GSK_ Annual_Report_2021-22

GlaxoSmithKline Pharmaceuticals Limited | Annual Report 2021-22 Notes to the Standalone Financial Statements for the year ended March 31, 2022 148 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 had recognized a provision of ` 247,44.00 lakhs in respect of the Government’s claim for interest in 2011. The Company had filed a writ petition at Delhi High Court against the above demand which had been admitted. The Company also filed stay applications which were dismissed and the Company had 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 instalments have been deposited with the Government. 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 as 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. Next date of the matter is July 26, 2022. Note 44 : 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. 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 Company’s stand that the demand is not sustainable has been confirmed by an eminent counsel. The Government of India’s 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 Company’s 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 to the Managing Director and three whole time Directors amounting to ` 10.93 lakhs for the year ended August 31, 1986, which was in accordance with the minimum remuneration provided in the agreements entered into with them prior to erstwhile BWIL becoming public, which required such Government of India’s sanction. The approval is still awaited. Note 45 : Matters in respect of erstwhile SmithKline Beecham (India) Limited: (i) ` 1,44.44 lakhs received from Beckman Instruments International S.A. on account of disputed alleged additional commission has been included under non-current provisions and Income tax paid thereon aggregating ` 64.77 lakhs has been included under other non-current assets. The Company is contesting the matter with the concerned authorities. (ii) Refund of surtax ` 96.81 lakhs, and interest thereon amounting to ` 48.52 lakhs, received during 1994, have not been adjusted against the provision for tax in the books of accounts and recognised as income respectively, since the Income tax department had filed a reference application against the income tax tribunal’s order which was pending before the High Court of Karnataka. The Company has received an order dated April 18, 2007 from the High Court of Karnataka which is partially in the Company’s 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.