The Trustees Glaxo Laboratories (Pakistan) Limited Executive Staff Provident Fund 35, Dockyard Road West Wharf

Karachi Dear Sirs

August 30, 2011 B

GLAXO LABORATORIES PAKISTAN LIMITED EXECUTIVE STAFF PROVIDENT FUND FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED DECEMBER 31, 2004 AND YEAR ENDED DECEMBER 31, 2005 THROUGH 2008 We enclose six copies each of the Funds above financial statements together with our reports thereon, to the trustees initialled by us for identification purposes. We shall be pleased to sign our report after:
(a)

we have seen our appointment as auditors of the Glaxo Laboratories (Pakistan) Limited Executive Staff Provident Fund for the nine months period ended December 31, 2004 and year ended December 31, 2005 through 2008; (b) these financial statements have been approved by you and signed by at least two trustees;
these financial statements; and the items listed on the Annexure to this letter;

(c)

we have seen a certified true copy of the minutes of the trustees meeting approving:

(d)
(e)

we have received confirmations in respect of balances receivable from and payable to the company by the Fund as at December 31, 2004 to 2008;

we have received direct reply to our request for confirmation of balances and investments held as at December 31, 2004 through 2008 from Citibank, N.A. AWT Plaza Branch, AWT Plaza, I.I. Chundrigar Road, Karachi and as at December 31, 2004 through 2008 from Standard Chartered Bank (Pakistan) Limited Main Branch, Opp. Habib Bank Plaza, I.I. Chundrigar Road, Karachi; we have received bank statement of accounts held in Citibank, N.A. AWT Plaza Branch, AWT Plaza, I.I. Chundrigar Road, Karachi and Standard Chartered Bank (Pakistan) Limited Main Branch, Opp. Habib Bank Plaza, I.I. Chundrigar Road, Karachi as at December 31, 2004 through 2006;

(f)

(g)

we have received signed list of bank accounts against which Term Deposits made for the nine months period ended December 31, 2004 and year ended December 31, 2005 through 2008; we have received supports against interest rate on saving accounts for the nine months period ended December 31, 2004 and year ended December 31, 2005 through 2008; we have received breakup of loan to members in short term and long term portion for the nine months period ended December 31, 2004 and year ended December 31, 2005 through 2008; and we have received details of movement in units of BMA Chundrigar Fund for the year ended December 31, 2007 and 2008. We wish to draw your attention to the following matters:

(h)

(i)

(j)

2.

Income of the Fund is distributed by the Trustees amongst the members at 10.5% per annum during the nine month period ended December 31, 2004, at 14% per annum during the years 2005 to 2006 and at 12% per annum during year 2007 irrespective of the total income earned by the fund in the respective years. Furthermore, it has been observed that no payment has been made to the outgoing members from undistributed income. This practice has resulted in the balance of undistributed income to rise to Rs. 30,477,485 as at December 31, 2007. We recommend that the total income earned by the Fund during the year be distributed amongst the members and a proportionate share of undistributed income be paid to outgoing members on separation from the company;

During the course of our audits, we have observed that single cash book is being maintained and single bank reconciliation is prepared for all bank accounts of the Fund. This may create difficulty in identification of reconciling items (specifically transfers from one bank account to the other). Moreover, it also impairs separate identification of cash available in different bank accounts and may result in negative balances (if any) in one bank account being offset against positive balances in other bank accounts. We recommend that separate cash books be maintained and separate bank reconciliation statements be prepared for all bank accounts to avoid the abovementioned risks; and

Rule 95(3) of the Income Tax Rules 2002 requires submission of an abstract for the accounting period of the individual account of each member participating in a recognised provident fund whose income under the head Salary is Rs. 24,000 or more per annum by the Trustees to the Commissioner of Income Tax of the area in which the accounts of the fund are kept. However, we have noted that the requirements of aforementioned Rule have not been complied with. We recommend that the trustees should comply with the requirements of the above mentioned Income Tax Rules 2002 to obviate any legal complications that may arise in future.

3.

Responsibilities of the Board of Trustees and the auditors in relation to the financial statements The responsibilities of the independent auditors, in a usual examination of the financial statements, are explained in International Standard on Auditing 200. While the auditors are responsible for forming and expressing their opinion on the financial statements, the responsibility for the preparation of the financial statements is primarily that of the trustees. The trustees responsibilities include the maintenance of adequate accounting records and internal controls, the selection and application of accounting policies, safeguarding of assets of the Fund and prevention and detection of frauds and irregularities. The audit of the financial statements does not relieve the trustees of its responsibilities. Accordingly, our examination of the books of accounts and records should not be relied upon to disclose all the errors or irregularities in relation to the financial statements. We would like to inform the trustees that unless we have signed the auditors report on these financial statements, the same shall remain and be deemed unaudited. We wish to place on record our appreciation for the co-operation and courtesy extended to us by the officials and staff of the Fund during the course of the audits.

Yours truly

encls

ANNEXURE A (Referred to in our letter B xxxx dated August 30, 2011) Page 1 of 1

GLAXO LABORATORIES PAKISTAN LIMITED EXECUTIVE STAFF PROVIDENT FUND FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED DECEMBER 31, 2004 AND YEAR ENDED DECEMBER 31, 2005 THROUGH 2008

Year ended December 31, 2004 (Nine months)) Income credited to members account Interest credited to members at the rate of Undistributed income with the Fund Encashment of Defence Savings Certificates Investment made in Listed Securities Sale of Listed Securities Investment made in Term Deposits Encashment of Term Deposits Investment made in Mutual Funds Encashment of Mutual Funds Encashment of Privilege Plus Account 7,090,302 10.5% 1,600,6 21 3,528,000 4,335 2005 2006 Rupees 10,301,984 14% 5,538 ,866 3,087,000 11,984,890 14% 25,001,096 3,852,150 1,830,850 14,961,632 11,961,631 12,345,839 12% 30,477,485 42,000,000 1,744,525 1,722,825 10,858,425 13,074,230 22,698,451 2,198,451 13,538,570 12% 5,079,045 61,687,500 45,617,729 10,345,449 129,664,218 92,535,158 5,000,000 25,500,000 2007 2008