1.  We have audited the attached Balance Sheet of Procter & Gamble
 Hygiene and Health Care Limited (the Company), as at June 30, 2010,
 the Profit and Loss Account and also the Cash Flow Statement of the
 Company for the year ended on that date, both annexed thereto. 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 misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the 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 (CARO)
 issued by the Central Government of India in terms of Section 227(4A)
 of the Companies Act, 1956, we enclose in the Annexure, a statement on
 the matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in Paragraph 3
 above, we report as follows:
 
 (a) we have obtained all the information and explanation 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 it appears from our examination of
 those books;
 
 (c) the Balance Sheet, the Profit and Loss Account and also the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (d) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (e) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956 in the manner so required 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 June 30, 2010;
 
 (ii) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5. On the basis of written representations received from the Directors
 as on June 30, 2010 and taken on record by the Board of Directors, none
 of the Directors is disqualified as on June 30, 2010 from being
 appointed as a director in terms of Section 274(1 )(g) of the Companies
 Act, 1956.
 
 Annexure referred to in paragraph 3 of the Auditors Report on the
 Accounts of Procter & Gamble Hygiene and Health Care Limited
 
 i. Having regard to the nature of the Companys business/
 activities/result, clauses vi, x, xi, xii, xiii, xiv, xv, xvi, xviii,
 xix and xx of CARO are not applicable.
 
 ii.  In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanations given to us, no material discrepancies were noticed on
 such verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 iii.  In respect of its inventory.
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 iv. The Company has neither granted nor taken any loans, secured or
 unsecured, to /from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act. 1956.
 
 v. In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, there is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business with regard to purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 vi. In respect of contracts or arrangements entered in the register
 maintained in pursuance of Section 301 of the Companies Act 1956. to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to in Section
 301 that needed to be entered into the register, maintained under the
 said section have been so entered.
 
 (b) Where each of such transactions (excluding loans reported under
 paragraph (iv) above) is in excess of Rs.5 lakhs in respect of any party,
 the transactions have been made at prices which are prima facie
 reasonable having regard to the prevailing market prices at the
 relevant time, except that reasonableness could not be ascertained
 where comparable quotations are not available having regard to the
 specialized nature of some of the transactions of the Company.
 
 vii. In our opinion, the company has an adequate internal audit system
 commensurate with the size and the nature of its business.
 
 viii. We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1 )(d) of the Companies
 Act, 1956 in respect of manufacture of formulations and are of the
 opinion that prima facie, the prescribed accounts and records have been
 made and maintained. We have, however, not made a detailed examination
 of the records with a view to determining whether they are accurate or
 complete. To the best of our know ledge and according to the
 information and explanations given to us, the Central Government has
 not prescribed the maintenance of cost records for any other product of
 the Company.
 
 ix. According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 statutory dues, including Provident Fund, Investor Education and
 Protection Fund, Employees State Insurance, Income tax. Sales-tax,
 Wealth Tax, Service Tax. Custom Duty. Excise Duty, Cess and other
 material statutory dues as applicable to it with the appropriate
 authorities.
 
 (b) There were no undisputed amounts payable in respect of Income-tax,
 Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
 dues in arrears as at June 30, 2010, for a period of more than six
 months from the date they became payable.
 
 (c) Details of Excise Duty, Sales Tax and Custom Duty which have not
 been deposited as on June 30, 2010 on account of disputes are given
 below:
 
 Sr.  Statute         Nature of  Forum       Period to           Amount
 No.                  dues       where       which the           involved
                                 dispute 
                                 is          amount              (Rs.in
                                 pending     relates             Lakhs)
 
 1.   Sales Tax       Sales Tax  Appellate   1997-98 to          1501.21
      Laws as                    Authorities 2008-09
      per statutes 
      applicable in 
      various states
 
                                 Tribunal    1990-91 to           188.37
                                             1996-97, 2001-02, 
                                             2002-03 and
                                             2005-06     
 
                                 High Court  1990-91 to            17.14
                                             1997-98 and
                                             2002-03     
 
      Sub-total                                                  1706.72
 
 2.   Customs Act.    Custom     Joint       1992-93              201.76
      1962            Duty       Director
                                 General of 
                                 Foreign 
                                 Trade
      Sub-total                                                   201.76
 
 3.   The Central     Excise 
                      Duty       Appellate   2004-05 to            10.00
      Excise Act.                Authorities 2008-09
      1944     
 
      Sub-total                                                    10.00
 
 The above excludes disputed unpaid Excise demands of Rs.221.40 lakhs and
 unpaid Service Tax demand of Rs. 1.65 lakhs raised by the authorities on 
 third parties with whom the Company has business transactions /contractual 
 obligations. There were no disputed dues remaining unpaid in respect of 
 income tax, service tax, wealth tax and cess during the year.
 
 x. In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet of the
 Company, we report that the funds raised on short term basis have not
 been used during the year for long term investment.
 
 xi. To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no fraud on the
 Company has been noticed or reported during the year.
 
                                          For DELOITTE HASKINS & SELLS 
                                                 Chartered Accountants
 
                                             (Registration No. 117366W)
 
                                                            K. A. Katki
 
 Mumbai,                                                        Partner
 
 August 18, 2010                                  Membership No. 038568