saudi.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 11-K/A
 
x
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009, OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM FOR THE TRANSITION PERIOD FROM __________ TO __________
 
Registration number:  333-51223, 333-40264 and 333-108992
 
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 Plans – Modern Industries Company (Dammam) and Modern Products Company (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.
  
The Trustees of the Employee Savings and Thrift Plans - Modern Industries Company (Dammam) and Modern Products Company (Saudi Arabia) (the "Plan") have been notified that the auditor of the Plan's financial statements included in the Plan's Form 11-K for the year ended December 31, 2009 (the "financial statements"), is not registered with the Public Company Accounting Oversight Board (“PCAOB”). Accordingly, the Plan is filing this Form 11-K/A to label the financial statements as unaudited and to remove the audit report from such filing. The Plan is in the process of having the financial statements re-audited by a PCAOB-registered public accounting firm and will file such re-audited financial statements with a Form 11-K/A when the re-audit is completed.
 
REQUIRED INFORMATION
 
The following unaudited financial statements are enclosed with this report:
 
1.  
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).
2.  
Statement of income and changes in plan equity for each of the latest three fiscal years (or such lesser period as the plan has been in existence).
  
SIGNATURE
 
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.
 
EMPLOYEE SAVINGS AND THRIFT PLANS –
                   MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY (SAUDI ARABIA)
 
Date: May 26, 2010             
 
                    By:     /s/ Al-Wazir                      
        Al-Wazir
        Trustee
                                      
 By:  /s/  Omar Al-Ghamdi              
         Omar Al-Ghamdi
         Trustee
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
EMPLOYEE SAVINGS AND THRIFT PLANS -
  MODERN INDUSTRIES COMPANY (DAMMAM)
  AND MODERN PRODUCTS COMPANY
 
UNAUDITED COMBINED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2009,
  2008 AND 2007
 
 
 
 
 
 
 
 
 

 
 
 
 
 



EMPLOYEE SAVINGS AND THRIFT PLANS -
  MODERN INDUSTRIES COMPANY (DAMMAM)
  AND MODERN PRODUCTS COMPANY
 
TABLE OF CONTENTS
 
 
 
PAGE
   
   
FINANCIAL STATEMENTS:
  
   
Unaudited Combined Statements of Net Assets Available for Plan Benefits
  as of December 31, 2009 and 2008
 
1
   
Unaudited Combined Statements of Changes in Net Assets Available for Plan Benefits
  for the Years Ended December 31, 2009, 2008 and 2007
 
2
   
Notes to Unaudited Combined Financial Statements for the Years Ended
  December 31, 2009, 2008 and 2007
 
3- 8
   

 
 
 
 



 
EMPLOYEE SAVINGS AND THRIFT PLANS -
  MODERN INDUSTRIES COMPANY (DAMMAM)
  AND MODERN PRODUCTS COMPANY
 
UNAUDITED COMBINED STATEMENTS OF NET ASSETS
  AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2009 AND 2008
(Expressed in Saudi Riyals)
 
 
   
Notes
  
2009
  
2008
  
          (unaudited)     (unaudited)  
 
ASSETS
            
               
 
Investments, at fair value:
            
 
Cash
    
4,741,806
  
4,225,277
  
 
The Procter & Gamble Company common stock
3a
  
36,340,736
  
34,406,377
  
 
The J.M. Smucker Company common stock
3b
  
50,316
  
36,121
  
               
 
      Total investments
    
41,132,858
  
38,667,775
  
               
 
Loans to participants
    
47,975
  
106,845
  
 
Other receivables
    
440,579
  
466,326
  
               
 
Total assets
    
41,621,412
  
39,240,946
  
               
 
LIABILITIES
            
               
 
Amounts due to employees
    
-
  
-
  
               
 
NET ASSETS AVAILABLE FOR PLAN BENEFITS
    
41,621,412
  
39,240,946
  
 
 
 
 
The combined financial statements were approved on February 24, 2010.
 
 
 
 
 
 
 
 

The accompanying notes form an integral part of these combined financial statements
 
-1-
 
 



EMPLOYEE SAVINGS AND THRIFT PLANS -
MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY
 
UNAUDITED COMBINED STATEMENTS OF CHANGES IN NET ASSETS
  AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Expressed in Saudi Riyals)
 
   
Notes
2009
  
2008
  
2007
  
        (unaudited)     (unaudited)     (unaudited)  
 
ADDITIONS
              
                 
 
Contributions:
              
 
  Employees contributions
  
3,986,538
  
3,967,772
  
3,531,859
  
 
  Companies contributions
  
1,351,734
  
1,360,188
  
1,374,198
  
                 
 
Total contributions
  
5,338,272
  
5,327,960
  
4,906,057
  
 
 
Investments (loss)/income:
              
                 
 
    Realized losses from investments
3
(405,390
)
(39,792
)
(18,681
)
 
    (Decrease)/increase in unrealized
      appreciation of investment
 
3
 
(692,833
 
)
 
(8,352,107
 
)
 
4,889,877
  
 
    Interest income
  
19,700
  
64,645
  
86,147
  
 
 Dividends from investments
  
655,870
  
693,293
  
609,207
  
                 
 
Total investment (loss)/income
  
(422,653
)
(7,633,961
)
5,566,550
  
                 
 
Total additions/(deletions)
  
4,915,619
  
(2,306,001
)
10,472,607
  
                 
 
DEDUCTIONS
              
                 
 
Distribution and withdrawals to participants
  at market value
  
 
(2,535,153
 
)
 
(5,082,925
 
)
 
(4,559,107
 
)
                 
 
NET INCREASE/(DECREASE)
  
2,380,466
  
(7,388,926
)
5,913,500
  
                 
 
NET ASSETS AVAILABLE FOR
  PLAN BENEFITS
              
                 
 
Beginning of year
  
39,240,946
  
46,629,872
  
40,716,372
  
                 
 
End of year
  
41,621,412
  
39,240,946
  
46,629,872
  
 

The accompanying notes form an integral part of these combined financial statements
 
-2-
 
 

EMPLOYEE SAVINGS AND THRIFT PLANS -
MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY
 
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Expressed in Saudi Riyals)
 
 
1.  
PLANS DESCRIPTION AND RELATED MATTERS
 
The following brief description of the Employee Savings and Thrift Plans for 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.
 
The Plans are not subject to any provisions of the United States Employee Retirement Income Security Act of 1974, nor are they qualified under the United States Internal Revenue Code Section 401(a).
 
Trustees
 
The Trustees of the Plans include the chairman of 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 The Procter & Gamble Company (“P&G”) securities.
·  
Invest the full amount in bank deposits.
·  
Invest 50% of the amount to purchase P&G securities, and 50% in bank deposits.
The numbers of participating employees under each of the aforementioned programs at December 31, 2009 were 257, 75 and 9 (2008: 255, 75 and 12; 2007: 195, 42 and 61), 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 P&G securities.

 
-3-
 
 

EMPLOYEE SAVINGS AND THRIFT PLANS -
MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY
 
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Expressed in Saudi Riyals)
 
Companies’ contributions
 
The Companies credit each member with an amount ranging from 25% to 100% of the amount contributed by the employee, 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 P&G securities. These earnings are allocated on a pro-rata basis to the existing members based on the prior month-end balance of the Member’s accounts.
 
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 portion 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 vesting schedule. These are paid to the employee on his separation from the Companies unless he meets the criteria for forfeiture (see Forfeitures). 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 less. 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 the requirement for full vesting (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).

 
-4-
 
 


EMPLOYEE SAVINGS AND THRIFT PLANS -
MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY
 
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Expressed in Saudi Riyals)
 
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
 
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.
 
Basis of accounting
 
The accompanying combined 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
 
The Plans invest in P&G securities.  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 P&G securities, it is reasonably possible that changes in the value of P&G securities will occur in the near term and those changes could materially affect the amount reported in the statements of net assets available for plan benefits.
 
Valuation of investments
 
Investments in P&G and J.M. Smucker Company securities are valued at the closing price on the New York Stock Exchange.  Bank deposits are stated at cost. Loans to participants are valued at amortized cost which approximates fair value.
 
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
 
Interest income
 
Interest income represents interest earned on bank deposits.


 
-5-
 
 


EMPLOYEE SAVINGS AND THRIFT PLANS -
MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY
 
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Expressed in Saudi Riyals)
 
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 in foreign currencies other than the Saudi Riyals are translated at average rates prevailing during the year. Exchange gains or losses for 2009, 2008 and 2007 were not significant.
 
Subsequent events
 
For the year ended December 31, 2009, the Plans have evaluated subsequent events for potential recognition and disclosure through February 24, 2010, the date the financial statements were available for issuance.
 
3.  
INVESTMENTS
 
The investments held by the Plan as of December 31, 2009, 2008 and 2007, and the unrealized appreciation for the years ended December 31, 2009, 2008 and 2007 were as follows:
 
   
2009
  
2008
  
2007
  
               
 
a) Procter and Gamble Company Common Stock
            
               
 
     Number of shares
160,978
  
149,455
  
154,090
  
               
 
     Market value
36,340,736
  
34,406,377
  
42,211,097
  
 
     Cost
(27,607,337
)
(24,965,276
)
(24,429,136
)
               
 
     Unrealized appreciation
8,733,399
  
9,441,101
  
17,781,961
  
               
 
    (Decrease)/increase in unrealized appreciation
(707,702
)
(8,340,860
)
4,892,665
  
               
 
b) J. M. Smucker Company
            
               
 
    Number of shares
219
  
224
  
301
  
               
 
    Market value
50,316
  
36,121
  
57,743
  
 
    Cost
(29,508
)
(30,182
)
(40,557
)
               
 
    Unrealized appreciation
20,808
  
5,939
  
17,186
  
               
 
    Increase/(decrease) in unrealized appreciation
14,869
  
(11,247
)
(2,788
)
               
               
 
    (Decrease)/increase in unrealized
      appreciation of investment
 
(692,833
 
)
 
(8,352,107
 
)
 
4,889,877
  

 
-6-
 
 

EMPLOYEE SAVINGS AND THRIFT PLANS -
MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY
 
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Expressed in Saudi Riyals)
 
The realized gain on sales of Company common stock for the years ended December 31, 2009, 2008, and 2007, was determined as follows:
 
   
2009
  
2008
  
2007
  
               
 
Proceeds on sales of shares
2,295,209
  
4,597,144
  
5,527,754
  
 
Cost
(2,700,599
)
(4,636,936
)
(5,546,435
)
               
 
Realized losses
(405,390
)
(39,792
)
(18,681
)
 
4.  
FAIR VALUE MEASUREMENTS
 
In accordance with FASB Accounting Standards Codification 820, the Plans classify their investments into Level I, 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 and liabilities 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 fair value hierarchy a summary of the Plans’ investments measured at fair value on a recurring basis at December 31, 2009 and 2008.
 
   
Fair Value Measurements as of December 31, 2009, Using
  
   
Quoted prices in active markets for identical assets (Level 1)
  
Significant
other observable
inputs
(Level 2)
  
Significant
unobservable
inputs
(Level 3)
  
 
 
 
Total
  
                   
 
Procter and Gamble Company
  Common Stock
 
36,340,736
  
 
-
  
 
-
  
 
36,340,736
  
 
J.M. Smucker Company
  Common Stock
 
50,316
  
 
-
  
 
-
  
 
50,316
  
 
Participant Loan
-
  
47,975
      
47,975
  
                   
 
Total
36,391,052
  
47,975
  
-
  
36,439,027
  
 
 
   
Fair Value Measurements as of December 31, 2008, Using
  
   
Quoted prices in active markets for identical assets (Level 1)
  
Significant
other observable
inputs
(Level 2)
  
Significant
unobservable
inputs
(Level 3)
  
 
 
 
Total
  
                   
 
Procter and Gamble Company
  Common Stock
 
34,406,377
  
 
-
  
 
-
  
 
34,406,377
  
 
J.M. Smucker Company
  Common Stock
 
36,121
  
 
-
  
 
-
  
 
36,121
  
 
Participant Loan
-
  
106,845
      
106,845
  
                   
 
Total
34,442,498
  
106,845
  
-
  
34,549,343
  

 
-7-
 
 


EMPLOYEE SAVINGS AND THRIFT PLANS -
MODERN INDUSTRIES COMPANY (DAMMAM)
AND MODERN PRODUCTS COMPANY
 
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Expressed in Saudi Riyals)
 
5.  
RELATED-PARTY TRANSACTIONS
 
At December 31, 2009 and 2008, the Plan held 160,978 and 149,455 shares, respectively, of common stock of The Procter & Gamble Company, an affiliate, with a cost basis of SR 27,607,337 and SR 24,965,276, respectively. During the years ended December 31, 2009, 2008, and 2007, the Companies contributed SR 1,351,734, SR 1,360,188, and SR 1,374,198, respectively, to the Plan on behalf of participating employees.
 
During the years ended December 31, 2009, 2008, and 2007, the Plan recorded dividend income from these common stock of SR 655,870, SR 693,293, and SR 609,207, respectively.
 
6.  
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 P&G securities are received net of deduction for withholding taxes by the Government of the United States of America.
 
7.  
THE J.M. SMUCKER COMPANY COMMON STOCK
 
In May of 2002, the Jif peanut butter and Crisco shortening brands were spun-off to P&G shareholders and subsequently merged into The J.M. Smucker Company (“Smucker”).  As a result of the spin-off, participants holding P&G common stock received one share of Smucker stock for every fifty shares of P&G stock.  The cost basis of the P&G common stock prior to the Smucker spin-off was allocated between P&G common stock held and the Smucker common stock received.  Participants are not permitted to purchase additional shares of Smucker.

 
-8-