GSK_Annual_Report_2021

Financial Statements GlaxoSmithKline Pharmaceuticals Limited 158 Current tax charge is based on taxable profit for the year. Taxable profit differs from profit as reported in the Statement of Profit and Loss because some items of income or expense are taxable or deductible in different years or may never be taxable or deductible. The Company’s liability for current tax is calculated using Indian tax rates and laws that have been enacted by the reporting date. Current tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority. The Company periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying amounts of assets and liabilities in the Balance Sheet and the corresponding tax bases used in the computation of taxable profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised, based on tax rates that have been enacted or substantively enacted by the reporting date. Deferred income tax assets and liabilities are off-set against each other and the resultant net amount is presented in the Balance Sheet, if and only when the Company currently has a legally enforceable right to set- off the current income tax assets and liabilities. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. i) Provision and contingent liabilities A provision is recognised if as a result of a past event, the Company has a present obligation (legal or constructive) that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. If the effect of time value of money is material, provisions are discounted using a current pre tax rate that reflects, when appropriate, the risks specific to the liability. The increase in the provision due to passage of time is recognised as an interest expense. A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions but are disclosed unless the possibility of outflow of resources is remote j) Other Accounting Policies These are consistent with the generally accepted accounting principles. 2 InvEstmEnt PropErtY - As at MarcH 31, 2021 ` in Lakhs As at March 31, 2021 As at March 31, 2020 Gross carrying amount Opening gross carrying amount/ Deemed cost 2.08 2.08 Additions (Improvements) - - Deduction - - Closing gross carrying amount 2.08 2.08 Accumulated Depreciation Opening Accumulated Depreciation - - Depreciation charge - - Closing Accumulated Depreciation - - Net carrying amount 2.08 2.08 ` in Lakhs As at March 31, 2021 As at March 31, 2020 (i) Fair value Investment properties 24,75.15 23,57.35 Estimation of fair value The company obtains independent valuations for its investment properties at least annually. The main inputs used for determining fair values of investment properties are the rental growth rates, expected vacancy rates, terminal yields and discount rates based on comparable transactions and industry data. Description of valuation method used The Company has a land site that have been considered as Investment Property as it is not currently operational at present. In view of management, the fair market value of the land site is not reliably measurable as there are very few recent transactions of comparable composition of these properties in the market. Further, the fair market value will be subject to numerous municipal deductions dependent upon the current use and intended use of the property. Consequently, it is not possible to ascertain and disclose the range of fair market value. The estimated Ready Reckoner at year end, based on latest published data and current stated use, totals ` 24,75.15 Lakhs for current year. Ready Reckoner rates are the prices of the residential property, land or commercial property for a given area that is published and regulated by the respective State Governments as a guide towards payment of stamp duty at the time of transaction. The Ready Reckoner is regarded as a gross value and does not represent the underlying fair market value to the company. ` in Lakhs As at March 31, 2021 As at March 31, 2020 NotE 3 Non current Financial assets - Loans Sundry Deposits 16.37 16.37 Advances recoverable 26.55 26.55 Less: Provision for bad and doubtful loans and advances (42.92) (42.92) - - NotE 4 Other non-current assets Balance with Government Authorities 4,28.70 1,51.54 4,28.70 1,51.54 NotE 5 Inventories (at lower of cost or net realisable value) Raw materials 11,35.26 - Packing materials 10.90 - Work-in-progress 23.98 - Finished goods 11,65.82 - 23,35.96 - NotE 6 Cash and cash equivalents Current account Balances with Banks 28.72 6,78.36 28.72 6,78.36 NotE 7 Bank balances other than cash and cash equivalents Term deposit with original maturity period of more than three months but less than twelve months - 10,00.00 Term deposit with original maturity period of more than twelve months 1.45 1.45 1.45 10,01.45