TIDMAG99
RNS Number : 9690P
GlaxoSmithKline Capital PLC
01 April 2009
Publication of GlaxoSmithKline Capital plc's
Annual Report 2008
Today, 1 April 2009, GlaxoSmithKline Capital plc published on the Company's
website, www.gsk.com, its Annual Report in respect of the year ended 31 December
2008.
Copies of the Company's 2008 Annual Report have been submitted to the UK Listing
Authority, and will shortly be available for inspection at the UK Listing
Authority's Document Viewing Facility which is situated at:
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Tel: +44 (0) 20 7066 1000
In accordance with the requirements of Rule 4.1 of the Disclosure and
Transparency Rules of the UK Financial Services Authority which apply in respect
of accounting periods commencing after 20 January 2007, Appendix A to this
announcement contains the Company's 2008 Annual Report, which includes a
description of the principal risks and uncertainties affecting the Company
together with a responsibility statement.
V A Whyte
Company Secretary
1 April 2009
Cautionary statement regarding forward-looking statements
Under the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995, GSK and the Company caution investors that any
forward-looking statements or projections made by GSK and the Company, including
those made in this announcement, are subject to risks and uncertainties that may
cause actual results to differ materially from those projected. Factors that may
affect the Group's and the Company's operations are described in Appendix A of
this announcement.
APPENDIX A
GlaxoSmithKline Capital plc
(Registered Number 2258699)
Annual Report and Financial Statements
For the year ended 31st December 2008
+------------+------------+------------+-----------------+-----------+--------+--------+
| | | | | | | |
+------------+------------+------------+-----------------+-----------+--------+--------+
| | | | | Registered office |
| | | | | address: |
+------------+------------+------------+-----------------+-----------------------------+
| | | | | 980 Great West Road |
+------------+------------+------------+-----------------+-----------------------------+
| | | | | Brentford | | |
+------------+------------+------------+-----------------+-----------+--------+--------+
| | | | | Middlesex TW8 | |
| | | | | 9GS | |
+------------+------------+------------+-----------------+-----------+--------+--------+
Annual Report and Financial Statements
For the year ended 31st December 2008
+--------------------------------------------------+----------------------------+
| Index | |
+--------------------------------------------------+----------------------------+
| | |
+--------------------------------------------------+----------------------------+
| Directors' Report | |
+--------------------------------------------------+----------------------------+
| | |
+--------------------------------------------------+----------------------------+
| Independent Auditors' Report | |
+--------------------------------------------------+----------------------------+
| | |
+--------------------------------------------------+----------------------------+
| Profit and Loss Account | |
+--------------------------------------------------+----------------------------+
| | |
+--------------------------------------------------+----------------------------+
| Statement of Total Recognised Gains and Losses | |
+--------------------------------------------------+----------------------------+
| | |
+--------------------------------------------------+----------------------------+
| Balance Sheet | |
+--------------------------------------------------+----------------------------+
| | |
+--------------------------------------------------+----------------------------+
| Notes to the Financial Statements | |
+--------------------------------------------------+----------------------------+
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | |
+--+-----------------------------------+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Directors' Report for the year ended 31st December 2008 | | | |
+--+------------------------------------------------------------------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Directors submit their report and the audited financial statements for the year ended 31st |
| | December 2008. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Principal activities | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Company provides financial services to fellow subsidiaries of the GlaxoSmithKline Group of |
| | Companies ("the Group"). The Directors do not envisage any change to the nature of the |
| | business in the foreseeable future. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Review of business | | | | | | | |
+--+-----------------------------+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Company recorded a loss on ordinary activities after taxation for the year of GBP6,954,000 |
| | (2007 - profit of GBP3,359,000). The Directors are of the opinion that the current level of |
| | activity and the year end financial position are satisfactory and will remain so in the |
| | foreseeable future. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The retained loss for the year of GBP6,954,000 will be transferred from reserves (2007 - |
| | retained profit for the year of GBP3,359,000 transferred to reserves). |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Outstanding debt of GBP500,000,000 and EUR 1,000,000,000 in existence at 31 December 2007 was |
| | repaid during the year ended 31st December 2008 in April and October respectively. At 31st |
| | December 2008 there were no remaining loans due within one year on the Company's balance |
| | sheet. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Additionally, in March 2008 a new 31 year note for GBP700,000,000 was issued with interest |
| | fixed at 6.375% for maturity 9th March 2039. The bond was issued at a price of 99.648% |
| | (Re-offer) and a spread of plus 182.6 basis points. Net proceeds after selling fees were |
| | GBP693,161,000. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Following the maturity of the outstanding debt noted above which was swapped from Fixed Rate |
| | to Floating rate, all external debt is on a fixed rate basis. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Financial instruments | | | | | | | |
+--+-----------------------------+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Company had several interest rate swaps and a cross currency swap outstanding with |
| | commercial banks at 31st December 2007. These were entered into in order to manage the |
| | fixed/floating interest rate profile of debt. These instruments matured during the year and |
| | there are no derivatives outstanding at 31st December 2008. For details on Financial Risk |
| | Management, please see the Treasury Policy note (Note 2). |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Principal risks and uncertainties | | | | | | |
+--+-----------------------------------+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Directors of the ultimate parent undertaking, GlaxoSmithKline plc, manage the risks at a |
| | group level, rather than at an individual business unit level. For this reason, the Company's |
| | directors believe that a detailed discussion of the Group's risks would not be appropriate for |
| | an understanding of the development, performance or position of the Company's business. The |
| | principal risks and uncertainties of the Group, which include those of the Company, are |
| | discussed in detail on page 50 under Risk Factors in the Group's 2008 Annual Report, which |
| | does not form part of this report. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | In addition to the Financial Risk Management disclosed in the Treasury Policy note (Note 2), |
| | at a Company level, the principal risks and uncertainties relevant to the Group and the |
| | Company's business and financial condition and results would include risks from Global and |
| | Political Economic Conditions, Reliance on Information Technology, Taxation, and the potential |
| | impact of new or revised Accounting Standards. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Global and Political Economic Conditions |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Many of the world's largest economies, including the major markets in which the Group |
| | operates, and financial institutions currently face extreme financial difficulty, including a |
| | decline in asset prices, liquidity problems and limited availability of credit. It is |
| | uncertain how long this crisis will last, but many countries are concerned that their |
| | economies may enter a deep and prolonged recession. Such a decline in economic activity may |
| | have a material adverse effect on the Group's financial condition and ability to raise |
| | capital. The Group has no control over changes in inflation and interest rates, foreign |
| | currency exchange rates and controls or other economic factors affecting its businesses or the |
| | possibility of political unrest, legal and regulatory changes or nationalisation in |
| | jurisdictions in which the Group operates. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Reliance on Information Technology |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Company is increasingly dependent on information technology systems, including |
| | Internet-based systems, for internal communication as well as communication with financial |
| | counterparties. Any significant disruption of these systems, whether due to computer viruses |
| | or other outside incursions, could materially and adversely affect the Company's operations. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Taxation | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The effective tax rate on the Group's earnings benefits from the fact that a portion of its |
| | earnings is taxed at more favourable rates in some jurisdictions outside the UK. Changes in |
| | tax laws or in their application with respect to matters such as controlled companies or a |
| | restriction in tax relief allowed on the interest on intra-Group debt, could in turn increase |
| | the Company's effective tax rate and adversely affect its financial results. |
+--+------------------------------------------------------------------------------------------------+
| | |
+--+------------------------------------------------------------------------------------------------+
| | Impact of New or Revised Accounting Standards |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | New or revised accounting standards, rules and interpretations circulated from time to time by |
| | the standard setting board could result in changes to the recognition of income and expense |
| | that may adversely impact the Company's reported financial results. The Company believes that |
| | it complies with the appropriate regulatory requirements concerning its financial statements |
| | and disclosures. However, other companies have experienced investigations into potential |
| | non-compliance with accounting and disclosure requirements that have resulted in restatements |
| | of previously reported results and sometimes significant penalties. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Key performance indicators (KPIs) | | | | | | |
+--+-----------------------------------+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Directors of GlaxoSmithkline plc manage the Group's operations on a business sector basis. |
| | For this reason, the Company's directors believe that analyses using key performance |
| | indicators for the Company is not necessary or appropriate for an understanding of the |
| | development, performance or position of the Company's business. The development, performance |
| | and position of the Group are discussed on page 14, Key Performance Indicators, in the Group's |
| | 2008 Annual Report which does not form part of this report. |
+--+------------------------------------------------------------------------------------------------+
| | |
+--+------------------------------------------------------------------------------------------------+
| | Results and dividends | | | | | | | |
+--+-----------------------------+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Company's results for the financial year are shown in the profit and loss account. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | No dividend is proposed to the holders of Ordinary shares in respect of the year ended 31st |
| | December 2008 (2007 - nil). |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Directors and their interests | | | | | | |
+--+-----------------------------------+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Directors of the Company who served during the year are the following UK | |
| | registered entities: | |
+--+--------------------------------------------------------------------------------------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Edinburgh Pharmaceutical Industries Limited, company number SC5534 | |
+--+--------------------------------------------------------------------------------------+---------+
| | Glaxo Group Limited, company number 305979 | |
+--+--------------------------------------------------------------------------------------+---------+
| | |
+--+------------------------------------------------------------------------------------------------+
| | No Director had, during the year or at the end of the year, any material interest in any |
| | contract of significance to the Company's business, except where such an interest may arise in |
| | the ordinary course of business. Nor did any Director have any interest in the shares of the |
| | company or in the ultimate parent undertaking, GlaxoSmithKline plc. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Directors' Indemnity | | | | | | | |
+--+-----------------------------+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Each of the Directors benefits from an indemnity given by the Company under its articles of |
| | association. This indemnity is in respect of liabilities incurred by the Director in the |
| | execution and discharge of its duties. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Statement of Directors' Responsibilities in respect of the Annual Report and the financial |
| | statements |
+--+------------------------------------------------------------------------------------------------+
| | The Directors are responsible for preparing the Annual Report and the financial |
| | statements in accordance with applicable law and regulations. |
| | |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Company law requires the Directors to prepare financial statements for each financial year. |
| | Under that law the Directors have elected to prepare the financial statements in accordance |
| | with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting |
| | Standards and applicable law). The financial statements are required by law to give a true and |
| | fair view of the state of affairs of the company and of the profit or loss of the company for |
| | that period. |
+--+------------------------------------------------------------------------------------------------+
| | In preparing those financial statements, the Directors are required to: |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | * Select suitable accounting policies and then apply them consistently; | |
+--+--------------------------------------------------------------------------------------+---------+
| | * Make judgements and estimates that are reasonable and prudent; | |
+--+--------------------------------------------------------------------------------------+---------+
| | * State whether applicable UK accounting standards have been followed, subject to any |
| | material departures |
| | disclosed and explained in the financial statements; |
+--+------------------------------------------------------------------------------------------------+
| | * Prepare the financial statements on the going concern basis unless it is inappropriate to |
| | presume that the company will continue in business, in which case there should be supporting |
| | assumptions or qualifications as necessary. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Directors confirm that they have complied with the above requirements in preparing the |
| | financial statements. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Directors are responsible for keeping proper accounting records that disclose with |
| | reasonable accuracy at any time the financial position of the Company and enable them to |
| | ensure that the financial statements comply with the Companies Act 1985. They are also |
| | responsible for safeguarding the assets of the Company and hence for taking reasonable steps |
| | for the prevention and detection of fraud and other irregularities. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | As far as the Directors are aware, there is no relevant audit information of which the |
| | Company's auditors are unaware, and the Directors have taken all the steps that ought to have |
| | been taken to make themselves aware of any relevant audit information and to establish that |
| | the Company's auditors are aware of that information. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | After making enquiries, the Directors have a reasonable expectation that the Company has |
| | adequate resources to continue in operational existence for the foreseeable future. For this |
| | reason, they continue to adopt the going concern basis in preparing the accounts, due to |
| | ongoing support from the intermediate parent undertaking, GlaxoSmithKline Finance plc. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | The Company's Annual Report and financial statements for the year ended 31st December 2008 are |
| | available upon request in hard-copy form and made available on the Group's website. The |
| | Directors are responsible for the maintenance and integrity of the Annual Report on the |
| | website in accordance with UK legislation governing the preparation and dissemination of |
| | financial statements. Access to the website is available from outside the UK, where comparable |
| | legislation may be different. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Each of the current Directors, whose names and functions are listed under the section |
| | 'Directors and their interests' above confirms that, to the best of their knowledge: |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | * the Company's financial statements, which have been prepared in accordance with UK |
| | Generally Accepted Accounting Practice, give a true and fair view of the assets, liabilities, |
| | financial position and profit of the Company; |
+--+------------------------------------------------------------------------------------------------+
| | and | |
+--+--------------------------------------------------------------------------------------+---------+
| | * the Directors' report contained in the Annual Report includes a fair review of the |
| | development and performance of the business and the position of the Company, together with a |
| | description of the principal risks and uncertainties that it faces. |
+--+------------------------------------------------------------------------------------------------+
| | |
+--+------------------------------------------------------------------------------------------------+
| | Auditors | | |
+--+-----------------------+--------------------------------------------------------------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | PricewaterhouseCoopers LLP are willing to continue in office as auditors and resolutions |
| | dealing with their reappointment and remuneration will be proposed at a General Meeting of the |
| | Company. |
+--+------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | By order of the Board | | | | | | | |
+--+-----------------------------+-----+---------+---------+----------+---------+---------+---------+
| | | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
| | Paul Blackburn |
+--+------------------------------------------------------------------------------------------------+
| | For and on behalf of Glaxo Group Limited - Corporate Director | | |
+--+----------------------------------------------------------------------------+---------+---------+
| | 1st April 2009 | | | | | | | | |
+--+-----------------------+-----+-----+---------+---------+----------+---------+---------+---------+
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | Independent Auditors' Report to the members of GlaxoSmithKline Capital plc |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | We have audited the financial statements of GlaxoSmithKline Capital plc for the year |
| | ended 31st December 2008 which comprise the Profit and Loss Account, the Balance |
| | Sheet, the Statement of Total Recognised Gains and Losses and the related notes. These |
| | financial statements have been prepared under the accounting policies set out therein. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | Respective responsibilities of directors and auditors |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | The directors' responsibilities for preparing the financial statements in accordance |
| | with applicable law and United Kingdom Accounting Standards (United Kingdom Generally |
| | Accepted Accounting Practice) are set out in the Statement of Directors' |
| | Responsibilities. |
| | |
+--+----------------------------------------------------------------------------------------+
| | Our responsibility is to audit the financial statements in accordance with relevant |
| | legal and regulatory requirements and International Standards on Auditing (UK and |
| | Ireland). This report, including the opinion, has been prepared for and only for the |
| | company's members as a body in accordance with Section 235 of the Companies Act 1985 |
| | and for no other purpose. We do not, in giving this opinion, accept or assume |
| | responsibility for any other purpose or to any other person to whom this report is |
| | shown or into whose hands it may come save where expressly agreed by our prior consent |
| | in writing. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | We report to you our opinion as to whether the financial statements give a true and |
| | fair view and are properly prepared in accordance with the Companies Act 1985. We also |
| | report to you whether in our opinion the information given in the Directors' Report is |
| | consistent with the financial statements. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | In addition we report to you if, in our opinion, the Company has not kept proper |
| | accounting records, if we have not received all the information and explanations we |
| | require for our audit, or if information specified by law regarding directors' |
| | remuneration and other transactions is not disclosed. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | We read the Directors' Report and consider the implications for our report if we |
| | become aware of any apparent misstatements within it. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | Basis of audit opinion |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | We conducted our audit in accordance with International Standards on Auditing (UK and |
| | Ireland) issued by the Auditing Practices Board. An audit includes examination, on a |
| | test basis, of evidence relevant to the amounts and disclosures in the financial |
| | statements. It also includes an assessment of the significant estimates and judgements |
| | made by the directors in the preparation of the financial statements, and of whether |
| | the accounting policies are appropriate to the Company's circumstances, consistently |
| | applied and adequately disclosed. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | We planned and performed our audit so as to obtain all the information and |
| | explanations which we considered necessary in order to provide us with sufficient |
| | evidence to give reasonable assurance that the financial statements are free from |
| | material misstatement, whether caused by fraud or other irregularity or error. In |
| | forming our opinion we also evaluated the overall adequacy of the presentation of |
| | information in the financial statements. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | Opinion |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | In our opinion: |
| | . the financial statements give a true and fair view, in accordance with United |
| | Kingdom Generally Accepted |
| | Accounting Practice, of the state of the Company's affairs at 31st December 2008 |
| | and of its loss for the year |
| | then ended; |
| | . the financial statements have been properly prepared in accordance with the |
| | Companies Act 1985; and |
| | . the information given in the Directors' Report is consistent with the financial |
| | statements. |
+--+----------------------------------------------------------------------------------------+
| | |
+--+----------------------------------------------------------------------------------------+
| | PricewaterhouseCoopers LLP |
+--+----------------------------------------------------------------------------------------+
| | Chartered Accountants and Registered Auditors |
+--+----------------------------------------------------------------------------------------+
| | London |
+--+----------------------------------------------------------------------------------------+
| | 1st April 2009 |
+--+----------------------------------------------------------------------------------------+
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | Profit and Loss Account | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | For the year ended 31st December 2008 | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | 2008 | | 2007 |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | Notes | | GBP'000 | | GBP'000 |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | Administrative expenses | | | (892) | | (75) |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | Operating loss | 3 | | (892) | | (75) |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | Net interest receivable | 4 | | 4,424 | | 3,026 |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | Profit on ordinary activities before | | | 3,532 | | 2,951 |
| | taxation | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | Taxation | 5 | | (10,486) | | 408 |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | (Loss)/profit on ordinary activities | 11 | | (6,954) | | 3,359 |
| | after taxation | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | The results disclosed above relate entirely to continuing operations. |
+---+---------------------------------------------------------------------------------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | There is no difference between the profit on ordinary activities before |
| | taxation and the loss stated above and their historical cost equivalents. |
+---+---------------------------------------------------------------------------------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
| | The notes form part of these financial | | | | |
| | statements. | | | | |
+---+---------------------------------------------------+---+----------+---+----------+
| | | | | | | |
+---+------------------------------------------+--------+---+----------+---+----------+
+-----+----------------------------------------------+--------+---------+---+----------+
| | Statement of Total Recognised Gains and | | | | |
| | Losses | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | For the year ended 31st December 2008 | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | 2008 | | 2007 |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | GBP'000 | | GBP'000 |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | (Loss)/profit for the financial year | | (6,954) | | 3,359 |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | Fair value movement of cash flow hedge | | | | (3,142) |
| | reserve | | - | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | Amount recycled to profit and loss account | | 669 | | 387 |
+-----+----------------------------------------------+--------+---------+---+----------+
| | Tax on fair value movement of cash flow | | | | 942 |
| | hedge reserve | | - | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | Deferred Tax - effect of tax rate change | | | | (174) |
| | | | - | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | Prior year deferred tax movement in cash | | (2,441) | | |
| | flow hedge reserve | | | | - |
+-----+----------------------------------------------+--------+---------+---+----------+
| | Tax on amount recycled to profit and loss | | | | (116) |
| | account | | - | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | Total (losses)/gains recognised | | (8,726) | | 1,256 |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
| | The notes form part of these financial statements. | | | |
+-----+-------------------------------------------------------+---------+---+----------+
| | | | | | |
+-----+----------------------------------------------+--------+---------+---+----------+
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Balance Sheet | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | As at 31st December 2008 | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | 2008 | | 2007 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | Notes | | GBP'000 | | GBP'000 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Debtors: amounts due after one year | | | 7,427,980 | | 5,609,871 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Debtors: amounts due within one year | | | 104,695 | | 1,202,637 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Debtors | 6 | | 7,532,675 | | 6,812,508 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Derivative financial assets | 13 | | | | 118,731 |
| | | | | - | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Cash at bank | 8 | | 6 | | 4 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Current assets | | | 7,532,681 | | 6,931,243 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Loans due within one year | 8 | | | | (1,233,574) |
| | | | | - | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Creditors | 7 | | (113,285) | | (91,698) |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Derivative financial liabilities | 13 | | | | (83) |
| | | | | - | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Creditors: amounts due within one | | | (113,285) | | (1,325,355) |
| | year | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Net current assets | | | 7,419,396 | | 5,605,888 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Total assets less current liabilities | | | 7,419,396 | | 5,605,888 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Loans due after one year | 8 | | (7,431,013) | | (5,608,779) |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Creditors: amounts due after one year | | | (7,431,013) | | (5,608,779) |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Net liabilities | | | (11,617) | | (2,891) |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Capital and reserves | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Called up share capital | 10 | | 100 | | 100 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Profit and loss account | 11 | | (3,672) | | 3,282 |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Other reserves | 11 | | (8,045) | | (6,273) |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Equity shareholders' funds | 12 | | (11,617) | | (2,891) |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | The accounts were approved by the Board of Directors on 1st April 2009 and were |
| | signed on its behalf by: |
+-------+------------------------------------------------------------------------------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | Ashley Grist | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | For and on behalf of Edinburgh Pharmaceutical Industries Limited - Director |
+-------+------------------------------------------------------------------------------------+
| | | | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
| | The notes below form part of these financial | | | | |
| | statements. | | | | |
+-------+---------------------------------------+--------+---+-------------+---+-------------+
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Notes to the Financial Statements for the year ended 31st December | | | |
| | 2008 | | | |
+------+----------------------------------------------------------------------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| 1 | Accounting policies | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | The principal accounting policies adopted in the preparation of these financial |
| | statements are set out below. In addition, the Company has taken advantage of the |
| | exemption within FRS 29, 'Financial Instruments: Disclosure' from the disclosure |
| | requirements of this standard on the basis that the Company is included in the |
| | publicly available consolidated financial statements of the Group, issued by |
| | GlaxoSmithKline plc as its parent company, which include disclosures that comply with |
| | IFRS 7, 'Financial Instruments: Disclosures', which is equivalent to FRS 29. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (a) | Basis of accounting | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | These financial statements have been prepared on the going concern basis, due to |
| | ongoing support from the intermediate parent undertaking, GlaxoSmithKline Finance |
| | plc, under the historical cost convention, the accounting policies set out below, |
| | which have been applied consistently, and in accordance with the Companies Act 1985 |
| | and applicable UK Accounting Standards. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (b) | Foreign currency transactions | | | | | | |
| | | | | | | | |
+------+-------------------------------+--------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Foreign currency transactions are booked in local currency at the exchange rate |
| | ruling on the date of the transaction, or at the forward rate if hedged by a forward |
| | exchange contract. Foreign currency assets and liabilities are translated into local |
| | currency at rates of exchange ruling at the balance sheet date, or at the forward |
| | rate. Exchange differences are included in trading profit. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (c) | Dividends paid and received | | | | | | |
+------+-------------------------------+--------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Interim dividends paid and received are included in the profit and loss account in |
| | the period in which the related dividend is actually paid or received. Final |
| | dividends are recorded in the profit and loss account upon shareholder approval. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (d) | Interest | | | | | |
+------+----------------------------------------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Interest receivable and similar income and interest payable and similar charges are |
| | brought to account on an accruals basis. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (e) | Bond expenses | | | | | |
+------+----------------------------------------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Bond expenses are included as a component of the debt principal and are amortised |
| | using the effective interest rate over the term of the debt. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (f) | Expenditure | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Expenditure is recognised in respect of goods received when supplied in accordance |
| | with contractual terms. Provision is made when an obligation exists for a future |
| | liability in respect of a past event and where the amount of the obligation can be |
| | reliably estimated. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (g) | Debt instruments | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Debt instruments are stated at the amount of net proceeds adjusted to amortise the |
| | finance cost of debt using the effective interest rate method over the term of the |
| | debt, and for movements in the fair value of the bond, where hedge accounting is |
| | applicable. |
+------+---------------------------------------------------------------------------------------+
| | |
+------+---------------------------------------------------------------------------------------+
| (h) | Derivative financial instruments | | | | |
+------+----------------------------------------------------------+-----------+----+--------+--+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Derivative financial instruments are used to manage exposure to market risks from |
| | treasury operations. The principal derivative instruments used by the Company are |
| | interest rate swaps and cross currency swaps. The Company does not hold or issue |
| | derivative financial instruments for trading or speculative purposes. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Derivative financial instruments are initially recognised in the balance sheet at |
| | fair value on inception and then remeasured at subsequent reporting dates to fair |
| | value. Hedging derivatives are classified on inception as fair value hedges or cash |
| | flow hedges. Changes in the fair value of derivatives designated as fair value hedges |
| | are recorded in the profit and loss account, with the changes in the fair value of |
| | the hedged asset or liability. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Changes in the fair value of derivatives designated as cash flow hedges are |
| | recognised in equity. Amounts deferred in equity are transferred to the profit and |
| | loss account in line with the hedged transaction. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Changes in the fair value of any derivative instruments that do not qualify for hedge |
| | accounting are recognised immediately in the profit and loss account. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| (i) | Taxation | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Current tax is provided at the amounts expected to be paid, applying tax rates that |
| | have been enacted or substantially enacted by the balance sheet date. |
+------+---------------------------------------------------------------------------------------+
| | The Company accounts for taxation which is deferred or accelerated by reason of |
| | timing differences which have originated but not reversed by the balance sheet date. |
| | Deferred tax assets are only recognised to the extent that they are considered |
| | recoverable against future taxable profits. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
| | Deferred tax is measured at the average tax rates that are expected to apply in the |
| | periods in which the timing differences are expected to reverse. Deferred tax |
| | liabilities and assets are not discounted. |
+------+--------------------------+----+--------------+-----------+-----------+----+--------+--+
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| 2 | Treasury Policy | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | Group treasury policies noted below are those operated by GlaxoSmithKline Capital |
| | plc. |
+------+---------------------------------------------------------------------------------------+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Company's role in managing the Group objectives is primarily to manage the | |
| | Group's external funding requirements and the resulting financial risk. | |
+------+------------------------------------------------------------------------------------+--+
| | | |
+------+------------------------------------------------------------------------------------+--+
| (a) | Treasury | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Company's ultimate parent undertaking, GlaxoSmithKline plc, is a UK-based | |
| | business, reporting in sterling and paying dividends out of sterling profits. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The role of Corporate Treasury in the Group is to manage and monitor the Group's | |
| | external and internal funding requirements and financial risks in support of Group | |
| | corporate objectives. Treasury policies are governed by policies and procedures | |
| | approved by the Board of GlaxoSmithKline plc and monitored by a Treasury | |
| | Management Group ("TMG"). The Group maintains treasury control systems and | |
| | procedures to monitor foreign exchange, interest rate, liquidity, credit and other | |
| | financial risks. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| (b) | Liquidity | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Group operates globally, primarily through subsidiary companies established in | |
| | the markets in which the Group trades. Due to the nature of the Group's business, | |
| | with patent protection on many of the products in the Group's portfolio, the | |
| | Group's products compete largely on product efficacy rather than on price. Selling | |
| | margins are sufficient to cover normal operating costs and the Group's operating | |
| | subsidiaries are substantially cash generative. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | Operating cash flow is used to fund investment in the research and development of | |
| | new products as well as routine outflows of capital expenditure, tax and | |
| | dividends. The Group will from time to time have additional demands for finance, | |
| | such as for share purchases and acquisitions. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | GlaxoSmithKline operates at low levels of net debt relative to its market | |
| | capitalisation. In addition to the strong positive cash flow from normal trading | |
| | activities, additional liquidity is readily available via the US dollar commercial | |
| | paper programme. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| (c) | Treasury operations | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The objective of treasury activity is to manage the post-tax net cost/income of | |
| | financial operations to the benefit of Group earnings. The Company does not | |
| | operate as a profit centre. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | GlaxoSmithKline uses a variety of financial instruments, including derivatives, to | |
| | finance its operations and to manage market risks from those operations. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | GlaxoSmithKline uses a number of derivative financial instruments to manage the | |
| | market risks from Treasury operations. Derivative instruments, principally | |
| | comprising forward foreign currency contracts, interest rate and currency swaps, | |
| | are used by Corporate Treasury to swap borrowings and liquid assets into the | |
| | currencies required for Group purposes and to manage exposure to market risks from | |
| | changes in foreign exchange rates and interest rates. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | GlaxoSmithKline balances the use of borrowings and liquid assets having regard to: | |
| | the cash flow from operating activities and the currencies in which it is earned; | |
| | the tax cost of intra-group distributions; the currencies in which business assets | |
| | are denominated; and the post-tax cost of borrowings compared to the post-tax | |
| | return on liquid assets. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | Liquid assets surplus to the immediate operating requirements of Group companies | |
| | are invested and managed centrally by Corporate Treasury. Requirements of Group | |
| | companies for operating finance are met whenever possible from central resources. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | External borrowings, mainly managed centrally by Corporate Treasury, comprise a | |
| | portfolio of long and medium-term instruments in addition to short-term finance. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Group does not hold or issue derivative financial instruments for trading | |
| | purposes and the Group's Treasury policies specifically prohibit such activity. | |
| | All transactions in financial instruments are undertaken to manage the risks | |
| | arising from underlying business activities, not for speculation. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| (d) | Maturity and counterparty risk | | | | | |
+------+-------------------------------------------------------------+----+-----------+--+--+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Group manages its net borrowing requirements through a portfolio of long-term | |
| | borrowings, including bonds, together with short-term finance under a US$10 | |
| | billion commercial paper programme. At 31st December 2008, the Group also had $3.9 | |
| | billion committed un-drawn bank facilities. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Group has a Euro Medium Term Note programme of GBP10 billion, of which GBP7.9 | |
| | billion was in issue as at 31st December 2008, and a US Shelf Registration, of | |
| | which $11.1 billion (GBP7.7 billion) was in issue as at 31st December 2008. The | |
| | TMG monitors the cash flow forecast of the Group on a monthly basis. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Group's long-term borrowings mature at dates between 2010 and 2042. | |
+------+------------------------------------------------------------------------------------+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| (e) | Interest rate risk management | | | | | | |
+------+------------------------------------------------------+------+----+-----------+--+--+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Group's policy on interest rate risk management requires that the amount of | |
| | net borrowings at fixed rates increases with the ratio of forecast net interest | |
| | payable to Group trading profit. At 31st December 2008, GBPnil (2007 - GBP1,234 | |
| | million) of the Company's net borrowings were exposed to floating interest rates | |
| | after the effects of hedging. | |
+------+------------------------------------------------------------------------------------+--+
| (f) | Foreign exchange risk management | | | | | | | |
+------+-----------------------------------------+------------+------+----+-----------+--+--+--+
| | | | | | | | | | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
| | The Group seeks to denominate borrowings in the currencies of its principal assets | |
| | and cash flows. These are primarily denominated in US dollars, Euros and Sterling. | |
| | Certain borrowings are swapped into other currencies as required for Group | |
| | purposes. | |
+------+---------------------------+-------------+------------+------+----+-----------+--+--+--+
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+---+
| 3 | Operating loss | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The following items have been charged in | | | | |
| | operating profit: | | | | |
+------------+---------------------------------------------+-------------+-------------+-------------+-------------+
| | Exchange losses on foreign | | | | (857) | (61) |
| | currency transactions | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Management fee | | | | | | (35) | (14) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | (892) | (75) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | GlaxoSmithKline Services Unlimited provides various services and facilities to the |
| | Company including finance and administrative services for which a management fee is |
| | charged. Included in this charge is Auditor Remuneration of GBP35,155 (2007: GBP12,000). |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 4 | Net interest receivable | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Interest payable | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Net swap interest | | | | | 7,559 | (2,346) |
| | income/(expense) | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Interest on Medium-Term Notes | | | | (383,596) | (184,874) |
| | and Eurobonds | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Amortisation of bond | | | | | (7,868) | (4,368) |
| | expenses | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Ineffectiveness on fair | | | | | 3,411 | 667 |
| | value hedges | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | (380,494) | (190,921) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Interest | | | | | | | |
| | receivable | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | On loans with Group | | | | | 384,918 | 193,947 |
| | undertakings | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 4,424 | 3,026 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 5 | Taxation | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Taxation charge based on | | | | GBP'000 | GBP'000 |
| | profits for the period | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | UK corporation tax at 28.5% | | | | 1,007 | 885 |
| | (2007: 30%) | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Under/(over) provision in | | | | | 9,479 | (1,362) |
| | previous years | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Current tax for | | | | | | 10,486 | (477) |
| | period | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Deferred tax - effect of | | | | | - | 69 |
| | tax rate change | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 10,486 | (408) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Reconciliation of current | | | | GBP'000 | GBP'000 |
| | taxation charge | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Profit on ordinary activities | | | | 3,532 | 2,951 |
| | before taxation | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Profit on ordinary activities at the UK | | | 1,007 | 885 |
| | statutory rate 28.5% (2007: 30%) | | | | |
+------------+---------------------------------------------+-------------+-------------+-------------+-------------+
| | Permanent Disallowables - interest | | | 108,441 | 57,276 |
| | treated as paid by ultimate parent | | | | |
+------------+---------------------------------------------+-------------+-------------+-------------+-------------+
| | Permanent Deductions - group relief | | | (108,441) | (57,276) |
| | received for no payment | | | | |
+------------+---------------------------------------------+-------------+-------------+-------------+-------------+
| | (Over)/under provision in | | | | | 9,479 | (1,362) |
| | previous years | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Current tax charge for the | | | | | 10,486 | (477) |
| | period | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The prior year adjustments are in respect of various periods and arise from revision |
| | during the period of management's estimates, following agreements with the tax |
| | authorities and the subsequent amendments to UK group loss utilisation and payment |
| | allocation. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 6 | Debtors | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts due within one year | | | | | | |
| | | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts owed by Group | | | | | 1,116,879 |
| | undertakings - loans | | | | - | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Amounts owed by Group | | | | 103,850 | 82,351 |
| | undertakings - current account | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Deferred tax asset (see | | | | | 845 | 3,407 |
| | note 9) | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 104,695 | 1,202,637 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Amount due after one year | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts owed by Group | | | | | 7,427,980 | 5,609,871 |
| | undertakings | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 7,532,675 | 6,812,508 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 7 | Creditors | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts due within one year | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Taxation | | | | | | 886 | 771 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Other creditors | | | | | | 112,399 | 90,927 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 113,285 | 91,698 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The corporation tax creditor contains amounts which will be paid to fellow Group |
| | companies. |
+------------+-----------------------------------------------------------------------------------------------------+
| | The majority of other creditors relates to interest payable. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 8 | Net Debt | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Cash at bank | | | | | | 6 | 4 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts owed by Group | | | | 7,427,980 | 6,726,750 |
| | undertakings (see note 6) | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Interest rate | | | | | | - | 7,333 |
| | swaps | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Currency swaps | | | | | | - | 111,315 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 7,427,986 | 6,845,402 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Loans due within | | | | | | | |
| | one year: | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Eurobonds and Medium-Term | | | | | - | (1,233,574) |
| | Notes | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Loans due after | | | | | | | |
| | one year: | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Eurobonds and Medium-Term | | | | | (7,431,013) | (5,608,779) |
| | Notes | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Net debt | | | | | | (3,027) | 3,049 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | In March 2008 a new 31 year note for GBP700m was issued with interest fixed at 6.375% |
| | for maturity 9th March 2039. The bond was issued at a price of 99.648% (Re-offer) and a |
| | spread of plus 182.6 basis points. Net proceeds after selling fees were GBP693,161,000. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The GBP500m and EUR 1bn loans outstanding at 31 December 2007 were repaid during the |
| | year ended 31st December 2008 in April and October respectively. At 31st December 2008 |
| | there were no loans due within one year. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | In addition, Eurobonds and Medium-Term Notes have increased due to the amortisation of |
| | capitalised bond costs. The cumulative effect of amortisation of capitalised bond costs |
| | as at 31 December 2008 is GBP24,279,000 (2007 - GBP16,411,000). |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Debt is unsecured and there are no debt covenants in relation thereto. | |
+------------+---------------------------------------------------------------------------------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Loans due after one year | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Loans due after one year are repayable over various periods as follows: | |
+------------+---------------------------------------------------------------------------------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Between one and two years | | | | | - | - |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Between two and | | | | | | 2,872,115 | 2,193,675 |
| | five years | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | After five years | | | | | | 4,558,898 | 3,415,104 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 7,431,013 | 5,608,779 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The loans repayable between two and five years carry interest rates of 3 per cent and |
| | 5.125 per cent (EUR). The repayment dates are 18th June 2012 and 13th December 2012 |
| | respectively. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The loans repayable after five years carry interest rates of 5.625% and 4% (EUR), and |
| | 5.25%, 6.375% and 5.25% (GBP). The repayment dates are 13th December 2017, 16th June |
| | 2025, 19th December 2033, 9th March 2039 and 10th April 2042 respectively. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The loans due after 5 years are repayable other than by instalments. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 9 | Deferred taxation asset | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Short term timing | | | | | 845 | 3,407 |
| | differences | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 845 | 3,407 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Deferred tax asset | | | | | | | Total |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | At 1st January | | | | | | | 3,407 |
| | 2008 | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Prior year deferred tax | | | | | (2,441) |
| | movement in cash flow hedge | | | | | |
| | reserve | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | Other movements/transfer to | | | | | | (121) |
| | current tax | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | At 31st December | | | | | | | 845 |
| | 2008 | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | |
+------------+-----------------------------------------------------------------------------------------------------+
| 10 | Called up share capital - | | | | | |
| | equity interests | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | 2008 | 2007 | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | Number | Number | GBP'000 | GBP'000 |
| | | | | | of | of | | |
| | | | | | shares | shares | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Authorised | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Ordinary Shares of | | | | 100,000 | 100,000 | 100 | 100 |
| | GBP1 each | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Issued and fully | | | | | | | |
| | paid | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Ordinary Shares of | | | | 100,000 | 100,000 | 100 | 100 |
| | GBP1 each | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 11 | Reserves - equity interests | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | Profit & | | Cash flow | Total |
| | | | | | Loss | | hedge | Reserves |
| | | | | | account | | Reserve | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | GBP'000 | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | At 1st January | | | | 3,282 | | (6,273) | (2,991) |
| | 2008 | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Retained loss for the | | | (6,954) | | - | (6,954) |
| | financial year | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Movement in cash flow hedge | | | - | | (1,772) | (1,772) |
| | reserve | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | At 31st December | | | | (3,672) | | (8,045) | (11,717) |
| | 2008 | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 12 | Reconciliation of movements in shareholders' funds | | | |
+------------+-----------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | (Loss)/profit for the | | | | | (6,954) | 3,359 |
| | financial year | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Movement in cash flow hedge | | | | (1,772) | (2,103) |
| | reserve (net of taxation) | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Net addition to | | | | | (8,726) | 1,256 |
| | shareholders' funds | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Opening shareholders' funds | | | | | (2,891) | (4,147) |
| | | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Closing shareholders' funds - | | | | (11,617) | (2,891) |
| | equity interests | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 13 | Financial instruments and related disclosures | | | |
+------------+-----------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Policies | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Treasury Policies are detailed in note 2. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | |
+------------+-----------------------------------------------------------------------------------------------------+---+
| | Foreign exchange risk management | | | |
+------------+-----------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | At the end of the year the Company had no cross currency swaps in place in respect of |
| | foreign currency medium-term debt instruments. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Interest rate risk | | | | | | |
| | management | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | To manage the fixed/floating interest rate profile of debt, the Company held an interest |
| | rate swap and one cross currency swap which matured in April and October 2008 |
| | respectively when the underlying debt matured. Currently there are no interest rate |
| | swaps in place. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Fair Value of Derivatives | | | |
+------------+-----------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The Company had designated interest rate swaps and the interest element of cross |
| | currency swaps as fair value hedges. The risk being hedged was the variability of the |
| | fair value of the bonds arising from interest rate fluctuations. At 31st December 2008, |
| | no hedges were in place, the previous having matured as noted under Interest Rate Risk |
| | Management. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Concentrations of credit risk and credit exposures financial instruments |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The Company does not believe it is exposed to major concentrations of credit risk. The |
| | Company is exposed to credit-related losses in the event of non-performance by |
| | counterparties to financial instruments, but does not expect any counterparties to fail |
| | to meet their obligations. The Company applies GlaxoSmithKline plc Board approved limits |
| | to the amount of credit exposure to any one counterparty and employs strict minimum |
| | credit worthiness criteria as to the choice of counterparty. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Fair value of financial assets and liabilities | | | |
+------------+-----------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The table below presents the carrying amounts under UK GAAP and the fair values of the |
| | Company's financial assets and liabilities at 31st December 2008 and 31st December 2007. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The fair values of the financial assets and liabilities are included at the amount at |
| | which the instrument could be exchanged in a current transaction between willing |
| | parties, other than in a forced or liquidation sale. The following methods and |
| | assumptions were used to estimate the fair values shown above: |
+------------+-----------------------------------------------------------------------------------------------------+
| | * Cash at bank - approximates to the carrying amount;* |
| | Short-term loans and overdrafts - approximates to the carrying amount because of the |
| | short maturity of these instruments;* |
| | Medium-term loans - market value based on quoted market prices in the case of the |
| | Eurobonds and other fixed rate borrowings, approximates to the carrying amount in the |
| | case of floating rate bank loans and other loans;* |
| | Cross currency interest rate instruments - fair value is determined using the net |
| | present value of discounted cash flows;* |
| | Interest rate instruments - fair value is determined using the net present value of |
| | discounted cash flows;* |
| | Debtors and creditors - approximates to the carrying amount. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The following table sets out the classification of financial assets and liabilities per |
| | the Balance Sheet. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | At 31.12.08 | At 31.12.07 |
+------------+--------------------+--------+--+------------+---------------------------+---------------------------+
| | | | | | Carrying | Fair | Carrying | Fair Value |
| | | | | | Amount | Value | Amount | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Net debt | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Cash at bank | | | | 6 | 6 | 4 | 4 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts owed by Group | | | 7,427,980 | 7,427,980 | 6,726,750 | 6,726,750 |
| | undertakings | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Current asset financial | | | 7,427,986 | 7,427,986 | 6,726,754 | 6,726,754 |
| | instruments | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Sterling notes and | | | | (2,656,546) | (2,559,865) | (1,961,734) | (1,908,304) |
| | bonds | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | US dollar notes | | | | - | - | - | - |
| | and bonds | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Notes and bonds swapped into | | - | - | (497,462) | (496,345) |
| | US dollars | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | - | - | (497,462) | (496,345) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Euro notes and | | | | (4,774,467) | (4,977,438) | (4,383,157) | (4,281,799) |
| | bonds | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total borrowings | | | | (7,431,013) | (7,537,303) | (6,842,353) | (6,686,448) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total derivative instruments | | - | - | 118,648 | 118,648 |
| | for management of net debt | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total net debt (per note 8) | | | (3,027) | (109,317) | 3,049 | 158,954 |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Other debtors * | | | | 104,695 | 104,695 | 85,758 | 85,758 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Other creditors * | | | | (113,285) | (113,285) | (91,698) | (91,698) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Net financial assets and | | | (11,617) | (117,907) | (2,891) | 153,014 |
| | liabilities | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Comprising: | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total financial | | | | 7,532,681 | 7,532,681 | 6,931,243 | 6,931,243 |
| | assets | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total financial | | | | (7,544,298) | (7,650,588) | (6,934,134) | (6,778,229) |
| | liabilities | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total financial assets agree to current assets on the face of the Balance sheet. Total |
| | financial liabilities agree to the total of creditors due within and after one year on |
| | the face of the Balance sheet. Derivative assets and liabilities have been presented net |
| | for the purposes of this table. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | * including short-term trading balances with Group companies, and amounts relating to |
| | tax. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Derivative Instruments | | | | |
+------------+---------------------------------------------+-------------+-------------+-------------+-------------+
| | | | | | At 31.12.08 | At 31.12.07 |
+------------+--------------------+--------+--+------------+---------------------------+---------------------------+
| | | | | | Assets | Liabilities | Assets | Liabilities |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts due within one year | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Derivatives designated as | | - | - | 118,731 | 83 |
| | hedging instruments | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | - | - | 118,731 | 83 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Amounts due after one year | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Derivatives designated as | | - | - | - | - |
| | hedging instruments | | | | | |
+------------+--------------------------------+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | - | - | - | - |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total derivative | | | | - | - | 118,731 | 83 |
| | instruments for | | | | | | | |
| | management of net | | | | | | | |
| | debt | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The notional principal amount of the outstanding interest rate swap contracts as at 31st |
| | December 2008 was GBPnil (2007 - GBP1,235m). |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The notional principal amount of the outstanding cross currency swap contract at 31st |
| | December 2008 was GBPnil (2007 - GBP500m). |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The benchmark rate for determining interest payments for all floating rate financial |
| | liabilities is LIBOR as at the end of the reporting period. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Currency and interest rate risk profile of total liabilities | | |
+------------+-------------------------------------------------------------------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total financial liabilities below comprise total borrowings of GBP7,431,013,000 (2007 - |
| | GBP6,842,353,000) shown in Net Debt. Derivative liabilities of GBPnil are also included |
| | (2007 - GBP83,000). |
+------------+-----------------------------------------------------------------------------------------------------+
| | Financial liabilities as presented after the effect of currency and interest rate swaps |
| | are analysed below. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | Fixed rate | Floating | |
| | | | | | rate | |
+------------+--------------------+--------+--+----------------------------------------+-------------+-------------+
| | At 31st December | | | | Average | Average | | Total |
| | 2008 | | | | interest | years | | |
| | | | | | rate | for | | |
| | | | | | | which | | |
| | | | | | | rate is | | |
| | | | | | | fixed | | |
+------------+--------------------+--------+--+------------+-------------+ +-------------+-------------+
| | Currency | | | GBP'000 | % | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | US dollars | | | - | - | - | - | |
| | | | | | | | | - |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Sterling | | | 2,656,546 | 6.0 | 29 | - | 2,656,546 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Euro | | | 4,774,467 | 5.0 | 7 | - | 4,774,467 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total Adjusted Financial | | 7,431,013 | 5.4 | 15 | - | 7,431,013 |
| | Liabilities | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | Fixed rate | Floating | |
| | | | | | rate | |
+------------+--------------------+--------+--+----------------------------------------+-------------+-------------+
| | At 31st December | | | | Average | Average | | Total |
| | 2007 | | | | interest | years | | |
| | | | | | rate | for | | |
| | | | | | | which | | |
| | | | | | | rate is | | |
| | | | | | | fixed | | |
+------------+--------------------+--------+--+------------+-------------+ +-------------+-------------+
| | Currency | | | GBP'000 | % | | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | US dollars | | | - | - | - | 497,545 | 497,545 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Sterling | | | 1,961,734 | 5.0 | 30 | - | 1,961,734 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Euro | | | 3,647,045 | 5.0 | 8 | 736,112 | 4,383,157 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total Adjusted Financial | | 5,608,779 | 5.0 | 16 | 1,233,657 | 6,842,436 |
| | Liabilities | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The above average interest rate is a weighted average interest | | |
| | rate. | | |
+------------+-------------------------------------------------------------------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Currency and interest rate risk profile of current financial assets |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Financial assets as presented after the effect of currency and interest rate swaps are |
| | analysed below. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total financial assets below comprise cash at bank of GBP6,000 (2007 - GBP4,000), |
| | amounts owed by group undertakings of GBP7,427,980,000 (2007 - GBP6,726,750,000), and |
| | derivative financial assets due within one year of GBPnil (2007 - GBP118,731,000). |
| | Derivative financial assets due after one year were GBPnil (included in 2007 - GBPnil). |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | At 31st December | | | | | Fixed | Floating | Total |
| | 2008 | | | | | rate | rate | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Currency | | | | | GBP'000 | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | US dollars | | | | | - | 4 | 4 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Sterling | | | | | 2,672,286 | - | 2,672,286 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Euro | | | | | 4,755,694 | 1 | 4,755,695 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Other - Swiss Franc and | | | | - | 1 | 1 |
| | Japanese Yen | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total Adjusted Financial | | | | 7,427,980 | 6 | 7,427,986 |
| | Assets | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | At 31st December | | | | | Fixed | Floating | Total |
| | 2007 | | | | | rate | rate | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Currency | | | | | GBP'000 | GBP'000 | GBP'000 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | US dollars | | | | | - | 499,389 | 499,389 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Sterling | | | | | 1,973,156 | - | 1,973,156 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Euro | | | | | 3,636,707 | 736,225 | 4,372,932 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Total Adjusted Financial | | | | 5,609,863 | 1,235,614 | 6,845,477 |
| | Assets | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Currency exposure of net monetary assets / (liabilities) |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Monetary assets and liabilities denominated in foreign currency. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Net monetary assets/(liabilities) held in foreign | | GBP'000 | GBP'000 |
| | currency | | | |
+------------+-----------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | US dollars | | | | | | 4 | 1,844 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Euro | | | | | | (18,772) | (10,225) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Other - Swiss Franc and | | | | | 1 | |
| | Japanese Yen | | | | | | - |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | (18,767) | (8,381) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | Total | Total |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | 2008 | 2007 |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Maturity of financial | | | | | GBP'000 | GBP'000 |
| | liabilities | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Within one year or on | | | | | - | (1,233,574) |
| | demand | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Between one and two years | | | | | - | - |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | Between two and | | | | | | (2,872,115) | (2,193,675) |
| | five years | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | After five years | | | | | | (4,558,898) | (3,415,104) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | (7,431,013) | (6,842,353) |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The above table shows total borrowings only. |
+------------+-----------------------------------------------------------------------------------------------------+
| | Figures based on earlier of contractual re-pricing and maturity dates and exclude |
| | derivatives. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 14 | Employees | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The Company has no employees as all personnel are employed by other Group companies |
| | (2007 - nil). |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 15 | Directors' remuneration | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The Corporate Directors received no remuneration in respect of their services to the |
| | Company (2007 - GBPnil). |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 16 | Cash flow | | | | | | | |
| | statement | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | A cash flow statement has been included in the consolidated financial statements of |
| | GlaxoSmithKline plc, the ultimate parent undertaking. As a wholly owned subsidiary of |
| | the ultimate parent undertaking, advantage has been taken of the exemption afforded by |
| | FRS 1 'Cash Flow Statements' (Revised 1996) not to prepare a cash flow statement. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 17 | Contingent | | | | | | | |
| | liabilities | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | Group banking arrangement | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | The Company, together with fellow Group undertakings has entered into a Group banking |
| | arrangement with the Company's principal bankers. The bank holds the right to pay and |
| | apply funds from any account of the Company to settle any indebtedness to the bank of |
| | any other party to this agreement. The Company's maximum potential liability is limited |
| | to the amount held on its account with the bank at 31st December 2008. No loss is |
| | expected to accrue to the Company from the agreement. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 18 | Ultimate parent undertaking | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | GlaxoSmithKline plc, company number 3888792, a company registered in England and Wales, |
| | is the Company's ultimate parent undertaking. The largest and smallest group of |
| | undertakings for which group financial statements are prepared and which include the |
| | results of the Company are the consolidated financial statements of GlaxoSmithKline plc. |
| | Copies of the consolidated financial statements can be obtained from The Company |
| | Secretary, GlaxoSmithKline plc, 980 Great West Road, Brentford, Middlesex TW8 9GS. The |
| | immediate parent undertaking is SmithKline Beecham plc, company number 2337959, a |
| | company registered in England and Wales. |
+------------+-----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| 19 | Related party transactions | | | | | | |
+------------+-----------------------------+--+------------+-------------+-------------+-------------+-------------+
| | | | | | | | | |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+
| | As a wholly owned subsidiary of the ultimate parent company, GlaxoSmithKline plc, |
| | advantage has been taken of the exemption afforded by FRS 8 'Related Party Disclosures' |
| | not to disclose any related party transactions within the Group. There are no other |
| | related party transactions. |
+------------+--------------------+--------+--+------------+-------------+-------------+-------------+-------------+---+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKDKPABKDNQK
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