| |
Japanese Yen
|
U.S. Dollars
|
| |
2010
|
|
2009
|
|
2008
|
2010
|
|
ADDITIONS:
|
|
|
|
|
|
|
|
Investment income (loss):
|
|
|
|
|
|
|
|
Net appreciation (depreciation) in fair value of investments
|
¥1,441,219,813
|
|
(¥2,543,667,135)
|
|
(¥1,723,112,649)
|
$ 16,266,589
|
|
Foreign exchange loss
|
(820,190,154)
|
|
-
|
|
-
|
(9,257,225)
|
|
Dividend income
|
228,059,372
|
|
210,816,702
|
|
196,550,169
|
2,574,034
|
|
Total investment income (loss)
|
849,089,031
|
|
(2,332,850,433)
|
|
(1,526,562,480)
|
9,583,398
|
| |
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
|
|
|
Employer contributions - P&G Far East, Inc. and Max Factor K.K.
|
238,664,400
|
|
252,142,800
|
|
256,105,400
|
2,693,729
|
|
Participant contributions
|
1,236,243,000
|
|
1,340,208,893
|
|
1,380,593,000
|
13,953,081
|
|
Total contributions
|
1,474,907,400
|
|
1,592,351,693
|
|
1,636,698,400
|
16,646,810
|
|
Total additions
|
2,323,996,431
|
|
(740,498,740)
|
|
110,135,920
|
26,230,208
|
| |
|
|
|
|
|
|
|
DEDUCTIONS:
|
|
|
|
|
|
|
|
Distributions and withdrawals to participants
|
(1,293,120,386)
|
|
(1,236,647,651)
|
|
(1,392,793,546)
|
(14,595,038)
|
|
Bank and administrative charges
|
(3,153,150)
|
|
(3,288,075)
|
|
(3,348,450)
|
(35,590)
|
|
Total deductions
|
(1,296,273,536)
|
|
(1,239,935,726)
|
|
(1,396,141,996)
|
(14,630,628)
|
| |
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR BENEFITS
|
1,027,722,895
|
|
(1,980,434,466)
|
|
(1,286,006,076)
|
11,599,580
|
| |
|
|
|
|
|
|
|
NET ASSETS AVAILABLE FOR BENEFITS:
|
|
|
|
|
|
|
|
Beginning of year
|
8,293,785,722
|
|
10,274,220,188
|
|
11,560,226,264
|
93,609,320
|
|
End of year
|
¥9,321,508,617
|
|
¥ 8,293,785,722
|
|
¥10,274,220,188
|
$105,208,900
|
See Notes to Financial Statements.
EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2010 AND 2009, AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 2010
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|
1.
|
DESCRIPTION OF THE PLAN
|
The following brief description of the Employee Stock Purchase Plan (Japan) (the "Plan") is provided for general information purposes only. Participants should refer to the Plan agreement for more information on the Plan.
General
Prior to April 1, 2001, the Plan included the Employee’s Shareholding Association of Procter & Gamble Far East, Inc., Japan Branch, established May 1986, and the Employee's Shareholding Association of Max Factor K.K., established January 1994, for employees and executives of Procter & Gamble Far East, Inc. and Max Factor K.K. (collectively the "Companies") as a union under the provisions of Article 667 paragraph 1 of the Japanese Civil Law.
Effective April 1, 2001, the Employee's Shareholding Association of Max Factor K.K. was merged with the Employees’ Shareholding Association of Procter & Gamble Far East, Inc., Japan Branch, to create the Employee's Shareholding Association of P&G Group for employees and executives of all P&G affiliates in Japan.
The purpose of the Plan is to contribute to the formation of assets by its participants by facilitating their acquisition of the common stock of The Procter & Gamble Company (the "Stock"), the Companies' parent company. The Plan is administered by IBM Business Services (IBM) as subcontractor for employee services. Daiwa Securities SMBC Co., Ltd. serves as recordkeeper for the Plan.
Contributions
Participants may contribute a portion of their base pay in units of 1,000 yen, up to 100 units monthly, and three times the monthly base pay contributions limit from bonus pay. The Companies match 20% of participants’ contributions up to 30 units monthly (90 units of bonus pay contributions). Effective January 1, 2005, General Office employees may contribute a portion of their base pay up to 150 units monthly and the Companies match 20% of those employees’ contributions up to 45 units. All contributions are invested in Stock.
Participant Accounts
Individual accounts are maintained for each Plan participant. Each participant’s account is credited with the participant’s contribution and allocations of (a) the Companies’ contributions and (b) realized earnings or losses of the Plan. Allocations are based on participant earnings or account balances, as defined by the Plan. The benefit to which a participant is entitled to is the benefit that can be provided from the participant's vested account.
Investments
Participants are only permitted to invest in Stock. Any dividends on shares of Stock are invested to additional shares of Stock.
Vesting
Participants are immediately vested in their contributions, the Companies' matching contributions and realized earnings.
Withdrawal
Participants may withdraw the allotted shares of Stock in multiples of 100 shares at any time. In the event that participants withdraw from the Plan on termination of service or by their request, the allotted shares of Stock in multiples of one share plus cash at the amount of the residual share at fair value shall be returned to them.
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2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits, and changes therein. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan invests in Stock. 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 Stock, it is reasonably possible that changes in the value of Stock will occur in the near term and that such changes could materially affect the amount reported in the financial statement.
Cash
Amounts shown as cash are uninvested funds held by the Plan that are to be invested in Stock the following month.
Investment Valuation
The Plan’s investments are carried at fair value. Information on fair value measurements are disclosed in Note 3.
Investment Income Recognition
Dividend and interest income from investments are recognized when earned and are allocated to each participant’s account by the Plan’s recordkeeper.
Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date.
Foreign Exchange Transactions and Translations
Contributions to the Plan are denominated in Japanese Yen, however, purchase and sale of Stock are measured in U.S. Dollars resulting in changes in exchange rate being reported in income.
Expenses of the Plan
Investment management expenses are paid by the Companies.
Adoption of New Accounting Guidance
The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) became effective on July 1, 2009. At that date, the ASC became the single authoritative source of nongovernmental GAAP. The ASC supersedes all previous authoritative GAAP applicable to the Plan.
In 2009, FASB Staff Position 157-4, Disclosures Determining Fair Value When the Volume and Level of Activity for the Assets or Liability Have Significantly Decreased and Identifying Transactions that are not Orderly, was issued and later codified into ASC 820 which expanded disclosures and required that major categories for debt and equity securities in the fair value hierarchy table be determined on the basis of nature and risk of the investments.
The financial statements of the Plan are not affected of the adoption of FASB Staff Position 157-4.
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosure (Topic 820): Improving Disclosures about Fair Value Measurements, aimed at improving disclosures about fair value measurements. The standard requires entities to disclose additional information regarding assets and liabilities that are transferred between levels of the fair value hierarchy and to present information about purchases, sales, issuances and settlements on a gross basis in the reconciliation of fair value measurements using significant unobservable inputs (“Level 3 reconciliation”). Additionally, the standard clarified existing guidance regarding the level of disaggregation of fair value measurements and disclosures regarding the valuation techniques and inputs utilized in estimating Level 2 and Level 3 fair value measurements. This guidance is effective January 1, 2010, except for the disclosures regarding purchases, sales, issuances and settlements in the Level 3 reconciliation, which will be effective on January 1, 2011.
The future adoption of this standard will not have an impact on the Plan’s financial statements since the common stock of The Procter and Gamble Company are valued at quoted market price, which is Level 1 input, as disclosed in Note 3.
In May 2009, the FASB issued new accounting guidance on subsequent events. The objective of this guidance is to establish general standards of accounting for, and disclosure of, events that occur after the reporting date but before financial statements are issued or are available to be issued. This new accounting guidance was adopted as of June 30, 2009, when it became effective.
The adoption of this new guidance has no material impact on the accompanying financial statements of the Plan.
Subsequent Events
The Plan adopted ASC 855, Subsequent Events, which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the financial statements are issued or available to be issued if not widely distributed.
The Plan Management believes that there are no events happened after June 30, 2010 that warrants disclosures in the notes to the financial statements.
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6.
|
RELATED PARTY TRANSACTIONS
|
At June 30, 2010 and 2009, the Plan held 1,756,389 and 1,690,444 shares, respectively, of common stock of The Procter & Gamble Company, the sponsoring employer, with a cost basis of ¥9.8 billion (USD 111 million) and ¥9.5 billion (USD 99 million), respectively. For the years ended June 30, 2010, 2009 and 2008, the Plan recorded dividend income of ¥228,059,372, ¥210,816,702, and ¥196,550,169, respectively.
Although it has not expressed any intent to do so, the Companies have the right under the Plan to discontinue their contributions at any time and to terminate the Plan subject to the provisions set forth in the Plan agreement.
U.S. Dollar amounts presented in these financial statements are included solely for the convenience of the reader. These translations should not be construed as representations that the Japanese Yen amounts have been, could have been or could in the future be, converted into U.S. Dollars. As the amounts shown in U.S. Dollars are for convenience only, the rate of ¥88.60 = US$1, the approximate current rate at June 30, 2010, has been used for the purpose of presentation of the U.S. Dollar amounts in the accompanying statements of net assets available for plan benefits and changes in net assets available for plan benefits.
THE PLAN. Pursuant to the requirements of the Securities Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused the Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, on September 27, 2010.
EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
By: P&G GROUP EMPLOYEE’S SHAREHOLDING ASSOCIATION
By: /s/ Megumi Ohta
Megumi Ohta
Chairman
EXHIBIT INDEX
Exhibit No. Page Number
23 Consent of Manabat Delgado Amper & Co 10
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements No. 333-51221, 333-47132, 333-108993 and 333-155046 of The Procter & Gamble Company on Form S-8 of our report dated September 14, 2010 appearing in this Annual Report on Form 11-K of the Employee Stock Purchase Plan (Japan) for the year ended June 30, 2010.
/s/ Manabat Delgado Amper & Co.
Manabat Delgado Amper & Co.
Makati City, Philippines
September 28, 2010