5.
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FEDERAL INCOME TAX STATUS
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The Plan is not qualified under Section 401(a) of the Internal Revenue Code and is exempt from the provisions of Title I of ERISA pursuant to Section 4(b) (4) thereof. The Company believes that the fiduciary should be viewed as a directed custodian and that, for U.S. tax purposes, the participating employees should be treated as the owners of the shares of the Company's common stock held for their account under the Plan.
GAAP requires plan administrators to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS or the Department of Labor. The Plan administrators have analyzed the tax positions taken by the Plan, and have concluded that as of June 30, 2017 and 2016, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the financial statements. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan administrators believe it is no longer subject to income tax examinations for years prior to 2013.
HM Revenue & Customs (HMRC) 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, 2017 and no provision for income taxes has been reflected in the accompanying financial statements.
6.
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PARTICIPATING PROCTER & GAMBLE COMPANIES
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The participating Procter & Gamble companies are as follows:
Procter & Gamble Product Supply (U.K.) Limited
Procter & Gamble Technical Centres Limited
Procter & Gamble (L&CP) Limited
Procter & Gamble (Health & Beauty Care) Limited
Gillette U.K. Limited
Gillette Management, LLC
Procter & Gamble UK Group Holdings Limited
7.
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RELATED PARTY TRANSACTIONS
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At June 30, 2017 and 2016, 784,705 and 1,066,748 shares of Company common stock were held by the Plan respectively. The cost of this stock at June 30, 2017 and 2016 was £34,491,056 and £43,004,657 respectively.
During the years ended June 30, 2017, 2016 and 2015, the Plan recorded dividend income from Company common stock of £1,515,411, £1,634,841 and £1,542,344 respectively.
Contributions from participating Procter & Gamble companies of £3,225,454, £3,680,413 and £3,481,559 were recorded for the years ended June 30, 2017, 2016 and 2015, respectively. Amounts payable to participating Procter & Gamble companies of £5,743, £5,492 and £6,875 were recorded at June 30, 2017, 2016 and 2015 respectively.
Also, the Plan received reimbursements for administrative expenses from the participating Procter & Gamble companies for the years ended June 30, 2017, 2016 and 2015 of £22,378, £32,695 and £56,627 respectively.