SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
\X\ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED December 31, 2001, OR
\ \ FOR TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO
---------------
Commission file number 001-00434
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below: Employee Savings and Thrift Plan (Saudi Arabia),
P. O. Box 2056, Mazda Building, Bab Makkah, Jeddah, 21451, Saudi Arabia
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: The Procter & Gamble Company, One
Procter & Gamble Plaza, Cincinnati, Ohio 45202.
REQUIRED INFORMATION
Item 1. Audited statement of financial condition as of the end of the latest two
fiscal years of the plan (or such lesser period as the plan has been in
existence). (See Page 2)
Item 2. Audited statement of income and changes in plan equity for each of the
latest three fiscal years of the plan (or such lesser period as the plan has
been in existence). (See Page 3)
EMPLOYEE SAVINGS AND THRIFT PLANS- MODERN INDUSTRIES COMPANY (JEDDAH), MODERN
INDUSTRIES COMPANY (DAMMAM) AND MODERN PRODUCTS COMPANY COMBINED FINANCIAL
STATEMENTS AND INDEPENDENT AUDITORS' REPORT FOR THE YEARS ENDED DECEMBER 31,
2001 AND 2000
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INDEX PAGE
Independent Auditors' Report 1-2
Combined Statements of Net Assets 3
Combined Statements of Changes in Net Assets 4
Notes to the Combined Financial Statements 5-8
Combined Supplemental Schedule
Statements of Investments 9
Bakr Abulkhair & Co. Member
Public Accountants Deloitte
P.O. Box 442, Jeddah 21411 Touche
Kingdom of Saudi Arabia Tohmatsu
Tel +966(2)6572725
Fax +966(2)6572722
Head Office: Riyadh
License No. 95
INDEPENDENT AUDITORS' REPORT
To the Trustees of:
Modern Industries Company (Jeddah) - Employee Savings and Thrift Plan,
Modern Industries Company (Dammam) - Employee Savings and Thrift Plan, and
Modern Products Company - Employee Savings and Thrift Plan
We have audited the accompanying combined statements of net assets of Employee
Savings and Thrift Plans for Modern Industries Company (Jeddah), Modern
Industries Company (Dammam) and Modern Products Company, which are centrally
administered as the Savings and Thrift Plans (Saudi Arabia) of The Procter &
Gamble Company, (the "Plans") as of December 31, 2001 and 2000, and the related
combined statements of changes in net assets for the years then ended. These
combined financial statements are the responsibility of the Plans' Trustees. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the combined financial statements present fairly, in all
material respects, the net assets of the Plans as of December 31, 2001 and 2000
and the changes in net assets for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
combined financial statements taken as a whole. The accompanying combined
supplemental schedule listed in the Index is presented for the purpose of
additional analysis and is not a required part of the basic combined financial
statements. The schedule is the responsibility of the Plans' Trustees. Such
combined supplemental schedule has been subjected to the auditing procedures
applied in our audit of the basic combined financial statements and, in our
opinion, are fairly stated in all material respects when considered in relation
to the basic combined financial statements taken as a whole.
Bakr Abulkhair & Co.
AL-MUTAHHAR Y. HAMIDUDDIN
-------------------------
License No. 296
6 Muharram, 1422
March 31, 2002
EMPLOYEE SAVINGS AND THRIFT PLANS - MODERN INDUSTRIES COMPANY
(JEDDAH), MODERN INDUSTRIES COMPANY (DAMMAM) AND MODERN
PRODUCTS COMPANY
COMBINED STATEMENTS OF NET ASSETS
AS OF DECEMBER 31, 2001 AND 2000
(Expressed in Saudi Riyals)
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2001 2000
---- ----
ASSETS
Investments:
Procter & Gamble securities
(cost: 2001 SR 37,284,391; 2000 SR 39,013,998) 47,235,044 53,197,576
Loans receivable from members 1,084,005 1,431,859
Other receivable 244,475 740,167
Cash 6,530,758 5,543,500
---------- ----------
TOTAL ASSETS 55,094,282 60,913,102
LIABILITIES
Amounts due from employees 42,800 166,225
---------- ----------
NET ASSETS 55,051,482 60,746,877
========== ==========
The combined financial statements were approved March 31, 2002
Trustee: /s/FAHAD A. ABDULKARIM
Trustee: /s/MOHAMMED M. AL-GHAMDI
The accompanying notes form an integral part of these financial statements.
EMPLOYEE SAVINGS AND THRIFT PLANS - MODERN INDUSTRIES COMPANY
(JEDDAH), MODERN INDUSTRIES COMPANY (DAMMAM) AND MODERN
PRODUCTS COMPANY
COMBINED STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
(Expressed in Saudi Riyals)
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2001 2000
---- ----
ADDITIONS TO PLANS' NET ASSETS
Employee contributions:
Basic 2,637,659 2,808,388
Additional 2,440,765 3,247,339
Companies' contributions 1,828,344 1,905,551
Investment income:
Dividends 672,849 590,382
Bank commission 115,780 286,775
------------ -----------
ADDITIONS TO PLANS' NET ASSETS 7,695,397 8,838,435
DEDUCTIONS FROM PLANS' NET ASSETS
Withdrawals (9,157,676) (2,018,781)
------------ -----------
Change in plans' net assets (1,462,279) 6,819,654
Plans net assets at beginning of year 60,746,877 71,679,179
Unrealized (loss)/gain (4,233,116) (17,751,956)
------------ -----------
PLANS NET ASSETS AT END OF YEAR 55,051,482 60,746,877
============ ===========
The accompanying notes form an integral part of these financial statements.
EMPLOYEE SAVINGS AND THRIFT PLANS - MODERN INDUSTRIES COMPANY
(JEDDAH), MODERN INDUSTRIES COMPANY (DAMMAM) AND MODERN
PRODUCTS COMPANY
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
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1. PLANS DESCRIPTION AND RELATED MATTERS
The following brief description of the Employee Savings and Thrift
Plans for Modern Industries Company (Jeddah), Modern Industries Company
(Dammam) and Modern Products Company, which are centrally administered
as the Savings and Thrift Plans (Saudi Arabia) of The Procter & Gamble
Company, (the "Plans") is provided for general information purposes
only. Participants should refer to each plan agreement for more
complete information.
TRUSTEES
The Trustees of the Plans include the chairman of Modern Industries
Company (Jeddah), Modern Industries Company (Dammam) and Modern
Products Company (collectively the "Companies") and nominated managers
of the Companies.
ELIGIBILITY
Any permanent employee who has been on the payrolls of the Companies
for more than 12 months is eligible to participate in the Plans.
MEMBER'S ACCOUNTS
An Employee Account and a Company Account are maintained for each
member. The Employee Account includes a member's contributions,
decreased by all withdrawals and increased by all repayments of
withdrawals. The Company Account includes the total contributions made
by the Companies, which were credited to the member's account in
accordance with the terms of the Plans. Profits on bank deposits and
net dividends are credited to the Employee Account.
EMPLOYEE CONTRIBUTIONS
Basic deductions of 5% of base salary are contributed monthly by the
members. The member has the option to invest these contributions in one
of the following investment programs offered by the Plans:
* Invest the full amount to purchase Procter & Gamble securities.
* Invest the full amount in bank deposits.
* Invest 50% of the amount to purchase Procter & Gamble securities,
and 50% in bank deposits.
The numbers of participating employees under each of the aforementioned
programs at December 31, 2001 were 343,91 and 62 (2000 - 386,42 and
50), respectively.
Members may elect to contribute an additional 1% to 10% of their
monthly salary. These additional contributions are not matched by the
Companies and can only be invested in Procter & Gamble securities.
COMPANIES' CONTRIBUTIONS
The Companies credit each member with an amount ranging from 25% to
100% of the balance in the Employee Account, depending on the member's
length of continuous service, with the rate reaching 100% after ten
years of continuous service.
EARNINGS
Any occurrence of income from the net dividends earned and credits from
forfeitures are utilized to purchase more Procter & Gamble securities.
These earnings are allocated on a pro-rata basis to the existing
members based on the prior month-end balance of their Plans' assets.
Commission earned from bank deposits is allocated amongst the members
of the Plans in proportion to their investments in bank deposits.
VESTING
The members are fully vested in their Employee Accounts and Earnings
Accounts. Members become vested in the Companies' contributions by 30%
after the first three full years from the date of their membership in
the Plans, or renewed membership (see Withdrawals), with the rate
reaching 100% after ten full years of such membership.
WITHDRAWALS
Withdrawals may be made from the member's Employee Account at any time
he chooses to, up to the extent of his contributions, the vested
position of the Companies' Contributions and all relevant profits
thereon.
The non-vested portion of the Companies' Contributions and relevant
profits are placed in a frozen account that will continue to be vested
according to the schedule of investments. These are paid to the
employee on his separation from the Companies unless he meets the
criteria for forfeiture (see Forfeiture). The employee may rejoin the
Plans after a one-year waiting period from the first withdrawal and a
two-year waiting period for every subsequent withdrawal.
LOANS
An existing member who has at least five years of membership is
eligible to borrow from the Plans up to an amount that varies with the
member's monthly base salary and length of service. The maximum loan
amount cannot exceed 50% of the balance in the Employee's Account
(including gains on securities) or six months salary, whichever is
lesser. Repayment of the loan is made by monthly payroll deductions.
The member may elect to repay the outstanding loan in a lump sum at any
time.
FORFEITURES
When members leave the Plans without fulfilling ten years of membership
requirement for full vestment (see Vesting) for a reason other than
transfer out, death or disability, the non-vested Companies'
Contributions and relevant profits are forfeited. The forfeited amount
is divided amongst the existing members using the same formula as the
Companies' Contributions (see Companies Contributions).
TRANSFERABILITY
The Plans are 100% transferable between the Companies.
COSTS OF THE PLANS
All administrative costs of the Plans are paid by the Companies.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of combination
The combined financial statements include the financial statements
of all the Plans as stated in Note 1. All significant intercompany
transactions and balances have been eliminated in the combination.
b) Basis of accounting
The accompanying combined financial statements are prepared in
accordance with accounting principles generally accepted in the
United States of America. The net assets and transactions of the
Plans are recorded at fair value.
c) Investments
Investments in Procter & Gamble securities are valued at the
closing price on the New York Stock Exchange. Bank deposits are
stated at cost.
d) Bank commission
Bank commission represents commission earned on bank deposits.
e) Foreign currency translation
The Plans' primary currency is the Saudi Riyal. Non-Saudi Riyal
investments are translated into Saudi Riyals at the exchange rates
in effect on the last day of the Plans' year. Earnings on
currencies other than the Saudi Riyals are translated at average
rates prevailing during the year. Exchange gains or losses for
2001 and 2000 were not significant.
f) Taxes
Currently, there are no personal income taxes in Saudi Arabia.
Should they be introduced any time in the future, the Plans
require that such taxes be borne by the members.
Dividend payments on Procter & Gamble securities are received net
of deduction of withholding taxes by the United States'
Government.
EMPLOYEE SAVINGS AND THRIFT PLANS - MODERN INDUSTRIES COMPANY
(JEDDAH), MODERN INDUSTRIES COMPANY (DAMMAM) AND MODERN
PRODUCTS COMPANY
COMBINED SUPPLEMENTAL SCHEDULE - STATEMENTS OF INVESTMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
(Expressed in Saudi Riyals)
--------------------------------------------------------------------------------
2001 2000
-------------------------------------- ---------------------------------------
Number Number
of Market of Market
shares Cost value shares Cost value
------- ---------- ---------- ------- ---------- ----------
Procter & Gamble
securities 159,224 37,284,391 47,235,044 180,906 39,013,998 53,197,576
======= ========== ========== ======= ========== ==========
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 March 31, 2002.
Employee Savings and Thrift Plan (Saudi Arabia)
By: /s/FAHAD A. ABDULKARIM
----------------------------
Fahad A. Abdulkarim
By: /s/MOHAMMED M. AL-GHAMDI
-----------------------------
Mohammed M. Al-Ghamdi
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche