P & G POLICIES

A. Respect of Government and the Law

P&G is committed to meeting or exceeding all laws and regulations wherever we
conduct our business activities. The Company expects every employee to know the
laws and policies that apply to their P&G activities, and to conduct them with
uncompromising honesty and integrity.
Of course, some business activity is not governed by any law, and some laws and
regulations set unacceptably low standards of behavior far lower than P&G sets for
itself. In these situations, an employee should be able to answer yes to the following
questions before taking action:

Is this action the "right thing to do?"

Would this action withstand public scrutiny?
Will this action uphold P&Gs reputation as an ethical company?

If the answers are not an unqualified yes, we dont do it.

1. Compliance with Laws and P&G Policies and Business Conduct Policies
P&G employees worldwide are expected and directed to comply with all laws and all
P&G business conduct policies relating to their P&G business activities. It is also each
employees responsibility to know and understand legal and policy requirements as they
apply to their job, and to notify management when they believe a violation of law or P&G
policies/standards has occurred.
2. Accuracy of Company Records
Books & Records
The Companys business records are depended upon to produce reliable and accurate
reports to management, shareholders, creditors, governmental entities and others.
Thus, all official records of the conduct of the Companys business must be accurate,
honest and complete, without any restriction or qualification of any kind. This means the
accuracy of any records involves both factual documentation and ethical
evaluation/appraisal.
The Company does not condone concealing any payment by means of passing it
through the books or accounts of third parties, such as agents or consultants.

All P&G operations worldwide must comply with all local and national laws relating to
the accurate and complete maintenance of Company financial books and records. As in
their other responsibilities, employees are expected to be honest, objective and loyal in
the performance of recordkeeping responsibilities. However, because loyalty includes
never knowingly being a part of any illegal or unethical activity, there is no excuse for a
deliberately false or misleading Company record.
Disclosure Controls
Disclosure controls are systems and processes that help ensure that important
information is made available to the right people at the right time. The Company
requires every area of the business to maintain disclosure controls to provide adequate
assurance that significant information is reported to the appropriate levels of the
Company so that the appropriate business steps can be taken to address any issues,
and so that the Company can consider whether the information should be disclosed
externally.
Internal Controls
Internal Controls are systems and processes that combine policies, authorizations and
procedures with proper accounting and management tracking. This reporting is
designed to ensure that business operations are properly managed. The Company will
have in place a set of internal controls that provides reasonable assurance that:

Transactions are properly authorized and accurately recorded based on

Company policies and procedures;
Company assets are adequately safeguarded;
Financial and management reporting is reliable and accurate, and reflects
actual business activity;
Activities comply with applicable legal requirements; and
Business operations are effective and efficient. Creating and complying with
strong and effective internal control systems is, ultimately, the responsibility
of each employee with respect to his/ her areas of operation.

3. Securities Trading
To ensure fairness and integrity in financial markets, we do not trade in P&G securities
or those of any other company on the basis of material, non-public information acquired
through our employment. Material information is any information that an investor would
reasonably consider important in making investment decisions. Examples include
knowledge of acquisitions or divestitures, new product launches or financial information.
Nonpublic inside information about P&G must not be communicated without a legitimate
business reason and proper leadership authorization.

4. Antitrust Policy and Compliance Guidelines

Antitrust laws are designed to prohibit agreements among companies that fix prices,
divide markets, limit production or otherwise impede or destroy market forces. P&Gs
policy is that all employees strictly comply with antitrust laws and the competition and
anti-monopoly laws of all countries, states and localities in which they conduct P&G
business. Supervisors and managers are responsible for ensuring that employees
under their responsibility are aware of and comply with this policy.
It is very important for employees to understand and follow this policy so that P&G
avoids even the appearance of an antitrust violation. That is why the Companys general
rule is NO CONTACT WITH COMPETITORS. Membership in trade associations is
permissible only if approved in advance by P&G legal counsel.
5. Lobbying
P&G policy is to comply with all applicable laws, rules and regulations relating to
lobbying or attempting to influence government officials. Such information provided to
governments must be accurate and interactions with government officers must be
honest and ethical. All activities that might constitute lobbying or attempts to influence
government officials are first reviewed with subsidiary management and/or legal
counsel.
6. Political Contributions
The Company's basic policy and in some cases federal law prohibits P&G contributions
to either political candidates or political parties anywhere in the world.
P&G policy does not permit the use of any P&G facilities or resources by
employees for political campaigning, political fundraising or partisan political
purposes.
Exceptions to the contribution policy and the use of company facilities or
resources are allowed only where such contributions/activities are permitted by
law and express written permission has been given in advance by the
Companys Ethics Committee.
A decision by an employee to contribute any personal time, money or other
resources to a political campaign or political activity must be totally voluntary.
7. Transacting International
Business Managers and employees of P&G affiliates doing business around the world
abide by special laws and regulations which apply to the import and export of products
and technical data, as well as the conduct of business with non-U.S. entities. We also

comply with anti-boycott and international embargo regulations in all locations where we
do business.
B. Respect in the Workplace
1. Personal Behavior in the Workplace
P&Gs fundamental policy is that we will treat all of our P&G colleagues with respect.
The Company strives to provide a safe, healthful and productive work environment. This
includes being free of violence for our employees, contractors, visitors, etc. Each
employee has a personal responsibility to other P&G employees and to the Company to
help eliminate actions or circumstances which undermine this environment.
P&G policy requires that individuals are to be considered for employment opportunities
on the basis of merit, as measured against objective job requirements. Moreover, every
good faith effort shall be made to implement programs designed to provide equal
employment opportunity to all types of jobs and at all levels of the work force.
P&G expects each employee to support the Companys commitment and continuing
efforts toward equal employment opportunity for all. P&G is committed to compliance
with all applicable laws and regulations relating to equal employment opportunity, nondiscrimination and similar employee-related matters.
We at P&G recognize the power that comes from people of diverse backgrounds and
experiences coming together around a common goal. Our policy forbids any
discrimination, harassment or intimidation because of race, color, religion, gender, age,
national origin, citizenship, sexual orientation, gender identity and expression, disability
or other non-job-related personal characteristic. Employees are encouraged to bring
questions or concerns in this area to their management. Strict disciplinary action for
violations of this policy will be taken, including termination of employment.
Additionally, every employee is expected to perform his or her work in a safe manner,
free of the influence of alcohol or drugs.
2. Child Labor and Worker Exploitation Policy
P&G does not use child or forced labor in any of our global operations or facilities. We
do not tolerate unacceptable worker treatment, such as exploitation of children, physical
punishment or abuse, or involuntary servitude. The Company respects employees right
to freedom of association, third party consultation and collective bargaining where
allowed by law. We expect our suppliers and contractors with whom we do business to
uphold the same standards. Should a pattern of violation of these principles become
known to the Company and not be corrected, we will discontinue the business
relationship.

3. Wage and Hour Practices

P&G pays employees a competitive wage, as benchmarked with other leading
companies. Consistent with our principle of valuing personal mastery, we reward
employees for improving their skills and capabilities. At a minimum, we comply with all
applicable wage and hour laws, rules and regulations, including minimum wage,
overtime and maximum hours.
4. Health, Safety and Environmental Policies
The Health, Safety and Environmental (HS&E) policies are derived from principles,
values, legal requirements and regulatory requirements. Compliance with the law is a
P&G Core Value and it is the single highest priority for the Companys HS&E programs.
The policy is translated into action by standards of performance (Mandatory Whats),
standard operating procedures (Mandatory How Tos), and current best approaches
(Voluntary System Guidance), and reinforced by mandatory annual internal audits. A
regular reassessment of the standards structure promotes continuous evaluation of the
system to improve performance.
P&G applies a single performance standard to each of its worldwide manufacturing
facilities. This is reinforced by training and mandatory annual internal audits. Facilities
have flexibility in how they achieve the standard, so that local circumstances can be
considered and costs can be controlled.
The Company uses internal audit scores and performance against a set of critical
measures to assess how effectively sites are implementing the global standard. These
measurements are endorsed by Company management and are conducted semiannually. Overall results are reported to senior management and to the Public Policy
Committee of the Board of Directors.
Safety & Health Policy
Procter & Gamble is committed to having safe and healthy operations around the world
to protect the life and health of its employees and the community surrounding its
operations, to protect its assets, to ensure business continuity and to engender public
trust. It is the responsibility of every employee to understand and be responsible for
incorporating safe behavior in daily business activities.
Environmental Quality Policy
P&G has historically sought, and continues to seek, to achieve clean, safe, incident-free
operation at all of our worldwide sites. This policy is assured by internally imposed
standards of operation applied worldwide, which frequently go beyond the letter and the

spirit of those laws and regulations that apply locally. This commitment to responsible
operation is implemented by the sites following formal environmental programs
supported by professional staff organizations in Legal, Engineering, Human Resources
and Product Supply.
P&Gs Environmental Quality Policy, which is applicable to all of the Companys
worldwide businesses, states that we will continually strive to improve the environmental
quality of our products, packaging and operations around the world. To carry out this
commitment at our sites and in all our operations, it is P&Gs policy to:

Ensure our products, packaging and operations are safe for our employees,
consumers and the environment.
Reduce or prevent the environmental impact of our products and packaging
in their design, manufacture, distribution, use and disposal whenever
possible. We take a leading role in developing innovative, practical
solutions to environmental issues related to our products, packaging and
processes. We support the sustainable use of resources and actively
encourage reuse, recycling and composting. We share experiences and
expertise and offer assistance to others who may contribute to progress in
achieving environmental goals.
Meet or exceed the requirements of all environmental laws and regulations.
We use environmentally sound practices, even in the absence of
governmental standards. We cooperate with governments in analyzing
environmental issues and developing cost-effective, scientifically based
solutions and standards.
Continually assess our environmental technology and programs and
monitor progress toward environmental goals. We develop and use state-of
the-art science and product life cycle assessment, from raw materials
through disposal, to assess environmental quality.
Provide our consumers, customers, employees, communities, public
interest groups and others with relevant and appropriate factual information
about the environmental quality of P&G products, packaging and
operations. We seek to establish and nurture open, honest and timely
communications and strive to be responsive to concerns.
Ensure every employee understands and is responsible and accountable
for incorporating environmental quality considerations in daily business
activities. We encourage, recognize and reward individual and team
leadership efforts to improve environmental quality. We also encourage
employees to reflect their commitment to environmental quality outside of
work. Have operating policies, programs and resources in place to
implement our environmental quality policy.

HIV/AIDS Policy
All employees, including those who are HIV infected or with AIDS, are treated
consistently with the Company's Purpose, Values & Principles (PVP) by the Company,
their managers and coworkers. Among other things, that means that each individual is
treated with dignity and respect, and that we do not discriminate against any individual
based on any difference not related to performance. We treat employees with HIV/AIDS
the same as we treat those with other serious illnesses. Specifically, an employee who
is HIV-infected or with AIDS:

has the same employment rights and responsibilities as other employees,

has the same eligibility for employee benefits and programs, including
medical care and disability coverage, as non-infected employees,
is afforded privacy and confidentiality protection consistent with the
Company's handling of confidential, medical or other sensitive information,
and
is provided management support to remain productive.

6. Conflict of Interest
Business, Financial and Personal Relationships
All employees are obligated to act at all times solely in the best interests of the
Company. A conflict of interest arises when an employee has a personal relationship or
financial or other interest that could interfere with this obligation, or when they use their
position with the Company for personal gain. The Company requires that employees
disclose all potential conflicts of interest and that they promptly take actions to eliminate
the conflict when the Company requests them to do so.
Gifts, Entertainment and Gratuities
We conduct our business on the basis of the superior value of goods and services we
buy and sell. Our policy on gifts, entertainment and gratuities is designed to preserve
and maintain P&Gs reputation as a global enterprise, which acts with integrity and
bases decisions only on legitimate business considerations. Receiving gifts,
entertainment or other gratuities from people with whom we do business is generally not
acceptable because doing so could imply an obligation on the part of the Company and
potentially pose a conflict of interest.
Improper Use of Company Assets
The Company does not permit improper use of Company assets. Improper use occurs
when an employee uses Company property or information for personal gain or
advantage, or for the advantage of others outside the Company, such as friends or

family members. Improper use also occurs when Company property or technology is
used for more than limited or incidental personal use or used in violation of other
Company policies.
7. Employee Privacy
P&G respects employee privacy and dignity. We will only collect and retain personal
information from employees that is required for the effective operation of the Company
or as required by law. We will keep that information confidential and release it only to
those who have a legitimate need to know.
C. Respect in the Marketplace
1. Product Safety
Procter & Gamble ensures the safety of our products, packages and operations for our
employees, consumers and the environment. We consider this to be a requirement for
conducting responsible business, and an essential element of building and maintaining
public trust in our products. We carefully evaluate the safety of all products and
ingredients before they go to market, using well-established risk assessment methods
to understand both hazards and potential exposures. These evaluations are a
mandatory part of the companys product development process, and begin during the
early stages of a products design. The same safety standards are used everywhere we
sell or make products. As a guide, we administer our product safety programs by
following these policies and principles:

The Companys products and packages will be safe for consumers and the
environment when used as intended.
The Company will seek to ensure that our operations are safe for our
employees, neighbors and the environment.
The Company will meet or exceed all applicable legislative and regulatory
requirements with respect to product safety and labeling.
The Company will provide interested parties with relevant and appropriate
factual information about the safety of our products and packaging.

2. Bribery and Improper Business Dealings

Commercial Bribery Commercial bribery is illegal and subject to criminal penalties in
many countries, including the United States. Any personal payment or bribe to
individuals employed by P&Gs customers or suppliers, or receipt of a bribe or personal
payment by P&G employees is strictly prohibited. Even in locations where such activity
may not, technically speaking, be illegal, it is absolutely prohibited by Company policy.
P&G competition for business is conducted fairly and on the merits of our products and
services.

Improper Payments to Government Officials

The Company prohibits improper payments to government officials. Improper payments
are direct or indirect payments, whether in cash or in other things of value (such as
lavish entertainment), to a government official or political party in order to influence acts
or decisions, to receive special treatment or personal gain, or to obtain or retain
business. While certain minor payments to certain non-U.S. government officials made
to expedite or secure the performance of certain routine government actions may not
violate the law, employees must obtain the approval of the Legal Division prior to
making such payments and any payments must be reported to appropriate Company
Tax personnel. All employees must abide by the U.S. Foreign Corrupt Practices Act, as
well as local laws concerning bribery.
Money Laundering and Product Diversion Avoidance
Money laundering is an attempt by individuals or organizations to hide the proceeds of
their crimes or to make those proceeds look legitimate. Diversion occurs when products
sold by the Company are distributed into markets or sold to customers other than
originally intended in violation of a contract, law or regulation. The Company forbids
knowingly engaging in transactions that facilitate money laundering or result in unlawful
diversion.
3. Fair Dealing with Suppliers and Customers
P&Gs success depends on building productive relationships with our suppliers and
customers based on integrity, ethical behavior and mutual trust.
Treating Suppliers Appropriately
Our suppliers are valued partners in the success of our business. Our relationships with
them must be characterized by honesty and fairness. Suppliers are selected on a
competitive basis based on total value, which includes quality, service, technology and
price. Terms and conditions defining our relationship with suppliers are communicated
early in the supplier selection process and agreements to such terms and conditions, or
any acceptable modifications, are reached before work begins. Included in these
standard terms and conditions are P&Gs policies regarding payment terms,
confidentiality, the use of intellectual property, worker health, safety and labor practices,
and environmental requirements.
Supplier Diversity
Supplier Diversity is a fundamental business strategy for P&G. Our consumers,
customers and suppliers become more and more diverse every day, so our success
depends on our ability to understand diverse consumers needs and to work effectively

with customers and suppliers around the world. Diversity is the uniqueness that
everyone from suppliers to employees to corporate officers brings to fulfill P&Gs
Purpose, Values and Principles. We will continue to expand and build our Supplier
Diversity results.
Treating Customers Appropriately
P&G recognizes that our customers have individual needs and expectations
representing unique opportunities for mutual success. The Company treats all
customers equitably and does not give any customer an unfair advantage over another
competing customer. The Company does not discriminate by customer size, type,
channel, or business strategy.
The Government as a Customer
P&G products are often purchased by governments for use or resale to authorized
military consumers. P&Gs legal compliance policy requires strict observance of the
laws and regulations which govern the acquisition of goods and services by
governmental entities, whether in the United States or in any other country. It is P&Gs
policy that all statements and representation to government procurement officials are
accurate and truthful, including costs and other financial data. Treating Competitors
Appropriately The Companys goal is to win consumers for its products by virtue of the
products quality and value, and not by creating unfair disadvantage for its competitors.

P&G STRATEGIES
Building a Better Company

This year, P&G will be 179 years old. A company does not last for that long if its
management is not willing to change anything and everything, except for its purpose
and core values, to serve consumers and create value for shareowners.

Key Elements Of P&G Business Strategy

P&G is focusing on four key business strategies to regain market leadership: (1)
Become A Focused Company of Leading Brands (2) Become A Global Company in
Targeted Growth Markets (3) Become A Company Driven by Innovation (4) Become
A Far More Productive Company
Become A Focused Company of Leading Brands
P&G has built significant scale by acquiring popular brands such as Gillette, Wella
Professional, Iams and Ambi Pur. Due to softening revenues and profits P&G is
moving away from product portfolio expansion to a brand consolidation strategy. In
2015, P&G announced that it would divest 100 under-performing and non-core

brands and will focus only on 70 brands in 10 business categories. These top 70
brands account for over 90% of P&Gs revenues and 95% of net profit. P&G has
announced the sale of Duracell, to Berkshire Hathaway. It also exited its Chinabased batteries joint venture. It announced the sale of its Camay and Zest soap
brands to Unilever and in July 2015, P&G announced the mega sale of 43 beauty
brands (including cosmetic brands, cover girl, max factor and fragrance brands like
Hugo Boss, Gucci and Dolce & Gabbana, and other hair styling brands) to cosmetics
company Coty Inc. in a $12.5 billion deal.
To better appreciate this consolidation drive, let us look at P&G advertising
effectiveness. P&G spends the most on advertising to convince consumers that its
products are worth their money. Its advertising expenses that are around 11% of its
annual sales make P&G the worlds largest spender on advertising. Before brand
consolidation this expense was split amongst 170 brands. Over last 6 years,
revenue growth has slowed while advertising as a share of revenue has increased or
remained same. In other words, the amount of additional sales it gets from additional
marketing is dropping. Brand consolidation will help it spend advertising money on
targeted brands thereby maximising the marketing effectiveness.
Procter and Gamble Advertising Effectiveness FY 2010 To 2015
Brand consolidation is a very interesting move that will help it improve advertising
effectiveness and regain market leadership in targeted growth categories.
Become A Global Company in Targeted Growth Markets
P&G that started its globalisation strategy in year 2001 has decided to slow down its
expansion across international markets in order to refocus on improving its market
share and operating margins in targeted geographies.
Procter and Gamble US vs International Sales FY 2001 to 2015
International markets currently account for about 63% of P&Gs annual sales, up
from 48% in 2001. It has now decided to focus on its top 40 country-product
categories that account for more than half of the companys sales. It is also planning
to strengthen its position in its 10 largest emerging markets, including China, India,
Indonesia, Brazil and Russia, in which it already has a presence.
Become A Company Driven by Innovation
P&G invests about $2 billion annually in research & development, significantly more
than its competitors. This high R&D spend helps P&G launch improved and
innovative products at regular intervals to maintain, as well as expand its market
share. The latest examples of innovation by P&G include the first power toothbrush

with Bluetooth technology, Tide PODS Plus Febreze, Tide PODS Free & Gentle
and Tide PODS Original Scent, SK-II Mid-Day Miracle Essence and SK-II Mid-Night
Miracle Essence, Pampers Premium Care Pants, Crest 3D white and Gillette
FlexBall and Venus Swirl. Innovation, particularly in the premium categories, is the
key to driving profitability as P&G already has significant scale and a high level of
concentration in developed markets like the US, Western Europe and Japan.
Become A Far More Productive Company
As a result of the Companys strategic focus on leading brands P&G plans to save
$10 billion in costs by 2016, which includes saving potential across all spending
elementscost of goods sold, marketing spending, and overheadfor the next
several years. It is planning to utilize better manufacturing reliability and adherence
to quality standards and Increasing localization of the supply chain to improve cost
of goods sold. It is working on optimising media mix with more digital, mobile, search
and social presence, improved message clarity to achieve greater savings in nonmedia spending.

How P&G Makes Money?

P&G operates its business through five segments- Beauty, Hair and Personal Care,
Grooming, Health Care, Fabric Care and Home Care and Baby, Feminine and
Family Care. P&G customer segments include- mass merchandisers, grocery
stores, membership club stores, drug stores, department stores, salons, distributors
and high-frequency stores. Walmart is P&Gs largest customer that accounted for
around 14% of the total revenues in FY15.
P&G also directly sells its products to customers through www.pgshop.com.
Following diagram shows how the money flows-in from the different customer
segments and the key cost elements where the money flows-out to.
P&G Business Segments
P&G reports its activities in five business segments: Beauty, Hair and Personal
Care, Grooming, Health Care, Fabric Care and Home Care and Baby, Feminine and
Family Care
Procter and Gamble Business Segments
Beauty, Hair and Personal Care: P&G offers a wide variety of products in this
segment. Beauty category offers products ranging from deodorants to cosmetics to
skin care. P&G is the global market leader in the retail hair care and color market.

Head & Shoulders, Olay, Pantene, SK-II and Wella (that is recently sold out to Coty)
are the billion dollar brands in this segment
Grooming: P&G is the global market leader in the blades and razors market.
Fusion, Gillette, Mach3, Prestobarba are the billion dollar brands in this segment. It
sells electronic hair removal devices, such as electric razors and epilators, under the
Braun.
Health Care: P&G operates in oral care and personal health care category. Crest,
Oral-B and Vicks are its billion dollar brands. Company generates healthcare
revenues outside USA through PGT Healthcare partnership with Teva
Pharmaceuticals Ltd.
Fabric Care and Home Care: This segment is comprised of a variety of fabric care
products including laundry detergents, additives and fabric enhancers; and home
care products including dishwashing liquids and detergents, surface cleaners and air
fresheners. Ariel, Dawn, Downy, Febreze, Gain, Tide are the billion dollar brands in
this category.
Baby, Feminine and Family Care: In baby care, company mainly
provides,
Pampers diapers, pants and baby wipes. Always is the leading brand in the feminine
care category. Family care business is predominantly a North American business
comprised largely of the Bounty paper towel and Charmin toilet paper brands.
P&G FY 2015 Revenues By Business Segments
In FY15 (fiscal year ended June 30, 2015), P&G generated $76.3 billion of total
revenues. Of these total revenues, P&G generated
$22.3 billion revenues, 29.2% of the total, from the Fabric Care & Home Care
segment.
$20.2 billion revenues, 26.5% of the total, from the Baby, Feminine & Family Care
segment.
$18.1 billion revenues, 23.8% of the total, from the Beauty, Hair & Personal Care
Segment.
$7.7 billion revenues, 10.1% of the total, from the Healthcare Segment.
$7.4 billion revenues, 9.8% of the total, from the Grooming Segment.
Procter and Gamble Business Segment Revenue
P&G FY 2015 Profits And Profit Margins

Of the $76.3 billion of P&G total revenues in FY15, $38.9 billion were the total cost
of products sold. This resulted in the gross profits of $37.4 billion and a gross profit
margin of 49%. P&G other operating costs were $25.6 billion. These include
Marketing expenses, selling expenses, R&D costs, administrative and other indirect
overhead costs and depreciation & amortisation expenses on non manufacturing
assets. This resulted in $11.8 billion of operating profit and an operating margin of
15.5%. After interest and other non-operating income and expenses and income
taxes, P&G had a net profit of $7.1 billion and a net margin of 9.4%.
Procter and Gamble Revenues and Revenue Share-FY15