As at         As at
                                      December 31,    December 31,
                                           2010           2009
                                       (Rs. Lacs)     (Rs. Lacs)
 
 1. Estimated amount of Contracts 
 remaining to be executed
 on Capital account (net of Capital 
 Advances) and not provided for        1,88,60.53      26,63.24
 
 2. Raw Materials consumed as shown under Notes 7 and 8 (a) above
 includes Rs. 5,83.40 Lacs (Previous Year Rs. 4,05.12 Lacs) being the
 cost of materials consumed on samples used for promotional purposes
 included under Advertising and Promotion expenses (Refer Schedule 14),
 Rs. 64.15 Lacs (Previous Year Rs. 45.10 Lacs) being the cost of stock
 breakages recoverable from the Insurance Company and provision for
 stock obsolescence Rs. 1,81.49 Lacs (Previous Year Rs. 46.85 Lacs).
 
 3. (a) The Company has classified the various benefits provided to
 employees as under -
 
 II. Defined Benefit Plans
 
 In accordance with Accounting Standard 15 Employee Benefits, an
 actuarial valuation was done as at December 31st, 2010 in respect of
 following Defined Benefit Plans
 
 a.  Contribution to Provident Fund
 
 b.  Contribution to Gratuity Funds - Employees Gratuity Fund, Senior
 Staff Gratuity Fund
 
 c.  Leave Encashment / Compensated Absences for workers - (Earned
 leave, Sick Leave and Special leave)
 
 d.  Post-Employment Medical Assistance Scheme
 
 4.  The Company has during the year accounted for certain exgratia
 payments to its employees aggregating Rs. 4,27.06 Lacs (Previous Year
 Rs. 3,67.90 Lacs) included under Employees Cost (Refer Schedule 13).
 
 5.  The amounts due to Micro & Small Enterprises as at December 31,
 2010 have been disclosed under Sundry Creditors in Schedule 10 on the
 basis of confirmations obtained from suppliers who have registered
 themselves under the Micro, Small & Medium Enterprises Development Act,
 2006 (MSMED Act, 2006) and/or based on the information available with
 the Company . Further, no interest during the year has been paid or
 payable under the terms of the MSMED Act, 2006.
 
 6. (a) In accordance with the requirements of Accounting Standard (AS)
 - 18 Related Party Disclosures the names of the related party where
 control exists/able to exercise significant influence along with the
 aggregate transactions and year end balance with them as identified by
 the management in the ordinary course of business and on arms length
 basis are given below:
 
 A.  Promoter Company - Horlicks Limited, (a subsidiary of
 GlaxoSmithKline Pic UK) holds 43.16% of equity shares of the Company.
 
 B.  Other related parties in GlaxoSmithKline Group which are under
 Common Control -
 
 (a) Glaxo Operations UK Area
 
 (b) GlaxoSmithKline Bangladesh Ltd.
 
 (c) GlaxoSmithKline Exports Ltd.
 
 (d) Glaxo Wellcome Indonesia
 
 (e) GlaxoSmithKline Asia Pvt. Ltd.
 
 (f) GlaxoSmithKline Australia Pty
 
 (g) GlaxoSmithKline Consumer Healthcare GmbH (h) GlaxoSmithKline
 Consumer Healthcare Kenya
 
 (i) GlaxoSmithKline Consumer Healthcare SDN BHD Malaysia
 
 G) GlaxoSmithKline Pharmaceuticals Ltd.
 
 (k) GlaxoSmithKline Philippines Inc.
 
 (I) GlaxoSmithKline Pte. Ltd.
 
 (m) GlaxoSmithKline Services Unlimited (U.K.)
 
 (n) GlaxoSmithKline Trading Services Limited
 
 (o) GSK Nigeria
 
 (p) GSK Pic, UK
 
 (q) GSK Services Limited
 
 (r) SB Bangladesh
 
 (s) PT Sterling Products Indonesia
 
 (t) SB Corp CB (USA)
 
 (u) SB Pharmaceutical Services
 
 (v) SB Research Ltd.
 
 (w) SB Corporate Centre
 
 (x) SmithKline Beecham (Pvt) Ltd., Sri Lanka
 
 (y) SmithKline Beecham Corporation
 
 (z) Sterling Drugs (M) Sdn Bhd
 
 (aa) Tianjin SmithKline & French Labs Ltd., China
 
 C.  Trusts under Control of the Board of the Trustees -
 
 a.  Senior Staff Gratuity Fund
 
 b.  Employees Gratuity Fund
 
 c.  Provident Fund
 
 d.  Indian Senior Executives Superannuation Fund
 
 D.  Key Management Personnel
 
 a.  Zubair Ahmed, Managing, Director
 
 b.  Praveen Kumar Gupta, Director - Operations
 
 c.  R. Subramanian, Director - Finance
 
 7.  The Company has initiated a long term incentive plan to maintain
 its competitiveness in attracting and retaining Senior Grade Managers.
 In terms of this plan, the eligible employees will receive cash
 equivalent to the market price of the shares of GSK Pic. at the end of
 the three years restricted period provided the eligible employees are
 in continuous employment with the Company during that time.
 Accordingly, a sum of Rs. 1,92.53 Lacs (Previous Year Rs. 3,25.97 Lacs)
 has been accounted in these financial statements on a prorata basis as
 Salaries, Wages, and Bonus under Employees Cost (Refer Schedule 13).
 
 8.  The Company has various direct and indirect tax disputes as at the
 year end and adequate liability/provision has been provided for/made
 aggregating Rs. 46,58.59 Lacs (Previous year Rs. 29,70.44 Lacs)
 wherever considered necessary by the Management, based on legal advice
 obtained by the Company and merits of the case (Refer Schedule 10).
 
 9.  In accordance with the requirements of Accounting Standard (AS)
 -19 Leases, the Company has entered into two non- cancellable
 operating leases in respect of office premises. The terms of the said
 lease include terms for renewal, increase in rents in future periods
 for premises and terms of cancellation. The total lease payments
 recognized in the statement of Profit and Loss Account for the period
 amount to Rs. 3,82.27 Lacs (Previous Year Rs. 3,82.27 Lacs). Total of
 future Minimum Lease Payments under non-cancellable leases in case of
 the premise on lease:
 
 - Not later than 1 year Rs. 3,41.67 Lacs
 
 - Later than 1 and not later than 5 years Rs. 4,62.81 Lacs
 
 - Later than five years Nil
 
 10.  (a) In accordance with AS 29 - Provisions, Contingent Liabilities
 and Contingent Assets, the Company has been prudent to consider the
 following provisions which have been disclosed as under:
 
 (b) Contingent Liabilities not provided for:
 
                                          As at           As at
                                December 31, 2010    December 31, 2009
                                       (Rs. Lacs)        (Rs. Lacs)
 
 Cheques under Cash Management System    95.31             15.43
 
 Claims made against the Company not 
 acknowledged as debts (to the extent 
 ascertainable)
 
 a) Direct Tax                      1,43,04.66          30,08.00
 
 b) Indirect Taxes - net of tax Rs. 1,70.76 Lacs
 
 (Previous Year Rs. 1,65.37 Lacs)      3,43.31           3,21.17
 
 The amounts shown above represent the best possible estimates of
 pending litigations/disputes arrived at on the basis of available
 information. The above do not include potential risks/demands, if any
 for ongoing issues, where no claims have been made against the company.
 The uncertainties and possible reimbursements if any are dependent on
 the outcome of the different legal processes which have been invoked by
 the Company or the claimants as the case may be and therefore cannot be
 predicted accurately. The Company engages reputed professional advisors
 to protect its interests and has been advised that it has strong legal
 positions against such disputes.
 
 11. Previous Years figures have been regrouped/ reclassified, wherever
 necessary, to conform to the current years classification.