1.  We have audited the attached Balance Sheet of GlaxoSmithKline
 Consumer Healthcare Limited (the Company) as at December 31, 2010,
 and the related Profit and Loss Account and Cash Flow Statement for the
 year ended on that date annexed thereto, which we have signed under
 reference to this report. These financial statements are the
 responsibility of the Companys Management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. 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.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the Order), issued by the Central Government of India in
 terms of sub- section (4A) of Section 227 of The Companies Act, 1956
 of India (the Act) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) We have obtained all the information and explanations which, to the
 best of our knowledge and belief, were necessary for the purposes of
 our audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of Section 211 of the Act;
 
 (e) On the basis of the written representations received from the
 directors, and taken on record by the Board of Directors, none of the
 directors is disqualified as on December 31, 2010 from being appointed
 as a director in terms of clause (g) of sub-section (1) of section 274
 of the Companies Act, 1956;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required by the Act, and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 company as at December 31, 2010; 
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to Auditors Report Referred to in paragraph 3 of the
 Auditors Report of even date to the members of GlaxoSmithKline
 Consumer Healthcare Limited on the financial statements for the year
 ended December 31, 2010.
 
 1.  (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed
 assets.
 
 (b) The fixed assets are physically verified by the Management
 according to a phased programme designed to cover all the items over a
 period of 3 years which, in our opinion, is reasonable having regard to
 the size of the Company and the nature of its assets. Pursuant to the
 programme, a portion of the fixed assets has been physically verified
 by the Management during the year and no material discrepancies between
 the book records and the physical inventory have been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 2.  (a) The inventory (excluding certain stocks with third parties) has
 been physically verified by the Management during the year. In respect
 of inventory lying with third parties, these have substantially been
 confirmed by them. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the Management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  (a) The Company has not granted any loans, secured or unsecured, to
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.  (b) The Company has not taken any loans,
 secured or unsecured, from companies, firms or other parties covered in
 the register maintained under Section 301 of the Act.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 do not exist for obtaining comparative quotations, there is an adequate
 internal control system commensurate with the size of the Company and
 the nature of its business for the purchase of inventory, fixed assets
 and for the sale of goods and services. Further, on the basis of our
 examination of the books and records of the Company, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system.
 
 5.  (a) According to the information and explanations given to us,
 there have been no contracts or arrangements referred to in Section 301
 of the Act during the year to be entered in the register required to be
 maintained under that Section. Accordingly, the question of commenting
 on transactions made in pursuance of such contracts or arrangements
 does not arise.  (b) In our opinion and according to the information
 and explanations given to us, there are no transactions made in
 pursuance of such contracts or arrangements and exceeding the value of
 Rupees Five Lakhs in respect of any party during the year, which have
 been made at prices which are not reasonable having regard to the
 prevailing market prices at the relevant time.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act, and are of the opinion that prima facie, the prescribed accounts
 and records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 9.  (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing the undisputed statutory dues including
 provident fund, investor education and protection fund, employees
 state insurance, income-tax, sales-tax, wealth tax, service tax,
 customs duty, excise duty, cess and other material statutory dues as
 applicable with the appropriate authorities.  (b) According to the
 information and explanations given to us and the records of the Company
 examined by us, the particulars of dues of income-tax, sales-tax,
 wealth-tax, service-tax, customs duty, excise duty and cess as at
 December 31, 2010 which have not been deposited on account of a dispute
 are as follows:
 
 Name of the              Nature of dues             Amount
 Statute                                            (Rs. Lacs)
                                                        #
 
 EXCISE DUTY
 
 The Central Excise 
 Act 1944              Excise duty on clearance       19,49.39
                       from excise exempt zone
 
 The Central Excise 
 Act 1944              Valuation cases and other
                       matters                         1,48.55
 
 The Central Excise 
 Act 1944              Valuation cases and other 
                        matters                           0.49
 
 The Central Excise 
 Act 1944              Valuation cases, refund
                       of duty                        48,58.68
                       and other matters
 
 Sub Total (A)                                        69,57.11
 
 SERVICE TAX
 
 The Finance Act, 
 1944                 Maintenance of records             53.98
                      for common inputs
 
 Sub Total (B)                                           53.98
 
 
 Name of the                 Period to      Forum where the dispute is
 Statue                      which the        pending
                             amount
                             relates
 
 EXCISE DUTY
 
 The Central Excise 
 Act 1944                  2008-2010     Himachal Pradesh, High Court
 
 The Central Excise 
 Act 1944                  1983-2003     Custom Excise Service Tax
                                         Appellate Tribunal, 
                                         various states
 
 The Central Excise 
 Act 1944                  1991          Commissioner of Central Excise
                                         (Appeal), Chennai
 
 The Central Excise 
 Act 1944                  1995-2007     Commissioner/Additional/Deputy/
                                         Assistant Commissioner of
                                         Central Excise, Various States
 
 Sub Total (A)
 
 
 SERVICE TAX
 
 The Finance Act, 1944    2005-2008     Customs Excise Service Tax
                                        Appellate Tribunal Bangalore
 
 Sub Total (B)
 
 
 
 Name of the              Nature of dues             Amount
 Statute                                            (Rs. Lacs)
                                                        #
 SALES TAX
 
 As per the statute     Turnover Tax on milk and      4,53.50
 applicable in the
  state                 additions on account of
 of Tamil Nadu &        concessional rates of
 Andhra Pradesh         tax
 
 As per the statute 
 applicable             Additions on account of         97.15
 in the state of 
 Chhattisgarh,          freebies and other
 Uttar Pradesh, 
 West Bengal            disallowances
 and Orissa
 
 As per the statue 
 applicable             Miscellaneous Demands           81.76
 to Orissa, Assam. West
 Bengal, Madhya Pradesh,
 Maharashtra, Chhattisgarh
 and Kerala
 
 As per the statue 
 applicable             Miscellaneous Demands           85.86
 to Punjab, Delhi, 
 Rajasthan, Uttar
 Pradesh, Goa, West
 Bengal, Bihar and Assam
 
 Sub Total (C)                                        7,18.27
 
 INCOME TAX
 
 The Income Tax 
 Act, 1961              Additions to Income Tax      53,45.06
 
 Sub Total (D)                                       53,45.06
 
 Grand Total (A+B+C+D)                             1,30,74.42
 
 
 
 Name of the               Period to       Forum where the dispute is
 Statue                    which the       pending
                           amount
                           relates
 
 SALES TAX
 
 As per the statute
 applicable in the state
 of Tamil Nadu &
 Andhra Pradesh           1990-2007     At High Courts of Andhra Pradesh
                                        and Tamil Nadu
 
 As per the statute applicable
 in the state of Chhattisgarh,
 Uttar Pradesh, West Bengal
 and Orissa               1983-2005     Sales Tax Appellate Tribunal/
                                        Revenue Board
 
 As per the statue applicable
 to Orissa, Assam. West
 Bengal, Madhya Pradesh,
 Maharashtra, Chhattisgarh
 and Kerala               1999-2008     First Appellate Authorities at
                                        various levels
 
 As per the statue applicable
 to Punjab, Delhi, Rajasthan,
 Uttar Pradesh, Goa, West
 Bengal, Bihar and Assam  1999-2007     Adjudication Level
 
 Sub Total (C)
 
 INCOME TAX
 
 The Income Tax Act, 1961   2006-07     Income Tax Appellate Tribunal
 
 Sub Total (D)
 
 Grand Total (A+B+C+D)
 
 
 # Includes interest and penalty amounts as specified in the demand
 order.
 
 The above details exclude appeals made by the Department to higher
 appellate authorities as there is no stay on the order (s) passed by
 lower appellate authorities in favour of the Company and the amount is
 not ascertainable
 
 # includes interest and penalty amounts as specified in the demand
 order
 
 10.  The Company has no accumulated losses as at December 31, 2010 and
 it has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the information and explanations given to us and the
 records of the Company examined by us, the Company has not availed any
 loan from financial Institutions or banks or debenture holders as at
 the balance sheet date. Accordingly, there have been no defaults in
 repayment of dues.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions durinn thA vp.ar
 
 16.  The Company has not obtained any term loans.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  There are no debentures issued and outstanding at the year-end.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the Management.
 
                                         For Price Waterhouse
 
                            Firm Registration Number: 301112E
 
                                        Chartered Accountants
 
                                                  Usha Rajeev
 
 Place : Gurgaon                                      Partner
 
 Dated: 2 February 2011           Membership Number: F 087191