GSK_Annual_Report_2021

Notes to the Consolidated Financial Statements for the year ended March 31, 2021 (contd.) Annual Report 2020-21 205 Note 40 : Pricing matters The demand of ` 71,79.00 lakhs made by the Central Government on the GlaxoSmithKline Pharmaceuticals Limited (“the Company”) in respect of Betamethasone bulk drugs and formulations made therefrom during the period May 1981 to August 1987 has been under litigation for a period spanning nearly 30 years. Pursuant to the special leave petition of the Central Government in the Supreme Court of India against the Delhi High Court’s Judgement and Order dated October 19, 2001 which was held in favour of the Company, the Supreme Court has, vide its Judgement and Order dated March 31, 2011, upheld the demand. The Company had accrued a liability of ` 18,68.00 lakhs in earlier years and a further provision of ` 53,11.00 lakhs was accrued in 2011. Based on legal advice, the Company has filed an application in the Supreme Court seeking, inter alia, clarifications on some aspects of the Judgement and directions for recomputation of the demand. Simultaneously, the Company without prejudice to and subject to the outcome of the application filed in the Supreme Court, has tendered as a further deposit, an amount of ` 63,60.00 lakhs, which together with the amount of ` 8,19 lakhs previously deposited with the Government, aggregates the demand of ` 71,79.00 lakhs made by the Government in November 1990. The Company filed a review petition in the Supreme Court which was rejected in March 2012. In October 1996, the Government had claimed interest of ` 117,66.00 lakhs for the period May 12, 1981 to October 17, 1996, for which no provision was made in earlier years. The Government has vide letter dated May 4, 2011 called upon the Company to discharge the entire liability, including upto date interest calculated at 15% p.a., and has vide letter dated October 10, 2011, raised a demand on the Company for the interest amount amounting to ` 247,44.00 lakhs. Without prejudice to the position that interest is not payable, the Company has recognized a provision of ` 247,44.00 lakhs in respect of the Government’s claim for interest in 2011. The Company has filed a writ petition at Delhi High Court against the above demand which has been admitted. The Company also filed stay applications which have been dismissed and has filed a Special Leave Petition (SLP) before the Supreme Court for stay of the interest demand until final determination of the writ petition filed in the Delhi High Court. The Supreme Court on hearing the above SLP, passed an order on April 3, 2012. The said order stayed the Demand Notice dated October 10, 2011 during the pendency of the writ petition at the Delhi High Court subject to the Company depositing ` 136,82.00 lakhs in three equal installments within six month’s time from the date of order. All three installments have been deposited with the Government as of date. The Supreme Court, vide its order dated October 5, 2012, directed the Delhi High Court to dispose of the writ petition as expeditiously as possible. The Company’s counsel has been routinely appearing in the matter and urging the Delhi High Court to hear the matter expeditiously considering it is at final hearing stage and has been pending for a long time. The counsel has also cited the significant sums involved; however, the Court is not inclined to take this matter out of turn and is currently hearing urgent matters only due to the ongoing Covid 19 situation. Next date of the matter is July 15, 2021. Note 41 : 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 July 21, 1993, directing erstwhile BWIL to pay an amount of ` 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 July 21, 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 ` 2,00.00 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.