Procter and Gamble Hygiene and Health Care

Dear Shareholders,
 
 It gives me great pleasure to share with you the annual results of your
 Company for the year 2008–09.
 
 Despite a challenging business climate, the Company continued to
 deliver high double digit growth with Profit after Tax (PAT) going up
 by 36% to Rs.178.85 crores. Total sales also grew a healthy 20%, from
 Rs.642.96 crores last year to Rs.772.81 crores.  Profit Before Tax grew
 from Rs.180.56 crores to Rs.231.66 crores, up 29%.
 
 You will be proud to know that the core business of your Company has
 grown in terms of sales and profits for the 7th year in succession. I
 attribute this sustained success to a singular focus on improving the
 fundamentals of our business - deep consumer understanding, meaningful
 marketing innovations, persuasive and engaging communication and wider
 availability.
 
 This year, there were many significant highlights in the overall growth
 story. The Health Care business continued to consolidate its market
 leadership by posting a strong 14% growth in sales, reaching Rs.344.52
 crores, across VICKS Vaporub, VICKS Cough Drops, VICKS Action-500 and
 VICKS Inhaler. VICKS Vaporub reached its highest ever market share this
 year. The growth of VICKS Cough Drops business too progressed steadily
 behind the successful launch of Asli Ginger. Seeing this year on year
 sustained growth, I am confident that VICKS will continue to remain the
 most trusted cough and cold care solution in India.
 
 The story is no different with our Feminine Hygiene business. For the
 6th consecutive year, it recorded high double digit growth of 26%,
 taking total sales upto Rs.428 crores.  You will be happy to know that
 among all P&G companies in the world, your Company delivered the
 highest sales and share growth, with WHISPER Ultra becoming the biggest
 value share brand in the category.
 
 During the year under review, a number of initiatives were designed to
 delight our Boss - the Consumer. In the context of the current economic
 climate, where the consumer is more sensitive to value than usual, we
 introduced a mid-tier product surrounded by the campaign idea of
 ‘Change When You Want To to provide consumers the option of changing
 by choice and not because the product did not last long enough. The
 success of this idea is evident in the fact that WHISPERs overall
 share shot to its highest ever in the past 11 years and underlined
 WHISPERs position as the No.1 Feminine Hygiene brand in India.
 
 The story of success, in my mind, is incomplete if it is only about
 sales and profit numbers. As a Company that lives and breathes the
 philosophy of Touching Lives, Improving Life, we are committed to
 making a difference beyond providing superior quality brands. This is
 the purpose of P&G and the inspiration for our growth comes from this
 purpose.
 
 As you are already aware, your Company had entered into a Public
 Private Partnership (PPP) with the National Rural Health Mission (NRHM)
 to provide education and sanitary protection to thousands of rural
 women in Rajasthan to help them lead healthier, hygienic and more
 productive lives. Significantly, the program has been able to convert
 85% of cloth users to sanitary pad users who used WHISPER. We will
 continue to strengthen this program in coming months and years.
 
 Similarly, your Companys signature cause marketing program Shiksha
 continued to reach out to underprivileged children in India and provide
 them with access to education. In its 5th year, Shiksha will touch the
 lives of over 96,000 children in 432 communities across India.
 
 In sum, our breakthrough concepts, superior value and innovations are
 helping your Company win among consumers in the marketplace and through
 our efforts to improve the lives of consumers, we believe that we win
 in their hearts too.
 
 Thank you and look forward to your continued trust, support and
 steadfast belief in P&G.
 
 
 
 Mumbai                                                    R.A. Shah
 August 27, 2009                                           Chairman