2022 earnings call transcript

Limited

Good afternoon, one and all. I welcome all of you and thank you for joining the 55th

Annual General Meeting of Procter and Gamble Health Limited. This AGM is being conducted through an audio-video means as permitted by the Ministry of Corporate

Affairs and the Securities and Exchange Board of India. We sincerely hope that you and your families are all safe and sound while we missed the opportunity to interact with you in person, we are glad that we are able to come together virtually. The requisite quorum being present, I called the meeting to order.

I will just do the introduction of those who are present here.

Mr. Milind Thatte, Managing Director.

Mr. Amit Gupta, Chief Financial Officer and Executive Director.

Ms. Rani Ajit Jadhav, Independent Director.

Mr. S. Madhavan, Independent Director.

Mr. Aalok Agrawal, Director.

Dr. Elizabeth Desmond, Director.

Ms. Zeal Shah, Company Secretary.

The representatives of the statutory auditors and secretarial auditors are also attending this meeting. I am informed that one representation under Section 113 of the

Companies Act, 2013, representing 52.18% of the paid-up share capital has been received. Since the auditors’ reports and the secretarial audit report do not contain any qualification or observations, they are not required to be read. I request Ms.

Zeal Shah, Company Secretary to take the shareholders through the general instructions regarding virtual participation in this AGM.

Ms. Zeal Shah – Company Secretary, Procter & Gamble Health Limited:

Thank you, sir.

Good afternoon, dear shareholders. All the members are placed on mute mode by the host so as to avoid any disturbances and to ensure smooth conduct of the meeting.

Since this meeting is being held through audio-video means and physical attendance of members has been dispensed with, the facility to appoint proxies to attend and cast votes on behalf of the members is not available for this Annual General

Meeting.

1

Register of directors and other statutory registers are available electronically for viewing by the members. Those who wish to view the same may write to the company at the investor relations email ID, which is provided in the notice to this

Annual General Meeting. Live streaming of this meeting is available on NSDL website. If any shareholder faces any technical issues, he or she may call NSDL helpline at 1800-222-990. I now hand over to Mr. Talwar to take the proceedings ahead.

Mr. Suresh Talwar – Chairman & Independent Director, Procter & Gamble

Health Limited

Dear shareholders, welcome to the 55th Annual General Meeting of the Procter &

Gamble Health Limited. I'm delighted to be connecting with all of you today to share your company's performance over the last financial year. I would like to begin by introducing our new board members, Mr. S. Madhavan. Mr. Madhavan is a chartered accountant with a Master’s degree from IIM Ahmedabad. He has over 37 years of rich business experience and is a Director on the Boards of several prominent companies in

India. Welcome, Mr. Madhavan. We are indeed delighted to have you with us on

Board. I'm happy to share that Procter & Gamble Health Limited has registered a strong performance in the fiscal year 2021-22 delivering a consistent growth in revenue and earnings. We have all witnessed the pandemic bringing an enhanced focus on preventing health and overall wellness among consumers and this in turn has resulted in a growing demand for trusted brands.

Through our strong portfolio of superior quality and highly recommended products, we have been earnestly working towards addressing this increasing demand supported by extensive efforts across all fronts to improve awareness and accessibility. Through scientifically backed communications, disseminated through media, consumer websites, digital platforms, and in HCP education programs, we worked towards helping people break from iron deficiency with Livogen, be always on

Polybion, feel like with Neurobion, nourish yourselves with Evion, and get fast relief from nasal congestion with Nasivion. Dedicated productively, productivity initiatives were driven to deliver shareholder value and go to market strategy further strengthen to meet the needs of a growing business. The year has also been exceptional, has also seen exceptional progress on e-commerce with our brands now present in all leading online health platforms. Our SEHAT CSR initiative has grown from strength to strength with 9 Bespoke Programs each addressing an important aspect of public health.

Today, we have public health scholars, Swasthya Sakis Arogya Sakis and Potion Sarkis all making a difference towards public health at the grassroots.

We are supporting the healthcare needs of vulnerable children and disadvantaged elderlies. On World Environment Day, we launched a first of its kind pharmacy education and waste management program. As a result of this initiative, tons of waste material, which would have gone to landfill is now getting recycled. We are now expanding this program to more states in India. We continue to progress on diversity and inclusion with our high rise and Gable programs. We organized our first

Women in Healthcare Summit in association with pharmacy colleges from across India to help students learn more about

2 careers in healthcare. At this summit we also launched our Women in Healthcare

Scholarship Program.

I hope you had a chance to go through our annual report for more information on these initiatives and many more as your company continues to step up both as a force to growth and a force for good. None of this would have been possible without the untiring efforts of our employees, the partnership of our customers, and the support of all of you, our shareholders, and for this we are very thankful. At Procter & Gamble Health Limited, healthcare is about human care. It is about understanding the person before the patient.

Combining this deep consumer and patient understanding with breakthrough science, we stand committed to continue serving the people of India and help empower them to live with healthier and more vibrant lives. Thank you.

I now request a Managing Director, Mr. Milind Thatte to address the shareholders.

Mr. Milind Thatte – Managing Director, Procter & Gamble Health Limited:

Thank you, Mr. Chairman and just taking from what Chairman, Mr. Talwar said about personifying healthcare with human care, our efforts have been towards growing our business through this deep understanding, understanding the person before the patient and made possible by science far superior than any other. So, welcome and good afternoon shareholders. It's a pleasure to interact with you at this 55th Annual General

Meeting and before I really take you little more deeper into what your company has done, let me invite the first video. So, next slide please.

(Audio Visual Playing 45:00 to 46:50)

So, dear shareholders, over a period of last few years as you have been seeing, we have developed a very strong portfolio of superior quality and highly recommended products.

We have developed products and launched them, which are very highly endorsed and recommended by healthcare professionals. Even consumers and patients are able to make choices to pick up the product depending on their health needs. In the last fiscal, our efforts have been towards creating more awareness for the products. Can we see the next slide please?

So, in the fiscal 2021-22, we increased our media sufficiency across the key brands and these are the top five brands where we have invested a lot in terms of creating awareness among the patients among the consumers and also we have invested in terms of making sure that the healthcare professionals, the doctors and nurses are also endorsing our brands through different initiatives to make sure that brand awareness and the clinical results of brand are well appreciated by these experts who endorse our products. Next slide please.

We have used a constructive disruption across the various platform during the fiscal. The first one was about digital initiatives, so towards creating more awareness and addressing the consumers, we use the digital initiative and used celebrity endorsement towards creating awareness about certain symptoms. So, you must have seen some of them in the

3 beginning of the AGM when some of these were on a display. Similarly, for engagement of our doctors and healthcare professionals, we have used digital medium and also videos presented by key opinion leaders towards development of the category also bringing the expertise of management of certain disease conditions where our products can be used.

So, digital initiative have been at the forefront deployed by the company.

The second important piece was about e-commerce or the E-Pharmacy part of the business. We deployed dedicated resources towards E-Pharmacy and as a result, I can proudly say now that you know if you walk across any of the E-Pharmacy platforms, whether it is 1MG or Netmeds, or PharmEasy, our products are available and the consumers can make their self-choices in terms of identifying some of our brands and therefore use those products for the different health conditions that they may want to use it. Similarly, to support our advertising initiatives and also for repeat consumers or repeat buying consumers, we made sure that our products have been also on displays at pharmacies. So, especially on two brands Neurobion and Evion, we have done a lot of display initiatives, which is right now ongoing. It started from last year -- last fiscal and as we move forward in this fiscal also, this initiative is something which is work in progress and we will drive towards that.

Next slide please. While the management has done a lot of efforts in creating brand awareness, making sure that the products availability, and pick up by the consumers is much facilitated at the pharmacy and drug stores, as a company, we faced a lot of headwinds. I am sure you have seen this from our annual report also that we have been hit by unprecedented price hikes in our raw material and packaging material due to inflation, also because of commodity prices like metal and crude oils. If you look at our major packaging material, there has been a constant higher price that we have been incurring ranging from 25% up to almost 15% up, so a lot of headwinds in terms of increasing our cost in terms of manufacturing. Same is the case we have seen even in raw material prices. They have jumped to as high as 225% in glycerin and also some of the actives like what goes into Evion capsule to almost 25%. So, the company had been actually facing a lot of challenges in terms of managing the rising cost, which goes for the manufacturing and the operations.

Next slide please. In spite of all such headwinds, your company has delivered revenues and profits adding to the shareholder value. As seen from the final results, our sales, the income from operations are up by 10½%, and the PAT was up by 9%. So, I think it's a given the kind of context that we are operating in the tough conditions lot of headwinds.

I think the deliveries have been very satisfying from the context of how the company is performed and also not just that company has also invested in making sure that the brands are poised for future growth as well. Can we go to the next slide please?

Understanding and addressing health care needs in terms of creating thriving communities is very, very important aspect of our CSR initiative. So, the CSR initiative

P&G SEHAT has seen, as Mr. Chairman also said, 9 different Bespoke Program whether it is health scholarship, whether it is creating P&G Swasthya Sakhi Program or a gift of health program, women's healthcare in scholarship, yes to Potion Program. So, all the

4

CSR initiative that your company has done is towards creating communities with better health, focused towards SEHAT domain of the community. Can we have the video please.

(Audio Visual Playing 53:09 to 55:10)

While the company has been engaged in the business of healthcare, our commitment is very strong towards environment and sustainability. One of the examples that I would like to quote here dear shareholders is about the plastic waste management. In the last two years, the last two fiscals I would say, while the company utilized plastic or purchase plastic almost you know 2,128 tons in its own manufacturing and when the government norms were to recycle about 910 tons of plastic, we as a company demonstrating our commitment towards the environment have recycled 4,600 tons, which is double the plastic that we have actually consumed in our manufacturing to demonstrate our strong commitment towards sustainability of the environment. Not just that, through our CSR program also we have kick started a pilot program in New Delhi where there are 20 pharmacies from where we are engaged in daily waste collection of paper as well as plastic and currently the collection that we are happening from these 20 pharmacies itself is almost channel 9006 plus kilograms of plastic and almost 600+ kilograms of paper and our idea is to expand this 20 pharmacies now going towards more and more pharmacies are engaging with our partners in business. Again, this demonstrates our commitment towards environment and sustainability.

Next slide please. At P&G, we are also committed towards creating a very, very inclusive workplace and one of our initiative called Rise is more about creating role models who are able to inspire our employees and we are able to support employees coming from different gender, coming from different aspirations, and also different preferences, and we believe strongly in empowering our employees so that we create a better workplace.

As a part of this initiative, we had launched a P&G Women in Healthcare Summit in in

2022 in the fiscal that passed away and we found a lot of I would say engagement from women aspirants who would want to perhaps join healthcare industry and P&G Health has left a strong mark in the industry as well as for the aspiring youth who would want to join healthcare industry. So, these are some of the initiatives that your company has taken and I'm very glad to say the company has really demonstrated it leadership not just in business, but also in creating a workplace in a holistic company, which really makes you all proud. Thank you very much. With that, I hand it over back to Mr. Chairman,

Mr. Talwar. Thank you.

Mr. Suresh Talwar – Chairman & Independent Director, Procter & Gamble Health

Limited

Thank you, Milind. I would request Ms. Zeal Shah to please read out the resolutions being put for vote at this AGM.

Ms. Zeal Shah – Company Secretary, Procter & Gamble Health Limited:

Thank you, Sir. Dear shareholder, the notice dated August 29, 2022, has been circulated by email to those shareholders who have registered their email IDs and same is also

5 available on the website of the company and the stock exchanges. There are 5 items being proposed under ordinary business as ordinary resolutions, which are as follows:

Item no. 1: To adopt the financial statements for the financial year ended June 30, 2022, together with the reports of the auditors and the directors thereon.

Item no. 2: To confirm payment of interim dividend and declare final dividend for the financial year ended June 30, 2022.

Item no. 3: To reappoint Mr. Amit Gupta who retires by rotation and being eligible offers himself for reappointment.

Item no. 4: To reappoint Mr. Aalok Agrawal who retires by rotation and being eligible offers himself for reappointment.

Item no. 5: To reappoint Haribhakti & Company LLP, Chartered Accountants as statutory auditors of the company to hold the office from the conclusion of this AGM until the conclusion of the 60th Annual General Meeting of the company.

There are two items being proposed under special business and all our proposed as ordinary resolutions, which are;

Item no. 6: Payment of Commission to the non-Executive Directors of the company for a period of five years with effect from January 1, 2023.

Item no. 7: Ratification of remuneration payable to the cost auditors for the financial year

2022-23.

Further, the company had provided an e-voting facility for members to cast their vote through remote voting which had commenced on Friday, November 18, 2022 at 9:00 am and ended on Tuesday, November 22, 2022 at 5:00 pm. Those who have not done so and are attending this AGM shall be eligible to vote through the remote e-voting system that is also active after 30 minutes from the conclusion of this AGM. Mr. Nrupang Dholakia and Mr. Vishwesh Bhagat, Practicing Company Secretaries have been appointed as the scrutinizers for conducting the scrutiny of the votes casted through e-voting at the meeting. Procedure of e-voting at the AGM is the same as the remote e-voting mentioned in the AGM notice. I hand over to Mr. Talwar.

Mr. Suresh Talwar – Chairman & Independent Director, Procter & Gamble Health

Limited

As some members have expressed their desire to speak at this AGM by registering as speakers, we would invite the speakers one by one. Members are requested to follow the instructions of the company. I appeal to the speakers to ask their question related to accounts in the company for which we are meeting today, and please avoid questions already asked, and to be brief and as far as possible limit the time to 3 minutes. The management will respond to the questions at the end of the session. I thank the speakers

6 for extending this cooperation. I request the meeting host to assist in conducting the question & answer session.

Moderator

The names of the shareholders who have registered themselves as speakers will be announced one by one and the respective speaker will be unmuted. Shareholders are requested to click the audio and video-on to start speaking. If the shareholder is unable to join through video mode for any reason, he or she can join through audio mode. If there are connectivity issues from the speaker’s end, the next speaker will be asked to join.

Once the connectivity improves, he or she will be requested to join once again to speak after all the other registered speaker shareholder have completed their turn. We urge the shareholders to limit their time to 3 minutes.

Ms. Lekha Satish Shah, Mr. Santosh Kumar Saraf, Mr. Manoj Kumar Gupta, Mr. Ashish Shankar

Bansal, Mr. Dipankar Purkayastha, Mr. Dinesh Bhatia, Mr. Rajesh K. Chainani, Mr. Vipul Shah, Mr.

Sharadkumar Jivraj Shah, Ms. Celestine Elizabeth Mascarenhas, Ms. Homayun Beruz Pouredehi, Mr.

Aspi Bhesania, Mr. Paresh. G. Sangani, Mr. Ronald Francis Fernandes, Mr. Hariram Chaudhury, Ms.

Kishori Suresh Bhave, Mr. Siddhant Maheshwari, Mr. Sudhir Golecha, Mr. Shalabh Agarwal, Ms.

Hutokshi Sam Patel, Mr. Yusuf Rangwala and Ms. Prakashini. G. Shenoy who had registered themselves as speakers, expressed their views on the Company and sought clarifications on the accounts of the Company, its business operations. The Management addressed the shareholders’ queries and thanked the shareholders for their compliments and valuable feedback.

Mr. Suresh Talwar – Chairman & Independent Director, Procter & Gamble Health

Limited

Okay, thank you. Shareholders having answered your questions, I once again convey my thanks to all of you and declare the meeting closed. This meeting will be deemed to be concluded with the declaration of the results. The results of the voting will be announced within 48 hours of conclusion of this meeting to the Stock Exchanges and will also be available on the website of the company. The e-voting facility will be open for the next 30 minutes to enable members to cast their vote Request all of you to stay safe and take care of yourself. Thank you very much.

E-voting