GSK_Annual_Report_2021

Notes to the Consolidated Financial Statements for the year ended March 31, 2021 (contd.) Financial Statements GlaxoSmithKline Pharmaceuticals Limited 208 (c) Reconciliation of effective tax rate ( ` in lakhs) Particulars As at March 31, 2021 As at March 31, 2020 Profit before tax 550,49.83 305,75.31 Tax using the Company’s domestic tax rate at 25.168% on Normal Profit 138,08.61 (60,68.37) Tax using the Company’s domestic tax rate in terms of Long Term Capital Gain at 22.88% 42.12 125,11.01 Total Tax 138,50.73 64,42.64 Tax effect of amounts which are not deductible / (taxable) in calculating taxable income: Corporate social responsibility expenditure 2,59.98 1,74.02 Donations - 1,00.08 Due to change in income tax rate of GlaxoSmithKline Pharmaceuticals Limited's from 34.944% to 25.168%. - 16,42.03 Due to change in Subsidiary's income tax rate from 26% to 25.168%. 5.18 Impairment of assets 52,60.11 175,40.33 Difference in rate on account of capital gain tax and Indexation - (63,65.55) Gratuity expense deductible on actual payment basis - (13,23.57) Actual utilisation of Vemgal related cost (1,77.00) - Other items 41.28 5,54.07 Tax effect on account of earlier years: Current tax on account of earlier years: - 24,85.62 Total tax Expense 192,35.10 212,54.85 Consequent to the reconciliation items shown above, the effective tax rate is 34.94% (Financial Year 2019-20: 69.52%) (d) Movement in deferred tax balances ( ` in lakhs) Particulars Balance as at April 1, 2020 Recognised in the Statement of Profit and Loss Recognised in OCI Balance as at March 31, 2021 Deferred tax asset Provision for Employee Benefits 25,97.91 1,27.13 68.90 27,93.94 Voluntary retirement schemes 3,81.89 (99.21) - 2,82.68 Allowance for doubtful debts 5,22.44 51.86 - 5,74.30 Interest on income tax refund not accounted but considered as taxable under the Income Tax Act,1961 16,30.54 - - 16,30.54 Expenses allowable for tax purpose when paid 76,39.66 (10,51.43) - 65,88.23 Total Deferred tax asset 127,72.44 (9,71.65) 68.90 118,69.69 Deferred tax liabilities Fiscal allowance on Property, Plant and Equipment and Other Intangible assets (17,23.80) 1,66.72 - (15,57.08) Deferred tax asset (net) 110,48.64 (8,04.93) 68.90 103,12.61 Note: Deferred Tax asset will be recognized in the books of account on completion of sale of assets at Vemgal site, after obtaining necessary regulatory approvals. Deferred Tax recognized earlier on Book Depreciation of Vemgal Assets will get reversed in the year of Sale of Vemgal Assets.