P & G Hygiene Director Discussions


Your Directors have the pleasure of presenting the 58th Annual Report and the Audited Financial Statements of your Company for the Financial Year ended June 30, 2022.

FINANCIAL RESULTS

(Figures in Rs. crores)

2021-22 2020-21
Revenue from operations 3,901 3,574
Profit before tax (PBT) 790 870
Profit after tax (PAT) 576 652
Earnings per share
- Basic () 177.37 200.79
- Diluted () 177.37 200.79

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 95 per Equity Share.

The payment of interim dividend to the shareholders was completed on February 25, 2022.

Your Directors are pleased to recommend a final dividend of 65 per Equity Share for the Financial

Year ended June 30, 2022. This final dividend is subject to approval of the Members at the ensuing 58th Annual General Meeting.

ECONOMY AND MARKETS

The operating environment this year continued to be volatile, with unprecedented challenges, with high inflation in key commodities and supply chain disruptions, among others.

Despite these headwinds, the Indian economy grew by 8.7%* in 2021-2022 as we emerged from the pandemic. Several initiatives and measures introduced by the government, most importantly the accelerated rate of vaccinations, provided impetus and contributed towards economic recovery by aiding mobility, resumption of services and helping boost consumer confidence. The pandemic accelerated many consumer and market trends, including the emergence of new channels, an enhanced focus on health, hygiene, and wellbeing. Digital dependency in everyday consumer lives increased substantially. However, inflation has ebbed consumption momentum, especially in rural markets.

OPPORTUNITIES, RISK AND OUTLOOK

The International Monetary Fund (IMF) projects Indian economy to grow by 7.4%^ in 2022-2023. With this,

India will remain to be one of the fastest growing major economies in the world in 2022-23.

* Source: Press release of Ministry of Finance dated August 1, 2022.

However, IMF projects global inflation in 2022 at 8.3%^. Sustained inflationary outlook, supply-chain constraints and external headwinds will continue to pose challenges. Amidst this, it will be imperative for companies to navigate through uncertainties caused by external factors and leverage the available opportunities with agility.

While short to medium term challenges exist owing to a weak global economic outlook, the long-term outlook for the FMCG sector remains positive. Your

Company is well positioned to sustain and improve its performance with a resilient workforce, leverage opportunities with agility, address challenges and overcome the risks.

^ Source: IMF World Economic Outlook, July 2022.

Your Company has delivered great results over the years, in a volatile macro environment against very capable competition, through focus on executing our integrated strategies with excellence. We are focused on delighting and serving consumers, customers, society and shareholders through five strategic and integrated choices: a portfolio of products where performance drives brand choice; superiority across product, package, brand communication, retail execution and value; productivity in everything we do; constructive disruption across the value chain; and an agile, accountable and empowered organization. These are not independent strategic choices. They reinforce and build on each other, and when executed well, they lead to balanced top-line and bottom-line growth and value creation. There is still meaningful opportunity for improvement and leverage in every facet of this strategy, and we continue to work to strengthen our execution of these choices.

BUSINESS PERFORMANCE

Despite unprecedented headwinds from macroeconomic challenges and softening consumption trends, your Company continued to grow and delivered a resilient performance in the fiscal with sales of 3,901 crore, up 9% versus year ago, behind the proven superiority strategy and strong brand fundamentals. Profit after tax (PAT) was 576 crore, down 12% versus year ago, largely behind commodities inflation which was significantly countered by cost productivity and pricing in the current year. Compared to the fiscal two years ago, the Companys sales are up 30% and PAT is up 33%. The execution of our integrated strategies of a strong portfolio, superiority, productivity, constructive disruption, and an agile and accountable organization structure, has empowered us to deliver these consistent results. Our strategy is fuelled by balancing innovation and industry-leading practices, while driving productivity in everything we do. While the unprecedented market challenges and uncertainties remain in the near-term, we will continue to stay focused on our strategy of driving superiority and productivity and enabled by the strength of our organization and culture, to deliver balanced growth and value creation.

FINANCIAL RATIOS

2021-22 2020-21 % Change
Debtors (trade 23.42 23.16 1%
receivables)
turnover
Inventory turnover 16.14 15.73 3%
Return on 0.04 0.04 -10%
investment
Return on capital 0.97 1.10 -11%
employed
Net capital 14.14 12.68 12%
turnover
Trade payables 2.01 1.87 8%
turnover
Interest coverage 102.8 143.4 -28%*
ratio
Current ratio 1.32 1.34 -1%
Operating profit 20% 25% -17%
margin
Net profit margin 15% 18% -19%
Return on 79% 70% 14%
Networth

* The variation is on account of higher interest on income tax in the current year.

Feminine Care Business

We continue to delight our consumers with strong innovation across the portfolio. We continue to be market leaders despite tough external environment including consumer down tiering trends and commodity price impact. Whisper made investments to continue to strengthen product performance. Whisper launched the new and improved Choice XL and Choice Ultra, to delight our consumers with superior proposition.

Our premium nights business continues to thrive behind identification of the No.1 unmet consumer need- Nighttime leakage, enabling premiumization. Whisper also launched an affordable nights range

-Whisper Choice Nights to provide our consumers with relevant propositions to meet their needs, like prevention of night-time leaks.

Whispers flagship campaign #KeepGirlsInSchool, now in its 3rd year, continues to raise awareness about the issue of girls dropping out of school when they attain puberty. Whisper continues to bring transformational change in the community. Through our Whisper Menstrual Health & Hygiene School program and other consumer touchpoints, last year we actively reached 50,000+ schools educating about 9.9 million adolescent girls on the importance of menstrual hygiene.

#KeepGirlsInSchool also received the highest external recognition for purpose campaigns- The Cannes Grand Prix in the sustainable development goals category reinforcing the impact & the positive reception of this longstanding campaign.

Health Care Business

Your Companys health care business delivered strong growth this Financial Year. Your Company continued to win externally and grow market share in the Cough & Cold category with strong offtake growth behind the strength of our portfolio, which includes Vicks VapoRub, Vicks Throat Drops, Vicks Action 500 Advanced, Vicks Inhaler and Vicks Baby Rub growth.

With world-class communication, most of our sub-brands continued to grow market share. The business was further strengthened by strong innovations including Vicks Roll-On Inhaler and Vicks Xtra Strong. This is also the first year where we have ventured into piloting the launch of a cough syrup- Vicks Tulsi Ginger Cough Syrup. Superior go-to-market strategy enabled enhanced presence in stores with more visibility touch points per store.

Your Companys healthcare business is also able to grow penetration across its entire range thereby bringing meaningful change to the lives of consumers.

Old Spice

Old Spice 0% Gas deodorants demonstrated strong double-digit growth strengthening the brands foothold in the category.

Overall, your Company continued to focus on driving consumer meaningful innovations backed by distribution expansion and strong advertising thereby delivering consistent growth.

RISK MANAGEMENT

Your Company has set up a Risk Management Committee. The Company has also adopted a Risk Management Policy. The Companys Risk Management Policy is in line with the parent Companys global guidelines and as such adequate measures have been adopted by the Company to anticipate, plan and mitigate the spectrum of risks it faces.

BUSINESS, FINANCE & OPERATIONAL RISKS

On business risks, the Company undertakes a Competition Response Model program. For financing risks, it has a robust operational contingency plan. It also undertakes Business Contingency Plan for key vendors and natural disasters. The Company also has adequate Insurance coverage to protect the value of its assets. This coverage duly covers any risks relating to business interruption resulting from property damage and legal liability resulting from property damage or personal injury. The Company has in place a very stringent and responsive system under which all its distributors and vendors are assessed before being selected.

REGULATORY AND COMPLIANCE RISKS

Your Company operates within the letter and spirit of all applicable laws. General compliance with legal requirements is an important component of your

Companys Worldwide Business Conduct Manual and the same demands the following action from every employee:

To obey all legal requirements at all times;

To understand exactly what legal requirements apply to the work function;

To consult the legal personnel if there are conflictinglegal requirements in different jurisdictions;

To strictly follow the directions from the legal personnel;

To address and resolve, in a timely manner, any legal compliance issues that have been identified;

Absolutely no violation of any law; and

To immediately report any instance of violations to the Legal Department.

Your Company has set in place the requisite mechanism for meeting with the compliance requirements, periodic monitoring of compliance to avoid any deviations, and regular updates to keep pace with the regulatory changes.

SECURITY RISKS

Your Company has implemented comprehensive security programs supported by latest technology and trained manpower to protect employees and assets, at all its offices and plant. During under review, no major security breaches or incidents occurred at your Companys plant. A comprehensive security risk assessment is carried out regularly and adequate security measures are implemented to cater to changing security scenario. Your Company has installed the best of the security measures and processes to protect its personnel and assets.

INTERNAL AUDITOR

During the Financial Year, the Board of Directors had appointed Ms. Pooja Bhutra, Chartered Accountant as the Internal Auditor of the Company for the Financial Year 2021-22.

INTERNAL CONTROLS & THEIR ADEQUACY

Your Company continues to prioritize sustainable control processes that are integral part of organization culture. It has built strong Internal Controls Environment and Risk Assessment / Management systems. These systems enable the Company to comply with Internal Company policies, procedures, standard guidelines, and local laws to help protect

Companys assets and confidential information including personally identification information (PII) against robust controls environment at your Company is efficiently managed

Controls Self-Assessments are performed during

October to December period of every Financial Year across business processes. The purpose of this thorough exercise is to review and evaluate process compliances against standard control objective, activities and attributes. This enables the Company to proactively identify control weaknesses and initiate actions to sustainably mitigate them.

Stewardship and Global Internal Audit (GIA)

Reviews are led by a team of independent fulltime Internal Controls experts. Their role is to ensure that all key processes i.e. selling, revenue, distribution, trade & marketing spends, vendor payments, and plant operations are reviewed and assessed at appropriate intervals. The observations and findingsare shared with senior management for implementing quality action plans to strengthen overall controls environment in these processes. The assessments of high risks and SOX Compliance areas are assessed by an independent internal audit department led by the Companys Global Internal Audit team. This Financial Year team comprises of certified internal controls process experts who have experiences across different markets that the Company operates in. The action taken by the management to correct the processes is then reviewed and reported appropriately.

Governance Board

The Governance Board is led by the Managing

Director and comprises of Group Chief Financial

Officer, Chief Human Resource Chain Leader, Purchasing & Sustainability Leader and General Counsel. The Governance Board assesses, and reviews enterprise level risks and works with process owners and functional managers to ensure that corrective action is taken, and risk is mitigated as appropriate.

During the Financial Year under review, all Controls issues identifiedhave been 100% remediated by executing quality action plans in consultation with internal controls and stewardship experts.

BUSINESS RESPONSIBILITY REPORT

A separate report on Business Responsibility has been appended as Annexure Ilosses and to this Report. unauthorized use. and monitored through: CORPORATE SOCIAL RESPONSIBILITY (CSR) & CITIZENSHIP EFFORTS

Your Company believes in being a force for growth and force for good in the communities that it serves.

This has been an integral part of your companys purpose and values since its foundation. We believe that the only way to build a sustainable business is to improve lives.

Our CSR strategy is supported by three key pillars P&G Shiksha, P&G Suraksha India and timely disaster relief.

Through our flagship CSR program P&G Shiksha, we continue to focus on providing holistic education for underprivileged children through a 360-degree educational intervention. We launched the ‘#PGSurakshaIndia program in response to the COVID-19 pandemic, to serve our employees, consumers, and communities alike in testing times, in partnership with various government and relief organizations. Further, our disaster relief to provide aid to those affected by In addition to this, our brands and people continue to make a positive difference in society through their consistent hard work.

We introduced our flagshipCSR program ‘P&G Shiksha in 2005 with the vision of providing means to education to underprivileged children in the country. Today, we have come a long distance from where we began. The 2500 schools that we have built and supported over the years will impact over 23 lakh children in need by improving their learning environment.

Over time, ‘P&G Shiksha has evolved into a holistic education program that aims to improve learning outcomes in children, strengthen educational infrastructure and empower marginalized girls through education.

Along with our NGO partner Round Table India (RTI), we have focused on constructing new classrooms, building playgrounds and improving health and hygiene facilities for children like clean drinking water and separate toilets for girls and boys at Government owned schools. We believe that this will impact the learning environment and encourage more students to take interest in education, return to school and enable a change in mindset. Last year, we undertook multiple projects and constructed more than 300 classrooms.

We are partnering with Educational Initiatives (EI)

(EI) to implement ‘Mindspark, a computer based adaptive learning tool to remediate learning gaps in students across government schools in Rajasthan, Himachal Pradesh, Maharashtra, Madhya Pradesh, Andhra Pradesh, Uttarakhand, Gujarat and Telangana.

Research found that children studying in a particular grade may not possess the conceptual understanding and grade level competency which is at par with the grade they are in. This means, that a child may progress to a higher grade, yet does not fully understand a concept from a lower grade.

‘Mindspark helps in minimizing this learning gap in children and bringing their learning levels at par with their grade. The tool integrates pedagogy, teacher instruction and a learning management system to assess a students learning level and develop a customized learning path for each one of them. During the pandemic induced school closure, we upgraded the tool to make it available on smartphones, to enable children to continue learning from the safety of their home and minimize learning losses. As schools begin to reopen, we are now focusing on bringing the program back to schools, so the children can learn more effectively and the program impacted over 72,000 children across 8 aim natural disasters.states in the country, by enabling learning from the safety of home.

Together with our NGO partner Pratham Education Foundation, we are working towards bridging existing learning gaps in children through on-ground remedial learning interventions. We do this through a community based and an ‘in-school model, together with the support of trained volunteers from within the community and teachers at school. During the lockdown, we had adopted a remote outreach model of engaging with the children, by leveraging technology and mobilizing the community volunteers, to ensure learning continuity. As part of this, we regularly shared simple project-based activities with children focused on language, math and science by leveraging WhatsApp, phone calls and SMSs. Further, we also shared curated messages in text, audio and video formats to aid the learning process

As schools begin to reopen, in addition to our digital outreach, we are conducting learning camps focused on strengthening foundational learning levels in children. This is aimed at ensuring school-readiness, with the support of our community volunteers. During the fiscal year, across 5 states and 1 Union Territory and observed a significant improvement in their learning levels. At the end of the intervention, more than 70% students were able to read as per their expected learning levels compared to less than 25% at the beginning of the intervention.

Through our early childhood education program in partnership with Pratham Education Foundation, we are focusing on developing motor, cognitive, social-emotional, language and creative skills in children, thereby setting them up for a fast-paced growth as they start school. During the pandemic, we ensured learning continuity, by engaging with parents and community volunteers to conduct learning activities with children at home using materials easily available at home like peas, beads, clay and more. As the pandemic began to ease, we launched a school readiness campaign, for equipping children studying in Grades 1 and 2, with essential foundational skills as they start school, with the support of their mothers. During the year, we impacted 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.

Additionally, your Company also continued to impact the communities around its plants in a holistic manner throughout the Financial Year.

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 everything we do. 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 this by focusing on technologies, processes and improvements that matter for the environment. Within its operations, your Company strives to grow responsibly and continuously improve our efficiency while reducing our carbon footprint. This year, P&G Group in India achieved ‘plastic packaging waste neutrality, as it collected, processed and recycled over 19,000 MT post-consumer plastic packaging waste from across the country, which is more than the amount of plastic packaging in its products sold during the year. In the last 5 years, the Group has reduced usage of packaging material by more than 5000 MT. We remain committed to help reduce the flow of plastic by continuing to make changes now and bringing long-term solutions.

Our manufacturing plant at Goa is ‘zero waste to landfill, which means that no manufacturing waste is discharged into the environment. The plant at Goa has also and energy consumption. The plant is 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.

The P&G brands have also stepped forward towards environmental sustainability. We are among the few companies in India to use recycled material in the packaging of our Feminine care packaging. This will reduce usage of virgin plastic.

The P&G Group also recently announced a global water strategy which aims to restore water in 18 water-stressed areas around the world for people and nature, responding to water challenges through innovation and partnerships, and reducing water in our operations. Out of these 18 water-stressed areas, 5 are in India.

Additionally, the Group put forth a new ambition to achieve net-zero greenhouse gas (GHG) emissions across its operations and supply chain, from raw material to retailer, by the year 2040. Your Company continues to build partnerships with external organizations to combat some of the challenges and issues we are facing today on sustainability. Certain measures taken by your Companys Plant site in Goa for conservation of energy are given below:

Water savings initiatives: Following initiatives led to significant water savings:

Optimization of use of water resources;

Use of reclaim water for cooling towers vs. ground water;

Reclaim of circular water;

Use of Air Conditioning drains for recharging earthing pits;

Collection and reuse of AHU condensate; and

Collection/elimination of cooling tower water losses.

Energy Savings initiatives: Certain initiatives undertaken for saving energy are given below:

Auto cleaning of condensers in chillers to get better efficiency and energy saving;

Use of energy efficient pumps for cooling towers and chillers delivering energy savings; reduced its carbon emission

Monthly monitoring of energy usage and benchmarking;

Monitoring of air consumption and arresting and controlling air leakages;

Use of energy efficient compressors motors sequencing with variable-frequency drives (VFD) for energy efficiency;

Energy efficient pumps for softening plants;

Timers and motion sensors for air conditioners.

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 (the 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 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 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 efficiency.

As the Company avails benefitsof 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:

in Lakhs

For the Financial Year ended June For the Financial Year ended June
30, 2022 30, 2021
Foreign Exchange earnings 4,696 4,598
Foreign Exchange outgo 73,982 55,029

RELATED PARTY TRANSACTIONS

Your Company has formulated a policy on related party transactions which is also available on Companys website at https://in.pg.com/ india-governance-and-policies/pghh/terms-and-policies/#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 and entered in the ordinary course of business and at arms length. All related party transactions are subjected to independent review by chartered accountant firmto confirm compliance with the requirements under the Companies Act, 2013 and the Securities and

Exchange Board of India (Listing Obligations and

Disclosure Requirements) Regulations, 2015.

All related party transactions entered during the

Financial Year were in ordinary course of the 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.

Details of material related party transaction entered into during the Financial Year 2021-22 are given below:

Name of Related Party Procter & Gamble Home
Products Private Limited
Nature of transaction Purchase of goods

Amount of transaction 251 Crores during Financial Year 2021-22

The above transaction was approved by the Shareholders by passing an Ordinary Resolution through Postal Ballot on June 26, 2021. Being related parties, the Promoter shareholders had abstained from voting on the said resolution.

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 an Internal Complaints Committees (ICC). During the Financial Year, 1 complaint with allegation of sexual harassment was filedwith the Company, which was resolved during the year.

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, 2022, 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, 2022, on a

"going concern" basis; v. that the Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and vi. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE

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

ANNUAL RETURN

The Annual Return for the Financial Year 2021-22, as required under Section 92(3) 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/pghh/shareholder-info/info/.

HUMAN RESOURCES

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

Attracting & Retaining Talent: India continues to be a key source for Global talent and a preferred Employer of Choice for the workforce in India. We continue to drive our build from within strategy and focus on our core campus programs, which coupled with our innovative campus branding initiative ensures we continue to be an Employer of Choice in our Core Campuses and beyond. Over the course of the last year, we have massively scaled up our lateral hiring capabilities, in line with our growing business needs.

We implemented a fully face to face internship program this year for all our campus interns. We continue to retain our Top 10 Best Employer ranking in the Annual Dare2Compete Campus Survey. DevelopingTalent: Our policies on leadership pipeline, talent planning, mentoring and diversity & inclusion continue to evolve and stay ahead of the times, to ensure that we attract and retain the best talent. All our new hires undergo a very comprehensive 3-day corporate on-boarding program called ‘GetIN which is coupled with functional onboarding programs to ensure that they are able to make an impact and feel valued from Day 1. Building organization capability continues to be a key focus area for us and we continue to organize virtual learning sessions as part of the P&G Learning Academy offerings.

Our Companys performance management system is robust and strives for Impact through Growth. It clearly assesses and differentiates employees on the basis of performance. We have established a CARE program to build the capability of our people managers. With its focus on inclusive development,

P&G India was recognized by Working Mothers Magazine as one of the Best Companies for Women in India 6th year in a row.

The number of employees as on June 30, 2022 was

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.

As per the provisions of first proviso to Section 136(1) of the Companies Act, 2013, the Report and Financial

Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5 (2) of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at investorpghh.im@pg.com.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Ms. Flavia Machado ceased to be Company Secretary of the Company effective August 31, 2021.

Mr. Ghanashyam Hegde was appointed as Company Secretary and Compliance effective September 1, 2021. Consequently,Mr.Hegde under the Companies Act, 2013 was re-designated from Non-Executive Director to Executive Director of the Company effective September 1, 2021 for a tenure of five years. Mr. Madhusudan Gopalan ceased to be the Managing Director of the Company effective June 30, 2022. The P&G Management and the Board of Directors of the Company express their deepest gratitude to Mr. Madhusudan Gopalan for his exemplary leadership and consistent value creation, guidance and direction to the Company during his tenure as Managing

Director.

Mr. L. V. Vaidyanathan has been appointed as Managing Director of the Company for period of five years, effective July 1, 2022. The Shareholders of the Company have approved his appointment by resolution passed by postal ballot & e-voting on July 17, 2022. Mr. L. V. Vaidyanathan being a non-resident at the time of his appointment, the Company has filed an application for seeking approval for his appointment with the Central Government.

Mr. Gurcharan Das has been appointed as Independent Director of the Company for a term of fiveyears effective September 1, 2022, subject to approval of the Shareholders of the Company at the upcoming 58th Annual General Meeting of the Company. Mr. Gagan Sawhney and Ms. Sonali Dhawan, Directors retire by rotation and being eligible, offer themselves for re-appointment at the ensuing 58th Annual

General Meeting of the Company.

Brief profileof Directors proposed to be appointed/ re-appointed at the ensuing 58th Annual General

Meeting and the details of the Directorships held by them in other companies are provided under theCorporate Governance section of the Report.

Appropriate resolutions for the appointment / reappointment of the aforesaid Directors are being moved at the ensuing 58th Annual General Meeting, which the Board recommends for approval of theShareholders of the Company.

The Independent Directors of your Company have given declaration of Independence to your Company stating that they meet the criteria of Independence as mentioned under the Companies Act, 2013 and the Securities and Exchange Board of India (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 fulfill the expertise and experience and conditions specified 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

Five (5) 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 various policies, including policies on related party transactions, corporate social responsibility, vigil mechanism, nomination and remuneration, materiality of events and dividend distribution policy, which are available on the website of the Company at https://in.pg.com/ india-governance-and-policies/pghh/terms-and-policies/#policies.

AUDITORS

The Report given by Kalyaniwalla & Mistry LLP, Statutory Auditors on the financial statements of the

Company for the Financial Year ended June 30, 2022 is part of the Report. There has been no qualification, reservation or adverse remark given by the Auditors in their Report.

Kalyaniwalla & Mistry LLP were appointed as Statutory

Auditors of your Company at the 53rd Annual General

Meeting for a term upto conclusion of the 58th Annual General Meeting. It is proposed to re-appoint Kalyaniwalla & Mistry LLP, Chartered Accountants as Statutory Auditors of your Company for a second term of five years, i.e., from the conclusion of the ensuing 58th Annual General Meeting until the conclusion of the 63rd Annual General Meeting. The Audit Committee and the Board of Directors of the

Company recommend the said re-appointment to the Shareholders for their approval. Resolution for the said appointment is being moved at the ensuing 58th Annual General Meeting.

COST AUDITORS

Ashwin Solanki & Associates, Cost Accountants carried out the cost audit for applicable business during the Financial Year 2021-22. The Board of Directors has re-appointed Ashwin Solanki &

Associates, Cost Accountants for the Financial Year 2022-23.

SECRETARIAL AUDIT

Secretarial Audit was carried out by Makarand M. Joshi & Co., Practicing Company Secretaries for the Financial Year 2021-22. There were no qualifications, reservation or adverse remarks given by the 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 the 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 of research & development for products, ingredients and technologies, 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, 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

Chittranjan Dua
Mumbai, August 23, 2022 Chairman