TIDMAG99
RNS Number : 6033D
GlaxoSmithKline Capital PLC
27 April 2017
Publication of GlaxoSmithKline Capital plc's
Annual Report 2016
Today, 27 April 2017, GlaxoSmithKline Capital plc
published on the GlaxoSmithKline Group website,
www.gsk.com, its Annual Report in respect of the
year ended 31 December 2016.
In compliance with Listing Rule 9.6.1 of the UK
Financial Conduct Authority ("FCA"), copies of
GlaxoSmithKline Capital plc's 2016 Annual Report,
have been submitted to the UK Listing Authority's
National Storage Mechanism and will shortly be
available for inspection at http:/www.morningstar.co.uk/UK/NSM.
In accordance with the FCA's Disclosure and Transparency
Rules 4.1 and 6.3.5, Appendix A to this announcement
contains GlaxoSmithKline Capital plc's 2016 Annual
Report, which includes a description of the principal
risks and uncertainties affecting it together with
a responsibility statement.
V A Whyte
Company Secretary
27 April 2017
Cautionary statement regarding forward-looking
statements
Under the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995, GlaxoSmithKline
plc (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. Such factors include, but
are not limited to, those described under Item
3.D "Principal risks and uncertainties" in GSK's
Annual Report on Form 20-F for 2016.
GlaxoSmithKline Capital plc
(Registered number: 2258699)
Annual Report
for the year ended 31 December 2016
Registered office
address:
980 Great West
Road
Brentford
Middlesex
TW8 9GS
GlaxoSmithKline Capital plc
(Registered number: 2258699)
Annual Report
for the year ended 31 December 2016
CONTENTS
Page
Strategic report 1
Directors' report 2-4
Independent auditors' report 5-6
Income statement 7
Statement of other comprehensive income 8
Balance sheet 9
Statement of changes in equity 10
Cash flow statement 11
Notes to the financial statements 12-24
The Directors present their Strategic report on
GlaxoSmithKline Capital plc (the "Company") for
the year ended 31 December 2016.
Principal activities and future developments
The Company is a member of the GlaxoSmithKline
Group (the "Group"). The Company's principal activity
is the issuance of notes under the Group's European
and US Medium Term Note programme and the provision
of financial services to other companies within
the Group.
The Directors do not envisage any change to the
nature of the business in the foreseeable future.
Review of business
The Company made a profit for the financial year
of GBP11,297k (2015: GBP8,749k), which will be
transferred to reserves. 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.
At 31 December 2016, the Company had in issue GBP7,874,858k
European Medium Term Notes and GBP3,214,961k US
Medium Term Notes (2015: GBP7,333,953k and GBP2,708,366k
respectively) which mature at dates between 2017
and 2045. All notes currently in issue pay interest
on a fixed rate basis.
Principal risks and uncertainties
The Directors of GlaxoSmithKline plc manage the
risks of the Group at a group level, rather than
at an individual statutory entity level. For this
reason, the Company's Directors believe that a
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 the Group's
2016 Annual Report which does not form part of
this report.
Key Performance Indicators (KPIs)
The Directors of the Group manage the Group's operations
on an operating segment basis. For this reason,
the Company's Directors believe that analysis 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 in the
Group's 2016 Annual Report which does not form
part of this report.
By order of the Board
A Walker
For and on behalf of Glaxo Group Limited
Corporate Director
27 April 2017
The Directors present their report on the Company
and the audited financial statements for the year
ended 31 December 2016.
Results and dividends
The Company's profit for the financial year is
shown in the income statement on page 7.
No dividend is proposed to the holders of Ordinary
Shares in respect of the year ended 31 December
2016 (2015: GBPnil).
Internal control framework
The Internal Control Framework is the means by
which the Group ensures compliance with laws and
regulations, the reliability of financial reporting
and comprehensive risk management. The Directors
of the Group are accountable for evaluating and
approving the effectiveness of the internal controls,
including financial, operational and compliance
controls, and risk management processes operated
by the Group.
To ensure effective governance and promote an ethical
culture, the Group has in place the Risk Oversight
and Compliance Council. This team of senior leaders
is authorised by the Board to assist the Audit
and Risk Committee in overseeing risk management
and internal control activities. It also provides
the business units with a framework for risk management
and upward escalation of significant risks, of
which the Company operates within. Further information
on the Group's Internal Control Framework is discussed
in the Group's 2016 Annual Report which does not
form part of this report.
Financial risk management
The Company issues notes under the Group's European
and US Medium Term Note programmes in order to
meet anticipated funding requirements. The strategy
is to diversify liquidity sources using a range
of facilities and to maintain broad access to funding
markets. Details of derivative financial instruments
and hedging and further information on risk management
policies, exposures to market, credit and liquidity
risk are disclosed in Note 2(l) and 4 respectively.
Previously in 2012, the Company entered into US
dollar Government treasury base rate Locks to manage
interest rate risk on its forecasted 3, 7 and 30
year US dollar debt issued under the Group's European
Medium Term Note programme.
At 31 December 2016, none of the Company's total
debt issuances were exposed to floating interest
rates and interest is paid on a fixed rate basis.
Directors and their interests
The Directors of the Company who were in office
during the year and up to the date of signing the
financial statements were as follows:
Mr S Dingemans
Edinburgh Pharmaceutical Industries Limited
Glaxo Group Limited
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 with
the exception of the Corporate Directors (Edinburgh
Pharmaceutical Industries Limited and Glaxo Group
Limited), where such an interest may arise in the
ordinary course of business.
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 their duties.
In addition, each of the Directors, who is an individual,
benefits from an indemnity given by another Group
company, GlaxoSmithKline Services Unlimited. This
indemnity is in respect of liabilities arising
out of third party proceedings to which the Director
is a party by virtue of his or her engagement in
the business of the Company.
Directors' interest
The following interests of the Director in office
at the year-end in the shares of the ultimate parent
undertaking, GlaxoSmithKline plc, have been notified
to the Company.
Ordinary Shares
At 31
At 31 Dec Dec
2015 Acquired Disposed 2016
Shares
---------------------------------- ---------- -------------------------------- ----------- --------
Mr S Dingemans 129,797 210,454 (153,817) 186,434
---------------------------------- ---------- -------------------------------- ----------- --------
At 31
At 31 Dec Exercised/ Dec
2015 Granted lapsed 2016
Options
----------------------------------- ---------- -------------------------------- ----------- --------
Mr S Dingemans - 19,008 (19,008) -
----------------------------------- ---------- -------------------------------- ----------- --------
At 31
At 31 Dec Exercised/ Dec
2015 Granted lapsed 2016
ShareSave
---------------------------------- ---------- -------------------------------- ----------- --------
Mr S Dingemans 720 208 (216) 712
---------------------------------- ---------- -------------------------------- ----------- --------
At 31
At 31 Dec Exercised/ Dec
2015 Granted lapsed 2016
Performance Share
Plan awards
----------------------------------- ---------- -------------------------------- ----------- --------
Mr S Dingemans 611,834 256,884 (225,372) 643,346
---------------------------------- ---------- -------------------------------- ----------- --------
At 31
At 31 Dec Exercised/ Dec
2015 Granted lapsed 2016
Deferred Annual Bonus
Plan
----------------------------------- ---------- -------------------------------- ----------- --------
Mr S Dingemans 99,458 81,761 (27,597) 153,622
---------------------------------- ---------- -------------------------------- ----------- --------
All share awards are over Ordinary shares of GlaxoSmithKline
plc.
Further details of the above-mentioned Plans are
disclosed in the 2016 Annual Report of GlaxoSmithKline
plc.
Statement of Directors' responsibilities
The Directors are responsible for preparing the
Annual Report and the financial statements in accordance
with applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that
law, the Directors have prepared the financial
statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 "Reduced Disclosure
Framework", and applicable law). Under company
law, the Directors must not approve the financial
statements unless they are satisfied that they
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 the financial
statements, the Directors are required to:
l select suitable accounting policies and then
apply them consistently;
l
state whether applicable United Kingdom Accounting
Standards, comprising FRS 101, have been followed,
subject to any material departures disclosed
and explained in the financial statements;
l make judgements and accounting estimates that
are reasonable and prudent; and
l prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show
and explain the Company's transactions and 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 2006.
The Directors 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.
The following items have been included in the Strategic
report on page 1:
l principal activities and future developments;
l review of business; and
l principal risks and uncertainties.
Governance
The Company's approach to the Modern Slavery Act
2015 is set by the Group. As part of their governance,
the Group reviewed and approved the approach to
the Modern Slavery Act 2015 during 2016.
Disclosure of information to auditors
As far as each of 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.
Independent auditors
PricewaterhouseCoopers LLP have been appointed
to act as the Company's auditors in accordance
with a resolution of the Board of Directors. A
resolution dealing with their reappointment will
be proposed at a General Meeting of the Company.
By order of the Board
A Walker
For and on behalf of Glaxo Group Limited
Corporate Director,
27 April 2017
Independent auditors' report to the members of
GlaxoSmithKline Capital plc
Report on the financial statements
Our opinion
In our opinion, GlaxoSmithKline Capital plc's financial
statements (the "financial statements"):
l give a true and fair view of the state of the
company's affairs at 31 December 2016 and of
its profit and cash flows for the year then
ended;
l have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and
l have been prepared in accordance with the requirements
of the Companies Act 2006.
What we have audited
The financial statements, included within the Annual
Report, comprise:
l the balance sheet at 31 December 2016;
l the income statement and statement of comprehensive
income for the year then ended;
l the cash flow statement for the year then ended;
l the statement of changes in equity for the year
then ended; and
l the notes to the financial statements, which
include a summary of significant accounting
policies and other explanatory information.
The financial reporting framework that has been
applied in the preparation of the financial statements
is United Kingdom Accounting Standards, comprising
FRS 101 "Reduced Disclosure Framework", and applicable
law (United Kingdom Generally Accepted Accounting
Practice).
In applying the financial reporting framework,
the directors have made a number of subjective
judgements, for example in respect of significant
accounting estimates. In making such estimates,
they have made assumptions and considered future
events.
Opinions on other matters prescribed by the Companies
Act 2006
In our opinion, based on the work undertaken in
the course of the audit:
l the information given in the Strategic report
and the Directors' report for the financial year
for which the financial statements are prepared
is consistent with the financial statements;
and
l the Strategic report and the Directors' report
have been prepared in accordance with applicable
legal requirements.
In addition, in light of the knowledge and understanding
of the company and its environment obtained in
the course of the audit, we are required to report
if we have identified any material misstatements
in the Strategic report and the Directors' report.
We have nothing to report in this respect.
Other matters on which we are required to report
by exception
Adequacy of accounting records and information
and explanations received
Under the Companies Act 2006, we are required to
report to you if, in our opinion:
l we have not received all the information and
explanations we require for our audit; or
l adequate accounting records have not been kept,
or returns adequate for our audit have not been
received from branches not visited by us; or
l the financial statements are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this
responsibility.
Independent auditors' report to the members of
GlaxoSmithKline Capital plc
Directors' remuneration
Under the Companies Act 2006, we are required to
report to you if, in our opinion, certain disclosures
of directors' remuneration specified by law are
not made. We have no exceptions to report arising
from this responsibility.
Responsibilities for the financial statements and
the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors'
responsibilities set out on page 4, the directors
are responsible for the preparation of the financial
statements and for being satisfied that they give
a true and fair view.
Our responsibility is to audit and express an opinion
on the financial statements in accordance with
applicable law and International Standards on Auditing
(UK and Ireland) ("ISAs (UK & Ireland)"). Those
standards require us to comply with the Auditing
Practices Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared
for and only for the company's members as a body
in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, 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.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs
(UK & Ireland). An audit involves obtaining evidence
about the amounts and disclosures in the financial
statements sufficient to give reasonable assurance
that the financial statements are free from material
misstatement, whether caused by fraud or error.
This includes an assessment of:
l whether the accounting policies are appropriate
to the company's circumstances and have been
consistently applied and adequately disclosed;
l the reasonableness of significant accounting
estimates made by the directors; and
l the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing
the directors' judgements against available evidence,
forming our own judgements and evaluating the disclosures
in the financial statements.
We test and examine information, using sampling
and other auditing techniques, to the extent we
consider necessary to provide a reasonable basis
for us to draw conclusions. We obtain audit evidence
through testing the effectiveness of controls,
substantive procedures or a combination of both.
In addition, we read all the financial and non-financial
information in the Annual Report to identify material
inconsistencies with the audited financial statements
and to identify any information that is apparently
materially incorrect based on, or materially inconsistent
with, the knowledge acquired by us in the course
of performing the audit. If we become aware of
any apparent material misstatements or inconsistencies,
we consider the implications for our report. With
respect to the Strategic report and Directors'
report, we consider whether those reports include
the disclosures required by applicable legal requirements.
Other matters
The Company has passed a resolution in accordance
with Section 506 of the Companies Act 2006 that
the senior statutory auditor's name should not
be stated.
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
27 April 2017
Income statement
for the year ended 31 December
2016
2016 2015
Notes GBP'000 GBP'000
================================ ====== ========== ==========
Other operating income 2,711 547
Finance income 8 399,340 394,271
Finance expense 9 (387,930) (383,849)
================================ ====== ========== ==========
Operating profit 6 14,121 10,969
Profit before taxation 14,121 10,969
Tax on profit 10 (2,824) (2,220)
================================ ====== ========== ==========
Profit for the financial year 11,297 8,749
-------------------------------- ------ ---------- ----------
The results disclosed above for both the current
year and prior year relate entirely to continuing
operations.
The notes on pages 12 to 24 are an integral part
of these financial statements.
Statement of comprehensive income
for the year ended 31 December
2016
2016 2015
Notes GBP'000 GBP'000
Profit for the financial year 11,297 8,749
Items that may be subsequently
reclassified to the Income statement:
Reclassification of cash flow
hedges to the Income statement 954 954
Deferred tax on cash flow hedges 10 (283) (433)
======================================== ====== ======== ========
Other comprehensive income for
the financial year 671 521
======================================== ====== ======== ========
Total comprehensive income for
the financial year 11,968 9,270
---------------------------------------- ------ -------- --------
The notes on pages 12 to 24 are an integral part
of these financial statements.
Balance Sheet
As at 31 December 2016
2016 2015
Notes GBP'000 GBP'000
------------------------------- ------ ------------- -------------
Non-current assets
Deferred tax assets 10 1,893 2,176
Loans and receivables 11 8,353,138 9,984,314
------------------------------- ------ ------------- -------------
Total non-current assets 8,355,031 9,986,490
------------------------------- ------ ------------- -------------
Current assets
Loans and receivables 11 2,767,682 74,346
Prepayment and accrued income 12 110,223 105,382
Cash and cash equivalents 2 2
=============================== ====== ============= =============
Total current assets 2,877,907 179,730
=============================== ====== ============= =============
Total assets 11,232,938 10,166,220
------------------------------- ------ ------------- -------------
Current liabilities
Other payables 13 (5,026) (2,200)
Short-term borrowings 14 (2,679,716) -
Accruals and deferred income 15 (106,431) (102,007)
------------------------------- ------ ------------- -------------
Creditors: amounts falling
due within one year (2,791,173) (104,207)
------------------------------- ------ ------------- -------------
Net current assets 86,734 75,523
------------------------------- ------ ------------- -------------
Non-current liabilities
Long-term borrowings 14 (8,410,103) (10,042,319)
------------------------------- ------ ------------- -------------
Creditors: amounts falling
due after more than one year (8,410,103) (10,042,319)
------------------------------- ------ ------------- -------------
Total liabilities (11,201,276) (10,146,526)
------------------------------- ------ ------------- -------------
Net assets 31,662 19,694
------------------------------- ------ ------------- -------------
Equity
Called up share capital 20 100 100
Other reserves 21 (9,243) (9,914)
Retained earnings 40,805 29,508
------------------------------- ------ ------------- -------------
Total equity 31,662 19,694
------------------------------- ------ ------------- -------------
The notes on pages 12 to 24 are an integral part
of these financial statements.
The financial statements on pages 7 to 24 were
approved by the Board of Directors on 27 April
2017 and signed on its behalf by:
A Walker
For and on behalf of Glaxo
Group Limited
Corporate Director
Statement of changes in equity
for the year ended 31 December 2016
Called
up share Other Retained Total
capital reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------
At 1 January 2015 100 (10,435) 20,759 10,424
----------------------------- ---------- ---------- ---------- --------
Profit for the financial
year - - 8,749 8,749
Other comprehensive income
for the financial year - 521 - 521
----------------------------- ---------- ---------- ---------- --------
At 31 December 2015 100 (9,914) 29,508 19,694
Profit for the financial
year - - 11,297 11,297
Other comprehensive income
for the financial year - 671 - 671
============================= ========== ========== ========== ========
At 31 December 2016 100 (9,243) 40,805 31,662
----------------------------- ---------- ---------- ---------- --------
The notes on pages 12 to 24 are an integral part
of these financial statements.
Cash flow statement
for the year ended 31 December 2016
2016 2015
Notes GBP'000 GBP'000
------------------------------------- ------ --------- ------------
Cash flow from operating activities
Operating profit 14,121 10,969
Adjustments reconciling profit
before tax to operating
cash flows 18 9,277 1,777,479
------------------------------------- ------ --------- ------------
Net cash inflow from operating
activities 23,398 1,788,448
------------------------------------- ------ --------- ------------
Cash flow from financing activities
Repayment of short-term borrowings - (1,780,815)
Decrease in loans with Group
undertakings (23,398) (7,634)
------------------------------------- ------ --------- ------------
Net cash outflow from financing
activities (23,398) (1,788,449)
------------------------------------- ------ --------- ------------
Net movement in cash in the
year - (1)
------------------------------------- ------ --------- ------------
Cash at beginning of year 2 3
Movement in cash - (1)
------------------------------------- ------ --------- ------------
Cash at end of year 2 2
------------------------------------- ------ --------- ------------
The notes on pages 12 to 24 are an integral part
of these financial statements.
1 Presentation of the financial statements
General information
GlaxoSmithKline Capital plc (the "Company") is a member
of the GlaxoSmithKline Group (the "Group"). The Company's
principal activity is the issuance of notes under
the Group's European and US Medium Term Note programmes
and the provision of financial services to other companies
within the Group.
The company is a public company limited by shares
and is incorporated and domiciled in the UK (England).
The address of the registered office is 980 Great
West Road, Brentford, Middlesex TW8 9GS.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation
of these financial statements are set out below. These
policies have been consistently applied, unless otherwise
stated. There have been no changes and no early adoptions
of accounting policies during the year.
(a) Basis of preparation
The financial statements have been prepared in accordance
with Financial Reporting Standard 100 "Application
of Financial Reporting Requirements" ("FRS 100") and
Financial Reporting Standard 101 "Reduced Disclosure
Framework" ("FRS 101").
These financial statements have been prepared on the
going concern basis under the historical cost convention
and in accordance with the Companies Act 2006 as applicable
to companies using FRS 101.
Disclosure exemptions adopted
In preparing these financial statements, the Company
has taken advantage of all disclosure exemptions conferred
by FRS 101. Therefore these financial statements do
not include:
l Paragraph 38 of IAS 1 "Presentation of financial
statements" comparative information requirements
in respect of:
(i) paragraph 79(a) (iv) of IAS 1;
l The following paragraphs of IAS 1 "Presentation
of financial statements":
- 16 (statement of compliance with all IFRS);
and
- 38B-D (additional comparative information)
l Paragraph 30 and 31 of IAS 8 "Accounting policies,
changes in accounting estimates and errors" (requirement
for the disclosure of information when an entity
has not applied a new IFRS that has been issued
but is not yet effective);
l Paragraph 17 of IAS 24 "Related party disclosures"
(key management compensation); and
l The requirements in IAS 24 "Related party disclosures"
to disclose related party transactions entered
into between two or more wholly owned members of
a group.
The financial statements of GlaxoSmithKline plc can
be obtained as described in Note 2(b).
The preparation of financial statements in conformity
with FRS 101 requires the use of certain critical
accounting estimates. It also requires management
to exercise its judgement in the process of applying
the company's accounting policies. The areas involving
a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to
the financial statements are disclosed in Note 3.
2 Summary of significant accounting policies (continued)
(b) Ultimate and immediate parent undertaking
The Company is a wholly owned subsidiary of the ultimate
parent company. GlaxoSmithKline plc, a company registered
in England and Wales and is the Company's ultimate
parent undertaking and controlling party. 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 Limited. These financial
statements are separate financial statements.
(c) Foreign currency transactions
Foreign currency transactions are booked in the functional
currency of the Company at the exchange rate ruling
on the date of the transaction. Foreign currency monetary
assets and liabilities are translated into functional
currency at rates of exchange ruling at the balance
sheet date. Exchange differences are included in the
income statement. The functional and presentation
currency of the Company is Pounds Sterling.
(d) Other operating income
Management service fees are recognised in other operating
income on an accruals basis.
(e) Finance income and expense
Finance income and expenses are recognised on an accruals
basis using the effective interest method.
(f) Financial assets
Loans and receivables
Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are
not quoted in an active market. They are included
in current assets, except for maturities greater than
12 months after the end of the reporting period. These
are classified as non-current assets. The Company's
loans and receivables represents intercompany balances
with other Group undertakings, which are carried at
amortised cost using the effective interest method.
(g) Impairment of financial assets
The Company assesses at the end of each reporting
period whether there is objective evidence that a
financial asset or a group of financial assets is
impaired. A financial asset or a group of financial
assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment
as a result of one or more events that occurred after
the initial recognition of the asset (a 'loss event')
and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset
or group of financial assets that can be reliably
estimated.
Evidence of impairment may include indications that
the debtors or a group of debtors is experiencing
significant financial difficulty, default or delinquency
in interest or principal payments, the probability
that they will enter bankruptcy or other financial
reorganisation, and where observable data indicates
that there is a measureable decrease in the estimated
future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
For loans and receivables, the amount of the loss
is measured as the difference between the asset's
carrying amount and the present value of estimated
future cash flows (excluding future credit losses
that have not been incurred) discounted at the financial
asset's original effective interest rate. The carrying
amount of the asset is reduced and the amount of the
loss is recognised in the income statement.
If, in a subsequent period, the amount of the impairment
loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised,
the reversal of the previously recognised impairment
loss is recognised in the income statement.
2 Summary of significant accounting policies (continued)
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and
current balances with banks and similar institutions.
They are readily convertible into known amounts of
cash and have an insignificant risk of changes in
value.
(i) Other payables
Other payables are initially recognised at fair value
and then held at amortised cost using the effective
interest method. Long-term payables are discounted
where the effect is material.
(j) Borrowings
All borrowings, which comprise European and US Medium
Term Notes, are initially recorded at the amount of
proceeds received, net of transaction costs. Borrowings
are subsequently carried at amortised cost, with the
difference between the proceeds, net of transaction
costs, and the amount due on redemption being recognised
as a charge to the income statement over the period
of the relevant borrowing.
(k) Taxation
Current tax is provided at the amounts expected to
be paid or refunded applying the rates that have been
enacted or substantively enacted by the balance sheet
date.
Deferred tax is provided in full, on temporary differences
arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements.
Deferred tax assets are recognised to the extent that
it is probably that future taxable profits will be
available against which the temporary differences
can be utilised. Deferred tax is provided on temporary
differences arising on investments in subsidiaries,
associates and joint ventures, except where the timing
of the reversal of the temporary differences can be
controlled and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred
tax is provided using rates of tax that have been
enacted or substantively enacted by the balance sheet
date.
(l) Derivative financial instruments and hedging
Derivative financial instruments can be used by the
Company to manage exposure to market risks. The Company
does not hold or issue derivative financial instruments
for trading or speculative purposes and does not currently
hold any derivative financial instruments.
Changes in the fair value of derivatives designated
as cash flow hedges are recognised in other comprehensive
income to the extent that the hedges are effective.
Ineffective portions are recognised in profit or loss
immediately. Amounts deferred in other comprehensive
income are reclassified to the income statement when
the hedged item affects profit or loss.
Changes in the fair value of any derivative instruments
that do not qualify for hedge accounting are recognised
immediately in the income statement.
The Company carries a balance in other comprehensive
income that arose from using US dollar Government
Treasury base rate locks for pre-hedging fluctuations
in long-term interest rates when pricing bonds issued
in prior years.
3 Key accounting judgements and estimates
In preparing the financial statements, management
is required to make estimates and assumptions that
affect the amounts of assets, liabilities, revenue
and expenses reported in the financial statements.
Actual amounts and results could differ from those
estimates. The following are considered to be the
key accounting judgements and estimates made.
(a) Taxation
Current tax is provided at the amounts expected to
be paid or refunded, and deferred tax is provided
on temporary differences between the tax bases of
assets and liabilities and their carrying amounts,
at the rates that have been enacted or substantively
enacted by the balance sheet date.
3 Key accounting judgements and estimates (continued)
Deferred tax assets are recognised to the extent that
it is probable that future taxable profits will be
available against which the temporary differences
can be utilised, based on managements assumptions
relating to the amounts and timing of future taxable
profits.
4 Financial risk management
Risk management is carried out by the Group's Corporate
Treasury under policies and procedures approved annually
by the Group's Board of Directors, and most recently
on 21 July 2016. The role of Corporate Treasury is
to monitor and manage the Group's external and internal
funding requirements and financial risks, covering
foreign exchange, interest rate, liquidity, and credit
risks, in support of the Group's strategic objectives.
A Treasury Management Group meeting, chaired by the
Group's Chief Financial Officer, also takes place
on a monthly basis to review treasury activities.
(a) Market risk
(i) Foreign exchange risk
The Company is exposed to foreign exchange risk
arising from various currency exposures, primarily
with respect to the US dollar and Euro, in respect
of bonds issued under the Group's European and
US Medium Term Note programmes.
The net proceeds of bond issuances received are
subsequently advanced as loans to other Group undertakings
in the same currency which minimises the foreign
translation exposure within the Company. On this
basis, foreign exchange risk is not considered
material and the Company has not prepared a sensitivity
analysis.
(ii) Interest rate risk
The Group's objective is to minimise the effective
net interest cost and to balance the mix of debt
at fixed and floating interest rates over time.
The policy on interest rate risk management limits
the amount of floating interest payments to a prescribed
percentage of operating profit.
The Company's interest rate risk arises mainly
from deposits with Group undertakings and cash
held at variable rates which expose the Company
to interest rate risk. The Company has borrowings,
comprising of European and US Medium Term Notes
and amounts owed by Group undertakings, which are
at fixed rates and expose the Company to fair value
interest rate risk.
The table below hypothetically shows the Company's
sensitivity to interest rates on its floating rate
US dollar, Sterling, and Euro financial assets.
The Company has considered movements in interest
rates over the last three years and has concluded
that a 1% (100 basis point) movement is a reasonable
benchmark. If interest rates applicable to floating
rate financial assets were to have increased by
1% (100 basis points), and assuming all other variables
had remained constant, it is estimated that the
Company's finance income for 2016 would have increased
by approximately GBP1,064k (2015: GBP743k increase
in finance income).
2016 2015
Increase Increase
in income in income
------------------------------------------------ ------------------------------ ---------------
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
1% (100 basis points) increase
in US dollar interest rates (2015:
1%) 339 221
1% (100 basis points) increase
in Sterling interest rates (2015:
1%) 350 291
1% (100 basis points) increase
in Euro interest rates (2015:
1%) 375 231
------------------------------------------------------ ------------------------------ ---------------
4 Financial risk management (continued)
The tables below illustrate the currency and interest
rate profiles arising from the Company's borrowings
and loans and receivable balances.
Currency and interest rate
risk profile of borrowings
Fixed rate
---------------------------------------------
At 31 December 2016 Weighted Average
average years for
interest which rate
rate is fixed Total
Currency % GBP'000
--------------------------- --- ------------- ------------------------------ ---------------
US dollars 2.2 3 (3,214,961)
Sterling 5.0 21 (4,050,413)
Euro 3.0 5 (3,824,445)
--------------------------------------- ------------- ------------------------------ ---------------
Total borrowings 3.4 10 (11,089,819)
Fixed rate
---------------------------------------------
At 31 December 2015 Weighted Average
average years for
interest which rate
rate is fixed Total
Currency % GBP'000
--------------------------- --- ------------- ------------------------------ ---------------
US dollars 2.0 2 (2,708,366)
Sterling 5.0 22 (4,047,819)
Euro 3.0 5 (3,286,134)
--------------------------------------- ------------- ------------------------------ ---------------
Total borrowings 3.4 10 (10,042,319)
--------------------------- --------- ------------- ------------------------------ ---------------
(a) Market risk
Currency and interest rate risk profile of loans and
receivables
At 31 December 2016 Fixed
rate Fixed rate Total
Currency GBP'000 GBP'000 GBP'000
--------------------------- --- ------------- ------------------------------ ---------------
US dollars 3,196,145 33,887 3,230,032
Sterling 4,024,023 34,996 4,059,019
Euro 3,794,309 37,460 3,831,769
--------------------------------------- ------------- ------------------------------ ---------------
Total loans and receivables 11,014,477 106,343 11,120,820
--------------------------------------- ------------- ------------------------------ ---------------
At 31 December 2015 Fixed
rate Fixed rate Total
Currency GBP'000 GBP'000 GBP'000
--------------------------- --- ------------- ------------------------------ ---------------
US dollars 2,696,069 22,109 2,718,178
Sterling 4,024,023 29,138 4,053,161
Euro 3,264,222 23,099 3,287,321
--------------------------------------- ------------- ------------------------------ ---------------
Total loans and receivables 9,984,314 74,346 10,058,660
--------------------------------------- ------------- ------------------------------ ---------------
4 Financial risk management (continued)
Net currency exposure
2016 2015
GBP'000 GBP'000
------------------ ------- ---- ------------- ------------------------------ ---------------
US dollars 15,071 9,812
Euro 7,324 1,187
------------------------------------------------------ ------------------------------ ---------------
22,395 10,999
(b) Credit risk
Credit risk is managed on a Group basis and arises
from cash and cash equivalents, derivative financial
instruments and deposits with banks and financial
institutions. The Group sets global counterparty limits
for each of its banking and investment counterparties
based on long-term credit ratings from Standard and
Poor's and Moody's Investor Services ("Moody's").
Usage of these limits is monitored daily and Corporate
Treasury actively manages its exposure to credit risk,
reducing surplus cash balances wherever possible.
There are no financial assets that are past due or
impaired as at 31 December 2016 (2015: GBPnil).
The Company did not hold any collateral as security
or obtained other credit enhancements as at 31 December
2016 (2015: GBPnil).
The Company considers its maximum exposure to credit
risk at 31 December 2016, without taking into account
any collateral held or other credit enhancements,
to be GBP11,231,045k (2015: GBP10,164,044k) being
the total of the Company's financial assets of which
the balances are all held within the GlaxoSmithKline
Group, see Note 16.
(c) Liquidity risk
Liquidity is managed centrally by the Group by borrowing
in order to meet anticipated funding requirements
and investing centrally managed liquid assets in bank
deposits, Aaa/AAA rated US Treasury and Treasury repo
only money market funds and Aaa/AAA rated liquidity
funds. The Group's cash flow forecast and funding
requirements are monitored on a monthly basis by the
Treasury Management Group and the strategy is to have
diversified liquidity sources using a range of facilities
and to maintain broad access to funding markets.
5 Capital management
The Group's financial strategy supports its strategic
priorities and is regularly reviewed by the Board.
The capital structure of the Group is managed through
an appropriate mix of debt and equity in order to
optimise returns to shareholders whilst maintaining
the Group's credit ratings that provide the Company
with flexibility to access debt capital markets on
attractive terms under the Group's European and US
Medium Term Note programmes.
The capital structure of the Company consists of net
debt of GBP11,089,817k (2015: GBP11,042,317k) and
shareholders' funds of GBP31,662k (2015: GBP19,694k)
(see Statement of changes in equity).
6 Operating profit
2016 2015
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
The following items have been
credited/(charged)
in operating profit:
Exchange gains on foreign currency
transactions 2,758 593
Management fee (47) (46)
--------------------------- ---------- ------------- ------------------------------ ---------------
6 Operating profit (continued)
GlaxoSmithKline Services Unlimited provides various
services and facilities to the Company including finance
and administrative services for which a management
fee was charged of GBP47,085 in 2016 compared with
GBP45,879 in 2015. Included in the management fee
is a charge for auditors' remuneration of GBP35,945
(2015: GBP34,898).
7 Employees
All of the Group's UK employees are remunerated by
GlaxoSmithKline Services Unlimited and receive no
remuneration from the Company. A management fee is
charged by GlaxoSmithKline Services Unlimited for
services provided to the Company (see Note 6). The
Company has no employees.
8 Finance income
2016 2015
GBP'000 GBP'000
------------------ ------- ---- ------------- ------------------------------ ---------------
Interest income arising from loans
and receivables 399,340 394,271
9 Finance expense
2016 2015
GBP'000 GBP'000
------------------ ------- ---- ------------- ------------------------------ ---------------
Interest expense arising on financial
liabilities at amortised cost (386,976) (382,895)
Reclassification of cash flow hedge
from other comprehensive income (954) (954)
------------------------------------------------------ ------------------------------ ---------------
Total finance expense (387,930) (383,849)
10 Taxation
2016 2015
Income tax expense on ordinary activities GBP'000 GBP'000
Current tax:
UK Corporation tax at 20.00% (2015:
20.25%) 2,824 2,133
====================================================== ============================== ===============
Total current tax 2,824 2,133
--------------------------------------- ------------- ------------------------------ ---------------
Deferred tax:
Origination and reversal
of timing differences - 78
Adjustments in respect
of previous years - -
--------------------------------- ------------- ------------------------------ ---------------
Change in tax rate - impact
on deferred tax - 9
--------------------------------------- ------------- ------------------------------ ---------------
Total deferred tax - 87
--------------------------------------- ------------- ------------------------------ ---------------
Total tax charge for the
year 2,824 2,220
The tax assessed for the year is the same as (2015:
lower than) the standard rate of corporation tax in
the UK for the year ended 31 December 2016 of 20.00%
(2015: 20.25%). The differences are explained below:
2016 2015
Tax expense included in other comprehensive
income GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
Deferred tax:
Fair value movements on cash flow
hedges 162 172
change in tax rates 121 261
------------------------------------------------------ ------------------------------ ---------------
Total tax expense included in other
comprehensive income 283 433
------------------------------------------------------ ------------------------------ ---------------
10 Taxation (continued)
2016 2015
Reconciliation of total tax charge GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
Profit on ordinary activities before
taxation 14,121 10,969
Profit on ordinary activities at
the UK statutory rate of 20.00% (2015:
20.25%) 2,824 2,221
Effects of:
Permanent disallowables - interest
treated as paid by ultimate parent 77,369 77,569
Permanent deductions - Group relief
received for no payment (77,369) (77,569)
Effects of changes in tax rates - (1)
------------------------------------------------------ ------------------------------ ---------------
Total tax charge for the year 2,824 2,220
Factors that may affect future tax
charges:
Reductions in the UK corporation tax rates from 20%
to 19% (effective 1 April 2017) and to 17% (effective
1 April 2020) were substantively enacted as part of
the Finance (No 2) Act 2015 on 26 October 2015 and
Finance Act 2016 on 15 September 2016. This will reduce
the Company's future current tax charge accordingly.
Deferred taxes have been calculated based on the rate
of 17% (2015: 18%) substantively enacted at the balance
sheet date.
Movement in deferred tax assets and
liabilities
Other net
temporary
differences Total
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
At 1 January 2016 2,176 2,176
Charge to income statement - -
Charge to comprehensive income (283) (283)
------------------------------------------------------ ------------------------------ ---------------
At 31 December 2016 1,893 1,893
After offsetting deferred tax assets and liabilities
where appropriate, the net deferred tax assets comprises:
2016 2015
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
Deferred tax assets 1,893 2,176
Deferred tax liabilities - -
------------------------------------------------ ------------------------------ ---------------
1,893 2,176
11 Loans and receivables
2016 2015
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
Amounts due within one year
Amounts owed by Group undertakings 2,767,682 74,346
------------------------------------------------------ ------------------------------ ---------------
Amounts due after more than one year
Amounts owed by Group undertakings 8,353,138 9,984,314
------------------------------------------------------ ------------------------------ ---------------
11,120,820 10,058,660
------------------------------------------------------ ------------------------------ ---------------
11 Loans and receivables (continued)
Amounts owed by Group undertakings include the net
proceeds of bond issuances that have been advanced
as loans totalling GBP11,014,477,000 (2015: GBP9,984,314k),
which are unsecured with interest charged at between
1.05% and 6.50% per annum and repayable at maturity
dates between 2017 and 2045. In addition, there are
deposits with Group undertakings totalling GBP106,343k
(2015: GBP74,346k), which are unsecured, interest
bearing and repayable on demand.
12 Prepayments and accrued income
2016 2015
GBP'000 GBP'000
Amounts due within one year 110,223 105,382
------------------------------------------------------ ------------------------------ ---------------
Accrued income relates to interest on amounts owed
by Group undertakings (see Note 11).
13 Other payables
2016 2015
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
Amounts falling due within one year
Amounts owed to Group undertakings (2,202) (67)
Corporation tax (2,824) (2,133)
(5,026) (2,200)
------------------------------------------------------ ------------------------------ ---------------
Amounts owed to Group undertakings are unsecured and
repayable on demand.
The corporation tax creditor contains amounts which
will be paid to fellow Group companies.
14 Borrowings
2016 2015
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
Amounts falling due within one year
Loans payable:
EUR European Medium Term Notes (1,067,597) -
US$ Medium Term Notes (1,612,119) -
------------------------------------------------ ------------------------------ ---------------
(2,679,716) -
------------------------------------------------ ------------------------------ ---------------
Amounts falling due after more than
one year
Loans payable:
EUR European Medium Term Notes (2,756,848) (3,286,134)
GBP European Medium Term Notes (4,050,413) (4,047,819)
US$ Medium Term Notes (1,602,842) (2,708,366)
------------------------------------------------------ ------------------------------ ---------------
(8,410,103) (10,042,319)
------------------------------------------------------ ------------------------------ ---------------
Total borrowings (11,089,819) (10,042,319)
------------------------------------------------------ ------------------------------ ---------------
14 Borrowings (continued)
2016 2015
Maturity of borrowings GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
In one year or less, or on demand
1.5% US$ US Medium Term Note 2017 (1,612,119) -
5.625% EUR European Medium Term
Note 2017 (1,067,597) -
------------------------------------------------ ------------------------------ ---------------
(2,679,716) -
------------------------------------------------ ------------------------------ ---------------
In more than one year, but not more than two years
1.5% US$ US Medium Term Note 2017 - (1,357,900)
5.625% EUR Euro Medium Term Note
2017 - (917,715)
------------------------------------------------------ ------------------------------ ---------------
- (2,275,615)
------------------ ------- ---------- ------------- ------------------------------ ---------------
In more than two years, but not
more than five years
0.6250% EUR European Medium Term
Note 2019 (1,276,450) (1,096,470)
------------------------------------------------------ ------------------------------ ---------------
(1,276,450) (1,096,470)
------------------------------------------------------ ------------------------------ ---------------
In more than five years
2.85% US$ US Medium Term Note 2022 (1,602,842) (1,350,466)
1.3750% EUR European Medium Term
Note 2024 (844,930) (725,827)
4.0% EUR European Medium Term Note
2025 (635,468) (546,122)
3.375% GBP European Medium Term Note
2027 (592,734) (592,069)
5.25% GBP European Medium Term Note
2033 (985,626) (984,776)
6.375% GBP European Medium Term Note
2039 (695,110) (694,889)
5.25% GBP European Medium Term Note
2042 (988,133) (987,662)
4.25% GBP European Medium Term Note
2045 (788,810) (788,423)
------------------------------------------------------ ------------------------------ ---------------
(7,133,653) (6,670,234)
------------------------------------------------------ ------------------------------ ---------------
Total borrowings (11,089,819) (10,042,319)
------------------------------------------------------ ------------------------------ ---------------
15 Accruals and deferred income
2016 2015
GBP'000 GBP'000
------------------------------------------------ ------------------------------ ---------------
Amounts falling due within one year (106,431) (102,007)
------------------------------------------------------ ------------------------------ ---------------
Accruals relates to interest payable
on borrowings (see Note 14).
Fair value of financial assets and
16 liabilities
The fair values of the financial assets and liabilities
are included at the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants at
the measurement date.
The following methods and assumptions were used to
estimate the fair values:
Cash and cash equivalents - approximates to the
-- carrying amount;
-- Borrowings (European and US Medium Term Notes)
- based on quoted market prices (a level 1 fair
value measurement);
-- Intercompany loans - approximates to the fair value
of borrowings (European and US Medium Term Notes);
and
-- Receivables and payables - approximates to the
carrying amount.
16 Fair value of financial assets and liabilities (continued)
The carrying amounts and the fair values of the Company's
financial assets and liabilities at 31 December 2016
and 31 December 2015 are illustrated below.
2016 2015
Carrying Fair Carrying Fair
value value value value
GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------- --- -------------- ------------- --------------- ---------------
Cash and cash equivalents 2 2 2 2
Loans and receivables:
Other receivables 110,223 110,223 105,382 105,382
Amounts owed by Group
undertakings 11,120,820 13,151,640 10,058,660 11,180,812
-------------------------------- -------------- ------------- --------------- ---------------
Total financial assets 11,231,045 13,261,865 10,164,044 11,286,196
-------------------------------- -------------- ------------- --------------- ---------------
Financial liabilities
measured at amortised
cost:
GBP European Medium
Term Notes (4,050,413) (5,762,307) (4,047,819) (4,895,199)
EUR European Medium
Term Notes (3,824,445) (4,147,107) (3,286,134) (3,549,695)
US$ US Medium Term
Notes (3,214,961) (3,242,226) (2,708,366) (2,735,918)
--------------------------- --- -------------- ------------- --------------- ---------------
(11,089,819) (13,151,640) (10,042,319) (11,180,812)
Other payables (108,633) (108,633) (102,074) (102,074)
Total financial
liabilities (11,198,452) (13,260,273) (10,144,393) (11,282,886)
--------------------------- --- -------------- ------------- --------------- ---------------
Net financial assets
and liabilities 32,593 1,592 19,651 3,310
-------------------------------- -------------- ------------- --------------- ---------------
The Company has no financial assets or liabilities
measured at fair value through profit and loss.
Financial liabilities measured at amortised cost for
which the fair value of GBP13,151,640k (2015: GBP11,180,812k)
is disclosed in the table above are categorised as
Level 1, where quoted prices in active markets are
used. Similarly, amounts owed by Group undertakings,
which include the net proceeds of bond issuances advanced
as loans, also approximate to the fair value of these
financial liabilities. All other assets and liabilities
approximate to the carrying amount.
Contractual cash flows for non-derivative financial
17 liabilities
The following table provides an analysis of the anticipated
contractual cash flows including interest payable
for the Company's non-derivative financial liabilities
on an undiscounted basis. Interest is calculated based
on debt held at 31 December without taking account
of future issuance.
2016 2015
Interest Interest
Debt on debt Debt on debt
GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------- --- -------------- ------------- --------------- ---------------
Due in less than one
year (2,681,279) (367,440) - (353,823)
Between one and two
years - (295,249) (2,279,662) (343,616)
Between two and three
years (1,282,051) (295,249) - (281,713)
Between three and four
years - (287,238) (1,102,941) (281,713)
Between four and five
years - (287,234) - (274,821)
Between five and ten
years (3,108,630) (1,180,179) (2,647,309) (1,228,272)
Greater than 10 years (4,100,000) (2,453,875) (4,100,000) (2,657,750)
-------------------------------- -------------- ------------- --------------- ---------------
Gross contractual cash
flows (11,171,960) (5,166,464) (10,129,912) (5,421,708)
-------------------------------- -------------- ------------- --------------- ---------------
Adjustments reconciling operating profit to operating
18 cash flows
2016 2015
GBP'000 GBP'000
Operating profit for the year 14,121 10,969
(Increase)/decrease in other
receivables (4,831) 26,660
Increase/(decrease) in other
payables 4,416 (28,198)
Exchange adjustments (2,758) (593)
Amortisation of bond costs 11,496 11,410
Reclassification of cash flow
hedges to the income statement 954 954
Loan repayments received from
Group undertakings - 1,767,246
------------------------------------------------------ ------------- --------------- ---------------
Net cash inflow from
operating activities 23,398 1,788,448
-------------------------------- -------------- ------------- --------------- ---------------
Reconciliation of net cash flow to movement in net
19 debt
Re-class-
ification
At 1 (long-term At 31
Jan to Cash Amorti- Exchange Dec
As at 31 December 2016 short-term) flows sation movements 2016
2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
===================== ============= ============= ============ ========== ============ =============
Cash at bank
and in hand 2 - - - - 2
Amounts owed
by Group
undertakings 10,058,660 - 23,398 - 1,038,762 11,120,820
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
10,058,662 - 23,398 - 1,038,762 11,120,822
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
Short-term
borrowings - (2,275,615) - (3,201) (400,900) (2,679,716)
Long-term borrowings (10,042,319) 2,275,615 - (8,295) (635,104) (8,410,103)
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
Total borrowing (10,042,319) - - (11,496) (1,036,004) (11,089,819)
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
Net surplus 16,343 - 23,398 (11,496) 2,758 31,003
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
Re-class-
ification
At 1 (long-term At 31
Jan to Cash Amorti- Exchange Dec
As at 31 December 2015 short-term) flows sation movements 2016
2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
Cash at bank
and in hand 3 - (1) - - 2
Amounts owed
by Group
undertakings 11,940,181 - (1,759,613) - (121,908) 10,058,660
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
11,940,184 - (1,759,614) - (121,908) 10,058,662
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
Short-term
borrowings (1,880,033) - 1,780,815 (1,229) 100,447 -
Long-term borrowings (10,054,192) - - (10,181) 22,054 (10,042,319)
Total borrowing (11,934,225) - 1,780,815 (11,410) 122,501 (10,042,319)
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
Net surplus 5,959 - 21,201 (11,410) 593 16,343
--------------------- ------------- ------------- ------------ ---------- ------------ -------------
20 Called up share capital
2016 2015
Number Number
of of 2016 2015
shares shares GBP'000 GBP'000
Authorised
Ordinary Shares of GBP1
each (2015: GBP1 each) 100,000 100,000 100 100
----------------------------------------- --------------------------- ---------- ------------ -------------
Issued and fully paid
Ordinary Shares of GBP1
each (2015: GBP1 each) 100,000 100,000 100 100
----------------------------------------- --------------------------- ---------- ------------ -------------
21 Other reserves
Other Retained Total
reserves earnings reserves
GBP'000 GBP'000 GBP'000
At 1 January 2016 (9,914) 29,508 19,594
Transferred from income and
expense in the year - 11,297 11,297
Reclassification of cash flow
hedges to the income statement 954 - 954
Deferred tax effect of cash
flow hedges (283) - (283)
---------------------------------------------------------------------- ---------- ------------ -------------
At 31 December 2016 (9,243) 40,805 31,562
---------------------------------------------------------------------- ---------- ------------ -------------
The cash flow hedge reserve relates to the cumulative
fair value changes of derivatives representing the
pre-hedging of debt issuances. The reserve is amortised
over the life of the subsequently issued bonds.
22 Contingent liabilities/assets
Group bank arrangement
The Company, together with fellow Group undertakings,
has entered into a Group banking arrangement with
the Company's principal bank. 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 as at 31 December 2016 is limited to the
amount held on its accounts with the bank. No loss
is expected to accrue to the Company from the agreement.
23 Directors' remuneration
During the year, the Directors of the Company, with
the exception of the Corporate Directors, were remunerated
as executives of the Group and received no remuneration
in respect of their services to the Company (2015:
GBPnil). Corporate Directors received no remuneration
during the year, either as executives of the Group
or in respect of their services to the Company (2015:
GBPnil).
24 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 101 "Reduced Disclosure
Framework" 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 OKODDPBKDPQB
(END) Dow Jones Newswires
April 27, 2017 11:26 ET (15:26 GMT)
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