PROCTER & GAMBLE Co — Annual Report 2007

Sep 28, 2007

11-K 1 l27884ae11vk.htm PROCTER & GAMBLE 11-K Procter & Gamble 11-K PAGEBREAK

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 11-K

þ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2007, OR

o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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: Procter &
Gamble 1-4-1 Plan, Procter & Gamble Technical Centres Limited,
Cobalt 12, Silver Fox Way, Cobalt Business Park, Newcastle upon
Tyne NE27 0QW. |
| --- | --- |
| 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 statements 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 statements 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)

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| PROCTER & GAMBLE 1-4-1 PLAN |
| --- |
| Statements of Net Assets Available for Benefits as of June 30, 2007 and
2006, Statements of Changes in Net Assets Available for Benefits for the Years
Ended June 30, 2007, 2006 and 2005, and Report of Independent Registered Public
Accounting Firm |

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TABLE OF CONTENTS

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of June 30, 2007 and 2006	2
Statements of Changes in Net Assets Available for Benefits for the Years Ended June 30, 2007, 2006
and 2005	3
Notes to Financial Statements for the Years Ended June 30, 2007, 2006 and 2005	4

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees of the Procter & Gamble 1-4-1 Plan:

We have audited the accompanying statements of net assets available for benefits of the Procter & Gamble 1-4-1 Plan (“the Plan”) as of June 30, 2007 and 2006, and the related statements of changes in net assets available for benefits for the years ended June 30, 2007, 2006 and 2005. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the plan’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of June 30, 2007 and 2006 and the changes in net assets available for benefits for the years ended June 30, 2007, 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP Newcastle upon Tyne, United Kingdom

24 September 2007

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PROCTER & GAMBLE 1-4-1 PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS JUNE, 30 2007 AND 2006

£		£
ASSETS:
Investment in The Procter & Gamble Company common
stock, at fair value	25,314,487		20,110,074
Cash at bank and in hand	928,354		670,751
Due from the participating Procter & Gamble companies	—		506
Total assets	26,242,841		20,781,331
LIABILITIES:
Amounts due to others	(43,210	)	(18,370	)
Contributions received in advance	(749,133	)	(593,050	)
Total liabilities	(792,343	)	(611,420	)
NET ASSETS AVAILABLE FOR BENEFITS	25,450,498		20,169,911

See notes to financial statements.

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PROCTER & GAMBLE 1-4-1 PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED JUNE 30, 2007, 2006 AND 2005

£		£		£
ADDITIONS (LOSSES):
Investment income:
Net appreciation (depreciation) in fair value of
The Procter & Gamble Company common stock	(32,553	)	114,080		(317,179	)
The Procter & Gamble Company dividends received	396,123		303,506		187,410
Total investment gain (loss)	363,570		417,586		(129,769	)
Contributions:
Contributions from participating Procter &
Gamble
companies	3,232,155		3,040,651		2,985,398
Contributions from participants	3,232,155		3,040,651		2,985,398
Total contributions	6,464,310		6,081,302		5,970,796
Income from The Procter & Gamble Company	18,365		20,858		19,013
Total additions	6,846,245		6,519,746		5,860,040
DEDUCTIONS:
Distributions and withdrawals to participants	(1,547,293	)	(1,187,616	)	(686,232	)
Administrative expenses	(18,365	)	(20,858	)	(19,013	)
Total deductions	(1,565,658	)	(1,208,474	)	(705,245	)
NET INCREASE	5,280,587		5,311,272		5,154,795
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year	20,169,911		14,858,639		9,703,844
End of year	25,450,498		20,169,911		14,858,639

See notes to financial statements.

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PROCTER & GAMBLE 1-4-1 PLAN

NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2007, 2006 AND 2005

| 1. |
| --- |
| The following brief description of the Procter & Gamble 1-4-1 Plan (“Plan”) is provided for
general information purposes only. Participants should refer to the Plan agreement for more
complete information. |
| General — The Plan is a share purchase plan established on October 1, 2002 by The Procter &
Gamble Company (“Company”), replacing the Procter & Gamble Matched Savings Share Purchase Plan,
which ceased to be tax efficient from this date, to provide a means for eligible UK employees
to tax efficiently purchase shares in the Company. The Plan is administered by Capita IRG
Trustees Limited who were appointed by the Trustees of the Plan and hold the Plan assets on
behalf of the Trustees of the Plan. |
| Contributions — Employees can contribute up to 2.5% of their salary/wage, subject to a minimum
monthly contribution of £10. The participating Procter & Gamble companies (see note 8) match
all contributions by employees in full. |
| Contributory shares — Represent shares purchased using the employee’s own contributions. |
| Matching shares — Represent shares purchased using matched contributions. |
| Dividend shares — Represent shares purchased using dividend income related to the employee’s
shares. |
| Participant Accounts — Individual accounts are maintained for each Plan participant. Each
participant’s account is credited with the participant’s contribution, the participating
Procter & Gamble company’s matching contribution, and allocations of Plan earnings, and charged
with withdrawals and an allocation of Plan losses. Allocations are based on participant
earnings or account balances, as defined. The distribution to which a participant is entitled
is limited to the shares that can be provided from the participant’s account. |
| Vesting — Participants are vested immediately in all shares allocated to their account. |
| Investments — Participants are only permitted to invest in Company common stock. Any dividends
on shares of Company common stock are invested in additional shares of Company common stock. |
| Participant Loans — Under the terms of the Plan agreement, participants are not permitted to
borrow funds from their account balance. |
| Distributions and Withdrawals — Participants may withdraw contributory shares from the Plan at
any time; however, participants who withdraw contributory shares from the Plan within five
years of acquisition will become liable for UK income tax and national insurance. Participants
cannot withdraw matching shares from the Plan within 5 years of purchase, and cannot withdraw
dividend shares from the Plan within 3 years of purchase, unless the participant ceases to be an employee of the
participating Procter & Gamble companies. |

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PROCTER & GAMBLE 1-4-1 PLAN

2.	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 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. The Plan invests in
Company common 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
certain investment securities, it is reasonably possible that changes in values of investment
securities will occur in the near term and that such changes could materially affect the
amounts reported in the financial statements.
	Investment Valuation and Income Recognition — The Plan’s investment in Company common stock is
stated at fair value, which is based on quoted market prices and is translated into sterling at
the rate of exchange at June 30. Purchases and sales of securities are recorded on a trade date
basis. Dividends are recorded on the ex-dividend date.
	Cash at Bank and In Hand — Amounts shown as cash at bank and in hand are uninvested funds held
that are to be invested in Company common stock in the following month.
	Expenses of the Plan — Investment management expenses and all other fees and expenses are paid
by the participating Procter & Gamble companies (see Note 8).
	Distributions and Withdrawals (Amounts due to others) — Distributions and withdrawals to
participants are recorded upon distribution. Amounts allocated to accounts of persons who have
elected to withdraw from the Plan but have not yet been paid were £40,982 and £18,370 at June
30, 2007 and 2006, respectively.
3.	INVESTMENTS
	The Plan’s investment in Company common stock experienced net
appreciation (depreciation) in value as follows for the years ended
June 30, 2007, 2006, and 2005:

£		£	£
The Procter & Gamble Company common stock:
Unrealized appreciation
(depreciation)	(32,553	)	114,080	(317,179	)

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PROCTER & GAMBLE 1-4-1 PLAN

1. AMOUNTS DUE TO OTHERS

£	£
Amounts due to members	40,982	18,370
Amounts due to participating Procter & Gamble companies	1,129	—
Amounts due to Capita IRG Trustees Limited	1,099	—
	43,210	18,370

5.	TAX STATUS
	The Inland Revenue (IR) has determined and informed the Company that it is an approved Employee
Share Scheme under UK tax legislation. Therefore, the Plan Administrator believes that the
Plan was qualified and tax-exempt as of June 30, 2007 and no provision for income taxes has
been reflected in the accompanying financial statements.
6.	RELATED PARTY TRANSACTIONS
	At June 30, 2007 and 2006, 830,757 and 669,311 shares of Company common stock were held by the
Plan, respectively. The cost of this stock at June 30, 2007 and 2006, was £24,874,896 and
£19,638,707, respectively.During the years ended June 30, 2007, 2006 and 2005, the Plan
recorded dividend income from Company common stock of £396,123, £303,506, and £187,410,
respectively. Contributions from participating Procter & Gamble companies of £3,232,155,
£3,040,651, and £2,985,398 were recorded for the years ended June 30, 2007, 2006 and 2005,
respectively. Also, the Plan received reimbursements for adminstrative expenses from the
Company titled Income From The Procter & Gamble Company in the Statements of Changes in Net
Assets Available For Benefits for the years ended June 30, 2007, 2006 and 2005 of £18,365,
£20,858, and £19,013, respectively.
7.	PLAN TERMINATION
	Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions set forth in the Plan
agreement.
8.	PARTICIPATING PROCTER & GAMBLE COMPANIES
	The participating Procter & Gamble companies are as follows:
	Procter & Gamble Pharmaceuticals UK Limited Procter & Gamble Prestige UK Limited Procter & Gamble Product Supply (UK) Limited Procter & Gamble Technical Centres Limited Procter & Gamble (L&CP) Limited Procter & Gamble (Health & Beauty Care) Limited Gillette UK Limited Gillette European Services Centre Limited Gillette Management LLC Gillette Central Services Limited

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SIGNATURE

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, thereunto duly authorized, in the City of Newcastle upon Tyne United Kingdom, on September 24, 2007.

PROCTER & GAMBLE 1-4-1 PLAN
By:	/s/ SUSAN CARVER
	Ms. Susan Carver
	Trustee, Procter & Gamble 1-4-1 Plan

EXHIBIT INDEX

Exhibit No.
23	Consent of Deloitte & Touche LLP

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