MIRA INFORM REPORT

Report Date :

13.10.2012

IDENTIFICATION DETAILS

Name :	PROCTER AND GAMBLE HOME PRODUCTS LIMITED
Registered Office :	P and G Plaza, Cardinal Gracias Road, Chakala, Andheri (East), Mumbai- 400099, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	19.01.1989
Com. Reg. No.:	11-50398
Capital Investment/ Paid-up Capital:	Rs.148.922 Millions
CIN No.: [Company Identification No.]	U24240MH1989PLC050398
TAN No.: [Tax Deduction & Collection Account No.]	MUMP10704B
PAN No.: [Permanent Account No.]	AAACP4643H
Legal Form :	A Closely held public limited liability company.
Line of Business :	Manufacturer and Exporter of Cosmetics, Toiletries and Skin Health and Beauty Care Products.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (35)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 13000000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is a well established and a reputed company and a part of Procter and Gamble Group Worldwide. The company has incurred huge losses in the current year (i.e.2010-11). There appears some accumulated losses recorded by the company. However, financial position appears to be good. Trade relations are reported as fair. Business is active. Payments are reported to be slow but correct The company can be considered for business dealings with slight caution.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office :	P and G Plaza, Cardinal Gracias Road, Chakala, Andheri (East), Mumbai- 400099, Maharashtra, India
Tel. No.:	91-22-28266000 / 40543618
Fax No.:	91-22-56939696 / 66939698
E-Mail :	ramachandran.v.3@pg.com nair.cs@pg.com tawde.r@pg.com
Website :	http://www.pg.com http://www.pg-india.com
Factory :	Plot 182, Sector A, Industrial Area, Mandideep, District Raisen-462010, Madhya Pradesh, India

DIRECTORS

AS ON 30.09.2011

Name :	Mr. Shantanu Khosla
Designation :	Managing Director
Address :	63 Silverene, Ground Floor, Khan Abdul Gaffar Road, Worli, Mumbai- 400030, Maharashtra, India
Date of Birth/Age :	25.01.1960
Date of Appointment :	01.08.2007
DIN No.:	00059877

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	L24239MH1964PLC012971	PROCTER AND GAMBLE HYGIENE AND HEALTH CARE LIMITED	Managing director	01/06/2012	27/08/2001	Active	NO
2	U91200MH1985GAP037820	THE ADVERTISING STANDARDS COUNCIL OF INDIA	Director	16/07/2005	16/07/2005	Active	NO
3	L28931RJ1984PLC002890	GILLETTE INDIA LIMITED	Managing director	29/01/2012	26/10/2005	Active	NO
4	U24240MH1989PLC050398	PROCTER AND GAMBLE HOME PRODUCTS LIMITED	Managing director	01/08/2012	01/08/2007	Active	NO
5	U51100MH1975PTC018207	TEMPLE TREES IMPEX AND INVESTMENT PRIVATE LIMITED	Director	30/09/2010	12/03/2010	Active	NO
6	U74900MH1994PTC192968	WELLA INDIA HAIRCOSMETICS PRIVATE LIMITED	Director	28/09/2011	16/05/2011	Active	NO

Name :	Mr. Tapan Janardan Buch
Designation :	Director
Address :	Odessey 1, Flat No.1001, 10^th Floor, Hiranandani Gardens, Powai, Mumbai – 400 076, Maharashtra, India
Date of Birth/Age :	10.10.1972
Date of Appointment :	08.03.2010
DIN No.:	02910029

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U24240MH1989PLC050398	PROCTER AND GAMBLE HOME PRODUCTS LIMITED	Director	09/09/2010	08/03/2010	Active	NO
2	U51100MH1975PTC018207	TEMPLE TREES IMPEX AND INVESTMENT PRIVATE LIMITED	Director	30/09/2010	12/03/2010	Active	NO

KEY EXECUTIVES

Name :	Mr. Sachin Harlalka
Designation :	Secretary
Address :	C-706 Sierra Tower, Lokhandwala Complex, Akruti Road, Kandivali East, Mumbai-400101, Maharashtra, India
Date of Birth/Age :	18.07.1976
Date of Appointment :	01.01.2008
PAN No.:	AARPH3859D

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2011

Names of Shareholders	No. of Shares
Procter and Gamble Overseas India B.V - Netherlands	19492241
Procter and Gamble Far East Incorporation - USA	1
Procter and Gamble NDP Incorporation – USA	1
The Procter and Gamble Company - USA	1
The Procter and Gamble Distribution Company Limited – USA	1
The Procter and Gamble Manufacturing Company – USA	1
Procter and Gamble Canada Holding B.V – Netherlands	1
Total	19492247

As on 02.02.2012

List of allottees

Names of Allottees	No. of Shares Allotted
Procter and Gamble Overseas India B.V - Netherlands	3866667

As on 13.10.2011

List of allottees

Names of Allottees	No. of Shares Allotted
Procter and Gamble Overseas India B.V - Netherlands	4800000

Category	Percentage
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Cosmetics, Toiletries and Skin Health and Beauty Care Products.

Product :

Product Description	Items Code No.
Baby Diapers	4818 40 10
Shampoo	3305 10 90
Hair dyes	3305 90 40
Detergents and Soap	3402 90 11
Air Fresheners	3307 49 00

Brand Names :

Tide and Ariel

PRODUCTION STATUS

(As On 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Cosmetics. Personal Products.	Tones	Not Applicable	2070	10951
Toilet Preparations, etc	KIs	53600	53600	25119
Soaps and Detergents	Tones	Not Applicable	264000	294637

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Not Available

Facilities :

Unsecured Loan	31.03.2011 (Rs. In Millions)	31.03.2010 (Rs. In Millions)
Working Capital Loans Banks Unsecured	6124.205	3321.100
Interest Accrued Due Other Debt Unsecured	180.825	84.744
Total	6305.030	3405.844

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Address :	12 Dr. Annie Beasant Road, Opposite Shiv Sagar Estate, Worli, Mumbai- 400018, Maharashtra, India
Tel. No.:	91-22-66679000
Fax No.:	91-22-66679100
Pan No.:	AACFD4815A
Ultimate Holding Company :	· The Procter and Gamble Company - USA
Holding Company :	· Procter and Gamble Overseas India B.V, The Netherlands
Fellow Subsidiaries:	· Procter and Gamble Asia Pte Limited (MROH) · The Procter and Gamble Distributing LLC · Procter and Gamble Hygiene and Health Care Limited · Procter and Gamble Sri Lanka Private Limited · Procter and Gamble Asia Pte Limited · Procter and Gamble International Operations SA · Procter and Gamble Innovation Godo Kaisha · Procter and Gamble International Operations Pte Limited · Procter and Gamble (Guangzhou) Limited · Procter and Gamble International Operations SARL · Procter and Gamble US Business Services Company · Procter and Gamble Philippines INC. · Procter and Gamble Technology (Beijing) Company Limited · Procter and Gamble Malaysia SDN BHD · Wella India Hair Cosmetics Private Limited · Procter and Gamble Asia Pte Limited · Modern Products Company · Fameccanica Machinery (Shanghai) Company · Procter and Gamble Tuketim Mallari Sanayii A.S · Procter and Gamble IndoChina Vietnam · Procter and Gamble Manufacturing GMBH · Gillette India Limited · Procter and Gamble Industrial Peru S.R.L.

CAPITAL STRUCTURE

After 30.09.2011

Authorised Capital : Rs.300.000 Millions

Issued, Subscribed & Paid-up Capital : Rs.281.589 Millions

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
16000000	Equity Share	Rs.10/- Each	Rs.160.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
14892247	Equity Share	Rs.10/- Each	Rs.148.922 Millions

NOTE

14892247 (Previous year: 11292247) Equity shares of Rs. 10 each fully paid up All the 14892247 Equity shares (Previous year: 11292247) are held by the ultimate holding company, The Procter and Gamble Company, USA and its subsidiaries, of which 14892241 Equity (Previous year : 11292241) shares are held by Procter and Gamble Overseas India BV, Netherlands.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		148.922	112.922	112.922
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		3228.450	3708.827	1797.729
4] (Accumulated Losses)		(191.401)	0.000	0.000
NETWORTH		3185.971	3821.749	1910.651
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		6305.030	3405.844	3283.908
TOTAL BORROWING		6305.030	3405.844	3283.908
DEFERRED TAX LIABILITIES		0.000	179.419	73.426
TOTAL		9491.001	7407.012	5267.985
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		5300.384	4474.445	3273.998
Capital work-in-progress (including advances on capital account)		3033.317	990.572	898.960
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3191.448	2206.858	2060.097
	Sundry Debtors	1928.288	1406.701	574.918
	Cash & Bank Balances	132.865	84.821	63.858
	Other Current Assets	0.052	0.062	0.013
	Loans & Advances	2018.295	1520.894	1155.852
Total Current Assets		7270.948	5219.336	3854.738
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	5823.658	2903.352	2452.891
	Current Liabilities	115.264	251.283	221.548
	Provisions	174.726	122.706	85.272
Total Current Liabilities		6113.648	3277.341	2759.711
Net Current Assets		1157.300	1941.995	1095.027
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		9491.001	7407.012	5267.985

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	28329.418	21041.694	12743.527
		Other Income	305.225	457.174	111.135
		TOTAL (A)	28634.643	21498.868	12854.662
Less	EXPENSES
		Consumption materials changes inventories	15140.951	9370.984	5923.907
		Manufacturing service costs	4073.615	1848.242	1073.655
		Employee related expenses	1500.306	1204.242	714.827
		Administrative selling other expenses	10522.240	6031.759	5162.341
		TOTAL (B)	31237.112	18455.227	12663.269
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(2602.469)	3043.641	191.393
Less	FINANCIAL EXPENSES (D)		380.287	207.124	243.843
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(2982.756)	2836.517	(52.450)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		532.441	406.326	217.380
	PROFIT BEFORE TAX (E-F) (G)		(3515.197)	2430.191	(269.830)
Less	TAX (I)		(179.418)	519.093	(152.060)
	PROFIT AFTER TAX (G-I) (J)		(3335.779)	1911.098	(117.770)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		3144.377	1233.279	1351.049
	BALANCE CARRIED TO THE B/S		(191.402)	3144.377	1233.279
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	NA	NA	73.416
		Other Earnings	NA	NA	4.281
	TOTAL EARNINGS		NA	NA	77.697
	IMPORTS
		Raw Materials	NA	NA	849.121
		Packing Materials			70.669
		Stores & Spares			37.528
		Capital Goods			182.141
	TOTAL IMPORTS		NA	NA	1139.459
	Earnings Per Share (Rs.)		(272.11)	169.24	(10.43)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	(11.65)	8.89	(0.92)
Net Profit Margin (PBT/Sales)	(%)	(12.41)	11.55	(2.12)
Return on Total Assets (PBT/Total Assets}	(%)	(27.96)	25.07	(3.79)
Return on Investment (ROI) (PBT/Networth)		1.10	0.64	(0.14)
Debt Equity Ratio (Total Liability/Networth)		3.90	1.75	3.16
Current Ratio (Current Asset/Current Liability)		1.19	1.59	1.40

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	No
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

PERFORMANCE

During the Financial Year, sales at Rs. 28329.400 Millions were up by 35% against sales of Rs. 21041.700 Millions of the previous Financial Year, driven by all round growth in all the categories we operate in.

Loss Before Tax (LBT) at Rs. 3515.200 Millions was up when compared to a PBT of Rs. 2430.200 Millions for the previous Financial Year

BUSINESS REVIEW:

During the year the Company’s products in Laundry categories recorded an strong growth on sales and volumes. The Company introduced value tier “Tide Natural” during the fiscal and now has coverage and penetration at an all time high.

In the Hair Care categories also the Company recorded an increase in the sale and the volume share. Both brands “Pantene” and “Head and Shoulders” contributed to the increase in sales.

In the Diaper category, sales of “Pampers” continue to grow in sales and volume share. “Pampers” continues to be most widely available brand in the category. The Finance Bill 2010 introduced excise duty on Baby Care with effect from March 1, 2010. This has impacted the results negatively for the year.

The Skin Care business of the Company continues to record increase both in value and volume share.

Earnings are negative because of:

1. Drop in margin laundry and baby care business.

2. Introduction of excise duty on Baby care and increase in excise rates for Laundry.

3. Higher Advertisement and promotion expenditure.

4. Introduction of royalty payments to the parent company.

CONTINGENT LIABILITIES (AS ON 31.03.2011):

(i) In respect of Income Tax demands for which the company has preferred appeals with appropriate authorities - Rs. 691.863 Millions (Previous year : Rs. 201.071 Millions)

The contingent liability is in respect of income tax matters relating to disallowances on account of suppression of gross profit, media production cost and other matters.

(ii) In respect of Sales tax matters for which the company has preferred appeals with appropriate authorities - Rs. 387.382 Millions (Previous year Rs. 265.012 Millions) The liability is in respect to matters related to non submission of "C" / "F" forms Rs. 48.443 Millions (Previous year Rs. 83.454 Millions), Incomplete accounts books Rs. 16.607 Millions (Previous year Rs. 16.761 Millions), Brand holder issues Rs. 116.932 Millions (Previous year Rs 0.814 Millions), Valuation Rs. 145.073 Millions (Previous year Rs. 145.073 Millions) and Others Rs 60.327 Millions (Previous year Rs. 18.910 Millions).

(iii) In respect of Excise and Service tax matters for which the company has preferred appeals with appropriate authorities - Rs. 127.690 Millions (Previous year Rs. 134.587 Millions) 'The liability is in respect to matters related to valuation of detergents Rs 95.099 Millions (Previous year Rs 102.481 Millions) applicability of service tax on foreign payments Rs. 16.098 Millions (Previous year Rs. 16.098 Millions) denial of cenvat credit Rs. 11.794 Millions (Previous year Rs. 11.794 Millions) and others Rs. 4.214 Millions (Previous year Rs. 4.214 Millions)

(iv) In respect of counter guarantees given to bank against guarantees given by bank - Rs. 20.359 Millions (Previous year Rs. 16.080 Millions) At the request of the Company, its banks have issued guarantees in the event of the Company failing to fulfill its performance obligation under various commercial agreements. The Company has issued counter guarantees to the banks in respect of these guarantees.

(v) In respect of other claims - Rs. 12.500 Millions (Previous year : Rs. 15.697 Millions) The Company is a party to various legal proceedings in the normal course of business. The Company does not expect the outcome of these proceedings to have a material adverse effect on the Company's financial conditions, results of operations or cash flows.

(vi) Contractual commitments in terms of various agreements entered with vendors for production of goods Rs. 31.500 Millions ( Previous year Rs. 38.145 Millions)

(vii) In respect of demand from Employees State Insurance Corporation - Rs. 27.196 ( Previous year Rs. Nil).

FIXED ASSETS

• Land – Freehold
• Land- Leasehold
• Building
• Plant and Machinery
• Furniture and Fixture
• Computer and Office Equipments
• Moulds and Dies
• Vehicles

PRESS RELEASE:

P AND G PLANS TO INVEST RS 15400.000 MILLIONS IN HOME PRODUCTS ARM

10.10.2012

MUMBAI: Procter and Gamble, the world's largest consumer goods firm, plans to invest Rs 15400.000 Millions in its unlisted arm P and G Home Products, its largest investment since it entered the Indian market two decades ago, indicating its commitment to challenge the domination of Hindustan Unilever in Asia's third-largest economy.

In a board meeting held last month, P and G Home Products decided to increase its authorised share capital by issuing an additional 2 crore shares of 10 each at a premium of Rs 760 to its parent company.

Confirming the fund infusion into the 100%-owned subsidiary that makes Ariel, Tide and Pantene, a P and G spokeswoman said the money will go into supporting ongoing business activity, fund capital expansions for P and G's operations and meet working capital needs in India.

"The capital limit increase in Procter and Gamble Home Products is in line with P and G's focus on India as a key developing market, and one that the parent company continues to invest behind. P and G India has been achieving double-digit growth consistently in the last few years and is one of P and G's fastest growing markets globally," said the spokeswoman.

The Cincinnati US-headquartered company has struggled to revive sluggish sales in developed markets while emerging countries have gradually climbed to a $32-billion business for the company, generating 38% of sales and 44% of volume.

India is still one of the smallest markets for P and G with just $1-billion sales across three subsidiaries - Procter and Gamble Health and Hygiene, which markets feminine hygiene brand Whisper and Vicks anti-cold balm; Gillette India, a maker of razors and other shaving products; and Procter and Gamble Home Products, best-known as the maker of Ariel and Tide detergent.

Analysts feel that P and G's fresh investments could be disruptive for key rivals, especially Hindustan Unilever that share retail shelves in detergents, skin and hair care products, if P and G tries to increase market shares by cutting prices.

"P and G has such a strategy every three to four years, the last being in 2008-09 when a price war was seen in detergents category. So, we expect investments to reflect in advertising as well as price-war by next year," said Anand Shah, senior analyst at Elara Capital.

The parent company isn't downplaying India's growth prospects either. "We're focused on our top 10 developing markets where growth prospects are highest, including the important 'BRIC' markets.

Among BRIC, the Indian business recorded a compounded of 27% compounded growth between 2002 and 2012, the highest among the BRICs, followed by Russia at 25, and China and Brazil at 23 and 17% respectively.

Last year, the US-based consumer goods maker approved an investment plan of over Rs 900 crore in its unlisted arm - Procter and Gamble Home Products. Most of those funds were to power P and G's 'Project 2-3-4', which is aimed at doubling the number of Indians who use its products, trebling per capita spending by Indians on its products and quadrupling net sales of its India operations by 2015.

A substantial part of this has gone into sprucing up its existing multi-product manufacturing facility at Bhopal in Madhya Pradesh. In addition, the company is also planning to set up another plant in Hyderabad in line with its global mandate to set up over 20 production centres and acquire one billion new consumers in emerging markets by 2015.

PROCTER AND GAMBLE PLANS TO MANUFACTURE PRODUCTS FOR THE INDIAN MARKET LOCALLY

14.11.2011

MUMBAI: Procter and Gamble plans to manufacture products for the Indian market locally, moving away from its decade-old strategy of importing a substantial proportion of goods, as the world's largest consumer goods maker seeks to emulate the cost structure of Hindustan Unilever Limited (HUL) At present, a substantial chunk of its goods including skincare brand Olay and baby diaper brand Pampers are imported into the Indian market, which is an expensive proposition, according to the company.

More local production will result in P and G making products at low cost, that could translate into affordable products from the company, which has so far focused primarily on premium and mass premium products.

"You should expect a large part of production locally in the long term, so that most of them are 'made in India' products, given the growing size and scale of our business," said Tapan Buch, chief financial officer at P and G Hygiene and Healthcare Limited Buch did not give the percentage of products currently being made outside India. In early 2000, P and G had started shifting production to low cost South East Asian countries from the US, closer to growth markets such as China and India.

In a board meeting during first week of November, P and G Home Products, the unlisted unit the Cincinnati based consumer goods maker, approved an investment plan of Rs 3600.000 Millions in its unlisted arm. Earlier, in May, the company had approved an investment of Rs 3450.000 Millions, and this combined fund infusion of Rs 7000.000 Millions will be P and G's largest investment in India in a single year.

Buch said the money will primarily go into sprucing up its existing multi-product manufacturing facility so that it can execute its strategy of reaching out to 'more consumers, in more parts of India, more completely.'

"The funds will be utilized to expand our manufacturing base, primarily at Bhopal in Madhya Pradesh. The investments will be broad based in terms of categories and will purely depend on how capital intensive each segment is at the moment," Buch said. "For instance, we could invest more on baby care products as a major part of it is imported."

An industry executive said Procter and Gamble (P and G) is scouting for land in Hyderabad and Chennai to set up two factories, but the company did not confirm it.

Traditionally P and G in India have been focusing on premium brands Head and Shoulders, Ariel and Pantene, which are its cash cow and generates over 60% of its total revenues.

But now, P and G is planning to target consumers across the pyramid, with products in laundry, hair and skin care straddling several pricepoints.

It has doubled its distribution reach over the past couple of years and now has a direct reach of 1.3 million outlets, against HUL's direct reach of 1.6 million outlets.

"Although India is only a small part of P and G's current portfolio, they are very focused on becoming more present in the emerging markets.

India is a key priority for it as it continues to grow well—a growing population with growing incomes," said Ali Dibadj, senior analyst from US brokerage firm Sanford Bernstein.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.70
UK Pound	1	Rs.84.51
Euro	1	Rs.68.16

INFORMATION DETAILS

Report Prepared by :

BSN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		35

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.