TO THE MEMBERS
The Directors have pleasure in presenting their Twenty-Ninth Annual Report together
with the Audited Accounts for the Financial Year ended June 30, 2013.
(Figures in Rs. Crores)
|Sales (less excise duty)
|Other Operating Income
|Profit before tax & exceptional items
|Profit after tax
|Transfer to General Reserve
|Proposed dividend plus tax thereon
|Balance carried forward
Your Directors are pleased to recommend, subject to the approval of the Members and
subject to the approval of the Securities and Exchange Board of India (SEBI), a dividend
of Rs. 15/- per equity share of Rs.10 each, amounting to Rs. 48.88 Crores, for the
Financial Year ended June 30, 2013.
Your Company achieved a healthy sales growth during the Financial Year ended June 30,
2013. The total sales (net of excise) at Rs. 1,435 Crores are up by 17% when compared to
Rs. 1,229 Crores of the previous year. The sales in all three business segments have grown
strongly. Your Directors are pleased with these solid results that are driven by a
continued focus on the consumer, robust innovation and distribution expansion.
Profit Before Tax (PBT) for the Financial Year under review is Rs. 138 Crores as
against Rs. 117 Crores last year. Profit After Tax (PAT) for the Financial Year under
review stood at Rs. 87 Crores as against Rs. 76 Crores last year. The PBT and PAT have
increased versus year ago, due to strategic pricing and continued rigour on all costs.
PERSONAL GROOMING- BLADES & RAZORS
Gillette Personal Grooming portfolio had a strong year with high double digit growth
combined with market share growth across Blades & Razors and Personal Care category.
This was driven by robust performance across all product and price tiers through
base-brand building activities and expanding our product offering.
Fusion Power is Gillette`s latest introduction in premium-tier Blades & Razors
segment. The battery-powered razor adds to the features of the Gillette Fusion manual
razor with power-glide blades and soothing micro-pulses, thus, providing consumers with a
superior shaving experience.
Our premium line of systems registered strong performance with both Mach3 and Fusion,
delivering double digit growth behind strong razor placement, and, Go-to-Market plans and
innovative marketing campaigns like "Soldier for Women" and "Shave
India" movement through the Financial Year.
Gillette "Soldier for Women" , a unique initiative by your Company was
launched in January, 2013. This initiative encouraged and gave voice to millions of men
who embrace the values of courage, camaraderie, integrity and respect for women. Gaining
support from across cities and people from different walks of life, the campaign went on
to become a national movement, reaching out to millions of men and women across the
Gillette Guard, the Entry Level system, which was specially designed for low-income
group consumers, continued to register strong double digit growth by value and volume.
Gillette Guard has had the fastest-ever build of share and distribution across categories
in India and is now present in over 1 million stores across the country.
Gillette Double edge blades continued to grow value-share primarily led by its
7-o`clock and Wilkinson Sword brands.
The Gillette Personal Care Category comprising of pre-shave and post-shave products has
performed exceptionally well and grown share across the portfolio led by Tube Shave Gel.
It helped further strengthen our position versus competition in the pre-shave category.
Thus, your Company continued to grow across the portfolio through the Financial Year.
Gillette India wins PR Lion at Cannes Ad Fest:
Your Company`s campaign "Shave or Crave" as part of the "Shave India
Movement" has won a PR Lion at the Cannes ad festival this Financial Year. This is
the fifth year in a row, that Gillette`s marketing campaign has been recognized at this
prestigious global forum.
Oral-B continues to grow across all tiers. Initiatives focused on establishing
superiority of Cross Action helped Oral-B grow in the super premium tier segment. Oral-B
has led innovation this year launching two new technologically superior products - Top of
the line manual brush called `Pro-health Clinical` and `Allrounder-Sensitive` . The
sensitive toothbrush market is growing at more than 50% and Allrounder-Sensitive is
specifically designed and suited to the needs of the Indian market. Oral-B 123 continues
to lead our growth in the premium tier by providing superior propositions to the
consumers. Dedicated TV initiatives on Oral-B Shiny Clean along with strong plans to drive
deeper distribution further helped strengthen Oral-B`s position in the mid-tier segment.
Multiple initiatives were undertaken to expand Oral-B distribution, which resulted in the
brand being available to more consumers across India.
Oral-B, which is the World`s No. 1 dentist recommended toothbrush brand, (Based on
surveys of a representative worldwide sample of Dentists carried out for P&G)
continued its partnership with dentists across India, to promote oral health awareness for
yet another year through its Oral-B Smile India Movement-3 initiative. This campaign
helped in improving the lives of consumers by educating them on oral hygiene and by
offering them a free dental checkup close to their residence simply on the purchase of an
After years of growth and delighting the consumers with superior brushing experience,
Oral-B has launched its revolutionary toothpaste technology to the Indian consumers during
the last quarter of the Financial Year. Oral-B has launched 3 tiers of toothpaste in both
Gel and Paste form in the Rs. 6,000 Crore toothpaste market. This has been very well
received by dentists and retailers in the month of June, 2013. The marketing and
promotional expenses in this highly competitive category will begin in July, 2013 and will
impact near term earnings growth.
For the Financial Year 2012-2013, Duracell has achieved robust sales growth due to
successful price up helping in earnings improvement behind volume growth and higher
Duracell has increased the scope by shifting the communication from only high drain
device to everyday use device like Torch. This has helped us to increase the scope of
target audience. In the coming future, Duracell will continue to outperform the category
focusing on everyday device consumers in need of superior performance, whilst continuing
to service "Aspiring Indian" consumers who seek value for money from the
Your Directors have the pleasure of informing you that during the Financial Year under
review, the Bhiwadi and Baddi plants continued to perform at record levels and delivered
all time high throughputs. In the past years, both Bhiwadi and Baddi plants achieved
benchmark productivity improvements. Work System Renewal related changes have been
initiated which is expected to enhance long term people capability to continue to meet the
business needs. The plants delivered outstanding performance in all key measures -Safety,
Quality and Cost.
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 ofconsumers, 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 empower the victims of natural disasters by reinstating crucial
P&G`s signature corporate sustainability 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 Vidyalayas. Similarly, The NGO`s Army Wives Welfare Association and
Navy Wives Welfare Association are experts in serving the educational needs of disabled
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 the sales towards this movement. By the end
of this Financial Year, P&G Shiksha will have made a cumulative donation of over Rs.
30 Crores towards building new schools, providing critical infrastructural amenities at
existing schools or reviving non-operational government schools.
In partnership with NGO Save the Children, P&G under the Kasturba Gandhi Balika
Vidyalaya program in Rajasthan has helped in conducting awareness campaigns on the Right
to Education in 45 villages as well as motivational camps for around 400 out of school
children, in an effort to increase enrolment in schools and reduce drop outs.
At about 20 km from the Bhiwadi Plant, P&G has adopted a school located in the
remote Gwalda village of the Mewat region of Alwar district. The objective was to provide
girls good quality education, healthy breakfast, and school essentials such as dresses,
bags and learning material. This initiative also received special recognition from the
Government of Rajasthan as well as the NGO IBTADA for its quality work. 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`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
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 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. Your Company`s Plant at
Bhiwadi, Rajasthan has saved 13.3 million litres of water last year and 500 gigajoules of
energy, equivalent to the daily energy needs of more than 12,000 people in India.
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` Responsibility 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
iv. that the Directors had prepared the accounts for the Financial Year ended June 30,
2013, on a "going concern" basis.
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.
Mr. Jyoti Sagar and Mrs. Nayantara Bali resigned as Directors of the Company with
effect from October 11, 2012 and March 13, 2013, respectively.
The Board places on record deep appreciation for the contributions made by them during
their respective tenure as Directors of the Company.
Mr. C R Dua and Mr. Gurcharan Das retire by rotation at the forthcoming 29th
Annual General Meeting, and being eligible, offer themselves for re-appointment.
Brief resumes of Mr. C R Dua and Mr. Gurcharan Das 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 re-appointment of the aforesaid Directors are being moved
at the 29th Annual General Meeting, which the Board recommends for your
MINIMUM PUBLIC SHAREHOLDING REQUIREMENT PRESCRIBED BY THE SECURITIES AND EXCHANGE BOARD
OF INDIA (SEBI)
In terms of amendment to the Securities Contracts (Regulation) Rules, 2010, your
Company was required to achieve Minimum Public Shareholding (MPS) of 25% by June 3, 2013.
Your Company is taking necessary steps for ensuring compliance with the MPS requirement. A
detailed note in this regard is given in the "Corporate Governance" section of
the Annual Report.
The Auditors, M/s. Deloitte Haskins & Sells, Mumbai, Chartered Accountants
(Registration No. 117366W) retire and offer themselves for re-appointment.
Your Company has appointed M/s. Ashwin Solanki & Associates, Cost Accountants, to
conduct the cost audit for the Financial Year ended June 30, 2014. The Company has
received the necessary Central Government approval for the re-appointment of the said Cost
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, forms part of this Report.
HUMAN RESOURCE DEVELOPMENT
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 ("the 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 corporate office of the
Your Directors wish to place on record their appreciation of the services rendered by
the Company`s suppliers, distributors, wholesalers, retailers, clearing and forwarding
agents and all other business associates and acknowledge their efficiency and continued
support in producing such healthy growth in the Company`s business.
For and on behalf of the Board
S. K. Poddar
August 6, 2013
ANNEXURE TO THE DIRECTORS` REPORT
Particulars required under the Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988.
A. CONSERVATION OF ENERGY
The Company has an efficient energy conservation task force, which is actively involved
in continuous monitoring of energy usage and its conservation.
1. measures taken for conservation of energy this year were :
(a) Installed three Coil Coolers for Diesel Generators to eliminate water losses;
(b) Installed chilled water line from central chiller resulting in savings;
(c) DG : Grid ratio improvement from IEX and power availability got better for the
Company`s site through this; and
(d) Purchasing of Power through IEX (Open Access) resulted a savings of approx. Rs.
2. Plans for next year:
(a) Synchronizing Gensets with Grid to avoid one tripping at production floor also
minimize running of plant on Genset after availability of city power.
(b) Project of replacing shop floor lights with LED lightings.
(c) Plan to get an energy audit done to identify areas of energy conservation.
(d) Installation of Street lights with Light intensity or exploring possibilities of
(e) Optimization of Chillers through connecting into a single system.
B. TECHNOLOGY ABSORPTION
Efforts made in technology absorption as per Form B.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Efforts and initiatives in relation to exports:
The Company`s products continue to be accepted in overseas markets. Efforts are on to
further increase exports of personal grooming products to other countries.
2. The particulars of foreign exchange utilized/earned during the year are given in
Note no. 30 and 31 to the Accounts, respectively.
For and on behalf of the Board
S. K. Poddar
Date: August 6, 2013