NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2022 AND FOR THE YEARS ENDING JUNE 30, 2021 AND 2020
1. |
DESCRIPTION OF THE PLAN
|
The following brief description of Procter & Gamble Holding France S.A.S. Group Profit Sharing, Incentive and Employer Contribution Plan (the
“Plan”) is provided for general information only. Participants should refer to the Plan Document and their country’s Plan supplement for more complete information.
General — The Plan is
an employee savings plan established on December 17, 1990 by agreement between Procter & Gamble S.A. (Procter & Gamble S.A. changed its name to Procter & Gamble Services France and then to Procter & Gamble Services Neuilly
before its current name Procter & Gamble Holding France S.A.S.) together with its directly wholly-owned subsidiaries (with the exception of P&G Health France that is not part of this agreement yet), and those subsidiaries’ respective
Work councils, in order to provide a means for eligible employees to save and invest their income, group profit sharing, and incentive remuneration. The most recent Plan agreement took effect on January 1, 2015 and was signed by Procter &
Gamble Holding France S.A.S., Procter & Gamble France S.A.S., Procter & Gamble Pharmaceuticals France S.A.S., Procter & Gamble Amiens S.A.S., Procter & Gamble Blois S.A.S (together, “P&G France”) and their related Work
councils. An amendment to the Plan to increase the Employer’s matching contribution was implemented as of FY 18/19, signed by the same parties. On July 1st 2021, Procter & Gamble Pharmaceuticals France has been legally merged
with P&G Health France SAS with a retroactive effect on July 1st 2020 from a Tax and Local statutory accounting standpoint. As a result, Procter & Gamble Pharmaceuticals France has left the Plan agreement as of July 1st
2020.
In addition to the Plan, a collective Pension Savings plan (“PERCO”) was established for Procter & Gamble Holding France S.A.S and the following
subsidiaries: Procter & Gamble France S.A.S., Procter & Gamble Pharmaceuticals France S.A.S, Procter & Gamble Blois S.A.S, and Procter & Gamble Seine S.A.S (which was merged with Procter & Gamble Holding France in February
2018). Procter & Gamble Pharmaceuticals has left the PERCO plan in July 2020 as a result of the merger with P&G Health France SAS. The PERCO is in place since January 1st 2013 for the aforementioned entities and was established
in June 2016 for Procter & Gamble Amiens S.A.S.
Procter & Gamble Holding France S.A.S. is indirectly a wholly-owned subsidiary of The Procter & Gamble Company (the “Parent”). The Plan and
the PERCO are subject to the laws and regulations of France. The assets of the Plan and of the PERCO are invested in five “Fonds Commun de Placement d’Entreprise”
(“FCPE”) which are registered investment funds reserved to employees of “P&G France” subject to the laws and regulations of France. The plan’s financial statements are a combination of the 5 FCPE.
Administration — Administration of the Plan and of the PERCO are executed by Procter & Gamble Holding France S.A.S. with the support of Natixis
Investments Managers International (previously Natixis Asset Management), the fund manager. The five FCPE are under the supervision of the Conseils de Surveillance
(“Monitoring Committees”) which are composed of both employee and employer representatives of “P&G France”.
Participants Accounts and Investments Options — An account is maintained for each employee and reflects employee and employer contributions as well as employee withdrawals. There is no provision for the allocation of income since the FCPE’s do not pay dividends.
Participants are permitted to invest into any of the five FCPE’s; however, employees contributions generating a P&G matching contribution can only be invested in FCPE Groupe Procter & Gamble (Option D). Amounts may be transferred from
one FCPE to another FCPE for both blocked and available funds with the exception of FCPE Groupe Procter & Gamble (Option D) out of which only unblocked funds may be transferred.
Participants may allocate their account balances to one or all of the following investment options offered by the Plan:
•
|
FCPE Groupe Procter & Gamble Actions (Option A) –
The prospectus indicates that this fund is primarily invested in securities or in mutual funds which invest with a minimum of 60% in International securities and with a maximum of 40% in International interest rate products.
|
•
|
FCPE Groupe Procter & Gamble Obligations (Option B) – The prospectus indicates that this fund is primarily invested in Eurozone monetary products or in mutual funds which invest primarily in Eurozone monetary products.
|
•
|
FCPE Groupe Procter & Gamble 5000 (Option C) – The
prospectus indicates that this fund is primarily invested in securities or in mutual funds invested at least at 90% in securities (Europe, United States, Asia and emerging countries) and with a maximum of 10% invested in Eurozone
monetary products.
|
•
|
FCPE Groupe Procter & Gamble (Option D) – The
prospectus indicates that this fund is invested at least at 90% in The Procter & Gamble Company common stock and with a maximum of 10% invested in US/Euro zone monetary products.
|
•
|
FCPE Groupe Procter & Gamble (Option F) – The
prospectus indicates that this fund is invested at 80% in International bonds or in mutual funds which invest in International bonds, at 20% in “socially responsible investment” Euro bonds or in mutual funds which invest in “socially
responsible” Euro bonds.
|
For the PERCO, investments in Option D are not possible. The other Options are accessible at the discretion of the employee.
Contribution and Vesting — Employees are eligible to the Plan three months after their start date with “P&G France”. Contributions are made by Plan participants
as well as by “P&G France” as follows:
Employees’ Contributions:
- Voluntary, periodic contributions – These are usually contributed on a monthly basis. They are eligible for matching contributions from P&G France. These contributions are automatically invested in
Option D.
- Voluntary, complementary contributions – Employees may make complementary contributions whenever they wish although these amounts receive no matching contributions. These contributions are invested at the
discretion of the employee in one of the five FCPE’s.
Employers’ Contributions:
- Employer matching contributions – P&G France makes a matching contribution between 50 and 100 percent, based on employees’ voluntary periodic contributions, with a maximum threshold of € 157.50. These
matching contributions are automatically invested in Option D.
- Profit Sharing – P&G France calculates and distributes profit sharing contributions according to French law (“Participation”) as well as a supplementary profit-sharing agreement (“Interessement”).
These amounts are invested at the discretion of the employee in one of the five FCPE’s. If no investment direction is given by the employee, amounts are automatically invested either as per the last investment choice or, by default, in Option B
(with a 50/50 split between PEE and PERCO for “Participation”, and 100% to PEE for “Interessement”.
All contributions are immediately 100 percent vested.
Contributions to the PERCO can be made by the employees
through i) voluntary periodic contributions, ii) investment of the profit-sharing contribution and iii) investment of remaining vacation days (up to 10 per fiscal year) for which “P&G France” will contribute under certain age conditions.
Withdrawals — All
contributions to the Plan are “blocked” for a period of five years beginning on October 1st of the calendar year in which the contribution was made. After this period, amounts are available for withdrawal without restriction. Under
certain circumstances, as defined by law, a participant may withdraw “blocked” contributions. All amounts become immediately available for withdrawal upon the termination of employment.
Plan Termination – The Plan agreement was renewed by written agreement between “P&G France” and their related Work councils in December 2014 with effective date January 1st, 2015 for an indefinite period.
In the event of Plan termination, the FCPE’s will either remain active or will be merged with other FCPE’s. Thus, Plan
participants will have the option to withdraw “unblocked” amounts or to remain invested. Future employee and employer contributions to the Plan would then be suspended.
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of Accounting —
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
Use of Estimates — The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and
changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Employer and participant’s contributions reflect the estimated total investments in the Plan, based on prior year behavior.
Risks and Uncertainties — The Plan utilizes various investment instruments as described in Note 1. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level
of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial
statements.
Plan Investments – The Plan’s investments are presented at fair-value based upon the net asset value of the units of each FCPE held by the Plan at year end. The net asset values of the FCPE’s are determined by the fund manager, Natixis
Asset Management, based upon the fair value of the FCPE’s underlying investments, less any liabilities.
Purchases and sales of investments are recorded on a trade date basis. Dividends are recorded on the ex-dividend date. The cost
of investments sold is determined using average cost.
Fair value measurements – ASC 820, Fair Value Measurements and Disclosures, established a single authoritative definition of fair value, set as a framework for
measuring fair value, and requires additional disclosures about fair value measurements. In accordance with ASC 820, the Plan classifies its investments into Level 1, which refers to securities valued using quoted prices from active markets for
identical assets; Level 2 which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Assets
are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The following table sets forth by level within the hierarchy a summary of the Plan’s investments measured at fair value on a recurring basis at June
30, 2022.
|
2022
|
2021
|
Asset Group
|
Level 1
|
Level 2
|
Level 3
|
Level 1
|
Level 2
|
Level 3
|
Procter & Gamble Company common stock
|
138,319,301
|
|
|
116,954,778
|
|
|
Other investments
|
65,402,530
|
|
|
75,104,758
|
|
|
TOTAL
|
203,721,831
|
|
|
192,059,536
|
|
|
Expenses of the Plan – Investment management, record keeping expenses, and other administrative expenses are paid by P&G Holding France S.A.S. Brokerage commissions are paid by the participants, and other costs related to the purchase or
sale of shares are reflected in the price of the shares and borne by the participants.
Contributions Receivable – Contributions that are pending transfer to the Fund manager as of June 30, 2022 and 2021 are recorded as contributions receivable to the Plan in the accompanying financial statements.
Payment of Benefits – Benefit payments to participants are recorded upon distribution. There were no amounts allocated to accounts of persons who have elected to withdraw from the Plan but have not been yet paid at June 30, 2022 and 2021.
Investments held by the Plan at June 30, 2022 and 2021 were as follows:
|
2022
|
|
2021
|
(All numbers in Euros)
|
Number
|
Market
|
|
Number
|
Market
|
|
of Shares
|
Value in €uros
|
|
of Shares
|
Value in €uros
|
Investments of each FCPE
|
|
|
|
|
|
|
|
|
|
|
|
• Groupe Procter & Gamble Actions (Option A)*
|
202,948
|
24,969,484
|
|
212,730
|
30,257,990
|
• Groupe Procter & Gamble Obligations (Option B)*
|
541,895
|
14,924,011
|
|
514,159
|
14,243,752
|
• Groupe Procter & Gamble 5000 (Option C)*
|
641,618
|
20,692,574
|
|
649,486
|
24,777,616
|
• Groupe Procter & Gamble (Option D)*
|
352,842
|
138,319,301
|
|
366,493
|
116,954,778
|
• Groupe Procter & Gamble Obligations (Option F)*
|
3,225,029
|
4,816,462
|
|
3,309,031
|
5,825,400
|
|
|
|
|
|
|
Total investments
|
|
203,721,831
|
|
|
192,059,536
|
*Represents investments which exceed five percent of net assets available for benefits
The Plan’s investments experienced unrealized (depreciation) appreciation in value as follows for the years ended June 30, 2022, 2021 and 2020:
(All numbers in Euros)
|
2022
|
|
2021
|
|
2020
|
|
|
|
|
|
|
The Procter & Gamble Company Common stock (FCPE Option D)
|
|
|
|
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Cost
|
57,835,747
|
|
53,065,962
|
|
46,660,807
|
Market value
|
138,319,301
|
|
116,954,778
|
|
109,384,880
|
Unrealized appreciation (depreciation)
|
80,483,553
|
|
63,888,816
|
|
62,724,073
|
|
|
|
|
|
|
(Decrease) increase in unrealized appreciation
|
16,594,738
|
|
1,164,743
|
|
3,945,557
|
|
|
|
|
|
|
Other investments (FCPE Option A, B, C, F)
|
|
|
|
|
|
Cost
|
58,636,412
|
|
57,538,590
|
|
59,841,553
|
Market value
|
65,402,530
|
|
75,104,758
|
|
66,240,112
|
Unrealized appreciation (depreciation)
|
6,766,119
|
|
17,566,167
|
|
6,398,559
|
|
|
|
|
|
|
Increase (decrease) in unrealized appreciation
|
(10,800,048)
|
|
11,167,609
|
|
1,055,415
|
The realized gain (loss) on the sales of the Plan’s investments for the years ended June 30, 2022, 2021, and 2020 was determined as follows:
(All numbers in Euros)
|
2022
|
|
2021
|
|
2020
|
|
|
|
|
|
|
The Procter & Gamble Company Common stock
|
|
|
|
|
|
Proceeds on sales of shares
|
15,671,667
|
|
12,981,432
|
|
13,793,029
|
Cost
|
7,798,009
|
|
6,624,381
|
|
6,659,302
|
Realized (loss) gain
|
7,873,658
|
|
6,357,050
|
|
7,133,727
|
|
|
|
|
|
|
Other investments
|
|
|
|
|
|
Proceeds on sales of shares
|
15,026,384
|
|
15,980,506
|
|
15,129,613
|
Cost
|
13,173,602
|
|
14,518,727
|
|
14,562,547
|
Realized (loss) gain
|
1,852,782
|
|
1,461,779
|
|
567,066
|
4. |
NON-PARTICIPANT - DIRECTED INVESTMENTS
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FCPE Option D is considered to be non-participant directed under the guidance of SOP 99-3 because participants are required to
maintain contributed funds in the Parent’s stock.
Information about the net assets and the significant components of the changes in net assets relating to the non- participant
directed investments as of June 30, 2022, 2021 and 2020 is as follows:
(All numbers in Euros)
|
2022
|
|
2021
|
|
2020
|
|
|
|
|
|
|
Net assets:
|
|
|
|
|
|
P&G Company Stock (FCPE Option D) - beginning of year
|
116,954,778
|
|
109,384,880
|
|
103,363,105
|
|
|
|
|
|
|
Changes in net assets:
|
|
|
|
|
|
Net appreciation (depreciation) in fair value of investments
|
26,701,056
|
|
9,462,736
|
|
13,071,414
|
Participant contributions
|
4,588,422
|
|
4,331,884
|
|
4,017,217
|
Employer contributions
|
4,518,875
|
|
4,385,583
|
|
4,014,420
|
Benefits paid to participants
|
(14,443,830)
|
|
(10,610,305)
|
|
(15,081,277)
|
Net change
|
21,364,523
|
|
7,569,898
|
|
6,021,775
|
|
|
|
|
|
|
P&G Company Stock (FCPE Option D)—end of year
|
138,319,301
|
|
116,954,778
|
|
109,384,880
|
As of June 30, 2022, the Plan had 2,224 participants investing in the Plan (vs 2,172 as of June 2021) whereas 757 employees (750
as of June 30, 2021) chose to collect their year group profit sharing rather than invest in the plan.
The Plan and the underlying FCPE’s are subject to the tax laws of France. The Plan and the underlying FCPE’s are tax-exempt
according to French tax law. Thus, no provision for income taxes has been reflected in the accompanying financial statements.
7. |
RELATED PARTY TRANSACTIONS
|
At June 30, 2022 and 2021, the plan held 1,005,450 and 1,027,550 shares respectively, of common stock of the Procter &
Gamble Company, the sponsoring employer with a cost basis of € 57 835 747 and € 53 065 962 respectively and a fair value of € 138 319 301 and € 116 954 778 respectively.
During the years ended June 30, 2021, 2020 and 2019, the Plan recorded dividend income from common stock of the Procter &
Gamble Company of € 2 236 041, 1 944 212 and € 1 995 382 respectively.
During the years ended June 30, 2021, 2020 and 2019, the Plan’s investment in common stock of The Procter & Gamble Company,
including gains and losses on investments bought and sold as well as held during the year (depreciated) appreciated in value by € 24 468 395, € 7 521 793, and € 11 079 283 respectively.
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other
persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized on September 22, 2022.
PROCTER & GAMBLE HOLDING FRANCE S.A.S.GROUP PROFIT SHARING, INCENTIVE AND EMPLOYER
CONTRIBUTION PLAN (FRANCE)
By:/s/ Beatrice Dupuy
Beatrice Dupuy
President
Procter & Gamble Holding France S.A.S. Group Profit Sharing,
Incentive and Employer Contribution Plan (France)
EXHIBIT INDEX
Exhibit No.