GSK_ Annual_Report_2021-22

GlaxoSmithKline Pharmaceuticals Limited | Annual Report 2021-22 NOTES TO THE FINANCIAL STATEMENTS for the year ended March 31, 2022 192 (b) Reconciliation of effective tax rate ( ` in lakhs) For the year ended March 31, 2022 For the year ended March 31, 2021 Profit /(loss) before tax 560.48 76.22 Tax using the Company’s domestic tax rate at 25.168% (Previous Year: 25.168%) 141.06 19.18 Tax effect of: Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Other items 0.07 (0.94) Due to change in income tax rate from 26% to 25.168% - - 141.13 18.24 The Company’s weighted average tax rates for the years ended March 31, 2022 and 2021 were 25.168%. Income tax expense was ` 31.88 for the years ended March 31, 2022 and nil for March 31, 2021 (c) Movement in deferred tax balances ( ` in lakhs) March 31, 2022 Net balance April 1, 2021 Recognised in profit or loss Recognised in OCI Net Deferred tax asset / (liability) Deferred tax asset Expenses allowable for tax purpose when paid 132.24 (109.25) - 22.99 Provision for pricing matters 13.43 - - 13.43 Tax assets (Liabilities) 145.68 (109.25) - 36.43 ( ` in lakhs) March 31, 2021 Net balance April 1, 2020 Recognised in profit or loss Recognised in OCI Net Deferred tax asset / (liability) Deferred tax asset Expenses allowable for tax purpose when paid 150.48 (18.24) - 1,32.24 Provision for pricing matters 13.43 - - 13.43 Tax assets (Liabilities) 163.91 (18.24) - 145.68 The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income in which the relevant entity operates and the period over which deferred income tax assets will be recovered. Note 26 : Financial instruments – Fair values and risk management A. Accounting classification and fair values The following table shows the carrying amounts and fair values of financial assets and financial liabilities including their levels presented below. ( ` in lakhs) As at March 31, 2022 As at March 31, 2021 Financial assets at amortised cost Cash and cash equivalents 5,39.59 28.72 Other bank balance 1.45 1.45 Total financial assets 5,41.04 30.17 Financial liabilities at amortised cost Security deposits received 0.63 0.63 Other non-current financial liabilities 0.72 0.72 Trade payables 28,09.84 22,07.94 Total financial liabilities 28,11.19 22,09.29 B. Fair Value Hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are measured at amortised cost and for which fair values are disclosed in the Standalone Financial Statements. Fair value of financial assets and liabilities measured at amortised cost ( ` in lakhs) As at March 31, 2022 As at March 31, 2021 Financial assets Financial liabilities Security deposits received Carrying value 0.63 0.63 Fair value 0.63 0.63 Other non-current liabilities Carrying value 0.72 0.72 Fair value 0.72 0.72 The amount of fair value of the above Financial assets and liabilities is considered to be insignificant in value and hence carrying value and the fair value is considered to be same. The carrying amounts of Cash and cash equivalents, other bank balance, Trade receivables, Trade payables are