1 The Company received a demand for Rs. 71,79 lakhs from the Central
 Government contained in its orders dated 18th June, 1990 and 16th
 November, 1990 in respect of prices relating to Betamethasone bulk
 drugs and formulations therefrom. These orders were challenged by the
 Company by a writ petition in the Honble High Court at Delhi. After
 hearing the submissions of the Company, as well as the Government, in
 the writ petition, the Honble High Court by its judgement and order
 dated 19th October, 2001, was pleased to set aside the impugned demands
 raised by the Central Government. The claim to interest made by the
 Government vide its letter dated 29th October, 1996, demanding interest
 of Rs. 117,66 lakhs for the period 12th May, 1981 to 17th October, 1996
 thereby, does not survive. The Honble High Court has also directed
 that the Company be given an opportunity to present its case with full
 facts to enable the Central Government to raise a fresh demand. The
 Company has sent a letter to the Government giving details of the
 quantities based on which the demand has to be raised as per the
 judgement of the Honble High Court at Delhi and has intimated to the
 Government that according to the Company, after considering the set
 offs which the Company has claimed, the amount payable would be Rs.
 18,68 lakhs. The Company had accrued a liability of Rs. 18,68 lakhs of
 which an amount of Rs. 8,19 lakhs has been paid to the Government in
 the earlier years. Accordingly, the Company has retained the liability
 of Rs. 10,49 lakhs in the Balance Sheet.
 
 The Central Governments special leave petition in the Supreme Court
 against the Delhi High Courts judgement and order dated 19th October,
 2001 was admitted. The Supreme Court has heard the special leave
 petition and reserved orders.
 
 2 Matters in respect of erstwhile Burroughs Wellcome (India) Limited
 (BWIL):
 
 (i) The Government of India, Ministry of Chemicals and Fertilisers, New
 Delhi, passed a final order on 21st July, 1993, directing erstwhile
 BWIL to pay an amount of Rs. 1,91.15 lakhs along with interest due
 thereon from the date of default into the Drugs Prices Equalisation
 Account (DPEA) in respect of a bulk drug procured by erstwhile BWIL
 during the period April 1981 to April 1983.
 
 Erstwhile BWIL filed a writ petition in August 1993 which was admitted
 by the Bombay High Court. After hearing both the parties, the High
 Court granted an interim injunction restraining the Government of India
 from taking any action in furtherance of and/or implementation of the
 order dated 21st July, 1993 or from in any manner seeking to compel
 erstwhile BWIL to deposit any amount into the DPEA, pending the hearing
 and final disposal of the petition on the condition that erstwhile BWIL
 furnishes a bank guarantee for Rs. 2,00 lakhs from a nationalised bank
 and undertakes to pay the amount demanded with interest at the rate of
 20% per annum in case the petition fails.
 
 Erstwhile BWIL had accordingly furnished the required bank guarantee.
 If calculated on the basis of correct data, taking into account set
 offs claimable for earlier years for which data has been provided by
 erstwhile BWIL, no amount will be payable by the Company and
 accordingly no provision in that respect is considered necessary. The
 Companys stand that the demand is not sustainable has been confirmed
 by an eminent counsel. The Government of Indias application in the
 Supreme Court praying that the writ petition be transferred to the the
 Supreme Court from the Bombay High Court was not allowed and the
 Companys writ petition will now be heard by the Bombay High Court.
 
 (ii) Erstwhile BWIL had made an application to the Government of India
 for approval under Section 198(4) of the Companies Act, 1956, in
 respect of payment of remuneration to the Managing Director and three
 whole time Directors amounting to Rs. 10.93 lakhs for the year ended
 31st August, 1986, which was in accordance with the minimum
 remuneration provided in the agreement entered into with them prior to
 erstwhile BWIL becoming public, which required such Government of
 Indias sanction. The approval is still awaited.
 
 (iii) Remittances in transit represent monies deposited by customers in
 favour of erstwhile BWIL with banks in Zambia - Rs. 0.31 lakhs and in
 Tanzania - Rs. 5.61 lakhs, the remittance of which is pending clearance
 of the authorities in those countries.
 
 3 Matters in respect of erstwhile SmithKline Beecham Pharmaceuticals
 (India) Limited:
 
 (i) Rs. 1,44.44 lakhs received from Beckman Instruments International
 S.A. on account of disputed alleged additional commission has been
 included under Sundry Creditors and Income tax paid thereon aggregating
 to Rs. 64.77 lakhs has been included under Loans and Advances. The
 Company is contesting the matter with the concerned authorities.
 
 (ii) Refund of surtax Rs. 96.81 lakhs, and interest thereon amounting
 to Rs. 48.52 lakhs, received during 1994, have not been adjusted
 against the provision for tax in the books of account and recognised as
 income respectively, since the Income tax department had filed a
 reference application against the income tax tribunals order which was
 pending before the High Court of Kamataka. The Company has received an
 order dated 18th April, 2007 from the High Court of Karnataka which is
 partially in the Companys favour. On the basis of the aforesaid order,
 Income Tax Appellate Tribunal (ITAT), Bangalore will pass an order
 giving directions. On receipt of the ITAT order, the Company will take
 appropriate steps in the matter.
 
                                                            Previous
                                                             year
                                             Rupees in      Rupees in
                                             lakhs           lakhs
 
 4 Contingent Liabilities not provided for:
 
 (i) Cheques discounted with banks           2,20.69        3,97.41
 
 (ii)    In respect of claims made against 
 the Company not acknowledged as
 debts by the Company
 
 Sales tax matters                          25,99.21       29,73.24
 
 Excise matters                              4,38.97        7,98.19
 
 Service tax matters                         1,29.20        2,42.18
 
 Labour matters                             41,65.07       37,41.03
 
 Other legal matters                        10,63.57        8.62.09
 
 which net of current tax amount to         56,07.07       56.87.90
 
 (iii) Taxation matters in respect of which 
 appeals are pending Tax on matters in 
 dispute                                   124,59.24      110,78.74
 
 Other consequential matters (net of tax)    3,74.39        3,74.39
 
 Notes:
 
 Future cash outflows in respect of (i) above are dependant on the
 return of cheques by banks.
 
 Future cash outflows in respect of (ii) and (iii) above are
 determinable on receipt of decisions / judgements pending with various
 forums / authorities.
 
 5 There are no delays in payments to Micro and Small enterprises as
 required to be disclosed under the Micro, Small and Medium Enterprises
 Development Act, 2006.
 
 The above information and that given in Schedule 12 - Current
 Liabilities regarding Micro and Small enterprises has been determined
 to the extent such parties have been identified on the basis of
 information available with the Company. This has been relied upon by
 the Auditors.
 
 6 The tax year for the Company being the year ending 31st March, the
 provision for taxation for the year is the aggregate of the provision
 made for the three months ended 31st March, 2010 and the provision
 based on the figures for the remaining nine months up to 31st December,
 2010, the ultimate tax liability of which will be determined on the
 basis of the figures for the period 1st April, 2010 to 31st March,
 2011.
 
 7 Other income in Schedule 14 includes profit on sale / redemption of
 long term investments Rs. 1.81 lakhs (Previous year - Nil).
 
 8 The recurring expenditure on research and development charged off to
 revenue amounts to Rs. 4,43.39 lakhs (Previous year - Rs.  4,66.82
 lakhs).
 
 9  Reimbursement / (Recovery) of expenses (net) in Schedule 16 are
 amounts recovered from GlaxoSmithKline Asia Private Limited Rs. 2,63.35
 lakhs (Previous year - Rs. 7,02.62 lakhs), from subsidiary company Rs.
 4,88.05 lakhs (Previous year - Rs. 5,12.25 lakhs), from Stiefel India
 Private Limited Rs. 13.85 lakhs (Previous year - Nil) , from
 GlaxoSmithKline Pte Limited Rs. 59.41 lakhs (Previous year - Rs. 28.03
 lakhs), from GlaxoSmithKline S.A.E - Nil (Previous year - Rs. 15.29
 lakhs), from GlaxoSmithKline Pharmaceutical Sdn Bhd Rs. 14.51 lakhs
 (Previous year - Rs. 25.54 lakhs) and paid to GlaxoSmithKline Consumer
 Healthcare Limited Rs. 8,95.89 lakhs (Previous year - Rs. 8,89.83
 lakhs) towards the value of costs apportioned, in accordance with the
 agreements on allocation of expenses with the companies.
 
 The disclosures as required by Accounting Standard 15, Employee
 benefits (revised 2005), notified under sub-section (3C) of Section 211
 of the Companies Act, 1956 are as given below :
 
 1 Brief description of the Plans
 
 The Company has various schemes for long-term benefits such as
 provident fund, superannuation, gratuity and post retirement medical.
 In case of funded schemes, the funds are recognised by the Income tax
 authorities and administered through trustees / appropriate
 authorities. The Companys defined contribution plans are
 superannuation and employees pension scheme (under the provisions of
 the Employees Provident Funds and Miscellaneous Provisions Act, 1952)
 since the Company has no further obligation beyond making the
 contributions. The Companys defined benefit plans include gratuity and
 post retirement medical. In terms of the Guidance on implementing the
 revised AS 15, issued by the Accounting Standards Board of the
 Institute of Chartered Accountants of India, the provident fund set up
 by the Company is treated as a defined benefit plan since the Company
 has to meet the interest shortfall, if any. However, as at the year
 end, no shortfall remains unprovided for.  As advised by an independent
 actuary, it is not practical or feasible to actuarially value the
 liability considering that the rate of interest as notified by the
 Government can vary annually. Further, the pattern of investments for
 investible funds is as prescribed by the Government. Accordingly, other
 related disclosures in respect of provident fund have not been made.
 The employees of the Company are also entitled to leave encashment and
 compensated absences as per the Companys policy.
 
 3 The liability for leave encashment and compensated absences as at
 year end is Rs. 23,82.44 lakhs (Previous year - Rs. 19,01.89 lakhs).
 
 10 The Company has only one reportable segment which is
 Pharmaceuticals. Accordingly, no separate disclosures of segment
 information have been made.
 
 11 Related Party disclosures
 
 Related party disclosures, as required by Accounting Standard 18,
 Related Party Disclosures, notified under sub-section (3C) of Section
 211 of the Companies Act, 1956 are given below:
 
 1 Relationships (during the year):
 
 (i) Shareholders (the GlaxoSmithKline (GSK) Group shareholding) in the
 Company
 
 Glaxo Group Limited, U.K.
 Eskaylab Limited, U.K.
 
 Burroughs Wellcome International Limited, U.K.
 Castleton Investment Limited, Mauritius
 
 Holding company / ultimate holding company of the above shareholders *
 
 GlaxoSmithKline pic, U.K.
 
 GlaxoSmithKline Finance pic, U.K.
 
 SmithKline Beecham pic, U.K.
 
 Wellcome Limited, U.K.
 
 Wellcome Foundation Limited, U.K.
 
 Wellcome Consumer Healthcare Limited, U.K.
 
 * no transactions during the year
 
 (ii)    Subsidiary of the Company
 
 Biddle Sawyer Limited, a wholly owned subsidiary of the Company
 
 (iii) Other related parties in the GlaxoSmithKline (GSK) Group where
 common control exists and with whom the Company had transactions during
 the year:
 
 SmithKline Beecham Private Limited, Sri Lanka
 GlaxoSmithKline Pakistan Limited, Pakistan
 GlaxoSmithKline Asia Private Limited, India
 GlaxoSmithKline Consumer Healthcare Limited, India
 GlaxoSmithKline Biologicals S.A., Belgium
 GlaxoSmithKline Services Unlimited, U.K.
 Laboratoire GlaxoSmithKline S.A.S., France
 GlaxoSmithKline Pharmaceutical Sdn Bhd, Malaysia
 GlaxoSmithKline Export Limited, U.K.
 GlaxoSmithKline Pte Limited, Singapore
 GlaxoSmithKline Australia Pty Limited, Australia
 GlaxoSmithKline Trading Services Limited, Ireland
 GlaxoSmithKline LLC, U.S.A
 Stiefel India Private Limited, India
 US Pharmaceuticals, U.S.A.
 
 (iv) Directors and members of GSK India Management Team and their
 relatives:
 
 Dr. A. Banerjee                               Mr. P.V. Nayak
 
 Mr. A.M. Nimbalkar (up to 27th April, 2010)   Mr. R. Bartaria
 
 Mr. C.T. Renganathan                          Mr. R.C. Sequeira
 
 Mr. D.S. Parekh                               Mr. R.R. Bajaaj
 
 Mr. D. Sundaram                               Mr. S. Harford 
                                           (w.e.f 28th October, 2010) *
 
 Dr. H.B. Joshipura                            Dr. S. Joglekar
 
 Mr. H. Buch                                   Mr. Sunder Rajan
 
 Mr. M.B. Kapadia                              Mr. S. Khanna
 
 Mr. M.K. Vasanth Kumar                        Mrs. S. Patel
 
 Mr. N. Kaviratne                              Mr. V. Narayanan
 
 Mr. P. Bhide (w.e.f 28th October, 2010)       Mr. V. Thyagarajan
 * no transactions during the year
 
 12 Disclosures as required by Accounting Standard 19, Leases,
 notified under sub-section (3C) of Section 211 of the Companies Act,
 1956, are given below:
 
 (i) The Company has taken various residential, office and godown
 premises under operating lease or leave and licence agreements.  These
 are not non-cancellable and range between 11 months and 3 years under
 leave and licence, or longer for other leases and are renewable by
 mutual consent on mutually agreeable terms. The Company has given
 refundable interest free security deposits under certain agreements.
 
 (ii) Lease payments are recognised in the Profit and Loss Account under
 Rent in Schedule 16.
 
 13 Amount recognised as expense for the year under the long-term
 incentive plan is Rs. 1,29.14 lakhs (Previous year - Rs. 1,72.64
 lakhs).
 
 The total carrying amount of the corresponding liability at the year
 end is Rs. 3,06.43 lakhs (Previous year - Rs. 3,21.26 lakhs).
 
 14 Provision for taxation represents provisions in excess of payments
 of Rs. 2243,53.05 lakhs and includes a net tax refund with interest of
 Rs. 110,35.00 lakhs which has been held as provision pending the final
 outcome of a litigation. (Previous year - Rs. 1938,85.90 lakhs and
 includes a net tax refund with interest of Rs. 110,35.00 lakhs which
 has been held as provision pending the final outcome of a litigation).
 
 15 Fringe benefits tax represents payments in excess of provisions of
 Rs. 30,37.48 lakhs (Previous year - Rs. 30,37.48 lakhs).
 
 16 Previous years figures have been regrouped wherever necessary.
 
 Signatures to the Schedules 1 to 17 which form an integral part of the
 Financial Statements.