksha has empowered consumers to contribute towards the education of underprivileged children by exercising conscious brand choices, which has enabled P&G to share a part of the sales towards this movement. Since its inception in 2005, P&G Shiksha has made a cumulative donation of approx. Rs. 30 crores towards building new schools, providing critical infrastructural amenities at existing schools or reviving non-operational government schools.

Going beyond the tangible, this year, P&G also lent assistance in conducting spoken english & music classes, while also organizing fun activities for the children such as mehendi competitions. These activities under the P&G Shiksha program have exemplified its motto and have further strengthened our resolve of touching and improving lives.

P&G has stepped forward to rehabilitate and aid the victims of natural disasters, most recently by reaching out to over 5000 families in Uttarakhand and Himachal Pradesh with relief materials like water-proof tents, food & blankets, as well as distributing P&G products.

P&G''s conscious commitment towards the pursuit of sustainable development programs has empowered us to make truly substantial impacts on the lives of the communities around us while simultaneously providing them with superior product propositions. This unequivocal principle has fueled our social responsibility programs, aimed at improving lives, and also lends inspiration to our efforts on environmental sustainability and economic accountability.

ENVIRONMENTAL SUSTAINABILITY

Environmental sustainability is embedded in our Purpose, Values, Principles, and our business. In order to improve lives, now and for generations to come, we ensure that our products, packaging and operations are safe for employees, consumers and the environment. We ensure this with a focus on technologies, processes and improvements that matter for the environment. The manufacturing technologies we use are low emission and generate almost 60% less emission than the local norms. Your Company''s Head Office at Mumbai reduced its annual energy consumption by over 27% over the last 9 years, saving over 1700 gigajoules of energy. In Goa, the Whisper plant has recycled and reused over 4,000 tons of scrap.

At P&G, sustainability inspires and guides everything we do. Moreover, we ensure environmental friendly practices at our sites. These include reduction in power consumption, optimal water consumption and eliminating excess use of paper. A good example is the hydro-electric energy being used at our Plant in Baddi with efforts underway for extending this to other sites.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibilities Statement, it is hereby confirmed:

i. that in the preparation of the Annual Accounts for the Financial Year ended June 30, 2013, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for the Financial Year under review;

iii. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the Directors had prepared the accounts for the Financial Year ended June 30, 2013, on a "going concern" basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with the Auditors'' Certificate on its compliance with Clause 49 of the Listing Agreement is annexed to this Report.

MANAGEMENT & PERSONNEL

The growth over the past few years demonstrates the core strengths of our employees to stay reality-based, embrace change and proactively influence the course of business. In a diverse organization & competitive environment, the efforts of our organization, strong capability plans and HR innovation accelerated our growth. Our productivity continues to be best-in- class with major progress in Leadership and Talent Development.

The information as per Section 217(2A) of the Companies Act, 1956 (''Act''), read with the Companies (Particulars of Employees) Rules 1975 forms part of this Report. As per the provisions of Section 219(1) (b) (iv) of the Act, the Report and Accounts are being sent to the Members of the Company excluding the statement of particulars of employees under Section 217(2A) of the Act. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS

Mr. A. K. Gupta was appointed as an Additional Director of the Company with effect from January 18, 2013 and holds office upto the date of the forthcoming 49th Annual General Meeting of the Company. A notice under Section 257 of the Companies Act, 1956 has been received from a Member proposing his candidature as a Director of the Company, liable to retire by rotation.

Mr. B. S. Mehta, Director, retires by rotation and, being eligible, offers himself for re-appointment.

The brief resumes of Mr. A. K. Gupta and Mr. B. S. Mehta and the details of the directorships held by them in other companies are given in the "Corporate Governance" section of the Annual Report.

Appropriate resolutions for the appointment/re- appointment of the aforesaid Directors are being moved at the forthcoming 49th Annual General Meeting, which the Board recommends for your approval.

AUDITORS

The Auditors, M/s. Deloitte Haskins & Sells, Mumbai, Chartered Accountants (Registration No. 117366W) retire and offer themselves for re-appointment.

COST AUDITORS

Your Company has re-appointed M/s. Ashwin Solanki & Associates, Cost Accountants, to conduct the cost audit for the Financial Year ending June 30, 2014. The Company has received necessary approval of the Central Government for the said re-appointment.

CONSERVATION OF ENERGY & FOREIGN EXCHANGE

The information, in accordance with the provisions of Section 217(i)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgoings, are attached as Annexure to this Report.

TRADE RELATIONS

Your Directors wish to thank the Retailers, Wholesalers, Distributors, Suppliers of Goods & Services, Clearing and Forwarding Agents and all other business associates and acknowledge their efficiency and continued support in promoting such healthy growth in the Company''s business.

ACKNOWLEDGEMENT

We are grateful to The Procter & Gamble Company USA and Procter & Gamble Asia Pte Limited Singapore for their invaluable support in terms of access to the latest information/knowledge in the field of Research & Development for products, ingredients and technologies; timely inputs to exceptional marketing strategies; and the goodwill of its world-renowned Trademarks and superior brands. We are proud to acknowledge this association that has vastly benefited the Company.



On behalf of the Board of Directors



Mumbai R. A. Shah

August 14, 2013 Chairman


Jun 30, 2012

The Directors have the pleasure of presenting the 48th Annual Report and the Audited Accounts of the Company for the Financial Year ended June 30, 2012.

FINANCIAL RESULTS

(Figures in Rs. crores)

2011/12 2010/11

Sales including Excise 1301 1037

Net Sales (less excise duty) 1295 1000

Profit before tax 223 177

Profit after tax 181 151

Proposed Dividend plus tax thereon 85 85

Transfer to General Reserve 18 15

Balance carried forward 407 329

BUSINESS ENVIRONMENT

The Indian macroeconomic environment has looked turbulent during the past year. After a promising start to the decade in 2010-11, with achievements like maintaining GDP growth rate around 8%, bringing down fiscal deficit to 4.8% of GDP as well as containing current account deficit to 2.6%, the fiscal year 2011-12 has been challenging for the Indian Economy. The year started on a note of optimism through impressive growth in exports and high levels of foreign exchange inflows, only to moderate as the year progressed through continued monetary tightening in response to the untamed inflationary pressures. Gradually, high levels of inflation gave way to a slow-down in the growth. Additionally, as fiscal conditions worsened over the year, export numbers were revised in light of data discrepancies leading to a widening of trade deficit. In light of a perceivably weak macroeconomic environment, a well-planned economic revival policy from the Government's part is required to get back the Indian Economy on the path to stable and prosperous growth. Fall of rupee against major currencies, new norms of standard-size packaging, increase in raw material costs due to upward spiraling interest rates and inflation, together might adversely impact the performance of the FMCG products. India needs sustained capital inflows to finance its growing current-account deficit. Although economic reforms appear to have slowed down, it appears that FIIs are continuing to invest in India. However, it is also an undeniable fact that the Government continues to face challenges in attracting foreign direct investment (FDI). As per World Bank's report titled 'Global Economic Prospects' the Indian economy will grow by 6.9%o in this Financial Year (2012-13) notwithstanding problems like policy uncertainties, fiscal deficit and inflation.

BUSINESS PERFORM ANCE

Your Company's strong performance continued in the Financial Year 2011-12, despite difficult economic conditions, new competitive entrants and inflationary market conditions. With a focus on balancing needs of the consumer, the customer and the members, we are delighted to report very strong financial results for your Company. Your Company achieved a healthy double-digit sales growth during the Financial Year 2011-12. Sales for the Financial Year increased by 25% at Rs. 1,301 crore as against Rs. 1,037 crore during the previous year. Earnings after tax increased by 20% at Rs. 181 crore as against Rs. 151 crore during the previous year.

Feminine Hygiene Business

Feminine Hygiene business has been a major growth driver for the Financial Year with business up strong double digits with the various variants of Whisper Sanitary Napkins showing consistent growth. Your Company continues to deliver amongst the sales and share growth for P&G across the globe, with Whisper increasing its market share and Whisper Ultra being the largest value share brand in the market behind strategic initiatives. This growth is driven both by increase in penetration among non- users and consumption among users.

During the Financial Year under review, a number of initiatives were designed to meet the consumers' needs across segments. All these initiatives led to the Whisper share crossing its all time national high of 54.1 with growth across all major Brands.

Healthcare Business

The Company's Healthcare sales posted a double digit growth this Financial Year across Vicks VapoRub, Vicks Cough Drops, Vicks Action 500 and Vicks Inhaler. This growth was driven by a combination of product initiatives and increased investment behind proven equity advertising. Vicks VapoRub had a record year posting the highest ever market share. The Vicks Cough Drops business was the fastest growing in the Vicks franchise. Vicks will continue to innovate to ensure it stays the most trusted cough and cold care solution in India. The Healthcare business further strengthened Vicks equity as one of the most trusted Brand in India driven by the launch of Vicks VapoCool, a premium throat drop with the dual-benefit of soothing the throat and giving relief from blocked nose.

Overall, the Company continued to focus on driving consumer meaningful innovations backed by distribution expansion and strong advertising support thereby recording a consistent growth across all areas of business. Earnings have also benefited from focus on mix, pricing and cost control.

Cash generation continued to be strong arising from significant improvements in the business performance, efficiencies and cost savings across the organization and a continued efficient collection system. Your Company managed investments prudently by deployment of the surplus funds after ensuring that such investments satisfied the Company's criteria of safety and security.

Strong results have been possible due to several key initiatives which focused on consumers, retail customers with a stronger focus on innovation, greater effectiveness and efficiency across all costs, while strengthening organizational leadership.

DIVIDEND

The Directors are pleased to recommend a dividend of Rs. 22.50 for each Equity Share of Rs.10/- each for the Financial Year ended June 30, 2012.

CORPORATE SOCIAL RESPONSIBILITY

Shiksha reaches out to more children, in more parts of India, more completely

P&G's focus on purpose-inspired growth drives us to not only serve our consumers with superior product propositions, but also truly touch and improve the lives of more consumers, more completely by contributing towards the communities we operate in. This commitment is the purpose behind our Corporate Social Responsibility initiatives 'Shiksha' and the 'Whisper School Program,' that enables children from lesser-privileged background access their right to health and education.

P&G's flagship Corporate Social Responsibility Program 'Shiksha' is an integral part of our global philanthropy program - Live, Learn & Thrive, which currently reaches out to over 50 million children annually. Now in its 8th year, Shiksha enabled over 385,000 lesser-privileged children with access to good quality education by supporting sustainable and critical assets of schools. Shiksha will be supporting over 200 schools by interventions such as reactivating defunct government schools, building new schools or enhancing education infrastructure at existing schools.

This year, Shiksha introduced various new amenities, educational aids and health and hygiene programs to contribute to the overall growth and development of the children studying at Shiksha schools. During 2011-2012, P&G's Shiksha initiative has facilitated the addition of a digital library and distance learning programme at the Government High School, Lodhimajra, Himachal Pradesh. This initiative allows experts from other cities to conduct online lectures and sessions on various topics directly with the students. Shiksha has also partnered with project Ekta, Government of Rajasthan and NGO IBTADA, to adopt a girls' school 'Mewat Balika Vidyalaya' with the mutual goal of helping girls in rural Rajasthan access quality education.

P&G's National Parivartan Program, is a decade-old program that reaches 2.5 million girls across India every year to provide them with timely menstrual education and product samples. The program will now be conducted on a yearly basis to empower girl students with better health and hygiene, so that they do not skip school.

Since its inception in 2005, the P&G Group (India) has through Shiksha made a cumulative donation of over Rs. 27 crores towards helping children on the path to better education. This is a result of the support from our consumers who participated in the Shiksha movement by buying P&G brands in the months of January, February & March 2012 and enabling P&G to contribute a part of the sales towards the cause. During the Financial Year ended June 30, 2012, alone, P&G Group (India) closed Shiksha with a contribution of Rs. 5.6 crores in association with its partner NGOs, namely Save the Children India, Army Wives Welfare Association (AWWA), Round Table India (RTI), Navy Wives Welfare Association (NWWA), Air Force Wives Welfare Association (AFWWA) amongst others. Each of Shiksha s NGO partners focuses on a critical approach towards education, with NGO Round Table India specializing in building educational infrastructure and supporting schools across India,

NGO Save the Children laying emphasis on the girl child via supporting the Government's Kasturba Gandhi Balika Vidhyalayas and the NGOs AWWA, NWWA & AFWWA serving the unique educational needs of differently-abled children of Naval, Air force and Army Officers' families. These activities together help Shiksha further its motto and help us touch and improve the lives of our consumers.

Our Whisper School Program is now two decades old and it has protected millions of adolescent girls in India from getting trapped in traditional practices of using unhygienic cloth for sanitary protection. Through a sustained outreach program in private and government schools across the Country, P&G has been educating over 5 million adolescent girls in good Feminine Hygiene.

ENVIRONMENTAL SUSTAINABILITY

Environmental sustainability is embedded in our Purpose,Values,Principles,and our business. In order to improve lives, now and for generations to come, we ensure that our products, packaging and operations are safe for employees, the consumers and the environment. We ensure this with a focus on technologies, processes and improvements that matter for the environment. The manufacturing technologies we use are low emission and generate almost 60%o less emission than the local norms.

We aim at reducing waste at every step of the supply chain, with a robust system that targets zero waste, including product shelf life. We seek to develop sustainable products, with an improved environmental profile.

Moreover, we ensure environmental friendly practices at our sites. These include reduction in power consumption, optimal water consumption and eliminating excess use of paper by increasing the use of scanning. A good example is the hydro-electric energy being used at our Plant in Baddi with efforts underway for extending this to other sites

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the Annual Accounts for the Financial Year ended June 30, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for the Financial Year under review;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the Directors had prepared the accounts for the Financial Year ended June 30, 2012, on a "going concern" basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with the Auditors' Certificate on its compliance is annexed to this Report.

MANAGEMENT & PERSONNEL

The Company's growth over the past few years demonstrates the core strengths of our employees to stay reality-based, embrace change and proactively influence the course of business. In a diverse organization & competitive environment, the efforts of our organization, strong capability plans and HR innovation accelerated our growth. Our productivity continues to be best- in-class with major progress in Leadership and Talent Development. We ended the year being recognized No.2 in the FMCG category in India in the 'Great Place to Work Survey 2012'.

The information as per Section 217(2A) of the Companies Act, 1956 ('Act'), read with the Companies (Particulars of Employees) Rules 1975 forms part of this Report. As per the provisions of Section 219(1) (b) (iv) of the Act, the Report and Accounts are being sent to the Members of the Company excluding the statement of particulars of employees under Section 217(2A) of the Act. Any Member interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of the Company.

DIRECTORS

Mr. R. A. Shah, Director, retires by rotation and, being eligible, offers himself for re-appointment. The Directors recommend his re-appointment.

Mr. Shantanu Khosla has been re-appointed as the Managing Director of the Company by the Board of Directors for a period of five years w.e.f. June 1, 2012, subject to the approval of the Members of the Company.

Ms. Deborah Ann Henretta resigned from the Directorship of the Company with effect from August 1, 2012.

As a consequence to the cessation of Ms. Deborah Henretta from the Directorship of the Company, Mr. Pramod Agarwal ceased to be an Alternate Director with effect from August 1, 2012.

Mr. Pramod Agarwal was appointed as an Additional Director of the Company with effect from August 13, 2012 and holds office upto the date of the ensuing 48th Annual General Meeting of the Company. A notice under Section 257 of the Companies Act, 1956 has been received from a Member proposing his candidature as a Director of the Company, liable to retire by rotation.

Mr. Amit Vyas was appointed as an Additional Director of the Company with effect from December 22, 2011 and holds office upto the date of the ensuing 48th Annual General Meeting of the Company. A notice under Section 257 of the Companies Act, 1956 has been received from a Member proposing his candidature as a Director of the Company, liable to retire by rotation.

The brief resumes of the Directors and the details of the Directorships held by them in other companies are given in the "Corporate Governance" section of the Annual Report.

Appropriate Resolutions for the appointment/ re-appointment of the aforesaid Directors are being moved at the ensuing 48th Annual General Meeting, which the Board recommends for your approval.

AUDITORS

The Auditors, M/s. Deloitte Haskins & Sells, Mumbai, Chartered Accountants (Registration No. 117366W) retire and offer themselves for re-appointment.

COST AUDITORS

Your Company has re-appointed M/s. Ashwin Solanki & Associates, Cost Accountants, to conduct the cost audit of cost accounts/record of ''Formulations'' manufactured by the Company, for the year ending June 30, 2013. The Company has received the necessary approval of the Central Government for the re-appointment of the Cost Auditor.

CONSERVATION OF ENERGY ETC. INFORMATION

The information, in accordance with the provisions of Section 217(i)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgoings, are attached as Annexure to this Report.

TRADE RELATIONS

The Directors wish to thank the Retailers, Wholesalers, Distributors, Suppliers of Goods & Services, Clearing and Forwarding Agents and all other business associates and acknowledge their efficiency and continued support in promoting such healthy growth in the Company's business.

ACKNOWLEDGEMENT

We are grateful to The Procter & Gamble Company USA and Procter & Gamble Asia Pte Limited Singapore for their invaluable support in terms of access to the latest information/knowledge in the field of Research & Development for products, ingredients and technologies; timely inputs to exceptional marketing strategies; and the goodwill of its world-renowned Trademarks and superior brands. We are proud to acknowledge this unstinted association that has vastly benefited the Company.

On behalf of the Board of Directors

Mumbai R. A. Shah

August 23, 2012 Chairman


Jun 30, 2010

The Directors have the pleasure of presenting the 46th Annual Report and Audited Accounts of the Company for the year ended June 30, 2010.

FINANCIAL RESULTS

(Figures in Rs. crores)

2009/10 2008/09

Sales including Excise 914 773

Net Sales (less excise duty) 903 773

Profit before tax 234 232

Profit after tax 180 179

Proposed Dividend plus tax thereon 85 85

Transfer to General Reserve 18 18

Balance carried forward 278 201

BUSINESS ENVIRONMENT

The global economy is gradually emerging from the throes of the meltdown of 2008 and the fundamentals appear to be reasonably good. However, challenges do remain. As per published studies consumer sentiment is highest in India. India ranks second in the Nielsen Global Consumer Confidence survey released on January 7, 2010-an indication that recovery from the economic slowdown is faster in India with consumers willing to spend more. This recovery has helped your Company register yet another successful year.

BUSINESS PERFORMANCE

Your Company delivered strong business results in the year under review. The sales at Rs.914 crores are higher by 18% versus the sales of Rs.773 crores in the previous financial year. The Feminine Hygiene business continues to grow in higher double digits with all the variants of Whisper sanitary napkins showing a healthy growth. While Whisper Choice the variant in the popular segment is helping your Company grow volume shares, the growth of Whisper Ultra in the premium segment has helped add to value shares. Similarly, the Healthcare business has also shown sales growth of 11% behind increased sales of Vicks VapoRub and Vicks Inhaler. Overall, the Company continued to focus on driving persuasive and consumer-meaningful innovations backed by distribution expansion and remarkable advertising support thereby recording a valuable growth across all areas of business.

While the sales have grown by 18%, the Profit Before Tax (PBT) at Rs.234 crores is up only by 1% vs. last years PBT of ^232 crores. This is primarily due to increased market investments and expenses in the last quarter of the year under review, such as increase in the advertising and promotion expenses in general, the launch of Whisper Choice Ultra in particular, the start-up expenses on new manufacturing lines and the unexpected levy of excise duty by the 2010 Union Budget.

During the year under review, the Company earned Profit after Tax (PAT) of Rs.180 crores which is also marginally up as compared to last years PAT of Rs. 179 crores.

Healthcare Business

Healthcare business at Rs.381 crores (vs. last years Rs.344 crores) posted a growth of 11% this year across Vicks VapoRub, Vicks Cough Drops, Vicks Action 500 and Vicks Inhaler thereby consolidating the market leadership in its respective categories. This growth was driven by a combination of product initiatives and increased investment behind proven equity building advertising.

Vicks VapoRub had a record year posting the highest ever market share. The growth in the brand was driven primarily through continued focus and augmented media spends on the successful blanket of warmth advertising and on our ongoing strategy of upsizing consumers to drive consumption - viz. the timely promotions on jars which help in encouraging consumers to purchase larger packs.

The Vicks Cough Drops business had an excellent year, with the brand growing at 15%. The growth was driven by launch of a Jumbo drop, to cater to the top unmet demand of the category. This was accompanied by new attractive packaging and a higher media reach behind remarkable advertising support. The growth was further supported by an initiative to drive awareness of flavors via relevant touch points such as radio and wall-painting, which led to a further increase in consumption.

Our modest shipments on Vicks Action-500 during the year were driven by the overall slow down in the cold tablets category. During the second half of the financial year, your Company invested in superior advertising support for the product and saw the business respond immediately. We will however continue promoting the benefits of the product and expanding its distribution to ensure robust growth of Vicks Action-500 in the year ahead.

Vicks will continue to innovate to ensure it stays the most trusted cough and cold care amongst consumers in India.

Feminine Hygiene Business

Feminine Hygiene business recorded yet another year of high growth with sales at Rs.532 crores (vs. last years Rs.428 crores) translating to a growth of 24%. Your Company has delivered the highest sales and share growth for P&G across the globe, with Whisper increasing its market share and Whisper Ultra being the largest value share brand in the market. This growth is driven, both by increase in distribution amongst non-users and consumption amongst users.

During the year under review, a number of initiatives were designed to win with the consumers needs across segment.

The top-tier consumers were delighted by the "magical absorbency" promised by Whisper Ultra, and the launch of Whisper Choice Ultra in Februrary 2010 with its "ultra" offerings fascinating the mid-tier consumers. Whisper Choice Ultra priced at Rs.30 for 6 pads addresses the barrier that the mid-tier consumer faces and provides her a chance to experience "gel" technology protection - a unique superiority of the product now at a far more affordable cost than before.

Your Company continued its disproportionate focus on the Point of Market Entry consumer. The Whisper school program reached a total of 2.4 million menstruating girls across private and government schools, which is a 15% increase versus the previous year. At the same time, by constantly innovating to meet the consumers needs, Whisper ensured that the top-tier brand Whisper Ultra was sampled in the more urban schools, and the more economical mid-tier Whisper Choice in the upcountry schools. Not only did the program reach out to more potential consumers, but it also increased its depth by reaching out to lower tier towns. With the launch of Whisper Choice Ultra, the school program will be leveraged to sample this winning proposition to all government school girls.

In addition to the robust and time-tested School Girls Program, your Company continued to expand its direct-to-home selling program across the country. The top-tier program reached 0.75 million consumers in their homes, which is a 147% increase as against the previous year. The Whisper Choice program, first initiated in Tamil Nadu, made it a most preferred brand of the consumers with the highest volume share in the state. This program was expanded to 6 other states, reaching 1.9 million consumers and creating trial among 1.4 million of these consumers.

DIVIDEND

The Directors are pleased to recommend a dividend of ^22.50 for each equity share of Rs.10/- each for the financial year ended June 30, 2010.

CORPORATE SOCIAL RESPONSIBILITY

Shiksha:

P&Gs philosophy of purpose-inspired growth is about continuing to touch and improve the lives of more people, more completely. Our purpose not only inspires us to make products people love, but also fuels our readiness to touch and improve lives in the times of need - which we do through our Corporate Social Responsibility (CSR) programs such as Shiksha.

Shiksha, our signature CSR program has in its 6th year helped improve the lives of over 150,000 children across 602 communities with a donation of over Rs.5 crores. This year, Shiksha moves onto a new vision of creating tangible, visibly long-lasting impact through the building of Shiksha schools across the country that offer quality education to children in need. Over the last 6 years, P&G has already been helping bring to life over 100 schools via either building them (near our plants), supporting them through Non-Government Organizations (NGOs), working with Army Wives Welfare Association schools, or reactivating Government schools through our work with NGO partner CRY. This year we hope that the building of Shiksha schools will lead to far more children being able to access quality education. After all,

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended June 30, 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the Directors had prepared the accounts for the financial year ended June 30, 2010, on a "going concern" basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with the Auditors Certificate on its compliance is annexed to this Report.

MANAGEMENT & PERSONNEL

The growth over the past few years demonstrates the core strengths of our employees to stay reality-based, embrace change and proactively influence the course of business. The Directors are confident that employees are up to the challenge and thank them for their continued trust and support.

The information as per Section 217(2A) of the Companies Act, 1956 (Act), read with the Companies (Particulars of Employees) Rules 1975 forms part of this Report. As per the provisions of Section 219(1 )(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of the Company.

DIRECTORS

Mr. R. A. Shah, Director, retires by rotation and being eligible, offers himself for re-appointment.

The Directors recommend his re-appointment. Mr. Shah needs no introduction to the shareholders. Mr. Shah has been one of the founder Directors of your Company.

AUDITORS

The Auditors, M/s. Deloitte Haskins & Sells, Mumbai, Chartered Accountants (Registration No. 117366W) retire and offer themselves for re-appointment.

COST AUDITORS

Your Company has received the approval of the Central Government for re-appointment of M/s. Ashwin Solanki & Associates, Cost Accountants, to conduct the cost audit of drug formulations for the year ended June 30, 2011.

CONSERVATION OF ENERGY ETC. INFORMATION

The information, in accordance with the provisions of Section 217(i)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgoings, forms part of this Report.

TRADE RELATIONS

The Directors wish to thank the retailers, wholesalers, distributors, suppliers of goods & services, clearing and forwarding agents and all other business associates and acknowledge their efficiency and continued support in promoting such healthy growth in the Companys business.

ACKNOWLEDGEMENT

We are grateful to The Procter & Gamble Company, USA and Procter & Gamble Asia Pte Limited, Singapore for their invaluable support in terms of access to the latest information/knowledge in the field of Research & Development for products, ingredients and technologies; timely inputs to exceptional marketing strategies; and the goodwill of its world-renowned trademarks and superior brands. We are proud to acknowledge this unstinted association that has vastly benefited the Company.

For and on behalf of the Board

Mumbai R. A. Shah

August 18, 2010 Chairman

 
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