Gillette India Ltd Directors Report.

Your Directors have the pleasure of presenting the 37th Annual Report and the Audited Financial Statements of the Company for the Financial Year ended June 30, 2021.

FINANCIAL RESULTS

(Figures in Rs. Crores)

Particulars 2020-21 2019-20
Revenue from operations 2,009 1,679
Profit before tax 429 314
Profit after tax 310 230

FINANCIAL YEAR

The Companys Financial Year is July 1st to June 30th .

DIVIDEND

During the Financial Year, the Board of Directors declared an interim dividend of Rs. 33 per Equity Share and a special dividend of Rs. 50 per Equity Share. The payment of the said interim dividend and special dividend to the Shareholders was completed on February 25, 2021 and May 28, 2021 respectively. Your Directors are pleased to recommend a dividend of Rs. 36 per Equity Share for the Financial final dividend is Year ended June 30, 2021. This subject to approval of the members at the ensuing 37th Annual General Meeting.

BUSINESS PERFORMANCE

Despite a challenging market environment due to COVID-19, your Company delivered a strong performance with sales of Rs. 2,009 crores up 20% vs year ago and Profit after tax of Rs. 310 crores up 35% vs year ago during the Financial Year 2020-21.

GROOMING

Your Companys grooming business had one of the milestone years this time. Our irresistible superiority on product and commercial innovations continued to add millions of new users to the Gillette franchise delivering holistic topline, bottom-line and share growth.

This year, we launched Gillette Guard 3, an affordable three blade system razor that provides the smoothest shave in just one go. We also launched King C Gillette, a premium range of unparalleled grooming products backed by 100+ years of research and development, marking our entry into beard care segment. Gillette Guard, our pioneering entry level system, registered its strongest year-on-year value, volume and share growth behind product restage with Guard Platinum, strong awareness, activation and go-to-market plans. Gillette Double Edge blades continued to grow behind strong fundamentals.

In the brands female grooming portfolio, Gillette Venus, registered its strongest year-on-year value, volume and share growth.

As a result of key interventions across the Gillette portfolio, we recorded our highest-ever market share in the Blades and Razors category this Financial Year.

ORAL CARE

After an extremely strong Financial Year 2019-20, Oral-B delivered another year of strong results in Financial Year 2020-21 with strong growth across value share, volume share and market penetration for the brand. We led the innovation in this category by introducing the superior Criss Cross range of toothbrushes, expanding our naturals portfolio with the launch of mid-tier charcoal toothbrushes. We launched Complete Clean, our entry-level toothbrush which will help bring quality oral care at an affordable price to millions of consumers. In the electric toothbrush range, we drove stronger growth behind our digital activations to help deliver on our promise to provide superior oral care to our consumers. The combination of strong innovations, with a robust go-to-market execution and strong media presence led to meaningful value to our consumers and customers helping us grow significantly ahead of the category.

We continued to leverage our targeted trial programs and deeper distribution plans enabling more consumers to have access to superior brushes. Oral-B continued its collaboration with dentists, to promote oral health awareness with the launch of the Smile Suraksha Program, in collaboration with the Indian Dental Association.

FINANCIAL RATIOS

2020-21 2019-20 Change (%) Explanation for changes over 25% in the ratios, if any
Debtors turnover 10.3 9.0 15 -
Inventory turnover 6.2 6.5 -5 -
Interest coverage ratio 82.8 58.7 41 Improvement is due to strong profit growth, while maintaining low interest expense.
Current ratio 1.5 2.0 -29 The ratio has decreased on account of higher Trade Payables.
Debt equity ratio - - - -
Operating profit mar 22% 19% 14 -
Net profit 15% 14% 13 -
Return on Networth 37% 27% 34 The variation is on account of higher Dividends paid out in this financial year.

BUSINESS RESPONSIBILITY REPORT

A separate report on Business Responsibility has been appended as Annexure I to this Report.

CORPORATE SOCIAL RESPONSIBILITY & CITIZENSHIP EFFORTS

Since its foundation, giving back to the communities has been an integral part of your Companys purpose and values. Our CSR strategy is supported by three pillars – P&G Shiksha, P&G Suraksha India and Timely Disaster Relief. P&G Shiksha provides access to holistic education for underprivileged children through a 360-degree educational intervention. In response to the COVID-19 pandemic, the Company launched the ‘#PGSurakshaIndia program through which we have been positively impacting communities in partnership with the government and relief organization. Your

Companys disaster relief aims to provide comforts to those affected by natural disasters.

P&G SHIk SHA

Your Companys signature corporate social responsibility program P&G Shiksha has focused on three main areas – improving education infrastructure, empowering marginalized girls through education and improving learning outcomes. Till date, the P&G group in India has supported over 2,500 schools (+200 since last year) across the country that will impact the lives of over 23 lakh children (+300,000 since last year). Along with our NGO partner Round Table India (RTI), we have focused on building and refurbishing school buildings, constructing classrooms, building playgrounds and improving health and hygiene facilities for children at schools. In line with the Sustainable Development Goals (SDGs) and in partnership with NGO Save the Children, we are providing quality education to girls by enhancing the education infrastructure and the quality of education available to them.

A key area that we have focused on is ‘improving learning outcomes in children. Within this, we have concentrated our efforts in bridging learning gaps through software-based adaptive learning solutions across government schools, on-ground remedial learning interventions and strengthening early childhood education. P&G Shiksha also partnered with Educational Initiatives (EI) to implement Mindspark, a computer-based adaptive learning tool to remediate learning gaps in students across schools in Rajasthan, Himachal Pradesh, Maharashtra, Madhya Pradesh and Andhra Pradesh. The tool integrates pedagogy, teacher instruction and a learning management system to assess students learning level and develop a customized learning path for each one of them. During the pandemic-related lockdown, we upgraded the tool to make it available on smartphones and enabled more than 60,000 children to continue learning at home. Despite school closure, the learning levels of all students engaged in the program were sustained or improved. We also set up a helpline wherein students who didnt have access to smartphones could learn via a phone call.

Along with our NGO partner, Pratham Education Foundation, we are bridging the expected and existing learning gaps in children through on-ground remedial learning interventions. During the lockdown, we shared simple project-based activities with children focused on language, math, and science to enable them to continue learning. We leveraged WhatsApp, phone calls and SMSs to share a series of curated messages in text, audio and video formats. With the easing of the lockdown, we adapted our approach to conduct learning activities for children not just remotely but within the communities through identified and trained volunteers. During the year, we reached out to more than 30,000 children via online education and community-based learning interventions. At the end of the intervention, more than 70% of children could read and perform arithmetic basis their grade level compared to less than 20% at the start of the intervention.

Through our early childhood education program in partnership with Pratham Education Foundation, we aim to develop motor and cognitive skills in children thereby setting them up for a fast-paced growth as they start school. During the pandemic related lockdown, we engaged with parents to conduct learning activities with children at home using simple materials available at home like fruits, vegetables, beads, clay and more. We also identified and trained volunteers from within the community who conducted learning activities with children. During the year, we reached more than 55,000 children through this program. At the end of the intervention, more than 80% of children in the intervention group demonstrated socio-emotional, cognitive, motor and language skills compared to less than 10% at the start of the intervention. Your Company also continued to impact the communities around its plants in a holistic manner throughout the Financial Year.

# PGSURAK SHAINDIA Our COvid-19 response

AND RELIEF EFFORT

As a responsible corporate citizen in India, your

Company stepped up and partnered with the government and relief organizations to serve employees, consumers and communities in need via our holistic COVID-19 response and relief program

# PGSurakshaIndia.

Vaccination is critical to contain the spread of the pandemic. The P&G group in India, has contributed nearly Rs. 50 Crores towards 10 lakh vaccine doses.

This has been donated to 20+ state governments that will benefit nearly 5 lakh citizens. Masks and hand sanitizers are essential in our fight against COVID-19.

The P&G group in India has also donated nearly 20 lakh masks and sanitizers to support frontline workers. Your Company is also partnering with TATA

Trusts to support hospital capacity expansion in the country, an essential need during these tough times. In addition to this, your Company leveraged its communications expertise to encourage consumers to follow public health measures like social distancing, to help flatten the curve and slow the spread of the virus.

Last year, your Company extended its support to the barber community who are impacted by the lockdown, through its ‘Gillette Barber Suraksha

Program. The program aimed to educate, protect and provide resources to them as they return to business. Gillette provided an insurance cover of up to 1 lakh to barbers, educated them on safe operations via videos co-created with stylist Aalim

Hakim and provided them back-to-business support through a curated product-kit that would cover their requirement for two months. Taking a step further, this year, Gillette launched the ‘Barber Parivaar Suraksha Program to provide an insurance cover not just to barbers but also their families.

With guidance from medical professionals, were constantly evaluating and updating the robust measures already in place to help our people, who are making, packing and shipping products, stay safe at work, and, where possible, enabling others to work from home. We have put in place measures like temperature scans, shift rotations, queueing avoidance, physical distancing, personal protective equipment for all including hand sanitizers and masks. We are also conducting comprehensive, methodical cleaning of all production areas and offices, including regular sanitization and surface disinfections that exceeds the most rigorous health authority standards. Further, your Company is facilitating voluntary vaccination drives for employees for their health and safety.

We provided financial support to families impacted by COVID-19 through our employee fund raiser program. We also empowered partner employees with insurance covering risks against COVID-19, cashless treatment or reimbursement of medical expenses.

Your Company will continue to support the communities in partnership with government and relief organizations in the countrys fight against COVID-19.

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

ENVIRONMENTAL SUSTAINABILITY AND CONSERVATION OF ENERGY

Environmental sustainability is embedded in our Purpose, Values, Principles, and our business. We are committed to improving lives, now and for generations to come by ensuring that our products, packaging and operations are safe for employees, consumers and the environment. We ensure by focusing on technologies, processes and improvements that matter for the environment.

Within our operations, we strive to grow responsibly, continuously improve our efficiency while reducing our carbon footprint. All the manufacturing plants in India are ‘zero waste to landfill sites which means that there is no manufacturing discharge into the environment.

Our plants are leveraging technology, experts, employees and renewable sources of energy to reduce our overall carbon footprint, improve energy and water efficiency and make our operations more sustainable. Your Companys plant at Bhiwadi has significantly reduced its environmental footprint and is adopting advanced waste management systems to improve water circulation. Apart from this, the plant is also raising awareness about environmental sustainability in the neighboring community through engagements and plantation drives.

Stepping up as a force for good in response to COVID-19

With the outbreak of the pandemic, we launched our COVID-19 response and relief program #PGSurakshaIndia to serve our employees, consumers and communities.

PROTECTING P&G PEOPLE

With guidance from medical professionals & health experts, were continuously updating the robust safety measures at our offices and plants to help our people stay safe at work

We set-up a dedicated ‘COVID CARE HELPDESK that has supported employees and their family members on health queries, testing, treatment, doctor consultation, medication, hospitalization and vaccination

We partnered with the government & industries to kickstart ‘Suraksha Circles & engaged with organizations to lay down hygiene & safety standards at manufacturing facilities

SERVING CONSUMERS

As P&G group, were leveraging our brands voice to reach 5 crore+ consumers with important safety and hygiene messages like social distancing, wearing masks and encouraging vaccination to help combat the spread of the virus

We launched ‘force for good campaigns like Gillette Barber Parivaar Suraksha Program

Our in-store counsellors & DTC team are connecting with consumers via telephone and through social media videos to raise awareness on hygienic practices

SUPPORTING COMMUNITIES

The P&G group in India, contributed Rs. 50 Cr towards 10 lakh vaccine doses, for 5 lakh Indian citizens

We partnered with relief organizations to support hospital capacity expansion and donated oxygen concentrators to local authorities

The P&G group in India, donated 20 lakh+ masks and sanitizers to frontline workers & underprivileged communities

We are committed to help reduce the by making changes now and bringing long-term solutions. We have put in place a system to recover and recycle multi-layered plastic packaging waste.

We are working with various waste management companies and the industry to collect, segregate and recycle multi-layered plastic packaging waste.

Were building partnerships with external organizations to combat some of the challenges and issues we are facing today on sustainability. In 2019, as P&G India group, we set up an ‘Environmental Sustainability Fund, to collaborate with external partners offering environmentally sustainable business solutions.

Through this fund, our goal is to identify and implement step-changing environmentally sustainable solutions like packaging innovations, renewable sources of energy and reducing carbon footprint. Certain measures taken by our Plant sites for conservation of energy are given below:

1. Inspection of compressed air systems and equipment for air leakage detection:

Regular inspection and maintenance of compressed air systems and use of specialized equipment for air leakage detection has minimized compressed air leaks and resulted in reduction in consumption of power.

2. Installation of automatic tube cleaning system for chillers:

Automation in cleaning systems has reduced the usage of water as well as resulted in a reduction of power consumption used by air cooling systems which is among the largest consumers of electricity.

3. Optimization of temperature:

Optimization of the shop floor area temperature led to load reduction on the chiller resulting in power savings.

TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT

Your Company has the advantage of availing advanced technology and continuous upgradation thereof from The Procter & Gamble Company, USA and its subsidiaries (Procter & Gamble group). This is an unmatched competitive advantage that helps the Company deliver strong business results. Your Company benefits from the Procter & Gamble groups research and development efforts and activities across the globe. Technology absorption and adaptation is a continuous process. The products manufactured / sold by the Company are a result of the imported technology received on an of plastic ongoing basis from the Procter & Gamble group.

Initiatives are constantly undertaken for innovation of products, new product development, improvement of packaging, enhancement of product quality and application of best information technology to automate, simplify and generate efficiencies in various business processes.

The Company, having ongoing access to cutting-edge technology, derives benefits such as product development, consistent superior product quality, process efficiencies, cost effectiveness and energy efficiency.

As the Company avails benefits of research and development of the Procter & Gamble group across the globe, your Company has not incurred any expenditure on research and development during the Financial Year.

FOREIGN EXCHANGE EARNINGS & OUTGO

The details of foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014 are mentioned below:

(Rs. in Lakhs)

For the year ended June 30, 2021 For the year ended June 30, 2020
Foreign Exchange earnings 11,980 14,056
Foreign Exchange outgo 57,284 46,918

RELATED PARTY TRANSACTIONS

Your Company has formulated a policy on related party transactions which is available on Companys website at https://in.pg.com/india-governance-and-policies/gil/terms-and-policies/. 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, entered in the ordinary course of business and at arms length. All related party transactions are subjected to independent review by chartered accountant firm to confirm compliance with the requirements under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Details of material related party transaction entered into during the Financial Year 2020-21 are given below:

Name of Related Party Procter & Gamble International Operations S.A., Singapore Branch
Nature of transaction Import of Finished goods
Amount of transaction during Financial Year 2020-21 Rs. 260 crores

The above transaction was approved by the Shareholders by passing an Ordinary Resolution through Postal Ballot on January 8, 2018. Being related parties, the Promoter shareholders had abstained from voting on the said resolution.

All related party transactions entered during the Financial Year were in the ordinary course of business and on arms length basis. 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.

LOANS AND GUARANTEES GIVEN AND INVESTMENTS MADE

Your Company has not given any loans, guarantees or made any investments during the Financial Year.

PUBLIC DEPOSITS

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

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has constituted Internal Complaints Committee. During the Financial Year, two complaints with allegations of sexual harassment were filed with the Company. The complaints were closed during the Financial Year. No complaints were pending as on June 30, 2021.

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, 2021, 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, 2021, 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 Annual Report.

ANNUAL RETURN

The Annual Return for Financial Year 2020-21, as required under Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company at https://in.pg. com/india-investors/gil/reports-announcements/ announcements/.

MANAGEMENT & PERSONNEL

The strength of business over the past few years and resilience in this particular year, due to COVID-19 pandemic & multiple economic headwinds in the country, demonstrates the core strength of our employees to stay innovative, reality based and influence the course of business. Financial Year 2020-21 was a year of unprecedented challenges, yet our focus on delivering superiority, fueled by productivity via an empowered organization helped us deliver business results in these tough times.

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

Annexure III to this 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 Companies Act, 2013, this 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 investorgil.im@pg.com.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Narendra P. Sarda ceased to be Director of the Company on August 28, 2020 on completion of his tenure as Independent Director. The P&G Management and the Board of Directors of the Company express their deepest gratitude for the guidance and counsel provided by Mr. Sarda during his tenure as a Director of the Company.

Mr. Bansidhar S. Mehta ceased to be Director of the Company and Chairperson of the Board on September 28, 2020 on completion of his tenure as Independent Director. Mr. Mehta, being a stalwart in the taxation profession and having deep knowledge about business in India, has been instrumental in the Companys sustained growth over the decades through his guidance and counsel to the Company.

The P&G Management and the Board of Directors of the Company express their deepest gratitude for Mr. Mehtas valuable guidance, leadership, direction and counsel to the Company.

Mr. Gurcharan Das, Independent Director was appointed as the Chairman of the Board with effect from September 29, 2020.

Mr. Gagan Sawhney ceased to be the Chief Financial Officer of the Company effective July 31, 2021 was re-designated as Non-Executive Director of the Company effective August 1, 2021. Mr. Gautam Kamath has been appointed as the Chief Financial Officer of the Company effective August 1, 2021. The Board of Directors, on the recommendation of the Nomination & Remuneration Committee has also appointed Mr. Gautam Kamath as an Additional Director upto ensuing Annual General Meeting of the Company and Executive Director for a period of five years, effective August 1, 2021, subject to requisite approvals.

The Board of Directors on the recommendation of the Nomination & Remuneration Committee have appointed Mr. Srinivas Maruthi Patnam, as an Additional Director upto the ensuing Annual General Meeting of the Company and Executive Director for a period of five years, effective September 1, 2021 The said appointment is subject to approval of the Shareholders of the Company at the ensuing Annual General Meeting of the Company.

Mr. Karthik Natarajan was redesignated as Non- Executive Director of the Company effective August 24, 2021.

Mr. Ghanashyam Hegde shall cease to be the Company Secretary & Compliance Officer of the Company effective August 31, 2021. Ms. Flavia Machado has been appointed as the Company Secretary & Compliance Officer of the Company effective September 1, 2021. Mr. Karthik Natarajan and Mr. Gagan Sawhney, Directors, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing 37th Annual General Meeting.

Brief profiles and details of the Directorships of Directors proposed to be appointed and re-appointed as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained in the Notice convening the ensuing 37th Annual General Meeting of the Company.

Appropriate resolutions for the appointment / re-appointment of the aforesaid Directors are being proposed at the ensuing 37th Annual General Meeting, which the Board recommends for approval of the Shareholders of the Company.

The Independent Directors of your Company have given declarations to your Company stating that they meet the criteria of independence as mentioned under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board is of the opinion that all the Independent Directors of the Company possess integrity, have relevant expertise and experience and fulfill the conditions specified under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the familiarization programme and Annual Board Evaluation process for Directors have been provided under the Corporate Governance section of the Report.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

Four (4) meetings of the Board of Directors of the Company were held during the Financial Year. For further details on meetings of the Board of Directors and its Committees, please refer to the Corporate Governance section of the Annual Report.

POLICIES

Your Company has adopted policies on related party transactions, corporate social responsibility, vigil mechanism, nomination and remuneration, materiality of events and dividend distribution which are available on the website of the Company at https://in.pg.com/india-governance-and-policies/gil/ terms-and-policies/.

AUDITORS

Kalyaniwalla & Mistry LLP, Chartered Accountants were appointed as Statutory Auditors of your Company at the 33rd Annual General Meeting held on November 15, 2017 for a term of five years.

The Report given by Kalyaniwalla & Mistry LLP, Statutory Auditors on the financial statements of the Company for Financial Year ended June 30, 2021 is part of this Report. There has been no qualification, reservation or adverse remark given by the Auditors in their Report.

SECRETARIAL AUDIT

Secretarial Audit was carried out by M/s. Saraf & Associates, Practicing Company Secretaries for the Financial Year 2020-21. There were no reservation or adverse remarks given by Secretarial Auditors of the Company. The Secretarial Audit report has been appended as Annexure IV to this Report.

SECRETARIAL STANDARDS

During the Financial Year, your Company has complied with mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

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 and knowledge in the field 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.

Your Directors place on record its deep appreciation for the co-operation and support of the Government authorities, distributors, wholesalers, retailers, consecutive suppliers, clearing and forwarding agents, business associates, bankers, consumers, employees and

Shareholders and look forward to their continued support on the journey ahead.

On behalf of the Board of Directors
Mumbai Gurcharan Das
August 24, 2021 Chairman