It is a pleasure to welcome you to this the forty-eighth annual general meeting.

Let's hold on to this string of thought as I take you through last year's performance and GSKCH's targets for 2007.

I am delighted to be able to tell you that 2006 was another year of outstanding performance and double-digit growth. In 2006, we experienced growth across all regions. We were not only able to grow in terms of sales, but also managed to strengthen some of our existing brands through innovative strategies. We displayed dexterity in keeping costs under check and utilising existing resources to the optimum. Your company truly emerged as an innovative player in the FMCG industry.

2007 promises to be yet another exciting year. Having experienced two consecutive years of double digit growth, we now wish to take "growth" to a new level. Clearly, double digit growth today is not enough, and therefore no longer the benchmark. We now need to be much more innovative and to think bigger.

According to Steve Jobs, the co-founder of Apple Inc., "Innovation distinguishes between a leader and a follower." We need to innovate in order to emerge as a true leader in the Indian FMCG market. That leadership will only come by stepping up our innovation processes and taking more calculated risks. To help focus our team on what is required, we have a new motto - 'performance with an edge'.

Looking ahead, we must keep up the momentum of 2005 and 2006 in order to achieve our key objective for this year - to finally 'climb up the teens' in terms of growth rates. In order to fulfil this target, we need to have a fresh and vibrant approach to growth. We need to move beyond best practices, to 'next practices' that will help us take the 'next leap forward'.

High economic growth is throwing up new opportunities. GSKCH is excited by the opportunities ahead and has an aggressive long-term strategy for growth and leadership. In this connection we are exploring all kinds of opportunities in the health and wellness (nutraceuticals) space in India.

Nutraceuticals is our way of touching the lives of consumers spread across the length and breadth of the country. With rising awareness and health-consciousness, this new-age category is attracting a lot of attention. Your company also has the technological expertise and competencies, the brand equity, and all the required formats to address the country's health, nutrition and wellness needs.

Nutraceuticals will be our key focus for 2007. We have undertaken several innovative initiatives in the past that have been successful with consumers - such as putting up vending machines at schools, offices, hospitals etc for Horlicks and Boost; introducing Horlicks Lite, a lifestyle management solution for 40+ adults and launching Mother's Horlicks with DHA.

The senior management of GSKCH is constantly taking a pulse check on the market. In 2007, GSKCH will look for both organic and inorganic means of growth. We have initiated a programme for targeted acquisitions in India. We would like to acquire healthcare brands, technologies or businesses that will support our growth agenda. Your company has the complete support of the board to explore and leverage opportunities that are a strategic fit for growth.

The stage is set to help us achieve our goals. The economy is growing at a healthy rate of over 9%. Both the FMCG industry and the organised retail industry are growing at even more healthy rates of 20% and 45% respectively.

Economic growth projections are also on our side. The $13.1 billion FMCG sector is poised to treble in value terms by 2018. Penetration levels in most product categories continue to be quite low, giving us the opportunity to exploit the burgeoning wealth of the Indian middle class and to turn "growth' into "explosive growth". We can't ask for a better business environment.

2006 saw sales increase by 11.5% whereas the bottom-line registered a growth of 18.4%. This was despite the fact that input costs rose by 9% over last year. Amongst the items affected by cost increases were liquid milk and skimmed milk powder - two very important ingredients for our products. In 2006, north India witnessed 20% less rainfall. This coupled with higher temperatures in the north and floods in West India during July and August, adversely impacted milk and skimmed milk powder (SMP) supply across the country.

What played as a double whammy were volatile international prices for most commodities. Adverse weather conditions in America, Europe and Australia resulted in reduced world grain output, which in turn lead to increased market volatility. The net result for us was an unprecedented increase in prices of SMP (40%), wheat (22%), milk (23%). For those of you who know our production processes you would understand how this impacted our business.

Our procurement team was proactive in managing the crisis-situation in milk and SMP and maintained security of supply for all manufacturing sites. Various cross-functional initiatives in sugar, SMP, malt and gluten have been taken up that will ensure supplies at competitive rates. Moreover, savings arising out of a well executed in-house cost containment programme have led to a healthy bottom-line growth.

In the year ended December 31, 2006, GSKCH posted a sales turnover of Rs. 1214 Crore, against Rs. 1089 Crore in 2005. Profit after tax stood at Rs. 127 Crore, as against Rs. 107 Crore for 2005.

As you can see, your company was successful in achieving an impressive top line, while keeping costs at the lowest possible level. And we didn't achieve that by cutting down our advertising budgets or sales and marketing spends, but by reducing operating costs. Today, we operate with minimum trade pipelines. We are able to sell as per the market demand and maintain a very efficient supply chain.

2006 was clearly the year of Horlicks. The 136-year old brand, restaged last year, clocked an impressive 12.8% growth thanks to some intense market research and product development. Innovation worked wonders. For instance, some attractive, state-of-the-art packaging for Junior Horlicks and the relaunch of Chocolate Horlicks in a cold format were some innovative ideas we introduced last year. Chocolate Horlicks on the back of 'Icy' froze the competition stiff and delivered a resounding 22% growth. Junior Horlicks 'Jingled' its way in to the hall of fame with a 21% growth.

Besides being cost-conscious and innovative, we were also able to improve our cash management. We maximised return on idle cash through efficient investment in debt-based mutual funds. During 2006, we also launched a state-of-the-art web-based Treasury operation integrating payments to vendors and collections from customers, centrally.

There have been changes in the top leadership that I am sure you are aware of. Having expressed a desire to spend more time in UK with his family, towards the end of last year, Nick Massey returned to a senior position with GSK in London. It would be remiss of me if I did not take this opportunity to place on record our appreciation of the way he managed the business during his time here. With effect from January 1, 2007, Zubair Ahmed has taken charge as the Managing Director. Zubair comes to us with 30 years of experience gained from working with large companies like Voltas, Unilever and Gillette. In the past, Zubair has taken on a number of very exciting and challenging assignments, and I am confident that he will provide a fresh thrust and perspective to our growth agenda. I am confident that under his leadership, GSKCH will scale new heights and see many innovative strategies in products and processes. So, Zubair, welcome. We are all looking forward to working with you.

In addition, two directors on the GSKCH board - P Dwarakanath and A S Lakshmanan - retired last year. While P Dwarakanath continues to be a non-executive director, A S Lakshmanan had reached the age limit which we have set for board members. I am particularly sad to see Laksh leave our board. I have served with him on a number of the company's boards In India, and during that time apart from being a colleague, he was a friend.

Partha S Mukherjee, another whole-time director, left the services of the company in May 2006, and whilst not remaining as a director, has agreed to continue to represent our company's interests at the various chamber and government committees he sits on.

Although your company is going through a number of changes at the top, we should all view this transition phase positively. Under Zubair and the team, I am sure the core values of the company will only grow stronger, as we carry on our quest for higher and higher growth.

Your company, in its endeavour to serve the community, continues to contribute to rural areas around its factories. Last year, many of our CSR initiatives won global recognition and awards.

During 2006, we won the prestigious Asian CSR 2006 Award, in the category of "Improvement of Education", for our work on the "knowledge-based therapeutic recreation for children/youth and HIV/AIDS" programme in India. The programme was chosen out of a highly competitive field of 178 projects submitted by 98 companies across 14 countries in Asia. It acknowledged the company's leadership in raising awareness in girl children about their rights against trafficking and sensitising them about hygiene and appropriate behaviour when dealing with People Living With AIDS (PLWA).

During the year the Nabha site received "The Best Environment Protection Initiative 2006" award from the Punjab Pollution Control Board. The site proactively launched the 'Stop Dengue' Campaign in Nabha town to improve sanitation and hygiene, in association with local NGOs, civil administration and health authorities and the community.

Like before, the site organised regular animal welfare measures and subsidised vet medicines, supported several dairy farming initiatives like veterinary camps, milking competitions, sponsoring awareness camps etc in the milk shed area.

We also launched new CSR initiatives in 2006. In Sonepat, a multifaceted programme for health and education of women was undertaken. Under this programme, health camps and vocational training programmes were organised in order to empower the rural womenfolk. This effort is the stepping stone for many such initiatives in villages around your factory in Sonepat.

Apart from external CSR activities, your company is concerned with doing what it can for a cleaner and safer environment. Over the last two years, the Rajahmundry site has planted more than 2000 Bio-diesel saplings. The bio-diesel accrued from these plants shall be used for the vehicles operated by the site.

We have everything going for us today. The boom and the thrust on the retail sector augur well for our industry. Investments in certain infrastructure projects in the last six years have opened up new opportunities in semi-urban and rural areas. Higher literacy rates, changes in lifestyle, increased health consciousness, and mass media promotion are some of the major contributors to the growing demand of consumer products in the country.

Before I close, I have one final item to cover. This is the dividend payout. Like our focused attention on growth, maximising shareholder value is important to us. To enhance returns to shareholders, your Board of Directors declared an Interim dividend aggregating to Rs. 10 per share that is commensurate with the results for the year ended 31^{st December, 2006.}

Thank you.