Your Directors have the pleasure of presenting the 51st Annual Report andthe Audited Accounts of the Company for the Financial Year ended June 30 2015.
| || ||(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 |
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.
Your Company delivered another year of strong performance in the Financial Year2014-15 with double digit growth on both top and bottom line in a competitive marketenvironment. This was achieved behind superior value propositions and strength of productportfolio.
Sales for the Financial Year increased by 14% to Rs. 2332 crores as against Rs. 2047crores during the previous Financial Year. Earnings after tax increased by 15% to Rs. 346crores as against Rs. 302 crores during the previous Financial Year behind continued focuson productivity and cost efficiency.
Feminine Hygiene Business
Feminine Flygiene business recorded the 12th consecutive year ofdouble-digit growth. This business has been a growth engine for your Company with all thevariants of Whisper sanitary napkins posting strong growth. Whisper continues to be themarket leader despite stiff competition from other category players.
During the Financial Year under review a number of strategic initiatives were designedto meet the consumers' needs across segments. The top-tier consumers were delighted by ourWhisper Ultra
Clean product with the promise of superior benefits like dual protection (wetness andodour) and long-lasting protection. Continuing our strong focus on offering productsserving the needs of our consumers your Company also drove the Whisper Ultra Nightsline-up providing protection that lasts all night. On Whisper Choice your Companycontinues to drive increased usage of sanitary napkins particularly among non-users andincreased availability. Your Company also drove the innovative "thin" productform within the existing mid-tier consumers and non-users in the form of Whisper ChoiceUltra.
Your Company also continued its disproportionate focus on the 'Point of Market' Entryconsumer. The Whisper school program reached nearly 4 million menstruating girls acrossprivate 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 itsdepth by reaching out to smaller towns.
Health Care Business
The Company's Health Care sales posted double digit growth again this Financial Yearbehind the strength of its strong portfolio which includes Vicks VapoRub Vicks CoughDrops Vicks Action 500 and Vicks Inhaler. The growth was driven by combination of productinitiatives and increased investment behind proven equity advertising. Vicks VapoRub had arecord year posting the highest ever market share. Vicks Action 500 business was thefastest growing in the Vicks franchise. Vicks will continue to innovate to ensure it staysthe most trusted cough and cold care solution in India.
Overall the Company continued to focus on driving consumer meaningful innovationsbacked by distribution expansion and strong advertising support thereby deliveringconsistent growth. Earnings have also benefited from focus on mix pricing andproductivity.
Cash generation continued to be strong arising from significant improvements in thebusiness performance efficiencies cost savings across the organization and an efficientcollection system. Your Company managed investments prudently by deployment of the surplusfunds after ensuring that such investments satisfy the Company's criteria of safety andsecurity.
Financial Year 2014-15 on Old Spice was a year of consolidating the gains made inFinancial Year 2013-14. Old Spice continues to grow value sales behind investments on corebusiness drivers namely product upgrades and new premium fragrance launches advertisingto 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 weinnovate and how we act. As one of the world's largest consumer products company we haveboth a responsibility and an opportunity to do the right thing and lead change. P&G'ssustainability objective is to create long-term value for our consumers and shareholdersby growing our brands and operations responsibly to conserve resources and improve life inthe communities we impact across the world. This strategy has inspired an enduring CSRstrategy supported by two pillars - P&G Shiksha and Timely Disaster Relief. WhileP&G Shiksha provides children from underprivileged backgrounds with an access to aholistic education P&G's disaster relief activities aim to rehabilitate and empowerthe victims of natural disasters by providing them with daily essential commodities andsafe drinking water. P&G's signature corporate sustainability program P&G Shikshahas till date built and supported over 450 (+120 since last year) schools across thecountry that will impact the lives of over 800000 (+200000 since last year) childrenover a period of time in partnership with a number of NGOs like - Round Table India Savethe Children Pratham Army Wives Welfare Association Navy Wives Welfare Association AirForce Wives Welfare Association amongst others. These partners serve as specialistslending their expertise to particular aspects of the education system. The NGO Round TableIndia is dedicated towards constructing educational infrastructure and supporting schoolsacross India. The NGO Save the Children focuses on girl child's education by aidinggovernment funded programs like the Kasturba Gandhi Balika Vidhyalayas. Pratham hasspecial expertise in remedial learning to help bring children up to speed with thelearning levels in their curriculum. Similarly the NGOs Army Wives Welfare Associationand Navy Wives Welfare Association are experts in serving the educational needs ofdisabled children.
Since its commencement in 2005 P&G Shiksha has also empowered consumers tocontribute towards the education of underprivileged children by making conscious brandchoices 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 towardsbuilding new schools providing critical infrastructural amenities at existing schools orreviving non-operational government schools.
During the Financial Year Save the Children in partnership with P&G Shiksha hascontinued to empower girls through improving learning effectiveness and has also expandedits impact. Thirteen Kasturba Gandhi Balika Vidyalayas (KGBV) and eighteen primary andmiddle schools were supported through the provision of sports kits and laboratoryequipment. Initiatives to bring a positive change in overall teaching environment have ledto teachers practicing pedagogical methods (such as promoting an effective use of thelibrary facility project work story building as well as an overall better planning andexecution of multi-level teaching).
In partnership with Save The Children we work on education of girl children in KGBVschools in Rajasthan and Jharkhand
P&G continued to impact the communities around its plants in a holistic mannerthroughout the Financial Year. At Goa in association with Matruchhaya a local publiccharitable trust P&G is providing educational and infrastructural support to a schoolfor the orphaned destitute and abandoned children. The P&G Baddi plant continued itsassociation with Himachal Pradesh Voluntary Health Association with Lodhimajra VillageSchool in order to make infrastructure additions to school while organizing healthcheck-ups for the students. In Mandideep the Company also built on its association withArushi a local NGO to provide infrastructure nutrition and hygiene support to theSatlapur Government School. P&G Shiksha in the last year enabled the school withnutrition supplement by providing fruits along with mid-day meals health and eye checkupfor students construction of toilets construction of a boundary wall and refurbishmentof the roof.
P&G partnered with Pratham Education Foundation a leading NGO in India in theeducational space to foray into remedial learning and early childhood education therebyincreasing our focus on learning outcomes via improving learning effectiveness. P&GShiksha is partnering with Pratham's Read India initiative that aims to bridge theexisting gap between current and existing learning levels on scale. The methodologycombines reading speaking practical application and writing in a variety of ways toenhance learning.
P&G has also identified a need for early childhood education to set children up forsuccess when they begin primary school. For this P&G is partnering with Pratham'sinterventions to ensure that children receive support to facilitate holistic social andcognitive development. Through Pratham's partnership with the Government (ICDS) P&GShiksha will impact early childhood learning in Anganwadi centers and Pratham's Balwadicenters.
P&G continued its efforts to provide timely aid and relief to families affected bynatural disasters. P&G sent out relief aid to over 5000 families affected by theJ&K floods comprising of P&G products. During the Nepal Earthquake P&G alsocollaborated with the Indian Government and addressed the dire need for sanitary napkinsby sending out 20000 Whisper packs to Nepal through National Disaster Relief Authority(NDMA) to the affected families. At P&G Corporate Social Responsibility has and willremain an important component of our ability to improve consumers' lives and to createvalue for our Members.
Your Company has constituted a Corporate Social Responsibility Committee. Thecomposition and terms of reference of the Corporate Social Responsibility Committee areprovided in the Corporate Governance Report annexed to this report.
Annual report on CSR activities as required under the Companies (Corporate SocialResponsibility 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 ourbusiness. In order to improve lives now and for generations to come we ensure that ourproducts packaging and operations are safe for employees consumers and the environment.Your Company ensures this with a focus on technologies processes and improvements thatmatter for the environment.
At P&G sustainability inspires and guides everything we do. Moreover we ensureenvironmental friendly practices at our sites. These include reduction in powerconsumption optimal water consumption and eliminating excess use of paper.
Your Company's head office at Mumbai reduced its annual energy consumption by over39.2% over the last 11 years saving over 2214 gigajoules of energy.
During the Financial Year your Company's plant in Goa has reduced diesel generationutilization by 5% versus last year for plant operations resulting in reduction of dieselconsumption and reduced carbon footprint by 90% versus year ago.
Goa plant has introduced LED Lights to almost 50% of the operations floor variablefrequency drives to high power consumption blowers and all air handling units in utilitiesand pumps. Analysis of air leakages across operations and timely corrections LED Lightingto 60% of street lightings cool light energy savers to plant lighting help to stablevoltage control and reduction of failures and energy consumptions.
We have undertaken capital investment of approx. Rs. 1.5 crores towards installation ofLED lights and variable frequency drives at our plants which will help in energyconservation.
i. Efforts made towards technology absorption:
Continued implementation of quality control/quality assurance procedures of productsand processes were successfully adapted on commercial scale to utilize local raw materialsand machinery; technical services for reliability quality cost savings and technologytransfer from overseas.
ii. Benefits derived like product improvement cost reduction product development orimport substitution:
All the above efforts resulted in improving process efficiencies consistent quality ofour products introduction of new products and import substitution and successfulabsorption of technology.
iii. Imported technology (Imported during the last three years reckoned from thebeginning of the Financial Year):-
The Company has the advantage of availing advanced technology and continuousupgradation thereof from The Procter & Gamble Company USA and its subsidiaries.
This is an unmatched competitive advantage that helps the Company deliver strongbusiness 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 onlinepacking machine has improved the packaging quality & has led to reduction in packingcost.
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 aregiven 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 alsoavailable on Company's website at http://www.pg.com/ enJN/invest/pghh/corporate_governance/ policies.shtml/. This policy deals with the reviewand approval of related party transactions. All related party transactions are placedbefore the Audit Committee for review and approval. Prior omnibus approval is obtained forrelated party transactions which are of repetitive nature and entered in the ordinarycourse of business and at arm's length. All related party transactions are subjected toindependent review by external chartered accountancy firm to confirm compliance with therequirements under the Companies Act 2013 and the Listing Agreement.
All related party transactions entered during the Financial Year were in ordinarycourse of the business and on arm's length basis. No material related party transactionswere entered during the Financial Year by your Company. Accordingly the disclosure ofrelated party transactions as required under Section 134(3) (h) of the Companies Act 2013in Form AOC 2 is not applicable to your Company.
Your Company has not accepted any Public Deposits under Chapter V of Companies Act2013 during this Financial Year.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
In line with P&G's Worldwide Business Conduct Manual your Company treats all itsemployees and business partners with dignity and respect. Your Company is committed toprovide a harassment-free environment in which all have an opportunity to contribute attheir highest potential. As a part of our commitment to providing a safe work environmentwe never engage in or tolerate any form of harassment As per the requirement of the SexualFlarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013('Act') and Rules made thereunder your Company has constituted Internal ComplaintsCommittees (ICC). During the Financial Year no complaints with allegations of sexualharassment were filed with the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Sections 134 (3) (c) of the Companies Act 2013 withrespect to the Directors' Responsibilities Statement it is hereby confirmed:
i. that in the preparation of the Annual Accounts for the Financial Year ended June 302015 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
ii. that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial Year and of the profit or loss of the Company for the Financial Year underreview;
iii. that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the Directors had prepared the accounts for the Financial Year ended June 302015 on a "going concern" basis;
v. that the Directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and were operating effectively;and
vi. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
A separate report on Corporate Governance along with the Auditors' Certificate on itscompliance 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 2013during the Financial Year 2014-15 are as follows:
|Name of Borrowing Company ||Relation ||Amount (Rs. In Crores) ||Particulars of Loan ||Purpose for which the loans are proposed to be utilized |
|Prior to October 1 2014 || || || || |
|Wella India Haircosmetics Private Ltd || ||120.49 ||Interest rate of 12% ||General business purpose |
|Procter & Gamble Home Products Pvt Ltd || ||438.20 ||Interest rate of 12% ||General business purpose |
|Post October 1 2014 ||Fellow Subsidiary || || || |
|Gillette Diversified Operations Pvt Ltd || ||13.00 ||Interest rate of 9.33% ||General business purpose |
|Procter & Gamble Home Products Pvt Ltd || ||200.00 ||Interest rate of 9.33% ||General business purpose |
|Wella India Haircosmetics Private Ltd || ||200.00 ||Interest rate of 9.33% ||General business purpose |
MANAGEMENT & PERSONNEL
The strong growth over the past few years demonstrates the core strengths of ouremployees to stay reality-based and proactively influence the course of business. In adiverse organization & competitive environment the efforts of our organizationstrong capability plans and HR innovation accelerated our growth. Our productivitycontinues 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 2013and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is appended as Annexure III to the Report.
The information as per Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report. As per the provisions offirst proviso to Section 136(1) of the Act the Report and Financial Statements are beingsent to the Members of the Company excluding the statement of particulars of employeesunder 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 tothe Company Secretary at the Registered Office of the Company.
Mr. Karthik Natarajan has been appointed as an Additional Director of the Company witheffect from October 1 2014 and holds office upto the date of the ensuing 51stAnnual General Meeting of the Company. Notice under Section 160 of the Companies Act 2013has been received from him proposing his candidature as Director of the Company liable toretire by rotation.
During the Financial Year Mr. Pramod Agarwal ceased to be a Director effective fromMarch 31 2015. Subsequently he was appointed as an Additional Director of the Companywith effect from May 8 2015 and holds office upto the date of the ensuing 51stAnnual General Meeting of the Company. Notice under Section 160 of the Companies Act 2013has been received from him proposing his candidature as Director of the Company liable toretire by rotation.
Mr. Shantanu Khosla ceased to be the Managing Director and Director of the Companyeffective from June 30 2015. The Board of Directors place on record its appreciation forhis long service and contribution to the Company.
Mr. Al Rajwani was appointed as an Additional Director and Managing Director of theCompany effective August 28 2015 subject to the approval of the Members and the CentralGovernment if applicable. Notice under Section 160 of the Companies Act 2013 has beenreceived from him proposing his candidature as Director of the Company.
Mr. Shailyamanyu Singh Director retires by rotation and being eligible offershimself for re-appointment.
The Independent Directors of your Company have given certificate of independence toyour Company stating that they meet the criteria of independence as mentioned underSection 149(6) of the Companies Act 2013 and clause 49 of the Listing Agreement.
The details of training and familiarization programmes and Annual Board Evaluationprocess for Directors have been provided under the Corporate Governance Report.
The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for Key Managerial Personnel and other employees forms part of CorporateGovernance Report of this Annual Report.
The brief resumes of Directors proposed to be appointed/reappointed at the ensuing 51stAnnual General Meeting and the details of the Directorships held by them in othercompanies are given in the "Corporate Governance" section of the Annual Report.
Appropriate resolutions for the appointment/re- appointment of the aforesaid Directorsare being moved at the ensuing 51st Annual General Meeting which the Boardrecommends for your approval.
M/s. Deloitte Haskins & Sells LLP were appointed as Statutory Auditors of yourCompany at the previous 50th Annual General Meeting held on September 24 2014for a term of three consecutive years. As per the provisions of Section 139 of theCompanies Act 2013 the appointment of Auditors is required to be ratified by Members atevery Annual General Meeting. Resolution for the said ratification is being moved at theensuing 51st Annual General Meeting.
The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation or adverse remark given bythe Auditors in their Report.
M/s. Ashwin Solanki & Associates Cost Accountants carried out the cost audit forapplicable business during the Financial Year. The Board of Directors has appointed M/s.Ashwin Solanki & Associates Cost Accountants as Cost Auditors for the Financial Year2015-16.
Secretarial Audit was carried out by M/s. Dholakia & Associates LLP CompanySecretaries for the Financial Year 2014-15. There were no qualifications reservation oradverse remarks given by Secretarial Auditors of the Company. The Secretarial Audit reportis 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 12of the Companies (Management and Administration) Rules 2014 is appended as an Annexure IIto this Report.
During the Financial Year your Company has adopted the policies on related partytransactions corporate social responsibility and vigil mechanism which are available onthe website of the Company at
The details of all the policies adopted by the Company are provided in the CorporateGovernance Report annexed to this Report.
The Directors wish to thank the retailers wholesalers distributors suppliers ofgoods & services clearing and forwarding agents and all other business associates andacknowledge their efficiency and continued support in promoting such healthy growth in theCompany's business.
We are grateful to the Procter & Gamble Company USA and its subsidiaries for theirinvaluable support in terms of access to the latest information/knowledge in the field ofresearch & development for products ingredients and technologies; timely inputs toexceptional marketing strategies; and the goodwill of its world-renowned trademarks andsuperior brands. We are proud to acknowledge this unstinted association that has vastlybenefited the Company.
| ||On behalf of the Board of Directors |
|Mumbai ||R. A. Shah |
|August 28 2015 ||Chairman |
Annual Report on Corporate Social Responsibility [Pursuant to Companies (CorporateSocial Responsibility Policy) Rules 2014]
1. Brief outline of the Company's CSR policy
Doing the right thing is the foundation of Procter & Gamble's Purpose Values andPrinciples. It is naturally woven into the way we work every day paying competitivewages working consistently with our retailers and suppliers preventing conflicts ofinterest ensuring consumer privacy and maintaining financial stewardship. This approachto business is at the heart of all we do at P&G. Doing the right thing also includesinvesting in the communities in which we live work and serve. At its core P&G'sSocial Responsibility efforts aim to improve lives.
Companies Act 2013 ("Act") highlights the importance of Corporate SocialResponsibility ("CSR") as a strategic tool for sustainable growth of the peoplethe communities we operate in and the Company as a whole. In line with the globalprinciples followed by the Procter & Gamble group and the terms of Act the policy onCorporate Social Responsibility is broadly framed taking into account the following:
1. We believe it's essential to run our business responsibly and our operatingpractices reflect this commitment.
2. P&G is focused on making every day better for people and the planet through ourinnovations and our actions;
i) Environment by-Conservation of Resources Using Renewable Resources GeneratingWorth from Waste;
ii) Social by-providing the comforts of home improving health and hygiene of peoplesocial and cultural development imparting education training and social awareness.
The Corporate Social Responsibility activities to be undertaken by the Companyinclude but are not limited to the following:
a. Social and cultural development by:
Imparting education training (vocational and skill based) and creating socialawareness;
Awareness programs on girl education;
Empowerment of women for education/health & self-employment;
Empowerment of differentially abled children and their self-development;
Skill development and generation of employment by locally driven initiatives;
Promoting preventive health care and sanitation by providing health and hygieneproducts;
Making available safe drinking water;
Promoting sports and cultural activities
Creating awareness and development of infrastructure for sports and culturalactivities;
Measures for the benefit of armed forces veterans war widows and theirdependents; and
Relief and support to victims of natural calamities in any part of the Country.
b. Ensuring Environmental Sustainability by:
Conservation of resources by design and manufacture of products that maximizethe conservation of resources;
Utilization of renewable energy and renewable or recycled materials; and
Generating Worth from Waste.
c. Any other objectives as mentioned under Section 135 of Companies Act 2013 and/orrelevant Rules and Schedules. The Corporate Social Responsibility Policy is available onthe website of the Company at
The composition of the CSR Committee as on date:-
|Mr. A. K. Gupta ||Chairman |
|Mr. Shantanu Khosla * ||Member |
|Mr. Karthik Natarajan ||Member |
|Ms. Sonali Dhawan ** ||Member |
|Mr. Al Rajwani *** ||Member |
* Mr. S. Khosla resigned as Director and Managing Director of the Company w.e.f. June30 2015 and consequently ceased to be Member of the Corporate Social ResponsibilityCommittee w.e.f June 30 2015;
** Ms. Sonali Dhawan was inducted as a Member of the Corporate Social ResponsibilityCommittee on August 28 2015. In absence Mr. A. K. Gupta Ms. Dhawan was appointedChairperson of the meeting of the CSR committee held on August 28 2015
*** Mr. Al Rajwani was inducted as a Member of the Corporate Social ResponsibilityCommittee w.e.f. August 28 2015.
2. Average net profit of the Company for last three Financial Years - Rs. 325.86 Crores
3. Prescribed CSR expenditure (2% of amount as in item 3) - Rs. 6.52 Crores
4. Details of CSR spent during Financial Year:
a) Total amount to be spent for the Financial Year - Rs. 6.52 Crores
b) Amount unspent if any - Not applicable
c) Manner in which the amount spent during the Financial Year as detailed below:-
|Sr. no. ||CSR project or activity identified ||Sector in which the Project is covered ||Projects or Programs (1) Local area or other (2) Specify State & district where projects/ programs were undertaken || |
Amount outlay (budget) project or program wise (Rs. in Crores)
Amount spent on the projects or programs
Cumulative expenditure upto the reporting period
|Amount spent: Direct or through implementing agency* |
| || || || || ||Total ||Direct expenditure ||Overheads || || |
|1 ||P&G Shiksha: Read India Program ||Education: Remedial Learning ||Maharashtra Rajasthan and Chhattisgarh ||1.00 ||1.00 ||93% ||7% ||1.00 ||Implementing agency: Pratham Education Foundation |
|2 ||P&G Shiksha: Build & Support Schools ||Education: Infrastructure Interventions ||Pan-India ||1.27 ||1.27 ||100% ||Nil ||1.27 ||Implementing agency: Round Table India Trust |
|3 ||P&G Shiksha: Early Childhood Education ||Education: Foraying into early childhood education focused on motor and cognitive skills ||Maharashtra Bihar ||2.00 ||2.00 ||93% ||7% ||2.00 ||Implementing agency: Pratham Education Foundation |
|4 ||P&G Shiksha: Supporting communities around P&G plants ||Education: Interventions in a Govt. School in Mandideep ||Mandideep (MP) ||0.10 ||0.10 ||94% ||6% ||0.10 ||Implementing agency: Arushi Society |
|5 ||P&G Shiksha: Supporting communities around P&G plants ||Education: Interventions in a Govt. Girls School in Baddi ||Baddi (HP) ||0.35 ||0.35 ||85% ||15% ||0.35 ||Implementing agency: Himachal Pradesh Voluntary Health Association |
|6 ||P&G Shiksha: Supporting communities around our plants ||Education: Interventions in a Public Charitable Trust for orphan destitute and abandoned children ||Goa ||0.05 ||0.05 ||100% ||Nil ||0.05 ||Implementing agency: Matruchhaya |
|7 ||P&G Shiksha: Read India Program ||Education: Remedial Learning ||Mysore ||0.10 ||0.10 ||93% ||7% ||0.10 ||Implementing agency: Pratham Mysore |
|8 ||P&G Shiksha: Supporting Defence NGOs to educate underprivileged children ||Education: Support Sankalp School Mumbai - a special school for differently abled children ||Mumbai (Maharashtra) ||0.15 ||0.15 ||90% ||10% ||0.15 ||Implementing agency: Navy Wives Welfare Association |
|9 ||P&G Shiksha: Supporting Defence NGOs to educate underprivileged children ||Education: Support Umeed Schools- school for the underprivileged ||Delhi ||0.10 ||0.10 ||90% ||10% ||0.10 ||Implementing agency: Air Force Wives Welfare Association |
|10 ||P&G Shiksha: Supporting Education of Marginalised Girls and children in rural areas ||Education: Support Girl Child Education through KGBV Schools in Rajasthan and Jharkhand ||Rajasthan Jharkhand ||1.40 ||1.40 ||93% ||7% ||1.40 ||Implementing agency: Save The Children |
5. In case the Company has failed to spend 2% of the average net profit of the lastthree financial years or any part thereof the Company shall provide the reasons for notspending the amount in its Board Report: Not applicable
6. The CSR Committee confirms that the implementation and monitoring of CSR activitiesis in compliance with CSR objectives and policy of the Company.
|Sd/- ||Sd/- |
|Al Rajwani ||Sonali Dhawan |
|Managing Director ||Chairperson of meeting of the CSR Committee held on August 28 2015 |
Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
i. Ratio of remuneration of each Director to the median remuneration of the employeesof the Company for the Financial Year:
|Name of Director ||Designation ||Salary including Bonus + PF Contribution Rs. in lakhs ||Commission Rs. in lakhs ||Sitting Fees Rs. in lakhs ||Total Rs. in lakhs ||Ratio |
|Mr. S. Khosla* ||Managing Director ||1401.63 || || ||1401.63 ||113.7 |
|Mr. R. A. Shah ||Independent Director || ||11.00 ||2.90 ||13.90 ||1.12 |
|Mr. B. S. Mehta ||Independent Director || ||11.00 ||2.60 ||13.60 ||1.10 |
|Mr. A. K. Gupta ||Independent Director || ||11.00 ||3.80 ||14.80 ||1.20 |
|Mr. P. Agarwal ||Non-Executive Director || || || ||0 ||0 |
|Mr. S. Singh ||Non-Executive Director || || || ||0 ||0 |
|Ms. S. Dhawan ||Non-Executive Director || || || ||0 ||0 |
|Mr. K. Natarajan ||Non-Executive Director. || || || ||0 ||0 |
ii. The % increase in remuneration of each Director Chief Financial Officer ChiefExecutive Officer Company Secretary or Manager if any in the Financial Year
|Designation ||Name of Employee ||% increase in remuneration |
|Managing Director ||Mr. Shantanu Khosla ||38.50% |
|Company Secretary ||Ms. Preeti Bishnoi ||18.00% |
|Chief Financial Officer ||Mr. Prashant Bhatnagar ||Not applicable* |
* Mr. Prashant Bhatnagar was appointed as the Chief Financial Officer of the Company onOctober 1 2014 hence % increase in remuneration comparing versus previous Financial Yearcannot be computed
iii. The % increase in the median remuneration of employees in the Financial Year is8.30%.
iv. The number of permanent employees on the rolls of Company is 377.
v. Explanation on the relationship between average increase in remuneration and Companyperformance
The Company performance in the Financial Year was strong in terms of sales and profitgrowth. Overall compensation trends were consistent with the Company growth. Ourcompensation philosophy for all employees aims to provide opportunities for competitivecompensation. The "Key Principles" of compensation at P&G are
(i) pay for Performance
(ii) pay competitively and
(iii) design programs to support business strategies.
We set our salaries in line with the pay practices of the finest global regional andlocal companies with whom P&G competes for market share and people. We review oursalary ranges each year to ensure competitiveness. During the Financial Year similarapproach was followed to establish the compensation increases to the employees.
vi. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company
Our fundamental and overriding objective is to create value for our shareholders atleadership levels on a consistent long-term basis. To accomplish this goal the guidelineson executive compensation programs provide the following guiding principles:
(i) emphasize Pay for Performance
(ii) pay competitively
(iii) focus on Long-Term Success.
This was duly reviewed by the Nomination and Remuneration Committee of the Company toensure competitiveness. During the Financial Year the Company's Net sales grew by 14%Profit Before Tax grew by 9%. Overall compensation trends are consistent with the Companygrowth.
vii. a) Variations in the market capitalisation of the Company: The marketcapitalisation of the Company as at the closing date of the current Financial Year andprevious Financial Year has increased by 59%.
b) Price Earnings Ratio of the Company was 64 on June 30 2015 and was 46 as at June30 2014.
c) Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last public offer- The closing share price of the Company at BSE Limited on June 30 2015 being Rs. 6773.45per equity share of Rs. 10 each has grown 677 times since the last offer for sale by theCompany was made in the year 1966.
viii. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last Financial Year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration
The average percentage increase made in the salaries of employees other than themanagerial personnel in the Financial Year was 8.75% whereas the increase in managerialremuneration was 11%. The average increase every year is an outcome of Company's marketcompetitiveness as against peer group companies
ix. Key parameters for any variable component of remuneration Variable compensation ispaid to all employees above the level of senior manager. The overall variable compensationwill depend upon individual targets business unit results and Company performance.
x. Ratio of the remuneration of the highest paid Director to that of the employees whoare not Directors but receive remuneration in excess of the highest paid Director duringthe Financial Year
xi. It is hereby affirmed that the remuneration is as per the remuneration policy ofthe Company.
FORM NO. MR-3
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 with modifications asdeemed necessary without changing the substance of format given in MR-3]
Procter & Gamble Hygiene and Health Care Limited
P & G Plaza Cardinal Gracias Road Chakala
Andheri East Mumbai - 400 099
We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Procter & Gamble Hygieneand Health Care Limited (CIN L24239MH1964PLC012971) (hereinafter called the"Company"). Secretarial Audit was conducted in a manner that provided us areasonable basis for evaluating the corporate conducts / statutory compliances andexpressing our opinion thereon.
A. In expressing our opinion it must be noted that-
i. Maintenance of secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
ii. We have followed the audit practices and processes as were appropriate to obtainreasonable assurances about the correctness of the contents of the secretarial records.The verification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis of our opinion.
iii. We have not verified the correctness and appropriateness of the financialstatements of the Company.
iv. Wherever required we have discussed with the management of the company andobtained the management representation pertaining to compliance of laws rules andregulations happening of events etc.
v. The compliance with the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of the management.
Our examination was limited to the verification of procedures on test basis.
vi. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.
B. Based on our verification of the Company's books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of Secretarial Audit we hereby report that in our opinion the Company hasduring the audit period covering the Financial Year ended on 30th June 2015complied with the statutory provisions listed hereunder and also that the Company hasproper Board - process (duly evolved) and compliance - mechanism in place to the extentin the manner and subject to the reporting made hereinafter:
C. We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the Financial Year ended on 30th June2015 according to the provisions of:
I. The Companies Act 2013 (the Act) and the rules made thereunder;
II. The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;
III. The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
IV. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 and
(c) The Securities and Exchange Board of India (Registrar to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client.
The Company has not accepted or received or made any additional Foreign DirectInvestment Overseas Direct Investment and External Commercial Borrowings during the auditperiod and hence provisions of Foreign Exchange Management Act 1999 and the rules andregulations made thereunder applicable to such Investment and Borrowings is not applicableto the Company.
The Company has not undertaken any of the activities during the audit period asenvisaged in the following Regulations and Guidelines prescribed under the SEBI Act andhence are not relevant for the purpose of audit:
(a) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
(b) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 / Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 (effective 28th October2014) and
(e) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009.
V. The following Acts and Rules made thereunder pertaining to Company's business areapplicable to the Company:
(a) Drugs and Cosmetics Act 1940;
(b) The Legal Metrology Act 2009 and
(c) The Legal Metrology (Packaged Commodities) Rules 2011.
VI. Compliance with the applicable clauses of the Equity Listing Agreement entered intoby the Company with BSE Limited and National Stock Exchange of India Limited.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines etc. mentioned above.
D. We further report that
I. The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Companies Act 2013.
II. Adequate notice is given to all Directors to schedule the Board Meetings agendaand detailed notes on agenda were sent well in advance and a system exists for seekingand obtaining further information and clarifications on the agenda items before themeeting and for meaningful participation at the meeting.
III. The agenda items are well deliberated before passing the same and the views /observations made by the Directors are recorded in the minutes.
E. We further report that there are adequate systems and process in the Companycommensurate with its size and operations to monitor and ensure compliance with applicablelaws rules regulations and guidelines.
F. We further report that during the audit period none of the following events hastaken place:
I. Public / Rights / Preferential Issue of Shares / Debentures / Sweat equity etc.
II. Redemption / buy back of securities
III. Major decisions taken by the members in pursuance to Section 180 of the CompaniesAct 2013.
IV. Merger / Amalgamation / Reconstruction etc.
V. Foreign Technical Collaborations.
For DHOLAKIA & ASSOCIATES LLP
| ||CS Bhumitra V. Dholakia |
| ||Designated Partner |
|Place : Mumbai ||FCS - 977 CP No. 507 |
|Date : 28th August 2015 || |